← Real Estate Rookie
Loading summary
Transcript67 lines
- [00:00]
Ashley Kerr
The real estate market can feel like a maze with investors constantly searching for that perfect property to start building wealth. Today we're diving into the art of smart investing, understanding what makes a good deal for you and your portfolio.
- [00:15]
Tony J. Robinson
And our guest today is living proof that mastering deal analysis can literally transform your ability to scale. Zack Stanley went from cold calling businesses to becoming a savvy real estate investor with a 10 point property portfolio. Now, through meticulous deal analysis and a forward thinking approach that any Rick investor could adapt, Zach is going to share a thing or two about strategic wealth building.
- [00:41]
Ashley Kerr
This is the Real Estate Rookie podcast and I'm Ashley Kerr.
- [00:44]
Tony J. Robinson
And I'm Tony J. Robinson. Zach, thank you so much, brother. We're super excited to have you. Welcome to the Real Estate Rookie Podcast.
- [00:50]
Zack Stanley
Thank you guys for having me. I really appreciate it. I grew up on bigger pockets, so being here is kind of a full circle moment. It was, it was cool to get the call, come on here and man, I'm just. Couldn't be a bigger fan of bigger pockets.
- [01:02]
Ashley Kerr
Well, we're so excited to have you today. Zach, can you walk us through your transition from printer sales to real estate? What initially sparked your interest?
- [01:12]
Zack Stanley
I'll get to the spark part in a second. But before I was in printer sales, my first job out of college was in mold remediation. So I'm 6 4, £240 and I was crawling under houses remediating mold and man, that's not a fun thing for a big guy to do. And so I said, you know, let's take a step up in life, let's go to printer sales. Which is just felt slightly above that. So started doing printer sales. My dad has owned a company here for 30 years and I was like, all right, printer sales, here we go. Was actually one of the most successful printer salesmen they've ever had. Did a really good job, but it was for me a real mental grind, you know, doing cold calling. And I'm having to walk into 10 plus businesses a day and go, you know, who makes the decisions? Who's in charge of making business decisions with copiers here, which looking back from the older version of myself, it built a real good foundation for real estate. But it's tough. It's kind of like we're down there with furniture sales. That's how the public views copier salesman. Not a lot of trust. You gotta gain trust really quick. And it's tough, it's tough, it's a grind.
- [02:23]
Ashley Kerr
Zach, one of my partners is an auto dealer and does you know, auto sales. Just so out of curiosity, when I talk to him later, where does he kind of rank on the sales in hlo?
- [02:34]
Zack Stanley
He's slightly above printer sales, I would say. Yeah, we're, man, it's, it's just a tough industry as a whole. And at least for me, you know, I'm a very people pleasing person. I want them to be happy. And when, you know, if you guys were working a business and I came and I was like, let's, let's make a decision on a printer. You know, I mean, you're not going to be jumping for joy. So I got into real estate kind of transitioning into what that spark was. I was listening to bigger pockets and I was like, you know, maybe I can make an extra 10 or 20k a year, like maybe go on a trip, stave a little bit. You know that, that was the hope and that's why I got my real estate license. My first month in real estate, I made $20,000 and I was like, dang, like this could be, I'd never thought of real estate like this could actually be a job. I made 20,000. Now the next month was a couple months after that. Goose egg, goose egg, goose egg. But that spark was that first month where I was like, holy crap, like you can make a living with real estate. And that was, that was kind of the tick there.
- [03:35]
Tony J. Robinson
Zach, you said that being in sales you felt like gave you a good foundation to become a real estate investor. I really do believe that most people should experience the grind and the rejection that comes with sales because it does build a certain level of grittiness within you. But what specifically do you feel that you gained from going through the sales process? From being a salesperson, cold calling folks that's translated over to real estate investing?
- [04:04]
Zack Stanley
Tony, gritty is a really good word for, you know, what you're describing sales to be. It's a, it's. You wake up every day and you are just like really not wanting to go to work. You might have a shower, beer. Like that's the kind of thing that sales invokes out of you. And so I would say the foundation it built, I would say on the, on the real estate investor side of things, it gave me some systems and processes to follow, being able to take rejection really well. And no, it's not a personal thing. Even though I do take things personally sometimes I feel like that foundation was built really well there for the real estate agent side of things. I feel like it took it a step further to where I'm able to talk to anybody on the scale of people, people that I think aren't cool, people that I think are cool, people that I vibe with, people that I don't vibe with and have a, like a articulate conversation with just about anybody in real, you know, you're going to run into a wide range of people in real estate from people that you might have to fake like, you kind of like, and the people that you really, really like. And so it, it's allowed me to get that kind of foundation, that speed training in of like, hey, you gotta find something that clicks with somebody when you walk into this building. I don't care if it's. You saw a picture of the cast, you know, the NBA team on the wall. Like, make that a topic of conversation.
- [05:28]
Tony J. Robinson
Zach, I, I couldn't agree with you more. And I, I think like, sales is interesting because you're, you're a great salesperson. Depending on the industry, if you can close like 20 to 25% of the people that you talk to, imagine any other industry where if you failed 80% of the time, you would be considered great, right? So I think that it really just, it builds a certain level of perseverance. It builds a layer of thick skin so that when you are facing rejection, when you are facing adversity, I think it makes it a little bit easier to get through on that topic.
- [05:59]
Zack Stanley
What you said, the fail rate. I played four years of college baseball, and so, and in college baseball, if you're hitting, you know, 2, 2.5 out of every 10, you're, you're successful. And so that's that same percentage there. And so I have most of my life of knowing that most of the time I'm going to fail, but those wins are good. So just wanted to expand on that a little bit.
- [06:20]
Tony J. Robinson
Love that, man. And, and you obviously took that mindset into being a real estate agent, and you said 20,000 bucks in your first month. That's incredible, right? I think most, most agents probably don't make that in their first year just for, for folks because not, not, not everyone who's listening is going to say, hey, I want to be an agent, right? But for folks who maybe are thinking that as like their, their gateway drug into real estate investing, what do you think you did in that first month that allowed you to really hit the ground running?
- [06:48]
Zack Stanley
Man, I've been a product of just doing. I don't think. I just do. I jumped into the fire. I didn't know how to write a contract. I always tell this to people, there's always 55, 60 and 70 year olds that'll talk to you and say, if I was your age, I would have done X, Y and Z. And I just said, screw it, I'm going to do it. And so I have all these older, wiser men around me saying I would have done this, I would have done that. And so I'm just like, I have time in my life to fall on my face 100 times and get back up. If I lost my whole portfolio right now, I could figure it out. I could hit the ground running again. And so, man, I just look at things from a older version of myself and that's the kind of mindset that I take going into it.
- [07:30]
Ashley Kerr
Let's go into your investment strategy. So with your first two properties, you had blind faith for these purchases. Can you kind of describe what you mean by that? And then also how did your strategy evolve from those first two properties?
- [07:46]
Zack Stanley
Yeah, I don't even know if I would say the faith part. It was just straight up blind, man. I was Ray Charles in that thing. Just like I just threw a stack of cash at a home. That here's my buy box. Do I like it and can I swim at it? And it had a pool and it, it, I could sleep there. That was my, that was Zach Stanley's buy box. At the time I knew that, that speaking Tony to that same thing. I just, I just act and I do stuff and I don't take time to a fault sometimes. I don't take time to think. Now going, getting into my older years, like let's say older years, I'm 28, do think more but man, on those first two properties I was just, I was writing in appraisal gap coverages for money that I didn't have. I was praying, I was hoping and man, it's funny, those. The first property I had, knew nothing about real estate investing. Got it at the right time, grace of God kind of thing. And it's like I cash for like 850 bucks a month on it. It's been one of my best properties and like, but could have been my worst. Really, really could have been. Could have been my worst. So I was just like, can I afford it? Can I swim there? Can I sleep there? And that was my first kind of two buy boxes that evolved over time because you know, if I kept doing that, I would have been a really bad real estate investor. And so I became, you know, I basically use the bigger pockets rental property calculator tool and kept. I could talk an hour for on this topic itself. But I started running numbers over and over and over and over again for scenarios that I knew I wasn't going to. And I, I refined and refined my process because I saw a niche in the realtor market. There's 4,000 agents here locally and I think only 50 of us really understand how to advise somebody correctly on real estate investing. And so I said I got to figure this out. I think there's a lot of value that people are missing as realtors being able to advise somebody properly look at their financial portfolio and go, hey, I think you need to buy a single family home. Hey, you need to buy multi family. Here's the areas. And so I figured it out for my clients and in turn it made me figure it out for myself. And so I had to be really, really good at advising these real estate investors because you know, if you guys are interviewing me, you can sniff out BS pretty quick. You know, if you're talking to me you can, you can ask me a few questions and know if I'm just like know nothing or if, if I know actually know something. And so I had to get really confident and smart and know what cash on cash return was, know what cap rate was, know what the vacancy rates and kind of trial by far threw myself in there and became a biggerpockets preferred agent and was like all right, got to learn it.
- [10:30]
Tony J. Robinson
So I've talked to hundreds of other pro investors and we all automate in order to scale. So if you're losing way too much time on busy work then I need to tell you about Baselane. It's a trusted Biggerpockets pro partner. Now Pro investors use Baselane's banking and AI powered bookkeeping platform to organize their rental financials, automate rent collection and auto tax transactions in real time, giving you instant cash flow insights and reporting without any admin work. Also check out Baselane's other features like recurring payments, multi user access and free wires to save you money and time. Invest smarter, not harder. Click the link for your $100 bonus at base. Baselane.com BP running out of gas, that's.
- [11:12]
Ad
A problem that's avoidable. Owning a rental property without proper landlord insurance, that's a problem that's equally avoidable. Steadily landlord insurance can help. Steadily offers fast quotes on property and liability coverages that are tailor made for the real estate investor community. And they can even compare pricing from multiple carriers. For landlords looking to weigh their different options, you can rest easy knowing your investments are secure with steadily they're available online 24. 7 and they can start coverage as fast as the next day. Visit biggerpockets.com, to secure your investments with Steadily Insurance. Steadily Insurance, founded by landlords for landlords Landlords.
- [11:48]
Here's a quick tip. A standardized checklist for property inspections can save you time, money and headaches. Preventative maintenance means fewer expensive surprises later. Want to save even more? RentReady helps you stay on top of rent collection, lease management and maintenance requests all in one easy to use platform. And right now, you can get six months of rent ready for just $1. With promo code BP2025, visit rentready.com that's R E N T R E D I.com and use code BP2025 to get started.
- [12:17]
You ever thought about diving into real estate but got kind of stuck on where to start? I mean, of course you have.
- [12:21]
Tony J. Robinson
You're listening to this podcast.
- [12:22]
Ad
Well, we've got something that might just kickstart your journey. Enter Propstream, your secret weapon in the world of off market properties. With over 155 million properties at your fingertips, Propstream lets you uncover hidden gems right from your phone, tablet or computer. Propstream's got over 120 search filters from pre foreclosures to bankruptcy, helping you find motivated sellers faster than ever. And with public record data and MLS sales estimated accuracy of over 99%, you'll nail those comps every single time. They're even throwing in a learning academy to get you started on the right foot. Dive in with 50 free leads during their seven day free trial at propstream.com bp that's propstream.com bp like biggerpockets all.
- [13:03]
Tony J. Robinson
Right guys, welcome back. Now we've seen how Zach got his start and how he, he kind of acted first and thought later and how that that benefited him and, and how that's evolved over time. But I guess let's dive into exactly what you've done Zach, to start scaling up so you, you've kind of positioned yourself as, you know like an expert in and now finding the right deals. But I, I guess what does like comprehensive deal analysis look like for you? And I guess what advice would you give to a rookie who's thinking about analyzing deals for the first time?
- [13:33]
Zack Stanley
Yeah, I would let me start with giving advice to a rookie analyzing deals for the first time. I would say start analyzing deals like that's pretty straight up. Go on bigger pockets and use the rental property calculator. It's a tool that I use every week. I would say that for myself and for my clients, you know, I, I evolved in the way that you have to know the area that you're advising people in. And so I really know this area. There's college students where the rent cycles at certain times of the year work and sometimes that they don't work. There's vacancy rates that are 1.9% in Fayetteville and there's vacancy rates that are 6% in Centerton, which are areas here locally in northwest Arkansas. And so you have to know intimately. I mean, you're dealing with people's cash, 100, 200, $300,000. You're dealing with people's hard earned money. And so you have to know your stuff. You really have to know your stuff. And so for me, advising somebody, I would say a rookie someone as a rookie, I would highly suggest talking to a biggerpocket's preferred agent. I mean, it's like me going to the doctor and me having a sickness and not going to a doctor. You're a rookie agent. You're looking for deals, you're looking for expert advice. Find a local expert. You need a local expert who's going to advise you correctly. Now, on my end, it means I have to be really, really good with data, knowing that these investors are going to come back. And so if you do a really crappy job, they're not going to come back.
- [15:07]
Tony J. Robinson
And Zach, I love that analogy, right? And I think just to play on that even a little bit more, it's, it's like if I'm, if I'm having heart problems, I don't go to a podiatrist, I don't go to a foot doctor, I'm going to go to a cardiologist. And I think a lot can be said of, of agents as well. And there are some agents who do an incredible job of helping first time home buyers and they're great at speaking to that demographic. They're great at helping them think through what's actually within their budget. They're great at helping them actually find the house that they can start building their family in. That same agent may not be great for the person who wants to buy an investment property. Right. And I think sometimes as rookies we go with the agent who sold us our first home or we go with our cousin because she just got her license. And while it's well intentioned, I think it can at times point you in the wrong direction because they may not have the skill set that's necessary to actually help you find the right Deal. So I couldn't agree more that using a tool like the Bigger Pockets Agent Finder is a great way to find someone. And you know, Ash, I know you've worked with lots of different agents. Like what? What's your experience? Been there?
- [16:13]
Ashley Kerr
Yeah. Well, first of all, I can go back 10 years and pulled deal calculators. Properties that I analyzed are the Bigger Pockets calculators. They have them all saved in there still, which is pretty interesting to go back and look. But also if you ever come across a property that you had in the past, you have all your information saved right in there. But the first agent that I started working with was a family friend and I did not rely on this agent for any kind of advice on what market rents could be. What, you know, I was looking for in a property. I went into purchasing the property knowing that it was all on me. So if you can, if you feel confident being that person, then you can use an agent that's, you know, sells people their primary homes and knows what to look for in that. But it is so much more beneficial when you have an agent that is, that knows people too in that network. I had this situation where I was flipping a house and the sump pump inspection failed and it was going to delay our closing. And my agent was, she knew the neighbor who was best friends with the code enforcement officer and like it knew all of these people that just like got it done. And it was like if this would have been me with somebody who wasn't a well connected agent because they'd worked with other investors, worked, you know, with other people in that market, that it would have delayed my closing a lot longer than it did. So in my experience, like knowing the market is a huge thing and then if they're able to help with actual deal analysis and like know what do if you're going to do a long term buy and hold, like what actually makes a good rental property, I definitely think there's a huge advantage, especially for rookie investors if you need that help, like figure out what you're struggling with when analyzing a deal and find an agent that knows how to do that.
- [18:17]
Zack Stanley
Ashley, 100%. I really agree with you on that. I would say something that I help my clients with as well is like, Ashley, you come to me and you go, hey, I like this property. I'll go, sweet, let's look at it together. And so I'll run the numbers, I'll tell you, hey, you go run your numbers, I'll run mine. Let's meet back in the middle and see where we're off and I'll show you. Hey, here's why we calculate vacancy rate. Here's why we calculate for this home, I'm going to calculate 7% for capex instead of 10 because it's a brand new home. You know, there's things like that that a local agent can provide to you. There's also niche markets in the rental market that the comps don't show. So my family's been here since the 1820s. I know about this area and there's markets, how I personally invest, where I go after these niche rental markets where maybe I'm buying a little bit more expensive of a home and a little cooler of a home because I know my mortgage is going to be $2,800, but I know I can get 32 to 35. And that's not a typical buy box. But everyone thinks about getting into real estate. No one talks about exit strategy. And so that's something that I like to talk about with my clients. Hey, are we buying properties that are potentially easy to exit if we need to? Are we finding things that a renter wants to go into or do they want to rent this long term? Can you, can you rent it long term, midterm, short term? Do you have three exit strategy, three potential plays on this? We're not just going, you know, Tony and I know some properties just work for short term, but here locally we're able to go, hey, does this work short term, can it work midterm, can it work long term? And there's a lot of properties that work like that. So man, Ashley, I'd 100% agree. I'll sell you your dream home and I'm good at that. But I can put on a blindfold and walk backwards and do that. This, the investing side is where it gets a little nitty gritty.
- [19:59]
Ashley Kerr
Back to kind of follow up on the deal analysis piece, what are some of the common mistakes you see that rookies are making when they do their deal analysis?
- [20:08]
Zack Stanley
That's a great question. I would say a big one. My wife and I were actually talking about this, we've talked about this over the years is people scare themselves out of deals, especially rookies. They calculate way too much. You know, I'm conservative. My number running, you know, I'm going to run conservative numbers, but I see a lot of rookies running scared numbers. They're putting in 10, 15% in for vacancy and the vacancy is 5%. They're putting 10 to 12% on capital expenditures. When this is a brand new home. Like we don't need to be putting that. In my personal opinion, that's how, you know, if we ran numbers, how a lot of rookies run numbers, we'd never be buying homes. Like, we'd scare ourselves out of every single deal. And I talked to a lot of investors, rookie investors who scare themselves out of a lot of deals. Now, I'm not saying not to be conservative. I think that's a great thing to do. We have to be careful in our market, specifically in northwest Arkansas. We're able to kind, you can kind of fall on your face and get back up. We have a lot of Great Infrastructure and five Fortune 500 companies. I mean, half of the nation's wealthiest people live in northwest Arkansas. And so we have a bunch of things that help us here. But rookie agents will oftentimes what I see not well, sorry. Rookie investors will scare themselves out of deals with this hyper conservative number running. That's just one area that I see.
- [21:33]
Tony J. Robinson
And you touched on this a little bit earlier, Zach, about like the key metrics you're looking at. But what are the kind of the KPIs or key data points rookies should be considering as they're analyzing properties.
- [21:44]
Zack Stanley
I love looking at vacancy rate. That's something that I see rookies really scared of is they're going, how many if, if we buy this, how many months am I going without getting a renter in here? And so I like to show data to those rookie investors and go, hey, here's our, here's our data in northwest Arkansas, you know, quite literally, Fayetteville has a 1.9% vacancy rate. Rogers has a 5%. Like the whole area is below 6%. Like, you know, that's a big one. I like to throw and say, hey, you're not going to go more than a month, month and a half with the data that I'm seeing with, you know, you're not going to have to make more than one mortgage payment. And here's what the data shows. That's a big scare point that people have when getting into markets. How long am I going to be stuck with this before I get a renter in there? And so that's a key thing, I think rental comps, of course, probably coming in at first or second place. You got to have a really good idea of what you can get for rent. And you can't just have an agent telling you, yeah, you're going to get 2,800 bucks. And they know that like it probably 2,500 bucks. Like you can't be like shoving numbers in people's faces to get the $10,000 check and say see you later, good luck with your investment. You have to run good numbers and you know, that's a part of the market that like, you know, for my stuff, a lot of times the data doesn't show. I create my own kind of markets because I see a need. And so I would say if I had to pick a top two, it'd probably be make sure those rental comps are correct because that could make or break you. And then the vacancy rate, that's another big one for rookies. If I had to do a macro view for rookies there, I think on.
- [23:21]
Ashley Kerr
That point with the agents giving advice on what you could get for rent, one common thing that I've seen happen is the agent just assume because it's a really nice property or if you are going to redo it really well, they think that, oh wow, you can get this high amount. But in reality in some markets, even if you have the highest end finishes, there is still a cap as to what someone will actually pay in that market to live there. So there is this town that I just sold my last two properties and it was a lower income town and you know, markets rent were 600 to $800 for you know, two beds. And there was this beautiful property that went up and I had an agent bring it to me and say like, look at this. You'd be, you know, if you just rented this out, you did a couple of these things, whatever, you could get a crazy amount. But it was granite countertops, it was like Amish made wood cabinets. Like it was above and beyond with these finishes that nobody's going to pay 1200, 1300 dollars a month in rent because it's just not affordable, affordable in that area. So you have to also understand when you're looking at comparables as to what finishes are standard in that area. Because even if you have the nicest property, it doesn't mean that people can afford to pay the, the highest amount of rent to make your numbers work on the property too.
- [24:50]
Zack Stanley
I lost $15,000 this last year because I overdid a flip property. I was like, I'm going to put the highest end stuff. It works for rents, it works for flip properties. I was like, I'm going to make this how I want it. And it didn't work for the neighborhood. It was the, it was by far the best home in the neighborhood. And I ended up losing money. And so it was A lesson learned. It's the same thing for rent. You really got to know who your market is. Who are your tenants that are going to be moving in to there? What are their needs? Are they, are they, is it usually three people? Is it a full family of five? Like what, who am I renting to? That's a big thing. Good point, Ashley.
- [25:24]
Tony J. Robinson
Zach, I want to give Ricky's just a quick overview of what your portfolio looks like today. So how many properties, how many doors, what's kind of the mix of your portfolio right now?
- [25:34]
Zack Stanley
Yeah, so I've not super by calculation but I've started down this niche path of like finding nicer single family homes that make sense. I have 10 of them right now and so I have 10 single family homes right now. I also build a few homes. So I'll build homes and then sell it and use that capital to fund another build. And so I kind of, that's my one machine that I use and so there are 10 of them. The cash flow, I've noticed it's around 3,500 bucks a month, give or take. So I haven't had to make a mortgage payment in two years which has been really nice. I kind of have my accounts all cycling through one. And so for me personally I'm not going after the cash flow. I think the cash flow is great but I'm going after this long term grind, this 20, 30 year type of thing where Zach, Zach Stanley is going, hey, these 55 and 6 year olds said they wish they would have never sold. Well darn it, I'm not going to do it. Like I'm going to hold. I'm going to hold, you know, if the time is right, maybe I exit one. But I have this portfolio that I'm building of things are going to be really easy to exit if needed. They cash flow good? Good enough for me. It's about 350, 400 bucks a home. I wish everything could cash flow, a thousand bucks a home. But that just doesn't work like that in northwest Arkansas. You know, if I wanted a ton of cash flow I would go to a different market. Northwest Arkansas is a market that's supposed to double in population the next 15 years. We have a bunch of infrastructure going to the area. Everyone says it's the next Austin type of thing. So I'm not going after cash flow. Thank God for my clients. I get plenty of income from that. I don't need that. And so I'm going 10, 20, 30 year plan. How do we make this ride for the long haul, I'm buying assets that are usually newer, things that I don't have to worry about, things that are more turnkey. I can put a tenant in there, know they're going to be a high quality tenant, set it and forget it. I manage stuff myself. I need these tenants to be good people that are going to be paying over 2000 bucks a month on rent usually handle some stuff themselves too. So does that kind of encompass the question there?
- [27:41]
Tony J. Robinson
Absolutely, man. And I love the, the additional data you provided about like your market and what an insightful thing for you to know about where your city is headed given that you're not. You're doing it more so for the long term plays act. Do you know just like ballpark how much equity you have in Your portfolio of 10 properties?
- [27:59]
Zack Stanley
Right now it's just over a million dollars, which is, which is really nice. I was, I actually recently did that number and I was like, you know what, I'm pretty happy with that. You know, let's keep pushing forward. I don't like to run the numbers all the time because I get caught up in like, where am I in my portfolio? I just kind of like, just kind of like the stock market. I treat the homes like a small, like a small stock and I'm just like, I'm going to take this 60,000, this home, set it and forget it. You know how I invest in my index funds is I throw money in and I forget my password and I'll, I'll look at it here in 15 years. So I just, I want to treat these homes like really good bank accounts and I want to take my money, I want to put them in good bank accounts. I'm not looking for home runs. Zack Stanley is not swinging for the fence. I play college baseball, so I like baseball analogies. I'm looking for singles or doubles, and those singles and doubles sometimes turn into triples or home runs. And so if I can find those singles and I'm like, all day long, this is like just like an index fund as a house done. That's what I'm looking for in my portfolio.
- [29:00]
Ashley Kerr
I think if you have that strategy or that goal of building long term wealth and you have no immediate need to tap into the cash flow, you are at such an advantage to really build wealth and to become a successful investor because you're not, you can just continuously reinvest the cash flow that you do have. And it just continues to grow for the. When I first started, I used my cash flow to pay off my student Loan debt. That was like the thing, any little tiny squeeze of cash flow, that's what that went to. Then after that it was just reinvested. Reinvested. So now I've been investing for 10 years and some of those properties, it's like, oh my gosh, I have $150,000 in equity because, you know, mortgage pay down from my tenant, paying it down, appreciation value add of updating units. And it's like, wow, that happened in a flash. Like all of a sudden it seems like I just bought that property, property. And here it is, 10 years have flown by and I have $150,000. Like, that was pretty easy to do. And it's just continuing to grow and to pay down so that at some point you can cash in and take your millions and go buy an island and live there.
- [30:25]
Tony J. Robinson
I, I guess it reminds me of. I've shared the story before, but Jeff Bezos talked about Amazon's. One of Amazon's unique advantages wasn't their amazing supply chain. It wasn't their engineers, it wasn't their branding, their marketing. It was their, their ability to pursue patient capital or deploy their capital patiently. And basically what he said was like, if Amazon invests something into, into some new initiative, we're willing to wait 10 years to get paid back. Whereas a lot of our counterparts, a lot of our competitors, they want to get paid back in a year or two years. And the ability to just over and over and over again invest for not today, not tomorrow, but next week or next month gave them a very strong unique advantage. And I think just because of where we are in society and like so many things are sensationalized on social media, our attention spans are really short. Our patience is running thin. We all, a lot of Rickies want to rush to quit their jobs. And I'm not saying that that can't be a goal for you, but Zach, I think you're a great example of you didn't leave your job in business to business sales and just live off of your cash flow. You went out and got something else that was more related to what you want to do to still produce your active income. And now you can kind of let your portfolio, like you said, set it and forget it. And I think that's the mindset shift that more rookies need to take. It's like, it's fine if you're not happy in your job, it's fine if you want to do something different, but don't put so much pressure on the cash flow from your small portfolio to Completely replace what you were making for your day job. If there's a way for you to generate active income that you enjoy flipping development, becoming an agent, whatever it may be, do that in addition to building your wealth long term.
- [32:09]
Zack Stanley
Tony, that's a great point. Something my wife and I talk about is I go, I, I don't want to sit on the beach at 35, 40. Like, yeah, we'll have the vacations and we'll go over to Europe. And my little sister lives over in Europe. We go visit her in Vienna and we can do that with our lives. But I got 30, 40 years of like wanting to work in me. Why would I, you know, I was, I found myself at the beginning of my career chasing this hypothetical dream of like cash flow and just sitting on the beach and sipping a margarita. And I sat back and I go, that's not realistic. Like, I was made to work. I love my job. I love what I do. So I'm going to continue to have active income for a long period of time. Why don't I just invest it in the base hits that maybe don't cash flow a thousand bucks a month, but they're, they're, well, better than breaking even. They're things that I can sit and forget and Tony, I think that's a really good point.
- [33:01]
Tony J. Robinson
Zach, I want to hear more about how you finance your portfolio. And I got a few more questions for you as well. But we're going to take one final break before we get back with Zach. And while we're gone, Ricky's. If you haven't yet subscribed to the real estate Ricky YouTube channel, you can find us at Real Estate Ricky. We're like so close to 100,000 subscribers. And Ash and I want that place plaque so badly.
- [33:19]
Ashley Kerr
Tony, be honest. Tell them why we need the Ashley.
- [33:23]
Tony J. Robinson
Wants the plaque so she can look cool to her kids. Because they, they want to, they want to see her with the plaque. So we, we want to make sure we can fulfill, fulfill on that. So if you guys haven't yet, find us at Real Estate Ricky. We'll be right back after this.
- [33:36]
Ad
Running out of gas, that's a problem that's avoidable. Owning a rental property without proper landlord insurance, that's a problem that's equally avoidable. Steadily. Landlord insurance can help Steadily offers fast quotes on property and liability coverages that are tailor made for the real estate investor community. And they can even compare pricing from multiple carriers for landlords looking to weigh their different options. You can rest easy knowing your investments are secure. With steadily. They're available online 247 and they can start coverage as fast as the next day. Visit biggerpockets.comlandlordinsurance to secure your investments with Steadily Insurance Steadily Insurance, founded by landlords.
- [34:11]
For landlords Inspecting your rentals again, here's a pro tip. A simple checklist makes sure nothing gets overlooked. It saves you time and costly repairs down the road. And when it comes to managing your rentals, RentReady makes everything easier. Rent gets paid on time, leases get signed online, and maintenance requests don't get lost in your inbox. And if you're a BiggerPockets Pro member, I've got great news for you. RentReady is already included in your membership for free. Don't leave it sitting on the table. Log in to your BiggerPockets Pro account and start using Rent Ready today.
- [34:41]
Hey, listen up aspiring real estate moguls. I've got a secret weapon for you. Say goodbye to the traditional real estate grind and say hello to PropStream, the ultimate tool for finding off market properties. With a whopping 155 million properties in their database, Propstream opens doors you never even knew existed, Propstream also delivers public record data and MLS sales estimates with pinpoint accuracy, making comps a complete breeze. Ready to seal the deal? PropStream's got lead automation, skip tracing and top notch marketing tools to help you close deals like a pro. And the best part? They're throwing in a free learning academy to help you level up your skills. Try it out with 50 free leads during their 7 day free trial at www.propstream.com bp that's www.propstream.com BP Like BiggerPockets.
- [35:26]
Nobody does selling better than Shopify. Shopify is the home of the number one checkout on the planet and the not so secret secret with shop pay that boosts conversions up to 50 50%, meaning way less carts go abandoned and way more sales going through. So if you're into growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed, and everywhere in between. Businesses that sell more sell on Shopify. Upgrade your business and get the same checkout that Skims uses. Sign up for your $1 per month trial period for three months at shopify.com Westwood One all lowercase go to shopify.com Westwood One to upgrade your selling today. Shopify.com Westwood One at the home Depot.
- [36:16]
Spring Black Friday is here and we've got 14 days of deals to transform your space so what are you working on? How about a quick and stylish patio furniture update? And what's outdoor dining without a shiny new grill? Find a wide selection of grills under $300 like the next Grill 4 burner for only $229 at the home Depot. Then add a little ambiance with string lights. Shop 14 days of deals during Spring Black Friday now through April 16th at the home Depot.
- [36:45]
Tony J. Robinson
All right, Zach, man, you've dropped so much amazing knowledge here. And I think one, one thing I want to know, right, because you scaled pretty quickly, right, 10 properties in a relatively short period of time. I think what a lot of people get hung up on is, okay, how did you finance all of these things? And you kind of mentioned, right, you've got the developments you're doing, which we could probably talk about in an entire episode on its own. You've got the real, the real estate agent business. How are you funding all of these transactions?
- [37:12]
Zack Stanley
I'll say as a baseline, I'm very blessed. I'm one of the top 50 agents here locally. And so I do a lot of production and my active income is on the higher end. And so I'm able to fund these deals with a lot of active income. I'm also able to fund these things with doing builds. Like I'll build a home, take some cash and finance it like that. But my first two homes were secondary market, so traditional style financing. And then after that, my, you know, if you have a pretty big portfolio, you start to get a bit of a portfolio, secondary market starts hating you. And so I started going commercial. I developed a relationship with a commercial banker and her and I have have a really good relationship now to where it's literally today I just offered on another home. I said, hey, I'm going to offer on this. Here's blah, blah, blah, blah. And she was like pre approval letters in your inbox. Like, it's that simple. She already, she knows my goals, she knows my vision, she knows what I need to do. And so when I come to her and I say, hey, I'm going to buy this home, here's the thing, she'll go, I think you need to think about that one more time. Does this fit your goals? And so I have these local relationships with commercial bankers that know me intimately and they know my life. And I show my face and I'm like, hey, how are the kids? Hey, here's your favorite bottle of wine. Hope you like this. Hope the husband enjoys, you know, creating that local feel and grab is how I get some potential better financing terms, maybe see a deal before. I mean it's that I do most of my financing now commercially with local people.
- [38:42]
Ashley Kerr
So I definitely want to touch on the, the commercial side of lending because I think that's always not talked about enough with rookie investors as a way to fund the deals. But when you first started, were you putting 20% down? Were they conventional loans? What did that financing piece exactly look like?
- [39:01]
Zack Stanley
Our first like three to four were wife and I moving every year. We five, three and a half to 5% down. We moved in that thing. We knew we were going to be there for a year, move out onto the next. We're calculating, you know, we're just boom, boom, boom, boom. We're still doing it right now. I'm finally, and I could do a whole nother episode on this. I'm building a home for myself that I'm gonna, in two years I'll have five or six hundred thousand dollars of equity in it that I'll be able to in two years roll up to my next thing. So I'm finally building more of like a long term type of place we stay at. But man, we've been house hopping like as low as possible. Now we're able to now stay at one spot and do like stay at one spot, 20, deploy 20%, deploy 20%. But for a while there it was moving, stay there for a year, rent it out, next, repeat.
- [39:50]
Ashley Kerr
And I feel like you, when we asked you the financing piece, you kind of tried to justify that you were putting 20 down by mentioning well you know, I have a, a good paying like I, you know, good paying job like we have the money. But I think you're limiting yourself there because I'm sure there's millions of other people that are making the same amount of money as you but they're not living below their means to actually deploy, deploy that money. So I just wanted to give you more credit for that because even if somebody has a high earning job, that doesn't mean that they are saving the capital to deploy into these deals.
- [40:27]
Zack Stanley
I appreciate that. I mean it's, it's a lot of we eat every meal at the house. We, we really budget, we budget everything. We know our long term goals and so it is something where you, I could live up to the income level and I've seen that and others and I saw that I don't, don't really want that. I'd rather go after these things so that I can be, you know, better set later in life.
- [40:50]
Ashley Kerr
Well, I do have to ask moving every year, does there a moving company recommend? Because I just moved for the first time in a long time. It was awful experience.
- [40:59]
Zack Stanley
I have a good relationship with the moving company here, let me tell you. And my wife and I, we have like a bed, a dresser, a couch and boxes. Like, we're clean, minimalist. And they come in, it's 1000 bucks every move. It's really easy for us. So every move, I just get that thousand bucks ready, call my guy, he goes, need to move again? I'm like, yes, sir. They get the house here in a week.
- [41:21]
Tony J. Robinson
Zach, one of the things you mentioned that I want to circle back to is that you said you've built a relationship with a good commercial lender. And I really do think there's a lot of value in having a good relationship with the lender as you look to build your portfolio. Because, you know, every lender offers a slightly different suite of products, right. And one lender may, may be able to offer you X another owner can offer you I both on the same exact deal. Right. But they might approach from a different, different place. So if I'm a rookie and I'm just starting out, how can I go about finding these critical lending relationships? Like what you found with this lender?
- [41:57]
Zack Stanley
Tony, I think, I think you made a good point, which different lenders offer different things. And so I have a couple different lenders that I will use for different types of things. And so I don't just stick to one person. And she would say, yeah, you can't just stick to me. There's different deals that other people can do better. But for majority of my stuff, I do, I would say for rookie investors, start by talking to someone local, someone where you can show up and show your face. I think that says a lot in today's world is showing up, shaking a hand, looking somebody in the eyes. For me personally, it does a lot when I'm able to show up and a lot of the other commercial, you know, that commercial lender, a lot of the other clients, they might never see, but they're putting a name to a face. To me, it's tangible, it's real. Then I show up with a smile on my face, and you're just real, you're just a real person. I would say make those connections as a rookie agent, you know, have your secondary market lender, have a commercial lender, have somebody that's in private money or hard money, and there's, there's contacts for that. I like to have a little bit of Each, and I have four or five contacts for each kind of lender. And you guys know like the lending, the lending and creative financing can get very creative and very crazy. And so like I have a contact for all of that and, and I need it for my clients and for myself. Not so much the hard money part. Like I, I don't necessarily like need that for me personally, but I have that for my clients. So I would say get one or two from each sector and then start creating relationships. Start, you know, if you start sending them good deals, like they're gonna, don't send them bad stuff over and over again. Like they'll, they'll, you're gonna start texting them and they're gonna start ignoring it. But find good deals, get with that. Send the bad deals to me first. Let's vet them and then let's send them to them.
- [43:36]
Ashley Kerr
Now, before we wrap up here, you've mentioned new builds. So tell us, is this something you're going to continue doing going forward and what does your kind of strategy look like from here?
- [43:48]
Zack Stanley
Yeah, I would say I'm not like the world's biggest production builder. I build a couple homes a year, we're talking two or three. But they're very strategic and I understand my going into them. I like new builds over flips personally because I know I can almost calculate to a tee how much money I'm going to make. I, I know exactly what it's going to cost going into it. I know what my comps are and I build a big enough budget to where like, hey, if we're way under, I'm still good, we're still in the positive. And so I'm able to take that.
- [44:17]
Tony J. Robinson
I.
- [44:17]
Zack Stanley
This, I would say it's a trend that I'll continue to do. Maybe, I mean, I'm 28 years old. I would say maybe a 35 to 40 year old Zack Stanley pursues that a little more. But as of right now, I'm enjoying doing the one offs and then I'm building my personal home, which is a cool. Some of my builder buddies were like, hey Zach, you gotta start building your home by yourself, getting that huge chunk of equity and then in two years roll it up into your next home. And I ran it by a bunch of people and they're like, yeah, that's what a lot of people do. You know, I just rolled blah, blah, blah into my dream home or whatever and I was like, sweet, let's do it. That's kind of been the story of my investing journey is Sweet. Let's do it. Let's just do it. Like I hear something good, let's do it. And if I fail, oh, well, that's kind of my. My motto.
- [45:03]
Tony J. Robinson
Zach. We recently interviewed a good friend of ours, Katie Neeson. She was episode 537, and her whole strategy was redevelopment. So similar to development, but instead of just like finding any plot of land, she would look for plots of land where either existing structures were or existing structures are that she can tear down and build back up. And for any of our rookies that are listening that want to get maybe a master class on what that looks like, you can check out episode 537 with Katie.
- [45:29]
Ashley Kerr
Well, Zach, thank you so much for joining us today. We've really enjoyed having you on the podcast, sharing your experience and what we should be looking for in finding our own agent in our own market. If you would like to find an agent like Zach, you can go to biggerpockets.com agent finder. Well, Zach, where can more people reach out to you and find you?
- [45:50]
Zack Stanley
Yeah, so I'm in the northwest Arkansas Market, which is the northwest corner of Arkansas, kind of Walmartville over here. You can text me. Call me at 479-466-7600. You can look me up on LinkedIn. Zack Stanley. Just look for someone with a great beard and look me up on Instagram. Same thing. Just look for Zack Stanley. Zack Stanley.
- [46:11]
Ashley Kerr
I'm Ashley and he's Tony, and you've been listening to the Real estate Rookie podcast and we'll see you guys on the next episode.