With strong job growth, population increase, health care access, education opportunities, and so much more, the Tar Heel State has become a haven for some of the best real estate deals.  Today, Scott Carson interviews realtor, real estate investor, the owner of Blue Chariot Realty, and the podcast host of ….and Landlord, Jonathan Taylor Smith, on the North Carolina real estate market and how he is leveraging his knowledge and resources to succeed. Johnathan shares what makes him different from other realtors, how he started as a note investor, and why he loves the Raleigh-Durham market. If you want to know your chances of becoming successful in the area, listen to Jonathan as he highlights some great real estate experiences.

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Watch the episode here

 

Listen to the podcast here

 

Real Estate Deals In The Tar Heel State With Jonathan Taylor Smith

I’m excited to have a special guest join us here to talk a little about how he transitioned from being a full-time IT into transitioning and his journey along the way to becoming a real estate investor and doing a variety of things on the rental side of things. I’m honored to have Jonathan Taylor Smith. He’s a husband, father, entrepreneur and realtor. …and Landlord is the title of his awesome podcast. JT has been self-employed since 2002. With only a month after buying his first house, he quit his IT job to go full-time with his own website and web hosting business. He still has that company now. After over a decade in IT, it became clear he’d benefit from a source of income that wasn’t in direct competition with multiple-billion-dollar companies fighting to give away what he was trying to sell. In 2015, JT diversified in multiple areas of real estate investing, starting his own podcast on the subject in 2019. We’re excited to have Jonathan Taylor Smith join us.

Thank you, Scott. I’m looking forward to it.

Let’s talk a little bit about that. You started your own IT company. Did you feel like you’re banging your head a lot? Let’s walk down memory lane there where you’re selling something that big companies are giving away for free. How difficult was that?

I’ve always had a bit of an entrepreneurial slant to my thinking process. Even when I was working a full-time job, I was looking at what I could do on the side and I started an IT company, a web hosting company back in 2002. I was working for a telephone company at the time. That company got bought out. They assigned someone to stand at my desk and watch what I was doing 24 hours a day. I couldn’t get anything done on the side. I bit the bullet and quit that job. I started growing a web hosting business. It became quite successful. It allowed me to be self-employed for over a decade and most businesses don’t last that long. I consider that to be a definite success. At a certain point, when you have those bigger players in the industry and they’re giving away what I’m trying to sell, it becomes pretty difficult to compete. I didn’t know what would be the outlook on that business 5 or 10 years down the road and started looking at what I could do to protect my long-term outlook, my future.

What were some of the things that helped you make that transition? Did you read some books? Did you attend some networking events? What were some of the steps that helped you make that transition?

If you know my personality, I try to be funny. I used to joke with people that, “One day I want to be a slumlord.” That’s not who I am. I could never be a slumlord. That was my way of saying that one day I’d like to own some rental property. I missed several opportunities to do so. Things started clicking back in 2008, 2009 when the economic downturn was occurring, my business suffered because I lost a lot of my biggest clients. Their businesses were suffering. It affected my business. It took me several years to crawl out of that. Around 2014, I had bought out my former business partner. I was 100% owner of my tech company. I had some money. I got to the point where I had about $100,000 put aside. I’m like, “If I’m going to get into real estate, now’s the time to do it.” I was on a cruise reading the book, Rich Dad Poor Dad. I couldn’t wait for that cruise to be over so that I could get off that boat and start looking for my first rental property. That was around March of 2015 and I bought the first one in June of 2015.

Rich Dad Poor Dad definitely has still a lot of fires into the entrepreneurial spirit of investors and entrepreneurs across the country. It was a big part of my journey to reading that book and going from there. I understand that. Let’s talk about this a little bit. We’re in Austin. We’ve got a lot of IT people. We’ve got a lot of IT people reading, computer science engineers. Did you overthink things when you got into it? Did you do a lot of research before they pulled the trigger? Did you suffer from over analysis paralysis? Share some of those nuggets for you that you’ve probably gone through and overcome like all of us have for our audience out there.

I’m a bit of an OCD sufferer. I have a perfection desire. Everything I do, I want it to be perfect. There was a little bit of over analysis involved. I would thank the tech company experience where I realized, “I can’t be perfect and I can’t do everything.” I was already learning some of those lessons about automation, outsourcing, not trying to do everything perfectly and done is better than perfect. I started down that path. I would always want everything to be perfect. You would never get anything done. I got it out there. I started down that path. The very first property I had done some research into what it was going to cost to rehab properties and whatnot. I thought, “I could probably get this property rehab for about $3,000.” $9,000 later, I was done.

We all think when we run numbers on, no matter what it is, we’re always like, “I can get it cheap. I’ll probably do some of it myself,” and realize later on that it’s going to cost more when you get your feet wet. Did you do a lot of the rehab yourself or are you outsourcing it or a mixture of both?

I’m suffering from being somewhat handy so there is a tendency to want to do certain things myself. I had a toilet in this first property that was a little loose. I’ve tightened it down, tightened it down and come to find out you can’t tighten the porcelain toilet too much before it cracks. At that point, I said, “I would be better off not trying to do everything myself.” That’s when I called in some people to help me get it done. That’s why I went over budget because I had planned to do certain things myself. In the end, I couldn’t do everything myself. I’ve been building a team. Now, I try not to do anything. I try to make sure that the activities I involve myself in are a good use of my time and my dollar, what I pay myself per hour or what I deem myself to be valued at per hour.

It’s one of the most valuable lessons of investors, whether you’re a fix and flipper or a note investor or whatever it may be, is the value of delegation and the value that you can’t do it all yourself if you want. It can. It’s going to take a lot longer than you’re going to run into a-ha moments or in this case, an old crap moment. You bought one. Let’s fast forward. Where are you at now? What does your day look like? What does your portfolio look like?

Right now, I own fourteen rental properties that consist of sixteen units. I had a goal to double my number of units every year. In 2015, I got two. In 2016, I doubled it to four. In 2017, I doubled it to eight. In 2018, I was trying to double it to sixteen. I missed it by one. In 2019, I’ve lost my footing a little bit. I wanted to jump up to the larger deals. I started bidding on 50-unit buildings and 30-unit buildings. I keep getting out bid. I looked around and said, “If I had continued what I was doing, I probably would have 5 or 6 more units by now.” I started looking around to see what was out there in the single-family, small multifamily space and immediately, I picked up another unit.

Now, I’m trying to form two partnerships where I can still look to the larger deals, but primarily I’m going to get in where I fit in and what was working already and pick up the smaller units, 1 unit, 2 units here and there and keep it growing. My rental properties are on great properties. That’s my long-term hold entity. I have a short-term hold entity where I do the things that are going to be less than a year turn. I got into new builds. I completed a new build. I have a realty business, Blue Chariot Realty. I’m a licensed realtor and broker in charge. I do that working with investors. Mostly, that’s my niche. That’s the thing that I have those other realtors can’t claim. I’m a little bit better at working with an investor than your average realtor would be.

I developed certain skills, processes and procedures as a property manager. I start offering my property management services to others as well. I started a property management company. In each case, I try to partner with someone who can be the primary whereby I can look at the entire pie. I even started building out a barbershop that I’m going to be opening, but I’ve never cut anyone’s hair. I’m not a barber. I’m providing the money, the infrastructure, the business knowledge and he’s the one that’s going to run that business. That’s my mindset now is to get into different business areas but not be the principal and the sole source of impetus on each one.

Being the focal point where you’re putting in general managers or people to manage those businesses for you, it’s like Jerry Jones of the Dallas Cowboys where he’s not the one selling hotdogs, beers and coaching the team. You’re the focal point and providing opportunities for people to come in that will manage that aspect for you. You’re overlooking that on a higher level the nuts and bolts or the down dirty aspect of the day-to-day operations.

That is a combination of direct partners. They’re the principal in that particular endeavor as well as outsourcing certain tasks that are repetitive in nature to VA’s and assistants whether they be in the country or outside of the country.

On the assets that you’re buying, how are you financing those? Are you using other people’s money, institutional financing or a mixture of both?

When I first started out, I was buying them in my personal name along with my wife and I decided that I wanted to try to ramp things up a bit. I met some people that were interested in what I was doing. I started being a little bit more aggressive moving up from the $9,000 rehabs to the $90,000 rehabs. I bought some properties that were fire damaged or foundation damaged. I’ve done rehabs in excess of $200,000 on some of my properties. Those deals were funded by hard money lenders. From there, if it’s a deal where a private lender is likely to be able to have enough money to fund the purchase and rehab, I now work with several private lenders to get deals funded as well.

You’re out in the Raleigh-Charlotte market, correct?

Yeah, I’m in Durham. That’s my primary market. Raleigh is about 30 minutes away from Durham. The other market that I’m familiar with is the Tampa Bay Area.

 

Let’s talk about the Raleigh-Durham market. For us, North Carolina has been a real popular market because it’s a relatively fast foreclosure state for us. We’ve seen some deals. Where do you see the market going there? Are you seeing affordability being a problem for a lot of people? Are you seeing there are still a lot of affordable homes, first time home buyers because we see that happen a lot of markets where the affordable first-time home buyers are getting squeezed out of the market? What do you see?

This market has undergone an amazing transformation. It’s a lot more competitive than it used to be. I had put in an offer for an investor client that I work with on a townhouse that I deemed to need about $25,000 worth of rehab work. We were several thousand dollars over the asking price and we got outbid. After speaking with the listing agent, I found out that the property had over 70 showings and received over twenty offers. I compare that to a couple of years before where properties were sitting on the market for 30, 45 days or more. You could go in at your leisure. It’s very aggressive here now. Especially in the downtown area of Durham, you have a scenario where neighborhoods are gentrifying. You’ll have a house that looks like a dump pile sitting next to a $400,000 or $500,000, $600,000 house and you can see the neighborhoods transforming. There are opportunities here for off-market deals. Once something is already listed on the MLS, it’s going to be a very popular attention-getter. It’s harder to get things. I’ve had to adjust my marking in a bit, do more off the market, direct mail door knocking, cold calling and things of that nature to try to find deals because it’s much more competitive here than ever before.

We see that in a lot of markets. It’s the multiple offers above asking price that is always a scary thing. Are you seeing on the MLS where realtors are listing that appraised value will not dictate the sales price yet?

I haven’t seen that exact phrase but I know where you’re going there.

That’s always a good sign. I’m like, “Time to pull out of that market and look somewhere else.” You said Tampa is a market that you spend some time in. How long have you been investing in Tampa?

I have not bought anything in Tampa yet. It’s where I’m also marketing. I ramped that up about a few months ago to try to market for deals. I lived in Largo, Clearwater, St. Petersburg and Sarasota. I lived in all of those cities before I moved to North Carolina for a job. Those are the two areas in the world that I’m familiar with where you can tell me a street and I likely know where that street is and I have a certain level of comfort. As you grow in the business, you’ve got to get to the point where you can make offers on properties without having to see every one of them first. If I’m going to mark for deals out of my area where I live and have to put in offers on properties, I haven’t seen what better place to do with than somewhere that I’m already familiar with. If I absolutely had to have someone look at a property for me, there are services for that, but I also have family members in that area that I’m trying to get interested in the business, “Look at this property and take a video. Here are the things to look for.”

I haven’t bought anything in Austin in over a decade. It’s home, but I buy a lot of stuff in other areas. I’m glad you brought that point up. There are people, friends that can drive by and take photos or videos. You give them a checklist. They can do a pretty good job of telling what the property looks like from the outside or even if you do get inside access, which is great. We don’t get a lot of that on the notes side, but we can often tell a lot about the interior from the exterior, what kind of condition it is and stuff like that.

You can look at the pictures and engage them from the pictures. Once you get that level of experience, you’ve rehabbed enough properties, you’ve done enough analysis, you’re pretty confident in it. You can hit it pretty close.

You’re going to have a little bit of a stressful budget from different things of over-exaggerating some things and be able to make, especially when you start getting in a volume play where you’ve got multiple assets and cashflow. It gives you some flexibility in your rehab costs and budgets there for you. A question I like to ask here too is you’ve seen the market get tighter. We hear this all across the country. People get outbid by investors. Going back because you’re in a unique position being a realtor there, are you going back and seeing who’s outbid you on some of these deals? Are they big firms, bigger funds or maybe investors come in, paying too much and overbidding as the Weekend Warriors will sometimes do?

I always like to do a postmortem. I like to find out why did I lose the game? I go back and I look at it what the property ended up selling for and who bought it? Sometimes it will be an owner occupant on the properties that weren’t in too bad of a condition. Maybe they were able to get conventional financing on that property. A lot of times I’m losing out to other investors who are willing to pay more than me or in some cases, I’m losing out to investors who have a different model than I do. I tend to keep the properties that I buy and rehab them into rentals where some people knock it down and build something new. I’m glad that I completed my first new build because now I’ve got that confidence that says, “I might be able to play that game as well and buy something, knock it down and build a $600,000 house.” It’s going to give me a double six-figure profit.

That’s the thing is whenever you see somebody who’s getting emotionally involved in an owner occupant, they’re going to probably outbid an investor every day. Let them have it. Are you seeing though, because we’ve seen this in different markets out there, where new investors are coming in that maybe aren’t the most educated and over rehabbing or overbuying and looking to move the house with a short sale or something like that later on?

There are definitely some properties here that have been rehabbed and they’re sitting. That is usually the case of when a person buys a property, rehabs the property, but they’ve rehabbed it in a way that it would make a better rental than it would a sell at whatever they’re looking for. I’m sure they’re getting offers on the property, but it’s not much more than what they were in for. They’ve rehabbed themselves out of that exit and now they’re stuck with it. That’s why I like having multiple exits on the properties that I buy.

At the same time, when I’m doing rehab, I do a pretty nice rehab. I’m usually putting in stainless steel appliances, granite countertops, LVP flooring. I want the property to be wow when a tenant walks in there. In some cases, I will make my properties available to those who have Section 8 vouchers in this area. Durham Housing Authority, they will pay in many cases above-market rent. In this area, if you do a great job of tenant screening. You give somebody what may be the best home they’ve ever had and have some policies in place where they know they’ve got to do certain things in order to keep it, I’ve found that I have some pretty long tenancies and turnover locally.

That’s the thing is if you set it up and I’ve always heard that, “I’m friends with Jeffrey Taylor, Mr. Landlord, who does a good job rehabbing, but he puts nice stuff into it so it doesn’t get worn down because there’s going to be wear and tear in every house.” Durability in Durham, we might have to make that the title of it. You said something good though, you look to have people there long-term and that adds to your ROI. You have fewer vacancies, fewer rehabs because you’re going to put stuff on the front-end side. Saving a dime, you’ll spend a dollar to keep it long-term, less rehab and downtime. That’s smart.

I’m going with what has been termed the BRRRR: Buy, Rehab, Rent, Refinance and Repeat. That’s what I’m usually doing. I’m buying with short-term funds usually either private money or hard money. If I’m using private money, I usually have an eighteen-month term and that gives me plenty of time to season it for a year and still have that refi window. I’ll usually put something in there where if I need to refinance or extend that for an additional six months before I can refinance, maybe I pay a point or something to get that privilege. I have plenty of time to get out of the short-term. If it’s a hard money lender, they usually give me thirteen months. By then, I’ve got it rehabbed. I’ve got a tenant in place. I can go to usually now a commercial lender and refinance for 30-year fixed. It’s now a cashflow producing asset. I’ve gotten in most cases all of my money back and some cases, a substantial profit. Even if I get to the point where I have to leave a little in that particular property, you can look at what is your ROI on that money that’s still in there. It’s usually quite significant that I’m not net even then.

Running the numbers on it makes sense. What kind of financing terms on the 30 years do you see on the commercial loans with your properties?

It’s usually a point above what you would pay for a conventional loan. If you’re getting conventional at 4.75%, you’re probably going to be paying in the low 6%. My challenge is always making sure that I have ample reserves and significant enough credit that I can get the best terms. I’m always watching what happens with regard to my credit and sometimes I can get into trouble because I like to use debt. I’m a believer in using debt. When I’m buying appliances, bringing or doing certain things, I’m not opposed to putting it on a 12-month, 0% interest because that’s free money. Why wouldn’t I make use of that? I factor that into my cost for that property that $500 a month has to go to pay off this debt before the interest hits a year from now. At the same time when you’re doing that, especially if it’s attached to your personal name, you’ve got to watch the impact that has on your credit. That’s a thing that I have to be conscious of, but I love using free money. I’m not opposed to debt, especially if I’m not the one that’s happened to pay it back. It only makes sense to me.

The beautiful thing being a realtor too and a broker there, you see things. Are there areas, in your area, price levels that you see are starting to get more stagnant on the market? You mentioned that some people are over rehabbing that sustain there, but if you were to look at your market, what price points do you see that is starting to slow down or maybe getting a bump in short sales because we’re starting to see that across the country, especially here in Texas too.

You asked about entry-level homes or first-time home buyers. That’s what’s most difficult here. Getting someone into a cost-effective entry-level home in a place where they want to live. There are some challenges there. Even the house that I completed, it was a $285,000 house. That might be above what some people can afford as an entry-level home and granted that number is nothing depending on where you live. Here, that’s a substantial amount to pay for a house in this particular market when your entry-level homes, you can get 2, 3 or 4-bedroom townhouse usually you’re going to be in the $130,000, 160,000 range. That’s what most people are looking for on an entry-level home. Right now, in this market, they’re building $400,000 townhouses. The inventory for the person that’s trying to get into the market, the first-time home buyer, is diminished.

On the higher-end side of things, are you seeing the days in the market extend longer on that or they’re getting gobbled up as well?

 

They were previously, but now they’re sitting on the market as well that they’re not being sold there. I can go into downtown Durham right now. There are some areas where townhouses had been sitting there. I’ve seen some price points drop to try to get that inventory moved. It’s not to the point where there’s panic or anything like that. They will sell, but it’s taking a little longer than days on market have increased. In some cases, they’re starting to provide some incentives and things of that nature to get that inventory moved.

What are you seeing when you’re dealing with the new investors that are looking to buy or looking to invest in you being an investor-friendly realtor? Does it seem like you’re teaching them or educating them on specific things on a regular basis that I may not know?

That’s a part of my value proposition that if you’re someone looking to get into the investment realm and you need some direction, that’s what I can do that your average realtor can’t do. They’re not usually going to be able to walk into a house, look around and tell you to a pretty good certainty what it’s going to take to rehab this house. Granted there’s going to be an inspection involved that might reveal some unknown things, but I can tell them to a pretty good certainty what this is going to take. You can back that into what should be offered on this property. I can show them how to run the numbers so that they can see what their profitability will be even the tax impact on that. That is a part of why you would want to work with me.

On the other side of that, there are some people who would not want to work with me because I am also an investor in the market. I’m completely upfront with them that there are certain communities that I’m targeting that if something comes available in that community, I’m not going to be showing you that property because I’m going to be bidding on it myself. They should take that into consideration as to whether or not they would want to work with me, but one caveat is far outweighed by the resources and the knowledge that I can bring to that scenario.

It’s good to have both sides of that investor’s realtor mindset so you can see, capitalize and advise people for making a bad decision or also, “Here’s where I’m buying. I’m not going to be your best friend and give you a deal in my target area and stuff like that.” You mentioned early on that you’re having to market a little bit differently than you have in the past. What are some of the things there in your market that are working effectively for you to finding new deals?

Unfortunately, like in most markets you see the bandit signs all over the place, I’m personally opposed to that. I assume that it must work because people are doing it. If it didn’t work, they wouldn’t be doing it. I don’t like that marketing approach. I’ve put too much time and effort into building my brand to stick it on a free illegal sign on the street corner somewhere. That’s not where I’m going to go with marketing Blue Chariot specifically. Direct mail is something that I do consistently. The phone will ring from direct mail, but it also depends on how you handle those calls. You have to build a rapport. You have to have a script in your head, but you have to have that conversation in a manner that’s conversational so that works.

I’ve put out flyers and door hangers. For very targeted communities, I’ve hired a person to knock on those doors, say this is who we are, this is what we do, are you interested in this? I employ some online means because I have a tech company and a part of that company is building websites. I do the whole online presence, SEO, various forms of advertising and retargeting. Those are all things that I put in place. I utilize VAs to market to people both online and offline. Once I know that this is a house I’m interested in and I’ve had a chance to possibly talk to you in person, maybe I knocked on your door, you know who I am, you know what my brand is. Now I’m going to market to you online. Everywhere you go, I want you to see Blue Chariot so that the day you do decide to sell your home, I’m the person that you’re thinking about.

The whole 80% of sales are made on the fifth contact. You’ve got to be in front of them in multiple ways so that they do decide that you’re the only name that they think about there. Would you be willing to share what your monthly marketing budget is? What you’re putting in on an average basis up to marketing for a deal generation?

Anytime I try something new, it’s only $500. I will try anything for $500 to see what the stick is on that and whether or not it was a waste of time. I might do that for 2 or 3 months, but I generally spend ten times that on marketing every month. I’m about it with $5,000 point per month and I need to get that up. I need to be able to justify it with the deal flow. It’s one of those scenarios where I have not perfected. There’s that tendency to want to be perfect again. I have not perfected some of my automation and systems so that I’m not the bottleneck. As long as I know that there are still scenarios where something hits my desk. I’m the bottleneck and I might not be able to get back to that as quickly as I need to. I don’t want to ramp up my marketing too much. I want it at a pace that I can handle, but I need to be marketing even more than that. That’s where I am right now.

Is there anything right now that is a BRRRR under your saddle that you’re a bottleneck on right now? You’re like, “I’ve got to delegate this.”

One of the things that I would love to be able to put into place here, in Durham, there’s a neighborhood improvement service that they send out violations to properties that don’t have all of the things the way they need to be. They would have some violations. There are landlords that are going through evictions. I need to better target those scenarios. In some cities, you can go online and find out everybody who has the violation, everybody who has an eviction. Unfortunately, some of those things you’d have to do the research in person. A part of where I want to put additional marketing is if you’re somebody who has had a violation from the city, if you’re someone who has had an eviction or anything like that, a pain point, you’re behind on your taxes, any of those things, I need to automate that so that I’m in front of all of those people the moment it happens.

I’ve seen scenarios here in Durham where they have tax lien foreclosures. I’ve seen properties that were listed on the MLS for sale for $18,000, nobody bought it and it went to tax foreclosure. It got a bit up to $24,000 at the tax foreclosure. I’m like, “You could’ve bought that property a week ago off the MLS directly from the owner for $6,000 less than it went for at the tax foreclosure on.” That put a bulb in my thought process that I need to start getting in front of those sellers before their properties go to auction, before they get listed on the MLS.

Here’s a little thing I’ve always found in different places from my years of doing traditional real estate that if I took the zoning guy or the gals to lunch, they often had a list that they distributed their weekly zoning complaints out to. I would get a spreadsheet from them, which made it easy to automate and go from there with direct mail or reach out there for you. It’d be a whole lot cheaper than 500 bandit signs. A good steak lunch somewhere would be worth it for the most part. Zoning is a huge thing that a lot of people are missing out on because they’re doing traditional stuff they were working a few years ago.

I commend you that you’re evolving constantly and having to change. Instead of always be closing, always be marketing and getting the word out what you’re doing, which is awesome and is above. That’s probably why you separated yourself is that you’re doing things that most people aren’t going to do because they’re going to get stuck doing one thing and beating a dead horse while you’re like, “Let’s do this. Let’s add this. Let’s tweak this and be flexible in your marketing to find what’s working,” which is awesome.

I will add that a part of my marketing budget is not looking for distress properties because I am a realtor, a property manager. I have a marketing approach that’s a little bit more like, “Have you considered selling your property? I can buy it or I can help you sell it to someone else or I can take that headache off your hands and manage it for you.” I have a three-pronged approach to it where there are multiple ways that I can get into a property. I’ll market all of those to an extent in my outreach.

I don’t doubt that. I figured that’s probably what you’re doing offering property management like, “Are you tired of having this property? I’ll sell it for you. I’ll buy it from you, take it over and put good tenants.” That’s the thing. You’ve got to be a little flexible but still be focused on what you’re doing up there. We talked a little bit about shiny object syndrome. What were some of the things that were shiny object syndrome that you had to say no to or had a hard time saying no to?

I want to have mobile home parks. I would love to have a car wash. I want to have a self-storage. I had a guy asked me if I would be interested in starting a restaurant. Business opportunities come my way all the time. Even the person that approached me with regard to the barbershop, I had previously said no to that. You mentioned this barbershop is based upon the rivalry between Duke, UNC, NC State and A&T. The name of it is Rivals. It’s a good concept but I had originally said no to it because I didn’t have the time for it. Things opened up and it made sense and we happen to find a great location for it.

I say no to far more than I say yes. It’s sometimes hard because I can easily get distracted and effectuated about doing something else. Right now, my dilemma is whether or not I go into short-term rentals and extended stay. I have a property that I’m doing rehab on right now that is right around the corner from an extended stay of America. In my mind, that means that they’ve already done the research to know that this business model is viable here. Even though this property is in an HOA, there’s nothing in it that prevents me from using it for this purpose. My thought is, “Do I put a short-term tenant in there or an extended stay tenant in it, which means I have to mount a TV, put furniture in or do all of that or do I rent it to a long-term tenant as I would normally do?” I’m always torn about the different business ideas and aspects of real estate that I could get into.

When you see extended stays and anything’s right around the corner, they’ve done the marketing. They’ve done all the heavy due diligence on an area. You can piggyback off of that and that experience and that marketing budget to help you with your stuff. A lot of people fail to realize that. They work in the opposite direction. They think of something and everything around it says, “No, this is not the right thing for it.” They wonder why it struggles. That’s a beautiful thing there for you. You talked about mobile homes and mobile home parks are a great thing, a great affordable house. It’s a matter of finding one. That makes sense. Where else are you seeing or where do you see the housing market going? If you had a crystal ball in the next 12 to 24 months there in your neck of the woods, where do you see the market going? What are you feeling or what’s your sixth sense telling you?

I talked to a lot of people that are largely sitting on the sideline because they’re expecting some economic downturn. I’m not essentially worried about that. I don’t think that there’s going to be anything major that happens before the next election or shortly thereafter. I don’t think it’s in anybody’s interest to do anything that causes an economic turn. I don’t think we have the same lending environment in place that was at play then. I don’t think that there’s crazy appreciation going on in most markets. I’m rather optimistic that the current scenario will continue. I do acknowledge that it’s a lot harder to get a great deal than it used to be, but there’s still out there. You’re probably not going to be able to throw a rock and hit one like you could in the past.

 

You have to implement new strategies. That’s the big thing that you’ve done a great job with and I see people that are still doing the same thing they were doing a few years ago. I’m like, “That doesn’t work.” You’re wondering why you’re not finding deals. You’ve got to switch things up. You’ve got to evolve. You’ve got to use social media and online marketing business these days as you talked about, to be able to get people to understand you and to recognize your logo. When we reach out to asset managers, they’re like, “I look for the green emails when I have a deal.” You’re looking for the Blue Chariot, which is a phenomenal marketing aspect of that stuff. Are you leveraging or networking in the local real estate investment clubs?

I do. I haven’t lately as much as I used to, but a member of the local TREIA is what it’s called here, Triangle Real Estate Investment Association. I’ve gone to many of their meetings, although I have not been to one lately. I’m a member of some education programs that have given me insight into certain specific initiatives and given me some knowledge of the players in the market. I’m knowledgeable about the people that are around. I’m popular on BiggerPockets. I do a lot of stuff. They’re posting articles. I travel a lot. I go to different events. Where I met you previously was at an event that I traveled to. There are a lot of places that I go and try to see what’s going on in the world.

That’s the thing you’ve got to get out and travel. What’s on your schedule agenda in 2020 and some of the events that you’re planning on attending?

There are some events. I’ll be going to Podfest in March. That’s one that I’ll be going to. I’ve been considering whether or not I want to go on some of the investor cruises that are out there. There are some very impressive people that go on those events. That’s something that I’ve tried to get into my budget to go on some of those events, but networking is important. I go to some of the events related to my agency, the realty agency that I’m with eXp, I go to some of those. There are lots of events I try to go to. I usually pick up that one little nugget or meet that one person who opens something up in my mind and gives me something to improve what I’m doing. It’s usually worth it. I’ve very rarely wasted my time. With the way I handle my finances, I pretty much put everything I do on a point’s credit card. I fly for free anyway so I’m not opposed to going around somewhere. It doesn’t cost me anything.

When you leverage it, your travel, like you do business, it can pay you back definitely. We’ve enjoyed that quite a bit too. Talk a little bit about your podcast.

My podcast is the short title is …and Landlord. The website is AndLandlord.com. The full title as you mentioned is Husband, Father, Entrepreneur, Realtor…and Landlord. It’s about my journey in real estate. I do a solocast as well as an interview. I do a little bit of both. I started it to get more people interested in real estate investing. A lot of people think that they can’t do it and they put up obstacles, “I don’t have the money. I don’t have the credit. I don’t have this. I don’t have that.” I chronicle my journey and let them know the mistakes I’ve made, the obstacles I’ve encountered. More importantly, the mindset, the books and the different things of that nature that you would and it’s up to you to be able to do what you probably think you can’t most don’t realize what they can do and they don’t give themselves an opportunity to pursue their dreams. That’s what the podcast is about. It’s about people trying to do something that’s going to make them financially free, pursuing financial freedom through real estate investing.

What’s been the biggest surprise from having the podcast?

The people that have reached out to me directly, that has blown me away. Some of the people that have contacted me directly ask certain questions or to tell me the impact that it’s had. People in the local market that know I have a podcast. I’m often surprised that some of the people that have listened to the podcast and I’m like, “You took that away from it.” It’s rewarding to know that there are people that are paying attention to it and trying to implement some of the things that I talk about on the show. I put it all out there. I let them know how I used it. I let them know some of the mistakes that I’ve made. I let them know the systems that I’m trying to put in place. It’s a chronicle of, “Here’s how I’ve done it. It’s not perfect, but try it yourself.” It’s rewarding nonetheless.

It’s always awesome when you have somebody reach out to you that’s listening, that gives you feedback or that’s the biggest reward is getting that aspect. Sometimes we feel like we’re talking to a tunnel sometimes.

You don’t know what’s going on out there. You’re putting out content and you don’t know what’s becoming of it. When somebody comes back and tells you exactly what they took from what you said and sometimes like, “I didn’t even think about it that way but thank you.” You know that they’re doing something, they’ll call you. One guy that lives in my neighborhood was listening to my podcast and I had no idea. He told me that he’s wholesaled a couple of deals and I was like, “First of all, why didn’t you call me? Second of all, congratulations. The next time, call me first. I have first right of refusal.”

That’s the funny thing is people locally or across the country, you run into listeners and stuff like that. If you could go back and change one thing or one mistake that you’ve made in your business or change one thing, what would it be when it comes to your real estate investing?

I always try not to limit the past because you change one thing, you change everything. My greatest regret is that I came across the book of Carleton Sheets, back when I was probably 24. I read the first few chapters and I said to myself, “This crap won’t work.” I put it on the shelf and I don’t know what happened to that book to this day. Now, I do most of the things that the book talks about getting low and no money down deals. I think about what would have been the result if in my mid-twenties, I had pursued this business instead of waiting until I was nearly 40 years old before I did. That’s a regret. I wish I had pursued it the first time it was presented to me. Unfortunately, I didn’t have anyone in my life that’s an investor. I didn’t have anyone in my life that owned a business.

I didn’t have that outlook but strangely enough, I knew that I would be an entrepreneur. I knew that I would not be an employee. It wasn’t in me somehow. My father was a truck driver who isn’t six figures at a time when most people didn’t earn five. That is an example of here’s a high-income individual. I knew that would be something that I would emulate. I wish I had pursued real estate earlier on when I first had that insight into it and I didn’t dismiss it. That is a regret. Who knows? If I had, maybe I would’ve got wiped out in the 2008, 2009 crash. You never know. That’s one thing I wish I had done that differently. As I mentioned, the perfection, the OCD of trying to do everything perfectly. I wish that prior to now, I had gotten that mindset that does it and put it out there, video, whatever works and all that doesn’t have to be perfect. You’d be surprised how forgiving people are that they don’t even notice a lot of the mistakes that I notice. That’s one of the things.

We’d all say either start sooner or buy more during the crash. It’s one of my biggest things is looking at there but start ugly. Chris Krimitsos’ book, Start Ugly, which is a good thing and things rock and rolling. Jonathan, I want to say thank you so much for coming on the show. You’ve dropped some great nuggets if our audience is investing or looking to invest in that market. Is it okay if they reach out to you to talk with you about that and what’s the best way for people to get ahold of you or check out the podcast?

The podcast is AndLandlord.com. My main website is BlueChariot.com. My email address is Jonathan@BlueChariot.com. It’s always a pleasure for anybody to reach out to me. I enjoy speaking with people. I’m happy to answer any questions. If you’re local, I’m happy to meet for coffee. If you’re in some city and I’m in that city, I might hit you up. Come and pick me up at the airport. I’ve got a layover. I love talking about real estate. I can do it for hours and so anybody’s always welcome to reach out to me.

Thank you so much. I appreciate you taking the time. Once again, everybody, Jonathan shared some great nuggets about being focused, being dedicated and also some of the things that he would do a little bit differently. We all would do things a little bit differently, but we’re all at where we’re at now because of the decisions that we’ve made along the way. That’s why Jonathan is successful. That’s why he does an amazing job. I look forward to the growth that he has in the next couple of years. Make sure and do me a favor, check out his website and his podcast. He does a great job with some great nuggets, great interviews there as well too. Let’s do that and take some action. We’ll see you all at the top.

 Important Links:

• …and Landlord
• Rich Dad Poor Dad
• Blue Chariot Realty
• Podfest
• AndLandlord.com
• Start Ugly
• Jonathan@BlueChariot.com
• http://BlueChariot.com

About Jonathan Taylor Smith

J.T. has been self-employed since 2002 when only a month after buying his first house, he quit his IT job to go full time with his own Website & Web Hosting Business. He still has that company today, but after over a decade in IT, it became clear he’d benefit from a source of income that wasn’t in direct competition with multiple billion-dollar companies fighting to give away what he was trying to sell. So in 2015, J.T. diversified into multiple areas of Real Estate Investing – starting his own Podcast on the subject in 2019.

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