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March 27, 2022

87. BRRRR on Short Term Rentals, BRRRRNB with Anthane Richie

87. BRRRR on Short Term Rentals, BRRRRNB with Anthane Richie

Join Mike Cavaggioni and Anthane Richie from Rich State of Mind, as they discuss a unique deal Anthane is working on. It’s a combination of a Buy, Rehab, Refinance, Rent and Repeat (BRRRR) method and an AirBnB. He calls it, a BRRRRNB and it’s a fantastic strategy. Do not miss this episode!

In this episode, you’ll learn:

  • What an BRRRRNB is
  • How to utilize different resources like AirDnA to get the best ROI
  • How to create unique income strategies with real estate
  • Why real estate a great wealth-building vehicle
  • And much more! 

Check out Anthane’s links below:
Website: www.richstateofmind.com
Instagram: https://instagram.com/rich_statebrand
https://instagram.com/rich_invests_
Twitter: https://twitter.com/RichStateof

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Transcript
Average Joe Finances:

Hey, how's it going everybody? So today's guest is no stranger to the average Joe finances podcast. He's been here before, back on episode 24, but she just reminded me of, cause I couldn't remember. So I want to welcome back at Anthony Richie, right? Runs the podcast called rich state of mind. And the last time we had him on, he was talking about some of his properties that he had, including a triplex down back in Virginia. And we talked about some of the different processes and what got him into real estate. And we also talked about, different things like that, about him being in the Navy. So we're going to, we're going to dive a little bit deeper today on what he's doing, excuse me. And some new adventures that he's on right now, which I'm really excited to talk about. So I don't want to spoil any of that here, but for those of you that don't know who Anthony is, like I said, he's the host of the rich state of mind podcast. He's a real estate investor. He's active duty in the Navy as a chief petty officer. And he is married to a very good friend of mine, who I also served in the Navy with Amyra. Really excited to have you back on here, Anthony. It's every time we talk, it's always a blast because we talk a whole bunch offline besides podcasts. I know I've been on your show a couple times and now you're coming back on my show for round two and I'm super stoked and super excited to have you back on, man thanks.

Anthane Richie:

And thank you also for switching up the times for me as well. Thank you for being accommodating. And I also just happened to look to when I was on your podcast last episode, 24, it was actually on my 30th birthday. It was like it published out on my birthday. Yeah, it was pretty good memory.

Average Joe Finances:

Good stuff

Anthane Richie:

But you're you're right, man, every time we talk, I love how our relationship, as far as feeding information back and forth or. Just to share experiences. And I also, I even tell Amyra like, Hey, if there was one person I was going to do a syndication, it was some type of deal with it would be Mike and probably nobody else. And you're remote, you're not even CONUS. That just shows how much trust I got for you, man. I appreciate you being such a good peer partner in this process, its been fun.

Average Joe Finances:

I absolutely same way feel the same way about just playing off ideas with each other. And it's funny because we run similar types of podcasts. We talk to similar types of guests we've even had some of the same guests. So some people probably listening, probably oh, these guys much must be arch rivals. No if he's my rival then we're good friends, as rivals, because I absolutely love listening to his show. And and some of the interviews that he has, I'm like, Hey, man, I need to talk to that person. Let me get their info and back and forth. I don't know how many times we've traded off guests and different things like that. And just that. Yeah. Yeah. It's Michael. It's always been good, to just have a good meeting of the minds. And this is one of the things we talk about on this show and that Anthony talks about on his show as well, is linking up with like-minded people. And I know he goes to different real estate meetups. I go to some as well out here in Hawaii. It's about surrounding yourself with people that are doing the same thing, or even better than you. I like to surround myself with people that are doing better than me because it just motivates me and pushes me to take it to the next level and talking with Anthony. Him and I like go back and forth about whose podcast is ranking higher this month or doing this and that. And we're always feeding off of each other. And it's that type of energy that motivates us to just keep going harder and harder. It's definitely a pleasure to continue doing that and continue having these conversations. Anthony, I want to get right into it about some of the things that you've been doing. But for those of our listeners that haven't listened to episode 24 yet definitely go back and listen to it. But Anthony, if you can give us like a background about how you got started in real estate, that would be helpful.

Anthane Richie:

Started about five years ago, I was wanting to educate myself on passive income. I felt like I made too much money in the Navy to live paycheck, to paycheck, and I didn't want to live just to pay the bills. So I started researching and things. Got my financial literacy up. And I real estate landed on real estate. Fast forward, several years of doing research. I decided to use my VA loan. I don't remember off the top of my head who schooled me on it, but it was like, Hey, you could a house hack your VA loan. So I've got the triplex renting out, the three bedroom and a two bedroom. Lived in a studio and I ended up going on a deployment. So I just rented it out anyways. Turned around me and Amyra, bought a duplex a couple months after that. So we had our five units. And so we just cashflowed those for a while, a really good experience. And when I say good experience, even from bad situations, we learned a lot on what we, the style of investing we want to do in the future. And that has carried us into now transitioning to be a more passive. So we've sold the duplex and we're actually in the process right now. I just had about three showings for the triplex. So that, that collectively we've amassed about 200 grand in the last two and a half years. And I'm really happy that experience. She's been very patient with me, man. Amyra has been very patient because there's been times where she's just like Anthane, if one more thing goes with this bad, with this property, it's over. So I've I, especially during the pandemic, it allowed me to

Average Joe Finances:

it's over as in the investing part right now. I want wanna, I want to make sure we we know that.

Anthane Richie:

I and I'm actually stealing this from Michael and Suzy. And you interviewed them when your episode 50 too, we pivoted instead look at you man, you know my episodes better than me. Oh yeah. That's actually where I stole some of my questions to ask them. Nice. Yeah. So yeah, so pivot and not panic during the pandemic and that's what we decided to do in order to still come out on top. And we did, and I heard a lot of stories, whether it was people I was interviewing or people, I was just, seeing it forms by having a foreclose at a head to put themselves on a payment plan with the mortgage companies. And we didn't have to do any of that. And my biggest goal was, Hey, I don't want to pay any of these mortgages out of pocket. And he didn't do that. And so now two and a half years later, I would say our planning got accelerated by maybe three years because of the inflation. From COVID and all that I think our properties probably went up probably about 30% more than I thought they would. So it has allowed us to sell them and announced transition over to where we've talked a lot about offline with syndicating private lending. And then now also BRRRRNB so something where we, I would say collectively, I had put. Maybe 60 grand into those two properties. And we churned out 200 grand. And I would say, whatever that percentage is on the return on investment, I don't know at the top of my head, but that is, I like those numbers. I think anybody that if they got those numbers or guaranteed those numbers in the stock market, they would like those numbers and ed has allowed us now to do more. More passive.

Average Joe Finances:

Yeah. It's a little more, it's a little more than 150%. You three extra money right there. Yeah.

Anthane Richie:

It's about two and a half years. Yeah. So yeah, we were definitely blessed about that. And it has been a lot of due diligence, which I would say people, I think we glamorize now we as me, you, but I think a lot of people glamorize it commercialized real estate as an it's easy. Maybe it's easy to understand. But it is not easy to follow through and make sure it gets done the right way. So you can get a good return on your investment. So yeah, you may be putting a little bit more work in than you did just throwing your money into the stock market when your TSP 401k. But I think you can definitely get your returns tenfold if you do it right.

Average Joe Finances:

I'm really glad you pointed that out about how investing in real estate, how it's glamorized right now, because I think you're a hundred percent right. You have different shows like our shows, right? Our podcasts bigger pockets, and other like bigger real estate shows that really push this narrative about how real estate is like the bread and butter to building your wealth. And it certainly is. And you hear some of these people talk about it and you say, man, they make this sound so easy. And then if you really listen to the episode and you're not just listening to the surface of it, and you listen to some of the descriptions that these guests are talking about and guests on my show, guests on your show that we've had on, they talk about the work that went in, it wasn't just, it's easy when you look at the numbers, when you look at, okay, Hey, I did this and this worked and I did this and it didn't work. But when you're in the moment, actually doing those things, when you're dealing with those contractors, when you're getting a quote for this price and then the contractor comes in and does the work and says, yeah, it's actually about 2000 more than what I quoted you because I had to do ABC and D after the fact, things like that happen and come up. And that's not the stuff that you see. I, as matter of fact, I had a guy on my show, not too long ago, that was like the preface of our interview. I think it was episode 24. No 24 0 episode 25. I think it was, oh, no, 22. It was somewhere around. But we talked about the unsexy side of real estate. 22, right? Yeah. Okay. 22. Thank you. See, man, you're on it. I'll just say, I think you've got your phone up or something. You're you're just doing it out but Hey, if you ain't cheating, you ain't trying. That's you gotta do what you gotta do. And we talked about like the different sides of it that you don't really hear about on some of these shows. I guess some people will touch on it a little bit. You don't really to talk about it's one thing to experience. It's another, so when you talk about the glamorization of it, I can say, I really appreciate that because. It is something that, you'll go listen to a podcast episode, get super motivated and say, oh man, yeah, I'm going to do that. I'm going to crush it. I'm going to go be a general partner and get all these investors and do a syndication. And then you go to do it. And you're like, holy crap. I got to open up a, an LLC and I got a do all this stuff through the sec and make sure that I'm legally okay to take on investors and this and that. It's a lot of work and it's a lot of money that you have to put into it. And a lot of people don't realize those upfront costs and time that you have to put in. And you pointed this out when you talked about starting your journey. How you educated yourself, you took a lot of time to really understand what you're doing before you bought that first house hack that you did. So I just want to say, I appreciate that perspective. It's super important. I don't want to ramble too much because there's something that you mentioned and it's something I definitely want to talk about on this show is you said something called BRRRRNB. I heard you talk about this on the ADPI podcast. And that was a really fun episode to listen to. Dude, let's talk about this. What the heck is a BRRRRNB tell us,

Anthane Richie:

so everybody knows what BRRRR is, a BRRRR buy rehab, rent, refinance, and repeat. And so what I heard about, a year ago, I believe on the podcast as is one of the, it was a female talking about that concept. And I was just like, I wonder how that would work because she was doing it where she was putting up her own money and he'd get a hard money lender. And then refinancing and then going ahead and putting somebody in there. But I was like, I wonder if there's like a low barrier of entry way to do it. And there is there's a 15% down conventional loan renovation, conventional loan way to do it. So let's just say it's a hundred grand, I buy it for 60 repair for 40. It's the being a hundred grand I'm only putting 15,000 down while plus closing costs is another seven was saying to the sentence on point 23 grand down, which is awesome in comparison to cause you have a house that's not buy as is right. There's no repairs. You have to worry about down the road a very quickly everything's done roof water, heaters, carpet, all of that stuff. And it allows you to have a, I would say a more flexible. Because, you're only paying 15% on every dollar. So that's how I looked at it as, okay. I could be a little bit more lenient. I'm gonna get L LVP instead of just a regular laminate, get some of the nice led lights inside the wall instead

Average Joe Finances:

Stepping up, those renovations instead of just the basics.

Anthane Richie:

Yeah. Yeah. And so that's how I looked at it, like, all right. 15 cents to the dollar, then I think we can go a long way with this. And like I was telling you earlier, I was trying to transition away from for the time being direct landlording on long-term rentals and switching over to something passive, but. That's a contradiction when it comes to short term rentals, right? Because I'm every day, let's just say, or we'll say 60% of the month, I am having somebody occupy the rental, but you can't deny the cashflow on these BRRRRNBs or just these Airbnbs period. We're talking about my mortgage being 900, but I'm bringing in $3,000 a month and this is from a single family home. And so this is why a lot of people. Even hearing properly short-term rental, it's come up a little bit, even I even see bigger pockets has their own videos on it now because they've become a very popular, a lot of people doing arbitrage, which is where they, they rent out apartment in an apartment complex.

Average Joe Finances:

I've heard of that a lot. The rental arbitrage thing, you're talking about your mortgage on this property that you bought is, going to be 900 bucks a month and it's bringing in 3000 a month.

Anthane Richie:

So yeah, it will bring in, so it's $170 a day. Cause I had this I dunno if I'd probably said on the podcast, ADPI AirDNA. That coast will tell me, based off the amenities and based off my house and in an area how much I could charge a day at based off of that time of year. And so my average throughout the year will be $172 a day off of I have an 80% occupancy rate in my area. Now I say 60 to be modest. Let's say another COVID situation happens, but off of an 80% occupancy rate, I will cash and not even revenue, but cashflow about 45 grand. And so whatever, but yes, after so 45 divided by 12. So 3700 3700. That's projected. So I like to also be modest and I have to fight myself to be very conservative with my numbers. So

Average Joe Finances:

what's that going off the 60% occupancy that you were talking about or is that 80%

Anthane Richie:

that's off the 80. So it was 66 is what my modest numbers were. And that was probably a little bit more around around 3000, 2,829, which

Average Joe Finances:

is phenomenal numbers.

Anthane Richie:

Yeah. And so definitely location. So just short term rentals has the same rules. This applies as long-term rental in regards to location, right? For those that are familiar with the Hampton roads area you're not going to put your short-term rental in Portsmouth. Until that casino gets built, then yes. Then that will make a lot of sense in 2024, when it gets finished being built. But for now, you're not going to put your short time at 10 and Prentice Park Portsmouth. You don't want your short-term rentals in Chesapeake. And what's your short term rentals in Virginia Beach, which is very hard right now. Or even Williamsburg, right? So location is still Price occupants occupancy, because you could have a decent price, if you put it in an area that nobody wants to know, then you just got this pretty house sitting and you might as well just turn it into a longterm rental that's fully furnished.

Average Joe Finances:

Yeah, for sure. For sure. Wow. That's yeah that's a. That's really good. So now looking at the Hampton roads area, right in particular in that market now I would assume that summertime is probably the hottest, no pun intended, but the hottest months for rentals, especially if you're looking like access to the Virginia Beach area and things like that. Now, if you're closer to, like you said, Williamsburg, I think like the fall timeframe and winter timeframe is probably going to be a pretty hot market in that area. So where do you find that happy medium would be a good place to buy in that particular area or you focused solely on one area?

Anthane Richie:

I'm glad you asked that question. I focused on a few things. I wanted a good appreciation on my home because it's a BRRRR. So I still want a good equity. I focused on being close to Virginia Beach, but not in Virginia Beach because they've made Virginia Beach very hard to now have short term rentals and in a safe neighborhood. So Chesapeake was perfect for those of you that's knows about Hampton roads, 80% Chesapeake that you would probably live in. And so this one's in the Indian river area and it was perfect. Got it for 129, but the other homes that are similar to that one, we're being soulful at 169, as it is after the repairs and everything. It was going to be capped out about 203. So I'll have about 40 grand in equity and then everything's done. And the it's funny talking about this because the way the conventional loan is set up, there's a cap on how much you can actually rehab and it allows there to be equity in it. So I think my cap was 45 grand in comparison to what the home was going to be worth active, all these repairs. And so now I still have built in equity. And that's what I call it. This this type of BRRRRNB on training wheels, because with the conventional 15%, there's a lot of rules. And like I said, pros and cons for those experience, investors is probably the most frustrating process like it right now. It's been very frustrating because this, I can't even. I got a thousand dollar credit card from my son. Yeah. I added him as an authorized user to build his credit and they're up my butt about that. Hey, you got a thousand dollar credit card what's going on with that. Your debt to income ratio is going higher now. Come on. Credit limit, leave me alone. So I have to send those statements every month. Oh man. Wait,

Average Joe Finances:

Wait till your close man. Tell you something. Hey just hold up. Like another couple of days, man. I don't like that, so

Anthane Richie:

and we're also buying our primary home too, so like that also happened to us. So I don't like holding on my life for 45, 60 days to close. I just can't.

Average Joe Finances:

Yeah. You're you're under contract for two properties right now.

Anthane Richie:

Yeah, my primary home that closes. And three weeks. Okay.

Average Joe Finances:

Congrats man. Good stuff.

Anthane Richie:

Thanks. Yeah, so I wasn't trying to hold up those things. Begrudgingly I'm providing all that information. But again, like I said they do keep you in line. They keep the contract is in line too and there, and they, I think my contract is a bit for their patience. I've worked with them in the past before. Mostly actually Amyra has, cause she worked with them mostly when I was on deployment. But they don't a lot of contractors don't like these because there's so many rules, there's so many paperwork, so much paperwork. But if you are a novice, you just started, I would say, still do this because there are some mistakes or some things you wouldn't take in consideration that the your loan officer will, and they have to, because it's part of the underwriting process. Also, when it comes to the contractors, doing their rehab, they get paid per milestone. And so that, and they get inspected after those milestones are completed as well, to ensure that it's done properly.

Average Joe Finances:

Yeah. This involves like different draw periods, right?

Anthane Richie:

Yeah. And so that saves people. I know I've heard plenty of people that from the experiences of where they did their BRRRR and either the contractor just went off and left on them, after they gave them a deposit or they didn't do it right. They didn't find out. So after the fact.

Average Joe Finances:

Yeah, you do hear a lot of those horror stories, which is why it's super important to make sure you're vetting your contractors. But the other thing too, that I've also heard a lot of people run into, especially doing any type of renovation loan is I've heard of, people running into the situation where they didn't realize they had these draw periods. They thought, oh, okay, cool. I'm getting the loan for this amount of money. I'll get it all right away. I'll go buy all the materials and this and that, and then pay the contractors and get them. And it's actually we're only going to give you like this much, during this time period. And then when it's done, we'll come inspect it, then we'll give you the next draw. So a lot of people don't realize that. So it's very important that you do your own due diligence on the program you're going through the loan type that you have, and you understand what you're getting yourself into. That is super important and a very good point to make. Now with the, so your intention with this property from the beginning was to make it an Airbnb?

Anthane Richie:

Yes. Because I was, I did not want a, I love multi family and I did not want a single family home just to make $200 a month in cashflow. It is very hard to meet the 1% rule the Hampton roads area unless you have the time to do a lot of direct mailing and find something off market, which I found myself trying to do, driving for dollars and all that. I don't have the time. I really don't.

Average Joe Finances:

Still being active duty in the Navy and stuff it's yeah, totally understandable. And a brand new thing. Exactly. She's podcast officially on the show. Congratulations.

Anthane Richie:

I appreciate that. Thank you. Thank you. We're very proud of her. Actually. She's already holding a bottle. She's only three months old.

Average Joe Finances:

Oh, that's fantastic. She's adorable by the way for my audience. She's

Anthane Richie:

adorable. Oh, thank you thank you. So with all that on our plate I have to figure out what is going to be the best use of my time. And I was like, I got this 10 31. And so I completely skipped how I still want to properties that sold I 1031'd it.

Average Joe Finances:

Oh yeah. Let's get into that, man. How'd you do that?

Anthane Richie:

There's only one bank in this area that does it. Her name is Ute who's is the lady. I think she's from Russia is the lady that helped me. And they process your 10 31 and they keep your profits from the property that you sell in an escrow account? I had a 30 days to identify about three properties and I have about 90 days. Yeah. She gave me like, I think it was like 30 days. I may be wrong, maybe 45. She gave me from October 11th. I sold my home in mid-September. I had until October 11th to identify three properties. And then I had till February 22nd to close on one of those properties. I can't complain because she literally wrote up that 10 31 for me in 24 hours because I had something going on that week. I was completely swamped and I was like, hold up, I'm not trying to pay taxes on this. I called her. I was like, Could you really draft this up for me? I close on Friday. I know. Today's like Wednesday afternoon. I called it like a 1600 and they drafted everything

Average Joe Finances:

4 O'clock for you non-military folk.

Anthane Richie:

Oh yeah, sorry.

Yeah, 4:

00 PM. And she really looked out she's actually been very good with me. Very patient, apparently in this area she's known to do that. She's the only one that does it and she's really good at doing it. Nice. And she has an assistant and that really is really good at it too. That she's actually turning it over to. So I did that. And the reason why people do that so that they don't have to pay capital gains tax on their properties. And if you are somebody who's rinsing and repeating a lot of cash throughout the year, you'll be glad that something like this exists because you don't want to be paying 17 grand or $55,000 profits. It's actually a discouraging. So I did that so that I can, cause I already knew the property that I wanted. I already found it. I was like, I called dibs. I, and I put it in a price point and the guy offered it. It was a lawyer and he was just trying to, get it off his books. And they're easy to work with a lawyer by the way. Cause he writes up everything on, on his own as far as the negotiation process. And I was like, yes, got, everything. And so throughout that process, Anytime you can also use your 10 31, not only just as the down payment, but you can use it towards the closing costs. So like earnest money deposits appraisals inspections. You can take that money from the escrow because I don't like the term.

Average Joe Finances:

I've talked about 10 30, 1 exchanges several times with other guests and I never knew that. I never knew you could use it for other things because I've never done one myself. So I never knew that you can actually use that for, different inspection fees and things like that. In closing, I thought it was like strictly down payment on the next. No, that's pretty cool to know. Yep. And earnest money too, you said, right?

Anthane Richie:

Yeah. I used it for my earnest money. They'll be paying me back. So I had to do two earnest monies. I had, I paid the one earnest money out of pocket because the, I needed their wiring number and I couldn't get it in time. Ute, they said, Hey, we'll just pay you back at closing from the escrow. And then the other earnest money deposit I had to do. Cause I needed an extension because we had to get some new, a new appraiser and a new inspection on with the contract on what else he needed to get done? So I had to pay a $5,000 earnest money deposit to get that extension and go towards closing. But I paid it through my escrow. I didn't pay that out of pocket. So it's been a very handy because it's like my own little utility bank until I actually closed. And when it comes to that, though, you want to make sure that all your ducks in a row. Cause like I said, training wheels. So if you had a divorce, the divorce decree, your child support court order, your driver's license, all the things that almost like again, a regular house that you had to provide you want to make sure you have all that together. You obviously want to have your six to seven months of reserves for the mortgage in the bank as well. And like I mentioned, If you don't want to get harassment more paperwork don't add anything more to your credit in the meantime as well.

Average Joe Finances:

So don't open up a authorized user account for a kid. Is that what you're saying?

Anthane Richie:

Don't do it? Don't do it. I'm just impatient. I'm very impatient. If I find out a good idea, I want to learn as fast as possible, and I want to do it as fast as possible, as long as it doesn't obviously hurt the business or hurt our personal home. And that's what I try and make sure we go by. So that's been a process with that. And oh yeah. W what I wanted to say earlier was that I don't like the term no money. There's no such thing. Maybe you can use other people's money for a down payment and that's what you have some type of partnership, but who's paying for the inspection. Who's paying for the earnest money deposit. Who's paying for the appraisal. If you have to get a surveyor, who's paying for that. And that could be even more expensive than the inspection, because I had to survey this property as well, because I intend to renovate and turn the standalone garage into a studio. So I had to get a surveyor. And then I also had to get a architect to draw out the plan before.

Average Joe Finances:

So you're going to turn a single family home into a duplex then.

Anthane Richie:

Essentially. Yeah. So a single family home will be it's the big, short. Term rental. And then the standalone garage will be the studio where I charged like 75 bucks a night.

Average Joe Finances:

Is that where the 1 75 comes in a hundred for the,

Anthane Richie:

oh no. 75 was only, that was only talking about the the single family portion.

Average Joe Finances:

Okay. So we're actually talking about a higher number then if that's the case. Ah, come on, man. You're killing me here. That's awesome.

Anthane Richie:

I was actually, yeah, I forgot about that. Cause that was the big house. When you do air DNA, it only takes a consideration the house. It doesn't know that you're trying to convert the the garage.

Average Joe Finances:

You got an air DNA at I guess maybe put it in as like a separate property, or a separate unit. Yeah. And then. Tells you what you can get for it because it might come back. So you can get more than a 75. I might come by and say, Hey, you can get a hundred.

Anthane Richie:

I did put it aside. I didn't create cause you can do something like that. You can add a property. But what I did was I looked up what the average was for studios in the area. And that's what I came up with 70 to 75. And again, it can be adjusted based on the amenities, what you have in there. But I got a coffee maker and a TV to comes out the wall and, wifi and Disney plus maybe I have to charge 80 bucks now.

Average Joe Finances:

Yeah. Yeah. And it's amazing that you could just put a little extra into it and get that much more because that difference that $10 difference from 70 to 80, like might not seem like much, but over the period of a year at a 60% occupancy rate or 80% occupancy rate, like that's going to pay off that's pretty good. Like you'll probably pay for the TV or you'll probably pay for that subscription right. Easily.

Anthane Richie:

Yeah, you're right. So 20 days out of the month, on average you're talking about $10 a night. So $200, 200 times 12, and talking about a 2,400. So actually 2,400, you've added to

Average Joe Finances:

paying 2,400 on TV, then that's just insane in itself You could probably get a really decent large TV for a couple of hundred bucks to throw in there and have a really nice setup. So yeah, that's, it's profitable.

Anthane Richie:

Yeah. The cool thing I love about investing is that, and this is anything it's not, it doesn't just have to be real estate. I think that the thing that gives people's like how much money they have to provide our front, but not focusing on how much could you get back in return. And yeah, I paid $700 for that TV, but in, let's say another $7 a month. It was at 7 99 for Disney plus, okay. So now I paid another seven, 10, but they just raised the price. Those crooks. Now they did, My subscription

Average Joe Finances:

just renewed. It was, it used to be like 69 99. And then now it's 79 99.

Anthane Richie:

It was coming. I knew it was gonna stay down low for that long.

Average Joe Finances:

The mouse don't play.

Anthane Richie:

So yeah, now you get 2,400 back and now you've paid off that TV times three. And you pay, oh, you paid it off in a quarter, first quarter of the year. So you got to look at it like that when it comes to investing,

Average Joe Finances:

especially in real estate, like you. Sure you can build your wealth relatively quickly with real estate, but it's definitely a get rich slow thing. It's not, you're gonna, you're going to dump, some, a couple thousand dollars or 20, $30,000 into a property and turn around and now your net worth is a million dollars. No, you're going to have to do that for quite a few properties before you get there. But at the same time, every year, That goes by that somebody else is paying down your mortgage and increasing your equity in that house every year, that goes by for each property, you have your net worth is jumping and jumping and jumping to the point where you have enough properties to where. Every year, it's jumping significantly. And that's where you build your wealth investing in real estate, right? It's not like I'm going to go all in on doge coin at, half a cent and then it goes up to 60 cents and now I'm a millionaire. That's, it's not like that. Now those are all speculations of people getting lucky, but at the same time you go into real estate, like it's a process, but it's a process that you can control, right? You don't have to worry about too many outside entities affecting. What you can make and profitability. Sure. There, the real estate market is its own beast. But at the same time, it's a lot easier to follow when you're trying to project how much equity or how much appreciation you can make in a house. You can look at your amortization table and figure out how much equity are you going to have in the next two or three years? Hey, I know if I need to do a cash out refi five years from now and pull some money out. I could probably pull t his much out, based off of an 80% loan to value ratio. So it just, there's a lot more, you can play around with versus just investing in like a single stock or a crypto or something like that. So there's so many different things and there's so many different things in real estate that you can do that are profitable. So an example with Starting off, right? Like you had that triplex, right? That you house hacked. House hacking is one thing, but then you moved out and now you're renting all three units out and boom, now you've got three rental properties right now that's cash flowing. Now, you're going to, you're going to do a Airbnb that you're BRRRR it. So you're gonna have this BRRRRNB it's a whole different kind of way of investing in real estate. That's going to be probably more profitable than your investments that you have, but, and to be fair though, it's gonna be a little more work. Like you have to be active in that, as people are coming to go into there's turnovers and stuff like that, it's a little more active. But that's the thing. Anything that you're involved in, the more active you are most likely the better return on investment you're going to get, versus where the stuff that's a little more standoffish, the more passive you get, the less you'll get back. So that's just one of the things to keep in mind. But at the same time, there's so many different things you can do in real estate versus like other asset classes. And that's one of the things that I love about it so much. It's just, you can diversify your investments and stay strictly in real estate and not go into anything else you can get into different neighborhoods, different states, different kinds of properties. You could be in mobile home parks in one property, apartment a in one state, a apartment complex is in another state. And in a, in another area that's very like a big for tourists. You can have a whole bunch of vacation rentals. So there's so many different ways you can diversify your real estate portfolio to just make it where. If something happens, you're still in a pretty good and safe spot. So is that fair to say?

Anthane Richie:

No, it is fair to say. And you made me think about another thought process that I had. I found it easier when I say easier. It was not as far as labor, it was definitely harder but easier to, for my sanity to manage my own properties. And so for the five units that I was managing I don't remember the net off the top of my head. But the cash the revenue was about. I think I was about 57 between five units. And when I did the math with the BRRRRNB the revenue was like 53, something like that. So something like that, something very close to that. And so I was just like, yeah, I got to, it's a day-to-day turnover, but I'm trading in me managing five different tenants. On a monthly basis to just, one stop shop, probably people coming in and maybe top two to three days at a time. And now, and then I get to do other things. And so I was like, I like this better where I'm getting more cash on a single family, one unit and adding that studio is well by running those five different units.

Average Joe Finances:

Yeah. And something, I want to point out on that too, is, managing it yourself. Of course more of a return, but with the amount of profits at this property has the potential to make. If you ever get sick of it, you could easily hire a manager, to take care of that for you and just, have them give you updates as things go, because you'll. It's profitable enough to do that. But at the same time, you live right there. So it's pretty easy if you want to jump in and keep taking care of it yourself, but that's one of the beautiful things is you could do it on your own for now. And then if you decide, ah, I'm getting tired of doing these turnovers every four or five days. And I want to, I want this to be someone else's headache. Let me hire a manager for this. You can totally do it.

Anthane Richie:

I know I already know about a year once I master. So

Average Joe Finances:

if you don't want a mural, probably make it. She be like, Hey, I'm done with, I'm done with you spending all this time on this Airbnb.

Anthane Richie:

Yeah. Yeah. So family family makes you really reconsider. I'm not saying this is everybody's case, but family to me makes me reconsider my time. And so after I've done something for a certain amount of time and I justify the profits to a mirror like, Hey look, babe, I've been, I know I've been at this computer a lot, but look how much money it's making after about a year or two, she's looking at me like, Hey, I need you to figure out how can you still make this money, but passively to where you can still spend time with family because it was the point of me doing this. It was so that I can have the time, the luxury to spend time with family and not trading time for money. Because once we get out the military, I don't plan to work for anybody again. I'm con by contract, I'm at work today or Monday through Friday minus this 96, we got coming up. We'll be good for Thanksgiving. That's my thought process. Once I figure something out, man, I really tried to figure out ways to where I can out contract. And so virtual assistant was the first entertain in my mind to manage that account and pay $2 an hour or something.

Both:

It'll probably been more than that, but for the Philippines, so yeah, I know I'm saying you probably can more than

Average Joe Finances:

I love to outsource things whenever I can, excuse me. So it's so I just hired a new virtual assistant to help me run stuff with Average Joe Finances and. This one has been absolutely phenomenal. And and I'm paying more than $2 an hour but she's been great and really helping me out a lot. And I think it's super important that, for anybody that's an investor, you're going to put this time into whatever it is you're trying to do or whatever you're trying to build. Remember the why, the reason why you're doing it for me, it was to stop trading so much time for money. I want to be able to take my money. And trade it for time. I want to be able to have enough that I could trade that money for time, which is what I do when I outsource certain things. So that is definitely something that, to keep in mind sure. It might be great to start and get more profits that way to start, but then you gotta find that happy medium where, Hey, where do I scale back? To get some of that time back with my family. So I'm really glad that we're touching on this. Cause that is a big thing. Cause I, I have those same conversations here. It's all about Hey, we want to go do something this weekend. I'm like, oh, I've got ABC or D or whatever, so the way I'm looking at it is like I've got about another nine or 10 more months of like really. Pushing hard doing like my time in the Navy, as well as the podcast and investing and being a realtor. And then after I retire from the Navy, like that's when I can finally really step back and breathe and I could focus strictly on investing the podcast and being a real estate agent and getting some of that time back. And I don't plan on, on I'm not trying to be like the top agent in Hawaii. Like I'm not trying to be like, whatever I just need to sell a couple of homes per year and I'm happy. And and that's where I want to be at. And as a matter of fact, I want to be at the point where I don't even have to sell a home. And I'm actually very close to being there where I don't even have to worry about selling one property at all. That if I do it cool, that's, lunch money. So things like that. That's kinda, why I've been pushing so hard with everything else and I see you doing the same thing, man. That's why I love it. I love having these conversations with you and I was jokingly calling it a rival before, but I think it's more of a brotherhood, right? Because, we constantly were having conversations, whether it's over messenger on the phone or just passing ideas by each other. And I think it's important. Anybody that wants to get into this type of space that you have other people that you can talk to and run ideas off of, or have somebody say, Hey, that sounds stupid, man. Don't do that. Or you might be wasting your time and your money, or, Hey, I did this, it didn't really work. Maybe try this instead. Surround yourself with those people that, that have the same goals and aspirations as you. And that's why dude. I love talking to you. I love talking to Amyra because, it's just like this mindset that you guys have that just, it helps motivate me and the way you did things, married with kids and a family, we're in very similar situations and being active duty in the Navy. It's where do you find that happy, medium? Where do you find that time to, to make things mesh well together? And I really respect that and I really respect the fact that you bring that up because a lot of people don't really talk about that. You listen to other podcasts and it's all about, oh yeah, Hey, I did this, and this. And now, now I've got this going, I've got this much assets under management, blah, blah, blah, blah, blah. But what about the other part of it? You're doing this to try to get time back right? Now some people just want to keep growing and growing and growing and that's, their goal and that's their aspiration, but everybody has different reasons. Everybody has a different why. So it's super important to understand what your, why is. As you move forward. And I think on your show, you call it, what is your rich state of mind, that's super important that people think about that. What is your state of mind? What is it that you're thinking when you start investing in real estate? Why are you doing it? Why? So I think that's super important in a very good point for you to make, so I definitely want to say, I appreciate that.

Anthane Richie:

No, thank you, man. I like the fact that I guess this is maybe unsexy part two of real estate investing or where I don't want people to think it's easy as 1, 2, 3, and then go, ah, but at the same time I want, I definitely want to encourage people to still invest. And if you listen to our shows, you could obviously tell that real estate investing in real estate is definitely our niche. We like to cover other things, but. I want people to be like, all right, I'm gonna go into it, but let me make sure I check these boxes first. So when I go into it, I'm not that person they're like, oh yeah, don't do the real estate market. It's going to crash it, it didn't work out for me. I don't know at any point in time. And I think in these last two, three years, we've been has been a bit unique. In a way, because we've had where it was stable and it went up and then everybody went frantic and then people were not paying rent. I think for those that haven't been invested the last two or three years, and that was that's your lifetime of investing and you've had a very unique lifespan. And you've probably added about seven years of experience on CSL, vice the normal three to somebody who's been through. And for those that have made it through this timeframe, kudos to you because you've, hopefully you've took more good things from this than bad because this was an opportunity to just pivot all of this and business. Figuring out where's the money going, the money doesn't go. It doesn't disappear. It just goes somewhere else. So there was someone I was talking to them, a lot of my episodes money went towards self storage. So if you were in commercial real estate, yes. You may have gotten a, felt the pinch on your one to four unit properties or maybe a big multi-family, but if you were in self storage, That's where a lot of people were put getting money because people were downsizing during the pandemic and they had to put their stuff somewhere. So the money just goes shifts to somewhere else. And you as the business person, entrepreneur asked to identify that you have to solve that problem for people so that you just don't get rolled by the circumstance.

Average Joe Finances:

Yeah, those are all fantastic points. And, to think about what it's been like over the last two years, especially with the pandemic, the experiences that we've had, as investors as somebody just trying to live life and get through, like what it's been like the past two years, it's definitely something to look back on. Probably something that we'll look back on, 10 years from now, 10, 15 years from now and be like, man, What a crazy time, like what a crazy time to start getting involved and in investing in things like that. And for a lot of people, like they're starting off now. And I think it's, you have to be careful because it's not always going to be like this. You're not always going to, buy a piece of property. That's going to appreciate 15% in one year. It's just, it's not realistic. But again, you have this whole scarcity going on right now with real estate because properties are getting snatched up left and right. Again, it's not always going to be like this. So take advantage while you can, but at the same time, be careful because you don't want to get yourself over leveraged to the point where, you did too much. And then if things start to go south, you're going to be in the hurt locker. And you want to do everything like you said earlier with with how modest you were being with, Hey, the website tells me 80%, but I'm going to really actually look 66%. So you want to be a little conservative in your numbers and if the numbers still work, when you're conservative in your numbers, versus what any other calculator or anything else is telling you always bring it back just a little bit. Just in case, because, I'm pretty sure I shared this story with you on your podcast. And when I was a guest a while. About my duplex that I had back in Chesapeake, where I had a renter that couldn't pay rent for almost nine months. And I was eating that, that entire time until I was able to get him in this program that actually back paid me the rent that he owed, which was fantastic. But at the same time, that could have also never happened. They could have also never made that program and I could have been stuck eating that. So it's definitely something you always want to take into consideration. We were living in unique times right now, but at the same time, it's never going to be the same five years from now. It's always, it's, everything's always ever changing. And what you have to do is change and adapt to whatever your environment is. Being an investor, especially in real estate, you need to be a chameleon. You need to find whatever the next thing is and change colors and get with the program. Otherwise. You're going to be sticking out like a sore thumb, and some predators is going to come along and snatch you up. So that's just, a good way to look at it now. Okay. I want to ask you something. I didn't ask you last time, and this is something I want to start asking guests that come on the show. But I'd like to know if you have a favorite business investing or real estate related book or podcast. So I would say my favorite pocket is yours. As far as business podcasts. Thank you very much. So average Joe finances. I happen to be very fond of Rich State of Mind myself,

Anthane Richie:

Thank you thank you. A book. I am actually, and I'm a little late, but you said business book, right? I guess the small

Average Joe Finances:

business investing or real estate related.

Anthane Richie:

Richest man in Babylon, I'm really late to that party, but I actually started I'm almost done. And I started reading that book. So I like the fact I'm reading this actually, because I think when it comes to finances and real estate, We're so advanced now as to what we were, this is say at the beginning of my journey and that book has actually realigned me back to some of the fundamentals that I actually was getting away from. And it's perfect timing because our day-to-day finances will change. Once we move into a new house, a new mortgage. New bills. The richest man in Babylon if he had never read that book before check it out. I think whether you are a individual, that's leaning towards the Dave Ramsey's of the world. But you want to get something with a different flavor. That's a good book to read, or if you're just looking to get a re honing back on your back on track financially, because you feel like you get into some bad habits with money. That's a good book too. And was that it? Was it one more?

Average Joe Finances:

Yeah, no fantastic. Okay. Richest man in Babylon. Awesome. No, and that's good feedback too, especially what it, what it's about and what, what it's done for you. So that's good stuff now. We've had you on the show before, but I would like a reminder for people if they could, where they could find out more about Anthane and Rich State of Mind. Can you share your website and social media with us?

Anthane Richie:

Yes. So websites, richstateofmind.com. We have a blogs up there, got new ones coming out been pushing out maybe about two or three a day, probably for about the next two weeks. I'll be doing that. We have the podcast were up to 71 right now, but plus a bonus episode with Mike Cavaggioni. And then we have recently

Average Joe Finances:

I really liked that guy by the way.

Anthane Richie:

Yeah. He's awesome. And we have our resource pages as well, where I try to give templates for leases estaple agreements addendums good books to read. I have my ebook up there. I got to put my other two eBooks up there as well. So recommended books and budget guides as well, cheat sheets that people could use on that resource page. So check it out if you want something very quick, it's all free. Subscribe, if you want, add your email to the email list. When I put up more. We have a Facebook page for state of mind with a light page and a group page under rich state of mind and we have a Instagram, which is rich state of mind page. Yeah.

Average Joe Finances:

Yeah. We'll make sure we get the link in the show notes as well. Anthony dude, it's been an absolute pleasure having you on again. We had to flex a little bit cause a conflicting schedule stuff going on right now, but I appreciate your flexibility. As well as working with me here so we can make this happen. Always a pleasure talking to you. I, every time we talk, I feel like I was like, man, I wish we could just hit a record button and just record some of this because there's always great stuff. Every time we talk. Having you back on the show again, as matter of fact, you're the first person, I think the, to come on the show twice. So I'm really excited to, to get this one out there for our listeners, because it's always great content when we're talking and you're doing some really good stuff, man. You have really positive energy. With with everything that you're doing and just giving back to the community the way you do with your podcast, blog, and the resources that you offer for free. I'm going to point that out, everybody. So go check out his stuff, go to rich state of mind.com really good content out there and go listen to his podcast because I'm telling you, if you listen to my podcast, you'll love his show. Go check it out. Anthony, Hey man. Again, absolute pleasure talking with you today, brother.

Anthane Richie:

Thank you. Awesome talking to you as well, man.

Average Joe Finances:

Aloha.