저자: Kevin · 외국인
요약 보기
오하이오 중부 5세대 아파트를 3.5만달러에 매입해 1.5만달러 수리 후 BRRRR 방식으로 재융자(감정가 14.8만달러)한 사례를 소개. 월 임대수입 약 2,400달러, 이 지역 치안 문제와 세입자 이슈를 언급하며 투자 수익성과 사업 운영 노하우를 설명. 주식·금융 자산에 대한 가격 예측 발언은 없음.
다듬은 글
It was a cold November day in central Ohio, where Brandon drove me to his $35,000 five-unit building , as we were coming from his mobile homes where there were times he almost had to pull out his gun. I have a gun, Lisa. That's the part that makes me nervous. I asked him, "Do you want me to stay behind?" Oh, no.
Alright. I just wanted to see. Brandon is making me nervous again . Although he assured me that this time would be different because I know all the tenants who live here, and it always bothers me a little to see people coming and going that I don't know. So buckle up and watch as I asked Brandon how he got five units for $35,000, the cash flow, present value, renovation and repair decisions , tenant headaches, and more.
So, Brandon, where, where are we? Um, in terms of... what part of the city is this? Oh, this is the far east . And you mentioned that this is, uh, this is one of the best areas. Yes, this is one of the worst in all of southern Ohio. Let's go here and open it. That is, I mean, if you started Googling missing women.
This street and neighborhood are known for having several women who simply disappeared in broad daylight. Uh-huh . My maintenance workers are inside right now. Uh, and there's ... I saw something like the Avengers motorcycle club . Actually, yes, it is a motorcycle club and they are a net benefit to this area because they keep a lot of problems away.
Uh-huh . My God. Do they make you pay? No, I don't have to pay them protection money. I stay out of their business. They stay out of my business. And from what I've heard, they are very, very kind. So, let's go Avengers! I say, oh my God. Should I say that? Am I allowed to say that? Because I don't want other motorcycle clubs saying, "Oh, Brandon likes the Avengers ." They have a pretty good reputation in this community.
They collect toys and things like that. They keep their part of the street clean. Uh-huh. Are there many of these motorcyclists? Oh, yes. Southern Ohio is very important for motorcycle clubs and things like that. I must say that I still wasn't convinced. Very good, great. Now we can go in. Well, it's much hotter in here .
Oh, yes, that's right. So, this is the five-unit building for $35,000. Very good. Let's talk about this. There are five units. Two of them are empty now. Yes. And it was a coincidence that we had two vacancies because I almost never have vacancies. I mean, this is beautiful, like this wooden floor. I think it's oak or cherry.
It 's usually 1.5 to 2 inches of oak and you could restore it, but honestly, you probably won't do it in this neighborhood. I won't do it in this neighborhood right now . Then we started talking about some of the original features of the house, because when I look at real estate in California, I usually don't look at anything older than 1940, mainly because of the earthquakes.
This is definitely from the era of the industrial revolution. And speaking of revolution, if you want to participate in the Black Friday offer for my real estate courses, be sure to use the coupon code black cyber sale. Remember, you can find me on and sales course . Yes, these are pocket sliding doors .
How old is this? Uh, 1890. Yes, I was going to say it's from the beginning of the century. 1890. The sliding doors still work. This is truly incredible. I mean, are these 4-foot doors? Four. They're, I mean, probably worth at least 300. I've met people here who go to Ohio and take these doors off because there's a whole special frame that exists for them.
They tear them out. They put them in a truck. They send them to California. And I'm not lying, these sliding doors sell for 20k. I'm 100% sure if they've been restored. These are painted, which is a shame. So, there's another one over here. So, I mean, I need to get my painting team to come here. So, there are a few nicotine stains on them, but it's going to be...
Wait, can you tell they're nicotine stains? Oh, yes. Do you see the nicotine? What happens is that the nicotine gets into the walls and during the summer you get some condensation and some humidity, and these nicotine stains dry or get wet from above and run down. That's why I hate that smoking isn't allowed in my rentals.
I mean, I've had meth labs. I've had all those crazy kinds of things and they're all good, you know. Yes. I mean, nicotine and smoking cigarettes bother me as much as everything else because it happens so often. And I go to my tenants and tell them, "Look, every dollar you cost me has to come out of someone's pocket." And so, a house like this, excluding utilities, rents for about $400 or $450 a month.
They closed this off with a wall to make another bedroom. Yes that's fine. So what you're really doing is proving that, you know what? Being a homeowner can actually be a service to the community . Yes, it can be a community service. It can generate money for an investor. Everyone can benefit from being a business owner, but there is a great deal of distrust towards them because people don't know how to run businesses.
What happened here? They're just abandoned chimneys. There's probably a much nicer fireplace behind it, but they had to seal it up because people don't burn wood anymore. Yes. Oh, so they don't let the cold air in, and what happens is that a huge draft would come in every winter, and it would be just awful.
Oh. What are your renewal plans here? Uh, I was meeting with my team. Hey. Are you going to install a shower? Yes. Oh. She took it away. Oh. Damn. There used to be a shower there that disappeared after the tenant moved out. And she's so kind. So, what happened here? Oh my God. No no. Because we put showers in all our rental properties.
It's like a mandate I have in my company. Install nice showerheads and all that. And there's no watering can here. OK. And you have slats and plaster. So you have work to do. Yes. That will be great. That just ruined the return on investment. Yes. Yes. Go sell it now. This project sucks now. Yes. Kevin and I just ruined my day.
I have to take care of it. Let me guess. Um, nothing. She's ready to start. I mean, I'll tell you, I put it on our website Sunday night and I probably already have 25 applications. Are you already advertising it for rent? Yes. Just to accumulate applications. So, I know we have a technological system, but how do you start advertising it when it's in this state?
Because I don't post pictures of her. Okay, how do you advertise it without photos? I do n't need them. That? Yes. But when I see online ads without pictures, I think, "Why?" . I have one of the largest social media rental sites in the state of Ohio. So I post things on social media and I get all these requests.
I have a pretty good reputation. So, I have to come in like, "So they're probably based on the price, but also maybe on getting to know you," and then you guys have a leak here. What's with these bronze-colored gas caps sticking out of these small 1/4-inch valve pipes? I have no idea. And obviously it's leaking.
And as I said in my video, this had carpeting. So it's like I'm coming in here. This is the second day it has been empty. Oh, Bren forgot to tell you that there's a leak where the washer and dryer connect. Ah , yes, those wonderful old 130-year-old apartments. Yes, we're ruining them a little. Brilliant.
Wow. How is your roof? Um, we put a new roof on the back of this property. They already did it. Good. Now, does it ever make sense for you to switch from these single-pane wooden windows to double-pane windows? Yes. Um, and I go every year and buy X number of windows. Is it just because it's so cold here?
Yes. And you have very cheap labor. Cheap labor. Yes. They'll go to the basement. I mean, is it scary? It's just weird. Let's see it then. Alright . Very good. So, it's interesting because in most areas of the country, according to Energy Star, the return on investment for installing double-pane windows is about 3%.
OK. But I have a feeling they're talking about professionals, fully licensed contractors, you know, $75 an hour. I would venture to say that here in Ohio , you guys do this for $19 an hour. Yes, $19 an hour. I would venture to say that the return on investment in windows is about 12%. Now, look at this because your labor costs are very low.
This basement is off-limits to my tenants. Um, so this is essentially just a maintenance issue. Oh, man. Wait, what, is there a leak here too? I'm sure it's this insulation that's soaked. You have OK. You have, I mean, you have work to do. Oh, yes. Yes. Because we haven't been in this unit for, uh, probably 2 months.
Wait, when did you buy it? When did you buy it? Oh, I bought it a year and a half ago. Wait, you bought this a year and a half ago? Yes. And it's been... You only had two vacancies, that's what you say. Yes. Oh, so that's why you're here now. Yes, because I mean, I do annual inspections on our properties, and if I'm not very good at inspecting behind the pile of chairs, for better or for worse, it's like, look at all this junk here.
And we move it. We came to live down here. Nobody. This is just tenant garbage. Nobody was supposed to. No, I doubt anyone was living down here . Um, I heard this was, um, Wow. for one of the previous owners or managers . He used to throw parties down here . Um, so you already know what it is. Okay, you bought this a year and a half ago, uh, for $35,000.
Yes. And...how did you come across this particular deal? This was owned by a local man named Gary. He gave his 32 units to Gary, who we keep hearing about; this is Gary's deal. He gave 32 units to his son to administer. They were generating $12,000 a month in revenue. He is the one who led him to ruin.
It led Him to total ruin. There were drug dealers in every one of the places he owned, and boxes, let's call them that. Yes. Um, there were drug dealers in practically every unit I had, and I had to go around and kick out probably eight or ten guys who were selling—a nightmare scenario. We had, um, this guy living in a house for 2 years.
With no rent paid at all. The water had not been connected for a year and a half. They had a child in the house. Yes. I had to call Child Services because of You Called Child Services. I called Child Services. Uh-huh . Now, is this the thousand-meter insulation we mentioned in mobile homes? That, uh, is called Great Stuff.
They sell it at Menards for about $3 a can. And my contractors were here and said, "Brandon, we didn't do that." And I said, "This is the ugliest and most disgusting thing I've ever seen here." This is so ... I mean, I'm a proud hick, but this is so hickish I can't get over it. Um, so they're going to come in and re-finish all these windows.
Yes, we installed the new countertops. Wait, is that snow? No, this is Fort M, right? Yes. Yes. Yes, this is Fort M. Wow. This is... this is nice. It's nice. It is. Oh, you see a bubble over here. But yes , we really shouldn't have bubbles . That happens. Okay, did you do the linoleum? Um, yes, we did it.
And we put down the linoleum because it's not a bad color or quality. It's just that someone messed it up when they started moving things around. They brought this refrigerator and just dropped it there. Washing machines and dryers were passing by here and got caught on the machine legs and, instead of stopping, they just wrecked everything.
So I asked my people and they said, "Okay, Brandon, this is something we've got rolls of." "I have a warehouse full of this." Well, this material is inexpensive and looks good when it's new. Now, there are a lot of scratches here. And what about their deposit? Are you going to deduct money from...? I already did it, I'm going to return 100% of the deposit.
Because? When they did this on the floor, they could pay for... She had a health problem and has to live in a smaller, newer place. She shouldn't have ruined your apartment. I agree. But I like him. That's why you need a property manager. I have it. I mean, honestly, this is nice, although...These, these are ceilings that are like 4 meters high.
These doors are amazing. This floor is beautiful. These windows are beautiful. The porch is beautiful. This is a very nice property. And you don't have earthquakes here. So you're not worried about a building from 1890? Me, anything from 1890 in California, I wouldn't touch it. Yes. And once again, 4 to 450 a month for this.
Yes. Yes. You should have kept his deposit. Yes. And, and, and I'll make money from it. My tenant is happy. I am happy. Everyone is happy here. Yes ok. Good. It smells like Lysol around here. Yes. So, it sounds almost like my cleaning lady came between the last video and this one, because there was a lot of dust bunnies.
There was a dry sink. This is new. Yes. There was a dry sink on the first floor that appeared out of nowhere one day. Let's go here. Here. Uh, this one here. Good. And the others are all busy , right? Yes. There is a dry sink on the first floor. It appeared after I bought the place and there are some stains up there .
That's a major point of contention. Between my contractor and me. Uh-huh . Wait, were they supposed to come and redo all the plaster there? Yes. It seems they did. No. Have you already paid them? Oh, yes. Brandon, you need a property manager. Well, if your people watch my channels, this is the guy who, um, invited the prostitute to live with him .
Oh my God. And where am I? Yes, she invited, he invited the prostitute to live with him. Then she started bringing in all the customers. How do you deal with this? I mean, well, to be honest, oh, this is cute. Did you do it? What is this? A vinyl record or something? No, this is... Oh, it's linoleum too.
Yes, it's linoleum too. Good linoleum. Now, I'm serious, get rolls of this stuff. Seriously, put this on from now on . This is much better. Okay, this is fine. I really like it. This is the second one we have in stock. OK. But it should be the only one. Yes. However, from now on, I think I finally have an LVT product, a luxury vinyl table, and I have it on my desk in my office.
And every now and then, when I get angry, I take a knife out of my pocket. And I start stabbing him. You can't even do anything to him. And a guy told me he could get it for me for $1.75 per square foot. That's right, that's great. It's really good. But it is, I asked him. I said to him, "How much?" My cost was about $1.90.
Yes. Well, I said, "How much do I have to buy to get it to California? " Because if I can get labor and installation for about $2.50 or $3 per square foot— yes, probably about $3 per square foot—I'll put it in every rental from now on . But the last big renovation job I did, I went to Menard's or Lowe's and tried to get a quote.
Yes. And they said, "No." "Three dollars." Three dollars for the material. Three dollars just for the material. So I said, "I'm going to spend four dollars a square foot when it's all said and done." No, you'd be at five or six dollars if you paid that much. This isn't bad. No. I mean, it's very dated.
It's from the '80s, but it's higher quality. Oh, yeah. No, these are ' 50s cabinets, uh. I keep cabinets like this and I actually stain them. I paint them gray with white countertops and this white backsplash like this, and they look beautiful, but these cabinets, I mean, I hate to say the typical thing, "They don't make them like they used to." They don't make this anymore.
A lot of these were built on the spot. This is quality, you know, solid wood, basically. Now you get thermofoil unless you pay a fortune, you know. Yeah. So the build quality is okay, but they need some work. They need a little TLC because we've got pieces, moldings, and things that need fixing, which we'll do.
Here for the next move. So I'm organizing all of this, doing my YouTube stuff, and running the laundry at the same time. Yeah. You have a lot of different types of flooring in this place. Like, just standing here, there are four different types of flooring. Yeah. Why? Simply because we didn't come in to replace everything.
You do it when you need to. We do it when we need to. Um, because it's not justified. No, it's not justified by the cost. And this unit right here has like five types. Yeah. This unit is like a $ 350-a-month deal. Okay. Whoa. Really? Six types. Okay. Yeah. Wait. No. No. One, two, three, four, five. Yeah.
Six types. This one is mixed. Yeah. Why? Like, actually, that looks great. Yeah. Wow. No way. Did they run out of material? I do n't know. Because the thing is, I left it with the contractor and gave him access to the materials I had. Yeah. And you told him to keep going? And I said, "You have access to "My warehouse , make it look good," and then we have this mess here, and this is what I found one day.
Uh-huh . And I have to make a decision personally. Is this worth 350 a month? Well, how much do you think it's worth? 350 a month. Well, what decision needs to be made? What do you mean? I mean, no. I have to make a decision. Is it, oh, is it worth fixing? Is it worth fixing for 3 or 50 dollars a month now?
I have, I have to be honest , I have...oh, never...that's the plastic backing from when you go and buy one. The fire, oh, it's a...this is a new shower rim . So nobody ever noticed. But what about the installation? I do n't know. It was the same contractor. Uh-huh. Maybe you have to talk to him. Again, you know, what you have to find, and this would help your business a lot, is a guy who does porcelain refinishing.
Yes. I need to get this white again and deal with the chips and rust you have, because that's just going to rust a hole in your tub. Yes. But instead of trying to fit a new cast iron tub in here, you get it re-enameled white. That would look beautiful for $300. Yes. And I need to find someone who can do that, because I used a local guy to enamel it and I wasn't happy with it at all.
Uh-huh. That's a shame. Yes. I think our furnaces are here. What's this? This is like a big ... fire escape. Oh, that's a fire escape. Yes. Okay. Yes, we don't have that even though we have fires. Really? In the state of Ohio, I understand it's required on the third floor or higher. No, we have three-story houses everywhere and no fire escapes.
That's interesting. Yes, that's interesting. I think... I thought it was a national zoning agreement. Yes. Or, okay. Very good. And you'd think California would be... Ohio It has something better than California. We finally figured it out. It's, uh... Oh my God. Okay. Well, I mean, I get it. I mean, I see your dilemma because it's like, look, if you put in an extra $10,000, how much more are you going to get in rent?
Like $10. Probably $50. Yeah. Okay. So I have to ask myself. That's $600 a year, which over $ 10,000 is, you know, 6%. But, you know , if you're able to keep them as they are and invest in another business to earn 10%. Why spend money on the six? Yeah. And then, but then I have to... I always look at something.
Is it safe to live in? Yeah, it is. Is it ugly? Uh, possibly. I mean, I guess. I like the kitchen. I would n't mind anything else in this house other than the kitchen. And the stove is gas. Yeah. Yeah. And I love that the stove is gas here. Okay. Yeah. Wow. I mean, But what about these frames? They, uh...
I'll have my guys restore them. Are you really going to do that, or is it not worth it for 350? No, I think, I think I can have my guys restore them. Okay. I mean, really, they just need a sanding, maybe some filler, and some paint. Yeah. Filler. Yeah, we did that on the third floor, and they turned out great.
I believe you. But the problem is... Oh, and this is all painted over. I mean, they're coming away from the wood. They're starting. Well, this is your duct tape scenario you talked about at the mobile homes. Oh, yeah. Yeah. Where? Okay. Yeah. So, they and my guys can come and fix them. If we see it's a, uh...
if we see it's a problem, we'll come and fix it. But I'm running into this problem that nobody calls me to tell me what they want done. No, of course not. Because the tenants pay so little, they don't want you to raise the rent. They're actually smart. Look, in California, tenants ask us, "Well, landlord, can you trim the palm trees for us?" "And you tell them, you realize that if we start adding more utilities, your rent is going to go up in the end.
And now, if you think about it, someone can go two blocks over there, get a job at McDonald's, and make $11.50 an hour. And that's fine around here. Yeah. Well, $11.50 an hour, if they can get 40 hours a week, which , you know, it's true, can be difficult. $400 a month before taxes, or $400 a week before taxes.
$1,600 a month. They're not going to pay income tax; they'll be under the exemption or the standard rate. Really living on a rent of $350. Yeah, that's under 25%. So, it's like five, I think I want $500, maybe $525 for this with all utilities included. And with the FHA, they want you to be at 40%. It's like 50% for your house plus your utilities, which with an income From $ 1,400 a month, that would be $700 a month.
You get this place for $500. So now you pocket $200 , you're under the requirement, and you can save your money for a better place. Right. So tell me the numbers. Maybe we'll get out of here at the same time. Uh, well, $35,000 acquisition, I put in $ 15,000. Two years ago. Yeah. Okay. You put $15,000 into it.
$ 15,000, like how much? Repeat that. $ 15,000. $ 15,000. Okay . Good. And was that the down payment or the remodel? That was for the remodel. $15,000 for repairs, $35,000 for the acquisition . Mhm. I had a bank come and appraise it; it was one of the few BRRRR deals I've ever done, where I bought, renovated, rented, and then refinanced.
The appraisal was $148,000. What? Yeah. Because you invested 50 in the business and you got 148. Yeah. How long ago? We, uh... last year, in August. Oh, so you had a year of capital gains, but still. Well, it wasn't capital gains. It's cash flow based, because we get 2,400 a month from... you rented it out, and when you bought it, it wasn't...
Yeah. And the main thing for them when we refinanced was the fact that... it's making money. They just took the capitalization rate and the gross rents and compared them to the neighborhood. And the actual market comparisons were like 100. The cash flow said it was worth 200. So they split the difference and appraised it at 148.
Okay. I refinanced and got cash for 124. So if this had been a standalone business, which it wasn't, I would have made 74,000, but I took that and reinvested... I really put money into two single-family homes on the far east side. One is Bringing...you Californians would love it. It's a little wartime house , built after 1947.
I have very few houses built in the '40s and '50s. Almost everything is as old as this, or most are 100 years old. And well, we have that house. Uh, I have these two houses over there. It's two bedrooms, one bathroom, and a full basement. It's on over a third of an acre, fully fenced, and I'm thrilled to make $625 a month on it.
I'm making a lot of money. And they have the biggest yard in the world out there . What are your total rents here? It's about $2,400 a month before utilities. And that's about how much per unit, $500? It's like $500. Yeah. About $500 a month per unit. And they're all one-bedroom, two-in- one. Uh, yeah, I have 21.
One. The second floor is a 21. And then back there's another one, there's a 22, or no, a 12. Have you had any problems with the tenants? No, not really. The tenants have been pretty good . No, I haven't had a single eviction here. Although this is a tough neighborhood, the property isn't very good. The tenants like it, they don't like the neighborhood or some of the neighbors.
So, the biggest difficulty is my project for this street. Me and some of the other landlords were trying to buy every house on this street, get all the drugs out of here, kick them out of town, and um, kick them out of town . And yes, I actually had two people commenting on my YouTube videos, people I've never met , and they said, "I can't believe Brandon is posting his real estate stuff on this." You know, they 're sending, they're posting public comments about me cleaning up this neighborhood because they see my 30s, they know this.
Yes. They know this neighborhood and they say, "The drugs are leaving. You and your landlord friends are getting the drugs out of town." "Which really, I mean, makes me feel good. That's priceless marketing . And these people are just finding my laundry-coin-collecting videos and then saying I'm the same guy who owns this place down the street and I'm putting cameras in my rentals.
'You're doing that?' ' Oh yeah.' 'Did you have them here?' ' Um, I had them until a guy came in and stole a couple of them. And then I have to reconnect them and put them back up.' But the thing is, my idea sounds like a lot of work. Yeah, it is. But what I'm aiming for is to put them in every house, and I own about five or six properties on this one.
Getting all the other landlords on the street, basically, is going to cover the whole street with cameras with all the other landlords, which will be about 15 different properties. Not bad at all. The house that is... uh, I own a house here... um, I bought it four years ago, no turnover. The second house I've had tenant turnover.
I have five units there, and in two... what, a A year and a half, two years, I've had, what, three turnovers, I'd say. It's okay. Which really isn't bad at all. They stay there an average of a year, a year and a half. They want to save money and then get something better. That's been the typical tenant I've had here, which I totally agree with.
I totally get it. You're a young person, you don't want to live in this neighborhood forever. That's fine by me . Save your money in the bank. Go find something in a better part of town. But for me, it's a good option. They can put an extra two or three hundred dollars a month in their pocket, I guess.
Yeah. Yeah. They could do that lease option deal you were talking about. Yeah. They could go for Sean's place if they save up $10,000. So, wow. Yeah. Well, Brandon, thank you again . How can people follow you again? Um, Instagram. On Instagram, it's investment joy. All in one word. On YouTube, it's investment space joy.
And I make the videos of the Laundromats. I do some renovation videos, some dilapidated house videos, and a little bit of everything. As long as I don't get shot live, it'll all be fine. So, well, there you have it, folks. Until next time.
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