The Fast Track to Financial Freedom & Turning $29K into $1.5M by Doing THIS

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If your end goal is financial freedom, investing in real estate is one of the best ways to get there. But, if you want to reach that goal sooner rather than later, you may need to leverage several strategies at once. Today’s guests were able to fast-track their journey to financial freedom by doing just that!

In this episode of the Real Estate Rookie podcast, we’re chatting with husband-and-wife real estate duo Joe and Andrea DelGrosso. Their investing journey started back in 2016 when they bought a single-family rental without knowing very much about real estate. Although they initially invested for some extra financial stability, their focus shifted in 2019. As they started tuning into BiggerPockets and educating themselves about real estate, they realized that there were ways to expedite their path to financial freedomtapping into equity to turn tens of thousands into MILLIONS.

Today, the DelGrossos have a modest portfolio of ten properties. Stick around as they share how they were able to create multiple revenue streams from a single property, as well as why they made the transition from long-term rentals to short-term rentals. For rookies who are still deciding on which real estate strategy to use, they touch on everything from 1031 exchanges to BRRRRs and more!

Ashley:
This is Real Estate Rookie episode 321.

Andrea:
Still trying to learn all these terms, BRRRR, FIRE, financial free, all these things, terms. But I feel like with this condo that we bought in 2019, it was a two bedroom, two bath. We bought it and it needed a full paint job, which we DIY’d, then we rented it out. Fast-forward four years later, we ended up actually selling that and 1031’d it into our biggest short-term property that we had. But in between there, we also did a cash-out refi on it because we increased the value with the BRRRR. Pulled some cash out and we bought another property with that.

Ashley:
I’m Ashley Kehr and I’m here with my co-host, Tony J. Robinson.

Tony:
And welcome to the Real Estate Rookie podcast where every week, twice a week, we bring you the inspiration, motivation and stories you need to hear to kickstart your investing journey. Today, we’ve got a dynamic husband and wife duo, Joe and Andrea DelGrosso, and I really enjoyed chatting with them. We’ve had a few husband and wife duos on the podcast before, and just like the others, I think they’ve just brought a ton of value.

Tony:
There’s one point where we’re going over the numbers for their deal and they invested $29,000 into one of their initial investments. And we did all the math live on the podcast, and their minds were blown when they realized how much they had turned that $29,000 into, and I’ll give you a small hint that it’s over seven figures. So really cool episode. They talk a lot about light bulb moments they had on their journey and they talked a little bit about how to get your spouse on board, which is a big question we always hear. So love talking to Joe and Andrea. What about you, Ash?

Ashley:
They also share their mindset shift moment as to how they started their journey and then how they pivoted to something that they thought would suit what their needs were and what they wanted out of their life. So really interesting to hear how they went through that shift. And then also talking about the short-term rental management stack of what are the pieces of software that they use to run their short-term rentals. And they talk about how they’re able to do a lot of that stuff remotely and also how it’s become more passive. It’s still very, very active strategy, but being able to use some of these software stacks and setting up different things within them has really helped them. So if you have short-term rentals, you want short-term rentals and you’re going to be managing them, this is definitely the podcast for you to listen to.

Tony:
Yeah. And ultimately, Joe and Andrea were able to achieve financial freedom and go full-time into the real estate business with a relatively small number of properties. So if you’re looking for that framework, this is the episode for you.

Tony:
But I just want to share some boring banter, Ash, and some life updates. She’ll be 34 weeks this Thursday, so we’re getting pretty close to crunch time but actually, so Sarah and I, we’ve been dating since we were seniors in high school so we’ve been together for a long time, but we got married in our late 20s. And I come downstairs on Sunday morning, she woke up before me, and she’s got the living room filled with balloons and there’s a bunch of our engagement photos and the day I proposed to her and our wedding photos, and it said, “Happy 1,000 days of being married together.” And it was just such a special thing, and Sarah has always been so good at being creative. Never in a million years would I have thought to celebrate a thousand days of marriage, but she’s a special person like that. So I just got to give a shout out to my wife here who’s eight months pregnant, still doing her best to make other people feel special.

Ashley:
So thoughtful. That’s really what she is and how she does that. And I had seen the pictures you posted on Instagram. Love it and stuff. So yeah, that was really, really sweet of her.

Tony:
Cool. Any boring banter on your side, Ash?

Ashley:
Well, I went to the lake this weekend, and I did a morning week surf session and I faceplanted pretty good. Once someone started videotaping me, I smiled like, oh, I’m so cool, and then faceplant, but actually turned it into a reel on my Instagram. So if you want to go check out the video of me faceplanting and turned it into how you should be joining me in the Real Estate Rookie Bootcamp and you’ll faceplant on your real estate deal if you don’t, but if you want to check that out, you can go to biggerpockets.com/bootcamps.

Tony:
We’re such influencers now. Everything that happens in our life gets turned into social content. Before we get into the conversation with Joe and Andrea, I want to give a quick shout out to someone by the username of Sherry J68. Sherry left us a five-star review on Apple Podcasts. She says, “I love Ashley and Tony. I listen on my long drive to work on Thursdays and look forward to the real estate lessons from their guests. I’m a nurse practitioner and new to real estate, but I took the advice of some of the podcast guests and found myself a mentor, a JV partner and met lots of new people at the local Rookie Meetups and I’m ready to find my first flip. I have my team together and I’ve been writing letters to target populations and feel like I’m almost there. My goal is to do some flips to fund my rentals and keep scaling. I’m so excited to start this new career and I love it. Thank you so much for all the free education. I learn something new in every episode.”

Tony:
Guys, that is why we do the Real Estate Rookie podcast. It’s for stories just like that. So if you haven’t yet, please do. It only takes a few minutes, a few moments of your busy day, but leave us an honest rating and review on whatever podcast platform it is you’re listening to because the more reviews we get, the more folks we can reach, and the more folks that hear this message, the more folks we can inspire to change their lives. So do us that favor. Do someone else a favor and pay it forward,

Ashley:
And congratulations to the person who wrote that review because they took action. It’s easy to listen. The first step is listening to the podcast, but really that second step of actually taking action. So thank you so much for sharing that win with us that you’ve built your team out. That’s really incredible.

Ashley:
So for today’s social media shout out, I want to give a shout out to Lauren.Mattina, so L-A-U-R-E-N dot M-A-T-T-I-N-A, on Instagram. And Lauren is a science teacher and real estate investor, and she’s sharing her journey on social media. So go check out her Instagram page and give her support.

Tony:
Joe and Andrea, thank you so much for coming on the Real Estate Rookie podcast. We are excited to have you both. If you guys can, just tell us a little bit about your backstory and how you got started in real estate investing.

Joe:
Yeah. So I’m originally from Boston. I worked in television so I moved all around. I went out to California for a little bit, and then in 2012, I moved to Knoxville, Tennessee where Andrea and I met at a company we were both working at in television. And then, yeah, I don’t know, I guess we started our story together and started dating and we got married in 2015 and going through life and eventually, we started our real estate journey in 2016, buying a single family rental. And then today, that has now jumped to, we have six long-term rentals and four short-term rentals.

Ashley:
Well, congratulations on that.

Andrea:
Thank you.

Joe:
Yeah, that’s like the 30,000-foot view.

Ashley:
Yeah. So what was that initial moment where you were like, we’re going to buy that single family house? Walk us through those initial conversations. Was there one thing that happened where you were like, I want to do this?

Joe:
Yeah. So I would say in 2016, we were a year in married and we started to make some money from our jobs. We were working really hard. We were both doing 60, 70-hour weeks just grinding. And really what was happening in my industry with TV, streaming started to have a really big impact, and that was just throwing a lot of different curve balls in the industry. We were working crazy hours, and there was just such a grind factor there that we just started asking the question … I don’t know, we just really sat down. I didn’t want to be the 55-year-old, 60-year-old TV producer if I could even make it that far. There is a lot of you get pushed out at a certain age. Andrea was working at some different companies there, and she was working crazy hours as an accountant, and there was just a burnout factor. We were like, I don’t know, is this life? Are we going to be doing this until we’re 65?

Joe:
We just started asking that question, what else? And that’s really when I thought back to how I grew up, and I was one of three sons. My parents, they were teachers, so they weren’t making a lot of money, but one thing they had, they had two or three rental properties and they were really able to give us this great life on a teacher’s salary because they were able to access equity in the properties and they sold some and then bought some. There was always that presence of real estate in the background that I saw growing up. So when the time came for us to be like, we need to add some security to our lives, that was the natural step forward there, was looking into real estate. And I bought the Stock Market for Dummies book, and I literally did not understand it so I was like, we got to do something else.

Ashley:
No day trading.

Joe:
No day trading. I literally have no idea how that works. So no, the real estate, growing up around it, it just was that natural thing for us to ask, how could we get involved in it?

Tony:
I want to circle back to something that you just said, Joe, because I think there’s a lot to unpack there, and I don’t even think you realized this, but you said that you wanted to add some security to your life and your answer to that additional security was investing in real estate. But there are so many people who look at real estate investing as risky, and they’re afraid to put money into this business because they might lose it all, or they’re afraid to go out and get debt because Dave Ramsey says you shouldn’t do that, or they’re afraid to just do all the things that go into being an entrepreneur and building your own real estate business. How are you able to frame going into entrepreneurship as the less risky path?

Joe:
Really, the real estate stuff, it’s not harder than your W2 job. I’ll say that. Everyone thinks it’s this big foreign thing and it’s a different language and all that. It is not trigonometry. It is not Algebra 10. It’s easy to understand. You just got to take that first step. And it just gives such a great piece of security. It’s not like this sexy, crypto risky thing there. There’s a reason why what 90% of billionaires and millionaires in the country own real estate. It’s an asset class that is so forgiving as an investment. You can trip up and make a mistake, and there’s always just time, I feel like, to make it right. We’re definitely not perfect. We’ve made some mistakes, but what I love about this asset class is you can make a mistake and whatnot. You cannot be perfect and you can still do well in it, and it pays you in multiple ways too. All those other investment avenues I feel like didn’t have the different contributions that real estate does.

Ashley:
Andrea, what about you? Do you have any background in real estate at all or was there anything that you found that give you an advantage and what you brought to the table in your partnership?

Andrea:
I had absolutely no experience, no exposure. I came from, I don’t want to say came from nothing. It was a harder childhood. We’ll just say that, and lost my dad young. We had to go bankrupt. And my mom, growing up, I thought if I could make $40,000 a year, I’ve made it because that’s just what our exposure was. So when it came around to real estate, I just rode his coattail on it. He was the one educating. He was the one listening to the podcast. I was completely clueless. I was like, I can keep our books. I can do the bookkeeping. So I had QuickBooks experience. So I felt good about that. I felt good about the DIY side of properties and making sure that they’re taken care of and they look good and people feel at home when they walk in. But real estate business as that industry, completely clueless and was flying blind with him, letting him lead.

Joe:
There was some hard conversations at the beginning and, yeah, no, we worked through it.

Ashley:
I think that you just said two things right there. You made it a point to say I had no real estate business background, but you brought two things to the table. You brought your accounting background, doing bookkeeping, and then you said you did the DIY stuff. You had the eye for that. That is a big thing. I love design and I love rooms. I cannot put a room together to save my life. I love it, but I can’t do it. Other people can do it way better, more efficient than me. Those things may seem like mediocre things, but having somebody take care of your books, Tony and I hate bookkeeping. Somebody coming on board to partner with us to say, “We’ll do all the bookkeeping. We have experience. You don’t have to worry about it,” anything like that, that would have been a huge attribute to our business.

Ashley:
So I think the point is not to limit yourself as to what you’re bringing to the table because all of these skillsets help and they actually can really create this great business, and that is part of the business. Even though you might think, well, I’m not a real estate agent or I’m not doing remodels or something like that or I haven’t had an investment property, all these other skillsets add to the pile.

Joe:
I was just going to touch on those beginning conversations. They were hard in the sense of like, hey, I think we should do real estate investing. I think this will give us the security we’re looking for. And at the time, I think there’s that give and pull of we are saving like crazy. We were really big savers and whatnot. And she’s like, “Hey, you know what? We should use this money to renovate our bathroom or do the floors.” Where I give Andrea credit is she put those wants on hold and it was like, all right, if you think this is the right journey, let’s take the first step.

Tony:
It’s so funny. Me and Ashley talk about this all the time, but my Airbnbs, the flips that we do, they’re all much nicer than my primary residence. We had paper shades. We had fake blinds, the paper shades at our primary residence for two years because all the extra money that we have, we’re putting back into the business. I think it’s a willing sacrifice or maybe not a willing sacrifice, but it’s a sacrifice you have to make if you want to invest into your business.

Tony:
So just going back to the beginning here. So first, you guys have scaled relatively well. You’ve got 10 properties over the course of seven years. It’s more than one property every year since that timeframe. But I want to go back to that first deal. So when you guys made that decision to become real estate investors back in 2016, I’m assuming you guys, based on your DIY background, and Joe, with your dad’s experience, you guys probably knew a lot about investing at that point. Is that a fair assumption or were you guys flying by the seat of your pants? You’re both shaking your heads, no.

Tony:
So Joe, maybe let’s start with you. Why did your experience with your dad or his lessons make it easier for you that first go round?

Joe:
I feel like being around it, my dad’s properties and my mom and dad’s properties, made it easier for me to get into it, but I had no idea what we were doing. I didn’t know how to renovate anything. I didn’t know how to really assess the rent. We didn’t even have separate bank accounts for the property.

Andrea:
We didn’t know it could be a business.

Joe:
We had no idea.

Andrea:
We just were parking that first one to park some money and build some equity and have a tenant pay down our mortgage. We didn’t realize we could make this a livelihood and we can build it into the business that it is today. That took about three years before we had that moment.

Joe:
Yeah. And I think whenever you get really first into real estate, you try to find your lane. It’s like, all right, I thought I was going to love the renovation stuff. I touched a floor and I was like, “No, I’m done. No, I don’t want to do this.” You try to find your lane, and then meanwhile, I feel like we didn’t even really know your DIY skills until that first property and your love of it. All of a sudden, you’re tearing down walls and kitchens and bathrooms and closets and it’s like, I didn’t know you could do that. So yeah, you fall in love with the different lanes.

Ashley:
So let’s start with that first property. It was a single family home. Tell us about it. What was your investing strategy for that? Was it short term, long term? And give us a little backstory to that and then maybe what you went on to next after that.

Joe:
Yeah. So it was a single family condo. It was 150,000. So we just did a 20% down investment loan, pretty straightforward. The money for the down payment just came from us saving like crazy, and we just use it as a long-term rental, funny enough. So that was in 2016. The tenants, our first tenants are still there, which is just wild. That’s seven years later, they’re still going. So it was just a long-term rental, just plain and simple. We probably should have charged more rent at the time than what the mortgage was. We didn’t know.

Ashley:
Okay. So with that property, do you continue on and do long-term rentals?

Joe:
Yeah. So 2016, we bought the first one. And then 2017, we didn’t buy any. We were going through different things financially where, in the TV industry, where we didn’t feel comfortable buying in 2017 or we weren’t able to really. And then 2018 and 2019 is where we bought two more single family long-term rentals. Again, it was just all savings and just grinding and saving every penny we can. Anytime we got a raise or a bonus, we acted like we didn’t. We would take any additional money and just put it into an account to invest, and that I feel like was just a lot of delayed gratification for a young couple in their early 30s. We wanted to buy a boat. We didn’t. 2019 is when we took a big direction or a mindset shift, but those first three years, we bought three properties.

Ashley:
That mindset shift, t us about that.

Tony:
Yeah, because I’m curious. At what point did you guys make the transition from, hey, we’re just dumping money or parking money into this to get appreciation to it actually being a business?

Andrea:
So I’m going to answer that one. He had a job and was running the roads a lot. He was just driving a lot. And he started … The writing was on the wall. We became parents. We had twins in 2019, and it was like, all right, that aha moment. We don’t want to be in the W2 full-time. We realized we already had, what did we have at that point, three or four long-terms?

Joe:
Three.

Andrea:
Three. So then he had discovered BiggerPockets and podcast. This boy, who did not like school education, read 20 real estate books in one year. He would get up at … yes, work in his full-time job, new dad of twins, and he really just took that shift. And he’d come home and our pillow talk at night became what book he had read through that week or whatever. And he was really passionate and really on fire with it.

Andrea:
And so from that, then he started pushing me. He’d send me these podcasts. I’m like, what is a podcast? And he introduced me to Investor Girl Britt, which I fangirled out about all her stuff. I wanted to be her. And so that I feel like was the big shift, was when he consumed all the education, consumed all the information that he could, and then shifted it to me to be like, “Hey, you have an interest in this. Listen to this girl.” And that’s when we bought one of the biggest shifting condos that we’d like to talk about because it was such a game changer for us in so many different real estate points that it hit.

Tony:
Andrea, I got to pause on something that you said because one of the questions that Ashley and I get all the time is how do I get my spouse on board with real estate investing, and what you just described of Joe, Andrea, is the formula that spouses should try and follow. You didn’t say that he came to you one day and said, “Hey, I want to take our life savings and invest it into this hair-brained scheme I heard on this podcast.” You said you saw this guy, who didn’t like traditional education, read 20 books in one year, listen to every single podcast he could get his hands on and would share with you all this information. That is how you get your spouse on board. You show them how committed you are with your action, and that’s what gets them to buy into this idea. So Joe goes on this journey. He gets you drinking the Kool-Aid a little bit. And then you said you stumbled upon this condo. So what’s the story behind the condo, Andrea?

Andrea:
So we bought it in 2019, and again, we’re still trying to learn all these terms, BRRRR, FIRE, financial free, all these things, terms, HELOCs and cost segregate, all these real estate terminologies that we were clueless on. But I feel like with this condo that we bought in 2019, it was a two bedroom, two bath, great part of West Knoxville. We bought it and it needed a full paint job, which we DIY’d. And that’s when he would literally push play on a podcast and then he’d leave while I was painting, and he’d come in, bring lunch and all the things. It was pretty cute.

Joe:
It sounds so evil now, but I remember her being in the upstairs bedroom and she was painting and working on the bathroom, and I literally would hit play and walk out, and I’m like, yes.

Andrea:
It was awesome though. It fired me up to hear other stories. We listened to you all’s podcast. I heard other couples that were successful in this, and it really got my brain going while I was … My hands were busy. I was painting.

Andrea:
From there, we also redid the kitchen. So we essentially did a BRRRR on this condo. We painted the kitchen cabinets ourselves at home after our babies were asleep and after we worked our full-time job for the day. We had a contractor hire out. We redid the backsplash. We knocked down some cabinet. We just did some work. We hired some and we DIY’d some. Then we rented it out. And let’s see, fast-forward to, was it this year we sold it?

Joe:
Yeah. Sold it. Yeah.

Andrea:
Fast-forward four years later, we ended up actually selling that and 1031’d it into our biggest short-term property that we had. But in between there, we also did a cash-out refi on it because we increased the value with the BRRRR, pulled some cash-out and we bought another property with that. So that property taught us so much that we learned about in books, we heard about on podcasts, but until you get in and do it, that’s when we really had our real estate university. Right?

Tony:
Ash, can we just break down all the different ways they just made money off of this one deal? So this is the amazing power of real estate investing. So you guys buy the condo, put in some sweat equity, you rent it out for several years so you’re getting loan pay down, appreciation and cashflow during the time that you’re renting it out. You said you did a cash-out refinance at least at one point after you finished the initial rehab, took that cash, dumped it into another property, held it for several more years, got more cashflow, and then 1031’d that into another larger property. So you got paid four or five different ways off of one condo that cost, you said the purchase price was $150,000?

Joe:
No, it was 129,000. Our down payment.

Andrea:
129,000.

Joe:
Our all in on the deal was like 20,000 or something, not even.

Andrea:
Yeah. That’s just the power of real estate that once you can see, it’s mind-blowing.

Tony:
So $29,000 is your down payment. What’s the value today of those two properties that you purchased, the first one from the refinance and the second one from the 1031 exchange?

Joe:
Gosh. So that was Antler and that was Powdermill, so 1.5.

Andrea:
Yeah.

Tony:
No freaking way.

Joe:
Yeah, they’re both cabins. So the cash-out refi was to buy our short-term rental in Blue Ridge, and then the 1031 sale was to buy another cabin in Sevierville.

Tony:
So $29,000.

Joe:
Yeah. I’ve never really put it that way.

Andrea:
I was trying to quickly calculate those numbers before and I’m like, “Am I looking at this right?” Okay.

Joe:
Well, one way we were looking at it was like some of our long-term rentals are like, we’re going to have those for forever because they’re great quality and they attract great tenants. But this one, we knew was like our beat up property. We’re like, we’re going to flip this thing. We’ll renovate this thing and really just make the most out of it so we can level up. And that was this one.

Andrea:
We top leveled.

Joe:
Yeah. Top leveling, as they say.

Tony:
So we threw around the phrase 1031. So Joe, Andrea, whichever of you, if you wouldn’t mind, just define what a 1031 is and why you guys use that strategy.

Andrea:
So a 1031 is when you take the proceeds from … Essentially if you sell an investment property, Uncle Sam is going to want a piece of your gain, so you have to pay capital gain taxes. A way to avoid that is this 1031 exchange. You basically hire a third party. It’s specific 1031 handlers. I don’t know what their official title is, but-

Joe:
Intermediary.

Andrea:
Intermediary. There you go. So you get the proceeds from property A if you sell it, and they hold all of it. We never saw a penny of the gain from the sale of Bellbrook. They held it. You have a certain amount of days to identify one of three properties that you’re going to buy. You have a certain amount of days then to close on one of three properties. And then once you do, that 1031 intermediary then sends a check to the closing company for your new property. So essentially, it just sideswipes your taxes and it just goes from one to the other. Now those gains are now sitting on this new property that we have. So if we were to just ever sell it, then we have to pay the gains on that, but we can deal with that then, or 1031 into another property. But it’s essentially a tax saving.

Tony:
They call it swap until you drop. So basically, you just keep 1031-ing until the next property, until the day that you die. And I don’t really know what happens after you die. I don’t know if those taxes get passed onto your estate or how that works, but basically, for the entire time that you’re alive, it doesn’t. Oh, see, yeah,

Andrea:
I listened to a podcast on that actually.

Joe:
Defer until you die.

Andrea:
Defer, defer, defer to death is what it was called or something.

Ashley:
What was your biggest lesson learned from doing that and why do you think somebody should look into doing a 1031 exchange?

Joe:
I think we had a little bit of imposter syndrome. We were such linear, very safe, play it safe investors, buy, rent it out, don’t get crazy. We don’t like risk and whatnot. I think really the lesson we’d like to share is there’s just so many creative ways that you can expand your portfolio by accessing the equity in there. And really, that was just huge for us. And just thinking outside that box, no, we don’t have to just play it safe, rent it out and call it a day. It’s like we can access the equity in there to really just blow up our portfolio because up until that point, it was save, save, buy, empty out the account, save, save, save, buy, empty out the account. But since 2019, we have not used a penny of our personal savings to buy a property. It’s all accessing the equity that we’ve created.

Tony:
So I want to ask something, and it ties back to what we talked about earlier, but you said that you went into this with no real understanding of what a real estate business was. You were just flying by the seat of your pants. You have this aha moment in 2019 where you go on this learning binge to learn all things about real estate business. But then, was that the aha moment or the light bulb that went off to transition from long term to short term? Or what was the motivation to ditch the long-term rental space? It sounds like your last several purchases were all short term, correct?

Andrea:
Mm-hmm.

Joe:
Yeah.

Andrea:
Yeah.

Tony:
Yeah, I guess just walk me through the motivation for the change.

Joe:
So I think our plan up until 2019 was like, hey, we were in our mid 30s, we’re going to buy 10 long-term rentals, pay them off and retire in our mid to late 40s. I think that was our plan, nice and safe and whatnot. But then as we got older and our kids were growing up and we had another baby on the way, even before that, I guess, we were like, how can we speed this up? We don’t want to wait another 10, 15 years to get financial freedom. We want to go faster. And that’s when we discovered short-term rentals and the cash cashflow that that offers. It’s three, four times more than what the long-term rentals are. So we’re like this, instead of waiting 10, 15 years, we can speed this up in two, three years.

Andrea:
Thank you, Avery Carl.

Joe:
Yeah, the Avery Carl podcast. I know that was big for a lot of people when she did that original BiggerPockets one, but that played a huge part in it.

Ashley:
So with your short-term rentals, tell us, what is one thing that you would give or tell, I guess, as advice to a rookie investor as to what they should be looking for? So what was part of, when you decided to make that transition, what were maybe some of your criteria or your buy box of this is what we want to do?

Andrea:
In short terms?

Ashley:
Yeah, short terms.

Joe:
I think for us, we’re both very particular about what we want and how we manage our stuff. So I think for us, it had to be within drivable distance to us because we wanted to be hands-on and involved. So then we just literally took a map, drew a big circle, and it’s like, all right, we want to be in the southeast, drivable distance from Knoxville. What drove me crazy was we were doing all this stuff and investing in Knoxville right down the street from Sevierville, and we had no idea that that was becoming the mecca of short-term rentals. And we were like, oh man, we missed the boat.

Joe:
I think we’re attracted to vacation markets. I know some people like to go into the metro markets, but we like the vacation market so we’re in Sevierville, Blue Ridge, Georgia, and then Panama City Beach, Florida. So that was a big thing, being able to drive there ourselves and also me being at a property that we want to stay there with our family. We wanted it to be relatable in that way.

Tony:
And I just want to go back because you mentioned about how can we shorten the time to achieve financial independence and doing it with the least number of properties possible. And we had a coach, Chad Carson, on episode 306 of the Rookie Podcast. He just recently released his book, The Small But Mighty Investor, and it just ties into the whole mindset that you guys just displayed or talked about of how can we do this without having thousands of units or doors that we have to manage ourselves?

Joe:
Yeah, that’s our whole thing. We pride ourselves on being small and mighty investors. We don’t want 500, 2,000 units. We love the people that do that because they’re really inspirational. I love those podcasts and I love listening to those folks talk, but that’s not in line with what our why is. We don’t want to create another job for ourselves like that. I love the small and mighty approach, and I think that’s what we keep to today.

Tony:
So one of the things that Chad talks about is … And we also recently had Mike Michalowicz on the podcast as well. I’ll try and see if I can look up his podcast episode. But I think a lot of being able to scale your portfolio without it dominating your life is being able to set up the right systems and processes to be able to hopefully offload some of that management tasks with someone else. So as you guys have scaled up … because six short-term rentals for long term is not something to sneeze at. There’s some management that goes into that. So how are you guys currently optimizing your own portfolio so that you can do it with the least amount of time possible?

Andrea:
Sure. So for our short-terms, we run Hospitable, which Joe is the brains behind that. He’s automated all the messages. He’s learned and studied and done all those things. We have recently, very recently, within the last two months, outsourced a bookkeeper because it just got out of hand. So that way, I can be able to … I’ve shifted my focus to a direct booking site and trying to do our social media to drive traffic there, but we also, just all the tools that we can use to make anything easier. I’ve discovered ChatGPT which helps us quickly write descriptions for social media or our Airbnb posts, it makes us sound really good.

Andrea:
What are our other tools? Google Drive is another huge one that it’s simple, it’s easy, it’s free, but it keeps us organized. We have a simple spreadsheet out there that me and him access and it’s literally any password or just background with all of the properties. And what other tools do we use?

Joe:
For the long-term rentals, they run themselves. It’s crazy to say, but we bought them right, and we bought them, they’re B class properties. The tenants that are there, we probably hear from them once or twice a year. The six long-term rentals run themselves and it’s great. But yeah, for the short-term rentals, it’s exciting, it’s fun. We do a whole tech stack. It’s Hospitable for property management software that’s messaging with the guests, which is just fantastic because that’s a lot.

Joe:
We have a dynamic pricing tool, PriceLabs, that sets all the pricing so we don’t have to go in there. We got Turo-

Andrea:
Turno.

Joe:
… Turno that connects with our cleaners. There’s so many cool automation tools where these four B&Bs that are just running full steam, we probably have a mandatory five hours a week that we have to be involved. The rest of the time, it’s just running itself on these automations, which is great.

Ashley:
I really hope that everyone listening just wrote down that stack, that tech stack as even just a starting point as to like, okay, here’s some resources I should look into. And even if it’s not that specific brand but something that does something similar. Tony, do you want to share your tech stack real quick for short-term rentals?

Tony:
Yeah, sure. Ours is pretty similar, honestly. So we use Hospitable as our PMS. We use PriceLabs as our dynamic pricing tool. We use Hostfully for our digital guidebook. And we use Breezeway for our property operations software. Breezeway is similar to Turno, but we like Breezeway a little bit more. There’s a little bit more functionality to it. And then we use Slack to message with our virtual assistants and keep the whole team in line. Those five things are the baseline for our software stack.

Ashley:
And when Tony says PMS, he means property management software, just to be clear.

Joe:
Yes. Be careful when you’re yelling about PMS in public. Yes. Yeah, no, it’s pretty funny. Hospitable, it’s funny to see guests interacting with the automated messaging. I’m like, this is great. I remember that first week. I’m like, this is amazing. I could have never been a B&B host or a short-term rental host four or five years ago when this stuff wasn’t around. I would have been terrible. I would have been like, “What do you want?”

Andrea:
Turno has been the game changer for me because I’m the one that manages the boots on the ground. Team members in Turno, we’re not having to send them, “Hey, here’s our check-in and check-outs.” Turno does all of that. It communicates and pings the cleaner and they can send us pictures and text us about supplies that were out. So I’m very thankful for Turno.

Tony:
So Joe, Andrea, are you guys ready for today’s rookie request line?

Joe:
Yeah, let’s do it.

Tony:
All right. And for our rookies that are listening, if you guys want to get your questions featured on today’s podcast, head over to biggerpockets.com/reply and we just might use your question for today’s episode. All right. So today’s question comes from Allie Snyder Dattilio. And Allie’s question is, “For those in business with your spouse, do you typically put both of you on mortgages for your investment properties or just one at a time to be able to max out the number of loans? Trying to get a gauge for how much we could qualify for individually, but how was the DTI calculated if we split the mortgage on our primary residence? Are we each responsible for 50% of that debt?” So Joe, Andrea, I guess what has been your strategy for managing the loans and mortgages for your investment portfolio?

Joe:
So for us, it’s been both of our names on all of the properties. Now I know a lot of people are like, hey, split that up so you can get more of the traditional loans because you’re only granted 10. But we use both of our names for multiple reasons, just from a closing standpoint and being able to get the properties we wanted. As we were always leveling up and buying more expensive properties, we needed both of our incomes on the statement. So that really, we use both of our names really on all of them.

Tony:
Just from my own perspective, I think the goal probably should be to put the least amount of people on the mortgage as possible. If you’re in a position to qualify with one person, it allows you to free up more debt for the next person because yeah, even if both of your names were on the mortgage, technically you’re both tied to that entire debt. So it is easier sometimes to continue to scale if you can split it up that way. Ash, what are your thoughts?

Ashley:
Yeah. That’s what I was just going to say, is even a lot of times they still look at it as, okay, if you have a $1,500 payment and you’re both on the mortgage, they’re not going to split it in half and say, oh, we’re only going to calculate your debt to income. For me at least, they’ve always done it the full amount because you are responsible because if somebody else, that other person isn’t paying it, you still have to pay that full amount, the 1,500. It’s not like you pay your half then they pay their half. So to answer Allie’s question, I would say that it will fully affect your debt to income, and I think that’s an advantage if you can, is to go into one person on one loan, the other person on another loan, something like that too, if you’re able to do that.

Joe:
Yeah, if you can do it, definitely do. Just split it up.

Ashley:
Yeah, when I first started, I pretty much had my husband as a co-signer with me because I barely made any money and he made the money and that was like … So first couple of rental properties that I did on my own is we both went onto them and did the properties together as, I guess, technically a co-signer or whatever, but he was actually on the deed of the property, and that was how I was able to get my first couple of investment loans without using a partner.

Andrea:
I think looking back, if we could go back in time, I would have had him on our first five solo, but then as I grew in my career, I was making more, then we could have transferred. But if we could advise anybody, yes, to your point, split it up.

Ashley:
Yeah. If you can, if you have the income and the low debt and you can get approved by yourself, and that’s such a great tip right there, is try by yourself first and then if they say no, that’s not going to work, then bring in your partner or your significant other or whatever and then bring them on and say, “Well, now, what if we both go onto the property?”

Ashley:
And one thing too with residential is you’ll have to make sure that both people are on the deed. So you can’t have a co-signer if you were getting an apartment or if you were getting a car loan or something, you can have a co-signer who will be liable for it but they’re not actually titled to the property or to the assets such as the car or something like that. They don’t have rights to the actual rental property the person is leasing. So that’s a big thing too, is that if you are going to partner with someone and you’re both going to go on it, then you both go onto the deed too.

Tony:
All right. Well, let’s jump down to the rookie exam. So Joe, Andrea, these are the three most important questions you’ll ever be asked in your life. So Andrea, we’re actually going to start with you. Question number one, what’s one actionable thing a rookie should do after listening to your episode?

Joe:
Really, I think our biggest thing has always just been perspective and writing down what we want. You can’t start a race without understanding where the finish line is, and I think that is super important. Once we really sat down and got intentional with it like, hey, we don’t want to do the traditional path of 65, all that stuff, and we wrote it down. So having that perspective, but then really keeping it as an active perspective. Don’t just sit down once with your wife at the end of the night and write all this down. If you could see my office right now, it’s whiteboards everywhere, and all of our goals are whys, everything, and I see it every day and it’s that active perspective that just helps me remember when I’m in the fishbowl of day to day, this is why we’re doing this.

Ashley:
What is one tool, software app or system in your business that you use? So Joe, you did give us a breakdown, but maybe besides the short-term rentals, is there something else that you use maybe for the long-term rentals?

Joe:
Our hub is Google Drive really. We could not live without that because that’s where everything is shared. We traveled one time, I think early on, and I literally, and I was like, if something happens to us, no one will know where all our information is and our loan information, our contractors, everything. We put everything now on a Google Drive and I think we sent it to my mom before we travel. I was like, if anything happens to us, here, take this. But no, Google Drive is our biggest tool for our long-term rentals. It’s a small portfolio. It’s manageable in that way and yeah, we love that.

Ashley:
What are some of the things that you’re using to manage though? Is it like a Google Sheets or something like that to keep track and how are tenants paying? Is it a check and are you using QuickBooks? You want to give us the glimpse into how you’re self-managing that long-term rental?

Andrea:
Yeah. We use Venmo, so they pay us every month on Venmo, and it’s just six tenants at this point, so it’s pretty easy to realize if someone hasn’t paid. But everything for us is pretty manual on the long-term side because we just set it and forget it kind of thing. They pay us on Venmo and …

Joe:
Yeah, I think as now we’re scaling down the buying, we’re pausing the acquisition side and really focusing on optimizing. I think one thing we want to do is we can incorporate some of the software for the long-term rentals, like a Rent Ready and whatnot that does a lot of that and keeps it a little bit more organized and a little bit cleaner.

Andrea:
DocuSign.

Joe:
Yeah. Rent Ready I think has features like that. So I think that’s something where as we now, we’ve hit financial freedom, we’ve crossed that finish line, we’re like, “All right. Now let’s focus on optimizing some of these things now that we’ve finished a little bit of that race.”

Tony:
All right. Last question. Where do you plan on being five years from now?

Joe:
Five years from now? Right now, I would love to … We recently just paid off one of our first properties, which was huge for us, and it was just such a great feeling. In five years, I want to have a few of the properties paid off. We’ve now recently got into co-hosting, which has been great for us. A lot of people have followed our journey on Instagram and have reached out and DM’d us about hosting their properties. So that’s something we’re really excited to just dive into and take on. So in five years, I’d love to have a boutique co-hosting business, a few more properties paid off and just enjoying our small and mighty portfolio.

Andrea:
And the time freedom with our kids.

Joe:
Yeah. Time freedom has been great. Just even recently, we just took the summer off and I’ve just been hanging out with the kids and just more and more of that.

Ashley:
That’s awesome. How old are your kids now?

Andrea:
The twins are four, and the baby boy is 15 months.

Ashley:
Oh. So yeah, in five years, you’ll have a lot more time freedom. They’ll be a perfect age to go out and do things and travel and everything like that. That’s awesome. That’s exciting.

Andrea:
Yeah. I want to have that freedom to be able to expose them to things that we weren’t at their age.

Ashley:
Yeah. I joke with my kids that they’re getting spoiled because we’ll go on a trip somewhere and usually it’s to a conference. It’s not like a vacation, but we’re traveling somewhere, going to a conference and they’ll complain when I say that we’re flying Southwest and not Delta because Delta has the TV screens. I’m like, “You’re getting to fly somewhere. When I was your age, that would have been so exciting.”

Andrea:
Yeah.

Joe:
Oh, man. We were doing the road trips back in the day.

Ashley:
Yeah, yeah, yeah, really. Okay. Well, where can everyone reach out to you guys and find out some more information?

Joe:
Where can everyone find us? So we are pretty active on Instagram. We’re at Southern Sun Properties. That’s really where we just have a lot of fun there. Everyone can reach out to us. We’re pretty quick on responses and whatnot. Over the last few years, we’ve just let everyone into our journey, and it’s just been fun to see who’s interested in this world as well and we’ve made some great connections through it.

Andrea:
Yeah. We don’t paint the pretty picture that this is perfect. We have shared our fails, our hard days, our hardships, and we just laugh at ourselves and keep it fun and lighthearted.

Joe:
Yeah.

Ashley:
Yeah. Well, thank you guys so much. I know Tony is still trying to figure out the math of turning that 29,000 into 1.5 million. He would have baffled as to why that hasn’t happened with his property yet. But thank you guys so much for joining us on the Real Estate Rookie Podcast. I’m Ashley at Wealth from Rentals, and he’s Tony, @tonyjrobinson, and we’ll be back on Saturday with a rookie reply.

 

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