On this episode of House Flip Masters Holly is joined by guest J Massey. Unlike other episodes where Holly introduces the guests, she asks J to share his story with listeners. Before sharing his story J reminds us that no matter what our stories are not over and his story is just what happened to him to make him wake up and to get out there to do something.
Prior to real estate investing J was a financial planner and his wife was a recruiter by trade. J and his wife were experiencing a lot of great things in their life together and everything seemed to be going their way. J and his wife both experienced serious medical problems that left them squatting on bank owned property with a credit score of 398. A friend suggested that J should become a real estate investor; he agreed that he would take the leap into real estate investment as long as his friend would show him how to do it. From the days of having no money J and his wife have come a long way.
Holly asks J to share with listeners his first deal – J says that most investors when looking back at their first deal realize that they would never do any deal that same way again. First deals are crucial and they are the starting point to your investment success. J met the owner of his first deal at a networking event, the owner was behind on payments and needed additional money on top of payments being brought up to date. J had a deal but he had no idea what he needed to do to get his deal off the ground and running. He knew nothing about rehabbing a house, getting a contract, opening escrow, etc. J was able to go back and forth between his friends to get the answers to his questions and to get this deal closed. J and his wife had no money and were still living in bank owned property but they had the deed to a rental property. Holly reminds listeners that you don’t know what you don’t know, until you are in it. J knew nothing about real estate investing and relied on his friends to help him with this deal, he did what he was told to do regarding inspections and adding air conditioning and eventually this property was a success. Three weeks later J was doing 11 more properties.
Recently J has embarked on a new passion – short-term rentals. As an entrepreneur J had not thought about doing these short term rentals before but once he heard from one of his students about the return on investments and the breakdown of the these properties he decided to understand everything he could about these types of investments. In a 60-day period J went from zero to 7 of these units. J advises that you if you live in an overpriced market where the rent has not kept up with the price of the house this is an area that you might want to look at.
When looking at short-term rental properties you have to keep in mind that you need to outfit your property with furniture and everything that you would need in a home, the people that are using these properties are those who might be having medical procedures or visiting family and they do not want to stay at a hotel and prefer the comforts of home. Providing the comforts of home results in good reviews of the property and of the items you outfitted the homes with.
Holly asks J about reviews; how important are they? J says that reviews matter, he references shopping on Amazon; people want to know what other real people think about the products that they are buying, the same goes for the properties that are being rented. J makes sure to go over and above with his properties because those reviews are what help to promote future prospects renting.
Holly asks J to share how he has educated himself on this new area of real estate. Vacation rentals or short-term rentals are relatively new to the professional real estate investor, but not a new concept. There is a not a whole lot of information out there to guide you on what you should do, this market is changing so quickly that any information that is printed becomes obsolete very quickly. J has filters set up online to be alerted when anything comes out about short-term rentals so that he can stay on top of what is current.
While there is a lot going on in the short-term rental area, some people might be discouraged by some of the news coming out about owning a property for vacation rental use. J reminds listeners that this is a new area and when something is new most people meet that with fear and with that fear comes protection. People want to protect what they know. While there are still many unknowns in this area J feels that there are two things that are known and you should be prepared for: licensing and taxation. Once a city knows how to tax and license these properties it will begin to grow and they will begin to embrace it.
If you are interested in learning more about short-term rental properties and gaining more education on real estate investment check out J’s podcast Cash Flow Diary.