I leverage pretty much everything I think that's the best you can do for velocity, you know, the more money I can keep in my pocket, the more I can keep for down payments, you know, whether it be stellar finance, we do a lot of creative finance, that kind of thing. You usually need something at closing costs, etc. So we leverage everything we can. You're listening to Carrie Lutz's Financial Survival Network, where you get valuable information you just can't find anywhere else. To thrive in today's trying times, you need the Financial Survival Network. Now more than ever. Go to financialsurvivalnetwork.com and get your free newsletter and gift. Financial Survival Network. Now more than ever. And welcome. You are listening to and watching the Financial Survival Network. I'm your host, Carrie Lutz. A lot of people don't agree with state. A lot of people are successful at it. What I find fascinating about the space is everybody finds their own entry point. And the person you're about to hear from, the newcomer to the show, first time on the show, his name is Jefferson Callaway. Jefferson, you are a vet and thank you for your service. And you got into real estate investing while you were serving the country, correct? Yes, that's correct. And thank you very much for the support. Yep, joined in 2016, got out 2021. And it was that last year that I bought my very first rental property by accident. I was just going to buy a house and live in it, but moved away, decided to rent it out and just kept on going from there. The rest was history. Great. So you got 27 now. What's your cash flow? Your pre-cash flow on the property. Give me a range of up. Tell me the exact amount. Sure. I mean, it's ranges, but I would say the average, you know, I pay all my mortgages that are probably a total of maybe 14,000, but you know, the properties in general bring in, you know, 18 to 20,000 in total. So after all expenses, I would say four or five grand a month. That's pretty good. Pretty good. And yeah, so how do you scale this up? How can you have a hundred of these? Is there a particular type of property? Are you looking for military bases, near military bases, how does that work? Yeah, I mean, the first one turned out so well, it was an enterprise Alabama, which is near Fort Rucker, southern Alabama, right near the Florida border. And I have since gotten a bigger single family portfolio there, just because I love the area, the price to rent ratios are great. They work for cash flow really well. The fact that there's a lot of soldiers cycling through is really just a bonus. I mean, you can't act a fool as a soldier and a rental property or your command will find out. And there's always tenants because there's always soldiers cycling through. But I don't make that one of my criteria anywhere else. You know, like I said, we're in seven different states now. And I have found that not a lot of other military, but you know, building your rental portfolio around a military base would be pretty limiting. So I still invest in Alabama near the base, but everything else is not near bases, not near universities. It's really just wherever you can find cash flow in this, in this climate. And in the beginning, yeah, in the beginning, it was mostly single family, but I have since moved on very, very hard into multifamily just because the cost of maintenance and capital expenses per net cash flow and per door are just less. I mean, you've got four, five, six units under one roof. That helps. Same thing with HVAC. And also the risk is lower. I mean, if you have one or two tenants missing, that's fine. I still get half the rent. Single family, you go six months without a tenant, you get zero. So definitely moving into multifamily and doesn't have to be around military bases. And what are you looking for? Like, how do you, what kind of valuation do you do? And what type of cash flow analysis? Sure. So I leverage pretty much everything. I think that's the best thing you can do for velocity, you know, more money I can keep in my pocket, the more I can keep for down payments, you know, whether it be stellar finance, we do a lot of creative finance, that kind of thing, you usually need something at closing costs, etc. So we leverage everything we can. But I would say at this point, it's really total gross monthly rent for the property. Mine is 25 to 30% for expenses. That's maintenance, capex, lawn care, utilities, etc, vacancy. And then minus the mortgage payment, whatever that would be, PITI. And whatever's remaining is your ultimate net cash flow. And my minimum is a few hundred dollars, maybe $200 to $300 per door. So if I've got a fourplex, if I've got a fiveplex, it better be bringing a net free cash flow, $800 to $1,000 a month for that one property. And that's anywhere in the continental US, you know, that's one of the best things about being a remote investor. When a wholesale or a realtor sends me a deal, I don't care where it is, Texas, Ohio is another great market we just got into. I can buy anywhere. So I'm not limited to my local market. A lot more opportunity that way. Gotcha. So when you're looking at a property, what about the condition of the property to be all of that? How do you evaluate that? Yeah, I mean, you always just allow for more of a percentage of your gross monthly rent to accommodate older homes. But the thing is, a lot of multifamily, they are older homes. So I account for an additional 5%. But ultimately, even newer properties, 70s, 80s, 90s, O's, they still have problems. I mean, most of the time I find that it's not the property itself, that you end up spending more money on. It's usually your utilities, HVAC, roof. A lot of the time the appliances, you know, stuff that has nothing to do with the age of the home necessarily. So I don't mind buying the age old stuff. I just bought a sixplex in Hagerstown that's over 100 years old. Haven't had many problems with it at all. So we're buying pretty much everything we can get our hands on. They don't make them like that anymore, do they? No, they do not. That a lot of small monthly family in general anymore. It's mostly single family now. All right. So somebody's looking to get into the real estate now. Somebody you just met on the street, what would you tell them? The house hack. Always, always, always the best thing you can do in my opinion is house hack. And for those who don't know, that is just living in a home and renting out something. It doesn't even have to necessarily be another unit like a duplex, triplex, quadplex. It can be and you can get up to four units with any conventional loan, FHA, USDA, VA, doesn't matter what kind of loan you can get up to four units and live in one, rent out all the others. But you don't even have to do that. I used to, back when I was first starting, I rented out rooms if I could. If my current house, I rent out a horse stall that's in the barn in the backyard. We are on a couple acres now. I'll rent out anything to bring in some cash flow. And even if you're not cash flowing, like if you're not making money on the property, the average American spends over 30% of their total net income on the living expense. So even if you buy just a duplex and your buddy rents out a separate the other unit for $1,200 a month and your mortgage is $1,500, okay, your mortgage is now only $300. You just knocked out an enormous expense. It's the same effect. So saving, keeping your money, the same thing is not spending it. Right. So that's the idea. So we are in the market for a new for a home, your first home, buy a duplex. Yeah, yeah, yeah. Or buy a single family home that's got a lot of bedrooms. You know, the only downside is I understand, you know, a lot of people have messaged me and that, you know, what if I've got four kids and a wife and they don't want to? You're right. That's more difficult. So you can run out rooms. You don't want strangers living next to your kids and your woman. She's not going to like that either. But, you know, I still stand by. You can get a multifamily or you can figure out how to rent something, let them park an RV on the property. If you've got acreage, a lot of ways to get creative. And it may not be very comfortable, but hey, so is being broke. So pick your poisons. I like it. I like it. All right. But I know that people out there are going to want to connect with you on the web, want to talk to you. How do you how do we find you on the web? So you can message me on Instagram, Facebook. I'm at Jefferson Callaway on all those. I'm easy to find. You can also email me Jefferson@calcapital.us. That's the real estate company. So it's Cal, C-A-L, capital, C-A-P-I-T-A-L.us. You can always email me. And I'm, you know, I'm pretty busy. I've got a home remodeling company up here in Philadelphia, so I can't respond to stuff. But I mean, if somebody wants some paid consulting, I have no problem doing that. You know, I'll spread the wealth around a little bit. Appreciate you're coming on the show. Got a question. Comment or Jefferson, like so. Shoot me an email. kl@carilex.com. And you'll find a link to Jefferson's site and the show that this interview on financial survivalnetwork.com. And I'd ask you to sign up for your free newsletter. Join, I think we're up to about 60,000 subscribers now. So join those 60,000 people. Get the newsletter for Craig Jefferson. Appreciate you're coming on and we'll talk to you soon. That was great. Thanks a lot, Karrie. I really appreciate it. Thanks for listening to Karrie Lutz's Financial Survival Network, your solution to today's trying times. For the latest, go to financialsurvivalnetwork.com. Financial survival network. Now more than ever.
