How Did We Do On Our 2020 Investing Goals? A Year In Review

Emil: Hey everyone. Welcome back for another episode of The Remote Real Estate Investor. My name is Emil Shour. And I'm joined by my lovely co hosts,   Tom: Tom Schneider,   Michael: and Michael album.   Emil: And today we're going to be talking about year end review. So we're going to look back at the 2020 goals we set for our real estate businesses at the beginning of the year. We're going to analyze what did we achieve from that we're also going to look at how did we pivot? You know, things change throughout the year? How did we pivot? What else did we do in our businesses, and then also look into 2021. And our goal here is to help you guys you know, as you're thinking through your strategy, hopefully help you guys come up with what that can look like and set some lofty goals. So let's hop in this episode.   Alright guys, so we're gonna be talking 2020 goals, what did we achieve? How did we pivot? What else do we do? And then looking in the future for what do we have set up for ourselves for 2021 goals? And I think the way we decided to structure this episode is we're gonna do hotseat. Normally, on episodes, we kind of talk about a topic and we go round robin in a circle. I think this one, each of us will sit in the hot seat, go through these kind of three parts of the questions. And then we'll move on to the next person in the hot seat. So any volunteers who wants to go first?   Michael: Let's put let's put grill marks on Tom.   Emil: Let's do it, dude.   Tom: Let's do it! Sssssssssssssss sizzle.   Emil: Tom Schneider.   Michael: Hey, yeah. Okay, Tom, what was your goal starting 2020, or goals de parentheses around the “s”.   Tom: I knew that 2020 was going to be a slower year on that side of my business. So wife delivered first baby in November of 2019 had a pretty massive house project, adding a bathroom on. So going into it, I knew it was sort of maintenance time, just maintain and possibly do some acquisitions near the end of q4, it was a definitely a quieter year, with the new rates that are available for financing. I was hoping to do a little bit more within the end of the year by possibly for refinancing some of the properties, I need to do a little bit of work on my insurance. I didn't get to some of those different items, but it's just like a weirdly busy time in my life with new baby in big projects on the homestead. So all in all, a pretty quiet year on the investing front. But you know, throughout all this, the portfolio performed. It just kept moving on not a lot of growth within it. But it was a known slow year within my personal portfolio.   Michael: Have you done any refinances on the investment stuff? Or on your personal   Tom: I did some refinancing not in 2020. And I actually I did do refinancing on my personal so you're right Michael, not a total do nothing kind of a year so did quite a bit, I had a key lock on my personal closed it out to refinance, finished the refinance and reopen the HELOC. So sort of a refresh on that side of my finances, which is all kind of tied together, which and it's a there's a huge queue, there's a huge line of people doing refinancing. So it took them honestly way longer than I was expecting to and like a little bit more work than I was expecting to. So I guess you're right, Michael, it wasn't a total do nothing. It was moving some of the personal finance stuff around and hopefully be set up for a big 2021.   Michael: And so on the investment side of refinancing, let's get personal here. Why didn't you refinance any of the investment properties with rates being as low as they are?   Tom: Well, I view as being a little bit too conservative. Usually banks don't want you doing like too many transactions or like new refinances at the same time. And the most important one that I had to get done was related to my personal so I don't I'm not going to be too hard on myself just because I had the other stuff going on. But where I definitely could have done more was redoing my property insurance that I have. That's something that's been on my list to do that I just kind of keep putting on the backburner, and it's okay. And that it's not something that you know, you necessarily need to lose sleep over and doing right away and re optimizing your property insurance that you have. But something definitely I don't want to put off too much longer. But that was something I you know, looking back on 2020 is like darn I should have just gotten that done because it's those things once you set it, you forget it what happened to me the mistake that I made is I was using this insurance broker and they had terrible communications with my lender.   So I paid to like re up my insurance. My insurance didn't do the proper like notification to my lender. And then my lender went and bought insurance for me. And then my property insurance company that I bought that originally they sent me back the money that I paid for them for the insurance like this is just totally me just kind of dropping the ball a little bit. I mean, I didn't Double pay for insurance, but I'm definitely paying way more than I should right now with some crummy insurance that my lender bought me. So this is my, like, bad Tom, I'm making myself accountable by throwing it out there, go fix my insurance. And Nick, who's a member of the Academy, who is also has some expertise in insurance, I owe you a call, we got a we got to connect?   Michael: Well, I don't think you should be too harsh on yourself. But you feel like you didn't do a whole lot in the investment side of the refinances. There's only so many hours in a day, and everyone's got priorities. And if I had to guess I would say that the refinancing of the loan on your primary is probably more impactful than refinancing on those investment properties. And, you know, I don't see rates going anywhere in the next couple months, the near immediate future. So you could probably get to those in 2021 if you wanted to, anyhow,   Tom: Yeah. You know, and the rates aren't that bad. I mean, the ones that I have that I was looking at redoing their low 4% I mean, I guess I could get to from what I hear like sub three, which makes it worth it. Mm hmm. Think probably 2020 at least read refine.   Emil: Come on. This is this is the hot seat. We got to grill Tom here? Yeah. Why do you think you didn't get all this stuff done that you'd want to do? I know, I know. life gets in the way. But what do you think like in 2021? What can you do differently to like, make sure those things get done?   Tom: I just I need to just not be lazy about I think I got a little lazy about it. Yeah, the hard thing about grilling me is I'll just like put my hand on the grill and precedent. Yeah.   Michael: I love it. I love it.   Tom: Give it to me. No, I think acquisition stuff I think turned back on and 2021. But the falling short, is definitely just getting some of the insurance stuff because right now, I'm probably paying like a couple extra 100 or 200 bucks a month, but it's just lighting money on fire like stupid, stupid, Tom. And another coverage I need. Okay. Take it easy talk don't grow too hard. No.   Emil: Michael’s like, it’s Okay. Grill him,   Tom: So all in all, kind of a boring year, but I didn't take care of the important boring stuff. And you know what, but you did or did not take care of the employee? Didn't I mean, enough, you know, but I didn't take care of the playing a little bit of offense on the insurance side. But that's why they make tomorrow, so.   Michael: yeah, I mean, the good thing about insurance is that you don't have to restructure the entire portfolio. Yeah, you can just go redo that one. And that's like, like an hour's worth of work.   Tom: Yeah. You know, honestly, like, I think, dude, this is going somewhere, this is going somewhere, something that that whole communication breakdown between the insurance company and the lender, kind of like made me I don't know if nervous is the right word. But there's like, just concerns of me of like, you know, making sure that that doesn't happen again, not that it was like a huge deal, but I don't know it. Do you have any thoughts on that? You guys on changing your insurance kind of mid flight and making sure you're not double paying? And   Michael: Did you crack some skulls? Because of that? I mean, it sounds like I mean, obviously, the buck stops with you as the owner. But it sounds like the ball was dropped at multiple stages as well.   Tom: I didn't crack skulls, I didn't crack skulls, and maybe I just need to be like a little bit more of like, a ballbuster. But you know, skull cracker. Michael, what would you do with your advice right now?   Michael: Oh, I would cancel that insurance today. Yeah, I would go get on the phone with an insurance Rep. Either somebody I knew or Nick from the Academy, talk to somebody and just go place new insurance because that's totally unacceptable, and frustrating, right? The lender doesn't really care how much it costs you. They're covering their behind because they've got the loan. But so you know what you need for your insurance, you can send an existing declaration page of a policy that you'd like to an agent, you know, wherever that property is, I just get it done and cancel the other one.   Tom: Just do it. Okay, screw it, I'm going to do that in 2020. This episode is honestly bearing some fruit. And I think the other thing that's kind of a mental block for me is knowing that I don't have to get onto a phone tree to talk to the mortgage company and like, okay, just light an hour of my time on fire. I'm working my way through the phone tree and in talking to who I need to from the mortgage company to let them know like, Hey, I have a new, any thoughts to…   Michael: Your insurance person should do it,   Tom: They'll do it all?   Michael: All you need is the contact for that insurance company that they've placed for you. And you can call and cancel and then show proof of your binder that your new policy is bound.   Tom: Will the lender then send me like whatever escrow that they have? Yeah. So we'll get a check from them.   Michael: They should Okay,   Emil: I just did this. I don't know if the lender will but like your insurance company, right. So let's say you're halfway through your policy costs $500 a year, whatever, just use easy math. If you're halfway through, they'll send you a check for that 250 prorated and that's left. That's I'll talk about it when I'm in the hot seat, but I've just recently did this and that's what's been going on for me. I get it from the insurance company and prorated amount.   Tom: Ooh, I'm gonna take care of this. Hopefully by the time this is published,   Emil: Do it. We still got time in 2020.   Tom: Yeah, right I really am like super juiced about this. Okay, good. Yeah, I'm gonna take care of it.   Michael: I guess Tom, you can send me all nice commission checks directly to us. 10% fee, easy,   Tom: Perfect.   Emil: So So what's what's lined up for 2021? You're gonna get that done in 2020. So what do you think is lined up for 2021   Tom: I think I want to add kind of get back on the two units. One, two, I'm going to have this this big HELOC available…   Emil: Make it specific which one, one or two?   Tom: Two. Yeah, making it to…   Michael: You heard it from the horse's mouth everybody.   Tom: Yeah, going to 2.   Michael: This time next year, we're going to look back and see if Tom has his two units.   Tom: Two units and two refinances. That's what I’ll do.   Michael: Whoo. All right.   Tom: If I am refinancing though, I can pull a little money out. Okay. Three. All right, And HELOC? Okay, that's it. That's it. That's 2021 three units and 2 refinances.   Emil: Solid.   Tom: Awesome, and it feels good putting it out there.   Emil: And now it's no it's like real public. It's not just like you shared it with a friend like it's it lives on the internet now. So   Michael: Right, this is recorded, dude. All right, man.   Tom: Yep.   Pierre: Do you want to do one of those little equity challenges Tom? where you give me like $1,000. And if you don't get it done you don’t get it back?   Michael: That's so good. Yeah, Pierre will be your escrow account. If I ask.   Pierre: Yeah, there you go.   Michael: And Tom tells you like, wait, Pierre, I need that 1000 ago by the third unit. So I need that in the down payment.   Tom: I like it. All right. I feel good, guys.   Michael: If you feel good. We feel good.   Tom: Good. Good. Good. Good. Anything else in the hotseat, or are we ready to mix it up?   Michael: Let's mix it up. Starting to stink out there.   Tom: All right.   Michael: It’s like burning flesh.   Tom: Michael,   Michael: Let's do it.   Tom; You’re in the hot seat.   Michael: Is it gas or charcoal?   Tom: It is oil baby.   Emil: He's falling around on fire and running around.   Tom: Alright, 2020 What did you What did you want to get to? What do you What did you want to get done?   Michael: Oh, man. So 2020 I had really high hopes Wait, dude, I'm like losing track of the days and years here. So okay, so 2020 started off crazy. I had two fires in my in a commercial mixed use building that I'm redeveloping converting commercial space and residential space that happened in the end of 2019. And so I was really hopeful and optimistic that that project was going to get done here in 2020, because we started it in late late, late 2018, early 2019. And so that's just been going on dragging, dragging, dragging. So the problem was that, because of these fires, I had to go work with a public adjuster to get the insurance to pay what they owed. And that just just been drugged out, like unbelievably long. And so I had to pause work on the building because they had to do investigations, and the whole building was affected. So we couldn't disturb any of the evidence and the whole building. So it's just a whole frickin mess. So by 2020 got massively derailed. In that sense of the word.   Good news. on another project I had, I had a kind of contingent loan refinance, I was able to pull cash out for rehab I did. And they were going to give me draws for the refinance cash as those units got leased up. And so we got all four of those units leased up. So I was able to grab all that cash out from a refinance I did, which was very exciting. Then I also wanted to add a few more units to the portfolio, but kind of like Tom, I was just so busy kind of putting out other fires kind of pun intended, so to speak, that there just wasn't a whole lot on the acquisition side. So it was just kind of managing the ongoing stuff. And so I wanted to finish up a couple other rehabs that I was able to get done in 2020. So that's super exciting. Of course, they took longer and were more expensive than anyone anticipated, but dealt with a crooked contractor and had to fire some people and hire some people. So 2020 was a whirlwind to say the least,   Emil: I'm surprised we've all talked on the podcast and off the podcast. I'm surprised that part of your 2020 was to add units, given how much stuff you already had going on. That is shocking to me that you…   Michael: Yeah, well. So I mean, part of it was to because I had this great vision for how on the rails things were going to be operating. And then that immediately got debunked and it was like Ozzy Osbourne's Crazy Train. And I was like, Oh, well, like we got to pump the brakes here a little bit. I got to focus on what's going on, restructure some things, get some things reined in. And so that was able to get a lot of that done, which was super exciting. But still a long way off on that big project. But wrapping up, have put the bow on several others, which is very exciting.   Emil: I don't even think you've mentioned your international project and all that either.   Tom; Oh, yeah, I totally spaced on that. So last year, my wife and I were traveling for the better part of the year. And then in the beginning of 2020. We're also traveling, and then came home in like April because a COVID. So we are working on we made it a 2020 goal to get our Portuguese permanent resident status. And so that's via an investment in Portugal. So we purchased an investment property in Portugal in 2020, which is very exciting. And then we're in the process of flipping an investment property in Portugal as well. And so that'll happen in 2021 as the borders reopen in Europe, and people are traveling more because it's tough to sell a kind of high end unit without folks traveling there. So that'll likely be in the q2 or beginning of q3 and 2021. But yeah, so we were able to get all paperwork signed in and submitted to the Portuguese government, which is super exciting. So now we're just waiting on confirmation that they have everything they need. And then we can of course, pay more fees and taxes to the government, and hopefully get our status and then we'll need to travel to Portugal at some point 2021 to do some paperwork.   Emil: Hot Dang. So pretty slow year for you is what you're saying overall?   Michael: Yeah, pretty typical. I hope 2021 is more exciting.   Emil: What do you think was the obviously a lot of stuff happen? What do you think were a couple, or just maybe the top learning for you that you want to take in the 2021.   Michael: I think one of the biggest takeaways for me is how amazing public adjusters can be when it comes to dealing with insurance claims. Because I came from the industry, I used to work for a really reputable property insurance company in the commercial sector. And so I never had experience in public adjusters that wasn't something that I was ever exposed to, because it was never a thing that we dealt with in our business. So I haven't been on the other side. Now the user side, the insurance side, that was a real eye opener and about how powerless we as the little people can feel going up against these massive insurance companies. And so just knowing that there is help available, there are people and professionals out there that can be your voice that can help you and really go toe to toe with the insurance company on your behalf. And so I think a big takeaway is to reach out and get help sooner than you think you might need it. Because this whole process could have been expedited a little bit.   I mean, the process itself takes a while. But I kind of waited a long time to do it, because I didn't think it was going to go south. But it did, it went really south. The other takeaway that I have is that, you know, I was managing this whole process from Nicaragua, and Costa Rica, when it first happened. And so I mean, this whole remote investing thing, you can do it in the States, you can do it outside the states, a phone connection, internet connection is really all you need. Because what's the difference? If you're in the states versus somewhere, not in the States, timezone is the biggest difference. So if you're comfortable with the remote thing, I think the possibilities are limitless. Another big takeaway I have is don't spread yourself too thin. And it's one of those things that you're not going to realize that you're spread too thin until you are and so don't try to bite off more than you can chew because it's really attractive or sexy or exciting, even though it might be all of those things. Because it I mean, I definitely like my mental health took a big hit in 2020, just from juggling all this stuff. And so I had a lot of sleepless nights and stressed moments from man, how am I gonna make this come together? And how am I gonna make sure I get this project done. So just don't bite off more than you can chew. And always, always, always overestimate the time and cost of projects because they always go over both in terms of time and budget.   Tom: How about 2021? Sorry, a meal, we're adding one more, how about looking forward to 2021?   Michael: 2021, I am highly confident we're going to get that big redevelopment project wrapped up and finished, I'm also going to be selling a property that I was looking to sell in 2020. But that didn't come to fruition. So we're gonna be lowering the price a little bit, getting it back on the market. And then I'm going to be tying up two refinances that I have just started now one is a commercial refinance on a triplex. And then another is a refinance conventional refinance on an investment condo that I own that I was kicking the idea around of selling, but I'm able to take out a bunch of cash and get the interest rate significantly lower. So I'm toying with a couple different ideas. But that's what I've got lined up for. For 2021. Oh, and then I also am doing a loan modification on a commercial portfolio loan I have that's two properties. I went and got a competitive bid to have it refinance elsewhere, and then went back the original lender and said, Hey, can you beat this? And they said, Yeah, sure. So   Tom: Oh, nice.   Michael: I'm really excited about that   Emil: Awesome, man. So no new acquisition plans for you more. So just like getting everything,   Michael: I take that back. So I've got a couple of cash partners that want to get into the real estate space that have reached out to me and asked if I would help him do a couple of deals. So I'll be either 50% or a minority partner looking to secure a deal and then get it rehabbed or refinance and kind of be running point on that for some folks are international and some folks who don't have any investing experience so they want a helping hand in how to do it. So it's almost like a syndication but not really just because folks have approached me and said, Hey, take my money. Can you do real estate for me? And I said, Yeah, sure. So we'll probably add, I don't know anywhere between 10 to 15 units in in 2021 using OPM.   Emil: Nice. What is OPM?   Michael: Other people's money?   Emil: Just in case Yeah,   Michael: yeah, no, it's great question. Ah, yeah, that's what's that's what's on tap guys.   Emil: I'm looking forward to you having a calmer 2021 and getting things done.   Michael: Dude. Makes, makes two of  us makes to us. Thank you.   Emil: I get stressed out just hearing about all the stuff you're doing   Michael; Well, like Tom said, it's kind of nice to put it out there it's almost like a therapy session you guys can invoice me, bill my insurance.   Emil: Yep. I'm gonna bill you for you know, listening to all that and carrying the brunt of it.   Michael: Laden you with all my…   Emil: Exactly.   Michael: All right, Emil, ready to step up to the plate.   Emil: Let’s do it baby.   Michael: All right, sizzle sizzle 2020 in the rearview mirror. What did it look like from the beginning? and What did it look like at the end?   Emil: Yes. So my goal was really simple. I think I mentioned it early on, when we started the podcast, my goal is to buy two properties in 2021 or 2020. on that front, we ended up buying one property. You know, it's funny, I think these acquisition goals, they're kind of like this double edged sword where you're like, Alright, I want to buy x properties. But it's like, you should never just buy properties to hit a number. It should be like, if you find the right things, buy them. Right. So that was kind of the case for us. We found one property we liked. We made offers on a bunch of others, but haven't closed anything else that we've liked. I actually just submitted an offer on a 12 unit on Friday that I was really excited about, but we lost on that one. So that was a bummer. But I just I wrote down some of the other things we got done.   So we bought this property. It was a small multifamily triplex. So that was one of my goals was to buy multifamily this year. So we bought that tribe.   Michael: Welcome to the dark side.   Emil: Ah, yeah, well, we'll see if, if I'm here to stay, but we're testing it.   Tom: You're dipping your toe!   Emil: Exactly. Toe dipping. I knew that buying two properties, just saving money was going to be tough. So at the beginning of the year, in an attempt to put some money back in our pockets, to buy some multifamily to test that out and to consolidate because we were in just several markets. And I you know, I think I've expressed that I'm not a huge fan of that strategy anymore. I'm trying to consolidate over time and really focus on like one market. So I end up selling a rental property we own in Memphis basically broke even on that when you factor in cash flow and turn costs and all that stuff to sell it but put some money back in our pocket to be able to go out and try to hit that two new properties goal, refight our primary twice because at the beginning of the year rates dropped a good amount and we're like, Oh, sweet, we got to do it dropped our payment a couple 100 bucks. And then like two months ago, they dropped sub 3% and it lowered you know, our monthly payment, a couple $100.   More so to revise in one year, which is interesting. We did a cash out refi on our single family home in Jacksonville, which I think I've talked about that one on an episode ended up appraising for way less but because it lowered the rate, put some cash in our pocket, nothing huge. I think it was like 6000 bucks, but the payment didn't change at all because the rate lowered so I was like, Okay, why not, I just started the process of doing a cashout refi on our Indianapolis single family that one I'm pretty confident has appreciated enough where we'll get 80 to 90% of our original investment out and the rate has dropped enough where I think our monthly payment changes 510 bucks a month. So it's like a total no brainer with rates being as low as they are I end up getting new insurance on the st louis and the Indianapolis single family and just because like Tom I think in doing these episodes with insurance and Michael having the background that he does in insurance just realizing that I was under covered and paying too much so we end up getting more coverage the the rates actually ended up seeing the same but we just got much better coverage. So feeling much better about those properties. And then I had an umbrella policy on one of our properties and cancelled that and got a new umbrella policy for the entire portfolio in our primary and it wasn't much more than what I was paying for the original umbrella so…   Michael: And did you add your auto on that?   Emil: I did not add auto it made it jump a lot huh for me personally and like doubled the cost hopefully I'm not kicking myself in the years.   Michael: right right   Emil: Don't put it out there Michael, you insurance whatever.   Michael: Hey, man, we're grilling up grilled Emil sandwiches here man.   Emil: Michael the insurance. Do you have everything in your life insured you're just you're just setting yourself up?   Michael: Man you have to you have to. It's funny coming from the pessimist, the self proclaimed pessimist you should be the one that's insuring everything.   Emil: We don't have enough time on this episode. To go through my silly logic of why I do it but you know what? Why don’t you go insure that mustache okay?   Michael: There's not enough coverage in the world to insure this mustache man!   Emil: Sir, your mustache is not full enough for us to offer you coverage.   Michael: I need what's called gap coverage to fill in. God insurance jokes.   Emil: Yes, I'm probably still under insured on some things. I probably should have rolled the autos in but like, just with, I don't know, our insurance costs went up. So I was like, ah, even more. No thanks,   Michael: Baby steps you got to ease into it.   Emil: Exactly. So you sound like my brother was like, you know, the autos are what really matters. That's the biggest thing that people usually use the umbrella for fun fact.   Michael: Whatever. It costs too much like   Emil: Thank you moving on. So that was the 2020 recap.   Michael: When you started the year. Remind us were you targeting a single family. are you targeting as one multifamily?   Emil: No, my goal was to target All multifamily. So probably in the three to four unit range, I was actually looking to do originally I was looking to do like a bur on those. So buy all cash, fix it up, go refi later, and put in find properties that made sense in a hot market like this, I think, especially in a rise, you know, in a market like we have right now just just couldn't find one that made sense for me. And so found a triplex where I think there's still value add and a couple of the units have market, the rent is way under market, and they don't need that much to get to market. So try that instead, we'll see how that goes.   Michael: I think you also did something here in q4 of 2012, that you didn't mention with regard to that 12 unit and getting yourself lined up to make a move next year. Right?   Emil: Yeah, so with that 12 unit, I had to basically scramble and like create what's called a personal financial statement, which is what a commercial lender wants to see. So when you do conventional that, you know, it's more like just your income. And what personal financial statement is like literally your entire net worth all the assets, you own all the liabilities. So that was a little bit of a new process. I didn't have all that at the ready, and I had to just go aggregate it from everywhere. Now I'm approved for a commercial loan. So now we can start looking at properties that are five plus units and you know, have a we have a pre qual letter. And so like we're much stronger on making offers on those types of properties moving forward. So, you know, before I was looking at just two to four units, and now it's like, I don't know, I might might go five plus, we might do something commercial in 2021.   Tom: That's awesome. you've gotten that back in. Yeah, even though you didn't get it like it's,   Emil: It was cool to finally like, obviously, we didn't win on it, but at least to like make an offer on one go get the process going with the lender to be pre approved there. So just at least now we're set up to do more of those offers in 2021 if we want to.   Michael: And so what does 2021 hold for you?   Emil: 2021, two properties. Again, that's the main goal. I definitely want it to be multifamily. I don't know if it's going to be small multifamily that two to four unit range or five plus, I think it's just if we find a good deal, whatever makes sense. Makes sense. Right?   Michael: Awesome.   Emil: I like to to for a lot right now, just because you still get conventional financing and 30 year interest rates are so low to get that locked in for 30 years just is like sounds amazing. But again, if an awesome deal comes across and it's five plus, I'm not going to do that either.   Michael: Right on is that it is at the end of the list for 2021.   Emil: There's another goal I have for myself that's like the the big one for me. Usually every year I feel like real estate is the big ones talk about that other one right now. It's secret, and we'll talk about that maybe at a later date. Awesome. That's that's a big focus for me. But I still want to keep some activity going with the real estate portfolio. So two properties.   Michael: Awesome. If I can borrow both yours for a minute, I have a question. Speaking of 30 year fixed rates, so I have this investment condo, I'm trying to figure out what to do with I can either I'm thinking about selling it just kicking the idea on selling it, I could also refinance in rate only, and drop it from a four and a half to a three and a quarter, which would save me about 230 bucks a month, or I could do a cash out refinance and get about 100 grand out. And that rate would be three and three quarters 3.75 my payment would go up from where it is right now. Like 250 bucks.   Tom: 100 K, that's what should be taken out.   Michael: Yeah.   Tom:  You got a plan for that, to park that 100 K?   Michael: Vegas man. First on red. Yeah, I do have a plan for that 100 K, I mean, I'm going to use it to wrap up that development project. And so I think I'm leaning that way. I mean, a half a percent spread on 100 K, over a 30 year fixed like, almost seems like a no brainer and to get sub fours on that. But also like three and a quarter is pretty amazing, as well.   Emil: What is your cash flow? Does your cash flow become negative on that property? With the cash out refi?   Michael: Right now? It's like 50 bucks a month.   Emil: So would go negative?     Michael: It would go negative? Yeah, there we go negative. But it'd be negative today. But I think you know, in the next 2,3,4 years rents, I'm assuming are going to go up they climb steadily since I've owned that property.   Tom: If you were to take out the extra 100,000, what would that put your loan to value at?   Michael: That'd be 75. Yep. And there's no and I asked the lender, there's no additional break in interest rate if I went lower LTV, like if I took 70 or 65 it's still that same three and three quarters.   Tom: Yeah, if you're in a position to like take a little bit more risks that seems like really cheap capital to close out that other project. So right I would say that's probably like the less conservative route but it could be opportunistic by kind of like what you're describing.   Michael: Yeah.   Emil: And you know, my opinion I'm very bought in on Michael Zuber is don't create alligators don't create anything negative cash flow. I know even though you would be able to like put it towards something that will probably make up for it, right? The negative cash flow somewhere else. The idea of having a property where you're basically putting money in it all the time. Just it does sound terrible. And it's like I love that as a rule of thumb, just like don't think Don't break this rule. So I wouldn't I would try to find the cash somewhere else. You know, you mentioned that six unit you're trying to sell like, Can you just I don't know, try to bring the price to a place where it's that could sell faster and that'll get you the money or something, I would try to go something else. And just refi it, lower your payment. This is a California property, so to like have cashflow on that property? And obviously, the equity is awesome. I don't know. That's, that's my take personally.   Tom: Yeah, I mean, or the, you know, option C's just to sell it. You take all the that's right there. I obviously have a bunch of equity in it if you wanted to close a deal, right? And you didn't want an alligator? Right? I don't one of the two extremes, either refi 100,000 out or just sell it and unless you're gonna be living in it.   Michael: Right, right, right. I need a place to live in, which I won't be or option D is just take less cash out. So it doesn't go negative.   Emil: Yeah. That's not a bad idea, either.   Michael: All right. Well, I have to keep y'all posted on what I end up doing good insight, tips. Thank you both.   Emil: Awesome. Cool. This is fun. I'm glad we got to do this.   Michael; This is a lot of fun.   Tom: Yeah. And I'm inspired. I'm definitely going to be the next time. We record every week. The next recording, hopefully, we'll have my insurance stuff.   Michael: Hopefully?! That's not a plan!   Tom: You're right. I will right.   Emil: That's right, our next episodes…   Michael: Use power words.   Emil: We're starting the next episode, we're gonna we're gonna follow up and see if you did it.   Michael: We're gonna bring out the grill again.   Tom: Excellent.   Emil: The reason I think we did this episode. Yes, it's fun to talk about what we're all doing. But hopefully, it just inspires you guys. Hopefully you get some ideas in, you know, as you're forming your 2021 goals, it inspires you in some way, shape, or form.   Michael: And I think something else to kind of piggyback off what you said, Emil, is that stuff doesn't always go according to plan. And so don't get disheartened. Yeah, don't feel as hard or beat yourself up. If things don't go according to your plan. I mean, there's a lot of things going on that are often outside of your control. So make a plan, try to stick to it as best you can. But also be gentle with yourself and understanding that, yeah, it doesn't always go smooth. And so be able to be flexible and pivot and kind of bend be the willow not the with some more sturdy tree that breaks in the wind, Be the willow not the twig, 2020 takeaway.   Emil: And one other thing is, you know, we all set like pretty simple goals, right? Like, buy x properties, close x projects, whatever it is. And I think if you just set that high level goal, your mind will start thinking about, alright, how do I get there, right? Like, I didn't have sell a property, or refi, or any of those things in my goals, it was just buy two properties. And so by necessity throughout the year, I was like, Well, I'm not gonna really get this cash to be able to buy those properties. So you just started thinking of different ways and things you have to do to get to that goal. So I guess the point there is, I think it's okay to just just have a top level goal instead of a bunch of like, smaller things. And like you said, be adaptable, and those, you'll figure those things out throughout the year.   Michael: All right. Um, just quick counterpoint to that, I would say the more specific you can get, oftentimes, the better. I like the acronym smart for goal setting, because you can measure yourself and it should be attainable. And I think it helps put parameters around the goal. Oftentimes, when you have a lofty goal or a non parameter Set goal, it's tough. I find it personally tougher to accomplish different strokes for different folks. But I find putting parameters and timeframes and measurements around it helped me accomplish it.   Emil: But you take you take that bigger one, and always break it down in a small like, let's say your goal, whatever was like by 10 units, right? Yeah, for this year, would you break that down into a bunch of the sub things you're going to need to do? Or will you just say that and then kind of figure it out as needed. as the year progresses,   Michael; I try to break it down into smaller bite sized pieces.   Emil: Alright, well, with that, hope you all have an awesome end to 2020 I know a lot of us are probably looking forward to put in 2020 in the books. And I don't know about you guys. I'm very, very optimistic about 2021. We have some good news. It feels like there's a light at the end of the tunnel. So hope you all have an awesome new year. Big, big things lined up for everybody. Listen in 2021 you know, we started this show in in 2020. I really want to thank you guys all for the support this year and the feedback and the support and you guys listening…   Michael: Big time!   Emil: in a week. So with that, we'll check you out in the new year and happy investing.   Michael: Happy investing.   Tom: Happy investing

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