Rental Investor Starter Kit

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Show Description

Real estate always finds a way to surprise you. The success in this game depends on your ability to adapt and learn new things. At Mynd, we believe that the best source of information and learning comes from other investors.  

Our special guest today will help us get to that next level faster. Tony Robinson is the Real Estate Rookie Podcast host, and a passionate real estate investor himself. We discuss the science and art of investing, and everything from numbers and data to the success mindset you need to make it as an investor.

What We Cover

03:15 - Tony’s background and why you don’t have to quit your 9 to 5 job to become a real estate investor.
10:03 - The secret to success in different areas of life and how to keep the end goal in mind.
15:49 - How Tony got into real estate and what took him from learning to action.
22:27 - Tony’s best deals and how he set up his business to maintain and grow his portfolio.
32:22 - The world of short-term rentals and why you should sometimes sell even the properties with good ROI.
38:13 - The up and coming trends for 2021 and whether you should care for trends at all.

Watch the Podcast

Read the Transcript

Steve Rozenberg  00:07
Ladies and gentlemen, welcome to another episode of The Myndful Investor podcast Show. I'm your host, Steve Rozenberg. I am the Head of Investor Education at Mynd Property Management. And we have this podcast show for the sole reason of trying to help investors understand how to get into this crazy world of real estate and how to get in. And on this Ferris wheel, we call investing. Now, as an investor myself, I have always found that the best source of information is from other investors, talking to new investors, experienced investors, I have always found that every time I think I know it all, real estate seems to always have a way to come back and re correct your thinking and show you that maybe you just don't know every single thing that needs to be done. So whether you are brand new to real estate, or you are super experienced, or you're somewhere in between, hanging around like-minded, success driven people, I believe, is what will get you to the next level. Because I think we all know that whatever got all of us to a level that we're at today is probably not going to be what gets us to the next level. And associating and being around other like-minded driven people is, I think, what drives what drives me, I know it makes me want to be better. And I know that my guest today is just as passionate about it. We both have a lot of things in common: bigger pockets were investors. I believe we're both from the West Coast, I believe. And we both have one common pain name Ashley Care that we both are friends with. But Tony Robinson is the host of the Real Estate Rookie podcast show. And he's Ashley Kehr's co host. And so first of all, Tony, thank you so much for being on the show with me today. I appreciate it, buddy.

Tony Robinson  01:56
Steve brother, I'm so excited to be on. Like I said, we were chatting before we started recording. There's just so much I think good content we're gonna get into today to hopefully help you and your listeners get started, man.

Steve Rozenberg  02:06
Yeah. Now one thing I want to discuss is, one thing I know about you is, you have a regular job correct? You have a nine to five, we'll call it is that is that correct? Yeah. So I think a lot of people not and I don't even know what you do or what your position is on the job. But let me just say that I think a lot of people have the misconception that everybody wants to leave their nine to five job. And again, I don't know if you do or do not, I know myself being an airline pilot, as well as working for Mynd. I don't want to leave my job. I love what I do. I love flying airplanes. I love working with Mynd. I love what I do. I love the fact that real estate gives me that ability to have the lifestyle that I want to have. And so I think a lot of people are chasing, they're going away from the pain that they think a job gives them. And I'm just curious, your thoughts on having a professional career? Obviously, you're doing these podcast shows with Bigger Pockets. You own real estate? What is your take? I just know this is not planned. I'm just curious, your take on having a career and you know, being happy with it or going away from it to leading towards something else?

Tony Robinson  03:15
That's a great question, Steve. And I guess before I actually answer that question, I just want to give a little bit of background. So when I was, gosh, I don't know three years old, my dad was let go from his job. He had been at that place for I think at the time, like 17, almost 20 years, right. So he gave almost two decades of his life to this job. He started off as a dock worker, worked his way up to being the general manager of this building. So he had like, busted his ass for this company for two decades. And with very little notice, they let him know that the company was going bankrupt. So my dad, you know, after two decades with this place was, he was the main breadwinner for the family. mom wasn't working, she was a stay at home mom, and my dad had no source of income. And I think that shook him to his core. And he always coached me growing up that, hey, no matter how good of a job you have, you have to make sure that you have something else to provide for your family in case something happens. So for me growing up, that was always kind of the backdrop of my life. Even if you have a great job, even if you love it, you never want to just rely solely on that to take care of your family. So that's always the first way that I look at real estate investing is it's not so much that I'm running away from this w2 two, but it's that I'm building this foundation, the security for my family in case something happens. It's about having the option to leave if I wanted to. Not so much and I'm trying to force my way out.

Steve Rozenberg  04:39
You know, it's funny you say that because and I don't know if you know my story, but I got into real estate because of 911. And so being an airline pilot, I got hired at 25 years old. I was 10 years younger than the average person hired at a major airline. And I had the best job in the world. I was flying out in the South Pacific all over Asia, Australia. I was living the life of my dreams. And I had the most safe and most secure job that anybody could ask for being an airline pilot in the big union. And all that was true until September 10, September 11, 2001, we all know the tragedies that happened here in the United States. And for me, September 13, which I will never forget is the day that I got my furlough notice. And they said, your safe and secure job is really not as safe. And it's not as secure as you may think it is. And thanks for playing, but we're not sure we're going to need you in the future. And I realized at that point that, you know, if I'm not in control of my own destiny, and I cannot dictate my own terms, by having something else to fall back on, then I'm a cog in a wheel. And I have nobody to blame but myself for being lazy and complacent by living a kind of, I don't wanna say a lie, but living an illusionary dream. And again, I thought that I had a safe, secure job. And it was actually the most unsafe unsecure, because when you're an airline pilot, you're so specialized in what you do. I can't go do anything else. And I remember looking in the WAN ads, thinking, what else could I do if I do get furloughed, I couldn't even drive a truck because I wasn't even certified. I could fly a metal tube around in the sky with 100 people, 200 people, but I couldn't drive a truck. And I was thinking, wow, like this is crazy. And I remember thinking like, This isn't fair. And then you realize, whoever says things are fair. And so I always tell people, especially now we have COVID, and everything going on that the difference between me now as an airline pilot with real estate holdings, and everything, all the knowledge that I have, and me back in 2001 is 20 years of hard work, mistakes, lessons. And I tell people I love flying, I will never give it up. But I also know that at any point, they can be downsized, they can shut their doors, we can be merged, whatever the case may be, and I will be okay. Because the action that I've taken over the last 20 years and it sounds like that's kind of what you're doing. Also, it sounds like you're kind of building your fortress, as you still do what you do. Is that a safe statement?

Tony Robinson  07:04
That's absolutely right. So even I love what you said about risk, because a lot of people are so afraid to start investing in real estate because they perceive there's a high level of risk, but they don't understand the inherent level of risk they have by not investing and relying solely on their w two to provide for their family. So I love that you brought that up.

Steve Rozenberg  07:23
Yeah. And you know, it's funny as I have pilot friends of mine that were in the same class back then, same seniority, same seniority now, and they say the same things that they were saying back in 911. They were like, wow, I wonder if we're gonna get furloughed. I wonder what's going on? I'm thinking to myself, you had 20 years to do something. What were you doing? And they were being lazy, right? They're being complacent, lazy, and they were living this illusion of a nine to five job. Yeah, they're making good money, but they were spending as much as they were making, you know, they've got these big 5000 square foot houses on the lake and all the toys, and now they're like, wow, I need to make everything I can. So I think that, like you said that illusion and thinking that it's risky to be an investor, you know, you get on the flip side of this coin, and you stop getting a paycheck for a couple weeks or a couple months. And I think you soon find what risk actually is and that you actually, you know, you kind of picked the wrong path, if that's what you did.

Tony Robinson  08:15
If I can have one more thing that I say, before we go, right, I think what will hopefully motivate people into taking some massive action is to ask yourself, if you got let go fired, whatever today, how much runway do you have? But like how long could your assets, take care of your family. And if it's a day, a week, a month, like you should be terrified. And you should be taking massive, massive action to extend that runway out. So you have months, years of breathing room in case something did happen.

Steve Rozenberg  08:46
Right. And you know, just kind of piggyback on that. I think what a lot of people don't realize is, it's look, I'm not a very smart individual. I don't. I'm not magical. I don't ride a unicorn over a rainbow every day. Nothing special, all's I do is I put consistent action in every single day. And sometimes it's wrong action. And sometimes I make mistakes. And then I learned from those mistakes. But one thing's for sure is for the past 20 years, I have taken consistent massive action on a grand scale as much as I can. And I'm not afraid to lose, not afraid to make a mistake, not afraid to fail. And those lessons have parlayed many, many times over for me and like you said, I mean, if you look at those numbers, and look, you know, one thing I've learned about real estate is I'm sure you have is the numbers don't lie. The numbers are telling you a story that data you know real estate is a mathematical equation. And that math is telling you something, whether we choose to listen to that math of how long we have, how much runway we have and how much assets we have and how much cash flow we have. That's a different story. But I think that's a lesson that a lot of people need to think about especially in this ever changing economy and environment that if you are not dictating your own future, it will it will be dictated the question is are you doing dictating it or someone else dictating it, that's the question.

Tony Robinson  10:03
Yeah. And see if like, I don't you know, I know you're supposed to be interviewing me, but I gotta ask this question. So you've had 20 years of balancing a W two with building this real estate business. I know, the question I get all the time is, how do you have enough time? How do you have enough time to be a family man to, you know, W two and still build your real estate portfolios? Um, you know, I'm just curious what your answer is?

Steve Rozenberg  10:25
What I've learned is, I don't think there's such a thing as a balanced life. First of all, I think that's an illusion, I think that you have to be focused and intentional in what you're doing. And then you have to learn to pivot. So I'll give you an example. If I was learning to juggle, the last thing you would want me doing is juggling while I'm trying to land a 787 airplane at the same time, that's called balance, right? I'm trying to do both at the same time, I'm trying to, you know, multitask. But the word people use nowadays, you don't want that you would say no, no, fly the plane and then juggle on the way to the hotel. Right? That right? So I think that what I do is I'm very focused and intentional with my time and I am very, I have learned that the only thing we have the most powerful word we have is no. And so it's hard for me, but I always think about what the opportunity cost? If I'm saying yes to doing something, to talk to someone to spend time, that is not part of my focus, and it's not part of my intention. What am I really saying no, to? That's the bigger question, because something is being told no, it could be an opportunity. It could be a deal. It could be a business, you know, meeting, it could be something, and I'm intentionally making that decision. So what I do is I tell myself, you know what, I have so many things that I have to get done in the day. I'm very big with my calendar. If it means that you know, I'm a big person and going and working out to me, that's very cathartic. It's very, it sets my life, it sets my day. If I have to get up at two in the morning to go to the gym, because I have a busy day. I get up at two in the morning, like there's no ifs, ands, or buts. And luckily, my wife is the same way. She's just like, Yeah, do what you got to do. And so that's just, you know, I give an example. I just was in Santiago, Chile, flying a trip, I landed this my flew all night long. I landed this morning at 5am. By 545. I was at the gym working out, I came home, I rested for about 30 minutes. I've done podcasts all morning, and I'm getting stuff done. It's not I don't say like, Well, I'm not gonna go to the gym today, because I'm tired. So to answer your question, I am relentless in doing what I need to do to make sure I accomplish the things I have to and I don't use. At the end of the day, I've learned and this is very relevant to people that are looking to invest. And I know this isn't an interview about me, but I'll tell you, at the end of the day, nobody cares. You know, nobody cares about your excuses. And nobody cares about your problems. And nobody cares about why you are not doing something. They may say, hey, Tony, that's great. Yeah, you do work hard, you deserve to rest a little bit more. But as soon as they turn around, they have their own lives, they have their own investments, they have everything that they have to worry about. And so I've learned not to live my life by making excuses to be told it's okay. And so I get a lot of people that always you know, you get the people that patch on the back and say, Steve, you know, you're working too hard. You know, you're working, you know, you're doing stuff with Mynd. You're an airline pilot, you have a family, you're traveling, you're doing this, you know, you're creating all this stuff. You're working too hard. But what's funny is I've never met someone who's very, very successful. Tell me does, I'm working too hard. I've never I've never met that person. I've always heard everyone that I've met says you need to work harder. You need to work faster, and you need to learn what to do quicker. Never is it Hey, Steve, you should take some time off. I've never met that person. So I wonder that people are telling me that I just kind of sit there and listened gracefully. And thank you very much. But I do not I don't let it process. And I have so going back to your question, I'm very, very focused in what I do. And I do not let that deviate. But I'm very intentional with my day. With and with the things that I do.

Tony Robinson  14:00
Steve, I want to make a couple comments on what you said, there's so many golden nuggets there. But the last part you said about who's giving you advice, I think that is so absolutely critical to anyone that wants to invest in real estate because you have to filter your advice depending on who's giving it to you and what that advice is about. Because if I'm overweight, and I'm looking for advice on how to get healthy, I'm not going to ask another person that's overweight. Right? If I'm in debt, and I want to learn about how to better manage my finances, I'm not going to ask someone that's also in a ton of debt. I'm gonna ask someone that's successfully gotten out of debt or avoided debt or someone who's extremely fit and extremely healthy. So when you're looking to become a real estate investor, don't go to your uncle, you know, Joe, who's never invested in real estate and ask him what he thinks about this deal. Because he has no frame of reference to give you good advice. So I just I love that point you made just want to go back and kind of highlight that for the listeners but going back to the time management piece, because there's a lot of good stuff he dropped there that I really do agree with The way that I've always looked at it is that no one can manage time, like people talk about time management, but I haven't met anyone that can tell the clock to stop ticking. So it's all about how you dedicate your time throughout the day. And what you said about that, like really focused effort, right? Or really blocking out time to focus on one thing is important. Because when people think about balancing, you know, they think, Okay, I'm going to give equal parts of my life to all these different things that I have. And that's not what it's about, like, you know, today, you know, sunup to sundown, I might be in my office all day, you know, that might be the case for the next three days, but then I'll make sure that, you know, come Saturday or Sunday, I'm turning everything off. I've got some really dedicated family time, or like you said, you know, the mornings evenings are working out. So it's all about really making sure that you're being purposeful and intentional about how you're dedicating your time. So yeah, we're thinking the same way on all those points here. But to comment on that.

Steve Rozenberg  15:49
Yeah. Great. So let's, I'm going to turn it back on you now. like to know a little bit more, you know, tell me your investing career like give me some idea about like, let's just say the the first property you invested in just give me some rundown information on it that actually got you in the game of real estate.

Tony Robinson  16:07
Yeah, so I'm a relatively new investor. I purchased my first real estate investment, cash sharp, what you're doing right now we're in 2021, all of 2020, I bought my first real estate deal in 2019. So October 2019, I got my first deal done, I got my second deal in December of 2019. And then over 2020, I picked up five more properties. Wow. So really, really busy kind of year and some change for me. But I'll say I first kind of started thinking about real estate investing back in 2017. I tried to buy a house out of state that I was going to flip, and it was a short sale. And for whatever reason, you know, short sales took a long time to get done. And I had an offer accepted from the seller, it was like percolating its way through the banks approvals. And somehow my realtor and the big agent had a miscommunication. And that deal ends up going to go an auction, like, I don't know what happened. But you know, my agent missed some kind of deadline. So I'm taking two years off just to kind of, you know, continue to educate myself. And then I end up buying that first property out of state in Louisiana.

Steve Rozenberg  17:13
So okay, let me ask you this, and you live in California, correct? Correct. Okay, so, um, as you know, I'm big into mindset. What I'm curious about is if, what were the things before deal one, so when you're between deal zero and deal one, I'd like to hear what kind of things were going through your mind when you were approaching deal number one. And if you could go back to yourself, to teach yourself some lessons of what is not going to happen? And the fear that we talk about, right? Because I think a lot of investors, we can talk ourselves into and out of things, without ever leaving our chair, right? We, whenever we think of something statistically, 70% of the thoughts that go through our brain are negative. So whenever you think of getting into real estate, I'm curious how many of those negative thoughts that you had really actually carry through and became a reality? And how many were false? And actually maybe stopped you from getting moving forward sooner?

Tony Robinson  18:13
Yeah. So there's a lot to unpack with that question, right about like the mindset of getting to that first deal. I guess there's a few things that I'll talk about the the first thing that I'll say is that the purpose of the first deal, and when I had this mindset shift, Steve was when it became easier for me to actually get that first deal done. But the purpose of the first deal is not money. It's not returns, it's education. Yeah, it's about breaking down the fear associated with becoming a real estate investor. And I think once I had that shift, or that change in perspective, about getting the first deal done, it took all of this kind of weight off of my shoulders about trying to make the first deal perfect, because you got, you know, the 2% rule, this rule that rule and you're trying to check all these boxes, and it makes it a little bit intimidating, because you never find the right deal. So the first kind of big shift for me is understanding that even if I lose money on this first deal, even if I have to lose money on this first deal, it's still worth it, because I'm learning so much. And that's what's going to set me up for my fifth my 10th, my 20th deal. So that was the first thing. The second thing that I realized was, you know, it's easy to consume a lot of information. And it makes you feel like you're actually doing something, right. Like you read a lot of books, you listen to a lot of podcasts, you go to these meetups, you do all these things where you're bringing in this information, but it can quickly turn to busy work if you don't actually start taking action. And I knew that I was kind of falling into that trap. When I would listen to a podcast or I would read a book. And I already pretty much knew everything that they were talking about, like the new information that started to slow down. And that was a sign for me to say okay, Tony, I think you know enough to at least get this first deal done. And what I kind of shifted to after that was I can remember where I learned this concept but it's called just spend time learning where you you identify, okay, I've got this gap in knowledge, you learn everything you can, and then you start slowing down on the information until you've taken enough action to where you then need to go out and find more information. So those were kind of the big mindset things for me see if the I was going through as I got that first deal, though,

Steve Rozenberg  20:17
I related to where you can read a book on golfing as much as you want, until you get out there and actually get up on the tee box and start swinging the golf club, or any anything, you know, any analogy you want. It all means nothing, right? I mean, you can have all you can say, oh, that guy's feet is not standing his distance correctly. He's not as far enough from the ball, he said, because you know, from the book of how it should be done. But at some point, you got to get up on the tee box and start swinging and knowing that you know what, I'm going to get up there, and I'm probably not going to be very good. And I'm probably going to lose a lot of balls. And I'm probably going to miss a lot of swings. And you have to be okay with that. But what my question is when you're doing the deal, right, we all have to look at the end of the night when all the books are put away, and you lay your head down on the pillow. And the thoughts start going through your mind, right of what could go wrong? And what could happen. Tell me some of the things that were going through your mind? And did any of them come true.

Tony Robinson  21:13
And, you know, I guess I'm a little unique in that sense, Steve, and the fact that I just knew all along that, like, I could live with the worst case scenario, right? Like, I understood what the worst case scenario was, is I buy this property, you know, I fix it up and maybe I don't get someone and I don't get a renter. Can I carry the mortgage for six months or a year, and I knew that I could. So I was never really afraid of it going wrong, if that makes sense.

Steve Rozenberg  21:42
You kind of closed off all the exits. So all the bad exits you prepared. So you know, and that's exactly what you should do you prepare for them. And at some point before you go into battle, you may get the butterflies in your stomach, but you know, like, okay, everything is covered. I'm good to go into war, because I've got all my exits covered. I know what I'm doing. Could bad things happen? Absolutely. But it sounds like you were so prepared that you're able to do that. Now, you say you own seven houses now, is that correct?

Tony Robinson  22:10
Yeah, the portfolio changed a little bit. So I own four short term rentals. And I've had three long term or four long term rentals, we sold two of them. So right now instead of what six properties, but we're looking to offload most of our long term rentals and focus a little bit more heavily on the short term rental side right now.

Steve Rozenberg  22:27
Okay. So so far, what would you say is the best deal you've done? Can you walk me through a deal that you go, man, that was just a home run? And why?

Tony Robinson  22:36
Yeah, yeah. So there's kind of two I'll briefly touch on both of them, I kind of could do a deeper dive on one of them. But I would say my first deal was the most critical, because that's where I learned everything. It wasn't a home run by any stretch of the imagination, right? Very little cash flow coming off of it. But again, it gave me the confidence I needed to mental home run. Exactly. In that sense. Yes, mental home run all the way. And Steve was super critical is added. It gave me credibility with other people. Because when I posted about that deal, you know, I did this big write up on the BiggerPockets forum, I should across all my social media, and so many other people kind of came out to me afterwards. And hey, Tony, How'd you do that? How'd you make that happen? And it gave me the confidence to Okay, I really am now a real estate investor. So yeah, mentally, that was a big homerun. Financially, I would say my best deal so far was our first short term rental purchase. So we bought in the Great Smoky Mountains, Tennessee, Pigeon Forge, Tennessee, which is a huge vacation rental market. And we bought in August, early August. So you know, COVID was still kind of having its effects there. So we got a really, really good price. I want to say we paid 580 for it. It's a five bedroom, five bath cabin, this thing is going to gross, I don't know, maybe 120 k in the first year. We got it for 10% down. So very, very little cash out of pocket, relatively speaking. So the cash on cash returns on this one are going to be phenomenal. And again, that was our first short term rental purchase. So we not only financially we're doing great, but just from an educational standpoint, we learned so much about that side of the business as well.

Steve Rozenberg  24:12
So are you telling me where you're located? Are any local? Are they all remote investing?

Tony Robinson  24:19
So a little bit of both. So we've got short term rentals in Joshua Tree, California, which is about an hour and a half away from where I live. I have a long term rental in Shreveport, Louisiana, and then we've got property in Tennessee as well in the Smokies.

Steve Rozenberg  24:33
And are you looking to relocate all of your focus in Tennessee? Is that the plan for the short term strategy?

Tony Robinson  24:39
No, we got that we have short term rentals in Joshua Tree as well. We're gonna build out in both of those markets. I think once we get to a certain point, maybe five or 10 properties in each market, we'll start expanding a little bit more but for now, we want to leverage the teams in the process we have there to kind of hit a, you know, a critical point before we pivot somewhere else.

Steve Rozenberg  24:57
Got it now are you self-managing or using a property management company? How are you doing that?

Tony Robinson  25:03
The long term rentals, we had a property manager in place. For the short term rentals, we're doing that ourselves. And because it's almost easier to manage a short term rental from afar than it is a long term rental. And it's much, much cheaper, you know, a long term rental kind of property management company, I think we were paying 100 bucks a month. But on the short term rental side, they'll charge up to 30% of your gross revenue, it was much, much more expensive, so we didn't want to give up that much profit.

Steve Rozenberg  25:34
And so Joshua Tree, is that is that more for the military? Is that because I know that there's a lot of military there?

Tony Robinson  25:39
No, actually, it's a really big national park as well. So it gets millions and millions of people to come out to visit the park. And there's just not a lot of like hotel stays in Joshua Tree. So when people go out there, it's either short term rentals, or it's campgrounds or things like that.

Steve Rozenberg  25:55
Interesting. Interesting. So how, what kind of systems have you had to implement on the short term side, because there's obviously cyclical things that happened when tenants turn and things you got to do? What kind of systems have you implemented for the short term strategy?

Tony Robinson  26:10
Yeah, I'm a big systems guy. And I like checklists. And I, like you know, being able to have here's step one, step two, step three. So from a management perspective, it's not just me, so it's me, my wife. And we have a third partner. And we have literally an org chart with all of the different responsibilities, and there's, I don't know, maybe 20 different positions on this org chart. But you know, there's only three names that are going in, right. So I've got like four positions that I'm holding down, my wife's got two or three. So we were very intentional about setting this up as an actual business, even though it was just the three of us. And once we did that, it really, I think, kind of solidified, who's owning what, and then what are the steps that each person needs to do to be successful in that role. So that's the structure of it. And then in terms of tools, we have a property management software called Smart b&b, that automates a lot of the guests messaging in the guest experience, so that we don't have to do a lot of that on our own. We use pricing software called price labs, which takes in a bunch of different data from other airbnbs in the markets, we invest in and make suggestions based on you know, seasonality, demand, occupancy, and what our prices should be. So those two tools by themselves helped make the day to day management a lot easier. And then we've got cleaners and handyman in each market as well, that we communicate with to manage returns and guest complaints as they come up as well.

Steve Rozenberg  27:25
Hmm. Interesting. It's funny, you say that with the systems, I'm a big believer, you know, we prior owning a management company, and now with Mynd, I always tell investors, whether you own one property, or you own 50, you own a business. And, you know, one out of three landlords are in a lawsuit every year or some form of litigation, you've got IRS fair housing discrimination, property code, you know, you got a litany of laws and regulations protecting the tenant rights, and the one person who doesn't realize that the business is normally the landlord or the owner. And so, you know, just like you said, I tell people, you got to have an org chart, you got to have systems, policies, procedures, structure, they've got to be written down, they've got to be followed, they've got to be updated. And if you can't do that, then that's when you say, Okay, I need to hire a third party, professional, like a management company, to do those things, because you need to, you know, this is a lot of money at stake, it's a lot of assets, it's a lot of liability. And if you're not treating it correctly, and you're not staying up on all the fair housing laws, discrimination, you know, emotional support, animals, everything that goes on with that, you could be putting yourself in a very litigious situation that you don't realize, just because you're trying to save a couple bucks, now, I get, you know, 30%, but it sounds like you are doing the things correctly, where you're creating, you know, organization charts and policies and procedures, roles and duties. What's nice about what you're doing is you can look at those roles and say, okay, you know, what, what could I outsource? What, what could I systemize automate, you know, I'm a big believer in either automate it, systemize it or outsource it. And you'd be amazed at how much you actually could automate and systemize or outsource virtual assistants, whatever the case may be, to streamline. Because what we don't realize is a lot of times the biggest bottleneck and choke governor of a company's growth is normally us, we're normally the problem for the growth or lack thereof. And so sometimes, you know, we have the Superman hero. It is that we think we should do it all. We're the smartest people, it's my property. It's my this is my that. And I tell people, the property is four walls and a roof. The business model running inside those four walls in the roof is what's gonna get you the return to get you the goal of wealth and ROI and all that the four walls and a roof is still gonna be there 20 years from now. And I've seen like I'm sure you've heard stories, many people run four walls and a roof right into the ground because they don't know how to run the business that's running inside of it. So I'm very, very impressed that you're running it like a business because it's very, very few. And I'm sure on the real estate rookie podcast show you hear as well. Very few people say that they're running it like a business the way you are, so you should be proud that you're doing that.

Tony Robinson  30:03
Thank you, Steve. I appreciate that. And, you know, it's the E myth, Michael Gerber. Right, just like literally understanding what that really means and applying it. But you also made another point that I want to highlight about the business owners being kind of the ceiling for the business. And I think John Maxwell calls it the law of the lid, where the business is only going to grow as big as the person that's in charge. And well, you know, I was lucky enough to kind of read that book early on, and really understand that I don't want to be the bottleneck for my business. So it's really about surrounding myself with the right people to help me move it in the direction that it needs to go. And I think it was, what's his name, Dan Sullivan, he just put out a book called who not how, and I think he was, he was interviewed by Brandon, and those guys too. And that book is another critical piece about building the business, because it's not about what you know, or what you're capable of doing, but about who you can identify to fill in the gaps in your business that help you continue to grow.

Steve Rozenberg  30:54
Yeah, absolutely. And I always, you know, whenever I've helped people or work with them, or you know, talk to investors, whatever they are, I tell them, you know, what, the biggest challenge I think we have as investors is number one, we don't understand that we're running a business. And number two, we don't realize that we actually need to be the most accountable of the business. And so when you when I ask people, you know, when you're running a business, and you know, you've got people, real estate agents, contractors, and you hold them accountable. My next question is, who holds you accountable? Who do you answer to? And normally, they say, I don't answer to anyone. And I tell them, that may be the problem. That's why there's no growth, you're not accountable. And you're actually the most responsible person for the success or failure of this business, that everyone is relying upon you doing your job, but you're busy doing everyone else's job, not doing what you're supposed to do. Because you're so busy trying to be the hero and you don't realize you have a role, a job and a duty. And if again, that's what a good leader is. So I completely agree. I've learned that from growing businesses and you know, reading books and everything, and I completely agree not to get off on that whole tangent but let me ask you, when it comes, we keep going off on tangents. And in 21, coming up like what are you seeing the best market for what you want to do short term rentals as well as people looking for long term rentals? I mean, I know you and actually have a lot of people on the real estate rookie podcast show. What kind of trends are you seeing in cities?

Tony Robinson  32:22
For us in the short term rental space, we still have a lot of confidence in the Smoky Mountains areas. They had really, really massive fires back in 2015, or 16, I want to say, and they lost a lot of inventory of cabins. And they actually haven't even built backups, the levels that they were at in 2016. They're still trying to play catch up from those fires. So there's almost still a shortage of vacation rentals in that market. So we're really big on that market. Joshua Tree we love as well. Another National Park. We're also looking into Destin, Florida is another good one. Here in California, Big Bear Lake, California is another big one. So we'd like markets that have a natural draw to them. There's a really mature vacation rental market there already. Because we don't have to compete with hotels or we don't have to worry about local city regulations kind of souring on short term rentals, because they are such a critical part of that local economy. So we want to kind of hedge our bets against policies in that way. In terms of like the long term rentals, Steve, I think it's, if you're worried about getting your first deal, I won't say that the market doesn't matter. But what I will say is that where you buy your first deal, has no bearing on where you'll buy your second deal. So say that you buy your first deal on the market, and you end up hating that market, then you just exit the market, and you go find another market that makes more sense. So I feel like you know, I've met people that have spent months trying to figure out where to buy their first property, I'm like, you're thinking about it the wrong way, pick a market go in, get started. And if you don't like it, move on to somewhere else.

Steve Rozenberg  33:59
You know, it's funny you say that. My story, if you know, my book that I wrote and talked about is that, you know, at one point, my business partner and I, we had about 40 properties, and they were not good properties for us because we were trying to run them hands off. And they were low income properties, which are very time intensive. And we're trying to run them very hands off. And it just wasn't working for us for whatever reason. We were too emotionally attached. We weren't running it like a business. And it was just killing me because I could not figure out you get that tunnel vision. And you're so focused on trying to fix the problem. All I was trying to do is fix the problem and prove that I could fix the problem. So there's ego pride, which are the two worst things you could have in any business. Because the data and everything was telling me that it wasn't working at kind of a funny story now it wasn't funny at the time, but my wife actually said the next property you buy better be nice because you will be living in it because you suck at buying houses. You are not good at doing this and I'm like I can fix it. It was like, every time we bought another property, it was like gasoline on the fire. And it just kept exploding in our faces. And we couldn't figure out why it wasn't working. And in hindsight, it was very clear. And you know, what I always tell people is, at some point, I was talking to someone. And he said, Steve, why don't you just sell the properties. And this is back in 2010 2009, when their market was at its bottom. And I said, I can't sell them, I'll lose money. And he kind of smirked. And he said, What do you think you're doing every month? He goes, it's like you're killing yourself with a spoon. He says, just rip off the band aid and get rid of them. Because and this is the biggest point that I'll tell people, you know, when you have 30, 40 properties that are basically bleeding you dry. It's the mental strain that I would not want to wish upon anyone, because when you go to bed at night, and you're thinking, how am I going to pay these mortgages? What am I going to do? Now I had a job as an airline pilot, my business partner had a full time job. So we were able to support them by coming out of pocket, which is not something anybody wants to do. But if I didn't have those jobs, I most definitely would have lost them, probably to foreclosure. And I tell people, it's not the money. It's the mental strain. That to me was the worst part that I would not want to wish on anyone. So you know, it's one of those things. It's some point, all of a sudden, once the guy told us, like, just sell them, it was like all of a sudden was like, Oh, yeah, like, and so some properties, we actually went to closing and we brought a check. The house was probably like a $50,000 house. And we brought a check for like $8,000, right? Do the math. And so all of a sudden, we were the happiest people at the closing table, because it was no longer our problem. Because that mental hit the investor was happy because he was getting a great deal. And I always tell people, that investor went on, he bought a couple from us, he had the business model that worked for those properties he made those properties work for his business model. So I what I try to explain to people is, we lost money, same four walls and a roof. He made money. What was the difference? The difference is he had a better business model wrapped around that structure of what those properties were. And so had we hung on to them and got more and more tunnel vision and never sold them, we would have taken them right into the ground. And so you're so right. That's the biggest lesson I could tell people. If it is not working just like a stock of a stocks losing money. At some point you go, you know what I'm gonna cut bait and sell and walk away. Real estate is an asset class just like stock. It's a mathematical equation. And once the mathematics are not working yourself. And it's hard because I think we live in a house. And I think that's the part we have a hard time. It's like I live in a house, how can I get rid of it? I'm in my house for 10, 20, 30 years, how do I just get rid of this? And it's hard to separate those two, I think is the biggest challenge

Tony Robinson  37:46
And see if I can add right, because you mentioned at the top of the show about understanding the why behind you knowing why you're purchasing a property. And I would say See if even if you're making money on that, if it was still such a drain on your emotional mental well being it probably would still make sense to sell right? Because I'm sure you didn't get into real estate investing to drain yourself mentally. And emotionally. You got into real estate investing because you want it to enhance your life. So you know, people just need to keep that in the back of their minds as well.

Steve Rozenberg  38:13
Absolutely, absolutely. Well, Tony, what one last question for you, give me your crystal ball for 2021? What are you seeing? I mean, I know you're in the know with bigger pockets and all the people give me your best guess for 2021? where's this going? Where? Where do you see the light at the end of the tunnel for investors?

Tony Robinson  38:32
Yeah, you know, I think I think a lot of people got scared, Steve in 2020, because of the pandemic and they were afraid to kind of move forward. But I met a lot of people who grew their businesses exponentially during 2020. And I guess my one piece of advice to people would be, maybe don't even try to predict what's going to happen. But take each decision as its own kind of unique situation. And if the numbers make sense, who cares? What's going to happen? You know, because we can't predict in any way if the numbers make sense to do it. If there's a deal, and you run the numbers, and you sanity check, and it makes sense it matches your business model, do it. Because so many people sat on the sidelines all 2020 because there's a lot of questions about should I invest? Or should I wait, should I invest? Or should I wait? And my thought process is if you're investing for long term wealth building, what happens in the next, you know, 6, 12, 18 months is irrelevant, because you're talking about investing for 15, 20, 30 years. So who cares what's gonna happen in 2021? So my advice to those folks is just jump in, do it make it happen?

Steve Rozenberg  39:37
Yeah, I agree. And and the only caveat I would add is make sure that you know that you know, when you do buy one, make sure you know your goal. Make sure this property matches the strategy to get to the goal and make sure the tactic is correct. And I'm a big believer in mapping it out before you leave the house so that you know of where you're going so you know which freeways to take in the right direction. So, Tony, it was a great time to I really enjoyed it. You're definitely better than Ashley. It really is good to talk to you and I really can appreciate the way you think and your thought process on a lot of things. And I think you're going to be very, very successful and how you're doing it, I would say, you know, just keep that grind going. Keep doing what you're doing and don't you know, reinvent the wheel. It's pretty simple on how this works, right? Copy, Paste, repeat, copy, paste, repeat. If somebody wants to watch you guys on the Real Estate Rookie podcast show, well, how do they find you?

Tony Robinson  40:34
Yeah, so just head over to BiggerPockets.com/rookieshow, enter a random number, you'll find one of our recent episodes, but we put out new episodes every Wednesday. If you guys want to connect with me personally, on Instagram at Tony J. Robinson. You can also head over to alphageekcapital.com, we partner with other investors to help them get started in real estate investing in short term rentals. And you know, it's not a coaching program, but it's actually a partnership program where we say hey, we're gonna come in as partners to take down a short term rental deal. So if you guys are interested in that alphageekcapital.com.

Steve Rozenberg  41:09
Alright. And if you go to the Real Estate Rookie, I've been a guest on there. I think two maybe three times had Joe Roberts who is the mind $20,000 winner, where I coached him, he bought a property in Atlanta, Georgia, living in North Carolina, we bought a property we found identified the city found the property, closed on it, rehabbed it got a tenant and then he deployed because he's a marine. He's never seen the property. He's out on deployment for the next nine months. We got it rented Mynd's managing it, and it worked well. You can watch on Bigger Pockets, the episode about that, as well as Joe and I on the real estate rookie podcast show. For those of you that want to know more about Mynd Property Management, go to our website, mynd.co. It's mynd.co. There you can see all the videos, all the content, all the education, as well as if you want a free consultation mind is over in 20 markets nationwide. So if you want to invest in a city, chances are we are probably their state of the art technology with our software proprietary, we can help you find it. We cannot be close it we can give you insurance on it, we can help you get a loan on it. Mynd is basically a one stop shop for all the investors that want to have that opportunity or just bits and pieces of it. So head on over to our website at mynd.co. Again, I'm Steve Rozenberg with the Myndful Investor podcast show. On behalf of Tony, myself and Mynd Property Management. Thank you everybody for watching. We will see you next week again with another Myndful Investor podcast show. Talk to you guys later. Bye bye.

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Meet Tony Robinson

Tony Robinson is well known in the world of real estate investing as the host of the BiggerPockets Real Estate Rookie podcast (over 2 million downloads). After starting his investment career by purchasing single-family homes as long-term rentals, he found the tremendous opportunity that short-term rentals provide, and has since focused 100% of his efforts on growing that part of his business.

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