Airline pilot Ryan Harrison owns and manages his property from Guam. How does he do it?!

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Transcript

Alex Osenenko: Hey, I just want to say hi to Dan. Dan, for you… Dan is our producer, Ryan. Dan, for you, we’re going to vary the introduction today. I’m not going to say hello boys and girls. I’m going to say something else. Well, hello my dears. Welcome to the next episode of The Myndful Investor Podcast Show, I am Alex Osenenko here with my hero and cohost Steve Rozenberg. Steve, how’s it going?

Steve Rozenberg: Good man. It’s going good. Thanks for having me. As always, I appreciate being here with you.

Alex Osenenko: That smile, that determination, you probably woke up at 4:00 AM overachieved at the gym this morning.

Steve Rozenberg: I did. Yeah, it was a good day, man. You got to grind it out, right? Nobody cares. You just got to do it.

Alex Osenenko: And those of you who are watching the video, you will be rewarded with Steve’s clean shaven, beautiful, so shiny face. He’s extremely shiny today, so hopefully he’ll deliver-

Steve Rozenberg: I’m glowing. I call it glowing.

Alex Osenenko: Glowing. That’s right. The kind of audio experience we’re looking forward to, but today we’ll unpack, this is Season Two, all about single-family investing. Today we have a great guest and our topic today is how to have a career and own investment properties long distance. Steve, why don’t you introduce Ryan, he’s your friend. You guys go way back.

Steve Rozenberg: Yeah.

Alex Osenenko: Talk about Ryan and let’s welcome him into the show.

Steve Rozenberg: Yeah. So Ryan Harrison, a good friend of mine, also an airline pilot, and I thought he’d be perfect for this because, not only have we known each other, he owns properties, actually owns them in Houston, he’s from Colorado originally, lives in Guam where I used to live and fly out of, he’s flying out of Guam. He actually bought from my bookstore, he actually bought a one or two of my rental properties, which we won’t go into too much and experienced the same dramas that I went through.

Steve Rozenberg: We’ve got some good, good stories, good history. Ryan’s seen the evolution of real estate and he’s been evolving and growing and doing some buying and selling and some diversification of his portfolio, so it’ll be good to talk to him about that. So without further ado, Ryan, thanks for being on the show. I know it’s like 3:00 AM for you, Guam time, so appreciate you being here, man.

Ryan Harrison: Yep. 3:00 AM Friday morning. So I’m in the future. So what would you want to know?

Alex Osenenko: Oh yeah. What’s WeWork stock’s going to look like? Oh, too soon. Too soon.

Steve Rozenberg: Too soon.

Ryan Harrison: Oh, no. Stay out of stocks, just buy single family homes and other real estate.

Alex Osenenko: Oh, that’s our show folks. Hey Ryan, tell us how you got into the real estate. It’s crazy, Steve got you into it. What was the first… What was the notion? What stage were you in in your career, in your life that you said, “Oh, I should buy a home, investment home?”

Ryan Harrison: Well, it’s something I had an interest in. My very, very first home that I bought was obviously my primary home, but when I bought that one, I bought it on a short sale. So that was my first, I started dabbling into that stuff and I tried to apply some things even down to the purchase of my own homes. So that’s where I really got the start of it, but didn’t have all the education, I had read Rich Dad Poor Dad, read the Donald Trump book and stuff like that.

Ryan Harrison: So there is that initial seed that was planted. And then, obviously Steve and I, the rest of the country and the world, we witnessed and saw 9/11 and what that can do to an economy and a person’s personal stocks or whatever. And then just from an airline point of view, you have Steve and I, every six months we have to go do medical and stuff like that. So if you lose your medical or you lose your livelihood or some events happen, you want to have that backup plan.

Ryan Harrison: So I started along those lines thinking like that. At one point also, I saw… So my father, he was a master electrician in Colorado and ended up having to go to other parts of the country because when construction is good, life is good. And when construction goes down, things get a little bit tight. So I saw also that stress of money, and that’s the one thing I never wanted, was the stress of money. I didn’t necessarily need or want to have all the money per se.

Ryan Harrison: But I just never wanted to have the stress of it because part of that was I saw he had to take care of my mom. She got really sick and had a pretty rare disease and whatnot. And so I just, like I said, saw that initial stress. Then I really dove into finding other streams of the income within the real estate.

Ryan Harrison: And then I happened to meet another pilot. He was at Continental at the time and, he’s unfortunately no longer with us, Steven would probably know him also, first name Jim, but he gave me a little email address and website and phone number and there was this mentor group and in Houston. So then that got me on the right path and accelerated me forward in what I needed to do and put me on-

Alex Osenenko: Ryan, what kind of, sorry to interrupt, what kind of support group? You’re talking about real estate group? What was that about?

Ryan Harrison: Yeah, it was a real estate group, Steve had gone through the same one. I hadn’t met Steve yet. And then… So I did that, got on to learning with all of that. I focused on, when I initially went through that initial training with that place, I focused on the single family side of stuff because at that time in Houston, you could pick up properties, I mean $50,000 to $80,000 and you could get the rehab financed into the deal-

Alex Osenenko: Had you had a notion of C property, B property, A property at that time? Because according to Steve’s book, in those days a 50K home was more of a C home in a rougher neighborhood where it was tough to find reliable renters and even those got broken into and there was just issues abound, but have you thought about the investment strategy at that time?

Ryan Harrison: A little bit. I still dabbled into it at, to be honest in Houston at that time, you could go into those exact properties like what Steven mentioned. But my very first rental home, I bought it for just over $70,000 and it was literally maybe 10 minutes away from my primary house and in a very nice solid blue collar neighborhood.

Ryan Harrison: I regret selling that house to this day just for sentimental reasons. I did take a fair amount of equity off the table with that and… I actually sold that to a friend of mine, worked out a deal and packaged a few homes and sold it to him. Another friend that was trying to get into the real estate, and so I had sold three or four of my properties to him.

Alex Osenenko: Why is that all? What was the motivation? Okay, so you had these properties produce an income presumably, right? Why sell? Were you getting in a different asset class.

Ryan Harrison: Well, from there I ended up changing my goals and trying to progress forward. So part of that mentor group I went through was, “Okay, do the single family, get X amount of homes and X amount of income or equity capture, and then roll them, do a 1031 Exchange into a multifamily.”

Ryan Harrison: So what I was doing was, I had brought together a group and there was going to be four of us, there’s going to be four investors, and we were looking at a multifamily property and I was going to do a 1031 Exchange and roll all that stuff into that multifamily property. That deal fell through, we found where the owner was maybe cooking the books a little bit and exaggerating on a few things. And so we said, “Hey, we’ll still buy the property from you but you need to come down because your value is not as high as you think it is.”

Ryan Harrison: Then since that deal fell through, I ended up 1031-ing, I think it was two out of the three or four properties, yeah, two out of the three. I just was trying to do part of that natural progression and then try to capture the economies of scale and then, maybe at that time too, a little bit of it was ego-driven.

Ryan Harrison: You want to set that next level, set that goal and, you get a taste of it and you get on the ride of the real estate and it’s fun. And it also, that particular apartment, it was going to be a motivating thing, turning that thing around and providing a nice product to the people that were going to be staying there. That becomes part of it too. It’s interesting.

Alex Osenenko: Got you. So single family for you was a stepping stone towards more of a multifamily property you can turn around and have it outperform, overperform the current state and make [inaudible 00:10:30]-

Steve Rozenberg: I think what he was saying is, let me just interject here, the group that he’s referencing is the same group that I was a part of, that I had learned about apartments and bought an apartment complex in. And that’s the mode or model that they teach and encourage. And so you get caught up in that. Thinking, “I need to own a multifamily” and I don’t know what Ryan’s experience was, but when you have a multifamily, yes, it’s great. You can add a lot of zeros to the front end, but you also have to add a lot of zeros sometimes to the backend when things go wrong.

Steve Rozenberg: And so sometimes you’re dealing, when you’re making an acquisition of a multifamily, it’s a sophisticated investor. They don’t have to disclose everything where a single family they do. So it’s basically buyer beware and it’s on you to figure out if they’re cooking the books, if the numbers are wrong, if it’s running on pro-rata, those kinds of things. And Ryan, I don’t know if you… It sounded like you were going down that path, but then maybe you reversed and started beefing up the single family again or what happened with that?

Ryan Harrison: What I’ve basically done is, and then you guys can ask the questions around, basically what I’ve done is I had those 12 single family homes, I took the equity capture out of seven of them and then I put them into, I got three apartment deals now. But I still have maintained five single family homes that I manage, and I manage them here all the way from Guam. And then I also manage four properties here on Guam for a friend of mine, another pilot that’s no longer based here, but I manage those for him. And so I make sure I maintain my real estate professional status, et cetera, for lots of reasons.

Ryan Harrison: The thing that I do enjoy with the single family is, it’s nice, it’s steady Eddie money. And the one thing I will say as far as managing the properties, it’s having that team in place, even though it’s a single family home, you still want to make sure you got that team. I have had… I’ve been lucky, I don’t want to say lucky, but I’ve been blessed because I put the work in and not so much luck per se, but the same tenants on average, they’ve been with me five or six years in the same houses. And so I tried to take care of them, provide a good safe product and good customer service.

Ryan Harrison: That’s a big thing. Good communication, checkup on them and stuff like that. And again, I had consolidated to my five newest properties and they were maybe a little bit more expensive per se in the Houston area, not super expensive. When I say that they’re not your, those deals, Steve, that we were getting back in seven and eight, 50 60 70 grand there, I purchased them maybe at 150 at the time, 150,000, which at that time was a little bit above what you wanted to shoot for, but man, the equity’s been good and the way I’ve done them, and some still cashflow and, 3 to 400 on each one a month. So that’s still good and it’s a higher rent that I have to shoot for, but it’s also been, especially with me being here on Guam, it’s been a little bit less hassle to deal with this [crosstalk] turnover and stuff like that.

Steve Rozenberg: Yeah, it’s funny, when Pete and I had our properties, the low end properties and… Alex, 50 was high for us. We were buying them in the 30s. One I think I bought it for like 28, it needed a little tender, love and care, but that just gave me an idea of price points that we were at. 50 was an expensive one for us back in the day.

Alex Osenenko: You know, sorry to interrupt, there’s one thing I hate when I listen to a lot, I listen to BiggerPockets and other podcasts, and they’ll say, “Well, I bought those home for 30,000.” This doesn’t exist anymore. We can’t talk about [inaudible] talking about this, who buys a home for 30,000? Of course, I would buy it, but now it’s like 220.

Steve Rozenberg: The problem is when you get a house for 30,000, 40,000, 50, whatever it is, the price point, you think to yourself, “You know what, I’m so positive in this thing. The mortgage is nothing, and I can make so much on the cashflow.” And you think there’s no downside to that. You think, “Man, I can hold this for six months empty, and the mortgage is like 300 bucks a month. I can do this all day long because it’s making 400 a month when it’s rented.”

Steve Rozenberg: The problem is that you don’t take into account the high maintenance costs of the properties, the high turnover of the tenants, very high turnover because that level price point of people that are making that kind of money, that are renting those properties are month to month type people.

Steve Rozenberg: So they’re very transient and when they leave, they take a lot of gifts with them. So now, you don’t have a basic make-ready and they don’t… I don’t know how you could be hard on a house, but I remember going in and seeing broken toilets. Like the toilet bowl was broken in half and I’m thinking, what could you possibly be doing to a toilet bowl that you’d break a porcelain bowl?

Steve Rozenberg: But my point is that it wasn’t just a couple of $100 turn, it was thousands of dollars. So all that cashflow that me and Ryan made was gone back into the make-ready to get it rerented for another eight or nine months, where you pay a little bit more like Ryan said, and I completely agree with him, you’re paying a little bit more, which it’s all relative, this is Houston price points, I’m paying 160 to 200 now for my rental properties, but now you have a tenant that’s going to stay long. They take care of the property, they don’t complain about stuff. And especially…

Steve Rozenberg: Ryan, where I was going to ask you is, is that why you think that you’ve been able to self-manage because you’re in Guam, number one for people that don’t know, Guam is on the other side of the time zone, of the Dateline. Like right now it’s Friday morning for him. So if somebody calls him in the middle of the night or the middle of the day, it may be middle of the night for him. He can’t-

Ryan Harrison: Friday, early morning.

Steve Rozenberg: Yeah. And so you’ve got a time zone issue. I caught that, what you said, by the way. You’ve got a time zone issue and so if he had all these old smaller price point rentals, you probably couldn’t do this, what you’re doing, is my guess.

Ryan Harrison: Yeah. I was doing it but it wasn’t, it wasn’t always a… It wasn’t that it was hard, but there would always be these little things that you’d have to help manage the people through sometimes like, “Well, this just happened.” And again, those are slightly older homes. So I put in new AC units and this and that. But those price points too, sometimes the people are working very hard. They’re working maybe two jobs, let’s say. And so they don’t always get around to getting to the hardware store and buying a new filter for the AC units. So they don’t maybe think about that stuff. And I get it. They’re renting.

Ryan Harrison: I ran into some of that stuff, so it was just like a little bit more to deal with, but still I was able… And going back to having a team, the thing that helped me out and still does it as day is having a team in place. And I, at least in Houston, and I don’t know about your experience Steve or Alex, but the number one team member for me is my AC guy. I don’t even ask him what the prices are. I just have him do it. And matter of fact, I tell my tenants… Matter of fact I just rented out one of my other properties, brand new tenant.

Ryan Harrison: First thing I’d tell them when I’m showing them the house and everything like that is… And they signed a two year lease, that’s the other thing. It’s like sometimes nowadays they want to lock in a price, and depending on what it is, “Yeah, okay. I’ll give you two years.” But the number one person to have on the team, in my opinion, is your AC guy. I tell the tenants, don’t call me, call the AC guy directly. That’ll be your number one issue that’ll upset your tenants and get them going. And it seems like, at least in Houston, if you’ve set up the property correctly in the beginning, that on occasion, since it’s a mechanical device, it’s going to be the one thing that always goes out.

Steve Rozenberg: Non-stop. Yeah.

Ryan Harrison: Yeah.

Steve Rozenberg: I got a question, Ryan. You said something earlier and I know what you meant, but I think we should expand on it. You said that you keep your real estate professional designation because of so many properties, and this is important because you being an airline pilot and tax bracket and all that, it’s a huge benefit. So can you explain what that means for people that don’t understand a real estate professional and what benefits that actually gives you? Because I think it’s important for people to hear that.

Ryan Harrison: Yeah. You don’t want to make obviously investment decisions a hundred percent based on tax incentives, but when they’re there and you can do them, you definitely want to be a part of it. But a real estate professional, basically there’s specific IRS rules to it and to just touch base on it, it’s like you’ve got to have 750 hours of active real estate time. And so if you have five plus properties on average, you can make that work and fit in.

Ryan Harrison: And then plus with other stuff I do, you got other types of education, other types of activities, networking or other events that you go to that all apply to that. And like I said, I’m also managing properties on Guam for other people, and so that keeps me busy as well. So it starts coming to where you can start protecting, not only your passive income from the real estate, but then also into some of your earned income, which these days, it’s… If it’s there, you need to do it because it’s part of the tax rules and laws and that’s what the government wants you to do.

Ryan Harrison: [inaudible 00:00:21:05].

Steve Rozenberg: Yeah. They are tax incentives, right? If you follow what the government wants you to do as far as the tax rules and laws, then you’re able to make money. And every country has basically the same type of rules that we do. And so they’re tax incentives and you had a look at the government in a way as they’re part of your partnership, whether you want them or not, they’re there and they’re part of your partnership. And so if you follow along and play within the rules that they designate, it’s not real estate people going off and making our own stuff up and doing anything that’s crazy or shady.

Alex Osenenko: So you’re not gaming the system, but you are understanding the system and using the system and the incentives that the government designed for whatever, enabling housing for people. I’m sure there are programs that are specific to this. Then you can, I guess, write off some of the expenses you deal with renovations and stuff off of your income I suppose, but do you have a tax professional or do you go research these things yourself, Ryan?

Ryan Harrison: No, I have, part of my team, I have a tax professional that handles all of that.

Alex Osenenko: Let’s name your team, like what kind of team? People are sitting right now thinking, “Okay, I’m going to get into my first house, maybe I already have my first house. Maybe I have two”, you keep saying team, which is great. That’s a recurring theme we get through bunch of interviews we’ve done, is like, “Hey, I have to have a team.” So who are the team members? You already mentioned your AC guy, number one. What else? You got tax advisor?

Ryan Harrison: Tax advisor, got lawyer for LLC, legally make sure everything is protected, you start thinking about that stuff, you have a family and stuff, Steve, he’s seen pictures of my daughter and stuff, I help raise my nephew and stuff. All of a sudden you have those extra entities within your family and so you want to make sure you protect that.

Ryan Harrison: So get the LLC lawyers involved and make sure everything is on the same page. And what I’ve done too is I’ve made sure that my LLC lawyer also talks with my accountants. So they’re actually a part of the same group. I mean they’re separate companies, but they work and network together. So I’ve tried to ensure a part of that-

Alex Osenenko: Sorry, just to clarify here, is your tax advisor same as your accountant or are those two different people?

Ryan Harrison: Two different people.

Alex Osenenko: Got it.

Ryan Harrison: Two different people, but they network together. I met them, I went to a… I’ve done it twice now, but I’ve been part of a group where Robert Kiyosaki himself, he shows up and I started listening to him, he’s obviously one of the first books I read, but then I started really listening to one of his key points and he said, you got to have that team also. And he spelled it out very directly and he actually gets into having a bookkeeper as well because then you’re taking the emotion out of your numbers.

Ryan Harrison: And so my main… That’s my next step, and that is instead of doing some of the book work myself, I’m going to have, starting January, 2020 I’m going to have a bookkeeper start taking care of my other stuff because I’ve gotten, like I said, the multifamily stuff and the single family stuff has allowed me to elevate into that. It’s also elevated me into some oil exploration and saltwater deposit type stuff.

Ryan Harrison: So the single family became the foundation to what I’ve tried to bring forward and into my goals and build on it. But the foundation has been the single family homes and then I’ve maintained them because like I said, they’re that steady Eddie, very conservative. I don’t have to worry about the stock market per se with the single family homes. So that’s part of the, going back to your question, that’s part of the team and why I’m doing it.

Ryan Harrison: And it makes it easier because then it allows you to focus on the next goal or the next single family property or whatever it may be. And then you’re able to look at the whole forest instead of just the one tree and you can say, “Okay, where can I go with this next, and how?” You just put it in there next to the other ones and introduce it to your team members. And then it’s taken care of.

Steve Rozenberg: I think what it does too, from what I’ve learned, is that it gives you clarity to think about other things, but you still have a career, you’re still an airline pilot, you still have your life, your free time, you’re spanning the globe of real estate, whether in Guam and then in Houston, so it’s giving you clarity of not doing things that, number one you may not be good at or don’t like, you’re putting it in the hands of people that know what they’re doing.

Steve Rozenberg: Because even if you liked doing accounting and bookkeeping, if you were bad at it, it would still be the same result of you getting an audit because you don’t know what you’re doing as opposed to saying, “You know what, I’m going to hand it to someone else. Let them do it. Let them advise me on their experience so that I can go do other things.”

Steve Rozenberg: And I think it’s smart what you’re doing. Let me ask you this, how many hours a week, you’ve got five properties, let’s just say single family, and then you’re actively managing another four or five in Guam, so eight, nine, ten properties, how many hours a week do you think that you are spending dealing with that these properties, if you had to guess?

Ryan Harrison: It varies. If I factor in everything, probably looking at, on average, and this includes all the drive time and stuff like that, because I do when I go back to Houston, check on them and stuff, because I enjoy that stuff too. I guess on average, certain times a year it’d be more busy, but I think on average maybe 10 to 14 hours if that, you’ve got your busier times when you’ve got a bigger [crosstalk 00:00:27:35]-

Steve Rozenberg: You’re going to be on the… If you ever got a vacancy or an issue going, I get it. But on average you’re looking at maybe two hours a day at the most if that, and then some days they’re bulked up where you’re dealing with something all day. But I think that’s something for people to understand, that you can own properties and you’re owning them, spanning the globe really, like I said, and you’re able to do it two hours a day and have them taken care of, get a lot of passive income, get the equity in the properties, you’re getting a deep…

Steve Rozenberg: You’re able to get the tax benefits off of your W-2, which a lot of people don’t think about, which is very valuable and it’s giving you the ability to do other things. I know you do some charity work, and so it’s giving you the ability to do the charity work that you do and you’ve got something you do in Houston and then something you do in, is it Cambodia or where is it?

Ryan Harrison: Yeah. So it’s enjoying the travel and stuff like that, because again, you want to get out and see the world and that’s what the single family stuff is initially to provide that extra income to go travel. So I’ve been to Cambodia five times. The first tuk-tuk guy that I hooked up with, we became really good friends. Awesome guy. He’s met my family and everything like that. And I’ve been to his house out in the middle of nowhere in these beautiful rice fields and stuff like that.

Ryan Harrison: His sister, she was riding a bike back and forth one direction, 45 minutes to school, riding it back home and it… Cambodia is very, very hot. And then she would come home, get cleaned up, eat a little bit, and then she would ride her bike 30 minutes to another village and she would help and tutor kids in that village. And her English was very, very good. So I ended up buying her a scooter, motorized scooter initially, so she could get back and forth quicker and then have more energy to focus on her studies and then also have that time to help out the other students.

Ryan Harrison: Then she went to an American college there in Cambodia and I realized she’s a little worried about not being able to attend that and this and that. And I basically just told her, “Don’t worry about it.” And so between myself and then she also picked up a scholarship as well, so she’s been doing really well. Matter of fact, I think she graduates here this December and then the ceremony is going to be this next April. So she’s already knocked that out.

Ryan Harrison: And then also in Houston with the multifamily partner, Rockstar Capital, Robert Martinez, he puts together a great breast cancer walk there every year in the October in Old Town, Amble there, literally shuts down the streets. The police come out, some of the local vendors like Chick-fil-A, some of the local, what’s that doughnut place there-

Steve Rozenberg: [inaudible 00:30:48].

Ryan Harrison: Yeah. They come out, stuff like that-

Steve Rozenberg: I don’t eat it. I just know about it. So for the record-

Ryan Harrison: Yeah. So it’s a nice community thing, but he gives back in that sense to the breast cancer because because all these books that you can read, whether it’s Robert Kiyosaki’s, I’ve also read the Rich Dad Poor Dad books, also Think and Grow Rich by Napoleon Hill, where he’s basically doing a long several-year interview with Mr. Carnegie.

Ryan Harrison: And then also, what’s the other book… Anyways… Donald Trump’s, even Donald Trump’s books, I know people love him, hate him or whatever, but always somewhere in those books they always say once you get to where you’re at a successful point and you’ve taken care of yourself and your family, you need to make sure you give back.

Ryan Harrison: So that’s also… I’ve tried to make sure I complete that circle and, it sounds hokey, you read that stuff in the books or whatever and it actually feels really good to be able to do that and it just adds to everything else in the bigger picture of what you’re doing.

Alex Osenenko: Can I get back, Ryan, this is fascinating by the way. Finding what you’re passionate about and investing in other people. I really like the fact that you’re doing this thing in Cambodia for a particular person because that must be… Because when you give to a group you don’t always have a direct influence on the impact.

Alex Osenenko: This must be super rewarding to have actual serious investment return via this person getting educated and you being a large part because of her success in the future. It must feel incredible. So I commend you for that. But I want to get back and really try to give our listener a couple takeaways, like we started on this team thing, we went on a tangent I want to get back to the team thing if that’s okay. I have written down a C Guy lawyer, tax advisor, accountant and bookkeeper. Seems to me very. Is bookkeeper and accountant two different people?

Ryan Harrison: Yeah. Two different people. It could be the same, but the bookkeeper’s going to keep track of your day to day stuff. The accountant is going to be more on your taxes and focusing on the tax laws whereas the bookkeeper’s going to be more general. And again, Robert Kiyosaki, he’s hardcore about that stuff. He won’t do a deal with somebody when he asks them, “Who does your books?” And they say, “Oh my wife does it.” Or whatever. He’s like, “Nope, I don’t want to do it.”

Ryan Harrison: Because you want to say, “Show me your balance sheet.” And he doesn’t want to hear that your wife or your husband’s taking care of the books because you have that emotion involved. He goes, “A bookkeeper’s just going to tell you straight up, this is what it is. This is where things are at.” And then also, it’s going to make it easier when I hand over the information to the tax accountant as well.

Ryan Harrison: And then that in turn is going to make your tax returns not only more efficient from my time, but it’s going to give them all and any additional information that I maybe forget or overlook or lose sight of. The bookkeeper will have that involved as part of the report. And then so that’ll make it that much easier for the accountant to do a better tax return for you.

Alex Osenenko: Who else is on the team? So I have five entities right now. Who else do you have, do you have anybody else?

Ryan Harrison: I’ve been very blessed over the years. And out of all seriousness, a lot of it, Steve and I, we tease each other pretty bad, so we have a good time.

Steve Rozenberg: You might bother me, but I’ll take it.

Ryan Harrison: Yeah. But Steve’s been a… I’ve been lucky to have a guy like him around as a mentor.

Alex Osenenko: A mentor. Okay.

Ryan Harrison: So you want to have a mentor on the team. And then him, Robert Martinez has been a great mentor and motivator. You got to have… You want to talk to the horse and you want to talk to the jockey. You want to have people like that also. They may not be on your direct team, but they’re at least a part of the team of information that you can go to I guess. And you go to these events and Steve, you’ll see these you can go up and approach them and you can ask them questions. They want you to ask them questions and they’ll tell you straight up.

Ryan Harrison: And Steve. I’ve called up Steve and he’ll tell you something you want to hear. And then sometimes he’ll tell you things you don’t want to hear and you’ll let you know where you messed up at or whatever. So you want to have that raw and honest mentor, that mentor also that’s constantly helping you move your goals forward and showing you the direction of where and how to do things. You wouldn’t go jump in an airplane on your own without having an instructor or a mentor along the way. So why get into the real estate and… You don’t want to do it blindly.

Alex Osenenko: Got you. Ryan, we are a property management company. I’m always curious to see how investors think about that. There’s a school of thought where, my time is valuable, 12 hours a week is average, what you’re putting into it. I know you said you love it and all that, but Steve always goes through this like, “Hey, what is your time worth?”

Alex Osenenko: You only have so many Wednesdays left. He loves the Wednesdays for some reason. And it sounds like a good part of your team can be replaced by a professional property manager and a lot of your time can be saved. I’m sure you thought about it. Have you thought about it and how, and how do you think about it?

Ryan Harrison: Having a property management?

Alex Osenenko: Yeah, just having your professional property manager take care of the properties and [inaudible 00:36:53]-

Ryan Harrison: Yeah. Maybe at one time in point, maybe do something like that. There was one time when I first transitioned to… When I was transitioning to Guam and that was also after my mom had passed away. Steve had helped me manage some of the properties and stuff, him and Pete, so I did use it, and use it as a tool so it can be very beneficial.

Ryan Harrison: So my thought on it is if you’re going to stay somewhat small with it, you could maybe do it yourself depending on what you’re doing or what your career is. But if I was to get maybe a lot bigger with the single family, then I would probably definitely encourage it as well because I love my time and value my time more than I value the real estate per se. With the real estate, I don’t love it per se, but I love the time and I love the freedom.

Steve Rozenberg: Ryan, let me ask you this. I know that you, just going on these things, what advice would you give for people? Because everybody has a different way of looking at things and you and I both know as airline pilots we don’t have the regular nine-to-five. It’s very fluid. We can change, we can have a lot of time off and that kind of stuff and we can travel and stuff and it gives us the ability to have the freedom to think about stuff.

Steve Rozenberg: But if you were somebody that had a regular career, nine-to-five type job, how would you recommend that they do the balance between home life, work life and now the investing cycle that they’re trying to get in? Because that’s a different… I think if you had a nine-to-five, I think it would all of a sudden add a much larger dynamic wedge in there that maybe the average person doesn’t deal with. And Alex, I think that’s something that you may be missing out of the equation is that Ryan doesn’t have a nine-to-five every day where he gets up type thing, which gives him the ability to have the freedom.

Ryan Harrison: So in that case, then I definitely would look at it a lot differently. I would probably… Especially if you want to expand quickly because that’s the other thing, you’re not going to get rich and successful at this stuff doing it slowly. You need to try to move as quickly as you can and start branching out that way also. So that’s the key of it in my opinion.

Ryan Harrison: So if you can use and have a management company as part of your team when you’re initially starting out, especially if you do have that nine-to-five job, and you have the family that you have to answer to, for sure involve the management company on that. because then it’s going to increase your ability to capture more streams of income because you’re going to have more time again to focus on the other aspects of your life.

Ryan Harrison: And then eventually you can maybe take some of those houses out of that portfolio and you manage them yourself and then you include your family. Like Steve I saw you had your son involved and he started asking questions and stuff like that. I used to always bring my nephew around to the house so that I give them a drill and let them run around in the garage of a rental property and go drill stuff where I’d have him. You give a little kid a flashlight in a rental house that you’re looking at purchasing and they will find stuff with that flashlight that you overlook.

Ryan Harrison: And so once you get them involved and get that mindset, but you could do that, have the management team help you expand your portfolio as fast as you can maybe in different areas. And then some of the houses that are maybe close to your residential house, let’s say, so you’re not spending a lot of too much time driving, then maybe manage a handful of those yourself if you want to have your family a part of it also. So there’s definitely lots of ways to use it as a tool and ways to consider and look at it.

Steve Rozenberg: So you agree that it shouldn’t be a delineated line of, this is rental, this is family. That’s how I believe. I believe it should be mixed. I think the biggest challenge we all have as entrepreneurs is we’re so busy trying to be “successful investors”. We forget to bring the rest of the family along for the ride. For me and my son, giving him a rental property doesn’t do it. I can give him my whole portfolio of rentals. He could run it into the ground.

Steve Rozenberg: Teach him to want to own the rentals. And he comes to me and says, “Dad, I want to buy a rental.” That’s a different story. Now he’s understanding why I’m doing it. And again, we know this, you spend a lot of time educating yourself as I do, as Alex does. How do we pass that onto our children so that we create that legacy, or to loved ones or whomever.

Steve Rozenberg: And I think that’s where a lot of people, they think that they should be sitting in this room on their own, run a numbers instead of having the whole family or whoever it is involved in that. I think what you said is so right. I mean however you can bring them into it, I think it’s valuable more than we realize.

Ryan Harrison: Yeah, exactly. And I try to bring them in. As matter of fact, you made me feel better about myself. I was like, “Man, I’m I making them listen to too much to this?” Because I’ll have them listen to the podcasts in the car or whatever, or I bought the Rich Dad Poor Dad board game, the adult version and there’s a kid version, and then also, it just helps them understand. And again, it doesn’t come down to wanting or them wanting to have all the money in the world or anything like that.

Ryan Harrison: But it’s about understanding the rules of the game and then they can pick and choose what they want to do with their lives as far as that. But at least if they understand the rules of engagement, then they can take it wherever. And most people, they do want to help out and give back. Well, make your money do something and then you can do that, so everybody can pick and choose what they want to do. And that’s the nice thing with the real estate.

Ryan Harrison: But definitely, if you have a management company, it can only help enhance your ability with that growth. Make sure you… It’s like anything, you do your due diligence on a property, do your due diligence on a management company, on an accountant, lawyer, whatever, you still got to check all that stuff out. And then that also becomes part of the whole educational process. Initially too, a person may have all this dust and all this, “Okay, what am I going to do?”

Ryan Harrison: But eventually all that dust settles and then it’s just like this calm stream and then you’re able to see and focus and make all these decisions. And then again, you get all these different team members in place and it just becomes easier to make other decisions and, or just like I said, just enjoy your time. Go travel, enjoy the family. Whatever you need to do.

Steve Rozenberg: Yeah.

Ryan Harrison: It’s the option.

Steve Rozenberg: Yeah.

Alex Osenenko: Really cool. Ryan, we really do appreciate your time. There’s a number of takeaways here that I’m taking home. One is, build a team and maybe do some management yourself to at least understand the game. Learn a lot, constant learning. Give back because that will come back to you. You know, It’s karma. It is. I believe in karma. It’s out there folks.

Ryan Harrison: Yeah. I try to always take care of my professional karma and my personal karma.

Alex Osenenko: And value your time but also understand your goals and… This was really good walk-through. How a professional on top of their earning echelon, right? Because pilots make decent money. You take a lot of schooling but you make decent money and then you have to turn that money into wealth for your family and for your loved ones. But there’s also tax implications. So there’s a lot here in this episode that you helped us unpack, Ryan. I really appreciate it. Steve, any parting wisdom you want to share with our audience?

Steve Rozenberg: No. I think you said it right and I think Ryan knows as well as I do, the challenge once you start earning a good salary is how do you keep it. You start looking at other ways to keep it, real estate is obviously one of them. The challenge is if you go into real estate uneducated, and don’t take the time to educate yourself, the sandbox, we call it, of owning real estate, there’s a lot of glass in there that’ll cut you.

Steve Rozenberg: And you’ve got to make sure you know what you’re doing and don’t just buy a rental property because you have a good paying job and you think you know what you’re doing. And this is a write-off and this and that because again, I think the biggest challenge, and I personally experienced this when I owned a bunch is, not only do you financially lose money, but you will mentally be stressed.

Steve Rozenberg: And the sleepless nights of owning a lot of rental properties and not knowing how to fix a situation that you put yourself in, because all that I was trying to do is provide a better life for my family. And now I’ve got myself into this bigger bundle of mess, that’s not a good place to be. And I think Ryan can appreciate that. That just because you make a lot of money in your, you have a career, you don’t just go haphazardly into doing something. You got to educate yourself.

Steve Rozenberg: Ryan takes the time, he educates himself, he’s a smart guy, he knows what he’s doing, he doesn’t just jump into it. And I think to me that’s the biggest takeaway. Always keep educating yourself. And more importantly I like he said, giving back I think it’s huge. I know Ryan’s a big part of that. We do a lot of giving back and I think that’s something to be said. I was listening to a podcast once, I think it was Tony Robbins and he said if you don’t give back when you have a dollar, you’ll definitely not get back when you have a million.

Steve Rozenberg: I thought that was an interesting thing to say. Basically saying there’s no time that all of a sudden you start giving back, you start giving back now and that becomes part of your DNA, of who you are. You don’t just flip a switch and say now I’m going to get back because you’ll always have a reason not to. That’s why they say tithing, you take the first 10% when you want to donate because the last 10% never exist because it always gets eaten up by something else. That’s my takeaway from it.

Ryan Harrison: Yeah.

Alex Osenenko: Yeah. Well, thank you for listening to the show and if you like what you hear, please do subscribe and maybe if you find it in your heart to give us a rating, maybe a five star-

Steve Rozenberg: Giving back. That’s giving back.

Alex Osenenko: A four star for Steve-

Steve Rozenberg: Oh. But I’m trying.

Alex Osenenko: Highly appreciate it, we’re just starting this show. We want to bring more guests like Ryan and try to just help each other out here. That’s the thing. We’re all learning together and Ryan was lucky enough to find a group of people. If you want to join our group, Mastermind Real Estate Investment Club on Facebook, join us. Steve is approachable, talk to him and thank you very much for listening. This was a great episode. Ryan. Thank you very much for your time and waking up at 3:00 AM and until next time, be well.

Steve Rozenberg: Thanks Ryan. Thanks guys. We’ll see ya.

Alex Osenenko: Thank you.

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