Create Remarkable Courage to Buy Back Your Time with William Parmer

Transcript

[Mattias]
Welcome back to the REI Agent. My guest today is William Parmer, a U.S. Marine veteran, a former law enforcement officer turned real estate investor based in Christianburg, Virginia, not too far from us. William builds passive income through single family rentals, short-term rentals, and mobile home parks, and now coaches other investors as part of the Master Passive Income Team and co-hosts the Breakthrough Investor Podcast.

William, welcome to the show.

[William Parmer]
Hey man, appreciate it. Super excited to be here and just add some value to your guests and maybe just encourage them and inspire them to step out into real estate.

[Mattias]
I love it. William, I often ask this question, but what got you started? What got you to jump into real estate from being a veteran and a law enforcement officer?

That’s a pretty big shift.

[William Parmer]
Yeah, so it’s kind of an interesting story. So I’ll start kind of in the middle and then I’ll back up a little bit. So when I was in law enforcement, this was during COVID, right?

So that all happened and we weren’t allowed to stop cars, look for drugs, that kind of stuff because we didn’t know how bad this thing was, right? So we basically were isolated to our cars and I was night shifts patrol, so it’s a lot of hours when you’re not allowed to stop cars to do a lot of nothing really. And in doing that, I realized I was listening to a lot of music because I love music and when I was overseas that was my thing.

I would listen to a lot of music and I just realized that I was sitting in my car not learning anything. And I didn’t want to read a book because situational awareness and things like that, I always wanted to have my eyes up. So I ended up going on Spotify and searched real estate podcast because I remembered way back when I was younger, this is the beginning of the story, that my dad had bought two to three single family homes and had renovated them and was renting them out.

However, he didn’t really understand how that business worked, he just wanted to give it a go. And he didn’t necessarily do it correctly. If he had held them, I told him not even like four or five months ago that if he had kept those houses, they’d probably be paid off right now and or they’d be making massive amounts of cash flow and not to mention the appreciation.

So I was like, well, maybe he did it wrong and I might be able to learn something. So I started looking on the podcast and then the Master Passive Income podcast with Dustin Heiner popped up and I did like everybody else, I just clicked play and listened to the first episode and realized we had a lot in common. He was a family guy, he’s a very strong believer, which I am as well.

And his whole goal was to help people buy rentals for cash flow. I was like, well, how hard is this? So after I listened to him, I ended up binging, it had to be, I mean, I kid you not, probably 100, 150 episodes.

It was a lot for the next two to three weeks. And then I realized that I qualified to be a student. He would say what his criteria is so that if it was something you were interested in, you didn’t have to wonder.

Right. And so I basically signed up to be a student and we had a Zoom call together. We chatted and he’s like, great, I think you’ll be a good fit for this.

And so from there, it kind of just grew.

[Mattias]
It’s awesome. Yeah. Podcasts, YouTube, Rich Dad, Poor Dad, those are, yeah, somehow those wiggle themselves into people’s brains along the way.

And then they realize, you know, this paycheck that I’m getting from this job I’m doing is not really going to give me what I want, or at least, you know, it’s not the life that I could have. And the, you know, financial freedom, the legacy that you can provide your family, et cetera, that, you know, is possible. And so from that moment, like, you know, how long did it take you to do a first deal and, you know, where’d you go from there?

[William Parmer]
Gotcha. Well, so the coaching is for six months at a time. So I was like, well, I’m going to do this totally in six months.

100% did not do that. And I could have, so it’s not saying you can’t. I just got kind of cold feet towards the end and I didn’t end up doing it.

So I actually ended up renewing for a second round of coaching and ended up closing my first deal probably 45 days after that, if even. And it was in a state I had never visited at that time, had never been to this location, never saw the house and ended up buying it and closing on the property, doing a little bit of light rehab, put a tenant in it and then did a refi. And so it was used a hard money loan to buy it originally.

I think I brought, I want to say between 18 and 20 grand down, if I’m remembering correctly. The purchase price was 64.5. So it was pretty cheap. It was 84,000.

So I negotiated down almost 20 grand. And so that was kind of the first deal. And it’s kind of grown since then.

I ended up taking a single family home that was a primary residence and we turned it into a short, a long-term at first, I believe. And then we turned it into short-term and then we actually turned it back into a long-term just because we hit that market with a short-term right after the COVID period where everybody was like, we’re going to go everywhere. And so it was really good for the first year, but I just saw the revenue kind of tanking after that.

And I was like, well, this is a great single family, long-term rental property. So we just turned it into that and had no issues out of it. Great tenants, good rent.

And we were below market rent for our area. So the cashflow was great. And it was at a 2.86 interest rate. So really low. And then it kind of grew from there. It ended up purchasing a small mobile home park along the way, which was always a very interesting purchase.

And yeah, it’s continuing to grow.

[Mattias]
It’s a whole different animal. I’m curious, sorry, you had said something about him also being a family man. So are you married kids?

[William Parmer]
Yep. I’m married coming up on 10 years, got four kids. So all girls, I will put a link for donations if anybody feels sorry for me.

I’ll throw that in there unashamedly.

[Mattias]
Yeah. I was curious about, so you would have been married at this time. I was just curious about coming from, COVID was definitely a period of uncertainty and a lot of fear, et cetera.

And then coming home and being like, all right, honey, we’re going to buy a house in a different state with a hard money loan. And we had never done this.

[William Parmer]
Yeah. So that was a fun one. That was a fun one.

Basically, for like two weeks when I was binging all these episodes, I would come home and that’s what I would talk about. And I realized that I qualified to be a student. I went to my wife and I said, hey, we have $22,000.

And I put it on the kitchen table with a lighter. And I said, we can burn it and be totally fine. Or we can take it and we can invest it.

And so that was kind of like trying to give her two options. Truly there was more options than that, but I wanted it to be dramatic. And so she just kind of looked at me and was like, well, I guess we should do the investing bit.

And she didn’t really truly get on board with the investing until I want to say a year and a half later. So this would have been maybe right coming up to 2022, something like that. And she had a dream one night that her family member bought a property.

And she said in her dream, the first thing out of her mouth was, what was your interest rate? And the moment she told me that, I was like, I knew I had her. But she’s awesome.

She totally let me do that and just has absolute faith in me, which is a little bit scary occasionally, but she’s an excellent sounding board. And through the years of doing this, she’s listened to me talk about it, like the pros and the cons, the things that could go right, the things that could go bad, the risk versus reward kind of thing. And so she’s definitely my best advisor for sure.

Awesome.

[Mattias]
So you invest across single family rentals, short-term rentals and mobile home parks. How do you decide what asset class to pursue next and what has surprised you most about mobile home parks compared to traditional rentals?

[William Parmer]
Complexity with mobile home park versus traditional rentals. Traditional rentals, they’re phenomenal. They’re really, really good.

You can negotiate your price. So I love that saying you make your money in real estate when you buy the property, you realize the money when you sell. But I also like to add refinance because you can sell, but you need to be strategic about when, how, and why.

That’s just my opinion. But the mobile home park stuff is a lot more complicated. There’s fixed assets, there’s non-fixed assets, there’s NOI, there’s true NOI.

For those listening, NOI is net operating income, which basically means all the gross of the property itself combined. So there’s a lot of moving parts there and things you cannot do with single family homes or you can’t do with mobile homes that you can do with single families. And then your clientele matters a whole lot.

Typical mobile homes, to be quite frank, it’s the cheapest way to live next to a cardboard box. And when you are bad with your money, which is pretty typical for people that live in mobile home parks, you don’t have a lot of options. And the way that I see it is, if I buy a park and I can make it a good quality park, it’s safe, it’s clean, I’m providing all the things that are needed for a good quality of life.

And they can even own their own mobile home and just pay a lot rent and then they actually have a pride of ownership going on. And it’s providing good, affordable, low-income housing in our area. So that’s why I like it.

You’re always going to have, what does Jesus say? The poor will always be among us. And there’s some people that make more money than I do that choose to live in mobile home parks.

So don’t knock it because they’re legitimately are. But if I can provide good housing, good, safe, clean housing and make my living off of that, support my family through that, I like the option a lot.

[Mattias]
Yeah. Well, I think that one of the awesome things about mobile home parks is, if you’re looking at what to invest in, there’s a lot of strategies, a lot of different things, a lot of different avenues that can be successful. But if you’re looking at it from a risk point of view, being the most affordable option is a good place to be.

There’s going to always be somebody there. Being the most expensive option, that could change. That could be harder to, depending on the economy, that kind of stuff could really change the outlook there.

So buying a luxury Airbnb, for example, that can do really well and it can be a really awesome thing. But it is, in my opinion, more risky than that kind of investment. But that being said, there’s definitely people that do that well all the time.

[William Parmer]
A hundred percent. And yeah, I would agree with you. The Airbnb for me is very risky if you buy it for the income of the Airbnb solely.

But if you buy it as a long-term rental, as a backup, you run your numbers as a long-term rental. If the cashflow is there, Airbnb it until you can’t. I’m in a college town, so they’re regulating Airbnb in the area because of the colleges, because so many people would come and stay.

And then you add the 30,000 to 50,000, I don’t even know how many students. It’s a lot. And this is a small area, so traffic becomes really congested.

It’s hard to get around. We have several people hit by a car a year because there’s just so many people moving. And so they’re starting to regulate that kind of stuff.

So if you buy those as a long-term rental and then you short-term them or mid-term them, you’re basically going to be fine. You won’t be underwater. But if you buy it just as a short-term rental and let’s say you’re set to make like $80,000 gross one year, and then the next year is 25, which can happen, you’re pretty much going to be underwater and you’re probably overpaid for that house.

So you’re almost going to have to give it away or you’re going to take a loss for sure.

[Mattias]
Yeah. No, totally. And regulation is changing.

There’s another risk there. The midterm game I think is maybe if it can pencil out, maybe it’s harder to understand or to analyze than maybe a long-term rental would be. But I think if you can do maybe ABC kind of plans where it’s going to make the most money as a short-term rental, let’s give it a shot.

If it’s not working out super well, then midterm rental is going to work well as well. Maybe less income than we were hoping, but less work.

[William Parmer]
Yeah. A lot less management. That’s what I’ve kind of found.

I would agree with you. Short terms is a lot more management upkeep. You have turnover every two to three days on average.

Some is just overnight. But midterm, you’re breaking that 30-day. As long as you’re breaking that 30-day in most localities, you’re not going to be considered a short-term.

And then if you need to, for anybody listening that’s curious, you can use a website called Furnished Finder to look at midterms, other midterms in the area. And that’ll give you a good idea of what your pricing could be per week or per month or every six months based on the amenity. So you definitely can look at some comps.

[Mattias]
Yeah. They have some pretty good tools on that website that gives you what the demand is per price point, per bedroom, that kind of thing. It can be different.

So around here, we have a vacation area, Massanutten, you may know about it. And that’s been the hotspot for vacation rentals. Now those, typically a big house does well.

If you have people coming from Northern Virginia or something that want to live or spend a week as a family, they want five plus bedrooms. They want to have a higher occupancy kind of rate. When you get into the midterm rentals, then it is very different in our market.

Midterm rentals, typically, if somebody could just have a nice little room to crash for 1800 bucks a month, that’s kind of what they’re targeting. That’s their ideal, which kind of brings you into the potential for co-housing or whatever as well.

[William Parmer]
Co-living, yeah, yeah.

[Mattias]
Co-living, yeah. You have to be kind of careful with regulations on that front as well. But there’s a lot of ways to pivot.

And a lot of people are having to do that now because it is harder with interest rates to pencil out a deal on the long term. So if you can find something that does do long term and that everything else is bonus on top, that’s great.

[William Parmer]
Yeah. It’s definitely becoming harder to buy long term for cash flow in my area. More and more people are buying these older, smaller houses and they’re trying to hit the…

Basically, they’re flipping it, but they’re trying to hit the ARV price range at about 190 to 220 because that’s kind of the range for first time home buyers. It’s smaller, but there’s not a lot in that range. So if you hit it, you’re basically going to sell very, very quickly because first time home buyers just can’t afford much else, especially for this area.

But there’s definitely markets all over the U.S. where you can get houses for under 100 grand starting out and they’re close to 1,000 to 1,200 square feet where the numbers do pencil out better. My one piece of advice or caution for people doing that is you have to build your business first. Don’t go buy the house and then try to figure everything else out first.

Figure the property management, figure out the maintenance guys, figure out all those people first before you ever buy a property.

[Mattias]
Yeah. So when you did that, were you factoring in property management from the beginning or were you trying to do it by yourself?

[William Parmer]
Nope. 10%. Even if you do it yourself, I’m a big believer in go ahead and factor in 10% for property management because what if you don’t factor that in and you’re making let’s say $300 cashflow and it’s $1,000 a month property, but you’re netting $300.

Well, if you do that and then you suddenly are like, I need to pay a property manager to do this. It’s just more than I want to handle. You didn’t account for that.

Now you’re down to $200 a month cashflow. They’re going to have like, we’re going to spend up to $500 without notifying you, which you can change by the way, just because it’s there. You can renegotiate property management agreements, which I highly recommend everybody do.

I don’t think I’ve ever signed one that I didn’t renegotiate something on. But you can definitely go to these other places and buy houses sub $100,000, put $15,000, $20,000 down and you’ll be just fine on your cashflow. And you can hold it like real estate.

What is it? It doubles every 15 years in value or something like that. Don’t quote me on that one.

I can’t remember that actual number.

[Mattias]
Depends where you’re at, right? Yeah, it really does. And that’s something you might want to research as well if you’re exploring other markets.

I had this stereotype about if you’re in the Midwest, you’re not going to appreciate much and the rents are going to be better, but you’re not going to have the benefits of appreciation. I had a guest on that talked about, I think it was Cleveland that their rates of appreciation were better than some of the other more stereotypical markets that you’re expecting. So it’s good to have an idea of what maybe is true, but definitely double check and do research about the market and see what the appreciation is and what kind of industry is coming in.

What other things do you do to analyze a new market or just figure out where you’re going to go?

[William Parmer]
Ours is really simple. And ironically, the house I’m talking about is right outside of Cleveland. But basically the way that we do it is we actually go to Zillow and you put in your filters.

So if you want $100,000 and less house, you put this in. We zoom out so you can see basically the entire United States. You put in your criteria, $100,000, three bed, two bath.

Careful with the three bed, two bath, because there are some localities like Ohio area, three bed, one bath is more of the common instead of the three, two. So I always put like three ones just because I want to see what’s out there because it’ll give you more baths. It won’t give you less.

And if you’re doing three twos and the area is common for three, one, you’re nixing a lot of potential properties there. So that’s my criteria for single family homes. And then you just zoom in to every state.

You look where there’s a massive amount of red dots and you zoom a little bit more or red dots in there. We’ll just use Cleveland, for example. You go to Cleveland, you say, OK, where’s all the price points?

And you look at the price points like $80,000 over here, $100,000 over here. You say, OK, well, what side of town is this? And we have this great tool now that you can use, which is AI.

So what I would do is if you find an area, you’re like, I wonder what this is. I just use speech dictate because I was homeschooled and takes forever for me to type. I will turn speech dictate on and talk to my computer and say, hey, analyze this area.

I want to know what businesses are coming in. There’s a hospital in Cleveland. It’s a medical research facility maybe.

And do look at that. What’s the demographic? Are people leaving?

Are people coming? What’s the median household income? And that kind of stuff.

And it’ll give it all to you. And just tell it like I’m looking at buying real estate here and it’ll give you some extra stuff too. And you can go down a rabbit hole getting forever.

And so once I see that, I’m like, OK, well, this looks like a good area. At that point, I just, again, Google search or AI, whatever you want to use, get yourself a list of property managers, go through the property managers, look at their websites, look at their Google reviews, see who’s got good stars. My biggest thing really is communication.

If the communication is great, like if owners, I read the owners, not necessarily the tenant reviews. I may skim those. But tenant reviews, like if they get evicted because they didn’t pay, they may go on there and leave a terrible review.

So make sure you differentiate between owner reviews and tenant reviews. And I have a list of like 20 some odd questions that I always ask and I always do it over the phone. It’s never email.

And it’s always something you I’d like to hear their voice in the tonal inflection because you can read an email and you can wait 45 minutes to respond. It’s like, well, no, I want to hear you answer it now. And then once you build your list of your top five, weed them down until you have your favorite, your next favorite, next favorite, go with your favorite.

And the reason is, is because for whatever reason, if they end up not being great for you, you can you have hired slow and you are firing fast and you can move straight to the next one and you’re not having to go through this process because you’ve already got it lined up. And then as you as you next one, for whatever reason, keep an Excel sheet or a Google sheet and then say like fire because of X, Y, Z, and then put the dates, et cetera. Just keep good notes.

And that’s how I would do that.

[Mattias]
Okay. So then you’re going to use that property manager to tour the property virtually then as well. Is that typically what you do?

[William Parmer]
Yeah. So what I would do is I would say, because you don’t want to waste their time. And if you dime them, getting them, trying to get them to go out to your potential property to physically walk through every time.

If I was a property manager, I probably wouldn’t work for you because they don’t have that much time and you’re not even paying them yet. And most of the time that it’s going to be 10%, you might get one or two that are a little bit less. Well, are we still on?

Oh, there we go. Our audio or visual clicked out on my end. Pause.

[Mattias]
So then are you using those property managers to do like a virtual tour of the housings that you want to buy?

[William Parmer]
So basically what I would do is I would take like one to three houses and I would send it to them on email, just a link and say, Hey, look at this property. Would you even manage this? If you would manage it, what would it rent for with a slight lipstick on a pig rehab?

Like think five to maybe 10 grand at the most kind of thing. If they say yes to this one, but no to these two, I want to know why no to these two, why yes to this one? Because that tells me the area may be bad and there’s certain reasons like they can’t tell you like why necessarily, but you can diagnose and deduce yourself.

Also, I always ask them what zip codes they like to manage in and what zip codes they want to stay out of. That takes care of a lot right there. But no, I don’t ask them to go through every single one of them because if we did that, they’d be exhausted and you haven’t even paid them yet.

And if I was a property manager, I wouldn’t want to work for you. So I get them to do that. Now, if we get to the point where making an offer on a house and we’re doing the inspections, we’re doing all that jazz, I may be like, Hey, can you go look at the house or about the clothes, make a list of things that needs to get fixed in order to rent it up.

[Mattias]
So then are you contacting a different agent to do a tour if you are interested in offering or whatever on the house? Right.

[William Parmer]
But for me, I’m not there. So I’m not walking through the house. I don’t care.

I’ll contact that usually like the seller’s agent. And I’ll just contact them. I don’t really care who the agent is necessarily.

I don’t care what color the drapes are, et cetera. I want to know, is this thing going to rent? I don’t care what the color of the carpet is.

I do recommend putting like LVP down instead of carpet. It’s a lot more durable. But they’ll walk me through it.

I may hop on a call with them just to see stuff in the house. But the property manager is the one that I really care what they think. Because if they go, Hey, we thought this was good, but this is a trash hole.

Probably not going to buy it. Like if they say, Hey, I don’t want to manage this. Now you got to decide, like, are they being picky or are they like being like, no, legitimately, even if you fix this up, I don’t want to manage it.

Like I just drove the neighborhood and I don’t like it. Right there, you’re nixing a problem, right? So you’re, you may think it’s a good buy and it could be a good buy like on paper, but if your property manager ain’t going to manage it, it’s not a good buy for me.

[Mattias]
Yeah. I think there’s definitely advantages or I mean, I guess it doesn’t necessarily have to be like, let’s say you’re, you’re really wanting to narrow in on Cleveland or a certain area of Cleveland. And you kind of had your go-to people then are established.

Like there’s definitely a huge advantage to having a property manager. They certainly can. There’s probably some that, that are kind of both an agent and a property manager that, that operate a little bit with going and actually seeing houses, et cetera.

But, but they can give you a good list of, you know, kind of, you know, they have the vendors, they can tell you kind of what it would cost to get it market ready, et cetera, pretty easily. Certainly you don’t have to be a property manager to have that knowledge. I mean, like I am not a property manager, but I’ve been doing, you know, birds and flips and all that kind of stuff as well and have an active portfolio around my area.

So I can help people with that information. And the way I operate is I have a property manager that I just kind of pass it on to them once it’s done. So that’s worked out really well on my end, but I do think having somebody, a professional boots on ground that, you know, has the contacts and has like an idea, then go through a house and be like, yeah, you know, I would guess it’s going to be about, you know, $1,600 to do this or whatever, you know, and I think that becomes very, very valuable.

And so to find that professional can be a property manager. It doesn’t have to be, I think it’s just really huge, especially if you’re going to like kind of have repeat business in that area.

[William Parmer]
Yeah. Well, if you, especially if you’re doing it like completely in a different state, right. You need that.

And the way you find these people, your property manager is going to have a ton of contacts, but just because they have them in the contact does not mean that they’re any good. So you need to do your own vetting. And it’s usually a phone call.

And like, I asked, I like to ask for like one to two referrals. Yes. They’re going to handpick the referral they give you.

I got that. But you’re going to have a conversation with somebody other than them about how they operate. Like if I’m going to spend seven to $8,000 with somebody, it’s like, okay, well, this is seven to eight grand.

I don’t care if you get it done in a day or a week. I don’t want you to take it a month to do it. Like if they say it’s seven grand, but I can do this in two days.

I’m like, great. The faster you get this thing done, the faster I can start running this thing out. But if you want to find those contacts, literally ask everybody you talk to when you call the local bank for financing, be like, Hey, I’m looking for a guy to mow the lawn, or I need a guy that does concrete work, or I need a guy for this.

Literally ask everybody, get out your Google sheets or a notebook, however you want to record that stuff and just keep it in there and build that. I’m about to do a throwback, Rolodex of names. Go ahead and build that Rolodex.

So that way you always have people to call to get things done.

[Mattias]
Sure. You now coach new investors that master passive income. What is the single biggest mistake you see new investors make that keeps them stuck?

And what is the first thing you tell them to do differently?

[William Parmer]
Analysis paralysis is a big one. They just run the numbers over and over and over and over and over again. And they’re so concerned over like a single dollar, right?

Like if I run it and it’s getting $400 cashflow, but if I run the number this way and it gets me 375, they want the home run every single time they buy a house. And it’s just not feasible. You play baseball.

You’re not going to get a home run every time you go to play. It’s just not going to happen. Now the whole bit of coaching is we want to get you over that fear.

And that’s what stopped me. It took me six months. It was analysis paralysis.

And I just realized if I didn’t do this thing, I was wasting my time with coaching, which I didn’t believe was a waste. Like I knew that it would work because Dustin improved it. He had done it over and over and rinsed and repeat for years.

And so I just decided that enough was enough and I was going to pull the trigger on it. And like I said, 22 grand I could do without it. I wouldn’t enjoy it, but I could do without it.

So getting people over that analysis paralysis, I think is really important, but at some point you will have to just take the leap.

[Mattias]
Yeah. You know, I think it’s, there’s people often are afraid that it’s, it feels like a zero sum game. Like you kind of made the analogy between like burning the $22,000 versus deploying it into a, you know, an investment.

And, you know, I think it feels like, you know, or it feels like, you know, I’m buying a hundred thousand dollar house. Like I could lose a hundred thousand dollars. Like this is a huge deal.

But, you know, even when deals go South, they’re not usually that big of deal, especially in like a single family market. Now you should definitely have the coach, have the mentor, have whatever to, to make sure you’re doing it right. But it’s rarely that you’re, you’re, you know, making that big of a mistake.

And, and I think people want that home run, but they also then kind of get turned on to all the different avenues that you can go. So like, it’s like, you know, this year, this, this, now I’m going to go into section eight. Now I’m going to go into you know, co-living.

Now I’m going to go into assisted living or whatever. There’s, there’s a lot of different avenues you can go. And it’s good to have like kind of that tool belt, but when you’re starting, I think it’s really important to, to take a step.

And depending on your life phase, like, you know, there is nothing wrong with just turning your single family house that you’ve lived in or whatever, the first house you buy into a rental. If it, if it cash flows, makes sense. The hard part people can’t get past often is, you know, what they could buy, what they could live in, sold versus, you know, keeping that, that investment.

And, and, you know, so it’s.

[William Parmer]
I would say, I would say there’s a lot of, there’s a fine line between thinking too far of like, we could do all of this and you wait and wait and wait and wait for that stuff to happen. Well, what would happen if you had taken an imperfect house, bought it and buy it right? Like we’re, we’re investors, right?

We’re not going to pay market value most of the time for houses. If you’re paying market value, you’re probably not going to cash flow, which I think you need to cash on single family homes. You can do it just for appreciation.

However, you better understand you’re going to lose money every single year until you sell it. So it’s a calculated risk, but at least for me, I want cashflow out of single family homes. So if you buy the property, you negotiate down is where you make your savings.

So you’ve made the money, but you don’t realize it until much later.

[Mattias]
Yeah. Well, and it’s also, you know, that people always I mean, one of the common mistakes as well is just kind of taking the taxes, principal interest and insurance, and then seeing what the rent would be on top of that and factoring that in this cashflow. Like there’s obviously other things like vacancy and CapEx and all that you have to understand and calculate as well, because, you know, let’s be honest, like it’s, there’s oftentimes where you’re like, okay, you’re making a decent amount of cashflow, but then you have a hot water heater go out or whatever.

And that stuff happens and it, and it will eat into a year of profit or whatever it will definitely kind of wash that. So like it takes a little bit to kind of get that, that ball rolling, but obviously it is amazing long-term.

[William Parmer]
I mean, I would say when you get that ball rolling, do not stop until you have at least 10 houses is my recommendation. Because once you have 10, if that happens, like what are the odds of that happening for 10 units? It’s much, much lower.

Yeah. You’re going to have like some nickel and dime stuff on, on properties and that’s pretty routine. But if you’ve got 10 houses to spread that load over, it becomes a lot more feasible.

And then that 10 houses can be to come 20 and then 30 and then 40 and then 50. And you can just keep growing that. But I would say once you start, immediately start looking for that next deal, find some way to find private money, other people’s money, hard money, whatever it is to make that ball keep rolling.

I think a lot of people get one and maybe two and they’re like, oh, this is all I can handle. And if, if that’s all you want, that’s fine. But if you’re doing it for the cash flow and you’re managing, but it’s driving all of your time, like you get off on the weekend, you’re nine to five and then you have to go work on this thing.

I don’t know about you, but I don’t want to do that. It’s like, I know how to do that. I’ve remodeled homes, but I’m not interested in doing it.

I don’t care because I’m not investing necessarily for money. I’m really investing for time, the money I have to have to buy my time. So I have to have that money to pay my own bills, get put food on the table.

But really it’s time that I want, not just the money.

[Mattias]
Yeah. A hundred percent. I, I drew a line in the sand from the beginning, partly because I don’t have a ton of experience or, or a skill in I’m not a handyman.

My wife is not a man, but handy.

[William Parmer]
I’m going to clip that and use that.

[Mattias]
It’s great. She’s got a tool belt and everything. But, but no, like I just kind of drew that line in the sand.

It’s like, I don’t, I know I could figure it out. I know I could learn. I know I could do my, my dad didn’t ever really did home projects and that kind of stuff.

So it wasn’t around when I grew up, I did some framing, but that’s about it. And so it’s like, yeah, I could go spend, you know, my Saturday with YouTube trying to fix a plumbing leak or something. And I could probably figure it out.

I’d probably go back and forth to Lowe’s or Home Depot, you know, 10 times until I get it figured out and get it sorted. And then I would just probably hate being an investor. And I just knew that early on.

I was like this, if I want to be in this long term, and this is the point is to be in this long term, I got to just make sure I’m getting myself out of it. The other thing that I, I, you know, fortunate for a lot of my properties, they were, they were, they were burr properties. And so I was able to, to kind of have a clean slate from day one.

So the, the CapEx risk was a lot lower. A lot of my, my places had, you know, new roofs, you know, new HVACs, all that kind of stuff. So I’m not worried about that quite as much.

And then also just the numbers, especially with when we had those lower interest rates, just works so much better. I remember when I found a, a local bank, which this is another tidbit that if, if, if people listening build some relationships with local banks, there’s definitely banks that want to have real estate in their, in their holdings. And you might find that they’ll be willing to do fun things with like, you know, you might buy a distressed property, fund the renovations all from like, you go to close and you get a check for, you know, 130% of the purchase price, for example.

And so I, I found a couple.

[William Parmer]
Yeah, basing that off the ARV. Yeah.

[Mattias]
Yeah. Yeah, exactly. And, and depending on your experience and depending on your relationship with the bank, they may not even need like a ton of, you know, contractors to tell you exactly what is going to be done, et cetera.

It just depends on the situation. But I remember I was, I was like, Oh my gosh, I have to pay 5% interest on this 30 year in-house fixed loan. Like, Oh, should I do it?

[William Parmer]
All day.

[Mattias]
Now I’m like, Oh my gosh, I should have gotten like 10.

[William Parmer]
Yeah. Yeah. Same thing, man.

Same thing.

[Mattias]
But yeah, no, it’s, it’s a fun, wonderful world. Definitely a long-term play. And it’s, it’s you know, it’s super rewarding.

And, and, you know, at the end of the day, like you said, like, you know, we’re providing a huge need for people, you know, we’re providing housing, which is just the fundamental thing that everybody needs.

[William Parmer]
Yeah. And there’s plenty of people that the idea of owning a house legitimately scares them and they want nothing to do with it. They want to be able to call somebody to fix a leaking roof or water heater that’s busted or whatever it is.

And the thing is they don’t ever want to own. They just want to know who to call when something breaks. And as long as you bet your tenants well, and you have your criteria for your property managers, or you, if you’re the manager, stick with your criteria.

And then that’s great because like, I mean, I’ll own the homes. That’s fine. I’ll own the homes all day long because you have the equity play.

You have the forced appreciation play where investors, again, so we buy at a lower rate and then you can refi. And the cool thing about a refi is cash out refinance for those listening. That’s when you get a new note, but your house has increased value.

So let’s say it’s gone up a hundred grand and you can pull out, let’s say 70% of that. So that’d be $70,000. Well, that $70,000, you just pulled out of that house.

And I will caveat and say, make sure it is still cash flowing when you pull that money out. You don’t want to pull all the cash flow out too, but that 70 grand is non-taxable because it’s debt, it’s leverage. It’s not actual income.

So you can use that to buy another house and rents and repeat constantly. And this is how you build that snowball.

[Mattias]
A hundred percent. Yeah. We have our first house that we bought.

We ended up putting it on a 15 year mortgage and yeah, that one we’ve got like, I don’t know, $30,000 left on it. It’s pretty awesome. So that one will be a fun play at some point to be able to, you know, get a, we’ll decide exactly how much, you know, you want to pull out because again, it’s got a cashflow.

It’s got to make sense. But, you know, be able to pull out $200,000 plus like tax freeze could be pretty awesome.

[William Parmer]
Yeah. And even you could just run a HELOC on that, even if you wanted to, just to have access to it, you don’t have to do the whole thing. So there’s tons of different options when you actually own.

And that’s what most people, I don’t think they understand how it works. And so that’s what’s so scary about it.

[Mattias]
But yeah, like you said before, kind of getting started is where you got to start. I honestly forgot we got caught up in conversation and I don’t remember if I asked you about the golden nugget. Was this conversation based off of your golden nugget?

[William Parmer]
It very well could have been. So it kind of leads into it. I would say like my golden nugget is like really get education.

I really want people to start learning about this. Like if you don’t know where to start, listen to host of REI podcast, this podcast, the REI agent podcast, listen to other podcasts, start learning about it and take notes. Like if you don’t know what something means, write it down on a notebook and guess what?

Do like I do and just talk to AI and say, hey, what does this mean? And then there you go. You’ve gained some knowledge, right?

So start building that. Podcasts are my favorites. Books, books are phenomenal.

And then if you’re like me, like I like, I like having somebody to actually show me how to do it, who has already done it, which is important. You don’t want somebody that hasn’t done something teaching you how to do something. You want somebody that’s actually done it.

So I really am a big fan of coaching and mentorship. So go to these REI meetups, real estate meetups in your area. If there’s none in your area, maybe start one.

I did that for about a year and just started it with a guy that I met randomly in a Lowe’s on aisle 12. And so we started a real estate meetup and he was, I didn’t know, he had like 57 houses that he had bought in three years with almost no money. His story is absolutely wild.

But he ended up, I ended up buying a house from him and I couldn’t close. I was just $10,000 shy and it was just like bad timing. It’s like I had the money, but the timing was just bad.

And he goes, okay, well, I’ll just give you a $10,000 personal note attached to this. And it’s going to be a 4% for this amount. And he’s like, how long do you need?

I was like, no more than six months. I paid it off in 45 days. And he was like, cool.

So he sold me the house and gave me a $10,000 note. I got paid at closing. And private money, look for private money.

And the way you find that is you just talk to people you already know. It definitely helps if you’ve already done a house, but even if you haven’t, learn a strategy like the BRRRR strategy is phenomenal. And then just learn how to do it and start looking for private money.

Family members are great. So yeah, those are my nuggets for everybody.

[Mattias]
I love it. I love it. What about a book you think is fundamental that everybody should read or just one that you’ve currently or enjoyed more recently?

[William Parmer]
So The Purple Bible is like the best, which is Robert Kiyosaki’s Rich Dad Poor Dad. It was kind of like a mind blowing, mind changing thing for me, which I’m sure everybody references that the amount of people that read that book is absolutely crazy.

[Mattias]
It’s changed a lot of lives.

[William Parmer]
It has, it truly has. And then follow it up with The Cash Flow Quadrant, also again by Robert Kiyosaki. It was great.

So there’s, shoot, I had a note with his book, but I can’t remember it. But there’s an author, Adam Carroll, How to Build a Strategic Life, I believe is what it’s called. But it’s exactly what it sounds like.

It was a great read. And then I really like a business author by the name of Benjamin Hardy. His stuff is great.

He wrote a book called 10X is Easier Than 2X. It sounds like a Grant Cardone thing, but it’s not. And then he had another one, The Gap and the Gain, which he focuses a lot on mindset.

And I found that stuff incredibly helpful.

[Mattias]
Sure.

[William Parmer]
Yeah. Awesome.

[Mattias]
Yeah. Where can people find you if they are interested in your podcast, following you on social media, et cetera?

[William Parmer]
Sure. So podcast is going to be on Spotify or Apple Podcasts. It’s Breakthrough Investor.

And so I’m a co-host with Charles Rose Jr. And we interview other real estate investors. Sometimes we’ll just sit down and chat about what’s going on, any events we’ve been to, things like that. So come join us.

We’re about to hit our 100th episode here pretty shortly. And then the social media, sorry, man, I drew a blank right there for a second. Instagram, it’s just @William.C.Parmer. And yeah, you can find me on Instagram. I’m not great about posting on Instagram, so I will try to do better. But if you send me a message, I’d be happy to chat with you there. But yeah, that’s where you can find me.

[Mattias]
Awesome. Well, William, thanks so much for being on the show. It’s been a lot of fun talking to you.

[William Parmer]
Yeah, it’s been a pleasure. Hope your audience learned something, got inspired, and will go out and do great things.

[Mattias]
Absolutely.