Components Of Mortgage Payments & Market Profile: Central PA

Jason Hartman brings on in-house economist Thomas to discuss mortgage payments. They compare 15 and 30-year mortgages and talk about inflation. Later on the show, Jason hosts a local market specialist from Pennsylvania to discuss the local market. This show gives you insight into the local economy, typical tenant profiles, and the types of properties you can purchase.

Investor 0:00
This market specialist was able to tell me the absolute lowest rent they’ve ever rented in a particular neighborhood within a certain parameter. And that number was great. It was within $50 of what they were telling me even record the lowest number to get great return terrific results. And then the other thing about having people applying and keyed up and lined up to rent your properties right away just because that marketplace so huge and so many people, that just gives you a sense of confidence that you’re gonna have a very good cash flowing property without a great deal of risk is going to sit vacant for a month or two months and that sort of thing.

Announcer 0:34
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender developer. author and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:24
Hey, welcome to Episode 1159 1159. This is your host, Jason Hartman. I’ve got our in house economist Thomas young here with me We want to talk a little bit more about mortgage payments as a follow up to our intro last week for our IMF guest. Thomas, welcome back. It’s good to be back. So mortgage payments, what makes up the mortgage payment calculation? At meet the Masters we talked about our oae what we call the big boring idea, return on amortization. Talk to us about you What makes up a mortgage payment?

Thomas 2:01
Yeah, so last week, we briefly talked about a whole bunch of things that can affect indirectly the mortgage payment. But there are really only three things that go into the mortgage payment calculation. It’s a function of the three things, total number of payments, monthly interest in the loan amount and the payments, the result of those three things.

Jason Hartman 2:21
Okay? So obviously, that interest rate has a giant impact. And one of the things you didn’t mention kind of relates to what I said about amortization. Remember, the loan doesn’t have to be amortized. Now, amortization comes from I believe it’s a Latin word, a mort, which means to kill. In other words, you’re killing the mortgage by paying principal and interest every month. But certainly you can have interest only loans. They’re not around on mortgages anymore, but they used to be negative amortization loans, where you’re actually paying less than the interest do and none of the principal So the loan does what they call negative amortization, where the balance actually increases. And you don’t see those anymore because, well, we had a great recession just over 10 years ago. And the lenders have a dip their toe back into that one so far as I know, but it’s interesting, right?

Thomas 3:16
Yeah. Then, you know, the world of finance.

Jason Hartman 3:19
Yeah. You know, Thomas, one of the things that puzzles me is, as we talked about last weekend at meet the Masters in the big boring idea, is this concept of what we’re calling ROI or return on amortization. You know, very few people really realize how beneficial that becomes. When you get you know, 710 15 or more years into that mortgage, where the, you know, the tenant is paying that mortgage off for you. And you really get a very significant return on amortization. If people go to Jason And click on the Properties page and look at some of the performance there. Those are only for the first year. So the return on amortization or a principal reduction, same idea, it’s very low. But when you go further into the loan, you know, 1015 years in, that becomes huge, doesn’t it?

Thomas 4:19
Einstein said, it’s hard to understand how amazing the compound interest is. But its amortization. The return on an amortization is amazing. It has just as much of an inspiring effect on finances does. It’s just amazing.

Jason Hartman 4:36
Yeah, it really is Einstein. In fact, I think he said it compound interest is the eighth wonder of the world, right? Yeah. Yeah. Pretty amazing stuff. So you want this working in your favor as an investor? Not to your detriment. Most people have it worked to their detriment. We as investors have it worked to our favor. So when you’re looking at calculating a mortgage payment, as we talked about, before, you You may want to look at a 15 year loan versus a 30 year loan, because typically you’ll get a lower interest rate. But usually, it doesn’t offset the benefit of inflation into step destruction. And it pays to actually take the higher rate and the longer term. That may not always be the case, though, because in a market where interest rates are higher, like one we might experience in the future, it might be better off to take that 15 year loan, and just chunk out some of that interest. But today, I definitely think the 30 year loan, even though you’re going to pay a little bit higher interest rate is well worth it. What do you think Thomas?

Thomas 5:40
Oh, I agree. Most, you know, I don’t know the percentages maybe 75 80% of the time, it’s probably more beneficial to do the 30 year over the 15 year, obviously it depends on individual situation and

Jason Hartman 5:51
expectations of the future. Yeah. So if you think rates are going to go up a lot, and you can get a low 30 year, three decades. Long mortgage today, hey, lock it in. But if you think rates might be lower in the future in the distant future, we’re talking, you know, many years 10 or 15 years, maybe it might be better to do the 15 year loan. So, you know, expectations are a big part of it for any investor, as you said, right.

Thomas 6:20
Yeah, I think the world of finance is, you know, is an expectations world.

Jason Hartman 6:25
Yeah, no question about that. It’s been said that the stock market is just a reflection of a giant number of investors expectations toward the future. And, and that’s really what the economy is, too, isn’t it? Yep. Well, Thomas, any other thoughts on this? Before we get to our guests,

Thomas 6:39
think carefully about the amortization. It’s amazing what it can do to your return.

Jason Hartman 6:44
Yeah, it can really, really benefit you as an investor. Fantastic. Thanks for joining me and let’s go to our guests. Hey, I’d like to dive into an interview with our local market specialist in South Central Pennsylvania. Now when I was a little kid, I used to live Live in Pennsylvania, I’ve always thought this is a good market. But finding the right team there has been challenging. And I think we’ve cracked the code. they’ve sold over 2500 homes locally, are really, really active in this market. So I’m looking forward to hearing more. So what makes South Central so great?

LMS 7:18
That’s a real good question. South Central Pennsylvania, based on its proximity, just a short drive from the Capitol in Harrisburg, about 50% of the units we do on an annual basis are actually in Harrisburg and the surrounding neighborhoods. We’re also about 35 minutes north of Baltimore, where the prevailing wage and Baltimore is, you know, considerably higher than what it is in South Central Pennsylvania. So we find that we have quite a few people that live in South Central pa but commute it’s a relatively short commute about you know, 25 to 40 minutes, depending on whether you’re headed north or south. So the you know, average price in our area. is only about 160. And with a short commute, people can earn wages pushing the six figure. So we’re very centrally located. And neighboring those two really thriving job markets. So people can buy and live here at a reasonable cost of living and then make a short commute and you know, sometimes double their income.

Jason Hartman 8:19
Yeah, that’s fantastic. So that’s a really good rent income ratio or price to income ratio. Yeah. And we’ve seen that on a lot of our markets over the years. Now talk about the resurgence of these areas. I mean, Baltimore has some stigma attached to it, certainly, but you know, like everything, it’s micro markets. Okay. And, you know, it all comes down to neighborhoods and sub markets and so forth. Pennsylvania has been a very impressive comeback story. You know, just several decades ago, we had Bruce Springsteen, talking about how everything was so blighted. Do you tribute that to just good governance, good management? What’s going on?

LMS 8:57
It’d be hard for me to probably give the credit credit is due. But we’ve seen on our end in Pennsylvania, particularly in our market has been a commitment to industry and job creation, as you get through some of the statistics, which I won’t bore you with a lot of that information now, but there’s been a tremendous job growth in this particular area. And then, of course, the job growth drives, you know, the demand for housing. So it started I mean, I would say, you know, probably in 2009 to 2010 is really where we started to see the increase in job availability, the increase in wage, and then as we’ve all seen it, and you’ve been doing this long enough, where you’ve seen the the changing markets, the real estate kind of followed shortly thereafter. So used to be back 10 years ago, half the people I knew were, you know, either unhappy with their job or, you know, looking for one and now I can honestly say that, you know, our job market here is the best that I’ve ever seen and has been that way for about the last eight to nine years and seems to be getting better. Yeah, I mean, what’s driving The job market, you know, a few key employers and this kind of speaks back to who is that target tenant in the properties you offer. So for us, what we’ve seen is the majority of our tenants have been a younger profile that wouldn’t necessarily classify them as millennials. But with our renovations we attracted what I would say is a pretty high quality tenant or average income is for our tenants above the county and state average. The job market has mostly been there’s a couple key employers so about eight minutes from my office is a huge Harley Davidson plant. An entry level employee there works 40 hours a week and makes about $75,000 a year working on an assembly line. So typically, that person that’s making that type of income can buy a quarter of a million dollar house in our area, and that’s a pretty substantial property right? We’re also about 30 minutes from Gettysburg. I’m sure everybody that did their history homework knows what Gettysburg is right now. Dr. a tremendous amount of tourism traffic and always has and then that area around Gettysburg has thrived over the last couple years and they’ve really capitalized on the tourism where it used to just be the park and you know maybe the the mile or so around the park was busy but now that’s expanded well into Adams County and 15 to 20 miles surrounding the park. There’s hotels and they just built a Gettysburg gateway, which is a big movie theater and shopping district. They got a big outlet center up there. There’s a gated Lake Community right off of the battlefield as well. That’s been a super hot location for us not only with buy and resell but also in the rental market. So Hanover shoe handovers, a small little area just outside of York between here and Adams County employs thousands of people Snyder’s foods, Martin’s potato chips. There’s huge industry and a lot of these companies you know Harley Davidson has been in business for I mean, I’d be lying if I told you I knew the exact year but they’ve been here as long as I can remember and I’ll be 44 This year, and that’s always kind of been the job that everybody wanted. Right? If you worked at a factory around your county and Adams County, your goal was to get that Club’s job at Harley Davidson. So there’s definitely some some key larger areas, you know, or larger employers here that really drive the prevailing wage. Yeah, right. Right. Good. Tell us more about the city of but then I want to ask you about the target properties and the rehabs You do? Yeah, I think you have more to say, on the economy, in the area and so forth. And the job creation, you know, a lot of these are local to our area. And while they might seem big in Pennsylvania, on a national level, they might be small, but there’s giant food stores. I mean, certainly with the government, right being just 25 minutes from Harrisburg. There’s lots of government positions and jobs that provide a tremendous amount of stability when it comes to benefits and wages and things of that sort. You know, we’re only a 40 minute drive from three different army bases. So we see a lot of people that you know, commute to those different areas. Yeah, so for an economic standpoint we’re heavy industry around this area. Right a corporation Harley Davidson we talked about giant food stores pretty substantial agricultural and food processing and Adams County there’s muscle mins applesauce, I’m not sure if you’ve ever heard of that. It’s my favorite. But there’s a huge apple orchard area just outside of Adams County about 40 minutes west of here. So those are just a few you know, so the the government some of the bigger manufacturers, Hershey foods is one of our core markets. It’s about 35 minutes north of my office. They run a huge entertainment company. It’s kind of like six flags. I’m not sure if you’ve ever seen Hershey Park, but they have a big venue up there that hosts huge concerts and then the food’s right. They make all the chocolates and candies that we love. That’s where they make my personal favorite Reese’s Peanut Butter Cups. So that’s a huge you know, all of the manufacturing for her. She has done 3035 minutes north of here. So a big big employer for this area, not only the parks and you know entertainment industry that up there with their food industry up there is huge for us.

Jason Hartman 14:03
Yeah. And not to mention that chocolate is the food of the gods. So, exactly. I mean, I think the only thing I might like better than income property is chocolate. So you know,

LMS 14:12
if you can pair them together, it’s a perfect match. It really is a perfect match.

Jason Hartman 14:15
Yeah. Okay, so transportation. You know, one of the documents, I’m looking at talks about, you know, strategic location, transportation network, etc.

LMS 14:26
So tell us about the transportation network and how that fuels the economy there. So I’ll reflect back a little bit on the beginning of our conversation. There’s two main interstates that run directly through our hometown, its route 83, and route 30. And 83 directly runs from Harrisburg, the capital of Pennsylvania, down in the Baltimore, Maryland, which is obviously a large metropolitan area. So where we’re located is the direct connector between those two. So people that commute you know, obviously have easy access, like we talked about if they commute to either one of those areas for employment. You know what might otherwise be a two hour drive because of our proximity to those major interstates it gives them easy access to cut that drive time in half and makes it much more reasonable for someone to live in a different area than where they work. And then route 30 runs east and west of here, which connects our Lancaster market to our Adams County market. It’s also a major pastor like we have a large, cold storage company called s3 that sits directly off of Interstate 83. That supplies somewhere in the neighborhood of over 1500 grocers with their cold storage directly out of one facility. So those two main interstates make it super easy to get to Baltimore for me if I want to go down to Baltimore and catch a baseball game, it’s a 40 minute drive. And I’m literally three minutes off the interstate. So just super easy to get East West north and south to major metropolitan areas from from where we live the commute super easy.

Jason Hartman 15:56
Yeah. Okay, so let’s talk a little bit about the target properties. What properties, you pick what properties you’d like as long term buy and hold rental properties, then let’s go into you know, after we talked about that kind of target property and the target tenant a little bit, what you do in terms of your rehab for these properties.

LMS 16:15
So for us what we look for, just like any town, we have a city, right, so we have our center city. And then so for us where we start from this area surrounding our city in established residential neighborhoods, we’re typically looking at anywhere from two to four bedroom, single family homes, we like our target rents to be between the 1200 to 1500 range. You know, as far as location wise, we’re always looking for the same locations where someone would want to live right. So when we target rental properties, even though they’re there are rental properties, we want to make sure that these are locations and neighborhoods where someone would would want to buy a home as well. Right will typically find our average rental property and establish neighborhoods, easy access to those major interstates that we talked about in good school districts with average or below average tax basis where, you know, we’re very focused on what the, you know, the yearly real estate taxes are for those particular properties. So then from a renovation perspective, we focus on really three or four core, non negotiables for us, which when we talk about major systems like hbic, roofs, windows, doors, Kitchens and Baths. When we approach these renovations, we go in with either the intent to replace with brand new or that those existing systems at the time of purchase at least 10 years worth of life expectancy. So the major mechanicals are our primary focus, right? Because we understand certainly the cost of those are relatively you know, substantial. So when we approach our renovations those major mechanicals have at least 10 years of useful life and if they don’t, they’re brand new, we replace them at the time of a renovation. When we do Kitchen and Bath, we’re doing typically ground up Kitchen and Bath remodeling. Most of our homes will get either new cabinets and countertops which are typically solid surface. When we replace hbic systems, we’re using high efficiency systems. They’re being installed by licensed tradesmen. We have very specific quality standards. We have one project manager for roughly every six projects, they visit those projects no less than two times per week. We really really, you know, drive hard, the different phases of the project and we have quality inspections built in to each one of those construction phases. One thing that we’ve done, it’s a little unique release, I believe it’s unique, is we do two home inspections on each of our properties. And we really do it for our own peace of mind. We do want it the beginning of the renovation and the reason we do that is we don’t want to identify any defects that we otherwise might not have detected. So we pay a home inspector, they go in for, you know, four and a half, five hours and they dig around on our property before we start renovations. That way, if we can identify any defects that need to be addressed, we want to include that in our scope of work. Then at the conclusion of the renovation, we actually do another home inspection, because when I’m verify the integrity of the work that’s been done. So we’ve done a four six week project, our project managers overseeing the renovations, we’ve done our four to six quality checks. We control the material selection, we’ve we’ve always bought the majority of our construction materials from Home Depot, we supply all the materials so that we know that you know, we’re supplying quality materials. But at the end of the project, we send that person in that home inspector to go in and do that home inspection to verify that all the work that we’ve done, plus the items that were addressed on the original home inspection have all been taken care of. So should a buyer get a home inspection then Or what do you think about that? I would always encourage them to do so. Okay. Typically a home inspections and our areas less than $500. I’m a buyer, I’ve renovated over 2500 homes and I get home inspections on every house that I buy, right. So even after the extensive experience, I have renovating homes, I still like to have a home inspector, tell me everything’s okay. I’m glad you said that. Okay, good. So we have we actually offer so that final report is available to any buyer. You know, that’s something we’re willing to share with someone if they say, hey, let’s take a look at that final home inspection you have done I may or may not choose to do another one. And if they want to use that and for their records, that’s fine. But we deal with, you know, several Home Inspection companies here locally, and I would encourage anybody to get a home inspection.

Jason Hartman 20:46
What do you do in terms of the property rehab? Are there certain things you always do? Tell us about the standards for your rehab as you would, and I know you’ve alluded to it already, but tell us more. Give us an idea as to how that works. No

LMS 21:00
problem. So we start from the major mechanicals, and we work our way effectively out, right? So the first thing that we do is we inspect the roof, the windows hbic, plumbing, electrical, Kitchens and Baths. And we want to verify that those systems have no less than 10 years worth of useful life. Those are the first things we address if they don’t have 10 years worth of useful life, we’ve replaced them. So let’s say the roof on an existing property doesn’t have 10 years of useful life when we replace it. We replace it with a 30 year architectural shingle. So by 30 year, I mean that shingles guaranteed for 30 years, typically our hbic systems come with no less than a 10 year manufacturer’s warranty. And then from cosmetic or, you know, let’s say carpentry related renovations where maybe we finished the basement or you know, we’ve installed some new flooring, we updated the plumbing and electrical. Anything that we’ve touched on the inside of that property comes with a little One year, Craftsman warranty, you know maybe it’s not a material failure, it’s it’s something that you know was done during the renovation that didn’t hold up. It comes with a one year workmanship warranty that we stand behind and we’ve been in business to shy of 14 years now. So we have, you know, over 30 subcontractors that we work with on a consistent basis and occasionally we’ll have something come up where an investor we sold a property to maybe three to nine months after they’ve purchased the property get, you know, something that pops up and it’s maybe there was a piece of hardwood flooring that’s come loose or you know, there’s a small plumbing leak. That’s something that we did you know, nine months earlier, we stand behind that workmanship for one year. And that supersedes any manufacturers warranty right? So you get the combination of both. Anything that we replace comes with a manufacturer warranty, any workmanship issues we back for one year,

Jason Hartman 22:53
okay? explaining the warranty it just a little bit more. someone buys a property from you today, eight months. Go buy, something goes wrong. What do you cover? What don’t you

LMS 23:03
cover? So anything that we replaced, adjusted or worked on is covered. Let’s say for example, we installed new interior doors, right, or we installed a screen door. And there’s a tenant that occupies that property, they dispatch our property management company and say, my storm doors come loose won’t close correctly, the Property Management Division would notify us inside of that system, it would show that the purchase date is inside of one year, and they would automatically notify our maintenance department. That’s a warranty issue. We would go out obviously identify that it wasn’t, you know, some type of tenant issue where if they made this the damage or otherwise, we would then just make the repair and build it internally. Hopefully, that addresses your question about what a what, quite frankly, the investor wouldn’t even know about it, it would be addressed. It would be repaired and build on automatically. And Okay, so,

Jason Hartman 23:57
yeah, when someone buys a property from you The hbic system new is the water heater new or does it depend?

LMS 24:04
The answer is it depends, but it’s one of two things. It’s either got a life expectancy of 10 years or it’s brand new. Okay. Those are the only two variations of what we consider to be, quote unquote, turnkey.

Jason Hartman 24:19
Okay. Okay. Tell us about the well, what else you want us to know about rehabs? I mean, we could talk all day on this. I know, but I just want to give people an overview, because I want to go back to the sweet spot properties, you know, what price range? Are they? You know, what do they rent for? Those types of questions? We got to make sure we answer that. But, but more on the rehab. Just quickly.

LMS 24:39
Yeah, I mean, I think just as an overview, we approach major mechanical systems as a non negotiable for us, like we talked about, it’s either 10 years of life expectancy or brand new, right, that’s a non negotiable for us. It’s a standard that we’ve always used and will continue to use moving forward, typically with inside of our, what we consider to be turn items where you know, let’s You had a good tenant that occupied the property for two to three years they’ve made the decision to move on, the property goes vacant, and we send property management in to do an evaluation of what needs to be done to get it re rented. Typically, with our flooring, we like to use luxury vinyl planking and hardwoods and laminates, these items do not need replaced each and every time a tenant moves out as opposed to carpeting. So we really tried to limit the amount of capital investment each time a property because because reality is you own a property for 15 years, you could have four tenants or you could have 14, right? So we want to put that particular investor in that property in a position to where if the property’s well taken care of and maintained that we should really limit the amount of money that needs to be spent each time a new tenant moves in. So we focus on using more durable materials, even though our cost up front is a little bit more expensive. It limits that amount of money that needs to be spent, you know, over the course of the next 15 to 30 years. And then we’re just very intentional about quality. I mean, when it comes to renovating properties, you know, our primary focus is quality. So we’re very intentional about the time that the project managers that you know is on the job, the amount of inspections that are done our exposure to a home inspector at the conclusion of the job, we’d rather get out in front of any of those issues because when you’re when you’re dealing with properties, you’re going to have mechanical failures. So we want to make sure we identify those early and often so we can address them. So during the ownership period of the property, there should be minimal to very little maintenance that’s required. So that’s our focus and then when we go into these we know that you know, you buy it once but you own it for the next 25 to 35 years. Right right. So we really approach the renovations from a longevity standpoint, and trying to minimize maintenance good I like it, I like it.

Jason Hartman 26:50
That target properties price range in rent range,

LMS 26:55
are typical property value ranges from a 90,000 dollars to 150. So occasionally we’ll get some, you know, a little bit more expensive, we don’t really go much below that. Anything below that $90,000 price range for us kind of compromises the location and what I would consider to be the quality of the tenant, because it really drives for us 9215 or $150,000 property is about 1000 to 1500 dollar a month rental. And normally, you’ll find that someone that’s running between 1000 to 1500 dollars a month is making at or above our median income, right? So for our area that’s around 50. So thousand dollars, which means they have an established position, you know, more than likely have, you know, longer tenure on the job if they’re earning that type wage. So we specifically target properties that will appeal to our ideal tenant. Does that make sense, sir? Okay, so So how much does that property cost to buy and how much does a rent for each month? Typically, I’ll say a $90,000 property will rent for between 950 and $1,000 a month. And now it’s sort of incremental all the way up to, you know, our higher price points that are maybe 150 to 170 would be on the higher end of a property that you would purchase in our market. Once you get a typically 1% of the sale price, so $150,000 property should rent for 1500 dollars a month. Okay,

Jason Hartman 28:18
that’s pretty that’s pretty good in this market for sure. Some people are probably asking, what’s the catch? And I’m, there’s no Hoa on these properties right there. These are not an HOA years,

LMS 28:30
I would say less than 10% of our properties have any Hoa or condo fee or anything associated with the property you have any section eight we do, okay? What percentage is that in six and a half months. We can be selective about it and we have market rents and then section eight will make a decision about so the lower end of our properties, let’s say 80 to $100,000 we find the sweet spot to be section eight. And our properties are typically such a good fit because The inspections that come along with section eight from a safety perspective are so easy for us because our standards are higher than the section eight standards. And then of course, there’s there’s the guaranteed income that comes along with it the annual inspections by section eight. There’s a lot of requirements and responsibility that the the tenant need to maintain in order to retain that section eight voucher. Yeah, but I would say it’s less than 50%. That’s, it’s on our lower priced properties between 80 and $100,000. is normally section eight, anything above that, we found that it’s a little bit more desirable for us to go with the market rent when it’s over about that thousand 1100 dollars. Probably, I mean, I’d say it’s less than 50%. But maybe closer to you know, 40% so it’s close. Okay, so I’m wondering, what’s the catch, and I bet a lot of listeners are because that rent to value ratio is very good considering the market we’re in. What are the property taxes like what are the insurance costs like so insurances? I mean, let’s say 140,000 dollar investment properties between four and $500 annually, in my experience have been owning real estate in other states and across different markets. And that four to $500 is I would say less expensive than what I’m paying elsewhere. Okay, what about the property taxes the taxes so let’s say on an average hundred and $50,000 property, the taxes are on average, let’s say $3,000 a year, which are county municipal and then school taxes all combined. Okay, good.

Jason Hartman 30:30
Why Why did you get into and why do you love real estate?

LMS 30:33
wrap it up with the easiest answer for that is, I mean, I enjoy the transformation of property right. So I got into this business buying distressed properties and renovating properties. And you know, at that time, what excited me about the real estate business, which was almost 15 years ago now was the transformation of the properties right? I was really passionate about transforming a you know, really destitute property and turning it around to you know, some of the show where

Jason Hartman 30:59
It’s a nice creative venture for sure. I like that too. I like to create,

LMS 31:03
that’s what got me into it, but I can tell you what keeps me in it is the human element, right. So like, typically when we buy properties and we buy most of our properties direct from seller, so I’m sitting down with, you know, families and you know, a lot of the properties we purchase, or maybe an estate from, you know, someone that passed away and the families, you know, tasked with liquidating the assets. And we buy a lot of property in this area from folks that are either downsizing or, you know, relocating. So on the front end of this business, I’m really able to help out over 200 people a year, liquidate real estate, and most of the properties we buy are in some need of repair, and our average sellers over the age of 65. So if you can imagine, you know, when I turned 65, probably at the top of my list won’t be remodeling my own. I would hope that I would be in a position to sell my home for a fair price, and that point if I want to relocate, then I would have the flexibility to do so. So the short answer is, it’s the human factor for me that really makes me passionate about real estate, like, I buy and sell homes, but really what you know, kind of drives me and gets me out of bed in the morning and keeps me up at night is how I can provide a better service to the people that come with those properties. It’s super exciting when we see you know, particularly a younger professional that’s, you know, push their way through college and work multiple jobs and or maybe scared to buy a home, but know that they don’t want to live in an apartment with four people and would like to enjoy not owning a home but living in a property of their own. Right so they make the decision to rent, but they like something that’s been renovated right and typically in most rental markets, you’re stuck either being in some large multifamily that might have not been renovated for 15 years or a non owner occupant person that moved out of a property and rents it just to offset their mortgage payment doesn’t want to spend any money on it. So just to see people and the joy that it brings to them to have the opportunity to live in a home that’s been renovated without making the big commitment of buying a home, right, particularly in that younger demographic, a 25 year old kid today is scared to death to buy a home when I was

Jason Hartman 33:18
25. He’s already he’s already got a mortgage payment. He just didn’t, yes, when

LMS 33:22
I was when I was 25. I was four years into a mortgage and my dad was screaming at me that I got started too late and I’m never gonna make any money because I didn’t buy a house. Yeah, right. So yeah, I mean, for me, it’s really the human factor. It’s, you know, certainly the real estate is the, the asset that’s exchanged. But for me, it’s, it’s the involvement with the people right. And, you know, for us as as we’ve grown our turnkey business and giving investors the opportunity to build wealth and partner with folks like yourself is just another extension of that, right. So So that’s, that’s really what I’m passionate about why I’m in real estate, it’s really the people that are on every side of that potential transaction from The seller that I’ve helped liquidate the estate, to the contractors that we employ to the lenders that we facilitate business through to the partners like yourself that we’re able to do business with, and then to the eventual investor, homeowner and tenant, I mean, on any one transaction for me, there’s four to seven people involved. And I know that might be the right response.

Jason Hartman 34:20
Yeah, I was I was I was I was looking for the money response, you know, like, return on investment

LMS 34:26
with it. But for me, that’s a residual benefit. You know, if you provide a valuable service, the money has a way of taking care of itself, right. Like

LMS 34:35
that comes with it. Absolutely not. Not what

LMS 34:38
I’m passionate about. Absolutely test.

Jason Hartman 34:40
Well, good stuff. Thank you for the profile on your market. That was a long one, but we went into a lot of depth. So we appreciate it and we will look forward to sending you more investor buyers. Thanks again. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes, be sure to check out the show. specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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