In the ever-evolving world of real estate, striking a perfect balance between strategy and innovation is crucial. For many aspiring investors, the question often is, “How do I start and build a successful portfolio?” Look no further than Ryan Chaw’s proven approach, which emphasizes student housing, automation, and smart property management.
From Pharmacy to Real Estate Mogul
Ryan Chaw’s transition from a full-time pharmacist to a successful real estate investor is both extraordinary and inspiring. By leveraging a “room hacking system,” he managed to multiply his rental income and accumulate significant wealth by the age of 28. At 31, Ryan retired from his pharmacy career, choosing instead to live off his rental income. His journey underlines the potential of real estate investment as a means to achieve financial freedom.
The Power of Room Hacking
Core to Ryan’s strategy is the concept of renting out single-family homes by the room, a model that significantly increases rental income as compared to leasing an entire property. For instance, by renting bedrooms individually at rates like $700 each, he maximizes earnings, often tripling the income compared to traditional rentals. His properties consistently generate substantial monthly cash flow even after mortgage and operational expenses, showcasing the financial viability of this model.
Automated Tenant Management
Ryan’s system relies heavily on automation and virtual assistance to streamline tenant management. By employing virtual assistants in the Philippines, he efficiently manages marketing, customer service, and day-to-day operations. This international team helps cut costs while ensuring smooth property management.
Ryan’s approach includes using automated platforms like Avail to list properties across various housing sites, coupled with Google Apps Script to manage lead responses automatically. He’s also able to scrutinize and select quality tenants using his PRIME method, thus ensuring stability and reducing tenant turnover.
Focused Strategy in Diverse Markets
Ryan’s success spans across various cities, from Sacramento and Stockton in California to Huntsville, Alabama, and Cleveland, Ohio. His focus primarily targets students in graduate programs, ensuring a reliable tenant base that seeks affordable yet quality housing. By avoiding distressed property purchases and instead acquiring properties at market value, Ryan’s model distinguishes itself from traditional real estate strategies.
Renting by the Room: A Community Approach
While some might view room sharing as unconventional, Ryan finds that many students prefer this co-living model as it tends to be more affordable than campus housing or apartments. By maintaining shared common areas and ensuring amenities like furnishings are provided, these properties become attractive options for students. Moreover, local “boots on the ground” and incentivized students also assist in property tours and maintenance, creating a community-driven management approach.
Achieving Real Estate Success for New Investors
Ryan is a strong advocate for new investors starting as soon as possible. His blueprint suggests that with the right number of properties—typically around 4-5—an investor can replace their traditional job income over 5-8 years, achieving financial freedom. Properties under his model yield between $1,500 and $4,000 in monthly net cash flow, enabling investors to build a sustainability-focused portfolio.
Resources and Support
For those eager to dive into real estate, Ryan offers a free PDF guide on his website, which outlines how to get started. Jay Conner, a host who collaborates with Ryan, also provides valuable resources for understanding the role of private money in real estate deals.
Ryan’s journey and system demonstrate that success in real estate isn’t merely about owning properties but developing a strategic and automated process for managing them. It’s about creating a balance between income potential and tenant satisfaction while embracing new tools and methodologies to streamline operations.
By following the roadmap laid out by Ryan Chaw, aspiring real estate investors have a comprehensive guide to building a lucrative and sustainable portfolio. Whether you’re a newcomer or a seasoned investor looking to optimize your strategy, his insights offer valuable lessons on maximizing potential in the world of real estate.
10 Discussion Questions from this Episode:
- What motivated Ryan Chaw to transition from a career in pharmacy to real estate investing, and how did his initial experiences shape his current business model?
- How does Ryan Chaw’s “room hacking system” differ from traditional real estate rental methods, and what are the financial benefits of renting the room?
- Discuss the key elements of Ryan’s Prime Method for identifying high-quality tenants. How do these elements help ensure successful property management?
- Considering Ryan’s use of virtual assistants and automation in property management, what are the potential challenges and benefits of adopting similar strategies?
- How does Ryan evaluate potential markets for student housing investments, and what factors contribute to the success of his business model?
- How does Ryan Chaw handle the logistics of shared living spaces, such as bathrooms and kitchens, to ensure tenant satisfaction and minimize conflicts?
- Explore the financial implications of Ryan’s method that allows him to pay full retail value for houses while maintaining profitability. How does this contrast with other real estate investment strategies?
- What role does Ryan’s system of incentives and automation play in his overall business operations, and how do they contribute to efficiency and tenant acquisition?
- Discuss the importance of market research and strategic placement of advertisements in Ryan’s tenant acquisition strategy. How do these practices contribute to high occupancy rates?
- Reflect on Ryan’s advice to new real estate investors. Why is it important to start investing early, and how might this advice influence someone considering entering the real estate industry?
Fun facts that were revealed in the episode:
- Room Hacking Boosts Income: By renting out individual rooms instead of entire properties, Ryan Chaw triples his rental income. For example, renting six bedrooms at $700 each generates $4,200 monthly, compared to the traditional $1,500-$2,500 for the whole house. This innovative approach significantly boosts profitability.
- Cost-Effective Renovations: Adding bedrooms to a property can be surprisingly affordable. Ryan estimates that converting existing spaces like offices or family rooms into additional bedrooms costs only $1,500 to $3,000. This strategic repurposing can increase rental potential without breaking the bank.
- Global Team Dynamics: Ryan manages his properties with the help of a diverse team primarily based in the Philippines. This includes a part-time bookkeeper who handles the finances for 14 rental properties, showcasing how virtual assistance can effectively streamline property management from anywhere in the world.
Timestamps:
00:01 Room Hacking: Innovative Rental Strategy
05:19 Investing Across College Towns
08:32 Stable Long-Term Real Estate Investment
11:22 Underutilized Common Areas in Student Housing
15:01 Dividing Utility Costs Among Students
17:44 Student Tour Incentives and Management
19:06 Automated Rental Listing System
24:44 Connect with Ryan Chaw:
https://www.newbierealestateinvesting.com/guide
25:14 Begin Real Estate Investing Now
Connect With Jay Conner:
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Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.
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Becoming a Real Estate Millionaire by Age 28 with Ryan Chaw
Jay Conner [00:00:00]:
Welcome to another amazing episode of raising private money. I’m Jay Conner, the private money authority, and also the host of the show here. And, this is the show where we talk about raising private money for all different kinds of asset classes, how to raise private money for your real estate deals without ever asking for money. Well, my guest today, has raised hundreds of thousands of dollars in private money, and he’s got a very, very interesting story. He graduated as a pharmacist back in 02/2016, and he worked at a hospital in infectious diseases. From there, he migrated over to becoming a landlord. Well, he purchased one single-family home a year. So what he did, he’s slowly built up a reputation at his local college for having high-quality student housing rental spaces.
Jay Conner [00:00:55]:
So instead of renting the house out traditionally as a landlord and you’re renting the whole house out, what he did is he rented it by the room. What he discovered is that there was double the rental income and a lot more cash flow compared to renting the whole house traditionally. Well, by the age of 28, he became a millionaire and was earning multiple 6 figures in rental income, using the student rental process. Well, he teaches others how to do this very same thing. He teaches him what he calls his room hacking system, and he figures out neighborhoods with great cash flow, renovating to increase the maximum rental space. And he teaches how to find high-quality tenants and manage properties with his very own unique systems. Well, I’m so excited to have you as my guest, and you’re gonna meet Mr. Ryan Chaw right after this.
Narrator [00:01:59]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money, because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:02:27]:
Well, hello there, Ryan. Welcome to the show.
Ryan Chaw [00:02:30]:
Thank you, Jay, for having me on.
Jay Conner [00:02:32]:
Absolutely. What an interesting story. You started out as a pharmacist, then you migrated, started to become a landlord. So why leave the pharmacy and go into real estate investing?
Ryan Chaw [00:02:44]:
Yeah. So I was a pharmacist for eight years. I just first got started in buying single-family homes near my local college. And what I did was I saw my friend who was doing the same thing, and he, in college, rented out to his college buddies, and he was able to not only live for free but also make cash flow on top of it. So I just started, in 2016, I bought my first property in Stockton, California. It was $262,000, and I was just off to the races. I just bought one a year. And I wanted to, of course, live life on my terms, be able to basically, do what I want, where I want, with whomever I wanted to do it with.
Ryan Chaw [00:03:27]:
And so, eventually, by buying one property a year, I was able to replace my full-time pharmacist income. And, from there, I basically was able to retire at the age of 31. So I retired in August of twenty twenty three from my pharmacist job. And, yeah, ever since, I’ve just been living off the rental income and the cash flow.
Jay Conner [00:03:50]:
So in other words, you got to that point. And so the question came to your mind, which was, what’s next? I mean, you don’t have to get out of bed. You don’t have to go to work. But for goodness’ sake, you gotta have a purpose in life. So you started renting out by the room, and so then it sounds like, really, your most recent passion and purpose in life is now sharing this technique with other people who would like to be doing the same thing that you’re doing. Right?
Ryan Chaw [00:04:23]:
Yeah. Exactly. And just expanding my student housing portfolio. I built up a great reputation in the local area, and so, you know, I have tons of students. I have 90 students right now, and I have a team that manages it. And I spend a lot of my time training my team. It’s a virtual assistant team, and a lot of them are based in the Philippines. And, you know, on the side of this, I also mentor people, teach people how to use this strategy because typically on a single-family home, you could be making, let’s say, it’s six bedrooms.
Ryan Chaw [00:04:56]:
You get it to six bedrooms. You rent out each bedroom for 700 a month. That’s, like, $4,200 per month on a single-family home. And most of these single-family homes can be in the $300,000 price range or even $200,000 price range.
Jay Conner [00:05:11]:
So does your system, does your process work in any college community?
Ryan Chaw [00:05:19]:
Yeah. I have three or four different cities that I invest in. I’m in Sacramento, Stockton, California, and Huntsville, Alabama, and I’m also in, Cleveland, Ohio. So it kinda works for every market that I’ve been in, and you just have to find a very good quality college. Not necessarily Ivy League, but it does have a college that has a good amount of graduate programs available for, like, health care workers, engineering, law degrees, etcetera. These students are focused on their studies, and, usually, I have graduate students and, like, medical interns, medical residents, and fellows, for fellowships. And that’s kind of like the bulk of my student population or the bulk of my, tenants. And so that makes for a really good tenant base while also making a high rental income on a lot of these properties.
Ryan Chaw [00:06:15]:
And keep in mind, you know, since they’re just single-family homes, my, mortgage payments range from as low as 1,300 to maybe up to 2,000 a month, while my rental income is, like I said, around 4,200 per month. My highest rental income is a 10-bedroom property that’s making 6,500 a month.
Jay Conner [00:06:36]:
Very nice. Well, in this process, in this system, it sounds like, possibly, you could pay full retail value for a house and make the numbers work because I mean, is that what you’re doing? Are you buying these houses at just regular retail value?
Ryan Chaw [00:06:58]:
Exactly. Yeah. Definitely. Why would I, pay more compared to, you know, somebody else? Right? I just bought it at market value on the MLS.
Jay Conner [00:07:07]:
Right. Well, that’s a that’s a very different model than, you know, a lot of real estate investors. A lot of real estate investors in the single-family space are looking for distressed properties, looking for properties that they can, you know, buy at a discount. And, of course, you know, unless you know how to find those and you’ve got systems in place, that can be a challenging situation, you know, finding properties at distressed, you know, distressed prices.
Ryan Chaw [00:07:37]:
Yeah.
Jay Conner [00:07:38]:
And then the renovation. Of course, I’ve I’ve rehabbed over 500 houses here in in our local area of only 40,000 people. Of course, that’s over a period of time of 2,003. Mhmm. So this is a would you also call this model this business model coliving? Is it the same thing as coliving?
Ryan Chaw [00:07:58]:
It’s similar. Yes. But it’s specifically student housing because the majority of my people are students or healthcare workers. So it’s I pick up a lot of, like, travel nurses or residents, but almost everyone stays for a full year, essentially. Unless I’m buying the property, like, let’s say, in January, then I might do a six-month lease until July or August. And then from there, it’s August to August leases. So everyone ends up on an August-to-August lease. So it’s, you know, similar to the co-living model in that sense.
Ryan Chaw [00:08:32]:
It’s very stable. It also makes just as much as or sometimes even more than Airbnb. And I have one-year leases, so I don’t have to worry about moving people in and out all the time and having to, you know, pay for a lot of cleaning fees and all of that. It’s just a very stable, very secure way of buying real estate. Plus, adding those additional bedrooms doesn’t cost too much money. A lot of people think, oh, it’s gonna cost me 5,000 or $10,000 to add a room. Well, that’s not usually the case. A lot of times, you can repurpose an existing room like the office or the family room as a bedroom just by putting in furniture.
Ryan Chaw [00:09:12]:
And if you put up some drywalls and doors just to maybe, you know, separate out part of the living room to be a bedroom, then it’ll cost anywhere from just, like, 1,500 to maybe 3,000. Usually, it’s, like, 1,500 to 2,500 per room that I add, which is not a huge significant amount. It’s something that I make back within about two or three months from the additional rental income that’s made on that room.
Jay Conner [00:09:38]:
Right. So how many bathrooms do you need, corresponding to the number of bedrooms?
Ryan Chaw [00:09:45]:
Yes. So I stick with a three-person to one bathroom ratio. So, however you like, let’s say you have six people at a house, I wanna have at least two shared bathrooms, so it’s three to a bathroom. If I have a private bathroom, I might put a couple in there because those two can share that bathroom, and the other people can share the rest of the bathrooms at the house.
Jay Conner [00:10:04]:
Right. So if you got three people staying in three different rooms sharing one bathroom, how do they know who gets to use the shower when?
Ryan Chaw [00:10:14]:
Yeah. So that’s something they work out among themselves. It’s usually not too hard for them to just figure out, like, okay. He showers later. Somebody else showers in the morning. And, again, like, just with three people in a bathroom, it usually works out just fine. Plus, you know, if it’s you know, you need to use the restroom, there are always two bathrooms that you can use, so you can always use the other one if you need to. Right.
Ryan Chaw [00:10:38]:
Yeah. I’ve never really had any people have, like, large issues with that. Yes. Some people prefer to have a private bathroom and will charge more for that. We’ll charge, like, a hundred, a hundred and 50 to up to $200 more for that. But for the most part, yeah, people are getting used to it, especially these college students, they’re already used to living at the dorms where they have to share with, like, 20 other people. Right? The bathtub, right. Bathroom with, like, 20 other people.
Ryan Chaw [00:11:03]:
So they’re they’re pretty happy with sharing with only two other people.
Jay Conner [00:11:07]:
Okay. Well, that’s very interesting. So, what about the shared co-living space, such as the kitchen and etc.? How does that work logistically for the common areas?
Ryan Chaw [00:11:22]:
Yeah. So they all share, usually, I have one big common area. It’s like the kitchen slash living room, or maybe I’ll have a kitchen and a living room separately. But, essentially, yeah, there’s only one or two common areas, and they all share that. What’s cool about student housing is that most of the time, these students spend their time majority of their time in their bedrooms rather than in the common spaces. You know? Nowadays, they watch Netflix or study, and it’s mainly done in the bedroom. So I have many houses where the students don’t even use the common areas. I live in a house hack myself right now, and, you know, no one even uses the couch in the common area or anything.
Ryan Chaw [00:12:03]:
So it’s, yeah, it’s pretty good in that sense. Let’s say there is an issue of fridge space. We can always buy a mini fridge for somebody, for example, for them to borrow in case there’s limited fridge space. There are certain things we do too. Like, we call it the purge, where every, like, probably twice a year, I would say, we have the students all label their food, and then we purge any unlabeled food. And a lot of times, you know, there’s food that people forgot about, maybe. Right? So doing the purge at least twice a year, usually, you know, resolves that problem.
Jay Conner [00:12:38]:
Right. Now, as far as the individual rooms go for these college students, do you furnish the rooms, or do they gotta furnish their rooms?
Ryan Chaw [00:12:46]:
I do furnish the rooms. Yes. Luckily, it’s all tax deductible, of course, but I furnish it with pretty good furniture. I buy from Amazon, Walmart, and Target. I think they have very decent furniture for sure, or Home Depot, of course.
Jay Conner [00:13:01]:
Alright. So what goes in a room? What do you furnish it with?
Ryan Chaw [00:13:04]:
Yeah. I have a bed and, mattress. I have a study desk. I have a chair, like a study chair, a nightstand, and drawers for the clothes and some sort of closet. It could be either a standing closet or a closet that was already built in.
Jay Conner [00:13:19]:
Okay. So let’s talk about the money in this business model. On average, if you’re in contrast to me, on average, if you’re renting a property out, as a traditional rental, you’re renting the whole house out versus you’re renting it out by the room. How I mean, is that double? Is that triple? I mean, on average, how
Ryan Chaw [00:13:42]:
Much work? Triple. Yeah. So, usually, I would say rents in the areas that I invest in are anywhere between, like, 1,500 to 2,500, maybe a maximum of 2,800. But, yeah, generally, the houses that I buy for the sizes and everything, they’re around that. But by renting out by the room, 700 per room times six bedrooms, it’s, you know, it’s more like $4,200. Right. And that’s kinda just for six bedrooms. I’ve I have gone up to 10 bedrooms at a house, and, eventually, I might split that into a duplex if it’s that big.
Ryan Chaw [00:14:18]:
And so that can go all the way up to, like, $6,500 for 10 bedrooms, like, 500 on each side of the duplex.
Jay Conner [00:14:25]:
Right. So, in layman’s terms, easy to understand terms, of course, you’ve got more cost. You’ve got more overhead. Of course, you’re paying the utilities. Mhmm. And you’re paying for the water. You’re paying for sewer, you’re paying or gas.
Ryan Chaw [00:14:46]:
Oh, actually, sorry. The tenants pay all utilities.
Jay Conner [00:14:49]:
So the so the lot the so the rental of 700 per month does not include utilities?
Ryan Chaw [00:14:57]:
Correct.
Jay Conner [00:14:58]:
So how do you figure out how to charge for utilities?
Ryan Chaw [00:15:01]:
Yeah. So I add up the electric, gas, water, garbage, Internet, and I just divide that by however many students there are. So if there’s, like, six students, I’ll divide by six, and then they’ll each pay a portion of it. So, usually, it ends up being anywhere from $40 to maybe, on, you know, other, like the house that uses a lot of energy, will be more like a hundred dollars a month. But that’s pretty much it. And parking is free. The washer and dryer are free. So it’s, it’s a lot cheaper compared to a lot of the apartments and a lot of the on-campus housing.
Ryan Chaw [00:15:38]:
Like, for on-campus housing and apartments, they usually charge, like, a thousand or more. Right? And I’m charging half of that, or well, like, $7.90. Yeah.
Jay Conner [00:15:46]:
Right.
Ryan Chaw [00:15:46]:
So it’s a lot cheaper for sure.
Jay Conner [00:15:47]:
Yeah. So, are the utility bills different every month?
Ryan Chaw [00:15:52]:
Yeah. Yeah.
Jay Conner [00:15:53]:
Mhmm. Because you’re passing on to them actually what the cost is.
Ryan Chaw [00:15:57]:
Correct. So I have a bookkeeper. He works for us part-time in the Philippines. I pay him 1,200 a month, and he does all the bookkeeping for the utilities. So he’ll download all the bills for all 14 of my properties of my rental properties, and he will divide it evenly, and send out the email and everything to the tenants at the end of each month.
Jay Conner [00:16:20]:
Okay. So do you self-manage these properties?
Ryan Chaw [00:16:26]:
Depends on what you call self-managed. So my job nowadays is just training my team, but my team does the management. They do all the operations. Alright. So what about somebody who’s a full-time employee who does all the marketing and customer service, customer care? We’re thinking of taking on another full-time or part-time, either twenty to forty hours a week, VA as well, to help out with customer service and marketing. But, yeah, generally, just one full-time VA for that and a part-time VA for the bookkeeping, I was able to manage ninety-ninety tenants.
Jay Conner [00:17:01]:
Wow. That’s amazing. So how many virtual assistants do you have that are helping you manage all this?
Ryan Chaw [00:17:08]:
Sure. So I have, again, one main bookkeeper and then one main full-time VA. And then I have a few other, like, VAs that post on Facebook. And, you know, we charge what we give them, like, $2.50 a month or 300 a month just to do the Facebook posting and respond to things on Zillow and Facebook messages, etcetera. So, they also get a small commission for every person that, you know, signs a lease. So we do have that system in place as well. And then I also have a local boots-on-the-ground person to help with the tours. A lot of times, I incentivize the students to do the tours, though.
Ryan Chaw [00:17:44]:
So I’ll pay, like, $25 for each tour a student gives, and I’ll also give them another 25 if they can convince the person that they give the tour to to sign a lease. So, ultimately, you know, I tell them you can get $50 potentially for every tour you do. And a lot of students jump on that. You know, it’s a good way to give back and everything too. And then the local boots on the ground, manager, she does help with tours, but she also goes through the houses, marks off all the areas that we need to, you know, maintain and fix. And then she also has a handyman crew that can fix all that stuff.
Jay Conner [00:18:20]:
Okay. So you have a handyman crew already identified in each of the markets that you’re in. Right?
Ryan Chaw [00:18:26]:
Mhmm. Yeah. So, it’s usually like a father-son combo a lot of times, believe it or not. Well, the one in, Cleveland, she has her husband who’s a handyman, and she also has her son-in-law who’s a handyman. So between the three of them, they do all the cleaning, the handiwork for our houses, everything. You know, the same thing in Stockton. I have somebody who also is a father-son crew, and he, you know, does all the handy work for the son, or sorry.
Jay Conner [00:18:54]:
I gotcha.
Ryan Chaw [00:18:55]:
Property. Yeah.
Jay Conner [00:18:55]:
Right. So is it all the marketing, to find new tenants, is all that handled, and promoted on Facebook?
Ryan Chaw [00:19:06]:
So I have automation, automated systems. So there’s a site called Avail, a v an I l, and I, post my ad there, and it’ll shoot it out to multiple different housing sites. It goes to realtor.com, rent.com, and apartments.com Com is included in that. And what’s cool is Avail will send you email leads to your inbox, and I have a Google Apps Script. It’s called Google Apps Scripts, which basically reads through all the emails, and it’ll automatically respond to every single Avail lead. It’ll respond with our application form, our Google form. It’ll respond with pictures of our houses, our website link, and, you know, it will automate that whole process for me. So I do have a lot of, like, back-end automation for sites like Avail.
Ryan Chaw [00:19:55]:
You know, I have a back end for, like, Uloop, something called University Loop, which is specifically for students. There’s also Roomies.com, Zillow.com, obviously, and I’m trying to think about what else. Oh, Furnish Finder. Sometimes if I’m buying a house, you know, before August, I might bring in some travel nurses from Furnish Finder.
Jay Conner [00:20:18]:
Wow. That is amazing. How long did it take you to get all these processes in place?
Ryan Chaw [00:20:25]:
Oh, I mean, I built it up, like, slowly through the years. So it sounds like a lot, but, at the beginning, honestly, it was just Facebook groups. Like, Facebook housing groups are where I advertised. Probably for the first, like, four or five years, it was just like that was my main. That was all I did for marketing. I posted on the Facebook group. I got so many leads from it that, you know, my houses would be filled within, like, three to four weeks. Not even kidding.
Ryan Chaw [00:20:50]:
Nowadays, because I have more tenants and everything, I kinda rely more on referrals so I don’t have to do as much marketing. And then, you know, the automation on the back end kinda does any marketing I need to do.
Jay Conner [00:21:03]:
Right. Right. So how do the logistics work? Somebody’s interested. They want to apply. So now they fill out the application. How does the approval process work? And I think you’ve got your own system, if I remember correctly. I think you call it the prime method for exactly. Yeah.
Jay Conner [00:21:26]:
How does that work?
Ryan Chaw [00:21:28]:
Yeah. So, I can just walk through the prime method, to start. So, primes is the method to find high-quality tenants. So each letter stands for something. So p stands for placement of advertisements. You wanna place your ad in areas that people are, like, your target market is looking. So for me, college students will be looking at Facebook groups, like Facebook housing groups. They might be, you know, on You Loop or Roomies.com to find a room.
Ryan Chaw [00:22:01]:
And so those are kinda like the best places for me to post. R stands for reviewing social media. So if they’re contacting me through Facebook, especially, I like to, I allow them, I mean, I like to, like, look through their Facebook profile, make sure they’re not smokers, drinkers, loud partiers, you know, that type of thing. So I kinda take or I have my VAs nowadays take a look at what type of tenant they are. Let’s see. P r I stands for identifying the type of tenant. So is this somebody who is very needy? They seem to be very needy. They’re asking for a lot of things before they even move in, and asking us to kind of take care of, like, everything for them.
Ryan Chaw [00:22:42]:
That’s the type of attendant I try to avoid. And then m stands for measuring responsiveness. So how responsive are they to us? Are they getting back to us with the paperwork quickly? Usually, the more responsive the tenant is, the more responsible they end up being as well. And then e stands for ensuring proof of income. So you always wanna make sure you have some sort of proof that they have income coming in. So, three times the monthly rent as income. So let’s say I’m renting it out for 700 a month. I would like to see 2,100 per month coming in either from their parents or a stipend.
Ryan Chaw [00:23:21]:
A lot of students get stipends, like grad students, for example. Financial aid. A lot of students have financial aid and student loans. So those are all potential documents that they can send me, to prove that they have income coming in to cover the rent. But a lot of these people, they’re already paying, like, 20,000, 40 thousand dollars per year in tuition, so they’re usually able to, handle another 7,000 or $8,000 per year for the rent. And, a lot of times, the parents are helping them with that. So, you know, you might ask for bank statements for the parents. And so that’s the approval process.
Ryan Chaw [00:23:58]:
It’s very simple. They fill out the Google form. They show the proof of income, and then my VA usually helps them get a walk-through of the house, and then the VA will send them a lease to sign, explain the move-in process, and everything like that.
Jay Conner [00:24:14]:
Ryan, you’ve got a fascinating, fascinating system in place that you have figured out. You’ve built this out. You’ve, I’m sure, learned a lot of lessons of ways not to do this business. And you’ve and you and you’ve got it automated. So what’s some advice or tips for a newbie, a real estate investor, or someone who would like to learn about getting into this space? How can they get started?
Ryan Chaw [00:24:45]:
Yeah. You can always message me. My website is www.newbierealestateinvesting.com/guide. If you want the free PDF, that’s www. Sorry. Www.newbierealestateinvesting.com/guide. And you can, you know, put your email in there, and then I’ll get in touch with you. And you can always email me any questions that you have, or if you’re thinking of getting into student housing or professional housing, and you wanna get started.
Ryan Chaw [00:25:14]:
But what I would give as far as advice, I would say just it’s really important to just get started as soon as you can. Because if you think about it, if you want to replace your income, your w two-income, you wanna have financial freedom, it usually takes a couple of rentals for that, like four or five rentals. Because each property that I buy is, you know, anywhere from 1,500 to 2,500 up to 4,000 per month in net cash flow after expenses. So you really wanna have, like, four or five days at least. So you wanna start now because it’s gonna take a couple of years for you to get and scale to five properties. You know, maybe you buy the first year one and you wanna save up, you know, the second year and you wanna get the systems in place, so you wait a year to buy the second one. So throughout, like, you know, five to eight years, you know, you can eventually reach that financial freedom, but that’s only if you get started today. Every day that you wait, you’re pushing back the timeline.
Ryan Chaw [00:26:13]:
Every year that you wait, you’re pushing back the timeline another year. So, yeah, just get started as soon as you can.
Jay Conner [00:26:19]:
Thank you so much for sharing such an interesting, interesting strategy and and process of, investing in real estate. Thank you for giving us your time. And one more time, I wanna give out, that website of yours, which is www.newbierealestateinvesting.com/guide to get that free guide that you’ve offered. Ryan, thank you so much.
Ryan Chaw [00:26:46]:
Thank you so much, Jay. I appreciate it. Thanks for inviting me on.
Jay Conner [00:26:50]:
Absolutely. And there you have it. Another amazing episode of raising private money. Of course, if you want some funding for these deals, I can help you get some private money as well. That goes without saying. And I need your help. Yes. I need your help.
Jay Conner [00:27:10]:
If you’re listening to this show, for us to have more amazing guests come here on the show, I need you to help me with liking, sharing, and subscribing. Follow me if you’re listening on your favorite podcast platform. Give me a five-star review. And if you happen to be watching on YouTube, be sure and subscribe and click that bell so you don’t miss out on any more of the upcoming amazing episodes. I’m Jay Conner, the Private Money Authority, and I’m looking forward to seeing you right here on the next episode of Raising Private Money.
Narrator [00:27:44]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on raising private money with Jay Conner.
