Anton Ivanov is a US Navy veteran, real estate investor and entrepreneur with a 40 unit rental portfolio spread out across 4 states. His portfolio generates over $12,000 in monthly passive income, and requires less than 1 hour a week to manage.
Anton is also the founder of DealCheck – the leading real estate analysis platform for quickly analyzing and comparing rental properties, flips and commercial buildings. DealCheck is used by over 100,000 real estate investors, agents and professionals worldwide.
Connect with Anton:
- Anton’s Portfolio
- Have your spouse on board
- Market Selection Strategy
- Rent to Price ratio: 1-2%
- Finance or non-finance
- What would you do with $12k more per month?
- When will you exit the W2 world?
- Deal Check
- Where is the 2020 market headed?
Links mentioned in this episode:
[00:00:02] Anton, welcome to the show, man. Thanks for having me, Jay.
[00:00:06] So no thank you for being on here.
[00:00:08] I know it’s been a while a bit. I think we went into some scheduling conflicts all on my part and I don’t remember. I think one of the things I want to start doing for every show is immediately apologizing to the guests and say, I know we probably had to reschedule this because of a sick kid or I’m sick. We almost had to discuss it. I’m all amped up on Advo Golden sign this because whatever almendral that I started break down gold sweats a minute ago and I looked at my wife as if I know why I feel like crap right now. She goes, What’s up? I think it took more than was recommended on the Agrio Cohen sinus. Oh man.
[00:00:46] Yeah, I had a cold few weeks ago so I was in the same boat. So if you hear any moments of silence, that’s me trying to hit the mute button so I don’t call often snork in in your ear. You think like that. But I always though you and I connected I think on Facebook first, right. I think so, yeah. But you also have a pretty active profile and bigger pockets which I have. Escape from I’m not an escape, that’s a bad word. I have done less and less on bigger pockets and. But you’re pretty active on there. So one of the things I like to do or when I’m starting to do with guest is make sure you are somebody of knowledge. Right. So let’s talk about what your real estate portfolio looks like today. Right. And then we’ll kind of start off from there. So.
[00:01:38] So today, me and my wife, we have 40 total units of real estate.
[00:01:45] It’s kind of a mix between single family, some duplexes, but mostly in for Lexus. They’re spread out across four states. So we have some in California where we live in San Diego, Atlanta, Georgia, Birmingham, Alabama, and then Kansas City. So they’re kind of all over the place. And a lot of that came about because we live in a very expensive market. You know, kind of Southern California is very tough for cash flow. So we started here, but we started branching off into other cities, going to look for better returns. So we got up to 40 units. These are all kind of our own. We don’t have any partners or don’t do syndications. And we’re getting about twelve sometimes more thousand dollars of cash flow per month from these units. So it’s pretty consistent at around that mark. Sometimes higher, sometimes lower. So yeah. And also I think probably took us about four or five years to get here off like actively, you know, buying units. So I think I saw something like you have two or three hundred. So we’re definitely not quite at that level yet.
[00:03:00] Pretty happy. So I always want to know there’s an asterisk on that. Three hundred and twenty eight units. Right. And we have mainly because. There are we see a I forget the number seven that my wife and I own in the rest of them were part of bigger syndications, syndications, gadget. So if you if you average out, the percentages were probably a little bit behind you. As far as number of units. But when somebody just asked me, hey, how many units, I’m trying to talk to somebody, hey, you know, it’s hard. It’s a lot easier for them to grasp. Hey, I’m in a big, bigger syndications. My wife and I own a couple, but no use is three or twenty eight versus me going in design. Well, we own, you know, this percentage of this deal, this percentage of this do just kind of makes conversation go. Yeah, I’m envious of your position actually that you don’t have any part. Not that our partners are bad, but just the fact that you and your wife have been over to build this and you still work full time, right?
[00:04:01] I’m actually a big believer in kind of keeping with the spirit of what your podcast, you know, tries to help folks do, which is keep your job, as, you know, your main source of income, your main source of growth for your real estate portfolio. So we’ve had, you know, Bill, me and my wife worked this whole time, was still do was save a big chunk of our salary. And that’s kind of one of the big drivers that allowed us to grow our portfolio, especially at the beginning. You know, when you have one or two units, even five or ten, the cash flow that you’re probably getting from them isn’t like enough to buy two, three, five a year. But if you’re able to save a meaningful portion of your salary. Kind of combine that with your cash flow from the rental properties that you do own. I think that could really snowball into some fantastic growth. And that’s been one of our main strategies. And I definitely recommend it because, you know, it’s funny. I mean, folks want to get started in real estate and they’re always looking for, hey, where do I get the money, where I get the cash?
[00:05:10] And that’s and that’s why I think, you know, there’s all those gurus and movements for like no money down, start in real estate, say with five grand. And I think that’s where it comes from, folks.
[00:05:21] Just, you know, they they maybe don’t have a lot of savings and they think, well, I need a lot of money to get started. So what do I do? And I think a lot of times they kind of ignore this whole, you know, W-2 aspect, because at least in my view, you know, if I already have a job, you know, me trying to save a little more money is easier than trying to get a side hustle or find alternative sources of income or do crazy, you know, like double, triple loan financing deals that I just that I’m not familiar with. But here we are. You know, I have my income. That’s like a readily source of funds that if I just saved a little moral, that could help me buy a one property or two properties a year and then just kind of go from there.
[00:06:08] So I think that’s very kind of your W-2 income, your full time job income is a very undervalued source of funds and and just cash flow that can help you with that girl. So I honestly think more people should look into that and realize they already have a source of funds to finance some of their beginning properties and it’s their job.
[00:06:33] Yeah, I’m a big a lot of say in W-2, your W-2 job is the engine that can propel your real estate investing journey. Right. And what I guess when I get frustrated with is have more conversations I’ve had recently. People have money, but they don’t want to invest in real estate. Like you guys are crazy. And why not? Let me show you what I’m doing. And the dogs are starting to connect on the other. The flip side to go what you say. The conversations I have with people that think they don’t have any money. What not. They have the money. They’re just choosing to do something else with it. Right. So now you’ve got it. You’ve got to get into this whole budget process of saving up, taking a year or two to save up. And not a lot of people want to do that because it is typically life altering for them. Right. They’re going to have to get right, go into the bar, taking the kids this fancy thing that everybody in the neighborhood is doing or whatever. But it’s those sacrifices that are going to eventually work out for them. Question, though, you said your wife and we were chatting a little bit before his record button. Sounds like she’s an integral part of your of yours. I’m going to mccullin an empire, right? You guys are building a real estate empire. One of the things that I stress to the mastermind members and everybody that I come in contact, the number one thing you have to do is, yes, if you’re married, you have a better half. You have to have them on board. Absolutely. So when you’re you and your wife came together, said, OK, we’ll start doing this. How did that conversation go where she leading the calls? Were you leading the calls that a boat just clicked for you? Really easy or did it take some convincing on either part?
[00:08:13] Well, I’ll start by saying I think you you’re spot on that. You know, if you’re thinking about doing something like real estate and especially scaling it up, you can not do it without support of your spouse or your partner or your significant other. It’s a big financial decision and sometimes, like you said, or require sacrifice and maybe lifestyle altering choices and you absolutely need to be on the same page. So it’s it’s kind of paramount. I wouldn’t imagine doing real estate or even thinking about it without, you know, kind of talking to my wife and making sure she’s on board. So, yeah, you know, for us personally, it was actually a fairly easy decision. You know, when me and my wife kind of first met and then started looking at our goals, becoming financially independent and kind of, you know, retiring early, creating a stream of passive income has always been something we both wanted to do. You know, we both worked hard, but I wouldn’t say we absolutely loved working. So we always had that notion that, hey, I think we we you know, we want to not work. I guess still 60 is the best way to put it. Like we’re not interested in doing that whole 30, 40 year corporate job.
[00:09:28] So we were both had this interest in passive income and real estate just started coming up more and more often than, you know, when we looked at different investment choices and thinking what would work better for us. So it was it wasn’t you know, there wasn’t much convincing, I guess, to be done for either of us.
[00:09:48] I would say that I was probably kind of a more active driver and I kind of spent a little more time managing our portfolio. But my wife, you know, she’s supportive. She definitely helps out. So I thankfully for me, I guess I didn’t have to do much convincing because she saw the value that real estate can, you know, can give us in terms of that passive income and wealth generation.
[00:10:14] You’re looking, man. Yes. And I am, too. You know, quite frankly, I don’t know if your wife does this one. Things I love about my wife and also it frustrates me as I’ll be grinding on an issue. Doesn’t matter if it’s a W-2 job or through real estate or something. I’ll be I’ll be grounded on an issue for days. And I’ll take five minutes and I’ll go explain to her the issue. And then with just like that, she’ll. Yeah. Give me the most brilliant answer in, which is not if I get my stubbornness the other way is the time is what we go with. Right. And it just frustrates me that she has that much intuition about the whole thing. So.
[00:10:50] Well, you know, I think that for me, I noticed very similar thing. And I think it comes down to having a different perspective.
[00:10:59] I’m naturally like a very I’m not very outgoing and I tend to be a little more like self-centered. And let me just figure things out on my own kind of guy. But, you know, sometimes you’re so into it and you’re just thinking about something all the time. You kind of become close minded and speaking with somebody, especially like you’re your spouse who, you know, knows your situation. They can give you, you know, perspective that’s completely different. And you’re like, wow, what what the hell was I thinking? Sweet, you know, not that like you can think of it by yourself. You probably could have eventually.
[00:11:36] But, you know, they just help you get yourself credit for that.
[00:11:42] They they just help you think in a different direction. They definitely do. I’ll leave it at that.
[00:11:46] I’m going to I’m going to mess with this thing. Here on the microphone. Because those rearranged. I’m out of my element. Rearrange my office about an hour before this call. It’s warm, cold sweat or whatever. Okay. I’m not used to this view. So when cars and trucks go by, if you see my eyes, go on it. What? It is distracting. Distracted. You may have to rethink or just close the blinds. One to do. So.
[00:12:11] Let me ask you this, I see your both work full time. Let me back up. So there was a there was a young lady who join a mastermind and first weekend there, she says, how do you convince your better half to do this? I was like, whoa, that’s a hard one. I don’t I don’t know. I can give you my feedback. But that’s the beauty of the mastermind. And there’s there was five or six other people in the call that night and said, here’s you know, what they’ve had. I said, but here’s the thing. I don’t think you should be in this mastermind until you talk to your husband and he’s on board. Right. And she didn’t like that answer. But about three weeks later, she dropped out. And I don’t know where she’s at today, but it’s just one of those things. It was in then the religion she was in or he was and was kind of the driving force behind that. So that’s like a double edged sword or might not eat you all, too. I don’t I’m not taking your money. You need to. You need to go have that conversation with him. Y’all need to figure it out before we go further, because we’re going to push you in this mastermind, take action that if you’re not on the same page. There’s going to be a divorce happening real quickly. Right. So anyway, I don’t want to be that guy.
[00:13:24] So you go in and, you know, I think it you know, I’m not a relationship expert by any means, but what I’ve kind of found out with these types of conversations with your spouse about money or investing or something else. It really comes down to aligning your goals first.
[00:13:43] You know, it’s not like the real estate is not the issue. And, you know, it’s not usually the specific. I guess what I’m trying to say, it’s more like, are your goals aligned? You know, if if you guys have a misalignment of goals between you and your wife for you and your husband, you know, you want something and the other person wants completely opposite.
[00:14:03] Like, that’s the problem that in my opinion, should be addressed first and talk. That it will be a.
[00:14:10] Goals than obviously. You know, you’ll be a line on that means as well. That makes sense.
[00:14:33] Yep, definitely does. So you guys are in multiple markets, right? You live in San Diego. You’ve got investments in San Diego as well. We do. Yeah. So how did you land in Birmingham? In Atlanta? I’m just curious because I spent some time in Birmingham. I drive through Atlanta. Once or twice, maybe four times a year. Yeah. See the in-laws? Neither one are markets that I want to be in. But I’m just curious on from San Diego. How do you guys land there?
[00:15:02] We actually. So I kind of evolved my market selection strategy, as I call it. The most recent market that I was happy with was actually Kansas City. And that’s where we actively invest. So Atlanta and Birmingham, we invested, you know, about five, five years ago or so. There were a lot cheaper than they are now. But my my strategy generally comes down to, you know, it’s it’s complex. I like this whole checklist that I go through. But I’ve had to boil it down. I look at markets that first are pretty strong in terms of economy and population growth and job growth.
[00:15:41] So I want, you know, kind of it doesn’t have to be, you know, market like New York or Los Angeles or San Francisco. That’s absolutely booming. But I don’t like a lot of Midwest cities that are kind of stagnant, not much growth. You know, kind of Birmingham is probably on the cusp of that criteria. I definitely like Atlanta in terms of job growth, population growth. Same with Kansas City. They’re very you know, they’re kind of thriving cities, I guess you can call them. People want to live there. People have jobs and kind of they you see positive macroeconomic trends in those markets. What I found is when you have conditions like that, a test to drive both price and rent appreciation in most areas. And I think those are some of the keys to being successful buy and hold investor like myself and my wife. It’s it’s very tough to make money in the long term of the prices are flat and the rents are flat because chances are your expenses are still going to be growing because of inflation and just rising prices. And, you know, your cash flow that you get today is not going to be there five years from now. So we want to see those trends. And I think if you focus on going to job population and economy growth, they’ll foster the price and rent appreciation for you. So that’s one of the keys I look at and also kind of look at relative, you know, basically price to rent, rent to price ratio. So how undervalued is the market? You know, if you look at markets like New York, again, San Francisco, I’ll just throw them out there. There have crazy growth, but the prices there are so high relative to the rents that it just will not cash flow. You won’t get much return. And on the other hand, there is markets where like, you know, very kind of good rental price ratios. But the growth is just not there.
[00:17:36] What is the price ratio and what are you looking for in that?
[00:17:39] Well, so that’s like your if your listeners have ever called of the 1 percent or the 2 percent rules, that’s where they come from.
[00:17:46] That’s the you know, the price to rent ratio expressed kind of some arbitrary criteria. I mean, I’d say 1 percent is probably my minimum 2 percent. Markets are tend to be like your very cheap, but also the growth is just not there.
[00:18:08] A lot of my cities are like that. Yeah. Yeah. Just you know, they look good on paper. They they have crazy cash flow, 10 percent cap rate.
[00:18:17] But when you look at the again, macro economic factors in those areas, they’re just not there.
[00:18:23] And I think five years from now, your cash flow is going to be nonexistent because especially if you sell the property for the same price you bought it factor in your closing costs, you lost money on the price. And, you know, whatever cash flow you made could be just wiped out. So, you know, probably about between one and a half, between one and one and a half.
[00:18:45] Precent is probably where our properties lie. I just found that to be like a good balance between still having good growth, good macro economic factors and relatively cheap prices. You know, so we’re kind of picking up, for example, in Kansas City where we’re buying units for around 50, 60 thousand per unit. These are for multi-family properties, which is not as cheap as some markets like here. People buying twenty thousand per unit properties in the Midwest. But there, you know, definitely, I think well-performing for us in the long term.
[00:19:24] So when you buy these properties, do you have mortgages on all of them? Do you aspire to pay cash for? How do you go about financing if there is any financing?
[00:19:33] I’m always a proponent of financing. So I think just with using financing and leveraging your investments, your returns will skyrocket. So if you look at your cash on cash, return your overall our ally IRR return rates leverage versus on leverage deleveraged. Most always will win. You know, if the property is cash flow, can support the loan payment, obviously. So. So I’m a big proponent of financing. We have financing on all of our properties. Now we have bought a few of them cash just you know, usually for reasons like it was kind of a fixer upper. It was hard to get financing. So almost like a B-R, our strategy or maybe it was a competitive situation and I felt like a cash offer look better, but we would refinance, you know, six months to a year from purchase into some sort of long term financing, even if we bottom cash. So kind of buying cash is more like either a necessity or just, you know, you’re planning to maybe rehab it significantly and then increase its after repair value and then get a higher kind of loan on it. Yeah, that definitely financing is the way to go.
[00:20:46] Completely agreement with you there. There’s. So you guys are getting twelve thousand a month and this is a net or gross.
[00:20:56] That’s net. That’s after, you know, all expenses vacancy cap ex accountability. Right.
[00:21:02] So that’s a pretty amazing number. One of the things that I’ve seen as we kind of progress in our portfolio expansion, if you will, is how it takes that momentum a while to get going. But once it’s there, man, it is hard to stop. And when you start taking in that much cash flow, the doors of opportunity you just opened up. So what do you what are you doing with that 12000 of monthly cash flow when it comes in? I’m assuming your turn around and reinvesting it or looking at exactly that.
[00:21:34] We actually ever since that we bought our first property, we’ve saved 100 percent of our cash flow from rental properties. So I’ve never used it for anything other than buying more properties.
[00:21:46] You don’t pick the wife out to a nice dinner reknown.
[00:21:49] And just to note, well, you know, and the key I’m coming back to us working full time. We you know, we always treated our cash flow from rental properties as extra income. That is getting right back into our investments.
[00:22:02] You know, and and kind of one of the reasons for that is because we still work and we still have these incomes. And that’s what simple paying our bills and kind of supporting our lifestyle, you know. So we’ve kind of relied on that income, any extra income we’ve ever generated from our businesses or rental properties or other investments. We always treated it as like this isn’t spending money. You know, we just pretend like this money doesn’t even exist and it’s going straight back to our investments. So it does require discipline. Obviously, it’s, you know, something you mentioned before, like even saving part of your salary takes discipline and some sacrifices. That is very true. But I think that kind of that level of financial discipline is necessary. If you want to grow a portfolio, be a successful investor, you need to kind of figure that out early because it’s only going to get worse if you have rental properties. You know, if you’re making 10 extra thousand from just cash flow from rentals, then you buy an even bigger house, you know, start spending all that money, acquire maybe consumer debt. You’re just digging a hole for yourself. So you’re working on kind of establishing financial discipline, learning about budgeting savings, very much all the things that you kind of mentioned, the basic personal finance principles, if you can master them, you know, in the beginning stages, then when your cash flow does grow and where like talking and extra digital, then of of everything, you know, you can still use those same principles or rely on them and they’ll serve you, you know, for as long as you live.
[00:23:38] Basically, it’s awesome. Yeah, I actually I have a lot of I don’t know, I probably have 10 different. Counts that I use for our investing stuff. So when rent comes in or different revenue comes in, it immediately is dispersed out to these other. Right. And it’s it’s little bit harder for me to get. So if I transfer in and out of that, those accounts, it takes me. You know, sometimes five to seven days. Yeah. If there’s any urge for me to, you know, grab something, that’s going to have to think about it for a while.
[00:24:08] Right. Always doing something very similar. It’s in fact, we treat, you know, kind of buy real estate as a business. And, you know, I have kind of the, you know, other business ventures. And that money’s in those accounts. I never even see it in my personal bank account.
[00:24:24] So let me ask you this. And I’m sure your you and your wife have had this conversation. But, you know, I have my own reasons. It’s mainly, you know, the reason why I started Deputy Catalist is because I kept seeing all the the fire movement and stuff that was going on with that and how you’re going to invest. And then, you know, you go live in mom’s basement and you can be financially independent. Well, financial independent financial freedom are two separate things, right? Yes. So but why do you and your wife you an for her? I don’t know. Why do you continue to work? Because not only do you have your day job, you’ve got a a side hustle amongst the real estate investing. We’ll get to that here in a minute. So why do you continue to work?
[00:25:10] So I’ll I’ll answer a question, but I’ll say that we’re actually really close to completely quitting our W two jobs and basically realizing our goal of retiring early and and that was our goal from the beginning. You know, ever since we kind of started getting into finances and investing and, you know, figuring out the best path for us, our sole goal or our main overarching goal has been to quit our jobs by having enough passive income basically to replace our salaries.
[00:25:43] And we’ve made a decision that until we’re there, we’re going to keep on working, because like I mentioned earlier, you know, having that that stable income and saving a big chunk of it is one of the biggest drive growth factors.
[00:25:59] So we’re basically, you know, we had a goal of to get to a certain amount of passive income each month and year, basically that would replace our salaries and would sustain our our living expenses. And we’re actually very close to that goal. And we’re probably next year or so we’re going to finally quit our jobs and, you know, retire from at least our full time careers. Still keep the real estate thing.
[00:26:25] This the side business is going. But, you know, all this time we knew that, hey, we’re gonna keep on working because it’s kind of driving all this growth and helping us achieve our goals faster. But then as soon as we get our goals that we’re done.
[00:26:41] Yeah, that’s awesome. That’s you know, I’m similar. I don’t know. It’ll be real hard for me to ever imagine a world where I didn’t have to go to work. Right.
[00:26:52] I can’t wait for that. Well, I understand it.
[00:26:55] And, you know, because I took off we’re recording this on Saturday. I took off Thursday and Friday for some other stuff that I’ve been doing. And I mean, I woke up today and like not like what I do. I felt like Ricky Bobby. I didn’t know what to do on my hands. You know, I’m saying that just, you know, I’m I’m sure it can be something that I can get used to. But I never started investing.
[00:27:20] Louisiana, remember, started investing, say, hey, when I quit my job or whatnot, maybe it did. It’s been so long ago. And now we’ve kind of tapped in this this movement to help other people. In fact, Jake from Jake and Gino challenged me. He said I was earlier this year and I was late last year.
[00:27:39] He said, you go to one of their events.
[00:27:41] Now, I was supposed to, but we had a tropical storm come this way when I was supposed to leave. And I didn’t feel like leaving the kids and wife. Hey, I’ll deal with this tropical storm or I’m going to south Florida. But, you know, he challenged me. He said, I think you’ll be done with a W-2 in a year. I didn’t say yes or no. I think what. What I answered and what I think will really happen is if I am able to help more people by leaving corporate America, then that’s that’s when I know it’ll be time to pull the plug right in that. So what will happen with the deputy guidance to that point time? Who knows? We’ll see.
[00:28:21] But I know no end date for you know, my my big goal is to build 300 years of legacy wealth. Yeah, it’s a goal I’m never going to achieve. Right. But it’s at least something I’m grasping for. And it helps me think in such a different world. I can’t imagine not having that engine to invest money in into the real estate. So I don’t know. Lots, lots to think about between here and there. I think it’s a far off day, further date than than you and your wife, but.
[00:28:55] Well, I think the beauty that you gain with having this residual passive income and all these investments and that’s kind of always how I looked at it.
[00:29:04] As you gain the freedom, like you said, you get that financial freedom.
[00:29:09] It doesn’t mean that you have to retire then it doesn’t mean that you have to quit your job. It just gives you the freedom to do what you actually want to do.
[00:29:18] So whether, you know, if you’re totally stoked to go to work and and you love what you do and kind of you love the, you know, helping people or working with people, they’re like, great. You know, nobody says you can’t do that if you want to quit. And some people, you know, maybe want to do volunteer work because that’s kind of where their heart is.
[00:29:38] Then you can do that because you have the financial means to support yourself or. Right. You know, you quit and maybe you dedicate more time to W2 capitalists than, you know, running or Mastermind Group and other ventures, even though maybe that’s not making, you know, as much money as you used to make at your corporate job, let’s say. You can still do that. That’s and that’s kind of why I think, you know, the power of passive income comes. This is the freedom that you gain from it to kind of do what you want. It doesn’t mean that you have to quit your job. It just means that you can if you want it to, it means to you or you can pursue really any venture that you always wanted to do without worrying, like how I’m going to pay rent or how I’m gonna pay my bills this month.
[00:30:20] Yeah, you got me to think, you know, I don’t I don’t know if I would feel like so much of a hypocrite if I were trying to lead the Debbie to Caplets Army, so to speak.
[00:30:32] And now I have a W-2 I don’t know about and I don’t know that it may I may I may be able to get away with it for a while.
[00:30:44] But there’s something that just tells me that I wouldn’t be able to go. Authenticity goes well.
[00:30:49] It almost seems like the pinnacle achievement of your movement to me, actually.
[00:30:53] You know, I would imagine that most of your listeners in on again, I could be wrong, but I would imagine that most people listening to your podcast that have W-2 jobs or, you know, pursuing investing a real estate, probably doing that because they don’t want to, you know, have that job forever or until they’re 60.
[00:31:14] So, in fact, you know, if you leave your job and kind of because of what you achieved, you know, through the principals that you teach, that could be seen as almost a you know, hey, this is like the ultimate achievement destroyer.
[00:31:29] And more or less you need to hire you as my consultant. So you do have your W-2 job. You also have your investments going on. But then you have a third thing going on, which I’m pretty excited about. And for those people who’ve been listening, you’ve been hearing me boast about it in the intros and whatnot for a couple of weeks now. And that is the platform deal check. Oh, right. So you’re off of that, correct? I am, yes. Founder. Creator, all of the above and below that. So give us the inside scoop that they get tired of hear. I think they’re tired of already hearing me say this, although I’ve seen.
[00:32:12] Because you play the same recording.
[00:32:13] Ah, no, no, no. I try to wing it a little bit, but it’s very similar wording.
[00:32:19] But I’ve seen a few people already sign up and they’re going through their trial, right? Yeah. Promo code debut 2 caps. But yeah. Tell us about that. Tell us what sparked that a little bit. And some of the major benefits that probably aren’t as highlighted as much room if you just go into the Web site and see in the demo.
[00:32:39] Sure. So, you know, deal check basically came about in 2015.
[00:32:46] And when I was myself kind of looking at a lot of rental properties, I was driving around. And as probably most of your listeners know, analyzing the cash flow projections, the potential returns, how much cash you’ll need to buy a property.
[00:33:03] You know, all those kind of financial numbers are probably one of the most important thing you can do when you’re buying rental properties. You might have heard the a lot of people say you make money in real estate when you buy.
[00:33:17] And I’m kind of a firm believer in that, a big part of that comes to actually understanding the financials behind a real estate investment and ultimately, is that actually going to make you money?
[00:33:28] Because I don’t know what the percentages, but probably, you know, at least half or even more properties that you’ll come across will lose your money. And only a small fraction are like those great deals that you hear about that, you know, they’ll actually be worth your investments, but you’ll never going to know that unless you have a very kind of consistent, accurate method of predicting and analyzing the cash flow projections from rental properties, flips, wholesale deals, really any real estate transaction. So I was in the same boat, you know, when I was in and actively looking for properties, I was shun analyze them especially like quickly and in bulk. And I used Excel for a while, as many investors do. You know, the spreadsheet, just something I think I downloaded from somebody then like modified it. It was getting to a point where basically it was like I was making mistakes and there was an unwieldy process. I had like a million tabs in Excel, one for each property. Then sometimes I’d modify like a formula or the wait calculation is done and you know, one tab, I’d forget to change it. And the other tabs basically was it was a mess. It was it was hard to manage.
[00:34:41] And I thought, well, there’s got to be a better way to do this. Like in some sort of systematize like organized way. And I looked at what was available on mobile, on desktop back in twenty fifteen 2015. I really didn’t find a tool that I like, particularly. They were either like old or clunky or hard to use or someone costs like, I don’t know, a thousand dollars I’ve seen in software analysis platforms felicitate investors like nine hundred ninety seven dollars to buy. And I was like that’s crazy. So being a software developer myself, that was kind of my full time job at the time. I thought, why don’t I make something, you know, for myself, maybe share with a few people and see how it goes. So I actually threw together a mobile app version of Deal Check first. So it was a simple mobile app where you could plug in some numbers and run a pretty simple light crude analysis calculation. But I thought, hey, I’d be driving around looking at a lot of properties. This can like help me because it’s hard to use excel in your phone especially. It is almost impossible.
[00:35:47] I put together this mobile app. It worked well for me. And then I was I talked to a few, my friends and I, you know, they found out about and they’re like, hey, can you like send me a link? So I actually published it on the Iaw on the Android stores. You know, so they could download it. It was actually free, you know, the beginning. I didn’t charge for it or anything. And to my surprise, like, they loved it. They were like, man, this is awesome liking you. You know, they start asking for new features and like, can you do this? Can you improve on that? And that was basically the start of deal check. It was almost like an accidental project. I didn’t have a business plan. I didn’t do any of that stuff that you’re supposed to do and starting item and like do market research. But it just came about and it started growing organically, you know, slowly for the first few years.
[00:36:39] But then since like twenty seventeen. So for the last three years or so, I we really found our market fit with this product, released the web based version, you know, IOW Android app added a ton of features and it grew tremendously. And now we have over I think it’s one hundred ten, one hundred twenty thousand investors that use deal check, you know, to analyze basically any type of investment property rentals, flips, bars, the buy rehab, rent, refinance, repeat method, multi-family, commercial deals, wholesale deals. So I’ve been very happy with we you know, we expanded our team and how quickly the product’s been growing. It’s really been amazing to hear the stories of investors. You know, I get e-mails almost daily, people saying, hey, you’re tool like saved me from, you know, buying a horrible deal. Or on the flip side, like, you know, I use your tool and I was able to screen properties really quickly. Right. And I could put in an offer like the same day, you know, with confidence. And it held me close on this great house. So that that’s obviously the main benefit of the software. It was we didn’t want to get into like a lot of like CRM or or like lead generation. It was deal. Chegg is solely focused on being a go to platform for property analysis.
[00:38:06] So we built a whole feature set around that obviously in addition to the core calculations, you can import property data quickly from public records and. Listing so you just type in an address and a pool. You know, these like how many bedrooms, bathrooms, square footage, like all of that for you, so you don’t have to type it all in. Last year we released sales comp so you can pull up a bunch of sales, recent sales, comparable properties. See how much they sold for help. You estimated the RV, especially when you’re doing flips. We have rental comps as well. So you can see up to 20 comparable rental listings of the same area, how much they’re renting for. You can find a good rental price for your property. And also, you know, that’s important projections. We don’t want to overestimate the rent and then you can rent it for that much. So, you know, we have ability to upload photos. You can add notes, you can generate p_d_f_ reports. So put all the analysis information for you, give you this really nice format of p_d_f_ and like seconds. We have a lot of agents and kind of wholesalers use that tool if they basically need to share the property with somebody. Actually, some syndicators I believe use it as well to like distribute the property report.
[00:39:24] Then we have this offer calculator, which is basically a reverse valuation analysis tools that says like, hey, you know, I want minimal cash flow of three hundred dollars a month. I want a cap rate of 6 percent. I want cash on cash of twelve percent. So you just plug that in and it’ll tell you what is the maximum price you can offer on the property.
[00:39:45] My most favorite part about your software is that right there. Because years ago I got tired of going through the other calculator that you are probably familiar with. And I was sitting here guessing a numbers. And finally I got tired of some numbers and I emailed, you know, whoever their development team is and say, look, guys, here’s an idea. I want to hit this number in this number, in this note. Just it’s a price, that’s all I want to know.
[00:40:14] And they right, it’s a very common request. And like it’s not some that’s easily, you know, because like you said, if the if the calculator doesn’t offer that feature, you’re going to be like, okay, let me drop the price by ten thousand. Nope. Okay. Let me drop by fifty thousand, OK. Yes. But maybe drop it by 40 thousand. So like, you know, you’re guessing there it’s it’s hard to use.
[00:40:36] You’ll check you just plug in all of your criteria. You know, a second later you have your offer price and then you know that, hey Fi, you know, if I offer this to the seller, then it meet all of my criteria. So they just have to see like how much of a discount this is versus asking whether it’s realistic or, you know, if it’s if it’s too low that, you know, you could you have to move on because you’re just not going to make money on this deal. So it’s basically a whole suite of features that we’ve built, you know, specifically around deal analysis. That’s kind of what we pride ourselves on. We want to be that go to platform. And like I mentioned, you can use deal check online. So if you go to deal checkout IO, you can use it on any desktop, laptop, any computer would just your browser or you can download the deal, check mobile app for your IOW or Android device, use it on your phone. It’s optimized for the phone. It’ll sync all of your data across your devices so you can be like driving at an open house. You know, all your agents showed you a nice property. You ran the numbers right there on your phone. It looks pretty good. You can come back to your home or office, open it up on your computer, dive in a little deeper, look at comps or whatever, just to make sure it’s a good deal. Put in an offer used to offer. Calculator. Cloud. Sync and.
[00:41:58] Keep going.
[00:41:59] I’m just done. You know, I can talk about it forever, but it’s actually we have several, you know, tiers for usage and we have a free tier. It’s free forever. It’s not a free trial. So you can actually create a free deal check account. You know, you’re limited by some of the features on how many properties you can analyze. But we have tons of people just use the free version if they’re only analyzing a few properties a month.
[00:42:22] You know, they’re kind of starting out. They don’t want to invest a lot of money into a platform. No worries. Just start using it for free forever. Again, it’s it’s not a trial. It’s literally free forever. And we want it to keep it that way to make it accessible to especially beginner investors, because I remember when I was starting out, didn’t have a lot of money. I see all these services charging me subscriptions. You know, it’s hard it’s hard on you when you’re a new investor. But we’ll check. You can start with a free tier. We do have some upgrade options if you want the full suite of tools that are really reasonably priced like a few cups of coffee a month. Yeah.
[00:42:57] That’s the other thing though, too, because I think the plan that I looked it was like seven or eight bucks a month. Yeah, maybe. I mean it’s super cheap. Yeah. Vacuum is definitely there. You’re actually just gave me a pretty good idea. And once I get more comfortable using the software, I may host a demo in my Facebook group and just show how easy this is. Since I’m no affiliate, I want to make sure they know I’m using it and I’m just not blowing smoke up there or you know what I’m saying?
[00:43:26] No, it’s it’s you know, that’s a great idea. And I always encourage people like just try the free version. That’s again. We don’t ask for your credit card. We’re not going to ask you for a payment. You’re not going to get charged, like just try the free version, run a few properties. You know, you like it. You like it. You know, keep using it for free. And then if you want to upgrade reasonably priced type in W2 cap at checkout and you’ll get a twenty five percent forever discount on top of the low prices that we have now.
[00:43:54] So that’s specific to W2 capitalist podcast listeners promo code W-2 cap.
[00:44:01] So I appreciate the plug there. Also for the promo code.
[00:44:05] Yeah. No, I want people you know, like I said, it’s you know, obviously it’s it’s a business for me.
[00:44:12] But the biggest kind of the biggest reward for me is not monetary. It’s getting those emails from investors that use the tool to either help them avoid horrible deals or use the tool to help them find those gems quickly, put together an offer and close on them. Because, you know, I really want to help investors because I’ve been in those shoes. I know how difficult and stressful the especially by buying your first property was like. You know, the world was ending for me looking over everything a million times. I was sweating. It was I think I read the whole mortgage package that they give you.
[00:44:51] Five hundred pages.
[00:44:53] The closing took three hours. It was it was a stressful time. But, you know, if we can help you run those analysis projections with deal check, knowing that you’re not messing up any of the numbers, the formulas are consistent. Everything is the same. And they’re kind of all. All the properties you ever look at are safe there, therefore you so you can look back at them later. So if we can help you take that out of the stress, I’d be happy.
[00:45:20] Yeah. And manufacturers’ a guy who messaged me on Facebook this morning and he said, I’m not going to say his name says, Hey, bud. Question What are your thoughts on properties that just break even? What is your take on the mindset that this will be another property building capital, even though it’s not producing additional income? My answer was that scenario doesn’t fit in my investing strategy, but everyone is different when I should have answered. When others have you ran this deal through deal check about I use them. David, to make sure you’re getting the right.
[00:45:51] And you know, it’s it’s valid because, you know, one of the tools we have and deal check is this think’ll buy and hold projections. So in addition to just looking at what the numbers will look like today, if you bought the property, it’ll show you the numbers. Thirty five years into the future, for every year, you’ll see what your cash flow will be.
[00:46:10] And that’s actually a very good exercise to do for a property like, you know, your your your subscriber just described, you know, okay, it’s breaking even now.
[00:46:20] But what is it going to look like five or 10 years from now? When am I going to actually start making money on it? And and it’s hard to answer that question, you know, without looking at those long term projections, factoring in, you know, your price appreciation and rent growth, if there is any inflation and all of that. I probably would pass on the property just like you did. Or you suggest that just because of, you know, I’d like to get something even now, but.
[00:46:49] You still want to look at those projections? I’m not into a point where I’m going to play in the appreciation game.
[00:46:56] Right. It’s it’s a gamble.
[00:46:58] It is. And that made that strategy may be part of our. Overall view eventually, but is not today. It is not to be all right. So I’ve been asking everybody this who comes on the show recently. When you look at your crystal ball, where do you think the market is headed and realize where this conversation is happening in early 2020? Right.
[00:47:21] For your listeners and to read all the disclaimers.
[00:47:28] No, but it’s it’s a tough question. You know, everybody is talking of a crash.
[00:47:33] Yeah, I if I had to say, I don’t really see a big crash coming, just kind of my gut feeling and what I see in the industry. I definitely see a slow down or maybe not as explosive growth as we saw over the last five years. And the real estate market may be a minor correction or kind of flat line. I just don’t see, you know, like a big crash coming. But you know what I’ll say with that again, I could be totally wrong, but I’ve never been a fan of timing the market anyway. So you could wait right now on. You know, you could say, hey, I got one hundred thousand to invest. I think the market is going to crash. And you could be right. Market crashes this summer and then you go in and buy a property and you’re all happy and doing great. Or you could sit and wait for the market to crash for five, 10 years. In the whole time, missing out on your cash flow, your prize growth and all of that. And, you know, if if I had to pick between the two, I would say just go ahead and invest now or at least start looking at deals. It may be harder to find deals right now. And a lot of the markets because inventory is a little low, the price of several appreciator lots. But it is still possible, you know, if you look hard enough. And I think if you can, you know, maybe spend a few months like be realistic, it might take you six months to find a good deal. You know, when you find it, I think you’d be happier that you bought it now than if you just waited and waited on the sidelines for that correction that nobody really knows when when it’s coming.
[00:49:13] And how patient are you being right now when you’re looking for deals? Because for the most part, I’ve given I’ve given up. But it’s OK because I’m given myself a couple of excuses.
[00:49:26] No one in the last eight months I’ve changed jobs. I lost a job I was at for fifteen years to start a new gig with a different company. We had baby number 30, which we’re still getting used to that and we’ve got a lot of momentum coming with a degree to capitalize. So I’ve been focused on that. I still analyze and like when I left the mastermind the other night left, it was a Xoom call just like this. So when I hung those guys, when I was committing to doing but between now or that call in the next two weeks was to analyze at least three multi-family properties, because I’ve got a self-directed REIT that I want to do something where that’s been sitting idle for too long.
[00:50:06] And, you know, I’m already done with that challenge myself. And there’s one that’s a maybe the other two just.
[00:50:17] No. You know, so it’s it’s it’s really trying my patience. But what are you doing? Like, are you altering your criteria and saying, hey, we’re going to do this or you’re altering your marketing to try to find more properties? What are you doing to try to swim through this pretty tough market we’re in right now?
[00:50:34] It’s more probably not so much altering criteria, but altering kind of lead generation we bought in over the last kind of two years where we actually bought a lot.
[00:50:46] We bought 20 plus units just in the last two years and all of those purchases have been off market. So I you know, when I first started, we looked at a lot of the MLS properties. This was like five years ago and there were deals to be had on the MLS. And what I’ve seen and that’s kind of like the go to right source, most people like get together with an agent, have an MLS feed or maybe they go on, you know, Redfin, Zillow like Realtor.com and look for properties themselves, which is basically coming from them or less. But what I’ve noticed in the last few couple of years, especially last year, just the MLS is almost almost like nonexistent for good deals. And we really had to start looking off market for us. What worked especially well have been direct mail campaigns, very targeted, very small. It’s probably a whole topic for another podcast. Absolutely most, sir. You know, SNL just like one hundred mailers and had a crazy high response rate from that. Or it was networking, really networking in a targeted area with agents, property managers and basically telling them like, look, if you have a client that’s selling properties, they want to sell quick. They don’t want to deal with, you know, getting offers accepted or rejected, like falling through.
[00:52:06] Call me and we’ll work something out with them. And we actually got a few properties that way. So, you know, because a lot of sellers just don’t want to list on the MLS even in today’s market, believe it or not, they have some price they want to sell or maybe they have a distressed property and they know it’s going to like not sell. Well, if you’re able to kind of get in through your network and see those deals first, get together with the seller, you can close on something actually really good without even having to go to market. So it’s more I have been looking at alternate deal acquisition channels instead of just, you know, saying, hey, I’m just going to wait to see what’s going to pop up on them unless because in a lot of markets, all in Kansas City, that’s really where we’re looking right now. It’s just the deals on there are far and few between and most always there you’re gone in a day or two or even if they’re passable or you’re just sitting waiting for them. So and I actually think that that’s even in a kind of a buyer’s market, you know, even then how the market was like five, six years ago, having multiple lead channels, so to speak, is always a plus.
[00:53:16] So instead of just saying, I’m going to see what my agent brings me and that’s yeah, you know, you can do that. You can look yourself on those Web sites that I mentioned. You can try direct mail. You can work with wholesalers, you know, find a few wholesalers in the area that you like and get on their buyers list. You can look maybe on like bigger pockets marketplace or other places where deals are posted. So basically, the more places you look like the more deals come across your desk, the more the higher the chances that you’ll find something worthwhile. Like you looked at three. So one of them was maybe an or two or no more passable then? Well, maybe if you looked at 30, the kind of like, you know, a much higher ratio than maybe you would’ve had like one or two. Okay. Deals or even maybe one great deal. And so at certain point it comes down to volume. How much deals pass through your desk? And you know, there’s a certain percentage of them, a certain small percentage, that would be those gems that you’re looking for. But, you know, the fewer deals you look at, the less likely you are to find one like that.
[00:54:23] You definitely need to crank it up when it comes to looking at deals. Right. And I’ve said this several times in the last couple of weeks. I need to get broke.
[00:54:35] I’m kind of using that money, sitting in the subdirectory as a crutch for me not to be as active. But I’m also trying to remind myself we’re still getting used to maybe never. Yeah.
[00:54:47] Well, you obviously you got a balance, right?
[00:54:50] Yeah. Yeah we do. And we’ll see. I’m trying to get that into something because I’m just sitting there saying looking at it and that money is is actually going negative in value. Yeah it is. You know, performing. Yeah. Yeah. So I need to do something with Anton. It’s been incredible. I’m actually jealous of how you say mobile. I know that’s your Russian accent really comes out when you when you say that word.
[00:55:17] So that’s when I was like, I got to be all recorded for you and I’ll put them on.
[00:55:25] That’ll be my ringtone for. Right.
[00:55:29] That’s awesome. Hey, thank you for this. I really appreciate you coming on and talking about Dogecoin and dude and actually tell me about some features that I didn’t even know were in there, so. Before we close out, what’s the best way for people to get in touch with you?
[00:55:48] I actually just give people my personal email. It’s just Anton a deal check that I owe. That’s a a.l win at deal. Check that I owe. So I don’t mind hearing from you guys if I get a lot of emails, but actually reply to pretty much all of them just may take me a few days. So if you have questions about deal check, obviously other feature requests suggestion, we’re very open to that.
[00:56:11] Or if you’re, you know, just curious about my real estate investing strategy or, you know, need some advice.
[00:56:19] I’ll do my best to help you with that or direct you to like a an article or something that I’ve written or maybe another podcast I did where I discussed that in detail. So just send me an email, Anton, a deal. Check that. I’ll have no problem.
[00:56:32] You guys email me directly and how only to that in the show notes. Thanks again, man. We will. I’m going to take you up. You kind of hinted around of another show. More topics. Definitely want to do that. Absolutely. And I also learned a bit more about how you’re from Russia. But as your bio says, you served in the US Navy, right?
[00:56:51] I did, yeah. It’s so crazy getting to that point in time.
[00:56:57] By the way, thank you for your service. And we’ll chat again soon. Thank you, Jay. Looking forward to it, everybody. See you. Take care.