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Episode #32: Buying Your First Rental Property with Rentals to Wealth

In this episode, Millionacres editor Deidre Woollard interviews Lauren and Kyle Clugston of Rentals to Wealth. This young couple are active real estate investors in New Jersey started with a househack and are slowly building their real estate empire. 

Today's guests are Kyle and Lauren Clugston, of Rentals to Wealth are here to share their journey with us and inspire prospective rental property investors to take action. They are really focused and cautious and show that you don't have to be a big risk taker to make money in real estate. Follow their journey at www.rentalstowealth.com

Share your thoughts with us: media@millionacres.com

Timestamps:

0:00 Introduction

1:20 Starting slowly in real estate

3:00 Househacking

4:09 BRRRR Method

6:06 The perfect BRRRR

6:38 Sharing numbers publicly

7:55 Doing your own repairs 

9:15 Learning to do repairs

10:15 Finding your first house hack

11:22 Buying a HUD foreclosure

12:10 The anxiety of buying a first house hack

13;35 When to turn over repairs to subcontractors

15:15 Using direct mail to find properties 

16:50 Driving for dollars

18:00 How to find property information

19:15 The power of an investing club

22:08 Getting over analysis paralysis

25:45 How to get to the next level

27:35 Using different forms of financing

29:19 Finding private money

31:00 Learning to delegate

34:41 Structuring investments

35:50 Tips for tenant screening

37:45 The value of inspections 

41:01 Buying older houses

42:50 Renovating as a couple

Transcript

Deidre Woollard: Hello, I'm Deidre Woollard, an editor at Millionacres, and thank you so much for tuning into the Millionacres Podcast. Today, I want to talk a little bit about analysis paralysis. Because I think that happens to just about anybody when they're thinking about getting started in real estate investing, because it's so easy to think about it and read books but not dive in. Sometimes, I think we all need a little inspiration. The inspiration today comes from my guess, Kyle and Lauren Clugston of Rentals to Wealth. They're here to share their journey with us and inspire prospective rental property investors to take that first step. One of the things I like about their story is they've just been really focused and cautious. They show that you don't have to take this big risk to get out there and make money in real estate. Thank you so much for joining me today.

Lauren Clugston: Thank you so much for having us. We're so excited.

Kyle Clugston: We're excited to be here.

Deidre Woollard: Awesome. I was looking at your story and one of the things I really like is, you just had this really slow and steady approach. You've been at it since 2017. I think you just closed on your six properties, is that right?

Lauren Clugston: Correct. That bringing us to 10 doors.

Deidre Woollard: Nice. Why was that slow approach the right way for you?

Lauren Clugston: I have just always been very risk-averse. Especially in the beginning, real estate seems risky. Especially, if you don't have other investors or people in your family or in your circle who are doing it. In the beginning, it was really just a way to help supplement our retirement. Not necessarily to retire early, but obviously, if you get into real estate, once you're in it, you realize how fun it is and addicting it is, and your goals grow vastly quite quickly. [laughs]

Kyle Clugston: Our first two properties were funded with our savings. After we depleted a lot of our savings on the first property, it took us a little bit to get some money back into savings and then would fund that second purchase and then renovation. It wasn't until our third property, we started utilizing another strategy like private money, where it opened a lot of doors where we can start adding more properties to our portfolio a lot quicker.

Lauren Clugston: Definitely. We don't have goals or dreams of owning millions and millions and millions of dollars and hundreds and hundreds of units. It's slow methodical approach. I think jives with our goal and jives with our risk tolerance and where we want our life to be both now and in the future.

Deidre Woollard: Great. Did you start investing near where you already lived?

Lauren Clugston: Yeah. One of the easiest things to do when you start real estate investing is to utilize your primary residence as an asset. What we did is we house hack, which is basically you take your primary residence and whether that be a single-family home or for our case, a two-family home and we rented out the other units. It's a way to tiptoe into real estate investing, get into it with a little bit less risk and a little bit less funds because since it is your primary residence, you have the advantages of lower interest rates and lower down payments.

Kyle Clugston: Then because it was a house hack, we wanted it to be in a place that we wanted to live. Not only where we invest in, but we're also lowering our living expenses to be able to live in an area that we wouldn't, otherwise, be able to afford. That was how it shows that really was where we want to live.

Deidre Woollard: I love that. On our team we've got, I think three or four people who house hacked as their first investment. One of them just bought his first property with his wife. They're going through that first renovation process and having a lot of fun along the way. But now it seems like you guys are using the ever popular BRRRR method, which is buy, rehab, refinance, and repeat, is that correct?

Lauren Clugston: Close, and there is rent.

Deidre Woollard: That's the extra R there.

Lauren Clugston: Yeah.

Deidre Woollard: Was that your plan when you were starting out or did you just figured you do the one house hack?

Kyle Clugston: It's funny, I think that's where we started out, it's not where we are now. Where we thought we were going to be and what our strategy was, we thought we were going to invest solely in small residential multi-families and that would be it.

Lauren Clugston: We felt we're going to buy one duplex a year for 10 years and just be really slow and thoughtful about it. Technically, we did BRRRR our first property. But it wasn't a perfect BRRRR and I don't think we knew that what that meant at the time. Basically, yes. We bought a property, we renovated it, we rented it out, and then we did refinance to recoup some of those costs. But because we didn't go into the first deal thinking that we're going to BRRRR it, we didn't necessarily get that perfect BRRRR. But yes, as we move forward, we realized the power of BRRRRing and basically, the lore of it is that once you have this seed funding, whether that be your own money or private money, your hard money even. If you do the BRRRR correctly, and for easy number of sake, let's say you buy a property for 50,000, you put 25,000 into it, and it appraises for 100,000, you could then go to a bank afterwards, put a convention loan on it for 75 percent and get back all the money you had and just recycle that over and over again. It's a way for people to grow that portfolios rather quickly. It is something that we realize and had success with our property number 3 and is a strategy that we have been and will continue to implement as we grow our portfolio.

Kyle Clugston: If people have the savings, the beauty of the BRRRR is that the ARV is usually a little bit higher than that 100 mark that Lauren just put out there for that example. You're actually able to recoup even more, which then would be used as a down payment on your next property.

Deidre Woollard: Is the perfect BRRRR defined as making that 100 percent?

Lauren Clugston: Making a profit would be great. But technically a perfect BRRRR is that you have zero money in the deal, you've paid back yourself or your lender, the purchase price and the renovation and the closing cost, and you have zero money in the deal and you're still making cash flow each month.

Deidre Woollard: Excellent. In doing that, one of our team members is doing a house hack. He has his own spreadsheet. I noticed you guys are very transparent with your numbers. How has that helped you stay accountable by putting those out there?

Lauren Clugston: Definitely, we first started being transparent with the numbers because that's what I wanted other people to do from me. When we were starting to learn, I was like, I appreciate that you don't want to give too much information, but it's hard for me to fully understand the concept without seeing the numbers and not seeing it in pure practice. We started doing it, one, because I hoped other people would do it, and two, exactly what you said to hold ourselves accountable. There are times where we would go over on a renovation and like, "I don't want to tell people we went over on a renovation." Kyle was like, "You have to." If you want to be transparent at one point, you need to be transparent throughout the whole time. It's been really cool to see people reach out to us and say, we're really glad that you shared the downs, not only the ups because it's not always cash flow and rainbows all the time. There's a lot of setbacks.

Kyle Clugston: Then it's multi-beneficial because as we document our journey because we're writing it down, it's ingraining into our memory a lot better. But we're also documenting price of materials. That's making us better investors that we could walk into a property and know exactly what the costs of renovation is going to be about time to leave the door. In documentation, we're learning it a lot better.

Deidre Woollard: Awesome. Well, I want to talk a little bit about you guys doing your own renovations. I was on a call with one of our team members today and we were talking about house hacking and he had just installed his first toilet flange. There were some problems along the way. You guys have done some of the renovating yourself, but you're also using contractors. What's that whole journey been like for you?

Kyle Clugston: It has saved us. I can't even tell you how much money. Being able to hire just our own subs, but taking on a bulk of that renovation ourselves. We started off not really knowing how to plan a renovation and now it's like second nature to us.

Lauren Clugston: We always say because people will still get on us like, "Why are you guys still renovating your own properties? You want to grow and you want to scale." I do understand that, but we're at a point similarly to when we started where right now we're leveraging what we have and we have time. We're obviously making money with our properties but we're reinvesting it back to buy more. We're in this growth phase and so we could leverage what we have now to create more wealth in the future. We feel like that makes sense for us. But we are at the point now where we are DIYing somethings that makes sense for us and then hiring out some basic level tasks or things that we feel would make the project more efficient and our time could be best used somewhere else.

Deidre Woollard: Before you started this, what was your level of DIY experience? Did you end up having to do a lot of like looking at YouTube, what is your process been for learning some of this?

Kyle Clugston: I mean, it's pretty funny because what's holding up our microphone [laughs] is just a bunch of books. Black & Decker has a great line of books, YouTube. But I grew up in a house where my dad just did all the work on the house that needed to be done. It was like little tasks here and there.

Lauren Clugston: You were very like figured it out family.

Kyle Clugston: Yeah. It was just learning and I'm best learning hands-on. That's why the analysis paralysis is a perfect example. Only so much could be learned from reading books and reading forums and things. It's not until you're in it that you're going to learn the biggest lessons.

Lauren Clugston: I had no construction or DIY experience at all. I would just say that I'm really good at following directions. Whether that's assembling IKEA kitchen cabinets, or Kyle just telling me what I need to do, I'm a good helper.

Kyle Clugston: I love that she loves assembling IKEA kitchen cabinets because that's like my nightmare. [laughs]

Deidre Woollard: [laughs] They do not make it easy.

Kyle Clugston: No.

Deidre Woollard: When you were getting your first house hack, were you looking for property that needed some work, and were you ready to take that on?

Lauren Clugston: Definitely, we wanted something that we could create value. I don't want to say we didn't have the money to buy something that was turnkey moving ready, but we saw the value in buying something that needed work foreseeing appreciation by doing the work ourselves and then having a nice margin or upswing at the end and so we were definitely looking for something that needed work. Our first probably ended up being a HUD foreclosure. That required a lot of work and I wouldn't say it's been our biggest renovation, but we tackled a lot considering it was our first one.

Kyle Clugston: It was not an easy property.

Lauren Clugston: Yeah.

Kyle Clugston: To be the first property that you buy for sure.

Lauren Clugston: Because one of the kitchens, so originally before we had bought it and way back when it was a single-family home. Along the way, somebody legally did convert it into a duplex, but when we got it, the second-floor unit that they deemed the kitchen was really just a gas line poking about in a floor and a sink. We had to add and everything else.

Kyle Clugston: Yeah.

Lauren Clugston: It was definitely a great first experience and we had a lot of fun doing that.

Deidre Woollard: As a HUD foreclosure, does that mean it wasn't as is?

Lauren Clugston: Definitely as is. They wouldn't make any repairs, they wouldn't do any seller concessions. Then even more so to the point where the utilities have been off for a few years and in order for our bank to fund it, the utilities had to be on and inspected. But in order for utilities to be turned on, we had to have a pressure test start.

Kyle Clugston: Yeah. We had to put a pressure line on all the water lines.

Lauren Clugston: Pressure gauge.

Kyle Clugston: Pressure gauge, and had the whole pressure wall [inaudible 00:11:47] was broken so it's a full pressure.

Lauren Clugston: But we had to pay for that to happen so we had to pay over a $1,000 to have this test done, just to have the utilities turned on before we even closed on the property.

Kyle Clugston: Yeah, it was crazy. That was nuts.

Deidre Woollard: [laughs] That's pretty hard for first-time buyer, first-time house hacker. How did you deal with that? Was it stressful? Did it make you ever second guess anything? How did you get over that?

Lauren Clugston: I don't think we ever second-guessed it but I will be completely honest and say that I had HGTV rose-colored glasses. I thought we were going to come in, we were going to paint agreeable gray on the walls. We're going to lay nice floors, put up white kitchen cabinets, it'd be so pretty. I remember there was a day where we had to write a check to our plumber for $6,000 or something, and I was like, "This is so annoying, we're spending so much money on things that no one will ever see." At that time, it was super frustrating, now I've learned that investing in infrastructure and the foundation of each property is beneficial for us as property managers because it prevents maintenance issues on the line. But at that time I was very unhappy about it.

Kyle Clugston: That's one of the things that we do first is to take care of those what we consider capital expenditure items, which is like the way it sounds. But it's everything you don't see. But it is one of the most costly items. But because we self-manage, we're taking care of our future self in doing that.

Deidre Woollard: Oh, yeah. It's definitely what I call a gift to future you, to not have to deal with that later. But you're absolutely right. It's not the sexy part, it's not the fun part, it's not picking out tile. It's the least attractive part of it. With plumbing and electrical, you find that a lot of times you can't do it yourself. Has that been your experience, did you find that some of that you just have to turn over to contractors?

Kyle Clugston: Yeah, for sure. Especially because we bought the houses in our own name, so I act as the general contractor and then I hire the subs out. Those subs need to be licensed, then they need to have a stamp when I hand permits, and a lot of times they have to be stamped and they have to be licensed in order to have that stamped. Yeah, a lot of that work does have to be done by a licensed subcontract.

Deidre Woollard: Have your house hacks all been ones that were duplexes or were you doing any conversions?

Lauren Clugston: No conversion. We hear people doing this all the time, but New Jersey housing code and zoning enforcement is quite difficult to lease on a property, so we've never done

Kyle Clugston: They just won't do it.

Lauren Clugston: We've never done like a single to a two-family. We hear about all these cool [inaudible 00:14:19]

Kyle Clugston: Two families to one family, they'll do.

Lauren Clugston: Yeah.

Kyle Clugston: But not one to two.

Deidre Woollard: [laughs] I'm hoping that zoning becomes a discussion again because I feel like multi-families zoning was starting to happen in certain cities and then the pandemic happened and a lot of those conversations stopped. But given the housing issues that everybody is having, it seems likely that they are going to be some of those conversations. Maybe not in New Jersey, but certainly happening around the country. Which brings up another question of mine. You guys are probably watching the market the same way I am, and housing inventory is just insane in trying to find houses, I know flippers and investors are having such a hard time. The person on our team that's house hacking, it took them a lot of tries to get their property. You guys had a direct mail campaign and I wanted to learn about that because I thought that was pretty smart; sending out letters to try to find the next property that you want to invest in.

Lauren Clugston: We've seen a few other people do direct mail campaigns on a very large scale. For example, they're sending out a thousand letters each week. We just felt like, how can we compete against those people? We thought, well, maybe we don't send out a thousand letters per week, maybe we only send out 20, 30, or 40. We decided to be very specific. Let's be the exact opposite of the "We buy houses people" and let Steve, Lauren, and Kyle your neighbor down the street who maybe wants to help solve a problem for you. We went driving for dollars and then pulled a very small list of properties that we a 100 percent want to buy. Because sometimes when you pull a super large list, there's probably properties on there that you are not even really interested into and you're wasting money and time mailing to them. We got a list. I believe it was like 46 addresses. We did a printed letter with a photo of us and a hand address envelope with the idea that when it comes in the mail, they won't wait to open it. If its hand-addressed, that would raise some curiosity. Out of those 40 or 50 letters, we ended up getting two phone calls, and then one deal ended up closing. It was really successful for us.

Kyle Clugston: That's another thing is that we sent two different types of letters. We send letters to absentee landlords and people that actually live in the home. If we were to pull a big list and sent out a bunch of mailers that all said the same thing, they wouldn't get the point across that we're trying to make.

Deidre Woollard: Lauren, you mentioned driving for dollars. Can you explain a little bit of what that is?

Lauren Clugston: Driving for dollars is when you get your car and you start driving around the neighborhood that you're interested in buying in and you're looking for houses that seem distressed. That may mean that they're run down, there's trash in the yard, the weeds are overgrown, the grass hasn't been cut, roof needs to be updated. What that will usually mean is that either the homeowner doesn't have the financial means to keep the house up and running and maybe in financial distress, in which case they may be interested in selling, or you have a landlord who might be a little slum lordish and isn't really looking to take care of their property. You're just looking for an opportunity to solve somebody else's problem in turns that you end up purchasing the property.

Kyle Clugston: I can guarantee that that house that is an investment property has gotten housing violations over the years. That may be a property that they're just sick of getting housing violations, they're ready to dump this place off.

Lauren Clugston: Yeah. We basically drive around the neighborhood, write down a bunch of addresses of properties with overgrown grass. Then we come home, we look up, we see now what was it purchased for, how much did they buy it for, do they have a lien on the property, stuff like that. Then we put all the list down and then we send out our mailers.

Deidre Woollard: How are you getting that information?

Lauren Clugston: In New Jersey, there's a free website called NJParcels.com, which you just type in an address and it tells you who the owner is and where they live. If you don't have a free research like that in your city, there are a lot of websites like DealMachine or PropStream that you could skip trace information, you can get people's addresses and phone number. Technically all is public information, these platforms just make it easier for you to get.

Kyle Clugston: Then once you find that info, you would just jump back onto the MLS. That's where we gauge a lot more specific info like when the property was last sold with the tax on, things like that.

Deidre Woollard: Excellent. Are you finding that it's a more competitive market right now? I know the real estate agents that I talk to, they're doing anything they can to shake out inventory. Have you seen that happening in your market?

Lauren Clugston: So much so.

Kyle Clugston: We're on the west coast. I feel bad for people investing in beach towns.

Lauren Clugston: The west coast of New Jersey. [laughs]

Kyle Clugston: I'm sorry, yeah. Of New Jersey, yeah. For sure. The coastline, the beach towns, it's insane right now.

Deidre Woollard: Yeah, it's interesting. Beach towns everywhere are top priority, which is odd. The luxury market to all of the small towns, that's the zoom town effect has definitely been an issue. You talked a little bit about getting education from books. I know you were also part of an investor group, but it seems like there's a pretty tight crew of investors in your group, seems you guys have a lot of fun. Did you start off knowing that group before you got into investing, or did that come later in your career as investors?

Lauren Clugston: We started going to local meetups earlier in our career.

Kyle Clugston: We started on our first property.

Lauren Clugston: But it took us a little while to really be a part of the ecosystem and start actually networking and utilizing the group for the benefit of the group. Before getting into real estate, we assumed that like most things, people will be very secret of the information. When we went to our first meet-up, we realize people love to talk about what they're doing and they love to share knowledge, and we were happy to share knowledge too. We became really close with other investors in our area and our local meet-up group, and we're all about rising tides raises all ships. There is no way any one of us has enough money to buy the whole town that we all invest in, and so why not help each other out? Share trades, share contacts, share mortgage lenders.

Kyle Clugston: Share refinance reports.

Lauren Clugston: Yeah, definitely. It's a really supportive group. Some people say that one of the things they find so hard about getting into real estate investing is that you don't know anybody who's doing it. I could totally hear you on that because I related to going college. If you grow up in a neighborhood, or family, or in a society that going to college is not the norm, maybe you're first-generation, then you're probably less likely to go to college. But if you grow up in a family, or in a town, or in a neighborhood where everyone goes to college, then you're probably more likely to do it. If you can surround yourself with people who are doing the thing you want to do, you'll be more likely to do it. That was our mindset. We just needed to get around people because in the beginning, we had analysis paralysis so bad, it was a point where I was like, "We are lying to ourselves because we're telling everyone we're investors and we haven't bought a property yet. We need to take some action."

Kyle Clugston: One of the biggest hurdles to get over is finding a contracting team if you're not a [inaudible 00:21:22] . How do you go about finding those people? Well, that meet-up group is a great spot to meet them because whether they're investors, a lot of the members are contractors or they're real estate agents. What a better place to meet clients than an investor group? You're going to meet all these people throughout that group.

Deidre Woollard: I have to ask, how long did that analysis paralysis phase take for you guys?

Lauren Clugston: Long. I would say a solid year of us reading, studying, analyzing markets, and telling everyone that we're going to be doing this, but almost three years. Then really marinating in our mind and thinking that's something we wanted to do. It definitely took us a little while.

Deidre Woollard: How long did it take to find a property? Was that part of what took so long?

Lauren Clugston: I would say at the time, it wasn't necessarily trying to find a great deal because looking back, and I know everyone would say this. Looking back, I wish we bought every property that we looked at because they would all be amazing right now. It's really just not trusting yourself. Because, yes, like I said, we're going to meet actually around other people who are doing what we're doing, but I think we just felt super alone. There was no professional or mentor that we could go and ask and say is this the right move for us? It was just really scary and I think it was the fear that really kept us stronger.

Kyle Clugston: Yeah. There's no book out there, there's no format that is going to tell you whether this property that you're looking at that time is the right deal at this number. We look back at the properties that we toured prior to buying our first one, and if we looked at it from this vantage point now, it's like I wish I had that deal back and I would jump on that. Yeah, it is. It's having that confidence in knowing that all everything that you've done, you're making the right choice.

Deidre Woollard:. I wanted to pivot a little bit because I noticed looking at your Instagram, that last year was this reset year for you. It seems you're taking your business down really to the next level. Wondering if you could tell us a little bit about what that journey has been like.

Lauren Clugston: I mentioned earlier that our goals and plans have changed significantly since we first started investing. Over the past year or so, we've really step back and thought, what do we want our lives to look like in the future? We reversed engineered that and tried to figure out, how do we get there. We realized that what we're doing, or what we were doing, will not get us to our 10-year goal. We have to change something. That big factor was that we need to start treating this more like a business, and not like a hobby or like a side hustle. We are still DIY some of our renovations right now, just because that makes sense for us in this moment. But the overall plan is to really start outsourcing, to start utilizing more subs, more contractors. We don't respond to maintenance calls anymore. I still do self-manage, just because we have it done in such an efficient manner, it doesn't make sense to hire it out. We really are just having that mindset, that we're business people, and entrepreneurs and not just real estate investors, and how can we make this business more scalable and more efficient, so that we could actually live the life that we're working towards.

Kyle Clugston: Since we did that private money deal, that was an eye-opener. We could really be pumping out properties double what we're doing now, a year utilizing private money, and if we had contractors just doing everything. For us, our time frame is usually around four months, where our contract could do that in 50 percent of the time.

Deidre Woollard: Well, let's talk about that, using private money because I think that's a big step for a lot of people. I noticed you bought with a home equity line of credit at one point as well. But how has that changed you using different forms of financing?

Lauren Clugston: Starting out, we 100 percent thought that all we had to use was our own cash and unconventional bank financing, and that's a slow growth, [laughs] unless you're pulling in big six figures, you are going to little your funds down pretty quickly. Our first investment property that we did house hack, we then this past year pulled a HELOC on. We had enough equity and then set of refinancing, we thought let's just do a HELOC. We actually closed the week that the pandemic started. At that time, it was an amazing safety net, I'm so fortunate that we had. But then we start realizing, "Okay, how can we put this equity to work?" We ended up buying our fifth property, cash, if you will, with our HELOC, we're able to put in cash offer, because we just pulled the funds down from a HELOC. We will be refinancing that soon, putting conventional mortgage on it, and then getting our HELOC back. That was just a great way to utilize equity that we already have, to grow our portfolio. Then to circle back to private money, doing private money is asking people to help you out like, "Hey, I have this deal, I don't have any money for it, would you be open to lending it for me?'' It's definitely that's what we felt like. Now, there are people who are asking us if we have more projects coming that they can help fund. Really, it's a mindset shift change, because now we're creating investment opportunities for people, and not necessarily begging for money.

Deidre Woollard: [laughs] I think thinking of it as begging for money is definitely the wrong mindset, and I could see why that would be a hurdle. How did you find private money for that?

Lauren Clugston: Originally, you just start with your friends and family, because private money is a relationship-based business if you will. It's not like hard money. You can't just like Google private money lender and find someone. You start with people who you know, like, and can trust, and people who know, like, and trust you. We just started with our families. Our first lenders were my parents and my brother. You already have that relationship, and so you just make sure you signed some legal documents, to make sure everything stays on the up and up throughout, but that's really where you start. Then as you go from there, you now have this resume, you now have experience of doing credit line with somebody. You can now open it up to larger people, you start looking at maybe colleagues, coworkers, friends, or even people that you meet at local meet-ups.

Kyle Clugston: That's why the documentation were so important because in all those years of us documenting everything that we did. We basically took all of that with a little bit of new stuff but created what we call invest with us package, that we give to potential private lenders. All that does is, that's going to give them an example deal based on the market that we're in and projects that we've done in the past, and say, "Hey, if this project comes up, would you be interested in investing with us?" A lot of times it's not a conversation between you and them, but it's a conversation between them and maybe their significant other so that when this property pops up, especially in this market right now, where properties are up in one day and going the next, that money needs to be available and those conversations need to have already occurred.

Deidre Woollard: That's a really good point. Want to talk a little bit also about automating and delegating. You guys talked about that as well. I feel like that's an important hurdle for investors if you want to grow your business. There's that tendency to want to keep it all. You do it yourself, but then you can't scale. How has that contributed to your ability to scale, and there are any programs that you've been using? Love to hear about those too.

Lauren Clugston: It's definitely crucial, especially because Kyle and I both still work full-time jobs, and so we need to make sure that investing is as efficient as possible, so we can still do both. I could talk to it from a property management point of view because that's mainly my lane. But basically, I utilize right now cozy.com, which is a property management software. It collects all of our rhymes. It does all of our applications, it help the showings and lifting the units, and everything is online, and honestly managing our properties on the minimum takes probably an hour a month, and at most, if we have a maintenance call, maybe four or five hours a month. That's really me just coordinating with a trades going to fix the issue. Then from bookkeeping point of view, we use Stessa, which is another online program. That's been amazing because I will be completely honest with you. On our first property, we went to Home Depot at least once a day if not five, [laughs] and I was thinking all of those are seats. I'm entering them into my Excel spreadsheet, what day did we buy it? What did we buy? What room? It was a total waste of time. Then I realized, I could just set up a checking RCM business credit card in a business checking account. Clock this up to Stessa, and all my transactions magically appear into this beautiful database that I just go into every Monday night, sign it to the different properties. When tax season comes, I can just export the tax report and it's amazing. That's been a huge time saver. Then we have also been using Airtable for project management. That's a little less automating, and more so just like streamlining management, and it keeps us from dropping the ball basically.

Kyle Clugston: Then for property walk-throughs, we created a property walk-through calculator on Airtable. Again, [laughs] reference back to documentation, just from documenting what all of our materials costs. Because when we do DIY, that's all we're really accounting for is cost of material. We can punch those numbers in, as we walk properties or potential properties that we're going to put offers on, and we'll know what those budgets are the second we leave the house.

Lauren Clugston: Exactly what you mentioned earlier about being kind to your future self. We're not doing deals every week or every month. There are some things that maybe we only do once a month, or once a quarter. It does take a little bit of time for your brain to remember, like what was that process again? Who do I have to email? I'm very big at creating SOPs. An example of that would be closing an off-market deal. As we closed our first off-market deal, every step of the way, I was sticking out. After the earnest deposit check get sent, I need to email this person, and here's their email address, and here's their phone number. The four things that they're going to need from me are the purchase price, the signed contract, and C&D. By writing things down like that, it just makes sure that, one, you're doing everything the same each time, so you're never forgetting. Then two, we're just taking less mental bandwidth, because we have so much going on. I can't remember how I did something last year, and so despite writing it down, you're really just helping your future self out.

Deidre Woollard: I love that. I feel Airtable is the new Excel. Everyone is moving over to Airtable now.

Lauren Clugston: We're big fans. I feel its Excel meets Asana, and it's the perfect combination.

Kyle Clugston: Yeah.

Deidre Woollard: Do you have your properties, you talked a little bit about taxes, are they all in different LLCs, or do you have it all together?

Lauren Clugston: We currently have them all in our personal names. We've been doing that strategically for the financing, basically. As we're growing, we are going to be switching them over to LLC for asset protection, but we're big fans of offensive protection and not defensive protection. LLC is great in terms of asset protection, for when you get sued. Well, we [laughs] want to take steps and put things in place to just never get sued to begin with. That's what we're really focusing on right now. Making sure we're doing everything to core, making sure we're using licensed contractors, making sure we're having lawyer draft the contracts with our tenants and with those contractors. We're really just trying to stay above board throughout. We never really have to get to that LLC protection for it, and then we do have an umbrella policy over the top. Sorry, we can't say that. Overall as we grow it will be important, so we're moving towards that.

Kyle Clugston: Not to say every story is the same, but most of the time when you hear nightmare tenant stories, it probably all comes back to tenant screening. That tenant probably was not fully screened or screened properly. That was where the downfall was.

Deidre Woollard: Let's talk a little bit about that because I feel everyone that I talk to that's an investor has their own method and their own way of determining who that great tenant is. Is there anything that you guys have learned as you've gone through this process that helps you really determine what a great tenant is, beyond things like credit score, employment history?

Lauren Clugston: Two things. One, you can be emotional. [laughs]

Kyle Clugston: Exactly. [laughs]

Lauren Clugston: I believe everyone's story, I'm like, "But, Kyle, you don't understand." He's like, [inaudible 00:36:16] [laughs] Not being emotional is helpful, and then two, we count a lot on references. I understand that our credit score doesn't tell the whole story. I understand that things happen and that people make mistakes, so I'm very big at calling past landlords. Not only the most recent or current landlord, but also the ones in the past. You might get a more honest picture from them just because they're going to give you the real details. Yes, they kept it clean and they always paid on time. Or they were always late but they always paid the late fee and they left the unit beautiful when they left. I think having that personal experience is more valuable and holds more weight than someone's credit score.

Kyle Clugston: Excellent point there. Lauren said to call past landlords because if you call their current landlord, they could be such a terrible tenant that they just want them out of their property. They're like, "Oh, yeah. No, they're such a good tenant." [laughs] They move out and you take them. But then also a little bonus to call all those landlords is to talk to other people that have properties that they may be looking to get rid of. They may have large portfolios that they're looking to dump or retire, so you can create a narrative with them that could potentially lead to another deal.

Deidre Woollard: That is a great tip. That's really smart. I love that. I want to talk about your newest property. Was seeing some of your YouTubes about it and I thought it was a really good example of some of the things that maybe can go wrong a little bit or be a surprise. I notice that you guys really did your due diligence. You did a home inspection, great radon test, also pretty common. But you did a sewer line scope and I think a lot of people don't do that. Nobody likes to really talk about the sewer, but the sewer turns out to be pretty important if you're dealing with rental properties and investment properties.

Lauren Clugston: Definitely. There are two reasons why we hit this property hard with inspections. One is we're getting more experience and so we are learning from other investors' mishaps. I am part of a little group of a bunch of female investors and one of the girls, she always has sewer line issues. [laughs] That came from her. Then two, the seller of this property, he never lived in it, he was rather hands-off, and so he just didn't have a lot of information about the property. No negligence from him, he just didn't have a lot of information to share. We were like, "Okay, well, if he's not going to give us what we need to know, we need to find it out ourselves." Yes, we did a normal home inspection which comes with the radon and the termite, then we also did the sewer line scope, and we actually also did an oil tank sweep. The reason we did those two was because oil tanks are big in this area, and while we thought it was probably disconnected, we saw signs of one that was probably removed. You just never know if there's another one underground and that can be super expensive. Then with the sewer line, that's something that no one ever checks. But all you need one day is for your tenant to call and say that their sewage back up and other belongings that they're storing in the basement are ruined, and you need to completely replace the pipe and it's going to cost $15,000. This is something that can be prevented if you just spend like 250 bucks during the inspection.

Kyle Clugston: Yeah, that's like a $20,000 fix. Easy to go from the house to the street on a sewer line for them to dig, replace the whole thing. That could be a massive deal-breaker.

Deidre Woollard: Absolutely. I think sometimes what happens, and I think investors, as they go through, get better at this, but there's always that problem of emotion and maybe getting attached to the idea of this being your property. It seems like getting a lot of those tests can get you out of that mindset. Is that something that you found?

Lauren Clugston: I would agree with that. It definitely helps you think of things more at the data and more at the facts and not from an emotional point of view. Like I said in the beginning, I'm not risk-averse, I really like protecting ourselves, and if spending another $250 to get a sewer line scope is going to make me sleep better at night and make me feel more comfortable allowing people to call this place their home, I just think that's a good kind of return.

Kyle Clugston: I love it. We had the tank sweep and the guy came and walked us through the whole thing, what he's looking for, and then also what we can look for while doing property walk-throughs that may suggest that there is an underground tank, or if there was an above ground tank at one point that's been disconnected. He gave us a bunch of tips on what to look for when we're walking properties. We would've never gotten that unless we didn't have him come out.

Lauren Clugston: Exactly. Not to say that we wouldn't get another tank sweep in the future, but by paying this one upfront cost, we now gained a lot of information to help us be better investors when we're walking properties in the future.

Deidre Woollard: Are the properties that you're looking at generally older houses? You've mentioned the oil tanks, is that one of the things that is a concern for you is that because you're getting older houses?

Lauren Clugston: They're so old. I would say [laughs] our youngest house is 90 years old.

Kyle Clugston: Yeah. Are all early 1900s.

Lauren Clugston: Yeah. Every single one. That is a huge concern, are waste lines being galvanized and being in rough shape? For us to be buying this old house, it's even more important to do due diligence. Yeah. We're always looking for an open tube, outdated plumbing, definitely oil tanks, and what's another big one with the old houses? Oh, plaster and lath. Everything's plaster and lath. There's no rock on these walls. [laughs]

Deidre Woollard: Any issues with lead paint or anything like that?

Lauren Clugston: We haven't had any issues, fortunately.

Kyle Clugston: Asbestos tiling in basements. Luckily, we haven't had any that have been crumbling and they've all been in good shape, so we just do either a coated paint over top. We usually do new flooring anyway, so it just goes right over top of them.

Deidre Woollard: Interesting. Are you also looking at eco-friendly or green? Is that a concern for you at all as you look at renovating?

Lauren Clugston: It definitely is. Going back again, thinking about your future self, your HVAC system. If you have poor windows, poor installation and you put in a brand-new HVAC system, well, that thing's going to be working its butt off [laughs] in the depths of the seasons, really trying to heat or cool the home. We do try to take that into consideration. We're replacing windows, making them more efficient. Then definitely with smart thermostats or other smart features just to definitely make the home a little bit more green.

Deidre Woollard: Excellent. I love that. As we wrap up, obviously, you're a couple doing this together. I think that's one of the things that people always wonder, couples wonder, can we do this together when they're starting out? What have you learned? What have you learned about each other and what has that been like?

Kyle Clugston: I love that you just asked that, to be honest, because it's a huge hurdle, especially for people. Maybe they're a great couple but maybe don't work very well together. We always made the joke that we'd be terrible on Amazing Race. But [laughs] maybe we wouldn't be, because we do work really well together. One of the biggest things was we read Traction by Gino Wickman, and one of the things we took away from that book was to have weekly meetings. That was one of the biggest things. To have a business meeting, and then make sure that we're having husband and wife time too. Not have business meetings throughout the day. Have specified times to talk business.

Lauren Clugston: I would 100 percent agree with that because I'm the type of person where my brain is going all the time. That might be 11:00 PM at night right before we're falling asleep, I'm like, "Did you call the plumber?" [laughs] Or in the middle of the day, we're on the beach with our family and I'm like, "What did that quote come in on?" My brain's always moving. Kyle's not like that. He's very much in the moment all the time and it was creating a little bit of friction that I was thinking about business randomly all the time, and then I would almost get mad at him, "How do you not know the answer?" He's like, "We're on the beach, it's a Saturday. I don't know." Having meetings both gave us a space and time to talk, and then also let me know like just write it down, you could talk about it on Monday. [laughs]

Deidre Woollard: The benefit of air table and notes. Is it all computer notes for you guys, or do you take physical notes? What else works for you?

Kyle Clugston: It's funny. The computer has all the programs and stuff. I'm very much notebook and pen, and then our meetings are whiteboard meetings. Which is nice because we can then refer back to that thing on Tuesday when we've had the meeting last Monday. It's nice to have that physical thing that we can go back and refer to.

Lauren Clugston: Also working together, well, definitely it creates more opportunity for arguments. I would say, it also creates more opportunity to really strengthen your relationship. I feel like we are at a point in our relationship where if you are not working towards the same goal together, your relationship just physically can't get to this level because it's not given the opportunity. The fact that we both have the same goals and the same dreams and are both working towards that goal together has just brought us a lot closer in other areas.

Kyle Clugston: I'd agree 100 percent with that.

Deidre Woollard: Love that. Last question. You guys just started sharing your journey on YouTube. There's risk in that, but that's also a lot of fun. Why now?

Lauren Clugston: That's a good question. We've been sharing our journey since 2017 on Instagram and it's been so much fun. I think what we've realized is that people want to know every detail. [laughs] What better way to do that than to bring them along with us while we're doing everything. We bring you with us to the closing table, to Home Depot, while we're renovating, while we're having lunch, while we're fighting. There is an episode a little while back where we got into an argument and I cried. We just try to be really transparent because we like helping people and if showing you what we're doing helps other people take that one extra step, and then it's totally worth it for us.

Kyle Clugston: Then that's the one thing that we lacked getting into it, was what step-by-step, exactly what to do from beginning to end. For there to be a little camera on our shoulder as we go about searching for our next property, searching for our next house hack, and then everything from the beginning to the end, that is a massive new wealth of knowledge right there.

Lauren Clugston: I feel like we don't like saying here are the five things you should do. What we do like saying is, "This is what we're doing. If it's helpful to you, that's great. Come along with us."

MALE_1: [MUSIC] You're listening to the Millionacres Podcast. Our mission at Millionacres is to educate and empower investors to make great decisions and achieve real estate investing success. We provide regular content in perspective for everyone from those just starting out seasoned pros with decades of experience. At Millionacres, we work every day to help you demystify real estate investing and build real world. [MUSIC]

Deidre Woollard: Hello, I'm Deidre Woollard, an editor at Millionacres, and thank you so much for tuning into the Millionacres Podcast. Today, I want to talk a little bit about analysis paralysis. Because I think that happens to just about anybody when they're thinking about getting started in real estate investing, because it's so easy to think about it and read books but not dive in. Sometimes, I think we all need a little inspiration. The inspiration today comes from my guess, Kyle and Lauren Clugston of Rentals to Wealth. They're here to share their journey with us and inspire prospective rental property investors to take that first step. One of the things I like about their story is they've just been really focused and cautious. They show that you don't have to take this big risk to get out there and make money in real estate. Thank you so much for joining me today.

Lauren Clugston: Thank you so much for having us. We're so excited.

Kyle Clugston: We're excited to be here.

Deidre Woollard: Awesome. I was looking at your story and one of the things I really like is, you just had this really slow and steady approach. You've been at it since 2017. I think you just closed on your six properties, is that right?

Lauren Clugston: Correct. That bringing us to 10 doors.

Deidre Woollard: Nice. Why was that slow approach the right way for you?

Lauren Clugston: I have just always been very risk-averse. Especially in the beginning, real estate seems risky. Especially, if you don't have other investors or people in your family or in your circle who are doing it. In the beginning, it was really just a way to help supplement our retirement. Not necessarily to retire early, but obviously, if you get into real estate, once you're in it, you realize how fun it is and addicting it is, and your goals grow vastly quite quickly. [laughs]

Kyle Clugston: Our first two properties were funded with our savings. After we depleted a lot of our savings on the first property, it took us a little bit to get some money back into savings and then would fund that second purchase and then renovation. It wasn't until our third property, we started utilizing another strategy like private money, where it opened a lot of doors where we can start adding more properties to our portfolio a lot quicker.

Lauren Clugston: Definitely. We don't have goals or dreams of owning millions and millions and millions of dollars and hundreds and hundreds of units. It's slow methodical approach. I think jives with our goal and jives with our risk tolerance and where we want our life to be both now and in the future.

Deidre Woollard: Great. Did you start investing near where you already lived?

Lauren Clugston: Yeah. One of the easiest things to do when you start real estate investing is to utilize your primary residence as an asset. What we did is we house hack, which is basically you take your primary residence and whether that be a single-family home or for our case, a two-family home and we rented out the other units. It's a way to tiptoe into real estate investing, get into it with a little bit less risk and a little bit less funds because since it is your primary residence, you have the advantages of lower interest rates and lower down payments.

Kyle Clugston: Then because it was a house hack, we wanted it to be in a place that we wanted to live. Not only where we invest in, but we're also lowering our living expenses to be able to live in an area that we wouldn't, otherwise, be able to afford. That was how it shows that really was where we want to live.

Deidre Woollard: I love that. On our team we've got, I think three or four people who house hacked as their first investment. One of them just bought his first property with his wife. They're going through that first renovation process and having a lot of fun along the way. But now it seems like you guys are using the ever popular BRRRR method, which is buy, rehab, refinance, and repeat, is that correct?

Lauren Clugston: Close, and there is rent. [inaudible 00:04:18]

Deidre Woollard: That's the extra R there.

Lauren Clugston: Yeah.

Deidre Woollard: Was that your plan when you were starting out or did you just figured you do the one house hack?

Kyle Clugston: It's funny, I think that's where we started out, it's not where we are now. Where we thought we were going to be and what our strategy was, we thought we were going to invest solely in small residential multi-families and that would be it.

Lauren Clugston: We felt we're going to buy one duplex a year for 10 years and just be really slow and thoughtful about it. Technically, we did BRRRR our first property. But it wasn't a perfect BRRRR and I don't think we knew that what that meant at the time. Basically, yes. We bought a property, we renovated it, we rented it out, and then we did refinance to recoup some of those costs. But because we didn't go into the first deal thinking that we're going to BRRRR it, we didn't necessarily get that perfect BRRRR. But yes, as we move forward, we realized the power of BRRRRing and basically, the lore of it is that once you have this seed funding, whether that be your own money or private money, your hard money even. If you do the BRRRR correctly, and for easy number of sake, let's say you buy a property for 50,000, you put 25,000 into it, and it appraises for 100,000, you could then go to a bank afterwards, put a convention loan on it for 75 percent and get back all the money you had and just recycle that over and over again. It's a way for people to grow that portfolios rather quickly. It is something that we realize and had success with our property number 3 and is a strategy that we have been and will continue to implement as we grow our portfolio.

Kyle Clugston: If people have the savings, the beauty of the BRRRR is that the ARV is usually a little bit higher than that 100 mark that Lauren just put out there for that example. You're actually able to recoup even more, which then would be used as a down payment on your next property.

Deidre Woollard: Is the perfect BRRRR defined as making that 100 percent?

Lauren Clugston: Making a profit would be great. But technically a perfect BRRRR is that you have zero money in the deal, you've paid back yourself or your lender, the purchase price and the renovation and the closing cost, and you have zero money in the deal and you're still making cash flow each month.

Deidre Woollard: Excellent. In doing that, one of our team members is doing a house hack. He has his own spreadsheet. I noticed you guys are very transparent with your numbers. How has that helped you stay accountable by putting those out there?

Lauren Clugston: Definitely, we first started being transparent with the numbers because that's what I wanted other people to do from me. When we were starting to learn, I was like, I appreciate that you don't want to give too much information, but it's hard for me to fully understand the concept without seeing the numbers and not seeing it in pure practice. We started doing it, one, because I hoped other people would do it, and two, exactly what you said to hold ourselves accountable. There are times where we would go over on a renovation and like, "I don't want to tell people we went over on a renovation." Kyle was like, "You have to." If you want to be transparent at one point, you need to be transparent throughout the whole time. It's been really cool to see people reach out to us and say, we're really glad that you shared the downs, not only the ups because it's not always cash flow and rainbows all the time. There's a lot of setbacks.

Kyle Clugston: Then it's multi-beneficial because as we document our journey because we're writing it down, it's ingraining into our memory a lot better. But we're also documenting price of materials. That's making us better investors that we could walk into a property and know exactly what the costs of renovation is going to be about time to leave the door. In documentation, we're learning it a lot better.

Deidre Woollard: Awesome. Well, I want to talk a little bit about you guys doing your own renovations. I was on a call with one of our team members today and we were talking about house hacking and he had just installed his first toilet flange. There were some problems along the way. You guys have done some of the renovating yourself, but you're also using contractors. What's that whole journey been like for you?

Kyle Clugston: It has saved us. I can't even tell you how much money. Being able to hire just our own subs, but taking on a bulk of that renovation ourselves. We started off not really knowing how to plan a renovation and now it's like second nature to us.

Lauren Clugston: We always say because people will still get on us like, "Why are you guys still renovating your own properties? You want to grow and you want to scale." I do understand that, but we're at a point similarly to when we started where right now we're leveraging what we have and we have time. We're obviously making money with our properties but we're reinvesting it back to buy more. We're in this growth phase and so we could leverage what we have now to create more wealth in the future. We feel like that makes sense for us. But we are at the point now where we are DIYing somethings that makes sense for us and then hiring out some [inaudible 00:09:02] level tasks or things that we feel would make the project more efficient and our time could be best used somewhere else.

Deidre Woollard: Before you started this, what was your level of DIY experience? Did you end up having to do a lot of like looking at YouTube, what is your process been for learning some of this?

Kyle Clugston: I mean, it's pretty funny because what's holding up our microphone [laughs] is just a bunch of books. Black & Decker has a great line of books, YouTube. But I grew up in a house where my dad just did all the work on the house that needed to be done. It was like little tasks here and there.

Lauren Clugston: You were very like figured it out family.

Kyle Clugston: Yeah. It was just learning and I'm best learning hands-on. That's why the analysis paralysis is a perfect example. Only so much could be learned from reading books and reading forums and things. It's not until you're in it that you're going to learn the biggest lessons.

Lauren Clugston: I had no construction or DIY experience at all. I would just say that I'm really good at following directions. Whether that's assembling IKEA kitchen cabinets, or Kyle just telling me what I need to do, I'm a good helper.

Kyle Clugston: I love that she loves assembling IKEA kitchen cabinets because that's like my nightmare. [laughs]

Deidre Woollard: [laughs] They do not make it easy.

Kyle Clugston: No.

Deidre Woollard: When you were getting your first house hack, were you looking for property that needed some work, and were you ready to take that on?

Lauren Clugston: Definitely, we wanted something that we could create value. I don't want to say we didn't have the money to buy something that was turnkey moving ready, but we saw the value in buying something that needed work foreseeing appreciation by doing the work ourselves and then having a nice margin or upswing at the end and so we were definitely looking for something that needed work. Our first probably ended up being a HUD foreclosure. That required a lot of work and I wouldn't say it's been our biggest renovation, but we tackled a lot considering it was our first one.

Kyle Clugston: It was not an easy property.

Lauren Clugston: Yeah.

Kyle Clugston: To be the first property that you buy for sure.

Lauren Clugston: Because one of the kitchens, so originally before we had bought it and way back when it was a single-family home. Along the way, somebody legally did convert it into a duplex, but when we got it, the second-floor unit that they deemed the kitchen was really just a gas line poking about in a floor and a sink. We had to add and everything else.

Kyle Clugston: Yeah.

Lauren Clugston: It was definitely a great first experience and we had a lot of fun doing that.

Deidre Woollard: As a HUD foreclosure, does that mean it wasn't as is?

Lauren Clugston: Definitely as is. They wouldn't make any repairs, they wouldn't do any seller concessions. Then even more so to the point where the utilities have been off for a few years and in order for our bank to fund it, the utilities had to be on and inspected. But in order for utilities to be turned on, we had to have a pressure test start.

Kyle Clugston: Yeah. We had to put a pressure line on all the water lines.

Lauren Clugston: Pressure gauge.

Kyle Clugston: Pressure gauge, and had the whole pressure wall [inaudible 00:11:47] was broken so it's a full pressure.

Lauren Clugston: But we had to pay for that to happen so we had to pay over a $1,000 to have this test done, just to have the utilities turned on before we even closed on the property.

Kyle Clugston: Yeah, it was crazy. That was nuts.

Deidre Woollard: [laughs] That's pretty hard for first-time buyer, first-time house hacker. How did you deal with that? Was it stressful? Did it make you ever second guess anything? How did you get over that?

Lauren Clugston: I don't think we ever second-guessed it but I will be completely honest and say that I had HGTV rose-colored glasses. I thought we were going to come in, we were going to paint agreeable gray on the walls. We're going to lay nice floors, put up white kitchen cabinets, it'd be so pretty. I remember there was a day where we had to write a check to our plumber for $6,000 or something, and I was like, "This is so annoying, we're spending so much money on things that no one will ever see." At that time, it was super frustrating, now I've learned that investing in infrastructure and the foundation of each property is beneficial for us as property managers because it prevents maintenance issues on the line. But at that time I was very unhappy about it.

Kyle Clugston: That's one of the things that we do first is to take care of those what we consider capital expenditure items, which is like the way it sounds. But it's everything you don't see. But it is one of the most costly items. But because we self-manage, we're taking care of our future self in doing that.

Deidre Woollard: Oh, yeah. It's definitely what I call a gift to future you, to not have to deal with that later. But you're absolutely right. It's not the sexy part, it's not the fun part, it's not picking out tile. It's the least attractive part of it. With plumbing and electrical, you find that a lot of times you can't do it yourself. Has that been your experience, did you find that some of that you just have to turn over to contractors?

Kyle Clugston: Yeah, for sure. Especially because we bought the houses in our own name, so I act as the general contractor and then I hire the subs out. Those subs need to be licensed, then they need to have a stamp when I hand permits, and a lot of times they have to be stamped and they have to be licensed in order to have that stamped. Yeah, a lot of that work does have to be done by a licensed subcontract.

Deidre Woollard: Have your house hacks all been ones that were duplexes or were you doing any conversions?

Lauren Clugston: No conversion. We hear people doing this all the time, but New Jersey housing code and zoning enforcement is quite difficult to lease on a property, so we've never done

Kyle Clugston: They just wont do it.

Lauren Clugston: We've never done like a single to a two-family. We hear about all these cool [inaudible 00:14:19]

Kyle Clugston: Two families to one family, they'll do.

Lauren Clugston: Yeah.

Kyle Clugston: But not one to two.

Deidre Woollard: [laughs] I'm hoping that zoning becomes a discussion again because I feel like multi-families zoning was starting to happen in certain cities and then the pandemic happened and a lot of those conversations stopped. But given the housing issues that everybody is having, it seems likely that they are going to be some of those conversations. Maybe not in New Jersey, but certainly happening around the country. Which brings up another question of mine. You guys are probably watching the market the same way I am, and housing inventory is just insane in trying to find houses, I know flippers and investors are having such a hard time. The person on our team that's house hacking, it took them a lot of tries to get their property. You guys had a direct mail campaign and I wanted to learn about that because I thought that was pretty smart; sending out letters to try to find the next property that you want to invest in.

Lauren Clugston: We've seen a few other people do direct mail campaigns on a very large scale. For example, they're sending out a thousand letters each week. We just felt like, how can we compete against those people? We thought, well, maybe we don't send out a thousand letters per week, maybe we only send out 20, 30, or 40. We decided to be very specific. Let's be the exact opposite of the "We buy houses people" and let Steve, Lauren, and Kyle your neighbor down the street who maybe wants to help solve a problem for you. We went driving for dollars and then pulled a very small list of properties that we a 100 percent want to buy. Because sometimes when you pull a super large list, there's probably properties on there that you are not even really interested into and you're wasting money and time mailing to them. We got a list. I believe it was like 46 addresses. We did a printed letter with a photo of us and a hand address envelope with the idea that when it comes in the mail, they won't wait to open it. If its hand-addressed, that would raise some curiosity. Out of those 40 or 50 letters, we ended up getting two phone calls, and then one deal ended up closing. It was really successful for us.

Kyle Clugston: That's another thing is that we sent two different types of letters. We send letters to absentee landlords and people that actually live in the home. If we were to pull a big list and sent out a bunch of mailers that all said the same thing, they wouldn't get the point across that we're trying to make.

Deidre Woollard: Lauren, you mentioned driving for dollars. Can you explain a little bit of what that is?

Lauren Clugston: Driving for dollars is when you get your car and you start driving around the neighborhood that you're interested in buying in and you're looking for houses that seem distressed. That may mean that they're run down, there's trash in the yard, the weeds are overgrown, the grass hasn't been cut, roof needs to be updated. What that will usually mean is that either the homeowner doesn't have the financial means to keep the house up and running and maybe in financial distress, in which case they may be interested in selling, or you have a landlord who might be a little slum lordish and isn't really looking to take care of their property. You're just looking for an opportunity to solve somebody else's problem in turns that you end up purchasing the property.

Kyle Clugston: I can guarantee that that house that is an investment property has gotten housing violations over the years. That may be a property that they're just sick of getting housing violations, they're ready to dump this place off.

Lauren Clugston: Yeah. We basically drive around the neighborhood, write down a bunch of addresses of properties with overgrown grass. Then we come home, we look up, we see now what was it purchased for, how much did they buy it for, do they have a lien on the property, stuff like that. Then we put all the list down and then we send out our mailers.

Deidre Woollard: How are you getting that information?

Lauren Clugston: In New Jersey, there's a free website called NJParcels.com, which you just type in an address and it tells you who the owner is and where they live. If you don't have a free research like that in your city, there are a lot of websites like DealMachine or PropStream that you could skip trace information, you can get people's addresses and phone number. Technically all is public information, these platforms just make it easier for you to get.

Kyle Clugston: Then once you find that info, you would just jump back onto the MLS. That's where we gauge a lot more specific info like when the property was last sold with the tax on, things like that.

Deidre Woollard: Excellent. Are you finding that it's a more competitive market right now? I know the real estate agents that I talk to, they're doing anything they can to shake out inventory. Have you seen that happening in your market?

Lauren Clugston: So much so.

Kyle Clugston: We're on the west coast. I feel bad for people investing in beach towns.

Lauren Clugston: The west coast of New Jersey. [laughs]

Kyle Clugston: I'm sorry, yeah. Of New Jersey, yeah. For sure. The coastline, the beach towns, it's insane right now.

Deidre Woollard: Yeah, it's interesting. Beach towns everywhere are top priority, which is odd. The luxury market to all of the small towns, that's the zoom town effect has definitely been an issue. You talked a little bit about getting education from books. I know you were also part of an investor group, but it seems like there's a pretty tight crew of investors in your group, seems you guys have a lot of fun. Did you start off knowing that group before you got into investing, or did that come later in your career as investors?

Lauren Clugston: We started going to local meetups earlier in our career.

Kyle Clugston: We started on our first property.

Lauren Clugston: But it took us a little while to really be a part of the ecosystem and start actually networking and utilizing the group for the benefit of the group. Before getting into real estate, we assumed that like most things, people will be very secret of the information. When we went to our first meet-up, we realize people love to talk about what they're doing and they love to share knowledge, and we were happy to share knowledge too. We became really close with other investors in our area and our local meet-up group, and we're all about rising tides raises all ships. There is no way any one of us has enough money to buy the whole town that we all invest in, and so why not help each other out? Share trades, share contacts, share mortgage lenders.

Kyle Clugston: Share refinance reports.

Lauren Clugston: Yeah, definitely. It's a really supportive group. Some people say that one of the things they find so hard about getting into real estate investing is that you don't know anybody who's doing it. I could totally hear you on that because I related to going college. If you grow up in a neighborhood, or family, or in a society that going to college is not the norm, maybe you're first-generation, then you're probably less likely to go to college. But if you grow up in a family, or in a town, or in a neighborhood where everyone goes to college, then you're probably more likely to do it. If you can surround yourself with people who are doing the thing you want to do, you'll be more likely to do it. That was our mindset. We just needed to get around people because in the beginning, we had analysis paralysis so bad, it was a point where I was like, "We are lying to ourselves because we're telling everyone we're investors and we haven't bought a property yet. We need to take some action."

Kyle Clugston: One of the biggest hurdles to get over is finding a contracting team if you're not a [inaudible 00:21:22] . How do you go about finding those people? Well, that meet-up group is a great spot to meet them because whether they're investors, a lot of the members are contractors or they're real estate agents. What a better place to meet clients than an investor group? You're going to meet all these people throughout that group.

Deidre Woollard: I have to ask, how long did that analysis paralysis phase take for you guys?

Lauren Clugston: Long. I would say a solid year of us reading, studying, analyzing markets, and telling everyone that we're going to be doing this, but almost three years. Then really marinating in our mind and thinking that's something we wanted to do. It definitely took us a little while.

Deidre Woollard: How long did it take to find a property? Was that part of what took so long?

Lauren Clugston: I would say at the time, it wasn't necessarily trying to find a great deal because looking back, and I know everyone would say this. Looking back, I wish we bought every property that we looked at because they would all be amazing right now. It's really just not trusting yourself. Because, yes, like I said, we're going to meet actually around other people who are doing what we're doing, but I think we just felt super alone. There was no professional or mentor that we could go and ask and say is this the right move for us? It was just really scary and I think it was the fear that really kept us stronger.

Kyle Clugston: Yeah. There's no book out there, there's no format that is going to tell you whether this property that you're looking at that time is the right deal at this number. We look back at the properties that we toured prior to buying our first one, and if we looked at it from this vantage point now, it's like I wish I had that deal back and I would jump on that. Yeah, it is. It's having that confidence in knowing that all everything that you've done, you're making the right choice.

Deidre Woollard: Exactly. Awesome. Well, this is a great place to take a short break.

MALE_1: Like what you are hearing? Get more real estate investing news and advice for a Millionacres on Instagram at Millionacres, and on Twitter at Millionacres_co.

Deidre Woollard: During our break today, we're excited to have Millionacres' lead investment analyst Matt Argersinger here to speak briefly about one of our newest services, Real Estate Winners. Thank you for joining us, Matt.

Matt Argersinger: Thanks for having me.

Deidre Woollard: What is Real Estate Winners and who is it for?

Matt Argersinger: Well, I like to think of Real Estate Winners as our answer to Stock Advisor in the real estate market. It is a service that provides recommendations on publicly-traded REITs, real estate investment trusts, and real estate companies. It's a pretty big universe out there. There's over 200 REITs to choose from and probably dozens, if not hundreds, of real estate companies, are in our universe, and we provide regular investment recommendations, as well as commentary on the market, education material. It's really designed to get anyone who's interested in investing and learning about real estate started.

Deidre Woollard: Is it geared toward new investors, or is it more for seasoned pros?

Matt Argersinger: I think Real Estate Winners can serve both. I think if you're a new investor, maybe you're just getting started with stocks and you want to learn more about how to add real estate to your portfolio, great place to start. If you're a seasoned investor and just thinking, okay, how can I diversify my portfolio, maybe reduce the volatility of my portfolio, maybe add some income to my portfolio, then I think Real Estate Winners is great solution for that cohort as well.

Deidre Woollard: Fantastic. What are the benefits of being a member of Real Estate Winner?

Matt Argersinger: Number 1 benefit is day one when you join, you get our top 10 investment ideas at the moment. Really right from the beginning, you know what our 10 best ideas in the publicly traded real estate market are. Then going forward on a monthly basis, you'll get a new recommendation, sometimes more than one new recommendation, as well as regular content that we're coming out. We're covering our past recommendations, providing updates, and talking about the real estate market. It's really the full package.

Deidre Woollard: Perfect. What do you need to get started?

Matt Argersinger: Really all you need is a discount brokerage account. If you're used to buying stocks, you probably already have that. If you haven't bought stocks in the past, of course, just open a discount brokerage account. These days you don't even have to pay commissions. It's fantastic. [laughs] It really couldn't be easier to get started investing with Real Estate Winners.

Deidre Woollard: Sounds fantastic. How can people sign up?

Matt Argersinger: Sure. They can head over to real.fool.com. That's R-E-A-L.fool.com.

Deidre Woollard: Great. Thank you so much, Matt. [MUSIC]

Deidre Woollard: [MUSIC] I'm back with Lauren and Kyle Clugston of Rentals to Wealth. We're talking about getting started in real estate investing. I wanted to pivot a little bit because I noticed looking at your Instagram, GSI's Instagram stock due is that last year was this reset year for you. It seems you're taking your business down really to the next level. Wondering if you could tell us a little bit about what that journey has been like.

Lauren Clugston: I mentioned earlier that our goals and plans have changed significantly since we first started investing. Over the past year or so, we've really step back and thought, what do we want our lives to look like in the future? We reversed engineered that and tried to figure out, how do we get there. We realized that what we're doing, or what we were doing, will not get us to our 10-year goal. We have to change something. That big factor was that we need to start treating this more like a business, and not like a hobby or like a side hustle. We are still DIY some of our renovations right now, just because that makes sense for us in this moment. But the overall plan is to really start outsourcing, to start utilizing more subs, more contractors. We don't respond to maintenance calls anymore. I still do self-manage, just because we have it done in such an efficient manner, it doesn't make sense to hire it out. We really are just having that mindset, that we're business people, and entrepreneurs and not just real estate investors, and how can we make this business more scalable and more efficient, so that we could actually live the life that we're working towards.

Kyle Clugston: Since we did that private money deal, that was an eye-opener. We could really be pumping out properties double what we're doing now, a year utilizing private money, and if we had contractors just doing everything. For us, our time frame is usually around four months, where our contract could do that in 50 percent of the time.

Deidre Woollard: Well, let's talk about that, using private money because I think that's a big step for a lot of people. I noticed you bought with a home equity line of credit at one point as well. But how has that changed you using different forms of financing?

Lauren Clugston: Starting out, we 100 percent thought that all we had to use was our own cash and unconventional bank financing, and that's a slow growth, [laughs] unless you're pulling in big six figures, you are going to little your funds down pretty quickly. Our first investment property that we did house hack, we then this past year pulled a HELOC on. We had enough equity and then set of refinancing, we thought let's just do a HELOC. We actually closed the week that the pandemic started. At that time, it was an amazing safety net, I'm so fortunate that we had. But then we start realizing, "Okay, how can we put this equity to work?" We ended up buying our fifth property, cash, if you will, with our HELOC, we're able to put in cash offer, because we just pulled the funds down from a HELOC. We will be refinancing that soon, putting conventional mortgage on it, and then getting our HELOC back. That was just a great way to utilize equity that we already have, to grow our portfolio. Then to circle back to private money, doing private money is asking people to help you out like, "Hey, I have this deal, I don't have any money for it, would you be open to lending it for me?'' It's definitely that's what we felt like. Now, there are people who are asking us if we have more projects coming that they can help fund. Really, it's a mindset shift change, because now we're creating investment opportunities for people, and not necessarily begging for money.

Deidre Woollard: [laughs] I think thinking of it as begging for money is definitely the wrong mindset, and I could see why that would be a hurdle. How did you find private money for that?

Lauren Clugston: Originally, you just start with your friends and family, because private money is a relationship-based business if you will. It's not like hard money. You can't just like Google private money lender and find someone. You start with people who you know, like, and can trust, and people who know, like, and trust you. We just started with our families. Our first lenders were my parents and my brother. You already have that relationship, and so you just make sure you signed some legal documents, to make sure everything stays on the up and up throughout, but that's really where you start. Then as you go from there, you now have this resume, you now have experience of doing credit line with somebody. You can now open it up to larger people, you start looking at maybe colleagues, coworkers, friends, or even people that you meet at local meet-ups.

Kyle Clugston: That's why the documentation were so important because in all those years of us documenting everything that we did. We basically took all of that with a little bit of new stuff but created what we call invest with us package, that we give to potential private lenders. All that does is, that's going to give them an example deal based on the market that we're in and projects that we've done in the past, and say, "Hey, if this project comes up, would you be interested in investing with us?" A lot of times it's not a conversation between you and them, but it's a conversation between them and maybe their significant other so that when this property pops up, especially in this market right now, where properties are up in one day and going the next, that money needs to be available and those conversations need to have already occurred.

Deidre Woollard: That's a really good point. Want to talk a little bit also about automating and delegating. You guys talked about that as well. I feel like that's an important hurdle for investors if you want to grow your business. There's that tendency to want to keep it all. You do it yourself, but then you can't scale. How has that contributed to your ability to scale, and there are any programs that you've been using? Love to hear about those too.

Lauren Clugston: It's definitely crucial, especially because Kyle and I both still work full-time jobs, and so we need to make sure that investing is as efficient as possible, so we can still do both. I could talk to it from a property management point of view because that's mainly my lane. But basically, I utilize right now cozy.com, which is a property management software. It collects all of our rhymes. It does all of our applications, it help the showings and lifting the units, and everything is online, and honestly managing our properties on the minimum takes probably an hour a month, and at most, if we have a maintenance call, maybe four or five hours a month. That's really me just coordinating with a trades going to fix the issue. Then from bookkeeping point of view, we use Stessa, which is another online program. That's been amazing because I will be completely honest with you. On our first property, we went to Home Depot at least once a day if not five, [laughs] and I was thinking all of those are seats. I'm entering them into my Excel spreadsheet, what day did we buy it? What did we buy? What room? It was a total waste of time. Then I realized, I could just set up a checking RCM business credit card in a business checking account. Clock this up to Stessa, and all my transactions magically appear into this beautiful database that I just go into every Monday night, sign it to the different properties. When tax season comes, I can just export the tax report and it's amazing. That's been a huge time saver. Then we have also been using Airtable for project management. That's a little less automating, and more so just like streamlining management, and it keeps us from dropping the ball basically.

Kyle Clugston: Then for property walk-throughs, we created a property walk-through calculator on Airtable. Again, [laughs] reference back to documentation, just from documenting what all of our materials costs. Because when we do DIY, that's all we're really accounting for is cost of material. We can punch those numbers in, as we walk properties or potential properties that we're going to put offers on, and we'll know what those budgets are the second we leave the house.

Lauren Clugston: Exactly what you mentioned earlier about being kind to your future self. We're not doing deals every week or every month. There are some things that maybe we only do once a month, or once a quarter. It does take a little bit of time for your brain to remember, like what was that process again? Who do I have to email? I'm very big at creating SOPs. An example of that would be closing an off-market deal. As we closed our first off-market deal, every step of the way, I was sticking out. After the earnest deposit check get sent, I need to email this person, and here's their email address, and here's their phone number. The four things that they're going to need from me are the purchase price, the signed contract, and C&D. By writing things down like that, it just makes sure that, one, you're doing everything the same each time, so you're never forgetting. Then two, we're just taking less mental bandwidth, because we have so much going on. I can't remember how I did something last year, and so despite writing it down, you're really just helping your future self out.

Deidre Woollard: I love that. I feel Airtable is the new Excel. Everyone is moving over to Airtable now.

Lauren Clugston: We're big fans. I feel its Excel meets Asana, and it's the perfect combination.

Kyle Clugston: Yeah.

Deidre Woollard: Do you have your properties, you talked a little bit about taxes, are they all in different LLCs, or do you have it all together?

Lauren Clugston: We currently have them all in our personal names. We've been doing that strategically for the financing, basically. As we're growing, we are going to be switching them over to LLC for asset protection, but we're big fans of offensive protection and not defensive protection. LLC is great in terms of asset protection, for when you get sued. Well, we [laughs] want to take steps and put things in place to just never get sued to begin with. That's what we're really focusing on right now. Making sure we're doing everything to core, making sure we're using licensed contractors, making sure we're having lawyer draft the contracts with our tenants and with those contractors. We're really just trying to stay above board throughout. We never really have to get to that LLC protection for it, and then we do have an umbrella policy over the top. Sorry, we can't say that. Overall having [laughs] anopsy as we grow will be important, so we're moving towards that.

Kyle Clugston: Not to say every story is the same, but most of the time when you hear nightmare tenant stories, it probably all comes back to tenant screening. That tenant probably was not fully screened or screened properly. That was where the downfall was.

Deidre Woollard: Let's talk a little bit about that because I feel everyone that I talk to that's an investor has their own method and their own way of determining who that great tenant is. Is there anything that you guys have learned as you've gone through this process that helps you really determine what a great tenant is, beyond things like credit score, employment history?

Lauren Clugston: Two things. One, you can be emotional. [laughs]

Kyle Clugston: Exactly. [laughs]

Lauren Clugston: I believe everyone's story, I'm like, "But, Kyle, you don't understand." He's like, [inaudible 00:36:16] [laughs] Not being emotional is helpful, and then two, we count a lot on references. I understand that our credit score doesn't tell the whole story. I understand that things happen and that people make mistakes, so I'm very big at calling past landlords. Not only the most recent or current landlord, but also the ones in the past. You might get a more honest picture from them just because they're going to give you the real details. Yes, they kept it clean and they always paid on time. Or they were always late but they always paid the late fee and they left the unit beautiful when they left. I think having that personal experience is more valuable and holds more weight than someone's credit score.

Kyle Clugston: Excellent point there. Lauren said to call past landlords because if you call their current landlord, they could be such a terrible tenant that they just want them out of their property. They're like, "Oh, yeah. No, they're such a good tenant." [laughs] They move out and you take them. But then also a little bonus to call all those landlords is to talk to other people that have properties that they may be looking to get rid of. They may have large portfolios that they're looking to dump or retire, so you can create a narrative with them that could potentially lead to another deal.

Deidre Woollard: That is a great tip. That's really smart. I love that. I want to talk about your newest property. Was seeing some of your YouTubes about it and I thought it was a really good example of some of the things that maybe can go wrong a little bit or be a surprise. I notice that you guys really did your due diligence. You did a home inspection, great radon test, also pretty common. But you did a sewer line scope and I think a lot of people don't do that. Nobody likes to really talk about the sewer, but the sewer turns out to be pretty important if you're dealing with rental properties and investment properties.

Lauren Clugston: Definitely. There are two reasons why we hit this property hard with inspections. One is we're getting more experience and so we are learning from other investors' mishaps. I am part of a little group of a bunch of female investors and one of the girls, she always has sewer line issues. [laughs] That came from her. Then two, the seller of this property, he never lived in it, he was rather hands-off, and so he just didn't have a lot of information about the property. No negligence from him, he just didn't have a lot of information to share. We were like, "Okay, well, if he's not going to give us what we need to know, we need to find it out ourselves." Yes, we did a normal home inspection which comes with the radon and the termite, then we also did the sewer line scope, and we actually also did an oil tank sweep. The reason we did those two was because oil tanks are big in this area, and while we thought it was probably disconnected, we saw signs of one that was probably removed. You just never know if there's another one underground and that can be super expensive. Then with the sewer line, that's something that no one ever checks. But all you need one day is for your tenant to call and say that their sewage back up and other belongings that they're storing in the basement are ruined, and you need to completely replace the pipe and it's going to cost $15,000. This is something that can be prevented if you just spend like 250 bucks during the inspection.

Kyle Clugston: Yeah, that's like a $20,000 fix. Easy to go from the house to the street on a sewer line for them to dig, replace the whole thing. That could be a massive deal-breaker.

Deidre Woollard: Absolutely. I think sometimes what happens, and I think investors, as they go through, get better at this, but there's always that problem of emotion and maybe getting attached to the idea of this being your property. It seems like getting a lot of those tests can get you out of that mindset. Is that something that you found?

Lauren Clugston: I would agree with that. It definitely helps you think of things more at the data and more at the facts and not from an emotional point of view. Like I said in the beginning, I'm not risk-averse, I really like protecting ourselves, and if spending another $250 to get a sewer line scope is going to make me sleep better at night and make me feel more comfortable allowing people to call this place their home, I just think that's a good kind of return.

Kyle Clugston: I love it. We had the tank sweep and the guy came and walked us through the whole thing, what he's looking for, and then also what we can look for while doing property walk-throughs that may suggest that there is an underground tank, or if there was an above ground tank at one point that's been disconnected. He gave us a bunch of tips on what to look for when we're walking properties. We would've never gotten that unless we didn't have him come out.

Lauren Clugston: Exactly. Not to say that we wouldn't get another tank sweep in the future, but by paying this one upfront cost, we now gained a lot of information to help us be better investors when we're walking properties in the future.

Deidre Woollard: Are the properties that you're looking at generally older houses? You've mentioned the oil tanks, is that one of the things that is a concern for you is that because you're getting older houses?

Lauren Clugston: They're so old. I would say [laughs] our youngest house is 90 years old.

Kyle Clugston: Yeah. Are all early 1900s.

Lauren Clugston: Yeah.

Deidre Woollard: Every single one. That is a huge concern, are waste lines being galvanized and being in rough shape? For us to be buying this old house, it's even more important to do due diligence.

Lauren Clugston: Yeah. We're always looking for an open tube, outdated plumbing, definitely oil tanks, and what's another big one with the old houses? Oh, plaster and lath. Everything's plaster and lath. There's no rock on these walls. [laughs]

Deidre Woollard: Any issues with lead paint or anything like that?

Lauren Clugston: We haven't had any issues, fortunately.

Kyle Clugston: As best as tiling in basements. Luckily, we haven't had any that have been crumbling and they've all been in good shape, so we just do either a coated paint over top. We usually do new flooring anyway, so it just goes right over top of them.

Deidre Woollard: Interesting. Are you also looking at eco-friendly or green? Is that a concern for you at all as you look at renovating?

Lauren Clugston: It definitely is. Going back again, thinking about your future self, your HVAC system. If you have poor windows, poor installation and you put in a brand-new HVAC system, well, that thing's going to be working its butt off [laughs] in the depths of the seasons, really trying to heat or cool the home. We do try to take that into consideration. We're replacing windows, making them more efficient. Then definitely with smart thermostats or other smart features just to definitely make the home a little bit more green.

Deidre Woollard: Excellent. I love that. As we wrap up, obviously, you're a couple doing this together. I think that's one of the things that people always wonder, couples wonder, can we do this together when they're starting out? What have you learned? What have you learned about each other and what has that been like?

Kyle Clugston: I love that you just asked that, to be honest, because it's a huge hurdle, especially for people. Maybe they're a great couple but maybe don't work very well together. We always made the joke that we'd be terrible on Amazing Race. But [laughs] maybe we wouldn't be, because we do work really well together. One of the biggest things was we read Traction by Gino Wickman, and one of the things we took away from that book was to have weekly meetings. That was one of the biggest things. To have a business meeting, and then make sure that we're having husband and wife time too. Not have business meetings throughout the day. Have specified times to talk business.

Lauren Clugston: I would 100 percent agree with that because I'm the type of person where my brain is going all the time. That might be 11:00 PM at night right before we're falling asleep, I'm like, "Did you call the plumber?" [laughs] Or in the middle of the day, we're on the beach with our family and I'm like, "What did that quote come in on?" My brain's always moving. Kyle's not like that. He's very much in the moment all the time and it was creating a little bit of friction that I was thinking about business randomly all the time, and then I would almost get mad at him, "How do you not know the answer?" He's like, "We're on the beach, it's a Saturday. I don't know." Having meetings both gave us a space and time to talk, and then also let me know like just write it down, you could talk about it on Monday. [laughs]

Deidre Woollard: The benefit of air table and notes. Is it all computer notes for you guys, or do you take physical notes? What else works for you?

Kyle Clugston: It's funny. The computer has all the programs and stuff. I'm very much notebook and pen, and then our meetings are whiteboard meetings. Which is nice because we can then refer back to that thing on Tuesday when we've had the meeting last Monday. It's nice to have that physical thing that we can go back and refer to.

Lauren Clugston: Also working together, well, definitely it creates more opportunity for arguments. I would say, it also creates more opportunity to really strengthen your relationship. I feel like we are at a point in our relationship where if you are not working towards the same goal together, your relationship just physically can't get to this level because it's not given the opportunity. The fact that we both have the same goals and the same dreams and are both working towards that goal together has just brought us a lot closer in other areas.

Kyle Clugston: I'd agree 100 percent with that.

Deidre Woollard: Love that. Last question. You guys just started sharing your journey on YouTube. There's risk in that, but that's also a lot of fun. Why now?

Lauren Clugston: That's a good question. We've been sharing our journey since 2017 on Instagram and it's been so much fun. I think what we've realized is that people want to know every detail. [laughs] What better way to do that than to bring them along with us while we're doing everything. We bring you with us to the closing table, to Home Depot, while we're renovating, while we're having lunch, while we're fighting. There is a episode a little while back where we got into an argument and I cried. We just try to be really transparent because we like helping people and if showing you what we're doing helps other people take that one extra step, and then it's totally worth it for us.

Kyle Clugston: Then that's the one thing that we lacked getting into it, was what step-by-step, exactly what to do from beginning to end. For there to be a little camera on our shoulder as we go about searching for our next property, searching for our next house hack, and then everything from the beginning to the end, that is a massive new wealth of knowledge right there.

Lauren Clugston: I feel like we don't like saying here are the five things you should do. What we do like saying is, "This is what we're doing. If it's helpful to you, that's great. Come along with us."

Deidre Woollard: [laughs] I love that. Well, thank you so much both of you. Just a reminder to anybody who's listening, they are on Instagram at rentalstowealth, rentalstowealth.com is the website. Thank you so much and stay well and stay invested. [MUSIC]

MALE_1: Thank you for tuning into the Millionacres podcast. I hope you liked today's show. If you enjoyed this episode, please consider subscribing through your favorite podcast provider. If you have any questions, please feel free to drop us a line at help at millionacres.com. Stay well and stay invested. People on this program may have an interest in the deals, offerings, or services they discussed that Millionacres or The Motley Fool may have a formal recommendation for or against. Always consult a certified tax professional before acting on tax advice. Do not buy or sell assets based solely on what you hear. [MUSIC]

: [laughs] I love that. Well, thank you so much both of you. Just a reminder to anybody who's listening, they are on Instagram at rentalstowealth, rentalstowealth.com is the website. Thank you so much and stay well and stay invested. [MUSIC]

MALE_1: Thank you for tuning into the Millionacres podcast. I hope you liked today's show. If you enjoyed this episode, please consider subscribing through your favorite podcast provider. If you have any questions, please feel free to drop us a line at help at millionacres.com. Stay well and stay invested. People on this program may have an interest in the deals, offerings, or services they discussed that Millionacres or The Motley Fool may have a formal recommendation for or against. Always consult a certified tax professional before acting on tax advice. Do not buy or sell assets based solely on what you hear. [MUSIC]

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