57) Investing BROKE Style & Airbnb Interior Cameras

Real Estate Investing with House Money

House Money Weekly

In this week’s House Money Weekly segment, Lauren and Alan discuss blog 150 - The BROKE Method to Buy Real Estate with No Money. Alan figured out a way to buy more than $30 million in real estate without using his own money. It sounds easy, but it's actually a lot of work. He came up with the "BROKE Method" to explain how he does it. The "B" stands for Big Deal Finder. This means there's a lot of money involved or you can make a big profit, but you have to bring something valuable to the deal. Once you find a good deal, it's easier to get money and find partners. Being good at finding these big deals is the first important step. The "R" stands for Reputational Pull. Having a good reputation not only attracts people who want to invest with you but also attracts opportunities that aren't available to everyone. Alan's reputation comes from owning small multi-families in Atlanta. He lets people know that if they ever want to sell, they can come to him. Whatever you're good at, make sure people know about it. The "O" stands for Ongoing Outreach. You can't just tell people once what you're looking for. You must keep updating them and keep talking to new people. The "K" stands for Knuckle Up Ability. Since Alan isn't using his own money, he must work hard instead. He might have to manage workers or do tough jobs himself. The "E" stands for Execution Option. Not every plan will work perfectly, so you need to have backup plans. Alan likes for each deal to have 3 ways it can make money. Being flexible and having different options is key.

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Mortgage Minute: Jasmine answers the question: How often does the lending quote change by the time you get under contract?

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Real Estate Is Easy Segment

Lauren interviewed Kelly Koontz, CEO of Submeter Solutions in Seattle. His company specializes in submetering and utility recovery for multifamily properties. Kelly believes too many landlords are paying their tenants’ utilities. He explained that in many multifamily properties, utilities are lumped into the building's expenses, leaving landlords to figure out how to bill tenants for their share. Kelly highlighted the benefits of using submeters in buildings. Submeters are accurate and affordable water meters installed in each unit, allowing tenants to pay only for the utilities they use. For example, installing submeters in a five-unit building costs less than $3,000 total, with landlords recouping their investment in under a year. He also explained the difference between submetering (installing meters for individual units) and utility recovery (billing tenants for their utilities, RUBS – ratio utility billing method). Lastly, Kelly shares that makes real estate easy by relieving landlords of the burden of estimating utility costs. Instead, his company ensures that these costs are accurately passed on to residents. Additionally, they offer a utility billing service to landlords, handling the setup and sending detailed bills to residents every month. They even collect payments and reimburse the landlord accordingly.

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Third Segment

Lauren talks about surveillance cameras. Lauren and Alan have different views on surveillance cameras. Alan uses them for some of his homes and Airbnbs, with just a Ring camera outside. Meanwhile, Lauren has cameras around all her properties, but they're only outside. Before April 30th, 2024, Airbnb allowed inside cameras if disclosed and not where there would be an expectation of privacy. Alan would be uncomfortable and wouldn't book a place if he knew there was an interior camera, even if it was disclosed. Lauren is unsure about having inside cameras. As a woman renting a room, she might want hallway or kitchen cameras for safety if there's a male neighbor next door. She's also concerned about not being able to protect herself if she were to home share. Cameras can't even go in locked spaces like the owner’s closets for theft prevention. Lauren experiences having inquiries about properties but not pushing through the booking because they are not comfortable with exterior cameras that are just there for safety purposes. Alan also noticed that most security cameras are now worthless because burglars have figured out how to jam Wi-Fi signals so if your camera is not hardwired then they know how to cut the power and make them temporarily useless.

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