Aaron Norris:
… and those absentee landlords, are they in state or they’re out of state? That is a really fun criteria of finding those landlords where you can become their friends because you give them intel because they’re not in town but if they have a terrible property manager and you are able to say, “Hey, I was driving by your complex. I’m a local apartment owner and you know what the city is getting really heinous about fines for this specific thing and I just wanted to point it out. I’d hate to see you getting fined for that. If I can ever be a resource for you, let me know.
Speaker 2:
This is Start FM. Now, here’s your host, active real estate investor and entrepreneur Chad Duval.
Chad Duval:
Hey guys, I asked this question on almost every episode. How do you get started in real estate? I ask it to almost every guest and the most common answer is to try and get a house hack. If you’re a fan of the show you know that I like to refer to house hacking as real estate with training wheels. It’s a great way to get into real estate with a low down payment and basically live for free. Everything sounds awesome but a lot of you guys are busy, especially now with everything going on in the world. Everybody knows and spent hours and hours searching for info in multiple places and listen to podcasts and most people just don’t have that time. Most people trying to juggle the kids right now, especially transitioning, working from home because of COVID and just trying to keep track of everything, eating, exercise. I know, it’s a struggle. I struggle with them too almost every day. That’s why I reached out to my friends over at House Hacking Success, June and Brad, they’re awesome guys over there and they become the go-to resource online for everything house hacking.
Chad Duval:
So yeah, I reached out to them this week to try and get you guys a discount on any of their courses that they have over there. So they were kind enough to give you guys 10% off anything on their website. They do have a lot of free resources. They have a free ebook and a podcast but they also have a course that puts everything you need to know about how it’s hacking into a 42 episode course, all video content, which is really awesome because if you decide to have something on in the background while you’re doing your 9:00 to 5:00 at home and you just pop in one video or a couple of videos on your TV in the background.
Chad Duval:
I know I do that every day with a bunch of other resources that I use to continually sharpen my knowledge in the real estate game. So yeah, head over to househackingsuccess.com. Use the discount code Start FM and you’ll definitely get 10% off anything on the site if you decide to buy. Again, there are plenty of free resources on there. Their podcast is awesome. I was just recently on it. I hope this helps you guys. Use discount code, Start FM, get 10% off now and enjoy the show.
Chad Duval:
All right. Aaron Norris. How are you doing today, man?
Aaron Norris:
I’m doing fantastic. Thanks for having me Chad.
Chad Duval:
Yeah, no problem. Yes. So what we’d like to do real quick is kind of give a little background of who you are and then we can dive into some more of this data that we talked off air about finding your first real estate deal.
Aaron Norris:
Sure. I’ve been in real estate since five. I started rehabbing houses with my dad who went full-time real estate investors in 1980, refinanced our primary home at 17.5%. So for you newbies, who are complaining when interest rates go up like 0.01%, no, this is a lifetime low. So yeah, I decided at some point along the line that I didn’t think flipping was for me. So I was a professional artist based out of New York city and I was a gymnast. So sprained my ankle a lot. So instead of waiting tables actually fell into a Wall Street gig doing acquisition and merger presentations and found out I love data.
Aaron Norris:
So long story short, I ended up back in the family business in California in about ’05, doing research reports, market timing. That’s where I stumbled upon [inaudible 00:04:22], in all my research and data development and I’ve always wanted to be in tech. So I’m a real estate investor. I’ve been in hard money and the investing space for around 15 years and now part of my gig is just helping real estate investors nationwide find opportunity in data.
Chad Duval:
Oh, perfect. Yeah, no, I love that story. It’s just the older you get, it’s cool to look back on all of your twists and turns and what things bring you to your current situation and being that you found that you love data. Why don’t you talk a little bit about what you’re currently doing over at PropertyRadar?
Aaron Norris:
Yeah. I have access to billions of public records. So part of my gig is working with media, doing everything from polling trends in prop tech and ibuyers and what they’re buying, where and why. I pull the foreclosure data. And then I write and speak nationally sort of where technology trends in real estate collide and when I talk to real estate investment groups, it’s really about, Hey, you may not, not even understand and know that some of this data is available. So instead of creating these general farm lists, let’s get a lot more savvy with what’s available with combining property people, data to discover and back into like a really cool niche that only you own. I’m a huge advocate for main street. I’m here for main street. So Wall Street has definitely gotten in our space. It’s definitely not the same business that I grew up in but the tools are there. We just need to learn how to use them better
Chad Duval:
Right now. So when you’re saying data, what is the most undiscovered data point that you’re tracking right now that most people don’t even know that they need?
Aaron Norris:
Right. Half the audience is already falling asleep. They’re like, Oh my God, data. Yes.
Chad Duval:
I’m a data nerd too. So I don’t mind diving into this because yeah, half the audience is more artsy or in a different way, framed mind but for me and you, data is key and if you can get to know a little bit about it, it can make things a little bit easier in future for sure.
Aaron Norris:
I’m going to give you a quick example and then I want to back up and cover something that’s probably even more important before we start beating the data to death. So let’s say I’m a brand new person and I don’t have a lot of cash, I want to get in the game, I’m just not exactly sure how and I am aware that there’s all this competition in the market space. So what I would probably start doing is driving for dollars, taking 15 extra minutes out of your day to drive specific neighborhoods. I would start with understanding who the flippers and the ibuyers are in my market, finding out what they’re buying and why.
Aaron Norris:
Is it because it’s under FHA limits, it’s that first time. So where there’s multiple exit strategies, is it a three bedroom, two bathroom or is it downtown in a condo, what’s moving and why, what level of rehab are they doing? And I’m just going to follow their work. And then in that 15 extra minutes, I’m going to drive around and look for opportunities. Is it absentee or is it owner occupied? Am I looking for boarded up homes or a roof that needs a ton of work, a dead lawn, I’m going to start creating these custom lists that nobody else has and I’m going to try to start finding out what’s going on with the property and if I can get in the way of a deal.
Chad Duval:
And then what do you do with that once you have it? I’m assuming PropertyRadar might come into play with some of this.
Aaron Norris:
Well, PropertyRadar is going to help you do some of the research but so that’s just an idea of sort of where to start. The data is there to help you do the market research, to find out what flippers are buying. There’s a lot of really cool tools actually to look at the demographic side and the property side. So market research, and then discovering a niche. Maybe you just really know a neighborhood really, really well and you’re really comfortable with it. I want to cover really quick. We have a conversation of chocolate and peanut butter. Chocolate is what you bring to the business. Part of the reason why I’m glad you asked me about my story is I used to be a professional union artist based out of New York city and here I am a real estate investor with a pile of rentals. I’m working in technology. I have a really unique path.
Aaron Norris:
You can bring whatever you are great at, passionate about to this business. There’s room for you. The biggest mistake I see people make is they don’t bring that and don’t understand that and they get distracted and they think that they have to be something that they’re not. So if you’re an introvert with no money, no time and no experience and I just start throwing door knocking strategies at you, you’re going to check out. You might’ve already turned off the show. I promise you there’s strategies for you. It’s just, you need to really understand that when you come to the table and you ask me for data, let me provide you the data clues to get you really excited about getting up in the morning. [crosstalk 00:09:21].
Chad Duval:
Yeah, no, it definitely isn’t. I feel pressured to like that through my career too. The shiny object syndrome and you’re always feel like if you’re not changing things up a bit, you feel like maybe you’re not growing or you’re growing fast enough and just even recently this week my broker, my real estate broker came up to me and said, “Hey, I got this duplex and it’s got a double lot. So we could probably knock it down and make it eight units and all this stuff because I know that you like apartment buildings.” And I thought about it for a few minutes was like, Oh, that’d be a good idea. Maybe we could get in cheap. I got some … my builders could probably do this and we would probably make sense financially to do it.
Chad Duval:
However, I don’t really have a passion for building. [crosstalk 00:10:02].
Aaron Norris:
[crosstalk 00:10:02], what you’re doing.
Chad Duval:
Yeah. So it’s very easy to feel like, Oh, this opportunity came to me, it’s off market. It looks like an awesome idea but I don’t really like doing that type of stuff. But again, it’s kind of a catch 22 because if you’re new to the game, you might not know what type of real estate you like but I like what you said. If you know you’re an introvert, you’re probably not going to like door knocking. You might like writing yellow letters in the mailing them to the same owners.
Aaron Norris:
And I’m so glad you brought up that example. I mean, for an introvert who’s very data-driven, putting those kinds of deals together that you just mentioned tearing down a duplex and upzoning opportunity opportunity zones. You might be able to plug in to city council and the planning commission and get super nerdy at the hyper-local level to where you’re piecing together deals that nobody even knows because it’s not on the radar. You get there absolutely first. So that’s exactly what I want to touch first because you and I will get into maybe a lot of different strategies and I’ll tell you the data that exists. So a lot of people don’t know that, great. You go to your title rep and you’re like, Hey, I want an absentee owner lists. Okay, that’s going to be big. You’re going to spend a couple thousand dollars on a city data and you haven’t even refined it. So what? You’re going to market to them one time, blow your entire marketing watt and you’re done?
Chad Duval:
Yeah, exactly.
Aaron Norris:
Biggest mistake. If you took a marketing class 20 years ago, you would have learned about the rule of seven. It’s going to take seven times for you to touch somebody that doesn’t know you before. Maybe they’re going to do business with you. In today’s marketing market, there’s so much noise. I’m That triple screener, watching Game of Thrones on TV, texting on my phone and playing an embarrassing game on my iPad. You never have my undivided attention. So as marketers, that’s what we’re up against. So it might not be seven. So if we don’t really refine a niche and do right bound marketing and by that, I mean, right message, right channel, right audience at the right time, you’re probably going to end up wasting a lot of money.
Aaron Norris:
So on the property side, the kind of data that’s available is you can definitely do it based on zoning, on the kind of property, condo, multifamily, single family. You can do it on the size and square footage of the property itself or you can do it on the size of the lot. You can do it by number of bedrooms and bathrooms. So there’s a lot of different property data available that you can back into that way.
Aaron Norris:
On the people’s side, one of my favorite things is just age. People as they age, tend to become net sellers of real estate, whether they’re owner occupied or non-owner occupied or landlords. So even just backing your list down a little bit to age is really interesting. And there’s some demographic data I haven’t played enough with as a marketer to just be like, Hey, yeah, this is totally works for me. But in marketing, if you get into more specific niches, you can change the message to address pain points of the audience you’re trying to market to but part of that message can also be visuals. One of the things that makes me laugh, one of the data points we have in PropertyRadar on the demographic side is interests. So people who give to animal causes and like, think of all the puppy and cat postcard [inaudible 00:13:12], refrigerator.
Aaron Norris:
How do I make that message sticky, whether it’s visuals or what I’m saying anyway. So demographic data on age, birthdays. So if you’re thinking I want to send something that looks like a birthday card. Why not send a fricking birthday card? Because you know January is their birth month. So a lot of interesting things there and then mortgage data. You can do estimated equity, you could find out when they not only purchase but when they took out loans. So if they bought between 2009 and 2013 is the likelihood that somebody who bought then is sitting on a ton of equity. Oh yeah. And correct me, if I’m wrong, you are interested in subject two deals. Right?
Chad Duval:
Always. Yes. Yeap.
Aaron Norris:
Right. So having that kind of information, that’s the wheelhouse you want to play. So anyway, just the taste. We have over 200 fields. So as you throw things at me, I might be able to layer on ways to make your marketing lists smaller. So you can spend more time talking to the right people and you stop wasting money on marketing because nobody likes to do that.
Chad Duval:
Yeah, exactly. Instead of wasting the money sending it to a giant list, I’d rather spend the money on something that’s more refined like you’re saying and then use the same amount of money in very specialized for sure but.
Aaron Norris:
People don’t know that we also have the phone numbers and the emails for people. So again, if you’re an introvert listening to this and we’ve started throwing strategies at you, it doesn’t mean you can’t outsource it to a virtual assistant or the thing that you really hate doing and you can’t find somebody that is going to do that piece of the marketing.
Chad Duval:
That’s a good idea.
Aaron Norris:
I have people who use our tool who do nothing but call because they’re really good at giving good phone as my friend, Tony Alvarez says. Some people don’t do direct mail. So if you think you have to start a YouTube channel on a podcast and get in the SEO game, it’s not true. So anyway, the chocolate. Who you bring to the table is great. Just own that and really understand what you bring and then let’s beat it up with data. I bet it’s there.
Chad Duval:
Yeah. Absolutely. So with all the data that you guys are collecting, are there any crazy trends right now that you guys are seeing?
Aaron Norris:
Well, one of the questions I get a lot is I’m gearing up foreclosures. I think people will probably be disappointed. It’ll make the media in your local papers just like, Oh, there’s a huge increase in foreclosures. Yeah. Those should have happened last March. So the first one through are going to be the ones that have been postponed because of all the moratoriums. Now, there’s a lot of things that can happen this year. I wish I could say there’s absolutely not going to be foreclosures. The interesting thing is though, if you bought at the beginning of 2020, are you sitting on equity?
Chad Duval:
No.
Aaron Norris:
Well, actually yes. And many of the most popular MSA’s you are. Prices has increased so you’re not talking about a short sale, you’re just talking about a sale. People have very little equity, you might be able to get in a subject to transactions where somebody works at, yeah. You know what? We changed our mind. You can’t do remote work. We’re going to need you to come back to the city and they bought this house with a 2.5% mortgage and they’re stuck. They don’t have enough equity to sell and not take a loss. Can you take over that loan and make it make sense? Possibly. So yeah. The foreclosure question, is it going to be huge in 2021? Probably not.
Chad Duval:
[crosstalk 00:16:30]. I tend to agree with you just based on between the government support through everything. I don’t see, at least I haven’t been hearing of anything that’s actually … I haven’t heard that the, the shoe’s dropped yet. So I mean, it doesn’t surprise me at all.
Aaron Norris:
Yeah. And politics aside, well, no politics included. No party right now during a global pandemic is really all that interested in a huge wave of evictions and foreclosures. So I just don’t think it’s a good look, no matter what party you’re on and the fed and both sides of Congress has sort of clued in more aid is coming so I would expect more of the same.
Chad Duval:
Yeah, absolutely. So when you’re looking at this data and you’re looking at the trends, I’m going to be a little selfish here. So I’m in multi-family, I’m looking for small multis right now, also looking for bigger ones in the future. Would this apply to multifamily and commercial type of stuff like the data that you guys use or?
Aaron Norris:
Yep. We have multifamily and a lot of advanced. So we even have mobile home data. So when it comes to multi, tell me a little bit about your wheelhouse. What do you like?
Chad Duval:
So I’m learning that the smaller multis are a lot of work for little return. So the biggest building that I’ve ever had it was 15 units. That was still not big enough. So I’m looking for right now, anything that’s 50 units or above.
Aaron Norris:
You crack me up right now, by the way, you’re like, yeah, just small, just real small stuff. I thought you were going to say like two to four. [inaudible 00:18:08].
Chad Duval:
Yeah. They started there and then just slowly moved up to the 9 and then 15 and all that and I thought that, that it would get a little bit better but I feel like I need to go even bigger, even at 50, I’ve heard that that might not be a big enough either but that’s the next step I think for us. So yeah. 50 plus, I’m looking for something that isn’t built in 1900. I’m also Looking for stuff that’s like, when was the lead passing, the ’76 or something like that, maybe the year after that and newer that sort of thing. What else? Usually like C+ class is where I like to shop only because the jobs of the tenants at that class usually are pretty resilient, usually pretty blue color. And I also find that there’s a greater chance for forced equity in those buildings, from what I see. So if I’m looking for something like that, what type of criteria do you think I should be looking at?
Aaron Norris:
Perfect. Well, first geography. You back into a city and if you really know a specific area that you really love just because you know it really well and you think it’s got a lot of upside, maybe you know some economic development stuff is going to go in and it’s really walkable. I don’t know, quality of life, kind of things that you may know as a hyper-local professional, I’d start there on the geography side. And then I would start focusing on the property data. I would want to pull, I want units that you can do it based on a general category, like five plus or you can do it based on the number of units in a property. That’s a thing that you can do and then you can say, when was the structure built? So if you wanted to do that 1978 lead, you can say structures that are this many years new or older.
Aaron Norris:
So yeah. You can start there and then see who owns it. See if there’s like a huge player in town and then just start backing into the researches. Okay. How long have they owned? What’s cool is when you create a list in PropertyRadar, it aggregates and starts creating all these beautiful charts based on the demographics and the property information. So you could start seeing on the demographic side, who owns it, is it corporate ownership, multi-member or is it individual? How long have they owned it? How much turnover in that market? What if you enter a market and you do this research and find out nobody sells these things, they hold them for 20 years and everybody bought in 2009? Man, I might be in trouble. Yeah. There’s nothing worse than going into a market thinking you’re going to get deals and you realize there are no deals.
Aaron Norris:
And then on the property side, you can get a real sense of sort of things like square footage, a little bit more detail on the spectrum of the age of the properties, estimated value, things like that. From there, some of the opportunities are going to be, you don’t want to be talking to people who bought like a year ago. You want to talk to people who maybe have taken all the tax benefits. Maybe you can find somebody who’ve owned for 28 and a half years or what is it? 27 and a half years. That’s when they probably [crosstalk 00:21:15], appreciation?
Chad Duval:
Yep.
Aaron Norris:
And those absentee landlords, are they in state or they’re out of state, that is a really fun criteria. Finding those landlords where you can become their friends because you give them intel because they’re not in town but if they have a terrible property manager and you are able to say, “Hey, I was driving by your complex, I’m a local apartment owner and you know what the city is getting really heinous about fines for this specific thing and I just wanted to point it out. I’d hate to see you getting fined for that. If I can ever be a resource for you let me know.”
Chad Duval:
Oh, I love that. Yeah.
Aaron Norris:
So how do you … Wall Street, isn’t doing that. These big conglomerates that are taking down on big apartment buildings, big ticks, they’re not going to make that extra effort where you could have a list of 50 in your market that you build a relationship with to where when they do decide to sell, you’re their number one choice because you’ve established that relationship, that’s does not scale and that’s not easy to do.
Chad Duval:
Yeah, no, it’s not. And the strategy I use those strategies as well and I think I’m a good addition to it is to make sure that you’re following up every six months. That’s what I do. I have in my calendar. Every time I reach out to somebody, I send it either email or yellow letter and then I then move that event or reminder to six months from then and follow up and it’s been pretty successful lately.
Chad Duval:
However, when you get into these apartment buildings, I’m finding that, especially with the yellow letters, if you’re mailing directly to the apartment buildings, a lot of the time it goes to the property manager and the property manager is in the best interest for them to not show that to the owners because they don’t want to lose their job. So then you have to try and find out where the owners are and a lot of times their LLCs to weird addresses and stuff like that. So I’ve had a lot of struggle reaching the owners of these larger buildings but this definitely works really well for yeah, the four and under for sure because it’s a lot of [crosstalk 00:23:20].
Aaron Norris:
It’s so funny, we’ll talk about it but I’ll send you a video. It’s so funny you bring this up. I actually made a video because this is one of our most frequently asked questions. There are services out there that are going to charge you two to $300 a month for you to find out who owns that LLC but there are often free ways to do it. So I’ll send you that because I also have a list of all the Secretary of State websites. So if you take that entity name, like if it’s an LLC and you go to the State Secretary of State website, chances are that that has been filed and if they’ve got a statement of information on file, you can find out who the owner is. If you can find out who the owner is, you can end up going back into PropertyRadar and doing a search just for that name.
Aaron Norris:
Especially when you’ve got a mailing address, you can say, “Hey, I’m looking for this name, finding out who owns it.” And you can start targeting at their home address and to your point, get rid of the gatekeepers. You’re talking directly to the person who owns it. You may find out that they own multiple entities. So another trick I like to use is going to sites like corporation, wiki.com, where you put in the entity and what it’s going to tell you is not only who the owner is. Typically, I have a really good success rate with them. I don’t know where they get their data but it’s good.
Chad Duval:
Which one is this entity?
Aaron Norris:
Corporation Wiki. So corporationwiki.com. I go there, I paste in the name of the entity and what it’ll tell you is who’s the ownership of the entity and if you click the name of the owner, you can find out how many other entities they have. So if they’ve got a ton of different LLCs and a bunch of different States, you know real estate investors, we just can’t get enough of estate planning. That’s again, a really cool way to be like, Okay, I’m dealing with a whale. Maybe a yellow letter is not appropriate.
Chad Duval:
Right. Or-
Aaron Norris:
Maybe [inaudible 00:25:05], letter is.
Chad Duval:
Yeah. And those ones are good too because even if you somehow … A corporate letter and stuff like that, even if the property that you’re interested in, they’re not interested in selling maybe they have other ones in one of those other LLCs could potentially be one of their worst performing properties and they might be like, Oh, we’re not selling this one but we’ll show you this one that’s over here.
Aaron Norris:
And again, I’m trying to think of creative ways to just show some cool value. If you’re really plugged in, I’m very plugged into my local city. I know my entirety of downtown as an opportunity zone. I met with economic development department. I’m on the housing commission. I know and I’m fascinated with urban development so I’m always in the know of what’s going on. If I’m working with an out-of-state landlord, I’ll give you a real example. I’m on the board of 211 which is Health and Human Services Hotline nationwide. It’s like the 411 for help. A lot of landlords do not know that your local 211 may have gotten some of that cares act specifically set aside to help renters. So I have landlords locally who are getting thousands of dollars as grants to fill in the gaps for tenants who have not been able to pay rent.
Aaron Norris:
What if I reach out to that landlord and say, “Listen, I know you’re out of the area and I really want to help locals and tenants. Are you familiar with 211 hotline? Number one, have your tenants call. They will get utility aid, food stamps, health insurance, anything that they might be needing right now you need to know about but number two, here’s this grant program for landlords that you might not be aware of. Some of these local landlords have gotten more than five figures in grants to help plug tenants gaps and it’s a use it or lose it. So hopefully this helped here’s the number.”
Chad Duval:
Wow. That’s crazy. Well, then that also kind of ties into our conversation before about the looking for foreclosures to happen. I mean, this might be one of the reasons why we might not see a lot of foreclosures if we are getting all the support that’s a lot of money being thrown at tenants and landlords.
Aaron Norris:
Yeah, exactly. I mean, I’m just like, I think you’re just going to come in and be like, You know what, March to March, it’s just a reset. Everybody, we’re just going to give you a freebie. Landlords, we’re going to plug you in, [inaudible 00:27:17], the money. Lenders, let’s just hack an extra year on the back end of the loan. I don’t know. But yeah, there is eight out there and you know what? People are having a different experience. What’s really interesting to watch is like … on California, the conversation in downtown Los Angeles and the unemployment numbers versus Riverside, just 45 minutes away without traffic. You’ve got a lot of people moving out of LA and going inland. Or if you’ve got landlords in very low economic, socially economic areas, they’re going to have a different experience than properties that you like to focus on where you don’t have to worry about lead and you’re looking at six plus to where maybe you’re not completely in the service industry. So it’s good you even know that.
Chad Duval:
Yeah, totally. Well, perfect. Well, let’s pivot a little bit into more about Aaron. I wanted to dig in a little bit about your experiences detail-wise with your real estate portfolio, you want to dig in a little bit to share how you got into it for your first property.
Aaron Norris:
Oh, sure. After being a professional artist for a number of years, when I retire as a union actor, I will be getting $165 in a defined benefit program every month.
Chad Duval:
That’s hard to live [inaudible 00:28:36].
Aaron Norris:
Yeah. It’s going to pay for coffee habit. Working for the Norris Group and doing the research, we ended up telling people, investors in California to get out in 2006. We said we’re selling everything and we planned to buy it back for half off a few years later and people thought we were nuts but it was a 400 page book with 800 charts. And at that time I didn’t even own a house. So I didn’t start buying until 2010 where I bought my primary residence and then I stumbled upon a book by John Schaub. Oh gosh. Now I’m forgetting the title but it’s like One House at a Time.
Chad Duval:
Oh yeah.
Aaron Norris:
And it was at that moment in time, I realized I didn’t have to follow the family footsteps of being a full-time flipper and I was really excited to really land on who I was as an investor. I really like being a landlord and I liked buying rentals. So I started picking off starting in 2010 condos and single family homes in California and got my pile. I did that 10 started working on paying them down but then some of my properties just tripled and quadrupled in price and the problem is I wasn’t in C+ I was probably in C- or D+.
Aaron Norris:
So I’ve also learned that I also don’t like really old stuff. I had gotten into stuff where I inherited tenants was sitting on $50,000 of deferred maintenance. So some of the things I’ve been doing in the last several years have been 10, 31 exchanging into other States where I could sell one asset in California that needed way too much more or I didn’t believe in the asset longterm. And I turned like one of my rentals into three brand new houses in Florida to rent. So brand new, built to rent kind of thing. So that’s what I’ve been focusing on, repositioning my assets into boring new and I’m after a very different tenant. So I’m in B neighborhoods looking at renting to nurses and doctors.
Chad Duval:
There you go.
Aaron Norris:
That gets me excited. So I have not ventured into commercial as of yet. I’m still all in single family. I do private notes in my [inaudible 00:30:40], and that’s what I’m doing.
Chad Duval:
Oh, nice. So you’re in Florida. Are you seeing any other good opportunities in other cities and different States right now? Because you have, I mean in New York, all the coasts just seem to be crazy. I mean, Florida excluded but everybody’s moving out because it’s way too expensive.
Aaron Norris:
Yeah. Well, there’s a few things going on. Interest rates are so low right now. It’s making that monthly payment … people aren’t thinking about what they’re paying. They’re just like, I can afford it.
Chad Duval:
Right?
Aaron Norris:
Yeah. You’re going to have very different markets. Coastal stuff has definitely been really hot. California has been really hot but we keep going up. I mean, what’s the median price in San Francisco right now. Like 1.6 at this point. I’m not sure.
Chad Duval:
So crazy.
Aaron Norris:
For me in rentals. I like where I’m at and it’s mostly because it’s where I’m comfortable because our family has been there for a really long time. There’s opportunity in any market. It’s really a conversation about who moved your cheese. There’s always sellers, there’s always buyers, there’s always the death, disease and divorce, it’s just plugging into what’s going to be popular. Is it going to be creating value? Because it’s hard to find. Adding the square footage, turning a two-one into a three-two. Is it a up zoning, turning a single family home that’s on a [inaudible 00:32:00], three lot into an actual three unit with three accessory dwelling units in the back here in California.
Aaron Norris:
So the more you’re a hyper-local expert, you might be surprised why these big Wall Street companies are fighting in these categories, driving up your costs in some areas in marketing and making your margins a little scary. You could be operating in a complete different space that they don’t want to touch. So wherever you’re at, I just want to say there’s opportunity. Don’t don’t hear me talking about Florida. I’m mostly there because I actually have family. So if there’s a big hurricane or something going on, I know somebody that’s blood related that they care about me and we’ll make sure that I’m okay.
Chad Duval:
Right. I mean, that’s a huge tip right there. It’s looking for markets. Before you even take out the map, just look at where you might have family or where you might have friends too to that are willing to keep an eye on things if things go South or you need some help with things. Yeah. Because I mean, that’s kind of like where … I mean, when I was buying my stuff up in New Hampshire, I only picked New Hampshire because I’m an expert of the area because I grew up there. Hyper-local, have family there, I know people who can check on things if I need to or I have a network of people and contractors because my dad’s a contractor up there. So that kind of led me in that area. If I didn’t have that, I don’t think I’d ever invested in that area in New Hampshire but and everybody’s got their own niche that they can take advantage of for sure.
Aaron Norris:
In some markets too. I think, especially when you’re new, you’re just so desperate to get a deal. You’re just almost willing to buy anything off the shelf and I just would prefer that newbies take a step back, just do a lot of market research and really take the emotion out of it and make sure you’re getting into something that’s sustainable. What if prices go down 30% in the next two years? I want to ask you the question. Do you care?
Aaron Norris:
You needed real estate. No. I’m here for the longterm. I’m holding this because I believe it as a rental, if it’s vacant for three months or something bad happens in my life, I’ll be okay. I’m built conservatively. I don’t want to see people put everything on the line, take your chances but definitely leave yourself a line of safety to where you don’t destroy what you’ve built and another thing that I don’t think a lot of people talk about, talk to your family, if you’re married and you’re doing all this risky stuff on the back and you haven’t gotten their permission, just be careful.
Chad Duval:
Yeah, totally, absolutely. So I know we’re coming a little bit to the end here but I wanted to also ask you, I’ve been trying to ask a lot of guests lately. If you’ve had any … because we’re giving all these great tips and thanks for coming on the show and helping the audience with getting started but as you’ve been in it long enough and you have family in it and seen a lot. There is a dark side of real estate and things don’t always go your way. So have you had any horror stories within your portfolio that you could talk about or within your network or what you’ve seen in your experiences in real estate?
Aaron Norris:
You trying to get me to cry on air? [inaudible 00:35:12]. Yeah. I actually had one of my hardest years last year working with a builder, we thought we did everything right, had funds control on construction, come to find out though that the builder was not paying attention and built homes on the backs of subcontractors that were never paid. So by the time Coronavirus came to be, I had been flying all Summer. Standing in the way of 66 projects, 38 contractors who didn’t know me from Adam and 22 investors and we had to tell everybody, we either get through this together or the only person who ever makes money is going to be the attorneys.
Aaron Norris:
And we got through it and by transparency communication, we did a full audit to find out how much everybody was upside down. It’s the craziest thing I’ve ever dealt with in my life. So scary and emotional, stressful. I did not know I had that in me. I was communicating with a hundred people every day, working with subcontractors who didn’t know me from Adam, who at the end of the day have my back. It is crazy. Your reputation [crosstalk 00:36:34].
Chad Duval:
Yeah. With all you guys upside down, how were you guys able to pull through all of that? Were you able to get use grants and private money?
Aaron Norris:
Subcontractors because of how we handled it, were willing to take a discount. We raised more money from the investors and wrote a very painful check to make it right. And your reputation sticks with you in this business. We knew that it wasn’t just a matter of solving the problem. We were still in the process of doing a lot of construction with these subs. You don’t want to agree subs coming to your jobs. You want them to work on warranty issues. And just the fact that I’m out there to stay. I didn’t want to have a reputation that I wasn’t there for small business. That’s been my entire life. So yeah, one of the most difficult, challenging moments of my entire life happened last year and I got through it.
Chad Duval:
But made you stronger.
Aaron Norris:
Yeah. Sometimes you find out who you are when it hits the fan and you have to really shift your attitude instead of playing the poor me’s, you have to say, what can I learn from this? What do I learn from myself? And a year from now, I want to be able to look back and say, I don’t want to be saying should have, could have, would have. I want to look in the mirror and be really happy who I see.
Chad Duval:
Yeah. Man, that’s crazy, man. Well, I’m glad you guys made it through. And with that note, I guess if you want and we can wrap this up. If you want to tell the listeners how they can get ahold of you.
Aaron Norris:
You can of course find me on social media, LinkedIn, just Aaron Norris. I’m not Chuck Norris’s brother by the way. He’s a little bit older than I am. I actually had to change my professional name thanks to him.
Chad Duval:
I was going to ask you that but I forgot at the beginning.
Aaron Norris:
Yeah. Not that Aaron Norris. But you can find me there. community.propertyradar.com. If you have any questions on data, you do not even have to be a subscriber of PropertyRadar for you to access me and to get input. Sometimes I create short videos for people on how to find things that’s the best way to do it and sometimes you have really smart people in the business show up and also give you some other ideas.
Aaron Norris:
Aaron, A-A-R-O-N, @propertyradar.com and there’s a free three day trial. So if you’ve never played with data before, make sure you give yourself a few days, sign up, start playing in your market and just start playing with the different 200 lists, different fields that are available. We’ve got quick list and then definitely sign up for one-on-one support. Sometimes it’s just a 15 minute phone call which we’ll back you into exactly what you’re looking for and make your life just so much easier.
Chad Duval:
Perfect. Well, thanks, Aaron. I appreciate you being on the show.
Aaron Norris:
I got you. Thank you.
Chad Duval:
All right. We’ll be in touch.