3 Rentals (While in College!) and Turning a Horrific House into a Cash Cow

Ashley:
This is Real Estate Rookie episode 285.

Hudson:
I swear to God, I was just so brutally honest. I was like, “I am screwed. I need your help. You can have the property if you want. I’ll just eat the holding costs. I’ll lose whatever.” She was like, “Settle down. We just met. What are you talking about?” I met her there the next day and she was like, “Yeah, man, you messed up.” I was like, “Yeah.” Now we actually own that unit as a rental property. We have an operating agreement. We split it 50-50. So everything’s good now.

Ashley:
My name is Ashley Kehr, and I am here with my co-host Tony Robinson.

Tony:
Welcome to the Real Estate Rookie Podcast, where every week, twice a week, we’ll bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. We’ve got a heck of an episode for you guys today. We’ve got Hudson Jump, J-U-M-P, first. He’s got a pretty cool name. I don’t think I’ve ever met anyone with the last name Jump. But he’s also a senior in college and he’s about to graduate right now. I think he’s got a few exams left after this podcast episode. He’s just got a really cool story about grading it out as a young person in real estate. But a lot of what he talks about is applicable to all of our rookies that are looking to get started.

Ashley:
Yeah. Listen for the number 10,000 throughout this episode. So listen to what he does and just how monumental that number is for what he’s doing. We’ll wrap it up at the end, too. So make sure you listen all the way through the end, and Tony and I give our thoughts onto what we think was really impactful through this episode. Tony, what are some other little hints that you have or teasers about your favorite things about this episode?

Tony:
What I loved was how when Hudson found himself in a difficult situation with a deal that he thought was going to pretty much go sideways, he was able to partner up with a super experienced real estate investor who had done hundreds of flips and have that person come in and partner with him on that deal and turn it into something more profitable. I think it’s a lesson that so many folks listening can take about how to align yourself with people who are more successful than you.

Ashley:
Yeah, it’s just, once again, we’re hearing about a successful partnership. That’s not always the case, but Hudson really gives some ideas as to what made his partnership successful. A big takeaway from that was honesty up front. That was really a big thing, so it makes you listen to that part of it.

Tony:
So before we jump in, I just want to give a quick shout at someone that left us a five-star review on Apple Podcasts. Rob T. from California says, “Love this podcast!!!! Truly exceptional. Ashley and Tony have phenomenal on-air chemistry. Well, thank you, Rob. Both informative and entertaining, just what a rookie like myself needs to find the tools and inspiration to get started.”
So for all of our rookies that are listening, if you have not yet left us a review on Apple Podcasts, Spotify, wherever it is you listen, please take a few minutes out of your day and do that. The more reviews we get, more folks we can reach, more folks we can reach, more folks we can help. That’s our goal here at the Real Estate Rookie Podcast.

Ashley:
He’s really spot on about that on-air chemistry. In person, we have no idea what to say to each other.

Tony:
Yeah. It’s just awkward silence the whole time.

Ashley:
[inaudible 00:03:16]. But thank you guys so much for leaving these great reviews. It really has made it very enjoyable for us to read them on air. So if you haven’t already, please leave a review for us, and we’d love to read it on air.

Tony:
Also, just a quick heads up, right now we’re at 1,496 reviews. So we’re four reviews away from hitting 1500, which is pretty cool. So that’s 1500 rookies that have shared how much the show has impacted them. So it’s pretty cool.

Ashley:
Yeah. Yeah, that’s awesome. We especially love it when you share how the show has impacted you in some way.

Hudson:
My name is Hudson Jump. I’m actually a senior at the Ohio State University majoring in finance and I have a minor in psychology. I actually had a presentation this morning. I have a few more exams before I’m done for good.
But, yeah, I came to Ohio State actually to wrestle. I quit after a year and then just focused on work and school and just hanging out with my friends and having fun. Now I’m feeling good.

Tony:
Dude, you’re a senior in college. It always not amazes me, but I’m just always so inspired when I see younger people who are already going on this journey of financial freedom and making things happen. So I know for a lot of my friends, when we were seniors in high school, we were more so focused on … I mean a lot of people were focused on partying and all the stuff that comes along with going to a big school like that. But for you, Hudson, you’re focused already on building your path for the future. So just quickly walk us through what triggered this desire to start building your financial, I don’t know, foundation for yourself.

Hudson:
Yeah. So, at first, I actually wanted to be a psychiatrist. I was a full-time psychology major. Then my brother-in-law, he’s a big realtor here in Columbus and he is a landlord as well, he started having me do some of the grunt work, cleanouts and demolition work and whatnot. I just saw how many opportunities there were. I started listening to BiggerPockets and seeing everything that was really out there. There’s so much opportunity to explore and there’s not really one thing you need to do. There’s so many different things you can do to make money, and I just thought that was really amazing.

Tony:
Yeah. Apologies, Hudson, because I said you were a senior in high school. But you were not a senior in high school, you were a senior in college. So just a little bit of a time difference there. So it was this relationship with your brother-in-law that introduced you. But I think there’s a lot of people, Hudson, that are exposed to real estate investing. Maybe they know someone in their personal lives that’s doing it, but exposure by itself isn’t enough to really kick them into gear to want to go down that path themselves. So what was that moment for you that said, “Hey, maybe this is a path that I actually want to go down?”

Hudson:
For sure. At first, when I was working for my brother-in-law, I was just trying to make money. I wasn’t necessarily focused on learning specifics about being a landlord or owning rental properties, or even wholesaling. I was just a college student trying to make money, and that’s what I did.
I started to build up my wealth, nothing amazing, just a few thousand dollars, which is pretty amazing for a college student. But I just kept working, and then I learned about wholesaling, and then I learned about flipping, I learned about rental properties.
So, yeah, like you said, at first it was a good workout. I got some money in my pocket. It’s not very stressful. So, yeah, that’s just where I started with that.

Ashley:
Hudson, in your college group of friends, in your circle, are other people entrepreneurs or going after things, or is it more of just like, “Oh, I work at the restaurant a couple of days a week,” or things like that? Give me a little background as to the people you hang out with in college and maybe what sets you apart from other college students maybe?

Hudson:
Yeah. So this is actually interesting. Most of my friends don’t even know this is what I do or that I have properties, which I actually really enjoy. I like having one foot in both worlds where I can still hang out with my friends on the weekend and go out, but there comes a time where it’s time to work and get stuff done.
I actually really like that split. I have some friends who … They’re just all over the place. I have friends who are finance majors like me. I have friends who are biomedical engineering. I have friends who are in architecture. That’s the cool thing. They don’t necessarily know that this is what I’m doing, but we can all still connect and relate and have fun together.

Tony:
I just want to point out, I think one of the most difficult parts of the early journey of becoming a real estate investor is the lack of community, because a lot of times when you’re just getting started, you can’t talk to your friends, you can’t talk to your family, you can’t talk to your spouse, your boyfriend, girlfriend, whoever it is, because no one else is drinking the Kool-Aid in the same way that you are.
So for you, Hudson, was it difficult … Because you said you liked it, which is the opposite of what most people say. Did you find it difficult at all that no one else around you was doing it for you to stay motivated?

Hudson:
For sure. I felt like I was in limbo, and still, to an extent, I do because I’m living in this eight-person house with all my friends in college. But then I have my brother-in-law and other partners and whatnot who own hundreds of units, which is insane. So I see this split. Yeah, I definitely do feel like I’m in no man’s land at times, but that’s where connections and everything else, being with partners, has really benefited me.

Ashley:
Hudson, before we move any further, can you just give us an overview of your portfolio and how many deals you have done?

Hudson:
Yup. So I currently own three long-term rentals. I’ve wholesaled seven properties and I’ve wholetailed one. So I have two flips on the market as well. Right now they’re both contingent with my current partner.

Ashley:
That is awesome. Congratulations.

Hudson:
Thank you so much.

Ashley:
Can you break down the difference between a wholesale deal and a wholesale deal? Because we really don’t talk about a wholetail deal that often on here.

Hudson:
Yeah. So wholesale is essentially you reach out to a seller and usually you know they’re motivated in one way or another to sell their property quickly. Then you turn it around and you don’t do anything to the property. You sell it most likely to another investor for them to do the work and renovate it and keep it as a long-term rental or flip it and put it back on the market.
A wholetail would be you’re buying a property that doesn’t necessarily need major repairs. You’re doing minor things, maybe you’re painting, you’re adding new flooring, stuff like that, just basic simple stuff, and then throwing it on the market quickly. It’s a quick turnaround. You’re not necessarily trying to get the most bang for your buck, but you’re making a decent profit, more than you would if you were just wholesaling your property.

Ashley:
So let’s talk about that first deal that you actually did. Was that a wholesale then, or was that one of the buy-in holds?

Hudson:
My first deal that I actually went into contract in was a wholesale. So when I first started wholesaling, I was just looking up online like how do you wholesale? How do you find potential sellers? I started … I made phone calls. I was just on the local auditor’s website looking to see if people had enough equity in their property that it made sense for them to sell. But I really had no idea what I was doing. I just needed to take a leap and start getting into something bigger.

Tony:
Hudson, I just wanted to ask, why wholesaling? Because there are so many other ways of getting started in real estate investing. What was it about wholesaling that made you say, “Okay, this is the next step from here. This is how I want to get started”?

Hudson:
Yeah. I feel like wholesaling is a common first step or a common starting ground for investors. It’s pretty simple. Not that much goes into the process. It’s not like you’re doing all the renovations and whatnot. It’s really being a people person and going out of your way to find potential sellers. But you quickly learn, you see everyone online, like, “Oh, I’ve wholesaled 100 properties this year,” and it’s not that easy.

Ashley:
Can you walk us through the steps that you took in that very beginning as you were trying to get your first deal? So you mentioned you went online to the website, looked for certain properties. Can you just walk us through that whole thing? You made the phone calls, you went to appointments. What was that whole process like for you in the very beginning?

Hudson:
Yeah. So my process at first was, again, I wasn’t really sure what to do. I was literally … I would look up online what does a wholesaler do? I wasn’t even sure really what that entails. My methods and ways of finding leads, it ramps up as you quickly gain knowledge of what you should and shouldn’t be doing. So at first I was writing handwritten letters nonstop. Literally, in my lifetime, I’ve written over 10,000 letters. I’m not exaggerating.

Tony:
You personally with your hand have written 10,000 letters.

Hudson:
Yeah, and-

Tony:
Wow. Wait, I just want to pause for a second, Hudson, because you’re saying that very casually, but that is an incredible achievement. Most people who go into the role of wholesaling, they’re either doing just printed letters or maybe they’re just writing a signature at the bottom, or they’re hiring a company that does the … They’ve got the machines to make it look like writing. What you’re saying is that you hand-wrote 10,000 letters.
I think it’s so important to call that out because that cost you $0. It costs $0 to write those letters. All you have to do is invest your energy and your time. So for someone that’s listening to this podcast that maybe doesn’t have an excessive amount of discretionary spending, what you just said of handwriting 10,000 letters, it’s a step that any person can take to get started. So I just want to commend you on that.

Hudson:
Yeah. Thank you.

Ashley:
Hudson, I have to ask too, did you work in a nursing home and pull a Happy Gilmore here where there’s old ladies like, “My fingers are tired,” from having them write all those letters for you? So you personally wrote them all yourself?

Hudson:
Literally, yes. I used to also pay my roommates to write letters with me as well.

Tony:
Wow.

Hudson:
We would all be sitting around writing letters.

Ashley:
So how much would you pay them? Let’s get into that process, too. How much did you pay them? Did they just have to copy a script you gave them? So if somebody else wants to hire people, what should they do to do that?

Hudson:
So, like I mentioned earlier, you quickly learn so much. You learn what works and what doesn’t. At first, when we started, we were writing long letters. Literally, it would take up a whole legal pad, like a one-page legal pad. Then as time went on, I found that’s not really the most productive way to do things.
So I’ve tried so many different methods. I would say literally one sentence, “Hey, I’m interested in making an offer on your home.” I would put bullet points on some, say, “No cleaning required. No repairs needed.”
[Inaudible 00:15:32] went on, the letters got shorter and shorter, because, personally, I’ve found that short and sweet seems to work better for me. That’s just what I found. So I stuck with that.

Tony:
So you start this journey, Hudson, by first leveraging direct mail. I guess let me just ask. There are so many other ways that wholesalers can reach out to prospective buyers. There’s direct mail, there’s texts, there’s cold calling, there’s maybe using realtors who have dead listings. There are so many different ways to get in contact with sellers. Why specifically did you choose direct mail as your platform and why specifically did you choose to hand-write those as opposed to getting a postcard or something?

Hudson:
So for one reason, as you guys were mentioning, that it’s pretty cost-effective. I had time on my hands, but I didn’t necessarily have the capital to work other methods. Then, two, so Columbus, Ohio, that’s where I’m located, is a hot market. So you have wholesalers and investors really everywhere. So I wanted to look for a method where I could reach out to potential sellers that other wholesalers or investors weren’t willing to do, because I’m sure you guys probably wouldn’t be willing to write thousands of handwritten letters. It’s not really worth your time. But, in a way, that helped me reach out to a crowd that other people might not be able to reach.

Ashley:
I think this is a great example of something different. Usually it’s somebody talking about how they did a DIY rehab, because they were able to save money. It was cost-effective for them at that time, and maybe not everyone would do that. But here you are, instead of going out and doing a rehab or other things where you’re hands on, you decided to save the money this way. I think that’s a great example if someone’s like, “Well, I don’t know how to do a rehab, so I can’t save money that way.” Well, maybe you can in sourcing deals or other things.

Tony:
That’s a great point. I’m glad you brought it up, Ashley, because there’s this common misconception that as a real estate investor, time is money and you should delegate everything that you can. But when you’re first starting, maybe your business can’t afford for you to delegate everything, and you have to start doing a lot of those things yourselves.
Like you said, Hudson, there are things in my business that I did when we first started that I no longer do today. Ash, I’m sure the same is true for you, where there were things that you did in your first deal that you probably never do on a deal today.
So I just want to offer rookies to understand that when you hear me or Ashley or some of our more experienced guests talking about their team and how they delegate, we all didn’t start that way. We all started in the grind doing it ourselves. I appreciate you bringing that up.

Ashley:
Tony, real quick. There’s still things that we should delegate out that we are still doing, too.

Tony:
Absolutely. I keep a list. I have a board and I keep a list of this board of things I don’t want to do anymore. Every time I find myself doing something, I just ask that list. It makes it harder to delegate when you find that person.

Hudson:
So literally on my phone, in my notes, I have the same exact thing, a list of things I should be doing, but I just really don’t want to do. Those are honestly usually the things I’ll ask my roommates to do. I’ll try to get them to do them.

Tony:
Let me just add to that, I know this isn’t really the premise of this episode, but I think it’s an important thing to call us since we’re on the topic, is that every person in their business should be doing that. Whatever it is that you don’t want to continue to do, keep track of that somewhere.
Then to take it one step further, when you actually have to do that task yourself, document and record the steps that are necessary to do that. Then you either have a written or video SOP, so that way when you do hire someone to take on that task, you can hand them those instructions and then they can go ahead and execute themselves. So that’s something we’ve been really trying to focus on in our business, is building up this library of video SOPs that we can hand off to our team members.
So, Hudson, you land on direct mail. Obviously you get started with that. So what happens from that point on?

Hudson:
Yeah. So I just quickly started to ramp up my CRM and lists and whatnot. I got into PromptStream and a few other softwares to really weed out not bad leads, but leads that don’t necessarily make sense. So at first when I was on the auditor’s site, I was specifically looking to see if people had high equity in their property, which is a great place to start. But then I got PromptStream and I started stacking lists and working into probate and distressed owners, things like that. This all was happening over a few-month period.

Ashley:
I want to define some of those things, because when I first started out, I … What’s a list? Everyone keeps talking about a list. Where does this list come from? So can you maybe break that down a little bit more? Then also you talked about a distressed owner. Maybe just explain this is how I found a distressed owner in PromptStream, changing the filters on there. Just talk about that a little bit for us, please.

Hudson:
Yeah, PromptStream is great. I still use it to this day. I’ve used it since I started, now for about the past nine months or so. And so, when you start investing, you want to build a list. You want to have a list of potential properties that you know could turn into deals.
So you start with maybe something basic like … You could even go as basic as a specific zip code. That’s pretty broad. Then you work it down into properties that have above 55% equity, because then these people are more likely to sell their homes. You wouldn’t sell your home if you’re not going to make money on the transaction.
So then you would work down from there and you just keep getting more and more specific. So you have these high-equity properties in the specific zip code, and then you can go a step farther. Maybe there’s an out-of-town owner, which would be great. Just keep narrowing down your list. Maybe they’re on the probate list somewhere, someone passed away. So they’re more likely to sell their home. There are so many options, and you keep narrowing it down until you get to a select few properties that you really need to target hard.

Tony:
So, Hudson, did your letters lead to your first deal?

Hudson:
Yup. So actually my letters were … They led to all my wholesale deals.

Tony:
Okay. So talk us through that first one. So you sent out these letters. I think, if we can, before we actually get into the details of the numbers, just when … Because here’s the thing. I think a lot of us can wrap our heads around the idea of sending out the letters. That part is relatively easy. It’s relatively straightforward.
I think it’s what happens when the letters go out and the next steps where people start to get a little nervous or confused around what to do. So when a seller actually returns your call, or gives you a call based on your letter, and you pick up that phone and they say, “Hey, Hudson. I got your letter,” what does that dialogue look like? What are you saying to those folks to actually get them to the point where they’re saying yes about selling to you?

Hudson:
So, to be honest, at first it was probably really bad when I was answering the phone. It can be scary and challenging. You don’t necessarily know what to say. But just with repetition, that becomes so much easier. I have no problem talking to potential sellers at this point.
But, yeah, first I was frightened. Now I say basic things such as, “When was the last time you renovated the roof?” or, “How long have you lived there?” Just really simple things. Really, the thing I was trying to get to is I want to see the property in person myself. That’s the big thing.
So if you can schedule that on first contact when they reach out and call you, that’s great. But of course that’s not usually how it works. You need to keep following up to get the deals.

Ashley:
So you did your first wholesale deal. What about your first long-term rental? Was that from the letters, too? What made you decide to keep that property as a rental instead of wholesaling it?

Hudson:
Again, just taking it one step farther. I just thought that was the right thing to do. Looking back, it was definitely the right thing to do. I wanted to keep going and start getting properties to hold onto, except that deal was a complete disaster. I’m still processing it to this day. It’s given me a lot of hard times, but it’s getting better.

Ashley:
Okay, but you still continued to invest. So talk about the mindset of that, as your first buy and hold property didn’t really work out the way that you had hoped it would. So why did you continue on?

Hudson:
For sure. That really was the result of a partnership I formed as a result from that first property and how my partner really taught me that things just keep moving forward, things will work out. There’s always an answer. I couldn’t see that by myself, but it took a partner who knew what they were doing to really show me that. I don’t know where I would be, honestly, without meeting that partner.

Ashley:
Ashley, it reminds me of a JP Desmet who we had on a recent episode as well, where he lost $250,000 over the course of his first few deals. It wasn’t until he found the right partner, the right mentor to coach him through that, he finally found success on that fourth deal I think it was. So, Hudson, if you can, give us the details of what exactly went wrong with that first deal.

Hudson:
Geez, where do I even start? So, seriously-

Tony:
That’s how you know it’s a good story, when you don’t even know where to begin.

Hudson:
Yeah, you guys might shun me a little after this one. So I reached out … I sent them a letter this out-of-town owner. They reached out to me. We went back and forth for a little bit. They wanted … I can give you the numbers right now as we go as well. So they wanted $75,000 for the property.
Working with my brother-in-law and some other local investors, they helped me figure out an ARV that made sense. So we had a projected ARV of around $160,000.
The property was very unique. It was a residential, three bed, one bath in the front. Then there was a commercial unit attached to the back. So the property was huge. The numbers seemed to make sense from the outside, but this was just me not knowing what I’m doing, just like la, la, la. I offered them $60,000 and they were like, “No way. I’m not doing that.” I was just like, “Okay.”
I followed up again a few weeks later and offered them $65,000 site unseen. I had never been in the property. I actually didn’t step foot in the property until four months after purchasing the property, the closing.

Ashley:
Real quick, Hudson. Was this a vacant property? Was there someone living in there?

Hudson:
There was a tenant in there.

Ashley:
Okay. So you have to assume it’s at least habitable, I guess, when you were purchasing it.

Hudson:
Yes.

Ashley:
Okay.

Hudson:
You’d assume, right? So, again, now, even though this was only seven months ago or so, I would never buy a property that’s tenant-occupied. I just wouldn’t. It’s just extra hassle. Of course, I would never … I don’t know anyone who would buy properties that are sight unseen, at least for their first deal.

Tony:
Hudson, can I ask, what made you confident to purchase that property sight unseen, given that it was your first? Just walk through what your thought process was and maybe what some of the lessons were you learned coming out of that?

Hudson:
Yeah. Just, again, I just mentally felt like I needed to take a jump. I needed to make the next step, whatever it may be. Looking back, that was a horrible choice. It really was. But things happened to work out for the best. That is something I would never do again. I would never buy a property site unseen.

Tony:
Yeah. But I guess just for clarifying purposes, did you buy it site unseen because the tenants that were inside wouldn’t allow you to enter, or did you feel that it would strengthen your deal? Just what was the reason behind not trying to get inside before you closed?

Hudson:
Yeah. The tenants would not let me enter the property. They wouldn’t even let the landlord enter the property, which is a red flag again.

Tony:
A telltale sign by itself, right?

Hudson:
Yes.

Tony:
Now I appreciate you sharing that. It’s just something I want to … I was talking with someone. We had our event last week and someone was in a similar situation where they took a leap of faith and it didn’t quite work out for them. I shared this thing, it’s this framework that I’ve learned in the person development space.
But when you think about taking action, you have these three different phases or three different areas. You have your comfort zone, and that’s the zone that most of us operate in for the majority of our life, where we’re doing things that we know how to do, we can do with our eyes closed, hands tied behind our back.
Then outside of the comfort zone, there’s a growth zone. That’s where you push yourself beyond your existing limits and how you start to get better and develop new skills.
But then outside of the growth zone, there’s the danger zone. The danger zone is where you almost bite off more that you can chew and you end up in a situation where it’s no longer productive, but it’s counterproductive because you’ve taken on too much.
It’s a fine balance to keep because you always want to make sure that you’re in that growth zone pushing yourself, but you also want to make sure that you don’t go too far to the point that you’re in the danger zone and just totally out of your element.
So I appreciate you, Hudson, for taking that big step. But it seems like maybe weren’t one step too far.

Hudson:
Yeah, for sure. The thing is when I first started, I was scared. I didn’t necessarily know what to do. Then it’s easy to overlook things. You don’t analyze deals, property, or work the numbers correctly. You take a big risk and sometimes it goes too far. Sometimes it just happens to work out.

Ashley:
So, Hudson, after this deal, you’ve had one more property, or two more?

Hudson:
So I have two flips on the market right now after this deal. Then we currently, me and my partner, hold two properties we’re renovating as we speak.

Ashley:
Okay. Then the house that you’re living in now for college, are you renting or-

Hudson:
Yup.

Ashley:
Okay. So you’re renting and then you have purchased your rental properties. Okay, cool. I was just wondering if you were house hacking. Did you ever think about buying a house there and then renting to all your friends?

Hudson:
So that’s actually the plan next year. Our lease is up in July. We’re planning on moving just in downtown Columbus. I’m going to buy a property, hopefully, if the numbers make sense, and then rent it out to my friends. That’s the plan.

Ashley:
Okay. I have one more college-related question, then I want to get into the actual funding of your deals. But knowing what you know now, have you regretted going to college?

Hudson:
So I should say yes, honestly, but I would say no because college … It’s so fun. I would say I’m here … Literally. I’m here having fun. I’m hanging out with my friends all weekend. I have two steps, where Monday through Thursday up until about 5:00 PM, I’m grinding, I’m working, I’m working. Then I love it. I love being with my friends and just going out, hanging out, having fun.

Tony:
I love the transparency.

Ashley:
Yeah. Last night someone told me this quote, I don’t remember it exactly, but it was from Angel Garcia, that he told me that this was one of his favorite quotes. It was something about you don’t regret things that you did, you regret things you didn’t do. I just thought of that with if you didn’t go to college, you may regret not going to college.
Yeah. I always think that’s so interesting, because I think that’s a very common question for somebody that’s in high school that’s interested in real estate investing. Should you even go to college or just jump full board? It’s, I think, a very personal question, and I think there’s pros and cons to both definitely. But I was just interested in hearing that.

Tony:
Ashley, I just want to ask you, you’ve got three young boys. As they get closer to college age … And I ask because we have the conversation with Sean, my son, because he’s only three years out from college right now. But as your boys get older, what’s your thoughts on them going to college versus not going to college?

Ashley:
Honestly, I don’t care. I’m pretty sure my oldest is just going to take over the farm and run the farm. I don’t see, as of right now, him doing anything else. You don’t need to go to college for that, and that’s fine. I mean he’s nine and he can rebuild a motor. That’s good for me.

Tony:
That’s amazing.

Ashley:
He has some skill. But also we have the college 529 plans for each of the kids. Recently, they announced that they can be now turned into a retirement account and be retirement. So if they don’t use them for college, it will now be retirement for them. So I mean that makes me feel even better about them not going to college, because now we won’t pay penalties for taking that money out for them to do something else with.

Tony:
Totally. Yeah. My son’s a freshman in high school, so he’s got three years of high school left. I’ve told him multiple times, I was like, “I don’t care if you go to college or not. But all I require is that you have a plan.” I was like, “If you don’t want to go to college, then show me a clear plan of what you are going to do to be a productive self … You can take care of yourself as an adult. What you’re not going to do is you graduate from high school and seat on my couch and play video games all day.” So it’s like you’ve got to have a plan.

Hudson:
Well, I think that … So, for sure, I would be farther ahead in my career work-wise if I did not go to college. But the friendships and memories I’ve had in college, seriously, I wouldn’t trade them for anything.

Ashley:
I think having a degree in psychology has probably helped with your wholesaling, creating relationships and communicating with people and reading people. Then also with a finance degree. I graduated with an accounting and finance degree, and I think it’s helped me tremendously with analyzing deals, understanding financial statements, and just business in general. So I’m thinking that’s probably the same in your case too, that you can actually use your degrees to help your real estate investing.

Hudson:
Yeah, for sure. I specifically chose finance. Psychology just worked out for the better. But I specifically switched over to be a finance major because of real estate. That’s something I’ve always struggled with is in the numbers aspect of things and analyzing deals and whatnot. I’m the guy who’s just jumping in and trying to make things work.

Tony:
So, Hudson, I want to go back to that first deal, because you alluded to the issues that you ran into. But just give us a breakdown of what the challenges were, what went wrong, and how you eventually course-corrected to make it a better deal, or just how you saved yourself from everything going the wrong way.

Hudson:
Okay. So I’m going to fast forward four months from closing date, the first day I stepped inside the property. So I drove over there. It’s actually in Newark, Ohio, just about 45 minutes east of Columbus. I walked in the front door and it was kicked in. There was trash just piled to the ceiling. You couldn’t see anything. I’ve done a lot of cleanouts, and I might say it was the worst property I’ve ever been in.
So I can still vividly remember it. I walked back into the dining room, I took a left into the bathroom, except there was no toilet or shower. It wasn’t really a bathroom, I guess, even.
So I mentioned that the back half was a commercial unit. It was just a big warehouse off the back of the house, and it was just piled with trash just everywhere, just everything. I felt like I had a rock in my stomach. I just couldn’t even comprehend what was going on. I felt horrible.

Tony:
So once you get inside, Hudson, obviously the condition of the property is far worse than you imagined. Does this mean that the numbers don’t work for you? Are you now over budget? What were the ramifications or the implications of the conditions of the property?

Hudson:
Nope. Yeah. So I estimated the rehab to be $35K, and I knew immediately that wasn’t going to work. So that was another factor where I didn’t know what to do. It sucks when you have no idea what to do and you just feel lost. That’s really what happened. There were squatters in the back of the property. It was just a mess all around. This was after already holding it for four months. So I had already spent over $3,000 in holding costs.

Ashley:
How were you funding this deal with the purchase, the rehab? Was this from wholesale money, or did you get some kind of funding?

Hudson:
Yup. So I provided the downpayment. So, yeah, I didn’t have very much money at the time after doing that. Then I had a hard money lender. I used a bridge loan for the other funds.

Ashley:
So now all of a sudden you’re getting more expenses that are coming up. How did you start chipping away at that problem?

Hudson:
Yeah. So for a few days, I was just trying to recuperate, just figure out what I need to do. I reached out to my brother-in-law who had helped me the most this far in my journey. He knew of an investor in the area who was just killing it. She had flips left and right. She owns a lot of rentals and is just like go, go, go.
So he gave me her number and then I called her. I swear to God, I was just so brutally honest. I was like, “I am screwed. I need your help. You can have the property if you want. I’ll just eat the holding costs. I’ll lose whatever happened.” She was like, “Okay, settle down. We just met. What are you talking about?”
So then I met her there the next day and she was like, “Yeah, man, you messed up.” I was like, “Yeah.” But she said we’ll work through it. She’ll walk me through the renovations. She’ll help me with everything. I was like, “Yup, that sounds as good as it could be.” I couldn’t ask for anything more, honestly.

Ashley:
So with that partnership, how did that conversation turn … Did you end up giving her the property, or how did that partnership evolve? Was it her saying, “Okay, this is what I want out of it and I’m going to help you,” or what did that piece look like?

Hudson:
Yeah. So I’ve provided the financing on that property and I handled … I’ve worked with the hard money lender and whatnot and she’s handled the rehab, and we just went from there. Now we actually own that unit as a rental property. We have an operating agreement. We split it 50-50. It’s been rented for a few months now. So everything’s good now.

Tony:
Hudson, can I ask? So what support or guidance did this new partner bring to you? How were they able to make this now a profitable deal as a long-term rental?

Hudson:
For sure. She has so many connections in the area, where she can have contractors and whatnot do the work for much cheaper and effectively and get things done so quickly. I never really thought about that as a beginning to start my investing career, but it really is beneficial. She’s just on top of things immediately.
When we walked that property, she was getting … We walked that contractor and she was like, “Get on that right now. Start cleaning over there,” like, wow, she knows what she’s doing. I was just a scared little puppy in the back, but …

Ashley:
Yeah. But that is a great point, that experienced investors sometimes do have that network where they’re getting discounts or they know the right people to call. So you watch social media and be like, “Oh my God, they did this rehab for this,” and it’s like, well, that’s because they have that contractor doing three different rehabs for them at once. They keep them busy, things like that, where they’re getting that preferred pricing. So I think that’s a really great point to touch on.

Tony:
I think the lesson to take away, Hudson, is that if you’re able to do the hard work of finding the deal for an experienced investor, that is one of the best ways to build a relationship, because good deals open so many doors. Even though you overpaid for this property, given the condition of it, that experienced investor was still able to turn to a good deal for his or herself.
I think the lesson for all of our rookies listening is if you can find a way to bring value to another investor or someone that has more experience, that’s the best way to find a mentor, to find a potential partner, to find someone to guide you along is doing the hard work of finding a good deal. I think you’re a great example of that, Hudson.

Hudson:
Yup, for sure. Maybe I can’t analyze deals the best, maybe I don’t know how to do all the rehab, but my partner texted me an hour ago and said, “Hey, can you pick up these cabinets? We need to get them installed ASAP,” and immediately I was like, “Yup, I’m on it. I’m going there after this.” It’s just the small things that you’re willing to do that other people might not be willing to do.

Ashley:
Yeah, or they can do, they just don’t want to do it. Just have somebody do those things where, okay, if they have a partner that can go and do it, just doing those little tiny … Which may seem tiny tasks, sometimes it’s so hard to hire someone to do that because it’s such a simple thing where your contractor’s, “No, I’m not going to run to Lowe’s right now and pick up cabinets,” or, “I’m going to charge you a ridiculous amount of money to do that and take the time out of my day.” So, yeah, that’s a huge benefit.
Hudson, can you go over the numbers real quick for us on this deal? Just tell us the purchase price, the rehab, what you’re renting it out for, and what you ended up cash flowing.

Hudson:
Yeah. So I purchased it at the time for $65K. The rehab was around $50K, which it should have even been much more than that, but my partner saved me there.
Then we actually got it reappraised yesterday. So we don’t have it refinanced yet even. I’m still holding it. I’m still paying holding costs and whatnot. But it is currently renting for $1400 a month. I’m excited. I’m crossing my fingers for the refi.

Ashley:
What do you think that it’s going to appraise at? What do you think the ARV is?

Hudson:
So things got a little splotchy with the commercial aspect of the unit. I don’t know, I’m hoping $150,000, but we’ll see.

Ashley:
Yeah. Well, awesome. Excited for you. Thank you so much for being open and honest about the struggles of what you went through, because if just one person is maybe going through the same thing that you did and hearing your story, hopefully that gives at least somebody some kind of motivation and inspiration, like, “Hey, here’s what I did. I went and found a partner and it worked for me.” There are options out there. So if anybody else is having that happen, don’t give up. Do what Hudson did. Go out, find a partner, solve the problem, make yourself solutions.

Tony:
I guess we’re going to jump into the rookie exam, Hudson, if you’re ready for that, brother.

Hudson:
Okay. Yeah.

Tony:
All right, man. These are the three most important questions you’ll ever be asked in your life. But actually I don’t know if that’s true for you because you said I think you have an exam right before this, or right after this. So you might be the one caveat to this. So question number one, Hudson, what’s one actionable thing rookies should do after listening to this episode?

Hudson:
So when I started, it was write letters, do things that other people aren’t willing to do to connect with potential sellers. But my advice would be find someone who knows what they’re doing, who wants to help you. It’s so easy. There are so many people who know what they’re doing, but you’ve got to find the right people who really want to help you and want to grow with you.
That’s where I’ve taken off to the moon with my investing career. I don’t know where I would be without the connections I’ve made. Maybe I wouldn’t even be in real estate anymore.

Ashley:
What is one tool, software, app, or system in your business that you use today? Besides PromptStream, because you already said that.

Hudson:
Can I say making connections with local realtors?

Ashley:
Yeah, sure.

Hudson:
So, yeah, really my partner and I have connections with some great realtors around the area who focus on distressed properties and selling properties that aren’t up to market standards. So we have so many connections now that the deals are flowing to us, instead of us spending our time and effort trying to find deals.

Tony:
Love that. That’s a great position to be in. It snowballs, right? Once you get that first one, you start building relationships, and before you know it, you’ve got more deals coming in than you can use. So last question here, where do you plan on being in five years?

Hudson:
I love that question because I seriously have no idea. I was wholesaling six months ago, and then now I’m working with my partner. We’re working on a few higher end flips. I don’t know. I would like to keep working up and see where it takes me, hopefully get into apartment complexes one day, something of that sort. Just keep going and seeing what presents me.

Tony:
Yeah. Well, Hudson, if where you’re at today is any indication, brother, I’m sure you’re going to crush whatever goals you set aside, man. So we’re excited to be experiencing that journey with you.
So before we wrap things up, I just want to give a shout out to this week’s rookie rockstar. Today’s rookie rockstar is Andrew Snyder. Andrew says that, “Just closed on my first deal and made $5,000.” He’s been wholesaling off and on, but decided to take it seriously this past year.
The owner actually left him a Canada gold ring today at closing as a gift for helping him and following up. What a crazy thing to happened that he bought a deal from someone else and that person thanked him for buying the property. So it just goes show what happens when you wholesale, you do it the right way, it’s a win-win situation.
So if you guys want to get a shout out as a rockstar in the Real Estate Rookie Podcast, I’ll just post in Real Estate Rookie Facebook group or in the forums and we would love to share your success with all the rookies that are listening.

Ashley:
What is a Canada gold ring? Like a ring on your finger?

Tony:
I have no idea, but I’ll take it.

Ashley:
I’ll have to ask some of my Canadian friends. Okay. Well, Hudson, thank you so much for joining us. Can you tell everyone where they can reach out to you and find out some more information about you?

Hudson:
So, yeah, I mean I’m not very active on social media or anything, honestly. If you just reach out on Instagram or anything, my Instagram’s just @hudsonjump, J-U-M-P. You’re not going to find much about real estate, to be honest, but I would be willing to connect with some people, reach out, I would love to help, and we can go from there. But, yeah, I’m not very active on social media, to be honest.

Ashley:
Because you’re too busy partying in college, huh?

Hudson:
You would just assume. Yeah, I’m just hanging out.

Ashley:
Well, Hudson, thank you so much. We really appreciated the value you have brought to today’s show. We can’t wait to have you back on in a couple of years to see where you went with your continued success.
Tony, do you think that everyone is having the same kind of emotions, response to this episode, like pure excitement and joy for Hudson but also a pain inside as to why wasn’t I doing this at college?

Tony:
Yeah. It’s always this weird dynamic where I think we love hearing stories of people that are relatively young, who are taking these massive steps towards building their real estate business. But it also, like I said, hits you right in the heart. It’s just like, “Man, why wasn’t I doing this at that age?” But I mean it was a really cool episode. Just his whole demeanor and his approach and his mindset is super inspiring.
But I also want to call out, because he faltered at the beginning with that deal where he underestimated the rehab cost and didn’t get inside for four months. JP Desmet, who was on episode 279, he was a guy that lost $250,000 on his first few deals. The common theme between JP and Hudson was that both of them found their way out by partnering with someone else that had more experience.
So for all of our rookies that are listening, I think that’s one thing to take away is that if you find yourself from a position where you’re just in over your head, the fastest path to success or getting back on the right path is finding a partner that can potentially help you out.

Ashley:
Yeah. If you guys didn’t know this, Tony and I actually have a book launching this summer called Powered by Partnerships, which goes in depth about this as to why you should consider having a partner. So I think this episode in general was a great case study for that.
Another thing I really enjoyed about this episode are the list that you and Hudson talked about, the list that you make as to … And it’s something I’m definitely going to start doing, is making a list of things you don’t want to do, and then building off the SOPs for that, the standard operating procedure. So I challenge you to also do that, to go ahead right now and start making a list as you go through your day of things you don’t want to do that you can eventually start to outsource.

Tony:
We need to get these people on as a sponsor for the podcast, because I feel like we talked about them quite a few times. But I use Loom, L-O-O-M, to record all of our video SOPs. It’s a super easy way, just like whenever I’m about to do something that I know I eventually want to delegate, there’s like a little button on my web browser, I hit the button, I record it, I save it, file it, and then when that team member comes on, I just send them a link to that video and say, “Hey, here’s how to do it,” and they don’t have any questions because it’s such a detailed explanation through video.

Ashley:
Yeah. I use Loom, too. I really like it. Then I tie that into monday.com, which has almost like the written part out of the checklist element to add to that, or the template piece, I guess.

Tony:
Yeah, and last thing that really jumped out at me about Hudson as well was the 10,000 letters. That is just a monumental number of letters. I don’t think people can wrap their minds around how much work goes into 10,000 letters. I tried to write, I think, like 200 letters when I first got started, and that took me so long. So I couldn’t imagine doing 10,000. So just major kudos to him.
But that’s the hard work that goes into being successful. That’s the stuff that nobody sees behind closed doors, but then they want to celebrate someone’s success. So if you’re hyping Hudson up for being successful, also hype him up for doing that hard work of writing 10,000 letters by hand.

Ashley:
Yeah, and also the fact that he started to realize maybe I should hire my roommates, where it probably is relatively inexpensive to pay someone to write letters. You’re sitting there watching TV, doing whatever, and you guys are just writing letters. So maybe some quality bonding time with your friends.

Tony:
Yeah. He also didn’t clearly state that he did not go to the old folks’ home when you asked him that question. He neither confirmed nor denied. So maybe there’s a little bit of that in there as well.

Ashley:
We do also have an Instagram shout out for you guys today. So today’s shout out is Alex Camacho. His Instagram account is @realestatedealmaker. So what caught my eye today was a post he did. It was an Instagram reel about seven departments that he has created to build a seven-figure real estate investing company.
So Alex does all kinds of real estate investing strategies. I suggest you guys give him a follow, because he shares a ton of knowledge about how he has built his business and systems and processes, team members he has in place, things like that.
Thank you guys so much for joining us. I’m Ashley, @wealthfromrentals, and he’s Tony, @tonyjrobinson. We will be back on Saturday with the Rookie Reply.

Speaker 4:
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