[00:00:05] Speaker A: Welcome to the Short Term Show. The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it in the vacation and short term rental space.
And here's your host, Avery Carle.
[00:00:28] Speaker B: Hey all. Welcome to another episode of the Short Term Show. I'm your host, Avery Carle. Today we have a very cool guest named Matt Krueger. But a few housekeeping items. Make sure you're following us on all social media channels so you don't miss anything. We're YouTube.com the Shortterm Shop, Instagram at the Short term shop or I personally am at the Avery Carl. We are also hiring for a number of positions in a number of markets. So head over to our website if you think that you might be interested. It's the ShortTerShop.com and email CareerShort.com to apply for any of those. Anyway, on to the interview. Matt, how's it going?
[00:01:06] Speaker A: Yeah, going well. I appreciate you inviting me on the show. I'm excited to be here.
[00:01:11] Speaker B: Yes. Thank you for coming on. Thanks for coming on. A midwestern boy like my husband, he's from Nebraska, but you're from Iowa, right next door. Just as bad.
[00:01:20] Speaker A: Yeah, yeah. Hey now. Hey now. We keep it simple.
[00:01:26] Speaker B: Why don't you just start off by telling our audience a little bit about yourself?
[00:01:30] Speaker A: Yeah, so I am, oh, I don't even know where to start. I'm a full time real estate investor. My wife and I have 11 rental properties right now. We started doing long term rental investing first as a way to just build passive income on the side for our family because I was kind of working a dead end job when we started about nine years back and it just turned into something that we were able to eventually get me to leave my job from. And it pays for our lifestyle and living expenses now. So we have four young kids. Eight, six, four and almost two. And we travel around the country as a family. We homeschool super basic family. But we, we love, we love to, to help other people with it too. So I do some content creation as a way to be able to share our story with others and show some of the ins and outs of our short term rental business too. And, and yeah, we have fun with it.
[00:02:27] Speaker B: Awesome. So how many, let's start here. How many properties do you currently have in your portfolio?
[00:02:33] Speaker A: Yeah, so right now we have 11 properties.
[00:02:36] Speaker B: Okay. So 11. I like that number because so many people will hear, oh, he quit his job and then they want to go quit their job on like one or two and that's not real life, right?
[00:02:47] Speaker A: Yeah. So, you know, and it definitely frustrates me seeing some of these social media influencers talk about this. It's like, yeah, I've got one property and you can leave your job because, because that's super realistic. That would be super idiotic. I do not recommend that at all. But yeah, we have, we have 11, seven, eight long term and, and three short term right now.
[00:03:06] Speaker B: Okay. So, you know, there's not very many people out there that you meet that do both. I feel like all the long term rental people that I know only do long term. They want nothing to do with short term. And then short term rental people are like, why would you have any, like, people's favorite question to me is like, if short term rentals work so well, why do you have so many long terms? Cause they work too.
[00:03:25] Speaker A: Yeah, right, Right. Yeah, it's, you know, I think for us it's really the diversification of it too. You know, I know that the cash flow is significantly better on the short term rentals for sure. But we, you know, two parts to it. We bought all of our long term rentals and we started nine years, 10 years ago. And, and then I refinanced most of them in 2021, 2022. So I've got 2.65% fixed rates on conventional loans on all these properties where my mortgage payment, you know, I bought these things for like 130,000 and my mortgage is like 800 and we're renting them out for 1750 right now. So the cash flow is still, you know, realistically pretty good there too.
And it's, and it's far less work. So I like the diversification of having both.
[00:04:11] Speaker B: Yeah, same, same. And back to the quitting your job on, on one or two. I. My advice is keep your job as long as you can stand it and use that income to buy as many properties can before you quit your job. Because I full disclosure, I did quit my job on two properties, but I was making $37,000 a year. So the chances that anybody listening to this or making that is probably slim. You're probably doing a lot better than I was. So a little bit different. But yeah, you real estate investing and nobody wants to hear this, nobody wants to talk about this is a get rich slow process. And yes, you can start cash flowing fairly quickly if you buy the right short term rental, manage it well, finance it well, but also like, keep your eye on the ball too.
[00:05:03] Speaker A: Yeah. So we, man, I mean, just kind of jumping into it like with our background too, I mean we were in a very like similar situation like when we started investing. My so when I met my wife, her parents, my now in laws were spending a month each year down in Tucson and they were in their you know, mid, early 40s I guess at the time and kind of what sparked my interest of getting into rental properties. But we were so like dirt broke. I was making 35k a year as a cell phone rep at a Sprint store slinging phones and, and she was a veterinary technician. Make about 14 bucks an hour. So we were, we were pretty, pretty broke. And then we had a baby on the way and it's like well what do we, what do we do now? And you know I did eventually move up but the most I ever made in my career even at my last job with Google I was making 68k a year. And so our salary, you know, our income was never really that high. Our goal once we started to get properties in and starting to see more of this cash flow was to eventually leave once you know, the cash flow was consistently surpassing my salary. But even then it's just easier, you know, to get loans when you have an actual income that's stable coming in from a W2 job. So we built it up a little bit farther than that. But yeah, I actually needed to eventually hear someone say at a. We went to the real estate Robinson's short term Rental Summit in Newport Beach, California at the end of 2021 and I was talking with some people like, you know, what's the worst that could happen if you leave your job now? You know, you have enough cash flow to cover things like if something falls through. What's the worst that could happen, you know, is that you could end up back to where you are now. So there's kind of two sides of that I think. You know, one, don't just leave your job right away. But the other thing, don't hold onto your job too long. You know, if you are in a place where you can do it and then I encourage people to do it, you know, make, make the leap because then all of your efforts on your, on your properties instead of 50% on your job and 50% there and you can just kind of, you know, build from there.
[00:07:02] Speaker C: So if you're new to vacation rentals or want to up your game, we are here to help.
The experts at Short Term Shop plus can help guide you in your mission to create memories for your guests at wonderful overnight rentals. We have one on one coaching available with our Experts and the price is right. Short term Shop plus is inexpensive and we would love to earn your business. Please join
[email protected] that's stsplus.com I agree.
[00:07:41] Speaker B: So let's talk about your. So you've got eight long term rentals. Are those all in Iowa?
[00:07:47] Speaker A: They are, yep. They are right now.
[00:07:49] Speaker B: Okay, and then what about the short terms also?
[00:07:52] Speaker A: Iowa? Yeah, we're all in Iowa right now.
[00:07:54] Speaker B: So all in the same town or different towns in Iowa.
[00:07:57] Speaker A: Most of them are downtown Des Moines. We do have a small apartment building as well that's in like north west Iowa, about two and a half hours away. So.
[00:08:06] Speaker B: Okay, so let's talk about your short terms for a minute because you do this a little differently than I do when it comes to short terms. I do vacation markets only. I don't like mixing the type of market that I buy short terms and the type of market that I buy long term. I buy long terms in the Midwest and Southeast. So let's talk about your short terms, where they are, what you paid for them, all the, all the details.
[00:08:31] Speaker A: Yeah, yeah. So for sure. So we, I would say I kind of got into this analysis paralysis for a while. Right. Like everybody does, you know, I'm, I'm learning how to do this. I want to know how to do it before I start. That's that, you know, there is some validity to that. But there's comes this point in time when you need to just do it and learn by doing it. And after listening to different influencers on TikTok and Instagram for a while, we finally decided let's just, just do this short term rental thing. So we were comfortable with long term, we wanted to try short term and we were just not really comfortable with doing it out of state to be our first one. We've always been more, we still are more hands on with our properties. We like to be the ones that manage them and just kind of control the day to day stuff. We were small enough at the time too that I just didn't really have the money to hire this out and to have this nicer, more expensive property out of state in a vacation market. So I hopped on Air DNA and I looked at the market score for Des Moines, which is about 30 minutes from where we are and it had like a score of like 34. So absolutely terrible. But actually yeah, but I did like, as I'm doing my research, I figured out like, hey, you know, although there's not like there's a lower score, there's just Not a lot of properties either. And there's not much competition. And for the properties that are there, air DNA showed us that like 80% of the properties in Des Moines slept less than eight people. Like eight people or less. So with our first house, we opened up a property that had four bedrooms and could sleep 10. We bought this house for $160,000 and our mindset was it's local. And our plan B is that we could always convert it into a long term rental if we wanted to. And even if we don't make a whole lot of money with this, at least it's something that we can learn from. So it was more of like just an experiment to be honest. Like let's try, let's try local. We can do, you know, some of the cleanings. We can be more involved, make, you know, hopefully cut even with this. And that first property we bought for $160,000.
It's, it's a century old home, but it's right downtown Des Moines. So walking distance to shops, restaurants, some of like it, not, not a rundown area. It's more of an up and coming area. So 160k. We did the renovations ourselves for about 15 to 18,000. And then we did the furnishings ourselves, which we, you know, at that time we did more of the thrift store type of stuff. You know, bought new beds and couches and stuff. But all the rest of the furnishings were recycled. Facebook Marketplace finds, whatever. So I think all in for renovations, furnishings, we were about at like 22k after everything was said and done. So relatively inexpensive. 160 for the house.
That first year that house did, it was, I'll have to look back to confirm, but it was like $62,000 in revenue. A second year it was almost 70. And then this last year did 76,000. So we did end up having a hot tub added about a year and a half ago, which I think contributed some of that increase as well. But, but yeah, after we saw, you know, we're making, because of our low mortgage payment, we're making 2,000, $2,500 a month in cash flow, which was a dramatic difference from what we were used to with our long term rentals. We decided, you know, let's, let's stay in the area and open another one. So our next one was a five bedroom, three bathroom for 165,000.
Again old college home that they had, you know, dogs running around inside, peeing all over the place. It was, it was gross but, but we put about 40,000 into that one for renovations and furnishings. Again did most of the work ourselves. And that house just brought in 92,000 this last year. We're cash flowing 3 to 3,500amonth on that one after all expenses.
And then again we opened another one just in.
We went live, I think June 1st, this last year, 225k purchase price needed less on the renovation side, but we did more on the furnishing side to make it more of a not luxury but higher end property than what our other ones are. And we already saw 65k in revenue on that house just from June 1st when we went live to the end of the year. So we expected to do 1 to 110 this year. But yeah, so I mean it's, it's, you know, it's, it's working for us. So that's kind of why we're sticking with this for now.
[00:12:55] Speaker B: And that is really what I want to drill down on here. So you like. I don't think I've ever looked at a, an air DNA market score in my entire life.
So you, you looked at that and you're like, I don't care. I, that doesn't, that doesn't mean as much as the knowledge that I have of this market because I live 30 minutes away from here. I know who comes here and why and what time of time of year and what type of people they are. Like what, what's the reason they're coming here? What's their demographic? So what you're telling me is you did not get on Google and say best places to invest in short term rentals and get on somebody's list and buy something in some market you've never heard of before. Because the Internet said it was a good idea.
[00:13:39] Speaker A: Yeah, no, no, definitely not. The Internet said it was a bad idea. But I decided to do something different. That actually that score is significantly higher now I think the last time I checked is like 60 something. So it's gone up. I like to say I contributed to.
[00:13:51] Speaker B: That, but probably so what I'm hearing out of your story is that I, I've said this a million times. I'm going to say it again. We need data. We need all the data companies. But a guy sitting behind a computer looking at spreadsheets cannot replace your local knowledge in a market you want to buy where you have a competitive advantage. And what is a competitive advantage? It's knowledge of the market so you can be successful anywhere, no matter what the websites or the spreadsheets say. If you know what you're doing know the market that you're buying in. Would you say that's correct, Matt?
[00:14:29] Speaker A: Yeah, I think there's realistically, like, two parts to this, right? There's knowing the market, whether you live there or you frequent there. I think just having a good friend that lives there that says this and this isn't enough. You know, looking online to see if it's good isn't enough. You need to have personal experience of that to be successful. But the other part is doing something. And this can be, you know, regardless of what market you're in, whether you're in a accommodation location like I call Des Moines, Iowa, or a vacation destination is being different than everybody else doing things that nobody else is doing. You know, we didn't just open these properties and say, well, they sleep more. So we're filling that void. We open these properties and. And we've optimized these more over this last year especially, too. But creating properties that are like in the vacation destination, you know, kind of properties where they have the big murals and game rooms and arcade stuff and, you know, fire pits and hot tubs and all these things, because nobody else is doing that here right now because they're not, you know, willing to put in the money to do it because they don't think it's going to be successful. So we. We own the market because of that. So creating that experience as well is. Is a big part of that, too. But, yeah, having the education on your market is. Is vital.
[00:15:46] Speaker B: Yeah. Because I don't think that, like, I. I've been to Des Moines one time because our flight to Omaha got rerouted and.
[00:15:54] Speaker A: Congratulations.
[00:15:55] Speaker B: Yeah.
And then to get a rental car, and then the rental car died and it was a blizzard. And that was my very first time going home to meet my husband's parents in Omaha, and it was a mess getting there. But I think that it's important to note here that people listening are probably going to be like, oh, I'm going to go buy in Des Moines. But again, you might be able to find some success, but it won't be the same as what Matt is doing, because this is a market that he knows and lives, and you don't have to live in the market that you're investing. But what I'm trying to impart to listeners here is that it doesn't matter where you invest. If you truly do know the market and then apply that data that you can get on air DNA or price labs or where have you in such a way that you're not taking either thing as gospel. You're kind of marrying your local knowledge, where you said, okay, this has a terrible market score, which I've never looked at in my entire life, but I noticed that nothing sleeps more than eight people. So there is perhaps a need for properties that sleep more than this and then, then kind of taking the data and rolling that in. So I think that's really, really important for people to understand because there's so many services and websites out there now that are like, I'll tell you the exact right place to invest. And I'm like, you never even been like, you, you can't know that just by looking at spreadsheets you can get an idea. But really, it, you have to marry it with your own personal knowledge of markets.
[00:17:21] Speaker A: Yeah, yeah, no, 100%. I mean, is it like in the last, what, two years now are the number of short term rentals that we have in the Des Moines, you know, metro area has over doubled, but yet our income has increased year over year continuously in pretty decent, you know, percentages. So people are trying, you know, maybe investors from out of state, I don't know. But if you look in Des Moines, Iowa, our three properties are still some of the top three properties on page number one of Air DNA or of Airbnb. So, you know, it definitely pays to have that experience of your market for sure, and then, and then to do it right the first time.
[00:17:59] Speaker B: Yeah, yeah. And building up that review base definitely helps stay on page one.
[00:18:03] Speaker A: It does, it does, it does. I think, like the one other advantage to investing local and like, we have bought in a vacation market before. We actually owned a condo down on South Potter island in Texas for a short while. We flipped it just due to the market booming and I think the big migration from the West a couple years ago. But we, we made, we made good, you know, equity on it and we invested in some properties here again. But I think that one of the biggest things that helps us as well is like being local helps us with quality control. So, like, I know what's going on at my properties because I can visit these properties. I typically try and, you know, visit each one every couple of months at minimum. Walking through it, just checking on things, maintaining that, that elevated quality that I think sometimes can get missed if you don't have the right people that you trust in place with the right teams for sure. I mean, I know people can do that in other markets and if they're investing in other places, but that's definitely given us a competitive edge with, you Know, like you mentioned review scores when we have a 4.98 overall with about 450 reviews, which. Which speaks for us being local to it as well and being able to control some of that a little bit better. But. But that, that's helped too, for sure.
[00:19:21] Speaker B: So I'm gonna switch gears on you real quick. So since these are all local, how are you financing these guys? So you can't take advantage of that 10% down vacation home loan that a lot of people do when they're buying out of state and they do plan to use it themselves. Important, important piece, guys. You have to plan to use it yourself. It's not purely an investment. But how are you financing these when they're local to you?
[00:19:44] Speaker A: Yeah, so I actually have conventional loans on every single one of them, except I've got a DSCR loan now and one as well. But I am doing 20% down just. Well, mainly for two reasons. Number one is I like to have a little more equity in the game. We're buying properties that need cosmetic updates anyway, so I'm able to build some sweat equity into there. So that, that helps. But either I have the cash to just put the 20% down, saving through, you know, cash flow from our properties to do so. I mean, when you're buying a property for 160,000, it's easier to save up the 20% down than you're buying with a $500,000 property. So. So that's kind of helpful there. But on the second part of this is trying to be more creative with our financing through doing stuff like home equity line of credit. So on our primary residence, we bought this house that I'm in now back in 2016.
No, not 2016. 20, 2018, 2019, somewhere in there. So we've lived here about six years now. So. And we bought this home for 180,000. And it was just. It was a dive when we moved in. Old farmhouse and we made it into a nicer home. We transformed the kitchen into. Or excuse me, the garage into part of the house. We knocked out walls, did a lot of updating and stuff here. But we built really good equity into it. Where now. Now it's worth about half a million. But we were able to pull out a home equity line of credit on this house that I just recycle into my purchases. So with this last house that we bought, we used this line of credit. I think right now we have about 160, 170k or whatever on the line. But I used it for the down Payment closing costs, renovations and furnishings. I had about $100,000 that I borrowed from that to pay for all of these things with. And my plan will be then so no money out of my own pocket. All of this from this extra line from our heloc. My plan will be in a year or so to do a cash out refinance and pull out as much of that as we can, which is what we did in our last house as well.
[00:21:54] Speaker C: Are you looking for a change?
Well, the Short Term Shop is hiring realtors.
If you live in or want to move to one of the best vacation markets in the United States, we want you to join the team.
We are a small family owned business, but we are one of the biggest real estate teams in the world.
We are looking for new team members.
Please contact
[email protected] careers theshortermshop.com careers if you're looking to buy a beach house, a lake house, a mountain house, a vacation house, a short term rental, a vacation rental, a second home, please contact your friends at the Short term shop. We are a family owned business and we operate in all of the best vacation rental markets in America including the Great Smoky Mountains, the Emerald coast with Destin, Panama City Beach, Orlando, Florida, the Disney Market, Gulf Shores, Blue Ridge, Outer Banks, Carolina Beach, Western North Carolina, Scottsdale, Arizona, Broken Bow, Oklahoma. The list goes on. We are the best in the biz and we want to earn your trust. Please contact us at the short term shop.com Gotcha.
[00:23:30] Speaker B: So what, how do you make sure that you don't over leverage yourself when you're using that HELOC to, to buy other properties?
[00:23:40] Speaker A: How do I make sure I don't? I mean there's a couple things, right? So like first off I try to stay at least, at least 50% equity on my total portfolio versus what I owe. So I mean we have about a $3 million portfolio right now valuation and we owe about 1.3 on our loans. So that helps. I mean that gives me that cushion that it's like, okay, if something did go sideways then I could sell the property and pay off, you know what I need to. So but secondly, you know, like I mentioned, we, we are buying properties that need updating. So like this last house I bought, I bought it for our 225 which is the most expensive rental that we've ever bought.
But, and I know, I'm sure that's laughable for you by I see some of the properties that you have.
[00:24:24] Speaker B: So, but 225, no, no not laughable. Any property that's cash flowing is the property worth.
[00:24:30] Speaker A: Sure. But that is the most expensive property we bought and, but it's in a market where comps are showing about 3 to 3:50. So I think now it's, it's probably worth 325 to 340. And I mean half of that HELOC that we borrowed was in the down payment. So you know, that would come back out of it anyway. But then renovations and furnishings, it's like, well, you know, the renovation costs added to that equity. So if I needed to, because something went sideways on my heloc, I could just sell that property and get it all back right away. So.
[00:25:00] Speaker B: So cool. I, I think that's really smart because I've seen a lot of people that'll like get a huge helock, like 500 and create this kind of house of cards. Like okay, well they're gonna buy three houses with this, but then one of them doesn't perform well and then, and then it just knocks everything down. So I think it's really important to guys. He lives can be like the greatest wealth building tool, but you have to be careful.
[00:25:27] Speaker A: Yeah, yeah, for sure. Yeah. We, I mean, you know, having 160,000 or so, we've never maxed it out and you know like, so our second short term rental property, we had the down payment in cash. So we used our key lock for renovations and furnishings and that property was bought for 160. But then we did a cash out refinance on that one just the beginning of this last year for 300. So I was able to do 70% of the, you know, appraised value which was what, 210. So I got a paycheck for like 75 or 80,000. So I just used that to pay off what I had borrowed on the heloc. So I brought that back down to zero by doing that.
[00:26:08] Speaker B: Awesome. So when is your high season in Des Moines, Iowa, summertime or wintertime?
[00:26:16] Speaker A: It is summertime for sure. Typically May through the end of August is when we see a high season for sure.
[00:26:22] Speaker B: Okay, gotcha. Do you see, is it a, is that a market where you'll still have some bookings in the off season? Or is it a market like, you know, like here at the beach where it's like, no, you will have.
[00:26:33] Speaker A: Yeah, yeah. So November and December, we actually maintained 85% occupancy at our properties, which surprised me. Normally we're like in the 70s or so. I was a little more competitive with Our pricing though, and I think that that helps a lot. But we had, we had some really good months there. January, February have been significantly less, like 60 to 65%. But we do average. I mean, like last year we averaged almost 80% occupancy across our three properties, which, which tells me, especially with our newest property, I needed to price a little bit higher because we were getting full, full calendars right off the bat because I wasn't sure what to expect. But the year before we, we did 70% average across the properties. So. But yeah, so we're pretty happy with that.
[00:27:19] Speaker B: Okay, awesome. And I want to hear about, you know, what, what are the regulations in Des Moines? So do they ever talk about changing anything? Is it in certain zonings that you're allowed to do it? What are your, what, what's your move there?
[00:27:36] Speaker A: Yeah, so I mean, the pro and the con to Des Moines right now is that there are no short term rental regulations.
I, you know, I've talked to three different people within the, the city that, that work, you know, in the rental department. And as far as what they've told me is that all we need to have is just a standard rental certificate, which is the same as a long term rental right now. So once every three years they come in and just check that everything meets rental code. You know, for safety compliances. Your handrails have returns, your smoke alarms and all that are working and you know, stairs and everything else. So. But that's all that there is right now. I have tried to, I guess, build relationships with people who deal with this stuff on, you know, daily basis and have, you know, better contacts within the city as well. And as far as like what we've been told, there's just not really much talk on it right now because it's not an issue. You know, there's not tons and tons of short term rentals just flooding Des Moines residential neighborhoods. So not a lot of people are coming in here. So there's just not really any talk on having stricter regulations at all. But you know, and that, that's, that's like part of the reason, like my wife and I really try to diversify. It's like our long term rentals pay for our living expenses, our short term rentals pay for the reinvesting that we do into our business. So we live on about half of our income and then the rest of it we, we reinvest or use as fun money for vacations and whatever else too. So, so just trying, trying to play it safe. We're Also starting to look in other markets that are still local, different cities outside of just staying in Des Moines, that we could attract different audiences as well too. So to try and, you know, continue diversifying and not just have all of our eggs in one basket just in case something ever did in the future happen.
[00:29:25] Speaker B: Gotcha. I mean, so, you know, it's, it's the best you can do anywhere, really. Like, there's places that are more or less likely to do it, but I mean, at the end of the day when people ask me that question, I'm like, you just have to be okay with the fact that it may, that it's, there's never a 1000% guarantee that something's not going to change.
[00:29:44] Speaker A: So, yeah, I mean, even, even in heavily regulated markets, you know, we've still seen stuff that, you know, has changed. So we just, we never know. So don't put all of your, all of your properties in one market. That's foolish. Diversify. But don't be scared of a market simply because it doesn't have regulations or because it has, have really, you know, heavy regulations. So be smart. Yeah.
[00:30:05] Speaker B: All right, so what, what have I not asked about your story, Matt, that our listeners could benefit from hearing?
[00:30:13] Speaker A: You know, I think like the, the one thing that I really like to tell people is, is that you need to make sure that you're using your weekends and evenings to, to, to build this life. I forget who you like even said this quote, but use your weekends and evenings to build the life you want, not escape the life you have. And like for us, I mean, nine, 10 years ago, back in, well, I guess 2014, so a little over 10 years ago now, time just moving quickly. I was working a dead end job and my wife was pregnant and wanting to be a stay at home mom. And we're like, you know, we can't do this. It's not something we're able to do. We can't make this happen. But it was through trying to be creative. I mean, we house hacked through our first five properties because that, that's what we could afford. I could not afford a 20% down payment on a rental property because that's, that's like the, probably one of the biggest, I think, setbacks that I hear from people is I can't, I can't save up 20% down. I can't do that. I don't have the time, I don't have the money. So like I'm, I'm educating myself and listening to podcasts and hearing people talk about different ways to be creative. And then I hear this guy talk about house hacking, but instead of buying a duplex or threeplex or, you know, triplex or whatever, and moving into one unit and renting out the rest, it's move into a house as a primary residence. Then you don't need 20% down. We actually just needed 3% on a conventional loan. Live in that house for one year as you renovate it, then move out and rent it out and repeat that process. And we, we repeated that process five times in five years. And did it, did it absolutely suck? Yes, it did. We still had a lot of fun and it, it grew us as a young couple having, you know, young children as well, living in construction zones. But, but we wouldn't trade that for anything. And it's because of those years of difficulty that we were able to get to this point where I could eventually leave my job, you know, and that was something that we never, you know, could have even imagined. But it's because we spent late nights, 11:00pm, you know, doing a kitchen backsplash together because somebody me mixed up too much mortar and we didn't want it to go bad. So we're, we're doing this kitchen together and learning these skills together that we were able to accomplish this. So, so don't tell yourself that you can't do it. It's not that you can't, it's because. It's simply because you don't want to create the time and want to figure out ways to make it happen for yourself.
[00:32:38] Speaker B: Because people don't like to be uncomfortable. They say they can't when really it's. Well, that would make me uncomfortable for a period of time and I'm not willing to do that.
[00:32:46] Speaker A: Yep, yep, exactly.
[00:32:49] Speaker B: Very good advice. So we ask these three questions at the end of every show to every guest. First question, what advice would you give 20 year old Matt?
[00:32:59] Speaker A: Be more bold. You know, don't be, don't be afraid to take bigger risks, bigger chances on things. I look back at some of what I did and I, you know, I could have accelerated, we could have accelerated ourselves a lot faster by taking some bigger chances to dive into some of this stuff. I mean, the, the, the best time to buy real estate is always now, but it was a little bit easier back then and we just chose to take the slow route, take the easy route, take the route that we understood.
And I refinanced, I think, four, five properties in 2021, 2022 at 2.65 rates. And we chose to not do cash out refinances, instead just do standard refinances to lower our mortgage payment where we could have had potentially $200,000 of free money at 2.65% that we could have used to invest in other properties with. But instead we were nervous and we chose not to do that. So be more bold. I wish we would have pushed a little bit harder, a little bit faster instead of the slow and steady, but it worked out. So I'm not upset about it.
[00:34:14] Speaker B: Yeah, the best time to buy real estate was always yesterday. That actually like my favorite thing that people like to yell at me about on TikTok is, well, it was a different time when you started buying. It was, yes, we were extremely blessed in the time that we decided to get started. But there were still like on Tick Tock then telling us, yeah, late. It had to be, had to be three years ago or whatever because we were buying long terms in Nashville and I think it was like 2013. They're like had to be 2010, you're done. If it was after 2010, there's no more money left in Nashville.
[00:34:43] Speaker A: Yeah.
[00:34:44] Speaker B: And yeah, so there's always going to be somebody telling you why, why you were able to do it and they can't. And it's never because they're not willing to, so.
[00:34:52] Speaker A: Exactly. Yeah. So yeah, I mean it's, it was, yeah, same thing. It's like back then everybody's just, oh man, like best time to buy was, was 2009, you know, 2008, like right after the crash and you could pick stuff up for so cheap. And I know a lot of people that did and made a lot of wealth doing that. But you know, it's, it's not, it's. I don't think it's ever going to get better. So in five, ten years from now, people are going to look back at now and think that that was the best time to buy too. So yeah, start, just start buying now and stop waiting.
[00:35:21] Speaker B: I really do. And I know people say, oh, she's a real estate agent so she's going to say anytime is the best time to buy. But I really do think in 10 years from now people are going to look back at 2023 through 25 the same way that we look at 2008 now. Like I just closed today on a house that started at asking price 1.25 for 815.
So the deals are out there and the reason I was able to do that was because it's, it's a great House. But it sat on the market for six months because there's no buyer competition because the interest rates completely stopped the real estate market. So those, those kinds of deals are out there. Are the rates shitty now? Yeah, but they, you know, if you can find a deal that makes sense at the rates they are now, they are going to go down. Are they going to go down to 3%? No, but they will go down to 6, which is, you know, the difference in a. I don't know exactly what the, the payment difference would be, but, you know, you get where I'm going with that. So the deals are out there.
[00:36:20] Speaker A: Yeah. Yep. 100. Yeah. I, I, you know, everybody that asks me, it's like, man, like, well, I'm just gonna wait for the rate to drop a little bit more so I can, you know, get a, get a cheaper payment. It's like your payment's gonna be more, because then everybody else that's waiting is gonna also be looking to buy at that time. So the buyer pool is gonna be 10 times what it is now. You can't refinance a lower, you know, purchase price, but you can refinance a lower interest rate. So buy now, refinance later.
[00:36:48] Speaker B: Yeah, you can pick one. Low rates, low prices, or low competition. One of those three.
[00:36:54] Speaker A: Yeah.
[00:36:55] Speaker B: Anyway, what advice would you give a new investor who's looking to get started today?
[00:37:01] Speaker A: Yeah, so I think, you know, I actually, I think I accidentally used this quote early, but I'm gonna, I'm gonna say it again. Use your weekends and evenings to build the life you escape, the life you have. I will keep hounding this in because it is, it is so important. Everybody wants to, you know, use their time. You know, and you hear time and time again, it's like, oh, like, work was so tough. And, you know, I just want to go home and relax. I want to watch the game. I want to go out with friends on the weekends. I want to go on these nicer vacations because I deserve it now. And, and in all of these things, and it's just like, it's not bad to reward yourself every now and then for, you know, with, with little things, but you don't have to spend a lot of money doing that, and you don't need to spend tons of time doing that too. I mean, you have from 6pm until, until 10pm and you have all, all day, you know, Saturday and Sunday. And yet you spend this time. I mean, like, people ask me, like, I'm not a sports guy. I'm not. And I think the main reason why is because of our real estate. Like, I just, I didn't want to, like, I hate to say it, wasting time, because I know that's sensitive for, for some people, but I didn't want to spend my time, I didn't want to spend my time sitting in rooting for somebody else. I wanted to spend my time rooting for my wife and I instead to accomplish our goals. And by doing that meant sacrificing some of those things temporarily so that way we could do that. So temporary sacrifice could mean, you know, lifelong victory over the rat race, over the nine to five and, and having the financial freedom that you, you know, that you want. So.
[00:38:33] Speaker B: All right, last question. What's your favorite book that's impacted your mindset?
[00:38:38] Speaker A: Yeah, I'm not, I'm not a huge reader, but Rich Dad, Poor dad was probably the biggest one for me. Robert Kiyosaki. There's a quote in the book which I have written down here as well. It's rich people acquire assets. The poor and middle class acquire liabilities that they think are assets. You know, you see, just like society teaching us that you need to spend, you know, 40, 50, 60K on college and then graduate with this debt. You see society telling you when you get a better job, you should drive a nicer car, have a $20,000 car or whatever, spend $10,000 on a wedding, all of this stuff, and just accumulate these things. This college, I think is seen as an asset for people, but the reality is it's a liability for a much higher percentage of people. Not to say that it's not important in that you couldn't have a high paying job coming out of college, but most people don't use it for that. So really figure out, you know, what your goals are with that before you just decide to go to college. I went to college to be a youth pastor and I'm very grateful for my education and the relationships that I got through that school. I did graduate debt free because I worked my butt off during that time. I worked full time while I was doing double major, but I never ended up using that degree. And I think a lot of people are in a situation where they don't use their degree and they, they have massive amounts of debt though too. So. So yeah, you know, use, use your extra money to invest and then use what's left over to pay your bills. Don't just spend money thinking that you're buying assets, you know, like a vehicle, because I drove a 2000 Toyota Avalon with 250,000 miles on it for a couple of years that I paid like $2,500 cash for a Toyota Matrix that had 280k miles. That was a 2006 that I bought for like 2 grand. So I did this because my goals were different than other people my age.
[00:40:33] Speaker B: Those Toyotas really will go forever.
[00:40:36] Speaker A: They will. They will. Yeah. Yeah. Did they look super sweet and sound amazing? No. Did I still put aftermarket Apple carplay displays in them? Of course. But, you know, but it was, it was worth it. It was worth it. Time. So, you know, we're still a Honda family. Like we drive. I've got a pilot and an odyssey, so we love them.
[00:40:54] Speaker B: But yeah, they last forever.
[00:40:57] Speaker A: That purple Jeep, though. I do, I do like that. So we. Oh, thank you.
[00:41:00] Speaker B: That's. It's my second purple Jeep. I've been driving a purple Jeep since 2017. That was, I got a 2017. It was just like the most basic model that I, I was, I could barely afford it at the time, but the car that I had, I could not drive clients around in.
[00:41:17] Speaker A: Yeah.
[00:41:18] Speaker B: And then I was like, well, I'm never getting rid of this purple Jeep because they're never going to make purple again. And then they made it again in 22 and I was like, okay, I'm going to, I will get a new purple Jeep now.
[00:41:27] Speaker A: There you go. There you go. Yeah, we want it. We want a yellow one someday. We went on a vacation to Daytona beach as like a baby moon with our third child and we rented a yellow wrangler and we're like, we need to have one of these someday. But we have four kids right now, so unless, yeah, they don't make a wrangler that has, you know, third row, then it's just not going to happen for now. So. Someday, though.
[00:41:49] Speaker B: Yeah, I had a yellow one too. That was my first car, was a 2001 yellow Wrangler and it was really cute.
[00:41:58] Speaker A: So.
[00:41:58] Speaker B: But yeah, I mean, two kids don't really even fit very well and we've got, I've got the unlimited, but still. Anyway, well, Matt, thank you so much for coming on. If our listeners want to find you and follow you and do all that. How do they do that?
[00:42:11] Speaker A: Yeah, so I post a lot of interesting, sometimes funny sometimes, you know, people don't like the stuff that I post. But, but it's, it's, it's fun. We, we enjoy it. We do stuff with our Airbnbs and long term rentals and I dropped some knowledge here and there too. But rental cash flow is my tag. So at Rental Cash Flow on TikTok Instagram, We've got a YouTube channel now as well. I'll be doing some vlogging there, so. Yeah, so Rental Cash Flow or Matt Krueger. You'll find me either way.
[00:42:40] Speaker B: All right. Thank you very much for coming on. We really appreciate it. Great episode.
[00:42:44] Speaker A: Thanks, Avery. This was fun.
