Join us on Crushing it in Real Estate Episode where we interview Arthur Wang, a San Diego, CA real estate investor breaking down the hurdles to out of state investing in Columbus, OH. Arthur dives deep into his insights on getting started with out of state investing and how it can help you succeed.
[0:01] Intro: Hey everyone, and welcome to another episode of Crushing Real Estate with Bryan Pham, where we interview real estate professionals around the industry. If you enjoy this episode, please subscribe to the show and leave a very positive review. We released an episode every single Sunday, so stay tuned. Enjoy.
[0:19] Bryan: Hey guys, welcome to Episode One of Crushing Real Estate, we’re here to interview my friend Arthur. Arthur is a San Diego real estate investor, who’s currently looking and currently investing in the Columbus area. Hey Arthur, can you introduce yourself really quick?
[0:37] Arthur: Yeah, no, thanks for having me on your podcast, Bryan, really excited to be here to be your first guest. As you know, we already mentioned, you know, in, you know, San Diego now, I resident here and I am actually a rental property investor for an out of state, as you mentioned in Columbus, Ohio. But yeah, very, very excited to be here to talk about my journey up to this point and what I’ve been able to accomplish in a way, the internal opportunity and the future.
[1:09] Bryan: Cool. Arthur, to start the podcast, I’m going to ask you a few questions to get started. Can you tell us how you got into real estate and what are some of your challenges when you first began?
[1:24] Arthur: Well, good question. It is actually, funny thing is that I started my real estate investing or just real estate attorney in general, actually coming out of school during the recession. My first job was actually in Multifamily in the property management role, with emphasis, with leading teams to leasing multi families. Did that for several years, very challenging, you know, during those times, recessions, you know, met a lot of folks that kind of lost estates from the, you know, the crash, so it definitely was a very kind of hard knock, kind of lessons that I learned right off the bat in the reality of and also the power more importantly in real estate and compounding multifamily. That’s kind of how I started.
[2:17] Bryan: Okay. Wow. I mean, what were some of the challenges that you faced when you first began and how did you overcome them?
[2:25] Arthur: I think my first major challenge, starting off is just understanding of the real estate cycle, you know, the economics of it. You know, for me, I was very boots on the ground with sales, so the conversations I had were very centered around, you know, why people were choosing specific properties, why they were, you know, school crime, just all the macro and micro trends that they were following. So, learning all that information was kind of overwhelming, this kind of, you know, fire hose, and just starting on and just kind of starting on you just learn from it. That was definitely one of the most challenges, the breath of information.
[3:09] Bryan: How long ago did you start out your real estate career?
[3:12] Arthur: Since 2011 is when I first started and then I was in the Multifamily. I think I started been over 550 units start for Lisa and managing and then I think by a time three years in, basically was over 2200 units in Irvine, Orange County, California to be specific. And I subsequently kind of went into commercial real estate operations, got my real estate license, just kind of learning that, kind of run with the world and just kind of residential commercial kind of interact with each other. So, a few years ago, I started.
[3:53] Bryan: Nice, there was a crazy journey.
[3:55] Arthur: It’s been fun.
[3:57] Bryan: So, can you talk a little bit about the deals that you’ve been a part of since you started your real estate journey?
[4:03] Arthur: Kind of, I would say if I speak to one of my more recent ones, which would have been Columbus Ohio, you know, for me, been very local here and, you know, state side of California, but, you know, I wanted to get into kind of the Midwest because, you know, there’s always rumors or not rumors, but news that there’s better cash flow opportunity out there, barriers of entry is much, much lower. Our most recent deal was actually just kind of getting my foot in the door with Columbus, Ohio with a duplex. That closed probably March of this past year. They were really recent, so that was my most recent deal but I’m very actively looking. I had a couple of bites out there for a commercial like five plus multi families, but those deals didn’t actually materialize. But this was my most recent one.
[4:57] Bryan: What’s your criteria for looking for houses in Columbus, like are you looking for B class, C class, A class, what kind of cash on cash return or ROI you’re looking at?
[5:07] Arthur: Numbers really matter to me. I don’t particularly with discount any A, B or C specifically, but you know being that I can have a larger economy of scale, I’m actually targeting probably the low Bs, to the mid high Cs, preferably, mid Cs, I want to see that there’s an actual path of progression in everything, there is some meat on the bone so that those are definitely some things that I look at as a criteria, you know, what’s the upside? From a number’s perspective, cash on cash, at least 12, 15% is what I’m– It is a pretty aggressive number, but it is obtainable number in the Midwest if you search correctly. Anything else lower than, you know, at that point, we do a lot more due diligence to figure out why that number is lower but that’s the cash on cash. Other numbers cap rate, I know for two to four units, cap rates don’t really apply, but it’s a nice to know. And then of course, you know, your IRR just kind of understanding, you know what my exit strategy is, but always first and foremost.
[6:20] Bryan: Okay, if you were to give advice with someone that’s just starting out investing in the Midwest, how would they go about finding your deals?
[6:29] Arthur: Good question. I know technology is very accessible nowadays. So, you can get a lot of information. But at the end of the day, you know, real estate is still first and foremost, or you know, relationship business and the best deals are the ones that don’t necessarily hit MLS. So, my best advice is, you know, get out there, you know, find a time out of your schedule and just book a trip and, and start meeting realtors, you know, start phoning ahead, you know, get on your forums, start introducing yourself. On Facebook asks, hey, do you have anybody who have a referral to a realtor or something like that? You know, you’re going to need those relationships to really build your team, especially if you’re by yourself, getting out there in person is my best advice.
[7:13] Bryan: Yeah, that’s really good advice to get started. What would you say, I mean, in terms of like, how do you keep yourself motivated from day to day, keep yourself going, you know, obviously, like real estate, it’s a very, like, patient game where, you know, you can go months and some, perhaps years without buying a deal that doesn’t fit your criteria? I know a lot of people who just beyond the real estate career get really discouraged when, you know, when they can’t find anything that fits their criteria and that they could buy or want to buy. And I know for a fact like, it’s never a good idea to rush into a deal but I know a lot of people, you know, they always get discouraged so I just want to know like, how do you keep yourself motivated going forward?
[8:01] Arthur: How do you stay motivated? I don’t think there’s like, one way, I think there’s many techniques. I highly recommend having a why, understand why you’re doing something, attaching all your actions, your goals to why, that way, you know, when things are hard, when things come easy, you don’t 08:23 [inaudible]. My why is for financial independence and having the freedom what I get to do with my time now and not have to feel like I have to override certain priorities because, you know, a work obligation. A why is very important. Other ways to stay motivated is, you know, it’s, you have to make it fun, you know, mostly it is a slow man’s game, if you get rich, epic game. And changing the mentality, you know, mentality is teaching yourself, you know, patience. It is a marathon, it’s not a sprint, and you’re going to win some, you’re going to lose some and having the kind of rigor in just understanding that this is kind of the 09:11 [inaudible], you will enjoy your journey much more. This isn’t something where’s the flash in the pan, investing, you know? If that was the case, I wouldn’t be in, you know, just not the same.
[9:22] Bryan: Yeah, that’s nice. What are your real estate goals for next year, next five years?
[9:30] Arthur: So, I definitely want to try to keep my bare minimum of at least one to two deals a year. You know, I’m not isolating myself to just, you know, one or two markets, I’m definitely always looking around. One or two would be my ideal pace. Of course, the more I kind of get more into the portfolio then I can exponentially, kind of, bring up. There’s a lot of, you know, changes right now in our country so just kind of keeping an eye on those and how that affects, you know, just how real estate looks and market. By the next five years, I definitely want to get, I really want to reach, you know, 100 doors, and be able to not only do that for my own portfolio, but also be able to help, you know, those close to me and those I might be mentoring, goals as well. So, it’s not just my personal portfolio but–.
[10:24] Bryan: Okay. So, are you currently working in a mastermind group? Are you mentoring others right now, like, how are you helping to spread your knowledge to people around you?
[10:33] Arthur: That’s a good question. So, you know, I am part of a weekly mastermind, you know, every week on Sunday, Sunday evenings. I do also participate in another mastermind where there are other investors or investors to be, that might have just started their journey and have a lot of questions. And, you know, of course, there’s family, you know, family will kind of, know like, hey, like, what was he been doing? Oh, 10:59 [inaudible]. So, you know, I do have, you know, folks that are texting me, calling me, regular schedule like FaceTime but those are just kind of the different people. So, for a lot of family and friends, but I do actually have a real estate meetup that I am going to be hosting in the area and definitely, there’s definitely opportunity for a lot of the out of state investors 11:27 [inaudible]. So, that’s definitely, I’m going to be posting that up on meetup.com, my sharing on Facebook and then I’ll always reach out to you ever so popular– Definitely, I want to turn around the community together for that one.
[11:48] Bryan: Sounds good. I mean, the entire meeting notes, that’s very bottom about your meetups in San Diego. So, definitely anyone around the surrounding area can come by and take a look and chat real estate with you?
[12:02] Arthur: That’d be great. That’d be exciting.
[12:05] Bryan: Yeah, let’s see. Can you talk a little bit about more, I mean going back and talk a little bit more about your rentals? Like, what kind of issues have you face so far, have you faced any property management issues, have you faced any tenant issues? I mean, have you rehab your place? I mean, what kind of work went into that Columbus deal from like, let’s start from the very beginning. You kind of walk us through like the buying situation, talking to the realtors, dealing with the lenders, what kind of percentage mortgage we should expect? Was it vacant, was it not vacant? How did you screen your property manager and you know; how fast did you start cash flowing?
[12:49] Arthur: Yeah, no, definitely the whole journey was–. I think this listing, I think came up like late evening, pacific standard time and I got a text from the realtor that I actually met when flew out to Columbus and met first and foremost face to face and you know got a text in following a listing that came up and I ran through my analysis, you know, number crunch and kind of, went through it, just, you know it’s like, hey, you know, try and thrown off out there, let’s go ahead and let’s just put it in and see what is going on. This is probably one of the smoother deals that kind of went through luckily the duplex was vacant and it so happens that the owner had a portfolio, cutting the mix was predominantly single family so that’s just 1 out of 12 properties he and his wife owned. They just kind of wanted it off shelf and it wasn’t a part that I would considers the neighborhood didn’t have doesn’t quite have the full infrastructure that it could but it’s like not far, maybe 15, 20 minutes from downtown. But it was a duplex, it was vacant, I think it was built in 58 if I’m not mistaken, two stories, two bed, one bath and I think the ask was only like 84,900. Well, it was definitely very doable for anybody that is just getting started in the real estate. So, it was a very low hanging type of deal. It was like, hey, why not? Let’s just special promo for out there. Well, you know, I’m kind of learning the rest of Columbus, the bigger deals, just kind of keep things going, right. But the deal, you know, pretty straightforward, not a lot of folks that were putting offers in were coming from my investing background. They were just trying to buy stuff. So, luckily for me, you know, having a little bit more experience and working with an experienced realtor, such as Trent, he definitely was able to help put out a compelling offer, we won the bid, you know, first try. The closing process is very quick, you know, because I understand kind of like the closing process, just your standard 30 days financing, that was already all lined up. Maybe it was, you know, solid for investment piece, you know, 15:15 [inaudible]. And you know, what I think would be the winning offer was just simply just removing some of their contingencies that you would normally have, you know, from appraisal, finance, all that stuff was already there. But inspection was also, I sped up the inspection I think like within three to five days, rather than your standard five to seven days. And then, you know, remedy, I just kept it also very short for response time and for those of us, much of the details that I remember from the offer, but that definitely kind of helped put it. Once everything closed while that was happening, I’ll have, you know, the realtor inspector kind of me running the rounds and on the upside, on the back end, that was really interviewing referrals for management that I haven’t met with yet and then comparing it to the ones that every or any of the offers in the field coming up and then I’m going with the one that was referred because you know, I kind of want to make sure that the team want to build out there have experience working with each other. But as far as that goes, the screening process pretty straightforward you know, for me kind of, again back, my real estate journey started was in property management, I have my real estate license, so I do have some ideas that –.
[16:47] Bryan: So, what kind of questions did you ask your property manager? Can you give us like three or four?
[16:51] Arthur: Yeah, so like one of the questions you know, just your basics, like, what are your monthly fee? Like, how would you handle, if it came, that was kind of a big one, like if it doesn’t pay on time, like how would you handle from–? I’m very process oriented, so I want to know, day one, day two, day three, if day three, the rent hasn’t been paid, there’s that one to three day pay quits go out and wants to be they paid with no rent, was the efficient process look like? How are you going to handle it? So, that was one thing. The second one is, you know, what kind of maintenance do you actually cover? When you get those wrong, what is it, how do you work in your process? Who’s on your team? Do you have an in-house maintenance person? How many vendors do you have connections to for electrician or your license, plumbers, etc., etc., etc.? So, basically, I’m trying to understand the whole contracting, right. Those are really important to ask about that and understand what their reach is. And then number three, convenience, what’s your communication going to be to me? I’m out of state. When do I now, my financials, do you actually offer any reports? Do you show me what expenses, my P&L statement? You know, I want to, I’m very numbers oriented, so I want to know very quickly how I did for that month, and what’s taking away from my cash flow? And so, those are some of the things and then lastly, I find out, okay, we have two vacant units, what is your marketing plan? How do you market, what platforms do you use? Do you have an agent in house, or if not, then what, you know, real estate agents or realtors do you have or team of people to actually make sure that the advertising goes out? What kind of rates can I get? So, these are some of the big questions that I try to understand, it’s just basically how are they going to help me with the property so that they can get paid, and then I can go and buy more properties and then just continue the cycle. So, it’s getting those kinds of systems in place and understanding of how, where are my breakdowns. So, those are some basic questions I always ask.
[19:02] Bryan: Okay, yeah, that’s really good for someone, you know, investing outside the Midwest to know what kind of questions to ask their property manager. You know, for a fact like no property manager, it’s very vital to your portfolio, in terms of investing out of state, so definitely asked a question that you asked, and it’s very clear to help someone get started investing in the Midwest or anywhere out of state. Can you talk a little bit about your personal growth since your first deal? How have you changed since you made that first move? And what would, have you done differently, if you can start over again?
[19:48] Arthur: I think my biggest personal growth was, once the deal was done, I realized it wasn’t that scary. I think that aha moment, when I had it, I was like, you should have just started sooner.
[20:06] Bryan: What was going through your mind as soon as you went out on contract?
[20:12] Arthur: You know, I think basically when I first started, it was just always like all the what ifs, what if this happens, what if that happens? Oh my gosh, like if this happens and how am I going to, you know, be able to support this? And there was a lot of just fear and I would say there might have been almost unhealthy amount of fear, love and just, quite frankly just paranoid of all the things that could go wrong, not to say that things won’t go wrong but it was more so creating problems when there were none and even so I wasn’t trying to actively create solutions for those problems I created. So, basically all the problems in my head, just kind of, just overwhelm me and I just never took action. There’s any advice is that, you know, if you’re not going to take action, just decide you’re not going to take action, but like, if you’re going to be analysis paralysis or just like overwhelmed to the point where you can make a good choice, willing to do something or not, you’re in the middle, that’s probably I would say, the worst place, you kind of came to, just like, you know, understand why you’re making a decision, you know, whether you decide to do it, or you decide not to, like, stay stick to it. But make sure when you make a decision that you did that the work that you do, and why you did one or the other. That was my personal growth, having the confidence to do that, to back it up. So–.
[21:41] Bryan: Yeah, it’s really good. So, you know, I mean, if you were to, I mean, redo it, you would’ve act more, you know, fearlessly and you would’ve started sooner?
[21:56] Arthur: Oh, absolutely. You know, I look back and just kind of said, you know, you let a lot of your own emotions get in front of the logic of an opportunity that was right in front of me, you know? If I were to go back, I definitely would have, you know, done a lot more homework. I probably was, you know, definitely have put myself out there more and actually, you know, leverage the network that I had back then from, you know, when I first started in real estate and really asking those questions, like, hey, how did you do it or hey, what did you do differently? And kind of find a way to kind of understand, who the kind of more experienced people were, and whether, you know, there are a lot of mentors out there. But, you know, for me, I think if I were to go back, I would have done a lot more homework at the bare minimum. So, to kind of put my stuff out there.
[22:56] Bryan: Okay, those are all good advice. Let’s talk, as we’re near the end of the podcast, I mean, I just want to know a little bit more about your day to day, I mean, like, know what you do to strengthen your knowledge like, do you spend like some amount of time on different websites looking at market grow for, you know, do you read books? What kind of books do you read or how do you strengthen that real estate knowledge that you currently have?
[23:30] Arthur: I immerse myself with it every single day. When I say immerse myself, I mean, every, every minute that I can cram something real estate related or just some, you know, self-growth or just anything to better myself and improve, I try to cram any waking minute possible. You know, I have a lot of my searches set up on my phone, you know, a lot of like your Redfin, your Zillow, or Trulia, my email inbox is just full of different realtors from different cities and space that has set up criteria, as far as like what I’m looking for a property and multifamily that’s constantly coming through so I’m constantly crunching numbers, whether it be my head or you know on computer. Podcast is huge, you know, I definitely know a big proponent, bigger pockets, that’s definitely a huge inspiration and constant knowledge source for me, just regular people that want to do something different with their life. YouTube is huge, you know, there’s definitely a huge platform to kind of share, this podcast is, you know, no different, what else? Just connecting with local, you know, real estate investors and even those from afar, talking shop all the time, that’s just kind of my passion, it’s just talking shop and trying to analyze and make a decision so you know, surrounding myself at the right people is definitely there. But as far as all those mediums, I definitely would say, you know, going back to basics of just books, you can be, you know, from the bigger pockets books that I have, the PR methods, just even the rental property for investors just starting off, to even the compound effect with Darren Hardy like that’s a very, very, very powerful book to me to just consistently doing everything that I mentioned each and every single day, though, because I know those things are 25:35 [inaudible].
[25:38] Bryan: Okay, well, let’s get Arthur. Yeah, I mean, that must include our podcast. Thank you for your time, for taking the time to have yourself get interviewed on me. Is there any way that you know people in the podcast listening can reach out to you and talk a little bit more, can reach out to you like, you know social media or email like you find the information?
[26:04] Arthur: Yeah, absolutely. So, you can find me on Facebook, I am Art Wang, ART space WANG. Otherwise you can definitely reach out to me by email is ArthurWang.RE@gmail.com and that’s ArthurWang.RE@gmail.com.
[26:24] Bryan: Great, thank you for your time, Arthur. I appreciate it.
[26:27] Arthur: Thanks, Bryan.