Welcome to another exciting episode of Money Talk with Tiff! Today, Tiffany Grant brings on a very special guest, Chad Carson, the acclaimed author of "The Small and Mighty Real Estate Investor." Chad and Tiffany dive deep into a fresh perspective on real estate investing, challenging the popular notion that bigger is always better.

Chad shares his unique philosophy on how starting small in real estate can lead to more flexibility, freedom, and a happier, balanced life. They discuss practical strategies like house hacking, the distinctions between short-term and long-term rentals, and tips for finding good tenants.

Chad also offers valuable insights on maintaining properties and dealing with common landlord challenges. Whether you're a seasoned investor or just starting, this episode is packed with actionable advice to help you succeed in the real estate market.

Be sure to listen in as we explore how to build a "small and mighty" real estate empire!

About Our Guest

Chad Carson (aka Coach Carson) is an author, investor, podcaster, and life-long learner who used real estate investing to reach financial independence in his 30s. His current passion is teaching other investors how to build a small and mighty rental property business so they can get out of the financial grind and do more of what matters.

Based in Clemson, South Carolina, Chad and his family have also lived abroad in other countries, including 17 months in Cuenca, Ecuador and 12 months in Granada, Spain. When not writing about himself in 3rd person, vying for the silliest dad award, or playing pick-up basketball, Chad enjoys volunteering with a local non-profit he co-founded to create a network of walking and bike paths in his hometown.

Connect with Chad

Get the book: The Small and Mighty Real Estate Investor (affiliate link)

Website: Coach Carson

Podcast: Real Estate Investing with Coach Carson

YouTube: Coach Carson on YouTube

Instagram: @coachcarson1

Facebook: Coach Carson on Facebook

Connect with Tiffany

Website: https://www.moneytalkwitht.com

Facebook: Money Talk With Tiff

Twitter: @moneytalkwitht

Instagram: @moneytalkwitht

LinkedIn: Tiffany Grant

YouTube: Money Talk With Tiff

Pinterest: @moneytalkwitht

TikTok: @moneytalkwitht

Timestamps

[00:00] Introduction to Chad Carson and his book "The Small and Mighty Real Estate Investor."

[03:15] The philosophy of being a small and mighty real estate investor.

[06:45] House hacking as a strategy to start real estate investing.

[11:30] Differences between short-term and long-term rentals.

[16:20] Transitioning your lived-in house to a rental property.

[20:10] The realities of being a landlord and managing tenants.

[25:00] Tips for finding good tenants and maintaining your property.

[30:45] Where to find more information about Chad Carson and his work.

Key Topics Covered

1. Small and Mighty Real Estate Investing:

Chad explains his approach to real estate investing that focuses on achieving personal goals and financial freedom without the need to scale massively.

The benefits of smaller, manageable investments that align with one's lifestyle and aspirations.

2. House Hacking:

Introduction to house hacking as a beginner-friendly strategy.

Examples of how to turn your primary residence into an investment property.

3. Rental Strategies:

Comparison between short-term rentals (like Airbnb) and long-term rentals.

Considerations for choosing the right rental strategy based on your lifestyle and investment goals.

4. Landlord Insights:

Common fears and misconceptions about being a landlord.

Practical tips for managing properties and tenants effectively.

5. Finding Good Tenants:

Strategies for attracting and screening reliable tenants.

The importance of maintaining your property to attract quality renters.

Support this Podcast

Copyright 2024 Tiffany Grant

Intro/Outro: You know what it is. That's right. It's time to talk

money with your money nerd and financial coach.

Now tighten those purse strings and open those

ears. It's the money talk with Tiff. Uh,

podcast.

Hey, everyone. I am so excited because I have Chad Carson on

the line. Now, if the name sounds somewhat

familiar, um, he is the author of the small and

mighty real estate investor, and we met at

Fincon and I was like, oh, Chad, you should come on

the show and talk about this because so many people are interested in

real estate investing, and we finally made it happen. So,

hey, Chad, how are you?

I am doing great. I'm so good to be here. Thank you for having me.

Yes, thank you so much for coming. So let's just hop right

in when I say small and mighty real

estate investor. Now, we've talked about real estate

investing probably ad nauseam on the

podcast, but I feel like you have a

unique point of view. So what do you mean by small and

mighty real estate investing?

Well, I'll tell a quick story to explain this because I feel like

in the real estate space, particularly if you look online, like

Instagram, YouTube, that kind of thing, there's almost a division

between this one camp that says you should go big

and that being successful in real estate investing, and really

any business is the person who keeps climbing this

ladder. You get bigger. You go from a house to a duplex, and then

eventually you own apartments, then you have 1000 units.

And if you're like a starting investor or somebody's like, I don't have

that big of ambitions, it's almost like, wow, you're not

successful because you only want to have one property

or three properties or ten properties. And so

the small mighty investor is a different philosophy. The

philosophy says that success means

you're accomplishing whatever it is that matters to you in your life,

which is, you know, money's a tool. Real estate investing is a

tool. And what I found is that actually simpler

and smaller actually achieves more

flexibility, more freedom, allows you to travel, allows you

to be with your family, allows you to do things that matter in your

community. So I like small and mighty

investor investing. Uh, and I like to push back on that,

go big ten, x. That's the best thing, and say, no,

this is just fine. There's lots of people who are very

happy who could do just fine with just a couple units if

they wanted to.

And, you know, I appreciate that because, you know,

being on Twitter, um, well, x, formerly

known as Twitter, uh, there's a lot of real estate people

on there, and that's what you hear. They're like,

you know, you get one door, then you get three doors, and

ten and 20, so on and so forth. But I

know that there's a lot of people that don't even enjoy being a

landlord or don't want to be a landlord. So

when we're thinking about being a small and mighty investor,

what does that look like? How would we get started? Um,

and then once we get started, how do you

scale if it's not getting more doors?

Yeah. So, getting started. The beautiful thing about real estate

investing is that the main concept is sort of

intuitive. We've all lived in an apartment, a house.

We live somewhere, and so we get what it

means to have a good neighborhood or a place that's good place to

live. We. We kind of get what a nice house is to live in

or a nice apartment. So getting started, to me, like,

my favorite way, is something called house hacking,

where you live at a. You live in a property,

and you turn the house that you live in, or the duplex that you

live in, you turn that into an investment somehow.

And I'll give you a couple of examples of how you could do that. When I

was. When I was 24 years old, when I was first

starting, um, I bought a fourplex,

meaning this is a one building, has one roof, and

has four apartments in the four in this building.

And I moved into one unit, fixed it up, and

I rented out the other three units. And I happen to live in a college

town, so we have a. We have more of those small, kind of multi unit

properties. And so I lived in one unit, and I

rented the other units out, and that basically paid for all my

living expenses while I lived in that

fourplex. So that was cool. That was

great. That's kind of a classic house hack. But I think a

more common house hack is to take, like, a single

family house, and you move into the house, and maybe

you don't rent it to anybody else at all. You live in the three bedroom house,

or maybe you buy a house that has, like, a basement apartment

or a garage apartment. They call those, uh, accessory dwelling

units now adus. So maybe you can get a little bit of

income while you're living there, renting it to somebody else. But let's say

you live there for two or three years, and you decide to move, or

you don't want to move up to a bigger house. You just keep that

house as a rental property instead of

selling it, like a lot of people do. And that

turns into your first rental property, and it's a very natural way

to do it. The financing's a lot easier to do it that way.

So I like doing one of those where you either kind of rent the place

out to other people while you live there or

you live there for a while and then instead of selling

it, keep it as a rental. And you could do that two or three times,

and that could get you two or three rentals, and maybe that's all you need.

And if you wanted to scale bigger, we could talk about how to

get bigger from there, but that would give you a really good

foundation.

Gotcha. Gotcha. Now, when you say rent it out, are you

referring to, like, short term rentals? Long

term rentals? Like, where does, where does all of that stuff

fit in? And also, what does that mean? Because some people may be

listening and don't know what short, medium, or long

term are.

Yeah, I mean, short term rental. If people heard of Airbnb

or vacation rental by owner, it's a, it's a pretty cool

strategy because if done well, and there's some, there's

some caveats to that. There's some, some harder things about it. It

can generally get more rent than you could doing

a long term rental. So just to give you a real example, like

in my town in Clemson, South Carolina, maybe I could rent

a long term rental to somebody who's going to stay there for, you know, a year or

two or three, maybe for $1,500 or 1800

bucks. Uh. Uh. If I did the short term rental with

that same property, then I could probably get

$150 to $200 per night. And

it depends on how often I keep it full. But

very typically, I could probably get three thousand bucks to four thousand

bucks per month for that same rental, that I could

get $1,500 in rent for a long term

rental. Now, I say there's a caveat there because there's also

expenses. Like if you do an Airbnb, you've got to pay for the

utilities, you have to have turnover. It's not always going to be

full. So there's a lot. It's more of a job. When you

do an Airbnb, you can think about, like running a hotel. It's like

a little mini hotel. So that, that's a challenge.

It's not. You can solve that. There's systems and processes and

technology, but you need to think about it more like a business

than really, uh, kind of more of a semi passive

investment. And then you also have to deal with some more like

some cities and towns have banned Airbnb

altogether. So you really have to be careful

about which properties you buy, making sure the zoning

allows it, making sure there's no rules locally. So that's a

risk you have to think about and consider. But if

it works, it's a great strategy, especially if you're

getting started, because it gives you that extra cash flow

that maybe you're okay spending an extra 5 hours a week

managing the Airbnb if it gives you an extra thousand bucks a

month, like, that'd be pretty nice. And so that I think that's the

distinction is whether you're willing to do it, whether you have the time to do

it. And eventually, like, most of my rentals now

are long term rentals because I work a couple hours a

week on my real estate. Like, I don't. I don't want to spend

as much time, but I used to spend 60 to 80 hours

per week doing real estate. But it just depends on where you are in life.

And, uh, we've been traveling with our family. We lived in Spain for

a year. So I'm kind of living off the fruit of some

of the work I did earlier. And so I'm not doing as much of

the short term rental stuff now.

Gotcha. Gotcha. Okay, so let me back up just

a little bit. I just wanted to get that piece out. But

if someone has a house right now, let's say they want

to move so their house will become available and

they want to rent it out. Um, you are referring

to using some of the

capital or something from the house to scale

and get enough. Like, how would all of that work?

Yes. You're saying if someone is, they've already lived in the

house. So let's say they lived there for two years, right? Is that the situation

you're talking about?

Two plus years?

Yeah. Yeah. So they've lived there for a couple years

now. Let's say, like, that was a, uh, 1500 square

foot house, or let's say even smaller, like a 1200 square foot house.

And you're just, your family's growing and you're like, all right, we need another

bedroom. We want a fourth bedroom. So you save up

money to go buy the second house that you're going to move

into. And so you go shopping, you go look for a house,

you buy this new house, you move your family into that second

house, but instead of selling that first

one, maybe you clean it up, you fix it

up and you just put it on the market. Either

Airbnb, you could keep furniture in there and do an Airbnb

rental and just manage that yourself. Or you

could keep it as a long term rental and rent that out as

well. The cool thing is you already got the

loan on the property, you got the financing, you've owned this

property, you've lived there for a couple of years, you know it really well. So

you've probably, does it work to it and fix it up?

So if you were just to go out and buy a rental

off the street, you might not know as much about the property,

whereas this is one you've lived in. And it just makes a really

natural transition to being able to do that because

the financing is in place. Maybe you got a 30 year fixed, uh,

loan. You can keep making payments on that financing,

and then, yes, you have to get financing on the next property, which that's probably

the biggest challenge, is you have to save up the money in the cash to

buy the next down payment on the next house.

But that's why you take a couple of years, take a few years

to save up the money and to do that. And now you have two

properties, the one you live in plus the one you used to live

in, and you're kind of building your little real estate empire

just one house at a time.

Yeah, that sounds fantastic. So

as we're thinking about being a small and mighty

investor, um, what are some other things we

should consider? Like is being a landlord for

everybody or, you know, what type of people

would probably do best with this?

Yeah, I think a lot of people get scared about

landlording because of stories you heard. Somebody's going

to have, ah, a leaky toilet in the middle of the night, and that's going

to be really stressful. Or they might have,

I think, the landlord tenant relationship in general,

whether, if you go on Twitter, for example, there's just a lot of

people who, if you're a tenant, you're supposed to be critical of

the landlord. If you're a landlord, you're supposed to be really skeptical of the

tenants. I found the opposite to be the case. I

found that, yes, there's some exceptions here and there,

but for the most part, my tenants have been amazing

and they're good people

who want a safe, clean, long term place to live in

without a lot of drama. And if you give them that

and you treat them well and you maintain your property

and they'll appreciate your property,

they'll take care of it. Even through Covid, we had one

situation out of a lot of units where

somebody didn't pay because they had something going

on. Everybody else, even during that time,

was they wanted their home, they wanted to stay there. And

so I think that the drama that you hear a

lot about is just what it is. It just makes

good Twitter posts, makes good media for the most part.

There's a lot of tenants and landlords who work together

well. And so I would say that, like, just the, uh,

idea is that you're serving your tenants, you're helping your tenants,

you're providing affordable housing to

good people, and that's a wonderful service. Like,

that's something that people need. And then from the management

standpoint, you don't, you know, you can start off doing a lot of

stuff yourself, but there's really good technology

to help you collect rent, for example, basically free

technology online now where you can, the tenant could pay their

rent online, they can do their lease online,

you can screen them online, and all of that

is possible for almost free now. So that makes it a lot

easier. And then for my maintenance, you know, yes,

you're going to every once in a while, have a weird situation where there's a

leak in a toilet or something happens. But if you prepare

for that and you have a good list of contractors or

handymen, then you can hire that

out and you can even, like, I even give some of my

tenants the plumber's phone number. Say, hey, if there's an emergency like

this, this is what we do in an emergency. Call this plumber.

They have an after hours emergency number. They'll come out and fix

it and they'll charge me for it. We'll take care of it.

Like, that solves a lot. That solves, like, the worst things that people worry

about. And yes, it costs a little bit of money, but it can save you a

lot of headaches.

Gotcha. Gotcha. So, question that I know people

probably have as well. I know I do. How do you

find good tenants? So let's say, for instance, you want

to do a long term rental. You know, you've decided on that

because maybe Airbnb, it'll be too much

work. You want to be a little hands off. Um, you

know, all that stuff. So how do you go about

finding good long term renters?

This sounds a little counterintuitive, but

finding the best tenants means you have to, you have to have the

best property. So you need

a couple things there. Number one, you know, I think a lot of

landlords unjustifiably complain their

tenants. I've heard this happen before. Oh, I

can't ever find a good tenant. And then I look at their property

and how they maintain it, and I'm like, well, no

wonder you're not treating your property very well. You're not

maintaining it, you're not cleaning it, you're not doing the maintenance on the

property. And so I say all that to say. Most of us

know that intuitively, especially if we've been a tenant

before, we know that there's those bad landlords out there

who just kind of, they're slum lords, they don't fix stuff. And

so if you treat your property well and you treat it

like a home that you would want to live in, then I think

you'll tend to attract tenants who also

are going to be considerate of the property, who also take care of it, who

also take pride in it. So that's number one. Like, you just

gotta, you gotta treat the property right in order to

find the good tenants. But then once you have a property that's

worth living in, then it's really a simple,

just advertising. Like, I, the last house that

I rented for myself, um, we just put it on Zillow.

And I think we had to pay $15 to have like the premier

ad on Zillow, so that they promoted,

um, our house to everybody. And we got

as many leads, like within seven to ten days, we

had lots and lots of people applying to rent our

house. And so sometimes it's as simple as that. A

zillow ad, maybe you put, uh, a sign in the yard,

depending on what location you're at, maybe that would help out. And so you

get your point. There is you just want to advertise to get people who are

interested in the property. You have pictures, you have a description.

I like to put some of my requirements in the

advertisement for the property, like in the Zillow listing, for

example, if you have a credit score. So I might want to have a

credit score minimum. So like, let's say you wanted a

650 credit score minimum for somebody to rent your

house. You could go ahead and put that in the,

uh, advertisement. That way if somebody

doesn't have that, they're like, okay, well, that's this requirement. You're being

fair. You're being treating everybody the same,

and then they'll know it upfront. And so the people who tend

to call will already have seen that and then you'll have a

free, a brief call with them, um, you know, talk about the house.

But, uh, eventually you're going to probably show them the house and then

get an application from them. And so there's an application with a lot of

questions. And this is where you have screening

criteria to make sure they have a, uh, you know, they have enough income

to afford the house, they have a good credit score. They've

paid their other landlords on time. So it's kind of like

borrowing money. When you rent a house to somebody, you want to go

through an application. And some of the mistakes I made early in my

career, it was, I wanted to be a nice person. I wanted to help

somebody who probably a good person, but they didn't.

They haven't demonstrated that they can pay on time. And

so for you that you have to be. You have to make some hard

decisions like that sometimes to say you, uh, have to

separate the person from their ability to pay.

And if the person can't, has not demonstrated they can pay,

then you're asking for trouble. As a landlord, you need to. You

need to only rent to people who have demonstrated that they

can do that.

Gotcha. Gotcha. And that makes complete sense. So

you've covered so much. Um,

I'm, um, over here, like, feverishly taking notes, but

I know we can't give it all away. So you have a

book. How can people find out a, more information about

the book or b, more information about you? How can

they find you?

Sure. Well, the book was published by biggerpockets, so if

anybody's ever heard of the real estate investing website, they're a really big

website podcast now. Um, so they published it. So you

can find it on biggerpockets, or you can find it on Amazon. It's also an

audible. Unfortunately, you won't hear my southern accent

on the books. We hired somebody else to read it, but,

uh, it is on audible or anywhere else you want to find it.

And if you want to find me, personally, I would love to hear

from you. I have a podcast that I have every Monday.

It's, uh, called real estate investing with Coach Carson. If you look on

any podcast app, Apple, Spotify, and

also on YouTube. I do a lot on YouTube, so you can

see the episodes and also do tutorials on, for

example, if you're trying to figure out how to run the numbers, you're like, all right, I'm going to

buy a rental property. But I have zero confidence that

I know if I'm running the numbers right and doing the math,

then I have a lot of tutorials on there, and I have a little

whiteboard where I draw it out and describe and explain how to

do it. So come check me out on YouTube. And so when you're

searching on podcast or YouTube, just look for Coach Carson.

You search for that? I'm on all of the platforms. I also

am on Instagram and Facebook and those kind of things. I don't check those

quite as often, but I have somebody helping me out, and I would love to,

love to hear from you on any of those platforms.

Gotcha. Gotcha. And is it Coach Carson on all

the platforms as well?

It is, yeah. If you search Coach Carson, it'll

sometimes it's a variation of that, but I'm out there

on all of those as.

Coach Carson, make sure that I have all of

the links, um, in the show notes. So definitely

check that out. I know when you said when you're looking at your

numbers and you want to see if you're doing it right, I'm going to go check

out video right now. So highly recommend

you, uh, all give him a follow. He has some really good information.

So thank you so much, Chad, for coming on the show today,

and I hope you have a wonderful rest of your day.

It was my pleasure.

Bye.

Intro/Outro: Thank you for listening, joining and being a part of the Money

Talk with TIFF podcast this week. You can check Tiff

out every Thursday for a new Money Talk podcast podcast.

But if you just can't wait until next week, you can listen

to previous podcast

episodes@moneytalkwitht.com

or follow Tiff on all social media

platforms at moneytalkwitht.

Until next time, spend wise by

spending less than you make. A, uh, word to the money wise

is always sufficient.