How do you reach financial independence in your 30s?
Deni and Brian chat with Nick Disney, who’s been financially independent for years now, despite having several young children. He explains how he invests, and how you can reach financial independence and retire early too.
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What short-term fix-and-flip loan options are available nowadays?
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We compare several buy-and-rehab lenders and several long-term landlord loans on LTV, interest rates, closing costs, income requirements and more.
Deni: Hi, everybody, and welcome to Spark Rental Facebook Live and podcast. I’m excited because we have a guest, as you can see today. Last week, if you joined us, you know that we spoke all about the eviction process, which is and how to speed it up because so many of us get stuck in them. And today you will see that we are speaking to Nick Disney. He has 38 rental units, and he has a family, three kids’ wife. And we’re going to just talk about how he got involved in real estate and whatnot. Please let us know where you’re joining us from. If you have any questions, just pop them in the chat and we’ll do our best to answer them as we go along. So, with that being said, Nick, tell us a little bit about how you got involved in real estate and why.
Nick: Sure. I don’t think the beginning of the story is too unique. I was looking to supplement my income and I read the classic books that everybody kind of mentions that they read. And I was like, well, man, I think I can do this and started looking to buy the first one and figure out how to just make money through real estate and something that you do. If you’re still working, then you can kind of do it part-time and bought the first property actually in Corpus Christi, Texas, which is along the coast where I was living at the time. And now I live in San Antonio, which is where the main focus of the business and kind of where it’s grown to have the properties where they’re at now.
Deni: Now, you didn’t have a relative, a friend or anybody that kind of said, you know, this is what we’re doing. Or like you just kind of read a book and said, I’m going to try this.
Nick: I read a book and I read a bunch of them. And then I didn’t have any relatives or anybody that were kind of in the business where I used to eat breakfast or breakfast a lot. There was a guy who had done some, and so he kind of looked at the first property with me, and that somehow made me feel, I guess, better. And so, I pulled the trigger, and it was an aerial property years ago and needed some work. So, I just moved in and started fixing it. And you know, it’s not the greatest deal of all time, but it worked out and I learned an incredible amount. And I have a lot of people who maybe weren’t real estate focused, but they were very nice. Help me out. Let me borrow tools and everything to get it going. And once I figured out, well, hey, look, I made some mistakes, but it still worked out well. And then then I just moved forward and met more people and kind of started growing from there.
Deni: Gotcha. Describe like one of those mistakes and how you overcame that or what did you learn from it?
Nick: You know, I think I’ve been there’s so many that I have done and just kind of came out okay. I think trying to fix them myself. I’m quite handy. I can fix a lot of stuff. You know, I’ve been doing it. I’d been doing it my whole life and I thought, hey, this is a great idea. What I learned is I went along. For me, yes, I can do a lot of it, but I’m not as good as the other guys to do it. It takes me a lot longer to get things done. And so, in the end, it takes me more. Yes, I probably save some money later, but it takes me a lot more time. And most of the time I’m not doing as good a job as they would have done. So, I think that where I was naive thinking that I should be the one in there fixing a lot of these things, it wasn’t really the best, the best choice. That was the key learning that I kind of had to get over. You know, I think there’s been so many from point A to now.
Deni: How did you even buy your first property? The financing end of it and all of that.
Nick: The first one was super standard cookie cutter. I had saved my 20%. I put it down. I knew very little about what I was doing, but they gave me a loan to buy the property. It was a fixer-upper, but it wasn’t one of those just completely destroyed houses. A lot of cosmetic work. And I mean, I felt like I was doing the right thing, but without having done it, you just really don’t have confidence. And so, there was a lot of I think I’m making the right choices and I hope for the best. And so, it was 20% down and bought it and moved in and you know. Fixed it up. I mean, it’s a little it was a 1200 square foot house and is a little house and fixed it up. And then when I moved, I sold it and had a little profit and I thought, hey, man, this is all right. I can maybe do this again.
Brian: So, you didn’t flip?
Nick: Oh, yeah. Which also I probably would never do again.
Brian: I’m guessing that was before you got married.
Nick: So funny story-like. No, we didn’t live together, and I bought it and I moved in. And so, it needs a lot of work. And one other key, learning that my wife moved down there to move in with me and she moves in. But as I was fixing it, I was working and then come back and fix it at night. So, I had to take a lot of stuff off, you know, the doors had holes in them, or they been kicked in or they were broken. So, I was like, I remember thinking, I’ll just take all these doors off. And I just tossed them because I need to get new ones, but I hadn’t gotten them yet. And so, she moved. I won’t say anything about it. Right. And she moves in like, you know, it’s like an hour later and she’s like, I’m going to need at least one door in the house and the front door. But she was like, I know you have to go buy me a door. So that was one of the first things I fixed after she moved in and then they moved in. I was partway done, and I finished it. Yeah. With us.
Deni: Now. How did you transition from there to buying your first rental property?
Nick: I think I mean, I read a lot and I think that the education part is incredibly important. So, I read a lot of books, but I read about a lot of people having success and I wish I would have taken it’s hard, but I wish I would have taken action sooner. But I read a lot and I knew that what I wanted was cash flow. That was really my goal. So how can I create it? And. At that time, I thought, well, the best thing I could do would probably be rental property for cash flow. And so, I moved here, and I was looking around, I looked, and I looked, and I looked, and I even went to some local events around and talk to more people. And I got introduced to some other people that were explaining how they were doing their rentals. And I was like, I just know that, I mean, I really believe that it works. And so, I knew I wanted to own the rentals. And so, then it was just I bought the first one and it needed a little bit of work, but not much.
Deni: And now did you let the experts do it this time or.
Nick: Yes, I did. Yes, I did. I thought it was like a few thousand dollars of work. I thought I was doing this major flip project. I’m not quite that great, but we did it and I leased it myself, you know, just signs out and signs around the neighborhood. And so, I got super fortunate, great first tenants and they moved in, they paid. And I was like, wait a minute, you know, I paid my mortgage. They, you know, paid me. And now I have this money. This is fantastic. How many times can I do this?
Brian: Where did you find that first rental property? How did you find the deal?
Nick: I found that one through a real estate agent. It was a long time ago. It was a lot easier at that time to find investment properties that were listed on the MLS. So that was straight. That was straight off the MLS and the agent that I found I met just through talking to people in networking, I actually my barber actually was like, hey, this other guy comes. He does. He introduced me and the guy was awesome. He kind of just took me on and he’s like, look, this is how this will go get several rentals at the time. And he walked me through all of that. I mean, those were his contractors. He let me use that. Fixed it.
Deni: Oh, wow.
Nick: And then but he also let me just kind of get in there and try to lease it and bump my head and I got at least and was self-managing it. That’s how I found it. I think the first one. At least the first three or four or so all were off the MLS.
Deni: Now, do you still have that one?
Nick: I sold that one. I sold that one. I want to say not too long ago I think it was like 2018 now when I started thinking about it, but I did. So that was a great property. You know, it had gone up and it was just I thought there’s a better spot to put the cash, you know, the equity that was in there. So sold that one. But I’ve still got some from 20, 2011, 2012, 2030 right in that range and. I mean, you guys know, I mean, over time and the values have gone up and, you know, purchased them for then was substantially less. And so, it really adds to that net worth.
Deni: How do you go about finding properties now?
Nick: So now it’s pretty much all. Marketing so my website sellmySanAntoniohouse.com. We’re looking for people who are motivated to sell. We advertise mainly online and then it’s the word of mouth because we do have the rentals, but also, we’ve rehabbed a lot of properties and we’ve bought some and sold motor finance. So, there are other parts of the business. So, but the vast majority we market direct to sellers online for whatever reason they need to sell. You know, we buy houses in San Antonio and then they reach out to us.
Deni: Nice. So, you’re pretty well known out there.
Nick: I mean, you know, probably a little better around San Antonio. It’s a big city. So, there are lots of good investors here. But we actively market online for properties, not also that we would want as a rental, but ones that we may create if we may flip that house, or we may sell that house to another investor or someone else.
Deni: Now, do you make phone calls, you know, and or do the driving for what is it driving for dollars, Brian.
Nick: So, I think I’ve tried out everything. I’ve never. I’ve never been big on, you know, just knocking on doors. I don’t have anything against it. It just wasn’t for me. I used to do a lot of direct mail where we would mark it out. We buy houses and that works really well for a long time, and it just started to decline. I guess it’s probably four years ago just really started. We weren’t getting the results; we weren’t getting the calls. I myself was just getting stacks of letters sent to me, just being an absentee owner or in some, frankly, on all these mailing lists. And so decided to transition and really focus online. And so, then we put out our message, you know, we buy houses and people want to sell a house for cash. You know, they’ll we’ll Google it up and find us and give us a call.
Deni: Right.
Brian: So, we have a question from an audience member here. And Neil says, what is your opinion on Reo properties in this current seller’s market? Do you expect any foreclosures under the blanket that might pop up in the near future?
Nick: Yes, I do. And I know it’s different for state and we used to buy here. So, I live in San Antonio, which is in Bear County, and we used to buy at the Bear County foreclosure auction the first Tuesday of the month. We go down there for those foreclosures. Obviously, with everything that’s happened in the last couple of years. There were just very few properties for sale there in general because they weren’t being foreclosed on. Well, those foreclosures are still there. And so, I think, in my opinion, a couple of things will happen right now. There are less properties that come up for sale there. So, when there are less properties, it drives the prices up. So, people are paying. And it’s not they’re not really in my opinion, they’re very, very good deals for most of what’s there. But eventually, those foreclosures will come and that will mean there’ll be more foreclosures available like a trustee sale or a foreclosure sale. But a lot of those will be sold back to the bank and those banks will put those out there into the market. They have to come back. If they’re there, even though it’s getting pushed back more and more, they’re starting to open up more and we’ll start to see a few more, at least locally where I’m at. And I think eventually then that will come to where you see the areas where the real estate agents have them listed on.
Deni: I believe the same thing. I think that it’s going to be interesting to see the inventory change well.
Brian: Especially if we have a recession hit over the next year.
Nick: I think you all are very accurate. It could get really interesting. The trustees that I’ve talked to, the trustees for anybody have no trustees. The person that actually does auction down there. So, they have a lot of insight on when those properties are coming. And, you know, and they said, you know, the big some of the big, big holders, the big banks just haven’t decided to foreclose on theirs yet, but eventually, they will. And that puts a lot of more supply out there. So, it’s got to drive the prices down some. And to your point. Then you also have a recession. Then there are probably less people available to buy. So that could get quite interesting.
Deni: Absolutely. Now, just out of curiosity, we haven’t talked too much about this. How do you fund now?
Nick: Okay. So well, mainly two things, right? So, we do. We will use local banks. I’m a. big fan of local banks. Another thing I wish I would have learned sooner. Why do I like the local banks? Because you can build a relationship with them. They do get to know you over time, and they will look at your business and it’s not. You do have to perform on paper, but there’s more to it than that. And they will. They will hold the mortgages there with them so they don’t have to have them form to something that they can resell. So that has been super helpful. And so, the short story of that is some of the rentals that we own are now paid off. And so, we can take, say, six of those rentals over to Bank of Bryan and say, hey, we’d like a line of credit. We’ll give you these rentals as collateral. They think that’s great. And because they love having those assets and so those lines of credit, they really function like cash for us. I mean, we know how much money need the money in the bank. Then we can go buy what we need to. And if it’s something that we refinance or something that we sell, that money comes back in, and you put it back in the line. And so, the line just kind of goes out, but it gives you access to a lot of cash, right? The second part is private lenders that are here locally, those relationships are great. They take they often take a while to get going. But once you meet and you talk to them and they feel comfortable with you, I mean, there’s a lot of people with a lot of money. And you can if you can put it in a good spot and you can show that you can do what you say you’re going to do. There are a lot of people that will lend you money over and over.
Deni: I like the fact that you mentioned personal relationship because I think because of the Internet right now and online and whatnot, we have lost a little bit of that, but there are some positive attributes to that. So, it’s kind of a good piece of information for people.
Brian: Yeah. So, Neil followed up with a question here saying, since home prices have skyrocketed, will lenders sell properties directly to make more money rather than foreclose? So, the lenders can’t do that. Lenders don’t own the properties and so they only have a lean on the properties. So, lenders they can’t only foreclose to force the sale to recover money. They can’t actually sell properties without going through the foreclosure process. Just as a quick clarification point there for an audience member. Nick, do you have any parting words of advice for either beginner real estate investors or intermediate investors who are trying to scale their investing up to the next level?
Nick: I think for the beginning investor, and I say this, having had gone through and made plenty of all my own mistakes, I think you need to commit. Education is important. You want to know what you’re doing. But a lot of people I talk to, you have to make that commitment to the first property. Just one, just one property. Just commit if you’re really going to do it and you need to buy that first property, you do not need data home run. I didn’t hit a home run. You know, most people don’t, and I single maybe get lucky in a double. It’s great. But you really need to commit and focus on what you’re going to buy as that first property. Don’t get distracted by you need to do this or that and this and that, really focus on what you’re going to buy. Drill down. Commit. Just buy one. Right. If you decide real estate is not for you, it’s okay. But it’s always the hardest scaling. Scaling for me, the biggest thing was the money. We had the ability to do the rehabs and we were located in the properties. And I actually talked to a very successful investor here and it was a long time ago and he’s like, oh, you need more money.
Nick: And I really thought we were going to be ready. Turns out I needed more money. Very much. Right. Just if you really want to scale access to capital. It’s what’s it’s what slows you down. And I think really focusing on how are you going to do that part and how are you going to do that? If you want to do with a certain amount of speed, then you have to have a certain type of capital that you can access quickly. And I love the idea of the local banks and it’s been super helpful for my business to use them. And there’s probably somewhere someone if you don’t know someone at the bank. I actually learned it from an investor that was here locally, and he taught me about it, and he was like, Yeah, well, here’s actually how that really works. I was in the wrong banks. And so, I think the access to capital, if you want to scale is usually critical and really, really want to focus on that point.
Brian: It’s great advice. So, we put a link in the comments here to sellmySanAntoniohouse.com or where people can connect with you. Any other ways that audience members can connect with you and maybe buy wholesale or turnkey properties from you?
Nick: I mean, definitely, if you’re interested or if somebody got a question and I can answer it, shoot me an email. It’s [email protected] and the number’s on the website. If you’re driving, you’re going to want to give me a shout. That’s all right. If I. If I can grab it, I’ll grab it. If somebody was looking to buy a property or I probably buy an order. There’s just a question that I can answer that you think will help you. Give me a shout or shoot me an email. I’ll do my best. And we never know. Almost everybody can help everybody else out in some way.
Deni: Absolutely can be a good team sport.
Nick: Absolutely. I believe in that.
Deni: Awesome. Nick, thank you so much, so much. I love doing these interviews because I learn something new and I’m sure our audience does as well. So, I do want to thank you very much and I guess that is it for this Tuesday, so.
Nick: Hey, my pleasure. Thank you for having me. I appreciate it.
Deni: Thanks. And thank you, everybody, for joining us. And we will see you next Tuesday. Bye bye.
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