Investing Smarter, Not Harder with Amy Silverman — Script

This is a Full Episode transcription from Episode 29 of Life Worth Chasing, you’ll find the timestamps next to the speaker.

You can find show notes: https://medium.com/p/dad9ce42362

Chase Maher: (00:00)
So my guest today is a real estate investor from Denver, Colorado and she’s found an incredible niche in Michigan with tax deed auctions. She’s buying properties for seven to 10,000 and selling them as his for 25 to 30,000 with seller financing, making interest as if she was the bank. She’s super smart lady. She’s sort of known as the queen of real estate on Twitter and I was just really excited to have her on the show and talk about all the things that she is doing to just really build a successful rental portfolio. So please welcome to the show, Amy Silverman. Amy, welcome to the show. I really appreciate you coming on. You are sort of quote unquote the queen of real estate Twitter and I’ve been following you for probably only about a month now but everything that you put out is absolute dimes and fire and great knowledge and I’m just really excited to have you on the show.

Amy Silverman: (00:57)
Thank you very much for having me. I appreciate it.

Chase Maher: (00:59)
Yeah. And you know, from following you, I no a good bit that you know, you’re a rental property owner, you self manage your properties. I know you do some consulting, but just for the listeners who may not know who you are and may not be on Twitter following you, can you tell us a little bit about, you know, who Amy Silverman is, where you’re from and what type of investor you are?

Amy Silverman: (01:20)
Yeah, absolutely. So I am based in the Denver market and that’s kind of where I have my core rentals that I’ve had for kind of a long time now. And that’s where I’ve gotten started. So I kind of got a slow start. I’ve been all of the, I’ve been investing for about 13 years now. I started like in college, but as you can imagine, you know, I, it took me a while to really gain momentum. So for, I’d say the first 10 years I was doing it mainly just as like my side income stream. Slowly but surely building a rental portfolio, you know, mainly find properties with loans and everything out here in Denver because it’s a pretty expensive market. And then I sort of reached the point where, you know, of course the goal was always to, you know, transition to it being more of a full time thing. And yeah. So once I finally kind of reached that point, that was great because my, you know, my rental income was sort of supporting me enough to feel like I could take that risk. But it sort of also was like at a point where I couldn’t really then afford anything else in the Denver market just because of how high it’s gotten. And also just cause you know, when you stop working, getting out traditional w two income, it gets a lot harder to get loans. So that sort of, you know, slowed me down here in this area. Um, and so I sort of shifted gears and started investing mainly out in Michigan and that’s sort of where my focus is now. And it’s a totally different type of market, totally different strategy. So kind of a buy and hold. But not really so much doing rentals. I’m more doing like owner financing type deals, which yeah. Has turned into just a whole new like learning experience. Okay. It’s been really interesting and fun and I love it. And sure we can get into more details as we go. But yeah, that’s kind of the gist of it.

Chase Maher: (03:17)
That is super cool. And I think that, you know, your strategy of the buy and hold is more of a longterm game. Can you sort of, you know, share with me like why you went that approach rather than maybe fix and flips or rather, you know, the wholesaling route. Like why is it that you’re super keen in dead set on like the longterm strategy?

Amy Silverman: (03:37)
Honestly, because I don’t really like to have to put a lot of work into it. And so, you know, things like wholesaling, you know, really takes a big time commitment. You really have to find those deals and find those buyers and all those things and it, you know, the second you stop working the deal stop flowing. So that was, that’s just never really been my style. I’m, like I said for a long time I was doing this more of just like a side. Yeah. Seeing and so, you know, rentals really just sort of made the most sense with that and then you bet, you know, that was sort of in the beginning as I was sort of figuring it all out and now I just have sort of become so accustomed to it. I can’t really imagine putting more, you know, work into it. I mean I do like trying new things in like new strategies and challenging myself, but I try to keep everything like pretty passive. And so yeah, that’s the buy and hold thing and you know, fixing flips. I w I may take on a few of those here in the next few years. I’ve just been very hesitant because I mean I’m sure you are well aware how hard contract there’s are to deal with. That’s honestly like the main reason is I just cannot deal with the contractors and you know, just all of that stuff. It’s such a headache for me. So yeah, so far it hasn’t, hasn’t been, uh, so appealing enough. But I think maybe I will be up for some time here.

Chase Maher: (05:00)
I hear you. Well I’m looking forward to, you know, seeing when you do cross that path a bit more, you know, what the, you know, the status update and the progress is our, I’ll, I’ll, I’ll definitely be keeping tabs on that. I agree the contractors are the largest pain in the ass when it comes to the fixing slips and that’s why I mostly go after larger wholesale deals. And the online deals that I do flip are like just absolute slam dunk easy rehabs, which are pretty few and far between as I’m sure you’re aware, especially in a market like mine or your San Diego and Denver respectfully. So tell me like when you got started, I know that you definitely have massive rentals in Denver and, and Michigan instead of instead of getting started in the Denver area. I’m very interested in hearing why you picked Michigan, what you’re doing there and how you sort of got started in these tax deed auctions.

Amy Silverman: (05:52)
Yeah. So I mean, I’m going to tell you the story, but I’ll be honest, like I don’t have a great reason why I was in a situation a little over a year ago. So basically the summer of 2018 I had sold a property in Denver that I intentionally wanted to try to sell feeling like it wasn’t something I wanted to hold longterm and I did a 10 31 exchange, you know, wanting to defer those capital gains and yeah, you know, kicks in your, you know, 90 day timeframe to find something new. So I sold my property in Denver, that was fine. And then of course I was hoping maybe I would find like a great deal in Denver to pick up as a replacement, but I just wasn’t really, like the stars weren’t really aligning for me. Like there was some, you know, there was some options, but I wasn’t really like in love with them. I didn’t want it. Another like high maintenance situation, I needed something that was, I don’t know, different. So I got to exploring, you know, just the, the, the wormholes of real estate that just you get down. And I actually was starting my research on more of like [inaudible] tax liens. But as I was looking through the tax liens stuff, I stumbled upon the tax deed auctions that are held in Michigan and they’re kind of unique just in that they are actually held online, which a lot of other areas are still like in person only, you know, you have to show up at like the courthouse or wherever the case may be and the actually been in person, you know, which is great. But um, obviously that can be a lot harder to actually plan for and the schedule I have, you know, kids in a life that don’t make it too easy for me to travel to things like that. Yeah. So just the simple fact that they were online was like worth me kind of investigating more. And as I did that, I just sort of felt like, like, I don’t know, there was just kind of a no enough potential and the price point was low enough on these properties going to auction that it kind of felt like I could, you know, throw some of my 10 31 exchange money at it and I wouldn’t be like too mad whatever happened because that was sort of okay, you know, house money anyway at that point. So yeah, the auctions, you know, happened to be during that 90 day period I’d checked with the exchange service I was using, I checked with the auctions, it was all gonna work out that I could just, you know, send a wire from my exchange to the auction. And yeah, the rest is history. The first, so the first year was in 2018 I bought three houses sorta really not knowing what I was doing, but did as much research as I could online. And I have no ties to Michigan. I’m not like from there, I don’t want family there or anything like that. I had honestly never even been there when I bought these three. So I mean, like I said, it’s, I don’t really have like a good reason. It just sort of all worked out timing wise that that seemed like the best opportunity when I had to get in that 90 day exchange and yeah, from, you know, once I was in it and then bought them, I have, you know, developed kind of a whole system of course, you know, then how to get, get out of the properties, kind of a variety of different exit strategies that make it just sort of a sure thing to get some easy profit. And I just, you know, sell them as is. Like I said, I’m not out here flipping them and yeah, it’s been a really great experience. So this year I bought a bunch more, I think I bought 16 more this year, which was obviously like a big increase from the three last year. But I’m kind of, you know, certain of this system that I’ve gotten into place that I, you know, I’m ready to scale up. Okay.

Chase Maher: (09:41)
When I’m listening to that, all I’m really thinking about is like how resourceful you were. You were kind of on this timeline constraint with your 10 31 you figured out how it would work out and then you just sort of dove all in and I really respect that about entrepreneurs, about real estate investors when they dive all in and they just really become an expert at that and it sounds like that’s essentially what you’ve done. Can you share with me a few of the things that maybe went wrong that you’ve learned from with these tax deed auctions?

Amy Silverman: (10:09)
Absolutely. So I don’t think site unseen is risky. It’s super risky, like I don’t necessarily think it, everyone is made for it. I have a pretty high risk tolerance. One of the houses, one of the first three houses that I bought was nice enough in the pictures online, but I really didn’t do a lot of research on it. I kind of got, I don’t know when you get in the, when you get into these auctions you’ll get this like adrenaline rush. You’re almost like on a high and I kinda got caught up. Yeah. And decided to bid on one house that I really hadn’t researched, which I would of course never recommend anyone do. So one of the first three houses I bought ended up being like boarded up and has like fire damage, you know, so like really bad case scenario and Oh and it’s in like a war zone area, like an area that’s just not even worth try to fix it because everything around it is terrible. So you know, that was a horrible purchase on my end. But luckily the price point was still so low. It kind of just doesn’t really matter. You know, like it’s a small loss in the scheme of everything else that I did and the, you know, the kind of like the profits that I was able to make on the other two houses offset that loss easily. So, you know, basically you really do have to do your research ahead of time, not get caught up in like the emotions of the auction and are you ready to lose, you know, be ready to walk away with nothing versus feeling kind of like a desperation to walk away with something. And honestly, I mean if you’re, you know, if this is a strategy that you’re looking into, I, it’s probably a good idea to try to actually look at stuff and in person ahead of time if you have that kind of, you know, ability, I have a feeling that would get you, you know, much more reliable results than just doing it all, you know, sight unseen like I’ve been doing.

Chase Maher: (12:04)
Yeah. And you know, I saw on Twitter you had made a, you tweet it out that you could just imagine how many more properties you’d have or how much more successful your portfolio would be if you were there. Okay. I grew up in the car business and I was in charge of buying vehicles at the auctions and then eventually when the platforms moved to have an online presence, I did a lot of it online but I always had more success, got better deals and got more deals when I was local at the auction. The benefit of doing it online is you can be in more than one market at once. So it’s kind of like a give or take. Have you thought of either getting boots on the ground there to be at the auction for you or maybe even branching out on the virtual realm and being at more auctions at once to kind of maybe supplement the lack of being there in person?

Amy Silverman: (12:55)
Yeah, I have. I don’t think I, well at this point I don’t think I actually need someone to go to the auction in person for me. But I mean and I’ve developed a good relationship with a, a variety of people in the state cause I kind of buy on all over the state who helped me once I actually buy the houses. Cause then I need, you know, when you buy it at auction, as long you get keys, like you have to break it and like you literally have no access to these houses. So I have people who break in for me and get the locks changed and Oh he’s just whatever, get me pictures and all the stuff that I need. And so obviously things like that are what make it possible. And that really, you know, is, is a game changer. But in terms of actually like needing to be there in person for the auction probably doesn’t make a big enough difference. Like you said. I mean the ability to juggle multiple markets, it is important. So yeah. I so another thing I don’t know if I mentioned is the Michigan auctions are only held once a year, whereas plenty of other States hold their auctions much more frequently. Like sometimes or like monthly, some maybe or even like weekly. I know like in the specifically in Detroit there’s like just constant auctions every day, like every hour. So you know what I mean? It sort of just varies. But yeah, that does make me think it would be good if I could kind of pick out a second market to do this in that I could also, you know, kind of do online and juggle like maybe you know, do it sort of like so well Michigan auctions like at the end of summer so I could do another one that’s maybe in like spring or even like end of winter type of a thing to sort of offset the too. I think that would be awesome. But I don’t think I’m quite there yet. Honestly. Like the amount of properties I bought this year is turning out to be pretty overwhelming and I’m really realizing I really kind of need, you know, more of a team to really like handle all of this in terms of not just like the boots on the ground people, but like a VA and probably some support staff just cause it’s a lot, it’s a lot to handle and yeah, so the, the idea of adding another, another market seems like a little too much right now. But I do think, you know, as I, as I get a little bit more of a system in place that will make sense.

Chase Maher: (15:06)
Yeah. I mean 100% are you buying these a all cash?

Amy Silverman: (15:11)
Yes.

Chase Maher: (15:12)
And just it like the typical property that you’re buying at these tax deed auctions, you know, what are you typically buying it for? What kind of rehab budget are you putting in place and what are you usually renting those for?

Amy Silverman: (15:25)
So my goal is usually to not spend more than 10,000 on any given property. I would say the average price I’m spending is probably in the ballpark of about seven is a good like estimate. But you know, you know, if berries are obviously some that I get cheaper, some that are a little higher or whatever. And in terms of the rehab, I mean I’m not putting much into the rehab. Like I might do junk call out removal thing. Like I said, I’ll get the locks changed obviously. But beyond that, I’m not really putting work into these houses. So my budget might be like, okay, $1,000 or honestly even less than that, but I’d say $1,000 is like a good estimate. And then from there I don’t, so I, like I said, I’m not renting them exactly. But what I do, so in Michigan there’s a something called a land contract, which is really commonly used. Every single person in Michigan knows what a land contract is. I of course have no idea what a land contract was. When I first bought these three houses last year, aye started listing them for sale, for rent, whatever and it was like every message I got people were like, will you do only on contract? And it got to the point where I was like, okay, what the hell? Like okay, I gotta look this up. Like I said, to figure out what they’re asking about. Cause everyone’s asking the same question and basically Leon contracts, just kind of another term for seller financing, lease to own rent to own all those terms that are used in different markets. That’s all it is. And, but it’s just super common out there. Which I didn’t realize was going to be a great thing, but has turned out to be a great, great things. So basically I’m able to just sell these properties as is on a land contract. Yes. To local people who are going to fix it up themselves and, and live in it. Occasionally I might sell to an investor or whatever the case may be, but most often it ends up just being like a local resident who’s going to live in the house. And so in that situation, you know you are also, so you basically, you know, you know, you go shoot the terms of the contract, you also put an interest percent on it and you got a down payment. So if things can all, if the numbers can all work out fairly decently, you can usually get cash back. The majority of your investment. Yeah, just through the down payment, you know what I mean? So like if I bought a house for five grand and I could try to sell it for like 50 I mean that’s probably most times we’re probably not going to sell it quite that high, I would say. It’s a little bit of a lower price one, but you know what I mean, like just in that scenario, you know, you could then get a 10% down payment that would just like fully cash you back out of that property and then know you would accept payments for maybe five years, seven years, 10 years. You know, I’m usually willing to be sort of flexible on the length of the contract because that’s what determines the monthly payment amount. And I’ve, I’ve learned that basically all people care about is what are they going to have to pay money really and can they afford that and as long as you give them a monthly payment that they can afford, they don’t really care what the total purchase price on the house is. I mean of course like within reason

Chase Maher: (18:44)
God, it’s like selling used cars.

Amy Silverman: (18:47)
It is, it actually really is not that different. Yeah. And it’s great because everyone wants to do this. I mean, so like, like this can apply in any market, but if you go to a market where seller financing is kind of uncommon, you’re going to have to explain it over and over again and kind of give it like a little elevator pitch or whatever to make people understand those terms. Being in a market where they, they just want that anyway has made this just like a dream and yeah, I love it.

Chase Maher: (19:18)
So did I hear you correctly that you said you’re sometimes buying these at 10% of ARV?

Amy Silverman: (19:25)
I would say so, yeah. I mean, and maybe like I said, that’s probably, that’s [inaudible] that’s like what I would consider like a best case scenario. I’d say a more normal, the spread would maybe be like you buy it for, like I said, five, maybe seven. I could sell it for about like 30 I’d say that’s that you can pretty much do like all day long. Like there’s a lot of that type of spread, but then you’re also putting the interest on it so you’re not actually just getting that 30 you’re going to get another I, you know, I would have to get my amateurization schedules out to tell you exactly how much interest, but maybe like 35 or whatever. Yeah, and the other great part is you don’t have to deal with it like you would have rentals, so you’re not responsible for any of the maintenance. They take care of all the utilities, they have to put the insurance on it themselves. They even have to pay the taxes. Like you literally are the bank and that’s what I have decided is like what I want to do at this point. Like I don’t want to take on any more rentals. Not that I’ve even had a bad experience with rentals, but I just don’t need to do any more property management when I have this other option. Okay. No, I’m not doing any of that stuff anymore, you know?

Chase Maher: (20:35)
Yeah. No, I mean it really sounds like you struck sort of a golden niche and are really making a lot of headway in that, so kudos to you. That’s very cool. I’m going to have to look that because I haven’t explored these tax deed auctions. Definitely explored seller financing and love the idea of being the bank, but it sounds like those are some of the best returns now. I would imagine you can definitely get burned quite a bit, so I’m not trying to make it look like what you do is easy by any means, but the opportunity seems pretty incredible.

Amy Silverman: (21:05)
I agree. Yeah, I agree.

Chase Maher: (21:07)
One of the things that I see, and correct me if I’m wrong, one of the things that I see that you are a major proponent of in your consulting is investing smarter, not harder. Can you share with me a little bit about like what are some of your, your key teaching points on investing smarter, not harder?

Amy Silverman: (21:25)
Well, yeah, I mean I think you’ll put, you know what I, what I just went over as a good example of it, of just, I mean, but one I like to tell people that property management is generally speaking not as bad as people make it out to be. Of course it sort of does vary by market and property type. Like if you’re buying really low class properties and things like that. Overall in general I with with the modern technology that exists today, property management is really easy. So I use a system called cozy. There’s lots of other ones that basically will automatic automate all of your, no payments between you and your tenants, but also like maintenance requests. Even like the application process when you’re first screening tenants, being able to have that whole thing automated, it has, you know, makes property management in itself. Oh you know, just a huge amount easier than people think. Like people still [inaudible] when I talk to people who have, who are just getting into real estate, like they still picture, you know, having to go like knock on the door or on the first and collect your check. And you know, like there’s a lot of like leg work like that. And that’s just not the reality. You know, there’s a, there’s a lot of ways that, you know, you can be completely hands off. And then in the worst case scenarios where, you know, issues arise with property management, all you’re doing is subcontracting and that moment you’re basically just gonna take your complaint from your tenant and call the right person to go fix it. It’s, you know what I mean? So it’s really like things like, just helping people see how much easier some of these things can be done than the way it sort of is in their head because they’re still learning. And that’s, you know, and that I love, you know, making people see that it can be so much easier. But, and, you know, the next level of it is, you know, screw all that property management. So you know, let’s go straight to these owner financing situations where you don’t even have to do all of that work. But even other, you know, there’s a whole nother level to it of, so like in the owner financing situation that we just described. So let’s say I sell a house on a land contract, someone she, you know, starts making payments to me that’s now a performing note. I’m sure you’ve probably heard of like note buying and selling, right? Oh, that’s a whole nother thing that I am, you know, trying to people see is if you like a great way to get into real estate, if you don’t feel like you want to be like as hands on with it, is note buying. So you could basically just buy that deed for me. The person who was in the property just stays and continues making their payments, but now they make those payments to you instead of me. And same thing goes for you. Now you don’t have to do any of the maintenance, you don’t have to do any of the taxes, none of that stuff, because they’ve already taken all of that responsibility. You just sit back and collect that principal and that interest. And usually when you buy a note, you’re able to get it a little bit of a discount, but you know from that contract price. So there’s even more, you know, profit kind of guaranteed in that, in that purchase. So I dunno, I mean there’s endless different things. It sort of is, you know, always look a case by case type situation. But those are sort of some like the broad things that I’ve been trying to, you know, just help people realize like it doesn’t always have to be these like midnight phone calls with emergencies and flooding and you know, horrible situations. I mean of course things can happen, but most of the time like it’s all within, you know, a realm that people can really like take on themselves.

Chase Maher: (24:57)
Oh, 100% and I just want to recap sort of what you said. I love cozy. That’s what I use. It’s a phenomenal app. It’s definitely saved me a ton of time. And then I just have a VA that basically manages my cozy format. So it’s kind of like in house property management and it saved me time. It saved me money, it saved me hassle. And also it saved me from being lazy on the qualification of tenants because they make it so easy to qualify tenants that now my turnover ratio is less. And my, the calls we’re getting is less because we just have more qualified tenants and the units. So cozy has been a great help to me. It’s very cool to see that you’re using that as well.

Amy Silverman: (25:39)
Yeah, I’m excited to hear you are too. That’s awesome.

Chase Maher: (25:41)
Yeah, and on the note buying, so if you’re listening right now and that was a little over your head, that’s totally okay. Imagine Amy who is absolutely crushing it. She buys a property for 7,000 maybe she puts $1,000 into it for demo and hall. Like she said she owns it for eight maybe some closing costs. We could round up to 10 just so we have an easy number. And she sells it. She does this land contract to somebody local in the area for say 30,000 Amy, what type of interest are you putting on that?

Amy Silverman: (26:12)
My standard is like 7% I will say every state has interest limits. So you should always look it up. But yeah, somewhere in that maybe seven 8% is usually where I started at least. And then the kids, sometimes I’ll make it higher if there’s a situation where maybe like they can’t pay as much down, like their down payment needs to be lower. So I’ll make the interest high or to still like make it work, you know.

Chase Maher: (26:35)
And then are you doing any, uh, any points up front? Like if, if, if it’s 7% and your sale price is 30, are there any points front that they have to pay?

Amy Silverman: (26:44)
I haven’t done that yet, but I wouldn’t be surprised if you know, someday that does happen, but not yet.

Chase Maher: (26:49)
Hey, there you go. So, so let’s say you’re all in for 10 grand. You come up with a contract with them for 30 grand at 7% and they have to put a say, I don’t know, you call it five grand down or something. So you immediately got half your, your cost back and then now you can present that property to a note buyer that might want to buy it at a 75% discount or we’ll call it a 70% discount. So 70% of 30 what is that? Like 21,000 I don’t know if my math is correct here, but imagine if it’s 21 K she just quadrupled her or doubled her money on the 10 and got five from the buyer themselves. So she just made out like a bandit, didn’t have to do any of the property management and is essentially acting like a bank who we all know that bangs got all the money, they got some of the smartest people and Amy’s figured out a way to do that on her own, which is extremely cool. So if you’re interested and how to do that. Amy does some consulting. And so Amy, would you like to share a little bit about what that would look like if somebody is really interested in getting into this type of space?

Amy Silverman: (27:58)
Yeah, absolutely. So yeah, I have, I’ve been doing consulting, you can find me at a silver, it’s consulting.com and yeah, basically, I mean I just kind of do like [inaudible] generally start out with just one on one hourly calls. But depending on your situation, you know, we can also like package things up to have multiple calls. Like if you’re, you know, really at a point where you’re going to actively be buying ’em but usually people are happy to start with, you know, just like an hourly call to really asking me direct questions about your specific situation. Cause like I said, all of this stuff can be applied in any market tax deed auctions only exist in some States. Some States use the lean system. So you know, narrowing things down like that is one thing I can help you with. But also just to keep it in the back of your mind, you know, this whole process can work. Even if you’re not buying from a tax deed auction specifically. Like even if you’re just getting a good wholesale deal or maybe you like foreclosure auctions or even if it’s just, you know, a for sale by owners situation, like it doesn’t really matter. You know, it’s just a matter of finding a low enough price point thing that seems to be almost like a sure thing with these tax deed sales, but I was okay foreclosure options to really be like heating up here, um, you know, over the next few years. So just things like that. Just sort of figuring out what’s the right acquisition strategy for you and your market and then the whole process from there because you know, buying it correctly is the most, you know, it is kind of the most important part. But then there’s a lot of other steps and it is a lot when you do it. But I’ve worked with a few different clients this year who did it in Michigan. And I have, let’s see, I have one client who I think bought six houses. I have another who bought for another one bucks too. So you know, and I don’t do any of the buying. I mean they’re, they’re investing their own money in. They’re choosing which properties to buy. Like all of that is their own, you know, decision making. But I consult with them, you know, throughout the process to help them hopefully, you know, make the right decisions and then, you know, once they’ve bought then we, you know, get into the whole strategy of, you know, what’s the best exit strategy. Cause like I said, I mean the land contract is sort of my favorite, but there can also be opportunities to do more of like a whole tale situation where you just sell it as is to, you know, cash to some local buyer or even , you know contact a local wholesaler in that market and let them market it to their list and put their fee on it. They can still end up being pretty profitable for you. Just sort of just sort of depends on each property and, and what the situation makes sense with the most. And occasionally you might even get something that is nice enough to do, try to put it on MLS. Um, you know, that can happen and yeah. So, sorry, I feel like I’m rambling a little bit, but like you can kind of see everything is really circumstantial. And so, you know, I’m giving you the, the general like playbook right here, which is, you know, super valuable. I don’t, no usually like give out as much information, but you know, to, to really apply it to your own situation, you probably still will want a little bit more like, you know, guidance I am here to provide.

Chase Maher: (31:14)
Absolutely. Well, I definitely think that you’ve carved out a nice niche for yourself and can provide a ton of value. And so that leads me into our little debate rounds. So if we could drop some horns for the debate round, right. And now we are ready to chat. So Amy made a post, I think you made a tweet and I responded and we had a, not a disagreement by any means, but we had two views of thought process for business. Now knowing you a bit more, I’m starting to understand why a, you have this thought process as verse what I do and I have my thought process. It was should a real estate investor have their real estate license? Yes or no? And I believe Amy was in the the ring of not having it. I’m in the ring of having it and so I would love to hear from you, Amy, why you, uh, why you believe that.

Amy Silverman: (32:13)
All right. I am ready. So let me just ask though, do you have yours?

Chase Maher: (32:17)
Yes.

Amy Silverman: (32:17)
That doesn’t change my argument. Just, just curious if.

Chase Maher: (32:23)
if I didn’t have mine and I was, I would be a terrible person if I didn’t have mine and I was trying to tell people to have as so yes, I practice what I preach.

Amy Silverman: (32:32)
I don’t have mine. Um, so I did at one point think that I probably wanted to get mine. And so I went ahead and signed up for the classes and did the whole studying thing, did the practice exams, all of that stuff. So I do know like what that process looks like and for me as I did all of that and I learned everything, it just became like really crystal clear that was not something that was going to make my life any better that it was going to be. I like much harder as an investor. So I guess there was kind of a variety of things that turn to me off. Things like the way you need to keep your finances structured. Like I mean not that I am out here commingling funds, like I do kind of keep my finances separate anyway, but like just the way that it was a very, that it’s very strictly, you know like in forest and you’re going to get audited on it. I like really hate things like that. I am like not a fan of like people caring what I do with my money obviously like I abide by all the laws, don’t get me wrong, but you know what I mean. And then other things, just like having to work for a broker basically felt like, you know, signing up to have a boss, which is something I hate. And just even like the fees and just the time commitment that comes with having to just go to your, you know, broker meetings. I know these days there’s like some more like kind of virtual brokers that you can work for that are probably a lot less of that and probably make things a lot more appealing. But in my mind at that time that was like a huge turn off. And, and the other things with the brokers of like having to, you know, put their name on all of your advertising and you know, having your name be like below theirs and things like that. Like all of it just kind of summed up to be not super valuable for me because I wasn’t really, there wasn’t a lot I was going to do with it anyway. Like it wasn’t, yeah, I wasn’t about to start having a. I mean I’m not actively wholesaling for one and I wasn’t really actively buying or selling much. I was sort of thinking about maybe doing like property management for other people, but I pretty quickly realized that wasn’t something I wanted to do. So yeah, I mean there were kind of variety reasons that it just all added up to like a big no for me.

Chase Maher: (34:57)
You know, I, I really respect that and I thank that in my personal opinion for what you do. I, I believe that you have totally made the right call and not having your license for what you specifically do, you know, not having it makes total sense. I’m still in the pool that if managed correctly and use did wisely, most niches in real estate, it is beneficial to have it. Do you mind, I wrote down a couple of your objections. Do you mind if I just respond to each of them?

Amy Silverman: (35:29)
Yeah, please.

Chase Maher: (35:30)
The commingling of funds now every state is different. So I want to disclose to every state’s, our association realtors, like you know, bylaws and all that is different. But the NAR, the national association of realtors, has like some overarching themes. And so the commingling of funds, the only thing that I know about commingling of funds yeah. Is specifically with client’s funds, not your own income and expenses. Is that what you were referring to?

Amy Silverman: (35:59)
I think I had understood it as my own stuff as well and now I’m not sure if maybe that was state specific or maybe I just wasn’t even understanding it correctly. That’s obviously possible. Uh, yeah I got the impression cause at that time I hadn’t started all this Michigan stuff. I was just kind of dealing with my rental income from I Denver properties and yeah, I kind of got the impression that like I had to keep that stuff like that really, really separate and like, you know, even just expenses that I wanted to have, the business expenses had to be really separate and I dunno, I just was very like turned off by it. But now that you say that, I feel like I should double check because maybe I misinterpreted it.

Chase Maher: (36:41)
If you did misinterpret it, obviously. Totally. Okay. If it’s state specific and I’m wrong, then Hey, I’m totally okay with being wrong. But definitely let me know when you look at it, but the way that I understand commingling of funds is many States will still have the realtor handle the deposits or handle, you know, earnest money deposits for their clients, things like that. Here in California there’s escrow and so everything’s done. Third party, we don’t touch any of that, but the commingling of funds from what I understand it is let’s say I’m a realtor, I’m representing a buyer and they’re going to go put an earnest money deposit down. I can’t take their earnest money and like put it in my bank account and just let it sit there for a couple of days. I have to put it in a either a trust account or take it straight to, you know, title or escrow, whatever it is in your state. Realtors are essentially independent contractors, so for our own expenses and revenue and income and all that, it’s no different than any other independent contractor. We run our books for ourselves personally and that has nothing to do with the, the commingling from how I understand it here in California. Also in a couple other States that I’ve done business in, so might be something too look at. But again, for your business model, I don’t think it’s necessary. And then the broker and the fees, just like you said, there’s lots of brokers out there that are virtual that allow you to do your own branding. You don’t have to put there team name anywhere and all that stuff like home smart exp. There’s a lot of great brokerages out there that have low fees. My favorite thing of why I, and full disclosure, I was a luxury real estate agent for a few years before I got full time and real estate. And so I didn’t get my license as an investor. I got it as a realtor that wanted to get into investing and now I’ve kept it rather than getting rid of it. And the reason why is because I do a lot of lead generation for wholesaling and flipping and a lot of those leads don’t work for my business model. And now I’ve a, I’m able to add a full six figure income to, uh, my business that is simply, Oh, this lead doesn’t work for me. Click email referred to a agent partner that I have preset agreement with and when that closes, I get a large chunk of their commission and then that is able to work at scale in multiple different markets. And so it’s a great tool and a great benefit in that sense. But I could totally see why with your business model it would be a distraction or even a, an opportunity to get hit with fines or some other BS that you don’t want to be dealing with. So I don’t think anybody is wrong here. Not that I went into this trying to prove anybody wrong, but I just wanted a, you know, share.

Amy Silverman: (39:33)
Yeah, well that’s a really good point. Like, yeah, if you can, you know, pass or leads around that easily. Obviously that’s, you know, worth every penny and worth every headache that might come with it. I mean, and now that I’m doing so much in Michigan, I mean I’m going to have to weigh the option of maybe getting myself license out there or maybe just, you know, trying to partner with an agent. I was already licensed out there, whatever, you know, that might be the easier way to go because then there’s also the whole like you have to disclose your license, which isn’t, I don’t think that’s really like a deal breaker in any of my deals. But things like, you know, you have to disclose any like damages and issues that you know about what the houses, sometimes it’s easier to just no mention everything. I mean I don’t even see the houses. It’s kind of easy for me to just not know, but I don’t know one of those things where I kind of have to decide if maybe now being able to use the MLS and things like that will become worthwhile out there.

Chase Maher: (40:30)
Yeah, totally. And you might even find in my be even more beneficial to just get with an agent that will do a reduced rate to have all of your listings or something like that. That way you don’t have to deal with any of it. Okay, well that ends our, our little debate session. I think you know, Amy is it very intelligent and is totally right in that respect. And then if there’s anybody out there that’s doing a bit more of a wholesaling model and you want to learn how I do my referral income, feel free to DM me. I’m happy to share. Moving on, Amy, I like to ask everybody because we all know that real estate is all a, you know, roses and peaches, but in reality I call it roses and hand-grenades. Can you share with me a mistake that you have made, maybe it might be with your tax deed auctions or your Denver rentals, but a mistake that you’ve made that you like to teach others so that they can avoid it.

Amy Silverman: (41:27)
Well, I mentioned buying a house at the auction pretty impulsively, having researched it, so that would definitely be one. But I’ll go into another one since I already, you know, kind of said that. Wait, you’ll be, there is usually I’ve taken the time to really like prescreen my tenants for my rental properties pretty well. Like I like to always meet them in person and myself and really talk to them and yeah, things like that. And of course, you know, the one time that I decided to sort of like rush the process and like not screen my tenants that well of course, you know, those turned out to be like nightmare tenants who decided to bother me every single month about every single little thing and have been like just in a a nonstop headache. And you know, it was just one of those classic lessons that everyone tells you. But like it’s worth it to screen your tenants. Well like by doing it, doing the work up front, we’ll save you a whole year, you know, of, I have a headache so I’d definitely suggest taking that time. And if you can do it, you know, and if you’re, if you’re the type who would rather work with a property manager and have them do it, of course great do it that way. But if you know, if you, if you are doing going hands on, I really suggest taking the time to actually yeah, meet people in person, do the screening through cozy as well. Like you know that combo should kind of get you the best possible.

Chase Maher: (42:46)
Amazing. That’s a really good tip and something that is so simple but so overlooked that I know when I first got started I was like, I went through all my first rental, three bad tenants in a row. It was in a section eight area and I just thought that everybody was nice and everybody would take care of my property and who cares if they have bad credit or low income. I just didn’t know any better. And now I got to the point where with the help of cozy I’m able to screen them much more diligently and I’m able to get extremely, extremely picky about the type of person in terms of their income. And their history in the property. And now, I mean, I still, I love section eight properties because I get that the rent on the first of every month, but now I’ve had tenants in there for five, six years at a time and it’s, it’s a beautiful thing.

Amy Silverman: (43:42)
Exactly. That is the dream when they just stay and you guys can just get into your little flow and yeah, that’s, that’s worth, worth it all.

Chase Maher: (43:50)
And another overlooked thing that I’m sure you have a lot of experience in is somebody might be thinking, well then just get a new tenant in there. But it costs you money on turnover. Every single time you have a new tenant move in, you have somebody move out, you’re paying for the property to get cleaned, you’re paying for repairs, you’re paying for the mortgage payment while it’s sitting there vacant, you’re paying for advertising and marketing and to get a new tenant in there. And then you have your time on top of that. And so turnover ratio is one of the least talked about expenses of rental property owning. And it’s one of the ones that is almost easily avoided by doing the work up front. So great tip there, Amy. I appreciate that.

Amy Silverman: (44:31)
Yeah, and I agree it is. Especially the time like I, that is the one time I actually have to like work and I hate it. So yeah, you, it’s worth it to avoid that turnover whenever you can. And another thing is you can’t, if you end up with a tenant you don’t like, you can’t just end the lease like Elise is a lease. Like you still have to let them, you know, either do something that violates it or you just have to suffer basically. Like there’s, there’s a lot of protection for them to, you know, stay once they have signed. So. Yeah,

Chase Maher: (45:03)
absolutely. And to that point, I’m sure you figured out, but there’s a couple little Ninja things that you can do now. Don’t nobody, if you’re listening, don’t ever abuse this, but a couple of Ninja things you can do in your lease are like, you can put a clause in there that they can’t have any flags at the property. No political flags, no flags or anything like that. Maybe you accepted American flag, you can put a clause that they can’t put any sheets in the windows. They have to be blind. These little things that are very common that people do that if they’re a great tenant, Hey, who cares? But there are little outs that you can have in your lease,

Amy Silverman: (45:40)
right? If you need to violate somebody. Yes. Yes,

Chase Maher: (45:44)
exactly. So, okay, Amy, as we’re wrapping up, I would love it if you would share maybe a book or a podcast or a person that you follow or listen to or read that really has changed the game for you and your entrepreneurial endeavors in your investing career. Is there anything that just comes to mind?

Amy Silverman: (46:04)
I’m a big podcast fan, you know, had hence why I’m here. No, I will definitely suggest the podcast that’s called the millennial real estate investor. I really love that one. Um, it’s Denver based that I don’t even know the guys. I just happened. I’ve found it and love it. And then there’s another one that’s called shut up and invest. That’s a great one. Especially if you like, yeah, kind of what I’ve been talking about with these land contracts and note selling, they have some really good content on that stuff.

Chase Maher: (46:34)
Awesome. Thank you very much. And if there’s a magic time machine that takes you and I forward five years in, you and I are hanging out either on Twitter or in Denver and I ask you Amy, you know, how did the last five years go in your business? And you say amazing. What would have had to have been done for that to have happened?

Amy Silverman: (46:53)
I will need to stop trying to do it all myself. I’m really realizing it. I’m at that point where I need to employ the people I need to employ to, to be able to scale and grow and do this on a [inaudible], you know, on a bigger level without it becoming an even bigger like stress and nightmare for me. So yeah, that means me actually like building a team, teaching people how I do this and trusting them to kind of take the reins a bit. Of course I’ll, I’m, I’m just, I’m a very naturally on person. I’m kind of a control freak admission, but that’s, you know, that’s why I do it. Well that’s why I’m here. I don’t, I can’t work for a boss, like I have to be able to make my own decision. But I also realize in order to really, you know, to enjoy life but also to scale, there just has to be more people on my team. And so yeah, that’s, that’s going to be the major component that I need to, to get where I want to be in five years.

Chase Maher: (47:53)
Incredible. I am so fortunate, uh, to have the team around me that I do. I really suggested Amy, if you want any resource on that. Dylan Dole did an episode with me. He’s a 24 year old investor out of Richmond and he’s hired a VA and there was very cool tips and systems that he shared on the podcast. It, uh, it came out today actually today that you and I are recording this. And so if you feel like checking that out and he shares like pretty much everything he has his VA do and it was phenomenal.

Amy Silverman: (48:25)
Oh, that is exactly what I need. I’m going to listen to that for sure.

Chase Maher: (48:29)
Yeah, it was super good. He’s got 20 units and he manages all of them. Just him and his VA, which is very, very cool. And then last question before I ask about where people can find you. So you cannot mention your consulting dot. Your consulting website. Again, number one, actionable tip for somebody listening to this that just resonates with you, Amy. And they say, you know, I want to buy my first rental property. What’s the number one actionable tip?

Amy Silverman: (48:54)
Get out there and narrow down as specifically as possible what exactly you want. And then you reverse engineer from there what it’s going to take to get there. So you’re going to need to figure out, you know, how much you’re going to need on a down payment on a loan. Like do you qualify for a loan right now? All of those are going to take, you know, different resources to get the answers to. But the first step is knowing exactly what you want to buy. So do you want it to just be like a small condo? That’s cheap in your area. Like that’s a great starting point for a lot of people. Or are you looking for something like a multifamily that she would live in? It doesn’t matter what it is, but you have to really narrow in on like the Mo as specific as a property as possible that you ideally confined and then figure out what it’s going to take. And maybe you have the down payment you need already and you can start moving forward, but maybe you have some more saving to do whatever the case may be. You’ve got to figure out exactly what that is so that you can make it happen.

Chase Maher: (49:53)
I agree. Niches are in the riches. Amy, where can we find you? Your website, social media handles and we’re going to put all this in the show notes, but just so that you can mention it as well.

Amy Silverman: (50:04)
Yeah, absolutely. So yeah, my consulting website is called silver Springs consulting.com. Uh, you can definitely find me there. And I also have lots of, uh, resources and other things that are, you know, just interested in. I have some notes for sale if they are even, and then the other place would be defined me as Twitter and my handle is silver invest. So definitely follow me, send me a message, I’ll follow back. I love interacting with people. So yeah, looking forward to growing my network.

Chase Maher: (50:31)
Awesome. Thank you, Amy. I appreciate it. This was a lot of fun.

Amy Silverman: (50:34)
It was great for having me. Thank you.