Ep017: Expanding Your Real Estate Portfolio Strategically 

Chris McAllister: Hello everyone. And welcome back to the Landlord Profitability Playbook podcast. I’m Chris McAllister, and it’s my job to create and coach business opportunities and strategies that support and add value to the lives of residential real estate investors. I’m here today with a very special guest. His name is Morgan Cole, and he’s the creator

of a website and software company called Rescover. It’s a cutting edge investment property search and analysis tool that’s helping investors across the country maximize their returns and grow their portfolios. So Rescover, and it’s at www. Rescover. com, it’s more than just a search tool, it’s really a game changer for anyone serious about making smart, data driven investment decisions.

And it’s what drives our new Roost Investment Gateway website. Morgan has over 15 years of experience in real estate, and he’s got designations like CCIM and CPM, um, and a deep, deep understanding of the industries. And he understands the challenges that investors face today. And the number one challenge that successful investors face today is their inability to identify, uh, potential new properties to buy.

So today over the next hour or so, we’re going to dive into Morgan’s journey, the story behind Rescover and how it’s empowering landlords, investors, and real estate professionals to succeed in today’s market. We’ll also explore some practical tips and insights. Insights that you won’t want to miss. So without further ado, let’s welcome Morgan Cole.

Good morning, Morgan. Good morning, Chris. Thanks for having me today. Well, thanks for being here. I know you’ve got a busy week and it’s right before Thanksgiving. So I appreciate you taking the time. I’m really excited about this today because. I think the Roost Investment Gateway is the most exciting value add service that I think we’ve ever offered at Roost Real Estate Company.

And as I’m talking here, I’m going to go ahead and share my screen so people can see what this looks like. So let me get that opened up, and I want to show everybody what that looks like. So under here at invest, Proust Investment Gateway. So here’s a sense that here, this will give you a look at what the page actually looks like that I’m going to be talking about.

And, and I’m so excited about this and it’s such an enhancement to our company that we’re going to, of course, have this conversation on the Landlord Profitability Playbook podcast. But we’re also going to feature this on the All Things Real Estate podcast and on our Connect, Practice, Track, and Grow.

Podcasts for real estate professionals as well. So shall we have a conversation? I’ve been monopolizing our time. 

Morgan Cole: No, you’re you’re okay, Chris. I love all that. I think that was a great way to set the stage and I’m flattered that you, that you feel like this is such a valuable, uh, and, uh, feature on your, on your website.

You know, we certainly are, are very, uh, very enthusiastic about what we’ve created and glad that you share that same enthusiasm. 

Chris McAllister: So what inspired you to create this, create, re scubber and tell us where you got the name and all that. 

Morgan Cole: Yeah. Great question. So, um, you know, as you mentioned, I’ve been, I’ve 2008 and helped, uh, several people buy quite a lot of houses.

And we generally did it searching the MLS and we searched for for properties that were for sale or I searched. I was the wee part of that. And, uh, and, uh, I would have a inkling of a neighborhood, an area, a city, a zip code, whatever that I thought would have houses that had good, uh, You know, uh, purchase prices and rental rates.

And then I would use Excel and I’ve built, you know, elaborate spreadsheets in Excel that, that I would use to, to analyze the properties. And, and that works fine. I mean, I really wasn’t sitting there thinking, gosh, you’re doing this the wrong way. Um, but as time went on, uh, years went by and, and in 2017, I decided that I wanted to automate this and make it also a resource for my clients.

So mind you, I mean, I’m a, I’m a real estate broker today, but I don’t work with, with, with buyers to, to buy properties anymore. I, I run discover. Um, but in 2017 I hired a, a web developer to create, um, I mean, I think we called it like the investment property finder or something like that. And it was a WordPress plugin for my website.

For my real estate brokerage clients to be able to go in there and search the MLS and find good properties. And it evolved and it evolved and it evolved and people would tell me, Morgan, this is bigger than your company. You need to, you need to offer this to more people. And so we, we later, we kind of changed into, um, focusing on property management as you do.

And I went to the realtors in the area and I said, listen. I’ll give you access to this tool so that you can find houses to sell to your clients if you’ll refer the management business to us. And so we did that for a little while, but again, it was, Hey, this is bigger than your management company anyway.

And it finally grew. Um, you asked about the name and at the time when we started offering it to other realtors, um, we called it RentLizer, R E N T L Y Z E R for rental analyzer. And we, we, we, we came to some, some people didn’t really understand the name. They had a hard time pronouncing it. There was another company that has a product, which is.

Not in any way the same, but they call it rentalizer and it’s like a way of determining short term rent rates. So we had a conflict of naming there. And, um, so I was just brainstorming one and I thought of all these names. I mean, I must have thought of 50 different names that were all these, these like, cause like at one point Zillow was not a word.

Neither was Trulia, right? And so I was like, well, I can invent a word. And, and I bought these domains that had, you know, seven or eight characters that were a word like prozinga or something and, and weird stuff. And one day I was thinking about discovering real estate and I was like. I was like, I wonder how I can make like a contraction out of that kind of, and I was like, R E for, for like, you’re actually doing something like, like re is like the beginning of a verb.

And then, um, Discover. And I just thought of re scupper and, um, the domain was not available as a new domain. I had to buy it and I spent a lot of money on it. Um, but I like much, yeah, I’ll tell you, I spent 3, 500 buying the re scupper domain. Someone bought it. That’s 

Chris McAllister: more than worth it. I thought you were going to tell me like 35, 000 or something.

No, no, no, no, no. That’s for 

Morgan Cole: me. That was a lot. Some domains you can get for 500 bucks and a new one’s like 10 or 12. But I was like, no, this is it. And I, and before I bought it, I told four or five people that had been down this journey with me. I’m like, what do you think about Rescover? And they’re like, that’s it.

And so many people had just said, that’s it, that we went with it. And, um, it was a pretty big change. Have you ever changed the name of your company, Chris? Well, 

Chris McAllister: no, but it’s funny when, when people ask me, how’d you come up with the name Roost? My response is, well, Zillow was already taken. So to find something that, you know, can be licensed by the state, you know, cause they have very strict rules as to what you can call a real estate company, something that’s not currently in use, you know, when you do a pretty basic web search and then to find something that can be trademarked, um, You know, it’s a long, long path, and at the time, years ago, I was working with a graphic designer, and he came up with some names, and I ran it through those three filters, so to speak, and we finally settled on Roost, and I don’t want to get into it, but so now we Actually have the, uh, the use of Roost real estate CEO in Nashville, Ohio, and Florida, because somebody beat us to the punch in Philadelphia with a short term rental apartment building.

Morgan Cole: Oh, man. 

Chris McAllister: So we pay them money every year to, uh, have full use of the name in those three states. And, uh, we have some alternatives when we get outside of those states someday. But, uh, that’s how we came through it. The other thing that’s very similar in what we’ve been through is. I did the exact same thing coming out of 2008 and the crash, I sold a crap ton of bank owned houses all the way through 2014.

I had a team and we must have sold over 400 list sides a year for a good 2, 3, 4 years. And I did the same thing. I used to turn back then to best bets and I had an Excel spreadsheet. That I would collect all my best bets every single week religiously and then push those out to all of my investor clients, you know, every week and I, I, I had the idea that I was going to have to start doing that again and then it was just too overwhelming to do it in a larger market like Columbus and, you know, as I was wrestling with that, you know, I met you and, and here we are.

Morgan Cole: Yeah, well that’s, uh, that’s, that’s excellent. It’s funny how we both had kind of the same story of where we were originally. Uh, working in real estate and, and, um, yeah, it’s, it’s been, it’s been a long journey for us and we’re in no way done. I mean, you know, we’re always finding ways we can improve the software or we go to a new area and we find out that they do something different with real estate there.

And so we have to be sure that we accommodate that those differences. Um, but it’s, it’s really been cool seeing people across the United States start to use this thing that I created. Uh, for my own personal real estate company, you know, years ago. 

Chris McAllister: That’s super cool. Well, why don’t we, um, have you, uh, share when it, when you walk us through the site and why don’t we start with you walking us through the Roosting Investment Gateway site and show us how that works, what we set up for our company, and then we’ll move over to the Rescover website.

Morgan Cole: I think that sounds like a great idea. I just need to rearrange this one thing on my screen here so that I can keep us and my, uh, screen going at the same time. 

Chris McAllister: There you go. Looks good. 

Morgan Cole: And, uh, I think we’re, I think we’re okay now. So, the, um, the Roost Investment Gateway, which as you pointed out is available by going to, uh, invest.

Just go to the 

Chris McAllister: invest, uh, dropdown there. 

Morgan Cole: Yep. And then investment gateway. So, um, what, what Chris is doing on a, on a regular basis is he’s going into the discover website, uh, the kind of more of the backend of what powers this. And he is searching for properties that would be good investment properties.

And so he’s, he’s pushing a button on our system. And I’m sure we’ll take a look at that, uh, to feature them. So it’s Chris just saying, Hey, look, I’m here. I’m in this area. I know what makes a great investment property. And I’m telling you that if you wanted to buy a property, start here with these featured listings.

So what we can see here is he’s got, what did it say? 10, you’ve got 10 properties here that are all active on the market and they would be good buys. If you were a real estate investor now, I know that a lot of the properties that Chris finds and that he focuses on are going to be multifamily. Um, so a lot of these are multifamily, if not all of these, but I’m sure that you’ll see a mixed bag where you could find single families that Chris would be featuring and multifamilies, uh, that he’d be, that he’d be featuring.

Chris McAllister: And right now we’re only seeing, uh, today Columbus featured listings, but it looks like as early as, so probably after Thanksgiving. Um, we’ll also have featured properties from, uh, the Space Coast area of Florida, and we’ll also have featured properties in, uh, uh, western Ohio from the, uh, wrist MLS, which is the greater Springfield area up through Urbana.

South to Xenia and then back east towards Columbus. So that’ll be a nice large area of Ohio that will have featured properties and full search capabilities on the Roost Investment Gateway, hopefully in just a couple of days. 

Morgan Cole: Yeah, I’m glad you brought that up. It’s actually really cool that on your website we can aggregate listings from those three MLSs that are, that are all what, what make up the market that your company serves.

Um, so provided that a client is, is, is really simply just happy with Roost and happy with Chris and says, Hey, Chris, listen, I’m a buyer. As long as you’re involved in managing it, then you can go to those multiple markets. And, and yeah, we’re in the final stages of adding those two additional MLS is, um, it’s a, it’s a couple of things with some property types that we just need to match up and be sure that your website’s displaying, uh, some, some fine details correctly, just like it’s currently doing with, um, CCOR, I think is the name of this MLS here, right, Chris?

Chris McAllister: This is, uh, CBR. This is Columbus, uh, Board of Realtors. Columbus 

Morgan Cole: Board of Realtors. Okay, excuse me. 

Chris McAllister: Click on the all MLS listings so people can see that. So, just, uh, for kicks, why don’t you just pop 

Morgan Cole: in 43201. Okay, so what I’m going to do here is in this zip code entry bar, I’m going to type in 43201. Uh, right now it only supports searching by zip codes if you’re going to do a location.

Um, so I typed in 43201 and it’s telling me that there’s 69 properties in that area. Um, that that we should be looking at and so you can see here that it’s giving you the purchase price on this. Whoops. I always forget if I click that to highlight something, it’s going to open the property up. You can see here that it has the purchase price and then based on some defaults that that that Chris has in his account, one of them being a 25 percent down payment.

Um, plus some, plus some fees associated with getting the loan and whatnot. It tells you what you’d have to invest. Um, it tells you what the cap rate is expected to be, and it tells you what the internal rate of return is. Also some like little minor details about the house. So size, bedrooms, bathrooms, when it was built, and how long it’s been on the market.

Um, so this property here, let’s say that we like that one. It’s a, it’s a price that, that’s, that’s probably, uh, attainable for, for a lot of real estate investors. It looks like it’s either new construction or. Well, not new construction, it’s remodeled, though, built in 1900. Um, so by opening this up, first, what we get to see is the is the photos of the property.

So we can get a look at, we can get a look at this and wow, the front looked a lot better than the back, but I suppose this is a 1900 house. So that’s just what it is. Um, But, uh, wow, that’s a, it’s a nice property. I mean, this is a nice 

Chris McAllister: job on the rehab. 

Morgan Cole: Yeah, they did it. They did a nice job on this. So what we’re seeing here is the purchase price simply driven by the list price.

You might decide that you’re going to pay less, or maybe in some markets you’d have to pay more, which you can adjust. So let’s say that we think maybe we can get this for a little discount. I’m going to pull that down to 360. And now my metrics over here, you probably didn’t have your eye on that, but those were changing as I was adjusting that, um, down payment, we have it fixed at 25%, you know, provided that that’s the loan type that you can qualify for, then you could leave that alone.

And then the rental rate on this property, this is total rent. So this is not a, if this was a duplex or anything, this is not per unit. This is the total rent that it would bring in. This is our system. Um, has, uh, has it’s called AVM, which is a industry wide term for automated valuation modeling. We have AVM data for every residential property in the United States and what we think it would rent for.

Now, this is a perfect example, Chris. This house was built in 1900. Our system probably is aware that a lot of the houses in this area have been heavily renovated and look like this. But in some areas, this might be the first one that was done. And so our system might not know that it, that it’s an area where properties are being upfitted and that they could rent for more than one that was.

It’s only most recently remodeled 40 years ago. So that’s a great starting point on the rental rate, um, but it’s not necessarily, you know, the guaranteed rental rate, 

Chris McAllister: but it’s also cool that you can change that slider. So if you think, wow, I think, you know, I’ve got one in the neighborhood that, you know, I know I’m going to get 2199 or something, then you just, there you go a little bit.

So 2200, and then that changes your. projection and your internal 

Morgan Cole: rate of return projection and all that stuff. That’s right. We can see how those are moving in those metrics. You know, Chris, I think, you know, you know this, but these are the standard metrics by which investment real estate is, is generally measured.

So cap rate is the relationship of the net operating income to the purchase price and net operating income. You can actually see at the very bottom down here. Um, what we have, the annual property operating data, net operating income is before a loan payment is made. So this has nothing to do with, with one person has a loan at a certain rate or a certain period of time, and interest rates are changing.

That’s not, that’s not what’s going to cause the calculation of the cap rate. It, it will cause cap rates. Mar market prices to change. But, but the, but the net operating, excuse me, the cap rate is the relationship of the net operating income to the purchase price. Um, and if you just want to take a brief second to look at this.

What we’re seeing here is that, is that based on that rental rate, we have it set right now at 2, 500 a month, which is 30, 000 of potential income. And then we figure we’re going to have some vacancy. Um, then we have tax and insurance. Um, we have property management, leasing commissions, a budget for property maintenance, and that gives us our total expenses.

So if you take that away from the effective rental income, you get your net operating income. Here, our loan is more or less the same as our, uh, sucking up all of our, of our, um, net operating income. And then we have a budget for capital expenditures, so like long term, you know, roof replacement, things like that.

arriving at our annual cash flow. 

Chris McAllister: Yeah. And I love this so much because so many of us, especially new investors, and I made this mistake, God, sadly more than once. We, we, we, we don’t necessarily take into account. All those expenses or future investments, whether it’s, you know, vacancy loss or, you know, what’s going to cost to turn it between tenants and so forth.

So then to show those reserves, I think is really smart. The other thing I want to point out to everybody is I think the system knows the property tax, but it’s using local history or a set parameter for what property insurance might cost. And, uh, for instance, on this house, Our property management. So I don’t know what you’re using for property management lease commissions that doesn’t necessarily correspond to exactly what we do, but net net.

I think it’s a great place to start. And it allows us to compare one property against the other. So all things being equal, we’re using the same parameters across every property. So when you’re looking at, say, a dozen potential properties to purchase, you know, at least you’re, you’re, you’re looking at apples to apples.

Morgan Cole: Great. That’s a great point. You are using the same set of criteria. So when you see one, uh, thrives and another one not really meeting your objective, know that they were analyzed similarly. Um, I can tell you a couple of things on the vacancy and the leasing commission. We, we have a parameter in there that we can look at when we go to the full risk cover website.

For length of stay and in this case we, but we had it set for three years, so it’s actually dividing the, the, the, the burden of the vacancy out over three years, that’s because 

Chris McAllister: that’s nice. 

Morgan Cole: Otherwise, what you have is, um, we call that the difference between the raw figures and normalized figures, because it makes it too choppy.

You don’t want your NOI to get heavily beaten up in the first year and then have 0 for vacancy and 0 for leasing commission and year two, and then probably year three, and then year four, it turns over. So now we’re getting heavily beaten up, you know, that’s the cash flow, but when people analyze real estate, they, they average out.

The cost of vacancy. And so that’s how we, we go through the trouble of smoothing that out by and that’s your, 

Chris McAllister: that’s your CC. 

Morgan Cole: I am designation speaking that’s a, that’s kind of a nerdy way of, of, of handling it, but we, I really, um, have enjoyed how much I was able to learn about the, the right way to analyze real estate and then take that.

And bring it, you know, to be fair in, in residential real estate investing, it’s uncommon to go to this level of detail. Um, this is, this is not what people usually do is create a 10 and 30 year forecast for how they think the house is going to perform and look at capital expenditures. And it, but it’s great though.

I mean, it’s, it, we’re covering all the bases. You’re looking at everything here and, um, You’re not just saying, Hey, what’s my loan payment? Oh, will the rent cover that? Yeah, it’ll cover that. Okay, great. Let’s do it. No, we’re, we’re looking at everything here and trying to find the best ones. 

Chris McAllister: And honestly, I would much rather have, you know, our current investors that work with us now in property management and future investments, investors who haven’t bought their first house yet, you know, err on the high side when they’re estimating.

You know, the cash flow and so forth. So even though, you know, we do a flat rate monthly management fee, I think next year in Columbus, it’s a 95 a month. Um, and then our lease fee is one month’s rent. So net net, that’s a little bit small, but I still always want to undercommit and over deliver. So I like that those numbers are, are super realistic for lack of a better term.

Morgan Cole: Well, good. Yeah. And I can show you there’s some adjustments we can make sometime, uh, to, to the, to the model it’s used on your website if we need to adjust it, but I think it’s important to have the most realistic numbers. Um, you know, you, you don’t, you don’t want to, I mean, I’ll, I’ll tell you when I very first got into real estate investing, I had a client who was buying mobile homes.

And he told me he would buy every mobile home we could find that had a 15 percent cap rate, which is by today’s standards, astronomical. Well, we had unrealistically low. We were given advice on what it would cost to maintain and operate these mobile homes. But that advice was bad advice. And in our financial model, we had unrealistically low.

property maintenance, vacancy, and other things like that. So, by having low maintenance figures and low operating costs, we were making the net operating income very high. Right. Yeah, you, you, you were, 

Chris McAllister: I call that magical thinking. You’re 

Morgan Cole: right. 

Chris McAllister: What 

Morgan Cole: actually wound up happening, though, is In reality, he was, he was getting them for probably a 10 percent cap rate when you had the correct amount of expenses relative to the purchase price.

But at the end of the day, they were still a great, so he had an unreasonably high cap rate hurdle with an unrealistically low budget. But we brought that together and a tool like this will help you to be making the correct decision. Um, and, and if you really are driven by cap rate, I’ll show you here.

You can’t just magically make a house rent for more money. I mean, if the market is 2, 500, the market is 2, 500. But if I said to Chris, Chris, I’ll buy every duplex. You can get me or whatever. That’ll give me a six and a half cap rate. Well, then we can figure out that if we can get this property for 315, 000, then that’s a 6.

5 percent cap rate. And probably we can’t, or maybe we can. I don’t know if this one’s overpriced, but, but at least we know, hey, that’s, that’s what we’re shopping for. And so I need to be trying to buy this for 315 so I can hit my desired cap rate. 

Chris McAllister: Can you go back to the main page and show us how to sort by cap rate?

Morgan Cole: Yeah. So what you can sort by IRR, not cap rate, but yeah, so we have these filters right here and so we can sort by days on market. Common way to search for real estate is to find the ones that are either the newest or the oldest listings because. That’s, you know, important information. Of course you have price and then we have internal rate of return.

Uh, it’s a little bit of a complex topic, which is probably beyond the scope of, of really going into it on this, on this podcast, but it’s, it’s the internal rate of return tracks, all the cashflow in and out of your bank account related to this investment for the life of the investment. So if you made a 10 year investment.

And you put a hundred thousand dollars in, and then one year you made five and one year you made 15 and one year you made eight, and then you sold it at the very end and you walked away with 200, 000. It takes all of those cash flows that come and go, and it brings them down into an annualized return, and that’s your internal rate of return.

Um, so. It’s, it’s important when you’re looking at real estate, if you’re willing to take into consideration, the fact that your loan is going to amortize over the years and go down and that your property is going to appreciate over the years and go up. The only way to include the amortization, the appreciation and the cash flow into the analysis is to be looking at the internal rate of return.

Chris McAllister: Right. 

Morgan Cole: Um, so 

Chris McAllister: we can, we can sort those and, you know, sometimes you’re going to see a high IRR and you click through and you say, well, that doesn’t make any sense. But if you scroll down a little bit and just say if you’re, I know it doesn’t correlate exactly, but, you know, let’s say that you want a 10 percent IRR and you can just scroll down after sorting that way.

And let’s see what we have to choose from. So, well, you can find the 

Morgan Cole: causes. 

Chris McAllister: Yeah, yeah. That’s super cool. So it gives you a way to sort and then anything that comes up, um, with, I think we, I think the best bet has to have an 8 percent IRR unless it’s a new listing that just looks hot and I just choose to feature it, but we try to just feature the properties.

On the best bets, uh, page, um, that have at least a, I think we said a 4 percent cap and an 8 percent IRR just to have a place to start. 

Morgan Cole: I think, I think that’s right. Actually, I’m going to go over to your website and I’m going to tell you what I’m going to do is I’m going to go to your best bets. You have it right here.

Yeah. Yeah. Cap rate of at least 4 percent IRR release date. So that 

Chris McAllister: featured house there on Lockbourne, you know, to me, that’s. That’s an interesting house now, and we’ve got 54 days on market there, so you have to wonder if it’s not already under contract if they might be interested in something closer to 300 rather than 320.

Morgan Cole: There you go, and then you’d be driving that, uh, you’d be driving that cap rate up by, you’d be, now you’re at 4. 4. Would this rent for, um, That feels right. That’s 

Chris McAllister: for both sides, that feels low actually, that’s a double. So I you might be able to squeeze a little bit more out of that. I mean, that’s right.

Yeah, but we may be closer to 1000 or 1100, especially in that condition 

Morgan Cole: per side. Yeah, I would think. I mean, I would think so about 1000 square feet per unit. So if you go up to 2000. And you buy it for 3000. I mean, now we got, now we got a 5. 1 percent cap rate. We’re looking, we’re looking pretty good on this one.

Chris McAllister: Let’s get done with this podcast. I got to go buy a house. Right? 

Morgan Cole: I know. I know. So, so do you want to go over to the Discover site? And yes. Yeah. A couple other things that can be done. Yeah. Because the 

Chris McAllister: other thing I want to make sure that you explain is. You know, we, and I don’t know that I fully understand this, but I, you know, I think we have the ability to, you know, give our, our owner clients, our existing owner clients, special access to this site where they do more things, um, that they, that they can’t do on the, uh, Roost Investment Gateway, but we can give them special access to the Discover site and they can do their own safe searches and things like that.

So I’d love to hear you talk about that. 

Morgan Cole: That’s, that’s exactly right. So, so here on the discover site, the search interface has more controls and over time. And I mean, early next year, you will see more controls come through to the to the website. Um, we’ll add, we’ll add a map, um, in both interfaces. You can only search in an area by zip code right now.

Um, but we are going to be rolling out early next year, literally anything you could define real estate areas by. So it could be a, it could be the neighborhood, a city, a County, a school district, an individual school attendance zone. Um, we’re going to make it to where you can type in practically anything that could reference a shape and our system will show you that.

So we’re, we’re really eager to get that, to get that out there. Um, but yeah, so if I’m looking here. On, on, on the Discover website, I’ve typed in 43201, but I’m going to click this little now that I’ve moved the map into that area, I’m not really so particular on just that zip code. I just wanted to get into that area.

Uh, so here we have Ohio State University. Um, maybe we like, you know, the idea of being in this area. So I’m just kind of like Northern Columbus. And I have this button that says search this area, so I’m going to push that, and now it’s going to search in that entire area. Um, and it, and it does take a moment when you do a search, if you can imagine what our system is doing is it’s grabbing every single property that’s listed in that area and it’s running a detailed 30 year financial analysis on every single one of them in real time.

So it might seem like it’s hung or something, but it’s really that you’ve just asked the server, maybe to crunch a ton of numbers and it’s, and it’s having to do some work. So the, the, the other controls we have here, which to be fair, price and whatnot is, is on your website. So we have price, we have beds and baths and things like that.

But when you’re on the Discover website, if you reach out to Chris and say, Hey, I’d like to, I’d like to have access to the, to the whole thing. Um, you can save your searches, which is, which is really nice. So I’m going to go and say, I’m going to filter, I don’t want to own anything that’s less than 150 and let’s just say 500 is my top for right now.

Um, which I think will looks like there’s plenty of properties, but see this one at 70. I don’t want to buy that. I don’t even want to do the project. Um, I’m going to leave Try and look at 

Chris McAllister: the multi. Let’s see if it’ll, if there’s any multis in there. Let’s see if it’ll 

Morgan Cole: do the multi. There we go. This is where we’re trying to get the, to finalize some of the work on, on the other two MLSs.

So look at that. Now we’ve further refined this to multifamily 150 to 500. Um, I’m going to save this because I actually, I actually want to do this. So I’m going to go Northern Columbus. It’s multifamily 150 to 500 K safe. So it’s now saved that search. And in my search settings, I can tell it to run that search automatically for me and email me.

Um, and it can do that, uh, daily, twice daily, or even hourly if you, if you have that turned on. So it can send me email results, and, and I’ll immediately be able to see that. Right now, how 

Chris McAllister: many, how many of those can I do for people based on our current subscription? 

Morgan Cole: Um, I think you have 20 clients that you’re allowed to put into their Chris.

So quite a few, um, that you can, that you can have searching inside, discover underneath your account. Um, and so I, I can show you when you, when you open one of these up, the other cool thing is that, you know, your name is going to appear. Next to the, next to the listings. So I’m logged in as me and I’m configured as my own professional, but when your clients log in, they’ll see your name there.

Um, so the thing is that when you, when you go to the Discover website, you see so much more data. Um, and I was there one. I don’t think this is a good, this is not a particularly good and that’s not the best. 

Chris McAllister: I just am so enamored with the fact that we can narrow down and sort and so forth. So this is probably not the best area for multifamily.

Like, I think that’s actually they’re selling. Like that, that’s a fair one. That’s a nice looking one. Let’s 

Morgan Cole: check that one out. So, so this one here, uh, 300, 000. Uh, it’s proposed that the total rent that it would bring in would be 2, 900. Um, what do you think about that high or low Chris? It feels right. Yeah.

Okay. So, so that’s, so that’s the amount we planned to bring in, but now we can come over here and look at this pro forma and we can see, okay, if we invested 79, 000, well, how do we invest 79? Well, we’re going to buy it for two 94. We’re going to pay some title charges and then we’re going to get a loan for 75 percent of the purchase price.

We’re going to pay some loan fees. And now that’s how we’re about 80, 000 invested. And if we invested that over 10 years, that would grow to be 334, 000. Between cashflow appreciation and amortization, which is pretty awesome. Um, that’s 

Chris McAllister: why 

Morgan Cole: we do 

Chris McAllister: real estate. Yeah, 

Morgan Cole: but I should say 

Chris McAllister: that’s why we do real estate for the long term, right?

This, this, this is about, this truly is about buy and hold and diversifying your portfolio for the long term. This isn’t going to help somebody who’s looking to get rich quick flipping properties, but this is going to help somebody make. the right decisions for, for, for what, what potentially can happen 30 years down the road.

And that, that’s a big distinction that I I’ve never seen another product aligned with. 

Morgan Cole: I think that’s a really good point. You know, if you look here in the first year, this one’s actually pretty great. I mean, it’s bringing in almost 8, 000 expected in the first year, but look at this over time. I mean, this starts to get to be more than double that.

Uh, I mean, this one 

Chris McAllister: almost seems too good to be true. Like we really want to go look at this house and see what, yeah, is this another one I have to buy today, 

Morgan Cole: right? We’re going to, do some serious shopping after this. I want to show this though. If you’re interested in seeing the cyclical nature of, of your real estate investment, there’s a toggle up here that says raw data.

When you turn on raw, you can now see that in the first year, that vacancy. And so when you compound the vacancy with the leasing commission that you’re going to get hit with in the first year, we’re, we’re predicting much lower income. It was almost 8, 000 and now it’s. 3900. Wow. I never 

Chris McAllister: noticed that toggle.

That’s 

Morgan Cole: fantastic. It’s a pretty cool. It’s a pretty cool deal. And then you can see, Hey, we’re expecting a couple of great years. And then we’re back to turnover year. And then a couple of great years. Again, we don’t want to unnecessarily beat up the performance metrics in the first year because that’s not how people analyze real estate.

So we smooth it out. And by default, we show it as normalized. So there you go. That’s sweet. Um, yeah, something, something worth seeing there. Um, And, and, and you can also see if you’re interested in knowing about the schools in the area, uh, you can see, you can see the schools. This one does not have, uh, schools with very high ratings.

So if you’re, if you’re searching for properties that have higher school ratings, that, that could be a tab to pay attention to. And then this one’s always interesting to me. To be fair, this is a, um, university area. So there’s going to be more renter occupied dwellings, but this is showing us the breakdown between owner and renter occupied homes in the zip code.

Um, white versus blue collar jobs. And then household income. I mean, knowing, I couldn’t look at these and say this is definitely a college, but knowing this is a college, it makes sense. You got a whole bunch of people that are not necessarily employed, but you have a whole bunch of white collar workers that are, that are, that are in the area.

And almost everybody’s a renter. That’s just kind of interesting to see that. 

Chris McAllister: And that’s a lot, that’s, that’s a lot of what’s, you know, Central Columbus. Is really, really about what the university area and close to downtown. All right. So this is super cool. What else? What else do we need to show 

Morgan Cole: them on this 

Chris McAllister: site?

Morgan Cole: Well, the last thing I would look at is if you really are on the site and you want to dive in, um, head over to the parameters tab. And if there’s something about this deal that you think you need to change, so whether it’s that you want to work on this with Chris and y’all are going to adjust the numbers together, or you want to edit the numbers on your own.

You know, if you think you’re probably not going to get better than a 7. 5 percent interest rate for this property, go ahead and change it. Um, if you think you need to spend 15, 000 fixing up the property, put it into rehab. Um, here’s that vacancy. So if you think people are only going to stay for two years at a time, you can change that right there.

Chris McAllister: That’s great. Yeah. 

Morgan Cole: And then on the expenses side, this is where we have. Our tax, our insurance management. So what you charge 95 per unit. Is that right? Chris, 

Chris McAllister: we do 95. Well, it’s I think next year it’s 95 for a single family home. And I think we’re at 70 or 75 per unit on a multifamily. 

Morgan Cole: But let’s say 1 50 because this is two units.

So this would be 150. Uh, total commissions. 100%. Okay. We have that. Do you charge a renewal fee? 

Chris McAllister: 250. 

Morgan Cole: Okay. So if you see I’m clicking the dollar sign to change the field into a dollar versus a percent, sorry, you said 250. 

Chris McAllister: Yeah. 250. Okay. If they choose to actually sign a lease, if they just go month to month and raise the rent, we don’t charge a renewal, but that’s 

Morgan Cole: fair.

250. Right. Yeah. No, that’s pretty, that’s that. I see that quite a lot. Yep. Property maintenance. So here we have 4 percent of gross income for property maintenance and 4 percent of gross income for capital expenditures. A lot of people use a figure like eight to 10 percent total.

Chris McAllister: That depends on, on, on how, what the condition is of the property when it’s purchased and put into service, you know, what it’s going to take to maintain over time. But if a property has been recently rehabbed, um, or maybe in a higher income area, you know, you can get to four, maybe a little less, but if it’s something is in a, uh, lower income area, you know, I, 

Morgan Cole: I would check that out.

Yeah, something like that. So the final thing that I’ll show you is now these numbers have all changed to reflect what we’ve done there. But let’s say that I want to create a PDF of this. Well, I just click the PDF button. It takes a moment. It’s a five page PDF that it’s building here. And it now has taken everything that we’ve done and it’s turned it into this PDF.

Uh, it would have Chris’s logo up here and Chris’s head shot. That is really cool. And yeah, and now we have everything we just did. So maybe you have a lender that you need to take this to so that you can show them this property or you have a business partner, or you just like printing out all the PDFs and looking at them on your desk or taking them with you when you visit the properties.

So this is a, this is a pretty great PDF that you get to, uh, That you get to create and it, you know, it has all that same information that we were looking at there and there’s your school data and everything. So 

Chris McAllister: myself and my team can can create those reports for anybody who, you know, we’re working with to purchase property and then for, um, you know, we’ll offer access to our Um, I don’t know if I like the phrase top 20, but we do have some management clients that own quite a few units with us that we manage a lot of units for them that will definitely want to get them, um, you know, the first batch of that of those 20 logins so they can run their own reports and so forth.

Morgan Cole: Yeah, it’s a really neat thing. I mean, especially somebody who’s looking at buying more property to be able to go in, I mean, going into the website is awesome, but when you really want to get granular and look at all the different tables and metrics and everything logging directly under risk cover under provided by Roos.

Uh, is, is really, is really a nice thing. Um, and I’ll say on the Roost, by the way, on your website, Chris, people can create a PDF. Oh, cool. Which is this, it’s the exact same PDF. Um, here it’ll have your branding on it. Oh, it’s Microsoft Edge is, is mad at this thing right now. You just have to click refresh.

It’s so funny. I don’t, I don’t know why it doesn’t. Nice. Um, yeah, so, so here’s what it would look like, uh, if you created that PDF and even though every single one of these metrics isn’t on the roost website, they’re all on the PDF. So if you said, Hey, love this property, want to take a deeper dive, just click that PDF button and then, and then you get the whole thing.

So you had me sold months ago without even going through all of this. You didn’t even know that that button was on your website. I didn’t even know that button was on my website. That’s that’s true. That’s funny. So 

Chris McAllister: Morgan, if you could, if you could give one piece of advice to, you know, our current, uh, landlord clients or to potential real estate investors, you know, what, what might that be?

Morgan Cole: Wow. Um, I would say, you know, that, that, that when I got into doing this, I was helping people buy real estate. I was in my mid to late twenties and at least one person said to me, and they, and these guys were 20 or 30 years older than me. And they said to me, wow, I couldn’t even imagine what I would have today.

If I had started doing this when I was your age and. I did. And you already mentioned earlier on this podcast that it’s the long term, um, real estate really is a long term play. And the earlier that you start, the better off, the better off you’re going to be. That is 

Chris McAllister: so, so critical, Morgan. I mean, you know, you’re going to look at some of these houses and it’s going to be obvious that you’re not going to get rich quick, you know, in a year on these houses.

Right. And I don’t know that those days are coming back anytime soon. Time soon. I kind of hope they don’t because that’s not good for anybody. But the key to this is it’s about the long term and knowing that, you know, you’re going to wake up in 10, 15, 20, 30 years, and you’re really, really going to have something.

And, you know, I, I’m, I’m a bit older than you, but I finally got enough perspective that I can look back and those properties that I’ve held onto for the last 20 years since I’ve started. Holy crap. What a difference to, you know, my, my personal financial portfolio 

Morgan Cole: and 

Chris McAllister: I kick myself for everything I’ve ever sold.

I think I’m going to make the point going forward is I never want to sell another property and I want to live another 30 years just to watch them compound. 

Morgan Cole: It’s a, it’s an amazing, it is, it is real estate is one of those things that it’s slow. It’s a slow moving business. Um, even the, you know, you want immediate gratification when you make an offer, like you want to make an offer.

You want to a seller to respond instantly and you want to buy the thing. But even that takes time. And then the getting it ready and renting it out. I mean, I’m sure that you work very efficiently and quickly, but it’s a, it’s a methodical thing that takes time and you have to make decisions that have multi year horizons on them.

And so, you know, I don’t think I could tell you anything other than it’s, it’s a long, it’s a long game and, and by using a tool like this to size up the long term, um, I think that you’ll, you’ll, you’ll find yourself being successful when, when people, when people legitimately lose their shirt in real estate, it’s because.

They were, they were banking on a flip going perfectly. They were banking on the market just continuing to go up and they’re gonna buy today and sell it six months from now for more money. And we all saw that most recently, everybody saw that in COVID where. Prices went through the roof in 2021, I think 2022, the beginning was still good, but the end of 2022 is when things started to fall off.

And I mean, you even had like Zillow, Zillow was buying houses from people at the top of the market in 2021, just believing they would sell them for more in 2022, Zillow lost their shirt and exited the real estate business. They had a short horizon and, and that was, that did not work well for them. 

Chris McAllister: I always tell people, you know, in the real estate business, property management, and as an owner, those, those couple of years of COVID, they were like one long snow day, right?

You know, we, everybody had money. All the tenants had money, you know, interest rates were still low. Investors were buying tenants. I’ve heard people say that during COVID, they had problems collecting rent They couldn’t navigate the eviction process or the courts, but I got to tell you, our rent collection during COVID was just fantastic.

COVID was simple, right? All the money was coming in because everybody had extra cash. Investors were buying because they had cash and, um, it was just, it was just way, way, way too easy. And then, like, into 2022, 2022. And for us, I saw it start to break hard in March and April of 2022 as the assistance started to dry up, then people started to struggle with rent.

And then as people started to move out, right? Then we started to see the true condition of the properties because, you know, people were in there for at least two years or longer period. You weren’t going 

Morgan Cole: in home and seeing them and maintaining the 

Chris McAllister: inflation hit and, uh, Oh my God. COVID was easy, but the two years after COVID both for us, you know, as, as property managers and salespeople, as well as for our owners.

It’s been a tough couple of years, but I really feel like at this point we’re We’re turning the corner in terms of, you know, tightening up our operations, being able to offer, you know, value added services like, like this. I mean, my God, if you really do want to add to your portfolio and you’re scanning a MLS as big and as involved as Columbus, there’s just no good way to do it, that your product is giving all of our clients and future clients an opportunity to sort through so much data and, and give them a place to start.

So again, 

Morgan Cole: I thank you for that. Yeah, well, thank you, Chris. I, I’m, I really, uh, I’ve enjoyed being able to talk about this on here and I’m looking forward to watching you continue to use this and grow and see how your clients can all benefit from it. 

Chris McAllister: Absolutely. Well, thank you so much for joining us today on this special episode of the Landlord Profitability Playbook.

Morgan, it’s been incredible hearing about your Rescover journey and how this tool is changing the game for real estate investors across the country, not just our folks. So at Roost Real Estate Company, we’re always looking for ways to add value to our clients lives, and the Roost Investment Gateway, powered by Rescover, is a perfect example of that commitment.

Whether you’re a seasoned investor or just starting out, This platform can help you uncover opportunities you might never have known existed. If you’re ready to take the next step in growing your portfolio or simply want to explore how Rescover can make your investment decisions smarter and more profitable, visit us at roostinvestmentgateway.

com or you can visit rescover. com and take a look at Morgan’s site. And if you’d like to get personal access To Morgan site with your own login and so forth. Just, uh, uh, shoot me an email or we’ll put a link in the show notes. Now, don’t forget, this episode is available. Um, all we, this actually is gonna be the first episode that’s available on our, uh, new YouTube channel we’re working on.

So you’ll be able to listen to it on your favorite podcast platform, but hopefully in the not too many days, we’ll have this on a YouTube channel as well. So, Morgan, once again, thank you very much. And until next time, this is Chris McAllister reminding you that when it’s time to expand your real estate empire, we are here to help you do it.

Thank you so much. Thanks, Chris.