Section 8 Housing: Pros, Cons, and Your Key to Consistent Cash Flow w/ Josh Bauerle

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades and who has time for that? So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So, again, collectingkeys.com/scale. Go ahead and apply, and we'll see if you're a good fit.

Josh Bauerle: [0:38] The rent is guaranteed. Right? The government is paying it. At some point, we're gonna hit a recession. More traditional, especially lower income rentals, you're gonna get hit hard when people start losing jobs. I know that this rent's gonna come in every single month no matter what.

Mike DeHaan: [0:51] What is going on, everybody? Welcome to the collecting keys real estate investing podcast. Today is Monday. It is our scale show. And on these Monday episodes, we like to do interviews with owner operators and people that are really in the depths of trying to operate and grow their real estate business. And today, we have somebody that is not a scale community member, but is right along the same lines of the typical member that we have over there. Josh Bowerly out of Columbus, Ohio. You are a real estate investor, flipper, wholesaler. You do buy and holds. You got introduced to me through Shelby Johnson and her team that she runs over there in, I guess, Lexington, Kentucky, but she has her national conglomerate that she's growing. But, yeah, anyone that Shelby usually recommends is a is always a good fit for the show, dude. So super excited to have you on and hear more about what you are doing over there in Columbus. So to get things kick started, why don't you give me a quick three minute rundown, who exactly you are, kinda what your business looks like overall, and what your primary role is in your business?

Josh Bauerle: [1:54] I'm out of Columbus, Ohio. I'm actually a CPA as well. Had a tax practice, built it up, sold it, started a new one, built it up, and sold it.

Mike DeHaan: [2:01] So you've sold out twice? Sold out? Twice. Oh, nice. And then

Josh Bauerle: [2:05] went all in the real estate, and now we're up to 29 rentals. It will be when we close on our ones that we have under contract. We flip anywhere from three to seven year and then throw out a few wholesales a year.

Mike DeHaan: [2:16] Sweet. That's awesome. And so with those holds that you have mostly, like, single families, we're looking at small multis.

Josh Bauerle: [2:24] Yeah. So out of those 29 units, it'll be 24 properties. So one five plex and a couple duplexes.

Mike DeHaan: [2:31] Yeah. Couple duplexes. You got a bunch of single families over there in Columbus. Are you so I guess they all in Columbus, or are you sort of branched out?

Josh Bauerle: [2:37] All in the Columbus area. So we actually we started building it in 2017 in my hometown, just a tiny little rural town in Ohio. Okay. Built it up to 28 units, sold all but three of them, moved to Columbus, and now we're building it back up, and we're up to 29.

Mike DeHaan: [2:50] Nice. So you you've sold two businesses and an entire portfolio over the course of not an incredibly long time. How long have you been in business for?

Josh Bauerle: [2:59] Real estate, 2017. We we bought our first property in 2017.

Mike DeHaan: [3:03] Okay. So you've done these three, like, big exits. Why don't you just stick with something, dude? You keep wanna start a

Josh Bauerle: [3:09] You know, I know. It's weird. I I like the building. I I like to build it up, and then I kinda get bored and and move on to the next thing.

Mike DeHaan: [3:15] Then you cash out and move on. That's alright. And so with this the setup that you have, do you still do any CPA work at all? Are you 100% on real estate now?

Josh Bauerle: [3:24] So actually, the first business I sold, he came back to me recently. He's having me do a little bit of sales work for him. Okay. That's what I liked. I was just getting on talking to people. Nice. And then I just the, beneficial ownership interest. Have you come across that that you have to fill out this year? Yeah. I created a little side thing, helping people fill those out. But other than that, not much tax work.

Mike DeHaan: [3:42] There you go. You charge them like a $100 and you like do the process.

Josh Bauerle: [3:45] Yep. Couple $100 and get it done.

Mike DeHaan: [3:46] Yep. Tell you what, dude. If you find like business owners like myself, I understand fully that I could do that in like not a lot of time, but I am more than happy to pay someone to do it because I don't wanna figure that shit out. It's such a pain in the ass. There's always little details. Yeah. So I I have my registered agent that I went and did all that stuff for me. And I was like, no brainer. Just charge my credit card. I don't wanna I don't wanna get fined. Don't have to think about it. Nice, man. That's a good little hustle. Cool. So I guess, like and your team, let's do this first. Is it only you? Do you have any team members at all? Do you have, like, your spouse get involved, partner?

Josh Bauerle: [4:20] Yeah. So my wife's involved. She handles a lot of the behind the scenes paperwork stuff. She always jokes she doesn't want to see the properties or else we'd never buy a property.

Mike DeHaan: [4:27] Yeah.

Josh Bauerle: [4:27] Because she gets scared off by them. She's definitely more risk averse than me. But after that, it's like I have an electrician that I use every time. I have a flooring guy who uses life every time.

Mike DeHaan: [4:36] Oh, nice.

Josh Bauerle: [4:36] I have our people that we call. But even as far as managing the properties, we're even doing all that ourselves.

Mike DeHaan: [4:41] Oh, cool. So you're, yeah, just a nice lean ship. Yep. Taking home a lot of that. That's awesome. So how are you currently sourcing everything?

Josh Bauerle: [4:47] We actually have a franchise with HomeVestors. Okay. And they do advertising and we were doing that. We were doing about 10,000 a month with them for a while. But for the past year, I wasn't getting as big a return on that. So we kinda went into doing our own and we got some great deals with HomeVestors. They have some great great options out there with the the advertising they do. But we started just looking for our own and and felt like we're getting a better return for the past year. We're mostly just going to wholesalers, posting on my own social media what we're doing. We've gotten a couple crazy deals just by telling people what we do, and then they reach out like, hey, my mom went into long term care. I just need someone to buy her house. So that kind of stuff. But, yeah, just all all natural word-of-mouth type stuff.

Mike DeHaan: [5:26] Yeah. The Homebusters thing is so interesting to me because they've been around so long. Right? And so I don't know if you know the history of their company, but they've like retraded to private equity, I think three times. Yeah. And they're so far removed from, like, what originally founded that business. I know quite a few HomeVestors guys through, you know, GoBundance Group that I'm involved in. We actually have a few in my my scale community that we run, our off market investor community. And they all kind of have the same story of where they're spending a lot of money, like $10,000 a month. And the metrics that they get on their marketing and their their KPIs are always so much worse than just running it on your own. And I feel like with buying a franchise, you're paying that franchise fee and you're paying them residuals so that it should be better. Right? Like, I don't understand, like, why that seems to be the recurring theme.

Josh Bauerle: [6:16] Yeah. And it's it's interesting. I mean, there's people that do very, very well with the advertising, and and I bought some incredible deals with the advertising. So I I don't have any complaints or regrets about it. For me, it did come to a point that they stopped being as quality for a while, and I just started getting some really quality leads on my own. Yeah. So, yeah, I think it's a mixed bag. Some people do really, really well with it, and some people, it's they're better off finding it on their own.

Mike DeHaan: [6:39] I talked to a guy up in the Northeast. He's a he's a newer HomeVestors guy. He told me that his cost per deal was like $60. Wow. Right? And, like, that's that's ridiculous. Then he's like, yeah. But I make like a 110, 150 k. Like, I'm yeah. But it's telling you $60,000 to get a deal, dude. My cost per deal is, like, $4. Yeah. Like, that's that's not even, like, in the ballpark. Right. You know?

Josh Bauerle: [7:01] Yeah. That's the 60 grand's really, really, really high.

Mike DeHaan: [7:04] Yeah. Right. So that's not it's not standard. Well, in your market, you'd be completely fucked if that was your standard. Right?

Josh Bauerle: [7:09] Oh, we yeah. I mean, you'd you'd lose money on every deal. Yeah.

Mike DeHaan: [7:12] Yeah. Because your houses aren't aren't, you know, $1,500,000 houses out of sale.

Josh Bauerle: [7:15] Right.

Mike DeHaan: [7:15] So when you start doing that yourself, is it all, like, direct mail? You guys are doing, like, original, like, sort of standard wholesale marketing stuff, or do you have, like, a a super secret strategy that you find works for you?

Josh Bauerle: [7:27] Yeah. I mean, I wouldn't say it's a super secret strategy. We're just literally posting about what we do. Oh, okay. Weeding through the million different wholesalers that that are out there sending deals out. I mean, Columbus market, I don't know you know much about the Columbus, Ohio market, but it's super competitive right now. Mhmm. Intel's coming here. Intel's doing a two twenty billion dollar project here. We're getting Google. We're getting Amazon. So, like, they're calling us the Silicon Valley of the Midwest. It's crazy. And there's a million investors and competition's wild. Yeah. So we just gotta get creative to fund deals, and we're just trying to find ones that people are overlooking like, oh, this is a two bed, but let's go in the basement and put an egress window, make it a three bed, and and now this works as a deal.

Mike DeHaan: [8:04] Yeah. For sure. Silicon Valley, the Midwest. That's funny. I feel like every, like, Midwest town has, like, some company that's moved there over the last five years and, like, they're now the new place. Right? I talked to many people through Ohio, like Michigan. You know, a number of years ago, Madison, Wisconsin was like, you know, the Bend, Oregon of the Midwest. Everyone's moving there for, like, the young culture and whatever. I mean, I think we just acknowledge that there's places that are pretty cool that you've never been and you don't live, and that's okay. We don't always need to try and, like, tell everyone or have some weird justification because the fact that some random companies move in there. So it sounds like it's mostly network based. Do you do any direct to seller stuff outside of the HomeVestors things? Or

Josh Bauerle: [8:42] Nope. Not right now.

Mike DeHaan: [8:43] Not right now. Awesome. Are you planning to? I mean, if you have any ambitions to grow, I can tell you without a doubt, it's the easiest way to get the best deals.

Josh Bauerle: [8:51] Yeah. A 100%. I mean, even just with advertising with HomeVestors, I I saw it firsthand. Like, that's that's the way to go. Totally. So, yeah, I do think someday we'll we'll start advertising like that again. But Yeah. Right now, we're we're growing at a level we're comfortable with. Let's just not do it.

Mike DeHaan: [9:04] Well, my only ask is that if you do do that, don't work with the highs who are right in your home market there because they're the direct competition with what we do. So you can you and me can talk before you do that. We'll we'll we'll spare. But awesome. So walk me through your deals per month again. You said you're doing how many flips, how many wholesales, and how many buy and hold?

Josh Bauerle: [9:22] Yeah. So per year, this year, we really started going hard on building our portfolio up this year. We have done after these ones closed that we have under contract, we'll have done 19 this Okay. Nineteen minutes, which would be fourteen, fifteen properties. Nice. We flipped five. We'll probably flip one more by the end of the year, and we wholesale wholesale a couple of them that we've had come through.

Mike DeHaan: [9:42] Awesome. So about a deal a month on average. And

Josh Bauerle: [9:45] One to two a month. Yeah. That's what we're looking at.

Mike DeHaan: [9:46] You funding everything with hard money, or do you have private investors?

Josh Bauerle: [9:49] Hard money. We have a lender that'll do a 100% of purchase and a 100% of rehab

Mike DeHaan: [9:53] No shit.

Josh Bauerle: [9:54] As long as we keep it under 75% of the ARV minus repairs.

Mike DeHaan: [9:57] So that like a national lender or a local

Josh Bauerle: [9:59] one? It is. Yeah. Yeah. I mean, you have to have a certain amount of experience before they'll go to that level with you, but, residential capital. Okay. Yep. They're really good. My biggest goal, I don't wanna put any cash into any deal. So I get it at a price that I don't have to put any upfront cash, and I know I can refi and pull everything out to pay off the lender and still not

Mike DeHaan: [10:15] Nice. You said they call residential.

Josh Bauerle: [10:17] Have to

Mike DeHaan: [10:17] look at that. Because we've used, like, KIAVI and a lot of the big ones in the past.

Josh Bauerle: [10:20] I've used KIAVI. Yeah. They're okay.

Mike DeHaan: [10:21] Yeah. But now, honestly, I just I've been done well enough. We have my own our own money, and we just buy everything cash.

Josh Bauerle: [10:26] Right. Right. Yeah. Once you get to that point, it's it's gold.

Mike DeHaan: [10:30] It's amazing how much tighter you can buy your deals when you don't have to account for, like, $20,000 in just, like, financing costs on every single one.

Josh Bauerle: [10:37] Yeah. A 100%. I mean, that's I'd buy significantly more if I cut

Mike DeHaan: [10:40] that expense out. Nice. Oh, the funny line up there, and then the actual pipeline that you have, you're all coming from the your referral stuff. So what does the entire process look like for you to, I guess, balance all of that as, like, a sole operator? Because it sounds like you have active rehabs going on. Network marketing and and getting those deals that way is pretty time intensive. Yeah. And, like, in maintaining those relationships, if to manage these closings, you're doing all your property management. How do you do all that? What is your current, like, day to day? Your what systems do you have in place?

Josh Bauerle: [11:14] I would say it's getting the right team. Not necessarily we don't have employees or even contractors that are on demand, but we have the right team where I know as soon as something comes in exactly who I'm calling and what it's gonna be. Some of the higher end, like, flips that we're doing, I use an actual GC on those, and I just don't touch them till they're done and then I go look at them. The smaller stuff on the rentals, I have the whole team in place. I know when my flooring guys go in, when my painting guys go in, when the electrician goes in. So it's just kinda having that dialed in from beginning to end. And on the property management side, I mean, I think people overestimate how time consuming property management is because people tell me all the time, I don't know how you have time to manage all those properties. I spend probably less than five hours a week.

Mike DeHaan: [11:52] Yeah. When things go well

Josh Bauerle: [11:53] With the exception when I have a lot of empty ones to edit out.

Mike DeHaan: [11:55] When things go well, for sure, it's when things get weird that it gets time intensive. So so we self managed our portfolio up until about 58 units. And it was to the point where there was something every week. Right? It was a constant.

Josh Bauerle: [12:08] Right.

Mike DeHaan: [12:08] And where it gets challenging is when you're where we're also doing a high transaction business at that point. You know, we're doing a few deals a week. We constantly had 10 to 15 in escrow. And balancing those things, it's like, are your priorities? It's like, I need to, like, fix the sink that's clogged that I need to, like, order and, like, do this, pay the invoice, you know, get the schedules all lined up, or I can go make this $15,000 wholesale fee. And very quickly, it's like, I just don't wanna deal with the sink anymore.

Josh Bauerle: [12:35] Yeah.

Mike DeHaan: [12:35] Right? And that's where it gets tricky.

Josh Bauerle: [12:37] Yeah. And there will come a point when we we hire we had management for a while. The property managers that we had sold and the new company sucks. We just sent it over. There And will come a point where we'll have to hire somebody again, but for now, it works.

Mike DeHaan: [12:46] There we go. Nice. So, I mean, it's pretty standard. So I guess your day to day then, well, you're just, like, chilling most of day? Like, just go, like I don't know.

Josh Bauerle: [12:54] I play a lot of pickleball.

Mike DeHaan: [12:55] You hit pickleball. Right?

Josh Bauerle: [12:56] Training Training for marathons. I'm doing some running. Yeah. But yeah. I mean, it's some days I'm driving around to 10 different properties, and some days I I have nothing on my calendar.

Mike DeHaan: [13:04] Well, there you go. I mean, you're you're living it then. So I guess what are your like, what are your basic numbers look like? Like, are you are you pretty well open to share that? Like, what's your annual revenue? What's your cash flows? All those sort of things.

Josh Bauerle: [13:14] As far as on the flip side, I would say we've done five so far this year. Probably at about 1.2 gross.

Mike DeHaan: [13:22] 1.2 gross across flips? You're talking about the sale price of the property.

Josh Bauerle: [13:25] Sale price of the property. Yeah.

Mike DeHaan: [13:27] Yeah. I I don't care about that. I wanna know what you actually make. What are you taking home?

Josh Bauerle: [13:30] We've had some expensive rehabs this year. Probably say about $1.75 on those.

Mike DeHaan: [13:34] Cool. That's pretty good. Yeah. I can I can tell you you have a realtor background with Shelby because telling me the the price of the what you sold the properties for? I mean, I I can sell a $1,000,000 worth of real estate of flips and lose my ass. Right? I bought them for $2,000,000.

Josh Bauerle: [13:48] And I know because as a CPA, I know better than that. I know I know that that's what matters. But usually when you're on these gross is what people are asking for. So I like it. I like that you're going into Yeah.

Mike DeHaan: [13:56] I'm I'm not an agent. I'm a I'm a wholesaler. So, yeah, a buck 75 so far. That's that's pretty solid, especially for the Midwest. And then what's your cash flow look like off your rentals? You're you've been buying through these, like, higher interest rate times too. Right? And so assuming you're refinancing into 8%, eight and

Josh Bauerle: [14:13] a half? Yeah. I mean, we're finally getting back into the sixes on these last few refinances we've done, but that's where we did have to get creative to get these at cash flow. Right? That's managing ourselves. I cut out 10%.

Mike DeHaan: [14:22] Mhmm.

Josh Bauerle: [14:22] We're going all in on section eight right now.

Mike DeHaan: [14:24] Oh, interesting.

Josh Bauerle: [14:25] That makes the, rent that we're collecting significantly higher, plus your vacancy significantly lower because they stay forever. So, yeah, that's how we're getting creative. We so we have 900 contracts. So the 20 that we currently have, we're bringing in 21,000 a month in rent, and our cash flow on that's just under 5,000.

Mike DeHaan: [14:43] Nice. That's pretty good, though. And so how many of those are section eight?

Josh Bauerle: [14:46] So we just started going all in on that. Right now, we have seven section eight properties.

Mike DeHaan: [14:53] Yo. If you don't follow me on Instagram, which is at mike underscore invests by the way, then you might not know that we officially have a new mission as a brand, and that is to help 2,000 real estate investors build million dollar businesses. Obviously, to do that, we need to get in front of as many people as possible. So quick little ask to help us reach that goal. First, shoot me a follow on Instagram at Mike underscore invest. Second, follow collecting keys podcast on Instagram. That's at collecting keys podcast all written out. And third, every time the algorithm is kind enough to show you a post from either of us, share it on your story or in your post and tag us. If you do that, I'll DM you and we can have a little DM conversation about what is preventing you from having that million dollar business that everyone is seeking. And we can see if we can come up with a plan to help you make that massive income, not just passive income. So again, if you see any of our posts, just go ahead, reshare them, tag us, and let everyone know that you enjoy the content we produce. It will help us a ton, and then I'll be happy to help you as well. Let's dive into that. That's a good topic because that's something that I don't hear about that being done, honestly, ethically. Right?

Mike DeHaan: [16:05] Like, the only section eight stuff that we hear is just to sustain the freaking Internet. Right? Is there's that guy that goes around that talks about how he, like, leases, like, ceiling fans of people. And if they go and they buy their own ceiling fan from Target, he, like, rips them. Have you seen this clown on Instagram? I don't

Josh Bauerle: [16:19] even I

Mike DeHaan: [16:20] don't even know his name. He's he's obviously, like, a scammer. A lot of people have called him out, but he's always, like, in, like, a mansion, and he has, like, his Ferrari. Like, just the most, like, stereotypical Instagram bullshit ever. And his whole thing is he does section eight because it's, like, they're too poor to move, and the government basically pays your rent. But then he, like, leases them, like, screen doors and fans. And, like, you know, like, the most, like, basic necessities. And if they go and they, like, buy their own and they install it, he'll, like, send his freaking hitman or whatever to go in and, like, rip it out so they can't have their fan. And then he brags about how he buys a $15 fan at Target and then leases it to them for $20 a month. Like, total dirtbag shit. So that's what the world currently thinks about with section eight. So tell me how you deal with this better. I hope, anyway.

Josh Bauerle: [17:08] Yeah. No. I mean, that it gets a bad name all the way around. Like, people don't wanna deal with the tenants. People think you're a slumlord if you do it. Mhmm. So there's a couple reasons why I do it. Number one, it is significantly higher rent, at least in my area. So every housing authority is different, but here it goes by the county, and they strictly look at the number of bedrooms. So there's obviously parts of the county that are very high rent, parts that are very low rent, and they average it out. So in those lower rent areas, I'm getting significantly higher than market value, like sometimes 4 or 500 more than market rent would be. So that's that's the biggest reason we do it. But also, the tenants do tend to stay forever, and I I certainly wouldn't describe it like that guy did. They're too poor to move. I think it's more people don't wanna do section eight, so it's hard to find section eight properties.

Mike DeHaan: [17:48] It

Josh Bauerle: [17:48] is. So when they find one, they don't wanna move. Yeah. And then the rent is guaranteed. Right? The government is paying it. So if we hit a recess obviously, at some point, we're gonna hit a recession. More traditional, especially lower income rentals, you're gonna you're gonna get hit hard when people start losing jobs. I know that this rent's gonna come in every single month no matter what. Yeah. The other thing is that Section 8 almost acts like an assistant property manager for you. Right? Like, they're on the tenant with you. And if the tenant's not doing what they're supposed to, not only can they get evicted, they're gonna lose their section eight. And for them, that's like that's their life. Right? Like, they don't they're not gonna trash your property, get evicted, and lose Section 8 for for the most So I'm not saying, like, you're not hanging this over their head. Like, I've threatened them every little thing they do. I'm gonna go tell section eight on you. But if someone's not treating your property right or not paying their small portion that they have to pay, that is something that's hanging over their head that I better get this done or I'm gonna lose my my section eight.

Josh Bauerle: [18:38] So I think we get much better quality tenants for these areas.

Mike DeHaan: [18:41] Makes sense. So I know Ohio tends to be a swing state. Is Columbus more like on the blue or red side?

Josh Bauerle: [18:47] I would say Ohio no longer is a swing state. They're they we've gone pretty red. Columbus is, I would say, leans more blue with Columbus itself, and then the suburbs are kinda in between.

Mike DeHaan: [18:58] Okay. So that's always something that's interesting is hearing how the section eight process works across political lines. Right? And so up here in Washington, we have one property, the Section A. It's a little six unit, like, apartment complex. And, I mean, it's great when you get it set up, but there's definitely hoops that you have to jump through. And there's like they they they're pretty strict on inspections and everything like that, which is fine if you're not a dirtbag trying to do weird stuff. But the thing that's really tricky is they have absolutely tried to crack down on people trying to, like, take advantage of the situation. Because, essentially, they have, like, a window in time where you can request a rent increase every year. And you can only do it once a year. And if you're outside the window, you gotta wait until the next window. And so what can happen is, like, you buy a property and they're like, oh, well, the rent increase window was last week. You gotta wait an entire year before you can request rent increased again even though you just bought the home. And so there's like these little things that come around that are kind of funny. But overall, I mean, it's it's been great.

Mike DeHaan: [19:53] Although the only time it's been a real pain in the ass, we had a tenant die, like, in the property. And the rules around how we have to handle that with it being a section eight person versus inner tenant were a lot trickier. Interesting. We had a whole thing that we had to do where we had to basically keep all of their stuff in like a storage unit. We had to give like the next of kin the ability to like take over the rent versus finding like a new one in case they had like a kid that was also in a hard time or a spouse or something. And ultimately, it led to is we had like a vacancy for like four months, which sucked because of all the paperwork that we had to do. But outside of that, that's the only real hiccup that we faced.

Josh Bauerle: [20:32] Yeah. I have not dealt with a tenant that died yet. But you I mean, you're absolutely right. The front end of Section 8 is a gigantic pain in the ass. It can be very time consuming, especially, like, our housing authority sucks. They just got fired. They're gonna not renew next year, so they're getting different management in place. Like, you can literally be waiting two months sometimes now to get everything approved. Yeah. We've had that too. But once you're done, it's Yeah.

Mike DeHaan: [20:53] People when people, like, apply for it and for them to get approved and, like, to do all this stuff. Like like, the reward you have for going with that is, you said, that the fact they will probably be occupied for a very long time. But the the trade off is you will probably be facing a slightly extended vacancy if you have one when it does come up. For

Josh Bauerle: [21:11] sure. And you're gonna have to be more hands on. Like, if if I had a property manager, I don't know that I would do it because I don't know that I would trust them to jump through all the hoops that need to be jumped through.

Mike DeHaan: [21:19] Yeah. It's fine. Mean, you can find a good property manager. Like, also, our property manager here is actually pretty good at it. But, I mean, it's like every other property manager. The property manager we have here that's good is, like, the sixth one we've had. So we've hired and fired a lot in a very short period of time. Well, that's awesome, man. So I guess as you build that out, you're accumulating doors. Kinda what's your, like, goals over the next, I don't know, couple years? Interest rates come in more favorable. Are you gonna you've already sold out everything three times. You're do it again and then start over from scratch just for fun?

Josh Bauerle: [21:47] Yeah. I mean, I don't know that I envision selling everything again, but, I mean, I I certainly think when an opportunity arises and I'm like, this property has too much equity in it, I don't wanna do a a cash out refi. It's time to sell this property. I certainly think that'll come up. Yeah. That's what I like about accumulating rentals. Right? Like, they can upfront, they're slow wealth builders, but they can also become income in the future. Right? Like, if you have this 40 property portfolio and, hey, I need to make a little bit of extra money this year. I'm gonna sell two properties. You can bring in $300,000 for that year by just selling two properties. Totally. Right? So it can kinda be a combination.

Mike DeHaan: [22:17] Yeah. I mean and and also too for a lot of people, it probably does make sense to take some chips off the table every once in a while. Right. You know? Because the market can go down. You can have large expenses that happen. Your return on equity does start to diminish after a while as the property becomes, you know, appreciates more and the debt pays down everything else. I know some people are like, I hold on to everything forever. My sort of general view has been if you're a serious, like, financial person or a business owner, you need to be analyzing the potential liquidity options that you have to make the most out of your money. Otherwise, you're just not gonna, you know, be able to have as much flexibility as you probably want. For

Josh Bauerle: [22:52] sure. And some people would say, like, oh, just cash out refi. Don't sell it. But sometimes things appreciate faster than rent appreciates. Right? So Yeah. You have this $800,000 house that you can only collect $2,000 a month rent on. So even if you did a cash out refi, you're not gonna cash flow. They're not gonna let you do the cash out refi in most cases. So it just makes more sense to sell in that situation.

Mike DeHaan: [23:09] You just described the Northwest, man. I have a triplex that I bought for just over $300 back in 2019 that I could probably sell for 800 now. And it's just like, I have so much equity in this freaking thing, and it cash flows, you know, $1,800 a month. That's cool. But I could also just have $500,000. Right. I don't care about the cash flow when I'm looking at that.

Josh Bauerle: [23:31] So Right. 100%. And I think that's that's where we're heading in Columbus. We're we're starting to see that rapidly appreciating properties, and the rent increase is gonna slow at some point. So you're just gonna get out of way. Awesome.

Mike DeHaan: [23:40] Cool, man. Well, I think you got it figured out, though. You got a good little lean ship. You can play pickleball all the time. You're making some money. You're accumulating some properties. What do you think is, like, your biggest challenge in your business that you face right now that sort of something that you constantly are trying to to get over and figure out?

Josh Bauerle: [23:55] Yeah. I mean, I think for me, the biggest challenge is I I need to figure out what that first hire is gonna be. Eventually, we're going to have to bring on a team. And where is that gonna be? Where's where's the best use of resources there? And then figuring out how we wanna go about eventually bringing in those leads, whether it's advertising or how we wanna go direct to seller again at some point.

Mike DeHaan: [24:14] Yeah. There's so many different ways can approach it. Right? And anyone that tells you they have the exact way that's perfect for you is they don't know you, and so they're full of shit. Like, you need to look at the whole view. But awesome, dude. You'll be able figure it out, though. You're you're smart. Sweet, man. Well, appreciate all the info that you provided, and congrats for success, dude. It's awesome that, you know, you found, like, a good little niche, you're just cruising, dude. You're living the dream. Right on, man. We're gonna dive into our end of show questions here. First one is always the crowd favorite, but what is your craziest real estate story? And this can be a win, a loss, crazy tenant, crazy deal, you know, the time that you opened a door and there was a water buffalo in the living room, like, whatever you got, man.

Josh Bauerle: [24:56] Yeah. I mean, I went through lots of options trying to to narrow this down. We've had endless crazy stories, but everyone likes a good ghost story. Right? So I got an actual ghost story with the property. We had a triplex, and I first get a call from tenant downstairs. There's an upstairs, a downstairs, and the back unit. And the downstairs person calls me and is like, hey. Did you move someone into the basement? It's just this old stone basement. No. That's no one moved in there. Like, well, is there a door that has access to it? Like, no. That is only through your property. That's the only way in there. Well, I hear somebody down there. They're talking, and I feel like they're talking to me. They're calling my name, and I just think this girl's crazy. She she might have been crazy anyways. So I kind of ignored it. And then she moved out, and the furnace went out. And I had my contractor go there, and this was like rural Ohio, hillbilly, no nonsense contractor. And he goes there to to replace a furnace and he calls me after. He's like, don't ever send me to that property again. Well, hi. What's the problem? The entire time I was down in that basement replacing the furnace, I could feel like someone standing behind me breathing on me. And at one point, my lamp just fell off the shelf. I had it on for no reason.

Josh Bauerle: [26:02] So it's like two for two. This guy, never in a million years where I think he's telling me a ghost story. Right? And then the third final straw was the girl upstairs. A new girl moved in upstairs and she called me and was like, hey, I'm Catholic. Do you mind if I have my priest come bless this place? Because I keep hearing someone walking around in my apartment. I can feel their presence here.

Mike DeHaan: [26:20] Dude, that's fucked. You're like making me, like, have, like, hairs in the back of my neck. I don't like that.

Josh Bauerle: [26:24] Yeah. So this was about as wild as it gets for me. Do you still own it? I even looked up, like, has there ever been a death in the property? I couldn't find anything online. But, yeah, it was pretty wild.

Mike DeHaan: [26:34] That is do you still own it or do sell it?

Josh Bauerle: [26:37] I that was one of the ones I sold, and then it actually I never thought about this until now, but it burned down shortly after we bought it. So No way. That's wild. Yeah. So maybe the person the presence

Mike DeHaan: [26:48] Legit question. Do you have to disclose in the realtor forms that it might be haunted? Do you have to in some states?

Josh Bauerle: [26:53] No. In Ohio, you do not have to disclose that. I've heard you do in some states. Yeah. I don't know. I mean, that's such an like, how do you know the person's lying or not? You know? I don't

Mike DeHaan: [27:01] know. Like, Louisiana where, like, everything's haunted, you know, like, I feel like that's where they have a lot of spirit stuff. But that's crazy. I would sell that property and never go there again. Yeah. That would I would not roll with that at all. That's a good one, though, especially when the contractor gets weird. Because contractors usually such hard asses about random stuff.

Josh Bauerle: [27:19] That's how this guy is. You'd never, in a million years, think this guy's gonna call and tell you a ghost story. So that one that one flipped me out a

Mike DeHaan: [27:24] little funny. Awesome. Alright. Number two. If you could go back to the very beginning, what's one thing that you would do differently?

Josh Bauerle: [27:31] I mean, buy more. I think that's everyone's standard answer. Right?

Mike DeHaan: [27:34] Yeah. But, like, something in your business though. Right? Because everyone can say that, but no one's got a crystal ball.

Josh Bauerle: [27:38] Yeah. If I could go back, I would learn buying off market sooner. When I when I first started, was buying on market for all my properties, and I haven't bought on market in four years. So that would that would definitely be learning that that is possible to buy something that's not on the MLS.

Mike DeHaan: [27:52] It's it's the biggest wealth generation hack that, you know, is out there, honestly. If you buy a $300,000 property for $200, congratulations. You just added a $100,000 to your net worth. It's literally that simple, and people do it every single day. Awesome. Good one. Alright, Josh. And then where can people find you, follow you, and reach out to you?

Josh Bauerle: [28:10] Yeah. Instagram. That's where we post most of our real estate stuff we're doing. Just at Josh Bauerle. Yeah. That's the best place to find us.

Mike DeHaan: [28:17] Cool. And then Bauerle is b a u e r l e. Anybody listening? So Yeah. Awesome. Alright, Josh. Well, dude, thanks for coming the show. I really appreciate it. And you guys, if you're out in the Columbus area, Josh is looking to buy more shit. So go and hit him up on Instagram, send him your deals, and it sounds like he's willing to make some pretty competitive offers, and he is trying to commit a portfolio out there. Take advantage of that. So that everybody appreciate you listening. Share this with anyone that might find it interesting and see you guys next week.