Preston Landes: He Bought 40 Houses at Once… Without Even Seeing Them | DSH #1629

I'm satisfied right now. I'm making good money.
If I paid off my entire debt, obviously I would be clearing over six figures a month.

But if I instead use money to go and redeploy, I could maybe make more money but have more debt. So you kind of gotta lay out that risk to reward.
And I'm kind of in the process of doing so.

Again, that 40 house portfolio, this is something big I'm on. It's just jumping in the pool, whether you're not a swimmer.
It's the same way. It's truly just how you learn the fastest.

It's how you learn. So and we're young enough to be able to

have another chance. And this just goes in general, right? Like you need to cut the stuff, the bad stuff out of your life, whether it be people, places, habits, whatever it is.

If it doesn't build you, it's not helping you.

Okay, guys, digital social hour. We got Preston Landis here today.
First in-person podcast for us. And we're going to talk Section 8.
Yep. Let's do it, baby.
I've heard of it.

I've seen a lot of posts about it, but I've never took a deep dive. So I'm excited to.
Yeah, yeah, yeah.

It's something that I would say has become very popular lately, and especially with social media and all these people that are posting about it and how lucrative it can be, especially with times of an uncertainty like we are, you know, like we have right now.

You know, my payments are still arriving.

So, you know, whenever the first was a few days ago, I still got paid.

The government shut down. Housing subsidies are not affected.

So again,

Section 8 is great.

For a lot of people and their strategies, it doesn't make sense, but for me and my strategy, it does. That's interesting.
So you mentioned the shutdown, so that's actually a good point.

So you're still getting paid, even though the government's shutdown. Correct.
And I have heard of some, because there's different public housing authorities, right?

And the HUD essentially distributes different funds, allocates different funds to different housing authorities.

And I've heard of some housing authorities being 15 days late on the payments.

I have not not heard of, in my network of people, anyone not being paid at all. Interesting.
So, again,

you know,

I have traditional rentals. I have Section 8 rentals.

If I could transition every single traditional rental over to a Section 8 rental, I would. Wow.
Even given all the uncertainty with the Section 8 space. Because it's been around since 1974.

It

and, you know, government housing subsidies in general have been around since the 20s, the 1920s, but

I don't see

any president or anyone ever making

seven or eight million people homeless, right?

Because that's the number of people that are on Section 8, or just government housing subsidies in general. So, yeah,

I find it fairly,

you know,

safe as far as an investment.

If you're familiar with triple net leases at all, I'm not. It's essentially a

more

corporate thing. So, like a CVS would sign a lease with someone who owns the building, right? And they would, the triple net stands for

insurance, taxes, and upkeep of the property, right? So, it's essentially just mailbox money, right? You don't have to do anything with these triple net properties, these commercial deals. Got it.

And so, with Section 8,

there was a low barrier to entry, which sort of of interested me

and intrigued me.

And I started off my first deal.

Well, let me rewind a little bit and start from the beginning. And I'll give you a very brief synopsis of kind of my story and

how I scaled my portfolio from zero to 100 houses.

So basically what happened was

About three and a half years ago, I started looking into the space.

I

was really intrigued by it. I loved the idea of owning real estate, tangible assets.

And

obviously, at that time in my life, I was working in commercial real estate and I was making decent money, but I couldn't go buy some 16, 30, two unit apartment complex.

So I started off with one house, as most people do.

And I bought a course from Tom Cruise, who you may or may not have seen on Instagram. I have.
He's the guy I see all the time. Yeah, he's got all the crazy cars.
He's got got thousands of houses.

He has about 800. 800.
And they're all paid off. That's insane.

He's insane. So back in 2022,

I signed up with him.

And

I will say Tom provided immense value to me and

helped me with a lot of things along the way.

I

don't have anything bad to say about him. Yeah, I know he's controversial.
Yeah, but

that sort getting into that course obviously was, you know, a lot of with the courses and stuff cost me and total around seven grand. Wow.

And

in essence, what my goal was to

was to buy a house for $2,500 down because that was what he was advertising. That sounds really cheap.
Is that 20% down?

No, no, no, no, no, no, no. These are cheap seller financing deals.
But the people that are selling these deals are targeting homeowners that don't have maybe the liquidity or the credit to buy it.

But

when he sent me this first deal, it was that exact situation. And I didn't know how that system worked at the time.
But again, Tom's so busy.

He can't handle all these thousands of people that he has to deal with.

So I close on the property. It somehow passes inspection.

45 days later, I get a

call that my roof has collapsed. Jeez.
The back half of the roof collapsed. So obviously, Section 8 orders an immediate move out, as you can imagine.
And

I get a few quotes, and the lowest I got was 15 grand. Oh, my gosh.
So now I'm thinking I just spent seven to learn, about three with closing costs to purchase my first property.

And I have to pay 15 grand to fix this property.

You know, I'm, I'm,

this business is a not for me.

And

to give you a long story short, basically the same thing happened with the second house, right?

And at that point, I was in the process of offloading those two properties because I was in different ventures doing different things.

And I was in my head going to go back and work in commercial real estate.

And again, obviously real estate is,

you know, residential real estate is semi-liquid.

So as I was in the process of offloading them, A wholesaler who I had never spoken to somehow got my information and reached out about a deal in Macon, Georgia, which is about an hour southeast of Atlanta.

And the deal was, it just looked too good to be true. And so I, you know, spent a bit of time going back and forth with them, the seller, the whole, it was through a wholesaler.

And eventually I decided to purchase the deal and place a tenant. while I'm simultaneously kind of fixing things up with the first two properties.

And

that third house was sort of my first glimpse of hope right maybe this can work right was that a section eight house um that was yes and so what happened there was i it was a seller finance deal as well i had to put more down

but the lady she was an older lady and she financed it back to me at three percent and this was in i purchased this property in november of 2023 so rates were much much higher they were like 100 yeah all you know dscr loans were quote quoting around yeah nine to ten percent wow it was insane at a point and

you know i guess back to

the road so i get to i buy i buy the fourth house and

i'm just addicted to the cash flow at this point right even though i had that bad experience right i'm still addicted to that that that feeling i got when i got the check from the third house so you weren't even profitable yet you were just i was i was in the cash flow i was in the red okay i was using money that i had earned had saved up and i was in the red big time

however

um after that fourth house again everything was good i'm getting tenants in here going through the process with the housing authorities they all move at different paces so

my favorite market montgomery alabama which is my largest market that i'm exposed to

it they move quickly So I'll give you an example. This morning, I sent an email and my property manager sent an email, CC'd me, and they responded responded within 10 minutes.
Wow.

So

that is a big factor of the Section 8 business and being able to scale, right? Because

if you have a housing authority that takes days to respond to, say, an inspection, or, hey, we need this from you, or we, or they need to process this document, and they take four days for everything, whereas Montgomery, it takes a day for them to do this.

Yeah. You know, you can imagine it adds up, right? That castle that you're losing out on adds up.
That's some really great advice because I'd imagine most people don't even think about that.

Yeah, yeah. And so, you know,

that's a huge part of it. And so at that fourth house, I basically ran out of money.
I won't say basically,

I ran out of money aside from money I needed for my personal life. Money to invest, I ran out of it.

And

I was basically just at this point where I had no other option but to go and find other people to raise money from.

So I kind of go back to the drawing board and think, how can I do this?

Ironically, about

a month after everything sort of stabilized, so this is probably

either late 2023 or early 2024. So you got the roofs fixed and everything was

everything was good. We got everything stabilized with those four.
But again, I had the problem of I have no liquidity. So

I'm trying to figure out how I'm going to be able to raise the capital, right? Because I don't have a ton of experience.

And from what I've had learned up until that point, I was going to charge absurd interest rates to borrow money from any lender.

And it wasn't that my credit was bad, but it was I needed to close quick. This was, again, a seller finance deal.
It was a 10-house portfolio.

The guy that brought me that third deal that kept me in the business

brought me this portfolio. It was 10 units, 10 houses.
Essentially what I did, and I don't mind sharing this, is I put the property under contract

and not having a damn clue how I was going to close on it. Wow.
But I knew that if I did not put it under contract, that someone else would snatch it up.

This was the same day the wholesaler sent this to me.

So

I was in a bit of a time crunch. So I basically signed the contract.

I have seven calendar days to submit the earnest money, which for those who don't know who earnest money is, it's basically just you put up a deposit as your good faith, faith, so to speak, and after a certain period of time, it becomes non-refundable.

So I put up the earnest money out of my personal funds that I had remaining.

How much was the earnest? The earnest money was $10,000. Which was probably a lot fewer at the point.
Which, again, left me with little to nothing.

And, you know, obviously I have credit cards and stuff. And I had money

still coming in from these other houses. Right.
So,

I mean, I live in LA, so not enough to cover, but money coming in. So I put $10,000 up.

I

am basically just scrambling to figure out how I can raise this money. Because that deal, I believe, was I had 14 days before my earnest money went firm, which means non-refundable.

And

I was so confident in the fact that I could get the deal done that during those 14 days, obviously I was day and night hunting for lenders.

I thought I had someone. They backed out.
So then I have to come to the decision. Do I want to bail from this deal or do I want to roll the dice with my $10,000 that I really need

and try and get this property? Or, you know, so I really was at a fork in the road. And I decided that after that,

when that 14-day mark hit, I was going to go and raise the funds.

So I rolled the dice.

And

to make it a long story short, I found

probably 200 to 300 wholesalers and copy-paste, messaged them my buy box, everything I wanted to buy down to the T.

And then

emails just started coming in. Deals started coming in, deal flow was crazy.
And I basically just took that model and replicated it a few times.

Right. And then I was like, okay, I want to get to a point where I'm not just buying nine houses at a time or six or eight or ten.

And so the last portfolio I closed was 40 houses, which was

for about a month a complete nightmare because there was 11 vacancies. Whoa.
Which was a curse and a blessing because we got to go in there and play Section 8 tenants immediately, right?

There was no, hey, get out, you know.

But it was a bit of a headache at first because there's a lot that goes into that. Yeah.

And there's also a lot that goes into transferring, you know, 40 different people over to 40 different, like we have a portal that our tenants pay through and they pay their portion of their rent through

and I have tenants that don't pay any rent yeah they only have to pay like three percent right well it varies so I have some tenants that pay me 28 bucks

I have some tenants that pay me zero dollars and I have some tenants that pay me you know

I think the highest is five of five of three yeah it depends on the state or no it depends on their income okay so it's all depends on their income and the rent amount is all depend on bedroom count so I could have a 2,000 square foot three-bedroom house that would rent, that could rent for the same amount as a 800 square foot three-bedroom house.

So it's all based off of, you know, bedroom count.

So

basically, all that happened. I got to that point.
And

now in my life, I have reached a point where I,

in a way, have,

after I closed on those 40 40 properties

it was this dopamine hit that I've never you know encountered before

and now

and there was so much upside to the deal and now I see that those deals are out there and I'm just so hungry to go get more and I know the formula I know how to raise the capital I know how set up the cap stack I know how to do all the stuff

but one of the things I want to touch on just for anyone that's watching that wants to learn is

the management aspect of

Section 8 investing because I've never been to Georgia or Alabama. Wow.
And I own 62 in Alabama and the rest are in Georgia. That's impressive.

So

I've had nightmare situations happen with the management. Not imagined.

I feel like it's inevitable in real estate, whether it's Section 8 or just

in general. Yeah.
And so I've had multiple

cases where I should have probably gone out there.

Back in the day, I had a house in Birmingham. It was the fourth house that I bought.

That house ended up burning down. Holy crap.

To give you a long story short,

the tenant was,

again, from my understanding, I talked to the fire marshal, was doing some sort of

meth,

and I guess maybe something caught on fire. and yeah, the house burned down.
But we had replacement cost insurance. So we got to, you know,

we got cut a check from State Farm and the work that needed to be done costed less

than what we, you know,

the check was from State Farm. So we were able to kind of pocket some money there and then we just have this burnt house that, you know, either we can

use the money and fix, or we can just basically demo it and sell the land and keep the proceeds. What did you decide? We decided to fix it up.
Okay.

And I've since offloaded it because we put, you know, it looks nice, right? We had $80,000 to put into it and

it looks nice and we just I just decided to sell it because I believe in

the power of

At most two markets, being exposed to at most two markets

Ideally one, but I can't sit here and talk because I'm exposed to two.

At one point I was in seven different markets. Holy crap.
Yeah. Are you talking cities or? Well I was in Toledo, Ohio.
I was in St. Louis.

I was in Albany, Georgia, Macon, Georgia, Montgomery, Birmingham.

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Hmm, there was one more. Togo.
And you felt like you spread yourself too thin doing. Well, it just it didn't make sense from a management aspect, right? Because,

you know, everyone wants to get paid

right from the management standpoint. And if they're managing one or two houses, they don't have a huge incentive to,

you know, when there's a call at your property to get out there ASAP, if they've got another guy that's got 50 properties

and he has a call, right? So I have a team of three in Alabama.

My property management fees are six percent which the average fee is typically ten percent but with the high volume we lowered it to six got it and

it's it's been a ride I've fired numerous property managers and I'm not proud of saying that I'm just for the people out there that are watching and want to be educated you need to

I recommend learning the business before handing the business off right because if you buy a house let's say you wanted to buy your first section a house, and I said, hey, Sean, you know, let's go close on it in 30 days.

We close on it in 30 days. You get the keys.

Whatever.

You don't want to.

Oh, gosh, this might need to be one of those things we clip out.

This might be one of those things we clip out. Because I totally lost my train of thought.

You buy your first Section 8 house and you don't want to. But before that.

Oh, firing property managers?

Yes. Yes.
Okay. So you don't want to hand the business off before you know the business, right? So if I came to you, Sean, and I said, hey, in 30 days, let's have your property closed

and we'll get you management set up, right?

They'll start charging you all sorts of fees, setup fees, administration fees, extra management fees, all these sorts of fees on top.

And you wouldn't really notice to say no to that because that's just kind of standard, right?

But

I do mentorships and I help people with my free time now because, again, I'm focused on buying big portfolios. And at the moment, I'm kind of at a standstill.

But there are not many on the market. Well, I'm just kind of waiting to see where rates go

and kind of build more equity in my personal portfolio,

pay down some more debt, you know, kind of hyper-amortize that debt just to be safe and stay at kind of a healthy loan to value.

But

I guess my point is that you want to make sure that you're not getting screwed over by any anyone that's managing your properties because they will try and charge you extra fees.

They will try and cut corners. They will try and tell you, hey, this is this much, but it's really this much.

So

you need to be very, very cautious of who you're hiring. Make sure that you're getting references from other

successful landlords and investors in that area

before ever even considering a property manager. Because if you blindly do it, it's like going to a bar, drinking 15 beers, and trying to throw a dice or a dart and hit the bullseye.

It's just not,

it's just not going to happen. So

anyway. Thanks for sharing

the dark side of this business. There is a dark side.
You're very open about it. The management side

can be dark, but

the reason I am doing the mentorship is because my three guys

handle everything from A to Z for me. Wow.

We talk on the phone every single day. I will say that.

I talk to my one lead property manager every single day. Sometimes a call is for literally two minutes, sometimes it's for an hour.
It just depends what's going on.

And there are things that happen.

For instance, this last weekend during Halloween, their Halloween weekend, there was a Friday night, it's Halloween, and I get a message that someone's heirs, or I'm sorry, their heating is out.

So we can't leave them. It's cold in Alabama.
We can't leave them with no heat. So we have to go fix that right then.

So he doesn't ask me to go do these things. He does them, right? I give him a budget.
He knows what he can spend. He knows what he can't spend.
He knows what he can do. He can't do.

And again, he's the lead manager and he's got someone under him. Does that get reimbursed? How does that work when something like that happens? Well, so it it comes out of the company card.
Okay.

So we share expenses so that everything that

he buys is I see,

right? So again,

if

there's a contractor that goes out, I would like to speak to them directly. I would like to know, get a scope of work,

breakdown of everything. Like myself, I want to speak to them.
I don't want my property manager. At this point, I trust my property manager enough.

But sometimes just when you think you trust people, you get screwed. Times are tough right now, too.
Yeah, you got to stay on top of people, and the management aspect is probably

the most important aspect of the Section A business. Would you say that's the toughest part of the business?

Like when it comes to finding the deal or managing it, would you say the managing is harder? You know, I've found that finding deals

right now is not hard, you know, and especially I'm walking through with some of my clients

that are looking to buy their first deal, and I'm seeing lots of inventory on the market.

So I'm not

super concerned with whether we're in a buyer's market or a seller's market personally, because my game plan is to buy and hold.

I believe in that method, and that's what I've been taught. So I will continue to recycle equity that I have in my properties.

So I will probably, you know, assuming rates drop within this next 12 to 18 months, I will probably probably refinance, pull some equity out, and go redeploy that capital tax-free into other assets.

But

again,

I guess I would like to jump into the light things about the business, which is probably talk about that. Yeah, yeah, that'd probably be a good thing to talk about and let everyone know.
But

in essence, Section 8 is something that, even if, let's say,

worst, worst case scenario, Section 8 ends next year.

The way I see it is,

okay, first 8 million people are going to be homeless. So there's going to be a ton of people with a ton of problems on their hands.

Do you foresee that happening?

No, that's a lot of people plus all their family too, right? Right. So

I can't imagine that happening. I've never heard of that being brought up.
Is that a conversation people are having?

People on my Instagram have commented many, many, many different things about enjoy it while you can. It's coming to an end.

And while I know, I don't even look twice at those comments because I know that it's not true. And until I stop getting paid, then I'm not concerned.

Yeah, I've never seen the administration talk about this, so I don't know. Right.

And another thing that I want to talk about, and I'm sure you plan to talk about at some point, was the difference between investing in single-family versus multifamily.

Because a lot of people do

ask the question to me, why do you only invest in single family? That is a unique approach. It is, right? Because with multifamily, you can scale a bit easier.

Not a bit easier, you can scale a lot easier with multifamily.

But with Section 8, right? I'm going to give you an example.

If you sat on a wait list for five years and you received a voucher for three bedrooms, which I only target properties with three bedrooms and up,

if you had a voucher for three bedrooms would you go to an apartment and say I want to live here where you have to share you know the building with someone or would you go to a house that's on a 0.3 acre lot

and you know the value either way the voucher covers three bedrooms the house obviously you're going to pick the house right and so

when there is turnover which is there there's very few of with the section eight space and that's a big another big misconception is the the average tenant stays anywhere from six to eight years,

which is a lot less than a traditional tenant. A lot longer, right?

A lot longer. Yeah.
Yeah. Than the traditional tenant.

And sorry if I said something else, but

they stay a lot longer. They

keep the place clean because like I said, you know, you can file judgments against them if

they don't keep the place clean, right? And if they don't keep the place clean and you file judgments, they get their voucher removed, which they can never get back. How common is that?

I haven't had it happen. Oh, wow.
Fuck off. So

I've had a few evictions, unfortunately,

and I'm very giving. You know, last Christmas, I gave one of my tenants,

you know, their portion was a bit bigger than the average person's portion. I just said, you know, use that and go help your kids.
And next month, for that matter. So I do do things like that.

And

I am very

friendly as a investor. When my property manager says, hey, I think we should evict this person, I said, give them one more week to cover their portion.

Again, we're not talking a big portion, but that just shows that they're not

reliable and that they might be damaging the house. So at that point, we have to take action.
But I've never personally had that happen to me where my house is completely just damaged.

And I have to go in there and spend 10, 15 grand on just, you know, drywall and flooring and appliances because

they messed it up. That's never happened.
That's good. Because you got 100 units now, right? Yeah.
Wow. So, I mean, basically,

the only difficult, and another difficult part,

and this sort of ties into the management aspect, is the inspections, right?

So, obviously, Section 8 has annual inspections. And the reason I'm saying this is because we were just talking about keeping the property clean, right?

So,

some people look at these inspections as a curse they think oh I've got to go and look and see how my property looks before the inspector comes out etc etc but it's actually a blessing because it's once a year it's one day out of 365 days

that you have to worry about how your house how your asset that you invested money into looks from the interior

And if you pass, you get another 12 months of guaranteed rental income.

So

they're ensuring your house looks good, and if it doesn't, you get to fix it up and you get another 12 months of guaranteed rental income. Or it still looks good and you go about your day.

But if you fail the inspection and you have multiple, you can fail a couple times before they put you into what's called abatement.

All abatement means is that they will pause all payments until

a re-inspection has occurred and it is fully passed. Got it.

And they will prorate whatever, you know, however many days or weeks or months was in between the time of abatement was filed and the time that the inspector passed the unit.

So

that's one thing about it keeps your, I look at it as a good thing, quite frankly. Some people look at it as a bad thing.
I look at it as a good thing. I mean, it would give me peace of mind.

It gives me peace of mind. Exactly.
So

I have the peace of mind knowing that my units are safe and then that and clean and that

also for the next 12 months, I get guaranteed rent. So I look at it as a win-win.
Yeah.

Are you profitable yet? Like, at what point was the cash flow really, really solid? Yeah, so

about

midway through 2024 is when I really started

breaking off.

I bought a portfolio of 18 houses.

That was big for me. I did have a partner at that, with that property, with those properties, but I only am paying them 9% on their money.

So

when you look at these sectionary returns, right?

And Tom always told me to look for 35% to 45% cash on cash returns, which is an absurd number. What does that mean exactly?

So if you invested $10,000, you would get anywhere between $3,500 and $4,500 back on that year. Oh, per year.
Okay.

So you'd make it back in three years type of essentially three years.

And up to two and a half is what he's saying. I like to target more conservatively, 30%.

And with that and those high returns it allows me to cover that investor's pref the preferred return

with no problem why

so

my plan and this is no secret to them

is to kind of groom them for a little bit keep paying them their nine percent you know they're a very wealthy person yeah they're older they're probably happy with that yeah they just want you know they invested 750 000 they just want to make their nine percent on their money and they're they're happy with that.

And then eventually I will refinance and pull all the equity out when hopefully, again, rates are lower

and

I'll rent and repeat. Pay them out and rent and repeat.
Yeah. Yeah.
So three and a third year, you're aiming to get your money back. That's that's pretty quick.
So I am looking to

by the end of 2026, I want to be at 250 houses. That's my goal.

And at the beginning of this year,

I've hit my goal for this year. And I'm, but I'm not.

Was your goal 100 or this year? It It was. But I have 102.
So I'm still going.

I don't want to stop. I'm addicted to the feeling of receiving that money.

And I don't mean that in a lustful way. Yeah.
I don't lust for money, but it's just that time freedom that it gives me.

But again, it got to a point where there was too much time freedom and I had to start doing something else to fill my days.

I mean, it is very hard to find any business where you have money guaranteed coming in every month. It is.
I can't think of that many. It is.
It is very hard.

Like subscription, maybe, but like when it comes to real estate,

it's tough. It is.
It is.

And that's kind of why I'm in the process of transitioning all the remaining traditional rentals I have over to Section 8 rentals so that I can kind of have everything stabilized.

Yeah, because there's a lot of people defaulting on their cars right now, their houses. There's a lot of default.
You know, with Section 8, that's not really a possibility, right?

It's not. I mean,

look, look, they're covering from 70 to 100% of the rent. If your

expenses are even close to 70%,

you're not looking at the right deals. Right.
What percent do you aim for for expenses? I don't look at it from that metric. I try and I look at it from a per-house net profit.

So I aim for $600 per house. Profit.
Profit. Is that per month or?

Per month. Per month per house.
Okay. And that's after I put away 10% of my gross rents for maintenance and repairs.

I put that away

in a separate account just in case the worst thing happened. Got it.
That's smart. To put myself in a good position.

That is also including management, which is 6%.

And then that's including my debt service, my taxes, and my insurance.

So

I'd like to think that $600.

per house is a fairly

reasonable goal to have for anyone out there looking to buy Section 8 real estate. And it can go up.
It honestly, I've seen people cash flow. Tom, Tom, again, his stuff's paid off, but

he's literally cash flowing $1,300 per house. Yeah.
What do you think of that strategy, fully paying off the house versus what you're doing?

You know, I've spent probably

three days in total thinking about that. Yeah.
Like I have spent numerous, numerous hours thinking about that very question.

And to answer your question,

I don't have the answer to that question yet. I don't know if

paying them off makes more sense. And again,

it's kind of at this point a

I'm looking at it from a risk versus reward, right? So I'm satisfied right now. I'm making good money.
If I paid off

my entire debt, obviously I would be

clearing over six figures a month. But

if I instead used money to go and redeploy, I could maybe make more money, but have more debt. So you kind of got to weigh out that risk to reward.
And I'm kind of in the process of doing so.

Again, that 40-house portfolio.

And this is something big I'm on, is just

jumping in the pool, whether you know how to to swim or not.

On the same level. It's truly just a lot of time.
It's how you learn the fastest. It's how you learn.

And we're young enough to be able to

have another chance.

And

I think for anyone,

and this just goes in general, right? Like you need to cut the bad stuff out of your life, right? Whether it be people, places, habits, whatever it is.

If it doesn't build you,

it's not helping you, right?

So you need to just jump in. That is my, I literally think I post something once a day on my story that basically,

in a way, says, just get going. Yeah.
Learn, educate yourself, and get going. I mean, that's what you did with that first 10-unit deal.
Exactly. You didn't have the money.
Exactly. I didn't.

And let me go back to that real quick because I missed a super funny part. Now that it's all said and done, and you know, I kind of get to look back and laugh at it.
But I paid 30%

on that that loan holy crap yeah that's insane i bought a hundred grand and i paid a flat 30 rate paid him back in eight months yeah oh so he was a private lender he was a private money lender you were super desperate so you did 30

well because at that point i was going to lose the 10 grand yeah so there was two guys that i was kind of waiting on and one was being stagnant and this guy we the clock was ticking and the seller was no bullshit He was straight to the point.

That guy made out huge. But look, I sold one of the houses

for $150,000 and paid back the private money lender in full. Loss, you made it work.
With closing costs, I just about broke even. Okay.
And those nine houses I owned just by myself.

There were no investors, $0 out of my pocket. Those were my houses.
Well done. And so that was about $4,000 a month in cash flow, just zero.
And that completely, completely changed my mindset.

Also, once you raise that first capital, it's much easier to continue raising.

A thousand percent. So my second deal,

I actually also used a private money lender, but I paid about half of what I paid. 15%.
Yeah.

Which is still a lot, but. Which is still a lot.
But with these deals where

you know

there's meat on the bone, some extra meat on the bone. You can afford it, yeah.
You can afford to, you know, do that.

But yeah, so that

That deal changed my entire mindset, perspective, everything of the real estate space.

Use other people's money opm opm it's the key it really is and I know you know I probably sound like a broken record because everyone says it but it's the truth and

what I would recommend is to learn how to find the good deals yep if you have no money and you're out there right now learn how to find the good deals because if you have the good deal you can access the capital there's so much money out there man yeah

and you know that

but you need to know where to find a good deal if you want to raise the the money. I just finished Eric Trump's book and there was a whole chapter on real estate, how they scaled their real estate.

And they used OPM. Oh, yeah.
You know, even the Trump family. Right.
They were using other people's money.

You know, multi-billion dollar,

obviously. Yeah.
They were using a lot of banks, I believe. Yeah, yeah.
Sounds like you're more using private lenders. Yeah.
And, you know, we've

sort of established ourselves with a specific bank. back down in the south because that's where these properties are in the southeast.

And we're going to again when the time is right refinance through the bank and at that point we'll be using a regional bank and it'll be good we'll have the relationship with them and

yeah we'll start you leveraging our relationship with the bank to go and just kind of rinse and repeat copy paste what we've been doing yeah so

yeah that's kind of my

two cents on that whole aspect yeah you've definitely inspired me i might have to buy a couple every year and just compound. I mean, look, man, if you

it's easy math. Let's just say $600 per house per month.
So if you bought two a year, that's $1,200 per month, that's $14,400 per year.

And if you kept compounding that, so you're making $14,000

your first year.

Now, if you take that cash flow and you just keep rolling it over, and then you also buy an extra additional two units that next year, and you keep buying two, And Sean, we're talking $1,000, $15,000, maybe at the max

$20,000 down to close. Two, that's nothing for closing.
And then you're making that much money. Is that on like a $50,000 house? Like, what's the value of the house? Well,

80 to 120K. A lot of these deals are seller financed or creative financed and subject to is a whole different.

world with pace pace more beyond those guys and the more bee method even is a different way you could go about yeah when i bought my house out here i tried doing that method did you yeah where'd you buy?

I bought in Summerlin. Okay, yeah, cool.
But at the price range, I wanted it was a bit harder, I think, to do that method. But I'd imagine at the lower price ranges, it works.
It makes sense.

And especially with, you know, obviously these cash flowing properties, it makes sense. And, you know, obviously, credit needs to be good.

And people with bad credit, that's kind of when you have to transition to the seller financing subject to. Right.

If you have bad credit and you have not a lot of money, you have two options: seller financing, subject two. That's really it.
And I'm being honest with you. Yeah, because you can't get a loan.

I mean, you can't get a loan from a bank. You can't get a loan from a credit union.
You can't get a loan from probably even a private money lender.

Because I didn't have bad credit when I raised from that initial deal. Did he check your credit, the private lender?

He wanted to know what it was, and I wasn't going to lie to him because of my first deal, obviously, reputations, everything.

I told him the truth. And it wasn't bad, but it wasn't great.
Like 680 or whatever. Yeah, yeah.
I was right around 680.

And

he wasn't too concerned with that. He was more concerned with having collateral on the properties and making sure that the properties are performing.

So I just had to get him copies of the leases, etc.

And

yeah, that was kind of my

way things played out with that. So

I don't know if there's anything else you wanted to go over.

I guess you mentioned earlier you're like helping people now.

I am helping people now. Yeah.
And again, I don't want to come off as someone who's just selling courses and just you

pay me and I'm running off into the sunset because that's not what happens. And currently I have about eight people on board.
Nice.

And we're only looking to take on about 10 at a time so that I can truly dedicate my time to each person. Respect.
I'm still making money.

You know, they're getting the knowledge they need and I'm personally, they're calling my personal phone number. And I'm walking them through on Zooms,

phone calls, whatever they need to get their first property i'm even working with guys that have 19 units okay nine duplexes and one single-family home in walkie so and i'm working with everything in between so the way i see it is

tom inspired me to get into this business in a way of

after watching his videos after seeing what he can do he gave me the confidence he gave me that i want to jump in the deep end and i want to do it now

so with that

i sort of

I'll never be in competition with Tom. He's

the OG. He's the OG.
He is the Section 8 king.

And I have immense respect for him. But with my program, I would like to think of it more as a one-on-one mentorship.
It's a different type of teaching. Right.
His is more mass market. Right, right.

You're giving one-on-one advice. Right.
It's very personal.

I, you know, we literally interview people before we take them on and onboard them because we want someone also also that's committed, right?

And we want someone that has the money to be able to buy properties because we don't want a situation where we make them pay a certain amount of money and then we teach them all this knowledge.

We show them how to do everything. We give them all the templates, all the leases, all the

rental property calculators, everything you need.

All the videos, and they don't have enough money to buy the cash.

They don't have cash. Would you say you would need at least 50K to start? No, no.
I recommend 15 to 20. Okay.

And, you know, I literally could make one phone call right now and have someone a

actually,

it's an investor. It's for an investor.

You could put

$6,000 down plus closing costs. You're probably in it for $72,000 to $7,500.

And that's a real deal.

You're not overpaying. It's not marketed to sort some household.
It's an off-market deal.

And

the same guy that's selling it is the same guy that I bought 58 properties from in Montgomery. And he's a stand-up guy.
He's 78 years old. He's blind.

And

he essentially is just a distressed landlord. Savage.
You can own a Section 8 house tomorrow for $7,200. Yep.
Wow. Yep.
I mean, you'd always have to put it under contract and get the...

you know, title work back and whatnot, go through the closing process, but you could put a property under contract for your selling And finding

it with your house. Finding a tenant, would that take a good amount of time too, on average? If you're picking in the right markets, it should not take you.

What's the process? Is there a government website you just list your property on? Yeah, so

obviously Zillow, believe it or not, there's a lot of voucher holders on Zillow.

The main one is affordablehousing.com. There's go section8.com.
There's even Facebook. People look on Facebook.
There's voucher holders everywhere.

I would recommend, obviously, the more places you have it, the more eyeballs you'll get on it, the quicker you'll get at least. So we typically list on all four and more, actually.

But as far as the process, you will get, say, let's say five tenants that apply. They will

give you their vouchers.

You will confirm they have vouchers for how many bedrooms. Let's say this house is three bedrooms.

You will then,

with the tenant, you will select a tenant, obviously. You have to pick one one of the five.
And you will then,

with the tenant, you will kind of,

as a team, submit this form called the RAFTA. It's RFTA, stands for Request for Tenancy Approval.

You submit that to the Housing Authority along with some other documentation that doesn't take long.

They, let's say you had that three-bedroom house listed at

you wanted $1,400 a month in rent. They will probably come back, especially right now,

and say, we'll do $1,200.

Because again, there's some pushback right now. And Immediately, right off the bat, I would say, meet them in the middle.
Most times they'll do it.

Most times they'll do it. So if they come back at $1,000 and you're at $1,400, say $1,200.
Just meet them in the middle. And they'll typically say yes.

And again, as you acquire more properties and get

to work more with the housing authority, you become closer and closer with them. They start to get to know you.
They start to recognize your phone number when it pops up. They trust you.

They trust you.

And it makes your life seamless, especially when they have good relationships with your property managers as well. Right.

So I make sure that my property managers are bringing those inspectors, donuts, coffee,

cupcakes, whatever it is, to make them happy. Not just so they'll pass to, you know, bribe them to pass the cost.
Bribe them with a donut. Yeah, but I'm not bribing people with donuts out here, but...

but to establish credibility with the housing authority.

You know, they go back and report to you know each individual caseworker and you know we treat them well and you know you want to make sure you have a good established relationship with the housing authority it'll make your life a lot easier and more profitable

well man i'm impressed you scaled 100 units in what four or five years no it was actually um

so i i bought my first house all cash in 2022

Sold it. This was the craziest thing ever.
Sold it within, I think it was three or four weeks. This was the Section 8 house? No, no, no.
This was before that. Okay.
This was before

Tom, I got into Tom's program. And I sold it within three, four weeks.
That's crazy. You didn't even fix it at all?

No, I didn't fix it. I just decided I didn't want to.
I was like, this is too much money for me to have invested into one property, and it was in Dayton, Ohio. And I basically was like,

What's going on? Why did I do this? Kind of panicked. Felt like I made a, was having a midlife crisis, made a wrong decision.

Anyway, I sold it off, kind of went back, again, went back to the drawing board, did some more research, came across Tom's program and said, you know what, I'm just going to do it.

Jumped right in, watched his entire

program that night,

got my first property locked up and

like within two weeks. Oh, so it's only been three years.
Yeah,

a little over three years. Okay.
100 years in three years. That's crazy.
Yeah, it's been a ride, man. I mean, Tom scaled quick too, I feel like.
Tom scaled quick. He's been doing this for,

I don't want to speak for him. I think 10 to 12 years, and he's got 800.
800 all paid off.

He's, I mean, again, like we said earlier, he's a Section 8K. Yeah, he's the OG, man.
And I've shouted him out on my Instagram a few times.

He is the OG and he's a great guy.

Nothing but respect for him. Giving you your flowers, Tom, if you're watching this.
Yep, Tom. Shout out if you're watching this.
Yeah. Where can people find you if they want to learn more from you?

Can they DM you? Yeah, so you can find me on all social media platforms, you know, TikTok, Instagram, YouTube, the whole nine at PJ

L

invests. A lot of people do miss the L in there.
They type in PJ. We'll put a link invest.
Yeah, so it's PJL, which is

Preston James Landis. But I also say sometimes peace, joy, and love.
I love it. Invests.
Cool. So that's kind of my story, man.
Yeah. Check them out, guys.

If you're interested in Section 8, shoot them with DM. See you next time.
All right, man. Peace.

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