Today on Replace Your Income, Kevin and Steve reveal the five property vetting layers Done For You Real Estate performs on every property we show clients. Buckle up and let us know in the reviews if you want to hear more.
1. **Market Selection (Pre-Vetting):**
- Before anything else, the market itself is selected based on extensive quantitative and qualitative research. This pre-header step involves data-driven analysis to determine which markets are primed for investment success.
2. **Agent Due Diligence:**
- The local agents are responsible for the initial screening of properties based on strict criteria. They evaluate properties on the MLS, gathering information from photos, seller conversations, and initial assessments before submitting properties to the internal team for review.
3. **Internal Team Property Analysis:**
- Once submitted, the property undergoes a comprehensive property analysis by the team. This step includes a thorough breakdown of numbers, rental potential, and estimated rehab costs. The team greenlights or rejects the property based on this deeper analysis.
4. **Third-Party Inspections and Appraisals:**
- A third-party inspector conducts a detailed inspection to identify any major issues. Simultaneously, an appraisal is done to ensure the property's market value aligns with the agreed-upon purchase price. Both are crucial tools for negotiation and validation of the investment.
5. **Property Management Company Review:**
- During the due diligence period, the property management company performs a walk-through, combining their own visual inspection with the formal inspection report. They provide a detailed assessment of what it will take to get the property rent-ready, further validating the analysis and ensuring no major issues were overlooked.
By having these five vetting layers, you mitigate risk and improve predictability in your investment process, creating a reliable system for long-term success. The additional step of having the property management company's inspection is invaluable, as it merges practical insights from both the property condition and its readiness for rental income generation.
Chapters:
0:00 - Purple
6:53 - Layer #1
9:35 - Layer #2
16:23 - Layer #3
17:06 - Layer #4
22:18 - Layer #5
00;00;01;24 - 00;00;06;04
Kevin
All right. Well hello everybody, and welcome to replace your income with Kevin and Steve.
00;00;06;04 - 00;00;07;11
Steve
How are you doing today, Kev?
00;00;07;12 - 00;00;10;23
Kevin
I am wearing a purple shirt.
00;00;10;25 - 00;00;14;04
Steve
Well, then you're doing really well. Doing really well as it happens to be. My wife.
00;00;14;04 - 00;00;30;12
Kevin
And I also like to point out, those of you at home cannot see this, but I just like to acknowledge there is like a lilac, like a purple ish flower on my shoe as well. So really, I've got purple shirt and purple on the shoes. And so, yeah, how bad can I be doing? You know what I mean?
00;00;30;15 - 00;00;33;22
Steve
Well, you're pretty confident. Okay.
00;00;33;25 - 00;00;50;22
Kevin
But I feel like that was like a backhanded compliment. Oh. Just kidding. Well, we're so excited to be here. And we got a really good topic today. This should be a lot of fun. Man, things are picking up in the real estate market. We're we're seeing that interest rates are starting to come down just the slightest bit.
00;00;50;22 - 00;01;11;06
Kevin
We know that there was the fed rate cut. We're going to start to see I think more and more of that reflected. It was interesting last night was the vice presidential debate. I don't know if you, watched that. But what was really interesting about it is there was a lot of discussion on housing and, and just the fact I don't know how I'd have to go back.
00;01;11;06 - 00;01;33;06
Kevin
I also had a counter how many times it said housing crisis, and every time it said housing crisis. My mind went to we are in the right market, right we are. The housing crisis is for people that need affordable homes. That wasn't. There was also a lot of talk about, you know, middle class and families. I'm like the realistic that we do is exactly the thing that they are talking about that people need.
00;01;33;09 - 00;01;49;12
Kevin
And it just made me feel more than ever that we are absolutely doing the right thing in the right market, with the right set of circumstances and conditions. And doggone it, if it isn't going to be fun over the next 10 to 15 years, if people are in real estate and getting into real estate, I think it's going to be this could be all time.
00;01;49;15 - 00;01;51;10
Kevin
Man, I think it's going to be something pretty special.
00;01;51;11 - 00;02;17;03
Steve
Well, I love the one thing that you say all the time is that you want to be investing in something where demand is high and supply is low. Yeah, right. And that's what we're coming into when they say the phrase housing crisis, what they're really saying, or the terms that I like to put it in, is there's a 7 million affordable homes shortage right now, and that happens to be the market that we're in.
00;02;17;05 - 00;02;35;26
Steve
In particular, for individuals who want to live in a middle, nice middle income neighborhood, 3 or 4 bedroom, 2 or 3 bathroom, you know, two car, garage type home. Yeah. That's where like the bell curve that we talked about all the time. That is the sweet spot is what you want to own and where you want to.
00;02;35;26 - 00;02;57;11
Kevin
Be 100%. And so then the question always becomes right for us. And this is literally what we spend our careers doing is like, okay, fine. So that's the right market. This is the right product. We know that there's a housing shortage. We could call it a housing crisis. From a political standpoint. We know that we're in the right business, but it's not the right business for everybody, especially if they're not buying the right kind of real estate.
00;02;57;11 - 00;03;18;00
Kevin
And even if we were to brush it with the broad stroke of like, go buy single family homes, there is so much interpretation inside of single family homes. What market? What should that home look like? How old should it be? What would one go through in order to properly vet a property to make sure it is a wise investment opportunity?
00;03;18;00 - 00;03;39;07
Kevin
And that's what we're going to talk about today on the podcast, because over the years, as we've helped our clients, invest in real estate, there's really and we haven't talked. I don't think maybe we've mentioned it on the podcast, but we haven't, like gone overboard to say, look, there's really five full layers of vetting that every property goes through.
00;03;39;10 - 00;03;59;20
Kevin
And that is we we catch things as we go through these layers of vetting. It's done not just by one person, it's done by different people. And, some are looking at certain criteria, others are looking at other criteria. And at the end of the day, every one of these properties that is a real estate single in Moneyball, real estate is a fully, fully, fully vetted property.
00;03;59;24 - 00;04;15;10
Kevin
There are some people, I think, out there in the real estate space that are like, yeah, we've set properties. And I think what they do is like, they check one number, right? Like, oh, the purchase price seems to be right. The property's vetted. That is not what we are talking about. Numbers are one piece of the equation, but there is a lot more that goes into it.
00;04;15;10 - 00;04;34;15
Kevin
On today's episode, we are going to dive into the five layers of vetting that every single property goes through so that you, those of you watching and listening, can kind of know what is what does that look like and why. I also think this is important, Steve, as we did some reporting yesterday, just as a company, we got some third quarter numbers.
00;04;34;18 - 00;04;54;23
Kevin
And one of the things we don't often talk about is, yes, there's great properties that we are vetting and approving for our clients to purchase and invest in. But there's a bunch of properties that come through that get weeded out that are not properties that our clients see. And so let's start by talking a little bit about what were those third quarter numbers, how many properties did we vet.
00;04;55;00 - 00;04;56;15
Kevin
How many did we approve.
00;04;56;18 - 00;05;19;26
Steve
Yeah. So I think it's important to to understand kind of like it's kind of like a funnel. Like we start down here where, you know, there's all of these properties and we kind of narrow things, you know, down to, you know, the types of properties that we want to look at in the first place. But as far as like the numbers that we discussed yesterday, you know, we have a property analysis team here.
00;05;20;02 - 00;05;47;12
Steve
Who, who you know, they do. They're they're one stage of the vetting process. And so properties that get to us, are, you know, dozens every single week that, that we're looking at. So year to date our team has, has been given or our designated market agents have submitted nearly 1300 properties, to be vetted by our team.
00;05;47;15 - 00;06;16;28
Steve
Of those, the actual numbers, like 1247. So we yeah, yeah. Not that we know exact numbers or anything, but there's 1247 that were submitted. And of the 1247 submitted, there were 78% of them that were approved. Meaning we've gotten better and better at, having trained our agents in the different markets where they're not just submitting whatever. Yeah, like they've gone through and they've done their part of the process, they've submitted them.
00;06;17;04 - 00;06;48;01
Steve
And so 78% of them were actually approved that that could be, you know, you know, looked at by our clients as properties that meet the basic minimum qualifications. Right. And, and from there, there's some additional vetting that we're gonna, you know, kind of get into and talk about. But we go through quite a few. And when, when I say like, like that process to, to submit those 1247, those real estate agents, they looked at probably tens of thousands of properties.
00;06;48;01 - 00;06;48;20
Kevin
Yeah.
00;06;48;23 - 00;06;53;19
Steve
Right. Beefed up in order to submit those 1247.
00;06;53;21 - 00;07;10;21
Kevin
So multiple layers of vetting. So I think what would be really affect is effective is let's go through like the five layers of that. Know we could kind of talk to each one to kind of explore main. What is that vetting process look like. Look what does it look like. So it starts with and you already mentioned it.
00;07;10;21 - 00;07;18;00
Kevin
You already alluded to it. It starts with the agents in the market doing research. So what are some of the criteria agents are looking at in the market.
00;07;18;02 - 00;07;37;07
Steve
Yeah. So again like the basic criteria like and then this also seems Kev that what we're not including here is call it the prelim which is we've selected a market with very specific criteria. I mean we spent months vetting a market before we ever even went there. And so we won't get into that market. We're not even having that.
00;07;37;07 - 00;08;03;08
Steve
Right. So that's the pre stuff. Right. So now we're in the market and now we're ready to buy properties. And and so our agents are looking for three bed two bath two car garage middle income neighborhoods. We're looking for properties that are newer or brand new. We do a lot of new construction. So homes that are, you know, typically built in the 2000s or newer, we're looking for properties that don't have power lines going overhead.
00;08;03;10 - 00;08;19;19
Steve
They don't back on to a noisy freeway. There's not a double yellow line in front. They're not. It's not a home sitting on a corner of a neighborhood going in. It's like the only where every single, car has to drive by in order to get in front of you to get to their home. So it's not like a busy, busy street.
00;08;19;21 - 00;08;40;13
Steve
We're looking for properties that don't require a lot of rehab, so the properties that we buy are typically in pretty good condition to begin with. You know, homes that maybe need, you know, some flooring, paint, miscellaneous repairs, that kind of a thing where we're taking a look at the age of the roof, the age of the the heating and Hvac, the age of the water, those types of large major systems.
00;08;40;13 - 00;08;58;06
Steve
We're looking at those kinds of things. And so those are kind of some of the like just the initial basic criteria. And there's there's like a whole host of other little nuances that our agents are looking for when they're looking at the actual properties as to whether they're even going to like, you know, look at the numbers. Yeah.
00;08;58;06 - 00;09;18;06
Kevin
And that's market specific to so each agent in a market they're looking at like very similar criteria. Right. It's all in the buy box. But there may be little nuance like you said in certain markets. So they are evaluating all of these properties. And that's one of the things that part of why we love using often the MLS is the multiple listing services.
00;09;18;09 - 00;09;35;23
Kevin
It gives you the ability to search based on data and to filter based on data. So our agents in the market will first go through this massive vetting. They will look at all of these properties and they'll pick the ones that appear, you know, to look like they may be it fit the initial criteria. They'll drill down a little bit more on the criteria.
00;09;35;26 - 00;09;47;02
Kevin
And at some point they're taking that property, and they are then submitting it to our team here at DFA to create the property analysis. So let's talk a little bit about that process.
00;09;47;02 - 00;10;04;20
Steve
So on the property analysis side of things our team they receive like the basic inputs. Right. So the we have like an input form that the agents they fill out, they send it over to us and we do further research. We're looking at the listing itself. We're looking at like frame rates and all the different things that that's listed there.
00;10;04;22 - 00;10;26;05
Steve
And then we're taking a look at the numbers. Right. So we plug all the information into this enormous crazy spreadsheet that are that our team has developed over the many, many years. And, and it, it, kind of tabulates the basic numbers that we look at, we're looking at cash on cash. We're looking at combined cash on cash.
00;10;26;07 - 00;10;46;08
Steve
We're looking at principal pay down, the depreciation, expense. We're taking a look at, appreciation and, and those numbers kind of they spit out the numbers that we look at. And one of the main numbers is the, the, the monthly average increase. And so that number has a basic criteria. The cash flow has a basic criteria.
00;10;46;10 - 00;11;09;28
Steve
And and even there there are some nuances that our team is analyzing based on the age of the property. Right. The particular market that it's in. We're taking a look at what the cost of insurance is on that property. We're taking a look whether there's an HOA fee or not. And we're taking a look at the lending, requirements for that particular state and what, you know, what the closing costs are going to be in all of those numbers.
00;11;09;28 - 00;11;38;05
Steve
And then we're taking a look at, at the estimated rehab. Right. So that's one of the big numbers that we're looking at as to like is that number two high. Like what is the total out-of-pocket costs going to be for for a particular client. Because every single pay that we do as far as like vetting the criteria is, is this is a property specific for a specific customer who we know what their total out of pocket, you know, ability is what their lending, ability is, those kinds of things, what their goals are.
00;11;38;11 - 00;11;47;23
Steve
We kind of match up properties based on individual customers. And so we're looking at all of that information and whether it fits this particular client.
00;11;47;26 - 00;12;07;08
Kevin
And ultimately this property analysis that we've developed over many, many years of kind of saying, okay, can we sort of quantify when possible some of the nuances, some of those metrics that are going to help us know whether a property should be greenlit or whether it should be rejected? And so the agent are doing all this vetting in the market.
00;12;07;12 - 00;12;28;15
Kevin
We're taking all of that information. They're honing it into a few properties or, you know, however many on a daily basis that are coming to the team, the team here is going through and doing the full property analysis, putting all the inputs in, putting all the numbers in, and ultimately, we let the math and the data tell us whether or not that's going to be a purchase worthy property right now.
00;12;28;22 - 00;12;56;29
Steve
And I love that we are data driven, but here's the other boots on the ground. Part of this whole like vetting process is that it's not just the data, because that cap real estate is is so nuanced. And this is why it's absolutely critical. And this is why buying real estate at a distance is so difficult unless you have a trusted team member who is there not only understand our criteria, but then we have to reverse it.
00;12;56;29 - 00;13;21;05
Steve
And so they're trusting our criteria. And now we get to trust their having grown up in an area or having done like hundreds of deals in a particular area to know the different things like, like this property where it's at, not just like generic crime statistics, but it's like, yeah, I know this neighborhood because I've lived here for 15 years kind of thing, right?
00;13;21;10 - 00;13;57;10
Steve
I know what things sell for. I know what rents are because, like, I'm here and I know it. And this type of property, like the layout of the property and the neighborhood, and it's like many times there's a beautiful home and a beautiful neighborhood. And then literally like two blocks away, there's like, I don't know, some industrial centers that is spewing out black smoke or, or, or a particular area that, you know, has some undesired, some undesirable thing that is going to affect the resale value of the property five years down the road.
00;13;57;10 - 00;14;23;16
Steve
So so we get very nuanced with the local boots on the ground. And that's a massive part of the vetting process. Right. And that's part of this initial vetting stage is that, you know, the agent is providing that, that, that nuance and that that knowledge that can't be calculated, from a, you know, you know, an AI driven methodology.
00;14;23;19 - 00;14;51;14
Kevin
There is some AI driven methodology, like when we're trying to find rents, right? Like, you know, rent finder AI is something that we use, that our partners over at Specialized Property Management really kind of developed specifically for us. I mean, they use it in their business, but because we wanted to find a really efficient way where we could pull tons and tons of data of real time rental statistics or real time rents in a given area, and take all kinds of factors into consideration.
00;14;51;20 - 00;15;14;04
Kevin
So there is it's this cool combination of technology and human. Right. So it's like technologies, one piece filtering is one piece through technology. Then the actual nuances of the agent that's in the market that understands the area, and maybe they have to go drive the home. Maybe they don't have to go drive the home. Right. Maybe maybe they know enough that they don't have to go lay eyes on the property.
00;15;14;04 - 00;15;33;17
Kevin
But they've got enough pictures. They've got enough information. Maybe they do just do a drive by. There's a whole variation of things that could be done just to get a property vetted. Enough to send to the team. Then the team here is going through and doing more stuff. There's going to be numbers, there's AI, there's algorithms, there's quantifying certain aspects.
00;15;33;20 - 00;15;53;09
Kevin
There's statistics, there's, percentages. There's all of this stuff. But, and that's going to produce some sort of the result, which is either going to say, yes, we think based on who knows how many points at at the, you know, we selected the market. Then we had the agent give us a bunch of properties. Then we ran it through the vetting.
00;15;53;12 - 00;16;07;11
Kevin
And so we have a combination of technology and human driven approach to vetting. And then we're seeing these properties that come out the bottom of the funnel with numbers attached to them. So we literally know we're projecting, I should say, how much that property's going to make you this month and ten years from now.
00;16;07;15 - 00;16;23;27
Steve
Yep. That's step one. Yeah. So step two like that's pretty comprehensive right. Do you think that that would be enough. But it's not quite enough yet. So step two is the home is now under contract because it passed. If it passed that level and and and we said we approve.
00;16;23;29 - 00;16;30;24
Kevin
This is step three because we have the agent. Step one is agents are doing the vetting. Step two is a property analysis. Oh and so we're on step three.
00;16;31;00 - 00;16;47;13
Steve
So step three is is now we're now we're getting a home inspection. That's right. We're getting a third party right. So I mean we got DFA. Some people might say well you guys have a hidden agenda. And then we got it. Step two, which is the the agent who's like, well, they got a hidden agenda like they want to earn.
00;16;47;16 - 00;17;05;27
Steve
You know, a real estate commission. Okay. So let's say that, you know, those two things, you know, are step one, step two. But people are like, well, I don't know. Okay, now let's get a third disinterested party, a home inspector who goes into the home, every single home that our clients purchase, get a third party home inspection.
00;17;06;00 - 00;17;23;10
Steve
Where you know everything is listed out, they go through it. It's like it's a deep dive into the property, right? Deep dive. They're looking at all of the systems at a at a granular level. They're looking at the roof. They're looking at all of everything. Right. So now we get this home inspection. So that's that's step four.
00;17;23;11 - 00;17;28;09
Kevin
Yeah. Can I just say that an inspection once saved me $50,000.
00;17;28;11 - 00;17;29;11
Steve
Yeah. Because I'd say that.
00;17;29;12 - 00;17;49;01
Kevin
Yeah I can because there was a home that I had under contract that I was going to purchase, and I knew that it was going to need something. Okay. But I had no idea what was happening on the inside. So what ended up happening is, I had an inspector come out. The inspector did the full inspection. I was already under contract.
00;17;49;01 - 00;18;06;19
Kevin
Right? The vetting had been done. I was really excited to buy this property. But we got an inspection. The inspector came out, looked at some things, pulled me aside and said, listen, it is going to cost you at least another $50,000 to get this property to the point where it where where, you know, it's up to code and it's good to go.
00;18;06;22 - 00;18;21;09
Kevin
And I was like 50 grand. Are you kidding me? And so here's what I did with that. Once I was armed with that knowledge, I went back to the seller and I said, how about this? I'll meet you halfway. You knock the price down another 25. I'm willing to contribute 25 because now I'm going to get the work done.
00;18;21;09 - 00;18;40;00
Kevin
So it gets. So we'll meet halfway. And guess what happened? They said, nope, we don't accept your offer. So I didn't buy that home. I ended up getting something that turned out way better, but had it not been for that inspection, it could have cost me 50,000 unsurprising dollars that I didn't know we're going to need be needed for this particular property.
00;18;40;01 - 00;19;03;21
Steve
Yep. Absolutely. Next step is every single property, whether it's, it's, being financed or whether it's a cash purchase, we get an appraisal, we want to validate the value of the property again by a third party individual who are who we're call it. I'm passionate about it. Like where they they don't have a, you know, right. A dog in their own emotional.
00;19;03;21 - 00;19;06;15
Kevin
Yeah. When it comes to the appraisal it is just numbers right.
00;19;06;15 - 00;19;20;07
Steve
Yeah. So they come in, they do their appraisal and that helps validate like the value. And they're also validating like the property itself. Again if you're buying at a distance you want to know that everything is good with the property including, you know, the value of it.
00;19;20;14 - 00;19;47;05
Kevin
One of the things that I love to mention on appraisals, because not a lot of people understand, you and I have talked about it, on the podcast, but I just want to make sure everybody knows an appraisal is not the same as the value of a home. Right? An appraisal is nothing more than a third party data and number driven validation that the property as worth is worth at least what it is supposed to be purchased for.
00;19;47;07 - 00;20;10;18
Kevin
Now, sometimes appraisals come in a little high, sometimes they come in a little bit low based on that purchase price. But just to make sure everybody understands a property's real value is what somebody is willing to pay for it. An appraisal, it is a the bank is just trying. The lender is just trying to justify the value of this home in the event that, you know, they're vetting you as a borrower and they're making sure you're good credit risk.
00;20;10;18 - 00;20;22;02
Kevin
But in the event that they're vetting is not good enough and something happens in your life and you're no longer good, credit risk, they want to make sure that they when they foreclose on the property, they're not going to lose any money. Right. That's really what an appraisal is for. Yeah.
00;20;22;02 - 00;20;28;18
Steve
The other thing though, an appraisal that an appraisal does, is that it gives you more negotiating power, right?
00;20;28;18 - 00;20;28;26
Kevin
Definitely.
00;20;28;29 - 00;20;49;02
Steve
So just like the home inspection, if you find some things you can negotiate with the seller at that point to have them fix them or to reduce the price of the home. It's the same thing with appraisal. If the appraisal comes in low, there's an opportunity to kind of renegotiate some things with the seller. So it's an important tool in in the overall purchase process.
00;20;49;08 - 00;20;51;11
Steve
But it's also a validating tool.
00;20;51;11 - 00;21;05;29
Kevin
So another story. So that home that so the home that I got the inspection on that I didn't end up purchasing. That was going to be a primary residence. Okay. So it was a primary. I really loved it. I got the inspection, realize it's going to be 50 grand, went back to the seller, said, hey, you come 25, I'll come 25.
00;21;05;29 - 00;21;21;26
Kevin
They said, no. So that had us looking for another home, the next home that we found, which is the one we live in today we were really excited about. And, we had the inspector come out. The inspector saw no red flags. So we were under contract. The due diligence period. You know, we're in the middle of the due diligence period.
00;21;21;26 - 00;21;43;26
Kevin
We get the appraisal. The appraisal came in $10,000 below what the contract purchase price was. So, again, I had my agent go to the seller and say, here's what the appraisal came in on. What was awesome for me is that seller was leaving the country. And so they said, no problem, we'll discount the purchase price by ten grand.
00;21;43;28 - 00;22;14;03
Kevin
We'll meet the appraisal. So for me, in that scenario, not only did the inspection save me a bunch of money, but the appraisal saved me some money as well just in that scenario. But I'm just saying that only to say there's validation, there's validity to the idea of the inspection and the appraisal. And that's after all of the initial market vetting has been done and the property analysis has been done, and now you get an inspection and now you get an appraisal, and that's going to take you all the way up to the closing on an investment property.
00;22;14;03 - 00;22;18;02
Kevin
And then there's still even after that really, I mean, I guess, well there's.
00;22;18;07 - 00;22;41;27
Steve
There's one more step. Yeah. Well there's one more step that we take, in our whole process, which is the final kind of vetting step, which is our property management company. They actually come in during due diligence. Right. Great. During due diligence, they walk the home and they provide a, an estimate on what needs to be done to get the home in rent ready condition.
00;22;42;00 - 00;23;05;17
Steve
Now they're taking the home inspection and then they're taking their visual inspection, and they're marrying those two pieces of information and and helping the buyer understand this is what it's going to take to get this home in rent ready condition, which is massive, because up front, the agent, one of the things that they're submitting is what their estimate is, to get the home in ready condition.
00;23;05;24 - 00;23;40;27
Steve
And that's a non in-home inspection based on photos based on, exterior and interior photos, that kind of thing. And so it's a good guesstimate and also based on age and also based on conversations with the seller and the seller's agent and that kind of thing. But then when the the property management company gets in there, they're doing like an, like an actual like visual inspection and marrying both the home, the inspection report along with their visual inspection, which is huge because that then validates and we can update the property analysis.
00;23;40;27 - 00;24;12;13
Steve
That's right. Right. Which which catches things like before like if there's something massive that the, the property management company like finds, you know, during that due diligence part of the process, it's another two things. It's validation and it's an update and it's a negotiating opportunity. Right. So that's the that's one of the huge things that we do that is such a powerful component to our overall process of layers of vetting a property prior to now owning it.
00;24;12;15 - 00;24;13;28
Steve
And and there's no going back.
00;24;13;29 - 00;24;34;24
Kevin
That's right. So five layers of vetting. So the agents are doing their initial due diligence and research using all of the criteria. And I mean we could say, you know, the the the forward is that we've selected a market, right? We've gone through all the data driven research and, and all of the quantitative and qualitative research to discover which market we should be in.
00;24;34;24 - 00;24;51;18
Kevin
So that's kind of like the forward that's the that's the pre header. And then and then now you've got the agents in the market doing the vetting of the property on the MLS. Looking at all this criteria. If they need to do some additional vetting of that property before they submit it to our team, they can they submit it to our team.
00;24;51;18 - 00;25;15;06
Kevin
That's layer two. We're going through the full property analysis, working up all the numbers, greenlighting the property or rejecting the property. Then the third level is the inspection. Having somebody come in a third party inspector tell you whether or not there's something major that's going on, so you can make sure that you're getting a good purchase. The fourth layer is the appraisal, the actual actual appraiser coming out now, another unemotional third party sort of validating at least with the purchase price, needs to be on the home.
00;25;15;12 - 00;25;34;24
Kevin
And then, also the property managers, going in doing a visual and, doing additional inspections or taking a look, doing additional research to make sure that the property's going to be rentable and we know exactly what's going to go into rehab. And then that leads you all the way through. Now you've closed on the property, you own the property.
00;25;35;00 - 00;25;54;14
Kevin
And that should be a pretty good indicator as to whether or not that is a good purchase worthy property. And I'll tell you, nothing is perfect in real estate. You can only do so much. There's only so much research, so much vetting that you can do. I think our process is pretty exhaustive, but real estate is real estate.
00;25;54;14 - 00;26;30;17
Kevin
There still could be unpredictable. But I always like to say that systems increase predictability. Predictability mitigates or minimizes risk. And what we're talking about here is a massive system and a massive process as a part of this Moneyball real estate system that increases the predictability, that predictability should give you as a buyer, additional increased, you know, buyer confidence, investor confidence that this has gone through so many layers that you got yourself a great purchase where the property that is a real estate single that can help you make your way micro, win your way to millions.
00;26;30;17 - 00;26;43;19
Kevin
And that's really what it's about at the end of the day. So anyway, I hope this conversation was helpful. I hope it was interesting. I hope that you guys watching and listening went, oh cool. I didn't realize there was that much that went into it. And obviously we could probably do separate podcast on each one of those layers.
00;26;43;19 - 00;27;00;21
Kevin
There's so many details. We could go so granular, but this is like high level fly by and I'm not smart enough to go to granular. You could but I at least understand it in this way. Right. This is the way I look at real estate and the way that, I, you know, ultimately determining whether or not something makes sense to me.
00;27;00;21 - 00;27;03;18
Kevin
So hopefully that was helpful. Any last words as we wrap the episode?
00;27;03;21 - 00;27;26;15
Steve
I'm just going to say, I mean, and this is something that has been developed over the course of many, many years, right. We're going 16, 17 years now. It's funny, I was I did a search on YouTube and I found a video from literally 15 years ago when all of my hair was still brown. And I'm doing this, I'm doing this video, and and I'm looking at that now.
00;27;26;15 - 00;27;46;27
Steve
I look at myself, you know, in the mirror and like, everything is white. And I just think to myself, it's like, that's one of the cool things about like that, the fact that we've stuck with this long enough. Yeah, that we've been able to put something together that for the person hearing it for the first time, or maybe even for the fifth time or the 10th time, it can sound a little bit overwhelming.
00;27;46;29 - 00;28;02;00
Steve
But in our minds, and I know you that you say that you don't get it. I understand you guys are smart. I was like, you know, the stuff inside and now you can, like, grip stuff off, like in a rap song about everything that goes into the whole vetting process. But it's just kind of second nature to us at this point.
00;28;02;00 - 00;28;35;18
Steve
And so when we talk to people, sometimes we have the curse of knowledge and which is like, oh yeah, all the stuff is just really simple. Like all of these steps, all this, everything. And to somebody watching or listening to this podcast, it can seem and sound overwhelming. And that's the beauty of working with a team and having the experience and the whole the systems, the processes, the people and everything in one place where you can just come and know that all of these things are being taken care of, like it's it's pretty mind numbing, you know, to probably hear some of this, but it's also very powerful and empowering to somebody wanting to build
00;28;35;18 - 00;28;39;11
Steve
a ten property portfolio and know that every property has gone through this process.
00;28;39;11 - 00;28;59;08
Kevin
You know what, I love that. Let me just back out of the parking spot real quick and take you on a quick little drive. Edits this for you. Watching, listening. It's as simple as get a game plan if you're starting right or if you're in the middle of your portfolio, growth or your micro winning your way to millions.
00;28;59;10 - 00;29;11;00
Kevin
Revise your game plan. Get a game plan. Get a game plan. Update. See a property that's fully vetted, decide to put it under contract or not, and then close. That's it. I mean that that's.
00;29;11;00 - 00;29;11;23
Steve
That's their job.
00;29;11;23 - 00;29;30;00
Kevin
That's what's so that's what's so cool, right? Your job. That's why we say stuff like we do 95 plus percent of the work. You keep 100% of the financial benefits because that's the reality. So this entire episode could be negated by the idea of you get a game plan. You see a property that's a good fit for you.
00;29;30;02 - 00;29;51;09
Kevin
You say yay or nay, you close on the property, you start to generate money and and income and wealth from that property in perpetuity. And that's a that's a simple I love that we've tried to make real estate investing as simple as possible for hardworking, successful people that know they want all the benefits of real estate but just don't have the time, effort, expertise required to go do it themselves.
00;29;51;10 - 00;29;53;07
Kevin
We say all the time and easy button.
00;29;53;07 - 00;30;15;28
Steve
I say all the time that not everybody wants to be a real estate investor, because it requires all this knowledge that I'm just talking about. But everybody wants to own investment. Real estate. Yeah, and that's the name of the game. That's what we're facilitating. And then like that's, you know, that's what we're good at. And and it's and it's fun to be able to have this type of a conversation kind of just like like shoot from the hip.
00;30;15;28 - 00;30;29;28
Steve
It's like like the sport is like, hey, what do we want to talk about in the podcast? It's like, let's do this thing. And then we can talk about it ad nauseum. No prep and and and it's just kind of second nature to us. Yeah. And and to our clients. Thanks for buying. Yeah. For our clients where it's like, here's your here's your part.
00;30;29;28 - 00;30;37;05
Steve
Like after like overwhelming you with all of this, like, nonsense. That, that it's really is that simple.
00;30;37;05 - 00;30;56;13
Kevin
We hope that the podcasts and podcasts like this are nothing more than, giving you a little bit more ease of mind when you decide to make a decision to move forward. That's what this is for. You don't need to know everything we shared, but you need to know it's there so that it can make it that much easier for you to say yes, I'm willing to change my life one property at a time.
00;30;56;13 - 00;31;00;29
Kevin
So all right, everybody, thank you so much for joining us on the Replace Your Income podcast. We'll see you real soon.
00;31;01;02 - 00;31;04;03
Steve
Have a good one.
00;31;04;06 - 00;31;04;16
Steve
And.