How Ryan Chaw Turned a $30K Mistake Into a 7-Figure Rental Portfolio

Steven Weinstock (00:00) Hello and welcome back to another episode of The Wealth Clock Podcast. Today I have Ryan Chaw. A little about myself, Steven Weinstock. I've been in the business about 25 years. Started with single family. Now I own and manage multifamily across a few states, and I started buying debt. This interview is not about me, it's about Ryan. My guest today spent years as an infectious diseases and pediatric pharmacist, the kind of career most people spend a lifetime building. But starting 2016, he began buying one single family home a year in California. Wow, California. One of the most overpriced markets in the country. And instead of renting them out the traditional way, he rented them by the bedroom to college students. That one shift nearly doubled his rental income on every property. By the young age of 28, he already crossed the millionaire mark. He kept scaling, self-managing six properties without ever hiring a property manager. Okay, let's we'll talk about that. All while still working 40 to 50 hours a week at the pharmacy. It was not all smooth. His very His very first deal cost him over $30,000 in emergency repairs. Mistakes he now says were completely preventable. He eventually built into a multiple six-figure rental portfolio, and he's no longer a pharmacist. At the age of 31, or he retired from pharmacy at the age of 31. He now teaches and helps other people how to do the same thing through his company called Newbie Real Estate Investing, Newbie Real Estate Investing. Ryan Chaw, welcome. Ryan Chaw (01:34) Thanks for having me on the show, Steven. Steven Weinstock (01:36) My pleasure. Okay, so it was quite an introduction, and you're in California, very hard place to start. I'm recording and I'm born and raised currently living in New York City. And when I started, I drove about 90 miles away, 90 minutes away, sorry, and purchased single family homes over there because I was unable to buy them in my backyard. Walk me through how you bought that first house, and was it the plan to be a real estate investor or was this your, you know, planting seeds to just own one house and take it from there? Ryan Chaw (02:11) Yeah, it's a good question. I was actually inspired to get into real estate from my grandfather who bought a couple properties in the San Francisco Bay Area back in the '50s. And as we all know, the Bay Area went up like crazy, and then appreciation, rents went up, and not only was he able to retire early, but he was also able to help cover part of my college tuition and that of my brothers as well. So, I realized that real estate's one of the best ways to create generational wealth. So, I did want to get started as soon as possible. I saved up as much money as I could by working a lot of overtime at my job, and I just put all my money into real estate. In 2016, I bought my first property in Stockton, California. It was very close to my alma mater college where I went to pharmacy school. It was about an hour 15 minutes away from where I actually lived. Uh so, it was not too far away so that I felt like uncomfortable or too uncomfortable doing it. And it was also lower home prices in Stockton. Actually, when I bought it, it was only $262,000. Nowadays, prices in that market, that same market's around $400,000. So, uh I really started seeing the growth of real estate pretty quickly. And what I did was I used that unique strategy of what's called the rent-by-the-room strategy where instead of renting out the whole house, you basically rent out the space inside the house. So, you divide it into like five or six bedrooms, and then you rent out each bedroom. Let's say it's a six-bedroom house, you rent out each room for $700 a month uh per bedroom. So, that's $700 * 6 is $4,200 a month in rental income. And this was on like $300,000 properties. Steven Weinstock (03:56) Wow. Were you living in this house, this first one that you bought? Ryan Chaw (03:59) No, I did not. It was a rental and it was just rented to pharmacy students. Steven Weinstock (04:03) Okay, so first let me just go back for a second because I'm always interested in compounding uh interest, compounding values. Your grandparents, your grandfather, you mentioned bought houses or property in the '50s. Just wondering, where are those properties today? Is it still owned by uh people in the family? And if not, around how long was it owned? Just out of curiosity, what the values were. Ryan Chaw (04:24) Yeah, my grandpa owned Well, he sold two of them, and then he owned a set of six flats in the SF Bay Area until he uh passed away at around 93 and a half years old. And then it was obviously passed on to my parents on a step-up basis, so they didn't have to pay any taxes on it. And then they sold it for 3.8 million or something like this, which was more money than they made their entire lifetime working the W-2. So, you know, my grandpa just sitting on the house, uh letting it gain appreciation, collecting rent, was more money than they made their entire lives working the W-2 job 40 hours a week. Steven Weinstock (05:00) Any idea about what he spent when he purchased those houses? Meaning, when you when when the family sold it, it was worth about 3.3. About how much was spent purchasing uh that Ryan Chaw (05:11) Yeah, I think we looked it up. It was around 150,000 to 200,000, somewhere around that range, back in the '50s. Yeah, yeah. Steven Weinstock (05:18) Wow. Wow. So, you know, he made some money throughout the years. He uh left a legacy to his kids and and grandkids. Wow. You know, really tremendous and you know, something that's hard to quantify as far as a return on investment, but it taught you what you want to do and not necessarily working uh W-2, but learning about and yearning to buy real estate. So, I'm not sure he had that in mind in the '50s, but wow, quite a story And the story that we hear about all the time. You know, we we have it here in New York. We have these legacy families that own apartment buildings in Manhattan and the rest of New York City, and they bought these in the '40s and the '50s, and their family, you know, takes care of it, but you know, their their wealth is is really tremendous. Wow. Wow. Talk to me about this first property. How long did it take you to find this property from the time you decided, "Hey, I'm ready to buy"? Ryan Chaw (06:11) It was It was the same day. I actually have an interesting story. I was kind of stuck in analysis paralysis, and I would always talk about how I'm going to buy these rentals and rent them out, and I would just talk about but never do anything. And then one day my dad just called me out on it, and I was like, "Yeah, you know what? I got angry at him, right?" at first, but then I was like, "You know what? He's kind of right. I haven't really been actually taking action on this. I've been just kind of twiddling my thumbs." So, the same day I called up a realtor, and I drove down to Stockton, and we saw three properties, and I bought one of them. And it was a a 100-year-old house. I had no idea what I was doing, and I ended up buying a house that had a lot of repairs that needed to be done on it, and you know, I learned from it and grew, and I basically could made a goal to buy one property a year and just pour all of my money and reinvest all of my money into real estate. Steven Weinstock (07:02) Got it. So, you were fortunate enough to have a job, a good job, and you were able to save some money to buy this property. Back in 2016 is when you started. 2016, you know, we had lots of loan products out there. Obviously, you know, a traditional 30-year fixed is always, you know, the best. Those Fannie Mae loans. We have a DSCR loans out there. So, in 2016, when you purchased your first property, how did you buy it? Was it a Was it a cash purchase? Was it Did you put down you know, take a loan? What was the plan? Ryan Chaw (07:31) Yeah, it was a conventional loan. It was like 3.75% interest rate, if I remember correctly. And I didn't know how, like, you You normally you put a 20% down payment on a property. This was a $262,000 house and I put $100,000 down on it cuz I really didn't know what I was doing. That just kind of shows you I was a fish out of water when I got started. But that's how I funded it. Steven Weinstock (07:54) Did you get a lower rate because your loan-to-value was lower, meaning most people put down 80% for a home purchase? Uh sometimes investment properties are 75%. Here you put down, uh I guess rough math, about 60 or sorry, you took a loan of about 60% uh if I'm doing the math correctly. Was the rate lower than had you put down the 20% or 25%? Ryan Chaw (08:16) Most likely, most likely it was, but I wouldn't say it was that much better than like a 25% down if I were to do a 25% down. 25% down typically gets you some of the best rates already. A 20 or 20 25% and uh you know, it's kind of diminishing returns after that. But, you know, maybe if I were to go back and look at it, potentially got a better rate. Steven Weinstock (08:41) go back again, you mentioned your father uh sort of called you out on it. My question is like this, was he urging you to invest in real estate for a long time or did he see that you were interested but stuck in the analysis paralysis as we call it and that's why he urged you to get into it? Ryan Chaw (08:59) He was actually kind of the opposite. He originally told me, "I don't think you can do it." And I think that kind of triggered something in me to try to, you know, prove prove him wrong at that point because he just observed me, you know, talking about it a lot but not really doing anything and I think he was just like, "Well, you're not really doing anything. It you know, if why do you keep talking about it if you're not going to, you know, take the first step, right?" So, maybe he was thinking that in his head. Maybe he was just trying to use some reverse psychology on me, I Steven Weinstock (09:29) So, you're buying this first property, you're getting a loan. Obviously, the bank is going to underwrite you. They're obviously happy with your W-2 income, your credit score, et cetera. Uh, they do an appraisal on the property. Did they make you do an inspection? I know some banks make you like an engineering inspection or environmental. Did they make you do it and did you do it? Did you not do it? Because I want to follow up about this mistake they made. Ryan Chaw (09:55) Yeah, for sure. So, we did do a home inspection, just a typical home inspection, but that doesn't cover things like the sewage line, for instance. So, usually for line you have to order a sewage lateral line inspection and it cost like an extra two hundred or three hundred. It's not normally included. Luckily, in California we don't technically have like radon inspections or have to do that type of stuff. At least not in the area that I was in. It wasn't recommended. So, yeah, hopefully that answers your question. I guess I got a pest inspection as well. But, I didn't pay too much attention to it, to be honest. I didn't know what to look for. Steven Weinstock (10:30) Okay. I mean, you mentioned in California or in this area they didn't require radon inspection. I guess that's the first I'm hearing about California being not requiring certain regulation. I know California is one of the most toughest and regulated states in probably just about every business, but definitely real estate. Talk to me about this mistake. What was this $3,000 mistake? I'm going to guess has something to do with the sewer line since you mentioned that. Am I right? Ryan Chaw (10:58) Yeah, that was just part one of the mistake. So, I got this call, I got my first tenant in in about like two months after, he said, "Hey Ryan, there's a there's poop that's coming that's spewing out of the kitchen sink. It's all over the kitchen floor." And this was like at 11:00 PM at night. So, I was like trying to call around and find somebody to sanitize it. It was also backing out of the the shower drain into the the bathrooms. And so, they stuck a camera down the pipe and found that there were these really thick tree roots from one of the oak trees that I had that were just digging into the pipe and broke the pipe in half. And so, they had to dig up the whole thing and replace the whole line with PVC. Cost about $9,000. I also figured out later on that I didn't really have an AC system. I guess I just overlooked that fact because it was a hundred-year-old house. It had no ductwork or anything. So, I had to put in a mini-split system because, you know, putting the ductwork in would have been pretty expensive. So, it cost me about 15,000 to put in the mini-split system AC system. And then I also had a rotting deck I had to replace. I think that was like 2,500 or three 2,000 somewhere around there. I also had a lot of pest issues. And all in all, all that added up to over $30,000 within just a couple months, probably within the first six months of me purchasing the property. Steven Weinstock (12:20) So, in hindsight, what would you have done differently? Would you have asked the seller to give you a concession? Would you have not purchased the deal? Or would you have at least been notified and built it into your cost that, "Hey, you know, this is costing me an extra 30K. It still pencils in. I'm going to move forward." Ryan Chaw (12:38) Yeah, I definitely first would have added more inspections on top of the normal home inspection. For example, the sewage lateral line inspection I mentioned. You can get like a plumbing inspection. If you suspect there's something wrong with the electricals, you can get an electrician in there. Uh for HVAC, you can get an HVAC technician in there. And usually these inspections only cost like $100. But they will find things most often that, you know, basically I figured this out after doing this for 10 years, but most often once you order the follow-up inspections, they will find things that cost, you know, several thousands of dollars. And then you can send that to the seller and say, "Hey, this will literally cost me this much money. Please uh pay that as a seller concession." Or you can put that money into escrow to be dispersed at closing to pay pay for the repairs. Steven Weinstock (13:29) Got it. Um, okay. So, we have this house. How many bedrooms was this first one? Ryan Chaw (13:33) This one actually started off as like three bedrooms, and then I added another one. Steven Weinstock (13:37) Okay. And talk to me about putting tenants in. Before you put anybody in there, did you modify the house in any way? Did you put locks on the bedroom doors? I guess the shared space, did you modify it all? Uh talk to me about that. Ryan Chaw (13:51) Yeah, so I put privacy locks on all my doors, which is pretty, you know, fine for students who are living together. I did divide the living room in half. So, just like some drywall and a door. It cost me about $1,500 to do that. And it was a super small bedroom. I think it was only 70 sq ft. Uh but I was still able to rent it out for $550 a month. Even for the smallest ones. But nowadays, you know, most bedrooms are around $700 a month. You know, so when I realized that the more bedrooms I could add to the house, the more rental income I could get, I started really investing in houses that are larger square footage. Usually 1,500 sq ft or more. That way it has Usually it has like a dining room, family room, and living room. And so I'll turn the living room and family room into bedrooms, and then keep the dining room as the common space. Most of these students actually don't need a lot of common space. They hang out in their bedrooms most of the time, or they're at school, or at the library, or out with their friends, or whatever. So, really you can just maximize the bedroom space and just have one big nice common area. Steven Weinstock (14:59) I guess you're paying all the utilities on this, and that's built into whatever you're renting the rooms for. How are you handling, I guess, disputes between the tenants? I guess you're trying to get the same type of people, which are college students, possibly in the same uh the same school. Uh hopefully you got a lot of referrals. Hey, my friend, your friend, you know, if they take the house together. Um how are you dealing with cleaning, you know, just basic cleaning the bathrooms and the kitchens? Uh, who's paying for that? Who's arranging that? Ryan Chaw (15:27) Yeah, so for the most part I empowered the tenants to kind of handle those things on their own, but what I do is I really target uh, this is my strategy. I try to target groups of friends, you know, maybe they're all on the same swim team, for example, and they just I have like a house that's the swim team house and it's been the swim team house for like the last three years. I have another house that was the baseball team house. Another one that was the pharmacy house. And it's basically because they're all friends, they kind of work together to keep the house in really good shape, uh, divide up the chores, things like that. But in cases where I have individuals who move in and they're not friends and they don't know each other, what I do is I host a town hall meeting and I'll just get somebody to be my local boots on the ground to just host a town hall meeting to just meet each other, get to know each other a little bit, icebreakers maybe, and then divide up the chores. So, who's going to do trash? Are we going to have a trash schedule? You know, what's the plan for vacuuming? What's the plan for cleaning up dishes, et cetera? So that they set the intention at the very beginning, it kind of creates a better relationship between the tenants so that they take care of those issues. Although that being said, I do provide a once-a-year cleaning basically upon turnover when the new tenant or the old tenants move out and the new tenants move in. Steven Weinstock (16:48) How were you collecting rent? Was it from each person individually? Did each person have their own lease? Were they sending you money by Zelle or QuickPay back then? How was that? Ryan Chaw (16:59) Yeah, so I do individual leases. I think I did do a group lease before, but nowadays I just do individual leases and they send it through Zelle. So, Zelle is is pretty easy. You can, you know, figure out exactly when they paid it. However, I started moving to a more of a property management software uh called Buildium. Buildium is a little bit more expensive. If you are just starting out, I would recommend TenantCloud. That's also a really good one. And those can automatically charge late fees, so you don't have to keep track of all that. It's all tracked in Buildium. It will automatically charge a late fee, and then it will send out emails to them about the the late rent and all that. Steven Weinstock (17:40) How long did it take for the second property, I guess? One year since it's a once-a-year strategy? Ryan Chaw (17:44) Yeah, pretty much. 2017. I I bought one property every every single year since 2016, at least one. Steven Weinstock (17:51) Did you sell any properties? Ryan Chaw (17:52) I did. I sold my very first one, and I used that to buy a bunch out of state. Steven Weinstock (17:57) Got it. Did you sell it strictly because you wanted the money, or did you sell it for any other reason? Ryan Chaw (18:02) It was the hundred-year-old house, so obviously there are a lot of maintenance issues that just kind of came up. And I was like, well, you know, I don't want to just like wait on this house because eventually I'm going to have to replace the roof, et cetera. So, I might as well sell it since it was only four bedrooms. Because I you know, I didn't know how to do the strategy at first. And I sold it for 437,500, and I had bought it for 262,000, if I remember correctly. So, um yeah, it went up almost double in price, um a little less than double it in price. And I was able to cash all of that out to Ryan Chaw (18:38) buy like four other properties out of state. So, it made sense, sacrifice one to purchase four. Steven Weinstock (18:44) For that, did you use any kind of tax saving strategy on the sale, a 1031 maybe? Ryan Chaw (18:48) No, I actually cashed out some of it. I didn't want to be too pressured to buy like four rentals and be within the window and all that. Plus, I did want some cash at the time. Steven Weinstock (18:58) So, you paid the the taxman, which we all hate doing. Understood. Ryan Chaw (19:01) Um, most of it was shielded, actually, because I had a lot of depreciation that I took on the new properties. Steven Weinstock (19:09) Interesting. Interesting. Ryan Chaw (19:10) Yeah. Yeah. Yeah. Steven Weinstock (19:11) Okay. Where you said that you mentioned that you're buying out of state, where? Ryan Chaw (19:15) Ohio. Cleveland, Ohio. So, I bought nearby Case Western, and I also had bought one in Huntsville, Alabama. So, I just basically I look at the top colleges and then I go down the US News Top College Report to find the best colleges to invest near because if you think about these students that go to these colleges, they maybe got straight A's in high school, they're really focused on their studies, you know, high SAT, well-rounded students, whatever. And so, they're like really serious about getting their degree. Maybe they're studying for their doctorate for a lot of these schools like medicine, pharmacy, or dentistry. So, they make really good high-quality tenants. In fact, these are some of the best tenants in the whole US in my opinion. And it's it's because they're studying to become doctors, right? And they don't have any time for, you know, like wild parties or anything like that. Most of them are the ones that I take are grad students. Steven Weinstock (20:10) So, you know, these these properties are not an hour's drive from where you are in California unless you're telling me you moved to the Midwest. How are you How are you finding the deals? Uh, do you have any help with managing? Are you just hiring it out? Talk to me about that. Ryan Chaw (20:25) Yeah, so it just depends on what I guess level you're at with the real estate investing. If you get past four or five properties, I highly recommend hiring out a team, like a virtual assistant team. So, I have four team now. So, I have a virtual assistant, actually two virtual assistants in the Philippines. Usual pay there is around five to seven dollars an hour, up to ten dollars an hour. And so, you know, I basically have a full-time VA managing all the rentals. And I do have boots on the ground as well to help do the tours, maybe do a home inspection quarterly, and then to host the town hall meeting that I talked about when the tenants move in. And so, I I don't have a formal property manager, but I hire somebody who can I can basically pay on a per case basis where, you know, they get 20 or like 35 bucks or 50 bucks per tour that they do and like 80 bucks for a home inspection, whatever, right? And so, I don't need somebody to I mean, I guess I hire somebody the VA to do the marketing and the sales and then help coordinate the tours and then I just have the local boots on the ground who can do the the actual tours, etcetera. So, Steven Weinstock (21:36) Other than, you know, looking at the top list of colleges, I guess you're also, you know, correlating that with areas where the prices are, you know, well priced, I guess regulation. How do you settle on or how did you choose Cleveland and Huntsville? Ryan Chaw (21:54) Yeah, I just found like a really good deal for both of them. The numbers made sense. Basically, I will go to like Reddit and Facebook groups to see what I can charge per bedroom. There's a lot of Facebook housing groups that you can just type in the college name like, you know, University of the Pacific college housing groups or class of 2027 or whatever. And then you can see what people are asking for for for rent and what their budgets are. And then you just multiply the rent per bedroom times the total number of bedrooms you can get at the house by adding usually by adding walls and doors and stuff like that and then that will give you the rental income. And I think the one that I saw, it was making 3750 a month in rental income and the the purchase price is only $211,000. Was it 211 or 210,000? $210,000. So, super low mortgage payment with 3750 a month in rental income led to a cash flow of about $2500 on a, you know, something I only put 42,000 or $43,000 down on. Steven Weinstock (22:59) Wow. Wow. Okay, so you're no longer a pharmacist. You have some VAs. The VAs are working, are they working like 40-hour weeks or not necessarily? Ryan Chaw (23:09) Yeah, one of them is 40 hours a week and the other is 20 hours a week. Steven Weinstock (23:13) Got it. For this business that you have now, for this portfolio that you own, how many hours a week, a month, a day are you busy with? Ryan Chaw (23:21) About an hour and a half to 2 hours. Steven Weinstock (23:24) A week, a month? Ryan Chaw (23:24) A week. A week. So, I will spend yeah, basically it's weekly meeting with my team and then, you know, there's it's kind of like Slack, but we just use Google Chat to, you know, ask, "Hey, is this this repair approved? Can I, you know, can we make payment on this, right?" But pretty much most of my time that's spent is just on that team meeting that we have once a week. Steven Weinstock (23:48) And that the the VAs that you have, I guess over time you've trained them to be better than when they started, but are they, you know, other than, you know, access to the bank account so to speak, are they fully involved? Do they find the plumber, you know, for the leak that's in Asheville? Do they notify you that this tenant is late and I think we should evict? Talk to me about, you know, the actual work that these VAs are doing and how it helps you. Ryan Chaw (24:14) Yeah, I trained them to do everything and they have a SOP as well. I also uploaded all the SOPs and the transcripts of all of our meeting recordings into what I call the company brain. It's a software that I created using Claude Code and then you can look up anything on there, what we've done in the past, if you need any guidance on anything like leasing, like if someone's paying late rent like you said, if we need bids for this specific project, they learn they know how to do everything and if they don't, they can just go to the company brain task. But yeah, we have standard procedures. For example, for every project that's over a thousand dollars, we require three quotes, three bids. They're allowed to approve anything under 200 for an inspection and anything under a thousand for a like simple repairs. And then they for like the marketing season for example, they they're told to make 30 calls a day and I can also print out the call log and stuff like that to keep track to make sure. Steven Weinstock (25:14) Got it. Okay. So you really you really train these guys well. Maybe offline I'll ask you for some help though. Getting VAs is something I've thought about. You know, maybe I'm a little older than you, so the whole concept of outsourcing and VA and all that is, you know, just something that I didn't grow up with so to speak. Ryan Chaw (25:32) Right. Steven Weinstock (25:33) You already mentioned AI, you mentioned Claude. I was going to ask you how you're using AI in your business, but I guess you're fully embracing it. Ryan Chaw (25:41) Yeah, lots of ways. I mean, you can have it analyze data for example. You can print out all the calls that were done, you know, maybe it comes in in a sheet and you want it in a graph form so you can see like weekly calls made, you know, how long they've been spending on the calls, graphs for that. You can use Claude Code to develop pretty much any program you can imagine. If you can imagine it, you can pretty much create it. I truly believe that. Just start opening up Claude and just start playing with it. You don't even need to download the desktop Claude Code, you can just use the Claude chat and it will create code for you. So, yeah, it's it's pretty amazing. Like I said, I I did the company brain. I also created auto responders. So we get leads through apartments.com, realtor.com, etcetera. And the auto responder will go through our emails, it will find the leads and it will reply to them automatically with our application form, our website, a picture of me, and basically it's all nice and templated and the people can reply to that. Steven Weinstock (26:42) What are you spending a month on I guess software? You mentioned using a Buildium. I think you said Buildium. What besides Buildium, what else are you spending in terms of software? Is it just tokens for Claude? What else are you are you using? Ryan Chaw (26:57) Yeah, honestly, Claude is super cheap. I I It's like $20 a month, right, for the monthly plan? We I also use RingCentral, which is the phone line. That's a little bit more expensive. I think it's like 35 to 40 bucks a month if you include SMS per per line, that is. So, two lines would be like 80 bucks a month. And then there's the Ring camera system, and that's like I think it's $10 or so. I can't remember what the subscription is, but it's not too expensive, and I just have a Ring camera for all of my houses. Just, you know, to make sure there's no break-ins or anything like that. Steven Weinstock (27:33) Sorry, in these houses Ryan Chaw (27:35) Yeah. Steven Weinstock (27:35) are you putting up multiple cameras? I guess in the common area and the exterior? Um, I'm assuming obviously it's not going to be in the bedrooms. You know, it's up to the tenant to put their own camera if they want. How many cameras are you putting in these houses on a regular basis? I don't, you know, roughly. Ryan Chaw (27:49) Yeah, just at the entrances. So, the Ryan Chaw (27:51) front door and back door, usually. Uh, most of my houses just have a front door and back door, so I'll just put in those two. Steven Weinstock (27:57) Mhm. And as far as utilities, the gas, electric, are you paying for that? I'm assuming you're also ordering the internet and they're just stealing Wi-Fi from you. Ryan Chaw (28:06) The tenants. The tenants pay all utilities. The only thing that landlord technically pays for is the like the landscaping, but electricity, uh, gas, water, garbage, internet, I don't know if I'm missing any, sewage, I guess. Uh, yeah, that's all of that is paid by the tenants, and it's split evenly among the tenants. So it's not too high of a bill for each tenant. You know, if you divide it by six people, for example, it might only be like 45 bucks to 80 bucks normally per month. Steven Weinstock (28:35) And you keep it under your own name, or you choose one of the tenants to put it under their name? How does that work? Ryan Chaw (28:40) If it's a group of tenants, I, you know, if they want to kind of handle everything on their own, then they could put the utilities under their name. But a lot of times I do put it under my name, especially if it's like individuals who don't know each other, obviously. So, I would just put it under my name and I'll charge them back. And we're I'm starting to create systems to make that whole charge back process automated as well. Yeah, right now my, you know, VAs do it, but I I'm definitely able to automate that as well. Steven Weinstock (29:08) Have tenants complain saying, "Hey, I, you know, I'm studying the library all day and this guy is, you know, running hair dryers all day. Why am I paying for his electric?" Ryan Chaw (29:16) I guess at the beginning, I sometimes had those cases. I actually don't know too much. Again, my VAs kind of handle a lot of this stuff nowadays. But yeah, you would have somebody who brings in a mini fridge, and then the other tenants are like, "Well, that guy's using more electricity. He's got a mini fridge in his room." Or one of them will be like, "I haven't been there for the last two weeks. Do I still have to pay utilities?" The answer is, unfortunately, the only way to just treat everyone as fairly as possible, since we can't like literally measure every, you know, wattage that you use, right? There's no way of doing that. We charge everyone equally, period. That's it. You know, divide by six, you pay a sixth of the bill, whether you're there the whole month or not. During winter break, yeah, it sucks, everyone goes home, but you still pay the utilities because that's that's the lease agreement. But it's a lot cheaper still compared to the on-campus housing. So, like on-campus housing charges 1,200 and they force you to pay for a meal plan and parking. So, you know, at the end of the day you're spending well over 2,000 a month versus something like this. It's $700 a month, uh, maybe $45 in utilities or $70 in utilities, and that's it. And, you know, it's way way way cheaper compared to the on-campus. So, a lot of people actually, there's like very very high demand for off-campus housing almost all the time. Steven Weinstock (30:34) Your tenants, they're mostly students, you know, well, good students, top colleges. Are you, are, are tenants, are they working? Are you asking their parents to co-sign on leases? How, how does that work? Ryan Chaw (30:48) Yeah, you definitely, the best part about this is you have guarantors on the lease. So, most lease, you know, tenants won't have guarantors necessarily, but students always have like parents or relatives that like support them. And so, I always have them sign as a guarantor on the lease in case something goes wrong at the house, the parents are on the hook, right? If there's massive damage to the house or something like that, the parents would be on the hook. And so, I have that. I also, a lot of these students have student loans or they might have a stipend or financial aid or scholarship. Some of them even have a full ride. I had one person who had a full ride scholarship. And if he didn't use it, he would lose it. And so, he moved back home to actually take care of his grandpa and left the room empty for the full year, all 12 months. So, he was paying full rent for 12 months without ever living at the property. And that's because he wasn't paying it, it was the scholarship that paid for it. Steven Weinstock (31:45) Interesting. Okay, so you're working about an hour and a half a week. I'm assuming you're not just doing nothing the rest of the time. In the introduction, I mentioned that you started something called the Newbie Real Estate Investing. Can you talk to me about that? Ryan Chaw (31:58) Yeah. So, I, I found that this method was one of the best ways to get started in real estate investing, the rent-by-the-room strategy. And so, I didn't find too many people else teaching it at the time, and so I had to figure out everything on my own. But that's why now I offer coaching on how to get started with this, how to basically do the market analysis, analyze a deal specifically for student housing and renting out by the room. And I teach the A through Z, how to renovate it, market it, manage it, et cetera, while you're working your full-time job because most of the people who sign up for the program are busy professionals. And that's a one-on-one coaching six-month program that I offer. Steven Weinstock (32:41) How could they find you? I guess they could Google Newbie Real Estate Investing? Ryan Chaw (32:45) Yeah, Google that, Google my name, Ryan Chaw, C-H-A-W, or to get my free PDF guide that teaches you how to uh, get started in student housing. It's just like a a free guide on how to do that, as well as some of the mistakes I made and how I avoid them. You can go to www.newbierealestateinvesting.com. That's www.newbierealestateinvesting.com/guide. And Newbie is spelled N-E-W-B-I-E. Steven Weinstock (33:13) Okay. Do you uh, are you still currently buying or or planning on buying one property a year? Ryan Chaw (33:19) Yeah. Mhm. That's the that's the the, you know, my goal since I started. So, continuing to expand. Steven Weinstock (33:25) With your background and your family history of uh, owning property forever, is that what you plan on doing? Owning these houses till uh, you could pass it down on an asset that the basis? Ryan Chaw (33:36) Yeah, pretty much. I'm a buy and hold investor for life. So, they cash flow, they appreciate. I might take out like HELOCs or cash-out refi to, you know, expand to more properties. But, yeah, for the most part, just hold for life. There's always the option that maybe 10 or 20 years in the future I might sell one of to pay off all the others' mortgages. Uh, that's another option what one of my colleagues did. They had like eight properties in Sacramento. They sold one, they paid or sold one or two and they paid off like six of. And so, they just owned a bunch of them free and clear, which is really nice because then you have true peace of mind. You don't have any debt that you're paying, other than taxes and insurance. So, those will cash flow very, very well, right? Steven Weinstock (34:19) Yeah, I mean, that that is great, but it's, you know, owning real estate is so dynamic. You know, it's not one size fits all. You know, it also matters, you know, are you 25 or are you 60? And, you know, the different strokes for different folks. So, if you're in growth mode and you're 31 and you're active, you know, you might be fine with that. But, you know, you fast forward till you're 55, you know, hey, you know, I don't mind the, you know, paying some off and, you know, not necessarily maximizing all my debt. So, you know, there's no wrong method, really. You know, I know people who buy two, three family homes and they only pay cash. And sometimes it takes them two, three years to come up with the money. And, you know, it's hard to say that they're wrong. They're living well, they're paying their bills, they have peace of mind, they sleep at night, they don't know what it's like to deal with banks. And, you know, if it works, it works. So, you know, there's really no wrong way to to treat, you know, debt like that. Ryan Chaw (35:19) Mhm. Steven Weinstock (35:19) Ryan, it was great talking to you. You mentioned your websites. We're going to put it in the show notes. I don't know. Tell, tell me what do you want to say. You know, any last thing you want to tell them, how they could reach you, uh, email, uh, LinkedIn, you know, anything. Whatever you got. Ryan Chaw (35:35) Yeah, again, the best way to Steven Weinstock (35:37) If you're writing a book, you know, whatever you got. Ryan Chaw (35:39) No books yet. But, the best way to really reach me is that that website, www.newbierealestateinvesting.com/guide. But, you know, you can also reach out to I'm on LinkedIn. My, my, I have a YouTube channel. Just uh Google Ryan Chaw, C-H-A-W. The biggest piece of advice I would give is invest as soon as you can. As soon as you have that down payment, uh, buy real estate because it builds up over time. That's after five to eight years, that's where you really see the big benefits of real estate investing. And I I don't think I've really met a real estate investor who's owned real estate for eight years who hasn't become a millionaire. So, you you know, just get into it as soon as you can. And rent by the room. Look up rent-by-the-room strategy. It's a really good strategy. Steven Weinstock (36:26) Ryan, it was great. If you made it this far in the episode, please comment the word awesome, so we know that you're watching. And please like, subscribe, and share. Tell your friends about the podcast. Ryan, it was fun talking to you. I think I learned a lot, even though you're younger than me and I'm doing this 25 years. I like the way you think. I think, you know, you have a a good background, Steven Weinstock (36:48) especially, uh, based on family and and what you described. And I'd like to stay in touch offline. And thank you very much for coming on. Ryan Chaw (36:56) Thank you again, Steven, for inviting me on the show. Steven Weinstock (36:57) Talk to you later. Ryan Chaw (36:58) That's it.