On the show today we talk… Rentals, Tiny Homes & Turo with Justin Cambra!
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Show notes: Rentals, Tiny Homes & Turo with Justin Cambra!
Crazy weather in the PNW for Julie! She can’t escape the sun!
We are stoked to have Justin Cambra back on with us today!
Welcome Justin to the show!
Checkout Justin’s earlier podcast with us by clicking here
He got into real estate in 2016, and was making good money with Amazon RSU’s. Then he’s Dad became sick and he had an Eminem moment with his one shot. Which worked, and he just retired with financial freedom in Sept 2022.
Justin had a day job in finance, so he was able to run numbers on real estate really quickly.
In 2017 he bought his first non occupied multi family apartment.
What markets
Seattle, Milwaukee, and Detroit.
Do you still have your first multi family property?
No, he 1031’d that for more cash flow. He needed to trade equity for more cash flow. You can’t eat equity.
Total portfolio today
39 deals – 105 rental units.
How Justin paid for his properties as high paid tech person
Today is so different than when Justin got started. Today, look at where you’re spending your money, and try to pocket your money and save it. Stack that cash, and be in a position to buy! We have huge opportunities coming in 2023.
Buying that first property
He had to show reserves and borrow some money from his brother to show them.
On paper you hear that you need 20-25%, but there are also closing costs, and excess amounts of liquidity. Think stress testing you. Can you pay them back.
Banks are very cautious right now!
Could you use RSU’s as reserves
Yes, but those can shift down in value quickly. So, cash is safer for you and banks.
Justin was doing an asset backed loan against the RSU’s, rather than selling them.
What was your plan?
At the time the world was different.
You can borrow the money and make money.
You can borrow the money and the RSU’s go down.
When the Amazon stock was going down he got margin calls.
What are the parameters to hit the 60% loan to value
It depends on what stocks you have. He only had Amazon stock and could only borrow 60% of his portfolio.
If the stock goes down, you have to bring money to fulfill the percentage requirement.
This is why you have to understand the whole flow of the money.
11 until project
On the first one he sold the stock, then he heard about the asset based loans. So he was using that and the cash flow from the properties to buy more properties.
These were Midwest cash flow properties that are lower priced properties. He counts zero for appreciation in this area.
What is the average down payment plus reserves
2017-2020 – 15-17% down
2021-2022 –
Roughly it was taking him $20k to get into a new property.
When did you start using the properties to pay for the next deal?
About 15-20 properties in this started happening.
He refinanced a bunch of properties, and it was so crazy because his payment went down because of the low interest rates.
How is the appreciation happening
The coastal areas were increasing in value so fast that money started flowing into the midwest and raising the value of his properties.
Justin thinks that we are going to bring jobs back to the midwest.
Theory of the future
We will bring jobs back home to the US, and the low cost areas and land are in the midwest.
Tiny Homes
He wasn’t looking for tiny homes, but found an ad on Christmas. And bought 3 tiny houses that one night (eventually). Then started looking at what AirBnb would make for a tiny home, and realized they made money.
Trying to bring tiny homes to primary residence
The issue of having the unities at the street made the cost too high. So, he moved them to a mobile home park, then connect with Todd Mecellups, and moved the homes to Bonny Lake where they started making money.
Overall Justin is as passive as can be on these tiny homes.
$150k plus $75k
August was best month, which was $15k in gross rent ($9.5k net). That was peak. Oct could be just enough to cover expenses.
Would you do more tiny homes?
He would with his own land. So the payments would be paying down the land, rather than paying rent for the land.
Justin has a variety of real estate risk
Seattle rentals – safe
Midwest – medium
AirBnb – most risky
Turo car rental
It’s like AirBnb for cars instead of housing.
He saw friends doing this and thought it sounded fun.
He bought 2 cars while he had his W2. Two Subaru CrossTrek’s. Then just started last week.
The cars are financed and brand new. Zero out of pocket and no payments for 90 days. He’s made $300 now and $900 in future booking.
Expenses for Turo
Cleaning – insurance – car payment
Around $750-800 to break even (including Turo fees). You can change the fees for Turo depending on how much insurance you have.
In today’s world these are Smart Cars. You don’t have to be there to rent them.
Why would you do this instead of an airport rental?
Post Covid the rental cars aren’t as cheap as they used to be. All the large companies are charging so much more because of supply and demand.
The other key is that his friends are doing $70/day, but he’s doing $40. You really need to get 10 reviews to become a super host.
Turo with AirBnb
Justin has a house hack, but not an AirBnb where he’s keeping the cars.
30 day stay by Sarah Weaver – Book
Short term rentals are 30 days or less. The local nurses are getting a 3-4 month contract.
Which is your favorite investment
Justin is 100% focused on connecting buyers and sellers in greater Seattle area. Finding off market deals or listing deals in the area. List, wholesale, or buying for himself.
Grow the show local?
80% Seattle, and 20% doing other things.
What is the best piece of advise you’ve learned this year
There’s 2 things…
Creative financing has to happened because interest rates are going up.
Cash in your hands is paramount. Liquidity is going to dry up. He’s been pushing money to lines of credit to have more cash on hand. Save money and push to credit lines. You MUST understand money management!
Key thing… credit used to be easy, but it’s going away or being reduced.
Profit First – Book
Its Justin’s plan to get into Profit First setup.
Checkout Julie to help talk Modern Real Estate
Where can people watch and follow Justin
https://instagram.com/jccambra
Why does Turo work
Rentals are higher and taxes are in place that people have to pay. When you book an airport rental you have to pay above what the ticket price is.
Is there a big Turo inventory in Seattle?
He didn’t look at the competition, but the numbers made sense for him. Because he lives so close to the airport it makes sense that he’s do better than people who are farther away.
Justin just hired a VA to do his lead generation.
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