Sophisticated Strategies for Investing in Turnkey Rentals with Scott Stanfield

What if you could seamlessly balance a high-demand career with successful real estate investments? Join us as we explore this intriguing question with Scott Stanfield, an engineer-turned-real estate guru. Scott's fascinating journey from working as a scientist for the Air Force to becoming a notable player in the turnkey rental market offers invaluable lessons for anyone looking to break into real estate, especially those juggling busy careers. Discover how Scott transitioned from self-managing luxury condos in Cincinnati to leveraging turnkey properties for a more strategic and time-efficient investment approach.

Throughout the episode, Scott shares his meticulous research process and strategic planning that guided his first turnkey purchase in Memphis. We delve into the nuts and bolts of turnkey real estate, including the advantages of working with established providers, understanding market cycles, and the critical importance of adapting investment strategies based on market conditions and personal risk tolerance. The discussion also covers the diverse opportunities across different states, from Ohio to Alabama, and how economic trends, interest rates, and industry presence can significantly impact your investment decisions.

For those new to real estate, Scott offers practical, actionable advice on accumulating capital, making solid first deals, and leveraging free resources for self-education. He also touches on learning construction techniques via online platforms and the intriguing world of home inspections. Whether you're a seasoned investor or just getting started, this episode is packed with real-world examples, insightful anecdotes, and expert tips that will inspire and equip you to make smarter, more profitable investment choices. Tune in for an engaging and informative experience that will leave you ready to take on the real estate market with confidence.

https://scottastanfield.com/

https://scottastanfield.com/book/

Chapter Timestamps

(00:03) - Real Estate Investing for Busy Professionals

(13:11) - Investing in Turnkey Real Estate Properties

(27:15) - Investment Strategies and Market Insights

(38:27) - Market Trends in Real Estate

(44:56) - Real Estate Market Cycle Trends

(55:07) - Starting in Real Estate Investing

(01:04:19) - Learning Construction and Renovation Techniques

(01:11:03) - Home Inspections and Real Estate Discussions

(01:22:33) - Investment Strategies and Real Estate Marketing

(01:27:31) - Confidential Real Estate Q&A Session

Highlight Timestamps

(16:29 - 17:22) Investment Strategy and Property Acquisition (53 Seconds)

(31:12 - 32:43) Entrepreneurial Strategy and Financial Planning (91 Seconds)

(36:58 - 38:02) Navigating Disagreements With Inspectors (65 Seconds)

(46:16 - 47:22) Real Estate Investment Strategy (66 Seconds)

(56:52 - 58:50) Financial Preparation and Preservation (119 Seconds)

(01:02:35 - 01:03:51) Book Expansion Through Video Presentation (76 Seconds)

(01:08:50 - 01:10:20) Home Renovation and Construction Plans (90 Seconds)

(01:19:07 - 01:21:44) Optimizing Real Estate Investment Portfolio (157 Seconds)

(01:26:27 - 01:27:23) Real Estate Investment Strategy Development (56 Seconds)

Transcript

Marcus: 0:03

Welcome back to MVP Real Estate Podcast, season 4, episode 11. We got Scott Stanfield here. Very bright guy, engineering mindset and profession was actually in the field and then slowly progressed out into his real estate. He focuses on a really cool niche of turnkey where I think a lot of I guess, newer investors could come in. In Excel, like you, will gain your knowledge in real estate and you're playing kind of the long game on this type of investment. But very, very crucial for a lot of people that want to get in that don't have the surplus of time or the network of people to do those fix and flip type investments. So another very beneficial avenue he's got a book, he's got a website that we're going to attach to the show notes and he's got a lot of content on his website alone that you can go and research. But before you do that, listen to him talk about it. Very bright guy. So before we wait any longer, let's just bring him in, let him talk about it. All right, scott, thanks for coming on the show. Thanks for giving us the time.

Scott Stanfield: 1:09

Thank you. Thank you for having me Been looking forward to it.

Marcus: 1:13

Yeah, from the little bit of talking to you before the show, I've already preloaded my note card with some questions. Before we get into those, though, for our audience, give us a I always call it the elevator speech, the 30 second to a minute kind of background of how you got into real estate, because I'm always curious and it's always fun to see what route takes you to this wonderful world of real estate.

Scott Stanfield: 1:44

Yeah, sure. So I guess it really began when I was young. I always wanted to have a business. I didn't know what it was going to be. I even thought about fast food, and then, of course, I shelled that, went to college, and I guess that's really when I got started, and when I got out of college, it was really the first time I had extra money, and so I started thinking, well, what am I going to do with this extra money? How am I going to invest it? And I researched a lot of different things, and real estate really just resonated with me, and so that's how I got started, and I just haven't looked back. Now I do other stuff too. It's not just real estate, but that is my favorite investment strategy.

Marcus: 2:17

Yeah, because a little bit on your website and I might be wrong on this one but in your book you were talking about how to get into real estate as a busy professional. So I kind of figured you had some other businesses going on at this time. So you went into real estate thinking, all right, good, investment in something I can do while I'm still focused on my other priorities or responsibilities.

Scott Stanfield: 2:38

Right, yes, and it didn't start that way. I actually went the more traditional route. I sourced some deals that I thought were really good. They turned out to be fine these were actually luxury condos in the Cincinnati downtown area and they had a really nice location, great view, and I self-managed those and I learned very quick, especially in the beginning. I was not the best manager and I got a lot better with it, as I learned very quick. Especially in the beginning, I was not the best manager and I got a lot better with it as I learned. I made some money on those, but I realized it was a huge time sink and I was working 50, 60 hours a week for my job at the time, which I was a scientist for the Air Force. Anyways, that's when I started wanting to figure out something different, and that's when I started looking at turnkey rentals and turnkey providers. And you know how could I build a business plan that minimized the risk of working with a provider and still gave me the benefits of real estate? And so that's really, really when I started up on all of it, and that was about August 2017 is when I made my first purchase that way.

Marcus: 3:47

That's cool. And you said Cincinnati was the first property you purchased.

Scott Stanfield: 3:51

Is that where you were like geographically or was um, yeah, so the air force research labs are in Dayton, ohio, and there are other places too, but there's a really large presence there, right Patterson air force base Uh, so that's where I was working and that's people don't know. That's about 45 minutes north of Cincinnati and I bought some property there in Cincinnati and that was, I think, 2011 and 12 when I bought those, and then I sold those and then went right into turnkey. Yeah, Research too right, I didn't just go. Oh yeah, I think today we're going to do turnkey. No, no I. I spent time. I read a lot of research that really looked at what my resources were going to be, how was. I going to handle those risks, what were my expected profits and how is this going to really develop as a business?

Marcus: 4:44

and then, once I had that figured out, you know I took action yeah, in that Cincinnati, the basically the whole Ohio as a state, has always been a hotbed for investments, like even today. It's still a very good market for rentals it is.

Scott Stanfield: 4:59

I at least I think it is, and I compare it with you know a lot of other places around the country, but you know the price points are good. Um, I you know you have pretty good, uh, landlord friendly laws, that sort yeah it's decent, so it does make for a pretty good investment, uh state yeah, we had another guest that was from ohio.

Dan: 5:20

Who was that? Uh, was it jesse lang? I can't recall where she I thought, I thought she was her. They talked about their focusing in that area and then I don't know it was she was. She was an interesting guest, not to get a sidetrack, but how long? How long were you in the air force?

Scott Stanfield: 5:40

oh, I so never was actually in the air force just a scientist yep, just a scientist working there. So I finished my phd in 2009. I actually started with uh at the air force. Before that I was a co-op during my undergraduate uh, so that would have been about 2002 forward, and then that lasted until right around 2021 roughly 2021 and that's that's when I went self-employment and it was in different capacities. You know, I for a while as an in-house contractor last four or five years I was with another company and at that point I still supported a lot of effort with the Air Force, but I was also working on stuff for NASA Navy just a lot of DO with the Air Force, but I was also working on stuff for NASA Navy just a lot of. Dod type work.

Marcus: 6:30

Awesome. Yeah, that's a cool world that I know nothing about.

Scott Stanfield: 6:41

I know that it's a fun world. You get to work on some neat things you know projects that only the US government could work on because of the expense, and so it gives you a unique opportunity that way, but it comes with. You know other things too. Like everything, it's good and it's bad.

Marcus: 6:55

Yeah, and I'm envisioning the audience like turning up the volume and seeing what secrets you're going to let out. You're working on None the public doesn't know about. We'll move on quickly so you don't go there. Oh, it's easy. Um, all right. So you mentioned something a little bit ago about you were in school, you graduated and your thought was where can I invest? That is not a thought of many recent graduates from college, so where did you get that bug?

Scott Stanfield: 7:24

I that came with the idea of, you know, I'm working and enjoying this, but I wanted the ability to choose right, and I, you know, maybe when I'm 30, I don't care as much about that ability to just have that flexibility and choose whether I work or not. But at 40, 45, I saw other people as they continued to work where they, you know, they wanted more control over if they had to work or what happens if you get sick, that sort. And so for me it was just I guess I'm a planner and it really stems from that and it just stems from observing other people and then realizing that, yeah, I should probably have a plan Now. To be fair, the first few checks after I finished my PhD completely blew that money. So I had a house, I bought a nice pool table, I bought a bar, I bought some cinema seating that had, like the electric controls, and then I bought a theater and a nice foosball table, you know.

Marcus: 8:26

So it the first you're enjoying life a little bit.

Scott Stanfield: 8:29

I enjoy it and and I needed to do that I was wound pretty tight when I finished my PhD. I was tired. You work a lot, and so it was kind of nice to just finally be able to spend. Realize at that point never had any money when, when you're in school, you are broke yeah, you're about ramen noodle dinners, that's no joke. You really have no money, yeah and so it was just nice to finally spend a little bit. And then after that I got serious.

Marcus: 8:58

Yeah Well, it sounded like you're a little bit serious before that, because even before the show you're talking about your, your lifestyle, and it sounds like it was very disciplined you. You, you're a morning person. You wake up at what time?

Scott Stanfield: 9:12

uh, anywhere from five to six uh just depends. Normally it's it's around six these days, but it used to be five, um, but that's just how it is yeah probably get my coffee and then I get moving and I already know exactly what I want to do for the day and I just don't stop until it's done, and sometimes that makes for late nights. But you do what you got to do to just be productive and you know, achieve your goals and that for me, that's what worked so, yeah, and that I think, a key component to being self-employed.

Marcus: 9:47

Because you don't have the office, you go in where they're like, they give you your task and that's what you complete for the day. You have to create tasks that are being done for the day. Yes, you.

Scott Stanfield: 9:55

You, very much, are in control of exactly what you're going to work on, and you have to be very disciplined. You have to first be able to identify what's important, what's not, and spend your time wisely, and then, after that, you it's like you're held accountable by a boss or something. So you really have to put processes in place, keep you on track and keep you really moving. It's not hard, it's just a different way of thinking, different way of doing things, and once you get used to it, it's fine yeah, yeah, and I'd agree, because I would.

Marcus: 10:29

I have like a whole morning routine. Like I wake up and I usually I'll lay in bed for a little bit, which seems lazy, but I'm usually just like thinking I'm, I'm going through my day of like, okay, I'm gonna, I'm gonna get in the office at this time. I already have my list list made up from the day prior of the things I want to get done the next day. I'm an advocate for the ice bath. I'm still shivering from my soak this morning, so I like to get things moving and going right away. It sounds like you are the same.

Scott Stanfield: 11:00

Yeah, I think you have to do that, otherwise it's just too easy for an hour to slip by, or two hours. You just got to get up, get moving and get focused, and the sooner you do that and soon you get your body and your brain firing, you know the quicker you're going to actually get something done.

Marcus: 11:17

Yeah, yeah, and you had mentioned some of those safeguards that you put in or your, your discipline things that you put in like you you mentioned to check your emails then put it away.

Scott Stanfield: 11:27

Yeah, I do Put it away set my phone aside, put it on silent, just because you're working. A lot of people think you're self-employed, they think you're not working and they can just call you or text you. And it's a distraction and you know that 30 second phone call or text message. You're going to lose a lot of time because once you put your phone aside, you have to go back and get focused again, get back on what it is you're doing. And that doesn't just happen instantly, at least not for me. You know other people, maybe that's a strength of theirs and they can do that. I can't. I very much need to stay focused when I'm focused and just keep cranking and so yeah, once the day ends, sure then I'll. I'll check my phone and email that sort.

Marcus: 12:13

But yeah, well, I'm with you on that one. Uh, the amount of people that are like you never answer your phone. I'm like, yeah, I know, because I that exact thing. That 30 second phone call just like derails what you were in. And now, once you hang it up, you're like where was I? And you're like I feel like I have to get back into my, my mental state that I was in and it takes a little bit of adjustment. Yeah, so I do try to limit that as well. So I second where you're on. I like that one. Okay, going into your first deal, I want to dive into that a little bit more. Where first? I'll start out. Where did you find it Like? How did you come upon this property? Okay, yeah.

Scott Stanfield: 12:56

So, first deal, I'll talk about turnkey provider first. I assume we want to talk about the turnkey property that I first bought, not the luxury condos, and so this would have been August 2017. At this point, I had spent a lot of time researching turnkey and I was really just ready to go. I had done a lot of research, found a provider that I felt very confident in. I knew exactly the metropolitan areas that I wanted to target, so this is actually Memphis, tennessee, and the house met all my purchase criteria, which I'd already established going into it. So this was financial criteria and then also some economic indicators, and really, you know, it was just sourced through a provider. There was a lot of checks, I guess boxes that had to be met for you know the renovation too, right, everything needed to be new, and so I passed on quite a few properties. That's one of the benefits of working with a provider. They have a lot of properties, so you can be very selective about what you buy, and so that's really how I did it, and as the properties came in, I had an Excel sheet that I used as a calculator and quickly determined what my returns were going to look like, and then I looked at some other factors, you know, did it meet all those criteria? And then as soon as it met the criteria you know pulled the trigger and that was it. It was 2017. It was $119,900. And the cash flow after all fixed expenses was about $340 a month. So, yeah, you don't make as much money when you source your deals through provider. But what's important was it was still very good returns, right, it was going to be about a 25% to 35% return if you looked at everything. So this was taken into consideration lowering your taxes, with depreciation, obviously, the appreciation, which at that time, I didn't know what it was going to look like. But it turned out to be very good. And even if you were to use the national average of, say, 3.8% for single family homes, it was going to put it somewhere in that 30% range for the year for the first year of operation. So I felt that was fantastic and that was really it and that's how I got started and it worked out very well, and so I bought another one at the very end of the year. Then I bought a few more. I just, I just kept buying.

Marcus: 15:23

Really, these were all single families single families.

Scott Stanfield: 15:26

Yeah, and I know a lot of people are like, oh well, you start with single family and then you can work into multi, and there is some truth to that. But when you're working with turnkey providers, they have so many properties that even for people who have millions of dollars, they can continue to provide property and you'll be able to continue to find properties that way. I like single family. I have looked at multi, but when I was looking at it the price for door just didn't make sense for that asset class and it'll come back around again and so in general right now, yeah, I'm very much about single family, although really I'm not buying at the moment. It doesn't meet my criteria the current market condition. That doesn't mean there isn't stuff out there. It doesn't mean there's not reasons to buy. It's just for my goals, objectives and risks. I'm not buying, but it will come back around again. I'll buy single family or I'll buy multi, multi. It just depends what asset class has something to offer that I want. Yes, that's really it.

Marcus: 16:29

Take what the market gives you, don't force it yeah, and I was going to ask on that, so I'm going to, I'm going to put the pause button on that one about you not purchasing and we're going to touch on that that's perfectly fine, let's do that because, where we invest, we do the, we do basically burr. So okay the worst property. We've got a construction wing to our company that they will go in, basically flip it, and then we now created this turnkey, but then we rent it and manage it right, and then you keep it in house refinance your equity out. Try to do it and right and that is becoming difficult with home prices and in what you're getting. So I was like on the turnkey side. What are we going with? So we're going to come back to that one, sure, but going back to this, uh, this tennessee property, this first one uh, you, you found the property through this provider. Where, where did the financing come from so?

Scott Stanfield: 17:27

it was actually a bank called Stiefel and the thing is about turnkey providers. They want to sell houses and so they realize they're going to work with people maybe like me, right, A professional, who maybe I don't have all this network stuff figured out, Maybe I don't have a lender, Maybe I don't have an insurance broker. They're Maybe I don't have a lender, Maybe I don't have an insurance broker they're going to make sure they have that available for you. Different lending sources, right, and these are going to be conventional loans. So the rates and stuff like that they're not going to fluctuate that much. And of course, you can also always go out and look independently too at other banks and just get a feel, for are the rates reasonable? You know the loan terms reasonable? So the first lender was Stiefel and I still use them today. I really like the underwriter there. I've talked to him on the phone. He answers questions for me, so it's been a very good relationship. But I made that relationship actually through the provider and so that's how I sourced the loan.

Marcus: 18:28

In that regard, you're saying I'd rather, I guess, lower my profit up front and use the provider to make sure I have that network. When you're playing the long game, like in these investment strategies, you're playing the long game, so you give up your short term to make your long term Correct?

Scott Stanfield: 18:46

I'm stepping in at somebody else's exit. Essentially, a turnkey provider is doing something similar as you. Right. You're finding this house that's got a lot of deferred maintenance, so you're going to buy it in cash. You're going to then do the renovation work and now you're forcing some equity in there, right? So some forced appreciation, and then you're going to choose to either keep it as an investment or flip it, and so I'm stepping in there when it's a flip and I'm buying that asset and then going forward with it, and so I do give up some of the uh profit. Right, you mentioned that. But I'm also only working a couple hours a month max, and it doesn't matter if I have one house, 10 house, 20 houses yes two hours or less a month and it's that way through the whole process and that was very appealing to me because I was working 40 and 60 hours. So I I understand how to do the active side. I I have done some of that and it just for my schedule. It was very tough. Once you get moving right and you've outsourced a lot of that business and you do have a good network of contractors, your involvement is less. But it takes work to get there and I just I didn't have the resources. It just it didn't fit my, my lifestyle at that time.

Marcus: 20:07

Yeah, but that on the on the flip side of that, that's a golden ticket for you, where you found your niche to where you can fit in.

Scott Stanfield: 20:14

Yeah, and I can still benefit from real estate, and I don't have to tell you this you know that real estate is a great investment vehicle, right With all the tax benefits and stuff and just that hard asset.

Dan: 20:26

it's great and so yeah it was a niche that I could actually get into and it's worked well for me.

Marcus: 20:33

Yeah, yeah. And with you carrying your full-time job, obviously, where you were saying you couldn't take on the BRRRR strategy so you went to turnkey, right, but you can't negate the fact that that that 40 hour, 50 hour job you were doing also allowed you to get the financing exactly so there was a pro to that there?

Scott Stanfield: 20:55

yeah, it was. It gave me a resource that I could leverage, right, that was what the job was doing. I. I had extra money and I know not everybody has that and turnkey isn't for everybody. But what's nice about real estate is there's so many different things you can do with it. And if you don't have the resources to go turnkey, at least in the beginning, you can try to source your own deals and try to find something cheaper, although you know I'd argue that's challenging too, right, because that's a cash purchase. You may have to look at hard money to complete some of your deals, but you know. But once you get going and start actually establishing good systems and a track record, it'll become easier for you. And then, of course, if you really develop a real company flipping houses, where you're flipping multiple per month, you're going to have extra profits. You could siphon some of that money and buy turnkey. You don't have to take time away from your bread and butter to try and set up a property management company, for example. You could outsource that. But of course that requires you finding a good provider. And they are out there. There's some bad ones and there's some good ones, like everything else.

Marcus: 22:11

Yep, and that's actually the next topic. Because you find the property, you finance the property. You're still working full-time. Did the provider also have that network to? Hey, here's a property manager that can manage your property.

Scott Stanfield: 22:27

Yeah, and so when I source out a provider, I'm looking for somebody who obviously they're putting together their marketing campaigns to funnel leads, right. So they're doing that. They're the ones funneling that lead, they're the ones that are renovating that property, and, sure, maybe they outsource some of that with contractors. Everybody does, and they may have some in-house contractors. They have a good scope, right. They know how to do this part of the process. And they're the ones that are going to be screening for tenants and they're going to turn over their property management team, which is an in-house company. And of course, I like to see that they also have their own rentals and that their rentals are in the same neighborhoods that they're buying for me. And that's important because if there's a lot of demand for their product, which there is, a lot of people love to step in on on an income producing asset that's just ready to go and they might try to source deals in neighborhoods that aren't that great for long-term rental to meet that demand. So you want to see that they are buying in that same neighborhood. But when you buy, you're really stepping in. After there's a tenant, there's already management in place. Your job is to make sure you ask the right questions how are they managing that asset?

Marcus: 23:47

You're going to want to know about their vacancy?

Scott Stanfield: 23:48

Did they? You know what percentage of the scheduled rents are they collecting? And that'll help you identify if they're actually targeting the right neighborhoods. Are they managing at a high level? And if you don't have a good idea of what those numbers should be, interview a lot of people a lot of management companies and you'll start to see their numbers, You'll start to tell the ones that aren't going to be very good from the ones that are going to be very good and then apply that reference to the turnkey providers that you are interviewing and from there you can find one that's legitimate. That's roughly how I do it. There's obviously more criteria. I actually have it set up as a checklist. I have it set up so that all the action items in the checklist are the questions and I actually put what you should be looking for in those checklists.

Dan: 24:39

And I do it because I don't want to forget to ask something.

Scott Stanfield: 24:42

Yeah, do it, because I have family who've asked me how I'm doing this and I can't be there all the time. So here's your checklist. This is exactly how I do it, right. And then, as I learned cause I I've made mistakes, but none of them been catastrophic, I've added them to my checklist Right. So I, as I learn, I adapt. As ARCA changes, I adjust my checklist accordingly.

Marcus: 25:06

Yeah, and I'm glad you brought up those questions, cause we, early on, this might've been like season one of the show we talked about, like what questions you'd ask a property manager or a contractor that you're hiring, even if it's not a rental property, just if it's at your house and you're getting your kitchen remodeled? What questions do you ask? The contractor thing? I just don't want homeowners or new investors to get the cold feet where they're like I don't want to be disrespectful and ask the the weird or tough questions. It's like don't look at it through rose colored glasses. Like ask the questions because they're gonna pop up and you might as well get your money on the line right ask the questions.

Scott Stanfield: 25:48

Ask the questions, um, and if they're offended by it, it's probably because it's somebody you don't want to work with yes, you'll know very quickly if you're going to get along with them or not right and there's other people to work with, so if they can't answer your questions, don't look at it like oh, I didn't establish that relationship not a big deal yeah, go to the next person. Yep, just keep talking to people and you'll find some that will answer your questions and answer them well, that you'll feel comfortable with and you'll begin to build a relationship with it's that simple yeah, and you get to find out what.

Marcus: 26:29

I guess what niche they're into, like, what do they do? Well, because, just like you and I have different investment strategies, neither one is wrong. But, if you try to put a square into a circle, whatever they're saying it just won't work. So you got to find out what shape they are. What right process have they put in place to help them be successful? And they may be successful, but they may not be successful with the way you want to do it right. This is just understanding where they're at, and they need to understand where you are at right and it's also about you, right.

Scott Stanfield: 27:04

You have to look at your goals, your objective, your resources, your risk tolerance, and you need to find something that fits that, or adjust something to fit that, and then go forward.

Marcus: 27:15

Yep, and I'm hoping you put all that stuff in your book, correct?

Scott Stanfield: 27:19

Oh yeah, no, it's all in there. I didn't hold back. I put everything in. Anything I could think of that was relevant in the book All the checklists, everything I do, et cetera. All the fundamentals, all the math. You want to know how to calculate mortgages? All that mortgages, it's all in there. Models you want to see what a financial forecast looks like for 20 years on a property, including expenses? Okay, what about if you include scaling and you use national average? It's all in there. And it's in there for a reason. It's in there to help identify very important pieces that we need to include in our plan. Right, including these checklists, and that's that's the whole purpose of it. But yeah, I put everything in there, all of it. How I screen. I talk about maintaining posture. Right, you're worried about this turnkey provider not selling you the house wrong. They want to sell you a house. Maintain that posture, you'll get better results long-term. It's all in there. It has to be, otherwise I'd be doing a disservice.

Marcus: 28:24

So yep, and it's called Passive Profits. So we will put the link in the show notes for everybody listening so you can obviously buy the book and read more of those questions and get more into the X's and O's of what you're talking about here on the high level on the show. So we'll make sure that we provide that to all the listeners, because there's going to be a bunch of knowledge in there, because there's going to be a bunch of a bunch of knowledge in there, and I feel like the, the investment strategy you have would apply to a lot of these people trying to get in, because they're probably starting a little bit later. They're in their career. They don't have the time to do this full time off the bat.

Scott Stanfield: 29:05

They're going to have to know things, and that's exactly who it's it's, it's geared for, and you know. All you gotta do is look at your, your 401k, and think, yeah, maybe I do want something else for retirement yep and we we just had a show.

Marcus: 29:21

Um, uh, a lady who had moved in from outside of the us came here on a plan. Everything Everything got switched around through COVID. She found her way to real estate and she's kind of in this position where, kind of like you are, you're not buying right now, she's in a holding thing, she's like I don't need to because my income right now fulfills my lifestyle, so I'm happy right now. We'll wait for things to correct, which is, I think, very, very cool. And and more points to you guys where you can do this while you hold the full time job.

Scott Stanfield: 29:54

Yeah, and it really does depend on where your portfolio is at and where you're at. For me, I stopped buying in 22 because we were entering what looked like the hyper supply phase, or at least the last quarter of the expansion phase of the real estate market cycle. And what comes after hyper supply is recession. And even if we don't have a big retracement, there wasn't any need for me to be risk really taking on those risks. You know so instead, what I started doing is focusing on my my debt right. I was looking at loan to debt ratio, that kind of stuff, and how much income I was making which I'm down below 50% debt on my portfolio. I have very cashflow, two-year leases, everything I need to ride through a recession. It doesn't mean that the recession will happen. It's just for my portfolio. That was the best choice for me and also for my risk tolerance. And again, it come down to just where we were at in the market cycle and where I was at, and you know I'm more than happy to just do some of the other stuff I'm doing and then, once we get resolve some of these issues, it could potentially trigger a recession. We get resolve some of these issues, it could potentially trigger a recession. That's when I'll jump back in again.

Marcus: 31:13

Yeah, like I don't have to be aggressive and and that's really my again, my choice yeah, and and as you're speaking on that, I got a thought of um, I forgot the book title e-myth revisited. I believe that was the book. Okay, um, he talks about the, the delineation between working in your business and working on your business. And when you say I'm going to jump back in these inflated prices where I don't know how your numbers are working, but all the money you're making you put into your debt service to pay that down, so your cashflow will increase as you pay that down. I don't have to actually, oh sorry, go ahead. Oh, I was just going to ask are you creating a little nest egg for future purchases, like when prices do drop? Is that like you're okay?

Scott Stanfield: 32:12

now I'm making five percent on that money and then I can use that to either save for what you're talking about, funds to invest later when things make more sense, which I am doing that, as far as paying down the properties go, I don't need to make extra payments. Right, there was a lot of appreciation. That still happened at the end of that hyper supply phase. That's why I stopped buying. You still have a lot of appreciation. Realize, still happened at the end of that hyper supply phase. That's why I stopped buying. You still have a lot of appreciation. Realize that most of that appreciation comes at the end of the expansion phase and that hyper supply phase. So between that and just having really low rates where I'm getting a lot more loan pay down. So that's just. People don't know that's part of the mortgage payment that's paying down your balance and so it's generating principal or equity. Anyways, just those two factors is what's really driven down my loan to debt ratio, or? Yeah. And or loan to value ratio. Sorry, I misspoke. And that's how I'm down, you know, around 50%, a little below that, and so for me that's perfect, and then the rest of the funds are just going into a high yield account. I'm pulling about 5% on that and I'm just letting that build and I'll use that when the market is better. And of course, I am in other stuff. I trade options, I have algorithms that do that, that I write, and so I do other things too. But the point is, as far as real estate goes, that's where I'm at right now, and so I didn't have to actively put more money into my deals to pay down debt. I could just let the market forces do it for me and then simply sit back and enjoy the high interest rates as they were going up. If you, there's a plot in the book that shows this. But if you look at rental rates and you plot that as a function of time and I plotted this, I think I started it from seventies and I did it all the way forward and then I plotted what the interest rates were for a mortgage it's not going to surprise anybody. As mortgage rates goes up, what happens to rental rates? They go up. Why? Because there is now demand for rentals. You don't want to buy in that kind of market. So people move into an area and they go I'm not going to buy a house, I'll rent. That puts demand for rentals and the correlation is very clear, and so it was just a matter of okay. Well, rates are going to go up, no problem. These forces are taking care of you know my loan to value ratio and this is going to take care of profit and that's what's happening now. I'm actually getting a lot of profit pushed in now. There were some unforeseen things where we had a lot of appreciation and the the assessors jumped on that very, very quickly, quicker than. I thought, oh yeah, I knew they would. But I thought well, you know, they say every three years they're going to reassess.

Marcus: 35:18

No, that's what they tell you.

Scott Stanfield: 35:21

It's every year. It's kind of like sharks they smell blood in the water. They're there.

Marcus: 35:26

Yeah, rapidly yeah.

Scott Stanfield: 35:34

You think the municipality is going to lose out on that, that tax money? I don't know. I knew they wouldn't, but I thought they would at least honor their uh, their statement of yeah, we're going to reassess every three years. No, they didn't they, they just ride in there yeah, I uh.

Marcus: 35:46

I just refinanced the house that I'm in. It was. We bought it at an auction and then we built cash and it was just sitting with cash value. And then we're like all right. I think now is the time we like missed our window where we could have got locked into those like on the lower rate. But, yeah, the assessor came out and that was the one thing I didn't.

Scott Stanfield: 36:07

I didn't really want to see him, I was going to, because you're going to appraise that, that's going to get reported, and then they are going to assess you and they're going to go. Yeah, he bought it for cash and this that doesn't matter. Here's the appraised value Time to send him his new property tax bill. You can contest it if you go and find good comps, similar houses that have price points that are a lot lower than yours. You can try to wiggle a little bit lower, but I do that, but it is tough. I bet about 50% on that. You can give it a shot, though. Yeah, all they can say is no. They can just simply say no, and if they do, fine.

Marcus: 36:56

Otherwise, maybe you get lucky and reduce your taxes. Yeah, and I think the only the only hard time to do is the first time, because once you ask the question the first time, the second time isn't as difficult. So much easier because you've already done it, you have experience with it yep, and the same thing with uh inspectors, like the first time you get into. I wouldn't say an disagreement, we'll call it a disagreement with an inspector and you have to push back a little bit I got like the same nerves that would get like as a like my first college start, where you get all nerves and you're shaking. When I had to like push back on an inspector the first time, it was a little eerie like I felt, like I was, like I was talking back to my parents like didn't feel right for me. You're not supposed to do that supposedly. Yeah, you're not supposed to, but it's sometimes it's needful.

Scott Stanfield: 37:40

You have to sometimes look if you don't defend yourself, nobody else will. Yeah, it's that simple, and everybody steps out of line sometimes yeah sometimes you do, you just let them. Hey, you know what about this? You, there's a good way of doing it and you can go that route and see what happens. But yeah, it'll make you nervous yeah, absolutely, absolutely.

Marcus: 38:02

Um. So have you thought of I'm going future now? Sure have you? Have you thought of after, after the correction happens? Are you? Are you geared up to go spread your umbrella a little bit wider, cause I know that you started in Cincinnati, now you're in Tennessee. Have you been researching some markets that may be?

Scott Stanfield: 38:25

possible for you to go into. For full disclosure. I'm actually in seven different States. So at this point, yeah, I'm all over the disclosure. I'm actually in seven different states. So at this point, yeah, I'm all over the place and I want to do that Right. I want to diversify. I want a metropolitan area that has X, Y, Z industries Right, and big employers, and my other one may be the ABC industries Right Something completely different and correlated. I like state capitals because you have government jobs, but I want that diversification. So, yeah, I very much am all over. I'm in Arkansas, which I actually think is going to be a really good state to be in the next expansion phase. I have property in Oklahoma. I've got property in Tennessee, Missouri, Ohio, Georgia, Alabama, you know. So I'm all over. The easy way to really pick, or at least to get a good start, Just go where people want to go, you know. Look at the population growth, Right. So well, first thing I do is I look at metropolitans that have at least a half million people right, your product is housing. You need people. That's step one. Step two look at how many people are moving there. What is their population growth. Compare that to the US average If you find a place where people want to live. Even if you don't do anything else, you'll start looking at deals there and then the financials will quickly tell you if you want to be there or not. You can look at multiple cities like that. Eventually you'll find one like Little Rock, for example, where maybe it has good cashflow and good population growth and you like the industries that are there and you can start buying there, and so that's how I go about doing that. And so, yeah, no, once, once we get through the correction if there is a correction, it may not even be a correction, Right, we may just stay flat and then start to expand. Then, yeah, I'm very much ready to jump in and start expanding my portfolio. I have tons of equity cash thing. The equity will depend on interest rates and whatnot, but I have cash as well where I can jump into the market and start buying again. I'm looking forward to it. I'm really ready for it. I think this next expansion phase is going to be a very unique opportunity. And basically I mean think about the replacement costs for a house. Right, it's really high now after all this inflation. So, even if we do have a retracement in price, where is that going to go. Well, it's going to have to snap back up pretty quick, right? Why? Because replacement costs is so darn high. It's a lot higher than what it used to be, and if you go and you start looking at the number of houses that were built during this last stretch, it got cut off short because of the Fed stumping in. Right, the government intervened. We didn't really have a normal end to the cycle where there's a lot of building, and you might hear me say that and think, well, is he telling me this or is this real? Go, pull the number of permits that builders have to submit when they go to build a new property and look at those. Compare them back to 2005, 2006, and 2007. We're still low. And then look at them from the years after we went through our last crash in 2008. So in 2008, we had a lot of supply but there was no building being done and eventually that supply was absorbed by growth population growth and then no more properties 2011, 12, 13, 14,. I think we may see appreciation rates that are actually higher during the expansion phase from the last cycle and I very much want to benefit from that. Yeah, so that's that's kind of my thought process on it and realize that as the market changes, my narrative changes. Right, I include that and I'll continue to collect data. And just what is the economy really? saying try to ignore all the noise and then structure my plan accordingly and try to figure out how to best position to take advantage of it. Yeah that's currently my plan right now, and so obviously, if I'm thinking there's appreciation, what do I want to do? I want to get my asset number up right. I want as much value as I can get there 3 million, 5 million because if it's a 4% appreciation rate and I have 5 million bucks, you have property value, that's, that's $40,000 of appreciation per million. That's a big deal. That's $200,000 in one year. That's really the game is just figuring out what you think is going to happen and try to position yourself to take advantage of it. Yeah.

Marcus: 43:18

And you'd mentioned a lot about trends and you've mentioned a few times through the show. I actually was at a meeting with my broker yesterday because of the whole change with the NRA in the buyer's agency agreement and all that stuff. But through the slides they had one where it it showed the trends from 1990 to today and the average home price in 1990. Do you have a guess of what it was?

Scott Stanfield: 43:42

uh, I'm gonna go with about be here. Let's go with 70 000, okay 1990, that's a guess.

Marcus: 43:52

85 remember I was 11 in 1990 I was just born so I have no idea what's going on. I was shocked it was 190. I am shocked because I think the last one I read and this is from Wisconsin, so it's not comparing apples to apples, but I think Wisconsin was like 360 as an average home sale, I believe that yeah, from 1990 to now vastly different numbers, um, but it's always, it's always cyclical, in like through the trends you see some up years and some down years.

Scott Stanfield: 44:29

You see bigger and smaller up and downs, but it's always cyclical, It'll always go back back to the 1800s with housing in the US and from peak to peak, on average is 18.6 years and the variance is actually pretty tight. The shortest it's ever been is about 15 years. I think the longest is like 21 years, can you?

Marcus: 45:01

repeat that again, Because those are some good. Yeah, it's actually. It's in the book too, actually.

Scott Stanfield: 45:06

But yeah, so the real estate market cycle. They've been recording it since the early 1800s for the us housing market, and the average length from peak to peak so this is when the market peaks, when the net market peaks again is 18.6 years. And that would also work for trough to trough right, recession to recession, and then the variance is actually very tight. Uh, it's. I think the shortest it's been is 15 years and the longest is 21. So let's think about today. When was our last recession? 2008? So let's let's do a little bit of arithmetic and add some numbers there. And when do we think that next one's coming? Anytime? yeah it actually fits with the historical data. Now, what I find fascinating is the cause of every recession is always different, Yet the average is so tight. Right, it's a very small variance. So all these different reasons why you go through a recession whether it was land speculation in the 1800s or what have you and yet it's still right around that 18.6 years, yeah I find it fascinating. I do study that and I actually do incorporate that with which I mentioned earlier, because the hyper supply phase part of it, but I do incorporate that with how I build or buy houses. I do watch that carefully.

Marcus: 46:29

Yeah, and that is tough because, like with real estate I've always mentioned, like it is a numbers game, but you're dealing with people, especially in the rental space. You're dealing with people but you have to delineate what you're looking at. And when you look at a property, the most I don't want to say the most beneficial, a beneficial thing to do is take your emotions out and look at the numbers. You have to. If you can boil down to these 18.6 years in your variance, like if you can know the numbers and what things are going to trend, you may not know why or what the cause is, but the numbers aren't going to lie to you. That is what has historically been happening.

Scott Stanfield: 47:10

Exactly. And the thing is, even if you do buy at the wrong time, housing has always gone up over a long enough period, so maybe you got in at a basis that wasn't good. If you're cash flowing, just hold tight. Let the market slowly work through the years and eventually you'll look one day and it'll be 20, 30,000 more than you paid for in value, and you know the market will bail you out eventually. So long as you have the reserves to ride through a rough patch, and that's, I think, also something important. So you know, that's why some people say, well, don't try to time and just get busy and get working on it.

Marcus: 47:52

The Warren Buffett philosophy.

Scott Stanfield: 47:53

Yeah, yeah, and that's not a bad philosophy. And you realize, nobody can truly time it Right.

Marcus: 47:59

I can't tell you crash is coming.

Scott Stanfield: 48:00

I don't know if there is a crash coming. I do think that there should be something coming coming. You can't take a hammer to the economy and expect it to not. Uh, respond in kind yes happened recently, in the last few years, and uh so I do think something is coming I don't know I don't know when but it does fit with the historical narrative yeah, on timing and, and so I just choose to honor that and and I include that and you know you'll you can tell right, go try to, like you were saying earlier when you were looking for your deals. It's harder to find deals that way across the board. Yeah, I go to look at a turnkey. They don't produce the money they did five years ago. You know the total returns are down around 20%, not the 30% that I used to see. It'll come back around, but you know you can use that as your bellwether indicator, right? Okay, well, I am going to buy today, but I know that I'm only going to buy if I have the 20% total return. Oh, I can't find. That Probably means the market isn't giving it to you and you should wait. It's really that simple.

Marcus: 49:08

Yeah, and we're not alone in that thought. Where there's a, it's slow. It's because you talk to.

Scott Stanfield: 49:15

You talk to brokers like real estate brokers their agents are are slower.

Marcus: 49:19

The brokerage houses as a whole is down in volume. You look at lenders they're down in volume.

Scott Stanfield: 49:27

Everybody is down. Everybody is down and and it you know for people think well, yeah, the interest rates right. It's not just because of the interest rates, right, that's, that's part of it, but that's not all of it. There are other other fears there. There's a lot going on in this market. Yeah, what's going to be also?

Marcus: 49:45

yeah, yeah, and add to this on an election year, so while this is all crazy adding an election year. In another slide that they showed last night was the correlation between each election cycle interest rates go down, but house prices go up.

Scott Stanfield: 50:02

Yep, and it's like every single year that is, oh, it's correlated you can see it, there are are very real trends that follow presidents in their first, second, third and then fourth year of office. Right when you get into those election years, things change, Yep, and if you go and you look at historical data on it, it's actually correlated and you can see it in there and it's. It is interesting and yeah. So I am watching the election too and I don't plan to do anything until after results yeah or in yeah, we'll see what happens. Because that got brought up because the feds were talking about another rate drop in september september yeah, september yep that is literally what the numbers were showing, that usually around yeah, yeah, so wall street pretty much factored in um an interest rate drop in september, and I I think it'll happen, but I'm not sure it's happening for the right reasons. Uh, and I, I do find it funny that everybody wants to blame powell for all these problems and they want to ignore the fact that the problem started before he raised rates. Right, he raised rates to combat inflation. The inflation happened because of a lot of just poor decisions, uh well, by by your politicians. They're not, you know, and I I guess I'm not going to step too deep into that, but that is an opinion we can make this a political show.

Marcus: 51:24

Huh, we'll change the title. What's that I said? We'll change the title. What's that I said? We'll change the title. We'll make this a political show. Oh, there you go. No, but you can't deny the fact that a lot of these things come from the politicians and the lawmakers. They do Not to blame them? Yeah, you can't blame them as people. I'm not attacking as a person. You're in a position, making decisions.

Scott Stanfield: 51:48

Right, you've got to see that your decision's affecting what's going on right, you know, and to be fair, I don't get to see everything they see. Right, they get to look at a lot of different factors and they're getting advice from a lot of different experts on the economy and different things like that, and so, you know, they're making a choice based on that information and I don't have that, so for me to judge them without knowing everything it isn't really fair Although I still do, but you get your opinions, opinion to myself you get, you get your own opinion. You do right, you do, you can't help it and you know and I look at some of the choices have have been made. Where we're at wasn't a surprise. That's why I stopped buying in 22. January of 22 was my last purchase too. They were new builds, they were in Alabama, and I stopped for a reason and that's because, I could see what was coming. And with COVID you basically raise spending to wartime levels. When you dump money into the market like that, even though everybody's like, oh, but the market went down Only temporarily when you dump that kind of money and there's such a stimulus, that the economy just exploded and they had all these low rates and stuff, and that's really what drove inflation. Yeah. Of course Fed has to combat that and try to bring inflation back down. Unless people like the fact that things go up 12, 15 percent per year, I don't no, no, there was.

Marcus: 53:17

There was just a video yesterday. This guy was. He bought his groceries online and he went back into the app like three or four years later and he hit high again and first time he bought it, 140. Now he said, reordered it was like 415 or something like that.

Dan: 53:36

Yeah, just like a giant spread, huge increase yep and less quantity of food because the sizes are smaller, but the prices went up, yep.

Scott Stanfield: 53:48

Yep A gallon is no longer a gallon. It says gallon, but it's not a gallon Right Rice cream, for example? Yep, yeah.

Marcus: 53:58

That's amazing and I'm like you said. I don't know if a crash is coming, I don't know if a correction is coming. The facts are telling me that it's around the corner. Yep, we're on this election year, so everything's kind of pointing that way. I'm always curious what dominoes are going to fall and what happens, because you can plan for something and we're like all right, this is how we want it to work. But humans are humans and things will happen, so you never know exactly how everything's they're going to fall, and that's always my curiosity. So for you to take a pause and say, like I'm going to wait for the dust to settle here, very smart, responsible, move on that one yeah, I'm really evaluating risk right.

Scott Stanfield: 54:36

Right, it's finally increased to where I was ready to to back, take a step back and that that's really it. And yeah, it did not come true right, or it could be everybody's worst nightmare.

Marcus: 54:48

Yes, yep, do you? Would you give any advice to somebody, let's say, cause you've got years under your belt with investing? Yeah, what would you give that new investor that? All right, I'm working my W-2, but I'm putting my foot down. I read, I read your right, I'm working my W-2, but I'm putting my foot down. I read your book. I'm in. How do I start in today's market?

Scott Stanfield: 55:10

I think, actually pretty simple. Just look at the market and take what it's given you. If you're working and you have money coming in, save it. Put it in a high yield account. Wait until your criteria are actually met. So in the book my book I actually have my criteria there. It's a starting point for you. Adjust that to fit your needs. But once you have your criteria in place, stick to them. Put your money in a high yield account, wait for the right opportunity and when that opportunity presents itself and it will take action and jump on it. And it's really that that's how you got to go about it yeah and I love that because you, I like that.

Marcus: 55:51

It's not like a yeah, jump in, force your hand and make a deal work yeah, don't listen to some of these gurus yes, and, like I know, when I got into I as an agent, I didn't buy my first rental. I actually went on a showing with the broker. He showed me this duplex. I wanted to buy a duplex. Like really, really bad, it must've been in 2014 when I was looking for that. After the fact, I went and sat and had coffee with them and he's like, hey, what's your long-term plan? I was like I just want to be full-time in real estate. I don't know where I'm going to start yet, but that's where I want to go. So I ended up becoming an agent and the amount of learning that happened while I was not working. Like I'm saying in the business, I'm not buying properties, I'm not going to auctions, I'm analyzing properties. I'm creating a nest egg for that opportunity. Cause what happened is you have some closings, you save all that money. Now you've got your nest egg of. For me it was living expenses, like can I go six months without getting a paycheck? And that was my big thing. So I'm creating that nest egg and then all of the property that, all the properties that've analyzed, all the closings that I've had, all the agents I've talked to, all the title companies I've talked to. That's all just creating this network in this life work. It's like my practice before or my spring training before the season starts, and then when you get that deal, like you're saying, when that deal crosses your table, then take action, then it's game time. But wait for game time and do your practice work, save your money, analyze your properties all that stuff is free yeah, I know that is, and that's really key preserve your capital yeah, I believe that's, uh, charlie munger that talks about it, and also Warren Buffett, but essentially protect your capital at all costs, because it's hard to to recoup a loss, yeah, yeah. So as long as you don't start off on the wrong foot, you're right. Make sure that first one's at least. I wouldn't say a home run, but make sure your first one is solid, because that is. It needs to be solid, yes, and you're going to learn a lot from it and you're going to do a lot better as you go forward after it, yeah, and I would say you're going to mess up on the first one, so make sure you got a solid deal to mess up on the only thing exactly the only people that don't mess up are the people not doing anything right, which is a mistake on its own.

Scott Stanfield: 58:22

So there you go, right.

Marcus: 58:25

So very cool. We're up on our hour. I don't want to keep you any longer. Was there anything that we didn't touch on that you want to get out to the audience? I know we're going to put your book in there. We're going to put a link to your website so people can contact you. I would highly recommend contacting you for these new investors that, like that, we're in your shoes, have a full-time job, maybe have a family. Don't have that all the time to do the, the hands-on investing like very, very good avenue, a very smart avenue to to invest in yeah, no, I.

Scott Stanfield: 58:59

I guess I'll just kind of reinforce that. Go to my website website. You can reach me there. There's a lot of resources there and tools. They are free. It doesn't cost you anything to send me an email and ask questions and I will respond. If you're serious about doing this and you send me an email, I will respond and I hope it helps, and that is the only reason why I do this is to try to help other people. So, take advantage of that, and that's really it. That's, I think, what I'll leave it at.

Marcus: 59:29

Yeah.

Scott Stanfield: 59:30

And I'm gonna put my two cents in.

Marcus: 59:32

It's awesome that it's not a training course that people have to buy $1,000 training course thing. Those are the people that I like referring because those are the people that genuinely want to help you succeed?

Scott Stanfield: 59:44

Yeah, and you shouldn't be spending your money on that. It's okay to buy, like you know, your internet service so you can do research and learn. You need your money to invest not pay somebody else for something you could find easily on your own. Yeah.

Marcus: 59:59

And I'm not discounting the people that you pay for courses, Cause I think there are some stages that you do need to help. If you can't get there when you start your career like there's so many free resources I know from living it there are a lot of free resources you can get through to get your thing started and then, as your thing starts picking up speed and you have some capital to expand, you can pay for some knowledge that you get and some courses and all that you can fill those gaps.

Scott Stanfield: 1:00:27

That way, when you know, what the gaps actually are. But just giving somebody twenty thousand dollars to go to his courses blindly, I mean that's risky yeah, and if you think I'm making up that number, I'm not.

Marcus: 1:00:43

Oh, I've seen some courses around that price. They're high.

Scott Stanfield: 1:00:48

And you know the information might be very good, but I don't know if it's $20,000 good or whatever. The number is. Not when you can find it for free. And it's actually good for you to struggle a little bit. Looking at it. You'll remember the answers better that way. It's actually good for you to struggle a little bit looking at it.

Marcus: 1:01:04

You'll remember the answers better that way, yeah, and you do build some discipline, because at the end of the day, when that course is done, you're back on your own two feet. Exactly, they'll teach you the X's and O's, but they won't teach you the process, the process of the tenacity, the dedication you need to keep going with it, and I think that needs to be developed. That can't be given.

Scott Stanfield: 1:01:24

Yeah, no, you have to develop that. It's a skill and it takes time.

Marcus: 1:01:28

Yeah.

Scott Stanfield: 1:01:29

But everybody can do it. Everybody can if you want to right. It's all about what you want to do.

Marcus: 1:01:34

Right, and if you're listening to the show, you want to get into real estate. You're going to want to call Scott. So, all right, we are going to wrap it up. I'm not going to keep you past the hour. Um, we will make sure to put that in your book, in the website and show notes for everybody to take a look at. Um, otherwise I'm gonna let you get to your weekend.

Scott Stanfield: 1:01:53

Hopefully you're not in the office all day oh, I well, yeah, I mean I like said I trade options, so I have algorithms that are running and I don't do anything, but I do watch them and I like to keep track of what's going on there, and then I'm trying to put together a bunch of just videos that teach the entire book and put it on YouTube all the way down to like the checklist and everything. So I've been working on that and while I'm watching the market and it's you, it's like I said, it's a good life, I can't complain, but that's what I'll be doing today. So but I won't sit here the whole time, you know.

Marcus: 1:02:33

Yeah, you got to. The YouTube thing is that's an expansion off your book, so you're getting, you're drilling into the book, making it more of a video.

Scott Stanfield: 1:02:41

Right, because not nobody learns from reading. Some people need to hear it. Uh, and not gonna hold back everything in the book, I'm just putting in a video and I'm actually I use chat gpt to create the images so that it's not a bunch of words, right, so I can actually create any image that I want, which is a unique experience before you know, when you're putting in all these talks, it's hard to really have the right image to make things flow properly, but now I can do it easily, so it's great and so, yeah, I'm going to put all of it in. I got a long way to go before that's finished. I got about 80 slides done so far, but I will complete that and then record it and then make that available to people and I think that'll help a lot. I think it's different when you hear somebody explain it to you and use analogies and stuff. Uh gives you even if, even if you understood when you read it, just having that second touch from a different angle can help reinforce some of the ideas. So yeah that's the goal, so that's my big project right now that's cool.

Marcus: 1:03:49

We'll keep an eye out for that, for sure. All right, I love youtube university, talking about free resources.

Scott Stanfield: 1:03:55

Youtube university for everybody and I benefit from it too. So you know, I I feel like I should be contributing. I go there I watch all kinds of stuff and then I have to, you know, fact check to make sure it's legitimate. But you know you can find some guys that are just fantastic that are oh yeah, bring their information.

Marcus: 1:04:14

So yep, I I would be lying if I said I never used youtube. Like the amount of things I've learned. I didn't come from a, a contractor, my dad was not a general contractor, or in real estate, the, and I I built my house. I used youtube all of the time, like what's the proper way to put on a gutter, like something simple that you, like, that person knows. Nope, youtube university knows, though, and they'll give 10 different versions of how to do it from it's crazy like from coast to coast there's differences in materials, and yeah, it's it's super cool yeah, and then like it's pretty quick when you start watching these videos like, okay, yeah, this guy just wants to make a video.

Scott Stanfield: 1:05:01

Ah, here's this guy knows what he's doing you can sell and it's you. You find those nuggets. It's. It's pretty interesting. You can really learn a lot and, yeah, I love it so and like channels.

Marcus: 1:05:14

There was one guy that that every stage and I would be curious to see how long it took him to do this. He built the house from scratch from a plot of land, excavating foundation all the way up. Every segment was a different video with time stamps, like if you want to know how to tuck point, go to minute one, one minute 25 seconds. It's so detailed. How to do stair stringers, like a whole segment is fascinating. So like I like that that channel, I can go to any resource on there. It's amazing what you can find.

Scott Stanfield: 1:05:48

Yeah, that that's right up my alleyway. So I in college, I in summer, I actually worked digging basements, so we did foundations and how fun was that? Yeah, it was great. Yeah, I was busy. I, yeah, I money and we were working. This was in the late 90s, right, so we works. The economy was really expanding. We were building houses like crazy. So I was getting 60 70 hour weeks perfect, I needed money and I was. I had a chance to do that and you know I was busy. It was a new, new job every day day, right, so it was it was nice you know. So we'd get there in the morning you'd lay out where the house was going to be, kind of set the elevation, after you found the Y pole that comes up off of the it's. Basically you got a main line and then there's a riser and then they'll put a wood shank that comes up, called a Y pole, so that you can find it later after they've buried the main line. So this is when they're doing development, and so we would go in there and of course the surveyors had already been there and put stakes. You know where the house was going to sit, and then in the morning we'd find that Y-pole and we would run the sewer into the house. So this is just, you know, dry sewer line that's going into the house and then bury it, and then once we knew where that was, you know that establishes the fall, for you know three things you need to know, as a plumber, right water flows downhill. Yes, and that's an important thing to know as a plumber yeah, you know paydays on friday and don't shoot your fingernails, the other two but, uh, but anyways. So you have this riser that comes up, that establishes how deep you can put the house right, the grade of where the house is going to sit. And so then, once you have that established and you've got it laid out, then that was when we would stop for lunch, and then in the afternoon you go back in, you begin digging, and so you've got an operator. And then what I did I was on the ground, so I was, you know, I had a shot pole where I could tell them deeper here, less there, push the crumbs out of the way. I would leave it for the footer crew because they needed to backfill all their forms. And then sometimes I'd go out on with the footers and do that too, and but it was good. And then we did perimeter stone, right. So that's, after you've got the foundation, you lay stone and you build, you dig a sump that sort. Yeah. Yeah, and so I, I did that, and, but so I'm trying to think about this guy doing it from scratch, like that's tough. It was so long and folding grade it is not easy. Yeah. When you're digging, yeah, foundation, then you're trying to form all the footers and you know, and that's not horribly hard, but getting that laid out and accurate it's technical, it's technical and you can't go wrong. Yeah, you don't want your. Your wall can't not sit on the footer, right, right, it's yeah, and I'm just thinking about all those different jobs and to have somebody step in and do that. That's challenging. And, um, so the house in georgia that I was a former personal residence, I did that full renovation, completely, got it, did the whole thing by myself, wiring, uh, rewired, you know all of it, and it took me two years, yep and uh, I'm just thinking about and that that wasn't even like building it. You know, I did frame the basement, I had to rip out the basement and refinish it, but just trying to think about somebody doing that and then like roofing and all of it. I've done a little bit of all this, but to do the whole process, you know, eventually you want to live in it. I don done a little bit of all this, but to do the whole process, you know, eventually you want to live in it. I don't know if I got a decade to actually dedicate to something like that I mean, I would love to do it just because I enjoy working like that, but it's uh that's tough yeah

Marcus: 1:09:38

and as I'm it's funny, you said, because as I'm watching this video, I was like man, I can't wait to be in your shoes. His construction company is like running on autopilot. He's got properties. He's literally doing this as a. I know how to do this. I want to build my own, my own, like forever home, and I'm also going to put out content because I I can and it's helpful yeah selling it as a package. He's not like buy my blueprints. He's just like hey, here's this and this is how you do it. I've been a contractor for 40 years.

Scott Stanfield: 1:10:10

Here's what I've learned send me, send me the link, if you don't mind, because that's the kind of stuff I like watching and you know I learn a lot from it and then I also learn on. I don't know if you've seen some of the ones where they're showing where inspectors go in and inspect stuff and they're showing like some of the crazy oh, I love them we've tried getting them on the show yeah, I've reached out to several several of those inspectors yeah yeah, oh, some of the stuff that the people like contractors do and leave is just like, oh, my goodness, I, I do want to know how to do this. I know I actually would like to do the work myself when I see some of that, you know, especially on the new builds it's mostly the new builds and you're like the guy. The one guy says that ain't right.

Marcus: 1:10:51

Like he puts that out there just like if you're listening to the show. If he can come on that'd be great. No, his, his, uh, his instagram or social media things are so there. He makes it entertaining because you don't see many inspectors with the personality Some do. I'm not saying all yeah, they're usually like XO they come in, what's wrong with it? And then they get out. Yes, he has such a cool way to spin Like it's wrong. We're going to get it corrected. Like I don't hate you. This is a funny joke. But like it's not a joke, we've got to fix it.

Scott Stanfield: 1:11:29

Yeah, the people that live here.

Marcus: 1:11:30

Yeah, the way he portrays it very, very funny and it's knowledgeable. Like I watched an inspector yesterday. He pointed out someone tried painting vinyl siding and have he pointed out um someone tried painting vinyl siding, and have you ever seen?

Scott Stanfield: 1:11:50

painted vinyl siding a year or two. Yeah it, it it bacons like it's terrible so it actually does it here. And then the different uh thermal expansion coefficients is what's causing it to buckle then?

Marcus: 1:11:58

yep, and you know, vinyl is always expanding the track, so like where they painted now you've got a big old seam color there and all the panels are warped because of the sun hitting it. But then you go to the other side, where it's shaded, it expands but it doesn't bake in. So I was like, oh, that's super cool. I've never painted vinyl, but now I know I can't do that.

Scott Stanfield: 1:12:21

I won't paint vinyl.

Marcus: 1:12:25

So it's things like that where I'm like oh, that's interesting, or it it poses a question of like oh, all right, he's inspecting a home in georgia. Is that the same code as wisconsin? Because state by state codes are different, so when you go, into your code book for your state and you read um just live in that world and just take in more on it in georgia in the 70s did not have a building code.

Scott Stanfield: 1:12:46

There's no way, after working on that, that house there's. There's absolutely no way it had a building I love seeing those houses. It was interesting. So the basement, they put a wet bar in and this was the builder that did this, and so this was 1978, so this envision of atlanta falcon red carpet. So that was oh nice, yeah, I had to get that out of there. They put this wet bar in and I'm walking with the inspector and we're looking at where the, the stack pipe's going out to the uh, the septic tank, and it's above the, the wet bar. I'm thinking, huh, where do you think the water for that that sink goes? He looks, he goes. Oh, you need to get a plumber in here, like. I know what they did it's going out the wall there. And, sure enough, once I ripped out everything and they literally put a penetration out the wall, the basement, the grade went like this, and so then the pipe was just right above gray and they're just dumping it into the backyard. Really, this hole, that was like five inch hole with a three inch pipe, went out and they never sealed it up and so it's right at grade and so every time it rains, that water comes down and it was washed into the basement. Yeah, I bought a real, real fixer upper. It's really nice though. It was 4 000 square feet finished and, once I finished with it, fantastic, nice, clean house. But uh, yeah, the whole basement was rotted out and had a bunch of mold and all that good stuff. So yeah, which I think you're in atlanta, falcon carpet anyways, right yeah, it like stuff like that.

Marcus: 1:14:23

You can equate time. But we just looked at a house um three or four months ago. Somebody put the diy shower in their basement but they digging up concrete's difficult, so to dig out my drain and actually connect it underneath the floor into your lateral yeah very, very hard. So what they did is they put um concrete blocks and then set their shower pan on that. Well, we got full now, yeah. And then from the drain is a pvc pipe onto a gutter right by their uh floor drain, so it just goes out the shower into the floor drain and out. Nice, I was like that's creative, but like i't, I don't think that that'll pass.

Scott Stanfield: 1:15:05

No, that's definitely not the code.

Marcus: 1:15:07

No, so I had to take pictures of that one Cause, like you see, just some crazy wild stuff.

Scott Stanfield: 1:15:12

That's special.

Marcus: 1:15:12

You need pictures of that, oh yeah, we keep that one We've got. Um, somebody didn't want to enclose their, their main. That comes down from the I think it was a two-story so their stack that comes down goes into the bathroom on the basement level yeah so they did some like paper mache thing to make it look like a tree. So you just got like this paper mache tree covering your your plumbing stack.

Scott Stanfield: 1:15:37

I got a picture of that one too well, you know I do like trees, but I kind of prefer them outside, outside the real deal, not right.

Marcus: 1:15:45

Right, I mean it was cool. It's like a cool arts and craft project. Yeah, why?

Scott Stanfield: 1:15:51

it's not something I'd have ever thought about no or wanted to do yeah I'll get you.

Marcus: 1:15:59

I'll get you the reference to the.

Scott Stanfield: 1:16:01

Uh, yeah, I want to see that, like I said, that's exactly the stuff I like, because I, just for me, I want to learn about that stuff. I'm not the best. I've done a lot but not enough, and I'm always watching and learning. And then I do want to build a house at some point.

Marcus: 1:16:17

Yeah.

Scott Stanfield: 1:16:18

My final home, if you will. And I've got crazy ideas on what I want done there, but I'll spare you that.

Marcus: 1:16:25

That would be for next show. Next show, yeah, you're going to be back in the buying pool. You're going to be back purchasing stuff and you'll be able to think of and start creating that blueprint for your next home.

Scott Stanfield: 1:16:37

Yeah well, I've got a pretty good idea of what I want, but I'm patient. I'll wait until it's the right time for it. Um you mentioned the next show. If there is interest and people come back with a lot of questions, I'm more than willing and would love to come back and do another one. Yeah, just keep that mind.

Marcus: 1:16:55

I don't know if that's something you do or not, but yeah, I like doing it because I feel like the audience they need to be able to see more and more people keep with it and see success, even if you're in a pause. Right now we've interviewed I think five or six people. Two of them have literally hit their limit. I bought all I want to buy. I'm not buying anymore, I'm happy with it. Somewhere in your state we're like we're holding and we're just going to see what happens. Just going to see what happens. And I think those people, um, with all the instagram and the influencers of like more, more, more. Yeah, sometimes more isn't better. You got to get to where your, your spot is and I think that's less intimidating for people to get in, thinking like, oh, I don't need to make three billion dollars and I just need to create. Even if it takes half of my salary, that makes me happy.

Scott Stanfield: 1:17:46

It's a big pet peeve of mine when I see these gurus. Look at my mansion and my $200,000 car and my bucket of money. You could do this too. You just got to buy. Don't question it, just buy. Give me $20,000 to teach you how. Come on man, that's not real. You got a net worth of two billion dollars and most of it came because you charge people 20 grand for these courses that you then put to work in the market.

Marcus: 1:18:13

Let's yeah, I think curious to see how many properties come out of those membership things, because that's a down payment for a house right there it is a hundred people to sign up for the class you. You just got 100 new doors.

Scott Stanfield: 1:18:27

Yeah, you just negotiated your way out of a house. You gave away your first investment property.

Marcus: 1:18:33

Yeah, I never thought about it that way. Yeah, and that's why I was scared.

Scott Stanfield: 1:18:38

I was like don't give them that money. You need it to buy your first investment and in the beginning the only money you have coming in is going to be from your job and you know it takes a long time to save money yeah, yeah, you know, give that away, especially now you can't give that away so, yeah, yeah, well, we will do a second show.

Marcus: 1:19:03

Uh, I think we'll touch base. Make sure you're back on the buying side. So, because I want to see, I want to see Scott's mental preparation on the buy side of things it's very systematic.

Scott Stanfield: 1:19:16

I mean, I, I have criteria and I literally I just stick to those. And then I also look at my portfolio and I actually choose to optimize mine based on taxes. And so if I refinance, I'm very much looking at how I can keep my tax rate essentially zero in my portfolio. And then, of course, my purchases. I do the same thing. Do I need a higher price point property that fits my metrics to a know a little more? You know, depreciation, etc. But it's really those pieces and dials that I I twist to try to, you know, and that's how I do it I don't like sam collecting money from me. So that's that's how I choose to optimize as I, as I, build a portfolio, and it's interesting because the way the portfolio evolves over time, you know you start off, you get these properties that I call cash flow houses, and you know they do well, and then, of course, in normal conditions, your profit outgrows your expenses and so then you start to have to pay more and more in taxes and at that point you can basically reduce your whole, entire portfolio into just four numbers, right, it's revenue, expenses, asset value and debt, and then from there you can look at what your tax liability is. And then, of course, you're going to buy another house Okay, well, that would adjust that financial state, find houses or different loan products to adjust that value, so that my end result- on taxes is as close to zero as I can get it, and that's how I actually evolved my portfolio. And then, as I said, you would start with these cashflow properties maybe they're three, four, two bedrooms that are 150 to 250K. You start dipping into the 300, 320k to still accomplish those goals. But what you're now doing is you're hitting houses that are going to have a little bit higher appreciation rate, something above the national average. You're actually starting to shift more from cash flow to appreciation and it kind of happens naturally. That's just what the portfolio needs to stay optimal for taxes, uh, and then the income is there, and, and so then you start to actually diversify that way and it kind of just comes about naturally with with the plan, and so that's what it looks like when I do it, and when I am doing it I will yeah, and that's the level two to the, to the investing it really is.

Marcus: 1:21:44

So I, I'm curious and we don't have to put this part in the show, but I wonder if, like the second time through, we can go through and like analyze, like the house that you're looking at or that you just bought, or something like that, and you can go through your one, two, three. I went through this process, I looked at these key metrics and this is why I chose this property and this is what it's going to do for me.

Scott Stanfield: 1:22:05

No, I think there's a lot of value to having case studies like that and I think people need to see that so that they it gives them confidence. They think, well, maybe I'm doing this right, I'm sure I am, maybe I'm not Right. But if they see somebody else who's doing it, it's like, oh yeah, he's doing what I'm doing. He's not doing anything magical, it's the same. And I think that provides a lot of value to people.

Marcus: 1:22:31

So yeah, definitely would love to do that. That would be fun. I like that one. So, yeah, we'll keep in touch, for sure, and we'll set up that next show because I think that would be a fun one.

Scott Stanfield: 1:22:50

That would be our first official case study on the show. There's a lot of value in case studies, so book has a bunch of them in there all the numbers in that book my book are the actual numbers of one of my portfolios and that's yeah. So the numbers in there, those are legitimately the numbers, uh, and I actually share it that way because then you know it's easy to keep it legitimate right and so that's yeah, but yeah, so I'm definitely more willing to do case studies tonight like. So I think there's a lot of value to that all right.

Marcus: 1:23:16

Yeah, well, we will uh tag that one for the next show.

Scott Stanfield: 1:23:18

That'll be fun no, that'd be great so awesome, all right, well, have a good rest of your friday, you too, you too. And again, thank you, thank you very much for having me on, thank you that was good.

Marcus: 1:23:31

It was good knowledge for the audience and I I learned something that this cycle thing I didn't have those numbers. That was super cool. So I selfishly was like, can you repeat that so I can write this down?

Scott Stanfield: 1:23:41

I saw you writing, I was like, oh good, because I it's great to see somebody learn something. Everybody learns something. So oh yeah, but yeah, one of these shows.

Marcus: 1:23:50

I love talking to people and learning what they do, because I I will be the first one to say my investment strategy is not the right one. It's just the one we do.

Scott Stanfield: 1:23:56

It's everybody's got something to bring.

Marcus: 1:23:57

Yeah, but it works for you and nobody can do it perfectly?

Scott Stanfield: 1:23:59

Yeah, but it works for you and nobody can do it perfectly. I'm not doing it perfectly, nobody can you just do the best you can On the real estate market cycle. There is a blog on my website that goes into a bunch of it, if you're curious, so let me see. Yep. Yeah, and then the indicators and their impact on real estate valuation it might get a little dry, but it it stays to the, to the meat. So this is my.

Marcus: 1:24:31

So when people turn on the tv to watch, um, I don't know, whatever they watch at night I'm usually like reading these type of things, these dry, boring content.

Scott Stanfield: 1:24:41

That's what I'm reading oh, I do the same. What you can tell, I do the same. I mean, I'm, I'm a sponge for and I and I like learning. And of course, it gets harder and harder because you're like, oh, I've already learned that, I've already learned that. But then you run into something like, oh, I have no idea what this is. This is perfect. Yeah, absorb it. And I, you know, I look for that. Yeah, no, that's cool for a good evening, yeah. I will be checking out these blogs for sure yeah, yeah, check them out and, um, you know, if you have questions, ask. I was serious when I told people to contact me.

Marcus: 1:25:16

I, I legitimately want to help, so awesome yeah, we'll promote you as much as we can. We'll get get you this file as well, so you can use this show for some of your marketing as well. But yeah, I will push people your way if they need some help with the turnkey stuff, because that's one where I don't think we bought a turnkey rental need to yeah systems in place to just go the more traditional route source your own deals and do the renovations.

Scott Stanfield: 1:25:49

But there are others, you know, that are working full-time and have extra money where they you know turnkey would be a benefit for them yeah, for you it just unless you're like, oh man, I got all this extra money sitting here, I just can't find anything else to flip, then maybe. But really you're better off just letting that money sit there for a good opportunity yeah, yeah and then you know you will find deals yes you're marketing in place and it's working and you know you've already scaled up your marketing because you have money coming in. You're going to keep finding deals, so you'll always have a use for your capital. Yeah.

Marcus: 1:26:27

And that's kind of what we're doing with where we're at, because we've got the construction side and then me and Dan kind of focus more on the buy and hold investment side. The construction crew and the foreman like they've got their stuff. I talk to them every couple of times a day maybe, but I'm in the office, I'm with Dan, so we're building our marketing strategy. Dan has been like the keystone to any analytics of properties and marketing pieces that we have. Um, and we're trying to build that out and get, because our marketing for the past like five years a couple hundred bucks, maybe everything was word of mouth. You'd find a deal here, find a deal there, like as we're wrapping one up, someone's out there, but we've never been offense and that's what we're building. So I'm in like this wild west of like me and other owner are putting our heads together, like where do we want to focus on? What type of property? All those key indicators you were talking about, like where are are people moving to? You're exactly where you want to be at, though.

Scott Stanfield: 1:27:26

This is like, if you really want to make money in real estate, this is where to do it.

Marcus: 1:27:31

Yeah, so I will. I will be asking my questions to you. I'll say I'm asking for a friend, but that's fine, it's me. I'll answer your friend too fine, it's me, I'll answer your friend too, so awesome well, we will talk real soon.

Scott Stanfield: 1:27:50

Um. Thank you so much for the time. I appreciate it again. Like I said, I'm happy to be on and would love to do it again, so it will happen, definitely yes all righty. Thank you very much, thank you, thank you. Have a good day you too.