In this episode of The Same Day Podcast, Mat Zalk hosts Michael Drew, CEO and CMO of Real Estate Done 4 U, to discuss the benefits and challenges of turnkey real estate investing. Michael shares his journey from stock trading to real estate, how technology has improved property management, and strategies for tax-efficient investing. He emphasizes the mindset shift needed for success and reinforces his philosophy: Don’t wait to buy real estate; buy real estate and wait.
Building Wealth Through Real Estate: Michael Drew’s Guide to Passive Income
Michael Drew is the CEO and CMO of Real Estate Done 4 U, a company dedicated to helping investors achieve their retirement goals through rental real estate investments. With over 20 years of entrepreneurial experience, Michael has been involved in more than 1,000 real estate transactions and has extensive knowledge in stock market investing and developing multiple streams of passive income. He has coached and mentored clients worldwide, guiding them in investing with cash, IRAs, mortgages, and 1031 exchanges.
Here’s a glimpse of what you’ll learn:
- [2:12] Michael Drew shares how he transitioned from stock market investing to real estate
- [4:42] The turnkey real estate investment process and how investors can get started
- [7:07] Key factors in property renovations, including plumbing and roofing decisions
- [10:24] Addressing investor concerns about rental income and market fluctuations
- [14:37] Overcoming analysis paralysis when investing in rental properties
- [25:26] How technology has improved property management efficiency over the years
In this episode…
Turnkey real estate investing offers a simplified way for investors to build passive income, but understanding the process is key to long-term success. Many investors hesitate due to concerns about maintenance costs, cash flow fluctuations, and the overall complexity of property management. How can investors confidently navigate these challenges and maximize their returns?
Real estate expert Michael Drew says long-term wealth accumulation requires a strategic approach to buying, renovating, and managing rental properties. He emphasizes the importance of making smart renovation decisions, such as preemptively replacing plumbing and HVAC systems, to minimize costly repairs down the line. Michael also warns against recency bias, urging investors to focus on cash flow and appreciation rather than short-term fluctuations.
Resources mentioned in this episode:
- Mat Zalk on LinkedIn
- Yonatan Schmidt on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
- Keyrenter Property Management email address: [email protected]
- Chris Lile State Farm
- Michael Drew on LinkedIn
- Real Estate Done 4 U: Website | Facebook
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
- Buildium
- AppFolio
Quotable Moments
- “Don’t wait to buy real estate; buy real estate and wait. Long-term wealth comes from patience and smart investing.”
- “Turnkey investing isn’t about flipping houses — it’s about building sustainable, passive income with the right team and strategy in place.”
- “Recency bias kills good investments. A tough maintenance year doesn’t erase the long-term benefits of cash flow and appreciation.”
- “The best investors take action. If you’ve analyzed 50 deals and still haven’t bought, it’s time to pull the trigger.”
- “Real estate success isn’t luck; it’s a system. Renovate right, manage smart, and watch your portfolio grow over time.”
Action Steps
- Define your investment goals: Determine your financial targets, risk tolerance, and desired cash flow to create a clear real estate investment strategy.
- Leverage turnkey real estate services: Work with a company like Real Estate Done 4 U to acquire, renovate, and manage rental properties for passive income.
- Avoid analysis paralysis: If you’ve reviewed multiple deals without taking action, trust the process and move forward with your first investment.
- Think long-term, not short-term: Focus on cash flow and appreciation rather than short-term maintenance costs or market fluctuations.
- Utilize tax-efficient strategies: Consider 1031 exchanges and self-directed IRAs to maximize your returns while minimizing tax liabilities.
Sponsor for this episode…
Chris Lile at State Farm Insurance:
This episode is brought to you by Chris Lile at State Farm Insurance.
Chris Lile at State Farm helps you protect your most precious assets and investments, including home and auto.
To learn more about how you can save double digits on all your insurance needs, visit diallile.com or call Chris’ office at 918-878-7771.
Keyrenter Property Management:
This episode is also brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.
The team helps clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].
Episode Transcript
Intro 00:05
Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Mat Zalk 00:20
Mat Zalk here. I’m the host of The Same Day Podcast, where I connect with top business experts and real estate leaders. Today’s episode is brought to you by Chris Lile State Farm. Chris Lile State Farm helps you protect your most precious assets and investments, whether it’s your home and auto investment, rental properties or other valuables called Chris Lile State Farm. For a quick and painless phone call to potentially save you double digits on all of your insurance needs. His phone number is (918) 878-7771 or visit diallile.com. That’s diallile.com. Tell him Mat over at Keyrenter sent you. Today’s episode is also brought to you by Keyrenter Property Management. At Keyrenter Property Management, we offer a full service property management suite of services, helping our clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management. Today’s guest is Michael Drew. He’s the CEO of Real Estate Done 4 U. The number 4. The letter U realestatedone4u.com has helped hundreds of thousands sorry. Hundreds of investors worldwide achieve their retirement goals through strategic investments in real estate and rental real estate. Specifically, they utilize cash IRAs, mortgages and 1031 exchanges to get those deals done with a robust portfolio, including over 500 real estate transactions and extensive stock option expertise, Michael focuses on developing sustainable passive income strategies. And as he says, and you’ll hear him say it today, don’t wait to buy real estate. Buy real estate and wait. Michael Drew, welcome to the show.
Michael Drew 01:53
Thanks, Mat. Good. Good to see you.
Mat Zalk 01:55
So tell me, Real Estate Done 4 U? Yes, it is turnkey investor properties.
Michael Drew 02:02
You got it.
Mat Zalk 02:03
Tell us a little bit about how it actually works. If you’re an investor and you’re looking for a property. Just hit me with the sales pitch. How does it actually work on the front end? And I got a ton of questions.
Michael Drew 02:12
A ton of questions. I’m going to go forward by going back. Good, if you don’t mind. I was a professional speaker for years, and all I really knew how to do was the stock market. And I’d make a bunch of money, sometimes lose a bunch of money. I just there was no residual. There was no way for me to replace my W2. Yeah. And I’m just. And then I remember when my dad, it was like my dad teach me how to parallel park a car. Then you do it a couple hundred times, you’re like, it’s not that hard to parallel park a car. Okay. Yeah. So then I bought my first two houses, which then grew to nine houses, and I’m like, oh, this is great. This is not that hard. Now, that said, I did them all with my current business partner in Indianapolis. They were all simple. They were all, you know, 1200, 1400 square feet Boring and all of a sudden I’m like, wait a second, my gross rents here. My, you know, expenses, my mortgage payments here, my tenants paying off my mortgage. I need more of these things. Yeah. And so that grew and that’s that grew and grew and grew to now we have well over a thousand doors. So so that’s my background moving forward is, is we’re basically for investors by investors. So yes we do property management of course, but it’s more of an added service. We’re mainly here for for people in my, my Rolodex and my, my database to help them make passive income. So to answer your question is we buy about 100 homes a year, give or take, sometimes 80, sometimes my biggest year is close to 200. We go ahead and our internal staff does all the rehab. And I know I, you know, I’ve been doing this 15 years so I know what to do, what not to do. We can’t just put, as they say, air quotes lipstick on a pig. You’ve got to do a good job. Because my secret game plan is my my investors will come back and buy more. So you do a good job. You do the roof and HVAC and water heater and upgrade, plumbing and electrical, yadda yadda. You know, you do everything. And then we put it to our leasing department and we lease it out to our investors. So literally someone can raise their hand, whether they’re a cash investor or an IRA investor or a a CSR loan, a no doc loan investor. And they can say, hey, I need, you know, four grand a month in passive income or whatever, you know, and I find the homes, whether it’s a 1031 exchange or whatever it may be. So that’s that’s the story. And it’s been working very, very well.
Mat Zalk 04:23
And so how does it work? Do you have a preferred insurance broker or do you have a preferred lender, or do you just kind of is it all turnkey? Like literally just plug my name in and it’s like boom, boom. I get a call from the insurance guy. The insurance guy says, your quotes going to be this you get a call from a lender that’s like, I got to make sure your debt to income or I got to make sure that the DSR on the house is 1.25. That’s it.
Michael Drew 04:42
Yep yep yep. Now some people. Now again, I’ll match your pace. I’m from Chicago, I talk fast. I’m sorry, but but some people be like, well, wait a second here. I really want you to help me and teach me. Why did the, you know, 12 year old water heater, you know, break? Well, that’s that’s usually the useful life of a water heater. And and that’s on the high side. Well, you know, you just some people really want to learn, you know, and other people, like, I have an investor out of Naperville, Illinois. He bought seven houses and he was like, just keep sending me money. You know, that’s fine. You know? And I can’t spend a lot on, on, on maintenance. I can only as a property management company. I can only spend so much on maintenance before I have to give you a call and say, hey, something really broke. But if it’s a snake and a drain or clearing gutters, you know, or something like that, it’s it’s no problem. I go with State Farm to answer your question. And that’s one of the reasons why I chose Indianapolis is is my mentor. I used to teach for Rich dad seminars. Have you ever heard of that book? Yeah. And he’s like, you got to go to a major city. You got to go where there’s no insurance risk. So I can’t go to Texas or I can’t go to Florida. I have to have low property taxes. So I can’t go to Nevada. Florida. You know, things like that that have no state tax. So their property tax is higher. So when you do all the work, you find these smaller little cute little bee markets if you will not in New York LA like these like like you’re in Tulsa. That’s fine. You know those little markets that that works really well for.
Mat Zalk 06:05
So two things. One, we have tremendous insurance risk here. We have got we’ve got tornadoes and hail and a bunch of other stuff which is problematic. Numbers still work. Generally speaking. Covid post Covid has been a little bit hard, but we can talk about that afterwards in our in our future business endeavors together. I do want to ask, what’s the point at which you change out the branch lines of a plumbing system? Like when, when do you take clay and and put in a four inch PVC line or a six inch PVC line, like, how does that how does that work when you’re doing the rehab of a property to make sure it’s obviously a balance? The more you put in, the more you have to charge for the house. You’re not necessarily going to get more rent for having a brand new plumbing line, correct? You don’t want to do too much so that the price can stay low and the return is right. But if the if the initial of your pro forma return meaning I’m going to get $100 $165,000, house doesn’t actually look that way because six months down the line, I’m doing a $4,000 plumbing line. Then all of a sudden it looks you’ve got egg on your face. And investor say, this wasn’t as you expected or as you as you sold it. Correct. So like, what’s the balance? How do you actually know when to do so?
Michael Drew 07:07
We have a we have a, we have a standard that we follow. You know now I’m Cameron and snaking every drain you know. And if it flows it flows you know. Now that said if there’s, you know, 16 trees in the front yard, we got to take a look at that again, right. Yeah. You know, that is a twice a year thing I do as far as main drains and things. Right. Proactively we may be putting in at least a clean out. Okay. We’re removing all galvanized up to the main to answer your questions. And then everything on the inside of the house is PEX.
Mat Zalk 07:37
Got it. I mean so you’re really you’re you’re gutting walls sometimes and you’re cutting holes. You have to and you’re changing out all the plumbing.
Michael Drew 07:43
Yeah. I mean I mean you didn’t get a cold. Well I think they were snowing in Dallas this year or something.
Mat Zalk 07:47
Like, yeah, we got.
Michael Drew 07:48
We got like a cold snap. Right. And we got down cold and even you know, so that’s not fun when you’re calling and you know, you can’t, you know, you know flush the toilet because it’s frozen right. So we do everything the to the industry standard. You know, you know me personally of my personal holdings. You know, I don’t go around replacing roofs because I want to set money on fire. But if I have a new investor and our standard is the roof has to at least have ten years of useful life left on it by the inspection. Well, if the inspector says, well, it’s probably got five, it’s not in the best interest of the investor. Now, if it was mine, I’d leave it. Okay. But the investors, California or wherever your clients are at, like, I’m going to put a new roof on. And once I once I’ve done this a few hundred times, I know my acquisition. I know what it’s worth, I know whatever, maybe I make a little bit more, a little bit less on a property. But my top investor has 88 houses out of out of Malibu, California. Yeah. And after he trusted me with the first 10 or 20, he’s like, give me give me another ten. A wealthier gentleman, of course. Right. But still it works great.
Mat Zalk 08:48
Do you find that those people, people with a lot of money, are still putting debt on the on the houses? At least a little bit.
Michael Drew 08:52
Usually.
Mat Zalk 08:53
Not paying them cash. Really?
Michael Drew 08:54
Usually not so much coastal properties like my New Hampshire. I have a big thing there. And then I’m in. I’m speaking in LA later on this month. They use me for 1031 exchanges. Got it. So they’ll say, hey, you know, I bought that. Like some of your clients might say, hey, I bought the house for using round numbers, right? 120 grand. Now it’s worth 300. Don’t, don’t don’t pay taxes on it. Just parlay that. Keep parlaying. And then I’ll give you, you know, 50% debt. And we’ll parlay that to seven doors if you want.
Mat Zalk 09:21
Yeah. That that becomes a function of how much debt they had on the initial investment and what they have to replicate. But yeah that that correct that that tracks. One thing I’ve noticed recently is that some of our investors are experiencing what, you know, I know as recency bias. They’re they’re thrilled with the rents and the run up to run up of rents, I should say should say on on the existing lease properties for anyone that got into investing, you know, in 2022 and before. Right. So they bought properties for 75 grand. They were getting 800, $900,000 a month in rent. And now they’re getting much more. But for for people that bought in 2022 expecting that run up in rent to continue. And it hasn’t they pro forma that number in and and they’re like now potentially disappointed with with the the rents that they’re getting the ratio of rent to the asset value. What do you say to these people when like what they thought was going to happen just hasn’t happened. None of us have a crystal ball, right. What do you say to them?
Michael Drew 10:24
That’s a that’s an interesting question. My training taught me, you know, it’s it’s kind of you trust but verify. You’ve heard, you know, measure what measure twice. Cut once. You know that that type of thing. Rich dad always said you pro forma cash flow. Okay. And then you hope for appreciation type thing. Okay, I can go ahead and I can look at my big my spreadsheets, and I can tell you that it’s going to rent for X. I already have a two year lease signed. And if they bounce for whatever reason, I’m I can I know I can replace that. So as it stands today, you’re good to go, buddy. Your your your your your cap rate is good. And your and your and your your your internal rate of return is good. Okay. Now that said is I don’t like to do that when you’re like, hey, it’s 10% rent goes up every year because I don’t know that. So what I like to have happen is when they I prefer under promise, over deliver, when they come back to you in two years and be like, I got 75 grand of equity or you know, something, whatever it is, it’s more than they thought. That’s better for me. So I would always say under promise, over deliver. And also is, like I said to you before, is, yeah, we’ve been you and I have been successful. But it’s only the real reason is because I’ve screwed up a lot. I just tried more stuff than you have. I’ve just failed more. I walk in the houses and there’s a free swimming pool in the basement. Oh, yay for me. You know, like, you do this enough. You’re like, I’ve just screwed up a lot. That’s why I deserve to to to to talk to you and say it’s not all sunshine and roses. Yes, you have a lease, but if their mom has cancer in Seattle and they bounce on you, it is what it is. We’re going to we’re going to we’re going to turn it as fast as possible. We’re going to take care of you. It’s just they’re human beings.
Mat Zalk 12:00
And and to your point, what’s the what’s the famous thing that you say, don’t wait to buy real estate. Now, what is your what do you say?
Michael Drew 12:06
Don’t wait to buy real estate. Buy real estate and wait. Exactly. So no one same thing. It’s it’s kind of like well you’ve got we both have four kids, right. No. And you know and so my, my goal was to spend time with my kids. But stupid me, they all have different love languages like my son and I are like, it’s easy. My boy is easy. My girls want to talk. It’s hard, you know. So why I say that is you just plan it out. And me meaning is when you’re older and you have 10 or 20 properties or 50 properties, you’re not going to regret it. Sure, every now and again you’re gonna have down years or high maintenance years, right? But all of a sudden, when everything doubles in value and, you know, you’re sitting there at the end of your life, you’re saying, wait a second here. We never worry about anything. Yeah. You know, we can live another 20 years and not even hit your 41K, honey. I mean, it’s cool.
Mat Zalk 12:54
Buy real estate and. Wait. We have a lot of people that are that are still selling, though, because they’re, they feel like again to the recency bias. They had a bad year of maintenance. They had you know, HVAC prices have gone up and they waited. I told them five years ago they should replace the HVAC and they wanted to Band-Aid it. And, you know, solder some copper lines and whatever else patch it. And now they realize that a new HVAC system is seven grand to ten grand. Like we should have done it before. Well, they’ve spent that money, and now they feel like, you know what I want to sell this thing is not producing as much cash as I wanted. My perspective is, just wait. If you look at the numbers, if you if you actually take your pro forma match it to what your reality has been, now you’ll see that your return, including depreciation, including your principal pay down, including the cash flow is all great. And I had a A friend, a business partner of mine that was like, hey, get rid of these properties. We have not made any money. And I went through and I did the exercise. We bought them in 2019, December. We did the renovation in 2020, and now we just sold two of the three duplexes that we owned. We made we were like in them for 40 grand cash total after renovation. We just sold them for. We sold one 4140. So we’re in for 280. We still have one left. I looked at the IRR. It’s like, and I assume that the last sale, I assumed the price for the last sale, so I assumed a total exit. It’s like, I don’t know, 110%. I looked at the cash on cash return 540% or something. I’m going.
Michael Drew 14:08
Six years.
Mat Zalk 14:09
In six years it’s in five. Yeah. And I’m like, it’s dumb. I mean, sure, we can sell these things. We can change them into something else. But frankly, this is I don’t know where you’re going to get a better return than this. So even though we had some tough years of maintenance, like we did the renovation, but we had issues with HVAC, we had issues with the plumbing lines that we didn’t check. Like it’s still that’s a phenomenal return.
Michael Drew 14:27
Phenomenal.
Mat Zalk 14:28
So people have recency bias. And I’d like to work a, you know, find a spreadsheet and work it with every single person so that I can say to them, where are you getting a better return than this right now?
Michael Drew 14:37
What I like to do is, is sit down with someone and it’s you. And I like to do some sports. I do a lot of pickleball. I do lift weights with the wife and I do. I was a triathlon person, played rugby. So I like to sit down with someone and say, what’s the point? What are you doing here? What do you want to accomplish? You know, because like, I like to play pickleball. So someone’s like, no, I like to run. I’m like, I only like to. Or someone likes to swim. I can only swim back from the diving board. That’s it, that’s it. You know, and and so, like, I sat down with one gal and she’s like, I’m 50, I’ve got great credit, got divorced, and I need, I want ten grand a month after expenses. And literally getting wealthy in this business to me is more of a math problem. Give me your temperament. Here’s my here’s my tools, which is my real estate. And we figured out and my numbers are not exact, but we figured out that her deposits, her her Down payments had to be 33 to 35% in order to make the model work and the time she had. Sure. Sure. And now you and I’ve been doing this long enough. She’s done the houses. She’s done. Everything was in line. And then she refers me business all the time. So in doing this, if you have that, I encourage people to have that longer term mindset. You know, whether it’s building relationships with your kids or buying real estate, don’t. If you’re in it for five years, absolutely. You know, it’s you.
Mat Zalk 15:57
Know, I see people I see people that buy stuff. It goes up 20 grand. They sell it. I’m like, cool, you made 20 grand and then you gotta figure out what to do with that. Like, yeah. And you’re giving them you’re giving the government half and you got to figure out what to do with it now. Like, why would you do that? Buy and hold the real estate. But I have a couple of questions. One is what’s the in your in your experience over the last 15 years? What’s what is the expected cash flow. Somebody goes to Real Estate Done 4 U and they buy a house. There’s a there’s a thing on here that says property’s a tab that says properties. They go on, they want to buy it. What’s the expected conservative cash flow they can expect per house per month.
Michael Drew 16:31
Sure, our our cap rates on their are estimated because we do not guarantee anything 8 to 9%.
Mat Zalk 16:38
Great. So they’ve got they’ve they put down $35,000. They’re going to buy $170,000 house. And they would expect they would expect call it 10% of the of the asset value. They’d expect 13 $17,000 less a couple of points. Whatever I just said eight, eight, 9%. They’re going to expect that much in cash flow. I mean, it’s a it’s a it’s a pretty significant return and a great and a great market. I mean, in Indianapolis, where you’re doing your investment.
Michael Drew 17:09
Correct.
Mat Zalk 17:09
Turnkey rentals is a great market capital.
Michael Drew 17:13
They call it like a perennial market where it’s so within 660 miles, I think is two thirds of the American population. You can have breakfast in Indy, go to Chicago for dinner, okay. If you leave early enough, you can go to breakfast in Indy and catch a Broadway show. I can go visit. I don’t know about you in Tulsa, but I can go. Go to Nashville. I can go to Atlanta, you know? So it’s it’s within a day’s drive of most of America. Okay. And so and then we have we have a two, you know, we have the Pacers, we have the Colts. We have the farm team to the Cleveland you know and it’s it’s easy.
Mat Zalk 17:46
Yeah it’s crazy that it’s not. It’s 2.5 million people in the MSA. It’s not it’s I guess two and a half times the size of Tulsa MSA. So it’s bigger. It’s not so massively bigger. And yet there’s so many more sporting options. There’s so many things to do. Pretty amazing little inflection point that must happen. Part of it’s driven by the state capital, part of it by other stuff. But let me ask you this. What what do you say to people that have looked at tens or maybe hundreds of deals and I’ve never pulled the trigger, like, how do you get them over the analysis paralysis?
Michael Drew 18:13
That’s a that’s a great question. First of all, it’s kind of like like my my son’s trying to, you know, thinking about buying a ring for his girlfriend. And he’s getting nervous, right. And I go, well, you never 1,000% know anything in life. You know, like you’re always you’re like, well, there’s divorce in our life. So what happens? And I said, you know, so you gotta sit down and talk to him. If you’re really an analyzing, you know, really more than 10 or 20 deals at some point. We used to say this in the coaching business, we’ll give you if you don’t like your coach, we’ll give you one. We’ll give you two chances to switch. Then we’ll give you a mirror because chances are it’s your fault. Chances are you’re hard to work with, you know? Yeah. So in real estate, is is on a 1400 square foot home. Guess what. Or, you know, it’s got four walls. It probably has a kitchen and a bath. It’s in a good it’s in the city. But the point is in the house, if it’s green or yellow or red or gray, the point is the system behind it and the team behind it. Yeah. So that’s kind of so if you’re if you’re going to be like, well I wouldn’t live there. You’re like, we’re selling Toyota Camry’s, we’re doing an Uber.
Mat Zalk 19:12
You don’t have to live there.
Michael Drew 19:13
It’s not your dream job there, buddy. You know it’s not it’s not a Mercedes or BMW because those are bad Ubers. We want an inexpensive car with good gas mileage and that’s the job. It’s not a dream car. It’s not a dream house. It’s one that’s meant to be a workhorse. That’s the point.
Mat Zalk 19:26
Is there an infinite supply of these houses? Obviously infinite.
Michael Drew 19:28
It’s know it’s getting harder and harder. Is it? It is. I mean, we used to be able to buy them at our margins were a lot higher ten years ago, you know. And so now, thank God we’ve been doing it as long as we have. So we have like seven different acquisition sources. And people are like, well, I went to a seminar, I read a book, I want to do it myself. And I’m like, good luck, man. You know, by the time it makes it to the MLS, me and a 15 other buddies have already looked through it and decided this is not going to work for us, you know? So we have. And the only way to buy from the sources we buy is cash. There’s no hard money. I mean, I guess you do hard money, but I mean, we got to go now. I mean, I can I can wire earnest money from my laptop that I carry with me on the pickleball court just in case someone I need to do it now. So we’ve got to move on these deals. Don’t sleep on them months to buy a from a tax lien or a probate sale deal, you know? But once we get them.
Mat Zalk 20:16
How long are you sitting on a property? Generally from the time you acquire it to the time you you flip it? right.
Michael Drew 20:21
Not. Not that long. Not that long. My business partner has got a kind of reinvigorate. We solved some things in life, and we’re kind of put our hat backwards, kind of ready to get to work again. So, you know, at any given time we have, you know, 10 or 20 homes and it’s it’s been working very, very well. So, you know, 90 days, you know.
Mat Zalk 20:39
And your team, your internal team, W2 guys are doing the tile work, the floor polyurethane, sanding, the painting, everything.
Michael Drew 20:47
Everything on purpose.
Mat Zalk 20:49
And the houses that. Sorry.
Michael Drew 20:51
I just struggle to quality control unless it is that I think we outsource our HVAC. That’s about it, you know that, you know. So everything’s in house on purpose. Also, we’re in that old Midwest pride thing, you know. So if it’s not right, I call up, call, call up angel, I go, brother, you told me it was done. It’s not done. Well, it’s 6:00. Angel don’t care. You you tell me it was done. So don’t cash your check until you go back over and finish. You finish. You know, that type of thing. I’m trying to be funny, but it’s. You got to take pride in the product you deliver. And I can’t do that to a contractor. You know, I can do some some internal stuff.
Mat Zalk 21:28
And everything’s relatively the same. You’re using agreeable gray on all the walls. White trim. It’s it’s the same product. Now you’re going to use you’re going to use different color Formica or whatever on the countertops. Some of it you’re going to salvage, some of it you’re going to redo. Sometimes you’re going to paint cabinets, sometimes you’re not. But generally it’s the same product. And that means on the investment on the on the management side, you always have guys that have a gallon of, you know, whatever color paint, they can go gray.
Michael Drew 21:52
All the locksets are the same, all the toilets are the same, the wax rings are the same. Yep. You got it. So it’s so that’s how we could scale that product.
Mat Zalk 22:00
Yeah.
Michael Drew 22:00
That’s how we could scale management. Yeah. Beautiful. So that’s one of the reasons people say, well why don’t you come here, here there or whatever. And I’m like and then also as you get a little bit older is I want to make as much money as possible. But I also do love my wife, and I do love my kids, and I don’t want to work 12 hours a day. And so I teach my tenants that as well. I said pay through the app and that’s how you how you request maintenance. Don’t call me again. I mean, not to be. I don’t say it like that. Yeah, yeah, I said I can’t scale like that if you call me. Okay. Yeah. Go through the app. We have staff on the app. Okay. And then the staff can send out the drain guy or the or the HVAC guy. Don’t. I’m at I’m trying to, you know, build my relationship with my kids or or win a pickleball tournament.
Mat Zalk 22:37
Most likely the latter.
Michael Drew 22:39
You’re not wrong. You’re not wrong. As they get older.
Mat Zalk 22:41
We do the same thing like tenants want to call us and do it. And I say, look, we are not all available 24 over seven, but we have 24 seven response. So if you send it through the app, then it doesn’t matter whether so-and-so is on paternity leave, maternity leave, whether so-and-so is on vacation in Mexico, somebody will address your concern. But if you’re texting your property manager directly, they might not answer you for two days. That’s not a good we don’t want that to happen. And you don’t want that to happen. So do it through the right systems and then we’ll get it sorted immediately. Right? Any challenges on the property management side that you still like to address. Correct things that you’re improving. And we’re both in that business. You’re you’re I’m I didn’t wake up, you know, at seven years old and say, I want to be a property manager. Nobody does. You got it through you. You came through it. Exactly. You came through it, you know, as a as a necessary evil. I’ve come through it as a, you know, also fundamentally the same way I was owning I owned a bunch of rental properties and I was like, I want to I want a team that will be able to rehab these properties, get them up and running and do it fast. And so I came about it that way to more or less accidentally. What are you still working on on the property management side that you wish functioned better?
Michael Drew 23:42
Right. It’s I really I think we’re I’m still the last. I made a final tweak on my late fee policy. I did a I went with a property management software that I promote that reports to the credit bureaus so that they can report their on time payments to the credit bureaus. My, I’ve kind of chosen a unique personality because I authentically love people. Yeah, but I can’t be your dad. I can’t be the dad to everybody. I can’t, you know, you know, so that’s kind of my my thing that I want to want to tweak a little bit. I have my daughter doing some property management as well. She was she’s doing some of the grunt work of verifying employment and previous landlord history, things like that. But what I do like is that I’m in a midwest city so that every home I have, I have a dozen applicants. So I have so many applicants that it’s, I don’t want to say cocky, that’s the wrong word. But I can be a little bit arrogant saying, I told you that you have to net three times rent. Well, I know, but John referred me. Is John going to pay? John’s going to pay the rest of your rent. So no, we gotta go by our systems. And so once people really understand that we have systems and processes. It’s it’s a lot easier. And I gotta say, over the last 15 years, software has tripled and quadrupled in effectiveness and efficacy. So I’ve been really grateful for that because I can send group messages out, scheduled messages out. I can, you know, if you haven’t take a picture of your furnace filter, you haven’t changed it. You know, all these different things to remain proactive.
Mat Zalk 25:05
What software are you using now?
Michael Drew 25:07
Buildium. And I like it. Love it. How about you?
Mat Zalk 25:10
We use AppFolio, I think it’s they kind of all do the same thing. It just depends on what you what you get used to and what your, what your team is working on.
Michael Drew 25:17
Right. Which is right. It’s kind of.
Mat Zalk 25:20
What was the most painful process that you did 15 years ago that now has been solved by technology?
Michael Drew 25:26
I would say least signings, really. It would take us almost an hour to sign a lease. We also are a bilingual company. I know a lot of Spanglish, but we have staff that’s bilingual and they would come on in and all of a sudden it was like, I’m in Miami, you know, as a snowbird, so I can get myself along, I can get directions, I can order food, but I don’t really quite understand TV yet, you know. So someone who doesn’t understand English is I really want him to understand the lease, so I can’t get through that. I need him to understand. So. So that that was something. But an hour to do it, you know. So now literally we do some zoom calls with people. Then we have another staff member walk through the house for their, for their, their, you know, pre lease up, you know, check off things that may or may not be wrong. You know. So. But what I really do enjoy is this everyone has a smartphone. Everyone has $1,000 phone in their pocket, you know, so if they have a problem, they can take a picture of it and send it to us. Yeah. You know, so I really do enjoy that I really do.
Mat Zalk 26:22
15 years ago you take out your elph one pro first gen.
Michael Drew 26:28
Razr flip phone maybe.
Mat Zalk 26:30
Oh my God.
Michael Drew 26:30
Are we dating ourselves? Right.
Mat Zalk 26:35
Anything else? So let’s talk a little bit about Real Estate Done 4 U. How do people reach you? How do they find a house they want to buy? If they’ve got a little bit of cash? And then just want to clarify, I’ve got $30,000 in my bank account. It’s burning a hole in my pocket. I want to get it done. You’ll you’ll kind of do everything else. They’re ready. They understand the value proposition of real estate. They love the appreciation. Let’s go. You’re going to do everything else. What do they do next? How do they find you?
Michael Drew 26:58
What do I do? So the name of my company is Real Estate Done 4 U. And then the number 4 and the letter U, I trust you put that in the show notes or comments or however you do that your fancy podcast guest guy. And and the next step is to book a strategy session with me just to get my little link. And we we. And then we talk. That’s it. Leave your checkbook back. Book at home at that point. Be like, what’s the point? What’s your what are you going for? What do you need to accomplish? If you’re ready to go, like you said, because you and I have done this a lot and they’re like, I get it. I’m too busy. I’ve already looked at 20 deals. If I look at another 20, they’re going to be about the same. I go, okay, now we’re talking. So, you know, let’s take action, right? Dogs don’t bark at parked cars, I used to say. So let’s go. Let’s move it. And so and so really, you know, and then I’ll say, all right, I’ve got I want to start with one, I want to start with five or whatever your number is. Okay. I’m going to go ahead and either send you proformas on those or I’m going to give you my top 3 or 4. Okay. These are why I like these top 3 or 4 on our next call, but yada yada yada. We already have the loan officer that I that I work with who is very flexible and can understand self-employment all the way to whatever gymnastic financial gymnastics you have estate planning stuff where everything. We have everything. Okay, so by the time we’re done, you’re going to have to put in $1,000 earnest money. You’re going to save your down payment for the title company later when we close in about four weeks. You’re going to go ahead and make sure you give me your ACH information. That’s all we do. We don’t send checks unless it’s an IRA company. We send checks to IRA companies and then go from there, rinse and repeat. Also, I will say is I do enjoy. I noticed that I was sending about 20, 20, 30% of my checks or my my direct deposits to self-directed IRA companies. So I work with 1 or 2 in particular that are great and that that money is you can use that money, by the way. You can own assets and your your self-directed IRA. So I’m sure, Mat, you send checks to a bunch of them, right? Sure. And it’s been great. And that’s what I do with my mom.
Mat Zalk 28:51
Can you lever up from a from a self-directed IRA?
Michael Drew 28:54
Yes you can. It’ll be called a non-recourse loan. If you do lever up in an IRA, there’s something called Ubit, which is unrelated business income tax because you’ve levered up an asset that’s a unique tax. It has tax advantages. So if you lever it there’s a tax to that. And I can walk you through that.
Mat Zalk 29:11
Got it.
Michael Drew 29:12
Kind of cool.
Mat Zalk 29:12
Right. Beautiful. If somebody wants to reach out to you directly, you suggest they just go to Real Estate Done 4 U with the number 4.
Michael Drew 29:18
Number 4 and the letter U.
Mat Zalk 29:19
The letter U. And just go to Contact Us and reach out that way.
Michael Drew 29:23
Reach out that way. Put me and or shoot me a text. You can put my cell phone down there. Type thing. It’s real easy because here’s the deal. It reminds me of this. I do enjoy dining with my wife and my friends. I that’s a fun experience for me. And I remember I went to a very, very nice place and I think that mine was medium rare, I think. And it was just still bleeding. It was still moving. And I just went to the guy and I was like, hey, I just need a little bit more heat on this. You know, it’s, you know, I don’t think he had malicious intentions. It just came out too rare just to help me out. And the guy came out and it was done in whatever it was less than 4 or 5 minutes, and he wanted to buy my dessert or something. And when you’re dealing with an experience like that, which I love for my friends and my family. Or money. It can be emotional. Sure. That’s why I appreciate talking with people. Yeah. You know, because you’ll talk more at the beginning. And then every now and again, I’m going to send you thousands of dollars. And then every now and then there’s going to be a maintenance request. And besides that, you got to call me and add your portfolio unless I reach out to you. Yeah. So I do appreciate the relationships. And also you and I both work for ourselves and, you know, so I do enjoy that when I travel, I’m going to LA in a couple of weeks. I get a chance to visit my investors out there and drive through Nashville. Somebody says they’re better than me at pickleball. So, you know, friendly wager or I did see a Super Bowl ad, maybe MC ultra, maybe. We’ll bet that I don’t know. Let’s be crazy. So you gotta have fun.
Mat Zalk 30:42
You know I love it. Michael Drew as the CEO of Real Estate Done 4 U. Again. That’s the number 4 and the letter U. Michael Drew has helped hundreds of investors worldwide achieve their retirement goals through strategic investments in real estate and rental real estate. He utilizes cash IRAs, mortgages and mortgages and 1031 exchanges to get those deals done with a robust portfolio, including over 500 real estate transactions and extensive stock option expertise, which we didn’t even cover here. I want to know more about that on our next podcast. Michael focuses on developing sustainable passive income strategies. His journey into real estate investment was driven by a critical insight that traditional savings and retirement accounts often fail to deliver the necessary growth to secure financial futures. And then, after purchasing his first few homes, he recognized that the unparalleled benefits of real estate investments, as have I. I should say, just a little caveat there. As Michael often says, and as he said here, don’t wait to buy real estate. Buy real estate and wait. I couldn’t agree more. Michael, thank you for being on the show. We really appreciate you.
Michael Drew 31:44
Thank you Mat, we’ll talk to you soon, my man.
Mat Zalk 31:46
Take care.
Michael Drew 31:47
All righty.
Outro 31:51
Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes.