Investing While Traveling the Country Living in a Van with Michael Albaum
Today's Guest: Michael Albaum
Michael has been investing in real estate for the last decade. He has done a variety of deals ranging from single-family homes to longer-term NNN (stands for the net net net which is the property's operating expenses) lease properties with national chain tenants. After years of investing, he found his niche in long-distance, value-add multifamily investing. Michael left the 9-5 world and, prior to the pandemic, was traveling around the world with his wife, who is also able to work remotely. Michael is also the Program Manager and Head Coach of Roofstock Academy and the host of The Remote Real Estate Investor Podcast, which interviews RE industry professionals about remote real estate investing. He is currently investing in short-term rentals and small multi-family real estate remotely while embodying the nomadic lifestyle of living in a van and traveling with his wife full time.
Highlights From The Show:
We begin the episode with Michael sharing his background story and how he ended up in real estate. Michael shares that he is just a regular guy who grew up in California and did the things most of us were told to do. Go to school, get good grades and get a good job, and then you will be set out for life. Michael loved his engineering job, but he realized that it was not going to get him where he wanted to go fast enough. He got his hand on Rich Dad Poor Dad, which transformed his perspective about money. Being an engineer, real estate investing really resonated with him. Michael played with some spreadsheets, self-educated for about two years, and eventually got his first property. When the first rent showed up, he knew he had solved the Rubik's Cube. Michael set himself bigger goals and bought properties in different markets. However, things started becoming overwhelming. He was chasing down 60 property managers for 60 different properties, which was a pain. So he decided to narrow down and be laser-focused on two markets, which he says has been amazing.
We then talk about Michael's nomadic investing experience, how it came about and how it works. Michael shares that in 2018 his father passed away, and he requested a completely remote plan to work from home, and it was accepted. He wanted to support his mom for about 3 to 4 months, and when he returned to work, he felt he needed a mental break. He asked for a six-month break to unplug and do a mental reset but was denied. The next step was quitting his 9-5 in 2019, after which his wife suggested they travel for a year to explore and live in other countries. Michael shares that it was a perfect time to do it, they had the real estate backing them up, and his wife had a totally remote job. They went all over the place, had amazing experiences, and in the process, Michael picked up remote freelance work to make more money. However, during the pandemic, they were forced back home as flights were closing down. They were not yet done traveling, so they bought a van, designed it, moved into the van full-time, and rented out the house they were living in.
Next, we talk about Michael’s business and his current goals. Michael shares that as he was evolving in his career, he went out of state and got involved in multifamily fairly quickly. He was in growth mode for a long time, and he started by buying various sized multifamily properties to get to 100 units portfolio, and again he hit the inflection point. Things started getting heavy, and he realized this was not his goal. Michael started scaling back on the acquisition and the value he had on projects to focus on doing more with less. Now he’s at 61 units after selling off some of the properties to get leaner and easier in managing properties. Michael believes that if it doesn’t feel easier, takes up more mental bandwidth, or takes you away from the things you want to do, it’s pulling you in the wrong direction, it’s not worth it.
We then talk about how doing short-term and long-term works for Michael. Michael shares that doing both short-term and long-term is totally counter-intuitive, but management is the silver bullet. For him, he doesn’t manage 99% of his portfolio of short-term rental properties, and from a remote perspective, he has handed everything to property managers. According to him, you have to run your numbers and be super diligent. Michael also shares that he always tries to learn from the past and not to make the same mistakes again. For the same reason, he’s not investing in short-term rentals all over. His focus is on the Smoky Mountains in Tennessee, a super hot market, very easy to plug and play, and the experience is great.
Next, we discuss how you can build a side hustle and eventually escape from your 9-5. Michael shares that it’s super important to plan it out. You also have to analyze how much you earn in your job, your real estate investments, and your expenditure before quitting your job. Michael also shares that he was willing to prioritize his mental health over the financial security that he wanted. He knew he could always get another job if everything crashed down and his plan didn’t work. After quitting his job, Michael was also doing supplemental work as a freelancer to be on the safe side if things went sideways. He recommends that you get something going on the side you can quickly grab on to if need be.
Lastly, we talk about small multifamily properties and why Michael chose to focus on this range of properties that are often overlooked. Michael shares that he didn’t know that small multifamily was no man’s land when he got involved. He went to a new market and found an 8-unit property valued the same as a single family, a niche he was investing in at the time. Michael was working with an agent, and there were other properties, but the price points of the property resonated with him. It only pushed him a little outside his comfort zone, and getting his head around the value addition through physical renovation was easier. People like him who were doing single-family thought this was too big for them, and for those who were doing multifamily, this was too small for them.
Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Michael Albaum and get valuable information on how to start investing in real estate on your own terms to support the lifestyle you want!
“When investing in properties, diversity of scale can make you lose economy of scale and efficiency by being so spread out.”
“If it doesn’t feel easier, takes up more mental bandwidth, or takes you away from the things you want to do, it’s pulling you in the wrong direction, and it’s not worth it.”
“Investing in both short-term and long-term rentals is totally counter-intuitive, but the silver bullet is management.”
“The best time to invest in real estate was 10 years ago, but the next best time is today.”
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More Resources From Mike:
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