From garbage man to multimillionaire through rental property investing with Rich Garland

0:03Rich welcome to the living off rentals podcast well it's my pleasure to be with you Kirby yeah I appreciate hope I can Enlighten somebody on on real estate I don't know if it'll work but I'm very confident it will work I appreciate you taking the time yeah I I'll just give a little intro here on how we know each other and what I know about your background and then I'll let you fill in the the rest of it but you know I've been super excited about doing this this interview for a while now because I met you through your daughter actually Ashley who went to school with my younger brother Heath and there were a couple years behind me but I I knew her growing up and then she came back

0:51From La after spending some time out there and was involved in real estate and started working with us in in our real estate investment company about man I think it's like six or seven years ago now and then thereafter married one of our partners and in the company and has been an active part of that and so through her I I met you and you know I've you're kind of one of my real estate investing Heroes because you know you're you're living the the dream that I think a lot of people in this community have of you know working hard and building a portfolio while you're doing that that one day you can live off of that that will support you and and I think you're an example of that and I want to I want to dive in more to the

1:40Details of of how you've done that over the years and some of the advice that you might have for some of the younger investors in this community so let's first start off keep share a little bit about your background and then how you got into real estate well it was interesting I was my father had a gas station in a garage we had to work back then didn't have a choice and there was a lady that came into the gas station every Saturday and she I back then we had to check the tires oil everything what year was this in 7574 okay and anyway every time

2:28Every Saturday she would give me 50 cent tip and she would make a statement now you got a picture a 12 or 13y old okay all right she would say buy all the black dirt you can they don't make it anymore well can you imagine I'm thinking this lady's nuts what what do you mean so this went on for the whole summer and I went in there at one time and told my dad I said dad this lady's nuts I said every every week the same thing yeah and he said to me he goes you might want to listen to that lady she owns all of Manhattan so man Manhattan Illinois not New York Illinois okay yeah yeah yeah so anyway that was that and I didn't

3:17Really comprehend it too much at that age so I was in high school and I was getting ready to graduate and my dad he said to mewhat are you going to do after high school well back then it wasn't like today I mean he didn't say do you want to go to college what do you want to do yeah I said well I'll figure it out Dad I'll figure it out I'm not there yet so anyway I was on a to he says to me well let me just tell you this if you're planning on staying at home when you graduate from high school you're going to pay $200 a month rent I just looked at him like a deer in headlights I said well

4:05I guess I gotta live somewhere yeah so anyway with that that following week I was on a we had a wrecker so I had to go on a towing job I had a car on the back of the truck and there was this little house for sale I went by and I'm looking at it well I called the number back then it was Bell reality and the guy said yeah I'll show it to you so we met the next day over there and he looks at me and says man how old are you I said well I'm not 18 yet he saids what do you want to buy a house for I said I don't know can I buy the house and I told him I had $3500 saved up so

4:54He said I'll tell you what the house is $1,500 so the next day he came and took me to the bank and when I'm telling you this stuff you just don't see this today anymore yeah it's 17 you save like 40% of the cost of the house exactly yeah so he I'm sitting at the bank and the banker you know he says Hey fill these papers out so I filled them out well my dad had nine brothers and four sisters so I had my name there I said he says Rich Arland he said are you related to and he named all the brothers and sisters and I said well the first one was my dad and he said well you know what I'm

5:43Gonna give you a loan I said really he said if you work half as hard as all those guys you'll be fine so anyway he gave me the loan and my house payment was $101 a month wow so I went back and I told my dad I said Dad I'm moving out he says why I said 'well you are going to charge me $200 a month rent I bought a house and it's 101 so that's how it started that's incredible so that and that was a 30-year loan that you got no it was 10 years 10 years and it was still $101 $101 and I paid it off in three years oh my gosh yes wow so you bought that one at 17 paid it off in three years your first paid off property that's

6:32That's impressive yeah you don't hear Too Many people buying number one it's 17 but then also paying it off that quickly so so then what' you do after that well I got out of I got out of high school and I always worked for my dad and anyway I got on with a garbage company so I was a garbage man for like 35 years well the company I ended up with is who everybody knows today is Waste Management oh okay but I never liked it it was a good job but I never liked working for anybody I loved being an entrepreneur so anyway I just kept saving and I met another lady who she

7:21Taught me a lot her name was Bonnie derer she owned deser real okay and every time I'd see her I just talk to her pound questions pound questions and she she was kind of hesitant always answering me and I said I would just love to follow you and she goes why I said I don't want anything from you but knowledge I said with that I can conquer the world I don't want a dollar from you I don't want anything from you but knowledge because knowledge is power so that's how that started and then I C I bought a quite a few houses with her you know on I mean through her real estate company yeah and the the thing is with the real

8:10Estate it wasn't work to me it was my passion and I never considered it work even with what I've got today and if I could advise anybody that's out there if they're going to get into this and if they're married if your wife isn't on board with this don't do it because it's a lot of work yeah and that's my suggestion to anybody if you if your wife or significant other isn't on board yeah it's not g to work yeah yeah definitely I think that's great advice I I I definitely agree with that maybe help them get on board

8:59If if you're really passionate about it and they're not yeah so so let's walk through this and so you you met Bonnie and you started buying some properties and you were just using money so you would work as a garbage man you'd save money on the side and then you you'd purchase properties with the cash or were you getting loans at the time I only ended up I ended up getting loans for a couple and I had bad experiences with the bank thanks yeah anyway I I just said to myself after I had like four of them I said from now on I will finance myself so I got another full-time job and I just kept it rolling like

9:47That and kept buying wow so you're using the money from from your second job to purchase property right wow right okay so this was then so you started in in the late 70s then and you just pretty much continuously through your whole career were buying what was the pace that you were buying at I was trying to do one every two years because I wanted to always have them paid off okay that's that was just my my goal I mean if you talk to a lot of people today I did not do it the right way they want you to always be

10:36Leveraged out they the big word that I I don't like when I always hear cash flow but most people the cash flow if they had a catastrophic thing happen with their properties they're going to be digging into the pot and I never wanted to dig into the pot yeah so I always wanted it paid for the other big thing that you hear is you know the yeah you I still get my capital gains when they my buildings always appreciate so I just never cared what anybody else had I just had my little path that I wanted to be following and I think it seemed to work out yeah because if I if I could suggest to anybody that's going

11:24To get into this also if you are married I suggest to always have your primary house paid off and then go play yeah always have a roof over your family's head yeah and that's what I followed yeah I think it's great advice I you know and I think it it flies like you said it flies in the face of some conventional advice because a lot of people give advice based on spreadsheets and and it's not based on actually doing the work and going out there and purchasing properties and so on a spreadsheet you know if you leverage you can always get a higher return with more leverage but it doesn't take into account the risk factor like you said and you know you can only spread

12:12Yourself so thin too so it's obviously your your strategy has obviously worked out well for you so so from that time then when you started buying to retire when did you retire six years ago 55 okay you're 55 and what what did you accumulate during that time how many properties what was that how many properties during that time we we're we're holding a couple dozen places okay yeah okay and they're all paid off and so what I guess what is the typical deal look like that you were you were doing during that time period Well my plan was I wanted to

13:01Own my my whole neighborhood okay that was my that was my plan and we're not too far from that now and everybody knows that I buy and when they when their folks or anybody passes away in the old neighborhood they come to me first yeah nice good way to pick your neighbors yep so yes it's very interesting because they they don't want to deal with anybody but me and it it works out nice yeah you know they know how they all know how hard I worked so that helps too yeah and they say you should Niche down so if you're you're owning a whole neighborhood then you know you don't have to travel far to to manage it

13:49And you know the area you know the inspectors you know all that right well I listen to a lot of lot of podcasts and everything and I just used the the guy that I listened to a little bit was is Grant Cardone yeah he would hate what I do but he likes everything under one door you know roof right which that's fine but you know I just never liked picking you know I have a lot of duplexes and when someone moves out I've got you got to mix person personalities and I never cared for that because you hope that they like the neighbor and all that so I did I did I

14:38Did I got my duplexes but I have mostly single family homes okay and it it's worked out great because all my properties are within a half a mile from each other if you do a circle so it's all together and you you manage them yourself I manage them and the whole shot I I'm not going to talk bad about people but when I was on when I before I retired the people I worked for asked me to do sales and I I did that with the garbage company and I'm not into dishonest people and I met too many management companies that

15:26Are not in it for the landlord they're in it for their self yeah and I just I just got so brokenhearted when I would go to try to sell them our our services and they'd say Hey you cut this we'll give you our business if you give us what you're going to save us and I said what about the landlord you know and we are the landlord and I just didn't like that yeah yeah wow so what did that involve I think a lot of people are afraid I mean you've got you know 25 Properties or so and and what is it involved to doesn't that optimize all your time or monopolize all your time no it does not in the summer yes I'm I'm

16:15Pretty busy I like giving a good product out there I guess I'm gonna say I try to correlate myself with a McDonald's a Burger King and that everybody thinks that they're in business to sell hamburgers look where their property's at Prime Property yeah and I fix my stuff up really nice and I shouldn't have a problem for 10 or 15 years wow so all I have to do is maintain and I have great tenants I really do yeah and and how do you select the tenants you just is it based on a certain criteria I you know you might think it's weird but if if you pull up and you want to

17:03Rent from me and you have a really nice car first thing I ask is if you have a car payment before anything yeah and if you do I just usually shun you away because if something happens hard times the car payment is going to come before my rent and I don't want that interesting yeah so that's one of the first things I look at yeah probably You' probably learn different things to watch for over the years to to to select a better tenant base than typical yes yes it it's been fun though you know like I said if you you could usually read people you know and if they're GNA lie to you right

17:51Off the GetGo you're not going to get your rent yeah and I keep my rents reasonable that's another thing I got a lot of buddies that have a lot of properties and they they they're a lot higher than I am and they holler at me a lot but my goal is to keep you yeah I know what my numbers need to be I'm not in this to be greedy I know what I need to make never cared what anybody else had yeah so I think that's the secret too that's great stay focused on your own yeah yeah so what can you share a little bit about what what you target like what does a typical the numbers on a typical deal look like for you like what's an ideal deal well I don't

18:40I I if I can't average 20 25% I don't even do it okay that's that's what I look at that's you know I want to get my return back quick so 25% so your annual rent needs to be 25% of your Allin purchas rehab is that okay y wow that's good so so can you walk me through like one of your deals then what what is that so you're buying it for 100,000 just figure this one out okay so I just purchased two properties anyway I ended up getting two houses for $100,000 one is a four bedrooms two full bass

19:28And a full basement I put I want to guess $1,500 into that property and I got it rented out for, 1450 a month 1450 the house that's next the house this next door it needed a lot of love so anyway my wife and I we went through it we had the vision of what we wanted this to look like so anyway we totally gutted this house we put 35,000 into it now when you say these numbers you got a figure I'm not counting my labor and everything okay that's just material and you're doing all the work yourself pretty much I'm doing all the work myself

20:17We gutted this house from the the studs we put new windows Electrical Plumbing new siding everything well anyway we've got that one rented for 1350 a month so on that 135,000 it's almost bringing in $33,000 wow so there you go that's incredible and that's where do that look at and well now I have six houses on the same street is that what is that jol okay jolet yeah so it's sort of a working class area that correct okay yeah and that's man that is an incredible Roi and you know like you said you got to put the Sweat Equity into it you've got that into it but you

21:05Know it's you can't touch numbers like that typically so that's that's great so when I guess I'm curious because a lot of people I think have a similar strategy where they're working their W2 and they're buying rental properties with the intent that one day they're going to live off the income from the rentals at what point did you feel like you were secure like if you if you had lost your job you felt like okay I I've got enough now to where I think I'm I'd be okay oh that was probably when I had four or five places what I looked at is what I brought home every week from the regular job if I could generate that much

21:55From four places would I get you know each house for per week why do I want to work for somebody else yeah so anyway that that was my plan but since they were doing so well I just kept working because I I enjoyed my job like I said I my buildings were my passion they were like my little babies yeah and you know I could have retired probably when I was 30 but you know I just I just like nice things you know so the properties worked out very well yeah you know but that's what I always looked at what am I bringing home from my paycheck every

22:43Every payday if I can generate that from my my buildings I don't want to go to work right you know CU my goal was from this other lady too is she always kept saying you want to make money when you're sleep sleeping and that's that was the goal yeah you know yeah I think a lot of people kind of find themselves in that same situation where they have a goal to where they they feel comfortable but they'll still continue to work after that because what are you going to go to a beach and just like hang out you know so if you can still accumulate some more and get a little more security and and comfort there it just allows you to have a little more in the future I guess so I think that's that's interesting though it

23:31It you had the ability to walk away from your job very early on it provided that but you just decided to stay until until retirement really yeah yeah so we're kind of deep in the heart or deep in the throws I guess of of this covid panic and you know craziness that's going on what is your feeling around your real estate at this point like do you feel like you're going to change up your model at all you've been through obviously a lot of ups and downs over the years how do you how do you think about it well with that said I would hope with this situation going on that everybody

24:20Would sit back and really dial in their life and say some prayers to people people that aren't fortunate because this is really really going to hurt a lot of people and in the real estate game if you're prepared and you got some money set aside the people that are all leveraged out they're going to be hurting and I'm not in that position I'm blessed I always listened to what my dad always used to tell me he he said he his his opinion or his voice to me was save your money like you're working for yourself at all times he said because nobody

25:08Cares about you and that's so true with these companies what they're doing to the young employees today and I don't think that they realize what's going to happen and today's market everybody's going you know the conventional pensions are gone away Kirby yeah and if they're going to rely on a 401K they're never ever going to retire never so they better wake up but the people that are leveraged out with properties if they can ride through this that's great but a person let's say like you or me if you're ready to jump you're going to buy them 50 cents on a dollar it's coming yeah oh a

25:57Even had nothing on this one really you feel like the real estate Market's really going to feel it yep I really do yeah yeah and now if you're talking on my tenant side I I I am wholeheartedly telling you that I have great tenants and if if something happens that they can't take care of me I'll take care of them we'll ride it out together because I'm fortunate enough when you don't have no mortgages you can you can absorb a little bit how how would you recommend setting that up because I think other people will be in that same situation so that you know you help them but also at the same time don't get taken advantage of because I think it can become a slippery slope once

26:46They realize you know I I it's it's not mandatory for me to pay rent maybe or there's there's flexibility here so how do you how do you set something like that well again I I I can't stress enough how I have really good tenants they're hardworking people we could we'll talk about it if that time comes nobody's ever approached me as of yet but I I would work with them on you know you tell me what we can do and you know let them tell me and then we'll go from there because I I have people that I think their word is their word you know I'm I'm I'm

27:34Still old school and when I pick tenants that's kind of what I look for yeah so that's great that's great and I I think that's the hopefully there's more people who are willing to do that there's one approach that I heard recently where a guy recommended you know give a month or two of of free rent maybe but you could also work it into a longer term payment plan so if they've got a year left of a lease or they sign a new lease saying okay you know the first month's free but we'll work in at least partial payback over a period of time so that you know you're not out that money if you need it but yet you're giving them some ability not to be evicted right away for not paying when they've lost a job or or some other issue so I think it's smart to to keep

28:22Great tenants and you know like you said if they're if they're Liars or they're not good tenants to start with then you you know it's probably not going to be incentivized to want to keep them around anyway but but you've chosen some good ones so I'm curious you've done this since the late 70s what what is one of the worst deals you've done and what's one of the best deals you've done and what attributed to that well I haven't had a worst deal I I haven't the one of the best deals I I've had is the one I just explained to you about with the two houses wow okay I I actually brought some younger guys that wanted to get into this game over to

29:11Look at them and they shunned away from them because of the little house and they they didn't have the vision yeah and they just need it says too needs too much work I said but look at what you could have you you know and they didn't so that's how I ended up with those so that was a good deal I mean you tell me where you can almost make three grand on 135,000 yeah and what's it probably a praise for at this point the two houses together right now they're probably 250 easily easily yeah and we bought them last October okay yeah okay y so what attributed to that great deal is just having the vision being able to see what others can't see

30:01Well I I don't think a lot of people have the vision and they didn't they don't you know I think people want to move too fast they need to slow down yeah you know I mean like I said if you if you talk to a lot of people on how I did it they'd say I'm nuts you know if you got three4 million do sitting there in equity they're going yeah but look at what you could have yeah and again I can't stress it enough maybe I'm stupid I don't know but I don't care what anybody else has that's right you know and I think we get caught up into that rat race and just keep rolling and when's enough enough you know I just wanted to always I just wanted to always be

30:51Comfortable I never cared what the next person had so I think we get caught up into that yeah you know absolutely yeah and it's obviously paid off for you over the years I mean accumulating that much I mean if you've got 25 properties that's that's a lot of equity when they're all paid off and a lot of security and then obviously you're not paying mortgages so it's a ton of monthly cash flow that's coming in as well and so it's it's tough to argue with that position you know like maybe you could get there a little bit FAS by leveraging maybe but obviously this this this this scenario has worked for you so you know it's tough to argue when you've you've done you've accomplished

31:40What you've accomplished so so I think it's great what's what's one piece of advice that you wish you had had before you started doing this one piece of advice before I started doing it I I had nobody to guide me I I when I jumped into this my family was not involved in any of this they didn't want to be involved in it when I started it I had this goal I asked many people that used to come into the gas station that I knew had money and I said would you just like to invest with me here's my plan and I I got no well you you got to realize back then

32:29The banks were paying 15 16% on CDs so then in O in ' 08 the market crashed well by then I had like 10 properties and all these people that were getting 2% on their CDs came to me and said hey can we invest with you and I said hell no I says I I needed you when I was broke not now so I wasn't G to let them get on the gravy train now yeah so yeah I could have had a lot of investors back then but they got to get on when it when I was broke yeah so that's the only that's how I started it wow well it takes a lot of courage to jump in without a mentor like that and just

33:17Have the vision and execute on it and it was a a long-term plan and it sounds like it's paid off so I I really appreciate you know hearing your story and you know I think it's very inspiring for people to know that it's possible that you don't have to BU you know my last guest I interviewed Eric Upchurch he's a a younger guy who purchased 570 doors last year and he's he's super aggressive yeah yeah and and there's a lot to be said for his strategy and there's a lot to be said for your strategy and I think there's pros and cons to each and I think there's totally different risk risk factors to each as well and so I think I always have admired the more of the old school way of investing and you

34:06Know I I've always thought my my goal personally was to build a portfolio of 24 properties that each paid 500 a month and I thought man that's that's great you know because if it's free and clear 500 after all your expenses and set asdes that's enough to live on for pretty much anyone and so you know goals shift and over the years but you've stayed you've stayed at it and you're such a testament to to what real estate can do for somebody so I appreciate you sharing your story today no no problem I I just it will work if you stick with it and my whole my whole premise behind it all was I wanted to spend as much time as I could with my family and it gives me that opportunity now because

34:55In the end that's all we've got is our family yeah so you know yeah well you've done a great job with yours I know your daughter well and she's she's great and I love your family so thanks again for taking the time today and I appreciate it thank you very much sir