In this engaging episode, host Corwyn J. Melette welcomes Scott Stanfield, a PhD in engineering turned successful real estate investor and author.
Scott shares his compelling journey from the Air Force Research Labs to building a $3 million portfolio of single-family homes. He discusses the benefits and challenges of turnkey rental properties, the importance of financial literacy, and diversification into commercial real estate.
With insights from his book ‘Passive Profits: The Turnkey Investor’s Guide,’ Scott explains how his analytical background influences his investment strategies and the use of free tools to optimize financial success.
From using Google Sheets as investment tools to navigating the complexities of turnkey real estate investing, this episode is packed with actionable strategies for anyone looking to elevate their real estate game.
Key Takeaways:
- 2:15 – Single-Family vs. Commercial Investments
- 5:45 – Importance of Diversification- Explore why diversifying your real estate portfolio is crucial for long-term success.
- 10:20 – Self-Managing Properties- Insights into the challenges and benefits of managing your own properties.
- 15:30 – Tenant Management Strategies- Scott shares effective strategies for managing tenants and addressing common issues.
- 20:00 – Challenges in Turnkey Real Estate Investing- A candid discussion on the obstacles faced in turnkey investing and how to navigate them.
- 25:10 – Using Google Sheets as an Investment Tool- Tips on how Scott utilizes Google Sheets for managing investments and tracking performance.
- 30:00 – Educational Resources- Scott highlights the importance of educating yourself and others about real estate and the resources available on his website, scottastanfield.com.
Connect with Scott@:
- Website: https://scottastanfield.com/
Connect with Corwyn@:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: EXIT Realty Lowcountry Group
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you’re looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
EXIT Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call EXIT Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.
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CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning and great morning, guys. Welcome to another fabulous episode of Exit Strategy’s radio show. Hey, I am your host, Corwyn J. Mallette, broker and owner of Exit Realty, Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time, look here. If this is your first time showing up for this show, you are in for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education. Guys, we are legacy building. That is what we do. So, guys, quick shout out to all you who listen from one end of the spectrum to the other. Look here. If some of y’all just happen to catch us on the dial as you were going through the day, again, thank y’all for tuning in. But those from Monkey’s Corner all the way down to Hollywood, what you know good, we appreciate you guys tuning in and listening to us faithfully. I am remiss if I don’t say thank you for taking the time out of your lives to make this show a part of it. For our listeners that listen around the globe, on our podcast platform, again, thank you so much. And, guys, if you ever miss an episode, there’s something in today’s episode that you need to go back and get, I want you to go to our website, exitstrategiessradioshow.com, so you can pick it up.
All right. So, guys, today we have been on this role of bringing. So, first of all, when I saw and read his bio before we had a conversation, I saw read his bio. The first thing that stood out to me was P.H.D. I love like the doctor, if you will, of real estate investing. I’m like blown. I’m like, I’m loving this already. But his P.H.D. is in engineering. So what I took from that, look, we got the doctor of real estate who knows how to rebuild the deal. I love it. I love it. The concept was incredible to me. So I have today none other than Scott Stanfield. Now, Scott is a P.H.D. with a degree in engineering and extensive experience in the research science field. So he has been creating and figuring out things. I can’t wait to hear some of that today. So, Scott,
SCOTT:
I bore you, actually. It’s not as exciting as it sounds.
CORWYN:
Thank you for being on the show with us today.
SCOTT:
Thank you. Thank you for having me.
CORWYN:
You’re quite welcome. So if you don’t mind, give our listeners that 50,000 foot view of who Scott Stanfield is.
SCOTT:
Yeah. So I mentioned it already. I am an engineer by training. I finished my bachelor’s degree in 2005 and I had been working with the Air Force at that time as a co-op, which was a great opportunity. And I was approached about continuing on and trying to complete a P.H.D. And so I did that in engineering and I started working at the base. This is Dayton, Ohio, in the Air Force Research Labs. And I spent a lot of time there. I got to work on a lot of very interesting projects and in different things like that.
That’s how I got started professionally. And it’s important because it’s who I am. I’m very analytical. I like putting models to anything I do. And so that training has helped quite a bit that way. And then at that time, I started working. That was really the first time in my life I had extra money. So that’s when I got started with investing. And I spent a lot of time researching. It was really real estate that I focused on early on. That’s really my beginnings. And since then, I invest in all kinds of stuff. I’m interested in stocks, options, really, I guess that’s a defining trait of me. I’m interested in everything. So I will research. I read about stuff. I put together models. I study the models. I look at what can I learn from those models? How can I create actionable items from those models? How can I use those models to lower my risk? How can I use those models to maybe diversify my portfolio? Whatever. That’s really a lot about me. Very analytical.
CORWYN:
For our listeners, Scott is an author. All right. So he dropped this bit. So we’re going to pull some of this out of him. So, Scott, you’re an author. Book, Passive Profits, The Turnkey Investor’s Guide. So if you don’t mind, what was your like, OK, I need to write this book. What was that moment that you were like, wait a minute, somebody needs to hear this because I don’t believe they’re getting this elsewhere.
SCOTT:
Yes. It really just wasn’t one moment. There were a lot of little pieces and parts along the way. It’s like I needed to actually put this together. So I started investing in real estate and I was very busy. I didn’t have a lot of time to do with the more traditional route, which would be sourcing your own deals, outsourcing, renovation, managing that. Right. That takes a lot of time, a lot of effort to do. And if you don’t do that right, you can lose, obviously, a lot of money. And so I needed to find a different way that worked with my schedule. So that’s when I started sourcing deals through turnkey providers. That’s how I got moving on that. And then I was able to do that well, minimize risk. And I was making good money from it. My portfolio was expanding quite rapidly. And this is starting back pre-COVID 2017. And so I was excited. So I started telling family, friends about it. And they’re like, oh, how are you doing? How are you finding these houses? How are you putting these portfolios together? And that’s actually the beginning of wanting to start putting together something to share. So the only way I can really do that is create actual checklists, show all of my criteria, everything that I do. And so I did that and I did it initially to share with family and friends. I actually helped multiple number of friends get started with their own portfolios. And that’s actually very rewarding. And that’s the whole motivation for writing the book. So what I did was I was looking at what else was out there on turnkey real investing. And a lot of it was written by turnkey providers. And I wasn’t finding much from an actual investor. And a lot of them were reading more.
Hey, all you got to do is just call us and we’ll take care of everything. It’s like, no, there’s so much more to think about. And so I should write a book to fill in that little niche that wasn’t being covered.
Provide not just my story, but also the math, the financial piece of it. And then, of course, the more intuitive stuff and tell people how all that goes together. Show people what my actual criteria is, put a real plan out there that people can follow and let them also maybe do something like this. Because I can’t believe I’m the only person out there that has a busy schedule that doesn’t have the time to really go the more traditional route. And so that was the real focus behind the book, why I wrote it and why I put it out there. And now why I’m trying to reach out to people so they know about this. A lot of people working with real estate, you’re not familiar with it. Very true. So your first property was a rental and it was a turnkey rental.
CORWYN:
So if you don’t mind, first, let’s define turnkey for our listeners. Give us a little bit about turnkey.
SCOTT:
Sure. Actually, I had bought two luxury condos and self-managed initially. And that was 13, 14. I sold those and went turnkey because they were just way too much time. So I made a little money on that. Not a lot, but I did fine. So turnkey started in 2017.
And for people who don’t know what a turnkey property is, it’s really the same thing as you would see for any rental, except that how you’re sourcing it from a turnkey provider. And what a turnkey provider does when they go and they market for houses, just like you would read from any investment book. They’re sending out direct mail, that sort. They’re finding deals that they can then renovate. And then after renovations, they’re going to market for a tenant. And then once they place that tenant, they have usually in-house property management that’s going to take over managing. And at that point, they’re going to sell that property to an investor client like me or any other investor. And so from the investor side, from my side, what it did was it outsourced most of the rental business in one transaction. That doesn’t mean you buy and don’t look at it. You still need to look at it every month. You have to stay on top of it. Otherwise, it won’t be as profitable as you want. For people who are not familiar, that’s what turnkey properties are. That’s what turnkey providers are. You can find them in any metropolitan area. That’s one of the benefits. You can build a portfolio really wherever you want as long as you find good providers. And that’s really the key. And that’s not as easy as you would think. But it can be done. I’ve done that. I’ve done well with it. Again, they operate in every market and can be very advantageous for people who, again, busy schedules or just live in a local area where the price point’s high and rental vesting may not be as easy.
CORWYN:
So turnkey rentals, for our listeners, guys just want to bring this back around. It’s buying and it’s outperforming. A lot of times people, and please correct me in this if you disagree, but oftentimes everybody wants to not only invent the wheel, they want to build a car too. And turnkey rental, somebody’s already invented the wheel. Somebody’s already designed the car. They’ve already built the car. All they need is somebody to drive it. Correct. Literally, all you got to do is take over the vehicle that’s already been put together. The property’s been acquired.
SCOTT:
Right. And just like a vehicle, you better look at it. If you’re buying a used car, you got to look at this. Isn’t just, oh, here’s one I’ll buy. No, no, no. You need to have specific criteria. There are certain sources of risk that come with investing through a turnkey provider. You need to know what those resources are and you need to have a plan on how you’re going to minimize those resources. If you do that, then yes, you can find really good properties that perform very well. And it’s just like you said, you’re buying a car. It’s operational, comes with management. Everything’s there. It’s just you need to buy it and then you need to manage it. So, yeah, that’s a pretty good analogy.
CORWYN:
Well, you know, we do what we can, Scott. So one of the things also, this is your model now. So you figured out, OK, wait a minute, I don’t need to manage every piece of it. Again, you’re an engineer. You figure out when you see the system and see how the system works. You ain’t got to redesign the system. You just want to make sure that it’s efficient and you figure out the efficiency is there. So boom, you’re golden. So you own a number of these now, a portfolio now, roughly about how many properties and what property value?
SCOTT:
There’s currently twelve, three million dollar property value. Loan to value ratio is actually below 50 percent now. So doing quite well. Yeah. And it’s gone really well. I have sold a few properties, but that’s normal when you’re trying to expand. Sometimes there’s good reasons for selling. Sometimes there’s good reason for maybe refinancing some of the capital out and moving capital into other property or other purchases, what have you. But yeah, and they’re all across the country and they’re in which helps, again, diversify my holdings and stuff like that.
CORWYN:
So what you’re currently doing is primarily single family. Are you invested in other multifamilies or other commercial or something of that nature or all single family?
SCOTT:
Single family. So I have looked at commercial and I don’t dislike commercial for a long time. I was trying to actually find a commercial deal, but the price per door was just not advantageous for that asset class. And that asset class was for a long time closer to a bubble than single family. I think that’s still very true. But the point is, is that I invest what the market gives me. And at the time, single family made a lot of sense. And it still does, except that, of course, interest rates are higher and there are some things you have to think about. But the reality is single family makes a lot of sense. And even within single family, you can go a long way towards looking at different asset classes by looking at price point where they’re located at, et cetera. And so you can diversify that way just within single family. So right now, yeah, it’s all single family homes, but it won’t be in the future. It really depends on what the market is giving you and what is a good investment. That’s tend to be where I go to now turn to providers. They do have duplexes, quadplexes of that sort. So you can get into other asset classes. But for me, I’m just single family right now.
CORWYN:
OK, well, that’s good to know, because a lot of our listeners are entry level, something opposite. And some people are just trying to figure out where to get started. Some people are trying to figure out, hey, do I even want to do this? Because you made mention of something like early on where you self managed the first couple of properties and quickly figured out I don’t want to do that.
SCOTT:
Very quickly, it’s very time consuming. And it’s not bad. It’s just when I started, I wasn’t the best landlord. I had lease that sort. But you have to really get put into the experience, I guess, and learn how to harden up. I was a bit soft. And that lease is for your own good and for the tenants. You really got to enforce the lease to the letter of the lease.
And I wasn’t the best at that early on. Now, I improved. I improved quickly out of necessity.
But I realized that, no, this is not the way to do this. I don’t care if all the real estate gurus tell you to do this. This isn’t how I want to do it. And so that’s when I went a different path.
CORWYN:
And one of the things you said in there, first of all. That document between you and the tenant, if you are a landlord, essentially are your rules of engagement. This is what I’m going to do. This is what you’re supposed to do. As long as we do this and everybody’s in agreement, then we continue to be engaged. And when we don’t, then we have an issue or problem. But what I have seen, Scott, over my years of doing this is my work with a number of investors. A lot of them, unfortunately, like you said, are a little bit challenged, if you will, in that particular arena. People have issues. I can recall an interview some time ago on this show where somebody said they don’t want toilets. Because, you know, you don’t want a property, you don’t want toilets. You want commercial space or what have you. You don’t want toilets. When you got toilets, you got people and they stuff. You know what I’m saying? And their stuff is, OK, I can’t make the rent because my car is down. It’s in the shop and I can’t afford to pay because I got to get my car at the shop. Well, I mean, you know, things become very hard because you try. Your heart needs you to say, OK, look, let’s try to figure out how to work with you. Right. Because the next month my dog had to have an emergency surgery.
SCOTT:
There’s always a reason and they will keep giving you a reason where it gets hard is when you see they have children. And so this is the children’s home. That’s when it’s tough. That’s when I was like, I need to really let a professional handle this relationship for me for my own peace of mind. But, yeah.
CORWYN:
Cross it off your list. I’ve done it. I’ve done it. I’ve been there, done that. I don’t need to do it again. Yeah. Don’t even send me the T-shirt. I don’t want it. I get it. So Scott, Tell us about how you educate others in this realm, in this field. You have a website and all that stuff. You do that, if I recall correctly, under Tuxedo Press, correct?
SCOTT:
Yeah. The book I wrote, I put together a publishing company for called Tuxedo Press. Yes. I am doing all these activities with trying to reach out and help people through that publication. And, yeah, I have a website and stuff.
CORWYN:
So your website, how can people find it and get connected to you? Let’s make sure we get that information out.
SCOTT:
Yeah. So it’s easy to find. It’s just my name. So it’s scottastanfield.com. And it was done that way on purpose because it’s just simple to remember, right? At least I think it is. I’m probably way wrong, but the goal was simple. So that’s the website. And then there’s a lot of free resources there. I have a blog. I try to keep things updated. Something in the book becomes a landquake. Maybe my plan changes a little bit, and it will. The market’s dynamic. The market’s always changing. And so my plan is adaptable, and that’s what I do. I share it there. I have a lot of just free resources I wrote in Google Sheets because it’s something that everybody can have for free. That’s why I did it in Google Sheets instead of Excel, for example. And, like, for example, there’s ways to do all the math for you. You just put the numbers in. It tells you cash flow, you know, return on cash. I even have things like effective tax rate for people who are a little more advanced in trying to look at portfolio fit, maybe that route with a purchase. I have another Google Sheet there where you can adjust the different parameters for metropolitan areas. So this would be, like, rent to price ratio. Click filter, and then it will list all the ones that actually meet your criteria. That’s intended to help find very specific markets. Maybe you’re interested in cash flow markets. So think about a lot of the Midwest is that way. Of course, appreciation markets would be more like San Francisco, New York. There’s stuff in between there. And if you were to look at the economic parameters, that will help you decide which one it’s going to gravitate more towards. And so that tool is really meant to help put in your parameters and help filter out and find metropolitan areas to focus on. And there’s other tools like that on the site. And it’s all free. I don’t charge for any of that. It’s just there. You copy into your drive, and now you have it. And I do need to update that metropolitan selection tool. I actually have the data. I just got to put it together and update it. But what’s there is still sufficient. It doesn’t change that quickly.
CORWYN:
That is awesome. So you provide all these tools and resources to consumers to help them, if you will, get stuff in order. For our listeners, guys, I’m checking out Scott’s website. It’s very crisp. It’s clean. It’s easy to navigate. So I want you all to go to scottastanfield.com. I want you all to hit the website up and check out the content, the information that’s available to assist you as you seek to, if you will, navigate. Scott, you also have a contact option for people to get in contact with you.
SCOTT:
Yeah, I do. On the website, there’s a way to reach me through e-mail, and that’s actually probably the best way to find me. I always have e-mail open. I always respond. I know it looks like e-mail capture, but I actually don’t run any drip campaigns or anything like that. So it’s meant for a way people can reach me. So, yeah, if you have questions, just send me an e-mail. I will answer.
CORWYN:
So you’re both available and accessible, and that’s incredible to me.
SCOTT:
Well, that’s the value of investing, right? You actually reach a point where you have the option to work or not, and that you choose not to work. You have a lot of time that you can then pursue other passions, and that’s where I’m at now. Yeah, I have the time. So if people send me e-mail, yeah, I can respond. It’s nice. If you’re wanting to get started, you have questions, just ask.
CORWYN:
So let me come around, Scott. So for our listeners, Scott, if you can reach Scott, please go to the website. You can contact him there or send him an e-mail, scott@scottastanfield.com. Easy peasy. He’s going to respond to you because he keeps his e-mail open. So look for that response. But, Scott, I always like to ask guests this question, and it’s the hindsight question. I mean, really and truly, we don’t know until we’ve done what we would have done differently. So if you had the ability to go back and rewrite some of what you’ve already done, what would you have changed, if anything at all, to help you get to this point where you are sooner?
SCOTT:
Yeah, so I obviously know more now than I did when I started Turnkey Real Investing, and I did make a few mistakes. Everybody does. If you’re doing something, you’re going to make mistakes. I did make mistakes. And if you look in the book, a lot of the stuff that’s in the checklist that navigate through these different business processes, those are solutions to my mistakes. That’s really some of the hindsight stuff. Now, as far as the book goes and what I wrote there, I feel really good about a lot of it. I actually feel really good about all of it. I’m sure there are sections where I’m like, you know, maybe I could have wrote this in a way that people might understand a little better or something like that. But that’s really the biggest thing. Otherwise, I think I really nailed it. I put a lot of effort into that book. I wrote everything I could think of that was relevant to Turnkey, all the different fundamental economic type stuff, your market cycle. And then, of course, how all that classes into my purchase criteria and how I manage, how I scale my portfolio. I realized that this is built on models that are looking at financial forecasting, 30 years, answering questions and not answering like, oh, I should do this or not, but providing dollar amounts and things like that to show why you should. In terms of, should I say, sell a house after 20, 25 years because I’m trying to avoid some of the expensive maintenance, that sort. So I have projections on all that and realize that those projections are what I use to determine how I should manage the portfolio. So that’s where it comes from. And so maybe I could have done better explaining some of that in there. But for the most part, I think it’s pretty good. And I was trying not to bog the book down. So a lot of that goes into the appendix. And then really the nuggets are what’s in the book.
CORWYN:
So the other resources and stuff you have, Todd. Awesome. So, Scott, we have quickly gotten to the end of today’s show, man. It’s been awesome having you on. And I really appreciate you taking time out of your busy schedule to be on with us.
SCOTT:
Thank you for having me. Like I said, I really want to reach people. And this was a great opportunity for that.
CORWYN:
Awesomeness. Awesomeness. So for our listeners, guys, look, y’all go check Scott out. He’s talking about something. Scott, I want to thank you for even, if you will, introducing this space because people sometimes miss it and don’t. Don’t they miss it? The turnkey investment model is a model that’s sustainable because everybody doesn’t have to do all things. But we seemingly have gotten ourselves to a society where we believe that if we don’t do all things, it wasn’t done. If you don’t change your oil yourself, it wasn’t done. If you don’t change and bleed your own brakes, they won’t change. The reality is bringing in the professionals allows you to keep things going and moving the way they need to with less of these.
SCOTT:
Makes it scalable.
CORWYN:
Yep. It makes it scalable and more. Very much. So Scott, thank you so much for that. And thank you again for being on the show with us today. Thank you.
SCOTT:
Thank you very much.
CORWYN:
So for our listeners, guys, I want to thank you for taking the time out and tuning in today. Y’all know how I feel. Y’all know what I say. Y’all know I always put the two of those things together. And I give it to you this way, which is to tell you I love you. I love you. And we want to see you guys out there in those streets.