Trading His Man Cave for a “Money Cave” That Makes THOUSANDS a Month

Scott:
Welcome to the BiggerPockets Money podcast, where we interview Ron Curtis and talk about his journey from debt to sprawling, fledgling, growing empire. Hello, hello, hello. My name is Scott Trench, and with me today is James Dainard from our sister podcast On The Market.

James:
Thanks for having me back, Scott. I like hanging out with you talking about money.

Scott:
Yeah. Always very fun. Thanks for coming back. James and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe that financial freedom is attainable for everyone, no matter when or where you’re starting.

James:
Whether you want to retire early and travel the world or go on and make big-time investments in assets like real estate or start your own business, we’ll help you reach your financial goals and get money out of the way, so you can launch yourself towards your dreams.

Scott:
James, I was really impressed with Ron’s journey from debt to accumulating tens of thousands of dollars in wealth to house hacking, to building an empire. I mean, this guy is on pace to take over the world one day and it won’t be that long in the distant. It won’t be in the too-distant future when that happens.

James:
Yeah, he is addicted to the grind. I love it. He’s just going, going, going. He actually made the best step. He really educated himself about debt rather than chasing the dream, he figured out how to get to the dream first.

Scott:
Absolutely. Well, we have a new segment of the money show called The Money Moment, where we share a money hack tip or trick to help you on your financial journey. Today’s Money Moment is if your gas tank is running low, avoid filling up on a Thursday. According to new data from GasBuddy gas tends to be cheapest at the beginning or end of the work week on Monday or Friday, and tends to be the most expensive on Thursdays. I did not know that. I was actually thinking about filling up today. Today’s a Thursday, and I’ll have to wait till tomorrow. Ron is a financial literacy coach who also works in real estate and has a full-time job in the government. After smashing $10,000 in debt, he created a real estate business, which allows him mostly passive cashflow through leveraging VAs in AI. Ron, I’m so excited to have you here on the BiggerPockets Money podcast. Thanks for joining us.

Ron:
Thanks for having me. I’m excited to be here as well.

Scott:
Awesome. Could you get started by telling us a little bit about yourself and maybe giving us a quick overview of your money story?

Ron:
All right, great. My name’s Ron Curtis. Some people like to refer to me as Dr. Financial. I’m born and raised in Washington DC, I attended Virginia Commonwealth University, VCU Rams in Richmond, Virginia. I graduated with my bachelor’s in human resource management specializing in business. Pretty much what I do now, I consider myself 9:00 to 5:00 entrepreneur. I have a full-time job. I work for the DC government, specifically with project management and contract oversight. From the time I clock out at 4:30 or 5:00, I’m taking calls, helping people with credit, taxes, and teaching them how to create different ways of passive income and additional revenue streams.

Scott:
Awesome. My understanding is that upon graduation from VCU, you immediately became rich and that was the end of the story, right?

Ron:
In a perfect life it would be, but that’s not actually what happened. It was a little different.

Scott:
Yeah. Would you mind telling us a little bit about that and how you got into debt, for example?

Ron:
Yeah. I got out of college. I got my first job landed at 50K as an internship. That turned into a full-time job, which was a blessing. I was living at home with my parents, so I didn’t have a lot of bills. One thing I started doing was using my credit cards. I have a passion for teaching people financial literacy specifically started with credit and the reason being is because right out of college, I got $10,000 in the credit card debt going to one of DC’s most popular streets, which is U Street, going to happy hour bars, traveling, taking trips, and things of that nature. Before I knew it, my monthly minimum went from $200 a month to $750 a month in a blink of an eye.

James:
Ron, I love that you are teaching financial literacy because a lot of times when people get in your situation, they get into an internship, they get them in college, or they get into a job, they haven’t been taught what the cost of money is, what a credit card actually costs you, and why you should use it very sparingly. Even student loan debt, same type of thing where it just racks up. As we get out of college, we have so much debt racked up. It’s like how do you get out of it? What steps did you take once you realized how much your payments had gone up and what kind of debt you were in increasing, what steps… I guess, when was the realization that you had to make some changes and what steps did you take?

Ron:
That’s a great question. I would give all the credit to one of my good friends named Adam Duncan. He is actually from the UK. He was a contractor that worked with me. He had 30 years of experience in finance prior to coming over to the United States and working in government contracts. Something that always stuck in the back of my mind. He told me he bought two Audis on credit with the credit card, and he bought flats for his parents in the UK. I didn’t know what a flat was at the time, but I’m like, “You did not buy two Audis on the credit card.” I thought he was lying. Literally, that same day when I got that notification from Amex that my minimum payment went up to $750 a month, I immediately went to Adam and said, “Hey, Adam, this is not work-related. I have a question for you.”
He took me into the conference room on my lunch break. I didn’t eat lunch that day, and he did something that changed my life forever. What he did was he made me write down all of my credit cards, what their balances were, and what their APR percentage rates were. He made me add them all up. Let’s say easy numbers. I had five credit cards at 20% interest rate each. With that $10,000, when you added it up, he said, “You’re paying back 100% percent interest on every on the $10,000 that you borrow. What that means is you’re paying back a dollar for every dollar or double that you borrow.” He said, “You had two options.” He laid out something called a balance transfer, which I’m pretty sure you are familiar with, and he also laid out a debt consolidation loan.
With the balance transfer explained to me, you can get pre-approved for a credit card, take that balance $10,000 on your five credit cards and roll it over to that credit card for a nominal fee, and you pretty much divide those payments by 12 months. When we did that math, I think it came down to around $600 to $700 per month. That was not feasible or realistic with my $50,000 a year salary living in Washington DC.
The other option that he gave me was a debt consolidation loan, and the way that he expressed it to me was, “You need to go buy cheaper money.” I said, “What does that mean?” All in all, what he did was he showed me the option of how to go and get a debt consolidation loan and pretty much get a fixed interest rate under 10%. I believe it was at 9% unsecure loan. The bank cut a check for me that same week for the same $10,000, and they took $200 a month out of my account, $100 every two weeks, and I never felt it since. Since that day, I taught my friends who were going to party with me and traveling with me as well. It worked for them. Then I was able to launch a successful credit repair education business.

Scott:
That’s awesome. How long did it take you to pay off that initial loan?

Ron:
I believe it was a five-year loan, three years in. If that’s happened in 2018, 3 years in, I had a Chevy Impala that failed. The transmission went on me. I was underwater on a car, the transmission repair was more expensive than actual what the car was worth. I actually had to roll another $3,000 into it. But as of right now, that debt is totally paid off. I would say I was paying a little bit extra every now and then, but I would say less than five years, less than the loan term. But in my opinion, that was a great trade-off. I think I might have gave them additional $1,500 to $2,000 over that five-year period to allow me to breathe again and get my head above the water.

Scott:
How do you feel like there’s a lot of folks out there in your work that… Are you finding a lot of folks have come through a very similar situation? Or is that talked about a lot? How common is the situation you found yourself in, do you think?

Ron:
All right. It’s very common, especially in the United States. We live in a debt-wealth society. With my credit restoration business, I’m looking at hundreds of thousands of credit reports per year. I do free credit consultations for all of my clients and if there’s one common denominator that I see, everybody has high-interest credit card debt. The reason being is, I don’t believe anybody has bad credit, people have cashflow problems. If you had enough money to pay off your bills, you would in the simplest form. But when you have inflation, you have the price of gas, rising groceries, things of that nature, and your salary is not rising or you’re not getting a raise, it’s going to be a deficit on one spectrum.

Scott:
What was the trigger in here… That was a great moment that got you to pay off this debt and refinance and that was really helpful from this individual you referenced earlier. What was the aha moment in this process where you decided, “Hey, I should become a financial literacy coach and begin teaching other folks this?” Did you have an experience where you realized this was common and other people were bringing this to you?

Ron:
Yes. That’s a great question. Shortly after I got myself out of credit card debt and found a way to go buy cheaper money, like I said, I helped a couple of my friends who were also partying with me and traveling and it worked for them. I said, “Wow, now I have social proof.” Ironically, pre-pandemic, I had a health scare, a doctor tried to tell me that she thought I had lung cancer. That was the first time in my life that I ever thought about death. By the grace of God, I never really had too many people around me that had passed away. But in that moment, that was my aha moment and I said, “Wow, I’m not going to be here forever, so I have to get this information out to as many people and help as many people as I can.” Because financial literacy is not taught at home, it’s not taught at school, and oftentimes, it’s not taught in the streets.
I realized what I had to do was get my voice out or my story out and what I did, I went and published the E-book. I listened to a podcast, it’s called Earn Your Leisure. A guy named Ash Cash is an author, and what he ended up doing was… In his podcast, he talked about how you can publish a book for less than $50. I went, listened to the podcast, took the same steps similar to how I did with Set for Life, we’ll get into that. I went and published the E-book called Financial Lit, understanding credit cards in the most simplest form.
I wrote a 10-page paper on credit education and my experience with it and how I expressed the delivery to my clients, and I sent it to a virtual assistant on Fiverr, paid them $35. They turned into an E-book that was password protected, and I started selling it organically to my friends and family on social media at $5 each. I sold over 500 copies, made over $500. That’s a nice ROI. Then shortly after that I partnered with a credit restoration consultant and then I invested some money into a mentorship that taught me how to actually do the credit game.

James:
Ron, I love that story. From my opinion, the best businesses that are ever created are actually not created to make revenue. They’re created to help cause a solution for people. The fact that you had a health scare and you’re like… You weren’t really thinking about the monetary side, you’re like, “I need to help people.” Because you’re right, no one does get this financial literacy. No one learns to understand debt. Understanding debt will change everything in your life, whether it’s an investor or in your own personal, how you live your lifestyle.
But where was the transition where you go, “Okay, I’m giving this positive message, I can set all these things up,” and you could provide this for a fairly… The way you set it up is very cost-effective. You put all it on paper, you put this whole thing together for 50 bucks roughly. Then you’re able to sell it for a very reasonable price, which is awesome. You get to give back. You’re making it affordable. But where was that moment where you’re going, “Okay, not only can I help people, but I can help myself and create money.” Because I know as we create businesses, we’re always focusing on the problem and then the revenue comes later and we’re going, “Oh, great, cool.” Then how do we change it from there?

Ron:
That’s a great question. I really like that. I like impact over income. I really like that. My aha moment with that was after I sold those copies, then when I partnered with a guy named Momodou, Max Credit Score. Shout out to Max Credit Score, he poured a lot into me. He pretty much allowed me to shadow him for two to three months for free at no cost to me. He showed me how to teach people how to read their credit reports, how to close a client, how to onboard them, things of that nature. My aha moment was during the pandemic when I fell in love with residual income.
The reason being is because when I met with those clients and when they signed up with me, we were helping fix their credit. It was a value-for-value exchange. But what I loved about it was he had me on a pay scale system where every Friday I got paid out. Let’s say the program was $1,000 over six months, if your initial payment was $200, and it was $100 a month, I got paid out 25% to 30% of each client each month while they were in the program. Every Friday, during the pandemic, I was getting paid a sizeable amount of money based on work that I did months prior. Then at the same time, I’m seeing people’s scores grow. I’m seeing people get pre-approved for credit cards that they never had. I’m seeing people getting into homes based on the credit program, buying cards, started businesses, things of that nature. That’s when I realized it was really something.

Scott:
Sounds like you were really building a lot of Credit Karma.

Ron:
Credit Karma. Yep.

Scott:
Quick question here, do you need a degree or certificate? It sounds like you attended some program to get into this business.

Ron:
It all varies what state that you live in. I believe I applied or joined a program where I got this thing, it’s called the CCA. It’s some type of credit association where you go in, they give you some brief knowledge of the credit industry, the laws, and things of that nature. Then I went in, paid for that certification, I got certified for it, and then I invested $3,000 using 0% interest credit card under my business right into a credit mentorship after Momodou, it’s a guy named CEO Godwin on Instagram, and he pretty much broke down the entire legal and business structure of how to run a successful credit repair business and scale. His company is actually called Scaling with Credit, but he broke down all the laws from every state, all the licenses that you need, all the laws and regulations, and things of that nature. It was an amazing course.

James:
I love this story because as we create these ideas that help people, they create money for us. Then you have two options at that point. You either can blow it and have fun with it, or you can reinvest and the steps that you took is then you’re taking your next steps is to educate yourself further to where you can then grow even later, which is huge. A lot of people skip that step right now. They just want the money and they want to get it going and you were taking advantage of this income and buying more things. How did things like Scott’s Set for Life book or these online courses that you were buying, how did that take you to the next step from providing the service to start investing?

Ron:
That’s a great question. I love spending time with knowledge, right? Knowledge is something nobody can ever take away from you. Particularly, with Scott’s Set for Life book, during the pandemic, as many of us were, I was crammed up in the house. I was living with my family at the time, family of five. I was like, “I have to get out this house.” I work for DC government. I’m getting checks every two weeks on the hour. I said, “I have to get out and start working out, start getting some fresh air.” I came across Scott’s book and every single day until I finished it, I walked around my neighborhood and listened to the book, and he literally laid out the steps that I needed to complete to go and create. He laid out the steps that I needed to go and create this change in my life.
My main goal was to purchase a home and get out of my parents’ house. I had two younger brothers in college right behind me. I have to be the example, I have to leave, right? One thing that I firmly remember him saying was, “It teaches you how to save your first $25,000, and it teaches you how to go house hack after that.” Those are the main two key points that I got from it. The pandemic allowed me, by me working for a DC government job, making a nominal salary, to save my $25,000. I’ve always wanted to be a landlord. I’ve always wanted to house hack from the time I got out of college. The first program I ever found out about was NACA. Then I started to research more programs that were in Washington DC in my area.
After I listened to Scott’s book, it gave me the ignition that I needed to take action on all the information that I had, not just the pandemic, the world’s about to be over, people are passing away and transitioning. Again, I’m not going to be here forever. I need to stop sitting on this information and start applying it, not play jump rope with it. By the grace of God, from listening to his book, I was able to devise a strategy. I purchased a house in Washington DC for $423,000 and I only spent $3,700 out of my pocket to do so.

Scott:
What year did you buy this property?

Ron:
I bought my first house March 2021. I listened to your book probably in the summertime, probably like June, July, August. It wasn’t too hot when I was walking outside. I was able to purchase my home in March 2021 for $3,700. My earnest money deposit was $5,000. I got back $1,200 at closing. They fronted me $32,500 in down payment and closing costs. I purchased my house and my main reason buying the house was centrally located. I live less than 10 minutes away from the Nationals baseball stadium, the Audi soccer field, two of the major wharves in Washington DC, Amazon HQ, a lot of different places, and the highway is two minutes away from my house. I had to make sure whatever house I bought had to have a private entrance. I bought a house with a private entrance, and my house was actually remodeled and upgraded when I bought it.
From that, I leveraged credit. I like cooking, I like inviting people, so I had a big backyard, a big open living room, but at my basement was I had to make a decision. When I bought that house, I said, “Do I want a man cave, or do I want a money cave?” I bought a house in southeast Washington, DC it’s the largest ward in DC. It’s the most at-risk and poverty struck ward. But in Washington DC, the average price is $450,000 right now. Washington DC in Congress Heights, I purchased the house for $423,000. That’s probably one of the most cheapest homes that you can buy in DC at this time, around $400,000 at a turnkey livable.
It had a private entrance in the basement. I leveraged a home renovation loan based on some knowledge that I learned from that $3,000 course that I invested in. I was able to go and get $20,000 within two hours to remodel my basement and put a full kitchen down there. I only needed $15,000 of that, so I gave $5,000 back to the bank. My monthly note on that is $300 per month. On average, during peak season, my basement brings in anywhere from $2,500 to $3,000 revenue. I took the same concepts of house hacking and implemented in my basement and I turned my single-family home into a duplex.

Scott:
You’ve now had this for two years, it sounds like. When is peak season?

Ron:
Peak season in Washington DC where top five short-term rental markets in the country due to the tourism that we have, the capital, the monument, these museums are never going anywhere. Based on the data that I have and my experience in the past 18 to 19 months, peak season is from March to August. It makes sense, a lot of times August schools start back up, kids go back, summer vacation’s over. But due to all the government and the hospitals and the infrastructure and the business here, it’s a great time from September to February to transition to midterm rentals.

James:
The way you scaled and bought your property is like it is the epitome of the American dream, in my opinion. It’s about using leverage and buying it right. There’s so many fallacies online or what people are talking about. It’s all about chasing the deal. You’ll make money in real estate if you get the best deal, but what you just talked about was you paid for something that was fully renovated at the top of the market value for what it was right there. But by putting the right debt on the property, it changed everything.
One thing I’d like to explore a little bit is the NACA program because it is a great program, it’s a lot of times people just shoot right past it. Can you explain to the listeners a little bit what that program is? Then how did you get a secondary loan after you got that? Because that’s a huge thing right there too. It’s hard to get a second loan sometimes after you get your first. By putting the right leverage on it allowed you to get in this money cave essentially. Will you walk our listeners through that because that’s huge? You got into a property for $3,500 and you’re making three grand a month. The return is through the roof.

Ron:
Actually, I didn’t use the NACA program. The NACA program was the first program that I was ever interested in, and I know about it so much, I could probably be a NACA counselor. The NACA program allows you to purchase up to a four-unit building. A lot of times they do not really care about what your credit score is. They allow you to buy down your interest rate almost all the way down to 1%, and they also take care of your closing costs and your down payment. It’s a great program. But for me, I think about leverage and I think about long term.
One of the things that I didn’t like about the NACA program at the time when I was applying was something called payment shock. Payment shock pretty much shows they pre-approve you for how much of a mortgage that you can afford, but if you don’t pay rent like me when I was living with my parents, you have to show on paper that you can save a certain amount of money each month to make your mortgage. NACA isn’t just going to give you a home for a mortgage that you can’t afford. They want to make sure that you’re well-equipped and that you understand what are the responsibilities that come with owning a home. I would highly recommend it. It’s a great way to tap into wealth and get into buying your first property and also house hacking, but it just didn’t work for me based on the numbers.

Scott:
Ron, what’s your monthly mortgage payment on this property?

Ron:
My monthly mortgage, when I bought it was $1,883, property taxes went up, it’s $2,048 right now.

Scott:
During peak season, the money cave, which I love, I going to used that term forever now. The money cave totally pays for your mortgage and this $300 per month renovation loan. The rest of the year, it mostly covers it. Is that fair to say?

Ron:
Yeah. It also covers in peak season, my utilities, gas, water, electricity, the home renovation loan, my cleaning expenses for my cleaners, and then my mortgage. Most times I’m breaking even. One reason is because I use pricing automation software to maximize each booking potential for each night.

Scott:
Which software do you use?

Ron:
I use PriceLabs.

Scott:
PriceLabs. Okay. Well, shout out to our friends at PriceLabs. I think you got to use a pricing solution like that to maximize it. That’s awesome that you’re doing that and you’re running a great business here. What I think is awesome about this is how much were you earning at the time when you got this loan again.

Ron:
When I got this loan, I was making $80,000 a year working for the DC government.

Scott:
Awesome. Even in a really expensive market like DC, one of the most expensive markets in the country with this, these programs help folks get into their first property. If you use the loan like Ron did, then you’re going to be able to get this… You use it as a house hack, you turn your basement into the money cave, not the man cave that’s going to allow you to get started in real estate investing. I actually wonder if today in middle of the year, 2023, if it’s almost a better time to get started in real estate investing than it has been in a long while if you’re able to take advantage of some of these types of programs. Do you think that’s the case, or do you think that you got really good timing?

Ron:
Oh, no. All these programs are amazing. When I found out about NACA, and I started going to these first-time home buyer seminars and networking events and going to meet with lenders and getting pre-approved, I start finding about other programs. One beautiful thing about programs, a lot of times they worked together. I was able to leverage a program called DC Open Doors. DC Open Doors is a program in DC where they will pretty much give you, I think 3% of the down payment and closing costs for your home based on a purchase price of your home. They were able to give me $12,500. DC has another program called HPAP, and they have a program called EAHP. HPAP is for anybody that wants to purchase a home in DC, I think they recently increased their limits. The highest that you can get is like $160,000.
It scales based on your household size and also how much money that you make. But the thing that I didn’t like about that program is once it was time to close, they wanted pretty much everything over half of $3,000 in your bank account. If I saved $25,000 and after $3,000, they want half of everything that go towards closing, I didn’t want to do that. But they also have a sister program called EAHP. That one is for DC government employees, first responders, and I think teachers as well. What they do is they gave me $20,000 for down payment and closing costs, and it’s actually, I don’t have to pay it back for 30 years unless I refinanced my house or my home is no longer my primary residence. Then they also gave me a free $5,000 grant just because I showed them, I think I had $2,500 in savings.
All in all, I had $32,500 in down payment and closing costs. This is amazing thing right here. When I closed on my house, my lender told me I had extra money, and they won’t give me a check back because I used the programs. I had an extra, let’s say, $12,000. They used a little over $10,000 to buy out my PMI for the life of the loan, so I don’t have to pay mortgage insurance on my loan. That’s like an extra $150,000 to $300,000 less that’s on top of my mortgage. When I put in that $5,000 earnest money deposit, and I got $1,200 back, they allow me to purchase an extended homeowner’s warranty that I think was for three to five years. I’m real big on leveraging OPM, which is my favorite term, other people’s money, and making it work best for me.

Scott:
Yeah, you’ve clearly got just an incredible NACA for this type of financing for a first-time home purchase. Sorry, I couldn’t resist.

James:
Ron, I’m very, very impressed that you shopped out every type of lender because a lot of people just, they hear one idea and they just run with it. Slowing down and exploring the right debt is essential. Getting that first debt done. How did you take the step and get that second? Because a lot of people get jammed up on house hacking because they buy this property, they want to do the renovations, but they don’t have the money. Lining up the secondary loan was probably more important for you to create cashflow than even the takedown loan. What steps did you take to get there? Then what did the transition from renovating into making sure that you were making money to cover for that debt? Where did that all transpire?

Ron:
Great question. Like I said, when I invested in that course, I’ve done a lot of different things. I had a rental car business prior to this, renting cars on Turo and HyreCar. I’ve been using credit to leverage all these different types of things. I bought my first rental car on a credit card. I split it with a guy that I knew on Instagram for a week, $6,000 down the middle. In this course that I purchased, and I invested in this mentorship, of course, they’re telling you all of the different funding plays. All of the different banks that are giving you money, no docs cetera. I found out about a bank called LightStream. LightStream is a sister bank to SunTrust.
They were giving out loans, low-interest loans with high amounts. People were using them to go buy cars because they were saying, “You don’t have to submit the title and you get a car at a very low-interest rate.” I said, “I’m not going to do that because it’s going to come back to me at some point.” I don’t want them messaging me. When I went online, I was exploring the other options that they had and they were actually approving people for home renovation loans. I had just purchased a home, I had $750 or better credit score. I had strong W-2s. So I went online and applied for it. I got the $20,000 within the same day that I applied for it. Your network is really your net worth. For me, being a credit restoration consultant, one of my main feeder pools of clients or referrals are realtors and lenders. I built up a rapport with different realtors and lenders. Well, realtors are really plugged in with contractors.
I reached out to one of my good brothers named Blake. He’s a real estate agent in Washington DC. I asked him, did he have any contractors that he trusted that he could refer to me. He referred them to me. Since I worked for the DC government, and I’m always getting quotes, a rule of thumb that I live by is you always got to get three quotes because people make up prices every single day. I called in three different contractors, act like I had no idea what I wanted. As I ask questions and see who properly vetted them, I was able to pick the right one. He gave me a quote on how much everything costs. To tell you the truth, I had no idea what I was doing. I never did a renovation before, but I just trusted that referral and I trusted my numbers. I went and got this guy, paid him in cash. I wish I could use credit to do it and get all the rewards points and things of that nature, but he was able to go in and refurbish my basement and turn it into exactly what I needed.

James:
I love that. Three quotes on everything. Money contractors, doesn’t matter what your pricing, get three quotes. That is the truth right there.

Scott:
Couple of quick questions here. How much cash did you have prior to going into the transaction, your first home purchase? How much had you accumulated?

Ron:
By the grace of God, I was able to save $25,000 when I purchased my house, by the time [inaudible 00:31:44], I have a tracker still that has every dollar that I spent to start it up. I may have spent $8,000 to $10,000 furnishing it, buying things of that nature. I still had around $20,000. I always believe in investing in OPM. The reason being is I could have used my $20,000 that I saved in my parents’ house to go and start this project, and I had no idea what I was doing and it could have failed, but I was able to go and leverage the bank’s money and now I’m only paying $300 a month for business where my ROI is about 10X.

Scott:
I completely agree with that principle here. You got to get started somewhere. When you’re getting started on the journey, you have $25,000. I completely agree. Put as little as possible down, keep it in the bank, and try to keep that flexibility so you have optionality later. There’s a difference between irresponsible leverage. It would be way more irresponsible, in my opinion, to have no cash and to have a little bit less debt than to do exactly what you did. I love it. I think it’s fantastic. The next year you’re now getting this Airbnb income and the money cave is starting to generate for you, how does that affect your savings rate, and how do you get, I believe, to the next property? I believe you have several properties now.

Ron:
The first thing is I was able to… Well, once I got my house and now I’m running the business. From running a rental car business, I realized Airbnb and rental cars are pretty much the same. Only your rental car can’t drive 10 states away, and you got to go pick it up. I mean, your Airbnb can’t do that, but your rental car can. What I realized was once people start seeing that I was doing Airbnb. Since the pandemic, I’ve done drop shipping, I’ve done vending machines, I’ve done credit, I’ve done rental cars, and I do Airbnb and financial services now. But when people were seeing it, I was doing that word of mouth started spreading.
One of my business partners, her name is [inaudible 00:33:40], she saw that I was doing the E-book. I showed her how to get an E-book. She went and got it. Then she saw I was doing rental cars. I told her how to do it. She went and got rental cars. Then she saw that I was doing Airbnb, and she went and got three Airbnbs in one year handing me the keys and say, “Ron, go manage it for me.” She put her trust in me. From that, now I’m managing four in my first year. Then it just became a word-of-mouth referral-based business where now I manage 25 Airbnbs, just taking the same systems and processes that I cramped it in my one basement money cave. Now I’ve been able to cookie-cut the process. I firmly believe that I can cookie-cut it across any city, anywhere in the world as long as I have access to cleaners and Wi-Fi.

James:
Everyone’s always looking for the key to scaling. The key to scaling is doing good business. Like Ron just said.

Ron:
How can we get money together? That’s my motto.

James:
That is the motto. Everyone’s looking for… How many people do I hire, how much infrastructure I need, do good business and the businesses grow? When you started referring this out, did you have any intention of operating and managing their business and collecting income, or was it just doing a good thing and it evolved into that?

Ron:
I didn’t. When I had my first one from September 21 to the end of December, I had one property. By April, May, I had two properties. She went and got another property in August and then she went and bought a condo towards the end part of that year. Then I just started having multiple people come to me asking me to run their property. It’s cool doing the books on your property. You know your numbers. It’s cool doing the books on two, three more. But then when you hit 10 and you’re doing financials for everybody else and sending out monthly spreadsheets and things like that, from my other businesses, learning how to automate and streamline people, processes, and systems, I said, “Okay, I have to create a scalable system that will work for me.” My niche specifically is co-hosting. I co-host and property manage people’s properties for small percentages of each booking. But the thing about it is I run the entire day-to-day operations of their business. All of my owners, they just sit back, they collect the check, their mortgage, or rent is paid, and they profit as well.

Scott:
You know what I’m trying to zoom out. If I’m zooming out and thinking about your story and what I’ve heard so far, you started out probably weren’t really familiar with a lot of the basics and personal finance weren’t financially literate to some degree. Racked up this debt, had your aha moment, crushed the debt, saved up 20 grand, bought a house hack, converted it into an Airbnb business. By the way, during this whole period, you’re not just doing this, you’re also taking a shot at a new business idea in all these different directions, this rental car business, the E-book, the financial services consulting. How many years are we into it now, where you’ve been aggressively saving, paying off debt, and taking these shots? Is it probably five or six years now that you’ve been working from this?

Ron:
Well, from the debt it was 2018. I was still partying, having fun. I had my scare in October 2019. No, I’m sorry. I published my book January 1st, 2020 I believe. Then the pandemic happened in March.

Scott:
You’ve been increasingly serious about building your financial position as an intentional top priority in your life for the last three, four years. Is that fair?

Ron:
Three, four years. Yep.

Scott:
Your savings rate, how has that increased? You had 20 grand, were you saving $1,000 or $2,000 a month in order to save that up? How has that accelerated over the last few years?

Ron:
It’s definitely accelerated, and that’s what made me want to start investing and learning the taxes, starting the tax business. A lot of my money, I reinvest into my business. I’m not really big on flashy things and toys. I like that. I like spending money on things that generate money for me. I finding a way when I bought my house, and I realized, “Oh, wow, I could depreciate my house but not the land in DC and save money with my AGI.” I was like, “Wow, they don’t teach us this in school.” Or if I start a business, I can write off ordinary expenses that I would spend money on every single day, but now I can use them to leverage for my business that are actual business expenses. I can definitely see that my finances have increased. If I just had 9:00 to 5:00, my head would be below water. One stream of income is too close to none.

Scott:
Love it. Would it be fair to say that you’re saving thousands or maybe even tens of thousands of dollars a month at this point in your business endeavors?

Ron:
I would say yeah right now. A lot of the work that I put in, it’s the same thing with the credit, the work that I was putting in. I’ve only been doing short-term rentals for 18 months. 18 months scale from 1 to 25. If I had 3 to 4 last year this time, and then now I have another 20, I’m now seeing the compound effect. It’s busy season in Washington DC. It’s Memorial Day week, and the pools just opened. Pools open on Sunday, Saturday. Now I’m seeing bookings come in and those small residuals, 15% to 20% of each booking now pounding up in my account. Now I’m thinking of ways, how can I leverage this for my taxes. How can I now go and buy another property for myself so I can own 100% instead of owning 20% of the grape or the watermelon in a sense?

James:
It’s about being that deal junkie. You just keep going. You just got to let the money grow and keep putting it to work. Part of the reason you’ve been able to grow that capital every month and really pay off debts is running a good business. You’ve mentioned a couple times that you could run this business in any market, any place, anytime. You went from doing credit repair, E-books, to now running a business that has a very solid operation, which there’s so many steps in there that you have to take to get it to where you can let it run itself. When you started doing the Airbnbs, and you started scaling it, what steps did you take? I know you do a lot with VAs and AI. What steps did you take to make it efficient and what are you using now to scale from there to increase that cashflow?

Ron:
That’s a great question. I feel like it’s a building block effect. Everything that I’ve done started with DC government. One of my first roles at DC government, I was a senior data analyst, so I’m real big on systems, I’m real big on tech and things of that nature. Streamline them and making things efficient. When I’m doing demos on PriceLabs, Beyond Pricing, Wheelhouse Pricing, and all these things of that nature, I know that all of them are pretty much do the same thing, but some of them have different bells and whistles. Once I found out about leveraging virtual assistance with economies of scales where I could pay virtual assistance in Philippines, Nigeria, Pakistan with US dollars. Those dollars go way further in their economies, it’s like they’re so skilled with task and organization and things of that nature.
All I have to do is take a quick Zoom with them or record a Loom to show them. I leverage virtual assistants for my day-to-day business with my rental card business, with my credit repair business as well. I was like, “Wow, I could just hire a virtual assistant to do 24×7 customer service because I’m tired of responding to guest inquiries.” I took some of those same nuggets that I learned along the way and I just built on them. Also, with channel managers, it’s easy to manage one to two properties on Airbnb, but when you’re managing 20 at a time and you have multiple calendars, you have multiple prices, you have multiple check-ins and checkouts and turnovers, I realize I need a system that brings all this together that automates it.
My channel manager that I use is called a [inaudible 00:41:36]. It allows me to go in, it has AI built into it. It has direct booking websites, it has calendar sync, and it also allows me to diversify my listings across multiple platforms. I just built everything from one to another and I took all of the knowledge that I had and I’m bringing it together. I spend time with this every single day. It’s The Compound Effect.

Scott:
I think that’s awesome. The Compound Effect that you keep saying, that’s one of my favorite books. That’s what I’m trying to show. What’s happening here is a clear beginning of a very, very awesome future compounding story based on what we’ve heard here. It’s already paying off an enormous dividends and it’s just really, really fun and exciting to watch and hear about here. Could you give us an overview of what your current empire looks like today? You have the 25 Airbnbs, you’ve got your personal property, you’ve got a fleet of rental cars, and you’ve got this business around financial literacy. Is that it? Or are the things that are going on beyond, is that it? Is that all you’re doing? Or is there any other parts to this empire that we should be aware of?

Ron:
That’s a great question. Pretty much I had to scale down and focus. I consider myself a jack of all trades. Some people say you can multitask. I’m just very efficient at learning something, figuring out how to make it work, and then delegating it, outsourcing it. I feel like money is just used to trade value for value. Right now, I actually sold on my rental cars at the peak, the end of the pandemic.
The reason being is because the cars were so cheap during the pandemic and then due to the semiconductor ship shortage, a lot of used cars were very expensive. Prime example, the first car I ever bought with my guy Rob. We split a car for $12,000, $6,000-$6,000 on our credit card. That car was $12,000. We rented it for a year, made our money, had our expenses, write-offs, et cetera. Then we sold the car. CarMax cut us a check for $10,000. We split it $5,000-$5,000, paid our taxes [inaudible 00:43:41].
Once I saw that cars were selling hotcakes, I had three to four Nissan Versas, I had a 2014 Ford Focus that was making $1,000 a month in revenue. I realized I had to narrow my focus and let those things go. I still have a course I still consult with my 9:00 to 5:00 is as maintenance oversight for vehicle technology and things of that nature, but I just couldn’t focus on that anymore. But right now, I have two main arenas. It’s financial services. I have a credit restoration and education business, and I also have a tax preparation business. I also do public speaking. I’m working on a financial literacy curriculum to teach some of these key concepts to schools, churches, businesses, nonprofits, and underserved communities. Then this new thing within the past 18 months is the property management. I consult with people. It’s either you partner with me, I run your property for you, or I can teach you what I know and get your systems in place so you can start doing the same thing.

James:
Ron, how many hours a night do you sleep? I don’t sleep much. How many energy drinks do you drink a day? Because mine has gotten… I love the entrepreneur non-stop deal flow, working all day just to work more that’s how I run my life.

Ron:
That’s a great question. To me, going to work feels like work for me. Having to wake up at 6:30, drive to the office, I may have a 20 to 30-minute commute. I work from 8:00 to 4:30. I’d be riding out the door at 4:30 every single day. I don’t care. Every single day. By 4:35 on my way home, I’m taking a call with somebody helping and adding value to them. Realistically speaking, when I’m working from 4:35 to 10:00, 10:30 at night, it doesn’t feel like work to me. I don’t drink coffee, I don’t do energy drinks, anything like that. But when I get off work, that’s when I feel the most alive. When I’m helping people with their finances when I’m securing another deal. When I can do that full-time, it’s going to be an amazing thing. But right now, I’m just staying down till I’m in a position where I can come up and go be my own 9:00 to 5:00 boss or 9:00 to 9:00 boss.

Scott:
Let’s walk through a couple. Because you can’t be too far, right? You consolidated your portfolio, probably, you’re sitting on some cash. You’ve got the house hack income, and you’ve got all these business enterprises. When are you going to go full-time?

Ron:
Honestly, when God tells me. What I’m doing is right now I have a low-stress job. It’s low-stress. When they start getting on my nerves, they can see me walk out the door. I definitely believe that your 9:00 to 5:00 is your primary investor. Without a 9:00 to 5:00, I wouldn’t be able to have access to those first-time homebuyer programs that leverage, allow me get the home. I wouldn’t have those strong W-2s to go ahead and do that. I wouldn’t have the guaranteed every two-week cash flow that’s coming in to help me pay all my credit cards and invest in my businesses. All of this is pretty new to me. I don’t have a mentor, I will say I’m self-taught with a lot of this stuff. I’m learning day by day. But what my goal is to become fully vested in my jobs and leverage the 401(k) money to go purchase more real estate.

James:
I love that. People jump, they want to quit their W-2 jobs so badly, they quit too early. Right now, you’ve used credit and lending to really push you through in life and really 10X your income. If you don’t have that W-2 job, it’s hard to get debt. There’s this balance point to where you don’t want to bail first because, like you just said, I love that, your W-2 is your principal investor. I’ve never heard that before. That is a great truth behind that because access to debt, access to money can change your life you’ve been talking about, so don’t jump off that ship too early.

Scott:
Exactly. Yep. Awesome. Well, Ron, is there anything that you would leave us with or any advice you’d give someone getting started in their financial literacy or investment journey that you’d like to leave us with before we adjourn?

Ron:
I would say sometime experience is the best teacher. Another thing is I know a lot of people that listening to podcasts, they’re watching YouTube videos. You’re digesting all of this information, but you’re still sitting down. I know it could be daunting, but honestly, when I bought that car on a credit card with a guy that I didn’t even know, it changed my life forever. It was like jumping off the porch and crossing the street. I would say if you’re suffering from analysis paralysis, you’re playing double Dutch with yourself, try. The worst thing that you can do is fail. When you fail, it’s not really a loss, you’re learning. You can monetize that ill. If you go do something and mess up, somebody else can go do it. You can actually profit off that recoup your losses. Don’t be afraid to try and you can really achieve anything that you put your mind to, it just takes action.

Scott:
Love it. Well, thank you so much, Ron. Really appreciate you coming on and sharing your story and just so awesome to see all the successes that you had in a fairly short period of time here and wish you all the best on the journey to building, what is sure to be, a huge empire that you’ll oversee pretty shortly here.

Ron:
All right, thanks for having me. If anybody’s listening to this, the power of social media is real. The last thing that I would say is definitely go buy Scott’s book. I’m not endorsed by him or anything like that. That book changed my life. I wouldn’t have 25 Airbnbs right now. I wouldn’t be a mid-term and short-term rental consultant without Scott’s book. That book was one of the most easiest listens. I listen to books because it’s easier for me to finish them. That was one of the best books that I’ve read or listened to in the past two to three years. It was easily digestible and he literally gave you the clear-cut steps that you need to go and make things happen. That’s the last thing I’ll say. But thank you all. I look forward to working with you all in the near future, and I wish success and health [inaudible 00:49:42].

Scott:
Thank you so much, Ron. Really appreciate that. Very nice words about Set for Life. I’m so glad it was helpful. Again, appreciate you coming on and sharing your story.

James:
Thanks, Ron.

Ron:
Talk to you all soon.

Scott:
All right. That was Ron Curtis. James, what’d you think?

James:
Oh, I love Ron. This guy is a workhorse. Not only that, I just love people that build businesses on helping people, and then they get the benefits out of that, and his story is so awesome. He educated himself with your book. I mean, I’ve never heard someone plug a book so much.

Scott:
Yeah, that was a nice plug.

James:
Yeah. I’m going to have to go reread the book now. He educated himself, he took the steps, and then he taught people the same process, and now he’s making money just by teaching and doing good work. I love a story.

Scott:
I think the house hack is so critical. I think as a starting point on a lot of these very rapid journeys to financial independence. I just feel like it’s going to be really hard to break out of that $80,000 a year salary and then to really accumulate tens of thousands of dollars per year rapidly without making that particular move in Ron’s situation, in particular. I think that was really awesome that he went there. Then the debt, I had no idea. I used an FHA loan to buy my first duplex, what, almost 10 years ago now.
Clearly, things have changed. I wasn’t aware of a NACA program. I wasn’t aware of a lot of the different tools that he was using, and I think that’s a great place to go and educate yourself after you’ve accumulated the first few tens of thousands of dollars in cash. I love the fact that he had the cash available before buying the house hack. Then he chose to finance the repairs and the down payment, all those types of things, using these programs to give himself access to that cash. I think that’s a really smart way to go about it all for reasonable leverage or even large leverage in a first-house hack. But I don’t like doing it if you don’t have any cash position at all.

James:
Yeah, responsible leverage. Don’t over-leverage unless you get the cash, they can handle it. But I mean, he is working that time value of money. That is what he’s using that all day every day. Borrow good debt and make good income to pay off your good debt. If you get in the habit of that, it is a true compound story. Awesome.

Scott:
One last observation that I really think is important is the way Ron has gone about it is very aggressive, very responsible, and very high probability. The basics of that framework are first his formula. He spends a lot less than he earns. That was how he was able to pay off his debt. That was how he was able to rack up $20,000 in cash, and that was how he’s been able to continue to accumulate cash over the last few years. On top of that, he’s taking a new action almost every month it seems to some degree, to try out some new entrepreneurial endeavor, like buying a car and renting it on Turo, or again, making his first house hack, managing a friend’s Airbnb for them, writing an E-book, starting a financial literacy business, and doing speaking engagements.
That is a formula for success. The formula is spending less than you earn, and then also these side bets one by one that you’re making as rapidly as reasonable, and a few of them work and a few of them don’t work, and he sells them off and consolidates. That is going to work over time. He’s going to get a lot of experience in a lot of different fields very quickly. It’s going to help inform a lot of different mental models, and he’s going to be able to scale businesses with higher and higher probability as the years roll by. Really, really bullish on the trajectory that he’s taking. I think he’s going to have a lot of success going forward.

James:
Yeah, sometimes you got to swing and miss, that’s just life. What did he say? Experience is your best teacher. It’s okay to fail. There’s a favorite quote I hear all the time, fail forward. You can fail, just make sure you’re moving forward and you’re learning lesson, and that’s what he’s done.

Scott:
I love it. Well, James, should we get out of here?

James:
Let’s do it. I’m ready. I’m ready to get some with the sun on.

Scott:
That wraps up this episode of the BiggerPockets Money podcast. He is James Dainard, and I am Scott Trench saying toodles noodles. If you enjoyed today’s episode, please give us a five-star review on Spotify or Apple. If you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Speaker 4:
BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Caitlin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.