SoCal Real Estate Investing Success with Anthony Walker

Full Transcript

Taylor   0:01  

What's going on guys? This is a passive wealth strategies for busy professionals. Thank you for tuning in. Today we have a great one for you with Anthony Walker today we're talking about investing in Southern California, not just investing in Southern California but cash flowing, investing in Southern California. Anthony has been investing in Southern California for a while. He's a broker.

He tells us all about his story and his strategy that he uses to invest and cash flow in a high cost primary market. He's doing very well with it. He gives us a few case studies that he's used, that he's experienced, that have been success stories for him.

That can be an inspiration for us if we want to invest in Southern California. A lot of folks we don't know about cash flowing investing in Southern California because it seems like it's not easy to do but Anthony's doing it and Today he tells us how we can get started cash flowing investing in Southern California real estate. It's pretty exciting. There are not a lot of people out there and teaching this topic. I'm very excited to learn about this today alongside you. Thanks for tuning in.

For those of you who don't know, I'm your host Taylor Lowe. I'm a real estate syndication real estate investor, I buy real estate with passive investors and split the return. Really excited to bring this one to you today. Thanks for tuning in. Here we go with Anthony Walker from Buckingham investments. Anthony, thank you for joining us today.

Anthony Walker  1:35  

Thanks for having me.

Taylor   1:36  

Looking forward to talking with you about investing in Southern California, something that I'm not educated on and looking forward to getting educated about it today. Before we get into the topic, can you tell us about what you do and your investments so we know who we're dealing with right now.

Anthony Walker  1:53  

Sure. I am a Los Angeles area multifamily broker and I've been doing Add for about 10 years now, I got into that because I was initially an investor in small multifamily properties. I worked as a client first with my company, Buckingham investments before deciding to become an agent and then a broker. Then eventually I took the company over in 2017, and now as the CEO and we're growing the business.

During that time frame, starting kind of right in the last crash, I guess I bought my first investment property in 2006, but then really settled on doing multifamily in 2009 and 10 and started buying properties here in the LA area around them. I have refinanced and exchanged and built up a portfolio of about 100 units now, mostly in the Long Beach area. I really like that market for a variety of reasons that we can talk about if you like. I use my experience doing that as an individual investor to help clients who are interested in learning about investing in our market and figure out how this works, help them calculate the returns forecast, what it might look like, how much capital to invest, what property to buy, and then broker the deals.

then of course, run the company. We have about 30 agents working for us doing the same thing. All around the LA area.

Taylor   3:21  

Nice, great appreciate the summary. And,  I want to just dive into it and go through some of the, what,  you're gonna tell us our misconceptions about investing in Southern California.   We can just walk through them, but  it seems to me, the price points are high. It seems like it's like it's a rich man's game, like, right. How do you get started investing?  yeah. What do you need? Sure.

Anthony Walker  3:48  

I hear that all the time, even from investors right here locally in California. If you poke around online, that's the general consensus: you can't have cash flow here at home as we say, right? So we have a lot of people that have bought stuff out of state, and maybe struggled with,  being an absentee owner and stuff like that. Well, the truth is, you can make money here.

But you have to know where to look. you don't want to just go to the most very expensive market that you can find and buy something. On one hand, our market is expensive, comparatively. But on the other hand, if you look at pricing, we have a huge variety of classes and grades of buildings and areas that you can buy here. Sure, if you go to Beverly Hills, or Santa Monica or downtown Los Angeles, that's absolutely a rich man's game.

You can't have huge down payments in order to break even at all huge purchase prices to begin with.  It's just super expensive to work in those types of markets. But if you look at other cities that are still right in the metro area, not on the outlying suburbs, you're buying and you can get properties above  four and a half even a 5% cap rate, which allows you to buy with really good leverage here because we have great financing.

The lenders love these tier one markets, because we have a super well diversified, incredibly productive economy in normal times, of course. you get great terms, you can get financing,  in the low threes lately for an interest rate. you can buy with 30%, down, even 25% down sometimes depending on the debt coverage ratio, which allows you to use great leverage and then take advantage of the super strong appreciation that you experienced by investing in a coastal,  kind of tier one market like this.

But finding those deals that cash flow in the areas that you want to invest in is the trick. it's usually looking at cities that are more working class or kind of transitioning gentrifying right now and there's quite a few of them in our area. If you live in the last Angeles area, you don't have to drive very far to find that a lot of people are kind of hesitant to get into that to begin with, because they feel like oh, there's going to be management headaches. 

I don't know what I'm gonna have to deal with there. Well,  we recommend having a good professional manager to begin with, but,  honestly, a lot of attendant headaches that you hear, that you hear about are not that common here, because housing is just so scarce, you tend to get people on the best b

Taylor   6:28  

havior. Yeah, I mean, so there's a lot to unpack there. Right. And, and it's something that I feel like we skirted around a little bit was just the legal position of landlords in California relative to other states and,  relative tenant versus landlord rights, and it seems like it's like California. Lenders don't really have a lot going for them. Is that wrong? And if not, then how are you?  mitigating that in your b

Anthony Walker  7:02  

siness. It's not wrong. It's definitely more difficult to do business here as a landlord than it is in other states.  the poster child for that statement is we recently got statewide rent control. Assembly Bill 1482, passed last year became law January 1.

now across the entire state, whether you have a local rent control policy or not in your city, you're capped at raising rents by 5%, plus the change in the CPI every year, which,  rent control sounds terrible, but when you really unpack that, that's a that's actually a pretty high number. It's enough to catch buildings up to market in most cases. Our first year number is 8.3%.   a few years and you really can get a building to market with that.

that, of course, goes with just cause for eviction limitations. and that can be a real onerous thing for landlords to manage through because if you have a tenant that's sort of a nuisance, increase problems but you don't have a specific violation of the lease and they're still paying, it can be difficult to get them out. you do need to manage around that,  and in my opinion, the best tool in the bag for that is to have a great property manager, or to really know what you're doing with management.

Cash for keys are really popular strategy for getting tenants out if they're even if they're not paying, it can be faster and less expensive to do some sort of,  buyout or cash for keys agreement than taking them all the way through the court system and getting a lockout because it's so tenant friendly here. it can take so long to get that done. you have to budget for these things. You have to understand that that's what you're dealing with. But what people forget is the reason that we are a tenant friendly stay on the legislative side is because that's actually a symptom of the supply imbalance that we have for rental housing here.

It's such a good landlords market to own property in California, that they had to legislate their way to protect the tenants because It goes so well for you if you own property over a long period of time here, and that's just because we have nowhere near enough rental housing to satisfy the demand here, there is a significant amount of new development going on and like the downtown LA area, but that's really central. realize it's really Class A apartments that are being built.

When you look at Class B, and C apartments, which is usually the space that I like to play in. It's impossible to make those deals pencil on the developer side. we have this extreme housing shortage, unfortunately, and as a result, that means that rents go up, values go up, leasing is super easy. vacancy is always low, even in bad times, vacancies, low rents basically never go down. Even in the 2008 crisis rents were basically flat for a year or two, and then they started rising again.

when you look at it that way, I'm willing to accept the more onerous restrictions that are placed on us as landlords I in exchange for being an owner in a great market where you have an imbalance in supply and demand like that, that just can't possibly 

Taylor   10:07  

o away. That's a really interesting way to put it. I hadn't thought that way. But  and whenever we're talking about LA, I always have to be looking at a map to make sure I'm staying and keeping up,  with all these different areas that you're mentioning.

But the land is very limited and the things that are there. traffic in LA is already the worst in the country.  it's already bad. throughout the country, we're consistently really only developing Class A anything, whether it's single family houses, or apartment buildings or whatever.

that stuff's not affordable. It does increase supply, but it gets in a complicated,  supply and demand, calculations and all that but you did say something about making deals pencil as a developer now, we're not talking development, we're talking about Real Estate, we don't want to buy real estate and make the deal pencil we want to buy deals that do pencil, right and make them work. But what do you look for, to determine if a deal is gonna pencil 

Anthony Walker  11:14  

or you. I primarily want to look at the actual rents in place.  I know just little rules of thumb I walk around with in my head, in our market, at least expense ratios are really low. I know most people like to look at cap rates, I tend to look at grm first gross rent multiplier because it's harder to have subjectivity in that metric. I'd kind of know how these buildings are gonna operate.

anything for me that I can buy, that's like under a 14 times grm, in general is gonna break even with 30% down or less, and the better you can do there, the better off you're going to be. That's kind of what I look for. I look at the grm on actual rents, and then the upside is really important here too. We have a lot of buildings that have been under market for years that haven't caught up,  classic story, right? owner manager, all that kind of stuff.

I like to buy buildings that have a bit of upside and rents, but they're still priced decently on an actual gross rent multiplier. then you get something that at least breaks even or cash flows. If it's a commercial deal, it's going to close because the lender is going to force you to cash flow with their debt coverage ratio analysis. Yep. then your income develops rather quickly into a much more attractive investment. this is a long term game, but I'll typically see a deal where I might buy it at like a four and a half percent cap rate. the debt that I'll have on it will be maybe at three and a half percent.

When you take the amortization into consideration and everything you're making a little bit of money, you may be making a 3% cash on cash return on that deal, which sounds terrible, right? Most people aren't that doesn't get you too excited, but I know that that building's going to appreciate a lot more than it will in other markets.

We have that geographical constraint here under development, we have a super aggressive economy. On the average over the last 54 years that we've been keeping statistics, our company, we're going to have about a 7% average annual rate of appreciation on value every single year. if you apply leverage to that number, and you take that cash flow, you're in the 20s on your rate of return right away.

then in a few years, if you have a little bit of upside, the rents go up here usually faster than other areas, you capture that upside, it often doesn't take a lot of money to capture the upside, because sometimes these units just don't even need that much to clean up. I've looked at buildings, I did a little example of properties that I bought a couple years ago, and I looked at two buildings I bought about two years ago, one of them I is now operating at I think a 7.8% cap rate on my original purchase plus my renovation budget, the other ones that are nine. You know that saying that you Can't cash flow at all in California is just not true. It takes a little bit of patience. 

you're in it for the long term game. But on top of that, on each one of those buildings, and one of those, I think was a 12 unit property, I purchased it for 1.43. it's worth about 2.4 million now. I spent about 200,000 upgrading that.  my ROI is through the roof on that property. I was able to buy it with a 95% Bridge, loan and then refinance into conventional. I mean, the returns are unlike multiple hundreds percent, like I don't know, three or four times multiple, even in my first couple years on that property,  and that's what allows me to buy more because you can add value that quickly.

I'm not just saving money from my active income in my cash flow to buy more buildings. I'm adding value I'm refinancing I'm exchanging, and that's what's allowed me to build a sizable portfolio because this market lets you add value like that and you appreciate so much

Taylor   15:01  

faster. You said something a bit earlier that I found very appealing and that that I think goes well with this strategy that you're describing that the economic down markets don't hit rents in Southern California and LA, really like they do in much of the rest of the country. I think that makes this long term strategy with kind of skinny margins at the beginning make a lot more sense in the l

Anthony Walker  15:28  

ng run. Absolutely.  As we sit here at our home, we're on a stay at home order here in LA like we are in most of the country because of this Coronavirus pandemic.

If you're reading the National multi housing headlines, I think the national multi housing council came out and said in April 2020, rents across the board, there were 69% collections. That's terrible, right like over 30% delink Quincy. Well, so what we work closely with property management partners here I can tell you what April collections look like here. We had 8.3% delinquency in April.

that's up from 4.8% in March, which was a totally normal month. just 3% more delinquency than we're experiencing during normal times right now during a time when millions of people have lost their job over the last few weeks. that right there is proof for the reason why it's great to own property here in California. I don't think I may have one tenant that didn't pay the rent as a result of the Coronavirus and my buildings are going to be fine

. Whereas I would be really worried if I were in some other markets because of how that goes down. that was the same experience that we had in 20

Taylor   16:45  

8 2009. Interesting, so I mean, something  most listeners of this show know that I live in Richmond, Virginia, and we have people here talking about read strikes, and we should go on strike and so on and so forth. Because let's face He said the courts as we speak are shut down and much of the country do you can't go in you can't follow an eviction. in a tenant friendly area like LA, it just seems like the logical thing for a tenant to say, Well, normally you're going to have a hell of a time evicting me. now, good luck, buddy.  like, why do you think they're paying their Wh

Anthony Walker  17:25  

 does i think i think they're smart enough to know the long term consequences of doing that is going to be very bad for them. We have the same rent strike talk going on here too. There's tenants unions and rights groups that are organizing and we're there. There's talk about rent strikes across the entire state for the May rent, we'll see if that actually happens or not.  they do.

It's a stupid move. I mean, you're gonna shoot yourself in the foot and I think a lot of tenants realize that. It comes back to that supply and demand imbalance in my opinion,  if the tenants are doing the research right now, they know our courts are closed. They could just not pay the rent, even though technically, they're supposed to provide proof of hardship. We would then work out a payment plan with them.

Of course, we want to be understanding and we've got a heart and we're happy to talk to people that have a real hardship. But there's definitely going to be a handful of attendance itself, the courts are closed, there's no way they can do anything for me until September, so I'm just not going to pay the rent. I'm not going to even talk to my manager professionally. Yeah, professional tenant, right? Well, if they do that, they're going to be left with very few options. At the end of that road.

Eventually, they're going to get out. Eventually the courts are going to reopen, they're going to get locked out, and they're going to be on the street. If you've got collections. If you've got a judgment. If you've got an eviction on your record, you're not getting a place to rent. credit standards here are high. 

We generally have the pick of the litter when it comes to picking tenants because it's so hard to find a place to rent. Those people are going to be out sleeping in their cars contributing to the homeless problem, which is a huge issue for us moving in with relatives.  staying in short term housing and stuff like that. I think most people are smart enough to realize that that's a really stupid idea, just to get a few months free rent when maybe they didn't really need it to beg

Taylor   19:12  

n with. Absolutely a great point.  you brought up the homeless epidemic there, which,  not living there. I don't I don't see it, but I hear about it. Yeah. I hear it's enormous. I don't know the solution, build more housing or whatever. I don't know if we're gonna figure that out right now. But it's a big problem. it demonstrates that supply and demand issue that you're talkin

Anthony Walker  19:34  

 about. Exactly. Yeah. Unfortunately, it's another sad symptom of the same problem. But  it is there. It's something 

Taylor   19:41  

o know. Yeah, yeah. Now, something I also wanted to discuss is to give it background on this question. My background in engineering, I've sold equipment that's installed in California years ago.

The code compliance was an absolute nightmare and the stuff that I Selling like it's not even that big a deal but the right paperwork and everything you had to go through and I can only imagine with residential property, it's significant. It's just ridiculous,  I don't know. But what is that like and dealing with that and how long as it takes to get permits and write them to inspect and all these other

Anthony Walker  20:22  

things, it can be a bother. Honestly, residential is not nearly as bad as commercial. Hmm I'm doing a commercial remodel in an office building right now and dealing with title 24 and ADA and all this stuff environmental stuff, which people that aren't outside of California would know what  some of these things are, but it that's a huge problem for anywhere where you're gonna be open to the public.

For units. It's not as problematic but that depends on the city, City of Los Angeles can be pretty difficult to work with. They've streamlined a lot of processes lately.

They'll because they understand that they have an issue, especially as It comes to adding new units. The states actually started a few new laws related to adding accessory dwelling units to apartment buildings that allow you by right to add additional units to even single family homes when the zoning wouldn't otherwise allow. But it's kind of city by city. If you're doing a basic remodel to a two bedroom apartment, there are a lot of cities where you could walk in.

if you're just  swapping out, if you're just swapping out finishes and fixtures, you might not even need a permit if you're moving walls and stuff you do. But  there are pro business cities. Long Beach is pretty decent to work with and in a lot of cases you can get permits over the counter inspections aren't too bad. It's a few days, but there are definitely some cities that you just don't even want to do business.

They're bad. it's weird. It's like random little cities that probably nobody's heard of that are particularly difficult to deal with. I'm not going to name names on the recording. But then some of them are surprisingly easy. It definitely can be a problem but  I haven't experienced it to be a huge deal. There are definitely a fair share of owners that do especially interior remodels without getting permits.  a lot of these, it's a quick replace of the flooring, some counters, cabinets,  bathroom and kitchen tile and kind of can't call it a day.

for that type of work, you technically don't even need permits in a lot of cities.   to the extent possible in our deals, we're doing more of that type of stuff, painted landscaping on the outside, maybe you do windows in the window, company goes there. He goes and gets their permit. But we're trying to avoid,  adding a whole bunch of square footage and reconfiguring units and moving load bearing walls, it gets very expensive and time consuming when you 

Taylor   22:46  

o that. Yeah, I can. I can believe it. I mean, some of the things that you threw out that, like sort of maybe sort of require permits is just it sounds absolutely ridiculous to me. Yeah. Yeah.

The notion that we could maybe even have to get a person To do floor cabinets are stuff that is just in no way related to the structural integrity of the property or anything like that. I mean, you said you don't have to get it, but somebody shouldn't have to skate around it. Yeah, exactly. Ridiculous. absolutely ridiculous. But you mentioned adding square footage.

I wanted to touch on some of the value add strategies that you use on residential properties, especially as it pertains to say cost a labor cost of materials that cost of,  code compliance and permits and all of those things like what are your main strategies for adding value, especially in light of the rent control laws and how much of that you can actually 

Anthony Walker  23:44  

apture? Right? Well, so  if you're adding units, you're going to be able to lease those at market right. you don't have to worry so much about rent control on new construction 15 years and newer. There is no record roll the statewide right Control doesn't apply.

City of Los Angeles rent control doesn't apply to any buildings built after 1978 there's a large swath of buildings built in the 80s we had a big building boom in the 80s that are not subject to rent control. Those are pretty good. As far as Costco generally being residential,  additional square footage here is probably going to run you around 250 a square foot, which is quite a bit. But  valuations even in the cheapest markets tend to be in the three hundreds. 

There's an argument there there's not a huge value add by doing that in some areas, but if you're working in a nicer area,  you can see price per square foot valuations go over 1000 in many cities here,  Manhattan Beach, Beverly Hills, like super nice areas. if you have a property that you can add square footage to in a nicer area, it can be a huge value add to do that, even though the construction is expensive, and it For the additional rent that you're getting, because the cap rates are lower and the gross rent multipliers are higher for every additional dollar that you can capture, you're making a lot more in value.

a really popular strategy right now is to add ad use. This is new new laws, new legislation, assembly bills that just came out and just took effect January 1 2020. single family homes can have detached and attached accessory dwelling units that basically allows you to turn almost any single family home into a triplex legally, it doesn't become a triplex on title, but the extra units are permitted.

They're just accessory dwelling units. If you can do that, that's a really popular value-add strategy right now, apartment buildings that also apply to apartment buildings and there are different regulations there. In some cases, you can add 25% of the square of the unit count if you're adding within existing square footage, or if you're adding new square footage, you can add two units to it. Any apartment building out there at all. that can be great, where the extra value that you get is a lot more than the cost of say 250 a square foot it might take to build that space.

Really, the standard value add deal, though, is to buy an older building from the 50s 60s, or even 1920s.  slap new finishes on it, you're not adding any extra square footage, you're gradually raising rents on the existing tenants in compliance with rent control. tenants may or may not leave at all right, so they don't leave, you're not even paying for it and you're getting the value add at whatever 8% clip a year, when they do leave, you redo the finishes, you rent the unit at market and you've captured your value. maybe you own the building for three to five years, and that gradually happens.

that's the easiest kind of path of least resistance where you're not dealing with as many regulations, permitting problems and stuff like that more aggressive strategies are more like ad use and yeah, adding space and doing development and stuff li

Taylor   27:00  

e that. to be clear on this rent control, I don't know if I caught it before you probably said but it only applies to current tenants like rolling over their lease or increases on a year over year basis on existing 

Anthony Walker  27:14  

enants. Yes, so it's not vacancy control. That's big. That's a bad phrase. the rent control a lot of people think of as a super strict rent control that we had decades ago where the city set the rent. even after a tenant vacates, they tell you what you can charge to ta

Taylor   27:37  

k about U

Anthony Walker  27:38  

SR man, that's bad, right. obviously, that destroys free markets, D incentivizes investing, and all that stuff. that is still illegal under a state bill called the Costa Hawkins bill, which of course the tenant rights advocates have been trying to repeal for the last few election cycles.

But within the confines of the existing rent, can troll law know when a tenant vacates a unit, either voluntarily or through a just cause for eviction reason.  Of course, if they don't pay the rent, then the landlord is entitled to set the rent and whatever they want.

If you're too high, you're not going to get a tenant. But you can take it to market whenever you have a new tenancy. This is just for tenants and their rights actually vest after 12 months in this legislation. If you have a bad tenant and it's early and you do month to month, the DNA you have you have some more rights to get them out than you do after they're their rights vests. They're just they're just cause for eviction rights best. it's really

Taylor   28:42  

not that that interesting. Okay. Okay. Before we move on to my three favorite questions I ask every guest, I want to make sure if listeners out there, they're enticed, they're interested, maybe they're in California, and they want to move forward. They want to take that first step or the next step to You're starting to invest in Southern California. What do you recommend new investors do t

Anthony Walker  29:06  

 get started? So we have a great platform for new investors. Our company is all about introducing new investors to multifamily investing right here locally. If you check out our website, it's just Buckingham investments calm. We have some downloadable basic guides on how to invest in apartments that take you through some of the metrics, a lot of the jargon that you might hear that we probably heard during our conversation, pretty simple, no nonsense explanation of some of that stuff.

if that's interesting to you, and you want some more of our market research, we have detailed spreadsheets of all the data that we've scrubbed and published over the years that we're happy to share with people. Check us out, shoot me an email at Anthony Walker at Buckingham investments calm or find our website, give us a call come into one of our offices. We're always happy to meet with people, talk to you about your goals, and see what we can do to help you get started.

We even have a lot of clients To start by just buying a two to four unit building an owner occupying a unit. If you do that you can buy with FHA financing. Three and a half percent down, even,  under $50,000. you can be an apartment building owner here in Los Angeles, you might

Taylor   30:15  

be surprised. Nice. I love it right now we're going to take a quick break for our sponsor. All right, Anthony, I've got three questions I ask every guest at the end of the show. 

Unknown Speaker  30:25  

re yo

Taylor   30:26  

 ready? Okay, I'm ready. First one, what is the best investment you've ever made? Other than in y

Anthony Walker  30:34  

our education? The best investment I ever made? Well, um, let's see.

The one we were talking about earlier probably got the best numbers on it. I bought it. this is an interesting, this is an interesting one. The way that this went down, it gets kind of complicated. look up all these terms and stuff, if you're curious, and this is how I structured it. I had a condo that I used to live in, that I had moved out of and converted to a rental And so the condo was eligible to sell and I lived there two out of the last five years.

I could sell the condo and exempt 250,000 of my capital gain, but my gain was going to be more than that so you can exempt 250 and you can exchange the rest. Okay, so I sold the condo, I exempted 250,000 I had about another 100,000 as down payment. I said, I used to buy a 12 unit apartment building in Long Beach. I bought the 12 unit apartment building in Long Beach with only $100,000 down for wow and for $3 million, which shouldn't be possible, right? But yeah, I had a bridge lender, a private money lender.

because I had other buildings in my portfolio, I cross collateralized the debt against another six unit property that I already owned, and they pushed the LTV to 95% to me for me, so I exchanged 100 grand into the 12 unit and then I use some of the $250,000 to rent renovated, which normally you'd have to pay taxes on, and you wouldn't be able to use that cash to renovate the building. use 200 of that to renovate the building. Six months later, I refinanced at a valuation of $2.17 million to get 70%.

I got $70,000 cash back out, and the building started cash flowing at $4,000 a month on that day. I added net, I think it was about $550,000 in value in six months. $70,000 back in cash, I got a building with a cash flow of $4,000 a month. All right here in Southern California from a con

Taylor   32:38  

o that I use. Man talked about setting up the pins and knocking them down. That's a good one. That's probably the best. That's great. I love it. On the other side of that we had the best investment that was a great one. What is the worst investment

Anthony Walker  32:53  

Oh, okay, the worst one I ever made it. The worst one I made was one of my very first Investments which I know is common for a lot of people. I bought a duplex also in Long Beach with an nonconforming bootleg unit in the back. it was a bootleg triplex. if only that were in this day and age, maybe I could get that permitted under our new,  ad EU rules, but it looked great,  great on paper, right? Because you're not paying for the extra space. I got a cheap price for it.

I paid 300,000 for a large duplex, which is an incredible Yeah, see that? I think it's like 2009 or 10. Well, the city found out about the bootleg unit somehow I think a contractor messed up back to our earlier discussion on pulling some permits. they came out and they found the bootleg. They got hit with a code violation and not only was I forced to convert the property, and remove the bootleg unit, the city did a little research and said, well, the lot size wasn't large enough to even support two units because of the zoning, despite the fact that it was a totally legal permitted duplex going all the way back to the 1950s.

Because of the bootleg, they threw the book at me and forced me to convert the property to a single family rather than and I had to convert it, join the two units in front, remove the bootleg and back and just lease it to the tenant that was taking the largest unit. Luckily, at that point, everything was so cheap that the property still kind of paid for itself at that point was just a breakeven investment. I owned it I think for two or three more years, I did end up selling it. I still made money on that property, but really only by virtue of the direction of the market so kind of lucked out because of where we were when I when I bought it in timing, but that one did not 

Taylor   34:54  

o as planned. Wow. Yeah, no, I think it's absolutely ridiculous that you know if the thing was  I understand the bootleg unit and then  not allowing that and that like that makes sense. But seeing Okay, the lot size isn't right for you know what, li

Anthony Walker  35:10  

e, Who cares? Right and their permits were there fr

Taylor   35:14  

m the 50s. it permitted like, it's up. It's fine. Who cares? Ye

Anthony Walker  35:19  

h, let it go. I don't know. knowing what I know. Now. I have a  I have a deeper network of attorneys. Maybe I would have done thing. But yeah, at th

Taylor   35:30  

Wow. Well, it didn't damage you that badly. At least in the wallet. It sounds like that turned out okay. Yeah, that's good. My favorite question at the end of the show is what is the most important lesson that you've learned in business and investing?

Anthony Walker  35:45  

By far, relationships are everything, absolutely everything. You just cannot discount the value of the relationships in your life. If you have People and you're good to the people in your life, and you get a good reputation going, you are going to have so many opportunities, everything is going to be so much easier. when things get tough, you're going to have options, you're going to have support, you're going to have people to talk to and help you. You're going to get cracks in great deals, you're going to get exceptions when you need them. I just can't stress the importance of relation

Taylor   36:27  

ships enough. I love that.  I think real estate investing isn't even unique in that way. I think people understand the value in relationships more. I think value relationships are equally valuable across industries. I think people really get it in real estate investing. I really appreciate that. Thanks for all the lessons today. California sounds a lot more appealing now.

in spite of all of the road bumps, That we, that we talked about. Anthony, thanks for everything today if folks want to get in touch with you, where can 

Anthony Walker  37:07  

hey find you? Absolutely. My email is Anthony Joshua Walker at Buckingham investments, calm all spelled out and plural, where you can go to my website, Buckingham investments calm and shoot a Google search in there. Thanks so much for having me. It's bee

Taylor   37:22  

 my pleasure. Hey, it's been mine as well. Great conversation. Thanks for all the lessons and the inspiration and all of that. It's been so much fun. Really appreciate it. Everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts very much appreciated, helps other people learn about the show.

If you know anyone who could use a little bit more passive wealth in their lives. Please share the show with them and bring them into the tribe. Thank you for tuning in. Once again, have a great rest of your day and a great week and we will talk to you on the nex