The Binder Strategy: How to Get Tenants to Ask for a Rent Increase

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0:03 Howdy. Welcome back to Multif Family Strategies. This is going to be a section where I cover the binder
0:09 strategy or how I get my tenants to ask me to raise the rents.
0:15 My name is Dion McNeely. If you are unfamiliar with who I am, I am the lazy
0:21 investor who reached financial freedom by looking for the right amount of cash flow from the least amount of units. And
0:27 the binder strategy has been a huge part in how I've been able to reach financial freedom. I'm also the author of the book
0:34 Financial Freedom for the Lazy Person, which will be available on Amazon and Audible. And in that book, there's
0:40 actually a chapter on the binder strategy and what we're going to cover today, just for those people who like to
0:45 see it in print instead of hear me talk on a video. Uh, if you're not familiar with who I
0:51 am, uh, as the lazy investor, I am somebody who didn't start investing until I was 40. I got laid off from law
0:59 enforcement because of the 2008 housing crash. You know, when cities aren't making any money anymore, they don't
1:04 have taxes coming in to pay wages. So, I got laid off with a lot of qualified officers. At the same time, I was a
1:11 single parent with three kids. Found out about $89,000 in bad debt in my name I didn't know existed until the divorce.
1:18 and I started teaching at a CDL school making $17 an hour. So, that was my starting position. It's not the best. Uh
1:24 there are worse. I think the only thing I was really missing would be like a major health concern or something, but I
1:30 had checked all the boxes on this is going to be a rough start. After investing for about a decade, I retired
1:37 in 2022. And here's what the numbers look like for those number nerds out there like
1:42 me. I have 18 rentals, so I don't have a huge portfolio. That wasn't my goal. I
1:47 understand some people have that goal. Mine was the right amount of cash flow from the least amount of units. As the lazy investor, my strategy will also
1:54 help people who have a larger portfolio. I uh have 18 rental units that produce
2:00 about $35,000 a month in rent. I have a little over 9,000 a month going out in mortgages. I set aside 5,150 a month,
2:09 which is a cop joke because that's the uh code for holding the crazy person.
2:14 That's for future repairs, maintenance, and vacancy. And uh that leaves me about
2:20 $21,000 a month to figure out how to spend. I live on a little less than 5,000 a month, usually around four. So
2:26 I'm still adding to the portfolio, not as a goal, just as a byproduct of the money piles up. Where the binder
2:33 strategy comes from is as the lazy investor, I actually prefer to buy
2:38 properties with tenants in place. I understand a lot of people, a lot of investors want to buy vacant properties
2:44 because you get to do a shiny new rehab, look at value ad and get those market rents and it's probably the best return
2:50 on your money. So, the the most logical thing to do as a landlord is to buy vacant properties or to buy properties
2:57 and kick your tenants out. But, I was working full-time raising three kids. Uh, I call myself lazy and I really
3:03 think I was just busy. As the lazy investor, I like to buy houses with tenants in place because of a few
3:09 things. Usually, when they're for sale with tenants in place, it's a previous owner who hasn't really been taking care
3:15 of the place. They've kind of neglected the tenants. The rents are below market. That's probably why they're not making
3:21 enough money and that's why they want to sell. But if tenants are in place, not always, but a lot of the time there's
3:29 going to be power, right? There is electricity. There is probably running
3:35 water, maybe even there's floors, right? I get you can buy it and do a rehab, but
3:42 I invested for over a decade without doing one rehab on any one of my properties. I didn't do a burr until
3:47 after I retired. It was my first rehab. So, my goal was to buy
3:52 rent ready or already occupied properties. Yeah, the margin would be better if you did more work, but I
3:57 didn't have the time. And if I thought buying a property was going to mean more work, I'd probably be less motivated to actually buy a property. I wanted to put
4:04 my money to work so that I didn't have to. I wasn't buying a job. So, the goal
4:09 with buying properties with tenants in place is that the rents are below area
4:15 average. That's why I got a good deal. I eliminated competition. There's a lot of investors who only want to buy vacant, so they're out of the picture. There's a
4:21 lot of other investors who only want to buy it if the market rents are already in place. I'm buying them usually with
4:27 low rents. But I want to look at it from the perspective of the tenants. I've been a tenant. I've been a renter.
4:34 Tenants live in fear. You know, if the if the owner is going to sell, what if they kick him out to sell it? What if
4:39 somebody else buys it and kicks him out because they're going to own or occupy it? What if somebody buys it and doubles
4:45 or triples the rent? What if they don't allow pets? Like,
4:50 these are valid concerns of the tenant. And as an investor, I don't want to be heartless. I actually want to feel
4:55 ethical in the way that I invest. So, one of the reasons I use the binder strategy is because with my goal, I get
5:02 to alleviate the tenants fear. It's not my goal to kick them out. It's not my goal to not let them have pets. I do
5:10 want to increase the rents, but I also want to keep the tenants happy. It's very important to me to have happy
5:15 tenants because happy tenants don't trash your property and happy tenants don't leave.
5:22 So, with the binder strategy, I call it a binder because you can see here it's actually a three- ring binder.
5:29 You can do it through email, you can do it through text messages, but I prefer in person with the binder. And I will
5:35 explain some situations where you do it through email or text and it makes more sense. But when do you want a
5:42 binder? Cuz if you buy a property and you just go binder the first day and you get a new shiny long lease cuz maybe the
5:48 tenants run monthtomonth or their lease was about up, do you even know if you want to keep those tenants? You didn't
5:54 get to vet them. You didn't get to run their credit. You didn't get to uh check their work history, know their eviction
6:00 history. So these are called by most people inherited tenants. So I like to
6:05 wait a couple months. I want to wait at least two calendar months before I go
6:11 and use the binder strategy because the result is usually a longer lease, not just the rent increase. But in those two
6:17 months, I get to do a few things. I get to go, do I want to keep these tenants? There's
6:25 usually three things that matter that we're screening for to hope these three things go well. Do they pay their rent
6:30 on time? So, are they likely to pay their rent? Do they call you for super trivial things?
6:37 or do you get noise complaints? Right? We're we're trying to vet our tenants, which you didn't get to do in this case,
6:43 to make sure those things go as smooth as possible. So, in those two months, I'm actually testing the tenant.
6:50 I'm also taking those two months to get a few things done to change the tenants's opinion of the owner because
6:55 the previous owner had already neglected them. They, you know, not raised the rent, which was a great thing, but they probably weren't fixing things either.
7:01 and I have an inspection report from the purchase to go through and go, "Okay, here's my honeydew list for my handyman to get these emergency things done. And
7:07 then here's some things that'll get done eventually. But I'll also do some minor upgrades. I put in motion sensor LED exterior
7:14 lights. I put in coated locks. I buy class C properties on purpose. That's my targeted type of of rental. They're not
7:21 used to having coded locks. They almost always have to have keys. So, it's kind of an upgrade. I actually asked the
7:26 tenants if they're if if they owned the place, what would be the first thing that they fix? And I've never had a
7:31 tenant ask for something major like, well, I would add another bedroom. It's usually something small like the screens have holes in them or I would like a
7:37 screen door or the fan squeaks. Spend a couple hundred bucks, do my normal upgrades, and in 2 months, those tenants
7:44 understand that I'm now an owner who's going to take care of the place. So, that's how I time the binder with a
7:50 purchase. Generally after buying or strateging my tenants I would do a 5% rent increase every other year. So every
7:57 other year there's no increase and every other year 5% increase. From 2013 to 2020 that pretty much worked for me
8:03 every time. But we want to pay attention to the market and we want to understand if there's ever a black swan event,
8:10 right? This is something that happens to the market or your local market that drastically changes home values,
8:18 interest rates or rents that we, you know, you can refinance to a lower rate.
8:23 You can uh understand prices are about to shoot up if rates go down. But when
8:28 rents change, I will do something uh for a black swan event like 2020 when we had
8:34 a pandemic, an eviction moratorum or in 2021 when forbearance ended or in 2023
8:40 in my state of Washington where I invest uh rent control was threatened. So I went and binder strategy all of my
8:46 tenants. That's actually the binder we're going to make together today in this video.
8:51 So it's generally a couple of months after closing. I would not bind her again unless there was a black swan
8:56 event. Unless rent control is initiated, which I'm going to cover later in this video as well. So, that's when to bind
9:04 her. Now, how do you bind her? How does this actually work? I have a three- ring
9:09 binder. This would look the same in email. This would look the same in text. This is actually just a screenshot from
9:15 Zillow. You can read use Red Fin, Realtor, your MLS picture, whatever you want. But I would prefer it to be
9:20 something that the tenant has access to. Because what we're doing is we're showing here's what the value of this
9:27 property is, which was my first house hack. This is the duplex that I bought, which is my preferred style. Side by
9:32 side units, garages in the middle, no shared living space, pet friendly fence yards in the back. Checked off a lot of
9:37 boxes. Didn't make a lot of money with those first rents, but after the binder strategy, after me
9:43 moving out into my next house hack, I'll show you what it looks like a little bit later. So,
9:50 I'm showing the tenant that my property value has increased. So, my insurance
9:55 and my property taxes are based on this new value. And that the rent they might have been paying with the previous owner or that they might have been paying with
10:01 me before the black swan event made sense, but it doesn't make sense currently. Now, the tenants don't
10:08 actually care about your cost. They don't care about your insurance. They don't care about your property taxes.
10:14 And I can prove this by saying if you had a paidoff rental property or a
10:20 property with a mortgage, they would rent differently if tenants cared about your expenses. But area
10:27 average rent set rents, not your expenses. I'm not sharing this because I want them to go, look, it cost me more
10:33 to own the property. I'm sharing this to go, this is a public website. Everything
10:38 I'm going to share with you today, you have access to. Not only can you verify, but you can go and get a feel for what I
10:44 did here. You can you can prove what I'm talking about. And I continue to do that
10:50 every page through the binder. So, showing them the front page like this, this is the cover. Setting it on
10:56 the the table lets them know that we're here to talk about the property. The tenant knows we're probably going to talk about the rent, but I don't just
11:02 jump into I'm going to raise your rent. Because remember, as an owner of a property, if I want to raise the rent
11:08 $100 a month, the tenants would hate it. I'm a jerk. They could flame you on
11:14 social media. They might just move out. Tenants don't think the way owners do.
11:20 Tenants think you haven't improved the property. You haven't done new paint. I have older appliances. Why would the
11:27 rent go up if the service you're providing hasn't changed? Owners understand that rent goes up because the
11:32 dollar has lost value to inflation. Handymen cost more, materials cost more. So all of our expenses, not just
11:39 property taxes and insurance, are going to cost us more. So rent goes up because the dollar lost value, not because we're
11:44 providing a better service. But tenants don't think that way. So instead of raising the rent $100 and being a jerk,
11:51 I use the binder strategy. I show them the cover and then I open the binder and I show them the very first page is the
11:58 map. Go to Zillow, Redfin, Realtor, whatever, you know, Facebook Marketplace, Craigslist, whatever has
12:05 the most rentals in your area, the way the people in your market tend to find their rentals or list their rentals. In
12:10 mine, it tends to be Zillow. I use Hemline and most of my responses, even though Hemline puts it out on 50 15
12:17 platforms, most of my responses come from Zillow. So, I take the screenshots from Zillow. might be Red Fin in your
12:23 area, might be Realtor. So, looking at this map, I'm not going to cherrypick. I'm not going to point
12:30 out the 2900s or the 2500s, and I'm not going to point out the 1700s. I'm looking for kind of what I call the
12:36 mode. So, kind of the median, kind of the average, but what is the most common number people are going to find? There's
12:42 a lot of 1800s, a lot of 1900s, a lot of 2000s. So, in my mind, I kind of set the
12:48 area average here at about 2,000. There are nicer places that will rent for more
12:54 and there are worse places that will rent for less. But the tenants's not thinking nicer or worse. They're thinking how many bedrooms. They're
13:01 thinking how far to work, how far to the school, how far to the water to go play
13:06 at the park. They're looking at the map with a little little less information
13:12 than the quality of the rental. So, I share this and I just kind of point out
13:17 my property is pretty much central to this map. So, the tenants think of all of these listings around here, these are
13:23 the ones closest to where they live. Then I go to fair market rents. You can
13:28 actually just Google fair market rents. The housing authority, not the housing
13:33 authority, the is it housing and urban development or something like the HUD puts out fair
13:39 market rents. They're required to put them out every year by October. And so for next year, you'll get updates in
13:45 October for 2026. By October of this year, the current tenants are paying
13:51 1460. At the beginning of this conversation, I actually say, "What
13:56 would the government pay me if you moved out?"
14:01 This is just kind of a casual question. I would just say, "This is what the government would would give me if you moved out." Now, this does include
14:07 utilities, but in in my market, this is a two-bedroom each side duplex, about
14:13 $2,000. Kind of the area average, right? There were some properties for more. There
14:18 were some properties for less. But I let them go. I let the tenants understand
14:23 that the big evil government will pay me more than what you're paying me to live here. Letting the tenants kind of know
14:31 that to me the best possible outcome is you decide to move out.
14:36 My property is close to Joint Base Lewis McCord. So, it's a large military installation. if you are near a base or
14:43 a college because anybody attending a college using their GI Bill will get paid at E5 level. The reason I reference
14:51 E5 and in person in my binder I'll probably have it highlighted is because if you look at E1 through E4, they
14:57 basically get paid the same because most of the time in the military, this is when you're in boot camp or your MOS training or just getting to a base and
15:03 you might not have your family there with you yet. So, you're either staying in barracks. But at E5, we tend to get
15:09 more people living off base. They're usually not 19 or 20. They might have a family now. They might be not there
15:16 might not be enough housing on the base to to accommodate all of the service members. So they live off base and get
15:22 paid what's called basic allowance for housing. So near this base or attending a college
15:29 near here using the GI Bill, people are paid $2,430
15:34 a month if they have a family. $1,98 if they're single. Usually single lives on post though. So I'm just referencing
15:41 that to say here's what the military is being paid to live around this base.
15:46 Then I'm actually going to try to compare as close as possible apples to apples
15:53 listings from the, like I said, the most used platform in your market. Could be
15:58 Redf Fin, could be Realtor, could be Zillow. With this one, if you look at the picture, it's not easy to tell
16:04 that's a duplex. So, I actually might kind of take my finger, touch the blue area, and say this is a duplex here
16:10 close to where we are in Spanaway that's renting for $1,970 a month. It's two-bedroom, one bath. like the one that
16:16 you're in. Apples to apples, as close of a comparison as possible.
16:22 Then I'll pick some other ones. So the first one, the rent was 1970. The second one's 1960. So we're close to that 2,000
16:29 range. Again, I'm not cherry-picking. I could scare the crap out of the tenant and show them the 2900s or the 2500s.
16:34 The tenant is also, if they look themselves, going to notice and look for and find the 1700s, which could be low
16:43 income requirement, no pets, could be reasons why, or it could be in like in that map I showed you, there's an area
16:49 called Lakewood, which is um the cops can't go there alone kind of area. So,
16:54 the rents can be lower there. Local tenants know the bad areas in your market usually.
17:01 So, I'll reference this one. I'll say this one looks a little bit better than mine. It's got newer paint and everything, but how's the parking?
17:07 There's no pet friendly fence yard. You got a lot of stairs, right? So, the rent's kind of close to that area. Average. And then I'll show another one.
17:14 This one, the rent's a little bit higher, but the inside kind of was about the same quality as mine is uh as as as
17:20 the tenant is living in it. It's kind of the upgrades. I might have newer lights than this, and I definitely remove wood
17:26 burning stoves, but this was one close in the area, and the rent was where I needed. Again, not the maximum, not the
17:32 bottom. The lumberjack landlord talks about removing the top and removing the bottom. He does a version of this through text and email. Uh, but those
17:40 are the examples that I used. I used three of them. You might use three to five. Try not to overload them with too much information because people will get
17:47 stuck on details. I'm just going here's a reference of some of the ones that are available in this market.
17:52 Here's what happened with the conversation with these tenants when rent control was threatened. My rents were low. I had been going up 5% every
17:59 other year since they moved in. area average spiked about 40%
18:04 in 2021 to 2022. So, it was a massive increase. So, area average rent set
18:11 rents. If the tenant moved out, my property is not super prettyl looking. I don't have all of the best amenities.
18:18 I'm not going to get that $2,500 rent for a two-bedroom, one bath in this area, but I would get around 2,000.
18:24 Section A would pay just under 2,000 because it would have to include utilities. I talked to the right tenant first.
18:32 Understand your tenants. There's you you'll know their situations. You'll know which ones to talk to because in a
18:38 small multif family duplex, triplex or forplex or or or even an apartment complex, tenants talk. And what I don't
18:46 want is tenants to think, "Wow, there's a $300 difference between my rent and their rent and our places are almost
18:51 exactly the same." So, whatever the first binder strategy settles on is usually what the rest are going to agree
18:58 to. These tenants went to 1790.
19:03 From 1460 to$,790, the tenants asked for over a $300 a month increase.
19:11 That's $600 a month from a duplex. That's a lot of money per year based on
19:18 a 10-minute conversation where it took me 10 minutes to print out the information. I went to fair market rents. I went to the BAH. I printed out
19:25 the screenshot from Zillow of the property. I looked up three to five rentals and and captured screenshots. I
19:31 put the binder together and I had a 10-minute conversation. If I raise the rent $100,
19:37 I'm a jerk and I get flamed on social media and I probably have to deal with the tenant turnover. But I also feel
19:43 like I just kicked someone out of their place because I raised the rent. Instead, I go and have this conversation. The tenant asked for the rent to go up. Sometimes they ask for it
19:50 to go up too much. I've done a binder strategy with a lady who also had already been binder strategied. If you
19:56 can make a verb out of that, and she did the research and came back much higher than I was comfortable with the increase
20:03 being for her. So, I lowered it. She was happy. I was happy because it was still a big increase. I've had friends like uh
20:09 I have a friend Michelle who's a local investor. Dan is a local investor. They've both told me times where they got a recommendation from the tenant and
20:16 said that's too much. Let's go a little bit less. Happy tenants, happy landlord. I have had tenants ask for too small of
20:24 an increase. I've never asked for one never had one ask for the rent to stay the same or for it to go down, but I
20:29 have had one ask for, you know, in a case like this maybe for the rent to go up $100. Well, I just point out that,
20:36 you know, going from 1460 to 1560 does really sound fair to the tenant, but is
20:41 it fair to me? How far off is 1560 from 2000? You can hold your hands up and
20:48 make an example of it. You can draw lines on a piece of paper. This is a conversation. The tenant doesn't just
20:54 recommend something because after you show them all of this information, you actually show them the property, the
21:00 map, fair market rents, BAH, couple of examples. You ask the tenant what's
21:05 fair. These tenants suggested that increase and I agreed.
21:13 I don't have tenant turnover. I got a bigger increase than I probably could have got myself if I just went and
21:18 raised it myself. And I end with happy tenants.
21:24 What do you do if you have section 8? Because this is a diversification strategy that I use. I have about 1/3
21:30 section 8, 1/3 military, and 1/3 working or retired. So, in my portfolio of 18, I think right now I have three section 8
21:36 tenants. I like to have at least four. I assume my next ones I might target a section 8 tenant legally finding a
21:43 section 8 tenant. But what do you do if you're dealing
21:48 with the tenant and the housing authority? With section 8, there's an order of
21:54 operations. The first thing I do is I binder strategy the tenant. Your lease is between you and the tenant. What you
22:00 have is a contract between you and the housing authority, an agreement. So, I
22:06 get the tenant to agree to the rent increase. I show them what BAH pays. I show them what the housing authority pays. I show them the comps. I tell the
22:12 tenant, "Look, what makes sense?" We come to a number. We agree on it. We sign a lease. In the lease is a caveat
22:19 that says, you know, this lease is pending the approval of the housing authority. Then
22:26 with the housing authority, you do the work for the counselor. If you just call them and say, "Hey, the
22:32 rent's going up $350 or whatever the increase is," they might say, "That's too big of an increase."
22:38 Because it's a person sitting in an office. And 350 sounds like a lot because their goal is to pay the
22:44 smallest amount that they can because in their mind, the smaller amount they pay to each tenant, the more number of
22:49 tenants they can help. I understand the mentality. So, I do the work for them.
22:54 Show them that you're an educated landlord. Send the section 8 housing authority a
23:02 screenshot of the fair market rents for the state and the county and maybe even
23:07 the zip code depending on how populated your area is that your rental is in. Show them what BAH would pay. Show them
23:14 the comps in the area that are going for more than what you're asking for.
23:21 Once you've done the work for the counselor, you have a signed lease from the tenant. I had this the housing authority tell me in one instance that
23:28 $1,800 was the most they would pay for a rental that I had. I did the binder strategy with the tenant. We agreed to
23:34 2,200. I sent the information to the housing authority. They could their agreement their limit was higher than
23:40 2200. The comps were higher than 2200. Housing authority agreed. The rent it's
23:46 now at 3,000 a couple of years later because rents have gone up more in that county. But I binder strategy them every time to get to that amount
23:53 because the counselor can't go to their boss and say, "We really like this landlord. Can we give them an increase?"
23:58 But the counselor can go to their manager and say, "I got here's the information. Here's what we'll pay.
24:03 Here's what BAH pays. Here's the comps in the area. The landlord is not even trying to go to area. They're just going up from where they were. The amount of
24:10 the increase doesn't matter as much as that you're not increasing more than what the limits are for the area.
24:16 Then what if you're not like me? What if you have a property manager? What if you do want that bigger portfolio or you're
24:22 investing at a distance and it makes sense to have a property manager for you?
24:29 With the property manager, it basically works the same way.
24:36 Are your rents above, at, or below area average rents? Because area average
24:42 rents set rents, not your expenses, not your wish list, but what are the rents in the area?
24:48 How do your rents compare to the area average? Do the work for your property manager. If the comps are significantly
24:54 higher, maybe email some comps to the manager and say, um, why are we so far off of what these rentals are that I'm
25:00 finding available? Maybe they know something about the market that you don't, and there's a reason.
25:05 But it's the area average comps, too. Don't cherrypick. Not the highest, not the lowest.
25:10 with a property manager. I I like the lumberjack landlord's theory of you hire fast or you have hire slow, fire fast.
25:17 And I take from my law enforcement background that whenever you're dealing with a contractor, a handyman, an agent,
25:24 a lender, a property manager, any situation like this, I follow the same thing that a cop does when they're on
25:31 patrol. Ask, tell, make.
25:36 Ask the property manager, "Why are my rents so far off of the comps that I found?" If the answer isn't good enough
25:44 for you, tell them, "I want the rents to be more in line with the comps that I'm finding in the area." And if they don't
25:50 agree to it, then then you make them by firing them and finding a new property manager.
25:57 Now, the big scary bugaboo in the room is rent control. What happens when rent
26:02 control happens or is even threatened? Rent control makes landlords richer and
26:08 more tenants homeless. I'm going to make, no kidding, I did a whiteboard video on my YouTube channel, which is Dion Talk Financial Freedom. Uh, I'm
26:16 going to make $138,000 more in the next two years than I was going to make because there's rent
26:21 control in my market. So, the binder strategy for me becomes more important. If you just raise the
26:29 rent because there's rent control, which is what it does, it forces you to raise the rent every year because you can't do a bigger increase when there is a black
26:35 swan event. You have to keep up with rents by doing an increase every year. The reason the binder strategy becomes
26:41 important is because educated tenants understand when the
26:46 market rents go up significantly, which is what happens with rent control because a lot of the landlords don't
26:51 renew leases. They force tenants out. They say, "You have 90 days to get out. I'm going to rehab. You have 90 days to get out. I'm going to move in. You have
26:56 90 days to get out. I'm going to sell the rehab it and rent it out for a significantly higher amount. So rents get pushed up.
27:03 So what is your maximum allowable increase from your rents? In my market, it's 7% plus inflation with a cap of 10
27:10 because of the new bill that just came out in 2025. I'm doing a 7% increase every year.
27:16 Instead of doing 5% every other year, which I had done from 2013 to 2020, then
27:22 black swan events can do a bigger event, right? A bigger increase. But now I can't do the bigger increases for black
27:28 swan events. I have to increase every year. So instead of 5% every other year.
27:34 I'm now doing 7% every year. But I'm showing the tenants I'm not al I'm also
27:40 not doing the cost of inflation. I'm only doing the 7%. Here's area market rents. Here's what
27:46 section 8 would pay. Your rent is below area average. The increase is below area average. The change is I don't ask them
27:52 what's fair. I show them what the rent increase is. I blame rent control because it's nice having the evil government there as the bad guy so I
27:59 don't have to be the bad guy. Educated tenants understanding
28:07 tenants are more likely to be happy tenants. So what if the binder strategy
28:12 fails? Because it is entirely possible that it does. I've had one instance where it failed uh and it was the best
28:18 possible outcome. I had two remote workers uh in a two-bedroom house that
28:24 had a third bedroom that was technically a den because it didn't have a closet.
28:30 Well, they were remote workers and their rent was significantly below the area average and they they had been binder
28:36 strateged once in the past. So, I went to binder strategy them again and they said, "Hey, we're remote workers. We can't afford an increase. So, we're
28:42 going to move to a lower cost of living area." So, they moved I don't know half a state away from us, which is good.
28:48 They get to save money. They're remote. They can geo arbitrage and save money. I spent $700 adding a closet to a a
28:55 bedroom and the place rented out for like $990 more. So almost $1,000 more than what I
29:02 was getting. I didn't displace the tenant. They were educated. They were choosing to move because they understood
29:07 they didn't want to pay more rent. And they make $1,000 more a month.
29:13 I didn't kick them out. I get to feel ethical. And now I get market rents. Not only do I get market rents, but I get
29:18 market rents for the third bedroom, which was significantly more than even a binder strategy would have went because
29:23 a good binder strategy or a good rent increase would have had them there. They were in a two-bedroom unit when I bought
29:29 the place. Not really fair to go and add a closet to a bedroom and tell your tenants, "You now live in a
29:34 three-bedroom." Most investors would kick the tenants out, put the closet in, and make more money. I totally
29:40 understand. Mathematically, that makes the most sense. But I like to sleep feeling like I haven't ripped anybody
29:46 off. Happy tenants don't trash your property.
29:51 Happy tenants don't leave. And happy landlords don't quit.
29:57 It doesn't matter to me if you are looking for a massive portfolio with hundreds of units or if you just want
30:04 enough cash flow to be financially free. Your life is easier if your tenants are
30:10 happy. Your life is easier if you get better cash flow without having to do rehabs and giving up your time and
30:17 energy and effort to do all of those extra things to rehab the unit,
30:23 advertise the unit, screen the tenants when you can sometimes keep the tenant in place, get a bigger increase than you
30:29 would ask for, and have happy tenants. If you have any questions, you can
30:35 always reach out to me dion.com. happy to help you and uh good job
30:42 choosing multif family strategies. I am still learning from Christian every time I talk to him. A financially free person
30:49 with rentals is still learning every time I interact with Christian.
30:55 Have a day full of awesome.