Schuber Mitchell Homes Blog

Real Estate Investing Done Right

Posted by Alexis DeRoin on Feb 20, 2020 4:56:52 PM

In today’s “side-hustle” culture, it seems everyone is turning their hobby into additional cash flow and the work never stops. What if I told you that you could start a part-time job where you would work an average of 10 hours a month, and after 10 years you own a completely paid-off home as your compensation? Well, if you play the rental game right, you can come out on top with a wealth-building machine. We sat down with Joe Harris, one of the owners of Schuber Mitchell Homes and resident investment guru, to learn his real estate investment hacks and how to strategically build wealth. Joe started his rental business in 2004 with one goal in mind- to save money for retirement. His thoughtful approach to this industry has led him to success and he is passionate about helping others achieve their financial goals.



The first decision you want to make for your rental business is how to finance your properties. If you’re a Dave Ramsey fan, he’ll tell you to only pay cash for investment properties, so that you can earn money faster and not be tied to debt. We think that’s great advice, but it may not be possible for everyone to do- especially starting out. You’ll want to put at least 20% down to avoid paying PMI (Private Mortgage Insurance), this way you can get more money out of your rental property and start paying down your principal quickly.

After you’ve put 20% down, you’ll want to focus on paying that mortgage off as soon as possible, and then you’ll move on to the next rental, paying it off even faster with the combined income from both paid-off homes.

Joe’s money-saving hack: To save money, Joe spent the first 10 years of his rental business with a back seat full of tools, ready to fix an issue at any time. By doing all of his own maintenance, he saved thousands of dollars and was able to pay his investment properties off faster.


What & Where

Another major decision to make is what you want to buy, and where you want to buy it. You could go down the road of apartment buildings or duplexes, but if you’re just attempting to build wealth on top of your existing income, Joe recommends purchasing single-family homes because they are much more liquid than multi-family dwellings.

“A single-family home gives you two ways to make money on it. You can make money as a landlord, or you can sell it as a single-family home. Whereas if you own an apartment complex, the only way you can get out of it is going to be linked to the business of renting and you would have to sell to another investor,” said Joe.

Next, you’ll want to decide on a location for your rental(s). Take a look at the best-selling neighborhoods in your community. Regardless of if someone is looking to rent or own, people generally have the same list of priorities when house shopping. Families want a safe neighborhood, convenience to restaurants and stores, and great schools for their kids. Consider where people are buying, and you’re probably looking at the perfect place to purchase your investment property.


The Business Side

When you take the plunge to purchase your first investment property, creating an LLC will be important in protecting your assets, and in the event of a crisis, any financial responsibility would fall on the LLC and not your personal bank account. Some experts will recommend a separate LLC for each individual property, but according to Joe, all that’s really necessary is a single LLC for your entire rental business and a good umbrella insurance policy. An umbrella insurance policy is extra liability coverage that goes beyond the limits of your homeowners insurance. It provides an additional layer of security, so multiple LLC’s aren’t needed. In the event of a disaster, you want to be fully protected both legally and financially.


The Myth of Cash Flow

Many people believe the myth that their rental property will immediately start putting money in their pockets. In most situations, that’s just not how it works. When you first buy a rental property, your goal should be for the home to pay for itself- the principal and interest, as well as upkeep and maintenance. If that’s not possible, you’ve got a cashflow issue. It will be extremely tempting to keep this additional income, but it’s important to use that extra cashflow wisely. Joe made a rule for himself that none of the money generated from his rental properties would go in his pocket. His rentals were his retirement. Once all of his properties were paid off, 90% of the income generated was put into a savings account. The other 10% was put away to account for expenses that the properties will incur. Because we all know unforeseen expenses don’t come incrementally, you have to prepare ahead of time for those big chunks of change. This way, if the heat and air system goes out or a house floods, you can immediately cover it with no problem at all.


Buying the Right Property

Location and price are some of the most important aspects to consider when purchasing investment real estate, but the quality of the home is equally important. If you buy a 20 year old home at a great price, you may feel like you’re getting a good deal until you start running into the issues that come with used homes. You’re essentially gambling on the longevity of the roof, the exterior materials, the HVAC system, interior finishes and everything else in a used home.

You may think that Joe is biased when he recommends buying a new Schuber Mitchell Home, but the truth is, he was in your same shoes when he discovered Schuber Mitchell. Part of Joe’s rental business was purchasing foreclosed homes and fixing them up. For the other part of his business, all-brick homes on concrete foundations really caught his attention.  In his research for this type of home, he discovered Schuber Mitchell and quickly learned how these homes could benefit him as a landlord.

“Your return on investment will be better from a rent standpoint in a new Schuber Mitchell versus a used home. The thing is, they’re kind of maintenance-free. You’re getting a 30-year roof, an all-brick exterior, a brand new interior that is zero maintenance, not to mention all of the warranties that are included,”

Joe realized that he could drastically improve his bottom line when he didn’t have to worry about maintenance issues. Typically, when he purchased a home, he would have to think about the systems that have to be maintained and those things that might need to be replaced over time. Joe described buying a Schuber Mitchell Home as a “get out of jail free card” for as many as 10 years.

“When you buy a home from Schuber Mitchell, you’re going to get a 10 year warranty on the heat and air system. You can know with confidence from the beginning that you’re not going to be making those type of maintenance expenses. You’re getting a comprehensive warranty on the home for the first 24 months, so anything that goes wrong for the most part, is going to be covered by Schuber Mitchell. Your maintenance expenditures are going to be so much less in the short-term with Schuber Mitchell.”

After learning about the ease of maintenance, the low utility bills, and the ability to charge premium rent for a brand-new home with luxury finishes, Joe was sold. In 2014, he met with our owners, Daman Schuber and Dan Mitchell to talk about buying several homes at a time in bulk. After their meeting, Dan and Daman were struck with Joe’s expertise in the real estate world and his professional experience. I guess you could say the rest is history, as Joe is now the third owner of Schuber Mitchell Homes.


We’ve just scratched the surface on real estate investing and the benefits of purchasing a new construction home for this purpose, but there’s even more to unpack.

We hope you can join us for a special homebuyer seminar called “Real Estate Investing Crash Course” hosted by the man, the myth, the legend, Joe Harris himself. You’ll get the chance to hear in-depth from an expert and ask questions to both Joe and the team at Flat Branch Home Loans about financing your investment property. You can RSVP for the Southwest Missouri class (February 25) or the Northwest Arkansas class (March 21) at

Topics: business, Home Owning Tips, realty

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