How Justin Hoffner Built a Rental Portfolio from Scratch

Erika (01:31)

Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m joined by someone that I’ve been looking forward to chatting with, Justin Hoffner, who’s been making serious moves in the residential real estate investing space. Justin, I’m so glad to have you here.

Justin Hoffner (01:47)

Yeah, thank you so much for having me, Erika. It’s such an honor to get to come on.

Erika (01:51)

So let’s dive in here, Justin. First off, for the people around here who may not be familiar with your world, give us the rundown. How did you get started in the residential real estate investing space?

Justin Hoffner (02:03)

Yeah, so I kind of grew up in it at a young age. got to see my dad had some rentals. He did some new builds. So I was just always in his truck running from place to place, if you will. So I got exposed to some of it, even if I didn’t understand what it was at a young age.

Through high school and college, I really just focused on what my major was and kind of forgot all about real estate. I had learned the things, but I didn’t necessarily, wasn’t in college looking at how I could apply that. When I got out of college, I was given a small inheritance from my granddad passing and was a little worried about just about…

doing something meaningful with it that would help me long term. So I decided to start investing in single family here in Charleston, South Carolina in 2021. And that is how I got my feet underneath me and got going in the real estate investing world.

Erika (02:52)

Were there any challenges since you’ve gotten started that over the course of time have shaped how you approach your deals now?

Justin Hoffner (03:00)

Yes, definitely. I would say one challenge that I have recently stumbled upon. So I’m currently doing a flip in Rockwell, North Carolina. It is about three and a half hours. had to do, this one was a full gut for it. I did electrical plumbing, HVAC, all the fun things, drywall floors. The house was from the 30s. two huge things I took away from this one. One,

Be very cautious when you’re getting into something the older it gets. All houses from 60s, 70s are going to have their own niches. The older you go, the more potential surprises you may run into. Another big learning lesson for me was not considering, one, the distance, and two, the clientele of who you are going to be targeting. Distance, I didn’t consider that this flip was three and a half hours away. So trying to…

while I was confident that I could get it done, trying to actually coordinate the logistics of showing the house, of getting the floors installed when they’re supposed to be, and also holding everybody accountable has been somewhat hard, and also considering your client of who is it that you’re targeting, what is the area that you’re reaching out to, and are your expectations set properly, and do they align with the clients that you’re actually gonna have on the phone once you get the end product.

Erika (04:12)

Yeah, yeah speaking of which how do you choose your markets and what makes them attractive for your business?

Justin Hoffner (04:18)

Yeah, so I like to choose markets that I’m familiar with. I like to choose markets that I know that I can see, that I can watch, that I understand. In this flip, I knew the market because I had grown up.

I was familiar with the market somewhat because I had grown up there, but I didn’t really know the ins and outs. I hadn’t watched the market. I didn’t have knowledgeable information of, yeah, that house sold on that street for this much. I just kind of knew the general idea. What I typically look for is I look for things that are in very high demand. I really specialize in…

renovations and getting long-term people to take care of those properties. So when I’m looking I’m looking I’m looking for high rent factors and a area that has a low that has a high demand and low inventory.

Erika (04:59)

Justin, is there a specific strategy that you like to use or do you blend approaches? Like do you do buy and hold or are you more fix and flip?

Justin Hoffner (05:09)

Yeah, I’m continuing to expand my horizons, if you will. I got into it with just buy and hold. Just would place long-term tenants in the places for at least a year, year and a half. It’s kind of been a progression for me. I got actually this place that I’m sitting at at the moment in 2024.

and it was about a half renovation. First day I got the keys, there was a hole in the floor. Had to do subfloor and things of that nature.

since then I’ve just continued to kind of progress and take little baby steps of, well, if I can replace subfloor, then I can replace drywall. And if I can replace drywall, then I can knock a wall down. So I’ve really just taken it in bite-sized chunks and just what I was comfortable with to continue to progress more and more in the fix and flip aspect. But my bread and butter is really long-

term holds and finding really good rental markets that will be sustainable not for a couple of years but hopefully for much longer than that.

Erika (06:49)

Justin, are there specific systems or processes you’ve put in place to maintain those margins?

Justin Hoffner (06:55)

Yes, some of the systems…

is just keeping track of each property, keeping track of the tenants, their occupation, keeping track of the property condition, keeping track of all maintenance of it. I keep at the moment I’m just using Excel sheets to kind of keep each property you know under control if you will and I have folders for each. I think that

As I’m continuing to branch out and looking in other areas that my feet are not in, I’m having to build a network of people, whether that be contractors, whether that be handymen, whether that be realtors in the area, whether that be property managers and just people that I can lean on. if I need to show a place that is not exactly where my feet are, I have a network of people, of relationships that I’ve already built that I can lean on and can help me accomplish that goal without having to

Actually put my keys in my car drive three and a half hours there three and a half back

Erika (07:49)

That’s great. How did you build your network and what kind of advice would you have for listeners when it comes to them building their own network?

Justin Hoffner (07:56)

Yeah, I would say the best advice that I have is to be curious and ask questions.

It is wild to me that the more that I’ve continued to branch out and to just put one foot in front of the other, even if I didn’t know exactly what that step was, how doors have opened up. Now, whether that is you see a contractor working across the street and you just go ask them, know, hey, can I see what you’re doing or hey, can I have a business card? And just starting conversation with people and asking them questions of, well, hey, is this your place or do you do this for a living?

they’re just asking questions and being curious. I’ve learned that you can pick up so people are so generous to give their knowledge if you are curious and are coming from a place of not wanting anything from them but just wanting to know more about them and what they’ve done.

Erika (08:43)

Yeah, that’s great advice. I love that. Going back to the properties that you’ve worked on, how do you manage the operational differences like tenant management or maintenance between single family or multi-family?

Justin Hoffner (08:58)

Yeah, so with tendets, I try to really spend the time on the front end to vet very well. have seen, luckily I’m in one situation that’s not.

not perfect but it has not gone south yet. But I’ve got to witness some people that have jumped the gun on somebody whether that’s a long-term hold or whatever the case is and it can really be detrimental to your portfolio if you get someone that wants to not play nice. So my best advice there would be to

to really take the time on the front end and really go through everything to find a system. I use just a simple software like TurboTenant, which I make any one that I’m looking at fill out a $30 application and it shows me their credit, it’ll show me their background, it’ll show me their occupation. just taking the time to, unfortunately you can’t take everyone for their word, you have to kind of confirm things. And finding systems and software that you can use to one, keep track,

of each property like TurboTenant has every single one of my properties it has the lease with it it has the tenant it has all their information underneath it

finding some system to keep yourself organized is key that way you know hey this place is going to be out next May and this one’s going to be out June well if they’re going to be that close you know you might need to strategically think about you know getting them on the market in the correct amount of time so your back doesn’t ever get up against the wall.

Erika (10:56)

Got it, yeah, that makes a lot of sense. And I’m glad that you said that that deal, that moment didn’t go south. And that kind of leads into my next question is, you know, every operator has a moment where things got real, maybe a deal that went sideways or a time that you had the pivot fast. Do you have one of those moments you can share?

Justin Hoffner (11:17)

Oh, I 100 % do. When I got into this fix and flip that was a full renovation three and a half hours away, I got in not knowing how I would, I couldn’t see the finish line. needed more funds than what the first person told me of the loan that I could get.

One piece of advice there is I decided to go about it anyway knowing, hey I know I can do half of it, I don’t know how I’m going do the back half. I would recommend not doing what I did and saying, I’m going to figure it out later, I’ll figure out the financing part. I would…

What I should have done is made some more phone calls and got my budget tight and got exactly what I needed instead of… What happened is I took a second mortgage on a place. The renovation, I expected it to cost about 85 or so. And I took a second mortgage and they said, we’ll give you 45. Well, I should have got the place reappraised and I should have…

Yeah, I just got a bad appraisal. I should have stood my ground and been confident in my property. Got a reappraisal and got the 85 that I needed. Went halfway through the renovation. Obviously my budget ran out. So then I’m sitting in a position where I had a house halfway torn apart and I was completely out of money. Not a good situation, not a good feeling, not a situation I would recommend for anybody. Luckily I reached out to a hard money guy and I found someone

that

was willing to take a chance on me, but, and it’s all worked out and everything is fine, but I would say not to over leverage yourself and just bet that something’s going to work out. It definitely can, and oftentimes it has when I’ve looked that way, but it’s going to add some stress to your life, that’s for sure.

Erika (12:52)

Yeah, what did that, going through that, what did that teach you about yourself as an investor?

Justin Hoffner (12:59)

Yeah, I think that it really, you know, there was a night when I was, you know, didn’t, could not see the end in sight. I did not know how I would cross that bridge. Sitting in this house that my family gave me the opportunity to get into with it completely torn apart. You know, I’m covered in sweat and it’s 11 p.m. at night. And I think in that moment, you know, there was nothing more that I wanted to do than quit. You know, I was beat up, my back hurt, my pockets were drained and

you know, it’s very emotional time. I think in that moment I just had to calm down and think about everything and say, you know, like even if worst-case scenario one, you know, my life is going to be okay. It’s not, you can’t let the problem consume you to where you can’t think and you don’t have peace of mind because once we, once our peace of mind is gone, it’s hard to think rationally. You typically just go off your emotions. But in that moment I really had to ask myself my why, you know, like why am I putting myself through this

torture you know like why

why would I be willing to pick up the phone and call 20 people tomorrow and if they all say no, call 20 more people until I figure out how to get myself out of the mess. And in that moment, I think that I discovered my why was just to be able to spend more time with my family, to give my kids maybe some freedom and some flexibility that I didn’t have growing up. But in that moment, I one, learned something about myself.

when my back is up against the wall, I double down. But two, the only reason I’m confident to double down is because I have a strong wide that is going to root me. And even in that situation, if I didn’t have a solution and I had to dump that place off, I would have probably got back on my feet whether that took six months or six years.

Erika (14:40)

Wow, wow, and you know that kind of honesty with yourself about it, that’s what separates the folks who, you know, just dabble and investing in people who stick around for the long game. So Justin, what’s next? Are you solving something new in the industry? Are you scaling? What are you seeing next on the horizon?

Justin Hoffner (14:59)

Yeah, so at the moment I had three places that came kind of all available at once. They all needed fixing, they all needed a little work.

So that is quieting down and I’m going to take a couple weeks at least just to kind of think, regain my focus.

I think that what I’m forward towards is trying to get more into the development world of learning a little bit more about the municipalities, learning a little bit more about how do you get lots. Once you get a lot, how do you find a builder that you can trust and how do you get the financing to actually go vertical with whatever endeavor it is. I’m hoping to continue to just take small steps towards that.

the land development aspect of the real estate. I think that I will continue to keep my rentals, but I don’t think that I have a desire today to get five to ten more in this season. I’m wanting to learn a little bit more about the dirt and about the kind of behind the scenes before the house gets there, if that makes sense.

Erika (16:37)

Yeah, that’s exciting and that next move can either compound things or create chaos depending on how you play it, right?

Justin Hoffner (16:45)

That’s exactly

right.

Erika (16:48)

Okay Justin,

before we wrap up, if someone wanted to reach out, connect with you, collaborate. What’s best way for them to reach you?

Justin Hoffner (16:56)

Yeah, so I’m on Instagram at Justin Hoffner Real Estate. I would love for if you would give me a follow there and shoot me a DM. You can find me on Facebook, Justin Hoffner. Also, I have an email address. It is Justin Hoffner, J-U-S-T-I-N-H-O-F-F-N-E-R dot real estate at gmail.com. Any of those three ways would be a great way to connect and would love to chat and any way we can connect and help each other out and help each other grow with this thing’s

they know what’s going on in this business.

Erika (17:26)

Yeah, yeah, totally. Justin, thanks so much for being on. We really appreciate your story and your perspective today.

Justin Hoffner (17:32)

Of course, thank you so much for having me.

Erika (17:33)

And for those of you tuning in, if you got value from this, make sure you’re subscribed to the Real Estate Pro Show. We’ve got more conversations coming up with operators just like Justin, who are out there building fantastic real estate empires. We’ll see you on the next episode.