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Up In Your Business is a Radio Show by FlagandBanner.com

EPISODE 189

[INTRODUCTION]

[00:00:01] GM: Welcome to Up In Your Business, with Kerry McCoy, a production of flagonbanner.com. Through storytelling and conversational interviews, this weekly radio show and podcast offers listeners an insider's view into the commonalities of successful people and the ups and downs of risk taking. Connect with Kerry through her candid, funny, informative and always encouraging weekly blog. And now it's time for Kerry McCoy to get all up in your business.

[00:00:37] KM: Thank you, son, Gray. My guest today on Up In Your Business with Kerry McCoy is a fellow North Little Rock Ridge Road Junior High graduate, Mr. Val Hansen. If you grew up in North Little Rock, Arkansas, then you've eaten at what was once perhaps the only hamburger joint in town and Val Hansen's family business, Hansen Hamburgers.

Today mom and pop burger joints have been replaced by corporate fast food chains, and Val has moved from working the grill to a very successful real estate business. Val Hansen RE/MAX Properties in the capital city, Little Rock, Arkansas. If you love real estate like I do then you will love today's show as Mr. Hansen tells us how he bought property and grew his real estate business, his opinion on the real estate market today, the business of rental property and the effect the COVID-19 pandemic has had on his business. In addition, I want to find out the story behind Hansen Hamburgers and what became of it. Best burger memories of my childhood. It is my great pleasure to welcome to the table fellow North Little Rockian, if that's a word, Mr. Val Hansen.

[00:01:49] VH: It's a pleasure to be here today. Thank you, Kerry.

[00:01:51] KM: So let's start at the beginning. Were you born in North Little Rock?

[00:01:54] VH: Technically, Little Rock, St. Vincent's hospital, yes.

[00:01:57] KM: Well, I think all of us in North Little Rock were born in Little Rock.

[00:02:00] VH: That's right.

[00:02:01] KM: And didn't you and I go to – Did you go to Ridge Road Junior High?

[00:02:04] VH: No. I actually went to St Patrick's but I had –

[00:02:07] KM: Little St. Pat’s?

[00:02:08] VH: Yeah, but a lot of friends that went to Ridge Road. Great school. Ridge Road Rams, right?

[00:02:12] KM: That's right.

[00:02:13] VH: There you go.

[00:02:14] KM: There you go. Do you remember when your parents started Hansen Hamburgers?

[00:02:20] VH: They actually started it in 1960 at 18th and Main Street is where the original Hansen drive-in was, right down from Old Main High School.

[00:02:30] KM: Oh okay.

[00:02:31] VH: And then um he had the opportunity to buy that – Or lease the property out there John F. Kennedy and McCain and opened another drive-in out there. So he had two of them going at one time and then he let the one go down there on 18th and Main and then just stuck to the one out on JFK.

[00:02:50] KM: So tell us about working for your families burger joint. Was it torture or did you love it?

[00:02:55] VH: It was pretty fun.

[00:02:56] KM: You liked it.

[00:02:56] VH: Yeah. It was a good time, and we served a lot of people from North Little Rock High School, Sylvan Hills and Northeast. And as a matter of fact, on the Northeast guys, the class of ‘74 have included me on all of their functions. So I’m on their Facebook page, and whenever they have a class reunion or something they always invite me, because I went to catholic high school, but half of my friends were from Northeast too. So it was a great experience.

[00:03:26] KM: So can you still make a good Hansen hamburger? I can remember you back there flipping burgers.

[00:03:31] VH: Yeah. That's all I could do is flip them. I didn't know how to –

[00:03:34] KM: How old were you when you started working there?

[00:03:36] VH: 12.

[00:03:37] KM: I was going to say you were very young, and you can't just do that anymore. I don't think you can let 12-year-olds work anymore even if they're your kids, I don't think you can.

[00:03:45] VH: Yeah, probably not. Probably.

[00:03:47] KM: But that's a great experience for you. You don't ever remember probably a day you didn't work.

[00:03:51] VH: No, because I actually worked there and then I had a paper route too.

[00:03:55] KM: And kids can't do that anymore today either. I think it is total shock when teenagers or young adults get out of school and go, “Oh my gosh! This is work?” It's kind of shocking.

[00:04:11] VH: Right. Right.

[00:04:12] KM: So what happened to the business, Hansen Hamburgers?

[00:04:15] VH: Well, my dad's lease was up at the end of uh 1974. So he elected not to renew his lease, which I wish he would have, but he didn't do that. And they shut down Hansen's and then they put a couple other businesses in there, and finally the Regions Bank came in and it's been there ever since.

[00:04:34] KM: So that wasn't the piece of property you used to start? So you didn't own that piece of property.

[00:04:39] VH: No. No. Metropolitan Trust Company owned it.

[00:04:43] KM: So you didn't use that piece of property to start your real estate business.

[00:04:48] VH: No. No. But what happened was my parents had bought several lots in Lakewood and they weren't doing anything with them. One was on I think Oak Lawn and another one was out JFK a little bit further and they said, “Just do something with it.” So they gave me a couple of lots. So I cleaned them up, put up a for sale by owner sign and sold those. And then my granddad gave me a lot down in Brinkley and same thing.

[00:05:15] KM: How did they have property?

[00:05:17] VH: I think my parents just bought it. They just decided to buy a lot or two over there in Lakewood, and that's what happened.

[00:05:24] KM: So they were just natural entrepreneurs.

[00:05:25] VH: I guess so.

[00:05:26] KM: What did your grandfather do?

[00:05:28] VH: He was a physician.

[00:05:30] KM: Aah!

[00:05:31] VH: Yeah.

[00:05:32] KM: And you know, doctors back then did not make quite the money they make today. But they still made a pretty good living. So you come from probably a family of entrepreneurs. Your grandfather was a physician. Was he a general practice?

[00:05:47] VH: Yeah. He came from Cuba. He's from Cuba.

[00:05:53] KM: No.

[00:05:55] VH: Can't you tell him I’m 4th Cuban?

[00:05:56] KM: No. Not at all.

[00:05:59] VH: Yeah. He came from Cuba when he was 18. Spoke no English.

[00:06:04] KM: Are you fixing to cry?

[00:06:05] VH: No.

[00:06:05] KM: Yes you are. This is a moving story for you. Why is that? Because you're so proud of him? He's a great guy. So was it the Cuban – He fled Cuba because of the war.

[00:06:17] VH: No. No. No. He came here. He came in 1926. So he came here, spoke no English, $50 in his pocket, one set of clothes, and came through Ellis Island and –

[00:06:30] KM: Into New York.

[00:06:31] VH: To New York City.

[00:06:32] KM: How did he get to Arkansas?

[00:06:33] VH: Well what happened is he went to New York University and – –

[00:06:39] KM: And he doesn't speak English.

[00:06:41] VH: No English at all. And then got his degree there and then got a degree in dentistry and then he left New York and went to Kansas City to med school and got his – He did his residency in surgery. And then some guys from Helena said, “Where are you going to go practice?” And he said, “Hell, I don't even know where I am.” He's from Cuba. So they said, “Well, come with us to Helena.” So he said, “Okay.” So he went down to Helena and saw there're too many doctors there and backtracked to Monroe, Arkansas. And that's where he ended up. And you can believe that.

[00:07:14] KM: No.

[00:07:16] VH: Delivered 4,800 babies.

[00:07:18] KM: So he's an OB/GYN.

[00:07:20] VH: No. He was a family practice doctor. Pulled teeth, had a dental chair in his office, pulled teeth. Saw patients every day. Worked till he was 85 and –

[00:07:30] KM: Where did he meet his wife?

[00:07:31] VH: Well, he met her in New York. So he kind of tricked my grandmother. So he came down and got his practice, went back to New York and said, “Hey, come to Monroe and we'll work here for a couple years and then we'll move back there.” But that didn't happen. So he brought her back from New York. So –

[00:07:50] KM: Where's she from? Was she American?

[00:07:53] VH: Yes. Her family was from Sicily as a matter of fact, which is another story right there. Pretty cool.

[00:07:59] KM: Okay. Go ahead.

[00:08:00] VH: No, I won't tell that.

[00:08:03] KM: I think this is a great place to take a break. When we come back, we're going to continue our conversation with Mr. Val Hansen of Val Hansen RE/MAX Properties in Little Rock, Arkansas. Still to come how to get a real estate license? How they ended up in North Little Rock? How to build wealth through assets, not debt? It may not be what you think. And of course, the business of rental property, the good, the bad and the ugly, evictions and mortgage loan payments during the pandemic. We’ll be back after the break.

[BREAK]

[00:08:34] ANNOUNCER: Looking at some of the upcoming guests on Up In Your Business with Kerry McCoy? We will re-feature one of the most compelling interviews Kerry's ever done on Up In Your Business with Madonna Badger.

[00:08:44] KM: Founder of Badger and Winter's Advertising Agency in New York City. Madonna was raised in Kentucky, was an excellent student and an overachiever, evident by her successful business in one of the toughest cities in America, New York City. She was living the American dream when a profound tragedy struck that propelled her into overnight fame for an incident so devastating that even though it was in 2011. Many of you will remember it. It was Christmas morning when she awoke to a fire in her upstate New York home that claimed the lives of her three daughters, Lily, Grace and Sarah, and the lives of her parents, Lomar and Pauline Johnson.

[00:09:21] MB: I woke up to smoke in my room and the house was just completely quiet, and really dense black smoke. I couldn't breathe. It was a Victorian, so I was able to crawl out of the window and there was still scaffolding on the outside of the house. So I ran up the scaffolding on the outside of the house to the third floor and I was able to open the window, but I couldn't get in.

[00:09:48] ANNOUNCER: Don't miss this show before the end of the calendar year as we wrap up the year 2020 on Up In Your Business with Kerry McCoy.

[INTERVIEW CONTINUED]

[00:09:55] KM: I’m speaking today with businessman, Mr. Val Hansen, of Val Hansen RE/MAX Properties in the capital city, Little Rock, Arkansas. If you missed it before the break, you need to go back and you need to listen to Val’s grandfather’s story coming from Cuba, going to New York, to Ellis Island, not speaking English, graduating, become a dentist, become a doctor, becoming a surgeon. Ended up in Monroe, Arkansas, pulling teeth, delivering babies and I guess performing surgery. I don’t even know. Those were the good old days to be a doctor back then. That’s when you got to really practice and try new things.

[00:10:34] VH: Right.

[00:10:34] KM: I would love that. So before that we talked about Hansen’s being at the corner of JFK and McCain and that your parents did not own the property and that they leased it. But your father – I’m not sure how he got in the hamburger business. If his father was a doctor, was he disappointed that your father didn’t want to become a doctor too?

[00:10:57] VH: No. That was my mother’s father. He was from Cuba.

[00:11:00] KM: Oh, okay.

[00:11:00] VH: Yeah.

[00:11:01] KM: So how did you father – How did your mother meet your father and end up in the hamburger business?

[00:11:05] VH: Oh, they met down in San Antonio. He was a drill sergeant at Lackland Air Force Base, and then met my mom. She was going to college down there. And they got married and moved back to Little Rock. And then my granddad got my dad started in the Dairy Queen business.

[00:11:22] KM: Dairy Queen business.

[00:11:22] VH: Yeah, that’s right.

[00:11:25] KM: And then you said that for some reason your grandfather and your parents were buying up these pieces of land here and there and then decided to liquidate them and let you sell them and kind of got a taste for it. So you didn’t have to come up with your own capital at first, or did you?

[00:11:41] VH: No.

[00:11:43] KM: And then when you sold it, you paid them back for it and then kept the –

[00:11:47] VH: My little money, and that was good for me.

[00:11:49] KM: When did you know that this was what you wanted to do?

[00:11:52] VH: Oh, I don’t know. I guess I kind of grew into it, because I went to school at UALR and started school out there. And then I started – A friend of mine named Aaron Cook got into selling houses and said this is a good investment. So I bought it. Fixed it up, made some money, and that’s how I started buying houses. And I was doing that when I was going to school at UALR.

[00:12:15] KM: What would you go to school for?

[00:12:16] VH: Advertising and marketing. So did that and ended up making more money than my teachers were. So I quit school. So 15 hours left and just started doing the real estate stuff. And then later on I met this gentleman who was a teacher at UALR and he said, “What’s your story?” And I said, “Well –” I told him and said lack 15 hours to graduate. So every year, Mike would bring me – Every semester a catalog and said, “You need to go back to school.” So just to appease him, I started taking like a class once a year and got my 12 hours done and it was business calculus. It was my last class to take. So that could have been Chinese. That one wouldn’t happen. I can just do 6% of whatever, and that’s all I know that day. So he went and they figured out a way at UALR for me to substitute that class for either music or an art class. I took my art class and graduated 41 years later.

[00:13:21] KM: What a good story. For some reason, I don’t know why I think this, but I wonder if you’ve read the book Rich Dad, Poor Dad?

[00:13:30] VH: I read a couple of them, yeah. Yeah.

[00:13:32] KM: I, learning about you, thought, “This guy has read the book, Rich Dad, Poor Dad. And one of the things it says that separates the poor dad from the rich dad is that the poor dad thinks you should go to school, and school teaches you to become a great employee. But the rich dad thinks you should learn financial literacy and become and entrepreneur.

[00:14:00] VH: I think both theories are good.

[00:14:03] KM: One does though create more of an employee. And then you decided you could make more money if you went out on your own and took risks.

[00:14:15] VH: Right. Well, that was just something that wasn’t for me.

[00:14:18] KM: Not your personally type.

[00:14:20] VH: Right. Right.

[00:14:23] KM: When did you decide that you wanted to go – So what was the name of your first business?

[00:14:28] VH: Hansen and Company.

[00:14:31] KM: And what year did that start?

[00:14:33] VH: Oh! I guess that was 1978, because I went to a couple of real estate companies in town. I went and took my salesman test in April ’78 and decided I want to get my broker’s license. So back then you didn’t have to wait two years. And I went in next month and took my broker’s test. So I have my broker’s license less than a month after I got my salesman’s license.

[00:14:58] KM: And for people that don’t know, a real estate agent can sell real estate. But everything you sell has to have a broker signature on it, correct?

[00:15:06] VH: That's right.

[00:15:06] KM: So you have to go to work for a real estate company that has a broker there so that you can sell and he can sign off on what you did. What is the reason for that?

[00:15:15] VH: Just from you know the experience that a broker has to guide a salesman so they don't do things wrong. Do it the right way. Now you have to have two years’ experience to even sit for a broker's test. So that's good.

[00:15:30] KM: So you started Hansen Realty.

[00:15:31] VH: Right.

[00:15:32] KM: And when did you decide – Because I noticed it's now called Val Hansen RE/MAX Properties. When did you decide I’m going join with RE/MAX? Because that's a franchise, right?

[00:15:45] VH: Yes, international franchise. I did that 1992 started.

[00:15:50] KM: You started your business in ’78. 15 years later.

[00:15:52] VH: Well I actually went to a couple local real estate companies to try to get hired. And one company that I went there six different times for interviews and stuff and they never would hire me.

 

[00:16:02] KM: Was it McKay?

[00:16:03] VH: No. It wasn't McKay. No. McKay had a great company. Randy Alexander was one of the best, if not the best back in day.

[00:16:12] KM: What happened to that company?

[00:16:14] VH: He just you know kind of retired and got sick and passed away, but there's a lot of great companies in town. Janet Jones is a close personal friend of mine. She's got a great company. A lot of great realtors in this market, sure is.

[00:16:28] KM: So you decided to go with RE/MAX Corporation. Was there something that happened, an event that happened that you thought, “I’m just going to change.”

[00:16:33] VH: Yeah. Because I was mostly working in the Hillcrest Heights area, and then when I'd venture out to North Little Rock or West Little Rock or whatever they said, “Well, you don't work out here. You just work in the Heights Hillcrest.” So I kind of you know built a brand in that area, but it didn't help me when I was trying to get business other places. So there was already a RE/MAX franchise here and a lady in Texas that I was doing a referral with said, “You ought to look at RE/MAX.” So I did. And it's funny, I went out one time to a restaurant and I passed my card across the table and someone above me that was standing up here look looked down and said, “Oh, you all sold my mom's house.” And I said, “Oh really?” I said, “Where's that?” He said, “Anchorage, Alaska.”

[00:17:16] KM: Because it was a RE/MAX agent.

[00:17:16] VH: RE/MAX. They see RE/MAX and they don’t see RE/MAX Properties or RE/MAX Advantage or whatever the case may be. So RE/MAX has been good. They're a great franchise.

[00:17:27] KM: I guess you have to split commissions with them?

[00:17:29] VH: Just a small split. It's well worth it.

[00:17:32] KM: And you have to buy into the franchise, I guess?

[00:17:35] VH: Yes, you do.

[00:17:38] KM: And you have annual reports and things you have to make up.

 

[00:17:41] VH: Monthly reports. That's right.

[00:17:42] KM: Do they send you business?

[00:17:46] VH: They do referrals. That's right. That's right. So like, for example, right now I’ve got several referrals going out and several that are coming in from other RE/MAX agents across the country.

[00:17:55] KM: I can see how that would be so good. John Silva is also in the Heights in the Hillcrest, and he was a small uh self-employed business. And he recently bought into a franchise. I can't remember what the name of it was either. And I can see how that would be good for your customer too.

[00:18:14] VH: Right. It gives you a little bit more, I guess, experience that you would get “from the home office” or stuff like that.

[00:18:21] KM: Well, if I came to you, Val, and said I want to move to Alaska. You could say I’ve got somebody up there that can hook you up.

[00:18:28] VH: That's exactly right.

[00:18:29] KM: Yeah. I can see how that would be. Good. Do you sell houses or are you mostly a landlord for rental property?

[00:18:36] VH: No. I sell houses.

[00:18:38] KM: I see your name on rental property all over the place.

[00:18:40] VH: Right.

[00:18:41] KM: That's because I live in Hillcrest in Heights though.

[00:18:43] VH: That's right. That's right. No. We sell quite a few houses. So I’ve been the number one RE/MAX agent in the state the last three years, and we'll see how we do this year.

[00:18:52] KM: You said there was already a RE/MAX here. So have you got a RE/MAX –

[00:18:57] VH: There's actually three RE/MAX franchises here in Little Rock.

[00:18:59] KM: In Little Rock?

[00:19:00] VH: Yes ma'am.

[00:19:01] KM: And that's not kind of a conflict?

[00:19:03] VH: No. It works out good. People see the name RE/MAX. So it works out good.

[00:19:08] KM: Oh, okay. Well, this is another great place to take a break. When we come back, we are going to continue our conversation with little rock businessman, Mr. Val Hansen of Val Hansen RE/MAX Properties. Still to come, what you need to know before renting your property to a new tenant. I need some tips on that. And how the pandemic has changed real estate and the apartment rental business. We'll be back after the break.

[BREAK]

[00:19:33] GM: Over 40 years ago with only $400, Kerry founded Arkansas Flag and Banner. During the last four decades, the business has grown and changed along with Kerry’s experience and leadership knowledge. In 1995 she embraced the internet and rebranded her company as simply flagandbanner.com. In 2004, she became an early blogger. Since then she has founded the non-profit Friends of Dreamland Ballroom, began publishing her magazine, Brave, and in 2016 branched out into this very radio show, YouTube channel and podcast. And today in 2020, Kerry McCoy Enterprises acquired ourcornermarket.com, an online company specializing in american-made plaques, signage and memorials for over 20 years. If you'd like to sponsor this show or get involved with any of Kerry McCoy's enterprises, send an email to me Gray, that's G-R-A-Y@flagonbanner.com. Telling American-made stories, selling American-made flags, the flagonbanner.com. Back to you, Kerry.

[INTERVIEW CONTINUED]

[00:20:37] KM: You are listening to Up In Your Business with me, Kerry McCoy. I’m speaking today with businessman, Mr. Val Hansen of Van Hansen RE/MAX Properties in Little Rock, Arkansas. At the beginning we talked about Val's interesting family and how they came from Cuba. I don't think you look like you're from Cuba. You look like a wasp to me. You've got pale, pale skin.

[00:21:01] VH: That’s right.

[00:21:02] KM: I actually went to Cuba two or three years ago when we had that little window where you could go down there. Beautiful people. Beautiful people. Beautiful place. My gosh! Have you been there?

[00:21:12] VH: No.

[00:21:13] KM: Oh my God!

[00:21:13] GM: Oh! It's so beautiful.

[00:21:15] KM: Oh! I's –

[00:21:16] GM: Cubans are varied and they look –

[00:21:19] KM: They are.

[00:21:20] VH: They don't look like me though.

[00:21:21] GM: Yeah, just like Americans.

[00:21:22] KM: No. Nobody had white hair. They all had dark hair.

[00:21:24] GM: That is true.

[00:21:25] KM: For our listeners that can't see you, those who are watching on YouTube, they can tell that you are very white-headed and have been, because I’ve known you forever. All your life, very distinguished looking in an early age. And I don't remember a lot of Cubans having – They all had dark hair in my opinion. Yep

Okay. So before the break we talked about, again, his family being from Cuba. And then we talked about franchises and RE/MAX properties. And I one time had a guest on the show and I asked him, “He was a banker. He actually loaned money to startup businesses. And I said, “What's the best startup business?” And he said a franchise. He said you should always – If you want to start a business, I recommend buying a franchise. Just makes sense.

[00:22:09] VH: Right.

[00:22:10] KM: So let's talk about building assets and wealth versus going to work for someone.

[00:22:17] VH: Okay.

[00:22:18] KM: Your parents were entrepreneurs. Sounds like your grandfather were entrepreneurs. How did that play into your thinking about risk taking?

[00:22:29] VH: Oh, I don't think buying a house or buying property is a risk personally. I think if you make the right purchase on the frontend, it's an investment. Just like buying a stock or a bond or something like that.

[00:22:42] KM: In that book, Rich Dad, Poor Dad that we were just talking about, it says what the rich teach their kids about money and what the poor and middle class do not. And you just kind of spoke to it right then. Poor dad says, “Buy a home. It's an investment.” Rich dad says, “Buy an investment. A home is a liability. It will hurt your cash flow so that you can never find an – So if an opportunity comes along, you have lost opportunities because your cash is tied up in your home that you're not going to get out.”

[00:23:18] VH: Right. But it's leveraged too. A home is leveraged. You can – I’ve seen people do all kinds of things over the years. And you can buy a home and live there for a few years and then rent it and then go buy another home. Live there a few years and rent it and just start building your assets like that.

[00:23:37] KM: And that's what you did.

[00:23:39] VH: Pretty much, yeah.

[00:23:40] KM: So my problem is – And I have been very successful at buying houses and selling them personally, but I get married to them. I’m in love with this house and I have a hard time letting go of it and looking at it, because it's the house my child was born in or the house I’m in now I’ve lived in for 26 years. I should have capitalized it and got out a long time ago.

[00:24:05] VH: Or rented it a long time ago.

[00:24:07] KM: Yeah. So that is the one way that the Rich Dad, Poor Dad book talks about. And if anybody – That book is 20 years old and it is really worth the read. It's not very long .You can download it or listen to it on Audible.

Let's talk about the other things they say about it. Poor Dad says I can't afford stuff. Rich dad says, “How can I afford stuff?”

[00:24:39] VH: Right.

[00:24:41] KM: And that talks about kind of giving yourself a pass, “I can't afford it. I’m going to be a little bit mentally lazy about that.” Or, “How can I afford it?” And your brain starts working and going to work. How does somebody afford a house the first time? Are there first-time buyer loans that are cheap for people?

[00:25:05] VH: No. Pretty much any loans are cheap right now at 2.5% – I mean 2.5% to 3%. So now's a great time to –

[00:25:13] KM: How about down payments?

[00:25:15] VH: There're all different ways you can do down payments. So 3% down, there's loans called rural development loans where you get in for zero.

[00:25:26] KM: What does that mean rural development loans?

[00:25:28] VH: Some places in Benton or Bryant or maybe outside of Jacksonville. There's designated areas where they claim that as a rural area and you can get in there for zero down.

[00:25:40] KM: Because they want it to grow and develop. So they're giving you incentives. Is there something about a no down payment on your first home you buy? There used to be something like that.

[00:25:47] VH: Years ago they did. That's probably been 20 or 25 years ago.

[00:25:51] KM: No, it was not. Really?

[00:25:53] VH: Yeah, I don't think so. I haven't seen –

[00:25:54] KM: Gray, you just bought a house. Did you have to put a home down payment on it?

[00:25:58] GM: I did. Well –

[00:25:59] KM: You don't remember.

[00:26:01] GM: It was complicated, but yes, I did. Short answer is yes.

[00:26:07] VH: Or you can get a veteran, a VA loan is no down. No down payment.

[00:26:10] KM: Oh.

[00:26:11] VH: Yeah. But if you do FHA or if you do a conventional loan, you have to do a down payment.

[00:26:18] KM: Okay. Poor dad says money is the root of all evil. Rich dad says lack of money is the root of all evil.

[00:26:29] VH: Right. I think it's the love of money is the root of all evil.

[00:26:32] KM: There you go. That's right the love of money is the root of all evil.

[00:26:35] VH: Right. Right.

[00:26:37] KM: And the lack of money is the root – Because you end up doing things you shouldn't do if you don't have any money.

[00:26:41] VH: Right.

[00:26:41] KM: Poor dad says save money, rich dad says spend money. And that's not like on a pair of shoes that I would like to do. But that's like not being afraid to try to do something a little bit risky.

[00:26:54] VH: Right.

[00:26:55] KM: We talked a little bit about this too. School creates great employees. It teaches you how to come out of school and to be a great employee, it's very safe. But financial literacy makes entrepreneurs. And I feel like your family who kind of helped you start by letting you sell a piece of property taught you financial literacy at an early age. How old were you when you sold your first piece of property?

[00:27:25] VH: 18.

[00:27:26] KM: Yeah. That's financial literacy that you cannot find in school.

[00:27:31] VH: Right.

[00:27:34] KM: All right. This is a good one. Work wages. Work for wages and benefits, versus work for income. So if you are buying property and you sell it and you make a profit, you don't pay social security taxes on that.

[00:27:56] VH: Well, you pay capital gains taxes though. You do have taxes to pay when you sell it.

[00:28:02] KM: You have income tax to pay, because you made income.

[00:28:04] VH: Right.

[00:28:05] KM: Is that the different from capital gains or is it the same?

[00:28:08] VH: Same thing, yeah.

[00:28:09] KM: But when you work for wages – So for people to build assets and wealth through real estate, when you work for wages and you get a $10 paycheck, 7% of that is going in to your social security fund for when you retire. And the employer also matches it 7% percent of it. And that only is done if you draw wages.

[00:28:38] VH: Right.

[00:28:39] KM: But if you actually sell a house and make a profit, there is not that burden to pay those social security taxes.

[00:28:50] VH: Not social security, but you still pay your taxes on your capital gains taxes. So you’re still going to pay taxes. But if you don't sell it, if you just keep it and rent it then you're making money from there on out. Or really, your tenants are making money for you. They're paying your payment, right? Just like on yours.

[00:29:08] KM: And you're growing on assets.

[00:29:10] VH: That's right. So someone's growing an asset, your assets, on your rental property too. You're not making those payments every month. They are, right?

[00:29:19] KM: Right. There was a gentleman down my street who actually opened up a bike shop and he rented the house down the street from me, but he used all of his money to start his business. So would you rent – So if you were starting off, would you rent an apartment? Would you go out and buy a house and then rent it out to somebody else and then you personally go live in a cheaper apartment?

[00:29:46] VH: Maybe not, but people do do that. That's right. And I rent my office now. I’ve been in my office for same place for 25 years.

[00:29:55] KM: And you rent it?

[00:29:55] VH: Yes ma'am.

[00:29:56] KM: With all the property you own?

[00:29:58] VH: Yes ma'am.

[00:29:58] KM: Must be a cheap office.

[00:29:59] VH: No, it's not. No. It's a great office.

[00:30:03] KM: What's the reasoning behind that?

[00:30:05] VH: Just something I’ve never wanted to own my own space like that. I still have my own old building down on Van Buren that I used to have my office at, 400 North Van Buren, and it was there. But you know besides that, no, I think that just works for me. Everyone's a little different.

[00:30:25] KM: So the poor dad works for money and the rich dad has his money work for him. I really recommend somebody reading this book because it really talks about what – And I’m sure there's lots of real estate books out there that talk about how to do that. So if somebody wants to get a real estate license, what do they need to do?

[00:30:43] VH: Well, they're going to have to go to a real estate school. There're quite a few good real estate schools here in Little Rock and there's 60-hour courses. And then they go to school and then they get their background check and then they go and take their real estate test.

[00:30:58] KM: Is it hard? Did you pass it the first time?

[00:31:01] VH: Yeah, I passed it. So anyone can do it if I can do it. That's for sure.

[00:31:07] KM: So to someone who would like to have a career like yours, how do you recommend them getting started?

[00:31:12] VH: Oh, I would say first they have to go and get their license and then pick –

[00:31:19] KM: But you really don't have to have a license to buy a piece of property and have a renter, do you?

[00:31:25] VH: No. You don't have to do that. But it helps. It gets you in an area where you see a lot more properties. Sometimes people call and want to sell something and you have the opportunity to buy it yourself or whatever. So I would highly –

[00:31:43] KM: Oh, I see.

[00:31:44] VH: Yeah. So you can do both at the same time. And it's two forms of income too. One, selling houses, making commissions. And two, purchasing houses. Having renters pay for it for you.

[00:31:54] KM: Right. If you get your license and start selling property, you're going to start to see some deals out there that you can buy.

[00:31:58] VH: Yes, you'll see deals. That's for sure.

[00:32:02] KM: What type of property should you probably be looking for? Or is there something specific?

[00:32:05] VH: To me – Everyone's different. Some people love commercial properties. Some people like apartments, different areas of town people, like better. I just like mostly single-family residents.

[00:32:19] KM: Why?

[00:32:20] VH: To me, it was fun to fix them up. It's fun to buy them, especially ones that needed a lot of work. So that's what most of them I bought in Hillcrest were. They needed a lot of work. And it's fun to take it from an old, drab looking property and then fix it up. And then like you say, you can't get rid of your places. And it's fun to rent them and keep them.

[00:32:44] KM: It's creative.

[00:32:45] VH: Right.

[00:32:47] KM: How many properties do you have?

[00:32:48] VH: I don't know, quite a few.

[00:32:50] KM: A lot, huh? Good! And you have to keep up with the expenses for each one. So the income, I guess, for your bookkeeping, you have to keep up with this property, has this income and has these expenses that are related to it.

[00:33:04] VH: Right.

[00:33:05] KM: Individually. You can't just lump it all together into one big group.

[00:33:08] VH: No. You want to keep separate so you'll know which ones are doing well and which ones aren't.

[00:33:12] KM: So is there any guideline for buying properties like the neighborhood?

[00:33:19] VH: Neighborhoods, and is it going to be easy to rent, if you're going to rent something? With the Med Center being right there, that's a great area to buy houses in, because you've got all those Med Students, all the nursing students. So it's a great – All the residents are over there.

[00:33:37] KM: And they don't party because they're studying so hard.

[00:33:41] VH: They're great. And when they move in, they usually stay – If they're in med school four years. If they're doing a residency anywhere from three to seven years depending on what their residency is, and they're great.

[00:33:53] KM: What's the hardest part of your job?

[00:33:55] VH: Hardest part. It's just long, long hours.

[00:34:00] KM: Because everybody wants to go see the property at dinner time.

[00:34:03] VH: Well, that or calling about you know things that are wrong or things like that.

[00:34:08] KM: Do you have property managers?

[00:34:10] VH: I have people that help me. Yes ma'am.

[00:34:11] KM: Maintenance. That's the one that would get me.

[00:34:14] VH: Right. That's interesting too.

[00:34:16] KM: Do they call you?

[00:34:18] VH: No. They call the office usually. Sometimes they'll call or text me or something.

[00:34:24] KM: What's the number one thing breaking? Washing machines?

[00:34:27] VH: No. Well, maybe a disposal. I had a guy call me for the second time the other day about his disposal and he don't know what to put in the disposal and what doesn't go in there. I just told him. I said, “If you call again, we're going to take the disposal out,” Because I don't know what he's putting into disposal. But he's not supposed to put what he's putting in there.

[00:34:48] KM: Glass. Don't put glass in the disposal.

[00:34:51] VH: Probably wouldn't be a good thing.

[00:34:53] KM: Renting and showing property. I have to just tell you this. I’m a girl. I don't know if I want to meet people out and rent and show property.

[00:35:01] VH: Right. Yeah, it's just like showing houses too.

[00:35:05] KM: I don't know if I want to do that.

[00:35:05] VH: Right. You have to be careful nowadays. Guys do too, not just girls.

[00:35:11] KM: Do guys really –

[00:35:12] VH: Yeah, that's true.

[00:35:13] KM: So are you packing when you're showing houses?

[00:35:15] VH: No. I’m not packing.

[00:35:18] KM: All right. You bought and moved a house once.

[00:35:22] VH: Oh my gosh!

[00:35:23] KM: How bad is that? And do you recommend that?

[00:35:26] VH: Never move a house. Never move a house.

[00:35:27] KM: I have thought about doing that before.

[00:35:29] VH: No. Don't do that. So that was a house down on Ash Street. I think it's the 400 – No, 500 block of Ash or 600 block of Ash where Bossa Nova Restaurant is now.

[00:35:42] KM: Oh yeah?

[00:35:42] VH: That's where it was. And that used to be an Esso station or Exxon, if you want to use Ben Sagala Esso Station right there on the corner. And I knew Mr. Sagala. And I kind of put that deal together for a developer and he gave me the house. And then Bud and Janet Jones owned a lot up on Kenyon. And I talked to Bud and they sold me the lot. I think I paid maybe $10,000 for the lot. Got the house for free, right?

[00:36:12] KM: Oh, you can have it if you move it.

[00:36:14] VH: You can have it if you move it .And move the house down Kenyon. What an experience. And I'll just –

[00:36:22] KM: Took out some trees?

[00:36:24] VH: I don't know. I stayed away. Because if social media existed back then, I'd have been roasted. But no, that's the worst thing I’ve ever done. So now I got a $10,000 and a free house and I still lost money on that deal.

[00:36:38] KM: Uh-oh!

[00:36:39] VH: Oh yeah. That wasn't fun. But the house looks good now. If you drove down the street –

[00:36:43] KM: On Kenyon?

[00:36:44] VH: On Kenyon. I think it's uh 4408 maybe? No. No. No. No. Maybe 4409, something like that, 4411 Kenyon.

[00:36:54] KM: So why do people buy farmland? Do you sell farmland or you just sell residential?

[00:36:58] VH: Just residential.

[00:36:59] KM: Why do people buy farmland?

[00:37:02] VH: Rice crops? I mean –

[00:37:04] KM: I mean but the rich people buy farmland. What's the asset advantage to that?

[00:37:10] VH: Oh, I think, well, that’s good investment and it's going up like any kind of land is. So farmland is great.

[00:37:19] KM: What's the biggest mistake you made starting out?

[00:37:22] VH: One of them is moving a house. So that's for sure. Probably not being persistent enough to work for somebody to kind of learn how they do things.

[00:37:31] KM: Don't you think that's just the nature of an entrepreneur?

[00:37:34] VH: Yeah. But again, I tried. Like I said, I went to two different companies here in town and – It was 1980s when I started to do that. Interest rates were 18%. They couldn't figure out why I'd want to go. And one of one of them said, “If we're not selling houses now, why do you think you can?” So good question too. But probably should work for somebody. That would have helped.

[00:37:59] KM: I don't know. You're doing very, very good. You're listening to Up In Your Business with me, Kerry McCoy, and I’m speaking today with businessman Mr. Val Hansen of Van Hansen RE/MAX Properties in Little Rock, Arkansas. So we've had some great conversations, Val and I have. I’ve really enjoyed it. I love real estate. I’ve got a little bit of my own, not very much. I’m really in the flag business. So I don't really want to spend a lot of time on rental property, but I do have an addiction somewhat. If I'd had more money growing, when I was younger, I'd own half of Little Rock by now. Money – I like to fix stuff up. But managing tenants is hard. I mean I had a story that I’m not going to bore you with. Just two months ago about a crazy tenant. So what are some rules you should enact to protect yourself about property?

[00:38:55] VH: Well, I guess it's all in the screening process and where your houses are located too.

[00:39:02] KM: Are you doing Airbnb?

[00:39:03] VH: No.

[00:39:03] KM: You're not?

[00:39:04] VH: No.

[00:39:05] KM: You're the only person not doing that.

[00:39:07] VH: I know.

[00:39:08] KM: Are you going to?

[00:39:08] VH: Oh, I thought about it at one time. But I probably have enough to be right now.

[00:39:12] KM: You got a good thing. Airbnb is short-term, very short-term. You make more money, but you got to have a good housekeeper to come in and keep it clean all the time.

[00:39:21] VH: Right. Yeah, I remember you telling me about yours. You're doing good.

[00:39:24] KM: I’m thinking I’m going to – Yeah, I’m going to do that. So make them sign a new lease each year and inspect the property then. This was a mistake that I made. I let a guy live with me for – Live not with me. Live in a place that I had for eight years. And I’m a very relaxed person and I didn't do leases or didn't renew leases. Probably did one in the beginning. I don't remember. But I wouldn't have ever enforced anything anyway. I don't know why you do that. But I never made him renew one. And when he finally moved out, it was unbelievable inside of there. Do you go in every year?

[00:40:07] VH: We go through and spot check. And a lot of times they'll call us about needing something fixed or whatever and then we always look to see how people are keeping their place. Yeah.

[00:40:15] KM: So do you recommend signing a new lease every year so that you can go into the property and see what's going on?

[00:40:25] VH: Oh yeah. You have to you have to renew their lease every year. Absolutely.

[00:40:29] KM: What's the dirtiest one you've ever gone into?

[00:40:32] VH: Oh. I’ve had some unbelievable places.

[00:40:35] KM: Birds. Birds are nasty, aren't they?

[00:40:38] VH: I’ve seen stuff – And showing houses too that you can't even fathom.

[00:40:44] KM: The people lived like that.

[00:40:45] VH: Yep. Yeah. It's been unbelievable.

[00:40:47] KM: So you watch that show hoarding on TV?

[00:40:49] VH: Oh, I got them better than that. I got them better than – I just sold a house, four, five – Three or four months ago in the Heights.

[00:40:58] KM: In the Heights?

[00:40:59] VH: In the Heights. Probably one of the worst I’ve ever seen.

[00:41:03] KM: In the Heights.

[00:41:03] VH: In the Heights.

[00:41:04] KM: So for people who don't know, that is one of our richest neighborhoods.

[00:41:07] VH: Right.

[00:41:08] KM: How long did the person live there?

[00:41:10] VH: I think he'd been there for quite a while.

[00:41:13] KM: 30 years?

[00:41:13] VH: Probably. He's on that house for 30 years. Yeah. It was a sight to behold. You couldn't walk from the dining room into the kitchen.

[00:41:23] KM: A trail.

[00:41:24] VH: No. You couldn't walk. It was up to the top of the door.

[00:41:28] KM: Hoarding.

[00:41:29] VH: Yeah.

[00:41:29] KM: Can't throw anything away. That's a real mental condition where you really cannot throw things away.

[00:41:35] VH: Right.

[00:41:36] KM: Pets?

[00:41:39] VH: There're some people smarter than me that don't let anyone have pets in their houses, and that's probably the smart way to do it. But I usually allow pets. But it just depends on the pet too.

[00:41:55] KM: The kids today that are renting houses, the younger, the millennials, those are probably a lot of the people that rent. Their pets are their children.

[00:42:02] VH: Right. That's right. That's true.

[00:42:04] KM: We had four of my children for Thanksgiving that I see all the time, because we work together. And because it was Thanksgiving, they didn't bring their kids. They brought their pets. And there were six pets in sweaters.

[00:42:19] VH: Oh my goodness!

[00:42:20] KM: With toys. It was like, “These are just kids. They’re wearing clothes and you brought their toys.”

[00:42:26] VH: That's awesome. That's good. Most of them take care of their pets though very well. They really do.

[00:42:32] KM: Yeah, they do. Yeah. What about deposits? Do you give them back ever? I never get a deposit back. I can always find some reason not to give one back.

[00:42:39] VH: No. I try to give them back to these people. Yeah, that's not the purpose. I just want them to leave it clean when they leave and the normal wear and tear.

[00:42:50] KM: So let's talk about how the pandemic has changed your business, because I don't have anyone renting for me that was affected by the pandemic and couldn't make no payments. But I do see it on the news that they've stopped evictions. I don't remember what that law was or what was passed that put evictions on hold. And first thing I thought was, “Well, great. That's great.” But then there's another guy that's making – But then their landlord could have a note payment on that and they have to keep making their note payment or their credit goes. So what's the balance there?

[00:43:31] VH: Well, it seems like in Little Rock that hasn't affected our market as much as other markets I’ve heard around the country. Again, it just depends on your tenants. So we went to a lot of med students, a lot of residents, some doctors. So they seem to all be doing well.

[00:43:51] KM: So you haven't had to do that?

[00:43:52] VH: No.

[00:43:53] KM: One time I thought I was going to have to evict somebody and I called to ask about it. This was years and years ago. And it's pretty hard.

[00:44:05] VH: It is, but unless you get a pro that knows that's been evicted before or knows what the system is, most people that haven't paid rent, they're going to get out. They don't want to go and have to deal with going before a judge or things like that.

[00:44:22] KM: What do you do if you need to evict someone? Do you have to go to the courthouse?

[00:44:26] VH: Well, you do a 10-day unlawfully or eviction notice. You can do a three-day unlawful detainer, which if you'd have to take that with an attorney to the courthouse and have them evicted like that. But then that costs you some money. But you do a 10-day eviction notice. If they've been behind on their rent, most of them will go ahead and leave.

[00:44:45] KM: And you can do that by yourself. Just go to the courthouse and do that yourself?

[00:44:48] VH: Yeah, you can do an eviction notice yourself, right?

[00:44:51] KM: And then somebody will go out there and serve them?

[00:44:55] VH: Usually I try to get a process server to do that. That's the best way to do it.

[00:44:59] KM: And then the eviction notice tells them they have how many days?

[00:45:02] VH: 10.

[00:45:03] KM: Why did I think it was three months when I tried to do it?

[00:45:06] VH: Yeah. No. It's 10 days.

[00:45:08] KM: Okay. Well, for some reason, I thought it was longer than that. So you have a property manager. I’ve noticed that there are some real estate agencies that sell houses, but they actually have a property management division in their real estate company. Do you have a division in your real estate company that manages other people's properties?

[00:45:31] VH: No. We don't do that for anyone else. Just for myself.

[00:45:35] KM: Do you recommend that for other people?

[00:45:38] VH: Again it depends on how many units they have. It just depends on how many units they have.

[00:45:44] KM: Yeah. Well, I’ve sure enjoyed visiting with you.

[00:45:49] VH: Well, thank you for having me. I appreciate it.

[00:45:52] KM: Oh! You're so welcome. It's good to see you. Good to visit with you. I brought you a gift.

[00:45:55] VH: Oh, good.

[00:45:56] KM: That's a US and an Arkansas flag.

[00:45:58] VH: Oh, thank you very much.

[00:46:00] KM: You're welcome. Are your mom and dad still alive?

[00:46:01] VH: No they're not. No they're not.

[00:46:05] KM: But, yep. There's a US and an Arkansas desk set. Do you have one?

[00:46:08] VH: No, I do not.

[00:46:08] KM: Well, you do now.

[00:46:09] VH: I do now. Thank you.

[00:46:10] KM: You're welcome. I just want to say to all of our listeners, thank you for spending time with us. We hope that you've heard or learned something that's been inspiring or enlightening, and that whatever it was will help you up your business, your independence, your life. I’m Kerry McCoy and I'll see you next time on Up In Your Business. Until then, be brave and keep it up.

[OUTRO]

[00:46:33] GM: You've been listening to Up In Your Business with Kerry McCoy. For links to resources you heard discussed on today's show, go to flagonbanner.com, select radio and choose today's guest. All interviews are recorded and posted the following week. Subscribe to podcasts wherever you like to listen. Kerry's goal is simple, to help you live the American dream.

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