The 6-Letter Acronym That Helps a Pharmacist Manage His Side Hustle

  • Real estate investor Ryan Chaw nets $ 6,000 a month from his rental properties.
  • He uses the acronym ALLIES to manage his side gig so he can work full-time as a pharmacist.
  • It stands for: Agent, Lender, Licensed Contractor, Inhabitants, Tax Expert, and Supervisor.

Though Ryan Chaw spends most of his professional time working as a pharmacist, he earns the bulk of his money through his side hustle: real estate investing. “I spend about an hour a week on real estate,” Chaw said, adding that this number can vary depending on the month.

He first became interested in investing in real estate as a way to build wealth while still maintaining his full-time career as a healthcare professional. He bought his first property in 2016 and now owns six properties (and is actively looking for two more) across California that currently net about $ 6,000 per month.

Still, Chaw loves being a pharmacist and plans to keep his day job for the time being. For him, the key to managing both responsibilities is keeping real estate as passive as possible. Here, he shares exactly how he does this.

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The acronym he uses to minimize the hours he spends working on real estate: ALLIES

According to Chaw, the secret to passive real estate investing has less to do with the property itself, and more to do with the people involved in the operation. “When you start in real estate, you want to build a team around yourself and rely on their expertise to help you build your business,” he said.

In Chaw’s experience, this core team can be summarized with the acronym ALLIES. “It’s kind of silly,” Chaw said, but it works.

‘A’ stands for Agent

“You don’t want to just have an agent,” Chaw explained. “You want an agent who has worked with other real estate investors.” This means that when he’s looking for new properties to acquire, the agent is better equipped to help him find exactly what he needs in less time. “They will know what you’re looking for and how to run the numbers.”

As an investor, the things Chaw is looking for in a home are different from what an individual or family might want for a property they’re purchasing to live in full-time. For example, details like granite countertops or crown molding might be important for a family or couple, but they’re not going to add a lot of value to a rental property. Chaw, on the other hand, is often looking for square footage to add additional bedrooms, proximity to a school campus, and the amount of cash flow he can expect.

“Having a real estate agent who really gets what you’re looking for as a real estate investor is so helpful,” he said. “If they’re an investor themselves, that’s even better.”

‘L’ stands for Lender

Finding the right lender can make a big difference in the amount of cash flow a property can generate each month or year, so it’s important to do proper due diligence. “Usually, I’ll talk to at least three different lenders to see what kind of terms they can get me,” Chaw explained.

Then, he’ll use quotes from other lenders to negotiate the best rate possible. “I’ll say, ‘I’ve got a lender who gave me this type of loan, and it’s a lot better than the loan you offered me, are you able to beat that?'” He said. This type of upfront work means he gets the most out of the properties once they’re in his name, increasing the cash flow and allowing him to focus on other things.

‘L’ stands for licensed contractor

As the owner of all the properties, Chaw is responsible for any repairs or updates any of his homes may need. Knowing the right people to call – and having the trust that they’re capable of handling any issues – makes it easier for Chaw to stay focused on his personal life and professional obligations as a pharmacist even when something goes wrong at one of his properties.

“I usually recommend having two types of contractors,” he said. The first may act more like a handyman. “Maybe the toilet broke, for example, and I’ll have them go in and repair that,” he said. The second contractor should be able to handle bigger renovations, things like roofing or adding in additional walls and rooms. “The guy who put up walls on my very first house is the same guy who put up walls on my other houses,” he said. After establishing a good working relationship with these contractors, Chaw said he doesn’t have to supervise projects and spend time researching people to hire.

‘I’ stands for inhabitants

“Your tenants are part of your team,” Chaw said. He starts by fully vetting potential tenants to make sure they’ll be respectful of the home and pay rent in a timely manner. Chaw mostly rents his properties to college students and said, “I usually look for students who demonstrate professionalism.”

While ensuring that tenants will be responsible and respectful of the property is important, Chaw has also set up systems that allow his residents to solve certain problems for themselves. For example, if the internet breaks, the tenants know exactly which number to call, what name to give, what the account number is, and any other pertinent information. “This basically lets them troubleshoot with the agent on the line versus calling me up and I have to be the middleman,” Chaw said.

‘E’ stands for tax expert

“I think it’s really important, especially if you have two or more properties, to get a tax accountant as soon as possible,” Chaw said. Not only does this mean spending less time come tax season filing and sorting out paperwork, but it also means the expert can help him find all expenses that are tax-deductible. “Tax law is very complicated,” he said. “Rather than trying to learn it all myself, I want to go to somebody who’s studied this their whole life.”

‘S’ stands for supervisor

The last piece of the puzzle, according to Chaw, is the property supervisor. “That can either mean self-management or hiring a property manager,” he said. Either way, there needs to be someone who can oversee the day-to-day operations.

While a property manager would make the operation even more hands-off, Chaw prefers doing this job himself. He likes marketing the properties and talking with potential tenants, so for now, it’s a responsibility he’s happy to take on. “It’d definitely be harder to do if I didn’t have these other systems in place,” he added.

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