BiggerPockets Money Podcast - 291: Turning eBay Profits into Cash-Flowing Rentals w/The Frugal Gay

Episode Date: April 11, 2022

eBay flipping isn’t something new. You’ve probably bought something on eBay that was sold by a reseller. Maybe a type of makeup you liked got discontinued. Maybe your favorite pair of jeans from a nationwide chain suddenly disappeared. For eBay resellers like today's guest, Tom Brickman (The Frugal Gay), it’s all about finding the products that people love but can’t get a hold of anymore. Tom is a master of frugality. Raised by a real estate investor, he knew what cash flow could do to a nine-to-five worker's life. So, at age twenty-one, Tom cashed in some company stock to buy his first multifamily. He inadvertently house hacked and was living in his own place for a whopping $138 per month! From there, he moved from his native Ohio to Texas where he got a full-time job, built his eBay flipping business, and never stopped reinvesting into rentals. As a side-hustle addict, Tom shares numerous stories about how he made (and lost) large sums of money by reselling on eBay. He even bought an entire house on eBay at auction, which came with bullet holes included. Talk about a deal! Now, retired well before sixty-five, Tom lives a life he loves with his partner, thanks to financial frugality!  In This Episode We Cover Why frugality at a young age can compound into massive wealth-building benefits  ESPP and reinvesting your paycheck so you can use investments to buy cash flow What makes a great eBay flipping product and how to find the best deals around  Commercial real estate investing and rehabbing properties for enormous equity gains  Buying homes at auction online and why you shouldn’t solely trust the zip code a house is in Paying off credit card debt quickly through hard work and smart money management  And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Scott's Instagram Mindy's Twitter Apply to Be a Guest on The Money Show Podcast Talent Search! 5 Frugality Myths Americans Believe That Would Make Ben Franklin Cry A Beginners Guide to Hack Your Housing and Live for Free How to Pay Down Bad Debt—Fast! Check the full show notes here: https://www.biggerpockets.com/blog/money-291 Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Vaker Pockets Money podcast, show number 291, where we interview Tom Brickman, The Frugal Gay, and hear about side hustles, real estate, and flipping products on eBay. You know, I've been with that company that moved me to Texas for 15 years. I left them just this past January. And if I wouldn't have done that investing in 2010, 11, 12, 13, I went aggressive from 10 to 15. I wouldn't have been in that position to be able to leave that 9 to 5 job. Hello, hello, hello. My name is Mindy Jensen.

And joining me today is David, hip, hip, paray from the military millionaire group podcast, mastermind, blah, blah, blah, blah, blah. All the things. All the things. All the things. Thanks for joining me today, David. David and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe that financial freedom is attainable for everyone,

no matter when or where you're starting. Absolutely. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate or start your own business. We will help you reach your financial goals and get money out of the way so that you can launch yourself towards your dreams. I'm super excited to talk to Tom today. I have been following him on Twitter for a long time, probably six or eight months now. And I love his stories about real estate. I love his stories about flipping products on eBay.

That's actually my favorite thing because I am a little bit jealous. I live vicariously through him and his side hustles with the flipping just because I tried it. I didn't do well. I didn't have any sort of method to my madness. I just would buy things on a whim. Oh, look, this will be great. And then it wasn't. And I crashed and burned.

And, you know, my $20 investment never went anywhere. Wow, go figure. So I'm super excited to talk to him and see how he makes it happen. Yeah, I agree. I mean, the eBay stories are phenomenal. And some of the stuff that he's doing is just super unique. and super cool. But what I really like is that it shows that you can side hustle with minimal time and minimal capital outlay. It doesn't take a whole lot to get into this side hustle.

And there's a ton of other sidehouss out there. So it just shows that starting anywhere, you can absolutely make a ton of progress towards your financial goals. Yeah, he's generating income when he wants to. If he decides that he doesn't want to sell anymore, he could just pull everything off eBay for a while. Or if he decides he wants to work more, He can go find more product and put it online. So I really like the flexibility of this side hustle. It does take a little bit of work figuring out what products are working, but he's got some tips for how to easily figure out what is selling and what is it, you know,

as you're at the store. So I think that's a lot of fun. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress.

Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com

for half off your first year. That's 50% off at Monarch.com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun, calculating quarterly estimated taxes? But somehow every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards, and find tax write-offs you didn't even know existed.

It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Sound makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's fowundd.com. Found is a financial technology company, not a bank. Banking services are provided by lead bank member FDIC.

Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leaner Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being.

What makes Audible so powerful as its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a mass. massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. Tom Brickman, the frugal gay from Twitter and Instagram.

Welcome to the Bigger Pockets Money podcast. I am so excited to talk to you today. I'm excited to be here. This is awesome. Okay, I know that you have a ton of things to talk about because you literally do everything, real estate and side hustles. And we have a lot to learn from you today. So let's jump right into it.

Where does your journey with money begin? So I would say my journey kind of started around six years old. My father was a police officer. I am the oldest of four kids. My mom stayed home with the kids. So I remember us always being tight from the very beginning. And at six years old, I remember. I remember my dad bought his first rental property.

He came into a house at the right price, a few blocks over from where we lived. And I thought it was the coolest thing in the world to go with dad to collect rent. I would go over there on the weekends and paint with him. So that was kind of the beginnings of, oh, real estate's cool. Oh, you can make money. Oh, someone else is going to pay you to live in your house. This is kind of awesome. And that is where I kind of started.

And that's where my frugality came from as. well because my dad and working with my dad over the years, I learned that he's not going to fit, you know, he's going to slap paint on it and not really fix it all the way. So he and I will butt heads, especially now. He's way more conservative than I am. And if it's broke for me, I just want to replace it. But that was the beginnings. And we were, we always had money, but we were always tight.

And we, you know, we took a family of five of us at the time and we drove to Florida. when we did a trip one year. And this was in a little geoprism, a 1990 geoprism. So a family of five in a geoprism for going from Cleveland to Ohio down to Orlando. That was a life experience, we'll say that. I know he's not going to be happy for me bringing this up, but I bring this up to him often. There was a time where he bought us new mattresses from Sam's Club, but it cost me to deliver. so we had to go pick them up in his boat because that was the only way we could move these mattresses.

And one of them blew out when we were driving home. And it was still a traumatic experience that I tell my friends today. And whenever they're like, it costs $75 to deliver. I'm like, take my money and deliver it because I don't want another boat experience. I am your dad. My dad is your dad. Oh, man. Yeah, we drove.

We had a maxi van, which is a rift. regular size van with another seat in the back of it, which is the only difference between your geo-prism? I'm thinking geo-metro, which is even worse, but not by much. Geoprism is like a tiny little, you know, Toyota camera, whatever the smallest one is, that that's what it was. That's what we drove down to Florida. Family of five. That was, that was an experience. Did it have air conditioning? It did. Yeah. I mean, it wasn't a bad car. And I mean, this was in the 90s. So it wasn't super dated, but it was just a cramped family of five in a tiny car for 19 hours driving down to Florida.

And of course, my dad doesn't want to stop along the way because you have to pay for a hotel. So that was an experience. Drive straight through? I think we took like little rest breaks along the way. But I don't remember us stopping at a hotel. Like obviously when we got there, we had a hotel waiting. But yeah, it was almost a straight shot. I think we did it in like 25 hours total.

Oh. I'm definitely a car sleeper on road trips when I'm on my own. But not with a family of five. Try and sleep with a family. Right. The family of five, that wasn't happening. Don't lay on me. Yeah. Okay. Okay. So that sounds like super awesome fun. Did you go and pick up the mattress off the road and like put it back in the boat? Or I remember being in the back seat just like and like shrill. I'm like, oh my God. It didn't hit anyone, thankfully. And I do, I think my mom and My dad went out and picked it up. I vaguely remember it was my sister's mattress, and it was the box spring, and it was broke for her whole life.

But it was. You saved $75. And I have a story to tell 30 years later. But it kind of formed me to the frugal gay where I am today. So without these backstories and going to Florida in a geoprism and. and driving down the road with a mattress flying out of your boat, I wouldn't be where I am right now. So that's what brought me here.

Okay, let's fast forward to high school. Okay, so in high school, I went to a private school. My dad paid for that. That was part of, I went to a private school. And when I say private, it was just like a Catholic high school, not like military school. I got a job as soon as I could. I worked a few, you know, cutting mowing yards. I worked at a deli.

My dad got me a job at a friend of mine. I went and worked for her uncle one summer. I did all kinds of odds and ends up until when I turned 16 and could get that first real job. And I got it. I worked two jobs from 16 to 18 when I went away to college. I worked at a deli. And I worked at the gap. And working at the gap for 5.15 an hour.

really kind of laid my groundwork for where I am today, which is wild when you think about it. But that job at 15, he filled out paperwork for me, and he signed me up for Gap Stock Purchase Plan, which I didn't even know what it was. I just thought it was a ton of tax. And all I cared about was buying clothes for cheap because I didn't want the kids at school to make fun of me. So that's kind of, you know, that Gap Stock purchase plan is what I cashed in when I was 21. and I bought my first multifamily property that way. So I didn't even know I had it until I was like 19.

Okay. So you said he filled out the paperwork. Was that your boss or your dad? My dad. Your dad. Okay. Yeah, I took it home. It was back when before everything was digital.

I took it home and I'm like, I don't know how to fill out all this. Can you help me? And, you know, he whipped through the paperwork, went back to work the next day, turned it in. And that was the beginnings of my gap stuff. I just thought I didn't. I would work like tons of hours and my checks would be like $83 and I didn't understand why, but that's how I got my first down payment. So I like that part of the story, even though I didn't have a lot of money to show.

So this is an interesting scenario that I think a lot of people can learn from, especially if they're young, but even if they're not, if you think your check is going to be X and it's way less than X. First of all, that first paycheck that you get, you're like, what is FICA? Why is my check so low? I worked 40 hours and I make, I'm old enough to make 335 an hour at minimum wage. And I should have way more money than this. And you're like, what are taxes?

That first check is really shocking. But if you think your paycheck should be X and it's way lower than X, go through and make sure that you're getting the right deductions and you're, you know, or if you think it should be X and it's way more. I have had companies where I said, I want to. contribute to the 401k. And then the next week, I get a paycheck. And I'm like, why didn't this go through?

Oh, we forgot. Okay. Well, go fix it. Because it's easy to fix that week. It's not easy to fix six months later. Or at the end of the year when you're like, wait, I was supposed to be contributing to my 401K the whole time. And they're like, well, better luck next year.

You know, so read your paycheck steps. Just like reading your credit card statements and all of those things. But this has a happy ending because you were in the Gap stock purchase plan. How much Gap stock did you have? Did you sell high? Did you just not care? And you sold it anyway when you said, so I cashed out. And I'm like, don't cash out.

And then you're like, but I bought a multifamily. I'm like, okay, let's hear that story. So, yeah, I cashed out when I was 21. I had worked at Gap since 16 to 21. Gap also had tuition reimbursement. So I was able to go to college, relatively debt-free. I paid for a semester, or I'm sorry, I paid for one class a semester, and GAAP paid for three a semester, which was awesome. But when I cashed out at 21, I was in my senior

year of college, and it was about a little bit over $10,000, and that was a perfect down payment on a $90,000 duplex. And that was kind of how I got into real estate. I saw my dad doing it. I knew I couldn't live anywhere cheaper than that duplex. My house payment was $738. The downstairs tenant paid $600. So I lived upstairs for $138. And where could you live for $138? And that was my mentality back then was I'd rather pay $138 than have this gap stock.

Yeah. I think that makes a lot of sense. And given the time that you're in, I mean, it's definitely easy to say, well, you know, hey, if you left that for the next 50 years, it could grow to X. But, you know, for one, I look at, like if it's, if it's a single company, I look at that as a little bit more risky over the long term, but also just the fact that the opportunity cost of getting into, you know, a real estate investment at an early age or getting into a way to slash your living expenses and then be able to reinvest that money, I think is, I mean, that's, that's huge. compared to just having the Gap stock. Definitely. Okay, so I will approve this stock purchase or stock sale, but you cashed out $10,000.

That sounds to me like you might have some capital gains that you have to pay. Did you have a tax bill that you were surprised by? I didn't because Gap, I think I actually sold when it was down. And it was a very, very small tax bill from what it could. have been because you were buying it at a discount when you worked there and it had fallen. It was one of those where just everything just aligned perfect to sell it. I did have a small text bill back then, but it was nothing compared to, you know, gap has not split or anything crazy like that.

Okay. So this is what year? 2004. 2004, yeah. Okay. And so where did you move next? Do you have this duplex? You're living in the crappy upstairs apartment.

I am. I got cocky. I took out a helock on that property. And I'm like, I want to live in Cleveland by my family. You know, I want to go back to Cleveland. And it's 2005. And I took out this helock. And I used it.

And I bought a single family in Cleveland, Ohio, well, right out of sight of Cleveland, Ohio. And I bought it at the top of the market. it and I post about this one a lot on Twitter because I bought it for 85 and I sold it for like 52, 10 years later. It was just one of those that I had in the business buying. When I went and took out a loan for the third property in 2009, I was like horrified by all the paperwork and questions and underwriters and all these things. I'm like, I don't understand when I bought this last house, they had me sign a piece of paper and it was mine the next day. I mean, it was like such a seamless, easy process back then, but then it made sense on why there was a financial crisis in 2008.

They were just giving loans to everyone who had no business buying properties. So, 2005, I went to Cleveland, and that's kind of 2006. I took a job with a company that said, we'll move you down to Dallas for six months for training, and we'll move you right back. And I have been in Dallas for 17 years, so that did not happen. Perfect. No big deal. Well, I mean, it sounds like you at least like Dallas. So, or I hope, otherwise, you know, maybe you could, I wouldn't imagine you stay somewhere like a expensive city.

Yeah. When you grow up in Ohio and you see all the growth in Dallas and the improvements, it's like, why would I ever want to go back? Not that I'm dogging on Cleveland because my family still lives there. I still invest in Toledo, Ohio heavily. but Dallas has been a great market to be in, especially when I entered. Okay, so let's look at your holdings. 2006, you moved to Dallas for six months. Did you buy a house in Dallas right away? Six months going on 17 years. Yeah, going 17, exactly.

I had to pay off my bad debt because I got credit cards and I had all that. And they're like, you want a third loan? Before we give you this third loan, you've got to get rid of this credit card debt. So I took on a part-time job, and I just used that money. At that time, I took this job in Texas making $33,000 a year. I took a part-time job making, I don't know, $8.50 an hour. And I just, for a year of working that part-time job, I paid off my $17,000 in credit card debt that I had racked up from 2004, five, six, seven. And this was 2009 when I finally debt-free besides real estate and was ready to buy my

first property in Texas was 2009. Was this, so I know Mindy loves credit card debt. So was this, did you take on credit card debt because you were trying to use it for like updating properties? Or was this just a time in your life where you were not frugal and enjoyed a credit limit? I was not frugal, but I was, I just, between the time that I left Gap and between the time that I found this company in Texas that I worked for for the last 15 years, I just accumulate, you know, I was doing a little bit of eBay flipping and I just kind of, the debts just grew. And I was not frugal. I wanted to have a flat screen TV. I wanted to have a DVD player, all the things that were cool in the early 2000s. I wanted.

You did the normal 20s. Yep. Okay. So you worked a part-time job. But I feel like I kept it under control. I mean, yeah. $17,000. And what were, well, what was your salary at this Dallas company when you were in 2006?

Uh, 30, $33,000. Ish. Yeah. And you had racked up $17,000 in credit card debt. Okay. I was going to be like, hey, I was going to say, Mindy's like, I don't know if I feel like that's controlled, but I'm trying to. I'm trying to. I'm trying to support you.

But hey, you paid it off. That is what we're going to focus on, is that you got yourself into debt. Many people get themselves into debt and stay there. So you didn't stay there. You paid it off. Yay for you. And you took a part-time job to do it. There are so many people who get their full-time adult job and they're like, well,

I'm not going to work part-time because this is my job now. And I'm just going to, I guess I just have debt now. And I like that you do what it takes to make money, to generate income so you can go after the thing that you want. You alluded to eBay flipping, which is my favorite part of your story, because I am jealous. You have made it work. I failed miserably.

I didn't really stick with it. I went to the thrift store. Like, I love thrift store shopping. But I can't buy everything because my husband's like, no, I don't want a house full of crap. So I'm like, oh, I'll sell it on eBay. Whatever I was buying, people were like, no. we don't want that either. That's why it's at the thrift store. So I have been a horrible failure at my eBay flipping. I want to hear how you flip on eBay and make it successful.

So I've been flipping off and on since college. I actually, there was a store outside of Cleveland. I was home and they were marking down purses when I was there. They were a good name brand diesel purse and they were a dollar 50. And I remember asking the cashier, I said, are these really a $1.50 and they had them sitting up there next to the register to try and add them on to people's sales. And I just pushed the cart right up to her and I bought every single one of them. There were two colors. And this was back before eBay even had buy it now. And I would sell them two at a time and they paid for a full semester of college. I mean, so that was kind of the origins of the eBay. And over the years, I've bought duds and I've had home runs that I didn't

even know where home runs when I was buying them. And at some point, I really switched over to eBay with the discontinued makeups, with the bras, with all those types of small, easy to ship items that are inexpensive. Dallas is super central located for a lot of closeout places to dump their merchandise. So when closeouts happen at all these different stores, they'll get shipped and dumped right in the center of the country. And I go out to the flea markets and I can, can find, you know, you can always go out there and find something. And it's like you with the thrift store, you can go to the thrift store and find something, but you got to get someone else to buy it. And the great thing about the flea market is it's so inexpensive that, you know,

when you go and invest $100 on a big box of makeup, it's a $100 investment. It's not like you're dumping, you know, some of these palettes are $30,000 for a palette and I see people doing it and being very successful, but I've always been way more comfortable with the conservative $100 box of makeup than a $30,000 palette of electronics. Okay, you just threw out a ton of keywords that people who don't flip on eBay may not understand. So first of all, you said I sell purses, I sell makeup, and I sell bras. I don't know that you are a consumer of these items. I am personally. Definitely.

How do you get started in something that you don't use? I mean, like I don't sell jockstraps on eBay. I don't know that anyone would buy that. You probably could make money. You got to go find them at a discount, Mindy. Right. It was just one of those that the opportunity was there. I worked at the gap.

So I saw what was selling, what was not selling, what people were coming in for. So I had the retail exposure. And it was just, there was a lot of opportunity there. Are you always going to need a bra? Are you always going to, you know, those are essentials that aren't going to go bad. There's very low risk. They were very low cost items. The bras that I was flipping and I turned into a condo, those were $2 originally.

And I had just met my husband and he sat with me. It took us a day to peel all the clearance stickers off of them to get them ready to resell and flip. But if you have patience and right before we were getting. getting ready to record. I was just talking about these fleece pajamas that I'm buying right now. Yes, nobody wants these pajamas right now, and that's why they're five bucks. But you know what? They're going to be $15 in October when everybody wants pajamas again. So there's lots of opportunities out there. And you don't have to have a flea market. You can literally go into a close-out

store to start scanning stuff with your eBay app and see what's selling. Okay. Explain that and then go back to the whole palette thing. Okay. Yeah. So you scan. If you have. have the eBay app, you can scan anything with a scan bar at any store that you're at, and you can filter it to see what's selling. And if there's nothing in that sold category, that means that item is something you don't want. If there's a ton in that sold category, that's something you want to put in your cart and buy.

And it's easy. I mean, it's just one of those, if you have the eBay app and start scanning, you can walk through any T.J. Max or Ross type store, and you can fill up a cart of stuff that selling and you can double, triple, you know, you can make some money on some of these items. Wow. Okay. I'm going to I'm going to get download the eBay app and go zip through and see what you're talking about. Let's get back to this palette of $30,000 of electronics. I know what a palette is. Can you can you explain what you're talking about here? Absolutely. End of season. Anywhere from Gap or Target or any of these big retailers, they're going to clearance stuff out. They're going to

bring in the new models. Electronics is really risky, especially because you get a lot of phone cases, and you know phone cases are only good for that phone version and old phone versions. I stay away from electronics. I don't want anything to do with it. But I do see people out there who are buying these pallets of end-of-season stuff and flipping them. I mean, there's a lot of money.

And yes, you may spend $30,000 buying one ballot, but you could have, you know, 3,000 pieces on it. And each piece is, you know, X amount of dollar. There's a lot of money that can be made, especially with older video games, older DVDs. There's some money there. And there's some people that just feel comfortable flipping that sort of merchandise. That sounds like something you're going to need to know about. I didn't know that you could scan the barcode with the eBay app.

But as we talked about before, I've done a decent amount of garage sale and or flea market flipping one-offs. I don't know that I've ever bought anything in bulk and sold. But I would go through and I would pull up the app and search for it. the barcode would have been super cool. But I love that. I actually did a, it was like a thousand dollar like grow your dough challenge in 20, I think 19. It was a couple different bloggers. We were going to try to see how much they could take $1,000 to over the course of the year and everyone was doing stocks or whatever. And I was like, well, in real estate, how do I get to where I can put

this money down as a down payment? And I went the garage sale route. And I mean, it was weird because it's like I'm only investing like $100, $200 a month because I'm spending $1,000 at a garage. sales actually a lot harder than you think. But I was making, I mean, by the end of the first quarter, I had like $3,500 out of that, you know, and I was like, man, if I could just figure out how to get more purchases, like there's actually a pretty decent margin there, but it's fun. So where does one get a $30,000 pallet of electronics? I mean, there's so many different resellers out there, Bulk.com as them. You can buy them on eBay, even, you know, from other resellers. I always like to try and go as close to the source as possible.

So I know when Target is pulling it, who they're selling it to. And I'm going right to who they're selling it to. Because a lot of times it gets so watered down and cherry-picked that when you get that $30,000 pellet, you could probably sell it for about $30,000, but there's not a lot of profit. And I don't want anything that's been cherry-picked through with that, with the shelf pulls. Okay.

Yeah. Yeah, you want the good stuff, the right off the bat. So this is really interesting because I never had. had barcodes to scan, and I didn't, clearly didn't know that that was a thing. But it seems like that would be a lot easier, but you're also maybe paying more or maybe not paying more because you're at, I mean, T.J. Max has some really high quality stuff just marked down sometimes really, really low compared to the original price. I remember a, there was a gorgeous leather Armani skirt and it was not my size and I was like, I'll die it and get into it.

It's an Armani skirt. I should totally buy this. But it was like normally, I don't know, $2,000. I don't even know why it was at T.J. Max, but it was like $30. And this was, well, I don't know if this was eBay time or not, but it was like, this is such a low price. Then again, would I pay $30 for a skirt? No, I'm too cheap for that. But $30 for a leather Armani skirt.

I'll pay for. I don't know. It didn't matter, but it did. Sounds like a good profit margin, though, if you flip it. Yeah, I could have flipped it if I only knew all of these things. Okay, so you mentioned that you have some... I sell leather skirts. That's one of my items that I sell. And I actually, it's crazy that I sell a lot of them, but we do. And it's a huge profit margin on them. Do you have mostly women's wear and women's items that you're selling, or do you sell men's stuff, but it doesn't sell like the women's stuff. And I can't get it as cheap. So the leather skirts, I paid two bucks for, the men's shorts I paid six bucks for. And when I sell those leather skirts, I'm selling them for 60. And when I sell those shorts, I'm selling them for

40. So I'm going to go more with the leather skirts for $2 and sell them for $60 versus the $6 shorts that I sell for $40. And so I sell both, but the women's stuff tends to sell a lot better. What doesn't sell well? Seasonal stuff. I mean, anything, Halloween or Easter, I mean, you have a tiny window to sell it. And if you don't sell it in that window, you're going to sit on it for another year. And other, like, end of season, like the, when the phones, phone cases don't sell well because you're always upgrading your phone.

And if you get stuck to a bad batch of older phone cases, you're going to be sitting on those. So I've had that. I've had candy before that. I bought a palette and it had all candy. Nobody wants that. So I just donate it. In those cases, when you get stuck with something, or I bundle. When I can't sell something, like I just was posting about, I bought these Elizabeth

Arden makeup bags. I filled them with all the stuff I couldn't sell. And then I sold the makeup bag for $10. So I didn't make any money, but I didn't lose any money. I got rid of my excess. And that's kind of, I've been really big with bundles. When I can't move it, I'll bundle it with something that's good. and those tend to sell a lot better.

That's actually really smart. I like that. That is. I'm thinking inventory management, because that was going to be my next question. Where do you store all this stuff? I mean, you've got,

500 houses, which we didn't even talk about yet, but not 500, but you've got a bunch of houses, but they're all rentals. Do you have any warehouse space? I don't. I have,

I own a retail space with storage space, but I don't use it. I rent it. And I had a 400 square foot guest house in the back of my house. and if I can't fit it in there, I can't buy it. That's kind of the rule of thumb in our house. And it did overflow into the house at some points, especially during the holidays when I was going crazy.

And, you know, we're shipping 20, 30, 40 things a day. But we just moved. And I got a two-car garage and a storage shed. And once those are full, that's my storage. And that's where my, I'm not going to spend extra money for the storage units because I'm not there. but I'm good with where I'm at. So I love this because people are always talking side hustles, right? It's a buzzword.

Everybody, oh, side hustle. And people will go, I hear a bunch of excuses for why this side hustle won't work or why that side hustle won't work. And the reality is like, this just goes to prove that you can literally make money doing like anything. Like you are buying products that you don't use at a discount and selling them and making a, I mean, a massive profit margin. And you're not tied to, like a lot of these side hustles are still tied to your time, right? You have to spend three hours driving for Uber to make the, you know,

whatever. This is on your schedule. I love it. A hundred percent. And I was working with someone, he wanted to start small. I talked to, his comfort level was Walmart. He went into Walmart last summer. He bought a bunch of clearance toys. He sat on them for a little bit. And then in, November and by the middle of December, he sold everything. And he sold enough toys that it paid for everything that he bought for people for Christmas. So that was his goal. He wanted to be able to do a free Christmas. And just by buying the, you know, I think he invested two or $300 and clearance toys in the summer.

He turned that into, you know, $1,300 in the winter. And yes, he had to go to the post office and ship him. So there's time in there. but he was able to cover all the rest of his holiday expenses just by, you know, holding these toys for a certain amount of time. And it's, you know, timing is, is half of the deal when you're flipping is those toys were worthless to people in July, but people certainly wanted to put them under the Christmas tree in December.

Well, and depending on what you're what you're buying, right? And the size, obviously, that's going to change your packaging. But the USPS will send you free, free envelopes and free boxes in, like, bulk. Like, I think I have, like, a hundred sleeve. and then I just log in and click print and I can ship a book or whatever. And I will just have like four of them and just walk by the post office and drop them off. So, you know, there's ways to streamline that for sure. So what's your biggest challenge with this eBay flipping?

Okay. For eBay flipping, it is, there's a few different challenges that go with it. There's sometimes where you just get some people that are just unpleasable. I will refund an item, even though I know that there's no defect. just because I want to avoid the negative feedback. The streamline of merchandise has not been an issue, because whenever I'm running out of that good item, I'll go spend a weekend out of the flea market,

and I'll scan and scan and find. So I haven't had a problem. And then the other thing is holding the merchandise. You know, those shorts that I bought for men I've been sitting on since last winter, and now they finally started selling this winter because I'm selling the shorts off season. None of the department stores have shorts right now, so people are buying shorts for cruises, for vacations, and whatnot. So it's holding it. And when is the right time to ditch it?

When is the right time to just say, I'm done holding this? I just want to donate it and get it out of my merch, you know, out of my inventory. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress.

Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com

for half off your first year. That's 50% off at Monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to your job notice on other job sites. Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through

Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash bigger pockets. Just go to Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast.

Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need. When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place.

Build your complete business identity with Northwest Today. Northwest registered agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. With over 1,500 corporate guides who are real people who know your local laws and can help you and your

business every step of the way. Northwest makes life easy for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. with Northwest, privacy is automatic. They never sell your data and all services are handled in-house because privacy by default is their pledge to all customers. Visit Northwest Registeredagent.com

and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money free. Where are my gloves? Come on, heat. Any day now? Winter is hard, but your groceries don't have to be. This winter, stay warm. Tap the banner to order your groceries online at Wala.ca. Enjoy in-store prices without leaving your home. You'll find the same regular prices online as in-store. Many promotions are available both in-store and online, though some may vary. Okay, so this begs the question because many people who listen to this show are money nerds and keep a spreadsheet since the dawn of time or all of their spending forever, do you take inventory and

keep track of what's selling and what's not and when's the right time. And like, you know, being in retail, I worked in retail and there's, there's the summer season, the fall season, holiday one, holiday two. You've got all these where, you know, holiday one is you're kind of selling bathing suits for people that are going to the Caribbean when it's warm, where it's warm, when it's cold by you. So you walk into the department store and you're like, why are there bikinis everywhere? Because people are buying them. Do you kind of keep a retail mindset? as well? Or do you keep track of when you're listing things? We have a small system kind of like what you didn't retail, but it's usually like I left my,

I was going to donate all my winter sweaters that didn't sell after this last Christmas, but I ended up selling 37 of them this year round. So they sat on eBay for over a year. The only cost was me storing them. But now after this last one, we went ahead and donated whatever hadn't sold. So yes, I have a, you know, okay, it's sat here for a long enough or it's close, you know, sometimes I'll sell stuff with expiration dates when it's close to the date. I'll just, you bundle it, throw it in something or donate it because I don't want it to go bad sitting there waiting for it to sell.

What do you sell that has an expiration date? Deodorant. I didn't know deodorant had an expiration date. Where do you get deodorant? There are. Like clearance? There's a close out. Clearance deodorant?

discontinued, there is a lot of money in discontinued sense of deodorant. Like, it doesn't even make sense, but they're like, this scent works for me and this scent doesn't work for me. So they will spend more money buying these. And a lot of these places, these big companies will donate, you know, their end of season or their end of production stuff. And when you have that right scent, I mean, I was shipping deodorants left and right last summer. And I wouldn't do it again because half of them melted on the way to the people. If it gets too hot, the It's going to melt. Oh, yuck.

But there is a lot of money in these discontinued colors, discontinued scents, discontinued cuts of jeans and that. Now, that I would believe, because when you find a pair of jeans that fit, when I find a pair of jeans that fit, I go back and I buy like 10 because I will not find another pair. And you got to wear them and like wear them in. So you got to rotate them through. What has been your biggest like surprise?

You know, holy cow, I can't believe this. sold for so much, like, win? I've had, I was, this was in, I bought a storage unit from a friend, and he had a lot of discontinued cents in there that he was buying from department stores when the box would get ripped or the lid would break. And he had cases and cases of this cologne. It was called Good Life. It's made by the same people as cool water.

And I'm just like, oh, cool, I can probably get 20 bucks, you know, for these. I'll list these. They're all wrapped in good shape. And they even had samples in there. And I'm like, oh, this smells good. And I have been selling those. I've sold all the colognes for $250 a bottle. And I've been selling the little samples for $22 a piece.

And I had cases and cases of them. So it was just something I never would have thought of. And then I just decided. And it was like that off chance. Like, oh, I should check this out and see what this is. And I missed one of them. There was a case of men candies cologne that I threw away. And then I, after the fact, I found one bottle.

And I looked it up. And I'm like, oh, my God, they're selling for $87 a bottle. And I just threw all those away. But it was just one of those. I would have never thought to even look it up until I was standing there. And I just did it on an off chance. How much did you pay for the storage unit? A little bit over $1,000.

And if you saw the amount that came out of the storage unit, and this friend had lots of storage units, and we bought a lot at the same time, if I would have done it right, I would have bought one at a time and really processed the merchandise. Because like I said, I threw away things like a case of candies cologne that I thought had no value. And I'm just glad I didn't throw away the cases of Good Life Cologne. Man, that makes me feel like, so my like biggest win, which is totally not replicable, was I got a print. printer for like 50 cents and I was able to sell it for like 80 something dollars and I was like you know the return was like something 10,000 percent or whatever but it's like not a huge chunk of change just a large percentage ROI 250 a bottles of like that's that's an awesome return who cares about the percentage that's a yeah you know I mean a couple cases of that I mean

you sell four you break even you can buy win you could buy I mean so so what I was doing was I was turning around and using all these profits and I was buying property and I was buying properties with them and I was buying the properties that everyone was ignoring in Texas. And that's really how I started going. After 2009 and 2010, 2011, I was buying at least one or two a year and I was using this eBay money or whatever money I could generate to buy them. And investors didn't want condos back then. And just last year, I sold a $15,000 condo for $97,000 and I turned it into a multifamily property in Ohio with it. So that, that's, you know, That's where I really grew like crazy.

And that's where I made this business big enough that I could leave my nine to five. You know, I've been with that company that moved me to Texas for 15 years. I left them just this past January. And if I wouldn't have done that investing in 2010, 11, 12, 13, I went aggressive from 10 to 15. I wouldn't have been in that position to be able to leave that nine to five job. So you bought pallets full of discontinued merchandise, sold it on eBay, took that money, and simultaneously bought more merchandise and properties that you rented out, and then sold the properties that you rented out, and 1031 them, I'm assuming, into properties in Ohio?

Yes, yeah. I'm a big fan of the 1031 exchange. I've turned lots of properties that I bought early on in Texas into much bigger. I bought a commercial space with a 1031 exchange for another property. I couldn't have got that financed if I didn't. I found financing like non-traditional financing because at the time it was super distressed. But if I didn't listen to Bigger Pockets, I would have never been able to get that completely financed because a bank wouldn't touch it.

So I was able to, you know, network with the community just from listening to the show and going on the message boards. and I found financing that way. So I got creative a long way and I used my nine to five money to buy my merchandise because I had extra money from that because I always house hacked. I always had a roommate paying my bill. I always had a tenant paying my mortgage. And then the money that I made is what I used towards my real estate.

How do you look at a piece of property that is so distressed, a bank won't touch it and say, oh, yeah, I want to take that on? Like a lot of people will pass on that. The reason that it was available for you is because it was so distressed and a bank wouldn't touch it and people are like, no way. If a bank doesn't want it, I don't want it either. How do you determine that it's going to be a good property versus a complete and total disaster? And I mean, I've had disasters over the years.

I bought a crack house on eBay, which we can touch on. But I look at, does it have good bones? And that commercial space was in a sweet spot. And it was just so distressed and so ignored, but it had good bones. And when I had an inspector go through it, they're like, this place is solid. It just needs completely updated. It needs a new furnace. It needs a new roof.

It needs this. But the bones were there. And I was like, and that's, you know, even with the condos, when I was buying these $12,000, $15,000, $21,000 condos, the complexes were well kept. It was just the HOA owned some of them. You know, they were just distressed, forgotten properties, but they were in a good spot. or a good location. And that was my key. If I go into a property and I'm like, I would live here, then I'm going to buy it.

If I go into a property and say, I would never live here and I have bought those before where I'm like, I don't feel comfortable here. And those are the first ones that I always sell. But you got to look at, you know, how are the bones? How are the neighbors? What's going on around here? And then go walk around and talk to people. You know, I'm taking out trash at a new place.

and I'm just talking like, hey, what's going on? How long have you lived here? Talk to the neighbors. See if they would want to live here. Would they want to rent? Do they like living there? Okay, let's look at this commercial property specifically. You said it needed a new furnace and it needed a new roof.

What did you pay for this property? And was this sounds like this was your first commercial property? Yeah, that was the first commercial. That was in like 2018, I believe, or 2019. And it was really, really, really poorly listed. It was a four unit, three residential, one commercial space. The commercial space could be split into two, so it was technically five on paper, but we just left it how it was. And it was poorly, poorly, poorly listed, poorly marketed, poorly advertised.

And it was 85,000. And then it got reduced down to 75. And I kept saying to my friends, I'm like, let's go look at this. Let's go look at this. Let's go look at this. They went, they're like, yeah, this is solid. and a great spot and 17,000 cars drive down that road in a day. Let's try this.

And I put in a cash offer of 65 and they're like, no, we'll do 70. And we're like, no. And then they came back and they're like, okay, we'll do 65. So that was how that deal went. And what does? And I, so to date, I've invested about 40 into it. I did about 10,000 each unit between the roof, between the furnace, between, updating, you know, they have some IKEA kitchens in there.

And it appraised for $200,000 this past year. So I'm 105 in and we're 200,000 on the property now. And it cash flows. It's a, they were making so little rents. It was insane. But in 2020, we collected over $30,000 in rent from that place alone. with a whopping probably 6,000 in mortgage payments. That's a huge margin for maintenance and expenses.

I love it. Wow. And that's the magic. That's the magic. People get turned away by properties that look and or smell terrible, but if the bones are good, the profit margin is huge. We've got one right now that there was a grease fire in the kitchen. The kitchen was the only thing that was damaged.

There was maybe a door had some heat damage. The rest smoke damage, right? You've got to pull all the drywall out and whatever. for lots of big updates. That thing, I mean, it's set for three or four years. And we're going to probably turn a $75,000 profit on the flip. Yeah. But like you said, the bones were good.

Yeah, you can, there's. And some people lack that vision. There is no problem that is too big. You can't throw enough money at it to fix. It's just how much money are you going to throw at it? You could have bought another property for $65,000 and put in $400,000 to get it worth $200,000. that's not a good property. Don't buy that one.

Buy this one instead. The cash flows all day long. I mean, there are some properties that don't make sense at any price. There are some properties. You would have to pay me in order for this to be a good deal for me. You don't have to buy those properties. And this is why you need to run your numbers and get used to running numbers. And I think they say on the Bigger Pockets Real Estate podcast, they talk over and over about

getting comfortable running your numbers. And when you're first starting out, analyzed properties, analyzed properties every single day, you had a really key point about this property that I want to highlight. You said it was poorly marketed. I'm seeing right now in this market, and I'm in the Denver market, it is the hottest market I've ever seen in my whole life. And I've been in real estate since before both of you guys were born. And it is insane out there.

I'm watching prices climb every week. I had a client who put in an offer and got it at the beginning of February. By the time we close at the beginning of March, she already had like $50 or $75,000 in appreciated value on this house. I'm going to do air quotes because I can't believe this market is so, so ridiculous. But I digress. You said it was poorly marketed. We're looking for another property for this client. And we found one.

and it was poorly marketed. I couldn't believe how poorly marketed it was. Somebody swooped in and got it for another 5,000 more than we paid for it, probably. They wouldn't, the listing agent wouldn't tell us anything about the other offer. But he said that it didn't hit 800 and we were real close to 800. So there wasn't a lot of room to move. But anyway, it was poorly marketed. It was, it had horrible pictures.

It had no pictures until Saturday. And the description was terrible. It was way overpriced for the market or for the area if you don't take into account that it's like three times bigger than any other house there. It was going to be a great. And it was totally outdated. It was kind of ugly. And but you can fix all that stuff. And you can, it was a three bedroom with a huge loft upstairs.

Two walls in a door. And you've got four. bedrooms upstairs, which is hugely more valuable than a three bedroom house. And it would have been, like I was calling everybody I knew, can I pay you, how much can I pay you to get out there and build two walls and a door for my client? Because this would be such a great investment for her. And I've got the agent, I'm sending him text every day. Hey, if your deal falls through, we're right there. We can close in two weeks. And it's, but look for the poorly marketed ones. We're going in now on, Everything's going under contract on like Sunday or Monday.

Go in on Tuesday and see what's still there. Click through the pictures and look through. Oh, those are horrible pictures. Or hey, that's a, I mean, some of the houses on the market on Tuesday are there because they're horrible. They back up to the train and the busy, you know, across the street, the gas station. But some of them were just overlooked. And there were better houses on the market that weekend.

So everybody went and bid on those houses. But there's still properties that are kind of like falling through the cracks. even in this market. So look for the ones that are poorly marketed. This was a five unit that was advertised as a four unit. Look for ones that are, you know, oh, it says it's a three unit. I found a listing that had zero bathrooms. You can't have a house with zero bathrooms. I don't know if you guys know this, but it has to have at least one bathroom in order to be a house. So before I reached out to the listing agent to correct him on it, I clicked through to make sure that it wouldn't work for one of my clients. Because if you have a listing set up in the MLS, or if you have a search setup where

you're looking for a minimum of one bathroom, well, this isn't going to hit it. You're not going to see this house. So I clicked through. It was not going to work for any of my clients. So I reached out to the listing agent. I'm like, hey, you have this listed as a zero bathroom house. You may not get the traction that you're looking for on this. But, you know, look for, have way open ended. searches. Don't look for a three-bedroom two-bath between 550 and 575. Look for a, you know, if you need three bedrooms, look for a minimum three-bedroom, but don't put bathrooms in there. And go up to 7-7 or 575 with no minimum. Sometimes you can get something on the bottom end that is kind of interesting or mislabeled or, you know, there's a lot of mistakes on the MLS,

even in this market. You would be amazed. Like, I think letting somebody take pictures of your house with one of these, a cell phone, for those of you on audio, is like probably the most costly expense when you comes to selling a house. I would wager that in a lot of cases, your photos, if done poorly, will cost you more than the 6% commission you pay to the agent and closing costs combined because you're just not, nobody's going to live here house. There's not going to, you're going to miss out on the competition.

And it astounds me that there are, I don't want to say agents who are lazy, but I'd imagine it's probably less, just more that they are, they're novices maybe. But like that is that you would let something go to the list in a market this hot without professional photos that cost two or $300 is just mind-blowing. I will say that you can take good quality pictures with your cell phone. The iPhone has really great, like the newest iPhone. has a great camera. I have my husband take all the pictures for my listings because he takes really great pictures.

I don't do a lot of listings and I tell them up front, look, we can pay for professional photography or my husband can come in and take these pictures. He's going to be here several times throughout the day because some rooms look better during the day and some rooms look better at night with the lights on on the inside. So he's going to take pictures of the whole house in both times and we're going to see what works best. And those are the houses, those are the pictures we're going to use. and I don't care if the kitchen is dark

when in the listing and the backyard is all light. You know, nobody cares. They just want to see what the house looks like. But yeah, we take good pictures. And if you can't take good pictures yourself, then you should absolutely hire it out. But yeah, yeah, that is, you know,

you click through and you're like, I can't even see. And for the love of everything that is wholly close to toilet lid before you take a picture. The end. Yeah, or and then you've got the whole organization of the photos too, right? Like it should be how you walk through the house.

Instead of like sometimes you open a listing and it's like, oh, look, a closet is photo one. Right. Wow. Such a cool closet. Yeah. And if you can't figure out the way that the house is laid out from the pictures, sometimes that's on purpose because the house is weird.

Sometimes that is because somebody uploading pictures didn't do it right. So, you know, definitely click through and take the time to. see what is what's there. And if it's confusing to you, it's going to be confusing to a lot of people in this market. There is hot, hot frenzy every weekend. So if you see a house that looks gorgeous and you're looking for a deal, don't go view that house that looks gorgeous. It's not going to be a deal.

Look for the weird houses. Click through the pictures that are, you know, oh, it's a kitchen. The next picture is a bathroom. Is there a bathroom off the kitchen or is this? And then there's the backyard. And then there's no more pictures. Go see that house. That's going to have far less people scrambling to get in.

That's going to have more people overlooking it or being like, I don't like it. I don't like it. I want to see a different house. And you don't want the competition. You want to get in and be the only offer. When we made this offer in February, we were the only offer on this house. whereas there was another house around the corner that got 16 offers and bid up like 150,000

over list. We offered on that too, but we didn't get it. And we're like, I can't believe there's no other offers on this. We're going to put a really tight acceptance deadline on this just because we either want to get it under contract or we want to go someplace else. And it was a great offer. We weren't like trying to lowball them or anything. But there's, you know, some things just fall through the cracks.

But you got to look. You got to be in the market. right now, analyzing deals and really jumping into, to see, you know, you got to know your market. And poorly marketed is your best friend. All right. I called divs on this earlier, so I'm asking, tell me about the crack house on eBay. Crackhouse on eBay was, I had money in my account. And I'm sitting at work.

And I was familiar with a zip code. I was not familiar with the street. I texted my friends up in Toledo, Ohio, and said, hey, can you drive by? And one of my friends is finally like, yeah, I'll go on lunch. And at that point, I had already won it because it was one of those where it had like two hours left. It was auction.com fulfilled by eBay. And my friend went by and they're like, it's rough, but I think you can make it work. And I thought it was a different neighborhood than what it was.

I sent my husband, he was my boyfriend at the time. and my dad to go look at it once I closed and paid all my money for it. This was a $13,500 house. And I originally told my husband, like, I've got utilities on. You can stay there the night. Just take a sleeping bag with you. And when he got there, there were like bullet holes in the door frame. There were bullet holes in the dining room window.

And then my dad started sending me pictures of syringes in the bathroom. and I booked my boyfriend a hotel down the road and he didn't have to stay there. And then my dad's like, I'm just going to walk away from this one. Just lose the $13,000 and be done with it. Don't even mess with this house. Like, it is scared. Like, we are scared to be over here past 6 o'clock. And I'm like, is it really that bad?

It was. My contractor, Wellie was working. Your dad's a cop. Trust me. And that's why he's like, just walking. walk away from it. It's scary. But true story, my contractor was inside working and there was a drug deal going on in the backyard of my property. A kid got shot while my contractor's in there. And here's the end of the story, which is my favorite part. It finally ended in July of 2021.

I did pour a ton of money. It got an IKEA kitchen. It got a new furnace. It got a new roof. It got lots of improvements. So I was all in at $38,000 on this property, which is way more than what I wanted to spend. But I sold it in July of 2021 to my tenant. I owner financed because he couldn't get traditional financing. And he is happy there. It's the nicest one on the street. It's well kept. He's taken pride in ownership. So it was a, and he's current on this payment. So it was a, I probably should have walked away and listened to my dad and listened to my boyfriend at the time. But it still turned out okay. It just took a couple years to get over the finish line. Do you buy houses on eBay anymore? I do not buy houses on eBay. I do not buy houses in that zip code anymore.

I've learned my lesson. I did buy a side lot from the city. The property next to mine was torn down. They sold me a lot for $150 just if I would mow it. And I'm like, yeah, I'll mow it. That increased the value. why would I not buy a piece of land for $150? So it was a learning experience. That's what I'll say about that purchase. But, I mean, you know, ultimately, you came out all right and you learned a ton, right? And, I mean, I think you definitely set a key. I think the key there was when you were like, oh, I was familiar with the zip code, but not the neighborhood.

And I'm like, oh, I know where this is going. And that's, you know. I lived in the zip code. So I'm like, oh, it's. it'll be fine. I used to live in this zip code. I know this store's right there and that, but no, it was not the right. And it was really broken down by streets. You could go like one street over and it's nice. You could go one street to the left and it's nice. It was just a really rough street. And you learned as you go. That reminds me of the Mark Twain quote. A man who carries a cat

by the tail learned something he can learn in no other way. Sometimes you just have to learn the lesson. And yeah, I think it sounds awesome. Oh, look, here's a house for $13,000. But then, yeah, sometimes you just have to. I mean, I've bought a condo and I learned that I don't ever want to buy condos. And I'm so glad that you had success in your condos, but I did not. I've sold almost all of them at this point. I could, and they, but they got me where I wanted to go.

So, and I hold a couple of the three best ones that are in the great A class neighborhoods. But no, I'm not a condo fan either. I would not want to, you know, I'm never looking actively for condos, but in Dallas, where there's not a ton of single families. And the investors were crazy for the single families. I had to go for what everyone else was ignoring. So that's where I started. I feel like that's kind of a, like a transition for a lot of real estate investors. As you start out a lot of times, you're looking for that, that 2% rule, that house that needs a ton of work.

You're going to put a ton of sweat equity. You might deal with a crappy tenant. like all these things that could go wrong because you are trying to leverage into a return to get yourself off the ground. But then as your portfolio grows, you start to get to this point where you're like, that one's more stressful than the other ones. That's got to go. Like it's just it's like, so I'm at that point in my portfolio now where like I bought a bunch of things that were the cash flowed great.

They appreciated great. They were good properties from a financial standpoint, but they were headaches. And so it's like, okay, if I can get rid of that headache and move it into something that might not cash flow is great, but doesn't call. me? Great. Yeah. Well, and you learn so much by dealing with the headaches. Sometimes you're learning like, oh, this is a fix that I need to now make when I buy a house or this is a thing I need to make sure is top notch when I buy a house. Or this is a problem with a tenant that I overlooked during screening that I need to like you're, you should always be learning from these

headaches. But yeah, you can get rid of the headaches, too. 100%. 1031 into a really good property. Yes. So, okay, so we could talk for another 17 hours about all the things that Tom has done, but we all three need to get on with the rest of our day. So I want Tom to come back later on down the road and talk to us about 1031 exchanges and some of these other fun, more advanced real estate e topics that we've had. Anytime. Or experiences that he's had.

But Tom, we're not done with you just yet. We still have to do our famous four. Are you ready? I'm ready. Okay, Tom, what is your favorite finance book? Favorite finance book is Tim Ferriss of a four-hour work week. Okay. That's a good book.

Tom, what's your biggest money mistake? Biggest money mistake would have to be purchasing a house in 2005 at the top of the market and trying to make that work in a neighborhood that I had no business being in. I had no team built. I had no support there. So I lost money on it all 10 years that I owned it and I lost money on it when I sold it. So I carry that one as a learning lesson. I'm sorry. I'm not laughing. I'm laughing at the way you phrased that. I lost money all 10 years that I owned it and I lost money when I sold it. But you learned, right? Did you learn a lot? I did. And it's a good story to tell people when They're like, I want to be in real estate.

I'm like, well, let me tell you this story. Okay, Tom, what is your best piece of advice for people who are just starting out? Get rid of the bad debt, obviously. I mean, I'm a huge debt-free advocate. What can you do right now? And there's so many people that are so far into debt but want to be in real estate today because they want to start earning money. So start working on that debt.

But then also, can you get yourself a $15 pack of business cards that you can pass out to people so they know that you're interested in real estate, so you can network because building that network even before you have that money is awesome because then when you are ready you already know that that bummer can do that job for you you already know that this person is in real estate and you can call them about this so go spend the $15 on the pack of business cards and pass them out just make yourself you know introduce yourself say hey I want to get in real estate I'm paying off debt right now but I want to be there I wrote an article called do ask do tell your secret weapon for landing deals.

And it was like, tell everybody that you know what you do. The moral of this story is you never know who knows somebody who is about to sell. And that's how I found so many. One of my best deals came from a man at the flea market who I bought nail polish from. And he's like, this is my mother-in-law's house. I don't want it anymore. And I'm like, I want it. And I bought nail polish from you for a quarter.

So here's my business card. I want the house and I want the nail polish. Let's do this. I love it. But you're not wrong. It comes from just telling people what you want, what you're looking for, networking. It's everything.

Oh, that's powerful. Yep. I buy real estate. Do you know anybody who is looking to sell any property? I'm interested in buying. And I lived next door to a duplex. I was very friendly with the lady who lived in one half of the duplex. And she comes to me and she's like,

oh, there was a sign planted in the yard one day, and I come home and I'm like, Jude, you didn't tell me that they were getting ready to sell. She's like, oh, yeah, I remember that you buy real estate. Huh. Yeah, he told me he was going to sell it. It sold for 240. That guy just had to sell it to, because of a divorce. He sold it for $6.50, six years later. And I'm frustrated because I would have kept it.

I, oh, do ask, do tell. All right. And now the question that everybody eagerly awaits on every show, what's your favorite joke to tell at parties? So I don't have a joke, but I tell a story about my first experience with Texas. My company gave us Texas State Fair tickets, and I went, and I didn't know anything about the State Fair. And I'm just trying to use the food tickets and the ride tickets and go home. I'm in a bad mood. I paid $20 to park at a –

a gas station. I have no idea really what's going on. And I'm standing in line at this like swing ride. And I'm, I'm just like, oh, my God, how many, how many more rides do I have to go on to get rid of these tickets and go? And then it hit me. And there were girls standing behind me. They were singing. And there were girls standing in front of me. And they were dancing around. And someone on the ride threw up on all of us. And I just started to cry at that moment. And I ran across the entire state Fair to try and find my car at a gas station. It had been towed. So it was kind of like a perfect welcome to Texas. This is what Texas is. So whenever I get asked, do you want to go to the state fair? I tell that story. And I don't go to the Texas State Fair anymore.

And it got in the mouths of the girls because they were singing the song. So it was way more traumatic for them. It hit me on the shoulder. But it was again, I don't go to the State Fair of Texas. Not a joke, but definitely something worth laughing about. That's terrible. One and done, yes. I learned the hard way on that one. Okay, I have an eBay-related joke for you. I just sold my homing pigeon on eBay for the 23rd time.

That's more of a homing pigeon joke. I'm selling all of my John Lennon collection on eBay. Imagine all the PayPal. Oh. Okay, so good. As I said, the most anticipated question on the show. Tom, where can people find out more about you? So I'm super active on Twitter at the frugal gay 11. And on Instagram, I post renovation picks. I post eBay flips. I'm pretty active on there. So if you guys want to connect, those are the two spots to definitely hit me up. And what is your, what's your Instagram account? Same thing. At the frugal gay 11. at the frugal gay one was already taken so i have to be at the frugal gay 11 11's a good number okay

probably my favorite number tom thank you so much for your time today this was super fun i learned a lot about ebay flipping my husband is not going to like this episode because he's going to be like no you can't do that but now i want to go find these pallets of stuff and find some two dollar skirts that i can sell online and i'm not going to do it but i want to i dream so thank you for sharing your story today. Thank you. Thank you for having me, guys. This was a lot of fun. We finally made it happen. Thank you. Okay, we'll talk to you soon. Okay, that was Tom Brickman and his fabulous story of selling random things on eBay to generate income to buy houses that generate more income that allow him to quit his job and sell more stuff on eBay to buy more

houses. I mean, this is truly doing everything the right way. It's, it's funny to say that, like selling makeup and bras and purses is is the right way. But the reality is like the right way is to find some way to either save more money or make more money and then to not touch it except to invest it. And that's what he did. He makes more money. He buys an investment. And then he takes those investments and rolls them into new investments.

And that's the way you build wealth. And he's built wealth. He has, we didn't get to his final tally, but he has like 16 or 17 doors that are generating enough income for him to have been able to quit his job earlier this year and still be able to buy more real estate. He is just cranking out his investments. And it's just a really fun story because now he can work as much or as little as he chooses. And that is really the whole point of this financial freedom thing is to build the life that you want. He's not beholden to a job. He doesn't have to work anymore for anybody else.

He can do what he wants with his days. And that's exactly what he's doing. Okay, David, should we get out of here? Absolutely. From episode 291 of the Bigger Pockets Money podcast, he is David Perrae. And I am Mindy Jensen going back to basics and saying, see you later, alligator.