BiggerPockets Money Podcast - 42: How to Invest in Real Estate with Joshua Dorkin & Brandon Turner

Episode Date: October 15, 2018

Real estate is a hot topic right now, and who better to talk about the subject than BiggerPockets founder Joshua Dorkin and BiggerPockets Real Estate Investing Podcast Host Brandon Turner? No one, that’s who. So we went to these experts, and grabbed some excellent real estate advice. We get a brief history of their experiences with money and chat about their new book, How to Invest In Real Estate. Buy the book at www.biggerpockets.com/investinre This fun episode also includes tips for managing your money while you save for your first investment, Josh’s inverted funnel analogy and Brandon’s Harry Potter references. Thinking about adding real estate investing into your portfolio? This episode will educate and inspire. Links from the Show BiggerPockets Forums FinCon BiggerPockets BiggerPockets Podcast (to find all shows mentioned) BiggerPockets Blog BiggerPockets Forums BiggerPockets Webinar Bitcoin is a Stupid, Horrible Thing to Invest In! Scott's Email Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast show number 42 where we interview Joshua Dorkin and Brandon Turner for BiggerPockts.com. If you're the $100,000 year person living in Denver or you're the $8 an hour guy living in Podunk, Washington, you can figure out how to make it work because real estate works for every person in every area at any time. The question is how? It's time for a new American dream, one that doesn't involve working in a cubicle for 40 years, barely scraping by. Whether you're looking to get your financial house in order, invest the money you already have, or discover new paths for wealth creation. You're in the right place. This show is for anyone who has money or wants more.

This is the Bigger Pockets Money Podcast. How's good, everybody? I'm Scott Trench. I'm here with my co-host, Miss Mindy Jensen. How you doing today, Mindy? Scott, I'm so, so, so excited. I'm doing great, but I'm so excited for this episode because we're interviewing Josh and Brandon from Bigger Pockets. And these are, I don't know if you know this, but they're kind of a big deal. And I'm really excited about this episode because I get people asking me all the time. How do I get started investing in real estate? How did you start, Mindy? How did you learn? Weren't you scared? And I learned by just jumping in with both feet because I started when I was really young and I thought I knew everything. But that's not necessarily the best way to go about it. Sometimes you can make bad decisions as I have done in the past.

But our guest today, Josh and Brandon, have literally written the book on how to invest in real estate. Bigger Pockets founder Joshua Dorkin and Brandon Turner from the Bigger Pockets Real Estate Investing podcast. Join us today to talk about real estate investing and specifically how to get started. They've got a new book coming out this Thursday called How to Invest in Real Estate. This book is available at biggerpockets.com slash invest in R.E. Invest in real estate, but you don't have to spell out real estate. Yeah. These guys, obviously, Josh and Brandon, are the architects. You know, Josh is the architect and founder of Bigger Pockets. Brandon was the first employee and has really crafted, I think, a lot of what we're all about here on Bigger Pockets.

Between the two of them, they have gathered more perspective about real estate investing than maybe anybody else in the planet. And what's going to be awesome about this book is it's just general ability to introduce you to the concepts of real estate investing. It's the place to start when it comes to that. And also, what's going to be unique about it is they have 40 different personal stories in this book. What's powerful about bigger pockets, what's powerful about real estate investing in general. general, what's powerful about our community is that there is no one right way and you're going to relate to someone's story more than you're going to relate to somebody else's story, right? What's the best way to move forward with investing real estate, business, personal finance?

Well, I think that it's to hear and read or somehow consume information about what people like you, near you are doing in a way that you can relate to and take action. When you hear, hey, I can do that too. That's the way to learn. I think that that's what this book is really going to offer you over the course of your time reading it. I have a quote from Andrew Carnegie before we get started. I love this quote. 90% of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or woman or wage earner

of today invests his money in real estate. And this is Andrew Carnegie saying this. He's kind of knows a little bit about money and investing. And it's just, completely true. If you want to grow your wealth, real estate is kind of the way to do it. I mean, yes, you can invest other ways, but it's so easy to do it with real estate. Yeah, I mean, that's what this show, Bigger Pockets Money is all about, is this is personal finance. But really, it's personal finance for people who intend to use real estate as at least one contributor in their portfolios, right? And that's what we're all about at Bigger Pockets, is using that as one of the many tools in wealth building that are available to you.

And it's a powerful one. And our founder, Josh, Dorkin and of course Brandon, whatever the heck he does, are incredibly gifted in this area of just kind of walking you through how to begin investing in real estate and have experience from hundreds and hundreds of interviews and tens of thousands of hours studying how to make ordinary people successful through real estate investing. Yep. And as I think back to all of our guests, I think there's probably 75% of the people that have been a guest on this show already have at least some real estate holdings. Yeah, I mean, the point of this, the point of bigger pockets is to help you build that financial

foundation that's capable of producing many investments. You'll have to decide for yourself, but we believe that as you grow your financial position, you'll find room for real estate as at least one of the investments in your portfolio because it is powerful and because it is one of the most effective ways to build wealth. That's not neither truly passive nor truly business. It's kind of fun. Okay, we should bring them in because this show runs really long, mostly because of Josh Dorkin, who can't seem to stop talking, and Brandon Turner, who also can't seem to stop talking. Tax season is one of the only times all year

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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 Liener 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 is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a 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. Josh and Brandon, welcome to the Bigger Pockets Money podcast. How's it going today? What's going on, Scotty boy?

I got to tell you, this is a lifelong dream fulfilled at this moment. Oh, yeah. I've been waiting for almost a year to be asked. Do you know who asked to come on the show? I had to ask them to come on the show today. Josh. What's funny is this? We had them both on our show.

I know. And neither of them asked us. Like I would have thought maybe show one or maybe show two that they would have had us on. I mean, what episode is this? Like 400. This is episode 42. And also I would like to say that here on the Bigger Pockets Money podcast, we don't do tit for tat shows. We do.

Oh, you don't. We interview people that we find worthy. And after 42 weeks, we have run out of people that we find worthy. So you guys had openings in your schedule and we thought we'd bring you on. That's exactly right. also did not do Tad on our show and nor do they continue to do it on the show now. But I found you worthy and I'm insulted. But that's okay.

That's okay. What was the most listen to show and the Bigger Pockets podcast at all time? It was not yours. It might be Scots. It's up there. Scott is above every other episode, the one that interviews Brandon, the one that interviews Josh, except I think episode 200 was above Scots. That was about me, wasn't it?

No, episode 100 was about you. Episode 200 was how to a step-by-step guide to buying your first investment property, thanks for remembering. Anyone familiar with Bigger Pockets knows that we all have real estate as an investment vehicle. Today's guests are the original hosts of the original Bigger Pockets Real Estate Investing podcast, Josh Dorkin and Brandon Turner, who we have not yet introduced because they won't stop talking. Normally doing the asking, today they switch places and sit in the hot seat. So first off, thank you for coming on to my show. show. I'm a huge fan of you both.

I'm excited to be on your show. Scott's show, not so much. Yours. I'm super excited. This will be the 42nd best show we've ever had. It'll be the 42nd best show until 43 comes out. Wow. I am a huge fan of both of you and I hope that comes across as I lovingly tease you for the next 40 minutes to two hours. I take it. I know that I love real estate.

I know that we all. I know why I love real estate. And I want to know why you guys love it too. and why you recommend it as an investment vehicle over things like stocks or bonds or gold or Bitcoin. But even before we get to that, I want to know about your experiences with money. Where did your money journey start out? And what got you to where you are now? What got you to real estate?

So when I was a kid, I mean, my parents were entrepreneurs. So I got to work at my mom's store. I got to see what it was like, see how hard she worked and see what it was like to actually make money. It wasn't this, hey, my parents work, and I really don't understand it. They just bring home money. It was, you know, I can see what they were doing on the day to day, which I think really helps a young kid get an appreciation for the time value of money, the value of labor, the value of effort. We got allowance, and I would save my allowance. I was the kid who did not like to spend it on Pokemon like Scott.

So I saved my life. It's gotten to Pokemon. Scott did I not know this. It's a Pokemon. Have you seen his desk? I scored over the way all my money. I don't know what that means. To be fair, when Josh was a kid, Pokemon wasn't invented yet. This is true. This is true. I did waste my money on Transformers.

When Josh was a kid, like houses weren't invented yet. There's a lot of things that weren't invented. Yes, my social security number is four. Josh, now everybody's going to steal your identity. Oh, no. I'm screaming. Anyway, so I saved my money. And I don't know. My parents didn't particularly teach me, hey, you know, save all your money.

It just was something that I did. And I think it was because I wanted to save up for bigger toys. And what happened was when I had enough for big enough toys, so I would keep saving. And then when I had bigger toys, it was like, oh, I want a car. And then I didn't really, I was able to get a crappy car from my parents. And then when it was that, I was like, oh, I want an apartment. And then I used the money. So I wisely saved and saved, kept my allowance, put it away in the bank. And by the time I grew up in New York, right? So New York is like a money-centric culture. And so

everybody's in the market and everybody knows about the market and on Wall Street. And that's kind of like the thing that it's like this motivator. Everybody knows it. It's part of the culture. So I think I was 17 or 18. I ended up interning at a Wall Street brokerage and learned about how to how stock brokers who don't really exist anymore today work with clients and how trades work and how to evaluate companies and things like that. I don't know. I just being in New York, I was always interested in money. I think one of the biggest influences was one day I was in the bookstore and I know we still have those today. But I walked into a bookstore and I saw in the magazine shelf this copy of Forbes. And it was the 400 richest people in America or the

100 richest people in America edition. And I was like, oh, that's interesting. And I sat there on the floor flipping through and there were these little stories of these people and like how they took like a small potato farm and became the largest potato farmer in America. And it was inspiring to see people go from zero to something. So for me, again, my beginnings and money revolved around entrepreneurship and my excitement around it came from just being inspired by these people who took something.

small and turned it into something magnificent. You get motivated. You're interested in how these folks are building something out of nothing. You have built something pretty incredible out of nothing. Can you walk us through that story with money? I know that you have a very, very past in terms of different avenues you've tried it in your career and all that kind of stuff. But can you walk us do that and a little bit about the creation of bigger pockets?

Absolutely. And then obviously we need to give time to Brandon. Not a lot. I mean, if you look at his beard, it's disgusting. I don't need much. The beard is gross. No, hey, beautiful. Beautiful is hard to even communicate.

Beards are beautiful. I'd like to point out that Josh has his little stubby nothing beard. You should look at this on YouTube to look at Josh's not even close to Brandon's beard. There's even gray's in there. So I did this Wall Street thing. I went off to college. I was definitively privileged in that my family took care of college. So I did not have student loans.

I beyond a shadow of a doubt, am absolutely privileged for that. I mean, that is extremely challenging for a huge swath of people. And, you know, the system, well, we could rant and talk about that a whole other day. But anyway, so when I worked at this firm, I actually took money and I started investing in the stock market. And so I started investing, you know, before I was in college, began to learn. And I took what I had saved away. I, you know, every allowance, I had jobs throughout the summers. I worked from my parents growing up. So I had stored away a lot of money. And by the time I was done with college, six figures saved away between the jobs and turning, multiplying it in the market. Post college, I ended up, I was a stock trader. I became a prop trader. So I traded professionally. And I was not the best prop trader in the world. I left that. But really, I always, was, as Brandon and Scott lovingly like to say, cheap.

And so really the cheap was... I think we use other words than cheap, but, you know... Well, behind my back... To your face, we say frugal. Yeah. I mean, you're kind about that. But not always. So the frugality has always been on myself, right?

Like, I am frugal on myself. I tend to be generous to other people that are not me. Anyway, I save this money up. Post-college, I, you know, did this. I moved in with my parents again. I got in the entertainment business. And, you know, when I moved out to California, I said, well, I've got this money. You know what? It's time to invest in real estate. Now, rewind a little bit when I was in college, my roommate and I were obsessed with real estate. We always would talk about like how the math on real estate and how

we, instead of paying rent to the guy whose apartment we're living and should buy the building, we just didn't conceptualize that we could borrow money as, you know, 20-year-olds to buy a multi-unit property. Now, if I knew what I knew now, then I would have done it. You know, fast forward, I'm in L.A. I get a real estate license. I started helping people buy real estate. Didn't really love that. Ended up in education. And my brother reaches out to me and says, hey, Josh, you know, I started to buy these properties and he showed me the numbers. And the numbers were awesome. And I was like, wow, you know, these numbers eclipse what I could potentially even be getting in the market right now. And so I'm going to go and buy some property. And so I did. I, you know, I flew to the Midwest.

bought a bunch of properties, and I should have been doing excellent. And over time, owning these properties and not the greatest neighborhoods, thousands of miles away with bad management, it turned out to really be challenging. And ultimately, bigger pockets was born out of this. But for me, money has always been a means to an end. I've always saved more than I've spent. And I've always regretted that in a lot of cases. You know, I've always looked back and said, you know, I wish I had spent money on certain things and enjoyed myself a little more with the money. So anyway, I mean, that's kind of the long and short. I could answer a million specific questions, but, you know, in broad strokes, that's me and not as interesting as the bearded man.

And then you started bigger pockets and built it into a million member community for the course of 14 years. One point to five million. And now my job is to help people learn to be responsible with money and learn how to build wealth through money. And I love that, you know, teaching people. I mean, all four of us. It is the passion of the four of us to educate people about money. And there's nothing more exciting, right? I mean, like being able to talk to somebody and then, you know, having them come back six months a year, five years, 15 years later saying you help change my life. Yeah, I love those emails. And I know I've already just said it, but I want to say it one more time, like, like we all in the bigger pockets community, oh you,

a lot because you put this thing together over 14 years with love and sweat and tears and I don't know if there's any blood but all that kind of stuff and like the reason we're here and so many people are investing in real estate is because of that effort you put in so that financial journey that background was the foundation for this incredible company that we have yeah and the last thing I'll throw in here is my parents absolutely played a role in this I mean my parents were never of the mindset of hey go and be flashy hey go and show off hey go and do this. I mean, they were successful. We were, you know, we were middle, upper middle class. And the kids in the neighborhood were driving fancy cars to school. And I got my, my first car was

the 1982 Pontiac Firebird. You know, the kick car. You know, it was, it was nice and worn in, followed by the 1987 Audi 5,000, which would spit water at us. It was falling apart so much. So, you know, for us, it doesn't matter. It's not about flash. It's not about fancy clothes. It's about just using your money for experiences and living a good quality life. It's not about show on the outside. Brandon, where did your journey with money start? Did you grow up rich and getting sports cars and outies all the time? I did. I actually grew up in a billion dollar household. All right. So my money story, I'll be much more terst than Josh here. Thank you. My parents taught me three lessons with money. First one that we don't talk about money, right? So my

family, I was raised in a very religious household. Money is the root of all evil, which is a misquote of the passage, but money is a, you know, is evil. We don't talk about it. We don't have conversations about it. You never ask what somebody makes, that kind of thing, right? Rich is bad. But my parents, they never said money is bad, right? But that was just the feeling. We don't talk about money. Rich people, you kind of make fun of them, right? So that's the first thing they taught me. Second thing, money is a responsibility. Right. So like, it is something you work for, you go to college for, you work hard. You save your money. They got me a piggy bank early on. But very much the traditional go to college, work for 40 years, set aside money, and you'll be fine when you're 80.

And you can be the richest person in the retirement home if rich was actually that important, which it wasn't. So that's the second thing, money's responsibility. And third, which I think is the biggest lesson I learned from my parents is you can't take it with you. My parents were very, very generous. I mean, they were blue color. My dad's a meat cutter. My mom did in-home daycare. So they were like, we didn't make much money.

But whatever we did make, they would give back in terms of. cheap vacations. We would drive across the country all the time. And they really believe strongly that experiences are what life is made up of, not how many zeros are at the end of your bank account. I love that, that I took that, I think, from them. So anyway, that was the response. I mean, that was the kind of three things to learn from them. And yeah, I got out of college and was supposed to go to law school. I started studying for it because that's kind of what was expected of me. And I remember I found, I found real estate. I read a book on it. I was like, this sounds like the best thing ever. I bought a house. And then I decided, I'm not going to go to law school. I dropped,

dropped that whole plan and told my dad, I'm going to be a real estate investor. And he said, I was crazy. I was going to be homeless. I think you used the word stupid in there. And you're going to lose everything. He said, what are you going to do if tenants don't pay rent? Huh, Brandon? What are you going to do then? You're not going to be able to afford it. And I was like, oh, you're right. Okay, well, I guess I'll go back to the law school idea. Because I didn't know what to do. So I went to Google and I typed in what to do when tenants don't pay rent. And I found this little, I'll call it not very attractive. It was a rinky dink blog or not even blog at the time called Bigger Pockets. And I found bigger pockets at the time. And I found little

articles and blog. I mean, there wasn't even a blog at the time. I don't even think that word existed. But forum posts in real estate. And so I was like, all right, people are doing this. And so that's when I jumped in and started buying real estate. Can I ask you a quick question, Mindy? Really quick. Oh, please. By all me, go ahead. Are you commenteering? Yeah, he is. No, I have a serious question, which is, you bought that first house. How did you buy the first house? Because you talk about your money journey, but you didn't talk about how you got the money to buy the first house. So this is 07. They gave loans to anybody who had a heartbeat. So they're like, you know, I remember the phone call. It's like, I call the lender. And they're like, okay, well, do you have a job? I was like, well, sort of.

I just started working at Coldstone creamery making $8 an hour. Like, how's your credit? I don't have any credit. I've never used it in my life. Well, you know, what about like, do you have any like assets? No, nothing at all. Actually, I've got a lot of student loan debt. Okay, great, you're approved for half a million dollar loan. No, no doc, nothing. Just go ahead. Wait, how did the market market crash? Yeah, exactly.

That was 07 or maybe even end of 06. I bought that first house. I actually think I needed like two grand down. And that just came from, I think I borrowed it even from my dad. I was like, can I borrow two grand? Your dad who said you would be crazy to be an investor gave you money? Well, the lending came first. My dad came around and today he is a business partner in mine and a couple of deals.

and I've actually like one of those deals we sold and we moved it on and now he just gets like fixed return income. He's basically an investor now with me that helped him retire early, which is kind of cool. It's kind of a neat like turnaround. We're now like his investment in me helped fund his retirement three years earlier than he could have normally done it. So anyway, came full circle. So you bought this house getting a loan that you had no business getting. How did you walk us through how you made some money on that deal on that particular one? Yeah, short answer is that my mom is a garage sale genie, right? So like I was raised every Saturday go to garage sales. I watched my mom negotiated. So all I knew about real estate at the time, I didn't, I didn't know anything when I bought

that house, except for buy the cheapest thing possible and negotiate lower, right? Just garage sale style. So at the time, I literally told the agent friend that I had like when I was looking, I was like, just find the cheapest house in the area. What's that? And we went and looked at it. It was the cheapest house in the area. I was like, all right, we'll buy that. So I bought it. And of course, the cheapest house needed a lot of work. So I just got a book from Home Depot, one, two, three home improvement. I still have it today. And I learned how to do everything.

Yeah, I learned how to do everything in a house. And so I fixed it up over the course of a year, sold it, and made 20 grand. And I was like, wow, that was way better than a job. And so that's when I got into real estate because that was way better. Wow. How many hours of scooping ice cream does it take to make 20 grams? Too many. A lot of hours.

And singing. Remember Coldstone is where you sing for tips, right? Oh, God. Yeah. Oh, yeah. Oh, yeah. Yeah. Josh never worked there, right?

No. Coldstone? He clearly did not. Clearly he did not. Once or twice. I don't think they ever sang to me, though. You didn't give them a tip because you're cheap. Or maybe they didn't want to sing for you because you look like Adam Levine.

Well, had they sucked for me, I might have given them a tip. But, you know, you got a tip first, then they sing. It's like, like they take like old songs like when I was like, thank you for your dollar. Listen to us holler. Anyway, it was stuff like that. It was fantastic. And thus no more tips came to you. Well, after like a year after I got there, that individual cold stone went under.

I don't know. I might have contributed to that. People are like, I don't want to hear that tall guy saying, it's okay. Okay. So we have not even discussed why we have Josh and Brandon on the show today. But I believe that Josh and Brandon have both written a new book called How to Invest in Real Estate. And we're interviewing them today on our show because we all really love real estate. And we want to present this as an option for building wealth, which is kind of the whole point of bigger pockets money. Brandon, can you tell me why you think real estate is the best thing of the world? Well, I think it's the second best thing.

The best thing is like speculating on Bitcoin. Okay. If we can just speculate on Bitcoin. Yeah. Okay. How much money did you collectively lose in Bitcoin? Zero. I have never put a dime.

However, I want to make a claim here. I made a video. I've lost $0 in Bitcoin. Okay. Have you put money in Bitcoin? I put $0. Okay. Yeah, yeah, yeah.

Six months ago, I made a video for Bigger Pockets called Bitcoin is a stupid, horrible investment. The next day, Bitcoin crashed. That was like the 30 or 40% of the day. So I'm going to claim full 100% credit for the tanking of Bitcoin. So for all of you who lost money in Bitcoin, his name is Brandon Turner. But there's so much intrinsic value in these coins, Bitcoin and Kodak coin and all the other ones, right? No. Doge coin is the way to go. All right. Okay. So Brandon, besides Bitcoin, why is real estate your second favorite investment? Like, what do you love about real estate? I know why I love real estate.

I love having the control over, like, I don't have any control over what the guys at Enron do. I wish I did because then all those people wouldn't have lost their money. But I know exactly what's going on in my real estate investments and I'm the boss of them. So Brandon. You're everybody's boss. Brandon, why do you like real estate? I like it because I am not a smart man and yet I can figure out real estate. Like, I have no idea how most things that you guys talk about on the money show work.

Like, I just don't get it. Like, it's like, stop. and mutual funds. It's just over my head. I just don't know it. I don't have the attention span for it. But real estate, like I understand this is a house. I can hit it with a hammer.

I can rent it out for this amount. I have this expenses and I make money. Like I totally get that and then I can control how it does. When the market tanks, I can improve it a little bit. I can manage better because I have that control, right? If I want to get more technical about it, there are four wealth generators of real estate that I like.

There's cash flow, which means extra money every month, like making a rain, right? I can go spend it on, I don't know, Starbucks. Appreciation. Properties tend to go up in time, up in value over time. That's not always true, of course, in short term runs, but in long term, real estate generally rises. There are the tax benefits. Yep, tax benefits. When you own real estate, like you pay way less taxes, typically. I'm not a CPA, so take that with a grain of salt. But typically, you pay way less with taxes and the loan paydown. This might be the coolest part about real estate, I think, or one of the most under-talked about cool parts.

Basically, let me give you a story of how the loan paydown works. So I bought a fourplex for my daughter, Rosie, the week she was born. This is a cool strategy any parent out there can do. This is brilliant, by the way. Oh, thank you. I bought a fourplex the week Rosie was born. And you can do this anytime between your kid is zero and five years old. I mean, you can do it anytime, but it really works well when they're zero to five.

You buy a property, any property at all, it can't be a bad deal. You buy any, like, decent deal, anytime between your kid zero and five years old, and you put them on a 15-year mortgage. What I mean by that is the property gets paid off of, for 15 years. It doesn't even have to cash flow. You don't need cash flow. You don't even need appreciation. You don't even need tax benefits. If nothing else, if you just flat broke even in 15 years, that property is paid off. So let's say you buy a $200,000 house, or in my case, about, you know, roughly I have $160,000 into this fourplex. It'll be paid off in 15 years from right now.

In 15 years, what's going to happen there? Rosie's going to college. And that property should, based on just an average and appreciation of 3% should be worth between $250,000 and $300,000. And I owe nothing on it. So just the tenants paying off the loan over 15 years now covered my kid's entire college education. And I'll do that for every kid I have. And then what you can do with what's cool about this is you have several options with your exit strategy, right?

So you could, instead of selling the place and paying taxes to pay college education, you can refinance and put it on a 30 year. And then when Rosie's kids go to college, You have another one. You can just repeat the whole cycle, right? You can pretty much have your entire generation for the next thousand years, college paid for, with one property each generation of wealth. Yeah.

Generational wealth. Anyway, that's why I like real estate, the four wealth generators. And of course, there's leverage. I know there's like ways to buy a margin. But besides that, like typically, if I have $1,000, most people go buy $1,000 in stock. But with real estate, if I have $1,000, I can buy $10,000, $50,000, 100,000. I mean, like, depends on how far you want to leverage.

But real estate, you can replace. the cash needed with creativity. That is one of my favorite things. With stocks and those things, you can't do it as much, but with real estate, you can literally replace cash with creativity. Your risk levels increase, I think, dramatically when you go on margin. No, when you go on margin for stocks. Yeah.

Oh, I mean that. Unwise move for 99% of the population. Yes. I agree. So, Brandon, you invest in, at least you started, in a pretty low cost market, right? So what if my market's more expensive than that? What are the differences or how should you approach it differently if you're at a more expensive market that maybe expects more appreciation over time? Well, one thing, we actually talk about this in the book a little bit, but Josh is something he says all the time, right?

Within like a two hour drive of your house, like almost everywhere in the country. There's a deal. It's a deal. You can find something usually within two hours. I mean, if you live in Bay Area, I know guys that live in like downtown San Francisco that are investing in an hour and a half outside the city and they're getting cash flowing deals. So there's actually like a couple options. You have three options when you live in an expensive city, right? You can either, one, find out what works in your market because some kind of real estate works anywhere.

Number two, you can invest where somewhere else, right, where whatever you want to do works. Or three, you can sit on the couch and watch TV every night and wait until you're 60 because, you know, you have a lot of excuses. So like, those are kind of your three options. Dancing with the stars. You can watch Dancing with the Stars every night and The Bachelor and find out who gets the Rose. Oh, yes. No, I think it's great advice. And I think also, like, a lot of people are like, throw their hands up in the air.

There's no deals in the market. I'm going to give up. Great. No competition for me, right? Yeah, exactly. Look, like Scott, I mean, Scott and Mindy live in the Denver market. And you guys have a very competitive, very expensive market. Both of them invest, right?

Josh, like you live in Denver. You're able to buy stuff. You know, I lived in Washington where it was super cheap. And now I just bought a triplex in Hawaii, which is the most expensive property I've ever bought. So, like, you can buy real estate anywhere. It's just the strategies change a little bit, which to, to, come full circle. Which we talk about. Exactly. That's that's the whole point. And I know you didn't ask me to plug yet, but I'm going to because this is Mindy's show and you know, you're going to let me do it.

Right, Mindy? You can do anything. Okay. All right. Good. So here's the idea. We wanted to write a book and I'm not going to spend much on this, but we wanted to write a book where when people say, how do I invest in real estate? We wanted to give a book that said, start here. We actually titled the book for a long time, start here. We changed it to how to invest in real estate because it's a little bit more like obvious what the book's about. But really, it's like, here, before you go and decide you want rentals or flipping or expensive market or cheap market, you need to get a full landscape. So start here with how to invest in real estate. That's the book.

I'll tell you all about it when you ask me if I ever get asked a question again. We'll see. This is for Josh. This is for Josh and both of you, if you want to both chime in on it. So suppose that I'm earning a high income or like a moderate high income, like $100,000 a year in a median city, right? And I want to invest in real estate while working at the full time. time job. How does that compare? What should I be prepared to do differently than say what Brandon did when he was working $8 an hour at Coldstone Creamery with no credit? What are the differences and

expectations that you should have in those two kind of different scenarios? I don't think that there's any difference. Despite what the late-nate TV guys will tell you, there's not any single one way to build wealth using real estate. So I can't tell you what is the right way for you in the median neighborhood, you know, making 100K, I can't tell you what to do because even if what I tell you to do is effective and works, it may not work for you because of your circumstances, right? Scott, you may have three kids and a mom who's in the hospital and, you know, you may have to work a second job because of that and you may have other exigent circumstances. And so like the strategy that I might have told you is the right strategy or the right tactic is not necessarily going to work for you.

So we break things down and not to plug the book, but I have to. You know, we've got this thing called the Ultimate Beginners Guide to Real Estate Investing. Brandon and I wrote this thing five, six years ago. And it was this basic primer on, you know, we looked at the different niches and the different strategies. You know, you can flip a house. You can buy and hold a house. You can wholesale a house. You can do the same with commercial property, with mobile homes, with all these different things, right? And we said, okay, let's expand upon that and really dive in deep. And that's where this book came from. But in order for us to give you an answer, I mean, we just need a heck of a lot more information.

And I would say before you cut me off, that it's not for anyone other than you to determine. So what you need to really do is stop and map out who the heck are you? Like, what are your inflows, what are your outflows, current and future and planned? What are you like doing? Do you want to be active? do you want to be passive? Do you want something local? Do you want something distant? Do you want to be managing it yourself? Do you want somebody else to manage it? Do you want to just invest money or do you want to invest time and sweat equity? I mean, there's a lot of decisions that go into what you're going to do as a

real estate investor. This book helps you find the answers to those decisions. We don't tell you the answer. Nobody could tell you the answer despite, again, what some of the claims of the get rich quick guys are. Only you can answer those questions. Once you answer them, then you can start to methodically make a plan to help you go forth towards that first deal. And then, you know, tools like Bigger Pockets are fantastic. In fact, bigger pockets is the only place you should go. But to help you help you with this. There's really no need to go anywhere else.

But anyway, does that help? I mean, I really don't think there's an answer. I think I phrased my question poorly. What I was trying to get at was, is this book going to be helpful to a broad range of people in a variety of situations? And it sounds like the answer is yes. and the information in the book is going to allow people to figure out how to map out that path. If you're young or old, if you're broke or rich, it doesn't matter. If you were looking to buy your first deal, this book will help you get the foundation you need

to start making decisions you need to make in order to go forth. And then there's, for example, if you don't have a lot of money like Brandon at Coltstone, we don't do a huge deep dive on every creative strategy for investing with no money down. Well, that's why you go and buy the book on investing with no and low money down written by Brandon Turner. So this is a really, this is a broad book that answers a heck of a lot, well, helps you find the answers to a lot of questions. And I think one of the coolest things, Brandon, I think we agree on this and I'm going to shut up is we've got over 40 stories in this book from successful real estate investors that have all been on our podcast. And I think the

coolest thing about that is in one of those stories you will relate. You will find somebody that we interviewed, whose story is written there that you'll be able to relate to. And you might say, you know, I kind of like how they went about doing this. I think I'm going to try going the same approach. You know, we talk a lot about like the story, Josh and I have told this before. And you probably may have heard in another connotation, but I really like the story. There's like three blind hikers walking through a jungle, right? Like they're blind. They can't say anything. They're walking. And all of a sudden, they get stopped by something in their path, right? And the first blind hiker says, you know, what is this thing? And he feels out. And he says, you know,

it feels like a rope. There's a hanging rope. And I feel it, but I can't get past it. And the second one says, are you stupid? It's clearly a gigantic leather wall. It's a huge wall. It's like hard, but kind of soft. And the third guy says, you guys are both nuts. This is clearly a tree trunk that I can wrap my arms all the way around. And they sit there arguing about it, arguing, arguing, arguing until the elephant gets up and walks away. Right. So like, this is my analogy for real estate is because when somebody says, no, real estate is this. No, real estate is this. No, I'm a real estate investor and I do this.

It confuses a lot of newbies, right? Because everyone has a different perspective of this giant elephant that we call real estate. And so the problem with like, and I mean, yes, you should read real estate books. You should listen to a podcast. But the problem with anything specific is that you're just getting one part of the elephant. And so we wanted to step back and say, hey, let's look at the whole elephant. This is what the elephant is. And I mean, whether or not you read it in a book like ours or just listen to a lot of

podcast or read a bunch of real. You need to get an overarching view. That way, like Scott, your question, right, if you're the $100,000 year person living in Denver or you're the $8, an hour guy living in, you know, podunk Washington, you can figure out how to make it work because real estate works for every person in every area at any time. The question is how and it changes and it shifts. And so until you understand the entire elephant, you're always going to struggle. And that's a preview of the book, by the way, because we do talk about the elephant in the room in our introduction. I really like that story. I'd never heard that story until I read the book. Oh, nice. I like that story because it's, I mean, it's kind of true. Real estate, I'm a real estate

investor. Oh, okay. Obviously, you're a landlord because I'm coming from my personal experience bias of I'm only a landlord or, oh, you must be flipping houses because that's what I do too. That's what I like about this book is, hey, here's all the different ways to invest in real estate. You might like the idea of real estate, but you don't want that fabled 2 a.m. toilet call. How many times? Have you gotten that call in your whole life, Brandon? Once? Personally? Yeah.

Yeah. I was with you when you got a 2 a.m. call about your house burning. I was there too. That was a toilet. Yeah. That was the way I burned your house down. The fire man. That was fun.

I like how we're all laughing about this now. People don't realize how maybe. It's pretty awful when it's happening. It was kind of. I mean, we took it all in stride. I mean, it was like, yeah, I got. So the story was just for a quick background, I'll tell you in like 30 seconds. I had a tenant.

We were evicting him. He stopped paying rent. This was a mistake tenant. I shouldn't have put him in the first place. It was my very first tenant. He lived there for a number of years. I ended up getting into allegedly getting into drugs. And then as he was moving out finally, like two days before the eviction, he had all his

personal stuff out, but he had left probably, I think it was like two or three tons of garbage in the house. He wasn't going to clean it out. So instead, he set a box on the stove accidentally, air quotes, turned on the, the Stove top the element, burner, and then left. And then, of course, the house burns. And luckily, the neighbor saw it, was able to call the police and shut it down. And it was an accident.

It was ruled an accident. And anyway, insurance took care of it. That's a great thing about real estate too, right? Like, everyone's always like the worst case scenario is like, well, what if your house burns down? Okay, well, insurance takes care of it. Okay. Oh, the worst case scenario, somebody's in the house and when the house comes down. Okay.

Yeah. You get the idea what I'm saying, right? But I got that message from the tenant who was like, like, hey, you need call me, your house is on fire that night when we were all, the four of us were all hanging out together. He didn't even say that he did it. He was like, it's on fire. It's on fire. Yeah, weird. I don't know how that happened. Yeah. Anyway, moving on. Tax season is one of the only times all year when most people actually look at their full financial

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people are commenting on the market. What's your kind of take on where we are in the market and how that should affect strategy. If this was the stock market, you know, what's your strategy? Your strategy is, it doesn't matter you invest in the market. You don't sit and wait and time the market. If it's the housing market, I think the strategy is somewhat different, but maybe not. I mean, really, it depends on the property, the strategy that you're looking at. You know, if price appreciation has started to slow down dramatically, you're in a market where flipping houses becomes a lot riskier. If you're in a market where rents begin to decline, you're in a market where you know, you want to be very aware of buying into a buy and hold situation, or at least you want to make sure that you buy the property cheap enough that you can take a decline of X percent and sustain it. So it really does depend on your strategy.

But I think the key is to be aware of what the market's doing. And when I say the market, I don't mean what the market of real estate in the United States is doing because that's kind of irrelevant. You want to keep an eye on it. You want to keep your ears to the ground on interest rates. You want to know what's happening in the global economy in broad terms because if you have a massive recession, at some point people are going to start losing jobs and they're going to stop paying rent across the board. And that will affect you, even if you have seen a pocket of growth in your city, for example. you know, Amazon moves into your city, you're going to see a huge influx of people. You know, that microeconomic factor is going to determine things. Even if the rest of the economy is going to hell, you're probably in a fairly stable market there, right? You know, a huge, huge manufacturer, huge company comes in and brings a ton of jobs. So I think the key is to keep an eye on what's happening broadly, but then what's happening in your city. You know, Denver, as an example, because some of us live there, has seen dramatic.

growth over the last bunch of years. And a ton of businesses have moved in. Real estate prices have shot up in kind. Appreciation has been fantastic. Rents, you know, everything's gone up. Is it going to stop? Is it topy? It feels a little topy. So if it feels topy, you better be a little more careful with that next deal. Maybe you want to put a little more money down. Maybe you want to make sure you're, instead of using the 70% rule on a flip, maybe you pat it even more. So I think that's how it would come into play. I'd love to hear Brandon's take on it. Sure. I mean, I think Josh, you just hit the nail in the head, right? Like, you want to buy, like when the economy is doing like where it is today, where it feels like maybe it's topy, right? You have a couple choices.

You can sit down and just watch TV for the rest of your life, right? And always be afraid, watch dance with the stars, yep. Or you can just go out and get really good deals. Like, Scott, this is something you told me once, and I really like the way you phrase it. You said something like, I'm going to buy really good deals in this market. When the market crashes, I'm going to buy really good deals. When the market rises again, I'm going to buy really good deals. When the market is at the top, I'm going to write really good deals. I'm just going to buy really good deals no matter what, because over the long term, that should work out well in my favor. I'm going to buy good solid investments no matter what. It's kind of like, what's the

word dollar cost averaging with, is that the right analogy, right? Yeah. I'm just going to buy continually and over time, I'm going to be fine. So, for example, it does change a little bit like Josh said, right? If I was going to flip houses right now, I would make sure that either one, I can get in and out super quick. I would not right now personally do a flip that was going to take me 12 months, unless I had another exit strategy. For example, like, if I could turn it into a rental and it would actually cash flow or break even. Okay, well, then I might flip it because worst case scenario, I turned into a rental and I waited out and do it the next one. I don't want to set myself up to a point where the only option is bankruptcy.

Like, that's what I'm going to avoid. The last thing I'll say, and I'll shut up is like in this part of the market, even if you don't want to invest. And that's fine. Maybe you want to wait until the market drops and okay. But it doesn't mean you shouldn't be trying. right now anyway because right now if you get really really I say this all the time on like live webinars that I do it's like I believe one of them perhaps the number one greatest skill a person can have in real estate is knowing how to run the numbers on a deal because if you're good at

and running numbers you can find good deals you can know what the bad deals are you can find partners easier you can raise money easier when you know how to find really good deals but are you going to start learning how to find good deals when the market crashes or do you want to start right now so you'll be ready to jump in when everything goes Kmart blue light special. You know, so start now, start running numbers, start meeting with people, start interacting, start, you know, like having those conversations now. And who knows, maybe you'll find a good deal in this market.

Great. And if not, you'll be really ready to do it once the market corrects a little bit. Do they have Kmart in Hawaii? They have old Kmart buildings in Hawaii. They have those here too. Are now, yeah, now vacant. They're converting the one by me into something pretty cool. So we're actually, we had a guy on the podcast on the bigger pockets podcast a few months ago

who took an old Kmart building that had been sitting empty forever, put in a couple million dollars of self-storage. And I can't remember. I think he made like $10 million in equity on this thing because he like bought it for like $3 million, put $3 million into it. Now it's worth like $21 million. Just self-storage from an old Kmart building. Again, like different strategies work in different areas for different people at different, you know, find what works in your market or go somewhere where the strategy you want to do. And one thing I'll chime in with this is that here on Bigger Pockets money. Our goal is to build just general good financial habits that support real estate investing, right? And if you just have a strong personal financial position, spending less than you make,

stockpiling cash, right? That's a good defense mechanism against the market downturn as well, in and of itself. And I think that that's a big component of it. What you're doing outside of real estate investing can impact your portfolio. If you're forced to withdraw or sell because of your weak personal financial position, that can put you in a bad spot in a financial downturn rather than a position of ability to exploit opportunity. There was a book out. There was a book out there where the guy talked about different ways to be smart with money. I think it was called Sep for Life, this book. Oh, yeah. I've heard that book. Yeah. Yeah, it's pretty good. This is Scott's book. It's a brilliant. It's a fantastic book about money. But like I think outside of

even like the what do you do on that event, I think, you know, one of the things we talk about in how to invest in real estate is is money. And this is a big component of bigger pockets, right? We talk about money because you have to understand how money, works in order to have enough money saved away to put as a down payment, or at least you have to be savvy enough with money to be able to go and get a loan and things like that. But Brandon loves these triangles that we've put in this book. And we've created this model about how the typical person deals with their money. And the typical person at the top of the triangle, imagine an upside down pyramid. The vast majority of their money goes to fund money. Income goes into fund money.

then their variable expenses or fixed expenses, their donations, followed by the savings, right? That's the average person. The average person that I know, the first thing their money goes to is all the crap they want. You know, the clothes, drinking, the bar,

Mindy's tossing it in the air. So now, if anyone listening has read a book called The Richest Man in Babylon, I know Scott has, Mindy has, it's one of my favorite books, one of the best books I think ever written on the topic. I don't know. I don't know how to read yet.

That's, well, that explains a few things. You should buy a manual on how to cut a beard. So in this book, you talk about taking that income. And the first thing that you got to do is pay yourself. So before you go and buy all the fancy stuff that you want to buy to keep up with all the neighbors and flash around is you got to pay yourself. You take the first dollar and put it to savings. And you set a budget, you know, it's something commensurate with what you can do. If you're making $30,000, it's not going to be $10,000.

It might be $50. But start somewhere and put money away every single month into an account for savings and pay yourself first. And then where you can put that, you can put that in one of a number of banks. You put in an ally. You put it on CIT. You put in any of these banks that pay high interest rates. And you could start making money on your money, which is really cool. But the point is start paying yourself first.

So at the top of this upside down triangle in the world of the richest man in Babylon, the first payment is savings and investments, then donations or fixed expenses variable. And at the very, very bottom is fund money, right? That model is a model that will help you get to that first investment. Why do you think so many people live paycheck to paycheck? Far too many people. Well, I think the answer has changed over time. I would say today, unfortunately, far too many people are caught up on social media, seeing what their friends are doing and seeing what celebrities are doing and seeing what influencers are doing.

And if you're on social media, if you're on Insta or Facebook or Twitter or whatever and you're watching the people you know and the people you aspire to be doing all this stuff and wearing this stuff and having experiences and you're seeing it yourself and you're like, Oh, well, all the cool guys are doing it, I got to do it too. You start doing that. And all of a sudden, now you're chasing everyone else, right? One of the most important things somebody taught me early on was life's not a race. You really are not racing other people. You have to live your life for yourself. And it's really hard for most people to do that, unfortunately. So stop worrying about everybody. Stop worrying about what Scott's doing and Brandon and Mindy and Josh.

Like, we're irrelevant to you. worry about you, start putting money away for you, start saving, shut down social media for a little bit and stop letting this stuff warp your brain and influence your brain as to what you have to do to keep up with the Joneses. I think that's a big part of what's happening today. I think there's another subset of people who just don't have the education yet who don't fully understand it. School does not teach this stuff. We do not learn this stuff. In school, a lot of people's parents never learned how to be financially responsible. so they're not going to teach their kids. And for me, I'm a huge advocate for schools going back to adding financial education. We have to teach us in schools because I think if we start to teach people young enough, we're going to get there.

Now, obviously, the very poorest of the poor, the folks who are really struggling, that's obviously a whole different story. But I'd say the vast majority of people, you know, you have people paycheck to paycheck making millions of dollars. You have people paycheck to paycheck making hundreds of thousands of dollars a year. It doesn't matter your class. It doesn't matter your financial status. It's training.

Yeah, I want to piggyback on that real quick. So you guys remember the Harry Potter movie, like the prequel, the fantastic beast and where to find them? So in the movie, there's this creature. And I don't, honestly, I feel bad. I don't know how to pronounce it. So they're Okami or Akami or something like that. I say Akami. I don't actually.

Akami. All right. So this creature is like one of the fantastic beasts that is involved in the movie. And the idea behind this animal is that it fits in whatever contains. it whole, like it's in, right? So it could fit in a tea kettle, which it does, or it could fill an entire room, right? I believe why most people live paycheck to paycheck is because their finances are like an acamee, right? So however much they make, it naturally rises. I think Josh coined the term a while I go income creep, right? So like our expenses rise to whatever we make. So if you make

30,000 a year, you probably spend about 30,000, maybe 29, maybe 31, but as soon as you double that to 60,000, you probably spend 59 or 61,000 a year. Most Americans spend a little bit more than they make, right? You make 100,000. I mean, I know people making half a million a year or a million a year, and they're living paycheck to paycheck. They're broke because people tend to fill their life, like an achemy. And so if you want to contain that, you just need a smaller container, which is where, I mean, everyone hates the B word, right, budget. But like, that's essentially what you're doing is you're saying, I'm going to put. Say it ain't so. Yeah, I'm going to put my money into a, and it doesn't to be budget. It could be just a financial plan. In fact, that's in the book we include,

like a personal financial plan where you're saying, I'm going to tell my money where it goes rather than just letting it be an Akimmy and fill whatever space it's at. Yeah, I think that's a great analogy. And I think that's exactly what we're all about here at bigger pockets money. Spend less than you earn, invest the difference and do it in something that's as effective as possible. Speaking of containers, though, where you live, see that transition, right? Speaking of containers, you know, when I wrote that book Set for Life that you mentioned earlier, I invented a term called house hacking and I patented it and all that kind of stuff.

Yeah, whatever. And I want to know your opinion on this because, you know, I thought this was one of the best waste around to get started in real estate investing. I want to know what your guys' opinion on that is for folks that are, because a lot of folks that are looking to buy their first deal, this might be an option that would be appealing to them getting their portfolio started. Hey, Brandon, I'll defer to you as the man who coined the term, not the man who invented it. By the way, let's talk about that discrepancy.

There's all sorts of terms out there in the world of real estate investing. Some have been coined by people like Brandon and some have been coined by gurus and some, but this stuff has all existed. Yeah. So we didn't invent anything. He didn't make it up. It existed. We just coined a term to describe what it was that people were doing. So don't ever be fooled that like just because he coined it. Some guy has a thing. Yeah. It's been happening for a very long time. So I just coined it. That's all. Scott's got a personality disorder clearly. Brandon's article came out way before your book did. Let me talk about house haggied. All right. So when I bought that very first house, my story, right?

Way back in the day, I bought that house. I lived in it. I fixed it up with the one, two, three, home depot book, right? And then I sold that. I made like 20 grand. The next thing I did is I still didn't know much about real estate, but I was like a duplex was for sale in my area. It was two houses on one lot.

So there's like a two-bedder and one bath. and one bed or one bath. And I was like, hey, if I bought this property, I could live in, because I needed a place to live. I sold my house. I could live in the back house, like the smaller one, and I could rent the front one out. So I did that. I lived in the back one. I went to the front one out.

My mortgage payment, including taxes and insurance and everything, was like $6.25 a month. And I remember my tenants walking over, like the first day, which I shouldn't have collected a rent by hand, but I did. They came over and maybe $650 in cash. And I realized, like, all was in like this epiphany, like, I'm living for free. Like, I'm living in the house that I, own and I'm not paying anything. So when you do that, you now have the ability to, I mean, not that you have to live free, but you can live, I know people doing house acting in like,

Maui, right? Like, I'm actually doing it right now. Like, you still here, but you can do it in pretty much any market, but it either lets you live cheap or free. And by doing that, you can get him with a very low down payment loan, like three, three and a half percent, sometimes even zero percent down if you use like an USDA loan or a VA loan. And you get like training wheels. Like you learn how to invest. while you're kind of doing it and you're living there. And maybe best of all, you can save money because you're not spending so much in your housing expense.

What's what Scott talks about in Set for Life is like your housing is probably your biggest expense. So when you can eliminate that, think of how much more money you have to invest in something else. So that's why I think house hacking is a fantastic choice. There you go. Well, Mike, Mike, all right. Yeah, there you go. I mean, they don't even know how to respond to this.

I know. Side note. That duplex later on, we found out, people would take pictures of it. occasionally. I thought it was the county. So I thought the county was like taking pictures for assessing every few months for some weird reason. Anyway, we finally found out later. We found this out because somebody knocked on the door, some Swedish tourists knocked on the door of the other house, my tenant's house. And they wanted a tour of the Cobain house. And so we found out this was the house Kirk Cobain was born in. He actually lived in both houses on the property when he was born.

So from like zero to six months lived in the one bedroom. Then his parents moved from for the next two years of his life to the larger house, the two-bedroom house. And then they, moved out. But yeah, Kirk Cobain is my former tenant. By the way, I have been in a spirit. What? Oh, nice. I've been encouraging Brandon to turn this into a museum, a Cobain museum.

So if you have a bunch of Cobain memorabilia and you want to open a museum, you guys should partner get in touch with Brandon. Mail it to Brandon. Buy a grungy first house and go from there. There you go. I'm on a roll here. I'm sorry. I'm getting going.

I quit. You are. Uh-oh. All right. All right. All right. All right. Well.

Moving on. So, okay, guys, you wrote this book, How to Invest in Real Estate. You have a whole website, a whole two podcasts, a forum, a blog about real estate. What's the takeaway you want people to take away from this book? What's the main thing you want people to get out of this book? I would say the main thing is you can do it. Well, I'd say there's a few main things. One, it's possible.

I'd say secondly, you know, there is not any one answer for, uh, how to do it. The book, you know, is really helpful in helping you come to the decision on what works best for you, what tactics and what strategy. I'd say thirdly, the thing that Brandon has harped on a couple times already, which is you could sit on your behind on the couch and do nothing or you can get started today. And having a sense of urgency in your financial life, I think, is probably for me one of the more important things. And I think you guys do a good job in talking about that on the show here. But, you know, if you keep waiting and waiting, hey, one day I'll be able to do it. One I'll be able to, one day I'll be able to start saving money. Well, you know, that day you're going to

drop dead. So live today like you're not going to have a tomorrow. Start making moves towards the end that you're seeking and you'll start to make progress. Make a plan. Start mapping it out. And first you've got to map your financial plan. Then you got, if you've got money, you worry about that less and you start mapping out your real estate plan. If you don't have money and don't see that coming in any time immediately, there's other ways to do real estate without money like I I talked about earlier with the book on investing with no and low money. But again, we cover all this stuff. So get your act in order, make the conscious decision that you're going to change your life

financially and that you want to build wealth for yourself or generationally. Or even if you don't, like even if you want to build wealth for like, hey, in 10 years, I want to own a jet ski. Cool. Start doing that. If you never ever want to own real estate, at the very least, hopefully this book motivates you to get off your behind and start planning your life financially. but really the book is more catered towards real estate.

So hopefully in 10 years you're buying that second home or the house for your kid. That would be my say. What do you say, Brandon? I'm going to wrap up Josh's thought. So I'm going to say this. Jim Rowan, one of the best speakers of all time personal development guys, says life doesn't get better by chance. It gets better by change.

So I hope that's what people will walk away with what Josh is saying here, right? Like if you want your life to get better, you've got to make a conscious choice to make it better. So remember, life doesn't get better by chance. It gets better by change. So my hope is that this book makes a change. Love it. That's fantastic.

Why do you think people are so scared to get started investing in real estate? I think they're scared because it's scary. And I think the reason it's scary is because we don't teach this stuff. There's no knowledge, right? I don't know, Mindy. Why don't you go snorkeling with sharks? Why do you think I don't? Because I know you well enough.

I don't want to get eaten. Well, you don't do it because you don't. But if you knew that the sharks that are in the water right there aren't ever going to bother, you still probably want, you still wouldn't do it because that's total fear. And I get that. Thank you, Spielberg. But with real estate, like, it comes with knowledge. A lot of people don't put money in the banks because they don't trust the banking system.

They don't know. They don't understand that, like, no, the government's not going to just take your money. No, the bank isn't just going to collapse and everything going to disappear, right? So it just comes with education. The more we know, the more we understand, the less nervous we become. And so again, which is why I passionately advocate for increasing financial education as early as elementary school. I mean, I think we should be teaching this stuff in elementary, middle and high school. It should be part of the curriculum.

Far more important to walk out of school learning about money and how it works than learning to write cursive at this point. So, you know, let's expand a couple resources on curriculum around that. I think that's where the fear comes, really. And also because most people that you talk to probably have never invested in real estate and they're scared. The same reason Brandon's father told him that he was going to be broken stupid, he was right on half of it. This is generational knowledge that doesn't really exist. I think that's the answer. So I'm going to add in like there's two different approaches to real estate.

People naturally feel like they're jumping off a cliff. Like I have this picture of like somebody cliff diving, right? think of somebody jumping off a cliff. Their friends are at the top laughing at them falling. And that's like this lie our brain tells us, right? Because our brain has one goal, keep you alive. And so the brain doesn't want you to venture out and do new things. It doesn't want you to like, I don't know, risk anything because your brain wants to keep you safe.

And so our brain tells us, no, real estate is jumping off a cliff. It's scary. Your friends are going to laugh at you. You don't know what you're doing, right? But in reality, that is not what real estate is. Real estate investing is like a hike through a mountain, like through a mountainary. Like me and Josh did a 14er in Colorado a few weeks ago. or months ago, it was awesome, right? That's what real estate is. And the cool thing about that

is it means it is a community hike. Like, you do it together. And the more people you have on that hike saying, hey, watch out for this little, like, you know, rock here. And hey, there's a there's an easier path right here. You go around this way. Like, that's what real estate really is. And that's what bigger pockets is in a whole. I mean, that's what Josh here built over 14 years, right? Is a community of people hiking together on this quest of financial freedom and saying, this is how we're going to get there. And so that's why I think people are afraid because they feel like they're alone on it. But, you're not alone.

As Michael Jackson would say, yeah, you are not alone. Wow. Deep. Okay. Now it's time for the famous four questions. This is a creative segment. Wow. Thank you.

These are the same five questions that we ask of all of our guests. Five? Yes. Five questions? Yes. So why is it called the famous four? The last question is more of a man. This is a money show about math.

The last question is tell us where people can find out more about the book. That's a command, not a question. Yes. So we'll have four questions, one command. All right. As we heard in the Zena Kumak FinCon bonus episode, I will demand that you tell me that last one. Okay. But the first question is what is your favorite finance book?

Richest man in Babylon. Same. Brandon? I'm going to go with a toss-up between three books. Rich dad, poor dad. Dave Ramsey's total money makeover and set for life by Scott Trench. Yes.

Whoa. I invent house hacking as a term. Yes. You're so smart. I'm so glad you're here. What were your biggest money and mistakes? Is that the only book question? That is the only book question.

I know. I know. I'm so sad. I do add a band until our command later on. I want to add a book. It's not a money. It's not a money book. It's a life book.

Okay. It's the monk who sold. is Ferrari. This is literally, I think, one of the more impactful books I've read in my life. It's about an attorney who has everything, who's crushing it in life, rich, he's famous, he's successful, and he has a heart attack. And he realizes that he didn't actually have everything. He had all the stuff that society tells us that we want, but all the stuff that we don't really need. And it's a book about life. It's a book about how to find happiness, how to find the true you.

And it's deep and it's awesome. So I think everybody should get out and read that. I have never heard that one recommended, so I'll have to check it out. I haven't heard that one either. We will have links to all of these books in the show notes at biggerpockets.com slash money show 42. Awesome. What was the questions?

Sorry, Scott. The next question I would say is what is your biggest money mistake? I'd say my biggest money mistake was unloading parts of my stock portfolio because I thought I could time the market. And instead of being disciplined, I mean, this was 20-something years ago, right? Instead of being disciplined and holding on tight to those stocks because now I don't have them and they're worth many, many, many times what they were worth back then. And I did not multiply the money as well as I could have in the other years.

uses that I put them towards. So I would say not being smart with stocks and trying to time the market and chase the market. I think it's a great one. And I think it's great to point out that we've had a number of these mistakes called out on the show. And sometimes it's like, I bought a car that I shouldn't have and all that kind of stuff. But the biggest ones, the one that seems to have like the largest dollar amount of impact is that opportunity cost, that under deployment of capital over time compounded over years. Like that's that's stuff. Like I think it's just a great lesson of, hey, that's the biggest money mistake is not investing and not investing in a way that is reasonably likely to have a strong long-term result.

So there was a time, I don't know, probably like eight years ago now where I was building my real estate portfolio. I started, you know, I was flipping some houses. And I was just continually losing money. And I couldn't get a handle on it. And then that's why I say Dave Ramsey's total money makeover. It's not that I follow every single thing Dave Ramsey necessarily teaches in there. But I read that book at that. point and I was like, he's right. I don't even have a budget. Like, I did not have a budget at all, right? So I sat down and I took my entire like last three months and I categorized everything in like a spreadsheet. And I realized that I was spending on average a thousand dollars more than I was

making every month during those three months. And I had no idea. No wonder I was going deeper into credit card debt. I couldn't get out. Like I was just overspending because I didn't know what I was doing. That was a huge mistake was not driving my money. I was letting my money drive me around. Like I was banging around in the back of the pickup truck with no seatbelt on, right? Like that's what my money was doing. And it wasn't until I was conscious of that and made some tweaks. And what's funny is like I turned that around to where I was actually saving a large chunk of money. And I didn't change anything about my lifestyle.

Like I never noticed a change at all. It wasn't like all of a sudden I was like picking up cans from every grocery store trying to go cash them in at the store or you know, at the aluminum recycling place. Like I wasn't doing anything weird. It was just knowing what my finances look like. like forever changed my finances, just being aware of it. What did you change, by the way? I'm just curious. I mean, I don't even know.

I mean, it was probably like eating out a little less. And it was maybe, you know, looking at my bank account saying, do I really need this thing? In fact, actually, there's a story in the book where I talk about how recently I found, what was it, like $300,000 hidden in my bank account. Like, I actually tell the story how I found like, I wish I had the exact number. It was like, yeah, two or $300,000. How big is your bank account that you just find $300,000? Exactly, right? It was hidden. Well, and so like the key to that, when I say that, I found $300,000 sitting in my bank account.

What it was was I found like three subscription services. Recurring payments and it added up to like $150 a month. I wasn't using them. And if you take $150 a month times an 8% return over the course of like 30 years, it was like $300,000. $365,402. Ah, you have my number. That was it, right? So like if you take those little things like in your your life that are just subscription payments, right? Are you using Netflix and Hulu? And are you using your Amazon Prime or your whatever video or Amazon music? Like so many businesses today are going subscription models. So it was just like being aware of them and canceling things I didn't use. And anyway, it turned around that $1,000 spend. And I didn't even notice it. Like I literally didn't notice it. It just all of a sudden got better. So he didn't actually find 300K in his bank account folks. Just just to clarify. It's a metaphor for then. Yeah. It sounds better.

that way. It should compound to $365,000 once I shut those things off. So anyway. And by the way, like we all talk about like in set for life, you might read about stopping your coffee habit. You know, we also have these subscription habits. And it's only going to get worse because businesses have realized that this is a good model. And so I heard that the washing machines pretty soon are going to all be like subscription. I mean, there's crazy stuff. Yeah, well, I'll put out there that like, like this is what's killing your budget is your fixed costs, right? We've gone through almost all of them right now is the subscriptions, your housing, and then after that, it's your transportation.

And, you know, most people have a fixed expense there with their car payment or lease or whatever. You know, as you eliminate those fixed expenses from your life, saving comes really easy. And you don't have to worry about that coffee habit or Brandon has a really bad Starbucks habit right now. It's not a bad. It's a good habit. It's a good habit every day.

But that's a way hard to happen every morning. It's a daily. habit. As a Starbucks shareholder, I say thank you. But Brandon can't kick his Starbucks habit. He can kick his mortgage payment and housing payment, though. And that's why he's able to save so much money. There you go. Okay. What is your best piece of advice for people who are just starting out? In what? In their financial journey, in their, particularly in this case, in their real estate journey, because we're talking about how to invest in real estate. What is your best piece of advice for people who are just starting out after buying the book. I would say my best piece of advice after buying the book is get out there and I've

already given other advice. You know, you figure out what you like, look at your budget, all this stuff. Start looking at real estate. Walk around the neighborhood. Look at houses. Go to go check out open houses. If you are a renter and don't own a home, go to every open house in your area. You'll start to learn a lot about real estate. You know, you'll start to learn what you like, what people like look at nice houses, look at crummy houses, you'll be able to tell the difference. So get out there, do that, start evaluating those deals. Brandon puts on a weekly webinar every Wednesday at BiggerPockets. What's the URL, Brandon? BiggerPockets.com slash webinar. Yeah, it's a great boot camp, great training camp to learn how to evaluate real estate deals and

other things. We have other webinars as well. I think that knowledge, understanding your market, understanding how to evaluate a deal, reading the book, getting a sense on what strategies will work best for you. You start with that. Dive in on the forums, listen to Bigger Pockets podcasts. I mean, it'll be hard for you to not continue forth. You'll be motivated. You'll be excited. But do something, right? And I think that's the last thing is it is hard to do. But what makes it easy is doing something and doing it every day. So set forth time every single day. Set 10 minutes a day to read. our book, you know, read Scott's book, read Mindy's book, you know, read any book that's not our books,

right? Read the forums, go on and interact and communicate and connect with one of the million other investors or people in the real estate space. Evaluate a deal. Look at properties. Do something every day. If you were doing something 10 minutes a day, 15 minutes a day, it'll be inevitable within six months a year. You'll have the knowledge, the fear will be gone. You'll have expertise and skills to be able to make it happen. Perfect. Brandon, what is your best piece of advice? I was going to say the consistency thing as well because, you know, like everyone knows how to lose weight, right, diet and exercise, but very few people do it because people aren't consistent

with it, right? So Josh stole mine, so I will add another one. Yeah, famous quote, you are the average of the five people you associate with the most, right? We naturally become like the people. That's why like people end up looking like their dogs, right? So like you end up like the people. You really should not use that example for it. I look exactly like my dog. No, but you guys never see somebody like jogging and you're like this like dog and then you see the owner and you're like they're the same person.

I see that all the time. Husbands and wives end up looking like each other. If you hang out with a lot of like people who play rugby, you probably start playing rugby. If you hang out with a ton of people who play Magic the Gathering, you probably start playing magic gathering. When you hang around people who invest in real estate and do it like consistently, you naturally are going to start investing in real estate. It's almost like a thermostat, right?

where like you surround people who are at the one temperature, like you're going to work up to their temperature. You're probably not going to bring them down, right? So, yeah, hang around people. Love it. What is your favorite joke to tell at parties? Brandon. Guy walked into a bar and said,

ouch. But I don't ever want to go to a party with you. So, oh, you guys are both dads. I was going to say, so Josh, you're a dad. You should have some dad jokes, but I guess Brandon's a dad too. Yeah, I'm like the worst joke teller of all time. Did you hear Brandon? I would have to say, you know, this one came direct from the mouth of Mr. Scott Trench.

And it would have to be, what's the pirate's favorite letter? Ar. No, it be the sea. I lost to that joke with a real pirate jokes battle with a real pirate in Jimmy Buffett's Margaritaville on a family vacation to Orlando. It was very embarrassing. We had gone back and forth for like five, ten minutes. The whole restaurant goes into it, and I lose on that one. He goes, what's a pirate's favorite letter?

Arr. No, we're in love with this. And the whole restaurant just, oh, you lose, kid. It was really devastating. I'm sad I wasn't there. I'm not. Okay, so, Josh, where can people find out more about you? They can go in bigger pockets.

I've got lots of information all about my. me on bigger pockets. But I'm taking a bit of a respite from social media. So I would say the best way to find me is on bigger pockets. And if you reach out on social, I'm probably not going to respond at this point in time because I feel like I feel like I need a little downtime. I'm tired of chasing Brandon to Hawaii and Scott to the rugby matches and Mindy up the mountains. I'm feeling envious of all you people and all the things that you're doing. And so, I had to take a break. No, I mean, I legitimately am taking a bit of a break on social, but Bigger Pockets is probably

the best way to reach me. If you want to reach me, Scott, you can email Josh at biggerpockets.com and it will come right on through to my inbox. So feel free to say hello. Always happy to respond and answer any questions. You can also reach to M.com at BiggerPockets.com or really, really awful bad jokes at BiggerPockets. My Twitter is at J.R. Dorkin. My Facebook's at Joshua Dorkin. Feel free to follow.

Sounds good. Brandon. Where can people find out more about you? I'm like a 13-year-old girl. So Instagram at beardy Brandon. Beard with a Y. Beard with a Y. Beardy Brandon. And bigger pockets. I was going to say. And Amazon and Barnes & Noble. And, you know, I'm around. They were all over. Okay. The book is how to invest in real estate. And you can buy this book on BiggerPockets.com slash invest in RE. If you purchase the book by October 31st, you will get access to the live webinar,

which is being hosted on November 8th, with both Josh and Brandon. Exclusive webinar only available to people who purchase at biggerpockets.com slash invest in RE. You can ask Brandon any question you like, like, what's your favorite lease clause? what's your favorite way to fund a deal? Why does your hair look like that? Do you want to tell Josh how awesome you think he is? Do you want to thank him for founding Bigger Pockets or simply comment on how striking his resemblance is to Adam Levine? Go to BiggerPockets.com slash invest in RE and purchase the book to gain access to the webinar. Okay, Josh and Brandon, I know, well, Brandon, I know you're really busy. Josh, thanks so much for waking up on time to chat with us today. Really appreciate you guys.

Scott, do you want to say anything? No, I thought that was the best exit we've ever had. That's because I have nothing to add. I feel most comfortable with these guys giving them crap. I've got to say that after your 430 second show, I really appreciate the invite. It's been great. Lots of humor, lots of entertainment and maybe a little bit of knowledge espoused. So well done.

You guys are doing a great show here. Not, you know, not bigger pockets. We do a great show with the bigger pocket show. This is pretty good too. Keep listening. Keep listening. Thank you. We're trying.

You guys are going to come back with some better jokes next time. And that would make it go from a nine and a half to ten out of ten. That's cold, man. That's just cold. Well, you know. I was trying to sneak out a cute joke about your triangle, but it didn't work out. Oh. Next time.

I'm really disappointed because, Scott, usually you're pretty on top of it. As much as I hate your jokes, you're like right there with them all the time. Yeah, I like that angle for jokes. All right. So we are out of here. Again, thank you so much for your time today. And we'll talk to you later. All right.

That was Josh and Brandon authors of How to Invest in Real Estate. What did you think, Mindy? Oh, that was so much fun. I really do miss seeing Josh at the office every day. And he's got this energy about him that's just infectious. He's funny. He's really. I just love talking to Josh.

Like, he's, it's just fun. It is. I want to hire him to just come over and talk to me for a while. Yeah. He's all busy. We definitely should have had them on before. I'm really glad they were able to come on now and we will surely have them back again. I really, really, really loved reading the book.

I did a lot of like pre-reading, the editing, not the actual editing of the book, but I edited for like content and make sure that they weren't just telling big fat lies, which they don't. Everything in the book is true. But the book is set up in a way. that anyone can understand. It's not filled with jargon and all this garbage. You're like running to a dictionary. What does this word mean? What does that word mean? It's written and plain English. And it just tells you kind of what the title says, how to invest in real estate.

So if you're interested in the book, if you just want to go on the show on the webinar and give Josh and Brandon a hard time, buy the book at biggerpockets.com slash invest in RE. Nice. I was really unclear on what the book was about at first. But I'm glad we cleared up over the course of this. Yeah. Okay. Well, that ran very long. Thank you so much for listening to the show today.

I'm going to ask you a question. If you're already all the way here, I want to ask you for one more favor. We want to grow our show. I hear from people all the time. Your show changed my life. Your show introduced me to the concept of financial independence. Your show is so great. I just really enjoy listening to your show.

And people don't necessarily find it if they're not looking for it. So if you like this show, if you know, know somebody who wants to invest in real estate, please share this episode with them. You can find the show notes at BiggerPockets.com slash Money Show 42. Just send them a link. Hey, this is a show I think you would really enjoy. Yeah. And also, if you're listening on your phone via the podcast, like through iTunes, go ahead and click subscribe. A lot of people actually don't know that you can just click subscribe and you can subscribe to our podcast. And you'll get notified whenever a new one comes out. So that you won't miss one. Yes. So I think that would be really convenient for you.

the show and don't want to miss any episodes. And that obviously helps us out. And we do come out on Monday morning. Sometimes Monday mornings, the shuffle and bustle is a little much. You don't have to worry about downloading it. It's already there if you subscribe. All right, Scott, thank you so much for your time today. From episode 42 of the Bigger Pockets Money podcast, this is Mindy Jensen and Scott Trench with Josh Dorkin and Brandon Turner. And we are leaving. Goodbye. Goodbye.