BiggerPockets Real Estate Podcast - 134: Creative Finance and Gaining a Millionaire Mindset with Pro BMX Rider Terry Adams

Episode Date: August 6, 2015

On today’s episode of the BiggerPockets Podcast, we sit down and dig into the life of a professional BMX bike rider Terry Adams. Outside of his many accomplishments in the stunt bike world (X-Games gold medal, appearance on Glee and Ellen, and more), Terry is also an accomplished real estate investor with some incredible strategies for building wealth. In the interview, we cover everything from investing with no money, to dealing with personal finance concerns, to mindsets, and more. This show is about to rock your world, so grab a pencil and some paper and let’s get started! In This Episode We Cover: Who Terry Adams is and what his profession entails How he got started in real estate The details of his first property His trailer property How he finds great real estate deals What you should know about finding a mentor The ins and outs of the “BRRR” strategy What exactly line of credit investing is Tips for dealing with banks How your mindset affects how you invest in real estate The details of Terry Adams’s portfolio The secret to building wealth with the help of mentors The importance of knowing your net worth And SO much more! Links from the Show Terry Adams on The Ellen Show (video) BiggerPockets Meet BiggerPockets Forums BiggerPockets Podcast Books Mentioned in this Show Secrets of the Millionaire Mind by T. Harv Eker The Richest Man in Babylon by George S. Clason Tweetable Topics: “There’s always a way to make it happen.” (Tweet This!) “The more I manage my money, the more money I have to manage.” (Tweet This!) “You take your other liquid asset and you invest it, because that’s how you build wealth.” (Tweet This!) Connect with Terry Terry’s Instagram Terry’s Twitter Snapchat: terryadamsbmx Facebook Fan Page Terry’s Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 134. I want to be a millionaire. I want to say that my net worth is at a million. And I'm happy to say that with investing in real estate, it was relatively easy to make those numbers grow. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place.

Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin, host to the Bigger Pockets podcast here with my co-host, Mr. Brandon Turner. What up, B? What up? I feel pretty cool today because we are talking to a cool guy. And I'm not a cool guy normally, but today I feel a little cooler.

Yeah, well, you know, you need it. I do need it. I'm like the nerdy white kid gets beat up a lot. Is that why you pick fights with guys bigger than you wherever you go? I didn't pick a fight with today's guest. We just got them recording and I didn't. I should have. You didn't. You should. Yeah, that would have been funny. Yeah, I challenge you to a bike off. I could do that. Yeah, today's show you guys are going to love this. Guys, a professional BMX bike rider does some amazing stuff. I was actually watching YouTube. I just a little bit ago. He was on Ellen, the show, like, Ellen and he's doing some amazing stuff.

He was on Glee. He was on Glee. We'll put a link to the Ellen thing. We'll actually embed the YouTube video on the show notes page at biggerpockets.com slash show 134. So make sure you check that out. It's incredible what he can do. So we'll get to that in a minute.

But before we do, why don't we come to today's quick tip? All right. Today's quick tip is actually based on something we're going to talk about later in the show. In the show, the guest mentioned the idea of how a property manager can help you find good deals. And so I want to expand on that a little bit. I had a conversation with a guy. We went out to lunch a BP member a few weeks ago. And he asked me what he should do to get started finding deals.

He can't find them in the MLS. And I said, well, here's a very, very simple thing to do. Go every week to one local property management company and just go introduce yourself and say hello and tell them you're looking for properties. If they have any owners that want to sell, you know, you want to sell. I mean, I even told them to bring donuts if you have to. Make them love you because they're usually like, I mean, this. sounds really, really like I'm stereotyping, but most property management companies are older women that work there. I see it all the time. They're like 50, 60 year old women that work there. Way to do

it, man. I'm just saying. I see it. You know, I mean, you had to do it. I had to control yourself. I couldn't control myself. Like women named Edith and Gertrude. Is that kind of what you're oftentimes there. Oftentimes, there are older women. So if you go there, they, I don't know, they like, they like, Brandon's in here. And so like, I don't know, I build that relationship because I'm like the young guy that's eager about real estate. So build that relationship, bring them donuts if you need to. And every week go to a different one. So you repeat them, I don't know, once every month or two. And just let them know you're looking for deals. If they have any owners that want to sell, you know, you'd love to get in touch with them. And yeah, they're happy to give leads

because they're hoping you'll keep their business with them and instead of taking it elsewhere. So there you go. That's a quick tip. That was kind of long. Good tip. Good tip. A little long, but, you know, solid except for the part where you, you know, insulted property managers. Did you really? There are two kinds of real estate investors. Those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties.

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One uncovered claim can undo years of progress. Before your next acquisition, review your insurance. Talk to NREG and get investor-specific coverage from specialists who actually understand at nreg.com slash B-P-Pod. That's n-R-E-I-G.com slash B-P-Pod. All right, today's show, we've got a guy who, when I told my brother-in-law, Jesse, about it, it was very excited. Let's just say, this guy is a superstar.

This guy is a gold medal winner. And he... Not the Olympics. X-Games, but gold medal winner in the X-Games is pretty much a gold medal in the Olympics, because they don't do that in the Olympics. So it's the same. Wow. I'm just,

we haven't even got Terry, if you're listening, I apologize in advance. And it's a good thing that you didn't hear this before, you know, we did our interview because we were recording this one after the event. I want people to know he's not like Michael Phelps. He didn't swim,

you know? I'm setting you up for a cooler thing, which is the X games. Yeah. I'm building him up. Okay. Yeah. So he,

he, he's an artist. What this guy does. a bike is unbelievable. And what's really cool is, you know, smart enough to know that he's not going to be, you know, making money as a biker forever. And so he sought to get into real estate. And we really get to dig in, talk about mindset and other things. The guy I'm talking about, his name is Terry Adams. And I'm super excited to bring him. So let's get to the show. Terry, it's a pleasure to have you on the show. Thanks for joining us.

Thanks for having me all, man. Greatly appreciated. Yeah, yeah. So I don't know very much about you, except for that your name when I type into Google comes up with a lot of results. So apparently people know who you are. Seriously? That's really all I know. Can you claim? I apologize for my co-hosts because, you know, we have guests who should be known and guess who shouldn't be known. And he's kind of a big deal, Brandon. Tell me why. Terry, what do you do? To make a really long story short, I'm a professional BMX rider. And BMX are a ton of different types of BMX. There's BMX racing, the guys racing, there's BMX Park, guys doing the ramps. And what I do is BMX Flatland. And it's a very niche side of the sport. It's almost like

dancing on the bike and it's all done on the flatland. So I've kind of built my career around BMX flatland over the last 20 years or so. Very cool. You know, by career you mean something like what. Not a big deal, but I think you won a gold medal. I mean, not really that big a deal. We don't have to talk about the gold medal that you won, but I think you won a gold medal, didn't you? Yeah, you can mention it. Yeah, yeah. Yeah, I mean, it's cool because as small as Flatland is, I've kind of learned how to promote myself just as an athlete or a BMX rider. And that's how I've kind of stood out in the industry to be as successful as I am as far as obtaining sponsors because you know flatland may be small but if I can get flatland uh and all these media outlets just like

everyone else then I'm able to obtain the sponsors that that the other riders are getting so that that's kind of how I've ran my rig for for a while and it's uh it's worked out for me so I'm super happy about it very cool and I will tell you that when when my brother-in-law found out that we were interviewing you. He lost his mind. So, you know. That's awesome. Yeah, man. That's awesome. Well, we got you here, you know, not to talk about BMX, but, you know, obviously we're happy to talk about it. We've got you here because you are a real estate investor, correct? That's correct. Yeah. All right. So let's get into that. Why, you know, why would a guy like you? I mean, you're out there working your job, which is, you know, to be a professional athlete. Why did you decide

you get into property. You know, you could have put money in the market. I'm sure you have. You know, put money elsewhere. Why real estate? I guess the easiest way for me to put it is, you know, riding a bike for a living, you know, I kind of grew up wanting to ride bikes. It was a dream of mine. You know, it was like 100%. I was a kid with my whole walls were plastered and guys that rode bikes. Well, at the time I was a kid, I didn't really realize that those guys were actually making money doing it or they had monthly salaries doing it. I just wanted to be as good as those guys and be in the magazine. So after my focus was just being in the magazines, just being in the magazines in the videos,

which was VHS tapes back then, I became obsessed with it enough to where I put myself in the media so much. I kind of earned a spot for myself to obtain those sponsors that were actually paying me a monthly salary. Well, then when I got to that point, It kind of really didn't feel like a job. I was kind of like, man, I'm riding my bike. I'm kind of living my childhood dream.

These companies are paying me to do what I love. And so I started to think, obviously, man, what am I going to do after this? You know, what can I do to create the same feeling? And the feeling that I got was just getting checks in the mail, you know, for just doing nothing. So I kind of landed on real estate, you know, for that main reason is that, when you invest in a rental property, besides the fact that you're building wealth every month, because your tenants are putting money into your equity of your home, you are getting these checks in the mail. And it kind of felt exactly the same way as it did as being sponsored by these companies.

So that's kind of what got me interested is, you know, I don't ever want this life to end. So when the sponsors and the bike riding career does end, how can I supplement that income and keep doing the same thing that I'm doing, which is essentially just riding. my bike and, you know, doing kind of whatever I want to do. So there's no, like, geriatric BMX tour. No. All right. All right.

Yeah, I mean, golf, you've got it. So, yeah, you never know. Yeah. I mean, we have a world, we have a world circuit, you know, and that circuit's four stops. Sometimes I attend it. Sometimes I don't. One of the stops on the circuit is here in New Orleans. I'm the one of the organizers of that stop, and it's this month on the 25th.

Oh, cool. Well, if it's ever in Denver, please come on. and let us know, man. We'd love to come and check it out. Cool. So you chose real estate, and I think a lot of people agree with you about the checks and the mail thing. You know, it's kind of nice to, you know, on the first of the month, go to the mailbox and suddenly you got checks or you've got, you know, money in the bank. And that's a beautiful thing.

So let's get into your beginnings. And before the show we talked about your, you know, you had talked about making mistakes and wanting to be this guy who could help. spread the word about to people who are just getting started about what this thing is like. So, A, I love that and we really appreciate people who are open about just, you know, the ups of the downs. And let's kind of go to the very beginning. What was the first property that you looked at? What was that deal like? And mark us through it. Yeah, it actually started off. A lot of my family grew up in trailers. And the first property I had was the trailer. And when I had that trailer, I didn't have the mindset that I had now. I was basically just living comfortable. I was like, in my head,

I'm like, I got these couple companies that are paying me. Man, I'm going to stay in this trailer. I'm going to pay it off and I'm going to stay in here and this is going to be my forever home. At that point in my life, I didn't really realize that I could have more or that I even wanted more. So there was a couple times where I've been considered taking that mobile home and putting bricks over it and like Hurricane improving that thing because in my mind, you know, I kind of felt like, not that that's all I could ever have, but that's kind of where my mindset was. You know, I didn't, you know, a lot of my family growing up didn't really teach me to invest money or, you know, basically I was comfortable where I was at, you know, and I came across a good friend of mine, Bobby Carter suggested a book to me,

Secrets of the Millionaire Mind. And that book was basically a great, starting point for me. I'm not a big, I'm not a big reader, but it was very simplistic to where I understood it. And it was basically changing my mindset about money is what the whole book's about, you know? And at that point in my life, I didn't have a mindset about money. My mindset about money was just, I want to get this trailer paid off and I'm going to be sitting pretty, you know. It never in my wildest dreams that I thought, you know, I didn't even know what an asset was or how to acquire one, you know. So after reading that book, to say it opened my eyes was an understatement.

You know, I completely just lost it when I realized that, you know, you could create passive income. And, you know, passive income, obviously, you know, being money that's created from your investments, that passive income just reminded me of what I was already getting, you know. So that first step was taking that trailer, buying me a home and using the trailer as rental property. And I still use that,

I still have that trailer and still use it as rental property today. That's awesome. So, yeah, great. I want to talk about that first one then. I mean, like,

did you, like, I mean, how did you find tenants when you first started? How did you know what you were doing? Did you read books? Did you just guess and figure it out? Did you,

you know, how'd that first time go as a landlord? Yeah, I mean, I can remember one of the first properties that we, that we bought, my wife and I, Well, the first one I bought was in Michigan, and I'm in Louisiana, but I just heard that, you know, my friend was buying homes in Michigan for real cheap, you know, because you can because the audio, the auto industry crashed or whatnot.

And so he was getting houses as low as 500 bucks, you know, or $10,000, $15,000. So I was watching him kind of buy a lot of them. So I said, well, man, I want to do that. So the first thing I did was just get on the phone. and I just kind of basically grew the balls to buy this thing over the phone. You know, I saved up some cash. Over there, you had to buy the property cash because most of the offers come in cash and you just can't get financing from them.

A lot of the investors are coming in out of state. So I just, you know, grew up here and called up and did everything over the phone. I had the real estate agent, you know, have her sign at closing as power of attorney. and I bought that one cash. And then when I realized that money started coming in, I was kind of at a point where like, man, like I'm in my new house. You know, the trailers rent it out. And now this note that's coming, this passive income that's coming in

is basically paying half of my house note right now. And it was kind of getting over that fear and getting out of my comfort zone to buy that first one. Because as you know, everything that you're not comfortable with, it seems challenging. But then when you do one or two, you're like, this is nothing to me. So that's kind of where I'm at right now is challenging myself and my business partner and I challenging ourselves to get out of that comfort zone and do some bigger investments.

But to answer your question, you know, that I'm sorry, I'm kind of rambling right now. It's all right. I like to ramble on, man. One of the first properties that my wife and I bought in this state, we were very concerned. like is this going to rent? We were like, you know, we were parking our cars on the street that the house was on. We were talking to the neighbors around. We were sitting out there for hours and hours upon the day wondering should we put in an offer

because we thought it might have been in a bad neighborhood. And now, you know, today after I'm more comfortable doing this stuff, I don't think twice. The last thing I'm going to do is go sit on a street and see what cars drive by or see what kind of people are in the area. We just kind of run the numbers really quick and pull the trigger. And when I say run the numbers, it's this, you know, we don't really run a rate of return. We just run, is this thing going to cash flow? And is it going to cash flow after insurance and property taxes are paid? And so tell me about like, you're right, I mean, you say you don't necessarily any more look for, you know, the idea of the neighborhood and all that. Like, how bad of a neighborhood will you buy it, just out of curiosity?

Like, I mean, like, will you buy anything as long as you think it'll give a return in the long run? Like, how does that work for you? Well, where I kind of lucked up was is when I was searching for, you know, a tenant for one of my first properties, I called a property management company over to kind of get some advice on what it would rent for and just, you know, what kind of houses does he have down in the area? Because that's some good advice from someone, someone that's like scared about buying a house down in a neighborhood that they typically wouldn't rent uh live down themselves the easiest thing to do but what i've learned is call a property management company that's close to your in your town and

nine times out of ten they're probably going to manage some rentals down that street and so not only they're going to tell you what those houses are renting for they can pretty much kind of tell you you know you know what's what your experience is going to be like investing down that street so that's what I did. I called that. I called him over there and oddly enough, me and him just wind up having some similar mindsets and that guy ended up being my business partner today, which is, his name is Kenny Barnes, and he's been in real estate for, you know, over 20 years. So his company manages over 500 properties. So after I kind of realized that, met him that first day, I spent as much time as I could go into his office before we were partners just asking

questions because he's like, you know, a wealth book of knowledge on this stuff. So I'm super thankful to have run into someone that was, you know, willing to give some advice. That's great. Yeah. That's great. I was going to say two things I wanted to point out in there that I thought were just really good tips. One, your idea, you're talking about call up a property management company. I say that all the time to people. When they say, well, I don't really know, like, I don't know how much it'll rent for. I'm nervous about that. Like, you're 100% spot on there. Call up a property management company. They'll typically tell you anything you want to know. people like you are, like just build a relationship. I love that. And secondly, just the idea of

that kind of mentor, the guy who trained you and taught you, you don't, you didn't go, you know, pay $100,000 for somebody to sell you a book. You know, you went to somebody who was actually doing it, who was in the market, and you learned from that guy. And I think both those things are just awesome tips. Yeah, I mean, the biggest thing that I've learned is that if you find someone that's successful in real estate, you know, nine times out of 10, they're going to want to tell you their story, you know, because their story is going to be unique and everyone got there a different way. Everyone can skin a cat differently. So there's been a handful of guys that I get advice from that I consider mentors. And I always go to those guys. And those guys have no problem telling me how

they became successful. And that's what's great about this is that the knowledge that I get from them, I can pass down to guys that are also doing the same thing. That's great. And that's why we do the show. I mean, we want to get that knowledge and get it out to as many people as possible. And thank you, of course, for being on for being able to share it. So let's dig in a little. I am one. I think I would get thousands and thousands of emails if I did not go there. So I have to go there. I bash on a little town called Detroit because I think it's one of those places where the unsophistic unsophisticated investor should probably avoid for the most part. Due to a number of reasons.

But I don't know if you're, when you're in Michigan, you're investing in Detroit. But what was that like? Who's managing the properties? It sounds like early on it was good. You know, has it been a good experience for you? Have you had issues and problems? Tell us a little bit more about that property. And I don't know if you've picked up more in the area.

Yeah. We actually, it does pretty well. And one of the biggest reasons for investing out there and one of the biggest reasons why I kind of push a couple people that are getting into real estate there is because it's affordable for them. A lot of people, they can't afford the 20% down or are they looking to buy a property cash to get that full cash flow back? And Michigan's somewhere where you can go and do that. So I've actually pushed some guys to go there and get some of their first rentals there. And it was good for them because, you know, say you. buy a house $20,000 cash and you're getting $6.50 a month for it, well, you know, you can't really

put $20,000 cash in the bank and get $6.50 a month for it. So, you know, even if, even if that property is vacant for two or three months, what bank's going to give you, you know, $4,000 on $20,000? So that's kind of, I've sold it to it to a lot of friends. And I've kind of told them that it's worked out there for me and they've went over there and did the exact same thing. So the town that I invested in is Saginaw, Michigan. So it's, they call it the nasty. It's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's been a good experience. As far as a management company, most, most, most real estate agents, uh, in those areas, as soon as you buy the property, they'll offer to manage it as well. So I think there's more of that going on than actual management companies. I could be wrong. Don't quote me on that, but, um, the real estate agent I worked with and, a real estate agent my friend has worked with. That's kind of how it's worked out. As soon as they closed on the property, they started looking for a management company. And then the real estate agents like, well, I managed 10 or 20 of them. I can do it. And it's been a pretty, all in all,

pretty positive experience. You know, the only thing that we kind of run into is the property taxes are a little bit high with the winter and with the winter property taxes, I guess, because of the street cleaning of the snow and stuff. Oh, interesting. Gotcha. So I mean, at the end of the day, obviously $600,000 to 20Ks, somewhere around high 20s, low 30% ROI, if you're paying cash. Am I doing the math right, Brandon? I don't know. I lost you. It's a, you know, decent return as long as the properties are, you know, are maintained.

Do these properties that you're buying, are they needing fix-up, or are they good to go from the beginning? It all depends. I mean, in Michigan, that particular property, you can spend 20 to 25,000 in Michigan and get something pretty much ready to rent. You can get something for 10,000 sometimes and just put a little bit of work in it and have it ready to rent. We have kind of a different business model that we're doing over here. Right now, we've kind of switched over to not using any of our own liquid cash. We have a great relationship with the bank.

And we can talk about that in a little bit if you want. building these relationships and building a team. But over here now we're kind of buying properties that are a little bit distressed and need renovation. And then, you know, we're buying them cash with a line of credit and then going back and putting those properties on permanent financing and then taking the money and then putting it back on our line of credit. And then our line of credit's paid back down and then just keep reusing that line in a

creative financing way. That way, that way we're never using our own. quit anymore. Yeah, I love that strategy. I call that the Burr strategy because it's the buy, rehab, rent, refinance, repeat. And you just, you can recycle that money over and over and over, you know, as long as you can get that refinance. You can just be doing it. And then if you're doing your line, you know, if you're using your line correctly, nine times out of 10, you know, the bank is going to then, you know, hopefully up your line and you can keep building that relationship to where, you know, your $50,000 line will turn into a $200,000 line or $500,000.

line. It just all depends on your loyalty to that bank and the relationship you have with them. So how would you recommend somebody who's new start doing that, where they get into Burr, as Brandon calls it, but they start building out that line of credit and can start to utilize that, fix, rehab, sell it, get out, refinance. Yeah, I mean, there's a ton of different ways to do it. Obviously, the way a lot of people are doing these things, as you know, is just putting 20% down and what's typically needed for an investment property. But, you know, I had a good friend of mine and his wife, Tiger and Rach, you know, they kind of wanted to do the line of credit method and finance 100% of this thing

and then go back and put it on permanent finance. And so they didn't have a big relationship with the bank, but we kind of brought them in there, kind of vouched for them. and told the bank that, look, these guys know what they're doing. They already have a couple rentals. You know, we suggest that you start working with these guys because one day they're going to be doing a lot of stuff. So our advice is work with them because they're kind of on the same path and mind frame that we have and mindset that we have.

So that bank started them off with the $50,000 line of credit. And so it was kind of a test or a challenge. Like, let's see if they can do it with $50,000. know. And so they're, they, they just got the line. It was 50,000. They found a house for 36. They bought it cash out of the line. And then they had, what is that left to, to renovate the house out of 36? 14. They have 14,000. They're just about done with the house right now. And so they'll have around around 50 in it or so and it'll probably appraised for for 70. So the it's proven to work with just a $50,000 line. So and you know, some people think maybe I can't get maybe I can't get that line. Maybe I can't

maybe I can't go to a bank and they're going to loan me 80% of this property. Well, you got to kind of treat these banks what we've learned. They're just like a retail store. You know, you go in one if they tell you know, just walk into the next one and ask you. the next one. And that's kind of what we did, you know, when we first started is we'd go to a bank and we'd show them our portfolio, we'd show them our financial statement. And if they weren't impressed, we'd go to the next bank. And we'd make sure to tell every bank that, you know, we are in this for the long haul. We're trying to work with someone that understands that we're going to be doing this for a long time and that we're going to be doing this aggressively.

So if you don't want to work with us, we are going to go down the street and we're going to find someone else to work with us. So in a way, we weren't really being cocky about it, but we were kind of just being truthful. So we landed on a local bank here that's just been really good for us. And now when stuff gets pushed to the board, when our loans gets pushed up there, you know, they know that maybe we're not the biggest investors in the area, but they do know that, man, these guys are going to come up and they are investing aggressively. And we do want to keep working with them because we believe that they're going to be the, you know, the future of this town as far as real estate. Wow. I love that. I mean, I don't know why I've never in 10 years of being

in this game. I've never even heard that idea of like necessarily, I mean, I'm just thinking like the idea of getting a line of credit, just like a business line of credit, a small one, and then doing the Burr strategy, and then raising that limit over time, because banks want to lend their money out and they want to build the relationships. I don't know. I just think that's a fantastic idea, and I never tried to do that. I mean, I always think in terms of like home equity line of credit, but you're actually talking about like a business line of credit. Is that right? We're talking about an unsecured line of credit. So obviously we've, you know, in the beginning, if we had a property paid for cash, you know, we would go and get a line of credit.

and use that property for collateral. So they could take that house if we didn't pay the bills. But our main goal was over the past couple of years to build a relationship good enough with these banks to where we get something unsecured so we don't have to put up a property for collateral. So when we finally did get that first line of credit, they started us off with $100,000.

And what's really cool we did with the first time we used it, it worked out really nice. We took the line. We found two houses that were that were 17,000 apiece. We bought both of those houses at the same time on the line. We put about 20, 25 or so in each property. And so what's that? We had two apiece is it? Yeah, we had maybe 42 to 50 in each property. So we had our line pretty much all the way used up. But then both of the properties appraised for around 80, 85 a piece. So then when we went to closing to reclose on the properties, because you have to reclose on the property a second time, because you buy it first with the cash. And then when you put it back on permanent finance

and you have to reclose, well, when we reclosed on the property, they actually cut us a check for $30,000 because of the equity that we had in the property. So it was up to us whether we wanted to take that $30,000 and put it back on the mortgage or take that $30,000 and do something else with it. So we took the $30,000 and went and bought a house cash with it. So essentially we feel like we got three houses for free, because we didn't put down any money. You know, I've got a question on that.

So on the unsecured side, do you think how much of you being able to get an unsecured note do you think was based on the portfolio, based on the success? And, I mean, you know, truth be told, you are obviously somebody of consequence. in society, right? So, you know, how much of that had to do with you being who you are? Could, you know, could Joe Schmo go and, you know, start to get his portfolio to kind of where you were at and then start and get that unsecured line? Or do you think it might be a little tougher? You know what? I had heard stories of, I had a friend in mine in Iowa that was trying to get a $100,000 unsecured line. And he went to a couple banks. They told him, no, no,

know and then he went to kind of a little, you know, local, local bank and told him he was using that unsecured line for his business, which is a mail order company. And finally, he landed on that bank that gave him the $100 grand. And I don't think his, I don't think his finances were super crazy. His financial statement was super crazy. I don't think he had a big portfolio. And it's kind of the same thing with my friend's Tiger and Rach. They have properties and stuff, but they didn't even have a working relationship with that bank. But all it took was us going in there kind of vouching for them. And just like that, in a snap of a finger, two weeks later, they had an unsecured line.

So I think these days banks just aren't used to people walking in and asking for that. Maybe 10, 15 years ago, to my knowledge, that was maybe a little bit more common. but banks have kind of backed off of that, I think, and we've just kind of, you know, went in and know that it's a possibility and kind of push for it. So, you know, to somebody who's thinking about doing it, just get out there, shop, you know, definitely the smaller banks are, and we've learned that over the 130 plus shows and all the success stories we've had, you know, community banks, smaller local banks, definitely are more open and easier typically to work with in terms of getting these kinds of things.

So don't necessarily start at the big guys and look local, look at the smaller banks, and you'll probably have more success. Yeah, of course. And then, you know, there's always a way to make it happen, you know. Yeah. I mean, there's always a way to make it happen. You know, a lot of, in my opinion, a lot of unsuccessful people think that, you know, there's only one way to make it happen. And if I can't get it that way, I'm just, if I can't, if I can't get it, then I'm just going to give up.

Well, there's always a way to get a loan, you know, I mean, if you have to, you know, put a little side account to the side and start and start saving a little bit for a 20% down payment, I think it's possible, you know, for anyone to do that. because, you know, there was a point in my, you know, financial, I guess, you know, my financial path of where I'm at right now is I didn't really know even how to manage my money correctly, you know, and I think a lot of people might fall under that category. But, and I did too. You know, there was a point to where I didn't even realize that I needed two bank accounts. You know, there was a point where I just had one bank account. And now I realize the more bank accounts I have, the more money I have. Because the more I manage my money, the more money I have to manage. There you go. And the second that I realized that, it kind of changed the whole game for me. And I'm talking even like, it's down to now to where I give every dollar a purpose.

You know, if a $100 check comes in, I'll just say $100. Sometimes I'll split that $100 check and I'll put $25 in the tax account. I'll put $25 in the investment account. I'll put $25 in the savings, you know. And I've learned that over the years. The more I manage my money, the more I have more to manage. And that's the biggest thing is you come across people that want to invest in real estate and the first thing they say is, I can't.

I can't afford it. Well, the moment you say you can't is the moment you've kind of created your own destiny and you can't. But the moment you say I'm going to figure it out, then you can find a plan and get it done. Yeah, for sure. I love that. And that's pretty much what the richest man in Babylon was all about. It's a pretty cool book. You know, pretty much take your money at your market, put it away. And, you know, if you can't or don't want to do creative methods for acquiring property, you know, start that way. Which is funny because this morning I saw a piece of news. in the San Diego Union Tribune about San Diego.

The median price home there is up to $589,000 in San Diego. And they said the average household earning $89,000, saving 10% of their income would have to say for 18 years to get a down payment for a house in San Diego. Those numbers are crazy. And then I think about where you're at. And I'm like, oh, man, you know, you want to start investing. look outside the box if you have to.

You know, typically we like to say, you know, look within an hour or two of where you are and pretty much anywhere in the country, you could find property that's affordable within an hour of two of where you are. But I want to dig in on the mindset more because I see you as kind of this philosophical guy and I love that.

And so, you know, people should put their money away, obviously. How does somebody who's, you know, I don't know. I mean, take a guy who just graduated high school, college or something, you know, they don't have much going on. They got their first job, but they see the picture, right? They see the light. They know real estate is a path, but they don't, they're stuck. They don't see any way to get there. What would you say to that guy? How would you guide him to kind of get the ball rolling? I would say, man, what I did and what worked for me is, you know, and one of the biggest mentors I have in this town, the guy owns like half of the town. He's like an older guy.

He owns a lot of commercial property around here. And he told me a long time ago and he still tells me today, the biggest thing in real estate is what you don't know. So if you're that guy, the guy that just got out of high school, go find someone that does know about it in your town and go talk to them. You know, you're not born with this type of knowledge. So go find someone that's done it before. And like I said, nine times out of ten, they're going to sit down with you and tell you how they did it or how to get started. And they're going to see something. If they're going to see something in that person's eyes that they want something more for themselves.

So nine times out of ten, they're really going to want to help that person. And, you know, it's happened to me a couple times where I've had some younger guys come to me and they've said, I want to get started in this. you know, how did you get going? And I went and sat down at a coffee shop with a couple of them. And, you know, there was a younger couple. The kid shoots, he shoots photos for a living. And they grew up here, but now they're living in Nashville. And they sat down with me and they brought a pen and paper and I said, look, I want to start off by saying, I don't know everything. I just know what I've done. And I'm learning every day. And I'll tell you everything I know start to finish. We set at the coffee shop for about two hours, and that was like less than a year ago,

and now they have two properties in Nashville where they live. And they took the knowledge that I gave them. They probably had to revise it a little bit because they were in a different market, but it was more about them stepping out of their comfort zone and knowing that it was possible. And I think just sitting down with someone that's done it before, it makes it all that much more possible, you know. You said that earlier you said something about the idea of, you know, things seem overwhelming sometimes, especially buying rental properties. But now for you, it's just like, oh, I'm going to go buy it. And I was thinking that the other day in the car when, you know, I mentioned that on a podcast a few weeks ago, I was making an offer. And like, I wasn't even thinking about it. Like, while driving, I was illegally texting and making an offer. And I was like, like, just amazed at how easy it seems now. And so other people, they're sitting there for a year, scared to death about making an offer. And so I think the solution you just said about, about. just hang around with people who that is easy, it just becomes easier for you. It just becomes so much more simple. Yeah, and I hate to say it, but even, you know, there was a time of my life where

I didn't start cutting people off that didn't have the mindset that I had, but there are a lot of people that you can surround yourself with that don't want more for themselves. And sometimes that can bring you down. Or you can choose to be around people that want more for themselves. and you'll probably find that, you know, you're going to stay more motivated, you know. Like, you know, I read in that book and I still say it today, you know, if you want to fly with the eagles, you know, why are you swimming with the ducks? And I read that and I'm like, man, there's a lot of ducks I'm kind of walking around with it. I kind of want to be around the eagles. So now if, you know, I do surround myself with those positive people that believe that they can do anything.

And I surround myself with people that want more. Even if they don't have what they want yet, they want it and they believe that they can have it. And that always motivates me as well. That's huge, man. That's huge. And I've been through that myself where, you know, I saw the people around me kind of bringing me down a little bit and was like, oh, you know, I want people who are ambitious. I want people who are striving for success. I want people who are goal oriented.

And, you know, once you change your mindset, once you change the people that you surround yourself with, it's amazing. it's literally just being around successful people helps you breed success. And that's absolutely phenomenal. I want to talk about your portfolio a little bit. And I don't know how open you are. And you know, you don't have to tell us anything if you don't want to. But I'm just curious, what kinds of property are you buying? It seems like single family houses. Have you expanded from that to multifamilies? Have you done any commercial deals? Tell us a little bit about your portfolio. Yeah, my wife and I started off with single family homes, you know, because that's what we felt comfortable with. And like I said, we felt comfortable with it. So we were just kind of buying one after another.

We were doing some cash in the beginning. And now we've obviously kind of smartened up a little bit and realized that we don't want to use their own money for pretty much anything if we don't have to. When I met my business partner, he had, you know, like I said, Kenny Barnes, he had, he manages 500 properties. So he's really in the hen house and knows a lot. He's had a lot of opportunities to see, you know, all these owners make mistakes in 20 years. So he kind of knows what not to do. So after partnering up with him, I felt a little bit more comfortable about going into multi-unit stuff. So we've done stuff as big as eight plexes and four plexes. And just because that's kind of what me and him are comfortable with right now.

right now we're kind of sitting down and talking weekly monthly about what are our next steps because right now an apeflex is it's comfortable for us you know we we do want to branch off and start doing something bigger and to do that you just got to grow a pair and get in there and do it figure out a way to to use that line or to use that extra liquid that you have to jump into that to that bigger project. And that's probably what our next steps are going to be. But yeah, we have some, we have some, you know, some duplexes, some four plexes, some eight plexes, and then obviously a handful of a single family homes.

Right on. I think we're going to title this show, Get Out There and Grow a Pair. Yeah. And I never say that. I never say that. But I don't know why I'm saying. I love it. I love it.

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slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. You got Kenny Barnes, your partner. This guy's been around. He's been doing all these great things. And, you know, there's you. So how do you guys work the partnership? Who does what?

Since you're not using your own money, what do you bring to the table? What does he bring to the table? How do you split everything? I don't know, again, how much you're willing to share, but would love to hear more about that. Yeah, it was cool because, you know, at first he just started off managing my property, you know. And when I realized how much knowledge he knew, I started just going in weekly and sitting down in his office. He would schedule, he's very busy managing 500 properties, but he would always schedule an hour for me a week to just sit down and for me to ask questions. And I would just, I would just drill them with a pen and a paper.

I didn't have many rental properties. I just wanted to know more, more and more. So it went from me going into his office to ask questions. to him letting me ride around with him and talk to tenants and talk to owners and go to the bank and meet with banks. And then one day we were just kind of riding around and we pulled over at a vacant property and he said, man, you know, like I really like your mindset, you know, and I really like that you're willing to learn and I really like that you want more for yourself and that the sky's the limit for you and you realize that. He said, I feel like we should partner up and we should,

I've thought about it. He said, I've had a lot of partners in the past. And he said to himself, I would never get in another partnership situation because he has a lot of them. But he said, I just feel something different about you. And if you're comfortable with it, I would, I would want to enter into like a 50-50 partnership. So since then, that was in like 2012. we've just been on fire. And it's great because he works, you know, he owns the property management company, so he's there every day.

So the times that I'm not traveling and riding, I can pretty much go up there, jump in the truck with them, and, you know, ride around, meet tenants, meet owners, and continue this learning streak. So it's been a real, it's been the biggest blessing ever. for me because not only are we acquiring properties because of him we're acquiring properties that aren't really for sale you know we kind of have the inside scoop we're kind of in the henhouse is what

he calls it because we kind of know that this owner might be a little bit frustrated with this property he's got 50 of them and he's 70 years old and he just wants to dump a couple and he doesn't want to spend money on this and that and the other so we know that we can kind of come in and low ball him with an offer and acquire the asset. And so that's kind of been our business model over the past couple years that's just kind of having that inside knowledge. Now, as far as how we run the day to day and what our different responsibilities are, since he's kind of tied down in his company of managing those properties so much and I kind of have a lot of free time because I ride a bike for a living, I'm kind of the one sitting here just writing motivational notes that go to his email,

you know, and what is going to be our next steps? And what are we going to talk about on that Wednesday meeting? We have weekly meetings on Wednesday. And those meetings consist of, you know, what are we doing with this project we just bought? What are we going to do that we just got this line up? How are we going to get from being where we're at right now? to go into the next level, you know, is always our, is always on our goal list of going just from being guys that invest in low-income rentals and decent rentals and multi-complexes to how do we get

to the point to where we really want to be at, which is, you know, hotels, gas stations, 100 plexes. And we know that that's in our, in our future. We just, we're on the path to getting there. And that's what those meetings are about. That's great, man. That's great. And the idea of, you know, it works out really well having a property manager who has that inside scoop on the tired landlords. I mean, I've always thought of that. Like, hey, you know, the greatest way to ever find properties before they get on the market is to be a property manager because you know who's kind of getting fed up. You know who's just done or you know who's getting to the point in their careers where, you know, they've made it. all the money they want, you know, they want to sell out and kind of move on and do something else. So that's a great idea. I wanted really, really quickly to also mention, you know, you had talked about getting in the truck with him and driving around with him, the fact that he took you to the bank, the fact that he let you just do everything. That is unbelievable.

And at the end of the day, you know, I guess what I want to put out there to those folks who are listening who are experienced, this is goal. You know, we've got this guy, Terry here, who's, who's like successful, probably would have been successful on his own, but, you know, obviously accelerated because of the mentorship of this guy that he's working with. And so I just really want to press upon the experienced investors that are listening. You know, if you've got these young guys, whether it's on bigger pockets on the forums, asking questions, or just in your town, somebody local asking you, you know, to help out. help them out because you probably want to gotten where you are without somebody else helping you. Step it up, help somebody out, take him around. You know, don't take him to the bank the first time you hang out with him.

But that's so cool. I mean, that is literally gold being able to walk into a bank and seeing how he presents himself, going to properties and seeing how he deals with tenants. That is unbelievable. I love that he did that. And I just want more experienced folks to help other people to do it. Yeah, there's another guy. out here that I mentioned.

And this guy's, he's kind of on another level. He's kind of like a guy that everyone talks about that we kind of, you know, aspire to be at his level one day and hopefully we will be. Well, I met this guy. He's a little bit older, been in the game for a long time and does a lot of commercial real estate. I was just riding my bike out in the parking lot one day that he owns the parking lot. And he stopped out there and just told me, you know, that I had to leave.

and I had to pull up my pants, you know, and because I'm just, I kind of look like a hudelum. I'm out there practicing for like the world championships in Germany or something. And at the time, that was my spot that I had to ride. So, you know, I kind of copped an attitude a little bit. You know, I have a tattoo on my stomach. I really look like a thug without my shirt off. And, you know, I copped an attitude really quick and said, you know, you can't, you can't kick me out of here. I said, you do not own this property. And he was really quick to say, I do own this property. He said, I own a lot of property, you know, in this town. And when he said that, I said, oh, I know who you are, you know, and the guy's name is Ed Hoover. And he's kind of

well known around this small town for owning a lot of property. Well, you know, he said, if you want to ride here, and this is really what you do for a living, come in my office, and I'll write you something out saying you can ride your bike here, you know, and that way, you know, I'm not liable if you get hurt. So I was at his office at 7 o'clock the next morning. He had his secretary sign me up something. I still keep that in my car. I still ride out in that parking lot. And I developed a relationship with him over the years where I also got a lot of advice from him to where it's really helped even Kenny and I out because he's on the board at that local bank. So now when our loans get pushed through, get pushed through at the bank,

you know, and all the guys are on the board looking if they should approve these loans or not, you know, you know, big ed's in there. And he's like, I know Terry, you know, he's the bike rider kid. He's doing good things. I believe in what those guys are doing. You know, let's push this loan through him. That's great. Inside connections, man, look at you. That's, so we talk about this thing. Everybody has their superpowers, right? anybody in real estate and pretty much anything becomes successful because we all have one or two things that we're amazing at and we have our advantage and and you know it's it seems like for you I mean not only is it your capacity to write a bike like a ballerina but it's that's a compliment that's not an insult man hey now but but but for you to you know I mean you took that one moment

with a guy that, you know, you guys started shit talking and suddenly, you know, now you have a relationship. This guy's got a mentor to you and he's on the board at the bank who's, you know, giving, getting your back. That's a really great skill to have the capacity to, you know, transform opinions and the capacity to really work with people and build relationships. Yeah. And I think there was a time when he, you know, after that day, he would stop out there and talked to me, and he's seen that, you know, at the time I drove a ratty car, and, you know, he knew I rode a bike for a living and I was traveling the world, but he also knew that, you know, I looked at him as a mentor and that any advice that he gave me, he knew that I was

taking it in and he could feel that. So he would stop out there and our conversations went from about what country I just came from to nothing about the bike at all. And it was just just me kind of asking them questions about, you know, how I get started or what should I do do with my liquid? Should I hold on to it? Should I get rid of it? And some of the things that he's said to me over the years have just really stood out, you know? And, you know, one time we were out there and I was thinking about paying my house off. And so I just ran it past him real quick because I was really big on being secure at the time. You know, I always had this fear in me, well, what when bike riding's over? Like, you know, what am I going to do? Like, even though I had

these rental properties, like, should I just save up a big lump sum and pay off my current mortgage? And I just ran it past them real quick. I had the money ready. You know, my wife and I was about to pay off the house. And I said, hey, I'm looking at paying my house off right now. And he said, for why? Why would you want to do that? I said, you know, to be secure. And he said, man, I got I got four, three stints in my heart. I don't know what he said. I don't want to quote him because he got mad at me for quoting him. Something I said, he said last time, but he said, you know, I got a couple stints in my heart.

And he said, you know, you got to live life now, you know, you can't worry about being secure. He said, you take that money and you keep doing what you're doing with it. You keep investing in rental property because you cannot build wealth with liquidity. And you cannot just hold on to that cash. You can't pay off your house right now because it's not going to be worth. It's not going to be worth what you paid for it in five years. It's just not. So keep doing what you're doing and you're going to be better off.

So I had to come home and explain to my wife that, hey, we're not going to pay off the house now. We're going to hold on to that money and keep investing in real estate. I'm really glad he gave me that piece of advice. And I've kind of held on to it, you know, because he's been really big on, you know, making sure that, you know, I keep liquid in the bank, but I don't need a ton of it, you know. But I can remember one time we were out there and he said, what's the difference between, you know, me and a lot of people that are driving around the street right now? And I said, what? He said, liquid cash.

You know, a lot of people just don't have liquid on hand. So if you have an opportunity to keep some, keep some. But you don't need that much. You take your other liquid and you invest it because that's where you're going to build wealth. And after he started talking to me about building wealth is when I got pretty serious about, you know, going to my financial statement and knowing where I was at. Because if you don't know where you're at, you really, in my opinion, you really can't push for your goal as far as, you know, where you want to be at financially. So the first time I worked up my financial statement, you know, my network sheet, it was crazy to me because I had no idea where I was at with the bills. with the loans that I had out there,

with the credit cards, with the medical bills, with the properties. I had no idea where I was at. So when I worked it all up, you know, and seeing where I was at, it was like,

I don't know if I was in the negative, but I was pretty close to it, you know, but then I became obsessed with building that net worth. You know, it was like, man,

I want to get this thing. I want to get this thing I want to be a millionaire. I'll just say it. I want to be a millionaire. I want to say that my net worth is at a million. And I'm happy to say that with investing in real estate, it was relatively easy to make those numbers grow because every time we brought a property, you know, not only the tenants were sticking money in the equity and that net worth sheet was changing every month, but nine times out of 10, we were buying a property that was worth 30,000 more than what we got it for. And it was also adding to that net worth sheet. So to say that I really stand by

that net worth sheet and I update that thing probably more than I should. But it's just kind of an obsession of mine because I know that that's what really matters. You know, the guys that are really wealthy out there, they're not talking about how much liquid they have in the bank. They're not talking about how much income they made that year. They're talking about what their net worth is. And that's what I think anyway. And that's kind of what I've done over the past couple of years. And it's great to always know where I'm at, you know, financially. That's great advice. Great advice. Yeah. Again, anybody listening, you know, if you're if you're not tracking that stuff, You don't know where you are.

You have no idea. I mean, really, you could have, you could have $500,000 in the bank or, you know, you can have a million dollars in the bank and you can work your numbers up and you can be broke, you know. You have so much debt behind you. So it's good to know that, to know kind of, you know, what loans you need to tweak down and you need to know areas you need to work on to build it up. Yeah. I love it. Well, cool. That's probably a good place to transition to our kind of next round of the show, which we call...

It's time for the fire round. The fire round, these questions come directly out of the Bigger Pockets Forum. So these are real users that are asking these questions and we're going to fire them at you. So number one, what steps should I take to acquire my first property, a duplex or triplex? Like, they want to buy a duplex or triplex. What steps should they take to buy that first one? I would say get with a real estate agent, but get with a real estate agent that deals and has sold investment property before. Because that was kind of one of our first mistakes in the beginning

is, you know, she was a good person. I'm still friends with her. But she wasn't really a real estate agent that sold investment property. She was just kind of, you know, just getting started. And we probably would have bought a different property if we would align our stuff. with a real estate agent that worked with investors than just, you know, a normal person looking for a house. So that would be my advice. Get with a real estate agent that kind of knows what they're doing, has been in the game for a while, and that knows investment property. Yeah, good advice. And one just tip that people who are listening or watching this on YouTube can check out BiggerPockets.com slash meet M-E-E-E-T. You can go there and you can type in your zip code

and you can find people in your area. And you can start. them by like if they're an agent or if they're an investor, if they're a wholesaler, whatever. So, you know, if I wanted an agent friendly or investor-friendly agent in, you know, wherever, I could go and look for them there. So kind of cool. So check that out, biggerpockets.com slash meat, not the beef kind. All right. Next question. What can I do with $10,000? How can I invest it strategically? You go to Michigan and buy it. Oh, no. Go to Michigan and buy a property cash money.

Oh, boy. All right. I mean, no, my advice to that would be is if it's your first property, man, hold off for, hold off, you know, go buy a book or two. Read a little bit about money management and about resetting your financial blueprint that's in your brain. You know, the way you think about that $10,000 might not be the way you need to be thinking about it. You know, so maybe, you know, go give yourself some knowledge on changing the way you think about money. after you read that book, you might have a different plan for it. Yeah, that's great. That's great. You know, more and more, I agree with you. I wouldn't have disagreed with you a long time ago,

but I didn't really think about it, right? So, you know, over the years, I've talked to thousands and thousands of investors. And really, that's exactly what it is. This is a mindset. You have to have the mindset. If you don't have the mindset and you haphazardly just go out and do it, odds are you're probably going to fail. So you've got to be there. You've got to be mentally ready to do this. And you've got to be in a position to understand what's to come and where you need to be. So I love that, man.

Exactly. Yeah. Cool. Cool. Okay. So next question. We kind of covered this earlier, but I'm going to ask it again here. Maybe you can expand on it.

How would you suggest that I start saving my money for investing? Because a lot of people struggle with the saving things. So somebody asked that question. How do I even start saving? I'll tell you what I did, and my wife has done over the years that's really worked for us, is, you know, obviously most people have a checking and a savings account. My advice is to open up one more account and title it my investment account. You can go in online and your bank info, you can actually title it.

This is my investment account. And everything that goes in there, you know that that's not your savings. That's not your emergency fund. That's not your checking. Everything that goes in there is going to be for, you know, an investment property or some type of investment venture that you decide to do. And, you know, when I first tell people that, you know, when people has asked me that question before, their first initial saying is, well, you can do that because you have more money or I can't do that, you know, but you can't can because, you know, every time I think I'm going to spread myself more thin by opening up another

account, I have more money because I'm giving those dollars a purpose, you know, and to the point to where now I have an account that's just a play account to where it's an account to congratulate myself for how good I've done that year, you know, or, you know, open up, we started a separate account that was just like just for our new pool. We started another account that was just for our new house. But still our main account that we're most proud of because it's done the most damage is that account that's labeled investment account because we know that if a dollar goes in there, that dollar's going out to get spent on something that's going to bring money back in. I love that. Yeah. Fantastic. Last question on the fire round. Do you suggest living

the houses you flip while renovating or live away from the property. So, you know, kind of doing this live-in flip-in flip-it-up while you're there, flip it and move on to the next one, or just, you know, kind of flip a property that you're not staying in? Well, we've never flipped the property. Well, then that's a bad question. Yeah. Every time we run the numbers on flipping a property, we just can't wrap our head around it in this market because we, you You know, we barely have any vacancies. You know, our properties stay rented out. And we just kind of run the numbers of what we're going to make on this thing in three to five years.

And it just doesn't make sense for us. Fair enough. Yeah. Right on, man. Well, I'll supplement it with a different question then, which is, what's your best success tip for new investors? I would say what I said earlier is ask questions. Right on. ask questions and if you don't want to be a lot of people get afraid this is what I'll say

when you talk to people about rentals I know you guys know this firsthand the first thing that people say is they always want to say what they've heard from oh my aunt has rentals and they have problems with it my uncle has investment properties or my sister knows someone that has and they just have so many problems well if you listen to everyone else it's just land yet you know You really got to go out and do it for yourself. All these horror stories and stuff that people hear and if they come at me when we talk about investing, it's never been that stressful for me. So yeah, maybe those people that are investing in those properties that you're hearing those horror stories from, maybe those people don't have a property manager to take care of everything for them. Because if you have a good property manager, you shouldn't be doing anything.

You should just be sitting back and the only time, you know, your phone should ring is if they got your bank account info wrong, you know? And, you know, and that's if you have a good property manager, you know, but maybe a lot of these people that are going to tell you horror stories are people that we're trying to manage it themselves and that weren't good with running their own business. Because essentially, that's what investing and having rentals is. It's running your own business. And if that's not something that you're good at, you need to hand it over to someone else. Yeah. Yeah. It's so true. I mean, real estate is a business.

I mean, it's an investment, but it's just like running any other business, like the guy running subway and the guy running a flipping business or the guy running a rental business. And so, you know, I think that's terrific advice. I actually would love to hand over all my stuff to property management someday. But there are no property management companies in my town that are even halfway decent. So I'll get there. Start one. That's the next.

Yeah. So we kind of did. Yeah, we started our own. And then you get the inside scoop on the deals. And then we get the inside. After you said that today, Terry, I'm like, I really should be doing that. Like, you know, I manage all my own under my own property management company, but I really should like start managing for other people because of that very reason.

I love that. Yeah. When I'm telling you that Kenny has the inside scoops and he's in the henhouse, I mean, you know firsthand if this person's getting frustrated with their property. You know that they're at a point to where they're desperate to get it rented out. You know that they're at a point to where it's got a lot of renovations that it needs and that they don't want to fix it up. So if someone's got $5,000 worth of repairs and they don't want to fix it up, well, it's not going to get rented. So it's kind of up to them.

Either you fix this thing or you can sell it, but it's not going to get rented in the shape that it's in. And I can remember a couple years ago I was on an airplane flying to a bike convent. with a good friend of mine, Scott O'Brien. And it was probably like right when I started investing in rentals. And I was kind of telling them all these good deals we were getting. And he said, man, well, why? He goes, the only thing I don't understand, if these are such good deals, why are these owners getting rid of them?

And I was investing in real estate at the time. I had rentals and I could not give him an answer. I was kind of like, wait, say that again? It's a good question. He said, why are they selling off these rentals if they're good investments? Then why not just keep them? Well, I didn't have an answer then. And now, after being in the game a couple years, I know the exact answer to that question.

And the answer is, you know, a good owner keeps up with the property. And as things break, they fix it, you know. And a lot of the owners that are selling their stuff to us anyway have just, you know, let these properties get so bad that there will be on the point of like putting in a couple hundred dollars they could have been maintaining it the whole time but then when their tenant finally moves out not only they don't want to put the 10 the the five or 10 grand to get it fixed up they've also been taking all their cash flow and not putting it back in their business account to take care of that stuff so they're not prepared for it so you're catching basically owners that haven't prepared for the future which is the which is the

biggest mistake, you know. You set these things up as a business. So the money that comes in, you put it back in a business account to prepare for these things. You don't spend all that positive cash flow. And that's why they get rid of them because they're in a bind and they didn't do it smart. Yeah. Yeah. Terry, that's amazing. And it's true. I mean, straight up true. And that's why new investors who say, hey, I've got no money and I want to buy rental properties. And, you know, the gurus might say, hey, yeah, put it on your credit cards and go, you know. And, you know, listen, some people have gone and done that. I know, Brandon, you've bought a property of the credit card.

I'm not besmirching it. Repairs, repairs, repairs. But, like, you have to have a reserve. You have to have a reserve. You've got to have that cash in the bank. So when things happen, you could jump on it because putting it off is a death sentence. And you just nailed it, man. So really love that, love that, love that.

Yeah, like when I first started, when I first partnered up with Kenny, you know, I was really illiterate to that side of real estate because everything that I had bought up into that point was cash. So, of course, I was taking out a lot of the money and using it for living expenses. But when we first partnered up, I sat down with them and one of my first questions was, when are we going to be able to start taking money for ourselves, you know, like right away? And it really scared him because he's like, whoa, you know. like, you know, he had a lot of properties at the time and he, he wasn't even taking a salary out for himself. So now I know kind of why that scared him because, you know, even where we're at right now, we take a very small salary. And the reason we are even taking that salary out is to motivate us to up it every year. But we're very, we're very reasonable about it. You know, we know that

the only way we're going to give ourselves a raise out of the company account at the of the year is if we murdered it that year and that we have a lot more properties that we acquired that are bringing in more money. But, you know, if we didn't murder it that year, then our monthly salary is going to stay the same. Yeah. I like that. I like that, you know, kind of motivating you do to move forward. Very cool. Very cool. All right. Let's move on to the last segment of the show, which we call Lovingly our Famous for these questions we ask every single guest every single week. and we're going to throw them at you.

The first one is, and I know you said you're not a huge reader, but do you have a favorite real estate book? My favorite book of all the time, I got to go back to that secret to the millionaire of mine. Sure. Because it changed my life. You know, it really did in every form. It changed my life.

It wasn't necessarily just about real estate investing, but just the basic fundamentals of what an asset, was versus a liability. Look at you. I got the book. You kiss up. I've only actually read half of it, so now I'm going to have to read the other half.

You've never read that book? I read half of it and then I never finished it for some reason. Because you gave me grief about four-hour work week. And you've had millionaire mind sitting on your shelf for eight years and you haven't gotten past halfway. It's been like a year. Not only I'll finish it now. Not only I have that book, I buy extra copies of it.

And when I do come across people that are wanting to expand their mind a little bit, I'll give the book out. And I'm going to go through and highlight the parts that that kind of stuck out to me. That's cool. That's awesome. Yeah. Look at you pulling that book down. You got me.

All right, man. Next question. Business book. Do you read business books? You have any favorites in that realm? Not so much. Not so much. Well, this one's kind of the mix between the real estate and business.

It's kind of a mix between the two, you know. It's a mindset book. Yeah. For me right now and my career, it's managed between bike riding, managing the sponsors that I have, the traveling that comes along with it, and then when I'm here, just aggressively doing the real estate thing. So there's not too much book reading going on. But I need to get back on that because I know that that's where the knowledge lies is in those pages. Well, you know what?

Sure. What I've been doing lately a lot, because I know. never have time to read it all. I used to read a lot. I don't read it all anymore. So I started listening to audiobooks whenever I could. And so the last like two months, I've listened to like, I don't know, seven or eight different audiobooks and I've been kind of obsessing about that. Yeah, that's another reason why I like riding around with Kenny, because I can read something in the book and I'll forget it. But if I'm riding around with him and, you know, we meet an owner that made a mistake or we meet a tenant that has a problem or we learn something at the

bank that we didn't know before, those things are going to, I'm going to remember those things more than something that I read. So, you know, sometimes riding around in the truck for him for two hours, you know, I'm going to learn more than I would learn and reading two books because I'm going to remember it, you know? Yeah, right on. Right on. All right.

My last question in The Famous Four, what do you do for fun? I mean, the cool thing about you is I work for fun. I ride a bike. That's amazing. but outside of your fun career, which I am completely envious of, what do you do for fun? Man, I ride, you know. I just got to say it. I ride. That's great. Like I said, it was a childhood dream. I've been riding that bike since I was eight, nine years old. And I don't know how much research you did on Flatland, but it's kind of like an infinite art form. There's never really an end to what you can come up. with on that bike. There's tricks being invented all over the world right now. And I can go on YouTube and there's kids in South America and India and Japan and, you know, Korea, any country you can think of,

they're out there creating new tricks on these bikes. So it's always been a passion of mine. So obviously when I have time, it's what I do for a living, I'm out there on the bike and enjoying it. So, that's cool. Quick question. Yeah. we're all kids at heart. So what is it like being the guy that gets to have the career that was his childhood dream? I mean, that's kind of a special thing. I think everybody on this planet would love to have the opportunity to live the childhood dream and you do. So since we've got you, I just would love to ask you that.

It is something that I just never want to take for granted. So for me, taking it for granted would be not riding my bike when I get the chance. For me, taking it for granted would be not keeping those sponsors updated, you know, not doing it to the best of my ability. So, you know, I think that's why I've been successful at my career is that I knew how much work. I know how much work it took to get to this point. So I just never want to let it go. So I just don't want to take it for granted. I guess this is the best answer.

You know, I just, when I get out of bed every morning and to know that my job is to ride that bike, you know, nine times out of ten, I'm going to find some time in the day to get on that bike. Yeah. Yeah. That's amazing. That's amazing. Cool. Excellent. All right.

My final question of the famous four. What do you believe sets apart the successful investors from those who give up, fail, or never get started? I think that the successful investors or the successful people that get started, they take action, you know, and they jump right in. And everyone else, they kind of, they're in that procrastination mode to where they want to do it. They might think they can do it, but there's always something stopping them, you know. And a lot of guys that I know when they invested in that first property, it kind of broke down that wall and it broke down that barrier. So it's kind of all about just taking that step, taking that lead. I was talking to my friend Tiger last night on the phone and telling him that I was doing this podcast.

And we got into the subject of real estate a little bit and talking about when he bought his first rental, it was actually in a time where his job was stopped. I don't know if he got laid off or he quit or he got fired. I forgot the details on it. But basically at a time when, you know, most people would never think about buying a rental because their income just stopped, he took a chance and he bought a rental property. And, you know, now, you know, a couple of years down the road, he's in a much better place because he started taking those chances.

Yeah, that's cool. Fantastic. Hey, I'm going to add to the famous four. I saw my notes here. It says you've been on glee. Why were you on glee? I don't know, man. What's funny about that is I was on Glee in 2009, and it's like a residual plan where you get paid when it keeps playing.

So since 2000, I'm still getting payments in the mail from Glee. And we were complaining, a couple of the BMX athletes were complaining that day that our pay is not that high. You guys should give us some better pay. Well, we were on the Super Bowl episode of Glee. So they kind of pulled us to the side and they were like, you're good. You're not getting paid that much today, but you're going to be getting checks for a long time for this particular episode. And here we are six years later. And, you know, glee checks are showing up.

You know, sometimes they're 49 cents, but hey, you know, you know, you know me. I'll take that 49 cents and break it off. Break it up. I'll break it up and go put it in a couple of accounts. I used to be in the entertainment business, and my friends like to call those, are you residual unemployment? I'm not working a job today, but I'm getting paid from the residuals. That is one of the nice things about that business, for sure.

I have a friend that did like a Casper the Friendly Ghost movie type thing, like 20 years ago. Well, he showed up to do it, and they didn't even use them. They were like, oh, we don't need you for today, but you can just hang out. well 20 years later he's still getting the residual attack and he wasn't even in there he wasn't even in there you go i'm in the wrong industry i'm going to hollywood all right all right let's get out of here listen man it's it's it's been a absolute pleasure um let's let's give you a second here to plug where can people find you check you out watch your videos tell us tell us where to go uh you can go my instagram is uh at terry adams bmx uh my twitter is at terry adams bmx my twitter is at terry items bmx

my Snapchat, careful what you see on there. I get a little wild on there. That's as well at Terry Adams VMX. And my fan page on Facebook is what stays updated the most. And you can just type in Terry Adams fan page. And I'm the guy with the blue check. You know, there might be a couple of them,

but I'll have a check by mine that shows that it's verified. That's great, man. And your website is Terry Adams, BMX.com. That's it. That's it. And I'm going to take a selfie with you, you guys for my Snapchat right now. Hold on. I should do the same. Where's that phone? All right, Terry. Thanks again, man. I appreciate it. And you guys are awesome. And I look forward

to hearing this thing. Awesome. Hey, thank you very much. We'll see you around. All right. Thank you. All right, guys, that was Terry Adams. I'm sorry again that Brandon had to be a part of it for his insults up front. I don't know what you're talking about. Yeah. No idea. Now, that was great. Definitely enjoyed it and you know lots of lots of really great tips especially for newer investors there's some real gold in there so so listen up and take notes and get out and take some action guys otherwise thanks for listening we really appreciate it this is show 134 the bigger pockets podcast if you're listening to us on your phone on iTunes please jump on there and take a minute to leave us a rating and review and subscribe if you're not subscribing to the show subscribe

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