BiggerPockets Real Estate Podcast - 155: From Zero to 200+ Deals in Five Years with Sharad Mehta

Episode Date: December 31, 2015

Boom! Prepare to be blown away by this unbelievable interview with an investor who’s gone from nothing to more than 200 deals in just five years! You’ll learn how Sharad was able to find great deals, finance those deals, and build an investment portfolio that continues to grow no matter where lives or travels in the world. This show is one of the most humorous and most enlightening shows ever recorded on the BiggerPockets Podcast, so why are you still reading this? Listen to the show! In This Episode We Cover: The story behind the $5,000 scholarship cheque How Sharad’s love for saving money led him to buy his first property Why he values bigger goals in life The importance of focusing on the things that matter The details of his first investment property How he figured out what he wanted to do as real estate investor How to start out without any formal education in real estate Whether you should buy inexpensive properties or not What A, B, and C-properties are Why he invests in his area now The importance of talking to local people to get a feel for the market How he bought $65,000 worth of property with just $17,000 cash How Sharad uses his time to find and analyze deals A call simulation that’ll teach you how to achieve the bottom line How to keep a good relationship with an agent How many deals he has done Sharad’s views on turnkey properties The benefit of having 48 properties for rental free and clear How he keeps his real estate business as simple as possible Sharad’s role within his business How his business works and how he automates it How to trust your contractors How to get discounts from Home Depot And SO much more! Links from the Show From $80k in Credit Card Debt to 100+ Deals with Glenn and Amber Schworm Auction.com WaitButWhy Books Mentioned in this Show The Millionaire Real Estate Investor by Gary Keller The Book on Rental Property Investing by Brandon Turner The Book on Investing with No or Low Money Down by Brandon Turner Start Something That Matters by Blake Mycoskie Elon Musk: Biography of a Self-Made Visionary, Entrepreneur and Billionaire by B Storm Tweetable Topics: “You have to make some sacrifices to achieve bigger goals in life.” (Tweet This!) “If you are motivated enough, you will get anything done — no matter what.” (Tweet This!) “It all comes down to numbers. If the numbers make sense, I’ll buy it.” (Tweet This!) Connect with Sharad Sharad’s BiggerPockets Profile Sharad’s Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 155. If you have a bigger goal and you just make that your end goal, that this is what I got to do, everything else gets put on the sideline. 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 bigger Pockets.com, your home for real estate investing online.

What's going on, everybody? This is Josh Dorkin, host to the Bigger Pockets podcast here for the last show of 2015. Wow. That was a pretty epic intro. It was. Happy New Year, Josh. Oh, by the way, welcome to my co-host. Oh, thanks.

Mr. Brandon Turner. What's going on, Brandon? Not much. I'm looking forward to 2016. Yeah. Yeah. It's crazy. It's crazy.

I feel like it was like January, like a day ago. Well, I mean, like, for me, I'm still kind of wrapped up in the, hey, Y2K is coming. What's going to happen when your 2000 gets here? That's because you're old. We're at 2016. Like, this year, I'm like, I am, I'm going to be 40 this year. Oh, wow. I didn't realize that.

You were that old. This is. I remember my dad turned 40. That was sad. I remember when my. dad was 40 and I thought he was old. Yeah. So, yeah, this is...

I can't wait till that show. We're going to have fun there. Well, anyway, hey man, we have... We got a really fun show today. It was really fun. It's a great guy and... And super successful. Oh, yeah.

Crazy successful. And... This is like, set your mind to it, do it. And like, no bullshit, no excuses. Just like, if there's a will, there's a way. And anybody can be... successful if they if they try and and you know yeah this show is awesome so i'm super excited yeah well speaking of guys who are rocking it let's let's kind of get to today's yes today's quick tip guys is

this 2016 is here it's upon us if you have not yet set your goals for 2016 you are so far behind already get on there's a little guilt chip for you get it together so Seriously, sit down, bust out some paper and write down your goals. And I'm talking not just for real estate. Do this for your personal life. Do this for real estate. Do this for your other job. Do this or job, whatever it is that you do in life.

Set down your goals. Take some time. Take a few hours. Do it with your family. Do it solo. However it works for you. And plan out your year and decide what you're going to get done and how you're going to do it.

Because people who set their goals are far more successful than those who do not. People who plan tend to be far more successful. And if you're not, you're planning, you are behind the ball. Get it done. And that is today's quick tip. My wife and I have a tradition every year we go out to this little like place. It's like this beach town called Seabrook. It's out on the coast of Washington State.

And there's this little like burger joint there. And it has like these really, really good burgers and French fries, whatever. Anyway, our tradition for four years in a row now, I think. And we go out there every New Year's Eve and or was a New Year's Day. I got to remember now. You always tell me, like, oh, we sat down and did our goals for like 12 hours. Like until we have like really defined goals for the year. And it's actually like one of the things I look forward to most every year.

Like I just sitting down reviewing last year and going over next year. So we're recording us a couple weeks early. So we'll be doing that in the next couple weeks. Should be fun. Awesome. Awesome. Cool beans, man. Good deal.

Good deal. All right. Did you just say cool beans? Yeah. Wow. Wow. Yep. That just happened.

All right. All right. All right. A show before. You're more downhill. Yeah, yeah. All right. You ever head out on a trip?

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Let's do this. Today's guest is Sherrod Mehta. You know, I didn't ask him how to say his last name. Yeah, I didn't either. We're going to stop it. Sherrod. And Sherrod is hilarious. He's got a, he is funny as hell.

You got to listen to his stories. He's got some awesome, awesome stuff to share. He's got some amazing tips and definitely recommend tuning in. This is a guy who owns hundreds of proper. He's done hundreds of deals. Yeah, a couple. Over 200 and some deals, including owns 50 rentals free and clear. Free and clear.

Yeah. Amazing. And all. And five years. Five years. And he learned it all from somewhere that you guys probably is there. Yeah. And we didn't actually know that, which is the most part.

I'm like, oh, that's nice. Yeah, awesome. So let's get to this thing. Sherrod, welcome to the show, man. It's good to have you on board. Thank you, man. My pleasure. Yeah, this is actually our second attempt at this.

Yesterday we tried it, but Josh hadn't restarted his computer in two and a half years. So, you know, he had some tech issues. Apparently, it's all my fault. It's all my fault. Sherrod, let's just get to this man. I'm just cutting Brandon off straight up. And by the way, feel free to make fun of him throughout the show. Nobody likes making fun of me.

Like, the guests, they don't make fun of me. They make fun of you. Has that pattern happen in? I have not. I have not. You watch for it. Shrad, this is all about you. All right.

So let's hear your story because your story is really interesting. You came to the States, you know, when you were 18 years old from India, right? Right. Tell us how you got started. So I moved here when I was 18, moved here from India, came here for school. Can I tell you guys a funny story? No. Someone's related to the other said.

All right. Josh will plug in the ears. Earmuffs, Josh. So when I first moved there, So I'm filling out a college ethnicity form, okay? We don't do this stuff in India. So this is like, okay, I'll fill out name, you know, and then it goes to, you know, then it's asking me my ethnicity.

There was a question about, you know, I'm going down the list and I see Caucasian. I have no idea what it is. African-American. I'm like, I don't know what that is. And there was American Indian. And I'm like, well, I am in America. I'm from India. So I checked that box.

And then I'm going down, I went down the list further and I'm like, whoa, there's no American Chinese, no American Japanese. Man, these people must really love Indians. They have a special category for people who come from India. Man, this is awesome. Everybody else gets put in one pool, Asians and Indians get this special treatment. So I checked that box. A few weeks later, I get a $5,000 scholarship.

check. And I had no idea why. And I'm thinking to myself, man, it's about time. You know, these people recognize how smart I am. You know, I just so well on SATs. And, and I did not realize it for good nine months. I thought I was American Indian. And I transferred my school after a couple of semesters. And then I was filling out the same form at a different school. But this time, the college counselor was sitting next to me. And she was like, wait, you're American Indian. I'm like, duh. I'm familiar. I was like, what else do you think I am? Do I look like Chinese to you? So she corrected me and then, you know, and like, ah.

And then you sent the $5,000 back, of course, right? Sure, yes. Yes, that's exactly. I don't know how that was real estate related at all, but I love it. That's great. Probably my favorite Bigger Pockets podcast story so far. All right. We're off to a good start. So now the pressure is on me to keep it up. It is. It is.

But anyway, I moved there, you know, got my degree in accounting. after changing my major a couple of times. I went to school in New York, by the way. Where'd you go? Baruch College, City University. And then I moved to Chicago for my job. And at that time, my girlfriend then, my wife now, moved there. You know, she went to school in Chicago, DePaul University,

got a degree in accounting. So, you know, I started, I was working for an Abbott Lab pharmaceutical company. Then I, you know, change jobs to an accounting firm. I'd always been into, you know, saving money. So basically how I got started was around 2010 is when I bought my first property. My wife and I, we had always saved up money. We'd always lived on lower of the two income. Since she started working, that's what we've always done.

Live on lower of the two income. Save the higher one. Can I interrupt you real real quick? Yeah, of course. I just want to know, I mean, do you have any tips for people that are out there? Like, I mean, a lot of people struggle with saving money a lot, right? And you lived on one income, and you said you always done that. Right. Is that something that's in culturally that's like ingrained in you? Are you just really good at that?

I mean, why are Americans? We're not to do that. We're so bad at it like here. We're so bad at it. Maybe that's where, you know, me being American Indian comes in. No, but I think it was, it was always the fact that both my wife and I, we've had bigger goals in life. You know, we just don't want to work a corporate job, you know, save money, put it in mutual fund, retire. then just, you know, live off those savings. You know, we want to do something big with their life. Our goal is much, much larger than, you know, just going through life, working a corporate job.

So once you have a goal big enough and you, you know, you're motivated enough, it's not that hard. I mean, you know, my wife and I both luckily have made decent salaries. So living on even the lower of the two income, it wasn't that I was working at McDonald's, you know, shift manager and she was working a corporate job. You know, both of them had, both of us had decent corporate jobs. So it wasn't that big of a deal to live on the lower incomes. You know, I mean, at the same time, I don't want to give an impression that, you know,

we're living like poor people. I mean, you know, we've traveled extensively. We've actually been to five continents, you know, we've been to Africa, South America. So we've traveled a lot. But if you have, you know, at the same time, you have to make some sacrifices to achieve a bigger goal in life. And luckily, you know, my wife and I, we both on the same page when it comes to that. So it's not been, it's not been. that hard, you know, but if you have a bigger goal and you just make that your end goal,

that this is what I got to do, everything else gets put on the sideline. Can I dig in a little more on that? I mean, is it about foregoing the, quote, shiny objects in exchange for those things that, you know, like you take a guy like Brandon, right? He's an addict. The guy can't drive past, you know, one of those little green logos on a coffee shop. with the naked mermaid on the front. Yeah, the naked mermaid place.

Like, he can't go past the Starbucks without going there. He's addicted to that, right? So, you know, that's a very, that's how he chooses to use his money. And that's fine. You know, nothing wrong with that. You know, instead of doing that, buying a big, big TVs, you know, fancy clothes, things like that, it's, you know, this is what we care about. We're going to live on the essentials.

We don't, you know, we don't care about all this stuff. Let's break it down to its core. what do we actually need to get by with that we're happy and comfortable and then just kind of move on that is that it yeah exactly i mean i drive a 2010 toriya preas i can you know at this point in my life i can pretty much afford any car i want but two thousand you know to your god is yeah if i really wanted it yeah but come on go get it oh preas you know preas gets me from point A to point B and it's got navigation system and a backup camera. So, you know, it's, it's a I got the 2000. I got the 2007 Prius. I got as, you know, cool as a 2010. I got a 13 Prius C. It's like

literally like a golf cart with like 82 horsepower. Right. I know, yeah, I could walk faster than it. Yeah, I mean, I mean, stuff like, you know, I'm not, I'm not really into cars. I mean, Prius is actually my favorite. I mean, now I'm really into Tesla's. Yeah. So maybe next card that I get might probably might be Tesla. But, you know, too, you know, you know, to, you know, Territoprails does a job. I mean, I work from home, so I don't really need to drive anywhere. You know, I mean, this is the watch that I'm wearing. My in-laws gave me a gift six years ago.

Actually, today is my wedding anniversary, like I told you guys, I still wear the same watch. Happy anniversary. Oh, thank you. So, you know, I mean, it's the stuff that I don't really care about. It's just, it's, I don't even get excited about that stuff, you know. I like reading books. So my wife said, you know, she wants me to buy something. I said, hey, why don't you buy me a Kind of?

you know, with a backlight. I don't know what's that called. The paper white or something. Yeah, that's what I asked for Christmas too. Yeah, I like reading books in night, you know, and my wife, she goes to bed early and she's like, hey, can you shut out the light? I'm like, why don't you buy me in the white light, you know,

or whatever that's called? And she's like, yeah, I'll be happy to. Nice. So, you know, we haven't really talked about this much, and we haven't even gotten to your real estate, but, you know, thus far, I think this is the topic of frugality, right? I think it's the topic of not going to the extreme of frugality, but I think it's just being smart with your money and not spending it.

You know, I remember when I had some Section 8 properties, and it would always amaze me. I would walk in and, you know, occasionally go and, you know, hobnob with the tenants. And there's always the big screen, always the big screen, always the brand new shiny shoes and really, really nice clothes. But like, you know, the mattress, in many cases was on the floor. and, you know, there were bags of garbage in the back of the house.

I mean, it was just like the priorities of what you kind of focus on and what you put your importance to are what's going to drive you, right? So if you have that bigger goal of, hey, I want to do something. I want to accomplish, you know, this goal of early retirement or saving enough money to do whatever it is that you want to do, you just have to kind of break things down, right? I mean, we don't, at the end of the day, I think we all think that we need a ton of money. I remember when I was, you know, 22, 23 and I was living off of, you know, under 20 grand a year. And I was very comfortable.

I didn't need any more than that. And I was, you know, I was going out all the time. I was doing stuff. And so I think if we kind of, you know, once you have kids, things change, it gets harder. But I think that's kind of an important thing. And for all the people who might be listening or saying like, oh, my God, you know, I don't know it's such a struggle. Stop and break down your life and budget, right? I mean, isn't that the basis for what everything comes from? Yeah, exactly. I truly believe one thing that separates,

you know, a really successful person from somebody who's average is the motivation. It's, you know, if you're motivated enough, you will get anything done no matter what. You just have to have that motivation, you know, people can make, you know, sacrifice. If you really want some something badly enough, you'll do whatever you need to do to get it done. It just, you know, there's no other reason. I mean, I really, really wanted to be financially independent early in my age, you know, even though I look like 46 year, 47 year old like yesterday. You don't. You don't. Not at all. But, but I'm 33 and, you know, my wife and I, a couple of years ago, we were financially independent. We did not need to work for anybody, you know. It's just like we could

just sit at home, not do anything, but my wife will just get crazy, kill me. By the way, you don't look a day over, you know, like 38. 22. So let's talk about that rental property or the first property you bought anyway. I don't know if it was rental. Let's talk about that first property you bought. How did that come about? What happened there?

The first investment property. Sure. Let's go first investment property. The first investment property that I bought was a two unit. It's a two unit, a complex in Indiana. I lived in Chicago. in California, but I lived in Chicago back then, and I'd been interested in investing in rental properties.

You know, my wife and I would save them, saved up some money. And then, you know, I was reading a lot about real estate. And then around that time, you guys didn't, you know, pay me to say this, but, you know, I came across bigger pocket. No jokes, you know, I used to came across bigger pocket. If anybody goes to my profile, they can go back to 2010 beginning is when I became a member and I bought my first property in August 10, 2010. Nice.

And, you know, I paid cash for it, got it fixed up, bought the second one September, you know, like four weeks later. It was a three unit. The first one I paid $22,000 for, and I spent about $12,000, $13,000. And I rented both the units, and I was getting about $1,300 a month in rent for both of them combined. Wow. So that was a pretty good deal. You know, tenants were paying their utilities. And, I mean, I'll be honest, like, I learned all these things from bigger pockets.

taken any real estate goals. The only book that I'd read about was Millionaire Real Estate Investors. So that kind of gave me an idea of what I wanted to do. I didn't, you know, I didn't get excited about doing flips. I mean, I do some flips now, but back then I didn't, I didn't see myself as, you know, buying a property, selling it, you know, fixing it up and selling it just didn't appeal to me as much as buying something and fixing it up and renting it out. I just wanted to go after passive income. Can I talk to you about the the cheaper price So we've been talking a lot lately.

I mean, a couple weeks ago, we did a show with Ben Leibovic, Brian Burke, and Sirge Schucott. And we talked about the dangers of buying a property in a low-income area, like a $30,000 area. Not low-income, for inexpensive houses. Yeah, inexpensive houses. And so, like, which are, I mean, usually but not always found in lower-income areas. But then I did a video with one of the bonus videos that came with the book on rental property investing that we launched. You know, one of the videos I did was called The Truth About Buying $30,000 houses. So there's a lot of conversation about this.

And you went and bought one of those and you weren't even living there. Can you kind of tell, I mean, like, what are, are they great cash flowing properties today? Were you, did you, are they going up in value? I mean, kind of tell us about those early properties. What are they like today? Five years later, yeah. Yeah, five years later. Do you still recommend them?

Do you still buy them? Yeah, I mean, I buy, I still buy inexpensive properties, but I moved to a little bit better area. Okay. You know, I moved to, yeah, I mean, I moved to within the same county, just to different city. the area where I invests, it's a small county made up of, I don't know, 12, 15 cities. So I primarily, you know, focus on three main cities. So the first, you know, city where I bought the properties, I would call it a C area. For example, the first property that I bought, I paid $22,000 for it.

And I think I spent about 12, 13. So I was all in for about 35, you know, I did six months, three years later, I did a cash out refinance. It appraised for $45,000 or $50,000. I got all my money. out of it. The second property that I bought, I paid $44,000 for a three unit. It needed about $5,000 into it. You know, I put that in and I think I'm getting about $16, $1,700 a month in rent for it. And it appraised six months later for $55,000. So I was able to get majority of my money out. Okay.

Today, and they're still cash ring. I still own those properties. I'm still happy with them. They make me money every year. You know, I've not. I own enough properties where every now and then, you know, a few properties will give you an issue, but it's more off a volume thing than a particular neighborhood per se. I mean, some neighborhood personally are better, but, you know, then you take the risk of going into a lower income area. You know your risk is going to be higher because you're getting higher cash flow, but as long as you ready for that, you know, I won't say, you know, they've been, you know, walk in the park,

but, you know, they've had some ups and down. Would I go back and do the same thing again? Absolutely, without a doubt. Okay. I like hearing that other perspective, you know, because, like, you know, I'm always warning people, be careful with those properties because they can be very dangerous in that, like, you buy a property.

I mean, yours has a ton of cash flow, right? So imagine you bought that same property, you know, for 22,000, put 13,000 into it. You got 35 into it, and you rent it out for 450 bucks a month. Those are the numbers that I hear often, you know, and at the end of the day, those aren't going to cash flow very well. Your rent to $1,300 a month or $16. Like, those are solid numbers. Right.

And then, you know, I'll tell you how I, you know, how I did research on the area. You know, I would go drive by the area. I literally would call the police department, the local police department. I would talk to the sergeant and I would say, hey, I'm looking to buy this property. What do you guys think? You know, and I would literally ask him if it were your son or your daughter buying this property as an investment, would you recommend? And I would only buy if they said yes. Wow, that's a great tip.

Yeah, interesting. That's what I did. I mean, I had no idea. You know, when you ask somebody about, you know, I don't, when I'm calling the police department, I don't do that anymore, but when I first started out, I didn't ask them about the crime stats, you know, but I would just ask them, when I started asking, you know, the person I was talking to, when I would ask him, hey, would you recommend your son, your daughter, or somebody in your family to invest in this property?

And that's when they really think about it, you know, that's when they start, they look at it from a different, perspective. And I think that really helped me. They would tell me, yeah, you know, if the price were right, definitely. So that's all I need to know. If the price were right, you know, the area is fine. And it's been working out really good for me so far. That's cool. That's cool. Hey, really quick, you had talked about it being a C area for those people who don't know, what's an A, a B, C, really quickly. I mean, you know, A and D are the easiest to define. A would be a high-end area. Like, I would say, Like, for example, I lived in downtown Chicago before I moved here. I live in Calspet, California.

I would call where I was living in downtown Chicago in A area. Where I live now, Calcbat, you know, California, and A area, you know, screw districts are really good, you know. I mean, in my case, the average, you know, the starting home prices have been $500,000, $600,000. So those, you know, high-income areas. So that I would call a area where everybody wants to live essentially. D would be where nobody wants to live.

they only live because that's the only place they can live you know they don't have they don't make enough money to live in any other area there's a lot of gang activity that's what would be a d area to me i define b area as somewhere you know b and c would fall somewhere in between a and d um b would be would i live in that area if i had to if the answer is yes to me that's a b area you know if i could live there you know would i be concerned for my safety if the answer is no, yeah, that's a B area. Would I, my property manager is a female. So would I be comfortable if she's going after doctor,

collect the rent, or, you know, if I had to send my wife after doctor, collect the rent, would I feel comfortable about that? If the answer is yes, to me, that's a B area. Not my first choice of area to live in, but I would if I had to, you know, average food rating is four or five, and C would be, you know, somewhere between B and D, I guess. Okay. Fair enough. Cool.

So you talked about, you lived in Chicago, and these properties you bought, you said were Indiana. Yes. How did you- 30, 45 minutes outside of downtown Chicago. Oh, okay. I guess I'm not familiar with the area that much. They're close. Yeah, I was thinking like, you know, hours and hours away, but that's not too bad.

No, the best way to think of the area, I invest in Lake County, Indiana, okay? The best way to think of this area as a suburb of Chicago. Like, even the local news that they get in this part of Indiana is Chicago News. Like the news that we get in Chicago covers that part of Indiana. Okay. There's a local train that connects. I was going to say it's like the difference between your house and your town, Brandon. Thanks.

All right. I still have my office in Indiana. I fly back, you know, at least once a month. I fly to a Chicago airport either O'Hare or Midway and I go to Indiana. You know, sometimes I stay there. Sometimes I stay with my brother in Chicago and I commute every day. So how did you find that location? then? I mean, how did you determine that was the area you wanted to invest in?

I guess kind of that's where the research I did on bigger pockets came, you know, came handy because I wanted to be within 45 minutes to an hour drive from downtown Chicago. I could not go east because I would be in Lake Michigan. You could. I mean, there might be a real estate out there somewhere. West would be, not west would be too expensive. South wasn't safe enough. So I looked at southeast, Indiana, and that's kind of how, you know, I started looking at it. And I'm like, hey, let me see, you know, what's available out there.

I mean, at first, I didn't even realize how close Indiana was to Chicago. And I would call these agents and I would be like, hey, are you guys on the same time zone? Or are you guys an hour ahead? Because Indianapolis is there. So I just assumed the whole state of Indiana. So that's how I started looking at it. You know, I would go there, you know, after at work. you know, on the weekends, drive around, talk to people,

just kind of, you know, made myself familiar with the area, and that's how I got started. That's cool. So you talk about calling agents and talking to people. What people are you talking to? I would literally go to a local grocery store, you know, and just talk to people, you know, a corner convenience store, gas station,

called up, you know, police department, ask them about the neighborhood. Yeah, just like talk to local people. And I would drive around the neighborhood, you know, just I wanted to feel comfortable. And, you know, if I see a lot of graffiti on houses, you know, a lot of bordered up houses, I kind of stayed away from that area. Okay.

And then the agent part, I mean, was that your strategy for learning the area as well? Or was that your strategy for finding deals? Were these deals on market, off market? Initially, when I first started out, everything I bought was MLS deals. I mean, back then, 2010, 2011, nobody really had cash. And I was buying, you know, cash, banks, win lending. So that gave me a little bit of, you know, leg up on other people, you know, where I could just take a cash offer.

The first house that I bought was listed for $65,000. And I bought it for $22. Wow. I started out with $17.5 cash offer next, you know, one week closing. They came back and for, what I did initially was, again, this came from bigger pocket. you guys are not paying me for this, but maybe you should. But anyway, but, uh, wait, so really quick, that property was listed at 65k. Right. And you had the balls to offer $17,000. Why did you offer $17,000 on a $65,000 property? That's what I thought it was worth. Okay.

I had, you know, I had cash. I thought here's, you know, when I first started out, I would buy everything directly through listing agent. I, I did not have my own agent. I would call listing agent. I would call listing agents. This is a tip that I found from bigger pockets that you'll get some inside information and the selling agent would have a little bit extra motivation to get the deal done. Because on these houses,

they're not really making a lot of money. You know, if on a $2,000, $2,000 commission, if they have to split with another person, you know, they're making $1,000, $1,000, but now, if they can make $2,500, you know, you get a little bit more information, you know, about what's the real motivation, what's their bottom number,

And I said, hey, let's start at 17.5. Let's see what they come back. They came back at 30. I went back to 20. And they came 25. I said 22, take it or leave it. And they took it. That's great.

I like that tip a lot. Yeah, I love it. I love that tip you were saying about, you know, if you work with the selling agent, instead of having your own agent, they get that extra. Now, I mean, technically, legally, they're not supposed to have any added, you know, motivation or incentive. They're supposed to present everything equally and fairly and represent the seller. But, I mean, come on.

We all know that they really, I mean, like, it's double the income. So, of course, they're going to be a little quicker probably to import yours. They've got a stack of offers. They're probably going to put yours in first. You know, if the bank, I don't have to ask their opinion. But, you know, anyway, they're definitely going to work harder for you because you're using them. I think that's a great tip. You have to be, obviously, your agent that is not necessarily on your side.

Like, you know, fiduciary, is that the word? A doucheery. Yeah, they're not technically representing you at all. So you have to be careful. But it can be a good tip to get some good deals. I mean, another thing is. when I started out first, I had more time on my hand

than I had cash available. So I wanted to use my time as much, you know, get the highest rate of return on my time, you know, as much as possible. So I had enough time to deal with the listing. It does create a little bit of extra work for you. I don't deal with listing agents very often. Every now and then, if I know it's a really, really good deal,

I'll call the listing agent directly and say, hey, just I need to get this to you. Tell me what the number is. Put in an offer, you know. But it does create a, a little bit extra work on your part versus working with the buyer's agent. So I don't do that so much anymore, but when I first started out.

Hey, Sherrod, walk me through that conversation. You get on the phone, you call a listing agent. Say the property is listed a 50K. You think it's worth 30. How do you probe the agent in a way to get that information out of them? Or at least you know to find out what the bottom line is. Let's say if a house is listed for 50, and I think it's really worth 30.

I would say, okay, I'm going to put an offer for 25. What do you think? You know, is it going to go through? Am I in the ballpark? Am I way off? And if they say, no, you know, let's take it and see what the seller comes back with. You know, at least I know I'm somewhat in ballpark. If I go in with 25 where the seller is not going to take anything below 45,

they'll say, don't even worry about it. You know, you're just wasting your time. So you kind of get an idea if you're in the same ballpark or not. You put an offer and then, you know, see what the seller comes back at. And then you're kind of, you know, the selling agent will come back and say, you know, if you come up a couple more $1,000 or whatever, you know, I can make it happen with the seller. And then you kind of get an idea, you know, if you're within $1,000, $2,000. I love this tip. I think particularly for newer investors, I think that it's an outstanding strategy.

I mean, particularly because you probably don't have the knowledge at that point to really know if your numbers are in the exact ballpark, you know, you're still learning. trying to figure out your offers and having that person to be able to kind of flex with you with the knowledge that they've actually spoken to the seller. Right. That's really helpful. Right. I mean, even now, if my buyer's agent will bring me an offer, you know, bring me a listing that I know is really hard deal. I would call my buyer's agent, you know, my agent and say, hey, call the listing agent,

offer them $500,000 bonus that I'll pay directly to them, you know, just try to get an idea where we need to be on this number. Then sometimes it works, sometimes it doesn't. Interesting. I've done that too. Now that I have an agent that I work with a lot, I can't just go and call up a listing agent every time I want to, because then I'm hurting my relationship with my own buyer's agent that he's represented

me a lot. So what I do now a lot of times is I'll have my agent call the other agent. I'm like, hey, Jason, can you call up the agent and just feel them out for a $30,000 offer to see what they say? And then he knows the game. He'll call him up and, you know, they're buddy buddies because it's a small town. agents know each other. He'll get back to me and be like,

yeah, I think we're probably pretty good at that point. Right. So, yeah, it's a good way to get around that, even if you have an agent. Right. No, I agree. I mean, keeping a relationship with an agent, definitely important.

But my agent, you know, I think I do about 40, 50 deals with him every year. So if he doesn't get a commission on one deal, he understands, you know, if it's a flip deal, he's going to get it on the backhand. But if it's just a rental property, you know,

he's not, you know, he's not going to kill himself if he doesn't get to one deal. Awesome. How many deals have you done, 40, 50 years? a lot. So where are you at? 225, 250. So, and what's the composition

of that? What's buying holds versus flips? I would say over 20% buy and hold that I hold in my own portfolio and 95% of those are free and clear, no loan, nothing. Okay. And a big majority of them have

been wholesale to use. Okay. wholesale to an overseas company. Oh, interesting. Yeah. And then about 15-20 flips and maybe 15-20 turnkey. Okay. Wow. So you do quite a bit of different stuff with the real estate.

It's not just anymore, just you're going to buy those rentals. Now you're doing flips, wholesales, you're selling turnkey. I mean, if I, let's say if I won a $10 million jackpot today, if I would just completely stop wholesaling, flipping turnkey, I just go out and buy whatever I can with that money. Yeah. That's what I do. I mean, I do flip just to use that profit, flip, wholesale turnkey,

just to use that profit to go out and buy properties for myself. That's what I do. Can you talk about the wholesaling to the overseas company? I'm assuming you probably have relationships with, I should not assume anything. But yeah, what's the story there? With the whole set, it's actually, I got introduced to this company. The CFO of that company is cousin of one of my friends. So that's how I got connected.

And what they were doing at that point where they were buying and selling properties to local investors in Australia. Okay. That's how I got connected. And it wasn't, you know, it wasn't, okay, so I should, I should take it back. The wholesale deals are not per se wholesale. It was more like I was helping them buy properties in the area. And they were paying me profit out of each deal. So it was a minimum profit that I would get, you know, it was the greater or whatever, the fee or the profit.

on each deal. So it wasn't that I was buying a property for 10,000 or, you know, 30,000 and selling it to them for 35. Yeah. They were doing, they came with a lot of volume. They said, hey, we'll do 40, 50 deals a year. Just tell us, you know, how much you're going to charge per deal or, you know, based on the profit. Interesting. Hey, so really quickly, hundreds of deals, do you have a single criteria for your buy and holds and different criteria for, for other strategies that you do or is there just kind of a general criteria? I'd be curious, what are you shooting for? Are you going for, you know, the bread and butter three-twos? What exactly are you doing? For buy and hold, the area where I invest, there aren't many

three-twos. It's mostly two-bedroom one bat or three-bedroom one-back. And so that's what I go for. And even the properties that I'm selling, I buy them myself first, most of them, with my own cash and I only sell them, I only buy them if I'm comfortable holding them in my own portfolio. Okay. So that's my criteria. Would I want to hold it in my own portfolio if I, you know, had the money available? And if the answer is yes, that's the only reason.

Like, for example, I've only in turnkey, I've only sold my B properties. I still hold my C properties because I am more than comfortable, you know, with the ups and downs of a C property, but I don't want an out of state or overseas. investor to take that risk. Okay. Okay. And I think that's good because I think a lot of turnkey providers are selling properties C and D class properties to out-of-state areas or out-of-state investors. So I think that's cool. Hey, Shrod. So is that, I mean, is that the only thing, properties that you would want to hold? I mean, is there like a per door number or, you know, square footage? Do you have other

property criteria that you're looking at? Sure. I mean, like I say, you know, I buy everything cash, so I want my minimum cap rate should be about 15%. That's what I go for, you know, It should. Or in terms of like gross return for every $40 to $50,000, I want to make at least $1,000 a month in rent. That's it. That's just, I mean, everything I buy almost, I mean, now everything that I've been buying for the last couple of years has been a single family house. So I don't pay any utilities. I'm not responsible for loan maintenance cars or anything like that.

So basically, as long as I'm getting for every $40,000 to $50,000, depending on the neighborhood, if I'm getting a minimum $1,000,000. a month and rent, I'll go for it. Like, just, just becomes a no-brainer. Okay. So you mentioned that you own these rental properties. How many did you say you had? Over 50. Okay.

Do you have over 50 rental properties? Do you hold them all by, or all free and clear? I would say 48 of them. Wow. Okay. So, first of all, that's crazy. That's crazy. The last few years to have 48 properties free and clear.

That's amazing. A couple questions I want to hit. First of all, how did you do that? Like, meaning is it because you were, flipping and wholesaling, then buying the properties for cash. And then secondly, why do you do that? What's the purpose of not having mortgages on them? Sure. First of all, how I do that, like I said, it just comes back to living on the lower of the two income. I still, to this day, I still do that. You know, but now at this point, you know, real estate income is what I make from a real estate

is much higher in what my wife has made. You know, she's got a really nice job, you know, six-figure salary. So it's not like, you know, we're, you know, hurting for anything. But, you know, from real estate, you know, the income is much higher. So we're able to reinvest all the money we make from real estate into just buying more rental properties. So, you know, selling those, not selling, but, you know, working with that overseas company, Australian company, obviously that really helped because in last four or five years, I think they've done about 125 deals, 100 to 125 deals. So all that money just got reinvested into more properties for myself. Okay. All the money that I make from FIP just goes back into more properties.

And then why I do that is because it's, I don't want to deal with debt. You know, I am working on, I have other businesses that I do, you know, I'm working on a startup company. So I kind of want to keep my real estate business as simple as possible. I can, I, you know, I understand as well as anybody else. I mean, I have an accounting degree. I can go out, you know, I can leverage my properties, have two, 300 units. but I don't want to deal with that headache. I have more than enough properties.

I have even within real estate, I do turnkey, flips, wholesale. So I have more than enough income coming in where if it's working for me not having any debt on it, then why do it? Even when somebody goes out, gets debt on the property, the end goal is to pay it off. If I can just have it paid off to begin with, you know, why go get a loan on it? I love it. I love it. I love that you're, you know, there isn't one size fits all. I love that you say you have an accounting degree. You get that maybe leverage, maybe give you a higher return, maybe.

But this is working for you. It fits your plan, what you're trying to achieve in life. I love that. No, I mean, the properties that I'm buying, I can go out, I can leverage it, and I can get all my money out of it. But I don't want to deal with that. You know, I don't want to go through the lending process, you know, dealing with the lenders. Because, like I said, I'm working on a startup company, you know, my dad and I were thinking of starting, you know, my dad lives in Tanzania. So we're thinking of starting a business in Tanzania.

So for me, the most important thing for me is my time. You know, I completely, completely understand. I can get a much higher rate of return on my money, no doubt. You know, but it's my time. I need to use my time as efficiently as possible. I have to get the highest return on my time, you know, and I have to go where I get the highest return on my time. Let's talk about that.

Let's talk about the time. So, you know, in order to start a business in Tanzania, Tanzania, I can never say right. Yeah, Dar es Salaam. Yeah, exactly. There you go. Yeah, I've been there a couple of times. Yeah, nice. It's supposed to be nice.

Yes. Yes. You've got to do that. You've got, you know, you're, you've got a portfolio. You're acquiring 50 properties a year. That's a property a week. What is your role within your own business? So do you have a full-time property?

manager, are you doing management acquisition? Are you doing everything? How do you fall into your own business? No, I have a property manager. We actually have two. One property manager manages most of the deals that I did with the Australian company. And then I have another property manager. She's managing all my properties and the investors that I'm selling properties to return the business. So where my role fits in. So I moved to, actually I moved to California exactly four months ago today. Okay. Ever since I moved, I've done about

25 to 30 deals. So my business has actually become better in last four months since I moved here because I feel, you know, I use technology like crazy. FaceTime, Skype, WhatsApp, you know, you name

it every, I've made my contractor, every contractor get a smartphone. If they will not get a smartphone, I'm not working with them. So my contractors have upgraded to you know, iPhones and and Android's or whatever. They would literally call me from a house

and they'll tell me, hey, this is the issue. What do you want to do? Make a call right then and there. And then there, done. When I was in Indiana, I had an office that I would go there. I would go drive there, look at the problem,

make the same decision, and drive back. Yeah. I would base, whatever, half hour to an hour, just driving back and forward. And then with me, you know, even though I do all these deals,

I don't really care, you know, what plumbing somebody uses, what, you know, fixtures they use. We like now the houses that we do, every house looks the same same thing, same flooring, same furnace, same shingle windows. We don't even make the desert. We have a spreadsheet.

We buy everything from Home Depot more or less. So my guys go to Home Depot. Home Depot has a couple of my credit cards like my guys would go there. All we've told Home Depot, just make sure whoever comes there, you put the job name on the receipt. Don't forget that we have to put the job address on the receipt. So when my bookkeeper gets the information, he knows which property the receipt belongs to. Real quickly, I want to go real specific on this.

When you go to Home Depot and you're checking out, are you talking about when they ask that, is there a PO name? Or do you actually, you're talking about like writing on the receipt? No, no, no, like a Pio name. So I get all the receipts by email. Okay. So I just get all the receipts by email. My bookkeeper has an access to that email.

So he would just go there. And then we have Home Depot set up a back, you know, account also for us where we can log in and it has all the property information. Okay. So we can go in and see which property we bought the material for and that's it. And they have two credit cards on file and they just, they just call me and they say, hey, which card you want to put it on? And this is it.

You put on card one, card two. That's it. Do they have to call you? And I know we're getting really specific here, but I hope this helps other people. No, this is helping me. Yeah. So when I go to home, this is one of the biggest irritations of my business. I don't have a system down for this perfectly yet.

That's why I want to pick your brain. When my contractors go to Home Depot to go buy something, you know, right now they don't actually have a card. I don't give them a card. Right now, they have to do a phone call every time. So you're saying you opened up like a business card and then your contractors have access to that card. Is that what you're saying?

I mean, Home Depot has my card. Like Home Depot. Like, I mean, I have the cards. I don't even know where the cards are because I don't use them locally. The only time we use it at the Home Depot. So all they call me is, hey, which card you want to use? I just give them the last four digits.

have the cards on file. I just tell them the last four digits. And I mean, the contractor that I work with, I've been working with the same contractor. I trust them. I would not work with them if I did not trust them. Yeah. I trust them. If they need to buy anything, they would just call me and say, hey, can I buy this?

Use your discount. And, you know, you'll take it off my final payment. I'm like, yeah, don't worry about it. Just, you know, put it on a separate receipt. Just right here. And then instead of Pio name, Home Depot would put their name. So I know, you know, it's not for a job, but it's out of the final payment. Okay. And are these actually Home Depot credit cards?

Are these your own? Home Depot. Okay. I mean, I have, you know, I work with different investors. You know, I have two Home Depot accounts, two Home Depot cards, and I have a couple of debit cards on file, depending on, you know, which property or which account I'm paying out of. Okay. And then your book, like you said, your bookkeeper then gets it. I love that.

I mean, because I've never figured out a good strategy for this. And, you know, we go to Home Depot. It seems like at least once or twice a day. Right. My contractors are always there. And so, you know, it just becomes a mess. A lot of time we've tried things like taking photos of the receipt, but I like that idea and then giving the bookkeeper access to that and things that all.

I love that. I love that. I'm going to talk with my wife right after this and we're going to talk. And you talked about discount. So is Home Depot giving you a discount based on volume or what's that about? Volume. Yeah. Okay. I'm assuming that's through the pro desk, right?

To the pro desk, yeah. And they would match any price. Like if I go to them and say I'm getting this price, they would match it. Yeah, that's a quick tip right there. I mean, like, I think Sharad, Sherrod, you can go talk to the, The Home Depot Pro Desk or the lowest Pro Desk, those guys have so much more power to do cool things, like give discounts and promotions and give you free stuff.

I mean, like, I love working with the Pro Desk all the time. And yeah, if you're a landlord, if you're an investor, if you're a flipper, go get to know your Pro Desk. Yeah, like Home Depot, the guy at Prodesk, he would text me and say, I have, you know, this thing and say, like we buy it for our rental properties. We buy the Traffic Master allude flowing, the cherry floating, you know. So he called me a couple of weeks ago and said,

you know, I have the sale going on. If you buy 10 pallets of it, I'll give you, I mean, I think the regular price is $42, $45 a box, something like that. He said, if you buy 10 pallets, I'll give you for $28, $30. And I say, yeah, I'll sure buy it. You know, we'll just leave it there, leave it at the store. And then I'll pick it up. You know, my guys will come pick it up as they need it.

And then that's it, you know. And they let you actually have them hold the inventory for you? Yeah, I mean, we do buy a lot from them. We do buy a lot. And like for example, my guy at Home Depot, he would call me. He had, you know, they were doing a liquidation sale of very expensive vanities. Regular price would be four or five hundred bucks with, you know, grand I talked. He said, hey, I'm sending it for a hundred bucks each.

I said, buy three. I'll use it on one of my clip and they held it for three months. Wow. Wow. Yeah. That's awesome. I love that. I think that's fantastic.

Another thing we do, you know, I do understand my contractors, my property managers, you know, people at product. they really appreciate the business and I appreciate I mean I would take them out to lunch you know that's you know I'll take my contractors my property managers you know my the guys of pro-des you know when I started working with it I took the entire protest team out to lunch say let's go for lunch you know just sit down and see how you can help me and I can help you that's something like that makes a big difference that's the power of relationships yeah it's it's amazing it's the little things we you know on the episodes where we've

kind of dug in on financing and things like that. The guys who are crushing it on that front always talk about the same thing. Hey, you know, create those relationships. You know, take these guys for lunch, take care of them, be good to them. The banks, you name it. And now here, we hear the same thing, you know, whether it's, you know, the big vendors, even the big box stores, you know, sure, they're big giant corporate corporations, but, you know, you're dealing with the individuals at the company.

And so creating those relationships with those people. are we're going to make them remember you and want to take care of you. Can I tell a quick story about relationship? Only if it's as funny as the first story. It's not funny, but it was very profitable. But I tell you a funny story to begin with. The first property I ever bought before my investment property was a condominium, okay, that my wife and I lived in.

So going back to New York, when I first moved there, So I'm walking down You know, I was living in Brooklyn At Brighton Beach So I'm walking down the beach And I see all these buildings Have a signed condominium And I had no idea what it meant

You know, we call flats in India We don't know what condominium was So I was walking down the beach And I'm thinking, holy crap man This company condominium They are so freaking filthy They own every single building On the beach

On Prime Spot then I noticed some buildings in Manhattan, you know, downtown New York had signed condominium. And I'm thinking, man, if I graduate from college and if I can get a job with condominium, I'll be so happy that they own every single real, or most of the real estate buildings on prime spot. Every building on Brighton Beach had a signed condominium.

I'm like, man, how do they own? I've never heard of them. That's a start. But that's the company. It's even funnier that you were living in Brighton Beach. Yeah, that was an interesting experience. It's a very, it's a very, I don't know if it still is, but it used to be a very orthodox Jewish neighborhood.

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That's bill.com slash bigger pockets. But anyway, going back to the story about relationship, so most of the deals that we do, we work with one title company. And in some cases, I'd really appreciate the

business that I do with them. You know, for Fannie Mae or HUD deals, sometimes, you know, they would want to use their own title company. But we've had, in some cases, we've paid for the seller's closing card just to keep relationship with this title company. So that's how much we appreciate the business with them. I think we've done most of the deals that we do.

Everything that I'm selling has to be with that title company. That's just no exception about that. It has to be otherwise the deal is off. So I've been working with this title company. Again, it comes down to relationship management. I knew this title company, you know, every time they would help me out, with something, you know, the lady that I work with, I would go, you know, I'd go with a bottle of wine, you know, I would email her Amazon gift card or, you know, some gift card or something.

So last year, 2014, she calls me and she's like, hey, Sherrod, this lender wants to liquidate some deals and I think you should talk to him. I'm like, okay, you know, local bank. So I call this guy and he said, I'm selling 18 houses. Would you be interested? Said, hell yeah, I would take all 18 of them. Seven of them were in a D area. So I just, I called my agent and he said, hey, can I take them? I said, sure. I mean, in hindsight, I could have made 50,000 on those seven houses. But anyway, that's, you know, it is what it is. And my agent just bought me a $200 dinner. But so I gave, I gave those seven deals to my agent. And the other 11 deals, I brought zero money to the table. Out of those 11 deals, two were flips. And the other nine were rental properties. A buddy of

mine, he said, I take four. Okay. And then I said, okay, I take the other five. The profit. And then he said he was going to put all the money and I was going to pay him back in a year. So this was the deal closed on June 26, 2014. The money that I paid made from those two flips more than paid for the other four, five rental properties that I kept for myself. Just and this would have never ever happened if it were not for that relationship. And what had happened was the best. And what had happened was the bank that I bought the properties from. They had acquired another bank. So that's how they got in, you know, they had 18 properties in their inventory.

And after the deal closed, I sent a bottle of wine to the person I was dealing with at the bank. Now he just calls me directly anytime he has any property. He doesn't call anybody else. Like he just emailed me last week. He said, hey, I have this guy. He's looking to sell 18 houses. We, you know, we are the lenders.

and I'm calling you, would you want to buy this portfolio for $1.5, $1.8 million? I said, yeah, if the numbers make sense, I'll figure out to buy it. So now he put me in touch directly with the seller. That was just with the relationship. And now that's, I mean, it makes a huge, huge difference. Like even when, you know, I fly to Indiana once a month, the only reason I go there is to buy more property. That's it.

So when I go there, I make sure the title company that I'm working if I'm closing with them, you know, I'll just go take a, you know, a nice bottle of wine or, you know, email them a gift card, stuff like that, just, you know, sit down with my property managers, my contractors, and that makes huge, huge difference. My contractor, you know, two or three contractors that I work with, they appreciate the business and they tell me that, you know, you're helping me make money, you're helping provide food for our family, so we'll just do whatever you need to do to make money. Yeah. Moral of the story is get everybody drunk with bottles of wine.

Exactly. And send them an Amazon gift card leader. There you go. I love that. I remember back on the show we did with Glenn Schwarm back in the day, it was like one of the early episodes. He talked about how he sends his like title company and bankers and everybody like these brownies. Like brownies. And he said that those relationships just are so solid. So I've done a little bit of that. I haven't quite done as much as I should be doing. But I don't know. This is renewing my interest in that. All right. Before we go to the first, fire around. I want to ask you one last question is you're buying, you said you bought 30 some deals just since moving to California. Yeah, about 25.30. Okay, yes. I mean, that's crazy. Are you finding all those still on the MLS? Or do you guys have other ways of finding deals now? MLS and then the lender, he calls me every now and then, you know, he would have a deal here there. And then I buy a lot from share of sale. Okay. So you're buying like auction. Okay, interesting. A lot from auction, like three, four. We try to buy three for every month at auction. Wow. Are you actually having to go online?

Who goes? Yeah, that's where I go for. Oh, okay. So when you go there for Friday of every month, that's what I go for. Yeah. You're the second person or third maybe even in the last couple months here on the show that have been buying their deals from that. I really need to look more into that because I don't do a lot of that. So that's cool.

That's very cool. All right, awesome. Well, why don't we shift gears here over to the world famous Fire Round? It's time for the Fire Round. All right, the fire round. These questions come straight out of the bigger pockets forum. So let's fire them at you, Sherrod. Number one, should I pay $30,000 for a mentor program?

That was a question. It was trending today on the forum. Should I pay $30,000 for a mentor program? I would not. Why? What can a mentor teach you that you cannot learn online? I would not. I mean, I don't know, why.

If the mentor is giving some insider information, and that's a different story. But I can only, you know, I can only tell people what I did. I did not, you know, the only really real estate book that I read was Millionaire Real Estate Investor. That kind of gave me an idea what I wanted to do with my real estate strategy. Yeah. I've never taken any real estate course, none whatsoever.

Everything I learned was from bigger pocket. Everything, like everything real estate related. So why would I tell anybody to spend? $30,000 when you go buy a house. There you go. I like that. Awesome. Cool. All right.

Next question. Paying off student loans or start investing. All right. So if I've got, you know, a bunch of student loans, should I pay them off or should I use the money that I would put towards paying those loans off towards investing in real estate? See, it's a tricky question. If a student loan is at 2, 3%, and you know you can make more investing in something,

then, again, mathematically, makes sense to go out and do investment. When I graduate, when I graduated, I had like $2,000 in credit card debt. I had, you know, scholarships and stuff. So, you know, I didn't have a student. My wife, you know, she was on a scholarship, so she didn't have any student loan.

And I buy everything cash, you know, I have a couple of properties with debt on them, but everything else is free and clear. I mean, mathematically, definitely if you're paying two, 3% on student loan and if you have money to either pay off or go out and buy properties mathematically it makes sense to just go out and buy properties because your date of return will be three, four times more what are you paying in interest. But I mean, again, I'm not doing that myself, but if somebody is disciplined enough,

they invest in a good property where they know they're going to make money, then it makes sense to do that. Perfect. Cool. Oh, and it's mine again. Oh, okay. All right, number three, buying a rental property. I like this question.

I never even thought about it. Should I buy a rental property next door to a gas station? I don't own anything next to a gas station, but if, you know, if somebody offered me a deal where the numbers makes sense, would I buy it? Okay. It just comes down to numbers. If the numbers make sense, I'll buy it. I mean, if I'm buying similar houses in the area for, you know, my cost is, whatever, you know, and let's it. $100,000.

And if I can buy this property for 30, 4D, yeah, and if I can get similar rent, because the tenants won't care so much about a gas station next door, but a home buyer would be concerned about that. Yeah, that makes sense. Cool.

All right, last question. I can't find any deals. What do I do? You're not looking hard enough, I guess. You know, if you, if you talk to wholesalers in your area, you know, make relationship with agents. go to Shedip Sale, you know, go to these auctions, look online on sites like auction.com, you know,

and there are a couple of other website. You will find a deal, but deals will not be as good as what they were two, three years ago. So, I mean, there are still decent deals out there, but it just got to look much, much harder in this today than you could, you know, a couple of years ago. Right on. Cool. All right. Excellent. Good answers.

Good answers. So before we get out of here, let's move one last time over to the famous four. All right. So these are the famous four questions. We ask everybody this and you've heard it before, I know. So let's see what you have to say. Number one, I think I know what you're going to say since you've only read one real estate book. What is your favorite real estate book besides the book on rental property investing that we launched?

Shameless plug. Those are in a class of their own. Okay, good. Those are definitely on a pedestal. I worship them every day. You don't even count them as... No, you know what I'm going to do with those? I'm going to sell them 10, 15 years from now as collector item.

Oh, okay, good. You got one of the early copies, I'm sure. Exactly. Other than those two books that we released a few weeks ago here at biggerpockets.com slash rental book, what else is your favorite rental real estate book? Millionaire Real Estate Investor. by Gary Keller. Yes.

Good book. And I had to compete with that guy now. No, but again, you're in a different, you're in a different class. Yeah, different class. Like, after your book, what would I read? Sure, why not Millionaire Realistic? Okay, that's what I thought. Very good.

There you go. Nice. All right, what about business book? You sound like the kind of guy that likes to read some business books. What are you into these days? I love reading biographies, autobiographies. I don't, I don't like reading, like, how to, books. They never appear to me because I have a little bit of ADD and then I get lost.

Stories hold me, you know, really interested. I tell you the one that really, really changed the way I started looking at my business, what starts something that matters by what's his name, Blake Mikoski. He's the founder of Tom's Shoes. Okay. So I don't know if you know the story for every pair of shoe that they sell, they donate one. Yeah, that's cool. So I've started doing that with my business for every house that I sell, I provide education for a kid in India from first to 12th grade. Wow. How do you do that? Like I, I, what do you mean, how do I do that? I mean, like a charity or something. What is it going? I pay directly to the school. Wow. So cost per year would be about five to six hundred dollars and I pay for 12 years. Wow.

All right. I mean, I'll tell you, for me, the best gift I ever, ever got was my parents gave me education. Yeah. Hands down. To me, food, clothing, shelter, education are the four necessities. I mean, that just changed my entire life. And if I can help even one kid just get out of poverty or, you know, just get to middle class. I mean, nothing, nothing will make me happier. So that book, definitely. That's the only book.

I bought it. I remember, I bought it 11 at night. stayed up till 4, read 75% of it, went to sleep, got up next morning at like 9, finished the entire book within like 6, 7. That's the only book that I read in less than 12 hours. Wow. Definitely.

I got a pay one up. Yeah, it sounds really good. Well, that's amazing, man. I mean, really, it's, uh, you're a good guy. Thank you. Yeah, yeah. It's got all serious. Josh says about you.

Yeah. No, I mean, it's like, You can't use my line and screw with it. There has to be, I don't know, to me, there has to be a bigger purpose in life. To me, you know, for me, I've just, if I can do something for kids, especially for me, if I can do something for kids, nothing, nothing will make me happier. Right on. Cool.

Cool. What do you do for fun? I love, love spending time with my family, you know, that, but lately I've been taking boxing classes, so, you know, I go there three times a week. That's what I do. Nice. Yeah. Should challenge it, Brandon.

boxing? I'm shaking my head and people can't hear that. The rocks rattling around in there. I just go there to just kind of get some exercise. Cool. Yeah, you seem like you'd be, I don't know, I don't want to take you on. You'd beat me up. I'm horrible. I'm horrible. I'm not going to boxing. But it gets me a good exercise.

That sounds cool. All right. My last question of the day and the last of the famous four, what do you believe sets apart those successful investors from all those. those others who give up or fail or never get started? Motivation. Like a big Y motivation. That's just, if your Y is strong enough, no matter what the issues you'll get over,

it just that's, that's it. I mean, there's, I mean, I love reading these, you know, like I said, biographies, autobiography, when you read them, you're like, man, these people can do so, so much. I'm reading, right now I'm reading about, Elon Musk, the guy, you know, Tesla. I mean, you know, you read about these guys, you know, and then you're like, man, I mean, these people are doing a lot,

you know, then you definitely get their motivation. I mean, they were motivated to do something big with their life. So, yeah, definitely a big, big motivation will make you get over any, any obstacle in life. Right on, right on. By the way, I don't know if you know this website. It's, it is probably my favorite website next to Bigger Pockets. It's called Wait, But Why? Have you ever read it?

No. Okay, so wait, but why? The guy writes these just ridiculous novel-esque articles that are, you know, 5, 10, 20,000 words on all sorts of topics. And he, of course, is obsessed with Elon Musk and has written some incredible articles on how and why SpaceX will colonize Mars. Elon Musk, the world's radis man, how Tesla will change the world, are some of them. And they're amazing reads and like totally motivating. It's a science. It's a mostly sciencey type of site, but it's, yeah, it's pretty awesome.

Thanks for the tip. Yeah, for sure. Wait, but why? Right, but why? All right, so before we let you go, we got to find out where people can find out more information about you. Obviously, you are on bigger pockets, so I'm assuming that is one place. Yeah, I haven't been as active as I would like to be.

But yeah, bigger pocket. You know, people do message me a lot in bigger pockets, and I make sure I respond to that. and then they can go to my website, you know, and then again through bigger pockets. What's your website? Max Propertieslc.com. Cool. Finally, before I let you go,

for those people who are listening but not watching this on YouTube, we typically launch the YouTube versions of our shows a few weeks later. There's a whiteboard behind you. What does it say on that whiteboard there, Sherrod? Podcast number 155. So now you've got to keep it at 150.

Don't push me back or front. I guess you think 156 is going to get more views, then I'll be okay. Josh and Brandon asked me to shut off my phone and mine for this podcast. The mind part was much easier than the phone. Good. And then camera makes you look five years older, and I have three cameras on me right now. Yeah, yesterday when we recorded this, Josh said, so let me guess how old you are, Sherad. Is it, is it, what is it, 40, 45?

Yeah, 46. 46 is the highest number I remember. Really, are you really, you guys are calling me out. And you are, what, 33? So I'm already embarrassed by it. Just turned 33, not even a month ago. So I'm just getting over that 32. So more like 32 plus.

I'm really sorry. That's okay. It's, I, maya culpa. Yeah. Why are you sorry? It's okay. I know I look old. That's why I put that sign so people don't mistake me.

It's the camera. It's the camera. It's the camera. It's the camera. I thought you were seven. And Native American. Yeah, apparently. American Indian.

American Indian. There's a difference. I was really confused when I saw you in person. It was not American Chinese. Sharad, it's been a pleasure man. Really, really it has. Great show. Thank you so much for coming on.

Sure. Thanks, man. I appreciate. We'll see you around. Thanks. Bye-bye. All right, everybody. That was Sherrod.

What an awesome guy. Yeah. Very motivating. Unbelievable. Hundreds of deals. 50, give or take, rental properties free and clear. I mean, like, oh, oh, by the way, by the way, Brandon, yeah, five years. Five years. Five years. I've been doing this twice as long and he's dominating me. One more thing. One more thing. I mean, because, you know,

you like to do things like plug this book that you wrote or this other book that you wrote. Or the book on rental property investing and managing rental property. That's a bigger pocket.com such a rental book? That, okay. Yeah. Right. Yeah. Well, no money. Exactly. Yeah. You can't help yourself. Verbal diarrhea. problem. I'm taking medicine for it. Don't worry. This guy learned it all from bigger pockets. That's so cool. I mean, it makes me feel so good. It just reinforces that this community is so special. And anyway, Josh. I'm pumped. It feels great. Yes, sir. I'm going to say a group from everyone listening, thank you for bigger pockets. I don't know if

ever said that, but thank you for bigger pockets. You haven't. You've always been a jerk with nasty, smart-ass comments. I would not be where I am today without the stuff I learned on bigger pockets. I mean, there's no, I don't know if I'd have any properties because my parents had told me that I shouldn't invest in real estate when I first started. And they said I was crazy. And the only reason I did is I also said you were ugly, right? That too, but that doesn't change. So they said that I should not invest in real estate. And then I went online and I found out that there were people doing this on a site called Bigger Pockets. And that's how I started. So amazing. Amazing. Amazing. Thank you, Josh. Thank you, man. That was very, very kind of you. I'm going to go cry now.

Okay. All right. Well, anyway, thank you guys for listening. We really, really, really do appreciate it. And if you guys are enjoying the content that we're putting out, please, please jump on iTunes, leave us a rating and review. We need more. We've only got like 16,700 ratings and reviews, and we have like 60,000 listens to show. We had a goal that we were going to try to get 2,000. I remember saying at the beginning of the year. We were trying to get 2,000 reviews by the end of the year, which we'd be doing like 400 reviews today.

Yeah. So if we're going to hit that goal, guys, that's what we had. Please. 400 reviews today. I think we could do it. I mean, there's 60,000 people listen to these shows. Oh, yeah. You know, and it takes like two minutes.

And so, yeah, go to iTunes, go to the Bigger Pockets podcast, and jump in and leave us a rating review, preferably five star, of course. But, yeah, that would be awesome. And otherwise, get on bigger pockets, hang out with guys like, Sharad, who's rocking it and available to hang out and answer your questions. Otherwise, go to BiggerPockets.com slash show 155 to check out the show notes and connect with Sherrod.

So big thanks. And, uh, Hey, Josh. You know, happy new year. I'll see you next year. Yeah, man. All right. I'm Josh Dorkin. Sign in on.

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