BiggerPockets Real Estate Podcast - 177: Using Fixer-Upper Rentals (BRRRR) to Achieve Financial Independence with Ben Walhood

Episode Date: June 2, 2016

When you hear the acronym “BRRRR,” what comes to mind? Winter? Well, today on the BiggerPockets Podcast, we’re going to talk about BRRRR — and, no, we’re not talking about the temperature! On this powerful episode, we dive deep into one of the most popular and exciting strategies for real estate investors today — the BRRRR strategy (Buy-Rehab-Rent-Refinance-Repeat). We talk with Ben Walhood, a real estate investor from the Chicago suburbs who has found tremendous success buying properties in several states using BRRRR, as well as several other strategies. You’ll learn why it took Ben nearly ten years to “take off” as an investor, as well as the best tips he has for finding success today. Grab a notebook and pencil — because this is one show you’ll want to take some notes! In This Episode We Cover: Tips for switching from the linear path of a sales person to a real estate investor What a “no doc loan” is How Ben bought his first house in college to house hack How he learns each market he gets into The story of how he failed horribly on his second deal What to do when you get calls from tenants in the middle of the night Why every strategy could work How he got better with his type of properties over time The best deal he’s had Why you have to fail to succeed Tips on the BRRRR strategy How many properties Ben has What you should know about CapEx Tips for using insurance companies How to perform a walkthrough of a typical BRRRR deal The downsides to this strategy Tips for short-term financing through crowdfunding Where is Ben going with his investing How we was able to quit his job through investing And SO much more! Links from the Show BiggerPockets Calculators (includes BRRR Calculator) RealtyShares BP Podcast 151: Finding Your “Freedom Number” with Clayton Morris BiggerPockets Forums Books Mentioned in this Show Rich Dad Poor Dad by Robert Kiyosaki The Book on Rental Property Investing by Brandon Turner Investing in Real Estate by Gary Eldred Rich Dad’s CASHFLOW Quadrant by Robert Kiyosaki Eat That Frog! by Brian Tracy Tweetable Topics: “I just hated the idea of throwing away money on rent every month.” (Tweet This!) “Find people that choose to rent and not ones that need to rent.” (Tweet This!) “I had to try and fail before I could figure out what success looked like.” (Tweet This!) “It’s all about putting in the right people and putting some terms in your lease.” (Tweet This!) Connect with Ben Ben’s BiggerPockets Profile Ben’s LinkedIn Ben’s Company Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 177. I was able to buy this thing with nothing down. I ran out two of the rooms to my buddies. And I'm essentially at that point living rent-free in a brand-new house that I own. And at that point, I was completely hooked on real estate. 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.

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's going on, man? So I got to tell you, I just had the greatest banana bread of my entire life. You ever eat banana bread? Yeah, of course.

Yeah, I just shout out to my wife here, who is nine and three quarters months pregnant. And I text her earlier, and I'm like, what are you doing? She's like, making banana bread. and I'm pretty excited. It was the best banana bread I ever had. How you doing? I'm good. I don't know why you're forcing your wife to make banana bread

when she's like a week from delivering a child. Maybe that's what you do. That's what I do as I make her stay in the kitchen and cook. Sorry, Heather. But the next time you make some, you better send me to them. She listens to every show now. Now she knows she'll send you some banana bread. That would be amazing.

that would make my entire hour. Well, you don't want to make my entire hour? What's that? Getting on with the interview. Okay. Wow. I'm in a feisty mood today. Come on.

Apparently. Apparently. Somebody told me on YouTube the other day, they said that I was mean to you. Oh, you're always mean to me. I don't think so. You're always mean to me. No. Somebody said, that guy at, and he put like the time is really mean to the other guy.

And I was like, I thought he was talking about you, but I went there and he was clearly talking about me. And I was like, well, So whatever. Yeah. Yeah. Abusive partner. Josh. I love you, man.

Thank you. Thank you. You got to have the word man in there. Although I get it's a lot. And then I say yes. Yeah, I know. And then move on. Oh, do you want me to say something?

No, I don't want you to say nothing like. I'm sorry. I'm awkward enough. Good, because I wasn't going to. Good. Now, everybody listening is really awkward right now. Let's move on to the show. So we got a cool show today.

Definitely. A topic that we haven't dug in too much on. Today, we talk about the Burr strategy. and buy rent, refinance. Rehab, refinance, and repeat. That those hours get confusing sometimes. But yeah, it's a cool show. What I like best about today's show is that this guy got into real estate, got excited, did his first deal, and then struggled for the next bunch of years, really. It was like a five-year period, I think or so, where he was trying to do those next deals.

And they just weren't happening for one reason or another. he's now got dozens and dozens of rentals and kind of figured it out. But it obviously wasn't fun experiencing it for him. But it's fun in retrospect looking back and saying, oh, you know what? Yeah, I went through all these struggles. I experienced all this stuff. And, you know, it's just part of the process. Yep.

Very true. Yeah, he's very, very real. I think you guys have liked that a lot. It's very open and honest. And it's pretty awesome. And we'll get to that in just a minute. But before we do, let's get to today's quick tip. All right.

Today's quick tip is something we're very, very excited to tell you. you guys about. And that is we have a brand new calculator on Bigger Pockets. It is called the burr calculator. In other words, we have the rental calculator and we have the flip calculator, which people use all the time. And wholesale calculator. But now we have the Burr calculator because so many people are doing this concept of buying fixer upper rental properties. And there wasn't a real good way to use. I mean, I don't know any calculator on earth, any program, software, whatever that does what this thing does. So I'm pretty excited about it. You can check it out at biggerpockets.com forward slash.

I think Kelk is probably easy way to get there. BiggerPock.com slash kelk. And you'll see all the calculators there, including the Burr calculator. And of course, you can have to be a pro member to get unlimited use, but everybody can go test it out. I think it's five times.

Play with it and check it out. So bigger pockets.com slash coke. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand new construction homes,

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They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims.

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Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. Here's why savvy real estate investors are obsessed with bonus depreciation. It lets you take that rental property or commercial building you own. and depreciate most of the cost against your income. Legally, 100% IRS compliant. That's instant cash flow improvement. Cost segregation guys is the number one firm nationwide,

specializing and identifying these faster depreciating assets in your property. They've completed tens of thousands of studies across all 50 states from remote cabins to apartment complexes. So if you own investment property, this is a no-brainer. So visit costsegregationguise.com slash BP for your. free proposal and find out how much you could save this tax season. All right, guys, so this is show 177 of the Bigger Pockets podcast, and you can check out the show notes at biggerpockets.com slash show 177. Let's get to it.

Today's guest, Ben Walhood. Ben is a real estate investor who's actually traveled all about the country, and as we had talked about, is really been focused on the Burr strategy. But he's also doing a few other things, doing some flipping and things like that. but today we really dig on this burr. So let's bring them in. Let's get it going. All right. Ben,

welcome to the show, man. It's good to have you here. Yeah, thanks for having me, guys. Yeah, this should be fun.

So let's jump right into it. What's your story? Where'd you come from before real estate and how did you get into your first deal? Sure. So I took the really linear path. I got a degree in biomedical engineering and sold brain surgery equipment for seven years. Wow.

And then became a full-time investor. So, you know, the natural path. That's what I did too. I bought my first house while I was a full-time college student, making $8,000 a year driving bus for the university. But this was in the heyday of no-doc loans.

So this was 2005, and they basically checked to make sure I had a pulse and then gave me $150,000. Nice. I remember those days. Which is really funny. You know, we've never talked about this, but no-doc loans worked for everybody except small business people who actually had to go through,

you know, doctor's hand up there, you know what, in order to get a loan. It was not as easy for those of us, a lot of folks. So it's aggravating. Yeah, I have no resentment towards anybody. Yeah, I mean, I got my very first property in 2007 was a no doc loan. And they're just like, oh, what, you make minimum wage or you got no credit? Here, how about a 250,000 they approve me for it. That's amazing. That's amazing. All right. And then unbeknownst to me, actually turned it into nothing down deal. I mean, in retrospect, I don't know, it was either really good or really stupid. I'm not really sure. You know, I borrowed the 5% down and paid it back, like on a 24-hour loan from my parents, paid them back the day after closing with a closing credit. And I probably shouldn't even talk about that on,

you know, online. But, you know, it was basically accidental. I didn't know what I was doing. I ended up with a house with nothing into it. So why did you buy a house in college? I mean, most of the people wait until after college. Great question. Yeah. So like a lot of probably your listeners and other real estate investors, you know, Red Rich Dad, Poor Dad, around 2002, got into that passive income mindset, you know, wanted to buy a real estate. So I actually started in 2002 trying to get my first loan. And as opposed to 05, 0607, it was actually pretty difficult. Well, it should have been difficult, right, for a college student with no income.

And so I knocked on a lot of doors, called a lot of lenders. And I just hated the idea of thrown money away on rent every month. So I finally got to, well, I, I didn't get anywhere. The market kind of caught up with what I wanted with the no-doc loan. And I was able to buy this thing with nothing down. I ran out two of the rooms to my buddies. And I'm essentially at that point living rent-free in a brand-new house that I own.

And, you know, at that point, I was completely hooked on real estate. That's awesome. House hacking. I love it. Yeah, before there was a name for it. I know. You know, we had to come up with it at some points. Okay, so you bought this first deal.

This is back in 2005, 0-06. So the market's crazy good. What happened next? Do you go right into a second deal or do you wait a while? No, well, I tried. So I graduated in 06 and didn't get a job right away, so I kind of hung around. This was in Iowa City. So hung around for a little bit, got a job in St. Louis, moved down there and tried to learn that market. And once I started getting comfortable down there and looking for houses to buy, I found out really quickly that buying a rehab house through a conventional lender is almost impossible. And that's what I was trying to do, right? Buy something that could fix up and maybe house. hack with a little more sweat equity. And I tried that on two, three, four different deals and they all

just crumbled. You know, I mean, I had no clue what I was doing. I didn't know what a hard money loan even was at the time. So tried to use the wrong product for the wrong deal and it didn't work out. Then I ended up getting a promotion moving out to New Jersey of all places and had a really similar experience out there. We had multiple deals that went under contract and just couldn't close for one reason or another. This would have been, well, this was 2008, 2009. So, So the biggest issue at that point is nothing would appraise. You know, all the appraisers were just scared little bunnies. They didn't want to put their name on the line for a house that might lose value.

And so I had deal after deal that went under contract. It was a good deal. I could, you know, I could do a little work to it and rent it out and it'd be a great deal for me. But, you know, the appraisers would come in five grand load just to protect themselves. And then the whole deal falls apart. So went through that. And then finally we moved to Chicago. We're in this market.

And then about 2010 started more grand. aggressively building kind of planting roots and, you know, learning new techniques, figuring out what a private loan was, figuring out what a hard money loan was. And then we just started growing from there. So if I've got the story right, O2, you got into it, you're excited about it. You got your first, you did this house hack in 0506, and it wasn't again until 2010 or so that you actually ended up doing your next deal. Is that about right?

You got it. So, you know, for those people listening, you know, this is, you know, this is how it may go. I mean, you know, there's those who knock it out immediately and then there's those who keep trying. And, you know, I'm assuming we're going to hear obviously more about the story that, you know, since then things have sped up a little bit. So that's awesome. And I love hearing that you've, you know, you kept going, kept trying and, you know, kept making mistakes. And then all of a sudden you hit it, right? And so what happened?

You're in Chicago. Let's talk about that first deal since after the first deal. So your second deal. Yeah. And the second deal, I mean, it was one of the worst deals I've ever done. It went horribly wrong. I learned almost every lesson as a landlord that you can learn. And so what I bought was a two-flat in one of the near western suburbs of Chicago.

Not a particularly nice area. It's not south side for those that are familiar. There's some pretty rough neighborhoods there. So it wasn't a war zone. but definitely the lower class bought it for 19,000 bucks, put about 30 into it, and eventually ran it to Section 8 for $1,100 a unit. So on paper, that sounds like an awesome deal, right? 50,000 bucks into it, renting $2,200 a month. That's a 4% deal.

Yeah, that's ridiculous. Exactly. But, you know, that also taught me the downside to those deals, right? I mean, these tenants, I was getting middle of the night phone calls to change light bulbs and unclogged toilets. I would get a call from, I got a call from the fire department saying, hey, they were about to put me in jail because I let my tenant use a gas stove that wasn't functional and it was going to blow up the house. And they said, oh, you know, Mr. Fire Marshal, did the tenant bother to tell you that we found out this problem yesterday and I told the tenant

not to use it until a new one gets installed tomorrow? Well, no, of course, she happened to leave that out of the story. Yeah. So, I mean, it's just this caliber of tenant that you're dealing with that that expects the world night and day. And, you know, I pretty quickly figured out that I just don't have the temperament for that regardless of how good the cash flow is. Well, there's such a good lesson there, too, that, you know, people oftentimes want to look at these, like, rules of thumb. Like, if the deal is a 2% deal, it must be a good deal. And, you know, we talk about these, these kind of rules of thumb. But at the end of the day, like, there's so much more perspective that goes into an investment than just some number of how much rent comes in and how much rent comes in,

and how much you buy the property for. Absolutely. Yeah, I mean, just because it's a 4% deal or whatever, you know, like amazing cash flow numbers you can get doesn't mean it's going to be worth buying, you know? So I think that's a great lesson. Do you still have that property today? I know, we got rid of that thing.

I basically, you know, I cut my teeth that figured out all the lessons, did the wrong things wrong, and eventually had to evict one of the tenants and replaced one of the other ones on more friendly terms. Basically, I got it stabilized and then unloaded it as quickly as we could and got out of that area. Did you make some money on it, or did you break even? According to the IRS, yeah.

I paid taxes on it somehow, but it feels like all I did was lose money on it. So I'm not sure how that shook out. Been there, man. No, I mean, and, you know, I know you guys are really anti-gourouro and boot camps, and I'm the same way that I mean, I invested over the course of a couple years, you know, a few thousand dollars probably that I lost all total, right? I mean, there were big hits that some of it got some of it back and whatnot. But, you know, the time and money and effort that I sunk into that deal taught me almost everything I know about how to be a good landlord and how to find good tenants in good areas.

Yep. But I learned that by buying the wrong product in the wrong neighborhood and putting in the wrong tenants. So it was all well worth it. Yeah, I love Brandon's point. You know, it's really easy to stop and say, yeah, there's a lot of great deals out there. Well, and to take what you added, Ben, you don't have the temperament for it. Not every type of real estate works for every type of person. And I discovered the exact same thing because I started the exact same way as you did in the, I'd say mine was closer to war zone, airing on the more on the side of a war zone.

And it was a nightmare. And that taught me so many things about what I didn't want and what I was not willing to put up with making those mistakes. And for some people it works great. but you know what, it's not worth the money. Not for me, it wasn't. I don't need the drama. I don't need the headaches. Even if I have the best property manager in the world,

I'm still going to be dealing with turnover after turnover. You're not going to get the quality of tenants in those areas. So screening is, you know, exceptionally difficult. You know, the time to turn around a unit, get it re-rented is considerably longer. And, you know, sure, when you get it rented, you can make a lot of money, but there's usually a lot more headaches that go along with it. It's not as easy as it sounds. Well, and not to mention that not only are you going to turn over tenants

and have longer vacancies, more repairs during those turnover turnovers, but you're also probably going to turn over property management, right? You're either going to have a terrible property manager that's so bad they're the only ones willing to work there, or if you give that property or that tenant to a good property manager, they're going to turn you over. They're going to quit. So any way you slice it, you're probably ending up with the headaches at the end of the day. So, you know, by contrast, I mean, nowadays, most of our deals are, you know, you talked about the 4% rule. Now it's more like the 1% rule. Some of them are even more in the 0.8.9% rule.

You know, so we're now buying houses that in my market, there may be $150 to $200,000, rent for, you know, $1,600, $1,600 a month, give or take. And, I mean, it's just a night and day difference, right? We've got a desirable product in a desirable area. We get probably the top 5% of the tenant pool out there. I think every tenant we have would qualify for the mortgage to buy the house that they're running from us. These are people that choose to rent, not ones that need to rent. And that's exactly why I want to rent my houses too.

I love that. That's great. I feel like I've been doing the same thing as my investment shift. I started just like you did, just like Josh did, with just crappy little rentals because they were cheap and they were easy to buy. And again, I don't regret it necessarily because it made me who I am. And Josh has made him who he is and yours made who you are. but I don't want to stay there forever. I mean, you get to that point where you figure that out,

and then you figure out you don't want that. And, you know, some people do make money in the war zones. But I feel like those are... I mean, that's another totally different tangent, too, though, that every strategy can work, right? If you meet somebody that says, hey, only my strategy, you know, this is the only way to make money in real estate. Well, guess what?

They're selling you something. Yes, they are. There's hundreds of strategies, and any of them can work. Yep. Right? Not all of them work for all people, right? All three of us, it sounds like we probably don't really have the temperament for that product or that tenant pool. But there are people out there that are buying those left and right and they are cash flow in the heck out of it.

If they can handle that, in the short term, at least, they're going to make more money than I am. But it's just not an investment that I want to have. So every technique can work. Right on. All right. So what came next, Ben? You got that second deal, this nightmare deal. And you said, ah, I'm not going to let that stop me.

I'm going to keep going. Or did you just, you know, did you come close to leaving? What was the mental state from this property? Yeah, I mean, it depended on that day. I mean, it was just a complete roller coaster ride. You know, I mean, one day it would be, you know, when I got the rent check, right, a couple thousand dollars and I pay out my $400 mortgage payment, you know, those days was great.

You know, I wanted to go buy 10 more. And then, you know, and then the phone rigs an hour later and tenants, you know, screaming at me about something crazy and, you know, the roller coaster goes back down. So anyway, once that was, that property was kind of getting stabilized. We bought a couple more single families, again, in the further western suburbs, the more desirable areas in my market. And in those, you know, kind of learned a few more things.

I bought some of the houses that were in, they were in okay condition, you know, that's maybe B minus C plus type of condition of the property. And we found the equivalent tenant. And so I was kind of just working my way up the ladder. And then by deals five and six, you know, it was more like a B plus property and getting B plus A minus tenants. and, you know, after you manage each of those tenants for a year or two, you figure out pretty quickly which ones you want to deal with.

So I actually ended up branching into Phoenix of all places, you know, so that makes a lot of sense, right? You learn your market well enough to do two whole deals and go completely across the country, but the timing was really the issue. So this would have been about 2011. So while I'm stabilizing that first property, my parents call me up and say, hey, we're buying a retirement home in Phoenix. We're going to snowbird down there, you know, and I said, well,

what would you buy? I was like, oh, we buy in this three, three bedroom house for $50,000. And like, there's no way you're buying houses that cheap in a nice area. And they were just adamant that these things, these good deals were down there. So I get on a plane, I fly down to Phoenix. And here are these, these houses in these cookie cutter neighborhoods that are, they're five years old. They're three bed, two bath, 1,200 square feet, vaulted ceilings, like the epitome of the, the perfect bread and butter rental house. And these things are, they still look almost brand new and they're selling for $60,000. Now, in some people's market, that's an expensive house. For me, that's completely on fire sale. And even just comparable to their market, a few years earlier, you couldn't buy the

land for that kind of money. So we bought up just a couple of those houses. If I had the means, I probably would have bought a couple hundred. And one of those went from being, I bought it for $58,000 in 2011, and I sold it last year for $152. Whoa. And it was leverage too. So not to brag, just, I mean, that's the best deal we've ever done to date on a, you know, buy the rental and hold on to it. And it was just a really, a really good coincidence, I guess. We got into the market right at the bottom and, you know, saw the quick pop. And, you know, that's not going to happen every day. But it's only, it only happened because we were in the game. Yeah. Yeah. Well, I like that. Yeah. Talk about that, though. I mean, you know, there's, we've got tens of thousands of people listening to the show and not to not to make you nervous or anything. We're all listening to you intently. But being in the game, you went for years where you weren't in the game and you were struggling to get into the game, which is a hell of a lot better than lots and lots of people who never even try, who just persevereate, get nervous, that they're not ready, that let fear stop them. But what is so important about being in the game?

You know, you made the first deal, sounded okay, the second deal, then it got better and better. but talk about that a little bit. So if you're not buying property, then you're definitely not buying the perfect property, right? So without, I mean, without me buying that first property, I would have no idea what a good property was, what a good neighborhood was, what a good tenant was, right? I had to try and fail before I could figure out what success looked like, right?

Because you can read a book and hear, most of the guys that write these books, you know, they're going to tell you all their success stories, right? they wouldn't have started with that deal I mentioned. They would have gone straight to the Phoenix thing that made a thousand percent return and tell you how great they are. But the reality is somewhere before that, they made mistakes and they bought the wrong thing and they invested in the wrong places. You can't have one without the other, right?

If somebody says that, hey, I just went out in my first 10 deals. All 10 of them were slam dunks and they went perfectly. Either they're lying or I want to know where their crystal ball is. Because the reality is you have to go out and make mistakes and fail and get back up again. And that's how you learn to find the right thing. I mean, yeah, I got lucky for sure. But what's the acronym for luck? It's laboring under correct knowledge. Right. And so I could see that there was opportunity in this market. I was really confident that Phoenix probably wasn't just going to close the doors and go off the map, right? That it was

eventually going to come back. Now, I wasn't looking for a particular time horizon. I wasn't saying, hey, I'm going to buy this house because it's going to double in value next year. It was, no, it cash flows today and it's going to come back to being worth $150,000, $200,000 at some point. I don't know when that point is, but I know it's going to happen, right? Because that Phoenix market isn't just going to give up and go away. So, you know, we bought something that cash flowed that we could then hold on to for as long as we needed until property values came back up to what they had the potential to be. Hey, Ben, let me argue that point against you, just for fun. Please do.

I think the folks who bought a house in 1950, 1960 in Detroit said the same thing. I knew you couldn't do a show without picking up to. It's been a long time. It's been a long time, but it just seems so fitting. But, yeah, I mean, you know, granted, listen, Detroit is having a fantastic turnaround. Things are starting to move there, which is awesome. but take one of the markets in the cities, the rust belts, where things aren't necessarily turning around.

What you did was you did not buy for that appreciation. You bought for cash flow and said, it only makes sense that at some point it will appreciate. So you still won, but had you just bought a losing property and said, oh, someday it's going to turn around, well, the risk on that is considerably higher than where you were. Right. Yeah, it's actually on the back of one of my cards, it says buy for cash flow, but enjoy the appreciation. And that's exactly what it was. I mean, that deal, the real reason we

bought that deal was it was a 10% down loan. So we put down $6,000 and we cash flowed about $300 a month. So we were making well, well into a double digit cash and cash return from day one. And if that house never went up in value, if it was still worth $60,000 a day, it would still be a good investment in my book. I would still be happy I held it. So, I mean, I'm paying down on the mortgage. I'm getting the depreciation.

And my cash on cash, right? My return just strictly off the cash flow is perfectly adequate for me. So the depreciation is just icing on the cake if you buy the right properties. Did those properties need any work as well? Were you doing any like forest depreciation or were they already just good to go?

Yeah, those particular ones, again, I mean, they were about five years old when I bought them. They looked like brand new. I don't think we even clean the carpets. Nice. That's awesome. Way to leave the mites, man. Way to leave the mites.

Well, to touch on what you just said there, one thing I talk a lot about, I think it's in the book on rental property investing, and I read a million blog posts about this, is the four wealth generators of real estate, which are cash flow appreciation, the tax benefits, and the loan getting paid down

or amortization, as some people call it. And that's exactly what you're saying there. It's like, even if you didn't get the appreciation, you still get the other three. And that's one thing I love about, rental properties is that you get to capitalize on all four of them versus, you know, I like flipping to. I think flipping is fun, but when you're flipping, you don't get the tax benefits. You don't really get the loan getting paid down. You don't really get cash flow. All you get is what you get in appreciation,

whether it's forced or natural. And again, it's just one of the reasons I love rental properties. It's so forgiving because of that. Well, and you're so dependent on the market in that deal too, right? I mean, if you, like in Chicago, it's very seasonal for us. So, you know, you go in and just look at, oh, my comps are $200,000 on the back end, and I buy this thing for $100,000, and I put $50 into it. But, hey, I'm brand new to investing. I bought it in October 1st, and now I've got it on the market at Christmas time. Well, guess what?

That $200,000 comp is now about $160,000 comp, and nobody's looking in the first place. So it might appraised. So you've only got one strategy there, whereas, again, the rental properties, as long as they cash flow, I don't really care if it goes up or down. value. Eventually, I know it's going to get there. But even if it, again, if it never appreciates, I'll pay the mortgage down to zero and make cash flow along the way. I love that. Now, just to add on one more thing that I like to do, and I think you like to do it, too, is if you can buy these properties that need some work, that you can put some equity into,

then you, even though you're not banking on future appreciation, you can at least kind of bank on the forced appreciation that you buy a property for a discount because it needs work. You do the work, then you rent it out. Is that right? Is that kind of where your story leads to? Yeah, I feel like somebody might have coined a name for that. Somebody might have called that something. Oh, was there a setup there or anything? Br, it's kind of cold. Burr, it's cold in here.

Yeah, so for those who don't know, that's... Burr. You want to tell us what that is? The buy rehab, rent, and refinance model is... That's exactly what we're doing today. So early on, it was, yeah, buying the houses that we do pretty minimal work to. Maybe remodel a bathroom here or there, change carpet, things like that. And we just, over time, we ramp that up to now most of our houses, we'll put a $40,000 to $60,000 gut rehab in.

You know, we'll take it all the way down to the studs. And it looks literally better than new when we're done with it. You know, a house built in 1980, you know, it never had stainless steel and granite in it. So we're going to bring it back to better than new. And again, because of that product that we put out, we're able to get a really high quality of tenant. Yeah, I love that. I love that. So let's talk about, like, after Phoenix.

Where did you start buying again? And what's the rest of your, let me ask to this. How many properties do you have total now at this point? We've got a couple dozen rentals. Okay. And we also do fix and flip. It's mostly the Burr strategy rate, the fix and rent, if you want to call it that. Okay.

So we do about 50-50. So my favorite technique is actually we'll rehab it and put it on the market, both for sale and for rent. And if it's a property that, hey, you know, we'd kind of like to another one to go in the rental portfolio or we're really liking this property, I'd just tip the scales a little bit. I'll drop the rent slightly, increase the sale price. If somebody comes along that wants to offer me more than I think it's worth, I'll take the quick cash.

And then, you know, if we need an influx of cash for whatever reason, I might tip the scale the other way, right? Drop the price a little bit and move along. So it just, anytime you can open up multiple exit strategies, it makes life so much easier and, you know, lets you sleep at night because you know that you can get out of it one way or another if you need to or hold it if you want. Yeah. And what I also love about that is that when you go and rehab a house, especially when you're doing those big ones, 40 to 60 gut job, generally speaking, you don't have a lot of repair costs or CAPEX coming up in the next few years. So you can get these properties that, I mean, the one I did a year ago, we've never had a single, actually the last couple I've done that have been burned things, haven't had a single phone call, not a single repair in like a year or two now. It's fantastic. I love that.

Yeah, exactly. Yeah. Our rule is anything that's got left in less than a 10 year lifespan left on it, we just replaced it during the remodel. And now, like you said, our CAPX is basically zero because. we figure we'll probably hold those for five to 10 years. And by then, you know, by then we've moved on. Yep. Can you explain that for folks who don't know what you're talking about? What's the CAPX and what does that matter? Sure. So in theory, anytime you buy a property, you should be setting aside some amount of money every month out of your cash flow to go towards capital expenditures. You know, if a water heater goes out, you know, in my area, it's a thousand bucks to replace one of those or your furnace or air conditioner, a couple grand. You know, your roof goes out. It's five to ten grand depending on the size of your house.

So you don't want to get hit with those large one-time expenses without being prepared for it. So in theory, every month you should take a piece of your cash flow and you set it into an escrow account so that you've got that there for those big expenses. But again, by taking care of them on the front end, it's not that we completely eliminated stuff still happens, but the likelihood goes way, way down. And we're able to escrow, you know, I feel we need to escrow a lot less to cover those contingencies. And it's also important because when you're actually running the numbers and evaluating the deal itself, you know, you're returns, yeah, you have to take into consideration your cap X as part of the returns. And whether you spend it in year one, year five, or year 15, you know, that's still going to affect, you know, if you amortize that over the life of the property, that's an expense. A lot of newbies don't

do that and quickly find themselves in trouble. Oh, wait, I'm going to have to replace the roof in three years. Oh, wait, I'm going to have to spend all this money. Yeah, you better plan for it. Yeah. Yeah. Well, you know, but another thing for, I know you guys have a lot of A lot of newbies that listen to the show. We were all there at one point. And something I've recommended to some of them, it's not a profitable strategy for me. But, you know, there are those various insurance companies out there that will ensure, you know, your mechanicals, your plumbing and you're electrical. And so, you know, if it's your very first deal and you say, well, gee, I don't have $10,000 to set aside.

I barely scrape together the money to buy this thing. Well, go pay $50 a month to one of these warranty companies. And now you can sleep at night. I mean, again, it's not profitable in the long. run. But in the short term, if it's your first deal and that's your biggest worry is, oh my gosh, what if the AC unit breaks or the fridge explodes in the middle of the night, what am I going to do? Well, that's easy and relatively cheap piece of mind. I do think the problem is for a lot of people, think out there's bigger pockets, but that

isn't a worry. And it isn't a worry because they don't know it should be a worry. Obviously, that's why we do this and that's why we talk about these things so that it could be front and center for people. So, Brandon, you had something? I did. I'm just curious if you could go through like a typical Burr deal. For those people who are maybe having the hard time wrapping their head around what that means to buy rehab, rent, refinance and maybe repeat it, what does that exactly look like in terms of real numbers? Sure. Yeah, I'll use the one that we just finished. The tenant just moved in on Sunday, actually. So we bought this. In fact, it was an MLS deal. I know those are pretty rare these days, but we got a good bargain. We bought it for $68,000. Where was that at? This was in western suburbs of Chicago. So, you know, lower middle class neighborhood. So bought it for 68. Went a little over budget. We put about 55,000 into it. So $125,000, $130,000. It's worth about 150. So we don't have a ton of equity in there, right?

I mean, this wasn't a flip, but that wasn't really the intention of this one. So, but now that we've got that 125-ish into it, now we can go, you know, go to the bank and say, hey, it's worth 150,000, give us 70% of that and cashed out almost all of our equity, maybe leaving, you know, five or $10,000 in it, but now that rented for $15.95 a month. So, you know, after the mortgage, you know, principal interest, taxes, insurance, and maybe a little cap-x, you know, setting aside something for vacancies, maintenance, property management, all that good diligence stuff, you know, we're still, we're still clearing, call it $500 a month on a ultimately a $10,000 investment on the high end. right? So we're still, so what is that, $6,000 a year on a $10,000 investment. I'm pretty happy with that.

We're relatively secured, right? I've got 30% equity. So even if there's a little market volatility, which I don't expect, but we're protected on the downside a little bit. And to me, that's a deal that I will just do that every single day of the week. It's safe. It's as secure as you're going to get in an investment, and it makes good money. And one more thing I love about the strategy is that not only do you, you know, you have that it's worth 150, let's say, and let's say you are new mortgages, I don't know, 115, I don't know, whatever. You've got this nice spread there. So if the market drops, of course, you're protected.

But also, if the market goes up and up over time, which it should over time, you know, real estate generally goes up over time. So let's say 20 years from now. But either way, it doesn't go up from the 68 number that you bought it for. It goes up from the 150 number that it's worth today, which means that you're like that difference where your loans getting paid down every month and the value is going up from that 150 mark. And so your, you're just equity just grows, your net worth grows so fast doing this thing. Right. Yeah. Yeah. If I could do 100 of those, you know, this year, I could probably just

kick back and relax, live off the cash flow and, you know, be a multimillionaire by the time these things have got. So let's talk about that. Why can't you just go to 100 of them? I mean, what's the downside of doing this strategy or what are the risks? I think one of the, one of the challenges for us and probably most people in my space is the long term financing. Yeah. Finding, you know, first you start with the, the fans. any may loans, right? You're going to your typical big banks and get a loan. And that's pretty easy for one or two, up to four, starts getting a little tougher going from five to ten. And then after that, you know, you have to go to a community bank or you go to one of these big lenders,

a B2R or, you know, companies like that that they're going to pay, you're going to pay higher rates. You're probably going to get a lower LTV, a loan to value. So you can borrow less against the property. So you start to lose a little bit of economy. scale where you're having to put a little bit more into each house, you're making a little bit less return. So you can continue to scale, but, you know, there's a limiting factor there. You do still need some capital. Yep. Yeah, definitely. Definitely. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong

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When you buy the property, when you first do it, what do you do there? Sure. So I use the technique that people are kind of starting to hear a lot of. I use crowdfunding. Really? Yeah. In fact, I think that the day that you said on your podcast that nobody's ever been on using crowdfunding, that's when I decided I'd better submit my request.

That's awesome. Nice. So how does that work and what exactly are you using the crowdfunding for? Sure. So the way that crowdfunding works is, I mean, this concept has been around for years and years, right? If anybody ever used Prosper or Lending Club, you know, back in 2005, I think they came around, where everybody pulls a little bit of money and is able to give a big loan. So that same concept, you know, fast forward 10 years, and now they're using it in real estate.

So this deal I just mentioned, right, where we bought it for $68,000, we did this rehab. We borrowed most of that money from a platform that, you know, we submit the deal to underwriting. They make sure it's a legitimate deal that we're going to make some money. And then they send that out to their investors. They post it online. And investors, in their case, can put in as little as $5,000 to buy into a piece of that deal. So I might have had, I'd say 20 investors that each put in $5,000. $5,000, and now I get a $100,000 loan.

So the actual platform, you know, they're not really lending any money themselves. They're kind of working as a middleman. But by doing that, you know, some people use the phrase they're democratizing, investing, or borrowing. So it's, they can be comparable or even a little cheaper than your local hard money lender. And once you've, just like a hard money lender, once you've done a few deals with them, it becomes a lot easier to get each deal funded. That's cool.

That's cool. So do you mind sharing or are you able to share what company you used or who you've used? Yeah, I don't mind at all. Realty shares. Actually, one of your sponsors. There you go. When I went full time, which was right at the beginning of 2014, I called up the CEO of Realty Shares because he was still the guy answering the phone. And they had kind of just started.

And I remember it would be me calling him and saying, hey, you know, I just put one, two, three main street under contract. Here's what I'm going to do to it. here's what it's going to be worth. He would underwrite the deal and send me over the loan. And fast forward two years, now they have 50-some people working there. And it's this giant operation lending millions of dollars. So I'm really happy it took off for them and it was just perfect timing for me. That's awesome. Yeah, I'm glad to have somebody on here who has done that.

Yeah, that's great. How fast are you generally getting that money? So you find a property submitted to the platform. How quick is the turnaround and actually getting the cash? Yeah, typically from when I first send the deal to when we get to closing about a week. So usually the money can get there quicker than the seller is ready to bring us clean title. No, no, I'm talking. And maybe you meant this, but I'm saying you literally submit deal to platform.

You get funded and the investors all put in and you get the cash within a week. Yes, sir. Wow. Wow. I feel it used to be months, like back in the day when they first started. Right. Well, and a little nuance that a lot of people probably don't know is that once you've funded a few deals on these platforms, and I'm sure it's true of most of them, that they can start pre-funding deals. So, you know, again, my $100,000 loan, I bring it to them and they say, okay, this is the 20th deal we've done with this guy.

We'll go ahead and lend the $100,000 so that we can keep it moving quickly and get him to closing, and then we'll go borrow the $100,000 from the investors in the platform. So there's some of that going on that a lot of people aren't aware of. of, you know, on your first few deals, they don't want to take that risk. But, you know, after you've consistently performed, you know, that's what allows them to move so quickly and being able to offer up that product. Yeah, that's awesome. Are you able to share kind of what typical interest rates and points are on those kind of deals? Yeah, it's pretty comparable to, you know, to your local hard money guy.

So they're 10 to 12% and two or three points. Okay. I know my first hard money guy was 10% and 10 points. That was a lot of points. Yeah, like he was, he was spendy. Glad I don't pay that anymore. I'm really curious to see as, I mean, these platforms are just coming out of the woodworks. And for those of you that don't know, I think what just earlier this week, they opened up,

I'm no expert on this stuff, but Title III, I think it's called, right, where non-acredited investors can go on these platforms. So, you know, these laws are changing, you know, almost every day and these platforms are popping up. So, you know, do your diligence. There's a lot of them out there. Not all of them are going to be sticking around forever, I have a feeling. But there's a lot more opportunity to go for that kind of non-conventional

borrowing method. Yeah. There's dozens of them and I definitively don't expect the vast majority of them to be around in a few years. But we'll see how it goes. We'll see how letting grandma invest in

deals vets out. And I suppose in defense of realty shares, to my knowledge, they're still only doing accredited. I'm not talking about anyone in particular, but I think Pandora's box might have just been open. We'll see how it goes. There might be a reason that hasn't been allowed since 1933, right?

There might be a reason. How long a term is you have then to pay them back? So we've done both six-and-month terms. I prefer to go for the 12-months because, again, with, you know, liking to do the Burr strategy, I like having options where we can put the tenant in and sometimes we need to season the property for a little bit, you know, meaning keep the tenant in there and and show a cash flows before we can take it to the bank and get that the cash out refi. Yeah. I know that most banks, it used to be six months. Now some of are doing 12.

They want that seasoning period between when you buy a property and when you refinance it. And I've run into that problem before where I was told six months. I waited six months. Applied for it. It went to the whole process a week before closing. They're like, oh, actually we just changed. Now we're 12 months. And so like when I do a burr, I actually like to go 14.

I don't know if not a lot of lenders like to do 14 months. But I like that because it gives me that two extra months just in case I have to go 12. On that same note, any of my private lenders, the friends and family pool, that sort of thing, I do a 13-month note with all of them for the exact same reason. I can season it for a year and a day, and by then I've already got the refi going and can cash out before the note expires. Yep, that's exactly right. And this lending that you're doing through the crowdfunding, it works, but if you're going to hold on to this and if you can't refi, it doesn't work. I mean, where are you going to get the cash to pay it back?

So, you know, for those people who are sitting listening, being like, oh, I'm going to use this for X, Y, and Z, you better know what you're doing. You better be sure that you're going to be able to pay that out in six to 12 months. So you have to, you know, the type of financing that you use has to match a strategy. And you better have backups. Better make sure that you can handle it. Absolutely. Yeah. So last question I have about the BIR stuff and then we'll move on.

Do you have any just final tips for people who are listening to this going, man, that sounds really cool. I want to burr a property. And what are your best tips for them to get started with that? Sure. So whether it's crowdfunding or hard money guys, to get the initial financing, you're going to have to have at least a couple of deals under your belt. So you guys have talked about it tremendously on the show and on the website that, you know, start with friends and family, pull the money together. There's so many creative strategies out there. So pull the money together, do your first couple of deals.

and then bring it to, you know, whether it's hard money or crowdfunding. So you can say, hey, here's my track record, right? I bought these couple houses for X. I sold them for Y. I know what I'm doing. I know my market. And at that point, they'll be a lot more eager to lend to you. And then, you know, on the backside, exactly what Josh said, that you really have to know what your backend strategy is and have at least one backup.

That, okay, you know, I've already talked to my lender before I even went into this deal, that my local, you know, X, Y, Z bank is willing to give me a mortgage on this. I'm pre-qualified. So once I've bought it and fixed it up and rented it out, I know I can get financing from them. And, hey, if all else fails, you know, I've got a rich uncle that'll lend me the $100,000 or have some sort of backup plan, right? Exactly what just said. Cool.

There you go. One of my last questions here is, where are you going? I mean, you know, I don't, I'm not going to ask you how much money you're making from your dozens of rentals, but what's the goal? are you going to get to some quote unquote freedom number, which we talked about in our Clayton Morris podcast, or are you going, you know, are you going to just keep going, you know, and do this for the rest of your life because you love it so much? Where are you going? Great question. In the near term in the next few years, yeah, we do have that freedom number. And we've been working towards the same freedom number for quite a while. My wife and I worked very hard to, you know, keep the expenses low and grow the passive income. And, you know, to get to that point where we don't need to do another deal. We don't want to. I do love doing it. I love fixing things up. I love making things better than new. So I probably will do this forever. The longer term strategy for me is probably to upgrade, well, upgrades maybe the wrong word, but move into multifamily. You know, and just it's the monopoly technique or, you know, the rich dad technique, right? You, you sell your four greenhouses and go buy a hotel. You know, that stuck with me for years. So that's eventually where we want to get to is we're buying these single families. Well, the market is really good for it. While it's a really desirable rental product. You know, and at some point, they'll appreciate and we'll sell them.

We'll go buy multifamily. And at that point, you probably, you know, you have me on the show again in 10 years and now I'll be doing the exact same thing, right, with these small multifamily and building them up and going to buy the 100 unit apartments or commercial space. You know, for me, it's just a never-ending game that I enjoy a lot. And I can't imagine never leaving it. Perfect. That's cool.

And on that point, like the whole Burr strategy, really all it is is what apartment investors have been doing forever. I mean, that's what a lot of apartment guys will do. They'll buy properties, fix them up, refinance them to get the money back out for their investors, and they hold on to them or they'll sell them five years later. And it's just, it's the exact same concept. You could do it from a single-family house all the way up to a thousand-unit apartment complex and everything in between. Yeah, we didn't even talk about it, but I just did that with a six-unit. It was my first, you know, a small commercial deal. The same thing we bought, it was vacant. It was very dated. Nobody touched it since the 70s. So, you know, we got a good price.

on it because it was vacant. We rehabbed all the units and tenant to, you know, put in tenants as soon as they were ready to hit the market. And what that final tenant just moved in last week. And we're already in the refy process. So yeah, it's, it's the exact same technique just with a little bigger numbers. And that's, and that's why I say. I mean, this game is just never ending. You can do it at the $20,000 house level, the $200,000 house, the $200 million apartment complex. You know, it's just a matter what level you're at at the game and where you want to get to. There you go. I love it. All right. Last question before we get to the fire round, I want to know about your quitting your job.

You said that you were doing medical sales for a long time, then you quit your job. Was that just off the cash flow and the flips, or how did that come about? Sure. So it was a little bit of the cash flow from the rentals were helping support it. You know, it was an incredibly stressful job. I mean, I was in brain surgery three, four days a week, dealing with life and death situations, you know, on call 24-7. So, you know, incredibly stressful job. and I kind of traded one stressful job for another some days. But, no, I mean, real estate is where my passion was.

I knew that's where I wanted to be long term. So I figured it made sense to jump in with both feet and run with it. So, you know, that's why we still do some of the fix and flip, you know, basically coverage of the bills while we build up the portfolio to get, you know, to get to that freedom number. Very cool. Awesome. Awesome.

Cool. Well, let's transition this thing, shift gears and head over to the world famous Fire Round. It's time for the Fireman. Now let's get to the fire round. Question number one. Oh, by the way, these questions come from the BiggerPockets forums in case you are not a regular listener of our show. You can go on to the BiggerPockets forums and ask questions from people that are far smarter and far better looking than Josh Dorkin. So, BiggerPox.com slash forums. All right. Question number one. Really? Question number one. Question number one. When doing a burr deal, does it make much of a difference what bank a person goes to to get the refinance? or do all banks pretty much do the same thing?

It really depends on how many deals you've done. If you're talking about your first deal, they're all going to be almost exactly the same. The rate might be slightly different, but if you're doing up to deal number four, any bank is probably going to give you the exact same terms. Awesome. Cool. All right. Question number two, using the Burr strategy,

if you were to go and refy, let's say with a portfolio lender, what type of loan is it? Is it a mortgage or a commercial loan? So generally, if you're going with a portfolio lender, you're getting a commercial loan. That means you're probably getting worse terms all the way around. You're probably getting a shorter amortization, right? They're spreading your payment over a shorter period of time, which effectively means you'll pay the loan off quicker, which is great news.

But your payment's going to be higher. Your cash flow is going to be less. You're also most likely going to have a balloon payment anywhere from five to 10 years, meaning that after, you know, let's say it's a five-year balloon at that point. in theory, you may have to pay that entire mortgage off all at once. And then you're probably going to pay a higher interest rate than going to your local bank. So they're the right tool in some situations. And if you've already used up your local banks or your conventional financing, it may be the only way to go.

But just be aware that it's probably not going to be as cheap of a loan to get. Yep. Nice. Cool. All right. Number three, when someone is doing a fix and flip, what are the options I have if it doesn't sell? Yeah, great question. So, and I would encourage everybody to always go in with at least two exit strategies. So, I mean, as, as you've heard, clearly, I like the strategy of putting it on the market both for sale and for rent. That way, if I find a good tenant, I'll go ahead and hold on to it and rent it out to them. If I get a good offer on the sale price, I'll sell it. You know, you could also go the lease to own route. You might be able to sell or finance if you have the means to carry the property for a little bit. You know, there's a lot of different techniques. It's good to have at least two going in or else it's kind of a dangerous. proposition. Yep. I like that. All right. Last question. If you have a rental in a different state, do you need to hire a property manager? Is that what you're doing with your properties down in Phoenix? Yes and no. So I've got the properties in Phoenix that I do use a local professional property manager

for. It's far enough away that I kind of feel the need to do that. I also have that that rental that I bought in Iowa. You know, back in college, I still hold that today. So I've managed that myself for the last 10 years. And it's all about putting in the right people. And, putting some terms in your lease, you know, putting in that they're responsible for repairs up to X number of dollars, or that you'll reimburse them, you know, if they need to go change a light bulb, you'll give them the dollar back if they take care of that themselves. So you absolutely can manage from afar, but just know that you could get caught in a situation where they may not be caring for the property in the way that you expect if you can't go at least drive by it once in a while. Right on. Cool.

All right. Let's close this thing up with the world famous. All right, the Famous Four, these questions are asked of every guest every week. And I know you listen to this show, so you know what's coming. Number one, what is your favorite real estate-related book? So I really struggled prepping for The Famous Four because I'm the librarian of my local RIA. Nice. And I love to read.

I'm responsible for hundreds of books on real estate. I mean, narrowing it down was really tough for me. And I really wanted an original answer for you, too. So first, let me give a quick shout out, an additional vote for investing in real estate by Gary Eldred. I think that's a great, you know, in-depth book. But I gave it a lot of thought, and I came up with the book on rental property investing by Brandon Turner. Wow. Wow. Not just to kiss up. Wow. I picked that book. I actually just read it a couple weeks ago, and I think that for newbies, it did a great job of covering all the bases

and giving really updated information on, you know, the options available to people. You know, so many of these books that came out in 2007 that, you know, talk about, oh, just go get a no-doc loan for 110% financing, you know, that's kind of useless these days. So I appreciated it. It was real and it covered, you know, most of the realistic options for new people. So I think it's a good place to start. Thank you. That's my new favorite guest right here. I was going to say, you know, that you are the first person to actually recommend one of the books. So I love that. That's great. Yeah, eat that, Robert Kisaki. All right. Favorite business book?

So again, in an attempt to come up with a fresh one, I mean, clearly, we've got to give Kiyosaki credit, right, Rich Dad, Poor Dad, Cash Flow Quadrant. If this is your first time listening to the show or just getting into real estate, you have to go read those books. So for my original one, I pick Eat That Frog by Brian Tracy. Great book. Yeah, so great book on productivity and efficiency and, you know, getting, not just getting things done, but getting the right things done.

That's one of those books I feel like I could, I should rerec. read every year because Eat That Frog has so many tips in there. It's amazing. Yeah. I love it. Absolutely. I just finished by the way. I just finished the cashful quadrant for the second time. So, because I read it when I was younger, but I just reread it and it's still just as amazing it was the first time. Yeah. It's hell. I mean, every time you reread these great books, your mind's in a different place and you take different info from it. So yeah, I reread that stuff at least once a year I'll do rich dad, poor dad. Yep, me too. Yeah, I love it. Cool. Perfect. Perfect. All right. What do you do for fun? So I have a wife and kids.

I've got two under two. Well, I guess I can't say it anymore. My son just turned two while I was down here in Miami for a conference. So spending time with the kids and the wife, we like to go out to the cabin, water ski. I like to go downhill skiing in the winter when I can and take my motorcycle to the racetrack once in a while. That sounds fun. Good, good, good. Cool.

All right, my final question of the day. What sets apart successful real estate investors from those who give up, fail, or never get started? I think the key is to take action every day. and persevere. You know, one of my favorite quotes is that everybody gets knocked down, winners get back up and top winners get back up quicker. You know, we're all going to have our ups and downs, but if every day, it's easy to take action and move forward when you're in a great mood, right? Everything's going your way. But on the day that you just got knocked down, that's the most critical day to get up and just do something, anything that moves you in the

direction of your goals. And I mean, it's going to bring you up, it's going to increase your optimism. And, you know, I mean, it's going to make you feel better in the short term, but it's also going to move you so much faster towards where you want to be in life. Cool. That's great. That's great. Well, let's close this out with, where can people find out more about you? Where can they lick you up? Sure. I'm happy to chat with people on bigger pockets, of course. I'm also on LinkedIn quite a bit. And they can also go to my website at go apex renovations.com. Perfect. All right, Ben. Well, thank you so much for coming on the show. We really do appreciate it. And lots of luck to you going

forward building up that portfolio. Thanks for having me, guys. Yeah, thank you. Take it easy. All right, guys, that was Ben, Walhood. Ben, thank you so much again for coming on. We do appreciate it.

A lot of fun, man. I know you were excited to have somebody who focuses on burr. Burr, yeah. I like talking about the strategy because it is my favorite thing to do. I mean, almost everything I've done in one way has been a burr.

I mean, pretty much everything I've ever done, other than my flips have all been Burr. So it's kind of talk about. But just to throw this out there, I mean, we talked about this in the show, but I'll say it again, Burr is very exciting, but there are some risks and downsides. I mean, especially if you can't get a short-term loan to buy a property and then you can't refinance it, you can get kind of stuck.

And so, of course, that's why you need to buy such a good deal that you get those options. You can sell it if you need to. You could, you know, hopefully refinance it. Maybe you could find another short-term loan by getting the best deal possible that really makes that important. Also, knowing up front, do you have the ability to get a long-term loan? I mean, what's your credit look like? What's your income look like and your debt-to-income ratio and all those things?

Make sure you guys look into that stuff also before you just go out and buy a property because you heard on a podcast, it was a good idea. Exactly. In fact, you should think about anything that you hear on a podcast. See on a website, read or hear from a guru. And before you do it, you should make sure that that is actually a good thing for you to be doing. Be smart.

Don't just take our word for it. Go out there and do your homework. So with that. I was going to say, and he mentioned my book. Oh, he did. Which people can get, I don't think I mentioned this, at biggerpockets.com, slash rental book. And if you have read it and you want to do me a solid, I could use some Amazon reviews for that. We could use some Amazon reviews for that. I think we're at like a hundred and something,

120, 30, somewhere in there. I got to beat Jay Scott. Come on. Oh, uh-oh. Uh-oh. All right. Let's get out of here. Guys, thank you again. This is show 177 of the Bigger Pockets podcast. Check out the show notes of biggerpockets.com slash show 177. And otherwise, hopefully we'll see you over on Bigger Pockets where you can connect and link up with guys like Ben, chat with him, ask him questions, you know, just learn, make deals, do business, you name it. So get on the site, set up a free account today at www.com. And until next time, I'm Josh Dorkin. Sign in off. 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,

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