BiggerPockets Real Estate Podcast - 192: Income from Cash Flow but Wealth from Appreciation with Russel Brazil

Episode Date: September 15, 2016

“I can’t invest in real estate — everything is too expensive” is a common statement used by newbie real estate investors across the world. But is it true? Today on the BiggerPockets Podcast, we’re excited to dig in on the topic with Russell Brazil, an investor from the DC area who has a unique perspective on the wealth-building power of appreciation (AND cash flow!). In This Episode We Cover: How Russell got started in real estate Where he invest (and the prices in that location) Why you should fix your personal finances first Where to cut expenses The snowball effect that happens when you’re not living on the cashflow How the numbers look on his first properties What CapEx is (and other expenses you should be aware of) How many rental properties he has today How he broke even with some of his properties A discussion about appreciation Thoughts on investing in condo units Why he’s planning to invest in residential complexes Why he doesn’t do much flipping anymore How to find investors and partners Advice for new investors Tips for taking advantage of low interest rates And SO much more! Links from the Show BiggerPockets Youtube Channel BiggerPockets Webinar BiggerPockets Bookstore The Simple Action No One Does That Will Make You A Millionaire (blog) BP Podcast 014 : Cash Flow, Creative Finance, and Life with Ben Leybovich BiggerPockets Forums Books Mentioned in this Show The Book on Investing with No or Low Money Down by Brandon Turner The 4-Hour Workweek by Timothy Ferriss The Big Short by Michael Lewis One Up On Wall Street by Peter Lynch Tweetable Topics: “If you want it bad enough, you’ll figure out how to save money.” (Tweet This!) “Cash flow is how I pay my bills, while appreciation is how I build wealth.” (Tweet This!) “Debt is good. I love debt.” (Tweet This!) “The best way we can mitigate risk and make money is by having market knowledge.” (Tweet This!) “Real estate is a ‘relationships’ business.” (Tweet This!) Connect with Russell Russell’s BiggerPockets Profile Russell’s Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 192. Hsu, ow! He totally just sneezed so hard. He hit his face into the microphone. 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 height, you're in the right place. Stay tuned and be sure to join the millions of others who have been able to learn. benefited from biggerpockets.com.

Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin. House to the Bigger Pockets podcast here with my co-host, Mr. Burrandon Turner. What's up, man? You know, I'm doing fine, but the real question is, how's your face doing? Oh, yeah. I just, I just sneezed and, like, totally whacked my face.

Yeah, and the best part is I had started recording. I got video and audio of you sneezing and then smithes. bashing your face into your microphone. That will go at the end of the show in the outtakes. If you're not watching this on YouTube, you should go over to our channel, BiggerPockets, YouTube.com slash BiggerPockets and watch the show. Or go to our videos page,

biggerpockets.com slash videos and check it out. Amazing. I'm sure it was funny for everybody but me. Yeah, it was good. It was good. No, besides that, it's going to be back. I was in Boston for my brother's wedding. I didn't even ask.

I know, I'm telling you. It was the most amazing. There was a lot of stories. This was the most, I'm not going to tell the whole story because it's really long. But let's just say the bride and groom left and then at the end of the wedding had to come, a reception had to come back because they did have their stuff, left again, got in a car accident. It was like everything that could go wrong went wrong while they tried to leave this wedding. It was like they could not get out.

And then, yeah, but we did hear that being married is the greatest thing. Yeah, I did get a text and being married is the greatest thing ever. So happily ever after. All right. So it worked out. Perfect. Cool, man. Welcome back. Welcome back. Yeah, we, you know, interesting show today. You know, some good knowledge as always. Good guy. Yeah, he's investing in a market that's a little different than what I do and very different from like, you know, the low income stuff. He's doing a little bit higher end stuff, a little more expensive, doesn't have quite as much cash flow as I might want per unit. But it's a different strategy. I think you guys will like it, especially if you're in a market that's a little bit higher priced than what you hear me talking about or whatever. So you mean everybody, except.

There's a little of Detroit. Yeah, except for it. Exactly. It's been a while. You've not ripped on D-Town in a while. Yeah, you know, it's part of my schick. It's part of your stick. Yes, yes.

All right, speaking of schick, we've got today's quick stick. All right, guys, today's quick tip. We've been growing our publishing business. We've been growing our publishing department. Kim, our head of publishing is rocking and rolling. And we've got a, you know, a bunch of really cool books in the lineup to come. But we're always looking for new ideas, always looking for new author. So if you are an author or you want to be an author, or want to be an author, you're an amazing writer.

And are an amazing writer. Thank you. Are you going to do this or am I? I'm cutting you off. Come on. We are. We are looking for new. No, take it. Right. We're looking for new authors. So if you're interested, go to biggerpockets.com slash author. That's biggerpockets.com slash author. And there's a form there. Just fill it out. Honestly, I don't even know what questions we're asking currently, but on that form. But just go in there, fill it out. And Kim, if there's any interest, will be in touch and can help you out and to see if this makes sense for us to publish your book. So, BiggerPockets.com slash author. And for those people who don't know that, we publish books, you can go to Biggerpockets.com

slash store and check out all the books we have for sale there. Slash bookstore. Stor will get you there too, but bookstore is prettier, I think. We had a new graphic designer, though, officially coming on. So we're going to make everything look prettier. That's pretty fun. Yes. Yes, yes. Yeah, lots of changes happening here at BP. It's exciting. We're growing. It's fun. Most investors spend all their time talking about their high-level returns. But that's not the number that actually matters.

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I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place. is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a

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And that comes down to three numbers, occupancy, delinquency, and net promoter score. If those numbers slip, your income slips and your trust slips too. And most PMs don't hold them to performance standards. They focus on activity, not outcomes. Mind is different. They obsess over the metrics that actually grow your cash flow. Go to mind.co slash show me to see how mind performs and get a month of management for free. Because if you're going to hire a property manager, hire one that manages your investment like an investment. Guys, this is show 192 of the Bigger Pockets podcast. You can check out the show notes at biggerpockets.com slash 192. And however, you're listening to the show right now, we'd love for you to help us out. If you're on YouTube,

give us a thumbs up. If you're listening on iTunes, Stitcher, SoundCloud, you know, subscribe, leave us a rating review. Those things really help us climb the charts and do well. The more people, the more listeners. Actually, we have consistently been in the top 150 of every podcast on the planet. We've been averaging about 130, 140, which is cool. Top 10 of business continually, which is awesome. Yeah. Yeah. Yeah. Yeah. So it's been great. Thank you to all of our listeners for your support. We really do.

You guys. You guys. You guys rock. Thank you. You do. All right, let's get this thing going. Before we do, you have, you have a mark on your forehead where you hit that. That's like a red mark.

Yeah, you have a red mark. It's really funny. Yeah, that's a pimple. No, no. Thank you for making me feel self-conscious. I appreciate that. I can see the microphone like embedded in your forehead. Right.

Yeah. So you spent the last three minutes. Staring at your, yeah. Thinking about how you can say something about this. Congratulations. Well, You're never living this down. I'm really proud of you, Brandon.

Thanks. Yeah, thanks. Yeah, thanks. Yeah, you've made it. All right, guys, today's show, today's guest is Russell Brazil. I like the name, Russell Brazil. That is cool name. Russell's a moderator on Bigger Pockets.

It was a real estate investor in the D.C. Rockville, Maryland area, I believe. And, you know, he's done buying a whole flips. He's an agent. And he's an agent. So he brings, again, another unique perspective that we wanted to share with you. And he's got a really cool point later in the show. We talk about the difference between inexpensive properties and expensive properties and the ratio of repairs to those properties.

We talk about toilets. But Russell makes a really interesting point about the cost of repairs on expensive versus less expensive properties, which is just something to ponder. So listen up for that. Otherwise, let's get into this. What do you think? Let's do it. Let's bring Russell in.

What's going on, Russ? Russell, welcome to the show, man. It's good to have you here. Hey, it's great to be here. Yeah, it should be fun. We like talking to our moderators. Russell here is one of our moderators on the Bigger Pockets forums. So a lot of you guys who are listening to this probably recognize the name if you hang out in the forums. If you're not hanging out in the forums, Russell, tell people to hang out in the forums.

Hang out in forums. It's a great place to be. And if you're angry, someone deleted your post, it was, you know, probably Brandon Armendi or not me. Not you, not you. No, you're never mean to people. No, you are one of our great moderators, so we do thank you for that. You're part of what makes the community over on the PP Forum so awesome. So thank you.

Cool. Appreciate. Yeah. Do you have a question, Brandon? I don't. I just wanted to say, thank you to our moderator. Hey, you guys, that was today's show. Thank you so much for coming along.

Now, Russell, all right, man. So you're a moderator. That's amazing, but you are a moderator because you are an active real estate investor. Tell us about it. How did you get started? How did you decide to become a real estate investor? So I started, 2003, I got out of school. I became a licensed agent at the time, and I was just working part-time in real estate, full-time in healthcare.

And, you know, during 2003 through six, anyone could make money being an agent. Like, you're a complete idiot and you could make money, which was a bad thing because you've never learned how to do things right. Yeah. So at the time, you know, I always knew that real estate was a great way to build wealth long term. But the problem I had was nothing could be rented for more than a cost to buy it. at the time. You know, and I kept in the back of my mind, I want to own my own my own home at some point. I'd like to own some rental properties, but the numbers just did not work. Fast forward to 2008, the market just starts collapsing. Everyone's scared. They think it's the end of the world.

And somewhere around 2009, we started hitting an equilibrium where suddenly in my market, houses would at least break even. They could be rented for the cost of their mortgage. So I tried as hard as I could, and even being a part-time agent at the time, was really hard to buy a property. And then as the crisis continued, prices continued to drop. And suddenly, things could be rented for more than the cost the mortgage them. And so it was 2010. We're not quite at the bottom of our market then. And I just started getting as aggressive as I could trying to buy. Everything you tried to buy at the time had 30 cash offers. It was just so hard to compete without, you know, having cash. And then the government came out with that $8,000 refundable.

the tax credit at the time. And I just thought, this is too good to be true. So me and my wife were not married at the time. So we're able to each buy a property. And we finally just bid as much as we could to acquire a property each with the goal of turning one into an investment at one point and living in the other, you know, eventually. That's how I got started. Nice. So where are you actually from, Russell? Where is all this taking place at? I live in Rockville, Maryland, currently, which is a suburb of D.C. At the time when I was jumping in, I was actually living in the district. Okay. Nice. So that is, I mean, I'm not real familiar with, I don't, I'm on the West Coast, like the opposite. That would be where the left coast. Okay, yeah, I know that. What's the market like

there? I mean, like, what are price ranges? The Washington Monuments. Yeah, yeah, yeah, thanks, Josh. I've heard of those, you know. Oh, okay. Just make it true. You know, White House Capitol building. Yeah, whatever, those things. So what are, besides the White House and the Capitol, what are prices for properties going for? Like what typically are we looking at? So currently, currently our median price point, depending what source you check is either 450,000 or 500,000. So we're one of the top five, six, seven most expensive markets in the country. Okay. So yeah, well, you're not in like, you know, you're not buying houses for $12,000 here. I mean, this is a, what do you want to call it, high end maybe, or just like high value area? Expensive. Yeah, definitely high value area. However,

you know, one of the things that always drives me nuts is when people say it's too expensive to invest here. Sure. Because there's plenty of low cost properties as well, as I think there are in any market. Yeah, and I want to talk about that. Yeah. Yeah. So, I mean, you look at San Francisco, people think that's too expensive, but it's close to Sacramento and Stockton, California, which are, you know, reasonably priced markets. DC, the further you move away from the city's core, prices, you know, get much more reasonable. And conceivably, if you live in a high cost area, you should be making more money as well. You know, a mechanic in D.C. makes more than a mechanic in Edmund, Oklahoma. Sure. At least hopefully you do. It was hopefully, yeah. And for the most part, I think that generally, a lot of people just use the I live in an expensive location as an easy out to not put in the work needed or to not feel bad about not investing. Right. So, oh, yeah, I haven't invested for the last 10 years because I live in L.A. or I live in San Francisco. Well, I think the difference is also that, you know, it does if you're going to be putting money down and you're not getting a partner or anything like that. I mean, it will typically require you to get more cash, right? So, you know, I mean, to buy a house where you are, Brandon, I need a dollar. got 20% down. Dollar in a pack of smokes and that'll get you it. The problem is people don't want to save.

Brandon just had an article about this. You know, Americans, it's hard for Americans to save for whatever reason, but I don't know why we think if we can't master our own personal finances, why we think we're going to be good investing the little money that we have. That's good one. Yeah, it's awesome. And I think that's one of the big tenants that we try to share through BP is like, you know, you do need to be financially, fiscally responsible before you start doing this.

like, hey, I want to get rich, but my house is not in order. All right, well, get your house in order. Like, you've got to figure this out. You've got to learn how to budget. You've got to learn how to save. You've got to learn to be financially responsible. Once you've done that, now you're in a position where you can start to make moves. So, like, really quickly, I don't want to go to beginner. But like for those people who fall into that bucket, you know, what advice would you give them, Russell? I mean, I think if you just try to cut out all the extras out of your life that cost money that you don't need, I haven't had cable in 10 years. I'm certainly someone that can afford it, but I just think that dollar can be put to better use. You know, don't go out to eat all the time. You know, for a long time after I got out of college, I was living in a $400 a month studio apartment so I could pay off my college loans, pay off my credit card debt, start saving. You know, if you want it bad enough, you'll figure out how to save money. I love it. Yeah. And I think that's a huge part of it is, do you want it bad enough? Because it's going to take sacrifice if you want anything great. You know, it's going to take something. So, I mean, is it the pleasure right now? having that new car, that, you know, eating an $80 dinner, 20, 30 nights a month. I mean, people do that and they'll drop thousands of dollars and stuff where they can

potentially save it. Now, if that's more important to them than working, you know, for the next 40 years of life, then fine, go ahead and do that. Yeah, if that's what someone wants to do, there's nothing wrong with that. But to say, I don't have any money to invest. If you are, you know, spending all your money, well, then you just priorities are not in order. Yeah.

I will tell you, like, of the people that I know and have known, the place that I actually see people spend the most money where they can cut it out the easiest. They may not want to, but it's drinking. It's liquor. It's, absolutely. You go out to a restaurant, like, you know, you go out to a restaurant, you know, 40, 50 bucks with your spouse, you add in alcohol, now it's 100, you know. So like you cut the booze out and all of a sudden, you know, you're in a position where

you've got a whole lot more money in your pocket. I mean, there's so many different ways to do it. Awesome. All right. So you and your wife went and, you know, it's 2010. You said, hey, we're going to go both put money down and pick up a property. How did that go for you? Did you guys actually end up buying investment properties each of you?

Yeah, so we each bought one property. At the time, the $8,000 refundable tax credit from the government. So when our tax returns came around, we both got something like $15,000 tax returns because of that extra money the government was giving out. So then we took that and we bought our next property. That became the down payment for the next one. At the time, Fannie Mae had. a program where you could put 10% down on an investment property, which no longer exists,

unfortunately. We saw that opportunity. We knew that we just had to take advantage of that opportunity while it exists. And we did. And then, you know, suddenly we had eventually moved into one property, turned the other one we had into an investment. So we get two properties of the cash flowing. So we're smart enough not to spend our cash flow and let that build up along with our normal savings. And suddenly when you have income producing assets that are producing that cash flow, if you're not spending it,

you can save quicker and quicker and it just begins to snowball. So then we took that. So we bought the next one, then the next one, then the next one. Well, so real quick, I want to jump in there because you said something, you said you're smart enough to know

not to spend your cash flow. Now, that is something that I was not smart enough to know when I got started. And some people can't necessarily do it either. And maybe they can't, yeah. And there's a lot of, but I think you bring up a very valuable point there in that like when you're spending your cash flow, you can't save it for the future, right? So my goal was I wanted $3,000 a month and I'm quitting my job. I got $3,000 a month in cash flow. I quit my job. And I'm like, all right, I'm done. Four hour work week. Here I come. And then you get a wall. Yeah, yeah. And I'm like, I can't, exactly. I can't buy. I can't save. I can't do anything. I'm just in this position where I'm quote unquote retired, but I can't progress very much faster than this. And, you know, I think that's a good point is if you can continue working, continue making money, not leave. living on the cash flow, not spending on your cash flow. It does snowball, like you said. That's cool. I like it. So let's talk about these properties. What are the, yeah, I want to hear the numbers on

the first couple of properties. So the first property we bought, it was, I think it was listed at 260 and we had to bid $2.90 to get it. And then our primary residence was pretty similar numbers. And I was able to rent that for $2,000 at the time. I think our payment was like $15.50. So we're making like $400 a month before cap-backs and repairs. Sure. And for our market, at a higher price point, you know, this made sense. You get a lower price rent ratio in some of these higher income areas, but you get to take what the market gives you.

And I think that's something, you know, a lot of us ignore. We continue to look for the perfect investment and never buy. Well, you know, when I was growing up, my mother invested in real estate, too, and she always told me, you know, this is growing up in Boston, and that you should buy something that breaks even, and over time your rents will grow. And though I was getting a little bit of cash flow here, you know, after owning it for six years now,

my rents have grown $400 on that. And after refinance, my payment's gone down. So now I'm cash flowing $900 a month on that property before accounting for repairs and CAPEX. Well, first of all, what does CAPEX mean when you say that? For those people who have never heard that term before, what does that mean? So CAPX is short for capital expenditures.

What that means is something that's more than your little fixture toilet leaking. It's a major repair. It's replacing the roof, replacing the HVAC, replacing the water heater. Actually, those three things, if you own a property long enough, the three things, you're probably going to have to replace at some point. Nice. Well, beyond that, especially for the new folks, like, there are other expenses too, right? I mean, you have property management, you have vacancy.

I mean, you know, a lot of newbies will buy a property. Let's say you had the, you're collecting $2,000 a month. You know, if their mortgage insurance and taxes were right about $2K, they're like, yeah, I got a, you know, a break even property. That is not true. That is not correct because you will have vacancies. You will have CAPEX. Absolutely. You will have management.

Even if you're managing it yourself, maybe at some point somebody else will have to come in and manage it. You're going to have to account for that, right? So what else? I self-managed, so I do get, you know, juice my returns a little bit through that. You know, every property is going to have some amount of repairs or CAPEX. But one problem I often see with new investors is they analyze this so much in their account. So they put so much of this rent towards a theoretical repair. And suddenly nothing makes sense as an investment in a spreadsheet when in reality these things do.

And I always try to tell people, try to predict the repair percentages for a particular property, is a fool's errand. As any of us know that owns multiple properties, we have properties that have almost no repairs, and we have some properties that have a huge amount of repairs. And trying to apply a general rule to one individual property, it's just impossible. We can apply these rules to a portfolio of properties. But, you know, I try to tell people not to get stuck too much, get as much cash flow as you can and understand that some of that or even all of it could, you know, disappear with your repair budget. Yeah. Yeah. And I think that it is tough, right? because some properties, I mean, I have a property with built in like 1902.

It's a five unit property. And I've had, I think, one repair expense in four years. I mean, this property just does not have problems ever. But I have other properties that were built in the late 70s or 80s that are newer properties that I have $200 a month, I feel like, continually in cap X and repairs. And if you were trying to guess which one of those would be, it'd probably be the older property you would have thought would have had more repairs. So there's just really no telling which property is going to be that awful one that just

kills your portfolio. Sure. But I think there still is obviously, I mean, you need to account, like you said, you have to know that you are going to have repairs. You could wipe that completely out. I mean, personally, I generally figure, I don't know, maybe 5% on a property. I kind of set aside something like that, knowing that, yeah, that's more portfolio-wise. I'm still going to use the number in my calculations. But like, I know that this property might be 10%, that might be zero.

But on average, I probably average around 5% for repairs and probably another 5% for CAPEX. in general. I always that's my story. And then, you know, another thing is investing in a high-income area like D.C. or Boston or San Francisco is that as you get these huge rents, my most expensive property rents for $2,800. So my repairs are not a large percentage of that. Yep.

Because say if I need to replace a toilet, replacing a toilet in my $100,000 condo, it's going to cost the same amount in my $400,000 property. It doesn't cost four times as much. It's good point. As you move up in these price points, the percentages, at least for repairs, goes down significantly. That's a good point. Yeah. Yeah.

When I say 5%, I'm talking about my kind of properties and my price range in my area. So then people are like, oh, Brandon said 5%. So they start plugging in that number everywhere. It doesn't always work out that way. I mean, for CapEx, I typically would do more of like, you know, maybe $100 a month, $150 a month on a single family house. But again, it might be depends on the age of the house, depends on what condition was in when I fixed it, all those things. Well, yeah, did you fix it? I mean, if you're buying a house that you didn't fix, you're buying a property that you haven't put any money into.

You better have a much bigger budget because odds are probably pretty good unless you've bought a brand new property that something's going to have to be updated. Yeah, and I try to personally buy rent-ready things, at least now, you know, in the early days I bought a bunch of dumps. And it takes more capital up front, right? Because that's money you need right now to replace an HVAC or replace a roof. If you're buying something that's rent-ready and good. condition, you're financing the cost of those things over 30 years instead of needing that available capital right now. So let's talk about this snowballing, right?

So 2010, you got these two properties. Then you took the cash flow, you put it up for another one. You know, it's been six years. How many rental properties do you have today? So I'm actually down to six. I was at a height of 14 units a couple years ago. It was 14 units over 11 properties because one of them was a multi. And what I started to recognize was there's certain properties that I didn't want to deal with.

I had a couple low-poss properties that had low-income renters. On paper, the returns would be great, right? And one that was 77,000 rented for 1,300, almost 2% rule, which people say you can't achieve in an expensive metro area. But what I found was, after I accounted for the fact of, you know, non-paying tenants, tenants trashing the property, go in the court. I found that the return was imaginary. Those properties performed much worse than, you know, my $400,000 single family, which had nowhere near the sort of price rent ratio. So I started getting rid of all the crap from my portfolio.

And I trimmed down. I've been trying to raise capital because now my next goal is to scale up to, you know, small commercial, small apartment buildings. And I find that even though, you know, I've been trimming down, you know, I have less cash flow coming in because I went from 14 units down the six, the amount of headaches I have have gone considerably down because now I'm only dealing with tenants that always pay their rent on time, maybe take care of minor repairs themselves. You know, I get less phone calls. Yeah. Less, you know, I'm almost, you know, I haven't been in housing court in like a year

and a half now. Oh, that must be nice. Yeah, it's fantastic. Oh, it's such a, I mean, it's a great point. I mean, I've been there and it's a nightmare. It's a nightmare. And, you know, Listen, I think some people are built for it. I think some people love it, love it, love the challenge, don't mind the high turnover, don't mind, you know, the chaos, housing court, evictions. But they really do become part of the picture as you are in the lower income. I mean, as good as you can screen, as well as you can do that, you know, it's still almost inevitable. Not guaranteed, but almost inevitable.

So, yeah, I mean, so you're, all right, so you're getting rid of your headaches and now you're shifting, right? So your goal now you're saying is to think about small commercial apartment buildings. Before we go there, you've got the six units. Are those houses or those condos? What are those? So I've got two condos, three single families, and one townhouse. Okay. And my townhouse, you know, it doesn't perform great, but that's the one I brought with

Home Path financing. So it's only 10% equity in it when I bought it. So I'm just, even though it doesn't perform well, you know, I'm just into it for so little money. And it's in a generally higher income area that just makes sense to hold on to it, even though realistically, after I account for repairs,

I'm really just breaking even on it. Okay, so you are at least break even after everything else. Okay, so you're break even, you've got this property, you're barely in it. Your reason for holding onto that is, is what, to pay off the note and have the value of the asset?

Are you accounting for appreciation? Yeah, I'm definitely accounting for, you know, hoping for appreciation on it. I paid $2.30 for it in 2011, worth about $2.95 today. So it's appreciated a good amount. And when you consider I was only into it for $23,000 plus closing costs, you know, I've like tripled my money on it. And while we won't get the same sort of appreciation levels we've had in the last five or six years bouncing off the bottom, it's probably in an area that should outpace the inflation rate. In theory, you know, we'll see. Sure.

Nothing is guaranteed. Yeah. Well, and so let's talk about that. But, you know, the appreciation, you know, a lot of times people have heard on the show here. We've had guests who say, you know, never play appreciation. And other guys, you know, they do play a little bit of appreciation. So where do you fall in that line? What is appreciation, like, is it good, is it bad?

Is it evil? How do you feel? So I always say cash flow is how I pay my bills, but appreciation is how I build wealth. We all went through this traumatic experience almost a decade ago of prices dropping, you know, 50, 60, 70 percent in some areas. And a lot of areas have bounced back, not every area. But I don't think that we should ignore a century of sound real estate investing principles because of what happened 10 years ago. Now, people think when I say I invest for appreciation, they think that I'm $500 negative

cash flow on some of these properties. My worst property after accounting for repairs and that such breaks even. I've got properties that my three single families cash flow before CAPEX and repairs, the cash flow at $900, $900,000 a month. So it's not an insignificant amount of money, but I own them because I believe that they will go up and value over time. Gotcha.

Okay, so you're playing on the, you know, and I don't want to misquote you, but the worst case scenario on break-even after everything, best-case scenario, but you're not accounting for, again, you're not accounting for management in there, correct? Correct. I self-managed, so I juice my own returns. Okay, okay.

So, you know, again, to somebody, a newbie, like that property that Russell's got that is break-even, if he's got to pay for management, he's got to account for an extra 8, 10, 12% in cost, right? So where I'm getting something like 5% or 6% cash on cash, you know, realistically after those things, if someone's had property management on there, that might shrink until 3% or 4% cash on cash return, which when you compare that to the market, right, that cash flow is what a safe paying dividend stock would be. But you get the other benefits of the loan getting paid down.

Oh, yeah. It's not just one perk here. Yeah, exactly. Yeah, exactly. And really, the ability to lock in debt right now at these low interest rates, I think that's the inefficiency in the market right now that we should all be, you know, trying to take advantage of. What do you mean by that?

I mean, to be able to borrow at 4% to buy an investment property, Like, that's insane. Yeah. The guys in the early 80s would kill for what we have today. Yeah, I think in five or ten years, when we're back to a much normalized economic environment, I think everyone's going to be looking back and thinking, man, I should have borrowed one, two, three, four, five million dollars at four percent. You know, there's always opportunities in the market. And I think the opportunity right now is our insanely low interest rates.

That doesn't mean just borrow for the second of borrowing, you know, buy a property that's cash flowing and, you know, have someone else pay down that debt for you. Because at the very worst, if they never go up in value, whatever debt you've accumulated, well, you know, owning two, three, four properties and a major metro area can turn you into a multimillionaire, even if they never go up in value if you hold them to the end of that note. Yeah. Yeah, I mean, like, so I talk a lot about in the book on rental property investing, I talk about there's like the four wealth generators, which. which are like, you know, there's cash flow, there's appreciation, there's the loan getting paid down, and there's tax benefits. And so, like, what's cool about rental properties in general is that you get all four of them. With flipping you don't, with wholesale you don't, but with rental properties, you get all four.

So like you said, imagine the property, you don't get appreciation at all nothing, but you still get the potential cash. Okay, let's even get out that one, right? Let's say no cash flow breaks even every month over the next 30 years. And it, you know, doesn't go up in value at all. But you spend a million bucks on it. 30 years from now, it's now worth a million dollars because the loan pay down alone potentially would make you a millionaire.

I mean, obviously, that's a simplified thing. But if you put the 20% down, you know, in this hypothetical, right? So you put 200K down and it's worth a million. You've not made a single dollar in profit. You've actually made an $800,000 gain 400%. Exactly. And if you can't borrow at 4%, you know, I'm estimating. I had someone just close a deal at four and a quarter.

But if you can't cash flow at four percent, then you're just, you're looking in the wrong areas. In fact, I don't know anywhere that wouldn't at least break even in my market at that, you know, at those rates. Yeah, yeah. I know we were going to talk about condos, right? Yeah, because you mentioned you buy condos. Josh gives condos a hard time often. Yeah, Josh hates condos. Oh, you know.

I do not hate condos. Like everybody likes to put words in my mouth. Stop telling me what I like and don't like. I love condos. Condos are the best. They're the best because I like them. Why? Condos are fine.

What do you like condos? I currently have two condos. I've owned three other ones that have sold off. Condos in my market provide good cash flow, much better percentage compared to the single families. Condos in my market, obviously not all of them, but there's a number of them that meet the 1% rule that are in, you know, low risk areas. So if you're hitting the 1% rule, you know, you're going to cash flow a decent amount. I think my cash flow off these. And again,

I self-manage, but they're between 15 and 20% cash on cash before accounting for repairs and that stuff. And in my condos, I have almost no repairs. I think I spend roughly $100 a year on each condo in repairs, which is, you know, nothing. Yeah. And you got to understand what are the risks that come with investing in condos? Am I going to get hit with a special assessment? Or they're going to limit the percentage of renters in the unit? And you just have to do your due diligence. You have to understand the risks that come with it.

And market knowledge is the biggest way to mitigate risk. So you learn what buildings work, which buildings tend to have special assessments, which ones don't, which ones have huge reserve funds so that you're not going to get. hit with a special assessment. And you know, single families have special assessments too. It's called the roofs leaking. Both of them have huge unexpected cost that could come. It's just you're a little bit more in control with, you know, a single family versus a condo. So and with the condo, I mean, look, I have no, I think condos are great. I think it's important for somebody who, who doesn't know what they're doing to not have any false sense of hope on a condo. And I think that's what you see

the most often. Condos seem to be cheaper, seem to be easier to a lot of people, and they negate things like their HOA dues. You know, oh, whoops, they negate the special assessment. You know, they negate exactly what you said, the possibility that, hey, rental percentages are X and I just bought the last condo, which, you know, oops, I can't rent it out now. I'm in trouble. I mean, there's a lot of things that you need to know and understand before you jump in and get that condo. But yeah, I mean, like, at the end of the day, the HOA maintains everything outside those walls, the four walls, right? So, you know, if they're financially running their HOA appropriately and they have reserves, you know, in theory, those special assessments should be mitigated. So yeah, it's definitely

something good to look for. And definitely, you know, I find that the smaller condo buildings, like, you know, five, six, ten units, those are the ones that get in the financial hardship where you're probably going to get a special assessment. If you're buying into this condo project that has 400 units. They typically have millions of dollars in reserve funds to take care of these big things. So I don't buy in small units, small complexes, you know, and I look for where that ratio is really going to work. I look for low condo fees.

You know, obviously something has $700 condo fee that's $150,000. That's not going to work. You know, you've got to keep the condo fee at a reasonable amount at a reasonable growth amount. And also you're going to understand you're never going to get rich owned in a bunch of condos, unless you own hundreds of them. Because while they do offer decent cash flow, they're really not going to go up and value the same way a single family will.

Unless you bought him in 0,8,09 in Miami when they were selling for 100 grand, and today they're selling for 7. And they're more sensitive to economic conditions. They're easier to go down in value. Because they were selling at 700 back in 2007, dropped down to 100. And now they're back up.

Yeah. So get out while you're ahead of yourself. I guess. Yeah, condos. That's how I kind of see a lot of condos. They seem to swing, at least in my limited experience working, like, you know, seeing them, they seem to swing a bit more than single families. I feel like they're the first to drop them in value. They're also the first to maybe start going up. Have you found that true in your area? Yeah, I think that's a great fool of thumb. Yeah, they're definitely, they go up faster and they go down faster than other asset types. You know, the other thing is, on my condos, I have a lot less vacancy. And that's because a tenant will move into a condo any day of the month. Because to them, it's just another apartment. When you're trying to fill a single family, people only want to move in on the first. But I can fill a condo in the third, the 10th, the 15th, the 21st, whatever. So even though I have higher turnover rates,

I have lower vacancy rates in my condos. Well, there's also more responsibility that comes with renting a house than renting a condo, right? The condo, you just live in the walls, right? The house, you kind of got to take care of, you know, probably got to take care of the lawn or whatever else, you know, that there is. So, you know, it's just a little, a little bit more work.

So people are, you know, think about it a little more before they do it. Yeah. Cool. All right. So we got these condos. We got the single families. You got this townhouse, which, you know, for all intensive purposes, is a condo as well, right? What else is going on?

I mean, you're looking to shift into commercial and bigger apartment buildings. Why the shift? What's your goal? What's the plan? So my goal is to lock in a large amount of debt and to scale up. and, you know, commercial buildings really allow that. And when I say commercial, I mean residential, because I don't want to own office space.

You know, I understand the residential side of things, which is completely different. So when I say commercial, I mean a residential apartment building. I want to scale up to something, you know, maybe like what Brandon has, you know, 20, 30, 40 units. Waldo? Oh. Or that one.

I have nice properties. Come on, come on. You know, the problem I'm having is, I think, the same problem, a lot of first-time, you know, commercial apartment building investors are finding is that, you know, the prices have been bid up so much on them. Cap rates are so low, locating one that makes sense or locating one that, you know, is in bad enough condition that you can turn around is, you know, it's more challenging than just picking a simple, single family to buy.

Sure. So, you know, I'm expanding outside of my own market for that search, but I'd like to be within, you know, quote-unquote driving distance. And what I mean by driving distances, someplace. second drive in 10 or 12 hours, which, you know, gives me a large area because... That's like a third of the country. Yeah. Well, you know, I'm pretty much looking from like South Carolina up to New Hampshire.

So most of the Eastern Seaboard, because I'm not someone who I want to see my property. I want to be able to go to it and touch it. You know, I don't want it to just be something that exists in, you know, an account online buying some Turinkey property I'm never going to see. I'm hands-on, so I want to be able to drive to it and see it. And the other thing is, since the prices on them have been bid up so much, and we're sort of, you know, are we near a top of the market? It's an important, impossible to say.

But commercial assets are more susceptible to economic downturns. So we'll see if it's something I can acquire. I'll set a time limit. If I can do it, great, if not, then I'll just go back to my strategy of acquiring, you know, single-family homes in my area. Yeah. Yeah. So, and it's something we've heard a lot. I think you're not alone in saying that, you know, it's, it's been really hard to find decent commercial deals, decent apartment complexes. I know, Brandon, you've been shopping. I know a bunch of other folks that we know have been chopping. And they're definitely few and far between and a lot more difficult to come by these days, I think, for all the reasons that you said. So, you know, obviously lots of luck on that. And that's great. So you, beyond buy and hold, you're also a flipper, I understand. Yeah. Are you house flipping as well? Yeah, I mean, I do the occasional flip.

Probably been about a year and a half since I did my last one, but I was doing one to two a year before that. Early ones were, you know, very poor. Yeah. I think I lost money on my first one, broke even on my second one. Why did you, what was the mistakes or the problems in the beginning that made you not do it so well? And how did you improve that? My largest mistake, and it's one I continue to make.

And it's one of the reasons I'm trying to shy away from flipping is I'll look at something in a flip and think, I'm not going to pay a contract or $1,000 to do that job. I'll just do it myself. And then three months later, I get to it. So the last flip I did, I think I held the property for nine months. I had self-financed it. So, you know, I don't have to worry about that hard money costs. And this is why I don't borrow hard money is because I'm slow when I do flips.

Yep. And, you know, I mean, that's definitely a tip to people is don't do the work yourself. Just pay someone to do it. They're going to do it better. They're going to get it done quick. But it's one of the reasons I'm a bad flipper. You know, I work with, you know, I have clients as an agent who were flippers, and I try to shift over to that because I can make half as much as they make flipping a property being the agent on it. Yep.

With a whole lot less risk and a whole lot. Oh, yeah. A lot less time, yeah. With no risk. Yeah. Me and Ben Laboravich were just talking about this yesterday, my buddy Ben, about this idea of he's like, well, I can go back in flipping houses. He just moved to Phoenix. And he's like, I could go, you know, flip houses.

But man, I could just, you know, the average cost of a house here is $350,000. I can just go and sell somebody a house and make the same as I'm going to make on a flip. And I'm like, that's very true. Yeah, exactly. A typical flip in my area is something that we're buying for $450 and we're selling for $700 and putting $125 into it. So as an agent, I can make $10,000 on the buy side and $15,000 on the sell side, make $25,000. I make half as much as the flipper without putting it in my capital at risk. So now when I come across the flipping opportunities, I just call up one of my

a few friends that flips and say, you know, here's one. Do you want to buy it or not? They say yes or no? They say no. Move on to the next person on my list. Yep, that's cool. That's cool. So maybe we can wrap up. Before we get to the fire round, I want to talk real quickly about the fact that you are and that you work with investors. So maybe we can talk about people who are listening to this show right now. Some of them don't have an agent. So my first question is, how do you find an agent like you who works with investors who understands this game? Go out to your local Ria's and your local real estate meetups and we're there. You know, you definitely want to focus on someone that's investing themselves

that understands what you're looking for. And the other thing is, yeah, I mean, we're out there. We just come find us. We're not that hard to find. Get referrals to them from other investors. But you're investing yourself. I mean, aren't you going to take all the good deals? Why would I want to work with you? That's funny, because I hear that all the time, right? Yes. But if I was buying all the deals, like, how can I possibly buy the hundreds of things that are on the market? at once. Like, there's no way I would be able to keep them all for myself. I can't even keep one or two for myself at a time. I try to buy one to two properties a year. And the same thing, like, oh, well, he works with investors. How do I know I'm going to get the deal and someone else

isn't? What are the chances that I have four, four, five, six people at once that are all looking for the same type of investment? The chances of that happening are so small. You know, I got one person that wants to buy all cash single families. I get another. person wants to buy, you know, flips, another person that only wants to buy low-cost rentals. None of my clients want the same things at the very same moment. Because, you know, I ran across this property this week. It'd be great to flip. I called the three regular flippers I work with, but they're all tied up in other projects.

No one can even get to it. That's a good question to ask. There's somebody else that slip through. Yeah. I mean, like, asking that potential agent, like, hey, you know, what type of properties do you invest in? You know, what's your goal? And, like, of your clients, what are they, you know, what's a, what's

focus, you know, how would I fit in with your bag of clients? You know, do you have anyone else who's doing exactly what I'm doing? Who's targeting, you know, Colonials from the 1920s, 1930s? I mean, if you know specifically what it is that you want to do, the types of properties and your goals, I mean, you can mitigate things like that. Yeah, absolutely. And, you know, most beginning investors don't know what they want. Correct. Yeah. And they almost need, you know, an agent who invests to sort of point out to them the different methods and styles and, you know, find out what your goals are and point them in the right direction of what in our market's going to fit their goals.

Because everyone has different goals. Do you want income replacement? Do you want to build wealth? You know, everyone wants something different. And beginning investors often don't know what they want. They just know, I want to buy real estate. And they need someone to sort of point them in the right direction on or. Do you have any advice then for, I mean, you brought up a good point. New investors don't know what they want. So if I'm a new investor right now, listen to this show, listen to you talk, what advice can you give me if I'm in that exact position? I have no idea what I want. I think the best way to start is to start buying cash flow properties, buy a few of those, build up enough so that you can replace your income if you want to. Don't quit your job because having a job allows you to continue to borrow.

And after you build up that base of cash flow properties, then maybe you can move on to, you know, a higher risk investment like an appreciation play. But it's hard to go wrong with the cash flow property. I like that. Nice. Hey, where are you going from here? What's the plan for the next one, three, five years? Oh, I thought you meant today. I'm going to work on one of my rental properties today.

Thanks. The next one, three, five years, you know, I want to scale up, buy an apartment building if I can. If I can't, then, you know, I'm going to continue. to add single families, I have a goal of adding $2 million in debt over the next two years. So we'll see if I can accomplish that. Why'd you pick that as your goal, the $2 million in debt? I mean, that's an interesting goal. I don't think I've heard anyone phrase it like that.

My goal is getting the debt, yeah. Yeah, I mean, it's an interesting phraseology. So why do you say it that way? You know, I just think the market inefficiency right now is low interest rates, and I want to take advantage of them while they hear. If I can acquire $2 million more in debt, you know, I have about a million and a half in debt right now. So that would mean if I just hold these properties until they're paid off and they never go up in value, that's at least $3.5 million. It's other people have paid me.

Yeah. And I just think it's hard to go wrong doing that. As long, you know, and that doesn't mean I'm going to buy negative cash flow things. Sure. They have to cash flow. And, you know, give me a little bit of income also to, because that snowball effect like we talked about earlier. As long as you know, have that extra cash flow coming in, that allows me to buy quicker than, you know, previously in the past. There you go.

Nice. So debt is good. I love debt. There you go. You and you and Dave, what's the name? Dave Ramsey. Dave Ramsey can have a dead off battle. Yeah.

Yeah, you might need to do that, which we still need to get Dave Rams on the show. So everybody knows Dave Ramsey, hook them up with us. I want them on the show. I want that debate here live on the Bigger Pockets podcast. Oh, man. That would be fun. That would be fun. All right.

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Tax season reminder for all the real estate investors listening. If you own rental properties, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS compliance strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost segregation guys is the go-to firm, having done over 12,000 of these studies with 500 million in total depreciation identified. Head to Costsegregationguise.com slash BP to get a free proposal and see your potential tax savings. All right, rental property investors, listen up. Our friends at Dominion Financial already have some of the best DSCR rates in the industry. Now they're the fastest, too.

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and we're going to fire them at you. Russell, you ready for this? I'm ready. Let's do it. All right. Number one, Russell, I've got $60,000 to invest. Now what do I do? I had $60,000.

I would try to buy probably $300,000 properties of cash flow at roughly the 1% rule. Let them sit there. build up, you know, your cash reserves again and then continue to buy after that. All right. Okay. Can I start with the cheaper properties and work your way up? Absolutely. I mean, cheaper is usually indicative of less risk because if someone's not paying, you know,

if it's cheap and your tenant leaves, can I pay it with my own salary? If you can, that's an incredibly low risk. It's when you can't pay those vacancies that, you know, that introduces a higher amount of risk. Well, you got to make sure that you have money. I mean, I think that's like a. a real basic that a lot of people, I would say the average bigger pockets listener knows, but the average non-BP listener may not know, right? You need reserves.

You need cash. You can't like, you know, you don't just go month to month on your money. I mean, you need to have some money in the bank when you buy a rental property, regardless of how expensive or inexpensive it is. Not having that is a very, very fast way of finding yourself in a lot of trouble. But, all right, cool. next question. What is the best strategy for the coming recession? We're prognosticating here. So our poster here believes that there's a recession coming at some point in the next X period.

What would you do if you thought you thought it was coming? How would you prepare? So I think the best strategy is to buy before the recession, buy during the recession, and buy after the recession. Bye, bye, bye, bye, bye, bye, by, by. Isn't that like a extra voice on them? Unless you're getting close to retirement, and you need to pare down your portfolio, you should always, you know, when prices go down, when we're hitting the bad economic environment, that just creates opportunity. Just buy more during the recession. There you go.

By the way, I want to thank Josh for putting the N-Sync song in my head for the rest of the day. It was NSYNC. It wasn't back. And don't try to predict a recession. You know, if people thought the market was bubbly in 2003 and decided not to buy, well, it went for another, you know, five years after that. It was me. Did you get out in 03, Josh, of that? No, but I just stopped.

Really didn't buy for a while there. Yeah, cool. All right. Next question. All right, number three, I like this question. So my tenant was supposed to move out on a Friday. So I line up another tenant to move in the following week. But on Thursday, they called and said,

never mind, we're not leaving anymore. Now what do I do? I've got two tenants for the same property. That's a tough one. I would get a moving truck out there. You know, it's got to come out of your pocket. You pay for the moving truck. you pay for the movers, you get that old tenant out.

Because you can't screw over that new tenant. You know, they're your customer. You've got to provide great service to them. So you've got to do whatever you have to do to get that old tenant out, even if it costs you money. Put them up in a, you know, tell them, I'll put you in a hotel for a week, pay for their moving expenses. You just, you just got to eat it and get it done. He's talking about anything legal. He's not saying, get the moving truck, move all their crap out and say lock the change of locks.

You don't do that. Yeah, probably not. By the way, I have confession to make. That was actually my question. So that happened to me last week. And I had not actually run into that before. And I was like, what should I do? I was like, I'm going to ask it in the bigger pockets forums.

But instead of that, I was like, I'm going to ask the next podcast, yes. What did you do, Brandon? So here's what I did. So I said, okay, tenant who didn't leave, you just screwed me over. That sucks. But I didn't make them leave. Instead, I put the other tenant. I went and showed them that was a couple.

Well, I didn't, my manager, went and showed them the other couple vacancies we had. They liked one of the other ones. better and they went to that one. And so problem solved. But, you know, they didn't pay a deposit luckily. They had paid application fees. They didn't pay a deposit on the apartment itself. That would have gotten a little more legally sticky, but all they had paid was an application fee. But it is a weird thing. And here's an important, I mean, here's a lesson I learned in it. When a tenant says they're moving out, a new policy, we just added into our policy book is we now call every single tenant the week before they're going to move out and say, hey, just confirming this is

your move out time. You know, they called a month earlier and said they'd be out. And then we just kind of said, okay. But, you know, that was a lesson learned. Hey, we're going to follow up now with somebody five days beforehand. And that still won't guarantee that they be bad. Yeah, yeah. Yeah. Because as we all know, tenants lie.

Yeah, sometimes. Yes, yes. All right. Last question of the fire run. How much time should a new investor a lot of month to start investing in buying holds as you've done? So, like, you know, what type of time commitment do you think if you're working a full-time job would it take for somebody to kind of get in there and get that first surprise?

property. I would say a reasonable amount of time would be 20 hours a week. So if you're working 40 hours a week, you have 40 hours of free time, not counting the weekends. Putting in 20 hours a week learning your market is a reasonable amount of time that you will get a return on that time and not, you know, completely turn your life over to real estate. All right. Cool. All right. Well, let's shift gears one last time and head over to my favorite part of the show, the world famous. All right, these are the same four questions we ask every guest every single week, and we're going to see what you've got to say. Number one, Russell, what is your favorite real estate related book? So I'm going to go a different direction here.

My favorite real estate investing book is The Big Short by Michael Lewis. Really? Yeah. I've not read it. What's the movie based on that? The movie was based on that. I've not seen it. And, you know, it's interesting because it's about the market collapse, which we're all afraid of happening again.

But, you know, I just think what happened a decade ago was so far. fascinating how we all got caught up in this hysteria. I don't think it's something we should be afraid of, but I think it's really interesting to learn about and to understand how housing fits into the larger economy and other financial instruments that are around. I love it. Sounds good. Yeah, cool. And that's on my like queue of things I've got to see. Yeah, me too. That's great book. Nice, nice. All right. Favorite Business book? One Up on Wall Street by Peter Lynch. It's an investing book, you know, and it's really applicable to real estate, even though it's not about real estate. Peter Lynch was a mutual fund manager in the 80s who averaged a 30% return a year,

which is just amazing. And his, you know, main thesis in the book is to invest in what you know. You know, I think that applies to real estate because I think the best way we can mitigate risk and the best way we can make money is by having market knowledge. So if you invest in what you know, you're really going to reduce your risk, whether it's stocks, real estate, investing in businesses, whatever you want to invest in. Understanding it, having that knowledge is really going to help you reduce risk and juice your returns. I think that's an interesting point, too, that ties back to what you said earlier. Your whole story of buying these properties that might not cash flow real well and you're going to manage yourself and you do things very different than I do. I mean,

we do some things the same, but you're very different. But that's because you understand your way of investing. I understand my way. Josh understands his way. And we're all better at what we do than we would be at each other's stuff. Exactly. And I bought low, low cost rentals that, you know, low income people rented. And I did awful in them. Other people make great returns in them. I just don't understand those people that were my tenants. So I didn't know how to handle them. Yeah. There you go. There you go. Cool. All right, Russell, what do you do for fun, man? What kind of hobbies you got? I ride my motorcycle. I like to travel a lot. Since I'm a real estate agent, you know, really the more people I hang out with and talk to about real estate, the more money I make. So I go to almost every social event, any of my friends have, parties, happy hours.

And, you know, I tell my wife, I'm working. Nicely done. I like it. All right. My last question of the day. Russell, what do you believe sets apart successful investors from those who give up, fail, or just never decide to get started? I think it's an inability to properly analyze and assess risk. investing in real estate comes with risk but the problem is people overanalyze it and they think

it's too risky for them but what i think is more risky is not investing in real estate not creating multiple income streams leaving your money in the bank so inflation eats a way at it that's more risky to me than investing in real estate there you go cool before we let you go where can people find out more about you how do they connect and link up with you my contact information is on my website russell brazil dot com and i'm very active in the bigger pockets forums. Reach out to me on there. I'm on there probably most every day.

Cool. And like I said, we're in the show. We do appreciate that. And we hope people do jump in and take part of it because forums are fantastic. Actually, why don't I ask that last question, Russell? You are in the forums a lot. Can you offer any advice for people listening to the show right now that have not jumped in the forums? Like, how should they get started?

What should they do? What shouldn't they do? Talk about that for a second. That's great. Yeah. So in the earlier podcast, I remember thinking, you guys always said, get on the form. And I kept thinking, oh, I don't want to get on and talk to people over the internet. Like, that's such a waste of time.

But the interaction in the forums really does two things. The Bigger Pockets forums is the best free real estate education anyone can get. Even for someone like me who, you know, was a professional, understand, you know, I just learned so much on there. And the other plus to it is besides learning, is the networking. I've got some great friends I've made through the Bigger Pockets forums. I've done deals with people from there. I've had clients that have come from there. Real estate's a relationship business,

and it's really a way to get out there and create relationships with like-minded people. Yeah. Yeah. So, I mean, if you haven't done it before, maybe just make a new member introduction, let people know who you are, you know, where you are. Other people, local, will jump in

and welcome you on things like that, and then find topics of interest and jump in. If you have questions, ask them, don't be afraid and answer if you know the answers to questions. I mean, we had, I looked, we had 2440 forum posts in the last 24 hours when I looked this morning. It's insane. There's so many people who are on there who are interacting locally, connecting, finding partners, finding people. It's amazing.

Yeah, and you can literally get an answer to your questions within minutes most of the time. Yeah, it's crazy. Like, why go, why go pay some consultant three, four, hundred dollars an hour when I can get that information for free in a matter of minutes. Yeah. Yeah. I love it. That's awesome.

Cool. Well, thanks again, Russell. We appreciate it. And good luck to you as you continue the next phase in your investing. And we'll see around. Thanks, guys. Appreciate it. Hey, thank you.

See around. Bye. All right, guys, that was Russell, Brazil here on the Bigger Pockets podcast show 192. Check out the show notes at biggerpockets.com slash show 192. So, Brandon, how's your forehead? How's that mark on my head? Yeah, it's all right. Yeah.

It's still there. Yeah, is it? It is. It's still there. You might have a bruise there later. Yeah, you think that's going to happen? You just got to tell everyone like your wife beat you up. Does this bring great joy to you?

My misfortune. A ton of great joy. Yeah. Yeah, I'm sure. I've not sneezed and smashed my face into a microphone. That was a bit embarrassing. That was amazing. So I'm glad we got that recorded.

Yeah, I'm glad everybody on the planet is going to get to see that. that will become a viral video. I'm also glad that we got this. You're going to do everything in your power to make that happen, by the way, which is awesome. I might. I'm going to put that all over. So, that's great.

Sorry. I was going to say, I'm also really glad that everybody in the world is going to show up to next week's Bigger Pockets webinar, which you can get to by signing up at biggerpockets.com. You guys should definitely check it out. And I will be there live. Usually we do them on Wednesdays.

And if you can't make it live, usually you have a couple days to watch the replay. So, again, BiggerPock's dot com slash webinar. And with that, We got to get out of here. All right, guys, before we get out of here, as Russell said, the BiggerPockets forums are amazing. It's a great place to go and network and connect and ask questions and have your own personal community there to guide you through anything you need to be guided through.

So get in there. Create a free account today at www. www.biggerpockets.com. Otherwise, big thanks for listening. Thanks for the support. Please spread the word about the Bigger Pockets podcast, about Bigger Pockets in general. And we will see you next time. I'm Josh Dorkin, signing off.

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