BiggerPockets Real Estate Podcast - 2 Resources OTHER Than Money You Can Use to Get into Real Estate Investing

Episode Date: October 16, 2024

Want to invest in real estate but feel like you don’t have everything it takes? You know you need money for a down payment, skills to manage tenants/perform renovations, and time to find the deals in the first place. But what if you only have one of these? Can you still invest in real estate even without the missing pieces? Today, we’re going to show you how to do just that, no matter how much time, money, or real estate experience you’ve got.  We’re walking through three scenarios with three different investors: Dave Meyer (who had no money/experience), Devon Kennard (who had money but no time/experience), and Tyler Madden (who had skills but limited time/money). Each of these investors was able to build a successful real estate portfolio, all while either being time-stretched, money-stretched, or not knowing how to swing a hammer. They’re sharing the secrets to hiring out/building the other skills so you CAN take down real estate deals, no matter what you’re working with. If you can combine all the pieces of this “resource triangle,” you have FAR higher chances of succeeding in real estate investing and reaching financial freedom. If you’re a rookie with no real estate to your name, worry not—we’re teaching you what you need to know in today’s episode.  In This Episode We Cover: The “resource triangle” investing theory and the three things you need to succeed (YOU don’t need all three!)  The most overrated skills in real estate that you can survive without  Building a team and hiring out/outsourcing the resources that you lack  How to start investing if you ONLY have time, money, OR real estate experience  Crucial skills that we WISH we had (you can make a LOT more money with these)  And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Invest in Turnkey Rentals with Rent to Retirement or text “REI” to 33777 Grab the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Book Find an Investor-Friendly Agent in Your Area Mastering These 2 Skills Is Critical to Success in Real Estate Investing Connect with Devon Connect with Tyler Connect with Dave (00:00) Intro (04:54) Got Skills, But No Time/Money? (11:51) Got Money, But No Time/Skills? (18:24) Got Time, But No Money/Skills? (20:23) Getting Your First Deal Done (39:51) Building Valuable Skills (37:18) Most Crucial (and Overrated) Skills Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1030 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

I have this theory and framework about real estate that I use a lot. And I call it the resource triangle. And it's the idea that every deal and really every portfolio needs some combination of three different resources. Those resources are time, money, and skill. And some of those might be pretty obvious and self-evident to you, like money. You need capital for your down payment to buy materials, for closing costs and all that. You need time because even passive dealers, require some amount of time. And if you're doing an active deal, you're going to need to dedicate a lot of time.

And you need skill because even if you want to throw a lot of time and a lot of money at a project, if you don't know what you're doing, you're not going to get very far. And the reason I came up with this framework is because I wanted to demonstrate that as an investor, you don't need all three of these, or at least to be strong in all three of them. Like if you have money, you can trade capital for other people's time or other people's expertise. I got started with very little money and very little skill, and I was able to take all the time I had on my hands, and I traded that for other people's skills and for other people's capital.

And in today's episode, we're going to talk about the importance of each of these different resources and how you can get started and scale your portfolio, depending on which resources you have a lot of and which ones you need to go out and partner for. Hey, everyone, it's Dave here for another deep dish episode on the Bigger Pockets Real Estate podcast. And today we're going to be talking about the resource triangle. Again, it's the idea that as an investor, our job, our whole job is to figure out what resources we have, whether that's time, skill, or capital, and how we're going to put those resources towards our next deal or our portfolio as a whole.

And for this episode, I thought it would be kind of fun to find investors who started with one of the resources only. So I will represent the time portion because that's how I got started. I'm also going to bring on two guests. The first is Devon Kahnard. He had the resource of capital because he was playing in the NFL when he started on his real estate journey and he was able to use the capital he had to build a portfolio. And we're bringing on Tyler Madden, who was a general contractor before he became an investor. And we'll learn from Tyler how he used. his skills, remodeling homes and doing a lot of hands-on boots on the ground type of work, helped him build his portfolio over time.

We're going to have a really good discussion. A couple of questions I'm super excited to get into are, first and foremost, what types of deals work best for investors who have more time versus those who have more money or more skill? How each of us have sort of compensated for our weaknesses in other resource buckets. Like if you have never swung a hammer, you're not really hand. how do you compensate for that in your portfolio? And if you stick around to the end, we'll review which skills that we think are secretly overrated in the real estate game. I think you're going to be surprised about how we all answer them. All right, let's get into this. Devon,

welcome back to the Bigger Pockets podcast. Thanks for being here. Thanks for having me. Glad to be back on, man. And Tyler, thanks for joining us as well. Have you been on the Bigger Pockets podcast before? Not the grown-up version, just the rookie version a couple times. So I'm excited to be here. Well, I've obviously known you for a while and our rookies know you, but maybe you can start by just giving us a little intro then. Yeah. My name's Tyler Madden. I'm based in Denver, Colorado. I am a real estate investor, general contractor. I own a remodeling business that I've been doing that for 10 years, investing in real estate for the last two or three. So just kind of a contractor turned real estate investor. And perfect person for this exact episode. Thank you. Yes. And Devon, man, I short changed you last time. You were on. on the Bigger Pockets podcast last week.

And I've known Devon for a while. I kind of assumed you had been on the podcast before and introduced you as such, but you hadn't. So could you just give us an intro too for anyone who doesn't know you, Devon? Yeah. So my name is Devon Kinnard. I've been investing in real estate for the last decade now. I started investing right after my rookie season in the NFL and pretty much never stopped.

I bought a single family property and just kept stacking and started investing in single families, syndications, and eventually private lending. And yeah, built a, built a portfolio in each kind of category. And I'm excited to be here. This is only my second episode now, recorded two in like a matter of seven days. And I've been wanting to be on this podcast for a while now. So a great representation of delayed gratification right here. Yeah, that's awesome. We're going to have to make this a regular thing. And again, sorry for failing to introduce you properly last time you were on Tyler, let's start with you. Sure.

What drew you to moving from being a contractor and a successful one to starting to actually invest in your own deals? I think it was very obvious to me when I was doing these things as a contractor for clients. I would do this for homeowners. It was obvious to me that it's what led me to creating my own business is being a quality contractor is something that's extremely hard to find and hard to do. Not a lot of people. Let me ask you this. What's our litmus test for cussing? Because I am a contractor.

Well, I think I've sort of broken that barrier a few times on the show since I've been hosting. So no one's going to blame you. Great. It won't be bad. What I call it is give a shit. And I feel like very few contractors in the world that I saw working with clients and subcontractors. No one had a level of give a shit. So I found a very, very serious passion for caring how to do it. And I couldn't justify owning properties. for a long period of time and having someone else work on it and do a half-ass job. So it became obvious to me that my competitive advantage to other investors or just to, hey, I want a future fueled by passive income, fueled by equity, fueled by all of the benefits that we all know to be true of real estate investing. But I couldn't just go pay for it or do it all myself or, you know, learn the knowledge. So I figured my competitive advantage was being a contractor and not everyone has that.

So identifying what skill set I did have that was applicable. I was like, well, it would be stupid to ask someone else to do that. Why don't I try and save myself, you know, the agony or the money wasted on other people. So that was kind of my intro where it was like, well, this is relatable. I didn't dream of being a contractor. It just happened to be something that is very functional and relatable to the things that we're trying to achieve in our life. Yeah, I mean, being a contractor has to be one of the best two or three skills for real estate

investor, I imagine, to start. But I can also imagine that, you know, you're running a business. And so, you know, your own business. So how did you figure out how to get those other two resources? Because I imagine you had limited time. You're working on other people's projects. And I don't know too much about your financial situation. But I imagine it, you didn't have tons of capital, at least to start to start investing. So how did you think about acquiring the other resources you needed to do your own deals? Yeah, you're exactly right. Where, the beginning, it was a function of just asking people who were slightly ahead of us. The first person that we reached out to was actually a friend, a lender of ours, who was helping us buy our personal

properties. And I was like, how do people get another primary without getting rid of the last one? How very, very, very many of the people that we know, that's how you get your start. You house, you know, you either house hack and then you house up and you become an accidental landlord where you just keep your first house. So that was our story. But it was, you know, by no other sequence of events than asking people what their move would be, what their move was. So we got motivated to get a he lock on our property. We got into the equity that I had built as a contractor in our own property and we utilized that to house up, keep that one as a rental. So that was like door number one. But then it came to the point of really expanding our portfolio. And that's when we bought seven units

all at once, a three unit and a four unit. That was like my rookie move. And it was on the heels of being in a mastermind with Bigger Pockets Own Ashley Care. I was like, oh, we got two properties under contract. I don't know what to do next. Like, how do I make this happen? Can I make it happen? And she went to bat right away trying to find solutions. So just learning that you've got to have a level of solution-mindedness instead of being like, oh, no, there's something that's difficult. How am I going to overcome it? I guess I'll never do it. Other people in realizing how solution-oriented they were was the motivation for me to be like, oh, okay, cool, we'll reach out to a hard money lender, and then we'll reach out to private money lenders, and then we'll figure out,

gap financing and then we'll figure out. So there was just answers for everything all along the way, which is what I learned quickly instead of being like, oh, I got to become the expert. I got to become the guy with the time. I got to become the guy with the money. That's right. Whereas like, find the expert at the thing that you're lacking and go in that direction, if not to use them to learn from them. That's great advice. I think that's a lesson a lot of investors learn somewhat painfully is trying to learn every skill and to be everything in their portfolio. Exactly. What is there 20 different disciplines you need to be good at to be a real estate investor? Thinking that you could do all 20 is arrogant and you're just going to lose your money or time.

And I'm 100% guilty. I'm 100% guilty of doing that for the first several years where I was like, no, I can. And you can do it all until such a point. And that's where you have to realize the value of scaling and introducing other people. Totally. In terms of, hey, Devon, you got money. Let's talk. Let's figure this out because I'm capped out.

And here's, I can only do this much. want to do this much. How do I do it? Not by your damn self. Exactly. And that's sort of this, this concept of trading resources that I always come back to. It's like, if you have skill, you can trade it for money. You know, people who have money will get to that with Devon in just a second, like, are usually looking for someone to help them operate a deal that they don't have the time or the skill to do themselves. And then people with time might be able to offer something to someone who has a lot of knowledge, but can't be boots on the ground. You know, there are ways that you can take what you're good at and exchange it for others. And we'll get to Devon in just a minute,

but last question for you here, Tyler, before we move on to the money component is, did all of this, as you scale, you bought seven units at a time, it's a lot. Did that mean you had to take time away from your contracting business? Sadly, yes. I chose to focus more on rehabbing and burying successfully all seven units, but in the act of doing that, I couldn't be taking client projects for my remodel business. So I did sacrifice my remodel business for the portfolio, and I'm no longer willing to do that, which is why we're scaling both up simultaneously growing, bringing people on to both teams. But in that moment, it was definitely a choice to say, hey, you know, I got to choose which one's going to thrive because both of them aren't going to do what I want without other people.

Yeah, I'm sure that's a really tough decision. But it's sort of what you owe. always have to do is there's not unlimited resources. You have to figure out, you know, you have a limited amount of time, you have a limited amount of money, have a limited amount of skills. How are you going to sort of play the game and figure out where to put them in each different bucket to make what makes sense for you? It sounds like for you is taking some of your time bucket and reallocating it from your job into your investing portfolio. It's time for a quick break. On the other side, Devon, Tyler, and I are each going to talk about real deals. We through our respective resources, time, money, and skill over the course of our investing careers.

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I imagine there are some skills for being in the NFL, being a professional football player that apply to real estate investing, but not in the same way Tyler's. It probably did. So how did you approach building a portfolio when you probably had limited time and limited knowledge of sort of the nitty gritty of real estate iron magic? Correct me if I'm wrong, but I imagine you hadn't done like a lot of rehab work or property management work at that when you were first getting started. No, I mean, first to start, like, I can say I have now, but when I started investing, I hadn't even like touched a hammer, really, you know, my entire life. I didn't grow up doing that, didn't grow up in a household that did that. So that aspect of things and really being able to trade like at the skill or the time, it wasn't an option for me because I didn't have that skill set or that time. But one thing, I think the biggest thing people with some capital to invest have to get their head around is the fact that. you're going to sacrifice a little bit of the upside of what you can make when you're coming with the money but don't have time or the skill. I can look at the same property that Tyler looks at and my return's going to look differently than his return. I'm looking at that and it's like I can throw some money at it. I'm going to have to build a team around me to help me renovate this property. So all of that's going to add to the expense when Tyler can look at that and he's going to be able to, oh, I got the crew in place. We're going to be able to get the material for 60 cents on

the dollar. So we're playing a different game. And a lot of people with capital don't realize that. And you're sacrificing some of that upside because you don't have the time or the skill. And that's okay. And wrapping your head around that is, is, you know, a huge hurdle that I think some people who like, you know, oh, I have this money. I want to invest. And I'm seeing these investors getting 20, 30% on a flip, you're not going to necessarily do that when all you have is the capital. So understanding that dynamic is really important. How did you wrap your head around that, Devon? Because I hear the same thing all the time. I don't want to pay a property manager. I don't want to pay a contractor. And of course, you want to maximize your return. But as we've been

talking about, you can't do it all yourself. And so how did you get into the right mindset for, being an investor that has some money and is going to have to trade that money for some of the other elements of being an investor. For me, it came down to, all right, if I'm, if I don't do it, it's either like learn how to do it passively and accept maybe a little haircut on the upside or don't do it at all. And not doing it at all when you're in a career that you know is going to end, it makes no sense. So what I always tell to others, like I felt like I was a little more forced to that conclusion because of my career. But I think everyone should have that mindset because at some point, your career is going to end either by choice or by force. So having the

mindset of like, okay, I got to prepare for what life looks like outside of that. I think that's kind of the key that you have to really look at and the perspective that I kept. And, you know, I was buying turnkey properties, which, you know, I don't think works as well today. But I was getting a solid 8 to 10% cash on cash return. And that was solid in good working class markets in the Midwest. And that's what I was, you know, turning along with. But if I were to buy those properties as an active, more active investor trading skill, then maybe those returns could have been 15 to 20% cash on cash. But, you know, I was okay with that bump because I purchased those properties and really didn't have to do anything with them once I purchased them besides look at statements every month and, you know,

kind of oversee things, make sure they're going okay. I'd imagine that starting with money, you know, it's easy in one way, you know, because like you have a lot of flexibility. But I would imagine that picking a team and finding the right partners is pretty tough because you probably have a lot of people who want to work with you. How did you find the right people to contribute that time and skill portion of your portfolio? I think the most important thing you can do if you have money to invest is gain the knowledge. So I don't have to know how to put Hammer to Nell like Tyler does, but I need to have a general

idea of how a construction job is supposed to go and what the process is and understand we should probably have a contract in place with the budget as well as the timeline and guard rails to protect me. So I see a lot of people with capital to invest and they're getting pitched opportunities and And contractors are coming up and, oh, I could do that job in four weeks and I could do it for, you know, $30,000 knowing dang well. They're going to get into the project and it's probably going to take double the time and double the money. So, you know, it's easy to kind of like have the shiny object syndrome when you're dealing with some capital but don't have the skill at the time. So I always really kind of press upon people to gain the general knowledge to understand what you're looking for and surround yourself around people who have alignment in your. vision and who, you know, are good character people, I would say is really important because

when you're the money, you can get taken advantage of if you don't protect yourself. I started, I'll tell you my story in just a second with no money, but as you become more successful and you have capital to invest, to be in a fortunate situation, I totally understand that, Devon. Like, even when I want to, you know, I started with rental property investing. Now I start to do private lending. I'm trying to do deals right. now, I'm just like trying to, you know, read the documents, learn the process and try not to be, the greed is not the right word, but try not to like get the whole, the whole world in one deal and realize that like either, my wife always says this with her job. It's like, either to be earning or

learning. And I totally think about that within real estate. It's like, you don't necessarily have to earn a great return on every deal. If you learn something on a deal, that's just as valuable, you know, not financially, but in the long term of your portfolio, it's pretty darn valuable. All right. So I do want to ask you guys for some examples of times that you've used your primary resource to get deals in just a second. So I'm curious to hear about that. But I'll just round out our conversation because we've heard about how Tyler has used his skill as a contractor to get into investing, how Devon used the capital he was earning from his full-time job to get into investing. I, when I first got it started, I was waiting tables. And it's a tough job,

but it got all day to do pretty much nothing most days. A lot of days, I didn't start work till five. I would have three or four days off in a row. And I had time to property manage. I had time to go drive around and look for deals. I had time to go to just, I don't even know how many open houses, just looking at houses to just try and understand the differences between properties. And I used that in my original time to attract capital partners because I knew people who wanted to invest in real estate. They worked a 60 or 70 hour a week. They didn't have time to think about what deals to buy and what neighborhood in Denver. They wanted to find someone who was going to go just honestly hustle his ass off, even though I didn't know anything, just was

committed to learning. And I was able to basically trade that for time and for skill. So I traded that for money and capital, but I also traded it for skill. I actually, for one of the brokers I worked with for my first deal, I made cold calls for them for a couple of months. So they would start to teach me the business and teach me things about the Denver market because I just moved to Denver six months earlier. And so I, you know, I just found ways to leverage what I had, which was probably too much time on my hands, and to translate that into a real estate portfolio. And so hopefully you can see that there are, these are three super different ways to start getting into real estate, contractor, waiting tables with a lot of time, or someone working full time and who has capital to invest.

And there's no right or wrong answer here. It's just about figuring out how to allocate resources. So Devon, let's go to you. Just can you tell us about one of your first deals and like how you pulled one off playing in the NFL, having some money to invest? Like, how did you pull off just a good example of finding good partners with your capital? So I'll talk about my first deal. So my first property ever was in Beach Grove, Indiana for $86,000. And it was all season right after my rookie season. I went to a real estate meetup in Phoenix, Arizona. I met a couple of investors who were doing some work here, but I didn't really want to invest in Arizona at the time because it was expensive. And I was like, I want to find a cheaper market.

So this one investor connected me with his cousin who invested in Indiana. So I took a couple of days, went out to visit, saw his whole operations. He was fixing flipping at scale, somewhere between 10 to 20 properties a month. And his wife handled all property management, had her separate company. So I got to see their whole operation. I went to like six different properties. and I'm like, okay, this might be a good way for me to get, you know, some exposure. So I bought a property from them and there was already a tenant in the property, actually. So as soon as I purchased it, his wife started managing it. I started to learn about App folio and looking at, you know, P&Ls and, you know, that whole thing and going through the line items.

So I'll say she was very hands-on with me, which I appreciated. And that kind of taught me the process. And I started to create parameters like, okay, if anything pops up more than 200, dollars, I want to know about it. If it's less than that, you know, just handle it without coming to me. And I was able to kind of build on that, see how it went. But unfortunately, he kind of disappeared on me. Oh. He had another connection with institutional buyer that started buying up all of his deals. So he stopped answering my phone calls. You know, I couldn't get him on the line because I wanted to buy more property. So that taught me a valuable lesson to like, if I'm going to enter a new market,

make sure I have the relationships to sustain it and to scale there. So that led to me starting to do the same thing. But I learned what a turnkey provider was. So I started to research other markets in Cleveland's the next market that I went to. And it was the same type of thing. I met someone who was flipping homes at scale and was like, hey, I want to kind of buy a few properties from you. And if it goes well, I'll keep buying. And, you know, I started doing that in Kansas City, Missouri as well. that's great. It's just a perfect example of how you took what you got, which was capital to invest, and then basically bought other people's expertise. And it sounds like, you know, one bad partner out of a handful, which, honestly, if you're in real estate, it's just going to happen. It's just part of the game. But it sounds like you learned your lesson and we're able to find the right people to contribute the time and skill to your portfolio. What about you, Tyler? Can you tell us about one of your first deals where you brought your contracting skills to the game? Yeah, I mentioned those seven units that we bought. It was, it was me learning as much as I could, because similar story to you, when I was contracting, it wasn't all day every day. It was me whenever

I had clients, I had time between projects where I would dive deep, learn as much as I could about what real estate investing was. I read, you know, the book on Burr investing. And I was like, if I'm going to invest in real estate, I have to have value at. I have to have something that I can actually force some equity because unlike Devon, I didn't have the money to go buy. the turnkey stuff. I was like, market value, no way. Can't handle it, can't fathom it, doesn't pencil for me. So it was all based on what can I do to maximize my skills. So I was looking for, you know, something that was value add. We were looking on market. We weren't really well connected. So we didn't have relationships with wholesalers. So we found some on market stuff. But

Denver prices are absurd. So what we had to do is go through the process of figuring out, hey, what pencils? Single family home burrs didn't pencil because you're never going to make the rent to cover the mortgage. We were like, cool, multifamily. So we start looking in multifamily stuff. We get one under contract, while another one we submitted an offer on a three unit under contract. We submitted an offer on a four unit the week prior and they told us that we weren't winning that one. They were like, oh, someone else outbid you and we're like, all right, cool, whatever. So we get this three unit under contract. Two weeks later, we get a call from that agent on the four unit and they're like, hey, they backed out. You're the next best offer. Do you want it? And I laughed at him. I was like,

yeah, but I don't have the money. So literally exactly what we're talking about. And this is what forced me to expand this solution-oriented thinking, where it's like, well, instead of just being like, nope, out of my, like, out of my expertise, I've done everything that I can with the money that I have. So that's when we were like, well, how do we do this? So we asked, um, asked some professionals that were already doing this, uh, expanding their portfolios. So we actually buy all, all seven units, the three unit and four unit. We inherited terrible tenants. We had to remodel one every time a tenant moved out. Um, so I spent literally the next 12 months of my time, and this is when my wife was nine months pregnant. So through all of this, I'm nights and weekends over at these two properties, trying to literally

gut every single bit of them. But, you know, Devon made the point earlier. I'm getting material at my cost. I'm using my subcontractors. There's no markup. So again, this is something where if it's pulled off, and this was a tremendous amount of work for me to rehab seven units over the course of a year one by one as people move out, while also managing terrible tenants. That was something that was just a massive expense, just emotionally, mentally, trying to balance all of that. However, we bird both properties. I bird the three-in-a-property. We left $20,000 into it.

We birded the other one. We took $60,000 out. So we were effectively up $40,000 across the seven doors. And right now, I think across the two, we've got maybe $600,000 in equity. Whereas, like, hey, that was a really good sacrifice for me. me to do all of that insane stuff and get out of my comfort zone and be like, how can I possibly buy seven units? Well, you figure it out and you sacrifice a little bit. I'm just curious, Tyler, I would imagine being you now that you are a very desirable person to partner with. Because

like your skill set of having been a contractor and now being an investor, I feel like that's kind of like a superpower to have those two sets of experience. That's always been my angle where getting into real estate investing, I realize very few people have construction knowledge and very few people that have construction knowledge have real estate investing knowledge. So I educated myself on both sides of the spectrum where I fortunately get to be two of multiple necessities where if I can blend those, it becomes something where, you know, it's a equation where it's weighted very favorably on my side. Not to say that I win every time, but it just minimizes the gamble for me on my projects. And that's the only way that I'm willing to go into these sort of things is making

sure that, you know, you stack the cards in your favor. It's not guaranteeing a win, but it's what I like to think is our competitive advantage. I love to hop in there because from my angle, it's kind of the same thing. It was really cool hearing Tyler's perspective on that because I want to stack the skill sets and be able to learn things. And I'm never going to put Hammer to Nell like Tyler does, but one thing I now will do value add projects. And I have, I did a sixplex, a duplex, and I have another sixplex that I'm finishing renovations on now. But what I've been able to do is really hone in on what's the price per square foot for rehab for the type of rehabs I do. So I'll kind of price it out and be like, all right, I don't know exactly what

everything costs, but you're coming out, coming up way too high in comparison. Like I've done a full, I've done a couple full guts. I've done some cosmetics. I have a general idea of what something could cost. So utilizing the skill in my portfolio knowledge of doing it for a while to gain the skill set of really holding contractors and partners accountable and increasing my revenue potential to where, you know, earlier I said when you're just a capital, you don't always get as much upside. Well, after doing this for a while, I want some of the upside too.

So that's where I started private lending. And then I do value add, but I'm not the hammer to the. the nails. So it's like how can I hold them accountable? How can I make sure the contract job and the construction is within budget? So there's things you can do even from my side to start to make more money and be more profitable. But it takes knowledge and time. Like I want to put the cards in my hand just like Tyler does. And it's how can I do that from my from my standpoint with being the capital? Well, you're not going to be able to just tell me a job's going to take $300,000. And that's $300 a square foot when average rehabs I've done is $70 a square foot. Like, you know, I know you're

blowing smoke. You're, you know, you're overcharging. So I would say that's become an advantage being able to kind of know that. But it takes time. Yeah. I think that's such an important point because we sort of frame this discussion, at least at the beginning, at how you got started. And each of us started somewhere different. But I do think eventually you have to sort of get to this point where ideally you have a little bit of each. Like ideally, you have to, you have to commit some time to every deal, even if you're entirely passive doing a syndication. You at least have to network and find operators.

You need to underwrite deals like that kind of stuff. Usually if you want to, you know, grow a big portfolio, you have to have some capital. It's pretty hard to get past those first few deals just on time and skill alone. And the same thing goes with time. Like I hustled my way into my first deal. I basically just property managed for sweat equity in my first deal. And I was a terrible property manager, but I was willing to put 20 hours into what would take a good property manager an hour.

I was super inefficient, but I did it. I think it was in 2015. So five years into my investing career, I sort of had this realization that I was pretty useless in a portfolio perspective. Like, I didn't have a ton of money at the time. I had learned a little bit of skill. I didn't have something that made me super valuable to anyone else. And that was holding back my investing career.

And I wound up, you know, thinking like, oh, I've worked in tech, like I'm pretty good at analytics and data and stuff. So I wound up going back to school and getting a master's degree in analytics, knowing that I wanted to stay in real estate. Like, I know a lot of people probably wouldn't do that. But I was like, this is my skill set. This is what I'm good at. And so I'm going to do this and I'm going to apply this to real estate. I got that degree, one of getting a job of bigger pockets with it, which was awesome. But, you know, it just shows like over time you can augment your skills.

You can reallocate your resources because I knew just throwing time of problems, not going to help. I needed to learn skills. Skills brought me into having money. And now I have the ability to sort of balance all three buckets, right, and reposition them as I need to. So let's turn the conversation to that. Devon, you've spoken a little bit about this, but like, now that you're retired from the NFL,

how do you think about balancing the three buckets to build your portfolio from here going forward? You know, I still consider myself more on the capital bucket than time and skill, because I don't want to learn how to contract jobs and do renovations. And I also... It sucks. But yeah, I also don't want to commit an exceedingly. amount of time. So it's like I'm willing to get the biggest difference now is I'm willing to get more time. So I still don't want to feel like I'm working 40, 60 hours and I have to work or

things aren't going to happen. You know, I'm not going to be able to make any money. But, you know, if I was working five to 10 hours a week while I was playing, you know, I'm willing to work 20 or maybe sometimes even a little more than that. So understanding that and how can I leverage the fact that I'm putting a little more time into this to take advantage of the capital that I have to invest as well as, you know, all right, the skill set I'm developing in understanding how to manage a job and understanding the nuances of owning and managing real estate, buying real estate. So I think that's been kind of my strong suit. I've leveraged a little more time to build relationships with wholesalers, to start a lending company so I can lend to, you know, established investors. And

that's increased my revenue potential a ton while also being able to capitalize on the fact that I do have money to invest. So that's been kind of my balance and tradeoff. And, you know, I want to continue to grow with that. And I would imagine it varies from deal to deal, right? Even, you know, that's sort of like portfolio perspective. But I think you and I take similar approach. Like we do both passive and some active investing. It's like some, I am able to do a little bit of active investing because I focus a lot on passive investing too. And each deal, you kind of have to assess how you want to approach it. Like, how much time are you going to put into this deal? How much money you're going to put into this deal? How much of your skill set can you put into this deal? And then, you know, that sort of

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We realized that we were siloed into one thing that we brought to the table. But to Devon's point, you've got to know a little bit about everything. You should be dangerous in every level. And for me, it's, I mean, we're talking about time and we keep talking about time. Many real estate investors, I think the reason we're doing this is because we want control over our time. Where when you get started, the story that we all just told is like, I was doing stuff that I shouldn't have been doing, but it got me in the game. And now at a certain point, I'm unlawful. willing to do that stuff anymore, but I'm also unwilling to give up my competitive advantage.

So what I'm trying to figure out is taking my skill set, which, you know, my best skill set is not being a general contractor with a hammer in hand doing actual physical projects. It's growing and scaling a business, being a visionary and a CEO. So I'm allocating my time to figure out how do I replace myself as the contractor without giving up or forfeiting the benefit that it brought me, where we're scaling our construction business such that I'm no longer the guy that has to be on the job doing. the things. So that just becomes like something that exists in the background and it's on autopilot without me having to contribute my time to it. So then I get to go think about, hey, where is the best

place for me to spend my time? Probably raising money, making relationships, finding partnerships, getting into new opportunities, advancing, you know, the objective so all of these things can make me money because that's the end of the, at the end of the day, that's what I want is all this stuff needs to collectively create passive income. So that's where my focus is, is like, big picture, getting myself out of the weeds at the ground level and think about like what's the 30,000 foot view, what's the purpose, why are we doing this, and are all things pointing in that direction? Because I don't want a job. I don't think any of us want a job. So figuring out how to get myself out of all of these like low level weed level problems and just think of solutions for the big

picture. Just if anyone at Bigger Pockets is listening, I do want a job. I would like to keep my job just for the record. I take it back. Most of us don't want a job. No, I have a great job, so I'm lucky in that regard. But all right, last question for both of you. If you guys had one resource that you could have more of right now to grow your business, what would it be? And number two, if there's a resource that you think is overrated. Tufon, I'll start with you. Okay.

And take a minute to think about it. can edit out the awkward silence if you had a need on that. The one skill I wish I had, I would say, is could really price out a job granularly. I feel like I've gotten better at like, you know, like I mentioned, the price per square foot. I try to like get a good idea and have a gauge of what I'm going to pay. But I feel like I get nickel in dimes when I am doing a rehab job because I admittedly don't know what things cost and I have to like I'll get a couple of quotes but I have to at the end of the day kind of trust that I'm getting a decent price and I just wish I knew that a little bit more

and or had those direct connections to get better pricing and the one thing I think is overrated is trading a lot of time to invest in real estate I think especially today with software that you can use and AI and relationship. I feel like you don't have to be super, you don't have to work 80 hours a week to be very successful in real estate. And you might have to sacrifice some of the upside to be less active. But I think you can make some really good money without working crazy hours in real estate. And, you know, that's no shade to anyone who is putting all that time in, because I'm sure they're killing it. But, you know, I don't think it's worth it. I think you can make good enough money with working 40 hours or less to where, you know,

the people who are slaving in it, I don't think that's worth it. So that's my take. Dude, you stole mine, but those are good answers. Tyler, what are yours? The thing that I would like more of is like the resource would be human capital is other people and other people to help contribute to the things because again I've operated until a certain point to like I got to earn my stripes. I got to be the guy that does the things. And at every level it's always like how do I be the guy first and then I'll find the people

whereas like I'm totally shifting my perspective on that and have been for the last year and a half whereas like trying to scale a business that is dependent upon other people contributing to the vision. That's what I wish in my current state I had more of is reliable, trustworthy human capital, people that can join the vision and contribute to it because that's where scale happens, in my opinion. Such a hard one though. But I think my skill set's probably the most overrated, whereas like you don't need to be good at this. Like you can find someone you trust, go build a relationship with someone that has a skill where you could have no time and no money and just go find a me. Like there's trust. Trust.

people out there. The best skill anyone can bring to real estate investing is relationships and building them and finding trustworthy people. We've all been burned by someone. Most of them are contractors. I'll be honest. But I think we're all also here to prove that there are good everything out there. There's good contractors out there. There's good guys with time out there. There's good lenders out there where everyone's expecting that they're going to get taken advantage of somehow. But I think you know, you're best served by just spending time getting to know people in a way where it's like, hey, let me feel you out as a person instead of, again, a tool or a spreadsheet or a ratio or a formula of like, I'll only do business with you because you fit the bill of what I need for a return where it's like,

no, do I like he as a human? Can we come together on like what we believe in and let's do some meaningful business together? I think if you've got that skill set, you don't need any of the three things that we have. Yeah, that's a good point. Very true. Well, I'm going to agree with Devon. I just feel so weak with construction. You guys know James Standard, right? he's on the show a lot.

That dude's brain is just like an encyclopedia of scope of work and prices. Like he could just look at a house and be like, that window will be $2,000 and you should replace it. You should move that wall there like blah, blah, blah, like in like 10 seconds. If you had, if I had that skill, my God, it would be unbelievable. They would just like open up so many more deals. And I think it's just like something I'm like self-conscious about.

Like I've done some burgers and stuff, but I've never done like a gut rehab. and I just feel like I need to do that. I need to rip the Band-Aid off and take some bruises doing it, just so I like understand it a little bit better. And I've slowly taken on more and more, but sometime I'm just going to have to knock something down and build it back up just so I can learn.

And for the thing I think is overrated, I'm going to piss a lot of people off right now. I think off-market deal finding is the most overrated skill in the entire business. people talk about this all the time. They have to be like, calling sellers, blah, blah, blah.

But I think it's much more about what Tyler said. I've bought off market deals just by talking to other investors, by talking to agents. And even that's how you've had good on market deals. I just think I will never in my life. I mean,

maybe I will one day. But I think there's almost no chance in my life or I'm going to start sending out yellow letters or driving for dollars or doing anything like that. I just don't think you need it. It just seems like a waste a time. Especially as a newbie where you're untested and you're starting from the ground up.

I'm glad I could get that off my chest. I'd rather pay the wholesaler a little fee and get the deal brought to me. Yes. Nailed it. There are people who do that for their jobs. Let them do it. Exactly. All right. Well, I'm glad that we got this. This was cathartic for me. Thank you. All right. Well, thank you both so much for being here. I really appreciate it. If you want to connect with Devon or Tyler, we'll put their bigger pockets profiles of social media. links in the show notes below. Tyler, thanks for joining us, man. Thanks for having me. This was awesome. I really appreciate it. Absolutely. And Devon, thanks for being here again in just the second week. It was a lot of fun. Thanks for having me. This was awesome, guys. And thank you all so much

for listening. We'll see you in a couple days for another episode of the Bigger Pockets podcast podcast. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. an executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe Content. And editing is by Exodus Media.

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