BiggerPockets Real Estate Podcast - 210: My First Deal Changed My Life! A Newbie Show with Sunny, SunMarie, and Sam

Episode Date: January 19, 2017

Can a single real estate deal change your life? Definitely! That’s the topic on today’s “newbie episode” of the BiggerPockets Podcast, where we sit down for several interviews with real estate investors who have just purchased their first deal. In the first interview, you’ll hear how Sunny and SunMarie Burnsused a fantastic “house hack” to invest in an extremely high-priced area. In the second interview, you’ll hear how Sam Valme was able to house-hack his home into a vacation rental that throws off massive cash flow each month. These stories are incredibly inspiring and full of tips that can help new AND experienced investors achieve more in their business! In This Episode We Cover: Sunny and SunMarie’s Segment: How Sunny got hooked to the podcast Why you should consider buying a fourplex as a first property How to find these deals Thoughts on the competitiveness of the real estate market How to use house hacking to earn extra cash Why you should always look out for holding costs How real estate helped Sunny and his family Sam’s Segment: How his mom unknowingly gave him a ticket to real estate investing How he turned the basement into a rental unit Tips for making the financing work on a deal like this Why he used an FHA 203K for financing The benefits of using Airbnb to rent your property How to price Airbnb rentals the right way How to use electronic locks and automate the process His worst tenant experience ever And SO much more! Links from the Show BiggerPockets Member’s Blogs WellsFargo BiggerPockets Forums Schlage Door Locks BiggerPockets Webinar BiggerPockets Analysis Ultimate Beginner’s Guide to Real Estate Investing Books Mentioned in this Show Rich Dad Poor Dad by Robert T. Kiyosaki The ABCs of Real Estate Investing by Ken McElroy The Millionaire Real Estate Investor by Gary Keller The E-Myth Revisited by Michael E. Gerber Outwitting the Devil by Napoleon Hill The ONE Thing by Gary Keller and Jay Papasan The Book on Managing Rental Properties by Brandon and Heather Turner Tweetable Topics: “House hack and get your tenants to pay your rent, mortgage, and taxes.” (Tweet This!) “Hard work just isn’t enough. You need to figure out the why.” (Tweet This!) “Imagine your perfect day and then, work backwards from there.” (Tweet This!) “It’s better to fail 50 times trying to figure out what you want to do than to sit back for an entire year thinking about it.” (Tweet This!) Connect with Sunny Sunny’s BiggerPockets Profile Sunny’s Website Connect with Sam Sam’s BiggerPockets Profile Sam’s Website Facebook Profile Twitter Profile Instagram LinkedIn Customer Results Property Management Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 210. So it was just like an easy decision, you know, stay home, be home with the kid. We have the financial freedom to do that. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. your home for real estate investing online. What's going on, everybody?

This is Josh Dorkin. Host to the Bigger Pockets podcast here with my co-host, Mr. Brandon Turner. What's up, man? Hey, I don't know. Not a whole lot. What's up with you? I'm disgusted, actually, right now.

Why are you disgusted, Josh? Man, I got to tell you. It's better not be a rip on my beard. It's definitively a rip on your beard. This thing is getting really disgusting. I haven't trimmed the flyaways today. You trimmed nothing. I trim. Look it. It's smooth. It's grotesque, man. I love your wife. She's amazing. But like, I don't know. She tells me to go on. Heather, make him cut it. She says keep going. We're like, we can't have this as the persona, as the face of this guy.

I'm going to Zizi top style. That's where I'm. Oh, my goodness. Oh, my goodness. All right. Now, you know, good on you. congrats for being, you know, as manly as you are for being able to grow a beard of such disgustingness. It's not your fault. You can't grow one. It's okay. We're all 12 at one point. Challenge.

Yeah, man. Anyway, no, so things, actually things are great. Things are going really well. We got a really cool show today. I haven't done one of these in a while. And I'm pretty excited. It's been at least a year, maybe even two years since we did a newbie show. Yeah.

So today we've got this newbie show. And it's great. We've got, you know, two guests. and fantastic stories and hopefully really motivating for all the newer investors out there. So, yeah, we're going to dig in and really figure out how these guys went about getting their first investment property. So great show, very, very excited about it. Yeah, very cool.

And one thing I really like about both these interviews today is they both have this common theme of their one single property, like, changed their entire life. Like in both cases, yeah, you guys will hear that. Like their life was dramatically changed because of one deal. And so if you guys are listening to this thinking it takes, you know, 50 deals to be able to make any kind of change in your life. Listen to these two interviews and you'll see what I'm talking about. Absolutely. Absolutely. Yeah.

I mean, that's the coolest thing about real estate. Like, you know, most newbies are so afraid to get that first deal. But once they do it, you know, it's life changing in that, you know, you get past this hurdle, right? But in these cases, these first deals actually altered the course of these folks' lives. So it's fantastic. Well, cool. Well, before we get into it, why don't we get to today's quick tip? Nice. Nice.

You want to take it? Yeah, sure. All right, guys. So, you know, I'm not sure if you know, but Bigger Pockets has member blogs. So basically we allow anybody to come on to bigger pockets and create a blog and write. It's a great way. Can my mom come on and make a member blog? Can she write about you? She could. Actually, that'd be a great member blog.

It's stories about Brandon's childhood. Oh, my God. That's going to be very well read. Not. Yeah. Look, anyone, as long as it's real estate related, go for it. You can create a blog. Just go to the community on the navigation bar. Go down to member blogs.

And there you can read thousands of different blogs about all different aspects of real estate investing. You can also create your own member blog for free and start sharing your knowledge or chronicling your journey, which we love those. Those are the coolest, at least for me, which is, hey, here's a deal I just did. Or, hey, here's, I'm in step seven of trying to figure out this deal, whatever it is. like share your story. People love that. It's a great way to build community around yourself, and it's a great way to start getting people to know who you are, what you're doing,

and to build credibility. So head over to the member blog area, check it out. There you go. All right. Before we bring in our first interview today, we have two different interviews with three total people. I do want to add something, by the way, on that book. I'm sure most of you are familiar with the Bigger Pockets blog, and we do go to the Bigger Pockets member blogs in order to find new writers to write on our main blog. So if you're ever wondering, hey, how do I become a writer

for the Bigger Pockets blog? Go ahead, create a member blog. And, you know, if you're doing great work and we notice you, we'll probably give you a shout. There you go. There you go. Do you ever notice how every passive investment

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So wouldn't it be great if you could actually earn money while you're traveling? Well, you can. Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care of things. Communicating with guests, preparing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. A lot of property managers think their job is,

answering tenant emails and coordinating repairs. That's not the job. The job of a property manager is protecting and growing your operating income and earning your trust while they do it. 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 themselves 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 mine 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. Let's get to the show. So like Josh said earlier, today's the show.

We're doing a couple different interviews with a total of three people. Our first interview today is with Sonny and Sun Marie. This is a couple from the New York City area. They are. Kind of a cool story there. So we're going to jump in and talk a little bit about house hacking and all that. Yeah. It's funny because everybody who everybody says, oh, I can't invest.

I live in New York City. It's impossible. This can't be done. And of course, these guys have gone and created real wealth through what seems like a pretty good deal. Yeah. Pretty good deal. So it's cool. Yeah, it's cool to hear how they got that deal and stuff.

So listen up. Yeah, it's really smart. All right, guys. So let's bring in Sonny and Sun Marie. All right. Sunny and Sun Marie. Yes, those are their real names. What's going on, guys?

Good to have you on the show. Hey, good to be here. Thanks for having us. Yeah, thanks for having us. We're excited. Yeah, this should be good. This should be good. So I like having couples on the show because, I mean, real estate is generally not a single person thing.

I mean, like most, if you're married, your spouse is probably involved. In fact, of the 200 and some episodes we've had so far of the show, I would say majority people are married and they've just come on alone. I'm sure their spouses later were like, why didn't you have me here? So it's a good thing. It is a team effort. It is a team effort. So that's what I'm excited to talk about. So why don't we just go back to the beginning, which I know was years and years and years ago.

Now, I'm just kidding. You guys are fairly new at this, but that's a good thing. How did you get your first deal? I mean, maybe before that, why real estate? How did you even get the bug? Let's start there. So really, the bug came from you guys, some bigger pockets listening to the podcast. When I was 18, I'm 26 now, but when I was 18 years old, I had my first goal to buy a house outright.

You know, my dad had just finally bought his first house when I was 18 years old. And I saw his mortgage and, you know, he had a 30-year mortgage, and he was paying triple the price over those 30 years. And I was thinking, hey, I don't want to deal with that. I just want to buy my house outright. And I thought if I didn't have to pay that large mortgage expense, I'd just grow my savings that much quicker. But then I listened to podcasts. I love podcasts. And I was looking for one about how to buy your first house.

And then I stumbled on bigger pockets. And I listened to all these investors, listen to you guys. And I was just like, no, that's not the way to do it. The way to do it is house hack. And, yeah, buy that first house. get your tenants to pay for your mortgage, your taxes, your insurance, live for free. And I was really excited by that. Yeah, just dove in and was instantly hooked by you guys.

And you know, you guys are my mentors, really. Because I didn't have any close friends or family, the bigger pockets community, the investors I listened to, all of you guys were my mentors and doing this. And yeah, we were finally able to buy our first four family property last year. Wow. Awesome. All right. Cool. That's awesome.

Yes. I love when we inspire folks to do stuff. like that. That's really cool. Do you guys see Josh's heads growing bigger right now? Oh, yes. It will never quite get as big as yours as Brandon, but, you know, yeah, it's inflating a little bit. So, all right, that's awesome. I'm glad you found the podcast. I'm glad you got inspired by it.

Lovely, lovely, lovely. So you go and you decide, we're going to house hack, we're going to buy a four family. We're not going to start with a single. We're not going to go to the duplex. We're going to just jump right in with a four. Son Marie, why a four? Dun, dun. So especially here in northern New Jersey, it just isn't...

Jazzy! ...economical to think about buying single families or duplexes and actually make the numbers work. It just doesn't cash flow. Yeah, it just doesn't cash flow. So we thought, well, why not look into something more than that? Like a three-family or four-family. We didn't want to go over four-family because then you start getting into the commercial real estate realm and the laws are a lot different. But we thought, hey, I think we could handle something like a three or a four.

Why not go for it? The numbers work a lot better in our favor. Can you guys talk about that? The numbers then? What was a typical duplex or triplex looking like? And what did you guys end up settling on with this four family? Yeah, sure. The reason it doesn't work is because of the high property taxes in North Jersey.

You know, we're only 15 miles from New York City. You know, we can take a bus and 30 minutes we're in the city. But yeah, the taxes are, you know, 10 grand, 11 grand. grand. And it doesn't matter so much if you're going from a single family to a duplex or a tri to a quad. They're all around the same for the property taxes. But when you split that 10K and property taxes on a single family, that kills the deal. But 10K on a four family, you split that up. That's only $2,500 per unit. It can start making that profitable for yourself. And the rents are relatively the same. If it's a three family single home or duplex, you know, you get the same amount of money pretty much

than you would if you have a three bedroom quad or triplex. That's awesome. Okay. So before we jump into the deal itself, I want to point out something. A lot of people tell me you can't invest in real estate when you're getting started. You can't do that if you live in New York. You can't do it if you live in San Francisco or if you live in L.A. Jersey. You can't do it, right? You guys live 15 minutes from New York City.

And you're able to do it. You're able to get started. And I think that's fantastic. So just to point out there to all the people out there making services that saying, I can't do it. Yeah. I can't do it. Figure it out. So let's hear how you guys did it.

Let's talk about that first. You found a fourplex. How did you find it? Yeah. So we found it on the MLS. searching for a year and a half. You know, we had put in some offers here and there, done a lot of analyzing of deals, looked at, we were looking at the MLS every single day for that year and a half, you know,

and feeling a little hopeless here and there. But then finally, that deal popped up. It was an REO, real estate owned property. I think Wells Fargo owned it. And came on the market. It was a 12-bedroom, four-bath quadplex. When I saw that, I got an email from Redfin, just the, and I saw it pop up on my email inbox and I was like, hey, Sun Marie, I think we just found our house. And we called the listing

agent, actually. We weren't dealing with a realtor on our own. We got a tip that if you use a listing agent, they're a lot more likely to try to work with you to try to get that double commission. So we used that. We didn't also want to drag around the realtor with us from house to house. We were searching for a year and a half. We didn't want to feel pressured to buy a no good deal. We wanted that good deal. So that's what we did. And we went to check out that house. And yeah, it took us like four months to close, but we closed on that one. Yeah, there'd been several other deals that we were looking at and we'd visited, put offers in, and it was just really competitive and we ended up not being the chosen buyer. So we learned a lot through that process.

I think we went through several of those. And so when we got to this one, we kind of knew, you know, what would be to our advantage. Working with the listing agent and going with an REO property was definitely to our advantage. So talk about the competitiveness. You know, like this, this is a newbie show. What does that exactly mean to somebody? You know, is it, are these properties just getting bit up like crazy? You know, is there anything that you can do to fight that or you just have to kind of be patient?

So, so yeah, so two weeks earlier, we actually put an offer on another four family property in the same town of Garfield, New Jersey. And we offered 25K over asking. And you went to the property. There was how many investors with you on the three days after it was listed? It was like a crazy scramble. I think there were four other investors. They brought us all in at the same time. And these guys were professional investors, definitely not their first deal.

And they wanted to snap it up because if the numbers work, there are lots of people who are looking for those opportunities. So it isn't exactly advantageous to a first time home buyer who's trying to get their feet wet. Yeah, the realtor had told us that a full cash offer was made over our 25K, you know, over the asking price. So why do you think the new house you found the fourplex? What was different about the one you actually got then from the really competitive ones? Did you guys get getting quicker or what? So because it was an REO through Wells Fargo, they had a first-time homebuyers program. So for the first 12 days, they were only accepting offers from owner occupants or like first-time homebuyers.

I love that. And that's a great tip. I don't think we've ever talked about it on the show, but there are a number of those programs. Yeah. Well, like you said, Wells Fargo, I know FHA has a program like that where it's, you know, owner-occupied. bite only, which is another benefit of house hacking. You can get in there before all the savvy investors who are experienced and got cash. And I love that. So yeah, use that to your competitive advantage and you guys crushed it on that. So that's cool. Yeah. So let's hear about the house itself.

Yeah. So like I said before, 12 bedroom, four bath. There are four three bedroom one bath units. It's actually two duplexes on one lot of property. So it's two separate buildings. What did you pay for? We paid $430,000 for it. Okay. We put 10% down. So that's 43K. And yeah, we got conventional 30-year mortgage. We got a 3.99% interest rate. And no PMI, actually, through a smaller bank. Really? Yeah.

Actually, so I think they pay the PMI, but there's no borrower paid PMI. So it was a great rate at 3.99% 30-year mortgage. We only had to put 10% down. And, yeah, it was great. For those people, we don't know what PMI is. When you buy a property, usually less than 20% down, a bank's going to require you to pay this mortgage insurance, which is private mortgage insurance, PMI. and it's like a monthly charge.

You could mean on a price, a $400,000 property, that could have been $2,000 or $300 a month. The fact that you guys got none of it, I mean, that's awesome. It just shows you, you know, shop around, talk to different lenders, see what you can find. But that's definitely awesome. That was a tip from a bigger pockets member, actually.

Like, we were looking at other banks, and everyone's like, even my credit union is like, no, you got up a 25% down for this four family. And so I post it on bigger pockets. I'm like, hey, how am I going to get this financing? And this member, I should have remembered his name. But he was like, hey, check out Trusco Bank. And we did that.

worked out great. Awesome. I love that. I love that. All right. So what is your, what's your total payment on the property, you know, taxes, insurance and, and your mortgage? Taxes, insurance, mortgages around $3,400 a month. Okay. And then what are you guys renting those units out for? So unit three and four are renting for $1,700 each. And then we're living in unit one. So unit two, actually, her family moved in and we're giving them subsidized rent at $1,000 a month. But market rent would probably be close to $1,500. So in total, we're renting $4,400 a month while we live there. That's awesome.

So we're cash flowing at about $1,000 a month. If you don't include like maintenance costs and vacancy considerations, we're cash flowing at about $1,000 a month. Sure. And that's while you're living there. While we live there for free in one of the units. If we were to move out, we used like you have $1,500 for one of those units. So that would be $2,500.

If we got market rent for the unit that your parents are living in, we'd get another 500. So we're easily looking at $3,000 a month in positive cash flow. That's amazing. Even if you have the tax, I mean, if you have repairs and stuff, you're still going to be cashpooling stupid. Yeah. No more than $1,000 a month of that. So we'd be cash flow in $2,000 a month. Yeah. That's amazing. And that's one of the benefits of house hacking is that when you move out, a lot people don't know this, but when you move out, you don't have to pay the loan back. Like, you get to keep that 30-year fixed loan for as long as you want it.

So it just kind of sets you up. Like, not only is it, you know, this is why you're I just get so excited about house hacking because it's like training wheels. You get to learn how to be a landlord. You get low down payment. You get the first time home buyer, you know, getting in there, you know, before the investors do. It's just like benefit after benefit after benefit after benefit. So what about bad stuff? I mean, what bad happened in the situation, if anything? What are the disadvantages of what you guys did? So it was actually a vacant property when we purchased it from the bank. So there was quite a bit of holding cost for the, I guess we did a lot of repairs ourselves. And it took us about three months to finally get it ready to rent it out. So there was quite a bit of holding costs on our end for that. And if I would probably do it, again, I'd ask for more help me, hire some contractors to help us out with it. But we kind of just got our hands dirty and really put our sweat equity into it. Yeah, so the holding costs were a little bit painful in the beginning, but it certainly was an amazing learning experience. You know, we have a much better understanding now of what goes into certain repairs, what to look for on our next deal, you know, what are big deals, what are things that are quick paint fixed, you know, something's

simple. So it was a good learning experience worth it, but definitely financially in the beginning, there were a few months there that were pretty stressful. So, all right, so you guys went, you put in the work, you put in the time, you put in the energy, but obviously there was a cost there, right? So you spent $430,000. How much did you guys put in in repairs? We put in $20K of like material costs. Okay. That's just materials. So $20K materials. If you had hired a crew, you're probably talking another, what, $10, $20, $30,000? $5.30,000, I'd say. So you're 50K in, you're at 480 then all in. Well, not 480, but you're in an extra 50, right?

So, you know, for any newbie listening, this is great. You know, the numbers are great. But if you actually start to amortize that $50,000 over the next 30 years, that cash flow that Sonny and Someree are talking about shrinks dramatically. So it's really important that anybody who's new at this, keep that in consideration. your cost to repair, your vacancy rates, your cost to manage. I'm assuming you guys are managing yourself,

but at some point you may have somebody else managed. So it's a consideration you want to put in and everything else. You definitely want to take those numbers up front. Look, if those things don't come to fruition, it's great. It's more money in your pocket. But if you're buying a deal, you definitely want to make sure you account for that stuff.

We were able to actually refinance about three months ago, I think like 10 months after we closed on the property, and we pulled out $67,000 in cash from the bank. Our property appraised for $120,000 over what we bought it for. It pays for $550,000. We pulled out $67K left the rest of equity in the property. We only put 10% down and now there's about 20% equity in the property. And we pulled out every dollar we put in $67K.

So that was $42 for closing and about $20K for materials. Awesome. We got that back pretty much. I love it. That's like the perfect house hacking story. I mean, everything you guys have done, That's what, like, we preach a lot. Like, it's not the only way, but it is such a good way to get started.

So what has changed in your life since this? Like, what has this done in your life, done for you guys for your future or stuff like that? Yeah, so before we bought the property, we had a baby. And Sunry was on maternity leave while we were searching for these houses. And so we were making $4,400 a month in gross rent. You know, we were talking about, are you going back to work? Are you going to stay home?

We really wanted to be able to stay home, have summary raise our child, you know, be there for him while I'm at work and not put him in daycare. So this just made it such a clear, easy decision. You know, $4,400 a month in rent, that's $52,000 a year, dollar for dollar that replaced her income. You know, the gross rental income replaced her salary. And you got to live somewhere. So, you know, you're paying for those costs anyway. So it was just like an easy decision, you know, stay home, be home with the kid.

We have the financial freedom to do that. I love that. I love that. And that's why we do real estate, right? I mean, yeah, it's exciting to say, hey, I get $4,400 a month in cash flow or whatever. you know you're saying, but the real benefit is, hey, I get to quit my job or, hey, I get to travel more, I get to raise my kid, I get to go on this vacation. I mean, whatever it is that people want to do, that's why we do real estate. And you guys are a perfect example of that.

Very, very cool. That's awesome. Let's kind of, I have one more question before we shift on to the famous four, and that is, like, why do you think most newbies, like never get to the point where even you guys are, or at least a lot of newbies? I don't know if you can say most, but why do you think a lot never buy that first property? They never actually jump. You know, I think it's like you don't put in the effort. You know, we were putting in the effort. We were listening to audiobooks. We were listening to the podcast like every week.

We were searching for deals every day. Well, yeah, we were searching for deals every day, analyzing once a week. You know, we were putting in that effort. And when that deal finally popped up, we saw it. We knew it was a deal. We jumped on it. We were prepared. Yeah, we were committed to doing this.

Like, we knew this is what we wanted. Yeah, we weren't watching TV at home. You know, we wanted to make this work. We wanted to make it happen. And we did. Another thing, too, when I was, when I was. was growing up. I helped my dad fully restore a house. I was an 1890s Victorian. So I had a lot of sense of what goes into certain kind of projects, you know, whether this is a crumbling wall you have

to worry about or if it's a simple fix. So that helped too in our search when we went into properties. We weren't totally clueless about, you know, what needed to get done. You know, we had an idea, oh, this actually, yeah, maybe it's a good deal, but it requires 150K just to bring it up to standard or no, this is a simple paint and patch and move on type of project. So that helps us. That's great, guys. I can't think of the word. You guys have done a great job.

You're proud daddy. You're proud daddy. I'm so proud of you. You guys have done great. And, you know, congrats on all those success. With that, what do we get to the famous four and then we'll let you guys out of here? Out of our grasp. All right.

Let's get to the famous four. All right, these are the same four questions we ask every guest every week. So I'm sure you guys have heard them before. But let's see what you got to say. And you guys can have the same answer or different ones. It's okay. Number one, what is your favorite real estate related book? I'm just going to say the ABCs of real estate investing.

That was the first real estate book I really listened to. And it made the most impact because it was the first. Cool. And I don't read real estate books. Well, she does. She listens with me. I listen to your podcast. That's where I get most of my knowledge.

Right. Awesome, awesome. And yet you wanted to come on the show, so, you know, I don't know. Something's wrong with you, obviously. What about favorite business books? So I don't know. I feel like every time I read a business book, I'm just re-inspired. I'm like, oh, this is the best book. And two weeks ago, I finished Outwitting the Devil by Napoleon Hill. And I really loved that book. It was amazing. And just kind of talks about fears. And in the book, the premises, Napoleon Hill is interviewing the devil. He somehow managed. to capture the devil and force an interview upon him. And he's asking him how he uses all these devilish tricks to enslave humanity and never get people to succeed. It's really an intriguing book really well done and got so much inspiration from it. Cool. Son Marie. Nothing.

She doesn't read those either. Son Marie. Too busy with my son. Okay. Next question. Sun Marie, what do you do for fun? What do I do for fun? I am an artist.

So I love painting. I get the chance and lately I've been getting into woodworking. So that's what I do for fun. See, she woodworks in paint. She doesn't need to read. That's right. Oh, myself, I'm a very active guy. I love Ultimate Frisbee.

Yeah, I love that. Yeah, nice. Every week. Yeah, I'm in a third. Oh, you and I got to play. You and I got to play some multiple Frisbee. Yeah, definitely down. Didn't we have a disc golf guy too?

On the show back a few months ago. Oh, yeah? Yeah, I play, I'll have disc golf too, but I I just play with the ultimate disc. I don't have the whole set. Yeah, I'm the Frisbee. Ultimate Frisbee guy. Anyway, cool.

Yeah. Volleyball. I love running. Yeah, we've been going on microadventures recently. Well, not with Sunmi, but Sunmi lets me go out with a bunch of guys in the middle of the work week. And we go out, go camping. And then next morning, we just return to work all of us. So, yeah, that's been pretty sweet.

It's got a cool. Yeah. Good stuff. I like it. Cool. I like it. I like it. Very cool.

All right. Well, you know, last question from me. What do you guys believe sets apart successful real estate investors from those who give up, fail, or never get started? Looking past your fears and just really jumping in and trusting that things are going to, you know, work out well and you can handle what you're getting yourself into. Yeah, I mean, you know, you analyze enough of those deals, you know, you know what's going to work. Trust those numbers. But, you know, you got to practice with those numbers to understand whether it's going to work or not. Once once you do, you understand clearly, okay, this is going to work.

Let's do this. Awesome. Hey, Brandon. I preach that on the webinar every single week. Yeah? Where can people practice those numbers? Well, if they want to practice the numbers, they can do so on the Bigger Pockets Rental Property Calculator, Burr calculator, or flipping calculator or wholesaling

calculator at biggerpockets.com forward slash analysis. Nice. Nice. Yes, well played. All right, guys. Well, listen, congrats on everything. Like I said before, before we let you go, where can people reach out and find you, connect with you?

Yeah, I mean, I'm all over the bigger pockets. Forums have been a lot more active recently now that I have some knowledge. And also, I have a blog, famvester.com. We talk about our journey and kind of developing passive income streams and just kind of investing in the family and, you know, what we're doing. It's kind of interesting. Cool. All right, guys, thank you.

Thank you so much for coming on. Thank you for sharing your story. Lots of luck to you going forward. And obviously, we'll look forward to seeing you around bigger pockets. Congratulations. Thanks for having us. great being here. See you guys. All right, guys, that was Sonny and Sun Marie. Big thanks to them for coming on the show, sharing their story, telling us all about that first deal. That's awesome,

man. I mean, you know, again, in a market where most people are like, oh, this is impossible, I can't get it done. They went out, figured it out and made it happen. Now they're making some good money. Yeah, I think it's all about, you know, changing that paradigm in your head of like, it can't be done to how do I make it work? How do people make this work in this market? And so, yeah, if you guys live in San Francisco, you live in L.A., Seattle, Denham, or whatever where you're saying it can't be done you know it can be done you just got to figure out how to make that happen yeah there's two different kinds of people in this world right there's the people who are like oh you know the problem is the complaints and all this other nonsense and those people are like

i'm going to find a way to make this happen yeah and you you got to be that if you want to succeed in real estate investing game you got to figure it out so go ahead i was going to say so true there's a quote one of my favorite quotes by uh jim roan he he says something like if you i'm going to butcher this But it basically said, if you really want something, you'll find a way. If not, you'll find an excuse. That's what everyone does, right? It's like, I can't do it because of ABC. So anyway, people love to call real estate passive income,

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slash rookie. Terms and conditions apply. Hiring, indeed, is all you need. 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. They just launched 10-day DSCR closing. That's right, 10 days. And they're still the only lender with a DSCR price beat guarantee. That means faster closing, the best terms, zero guesswork. That's Dominion Financial. Check them out at biggerpockets.com. slash dominion. Again, that's biggerpockets.com slash dominion. All right. Well, let's go down on the interview number two. You want to introduce Sam? Yeah, Sam. Yeah, you're just not introducing him because you don't know how to say his last name. That might be true. I don't either. But it's Sam Valmy, I believe. Unfortunately, we really should

ask Sam how to actually pronounce his last name. But Sam and his wife were headed towards a life trapped by massive debt. But instead, they discovered bigger pockets and the power of real estate investing and use real estate to get them one step closer to financial freedom, which I'm sure rings true for lots of you guys that are listening. Specifically, actually, Sam's got a great story of using his property as an Airbnb vacation rental. And his story actually inspired Brandon to finally get his own vacation rental started. And I'm sure he won't shut up about that over the next couple weeks or months or years. I'll be telling that story. Yeah, I finally got my first Airbnb going. I just went to Costco and bought a bunch of furniture.

But I needed a few things that were new, like a nice couch. So got that. Nice. Yeah. So, yeah. Anyway, so, you know, it's excited to hear about this. And Brandon, we definitely want to hear how this goes for you. So let's bring in Sam. All right, Sam, welcome to the show, man.

I have to say it is not just good, but it is great to have you here. Thank you so much. It's an absolute pleasure. You know, we got another day, so let's maximize it, right? Exactly. There you go. All right. So let's get into your story a little bit.

Yeah. What's your story? I mean, before real estate. Like, who are you? Where do you live? What do you do? And how did you discover this whole thing called the real estate? Yeah.

What's your address? You know, what's your zodiac sign? All that. So I was abandoned as a child to start. And after that, I found a house. Did you slap with that? Yeah. That was it.

Actually, no, I wasn't actually abandoned. But it's a funny story because I'm 25. I just turned 25 Christmas Eve a couple days ago. Happy birthday. Thank you. But that marks around seven years. I've actually been in real estate. I just didn't know it.

When I was 18 years old back in 2010, my mom gave me an ultimatum. And she said, hey, you can go. Well, she had just recently gotten married and there was to move out with her new husband. And she said, either you can go away to college and we're going to sell the house or you can pay the mortgage. And I said, okay. Like mom? Yeah, mom's great. That's how more people should raise their kids, right?

But it was good because she, you know, gave us a fair, a fair. question and said, you know, if you want to be a man to take care of the house, then a mortgage is part of the house and everything that comes with it. So I said, you know, give me a week. And I ended up getting my two friends, Gary and Gary and Nate. And they were my first roommate slash tenants. And we were able to take on the entire mortgage. Fast forward six years. I had 11 total roommates, not including my wife, who also lived with me. We lived in the basement. I rented out the upstairs to the house for around 1750 a month. And we did that for the longest time until this past year. Okay, so I just want to clarify because what was it, Gary and I'm trying to keep up with everybody here, but we're at home.

We're 18. Mom says go to college or pay the mortgage. Did mom like bounce? Did mom go and move somewhere else? Mom had another house. Yes. And she said, hey, you have the option if you once because I was at that age. I was graduating from high school. So you were at the age where you typically were applying to colleges. Little did she know, I never did because I knew I was going to go to community college because also partly because of that was. I was too lazy to apply for college. But that kind of worked out. So she gave you the house provided you could pay the note on it. That's correct. Wow.

Good on a mom. All right. So you went, you got a bunch of roommates. And over the years, you found people to help you pay for it. Great. Now, that's not what the story is, right? That's the prelude to the story. Right.

Okay. Okay. So this led to you becoming a real estate investor. Right. So the real estate investment portion actually happened last June started off. I was on a plane. I travel out of myself, I'm a consultant by trade. And I travel a lot for work. And I found this book called The Ultimate Beginners Guide to Real Estate on iTunes. Okay, okay. And from there, I didn't read it for about three months until, you know,

give it, take the November, October timeframe. And that's when I really started to, I found bigger pockets. I became a member from there. I started during our local RIA group. I began to read books like, of course, the rich dad, poor dad, the e-math, all those great books. And I really started to understand that, you know, I have this, how. I have this house. that I've been living in for the longest time. And I'm actually doing how I'm actually house hacking. I didn't know. That was a word for it besides just renting out your room. I didn't. I thought that was pretty cool. So I said, you know, okay, so understanding more about real estate, I realized that that debt pay down that you get when you are an investor is now going really to my

parents are taking advantage of that right now. So I begin to think, you know, we have this great place that we live in. Me and my wife kind of wanted to stay for a little while. We had other aspirations. So we did the next logical thing to becoming an investor. We went on and got a real estate licenses because that was a good next step. From there, we decided that we were going to buy the house for my parents. So when we bought the house, it was a lot of work that needed to get done to us to be essentially brokered a deal where we bought the house for a little bit less than what it was worth, but they actually gave us a gift in equity to pay for some of the repairs to the house and also to buy a lot of the furniture too. What we ended up doing is over the course of about three

months, we purchased the house in give or take June. We did a full renovation on a house, floor renovation. I mean, top, bottom, we did floors. Me and my wife and friends, we painted the entire house inside and out. From there, we actually decided that we were going to move upstairs, but we still wanted to experience, you know, getting that paycheck every month, right? But we understood that by now living in the basement, we were going to lose a lot of that income because we didn't have three bedrooms we could rent upstairs to five-bedroom house total. So what we did was we actually turned the basement into an Airbnb. So what that allowed us to do was we're typically a basement with no kitchen around where we live with rents out for

around $1,000 a month. This past month in the month before we've been able to clear around $2,200 a month for our basement. Wow. Nice. Yeah. So we purchased for $255 back in June. And what we're actually looking to do now is sell the house this year for around $360.

So looking to make it turned out, we thought it was going to be a long-term investment. We looked at the numbers and some other personal goals. And we realized, you know, being so. young we can pay off a lot of debt, be able to essentially be virtually debt-free in a matter of a year. So our first investment really turned into a buy and hold slash flip. Wow. That's awesome. That's a great story. Thank you. Have a nice day. See you later. That's why I came. Okay. All right. That was good. All right. So, well, I mean, a lot of our questions kind of go by the wayside. How'd you find the deal? Well, that was an easy one. How did you finance it is going to be an interesting one? So how did that work?

Yeah, because keep in mind, I mean, me and my wife, we made a decent side, but living in northern Virginia, the costs of homes here are, you know, extremely high, especially for someone in the early 20s. So financing, we did a 5% down FHA loan, which we, which you put down, you know, our 5% for. But really, to really get the value and to do this project of the Airbnb, the real portion of it was that home equity, not home equity, not home equity, the gift of equity that we got from my parents, that gave us the funds to the next. necessary repairs. So some of the listeners, an FHA loan has certain requirements to actually get the loan than other conventional loans do. For instance, no chip paint on the exterior of the house. We had to ensure that the roof was going to last for X number of years. So we actually had to do a lot of repairs prior to even beginning the purchase process before we began a purchase process. We had to do a lot of repairs before we could even get approved for the loan. So that was

an entire process by itself. Yeah, that makes sense. So just to throw this idea out there to people as well, if you guys are looking at a property and you want a FHA, you want a house hack or you want to buy it into Airbnb, and the property is not in good enough condition. FHA does have a program out there called a 203K loan. It allows you to wrap the repairs into it. So that is an option just in case you guys are like, oh, well, I don't have, you know, the seller's not going to gift me the repair, so I quit. There's always a way to figure this out. So that's just one technique just to throw out there. But how much do you think total you guys spend on repairs in that process, like fixing it up,

getting it ready to buy? $40,000, including the price. for the basement. Wow. Okay. So 40,000 total. And that was gifted to you from... No. 25 was gifted to us. We did the, we did our actual, we did our down payment and another 15,000 out of pocket. Okay. Okay. Got it. And then let's talk about, I want to talk about the Airbnb thing. I mean, like, why did you, you did that because you can make more rent from it, I'm assuming, right? You can get more money. Absolutely. So at first, we were just actually, when we first started the project and the thing by in the house, we were going to stay in the basement. We figured we continued we continued. We continued,

to live downstairs who just wouldn't have a kitchen still. I'd never experienced a dishwasher growing up, so I never knew what it could really give you. So, you know, my wife was one lobbying really like, all right, we're going to buy this house. I'd like to live by the front door. It's kind of embarrassing telling our friends to come around back and the pizza people, you know, every single time. Which allowed her, she eventually figured out she was lactose, so the pizza person was no longer an issue. So I had, but in all seriousness, I agree with her, right? You know, we had worked, we worked really hard.

We both did really well in our careers. We were still kind of coming up, but that's why we chose to do the Airbnb, because now what we can do is if you break it down on a per night basis, you can charge significantly more than you can per for over a long term for a month. Also, keep in mind, too, that every single night or potentially every single night or every other night, your unit's turning over. So the repairs, for instance, when we came upstairs and like, this is no shot of the guys I had living here, I love you out of death, by the way. When we came upstairs, do that renovation to be upstairs, oh my gosh. Like, you could tell for seven years it had to be a rental. I mean, these guys were hard on it. We had to replace all the carbop.

We had to replace the carpet in the basement, but also refinish the floors downstairs. Like I said, paint the entire thing multiple times, do a lot of repairs to the walls. So with the Airbnb, you don't have that. Every single day or multiple times a week, potentially, you're turning your unit over. It's getting clean. It's getting updated. And you're making sure that's because you get that real-time feedback, right? If something is not clean, if something is not taken care of, the tenants will leave reviews and then you get less income.

So it's not only the initial, yes, you get a lot of money up front, but also long term, too, there's less wear and tear on the space. Yeah. Yeah, I love that. How many days a month do you think you're keeping it filled? We right now are about a 95% occupancy rate, and that's going into January. And we have bookings out of July. Now, do you live in an area that's just super touristy or who's renting your place? Yeah, that's the question.

I live about 45 minutes outside of Washington, D.C. And what's around here? We have Dulles Airport, 30 minutes north, Quantico Marine Base, almost an hour south. What's around us? And honestly, when we thought about this idea, we talked to talk about the friends, they were saying, you know, there is nothing in Manassas, it's not the, you know, Manassas Battlefield. That's where we live, by the Monassas, Virginia.

There's nothing out there. Why would anybody want to rent an Airbnb? You don't have a tourist attraction. You don't have any events that get out that go out there. but looking back on it, I like to say, I had this all figured out, I knew it was going to work, but I really didn't. I was just kind of like, eh, you know, if it doesn't work out, I'll have a furnished rental, we can just rent it out for a additional $100 a month. Hey, it'll be fine. But we did it and we had, at first it was a slow trick.

We had this huge response. What we realized was folks will come into this area, just Northern Virginia in general for work very often, traveling to and from the airport, even though it's farther away because we keep our prices competitive. And then once you get, go through your initial introductory phase and how you do pricing in Airbnb is a completely different story we can go into. But once you do the introductory phase where you bring your prices low to get the reviews, the people sell it for you. So now you don't have to worry about really, you know, marketing your products. People coming through and saying this is so modern, this is so up to date, this is so beautiful. It really allows, you know, other folks to see like even in a larger radius now, now we have folks that are going to Quantico and now almost an hour away asking about our place. We have folks that are going to D.C. where there are plenty of Airbnbs in D.C., but because we

offer a better product, at least you like to think so, they're willing to stay out further because we are a little bit lower price range, too. So it's really being competitive with the pricing, but it's also recognizing, you know, having a bit of faith, but also recognizes the things that other folks might not see like Virginia wine country. On the other side of us, on the other side where D.C. is there are 142 somewhat wineries in the area. We get a lot of folks. We have bookings out in July, like I mentioned earlier, just for folks. coming to wedding venues, going to tour, wine, different wineries and things of that nature.

So there may be more in your area than you actually even know because you don't necessarily visit every single thing every single day. I love it. I love it. Yeah, I mean, that's a great point. If you're thinking about doing an Airbnb, you want to figure that out, right? Because no longer are you renting a house to somebody who wants to live there,

you're now kind of like an innkeeper, right? So you need to know what's around. And you got, you know, I think you got a bit lucky plus a bit of, you know, smarts there. I want to hear this pricing thing. I know we've talked about it before, but for those people who haven't heard it, you'd mention keep prices low when you're new on Airbnb, get the reviews, get good reviews, obviously. And then you boost the prices. Is that kind of the plan there?

Yeah. So you keep the prices low to start off with. So over the first two months we had what we call, we let folks know when the listing is that the introductory pricing, so they were getting a deal. number one, but we did that almost to about 75% of what we would actually list for for about a month. And then what happens is that you do that for a one month, but keep in mind those prices they can book anywhere within that year, however far out you let people book for. So depending on how popular it is, you could be a little too active in the first month and the second, third month, have some lower numbers. But since I looked at this back in November, but we started in August, so August, September, October.

November, we had hosted 142 guests in our space. So with that comes 142 different reviews. And also, it depends on also how you list. Because you don't necessarily have to list your entire space that you have. We have a private entrance. But what we also did was we put electronic locks on each door. So now we have two different units that we can rent individually as well as the entire space too. So that allows to get even more feet in the door to actually have even more reviews. Nice. Interesting. So are you saying like each bedroom has an electronic lock on it. Each bedroom essentially becomes its own unit. So you might do like, hey, common area, the kitchen, the living room and all that is common,

and then you'll get your own private bedroom. And then you're not just running out the house. You're running each bedroom out. Exactly. And what you do is it's almost one of those things where if you buy more, it's cheaper. So per night, it's actually more expensive to rent our space by those individual rooms if you added them together. So we actually incentivize folks to rent the entire space because,

on the other side of that story is turnover now. You know, with a typical investment, if you're doing a long term, you put the tenant in place and they'll call you there's any issues. But here, every single time someone turns over, you have to have someone there to actually, you know, turn the space, which can become its own job, which it is a job. It's called a cleaning services. Which if you ever go to a hotel and you see the maid or a cleaning person, thank them because their job is hard. And people don't recognize that, you know, service in the service injury, but you have to take that role on. And as far as taking it on, because we did so well with the Airbnb, my wife actually, you know, we made the decision to allow her to actually take it on full time because we were

making that widening of spread on her paycheck. So that was one definite big benefit from doing this model. Can we talk about the turnover? So, you know, what is what does it actually cost you per turnover? You know, you're not doing it. So you've got a cleaning service. Are they charging you monthly? Are they charging you for each time it gets turned over?

How does that work? And what does that actually look like financially? Without being super misogynistic. I do not have a cleaning service. My wife actually does it. Oh, okay. Yeah. So what was nice about it was because we were getting such, you know, that widespread,

she was able to leave her job. She was able to, yeah, she was able to take it on full time. And which is at the end of the day, the goal of investing, right, is to be able to find another passive source of income to be able to allow you to leave that hour and a half commute up and down 66 where we live. So my costs are very, very low. Or our costs, I should say, very, very low. On a supply base, we do provide water.

We provide snacks. We provide, like, breakfast biscuits as well. It's about $100 a month. So it's not too expensive. Now, we did run the numbers if we had to have a cleaning service turn this over for us. And we were looking between $6.50 and $8.50 a month with some of the contract we could have gotten. So, you know, there are folks out there that will do what. We did interview a lot of different companies as well.

Now, on Airbnb, the tenants, that are staying there, they pay a little extra, there's a cleaning fee, right? I mean, I pay it every time I stay Airbnb, right? Not necessarily. So it all depends on the host. Yeah. So the host. Oh, I don't know that was optional either. Yeah, it has complete control. I can charge a cleaning fee. I can also charge a security deposit. Depending on where you live as well, you might also see certain taxes for a hotel tax, for city occupancy tax things of that nature, like in Texas and New York. They have those things. Also in D.C., of the city, they also charges additional taxes as well. But we try to make it as simple as possible because when you're on Airbnb, access is the key, which is why we rent to our place

in so many different methods, because depending on how you want to stay, if you just want a room, okay, you can do that with us. If you want the entire space in your privacy, you can do that with us as well. And by the way, we don't see our tenants. It's a completely separate floor. We have a lock on the door. We have cameras all throughout the exterior of our house as well. So we can see, not in the bathroom or in the bed. We flirt with the idea of the shower, but after potential lawsuits, We didn't want to actually, we just didn't want front of the money for the lawyer, to be honest. That was, that was. Do you guys actually have any in or are they all outside the property?

All outside. No, we don't have anything. And we let folks know, too. And they've come in handy. We had an arrest. Really? Had nothing to do with the Airbnb, but it was a drunk person on a back to sports, but because we had the cameras we were able to actually see them.

We were so scared that it was one of our Airbnb tents because we had folks coming. But having that extra layer security has come in handy. So, yeah. And you're using those electronic locks, like, you know, when somebody's says they want to rent it, you just give them the code, and then you change the code when they're done. Exactly. Do you know offhand what the brand or what the kind of lock is?

I don't know. It's okay. Somebody's not going to say, Phillips. That's not it. If you think of it, go ahead and let me know and we'll put it in the show notes at bigger pockets.com slash show 210. It's Schleg. Specifically, it's this.

I don't know why it hit me. Oh, Schleg, there you know. I have that exact lock on my office door right now. Combination. 274. Anyway, yeah, that's a... So you just give them the combination, you give them the code, and do you have to change the code often?

Do you change it monthly or something like that just to make sure it... Yeah, we have a schedule. We don't publicize the schedule. But yeah, we have a schedule. We not only change the interior lots. We also change. We have a lockbox outside. We change that frequently as well.

And when we do is what's nice about Airbnb is you have your house manual. So what you do, which essentially is update your house manual. And then from there, every guest that's coming to your house. house, but we'll be able to all see the same documents. So you just change it once and then it's good to go. Perfect. Cool. Awesome. Any bad stuff beyond the drunk guy on the porch or has this been going swimmingly for you guys? You know, out of every, we estimate out of every hundred people you're bound to get one not so good, potentially person or couple. We did have to remove one person. They were smoking illicit. Well, I can't even say explicit anymore because it's like super legal

in almost every other state. There's smoking weed in the house, which we say no smoking on the property. And, you know, frankly, you know, me and my wife don't partake. But it's not even a matter of our personal preference. It's a matter of the guests because we have to now wipe down the entire house. It's just not. How did you figure that out, by the way? Two things.

Talk about the cameras. Number one, we walked in the house at two in the morning after being out, you know, on some other business. And the house reaped. So that was number one. But we had two separate tenants in at the same time. So now the question is, how do we know, who it is. Ah, but the cameras. We're able to actually open up the camera on our app and we were able

to see which guests were the ones smoking. So we message their reservation. Let them know, hey, it's not enough to cancel your reservation, but just don't do this again. Next morning, woke up 7 o'clock in the morning. We're smelling it again. Like, no way. Open up the cameras. We're seeing them live on our phones, continuing to smoke out right outside the front door, wrapped, by the way, in one of our blankets that we provide too. So we're like, you know what? You know, two strikes, that's pretty much what we do. So that was the only time we actually had to have some folks to leave. Other than that, you know, that was about it. How did that go down? You know, like you're, you've got a guest who's staying with you who's just paid you who's, you know, hey, I could do what I want, right? How do you actually

escort them off the premises? How does that whole thing go down? Yes. So this is something. This is not an eviction. You don't have the sheriff with you. Right. You don't. You don't. So it's, and this is kind of one of those things. So how do you handle that situation. You know, we talk about it, but unless you're there, it's completely, writing down a policy on a piece of paper on a Google Doc is completely different than having to see someone face to face. You know, make that kind of call. So literally what I did was I walked downstairs. I knew which room they were in because, you know, we could just mash them up from the camera, knocked on the door. And, you know, they asked if they can give me a minute. I sat in our living area and I just waited for them to come out. I let them know, hey, I warned you on the app. We got to be on camera twice

smoking. We also have screenshots over too. We like to ask you, Leaf, and we won't report to Airbnb. If you don't, we'll have to call the authorities and won't have to report your account and won't be able to use the service anymore. And the difference is, is that when you have folks leveraging something like Airbnb, it's based on a community, right? They review, we review them. They review us. If you want to continue to use the service simply and not, you know, make it difficult, you want to be as honest

as possible. So in their case, you know, he said, I don't know if he was really being honest, but he said, oh my gosh, I didn't see the first message we didn't even know. Oh, but you also didn't see my house rules. I clearly said no spoken on the premises. We'll let that slide. But, you know, he, uh, him and his, him and his girlfriend, they said, you know, definitely not a problem. I will leave. And they did. About 30 minutes later, they left and they, of course, tried to cancel their reservation so we couldn't give a leave review. But that's pretty much how I went down. I approached them face to face, told them what the repercussions were going to be. And I watched them walk out to make sure that they didn't take anything

or damage anything outside of that. So you just, you waited in the living room for them to get their stuff and get out. Yeah, yeah. Some people may not be as bold, but I don't like to take them. So I was like, I'll just wait here. All right. Nice. Nice.

That's cool. So what about going forward? What's your real estate plans going forward in life? Yeah. So the first and foremost, I mean, that was kind of the cool story. You know, we're going to make a decent spread off selling it during this year. but I have to say bigger pockets, and this is not, you know, I'm not trying to hype you guys up, even though I kind of am. Bigger pockets actually saved me and my wife's lives in a sense.

And I want to, before that seems kind of bold statement, but I want to explain why. Because right before, when I met, I mentioned before I found that book, you also in beginning of guys to invest in back in, you know, last summer essentially. And I didn't look at it for that period of time. And the reason why is because we were actually about to purchase the townhouse up the next, the next town over for almost, you know, half, million dollars because we qualified for it because, you know, we had done so well in our careers. We had the income for it. And, you know, we were really about to do it. So I thought, you know, we're not going to have the money to invest and not worry about. I have a 401k. You know, it's fine. Me, my wife. We both have, you know, money saved up. We were just fine.

But if we had done that today, we would probably be over $600,000, you know, worth of debt. And we would have paid off some of that, of course, paying over the mortgage. But we would have no leverage in our real estate at all. So with this experience, in this experience, in this, year we realized that we were able to make a purchase and now instead of being further in the hole wipe out almost all of our debt completely right and for you know having a 10 year student loan payment that was supposed to take you 10 plus years to pay off or whatever it is to be able to take all that out in a matter of you know two or three it's pretty impressive so we've seen the power real estate we're believers now so what we're going to do is we're going to take some of the

capital that we've uh that we're going to get from the sale and we're actually going to move to a place probably down south that's a bit more affordable most something in the georgia area right in Atlanta. My dad lives down there. He's also investing, and that's kind of like the back-back story. My dad and my stepdad were also investors, too. And I remember as early as being in a seven or eight, you know, my dad taking me to triplexes. I didn't know what they were doing. He was just fixing like a toilet or something. But he's been, he has like 21 properties, you know, in between Jersey and around that area as well. So learning really how the veterans do it like in person. I'm in Atlanta. and me and my wife want to be able to at least purchase one by the end of 2017 in that area.

And the goal is one a year and snowball. Everyone has different goals when it comes to real estate and financial freedom. Some folks want to build a large company. Other folks just want to have some extra money. You know, we've really thought about it. And, you know, if you've ever read the book, the one thing, there's a story about the fisherman and the businessman. Where, yeah, everyone's heard it. Long story short, the businessman sees the fisherman who seems to be relaxing all day and fishing and says,

hey, you know, I've just had one of your fish from the market. They'd say, so good. Why don't you come and sell this fish in a yos? You can build up a huge company. And one day, maybe you can sell that company and retire. And the fisherman says, well, what am I going to do with or retire? He says, well, whatever you want. And he says, well, I want to fish.

Yep. We thought about that. And that's what we want to do. We want to, we want to figure out what our fish is or what our why is. So we want to be able to afford that. And down in Atlanta, we're going to have the money. We're going to be financially free. And we're going to be able to be able to.

to purchase more and more investment properties to, you know, realize that dream. Awesome. I love it. That's great. Let's start to wrap this thing up and head over to, I mean, I love your story. I feel like we can talk about this stuff forever. And especially like you've inspired me in a large way. I have a property right now that it's about a week from being finished.

It's almost done. It's a beautiful little house. I bought, I paid cash for it at an auction. Anyway, and I've been trying to figure out what to do with this. Do I want to sell it, rent it? I think I'm going to do Airbnb. I think I'm going to try it out. You kind of inspired me here.

Absolutely. Yeah, I'll let you guys know, you and the rest of the listeners know how that goes. I really think you need to Airbnb those Kirk Cobain houses. I think people with love to go and stay in a Kirk Cobain house and say like, oh my God. Where it goes vacant, I will. I will. When it goes vacant again, I'll probably do it. Anyway, all right, let's shift gears here and head over to the Famous Four.

Famous Four. Let's jump into these things. These are the four questions we ask every guest every week. Number one, what is your favorite real estate-related books? I make that super easy because I sit with it on my desk. There you go. Millionaire real estate investor, that's number one. Also, I have to say I did a little bit of editing for this other book because of real estate investing.

It's called the, and you may know the name, Brandon, I think it's called something to do with the book on managing rental. What was it again? The book on that happens to be the one of the best ones ever written. Yes, that's it. That's another favorite of mine. I had the opportunity and I'm not sure you remember, Brandon, to actually listen to the pre, the pre-done version of that and I provided some feedback

so that was another great one. I didn't know that was you but that's awesome. Yeah, I told you we've been dating for like a year. Yeah, that's been a while. That's awesome. Total stocker.

Yeah. Well, cool. Very, very, very cool. All right. That's great. What about favorite business book? Favorite business book? Next one.

I like the other. Also on your desk. Also on my desk. You watch them every day so you remember if you don't read this book and the Kinski with glare, it's the E-Bith by Michael Gerber. If you don't read it,

read this book, just know that there's three types of people when it comes to business. You have the visionary, the strategist, and the tactician. And they all have very unique places in business. And you need to identify which one you are, which one you want to be. So that's, that book really helped me understand not only my business in real estate, but also this to my business when it comes to my software consulting as well is what we do by day. I love it. I love it.

All right. And what do you guys do for fun? So for fun, the biggest thing is, you know, finding that fish, right? Finding what your why is. So what we do is me and my wife kind of came to the conclusion that it's too much to ask. It's almost too difficult to ask somebody like what do you want to do with your life or what do you want to do, whether it's skiing, fishing 24-7. So we just want to try a bunch of stuff. So hanging out with my wife and our family and we're going out potentially skiing in a couple weeks again.

We like to go to hiking. We like to travel. We want to go to Tahiti some point throughout this year as well. And hopefully real estate is going to be able to allow us to do all those different things. I like playing video games too, MMO RPGs, by the way. So, fun stuff. What's your favorite game? Final Fantasy 14 right now.

It's another backstory. That game is still around? Oh, my God. That game is still around. It actually got canceled in version 1.0 like three years ago, and they resurrected it. No pun intended, because that's a move in the game. Cool. Nice, nice.

All right, my final question of the day. Sam, what do you think separates the successful people from all those who give up, fail, or never get started? That's a really difficult. I think folks say grit too much. They say it's just grinding too much. And at the end of the day, to me, this past year, I've gotten the opportunity to do a lot. Well, I've worked, becoming agents, we got to work with our, with our broker. We actually helped found a property management company called, you know, customer results property management. And we realized to do that grind, you know, hard work just isn't enough. You have to figure out why you're doing it. You have to figure out why you, what you're trying to do. And if it helps, one thing, all to tell my friends to do is to imagine your perfect day and then work backwards from there. So at first, you know, we thought we wanted to get into real estate. So we became agents. That's why we worked in. So we wanted to do anything. We wanted to get a mentor. So we started working in property management. You know, we started that up first. And we realized that that's not the, that's not the dream. That was just a vessel to get to the dream. So I think that

identifying where you want to be and why you want to be there more importantly. And if you don't know what you want to do and what that why is, start trying stuff. Stop thinking about it. just start trying things. And if it messes up, it's better to fail 50 times in a year trying to figure out what you want to do than to sit back for an entire year just thinking about it. Oh, man, Sam. Man, oh man.

I love you, man. This is unbelievable. Keep going. No, seriously. Like, if you haven't figured out your why, stop, rewind, and listen to what Sam just said, starting with the Imagine Your Perfect Day. I don't know that I've heard more wise words said

on this podcast than that. And I do mean that. That's unbelievable advice for anybody listening. Not just for real estate, right? I mean, this is for life. You've got to find what you want to do and who you want to be. And God, that's amazing, man. Amazing. Appreciate it. Awesome. Well, cool. Well, Sam, this has been awesome. Josh, final question. Not part of the famous four. Yes. Yes, exactly. So how can people reach out? How can people get in touch? First of all, folks call me a millennial. I'm not a millennial. Millennia was anybody born earlier, but I will say in the millennial tendency, I do have, of course, bigger pockets, Facebook, Twitter, Instagram, LinkedIn, everything else and that. You can search them by my name. I'll show up on there. But also Sam at whitehouse rentals.com.

And we're also at whitehouse rentals.com. That's our formal Airbnb site. You can reach out to us on there if you want to see the project and what our results were. You can go on there as well. Even if you choose it to get some ideas, that's the best way to reach out to me. I love it. That's awesome. Sam, thank you so much for coming on the show. We really do appreciate it. And thanks again for helping to edit Brennan's. Well, it wasn't, Heather's book. Yeah, you never got my invoice. I never got that back.

I mean, I actually sent it to you in the mail, but you didn't, you got that. Sorry. Oh, I'll send it to you again. Don't worry. Don't worry. Don't worry. Not a problem. I'll keep an eye out for it.

I'll keep an eye out for it. All right. Well, thank you, Sam. I'll see you're on the site. Absolutely. Thank you both. All right, guys. That was Sam Valmy.

Big thanks to Sam for coming in. Airbnb in it, blowing it up, vacation rentals. hopefully Turner you could be as successful as he is but uh i hope so i don't know i don't know i live in you see okay so i was always kind of opposed to Airbnb because or vacation rentals because i live in an area that isn't real like it's not real touristy it's a little touristy but not real a touristy right like feeling not nice not rainy sunny not not not there's no reason to live there at all pretty much have you looked outside man i got a no your view is ridiculously gorgeous it's beautiful but it's rain. Like, it's pouring rain right now. It's

middle of winter and it's pouring rain. Anyway, yeah, I mean, but talking to Sam, it was like, he doesn't live in a super vacation area. They're just people happen to be staying. Like, people need a place to stay all the time. And so talking with Sam actually convinced me when we recorded this a couple weeks ago, I was like, you know what? I'm going to do it. And so I'm doing it.

Here's why this is cool. So, you know, a lot of people are like, oh, well, why don't you go get so-and-so developer who's done $10 billion in real estate or why don't you? And, you know, obviously we would like to have those folks, too, but but Brandon Turner, the co-hosts of the show, the guy who's making it happen,

helping lots and lots of people be successful, is learning from a guy and getting inspired from a guy who just did his first deal. And I love that. I mean, hopefully people have gotten to this point in the show and taking account of this, but the guys who may have skipped out because it's a newbie show might be missing out. Yeah, I agree.

I think you can learn from anybody. If you're open to learn, like, I mean, everybody does real estate a little bit differently. And I try to pick up as much as I can, and I know you do as well. from everybody. He's figuring out what works for them. How can I incorporate it my own life?

Yeah. Awesome. Cool. Cool, cool, cool. Great show. Well, seriously, lots of luck to you. I do hope that somebody will come and shave your beard and rid you of the fleas. The fleas keep me company at night, you know, when it gets lonely and quiet.

Did they hump to you? Yeah, it's really nice. So that's why your wife sleeps in the other room. I got nothing. I got nothing. All right, guys. Well, seriously, big thanks to Sam, Sunny and San Marie for coming on the show today. It was a great show.

Really enjoyed it. And if you are a newbie, get out there, make it happen, jump on bigger pockets, jump on our forums, get in our community, start reading the blogs, listen to the podcast and figure out the action steps you need to take to get to that first deal. We're here for you. The community is here to help you out and help you get successful. And, of course, we really do encourage you to get involved in the forums on bigger pockets. I think there's no better place to start meeting people and building your network, which is absolutely essential for long-term success, I believe in real estate investing. So get out there, make it happen, create your free account today at www.biggerpockets.com.

And again, this is show 10 of the BiggerPockets podcast. You can check out the show notes at Biggerpockets.com slash show 210. Finally, if you like the show, if you're enjoying it and you're not yet a subscriber, please do go and hit the subscribe button on your, what is it, podcast app, Apple podcast app on Stitcher, SoundCloud, wherever else you're listening. And do if you can, leave us a rating review that would help us very much spread the word and let us know how we're doing. So with that, Brandon, you're going to take us out? Outware. To movie, dinner?

I wouldn't be caught in public with you. All right, for the Bigger Pocket Spot. Yes. My name is Brandon the Beast Man Turner. Otherwise, Harry McFlebegg. And Josh. Sasquatch. Signing off.

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