BiggerPockets Real Estate Podcast - 228: Partnerships, Landlording, and Getting Started in Real Estate with Meghan McCallum

Episode Date: May 25, 2017

A lot of newbies get stuck when trying to get their first few deals. After all, figuring out how to find properties, how to get the money needed to buy them, and how to not mismanage the property are all big tasks. That’s why we’re excited to bring you this powerful interview with Meghan McCallum, a real estate investor who’s passionate about helping new investors discover their best plan for real estate success. Today, Meghan shares her story of a terrible first deal that led to an unbelievable second deal (you won’t believe the appreciation she’s seen!) and more. Meghan also shares on the first steps newbies need to do before jumping in, as well as the power of using partnerships to gain experience and financing for your deals! In This Episode We Cover: Meghan’s journey to her first deal from being a firefighter in Kuwait How she bought a $280k property that now is worth $875k Her thoughts about house hacking  Tips on handling an inherited tenant How to build the systems and team you need to scale Why you should figure out who you are as an investor first Why you should seek out a partner and not a mentor Thoughts on “speed dating” for real estate investors Their next deal (the story of knee-high poop) What exactly an “escalation clause” is And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Events BiggerPockets Podcast 132: How Brie Schmidt Grew Her Real Estate Portfolio by 50 Units in 1 Year BiggerPockets Podcast 078: Quitting Your Job, Buy & Hold Investing, and Succeeding With High-End Rentals with Brie Schmidt BiggerPockets Podcast 126: From 0 to 400+ Units Through Value-Add Investing with Brian Murray BiggerPockets Podcast 212: Buying a 115-Unit Apartment Complex for No Cash Out of Pocket with Brian Murray Brie Schmidt’s BiggerPockets Profile Anson Young’s BiggerPockets Profile Books Mentioned in this Show Set for Life by Scott Trench Brandon Turner’s The Book on Rental Property Investing Crushing It in Apartments and Commercial Real Estate by Brian Murray The Gifts of Imperfection by Brene Brown Tweetable Topics: “We forget in real estate investing that people are people. So like in all relationships, you set ground rules.” (Tweet This!) “We all gravitate to what we’re great at, and what we’re great at makes us happy.” (Tweet This!) “You need to know who you are first as an investor before you even consider what type of investment to get into.” (Tweet This!) “I build my business around good people.” (Tweet This!) Connect with Meghan Meghan’s BiggerPockets Profile Meghan’s Company Website Email Meghan Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show, 228. The biggest takeaway, if anyone's listening to this, is you need to know who you are first as an investor before you even consider what type of investment to get into. 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, everyone? My name is Brandon, the normal co-host, but today host of the Bigger Pockets podcast,

here with the one, the only, the legend, Scott Trench. How you doing, buddy? I'm doing great. If I'm a legend, you must be the myth. Which is better, a legend or a myth? I don't know. I'm happy with either, so I'm not picking. How about the legendary myth?

That's a good idea. I like this. So Scott Trench, who you were a guest here on the Bigger Pockets podcast just a short time ago, what a month ago. And today you are co-hosting the Bigger Pockets podcast. You are climbing the ladder, sir. Meteoric rise. You also wrote a book recently, set for life, which sold out a bunch of copies. And, you know, you're like, was one of the biggest books in the entire world for, for, for,

a little while, which was awesome. Yeah, that was really cool. Thanks to everyone who bought a copy of the book. I hope that it changes your life. There you go. There you go. Very cool. And people can go to bigger pockets.com set for life if they want to learn more about that. But now, let's talk about you today, Scott. Why are you here today? What are you doing here? I'm co-hosting the show. I'm here to learn a little bit more from our guest today about how she built a really cool real estate portfolio and ask her a bunch of bad questions. I thought your questions were pretty good. We just got finished recording it. You guys are going to love today's show. We're talking with Megan McCullum, who is a fantastic real estate investor who recently went full-time with a real estate, was able to, quote-unquote, retire using the rental property she's got.

She's got some really cool stuff to share. But before we get into that, let's get to today's quick tip. Quick tip. That was really delayed. Today's quick tip is we talk about this at length today in the show. show, but I wanted to bring it up real quick right now. If you guys are not familiar with Bigger Pockets meetups, in other words, like the unofficial get-togethers where you just grab a bunch of people who are on BP and say, hey, let's get together for some coffee, some drinks, some food,

some half-price apps at Applebee's. That's what a Bigger Pockets meetup is. It's not an official. It's just, hey, let's get together and have some fun and talk about real estate. And the networking there is very, very powerful. I want to encourage you guys to go to BiggerPockets.com. dot com slash events, E-V-E-E-N-T-S. And if you don't see an event in your area, then go host an event in your area. But very, very good at networking happens at those things. And I mean, we're not getting anything out of that as a bigger pocket stick. They're not charging.

It's just we believe that you will grow when you connect with other investors. So we want to encourage you guys to do that. Yeah. And I've met some incredible investors, mentors, people that are just getting started that I can help out a little bit at the local meetup here in Denver, hosted by Mr. Anson Young. So definitely encourage you to. Another legendary myth right there. Yeah, incredible. The amazing Anson Young.

Ooh, he'll like that too. Very, very cool. Managing properties can feel like a full-on circus. You're juggling vendors, tracking payments, chasing approvals across multiple properties, and maybe a few HOAs, all while trying to keep tenants happy and owners confident. One delay can throw everything off,

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right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. Scott, you ready to bring in Megan? Absolutely. Let's bring her in. All right. So Megan McCollum is a real estate investor who's lived all over the U.S. She's traveled quite a bit for her work, including some time overseas. And she's built up an amazing portfolio, like I said earlier, that you guys will love her story. I especially love later on in this episode. She talks a lot about the kind of the things that new investors, the mistakes that they make going into it.

It's almost like people are learning wrong. And I love her perspective. We'll get to that in a minute. But let's bring her in and hear what she's got to say. So, all right, Megan, welcome to the Bigger Pockets podcast. How you doing? Great. Thanks for having me here today.

I'm excited to be here. Yeah, that should be fun. Awesome. Yeah. So, so we are going to cover your story. I met you in person at the Bigger Pockets meetup at Denver HQ last month, which was kind of fun. And I got to talking to you.

And I got to talking to you. I learned that you're kind of crushing it. And so we like talking to people who are crushing it. So, but there was a time when you were not crushing it in real estate before you bought any properties, before you got into this game. And that's where we want to start. So let you take us on a journey through your first deal. How did you get into this thing?

Well, I luckily had a very intelligent mother. And my mom told me that you're going to make it if you start investing in real estate at a young age. And I didn't know what that meant, right? So I was a firefighter at the time, and I was scrimping and saved to try to buy something. And I ended up going and taking a contract job firefighting over in Kuwait during the war and came home with a pocket full of cash. And it went right in a real estate. And ever since then, it's just been snowballing. A firefighter.

Firefighter in Kuwait? I was. What does that mean? That's awesome. Yeah. How do you do? I was a contract employee for the U.S. government protecting the Camp Arifjan for anyone who's been over there to the sandbox or kitty litter box, depending on how you felt about

the Middle East. And we protected, you know, the guys when they were living in tents or some of the harder structures or there was a multitude of car accidents that got pretty bad in the highways of Kuwait. So we were just American citizens working for the government over there for a little extra money. Very cool. So you came home with this pocket full of cash. How did you, how did you didn't choose to invest that? Not very wisely. So it's actually still the bane of my existence as far as properties go. I still have it. It's horrible. It was a condo. I paid cash in 2007 in Chicago and thought I was living the dream. And it was, it's the worst thing. That was my worst deal I've ever done. However, I bought a duplex. That was my next purchase that I moved into. And then instead of selling the

condo, I started renting that out. And then we had the other unit. So all of a sudden, I was like, I'm a landlord. And from there, it's every time we buy a property, we don't sell it. So I've never sold a property. I'm looking forward to that someday. And I wish that condo would go away because I personally don't like condos. Because we all enjoy the control over real estate, which is what gives us an unfair advantage to other people who invest in, say, things like the stock market.

So there's no control over condos unless, of course, you're the smart one who goes and becomes president. And I think there's a few people on bigger pockets I've talked to who've gone and done that secured their condo investments by becoming the president. So like of the homeowners. By condos. Of the homeowners association. Yeah. Not of the United States, which, you know.

Well, it looks like, hey, you know what? Maybe. I mean, maybe they went from television star to president. Maybe it's podcast star to president. So this might be your path here. That might be a good thing. So you bought this condo in 2007 and then you bought a duplex next. I have two questions for you.

First, when was that duplex purchase made? And second, can you tell us a little about the contract? between the financial results of buying that condo and buying a duplex as a house hack. Yeah, I purchased the duplex in May of 2012, so great time to buy in Chicago. It was basically at the bottom of the market, maybe ever. And the condo made some money, but it didn't make as much as the duplex actually did. It was a better area, better school district. It was a suburb of Chicago and Evanston, Illinois.

But I couldn't, it was kind of funny. When I rented it, I rented it, I put it on Craigslist for what I thought was an astronomical amount of money. And within 24 hours, I had two people fighting over it with checks in hand with credit scores over 750. Wow. That's when I was like, I'm just going to keep shooting for crazy rent and see who bites. And that's when the bug kind of bit me. That's awesome. So did you live in the duplex you buy?

Did you live in half then and rent the other half out, that we said? Yeah, we lived in the bottom half of the property. and we ended up maybe putting in about $40,000 total, a couple new bathrooms, added a bath, redid the basement. So, but we were all in about, we're all in about 320 and we just had it evaluated and about $875,000. Wait, so you bought it for three, how much you buy it for? You bought it for 280.

And it was a Fannie Mae Home Path through the Fannie Mae Home Path program. Yeah, it's all about my first property. Yeah. It was awesome. It was awesome when it was still there. It's now just a shadow of what it used to be. Yeah. But yeah, it was bought it for 280, put about 40 into it and a little blood sweat and tears. And now it's been valued at 875. That's crazy. That's awesome. Wow. I should have bought 10 of them. Right. We all, we all stood up. That's funny. That's amazing. So, okay, so say like how do you, I mean, first of all, was that just appreciation or do you guys force some of that? Did you, you said you asked, Do you say you added a bathroom or like was that just pure luck? We renovated a bathroom in the basement that wasn't really doing much.

And then we finished half the basement, added things like washer and dryer upstairs in the second unit. And our unit that we were living in, we totally did like a Kempton style or I don't want to plug any specific hotel. But, you know, luxury hotel type of bathroom. And then as soon as we finished it, we pretty much moved. But so those. Those sorts of things really got us some great renters and apparently a great valuation. But I would just, most of that was to buying right at the right time in the market. Okay.

And that's, you know, part of that is just you got into the game. You can't get lucky if you're not playing. And I also want to ask, did you look at neighborhoods specifically? Did you pick out specific areas where you thought the path of progress was going within Chicago, where you thought there might be a potential for appreciation? that not really that's a hard that's a hard one because no i was just looking at well i purchased this property i don't know if you guys are big college football fans but uh right by in the shadow of northwestern's football stadium so i think i'm six houses away from the stadium so for me

that told me that it's a cool area you know so we're near the university there's a lot of shops and stuff i originally didn't want to buy duplex because i think when we're younger we're like you get this thing like, well, I'm a grownup. I don't want to have to share my space with someone else. And, you know, my mom talked me into it. So I was lucky that she did that. But I mean, I didn't just jump into a property and make that kind of money. I look for three and a half years.

Interesting. So let's talk about house hacking a little more in depth. That's something we're a big fan of a bigger pockets. We talk a lot about it. That's how I started. That's how Scott Trench here started. That's how you started is this idea of house hacking where you live in one unit and rent the other ones out.

How did that experience go while you were there? I mean, do you think was it a positive thing? You glad you did it? Tell us a little bit about that. Well, we inherited some tenants who I was not very excited about having because I realized how under market value their rent was. So I couldn't wait for the day when I could just be like, sorry, we're not renewing your lease. I think that guy cried that day and I, it was a great surprise to not have any feelings

about it. I thought I was, I thought it was really going to be upset by upsetting him. Yeah. But the, but the truth is I was just like, sorry, business is business. And then we were able to increase the rent by $600. So. Well, did you give him an opportunity to pay the higher rent? Or did you just say? No, because we wanted to, I had a feeling that they, you know, it wasn't going to work out for them. They were students. So asking them for more money would have been been hard. It was easier to do. just be like, hey, you know what, we're going to go in and renovate it. And we did. That's, that was our, that was our true purpose. And I think it's really important to be honest

with everyone you come in contact with in real estate. So was I happy? Yes, but I don't think I had to actually tell him that. But we did go in. We did a whole new, we renovated the whole kitchen, put new appliances in. I can't remember what other things that we did. But we, you know, we did things to improve it to, to, to garner $600 more month rent. So what was it? What was a total rent then on that after you raised it? It's $2,000. So we jump from $1,400, $2,000 and we're still under market rent. And they don't consider one of the bedrooms in our bedroom because there's not a closet. So when the tenants who are in their now move, we're just going to throw up a really small little closet in it.

And that should force even more appreciation. That's awesome. So I've got a question about the inheriting a tenant thing. All of my properties have been vacant when I've inherited them. Is that something that because of that lesson, because of that situation that you look out for now when you're looking at new properties? How do you handle inheriting tenants versus vacant ones? Well, I think in all relationships, and we tend to forget in real estate investing that people are people and even in business. So in all relationships, when you start a new relationship, you want to set the ground rules and set boundaries and set expectations and change is hard for everyone.

So whether you're the new tenant or you're the new landlord, it's hard. And just get it out of the way. Hard talks, just get them done. get them done immediately up front, explain these are our policies, this is the procedure that we have. You know, I mean, I have a couple tenants that I didn't inherit who like to break the rules constantly. And I have to tell them like, if you text me one more time, I will block your cell phone number for my phone. And that I do or I don't just say I did or whatever. But I think with 90% of all relationships, business or otherwise, if you tell people what your expectations

are up front and what there should be for you, you, you know, You're sitting pretty most of the time. Yeah, I think that's fantastic. You know, and we'll kind of get into it, but I'm about to inherit a whole lot of, a whole lot of new tenants. But you just have to go in and respect them, but respect yourself first.

So you just have to make it clear that this is what we need to do. And if they're not on board, then just tell them that you're, you know, it's really upsetting that you're not happy, you know, wanting to be part of, you know, this property or whatever. And, you know, we're happy that you can move on and find somewhere that you feel.

like you belong better or something like that. You never have to be cruel or mean unless of course you take those kinds of tenants that are going to be cruel and mean. But I like to buy a little bit on the higher end of properties or at least buy a property I can upgrade so that you attract someone who's more. I like to work with people who are more like me because I can understand them. And it's easier to have that relationship with even even though it's just business. So that makes sense. I think that's a big fear of new first time house hackers. It's just like, oh man, what am we going to do with this tenant? Like, how are we going to handle this relationship? I never met this person before. I'm going to be

the new owner. How are they going to handle that transition? They're going to be my neighbor. So I'm glad that we got to talk about that. Let me ask both you guys that question because you guys are both, you know, house hackers or were. What is that like when you first meet that new tenant? Like, how did you establish yourself as an authority? And I'll ask Megan first and then Scott. Like, how did you guys establish yourself in an authority, especially being a younger person. All three of us are younger people. How do you establish yourself as an authority when you're the new landlord? Just knock on the door and introduce yourself and then say, I'll be speaking with you later about the business, you know, moving forward with this, you know, as a business

arrangement and we'll get you a new lease. And if you have any questions, I'll go in, give them my business card. This is how you reach me. I'm accessible. You can send me an email at any time. And my phone, that phone number that I give them only rings Monday through Friday from 9 a.m. until 4 p.m. and if they have an emergency, we have now we have a phone number that's set up to ring no matter what in an emergency situation. But I basically told them what my expectations were in the beginning. And most people will just follow what you tell them to do because it's easy and

then everyone's happy. That's what people in general really want is they want to belong and they want to be connected to other people. And people are generally good. Even tenants. What are you, Scott? Well, on my end, I've actually, I've actually had vacations. properties each with all of my purchases so far. So I've had the good fortune of selecting each of my

tenants and I make it clear from the very the very get go, hey, this is the relationship. I'm going to be the landlord. Call me if you need anything. I want you to have a great life here. This is going to be your home. Let me know if anything's wrong. But, you know, when your dog poops in the yard, it's going to disturb the other tenants. So I'm going to give you a call and make you clean that up, that kind of stuff. You know, don't pay me late or I'm going to charge that fee. So I think it's just a matter of being firm, like you said. Yeah. Well, and I think you're right. And most of us are parents, right? I mean, Scott, I don't know, buddy.

I'll leave that. None yet. But, all right, none yet. But a lot of people who are investors, our parents, and it's children and pets and friends, and everyone you come in contact with wants to know what their role is in your life. So if you just explain to them, like, and you hold them responsible,

you can't just set boundaries and not hold them responsible. Like Scott said, I'm going to charge you extra. Well, I don't want to because I don't need that. money. I needed the money that you were supposed to pay me when you were supposed to pay me. So, but I have to do it because it's our policy. So I've, I've kept great tenants that have slipped up, but they're like, I'm sorry, I'm sorry. So then they're more apologetic and they're super happy to give me the money because I've at least worked with them instead of, you know, holding true on the five-day eviction notice. Yeah. Yeah, I find, I think you're, you hit the nail on the

head when you were talking about people want to know what the expectations are. They want to know what the rules are. And the biggest problem I see with landlords today is the people, the people who end up failing at the end of the days, they just don't establish any rules at all. They just kind of willy-nilly go at it and they never establish those rules up front. But as soon as you start saying, this is a rule, this is a policy, this is a consequence, now you know exactly what to do. Most people are good. Most people will follow those things.

Every once in a while you get the weirdos, but that just makes it less emotional on your part because you've got your rules. You explained it to them. And now everybody knows what's going to happen because it's written right there. Yeah. And the more and more you get into this game, when you get that weird tenant, you almost really appreciate them more than the other tenants, for a moment because they're teaching you something new.

Because when you get, when you get the outliers, hang on, it's going to be a bumpy ride. Yep. Totally agree. So let's move past this duplex here. So you got this, you have this condo and then you got this duplex next as a house hack. That was a huge success. Tell us about how you kind of scaled the rest of your portfolio and got to the point where you are today. Accidentally.

So I worked for the Department of Defense. And in doing so to move up, you get to move around. That's basically what people say. So we ended up moving to the East Coast to D.C. And we bought a property in College Park, Maryland. And then I took another job. So we kept the house and I moved. And luckily I didn't get a chance to close on the next one before I got fired.

But when I got fired, I drove home a huge mile on my face because I was like, I'm going to do real estate investing because at the time, with the four properties that we were renting, So we had the single family in college park, the duplex in Evanston, and the condo in Chicago. I was made gross while. My gross rent at that point was over $130,000 in gross rent. A year? Per year. That's awesome.

And that's why I was like, wait a minute, I can easily do this and start scaling. And so moved to a small town where my in-laws live. And we're kind of like, it's kind of an area. like yours, Brandon, where you can get a house for $40,000 and make decent rent. You can make 2% in this area. You can flip and make $40,000. You can buy 20 unit apartment building. I don't know. It's, uh, you can, there's a lot more that you can do here. I mean, I've never heard of seller financing working anywhere until I got here. So that's something that you can do here. And where is that? Um, I currently live in a small town, small city of 6,600 people called

Geneseo, Illinois. But we are closest to. to the closest metropolitan statistical area is called the Quad Cities, which is two states between, it's Iowa and Illinois, where it's Moline, Illinois, Bentonorf, Iowa, Davenport, Iowa, Rock Island, Illinois, and then East Moline, Illinois. That's about 400,000 people in that area there. So, yeah, it's a lot of blue-collar work. We're in a great place for rentals, so that's been easier to scale there. So tell us about that. What happened when you got there? What did you buy What's your portfolio look like today then? Like, what have you done since then?

Oh, I started, well, I just basically came to Geneseo and everyone's like, oh, no, poor you, what are you going to do? I'm like, I'm going to buy real estate. And then all of a sudden it was like, oh, my girlfriend's got a duplex for sale on the other street. You should go talk to her. And I was like, well, then I will. And, you know, bought a duplex and bought a house that we bird.

Then I bought a duplex and I bought a triplex in Davenport that we bird. And then I bought another single family. I just kept buying things and didn't slow down. And then it got to a point where I was like, we really have a lot of units. And I'm not a systems person, which wasn't awesome. So I've invested a lot of money having other people build systems for me. But I was like, if I'm going to have these systems, I want to move up. I want to start buying apartment buildings and get bigger.

And so that's where we're at right now, starting to buy smaller apartment buildings and then working my way into syndication of larger deals. So I want to ask you about that because I have, you know, four units. And when you say systems, you know, I think, eh, I don't know if I need those systems yet. I only have these few units. And it's really easy for me to to handle issues that come up, you know, as they come up. At what point did you feel like that the systems really became important to your business and really necessary for you to be able to scale? Well, I think having systems and being a systems person. So I just, I love people who think in systems. I just know it's not me.

I'm a big, big idea person. I was the happy to BC student who now hire A students to do the work that just doesn't come naturally to me. So as soon as I thought I could afford to hire people in, I did. I probably couldn't have, but I probably shouldn't have, but I did because I knew I couldn't continue to grow and maintain any form of sanity. So as soon as I started hiring employees. to start taking over some of the work so I could focus on finding new deals or pursuing new education in real estate. You just got to bring him on one by one. So, you know, you bring it on a CPA

and he's going to know someone for bookkeeping and they're going to know a good real estate lawyer. And then that guy gets you attached to someone. So as soon as you start bringing in team members, just keep building. I mean, your team is your first system. So you have to build that. But if you stink at something, don't do it. Just there's, you know, we all gravitate to what we're great at. And And what we're great at makes us happy. So why stink at something and be miserable? The whole point of doing this is to achieve a freedom that no one else has. So I don't want the freedom to go stink and be miserable.

Yeah. I could have done that. I could have done that anywhere. Yeah, I agree. I feel like growing up, we're all taught to, like, you know, work on your weaknesses. Like, oh, you're not very good at running the mile. Go out and run every, you know, day until you're good at running the mile or, you know, whatever. Like, in school, they teach you to always work on your weaknesses.

But I'm such a much bigger fan of, like, what are you really good at? at what lights you up? What makes you, you know, just get lost in a moment? Like, do more of that and make other people do the stuff you don't like doing. Right. You don't see many people saying like, oh, you hate eating fish. Well, you should eat more fish. Yeah. It doesn't make any sense. Like, thank you. But no. I mean, we tend, we tend to, there's certain things that we're like, oh, I'm not good at that or I don't like that. I don't want to do it. And you won't. But real estate's a very strange place, I think, for people. They feel like there's a magic button or a, like a, like a, a formula that works for everyone. And that's my biggest takeaway from investing in real estate,

even just in this short period of time. I've been doing it for five years, but full time for about a year and a half now. The biggest takeaway, if anyone's listening to this, is you need to know who you are first as an investor before you even consider what type of investment to get into. Now, you'll hear people that say, oh, stay laser focused. Well, you're telling me who is someone who does not stay laser focused, nor am I good at it or handling details to do that. That doesn't make sense. I'm a multitasker. You know, women typically tend to be multitaskers more so than men.

And I find this too with some of my female investor friends, they're a little bit of everywhere, but they get a little bit of everywhere to find out exactly where they do whatever they're doing best. You know, I'm kind of working on an algorithm right now just to kind of test it because I also like data. So I like nerdy things. So I want to test a couple theories I have about investors and based on your person like a personality test, what types of properties or investments you should be getting into? Because I think it's so important to really listen to yourself. Like, what is your gut saying? So your gut's not this random thing that occurs in your life. It's, it's your brain just working very quickly, taking all your life experiences, your education and

every other snippet that you can put together of how to make a decision like in the snap of a finger you have a gut feeling but most of us are like it doesn't feel right but and we say but more than we say no so i no longer like listen to my gut i completely obey it like it was the boss because it really is it's it's like your most basic brain making really big decisions very quickly and in being a firefighter for a majority of my life you have to make decisions that are based on off of your gut and I'm still alive. So there's something right with my gut as far as I'm concerned. So I think it's important that people don't just take what everyone else has to say

as being valid or fact because what's a fact for you is an opinion to me. But that's okay because it works for you. So everyone needs to find out what it is that they're comfortable with. And I think the best way to do that is through partnerships because I can stink at a lot of stuff. If my partner's really good at it, I can try it out and be like, yeah, you're awesome at this. glad I'm on board, but this is not my thing.

And then go partner with somebody else on something different and be like, yeah, this is my thing. And don't think I've yet landed on where my thing is. I'm hoping it's in larger apartment buildings and syndicating deals. Sure. I love that. I love that idea that you don't really know until you get into things, but you can't really, it's kind of like a chicken and the egg problem, right? Like you don't really know until you get into it.

But then people are like, well, I don't know what you get into because I don't know what I'm doing it. And then it just never do anything for years, right? I like that you say like, yeah, partner with somebody, jump into a small deal. I mean, maybe like work with somebody else on a flip. And you're like, yeah, that was kind of fun. I like doing flipping, but that's not really my thing. Okay, I'm not going to do more of those. But at least you did it, you know, rather than people who sit on their couch and watch TV all night.

And then 20 years later, like, why didn't I ever do anything? No, I was, I was lucky. I'm lucky because I'm decisive. Like, if I'm going to go do something, I'm going to go do it. I'm going to go do it within, I'm going to educate myself to a point where I feel semi-comfortable, then get into it and then learn what I don't know when I'm into it. It's called partnership. and I know everyone always wants a mentor, but don't seek a mentor, seek a partner.

You're saying, someone who you're saying, can you mentor me? Well, what do you want from me? And what are you bringing to the table? When you start talking about what people are bringing to the table, you're really talking about a partnership. So you could have like no money, but you might have time. Like I get offered. I mean, this area is very strange.

And I can go and get owner financing on a lot, like a lot of properties that I don't want because I don't have the time and I'm trying to scale up, not scale out. But what I found is I've got these new guys who can't get financing or owner financing or they already have a FHA loan they're locked into for another six months. I can partner with one of them. No money down. They own 25% of the deal. They run the whole business.

I get the financing, put the money down. And then in a year they can buy me out. And I'll, you know, they can just give me whatever equity was in the house for when I bought it. And they'll be able to then cash it on the appreciation. that we're able to force by increasing rents. And they'll learn how to do it because obviously I'm invested. It costs them nothing, but I get the bigger payout at the end. And there's partnerships that you can scale to different people's needs

because there's no sense of me being able to get these properties with virtually $8,000 for an $80,000 property with 10% down on owner financing when there's a kid who's just doing everything he can to scrape together $8,000. But, you know, we go into a partnership and he goes to buy me out, and now he owns it out right in a year because the bank will finally give him the financing for it on a commercial level. I mean, it's a win-win for everybody. Yeah, I love that. I love that. Because, yeah, so many people, they want somebody to tell them exactly what they do. They want that mentor. They want a coach that says, do this, do this. And they usually

want it for free. And like, I just love that approach of go at it like you're working together. You know, I actually, I had a guy recently come to me, a friend of mine. I mean, people ask me all the time. Hey, can you mentor me? Yeah, I wish I had the time. But like, I would never see my family, right? But like, he came to me and say, hey, look, I've been listening to your podcast. podcast forever. I've been attending your webinars every single week. I've been analyzing deals like crazy. In other words, like he was already had the education part that he was learning. Then he said, hey, I want to work a deal with you. Like, let's go do, I'll do all the footwork. I'll do everything. Just help me figure out these holes when I run into problems and then we'll split the deal.

Why would I turn that down? And it was a guy I knew, a guy who was passionate and he's going to do all the work. I send a few text messages and he rocks this thing. And like he's doing really, really well. So again, I love that idea. Now, you mentioned this idea of, you know, also like, you've been finding a lot of deals there. And you're kind of in charge of the funding part. Is that what you said? I mean, it would all really depend. And, you know, it would all depend on the partnership or the property or I, I build my business around good people. So when I find good people, I'll find a way to make money with them. So I've got, I've got one employee right now. And I, I mean, he's easy to know exactly what he's going to want to buy because I know.

him personally. And so, I mean, when he analyzes deals, his, his numbers are, I think I'm crazy. Like, what they would consider low-balling, but his numbers are phenomenal. I'm like, if you ever land one of your deals, you're just going to strike it rich. So, but I mean, I, I, but he looks at it like an investor. And so, but for him, I could pick out properties. But, you know, unless you're working with me many, many hours a day, I probably wouldn't know anyone, I wouldn't be able to tell anybody exactly what to do. But I could tell them how to run a property with them and what I would expect out of them. And then obviously you're involved. You're engaged. You're like, wow, this is a great partnership. Brandon, like you were talking about. Obviously, you're going to give them more

than you'll give someone that you're like, I'll mentor you when I have a moment because no one should feel like you're this like afterthought. Like, no, I'm bored this weekend. I'll call this kid I'm mentoring. But that's really what it has to come down to because you need your time with your family. And you need your time to sleep. And I could do this 20 hours a day, seven days. a week. I mean, it's what I pretty much did when I started full time. It's not easy. Don't walk into it. No one gives you anything. You have to be out there and be willing to make mistakes and not be afraid. And when you make mistakes, don't be ashamed of it. Just keep going because, you know, it really stinks because I hear all these new real estate investors or these even older people

who want to get involved in like, I have money, but I'm afraid of making a mistake. I'm like, well, you're going to lose all your money then. So it's a lot easier to do it with a group or, you know, I always thought that my safety net was my mom. So I didn't have any fear. Mom's got my back. This was her idea. So I get in trouble. She's going to bail me out.

Same thing with a partner. Same thing with, you know, if you go to sometimes real estate investment groups, they're one of the best support systems because you get 20 different people's opinions. And they're all equally bad, except for the one that stands out for you. That's amazing. And then, you know, if you find somebody who thinks like you do, that's the person you pull in for your next your next partnership or you know if you're if you're tanking something instead of losing it then you know maybe bring that person on and sell some of the equity of the property to

maintain the property instead of lose it if you start going upside down I love that yeah I think it's fantastic I think that that what these like partners and mentors and associates that are that you're working with can help you do a lot is avoid mistakes avoid problems that they've run into you can never repeat exactly what they've done, but they can help you with all these different aspects and developing perspectives, not anyone's perspective like you mentioned, but somebody's perspective that you respect and trust and aligning yourself with them. And they're rare. It takes, you know, you might meet with a lot of people before you meet that person that you just described that, you know, everyone else was a deadbeat. This guy was spot on. This is the guy I want to listen to and align

myself with and what can I do to associate with that person. So. Yeah, that's fantastic. Now, one thing you did mention, you know, going to these meetups or whatever, you know, meeting people. Just like let everyone know, if you guys don't know, we have a site on BiggerPockets. It's called BiggerPockets.com slash events, E-V-E-N-T-S. And you can go there and see what local events are in your area. Just local Bigger Pockets meetups where, hey, let's get together at some restaurants or some bar or some, you know, park, whatever. I did last month in Hawaii, I did one at a park.

And like, these things are just gold. If you can get people together. And if there aren't, there is not one in your area, guess what? It's your job to start one in your area. So I want to encourage everyone. to this right now is within 24 hours go to that site bigger pockets.com such events and either find one in your area this month or make one in your area this month one of those two things. I mean, let's like blow that up and let's get people together more often because that's where

you find the mentors, partners, money, deals, whatever are by networking. Yeah, we've got about four or five different real estate investment groups that meet here and I went to all of them and I just noticed that there were things that were missing and I didn't want to go in and change other people's meetings. I just, so, you know, you just, you just just got to create your own to see what works for you. And the group that we started was based off of, you know, sharing, information sharing, data sharing, partnering, and just connections. You know, networking is so important.

And no one really teaches you how to be like the new guy, like literally be the new guy. And you got to go in with no shame. I mean, like, walk into a room and just like, hi, I'm the new guy. What do you do? That's okay. Because guess what? The guys who've been doing it are there so they can tell you what they've been doing. Or they're looking to partner.

with you because you have time and they've got money or they've got experience or they don't have time but they've got money and who knows. You can find yourself like a best friend or a best partner or and they're a lot of, they're a good time. I love networking. It's kind of like dating, right? You're not going to find that person that you're, you know, going to connect with if you don't get out there and meet people.

Like if you sit in your house all day, you're not going to find them. We're going to start doing speed dating for real estate investors. That's such a good idea. three minutes. You each take like three minutes, talk about what you do and then move on and then, you know, bring people together. Because I think, you know, there was a comment that we got was that all these other meetups that they were going to were more like a lecture or

it was a big group where, you know, one person was talking. I kind of stole, I'm going to have to give Breichmann a shout out here. I kind of stole a little bit of her meetups idea. They do like a Shark Tank presentation with partnerships that you can present your group. And yeah, so I totally stole that from Breachman. And we've integrated that into our meet up now and people are really excited about it. So thank you, Breeshmann from all of the Quad Cities.

There you go. If you're interested in some real real estate dating, biggerpockets.com slash love is where you can meet other investors and avoid the, you know, cash flow negative spouse. Scott, that is no longer. That is no longer. I think we took it down. I think we took it down. That was our, that was our April first website. We made a, that was based on Scott. I mean, Scott basically built this a dating site for investors. It was amazing. I still think it's really, I still think it's ingenious. You're laughing.

But in all honesty, I mean, it's another complaint. I put a post up because I like to put up post that kind of rile people up a little bit. And I put up one about how hard it is to maintain a marriage with real estate investing if your partner's not on board. You know, they might not be, they may be, you know, risk averse or they may be, I don't know, maybe they just don't like you that month. It doesn't really matter. You're literally taking time away from. family or clean, I'm not cleaning a toilet this month because I'm too busy trying to write this

deal or whatever. So I don't think it's a horrible idea. Do it. Yeah. Well, here's the thing about like marriages or relationships in general, right? It's like if you are investing in real estate, you are doing a lot of work up front and sacrificing a lot up front, hoping for a big payout later. And there are a lot of people in the world who just cannot get that mentality into the head. They will not sacrifice today for later. And if you've got that difficulty in a marriage, like, that's tough and you've got to work through that. You've got to get on the same page with their spouse of like, we are doing this now so that later we can enjoy this.

And there's ways to do that. We can spend hours. I'm sure talking about that. But again, yeah, it's very helpful to get on the same page. I think that's very important. So moving back to the real estate stuff. You've built up all these systems. You've got all these partnerships.

You've acquired all these properties. Things are going really well. Tell us about the next step you're taking. You're about to have you closed already on a big property. Oh, we were supposed to close. It's a 20-unit property in Rock Island. It's two blocks from a local, a university here. So despite it being like everyone being like, oh, it's a bad neighborhood.

It's in walking distance to the university. And the university is not building any more dorms. So to tell you a little about it. We were supposed to close last month. And I sent my employee, Joey, to go walk through the property. And of course, like last hour, he gets in there. And there's a sewer backup, like knee high of poop. Oh, awesome.

It's yeah and when we did our original inspection there was a backup that day too so I was like no pull it we're not you know we're not closing no way so the two of us like ran through the building because we still had the key and we're like what else is what else is going wrong and we were like pulling our hair out just because we had already done that we thought in our due diligence period and then there was more destruction to the property and this guy and that guy pulled this off the wall and so we will be closing on it still. It's still going to be a great deal. We're going to do things that nobody's doing in this area because that's what we do. We just do stuff that people think is silly. We're turning the property into a green building and we're going to put rooftop farming up there on the flat roof. Yeah. Fingers crossed, it can still happen. But it ended up appraising the same, whether we did a green building or if we just stabilized it.

And I'd rather have the fun. I mean, I can put a little bit more money into it and then have this really cool building. building that I see selling off to the university as dorms in the future. So, and the reason I had the gumption to do that is because I did a little data mining and one of the other investors in one of the groups I was in had a sixplex appraised. So I was like, hey, can I get that, can I get that appraisal years? I said it to me. It was like 70 pages. I read the whole thing. I was like, I'm going to make a killing on this building. So then I took that when the appraiser showed up, I was like, hey, based on this huge packet of somebody else's appraisal, which is literally right

around the corner, I'm like, this is what I see the valuation at. He's like, oh, this is really helpful, thanks. And I got my valuation. So we're looking at making a pretty penny on that one. That's awesome. We're going to put some Airbnb in there. So in case of the, you know, we're going to put some like Murphy beds in the efficiencies and we'll keep some mattresses on site and be able to like put together some rentable Airbnb units.

And we're putting storage units in the back too. to increase income. And that wasn't even a part of the plan during the appraisal process. So we're looking to having a little bit of fun and seeing what we can learn from doing this. Sounds like you were able to take a crappy deal and make it a pretty good one. Oh, that's so funny. You can't shine a turd. We're bedazzling a turd is what we're really doing.

Wow. That's amazing. So how did you find that? So how did you come across this property? What, where did you, what connections do you make or how did you find it? Well, it was an MLS over a year ago, and I wasn't even thinking about, well, of course, I was thinking about bigger buildings, but I wasn't, there's no way I had the spine to purchase one at that time. And it was listed quite a bit higher.

And, you know, my mentor is my real estate agent. And I said, just send me everything every quarter with all of the commercial properties on it. And then when it listed, I was like, yeah, throw this number at it. And he, you know, we play the dance back and forth. And every time you know, every time you make an offer, here comes the bank. Oh, we got another offer. No, you didn't. Yeah.

I wish every time that they said come at your best and highest, I only gave him a dollar more because I probably would still get, get those properties. But, you know, you get that little bit of missing out on a great deal. You're like, oh, what's a few more $1,000, you know? That is actually funny that like every time I think I've ever been on a bank repo. It could be sitting there for six months, right? And then I make an offer. Oh, we got, we got a lot of offers.

We're going to need your highest and best. So I started offering a little bit less. I've done that a few times. It's like, okay, I'll take a thousand. It's worked. It's worked. It's crazy. Like they, I don't know, because the other offer is probably like the real estate

agent's like, well, I'll pay 50 grand for that. You know, like 100 grand off of whatever they're asking. You know, like that way they're technically got a multiple offer. I don't know. It's a joke. It's a dance. I've, uh, my next one that I'm going to do, I'm going to do with that was escalator clause. I've been hearing more and more about.

Yep. Escalation. Escalation clause. Yeah, around here, nobody, I mean, shoot, I tried wholesaling a deal and it failed at the closing because the lawyers couldn't get their stuff to do. I don't know what this is, this assignment fee. I don't feel comfortable with this. So in this area, trying new things, everyone just goes, you're crazy. It won't work.

And if you work hard enough, it does. But I'm going to throw that at my next one and everyone's going to look at me like, you know, I had a third eye or something, but it's okay. An escalation clause for those who don't know is like where you say in the, in the contract, you know, hey, I'm offering you, you know, a hundred. $100,000 for this property, but if, you know, I'll go up to 110 to beat anybody else's offer. So I'll beat anybody else's offer by $1,000 up to $110,000. You know, it, but now the danger of that is you're just telling that you're putting your cards on table, like, I will pay $110. So there's a good chance the bank will be like, okay, pay $110. But at least they're having conversations with you about it and not with the

other people, right? If you put it in there, they have to show proof of a legitimate offer coming. Yeah, there you go. So show us a legitimate offer and then we'll pay $5,000 above that up to $160 or whatever. You're probably going to pay 160 anyway when they said, bring me your best and highest offer. So, yeah, don't people, people don't listen to the banks. They're, they're, they're, they're, they're allowed to lie like, you know, please. That is true. That is true. What was the income of that property when you purchased it or I guess what is the income of it right now? And what do you expect to increase it to with those modifications and improvements you're doing with the Airbnb and all that stuff? Ooh, this is a hard one. So the property is currently tenanted. That's not even a word.

The vacancy rate out of that is, I believe, something like 45%. Oh, wow. There's five units right now that are unrentable and a couple of just random vacancies. The bank didn't care. It was poorly run. And then that's not the property manager's fault. That's the bank going, we're not giving you anyone money to run that property. I mean, from the time of our appraisal to the time, from the last time we were supposed to close,

there was still a huge turd on the floor in the laundry room. I mean, I called the city. I was like, hey, I'm just one of those people. I got to let you know. These people are living with there's literally poop everywhere. And they're like, oh, are you a tenant? I'm like, nope. And they're like, well, sorry.

You're going to have to have a tenant call. And I was like, all right, I did my due deal. I tried. I tried. So sorry, people, if you didn't call because there was poop in the basement by yourself. You'll be cleaning that up. Oh, well, your employee will be cleaning that up the day you closed. I'm hoping.

I hope it was a dog or a cat turd. It was from the sewer backup. Oh, man. Yeah. There's toilet paper and other things that people shouldn't be flushing. Oh, make sure you tell your tenants. It's really right now, especially, there's more and more people who are letting their tenants are buying like the personal flushable cloths.

Yeah, no, they're not flushable. So put that in your lease. Oh, that's a good idea. That's a good idea. Yeah. Well, very cool, very cool. Well, I'm excited to see what you do this property. We'll have you back in like a year from now when it's all turned around and beautiful

and pretty. You think a year? Is that about right? My plan is six months. Okay. Well, we'll have you back. We want to talk to you about, like, what does it look like at the end? Yeah, I want to, yeah, we'll see it in three years from now because that's how rehabs tend to go.

But, I don't know, it's very cool. So last question before you kind of move on. Where do you see yourself going forward from here? What's your plan moving forward? Bigger deals. How big do you plan on going? I'm not afraid of anything. I pretty much at this point in my life.

I've just, I feel like I've overcome enough to know it's, it's absolutely silly to be afraid of anything. So I've already actually, I have my eye on 144 unit in another city in Illinois that's not got out in the market. I made a connection with somebody on bigger pockets who happened to hear about this deal. And he's like, hey, you're in Illinois and I'm in Texas. And we ended up going to the same grade school as it turns out. So he's been kind of doing some hunting. He also is a, he's a lender too. So he's a broker and a lender.

So he gets get some ins on some things. and he's asked me to partner up in primarily doing the syndication part of it. So finding investors for the purchases and basically making sure that all the numbers work and stuff. So I see myself doing that and then doing asset management. Awesome. Yeah. Well, let's move on to the fire round. It's time for the fire round.

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And they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is much cheaper than learning the hard way. All right. Let's get to the fire round. These questions come direct out of the Bigger Pockets forums, which, of course, you guys can access by going to biggerpockets.com slash forums, and we're going to fire them here to Megan.

You ready, Megan? Shoot. All right. Number one. What's the best way to check comps on a property, comparable sales, like what other properties have sold for? What's the best way to get comps? Everyone will, I'm not saying everyone.

Most people will say, oh, partner up with a reasonable. real estate agent and let them go and figure it out. But the truth is there's such power in appraisals. Like get in a group, guys. I mean, get in a group, maybe even just two or three other investors, get on Google Drive and upload everything. Share your data. Like data's really, really important. And so real estate agents work off of previous data and what they think things are going to be worth. And if you don't have a good real estate agent who understands investors, he's going to tell you the numbers that people are paying for paying retail for properties.

So go and find those other investors who are getting their properties appraised either before or after they do it, especially if you've got people who work with burying properties. You'll be able to really garner a lot of great, great information. That's what helped me, you know, move forward with the 20 unit building is having, you know, like that, having that data set is really like a loaded gun in going forward and making serious big moves. I love that tip.

I love that. Awesome. So the second question is, how long after move in should I give the tenants to transfer the utilities to their name? Before they move in. Before they move in. All right. That's what we do too.

We actually require, yeah, we actually require them like at least signing that to bring a piece of paper from our utility department saying I turned on utilities in my name today. Utilities and renters insurance with my name being on the renter's insurance. Oh, there you go. There you go. All right. Next question of the fire round. Well, I like this.

unauthorized maintenance on my water heater or their water heater and they destroyed it. Do I build a tenant for that? And if so, how do I do that? Yes. It should be in your lease, you guys. Check out other people's leases. Again, more info sharing stuff. A lot of people in BP will send you like leases that they have that are pretty solid.

Brandon, you have like a book out that might have some information about leases. So all this stuff should be in your lease. I mean, the more you talk to other people and the more you network and the more you read and educate yourself, everything should be in your lease. So it should say that you're not allowed. Your tenants aren't allowed to make any updates to your property and how you bill them. Well, you're going to have to go sit down and have a hard talk. And trust me, they'll be much happier in paying that bill than they will for the lawsuit that comes in small claims court for the damages. Yeah.

You know, one thing that we've done a few times that's worked okay is when a tenant has done something really like, like stupid that costs a lot of money. We have to build them. Like, for example, they broke a window or whatever. A lot of times tenants just don't have that money. They're like, I don't have a thousand bucks to do it. So what we've done is we said, well, how about we just work out this deal? We'll just raise your rent, 75 bucks a month for the next 12 months, and that will cover

the window. And then they're almost always okay with that because tenants tend to think in terms of monthly bills and payments where, you know, we think more, I think investors think more in terms of big picture. But yeah, they're like, okay, I can afford 75 bucks a month. And so you can, that's just something I've done that's worked out pretty well and makes them not so scared and like fearful right because like all of a sudden they know that they it's all fear yeah they know they screwed up and now they don't know where they're going to get the

money for it and how they're going to come up with a thousand bucks and so then their fear turns into well it was it was a bad water heater anyway it was probably broke anyway i didn't touch it what i didn't do it scott did it yeah and then like it's really it's really important to also go there you want to empower them to make a choice so you should go there with two ways to resolve the issue we can either a or b which will you choose yep i try to do that it's As much as I can, give people options because then people don't get defensive. Yeah, I think that's, I think that choice option is really great because it, like, it helps to make a decision.

But I think that more important is the relationship with your tenants. You know, if they're doing maintenance on the water heater because it's broken, I think that that's also part of just not educating them. Hey, I'm here. That's my problem to deal with. That's my job. That's my, the service I'm providing you is to have hot water and electricity and make sure that things run right.

You need to come call me when those things aren't working properly and I'll go in to make sure that they're fixed. Right. I mean, in my least, it even tells them what temperature they're allowed to have the hot water heater up to. Because if I do that and they acknowledge it, then their kid burns their hand because they cranked it up because they wanted to fill a, I don't know, tub three times over with hot water. I don't know what they do sometimes. But yeah, you got to spell it all out for them and then you got to hold people accountable once you've set those rules. All right.

So the last question here is, I keep getting out. Real quick. Sorry. I reread this question and it's a little more complicated. I want to go back to this. I just read that the water heater, I missed this the first time. The water heater is 14 years old. Now do you still build the tenant?

They did destroy it, but it is an old water heater way past its life. Now what do you do? You buy them a new water heater, but you might have them pay for part of it. So that way it's a win-win for both of you. And they've learned their lesson for breaking the rules that you had set forth from the beginning of the relationship. All right. I like it. Or you just have really good tenants who don't do something.

silly things like that because they know better Brandon. I know you don't have like, you don't, you might not have like the best tenants out there. But I always seek out in every class of property, you can find the best tenants. And if it means letting a property go vacant a month or two, you shouldn't be so hungry that you can't make a good choice. And people always laugh at me because we have everything like I don't collect rent, right? So that's one of the things is we've automated as much as possible. So all of our rents come automatically drawn from their bank account to mine.

and when you have tenants who agree to your policies, you have to, like, they have to do what, you know, what they've agreed to in the beginning. So, but yes, they know they shouldn't be touching that hot water heat, unless they're a plumber. And if they are and they messed it up, then maybe you, that's a whole different thing. All right, good answer. All right.

Sorry, Scott. Now you can ask the final. All right. Last question, attempt to. I keep getting outbid on properties. How do I make my offer stand out? Well, I will tell you that the whole term house hacking I believe started from BP, correct?

Started with Brandon. Maybe, can we confirm this or deny this? Yeah. So what I've found is that in the city of Chicago, we've been trying to target one neighborhood we would really like to buy a triplex in, and I will not pay what other people are paying only because I, not that the property is not worth it,

but I know that it can be worth less or I want one that's worth less that I can force the appreciation on. So if you're getting outbid, stop, trying to buy the properties that are already done and have the best tenants in them. You know, take a step back and really look at what your strength is. If your strength isn't forcing appreciation, maybe you need to be in a different neighborhood. If you want to buy, you know, turnkey ready properties, you're probably trying, you're trying

in the wrong neighborhood. It's like when you go to listen to the radio, if you hate the DJ, it's okay, turn the station. He's not talking to you. You're not his target audience. So maybe you've mismatched your goals with what you should be doing versus what you think you should be doing. Just keep bidding. Yeah, I think part of that is understanding what reality is, right?

What's the reality and the properties that you're purchasing? And if the reality is that you can't get a property at that price, doing what you're doing what you're doing, you need to change something, you need to go somewhere else. You need to deploy a new marketing tactic, meet some new people, whatever you need to do to get the properties that you're looking for. Partner up on something. Bit a little more with their money. What's that quote?

Like, if you keep doing what you've always done, you'll keep getting what you've always got. I always like that. Or insanity. Yeah. The insanity. Yeah. The insanity. Yeah. Yep. Very true. All right. Well, good deal. I love that. Good answer to the fire round. Now let's end this thing with our world famous. Famous Four. All right. The Famous Four. These are the same four questions we ask every single

guest, every single week here on the Bigger Pockets podcast. And we're going to see what you've got to say. So number one, what is your favorite real estate related book, Megan? Well, I'm going to have to give a shout out to Brian Murray. He wrote a book about apartment or commercial real estate investing from, I think, from a teacher's perspective, or at least he's a teacher. He wrote the book. I think it's very, very organically written. It's called crushing it in apartments and commercial real estate. And it really made me feel comfortable, especially chasing after my first bigger property.

I was like, well, this guy, he just kept pushing through it. just kept pushing. You know, he just kept doing it day after day. Same thing. Just all right. You're right. You can crush it if you keep working at it. So I like that book a lot. It's my new fave. That's awesome. We actually had Brian Murray on the show a few months ago. And yeah, he's fantastic. Great book. I've got that book on my desk. So I'm on my reading list. So hopefully this month or next. Nice. So the second question here is what is your favorite business book? Well, we integrate our business very closely with just people. My undergrad was philosophy.

So when Brandon called the answer deep, it's the same thing as I got asked, what are you going to do with a philosophy degree? Because I changed for biopremed, and I was like, live. And that seemed like such an normal answer to me. So have you heard of Brunee Brown? No. No. I have not.

Okay, it's because she hasn't written a business book that relates to this. But she wrote a book called The Gifts of Imperfection, where she talks about a number of, I'm not going to throw the whole book away at you, but she basically talks about scarcity and fear. And I think this is one of the, the number one problems that investors have in real estate, whether you're new or you've been doing it a while, you're afraid to look at what you're not doing. And we're all just, you know, if you're afraid of something, it's going to really just take so much out of you that you're never going to get to that top place where you're going. I mean, like, Olympians don't fear losing.

They fear not achieving at their highest peak. We need to kind of think like that. So she really touches on such amazing topics. And it'll help everything from your real estate investing to how you deal with your children. It's a great book. So I'm going to call it a business book. All right. Awesome.

So what do you do for fun? What do you do when you're not investing in real estate? What are some of your hobbies? All fun. It has to do with real estate because I love traveling. So I buy properties as, you know, as far away from each other as I can. So I have a reason to travel. I engage with a lot of, I love networking. So I love spending time with other real estate agents, seeing what people are doing different parts of the country. So I'll go and meet up with different real estate agents. I mean, I just drove to Chicago the other day to meet up with a guy from Alaska. I was in Milwaukee

the other weekend. That's like three hours away, four hours away. And I'll, you know, I've been invited down to Memphis to go see what's going on in Memphis and then have some barbecue and I might go this month. So I like to travel. I also like CrossFit, yoga, my kids, you know, things. Very cool. Very cool. That's a good you, good you named your kids last. Well, I mean, they're like obvious. I mean, I take my, I have a three-year-old daughter and I take her to go see property. She's like, oh, we're going to go see your workhouse. I'm like, yeah, let's go see the work house. And then we'll get ice cream. So she loves coming to work with me and play with schools and getting into trouble. There's always ice cream.

I really look forward to teaching my little girl about real estate. Like I wanted to take her for drives and get ice cream and go look at properties. Like I so look forward to that. So anyway, number four of the famous four, last question. What do you believe sets apart successful real estate investors from all those who give up, they fail or they just never get started? I think it's having a scarcity mentality. And so again, I'm going to refer back to Brunee Brown's book.

But the scarcity mentality, it'll just eat you. And if you don't have that safety net, like I had with my mom as my partner when I started out, I now have with other partners in real estate or if I have with my real estate group. I mean, if I get into a, you know, if I got a property under contract and I can't deliver on it or my money gets tied up because of one thing or another, I've got like five people waiting to cherry pick that right off my hands and they'll give me a few thousand dollars for a good lead. So the more you cooperate and work together and partner and share, the more you're going to do because you're not afraid of anything. So get connected.

Otherwise, if you try to do it by yourself, you're, you just, no one, no one does great by themselves. I mean, that's why team sports are so big. So everyone's not a boxer, you know. So what they say, if you want to go fast, do it yourself. If you want to go far, build a team, right? I'm, I butcher that quote. Deep, Scott, trench. It works.

It's very deep. a very deep podcast. Very deep. All right. Scott, final question, I'll give it to you, Scott. Well,

thanks for coming on the show here. Where can people find out more about you if they're looking to connect? Yeah, feel free to reach out. I'll give you my email address. It's Megan,

M-E-G-H-N at McCullumholdings.com. We also have a website that you can come and check us out on. It is under construction. We're growing and doing crazy things all the time.

So that's it's www.machlum re.com. And I'm on Bigger Pockets and I don't know, however else you can track me down, go right ahead. All right. All right. Good deal. Well, this was awesome. So, Megan, thank you so much for being here today.

I love to hear more about your story because I only knew a little bit of it. So I know a lot more about you now. Yeah. Thanks for having me. This was when I first started, when I first went full time in real estate, my first goal was I'm going to be on a Bigger Pockets podcast. That's awesome. I didn't know that.

A year and a half. It took me a year and a half, not a year, but shoot, I'll take it. Oh, there you go. I think it was great. I have one actually question. Maybe we can throw this in. I don't know. But that duplex, you crushed it. You made hundreds of thousands of dollars through appreciation over the last few years. Are you planning to redeploy that equity in some way? Or are you kind of, are you kind of happy to let it sit and enjoy the increased rent and great cash flow that you probably are getting because of that growth? Um, that property, the rent is $5,200 a month for both units combined. And if you take the valuation of what, you know, I'm being told it's worth now at $875, $5, $2,200 doesn't really excite me. So I've been tossing around with, you know, do I think the market's headed for a correction? Yes. When I don't know, but I would rather capitalize on some of that equity. So I'm going to see if one of my tenants wants to buy the property outright. Um, I've been offered pretty much on every property we have. The tenants have always try to buy them. So I'm going to, the last tenant that was in there tried buying it too. So I'm going to try to sell it to them to just make an easy clean break because I like easy.

But if not, then I'm going to refinance out and basically kill my cash flow on that property. But that would only be to be going into like 140 plus unit or something like that. So, oh, I tell, you know, I always tell people, if you can, if you can capture appreciation, do it. Like, but don't go and buy a Tesla because you got $100,000 worth of appreciation out of a bill. I mean, I love a Tesla. Everyone loves a Tesla. So, but it's just a silly thing to do. If you're going to recapture it, have a plan. You should have like multiple exit strategies on all your properties and then pull the trigger on the one that makes sense when you need it. Give yourself some good problems, right? Right. That's awesome. All right. Well, that's a good question.

Good final question, Scott. Just coming in at the end like that. That's great. I'm a little, what happened to the like random questions that you guys are doing? We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're typically doing it. We record the show. No, that's okay. This is good for me to explain to the audience as well. We record the whole show and then we do the random five. We ask it later. And then we'll throw it in either the middle of the show or at the end of the show after the, like the ending music and all that. And actually, we can actually use your guys as help with that. If you guys are listening to the show right now, do me a favor? Let me know. Go to Twitter or

Facebook. Go to the bigger pockets page on either one. And let us know, do you prefer the random five, the five random questions we ask? Do you prefer that in the middle of the show randomly as a way to like, just like, I don't know, make some funny entertainment value in the middle of the show. Or should we throw it at the end after the music like we've been doing? Let us know, yeah, go to Twitter.com, such bigger pockets or Facebook.com such bigger pockets. And let us know, we'll add up the tally and we'll do whatever you guys want. So with that. Can I have the first vote?

Yeah, what's your vote? Put it at the end. You think it's more fun. All right. Yeah, yeah. All right. Well, stay tuned, folks. We're going to do at the end of this episode.

So, but first, we're going to say goodbye to you, Megan. And then we're going to bring it back in here in a second. All right. So goodbye, Megan. Thanks, thanks. Bye. All right, big thanks to Megan McCollum for coming on the show today. Scott, what did you think?

I thought that episode was fantastic. She was able to parlay her career as a firefighter in Kuwait and move into a not-so-great deal at first. And then she struck gold. She hit a home run with her next deal and has been able to use that to ramp up to dozens more properties. And now is set to close in that awesome new commercial deal where she's going to add a lot of value.

So I thought that was awesome. I think a lot of people probably would have stopped after the condo, right? bought a condo wasn't a good deal. She said it was a bane in my existence. And a lot of people would be like, yeah, real estate sucks. You know, I hate real estate investing. I'm never going to do this again. But I love that she moved past it. And that's why, you know, I think that's one of the things that makes people successful is this pushing through. Absolutely. And she, you know, if she had to quit there, she would have missed out on literally hundreds of thousands of dollars in appreciation, you know, and like I said, you can't, you can't win if you're not willing to

play. You can't get lucky if you're not willing to play. That's very true. Very true. And I know she's a house hacker like you and I have both been. And I love talking to people about house hacking because it's a powerful way to start. And I know you're a big advocate of that as well, huh? Yeah. And I'm definitely looking to learn from her journey and see what she does with this next commercial deal. I would love to see where she is in six months to a year from now with that and see if she's able to realize all of the value that she's trying to create. Yeah.

Yeah, I want to see some pictures. But not of the, you know, the human species. Is that the word? not remains. Human remains in the basement. No, the, the fun mess in that crappy deal, as you said. Yeah. Hopefully she can flush all of that out of the property and make it nice and clean. Yeah, hopefully. That was good. I thought you were going to go with the cash flow, it will flow well. Yeah, I should have gone there. Maybe next time. Maybe next time. All right. Well, Scott, thank you so much for being a great co-host today, a legendary co-host today in the podcast.

and I look forward to doing more of these with you. Sounds great. If you guys are new listeners to the Bigger Pockets podcast, you should probably leave us a review or rating. And you really should because, you know, rating reviews are how people actually find us in iTunes and on YouTube and all that good stuff is, you know, the more people like it.

If you're watching it on YouTube, give us a thumbs up. If you're listening on iTunes, go leave a rating review. And if you're, you know, I don't know, listening to this another way, then do whatever you got to do to do that. And if you didn't like the show, you probably didn't get this far. That's true. In fact, we can just like ramble forever about those people about how much, you know, if you don't listen to the whole show, you're an awful individual and a terrible person

and they would never know. We could do that. That could be something. All right. Well, we're going to end this awkward ending right now and get out of here. So this is Brandon and this here is Scott. And we are your host today of the podcast. Until next time, this is Brandon Turner.

Signing off. You're listening to Bigger Pockets Radio. simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. It's time for it. It's time for it. It's time.

The Random 5. All right, as promised, here's the hidden feature of the show, which Megan, you've ruined the hidden. feature of the show. I'm kidding. But you, surprise. Here's Waldo. Here's Waldo.

We are going to ask you the random five. These are five random questions about you to get to know you a little bit better and to, you know, have some fun. Number one. Hmm. What is your dream retirement? I like that question. Dream retirement.

I want to own a large apartment complex in every city that I've ever wanted to live in. Ooh, I like that. And then I can write off all my travel, make a lot of. friends everywhere I go, never have to stay, anyone plays too long, have freedom to go everywhere. And that includes Belize. So, Belize better get building. Yes, I love Belize. I love Belize it.

It's unbelishable. All right, moving on. What TV game show would you like to appear? I have to say, family feud because I think it's always more fun to share. So I think having my family along for the ride would be a hoot. And yes, I said hoot. Hoot. All right.

Speaking of talking and saying hoot, what is something you feel too young to be able to do? Like say hoot. Yeah. What are you too young to do? Retire. But I did it. So, that's like what we're trying to do, right? I guess that's it.

I don't see. I'm going to die at some point, right? So who cares how old I am when I die? So I'm just, I never. really grew up. I don't know. I don't think age really limits me. I'm not afraid to get out in the dance floor. I'm not afraid to be a dork. I do it on purpose just so that every day is a little more memorable. If you do something out, you know, a little bit outcrazy or outlandish every day, it's you grow old slower. All right. I like it. Awesome. So if you had to choose one,

would you rather be blind or deaf? Hmm. That's a tough one. Um, probably deaf. I mean, I like music, but you can still feel it, I guess. And I like talking. It would probably make me a better listener. I don't know. Good answer. All right. Last question of the random five. Megan, what was the last movie you saw and did you like it? Oh, I, last movie I saw, Moana. My kids, we have pretty much dance parties every night. Right now, We're on a, our Disney kick is, is I'm Oana. And yep, did you like it? I saw that too.

You saw it? I mean, how can you not like it? I mean, like, there's a chicken, there's gods and goddesses. There's some great songs. Songs are, the songs are actually pretty awesome. I think it's a really, it's actually a really nice, it's one of my favorite Disney movies now. So not that I have like a collection or anything. I don't really watch some of the movies.

Darn kids. Darn kids. I'll see anything with the rock in it and he's in that. So I haven't seen it yet though, but it's on my list. I'm just waiting until my daughter's old enough to appreciate it. Yes, yes. Hold off. You can do it. Yeah, I want to watch it with her. It'll be exciting. But yeah, yeah, anything with the Rock.

Do you guys remember the movie The Rundown with The Rock and Sean William Scott? I think his name. Sean William Scott is that his name, the guy from American Pie? Yeah, is that the one where he comes home from something and he carries a log around and then he becomes like the police of the town. No, that came right after that. That was almost like a sequel, but it wasn't. The Rundown seriously is one of the best movies ever made, but like nobody's, like, it didn't get that much. but it was an incredible movie.

Like action comedy, it was perfect action comedy. Anyway, all right, go watch that. All right, guys. Go watch the right. Thank you for this edition of the Random Five. We'll see you guys later. 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. I'm the host and 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. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.w.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own.

Investment in any asset, real estate included involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast. podcast.