BiggerPockets Real Estate Podcast - 239: Achieving Financial Freedom at Age 32 with Austin Fruechting

Episode Date: August 10, 2017

Many people dream of achieving financial freedom, but how many actually get there? Today on The BiggerPockets Podcast, you’ll meet one man who did just that. Austin Fruechting began buying rental properties less than 10 years ago, but by the age of 32 was able to retire on the cash flow coming in. You’ll learn just how he was able to do this by reverse engineering success, buying rental properties in bulk, and using the BRRRR strategy to minimize the cash he needed to buy his properties. Whether you are looking to achieve financial freedom at 32, 52, or 72, this podcast is one you don’t want to miss! In This Episode We Cover: How Austin got started in just 9 months  The details of his first deal Tips for accessing lines of credit as a newbie What you should know about unsecured lines of credit How he finds the deals Why he doesn’t invest in turnkey properties How to map out the passive income financial freedom involves What it’s like to achieve financial freedom at 32 What exactly a long-term buy and hold is How to find a good property manager The best deal Austin’s ever done And SO much more! Links from the Show BiggerPockets Forums Slow Hustle Podcast Books Mentioned in this Show Rich Dad Poor Dad by Robert Kiyosaki Thinking, Fast and Slow by Daniel Kahneman Fire Round Questions German roaches – tardy tenants Newbie Wondering Where I Should Invest? Newbies: What is the competitive advantage? Best advice you were given? Tweetable Topics: “The fear is always going to be conquered by knowledge.” (Tweet This!) “When the right deal is there, I do whatever it takes to get it done.” (Tweet This!) “As long as you keep proving yourself, it opens some other doors.” (Tweet This!) “All of the pros started as complete novices and beginners too.” (Tweet This!) Connect with Austin Austin’s BiggerPockets Profile Austin’s Blog Austin’s Instagram Profile Austin’s Facebook Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show, 239. Miss me, people? 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? Back in the saddle, baby. Look who's back from his like nine-week trip around the world.

Okay. Look who's back in the house. What? Is that a solid? I think it is. You and you're like 80s, 90s references. I don't know. Yeah.

Yeah. I don't know. I think it was like Dr. Dre or something. I don't. Which was in the 90s, sadly. But yeah. Yeah, you and your next music.

Anyway, how you doing? You're back from a trip. Do you have a good time? You did not get any uglier, so it's all good. That's really tough to get uglier when you're already looking like this. You know, it doesn't get much worse. Oh, stop. Anyway, you know, you have selective beauty.

I have, you know, my mom thinks I'm really handsome. So that's all that counts in my world. Brandon, you know, you're a good looking guy, man. It's all good. Oh, gosh. You want my number? How you do it? How you do it? You went around the West, the Western half of the U.S.

I went on vacation. We, we, my wife, my three kin and I jumped into an RV and we circumnavigated Northern America. It was amazing, man. We had a phenomenal time. I'll give you a very, very quick and dirty catch up. We went up towards Matt Rushmore. We went to Crazy Horse, which is like phenomenal. on July 3rd, which was probably the most patriotic thing I'd ever experienced in my life.

It was really, really, really cool. From Rushmore, we went up to Devil's Tower, close encounters in the third night. So, so cool. We then went up to Glacier National Park, which is just probably one of the most gorgeous places I've ever been. Had a great time, hiked, boated, did all sorts of fun stuff. Linked up with fellow podcaster and a friend of both of ours, Peter Awad, which was awesome. What's this show? It's the slow hustle podcast. It's a great show.

We met Pete, went down to Yellowstone, saw all the cool stuff, had animals everywhere. It was just like, unbelievable. There's a big buffalo or whatever. A buffalo like 10 feet away from us. Yeah. I mean, like, it's bananas. You know, these places, if you've never been, you have to go see these places. They're just stunning.

Went to Grand Teton National Park, which, again, absolutely stunning. and then, you know, a bunch of other places on the way back. But it was, it was amazing. There were lots of great stories, including the blue mess. So Josh, if you ever saw the movie RV. I never saw it. But you texted me that night and you said, what you were cleaning under the RV and you unscrewed some cap that you shouldn't

have done. And you were covered in human stuff. That was. So Josh texted me and he says, Any idea how to get blue sewer sludge off of staying off of a driveway? So, of course, being the good friend that I am, I took a picture, I took a screenshot of the text message and then put it on my Instagram. And put it on his Instagram and got a good laugh out of it. I laugh at your misfortune.

It's, you know what I do. It's all good. Yeah, I, look, I, my wife and I were kind of like in a debate in the morning. And when we cleaned out a tank, we forgot to close the tank. I capped it, but we didn't close the actual tank. and then it got filled with some fluid water. And, you know, I'm not going to gross you guys out. But, you know, I had like three to five gallons of blue sludge explode all over my body.

And, yeah, Brandon. And now hundreds of thousands of other people will get a good laugh. But yeah, great trip. Anyway, I'm back. You're back. I'm back. It's good to be back, man. And it's a good show to be back on.

Today we have a really, really good show with a guy who achieved. This financial freedom, he loves to travel and do a lot of what Josh is doing, like, you know, hiking around and doing cool stuff like that. 32. 32 years old, he achieved financial freedom through rental properties. He has over 100 units. You guys are going to hear a story today. So hang tight for that. But before we get to it. And it is attainable, by the way. It is. Like this guy, he's not, he's not doing anything crazy. He's just, you know, being really smart methodical. And if you want to achieve this, I mean, this is a fantastic show to listen to. Yeah, you'll love it. But before we get to the show, let's get to today's quick tip. To this quick tip is something that I mentioned later in the show as well, but I'll say it here.

If you go to the BiggerPockets, Forms, BiggerPockets.com, plus forums at the top in the navigation bar, which, by the way, the navigation bar is changing right now. So you'll probably see some changes to that. But in the navigation bar at the top, you're going to see a tab that says trending. I would highly recommend click on it and check it out. There's always some really good conversations happening in there. It's actually where we usually pull the fire round questions later in the show from. But yeah, go see what's popular.

What are the hot conversations on Bigger Pockets right now in the real estate space? You'll find some really good conversations in there. And you can chime in and offer your input or just kind of read and see what other people are doing. Absolutely. Awesome. Awesome. Great. All right.

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This isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action. The footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking,

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find a co-host at Airbnb.com slash host. All right, guys, this is show 239 of the Bigger Pockets podcast. You can check out the show notes at BiggerPockets.com slash show 239. That's BiggerPockets.com slash show 239. With that, if you're enjoying the show, if you're enjoying the podcast, get out there. Share this podcast with your friends.

This show today is about financial freedom. Who do you know that has been talking about it? That needs a kick in the pants. Financial freedom. Who is it? We all know somebody. We all know multiple people. Tell them about it.

Pass us along. Send a link to them. Share it with them. Help change their life. help transform their life, help transform. What? Transform. Different type of show, Josh.

Different type of show. I've been gone for a while. What have I been doing? Help transform their life by sharing this. BiggerPockets.com slash show 2, 3,9. With that, let's get into this thing. I was supposed to like I'd transform. I don't know where that came from.

Today's show. Today's show is. a fantastic show. We talk about financial freedom. We talk about figuring out your end goal, reverse engineering in order to accomplish and get to that end goal, buying real estate and bulk. We cover dozens and dozens of topics within here. Today's guest is Austin. Let me let me not butcher this. Hold on. Free sting. Awesome. Free sting. I asked him to like like a sting like a bee and he said yes, free sting, even though it does not look like that at all. In the KC area. And he's, killing it. This guy is absolutely crushing it and has lots of stuff to share. So let's bring him on.

Austin, welcome to the show, man. It's good to have you here. Good to be here. Yeah, this should be fun. So let's talk about your story. I mean, today we're talking a little bit about financial freedom. I know that's a big theme around bigger pockets and around your life. So before we get there, let's go into how did you get started with real estate investing? Walk us through that journey. Okay. Yeah, back in the fall of 2009. A friend of mine was like, dude, you really need to check out Robert Kiosaki's rich dad and poor dad. And so I read that as like, okay, all this makes a lot of sense. So then I ran out a huge spreadsheet projecting financial projections for every scenario I could think of for like the next 30 plus years.

And in every one of them, no matter how I sliced it up, putting the most amount of money into real estate investing got me to financial freedom much faster than any other methods. So then I went to the bookstore. I think I spent like 300 bucks and just bought like every real estate book, Possible started pouring over it. And then July 30th, 2010 was when I closed on my first property. Okay. And just since then, you know, we've kept acquiring. So that's nine months from, hey, you should read Rich Dad.

You've gone and you've bought your first property. Yeah. How did that happen? because, you know, so many would-be investors have that same first conversation that you guys had. And what follows is not a property in their hands nine months later. It's, you know, perseverating, it's fear, it's, you know, all these different things that happen for different people. How is it, and, you know, obviously we'll dive in on that property, but how was it that you were able to, really get yourself to that first property from a mental perspective.

What did you need to go through to get there? Yeah, 20 or 30 books and just pouring over every resource that I could. I mean, I just crank through anything I could get my hands on as quickly as I could. I've never liked reading, but man, I could just sit down and read real estate book after real estate book after real estate book. And so I... So you were motivated and excited. I mean, there was the motivation.

Okay, so let me rephrase the question because, again, I think everyone else who's in that same position is also motivated and excited, right? But there's that thing that stops them. You know, I think in most cases, Brandon, you and I've talked about this for years and years and years, it's typically some kind of fear. It's fear of stepping into the unknown. It's fear of, you know, all the things that can go wrong. Did you have fear or did you never have any fear? you're just like, I'm going to do it. I know enough that I need to know and I'm ready. Was it just that knowledge for you made it so fear didn't even exist? Well, I mean, pretty much. I mean,

I wouldn't really say that I was fearful going in at all because I'd always, you know, run my numbers really conservatively. So if I thought something was going to be between 200 and 300 for this expense, it was always 300 on my paper. So every expense got, you know, I would use the higher of all the numbers. and then just made sure I had a, you know, a buffer behind for any KAPX stuff that might come up. And is, and I mean, I think the fear is always going to be conquered by knowledge. Yeah. Like, if you're fearful of something, there's something you don't know, there's something you're uncertain of. Yeah.

And so figure out what the root of your fear is. And then you'll know what inadequacies you have in your education. Yeah. Then seek out those answers. I think that's great. And I think the two examples you gave, the CAPX and the assumptions on expenses, you know, picking the highest, I think that's a fantastic thing that everybody should do. Yeah. You know, and on CAPX, again, that's something where so many new investors and even experienced investors, they're like, oh, well, you know, I may not hold it for 30 years.

The roof's going to be fine. Yeah, I don't have to worry about this. I don't have to worry about that. And, you know, all of a sudden, they're like, oh, my God, I have no money. I have no reserves to take care of the new boiler or whatever else it is because they didn't think it through. But if you plan, like you're saying, if you've got that plan, you really think about it, you map it out.

Like the only thing that can go wrong is, well, you know, you had to do X, Y, and Z to get to that next step. You know all the steps you need to think, right? Yeah. It's like some of the stuff might, you know, kind of my worst case, I was thinking some of the big stuff might come up a little earlier than I would prefer it to happen. but I mean, it's it's, the big stuff's going to happen. So cool. Awesome.

That's great. I agree. I agree. And again, I love that tip too, but, you know, staying conservative of your numbers. It's really easy to want to fudge them, especially when you're having trouble finding a deal. It's like, well, I'll go with the lowest numbers. So anyway, I think that's a really good tip. So let's talk about that first deal.

What was that? I mean, what was your very first investment? Okay. So I'm going to back up just one step. My final semester of college, I negotiated a deal to buy a, just, you know, just a, just a little retail business in this little community right outside of Kansas City. And so I went straight into taking over that. I was able to get a seller finance.

You know, they were ready to retire and move on. And so my first property was actually the building next door to that retail business. So it was a commercial building. But that's just a little of the backstory of why I was even interested in that at all. was kind of to also control the space and what's happening around my existing business. That's a great idea. And what kind of business was it really quick? It was a flower shop.

Really? You're a florist. Yeah. You know, I grew up on a farm, and then I worked construction during college, and then about a flower shop. I think that's the logical progression. You're a tough guy. I mean, you know, my desire to do entrepreneurship was, you know, much greater than what the actual business was.

Sure. Sure. Look, was it a good business? The flower, flower business? I mean, it made some money. So, I mean, it wasn't like a huge exploding, you know, that's, that's also why they were looking to sell or finance, you know, some of those smaller retail shops that can support you if you're the owner and manager.

You know, it's hard to find buyers for those. Yeah. Makes sense. Cool. So you bought the first deal was a commercial deal and it was the building next to your flower shop. Yeah, and it had a couple, had two commercial spaces and then a lot of little apartments on the upper floors. And it needed, it had been neglected for a long time.

So we had to do a lot of work to the commercial spaces. And then over time, we started working a little bit on the, on some of the apartments. How did you put that together? Like, how did you finance that? I mean, you're just out of college here. And also, you're buying a commercial investment property. Well, it's in a smaller downtown. So it was, I think the purchase price was like 1.35, 140.

But we immediately put like probably 60. Yeah, just outside of Kansas City. Like I can get there. I live in downtown Kansas City now and I can get there in 40 minutes. Okay. So you paid 140-ish for it. Yeah. And then we immediately put about 60 into it as soon as we got it.

And that just got the commercial spaces up and going. and got those rented out and then worked on the apartments later. And another thing that I had done, thanks to some of Kiyosaki stuff, was I had gone around and, like, talk to some banks about setting up lines of credit before I ever had a property on the horizon at all. Like,

just to have more liquidity, more safety net, you know, to be able to pull from and do some of these projects. So is that where you finance the 60K? Yeah, most of that came from, yeah,

just lines of credit. I mean, we had some cash sitting around, but a lot of it came from probably two-thirds of it came from just lines of credit. Really quickly. Sorry, Brandon. I think we're having the same question. I'm back from a few weeks. So I'm like, I'm sharp, man. I'm sharp. All right.

So for somebody who hears this, they're like, oh, okay, that's cool. You know, it's great to be able to have access to that capital. How do I, as a newbie or somebody who's never done that, go to a bunch of banks and get lines of credit? what do I need to do? Go to the bank and just talk to people and ask them for lines of credit until they give them to you. Who do you, I mean, who do you talk to at the bank? You know, I had a couple, um, there's some smaller banks that I, that I knew that I would, you know, just contact one person that I'd made a connection with through the business or on some of them just, I've just walked in and just said, hey, you know, I'm looking for this. So and the person at the front desk will point you wherever you need to go.

Just find the best looking teller and go ask her. It's great. So is it literally like, hey, I'm looking to get into the real estate business. I'm going to be doing a bunch of projects. I'd love to get a line of credit so I can have access to capital so I can work on these projects. I mean, is that kind of the conversation that you're doing? I didn't tell them why I was going to need it or what I was playing on using it for. just went in, just see what I would qualify for.

And they'd either, you know, gave it to you or they wouldn't. So I'm guessing is there's just like unsecured lines of credit, like just like, okay. Yeah. My in-laws recently bought a rental property and a couple weeks before, or a couple days before closing, they all of a sudden didn't, like the loan they were going to do fell, fell apart. And they couldn't do it. And they ended up just going to a local bank and going in there and just getting an unsecured line of credit that cover the entire property.

Like it purchased the entire deal, like no, money down and it was just an unsecured line of credit. Explain guys what unsecured means to the people who don't get it. Yeah, it just means that there, you know, there's no asset that they can claim if you default on it. It's just based off your personal credit and, you know, however they want to underwrite you and whatever they're willing to lend you. I mean, it's essentially like a credit card, you know, with a certain limit, except, you know,

it's usually in the five to eight percent interests. Got it. Cool. Cool. Cool. All right. So you bought this first property, the two commercial spaces. Like, what was that like getting them rented out? Because I'm not, I'm, I'll be honest.

Like, I'm freaked out a little bit about commercial properties because I have this fear that I'm going to buy one. And then it's going to sit empty for four years because there's areas, you know, I see commercial buildings in my area that have been empty for four or five, 10 years. Yeah, I don't own that building anymore. And, you know, looking, everything works out. I had the right connections at the time. I was in the community. And even right before I bought it, I knew there was. like the largest space like used to be a bakery and it became a restaurant like I knew there was a new restaurant coming to town looking for a place and I knew I could sell them on on the space even though I hadn't even closed on it or bought it yet like he was interested enough he was willing to wait until I've finished it up and uh but yeah looking back you know I wouldn't recommend doing commercial for

especially your first investment. I don't have any plans on doing any additional commercial. What helped was there were all the little apartments too. So even if I was sitting empty in the commercial space, I could probably still break even on the building. How many apartments were there? There were 12 little apartments. You know, there were like, it was,

there were kind of one step above homelessness. You know, most of the tenants came from like the Catholic charity services and other places like that. There were four apartments that were like one bedroom with their own kitchen and bath. And then the other eight were four in a hallway, like two room rooms, and they shared a bathroom at the end of the hall.

Got it. And so like all, I don't know if you remember the numbers. What kind of cash flow was that thing generating? And how much did you sell it for? Why did you sell it ultimately? Well, I sold it because somebody came to me and asked me if I wanted to say, sell it, then they gave me a price that was made it willing to sell. I think we had just over,

right around or just over 7,000 gross rents. There were a lot of really expenses with that, you know, like over a thousand bucks a month in utilities. But, you know, when it was full up and I wasn't having to continually improve, you know, cash flowed very, very well. But for the first year or so it all just went to paint off the lines of credit that I used to get it up and going and then and then when I sold it I actually used all that cash to pay off my business loans so that I could eventually sell a flower shop and which I did two years ago and you know I had to sell our finance that as well so nice all right so before we move on you're 200k and you paid 140 you're 60 and you know you're doing that 7k in gross rents what would you end up getting out of

that thing for i say we'll sell it for uh 285 and i'd say all in i was probably about 220 30 okay so it's not a bad a bad first deal yeah yeah yeah lose money you live i held it for a few years made some good money in the dinner room and yeah and then it allowed me to sell my day job awesome all right so what came next i mean Well, actually, before I ask you that, let's go to the end of your story. How many total units do you have now? And then we're going to go back to what came next. Okay.

I have a total of 141 rental units across 58 properties. Wow. Okay. So you've done a lot in the last few years. So let's go back then. Yeah. How did you get there? Walk us to the next few deals that you bought.

Okay. Yeah. So in 2011, you know, I bought a couple duplexes and two houses that I ended up just flipping the houses, just picked up some cheap four. closures and then just a couple duplexes that year and then you know the next year like a six unit and a few houses and you know just kept adding whenever I could I had no set plan as like I want to add this many here this many here it was just when when the right deal was there I'd do whatever it took to get it done nice that's cool that's cool so you were looking at residential properties mostly

I'm assuming only you weren't doing commercial anymore it's got to see no commercial anymore Okay. And how are you finding them? How are you funding them? Pretty much all of them came from the MLS. Except there was a set of three homes at the bank that I worked with. Contact me. It was like, hey, we have these three homes. You want to buy them from us in a little package deal and we'll set it up like this. So other than that, all those first mini deals just came just off the MLS. And I would usually try the Burr method. And I didn't know that term at the time, but, you know, the value add.

And I would use just traditional financing, you know, 70%, 75% loan to value and use my lines of credit for oftentimes even the down payment for that and the rehab costs and then refinance it after. And repeat. Repeat. Yep. We're over and over. Awesome. I forget the repeat.

Yeah. So on those three homes, you know, that's interesting. You know, we've certainly had people on the show who have had similar things. In your case, again, somebody listening is like, oh, that's so cool. Like, how great would it be if all of a sudden, like, the bank came to me and was tell me about properties that they wanted to get rid of? Like, you don't even have to negotiate with other people. You don't have to fight for it. Just negotiate direct with the bank.

So how does one position themselves, or at least how did you? you position yourself in a way that that became a possibility. Yeah. So this bank that gave them to me, they were, it's a bank that I have pretty much used for all of my stuff, except some of the lines of credit. You know, those were established other places. But as far as all of my real estate loans, I mean, they have almost every single one of them.

And so I just had the relationship of continuing to buy. And they got their payments every month. And anytime I was rehabbing, I had it, you know, done within a reasonable amount of time and, you know, done to the level that I said I was going to do it. So, I mean, it just always followed through on whatever, you know, whether it be the loan or the, they did finance a couple of my partially financed some of the rehabs that I did as well. And, you know, I was always on schedule and on budget. And so, yeah, it was just the relationship built after proving myself and paying that. them a lot of money every month. That's cool. And I think, I think so much of like businesses like that, right? Like if you do what you say you're going to do and you prove yourself dependable,

people are going to want to work with you. You know, we talked about that last week, I think, maybe two weeks ago on the podcast about, you know, open up a checking account with the bank that you eventually want to work with and start talking with them and building those relationships, kind of like you did at the beginning with the lines of credit. So I think that's, I think that's wise. So let's talk about like you mentioned earlier, you didn't really have a plan or a strategy. You were just kind of buying. I mean, like that happened. Like, did you ever actually say, okay, now I'm going to be committed to doing this a certain way? Or have you always kind of acquired your property just kind of as they came? Well, I mean, I always knew this was, I was playing

the long game. So I had my, my long goal of the financial freedom. And to do that, I want to be able to be maximizing my cash on cash return. And so if the deal wasn't there, you know, especially like for the value add or because I also knew the Burr method I knew that's how I was going to move the fastest. So if there wasn't the deal where I could purchase it and get it fixed up and get the right rents to get it refinanced, you know, if those deals weren't there, I would just sit around and wait until they did. I think some people get caught up and like, I want this many properties by this date and this many properties by this date. And I mean, I guess if you're buying turnkey, I wouldn't do that, but whatever. But it all depends on, you know, that.

end goal and with my end goal being the financial freedom you know actually in 2015 I didn't buy a single property because I just didn't find any deals that I liked nice okay so I've got I got a number of questions one you you poo-poo turnkey really quick why is that I mean I think if you want to be it would never have served my goals I don't see the the rent to purchase ratios that I would ever be interested in the lack of control, you don't have the, you know, the hands on. You don't get to add the value. You don't get to force the appreciation and, you know, force the rental increases.

I mean, you're just giving money and letting somebody else do completely everything. Yeah. And I think it's. Yeah. You know, I'm less than seven years. Well, at the time we're recording this, less than seven years from purchasing my first property. And, you know, we're financially free. we have, you know, 141 units.

And that's definitely not going to happen with trying to be a passive turnkey investor. Well, so how old, how old did you when you got financial freedom like were you? 32. 32. I mean, that's really good. You know, like a lot of people are listening to this and they're like, man, I'm like 50 years old. And I still don't have it. Well, I know where you're going, Brandon.

I want to dip in for a second here. Because before you go to where you're going to go, I want to. I want to make sure that there is like financially free is kind of a fuzzy word, right? Or set of words. Yeah. Like financial freedom for you is going to be different than financial freedom for Brandon who has a car habit. Who's financially free is different for, you know, somebody else, right? Yeah, for sure.

So, you know, financially free for one guy maybe, you know, ramen noodles every night and never going out on a day. with his spouse and maybe, maybe every five to 10 years taking a day off, right? So for everyone listening, like, there are tears of financial freedom. Obviously, Austin, I'm assuming that you went and said, hey, what is my lifestyle? How much do we spend? How much do we need to live how we want to live? And your financial freedom is how much I need to make every month in order to achieve the lifestyle that I'm happy with, correct? Right, exactly. We started with. Not even like, you know, what's our lifestyle now? We thought about, okay, if we weren't working, what would our ideal day, week, month, and year look like?

And we just mapped out the ideal or what we thought would be ideal or close to ideal. And then we reverse engineer. And then we'd be like, okay, so if we wanted to go out to eat this many times a week, okay, we average probably this much between the meal and a couple of drinks. and so that would be this much. And so we didn't think about the budget at all. We thought about the, we designed the lifestyle that we would want and then calculated how much that would cost.

That's awesome. That's awesome. I love it. I think it's fantastic. And I think everyone should do it. Frankly, what's funny is like I'm on another document writing, Julie, we need to sit down and write how much we really need to make every month.

This is like, yeah, we've never, we've never done that. We've always kind of like, oh, okay. You know, we should know, like, hey, you know, your kids are in high school. Do you want to pay for a private school? You know, college, are you going to pay for college? How are you going to pay for college? All that stuff. You know, the vacations, all the trips, all that stuff, like really mapping that out.

So you can think it through. I'm assuming you did that. So that's awesome. Yeah. And, you know, before we had done that, you know, it just picked some arbitrary target. And I don't know if I was saying 150 or 200,000 a year kind of post tax or whatever. But then I started thinking as like, well, what like, yeah, we need to sit down and actually calculate what the number is. And when we mapped out our ideal lifestyle, and I mean, and this has like $1,500 a month for travel, we even talked to, okay, how many bottles of wine or bourbon do we want to go through in a month?

Like, okay, what's that going to tally up to? And we did that. And we came out, you know, around 84,000 a year, you know, way less than I had initially thought that I would want to live kind of my happiest existence per se. That's cool. It's fantastic. You know what I love about real estate is that like real estate investing gives you the ability to like work backwards, you know, from, okay, now that I've got that target

monthly income or target annual income, how many rental properties is that? Like what, what cash and cash return do I need or what, you know, if I buy a hundred hundred units and I'm averaging $100 per month per unit. That's, you know, 10 grand a month. There, I did it. You know, like very few investments you can do. I mean, I could go buy Tesla stock, you know, and I could hope that it goes up in price. And I'm not saying people shouldn't buy stocks, but like, there's just something really cool about real estate being able to work backwards to a number that says, this is what I need to do. This is how I'm going to get there. This is, you know, like, I love that stuff. Yeah. I'm going to say, you know, I'm going to just cut you off.

Cut me off. Too much. I've had, I've had too much tonight. Yeah, too much, too much. No, you, You can do that with stocks, but in a market like now, you can't. I mean, it's the same thing. Look, appreciation versus dividends, right? I mean, dividends are kind of the same thing as rental income. It's, you know, ideally it's predictable. There's companies with long track records of growing dividends, things like that. You have the control in this case.

And dividends, you know, if you're lucky, you get a 4% dividend from a stock versus real estate where you can get that, you know, much higher cash and cash. But, like, you know, I don't want a thousand percent poo-poo stocks and stuff. Stocks are terrible. But Austin, I don't know, we're not going to get into this debate. Yeah. Interesting point. I did do the math on how much cash it would have taken me to, if I were invested in the market, over the seven years to hit this goal.

And, you know, there's a 25-time rule or the 4% rule, meaning you need to. 25 times whatever your annual income needs are in a stock portfolio in order for an indefinite retirement. And if I would have, it would have been like $1.65 million that I would have had to put in personally over seven years because there's no, you know, you're not getting hardly any compounding benefits in that time. And I only have $150,000 of my own money into real estate. Yeah.

And that's where I would say the biggest benefit to real estate. it while. Yeah, right, is like the ability to not necessarily do like no money down or low money down, but to pull cash out, to be able to put it into different things, to get creative with the financing, to bring in partners, to bring in banks, birth strategy, all that stuff, you know, like, yeah, when people compare, hey, I'm getting 10% on my, on my investment from, you know, whatever stock, like that's great. Like, I'm getting an infinite return on my investment because I put nothing into a deal, you know, so you're making $100 a month. I'm making $100 a month, but you put, you put whatever tens of thousands of dollars into a deal, I put nothing.

And again, it's not one way or the other. It all works, but that's something I like about it. Hey, before we move on, I know, Brandon, you've got one or two questions. I've got my, the last thing I'm really thinking about here is, okay. And I think we should ask this question more because of just sheer timing. You know, KC market's been pretty, pretty slow and steady. It's been pretty reserved and safe over, over, you know, a fairly decent amount of time. What do you do if the market turns?

I mean, you know, people are talking that the market's a little topy in lots of areas. Lots of investors are starting to, you know, have really leveraged themselves out. So if the market drops X percent, you know, we start seeing rents start to fall, things happen. How do you deal with that? Have you thought about that? Have you planned for that? Yeah. With most of my rentals, I mean, the rent rates are not going to really drop.

I'm not in high-end rentals. I mean, I probably averaged around seven, maybe $750 a month per unit in rent. So in that tier, like your rents aren't going to drop a lot. And so if the market turns, which, you know, there will be a correction at some point. I mean, it's always going through cycles. I don't know if that's coming now or another five years or, you know, I will never try to predict that. All I hope is that I have quite a bit of capital available at that time to buy as much as I can.

I mean, that's my plan for it going down is to just acquire as much as I can because I'm a long-term buy and hold for the financial freedom and passive income. So the only time the market value of my properties matters is if I'm going to sell it or refinance it. Yeah. So what is, let's define that long term because, you know, some people are like, oh, I'm a long term buying hold and it's every three years. Well, yeah, that's obviously not long term. But what is long term as you see it? Life. Is it Warren Buffett?

I buy it with the expectation. I'm never going to sell it. Very possibly. Yeah. I have no intentions of, I've got good teams in place. And so it only takes me probably an hour a week worth of work to stay on top of everything. So that was actually given my next question is, you know, we talk about financial freedom with rental properties. And I would say, well, you know, if you own 100 rental units, that's not, you know, that's 40, 50, 60 hours a week of work, isn't it?

But like, how are you, how are you doing that with so little work? I mean, I have really good property managers. I mean, that's the biggest key. I mean, that's where all your work is. And so since I trust them and they do a good job, you know, the majority of my monthly work is just on the back end. bookkeeping side, updating quickbooks for every LLC that I have, and, you know, then answering just a couple questions here and there for the property managers on any, on any bigger issues that might have come up. And other than that, you know, they just, I trust them to just go with it. And yeah,

my main property manager actually started that company because I didn't trust the ones at the time. And so I started that company. And then I recruited these people. It was like, hey, this business would be perfect for you guys. And here's why. And, you know, they saw it and they've been, I mean, they've grown it like crazy. And so it's worked out for for all of us. So, okay. So did I miss here? You said you started your own management property management firm because you couldn't find a competent property management firm where you were. And then you found managers to come and fill the, so how many managers do you have working at your firm? Oh, no. It's not my, um, oh, It's not my firm.

I understood it. Okay. I started it up and got it up to about 50 some units. And I had an employee that was handling quite a bit of it, but he left. And so I was kind of at a crossroads between my other business trying to do my own real estate thing and with rehabs. And the other business and everything else, I was like, okay, so I've got to really kind of figure it out here. And so at that point, I actually decided to sell the business if I could. And I went to these people that I would trust with my properties and, you know,

convince them that it was the right business for them. Got it. Got it. Got it. So how do you find a good property manager? Because, you know, if you're that hands off, I mean, you wholeheartedly trust these guys. How do you vet these people? How do you find somebody who's qualified to do it?

at least for you. You know, I just, I had a personal relationship with these people. I mean, the ones that I sold the business to. So I have not had to like actively search for a new property manager, um, any other time. So I haven't had to actually go through that process. But it would, it would just come back to like knowing what all goes into property management. And then, you know, I would say interviewing the people.

And if you know what all goes into it, you know, you can reverse engineer that too. and know what to expect, what questions to ask, what might be red flags. And yeah, that's definitely one of the trickier parts in the industry. Yeah. All right. So you buy a number of properties a year. You've got your property management set. You said your hours on accounting.

Obviously, you're spending your time also on the acquisition side. Is that just kind of like, you know, kind of passive? Like, oh, you know, I'll spend 20 minutes looking at the MLS to see if something new pops up. How are you kind of finding your deals, or at least from a time perspective? Yeah. So the hour a week is my maintenance time. That's not my new acquisition time. Like, yeah, that hour a week's just the monthly bookkeeping and the year intact stuff and all of that combined out.

On the acquisition side, you know, even though we've reached our financial freedom, I'm just doing this because I like doing it. So it's more, I don't time any of that. Like I love just sitting down, like clicking through and looking at properties and kind of running through possibilities. The differences I'm looking at larger packages and portfolios now. So those are, you know, much fewer than trying to sit down and look at every duplex. But I still will do that because one of my largest, actually my largest deal came from there was one property on the market. I looked it up and I always do a tax search.

And I knew this person owned a lot of property. And so it was kind of a red flag for why he might be selling just the one. So I called around until somebody gave me his personal cell phone number and I called him up and talked to him. And he's like, well, yeah, we're looking to retire in the next three to five years and we'll probably be unloading, you know, everything over time. I was like, well, that's great. because I would rather do a package deal.

And we ended up buying, you know, 80 units from him. Oh, wow. Wow, 80 units from one person. That's amazing. Was that all in one, like was it a portfolio of houses or was it a bunch of properties or what was that? It had everything from single family houses up to a 24 unit. Wow. And how did you?

Let's talk about putting together that deal. That's pretty impressive. I mean, first of all, like, how did you approach that with him in terms of, Hey, do you have anything more I can buy? Hey, can I buy your portfolio? Can I step back one? Can I step one back on brand? So you said you did a tax search.

Like for somebody who's brand new, who's never done that. All right. You're looking at this property. You said you'd look at do a tax search on every property. What does that mean? And how does one do that? Yeah, you just get on your, it's usually just going to be on your county's website. And you can search the property address and it'll give you the valuation according to

the county, the annual property tax is paying. It'll also give you the owner's information. Got it. So now you know the owner's name. How do you get the owner's cell phone? I call it my contacts at banks and the gnome and other contacts. So somebody was like, oh yeah, I've got his information. I started with just asking for his email.

But the person that gave me the information was like, uh, sometimes he's a little slower the email, just call a cell phone here you go. Yeah. So you're calling, but you know, there's tons of banks out there. How do you know what banks to call? How do you know what people to talk to to see if you can even get there? Yeah. The community I'm in right outside of right on the edge of Kansas City is a smaller community.

So there's only a few community banks in the area. So it wasn't too hard. And just being in, you know, it's a. 11 Worth, Kansas, which is about 40, 50,000 people. People just know people. It's just small enough. So the logic that you presume is this, right? It's, hey, this guy's got a lot of properties.

He's obviously an active real estate investor or was at some point. If he got to the point where he has that many properties, he either had a ton of money on his own or he had to work with the local banks. Let me start with the banks and see if they can help out. Okay. I just, again, so folks who don't understand this can follow the line of thinking, that makes a lot of sense. And that's great. So you get to this guy.

Brandon, now take over from your questions. Yeah, so how does that conversation go? Like, if somebody's listening to the show right now that wants to do the same kind of process, what should they do? Yeah, I just called them and said, hey, you know, this is who I am. I see you have this property over here at this address for sale. Do you mind if I ask why you're selling? And that's when he said, well, yeah, we're looking to retire in this amount of time. And we'll be slowly unloading things over the next three to five years and told my wife we'd move to Florida after we retire.

So. Nice. Yeah. It was just kind of an awkward little conversation with somebody I hadn't met before. Well, you know what's what's interesting. about contacting landlords or other investors about real estate is that, you know, if you contact a homeowner, I mean, nine times out of 10, they're not going to want to sell because they like living in their houses. But if you contact most investors, like most investors are willing to sell if the

price is right. Like, and for a lot of them, people are just not good at being landlords. I'm not saying that guy was or wasn't, but like a lot of people are really, really terrible at owning rental properties and there's headaches and they don't have systems and they're not good at what they do. They don't listen to the Bigger Pockets podcast. So like I, I suggest. to newbies all the time. You know, if you're having trouble finding deals, a very simple thing you can do, even if you have no money at all, is go on Craigslist, go onto the, like, the actual four rent listings. And like, landlords are on there. Like, look for the mom and pop landlords. I mean, they give you their phone number in the ad. Like, how much, how much easier can you get?

Like, they're like here, you know, look for the, yeah, the crappy ads on there that it's like three better, two better apartment and call them and do it on a weekly basis. I mean, set up a time every week for two hours, you do nothing but call landlords on your area. And I bet you have of them will entertain a conversation about selling because they suck at being a landlord. Yeah. So that's a great. That's a great idea. Thank you.

Awesome. On that package, you know, I don't need to know all the details. I mean, you said 80 units, but presumably you buy something like that, you're going to get some kind of discount for that package. You're not paying retail for the property. So, you know, all said, what kind of discount did you get for that monster portfolio? Well, I don't even remember what his first price that he threw out for everything, because he started with a whole list of stuff. And I went and drove by every property and, you know, scratched a few of them off. And then I just kind of put together the packages I wanted and said I would pay, you know, this for it.

And we went back and forth. So it's hard to say what I guess, you know, from retail. Let's assume retail and then, but, you know, 80% of retail. Yeah, probably around there. maybe even a touch under. Yeah. But it's pretty good. Yeah.

Nice job. Well done, man. Yeah, that's very cool. So, thanks. Awesome. All right. Before we, before we move on to the fire round, I'm curious like, where, where are you headed next?

And what's your, I know you're saying you do this now. It's retired, baby. You're retired, but. Yeah, but I still love it. Yeah, we love that. I just closed on a 32 unit deal one month ago. Yeah. What was that deal?

Where was that at in the same area? Yeah, up in the same area. And it was a seller that, I mean, they had listed everything on the MLS at once. And I was probably one of the only or few that came with an offer to buy, to buy it all is eight properties, 32 units. So, and this one might actually be, I think by the end, the best deal that I've done. Really? Let's talk about that. I mean, what were the numbers like on that?

Current rents are 16,700 a month. I've picked it up for a million 62. And if we put about 150 to 180,000 in total, I can get the rents up to about 24,000 a month. Wow. And so, you know, we would be right at about 1.25 all in for the purchase and the value ad. But a lot of that value add we're going to be able to pay for out of cash flow as well over the first two years. You've increased... 50%.

Yeah. Yeah. Yeah, for me. Awesome. Just under 17,000, about 24,000. So, yeah, I'm only spending 100. It was already at a pretty decent ratio. But then I'm only spending 180,000 for, you know, an additional 7,000 in rent.

So how did you find, I mean, how do you put together a finance financing on a big package like that? I work with a portfolio lender. Okay. You know, for those of you listening, That's the banks that service all their investment loans in house as opposed to selling them off. They have more flexibility in what they're doing. You usually probably pay maybe an extra quarter percent or whatever. But the ease of getting through the system is so much, so much easier.

Because if the guy making this decision, it's a loan to the money, likes the deal. You know, that's all it really takes. Yeah. And again, I've been working largely with the same bank over time. So I even called up the VP that I work with there and just said, hey, I'm about to submit this offer that just came on the market today. Would you shoot me over a pre-approval letter for this? He's like, well, yeah, it'll say subject to like appraisal and board approval since it was over a certain amount. I'm like, that's fine.

The seller is just going to look like a pre-approval letter to the seller. I mean, to the seller. And so I'm just looking for any little advantage to get the deal locked up. Yeah, that's fantastic. I love that. Awesome. Would you have to put for down payment on that? Oh, yeah.

We put just like $106,000. Okay. Wow. If you put 106K, so you did 10% down. Yeah. Wow. Wow. That's great.

That came over time to, you know, after the years of proving myself with the bank, they would start doing things where if I could buy correctly, you know, they would lend 70% of the appraised value as long as I put a minimum 10% down. So if I was buying under 80% of the appraised value, yeah, they'd let me purchase with just 10% down. Yeah, that's fantastic. And again, another benefit of working with like portfolio lenders, the small local banks that can do that and be creative. They'll they'll work things like that because it's a win-win for them. Yeah.

And you, you know, at the beginning, you just get your typical loans from them and everything else. But as long as you keep proving yourself, yeah, it opens up some other doors like that. It's fantastic. It's one thing that I should have done a lot more of. I mean, I've done a lot of like Fannie Mae Freddie Mac mortgages and I would shop around trying to find the cheapest rate everywhere. Like looking back,

I should have just picked one good lender, one good bank and probably done the majority of my stuff with them. Because like my, the thing I hate most about real estate really is like paperwork and having to get mortgages and refinances and all that. Like this stuff drives me nuts. But when you work with a good lender, like they have your information.

I mean, it's worth a quarter percent or half percent you might pay. Yeah. At the end of the year when I get my taxes, I email my new taxes to them so they have them on a file. And then maybe if I bought anything, I update my schedule of real estate owned. And that's all I ever have to do for them. Yeah, I'm sitting here thinking about our business.

We work with one of the monster megabanks. And, you know, like everything is a pain in the ass. Yep. And I, you know, like, why do I do this? I just need to work with a local bank. Like, you know, we've got a great business. They will be so much more amenable to everything that I need and want and ask for. and like, you know, all right, whatever.

I'm on it. I'm on it. All right. Austin, this is great. Thank you. Thank you. Fantastic stuff. I think it's time, man. What do you think, Brandon? I think it's time for the world famous. It's time for the fire round. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase

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That's bill.com slash bigger pockets. All right, let's get to today's fire round. These questions, of course, come direct out of the bigger pockets forums, which our listeners can get to by going to biggerpockets.com forward slash forums. And just a quick tip for people, I actually think this is kind of cool. If you go to the forums and you go to the navigation bar when you're there, there's a little option says trending, which is kind of cool. So if you guys are like, you know, what's the most trending, popular?

stuff going on in the forums. Go check it out sometime. It's kind of cool. That's where actually I get a lot of these questions from. So anyway, number one, I'm looking for advice. We have a rental property, which is infested with German cockroaches because the tenants are unclean. My property manager visited and sprayed the place, but it was not effective. He saw food all around the house and the general condition was filthy. Now we are planning to get pest control company to take immediate action, but is there a way to penalize a tenant for failing to keep the property, to upkeep the property? So I got to ask a quick question before you even answer that. No, this was not my question.

Because Austin's rocking headphones with the red and black stripes of Germany. And you happen to pick a question. Talking about German roaches, man. That's kind of messed up. You know, I'm getting a little more aggressive than bigger and stronger. I guess so. Anyway, wow. So what do you do about the fact?

Do you make the tenants pay for them or what do you do? Man, I mean, that all is going to depend on your state's landlord tenant laws, how your lease is written up. You know, I mean, there's so many factors that are going to go into what you can actually do. Yeah. In that case, but. What would you do? No matter what you got a call from a property manager who tells you that problem. What do you do?

Yeah, we would, you know, we would pay to spray, but we'd also, you know, let them know, hey, like, they're on. the nice. I think we do have some clauses in there that would that that amount of uncleanliness would be considered kind of a breach of the lease and we would be able to get them out pretty quickly if we wanted to. Yeah. That's actually happened to me a few times with the roaches like and it's always because, no, not my house. In my tennis house. It's always because like it's really nasty living conditions. We'll usually at that point like the first time we might pay to spray like even in our leases now it says like after 30 days it's your responsibility. So we'll build them if they don't pay it.

But then we usually just ask them to leave. We'll just give them notice, hey, you're out. Sometimes, you know, if your houses are close together, if you spray this house over or if, you know, your neighbor had cockroaches and they sprayed here, it usually doesn't kill them. What it does is they, psh. Yeah.

And so sometimes you can end up with roaches and it's not even a uncleanliness thing. It's like, oh, my neighbor was really dirty. Hey, Brandon, and those roaches were German roaches. They were actually pit bulls. I believe you. I believe you. All right. Next question. Nice question. Soon, many of us, quote, newbies will be making their first moves in the REI world.

It's quite a daunting idea that seems to overwhelm a lot of first-time buyers for various reasons. One reason that I've recently run into while searching for my first MF home in Louisville. Is that what exactly gives me a competitive advantage? Okay. So that's the question. What sets me apart from the experience investors in my area? How can I get a good deal when I'm going out against the big dogs? How does somebody new compete against somebody like you in trying to acquire a property?

I mean, that's you don't. I mean, I'm not going to go sit down with the chess masters of the world and be like, hey, how do I like and expect to get an advantage on these, you know, people that have put in so many hours in a study. I mean, what you need to do is, you know, to improve your chances. I mean, you're not ever going to have a competitive advantage against a pro. I mean, that's just probably not going to happen.

But all of us that are pros started as complete novices and beginners too. So, you know, it's about the amount of time you put in. So with your study and knowledge and education and, you know, especially in, uh, in today's market, I think that speed is probably the number one factor. Yep. And just getting that offer, getting that offer in. Like when you see that great deal that, you know, he's alluding to in this in this post, you have to be confident enough to act quickly and get your offer in to have a chance.

Because guys like me, I'll, I will just see it. And I'm like, yep, that's, I know that's a great deal. Here's my offer without even going to see the property and shoot it in. And so yeah, you just got to be quick. Mm-hmm. Nice to do. All right. Nice questions.

I'm currently a senior in college and I'm giving thought to where I want to live once I graduate in May. I want to invest in buy and hold properties with good cash flow. And I've heard Austin's a good place to live, but the market's too saturated. So I want to pick a good real estate city because I want to invest full time there. Where would you invest if you could move anywhere in the country? Where would I? Or where should they? Where should they?

Where would I be like, where should they? Yeah, if you're giving them advice, where should they move to if they can go anywhere in the country, their open book, like it's blank slate. I would say move wherever you're going to be happiest living. Okay. And figure out a strategy that works. Even if it adds like an extra couple years onto your, you know, acquisition time for your goals, who cares if you're enjoying those two years a lot more than just going out and living in some miserable little place

because you don't enjoy it all. insert Detroit joke here Josh says the guy who's financially free and doesn't have to worry about it. No, I'm just kidding. No, but you found a place that you lived in where that can happen, right? So what you're saying is like,

now, hey, don't just go to, as Brandon says, Detroit, because you know you can buy property very little, hopefully still, or hopefully not still, and make a good yield from it. If you would hate living in Detroit, Don't go to Detroit, right? Go, go find some city on the map that you're happy at. Exactly.

Yeah. You know, I probably could have retired even sooner. But, you know, there were things like we did big trips, traveling. You know, I'm not the, what's the analogy? Like, I'm not going to be the guy that gives up a glass of wine now for the promise of one 40 years from now in retirement. Like, you can, you figure out a way to do, to do all things. Fair enough. I like that.

Excellent. Yeah, I think people oftentimes will, like, we get into real estate because we want financial freedom, but then you work for 20 years flipping houses and wholesaling all this. And at the end of the day, like, what did you really do? You know, like you take your eye off the end game. And anyway, that's about life now and life later. So cool. All right.

Last question of the fire. Last question. With so many landlords on here, and he's referring to bigger pockets. And so many good tips always being shared for newbie landlords. I'm curious, what has personally been the best few pieces of advice that you've gotten as a landlord? So what are your best landlord tips that you? Well, you've got to, I mean, these are more just from my experience. Sure.

I can't remember anything from, you know, books were my mentor. I mean, that was all I used. I think the biggest thing is just making sure you treat it like a business, that every part of it is business. You know, at the beginning, I was proud to own real estate and I'd be like, yeah, I'm the owner of this duplex and, you know, felt proud about that when I was, you know, 25 or 6 and I had these rental properties and everything. And man, when they know you're the owner, that's when they want to come and be like, oh, well, you know, can you just grant us some leniency on this one, this one month? We promise this will be it. And like it not charges the late fee. And, you know, you want to be a compassionate person. And so you grant that.

And then it just keeps getting worse and worse and worse. And so that was when I just started saying, no, I am the property manager. Yep. And again, just treating everything like a business. Yep. I think that's smart. I think it's very smart. I think people, yeah, you know, on that, I know this is fire around.

So we got to be quick. But like on that, no, people are the compassion. thing, right? A lot of people think, like, to be a landlord, I don't know, like it's a jerk to enforce the lease or you're being a jerk if you're going to enforce a late fee, but you want to be nice. Yeah, and you're not, but they will make you feel like that. Yeah, but ultimately, like, I like to think of it now this way. Like, when you enforce a late fee, yeah, you're charging someone 50 bucks or whatever. What that's actually helping the tenant in almost every case, it helps the tenant. Because if you don't do that, like, their human tenant nature is to, like, they pay late one

month, the next month, if you let them off, they're going to pay late again. And like, you become a lower priority and eventually it ends with an eviction. And so like, you're saving them by 50 bucks. You're saving them from eventually getting evicted. Yeah. And you're keeping them, honest. I guess is how I look at it. You're training. You're training them. And, you know, maybe building character. They were not, quote, trained or had little character beforehand. And, you know, it's helpful. So yeah, no, I, I, you know, and some people have said, well, you're being dishonest by telling somebody you're not the owner, but you're the manager. If you're the manager and the owner, look, if you're putting the tenant in an advertising

for lease, or you're not the manager? That's exactly. That's the role you're in. No, I think what you're saying is like, look, there's, I'm not accusing you of it. I'm just saying, like, this is a debate that we've heard. Yeah, yeah, yeah. So it's, you know, look, there's disclosure and there's like, oh, I also have 683,052 cents in the bank. I also have X, Y, Z.

Like there's disclosure and then there's like you don't need to know who owns the building. I'm the manager. So that's all you need to. You know, class A rentals and you're talking 1,500, $2,500 a month in rent. Those are the easiest ones to manage. I mean, so yeah, that's really easy to be like, I'm the owner. When you start getting down into these, you know, CEC plus properties, B minus properties, that's those tenants are a lot tougher to manage.

And it's just a lot easier to have that separated out. Awesome. All right. Well, before we get out of here, let's get to our last segment of the show, which we lovingly refer to as our famous four. All right, these are the four same questions we ask every guest every week. Number one, out of all the real estate books you've read, what is your favorite real estate related book? You know, obviously talks about how I got started. I've got to give it to Richette Board Ed as probably 80% of your podcast guests do. But yeah, I mean, without that book, I don't know if if or when I would have. have ever even started down this path.

Awesome. Awesome. Hey, Brandon, when was the last time you read that book? Yeah, probably a year ago. Not really. I try to read it once a year. I don't think I've read it in like 10 years. Probably should be rid it once in a while.

It's good for like inspiring. Oh yeah, that's what I'm doing, you know? Yeah, yeah. All right, favorite business book. Okay, so this one is a little bit off the wall. I gave some thought to this. It's actually a psychology book. It's called Thinking Fast and Slow.

And it's all about how the human mind process. processes and makes decisions. And oftentimes you think that you're being completely rational without even knowing that all of these other influences and biases are there. And so I think like, you know, going through that book and really being aware of what's happening in your mind when you think you're being rational and might not be, I think it can help you make a lot better decisions. And then also it can by knowing what's going on in other people's minds, too. It might also provide some other opportunities to exploit some situations and, you know, hedge out a little bit better deal than things like that.

Very cool. Very cool. And of course, you can go to biggerpockets.com slash rich dad to get a link to Amazon for that or bigger pockets.com slash thinking fast to get a link to that book. Awesome. Anyway, make it easier in people. Perfect. What do you do for fun, man?

What are the hobbies outside of real estate, obviously, which I can tell you clearly do for fun now. Yeah. Yeah. It's all fun for now. Yeah, I mean, I love like traveling and hiking, I'm building out an overland vehicle. But, yeah, actually just a week and a half ago, I was driving through Denver to go do a backpacking loop out, Maroon Bells. Oh, nice. Here after I get off here, I'm going to pick up my wife from the airport.

She's been in South Africa with her best friend for two and a half weeks. So, I mean, we, yeah, the traveling and hiking, I mean, just any type of experience. Sweet. Sounds great. All right. My last question of the day. Austin, what do you believe sets apart successful real estate investors from those who give up, fail, or never get started? Yes, I've given, I mean, obviously with my favorite business book being a psychology book, like, I've given a lot of thoughts of this just over the time too, but especially knowing that you're going to be asking

me this. And in my opinion, it all comes down to the word why. I think it starts with the big why, starting with kind of that end goal in reverse engineering. And, you know, if you have a real reason outside of like, oh, I just want some extra money. But if you have a real reason and why you're doing it, you know, all the persistence, discipline, effort, energy, you know, and tradeoffs you have to make are really easy to do because, you know, why you're doing it. And so I think that weeds out to people that don't get started or quit. And then I think the difference between like the most successful is they know the the little wise behind like, why am I using this expense percentage for this type of property or this for this and why am I not doing this and why is this the best strategy for me and why aren't these the best, you know, knowing that theory as opposed to just trying to follow some playbook. Details. Yeah.

Experience. Yeah. It's awesome. I like that. I like it. I like it. I like it. All right, man, before we let you go, where can people find out more about you? Yeah, I have a blog, Good Lifein10.com, Instagram, Facebook, same thing, Good Life and Ten. And that's TEN. Yeah. Not the number 10. Cool. Good life in 10.

I like it. Well, thank you so much for coming on the show, man. It's a great show. A lot of really, really cool little details. Congrats on all the success you've had so far. Good luck going forward. And we appreciate you coming aboard. Sweet.

Thanks for having me. All right, guys, that was Austin Free Sting. Big thanks to Austin again for coming on the show. That was great, man. It's good to be back. Wow. Yeah, it was a good episode for you to come back on because, you know, it's, I don't know, it was a really, really good episode in terms of especially like knowing that you

can reverse engineer financial freedom with real estate. It was like hearing a real life example of how that happened. I know, it inspires me. And I'm sure it inspires like a lot of you guys. listening. Like, go out there and do it for yourself. What do you need? Jot down exactly how much you need to make. How many properties is that and work backwards and go get it? You can do it. Yep. And like I said, if you know somebody who is looking for financial freedom, I think this is a great motivator. So get out there, share it, tell them to go to biggerpockets.com slash show 239,

listen to this podcast. And that's it. It's good to be here. I don't know if it's good for you to be here, but, you know, it's all right having you back. Are you coughing? Are you coughing? I was meeting. I think you have the black lung. That's great. Yeah, I caught something up in one of those parks that I was at.

Yeah, you caught something all right. I did, I did. Yeah, yeah, yeah. Awesome, man. Well, listen, again, great to be back. Actually, funny, funny story. Not that funny a story, but. More blue sludge?

No, my youngest had fallen off the couch yesterday. She was playing around and fell up in bonk her head. And, you know, I ended up having to take her to the hospital, check her out. We're going through, you know, just everything. And, you know, all the doctors were amazing at children's hospital as always. And before I leave, this woman's like, hey, got to tell you something. I love bigger pockets. I love it.

You know, and she's an active real estate investor. She, you know, she's absolutely a thousand percent professional. And, you know, as we were leaving, you know, shared with me how she's doing and what she's doing. And it's great. It's so cool to hear people, you know, following their dreams and taking action and making things happen. So that was, you know, that was the sunny side of a not so great story. But she's my daughter's fine. She's like concussion.

But yeah, anyway, running into the dog. Yeah, thank you. Thank you. But yeah, it's always weird to run into bigger pockets. What we need bigger pockets people everywhere. What we need is T-shirts. We need everybody to have a T-shirt says, like, I'm a bigger pockets member, right? I'm a bigger pocket.

What's the name we give to a? I'm a bigger pocketeer. We need a name. So if you've got clever ideas for a name, let us know. Jump on Twitter, jump on our Facebook, jump on the forums, wherever you do, tag me, tag Brandon. Let us know your ideas. And we've got some great shirt designs.

And I know Mindy is working on some things to get those and make them available for everybody. but yeah, actually, that'd be interesting. It would be. What should we? What are we at 800,000 members now and like? Millions and millions of people. Millions of people visiting the site every month. Like, man, like you guys probably don't even know it, but like you just walked

down the street and like, I don't know, like one out of every 100 people you see is probably a bigger pocket, you know, something like they visit the site recently or they're interested in or listen to the podcast, whatever. Like, you know, we're making an impact. What's interesting, back to the lady last night, what she said to me, she's like, you know, Josh, here's the issue. Like, first of all, I love, love, love bigger pockets. I tell all my friends, I talk real estate. I try to talk real estate all the time and they're like so tired of me talking about it.

They don't care. They're kind of over it. And she needs a place where she could go and be excited. That's why she comes and hangs out at BP. But like, to your point, like, hey, if we had people out there that you can pick out another pocketier or whatever. the hell. That's a terrible name, by the way. It is pretty bad.

Anyway, I don't know. Interesting, interesting idea. It is. Well, all right. Let's get out of you. Well, good show. Thanks, guys. We'll see you again next week.

I'm Josh Dorkin. Son, and he's Brandon Turner. Thank you. 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. The Random Five. Let's jump in real quick here and do our last little song of the show. Segment. Did I say segment? Segment of the show called our...

Random six or five, six, four. All right. These, number one, can you solve a Rubik's Cube? No. Ever tried? Not really. My daughter's really good. My ADD kicks in, too.

All right. My eight-year-olds are really, really close. So I'm excited to see when that happens. What would you do if you won the lottery? $5 million, $10 million, $50 million? I play in real estate more. I expected that answer. Okay. Brandon.

Do you live by any motto or philosophy? I really like the fortune favors the bold. Oh, I like that. That's good. That's good. Do you play in any fantasy sports league? Fantasy football, yeah. Nice.

I enjoy that. But that's the only one. All right. Cool. My last of the random six. When do you feel? most impatient right now when I haven't taken my adderall and my ADD kicks in hardcore all awesome there you go man that's that's the most honest perfect answer you've ever gotten I love it I love

I could have wise no problem no problem um you know look you're financially free so if you could try out any job for a day you know like is there anything you always like oh man That would be so cool to try out. A job? Yeah. Yeah. Yeah. Job.

No. Good answer. All right. You would want to be like a helicopter pilot or a Marine for a day. Anything cool like that? I mean, I guess if that's, yeah, but I guess it would be, it would be fun to fly helicopter. Yes. I mean, it seems very different than having, than what job would be.

A job, yeah. You're right. You know what a job? I would do. You know the guy Andy, I think it's an Andy circus who plays like Ghalem and also like the planet

of the apes guy. Anyway. You're already the living incarnation. Yeah, the thing with the ball. The thing with the balls all over, like do the computer generator. Yeah, for the CGA. Yeah, that would be a cool job for a day.

Like to be that guy. They're like, we want you to act like a monkey. Okay, I got this. Anyway. Okay, yeah. That would be fun. Okay, good. All right.

Well, thank you, Austin. All right, guys. Thanks. All right. Thank you all for listening to the Bigger Pocket 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.

On the host, an executive producer of the show, Dave Meyer, the show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www. www.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. Bigger Pockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising

from a reliance on information presented in this podcast.