BiggerPockets Real Estate Podcast - 241: From Local Flips to Raising Funds and Turnkey Investing Around the Country with Jeff Wallenius

Episode Date: August 24, 2017

Is it possible to go from firefighter to real estate mogul? Just ask Jeff Wallenius, who started with a single flip, financed entirely with hard money. He was able to parlay that early success into a profitable flipping business and has been flipping 10-12 houses a year in the Portland market for the last five years. Now, he’s set his sights even higher, has created a couple of funds, and is buying cash flowing turnkey real estate around the country. In This Episode We Cover: Jeff’s transition from firefighting to real estate investing His first flip What exactly a “cash flow negative” spouse is The numbers on that first deal How he sold it How to price your property Why he went back in 2012 after the crash The indicator of a good partner How he scales his flipping business What he thinks buying out-of-state Tips for “riding along” with someone to learn more How to build an investment fund Why he sees safety and performance as his bull’s eye What turnkey is and how someone can vet one His next goal: acquiring 150 houses in his portfolio And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Forms BiggerPockets Conversations Farmers Only Lessons Learned from 40+ Years as a Real Estate Investor with Jay Hinrichs Books Mentioned in this Show Rich Dad Poor Dad by Robert Kiyosaki Set for Life by Scott Trench Talent is Overrated by Geoffrey Colvin Fire Round Questions Long distance rehab: hire project manager, or pass? Let’s get real about starting out Tweetable Topics: “You don’t want to be the cheapest property in the market.” (Tweet This!) “I’d like to align myself with people that have good morals that are going to do the right thing when it’s hard.” (Tweet This!) “Flipping is great, but when we stop flipping, the money ends.” (Tweet This!) Connect with Jeff Jeff’s BiggerPockets Profile Jeff’s Company Jeff’s Facebook Profile Jeff’s Twitter Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 241. I said, well, what do I got to do and invest with you? He said, well, my minimum is 500,000. I said, I don't see my collar. This is a blue collar. I don't have that kind of money. I didn't grow up in money. So he says, well, why don't you start an investment fund?

You and your firefighter buddies, you guys are all a big group. You guys got nothing but time to talk about making money. So I thought, well, I'm dumb enough to try anything. So let's do this. 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. Is that Brandon? Hey, if this isn't Brandon. You don't look like Brandon. What the hell happened, man? No, you got a replacement today.

It's me. It's Scott Trench. Scott Trench, yes! Co-host of the Bigger Pockets podcast. I love it. And author of Seth for Life, one of the great, great personal finance books out there.

Seriously, that book is awesome, Scott. And I am actually really excited to have you here as my co-host, because we've never done this before. Nope, first time. Yeah, man. Yeah, it's great. It's very, very, very exciting. By the way, your book is really good.

And if anyone wants to learn more about it, go to biggerpockets.com slash set for life. That's biggerpockets.com slash set for life and check it out. It is all about figuring out how to get set for life, obviously. So Scott, what's going on, man? Awesome. How you been? Well, I appreciate the plug. But things are going well.

I'm back to pretty much full strength. I'm going to start rugby season here this. week. Nice. Get some practices in and can run around and do all that kind of fun stuff. So pretty excited about that. It's been great weather. The world, life is going really well right now.

I got just about to finish rehabbing and getting my new quadplex rented out. And could be happier. How about you? That's great. As you know, I just got back from another week of travel. About a month or so ago, I had returned from two and a half weeks of an RV adventure. And we just embarked on another one over the last week. up in the mountains of Colorado and I got to see this this mountain town called Crested Butte,

which is unbelievable. We're all around Gunnison, which is again central Colorado. And we went to this cool national park called Black Canyon of the Gunnison, which is just this amazing canyon in the middle of Colorado. It's epic. It's really cool. And a good opportunity for my kids to become junior rangers yet once again. So that was cool.

And of course, you know, what would an RV trip for Josh be without driving? RV drama. What could also call it crap, right? Yes, yes, yes. Well, I mean, on this one, as we were, we're literally like on our way to our dump station in Denver to cleanse out this, this RV. And by the way, there are three in Denver, quote unquote, in Denver.

Now, what that means is they are way the hell out in the outskirts. You can't even find a dump station in Denver. It makes no sense whatsoever. So we're trying to find this one place. And of course, we're like three minutes away and my youngest gets car sick and vomits all over the RV. We have to park and spend the next 45 minutes cleaning. I mean, I threw books away. I threw my maps away.

Like everything. It was everywhere. It was horrifying. And then, of course, I have to go and dump the nasty stuff, which, you know, if you listen to previous shows, I had an incident with. And unfortunately, the hole that I plugged my hose into this time, there was something wrong with the backflow. And so as I start to empty it, it starts splashing all over the place on my feet. Yeah, it was unpleasant. I don't know if I'm going to keep doing this whole RV thing because I'm a bit of a germaphobe.

And yeah. You'll know, Josh, he is the biggest germaphobe. ever met and we have tons this we have tons of sanitary products all over the office we have mouthwash in the bathroom we have those little toothpick things it's awesome picture Josh covering getting sprayed with the remnants of his RV tank it's not fun it's not fun anyway so that's what I've been up to man but yeah things are good man things are really good speaking of good we have a really good show today really really good show today for decades real estate has been a cornerstone of the world's largest portfolios.

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invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. With that said, you know, we totally forgot today's quick tip. So let's do that. Here's today's quick tip. All right, today's quick tip is BiggerPockets has launched a new messaging system for your inbox on Bigger Pockets. So if you have colleagues on Bigger Pockets, you want to communicate with new investors. We've redesigned that entire system. It's now really easy to use. You can have your unreads.

You have your archive. You can search your inbox much easier than you could before. Go check it out. That's BiggerPockets.com slash conversations. BiggerPockets.com slash conversations. Very good. By the way, Scott, you have been working on an awesome project, and I know I'm just kind of taking over your quick tip here, but you've been working on something really hard with the rest of the operations team here at Bigger Pockets. You guys came up with this awesome thing, and it's kind of an experiment because we're aiming to do this across the country, but our test market is Colorado.

So we've launched landlord forms. What is it, six, seven different forms for landlords in Colorado? Yep, exactly. So these forms will help you kind of manage your business. we thought, hey, not every investor has a great lease or, you know, addendums for pets or special circumstances. So you can get a bundle of these forms right now for $49 at biggerpockets.com slash forms. That is specific to Colorado for now. But if that goes well, we're going to release this to the rest of the country. Check it out. Check it out. Biggerpockets.com slash forms.

Nice work. Scott. All right, man. This is show 241 of the BiggerPockets podcast. You can check out the show notes at biggerpockets.com slash 241. Let's get this thing going. Today's guest is a man named Jeff Wallenius. I love that last name. It just flows off the tongue. Jeff Walenius. By the way, it took like 73 takes to get this show right

because I was having a ton of technical problems. So big props to Jeff are sticking around and not just abandoning us. But Jeff has been in the game. He's a 17-year veteran firefighter who has built this real estate portfolio from nothing with no money down on his first deal, all the way to where he is today, where he's, you know, raising funds. He's flipping dozens of houses. And he has the plan to acquire 150 houses in the next 11 months. This guy has a ton to share some amazing advice on contractors, on all sorts of other. things. So pay attention, whether you're new or experience, this is a great show for you.

Let's bring him in. Jeff Willenius, welcome to the showman for the 15th time. You guys are killing it over there. Oh, my God. So having to be part of this thing today, man. That's great. It's great. We are having some technical difficulties right now, unfortunately, besides the fact that my co-host has ditched me and left me with Scott Trench, you have to put up with all this stuff. I hear the technical difficulties are all from Josh. Oh, whoa. Man, we got ourselves a family future.

This is, I'm Steve Harvey right now. This is crazy. Yeah, baby. Yeah, baby. All right, Jeff. So welcome to the show, man. It's really great to have you here. Again, apologies on all the drama.

So, man, you're doing some really, really cool stuff. I want to hear all about it. Take us back. By the way, before you do that, you're a firefighter, correct? I am. Yeah, I've been a firefighter for coming on 17 years old guy right now. Wow. You sound pretty old. Yeah, luckily I don't look old. So. Nice. Yeah, you look good, man. You look good.

That's just the love of you. Anyway, yeah, I am a firefighter. I've been doing that for 17 years. I grew up as third generation. So my grandpa, he was a firefighter. My dad was a firefighter. So I'm carrying the torch here. Wow. Yeah, fantastic. And you're not just a third generation firefighter, but you're also a third generation. generation real estate investor, correct? And it's almost like you know me. Wow. Yes. So my grandpa, he started, he started in real estate. He was, you know, he started building homes. So he built a house.

They'd live in it. They'd move on and he would keep it as a rental. And so he didn't have a ton, but he had a handful, less than a handful of rental properties into his older years. And that kind of passed on that, you know, that started started the transition of real estate in our family. That started the trend and my dad picked it up from there and he got into some, I got a fiveplex. I remember working on the fiveplex with my dad and paint in there. And my buddy and I would go in there and we would sleep. So it was early in the morning and they'd be like, hey, you got to paint the apartment for us.

So show up here at seven. Of course, I'm not a morning person. So we'd get in there and we'd start painting to show them that we were working and then we'd sleep in the closet under drop cloths and all that. And our only warning that they were coming, it was my grandpa drove a diesel. So when we heard the diesel pulling the driveway, that was our alarm clock. We'd jump up and start paying again. So I grew up in the rental game in real estate, you know, trying to figure all that out.

So that kind of embedded to me. I had no idea I was going to pick it up. I didn't have a passion back then for it. So that's kind of where it started. Wow. My grandpa and my dad. That's awesome. Can you walk us through what that transition was when you, it sounds like you went out,

You started a career as a firefighter, and then you got back into real estate investing. So what prompted that? Yeah, you got it. So in 2003, I got hired with my current department and got through my probationary year. That was a year. And from then, I had two young kids, and I was working 56 hours a week there at the fire department. And I thought, well, got nothing but time on my hands. I'm bored.

Yeah. That's being facetious. I got it. I was waiting for the kid to react, but, you know. Yeah. Well, I missed that one. I'll admit it. I was like, I can see there being some downtime in between five hours like that. So had a young family and thought, well, I'm dumb enough. Let's do something to add more to my busy schedule already.

What was the motivation, though? It wasn't just like I'm bored stiff, right? I mean, there was something there. You know, I always wanted to flip houses. And I wanted to flip house, make some money. I thought there was good money in that. There was good potential. I had a background in construction. So I knew that I had some of the skills to make that. that happened wasn't good at any of them, but I knew I could work my way through it. You could always sleep in a closet, right? Yeah, I mean, I'm top notch at that. Yeah, yeah, basically journeyman at that. So anyhow, I was sit, believe it or not, I was sitting in the firehouse and over a cup of coffee,

I was reading the newspaper. So I transitioned from Garfield into the classified section. And sure enough, here's a house in my area. This is 2005. There's a house in my area for sale. And I don't have any money. I don't know what I'm doing, but hey, that makes sense. It says flip.

It says it's a fixer. So it's got to be a deal. So sure enough, I make a phone call, come to find out it's a wholesaler. So I meet them at the house. And, you know, they walk through the process. And I say, well, I don't have any money. I don't know how to buy this thing. And they say, well, why don't you get a hard money lender?

We have a contact for you. Why don't you, we pass on our contact to you? You call them, see if we can't put this deal together. And I said, yeah, it sounds good to me. So this hard money lender came in and he lent me the purchase. He lent me to rehab. He lent me the money for the payments. I have no idea why.

I mean, I was fairly qualified. I fogged a mirror. Nice. But outside of that, I mean, there was no reason for him to give me money. Yeah. So I bought my first flip. That was 2005. And so I'd spend a day at the fire station and that was 24 hours.

And then I'd spend the next 48 hours off on dog gear and carpet out of these houses. and I'm doing all the work myself. And I got to tell you, I was cheap. I was cheap because I didn't have any money. I didn't know how to make payments. I had to make the most money out of this house that I could. Right. And so I was rattle can in cabinets.

I was one evening, I rattled can the gutters. Oh, spray paint. Nice. Came back the next morning. It had all dripped off from the morning deal. So I was like, well, that was awesome. I'm an idiot. Now, did you fix it?

That's the question. Or did you pull one of those like half-ass lipstick? on a pig flips. Yeah, I would say defined fix. So I'm Ralecanon cabinets and I was so cheap that I didn't even want to buy a respirator or two. So I would hold my breath, spray paint, as long as I could, I almost pass out. I'd run in the other room, take a deep breath of so-called fresh air and then run back in.

And, you know, so I was just trying to save money everywhere. What do you do for living again? Yeah, I know. I don't want to talk about it. We do have masks accessible. Yeah, we do have to wear those masks. How do you mention it? You're so smart, Scott.

I should have known. I should have known. But I was cheap. So anyway, fast forward. We got that house done. We made a good profit on that property. And I thought, wow, walking out of the telecom. They got a great check here.

So it's time to reinvest. And the next day, I went out and we booked a trip to Vegas and to Mexico, bought a bunch of furniture for the house. And the money went away. Wow. But you know what I did is I invested in my wife. That's the best investment of all. So it's almost like I set that up.

But I invested in my family. I invested in my wife. You know, we took the kids to Disneyland. Nice. I bought a bunch of furniture for her. We went down to Mexico, just her and I.

And I think that's really important. I think we get caught up in real estate and investing in it as business people. Yep. And we get so caught up on the dollar. And the dollar doesn't drive me. money doesn't motivate me. What motivates me is experiences, and a lot of those experiences have to do with what money allows me to do with my family.

And so I invested with my wife because she suffered through me being at that house for 48 hours off and then back at the fire station. So I didn't see them for a time. And so that was one of my best, very best investments that ever made. Nice. All right. So a few things. One, Scott has come up with this term.

It's called a cash flow negative spouse. Sounds like you might have found one of those. But that aside. I don't know about that. That seems a little harsh. I find the term. I like that. What is that?

I haven't heard that one. A few years ago, we had an April Fool's prank here on Bigger Pockets. And I released an article promoting a new feature for the website called biggerpockets.com slash love, where real estate investors could go to meet cash flow positive spouses. And this was very positively received. but it was a complete sham. It's like farmers only. That's crazy.

That's exactly what it is. All right, Jeff, awesome, man. So, you know, farmers only, whatever, whatever you decide to do, man, that's all on you. That's all on you. But let's get back to real estate here. And let's get back to that first deal. By the way, I love that you talk about money not driving you that experiences are what matters.

I agree with you. I mean, like when you're old and looking back on your life, it's not the crap you've bought. It's the experiences that you've had with your family and friends and things like that. So that's, it's amazing. And that's the why, right? I mean, for you, your why is that. And, you know, we talk about that so much on the show is what is your why? Figure out why you're doing this.

Why are you getting into this game? If it's just for money, okay, that's fine. You know, for me, that's not going to drive me. That's not going to drive me. So anyway, let's get to this property. So would you buy it for? What did you sell it for? How much did you put into it?

And fill us in on the numbers. Yep. So we bought it for 120. I put it with all that sweat equity and not paying contractors, I put about 20 grand into it. And that was materials. I didn't pay labor. My father-in-law helped me with that.

And I would borrow work from firefighters and say, hey, come over and check this house out. And when they were there, then I'd be like, hey, you're working. Let's do this. You're painting. You're doing sod. Get on it.

Don't give me the lip. I had a friend with you once. Once. Short friends. We make short friends. I did that to a friend once. Yeah. So material-wise, we put about 20,000 into the property, and we sold that thing for 185.

Nice. So walking out, when everything was said and done, paid my hard money lender, paid realtors, and all that, you know, about $25, $30,000. You put nothing into it, right? Except for the materials that you... There's blood, sweat and tears. Yeah. And how long did that flip take? Hmm.

Good question. I told you I was older. I don't remember this stuff. I want to say we're about two months into that thing. That's not bad. I had to work around my schedule. Yeah. That's great.

So you get this first flip under your belt. You make a profit. You have a great time with it. You invest in your family. And then you move on. So what's your next step after that? Yeah. So I thought, well, that was pretty cool.

Let's do this again. So contact those wholesalers again. They sold me in their house, bought in their house. So that was a quick wholesale deal. I just cleaned it up. There's a bunch of trash in there. and went over there and rented a big dumpster, threw it in the dumpster and sold that thing. Made of a smaller profit, but the turnaround was quicker.

And so jumped into number three. Number three was out in more of a rural area. And so we started working on that, started doing the work again myself. And my cousin was in town. And so I bribed him into crawling under the house and duct taping himself to do all the insulation and all that. So he learned to hate me. But we figured that out. So we got finished with that house and we thought, well, we're in the rural area.

Let's go. I mean, what do you do when you're in rural area? You buy a cowboy hat. Oh, you were so close. We're like, let's go to the farm store and we're buying cowboy hats. So we roll in there and we buy cowboy hats and we burn out of there. We're high-fiving each other. We're done with this house.

He's put on the market. Stop at a stoplight and got rear-ended. Blue my cowboy hat into the, onto the dash there. and his actually flew out the window, which was awesome. And little did we know that that was probably the best thing that happened to us because that was in late 2006, early 2007. And so we're going through massage and going the chiropractor and all that stuff and not buying houses.

And sure enough, you know what happened to the economy. So we sat on the sidelines. So you were injured very badly. Not bad. You know, I'm kind of soft. And so, you know, I melt it. But, uh, so you are, you're telling me that you manage to not screw yourself and lose a fortune in real estate because you are so lucky to have gotten rear-ended by some other driver that you couldn't be in the business. See, I'm an eternal optimist.

Wow. I can get rear-ended blow of a cowboy hat off my head. Life's good. Wow, wow, wow. All right. So I tell my friends, I saw the crash coming. Yeah. Yeah, I saw that.

You guys, um, I figured this. Did you, that house in the rural area, did you have any problem selling it or was that thing fine? You know what? We had some problems selling it. And you know why? It's because I priced it at the lowest price property in that little town. And I learned that that's not the way to go. So we raised the price 10 grand, put me up and above some other properties.

And I had an offer the next week. So that was a, are we going to do a quick tip? Because I want to do. You guys are going to do that off. Well, this will be your tip. I mean, because this is this is a great tip. What you're saying, I think, is you don't actually want to be the cheapest property on the market. You don't want to be the cheapest property because people will look at that and they'll say,

hey, there's something wrong with that property. Why is it priced that low? Why is it the cheapest one that we can find in this little town? It kind of goes along. I have a story of my dad real quick when he owned real estate in his fiveplex. He pulled out a washer and dryer out of this apartment. They work fine. They were just old.

Put them on the curb, put a free sign on them. and they sat there for a week and a half. He went and changed that sign to $15. The next day they were gone. Somebody stole them. So when people see value, that's what makes them move on a property. And I think the same holds true for real estate. If you're the cheapest price, you're saying, hey, that thing doesn't work.

There's something wrong with it. And I learned a valuable lesson with that piece of property. That's awesome, man. Really, really, really good advice. All right. So you're rehabbing, you know, you're getting yourself back in shape. You're going through your massages and the market crashes, the market tanks, and you're sitting on the sideline there. When did you jump back in?

Yeah, I jumped back in in about, well, mid-2011 and started getting the bobby again and started saying, hey, let's get back into this game. So I bought a house in my little. Jeff really quick, sorry. Why? Because I have a sickness. No, no, no, no. Well, it wasn't why did you get back in, but why did you get in? but why did you get in then not sooner, not later?

Why did you pick that time? Yeah, you know, looking back, I should have got in sooner. But, you know, when the market's picking up and you're starting to see the indicators, especially here on the West Coast when things are starting to rock and roll, you know, I'm not very smart. And so it takes me a while to realize that, hey, this game's picking back up. It's time to jump on that train again. And so I jumped back on the train. I bought a house in my local market here and started doing all the work myself on that one.

I'd gone through the process of going to auction and studying the auctions. And I met some people down there. And I met a guy in particular and bit against him. He beat me out. And I finally was frustrated. I said, hey, I got a employee side. I got, how do you do this? What am I doing wrong?

How do I jump in this? And from there, that kind of kicked off a relationship and a friendship. And I started riding around with him. And he was a contractor and all his projects. And I said, hey, we have something here. Maybe we should try to do a project together. And so in late 2012, early 2013, we thought, well, let's buy a project, a flip, and we'll jump in. And from there, it went from one project, and we started doing 10 to 12 a year here locally.

And I was the money guy. I would go out and do all the hard money loans and get the funds together, pay all the bills, and he would manage the rehabs. And it went great. We did a good business here. Awesome. So how did you know that this? relationship would work besides the mentorship that he was offering you on the auction side and kind of taking you around, what was it that led you to believe that he would make for a good partner?

I think just riding around with them, seeing his projects, like I said before, I have a background in construction. So I know what projects are supposed to do. I know what they're supposed to be. I know the levels of construction that are supposed to take place. So I felt comfortable with that side of things. And then when he starts telling me what he's getting it for labor-wise and what he's able to manage these things at, I thought, well, that makes sense. You know, we can make money with that because I can go out and work and find deals with his help and his wife's self, who is our realtor. And if you can manage the rehab, you can manage the crews and you can adult babysit, you know, I'm all in on this thing. So that's when we dipped our toe in the water with one. And,

you know, that went so well that we, like said, we jumped into those further and further process. and got to 10 to 12 a year here locally. Awesome. Awesome. So just got this time right, you stepped out in 2007 because you got injured, 2006, 2007, because you got injured. You came out of the game. You got back in 2011.

How many deals did you do before this partnership was formed in between that 2011 period and when you met this guy? Four deals. Yep. Four deals. So you're still being very active as an individual in the meantime here. And then you met this guy and went off the races after the first one. worked out. Correct. Yep. You're absolutely correct. Awesome. Okay. Awesome. Cool. So how do you scale then? You know,

you do this one deal with this guy. You're the money guy. He's the contractor. You know, even before I go there, so many of our listeners, so many bigger pockets folks have this fear, right? It's, hey, how do I know that I could trust this person? You know, I'm thinking about getting into bed with them. I've got money or I've got some other skill set. I could find great deals, but I ultimately need that contractor. As somebody who has those skills and as somebody who has partnered with somebody who, you know, sounds like does a, does a good job or has done a good job or did a good job, we haven't gotten to the rest of the story. What advice do you have for somebody listening right now on how they would go about finding somebody similar? I assume you're talking about a partnership

with a contractor. You're saying, hey, I got money. I want to partner with you. Okay. Okay. You know, a lot of it's about trust. Obviously, in today's age, you have to do your background. I mean, you have to kind of have a history of what they've been doing. What's their morals, you know? And I really go off what people tell me. And, but for me, it was body of work. I saw his projects. I was able to write along with him and see, you know, a handful of deals that they had gone. I was able to look at the numbers and say, yeah, those make sense. I was able to see him manage crews and how he interacted with people. I think that's key.

When you can see how people interact with one another, that's a really good indicator on who somebody is. And for me, I like to align myself with people that have good morals that are going to do the right thing when it's hard. Because it's easy to do it when it's easy, right? I mean, when everything is going right, it's easy to do the right thing. So I like to say, hey, what do you do in the worst case scenario? What does that look like for you? and I like to hear what they have to say about that. And that's really a good indicator for me anyway on how I want to partner with people.

All right. So I find a contractor that somebody told me is good, right? How do I then get that guy to show me around his sites? How do I then get that guy to give me the opportunity to see how he interacts with Cruz? You know, as a new investor, how do I go about doing all that? You know, because contractors tend to be kind of gruff, right? I mean, not to generalize, but it's like, you know, how do they get in there? No, I think that's a great question.

That's a fair question. And I'm going to ping off my fire service background here. This is what we call a ride-along. So in the fire department, when there's new firefighters coming up or individuals that want to be part of the fire service, they come and they do a ride-along. And they hang out with this for the day. They see what we do. They see our daily routine.

And I took that into real estate. And so I would approach contractors. I'd approach this guy at the auction and say, hey, can I ride along with you? And as we get further into my story, I'm going to tell you about another ride along that I did that really catapulted my business. But for me, it's the ride along. And you say, hey, can I come hang out for the day? I want to see your projects. I want to see what you do on a daily basis.

And if they are not willing to do that and you move on, you go to somebody else. Because there's plenty of guys out there or gals that will do that for you that will show you complete transparency of their business and how they operate. and how they interact with people. And I think that's very important. I love it. I've experienced a similar thing in my real estate investing here is just if you take an interest in what someone else does for a living, they are often, not always, glad to show it off and give you as much detail as possibly.

A lot of folks on bigger pockets. They chive in on bigger pockets all day long because they like talking about this stuff. They don't have another person to talk about it with in their local, in their circle of family and friends. So you're absolutely correct. And you can tell when people are passionate about what they do. I mean, Josh, I don't know. Do you have kids?

I have three. Yeah. So when we talk about our kids, I have three as well. You know, we light up, right? If we talk about something that we're not very passionate about, hey, let's talk about ditch digging. You won't see any energy from me on that. But if you ask me about my family, you asked me about my kids, I light up. Same thing with your passions, right?

So if you go to a contractor and you say, hey, tell me. about what you're doing. What kind of business do you run? And they, if they light up and they talk passionately about construction and they're excited to go to the jobs and they're excited to work for you and work with you as a partnership, that's somebody you want to hit your wagon to. Yeah. This is awesome. I love that. I love it. I love it. All right. So, so you got this, you got this partner. You guys are crushing it 10 to 12 a year. Now, are you only flipping houses? do you guys start to expand into other property types? And obviously, you know, flipping kind of becomes a bit of a job.

So, you know, A, how do you scale? And B, are you looking at other strategies starting to build a portfolio? To tell us a little bit about that. Yeah. So, you know, we're plodging right along. We're doing some great stuff. All single family. So we're wholesaling some deals.

And the majority of them were rehabbing and seeing those through the whole entire project. So in probably 2000, late 2014, 2015, I start thinking, you know, flipping is great, but when you stop flipping, the money ends. So I want to create generational wealth for my family. And so I need to build a rental portfolio. And I built a couple rentals that we had to flip and bought my partner out and did that. And those are great. You know, that's the typical burger strategy. But I wanted that long-term wealth.

And so I started looking West Coast. and it's very difficult to make any property cash flow here locally. Yep. It's just, the price is just so high. It's stupid. And where are you, by the way?

I don't think we mentioned that. Yeah, I'm just south of Portland. Awesome. Portland, Oregon. Yeah. Sunny Portland for two months out of year. Yeah.

I don't want to talk about it. You know, make me cry. So I started looking elsewhere, and lo and behold, let's do some homework. Where can I invest that makes sense? And what do I happen upon?

Bigger pockets. You know, doing some homework. Bigger pockets pops up. And so I started. doing some homework on that. And I learn about turnkey investing. And this is a new term to me. So I started doing some research on that. And if I can rewind a little bit, our, my realtor that had been kind of finding these deals for us, he said, hey, I'm, I'm buying houses in Philadelphia. And I said, you're an idiot. That doesn't make any sense whatsoever. You're not out there.

Right. You don't know who you're dealing with. You're an uncle head. I can't wait to see you lose your money. Well, you're nice guy. I don't wish, I don't wish any harm upon anybody. That came out bad. Yeah. I'm scared, man. I mean, hopefully they never hear this. Says the firefighter.

Uh, yeah. Anyway. Moving on from that. So he tells me about this. And like I said, I'm like, I'm not buying that. And I started doing more and more homework and I'm learning more about investing. And I come back to him and I say, tell me more. Let's sit down for coffee.

I want to hear about these deals. What are you buying them for? what do they rent out at? What's your extra strategy? What are we looking at here? So he gives me this long diatribe on all his properties and I'm thinking, man, that those numbers make sense. You can't touch those out here on the West Coast. So let's do some research. So I jump in, like said, Bigger Pockets and start doing research on Turnkey and Philadelphia and Midwest markets. And who do I come across that's in my local market, Jay Heinrich's. And so I look up Jay on Bigger Pockets. and say, hey, can I take you to lunch?

And we go out to lunch. And from the start, Jay is one of those guys that if anybody's listened to his podcast, he has done everything. And so that's one of those guys that I want to hitch my wagon to and learn from. And so. And for everyone interested in listening to that podcast, that's Bigger Pockets podcast number 222. Nice. Bigger pockets.com slash show 222.

Great plug. Great plug. So I say, hey, Jay, this is great. I've enjoyed my lunch. Can I come right? Here we go again, right along with you. And he says, you're a knucklehead. I don't even know what that means.

I say, I'll make you coffee. I'll sweep your floors, wipe your desk clean. And he says, all right, you're kind of weird, but he was gracious enough to let me come right along with him. So I would go and we wouldn't do anything special. We'd go to the title company. We'd go to the bank. we would go out and see some of his developments that he's got working here locally.

And the whole time I'm just paying questions off. And I'm learning from Jay. And he's saying, hey, this is what I'm doing. Here's kind of what I've got set up. Why don't you come invest with me and see what that looks like? And I said, well, what do I got to do and invest with you? I said, well, my minimum is 500,000. I said, I don't see my collar is a blue collar.

I don't have that kind of money. I didn't grow up in money. So he says, well, don't, I, Why don't you start an investment fund? You and your firefighter buddies, you guys are all a big group. You guys got nothing but time to talk about making money. So I thought, well, I'm dumb enough to try anything. So let's do this.

So I set out to build an investment fund. Wow. I started talking to family and friends and coworkers. And sure enough, we put some money together. Went through all the SEC lawyers and set it up correctly and take a bunch of money out of my pocket. And we set up an investment fund. Wow. So what does that mean?

I mean, for most people listening who don't know anything about this stuff, I think a lot of people have the assumption that I can go, you know, say, hey, you know, six buddies, friends and family and associates, let's all pull our money and start buying real estate. You can't just do that without going to an attorney, can you? Yeah, you walk a very thin line there with SEC regulations. and, you know, I got a lot going for me. I got a lot to lose. I got a great family.

I don't want to go to jail. Yeah. So I want to make sure it was set up correctly from the start. And so we jump through all the SEC lawyers, make sure that we were setting this thing up. This is because you're creating a fund. I mean, if it was like you and your brother. Yeah. I mean, if you're grabbing your buddy and saying, hey, let's buy real estate, you know, no problem there.

Yeah. But when you're bringing in other people's money and you're creating a fund to invest in real estate, yeah, there's absolutely 100% avenues that you have to. go through to make sure that that's set up properly. So we ran down all those. Yep, absolutely. Yeah. And what, for somebody who's curious about that, what, what does that cost?

I mean, like, what does it cost just to get the paperwork together so that you can go and start saying, hey, friend, you know, do you want to get in on this fund? I mean, is that 10, 20, 30 grand? What does that cost? Yeah. Yeah, if you're starting out very basic, very basic setups, how do you or mark 20 grand? Wow. just to get the thing kicked off.

And, you know, every time you talk on the phone, they dried that out. And, well, let me research that. And you're like, man, this is a basic question I'm asking you. But so, yeah, 20 grand. Start at 20 grand. Go from there. Yeah. So you raised $500,000.

Did you raise more than that? Did you overachieving that limit? Or what did you, how much did you raise? And then what did you do with it right after that? Yeah, we raised a little bit more than just less than a million dollars. Wow. And I started jumping off with Jay and that. We started funding projects all across the nation, about nine different markets.

When you say funding, are these hard money loans that you're giving out? Are these fix and flips you're buying? And then what kind of projects? Yeah. So we actually fund a lot of turnkey operations. And so we take title of the asset. So we fund them outright. We're not giving loans out.

And the catalyst of that is we want to work with those. type of operators that are doing high volume. You know, I wasn't interested at all with funding partners, even like myself, that do 10 to 12 flips a year. That's just not high volume enough. There's just too many things that could go wrong there. So we want those individuals that have long sustaining track records that have done, you know, hundreds, if not thousands of projects.

And luckily with Jay's contacts, we were able to jump into that type of arena. Wow. Well, go ahead. So when you say you want these longstanding operations, these are folks that have completed so many projects that they have an established track record versus the guy who's just done a couple dozen so far and has got that management business. Can you talk a little bit more about why that's so important to helping you make sure you have a sustainable turnkey property? Yeah, absolutely. That's a great question. So you could go out and you could fund the guy that's done, hey, I've done, you know, like myself, I've done over 30 projects here locally.

but and I could fund that guy. But for my investors and guys that and gals at work that invest with me, I have to sit across a coffee table and have a fiduciary responsibility to them. I need to manage their money and I need to put it in the safest place as possible. And so for me, the safest avenue is to find those individuals, operators on the ground that have long proven track workers that have been in business for many, many years. They've went through the highs and lows. they've seen all the surprises that you can see in real estate so that we mitigate that risk for my

investors because I got to have a cup of coffee across the table from these guys at work and I don't want anybody throat punching me. That's not what I'm trying to do. So that's key for me. Wow. Is that fiduciary responsibility. Yeah, that's great. Awesome.

So you, again, for the folks who don't fully understand it, you've gone, you've assembled, you know, a few thousand here. you know, 50,000 there, whatever your minimums are, you've kind of pulled all this cash together. And through the lawyers, you're now managing this as it is your business to take care of this cash for these people, right? Correct. There is a format and a formula by which they get paid. All that is set up way ahead of time, correct? Yes, absolutely.

Good. All right. And so now this is your fund and now you're running this fund. Can anyone just go and do this? I mean, like, I know you need the 20K or so to talk to the lawyer, but I mean, is there any more to it than that? There is. I mean, it depends on how you set your fund up. So there's different regulations that you can fall under, whether you're going to go after unaccredited investors, which is really my passion was to sit around that coffee table and people are saying, hey, I got, I got money that's not really doing me.

I haven't sitting in the bank. And these are fellow coworkers for me. So I had a passion to find them at better return than they were making 4% on their money. And that's really where the fund developed was saying, hey, I can do better in real estate for you. Let me build out that fund. The problem with that is when you start walking down the SEC regulations and you start jumping through those hoops, you really kind of, your hands are tied on a lot of it with unaccredited investors. And an accredited investor for everyone listening is someone that has a net worth of less than $1 million,

dollars executing their primary residence or earns less than two or three hundred thousand dollars depending on whether they're single or married so these are high net worth high income earning folks that are accredited investors and it sounds like probably co-workers were not are not accredited investors for the most part at the fire station so very true yeah thanks god i appreciate that so that's nailed it man geez first time you got to give him a promotion this guy's crushing it so that's really where we ran up against some problems there is, you know, hey, I'm limited to who I can bring into this fund. And so that was a little bit frustrating, but of course, I'm not going to jail for these guys. And so, you know, we play within those realms. And, you know, it is what it is

at that point. Okay. So that was, that was a couple years ago. Presumably that fund has been doing well. You're going to tell us about that and then walk us through kind of what you've been doing since then? Yeah, funds going great. It'd be awesome. That'd be awkward if I was like, yeah, the fund just absolutely collapsed and everybody lost their money, but this is a great interview we're doing here. No, we've been, we've been doing well with the investment fund. And from there, it's, hey, let's fly out to these areas. Let me meet these operators that are these contacts and let's start building those relationships. And so that's what we started doing. and I started flying out and meeting these operators and trying to move into different markets across the nation and building out my own thing.

You know, I don't want to just piggyback off of what Jay gave me. I want to provide value to the team as well. And so that's kind of where we went. And from there, it was apparent that we're funding a lot of these turnkey operators. And turn, you know, turnkey is great across the nation, but there's still shady operators out there. And so as you learn that and as you work with good, solid companies, you learn the pitfalls of Ternkey. And from there, that kind of transition into, I stole this out of the fire service. So, you know, I'm going to give props to Jeff Johnson and our previous chief in our fire department.

So what we had was the chief bullseye. And in the center of the bullseye was safety and performance, right? So now the second ring out from that was customer service. And from there, the final ring in this bullseye was professionalism. And I was like, that's perfect. I mean, that's perfect for real estate investing, right? So safety and performance, and that's our bullseye. If we can find investors and if we can provide them safe assets to invest in,

where we mitigate as much risk as possible, it's real estate. There's always risk. But we can mitigate as much risk as possible. possible, that's good investment. And if we can have performance in that inner ring as well, and we can perform at the top quality and provide the best service to them and their assets perform, hey, that's what we're looking for. The outer ring from that is customer service, right? Going above and beyond. And that's really what we pride ourselves with our fire district is that we try to go above and beyond. Somebody falls off their roof when they're blowing leaves out of their gutter.

We go up and we finish the job. We finish mowing the lawn. Oh, wow. You know, we do. those things above and beyond. And I really wanted to take that into the investment world and say, hey, let's go above and beyond. Let's wow people with what we can do for them. Hey, let's provide a great return, but also give them complete transparency into how to make money in real estate. And even if we don't make a dime on them, they're not going to lose money because they

went out and worked with a shady operator. I want to make sure that that happens every time. And from there, the outer ring is professionalism. You know, let's make sure that we're professional. that's hard for me because I like to have a good good time. So I separate that dynamic. It's a very professional interview, by the way. Feels very professional.

Yes. If I talk to a lower tone, does that make me more professional? So I don't even know where we're going. Don't worry about it. I've got a question. I'm going to just cut you off because I love the bulls. I think the whole thing is awesome. It's great.

here's my question. You said, you know, it's great for people to avoid there's pitfalls of turnkey. If I'm looking at turnkey, and by the way, for those people who don't know, what is turnkey, turnkey is just buying these properties that have already been rehabbed with tenants in place and management in place. Typically, I think different people have kind of different definitions. But what are the pitfalls of turnkey? And how does somebody, typically for a passive,

investor that those tend to be the folks who are looking for them mostly. But how does somebody vet a turnkey operator? How do you make sure that they're doing safety and performance, good customer service and professionalism? And look at you. Chief Bullseye. So proud of Chief. So here's how you vet a turnkey. You got to, they have to have a long sustaining track record. I mean, you have to know, hey, what's, tell me about your projects. Look them up online. what's your success rate. The other big thing, and there's more to it, but I'm going to go briefly over this stuff. You need to have a turnkey operator that has property management vertically integrated.

If they don't own property management, it needs to be so very closely vertically integrated that it's not even funny. And that's a big sticking point because they can do shoddy rehabs. They can place the, you know, the first tenant in there that follows a mirror, bad tenants. And then they sell the property and they turf it off to a third party property. manager and their hands are washed. They're done. And so you really want to keep that accountability with that turnkey operator that they are answering for any shoddy repairs, that they're answering for any tenants that don't make sense or are bad tenants. And so that's really one of the big pitfalls. And the, you know, the other big one is make sure you're not

investing in war zones. You're not buying those properties that are $20,000 turnkey. You have to do the math bath on the, yeah, you got to do the math. I said bath. You had to do the math backwards on those properties and realize that if they're selling it to you for 20, you know, they're making a profit. Yep. So how much rehab did they do? Yep.

And what do they buy it for? I mean, if they bought it for five grand, you can imagine the tenant class that we're getting in that property. And you can imagine the area that it's in. So a lot of people, you know, especially on the West Coast, it's easy to do. We look online and we say, holy smokes, you can buy a house for $30,000. Turnkey, rent ready. Well, that's not a sustainable market for an out-of-state investor. If you're local and you can manage it day-to-day, maybe.

But for an out-of-state investor, not an appropriate investment. Yeah. So I got a question for you. Why don't you just find the best operator and invest solely with that person, in your opinion? Or it sounds like you spread out in a couple of different markets. Is that assumption correct? You're talking about me personally or an investor? You're fun, yeah.

Yeah, you want to diversify, right? So, I mean, we had a very good example of that. We had a property that we worked on in Florida there with one of our operators. And Hurricane, I think it was Matthew came through there. Did a little bit of damage. Luckily, we were lucky. And luckily, we were lucky. That's like a double positive.

And we didn't suffer a ton of damage on that thing. But it was a great reminder to diversify our stock, right? So if we have houses in Florida that get wiped out by a hurricane, obviously insurance takes place. but we have other properties across the nation that are carrying that portfolio. And so each market is a little bit different. Oklahoma City is oil and gas driven. So what happens if oil and gas goes down? Well, we have other markets that carry our portfolio and make sure we get our money back to our investors.

That's absolutely paramount. Yeah, and I think even then, even when you have this diversification and you're doing this research and, like you said, like natural disaster can come along or anything like that, there was a reputable turnkey company that went bankrupt, I think, last year. And they had been a business for decades. I won't name names there. But, you know, this is still something we have to do research on. And there's still inherent risk even when you do exactly what you're talking about, right?

No, you're absolutely right. Yeah. And the key with that is you can diversify all day long. You know, I can invest in, you know, 100 markets across the nation. The strength is in my team. The strength is in who I'm working with. I mean, that's really what it lies upon because Midwest markets, you can, they're almost interchangeable.

But if I have a very strong operator and a guy that has strong morals that we talked about earlier in this interview, then and does the right thing. And if I've seen him at his worst and he still holds his set up pie and does the right thing, well, that's somebody I want to do business with. And that's a very, very key right there. So yeah, you can go out in every market and invest in there. But the key is if I'd rather have the greatest team player in the world in a so so market, mediocre market, than a average operator in the best market.

Awesome. I'm going to say to that, bull's eye. Wow. Wow. Wow. Being punny today. Very, very punny. All right, Jeff, before we move on to the fire round, again, just walk me through.

You got this fun. What have you been doing beyond, above and beyond the turnkey stuff? And where's your business going towards the future? You know, you said you originally were in this to be able to have those experiences with your family. I mean, are you doing this? Do you want to build some massive empire at this point? Has your Y changed? Where is it and where are you going?

Yeah. So where we're at right now, the fund was great. It started to form those relationships. And I saw an avenue for us to create North Peak investments, which is my company. And we saw that avenue to help investors. I mean, let's, let's be real there. Let's help investors, let's provide transparency on these turnkeys. Let's create another fund.

So that's where I met my business partner, Grant. He had a lot of background in median marketing. That was his strength. That's not a strength of mind. So we made a great team on that, and we started building out our company. From there, we've opened up North Peak Property Group, which is a real estate brokerage locally. I thought, well, if I'm going to sell turnkey, I better get my real estate license and do this all in the up and up. I don't want to pay anybody fees, so I'm not going to hang my license anywhere, so I'm going to open my own company.

Grant hates me for this because I'm the big thinker, and, you know, he is too, but I come in and say, hey, we're opening a real estate brokerage. Now, figure out how to make it happen. And he just, well, he doesn't have any here, as you saw. Yes. So he pulls other hair out from somewhere. Yeah, that's the side of it. Wow. I don't want to talk about that for his legs.

Yeah. Keep it on the up and up here, fellas. So we have a local real estate brokerage that we have a principal broker that's absolutely crushing it for us. This is very uncomfortable. I told you guys I spent 48 hours at a fire station came right here. So we've got to come out of that mode of living with the guys for two straight days here. And that's where we're out. We're bringing in investors.

We got a great thing going. I'm building out my personal rental portfolio now. I've got a goal to have 150 houses by June 1st. next year and we're rocking and rolling. Awesome. Wow. It's awesome. By June 1st. And what are you at now? We're closing our first 10. We're just kicking off. Closing our first 10 here this month. So you are planning on bringing in 150 houses into your portfolio in the next 11 months. You got it. Wow. So nervous when you said that. Yeah, that's, I mean, that's, you know, that's pretty serious, man, especially, you know, given that that's a huge leap at this point, isn't it?

It is. It is. But again, I'm going to go back on partnerships. I have a fantastic partner. And, you know, boots on the ground. Cool. It does unbelievable business. And so I'm very, very blessed to be a partner with him.

And, you know, without that, obviously that number is absurd. So without him, not even close to being possible. you've been laying this framework, this groundwork for years, literally years, and working hard by meeting great people, finding low high integrity around the country. So you have great resources behind you and a great reputation sounds like. So I'm sure you'll be able to do it. Sounds like it. I got it's a process. You know, this has all been a process. If you would ask me 10 years ago, if I'd be right here, I would have said no way. But, you know, you dream big and you you put those goals out there and you know here we are i love it i love it jeff so reach out in

june of next year and let us know where you're at you got it maybe i'll do a follow up we'll see how it goes all right man well thank you so much for sharing i think it is time for the world famous fire round it's time for the fire round for decades real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features $4,700 single-family rental homes spread across the booming sunbelt. They also have

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are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive 50 to 75% of their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade, and if you want to learn more, visit BiggerPockets.com slash retirement. All right, rental property investors, listen up. Our friends at Dominion Financial already have some of the best DSCR rates in the industry.

Now, they're the fastest, too. They just launched 10-day DSCR closing. That's right, 10 days. And they're still the only lender with a DSCR price beat guarantee. That means faster closing. The best terms, zero guesswork. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. Scott, why don't you kick this fire round off? All right. Well, this first one, I've actually interested is I thought at first was going to be a gimmie, but I'm actually interested to hear what you think. So our remote rehabs consider too hard or difficult or risky to undertake, even for season pros like you, the poster of this question was not, or can they be reasonably mitigated by hiring a good, trustworthy project manager?

And I'll piggyback on that and ask, are you doing these rehabs yourself for the most part? Are they almost all turnkey, ready-to-go properties? No idea. Next question. All right. Next question. Why did we bring this guy on the podcast? Remote rehabs. Man, that is a slippery slope. That's a tough one. I would say if you're a new investor and you're jumping in and say, hey, I'm going to do rehab, but it makes sense out of state and I'm remotely figuring on people, no way. There's no way I'm doing that. If you don't know construction and you're not able to check in on the project, see how things are going, see where your money's going to pay contractors and making sure progress is being done, man, that's tough. That's real tough. So I would say if you're a new investor, go away from that. unless you can fly out there every week and see progress and make sure things are getting done properly. And you got to make sure you know what properly means because there's a lot of investors out there that, you know, there's shoddy work that gets done.

And they're like, yeah, that looks great. You know, you paying the light fixture is fantastic. But that's not appropriate work. So, yeah, don't do it. Run. Yeah, I agree. I agree. All right.

Next question. I'm excited to get into real estate. but do, okay, excited to get into real estate, but do we pay off current debt first, credit card, vehicle, student loan, or do we keep paying our bills and save the extra money we have for a down payment and pay off debt with our generated passive income?

The Dave Ramsey's in my left ear here. You know, for me, I'm a risk taker, so I take equity out of my house to invest because otherwise it's doing me no good. But with that said, I don't carry credit card debt. My cars are paid off. So I would say if you can pay down those credit cards, you know, small loan payments. If you have student debt, get rid of that.

If you have car payments, let's pay those things off. Because really what you're investing for at that point is financial freedom, right? So we can't get to financial freedom if you're carrying a bunch of debt. So get rid of the debt. And from there, let's start investing. Cool. I actually saw this post in the forums the other day and responded to it. So I love that.

So, but I think I, what I kind of think is I think there's like three different types of debt, like high interest debt. You got to get rid of your home mortgage, maybe not. And that stuff in the middle where you got to kind of figure it out. Yeah, I'm not a big fan of paying off your house. I don't think that makes any sense. I mean, my loan payments 3.75. So that's really what I'm investing.

That's my return. Not interested in that. But I think if you're getting rid of small debt, absolutely. Yeah. What'd you say, Scott? How'd you answer? Well, I just have those three types of debt, and I think you don't pay off your mortgage or the low-interest debt.

You pay off the high-interest stuff before you do anything else. And then that stuff in the middle, you've got to make a tough decision, and that's just hard luck. And that's the stuff in the six to eight, five to nine percent range carrying interest. And I think that it's, you know, on the lower end, I might err towards, let's go invest it. On the higher end, I might pay it off first.

I think reasonable people can disagree on that. though. A smart guy. Are you guys, you guys done? Do you guys enjoying, enjoying yourselves? How's that coffee?

And we're back. We're live. Yeah. All right. Good. Scott. Next question. All right.

There are so many positive stories about people starting their investment careers on here and online that aren't painting a completely accurate picture. I think it'd be much more helpful to share how folks honestly and actually got to a point where they could make that first decision. Did your parents help? Was college free?

Did you work three jobs and saved for two years? where your job earnings large to start with, how'd you actually get there to get going? I think we just heard the story. Yeah, this seems awkward. It's a little awkward. You want me to go back? We can rent, I mean, we're at 54 minutes now.

I can rewind it. I mean, we, we know how you got your first property going, but how did you get the second? Maybe let's go to that. Nobody helped me. The hard money lender, he gave me everything. I don't know why. That's right.

But the funny part is that I worked with him for three projects. And fast forward, 10 years later, I contacted them to say, hey, thanks for giving me a vote of confidence to give me started. You had no business loaned me money back there and loaned me everything. Payments, rehab, purchase. You had no business doing that. So I really appreciate that. Guess what? He's investing with us across the nation now.

So that's awesome. You know, all those relationships that you build. And I built that relationship because I delivered my pay, my check to him, which was on his money. that I was bringing back to him in person. I'd bring it back to his office. It was a long drive for me, but I had that interaction face-to-face with him every month. So that's key. Yeah.

Scott Trench, everybody. Congratulations. Good question. Good question. By the way, I believe that was Brandon Turner trolling Scott Trench. But well, well played, well played. Is this the rookie? What do we do here?

Let's have another one. No, no, no. Last question. I have $40,000 to invest. Scott, where would you put it for the best return? 40 grand to invest, best return. Real estate. You are amazing.

That ladies and gentlemen, Jeff Walenius. And I think I got to know more. I got to know more about the background, about the history of what this thing looks like. Where they're living, are they an expensive market where they, can go out and find a rental that makes sense for them and is going to appreciate, you know, tax, tax wise, where are they at financially? I think there's a lot to that question. I can't just jump into that.

All right, guys, that was the fire round. I think it's time for the famous for. All right. Famous for Scott, take it away, man. What is your favorite real estate related book? Oh, man, I didn't know this question was coming. Oh, shocker. What to think about this?

You know what? I wanted to have just an awesome answer here. I wanted to have like, you know, cat in the hat was unbelievable for me real estate-wise, but the monopoly game instructions. But, you know, I'm going to be so generic here. This is sad. Kiyosaki. Rich dad.

You know, it was just a game changer mentally for me when I was reading that and trying to change my mindset. Ah, dang it. That's all good, man. You don't have to be original. and everything that you do. You're your own unique persona and, you know, your book choices

don't have to be your own. So it's okay. I'm here to support you. Yeah, yeah, yeah. Yeah, I'm a good guy. It's not true what they say about me. So favorite business book. Here we go.

Talent is overrated. This is true. I have not, but this is true. Talent is overrated is my business go-to. You know, it really focuses on that 10,000 hour marked to become a real true craftsman at your job. So you can take that in anything, whether it's music, sports, real estate, business.

I love it. The book's fantastic. There's a lot of key points in there to learn from and puts it all in perspective that these guys that are successful, name the business or name the score or name the music. They didn't just have innate talent that they just all of a sudden were fantastic. It takes a prime commitment to that study and that field and tons of practice. So real estate's no different. This is true for me too.

I have no talent at anything. I just kind of get by on my quick wit and good looks. Well, I mean, we share that then. I mean, we're blood. Yeah, we are, man. Totally. Totally. Yeah, brother man, brother man.

All right. Next question. Hobbies. Jeff, you spend your days. pulling little old ladies out of burning houses, rescuing cats from trees. You spend the rest of your days, flipping houses,

building portfolios, managing people's money. I mean, like, do you even have time to do anything fun? You have kids, right? Besides Disneyland and furniture.

Yes. Cats from trees. You ever seen a dead cat in the tree? Oh, no. The old, no, that's why we was telling us. You ever seen a dead cat?

A tree. You're not getting the cat out. I'd call my face. off. Get out of here. Anyhow. Poppins. We got a boat. We go boating. Love to travel. Like I said before, I love experiences. I love new experiences. So family, we love going places with their bed, exploring, showing the kids different areas of the country and teaching them not just out of the history, but actually showing them history. And, you know, that's, for me, it's family. Have a beautiful wife and three unbelievable children. I love it. I love it. Scott and I were talking about our trip

before the show, we just got back from an RV adventure again. So with the three kids. So yeah, I get it, man. Totally get it. There's an RV clock. Yeah. All right. Josh hasn't had the highest success rate with his RV trips.

They're successful. There's just, you know, there's things happen. Anyone who has one knows this. This is this is. I went through that this summer. I had just a comedy of errors on my first camping trip this year. Yep. We got time for that, though.

No, we ain't got time for that. Scott, next question. What sets apart successful investors from those who give up, fail, or never get started? Communication, without a doubt. Communication. And for me, it's being able to not only talk, so to be able to communicate to everybody, right? So walking in, and I think this is huge in today's society that I look at my kids and they're on Snapchat and Twitter and Instagram. That's how they communicate.

That's not how I grew up. I grew up. You're riding your bike over your buddy's house and you're talking face to face. I think, especially in today's age, that we've lost that communication. I was in Safeway the other day. And I look in front of me and I look behind me and everybody's on their phone. Nobody's talking. And not that I wanted to talk with them, but we've lost that.

And, you know, the big part of communication is listening. And I took a psychology class a lot of years ago. and they said listening was, you know, like X amount of communication. I don't know. I wasn't listening. Did you stay at a Holiday Inn Express? Are you like a listener expert now? Yeah.

I did sleep at all at Ann Express. So listening is huge. So to make this long story short, to be able to listen, identify a problem, and to be able to solve that problem. That is what sets people apart. I love it. I love it. All right, Jeff, before we let you go, man, where can people find out more

about you I you know I feel like you might have wanted to plug earlier and and so you know why don't you plug down how's the time this is it man you can find me northpeakinvestcom email me I'm on on Instagram I'm on Twitter I'm on Facebook I'm on all those things and then I've I've come across this unbelievable space for interacting with people across the nation it's called my MySpace. Yes. You guys on that? Oh, man.

It's crazy. Yeah, I pimped my profile. Yeah, I might want to go back and delete that profile that probably still exists. Yeah, yeah, I'm friends with Tom still. Anyway, yeah, there's, that's how you find me. And I'm happy to feel phone calls. I want to make sure that everybody's successful. But nobody gets taken advantage of in real estate.

So my phone's going to be ringing off the head, but we'll make it happen. Yeah. And we can also find you on bigger pockets, of course. So we will link to all those places. Jeff, thank you so much for coming on the show. Lots of luck going forward. Please go get some sleep. And good having you on the show, man.

Hey. Thanks for all you guys do. Thanks for putting this together. And above all, thanks for having me on the show. Really appreciate it. All good. Thanks for time. All right, guys, that was Jeff Walenius.

A big thanks to Jeff. that was a great show. I love the whole thing about the ride-alongs with the contractors on on how to find them. I thought that was fantastic. Yeah, I thought it was fantastic that he had his set of criteria that he built his business on too, which was that bullseye, safety and performance, customer service and professionalism. I really liked what he's built there. He's clearly worked hard and built something very awesome. Yeah, yeah, it's great. Cool show. Lots of good tips. So, Scott, we're going to get you doing some bagpipes? Maybe one day, but I will not be wearing that kilt.

You can't hang, man. You're not comfortable enough. Yeah, I don't know. I don't know what happens under that kilt. So that's the other part of it. No, nobody ever wants to know what's under the kilt, man. And if you do, wear something underneath, please. Yeah, no, so thanks.

Yeah. Awesome. Awesome. Dude, listen, great show. And I'm so psyched that things are going well on this fourplex for you. I know it's your third property. I think it's amazing. It's exciting to see the fruits of,

your work man this house hacking and all these strategies and everything that that you've kind of put into set for life come to see it to fruition the reality of it you know the frugality everything that you do is is paying off and it's it's amazing so nice work and great show man thanks for taking over from the big guy awesome i appreciate it was awesome to be a co-host yeah yeah all right guys this was show 241 of the bigger pockets podcast you can check out the show notes at biggerpockets com slash show 241. I'm your host, Josh Dorkin. 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 height, 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's time. It's time. The Random 5. All right, guys, this is a new segment, not that new anymore, that we do.

It is called The Random 6. We ask you six random questions, and we'd love to learn a little bit more about you. So the first question is, what would you do if you won the lottery? I'd invest in real estate. Retire from the fire department and live on a beach. Wow. You'd retire from the fire department? Yes, I would.

No kidding. I've been doing for 17 years. I'm ready for a new adventure. You put in your time. I get it. I get it. All right. Scott, next question.

What's the title of your future memoir? Wow. Future memoir. I don't even know what that means. I'm not that smart. I don't know what that means. That's a great title. Yeah, should we leave it at that?

I think that's amazing. That's the greatest title ever conceptualized for a book. I would buy that book. I would buy that book from the story. savant who came out. I'll give you a title. It's Polza. I can't steal it. Yeah. I really like the title.

Just have so many inappropriate things run through my head. I can't keep this PG. Let's go family first. All right. I love it. Listen, that is one of our core values here, bigger pockets, family above all else. So I love it. All right.

Next question. If you could master any instrument on earth, what would it be? Bagpipes. Nice. Nice. I dig it. Would you rock the kilt to go with it or just, you know? It's not a big kilt guy, but I'll dominate some bagpipe.

There you go. That's just a haunting air there. Just give off a shrill. Yes, indeed. Have you ever won an award and what was it for? Awards. I've won sports awards. back in the day.

No, no words. Nope. What sports awards? Oh, you know growing up, everybody gets a trophy. No, that's today. Not when you were growing up. Oh, that's today. Not when I was grown.

That's right. Maybe I did actually, I actually earned those awards, I guess. Yeah, man. Patch yourself on the back for that, you know, figure skating. I was dominating. Figure skating, gymnastics. What else were you going to? Oh, yeah, all that stuff.

Yeah. Nice, nice. I'm a natural talent. Yes. They say talents overrated. Yeah. Next question. Are there any household chores that you secretly enjoy?

Which ones and why? No. No, I don't. I don't like household chores. We at the firehouse, we got chores every day. We got to do. The one I like the least is mopping. Yeah.

So we play a card game and see who's going to do the house duties. and if I lose, I always get mob because they stick me with it because they're a bunch of jerks. If I win, I'm taking the garbage out. So let's go with garbage. Wow. There you go. The garbage, man. I love it.

If you could learn one random skill, what would that be besides bagpipes? A random skill, breakdancing. So every year we have a union formal with our fire department. Man, how sick would it be if you just came out there, spun on your head, and didn't. some crazy backflips and all that. That would be epic. Showstopper. Should do it.

Break dance. Love it. Awesome. Awesome. Thanks, Jeff. 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 Calico 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.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.