BiggerPockets Real Estate Podcast - 259: Old-School Investing Wisdom from 60+ Years with Mike Anderson

Episode Date: December 28, 2017

One of the most impactful moments for most real estate investors is meeting a “mentor,” someone older and wiser who can share with them the lessons they’ve learned. That’s exactly what today��s episode of The BiggerPockets Podcast is! Mike Anderson has invested in real estate for over 60 years, doing everything from buying 200 houses per month to owning a mortgage business to storage units and more. On today’s show, he dives into his story and the lessons he’s learned over the past half-century and offers insight and wisdom that newer investors need to hear. This conversation is fun, fast-paced, and filled with knowledge, so hang on for a wild ride! In This Episode We Cover: The story of buying a house for $3,250 (55 years ago) How to buy and sell 200 houses a month What he’s learned about people buying houses Why you should buy rentals in school districts A discussion on cash flow vs. appreciation The concept of “dialing for dollars“ Why it’s all a number’s game Things to note when buying from wholesalers The usual problems with investors Where to get the money for deals Why perseverance is key How to hire the right people How to continue buying 10 or more houses (and get bank financing) Why he’s concerned about the future And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Money Podcast BiggerPockets Podcast 221: Buy and Hold Real Estate—What Works and What Doesn’t with Tim Shiner BiggerPockets Podcast 242: How to Live an Incredible Life Now & Achieve Early Retirement with Josh Randall BiggerPockets Podcast 258: Six-Figure House Flipping with Gabe DaSilva CraigsList Books Mentioned in this Show Rich Dad Poor Dad by Robert Kiyosaki Tweetable Topics: “The essential thing to make money is hard work.” (Tweet This!) “Don’t worry about commissions; worry about your customers.” (Tweet This!) “How are you going to buy real estate if you don’t know what your goal is?” (Tweet This!) “It doesn’t cause cancer to call people on the phone.” (Tweet This!) Connect with Mike Mike’s Company Website Mike’s Facebook Profile Mike’s Twitter Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

And this is the Bigger Pockets podcast show. What number are we at, Mindy? Oh, Brandon. This is the Bigger Pockets podcast. Show 259. Woo. Money's where the volume is, and that's kind of always what I believed in.

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 is going on, everyone?

This is Brandon, the host or co-host of the Bigger Pockets podcast today, here with my guest co-host or host, Mindy. Mindy Jensen, how you doing, Mindy? I am doing wonderful, Brandon. Thank you very much. How are you doing? Man, you know what? Life is good.

Christmas is over now, which, you know, we were recording this before Christmas, but whatever. Man, what a stressful holiday. Oh my goodness. I can't believe it. Other random comments. Good, good, good. No, things are good. If all is scheduled to go the way I think it's supposed to go, which, again, we're recording this a few weeks earlier, I should have both my apartment and my mobile home

park closed here by the end of the month. So it should be like any day now. So. Oh, well, that's very exciting. I'm super excited for you. We're going to have to go and take another episode to really dive deep into your investment and your experience with the 1031. We will have to do that.

Your mobile home park, very excited about that. There you go. Well, cool. Cool. All right. Well, what you've been up to? Anything fun? Anything exciting?

I haven't had you on a podcast in a while, so we need an update. I know. So Scott and I have started our new podcast. That's right. That's coming out here in just a few days from now. January 1st is our very first episode. And we are getting ready to record. We've recorded several episodes already, but we were really hoping to get a first guest on a very special first guest.

And can I say who it is? I don't know. We haven't recorded it yet. I think I'm going to tease you and say, you should listen in on January 1st, kickstart 2018, by listening to Mindy Jensen and Scott Trench interview a very special guest. Wow. That's a good tease. We're going to talk about money. We're going to talk about finances in general. One of the biggest questions that we get in the Bigger Pockets forums at biggerpockets.com slash forums is how do I get started investing with no money and bad credit? And I know you wrote the book on investing with no money, but you, Brandon Turner, can invest with no money. I don't know about your credit. I'm assuming it's not terrible. It's not too shabby, you know. However, I just found out yesterday my wife is beating me on credit score and that made me sad.

I beat Carl. Did you? I beat Carl all the time. And it was funny because for a while I was a stay-at-home mom. So I had no income and he had an income and I have a better credit score. So I guess the moral of that story is don't have a job. I don't have a job. Yeah, there you go.

Yeah. That's a great idea. No, so anyway, back to the question. So you're launching a podcast. We're launching a podcast airs January 1. It is about finances. How to be rich with money. How to be rich with money.

Exactly. No, we want to help you fix your no money and bad credit situation. Is it only for people with bad credit and no money? Is it the only people who listen to this shit? We know the show is for everybody who wants to be smarter with money. What's the show called? Do you guys have an official name yet? So around the office, I call it the S&M podcast, the Scott and Mindy podcast, but apparently that has different connotations.

You can't call it that. I think it's going to be called Bigger Pockets Money. But we will see in a couple of days when it comes out. Well, when it comes out, guys, make sure you listen to it and then rate and review that show as well. We're going to launch hopefully the biggest personal finance podcast on the planet. That is the goal here. So with that, let's get into today's show. Before we do, I want to get to today's quick tip.

All right, today's quick tip is very, very simple. Next week, like the first Wednesday in January, we're doing a special once a year webinar called How to Make 2018 your best year ever, best real estate investing year ever. And I'm going through how to make a plan for the full year, how to really kickstart your investing, how to do all that stuff. So go to BiggerPockets.com slash webinar, if you're watching this webinar,

listening to it about the time that this comes out, and sign up because it's going to be life-changing. I did this a year ago. I did How to Make 2017. people like thought it was the best thing ever. So I'm going to repeat it, tweak it, change it, make it a little bit more closely related to this year, what the market is like today and how to find deals, how to fund them, how to set a plan, how to set your goals.

It's going to be epic. So BiggerPockets.com slash webinar. That's your quick time. And that is Wednesday, January 3rd, that it is. 2018. What time is that, Brandon? I think it's going to be at 4 p.m. Pacific time, but I might change that. So go check the site and go see what time it's at.

I got a couple of days to figure that out. Okay, biggerpockets.com slash webinar. So thank you very much, Brandon, for that quick tip. I will say that I've set in on some of your webinars, and they're always really, really, really great. Thank you. You're pretty good at what you do. I'll give you your $20 later for saying that. Yep.

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because you said he has the best. stories of any guests we've ever had. And I don't disagree. This guy is a riot in a lot of ways. He's been investing since way before your mother was born. I think that's true. Yeah, he is. I can't even say that he's been investing since before you were born because that's nothing. He's been investing. That doesn't actually, that doesn't accurately convey how long Mike has been investing in real estate. Mike has seen it all and done it all. He currently owns a mortgage company. And he talks about finance. financing in this episode. He talks about general mindset, what newbies need to do to get going.

Yep. This is like old school advice for newer and older investors. Like it just, it's just like, how do you like how do you like how do you condense down 60 years of real estate knowledge into one episode? Like this pretty much does it. So you guys are going to love it. So we do it. This is a really awesome episode. Let's bring Mike in. All right. All right, Mr. Mike Anderson. Welcome to the Bigger Pockets podcast. Super glad to have you here. Well, thank you for inviting me. Yeah, it should be a lot of fun. Now, you came on the show because you are friends with Tim. Shiner, correct? That is correct. A very, dear friend of man. Very sharp man. And a very, very good episode of the show. Mindy, what number was that? Do you remember off top of your head? That was episode

number 221 with Tim Shider, where he talked about his phrase was, buy for me and tear up your lease for free. Oh, yeah. He means that too. And if you buy a house from his wife, he'll tear up the lease and though she makes a commission on the house and she sells. So it's really a pretty good deal. I mean, it's good for the, it's good for both parties involved. I have heard from so many people who have said that is such an excellent tip. And, you know, it makes sense. It's like a no-brainer once you hear it. But I don't think as many people listen to it or like think of that as they should. Yeah, well, most people that are in this business, the investors are not being in real estate business anyway. So it's really, it's a great idea for what he does with Ritters.

But Tim owns a lot of expensive property in a nice area in Dallas. So he can get away with it. It's got a lot of demand for him. So they make money doing it. But I think Tim would do it just because he's a good guy. I don't think he does. If he can make money. I really believe that. that's the way Tim is. But, you know, talking about investors, one of the questions, what you're going to ask me do you some questions? Do you want to ask those first or you want to just carry on here? You just do what you want, and I'll just jump in when I feel like it.

Well, I had an earlier podcast from gentlemen, and they were asked me about particularly novice investors or new investors in the market. One of the questions they asked me how I got into it. When I was working for my dad's company, when I was just gotten out of college, and my dad owned an appliance store company and a large parts of distributivehip for Southwest and parts and refrigeration parts. And I had no clue I wanted to go into real estate or anything like that. So one day, a guy was in the office and buying some parts from us. And he said, I want to sell my house. You want to buy it. And I said, well, how much he went for? And he said,

$3,250. And I said, $3,000. What? 3250? Well, this was 55 years ago. Okay. Okay. I'm sorry. Continue. Well, that's how long I've been doing this now. I'm sorry. I'll never forget the story because it's a true story. Anyway, it was $3,250. Wow. He wanted $500 down to $50 a month. So I bought it, and I put up a rent sign in my dad's sword because plenty of customers gave me. And I went in a couple days' time for $100 a month.

And about three months later, my wife and I were billing a house, and we were short on budget. We went over budget. So I called a friend of mine. It was in the word of his name. I said, Red, I need to sell this house and get some cash out of it. I said, what could a little house bring? He went and looked at it. She'll bring $11,000.

And I said, $11,000. I just paid $3,250 for it. He said, yeah, so I put signs up in my dad's store. And I sold it in three days' time to a couple. And I made about $8,000 on it in three months' time. Didn't have to do any repairs or anything. I sold the FHA. And so I got to look at that.

Real quick, what would that house be worth today? Do you think? What would you guess? $100,000. Okay. We're talking about 55 years ago. Yeah, it's been a while. Yeah. Right. So I talked my dad, I said, you know, dad, I just made $8,000 in two or three months. I hadn't do any work on it. So I started buying and selling houses two or three a month and making, you know, pretty good money, $15,000 a month, $12,000 a month. And this was right after I was out of college. So I told my dad, I was resigning. He said, no, you got to stay here six months because you're a valuable part of the operation. So I stayed there's six months. I did real estate on the side. So I was buying and selling four or five houses a month. And I learned a lot from buying and selling houses. I didn't.

make a lot per house. A lot of investors back then, if I could make three or four thousand dollars house, that was sufficient for me. But if you're doing three or four a month or five a month, so the one thing I would tell investors is buy right. In other words, you've got to buy undermarket to buy houses. I later on was buying as many as 200 homes a month. I actually had a lot of credit with FHA in Washington, D.C. for a million dollars. I could borrow a million dollars from HUD in Washington to buy their foreclosures. So it got to be a big business with me, maybe three or four years after I went in the business. But what I find is three things about people that are buying houses.

One of the things they do that I don't particularly like is they go to these seminars and they buy these books and tapes. They're $1,500, $2,000 about how to make a million dollars in the real estate business with no damn work. Yep. And all those books need to say, when you open the first pages and say, good damn luck because they ain't going to happen. So I've been on a stage many times with people who wrote those books.

They're all to have that experience of doing it, but not during the experience, in my opinion, to be telling people how to make money. And they really don't tell people what I think is the essential to make money. It's called hard work. Yeah. I can tell you that most investors, it really is. It really is. It's all about hard work. So if you're the type of a passion investor that thinks you're going to go buy a house and rent it or flip it, whatever the case may be, first of all, you have to set your objectives.

And your objective may be two or three different things, particularly if you're looking for rental property. A lot of people are buying rental property for retirement. They want to buy a house, pay for it for 15 years. They may be 50 years old when they're retired. They want to live on the income from that house. Those type of people are buying more expensive homes, in my opinion. They're buying homes in the 3 to 400,000 range or whatever the case may be in your particular area. And they're in generally better school districts.

That's an important thing for investors to look at what school district is in. Because school districts in the metroplex of Dallas, you can be two blocks away, the same house, and one being one school district, it'll rent for $1,000 more than the other one is not as good as school district. So I think it's very important for people to look at school districts when they're buying rental property. But there's two basic differences in rental property. There's one that's called cash flow. That's this all your buying is cash flow, and the other one's appreciation. So a guy that may be buying appreciation, may have a job somewhere else and it's a sideline for him. He's just looking for retirement. He may be making $100,000 a year,

$150,000 a year, and he'll buy one of the pretty good neighborhood that may cash flow, three or four hundred dollars above, which is not enough to cover expenses by the time you do mains repairs, reserves for upkeep, et cetera. But he's breaking even on it. And his hope is that over 10 or 50 years that house will go from, say, 300,000 to say 450, 425, whatever, depending on what the market is, he have no control over that. That's one type of investor. And in my opinion, those investors should look at finance 15 years because they're not looking

for cash flow. They're looking for appreciation. And that house will be paid off. A 30-year note pays down 25% the first five years where a 15-year note pays down 7%. So if you're buying it as an investment tool to retire on, look at a 15-year note because the payments are about 15, 18% higher than a 30-year note, and the equity bill is so much better. The other side of that coin is buying for pure cash flow. And I can tell you this unequivocally that the least expensive home you can buy is going to

cash flow better. For example, if I were going for cash flow, I'd rather have $300,000 home. than one $300,000 home because the $300,000 homes rent for $1,500 a month or a $300,000 home may rent for $2,500 a month. So the cash flow is significantly different between a mortgage-spensive home. The mortgage-spensive homes, the less cash flow you're going to get a return on your dollar. But they have more appreciation potential. So that's what buyers need to identify going in is what their goal is.

Because a lot of my talk to have no, well, I'm just buying real estate to make money. For what reason? Yeah. Does that make any sense of you? You know, this is a big debate we hear on the side all the time about do you buy for cash flow or do we buy for, you know, appreciation. Why is somebody buying? Where do you draw the line? Like, where do you think somebody should aim for appreciation and where should somebody aim for cash flow?

I think the guy that aimed for cash flow needs a cash to live on or is building a portfolio or the guy billing for appreciation and retirement has enough income to where if he loses $3 or $4 a month on a house is not going to set him back any at all. So there are two entirely different products. And that's what what these investors don't do, in my opinion, is to identify what their goal. is. I mean, how are you going to buy real estate if you don't want your goal is? Keep it, flip it, you know, buy it. Now, flip it at house, that's in totally, entirely even situation. But I can tell you that, in my opinion, it's not an opinion. It's fact as far as Hamils. Well, I'm highly opinion and I highly believe my own opinion. Just because I've had a lot of experience doing this, I've never made any money the easy way. I can tell you a story,

and this happened when I was about 25 years old, so it was 49 years ago. I used to keep a book, and when I was driving down the streets and I saw some houses, I thought either a for-shel ab owner or house it was deserted, I'd go back up and look at up mapping plants and find out who the owner was call them on the phone and go, my name is Mike Anderson or you shouldn't sell in your house. Yes, I am, how much you want for it, and we try to make a deal, and most of them would hang up on me because I was trying to see other homes. You know, and that's true.

I've never told anybody they were getting a good deal because they wouldn't get a good deal. Anyway, I was driving down the street when I was about 25 years old, and I saw eight homes on the same street, and that was. One of them had a rental sign on it. So I went back to my office and I called. The name was Evelyn Sibley. I'll never forget it. She lived in a walk, Sanj, Texas, the suburb of Dallas.

And these houses were worth about $18,000. I called her to fund Miss Sivoli. I'm a real estate investor. I'm interested in buying your rental homes. You insured and sell them. She said, yeah, I think about selling them. How about you give me for them? And I said, I'll give you $64,000 cash for all for eight of them.

And she went off on me like, I mean, she went through. She said, you call me a thief, a crook. every kind of name of the book cuss me out and said I would never deal with you you're a damn cook and slam the phone down on me and so I said when she was telling truth I was trying to see her home so why would I be upset with her I wouldn't so anyway I had this little book I the green book a spiral notebook and I bought a million dollars on the outside and I wouldn't get rid of that book until I made a million dollars so these people I'd call over the years I'd put in this book and I'd call them every Friday afternoon because you never know you know if you catch somebody who wants to sell her it doesn't want to sell so

every year for three or four years. I'm not kidding you. It actually took me five years. I called her on the phone every Friday afternoon. It was about 10 second on conversation. I say, Miss Cindy, this, Mike Anderson, go, you're the quickest crowd of steal my home zone. Ever called me again, Sam, I'm going to come down.

And after about two or three years, so it'll be a true story. After about two or three years, my staff would go, Mike, what is wrong with you? That lady's never going to see out of the hour and go, it takes 10 seconds a week. Who cares? Yeah.

It's not bothered me. I don't have anything to do on Friday afternoon. Friday was slow in the real estate business. So one Friday after, five years I called on the phone and she was crying. And I said, Miss Sibley, what is wrong with you? And she said, oh, I was up collecting my rent today. And some guy stuck up behind me and hit me to head with a pipe and took my purse and all my money in it, my drove off in my new cat, like I don't know what I'm going to do. And I said, oh, Miss Sivoli, I'm so sorry. Would you

like to sell your house? She said, yes, I want to sell them. I drove down there. That night, 30 miles at six o'clock night, signed a contract. I made $80,000. And that was $49 years ago. So figure it out. What I'm saying, is perseverance, which people don't have the perseverance to do what I'm talking about doing. But if you want to make any money, you can be a buy, look, I call them players and non-players. You can be what I call a non-player, which is kind of play on the sidelines, never get in the game, or you can get in the game. If you're getting the game, I'm telling you right now, if you listen to this podcast, it takes a lot of hard work and a lot of luck on top of it and a lot of ethics. You don't need a lot of people.

You know, if you're trying to buy out somebody on a wholesale level, and they go, well, you're trying to see them, I'm going, yeah, I am. but I've got to pay sales expense. I got to pay holding costs. I got to pay insurance. I got to pay tax. I got to fix it up. And I'm going to make a reasonable profit. People understand that.

But if you tell somebody, oh, I'm paying retail for it, they know damn well you're not doing it. So why do that? I like that phrase. I need to make a reasonable profit. I mean, nobody's going to argue with that. That's what every business does.

They really do. And these books that people read, I actually went to a big CBS. And that's when I was on stage with Robert Kiosaki and some other well-known speakers from New York and other places. And most of these guys were selling their books and tapes and everything. And I was the last speaker up, and most of the audience was here in Dallas and they did me

because I had a radio program on CBS for 16 years. So they really wanted to hear what I said. When I got up there, I said, look, I wrote this book, and I'm telling you, for $1,750, it'll be the best book you've ever read in your life. It says how to make a million dollars in two weeks' time in a real estate business. And I can see all of them going, oh, my God, you're going to try to sell us another. the book of tape I go. So, and I said, here's, here's, it's easiest hell to read.

I opened up the book and it had one page in there and said, good fucking luck. So it ain't going to happen. It ain't going to happen. So I'm not a big believer in buying those books and tapes because I think you have to get down and really dig in the dirt. It's kind of like going to war, going to boot camps, different, going to war where they're shooting live bullets at you. So I'm just telling you, I can't emphasize how much time it takes to work on D.

and don't be scared to make offers. I know I wouldn't ever scared about making an offer. I didn't care if I insulted somebody. I didn't like to insult them, but generally speaking, a better you're going to insult somebody. You know, I ask people this all the time.

Newbies come up to me and they say, I can't find any deals. The first question I always ask them is how many offers did you made last week? And what's the answer always? None. Because people are so afraid to go and make an offer. I was going to talk about that.

Yep. You know, find a religion you can trust that knows a market that sits not in for the commission. I've always, that I work on the commission for the most part, and I've always told me every loan officer works for me and everybody else, don't worry about commissions and worry about your customers. If you care about your customers, commissions will take care of. So I interview some real estate agents and find out who got their act together, who knows what you're talking about.

And in Texas, I don't know about the rest of the states, but you can make an offer on a house without even looking at it. So what uncommon for me to put an officer on a house I'd never look at? I'd look through MLS, and I'd look for houses in the real estate. repairs because a house in tip-top, say, is going to bring tip-top dollar. And repairs didn't bother me. So that's one thing, investors. Don't, don't, you want to look at how it's been on the market for four or five months

and they haven't moved. The prices has gone down steadily on, and the people are tired of showing it. They want to get their money out of it in a lot of cases. So make them an offer, you know, and my rule of thumb was if I couldn't buy for 75% of market value, in other words, let's say house is $100,000, I might pay $75,000 for that and I would deduct my closing costs on it, which would be maybe 3%, and I'd also deduct the repairs. If I figured the repairs were $12,000 on it, I deduct $15,000, so I'd take the $15,000 for repairs,

the $25,000 off the top of it, and $3,000 closing costs. If I'd make it off for $62,000. If they took it, fine. If they didn't, they may counter with $64,000, then you make it for mind. But don't get caught up in this trap. Well, I'm going to be getting this bidding or somebody else. Make your mind up what you're going to pay for it. Don't go over that.

So maybe. I was going to say, how many, what do you think percentage-wise you get rejected? Like over your years, like, do you think you lose, you know, you lose half, three-quarters, 90 percent? How many rejects? No, I say, 75 to 80 percent. Okay. Yeah.

Okay. But I'm jumping in here. Okay. I got like 19 things to say because you just keep talking. I'm like, wait, wait, wait, I got my question about this too. I told you about that. You did. You said you liked the money.

You did. Take a breath. Sit back. Okay. So. I want to say you had, call them every Friday. I'm looking, my notes got all wiped up because I made a note someplace else. You said, call them every Friday.

You got your little book. We call that driving for dollars when you drive around and you see houses you want. Dialing for dollars. Well, first you have to drive for them or walk for them. And then you come home and you look up where they are. You called them every Friday. I am in the Bigger Pockets forums all day, every day. And I see people all the time, oh, how often should I send a letter?

I sent one once. Okay. And you got a 0% response. That's because you're not being consistent. When somebody gets ready to sell, Evelyn got ready to sell to you. You called her right when she was ready to sell. I called her at the moment when she needed to sell. Absolutely.

So that's not going to happen if you do it every six months. The point of the matter, it didn't take any time. I mean, it took me, you know, 15, 20 seconds. And let me say something else. This is one of my pet fees. I am so damn tired of people thinking that, that iPhones, I don't even have an iPhone, nor do I want one. I don't take it. I don't need the text. I don't, you see a computer on my desk?

I don't have one. I don't use a computer. I have three decisions that sit out text for me. Occasionally, maybe once or twice a day. I do probably eight or ten emails a day, but I pick up my phone and call people on the phone. It's not, it doesn't cause cancer to call people on the phone. But it's scary, Mike, it's scary. I'm a millennial and I can't handle it. What do they know? I can't tell you what to do. what? What if they say no? What if they don't like my offer, Mike? Well, I'd say I'll find another person that's like my offer. You'll find them. I mean, you know, when you talk about how many offers I made on houses, it really, when you think about offered maybe 100 contracts a month

and you need to look at the house and what it takes what my secretary, five-minute's type of a contract and send it out, it's got an option period in there where I can back out of it any time and 15 days. And if I got up, happy to get one, because I wasn't going to waste my time. Let me tell you, time is as it is to me. Always has been and always will be. I'm not going to waste my time driving out to somebody that I got a 5% chance of buying it.

I'd rather shoot them an offer at my price, and if they accept the offer, then I'll get off by button, go out there and look at it and do a takeoff on it. And if I don't like the outside, it's back out of the contract, lose my option fee of $100 or $200. But I don't waste a lot of time doing it.

And it's a numbers game. It's like, Why do you take a shotgun when you're going to burn a gun? Instead of a pistol because you've got a lot more shots at it. So just fire at them. I'm serious. Just fire at them. And people are not going to be upset about it. And the realtor will turn those contracts are like crazy.

And particularly if you're buying a few houses, you may cut your deal on pay part of your closing cost or maybe cut the commission if you're doing any volume with you. But even then, the realtor is not overpaid. I can tell you that, in my opinion, most of them are. They work hard. And for them to make 3%, particularly on work. depending on what product you make, they deserve. But any break you can get to save you money, that's money in your pocket. You know, so that's the way I look at it.

Yeah, I love that. I love that. You know, I like the mentality that you come at this. And because, you know, I teach this online class every week to people. And my message is almost always the exact same. It's like your job as an investor is not to go out and convince every single person to sell you a house. Your job is to simply follow a process. That is, you get leads.

You go out and figure out what number makes sense, like you talked about. And then you go and make an offer. And if they take it great, if not, move on to the next one. Like, this is largely a numbers game. In today's market, you should be able as an investor to make $10,000 on a house. That's after everything said and done. On a flip or $1,000, I'm going to do that. Flip.

Okay, yep. Not rental. Sure. Flip, flip market. I'm talking about purely flipped there. Sure. If you can't make $8 or $10,000 house, then pass it. If there's too many things that I can tell you that 90% of the investors that start remodding home spend more money than they thought they were to spend.

Yeah. I'd go a little bit higher. I'd say 100% of investors because of modeling homes. They always absolutely think they're going to get top of market. Yep. They also absolutely think it's going to put selling the first day. It comes on the market.

It doesn't happen. Yeah. You know, in the hot market, down in Dallas Metroplex, the hot market, it's not unusual for house. They have 15 contracts in one day's time. I'm not kidding you. If it's priced right. Yep.

Those are in tip-top shape. So that's why I tell investors, find one with a little repairs, find one with the little, that needs with a little lipstick on it to make it look pretty. And get out there and clean. up and make the drive-up appeal pretty good, and you can sell it. But if you look at it this way, if you can make $8 or $10,000 a house net, I'm talking about, after all expenses, commissions, wholly costs, taxes, insurance, sold, ball of wax. It's a pretty good living if you

do that once a month. It's $96,000 a year. If you do it twice a month, it's $192,000 a year. Yeah. So it doesn't think of Walker, Wachersand's to figure it out. But you're not going to find them sitting on your butt. They don't, I've never gotten a letter in the mail. I can think of you want to buy my house. Every house I've never bought, I went after a home. How about you, Brandon? I'm the same with Mike. I've never gotten a letter that said, Hey, Mindy, I think you might want to buy my house. Yep, never have.

You know, every deal I've ever got. That's why, like, you know, another thing we talk a lot of here at BP is like back in 2008 and nine, you could find good deals. Today, you can't find them. You have to make good deals. You have to go out there and a hunt for good deals. They don't walk on your doorstep. You know, these quote wholesalers. Yep.

That are buying houses. They do a lot of advertising and they have phone banks and all that sort of thing, call all around. They'll send you a deal and says, look, you can. buy this house, the ARV, the retail value, but it's $280,000. You can buy it for months for $150,000 and repairs are $50,000. You can sell it for $80,000, and by the time you come out of you, you'll make $30,000 profit. When you really bore down to it, it's like the two-minute morning of football. It's a lie. First of all, it's true. First of all, the ABR, the evaluation that give you very top of market. I'm talking about stuff in tip-top shape.

And so it may be worth, what they're saying, 280, it may be worth 260 truly. Yeah. Also, they say the repairs are $40,000 or $50,000. Truly, they're like $60,000 or $70,000. So, and they get these dollars invested to believe all this BS, and they buy these houses, they make $5,000 of them or can't sell them quick or whatever. And it's too much work and everything. They get bored with it.

Run your numbers yourself. You know, don't believe what a realtor is telling you. You call another realtor and say, I want to know, if I put this in this house, what it'll sell for? Within 30 days, not six bucks a year on the market, depending that kind of one buyer that wants you, that particular house, whatever repairs they're telling you about, look at those closely because I don't believe half, in fact, I've seen a lot of them. I used to buy a house from them. I just quit buying them because all their numbers are just a joke. Yep.

Yeah, I would say nine times out of 10, the wholesale deals that I see are just, I laugh at them. I'm like, there's just, you don't even know your market. So maybe can you talk to those people right now that are wholesalers or they're trying to be wholesalers? How can they get better at getting those numbers correct. Get your numbers right. How did they do that? The honesty. I mean, instead of selling people you're going to make $35,000 on this house, tell them you're going to make $10,000. But you're right, Brandon, in Dallas, and I think it's around the country, affordable housing is short supply everywhere. Yeah. So there is not many flip houses around that are worth a damn. It's hard to find you. That's why you got to dig them out. Yep. They really are hard as

tell the find. I know investors, and I know people that make what they call it predatory lending money, you know, where they alone investors, 12, 15%. Hard money lenders. Yep. Yeah, they can't find enough buyers for them right now. There's too many, there's not enough product on the market. And that, I'm sure that that's, that's way in Colorado. In fact, in Denver and surrounding areas, the mortgage on, it's on fire like it is in Dallas.

So it's hard to find deals. But they're out there. You just got to find them. But look for ones, honestly, God, that need a lot of repairs. I'd rather buy a house to need $50,000. with the work than one would need a paint job. Yeah, the more work that a project needs, yeah, the fewer people are interested. And also, yeah, the law of like, we should like make a law for this.

Like, the law of smelly houses. Like, the more smelly it is, the fewer people want to buy it. Like, I love buying smelly houses because everyone's afraid of them. But usually it's, yeah, it's usually a paint job or replace the car. Well, you know, I just think that the wholesalers, you want to call them that people that are flipping these houses for three to five thousand dollars or $10,000. You really don't know what they're making on them. They're making pretty good money to do what they're doing.

but I just don't believe a lot of the stuff they do it, at least in Dallas. I can't, I can't tell you about what's going on Colorado, but here they're giving the high sale, the lowest of a pair deal, and it's somewhere in between is the truth. Yeah, yeah, it's hard. You know, you said it best a minute ago. You always have to do your own numbers. Like, don't trust your agent to do them. Don't trust the wholesaler to do it.

Don't trust the turnkey company or your mom to do it. Don't trust Mindy to do it. Don't trust Mike or Brandon, right? Like, do your own math. Like, everyone, I don't know. People want to take the easy way out and they just want somebody to give them a nice deal on a plate. That's that book I was telling you about. Good luck. Good luck.

This isn't going to happen. You know, and another thing I find investors, they really don't know much about finance in these houses. I know that a lot of people in Dallas go to these predatory lenders like you're talking about. They charge 12, 13, 14 percent, 4 or 5 points. And they're easy to deal with. They don't have to go through a lot of application. They're just looking at a loan to value what you're putting down on, that sort of thing. They're making a loan based on that.

when the reality of it is if you're paying someone, let's say 12 or 13 percent and four or five points, and that note's only good for six months and they renew it every six months for them one point in which is what they typically do in Dallas, then they're making as much money as you are. And so a lot of these investors, if you got good credit and a viable income, in other words, you report some taxes. And most investors that are buying and selling houses don't report anything for income and their credit's always screwed up.

I never have to figure that out, but this is the way it is. But for the ones out there that have good credit that have a job, why go to a hard money in there to go to a bank? I mean, go to a local bank. You can borrow money 15, 20 percent down at maybe a 5 and a half percent with one point. Why would you pay somebody like that because you're just damn lazy, I guess? I don't know why that is. I'm serious. And they're intimidated by going to a bank or whatever reason.

I'm not at all. I can tell you that I have substantially reliance credit to do real estate loans. a lot. And I'm constantly looking at new banks, and I don't deal with the major banks. I don't deal with the Bank of America, Wells Fargo, Chase, any of the big ones, not because I don't like them. I think they're great banks. I have no problem with them, but you're just a name and number there. And a small local bank is generally got, is wanting to invest more in the community. They're more personalized. So go to a bank and you'd be surprised one bank tells you know, that doesn't mean another bank's going to tell you know, because banks have what they call buckets. For example, if you go to a local

bank in Denver, let's say. And they may have 20% of their total assets in spec homes, bill jobs, another 20% in business loans, another 20% in car loans, another 20% in home improvement loans. Well, the government doesn't want you to have your bucket all fill with a certain type of loan. They think there's too much risk. So Bank A may have their bucket full of real estate loans and they don't want to make them so they say, we're not doing that right now. Bank B may not have their bucket full, so don't give up. It's just constant follow-up, communication, picking up the phone, going to see them personally. E-mailing is fine and dandy, but I don't do it.

Trust me, if I needed money today, there is probably 25 new bags within two miles within my office right now. You know how to do if I couldn't find a bag to make me alone? I could go to all 25 of those damn one of them, and I guarantee that I walk out with two or three of them and said, I want to make you alone. Yep. I promise you that would happen. You know, we get that pattern on the podcast here all the time.

We've been doing 250 these shows now. over 250 of them. And I probably heard that like dozens of times about if your bank turns you down, just go to the next one and then go to the next one. And that like ever like it works. Like it clearly works. It just people are like, no, the banks are no. It really does.

Yeah. And I'm not bragging. I've got pretty strong financial savings of good income and good credit. And I don't go to a bank and try to borrow money if I think it's a bad deal. Yeah. But they may think it's a bad deal for whatever reason. They may, I mean, if I had banks turn down low because they made a loan on the street, 19 years ago and I went in bankruptcy house.

I go, what the hell does it have to do with the day? What I remember, I go, okay, I'm out here. You know, I'm just saying that don't give up. It's that same thing I was talking about perseverance and going after something you want. And if you want it bad enough, you know, I don't care if five banks tell me, you know, the first five banks I go into, I'm not giving up. I will say this. If I wanted the job today, I'd go down there and talk to him in person.

You know, the first thing I'd say, I need your help. I want this job. I work by butt off. I'm honest. I'll be your hardest worker. In fact, I'll work here for free for a week. People will hire me and give me a shot. Now, how many people think aren't going to take off on that?

Instead of coming in, I'll ask you a resume. And if you ever read a resume, if you ever seen a resume, said, I'm a turd. I'm not going to work hard. I'm going to screw over. They all say the same thing. I have the latest thing. It's a joke.

That's how Scott got his job here, Brandon. Scott just, he was. I'm a big turd, right on the. No, no, no, no. You know, give me an educated worker, but give me a worker over education. I'll take a worker every time where somebody's got an education doesn't want to work. Well, Mike, I'm guessing you've probably hired a lot of people in your day. I'm assuming, like, over the last, you know, whatever, 50, some years of investing.

Do you have any, do you have any tips on, I mean, how do you find that good person? How do you, like, this is something I struggle with. How do I find? I mean, everyone sounds good, right? Luck, yeah. Well, you know, that's something. talking about Cody, one of my assistants who's doing real well. He came to work me five years ago. And one of the things I looked at when he came here, because he went to work for $10 an hour,

and trust me, he's making lots of money right now. This bought a $400,000 home, about to get married, great life, money in the bank, good credit, a good kid. But one thing Cody likes is to make money, and he doesn't mind him working for it. You know, so I look for that trade. But the one trade I look at, if I'm looking at a college graduate, if they work through college, that they have damn part-time job where they just go to school and never work a day in their life. So I would prefer somebody that went to a less expensive college that actually had to work and knows what work is all about than hire somebody with the degree that never, never has a clue what works all about.

I've never heard that my life, but I love that. I love that too. I really love that. You know, the world's rich guy told me one time, a guy named W.L. Moody out of the Diavston, he and a guy named Jay Paul Gayette were rich scass, and he wanted me to go to work for his insurance company. I wouldn't do it. I said, I want to do my own deal. Plus, I didn't believe in insurance.

And he said, what do you want to do? I said, I want to own my own business. So for something like 65 years I've owned my own business or run my own company, I couldn't work for anybody. They'd fire me in a New York minute. They would. I go, what do you mean? We can't buy a computer.

We need a computer. Well, we need to send it up an acquisition. We're going to take bids on it, and we'll get your computer in three or four weeks. I go, y'all are nuts. Yep. Nuts, you know. So I believe it's moving to moving swiftly. taking action.

I think you should hire smart, but you should, if an employee's not working for you, you get rid of them quick. You know, I mean, Brandon, come on. You all know, and Mindy,

you all know and too each time if they're going to work out or not. You just know it. Yeah, that's true. If they're not working out, just let them go and say, look, we think you're better off somewhere else.

You just not have been for us. I thank you for coming to work for us, but we didn't need a split company. And let them go. Brandon, after this show, we're going to have to have a talk. We're going to have a conversation.

Okay, good. Let's just talk change. But the World's Rich Sky told me there's three things about that you had to make a success. He would never hire a good loser. He would never hire somebody that didn't believe in God. He would never hire anybody who didn't have a big sex draft. Oh, that came out of nowhere. Okay, let's hear.

I'm talking about the World's Rich Sky. And I said, explain to me what every one of me. He said, Mike, if you ever deal with a loser that doesn't mind losing, he's a loser, don't hire him, particularly executive position. And he said, if you don't believe in God, he said, it doesn't have to be the God you believe in. He has to be some superior being of some sort. It could be the sun, the moon. It could be the earth. It could be any kind of God.

But people have to find something to fall back on in times of peril. I mean, the first thing people say when they're about to have a card break is, thank God. You know, they need to believe in something bigger than themselves. And the third thing is sex driving. And he said, I'm not talking about going out and chasing women. Just have that drive to achieve and get what you want ahead. And he said, I call it sex drive. And he was a world's rich guy on it.

It cooperates when he died. He can call it what he wants. Yeah. I mean, he couldn't talk to me in a couple of work for his company because I didn't like what they were doing. Although it was a legitimate business. I don't mean it that way. I just didn't see myself selling insurance. Would you say that guy's name was?

What was it? Moody. Okay. Moody Foundation is bigger than a Ford Foundation. Ford Motor Company Foundation. Crazy. Moody's. O-D-Y.

Okay. Crazy. All right. So let's let's read. kind of sum up where we're at so far. So can you give me like a, because we usually to the beginning of this show, but we just kind of skipped over it. Like, what do you do in real estate today?

I mean, like, what have you done the last 60 years? I mean, you've done a lot, but can't give a broad overview of the last overview of the last year of your real estate. I can't answer to that question. I don't know what I do. I just, I just, I just get some of the sticks. Now I'll tell you what I do in a minute. One last thing I'm going to see about managing for investors.

Go to a local bank rather than a hard money in there. You may have to go to hard money in there until you get a track record. Don't let that stop you, but go to a bank. like, second of all, Fannie and Freddie will only finance 10 homes for you at a time. And they count your home set as one of them. They count a duplex as two units and a fourplexes, four units. And so anyone invests we sell off notes to is not going to take more than three or four rental property from one customer. So you have to find two or three mortgage companies to you're up to 10.

When you get a 10 property, you can't buy them anymore no matter what you want to pay down. In fact, VA and FHA don't even make investment loans. It's only Fannie and Freddie. And they want 20% down, generally 25% down. is going to get you better rate of interest and better scores than that rates are higher. So what a lot of people do when they start out in this business, they'll buy a smaller home to live in, say, a $150,000 home, be able to six months, get it repaired or whatever they're going to do to it, rent it for enough cash flow to make the payments and cover expenses.

Then they'll buy a little bigger home with an owner-occupied home. The reason you do that, quite frankly, is because the Dowell payments lower anywhere from 3 and a half to 5% down, instead of 20% down, the rates are lower. And as long as your intent is to live in that house, that's what the law says you intend to occupy it. So moving into an occupied and then to start moving up the ladder. That's the way a lot of investors build their portfolio. Yeah, that was my first few houses in the same way.

That's how I did it. It's not illegal. It really isn't illegal. So it's a employee to make. But once you get eight or ten homes, then you'll find that people don't even want to talk to you because you got too many rental properties. So why not take those,

properties to a bank and bank them. I know, for example, I do a lot of investor loans here in Dallas where he had about 25 homes, 30 homes spread out with, I don't have any investment investors, paid anywhere from 4 and a half to 6% rate, 7% rate. And I said, you got $2 million, $3 million for the property here just in this bundle. Why don't they go borrowed $2 million on them, pay off the billion dollars you want them, give you a lot of credit for a million dollars, and you got one loan, not 20 loans or 25 loans, and you can buy other houses down the road. So he listened to me and I got him a $2 million line. That's awesome.

And here's what it did for him. He found a house because you and I both know, Mandy, you know and Brandon, you know, that when you're buying a house, quickly you can close it. If you can pay cash for it, the better deal you're going to get. So he had an open line of credit where he could go to Las Vegas and write a check if he wanted to because he had a collateral behind the note. It was a pretty strong investor. So he got him a $2 million line or whatever that line was.

And he had available a million dollars. So if he wanted to buy house, he could say as soon as you get the title in the two days time, I'll write a check for it. It made a big difference in what he could buy. So if you've got that many houses, you want to continue buying them. Take them to a bank if they're cash flowing and make any sense. A bank will finance all ten of them, put on one note. You're not going to get as good a rate as long term, 30-year fixed note.

But you'll get a rate. A lot of times they'll give you money, excess money. And they might own you at 75, 80% of the price value, particularly if they're cash flowing. So you may have $2 million for the real estate or a million dollars or $500,000 and maybe get another $1,000, go ahead and put it in another property. So. Interesting. Yeah, you know, on that note, this gets a little bit into the weeds a little bit, but I learned something interesting.

So I'm working through a refinance right now, trying to get a conventional loan. And they only let you have 10. And so like, you know, 10 residential. So I was like working things, selling some properties out. But anyway, in that process, because I really wanted to get a conventional on these last couple single families that I was trying to refi. Anyway, so I learned that it, and again, I'm not a lender person. So if you listen to this, don't take this as like gospel truth.

But this is what I learned and what I read is that they don't. count it as a one of your 10 if it is a loan to your LLC and it's a commercial loan to your LLC that owns the property versus your own. So what I did is I went to my lender and I am I turned that loan into a commercial loan to my LLC basically. That was through a bank. It was actually through a private lender and so originally it was through my own name. You could do that because lenders quite frankly on the bench probably would rather make it to an LLC. Yes. And for a for a lot of reasons, it first, all, it doesn't, they, your homestead and homesteads in law of states are hard to

foreclose. They'd rather make a loan of commercial property. And because the Dodd-Frank Act doesn't say you have to make income to qualify for an investment property. It's only, the ability repay has to be for your homestead or second home. So you could, no matter what you're doing on a rental property, they don't have to verify your income. But that's the sort of thing.

Fannie and Freddie won't do LLCs anymore, family trust anymore, anybody to partnerships. Now, what people do, if they want to buy house like that, put in the LLC or a family trust later on that, down the road. They buy it, finance it under Fannie or Freddie, if the long as they're not over 10 properties, then they'll deed it to their LLC or their company, the trust or whatever, three weeks later. And the notes are due on sale, but I've never seen one call. I've been doing this for long time. As long as you're paying the mortgage, they don't care what name is in. Okay, I was going to ask about that, because that is also another topic that comes up frequently in the forums is I want to

buy this and I can't get a financed through my own self or through my LLC, so I want to buy it as myself and then transfer it over. And there's a lot of discussion about are they going to call the note do or not. Well, let me ask you a question, Mindy. Yes. Let's say that it's fee limited in your area is 35 miles and hour. Yes, I would never, ever go above the speed limit, Mike. I know that. But if you're going 35.35.1, what's a possibility you're getting a ticket and going to jail? Probably 0%. Well, if they pull me over. Because all these notes, well, no, they're not going to do that. Seriously, all these notes are Have you seen Mindy's car? The notes will say if you transfer a title, the notes do in full.

However, I've been doing this for 35 years and I've never seen it happen. The lenders don't give a damn. It's a big misnomer. A lot of people say, they just want to foreclose that to make the money. That's BS. I've never known a lender in my life to have one of the forecloses a piece of property. Wouldn't rather get paid on than foreclosed. You know, so the chances of the BMM ever saying anything if you transferred it to LLC is almost nil.

that they're going to say anything if they do. Just right and say, look, instead of my family trust, I'm on the note, that person's liable on the note. And I don't think, I think it's risk-free. There is risk, it's like the same example I gave you going 35.1 in a 30-fondon, in a 30-mile-fibn-hour zone. You could get a ticket. You could go to jail.

But the odds of that happened are one in a trillion. I don't know what they are. You know, yeah, I've only heard a one investor ever, and it was on a larger multifamily where he deeded it, you transferred to something different. He got a letter from the bank. and he just went and transferred it back and they were like, okay, no problem. But it was like a bigger transaction that they, I think they wanted him to like force him to

refinance with them or something. Anyway, that was the only time I've ever heard of it. But I do that. I transfer my properties. And again, I'm not giving legal or tax advice here, but I typically will buy my personal name. Yep. And I will then transfer it into my LLC. Well, technically you're not supposed to do it, but technically you're not supposed to go 35.

Exactly. Yep. Yep. I do it. And I also. Maybe put it this way. I take the risk. I do too.

Well, so I take the risk. I also make sure that I have equity. Like, I always look at it this way. If ever the worst thing happened in the bank did freak out about it, I've got equity in every property that I buy because I like to buy good deals. I buy fixer uppers, just like you mentioned earlier. So that if ever the worst case scenario happened and the bank freaked out about it. And, you know, at least I can fall back on, okay, well, I could sell it if I had to or

refinance it or go to a private lender or go to a hard money lender or go to a credit, you know, line. I've got options, you know. Equity gives you options. See, and that's another thing that has to be about mortgage companies. Most mortgage companies don't have all the outlets. and they're not hard to find. But unless you fit in a little box, they don't want to screw with it.

You know, if you don't, the credit score's not so-and-so, if the LTV's not so-and-so. And I'm saying there's a seat for every butt, you know, so there are insurance companies to carry those notes. They're all kinds of companies that'll carry those notes. The rates may be a little higher.

They may be six and a half percent. It's verse four and a half or five percent. But, you know, it all depends on what you're trying to do. I would always tell your people out there listening to this podcast to get the best rate with at least about a cost you can. But if that doesn't work, go to plan B. It may not be the best rate, but at least you're getting in a property

that you wouldn't otherwise have unless you go to alternative financing. Yeah. That's why I think you need to have a mortgage company, any mortgage company that has more than one outlet for product. You know, ask your loan officer, can you go to a bank if I can't get this done? Can you make a loan to an LLC if I can't get this done? Do you sell off paper to insurance companies? If not, they can call me on the phone.

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about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring, Indeed is all you need. So do you, did you, Mike, do you, you want to mortgage company or dual-owner mortgage company, correct? Is that what? I do. Okay. So you do the mortgages. You also did real estate investing at one point. Didn't you say earlier you were buying like, you up to like 200 houses a month or something crazy like that? Yeah, but that, that would, you couldn't replicate that today. Sure. Because back then, the homes I bought average cost was $8,000. The average value was $16,000 or $17,000. The average repairs were paint and carpet. And HUD was big back on Venetian vines back then in gutters.

So you could actually repair a house like that. There wasn't any big sheetrock damage or kitchen damage or that sort of thing. And that was actually before built-ins, though there wasn't any appliances to be replaced. You could repair a house like that for, and actually two or three days. They were about 12, 30-hour square feet. And FHA would take anybody that wanted to buy them, they were all for FHA foreclosures. So they had a deal when you could be in them for $100 down. So when I first started buying those houses, I'll tell you another story that's kind of interesting.

Sure. I'd been buying and sell them maybe five, six houses a month. and HUD came out with a program called POP, public program package offering all over the country. And they put anywhere from 10 to 15 houses in the same area together, and they had a minimum bid you could bid on these properties. And let's say the minimum bid was $80,000 for 10 properties. Then you bid the minimum bid at a public auction

and anything you bid over those values, you had to put up in cash. So in other words, a package was $80,000 and you bid $85,000, you had to take a cashier's check the next day to HUD for $5,000. thousand dollars for what you bid over. They'd carry the notes up to $100,000 for six months with no interest. Wow. And you had to do repairs out of pocket. So the average repairs on these houses were about $2,000. HUD would let you make 5% commission. They would let you make 20% on the repairs, and that's about it. So they thought that you could make $2,000 or $3,000 a home. I could make $4,000 home by selling them myself because I had a real estate company.

I could also do the repairs quicker and faster than they could, you know, get them done. because I had a bunch of sub-crues, maybe 15 crews work for me. That's all the, I bought carpet, 50,000 yards in time, and had the warehouse, and I used the same carpet over and over and over again. You saw one of my house. You saw one, you saw them all. They're all the same. Same.

It's true. It was a massive deal. So, and I had been, had a lot of expenses in auctions. When I was in high school, I bought a lot of furniture and antiques, stuff like that. And so I knew about how to get caught up in auction and bidding and that BS, and I would never get dragged into that thing. So for the first four or five bucks I went down in the auction every Tuesday morning

and they would be 300 people in this room bidding on maybe 150 homes, 200 homes. And the bidding went way too out. They couldn't make any money. I come on thinking about, man, these people are either stupid or dumb or what the hell or I don't know what's going on here because they'd bid $20,000, $30,000 more which the poverty may have been $35,000.

He wants to do all that work for $5,000 profit. So I never bought any first four or five months. I went down there one day and the room was crowded, tanning room only, at least 300 people there. And there were 14 houses came up in Louisville, Texas, on the market. And I had looked at it because it was totally out of my territory. And nobody bid them. There's $86,000 for 14 house.

So I asked these two guys back and said, do anyone else see them? Both of them said, yeah, we've seen them. I go, what's the deal with this? They said, Mike, their year and a half, two-year-old homes, seven of already been completed. They've been on the market for six, eight months, and they can't sell.

And I go, I'll buy them and rent it there. So I bet $86,000 for them. It's sad and seen. So after the auction, the guy named Jim Cox, I don't think it's too late to you all, but it's kind of a funny story, a true story. After the auction was over, Jim Cox, it was the property disposition manager for the Metroplex.

And he said, Mr. Sanchez wants to see you upstairs. I said, who the hell is Mr. Sanchez? He said, he's a deputy director of eight states for HUD. He wants to talk to you about those houses he bought. So I go upstairs, Mr. Sanchez, and he's standing there is a very nice Hispanic guy. I've had his act together, quite frankly. And he had these two big deads who looked like their football players standing by him.

And he said, son, did you look at these houses? And I was about 22 years old. He was probably about 50 at the time. I said, no, sir. And he said, do you know what you bought? And I said, no, sir. And he said, we're going to let you out of the bid because you don't know what you're doing. And I said, well, tell me why.

I don't know what I'm doing. He said, you bought 14 houses, seven of it, been on the market for six, eight months. We've totally repaired them. We've offered 10% commission. And no down payment, we can't sell them because right around the corner, three blocks away, they're building brand new homes that are 245s homes. And they have a dishwasher or yours that they have a dishwasher. Your three bedrooms got one bath. Those three bedrooms got a bath and a half.

Your four bedrooms got one bath. They've got two full baths. And they're brand new. They can pay them for half of what you're for half the interest and subsidized interest. So you can't sell them. We put them together for the builder buy back where Mattisell it the building didn't come and buy them. So he said, so we're going to let you out. That's awesome.

They actually let you out of it. I didn't want out. You wanted them anyway? I bought them. Really? I did. So I drove up there that afternoon and fortunate it was off a major thoroughfare highway, 35 north. And so you pull off the highway on Main Street and you drive by all these huge sides and flags.

And you go in these 17,000 and 18,000 around they look like mansions. All the furniture's undersides. They got mirrors on the walls. was taking off, $80,000 with a landscape on each house. And he looked like, honest to God, these houses look like a million dollar homes. I mean, they were really well done by the builder. And I'd known the two salesmen up there were twins from a Catholic high school and Dowell I knew from high school. And they said, Mike, go back there and tell him you can't give them the house back, you can't sell them. So I said, and I was just cocky as hell. I didn't. I didn't know.

Well, I was going to turn me in rent house anyway, so I didn't care one way or another. So I went and looked at them and they were on blue wood, deer wood and clear three blocks and there were 14 of them. So I bought them on a Tuesday. By Sunday a week, 10 days the other seven homes I had painted

yards mode and I had 14 them on the market so I put an ad that paper said let's make a deal. And it was in Dallas morning news times they all I had a map drawn up there. Instead of taking them off in Main Street which the best way to get there, I put them off on the extra before called Fox. And I brought him in a backway at a map drawn up there the open house was from one to four.

I got up there about 12 o'clock and there's 100 cars up there parked. Honest to God. And so I said, let me open these houses. I had little flowers for all of them. And so I opened up these houses 13 of an hour on that Sunday afternoon. And half of my sold VA.

So I go back to FHA. They want all these contracts turned in to FHA. So they thought it was a scam. Jim Cox called on the phone and said, listen, you bought these houses 10 days ago. We couldn't sell them. You sold 13 of them in a week. What's the deal?

I go, I sold them. And he said, we're going to check all this out there out because we don't believe this. So a couple of days later passed, he called me on the phone, said, Mike, we checked all these things about it and they're all buyers. And so Mr. Sanchez wants you to meet him. And I go, I don't want to talk about it. They said, look, he wants to know what, he just wants to deal with me. So he said, he wants to come down at 5 o'clock, and he always drank cognac in the

afternoon after work, never in work. So he was sitting there having a cognac with his two deputies. And he said, Mike, we want to know how you sold those because we just can't believe you did that. And I said, I'm not going to tell you because I didn't know what he thought. I didn't know if you thought it was deceitful, he put in the map up there and not taking him in the main way, taking him in the back area. I didn't know what he'd think. So he just kept on hammer me away going, look, it's cool. We just want to know how you did it.

And I finally said he said he had a blackboard in his office. I'm trying to do it out of blackboard. He said, my God, that's ingenious. He said, I'll get back in a couple days' time. And so instead of them thinking I was shady or something, I didn't know what they think. I was a kid. You know, so a couple days later he called me. He said, I want you to come talk to me again.

So he said, I call Washington a bike and we're going to make you a million dollar loan to buy homes from HUD. We're so impressed with you. No interest, six months' time. You can buy all you went up to a million dollars, which at that time was probably 300 homes, 8,000 apiece, figured out. I don't know. Wow. And I saw these houses like hotcakes. So, but that was a different time

and a different era. You couldn't do that right now. I don't know anybody could do that now, but that's how I did that. But that's what I'm talking about thinking, you know, instead of sitting on your butt going, I can't see how these homes,

what am I going to do? I don't know. Yeah, getting creative. Think outside the box. Yeah. That's really a common theme. And pick up the phone and call people. The 11th commandment I promise is not

that you use an iPhone, and that's not the 11th commandment I've ever read. So, you know, just persevere, go after it, do some work, be honest with people, don't jerk people around. You know, just do what you tell people who do do do. I love that. So, Mike, do you do, did I read somewhere that you do storage units as well? Yes, I don't, I build, right now, building about four or five homes in Dallas anywhere from, oh, a low of a million five to have four million dollars. But I'm not a builder.

I just put money up for them. And I know the buildings I'm best you with. I'm currently building three storage units, two. of them will just finish. I just got a contract. In fact, it's right. Here, for one, we just got finished in April. It's $13.5 million from Cube Smart. All cash. Again, I don't know anything about it. What I like about many warehouse, they can build a mini warehouse in seven months time. We're building the second biggest in the United States out on a major highway here in Dallas right across the new State Farm location. It's got 2,800 units. It's 1100 feet long,

$26,000. Wow. But I don't, I don't know about Bill. I just know the guys who are invested with. I own 30 to 50% of them, depending on what money I put up. So I do that. I take notes. I carry notes for people that can't get qualified. For example, if you call me on the phone, say, listen, Mike, nobody will touch me. I've got bad credit. I was bankrupt. That's what Brandon will say. Yes. So here's my deal to you, Brandon. How old are I? Money with 25 to 35% down. All right. It's 11 to 13% and it's four points. And you're going to have some skin in the game. You're going to put 25, 30, 35% equity in my deal.

Sounds like predatory lending to me. It is. It absolutely is. But it's legal as long as you disclose it. Yep. And if I needed it, I would pay it because I just five as a number of people. I put it into the deal. People that maybe had a hiccup in life, they had declared bankruptcy, you had a foreclosure. It doesn't mean they're bad people. It just means they had something bad

happen to them. So I get enough equity in my property. And I'm not in a business foreclosed. I foreclosed one property in 25 years doing what I'm doing. I currently carry about $18 million with the notes. They pay like a slot machine. But they have real equity in the property. And, you know, as long as I disclosed to them. And Brandi, you probably wouldn't be this, but have somebody call me tomorrow and just say they're looking for hard money loan in Texas. First thing I tell you, you don't want this loan is a bad loan. I'd say it's like having a baby. It's an ugly baby.

If you want, I get your baby. It's going to be ugly. Well, how do you clean up 12% and 4 points is a good deal? You tell me how I'm going to tell somebody that. You're right. It's a great deal for the lender. It is a great deal for the lender. It is.

But I take the risk on them. Yep. You know, where other lenders won't take the risk, because I can tell you the essence of lending, it's loaned a value. I'd rather loan a guy, Rob, 711, living, 50% loaned to value on a piece of property. The only guy that works for American Airlines with 3% down, it could lose his dog tomorrow. And you're under water on that damn property.

Give me a break. Yeah. You know, so I do pure equity lending and the ability to repay it. Well, you know, my very first loan I ever did is when I was 20, 21 years old or maybe 20, 20, like I wanted to buy a house to flip. And I had no money, no credit, no, I mean, I was making $8 an hour. So I went and found a hard money lender. And I paid 10 points.

So 10%, like a fee of 10 points. 10 points and 10% interest. It was a little lower interest, way higher fees. And it was crazy, but I got the deal done. You know, like it was insane. I would never put 10 points today. You know, Texas, before they change your usual laws, when rates were 14 or 15% nationwide, I've actually done FHA loans, but I don't know more it's going to be 17%.

Oh, wow. You know that discount points to make a loan in Texas on FHA were 17 points. Wow. The discount points? FHA was paying 17. points because they couldn't charge more than 10% in Texas until they changed your usual. Oh, wow. And now that the lenders, we're going to make it up in points to make up the yield.

Yeah. Why would you loan money in Texas at 10%? We can loan the money in New Mexico, we're going to 10%. So they made, they charge points to make up the yield spread so they were the same. So I've seen all that sort of thing. And I will say this too for everybody to think, well, God, I'd rather pay 5%. B.S. That's not true. Let me tell you something.

When people were listening, an absolute fact, when rates were 12 to 15%, private was going up 25 to 30% a year all over the country. Now rates are four and a half to five percent. They go up maybe four or five percent all of the country. So would you rather have the property going up? Would you rather pay twice the interest? They have the property triple in value or have a lower interest rate and go up a little bit. It's all relatives, all I'm saying.

That makes sense. So that actually brings up an interesting point. You've been in this game a long time. You've seen a lot of boom and bus cycles going up and down over the years. Oh, I've been involved in me. So where do you feel we are right now? Like where do you see ourselves now and what, you know, like what do you expect for the future? You know, I'm concerned about it.

And trust me, this is not what I've read in a book or anything. It's just my own observation. I personally think the government is spending way too much money. I think that people, that average American doesn't give it to have about it because they hadn't hit them in the butt yet. But it will. All you have to do is look at Greece and Italy and France. What's happened over there?

It's a blueprint of what's going to happen here. You can't keep on spending money. More people are paying no taxes. 50% of the United States doesn't pay any tax now. And they actually get a tax rebate on the earn income. You know, I think the world is so unstable right now all over the world. There's riots everywhere, food shortages, repressive governments, religious battles going all over, a half acre.

I think their immigration around the world is, I think, that there's way too much that stuff going on. I think that the economy is pretty strong, but I don't really trust it a whole lot. I don't know. I think the economy is going to hold for the next two years. I don't know after that. but it just scares me to see the amount of college debt we have. You know, and people don't want to pay it back. It scares me that Congress doesn't have a clue what the hell they're doing.

They don't mind spending. They don't. Yeah, I agree. I mean, they couldn't run a damn thing. They can't run the government. I mean, and it's not just Democrats, Republicans, just all of them. They don't give a damn about the country by opinion. And all they care about is getting reelected, in my opinion.

Preach. Yes, so true. There are some good ones up there. it's like student loans. If you all want to get on something else, I don't believe in student loans. I believe they should make student loans, but not the way they make them.

I think that you, if you're getting a student loan, that, look, let's face it, these college students go to work, go to school 12 to 15 hours a week. It's not exactly a big mode.

So if they want a student loan, here's the deal. You have to make your grades. In other words, if you flunks for one semester, you're not getting your student loan the next semester that you bring your grades up. Second of all,

if you want a loan for, from the government and you're taking 12 hours, you're going to have to do 12 hours with a work either. Get a job, a part-time job for 12 hours. If you can't find a job, you're going down to school, and you're going to go to libraries, you're going to go to hospitals. You're going to go to great schools, high schools, and teach kids out of read.

So if you take 12 hours, you're going to work 12 hours. If you can't find a job, we're going to put you to work. You know, it's funny when I went to college, the average was like 12 to 15 credits people would take per semester. I took 25 to 28 every semester, worked a full-time job 40 hours a week and donated plasma for gas money. Like, because I had to.

It was a good experience. Same thing. I took 15 hours of semester and I worked the whole time through. I went through Monday, Wednesday, and Friday from 8 in the morning until 12. And never spent a day at college. The commuted to North Texas State University. And I had more money in my pocket. I worked and made money and I was a little hustler.

I mean, I loved it. I love the action. But no, I don't think there's any pre-risiness in the world. And I think they're making it too easy for students. to get those loans, they don't ever intend to pay them back. And I think they're burning students unfairly with debt. I think a lot of these students have ever worked a day in life. They have no clue what they're getting.

A lot of them are getting a worthless degrees. Yeah. Yeah, I totally agree. That's my degree is in fashion design. Is it really? You want to talk about the most worthless degree on the planet. Well, it's a good. Mine was in history.

That sounds condescending, but that's not the way of it. No, no, I didn't take it. it that way. There's like nine famous fashion designers and the schools are filled with students and they're getting student loans and they're racking up all this debt and there's no jobs in the fashion industry, not to

be a fashion designer. I don't people tell the kids that. Do the kids even care? That's what I wonder about. I don't know. I think they get this in their head that they're going to be famous and they're going to be amazing. Well, and I think they're hearing, they're hearing from my kids.

Yeah. Well, I think they're hearing from their parents, right? So our parents' generation or, you know, your generation, Mike, like, if you went to college, it usually guaranteed a pretty good job because not many people went to college. So now when I was growing up, my dad's like, you have to go to college. You have no choice. So I went to college, right? But that's different today. Like, I feel like you don't, like, just because you go to college isn't guarantee you a job,

but people are trained, kids are trained that way from their parents who believe that. And so I think it's going to be the next generation that's going to be like, like, I'm not going to tell my daughter to go to college. Like, Rosie, if she wants to go to college, great. You know, her real estate's going to pay for it. I've already bought her a property that'll pay for it. But like, I hope she doesn't in a way. Like I'm like, I hope she comes up with something else instead, like an entrepreneur idea

or something, you know? I don't know. Well, in my particular scenario, I got a marketing degree, but it's worthless what I do. Yeah. I got going to be doing this one. And in fact, I wasted some time. I didn't waste time in college. I wouldn't say that.

But if I had my choice to do it over again, I'd rather spend the time in production. And trust me, you know, I'm successful. But I've had my ups and downs. I've been busted. lots of times in my lifetime. I've always paid the banks back and paid people back. But it takes a lot of luck, a lot of timing, and that sort of thing. But it never bothered me. If I lost whatever money I accumulated, I had to start over again, and that it's had that ability in myself to know I could always make it, no matter what.

I actually think you could open up, say, look, my come up to Colorado and open a stunk on stand. I guarantee it within two weeks time there'd be a line at that damn stunk on stand. I don't know what I'd do to make, but I'd make it work. That's just the way I am. Yep, I agree. I think there's certain, like, people that are going to be successful no matter of it. I don't know. Mike, like, man, we can talk forever, but we're at an hour.

So I'm going to start transitioning us over to the next segment of our show, which we lovingly refer to as our fire round. Fire round. The fire round are questions that our community have asked in the forums. People are asking for help. And so these are just kind of specific questions that we pull from our community. Let's see. How about this one?

I'm new to real estate investing and I'm wanting to be an unseen owner, meaning I'll be working with a real estate team to find and purchase properties. But I want to turn over the management to somebody else. Is it worth it or doing it? Do I have to manage my properties or can I have a company do it? I would say it depends on the individual. I do think management companies have a big place in the managing properties. And they have more facilities that, for example, they have their ability to run credit on people

who don't want to buy it. They handle all the problems. But if I were starting out with new, I don't think I'd let the manager company have because it's too expensive. Most of the managing companies, you want 8 to 10%. Yeah. And it's too much to give up if you're a started now, if you're a newbie in it. If you're a season pro and you can afford it, you got the cash flow, it's okay because

it's a lot of this hassle I can tell you that. But I think if I were starting out, I would probably manage my own properties. And for a couple reasons, not only because I couldn't afford the money to the cost of management. The other reason I'd want to find out what the hell's going on in the real world. It's like I said a while to go. You know, going to boot camp where they're shooting blanks at, you can go into war where they're shooting real bullets is a whole lot different, you know.

I'd rather have the experience of managing two or three properties and then maybe turn them over to manage the company myself. Yep. So a couple of weeks ago, we had a podcast guest who said something like, do it once, do everything at least once. Gabe De Silva from episode 259, 258. Eight, I think. We're on 259. Yeah. Right.

Yes. I think that's a good idea. You know, at least have some experience. And that way, you know, if they're javving you're not javving you, you know, it's not. I like management. I used to have on a big one, but from my perspective, I'd learn from the ground up.

I agree with Mr. De Silva. Okay. Yeah, I do too. Okay, my question for you all is, if there's a way for me to get started with little money to invest, can anyone who has done this give any insight for me? I've read several forms and books on the subject,

however, I am a little apprehensive about getting started with little money invested. I just feel like I would be constantly turned down. How can I combat this feeling? That is a tough question, because generally speaking, you're going to have to put some money in to make money. However, there are other avenues. And one of the things that Brandon and I were talking about earlier is hard money lending

when he got started where he paid 10 points. Yeah. And he may have, he may have not liked it, but it was a way to get started. So a lot of these investment companies are making these hard money loans, charge a higher rate and more points, but they'll do a deal where it's based on the loan of value and based on their pairs you're doing. So you may be able to get in one of those for five or 10%. Brandon, what's it typically the cost to do these days?

I don't know. For, meaning for? predatory lending. Yeah, I mean, I see a lot of like four. No money in it. Correct. Correct? You probably could with the right lender, but most of them I always see they want a little

bit into the game, at least 10%. Yeah, what, 5% or 10%? Yeah. But their lenders here in Dallas, I don't know about Colorado or where you are, Mindy, but they actually will own you 100% if there's enough equity in the property, they think the repairs can be handled. Yeah. And that's the way to get done.

It's an expensive way to go, but it's a way to get started. Yep. And if it's a good way. I'd look to put more money down to have enough money to put it down and we can really start getting better rates of interest because I think people paying predatory lending give predatory lenders to a third to half of their profit is what I think. Yeah. There's been actually, there's been several flips that I've done were at the end of the flip,

I look at it and go, I made less money than my lender did. And I'm like, I'm in the wrong business. That's my, that's my issue. Although I would, that was my only alternative. Yep. You know, I would take it. Yep. You know, I would say 50% of a great deal is still better than 100%.

of no deal, right? I'd rather, I'd rather give somebody else. Yeah, that's why I look at, I look at all that stuff. Yep, and you learn. And Brandon, you learn from it. Yep. Yeah, I don't regret the 10 points I paid on those deals. I mean, like, or on the first couple deals I did because whatever, I learned.

I gained the, like the first few deals, I would say this too, and this sounds bad, but like the first few deals you do don't really matter. Like, you don't want to like lose money on them and go bankrupt. But like, generally speaking, nobody's getting rich off one or two deals. It's the lessons you learn on those early deals that get you to deal number four and five, which gets you to deal number four and five, which gets you to deal 20, which is the deal 100, and that's how you build a lifetime of success is learning.

You know, in all the homes I've ever done in my lifetime, I don't think, and I've done homes up to flip homes, maybe up to a million dollars, I don't think I've ever made more than $100,000 on any home. And even the bigger homes I probably made, if I was lucky to make $50,000, $6,000 on it. There's a lot bigger risk.

There's just not the home runs people think there are, that these books say there are. I don't see them. I mean, my deals were quick end, quick end, out and maybe four or $5,000 a profit. Now we're talking a long time ago. So it would be the equivalent of maybe $10,000 a day or $15,000 a day. But my deal was in and out quick and turn them.

Yep. I'd rather own a McDonald's hamburger stop, a hamburger place that's turning out 5,000 hamburgers a day than own a $12 that's turned out 300 hamburgers a day. The money's where the volume is. And that's kind of always what I believed in. Yeah, that makes sense. Yeah, you know, my average slips are like 15 grand, 20 grand. Like I feel pretty good about any 20 grand.

We interviewed a guy, yeah, last week, he's doing a different, like, he's basically building. He's tearing out the tops, putting on new levels, doubling the square footage. And now he's making 100 grand, but that's a whole different business model. That's, you know, it's basically new construction. You know, that's something we did talk about. If you got the money, that's a good way to start going in a neighborhood that's hot, and find a little home that you get at 1,000 square foot to it. Yeah.

You know, and use it maybe the same footprint and just take it up. Yep. Yeah. I know people are doing that, and they're making more money than flip people. You're right. In certain areas in Dallas, they take these houses and maybe spend $150,000 on remodeling and make $100,000. Yep. That's exactly what the last week's episode was on.

Exactly that. Good money in it. Yeah. I've thought about that, but what you just said is very true. Yeah. Yeah. And I've done that. I live in my flips.

So I'm not paying any taxes on it because I live there for two years. I'm avoiding my capital. What is it? Deferring capital gains? No, yeah. Avoiding. Yeah. Avoiding it.

Ignoring it. Say an FU to the government. Well, no, as long as you live there. two years and you don't make more than $200,000. You're married. You can make up to $500,000 on it. Yep. And I've never made $500,000, but we've made $100,000 a couple of times. Yeah, but see, you can do a $10.31 tax fee exchange on that, too. Not if you're living in it. I'm doing the section 121. No, to be a 1031, you have to have purchased

it with the intention of making it an investment. Oh, look at you, Mindy. And oh, well, but wait a second. Would a live and flip be an investment? I don't know. It's also my primary residence. I don't know. Either way, I think the 120, the 121 is better than the 1031 because then I'm just completely not paying taxes at all. All you do is 1031 is deferring taxes. You're not, you're not avoiding them, you just defer them. Yeah, I'd rather avoid them than defer them. Good point. Yeah, I'm doing my first 1031 right now and it's, uh, it's, it's fun. It's good. I got my properties. Tell Mike how, uh, how far in advance you got that property under contract, Brandy? Like four. You know how they gave you 45 days? I got the, I got my property for.

hours before my deadline. Yeah, they're nominated 45 days. Yeah, nominate, yeah. So I nominated four hours before. I got it under contract four hours before before the deadline. So I made it, but you know, I went down to the way. But did you overpay to make the deadline, though. I did not overpay. I actually think I got a pretty good deal. Yeah. But that's the danger of a 1031 and that's very easy to overpay because you're scared and you're. Yeah, because you're trying to get the money out of the 1031 exchange and you only got. And what do you, they have six days close or nine days closed after the 45 days. Yeah. Yeah, it's a bunch. I think it's, I didn't be 180 days. Total.

I think it's 180 days total. Yeah, I think so. Cool. I don't remember. I've done them for a long time. All right, what's your next question? Number three, I'm scared and I'm in paralysis by analysis. I can't seem to pull the trigger.

What can help me move forward? Load the gun with real bullets. Can you explain? I mean, who the hell can answer a question like that? If you're scared, you don't need to be in this game. It doesn't take a lot of guts. But it takes a little bravery at times and a little leap of faith. And if you're really concerned that much, I'd stay out of it.

I really would. Okay. Yeah. I mean, that's a really good point. Yeah. If you're too afraid to do it, like, they don't do it. There's lots of ways to make money in the world. You know, you're afraid.

You know, it's worth, like if you're worried about everything, eliminate the things to worry you. I don't know what. Look, you probably don't believe this about me with this. If this boss was on fire right now, we'd finish his conversation. We'd have to walk out of it right out here. I totally believe that. Screw it.

I mean, what the hell? You don't strike me as a guy who is afraid very often, Mike. I don't know. Well, I don't, you know, I lose my share. Look, I do a lot of different. I do four or five major deals a month. And I hit on most of them. But the ones I lose on, I can lose a substantial amount of money.

But it doesn't bother me because it's a nature of the beast. So if I played the game, you can't play with scared money. You really can. It's like playing poker or anything you play. with you. If you're playing with scared money, you're scared to lose it. You shouldn't be playing the game. Very good. I've never been scared to do anything in my life.

And I've never gone into a deal that I thought was going to be bad or I wouldn't have gone into it. But I've been in plenty of deals that went bad because I didn't do my homework. I was in bed with crooks or missed the market or just plain stupid. I don't know what you're in the poor, but it was what fall in some of those categories. There you go. All right, Mindy, last one of the fire round. You take it.

Okay, Mike. Are there any rules of thumb you use to determine if you should buy a a property. Well, if it makes sense and you got the money and can get the financing, why wouldn't you buy it? It's got to make sense. How does it make sense? Well, it has to make a profit, either cash flow, appreciation, or flipping the house

and making a profit. Is there a number, is there a number that you want to make this much cash flow or this much profit? Like, is there minimums that you have in your head? On rental, on rental property, no, it's not. I bought some houses that were in better neighborhoods. That actually lost money on rental, but I made it upon appreciation. because I'd rather have a house, it goes up 10 or 12% a year.

And so you pay $300,000 for it, going up $35,000, $40,000 a year. So you hold it and moves, say, $5,000 cash flow, you still got a $75,000 to $80,000 cushion it to sell it. That doesn't mean that's what you're going to make from them because you've got expenses and all that crap. You've got to pay filters. And then from a cash flow point of view, if, again, if I were going purely for cash flow, I'd buy less expensive homes because they rent for a lot more dollars. than you can get for a more expensive homes. But there's what we're talking about the earlier of the show.

You've got to define what your goals are. If your goals are appreciation in retirement, it's one thing you're doing. If they're cash flow, it's another thing you're doing because you're buying a totally different type of property if it's for retirement and getting paid off quick. It's versus cash flow, where you're looking for cash to live on or to reinvest and that sort of thing. That demands. And that's why I say starting out with a goal, if you're an officer investor, is imperative. You sit down and figure out what your goal is.

You can't, for example, You can't go for appreciation. You can't go for rental income. And you can't go for flips all the same time. You need the area of your field, what you're going to specialize in and do it well. I'm not saying you can't do all three of them because I've done all three of them, but it's not easy to do.

So define what you're trying to do in my opinion. I like it. I like it. All right, moving on to the last segment of the show, which we lovingly refer to as our famous four. All right. These are the same four questions. We ask every guest every week.

And we're going to throw them at you. Number one, Mike, what is your favorite real estate related book if you have one? I don't have one. What about your life? I don't have one. Yeah, good. Good, good, I see. Poor dad.

Rich dad, poor dad was a pretty good book. But I don't believe a lot of stuff they say in those books because it's fine in theory. Yep. But it just doesn't work in a practical violence. And you all know that. You got to get out there. You got to get out there and do it. You got to get out there and do it.

So you know what I'm talking about. Yeah, there you go. Cool. Number two. What is your favorite business book? I don't have a clue. I really don't. I don't read those kind of books. I read lovels. I read them for enjoyment. Well, how about this? What's your favorite? What's your favorite? What have been reading lately? Like, what's your, what's your, something that you've read? It could be book or resource magazine, whatever. What do you, what are you been reading? Oh, I like, I like, I like James Patterson. I like Robert Luddham. I like, you know, and I was like that. I'm trying to think of the author. I read a lot of books. What I do is, what I do is I go. I go. I

go to the bookstore every two or three weeks. And I buy bestsellers, novels. And they're generally on sale for $6.99. I buy 15 or 20 of them. And I'll probably read, maybe not every two weeks, but once a month. And I read maybe five, six, seven books a month, eight books. And I read, because I almost any bestseller,

I always buy bestsellers. And they're always pretty good books. If I buy novels, fiction, spy, detective, that sort of thing. Did you read John Grisham's new one, The Rooster Bar? I did. I just got finished with it. Okay, yeah, because that would remind me of the conversation. earlier about student loan.

Yeah, about student loans. Yeah, that was not. There's a lot of, I won't ruin it. It is such a good. I thought those guys were pretty cool. But what I couldn't figure out in that book is why in the hell they paid off their student loans. What's that? She isn't read it.

She doesn't want to hear it. Oh. No, I'll just take off my headphones. That's funny. You guys talk. No, that's kind of book I read in two days' time. Yeah, I did too, actually. It is fun.

Yeah, that was probably my favorite. Stewart Woods books. Which ones? Stuart Woods. Uh-uh. He's good. Tom Fancy's good. Yeah.

Pick up some Stuart Woods books. He writes about the character named Stone Burridge and a Newark Attorney. They're really good books. They're fun, fast, and easy to read. Cool. I'll check it out. All right. Well, good deal.

Next one. Mindy. What are your hobbies, Mike? Playing cards, traveling, spend a time with Mike. What kind of cards? Flagjack and poker. And then I like to play. I used to be a really good bridge player.

I love Pay Bridge, but there's not many people around that can play worth a damn that I know. I'm learning. Are you? I like to travel. I'm learning. It is a tough game. There's a lot of rules. It's the only game I could sit down and pay bridge 24-7 and not ever bet a dime on.

It's the only game I could play without money because it's brain against brain. It's cunning against cunning. Well, Mike, you're going to teach me someday. I'm going to come down to your area where you in Dallas? Yeah, we're going to find some bridge. Either one of y'all. I'd love to. It's awesome.

And where do you travel to? Where's your favorite place in the world to go? My favorite place is China. Oh, never been. I like that. Action. Everybody's on us. Everybody.

I mean, when I was over there, they called me a street pair of delight because I love screwing with those people. I actually, that tells my hat. But I like the hustle. I like the atmosphere of it. I like the fact that they're all working. It's a very clean country. It's, I mean, and you think New York's modern Shanghai,

there's so much new stuff over in China. It's a really cool place. I like Africa. I like Europe. I've never been to a place I wouldn't go back. Let me put it that way. Yeah. I love traveling.

All right. My last question of the day, Mike, what do you believe sets apart the successful investors out there from all those who give up or they fail or this never get started? They never pull the trigger. What separates the successful ones? say one word perseverance, not ever giving up. If you have a setback, just pick yourself up and charge again. Keep on charging because you'll eventually break the barrier. But if you have a bad

experience starting out with, don't let that, because a lot of force in the United States, I would bet more force has been made through real estate than the other thing. I don't know that to be a fact, but I would bet that. So just don't give up. I mean, and this because you get busted once or twice, that doesn't mean you should give up on it. So I'd say perseverance and keep on charging. Very cool, very cool. Well, that's awesome. That's a great answer, Mike. Where can people find out more about you? I don't know.

They can listen to the podcast again. You're not on Twitter. Come on, Mike. Hold on, I've got this. No, just go to Reliancemorge.com in Texas. What is it? Reliance, R-E-L-A-N-C, Moritzcom. Reliance Mortgage. Reliance Mortgage.com.

Right. And I only do. in Texas. Because somebody else mentioned me on a podcast. I was getting calls ball over the country. And I don't mind taking them. You can call me. I'll give you advice in that area.

But I can't make loans in the state of Texas. Okay. Did they know? I primarily in Texas. And according to Cody, you also are Reliance Mortgage on Facebook and Reliance Mortgage on Twitter. Oh, you are on Twitter. Thank you.

Are on Twitter. My kids do that for me. Nice. Nice. My loyal kids. That's awesome. Well, Mike, thank you so much. This has been super, super.

I like y'all's attitude, I will say this. Well, thank you. Because you both know what you're talking about, which is refreshing. Well, Mindy does. I make, I make it up. Yeah, Brandon's only nine. Yeah, well, I don't care. But y'all are very good at what you do.

I appreciate it. Well, thank you, Mike. We'll see you definitely around soon. All right. Merry Christmas, guys. Hey, you too. Okay. Merry Christmas, Mike.

Bye-bye. Bye-bye. All right, big thanks to Mike. That was awesome. Man, I'm glad you, you pushed me to get Mike on the show, Mindy. You've been telling me about them for a while. That was fun. I love Mike. And Tim Shiner sent him our way. I love Tim Shiner too. Tim is just a really great guy. He also introduced us to Josh Randall from episode 242.

Tim is just a little networker, isn't they? Apparently Tim knows everybody. Apparently. Now, that was a good show. I love like just hearing the perspective from people who have not, I mean, like, I'm going to be honest. Like, I've only been investing now for 10 years. Like, that sounds like a long time in my head. But in reality, what have I seen like one up and one down in the market cycle? This guy's probably seen like 20 of them, right? I just, I love that perspective of like the, the big picture of like what real estate looks like over a lifetime, not just, you know, and up and down. Well, and I like the basic information that he gives that, you know, you might not hear because you're trying to do all these new strategies. What did he say? Call them. Keep calling them.

He called that, that woman Evelyn every single Friday. Yep. Perseverance. Yep. His answer to the, to the question, how do you? you, yeah, the famous four. Yeah, what's that's how you do it. That's how you do it.

You just keep pushing through. I love it. Very, very cool. Yeah, and very neat strategy with the calling people. You know, just to give one little quick tip here at the end, quick tip. And I say this a lot of times on these webinars that we do every week where I'll suggest, like go to Craigslist. I mean, like, he's not going to know what Craigslist is, I doubt.

But like if you go to Craigslist and go to the rental section and find some of these houses that are for rent, I mean, the landlords that are like the mom and pop landlords that or listing their properties for rent, like they give you their phone number in the ad. Like, could life get any easier? Like, leads getting easier. And put them in your little, what did it say? Red notebook, yellow notebook, whatever he had. And then every Friday, why don't you call that landlord and just say, hey, just

want to know if you're interested in selling it yet, right? Build or even if you didn't do it every week. What if you did it every month? What if you just built relationships? I mean, if you had 100, think of this way, if you had 100 people on your list that were landlords in your area, how many of them every year might want to sell their property? Maybe 10%, maybe 20%, maybe 20%, right? Like people sell all the time. So if you're the guy that consistently month after month

contacts those people, you know, you're going to be the guy that go with you because you're going to build relationships. They're going to want to sell to you because you've been persistent. So anyway, a little quick tip there. And did you, did you hear him say it doesn't cause cancer to pick up the phone and call them? It could actually with cell phones, but, you know. Not on his cell phone. Yeah, not on his phone. Yeah. He's got like the old like rotary on the walls like spinning the dial around. Yes. With the giant cord. Yes. I remember.

I know some of my earliest memories when my mom, like, taking like the 90 foot cord through like every room of the house, you know, like to get away from the kids yelling. Yeah. Anyway.

All right. Let's get out of here, Mindy. Okay. Brandon, thanks for letting me step into Josh's shoes. I appreciate it. Should be fun. We should have Josh.

It was fun. And we should have Josh back next week. I think so. Yes. We will have Josh back next week. Good. All right. Well,

thank you guys so much for being a part of the Bigger Pockets podcast this week and listening to us ramble for an hour and a half with a really, really smart old investor. Don't tell them to my side of that. Happy New Year, Brandon. All right, happy New Year, Mindy. And happy New Year, everybody. Thanks so much. And don't forget to rate and review us and listen to Mindy and Scott's new Bigger Pockets Money podcast. See you next week. Okay, this is Mindy Jensen signing off. Is that what Brandon says? Or Josh? That's what Josh says. Wait, were you? You're listening to Bigger Pockets Radio. Simplifying real estate for investors,

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. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoe content,

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