BiggerPockets Real Estate Podcast - 290: 7 Paths to Financial Independence with Brandon & David PLUS Josh Dorkin Tells Us Where He’s Been!

Episode Date: August 2, 2018

Are you ready to get really excited about the life possible through real estate? This show will go down in BP history as one of the foundational episodes: Brandon Turner and David Greene dive deep into seven unique and powerful strategies for building a real estate business that can fill your life with cash—not work. You’ll love the humor, the stories, the lessons, and the tips throughout! This episode is one you’ll come back to time and time again. Plus — as an added bonus — Josh Dorkin comes back to the BiggerPockets Podcast to explain where he’s been and what the future of the BiggerPockets Podcast will look like! Don’t miss a moment of this powerful show! In This Episode We Cover: Cashflow through rental properties What a turnkey property is and who it’s for BRRR Strategy Challenges with BRRR investing Note investing, lending, syndication, & crowdfunding The scale of passivity The first question David asks to people who want to do business with him House flipping Ways to become a CEO of a flipping business Multifamily investing Buying one house a year The Stack And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar BiggerPockets Podcast 014 : Cash Flow, Creative Finance, and Life with Ben Leybovich BiggerPockets Podcast 279: How to Find Overlooked Opportunities in a Hot Market with Andrew Cushman BiggerPockets Podcast 226: From “D-Student” to $400,000 in Annual Rental Property Cash Flow with David Osborn BiggerPockets Podcast 113: Becoming a Millionaire Real Estate Investor Using The One Thing with Jay Papasan BiggerPockets Podcast 048: Duplex Investing, Finding Great Properties, and Tips for Managing Tenants with Darren Sager BiggerPockets Podcast 234: Tenants, Evictions, & The Dark Side of No Money Down with Ryan Murdock 7 Powerful Benefits To Mobile Home Park Investing How to Build Your Real Estate Portfolio Faster Using “The Stack” (blog) BiggerPockets Money Podcast BiggerPockets Podcast 283: 18 Houses in the First 18 Months with Paul Thompson Books Mentioned in this Show Real Estate Note Investing by Dave Van Horn The ONE Thing by Gary Keller and Jay Papansan So Good They Can’t Ignore You by Cal Newport Raising Private Capital by Matt Faircloth Own the Day, Own Your Life by Aubrey Marcus 59 Seconds by Richard Wiseman The Big Leap by Gay Hendricks High Performance Habits by Brendon Burchard Tweetable Topics: “The goal is to buy a house as cheaply as you possibly can and make it worth as much as you possibly can.” (Tweet This!) “With every hire you make, your business should make more money.” (Tweet This!) Connect with Brandon and David Brandon’s Instagram David’s Instagram Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast. Show! I don't, but wait, what? You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others

who have benefited from BiggerPockets.com. Your home for real estate investing online. What's going on, everyone? This is Josh Dorkin, the former host of the Bigger Pockets podcast here with my former co-host, Mr. Brandon Turner. What's going on, Brandon? Apparently quite a bit based on that introduction. Yeah, man. Well, you know, for those of you guys who don't know me, my name is Josh Dorkin. They don't care. They don't care. Moving on. So today's guest, really? I mean, like, I have literally been gone for six months. And this is how you treat. me. You know, it's love. This is what people come to expect of you, Brandon. Lots of disrespect. Anyway, what's up? So you, you're joining us for the first time in six months. I want to hear what's up.

Do you care? Obviously not. I do. I know where you've been, but I don't think anyone else does. So we want to, we want to hear your story. Yeah. Well, you know, I'm sure everyone else wants to hear my story. You could care less. You care about one thing and one thing only you. Charlie, my size of your. My dog. My beard. My beard is growing. It is like sexually long. That thing is disgusting. It's like a dead animal just glued up here. Oh, my God. I can't believe how truly repulsive it has become. Were you like sitting Shiva for me and letting the beard grow? Is that what's happening here? Pretty much. That's what I've been working on. I know you don't understand the reference, but it's okay. You know, whatever. I'm, I'm okay with that. In mourning. Anyway, anyway. So listen, guys, before we let you listen to today's show, I've got a big announcement to make where, you know, everybody wants to know where I've been for the past six months and what the future, what the future looks like for the bigger pocket's podcast. We get some sound effects. They're like futuristic.

Choochoochoo, chew. Yes, yes. And then we'd have to pay royalties to somebody. Damn. All right. So for those of you guys who don't know who I am. I am the founder and CEO of Bigger Pockets. I was host of the first 250 or so episodes.

You know, I only did, what, five plus years of the show. So, you know, it's all good. Very few exceptions to the rule there. And then last fall, something happened and I disappeared for a while. And I'm sure a lot of you guys were wondering what on earth happened. So here's the deal. So my daughter had eye surgery. and the surgery resulted in some very, very serious and major complications that through everything in my life and my family's life upside down, she's been recovering ever since, and the Bigger Pockets audience has been just amazingly supportive.

So I do want to thank them. But it's been really, really hard on the family. We've gone through some truly, truly terrible things. and Brandon and the folks at BP have been there for us and had our back and our close friends have. And, you know, I just really didn't think it was anyone's business what we were going through. And that's why we just kind of shut down and went private, basically. So good news is she's doing amazing. She's doing amazing. And I know you, Brandon, you've kind of been with us for the ride and have seen the progress. And it's nothing short of a miracle, I think.

Yeah, definitely. She's doing awesome. Yeah. So, you know, and we're all doing considerably better. I mean, and I'm pretty traumatized. You know, my wife is pretty traumatized. But, you know, at the end of the day, that's really the power of financial freedom. When the crap hit the fan, I was able to stop everything in my life and be there for the single most important thing in my life. And that is my family. And, you know, that's one of our core values of bigger pockets, right? His family above all else. And for me, it's just so, so important. And, you know, I will say, you know, we went through some grief through the process.

And, you know, the power of financial freedom, I got to tell you, if I was not in the position that I'm in, I don't think I would have been able to say to you, Brandon, that, like, you know, isn't it great how well things are going? because most families, most people can't do that. They can't just stop work. They can't step away for six months from their job and focus on those things. And so I really, I am grateful. I am truly grateful that I am in the position that I'm in and that has allowed us to step in and be there for my family.

Because, again, I mean, we had to pull some strings and do some things that I think the average folks may not have been able to do. So. Yeah. Yeah, you know, I think people oftentimes think of financial freedom as like people want to get rich that they can go and swim in a, you know, gold coins like Scrooge McDuck. But like, that's what you do, doesn't it? Pretty much. I have a lot of gold coins that I jump in. But like, this is really what it's about, right? It's like things do happen in life all the time that you have no control over. So having financial freedom says, hey, I'm going to, you know, weather those storms and not have to worry about showing up. And, and,

hour commute to work and, you know, having a boss yell at me because I'm not there because I'm at home with my family. Like, yeah, and I think that perfectly demonstrates it. So, yeah. So those of you guys who've thought about it or wondering about like, hey, you know, financial freedom, you know, like, is it really worth it? Yeah, it's worth it. Trust me. Like, I mean, being able to, to do that is incredible. And now, like, no, I don't have a bathtub of gold coins. That would be really, really nice. I need to borrow some of yours, Brandon. Yeah. You can have a couple. You know, it just. means that you have options, right? You have the ability to step back, step away, you know, while

some of these passive sources and other things that you've put together are generating income for you. Yeah. Including like a business or real estate and other things like that. So, anyway, in the process of all this that's been going on, we had other people step in on the podcast. And I got to say, you know, I'm one who is not willing, not unwilling to, be critical of myself. And, you know, I know what I good at. I know what I'm, yeah, most things, but, you know, I didn't say it. You said it.

You know, I think you and I have had a pretty amazing run here. But I do have to say one of these folks has really had a great report with you. And it's been totally natural, man. Yeah, I'm assuming you're talking about Mr. David Green. I don't know who that is. Talking about somebody else. Yes. Who I don't know. Yes. No, David. Yeah, yeah, yeah, David Green, man. I remember the first time he, I don't know, man. I mean, we... You guys met over a hatred of San Francisco, I believe. We totally, like, just got into it, right? And it was awesome, man. I mean, I like the guy and he hates you. And so what more do we need is a host who can really, like, go.

head to head with you. There you go. You know, David, David has really, like, stepped up. People are really, really liking him quite a bit. So, you know, yeah. Good job to let him out. Yeah. Yeah, we've had it. Look, we've had a ton of positive feedback about him and you, the rapport. So I'm doing something. I don't know if you're prepared for this. Prepared. I don't know if you even know what we're doing here, but I wanted to make a special announcement. You're getting married. Oh, my gosh. Congratulations. His second marriage, baby. I got two.

No, Julie, I love you. You're my only. No. As of today, and as of today, as of today, today. I'm officially going to be stepping down as host of the Bigger Pockets podcast. And I am going to be anointing. I don't know. Do I get to anoint?

I feel like the current president. Oh, I anoint myself. I anoint. Maybe. Maybe a point. Is that a better word than anoint? I like anoint. I appointee.

No. And anyway, I am going to anoint you, Brandon, as the new official host of the Bigger Pockets podcast with David Green as your co-host. So, yeah, I mean, you know, we've always had this weird thing, right? I mean, like, you know, Scott was the host and David Meyer was the host. him and he was a host and Brandon's always like, I'm, who we can host?

You know? It's ridiculous. Why? Because you like to be the Andy Richter to Conan? I mean, no, I'm the Al Borland to your Tim Taylor. That's what it's been, right? Which is funny.

Did you see the text of that picture? Yeah, somebody found a picture. I don't, somebody sent it to me. And it was a picture of Tim Allen and the guy who plays Alborlin on tool, you know, our home improvement back in the day.

Yeah, standing next to each other in the same stance that you. You and I were saying together wearing almost the same outfit. It was fantastic. Anyway. Anyway, anyway. Anyway, so, yeah, man, I, I, I'm honored to be here speaking to the host of the Bigger Pockets podcast, Brandon Turner. And I want all you guys to jump on Twitter and congratulate Brandon.

Jump on the show notes for this show, whatever show we append this to and congratulate him. He deserves it. He's amazing. And, you know, I mean, I don't. know that I've known a lot of folks who are as great a teacher as you are. And I'm super proud, man. I really am. And I think the show is going to really truly flourish with you and David. And I'm super excited about it. And look, I mean, at the end of the day, the reason behind this is so that the show gets the attention that it needs. There's no like, oh, when's just going to come

back, you know, which I know has been like this underpinning, this rumbling, right? And I can continue to give my daughter and my family the dedication and the focus that we need, you know, to kind of get through the rest of this mess that we've kind of been through. And you guys can continue the tradition of, you know, beating the crap out of each other over the airwaves. Well, that is super, super cool. Thank you. I don't even know what to say. Thank you.

So we are. Thank you. Thank you. Say it again. Thank you. Because you never, you never, you never say that to me. So, you know. Thank you, Josh Dorkin for everything you've done for me.

All right, all right, all right. All right. You talk too much already, man. So let's get on to this week's show, which I know you and Dave already recorded. We did. We did because, you know, we're over here working while you're, you know, playing mini golf. How was that one thing? You know, taking care of family, whatever.

Same thing. Yeah. Well, you are welcome to come back anytime. obviously we'll keep your seat warm for you. It's still my show. It's still your show. You still own this show. You know,

we're just, we're going to keep this nice bench warm for you. Oh, man. Thank you. Thank you. I really appreciate it. And, you know,

thank you to all the listeners. Thank you guys for all the support. I'm sure there might be, you know, a few folks reaching out, you know, curious, you know,

we, we choose to keep private, you know, what, all the details that we've kind of, been through and hope everyone will respect that. And I'll be popping in, popping in and out once in a blue moon. So, you know, maybe one of these days will, uh, we'll chat again. Because you know what, you know, there's a serious lack of Detroit jokes since you've, uh, stepped away. Come on. Come on. Really?

You know, would you ever in a million years live in that hole? I mean, come on. I would not. I'm sure people love it. People love Detroit. It's, I miss Detroit. I love Detroit. I love. I love Detroit. I love. of Detroit and I miss all you guys. And so thank you everybody. Thank you, Brandon. Thank you, David. You really have been stellar and I really appreciate it. And thanks to the Bigger Pockets community. Peace out, y'all. What's going on, everyone? This is Brandon Turner host of today's Bigger Pockets podcast and the apparently now the permanent host of the Bigger Pockets podcast here with the new newly appointed, newly anointed, I don't know, co-host of the Bigger Pockets podcast, you all know him anyway, Mr. David Green.

What's going on? I like that image of being anointed. I pictured like kneeling in front of Josh as he takes his sword and he crosses it on each of my shoulders and gives me my oath. That's awesome. That's pretty much exactly what just happened. So congrats, welcome. I'm glad we made this a permanent thing.

You know, we've been talking about this for months. and you know Josh is in family mode hanging out with the family and the kids and all that. And so I'm glad that you could kind of keep a seat warm for these months. And people really liked it. I mean, almost every day we get emails from people saying David Green's the man. So way to be the man. I appreciate that. And I appreciate you dubbing me with that nickname as well.

If you like this podcast, keep an eye on it because it is going to get good. Brandon and I are absolutely committed to making this the best podcast on iTunes. We are. We want your feedback. We're going, I mean, today's show, we haven't recorded it yet, but it is going to blow you guys away. I guarantee that you're going to listen to this and feel like you were just at the front row of your favorite rock band. And you got like your socks blown off by how much information we're going to give you guys. That is true.

So with that, let's get to it. We got seven things to talk about today. But before we hit all seven, let's get to today's quick tip. So today's quick tip is brought to you by David the man green. What you got? Today's quick tip is stop thinking. that there is only one way to invest in real estate. There is not. Real estate is an asset class and what makes it so cool is there are so many ways to combine the benefits that real estate investing

brings that just about anybody can make money. So Brian and I are going to go over tons of strategies that would allow you to retire earlier or achieve financial independence through real estate. In my opinion, you need to be spending just as much time thinking about what strategy works for you as you are looking for that deal that you're probably not going to buy because you're not ready anyways. So as you listen to this thing, absolutely commit yourself to thinking that would work for me. I would do that. That I'm comfortable with that. It would work for my skill set. It would work for my risk tolerance. It would work for my personality. I could be good at that and then come up with a plan to make that happen. Start working on that plan and you'll find that

once you start that journey, you'll make some corrections along the way, but you'll be making progress. You're going to fall in love with this. So this is not a one-size-fits-all way of building wealth and building cash. There are a ton of ways to do this. Branden and I talk about real estate all the time, but we've used two completely different strategies to do what we're doing. But the principles are the same regardless of how we're executing them. So learn the principles, learn the strategies, learn the techniques, and then combine them. I always say it's kind of like taking all these different ingredients. The ingredients are the same, but you can make a different kind of cake. You can make your own kind of food that you like this according to your taste.

So that is my tip for today. Take that to heart. Talk to people about it and get some progress being made. Nice. Speaking of cake last night, I was at my birthday party. So my birthday was, you know, recording this here in July. So it was just on July 9th. And my birthday party with my in-laws, I went to their house last night. And my mother-in-law made me a cake. Get this cake. Okay. It was a 12-inch round chocolate chip cookie that was like an inch thick, amazing chocolate cookie with then like an entire pint of cookie-to ice cream smeared on top. Then another cookie, then another pint of mint chocolate chip ice cream. my second favorite ice cream with another cookie topped with a cookie and cream ice cream

with another cookie covered in chocolate. And that was my birthday cake. That was the best thing I've ever had. Did they call it the diabetic delight? No, but that is the new name for it. So anyway, that sounds awesome. That was, it was really good. I'm still recovering. Great job. Anyway, for decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Funrise flagship fund. Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio

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Today's show is actually titled or I guess focused on seven different ways that you can achieve financial freedom or financial independence through real estate. So we're going to go through like this way might work, this way might work, this one, and we go through all that. Later on the show, we also do our new segment called the Deep Dive, where actually we go into, we're going to talk about my deal that I recently did. A lot of you know I was looking for a mobile home park for a long time. I ended up buying one. We're going to talk all about that, go really deep into that. And then we're going to do some fire round and famous four and get out of here. So we got a jam-pack show for today.

So without further ado, let's get to it. Seven ways to achieve financial independence through real estate. Number one, Mr. David Green. Would you like to, you want to take the first one? You want me to take it. No, you start. You're on a good role here. All right, I'm on a good role.

Number one is just plain old, and I don't want to make this sound bad, but plain old cash flow through rental properties, right? We all generally know what that means. You buy some rental properties, maybe like smaller. Most people start smaller. They buy a single family house and it gives you a little bit of cash flow. So I actually used, when I got started, this was all I knew. All I thought was cash flow rentals.

And I really made a very simple formula. I said, hey, if I can get $100 per month, $100 per month per unit that I owned, then I can kind of work back. to find out how much, you know, I need to retire. And that $100 was like after paying out everything, including future everything, right? So like, you know, setting aside money for repairs and vacancy and capital expenditures and all those things, utilities, mortgage. If I could just have a hundred bucks and I could go spend on whatever I wanted from each unit, then I was like, well, how much do I really need? And at the time, it was like, well, I want three grand a month to retire. So I went

out there and it took me like three, four, five, six years, somewhere in there. And I'm trying to think of how old I was. Yeah, I think it was 27. So it took me like six and a half, seven years. And I got 30 units. And I was like, all right, I quit. And I got done. Like financial independence just through these single families and then small little multifamily properties. So yeah, cash flow through rentals. And then you want to add to that? Well, what I love about this is that while it's probably not the fastest way to grow your wealth, it is maybe the easiest with the slowest pace. And it allows you the opportunity to learn the most as you go, right? Most of us don't want to jump on a treadmill that's already running and try to get up to speed really quick.

You want to start slow, start walking, then start jogging, then start running. And then as you get comfortable, you kind of control the pace you go. And cash flow through rental properties really lets you do that. You buy your first one, it's terrifying. Then you buy your next one. It's a lot less scary. Then you buy your third one. It's exciting.

Then you buy your fourth one. And it's starting to be like, I got this. By the seventh one, it's kind of mundane. And you can actually like build systems to make your portfolio bigger without you having to do all the work. You can build a network of people to find deals for you. Then once you have enough properties with the number, enough cash flow, you can hire an acquisition manager to find new properties for you. That's where I am

right now. Our friend Derek is actually out there looking at properties that other agents are sending me, analyzing them, and then bringing the deals to me that he thinks that I should buy. Then he's managing the rehab. He's getting all this like the lights turned on, the electricity, put in my name. He's negotiating with the contractors for me and he's making sure everything gets done. I have the knowledge. I just need to pass that on to someone else. I don't need to be doing the work. If you get really good at this and you grow a big enough portfolio, you can start your own property management company or your own construction company and you can make money on the side by having other investors use the people that you've created through your own business, and you can make money

through the companies as well as your own portfolio of real estate. Now, this way is probably the slowest to get started, but it's like the easiest way that I would say. And that's why most people like Brandon and I both start with this method. Yeah. And, you know, it's for a lot of people, you can simply start by taking the house you live in, moving to a new house and turn that one into a rental. I was, I don't know, we should actually do a survey at some point, but like, I wonder how many people begin that way. It's probably the vast majority. Yeah, I would agree. I'd move for whatever reason. You turn it into a rental.

And the great part of that, you don't have to get a new mortgage. You just get a new house. And hey, that's a good way to sell it to your spouse too, right? Like, hey, honey, let's move to a nicer house. We'll just turn this into a rental. And like one more thing I want to touch on before we move on to the next strategy. Number two is something David and I talk a lot about. The first deal, yes, you should not buy a bad deal.

None of us are saying we should buy a bad deal. But the first deal is not going to give you financial freedom, right? The point of the first deal is to get the knowledge and experience that you need to be able to do more deals. And so, like, I just recommend, like, go do something. Like, that first one is likely going to be your hardest one because it's scary to get over that hump of I'm going to actually be a real estate investor. So my encouragement would tell y'all would be all y'all would be to go out there and just get something done. If that means moving to a new place, if that means just buying a simple little property, even buying a turnkey company from across the world, whatever. Actually, on turnkey, David, what do you think of turnkey?

I want to know your opinion on it. I'm not a fan. First of all, what is it? What is it? And then give you your opinion. Buying a turnkey property is buying a house where all the work has already been done. And you don't have to do anything. The appeal is that it doesn't take your time and it doesn't take you learning. And it doesn't have all the scary emotions to go with doing something new and screwing up at it.

It's akin in my mind to going to 7-Eleven and buying a soda that's already been like someone else bought it. Someone else took out the packaging. Somebody else made it cold. You walk in. It's super convenient. You grab it off. the shelf, but you're going to pay $3 for it, as opposed to going to Costco where you have to drive across town, buy it in bulk, bring it back to your house, put it in your fridge, remember to

grab it when you leave the house. But it's going to be way cheaper. You might get a 12-pack for that same $3. In my opinion, Turnkey is, it's a viable business model for the right person, which is someone who has so much cash, it does not make sense for them to learn how to invest in real estate because they're doing so well with something else. They can make more money per hour doing whatever they do, and they just need somewhere to invest it so they dump it in Turnkey, right? My problem is if you're listening to my voice right now, that is not you because you wouldn't be listening to this podcast or learning how to invest in real estate if you were making that much money, right? So what happens is, you might be. I guess it's possible.

But for the most part, you would have to learn how to invest if you could already make so much money doing something else. And what happens is rather than extremely wealthy people investing in turnkey, it becomes extremely scared people investing in turnkey. So they say, I don't want to make a mistake. I want to do turnkey on my first property. But you don't learn anything about investing other than managing a property. That's the only part you're learning. And that's really the easiest part because somebody else. should be doing that for you, especially if it's out of state.

So I'm not against Turnkey as a general rule. I am against it for the majority of people on bigger pockets because you're here to build your wealth, not to build this Turnkey company's wealth. Yeah, that makes sense. I think I'm a little bit friendlier towards it maybe in that, you know, my biggest objection to Turnkey is I don't like a lot of turnkey companies numbers.

When I look at their pro formas or their analysis, they're like, don't worry about vacancy. We never have a problem with that. You know, like, every property goes vacant once in a row. Don't worry about repairs. We already fix the property. Yeah. Well, yeah, but you're still renting to probably lower middle class people who are going to punch a hole in the door because every lower middle class person punches a hole in those hollow core doors all the time. Like, that stuff still happens all the time. So like when I look at a turnkey company and they don't have anything allocated in their numbers for repairs, vacancy, maintenance, CAPX, anything like that.

And then the deal barely like produces like a 5% or 7% return. I'm like, you're going to lose money on that deal. So my problem or my recommendation is if you want to do turnkey, I'm okay with it. Do your own math. Nobody else should do your math because like you said, you are in charge of your own financial freedom, your own financial future too. So do your own math. If it makes sense, you know, learn how to evaluate the deal. And don't treat it like an easy way to get involved in real estate.

Just treat it like it's one deal, one way to find deals. This turnkey company is a way to find deals. Run the numbers the same way as if you got a call from somebody, you know, some motivated seller looking to sell this afternoon because they needed money for their, you know, whatever. So that would be my only recommendation for turnkey is treat it like a normal investment. Don't think of it as a get rich quick thing. That's good.

Very wise. Thank you. That's why they call me Brandon, wise guy. That's why they call you Brandon, Gandalf Turner. Gandalf the Wise. Gandalf the Wise. All right, moving on. Let's go on to number two.

This is a, I know a favorite of yours. So why don't you cover this? I, the way, I invented the term. You invented it, but I perfected it. Really. I mean, if it wasn't for me, it was. would have, it would still be in its infancy. Yes, you matured it.

And you have a book that, I don't know if we can talk about that, but you have a book coming out on this topic next year. Which makes me, not you, the expert to talk about this strategy. That's true. You are now the expert. Anyway, what is the strategy? What's number two? The burr strategy, buy rehab, rent, refinance, and repeat.

This is my favorite way to buy real estate. It is Brandon's favorite way to buy real estate. In fact, it is the most efficient and best way to buy real estate. and the genius of Brandon actually came up with this term that we used to describe it. But lots of people have been doing this for a very long time. In fact, you actually got a Christmas gift from Bigger Pockets. It's a sweater that says burr on it, which is kind of funny. So the beauty of burr is that it makes you're investing so much more efficient than when you're just putting a down payment on a property.

Now, this was that happened in my own life is I would work like an animal 90 hours a week, 100 hours a week, sleeping in my car. My health suffered. I wanted real estate investing success so bad I sacrificed everything on the altar of it. And I could buy two houses a year, right? I'd have to put 40 grand as a down payment. And then I'd have to go spend 30 grand on the rehab. And I'd spend 70 grand on this house that was worth a whole lot more than I paid for it. But my equity was where my value was. The money that I made was sitting in equity in the property. Then I had to go save another 70 grand and buy another house. And it was just painstakingly slow trying to do this. And you never get that good at something that you don't do all

the time. Right. We can agree. Repetition is what creates. mastery. Bruce Lee is known for having this quote that I don't fear the man that knows 10,000 kicks. I fear the man that has practiced one kick 10,000 times. That's what makes you a master at something. And we want to be master real estate investors. Well, once I learned how to burr, I went from buying two houses a year to two houses a month because I could buy a house, fix it up, make it worth more, then refinance it. And instead of leaving my value in the house as equity, I would pull it out as cash. And cash has a higher value than equity does because you can use it to go earn more money. Now, this is when I became a

really good investor. I started getting better deals because agents were sending them to be first because I was always closing. I got better deals for my contractors because I'm doing way more business than the next person. I essentially became a turnkey provider. But instead of selling it to other people, I was keeping it for myself and growing my own net worth. Now, there's a lot to talk about when it comes to this. The thing that I love the most is that most of the money that I make by adding to my net worth comes from buying a fixer-upper property, making it worth more than what I spent on it, and getting that money back. So on my average deals, not my good ones, I'm adding about $25,000 to $30,000 in equity.

And some deals, I'm adding $50,000 to $60,000. If I'm just doing that twice a month, that I'm adding $25,000 on the low end, I'm adding $50,000 to my net worth with the same dollar that I keep spending over and over and over. Yeah, I love the birth strategy, but can you go through like an example? What does that look like? It was like a, maybe not hypothetical, but like a deal you recently did or something, would you buy it for? Totally. Would you put into it?

Yeah. Okay, walk through the birth. First off, you have to understand the goal of Burr is to buy a house as cheaply as you possibly can and make it worth as much as you possibly can. And then recover as much of your capital as you possibly can to go reinvest again, right? It is all about chasing efficiency. So Brandon and I on a lot of these shows, we talk about strategies, tips, techniques, ways that you can add value to a property, right? So what I'll do is I'll go look for a property that is in the worst shape it can be in, whether it's that

physical aspect of it, the tenant in it is causing problems, the owner needs to get rid of it. There's something about this property that's not desirable, and I will buy it as cheaply as I can because it has problems. Oftentimes it needs a rehab. They're usually fixed for upper properties. Maybe it only has one bathroom. Maybe it only has two bedrooms. Maybe it's on a huge lot with a tiny little house, right? Maybe it's the smallest house and the ugliest house in a really good neighborhood. Whatever it is, I then apply all the strategies that we talk about on bigger pockets to make it worth more. I add bedrooms. I add bathrooms. I take the roof off and put a new roof on. I had a new air conditioner.

I rehab the place. If it's possible to, I extend the house out and make it bigger. I buy a 900 square foot house and I make it a 1600 square foot house. Now, most people don't want to do that because you're just dumping 20, 30 grand into this property that you're never going to get back out. But when you burr, you can pull your money back out of the deal after you made the house worth more and you increased the rent. So on a typical deal, I'm looking for a house that's going to be worth about 120 grand when I'm done. That's the ARV, the after repair value. and I want to be able to be all in for 75% of whatever that ARV is.

So in this case, that would be 90 grand. So if I can buy it for 60 and add 30 on the rehab, that puts me all in for 90. And if it's worth 120, I'll get all that money back when I go refinance it. If I have to spend 70 for the house, well, that means I can only spend 20 on the rehab. If I get the house for 50, well, then I have 40 grand I can spend on the rehab. And if I don't need to spend that much money, I'm going to get more money back when I actually refinance it than when I put in. There is not a better feeling than having a house that is, is completely rehab with a new roof, new air conditioner, new everything,

not likely to need any repairs or any capex for a long time, that cash flows and you got paid to own it. Someone gave you $10 or $15,000 more than what you spent, that you can then go put into your next deal. And that's kind of where you like steamroll your income or your net worth. Now, the secret is you can't go buy a turnkey property and do this because you're very, rarely ever going to get a good enough deal, right? You've got to find something you can add value to. You got to find that 1,200 square foot house that only has two bedrooms and you know I can take a dining room, a utility room, a living room, a carport, something, and turn that into a third or a fourth bedroom. I can add another bathroom to this house. Or ideally, like you buy a two one,

you add a master suite to it. You increase the square footage by four or five hundred hundred square feet. You add a, you turn it into a three two instead of a two one. And the appraiser comes in says, oh man, instead of comping to these 50, 60,000 dollar properties, now you're comping to these hundred thousand dollar properties because you have this extra space. So I love it because it allows me to take every single trick of the trade that I've learned in real estate, make a house worth more than what it should. So I'm getting equity and pull my money back out when I've done so I can go reinvest that later. Yeah. So what are some of the challenges that we have with Burr investing? I mean, obviously you've got to be able to afford to buy the house in the first place. Any tricks on

Yeah. The biggest challenge I found for most people is that they like the idea of buying a house to the down payment because they don't need as much cash. It's easier to save 20, 30 grand and go put as a down payment on a property, spend 10 grand to fix it up. And now you're out of money, but you have your house, right? That's the problem, though, is, Once you finally get good at investing in real estate is when you're out of capital and now you can't really do much. So a big challenge is if you're going to use your own money, you got to save your own money and it takes longer. Another challenge would be if you don't want to use your own money, you have to find a partner or you have to take out a hard money loan. The deal usually has to be better to make this work.

You got to work a little harder to get more meat on the bone because you're putting all this cash in up front. And if you need a hard money loan to do it, you're going to be charged money on that. So you have to have the house has to be worth it to have all these extra costs that are going to be thrown on there. You're also just, you're probably buying a fixer upper property. That's usually why you're getting such a good deal in it. Now, not all the time. Sometimes I find it from a wholesaler and it's in great condition. That's awesome.

But oftentimes that's not the case. So you got to get comfortable running your rehab. You got to get comfortable estimating rehab costs. You're going to have to do a little bit more work. You got to go to Costco and buy that pack of soda and haul it off to your car and drive it all the way back. And I tease Brandon because he is moving to Hawaii and they go to Costco all the time. Like that's the best place to go shopping.

But you got to drive across the freaking island to get all the way over there, right? You got to do more work, but it's totally worth it in the end. There you go. I love it. Yeah. And what's cool also is you can burr. You don't have to just burr. I mean, it's easier probably if you live next door to the house, but you burr across

the country. You live in the San Francisco area, the Bay Area, and you're burying in Florida, right? Like you can't get much further away than that, unless, of course, you're in Hawaii trying to burr in, you know, tried to burr in Maine, which in Ohio, which I'm doing. Well, when people ask me, like, what's your ROI? I'll often say, oh, I'm at like 75% ROI. And they're like, there's no way. Nobody gets 75%. That's a lie, right? And I would think the same thing. But when you think about the fact that if you thought the ARV would be 120 and you're all in for 90 and you thought you're going to get back 100% of your money. But your ARV comes in at 110. So you're off by like 10 or 12%. That's a pretty big mistake. You're going to leave a little bit of money in the deal. But you're still cash flowing a couple hundred bucks. So if you're only leaving five or $10,000 in a deal that's making you four or $500 a month, your ROI is incredibly high. And it forces your money to work harder for you. That's why I'm writing the book, that's why I'm very excited about this topic because I feel like this is where

investors should be aiming to get to. It's not just I want to buy a house a two or three and then I can say I have a couple doors, right? It's I want to grow my net worth exponentially and I want to grow my cash flow. I want to use the same dollar over and over and over to continue getting good at investing. And my belief is if you master the five elements of burr buying, rehabbing, renting, refinancing, and repeating, you will become what I call a black belt real estate investor. If you can master those five elements, you have mastered investing. And one last final note, like, Burr investing is also cool because it's not just single family houses. I mean, this is like, really like we're borrowing the technique that most apartment complex owners do when they call it repositioning.

Like they buy an apartment complex and then they fix it up and then they go refinance it so they can pay off all their investors and now they own this property and they can go do it again and again and again. It's like this is a completely scalable model. If you want to do it with single family, great. Multifamily, great. Large multi, great. Commercial, industrial. It really kind of works across the board in a lot of ways. Great point. Yeah.

Bird investing, very cool business model. But anyway, on this, I actually talk about how a person could. I mean, let's just use some real hypothetical numbers. You buy a property, like David said, for 60, you put 30 into it. And again, if that doesn't make sense to you those numbers because you live in San Francisco at a zero on, makes you feel better. But anyway, it's percentage-based. So, okay, you buy it for 60.

You put in 30. You're at 90, and it's worth 120. You basically have $30,000 of equity at this point. Let's just say that over the next, you hold it for five years, right? So over those five years, it's now worth not 120. Let's say it's worth 140, all right? So, but you don't owe 90 on it anymore. That's what your mortgage was.

You paid off a little bit. Now you owe, let's say, 85, right? So 85, and it's worth what I say, 140. So now you're at, is that $55,000? Am I doing that math right? Right? Yeah, right, $55,000 of equity. Now, let's say you sold that property after five years, after realtor fees,

or whatever, you're left with, what, 40 grand? So you just made $40,000. So what if, and again, this might be getting a little bit in the weeds here, but what if you just bought one deal a year? What if every year you bought one beer deal? And then next year you bought another one year, and then after year, and then after year five, you just started selling off one every year. And so then every year, essentially, I mean, like, this is like a nice round numbers, but you can be making $40,000 a year every year just buying one rehout, like buying one per property and hanging on it, not counting the cash flow. So it's just another way of looking at it, Something that we talk about is because the Burr capitalizes on all four of the wealth generators,

which is cash flow, appreciation, the loan getting paid down, and tax benefits. It just like really nicely pulls in all of those. So anyway, Burr, very cool. And David, I'm excited for your book. That's still months away, but is going through the publishing process right now. So you heard it all here first. Moving on. Number three, we'll be a little shorter in this one because neither of us do a whole ton of

it. But you do a little bit of it. I do a little bit. We both do a little bit. All right, you want me to take it? Yeah, go ahead. All right. Number three, we're combining three different things. There's note investing, lending, and syndication. They're pretty similar, which is why we combine them all together. It's basically like a super passive way to invest. If you have a lot of money, you can put it into somebody else's deal. For example, right now, my buddy Ben Labovich, she's been on the show a few times. He's putting together, and it'll be already closed by the time this episode he's putting together an apartment complex deal and he is syndicating it so i'm giving him some of my money uh to go into that deal and i will be a a limited partner in his syndication which means

like i'm not on the hook i'm not running the deal i'm not anything i just have my money investing in it as a very small share owner uh i even have a fourth one to this would be crowdfunding very similar also like no investing lending syndication crowdfunding it means you take your money you give it to somebody else and you did that with uh andrew kushman right a few times Several times. Yeah. So, like, we put our money with other people. They go and do it.

Or you can lend it to somebody else, like being a hard money lender. Or you can buy a note as we recently talked to Dave Van Horn and he wrote a book called Note Investing. I'm going to probably butcher the total name, but like it's all on note investing. And this is the idea, right? It's like you're basically making your money work for you in the most passive way possible. Anything you want to add? Yeah, I would say that when you're looking at different options, it can be overwhelming, right?

But as a general rule, I look at most things in life in real estate investing. included as a spectrum. So on one end of this spectrum, I have lots of work and lots of profit. And on the other end of the spectrum, I have less profit, so there's less money, but way less work. And we all have to figure out where on that spectrum we're comfortable with, do I want less work? Do I want more work? And at different times in life, that's going to change, right? Maybe you just had a kid and you don't want to do anything. So you want to lend your money to someone else while you raise your child. And they grow up, they go into high school and you're bored and you want to jump back in a real estate investing. You want to start doing something like

flipping houses, which is what we're going to talk about next. Flipping is a lot more work in beginning, but there's a lot more money. Note investing, you might get a little bit less return, but you're not doing anything. Lending your money to another investor is the easiest money you'll ever make. I mean, my returns with Andrew Cushman are going to be phenomenal, and I do nothing. Like, I gave him money and it's coming back to me five years later at almost three times how much I gave him. And he did all the work. I didn't have to do anything. So it's, that's what we're talking about is finding the type of investing that's going to work for you. If you're sitting here saying, yeah, this sounds great, the birth started. It just sounds great,

but I don't really want to have to manage a rehab, right? Well, do. something to earn some cash and then find a way to give it to someone else who does want to go manage a rehab or they are good at what they're doing. Find out where on that spectrum you're comfortable sitting, stake your claim right there and then just keep amplifying and repeating whatever method that works for. And this is a really good one. I mean, note investing, I have a couple notes. It's another, I don't do anything. Every month, I get a check that shows up in my account that says, here is this money for what they owed me from the mortgage that they paid. And if they ever don't make that payment, I can go for clothes on a house that's probably worth twice as much as

what my note balance is for. And my note balance is about 50% more than what I actually paid for the note, right? I'm going to make a killing if everything goes wrong. I'm almost hoping that this person stops paying me, right? So that's just what I love about it is there is a, there's a method that works for everybody. And this is going to be the one that works for the people that either have a lot of income and they don't want to do work or they just feel like they're never going to really get this down. They don't want it bad enough. But they still want to invest in real estate because it's fun and it can make you a lot of money. That's true. I, by the way, being the guy that always likes to come up with labels for things, I actually have a label for this. I call it the scale of

passivity. I wrote a blog post on it once. Right. So there's like the scale of more passive, less passive. People love to use that word passive income. I love that term, right? But let's be honest, most real estate is not that passive, especially in the beginning. You know, you buy a rental property. But I call it still passive because it's not related to the hours you put in. Right. So I own a rental property. Sometimes I work an hour on that rental property. Sometimes I work 10 hours on that. Hopefully I work like 10 minutes on it is kind of the idea, right? And over time, it gets more and more passive. But yeah, yeah, notes is lending, syndication. That's all on the far end of the passivity. Do you have any tips, I guess, David, before we move on, like, on finding people

to invest with? Like, there's a lot of people out there asking for money. Yeah. Like, how do we, how do we vet somebody or feel comfortable with somebody? The, so this is something that I've learned a lot about lately as I've become a business owner with my real estate team. And I've been trying to figure out who do I want to hire as an agent? Who do I want to be in business with? How do I know if I trust somebody with my money, my time, my energy, my commitment? And what I found is that the overwhelming majority of people are who they are. And they stay who they are. And if I want to know what is Brandon Turner like, I look at the last five, 10 years of Brandon Turner's life and whatever he did is what he's going to continue doing.

We make small tweaks with the way we do stuff. We might evolve, but we don't change from one kind of an animal to another. We become a better version or a worse version of that same animal, right? So the first question I ask when people want to go into business with me is, what experience do you have? Have you done this before? Right. Because everyone can come out with their hair and fire and say, I want your money and I want your money and I want everyone's money because they want to go learn how to invest real estate on my buck, right? Before I give somebody money, I want to know that they know what they're doing. If they don't know what they're doing, I want to know that they've already taken the due diligence upon themselves to find another investor that does and brought that person

into the deal. And it's coming out of their side. Right. So if you've never done a deal, Brandon, but you go find Josh Dorkin, who has done a deal, I'm okay in that situation if Josh basically blesses it. And that's kind of what you did with your mobile home park, right? I would have been comfortable investing with you if I was looking for something to invest in because I know you had Ryan involved and Ryan has done this before. That's what you're looking for. Like if someone's already had experience doing it, they know what they don't know. It's not like you're brand new and you don't even know what you don't know. That's the first part. The second part I look for is how they live their life in a way that showed integrity before this,

right? If I borrow somebody's money, which I've done before, I feel like that's more valuable than my money. It makes me sick to think about losing someone's money. So when I borrow money from people, I've told them, listen, I understand you don't really know real estate that you're trusting me. You're not trusting the deal. If I make a bad decision and that this deal loses money, I'm still paying you. is not contingent upon the performance of whatever I invest in because you're trusting me as a person. I want to know whoever I'm investing with feels the same way, that it would bother them so much to lose my money that they're going to do whatever they can do to keep it from happening rather than, hey, David, you knew it was a risk. You knew this might not work out, right? Those are probably

the top two things that I like for. Do you have anything that you found in your experience is valuable as well? I think that's really good. I mean, everything you said there was right on. I would add one, not even a point. I want to ask the question on how you view this, because I've had this conversation with a lot of people, how much do you do due diligence on a deal that somebody you trust brings you? Because this is the argument, right? So, like, I could pour through, I mean, I've looked through the, like, you know, the pro forma or whatever you want to call it, all the details of the property and the numbers. And I could dive in and spend hours, and I have spent hours reading these things. But then again, at the end of the day, somebody could be making up all those numbers even, right?

Like, they could have just added zeros wherever they wanted to, right? So at the end of the day, really, I'm investing, yes, in the deal, it's secure by the deal. I want to know that the fundamentals make sense. But how much do you actually, how much if it depends on the person, how much depends on the deal in your mind? So I'm going to quote two people that I respect a lot when it comes to this. The first of my favorite author is C.S. Lewis. He's a very, very smart man, right? I love C.S. Lewis.

Awesome. That's probably why we're friends. We like the same people. So C.S. Lewis said almost everything that we believe is not. not something we've experienced for ourselves or we have personal intimate knowledge of. It is what someone else has told us. And for anyone who would say, no, no, no, I only see what I believe, right? He posed a question, do you believe China exists? Like, have you ever actually seen China? You've seen maps of China. You've heard other people talk about China. I've never been to China, but other people that I know have been there, right? So I put my faith basically in what other people

are saying. And if you think you're not doing that, you're lying to yourself. Because all of us, in some method are doing that at all times of our life, right? And I combine this. that with what David Osborne, who we've interviewed on the podcast says, because he does a lot of investing with other people. In fact, this whole business model is basically find talented people who have a good thing going on, partner up with them, give his resources, which could be his money, but it could also be like help that he has, counsel he can bring in, other experience, and let that person run. What he says is it's not always about the investment, it's more about the operator. You bet on the right operator who's operating that business and you're going to have a good result

because the right operator won't make a bad decision as far as what business to pick in. And if you pick a genius idea, but you have the wrong person running and it's not going to matter how great it is, they're going to screw it up. So what I do is I combine those two thoughts and I say, okay, I'm reading this pro forma. It looks right. But how do I know the numbers that they're giving me are correct? If I'm going to put the time into making sure that everything that they're telling me is correct, I might as well buy the deal myself because it sees this to be passive income, right? So do I trust the person? They have integrity that they wouldn't lie on the numbers.

And are there other people I know that would vouch for that person? That's the way that I look at it, right? because I have that theory that rock stars, no rock stars. And Brandon, I know you and you value your relationship with me. And if I said, hey, this guy says he knows you, he wants to invest in a deal with me or he wants to invest with him, what do you think? You're not going to vouch for that guy if you don't trust them. And you might say, I can't say good or bad.

I just don't know, right? Because your relationship with me matters to you, you're not going to risk that. That's what I'm looking for. So I would probably never invest with a complete stranger no matter how good everything looked. There's got to be someone that I can trust that we both know that we'll say, yeah, that guy's good or something like, I watch you invest with them and it went good with you. Then maybe I'd consider doing it. That's basically how I vet people. Yeah, that's solid. That's really good. For decades,

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talk enough about flipping on the podcast because it's so popular yet we tend to focus a lot on the rental side of things. But let's talk about how, I mean, we're talking about financial freedom. And then we're talking about flipping is like a job. I mean, it's a business. Isn't it? David. So why do we have this in here? Well, this is why we don't talk about flipping very often. often on the podcast because it's not really investing, right? It's kind of by definition, investment is something you go put your money into and it brings your return. House flipping is more like you're working a job.

It's often not your money you're putting into the deal as somebody else's and you're doing a lot of work. And it's a risky job that you might lose money on, but it's still very labor intensive. This is on what was your scale of passivity. Scale of passivity. It's on the far end. We should get some music for that. Yeah, I have like a deep Greek God type voice like the scale of passivity.

And then I'll write a post that says the spectrum of passivity and we'll have like, you would. Yeah, I would. I would perfect your idea. So anyways, flipping a property is a lot of work if you're doing the flipping. But like most jobs, it can be turned into a business from the beauty and power of leverage. And this is what I'm learning in my business working at Keller Williams as a real estate agent. In my first year, I became the top agent. In my second year, my sales are up like 200% from the first year.

And I'm quickly realizing that I'm doing really good because I'm really good at 20% of the work that needs to be done in this job. The other 80% I'm not very good at. And what I've done that other agents didn't do was took a risk and hired people, hired leverage to do the things that I'm not good at that allows me to focus on what I am good at. People that have done this swear by it. They love it.

People that have not, they just don't understand it. And I can sympathize with them until you take that leap of faith. You don't understand how game changing this is. But the way that's working now, if I continue on this path, I will have a whole bunch of agents that are basically working underneath me and I'm making money from the commissions they have because I've trained them and taught them and given them systems and models to follow. All that I'll be doing is going to listing presentations, taking listings, talking to the clients, and then letting all my buyers agents work the buyers.

And eventually I'll hire someone else replace me in that and I'll step in the CEO role. And eventually I'll find a CEO who's smarter than me and really wants a job and I'll pay him a bunch of money and I'll step out of the job completely. And if I hire the right person, my business will grow more than me doing it. And now I have a passive business, passive income coming from a business that was a job and I turned into it. You can do the same thing with flipping houses. You have to get good at what you're doing, just like I have to get good at being a real estate agent. Then you have to find people that are good at the aspects of the job that you don't love. And then you have to replace yourself slowly with people that are smarter, better, and more driven than even you are to make your business grow. So let me

like paint a picture for you so you can see how this would work. Let's say you buy your first property, you flip it, you make some money and you reinvest that money into the next property. Now you've got a system where you are growing your net worth by flipping continual property. You started off with 100 grand and then you had 150, then you had 200 in every house you flip before using round numbers. After you flip 10 houses, you've turned 100 grand into, what would that be 500 grand? Or maybe a million. My math's not good when I'm talking this fast. Sorry. So you continue doing this and you build up a fund of money that you have. Then you can flip two houses at a time, then three houses at a time, then four houses at a time. Then other people see what you're

doing and they see how what you're doing and they start pouring money into this. They want to give you money to invest. They want to be the passive side of it. They want to be the lender. Now you're flipping five, six, seven houses at a time. Well, when you're doing that, you're managing a lot of rehab crews. You're talking with a lot of agents. You're learning more and more about how houses are sold and what materials cost and how, like, you can get rehab guys to actually show up to work and swing the hammer like they're supposed to do. You're building new skills because you're scaling. As this becomes more profitable, you're going to leverage out the parts of the job that you don't enjoy doing or that someone else can do better. You're going to pay a guy to start calling the people in your neighborhood

or driving for dollars to find you deals. You're going to pay somebody to go look for hard money that can finance your deals. You're going to pay somebody to go look for hard money that can finance your deals. You're going to pay somebody to manage the rehabbers, manage the contractors for you, like a project manager. With every hire you make, your business should make more money because now you are out there doing the 20% you're good at and you're doing a little bit less work. You're becoming more and more specialized and you're not hating it because you're focusing on the stuff you like. Eventually, you step out completely and hire a CEO to run this system that you've created. Now, this doesn't happen for most of us because we are too scared to let go. We don't want to give up the

control. We don't want to have the vision to think about how would this work. That's why most people like being an employee. They won't admit it. They say that they want to be an entrepreneur. They really don't want that. But if you have that bone in your body that wants to be the visionary, that wants to be an entrepreneur, it is not hard to find people that want to work for you and want to do that job. And as long as they're making it as much money as they feel comfortable with that they think they need, they'll continue to do that. And I love this idea because once you've hired a CEO and you've stepped out, you own a flip fund that continually makes money, but you don't do any of the work. You've replaced yourself with different people that do that job better than you were able to do it, that want it more than you because they're hungry.

They have young families. They want to pay off their college debt. Whatever their big why is, you're helping them accomplish that. And they're happy to do that job for you. You step out and now you've made it passive, which is what we really want. Flipping houses will be tough at first, but it shouldn't stay that way. It only stays tough if you stop growing. Wow.

That was really good. People should rewind that and listen to it again and again. And this applies to all things, right? not just like a flipping business. This is like business 201. I mean, this is like advanced stuff maybe, but like they should teach us more often.

In fact, just this morning, I had this conversation with a buddy of mine. He's a contractor, one of my good friends. He's a contractor talking about how like, it's tough right now. I mean, like he's making money,

but like he's trying to do 10 different things. He's a guy that's out there swinging the hammer on the job sites, but he's also out there trying to get leads and bids. And he's like, I got eight bids out there. They're not calling me back. And I got to call all them today. But then I got to also be working on this project.

And he's just overwhelmed. And I'm like, And I asked him a question that Tim Ferriss asked a lot. And he said it up, we talked about it when he was on our podcast, but he talked about it a lot on his show. And it's this simple question of what if it was easy? So I asked my buddy that. I said, well, what would it look like if your business was easy and fun and light? Like, it just felt really good.

And we sat there and we actually, I went to my whiteboard with my buddy and we sat there and we speced it out. And I was like, you would have, like, we basically figured out he'd have like a three person crew of really solid top performers who were really good at construction. Right. They were like one lead and two grunts, as we'll call them, right? And then you have another guy who's just in charge of getting leads and working the bids and making sure, like, basically a sales guy, right? And then you have another person that's in charge of all the business side of things. I mean, like the paperwork, taxes, all that. And so, wait, I spec it out on this little whiteboard.

And I'm like, no, Andy, where are you? My buddy's Andy. I was like, where are you in this picture? You can choose if you want to be one of these guys. If you want to put yourself into the engine, like to be the guy working, being the grunt, or you want to be the sales guy, fine, whatever. But like, you don't need to be. You can hire those roles. And so the question he asked me, and I'm going to pose it at you now, David, is, like,

I don't have the money to just go and start to hire five people right now. Like, I barely surviving as it is. So how do I get to that easy, like what a life could be like? Let's say I'm a flipper. How do I get to that point where I've spec'd out the ideal business model? And now I want to get there. You do have the money. You don't realize that you don't have the money.

You don't have the money to have what we call fixed costs in business, right? So the first hire that I had to make in my Keller Williams business was hiring a full-time admin and if I don't sell any houses, I still have to pay that person. That's a fixed cost. You want to avoid those as much as you possibly can in a business, especially a newer business, right? My second hire was another admin, right? Those were the first two difficult ones. But once I had two admins, I'm doing a lot less work actually managing every deal that comes my way. So I'm spending more time looking for the next deal, my income quadruples, right? Then I start hiring people that are not fixed costs. I hire buyers agents to work with my buyers to take that off my plate, but I'm still getting some of the

money from those deals. I hire a showing assistant to go show houses to my clients when I have more than one that I can't go do that for, right? They get a percentage of the deals. I'm not giving a fixed cost to that person. I hire a person to go dial around the neighborhoods and say, hey, we have a house that we're going to be selling. Do you know anyone that might want to move into it? That person gets paid a percentage out of the commission when it closes. If you move it from fixed cost to like performance based cost, you can totally afford that. So if you find a rehab guy and you're like, look, I don't know if I can pay you this much money, but I can give you this percentage of the deal and he's willing to do it, right?

You continue to do that until you have so much business coming in that it's cheaper to say, no, now I'm going to put you on a salary, right? That's the economies of scale. That's kind of how apartment complexes eventually end up making me. And I just had a crazy thought that I want to share. This is exactly what Josh Dorkin did with bigger pockets. It's exactly what Josh Dorkman. Right.

And how fitting that we talk about it on this past the baton episode where he's sitting in his basement, pounding away, working like crazy. He's the vision to build this thing. He's pushing it forward. This business grew with every hire where he took something off of his shoulders and put it on someone else's that did it better than him, right? And this is going to sound like I'm kissing his bearded butt, but I'm not. Brandon Turner is a genius if you guys don't realize. He acts like a complete goofball, but he's actually really, really smart, right?

Brandon helped grow bigger pockets exponentially faster than Josh could have ever done on his own. And he allowed Josh to focus on the stuff he liked, right? Like the nitty-gritty details and the big picture stuff where Brandon handled the marketing and the sales and he was kind of the face of the franchise while, Josh could operate behind the scene. Josh wasn't going to write every blog post forever. He started to leverage that out to other people. Josh, now he's not even doing the podcast anymore. Josh owns a business that is going to make him money and he doesn't have to show up to work

every day because he's found other people that can do that job just as good or better than him because he's the smartest one of all of us, right? If it worked for bigger pockets and it can work for me as a real estate agent, it can work for anybody who's trying to do this. So when that little voice comes in your head saying, I don't want to flip houses, that's too much work. You're thinking too small, right? learn how to flip houses to learn how to do it and then teach somebody else how to do it and slowly,

slowly back your way out of this business. And then you're going to own, you know, like you could have a house-shelpping business and just like having a big portfolio of rental properties, you also have a construction company, right? They flip your houses for you. So you only, you pay costs, basically. You don't pay any extra you save on your rehabs. Then you loan them out to other people who need to have their house rehabbed and you're making money from that too. Yep. That's all really good. Thank you for calling me a genius. I'll give you your, you know, stake in a later. So, all right. Well, yeah, I mean, that's a really good example, though. And, like, again, flipping houses can be a great way to do it. And you're involved in real estate.

And the last point I'm making, I'm moving on. When you flip houses, you have to have a pretty good marketing machine. Like, you have to have a way to generate leads continually. So first of all, that is a very, I don't want to call it easy, but a very obvious first hire is you need somebody that can generate leads. Luckily, that person can be paid on 100% commission. I mean, how many people out there are like our bigger pockets listeners how many of you guys right now would love to go work for a more experienced real estate investor as their deal guy if they gave you 20% of every deal that brought in and they gave you exactly what to do right like a lot of people would love to do that job and again i'm not saying 20% is the number i'm just throwing that out there but like there's this

we have an entire community of a million members at bigger pockets you're telling me you can't find somebody in there that would love to to work together because you know that one plus one is way more than two. So anyway, find somebody to get you leads that does nothing about getting leads. Imagine somebody working 30, 40 hours a week in leads. I mean, how much time do you and I spend on getting leads every week? Like, almost none, right? Like, imagine somebody working 40 hours a week at it, like what would do to your business. And I told that same thing to my buddy this morning. Imagine if somebody was spending 40 hours a week getting you contracting, you know, bids out there, just hustling that all day long. Like, imagine what that would do. Imagine how much you could

raise your rates and bring in more money. Same thing about as the flipping. So anyway, there was that. On the flip side, if you're the person who wants to work with the David or the brand in or whoever you think is cool and you want to learn from them, if you go ask for a job, they're probably going to like, I can't take the risk of paying you money. I don't know if you can perform, right? If you go say, I'll work for free until I make you money and then I just want a percentage

of it, who would say no to that? If you're not taking a lot of their time, resources, energy, if you're just like, look, I'm going to go do this thing for you. I'm going to find you the deal. I'm going to get you all the numbers, run it through your machine. once you found it and give me a percentage when it comes out, we're all going to say yes. And that's an awesome way to get yourself in where you want to be. It's just changing the thinking of what we had from.

Nope, I'm a W2 employee and I want a wage and I want to know what to expect and putting the onus on yourself to work a little bit harder. That's how businesses are built. That's how businesses grow. And that's how you can fit yourself into that, that whole system. Yeah. That's so true. Yeah, we should probably just do a whole entire show just on like that mindset.

Because this is something that we all struggle with because we all came from W2 jobs. at one point. So we're raised on the, and our parents all had W2 jobs generally. So like we were raised on this very different mentality and trying to break away from that and thinking differently, thinking bigger is what's going to make all the difference. And that's what's going to give you the financial independence that you want. So we got to move on because we got three more to cover. Brandon, I'm going to let you handle this one because you are Mr. multifamily investing. Number five is going to be multifamily investing. Tell us a little bit about how this strategy works.

Well, multi-family investing, as you all know, is buying properties with more than one unit. Specifically, in this case, we're kind of defining it more as larger multifamily, meaning we're not talking single-family house or duplex or, you know, triplex, four-plex. That was kind of in the initial number one, just cash flow at the rentals. This is bigger. This is the business of owning large real estate deals. You know, I'm not the world's best of this, despite what you might think. I own a 24 unit in Ohio.

I own a 48 unit out in, which is the mobile home park, but they're basically the same thing. Out in Bangor, Maine, and I'm buying another 60-some unit here soon out there. But I absolutely love it. And here's what's fun about it. So I bought a $15,000 house a couple years ago, 15 grand at a foreclosure sale. And I bought it, fixed it up, rented it out, did some Airbnb with it for a while. It dealt with a nine-month rehab on it. It was a pain.

At the end of the day, I made like $15,000 or $20,000. a little bit of cash flow, learn some good lessons. At the same time, I mean, not the exact same time, but now recently, just in January of this year, I bought a, we'll say the 24 unit and the mobile home park. I bought both in January of this past year, 2018. Those two deals combined, the 24 unit and the 48 unit, took a hundred times less effort,

a hundred times less effort than that $15,000 house. Like, it's insane how little that project took me to do. and how, like, anyway, it's stupid. It's like how, how I wish I would have done that earlier. And I mean, I did buy 24 earlier, but what I did is I stayed small for a while and I bought some little stuff. And that's fine. But, man, I love multifamily.

And there's a few reasons. First of all, they are more scalable. I mean, how much time does it take to buy 20 single family houses? You could buy 20 unit apartment complex or a 30 or 50. Also, with apartments, there's a lot of room for what we call forced appreciation, which means if you buy an apartment complex, I mean, you buy an apartment complex, You can do this with single family as well. It's just on a much grander scale.

So you buy a multifamily property. Let's say it's a, we'll use for easy numbers, a hundred unit, and you increase the rent $50 a month. $50 a month on average over the course of, let's say, a year, on 100 units. What's 100 times 50? Is that $5,000 a month? Am I doing that right? 100 times 50.

5,000 times 12 is $60,000 a year in extra revenue. Now, if we, I'm not going to go real in depth, but basically a multifamily's property is worth. Multifamily is worth a multiple of how much profit basically comes in. That's where we're getting to cap rates and all that. But basically, that could raise the value of that property by $750,000 to a million just by raising the rent $50 bucks a month. And if all your expenses stayed the same,

you could potentially bring in an extra $750 to a million dollars in value off a $50 $50 rent raise. Imagine if you could lower the rent $50. So this is one thing. And we'll talk about in the deep dive a little bit later, the mobile home park that I have. One of the things that's so powerful about mobile home parks is when we bought the last one and this one, we transitioned tenants over to paying their own water bill. Well, that immediately saved like two or three grand a month, which immediately boosted our profit, which immediately made the value of the property worth way, way more. And there's a lot of ways to cut costs, a lot of ways to increase income.

What if you did both? You lowered your expenses and you increased your rent. Mind blown. No, that's really what it's all about, right? The goal is you want to increase your net operating income, right? Net operating income is basically your profit not counting the mortgage. Like if we take the total amount of money you brought in, minus all the expenses except for the mortgage, whatever you're left with to pay the mortgage, that's your net operating income. So you can increase your net operating income, your NOI, by either getting more income, raising rent, or buying a property that's under rented, and you jack the rent up to where it should be, or by, you

Again, decrease in expenses, finding little things to do that you can negotiate, like negotiate lower garbage bills, negotiate lower water bills, put water meters on sub-meter, bill back to the tenant's water, renegotiate contracts on whatever. Anyway, all that stuff works together. You can actually increase your cash flow, which is great. And when your cash flow goes up, the property value goes up as well. So, again, if your goal was to, let's say, make $5,000 a month in cash flow, you could potentially do that in one single multifamily deal.

You go buy a 50 unit that gives you $100 a month in profit each unit. That's $5,000. Boom, you're done. You know, what you're doing is you're taking the scale of this like bigger deal, even though it's pretty much the same amount of work and you're pulling on a humongous freaking lever, right? That's what you're doing is when you're increasing your N.O.I even a little bit, it's like pulling on a huge lever that creates like massive results for you with way less work.

Now, it's a different way of thinking. And in my opinion, it's because multifamily is not very very. value the same way as single family and that throws people off. When you're buying a single family house, the appraisers are assuming that someone's buying it to live in it because that's what the vast majority of people are doing. So you increase its value by increasing its like desirability, like what it looks like, right? How much would somebody want to live here? But when you're buying multifamily, you're increasing its value as a business. It's very similar to the way that if you were to go buy like a McDonald's or something, they value them very similarly. So you have to learn a different

formula and kind of rearrange your brain to think about things differently. But what we're all trying to do is make money through real estate, right? So if multifamily is designed to make you money by increasing its ability to run it like a business, it's a much better way to actually accomplish your goal of finding financial freedom than trying to use an asset like single family housing, which was not designed to make investors money. We've kind of hacked it to make that work for us. Yeah, that's true. And on that point, like multifamily, especially the larger ones, they're designed for investors. And there's two benefits to that. First of all, nobody buys a hundred unit and goes, yeah, I think I'll just take care of all the plumbing there myself. Like, the operations of the property are factored into all your numbers.

Like, you might, when you're competing with, you know, another investor in your area, you're competing with somebody potentially on a single family house, let's say, who's going to do their own management, their own maintenance, their own screening, their own everything, so they can pay way more for the property. And so when you deal with single family houses or small multifamily properties, it's hard to be able to add in all those costs of the property management and all the maintenance. It's not impossible. It's just hard. But when you're dealing with the larger multis, everybody in the game is all working with the same numbers, the same fact that they all have to pay property management. They all have to pay for the plumber to come on and do the

toilets. And so you're not going to accidentally have to end up working all your nights and weekends fixing, you know, toilets because you bought 800 unit. Like it just wouldn't even come up. The second point about the fact that that is the competition you're dealing with, again, other investors. So the price is going to be based on that largely. You're not dealing with emotional people who are going to pay 100 grand more just because their husband or wife really, really likes the cute kitchen. If this percentage works for you, it's probably about the same percentage that works for that guy over there.

So yes, there is a ton of competition. I'm not saying there's not competition in multifamily, but it's smart competition. It's analytical competition, which I think is a lot of fun. And then if you can find hidden ways to bring up more. value. You find a property that everybody else looked at it and said, Ed, it's not good enough for me, but you discovered that the rents were actually $50 lower than what they should be. And you can raise the rent now and make the value a million dollars more. Now you come in there and that's your competitive advantage. You buy it. So that would be number five, multi-family investing. Very well said.

Yeah. Should we go on to number six? Yeah. So this next method is probably my favorite. I know number seven is going to be your favorite. I think these are two of the best methods that we have in this whole thing. People are you should love this idea, right? And it's just a different way of thinking about how to achieve financial independence through real estate. We don't think about it, but it would work perfectly. Okay. So I don't know what, what's name I should call this strategy.

In fact, Brandon, that should be your homework because you come up with the best names for stuff. You come up with something clever for this and then like just give me like a little bit of credit or something, like junior credit. But it's basically the concept of buying one house a year for 15 years and putting it on either a 15 year loan or just paying it off so that. it would be paid off in 15 years. Or if you're younger, you could buy one house a year for 30 years and put it on a 30 year loan. But the idea would be you buy a house and you start paying it off. And it doesn't even have to make a ton of money. He just has to at least break even.

And then next year, you buy another house and the next year you buy another house. And this example, let's say they're on 15 year notes. So at the end of the 15th year, your first house would be completely paid off. You don't owe anything on it at all, right? The second house you bought would be almost paid off. It's ready to be paid off at the end of that year. Rather than selling it and paying capital gains because the only time you're taxed on your gains is the successful sale of a property. That's when the government gets involved and that can really hurt. You're going to pay commissions. You're going to pay closing costs. You're going to pay capital gains. You just refinance it again. You put another 15 year note on it and you pull out as much money as you want to so that it's still at

least breaks even tax free and you live on that money for that year. Right. So if you're doing this with properties that are worth 125, $150,000, when they, and now imagine the appreciation that you're going to get over 15 years. The rent will have been going up. The house will have been going up. Then you refinance it. You pull out $100,000 that you live on for that year, tax-free. And the loan starts to pay itself off again. Year two, you do that with the next house that just got paid off.

You get another $100,000 coming back tax-free. Year three, the third house you bought is paid off. You do the same thing again, right? You do this for 15 years and you would never have to work again a day in your life. And you're buying one house a year. That's all that you're doing. You're not doing anything crazy, right? And you're never paying taxes again.

I love the concept of doing this for people that are like, I don't want to go all in on real estate. I don't want to go full time. I don't want to quit my job, right? I like what I'm doing. Imagine combining a pension with like you get to retire with an extra $100,000 a year that you're getting tax free. You'll be financially free with very minimal work.

Yeah, that's such a cool strategy. I don't know why I've never shared anybody talking about quite this way before. And what's cool about it is it kind of, it really takes advantage of the, you know, the four wealth generators we're talking about, right? Cash flow appreciation. loan pay down and tax benefits, this is all loan pay down. You're basically saying, look, if you do nothing, if you got no cash flow at all, you got no appreciation at all, you got no tax benefits at all.

You just were bad, you know, your CPA is horrible and you got no tax benefits for owning this property and you had no cash flow. It doesn't matter. At least after 15 years, you have a paid off property. You refinance it, pull your money again, do it again and again. And then every year you're doing that. Similar to what I did, you know, I'm sure you've heard the story, you know, a little Rosie Lou, my little daughter, Rosie.

We bought her that fourplex the week she was. was born. That fourplex, like, I didn't even care if it broke even or not. Now, luckily, this thing makes like $1,000 a month, which I get to spend on living in Hawaii soon. But, like, this is, uh, I put it on a 30 year mortgage, but I set up the automatic payments to go 18 years. In 18, well, on Rosie's basically 18th birthday, it'll be paid off. So I'm paying a little bit extra principle every single month. Because in 18 years from now, that property should be worth at at least $250, if not $350,000, and it'll be paid off to nothing. So at that point, we just refinance it, pull out $250,000 to $300,000, whatever we can get.

And now that pays for her entire college education. So I teach us a lot to people who are young parents, who have young kids, buy a house before your kid's fifth birthday and put it on a 15-year mortgage. It doesn't have to make money. It doesn't have, it can break even. It doesn't matter. But in 15 years, it's paid off. And we're just using that.

But even better, most likely, you're not going to. going to break even. You hopefully will make some cashful, even if it takes a couple years. Hopefully the property will go up in value because you're buying in a decent enough area and, you know, appreciation just naturally occurs. And you likely are going to be getting tax benefits because you are depreciating the asset as well because you have to. The government tells us to. It's just, it's amazing. So well done. You're not just going to pay for her college. You're going to pay for her college, her car, a down payment for her house, her senior trip, whatever she wants to go do. And she's going to have a bunch of money left over to go buy her first

rental property after that's done, right? Yeah. And that's from one decision that you made 18 years ago and never did anything other than manage it. And you probably have a property manager. I do. I have a property manager on that one. I don't even touch that property.

There you go. And I went over there. Oh, let me, I can say it real quick. I went over there today because there's a garage in the back because there's this garage that I've never seen the inside of it. My maintenance guy had been in there. It came with the property. And I knew it was just jam full of stuff.

So I went over there, opened it up, looked inside. And I was like, thinking I'm just going to use it for my own storage. And so I see all this junk in there. And while I'm looking at it, trying to figure out how, you know, I'm going to have Habitat Free Humanity come out and just take all this stuff. The guy living in the house, like that I own, one of the pieces of the fourplex comes over. And this fourplex is four separate houses on one lot.

He comes, I'm looking at his backyard first of all, and it's just dirt back there. And I'm like, that's weird. That used to be a little bit of a yard back there. He comes out and he goes, you know, hey, are you the owner? And we met and we talked for a minute. And he goes, yeah, I hope you don't mind. I'm sodding the whole backyard. I just dug down six inches.

I got it all the junk. There was all I just like glass and stuff. I dug it all out and we're bringing in sod next week. I just want a really nice backyard. I hope you don't mind. Wow. I'm like, no, I don't mind. That's fantastic.

So not only do I have this asset making me $1,000 a month, my own tenant now is improving my property because because I fixed that property up with 120 grand. We bought it, fixed it up, you know, rehabed it, rented it out, refinanced, they got my money back. And in that process, I made it a really nice, cute little property. I attracted really nice, high quality tenants. He's a mailman who's now redoing the yard.

Anyway, it's like win, win, win, win, win, win, win. And I get to teach Rosie about financial freedom the entire next 18 years. And what 18 year old's not going to be excited about investing in real estate when they see how much money they just got? For nothing, right? And that's only one year, Brandon. What if you just did that once a year? Every year you bought another property and you did the very same thing. And if you bird it, you got your money back out, right?

How are people not giving everything they have to invest in real estate? when it is this powerful. It's like you planted a seed and it grew into a tree and it put off apples every year through cash flow. And then at the end of those 18 years, if you want, you can cut the tree down and sell it for $300,000, right? Or you could trim the, you can refinance it, like, whatever you want to do. This is how real estate works to build wealth.

And it is so, so powerful. And that's why it's so important that you find this strategy that works for you and start taking action to do something. Yeah, I love that. So super cool. I'm glad you came up with that. We'll come up with a good name for it. We'll call it like stack hacking or something like that.

you know, we'll get there. But now, the stack is actually what number seven is. Let's move on to that. You already use that word. Yeah, number seven, let's talk about the stack. All right, so the stack, you may have seen a video. I did a video on YouTube a little while ago about this, and I've talked about it on the webinars sometimes.

But the stack is a way of looking at real estate more than it is a strategy. It's a way of making it not as complicated. And here's what it looks like. If you bought a single family house or something small, we'll say, I don't care if it wants to be duplex. You buy something small. And then the year after that, like a year later, you bought something that was just double that. So let's say year one, you buy a single family.

Year two, you bought a duplex. Now, look, the hardest deal was that first one, right? We talked about that earlier. It's hard to buy the first deal. So once you've done that, now you're in the game. You're an investor. You got confidence. You're ready.

Now next year, 12 months later, you buy a duplex. That duplex is going to be about as difficult to buy, probably actually easier than that that single family was because now you know what you're doing a little bit. Now, the year after that, you buy a couple of it. a fourplex. And don't get too hung up on the numbers here. The point I'm making is what matters more or anything, but you buy a fourplex the next year. Now, that fourplex, you already own a duplex and a single family. So what's another four units, right? It's nothing crazy. It's easy. I mean, at that point, you're like, oh, yeah, I got this. I can buy a fourplex. The year after,

you buy an eight unit, the year after you buy a 16 unit, the year after you buy a 32 unit. So now after we got one, we got two, we got four, we got eight, we got 16 and we buy a 32. So by any of your six, you now have, I think that's like 63 units. If I remember if I'm doing my math right, somewhere in there. You have over 60 units in six years. Now, each step of that was just as easy, if not easier than the previous steps, because you're scaling up slow and you're scaling up smart. But you're scaling nonetheless, which means you're growing exponentially fast.

Imagine you that one more time. Year seven, you bought a 60 unit apartment complex, right? Now all of a sudden you're over 100 units, and hopefully they're all making at least 100, maybe $200 a month after everything's said and done in profit, you're making well over six figures now in passive income in six or seven years. That's called the stack, and you did it again by just starting with one simple property. So that's why I love the stack. It's kind of what I did. I mean, again, the numbers don't matter that much. The point being grow exponentially, not linearly if you want to achieve growth fast. So you buy one, then get bigger. Maybe it's a single,

then a fourplex, then a 10plex, then a 50 unit, right? The point being, scale up using the stack. Anything you want to add to that? Yeah, in the one thing, the book by Gary Keller, I believe is Jay Papazan, right? And Jay's also been on the Bigger Pockets podcast. You guys should check out that episode. In Chapter 2, they talk about this concept called geometric progression,

and that's what Brandon is describing. They talk about how a one-inch domino can knock down another domino that's one and a half times bigger. So a one-inch domino can knock down one that's two and a half inches. That can knock down one that's three and a quarter. And it continues, right? By the 17th domino, you have a domino big enough to knock down the leading tower of Pisa. And I think by the 34th, you have a domino that can knock down something the size of Mount Everest.

It just exponentially grows, right? So what I take from that is that with every step I take in life, if I'm not going one and a half times bigger than my last step, I am not pushing to my potential. And when you think about several dominoes in a row, not pushing to your potential, potential has a huge, huge impact on how far you actually get. If you're buying duplex, duplex, duplex, duplex, you're going to have linear growth, right? But when you go 2, 4, 8, 16, 32, it becomes massive growth. And you're going to like investing a lot more. Because like we said earlier, the bigger you get, the more you can get yourself out of the size of the business that you don't like, right?

For most of us that grow bored with the mundane or the routine is because we're not pushing ourselves to grow. So that's what I love about this stack method. It's a way of changing your thought from, I've learned how to do this. I will continue to do it. but I need to push myself to do more. I didn't work really hard to hit this level and stop. Where can I take this to go bigger? Where can I learn more and keep pushing yourself?

Yeah, you know, that actually relates closely back to what we talked about earlier, that $15,000 house I bought when like, what was I doing? Like, why did I go back and buy a $15,000 house? Because it was comfortable, because it was easy because, I mean, it was kind of fun and it was a good breaking thing. Like, hey, I just bought a $15,000 house, right?

I didn't need that. I should have spent that time looking for bigger deals. Now, a lot of people say, well, I could never afford a 50, 60, 80, 100 unit property, so that's stupid, right? So for like the point being, like, that first deal gives you the confidence and the credibility to do the second deal. Now, the first few deals, the first three years you might be using your own money. But by the time you own a fourplex and a duplex and a single family and maybe you've now

bought Aplex, you can probably bring in partners, you can raise money, you can do hard money, you can do the birth strategy on a larger scale because you have the credibility to be able to pull those things off and the knowledge and the experience. Again, that's why the stack is so powerful. because you're building all those things systematically. And so those will not be an issue. It's funny because those things are not an issue. We talked about this on the podcast, I think was last week.

We're like, the only people that complain about the 10, you know, I can't get more than 10 loans are people who have like one loan. You know, like the only people who complain and say, well, what are you going to do when you have 10 loans and you're just done investing? Nobody has that problem when they have 10 loans. Because by the time they have 10 loans, they know exactly how to get 11 and 12 and 15 because you grow in experience and knowledge. Those are more, that's just fear talking more than anything.

I just read a book called So Good They Can't Ignore You. Awesome book. Of course you do because Brennan's read every book there is. I finally find one book and he already has read it. Well, I don't remember. I wish I could remember the example, but I don't remember what it was. There was some scientific breakthrough that happened with like a team of

scientists in Sweden. Like no one had ever done this in the history of mankind. And then there was an American team that had the exact same breakthrough like three months after the Swedish team did. But they were never talking to each other. Neither side knew the other side was working on this same problem, right? And people were saying, what are the odds that that could happen in the whole history of the earth that they finally had this breakthrough at the same time?

And they weren't sharing information. And the author makes a point that that's what you should have expected. Because the reason they had this breakthrough was one year earlier, there was a different scientific breakthrough that made whatever they were working on possible. Some piece of equipment was made that allowed them to look deeper into something that led to questions being asked that they, well, now can we do this, right? And his point was, you can't see where you're going. You can usually only see one step ahead of where you are. So you're like standing on this outer cliff and you're looking and it's foggy and you can see what's

right in front of you. But until you take that step, you don't know what the next step is going to be. And that's when you're at your first loan saying, well, I don't see how I'm going to ever get more than 10. That's impossible, right? Well, from where you're standing, of course it is. But that's why you're the only person that asked that question because people that have 10 loans have had other steps to figure out what they're going to do. So when they hit there, it's barely a speed bump. You're looking at it like it's a mountain that you could never pass, you know. So get out of your own way a lot of the time. Like all we really have to worry about is what is my, what Brandon says, my most important next step. What is the next domino that I got to knock over. When I knock it

over, I have the capacity to knock over one that's one and a half times bigger than what I could before. And I'll figure out what's within my, my grasp, right? Maybe someday we'll talk about how I became the host of the Bigger Pockets podcast. And it was from being interviewed on this. And after I was interviewed, I met Brandon and said, I'd like to write blog articles. I was able to knock down that next domino. I did a really good job with blog articles. They came and said, David, you write really well. Would you like to write a book?

I did a really good job with the book. It's doing well. They said, would you like to write another book? I started doing other podcasts to increase my book sales, and I got good at speaking on podcasts. And so they said, hey, would you like to come do the podcast, right? It continually grew as each domino knocked the next one down. I did not know I was ever going to end up here. And I don't know where I'm going to end up four or five steps from now.

You know, I just got asked to start writing for Forbes that I never thought something like that would happen. They reached out and said, hey, we'd like you to start writing articles. What doors is that going to open up for me? That's what we have to understand is you don't need to see the whole journey. You just need to know what the next step is and you need to take that step. And that will reveal to you what your new options are and you go out after that. And the stack is like the best way of describing what you're doing when you're doing that right. Wow, that's really good.

Wow. All right. I got nothing to add to that. That was just really good. Guys, on Forbes. Thanks, man. I'll have to talk to you about what I should write because you've been doing it for like 10 years. Yeah, it's been a couple. But it's all right. I'm glad you got in. All right. So let's move on. So the next segment of our show is a newer segment, which we've been added in lately. And I really, really am enjoying it. It's called the deep dive. Hey, everybody. I'm really sorry to interrupt the podcast, but I have news that I cannot wait to share. We have just added a significant amount of perks to our pro membership. We've negotiated discounts for a variety of. of services including various discounts on closing costs from several lenders,

monthly savings on landlording tools, and even a discount for converting your retirement account to a way to fund your real estate investments. Check out these perks at biggerpockets.com slash perks slash pro. And we're not done. We're negotiating even more discounts to make the pro membership even more valuable to you. All right. Now back to David and Brandon. All right.

This is the section of the show where we are going to dive. deep into somebody's deal. And today it is going to be Brandon Turner himself. Who? Brandon, the man. So, Brandon, last year you talked a lot. In fact, it was ad nauseum to the point I was sick of hearing it about how you wanted to buy a mobile home park. And that was your only goal for the year.

And you did. So I want to know a little bit about this deal. Let's start off with how did you find it? Sure. All right. So before I actually say exactly how I found it, I actually, failed my goal. So my goal was to buy one in 2017 was to buy by the end of the year, was to buy a mobile home park. And I closed on that one on January 2nd. So I missed it by two days

of 2018. So I missed it by two days, but you know, whatever. No, I got the mobile home park. So the first one, what was that? How did I find it? Yeah, how did you find it? Oh, so funny story. So I took a trip out to New York City. So my buddy Darren Sager, who is a bigger pockets member. He has a local real estate meetup in New York. He flew me out to New York and had and Rosie to go to a New York meetup. And it was actually really, like, Rosie got really sick on the flight and threw up all over Heather. And it was really stressful, really stressful trip. The meetup was great.

I thought it was fun. But, like, flying there was just, like, the most miserable experience of my life. Anyway, so I was kicking myself when I was there. I was like, ah, I probably just shouldn't have gone. Like, you know, like now Rosie's sick. And, you know, she probably just got, like, you know, flight sick. Anyway, that said, at the meetup, I mentioned to somebody that I was looking, you know, for mobile home park because I mentioned it to everybody.

I'm constantly telling people what I'm looking for. And one of the guys in the room, I didn't realize this until after we closed on it, was Ryan Murdoch. And Ryan's been on the Bigger Pock's podcast before, and he'll probably be on again sometime. But he was in the room. And Ryan's a buddy of mine. And he got an email a couple weeks later from somebody that was looking to sell their mobile home park, somebody that he knew, actually another bigger pockets member.

And so Ryan put two and two together and was like, hey, yeah, let's do this. So Ryan emailed me, just kind of like thinking, yeah, Brandon's not probably interested. what are the chances? And he said, yeah, this guy just said he wanted to sell it. What do you think? I ran the numbers quickly and I was like, this could be exactly what I want. Like, there were certain things I wanted. I wanted city sewer and water. And I wanted at least like around 50 units. This is zoned for 50 and there's like 48 spaces now. And anyway, it was pretty much perfect. So that's how I found it. Thank you, Ryan Murdoch. All right. And how much did you pay for this puppy?

I paid. So they were, he was asking, I think he was asking 1.2 and we offered, I think we offered lower than that somewhere, and this kind of goes in the negotiation part, but after like 800 and he didn't, you know, like, or 900. Anyway, we settled in at 1.1, but with him carrying an 80% seller finance, so he was going to carry 80% of it himself. So we had to bring 20% down on 1.1. Now, why did you go that road rather than using agency debt or some other form of, loan to buy this. Yeah, mainly because, I mean, like, I think we ended up with a 5% 25-year mortgage, which I would be unlikely to find from a commercial lender. And just all around, like, it was just so much easier. I love seller financing. I bought my original 24 unit years ago that way. By the way, I'm not going to go real deep right now.

We're not going to talk about why I wanted a mobile home park. I'll put a link to an article I wrote on why I chose a mobile home park. I'll put that in the show notes of this show. But anyway, I just thought it would be a cool investment to try. out. So anyway, so yeah, 1.1 million is what we bought it for. Plus, they needed a little bit of rehab. Now, were you able to use any of that rehab work to negotiate the price? Yes, actually. So in the process of negotiating, when I actually flew out there to go look at the property and we walked through every unit, a lot of the units were worse than what we expected.

And they were more vacant. A lot of people left during the period of from the time he offered it for sale to us and actually like getting ready to close, like another bunch of people left. So we actually negotiated down. I think it was another $80,000 like credit at closing, which was a pretty big chunk, which helped us, you know, rehab all of those units that we weren't expecting to. So, yeah, I think it was, we did a credit. So we had to actually bring even less because credit and then he would sell our financing anyway. So it actually brought it down to almost only 10%. It ended up being like 15% or 14% actually down. That's awesome. Yeah. Yeah. Okay. And how did you fund this? All right. So a lot of people know that the reason

I was working through this mobile home park or trying to buy something, it's because I had a 1031 exchange. I had sold my 24 unit apartment from in Washington State. Sold the 24 unit, had to put the money into something. A 1031 means you have to, you have to invest in something else within a certain time frame. So I had to use part of my money to fund it with my 1031 money, but then I also had to raise some money. Now, there are some specific legal things that I'm not going to go too in depth here, but basically you can't tend to. 31 from one ownership structure to another ownership structure. So you can't do like a personal property into a partnership or this LLC into another LLC.

So that made a problem. It's like how do I finance this when I don't have all the money I need myself, but I can't bring in partner, make a partnership. So we discovered something called a TIC, a tenant in common. And so a very probably a horrible way of explaining what a TIC is. It's basically me and the other not partners. whatever you want to call them, we each own the mobile home park separately together. And that's like the worst way of explaining what that means, but it basically means we're not a

partnership. We each just own the park or a percentage of the park together, but separately. Anyway, at 1031 does apply for a tick. So that's how we got around that. So anyway, I brought in, so it was Ryan who, Ryan Murdoch who found the deal. He put in a little bit of cash. Not I didn't want him to, I didn't need him or want him to put in a ton, but just have some skin in the game. He put in some, and he's the boots on the ground, managing the property. Then I put in some. And the remainder we actually raised from a private lender I'd used in the past. Her name was Mindy Jensen and her husband Carl. You guys know Mindy because she's been a host here on the podcast before, and she is the host of the Bigger Pockets Money Podcasts. So I actually went and talked to Mindy and

and said, and Carl, and hey, you guys want a partner or not partnered. You got out on a tick on a deal. And they were like, sure. So they brought some of the money. And then we just split it, not quite even but fairly evenly thirds, but not quite that. So, yeah. We had to learn about that when we all got our real estate licenses. The tendency, it's a way of holding title. Yeah. There's like different ways you can hold title.

And that way has certain rules about it that allow you to do exactly what you did. You see a lot of those. Yeah. There's some weird things that can come up that way. There's some things to be aware. So don't just go and throw into a tick. It's usually not a good idea. Yeah.

But did you get legal counsel on that? We did. Yep. We had a lawyer that looked out for everything and looked at. I mean, we had very legal intensive stuff. Not expensive, but just. Smart. Covered your butt.

All right. Once you bought it, what did you do with it? Nothing. No, we went through. It had a lot of vacant use. I think there were 11 out of the 48. So there's 48 lots, zone for 50. But out of the 48 lots, I think there was like three empty or four empty lots.

And then another like, I think it was 10 empty homes. Like that weren't even lived in. They were just kind of trashed. So for the last, what are we at now? Six months now since closing on it, we've been just systematically one after another after another. I think we're on like the last one or two homes right now. And as we fix them up, we are now selling them on a contract to the tenants who are buying it.

They're coming with a down payment and then we're putting them on a actual contract. So it's their home. They're renting the lot, but it's actually their house. They're buying from us on a seller finance contract, which is really what drove me to want to try a mobile home park because that's just kind of a cool way. So they take care of their own maintenance, their own repairs. We just own the land. We are officially landlords.

Why? You just like to be some form of lord. I did. I can tell by the way you're saying that. Lord Brandon. Lord of land. All right. Why would an investor want to own the plot of land and rent out the space as opposed to

owning the land and the house? Yeah. I mean, the real big reasons because mobile homes are obviously people know them is like depreciating things. Like they tend to break down faster over time. So if a toilet breaks, I got to send, let's say I own the house, right? I own the thing and I rent it out as a normal rental. That's fine.

But I rented out and the toilet breaks, I got to send a plumber over. My property manager has to send a plumber over. Property manager takes a cut. Plumber is going to charge $200, by the time I'm all of sudden done to fix a flapper inside a toilet, it's going to cost me $250. When the tenant has needs a flapper, the tenant goes to Home Depot, picks up a $3 flapper and puts it in himself. So this way, the tenant can own their own home, which is great.

You get typically a higher quality tenant because they have like buyer mentality, but they can fix their own stuff when it breaks and I don't have to. Plus, they don't move as often because it's their house. It's expensive to move a mobile home, so they stay there forever. That's kind of the idea. So is it fair to say that on the scale of passivity, this is moving you closer towards passiveness? This is very much moving me towards passiveness. All right.

The next question is normally, what was the outcome? And it sounds like you're kind of in the process right now. So tell me like how far into this process are you and when do you expect to have it turned around? Yeah. So where are we? What's the outcome? So essentially what we're hoping, let me actually pull my exact number here. Where did I put my exact number?

Okay. So conservatively, my estimate is like the first year, not making a ton of cash flow. In fact, we're just putting in most things back into the deal. Let's see, our after debt cash flow, we're looking at $14,000 this year. So this year, again, not a whole ton. Next year, 28, the year after 47, then 52. Those are my projections. And it should stick in the 50,000-ish range per year.

year. The property value should climb as well in there. And I'm trying to find that on my spreadsheet here, my numbers. I just have a Google a slideshow that I put all this together. But anyway, it's going really well. Like every month now, if we don't count the fact that we're doing rehabs, we're ahead of schedule. So the outcome, it's going better than I expected in every way. We're not taking any money though right now because all the money we get, we're dumping into the rehabs as we get it. There's two ways of kind of thinking about it. We could be taking cash flow and then just using the rehab money that we had raised, which we raised like an extra $150,000 for rehab,

or we just put it all in the one checking account and we're just using it all. That's what we're doing. So anyway, so when I look at it, it's actually outperforming what I thought it would, which is super exciting, which will, yeah, it's fun. All right. Tell me a little about the lessons that you learned through this process.

Good question. So earlier we talked about on the show, we talked about setting up your business in a way that, you are not at the center of it. That's what was so fun and powerful about this. That's the biggest lesson I learned was, I used a partner, Ryan Murdoch, who's like the boots on the ground.

He knows that market, like the back of his hand. He's a property manager there. He owns a bunch of his own stuff. He's dealing with the day-to-day. It's amazing. And Ryan, if you're listening to this, you are awesome.

Also, bringing in somebody else to bring the most of the money, most of the financing, also awesome because I didn't have to bring most of the money. So I kind of, like, coordinate a lot of the big picture stuff, and that's exactly where it would be. So the lesson I learned was that feels really, really good and I want to do more of that.

I want to bring together smart people and talented people and people with some cash and be the guy at the middle of it. So I learned that. I also learned that mobile home parks. They're just, they're awesome. I'm really enjoying them a lot. So there you go. That's fantastic. That was a deep dive. I don't think you can, uh, I don't think there, you can put a price tag on you learning that you want to be the guy that brings everybody together as opposed to just the guy who's doing the work of the deal. Like, who knows what doors had to open for you in your life? Yeah, it took a long time to get there.

So, all right. Well, anyway, deep dive with Brandon. Blu, plop. All right. So we got to be moving on with this show. This is a long show. So I'm going to shift gears here and head over to the fire round. It's time for the fire round.

All right, let's get to the fire round. These questions come direct out of the bigger pockets forums. And we're going to fire them at one another because we don't have a guess. So, David, I'll ask you this. one. I live in the DFW area in Texas. I've been in Texas 10 years. I see rents are going up. And I'd rather not pay rent. I'd rather just have a mortgage. I'm just getting started. I'm looking for a quadplex or a fourplex to hack. I'll be using an FHA loan. Any advice for me? Absolutely. First piece of advice is get yourself pre-approved. You want to know that you can get a loan and you

want to know what it's going to cost you to get that loan before you start looking at properties. If you're looking to hack a property, that means that you're trying to live there without having to spend much money or no money while you're in the property. You're going to be needing to know what the rents are for the area, and that doesn't help you if you don't know what your payments are going to be. So find out what you're pre-approved for, find out what the fourplexes cost within some ballpark figure, figure out what your mortgage will be, then add tax and insurance and your PMI, because if you're getting an FHA loan, there's always PMI associated with those. I believe they call it MIP when it's on a FHA loan. but basically find out what are your expenses going to be. Then start looking at how do I try to find a property that will cover those expenses. How much do I need to make on every unit in order to live here either for free or for cheap for pretty close to it?

Once you've got that done, find a realtor who has some kind of experience, either working with buyers or working with investors or both and have them start sending you properties to look at that are either duplexes, triplexes, or quadplexes if that's what you want. Some things to be aware of. You don't want to buy every fourplex you see because many times they're only in areas that are zoned for multifamily. And that's usually the worst part of town. Okay. So you have to be careful. It's awesome to house hack, but that doesn't mean that every house you see is a good fit for a house hack.

So make sure that the demographics are good, that the crime isn't very bad, that your tenants aren't going to be like stopping to pay rent after two months and you're going to have constant evictions. You want to make sure that you're in an area that you like and you're going to be living there. So you want to feel comfortable living there. once you get a good idea where you're going to be buying, then ask your realtor to start showing you the different properties, find the one you like. If you're using an FHA loan, you don't have a ton of money because you're only putting three and a half percent down.

So you're probably going to have to try to avoid something that has a really like a lot of rehab cost. So just don't expect a great deal. That's okay. You don't need a great deal if you're looking at house hack. You have realistic expectations. You don't have a ton of money to put down. You can't take a big rehab. It's okay if you're paying near market value if you're house hacking.

because it's not necessarily about how cheap you got the house for. It's about the fact that it's much better option than renting and paying off someone's a mortgage, like you said. So this is my favorite way for new investors to get started investing in real estate. Once you do this, you're going to learn from it. I would try to do the same thing again the next year and the same thing again the next year and the same thing after that. Wow.

That was really in depth. That's really good. All right. All right. Top that. Your question. I will. Should I aggressively pay down the mortgage on my properties or use all.

my extra income to save for more deals. Well, you took a long time to answer. I'm going to answer with one word. It depends. Next question. That's two words. Oh, you're right. No, yeah, okay, it depends, obviously, but like what's your goal? Like in the beginning of my business, I wanted cash flow. It's all I wanted. So I wanted more properties and more cash flow. Today, I'm shifting a little bit, and I wouldn't mind having more wealth and equity in long term because I already have enough cash flow to pay my bills. So now I'm actually paying off some properties because I want that security. So, you know, if your spouse really wants paid off properties, maybe you do that. You know, paid off properties gives you less risk, which is great.

That's why Dave Ramsey advises it. And I think it's not a bad idea. If you want more fast growth and you want to be a little more risky, then go buy more deals. Let's try like self-awareness and knowing what you want is just so important. Like, what do you really want? Like, what are you trying to do? And then do it. There's no really right or wrong.

It's very much it depends. Depends. All right. Speaking of depends, David. Sorry. Sorry. Number three, home equity loans, child, middle,

childless middle school humor. Number three, home equity loan or a home equity line of credit. What should I get? I have some equity in my house. What should I get? A home equity loan or a line of credit. And what is the difference for those who don't know?

Perfect. You got to start answering this question by defining what the two options are. So a home equity loan is also called a helock. It's basically a loan that a bank gives you that is supported by the equity in your home. That's the collateral. So it's like taking out a second mortgage, which they're comfortable to do if you have enough equity. A regular like loan is a typically first position loan.

So if you were to do that, you would have to refinance by paying off your first mortgage, getting a loan that would then give you extra cash in. So if you owe $200,000 on your house, you might refinance and be able to get a loan for $300,000, in which case you would take $100,000 and put that cash in your pocket to invest with. So this question comes up a lot. Should I do the he lock and borrow against my equity? Or should I do a complete refinance and get more cash back out? The reason that the helock is usually the better choice is twofold.

One, when you do a he lock, you typically pay for an appraisal because the bank has to make sure that what you are going to be borrowing against your house is justified by the price of your house. Now, that appraisal will exist for the other loan as well. But that is the only loan or sorry, the only money that you have to pay on this entire deal is the appraisal for a HELOC. Second reason is with a HELOC, you're only going to pay interest on the money that you are using. It is like having a credit card with a 4 or 5% interest rate. That's about where interest rates are right now. They are adjustable.

So they'll change as the Fed rate changes, which is coincidentally the only negative side of a helock. However, you don't pay to have a line of credit on your credit card of $50,000 or $20,000. You only pay when you actually use the money. That's why I love a helock. If you don't have a deal, the line of credit sits there and it's available to you so that when you do have a deal, you can access it. It's typically interest only. You're paying very little money.

You use the helock. And then you either pay it back off with the cash of whatever you bought, you buy something, you refinance it, you pay back the helic. It's much cheaper. And then the biggest reason is when you're doing a helic because you're only paying for an appraisal, you don't have to pay closing costs. Guys, these are really big. when you refinance, you're probably going to be, depending on the loan size, spending between

$5,000 and $15,000 in closing costs for your loan, that it gets tacked onto the loan balance, right? When you do a HELOC, you're literally avoiding $5 to $15,000 in most cases of money that you're spending. So it's different for everybody. If you're afraid, like, hey, interest rates might start going up. You might not want an adjustable rate like a HELOC. You want to pull the money out on a loan. And it definitely would only make sense to do that for a big loan balance. If you want to pull out 500 grand on a refinance and use that to go buy an apartment complex or

somewhere, that might make sense. But if you're only pulling out $20,000, $40,000 and you're going to be spending $10,000 in closing costs, that's literally 25% of what you could be pulling out, that you're wasting closing costs. So, helox are much cheaper. They're more efficient. They're more flexible. Overall, they're like an amazing loan product.

I look at it like I'm getting a loan for myself at a really cheap interest rate. I take out helix on all of my properties because it is the cheapest way for me to borrow money. If I go borrow money from a hard money lender or from a private lender or from Brandon, he's going to charge me a whole lot more than I'm going to charge myself on a Helock. Yep. That is true. That is true. All right.

All right. Wow. That was a really. Yeah, you're good at these fire round questions. Good job. Fire. All right. Last question.

I'm looking to find a mentor willing to trade my work for your knowledge and expertise, highly motivated and anxious to learn. I love that Brandon's getting this question, not me. How do I find a mentor? I don't know why you don't want this question. But, okay, my first thought is this. A lot of people say this, and this is how it comes across, and I don't want to discourage you at all.

But a lot of times it comes across like this, people call me up and they want to get coffee. They want me to be their mentor. And they're like, teach me every single thing you possibly know, and then tell me what to do and I'll go do it. But then I'm like, oh, that's so mentally draining. I don't know what you can do. I don't know what your skills are.

Now are you putting me to work as a mentor. I have to do all this work. So the first thought is be very careful on how you approach people. Mentorships should be built very, very organically and never use the word mentor with somebody. Build a friendship. That's all it is. Build friendship with people with people who are experienced. That said, I love people who are excited about real estate and who are young and up and coming, and then I can help mentor, right?

I love that. I would offer, I guess I would be specific about what work you can do. For example, if you come to me and say, hey, Brandon, what do you want me to do? I'll do anything for you. Again, it puts me into, like, panic. I don't know. I can't find anything, right? But if you're like, hey, Brandon, I would like to go door knock all day on Saturday every

Saturday for the next eight weeks. Would that be okay? And would you tell me what to say when somebody answers the door and what doors I should knock on? I'd be like, sure. Why don't you go look for anything that looks vacant or anything that looks nasty? You go knock on their door and just tell them you're a buyer. You're right. Does that make sense?

You get very specific and I can answer a very specific question. And once you're doing that for me, our friendship's going to naturally develop, right? you're going to stop by my house, I'm going to talk to you, we're going to become good friends. How do you find those people initially? Go to Real estate meetups in your area. Go to BiggerPockets.com slash events, EVE-N-T-S. You'll find meetups in your area all the time. And if there isn't one in your area, then go and start one in your area.

You can be the hub. And what a better way to meet people. I mean, there's not a lot of better ways than that to go and meet influential real estate investor in your area than be the person that organizes events. So there you go. Anything you want to add to that, David? That's why I'm glad you answered it because you did such a good job. and you said it so much nicer.

What I love about what you said is that you're actually pointing out that when you say to somebody, teach me everything you know, help me, or I'll do anything, tell me what to do, you're actually putting responsibility on somebody else to do something that they never asked for, right? And a lot of people get upset like, well, why is nobody wanting to help me? I'm offering something for free, but no, you gave that person a job. You said, I need you to figure out what I'm supposed to do, how to make me good at it. And if it goes bad, you're going to feel bad because you were the one that told me what to go do,

as opposed to approach them and saying, I know I can do this. Is there any value in that for you? Or tell me a little bit about what struggles you're having and I'll see if I can do anything to help. Building a friendship is completely different. The minute you throw that word mentor out there, what people hear is you're looking for something for free.

It doesn't have the same ring that it used to. You know, a real-life example of that. He's got him, Chris, he's in my area. I mentioned before in the podcast. But Chris came to me, and we've known each other on and off for a little while, and he's got excited about real estate. Probably he's listening to this podcast right now. what's up Chris. And he came to me and basically said, hey, do you need any help producing videos?

Yeah, I've got a little bit of a video experience. You need any help like filming or whatever? I'm like, yeah, that'd be awesome. Like, and like, so I hired him like one day a week for like four hours. He comes over. And now as you guys have noticed, but like I've been increasing my video output on the bigger pockets YouTube channel like tremendously and having like multiple angles and all this stuff. Because he just shows up and works. And I'm even, I even not like, I wouldn't let him do it for free because I felt bad. So I'm like paying him to come over and help me. and he's been a tremendous help. So guess what?

When he's sitting across the room for me editing a video, he looks over and he's like, hey, Brandon, how do I get him? How do I get private lending? I'm like, yeah, try this and this and this. I was like, actually, let's go make a video on it. We like walk outside and make a video, right? Like, what do you think he's doing?

He's, I'm being his mentor. And like he never brought the word up one time, completely organic. He offered specifically how to help me. And actually, just today, he told me he got a deal under contract. He got like a duplex under contract in town. Awesome. That a baby, Chris.

Yeah, he's doing awesome because, like, I don't know what I saying, I even did that much. Honestly, like, I don't, I feel like I hardly helped him. Like, I feel like I'm taking advantage of him. You know, but like, I don't know, maybe it was just like the confidence of being around, like an experienced investor, like made him feel comfortable to go make an offer. And those couple questions he asked me, they were very direct. I need a private lender. What should I say to this guy? I talked to this guy for bigger pockets.

Here's what he asked me. What should I tell him? Those are the things that make the difference. So, anyway, that was a long fire round. Might be a world record for fire-round length, but hopefully people like that stuff. World record for awesome. All right, we got to get moving on. We have one more second one of the show, which we lovingly refer to as our famous four.

All righty, thank you, Mindy. And with that, let's jump into the famous four. These are the same four questions we ask every guest every week. Obviously, David and I have been on the show before, so we might alter these questions a little bit, but we'll each kind of answer. So, David, real estate books. You reading anything new lately? I'm not reading any real estate books right now. I've only been reading business books.

How about you, Brandon? You know, I actually am. I actually read two real estate books because I read so many real estate books in the day. I slowed down on them a lot. But recently I read two different real estate books. First of all, there is a book that is coming out. Actually, I think we launched it.

Just a few. Well, we're recording this before the launch, but now it's already come out. Anyway, Matt Faircloss book on Raising Private Capital. So I'm working through that one. And also, we have another book that hasn't been announced yet, but it's coming out in a few weeks or maybe a month.

It's called Retire Early with Real Estate. It's all about financial freedom and early retirement by Chad Carson. It's not out yet, but if you're listening to this in the future, it probably will be. Anyway, both those books are unbelievably good. So those are the two real estate books that I've been working through. What about business books? You know, one or two, 100. Now, the other day, it was a couple days before my birthday,

and I was like, I'm going to order myself some birthday gifts. So I ordered myself 12 books from Amazon. Anyway, the one that I'm currently going through, I'm trying to read one at a time, but I never read one book at a time. But I'm reading called, well, it's called Own the Day, I think. Own the Day, Own Your Life by Aubrey Marcus. I might be butchering that name slightly, but it's really good so far. I'm really liking it a lot. And the other one I've been reading actually for like a year now.

It's like I pick up a chapter at a time, but I just started it again. It's called 59 seconds. And that's really well as well. It's like scientific research studies around success. It's really good. Anyway, what about you? I read the book that when we interviewed Paul, Paul Thompson, he recommended that we read The Big Leap.

It might be the only book I've ever read that you haven't, it sounds like. I have never read that. It's a really good book. It's about the upper limit problem, which they define as when all of us have a thermostat of how much we think we deserve and how much we're worth. And if we get too close to crossing that, we may subconsciously sabotage ourselves. And as you're pushing to get more and more out of yourself and challenging things you never did before, like we talked about earlier, you're trying to go one and a half times bigger

with every step you take. You are going to hit your limit. And if you're not prepared for what's going to happen, you end up sabotaging yourself and holding yourself back. So I really like that book. And then I also mentioned earlier, So Good They Can Ignore You. I just read that one. It's all about rather than taking an approach in life of, well, I want to follow my dream.

And it's the world's job to make me happy and fun what my dream is. It's becoming so good at what you do that you can name the terms and conditions of your own life. And because you're so good, people have to give it to you. and then you can create the life you want based on taking responsibility for becoming like a master craftsman as opposed to the responsibility that it's other people's job in the world to help you. And that might relate a little bit to our mentor question. It's two different ways of looking at it. You know, like I am so good at what I do that you want me being your friend and working for you as opposed to it's my dream to invest in real estate, Brandon.

How can I make that happen? That's so good. Cannot have said any better myself. There's one more book I read recently that I want to recommend. It's really good. It's called The High Performance Habits by Brendan Burchard. fantastic book as well. I've been bragging to everybody about how awesome it is. I don't know if Bragan's our word. I've been broadcasting. Oh, it's funny. You say that. There's a realtor with

Keller Williams, Laura Fernandez, and she's been bugging me that I need to go read that book. It was actually just this weekend she was telling me. That's funny. Well, here's why it's so good. Here's what I love about this book. It's like a lot of success books or, you know, personal development books are like, you suck. Here's how to become better, right? This book's like, you're already the top of your game right now. Here's how to make sure you hold that for the next 10 years of your life and it doesn't consume you. That's what I love. It was like a different. It was like a different an approach of like, you're already awesome. You already do good stuff.

You don't need like wake up early messages necessarily, even though those are really, really good. But like, this is like, this is exactly what you're going to do to go from a millionaire to a billionaire. That's what was cool about it. That's awesome. Anyway, there we go. All right.

We got to move on. Next question number three. Hobbies. What have been doing for fun lately? Oh, I don't have fun right now. You know, I started working out again. That's been something I've been doing. And I go running every day now.

That's been pretty good. How about you, though? you probably got way cooler stuff to talk about. I don't know. Now I started running also. I ran 7.3 miles on my birthday. I was a record for running. I just, as of like 20 minutes ago,

agreed to run a, just while we were reporting this. Yeah, half iron man. So I'm going to do the ocean side half iron man. I'm now telling everybody that. So I have to do it. But I'm going to do that next April.

That'll be fun. So I got to start training for that. And I am at least temporarily. I don't know how long I'll stay. Moving to Hawaii. So we bought a, We're closing on Monday of this coming week, which when this comes out, I'll already be there. But anyway, moving to the island of Maui.

You always have to one up me. I say, I started working out. You say, I signed up for a half Iron Man. I say I go running every day. You say I'm moving to Hawaii. Awesome. Yeah, you know, that's what I'm, I bought a, I bought a little property there. We're going to do a little house hack actually in Maui.

I'm excited to go with you. Drinking my own Kool-Aid. Yeah, you're going to come, you're going to come visit like every week. All the time. So it's going to be great. Yeah, maybe not every weekend. Heather might get mad at you. David's here again? Yeah, you know, it's like, do we just become best friends? I like that. As long as Rosie's happy, I think Heather will be happy.

She's like the gatekeeper. That's who you got to win over. Tough kid, but a super cutie, man. I love your daughter. She's a good kid. Anyway, all right, last question. What do you think separates successful real estate investors from those who give up fail and never get started? You know, I've changed my opinion on this. I used to say that like the grit, perseverance. It's not that. I think it's expectations now. I think if you walk into this expecting it to be easy or it happens quickly or you hear what Brandon and I are talking and you think you're going to step in there and do it, you're going to give up very quickly because you're going to interpret that.

Like there's something wrong with you and you're not good at this. If you walk into it expecting a dog fight, you are going to naturally have to persevere through that. And then once you get a couple under your belt, you realize I've made that way harder on myself than it needs to be. It wasn't that bad. And I'm trying to do this with everything in life. In the book I'm writing in the Burr book, I talk a lot about.

how your expectations need to be when you start something new, I'm going to suck at this. The first time I went snowboarding was miserable. The first time I went surfing with you was freaking exhausting. You could do this with anything. The first time you go in the gym when you have been working out, you're going to be sore and you're not going to be very strong. It is only through sticking with something and repeating it that you start to develop any kind of mastery over that thing.

And that's when it will become fun, right? So if my expectations are, hey, I'm going to start this new thing and it's going to suck. But if I just keep doing it, eventually I'll get good. I won't quit hardly anything. If your expectations are, oh, David Green does this, Brandon does this, I could go do that. You're going to go try to surf three or four waves. You're going to hate it.

You're going to think surfing's not for me. So that's what I think. It's adjusting your expectations to a reasonable level and not letting, not taking it personally if you don't crush it right away. Wow, that was really good. The only thing I want to add to that is I'm watching you on video right now. I even had to take a picture because you have the total like Mike Tyson face tattoo, but with light.

That is funny. I'll tell you what, Brandon, you show that picture around town again? Well, Brandon and I've actually been recording for so long today that the sun is sitting as we are talking. It's been like four and a half hours that we've been recording stuff here. So that's why I look like Mike Tyson. Yeah, people won't know this. This is true. Right now, it sounds like this has been one podcast, right?

You guys are listening to this. It's been one long podcast, right? But in reality, we actually split this in half. We recorded for an hour. Then we stopped and we did a live webinar together to like. a thousand people on bigger pockets. And then we continued the second half of this webinar, our podcast.

So we have been going, yeah, we went for two hours on the webinar and now almost an hour and a half, hour, 45, I don't know, on this. So Heather, text me and said,

dinner's ready. So let's wrap this thing up. So my answer is going to be exactly what you just said, I think. I don't know what you said, but I'm sure it was good. No, I actually would say,

well, things that, like, they have a process. They don't focus so much on goal. They focus on what can I do now? And they're constantly saying, what do I do?

Like, they take action on these. these things. And there's people who take action that still suck. It's like they take the right action, right? They like continually asking themselves, well, how do I get further? How to get closer to that goal? How do I do better? It's not just randomly doing jobs and doing work. It's like, how do I do a better job next time? So I think that's a huge component of it. Anyway, with that, that's all we got. So where can people find out more about us? Yeah. Instagram is my jam. At beardy Brandon. At Beardy Brandon. At Beardy Brandon on Instagram. Same as me. If you, if you,

If you know me and I don't reply to you, please don't take it. I have 425 unread text messages right now that I can't keep up with. But on Instagram, I have two, right? So use your head of which one you think you'd be a better chance of getting a hold of me. And I'm sure it's very similar for Brandon. So follow us on social media, comment on this stuff we say. If we see your name show up enough times, that's how you become a friend of somebody, not a mentor.

And I think that's the best way to get a hold of people that you want to have a bigger place in life. Yeah, very well said. I actually have like 400 unread messages on Instagram. So you got to text, Brandon. You got to Instagram me. Yeah. Yeah, there you go. All right, guys, thanks so much for showing up today and being a part of this podcast episode. We hope you learned a lot. We hope you're inspired. You're going to take this and run with it. But that's it. That's our show. So anything you want to leave us with, David?

Let us know if you guys like these solo shows. I think that they're great. But we want to make sure that the listeners are getting what they want. Leave us some comments about what you liked, what you didn't like. And make sure you're subscribing to the podcast. But that being said, this is David Green for Brandon. know how many words is to Turner, signing up. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype,

you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate Podcast. sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com. The content of this podcast is for

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