BiggerPockets Real Estate Podcast - 293: How to Retire Early With Real Estate & Do What Matters More with Chad Carson

Episode Date: August 23, 2018

Have you ever thought about retiring early, traveling, and living your best life now? On today’s show, we interview Chad Carson, author of the new BiggerPockets Publishing book Retire Early With Real Estate. Today Chad shares how he and his partner were able to accumulate 90 units and live purely off the money generated by their portfolio! In this episode, learn how Chad got started and the steps he took to elevate his business and which strategies he used to make $120,000 on one flip! Chad’s story covers the gamut of flipping, wholesaling, buy-and-hold, and more. If you want to know what it looks like to retire early with real estate (including what you may be doing wrong right now, and how to change that), this is an episode you definitely want to download now! In This Episode We Cover: Chad’s strategies for retiring early through real estate If focusing on cash flow or equity is the smarter move How to control your budget If offense or defense is more important when it comes to building wealth How Chad made $120K in one flip How tax-lien strategies work — and what Chad did to capitalize on them Why “starter” investment homes aren’t always the best choice to stick with How to transition from wholesaling to other investment strategies How many hours you can expect to work each week once you’ve retired early with real estate How “the stack” can help you grow your portfolio fast and efficiently How house hacking can lead to an early retirement And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar BiggerPockets Podcast 084: Getting Started with Creative Finance and Designing Your Ideal Lifestyle With Chad Carson BiggerPockets Podcast 141: 7 Ways to Find Incredible Real Estate Deals with Chad Carson BiggerPockets Store BiggerPockets Money Podcast The Shockingly Simple Math Behind Early Retirement – Mr. Money Mustache Books Mentioned in this Show Retire Early With Real Estate by Chad Carson 4-Hour Work Week by Timothy Ferriss Building Wealth One House at a Time by John Schaub Big Shifts Ahead by John Burns Wooden by John Wooden Fire Round Questions What is the best advice you got when you where first starting out or before you purchase your first investment? How long do you spend each day, working with real estate? Can you retire early with a few paid off rentals? Can I really retire early on 4 duplexes? Is house hacking to early retirement a viable strategy? Real estate or Roth IRA? How do you set your criteria for rental property investing? Tweetable Topics: “Our core skill as an investor is figuring the value of real estate.” (Tweet This!) Connect with Chad Chad’s BiggerPockets Profile Coach Carson Website Chad’s LinkedIn Profile Chad’s Facebook Profile Chad’s Instagram Profile Chad’s Twitter Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 293. I didn't have a really good strategy starting off. I just started buying this and I bought this little in the south. We have these textile, old textile mills. And there's usually the most run-down areas in town. And you have these old 1920s houses, mill houses. And we bought those because they were cheap and they looked great. And the numbers looked awesome on paper.

But we especially during the vacancy periods in 2008 and 9, we found out that like not only did have a lot of vacancies because we had a lot more turnover, We also had a lot of capital expenses on those old properties. And so we're still, I call these like my bubble gum on the bottom of my shoe properties. Like I still have them. I can't, I'm kind of pulling the properties off and trying to like throw them in the trash can. But sometimes they like still stick on my shoe and I keep pulling it off. And so the issue of that is it's easier to make mistakes on underestimating repairs when you and cash flow numbers up front.

The other alternative, which I was more successful with, this by chance, was buying. 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 Brandon Turner. Today's host of the Bigger Pockets podcast.

Here with my barking dog in the background. Did you hear that, David? Oh, yeah. My dog's like going crazy. with my barking dog in the background, Mr. David Green. You're doing David. Oh, that was funny. I'm doing good, man. Just got off the phone with my contractor before this. And I have a nightmare property. I bought at an auction that the city's making me go through this really ridiculous permit process on. But we finally made some progress. So it looks like six months after buying it, we're finally going to be able to start construction in a month or two. And I'll have some good news.

There you go. I can't wait to hear it. So super cool. Well, guess what I'm doing next week? You're moving to Norway. That is almost correct. No, you know what I'm doing next week. I'm actually, yeah. So for those who don't know, we've talked a little bit about on the podcast last few weeks. I'm actually going to be relocating, at least temporarily. I don't know how long I'll stay over to the island of Maui, which would be a lot of fun.

I bought a triplex out there, and I'm super pumped to house hack my way into a beautiful ocean view. It's, I don't know, I'm going to have to put that into a book someday, how to house hack your way to live in paradise for free. So that's going to be fun. Anyway, I'm so big. I got like a big shipping container out in my driver right now. We're loading it up. And I'm going to be a Hawaiian resident for a while, which should be fun. And you're coming out.

You're going to hang out with me. Oh, yeah, I'll be there to move you in, buddy. You will not be alone. It's actually kind of funny. You mentioned that because today's guest is all about retiring early through real estate, which is a lot. Very similar. You too could be living in Hawaii and having a good time if you could retire from real estate.

There you go. So that's a very fitting topic of today's show. Again, today we've got an interview with Chad Carson. Chad is one of my good buddies, and he is a phenomenal real estate investor. He's been on the show a few times in the past. We'll link to those other shows if you go to the show notes at biggerpockets.com. So I show 293. But this particular episode, we really focus on a topic, and that is how to retire early,

meaning not when you're 65 and too old to do anything but play shuffleboard, but how do you get out of your job in the next five, 10 years, 15 years, if you want to be conservative, three years, if you want to be crazy quick, What does that look like? And how do you think about it? And he's really, really philosophical in a good way about that. Like, how do you kind of approach the whole thing? So today's show was unbelievable.

I absolutely love this guy. And I think you guys are like it as well. And it actually leads to today's quick tip as well. Because today's quick tip is actually very simple. Chad wrote a book on retiring early through real estate. Bigger Pockets is publishing it. Bigger Pockets Publishing, put it out. It's out today.

The day this podcast comes out, the book actually comes out as well. So the quick tip is very simple. Look, if you care about retiring early, even shaving off a few years after retirement, or you just want to read a fantastic real estate book, go to biggerpockets.com slash retire early. Again, biggerpockets.com slash retire early and pick it up. You can get it as cheap as 20 bucks on digital, or you can get the ultimate edition, which includes physical, digital, audio, bonus stuff, all that. You can get that at bigger pockets.com slash retire early. It's fantastic. Check it out. Managing properties can feel like a full-on circus. You're juggling vendors, tracking payments, chasing approvals across multiple properties, and maybe a few HOAs, all while trying to keep tenants happy and owners confident.

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That's bill.com slash bigger pockets. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls,

active stress? Here's a better question. What if you could buy brand new construction homes, 10% below market value, in the best markets across the country, without making real estate

your second job? That's exactly what rent-to-retirement does. They're a full-service, turn-key investment company, handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more.

Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes, 10% below market value in the best markets across the country without making real estate your second job. That's exactly what rent to retirement does. They're a full service, turnkey investment company, handling everything for you.

In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Again, we are talking with Chad Carson, real estate investor, world traveler.

He just spent like 18 months down in like South America doing amazing things down there. He'll a little bit about that today. And he's going to share with us again, how to retire early. So without further ado, let's bring him in. All right, welcome back to the Bigger Pockets podcast. Chad, how you doing, man? I'm awesome. Good to be back with you guys.

Yeah, this should be fun today because, you know, the other day you and I had lunch together. He had a really good Caesar salad in Denver, even though you're not. You don't live in Denver, I don't live in Denver. We happened to both be there the same time. We had the best Caesar salad of my life there. Good recommendation, by the way. We were sitting next to a big beer. There was like 50 beers.

Yeah. And we just got Caesar salads. How good are these salads that you guys both flew into Denver just to get it? They are that good. I'm not even clean. It was the best of the salad I've ever had. So I wish I could remember the name of the place. I'd give it a shout out.

But anyway, it's in Denver. I found it. It's in like the Rhino District. So go to every restaurant in the Rhino District. And you'll find it eventually. For Caesar. Yeah, Asper Caesar. Anyway, all right, so while we were there,

I was sitting there talking to you about, like, your journey the last couple of years, and it was fascinating. And I thought, man, we need to get Chad back on the show, talk to him about what he's doing. And it just so coincidentally happens that you are coming out with a book published through Bigger Pockets.

I believe the day this show comes out, actually comes out today, that book does. And it's, I've got it. It's fantastic. And I'm super excited for people to read it. It's going to change a ton of life.

So we'll get some of that later. So why do we start with who are you? I mean, like, We'll go back and listen to your whole story, but tell us a little bit about yourself with a little journey and bring this up to today. Yeah, so my real estate investing journey is about a 16 year long journey. And if you condensed that down, basically, I got out of college and instead of me taking

like a regular job route, I was a pre-med major. So I thought about going to med school and doing some stuff like that. I just jumped into real estate. So I was kind of the crazy route. Let's see if I can make some money. And so I was just flipping houses, basically. I was doing some wholesaling, buy low, sell a little bit higher. And then eventually after a couple years, a business partner and I,

and we've been doing it together for 16 years, started flipping more. So fixing and flipping. And so that was how I put food on the table. And I really learned how to find deals that way. And I was hustling and doing just about every way you can think of to find deals and got good at that. But then, you know, we sort of had a wake-up moment in 2007 and 8 because that was about three years after we started.

And as everybody knows, you know, the market starts going down. things are changing really fast. And here we are as new investors who pretty highly leveraged as well. And we had been successful finding deals. But we got so successful that we had a lot of deals coming in. And we had to sort of step back and say, all right, wait a second. You know, we need to understand like why exactly are we doing this. And so, you know, we kind of got honed in on like we need to build some income and have

some more income properties instead of just flipping all the time. And so that's been sort of my trend since then is to, you know, let's flip some to make some money, put some food on the table, but let's also buy, you know, these long-term properties, produce income, get them stable to where you can live off of it and do other things. Like for me, traveling is really important. I've taken lots of trips and many retirements abroad with my wife and my family. And so things like that are kind of mixing that in real estate has been a lot of fun. That's been sort of my story. So you mentioned mini retirement. I want to pull that phrase out here because like for those people who have read the four-hour work

week, that would sound familiar. But for those who have not or don't remember, What do you mean by a mini retirement? And can you give us an example? Yeah. And that was sort of, I read that book at the same time when I was having those kind of like step back, aha moments, why am I doing all this? I read Tim Paris's book. And there's this concept that basically like instead of deferring all of the fun things in life, all the things that you want to do once someday when you know, when you have enough money, when you can do this, you know, 30, 40 years from now, that's sort of the traditional model. Well, a different model is, you know, why not intersperse those throughout your life? You know, it might start with a two week trip. It might start with a month. Eventually, it might be a year. But you just, you take time away from, you kind of press pause on your normal kind of business, your life, your work, and you detach yourself and you do something.

And it could be travel. It could be going back to school. It could be spending time with your kids. In my case, it was travel. We would go, my wife and I, before we had kids, went in 2009 to South America, brought our backpacks, just traveled from Peru. I learned how to speak Spanish. We went down to Patagonia and Chile and went to like the southern tip of the world.

where you see penguins and like the wind's blowing 30 miles per hour, it's just kind of crazy. And then went up to Buenos Aires. And so it's just one of those experiences that like I'm a go-getter kind of type A type person. I like to make it happen. And for me, like detaching yourself and leaving for four months and like just putting it all aside, it kind of drove me crazy at first a little bit. But then, but it was such a good experience because when I got back in the saddle and I was buying and flipping again and doing the rental properties, I had a really different perspective

on reminding myself, like, why am I doing this? This is why I'm actually making money in the first place. Yeah. You know, I think a lot of times we get caught up in that, like, just build a bigger business, go bigger, better, like, make more money all the time. You forget, like, what was that early inspiration that inspired us to get to real estate? It would probably had something around freedom or travel or family or hobbies, right? Like, most of us didn't get into real estate to do that. But yeah, when I read that four-hour work week, yeah, the mini-retirement thing just like blew my mind. I'm like, what a great idea. Why wait until you're 70 to go retire. Right. Yeah. And so many people, I mean, we kind of get caught in a traditional path.

You know, and real estate's different. That's one reason I wrote the book is because you have a lot more control over the timing of how much income you produce, how successful you can be. If you just put your money in the stock market, which has worked for a lot of people, you're sort at the mercy of the ups and downs of the market, the timing, and it can work. But that path never really appealed to me. I loved real estate. And I think a lot of people at bigger pockets love real estate because you do have to get your hands dirty. You've got to go build a business around it, but it's sort of up to you.

And if you want to build a life or you take many retirements every two years, awesome. You can do that. Or if you want to go build the biggest empire real estate's ever seen, you can do that too. There's so much variability. And so,

but it kind of starts with, that's why you see, do what matters in the background. That's sort of the theme of the book as well. Is it that you start with that and then you build, you can build a business around whatever that type of lifestyle that you want.

And it is very possible. So speaking about empires, how many units have you built your portfolio up to now, Chad? Yeah. So my business partner and I have 90 units. And some of those are some notes and kind of private notes and things like that. But, you know, we have basically 90 front doors that we have. And we manage some of those. And we also have a third party manager.

It manages some of those as well. That's awesome. And what point do you feel like you hit the financial freedom point to where you could start doing all this cool stuff that definitely doesn't suck that you have. going on in your life. Yeah, good question. Some of my earlier trips were I wasn't, I didn't feel like, hey, man, I've got this income coming in. It's never going to stop. I've got plenty of it. It was, it was coming in, but I had to save up the cash on the side ahead of time. Like in 2009, when we went, we had enough rentals on paper to make it work, but I was nervous, you know, capital expenses were

going up. I had tons of vacancies. And so I wasn't really confident that that passive income was really where it needed to be. So I just, you know, saved up 20 grand, you know, instead of buying a new car, I saved up 20 grand and said, we're just going to use that to go travel abroad. And so that was kind of one stage. But recently, like 2018, last year when we went on our trip, it was more about, all right, I feel really comfortable. The income's coming in. I have management in place.

You know, it was more of like the true stage where you can just, I can just live off my income and just do something else for a little while. So a lot of people ask that question. Like, I mean, I've heard people criticize the four-hour work week for this. And I think unjustifiably, is that a word? It is now. Like this idea where people say, well, I don't want to retire early because I just be bored. Like, what am I going to do?

Just play shuffleboard all day? Like, that sounds miserable. Like, so how are you defining early retirement? And are you just really good at shuffleboard? Yeah. Well, yeah, shuffleboard and golf and things like that, you know, which neither one of, I can't stand either one of those. But in any case, you know, I mean, yeah, that's always the first question I get, too,

because retirement is a loaded word. It's like all of us have these, these ideas. about what retirement is. And often it means like sitting on a beach or doing nothing or like retreating from life. That's really what the word means. But more of that definition that I'm trying to put out there is it just separate the need to have to work for money. Like as long as you don't have to go into a job and produce income today and everything won't fall apart, then technically you could do whatever you, you can do whatever you want. You don't have to be at that job. And like the best quote I've ever heard is you go back to Warren Buffett, he has this growth

that says, you know what, I've not had to work since I was 27 years old. He says every single morning, I tap dance to work. That's cool. You imagine Warren Buffett tap dancing as it goes into the work. I just kind of picture that. It's like, he loves it. And so if you want to, I mean, most people who are ambitious enough to build up enough wealth to produce that passive income aren't going to sit around and do nothing.

Like that's, I just, I very rarely hear that. And that's where many retirements come in. If you want to do nothing for a little while or do something different that's not work related, go, you know, go take a month off, take two months off, take a year off. But most of us are going to come back and we want to contribute. We want to use our skills. But the distinction I found is that, you know, for me, like flipping houses was awesome. I loved it.

But I was sort of like a B minus house flipper. I was good at it. I was, I could make money on it. I built a business around it. But it was not my like passion end all. This is what I really want to do for the rest of my life. And so as you start building these income streams, you can start asking yourself questions like, you know, if I had money taken care of, like if money was taken off the table

as part of the equation for my decisions, what would I do different? in my life right now than what's going on. And when I asked myself that question, it was like, you know, kind of took me a while to think about it. And one of the things was I don't want to be managing all my properties. I don't want to be going on all the appointments that I used to. I used to hustle and, you know, make five or ten offers a week and do all that. And I was pretty good at it.

But like, I want to be a little bit more passive role in real estate. I want to teach people how to do it. I want to write a book. I want to travel. And so like kind of a more, a mixed balance life was better for me. but somebody else might make a totally different decision. And that's the flexibility. And that's kind of what I define retirement as is the ability to have options and choices

throughout your life instead of having your job and your need to work for money, dictating everything that you have to do. Love it. So if that sounds good, which it does sound good, right? I want to do that. Walk me through how I actually get to the point where I can have that flexibility. Right. So I think there's two parts to the answer.

One part has nothing to do with real estate. and the other part is all about real estate because that's why we're, why we're here. And the non-real estate part is so super simple. Like it's kind of like the fundamentals of finance. Everybody knows this, but not that many people do it, is you have to save a ton of money. Like you've got to,

you've got to both earn more money. You've got to go to whatever, whether you're in business, whether you have a job. You've got to like get that income higher and higher and higher. And you've got to create this big gap between your income and your savings. There's a really cool. article that maybe we can link in the show notes from Mr. Money Mustache that basically shows,

shows like the math of how the main variable in retiring earlier is what your savings rate is. So like if you make a million bucks a year and you save 10%, you're going to, it's going to take you 50 years to retire because for you to save up enough money to have enough wealth to pay for your spending, it's going to take for a long time. Yeah. Whereas if you had a much, a huge gap, if you had, you know, made a million bucks and you you spent $100,000 or you made $100,000 and you spent $50,000, that 50,70% savings rate, you get those huge savings rates, that makes an enormous difference in how fast you're going to, it's going to take you to actually get to the point where you can retire.

You know, a lot of people, I love this topic because a lot of people come out from different approaches, but I think I come out from a little different approach than maybe, like Scott Mindy on the Bigger Pockets Money podcast, right? I love that podcast, but they both are very much savers. Like how do you save more money? How do we live more frugally? I have always approached it from the other angle of like, how do I get so good at what I'm doing that I can demand or obtain a really good rate or income level?

Like how do you balance those two things between saving, scrimping, being cheap and going out there and crushing it in business and making more money? Yeah. I mean, I've done both. So, I mean, for me, like the skill sets I have, I think the thing that makes me the most confident is more what you're talking about. I know that if I needed to ramp it up tomorrow, I could go buy two houses this year, flip them, make $30,000,000, pay for my basic overhead. Like, you know, 50, $60,000 a year. Like my question in my head is like, what could I do to go make that money?

And to be honest, like that money, that ability that I have my skill set to make money is more confidence building even than money in the bank. And so like I agree with you on that case. But I think hedging both of those is smart. So, you know, why not do, like, build up your ability to produce income as an entrepreneur, as a real estate investor, also save money, also start, you know, paying down some loans on your properties every once in a while, like reduce your risk? I think both of those are prudent things to do because, you know, maybe things change. That's the thing like a lot of entrepreneurs don't realize. Like, right now I love doing this thing that I do to make money.

But what if five years from now I can't stand it or what if, you know, it's not available anymore? what if things change? And so, you know, having just pure financial means, the savings, the wealth is smart. Having the ability to be an entrepreneur and always produce income is something that a lot of savers amiss. Like, you know, you cannot save enough money to feel like absolutely secure. Like, you're always going to be panicked when you have to go live off your income and do that. So you really got to have both. I love that. David, what about you? What do you think on that? Because I know you're, you're passionate about the earning more money thing too, right? Yeah, but I'm also passionate about saving money. That was kind of how I was known in the

beginning is I was the big saver. And what I realized was saving money felt safer. So that's why I was doing it. And I knew I needed it to invest, right? But saving money did not make me wealthy. Investing money that I had saved is what made. And life is just too short. If we lived to be 800 years old, you could get by with either being really good at

offense or really good at defense. But it doesn't, right? We don't have that much time. So you really need to focus on both. I'm a huge proponent of get your spending under control, like how Chad was just saying he You can live on $50,000 or $60,000 a year, right? That's important because if you don't have it under control and you go make a bunch of money, it just leaves and you didn't get anywhere.

You spend your wheels. But once it's under control, you can't get sucked into thinking, okay, I'm done, right? I don't drink Starbucks copy. I drink Folgers from my house and I drive a Prius. So there you go. I'm on my way to financial freedom because you're probably not. If you had 800 years to save, maybe you would be, right? You have to actually then say, now that I've plugged all the holes, the water that was leaking

isn't leaking anymore. How do I dump as much water in this thing as I? can and that involves what Brandon was saying getting really good at what you do. So I feel like controlling your money, it involves controlling yourself. If you don't have control over money, you don't have self control over your own decisions and you're kind of a slave to yourself. So controlling your money is a matter of controlling yourself. But controlling what you make is a matter of tackling your insecurities most times.

You need to go make mistakes and fail and try hard and have people tell you no and leave the job you're at and go get another job. It involves kind of challenging the status. quo of your own life, which is why a lot of people don't want to do it. So both of those things, they sort of require self-development in different ways, but they're both necessary if you want to build wealth. Yeah, and I couldn't agree more because I think something that we have in the real estate world, if they're listening to the podcast every week, you're going to hear the personal development angle so much because real estate is really, it all goes through you. Like, if you don't

build a system, if you don't build relationships, it's not going to work. And for a lot of people who kind of dip their toe into real estate, that's intimidating. They're like, man, I just want to press a button on a computer and have this thing make me money, right? I mean, that's, that's really what I want. But real estate, like, the good side and the bad side of real estate is that it's up to you. Like, you're in control of this. And so you have to get better. Like, you've got to rise the occasion and make it happen. And that's kind of the differentiator. Like, if that, like, terrifies you and you say, like, I want nothing to do with any kind of investment vehicle that makes, that I have to be like the center of the whole thing, then real estate's the wrong deal. I think

you need to go like buy an index fund and do something else, you can do just fine another way. Real estate has a ton of benefits because of that control, because you can do a lot of things you can't do with other vehicles. Well, let's talk about some of those benefits to real estate. I mean, obviously this is a real estate show. We talk a lot about it, but maybe there's people here that haven't heard, like, why is real estate so powerful? I think even in your in your book, you talk about that, you know, there's some really powerful reasons for investing in real estate.

Why do you argue that? Yeah, I mean, the first one is what we're just talking about. So like control. Just think about two different options. You have $100,000 and you're going to invest it in a passive index fund, this low cost that over the next 20, 30 years is probably going to do pretty well. If the U.S. economy does well, you'll do well. I invest in index funds as well just for diversification.

But then you've got the other option, which is a real estate investing. So you go put $100,000 down payments on four or five houses. You can control the types of properties you buy. You can control what those properties will give you. You can control based on the, you know, where you buy and the type of property, it might mean that you're going to go for appreciation. It might mean that you're going to go for incomes that you can pay the loan down faster. But like you can decide that.

And so I love, I love that about real estate. There's a lot of different options. And specifically, if you're going to try to retire early, let's say like 10 or 15 years from now, you want to get to the point where, you know, I want to have the option to live off my income instead of just having to work. I want to leave my job. If you're investing in index funds, like it might work. It could work, but you're really not in control of that schedule.

Whereas in real estate, in the book, I went over like three or four of the core wealth building strategies. One of them, you know, is a got one you talk about a lot, the Burr strategy. The other ones were like a debt snowball. So like you could set up a debt snowball and where you say, all right, I've got five properties. I'm going to concentrate all of my income on paying off these five properties within the next 10, 12 years. And you can basically do the math in a spreadsheet and say, you know what, I don't need appreciation. I don't need things to do better. All I need to do is be self-disciplined for the next 10 years. I'll own these properties free and clear. They'll produce a certain amount of income,

and I'll be, I'll have enough money to pay for my bills. That's, that's pretty amazing compared to some of the other ones where you have zero control over the outcome. Yeah, that's true. So what else you got the four reasons early retirees should invest in real estate. One was control, right? What else you got? Yeah, so control timing. I just mentioned timing. I kind of built that into that one. Okay. Yep. Yeah. The other two, though, are tax benefits and the fact that it's simple and understandable. And so tax benefits, I think, you know, we kind of have this idea that real estate is beneficial tax-wise, but when you start listing all of the benefits in the tax code that go to real estate, you know,

starting with depreciation, continuing to 1031 exchange, even the fact that, you know, when you make rental income, there's no FICA taxes on it. You know, it's not like a salary income. You know, just one after the other, tax benefits are amazing. And most of the time, you know, those could go away. You can't count on them. But last year in 2017, we had the big tax change where Congress passed a new tax law. Almost all of those were kept intact. You know, there's not a lot of changes.

In fact, there's a few tweaks that made it a little bit better. And so real estate's one of those things that is beneficial tax-wise. I wonder how many people, that'd be an interesting study to find out, how many people in Congress, you know, House or Senate, own real estate. estate, like our real estate investors. I bet you it's over half. If not, like, because most, I mean, I don't know if most, but probably most rich people own real estate as an investment. So, like, why would they do things to hurt themselves, right? Yeah, yeah. And I think even more than that, though, like look at where most of the wealth in the U.S. is. If you look at all the

statistics, like the average wealth for your normal household is in their residence or maybe like an extra rental property. I mean, most of the wealth, there's stock market wealth, too, but yeah, I think the congressman, they listen to their citizens. And there's a huge, huge lobby. The National Association of Realtors is a really powerful lobby. The bankers are a really powerful lobby. They're citizens knocking on the door. So if you just, I mean, that doesn't mean it's going to be around forever, but if you had this kind of placed your bets, you think real estate, as opposed to some of the other investment vehicles, is still going to have some really good tax benefits down the road. Yeah. So that's, that's another one.

You can, you know, instead of having to put it all in your retirement account, you can still invest tax efficiently and grow your wealth really well with real estate. And a lot of different ways. That's, that's reason number three. And then reason number four is just kind of a catch-all. This is another Warren Buffett phrase. If you read Warren Buffett's like investment philosophy, he basically says you should only invest in things that are simple and understandable. So like if you don't understand it, if it's some complicated insurance contract, if it's, if it's some stock that, you know, you just got a tip from somebody at work because this is a, the next, you know, Tesla is great. I mean, I love Tesla. I'd love to drive a Tesla, but I don't understand why

they make money or like, do they make money or any of that? But I, but I, but I, I can look at a duplex and I could run the numbers on a napkin, like in my car. And I can look around the neighborhood and say, you know what? There's a Starbucks over there. This neighborhood is doing a little bit better. You know, I know this is up on the up and up. This is a local neighborhood. Like all of us can kind of intuitively know just by going into a neighborhood.

Like, this is a good neighborhood. This is not a, this is a bad neighborhood. The numbers are pretty simple. So I think, you know, I don't have to be a math genius to be successful, like running numbers and analyzing a market. And that's a good thing. I mean, that's, that's not a, you don't have to be brave and say, oh, look at me, I'm so smart. I can run spreadsheets.

Like, you ought to invest in things that are pretty simple that you can understand. Yeah, I could not agree more. I mean, like, I'm, I would say, like, I'm, I'm not that smart of a guy, which is why I moved into real estate. Like, I do, I do not understand stocks, hardly at all. Like, I don't understand how 401Ks work or how bonds work. I don't even know what a bond is. Like, I don't, I don't know that stuff. It's okay.

Like, I accept the fact that, like, I'm a simple guy, you know, Midwest guy. So I thought real estate's a pretty easy way to get into it because I get it. Like it just, it makes sense. So I think that's perfect. So can you, can you, David, you look like you're going to say something. Yeah, I wanted to ask. You're going to make fun of my intelligence going on. I think that Brandon is absolutely underrating himself as far as how smart he is.

He's actually smarter than everyone else. And that's why he plans to be dumb. That's one of his smart tricks. Yeah, you keep. Yeah, you keep saying that. Well, one thing I'll say a little, a little like side note here. I always wonder once I learn how real estate works, why do people ever invest in stocks once you've seen what real estate can do. And I'm convinced it's just because it's just easier. All you just

push a button on a computer and you get to think like I'm smart. Like it feeds your ego. But I mean, when you compare the benefits of stocks to real estate, it's not even close. You know, like we could talk all day about that. So that's just something to keep in mind. If you've been calling investing like stock trading or day trading or something like that, you can make so much more money if you just put a little bit of elbow grease into it and learn a little bit about an asset class that rewards you for being hands on. What I want to ask you, chat is there's two schools of thought, right? There's people who say, I want to buy a whole lot of properties and they're all going to cash flow a certain amount of month. And when I get enough of

these, I can retire. And then there's another school of thought, which I tend to be a little bit more citing with that says, I'm going to build as much equity as I possibly can in my portfolio. Then I'm going to convert that into cash flow later. Can you tell me about which way you think works better, which way you did it and help our listeners understand what their mindset should be if they want to follow you in the journey you took? Yeah. So I think I started off thinking the first. where I wanted to build a certain amount of cash flow from the very beginning. And I think it's pretty common that most of us, we want to buy the real estate deal that has the best cash flow in the very beginning.

And so I did that. And I kind of did everything, though. I didn't have a really good strategy starting off. I just started buying this. And I bought this little in the south. We have these textile, old textile mills. And there's usually the most run-down areas in town. And you have these old 1920s houses, mill houses.

And we bought those because they were cheap and they looked great. And the numbers looked awesome on paper. But we, especially during the. vacancy periods in 2008 and nine, we found out that like, not only did you have a lot of vacancies because we had a lot more turnover, we also had a lot of capital expenses on those old properties. And so we're still, I call these like my bubble gum on the bottom of my shoe properties. Like I still have them. Like I can't, I'm kind of pulling the properties off and trying to like throw them in the trash can. But like sometimes they like still stick on my, my shoe and I keep

pulling it off. And so the issue of that is it's easier to make mistakes on underestimating repairs when you and cash flow numbers up front. The other alternative, which I was more successful with, this by chance, was buying properties that still have some cash flow, but they're not the bottom of the barrel. Like, they're not your cheapest properties. They're properties that have good. They're probably C properties, C plus, B minus, not your A plus, like best properties. But they have some potential to be better.

And I'll give you one example. Like I bought a quadruplex that was actually my first house sack. And I moved into one unit. The other three units rented for $400 a piece in 2005 when I moved in there. And so I had $1,200 coming in, $1,50 going out on my principal interest, taxes, and insurance. So, like, awesome house hack deal. Didn't have, I bird it as well. So, like, I refinanced to pull it all my money out.

Like, it was just an awesome deal. But the thing that really made it awesome, like, all of that was okay. But now, like, how many years later, that's 13 years later, they're renting for almost $600 per unit instead. So, you know, $1,800 a month instead of $1,200 on those, well, now I've, you know, all of them rented. I'm not living there anymore. And so, like, the rents have gone up because it was sort of in a path of progress type area. And so to your point, David, like, I think in the first 10 years, you should focus on a discipline of cash flow.

Like, you should always have some cash flow, but don't let that, you should be trying to acquire equity because you can then turn that equity into cash flow later on. You can pay off your properties. You can turn it into a note, you know, seller finance it and get more cash flow. And also, you have, it's an easier to move your chest. pieces around when you have properties that are a little bit higher up. So if you need to sell it, if you need to sell it, you can't sell those things. Remember the chewing gum. They're on the bottom of my shoes still. It's really hard to get rid of those. Whereas if you have a nicer house

and a nicer neighborhood, you can liquidate it to a 1031 exchange, move it to another property, move your chest pieces around. And then you can do what you need to do. Yeah. You know what I found is at the beginning of my career, I bought a lot of those as well, like the bubble gum on the bottom of my shoe properties and I still have some, right? And I don't regret it because at the time, Like, that's all I could afford. And it got me into the game. But I quickly realized, yeah, that's not, like my wealth today is not in those properties. It's once I got out of those ones.

And I started getting some more. At the time, they didn't even seem like as good of deals. Like a couple, like, they were in the nicer town. I paid three times more for them. And they rented almost the same. I'm like, well, that's a horrible deal. Right. But I bought them because they were okay.

Anyway, those have proven to be much, much better. It's kind of like when you're first learning to swim, you have to wear floaties, right? And so that's what these houses are. Yeah. But once you're a good swimmer, floaties are slowing you down. You don't want floaties on when you know how to swim, right? Brandon, you're saying you don't regret it because it was necessary to get you started. But once you learned it, it's like, I need to get these training wheels off my bike because I can't ride very fast with it.

There you go. Yeah. Yeah. And going back to our other equation or conversation earlier, we talked about like real equity, financial equity and kind of mental equity skills that we have. And buying those properties taught me a ton. I mean, like, I learned how to manage properties. I learned how to acquire them. I negotiated some awesome seller financing and all sorts of great terms on there.

So I learned a lot about negotiating. And I've learned about how to sell properties because it's really hard to get rid of them. So I've had to be creative selling them. I've had to make sure they look really good. So the floaties help out later on when you actually graduate to the big pool, to the deep end. Yeah, that's cool. Hey, how long do you think it takes to retire through real estate? I mean, like, what's a reasonable number that somebody who's brand new to real estate right now

or maybe they have one or two properties? They're listening to the show and they're like, man, I want to be able to travel to South America for a year and a half like Chad. What's reasonable to assume? Yeah. I mean, so you got to make a couple of assumptions. Like if I assume that you have a good job right now and you already have that savings rate that we talked about earlier, like if you're really saving money now and you have the capital and the credit, I think 10 years, 10 to 12 years is a very doable type timeline. For a couple reasons. One, it just takes some time to accumulate capital, whether it's recycling your cash flow and buying more properties,

whether it's letting prices appreciate kind of through another real estate cycle, because real estate cycles are a big part of this. Like, you can't, if you try to maximize your equity in 2007 and eight, that's the wrong time. Like you need to be buying in 2007, eight,

and nine. And so, like, I had to wait until we kind of got back up out of that depth of the cycle in order to like kind of capitalize and move the chess pieces around and produce income like I wanted. So I think 10 to 12 years, if you're already saving, if you are really ready to like ramp up and start going to get it,

that's kind of the aggressive side of things. I think for most people, though, if you just said, you know, I'm kind of, I'm happy with like the status quo. I'm not, I'm not that motivated to retire early. 15, 20 years is very doable. Like you don't have to wait and pay off a 30 year mortgage to like get free and clear properties and have a retirement income. You can aggressively do so, you could semi-aggressively do some things, buy one property

per year, go through a couple real estate cycles, save your, money and totally make it, make it work in a much faster timeline. I mean, 15 years, you kidding me? Like, most people, if you could tell them they could retire in 15 years at their normal job, they would like jump for joy. You know, if they were 30 years old and say, by 45, I could be out of this thing. I mean, that's, that's pretty incredible. And so, like, even on the conservative side, like 15, 20 years, I think that's really good. What if you wanted to do in three? How would you do? Let's do a thought experiment. Like somebody wants to retire in three, four years, tops. What would you do? Starting over right now, if you wanted to retire fast.

Right. So in the book, I actually gave a kind of extreme. So I said, if you want to be super conservative, like, you know, just not use much leverage, super safe, here's one way to do it. And then I shared some ideas about exchanging. So trading up. And so I think I would do some, I would have to maximize my tax efficiency. So probably do a couple 1031 exchanges, maybe start with a really good deal on, you know, a couple small multi unit properties, flip those into something bigger and try to try to quickly get into some multi-unit. I think that's, I know y'all talk about this a lot, but we got from, I love single family houses. I love small properties. But when I, when I trade it up into some really big deals, my cash flow like double to triple. You know, it was like, all right, I got into the big numbers. The danger with that, though, like, if you did it in three years, like, I'm not sure I would have been ready to handle all the moving parts and all the everything else mentally. You know, maybe even if financially I was there, you know, just to be able to handle the closing, to dictate what's happening, to do a $300,000. remodel on a property and turn that property around. Like, it takes a little bit more confidence and know-how.

So I'm okay with taking a little bit slower. Like, I used to play sports. I was a football player in college. And, like, there was no shortcut to becoming a good player. There was no shortcut to lifting weights in the weight room. Like, sometimes you've got to pay your dues and you've got to do it. And that doesn't mean you have to wait until you're 50, 60 to retire. But five, 10 years from now, I mean, that's still pretty good.

And the other thing I would say is, like, you can hit the, some plateaus along the way. Like if you're so impatient with your job now, you know, like, save some money, take a mini retirement, like make a change for a little while and then go back to the grind again and the climb again after you get back from that. You got some itch, this one, the making you want to do it really fast. But doing it fast sometimes can have some repercussions that are, that could make you slide back down the mountain instead of getting to where you want to go. Yeah. I would almost encourage somebody to like, like if they really like hated their job, they want to retire now, like I would probably copy.

caution people to consider leaving the job anyway. I mean, if you don't like your job, quit your job. There's a million jobs out there and go do something that you actually like doing, even if it pays a little less. And then maybe retire. I mean, like, you can still work towards retirement, but why suffer through three years of hell if you don't have to go get a job that you like? Yeah, it's not worth it.

Now, I talk a lot about the strategy. David and I should both talk about it. I'm a very aggressive strategy to try to get, I grow your portfolio quick, which is called the stack, right? So the stack is this idea where you buy, If you buy one property this year, right after that you buy a duplex. A year later, you buy a fourplex, then eight, then 16, then 32.

And the numbers specifically don't matter that much. But if you essentially double roughly every year, within like six years, you'll have like almost 100 units or whatever it is like 60 some units. And if each one of those units is giving you a couple hundred bucks a month in cash flow, you could retire from real estate in five, you know, four or five years, six years. If you bought every three months, you could do it even faster, right? If you doubled every three months. the problem, of course, is like, you got to get that experience and that knowledge,

be able to pull those things off. So if somebody wanted to do it, they could do it. But it's an aggressive strategy where you better know what you're doing. Yeah, the other thing I'll add to that is for my own personal experience. Like, I was in the growth mode and wanting to do like 50 deals a year. And like, I think that's cool. Like, I'm glad I did that as well. But I think I've sort of realized that like when I started off with the like, why am I

doing this and say, how much money do I really need to do the things I want to do? and I started looking at like the upside and downside of every single decision. Like I could have a much simpler business than having to get 100 units and still do what I'm trying to do and have less hassle, less risk. And so I think there's like a range in there. Like I kind of look at like when you go to that 100 units doing the stack, like I think that's awesome. And there's some people who are entrepreneurs who are just going to knock that out of the park and they're going to make it happen. But I think there's a ton of people who just need a validation to say, you know what?

It's okay to have five properties. and buy one property a year for the next five years, save your money, pay those properties off, live off $3,000 a month for the rest of your life. And like, that's awesome. Like if you do that and you have that little simple portfolio, you're going to spend like 10 minutes a week on your portfolio, you're going to be living off that money,

you're going to be doing some awesome stuff. And I think the main theme that I tried to help people with in the book was like there's too many people who are working a job now who should be like a youth pastor, or should be like traveling the world, or should be a high school football coach, but they just don't do it because it doesn't make money. And so, like, the sooner you can get to that point

where you're doing something you're passionate about, you're doing what matters, and you're using real estate as sort of like the engine to get you there, like that's awesome. Like, whatever that looks like, if it's five properties, if it's 100 units, if it's whatever it is in between,

like, that's the main point. Like, how successful are you at living the life that was like, you really want to live? That's what we should be like celebrating even more. Yeah, yeah, I really like that a lot. So with that, I want to actually kind of use that as kind of a transition because that's a really good ending. It's like, yeah, like, what are you doing this for? You know, keep that in mind as you build your portfolio or build your business towards early retirement. And that's fantastic. Now, of course, we're going to go move on to the deep dive here and dive into one of your deals here. Then we'll hit fire around and famous four. But before we do, I wanted to mention the book in case people have not yet picked it up yet. It is on sale as of today, which they can go to bigger pockets.com slash retire early to pick up a. copy of Chad's new book. Chad, do you want to tell us about the book just for a minute and then we'll move on? Yeah, the idea of the book is to be a strategy guide. So like if you're somebody who, whether you're like new and you're just getting into it or you're like sort of already into the

business and you're kind of in the weeds, this is like the metaphor is you're climbing a mountain and the top of the mountain is financial independence and along the way there's a lot of milestones. And so you use this book to basically help you figure out like your best route up the mountain. So instead of just like, aimless, you know, wondering aimlessly and trying to like pick this strategy up and this strategy up, like, by the time you read this book, you're going to have case study examples from like 24 different investors who've retired early with real estate who've done it in a lot of different ways. And you're going to have some core strategies that are all coherent to help you achieve that goal that you want. So it's a sort of brings together a lot of other

different specific kind of in the weeds type of real estate strategies. And it gives you the ability to figure out like, how am I going to put all this together? What should I be doing? Like, what niche should I be in in real estate? And so my goal writing the book was that people read it. They're more confident. They have a plan. And then they can go and then come back to bigger pockets and get back in the weeds to figure out how to find a deal and do all that other stuff once they've got the book. Yeah, I love that. It's one of those no-brainer books that everyone should have. I mean, there's like no reason not to. Who doesn't want to retire early or have financial freedom? If there's just one idea, one tip, one something that helps you on that journey,

makes it all worth it, which there are tons in there. Again, I thought it was fantastic. Thank you. I mean, legitimately, you're one of my favorite writers. So, like, whenever I see a blog post from you, I always read it. So, you know, yeah. Appreciate that. Yeah, I'm looking forward to everyone getting in this.

Of course, if they pick it up the book, you can get the book right now, BiggerPockets.com, such retire early. And if you buy it in the first two weeks, I believe it's before, what is it, September 17th, There's a whole bunch of bonuses worth throwing in there, including a video interview called retire early and make a social impact with low-priced rentals. That's a video interview with Lisa Phillips. There's another one, how Paula Pant retired in her 30s with simple buy and hold rentals. I love Paula.

She's awesome. Rich Carey, another video interview with him. I love Rich Carey, long-distance real estate retirement rentals using no debt. A video with Arian, Shahaj. Am I saying his last name right? I never know. Yeah, Shih. Yeah.

He always cracks me as well. Yeah, me too. Aryan's awesome, though. He's like the guru of putting a plan together and making it happen just like that. Very much so. And then one thing I think is super cool is you got a video you did with John Schwab from, he wrote that book. What was it called? I'm Billing House at a time. Yeah, which everyone like, I don't know, I would say that's probably like the number two or three most cited book on the Bigger Pockets podcast. So he did an interview with him as well. And then of course, if you buy before September 17th on Bigger Pockets, these are all if you buy it on Bigger Pockets, you're going to get us invite to a special webinar with Chad here. So, Chad, you're going to be joining everybody sharing kind of your story, walking through your property, like examples, numbers, pictures, all that. It sounds like right. Yep. Yep. And I think it's September 10th, by the way. I mean, I want to double check on that, but I've, yeah, I've been looking at the launch schedule. I think it was that. Okay. But just talking about the webinar, you know, we're going to take some of the ideas from the book.

And so when people are on the webinar, we'll help, like, give examples on how you figure out how how many rentals you actually need to retire. So is it five properties? Is it 100? And so we're going to take some of those ideas and share examples. And there'll be some people who get on early that I'll help kind of coach them through it. So it's a very practical application of how the book works will be done on the webinar. All right. Very cool. All right. Well, again, go to biggerpockets.com slash retire early to get a copy of that today. And with that, why don't we move over to the newest segment of a show, the deep dive? People love to call real estate passive income, which is interesting because most of the investors I know are very busy.

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People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental market. across the country. Their local teams handle the build, the property management, and the

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All right, it's time to get into the deep dive. These are the questions that you wanted to hear. We actually got a lot of feedback that people wanted to go deeper on one deal. And so we're like, hey, let me fun. Let's do it. So we're going to dive really deep into one particular deal of Chads to learn how he found. it and how much it was, how to negotiate it, and more. So let's dive into that right now. First of all, Chad, you got a deal in mind or for the deep dive, right? I do. I got it. Yeah,

I'm ready to roll. All right. All right, good deal. Number one, how did you find it? Let's go through that. How did you find this property? So this was a really interesting niche that we started playing around with called tax liens. And so, yeah, for those who don't know what that means, like most, most counties or local municipalities, they pay all of the bills of the local government with property taxes. And so it's a big problem that people don't pay the property taxes. And so there's usually some mechanism and it depends every state's a little bit different so you have to study it state by state on how the local government can basically take the property back at some point if you don't pay your property taxes and so i'm in south carolina that's where i happen to invest and so we started bidding on there's an auction every fall and we would start bidding on these tax lanes so we're basically paying the taxes for people who have defaulted on their taxes and in south carolina at least the way it works after a year they have a chance they have a year to redeem that and pay you back plus some interest in our case is 12% interest. And we assume like this property was like we knew it was like a $100,000 plus property. And it actually had a mortgage on it. And so we just assume we're going to get the interest on

the property. And we bet on it. I think we bid $2,000 or $2,500. And so we paid their taxes. And little did we know. One year later, they said, congratulations, please pay the taxes for next year. We're going to send you a deed. So the way it works is if you know, if the person doesn't redeem it, which I assume they would have, most of the time they do. Yeah. Then you get a deed to the the property. And so we actually got a, what's called it's a special kind of deed. And we could get in the weeds on that, but it's a special tax deed. But we basically can take the property. We can rent it. We can do a lot of other things with it. There are still some issues with the title at that point. So we had to like work on that. But we basically, we could take the property and rent it, which we did.

And so we put a little bit of money into it. We rented it out for $7.95 per month after putting about $7,000 bucks into the property. So we had, let's just rough numbers. We had $10,000 in the property. we rented up for about $800 a month and the numbers were good. We made good cash flow for about five years. And so I don't know if you have another question about this, but you want to go on like anything else. You kind of hit it.

You kind of hit a few of them there. How did you find it? How much was it? What did you say $5,000? We bought it for $2,500. $2,500, yeah. Yeah. So we had some taxes we had to pay.

So, I mean, it was around $10,000 was our basis in the property after we did all the repairs and everything. Okay. And then how did you fund that? Do you just cash on that one? Cash money. Yep. Cash money.

So, the easy one is $10,000, right? I mean, you can raise $10,000 here. All right. And then what did you do with that long term? I mean, you rented it, obviously, you said, but like, did you burn it? Did you eventually pull money out of it? Is it still sitting there? Do you pay it off?

What's the long term on that one? No, so like, we decided just to kind of sit on it for a little while. And that one of the issues is the title that I mentioned earlier. And so tax liens are sort of a different type of animal. Like a lot of times we look for remodel properties where the problem is the property itself when it needs remodeling. Well, tax liens, you have to basically remodel the title to the property because if we were to go refinance it or sell it that moment, we couldn't get a marketable title. Like there's a title insurance company would say, you know what? The people who lost it at the tax

sale could come back and claim that they own the property. So there's some risk there. Like, you don't want to go in and spend 50 grand on this property. But there's a legal process called a quiet title action. Or basically you hire an attorney to go through a lawsuit that says, anybody who has a claim on this property, come let us know. And so we did that eventually about four or five years later. And this was actually last year. We started that process. And our attorney finished the process. And a judge basically gave us a stamp, a judgment saying, you now own this property free, you know, with no other, all these other people you've mentioned in this lawsuit do not have any claim on this property. You own it. And so we can now get title

insurance. So that gave us a lot more options. And we actually decided to sell it because it was a bit farther from our kind of core area. It had cedar siding, which is really beautiful. But have you ever seen carpenter bees and what they do to cedar siding? You know, it's like, it's a thing called carpenter bees? That's a thing. Yes. Yeah, we have in California, too. Yeah, they drilled these little holes. And you can, I mean, they, they had probably like 500 holes in the side of this, the siding and this. And so it's just not a good long-term rental. It wasn't low maintenance. It was a little bit farther away. So we decided to sell it. And we actually have it on the market is about to close as of this conversation in the next week. And we had it sold for 1.30.

1.33. Yeah. So we had to put a little bit more money into it. We had to put another 10 grand into fixing it up. But the numbers are good. We have a new problem for us. Like, we have not done a lot of 1031 exchanges because the capital gains are usually, you know, small enough that we can manage them. But this one has a really big capital gain. And we didn't want to pay taxes on that. And so we're going to do what's called a 1031 tax-free exchange where we have identified a replacement property we've already found one a new construction house that we know a builder and so we're going to buy this new construction house it's a little bit closer to our kind of core area where we have management in place and then we're going to take our money for equity from this property and use it

to buy this new construction house and not pay any taxes in the process perfect i love it all right Am, last question of the deep dive, lessons learned. What did you learn on that thing? Yeah, I mean, specifically with finding deals, which is always what people ask me about, like, how do you find deals? Like, I think you've got to go deep in like these really in different niches. And it's different every year. Like, you know, when too many people, investors go in one niche, you know, they're sitting out of town owner letters, like, then nothing works. Like, you've got to continually be looking outside the box, thinking outside the box. And you also have to try things. Like, we didn't know this would really work. Like,

in some ways we got lucky, you know, quote lucky because this deal just fell in our lap, but we were out there trying new things, testing out new acquisition strategies. And when you do that, you always have to be fishing for different ways to find deals. And some of them are going to come up empty. Some of them are going to work.

And so that's, I think it's kind of like a research and development department for a company. Like you've always got to be trying new ways of finding deals. Otherwise, they'll dry up, you know, next year. You have to keep looking ahead.

There you go. That's a good lesson to learn. So very cool. All right. Well, that is the end of our deep dive. And now before we get out of here, we got a couple more segments to get to,

including the world famous 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. We're going to fire them right at you, Chad. So number one. All right.

You ready for this? Can you handle the heat? Let's do it. What is the best advice you have for where, you're first starting out before you buy your first investment. Like, what's your, I guess they're just asking, what's your best advice for when you're first starting out? That's a good general question. I think studying your market, like, I found the best investors I know, like really understand

like the rents and the values in their market. Because that's really, when you think about real estate, that's really what we're doing, or we're buying low, selling high, or we're renting with a lot of confidence that we know what the rent is. So like, if you can run all the formulas you want, like behind your computer and run spreadsheets and be awesome at that. but if you can't go out and with confidence, say, this property is worth $150,000,

or this property is worth $500,000, and it's going to rent for this, you're going to have a hard time translating that theoretical spreadsheet knowledge into something real. And so I would say, the sooner you can get out in the market and look at real properties,

study the market, I kind of look at it like weightlifting or exercising. Like, if you're an Olympic athlete, every single day you would be training your body. You'd be training whatever your skill is. Like our skill, like our core skill, is value of real estate.

So you should be doing that like all the time, day one. All right. All right, Chad. How long do you spend each day working on real estate? And I'd like to know when you were building your portfolio and then again, now that you're retired. Definitely a big difference between now and when I started. Like when I first started and I was wholesaling properties, making offers, learning. I was at least 60 to 80 hours a week.

There's just no doubt because I was out there on Sunday afternoons, making offers. I was riding around neighborhoods on Saturday morning. I was doing bookkeeping in the middle of the night. And I loved it too, by the way. I mean, to me, like that rush of starting something new and learning is just awesome. And all of us kind of have to get to that level where you're overworking a little bit to learn the business. But I did like this last year, my family and I went to Ecuador for 17 months. And so we were not local, living abroad.

And it was sort of deliberate on my part because I wanted to step back for my business. And I still paid the bills every Thursday. And I still communicated with the people on the ground. a little bit. But it was about an hour, hour and a half per week that it took me to pay the bills, kind of look over the numbers a little bit. You know, I had some random text here and there, you know, WhatsApp between me and some people on the ground. But it was definitely, it felt really good that I had competent people and I was not thinking about my real estate portfolio all day. It was an hour, hour and a half a week. Cool. All right. Next one. Can you retire? I know,

I know you're going to say here, but let's talk about it for a minute. Can you retire early with just a few paid out rentals. I'd like to have like two to four free and clear, two to four free and clear rentals renting out maybe $1,300 a month. More just seems like a big headache. Has anyone done this? Yeah, like when I interviewed 24 different people, that was one of the interesting things. Like I asked each one of them like, what's the ideal number of rentals for you when you're in retirement? And like we talked numbers. You know, how many do you really need? Some people said, you know, I interviewed you too, Brandon. I think it was like 50 plus or, you know, or so. And then other people said three or four. And so I think it depends.

on your numbers. One of my recommendations is start with how much are the expenses that you need to cover on a basic level? Like what are the basic, basic things, like your insurance, your, you know, your health insurance, your whatever your housing payments are. Like, just get a basic number without all the frills, without the travel. How much do you need to live? And then also build like another number like kind of like, all right, what would be the really nice number with me traveling and spending money on like fun stuff and have both of those numbers in mind? And so if you can cover both of those numbers with four properties, which is possible if you have a really good cash flow property. And if your expenses are really low, then good for you. That's fine. I tend to

lean towards the fewer, the better, all those, you know, right now my business partner and I have 90 properties. So we're kind of over the long run, I would be happier with the two of us having about 50, 60 units. I think that would be like our sweet spot where it's not a big deal managing those or having somebody else manage them for us. It still produces enough income. But everybody's got to find their happy medium. And I know tons of people who've had five to 10 properties and who've done awesome and lived off the income. All righty. Good deal. Hi, David. Last question. Is house hacking to early retirement a viable strategy? Yeah, I think house hacking is an awesome strategy to start. So like, it's like my soapbox. It's probably you guys too. You

talk about house hacking all the time. Like, if I had to talk to every 25-year-old in the world, like I would say, like, why are you not house hacking? Like, are you crazy? Like, you got to be doing this. But the other thing that we don't talk about a lot is, like, you could do three or four house hacks if you wanted to. And, you know, going back to that three or four property example, like, if you eventually, like, turn those into rentals, maybe, you know, you decided to pay them off, live off the income. For a lot of people, that could be all you need. And so house hacking in that way could also be your early retirement strategy. And I, I, I, you know, I, you know, really like simple strategies. Like I've done the complex. I've done like the buy and sell a bunch of

properties. But I go like going back to my football days. Like I like some of these old school coaches like Vince Lombardi, who was like a Hall of Fame coach with the Green Bay Packers. He used to run two plays. It was a sweep left in football, which is like you just toss it to the running back and run left. And then he'd run a sweep right. Toss it to the right. And his guys would practice that like every day until they were sick of it. And so I don't think in real estate there's anything wrong with like taking one or two strategies, make it work, beat it to death, be the best house hacker in your little neighborhood. I just help the client, Ryan Mineser, buy a property in San Francisco for $800,000.

And he's going to live there for free because he's going to house hack it while he's living in it, right? So not only is he saving money on his monthly payment, but now he's working in San Francisco where he can make a really good wage and save even more money that he can now invest into newer real estate. Right. Like that one decision is going to explode him into real estate success in the future because he's combining like what you just said, Chad, all these different strategies into one move and it amplifies the results. Exactly. Super cool. All right.

And yeah, that's it for the fire round. Let's move on to the last segment of the show. Famous Four. All right. Let's get to the Famous Four. These are the same four questions we ask every guest every week. And we're going to hear what you've got to say, Chad.

And I know you've answered this before probably a couple times, but let's see if it's changed. Number one, what is your current favorite real estate book other than of your own, of course? Yeah, I don't want to be. read my book anymore. I spent a lot of time with that. So I actually have a good one. I couldn't remember which one I said before, but this is definitely a newer one. It's called Big Shiffs Ahead. And I've been talking about this book so much because I think every like real estate investor who's thinking about the future and where things are going, like this is just an awesome

statistical book on like demographics and how things are changing and what like the major population demographic changes are. It's written by a guy named John Burns and he's a, has a consulting firm for like big builders and like big national hedge funds that buy properties everywhere. And I think a good strategy is to follow like the big money. Like we're all, I like being a small investor, but like what are they thinking about? Like they're always thinking like 10 or 20 years ahead of time. And so some of the trends in this book were just fascinating. For example, there's this idea of like a serban, there's a new term they even coined called Serban housing. Like, have you ever heard of that? What that means? So like you take suburban and you

combine it with urban. So a lot of millennials lived in urban areas and loved living in like downtown walkable spaces. Transportation was easy. Well, a lot of them are forming families. And over the next 10 years, the trends are already showing that those people find an affordable house are still going to look in the suburbs. Like that's, even though like suburb people thought, oh, nobody's going to live in suburbs, like that's where most of the population growth is going to be. But the types of housing they're buying in the suburbs are walkable with like little, you know, areas that are more like an urban area, but they're still in the suburbs. So those are the kind, I mean, even if those things don't play out exactly like they will, you know, five or ten years from now, being ahead of the curb and

thinking about those trends, where are things going? There's like tons of those little trends like that in that book. And so I've really profited from kind of studying those. That's funny because people don't want to, people actually don't want to live in urban areas. They just want to feel like they live in an urban area. So they live in like the suburbs and they're just like your typical, you know, whatever, two and a half kid American family. But, you know, they got a tattoo so they feel cool. It's just, Exactly. That's awesome. Hipster. That was good. All right. What is your favorite business book?

This was, I sort of qualifies his business, but this is another sports guy. So John Wooden is one of my favorite coaches of all time. He was a basketball coach at UCLA, like 110 national championships in 12 years. Like it's kind of like pretty much the best coach ever in terms of just like results. But he has his little book called Wooden. He's passed away now. But it's just this little small book. And I think I got it here.

show people how small this book is, but, you know, this small, I mean, but I pick it up all the time. Like, it's just got, you know, you can read it like one page of it. And it's got these little quips, these little old kind of Midwestern, you know, farmer kind of quips. But things like, when he, when he started practice with his players, he would tell them, you know, like, preparation is the prize. Like, I don't care if we win, you know, zero games. Like, if we prepare really well and we do our best and we like, our potentials here and we almost reached it, then that's, that's successful. So it's kind of these old-fashioned, but like, awesome. things that translate to business that translate to you thinking about your life.

And he's just a super solid person and philosophy. So I think you would do well like in your business and your personal development life, thinking, studying people like that. I heard that he actually had a specific way he'd make his players tie their shoes. That's where it would start all the way down to this is the way we tie our shoes on this team. I love that story. Yeah, he would bring these big like all Americans, six foot 10, like the best players in the country, like Cream Abdul-Jabbar.

You know, like you think about these like from the 60s and 70s, like these guys are awesome. And he would have them in the first day of practice spending an hour in the locker room, taking their socks off and putting them back on, tying their shoes like 50 times. Can you imagine like these All-Americas? Like, dude, man, I am not tying my shoe one more time. But then he would get him to this point where they're like completely frustrated. And he would say, you know what? You know why you were tying your shoes and putting your socks on 50 times? It's because if you don't tie them, if you don't put your shoes on correctly, if you don't put your socks.

on correctly, you'll get a blister. And if you get a blister, you'll miss two practices. If you miss two practices, you're not going to play as well in the next game. If you don't play well in the game, we might not win a championship and just on and on and on. It's like, therefore, I want you to tie your shoes correctly. And so just like set the stage for like, dude, this, this coach is very detail oriented. And that was what he's all about.

It was like the little small details, reparation or how you win championships. There are so many business lessons in that and life lessons. That's awesome. I'm going to have to pick up that book now. I've not read it. John Wooden was an impressive guy. Absolutely. It's good. Okay, Chad, what about some of your hobbies? Yeah, I mean, I've already talked about travel a little bit.

So my wife is a Spanish teacher. And so I like to pick up languages. Like, I studied German in college. I can't really speak it that well anymore. It's like disappeared out my ear somewhere. But I do speak Spanish now fairly well. And so I like to do that and kind of explore on my many retirements. That's one of the things I do.

But also, I like to mix it with exercise. I used to play football, but I play some basketball now. So, like, when I was in Ecuador, I found a little pickup game where I could practice my Spanish and learn all, like, the cuss words of Spanish, like, where I'm playing basketball guys. And then I also be able to, like, you know, meet local people and talk and made a lot of friends that way. So I love less like being active and playing sports and then also trying something new,

learning something new. Ablo, Espaniel, Tambien. Brandon speaks to Norwegian. Ah, I can win. We recently learned how to throw axes by Norwegian people look like, look like. look like Thor right off their Viking. That is true. I do not speak Norwegian, but I look a little Norwegian.

He looks super Norwegian. They came to speak Norwegian to him. They were like, oh, it's family. And they all just embraced him right away because he's nine feet tall and you put an axe's hand and it looks like he was born that way. Yeah. I think Brandon could be a stunt. He could be a stunt double on one of these Norwegian old like ex-batel.

He can play Thor. He could play Thor's butt double in one of the new Avengers movies. I'll take that as a compliment. I actually just watched the Avengers movie The New One last night. I haven't finished it. I watched half of it. I can't seem to finish a movie anymore

without falling asleep. Anyway, we did. We threw axes. Actually, I would highly recommend if anybody's ever in a city where they have axe throwing, it's a fantastic time. So we recommend it.

That's a thing. Okay. Yeah, I have to check that out. Let's go to the last question of mine of the day. what do you think sets apart successful real estate investors from those who give up, fail, or never get started? Yeah, I'm going to pull one from the John Wooden book. I'm going to say preparation. I'm trying to remember what I said in one of the other show. I think it was hustle. I feel like hustle is like just the great equalizer. If you do it, you can, you know, you can make a lot happen just by showing up and going hard. But if you just show up and go hard and you don't prepare really well, it's going to be difficult. And so like preparation is an umbrella for things like education, building your skills, building your network, like all of those things go back to, you know, getting ready before you go make an offer. Like think of all those things, that knowledge you

have to have, the relationships you have to have. And the people I know who are super successful, like they are just like researching like crazy. They know what's going on. Like they are super prepared. And so if you take that attitude, like you're going to be the most prepared investor out there. I think that's going to be an awesome competitive advantage wherever you go. Cool. All right. Good. Do you good stuff. All right, Chad. Where can people find out more about you? Well, my home on the internet is coach carson.com. That's where I kind of share my personal stuff and talk about early retirement.

I'm also, of course, as everybody's heard, I've spent a ton of time on bigger pockets. I'm Clemson investors, my handle there. And I write a lot on that blog on the Bigger Pockets blog. And I'm going to be doing a lot more live streams and different kind of trainings associated with this book as well. So I hope everybody check me out there. And let's discuss your earlier. retirement plan, how you want to use it. I love hearing your stories about what you have going on

and why you want to use these skills to retire early. That's what's a lot of fun for me. Very cool. Awesome. Well, Chad, thank you so much for joining us today. Of course, everyone, go pick up the copy of the book at biggerpockets.com slash retire early. And by the way, the official URL was BiggerPockets.com slash retire early book. I was close. But either way, they both go there now. I had Mindy pull the URL magic. So retire early or retire early book or go to biggerpockes.com store and pick it up there. And Chad, you recorded the audiobook of that as well, didn't you? I did. Yeah, I wanted to have that conversation. So it was, you gave me a lot of good tips. Thanks for that. I think I told you was like a week where I did nothing. I think I told you it was the

worst thing you'll ever do in your entire life. And it's miserable every second. Yeah, it's the worst. You tried to talk me out of it. But after it was done, I was glad it was. Yes, I was glad I did it. I was glad I did it. But it was the worst thing ever. Anyway, so of course, go to BiggerPockets.com slash retire early. And you can get the ultimate bundle, which includes a physical book shipped to you, a download of the ebook, the audio book,

and a bunch of digital bonuses, plus the special webinar invite. Right now, get all that good stuff. Again, biggerpockets.com slash retire early. All right, Chad, we're going to get out of here. Thank you so much for joining us today. Everybody else, we're just going to take this out with Chad. So I hope you guys enjoyed today's interview with Chad

and, of course, my lovely assistant to the host of the Bigger Pockets podcast, David Green. So I don't know. All right, let's get out of here. You want to take us out, David? Thanks, guys. Thanks, everybody. Have a good day.

This is David Green for Brandon Thor's double-turner, signing off. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the height, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate. Investing Online.

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