BiggerPockets Real Estate Podcast - 303: Ouch! Brandon & David's 10 Biggest Investing Mistakes (& How to Avoid Them)

Episode Date: November 8, 2018

Are you a little tired of hearing about all the “successes” of real estate investors and wondering how realistic this is in the real world? Well, on today’s show, Brandon and David share the 10 biggest mistakes they’ve made in their investing careers—warts and all! Let’s be honest—real estate isn’t all sunshine and rainbows. Mistakes happen! In this episode, we cover WHY investors often sabotage their own success and what can be done to overcome this! You’ll learn how to avoid massaging your numbers to force a bad deal through, how to guard against getting ripped off by contractors, how to hire the RIGHT team members to help you succeed, and how to fire the wrong ones! We also cover the high cost of analysis paralysis and how to move past it, how to choose the right market for yourself, and the mistake that cost David $5,000—simply because he didn’t understand how inspection periods work in different states. If you want to see the real story behind real estate investing, including the stuff that often isn’t talked about, don’t miss your chance for some authentic, honest transparency from two experienced investors! In This Episode We Cover: A discussion on waiting to start investing because you don’t feel you can do it yet The pros and cons of doing everything yourself The danger of working with the wrong people Stories of buying the wrong deal How to avoid not managing people correctly What can happen when you underestimate rehab costs Why you shouldn’t put too much down on a property The pitfalls of not doing enough market research Avoiding investing because your state is too expensive Not rehabbing correctly And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinars BiggerPockets Podcast BiggerPockets Contractors BiggerPockets Loans BiggerPockets Analysis Tools Biggerpockets File Place How to Buy Real Estate & Build Your Portfolio Fast! (“The Stack!”) Books Mentioned in this Show Ego is the Enemy by Ryan Holiday The Millionaire Real Estate Agent by Gary Keller The Book on Estimating Rehab Costs by J. Scott So Good They Can’t Ignore You by Cal Newport High Performance Habits by Brendon Burchard Fire Round Questions Is there a formula for budgeting for preventative maintenance and repairs. How long does it usually take you to get a unit rented out after purchasing? I am looking for advice and knowledge on how to go about getting into a second deal with all my funds tied up in this duplex currently What are your screening criteria that you use for weeding out bad deals when you’re looking to BRRRR? Tweetable Topics: “Thinking small is more expensive than failing big.” (Tweet This!) “Find an investor-friendly agent.” (Tweet This!) “Calculators don’t have egos.” (Tweet This!) “The wise investor understands equity equals safety.” (Tweet This!) “Define what you want and work for it until you get it.” (Tweet This!) Connect with Brandon and David Brandon’s Instagram Brandon’s BiggerPockets Profile David’s Instagram David’s BiggerPockets Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 303. So the only way I could fix it was I had to unbolt the toilet from the floor. Pick the entire thing up. Like I was doing like a deadlift, right? Pick it up and then dump it upside down all over myself and into the bathtub. And that was the day. I was like, all right. This is this is enough.

I'm never, never going to ever do plumbing again. 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. Welcome everybody to this episode of the podcast. We are doing a special show today. in that we do not have a guest because we wanted to talk about our failures today.

Because, listen, a lot of you guys are brand new and some of you have done way more deals than we have. But regardless of whether you're new experienced, you know, whatever, you're likely going to do some real estate deals in your future. And you could probably learn from the mistakes that David and I have made. And so we're going to actually go through 10 of them today of the huge mistakes that we've made in our business and talk about how to overcome those and avoid those happening, I guess, in your own life. So that should be a lot of fun. But before we get there, let's do a few housekeeping. Is that the word? I mess this up every week.

You got it right. Okay, good. Got it right. All right, let's do a few housekeeping, including today's tip. Okay, tip. All right, today's quick tip is very simple. We have a new feature on Bigger Pockets that's going to help you out. If you go to BiggerPockets.com slash podcast, that's where the podcast home page is,

you'll find there's a new little section on the top that says you can search now for topics based on any of you want to know. Let's see you wanted to type in house hacking, right? You can search for all the BiggerPockets podcast episodes that have been about house hacking. So it's kind of cool because we had a lot of people requesting that. They said, hey, I want to find a podcast about whatever. So they are now all searchable, sortable there. So go to BiggerPockets.com slash podcast and find the topics that matter to you.

Pretty cool, huh, David? That's very cool. Every single time I log into Bigger Pockets, they have something newer, cooler, better. They're clearly the category. king of real estate investing education. And I love it. There's nothing like it on the internet. Thanks. I'll give you a nice little like $20 bill later for saying that. Here's the thing about traveling. If you buy food at the airport, a burrito, salad, bag of peanuts, you start wondering if you should have opened a savings account for snacks. So wouldn't it be

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No, I just want to say that I'm really excited to do a show where we're finally showing some of the warts, right? Like, everybody talks about how their best deals are because no guests wants to come on here and say where they fumble the ball. They want to highlight rope. And a lot of people get intimidated because they hear that. But trust me, We're going to talk about mistakes and we're not even going to cover all the mistakes we made. A normal episode of Bigger Pock's is like an Instagram page. Well, this is like, you know, this is like when you turn your phone on and the front facing cameras looking at you and you're like, ah, what is that? Who's that gorilla looking back at me?

So you guys are going to get to see the real and authentic side of real estate investing gone wrong. Wow, that was a pretty good analogy for on the spot. That was nice. All right. Let's move into this thing. So again, today's episode is. is the top 10 mistakes that David and I have made in our investing. So number one, David, you want to kick us off and show us your words? The number one biggest mistake that I made when it

came to real estate investing was not getting started soon enough. Now, that might sound cheesy or corny to people, but I am absolutely serious. I was saving money all throughout the 2001 through 2005 run up in prices. And when prices crashed, I was in a very fortunate situation where I had a ton of capital and I was ready to start investing. I bought my first property. I got a really good deal on it. It was this was an easy time to be investing because you didn't have the rehab properties. I mean, they were just sitting there and you needed to run a vacuum over the carpet and it was ready to go. And I bought my property and I had a tenant in there and it cash flowed like $350 right off the bat. And I didn't go buy another one. I was like, okay, what could go wrong,

right? And I was just in such a scarcity mindset and such fearful of what I didn't know, rather than seeking education and talking to other experienced investors and saying, tell me everything that I need to know about what to expect and what I should do, I waited. I waited a little over a year before I bought the next property. And then I waited a year after that one, right? So during this like bonus round of real estate investing when it was as cheap as it was ever going to be, I was dragging my feet moving really slowly. And now each of those properties that I bought during that time has appreciated an average of about 250,000, some of them a little bit more, right? So had I just bought three houses a year instead of one, which would not have been

pushing it, it would not have been stretching me financially, it would have just been being a little bit more aggressive and purposeful. My net worth would be another 1.5 million or so, just on average, maybe more than that. So that's my biggest mistake. When I can't sleep at night, that's usually what I'm thinking about is why didn't I jump in when I had the opportunity to? And if I could go back in time, I would absolutely have been more aggressive. Yeah, that's really good.

Yeah. You know, I kind of feel like the same way. I mean, I jumped in when I was young, right? I bought a deal and then I bought a couple. But I waited so long to like scale or to step in. into a bigger deal because I was afraid, right? Like, I was comfortable. And I think a lot of people who are new are stuck with this idea of like, hey, you know, I want to buy my first deal, but I don't know enough yet.

So I'm going to keep listening to podcasts for the next five years and then do it. So, like, yeah, I would just encourage you guys. Like, just start. Like, even if it's baby steps every day, just start. Well, here's how you know is if you have an objective reason that you shouldn't be investing, you should listen to it, right? I did not have that. I was waiting on a feeling.

I was waiting to feel comfortable and safe about doing this. And that feeling doesn't come until you've done more deals and you start to know what to expect. That's how you grow your confidence, right? So if you're sitting there and you're thinking, I want to start investing, but I'm scared. That's not an excuse. Like for me, I had a job as a deputy sheriff. It was very, very stable income. I was making good money at a time when everybody else was getting laid off.

I was a single guy with no responsibilities. I had unlimited overtime opportunities. If the worst case scenario had happened all across the board, I would have still been able to pay everything and still save money. There was no objective reason for me not to get started, right? Now, if you're in a position of like, you're going through divorce and you've got a couple kids and your job's a little shaky, of course, you're not going to be as risky when it comes of pushing yourself out of your comfort zone, but that wasn't the case for me. So if you're feeling like, I don't know if I want to get started yet, sit down, talk to somebody else about it and say,

look, this is my situation. Do you see any reason why I should be scared? And usually your friends will tell you like, no, you're just being a wuss. It's time to get in there and do it. You know, Brandon calls me a wuss probably four times a day. It's like his favorite thing to do, especially from Hawaii. I don't think I've ever called you a wuss, but you know. No, because you're afraid of me. You know what I would do to you if you did. That's true.

Yeah, you might you might guerrilla attack me or something. No, I think that's a good advice. I mean, people are afraid to move forward. I mean, that really, like when people also, like, they have all these excuses, right? Like, well, I don't have enough money to invest. What they're really saying is I'm afraid to move forward. I don't have the right agent yet. I don't have the right anything yet.

Everyone's got these reasons. And I mean, sometimes they are legitimate. Like, I totally believe that. But it doesn't take any money to analyze the deal. It doesn't take any money to call up a real estate agent. It doesn't take any money. You know, so like, you know, you could find people who have been far less advantageous than you or whatever. Like, far more disadded.

I don't know the word I'm using, right? Disadvantageous. Like, they've done it and you haven't. Right. So, like, I mean, like, it's largely fear masking itself as like these objections of, well, I can't do it. I can't do it here. So anyway, yeah. I like that.

Yeah, so mistake number one. Thank you. Mistake number one, waiting to start invest because you don't feel you can do it yet. So don't wait, even if it doesn't mean buying a property. This is what I'll make one more point than one move on. A lot of times when I'm, I teach webinars, you know, every week on bigger pockets. And a lot of the questions that I get, I mean, every single week I get this question from somebody is I'm not ready to invest yet. Maybe next year I'm going to buy my property, but I'm saving now or I'm paying off debt now.

That's fine. If you've made that decision, that's great. should I wait to, you know, get involved? And like they ask some variation of that question. And I always say, no, like, just because you're not ready to, you know, put down the down payment tomorrow doesn't mean you shouldn't be involved. You shouldn't be learned. Like, imagine right now, even if you're afraid of the market being too competitive, does it like become the best investor in the in your market today without buying a single property? Learn, network, grow, build connections, do all that work, which requires not actually purchasing a property.

So then when you are ready, you'll jump in and you'll be like, it's like the analogy you and I use both. I've heard it's using about the bats, right? When you're playing baseball and they go walk up to the plate and they grab like four or five of the bats and they start swinging them all at once. It's really hard and heavy. Right. So then when all of a sudden it gets easy, when the market drops or whatever we want to call it, you'll be able to hit a home run because the bat just feels so light. That is exactly. I mean, that doesn't just work for real estate.

That works for anything. But it definitely works within real estate investing because most of the hurdles that we're having are self-imposed. they're mental, they're not real. And so the more that you're understanding what you're doing and learning about it, the easier it becomes to overcoming those hurdles. Yeah, definitely, definitely. All right. On to number two, Brandon, tell us about your biggest mistake when it came to doing everything yourself. Yeah. I mean, that's really what it is. I when I got started, I felt like I had to do everything. So, I mean, like my first 10, 15, 20 units, like, I mean, I did everything. Like, I was fixing toilets and, like, climbing on the roof to like replace things.

And like, I mean, I did everything. I rarely hired it up because in my mind, I had this idea, right? A contractor is $80 an hour. I'm free. So like, why would I pay somebody $8 an hour when I could do it myself? And I actually do agree there is a time and place for that, especially when you have no money at all.

Maybe you can substitute some of your own hustle in. But I still believe that like my ability to do that work hindered me from growing faster. It hindered me from the hard thing. of being able to hire the right people to do things. And so yeah, trying to do everything myself, huge mistake. And it applies to everything from property management to hiring contractors, to finding deals, to everything.

I just thought I had to do all myself. You know, it makes me think about what would the world be like if Elon Musk wasn't trying to design the next electric car? Instead, he was thinking, I need to go down there on the assembly line and put this together because I don't wanna pay somebody the money to do something.

In the beginning, maybe that's where he started. He did everything because it was a startup company. But once he got to a certain point where he was understanding higher level concepts, it would be doing a disservice to himself and to the rest of the community to stay in that place rather than scaling up. Right. So I think what you're saying is when you first got started, your budget was tight. You didn't really know how to find deals that well anyways. You might as well be spending your time fixing toilets and changing door locks. But once you start to develop connections and build relationships and deals are coming in, your time is better spent talking to lenders of banks and finding the one that's going to give you loans and hiring contractors,

stuff like that. And even more, like, had I found better deals, I could have afforded then to hire the professionals, which then would have given me like the same profit. But like, I mean, at the beginning, I was just like, well, I'll do the easy thing. I'll buy them on the MLS. Like, if I would have been doing direct mail marketing back in 2011, 12, 13, like, I would have been able to get $20,000, even cheaper than what I was buying them for, in which case, that would pay more than the cost of hiring the world's best contractor to come in and deal with it. And then I could have spent my time finding more deals like that. Like it really like kind of like cycles like that.

In fact, actually, true story, the time when I decided, it was like there was one moment in my life where I said, I'm done with with that doing my own work and everything. And I got this buddy and I'll use that term lightly. So like he and his friends that lived in this property, one time they texted me and they said, hey, early my buddy texted me because I have bad systems and I was texting with my tenants, which I don't do anymore. But anyway, he texted me and said, hey, the toilet seems to be draining slowly. Because I didn't have a good system for it.

I just kind of forgot about it. Anyways, then all my buddy and his three roommates got sick. They all continued to use said toilet, the only one in their property. We'll call it from both ends repeatedly, even though it no longer flushed, right, at all. And so the entire thing filled to the brim from four guys who were like, with the flu, right? So I go there to fix this thing. And like, I'm obviously like repulse, but I'm not going to spend money on a plumber.

And so I literally like spent like a half hour trying to clear it and I could not do it. So the only way I could fix it was I had to unbolt the toilet from the floor. Pick the entire thing up. Like I was doing like a deadlift, right? pick it up and then dump it upside down all over myself and into the bathtub. And that was the day. I was like, all right. This is this is enough.

I have never, never going to ever do plumbing again. And, yeah. There's so many ways we can take this story and dig into it, man. Like, why were you renting a home out animal house style?

Right? Like, this just sounds like a college friend. rat house with a port of potty and that's how they were treating it just completely filling it up. This is also where one of my mistakes of never rent a family or friends came from was around this situation. So that was. Yeah, I mean, I can see why you wouldn't anticipate them doing that, but then they did, right? Yeah. Why would they not stop using it? I don't know. Right. Right. Not their property. You dumping it in the bathtub, like just create a whole new set of problems. Like,

is our baths doesn't go there. We're not going to go there. Okay. So the point is, though, that's what it took to shake you out of that ID to do it myself, right? So that was a blessing in disguise, but it just goes to show you. You were so entrenched in that mindset that God had to send you a toilet make you pick it up. Like, I'm just picturing you wrapping your arms around it and trying to carry it out without having your face too close. It sounds like a horrific Japanese game show. Like, how can we find the most disgusting thing and film somebody like fear factor on steroids? And this is like one of the physical stunts that they make you do, like carry it across. set it down on the other side.

This is hilarious. Yeah, I'm glad you think it's funny. It was not funny at the time. And then to end the story, then we're going to move on. I got sick afterwards, of course, because I'm sure I got a lot of that into me. So like, yeah, I was,

I got the flu right after that for like, and I was up for a week. So anyway, moving on. Can we be real for one second, Brandon, before we go on? Okay. Let's get really honest with our listeners. Why did it take you so long to stop doing the

small things and focus on the bigger. What's the real motivation why that happened? I really think it was probably like fear of paying money to do things, right, that I could do myself. Like it was this like I can do it better myself, cheaper myself. And I was so tight with the money that like if I spent $100 on a plumber to fix that, you know, it was that. But I'll add one more thing on there too. It was like I'm continually, you know this about myself, right? I'm continually nervous or afraid or whatever you're going to call it to talk to people. Like, I mean, like, I'm kind of an introvert, right? So like, I don't want people to think I'm like, you know, crying in a corner, but like I just don't like talking to people. And so the idea of like,

I got to call around a bunch of contractors, find a plumber who can do this. I'll just go do it myself. It's easier for me to go do it myself than to go and call a bunch of people and deal with contractors and all that. So I've since gotten better at that. But yeah. And that's what I commend you for having the courage to share. Because I, know it's not just you. It is every human being out there. Humans are weird, complex, emotional creatures and we make decisions based on our emotions. Like, it is obvious that anyone can tell you, why were you doing that yourself? That's so dumb. But I guarantee they're doing stupid things themselves as well because they just don't like for you. You just didn't like picking up the phone, right?

So what I want people to think about is what hangups do you have and how much is it costing you? Because Brandon's not the only one who did this. I'm not the only one who does this. How much is it holding you back from achieving your goals because you have this thing that you're clinging to? and you don't want to let it go. Because now I would advise Brandon rather than just get over it, just make phone calls, right? I would be saying you need to hire somebody to make phone calls and solve some of these problems for you. Like find someone that will work 10 hours a week and they can make those phone calls and you're

not picking up toilets full of crap. But everyone, it's easy to laugh at Brandon and say, oh, he had to carry toilet. I would never do that. But we should all introspectively be looking at ourselves and saying, well, where am I getting my face two inches from crap? Where I could make some changes as well. And that's really going to benefit. I'm going to ask people, what toilet are you carrying right now?

Yes, that's awesome. You sure had a blog post and call it that. What toilet are you carrying right now? That's actually a great idea. Maybe I'll write a book. It'll be called, what toilet are you carrying? That's funny. All right.

We've got to move on. I mean, I'm assuming you've done that yourself as well. You've done your own work where you probably shouldn't. Am I right? Or are you always like superhero, Dave? No, no, no. I do it probably more than you do. I have a story of trying to change door locks on a rental that I had.

And I'll cut the story short, but it was like, I went in there. I didn't want to pay a guy $120 to do it. I made four trips to Home Depot because I don't know how to change locks. And I never grew up doing that kind of stuff. My dad handled it. He didn't want us involved with it. And I ended up spending like seven hours of my life trying to do this where I could have went to work and made like 50 bucks an hour at overtime rate, right?

And made three times as much money and let somebody else deal with the locks. And like it just, it was so stupid. And that was my like, aha moment. I'm never doing this again. There are people who are good at that. That was your toilet. Yeah. I like my toilet a lot better than your toilet.

what it's because I'm glad I didn't take what it took you to break you of that. But yes, that's a mistake that we make. Okay, thinking small costs you more money than thinking big and failing or making mistakes at it. Yeah. All right. So think small is more expensive than feeling big. That's how I'll phrase that. I like it.

All right. So I'm going to transition us. If the mistake is not hiring people or trying to think you're doing everything yourself, then number three actually is closer related to that. Why you take that one? All right. So number three, I'm going to say was when I, I hired the wrong people, I took way too long to get rid of them and move on or I didn't learn how to hire the right people. So I had this attitude like most people that are inexperienced or naive do, which is I should be able to walk in somewhere and you should just do what I think you should. Right. Like there's expectations of if I go to a restaurant, the waiters should know this. If I go to a mechanic, he should be able to do this. And the world doesn't work that way. It's made up of all kinds of different people with different expectations and different levels of training and motivation. And you can't have this fixed mind.

of like, well, I should just tell you what I want. You should be able to make it happen. It is your responsibility to dig in and choose is the person you're working with the right for the job. I see this in real estate all the time. It is becoming very popular in this hot market to hire real estate agents who will work for 1% and think, I don't want to pay a 3% commission. That's ridiculous. I'm going to save money. And you end up hiring a bottom of the barrel, not very successful, struggling in their business, just needs a deal type of a person. And they cost you so much more money than the 2% that you saved, right? So I'm getting a lot of people coming to me now saying, David, I made a huge mistake. I hired the wrong realtor. My house has been sitting here for

90 days. Can you sell it? And then I'm making them more money on the end when we sell it than what they spent on my commission, right? That's what a good person will do. Well, this happens in a lot of different things in life. Not every property manager is the same. Not every agent is the same. It is your job to figure out who is going to do a good job and hire that person. And if you don't know how to do that, it's your job to figure out those skills. When I hired my very first property manager, they weren't communicating with me. I would ask questions and they just wouldn't answer.

The rent was never coming in on time. They were choosing the tenant side over mine all the time, right? Like the tenant would break something and say, you need to fix this window they broke. And I'd say no. And they'd be pressuring me like, well, you really should fix the window because we don't want problems to come up later.

But the tenant was the one that broke it. And I didn't know any better. So I was paying for all this stuff. All I had to do was reach out and get a second opinion. and it was very clear, no, that's stupid. Why would you be paying for it? Right? So waiting too long to fire the person you hired is a mistake and not getting a second or a third opinion to get some context into what's normal for the industry is another mistake that can compound that. Yeah, that's true. I got a quick story about not not firing quick enough. So I had a property manager hired. First time I ever hired a property manager. And I gave her two of my most difficult properties. One of them, the tenant left right away and I just sold the house. But they kept one of them for a while. and that was my probably most difficult property, and that's why I handed it over.

So, like, for, I mean, besides the fact that every month there was problems and there were expenses that, like, I felt like shouldn't be there and I were going to ask about them and they were really vague. And it was this really a problem. I knew I should fire them from, like, day one.

I knew they weren't going to be the one, right? And so a year and a half later, after, like, all this problem, finally the tenant gets evicted. I find out they hadn't paid rent in two months. Like, I don't know, like, so like the land, like, I don't even understand why they didn't,

like evict them the first month, but they didn't. They let them go another month and then evicted them or tried to. They moved out in the middle of the process so it didn't even go through all the way. Anyway, and we ended up having 30, it was like $25,000 or $30,000 in damage. Now, granted, some of that was actually related to another one of the mistakes I'm going to have here in a little bit. So it wasn't all the tenant's fault. But it took us like 25 or 30K just to fix the house up to get it to sell. That was a huge, like had I first of all kicked out the tenant a year and a half earlier would be much, but I knew they were a problem tenant. But also the property manager should have been on top of that. They should have, I knew that. It's not like, I don't even blame

the property manager. I mean, I do, I guess, but like, it's my fault. Like, I should have fired that property manager. I'll take 100% responsibility with my just wanting to sweep it under the rug and not think about it because it was just one problem out of 100. That cost me a lot of money. And that is why Brandon is successful and other successful. Like Scott Trench, he has the same attitude as that. He'll always say, like, this was my fault, I could do better, right? Successful people think that way. You ever have that friend who's always complaining about the guy or the girls that they're dating and they're just like, they were jerks or they were liars and like every single

girlfriend they have is a lying skank in their opinion, right? And at a certain point, I'm like, well, yeah, maybe I shouldn't. All right, maybe we could edit that out and put a nicer word for skank in there. I don't know. But that's not what I'm saying there. So my friends are saying there who are bitter. Oh, okay, okay, okay. Right?

And the point is, I don't know at what point they're going to realize it makes you look bad that you keep telling me that you're dating people and they're all a problem, right? Because I sincerely question your decision making skills or your judge of character when everyone you date is the problem. Investors get sucked into this like self-gratification of, oh, property managers suck and the agent sucks and everybody sucks. And they don't realize they're actually condemning their own decision-making ability and their own judge of character. skill, when they complain about everybody else. If you look at it like you did, Brandon, and say, it is my fault. I hired the wrong one and I didn't fire them fast enough because I don't like conflict, because I was too lazy, because I was overwhelmed and didn't get help with this.

Whatever the real case is, you will fly through your problems and find the right fit very quickly and then start to scale your business faster. When you're always blaming other people, you're really only holding yourself back because the person who's screwing you over doesn't care that you're complaining about them to everybody, right? If they care, they wouldn't operate their business that way. Very good. Well, any other thing you want to cover on the wrong people before we move on? Yeah, I see this a lot with agents, right? Don't look for an investor-friendly agent because there is no such thing as an investor-friendly agent. There are agents who understand you, your specific needs, how you like to be

communicated with, and there are agents who do it differently and have different expectations. If you want to find a good agent to help you in your business, you need to tell them, here's a list of all my expectations, and here's a list of all the things that would really help me if you could do. Which of these can you or can't you do? Have that conversation in the front. Make sure that the two of you are on the same page as far as what you're looking for out of that relationship and move forward with the ones who tell you that they can do it. Now, if they've told you they can do it and then they don't, well, then break up with them and you go find another one as quickly as possible. But don't be afraid to have that conversation and then just be

bitter inside because it's not working out the way you wanted it to. Yeah, I think that's interesting about the investor-friendly agent because we do talk a lot about that. And I'm sure I've even said it, like find an investor-friendly agent. But at the end of the day, like an investor-friendly agent, if you're an investor, it means an agent who's friendly to you. In other words, that does a good job to you, right? So find an agent. So whether or not they understand what cash-on-cash return is, which would be nice if they did.

But if they don't, they should understand that you want a three- or four-bedroom, a house in this area at this price range and you need to be able to get into the house quickly. If they can do that, then they're going to be an investor-friendly agent because they're being friendly to you, the investor. It's a great way to look at it. I do the same thing. I have agents who don't know anything about calculating R-O-Y. They don't know anything about house hacking, but I don't need them to because I just say, send me every nasty, disgusting, dirty house that hits the MLS or that anyone in your office comes across,

and then I can do the rest of the work, right? That's all I really needed them for, and that's all I use them for. I have other agents that I ask up front, hey, I'm going to need contractors and property managers and lenders, do you know anyone. And if they do, great, I use them for that. If they don't, I keep looking. But I don't make it the agent's job to figure out what I need and solve my problems for me, and then complain about it when they don't. That doesn't get you anywhere. Yeah.

That's true. All right. Yeah. So agents. And I'll add one more working with the wrong people contractors. Like I've had so many bad experiences where like I hired the wrong contractor. I hired one in Craigslist one time. You guys have probably heard the story, right?

I ended up like paying him five grand for a down payment for windows and he just walked off and took the money and left, never came back. The positive side of that note, I did get that money back. We put a lien on his. We sued him in the small claims court, one, put a judgment. And then we sold his house. I got paid back, which was great. But like that was the wrong contractor.

Like I didn't get referrals even though like he seemed legit. He had the hat. He had the truck. You know, I didn't get a single referral. I should have talked to 10, you know, three people at least. And I found out what kind of work he did. And I just didn't do it. So that was rough.

Anyway. All right. Number four of our biggest mistakes, Brandon, I'm going to ask you. Tell me about times you bought the wrong deal. Sure. All right. I got lots of times. Yeah.

So one of the big mistakes I've made is buying deals that I should not have bought. I mentioned earlier that story of the, uh, the 25 or I think I can't remember with 25 or 30,000 we had to put into the property after the tenant got evicted essentially, but that property was the wrong deal. See, like I had this like thing where I would like early on, if a house was cheap, I would buy it. Right. There was like in my head, it says cheap property equals good deal. And that's like the farthest thing. I mean, that house was not in a good neighborhood, had a vacant house next door in one side and a vacant one on the other side. Also not a good thing.

It wasn't in just a great area anyway. And the house itself was just weird in that like it was like a two better in one bath house with then somebody years later added a garage. Then years later added another apartment above the garage. Then connected the two together kind of in like this long awkward hallway. And like the whole thing was really. And then the guy was like a handyman who lived there before we bought it. And so like he built a lot of just weird things that were wrong.

Anyway, it was the wrong deal. I shouldn't have bought it. Another time I bought a flip, I was excited. I went early in my career. I wanted to flip a house. So I bought this huge, gigantic house. I was like 3,500 square feet, decided to flip it. That was the wrong deal.

I didn't realize that a 3,500 square foot house would cost like three times as much as a 1,200 square foot house, right? Maybe even more. I completely blew my budget on that one and had no idea on what it was actually going to be worth when it's fixed up because it was so big and awkward and not normal. So anyway, all those are like just wrong deals. I shouldn't have bought them. Before you bought that last one,

did you have a little voice inside that told you this doesn't feel right? You mean that flip? Yeah. It wasn't even a little voice inside me. It was my hard money lender. I went to the hard money lender that I'd been using on a couple of flips before that. And he's like, there's no way we're doing this deal.

This is a horrible deal. And I'm like, screw you. I'll do it anyway. And I went and called a dozen other hard money lenders and got somebody to do it. And I'm like, yeah, I should have listened to that. Yeah. It wasn't even a little voice.

It was like just my arrogance going. Screw that guy. What does he know? Let's talk about that. Like, how do you think we talk ourselves into these deals when we have objective reasons not to or at the minimum a subjective feeling like something doesn't feel right? This might not be a good idea. Why do we go through with it? I think a lot of it's ego, right?

I mean, ever since reading ego is the enemy by Ryan Holiday, I relate everything to ego. But like, I think we have this like, I got to do a deal because I'm an investor. I need to do something. I got to get, you know, all my Facebook friends see me as an investor. I got to make sure I get a deal. I got to make sure my mom and dad think I'm. doing good. So I just, I wanted something. And I, here's a mistake that I've made and that I made in this deal and then other people make all the time is we like fudge the numbers a little bit, you know,

you, you, you, you know, I, I can do that work myself and it'll make it easier. Yeah, you know, we think best term or best case scenario. And again, it's ego. We want, we want a deal that we'll lie to ourselves to convince themselves. I think that's why you have anything to add on that. Well, I know that that's the case for a lot of people. And, and I read. recognize it with people right away because I struggle with it myself, right? So I see the signs. And like one of the ways I know that somebody is ego driven is when I ask them how they invest and they immediately tell me the number of units they have. Like that's a completely useless metric when it comes to what I care what I care about. How much passive income do you make? What's your net worth? How

equity do you have in these properties? Those are all things that matter to me. You can say you have 120 units. And what that might mean is you have 120 problems. And the guy with no units is in a better situation than you, right? It's a total ego thing, right? Or I flip 100 houses a year. Like, is that really something to be proud of if you're making five grand on a flip or losing money on some of these flips where you could flip five houses a year and make way more money with way less time, right? Like a better metric is I make this much money doing this much work flipping these kinds of houses or whatever. So if you catch yourself slipping into how do I say this so that it looks better to somebody else, you could be struggling with this ego syndrome.

that's going to cost you a lot of money in the end, and you should be, you should be leery of that. I had a guy come to me that wanted me to help him sell his condo in San Francisco. And when I asked him why, he said, well, I want to reinvest the money into more stuff. And I said, awesome. Let's talk about your strategy. And he said, well, I want to go to somewhere in the Midwest, like just a really like a barren wasteland because I can sell it and I can buy 10 units. And I said, well, why do you want to buy them there?

He said, because I want 10 units instead of one. It sounds a lot better when I tell people. I'm a real estate investor. And I was like, look, I'd love to sell your house for you, but I'm not going to do it without out of my conscience, is that being your motivation. Like, we need to go to the drawing board and come up with numbers that work

and a deal that makes sense. And I'll put the work in for you of helping you reinvest it in selling your place. And I think it stung him a little bit that I called him out on that. And I'm hoping that guy comes back around later and he's like, hey, you were right. And usually they do that respect you.

But clearly that person was suffering from an ego-driven decision-making motivation. And that's what's going to make you mess up deals. That's why we massage numbers. It's why we talk ourselves into things. And I think that, I mean, as you're hearing these stories from Brandon and I used to be thinking the same question.

Like, am I doing that? Do I want to be a real estate investor? Because it's cool to tell people that. Or do I really actually want to like build wealth this way? Yeah. One more to add on that. Have you ever? I know I've done this and felt guilty of this before is,

I almost like I'll find a deal. I get excited about it and I don't want to run the numbers on it. Because I'm afraid that it's going to come back as bad. Yeah. I'm afraid it's going to be bad. And so I just, I like, I'll put it off the longer.

And when earlier in my career, I would just buy deals without really doing the in-depth math needed. Because I just, or I wouldn't want to run a deal by somebody else who I knew was a really good investor because I didn't want them to point out the bad parts of it. And that just shows me like, like, that's a problem, right? Like that is a mistake. And I know people like, I have investor friends who like will buy stuff and they won't ask my opinion on it. And I know it's because I assume it's because they're just, they're scared that I'm going to say, yeah, you know, for your first deal, that's probably not a good one. And so they just like forged through anyway.

So anyway, I guess, and that comes back. to ego. I think everything generally does in some way. So, yeah, analyze your deals correctly. I mean, Bigger Pockets has calculators we built just for that purpose, right? So like, there's a house flipping calculator, a rental property calculator, a burr calculator. And I cannot tell you the number of times that I've, you know, started, like found a deal that I thought was just solid, ran the numbers. I'm in shock that it actually wasn't. And I've been doing this for over a decade now, right? And I still am surprised sometimes that a deal is not good when I think it is or it is a good deal and I thought it wasn't going to be at all.

Because there's so many nuances in a deal that makes it good when you really get in there with the number. So anyway, if you're not using those calculators, I would highly recommend, at least check them out. BiggerPockets.com slash analysis. We'll get you to the page where they're at or just click the word tools in the navigation bar. But yeah. Calculators do not have egos. That is a good statement.

Hashtagiculators don't have egos. Well done. All right. Moving on to number five. David, we kind of talked about hiring people earlier, but this one has a little bit more to do with that. What is it? Yeah, we'll go quickly through this one, but it has to do with not managing the people that I've already hired correctly, right? And this is a problem for me that comes up because I don't want to slow down and take the time to explain exactly what I want. And I trust that the

other person is going to think about it the same way I do, and people don't. They have very different opinions. So I have a property manager in Florida that was not call and tell us when a unit, went vacant. They would just have a statement that would have like 20 houses on it and they wouldn't fill in any rent for that month, assuming I'm going to go look at my statement every single month and calculate it all and notice, oh, these two or three units went vacant, what are we going to do, right? So I wasn't following up with them. I wasn't asking what they were doing to advertise it. I really wasn't doing anything. And I'd have three months of vacancy before they filled it. And I don't think they really cared that it was vacant, right? And as long as they don't let me know about it,

I'm not going to be calling and lighting that fire underneath them that they needed. And this went on for a long time, and I mentioned it a couple times and they said, oh, yeah, yeah, okay, we'll try to remember, but I didn't get it in writing. I didn't get a put as part of my contract. Who knows if the person I talked to actually communicated that to anyone else or if they cared. And it never changed, right? And I caught myself falling into that cycle of complaining about them. And one day I realized I sound like an idiot complaining about this property manager company

when I'm supposed to be the expert. I'm firing him. So I went and I explained, hey, I'm firing you guys. And then it was, oh, no, no, Mr. Green. We're going to do everything you want. And I just had to say, no, you're not. you've had many chances already. This is happening.

They wanted to try to stick it to me over the contract and we're not going to let you leave unless we charge you these cancellation fees and it got to be kind of messy. And I realized, you know what, if I would have listened to that intuition in the very beginning that this isn't going well and got out early when I had three properties with them instead of 20 something, this wouldn't be nearly as big of a problem. So that was me not wanting to make my expectations clear and hold somebody to them

and just blaming the property management company. And I do this with other things too. Contractors going over the scheduled time and listening to their excuses for why that happened. Hey, you told me it would be nine weeks. We're on week 13. Well, the problem is my employees weren't showing up to work or whatever. Like, that's your problem. It's not my problem, right?

I need to get some money back for this. And so now whenever we come up with contracts, we put in a timeline and a clearly set expectation for if you go past this date, you will have to credit me back this much money off the final draw. And I make it their responsibility to fix their people not showing. up to work, not my responsibility. Yeah. Yeah, that's really good. You know, on that note, one thing I started doing with contractors for the same reason, like, is I have a form. It's actually in the bigger pockets file place. You guys can download it if you want. But it basically is a

form that says that this is the scope of work in detail what you're going to work on. This is when you get paid, draw number one, number two, number three, number four. And what I found is that before it was just kind of like, I work with people. They get paid when they want to get paid, kind of if they, you know, need money for the weekend or whatever. And like, it was very, unclear to find like at the end of the job. Oh, that was your responsibility, mine. All of that was my fault. I go back to the like, it's my fault. I didn't have it clear. I didn't have clear expectations. I didn't have the clear like guidelines and what happens when it happens. And so now with that simple form, like it changed like everything in my business. Like it's like, oh yeah, you want to get paid your

$4,000. Well, it says the painting has to be finished. And you'd be shocked at how well, or get things done when they know that if they just finish the painting, they get that chunk of money like Ben, it always gets done. And so anyway, that was, that was me managing people better. I wasn't even bad contractors or bad property managers or bad agents. It's my, with my lack of ability to manage them correctly. So once I changed that, it was a huge mistake. Once I changed that, I got a lot better.

You know what I found once I started doing this was the contractors I did it with recognized this is a better way to be. And they started doing it with these employees that were never showing up to work. Right. So I set very clear expectations and let them know if you do this. you will get this. If you do that, this is going to happen. They then started taking that same mindset to their employees and saying, if you don't show up to work on these days, you will be fired and someone else would be there. I don't care if your kid is sick. I don't care whatever excuse you have for why you don't

want to come to work. Like in Hawaii, I don't care if the surf's up. You're going to finish your job, right? And that whole thing kind of trickles down and the whole thing goes smoother, whereas when I take a casual attitude in the beginning, the contractor takes a casual attitude with me. He takes it with his employees. His employees take a casual attitude towards a job, and it all ends up hurting David, the one who's got, you know, paying money for this project. So that's something definitely. Think about how you're managing people

and set expectations very strong in the beginning and take responsible yourself for making that happen. Don't expect them. You have anything to add before we move on? No, I think that covered it really well. So I like that. So let's move on to number six, which is a huge mistake I've made over and over and over.

And I'm a lot better at it today than I used to be. underestimating rehab costs. Like, I, like, I mean, I continually, on every flip I did for years, blew my budget by like, not even like like a few hundred bucks. It was like by tens of thousands of dollars, you know, like I blow my budget because it's so easy to get. And it's not that I necessarily misjudged how much stuff was. It was that I kept increasing what I wanted to do, you know, like, oh, man, it's a really

nice house, but I totally would look better with granite countertops. And then you do that, you're like, well, I mean, as long as I had a of the countertots, might as well do a back splash too, right? Oh, as long as they do the backslash, we might as well just replace the floors. Let's just get all new wood floors. And so, like, it was like this creep of like, of expenses, expense creep, we'll call it. That just happens because like as long as you're going to do something, it's like, if you give a mouse a cookie, right? You know the old kids books.

Just thinking that. Yeah, if you give them out of cookie, they're going to ask for a glass of milk and you give a glass of milk. So what I should have done is either got a better idea up front of like, this is what the project needs is granite countertops, this new, Laura, that's what we're going to do. Or I should have stuck with my original. Anyway, that came to bite me a few times. What really helped me is that Jay Scott's book on estimating rehab costs, for those I don't know, just go to Amazon or go to biggerpocket.com store and look for estimating

rehab costs. It's by Jay Scott. It's really, really good. It walks you through not just like what things cost. A lot of people think that's what the book's about, but it's not. It's about like, how do you determine what those things cost? Like, how do you even figure that stuff out? So, anyway, don't underestimate your rehab costs.

Ask for help. walk through a property carefully. Yeah, bring with contractors, get bids ahead of time if possible. And every single investor says what you said, right? This is not, I mean, I've never met anyone who didn't say that. I rarely find the investor who's like, yeah, it's awesome. All my jobs keep coming in under budget. It just, it never happens, right?

So if you know ahead of time, this is a problem, take proactive steps to try to solve that problem. Because in my experience, the two things that will mess you up more than anything in investing, is your rehab budget coming in over what you thought it would be or taking too long to get the job done or you're being wrong on your ARV. Those are the two things that will kill you. If you don't mess up on those, almost any other mistake can be absorbed

and you're still going to be okay. So half of the battle is just getting a rehab budget that comes in on time and having a good contractor that's used to working with investors. Brandon, you're doing it yourself, but for someone like me who doesn't want to do it themselves, I have a guy that's like, hey, this could be a problem, right? And we look at it ahead of time and we plan for it.

So yeah, every, investor makes that mistake, don't let that discourage you if that happens to. It doesn't mean you're bad investor. It just means you are an investor because that's what we all do. There you go. Moving on to number seven, my problem, one of the biggest mistakes I made, and I mentioned this a little bit earlier in the show, was not scaling fast enough. I should have scaled much faster according to what my risk tolerance was, what my abilities were, what my skill was. One of the ways I shot myself in the foot was in small thinking when I could have put 20% down on properties and instead I was putting down 25 or even 30% sometimes. Now, I

I made the mistake most new investors make, which is thinking cash flow, cash flow, cash flow. I need cash flow. If I put down more money, that equals more cash flow. Therefore, I should do that, right? It also blowed me into this false sense of security like, oh, instead of making 300, I'll make 350. That gives me more cushion, right? Horse crap.

That does not give you a cushion. The difference between 300 and 350 is completely pointless. What gives you cushion is having more money in reserves, which ironically enough, I was fighting against myself by putting more money down, right? So at the time I was saving interest rates were like three and a half, three point seven five percent. I could have borrowed money at that rate. I was saving three and a half percent to avoid making the 25 percent ROI that I could have made buying new properties, right? Not including this appreciation that we're talking about now, which would probably put my ROI up to like 75, 80 percent if you include it over an IRA.

So what I'm saying is understand capital is expensive. It is hard to get capital. It's hard to save capital. It's hard to make capital. Don't throw your capital away to save a cheap interest. because you're thinking in the very short term of I want more cash flow. Think long term. I want to buy as many cash flowing properties as I can. The cash flow will make sure that you don't lose them. Having more properties over time means you're going to get way more appreciation, way more loan

pay down. You're going to have rents increasing over 15 properties instead of two or three properties because you invested your capital over or more. And understand that as long as you manage your own budget responsibly, this is not a risky maneuver. You're tricking yourself into thinking you're being safer by just putting more money down on every deal. Well, you know, like I have people oftentimes will say, well, they, you know, isn't doing low money down or no money down deals more risky. And I like to use the analogy of this. Let's say, not even an analogy, an example, right?

Like, and if you guys are listening to this, if you can follow with this, imagine a property that is worth $100,000 and you go and put down $20,000 as a down payment, right? So now you have an $80,000 loan. You have $20,000 in equity and it's worth $100, right? So you, David, could do that. You could go drop 20% down or 25% down or whatever. Let's say 20%. You drop down.

You have an $80,000 mortgage on a property with $100 grand. Now, I am a creative investor and I find a way to, let's say, somehow, and there's a lot of strategies we can talk about how to do this. I get that deal for no money down for $80,000. I bought the same property worth $100. I bought it for $80 and I have no money into it. Now, who has more risk here? David, who put down 20%, or Brandon, who put down no money.

at all. We have the exact same investment, yet I have no money involved in it, and David's got 20 grand of his money in there, right? So now I hopefully have more reserves because of that. So people oftentimes think that no money or low money strategies are riskier, but I tend to argue that it's the opposite, right? Like the key, though, is finding a good deal. Now, I would not want to buy the $100,000 property for no money down necessarily, because then I've got a higher loan payment. I'm probably not cash flowing at all. So the key to create a finance then is, getting really, really good deals. And that's what it comes down to is don't confuse your down payment with your equity.

They can be the same, but they don't have to be the same, right? The trick in this is understanding equity can come from many different sources. The best source is getting a deal below market value. That's the best way to get equity, right? Like you're creating equity. You're not buying equity, which is what you're doing when you put a down payment. I'm trading $20,000 cash for $20,000 on equity because I paid market value. That is expensive.

It's much better to make out. equity by paying 80 grand for a house and borrowing that 80 grand and getting the house worth $100,000. It's the exact same way, but you came across it in a much better way, which ironically is why the Burr strategy works, because you're making equity oftentimes through your rehab and you're getting your money back out of the deal so it's less risky. So that's what people need to understand. You know, the naive investor thinks that down payment equals safety, the wise experience investors

understands equity equals safety and there's different ways to make it. That's good. That's good. Yeah, to go back to that same example, then we'll move on, is imagine that a lot of people were saying, well, how would you get that $80,000 house? Imagine this. Imagine you found that same property, but it was nasty. I mean, it smelled like cat pee and there were the toilet in the middle of the living room full of junk, right? So you buy that house for 50. The Brandon sat down and the way to carry it outside the house. You got tired and he had to set the

toilet down. Yes. So that house is you're able to pick it up for 50 grand, right? Because you use creative strategy. You bought it for $50,000. Then you spent $30,000. rehabbing it. Now you have $80,000 into it. It's worth $100. And it's the exact same numbers. That's why the bird strategy works is you buy them way cheaper. You fix them up to the point where all the money you have into the deal is the same that you would have had had you done a down payment. Now in that case, people are thinking, well, how are you going to find that deal? Like, that's actually wouldn't be a good deal. I wouldn't probably do that. Like, I wouldn't have 30% equity in any deal that I burr, not 20. So I would probably more like buy it for 40 and put in 30.

And like those are legit deals that you can find. when you're willing to, you know, pick up kind of a nastier looking property. So one more note on the scaling thing that I'll add is not scaling fast enough is that so like I bought like, you know, a single family house my first deal. And I bought a duplex and later about another single. Then I bought like a fourplex, then a triplex, then a single, then a single, then a single. And then about a 24 unit. And I probably should have bought bigger properties at that point, you know, like because

I had the experience. But no, I went back and bought another single. and then another single and another single, right? So what I should have done, I mean, a perfect example of that I bought a house for 15 grand at a courthouse steps. I was really happy about it. I thought it was super cool, 15 grand for a house. But like I spent nine months remodeling it, you know, managing the contractors, had to deal

with the loans, I'm buying it, rehabbing it, refinancing it, then I had to like sell, eventually we sold the property. I Airbnb beat it. Anyway, after all of that junk, I made like, it was like 15 or 20 grand. And it took me like, I don't know, how much time did I waste on that little single family house when I could have bought an apartment complex or a mobile home park or whatever? In fact, I spent more time on that deal than I spent on both my mobile home park and my recent apartment combined. So to go with the scaling thing, you know, like, don't be afraid to go bigger. My comfort zone was single family houses and little small multifamilies.

I should have said, no, I'm past that. I'm going to go larger now. I've got the knowledge, I've got the experience. So don't be afraid. Anyway, what's the name of the strategy that you're describing? I call that the stack, right? The stack. The stack.

It's basically where you start small. It's okay. Buy a single family house. Buy a duplex. It's a great. Build knowledge, build experience, but then start to scale larger and with more units as you go. So you buy a 10 unit, then a 20 unit, then a 50 unit.

And each one of those stages are about as difficult as the previous, you know, because you're gaining knowledge and experience and contacts. and all that and wealth along the way. So with that, check it out. If you want to know more about that, go to YouTube and type in Bigger Pockets, the Stack. I did a video on that recently. So again, BiggerPockets, the stack, type it into YouTube. Check it out.

We'll also put a link to it in the show notes at BiggerPockets.com. So I show 303. And with that, let's move on to number eight, David? Number eight, not doing enough market research. Now, this becomes an excuse for many people. I don't know enough. I need to research the market. but that they're not really researching the market.

They're just used as an excuse. However, don't make the mistake on the opposite end of just jumping in without having any idea what you're going into, right? So I made this mistake once when I bought a house from a wholesaler. And wholesalers are not like agents. They don't owe you a fiduciary responsibility. They're not claiming to represent you. In some states, like it's actually a gray line or a gray area, I should say.

There is no line with whether it's legal or not. And it's fine to buy deals from them as long as you're not breaking the law. However, you need to understand you're going in there without representation. You don't have a lawyer. You're representing yourself in court, right? And in this case, I was not equipped to represent myself in that court. I did not know the rules of the courtroom good enough. So the first house I bought from that wholesaler ended up being like 400 square feet less than what they were telling me it was.

And I didn't verify the square footage because I was buying it without an agent. And I was buying cash. So I didn't get an appraisal. So it ended up in appraised for exactly the price per square foot that I was. planning on, but because it was 25% smaller, it ended up being 25% as much on the appraisal. And I did not get the great deal that I thought. That wouldn't actually hurt me. And then the next house I bought from that wholesaler, I didn't know to check to make sure it was in a flood zone. And it was in a flood zone, which meant that my, I had to get extra insurance on it,

which was expensive, like, 150 bucks a month for flood zone insurance when my regular, like, fire insurance was 50 bucks a month. Right? So my cost ballooned like 400%. on my insurance because I didn't know that I needed to even check to see if it was in a flood zone. And those are examples of ways where I didn't research my market good enough and ended up losing some money. Wow. Yeah, yeah. You got to know your market, got your property, what you're getting into. All right, moving on to number nine. David, once you had this one out. Number nine, a huge mistake I made was not investing for a little more than a year because my market was too expensive and I sat around sulking and wishing the world would change to suit my

need. So what happened in California is 2005, we were crazy hot, 2006, same thing like everywhere else. 2009, we got a slowdown. 2010, it crashed hard, right? And what happens is our expectations tend to get set around whatever the new normal is in our life. So when I worked in the jail, some deputies would let the inmates leave the TVs on past 10 o'clock, which is when they're supposed to go off. And if the TV stayed on past 10, when I showed up and I turned them off at 10, they would be really upset and feel like they were being cheated by life because they got used to TVs being on past 10 o'clock, even though the policy said they were supposed to be off, right? And I'm doing my job like I'm supposed to. Well, the expectation was they'd stay on because

that's what they were used to. And that's how human beings, just, that's how we work. When something is a certain way for a long time, we take it for granted and we assume that's our right. So in 2010, you could just swoop in and buy a home from a bank at half of what it was probably worth or half of what it would cost to build it. It would cash right away. You wouldn't need to do a lot of work. And we just got used to investing being easy. Well, around 2013, all these people that in 2010 lost their house to short sales, we called them boomerang buyers because it was like the boomerang got sent out. And then they were all coming back to the market at the same time. And they were able to buy again because three years after a short sale, you can get a loan. So the market just took off on me. It went crazy.

It went from being like, man, every house was for sale to every house was getting eight, nine offers. And I just had to stop investing because the numbers didn't make sense. But I I was just too short-sighted to think about, well, where can I go invest? How can I do this? So I kept working. I kept saving capital. I had experience. I owned like probably seven units at point, but I wasn't investing. And I just thought I'm waiting for another market crash, which is incredibly stupid. So I eventually figured this out and I started investing in Arizona. I got good at putting a team together out of state. I then moved into Florida. I perfected that system. And since then, I moved into all kinds of different markets where I can buy property anywhere.

and I've learned that real estate is local. We all know that. So your investing should be done with that perspective of just because my market isn't good, doesn't mean no market is good. And eventually that led me to write the book long distance investing where I detailed the systems that I had put to place. So that was a huge mistake I made. I wasted some of like the prime time of investing because I didn't want to invest outside

of my market and step outside my coverage a little bit. Wow, that was really good. And I think a lot of people do make that mistake, right? They try to invest in real estate. Then they figure out that their market's too expensive. And so they say, well, you know, I'm just going to sit here on the couch and watch TV every night, hoping that prices drop again. So I think that's just good advice to people is like, if it doesn't work in your market, look somewhere else. Or figure out what does work in your market.

Like, you probably could have just become a house flipper in the Bay Area. And the prices probably were worked out. In fact, you and I both know people in that area, like we're friends with that are flipping like crazy there. But that wasn't your goal. It wasn't your vision. In fact, that actually moves me on to number 10, which one I get to, which is mistake number 10 is working a real estate strategy that doesn't align with your goal. Right. So essentially what I'm talking about is like, I would just buy stuff because that's what people will do when you're a real estate investor, right?

You buy stuff and you buy more stuff and you buy property because you should, you feel like it. But like if it doesn't align with a clearly written goal or a clearly defined goal, what are you doing? Like I think a lot of people, myself included, waste years trying to like do what other people are doing because that looks cool, but it doesn't actually align with your vision. And so I guess the beginning of that really is, you know, figure out what you want in life. You know, I say this all the time. It's like I really believe that like the secret to success in all life is like comes down to two things. Like define what you want and work for it until you get it. Like it sounds like super is like simplistic and it is, right?

But how many people don't do that? How many people don't define what they actually want in life? Like, they're just like kind of like, yeah, I think I want to do real estate and I'm not sure why or where. Like, I wanted real estate because I wanted to spend time with my family and not work a job. I was going to do it through rental properties. I was going to buy enough multifamily to get there. Like, once I define that, it became much more easier to go after it.

And then every decision I make is, is that going to be closer or further away from that goal? And so anyway, that's kind of the final mistake of the day is that I've made. I know a lot of people make is not working on real estate that aligns with your goals. Well, the reason I think that that's so powerful is that our brains don't know we need a goal. Our brains just want to work in the sense of, is it good or bad? Is it positive or negative, right? That's just how we like to look at stuff. Like, I'll say things all the time to someone like just happened the other day. Hey, I see you're posting on Snapchat and Instagram a lot more. And they immediately said, well, is that bad? Are you telling me that I shouldn't be posting as much?

Or are you complimenting me, right? It was hard for them to understand how to phrase what I had said. And it was just an observation that I said. But I noticed, like, well, is that good or bad, right? Like, let's talk about that. What's your goal? How do you want to be seen by other people? Are you trying to grow your followers? Or are you trying to keep a low profile? Like, I can't tell you if it's good or bad unless I know what your goal is and what it is that you're actually working towards. Now, they didn't know. They're like, I don't really know why I'm posting more, which led the conversation to, well, maybe you should think about that, right? Because if this is just you trying to feed your ego, maybe there's some needs that you need to have met and they're not being met and you're looking to Instagram to do it. And then you got to ask yourself, is that what I want? Or maybe it's just the fact that you're like stepping out of your shell and getting more comfortable with yourself and that's

expressing itself through more posts on social media. So the short answer is, I can't tell you if it's good or if it's bad. You have to decide what your goal is and where you're going and then we can know if the behavior that you're exhibiting is actually good or bad when it comes to the goal. But you can't make any progress until you come up with the goal in the first place. And investing is the same way. I know Brandon gets them. I get them all the time. People say, me a deal and say, hey, should I do this or should I do that? Right. How can I tell you what you should do if I don't know what your goal is? Right? Like, you've got to define that first. And people skip that step and they want to get into like the emotional gratification of jumping into

the fun parts of this. And then you just get stuck and you don't know where to go. Yeah, that's really good. It's like the whole like Allison Wonderland, you know, Cheshire Cat story that people quote all time. It's just like, you know, if you don't know which way you're going, it doesn't matter which road you take. Right. So like, but it does matter where we're going. Like we do have a clearly defined goal as I do. And so like it does matter very much which road I take. And so anyway, I think that's just important. And if you don't know what that goal is, that's okay. Just keep listening to the episodes of the podcast. Do you figure that out and figure out what do you really want in life? And then like, again, go after it. Now, the end of the show, this is not

the end of the show. We actually got a little bit more. We're going to do the deal deep dive here with one of David's deals. And we're going to move on and do the fire round, which we got some fun questions from the forums and the famous four coming up. So let's move on to the deal. deep die. Wouldn't it be great if your houseplants paid rent while you were out of town? I mean, they've got the whole place to themselves, lots of sunlight, zero responsibilities. But no, they just sit there waiting for someone to spray them with some cool mist like a bunch of leafy loafers. But guess what?

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Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at funrise.com slash flagship. This is a paid advertisement. Wouldn't it be great if your houseplants paid rent while you were out of town? I mean, they've got the whole place to themselves, lots of sunlight, zero responsibilities. But no, they just sit there waiting for someone to spray them with some cool mist like a bunch a leafy loafers. But guess what?

Your home actually could be earning you money while you're not there. Airbnb has a great feature called the co-host network, which makes hosting your home so easy. If you live far from your property or are away for extended periods, you can hire a local co-host to take care of the hosting for you. These co-hosts are vetted locals who already have

experience hosting on Airbnb. A co-host can handle all the details like messaging guests, creating your host space, and managing reservations, so everything runs smoothly. It's a practical way to earn a little extra money, maybe even some cash toward your next trip. Plus, you get to share your place with someone traveling to your area while you're off

making memories somewhere else. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. All right. David Green. You got a deal in mind, right? Something you've done? Oh, yeah.

We are going to share the ugliest worst deal that I've ever done because we're keeping in pace with sharing all of our mistakes. So you guys are going to hear about a turkey, as we like to call them. All right, let's hear it. Not a winner. All right. So I found this deal through a real estate agent who brought it to me because that's what I asked her to do. And it had everything that I want. It was a major rehab. The ARV was pretty high.

It was around 120K, but it was listed for 60K because it needed a lot of work, right? Digging into it a little closely, I realized almost all of this was cosmetic work. The pictures looked horrible. However, the house itself didn't need a whole lot of work to be done to it as a very good shape. And that's what you get excited about, right? Like if almost 100% of your budget is spent towards making a house look pretty, you're going to get really good returns. Whereas if you have to spend 15 grand to update an electrical system, the buyers aren't going to value that as much as what it costs. So I was licking my chops on this one. All right. So how much you said ARV? You said, what was 120? Yep. So how much did you actually buy it for? I got it under Crown Turk for $55,000 because

we were an all cash offer and I was able to close in like, I think, 10, 12 days, something really short. And I shortened my inspection period to five days. Nice. Okay. Yeah, I was going to ask how did you negotiate it, but that's pretty much what you did, is you all cash. Perfect. Okay. How did you fund it? This was all my own cash. So this is money that I had saved up. I was going to invest my own money into this, fix it up, and then refinance it when I was finished. All right. So that answers the next one, I guess, is what did you do with it? What was the plan? Did you burr it and how did that work? Yep. This was absolutely going to be a burr property. And it looked like it was going to be great because my numbers were buy it for around 55, spend about 20 to fix it up. So I'd be all in for

75, then it's going to praise at 120, and I'm going to get tomorrow 75% of that. I was going to pull more money out of this deal than what I was putting into it. Okay. So what was the outcome? The outcome was terrible. All right. What ended up happening is it took a long time for the sellers to get back to me about if my offer was going to be accepted, like 40 days, right? Probably because they were shopping me around seeing what else they could get from other people. Well, there was a hole in the roof that didn't look very bad in the pictures that were taken, of course, because that's how it works. I knew that there was a hole in the roof. What I didn't know was that in Florida, it rains like all day, every day during this period of time. Okay. Mistake number one, not knowing the market very good,

I had just started investing over there. So what was happening is during the entire time I was waiting for my offer to be accepted, it was pouring rain on this property. Now, then the offer gets accepted and I have a five-day period of time to do inspections. Well, my agent had mentioned, hey, we accepted your property. And this was around when I had like six other properties in contract. So this is my seventh property had going on at one time. And I've talked about this before. I honestly just forgot about it. I forgot I had this property that I needed to get working on, right? Which leads to mistake number two. Normally, that wouldn't be a problem in California because here, our inspection period allows us to back out of a deal during the period of time that we have. And if you go past

that period of time, you have to physically sign a piece of paper that says, I am waiving my inspection contingency, so I can't back out. If I don't waive that paper, it doesn't go away, but the seller has the opportunity to put their house back on the market. I assumed other markets work the same way because I'm a real estate agent so I know everything, right? My real estate agent didn't think she needed to tell me that because she assumed everyone knows that this is how inspection periods work because it's a different state, right? So mistake number two was not understanding that the contingencies don't work the same everywhere. In Florida and in many other states, you don't have to sign a piece of paper waving your contingency. It just expires. It's like this is no longer good. You

can't use it. So after day five, I was not allowed to back out and I had a $5,000 deposit. I always put big ones in because I'm very confident that I know what I'm doing and I want my offer to be accepted. So I get the email from the title company saying, hey, you're supposed to close. Where's your money? And I go, oops, I forgot. We need to get an inspector out there to look at the house. Seller wasn't very happy. I took a couple days to get the inspection back. And this is when the real bad news come out. The rain was so bad that it had leaked through the roof and then into the framing of the home so that not only was like the roof completely bad where the hole was, but the studs of the home had been dry rotted or had dry rot had been like eaten alive and were soggy. And I had to tear all the drywall out,

reframe a house and build the whole house around new framing, which is a lot more than $20,000 that I had budgeted for this rehab. Right. So I looked at what it was going to cost and it got to be like the cheapest we could do this was another like 50 to 60K to like build almost a whole house backup around it, right? Immediately this deal doesn't make sense anymore. And so I went to the sellers and tried to explain it and they just didn't want to hear it at all. They kept my $5,000. They stopped communicating with us. And I learned a $5,000 lesson about how contingencies work and making sure that my like my contractor gets out there ASAP when I put a house in a property, not hey, when I get to it, I'll get to it. Yeah. And you need to be more organized and not do seven

deals at one time unless you got like, you know, some kind of system to manage that, which I mean, like I actually like growing pains like that. Those are good problems to have, you know, like I bought too many and I couldn't handle it. That's the problem I like to hear. And it forced us to go back and make checklists and everything so we could track the properties that were coming and track where we were with each one and get more people involved in my business. So it's not just me, right? Like if I don't see it, that doesn't matter. There's fail safes in place where other people would see it. So you're right. People hear that and they're like, oh, that's why I don't want to invest. And I'm like, no, that's, that's, that's,

made me a better investor. I'm going to make way more than $5,000 from these systems that I put together, even though that's money I lost. Yeah, that's really good. Well, sorry you had to go through that, but you know, it's a good lesson to teach other people. Not every deal works out. Like we said earlier, like oftentimes the podcast is like an Instagram reel, right? It's all the highlights and the, you know, bikini shots on the beach. But like, in reality, like a lot of this is tough. So anyway, yeah, thank you for sharing that. Now let's move on to the next segment of the show, The Fire Round. It's time for the Fire Round. All right, let's get today's fire around.

These questions come direct out of the bigger pockets forums. I can't talk today. And don't mind the loud noises. If you're wondering everybody what the banging is behind me, I have like 10 different contractors here today working on my house. So I don't, they're cutting something right now downstairs. So anyway, ignore that. And Rosie's being cute here on the front porch.

But anyway, and the dogs are barking now. So let's move on with this thing. The fire around, these questions come direct from the bigger pockets forums. Question number one. Let's see. Diana Johnson's from Baltimore. That is there a formula for budgeting for preventative maintenance and repairs? David, do you know any formula that you budget when you're looking at maintenance and repairs?

You know, I've never seen anyone that has a good system for this other than people that are doing like massive deals in one area, right? Like if they're just like, you see this in Midwest markets like Kansas City. There's people that own like 100 houses there. And they know this is what the roofs are going to be like. This is what the water heaters are going to be like. And so they can budget for that. Because it's so hard to do that if you're not doing massive volume in one space, most people just take a percentage of the rent and assume 5% of that's going to go towards maintenance.

That's usually what I see. And then maybe another 5% for capex. Yeah, I usually see the same. Like a really, really cheap house. The 5% doesn't work quite as well because like if your rent is $300 a month, Like you're probably paying. In fact, your capx is probably higher and your repairs are probably higher on those. But yeah, like I typically like my kind of rule of thumb is around $100 a month for repairs and maintenance on a single family house.

Maybe $100 for Kappex as well. If you don't know what Kappex is, it basically means replacements over time. Like you had to save up for, you know, a new roof every 20 years. That's Kappex and new appliances, new carpet, things like that. Anyway, so that is kind of how I like that. There is no real good formula. And it's going to depend a ton on, is it a newer? property is an older property.

And you just kind of get a feel for it over time. But if you don't know, ask a local investor kind of what are they spending on repairs or maintenance. But yeah, there you go. I think 5% or $100 is probably a pretty decent for a single family. And you can scale up from there. Moving on. Next question from Matthew John in Michigan.

Hey guys, I just purchased a duplex and I'm trying to rent out the bottom bigger unit. I've had it listed for a week and I've done about five showings. The first few days I received 70 messages from people inquiring, but very few meet my criteria. I didn't initially want pets, but it seems like everyone has at least one dog. Now I'm only getting three to ten messages a day. Sometimes people don't like it because it's a duplex. They have to share laundry. They don't like it doesn't have central air. And some just don't make enough money to qualify or they have bad credit. My question is, how long does it usually take you to get a unit rented out after purchasing? I'm a new landlord, have the income for the upstairs

unit, but it looks like I'm going to have to fork up some money for the first month's mortgage. Am I being impatient or does it usually take a month or so to get qualified tenants in there? All right, Matthew, here's how I'm going to answer that very long question, but it's still pretty well articulated. I don't think the problem is anything other than your expectations in the beginning. You got 70 messages in the first few days. So obviously there's a lot of demand. It sounds like your expectations for the kind of tenant you were going to get are out of line than most people that are renting, right? People do have pets. It annoys me, right? Like, I don't understand how someone who can't even like barely make their car payment. and if they miss one day of work,

they don't have enough money for the month, wants to take care of another creature, but people do. It makes them feel good to have someone that's dependent on them, even if it's a dog or a cat. I would not own a dog if I didn't own my own house because I know it makes it a pain in the butt for landlords,

but other people want that. They're also going to be people that don't want to share laundry with strangers that they don't know. There's like a safety issue with that. And then not having central air is going to be a problem for a lot of people, right? You probably should have anticipated some of that. And if you were to do this again, you absolutely would. This is probably your first time and lowered your expectations for what you're

going to get from a tenant. If you have someone who has decent credit and enough money to qualify and they don't look like they're going to run a meth lab out of your property, if they have a dog, you're going to have to work around the fact they have a dog, right? You can't be super picky. Like all of us are looking for someone like us to rent out our units, right? But most of us are not renting out basements of other people's homes. You're not renting to yourself. They have a different mindset than people that want to be investors. You know, like Matthew, you probably saved a lot of money. He did a lot of research.

He put a lot of work into this. He's, like, very proud of what he's doing. The person renting your house is renting it oftentimes because they don't want to do that in life and they just want whatever comes easier and renting is easier. So from my perspective, you bought a house that has a lot of demand. 70 messages is a lot. Like, people want to live there. You just screen them way too harshly.

And now your house has been on the market and people aren't looking at it often enough and you're not going to be as picky as you want. What do you think, Brandon? Yeah, I think that's pretty good answer. I would say, yeah, like, obviously there are standards are important for renting. Like we're not, David's not saying,

I'm not saying go rent to, you know, like the Adam family. But like this idea of like, yeah, you may need to fudge on some stuff, especially if it's in a lower area. Like you might have to just allow dogs or a cat or whatever.

There's other, the other thing is price generally fixes everything. So like you could just keep lowering the price if you need to get rented. That said, it sounds like you've only been a couple weeks at this. I don't usually get too nervous until I'm at a month. If I'm at a month of it not renting out,

that's when I'm like, okay, here. I am way, I'm charging too much on rent or I need to go and rectify something about the property. So I would say if you get to the month part, I would start to ask some deeper questions. Cool. Yeah. The answer for that is rent it out for much cheaper than you thought for the first year and then raise it because people are much less likely to once they've moved in, want to pack up all their stuff and go find another place to save 100 bucks a month, then they would be like, it's easier for them not to move in your place in the first place if

the rent's too high. You give them the first year at a discount and then they're just going to pay whatever your rent increases the majority of the time because it's a hassle to move. Yeah, there you go. All right. Number three from Aaron said in Alexandria, Minnesota, which is my home hometown. In other words, my dad was born there in Alexandria, Aaron said, I just recently in the last month purchased my first duplex here in Alexandria, still in the process of fixing up the main floor unit from the abuse it took from previous runners. I'm looking for advice and knowledge on how to go about getting into a second deal now that all my funds are tied up in this duplex. Well, first of all, Aaron, congratulations on the duplex. That's super cool. First deal.

Very exciting. And that is a common problem. How do you come up with the money for the next deal? Well, first of all, keep in mind that you don't have to jump right away. In fact, I talked to a guy yesterday who was just closing like this week on a deal. And he's asking me, well, how do I do the next deal? I'm like, whoa, hold on. Like, it's okay to like make sure that first deal goes well. Like don't get too hyped up that you need to go find the next one right away. Like get the good one. Get the knowledge. Like learn everything you can from that first deal.

Make it go just solid because that knowledge and experience you're gaining on that first deal is going to help you get the second without any money. So how would I do it in that case? I would probably find a private lender and do the birth strategy. I'd probably go find a nasty property. Another duplex, triplex or fourplex there in Alexandria. I'd find a private money or a hard money lender to do the birth strategy. buy it, fix it up, refinance it to pay back the short-term money and then go on from there. Anything you want to add?

Yeah, I would say that for everybody listening, you need to understand with every investment, there are three stages. There is the acquisition, the operation, and the exit. Okay. What we're talking about, if you look at house flipping, burr, whatever it is, there's buying the property, which you want to buy at a discount. Then there's operating the property. If it's a flip, that would be like fixing the house up.

If it's a rental, that would be putting a tenant in there, fixing up what breaks, getting systems in place to collect the rent, learning how the contract works. Then there's your exit strategy, which could be selling the property, it could be refinancing the property. Pretty much that's how most real estate investing works. Don't get too caught up in acquisition, acquisition,

and skip over learning how to operate it or learning how to exit it. Those are very important also. It tends to be the fun part is when we buy a property. That's why we do this. We love the thrill of the hunt, right? Like, oh, I got it and I took it down. Well, now you've got to go clean your kill.

You got to skin it. You got to cut up the meat. You got to learn how to prepare it. Then you got to get ready for the next one. It's important that you get good at those skills. That's kind of the fundamentals of being a good investor. And you can leverage those off once you learn them, but you really do need to learn them. So that's how I would advise people in this position.

Yeah, it's fun to go out there and look for the next one. But what you're going to do is you're going to end up with like all of this meat and it's going to rot on you because you can't get to it. So you want to make sure that you actually complete the full cycle before you go start on the next one. Nice, nice. I like it. All right. Last question from Sean McCluskey in Newport Beach, California.

What are your screening criteria that you use for weeding out bad deals when you're looking to burr? I love Burr. That's the next book I'm writing. It should be coming out early next year. I think it's going to be a game changer for people because it allows you just to buy so many properties with the same dollar. It's also very simple. Like you make your numbers work and Burr's going to work. You look at your RV, you look at your acquisition, and you look at your rehab.

And if those three numbers end up adding up, then you can buy the property. So the screening criteria that I would use would be what's the likelihood that the rehab is going to be bigger than what I can support with the budget, right? That's the first one. If the rehab is out of line, it doesn't matter how good of a deal I'm getting. The next would be like, am I having to buy this in such a rough neighborhood that I'm going to hate owning it in order to make the deal work, right? Like sometimes those are the deals that are sitting out there available because

everybody else is passing it up. And when you're the naive person that walks in, you're like, oh, that looks great. And you buy it and you buy yourself a headache. That's a big problem, right? Another screening criteria that I would use for, like, weeding out a bad deal would be, like, will my bank actually give me the loan? Or am I in a position where I'm going to do all this work and then I can't refinance so I can't exit this deal and everything comes to a screeching halt, right?

But what's cool about Burr is that most of those things are within your own control. There's very few variables that can come into a Burr deal that are going to screw you. up. It's usually you, your own life, and your own financial position. That's very true. Yeah, you know, when I think of that a couple more specifics on screening out deals. Like when I, I look at the property, you kind of mention this, but I'll expand on it. I look at like after the rehab's done, I'm going to own this property, potentially for 5, 10, 20 years, right? Is this something I want to own that would make a good rental or not, right? So, for example, I do not like renting two-bedroom houses.

I just don't like renting them out because I get short. People don't want to stay very long on a two-bedroom. They're usually transitional. It's a boyfriend, girlfriend, they break up, whatever. Three-bedder, might people stay a lot longer, four-bedroom, they stay forever because their families, they don't want to move their kids up.

I get that, I notice that pattern in my area. It's not true everywhere, but in my area, it's what I noticed, right? So I know that if I'm going to burr it, I'm going to screen out anything that I can't turn into a three-bedroom. But I'm also going to look for,

and I say this a lot on the webinars, I teach people this, but I look for two-bedroom houses that have over a thousand square feet, because potentially I can burr it into a three or a four-bedroom house. I mean, I've seen two-bedroom houses that have two thousand square feet, And I'm like, there's almost guaranteed like five ways to turn that into a three or four bedroom house. And suddenly now it's a property I would love to have, but most people just overlook it.

So I look for the end picture. Is that a property I'm going to want to hold on to long term? Great advice. I love that. Thanks. All right. Well, we got to move on. We got to get out of here.

But we have one more section of the show, which we love to get to you. It's called Our Famous for Number one. I'm going to ask you, David, what is your current or what real estate book are you currently digging? I really like the millionaire real estate agent, partly because I'm working to become one, and that's going really good, but mostly because the style it's written in is so good for people who want to build a business. It focuses on the three things that lead to mega agents doing well, which is leads, listings, and leverage. And it shows you this is how you systematically start doing everything and slowly work your way out of the business so that rather than having a job,

which is being a real estate agent, you own a company that other people are running and you're making passive income. I like passive income, right? And I'm willing to go through the work and deal with like being in the trenches for a time, but I want to work my way out of it. And that book basically spells out the roadmap for how you do that. And I think people should read it not because they want to be agents, but just because it gets you in the mindset of, man, I could do this with my flipping business. I could do this with my investing business. I could do this with my property management business. It really works across all different, you know, types of jobs. Yeah, you'd be telling me to read that forever and I have not yet, but I will, I promise. All right.

I'm going to go ahead and throw out the book, not necessarily my favorite book in the world, but I really like it. It's the book on estimated rehab costs. We mentioned it earlier today. I just want to mention it again because it fits with this show. A lot of my mistakes in life have been from not estimating my rehab costs correctly. So I'm going to throw that out there as a good one.

Now, what about business books, David? My favorite business book right now is so good they can't ignore you. I've mentioned this a few other times. I'm mentioning that one specifically because in my career, I've made the mistake of not pursuing excellence at my job or when I did not capitalizing on it, right? So it doesn't help if you're not becoming excellent. And it also doesn't help if you are excellent and you're not converting that into what you want out of life. The book basically talks about get so good at what you do that you set the terms for how you're going to be employed and what your schedule is going to be and stuff.

And if more people took that perspective, they would have the lives that they want rather than complaining that they just, you know, they're not happy with where they are. and it's somebody else's problem. Yeah, that's good. Cool. I'm going to throw out high performance habits by Brennan Burchard. I really like that book a lot. Yeah, you've been telling me I need to read it. Yeah, you do.

All right, number three, what have been doing for hobbies lately? Trying to keep up with all the listings that we're taking right now. Probably not a bad problem to have. It's pretty cool, but I haven't done a whole lot of hobbies. I'd say my favorite one is probably hanging out with you in Hawaii. We get a lot of exercise done together. We do a lot of brainstorming. When we're hanging out, like, really that's just when you're with friends,

You see that like the things that you used to dread doing can become a lot lighter, right? Or you see your life from a different perspective. When Brandon hears me talk about it, he'll say, well, why don't you just do this? And I don't know why I didn't think about that, but it makes a lot of sense. And that's another mistake that I made in my life up to this point was being the solo guy. Like, I've been a lone wolf. I work alone for almost my whole life. And I just throw it on my shoulders and try to trudge through it.

And that means that I don't move very quickly, as opposed to finding people to shoulder parts of the load that I don't like. But maybe they don't mind. It feels light to them so they don't mind taking it. It takes a huge load off my shoulders and I can make progress a lot faster. Nice, nice. A new hobby for me just recently has been snorkeling. I never really snorkeled my entire life. I never really got into it.

But like the last like month being here, like I probably snorkeled like every other day for months. So anyway. Snorkeling is one of those things that sounds dorky but is a lot of fun. I'm just going to go ahead and admit it. Like you're you're looking at, we've saw turtles that were like as big as Brandon is and we were out there, right? Pretty much. You wouldn't know when you go swimming out in the ocean in Hawaii

and you're just like waiting off the beach, there's fish all around you and you have no idea until you start snorkeling and you see them all. That is very true. All right. Last question, I'm going to ask you, David. What do you think sets apart successful people from those who give up, fail, and never get started?

I would say that it is their own self-limiting beliefs at this point. We all have them. When you start a new venture, which real estate investing is for most people, you're going to be exposed to your own hangups that you have. The people that can humbly accept, this is a problem that I have that holds me back and I need to work through it are the ones who end up doing well.

The people who say, look, this wasn't easy. That's fate's way of telling me that I shouldn't do this are the ones who quit, right? So if you're willing to look at your own warts that you have inside, like what we've talked about, make mistakes and learn from them, you're going to make progress. If you're just too egotistical to accept

that you're not perfect and you're not good at everything, you're probably going to find a way to avoid anything like real estate investing that would make you feel that way. That's a really good answer. I'm not even going to try to top that. I'm going to leave it with that.

If you guys want to find out more about me and David, David is, I know, pretty active over Instagram, correct? Instagram is that at David Green 24? Yep, absolutely. And mine's at Beardy Brandon, B-E-A-R-D-Y, Brandon. And with that, I'm going to get back to helping these contractors figure out what we're doing in my house.

So I don't know. You got any other good bond? to offer here today? Nope. I hope that you guys were encouraged by this show and understanding that not everybody succeeds every single time. You don't have to look at failure. It's a bad thing, right? If you learn from your failure, then it wasn't really a failure. You're still making progress and you can make up for it on the next one. With that being said, this is David Green for Brandon Gang, Bang, and 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

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