BiggerPockets Real Estate Podcast - 305: Financial Independence in Your 30s Through Just 5 Investment Properties with Brad Dantonio

Episode Date: November 22, 2018

Are you interested in retiring early with real estate but don’t want to manage hundreds of properties to do so? Today’s guest has managed to travel to 54 countries in the last three years after retiring in his 30s by owning just FIVE properties. Brad Dantonio shares exactly how he reached financial independence at such a young age by focusing on three unique skill sets (and how you can, too). In this episode, you’ll learn how Brad has created “time wealth,” how he tracks every expense he has, and how he achieved the equivalent of a four-year degree while sitting in Houston traffic! Brad also gives us the three tips he shares with young people (including how to take your journaling to a whole new level), how he forever changed his relationship to fear, and how learning the art of delaying gratification at a young age gave him an advantage over his competition for life! Brad has a fantastic story of overcoming adversity as a young child and using his setbacks as fuel to create the system he used to retire early and live the life of his dreams. If you want to use real estate to live your best life, this is an episode you don’t want to miss! In This Episode We Cover: How Brad got into real estate How he increased his income every year for 13 years because he was fanatical about self-development How journaling impacted his life The story of him selling his software to make money and using it to to buy houses How he ended up self studying about negotiation and sales His offensive and defensive techniques on living less and earning more The value of tracking expenses Why he thinks he’s wealthier than billionaires through the concept of time wealth And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Meetup and Events BiggerPockets Webinars My Fitness Pal My Body Tutor Toshl How Does it Feel to be Rich? (Blog) BiggerPockets Store MBA562 Guest Teacher: Brandon Turner- How to (Finally) Write a Wicked-Awesome Book in 100 Days or Less (Podcast Episode) A Simple 4-Step Process for Writing Your First Book in 100 Days (Blog) Connect with BiggerPockets Publishing SalesForce Amazon Books Mentioned in this Show Rich Dad Poor Dad by Robert T. Kiyosaki Lifeonaire by Steve Cook & Shaun McCloskey Poor Charlie’s Almanack by Charles T. Munger How to Invest in Real Estate by Joshua Dorkin, Brandon Turner How to Win Friends & Influence People by Dale Carnegie 90 Days of Intention Journal by Brandon Turner The Richest Man in Babylon by George S. Clason Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow Robert Greene’s Mastery The 48 Laws of Power by Robert Greene Shoe Dog by Phil Knight Fire Round Questions Has anyone compared the returns of a stock/bond portfolio against investing remotely in real estate If someone has the money to pay the mortgage in full, should they do it? or invest it? To MBA, or not to MBA? Would you buy a property with pending tenant evictions? Tweetable Topics: “Inspect what you expect.” (Tweet This!) “You can’t spend enough money on books.” (Tweet This!) Connect with Brad Brad’s Personal Website Brad’s Twitter Profile Brad’s Instagram Brad’s Facebook Page Learn more about your ad choices. Visit megaphone.fm/adchoices

This is The Bigger Pockets podcast, show number 305. I think that I have more time wealth than a lot of billionaires. So on Thursday, I'm headed to Munich for three weeks, and my wife is going to meet me there. So one of my retirement gigs is touring people around Central and Eastern Europe. And I'm able to do that because when I was in my travels since April 2015, one day I was sitting at a cafe and a guy said, man, you ought to turn this into a business. So I do that like two or three times a year where I'll show people around Munich and Prague and Budapest. So that's one thing that I'm able to do that if I was climbing the hierarchy, I wouldn't have the time to do.

You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. What's going on, everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with the co-host of the day, of the year, of the month. Mr. David Green.

David, how you doing, man? What have you been up to? I'm doing great. Closed on a property yesterday, I believe. You're on fire. You're on fire. And Fuego. Yeah, it's going really well.

So I have phone calls with contractor set up. Now I get to start the part that we all love, which is managing a rehab. But once you get through that, then it becomes a cash cow and you get to enjoy making money. That's super, super excited. 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 great if you could actually earn money while you're traveling?

Well, you can. Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care of things, communicating with guests, repairing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's

cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies, aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily. They focus exclusively on landlords, whether it's a single-family rental, a burr-builder risk policy, or midterm holiday guests. You get fast quotes, flexible coverage,

and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question.

What if you could buy brand new construction homes, 10% below market value in the best markets across the country, without making real estate your second job? That's exactly what rent to retirement does. They're a full-service, turnkey investment company handling everything for you. In some cases, investors get 50, to 75% of our down payment back at closing. Plus, interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade,

helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Very cool. Well, I don't got much to talk about today. And in fact, today's show is so good and so powerful. I want to get to today's. I almost forgot it.

I want to get to today's quick tip. All right, today's quick tip is very, very, very simple. Get out there and attend a local bigger pockets meetup in your area. They're happening all over. They generally don't cost any money. They're probably a bunch of people getting together for drinks at the local bar. It doesn't matter or a restaurant or whatever. Get together with people that are doing this stuff.

Get excited. Get pumped up. The new year is coming. A new you is coming. But only if you take some action. Do you like that? Cheezing that from some like headline last year. I think we're actually going to do a new year, new you book sale this year on January 1st.

So, you know, I'm stealing headlines from others. With that, though, I don't know, that's it. So go to biggerpockets.com, such events, find a local group, go meet with them, connect, grow. You become more like them. Now, today's show, what? Go ahead. If you live in my area, come to my meetup. Oh, yeah.

A different topic. I teach about it every month. We're doing three meetups a month all throughout the Bay Area. So depending where you live, there's probably going to be one near you. So please check it up. Let us know you want to come. We'll get you on the list. Wow.

Fancy, you look at you. And if you're in Maui, we do one once a month as well, you know? or if you're in Western Washington, we do them there too. I don't know. That's all I got. So today's show, we're interviewing Brad Danton. Oh, man, I didn't get his last name. I always did that.

Dantoneo. Dantoneo. Brad Dantoneo is like seriously a guy to look up to. So I, okay, so I do a webinar every week on bigger pockets. And one of the things I talk about a lot is that it doesn't take that many properties to obtain financial freedom. I say that a lot on these webinars because I really believe that. Like, people think you have to have hundreds, right?

But like, it doesn't take that money. And today's guest proves it. In fact, he talks about how he's able to travel. He's been to 54 countries in the last three years. He has financial freedom, financial independence, and he does it because of the way he invest in real estate. And he, as you'll find out, he doesn't have that many. In fact, he has just five properties.

It's a pretty fantastic story. You'll hear how that's done. And some of the tactics he uses to save money, some of the tactics he's used over time to make more money, and a lot of good mindset and strategy things. So again, this show is so fantastic. You guys are going to love it. So if you do, make sure you jump in the show notes, BiggerPockets.com, so I show 305.

Again, BiggerPockets.com, so I show 305. Leave a comment, leave a question, talk to Brad. Make sure you rate and review this show on iTunes. And with that, let's get to the interview with Brad. All right, Brad, welcome to the Bigger Pockets podcast. Good to have you here. Hey, thanks for having me. Yeah, yeah.

So I don't know a whole lot about you. I know that you are a finance whiz, and I know that, according to Mindy, you are a genius. So I want to pick your brain today and find out how is it that you do a lot of traveling, I hear, 50-some countries. Is that right? Yes, 54 countries since April 2015. Wow. And you don't look that old of a guy. I mean, you can't be a year over 75.

I'm 38. And I did finish in the top 80% of my high school graduating class. So I am quite the. genius. There you go. Okay. So you clearly have something going on here that allows you to travel and do cool stuff. And I hear some of that involves real estate, correct? Correct. Oh, right. So why don't we get into your story? How did you get started with real estate? Okay. So when I got out of college, I bought, I saved $8,000 for a down payment on a house. and I tried to find the cheapest house that I could find in a decent school district.

And I used a stated income loan, which meant they didn't verify my income or my assets. And I remember actually the lender asking me, how much do you project to make this year? And I said 50,000. And I ended up overshooting the mark by probably about 30,000. So luckily, I had a roommate. lined up. This was, I mean, you could, it wasn't hard to get a mortgage. This was the wild west of mortgage lending back in like 2003. So if you could fog a mirror and then write your initial in that fog, like, how is the signature. Yeah. So I got a seven and a half percent interest rate

and got a roommate. So I was sort of house hacking before Bigger Pockets coined the term. And I had that house paid off by my 26th birthday. And I remember celebrating by having my first steak dinner. and the waiter asked me how I wanted my steak cooked. And I said, I guess just put it on the grill. Like what? So that's how naive I was. But yeah, it was my frugal weight. Yeah, exactly.

That's pretty funny. Okay, I want to dive into this thing. First of all, how did you pay off a house your primary by age 26? Like that's, for most people, they're looking at 30 years to pay that off. How'd that happen? Well, it was only an $80,000 house. So like I said, I found the cheapest house that I can find. My roommate was paying half the mortgage.

And I really focused on getting my income up while keeping my expenses low. And I just allocated as my income went, as my income went up, about $1,500 a month to paying that thing down. And then I didn't buy my next house until I could pay cash for it. Okay. Okay. So I want to ask the question that a lot of people maybe were wondering at this point, why pay off a house? I mean, you're a finance guy. Like, you know that if you're getting a seven and a half percent interest.

Well, I guess on that one, maybe seven and a half you couldn't get. But the stock market averages more than that. Why not just throw your money into investments instead of paying off house? Like, why not leverage? It's a good question. I wanted a simplified process. So I was in real estate at that time. And I knew the headaches that could come from all the documentation that's required and securing funding.

I knew that it could get messy. And I wanted a deal where I could view it quickly as. assess it and run the numbers on the back of an envelope. There were a lot of guys that were looking to pay cash for houses at that time. Like when I was starting to acquire more properties, it was very competitive because I think a lot of people keep cash on the sidelines in case properties dipped in value. And that ended up being what happened. So I like to keep my finances simple. I know the market well enough to where I know if I have one house, it's about $1,000 in income, once it's paid off. If I get two houses, it's about 2,000 and go from there. And then I just found

that if I had less properties, it was easier to manage and I could take better care of the tenant and I could take better care of the property. So if that gives you an idea, yeah, just peace of mind. I don't think you ever regret paying off a house. Yeah, that's true. I mean, I have a couple paid off right now. And I know that I'm not getting the best return. I know I could get a higher return elsewhere. But like, I just love the security that I find in my couple paid off. And I hope to pay off more of them at some point. You know, I think everyone has their own little path, right? And there is no right or wrong.

I talk about a book on the show a lot because it's like my favorite book. It's called Life and Air. It's like Millionaire, but the word life. And they make this point in this book and they say that essentially like the rules that you play by are determined by the goal of the game, right? So if you're playing Monopoly and the goal is to wipe out every other player, then you play a certain way. But if the goal of Monopoly was actually was to have the most diverse colors in

your portfolio, like, then that would be, you'd play a totally different way. If the goal of the game was to let the guy across from the table win, you'd play a different way, right? So the way you play your game is determined by the game, like the goal of the game. So they make this point of should you pay off your properties? Well, if the goal of life is to maximize every return as fast as possible, then no, you probably shouldn't pay off your properties, right? Because you can get a higher return, maybe with leverage. But the goal of life is not necessarily to get as rich as possible, as fast as possible. And whatever, the goal is to have a free life, right, or something. Like you said, you want to be able to take better care of your properties, better care of your tenants.

And by doing paying off your properties, you can do that. You get that security. Am I tracking with you here? Absolutely. Yeah. And I just read poor Charlie's Almanac. And one of the things that Charlie Munger says is if you're comfortably rich and someone else is getting rich faster than you, so what? Somebody's always going to be getting richer faster than you.

Yeah. That's a really good point. It actually, go ahead, Brandon. I was to say it's easy to do that. I think that it hurts a lot of people from making progress. themselves when they compare themselves to other people. Like, you're not the same as the next guy who may do intermittent fasting and eat for a three-hour period and have nothing but kale and tuna fish.

It takes you longer to, like, get your diet under control. But when you see that person who's getting results quicker than you, you get discouraged because his Instagram posts look better than yours, you're like, ah, I should just give up, right? And it's dangerous when you start looking at somebody else's game when they're playing by different rules than when you just look at your own game. And the second point I'd make to that. is if you're the guy that can learn what somebody else is the game they're playing and learn how to help them win, you're the one who's going to get ahead in life.

If you know what your supervisor's game is and what their goals are, and it's different than yours, if you can play by their rules and help them, they're way more likely to help you get ahead than when we just assume, well, everybody's playing the same game. So he's dumb. Why is he playing it like that? Yeah, that's a great point. It's the old help enough people get what they want and you'll have everything that you ever want. And then to Brandon's point where he talked about having a goal.

So when I got out of college, I kept a note in my desk that defined financial independence. And it said financial independence is the ability to live from the income of your own personal resources. And so that message kind of always inspired me. And I think that if your income, let's say, is intertwined with self-development and discipline and all of that, I think that financial independence and its pursuit is equally as threaded with wisdom. I think there's deep wisdom in it because you're simplifying your need and you're developing emotional control and you have a long-term perspective. So all of that, I mean, I had to figure out how do I live now versus how long I want to work. And so I'll give you an example of something that I did.

There was a lot of pressure in my office, in my real estate office, to drive a fancy car. And the thought was that if you drove a Mercedes or a Cadillac, that people are going to want to work with those people because they are demonstrating success. with a flashy car. And it's not that I didn't drive a POS car, but I did try to reduce my expenses in that regard. And then I always thought that I would overcome that disadvantage by improving my communication skills and my presentation skills and my ability to develop relationships. So there's some offense there and there's some defense there. But yeah, always have the goal in mind because that's where you're going to focus. And everything's going to kind of flow into that goal.

Sure. Sure. Makes perfect sense. So what came next then? I mean, like, you said you wanted to wait to buy the next property until you could pay cash for it. So when did that happen? Tell us about that property. All of the properties that led to my financial independence were purchased outside of that first property were purchased between 2007 and 2013. And I had very strict criteria because I was after the highest returned. I didn't want anything flashy. I knew that there were specific neighborhoods that I was targeting that I could get a cash-on-cash return of about 12 or 13 percent. So every property that I bought was between $70,000 and $90,000. They could generate about $1,200 in gross rents. You want me to go into details? Sure, please, yeah. Yeah, yeah.

So they were renting for about $1,200 at that time. And the way that I would break it down since I was paying cash, I would do. it monthly. So in Texas, we don't pay state income tax, but we pay about 3% on the value of the home. So 3% of 80,000 is $2,400. I would break that down monthly to $200. So I've got my gross rent of $1,200, less my $200 in taxes, less my insurance, which is about $800 to $900 a year. So let's call it $70 a month. So then I'm at $9.30, right? $1,200, less $200, less $200, less 70. I'm at 930 and then I've got my HOA fee, which is about $30 a month. And so I knew that if I purchase a property for $80,000, that the $900 would get me, what I did was take 900. And this is

something that you can do on the back of an envelope. Take 900 divided by 80,000, multiply by 12. And you've got your, that is a 13 and a half percent return. So that's how I did it. Okay. And so you just had this very simple formula. You said, I want to make, you know, a cash on cash return of 12 to 30 percent. For those people who don't know, can you explain what cash on cash? I mean, you kind of just defined it. But what does that actually mean? Like, what does cash on cash?

Just your return, your income on the outlay of cash. Okay. Yep. So like how much you put into it, how much you're getting back in cash flow every year based on how much you put into it. Now, what about things like repairs and maintenance? Did you have much of those? How do that affect your returns?

Did that drop them significantly? Or were you not worried about that at the time? Yeah, that's a good question because I was very busy and didn't want to do a lot of repair. So this wasn't my side hustle. My side hustle was actually selling real estate once I transitioned into software full time. But we can get into that. Yeah, so I tried to buy every property pretty much the same way. They were all built after 2006.

They were all three bedroom, two bath, single stories, not more than about $3,000 or $4,000 in repairs. I knew exactly how many days it would take to rent, release those properties. So I had everything kind of built in. And then I would set up myself in the MLS to get notified by email. As soon as something matching that criteria came available, I went and looked at it that day. Yeah. I love that. Go ahead.

Go ahead. Finish the thought. I was just going to say it was very competitive because, as I was saying earlier, I think that a lot of people, when the markets began to tank, a lot of older folks had cash on the sidelines. Because it's not like, and this is my theory, but I don't think that a lot of older people were putting a lot of money in the stock market. You tend to transition out of stocks as you increase in age. And so I was competing with sometimes 12, 13, 14 offers. And it took me like 10 tries.

to get one property. And at that time, I was buying a property about every 14 months, maybe 16 months, somewhere in there. Okay. It was hard to get. Yeah. Yeah. Well, I love that you said that about, you know, I mean, everything you just kind of said,

right? So it takes 10 offers sometimes to get a deal. And that's, I always joke around. It's like high school prom all over again. Like I make a bunch of offers, right? You only get accepted once in a while. That's okay, right? You're never going to get it if you don't ask.

I mean, how many, I'm sure you guys have heard newbies say things like, yeah, I made a couple offers and nothing really worked out. So I'm just, you know, I can't really find any deals. And I'm like, you got to be persistent and consistent about doing this, right? So I love that. But also just the fact that I guess you knew what you had, that criteria from the beginning. Like, you're just like, this is what I'm going to do. I'm going to try to keep the emotion out of it. I'm looking for this property type. I'm going to set it up with email, automatic email alerts. So I get notified right away so I can jump in. Like, those are all things that work today for people. I mean, you guys should definitely be listening to this and putting this in the practice, right?

get some email set up, get quick on that. If you can go look at a property the same day it's listed or make an offer the same day it's listed, you have a significantly better chance of getting that thing accepted and getting the deal when you work quick. So was there anything else you were doing about anything else you were doing the fine deals or anything that helps you kind of like, you know, get the competitive advantage there? Well, the competitive advantage, I think only was that I was able to set myself up in the MLS system because I was licensed.

But if you're not licensed, pretty much any person, with a real estate license would be happy to help you and set you up. I mean, it takes five minutes to set up the system for the criteria that you're looking for. So there was nothing sexy about what I was doing. It was very basic. I was buying for cash flow and tax benefits. I viewed appreciation as land yap. It's what we call in Louisiana land yap. I'm from Louisiana originally. It's extra bonus. So I try not to speculate. I had strict criteria in what I was looking for. And yeah, that's it, man. It was very targeted. Where does land yap come from?

It's French. So, yeah, so I'm originally from an hour south of New Orleans, if you can believe there's land that goes down that far. Yeah. Beautiful people, really great part of the country. It's like a different culture down there. Great people, great food. When we make bonus episodes, should we start calling them land yap episodes? Yes, yes. Land yap episodes.

I like that. That's funny. All right. So, yeah, so if you don't have, people listen to the show right now, If you don't have automatic emails set up with a real estate agent, like make that your goal. Like, hey, by the end of today, I'm going to find an agent. I'm going to get automatic email set up for whatever my criteria is. Even if you're not ready to buy it, get it set up, get emails coming in, start analyzing those numbers, figuring out what works, what doesn't. Like, get in the game. It doesn't cost any money to do all the stuff that we're talking about right now.

Like get in there, start working it. Very cool. All right. So you started buying property. So how many did it take? I mean, how many properties did you, maybe we can fast forward to today. I mean, how many properties do you have? I kind of walks through your portfolio and real estate and anything else that you got for

for income coming in. Yeah, so I have five properties that are in the range that I mentioned. I sold a sixth. So I did buy in 2011 one of those three-story McMansions, but I kind of lucked out because it did appreciate really well. And so in terms of all of the passive income, that money I took and put into a Vanguard high-dividend yield account. But then I have five properties that I own free and clear that provide about $5,000 to $6,000 in monthly income. That's awesome. So with that money, $5 to $6,000 a month you're bringing in now.

And that's basically how you found financial freedom. I mean, that's enough to, when you keep your expenses low, you can pay your bills with that. Is that right? That's it. Your financial number is, it's dependent on your expenses, basically, right? We all know the 4% rule, which I explain it what it is. Yeah, please do. So we should all be tracking our net worth, right, which is basically just your assets minus your liabilities.

And if you can live on, let's say you have a net worth of a million dollars. If you can live on $40,000, which is $33, a little over $3,300 a month, you are effectively financially free. Another way to figure that the same, the flip side of that, if you want to figure it out another way, is just take your annual spending, multiply it by $25. and you have your financial independence number. So it's very personal. I mean, they call it personal finance for a reason because your financially free number is dependent on how much you spend.

So you should be tracking your expenses if you have the goal of being financially free someday. Yeah. So now, Brad, you have a very interesting way you've accomplished this. It really comes down to like a three-legged stool. One is offensive techniques, ways that you built up your income to earn more money. The other is defensive techniques,

ways that you keep your expenses low to build to do this. And then the third would be like the mindset you have. And I want to kind of cover all of those. Can we start off by briefly sharing some of the defensive techniques that you put together that allow you to live at such a low base rate so that you could retire in your 30s, basically, and travel to whatever 54 countries it was on income from real estate? Yeah, it started with house hacking.

So I had roommates until I was 31 years old. I mentioned driving used cars earlier. I would cook a lot of hamburger helper, tried to stay out of restaurants. I'm not a partier, so I never was the $30,000 millionaire when I was 23 years old because I don't drink much at all. So I just kind of played defense that way. I mean, I've kept a journal for 15 years now, and I used to write every expense down. And then when the iPhone came out, I started keeping my expenses on an app.

but even if you are tracking your expenses, you will reduce your spending just by a function of keeping track of it. That is so true. In fact, the book that we just launched that bigger pockets of the How to Invest in Real Estate that Josh and I wrote, we talk a lot about in there about this idea of just by looking at what you're doing and by keeping an eye on it, like it basically puts you in the driver's city of your money versus the other way around where your money is driving you around. You're just kind of hanging on, you know, like, or you're locked in the trunk or whatever.

You know, like your money's making, you say, hey, this. This is what I make. This is what I'm spending. And by knowing it, you automatically are going to generally improve that metric or whatever. I mean, this is true with all business, right? Like, if you start tracking how many deals you're analyzing, you'll probably start increasing the number of deals you're analyzing. You start tracking how many calories you're getting, you're going to naturally start

eating less calories. Like, it's just a function of human is tracking. What's that famous quotes? Like, what gets measured matters or something like that. Yeah. I've also heard inspect what you expect. Yep. If you expect a result, start inspecting those things.

And it's true. It puts it in your subconscious. Your reticular activating system starts paying attention to stuff. And you'll catch yourself like when I was tracking my calories. I think I use my fitness pal and you write in there like this is what I'm eating and it tells you. It would be like I'd be tempted to snack. I'd be like, dude, do I really want to pull out my phone and put this information in? Forget it. It's not worth it. Right. And I just I wouldn't do it. Whereas now if I'm not tracking it, of course, you're going to snack. I'm using this thing. I'm using this thing called my body tutor right now. It's like the service where like you have a personal trainer basically a fitness slash food. food coach. And every day I put my food in there, no matter what I eat, right? And they just, every day he looks at it and gives me advice. Like, hey, yeah, this worked really well. This didn't work really well. And I've lost like 25 pounds in like four months now off of doing nothing but like writing down my food and having somebody else say like, yeah, like I'm not making any change. I'm not doing anything weird diets. It's just like writing it down. The rise of the algorithm. Yeah. It's crazy. So you said you're using an app to track this. What app are you

using? Toshel, T-O-S-H-L. I don't know that. T-O-S-H-L. Tell us about out Toshal. It's not very widely used. I've mentioned it to several people and nobody ever says, oh, yeah, I use that too. So I know there's a lot of apps out there. It's just, I don't know, it's basic. You plug in, you know, if you go to a restaurant, you put in food and drinks, and then it calculates it for you, gives you a pie graph, and just enables you to track it. Easy, yeah. The easy apps are probably some of the better ones. They don't get too complicated. I think that's fantastic. All right. So that's the, that's, this. defensive, right? Anything else you want to throw in there before we move into offensive?

I would just say that I was very deliberate about whether my lifestyle would increase. So if I was making $4,000 a month and I was living on $2,000 a month, if I had a big month because I was in sales, let's say I made $8,000 in a month, I would be very deliberate about increasing my lifestyle. So I might give myself a 10% raise and then I'm living on $2,200 a month. And the whole idea, because I have this goal of being financially independent, the idea is to maximize your savings and investments. And you're only going to be able to do that if you know how much you're spending every month. And I'll tell you one of the cool things that I do when I track my expenses is if I fall way underneath my tart, let's say I want to spend $4,000 a month, if I get to the 28th of March and I've got two or three days left in the month and I'm $400 underneath, well, then I can treat my friends to dinner and they're none the wiser, right? But that's the kind of thing

that contributes to lifestyle that you can do when you know how much you're spending. Yeah, that's cool. All right. So what about offensive? What do you do to make more income in your life? I mean, you started out making almost nothing when you had that first deal. So what have you done? By the way, what was your job through all this and do you still work today? And then what do you do for more money? So my first four years of my career out of college, I was in real estate full time. So it was commission only. you don't eat unless you sell something. And I remember thinking when I got out of college that I was going to be so overmatched. Because if you think about it, a 42 year old, if they started working when they were 22, has 20 years experience. The 24 year old who has two years experience has, the 42 year old has 10 times the experience that the 24 year old does, right? 20 versus two years of experience. So I just remember thinking, I'm going to devour every book on sales and negotiating that I can get my hands on. because I was so concerned that I was going to be overmatched. And then I did what Zig Ziglar recommends and turned my car into a mobile university.

So I'm just Houston traffic is brutal. And if you can be trying to get like a, I mean, you basically can get a four-year degree just sitting in Houston traffic for a year. So I'm just trying to increase my income as much as possible while keeping my expenses down, learning everything that I can so I can compete. And by the way, I found out like there's nobody. there reading books on sales and negotiating. That 42 year old is going home and watching Netflix like everybody else. It's so true in almost every area of life, right? If you want to be really, really good at something, like if you're in sales, if you're in any job that has any ability to increase or grow, like just by reading some books on the topic, you'll be one of the best.

My little brother is a waiter at a place out near Boston. And I always tell him, I'm like, Chris, like, just go. He'll probably listen to this podcast. I'm like, just go read some books on like how to be the world's best waiter. I can almost guarantee somebody's written a book on being an amazing waiter or go sit down and like ask some incredible waiters. He actually did this. He actually told me this. Sat down with like the best waiter at his restaurant and was like, tell me, how did you do this? Like how did you become such a good waiter? And like people are very open to share that, but it's one percent of the world that actually does that kind of thing, that invest in themselves. That's a great point. I see a stat come up every once in a while that says that 70 percent of

college graduates never read a nonfiction book after graduating. Wow. That is astounding, right? Astounding, yeah. But it makes it, it's so easy to separate yourself when you know that kind of thing. I remember seeing a quote, I believe this was Jim Rohn, who I know gets mentioned on your podcast quite a bit. I quote them like every day. Yeah.

He said that the true rewards in life are on the top shelf and the way that you get to them is by standing on the books you read. So I just devoured everything I could, man. And I'm still a reader. I probably read finish, probably third. 35 books a year and a few of them I'll read twice. Other than real estate, this is probably the topic I'm more passionate about than anything else because so many people start off with the excuse of how it's hard or they don't know what to do. And so few of them understand like once you can stand on a couple books and you reach the top shelf,

you're like, I cannot believe how easy that was. I mean, I have example after example of how I rose to the top of whatever I was doing. And that was really before I had any confidence or any focus or I. I was even trying to, right? I just tried harder than other people did, and boom, became the top. I was a police officer. I transitioned into full-time real estate sales two months into the year. So I had 10 months when everybody else had been doing it the whole year. I finished my first year as the top agent in the biggest brokerage in our entire area. And I didn't even know what I was doing yet, right? I did not have sales skills. I'm not really the easiest guy to talk to. I hear from everybody like five

times a day that I'm really intimidating. It's all I ever here. Nothing you want in a salesperson, right? no one else was trying. I was, I wanted it so bad. I was listening to three podcasts a day. I was reading every book. I was talking to everyone I knew that was really good at it. And I'm absorbing stuff with purpose. Like my insecurities about how I did, it wasn't a good salesperson, drove me to want to excel in that area. And Brad's talking about that. And once we finish up talking about his offensive techniques, we're going to get into his mindset and how that was developed. But what I want to convey is if that is you, if you're that person who's like, I don't know how to analyze deals, I guarantee you that that will.

become a strength of yours if you pursue the trick to analyzing deals. Or if you think I don't know how to network, like you can become the best networker on this podcast because you will be intentional about learning those networking skills where like the natural who just does it without trying, will never read a book in their life, like what Brad just said, will not focus on trying to be better at it and won't grow that skill. I just have so many examples. I can't take up the whole podcast talking about it. But if you want to be the best in this country right now, you're surrounded by millennials that don't want to be the best, that want the world to be given to them. You're surrounded by older generation people who don't want to have to learn new stuff, right?

They're kind of stuck in their own ways. If you're the person that can improve your skills at anything and make it known to your boss you want to, oh my God, everybody's going to want you. You're going to be the top guy. Brad, can you, I know that for 13 years, you increased your income year over year every single year. Can you share a little bit about other than reading books, what you did? that caused that to happen.

Yeah, you made a bunch of good points just now. Especially, I wrote a blog post about networking because I think it's so important that people understand that good networking doesn't look like networking. It's becoming a person of value to other people. And that is how you build your network. So that's number one. So you're going to surround yourself with a higher caliber of person

as you continue to develop yourself. And you're going to learn to make the highest and best use of time, which might be most important, as well as developing your habits. I think habits are everything. But if you just keep your head down for, let's say, 10 years and work 10% harder than your peers, the compounding effect of that is going to be huge. So when you pick your head up in 10 years and you look around, you're going to see that you've separated yourself. And it's because you've incorporated these habits and disciplines into your life. And I'll tell you, if I give a talk or something, or I'm given an opportunity to speak to young people.

These are the three fundamental things that I suggest. And that is number one is to keep a journal. And a journal is where you put your goals. It's where you put who you met. So one of my favorite books is How to Win Friends and Influence People by Dale Carnegie. And in that book, he said that a person's name is the sweetest sound in the English language, at least to them, right? but it's happened to me several times because I write someone's name down when I meet them.

It's happened where I'll meet someone for a second time and I'll call them by name and they'll say, I think we've only met once. How do you remember my name? And I don't say it, but I'm thinking, how could I not? I wrote it down the night I met you. So it's those little idiosyncrasies that help you to build everything, right? I mean, that's networking stuff right there. That's building relationships.

But in your journal, you put your goals, who you met, what you learned, how it impacted you. It helps with clarity. It helps if you have any type of anxieties. If you want to start your day with like a gratitude practice and find three different things that you're grateful for, that's going to improve your mood, which is infectious. So that's number one is keeping a journal. And I think that's probably number one in terms of if I had to attribute one thing to whatever success is, that I've had, it would be keeping a journal. Number two would be... Real quick, before you get number two, I was going to say, BiggerPockets actually has a

real estate investor success journal coming out called 90 Days of Intention, coming out here at the end of the year. So if you're listening to this after the end of the year, go to the BiggerPockets.com.com. Sstore. And if you're listening to this right now, it might actually be in pre-order right now. I'm not sure. But check it out, biggerpockets.com slash store. You'll see it there. But, yeah, I also believe strongly in the journal thing. It's been a huge impact of my life. Yeah. And you can see how. how you grow over the years.

So, like, I can look back and see what I was thinking when Barack Obama was elected. And then I'll be able to hand that to my kid. I mean, how cool is that kind of thing? And then I can also see, like, when I was 24 and 25, what I thought was important. And then I'm like, wow, my growth is pretty impressive because I can't believe I cared about that stuff when I was 24. So, yeah, that's huge. Number two would be, and we talked about it already, but just start buying books.

You can't spend enough money on books. View that as an investment. it shouldn't even factor into the budget stuff because that's going to improve yourself immensely and really separates you. So many people are distracted nowadays. So if you can just immerse yourself and absorb some knowledge from books, everybody who's had success has written a book. You've written a book, right, Brandon? I have. So it's David. Yeah. Yeah. Yeah. Yeah. Good way to reach massive amount of people in like an easy, easy way. So yeah, anybody who, yeah, exactly. Read books. I love it. And the process probably sucks, but once you're done with it, it's just wonderful.

And you can pass that down forever. So good for you all for writing a book. I'm not there yet. I'm in the blogging phase, but eventually I will write a book. Well, check out, go to Google later and type in how to write a book in 100 days, Brandon Turner. Like, I wrote a blog post and I did a podcast episode for somebody else's show on how to write a book in 100 days.

So anybody listening to this, too. If you want to know how I wrote my book in 100, all my books in 100 days, that will document exactly how I did it. It's way easier than most people think. So check it out. Awesome. And do you guys have your own publishing house? We do. Yeah, BiggerPockets Publishing. Nice.

Yeah, it's pretty fancy. So there's also, there is a process for getting published at BP, too, and I don't know it. So if anybody's listening to this is like, hey, I'm going to write a book and I'm ready, email support of BiggerPockets.com and ask to be connected with the book department. There you go. Nice. So where was I? You were at number two by books, but it was number three. Thank you.

Number three is set goals. And you've got to have different categories, whatever's important to you. so spiritual, financial, your family, your relationships, write those things down. For 15 years, I have taken time at the end of the year, reflected, gone over the past year, see how I can harness what I learned, who I met, and see how I can get better for the next year. And that is the best way to do it. I don't care of an asteroid is coming toward Earth. I'm going to get those 90 minutes done the last day of every year.

So that's really important to me. I love it. My wife and I go out to a restaurant every single year on January 1st, and we sit down at the same restaurant, or the print of the same meal and we go over our goals for last year and what we're going to do this year. And it's been a huge, I mean, like just looking at year after year after year because we use the same little notebook for each one, it's just been unbelievable. Like just to see like the growth and how our, whatever we're setting, we tend to, it tends to happen. And in fact, we tend to exceed our goals for the most part because when they write down and work towards

it, amazing things happen. Beautiful. You have an amazing way of looking at the world where you just recognize like no one else is negotiating. I'm going to make sure I learn how to negotiate. Nobody else is trying. I'm going to try harder than they did. Can you share a little bit with us about how you develop this mentality, like what you went through that caused you to end up here? Yeah. I can actually pinpoint a day that changed my relationship to, yeah. So November 7th, 1991 and the day I remember the reason I remember the day is because Magic Johnson retired on that day when he announced that he had HIV and I remember not knowing what HIV was. And that was pre-Internet days. So I would wait until my dad got home and I would ask him what HIV was. But when my dad walked in that day,

his eyes were bloodshot red and he looked like he had been crying. And I had never seen a grown man cry before. So I knew it wasn't good, but he told my brother and me to sit down and he said that he was leaving. And I was 11 years old at the time. And when he moved out of state, I knew that he wasn't coming back. I mean, he had started a new family. And so my mom was psychologically and emotionally, let's say, unwell. And she didn't have a job. And I remember thinking, like, am I still going to be able to, like I didn't know where money was going to come from. And I remember thinking, am I still going to be able to eat this like I have been? And so it was a very precarious time in my life and stuff to talk about.

But it drove me to do things that I wouldn't have done. And I can give you an example. So my first experience with business and with money was I was 13 years old and I would go to the trading card store with the money that my grandma and my aunts had given me for Christmas or my birthday, I would stockpile that money, and then I would go to the trading card store and buy a box of basketball cards. And the boxes were $40, and there were 36 packs in a box. And I would take them to school, the packs, and I would sell them out of my backpack for $2 a pack. And so I would make $32 on each box, which is like an 80% return. I haven't been able to replicate the returns that I made at 13. But yeah, I mean,

I mean, at a young age, I learned how to manage money, and I learned how to invest, and I learned the discipline and delayed gratification of not opening the packs because the packs that I would not sell, I would bring home with me, and then I'm staring at them all night. And I wanted the Shaquillo, the Shaquillo-Neal card that was in there, but I couldn't open them because then I would be sacrificing all of my profits. So that was kind of how I got my start and where I learned discipline and delayed gratification. and it wouldn't have happened if I hadn't been through a tough time like that. Yeah, that delayed gratification thing is huge, right? I mean, like, we all know, like, many of us have heard the study, right? The marshmallow test were like, I can't remember what famous Stanford University.

Yeah. Yeah, where they like gave a bunch of little kids, like, what was that, one marshmallow, but if you wait five minutes, you can get two or something like that? Yeah, they put them in a room and they said, I'm going to leave this room and come back. And if that marshmallow is still there, I'll give you a second one and you can eat them both. And then they left. those kids over like the next 25 years of their life. And they found that the kids that had the ability to delay gratification and not eat that

marshmallow were like noticeably more successful than the children who were not able to do that. And the implication was if you can delay gratification, your successful compound. And that's exactly what Brad learned. Like he had to fight a battle at 11, 12, 13 years old that then when he overcame it, the ability to not open the baseball cards and delay gratification. certification served him in all these other areas of life. And it's funny that you would have never thought at the time that would be a blessing, right? It just felt like a horrible curse. Right, because when you go through the depths of a dark place and you come out of it, as long as you don't self-medicate or drown your sorrows in alcohol or something, you come out stronger and wiser. And your relationship to fear is forever changed. Because, I mean, as I got older, I noticed that relative. to my peers, I had a serious capacity for stress and an aptitude for risk-taking that would

probably break most people. And for me, it was just a Sunday at the park. Like, I didn't understand how people couldn't get over the most trivial of hurts. And so I became like this anti-fragile, like beyond robustness and resilience where it served me in so many different ways. I have a good buddy that just started investing in real estate. And at my wedding in May, he stood up and said that half of what he does, he's copying my example. And so his story is really interesting because his brother died not too long ago. His only brother, and he was only about 40, 41 years old. And he told me, it was really rough. I mean, he had to carry the guy upstairs. And he lived with him until he died. And he told me a few months ago, he said, you know, after what? I've been through, he said, I feel like nobody can fuck with me. And when he said that, man, it resonated with me so strongly because it's exactly how I felt most of my life. And so you face rejection and you swipe it off and you face, you know, like losses in your portfolio and you dust it off. So yeah, you just become, you have a strength and resilience where you're bold,

where other people might be apprehensive. And it's powerful, man, but you have to struggle through it. You have to endure it. And your relationship to pain is forever changed. Tell us about some ways that you changing your relationship to pain, assisted you or helped you in your real estate investing. Probably rejection. So I was a sales guy.

I also played college baseball. So I, you're successful like 30% of the time. And that is success in baseball. So in sales, as long as you continue improving your communication and presentation skills, your batting average is going to go from 20% to 30% to 40%. So I would say more than anything, probably just the resilience and the ability to bounce back from anything life throws at you. I love that.

Yeah, it's really, really good. Anything you want to add, Brandon, before we go to the fire round? Yeah, I'm just curious of like where do you see yourself heading next? You know, you've got this like what I call like level one financial first. freedom, which is where you can pay all your bills. It's not like, I'm going to go buy a jet and go, you know, by a basketball team, right? But it's like level one. It's like, I can pay my bills. I'm good. I can travel a little bit. I can have a good life. I'm going to keep expensive low. Do you plan to try to like just supercharge that and go become a multi, you know, billionaire here?

Where do you see yourself headed? I don't. I think that I have more time wealth than a lot of billionaires. So on Thursday, I'm headed to Munich for three weeks and my wife is going to meet me there. So one of my retirement gigs is touring people around central and Eastern Europe. And I'm able to do that because when I was in my travels since April 2015, one day I was sitting at a cafe and a guy said, man, you ought to turn this into a business. So I do that like two or three times a year where I'll show people around Munich and Prague and Budapest. So that's that's one thing that I'm able to do that if I was climbing the hierarchy, I wouldn't have the time to do. And financial freedom is not only like those at the top of the hierarchy aren't financially free. You have to opt out of

the hierarchy altogether if you're going to be financially free. So as it stands right now, I mean, I still help a few friends with real estate deals if I'm in town, but I'm enjoying writing and I'm enjoying traveling. I'm newly married. So the sky is, it's wide open, man. I've got, we don't have gaudy tastes. I mean, she's not into Louis Vuitton bags. And yeah, I mean, if worse comes to worse, we could move to a low-cost area that I'm familiar with and live off of what is like, you know, if you live in America, you're in the top 1% of income earners everywhere. Yeah, I love that you said time wealth, right? Like so many people are worried about wealth, like money wealth, but there's something

more powerful and that's time wealth, right? And when people hear, you know, wealth and financial freedom and getting real estate and getting all this stuff, we oftentimes think of the fancy cars and the Louis Vuitton bags and all that. That's like how the world sees what we do. But that's not why most of us do it. Like, right? We want time wealth. We want, we want to be able to like, hey, I'm going to go spend three weeks showing

people Munich. Like, what a cool thing, right? Like, it's not like we're all lazy and we don't want to work, right? None of us will ever stop working entirely and sit and watch TV every day, right? Like, this isn't retirement in like our grandparents' retirement. It's the freedom, like how I define financial freedom is I would say it's the freedom to do what you want, where you want, how you want, when you want, with who you want, right? Like, yeah.

Like, it's nobody's going to tell me I have to do. drive an hour to work every day, sitting in an office trying to climb some hierarchy. That's what we're talking about here. And you do not need hundreds of properties to get there. I love that you did it with five. That's fantastic. Yes, I think you said it, life on your own terms. And if you take a macro perspective, you realize that what we're able to do has only been possible within the last like 1% of human existence. So take advantage of it if you can. Yeah. Fantastic. Fantastic. Like, well, I love that. And I want to kind of end this segment of the show on that.

And transition over to the next segment of our show, the deal deep dive. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily.

They focus exclusively on landlords, whether it's a single-family rental, a burr builder's risk policy, or midterm holiday guests. You get fast quotes, flexible coverage, and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market.

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

in the industry. Now, they're the fastest, too. They just launched 10-day DSCR closing. That's right, 10 days, and they're still the only lender with a DSCR price beat guarantee. That means faster closing, the best terms, zero guesswork, that's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast, easy? Just use Indeed.

When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice. on other job sites. Indeed, sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored post. The best part, no monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up.

you're hiring right now with Indeed. And listeners of the show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com slash rookie. Terms and conditions apply.

Hiring Indeed is all you need. All right. Let's get to the deal deep dive. This is the part of the show where we dive deep into one particular part of your investing, like one specific deal and we'll ask you a bunch of questions about that. So let's just go jump right into it. First one, you have a deal in mind, right? You got something in your head that you can talk about? Yeah, they're all very similar. So yeah, it should be easy. All right, good. So let's do the first one, like, from a high, I'm going to ask you like how you found it all that

in a second. But like, first of all, what is it? Like a single family house, I'm assuming. Yes. Three bedroom, two bath, single story, built after 2006. That's my target. There you go. And where was that located? In the Houston area. All right. Perfect. So how did you find it? I set myself up in the multiple listing service with very strict parameters. And I was sent a notification by email.

And I went and looked at it that day, ran some numbers on the back of an envelope, and made an offer. Perfect. All right. How much was it? It was 80,000. I mean, I had some that were 72, some that were 80. but between 70 and 90 were all of my deals, yeah. I love that.

Well, what kind of property was it, I guess? A single family dwelling that was about 13,400 square feet. Okay. How did you negotiate it? Anything fancy in there? Nothing fancy. I was competing with people who had cash. So there were some things that I could do, like reduce the option period.

Do you guys have option periods where you live? Yeah. Well, depends. Explain what you mean. Yeah. So in Texas, you have the standard is 10 days and you have the unrestricted right to terminate for any reason. Oh, yeah, we don't have that. Oh, okay. So, yeah, you pay for that right, typically $100 or $200. And should you buy the house, it's applied towards your prepaid and closing costs.

But it just gives you an opportunity to inspect the house, negotiate repairs. But you could actually back out because you decide you don't like the color of the front door. Okay, yeah, we have inspection period. is where I'm at, but we don't have, like, and you can, you can ask for an extension period or, you know, when you offer it, you put the inspection period in there. But yeah, we don't have the option. But I have heard that people do that. And I never knew what states have that and what don't, but apparently. I think in Texas, it's like, no matter what, it's built into like the law that you can back out after 10 days for any reason. Is that right, Brad?

Within 10 days, yeah. Yeah. In other states, you have to ask for the period you'd like and they have to agree to give it to you. It's in your offer. Okay. Real estate's very local. Weird. All right. How did you, oh, I guess I'm taking all the questions. David, you want to do any? No, I think you're doing great. How'd you fund it? How'd you fund it? Cash. Perfect, cash. All right. What did you do with it? You held on to it? You flip it. What was the long term with it? Yeah, I have bought and hold and held every investment that I've ever made except for one, which was that three-story house that I mentioned earlier. So Warren Buffett, he was giving a talk to college grads and he said, if I could give you a

punch ticket that you could only punch 20 times in your lifetime and that was all the investments that you were going to make. I think that you would come out ahead doing that. So that was his advice and I've kind of taken that. So I don't have more than 20 investments total. So I'm curious, if you'd held on to all those basketball cards that you sold, what would they have appreciated to at this point in your career? That year was a really bad draft. So I was like Calberg Cheney and like Isaiah Ryder, a lot of flop. So they're not worth anything. It's a good thing that you flipped them.

Sold high. Yeah, exactly. That was a 2005 basketball card time. Okay. Well, I think that's what was the outcome. I'm going to take you, David. I'm going to just take all the questions today of the deep dive. What was the outcome on that?

You still hold it today? How do you manage it? I mean, I'm assuming you still hold it because you don't sell them. But how do you manage it? How do you deal with that property? Yeah. So I manage it remotely myself. And that's another thing that,

we can really benefit from nowadays with the advent of all the technologies that we have, you can manage a property. I have Skype interviewed tenants, prospective tenants from Bolivia and Budapest and Bangkok. If I can't meet them at Starbucks, I will Skype interview them. And then obviously you don't, there's no such thing as mailbox money anymore because people pay you directly through your account. If I have a problem, I have a G.C. or general contractor that I hit up and he goes out to the property and lets me know what it's going to cost. And if I think that's ridiculous, I'll get another one out there. But yeah, you can do that from anywhere in the world. Uber. All right. Last question. David, do you want to take this one? Yeah. What did you learn? What did I learn from? From this deal.

Yeah, any lessons learned? I would say that any lessons that I've learned, like mistakes, is that what you're after? Well, maybe you did something right and you were like, oh, wow, I didn't want to do more of that. Or, yeah, mistakes can be the case too. Or what did you walk away from this deal thinking like, okay, I just learned something big? I would say mistakes only in hindsight because I think that my investing strategy has been sound, but I would have taken more calculated risk when I had a large income, which I don't have a huge income anymore. So I'm playing more defense in terms of my investing strategy. but yeah, I probably would have leveraged a little bit, and my wife and I are going to use debt on a house here pretty soon.

So, yeah, I'm not opposed to leverage. Yeah, exactly. So anyway, yeah, I don't know if that answers your question. But yeah, mistakes only in hindsight. But of course, you would change your investments a little bit if, you know, knowing what you know now. Yeah, that's great. That's great. It's a good deep dive.

I love just how, like, simple. And I mean that in a bad way, I mean, in a really good way. how simple your strategy is. You don't complicate things. You're not like, I'm going to do this and this. I'm going to do this. Like, this is what I want, this exact style of house. I'm going to go out and get it.

Now I got it. I got financial freedom. Done. Man, I told you where I finished in my high school class. I figured I had to master the fundamentals if I could. Just kind of do the basics. Yeah. Fantastic.

Super. All right. Well, let's head over to the next segment of the show. The Fire Round. It's time for the Fire Round. Today's fire on. These questions come direct out of the Bigger Pockets forums. We're going to fire them at you right now.

First question, has anyone compared the returns of a stock portfolio against investing remotely in real estate? I'm wondering if you've ever looked into that or which you get better returns because I'm assuming you have some other investments. You said no more than 20. So you probably have some stock portfolio still, right? I do. Yeah.

Stocks go up seven out of 10 years. So real estate has historically. appreciated, as far as I know, except for the Great Recession. I mean, I haven't looked at stats going back to the Great Depression. But as you said earlier, Brandon, real estate is local. So if you asked me a question about the returns in your particular market, it's going to be a whole lot different from my market, which is different from San Francisco, from Miami. So it's a, it's a sticky question. It's a tough question because it varies so much depending on where you're located. That's so true. That's a really good answer, actually. Thank you. Yeah. And you also have to factor in,

stocks typically, in my experience, wouldn't return what I do with real estate investing, but I also just click a button and I own a stock and I don't do anything, whereas real estate investing takes a little bit more work, right? So it's not an apples to apples comparison in that way. Yeah, that's a good point. I think that real estate allows you a little more control, which is appealing to me. Yeah. But I'm not opposed to. to stocks. In fact, when I sell, did I mention this already, that I have a Vanguard account and I go for high dividend value type stocks almost as like a holding place for cash that I intend to use for real estate. And I know that's a little bit risky. And I'm certainly not recommending that strategy,

but that's how I handle my portfolio. Okay. I like that. Well, Brandon and I talk about having more tools in your tool belt, and that's another tool. If you understand stocks, you factor that into what you're doing with real estate, and you can amplify your returns. But it's less risky for you to do it than me because I don't know stocks, right? So I'm not going to do it, but you're a little more knowledgeable. So I like that. Yeah, I wouldn't say that I'm super knowledgeable about stocks. I just sort of pay attention to what's going on around me. And if everybody's Netflix and and chilling and everybody's got Amazon boxes by their front door, like those are the things. Like when I was in software, everybody was using Salesforce.com and Amazon Web Services. So just pay attention to what people are doing.

And that's the stuff that I try to invest in. And it's never more than 10% of my total wealth, let's say. But I think you should take a little risk with some of your portfolio. I personally invested in Brandon Turner when his stock was much lower and it's gone up quite a bit. So I'm sitting well. Is that because of the beard? Yeah. The beard has helped quite a bit.

Unlike if you bought in Tesla. All right. So next question. If someone has the money to pay a mortgage in full, should they do it or should they invest in new real estate? Well, I think Dave Ramsey would tell you to pay off your house. He believes that's the status symbol of choice instead of, what does he say, the BMW. So, yeah, you don't ever regret paying cash for a house or paying off a house. And I believe Dave Ramsey also says that the grass feels a little differently after you've paid it off. And I can kind of relate to that.

Does your answer change depending on the age of the person who's asking? I'm so glad you asked that question, man, because I know. notice that if people are 33 and under, then they have not yet, and we're in 2018, if you're 33, you have not yet lived through a, you haven't had to show up to work and deal with your boss who has seen his 401K cut in half. You haven't seen your coworkers lose, about a third of your coworkers lose their jobs. So you're going to have a completely different mentality to somebody who live through the Great Depression or somebody who lived through the circumstances that I'm just talking about. We're in an incredible run with real estate and the stock market right now, a nine-year bull market that has, it's unprecedented.

So yeah, I think that definitely shapes your mentality. That's a really good point. Really good. All right. Next question. To MBA or not to MBA? So this person was asking they can basically, they can get into a really good MBA program, which, you know, average graduate getting out of it at 100K a year, at a business. or should they just focus on their real estate? What do you think? Oh, it's a tough question because I do value education, but with education materials being so ubiquitous now, you can log onto YouTube and learn just about anything you want to learn. So it's a toss-up. And technology, we were talking earlier about algorithms and how it's changing your health. I mean, my brother is a pharmacist. There's a good chance that his job is automated

15 years from now, right? Because an algorithm might be less likely to make the same mistake that he does as a human being. So, yeah, I think I'd go for the real estate, man. That's a good answer. I never thought about that with pharmacists, but you're right. They're going to be like cars, like eventually they'll do away with them. I worry about this quite a bit, actually. Part of it is my, just, you know, I'm a cop. We're always looking for threat. So I'm always thinking about what could go wrong, right? But there's all this pressure right now to like increase minimum wage, pay people at McDonald's $20 an hour. because no one can live on less than that, right? And at what point do they're just like,

you know, we really don't need these people at McDonald's, right? We all complain about their bad attitudes. We just go in there and we choose right off the screen. And then they build machines that can build it without a person putting the ketchup on the bun. They just put it down a conveyor belt and it makes it for you. And now like McDonald's decreases their workers by 80% or whatever. And we have a smaller tenant base of people to stick in all of our rentals. They can afford it.

So I think that it's something just to keep in mind, like as technology, is getting better. The need for people to do stuff is going to be changing. And the job you choose is very important. And the skills you build become very important. Because if you're just living that comfortable life where I don't want to build up skills, I don't want to be out of my comfort zone, you're the first one that that computer is going to replicate. Right. Like, you're the one Elon Musk is going to replace before anybody else. So you should have a little bit of like, you know, I want to read these books and educate myself so that I have a position later on in life. That's exactly right, David. That's a good point. I think the best defense against that is developing yourself into a lifelong learner so that you can adapt to change circumstances and new environments. Amen. I love that.

All right. Last question of the fire round. Last question. Would you buy a property with pending tenant evictions? It's a, it depends question. I guess it depends on the circumstances. I have had tenants before that had really poor credit scores, but I met them and I like them. and I talked to their employer and their previous employer, their previous landlord and the

landlord before them because the previous landlord is likely to lie to you get rid of them. So I've taken chances on people because I think that I have become really good at vetting people and I'm a good judge of character. I think everybody thinks they're a good judge of character. But yeah, I'll make exceptions in certain circumstances. What I love about what you just said there. And I want people, I want to point this out because I want people don't understand. And you didn't say this person had a really bad track record and, you know, they had a pit bull and they had a couple evictions on their record.

And so, but my gut said they were fine. So I went with them. You said, I checked all these other things and I did all of my homework anyway. And there was this one thing or this little, you know, like, I can make an exception there. Like, right? Like, you did your homework anyway. The problem people have is like, you know, there are so many red flags here. But I, in my gut, I'm going to go with them.

And that almost always ends bad. But you like, you came at it from an analytical standpoint of like, you came at it from an analytical standpoint of, like, Like, yeah, they were great in every other regard. I'll mend this one a little bit. That's a great point. I think that people deserve a second chance. I have a great relationship with my mom and dad now. Oh, good.

Good. Yeah. I love them to. And this is like you went through a really hard part when you're 11, 12, 13. Like, that's hard and it shapes you to who you are today. But, you know, I'm glad you turn that around. So that's super cool. And you are who you are today because of those things.

So who knows you would be without it. Well, we're getting deep here. Let's get to the next segment, the last segment of the show. Our famous four. All right, let's get to the same four questions that we ask every week. Number one, Brad, do you have a favorite real estate-specific related book? I know a lot of people would answer that question, rich dad, poor dad, and it certainly taught me the difference between an asset and a liability,

but I'm going to say the richest man in Babylon. I really like that. It's not necessarily real estate Pacific, but it got me saving and investing a large portion of my income in real estate. So that's going to be my answer. Okay. What about a favorite business book? Oh, so many.

Like my favorite biography is Titan, which is a John D. Rockefeller book. I like all of the Robert Green books like mastery and the 48 Laws of Power. My favorite memoir is probably Shoe Dog by Phil Knight. I keep hearing that, and I still have not read it yet. That's got to go through it. Excellent. Yeah, it's really good. Okay.

What are some hobbies that you enjoy? I enjoy travel, obviously. I enjoy staying fit and hanging out with the wife. And I like reading a whole lot, journaling, meditating. I'm a bit of a weirdo, man. I go for walks, and I spend a lot of time in my own head, just thinking and writing and that kind of thing. What's your favorite place you've ever visited? Oh, you're 54 countries.

Ooh. I really like Croatia. I think it's underrated, probably because it's on the other side of Paris and Italy and all of that. But it's beautiful. It's got history. It's got islands. Yeah, I've never even considered it, but I'm going to consider it. I've heard their beaches are like some of the best in the world.

Are you saying that because they're topless? No, I didn't know they're topless. But now I have to wonder, like, who am I getting this advice from? Yeah, yeah. They have a lot of rock beaches. So you have to wear like swims, they call them, you know, like the kind of shoes that you can wear in water. There's not a lot of sand, but there's some beautiful rock beaches. Cool.

Cool. All right. Last question. Brad, what do you think sets apart successful real estate investors from those who give up, fail, or never get started? You've got to take action. Once you've read all the books and analyze the deals and your sets. up in the system, beyond that, you go look at the property, but you've got to take action. And once you do, I think that you'll probably get addicted. It's like getting a tattoo, man.

Once you get one, you're going to want to do the next one and the next one. Do you have any tattoos? I do not. No. I, I adhere to the... Once you do, you have a lot of them. I'd hear to the Kim Kardashian standard of why would you put a, what does she say, why would you put a bumper sticker on a Bentley. That's funny. That's funny. All right. Well, last question for you, Brad. Where can people find out more about you?

So my blog is manoverseas.com. I write about financial independence and self-development and travel, the kind of stuff we've talked about today. And I also mentioned that I'm headed to Munich on Thursday because one of my retirement side gigs is touring small groups through Central and Eastern Europe. So there's a section on the blog devoted to that. And then I, of course, I'm on Twitter, Instagram, Facebook, and I'm at man underscore overseas. Awesome. Good deal. Well, thank you, Brad. This has been awesome having you on today's show. I love your story.

Thank you for sharing some of the stuff that you did and giving people an actionable roadmap that they can follow and showing like you don't need 100 houses to hit financial freedom and live the life you want. Did you have anything you want to add, Brandon? No, that's pretty much it. It was an awesome show. So, Brad, thank you very much. Thank you, guys. I enjoyed it. All right. And with that, we're going to just take this show out. So if you guys enjoyed today's show, make sure you leave us a rating review in iTunes, Stitcher, wherever you listen to show's at. And, of course, come back next week for another real estate investor interview.

So that's all I got. David Green, you want to take us out officially? This is David Green for Brandon Stock is Rising Turner, signing off. You're listening to Bigger Pockets Radio. simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com.

The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. and remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.