BiggerPockets Real Estate Podcast - 322: 3 Things Every Leader MUST Do to Scale with Ben Kinney

Episode Date: March 21, 2019

Today’s guest grew up poor, living in a cabin without power or running water. But now he controls millions of dollars in real estate, owns several companies, and leads one of the country’s top-producing sales teams. How did Ben Kinney pull that off? The story involves, of course, hard work and tenacity. It involves a book that shifted his mindset at just the right time. And most importantly, it involves teamwork. In this episode, Ben lays out the hiring process he used to build a real estate agent business. He talks about how he got used to rejection working as a “cable guy” and shares how YOU can find an off-market deal and start house hacking—without a lot of money out of pocket. Ben also details the seven goals that influenced his every decision and the three things every leader should do when growing his or her business. (Hint: “inspect what you expect.”) In the “Deal Deep Dive” segment, Ben tells us how he was able to buy a company for a hefty price by controlling the terms of the deal. He’s a big-picture guy, who will challenge you to think differently about real estate and business. If you feel held back by tasks you don’t enjoy, listen to this show for practical tips on how to delegate more effectively. Today’s episode will inspire you and help you invest more efficiently, so you can do what you love and watch your wealth grow. In This Episode We Cover: The amazing story behind how Ben got started selling homes Being recession proof Why he builds and buys businesses Using synergy to grow his RE empire What he looks for in a deal Why he likes to buy and hold instead of flip How big businessmen save on taxes What is the income triangle and how to flip it Finding great leaders as partners or employees Building an ecosystem to help find him deals Questions he asks new hires or partners to determine if they are the right ones The story about how he spent six days to find ONE hire Working only do things he enjoys And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar Brandon’s Instagram BiggerPockets Facebook Page Pat Flynn’s Podcast The Real Estate Guys BiggerPockets Podcast 315: How to Read Human Nature to Succeed in Life with Bestselling Author Robert Greene BiggerPockets Podcast 113: Becoming a Millionaire Real Estate Investor Using The One Thing with Jay Papasan David’s Instagram BiggerPockets Instagram Books Mentioned in this Show The Millionaire Real Estate Agent by Gary Keller Cashflow Quadrant by Robert Kiyosaki Rich Dad Poor Dad by Robert Kiyosaki Set for Life by Scott Trench Extreme Ownership by Jocko Willink Tax-Free Wealth by Tom Wheelwright The ONE Thing by Gary Keller and Jay Papasan Tweetable Topics: “I hate when people call me an entrepreneur and the reason is because 98% so-called entrepreneurs fail.” (Tweet This!) “Systems make the ordinary become extraordinary.” (Tweet This!) “People complicate things to justify their inactions.” (Tweet This!) “You can’t be chasing money because money runs too fast.” (Tweet This!) “Hire the things you don’t enjoy.” (Tweet This!) Connect with Ben Ben’s Personal Website Email Ben Ben’s Facebook Page Ben’s Twitter Profile Ben’s Training Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show number 322. I think there's hunters in the world and there's gatherers or farmers. I'm a hunter. You need to set me out to kill something and then somebody else needs to process it so I can go kill something else. Well, immediately by doing that, I went from 24 transactions to 84 transactions. That took me from 150 or 200,000 a year to 500,000 a year in income. You're listening to Bigger Pockets Radio. Simplifying real estate for investors, large,

and small. If you're here looking to learn about real estate investing without all the height, you're in the right place. 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 man in black. Mr. David Green. How you doing, buddy? I'm doing fantastic, man. I'm actually jazz. We did one of the better or best podcast episodes, I think I've heard in a really long time. I mean, every time I listen to this guy speak, I walk away with inspiration. And I think the listeners are going to have the same experience today. Yeah, I totally agree. In fact, I know I say this probably like all the time, but like this is

one of my favorite, like top three of all time Bigger Pockets podcast episodes that we've ever recorded. Just like really, you know how like a book hits you in the right spot? Today's whole interview just like hit me in the exact spot I needed to hear today. Like, I've been going through a lot of like thinking and planning and visioning and anyway, fantastic. I actually spent like, I flew back from, I was at the best ever conference in Denver just last week, which this now comes out like, you know, in the future. But anyway, back when we're recording this last week,

and on the plane ride back to Maui, it was like, you know, a seven-hour plane ride. I spent the entire thing just like writing up, like this detailed vision of like where I want to see my real estate investing business go in the future. Because for a little while now, I've just kind of been hanging on, like, you know, rested on my laurels a little bit,

got my almost 100 units and I've been feeling pretty good about it. But I don't know. I just had like an epiphany. And I'm actually looking forward to sharing it here in the near future with all you all in the podcast. We'll talk more about that. But I'm still putting finishing touches on where I'm doing it. But anyway, today's episode. Anyway, enough about me though.

Let's get to today's show. But before we introduce you to Ben, our guest today, let's hear today's quick tip. All right, today's quick tip. It's really, really simple. Look in your network right now. Look around you, the people that you know, and who's like the highest talented person you know. Talk to them, like get to know them and ask them who's a talented people they know. Like as one thing Ben talks about today, so much of success in any business about who you know,

who you can bring into your organization, who can help you with stuff. I'm not saying you have to have a full-time employee right now, but start building those connections, that networking, start talking to people immediately because it's the talent that you bring into your organization that's going to define whether or not you succeed or fail. So start building those relationships right now. And it's going to help you out here at one, two, three, five years in the future. That is your quick tip. And if you live near me and you want to do that, come to my meetup where you can meet people

that you can start putting this into play. You know, I say this because I really feel when this episode is done, people are going to feel like their mind was blown. And I don't want that to pass and you don't take advantage of it. So if you walk away like, wow, I need to make some changes. Get yourself plugged into a group of people. do what Brandon said, reach out, talk to people so that you can kind of take that and create momentum

that you keep going with it. It wasn't just a momentary experience that hit you and then pass and you fell back into your old pattern. Yeah, that's, yeah, so good. All right, so... There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have.

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Let's get to today's show. Of course, if you have not yet left us a rating or review in iTunes, it would really help us out a lot, so please do so. Or if you're listening to us on Stitcher or whatever, just go leave a rating and or review for us. Let people know the show is good. If you're watching us on YouTube, be sure to click that thumbs up button.

It helps us out a lot. And last thing I'll say, too, can you follow us on Facebook at Bigger Pockets? Just go follow us on Facebook. I know there's like a quarter million people listen to every episode of the show, but we only have like 150,000 followers on Facebook, which means there's 100,000 of you

who are not following us on Facebook. or maybe you don't have Facebook. It's probably not a bad thing. All right, let's get today's show. Today's guest is Ben Kinney. This is somebody who David Green has been gushing about for years, how I need to meet this guy. I need to talk to him. David's got like this incredible man crush on Ben Kinney, and we have him on the show today. Ben is a real estate agent, a real estate investor, a business owner, and one of the smartest

people I've ever known. I mean, like, it's so clear today. He goes through his, like, and just a ton of stuff. you guys listen for his discussion on flipping the triangle that phrase is going to come up later flipping the triangle he talks about the five areas where he invests his money into and then he talks about he lists out his like actually seven goals like he lists what his seven goals are towards the end of the show phenomenal and his talk about how he decides what to do the shiny object syndrome he has a total cure for it so listen for that later in today's show and again if you love this show make sure you

share this with somebody that you think could benefit from it again he's got a very powerful story So without further ado, I'm going to let you hear a story. Let's get to the interview with Ben Kinney. All right, Ben, welcome to the Bigger Pockets podcast. It is really, really good to have you. I'm excited to be here. Thanks for hosting me today. Yeah, this would be fun.

So I hear your name a lot. Like, I mean, I'm not even a real estate agent, but I hear your name like uttered in various circles a lot. So, you know, for years, I've known kind of a little bit about you when we were in similar areas. But today I want to dive into your story, then to kind of figure out actually who is Ben Kinney and what's kind of your background. So why don't we start at the very beginning? I mean, tell us about who you are, where'd you come from, and kind of walk us into your journey of getting into real estate in the beginning. Sure. Yeah, the kind of quick and simple story around that is my parents separated at a pretty young age. I think I was two or three. And kind of a weird situation back then and probably today it's even weirder is my dad took me at two or three years old and my mom took my sister. And my sister had a rough childhood too. She went into the single wide trailer with lots of drugs and that kind of stuff. And my dad took me up into this area. area called Oso Washington.

I don't know if you ever heard of that brand. But it's not heard of that. It's where that big landslide was in Washington State a couple years ago that wiped out that community. Yeah, yeah. We were in a cabin that was about 270 square feet. Half of it was filled with kind of debris and boxes and stuff. And my dad and I, we slept in the other half.

There was an outhouse and a wood stove and we cooked on the wood stove and we didn't have power and we didn't have indoor water. Wow. Yeah, true story. It was about 100 yards. to the outhouse and I'd, if I had to go to the bathroom in the middle of the night, I'd run there because I was still kind of scared of the dark. I'm probably still scared of the dark today. Yeah, I still run to the bathroom. Yeah, right. We relied on the food bank. It was a

small cabin that was rented. We didn't even own it. My dad had broken this couch in half and I slept on one side of the couch and he slept on the other. The adverse was every other week, I went to moms and, you know, by seven or eight, I had witnessed my first heroin overdose. and mom used to do a lot of drugs. I slept on her lap and a lot of alcohol and those sort of situations. And I say that, but my mom was a hard worker. She was a janitor during the day and a waitress at night

and she did everything she could with the gifts that she was given. But she went through her own bad childhood. And I think you see that. I think that's why I have such a passion towards money as my mom was abused and sexually and physically and emotionally from a very young age. And she used drugs to cope with that.

Well, over time, I kind of adopted this idea that I wanted to break the cycle. I wanted to break the cycle of poverty for myself and for my future generations and for as many other people as I can. So at a very young age, I decided to chase money. I thought I was going to be a school teacher because I love teaching and I love kids. I didn't pay enough money. So I started going after this, whatever would pay me the most. And that started into being a cable guy.

and then selling cable TV, which gave me the gift of real estate is I knocked on probably 40,000 doors and probably have called a quarter million people, which means I have no fear of no. I've been chased by dogs and sworn at and all that kind of stuff. I actually think that's probably one of the most valuable skills, a real estate investor or an agent, yeah, can have is that ability to go after something knowing that nine times out of 10 or 99 times out of 100, you're going to get a no, you're going to get rejected. But it's that process that if we keep with it, that you generally find success. So how did you get from cable to real estate?

Yeah, that's an interesting story. I met this lady, and she called in a trouble call for her cable TV wasn't working. So they sent me out there. And I walked in and fixed her cable and started talking to her. And she said, I just bought this place. And I said, oh, it's a cute condo. And she said, it's not a condo. It's a duplex.

And I said, well, what's the difference? She said, well, I own both sides. And I said, well, why didn't you just buy a house? And she said, well, the neighbors, they cover my entire mortgage. And I'm not a super educated bright kid. I sat back for a second and I thought, this lady lives for free. Yeah. Yeah, not only does she own real estate, which my family really had never done, she lived for free. I thought that was the greatest thing I'd ever heard. So I went out and I talked to a loan officer and he said, I need 11,500. So, I sold a couple things and worked a little harder and saved up 11,500 and I got my prequel for 230 or 235, whatever it was. And then I found a real estate agent. And I told the real estate agent, I want to buy duplex. And I want the free living deal. And he showed me one, but it was too expensive. And they started showing me condos and in the houses, but he didn't understand that I wanted the free deal. So I just started driving around and writing down addresses of duplexes that I liked.

and I went to the assessor's website and started sorting through there and finding out-of-area owners, people that had the tax-forording address out of state. And I just track them down back then. I think it was white pages or whatever it was called. And I called this person and said, I want to buy your duplex. And they said, well, we've considered selling it. And I said, okay. Well, I called my agent back and said, hey, agent, I want to buy this duplex.

What do you make an offer for 228? And he said, that's too low. It's waste of time. I said, okay, hung up the phone. And I only knew one other agent, and her name was Catherine, and she was dating a guy that worked at the cable company with me. And she lived three or four counties south towards Everett, Uncle Tio. And I called her and said, hey, I want to make an offer.

Here's the name and phone number. And they already said they'd sell. And here's the address and here's the price. She makes that offer, and they accepted it no counter. So I got this duplex for 227, 228. My mortgage was $1,10. And the neighbors next door paid $1,200. So I got my almost free.

I had to pay $10 a month. And the bonus was, once I moved in, I realized it was three college girls on the other side of the duplex, which was super cool. I'd never, I'd never imagine that being an option, right? It's not a bad ROI on $10. Well, you know, that agent that helped me, Catherine, about 2003, 2004, her closing gift was not a shi-lowe's gift card. It wasn't a basket. she gave me Gary Keller's book, The Millionaire Real Estate Agent. And I don't know if that was the only book I've ever read.

I hadn't read a whole lot of books in my life, to be honest. And I read it. And I didn't understand it because I hadn't read cash flow quadrants or rich dad, poor dad, or anything like that yet. But what it said was you could own your own business. I had been laid off two times from the cable company. I'd laid off my people a couple other times. My joke was I get canned more than two and

at Comcast, man, because they'd lay us off all the time. And I just thought, you know what, I don't want to wake up like my boss that have been there for 50 years and then walk in one day and they lay you off. And so I just decided to get my real estate license. And I ended up at California because Gary and Jay wrote the book called The Millionaire Real Estate agent. And I was going to follow that plan. And that was about 2004, I think. That's cool. Okay, so I want to touch on something here. We've talked about this a little bit lately on the show. And I even posted on my Instagram the other day, just this quote from Tony Robbins about modeling, about, you know, seeing what other people are doing. And rather than just reinventing the wheel, you just model what they're doing and it would probably work out pretty similar.

And David just mentioned that he's modeling your business. And then you just mentioned how you were just modeling what they had put in their book. I just something that a lot of people don't think about is like, why to just see what's already working and go do that. Have you found that trait to be like common throughout your life or are you a little bit more of a trailblazer figuring out your own thing? You know, the word I hate the most is when people call me an entrepreneur. And the reason is, is because 98% of entrepreneurs fail in their business. And I never wanted to be associated with anything that had a 98% failure rate, right? That was like my dating record.

I wanted to be associated with something, something that had an 80 or a 90% success rate, right? So I never liked entrepreneurs. I read a message from John Maxwell once that said, systems make the ordinary extraordinary. And I consider myself a pretty just ordinary dude, cable guy turned real estate guy, but I'm just simple. And one of the beauties in our businesses today is I believe that people complicate things to justify their inactions.

And they come up with all these spreadsheets and org charts and big gigantic plans. And then they never do anything with it because it's so complicated, they don't know where to start. So I just adopted a plan that I should be able to explain anything I'm going to going to do on a single piece of paper with a Sharpie. In a perfect world, I would have gotten that info from somebody else. I would have already modeled. And maybe I change it 20%, but 80% is proven.

That kind of answers your question there. Yeah, that's exactly what I was thinking. I mean, like, I think of everything I've ever succeeded at, like in life. I mean, the fact that we're on this podcast right now is because I looked at the guy named Pat Flynn, who has a podcast on like entrepreneurship, right? And I'm like, well, Pat's successful. Maybe I'll just copy exactly what he's doing. So like we just modeled our show after Pat and after the real estate radio guys, which is another real estate show, I liked their show. It was fantastic. I just modeled them. Almost everything I've done is just like what's working for someone else. I mean, even like, yeah, anyway, like everything pretty much from fitness to business to anything. It's just what are they doing. What are the healthy people eating? Like what are they doing to work out? It's just modeling that. All right. So what happened next? Let's go through your, you know, you bought this duplex, your house hacking, which is what we call it today, like house hacking, living for free. What came next?

Well, I got my real estate license, uh, joined Kelloggles, 2004. I got about six sales my first year. That was like a couple friends, you know, just random people. And then by four or five months into it, it was January and I had no pendings left. And I started getting a little scared. And I went and took a job at the phone company. And I went to the phone company and I went through my training and came back and I got a sales job at the phone company.

And I still had my real estate license. And I sold one of the bigger accounts that had ever been sold. in our department and they and they called me and they said we can't pay you on that. It's too big of an account. I'd hit my quota for the next three years. I did what I did what any other responsible young man would do is I just didn't, I never went back. I didn't call him and quit. I didn't return my laptop or my key card. I just never went back and and since I had already quit the cable company, already quit the phone company. I'm scared of electricity. I was like, I need to make those real estate thing work. Right. So I went back and sat down with my broker and and she,

gave me a couple of options and the options are you know you work your sphere plan we call those the the brian bifini by referral stuff but i didn't my parents and family were on drugs and alcohol and poor and prison or that kind of stuff that wasn't the option for me i didn't have the sphere my friends were buying dirt bikes and trucks not houses or it was the do open houses which which were okay or it was just pick up the phone and call and i'd been used to calling my whole life so i just started picking up the phone and calling i call for sale by owners notice of faults notice of trustee's sales expired listings, whoever I could. And that quickly built a business to, I did about 25 sales that first year. And the millionaire real estate agent books said the next thing you do is you hire an admin.

And you do that so that you can do what I call increase our hourly wage. And I ask myself that question all the time. What is my hourly rate? And I'm always trying to increase my hourly rate by handing that off to somebody else. Ben, thank you for saying that because this is a topic of contention in my friendship with Brandon, that we go over this all the time where he's always doing stuff himself. And like, remember the chair from IKEA that you put together? It took you like four and a half hours while we're in Hawaii, like the best place God ever made and you're spending it building chairs. But that's, it's really hard to do for being honest, right? Because usually if you're a high producer or a successful person, you're good at doing stuff and it's because you do it a certain way.

And it's really hard to leverage that to others. But a lot of people don't understand that they're not going to be good at certain things that they need to be good at to be successful. Like whether you use the disc profile or something else, a lot of our listeners, they know they're really good at analyzing properties, but they're terrible at talking to people or maybe vice versa. Can you give some advice for how you overcame that fear of letting go and choosing the right person to hire as your admin or really do anything that you feel like you don't have to do yourself in the business?

The real reason I hired an admin is I got to 25 sales in a year, and that was my ceiling. I could close two a month. There's other better agents in the world that can do more. But for me, that was my ceiling because I get caught up in the paperwork and the details and dropping checks off and calling. I'm not good at that. You know, I think there's hunters right in the world and there's gatherers or farmers. I'm a hunter. You need to set me out to kill something and then somebody else needs to process it so I can go kill something else.

Well, immediately by doing that, I went from 24 transactions to 84 transactions. And that took me from 150 or 200,000 a year to 500,000 a year in income. And it's because I understood the difference between leverage and luxury. Luxury is when you give up a aspect of your role or your job, and then you use that time to nap or eat ice cream or watch the Netflix or get high or whatever you do, right? When you take that time and you replace it with something that's a higher dollar per hour activity, it's leverage. So as soon as I gave up those things, I was able to get back on the phone and find more deals. And that progressed over time for hiring buyers agents and listing agents and so on.

And then 2008 happened. 2008 was the first time that I understood the difference between poor and broke. I was born poor. Poor is something that you're born into, you're stuck into. It's a societal thing or something you can't control. Broke is things you do to yourself. And what was happening was I was basing my budgets on future revenues. I was paying bills in my mind with pending checks and listings instead of closings, right?

And you see that with real estate investors and businesses and all types of people. They get so optimistic that what one thing shifts or one thing changes, they lose it all. And by September of 2008, all my closings were gone. I went from 500,000 commission pending to zero. And by October, November, December, I was missing mortgage payments in order to keep paying my system. Wow. That's such a good point to make. And I think a lot of people get stuck in what they're experiencing right now and they assume that will always be that way. In 2005 and 06, we had the same thing. You had a lot of discount brokerages that would sell a house for $2,000 because houses were selling themselves and everyone was worried that was going to change the real estate game. And then when the recession came, they all went away. And right now, if you're paying attention to the overall economy, you're seeing that money is very cheap right now. It's everywhere. It is very easy to raise money. That's one of the reasons why multifamily is so frothy. Everybody's in there. And we all complain, oh, the cap rates are so low, but no one really asks why. Well, that's why. And you see a lot of

other businesses that have a ton of money coming in that their investors are giving, but they're not generating a profit. They're not making money. And I don't want to name any names, but a lot of them are trying to change the way that real estate is sold in like the country. And the same goes for investing. There's companies out there with a ton of money that are spending way too much money on properties because they have it. And it's easy to get discouraged as the everyday investor who's like, man, I can't find anything to cash flows. It doesn't mean it's always going to be that way. And I think, Ben, you're making a very good point that things change and you learned a valuable lesson, but you didn't let it discourage you. You just said, okay, how do I prepare for the next time that's going to happen?

How do I adjust my model? Can you share a little bit about those lessons you learned and how you adapted to become more successful when the market got theoretically worse? Yeah, you know, I sat down with my bank statements and my credit card statements. and I'd been tracking my net worth. And by January 2009, my net worth was negative half million dollars or whatever that number was. I remember walking by this guy on the street and he was asking for quarters. And I looked in this thing and he had like 68 cents in there. And I thought to myself, this dude is like 500,000 and 68 cents richer than me today.

And I just kept walking by thinking. But I'd sit down all of my bank statements, my credit card statements, and I'd take three highlighters, a red, a green and a yellow. And red is what I was going to get rid of right. away. And green is something that I had to keep to run my business. And yellow was something I wanted to investigate to get cheaper or replace or to see if we could go without. And I just, I started cutting everything. And I cut it down to as far as I could cut it. And then once you do that, you can't solve your business problems with cutting more expenses once you get down to that point. Then you got

to double your activities. And I just decided that we had grind our way out of it. And we got on the phones more and we did more door knocks and we did more activities and we dropped prices on our properties as fast as we could and we worked our way out of there. The interesting thing was by end of 2009, we had our most profitable and productive year and I had set aside the reserves and I made a commitment to myself that I'll never put myself in the situation that I was in 2008 and have that stress and that burden and that worry and put my people's lives in jeopardy. I'm going to keep reserves. And I just started building up cash reserves because the market can shift so quick, you wake up one day and your line of credits are gone and your credit cards are froze and you're

screwed. And with those reserves, a big evolution of my life happened. And that's when I woke up one day and the brokerage, the real estate brokerage I was working at had a round of money. And I had the cash and I made an offer to purchase that first business. And I offered to put money in there and to pay them off over a three-year period. And I made the payments due every August because that's when I had the most amount of real estate commissions. And they get their first payment in August and they get another payment the next August over three years. Well, we immediately turned that brokerage around, cut expenses, increased agent productivity, recruited new agents. And within a year, other brokerages were calling us. And I started buying real estate brokerages. Some in our brand that we exist in today

and some other ones, I'd fold them in. But ended up with six brokerages in Washington State, which last year they brought in about $3 million in owner profit, and we gave about $3 million additionally back to our agents and profit share. But those brokerages in our sales businesses became the foundation for capital for us to do these other investments as we grew up, so to speak. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively

in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BPPod. That's NRAIG.com slash BPOD. Wouldn't it be great if your house plants 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? Your home actually could be earning you money while you're not there.

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One, like you saw the opportunity. First of all, you prepare for the opportunity, which I think is smart. In today's market, I mean, the economy is really good right now. I mean, real estate's really, really good right now. people are making money, et cetera. And I think it's just a good reminder that it won't always be like this. It is today. You know, it's not always going to be like it is today.

And we will hit another eventually. I mean, maybe it won't be as bad as 2008. Maybe it will be as bad as 2008, right? So anyway, just a good reminder that like reserves are just vital, even when you're feeling really confident and successful. But secondly, you mentioned that you like you basically pay these people off over time. This applies to real estate investors and people in any businesses. You basically just capitalize in seller financing.

You said, hey, I'll put a little. bit down and I'll just pay you off over time. This is actually how I bought my first apartment complex the same way. I just paid them off over time. But what's really cool about is how you like control the terms of that deal. Like you knew that there's a certain time of the year you were going to be better off. You knew that seller finance would work and you knew that you could capitalize on it. So just I guess three just interesting points there just to point out that you, I guess, were able to take advantage of that. I mean, why would they, I'm curious, why would they sell to you? Why didn't they just turn it around? Why did why did you have success with turning those

brokerage is around when they couldn't. Well, they were in financial trouble and they had gotten to that position because the way they were running that business. And either they were trying to save themselves by selling real estate so they weren't focusing on that brokerage. A lot of them took on too much space and they were in bad lease deals, which caused me in some situations, I bought the assets and not the business because I had to renegotiate out the lease or I had to move the business if I couldn't. But they had no choice. One situation, they were going to close the business on Monday, and I found out on Friday, and I jumped on a plane and flew back here and stopped him from closing it, because at that point, we would have lost all the agents, which was really the asset in that business.

I paid terms for those businesses because back then, I didn't have the cash. And a lot of people would have used, I don't have the cash as an excuse to not invest or not have business. I just found a way to do it. And from that, it gave me cash to do some of these other future deals. Yeah. Yeah, so I think something to highlight out of what you're saying here, Ben, is that you did a few things that a real estate investor can do just as easily. A, you targeted distress. And I usually talk about there's three kinds of distress in real estate. You've got property distress, personal distress and market distress. So you are in a rough economic times. There's probably quite a bit of market distress. And then there was some actual like property distresses and the business itself was not being run right. And just like a good hunter, you're like a cheetah. You smell that blood and you knew right where to go. You got there, you made the kill, and then you probably handed it over to somebody else to figure out, okay, I need you guys to help me turn this thing around, right? But that's why you got a good deal. So for the people that are listening saying, well, yeah, it must be nice if you find a business like that. Well, Ben, new people in the industry.

He had his eyes and ears out there. He was out hunting for something. And when he saw that distress, he had an advantage. Then you were smart enough to do, like Brandon said, and get it with seller financing so that you didn't say, well, I don't have money. I can't buy a property. You said, well, I found a person who doesn't want to own a property. they're losing it to the bank, right? You said they were going out of business. They'll give you a scream and good deal if it's that or foreclosure, right? When you find those people that are in some form

of distress, you can get a deal. The key, though, is that you didn't wait until you saw opportunity to go learn your craft, right? For the people that are saying, well, there's no deal, so I don't want to learn how to analyze a property or manage a property or rehab a property. You're going to be behind the eight ball when the market does turn, and you've got the bends of the world and the brandons and the Davids who are studying this every day. And when that opportunity is everywhere, we're like a highly tuned cheetah that's going to go take after whatever we want and bring it down. And that's why we're always preaching. You got to be prepared because we don't know when the market's going to correct.

We just know at some point it will. And when it corrects and people are struggling with holding a job and saving money, there's a whole new set of problems that come out of it. It's going to turn around. I mean, I remember in California in 2013, it turned around so fast. I literally went from writing like 20% under asking price on every house to 20% over asking price. Wouldn't get the deal done. It was that fast.

Like one springtime and boom, it was gone. And that's why I had to learn long distance investing. So there's a lot of lessons that we can learn from what you're doing here and how it does well. What did you end up doing once you started buying these business? And like you said, you built the foundation of real estate sales. What was next for you? Well, first thing I did is I knew if I bought a real estate brokerage and if I failed at it, that I still knew how I still knew how to run a real estate sales business.

So I put my own Ben Kenney real estate teams in each one of those brokerage. And I did that because I knew if the brokerage had a bad month, we could at least close a couple transactions. And that's, I think, really how real estate expansion came into my world is I wanted to prove that I could do my business model from Bellingham in any other city. And I might as well do it in another business that I own. That meant that I got paid for sales in that location. Those sales agents paid a split to the brokerage.

I owned the brokerage. And over time, I started buying the buildings that those brokerages were in as well. and now we add additional services like mortgage and so on. So you end up getting paid for four or five times along that path. That's cool. So you actually started buying the buildings that your properties were like renting. Is that what you're saying? Yeah.

And I did it because I learned about something that I'm sure you guys talk about often, accelerated depreciation. Yeah. I had an income issue and I needed to solve my income issue because I didn't want to give all my income to taxes. And if you buy commercial real estate, you can do accelerated depreciation and and ride it off over seven or eight years. And that reduces my taxable income.

And it's much easier to do that in commercial and that it is in residential, even though it's available. So I started doing that. And I think people buy real estate for three reasons. One, appreciation. Two would be tax benefits. And three would be cash flow. And you buy different types of properties for each one of those three situations, right?

And I try to have a diversification of those types of things. All right. So what, I mean, what else have you done? I mean, I want to talk a little bit more of the commercial thing, too, but what else all have you done? I mean, in terms of investments, you bought some commercial properties. Do you own any single families? Do you own any multifamily, anything like that as well? Yeah, I own quite a few houses, vacant lots, commercial buildings, ranch in Texas, those sort of things.

And I try to buy a property every couple months or a couple times a year at least. And I have a full-time contractor that's always remodeling and improving. I don't believe in flipping properties. I'm in the mindset of building assets over time and real estate is the foundation of my wealth and I want to make sure that that's secure. So I do that to build assets and keep. So I'm a holder, not a flipper. And I'm always looking for deals nonstop, whether it's a business I'm buying or real estate or a hire.

I'm kind of a deal junkie. I'm always out there looking for the right one. And I turn down a hundred of them to do one, but I'm always looking. I love that. And I think it's interesting to hear the connections, like as you talk about certain things, things like buying businesses, how similar it is to buying houses. And then you mentioned people, like deals. It's almost like business is business no matter what the asset that you're buying is or that you're obtaining, right? Which is kind of fascinating. So how do you balance that

with like focus, right? I mean, if you're like, you bought a ranch, you buy some commercials, some houses. Like, how do you view focus in that? Is it because you've got all these properties already now that you can diversify like that? Or is it just you'll buy whatever comes across your plate. I tend to buy in areas that I want to be or areas that I'm at so locally as much as possible. And I buy those deals because I see something in the property that others don't see, like a duplex that I could turn into condos or a house that I could short-plat something off of or a property that I could get some extra lots or I could add square footage to it. I'm always looking for something that other people don't know about that property or even that business as well. I'm looking for

how do I walk into this situation with instant equity? Yeah, and that's, Brandon and I talk about in today's market, you don't find deals. You got to make deals. And that's kind of what you're describing in a higher end market. That's what you have to do. In a lower market, if you have the capital and you have the opportunity, you can find a deal pretty easy. But you're not really getting better or learning when you do that. You're just taking low-hanging fruit.

And if that's what you're dependent on, when the market turns around, you have nowhere to go. But I think that, Brandon, to your point, like, I see this all the time. When I watch these like TV shows, like the guys that come in and take a struggling bar or a restaurant and they turn it around, they're using the same principles as we are. Somebody owns an asset that they're not managing well for various different reasons. It could be a lot of stuff. It would be profitable if somebody else did something different. Maybe someone recognizes this bar is not doing well because they could be serving food as well. Or they could be charging more for alcohol if they change their ambiance or whatever.

And a more experienced person steps in, buys it, turns it around, makes it profitable. And then if they refinance it, which is kind of our Burr method that we talk about, they can go by another one. And that's all Ben's doing is he took an industry he understood, which was real estate, because he could sell houses because he was a cable guy and wasn't afraid of being told no. And he learned a little bit more and it gave him opportunity. And he took advantage of that. And he learned a little bit more and it gave him opportunity. And now, I mean, Ben, we didn't really talk about it, but you're either the top or one of the top agents in the entire country. You've got expansion teams everywhere.

you're buying companies like left and right. I mean, we've, we've kind of focused on your beginning, but you're basically like a, the second coming of Warren Buffett at this point with what, with what you're buying, right? But you started from a very small place and you just take advantage of opportunities that you had. And that is one of the things that's so inspiring about you is you didn't say, oh, I can't do it. Here's why. You said, how can I do it? And Brandon loves that too. And everybody listening could do the same thing, right? You started with a house hack and that opened doors. You started selling real estate and that opened. more doors and you just kept walking through them. About six years ago, we started investing in

technology because I believe that technology was going to be the thing that could disrupt my agents and their families and their way of life. And that's led down an interesting path for us. We've just acquired our eighth real estate technology company last week. And we have about 150 people that work in our software space. I think over time, I've had this real mind shift on wealth building. And I'll probably be known for buying. businesses, not real estate, because I never talk about my real estate investments or people just don't hear about it. But when Donald Trump was running for president a couple years ago, he was talking about not sharing his taxes or whatever. And Warren Buffett sent a tweet out or a

message out that said, here are my taxes. I'm willing to share mine. And one of my a ha's and looking at Warren Buffett's taxes was that I paid more taxes than him. And I was sitting back here thinking, And which one of us two dudes, which one of us two guys has more money? And, you know, I'm not a fraction of a percent what Warren Buffett's worth. But what he did is I call flip in the triangle. If you were to take a triangle and divide it into four chunks, the vast majority of the world's triangle looks like this. At the base of the triangle here is salary and hourly. And that's where they make the majority of their money.

They're exchanging time for dollars. and the reason they hit income caps in their life is because they only have so much time to exchange for dollars. As you move up the triangle, you have residual incomes. No, you have bonuses and you have profit from the businesses that you're in. And if you do good in your job, maybe you get a bonus or if you do good run in your business, maybe you have some profit left over. And that right there, maybe that's 90% of the world. And that's why they have such limits on their income.

As you go up to the third piece, you have residual incomes. That is money made from work done in the past, whereas the first two pieces of the triangle are money made for things you've done in the present. Well, residual for me is rents above and beyond my mortgage interest, if I do loans, dividends on stocks, profits from businesses that I invested in, but I don't necessarily run myself. And that's money that comes in every month, whether I show up or not. And then at the top of the triangle is assets. And that's what people have the very least of the stats that I think about around that is just the average American whose a renter has a net worth of $5,200. The average homeowner in the United States has a net worth of $238,000.

You see the big difference in those two? That net worth is really through real estate for most people. I wanted to flip the triangle. So I wanted to get to the point like Warren Buffett where the majority of the, of his wealth as an assets that are not realized unless he sells the stock, sells the business, sells the real estate or cashes out. So it can continue to compound and grow and grow and grow. But when you're flipping properties or when you're always taking that money out

and moving it to somewhere else, you end up with that having to be taxed on it and you give up 40% of your income. So I wanted to flip the triangle and I want my assets to grow and then my residual income to grow. And the things I don't really care about might be what I do with my actual time. Now that that led for me this idea of what's going to grow fastest. What would be the average cap rate in the U.S. for your guys's? I don't know. Thoughts? Like five and a half or so, I'd say right now in the commercial space. Yeah. And last year, the S&P 500, if you put money in

the S&P 500, it maybe went up 11% or 13% or whatever it was. That's that range, five or 10% that you can grow annually. But all the businesses that I bought, I've been able to grow them 40% 100% 100%, 150% year over year. And that's allowed me to have massive compounded growth. And with that excess income, I take that income and then I buy fixed assets like real estate to be the foundation in case it's the fan, right? And I need to survive. I put those that money into, I call it the five buckets, extra cash reserves, real

estate that I'm going to hold financial instruments like retirements, 401ks, but ways to defer taxes, and businesses that I invest in that other people run, and then I save the last bucket, which each bucket is 20% to give away each year to our community, specifically around homelessness and hunger. And I take all the excess of those wealth from all the businesses, and I put them into those buckets so that I can grow my assets, not just my income. Yeah, that's fantastic way looking at it. I think everyone needs to just hit that rewind button on their podcast player and go back and listen to the last two minutes again because the five bucket thing, the flip

triangle, all that, just fantastic. So I want to explore this a little bit more, this idea of buying businesses. Because again, here on the show, we typically focus on real estate because, but there is a benefit to just crushing it in business. This is actually one thing I love about real estate. It's like you can crush it in business somehow, whether you, hopefully you own the business, right? you can make a ton of money and then dump that into real estate into a fixed asset.

Why do you do that? And do you also, I guess, why do you do real estate, not just the S&P 500? Why does just throw everything in the stocks or whatever? Do you diversify? Do you focus mostly on real estate? Like, what's that look like? I think our business, whether David, I was talking to David about his real estate business, I think his business should be like a chair.

And the more lakes is the chair, the more stable the chair is. And if you got all of his business from referrals, if that went away, way his business would fall apart if you got it all from cold calling so it's about having a lot of legs to your chair whether you think about our parents that had all their money in their company's company stock plan or the the person that put all their money into real estate or it was all into their 401k or all into their business one little thing could completely disrupt their retirement their livelihood or their family and i don't want that to happen i'm not going to be in a situation i'm okay being poor i'm not okay being broke where it's my fault so i try to

try to evenly divide that out. And I've adopted that for over 10 years now. And in the beginning, it was $50 a month that went into each one of those buckets. And then it was $200 a month that would into each one of those buckets. And over time, it's grown, which means 10 years ago it took me a year or two to save up enough for a down payment on a next property. And then now it can happen every month or every couple months if we choose to do so. But it's about having that discipline of putting money into those buckets to take care of you

and your family. you can't just be this individual that's chasing money because money runs too fast and you'll never actually catch it you'll wake up having an unsatisfied unhappy life you need to make sure that you're doing things to build wealth not just build the number of doors or the number of real estate transactions or whatever those things are because that's a really unfulfilling life to live you'll wake up unsatisfied all the time well on one hand having several legs on your stool does make it a more safe stool where it's it's like a defensive metric you're going to lose more difficulty that's a horrible way to say that but it's harder to lose on the other hand

having all these different things working together actually creates a synergy to where you're more successful with venture f because you have venture g as well and i think that that's something that a lot of people getting started don't understand that that's kind of when we talk about the rich getting richer this is why you actually took a real estate sales business and leverage that into buying brokerages which leverage that into bringing deals your way. Then you had this capital that you could then use to invest in technology companies, which made it easier to sell more houses, right? And the whole ecosystem that you're building helps all the other little pieces. So A, you're safer and B, it's easier to grow bigger.

And that's really how smart business people think. Now, the problem is once you've built that ecosystem, you can't be in everywhere at one time. You've got expansion offices here. You've got investment properties here. You've got companies that you're buying that you really probably don't even understand what they're doing. You don't need to. You're the investor. Can you help us understand a little bit about your leadership qualities, what you had to learn, what you had to develop, and how you run all these different businesses as just one person? Yeah. So, you know, my coach, Gary Keller has always been clear with me is that I can do anything I want as long as I start with a person. So he says first who, then what, right? So if I want to buy a business, the first question I'm going to ask myself, well, who do I have that could run it?

And if I don't have that person, that'll be the very first thing I go and do because I do not. need another job. Well, over time, you start learning about leadership. And the easy thing to say is I'm not good at managing people or I'm not a very good leader. But I found that nobody's an amazing leader of marginal people. And you end up getting the wrong people on your bus. You look like a crappy leader and you feel like you're unsuccessful. But if you get the, and I'm not saying they're bad people, but if you get the right people for you, you can do anything. And you walk in and everybody thinks you're a genius leader. Truth is, we're just actually pretty good at hiring.

And we're good at hiring because we take the time to look at enough candidates. When you have one candidate that you're taken through the hiring process, you spend the entire time trying to prove that that's the best candidate to yourself. When you have three candidates, any of which you would say, I would hire any one of these right now in my heart, right? You spend the entire process figuring out which candidates the best candidate, right? As they say, the enemy of grade is good or however they say that, right? you can't settle. You've got to make sure that you're investing in somebody that you can balance,

I like to say, love and results, meaning that you could see yourself having that person at your kitchen table for Thanksgiving. You love them and you care about them, which means they've got to have integrity, you've got to like them, you've got to like being around them, and they've got to get good results. Anytime there's a balance, it's out of balance between love and results, meaning you care a lot about them but they aren't succeeding in the role or they succeed a lot in the role, but they're kind of but holes, you end up creating resentment and it doesn't work. So I look for this balance between love and results and all my hires and then I just let them go do it. And I get back involved if they need me, but I tend to step away and just let them succeed. So here's my struggle with a lot. Because I'm

hiring right now for both internally at bigger pockets. We're hiring for a number of like team of people that are going to work with me on the marketing team. But then also I'm looking in my own real estate business looking to hire as well and try to expand the real estate investment side of things. And both those like I get people that apply right. And like you look at their resume. and everyone looks good on a resume. I mean, everybody looks good on a resume. And I really, I talk to them, and I get the same thing you just said,

I could hire any of these people. Like, at a surface level, even just talking people the first time, everyone looks generally, everyone looks pretty good. And I'm struggling with that right now. I got five people I've talked to that all could probably do the job well.

How do I narrow down then, like to really know that that's the one out of the five? Like you say, you look at enough people, but that's what I struggle with right now a lot. Here's what I do is I'd make a list of the 10 or 20, that you want that person to do in their role.

Then I'd organize them one through 10 or one through 20. And then I would go and I'd just cross out everything that's below four. You are hiring for the top four, not for the bottom 20. You need to find somebody that hits it out of the park on those top four things, your biggest priorities. And don't worry about the rest of the stuff. The rest of the stuff anybody could do, you could just not get done. It could get to a virtual assistant or they'll figure it out.

Always hire to the most important priority. And then compare each person to each other to say, hey, I got three great candidates. How do they stack up? And we go through this multi-process hiring, where we have a screening interview, a face-to-face interview. We go through what's called a life story where I go back as far as time and I ask them what they've done and what they've made and what they're most proud of and how did they succeed. And I understand their whole history. And then we go through this process of understanding their goals. What do they want to accomplish in the next year, three years, five years, to make sure that they can be on that trajectory.

or that they're thinking big enough or that they'd be a good match with us. And then we go through a little bit of behavioral testing to make sure they're the right behavioral match for the job by giving them a Myers-Briggs or whatever that might be. And you combine all those things into a collection of about eight hours. And when you're done with that and you've done that through a couple of solid people, you're going to feel real confident about one or two of those people. But when you rush it or do a couple interviews and then you high five, you're just kind of playing craps and you're going to get what you get, wherever the dice land.

I read the other day that 50% of all hires end up being a mistake. Like that manager said that 50% of on average of the people they hire were the wrong, which means that it is just a gamble. It's just a 50-50. They might be good. They might be bad. And that's how most people in the world hire is just. Sounds like marriages and marriages are dating to me.

It does, right? We put a little bit more time and energy into choosing who we spend our time with. I always say that we have three relationships in our life and they're extremely important. who we work with, right, who we love and marry in our mattress. And we should spend time and energy choosing all three of those things. Maybe that's why Drake says, I only love my bed and my mother. That's important. Yeah.

As far as people who are wanting the opportunity, Ben, can you share a little bit about because you're hiring people all the time, right? So this is an interesting dynamic is that Brandon, I and Ben, our frustrations are we can't find people that can do the job the right way. Well, there's a lot of people out there that are like, oh, I really want this opportunity. Tell me what I need. And I'm trying to figure out how you marry those two worlds. Do you have any advice for the people who want the opportunity but aren't sure what to do in themselves to be good at the role? And then the second part that I wanted to talk to you about was we interviewed Robert Green and he had mentioned how one of the things that he believes is people don't change. Like who they've been is who they're going to be, right? So how much do you factor that into your decision? making process when you look at somebody's track record. Sure. I think highly successful people succeed at something in their life. So what is that track record or success?

It could be that they're number one in band camp. It could be that they're number one in athletics. And I ask that question when I interview them, what have you been number one at in your life? And that's important to me, right? And then I understand that a leader has three fiduciary duties. Number one, to clearly set the standards and expectations. clearly set the standards and expectations for how that person succeeds in their 20%, not the bottom 16 things in those four things.

Number two, to inspect what we expect, to provide a layer of accountability where we, and when we first get into business with somebody, we meet with them and look at what they're doing on an hourly or daily basis. And over time, they earn the weekly touch, and over time they earn the monthly, and over time, you really just get together to give them high fives. The number three thing that's our fiduciary duty as a leader is to make sure we provide the coaching, training, and mentoring that they need to be successful. And whether that's we hired somebody to do it or we do it ourselves, if you are not doing those three things, that person's failure in your business is your fault. It's not their fault.

So I always ask myself before I let somebody go, did we do our fiduciary duty? I take ruining somebody's lives and putting their family in jeopardy very seriously. So if it doesn't work, I sit back and say, do we set the standards? Do we inspect what we expect? Did we train them? If not, we start from scratch on day one and we take them through a 30, 60, 90 process to get them back on track. So before we think that people can't change, I always sit back and say, well, where's my DNA on that situation? What could I have done to make sure that that person was successful?

Or in the place that they were before, were they given a fair chance? because I found people that were very unsuccessful in their previous role, but when they worked with us, they florist. Yeah. That attitude is like what attracts me to like Jocco Willings, like book, what's one, David, you love, extreme ownership, right? Just like, when somebody's bad, like, the first question to ask is, what have I done wrong or like, how could I fix this?

Or how am I causing this? Because a good portion of the time, but it is probably that. Like, I know when I've had bad employees in the past, I have not set standards. I've not inspected what that I expect. and I'm not trained them very well. Like I've done all three of those things poorly. And so it's no wonder they didn't work out.

And then I feel really bad because now I'm looking back. I'm like, man, that was totally my bad. That was totally my fault. So anyway, just really, really good reminder. What were you guys going to say? You know, when we, the first kind of question about how people, how people go and find opportunities is I think it's their responsibility to chase what they want in life. And it takes a lot of effort.

I'll give you an example of the reverse of that is I end up in a situation where I was missing an important person in my company, and it was going to be the technical demise of our world. And the previous month in that particular company had lost $430,000. So it was for the month. And I knew that there was a problem. I started off on Monday with a commitment that I was going to find the replacement, and I sent over a thousand LinkedIn messages. I made hundreds and hundreds of calls and hundreds of texts, and I finally found a person that was located in another country that was the right match, and I flew him and his wife over, and we got them

hired in our firm. But it took six days of me only doing that one thing to solve my biggest problem. And a lot of times why people don't solve their biggest problems, why they don't find real estate deals, why they don't lose weight or whatever that is, is they give 1% effort every day. over a long period of time and it never amounts to anything. If you have a big problem in your life, go fix that problem. Just go jump on it and you only do that until you get it out of the way. And then you work on your second problem. So I put that back on the person. If you want to change your life, make that the only thing you focus on. That's so good. You know, I gave a speech last week

at a conference and I talked about this analogy of like building like a tower. Let's say you had to build a tower at a little blocks, you know, little toy jingle blocks. And like success was at like three feet high, right? Or in this case, solving your problem is like three feet high. And so you start working on one little tower and then you go start working on another tower and then another tower and you're adding one block to each tower and pretty soon you got 30 towers, but none of them ever get higher than six inches. Where if you just focused all your effort on building that one tower, like I just got to fix this is the most important tower. And that works for both problems that you're talking about problems and for, you know, solutions, right? Like this is the, this is the most

important thing in my life that I can just get this level. I'll be all right. But instead people are like, I want to be a real estate agent. And then two weeks later, they're like, I really want to sell Tupperware on a MLM. And then two weeks later, they want to flip houses because they listen to a podcast on that. And they're building 50 towers at one time and never get there.

So before we move on to the deep dive, do you have any advice on how people can know? What is that, like, what is that thing that helps them identify? What is the most important problem to focus on? Or what is the most important thing they can do? I mean, when there's a million things that a person can do, how do you focus?

You know, I would hate for somebody to hear this, hear this call and hear that my message is do a bunch of things and get a bunch of businesses and that sort of thing because that's not really how I believe. I believe in building a business to its maximum potential and replacing yourself with a great and amazing hire that's proven and then taking that excess time to do something. And this is a 15 year journey for me. I had three sales teams up until four years ago. Now we're at 22. It's because I put 11 years into building the foundation and building the systems and building the models and proving that it was profitable before I did that. So be careful we don't do too many things at once. You do one thing,

you get it going. It's profitable. And then you add it at another thing. So I would hate for that message to get mixed up. But back to your question, Brandon, what we do should provide a clear path to our business, financial, relationship, health, personal and spiritual goals. And I've had mine written down for many years and I look at them often and I ask myself the question is what I'm doing now is what I'm doing now setting myself up on a path to accomplish those goals and I found a lot of time that people make those choices because they aren't clear on where they're actually going so I made I'll just share my my goals with you guys because it's on my phone at all times Number one, I want to be leveraged.

I want to hire somebody for all the things that I do not enjoy, which means I had to make a list of what are the things I enjoy. I enjoy negotiating deals, recruiting talent, creating things and making them a reality and coaching, training, and mentoring. So I built my life around doing those things and everything else I hire somebody for. Number two, security. I want to have a certain amount saved in the bank in case of the zombie apocalypse or economic, whatever the thing might be. Number three, I want a net worth of a certain amount of money, and it's a big number. Four, I'd like to be married, but only once. Five, I'd like legacy.

I want to create things that I'll be remembered for. Six, I want to help 10 people become millionaires. And seven is I want to donate a minimum of one million a year back to our communities that we operate in. And I ask myself the question, when somebody says, hey, should you go do this opportunity? Should I do this? I just open on my goal sheet and say, is that something I'd enjoy? Is it going to affect my savings? Is it going to increase my net worth?

Is it going to affect my ability to have a healthy relationship? Is it going to be something I'm going to be remembered for? Or is it a pot shop or a bar? That might make money, but it's not what I want to be remembered for, so I'm not going to do that. Is it going to help somebody become millionaire? And do I love them enough to want to do that? And is it going to affect my ability to give? And if it doesn't hit one of those things, I bail on it.

So it's important that they have clarity what they're actually trying to accomplish. And with that, it should help them to make better decisions. That is so good. Fantastic. Yeah, I don't have anything to add to that. So I'm just going to shift us and turn us over to the next part of our show, which we call our deep dive. 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.

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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 memory somewhere else. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. 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. It works.

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 your 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 rookies. 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. This is the bigger pockets deep dive. It's the part of the show where we dive deep into one particular deal that our guest is working on.

So I hear from Kevin, our producer, that you've got a little bit different style of a deal today for today's deal deep dive. Can you tell us what are we going to be talking about today before we jump into the questions? Well, what I think is interesting about deals is that deals are all about terms. And terms for real estate or terms for businesses are about the same. And so I'm just going to talk about a business or two that we've purchased in the past and how we went around structuring that deal. Because when we went into those deals, maybe we didn't have the capital to even do it. But then we figured out a path into making that happen.

happen. That makes sense. It does. It does. It does. Yes. So this specific deal, what kind of deal was it? So this was an opportunity for us to buy a software company. And when I met with the individual, I said, well, are you willing to sell this company? And he said, no, I don't think I would. And I said, well, why wouldn't you? And he said, I haven't been able to get the amount of money that I want. And he gave me an amount of money, let's say it was a million dollars. And I said, okay, can I ask you another question? And he said, yeah. And I said, well, what is it about that million dollars that's important to you? And he said, it's that I think I need that much money to replace the income that I get from this business to take care of me and my family until I die or pass away. And I said,

I don't want to be morbid or nothing, but how long do you think that is? How much money, how many years do you need? And he was quite an older gentleman. And he said, I need at least 10 more years of income. And I said, so it's not the million dollars at all that matters to you. It's a certain amount of net income per year. And I said, well, what are you been making currently? And he gave me a number. It wasn't a large amount of money. Let's say it was $50,000. And I said, how about instead of a million dollars, what if I just gave you $50,000 a year paid in monthly payments over the next 10 or 12 years. And would you go home tonight and talk to your wife about that?

What if I guarantee, I'll personally guarantee it, right? You'll get that income. You don't have to work anymore. You don't have to show up. You get to enjoy these 10 years of your life and you get to retire. And he came back and he said, you know, you know what? That would work. For me, I looked at the business and said, the business was already making that much in net income.

If I added what I do, we would easily replace that. and I just made that a line item on the budget was paying the previous guy out. So we bought that business for zero down, paid him over a 10-year period, and it was what I consider a win-win. That individual got what they needed out of the situation, and it wasn't the price. Now, he could go and tell anybody he wanted that he got a big price for the business, and that's fine, and that's a win, and if that makes him feel good, that's great. But what he really did is he took care of him and his wife.

And I think a lot of times we negotiate numbers, but it's not. It's what's the story? What are they really trying to accomplish with that? And then you go back and you solve that problem for them. And I've done that in five or six, if not ten different situations where I've been able to put deals together that otherwise could have been undoable. Yeah, I love that. And that applies again to any deal that you're working through, whether it's a business, whether it's a specific real estate deal, there's usually something that people say that they want, right? And it's very different from what they actually want. They just don't know how to express necessarily. By asking those questions, you can get there.

So do you mind if I dive in a little bit deeper on, let's say this particular deal. And if, like, for confidentiality reasons, if you can't say what the company is, that's fine. But I'm wondering, like, how did you even come across the opportunity? Like, how did you find this? So I'm always looking for opportunities. And I tend to do that a lot. I called eight to eight to eight, eight to eight. So from 8 a.m. to 8 p.m., I have to do things that make money now. That's, that's either taking time for family and loved ones and working out and eating or working in my job that makes money. But from 8 p.m. to 8 a.m., that's my time. And during my time, I can do whatever creative I want. So at night, you'll see me often, Googling companies, looking up websites,

researching people. And I send hundreds and hundreds of LinkedIn messages to businesses and emails, reaching out trying to find deals. And the vast majority of deals I've gotten, I bought a company from Zillow called Active Rain because I sent the CEO a direct message on Twitter. Wow. You know, I bought another company from LinkedIn time and time again because I reached out to them. That's cool. Yeah, that might be the first time I've even heard someone say they use LinkedIn, like, effectively.

I know. As opposed to, you know, how most people do. So that's awesome. It's a different approach, though. it's usually, it's not that I want to buy your company, it's that I want to get to know you. And I'll fly them out or I'll fly there. And I'll spend a day letting them talk to me, tell me how great they are, explain their world, show me their business. And I don't talk about me at all.

And I just get to know them. And I ask them what's important about them. And by the end of a day or two, I'll understand what it is in their life that's causing them pain or what is in their life that would give them pleasure. And I'm looking for that button. and I will spend as much time as I need trying to figure out what is the button that would make a difference in this deal. When everybody else jumps in there, and one particular deal we did, there was an offer on the business for $3 million from a private equity group, and we bought that business for just over a million. They accepted a $2 million a year less, or $2 million dollars less purchase price because I figured out what was important. And for that individual, it was that he wanted to keep working.

He wanted his employees to be taken care of. And he wanted it to stay in the location where they operated in. So I made a commitment that I would stay there. I would keep them employed. I would increase their salaries. I would provide them benefits. And I got the other competing company to write me a letter that said that their intentions was to consolidate all the businesses and moving to the East Coast.

and I brought that letter back to the meeting. So you may get more money today, but you're going to have to face these people in the grocery store every time you see them and let them know that you sold their jobs out. Or you can do a deal with me and we'll find a way to make it an equivalent win. And you'll find that people, money is not the only factor in a deal. That's so true. All right.

So on this particular one that you gave the example of earlier, you know, we talked about buying it basically no money down, right? What did you actually do with that property then? Did you put somebody else in charge? Did you find them in town? Or did you just raise somebody up from within the company? And then what was the outcome to that? Like what's the company like today?

Yeah, because the gentleman was phasing out, we paid him for a short period of time to stay in. And then we hired a replacement in that business. And that business today is, it's worth quite a bit of money because the revenue, I think when we did that deal, their revenue was at like a million to a year. And I think in the first 30 days of using our sales and marketing engine, we brought in more annual revenue of that next 30 days than we had done than they had done their whole previous year. That's because businesses traditionally have either, either they're great at sales and marketing and they have a crappy product or they have a really great product and they can't sell

a marketing. And we bring an approach where we find great products and we put a massive sales and marketing engine on it because we're used to pick up the phone and cold calling and doing marketing and we can grow that business. Most businesses don't fail because they have a bad product. They fail because they can't hire or they can't sell it. Yeah, that's really good. All right.

What lessons did you learn from this deal in particular, Ben? I think from this deal and a whole bunch of other deals like it, we learn how hard it is to integrate technologies into each other or to integrate leadership teams into each other. And it took time and it takes a while. You always think it's going to be faster than it is. And it caused a lot of chaos. In fact, that month that I said that we lost,

that $430,000 was because of problems that were created through that integration. And we fixed it. And I was just messaging with those leaders the other day. And he said, hey, there's been times in the last two years that I've really wanted to quit. And I want you to know that I still think this is one of the better decisions I've ever made in my life. And I want to thank you. And it wasn't always like that. I mean, there were times that we wanted to strangle each other.

but that commitment to each other and our commitment to work through it, you know, we're able to survive it. There we go. All right. That's really good. I think one of the things you mentioned that I just want to comment on before is that your approach wasn't, let me chase someone down, throw money at them, see if they say yes or no and move on.

And that strategy will work a lot of things in life. You know, like if you meet someone you don't know and say, hey, do you want to get married and they say no and you move on to the next thing, you're much less likely to be affected. than if you slow down, you take the time to get to know him. Brandon always talks about how dating is a funnel. He thinks everything is a funnel. And in a way, it kind of is, right? And Brandon's wife, Heather is always jumping again and saying,

Brandon, you're an idiot. It's not that simple, right? Because Heather understands, like, yeah, you have to talk to a lot of people, but you have to be doing it the purpose. You need to be getting to know that person, improving yourself before you jump right to where you're trying to get. And if more people would build skills in that area, as opposed to just, I'm going to just focus on how many LinkedIn messages I can send.

I think they'd be more successful. Relationships matter. That's the message right there, isn't it? There you go. Yes, absolutely. All right, well, that was the deal deep dive. Now we're going to head over to the next segment of the show, the fire round. It's time for the fire round.

All right, it's time for the fire round. Of course, these questions come direct out of the Bigger Pockets forums, which everyone can go visit at biggerpockets.com slash forums. All right, Ben, we're going to throw these at you rapid fire style. So big question. Q and A nice and fast. Number one, Corbyn from Louisville, Kentucky said, I just got done reading Set for Life,

which is a book by Scott Trench, CEO of Bigger Pockets, and I've decided I'm going to house hack. I'm going to buy a duplex or triplex or fourplex, live in one unit, rent the other one's out. Where should I start shopping? Like, what approach should I even take to begin looking for that small multifamily?

I believe most deals that are good, everybody knows about and they're gone. Like, if they're on the market, I mean. So do what I did. Go after off-market properties. look for one specifically that have out-of-area tax mailing addresses because they don't have a good grass of what's going on the market or they inherited the property or whatever.

Find a property that nobody else knows about. And it'll take you to doorknock and cold call, but you're going to end up with a way better deal. Yeah. Awesome. Next question. I'm a newly licensed real estate agent and an aspiring investor. Over and over again,

I've heard investors in the Bigger Pockets community complain about the lack of investor-friendly real estate agents. This seems to be an opportunity. What advice would you give me for how I can carve out a niche business serving other investors? What are investors looking for in a real estate agent? Investors are looking for good deals. And if it's a good deal, first, you should just buy it yourself.

And the reason you don't buy it yourself because you don't have the income and the cash set aside, so go fix that problem. Investors that want a long-term relationship, right, they're going to invest as much into you as you do into them. You don't want somebody this is just going to use you and make you write low offers all day. So be careful as a real estate agent that you don't go chase a one-way relationship

where they're using you and you don't have that long-term win. Yeah, that's great. Number three, I've got a commission-based jobs. My income's really unpredictable. It's going to be hard for me to get a loan to invest in real estate. Any advice for somebody without a steady paycheck

like every real estate agent out there? The highest paid individuals in the world, in my opinion that have jobs are on commission. And your commission can be variable if your activities are. So if you want to have a more consistent income, double or triple your activities. And if you're in a commission job where you're waiting on people to walk into your furniture store or car dealership, switch careers so that you can get to that job that has that unlimited income. Oh my gosh, that's so good. Like I never really thought about it in those terms before, but like so many people talk about their paychecks are, you know, up and down.

right it's not a very steady paycheck well that's because like they're thinking usually it's like zero dollars one month five thousand the next month you know zero the next month like a lot of people have that problem so triple your efforts find ways to work harder work smarter and then maybe the variable is i make 21 month 25 the next month 20 the next month and now like who cares variables is fine no bank's going to have a problem with that but and also the point about you know if you're waiting for business come in find something that you can go out there and hunt for it rather than sitting at home in your cave hoping a bear wanders into the cave that you can hit it with a stick.

Right. Yeah. That's right. All right. Maybe not a bear. Maybe something easier to kill like a rabbit or something. Remember that every good thing in your life required you to quit something. Don't be afraid of quitting in order to get to where you want to go.

Be afraid of staying where you're at for the rest of your life. That's good advice. I'm out of here, guys. That's a Twitter quote right there. Let's move on. That was the last of the, we'll wrap up the fire round there. But I want to head over to the last segment of our show, which we lovingly referred to as our

Famous for. All right, with that, let's get to the world famous, famous four. The same four questions we ask every guest every week. Ben, number one, do you have a favorite real estate related book? Probably the first 150 pages of the millionaire real estate investor.

And I hate to beat up Jay and Gary, but the first 150 pages are the best. Or tax-free wealth is a big winner for me this year. All right. Awesome. Okay, what about your favorite business book? Ooh, I read a

I read a massive amount of books. I'd hate to give Gary and Jay too much credit, but the one thing has definitely been an instrumental book in my life, of focusing on what is the very first priority, and what is the one thing that if I focused on today would make everything else in my life easier or unnecessary, that book in itself changed my life. I say the thing.

We've actually had Jay on the podcast before. So he did a really good job. We'll get that number for you guys and put in the show notes if you want to listen to Jay's podcast. But he's a very smart business mind, and he writes very good books. How about some hobbies, Ben? What are your hobbies?

They're not popular in today's world, but I love to fly fish and hunt and hike and be outdoors and hang out with my golden retriever. And I love to read books and buy businesses. That's awesome. Pretty cool hobbies. Number four, Ben, what do you think sets apart successful real estate investors from those who give up, fail, or never get started? I think they complicate things.

They come up with reasons to justify their results. and they don't take action, they don't just start with one thing. If you want to be a millionaire in real estate and you don't know where to start, buy a house. And then in two years, buy another one. And then in two years, buy another one. If you did that 10 times and you held them for 30 years, at the average price in America, you'd have a net worth of almost $8 million in 30 years. You just wanted to be an $8 million a year person.

All you'd have to do would be to buy a house, rent it out, and then buy another one. And you'd do that because the down payment's low, the interest rate is fixed. and you can get approved for financing. Just do it 10 times. That's really good. I've heard it said it. The easiest way to be a millionaire is to take out a million dollars in real estate debt and let your tenants pay it off for you.

That's how I do the whole college hacking thing, right, for Rosie. Buy a property, put it on an 18-year mortgage, let the tenants pay it off, and now it pays for her entire college. It'll be worth 400 grand by then. That's amazing. Yeah, it just pays for your kids' college. Anyway, all right, cool. Well, David, last question.

All right. Last question of the day. Ben, for people that are fascinated by your incredible story and want to follow you on your journey to being the second coming of Warren Buffett, where can people find out more about you? They can reach out to me online. They can email me, Ben at Benkini.com or Facebook or Twitter. Or if they ever want to come to one of our events, we do do events at Ben Kinney Training.com. Our next event is WinMake Give, and it's in April, and it's about health, wealth, leadership, and legacy. And one of the things that people may not know is we give 100% of the proceeds

of all my training events to charity. And this year, we're putting that money towards providing housing solutions for fathers who are in some form of homelessness and they have children. Right now across the United States, there's nearly 3,000 organizations funded by the government for women with children. And the last time we checked, there was only one for fathers. And we want to break that cycle of homelessness. And so if you come to any of our events, I don't do it for money.

That's why we do it. So hopefully they'll show up someday. That's fantastic. really, really good stuff. Well, thank you, Ben. This has been eye-opening, just really, really good stuff today. So thank you, and yeah,

I look forward to seeing you around. All right. Good to see you guys. Thanks for the time. Thank you. Thanks, Ben. All right, and that was the interview with Ben Kinney Business Extraordinaire.

Would you say the second coming of Warren Buffett? Yes. I don't know if anyone's ever told him that, but I thought of it when he was talking because they think the same way. I, man, I mean, honestly, this is one that you're going to need to listen to a couple times because I can guarantee that with this much coming at you that fast, you'll miss some stuff while you were processing something earlier.

Just his facts alone on how he, the filter he runs thing through, the seven goals that he has and he asks himself when an opportunity comes, would this help meet my goals? Like, that's worth thousands of dollars, just that one little piece of information. And this was full of things just like that. Yeah, yeah, really, really good. So awesome, awesome episode. I'm totally pumped up. I actually wanted just like, even before this episode comes out because this doesn't come out for a few weeks. I'm going to go and just like take my MP3.

I just recorded just to go listen to the whole thing again because I'm like for like super jazz. So anyway, all right, everyone. Thank you so much for listening to our show. Again, you can find this show at biggerpockets.com. So I show 32. Again, biggerpockets.com slash show 32. Follow us over on Instagram at Bigger Pockets is the Bigger Pockets.

Instagram. Mine is at Beardy Brandon with a Y beardy Brandon and Davids is at David Green 24. You want to take us out, buddy? Yes. Everybody who's listening at us on Instagram. and Facebook, Twitter, post what your goals are. I want to issue a challenge for if you've got goals, post what they are, tag Brandon and I. We're going to be, he and I are going to put our heads together and come up with like how we help each other meeting our goals and we'll probably share those with you guys in the future.

I think that's a great exercise. And with that being said, this is David Green for Brandon. Everything's a funnel. Turner, signing off. That's a pretty good one. You're listening to Bigger Pockets Radio. So simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the height,

you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. 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.

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