BiggerPockets Real Estate Podcast - 381: 5 Rules for Investing in a Down Market with Tucker Merrihew

Episode Date: May 7, 2020

Can you flip, wholesale, and buy rentals throughout a downturn? Yes... IF you heed the advice given out in today's episode. Our guest Tucker Merrihew is more than qualified to tackle this subject, having launched his real estate business in Portland, Oregon, in 2008—during one of the worst housing markets of all time. In a rare "Double Deep Dive" segment, Tucker walks us through a couple TTM Development projects from 2009 and reveals exactly what he did right and wrong at the time. As for the coming months... you'll learn which types of properties to avoid, which price ranges to target, and why renovating old homes can be risky business at this stage of the market cycle. Plus, Tucker explains why he underwrites every deal at 3 different prices to make sure it passes his "Oh $#!# Test" if the market goes south. Tucker is a seasoned pro with hundreds of deals under his belt, and he shares tons of valuable information for free in this episode. Be sure to subscribe to the BiggerPockets Real Estate Podcast for more tips on investing safely while taking advantage of the opportunities ahead. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 381. This big mantra out there that the key to this business is marketing, marketing to get leads in, leads equal deals. And so everybody's put their emphasis or their desire to learn about this business on marketing. And that's great. And that's a necessary skill for sure. But another necessary skill is to understand the product itself. And I think a lot of investors, they don't understand the product itself. You're listening to Bigger Pockets Radio.

simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Hey, what's going on, everyone? It's Brandon Turner, host of the Bigger Pockets Real Estate podcast

here with my co-host, the man, David Green. What's up, buddy? It's a great day. the sun is out. I ran like five miles yesterday, which I haven't done in a long time. I had to split it up over two different runs. Chasing you? Someone chasing. That I'm very, very nice.

And right before we recorded this show, we helped put a house hack client under contract right at asking price. So you have to go over. So it's a good day, like ice cube would say. Wow, very nice. Ice cube reference. Wow. You are having a good day.

Well, let's make everyone else's day good because today's show is going to make your day even better because here's a deal. Today we're sitting down with one of the, like, one of the smartest investors I've ever had the pleasure of meeting. His name's Tucker Merrhew, who's on our show a long time ago. Let me see if I can find the number. Episode 22. Wow, you're good. Episode 22.

So like almost seven years ago, I think about seven years ago, he was on our show. And you'll hear a little bit more about him and his story, but he's been through the last recession. They invested on their way down last time and then the way back up again. And so today he shares with us five rules for investing in a down market. specifically he's done he I mean he's done new construction he's done flipping he's on wholesaling and he's done he's done all sorts of stuff and they've got a machine down in the Portland, Oregon area. But he talks about what those five rules are and how you can get through the coming economic

difficulties if no matter how bad it gets based on these rules. They're very, very smart. He's got a lot of good stuff to say today. So with that, before we get to the interview, let's hear today's quick tip. Hi, David Green. What is our quick tip for today? Today's quick tip is don't assume that because everybody else is not doing something, that you shouldn't not be doing something.

Really, what you're looking for is barriers to entries in times that other people are not taking action. That's a huge, huge thing. So right now there's a lot of people say, you know, I really don't know about real estate. I just want to wait and see. That's when you need to sprint. That's when you have to go harder. You can catch opportunities that you normally wouldn't get. So fight the herd mentality.

Don't think because everyone else is doing it, you should do it too. You're really looking for the opposite mentality to be successful. That's a good quick tip for today. Very nice, man. Way to do it last minute because I didn't tell you that was coming. But I knew it was coming because I knew you didn't have anything. So I'm finally catching up to you, B. All right.

Here's why savvy real estate investors are obsessed with bonus depreciation. It lets you take that rental property or commercial building you own and depreciate most of the cost against your income. Legally, 100% IRS compliant. That's instant cash flow improvement. Cost Segregation Guys is the number one firm nationwide, specializing in identifying these faster depreciating assets in your property. They've completed tens of thousands of studies across all 50 states from remote cabins to apartment complexes. So if you own investment property, this is a no-brainer.

So visit costsegregationguise.com slash BP for your free proposal and find out how much you could save this tax season. Do you ever notice how every passive investment somehow turns into a very accurate, active lifestyle, active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes, 10% below market value, and the best markets across the country without making real estate your second job? That's exactly what rent to retirement does. They're a full service, turnkey investment company handling everything for you.

In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. You've upgraded how to buy properties, but did your insurance get the memo? When investors start scaling, insurance can't be an afterthought. Most policies were designed for a single property, not multiple rentals, LLC ownership, short-term stays, or properties mid-rehab.

That's where blind spots can creep in. NREG works exclusively with real estate investors. They understand portfolios, how risk compounds as you grow. and why insurance should protect your upside, not just a checkbox. One uncovered claim can undo years of progress. Before your next acquisition, review your insurance. Talk to NREG and get investor-specific coverage from specialists who actually understand real estate at NRE.com slash BPPod.

That's N-R-E-I-G.com slash B-P pod. I think we are ready to jump into this show with Tucker. Anything you want to add before we get into it? DG? No, this is just such a good episode. And it's not just typical, oh, in a recession, you should pay less. That type of dice is not what you're going to get here. This is good, practical, sensible stuff. Yeah, yeah, that's awesome, man.

All right. Well, with that, let's get to today's show with Tucker Merhue. All right, Tucker, welcome back to the Bigger Pockets podcast, man. How you've been doing? Well, it's been, what, seven years almost? So over the past seven years, I've been doing awesome. I appreciate you guys having me back. We're taking a little stroll down memory lane,

although circumstances are a little bit different right now. They are a little bit different. I mean, one, Josh Dorkin has changed his look quite a bit. Now he's got a shaved head and he looks like an NFL, I don't know, I was going to say, linemen crossed with a cop. So this is David Green. I'm sure you guys have now met, but yeah, man. Oh, I see what you were going for there.

That I am Josh Dorkin. Okay. Exactly. Look at that. Man, apparently my jokes fall flat today. I'll blame it on the getting up at 4 a.m. and 3 a.m. and 2 a.m. with Wilder. Awesome.

Anyway, what's up, guys? So let's talk about real estate. First of all, I want to go to market. Like, well, no, I was going to go to market. What's your market like? But some people don't even know who you are. I mean, back when you were on a show, we had like seven people listening and three of them were like my family.

So today, we got like a lot more. So who are you, Tucker, what do you do? What's your story in a nutshell? Sure. Well, I got to say you had more than seven listeners back then because you guys were a big springboard to me starting my own show even back then. So you guys definitely had a listener base. But for those people that don't know me, you know, I've been in the real estate game since about 2002 in a variety of different ways. But I started in the mortgage game. And, you know, I was one of those greasy, grimy loan officers way back when that slaying a bunch of, you know, less than scrupulous type loans to people. Although, you know, no job, no credit. No problem. That was me. But bear in mind, it was legal back then. And then, you know, we were told that that was normal. So, you know, fast forward to today, it looks a little different. But

that's how I got started. And about two or three years into that, I started my own mortgage company, and that was about 2005, 2006. And, you know, I was actually sitting in this office right here in March 2007 when the financing spickett got shut off. And from there, we ended up going through the Great Recession. But during that time, you know, I was buying and flipping some properties, probably one or two at a time while I owned my mortgage company. I did the, you know, what you have now coined probably one of the most well-known phrases ever is the house hacking right so prior to brand turner coining this phrase called house hacking i lived in a house with a bunch of buddies uh fixed it up and rented it out and then i sold that before the bust made about 200 grants so that was kind of my

my big casino win we'll call it you know heading into the downturn which was good because i was then flush with cash and not with make-believe equity uh so when we did hit the skids there and uh you know mid-2007. I did have a fair bit of cash on hand, which was great. I actually downsized instead of upsized. So I went from a house to a townhome, which the only reason I really did that, I mean, I can't say that I had great foresight or anything, but I had a boat. I did buy a boat with some of that money, which was probably not the smartest thing to do. But then I took that boat and I docked across the street from my house on the Willamette River. And so I thought, well, I'll just live in a townhome and I'll have a boat and there's a bar in between. And it sounds like a great way to

live your 20s, right? So that's what I did. But then back to the real estate side of the things, you know, 2007 happened by the time we got into early 2008. I decided to essentially close up my mortgage shop. I was doing a little bit of originating still, but I had a partner who had a Washington license and I kind of handed everything off to him. And then November 2008 is when we opened or filed the paperwork for what is now TTM development company. And so we basically, or I decided at that point, I didn't want to generate really any of my income moving forward from originating loans. I wanted it all to be in the real estate investment space. And so we went from, you know, basically, or I went from in the loan side to full time into the house flipping world. And

over that time, I guess I said to say, I did acquire a number of rentals. So I built out a decent rental portfolio, some of which stuck, some of which didn't, you know, depending on when I bought them on the run up, some of which I still own today. But from 2008 on, we started basically buying and selling property as kind of our active income. And that's been my main income ever since. And, you know, we went up by when you guys had me on the show in 2013, we had kind of ascended from buying your typical three bedroom one bath, three bedroom two bath, ranch style home, all the way up to building a multi-million dollar new construction. So the last time I was on the show, it was right before what we call the street of dreams here in Portland, which was our first multi-million dollar new

construction, which I'm happy to report. We ended up selling that right after the show for just under two million bucks. We did pretty well. And from there, we started doing a lot more new construction. We also did a lot of renovating. But now, here we are, you know, end of April, beginning of May 2020. You know, things are feeling a little bit like 2009, 2010 in certain segments of the market. So that's me in a nutshell. That's cool, man. Well, there's a couple of things I remember from last time we talked back, you know, what of this, almost seven years ago. I remember one, you had the postcard. Didn't you have the postcard with your dog on it? I do. I did. That's what I, Yeah. Did. Okay. Yeah. I remember that because I remember if that stood out to me. It was like,

what were the dog's name buys houses or whatever it was? Like, I thought that was super clever. I'm happy to report. George is a Mastiff and he's still alive seven years later. Yeah. He's nine and a half. That's good for a mastiff. Yeah. Yeah. And that postcard was pretty popular. I do remember a lot of people reached out to me after that show. And they're like, hey, I made a postcard with my dog on it. And I don't know if it pulled as well for them or not. But people. Yeah, I don't know. But I thought that was, I thought that was clever. And then the second thing I remember about the show is how Josh and I just could not get over, how much you looked and sounded like, Matt Damon. And, you know, now you have a little bit of a facial hair. I think you're trying to distance yourself from him. But do you still get recognized as Matt Damon from time and time?

Occasionally, the beard kind of throws people off a little bit. But originally, I, you know, I grew it to look older. And now I just, you know, people kind of, you grow accustomed to beards, right? As looking at you, both of you guys, actually. Well, it's actually a state law now in the Pacific Northwest. You can't live in Portland or Washington, you know, Washington Oregon. And that's where you're in Oregon. Yep. And what's your volume look like over the past like couple of years? Like, What kind of numbers are you doing in your business in terms of like how many flips or how many bills? We're probably, you know, let's call it seven or eight new construction and then probably similar to that on flips. So not a, you know, comparatively to the narrative out there of huge volume, we're not it.

But we're higher profit margin, lower volume. And that's been the business we've been running really since I talked to you in 13. We did more flips. You know, I was just looking through those lovely, you know, clearance file cabinets that I have back there along with, you know, You can see my circa 1972 office environment here. I'm a big fan of C-class office space. But I was pulling old files to kind of really dig into what we were doing in like 2008, 2009, 2010 to kind of re-equate myself with the transactions we were doing that were successful and unsuccessful.

And we were doing a lot more volume back then. But we were also doing lower price point, a lot of kind of smaller type remodels. But now, you know, we've moved up price point or we have over the last seven or eight years dramatically. And with that comes a higher profit margin. attached to each deal. We've also raised a lot more capital. We're doing a lot more construction. So we're like not an incredibly high volume operation, but we try and be as highly profitable as possible. Yeah. And I don't think that's a bad thing. I think people focus a lot sometimes on volume. Like David, you make this point all the time, right? Like, oh, I got 12 doors. I got 100 doors.

Yeah, each of your doors make $3 a month. So congratulations, that's a lot of work. People say it as a bragging metric and it's actually the opposite. I hear that. And I'm like, oh, that sounds horrible, right? Like, oh, yeah, I have 75 foster cats that I have to care of all the time. You know, it reminds me of a quote I was reading yesterday that Newt Gingrich said, and it had something to do with the fact that a lion can catch field mice all day long, but it will die because the caloric content of a field mice is less than what it takes to go chase it. So instead, lions chase antelopes.

And a lot of us in life spend our time chasing field mice because it feels good to say we did something. Like, I caught 75 mice today. But really, you just wasted your entire day and he didn't get anywhere. that one antelope could have fed you for a long time. And that's the same principle I see going on here. I'm curious, though, Tucker, because you said you got out of the loan origination business. I just started a company to do loans. And I'm wondering, did you get out of it because recognized that the return on your time and the frustration was just more than you could get

if you put your effort somewhere else? Yeah. To be totally honest with you, I never loved the loan origination business. It was just, it felt like a real grind. And the kind of the straw that broke the camel's back, it was, you know, 2008, 2009. I actually was being audited a bunch of different ways by the state, finance securities division. And so they would audit you and then they would charge you hourly for the auditors. And then when I got the bill, I remember looking at it, they charged me for the drive time for the auditors to drive from Salem to Portland. And I thought, so you're charging me for the audit. And it was an absurd amount each, you know, hour. But you're also charging me for the time that it takes them to drive from Salem to Portland

before they even start the audit. And at that point, I was like, you know what, forget this. It's just not fun anymore. And so, you know, it was a tough decision. It wasn't like an easy one because I'd been making a lot of money doing that. And that was my primary source of income up to that point. But I just kind of got burned out on it. And I don't think I'd go back. Maybe in like a consulting or like high level way, maybe I'd be in the mortgage game, but I wouldn't want to be on the front lines originating. That's a very important factor to consider, though, for everyone listening. When it stops being fun, when you start to hate it, when it's what Brandon and I, I call it becomes heavy. It's just a heavy thing. It gets to be where you're going to lose money

because your subconscious will be working against you. An opportunity will cross your path and instead of pursuing it, you're actually going to like find some way to avoid it or you're not going to want to work that day. You're going to sleep in instead of getting up. And if you think, like what I learned with was when I would be really hard on myself when a deal didn't work out like I thought that it should, I would not want to go chase the next deal. And I realize if I do this and I miss three deals a year just because I'm not in a great mood for the next 20, 30 years of my life, that's going to be a massive impact on my overall wealth. And I recognize that, you know, you kind of have to protect your emotional health if you want to be financially wealthy. Yeah, I agree. I mean, you know, if you're

in the mortgage game at all, like the challenge was I was in the broker world, right? And so at the broker world, you're dealing with these wholesale lenders and you've got underwriters that are not in the same building as you. And then you've got customers that you're kind of playing the go between with. It's just a real tough world. And now with all of the additional guidelines and overla, and things that are required. It's just, it's a tough business again, in my opinion. And, you know, people weather through it and they'll last, but it just wasn't for me. Hey, I got a question on that, on that.

I know I want to get to, like, the market stuff and the real, like, you know, the relevant timely stuff, but something that it doesn't depend on the market. I mean, it's completely irrelevant of the market. It's something that David brought up about if you're not in it, if you're not feeling it, there's this, like, maybe you shouldn't pursue it. But at the same time, there's like, it's like the question what I'm getting at is, when to grit and when to quit? Like, when do you just buckle down and say, you know,

know what, I'm not feeling it today or this week, but I know that I just need to keep working my process. And when do you say, you know what, I'm just done. I'm tired. Like, it's just, it's not for me right now. I'm going to move on to something new. Because a lot of people are thinking that maybe in their job, they just want to, they're not sure if they should stick with it or their side hustle or whatever. So when do you, when do you see that difference? So, I mean, I love real estate, right? Don't get me wrong. Like the whole real estate game, like all facets of it. Some I'm focused in, right? That's it's, which is challenging because we all have this shiny ball syndrome and we're like, ooh, storage units, ooh, multifamily,

ooh, new construction, right? Like, it all kind of, you know, is interesting to me. But I just looked at it, number one, I was burned out. I'd done it for a number of years. It wasn't like I gave it a month of trying to do something like, you know, let's say you're, you're trying to learn how to market directly to sellers and you give it one campaign. You're like, screw it. I'm not going to grind it out.

I don't want to do it. I mean, I've been doing it for years. And I just knew deep down that it wasn't fulfilling for me. But I also knew that there was a better way to make money. money in this business. And so the real estate investing side, I knew that was a better way to make money. I just had to learn that side of the game. And so I just decided to go, you know, dive in head first and really figure that out. I'd had some success with it, which helped. But I knew that there was just a better way. I mean, being transactional on the loan side, it's like the toughest way

to make a living in this business. I mean, realtors, you have predetermined commissions that you're basically paid on the loan side. You're scratching and clawing and you're bid against other people. people on rate and fees and everything. I mean, it's just a tough way to make, you know, day in and day out. And I just got burned out on it after years. Yeah. And that's, you're saying, I mean, for people listening, if that's what you're feeling, if you relate to that, you're like, yes, it's so frustrating. I have what I thought was a good deal. And then the client's beating me up on the price. And when it's all set and done, and then I pay taxes, I'm like, why did I even do that? I would have been better off bartending one night a week or something. Then you've got

to look for a way to get out of that position. You're 100% right. The way that I bet if you tell us how you feel now, you're excited, you see that deal and it feels like an antelope and you're going to chase it with everything you got. And you're going to get the best out of yourself. And that's just, you got to listen to those internal voices that are trying to guide you to the right place for you. For sure. And that's not to say this is the easy side either, right? I mean, you know, I, as we were talking about before we started recording, I mean, I get people to tell me they want to kill me occasionally with the messages they leave. You know, we get a lot of nimbies around here that hate redevelopment. And so, you know, I get people cruising by my house today to call

at night yelling obscenities because they know where I live and they don't like the fact we're building new construction in the area. I mean, so there's definitely challenges on this side as well, but I just, I have much more of a fondness for this side of the business. This is where I wanted to be ultimately. And so that's where I am. Well, it's a good thing that your best friend, Ben Affleck is now Batman and you can call on him whatever you need. That is a good thing. That is true. That is true. Hey, Tucker. Okay, so let's talk about the real estate market, you know, the changes that we're seeing right now. What do you seem personally right now in your market in the Portland area? And are you only in Portland? Do you do Salem in other areas? And then like, what are you seeing? I'm purely in

Portland right now. Obviously, I talk to a lot of investors on a, you know, fairly high level across the country. So I'm kind of getting a read on other markets as well. But I don't, I don't want to speak to that today. I'll just talk to, you know, what I'm seeing in Portland. And then you can kind of take from there what, what will happen across the country. But, you know, we're kind of, we're in a unique position right now because we're in kind of multiple buckets in terms of price points, types of buyers, product, things like that. And so, you know, kind of the tale of two cities, we'll call it. We had one house that we sold last week that was slightly under median price point for an area

called Lake Oswego. And even in the midst of this whole corona mess, you know, we had multiple offers and it sold over a list. Now, it was a little bumpy coming into closing with financing and people deciding whether or not they really want to pay that number and, you know, just challenges like that. but we got it to closing. And then on the other side, we've got some, you know, million plus dollar new construction that's on the market that's pending right now

and we're taking it in for closing. But, you know, that market is very stagnant. There's very few buyers out there. Those buyers that are out there are bargain shoppers. And so we're seeing the meat price point preserve its value still, but we're seeing the higher end really start to give back and give back quickly. Now, whether or not it's going to be a sustained give back or whether or not it's going to be a blip, I don't know.

I can't really speak to that. for certain. But my gut's telling me that it's probably a sustained give back to some extent and certain pockets more than others. But right now the median price point, I mean, you probably see it in your feed too. People are like, sold a house and 24 hours with four offers. And, you know, so there still is a lot of activity out there in that kind of closer to median price point. But once you get into the higher end in whatever market you're in, it's soft. And from what I can tell, probably about a 10% reduction in what buyers are willing to pay versus what stuff's listed for right now. that makes a lot of sense.

So what are you going to do differently? Because you said earlier that it's looking a lot like maybe 2009, 10. Like if that happens, how does that change your business, what you're doing? Do you stop developing? Do you focus on the lower end? Or where do you see yourself headed? There's a number of probably start to do different. I will say regardless of whether or not, you know,

we're in the more median price point bucket that's selling easier or the higher price point bucket that's taking more work, the buyers feel a lot. like 2009, 2010, where like this morning I got an email of like, hey, we were over at the house this weekend and there's like 30 things we noticed that we'd like punched out, right? And so I was like, well, that's circa, you know, 2009, 2010 where everybody wants everything just perfect, right, as opposed to like, I'll take it, you know. So, you know, that's one thing we're preparing for is just to kind of an ongoing that. But more than that, too, I don't know if you want me to

get into it yet, but we've got kind of some rules that we're going to kind of operate by, you know, I told you I went and looked through all of our previous stuff that we'd done just to kind of reacquaint how we navigated it last time and what applies this time. But yeah, we're going to do a variety of things. The first is going to be, I can get into the nuts and bolts here, but the biggest thing will be we're going to dial back our high end exposure for sure. And if we do do high end, it's got to be a plus lot, a plus area. Nothing that could, you know, be whether internally or externally wrong with the property.

And we can fix the internal stuff a lot of times, but the external we can't, right? So we're going to limit our high end exposure for sure until we can kind of find a bottom in it. But I don't know, do you want me to run through some of these things? Yeah. Okay. Yeah, let's do it. So I would say for everybody listening and just this is essentially what we're doing. And I'm not like a poster child for it because again, we have shiny ball syndrome and we see deals come in and we're like, oh, deal, deal.

You know, antelope, right? Or whatever David said there. So I have to pull the reins in on myself. Like even last week, I was like, why am I looking at this deal? Don't buy it. Like, you know, it looks good. It smells good. But it's just.

doesn't quite fit into this box. So it does take some self-restraint to do this. So before I go through it, I just want people to know that. But, you know, the first thing that I'll say is that speed is going to be your best friend on projects, right? So when we do, we're definitely not doing development projects now because if we do a development project, that means we have to, you know, replat a piece of land to make multiple lots where there's one now. And that's going to be probably a 12 to 15 month process if we don't have delays from, you know, corona and, you know, people not working and counties being shut down. So looking forward 12 to 15 months, I don't know what dirt value is going to be. I especially don't know what dirt value is going to be when we're talking a

million-dollar plus new construction. It's going to be a real challenge to kind of forecast that out. So speed is our best friend here right now, which means we're going to take on essentially smaller projects, quicker-to-market type rehabs because that's our primary function is we're new construction and rehabbers, right? We wholesale third, but primarily we're rehabbers and new construction. So, you know, we're going to look for stuff that we can kind of take down and we can take it back to market as quickly as possible. And that then takes me to kind of the second rule that I'm, I'm trying to abide by. And this is where I almost broke my rule last week, but we're going to try and buy homes that are not as old as we would have previously. So like anything that's like 50s,

40s, you know, somebody, I did a webinar last week. I said, don't buy 40s houses because that's what we didn't do back in 2009. They're like, well, now that's the same as 50s houses. So, I mean, I guess they made a point there. But, you know, if anything 60s forward, it's usually less of a project, 50s, 40s, 30s, 20s, they're just a pain in the ass. Yeah, can you explain for those people who are new listening to this? Why, like, what's the difference between an old house? Like, what kind of challenges do you experience in those 1910, 20? I mean, you got those in Portland just like we did in Washington, the 19, the 1900 giant house. Like, what's the difference between that in the newer ones? Like, the first problem you're going to run into is foundational issues,

right? Because, you know, I call it the old crumbly Portland foundations. Washington has them to, but you pick at them and they just fall apart, right? You got funky, you know, crawl space height. You've got lath and plaster everywhere. You've got knob and tube wiring. You've got old windows. You've got funky floor plans. You basically have to redo everything,

reconfigure everything if you want to get 100% of what market value is for this property, right? So you're taking a very old house and trying to make it brand new, which it's just a lot of work. It really is. And so then that adds into your timeline to get it to the finish line. and then also the amount of money that it's going to take to get there. Because the older the house is, the more likely your rehab budget is going to get blown up. I mean, you can try and create a budget for an old house,

but I don't know one person that's ever actually hit that budget. And we've done a lot of houses, then we still can't get it right on these older ones. You just can't do it. So we're going to resist buying older homes as much as possible. Ideally, like, 60s, 70s ranches are like the perfect houses. The one we just sold last week, that was actually an 80s ranch. And that was like, I mean, we were in and out. sold that thing as quickly as we could given the situation. But, you know, we didn't have to do a whole

lot. We were really, you know, the electrical was fine. The plumbing for the most part was fine. We opened up a wall. Roof had been replaced in the last 10 years, so it was okay. Siding was good. Windows were, you know, double-paint aluminum, but they could be kept and cleaned up. So just, you know, the HVAC system was still good. It had been replaced once since it was built. So just, you know, a better, easier product to kind of take in an investment grade form and then take it to retail form on the other end. So speed of project ties into essentially the age of home that you're buying. The older of the home you buy, the longer that project's going to be. And ultimately, the more money you're going to spend on that rehab. Yeah, I remember my first few,

I mean, most of the first few flips and rentals I bought were all like, you know, pre-1920s. And so, and I did a lot of my own work. And so, like, I was just very used to the fact that, like, you tear out a bathtub, the new bathtub that you buy at Home Depot wasn't probably going to fit. And, you know, you open up a wall and you're going to find problems. And I remember just like, then I started doing some newer house, especially at now, in Maui here. I'm doing like condos and like newer stuff. Like I think like 1970s.

The one we got right now is like 1999, I think. And I'm like, it's amazing how much easier it is to rehab a 1990s property than a 1920s property. It's like it's absurd how much easier it is. Like you just cut the drywall and the dude drywall fits exactly the same width. Like how amazing is that? Like I don't know. It's like, yeah, it goes back to like almost like what you were saying, David, about

the mice. At the same time, it's not just like the size of the deal, but just like the 2,000 square foot 1920's house, it's not the same of the 2000 square foot 1980s house. I mean, it might be half as much to rehab the 80s one. That's what experience will teach you is the experienced person looks at that 1920s deal and they don't get caught up in a metric like just price per square foot or look, there's a comp down the street for whatever. They are seeing the effort that it will take to get them there and then you sort of develop a feel for is the juice worth the squeeze. And that's really what Tucker is describing is he's done this enough times that he's recognized the juice is worth the

squeeze in these areas. And now that we're going into some changes, this is how I'm going to adapt. And this is really good stuff because this is exactly how people should be thinking. This is why Tucker's not saying, I'm freezing all operations. I don't know what to do. I'm just going to freeze in place and wait to see. He's just making tweaks and moving forward. And older homes is something that, because the market's been so hot, we haven't really asked the question, how old is the house? It really never comes up. It's just can't I get it or how big is it? But as things start to slow down, that should become something you think about. Yeah, it's a trap. I mean, it really is because I don't know many investors that get done with like a 30s or 40s

remodel and they're like, that was awesome. You know, most of the time, they're like, thank God this thing closed, you know. And in an appreciating hotter market, sometimes you carry a higher price and, you know, you get, you make some more money and it kind of balances it out. You're like, okay, well, you know, it was good. But when you're in a potentially depreciating market, or at least there's some downward pressure on pricing, your budget inflates here, your timeline inflates there and your price you get for it comes down a little bit, you just rarely look at those and go, that was a good idea. Okay. So what else you got for us? So the next one, and this is, again, it's going to depend on who you are in your skill set and your market, but generally I don't want to deviate too far from the

median price point in any given area. I know that's kind of a blanket statement, but, you know, median price points, they change a lot depending on even within a certain area. Like Portland itself has like a median price point of, you know, upper fours, lake on. Oswego where we do most of our stuff, it's in the sevens, right? So we try and stay around medium price point wherever we're at as much as possible. And to do that, quite frankly, you can't really do new construction these days. It just doesn't make sense. It costs too much to build. The permit costs are too high here. So you have to renovate existing construction. So we're going to do the best that we can. If we're going to take on a project apples to apples, we will choose a newer built home

that's closer to median price point before anything else. Hey, question for you on that. So if you're not going to do new construction. You're not alone in those fears. I'm sure there's a lot. I don't even know fears right. We're just in that being careful, right? There's probably a lot of other developers thinking the same thing. So I'm just curious from an economic big picture standpoint from David from you and from Tucker, but I'll start with you Tucker. But like, what does that mean three years down the road? I mean, are a lot of developers going to stop now? And three years on the road now, we're going to have a massive house is shortage? Or does that not really matter? Do you think that not plays into it? Like, what do you see this long term ramifications of the new

build flow down. I mean, David probably saw it, but the HMI, the housing market indexed went from 72 to 30 last month, right? I don't know what that is. It's basically builder confidence, right? So they pull a bunch of national builders, and that was the largest drop month over month on record. So we'd been hovering between 68 and 72 for, you know, a number of years now, and they dropped all the way to 30. So that basically says, I mean, I don't know if I can swear on this, but it means it means they're scared shitless, right? So that frightens them, you know, based on all the economic implications of what's going on right now. So to answer your question, yeah, I think there will be probably a void at some point.

I don't know how big that void's going to be. I don't know how much they're going to stall out on building. I know there's two camps of builders right now in our market. One is just kind of blind faith still going with it. And other ones are like, we're pumping the brakes and we're going to kind of, you know, try and read the tea leaves a little bit here before we advance forward on the dirt that we own or the projects that we're in the middle of plating or whatever. Yeah.

Okay, that makes sense. What do you think, David? Like long term, what does this do to the economy? Well, I think that we've had a housing shortage, at least in the market that I'm at in, a lot of other markets, there's been a lot of like wind at the back of the economy of America that's made housing much more expensive. And if you're not in the kind of the upper tier in your market for income,

it's already been very, very difficult to buy a house. typically you had the first-time home buyer, the entry-level homes, that kind of like the ugly ones that have decent bones, but nobody really wants them. And that's where you get your first house and you get some equity and you move up. But a lot of people are buying those as rental properties now, especially the ugly ones. There's so many investors that really eat up that bottom tier of the market that,

like Tucker, if he does his job well, he gets that property before it ever, even gets to the MLS. There's a lot of other people doing that because of technology increases and so much capital floating around. So that house that used to make it to the MLS that someone's like, wow, look how ugly that thing is. And someone could just kind of take on a do-it-yourself project and get a good price. It doesn't get there anymore. So that's part of why more homes are tougher to get into.

And now there's more regulation. It's just harder for builders to build houses. People don't realize that every time you add a permit process, a regulation, something to make the job harder, you make it more expensive for someone, which forces them to now build a house that's more expensive, which makes it harder to make affordable housing, and then we scream in the country. We want more affordable housing, but you can't have that with extra regulation.

And one thing that people have to understand about a builder, let's say that, Brandon, you want to fix up your house. You're like, well, should I spend $20,000 to repaint it or put a new roof on it? I don't know. Our price is going to go up. It's a $20,000 decision you got to make based on the confidence you have

about if that investment's worth it in that given moment. But when you're a builder, you don't get to build in chunks. You don't get to upgrade a bathroom or a kitchen. you have to spend the entire amount of capital up front to build an entire asset. And if it doesn't sell, you get nothing back. Or you have to decrease it massively and you lose a ton of money. The stakes are so much higher for a builder.

Yeah, you can make more money building a house than just rehabbing one. But you also have way more risk. And so builders have to be extra careful. It's kind of like full steam ahead when the economy is amazing. But other than that, they got to walk with trepidation. It's just by the nature of the game, they can't break. their risk into smaller portions like when you buy a house from the 1930s and then you upgrade the electrical and 10 years later you put a new roof on it and you know you slowly upgrade that house over

time putting little bits of money in it as you feel comfortable so I think this is something that we should get used to seeing when we have a big scare like this the smart builder is really any builder that's worth their weight in salt or gold or however that saying goes it's going to say i got to wait and make sure there's someone that wants to buy this house you know if Tucker puts a house under contract and it doesn't work well he could rent it out fix it up he could do less rehab and try to get rid of it faster. He could wholesale to someone else. There's options that that person has. A builder really doesn't have any off. They're borrowing millions of dollars. They're developing land that could be completely useless if that house doesn't actually sell. And then they're dumping tons of

money into building this house with one extra strategy. So with more risk is going to come more expense. Yeah. Yeah, that's a good point. I mean, it's a big, you know, just so people can kind of understand it. Like if we were to build a house, it's a six to eight month commitment to get to the finish line, right? Whereas if we renovate one of these kind of newer built ranches, we're in and out in six weeks, right? Like, so if you're in a market where you're not sure where the footing's going, you know, where's the bottom going to be, what kind of pressure is coming on pricing? Which one do you want to do? And I mean, we're kind of a hybrid company.

We've always been. Like we renovated first and then we got into new construction. A lot of builders are not that way. They just went straight into building because their dad did or a family member or they started to build a house. Then they never go back. I mean, becoming a really good at renovated. That's an acquired skill set. You can't just be a builder and then back up and just be a great at renovating houses too. It's almost two entirely different businesses. So, yeah, they're,

firmly entrenched in that new construction world. And there's a lot more risk to it. I mean, we have one right now that I'll have plans approved probably next week for probably $2.8 to $3 million built. And it looks over the lake. It's in an amazing area. But two months ago, I would have been like, let's get this thing built and we'll bang it out and we'll make a ton of money and it'll be great. But now I'm like, I don't know, is it right? Should we be doing this thing? You know, maybe it's an A plus lot in an A plus area. But still, you know, I want to see how this shakes out before I hit go on that.

Because, yeah, I can't just do a little bit here and a little bit there. I mean, that's going to be a million, two, million five build out. So. Yeah. Yeah. Yeah. The reason I ask that question, too, about like, what does I do to the economy? I'm just thinking like there should be, and I'm sure somebody listening to this has this data.

But like it feels like it would not be that complicated of an analysis to run to figure out how many new homes are being built in America every year or in a certain state or market? How many new homes are going in? How many homes are going out? Like they're demoed. And then how many new people are starting to buy or rent? And how many people are stopping buying or renting? Meaning they're, you know, like, you should be able to like generally that all those four

numbers should generally always even out in a market for the most part. Like. And so when one goes down, one goes up and, and obviously there's some changes there. People double up and they live with their parents longer and stuff. But anyway, it'd be interesting to see like run some, uh, kind of predictive spreadsheet work on that. So again, if anybody has that, listen to this show has some really fun details on that. Feel free to, I don't know, shoot it to us in a message or something on Instagram and let us know.

Because, yeah, that's a – because my thought is if we see a housing shortage, even more than we already are. Like, like David brought that, a point up, there's already a housing shortage. If that happens, especially in, like, the world of rentals, but also, like, supply and demands does that that – that will make – if there's less supply, then demand goes up, the price goes up. So we may see rents going up after all. this, we may see property values going up because of all this long term. I don't know. It's an interesting. One point that I want to make, and I made this, you know, in the presentation I gave last week to a lot of our followers is that, you know, going into 2009 when we did a lot of these projects, the average, you know, number of months of inventory on a countrywide level. I mean, it varied

a little bit, you know, city by city, but it was 12 months, which now, if like, if I told you had 12 months worth inventory, you'd be like, holy shit. We are in a tough spot, right? And so we're selling houses in 09 with 12 months of inventory and it didn't seem like it was that big of I mean it was a big deal but it wasn't like oh my god you know the world's you know on its head right now I mean our most recent numbers were at under two months for the Portland area so there is obviously some supply and demand effects going on the challenges with new construction and how this will fit in is that generally new construction is higher price point right unless you're in middle America where they're plating like a hundred lots and they get their dollar cost average way down per lot and they build them out as

cheap as they possibly can and they sell them for, you know, $2.99 into $3.99, right? That's really the only place in America you're going to find that cheap housing, you know, that's new. But generally on the, on the coast, you're looking at like 600 plus for new construction, like entry level new construction. And so as you start to get up into those higher price points, you know, jumbo loan financing is a big issue right now. And getting people, you know, for example, the one we're selling right now, that's a, you know, million plus, they have to have 20% down and they have to be gainfully employed or, you know, for a while, or at least on an underwriting perspective, it's not going to be an at-risk type job. And then they have to have 12 months worth of reserves that are not in a retirement account,

right? So that slims down your buyer pool dramatically. So even though you might have a low amount of supply, that bottlenecking in the world of finance or those additional, you know, hoops that people have to jump through or criteria they have to meet, it slims down your buyer pool as much as you have low inventory and products. So even though you just have low inventory, that's not the end-all-be-all that the, you know, market should have upward pricing. Yeah. Yeah, fascinating. Yeah, we need like a, we gotta find ourselves an economist to come on here. Like some like, who's like the top guy in the U.S. with that?

We got to find that guy and get them on here. I tell people all the time that really buyers drive markets. Buyers determine how many people put their house on the market to sell. Buyers determine how quickly it'll sell. Buyers determine how much they're going to pay for it. It's how much money the buyer makes. It's how confident the buyer feels. It's how many options the buyer has.

You can, you can have a market with a ton of houses if there's no one to buy it doesn't matter. And you can have a market with only a handful of listings. But if all the buyers are super picky, they're still not going to sell over asking price. It's really the thirst of the buyer that determines what happens in a market. And so if you want to understand markets, understand all the things that affect what makes buyers want to pull the trigger. Part of why it's really hard to invest to buy cash flow properties in the Bay Area is that there are so many people here that would pay way more than an investor because they just need somewhere to live. And they don't need a great deal. They make plenty of money. They just want to get the house, right? They'll easily spend 30 grand more to know

it's locked up and it's mine and I don't have to worry about writing an offers for another three weeks to find something. So you're going to compete with that. You're competing with, you know, you're trying to find an off market deal. Well, everybody knows their house is worth money out here. It's very hard to find someone that doesn't know their house is worth what it's worth because they hear about it all the time. So that has a huge impact on the psychology of the people to shop here and then the price you can get on the house. And that's why I like to go to other markets because not everybody knows in other markets what their property is worth or they know if I spent 50,000 I could make it worth $200,000 more. And a lot of those markets don't have as

many people that are primary residence buyers you're competing with. You're competing with other investors who also want a good deal. So it makes it a little bit easier to get what you need. For sure. Makes sense. Well, Tucker, what else you got for us? So I got a couple more that I think are important. So I'll rattle these off for you guys. But number, I guess number four is, because I've given you guys three. Number four is, and you know this brand and I'm sure you do too, David, for like the last, let's call it three years, right? There's been this big mantra out there that the key to this business is marketing, right? Marketing to get leads in, leads equal deals, right? And so everybody's put their emphasis or

their desire to learn about this business on marketing. Like, how do I connect with potential sellers of investment grade real estate? And that's great. And that's a necessary skill for sure. But another necessary skill is to understand the product itself. And I think a lot of investors, they don't understand the product itself. And what I mean by that is the actual house, right? And so as we head into a slower market, the biggest challenge that we're going to have is recognizing, you know, okay, not only do I not want to buy an older home,

but am I buying a house that has some sort of weird functional obsolescence, whether it be internal or external, right? Like, can this floor plan be fixed? Does it have a bathroom on the main floor? If it doesn't, it's a weird house, right? A hotter market carries that and people look past it. You know, does the neighbor next door have blue tarps? of everything. If it's in a gentrifying, getting better, quickly type neighborhood, then people

look past it. But when the market slows, that gentrification stops, right? And then people look at it and they go, he's going to be there for a while. I don't know that I want that. Or is it on a busier road that in a hotter market, busier road stuff always sells closer to 100 cents of what any normal house would sell for off a busy road, right? You get in a solar market, it gets punished by like probably 15%, maybe 17%. Where in a hot market, maybe it's 3%. Right. So there's all these things. And that a lot of people just haven't acquired those skills to recognize over the last few years because you haven't had to, now you really need to have a keen eye for that. So I would stay away from houses that have functional obsolescence, whether it be or functional challenges,

whether it be internal or external stuff. You can control. It costs more money to control it, right? You've got to fix things. Or if you can't control it, well, you can't control it, right? So you can't fix that. I had a house I bought. I flipped it. Well, sort of flipped it back in, I think it was 2009. It might have been 10. but it shared a driveway. It's like this little tiny neighborhood, like kind of a C-class area, little tiny house next door

to a bunch of all the little tiny houses in this little neighborhood. And the house shared a driveway. The short little driveway, I mean, it's only like, you know, 50 feet long, but shared it with the neighbor. So it was like a double wide driveway, but the two driveways basically were just one solid slab, right?

So my, and then the houses were on the edges. So the driveway was in between the two houses. Anyway, but the neighbor's house was just a disaster. I mean, just like a broken down car or two in the driveway, piled up windows and all this stuff. stuff. That house like, man, that just did not sell. I mean, I put on the market, it was on the market for things six months. I actually moved into it for six months while like, if I didn't know what else to do. Like I was like panicking and had to make the payment. And yeah, like that was rough. And we finally ended up selling it for about what we had into it. I think we sold it for 60 grand. But yeah, a year ago, I was down the house, I probably get like 120 for it. Yeah. But like, because people would look past it like, oh, the neighbor would it's fine. Yeah. You know, like the neighbor. Yeah, we'll take care of him. He's not a big deal. But yeah, it's going to matter a lot. Those kind of. But yeah, it's going to matter a lot. Those kind of. of issues. So I love that you brought that point up. I'd not thought about that in a while. It's so good. We don't talk about this very often. It's one of those things where when the tide is

rising, you don't have to pay attention to what obstructions might be under the water because it just keeps going up. I see that in the market where I live in a city called Brentwood and Northern California or close to it. And we have this area where they'll build all these houses that share one driveway. So they'll have one long driveway that goes all the way back and maybe six different houses that are kind of like three on each side along that driveway. And they'll all share the same thing. And when it's a red hot market, the buyers are like, I don't care. I just got to share a driveway. I really like that granite countertop and I want to go buy that house. And I'll try to talk them out of it. And they just don't want to hear it. Like, no, no, no, this house just feels

right. But I know when the market shifts and the tide goes down, nobody wants that. Nobody wants a driveway. They got to share with five other people that they don't know and houses stacked up on each other that close. So it is very smart to think about things like that. Just like the 1910 house, doesn't matter at all, like Tucker said in a hot market, it's all the same. When it goes down and there's less buyer demand and people have more options, they don't want a house from 1910. The minute they hear the words knob and tube, they're like, see ya. I don't want anything to do with that. Yeah, absolutely. I mean, another example would be, you know, master suites are a huge thing, right? Like, we want to find a house that has more than one bath because if you have a one bath house, that's a type of product

that gets punished in a solar market too. Or if you have really small closets in the master, that's the type of house that gets punished in a solar market. Let's say it's a 70s, 60s house and it still has the original single-paying aluminum windows. In a hot market, they're like, I'll take it, you know, whatever. In a cool market, they're like, well, we want the windows replaced. Then they get some ungodly bid from some, you know, retail GC that they hand you with their repair addendum for like 40 grand to replace windows. They want a price reduction. You know, stuff like that happens a lot.

So you just have to be aware of that. And, you know, that's the skill set that some people have acquired. but a lot of people have not as investors over the last few years because they haven't had to. Yep. Yeah. So that's a big one. And then the last big one here is just kind of like how we underwrite stuff in terms of whether or not we're going to do it.

Right. So let's say it passes the other tests and fits within these boxes that we're kind of creating here for ourselves. And that's the pricing strategy. Like how do you say yes to a project based on pricing? And so everybody has their own threshold based on capital costs and distance that they've got to drive to get to the project. and what they're willing to take on a project for.

That varies for everybody, but you can kind of apply these three pricing strategies regardless of where you fall on that spectrum. And so we look at it like we have our hopeful pricing, right, which most of the time in a hot market, you get your hopeful pricing. Sometimes you get more than hopeful, right? Like you're like, oh, it's over for 20 more than what I thought, right? And then you've got likely pricing.

So hopeful would be best case, likely would be most likely. And then you've got, oh shit, right? O'SHIP pricing is like to sell it in a day, you know, get an offer in a day price. And so if we can do the project and it makes sense with the sell it and an offer in a day price or the OSHit price, then we do it. And that's how we underwrote everything back in 8, 9, 10, 11, all the way up until really probably later in 2012 when the market started picking up steam. But that's how we said yes to everything. And it worked out well.

And I think we're going to go back to doing that exact thing again. Yeah. So many investors have gotten like, and myself included, I'm sure David, you probably as well. Like I'm not talking bad at all people. but like I've got these rose-colored glasses. Like our glasses are getting more and more rose-colored as we got into the good market. And it makes us like, like rather than thinking worst-case scenario, like, well, I think this will probably sell for this price.

We're just all super optimistic. Yeah, it'll sell for way more than we're thinking, or at least like above. Like, you don't even think worst-case scenario because it's unlikely to ever happen. And so I think you're right there. Exactly. We need to be realistic in our pricing and assume the worst going in or at least assume a pretty bad scenario. And if it works out better than that, then awesome.

all win, but yeah, really good point. And I love how simple that makes the decision. Does it meet the oh, no price? Yep, then let's do it. We only have an upside, right? If it's, we might hit the likely price. We could miss that. We're not going to very unlikely to hit the, I hope so price. Then don't do it at all. Because it just, you've got to learn how to punch through that analysis paralysis where your brain's trying to figure out 7,000 options of what could happen like a computer and you're just not designed to be that way. So if you make it that simple, we can not lose money. We can at least make money or break even,

and then we have a high upside. You know whether you should do the deal or not. Yeah. There's that flip I'm doing right now in Maui that we're almost done working on. We've been talking about on the show for the past couple months that I was not sure if I was going to do it or not.

So I'm doing it. We bought it for 900. Yeah, right, right, 9-899. I bought for like 900. And then the best case, like the top price, we were like, you know, 1.3. And then I was like, likely 1.2.

and then it was like, ah, 1.1, 1.05 if we had to. Now today, I'm like, yeah, we're 1.1.1.05 might be more realistic. And our break-even is that about about a million at this point. So if we sell it for a million, because we didn't have to put that much of rehab into it. We'd be all broke even. And if we go under a million, like the agreement basically is, okay, fine. If we cannot get a million for it and break even, then I'll turn it into a rental. I'll go refy it for, let's call it, you know, 750,000. Rent the thing out for $5,000, $6,000 a month. and call it good. At least break even over the next little while.

But yeah, that's not how those three-tier prices. Like, I really wanted the 1.3. But you know what? It just might not happen. And that's okay. I'd say a lot of people are kind of midstream on their projects right now, too. Like this came on last time around. Like, it was a slow burn to get to like problem status, right?

Like, you know, we had the, I got the calls in March 2007 of the wholesale lenders shutting off their pipelines, which then basically, you know, eight months later, the Dow cratered, right? So it took a while to get to that point where everybody was like, okay, we need to reassess how we're pricing stuff and what's going on with the world of real estate. This was like two weeks. Like things changed. So there's a lot of people that are mid stride with these projects. And so like anybody that has a project like yours, I mean, I'd be like take it to the, we'll call it the oh no price.

Right. So I don't still constantly in your show. But let's take it the oh no price and let's just get it gone, right? Like move it because if you listed it hopeful or likely, you're probably going to have to reduce it. anyway and then you're going to get stale inventory and you're going to be sitting with everything else. So it's just like sometimes it's best to just get it to where it sells and goes and especially in market like this. And sometimes you make more when you do that. It's so hard to price the house too low. I've learned this as an agent. You almost can't price it too low if there's any kind of demand because

people will come in and you'll get more than one offered and they'll bid it right back up to where it should have been or even more than it should have been because now you have all that emotional fear of oh, I don't want to lose the deal. Answer just saying. Yeah, I was going to make the comment about like you know, don't try to chase the market down. It's kind of like you're saying like, I'm not going to start at 1.3 and then wait a month or two and then go to 1.2. I think we're listed at probably 1.05. And if we make 50 grand off it, we'll call that good.

And if not, you know, like, whatever, we'll deal with it. But also this is why, like, knowing like the thing that made me want to go into it, one is because we decided we could rent it out and at least break even. But two, like, we are speeding through it as fast as human possible. We're going to have the whole readout done in, you know, two and half, three weeks and back on the market again. And, you know, we're already kind of like letting agents know it's coming. because everyone else is pulling their houses off the market,

so we're letting people know it's coming and trying to kind of pre-market the thing a little bit. You know what the median prices for condos around there? Yeah, in that area. This was actually a house, but median price is like 1.2. We're below the median price as well. We'll be the cheapest house in the neighborhood for the past year. So, I mean, your deal fits within, really, this box.

Yeah, it fits within the rules. Yeah, it fits within your five rules. You just would have bought it for cheaper if this had happened, you know, later, but you can't fix that. Yeah, mid-stride. I'm like, uh, you know, whatever, we'll make it happen. And so a lot of people listening right now that, like you said, are in mid-mid strides. So, you know, do what you got to do. Don't be afraid to take an L though. It's so much better to lose a little bit of money and get out of the deal than to chase the bottom. And that's just that ego metric of I can't sell it for less

than a million because then I'm losing money is stupid because if you have $200,000 of your own capital in that deal and you won't sell it. And another deal comes along me, you could have made 50 or $75 grand with that money. You didn't, you didn't lose You didn't break even on the deal. You lost 75 grand that you could have made on something else. That's just what experienced people understand is if I got to get out of this deal and lose 10, 20, 30 grand, but I have my capital to go do the next deal and I make 100 grand. Well, who cares? Yeah.

Yeah. And that's what we're doing with one of our high-end new construction. I mean, we're clearing the books, right? I mean, we're making some money, but not nearly as much as I'd hoped, right? I'm at the, you know, oh, no price that I'm selling it at. But we're clearing the books and we've got, you know, almost a million dollars of capital coming back in. So there's opportunity of cost attached to that if we sit out there and, you know, hopefully we make another 20 or 30 or 40 on that when I'd rather just have it in play.

I mean, it doesn't matter, you know, what the dollar amount is. It's all relative. But you get that back in and now you can redeploy based on new pricing metrics for this new world that we're in. Yeah. Yeah, really good stuff. All right. So we've got five things to rehab.

We've got speed is going to be your best friend in a market where prices are dropping or could be dropping, buy homes that are not as old as you previously would have considered buying. Don't deviate too much from medium house price in an area that's really, really good. Avoid red flag properties like a bad layout, a busy road, small closets in the master bedroom, shared driveways, and then have your three options, the hopeful price, the likely price, and the oh no price. Yeah, that was really good. Really good. Thank you. Thank you. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy working

they picked the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive 50 to 75% of their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with Bigger Pockets for over a decade. And if you want to learn more, visit biggerpockets.com slash retirement. 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 NREG.com slash BPPod. That's NREIG.com slash BPPod. 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's sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored post.

The best part, no monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of the show will get a $75 sponsor. sponsor job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed

on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. All right. Tucker, though, let's talk real quick because some of people listening to this right now are wholesalers. So people who are going out there, they're looking for good deals. and then they're going to like wholesale them or basically sell them quickly without doing any work to a house flip or whatever. So wholesale is kind of that middleman, right? For those people, are not familiar.

What should a wholesaler in this market? Do the same things apply or do you have any advice for those people? Well, I'll tell you this. First off, we're in kind of a front-end choppy period here where like nobody really knows what the bottom is going to be. And that's a tough time to wholesale because, you know, most of the wholesalers I know right now that are trying to shop stuff,

rehabbers are kind of pulling back. They're not, you know, they want a really juicy deal if they're going to do something right now because we're just, they don't know. They don't know what's coming. And so wholesaling will get progressively easier as we can conclude where the bottom is on pricing. For example, like the stock market right now, some would argue that, you know, there's another leg down to be had, but it's been trading within a very tight range for the last couple of weeks. So a lot of people think that's the bottom, right? If you take that and you apply it to real estate, we're kind of on the front end. We don't know where the bottom is yet. But maybe, a couple months from now, once everybody gets back to work, you'll have a better idea of that.

So it'll make wholesaling easier because you're selling to people that just have more confidence that values aren't going to deteriorate or, you know, as quickly as they could. And so as a wholesaler, generally, if you can wholesale a simple 3-1, 3-2 ranches all day long, like that's like the ideal rehab or product, right? So if that's the type of stuff you go after, you'll sell that all day long because rehabbers can quantify the rehab. They can get to the finish line quickly. They can comp it real easy.

there's no functional weird stuff going on with the house. And ranches always sell well. So like if you're a rehabber, that or a wholesale or excuse me, that would be the stuff that I target, you know, whatever that bread and butter type housing is that's not too old. That's the easiest stuff to sell. So, you know, on a type of product to target perspective, that's what I would say. That is so good. I just, people don't understand how like the home buying market works. When I became an agent, I really open my eyes. A lot of the time we have this understanding that there are a number of homes and there are a number of buyers and they are equally dispersed amongst each other. And that's even how we look at the metrics. You know, what's that, how long is this house sitting on the market?

What's the, how long will inventory last? But when it comes down to making a decision to buy a house, you're not looking at every house like it's equal. There's a very specific classification of home that will always be in more demand than the other ones. And when the market becomes hotter and confidence goes up, people are willing to stretch a little bit further to get there, which ultimately ends up in luxury housing, like you said, Tucker, that's what you think is most at risk. As the market gets more uncertain, people pull in. They get scared and they want to keep things close to the chest. So they're always going to be going for those bread and butter, like a little bit under median or right at medium price homes. They don't need to be completely gorgeous,

but they should be clean in a good neighborhood without weird stuff like a busy street or a shared driveway, even in a terrible real estate market, those houses will still perform okay or good even. It's everything that isn't the ideal home that will start to suffer. So like you just said, or this will work for area as well. If the market gets bad, San Francisco doesn't really get that bad. People still want to live in San Francisco. It's those cities where you got to drive an hour to get into San Francisco that get crushed because now there's no reason to stretch out that far. So if you just understand that principle, like you said, when when things are getting worse, you just have to go for the more

primo properties that you can't stretch as far as you could get away with when it was a red hot market. Yeah, very wise advice. That's a good point. Hey, one just thought that came to mind while we're talking about the wholesaler thing, for those people who are listening right now that are new wholesalers, are new to real estate, you're trying to get

into wholesaling. One thing that could work pretty well right now is to rather than normally how people approach wholesaling is, I'm going to go and market to a bunch of deals. I'm just curious you guys' thoughts on this. I'm making it up as I go here. But rather than going out in marketing for a bunch of properties, seeing what you can get, getting some under contract, and then going out to a bunch of buyers to try to get somebody to buy that thing. So you're just like blasting and blasting. It almost seems like it would make more sense at this point because we don't know who's

going to be buying your deal and there's very few people buying. Go find the buyer first. Find out exactly what that guy wants. So like, you know, I want a mobile home parks with 100 units. Like, that's what I want. David wants something specifically. You want something specifically, those ranch houses, right? Go talk to the end buyer.

tell me what you want and then go out and find that thing. And the whole stuff should be a whole lot simpler in two regards. One, you don't have to market to a bunch of different people necessarily. But two, you know, you can really focus your marketing on one specific product, get really good at that thing. Does that make sense? Yeah. Yeah. I think so. I mean, you know, for a while now, there's been, for lack of a better term, a lot of dumb money chasing deals, right?

And so with that becomes a much bigger buyer pool. and so people are just throwing stuff into the piranha pit, right? And they're like, I'll take it, I'll take it. But now it's like just find a few good guys that actually are well capitalized and are still buying and they know what they want and just go find that for them. That's it, you know? I mean, you're actually at a pretty good point if you're just getting into wholesaling because we've been in probably the most competitive wholesale type environment that I've

ever seen for the last few years. Well, now the tide's going out, right? And people are not going to want to spend as much money on marketing. They're going to freeze it. their operations are kind of unwinding a little bit. I mean, there's a lot less noise in people's mailboxes. There's a lot less ring those voicemails going out. There's a lot less cold calling happening.

All those things that wholesalers did at such a huge volume, you know, previous to this happening. You know, there's just a lot less competition out there. So if I was getting into it now, I mean, it's as good as it's been, in my opinion, in the last few years. Yeah, that's really good. Really good stuff. All right, man. Well, let's head over the next segment of the show and dive a little bit deeper.

it's time for the deal deep dive. All right, let's get to the deal deep dive. Tucker, we want to get into the details on something that you've bought. Do you have something in mind, something that we can talk about? Yeah, there was a, well, let's look at a couple deals that I actually bought, we'll call it back,

I think these were 2009 deals. They apply to exactly what I'm talking about now. And so, you know, this might be a good place to kind of insert, you know, not only am I talking it, but this is what we did, right? So yeah, perfect. All right, cool. First one, what kind of property is the first deal? So just to frame it, one will be a good. We've made money on both, but one would be one I do again,

and one would be one I wouldn't, right? So people can kind of see the disparity there. Sure. So what kind of property is it? So the first one, we'll stick with the theme here. This was a classic three bedroom, one and a half bath ranch style home. It was about 1134 square feet, and it was built in 1978. And we'll call this Curtis Avenue, which, um, I guess there's a lot of people listen to the show. I won't give you the actual address, but if you look up Curtis Avenue in Portland, Oregon, and you look back to 2009,

you'll see that TTM sold a couple of homes on that street. Okay. How did you find this deal? So this was back in 2009. So for those of you guys that, you know, heard stories about way back then, or you actually were in the business back then. There were these things called REOs that came on the market.

And you used to call in romance REO realtors and tell them to call you first if they got any listings that were in absolute terrible shape, or you watched him on market for a while until they hit about 90 days, and then you started blasting lower offers at them. So this one was actually an Oreo agent that we called in romance a little bit, and they gave us first crack at it because they were going to price it aggressively. And so we actually bought it on market.

So back then you could do that pretty easily. And I think you will moving forward a little bit easier than you have in the recent past, but this was when we got off market. It was an Oreo listing. I remember those days. I was not much at romancing at that point. I was kind of just like, hey, I got some money. Do you want to give me your house?

I just like shotgunned it, you know, just the total inexperienced. Trying to talk to every single person in the room instead of going deep with the right one. But you did it the right way. There you go. How much was the property? So this was back then, believe it or not, you could buy houses for $134,000 in Portland. Nowadays, that's a cheap piece of dirt way farther out. But we bought it for $134,000.

I pulled the numbers on here. I assume you want me to go through them. But we actually renovated the house. believe it or not, for 31 grand, which is virtually impossible to do these days unless you're just painting and carpeting something for the most part. But we did a... Yeah, that's one thing we don't talk a lot about about.

It's amazing how much more expensive rehabs got. Like, it blows my mind. Because it's like, do contractors just charge twice as much as materials twice as much? Not even twice. It's like five times more sometimes it feels like. I don't know how that happened, but it did happen. Labor has gone through the roof.

I mean, our labor, I was looking at labor line items. I mean, we paid a lot less for labor back then. I think moving forward now, because like, I don't know about you guys, but the subs that we've been using for the last couple years, like, it was us getting on the phone like, hey, do you got us on the schedule? Do you got us on the schedule? Do you got us on the schedule? And, you know, after the fourth call, yes, we do. Now they're calling us. Like, you got any work. You got any work. You got any work. So what does that tell me? Well, it tells me they're going to work for a lot less money moving forward here while we're in this period. So yeah, labor prices went through the roof over the last few years. But we bought this deal for 134,000. We renovated it for about 31. And then this was in, Let's see, we sold it on 1022, 2009. So keep in mind, it's worth of inventory at that point in the market approximately. And we sold it in three days with multiple offers. And we sold it over list price. So we listed at 199.

We sold it at 208. And so we ended up making approximately 35 grand and some change on this, which for about a three-month flip, this was a great deal back in 2009, especially for the amount of capital that was actually deployed to buy and sell this thing in the amount of rehab that was done. That's cool, man. What lessons did you learn from this deal? So this one was kind of your classic, you know, speed was definitely a lesson here. So, you know, it was a quicker rehab.

We were in and out faster than you would be with an older home. It was a simple house. It was, you know, a little over 1,000 square feet. There were no structural changes that needed to be done. It was basically paint, carpet, surfaces, light fixtures, things like that. It had a standard bed bath count. So, you know, it had one and a half baths. So it didn't have a master suite, but we were selling it below median price point at the time.

Median price point was about 270,000 for Portland. So we could get away with not having a master suite and still having quite a bit of demand for a turnkey product. And it was a quick rehab for the profit and the amount spent. So back then, we kind of looked at stuff like, okay, if we spend about 30 grand on rehab, we want to make 30 grand on profit. That was kind of our metric that we used. And this one fit it. And under the timeline that we did stuff, it worked out great.

And this, just to kind of like project forward, this is. is the exact deal that we did with different numbers, of course, that sold last week. You know, we bought it for 420 and some change. We put about 65 into it, and we sold it for 615. So we made a little more, we spent a little more, but it was basically the same project in a different time period in a slightly different part of Portland, but it was the same house. Yeah, interesting. Cool, man. Last question on that, on that deal, the Curtis happened. How did you fund that one? I think that's the only thing we didn't cover. How did you? That one, we only paid $134 grand for it, So I paid cash back then for it.

All right. Was that part of how you negotiated it? Yeah, that was part of it. I mean, it was really tough. God, I made the rounds back then going to banks, be like, can I get rehab financing? Can I get rehab financing? And it was like, no, no, no.

So we raised a little bit of money. But all the REO stuff we bought back then was mainly with just the little bit of cash that I had from that first house that I sold and some other money I'd made. All right. All right. Well, next property. What was the second deal? What kind of property was it?

So the next one is basically. basically one that we wouldn't do now. And this really, you know, it doesn't fit within the box that we kind of went through. But this one was on River Road in Milwaukee. And the reason being is because this was a 1947 house. So it basically needed everything. It had funky weird spaces. You know, the plumbing was bad. The electrical was bad. It had a roof that was kind of sagging. It was bigger square footage. So obviously that costs more. But we paid 155 for it. And so at the time, you know, I was like, well, 155 seems cheap, right, for the amount of square footage. But the more square footage. The more square footage. footage you have, the more money you got to spend on rehab. So we spent sizably more on rehab on that one. I think we ended up about 83,000. We had hoped for somewhere in the 60s. We ended up at 83. So that's what happens when you buy an older house, your budget balloons. And so we ended up selling this. It took a couple of weeks on market, but we only got one offer on this and we ended up taking five grand and under list. So it didn't perform that well. We only ended up making about 27 grand and some change on it to do like an $80,000 remodel.

So this kind of goes to show like you think it looks like a great house and a great lot and it is, but it's just at the end of the day you sell it, you make money, but it just doesn't, it's not one of those you do again. You look at it and go, yeah, we made money, yeah, we turned it over. It looks great. You know, the lot's awesome, but we just didn't make enough money because you just, it's hard to buy these older houses cheap enough to do everything that needs to be done and still make money, you know, as the market's softening. And you got to think, even for people that

here, 27's not that bad. I'd do that. You're not thinking about your capital gains tax as it come out of that 27,000. Now it's basically cut that in half. Yeah. Yeah, it's earned income, right? So you're basically paying earn income tax. So we sold it for $2.95. So that was a little above median. But when you spend $83,000 in the middle, that's what you get, right? And that's, so we wouldn't do a deal like this. And this, just to kind of project forward, this is basically the exact deal that I looked at last week. that I told DeBrand, I said, I had to pull the reins in and be like, okay, it was in a good spot, but it was a 1920 something house. It had a new foundation on it, but got all the framing

was wonky. The floor plan was weird. It was going to need everything. And it just, it still was not going to be like a perfect product once we're done with it just because we couldn't fix everything about it. And so I kind of pulled from this lesson here and I said, okay, pump the brakes on yourself here, bud, and don't go buy this house. So fortunately, yeah. Yeah, that's smart. Yeah, I like the fact that you kind of like wrapped together this show looking at like what like how these five rules fit and and with the deal deep dive they fit and didn't fit a couple quick just follow up questions on that last the river road one how did you find that property and then any negotiation things that went on in there yeah so this again this was the oh nine era so we sold it 1016 2009 we bought it in

june so this was basically all a reos back then we were buying some courthouse step stuff but this was also an oreo that we bought so it had seasoned on the market i think this one was on the market for like 120 days and so we got them to take less. But I wish they hadn't in hindsight. But yeah. Makes sense. All right, man. Well, let's do like one, a couple, maybe one final, final question before we head to the

famous four. I'm going to go with this one. What are you working on now, like most to improve your business? Like, what are you working on now? And I want you to relate that to our listeners as well if you can. Like, what should other people be doing right now? Like besides the five rules, just in general, I've been improving your actual business, to running every business.

what are you doing? What should others be focusing on? I mean, just like most people, I've been really auditing a lot of our costs, stupid stuff like CenturyLink. I've been looking at the phone bill and I'm like, damn, they charge us too much money for the phone lines. And it's amazing. We called them. We're like, hey, we're going to go with Comcast unless you can cut this bill down. And what do you know? They cut it in half and we got the same plan. And then we called Comcast. We told them the same thing about our internet and they cut that in half. So, you know, we've been auditing a lot of our expenses just because it's a good time to do that. But on an actual, the way the business is running front, we're being very aware of the types of leads that we're trying to have come into our world. So we do a lot of marketing to get people to contact us.

So we've created a lot of new lists, and we do a lot of driving for dollars, by the way, but we've created a lot of new lists in areas that have 80s and 90s construction. And so we're trying to pluck those homes out of those areas that are not retail ready or, you know, slightly off retail that we can have conversations with people and hopefully buy those and have a quick buy sell. So we're really ramping up the number of lists that have that exact type of product that then we can market to and hopefully we can buy some of those and then take them back to the retail market quickly. So that's probably the biggest change versus before, you know, we were looking for just a lot of really great dirt and we were going to then build out that dirt. So we've kind of pivoted

to going back to much more rehabs and that's probably the biggest change right now. Yeah. Okay. Yeah, that makes sense. All right, well, with that, let's head over to the next segment of the show. It's time for our Famous Four. Famous Four, these are the same four questions we ask every guest every week. I'm guessing yours have changed slightly in the past seven years. But before we get to it, let's hear what's going on this week over on the Bigger Pockets Business Podcast. Hey there, Brandon and Bigger Pockets Real Estate podcast listeners. This is Jay Scott, your co-hosts for the Bigger Pockets Business Podcast. This week on the business podcast, we have Ryan Welch. He is founder.

and operator of breezy moving. And on this episode, he tells us all the secrets of how he has expanded, grown, and optimized his business, spending essentially $0 on marketing and advertising. Lots of great tips on this episode for any of you small business owners out there. Check us out on this week's Bigger Pockets Business Podcast. Now, back to your famous four. All right. With that, let's get to number one of the famous four, current favorite or, you know,

high impact real estate investing book that you've read. Ooh, I don't know. I hear there's this guy named Brandon Turner and he's got some books that are pretty good. He sucks. So, yeah. And there's also this guy named Jay Scott, who's got some books. And there's also this guy named Anson Young. So any combination of those three will probably serve you well.

All right. Good deal. Sorry, David, you got left out of this one. Oh, I forgot. There's my name David Green too. But I just met him. Oh, look at that. You know, he's not a friend yet.

That's my role within bigger pockets. I'm that. Oh, yeah, that's right. David's here too. He's just here for security. That's basically all. Make sure that Brandon doesn't get a crazy fan that wants to go hug him or something like that. I'll be honest. I don't read a lot of books. I listen to a lot of, you know, podcasts and just kind of take information. You're also making a lot of movies. Like the Born series was really big. I'm sure that takes a lot of time and you got to practice your martial arts. I hear you. And the thing called a three-year-old

and a four-year-old make reading a little tougher. Oh, man. I hear you. All right. Brandon, definitely heard you because he was here up all night with Little Wilder not sleeping last night. I can see it in his eyes. Okay, so I want to ask you about your favorite business book, but if you don't read a lot of books, do you have a favorite business podcast or perhaps a favorite business philosophy you can share with us? Yeah, I mean, traction was a good book. I did read that one, you know, for sure. There's a number of business shows that I kind of listened to, but I would say, you know, I think I told you this. years ago, my favorite book just in general, I think you can take a lot of life lessons and kind of transpose them onto business. So, like, how to win friends and influence people. I know it's

a classic, but it's, you know, business is just dealing with people a lot of times and you've got some products to sell. But, you know, if you can, there you go. If you can navigate relationships with people, everything else will kind of take care of itself. So I know there's like big overarching business philosophies that you can apply as well, but it really just comes down to how you handle people, whether it be, you know, good situations are bad. And that book, I think, really breaks it down on, you know, the science to that. I don't know that there's a human being alive that shouldn't read that book. Is that, like, good for every single person, no matter what you do? That's a very well read book. Okay. What about some of your hobbies? Hobbies? So I'm definitely not short on those.

I love playing basketball. It's kind of my outlet to, you know, stress reliever slash, I'm just kind of competitive nature. So I actually built an indoor basketball court behind my house. So that's where I've been quarantining working out. But generally, I play a few times a week at a club around here. I love the snowboard. I play a lot of golf. You know, it's just I like doing a lot of different stuff. But those are probably my three biggest. You built an indoor basketball court. What's that like? Well, it's, it's, it's amazing if you want to know. I do want to know. So basically, we have a detached garage. And then off the back of the detached garage, we enclosed that. So it's like a 32 by 32 foot, you know, area that, you know, we framed in. It's got vaulted ceilings. And then we put up a hoop and some

heat and it's custom floor. And so it's basically like your own, you know, training facility back there. That's cool. I've been, I've been, the reason I ask is I've been thinking about building my own private racquetball court here on Maui because I'm like, I want to play racquetball. It's my favorite game and nobody, yeah, nobody plays. I got a couple buddies that play, but it's like 40 minute drive to the YMCA. And I'm like, yeah. We'll have to talk about that off offline. I will say I was like, do I spend the money and do it? And now here we are a year and a half later.

I'm glad I did. So I think you should build your racquetball court. I very old might now. Thank you for the encouragement. Last question of the day. What do you think separates successful real estate investors from all those who give up, fail or never get started? That's a big question.

I think give up is probably the big takeaway from what you said there. This is not an easy business. I know, David, at the beginning, you know, we were talking about, do you grind it out or do you move on? And, you know, you have to grind it out to a certain extent in this business. You really do. I mean, some days are not easy by any means. I mean, there's always going to be another hill to climb. But I think people are, they're easily persuaded to not climb the next hill or, you know, let's

say they do a marketing campaign and they get two people that call. They're like, screw this. It doesn't work. Or they do one rehab and they pick the wrong house and it ends up being a nightmare and they don't want to do another one. You just, you have to kind of persevere, but that's with everything in life. And so I think people just in general need to learn to persevere a little more and kind of grind it out a little more to kind of get to the other side of that proverbial mountain. And once you get there, it's great. Everything you learn along the way, it's not easy sometimes, but, you know, then you can apply all that stuff

on the back end and playing in real estate, it's kind of like a, you know, your own little real estate playground. I mean, I know you guys enjoy it, obviously. And once you kind of know the rules of the game, it's not to say you still can't make some mistakes, but it's a, it's a fun life to live. Yeah, very, very cool, man. Well, David, you want to take us out and ask the final question? I would love to. Tucker, where can people find out more about you? Probably the best place. For those of you that are in this world of listening to podcasts, you can go on iTunes. The longest running show that I have is called the Real Deals podcast,

and it's Deals with a Z. And then if you're local to the Portland area or the Pacific Northwest, I have a local show. It's called the Portland Real Estate podcast. and I've got a co-host on that one, and we talk to basically all the biggest players around here that are in the real estate game. So those are probably the two places you can hear me, and then you can send me a friend request on Facebook, message me there.

And of course, you can find me on bigger pockets as well. That's awesome, man. Hey, quick question. I know this is not supposed to be the last one, but you have a local podcast. I don't know anybody else who has a local podcast, and you've been doing it for a while now. What kind of benefits have you seen out of that,

or is it just more of a hobby, or do you've actually seen a lot of business success because of it? Yeah, it's, it's been great. It was one of those ideas that I had just kind of driving in the car and I was like, huh, a local show. There's an idea. And to be totally honest, it took probably a year or two for most realtors to understand that there's this thing called a podcast app on your phone and you can, you know, listen to podcasts. But now here we are 2020, virtually everybody knows how to listen to them. And so it's been great. We've connected, it's really been great for relationship building with, you know, agents and other real estate professionals all over town. But it's also been great for our lead flow and our deal flow. So I insert an ad at the beginning of every show, right? That's like, hey, this is Tucker with TTM. We're looking to buy, you know, non-retail-ready product, basically. And so, you know, we market all the people that listen to us, both email and audio-wise. And so we have a constant stream of leads that come in from free marketing because of it. So it's been a great resource for us on that front. But also just kind of, you know,

everybody knows who TTM is here locally because of that show as well. And obviously the product that we do, but I would highly encourage anybody that, you know, is willing to stick with to put together a local show because most markets have no competition. And they're kind of starved for something that people can listen to with people that are actually in the real estate biz talking about it locally. I think it's a phenomenal strategy. I should start Maui, the Maui Real Estate podcast. Yeah, because, like, yeah, I mean, like, you don't need a quarter million people

listening. I mean, you get a hundred people listening, and those hundred might be super important. Plus, like, which is one of the benefits of being a podcast guy. I love that I'm going on this tangent now. But it's like, you get to, like, connect with people that you wouldn't normally connect with. Like, honestly, I probably wouldn't have ever met you, Tucker, or David Green here, or Hal Elrod or David Osborne or any of the guys that we've, you know, Tim Ferriss, Ryan Holiday, like, without the podcast. So even in a local sense, you want to get to know that guy that owns a 400 unit apartment complex down there, invite him on a podcast and there's a much better chance than, hey, can I take you out to coffee and pick your brain? Yeah, it's great.

I mean, the last three shows, we've had the biggest agent in Oregon for the last 10 years, the second biggest agent in Oregon for the last 10 years, and the biggest local home builder. in the Portland metro area. So like, I mean, when am I ever going to get their time for an hour to, you know, chat, you know, if I didn't have a podcast like that? So that's been great. That's so good. Yeah. So good, man.

Well, thank you for sharing that. Yeah. David. All right. Well, thank you, Tucker. I think you shared not only really good information, but very unique and rare information. Something that frankly doesn't get talked about. This is a show that you should go back and listen to again and really focus on, you know,

as we said, when the tide goes out, you see what was really underneath the water. and it matters where you park that ship. And you don't want to be in the wrong spot when that happened. So thank you for sharing that stuff. It doesn't get talked about very often. Most people like to just focus on their success, but you really went into some things that can get people burned. So I personally appreciate that.

I know our guests do too. This is David Green for Brandon, the podcast OG Turner, signing off. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress?

Here's a better question. What if you could buy brand-new construction homes, 10% below market value, and the best market across the country without making real estate your second job. That's exactly what rent to retirement does. They're a full service, turnkey investment company handling everything for you. In some cases, investors get 50 to 75% of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more.