BiggerPockets Real Estate Podcast - 393: Campus Maintenance Man to $10M in Real Estate Owned with Rick Jarman

Episode Date: July 30, 2020

Real estate investing... old school! Rick Jarman (@realestateoldschool on Instagram) joins us today to share some of his hard-won wisdom from 44+ years as a flipper and landlord in Tuscaloosa, Alabama. And it's quite the journey, from cabinet maker and campus maintenance man to cigar-puffing 64-year-old social media influencer! In this episode you'll hear tales of up markets, down markets, losing it all, getting it all back... and a tornado that wiped out 20 of Rick's 100+ rental houses. He also takes us through his rules for tenant screening, explains why he favors 15-year mortgages, and paints a picture of what it's like to self-manage such a large portfolio of single family homes (with a team, of course). Give Rick a follow, and if you know someone who'd make a great guest on the BiggerPockets Real Estate Podcast send them over to biggerpockets.com/guest where they can apply to appear on the show. In This Episode We Cover: How Rick went from maintenance guy to owning 100+ properties Selling his truck to buy his first rental in 1981 Investing lessons learned through 4 recessions Why his rentals saved him when his home building business failed in the late 90s Losing 20+ houses in a tornado in 2011 Rick's tenant screening process Why tenants' credit scores don't tell the whole story Wrapping 40+ houses into one loan Why some investors "get bored with what works" And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Podcast BiggerPockets Podcast 382: No Money Down BRRRR Investing with Josiah Smelser (Part 1, Recorded Pre-Coronavirus) BiggerPockets Webinars Credit Score and FICO  Quickbooks Facebook Marketplace BiggerPockets Bookstore BiggerPockets Shirts and Mugs MBA562 Guest Teacher: Brandon Turner- How to (Finally) Write a Wicked-Awesome Book in 100 Days or Less  Check the full show notes here: http://biggerpockets.com/show393 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 393, kicking at old school. You can't just say, well, I lost my job, I can't do this. I just ain't going to rent no more. Where are you going to live? What are you going to do? Now, you may have families move in together, but they've got to live somewhere. They're going to be paying rent to somebody or owning their own house. And another thing I always like to tell people when you're looking at property,

always remember, liars can number, but numbers don't lie. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. What's going on, everyone? It's Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. David, good to see you again. Good to see you too.

This was an absolute blast. This is going to go down as I think one of the most fun podcast we've done in a while. It was. We just got finished recording with a Mr. Rick, is it Rick Jarman? Rick is old school when it comes to real estate. I don't mean that in a bad way. That's actually his Instagram handle, Real estate old school. But he has a, he's been in this game longer than I've been alive, significantly longer than I've been alive.

And he's just a character. He just knows so much. He's had some many experiences, so much knowledge. wisdom and just funny stories. You guys are going to love this show with Rick from down in Alabama. So we're going to get to that in just a minute. But before we get to Rick and being a rental property owner and all the fun things that go with that, let's get to today's quick tip.

You know what, David? I'm going to let you take to this quick tip because I didn't prepare one. You would do that right now. I got a good quick tip for our listeners today. Today's quick tip is when you listen to Rick's story, he's going to share how he built to over 100 units and over $8 million in net worth. doing the same boring thing over and over and over. And Rick shared that he did not worry about the fears more than what they were warranted.

He would actually go out there and look at, is this worst case scenario something likely to happen or all my house is going to go bacon at the same time. And there's a lot of value to get out of one, not overthinking things. When you're afraid, it's okay to be afraid, but ask as it warranted is based on actual reasonable things that could happen. And two, don't get bored doing the same thing all the time. Success comes from the same repeated, sometimes boring efforts. That's how you get good at something.

So don't be afraid of me boy. Yeah, that's so good. Hey, you know, on one point, we never made during this show, but I'll make it now, and this will make more sense later when you're listening. But we talk about how, like, a lot of real estate success is just doing the right things

over and over and over until you're good at it. If you are somebody who gets prone to getting bored, which I know I am and David, you are as well, what we found is what works really well is find somebody else. Once you master it, find somebody else to do that job for you. Because then the same boring tactics over and over and over and over. They don't, not boring because you don't have to do them anymore. Get somebody else to do them.

and then you just make sure that they're doing them over and over and over. And that's what a job really is, right? If you really think about it, all jobs are doing the same boring thing over and over and over because somebody else didn't want to do that anymore. Now that's what you're doing. So it's time to step up and be the leader eventually and do that. So anyway, there you go. I just put that together right there.

It's really good. I like that. That's a good quote. All jobs are what somebody else didn't want to do and now you're doing it. Yes. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance

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fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport, while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications,

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They've completed tens of thousands of stuff. across all 50 states from remote cabins to apartment complexes. So if you own investment property, this is a no-brainer. So visit Cost Segregation Guys.com slash BP for your free proposal and find out how much you could save this tax season. I think it's time to jump into this thing. David, you ready? Anything you want to add before we go in?

Not at all. This is a great show. Let's bring Rick in. All right, here we go. All right, Rick, welcome to the show. Good to have you here. It's been a long time coming. And I'm glad to be here.

I've really been looking forward to it. I sure I have. Well, awesome. Because, you know, one of the reason I was excited to get you on is because on Instagram, like, you're, you're, you know, pretty active on Instagram for a, you're a 41-year-old guy, I think is what you said. And so you have a fantastic Instagram with tons of good advice. It's real estate old school is your handle there. Very entertaining, very just good, solid advice on rental properties and what it really takes to be a successful owner. So that's what we're going to dive in today. What does it actually take to be a successful real estate investor with rental properties. So before you had 100 plus, you know, houses and all that crazy world we're going to get

to, how'd you get into real estate? Like, how did this thing start? Well, quick story on it. Right when I came out of high school, I was working in a cabinet shop. The summer before I graduated high school, I knew I worked doing construction, building houses, and I found what I love, what I wanted to do. And basically, it's all I've done. My entire life is into construction and, you know, maintenance and flipping and, you know, remodeling, just everything. But when I was putting my wife through college, I was keeping up rental property for other people. I worked for 10 years of maintenance at the University of Alabama from 174 to 84 and was doing my thing on the side, you know. And so I got to notice and, you know, working on these people's apartments and houses that there's something to this.

So it kind of piqued my interests. And so I read an article and will date myself in Reader's Digest. It was called beating inflation with real estate. And this is late 1980, early, well, what he made he won. And my mother had asked me, she said, what would you like for Christmas? Well, I had, you know, I was married, two kids, and you know how it is, and working on a job and side jobs. I said, well, there's three books that were listed in this article I read,

and I would love to get those three books, and that's what I did. And that was the first books I ever read on real estate, and I actually keep them in my bedroom between a couple bookends where I can look at them every day. That's awesome. What were the books? One of them's name was, it was by William Nickerson. He's probably the granddaddy of all the real estate folks. They got to meet him one time.

It was how I turned $1,000 or $5,000 into a million. And later on they renamed it to $5 million. And one of them was Albert J. Lowry, how to become financially independent, you know, through real estate. And the other one was Robert G. Allen, nothing to. them. And they all came out around 1980, the issues I bought. Nice. Yeah, classics. That is old school real estate books. That's awesome. And later on, I got into Mark Harrison, you know, I don't know if you've ever heard of him. I actually, the only seminar ever went to my life was in the early 90s in Orlando, Florida. He put on, but he was real big for a while. He'd have people like

Brian Tracy and all these guys come, you know. They were all young then. Yeah. Yeah. Yeah. Yeah, Brian Tracy's not young anymore. No. Neither. Yeah. So what happened next? Where did you go? You decided, okay, I got these three books.

I'm going to take some action. What did you do? Yeah, well, I ended up buying my first rental house in 1981. I was working with a guy that was going through a divorce, and he had a house that he was going to sell to me for $10,000. It was worth about 20 at the time, the two-bedroom one bath. And I didn't have any money, you know. I'm just, you know, like I said, just paying for my wife's schooling and, you know, life things.

So I went to my credit union and I told them about the house and they told me if I could get the money for the repairs and pay for the closing costs, they'd finance it for me. So at that time, like I said, this was 81. I had a 1979 Ford Ranger XLT truck that was nice. I'm talking about a good looking truck. Well, I sold my truck, got my equity out of it. I went and found old 1969 Plymouth Station wagon at the tailgate would fold down like a truck

I knew I could work out of it and got it for $600. It had a loan value of $1,200, so I borrowed an extra $600 and got the money to fix the house up and that was my first rental. That's awesome. That's awesome.

Like, here's what I love about that. I mean, it just shows like if you really, like, it's that old quote, if you really want to do something, you'll find a way. If not, you'll find an excuse. Right. I think Jim Roan says that, David Green, not me. And if you really want it, you'll find it. Like, you figured it out a way. And the same thing applies today. I mean, maybe like, is there a car you have to sell or is there a some other way you got to sacrifice over time? You've got to work to be able to get that first deal. But you can't

get wealthy if you don't get the first deal, like the real estate. How bad you want it. Mm. How bad you want it. All right. So what came next? Well, bought my second house. I got 100% owner financing, and I kind of got broke in early in this game. My second house, I had a fire, and they wanted to total it. I found out, you know, back then you didn't have all the things you have now, checking credit and all that. You know, they fill out application. They look good, and they got the first month rent and deposit.

And I was so green. I was green as a cucumber, man. I didn't even know to check the past references or whatever. So I rent this lady. And at the time, my wife had had some. surgery and I'd been working and seeing her at the hospital and got home, got in bed, and I get a call from the neighbor next door, and because it's four cell phones, of course. And she's telling me, Mr. if you won't see your house before it burns down, you better get

down here fast. I mean, and I'm trying to get awake, you know, and I said, do what, do what? Of course, I had two houses, so I wasn't sure which one, you know. It's 50-50 of which one it could have been. And she told me, and come to find out, it's good. guy kind of get drunk and he'd like to beat on his wife a little bit and she tried to burn him up you know that's what i heard i didn't share that with anybody at the time you know i just went on and they wanted total it and i said well i think i can fix it so i had a friend of mine had a contract

license and he put a bit in for me and i did all the work and got it going you know i was come from that working background wow okay so you got started with a little bit of a a hot beginning Well, it actually started out worse than that. Right before I got out of high school, I was engaged to be married. My wife and I've been married 47 years. And so I just turned 18, but I'd paid down on a trailer, bought a piece of land, the owner financing, 500 down, and he financed it. And so I'd put a septic tank in and water meter.

I'd be working all my life, you know. So anyway, we're having graduation practice, you know, I guess they still do that. You know, we practice. So they were supposed to deliver my trailer. So, you know, we're waiting and waiting and it hadn't got there yet. So me and a buddy of mine rode out to the main highway to see where it was. If we could see it.

We saw it all right. It was scattered all up and down the highway. An 18 wheeler hit it when it was turning and just totaled it. You know, and I'm thinking, man, have I still got the Pafist thing? Because I'm just 18, you know. Yeah. And so they told, don't worry. we'll have you another one in two weeks. It was like two months. So we had to spend the first

couple months of marriage living with my parents. So my real estate career started off rough. I'm curious, when you were getting started, a lot of people today assume this is a scary time to get into real estate. But my assumption would be everyone's always thought this is a scary time to get into real estate. And we don't get to talk to me very often to have as many units as you do and have done it as long and have seen the highs and the lows. Can you tell me what your mindset was like back then when you were getting started as far as your fears, concerns, emotions? Well, you know, I came up real poor. I'll give you a little history. My dad was World War II veteran. He had a complete mental breakdown when I was three years old. And for about nine months to a year,

we were homeless. My brother went and lived with one family. My mother and I lived with another family her sister. And so we grew up working, had to work, you know. So everything was one of those deals with, you know, everything just looked up. You know, I always had the attitude, you know. My mother raises us as good as anybody else. Everybody puts their pants on one leg at a time and just to work hard. And so I grew up working. So the opportunity to me was always to better myself. I like to tell people, you know, that fear, you can take that fear. and you can let it cripple you or you can turn it into a motivator. And for me, my fear was I didn't want to be poor.

You know, my parents were poor, my grandparents worked. I wasn't going to be poor. So what about the fear of losing money? Well, I just didn't have that, I guess, because, you know, when I was working at the university before I left, I'd worked at 10 years when I left. I went in business for myself. I just turned 29, built my first house.

and when I acquired about four or five houses, some of the guys said, what you're going to do if they all get empty at one time? I mean, it just wasn't going to happen. I mean, so people were asking that question back then. Oh, yeah. I mean, yeah, you know, what are you going to do?

And I'm thinking, well, how often do you get asked about toilets? Yeah. Was that around for a long time also? Oh, yeah. Oh, yeah. Yeah, Brandon and I joke about that because everybody wants to know about like clog toilets,

but that's not really the problem landlords get the most stuff. I was doing a live Wednesday, tonight with a friend of mine that lives in California that I've met on here. And we got to where we do a live every Wednesday night. And right there in the middle of it, I forgot to cut my phone off and the phone rings. And the way we work it, I'm on call one week. My son's on call in my office manager. We had a main sewer line stopped up and I said, y'all, hold on, man, I got to handle this, you know, because they wouldn't need some direction from me. Because we do self-manage. We manage our stuff also. Yeah. So tell me, what's your portfolio at now? We're at about a hundred,

18 houses right now. In 2011, Tuscaloosa, where I lived, Tuscaloosa, Alabama, had a bad tornado, and I lost 26 houses totaled in a commercial building. Wow. So it took a little while to regroup, you know. 26 houses in a tornado? Like, that's total. Wow.

So I had damage probably 70 more, you know, so. So insurance takes care of that, or did you lose a lot of money? Did it? Luckily, you know, but it just, it doesn't happen overnight, you know. It was a total close to three years getting squared away completely with them. Yeah. So, you know, if you think things aren't going to happen in this business, you're wrong. Yeah.

It's so funny that you say that. I was reminded of a Tony Robbins quote, and I'm going to give Tony credit for it because only one of us on the show. I'm getting away with it. Where, so I've got like quite a few houses in escrow right now on the real estate team, which means every day somebody's unhappy with something. When you do enough volume, you're going to end up having problems. And Tony Robbins was saying he had to come to grips with the fact that with as many businesses as he has, several hundred employees all around the world, somebody somewhere is unhappy.

There's some fire that has to be put out. And when you're living a small life, you can really avoid unhappy people or things going wrong. When you want to live a big life where you set big goals, part of that is just accepting. If I have 100 houses, five to 10 of them at any given time are going to have something going wrong, maybe more. and you can't let that negative emotion stop you from pushing forward or discourage you from building up to be bigger or whatever you're doing. Was there a point, Rick, where you had a similar experience that you just had to say, hey, stuff goes wrong.

You got to work with it. Well, you know, I guess as you're growing, you kind of, it was an everyday thing for me, this work. For years, I did my own maintenance when I was, you know, younger. But you're growing and your houses and the numbers are growing. And when you reach a point, like I have a full-time maintenance man, my son's worked in the business with me for 20 years now. You know, my maintenance man's been with me about 14 years.

I have a sales lady's been with me for 16, the office manager for 10. So it's just, you know, it just kind of gets to be day-to-day life for you. And that was one thing when I first got on Instagram. It kind of helped me. It made me go back and rethink why I did certain things because you just, it gets to be your job and it's what you do. And, of course, I love it today as much as the day I started. people, they'll ask things, you know, and you think first, that's kind of silly.

And then you realize they have nothing to compare it to. And so for me, learning all this YouTube stuff and Instagram, go on YouTube and learn that. I can see that as people when they're learning the real estate, you know, where I stayed, I remember the first thumbnail I made. I stayed up to 1 o'clock in the morning doing it. I was so proud of myself. And I told him, I said, now, y'all may think that's funny in one of my videos. I said, but I can build you a house from scratch.

You know, I can sell it. I'm a real estate broker and I can do all these things, but I didn't know how to make a thumb now, you know. There's such a lesson in that when you do something new, how long it takes you to learn a new thing. And it kind of speaks to Brandon's point he makes frequently where you don't want to try to build 20 bridges at one time from one place to another because when you're first learning how to make a bridge is where you spend all your time.

Once you know how to do it, man, you can fly through things. And there's a quote that Gary Keller said, I believe, where he said people, something along the lines of, because I don't want to get this wrong and have Brandon jump on me because I made up a quote for someone. People get bored with doing what works. So they try to do, they try to make what doesn't work, work. And there's something to be said where if you want to get to the point where you're at, Rick, you're kind of doing the same thing over and over and over getting really good at doing that

thing. And I think you're a great example for our listeners of I'd really love to know, how did you avoid the bright, shiny object syndrome where you thought, oh, you know what, I'm going to go buy a hotel. I'm going to go buy a mobile home park. I'm going to go get into apartment investing. And instead you said, nope, I'm going to stick with single family houses and beat this process. Well, you know, I did try apartments over the years and different things. You know, I'm in a university town. So me working in university and maintenance and house and what better trained, you know, I worked in house and maintenance. I didn't like the students. I mean, they could tear an envelope.

It just wasn't my thing. So a few years ago, I sold all the student rentals I had. But I just found, I've loved houses. I always like houses. And I just found what I loved. And I just, you know, it's tempting sometimes. But just like those three books, I told you, I read two of those guys went busted. They got away from what they knew.

You know, average Lurie got into spas and stuff. And Robert Allen, I don't know what he got into. And, you know, we all sometimes you're in this business loan, if you'll go through your financial hard times, I did myself. But it's just, you know, you find what works. And when I had the student rentals, it was so much different than the time. I do a lot of Section 8. We're geared for it.

We know it. In fact, Josiah Smetler called me today, asked me some questions. And I know he was a big reason to get on here, and I appreciate him. And, you know, I just, we specialize in that, and that's what we do. Yes. This lesson is so important. I'm glad you brought it up originally, David, like that quote from Gary Keller because that's what people do like they they get bored of what works like I said I did I did

this this webinar there day and I talked about how like real estate at its core is pretty boring like you just kind of do the same thing and there's like 12 steps you just gonna do it and like the first time obviously it's hard and the second time you're lording things and it's like trying to make a thumbnail right like the like a for YouTube but pretty soon like you just as long as you're consistent with it you're going to become a multi-millionaire over time and people screw up because they just jump from some different things like imagine if If like, I'm going to use an analogy here because I'm now the analogist of the group, David. If Scotty Pippin and Michael Jordan, I don't know, did they play together?

I think they did. If they played together, like, back in the day, we're going old school here. And they were like shooting free throws, right? And they're like, you know, I don't really like shooting free throws. I'm going to back up 10 more feet and try that shot because that's more fun. I'm going to try just like this shot. But I'm going to do trick shots like over my head all day long. That's more fun.

Like they don't. They just do like thousands and thousands of the same shot and the same play. And they run it 50 times over a day to make sure that their master's at that. that play. And Scotty Pippin knew I need to let Michael Jordan be Michael Jordan. When you start competing with the person, when you want to do what they're doing, that whole dynasty wouldn't have been there. He had to be okay with doing what we would call a boring work, which made somebody else better. And I mean, I think that's a really big factor of success that isn't talked about. When we talk to successful people, if we ask them, what did you not do that made you successful?

I bet you they have a list of stuff. I didn't make this mistake. I didn't go do that. I stayed with what I knew. Well, you know, during the time, too, I was building. homes. You know, I was a home builder. And I quit building homes in 2015, because we didn't build probably about 10 houses since the recession. You know, we were able to pull back and ride it out good because I'd learn all my lessons in the late 90s. So I was a home builder and we remodeled. And, you know, for the recession, I had a 16-man crew. I like to tell folks, it's kind of like it is now. The tail wags the dog. You can't get anybody, you know, you wait in line to get work done. anywhere. So I wasn't, I'm a very impatient person, so I had my own crews. We had two framing crews,

vinyl side and crew, trim, crew, paint and crew. So we did all that. So, you know, the rental was just kind of continuously growing, as I tell folks, I live life and did my job. And that's what, you know, I hear all the time, some young, I hate to say young people and new people, because my baby will be 39 next month. So, but the first thing that'll last sometime is, well, how many houses did you have before you could quit work. Well, that wasn't to go. I love work. I don't ever.

In fact, David, I talk about you in one of my videos. I sent it to you, but, you know, I'm going to tell the story in a minute. But on David, I love to work. I hope the day I die that I made a deal happen. If not, I least collected some rent, you know. I love this business. Yeah. And it keeps you young.

It keeps you moving. It keeps you, like, excited. And, like, so many people get older. and then they just like, they're like, well, retirement, I'm going to go play some golf every day. Well, when I turned 60, I had a friend of mine. I asked him, he was at like 80 at the time. I said, why do you keep doing it? He says, well, and I knew the answer because I knew what I told myself.

He says, well, I enjoy buying them. I love fixing them up. And he says, and I like the money. Now, you know, that's it. You know, I tell people, your mind doesn't change when you, you know, you hear people say, man, I'm going to work and do hard when I hit 40. I'm quitting, you know. You're not going to work it hard and build what you got and just be willing to walk away from it.

It's if you're a true entrepreneur. I want to ask you, Rick, how the heck are you getting financing on 100 houses? Because we get a lot of questions from people that haven't even bought a house yet, and they're worried about what they're going to do when they get 10. Yeah. So let's just get that out of the way so they could go get their first house. I'm not worried about it. Okay.

Well, it starts out. You know, I like local banks. And when I first started, I used credit years, you know, credit you used to do up to four or five. but I have several local banks I did. I have one loan that started out with 56 houses on it. I give you the numbers. I paid 500,000 down on it. They financed a million 550.

It's paid down now to less than 700,000, and just all those houses are worth 150 to 170,000. And my portfolio of real estate's over 10 million. I probably owe less than 2 million. And like I said, it was just kind of my side gig, you know, as I'm working and doing my stuff. So I was trying to tell my wife the other day, I said, now you realize in about five years,

you're going to get a $12,000 a month raise and it's just going over ahead, you know. But what I decided I'd do is, like I said, right now on that particular loan, there's 46 houses in that one loan. It's with one local bank. I'm going to refinance that less than 700,000 started over. I always do 15-year loans.

started over at 15 years and the payment I go from 12,000 a month down to about 5,000. So I get a $7,000 a month plus raise and that's just, hey, but it's just different banks. You go to them and as you, you know, the numbers, you pay your bills on time and keep your property up and you just keep those inroads with the banks. I don't know if I'd answer your question or not, but no, I think you definitely did. I mean, there. I hear people say all the time, you, You can only have 10 houses with one of that.

No, that's not so. I mean, this loan I got started out is 56 houses. Hey, why 15-year mortgages? You know, when I started out, that was how you did it. And the banks, you know, that's about all they'd amortize them over for commercial loan, you know, the banks. And your credit unions, if it was an in-house loan, which that's what that would have been, was a 15-year loan.

So I just started out doing them that way and just kind of stuck with it. And I've got a video where I show the difference in the payments on the 15 and the 30 year. And if you're getting a deal up front and you're not counting on all that money, just what you think about it? I mean, like how old are you, Brandon? Just turned 35 yesterday. He's just a baby. Okay.

So if you did a loan today, you'd be 65 when it's paid for. Yeah. But you do it on 15 years. Look how many more years you're enjoying the money. And, you know, it might. It might make $100, $200 a month different, but look at all the interests you save also. Yeah.

Hey, David, what do you think on that? I mean, like, you're as an agent and also a lender. 15 versus 30. What do you typically do? And where would somebody maybe want to do 30 over 15 or 15 over 30? What do you think? God, this is such a good question because they both have their merits. I'm looking at getting another house for myself.

I'm going to house hack. And I'm going over the same question. Do I want the better rate at 15 years, which you do save a lot in interest over the life alone, 100%. but when interest rates are this low, that isn't quite as impactful as when they're much higher. I'm sure Rick could tell us stories of what he's seen interest rates over the years. Sub 3% is not very common. I don't know what we've ever had them low like this.

So then there's a part of me that says, well, if I get a chance to get 30 years at 2.8 or 2.9% then that's what I'm going to do. And we've seen we got a lot of our clients that we're doing. We can get them there. So one of the things I think about is what's your strategy. So there's, Brandon, I, you and I've talked about this. There's a strategy where you buy a house, you put it on a, 15-year note. Then next year, you buy another house. You put it on a 15-year note. And you do that

every year. And 15 years later, your first house is paid off. You refinance it, tax-free, because you don't have to pay any taxes on a refi. You live off of that money for the year. And then next year, your second house ends up paying itself off. And then you live on that money. And you just keep doing that. And by the time the last house has been paid down and refied, you're back to the first refi that you did it. You never work again, right? You just live off of that. So I really like that strategy when it comes to the 15 year notes, but if it was just as pure as do I want to go 15 or 30, I like the 30 right now because rates are really low. I like the 15 more when rates are higher. Yeah, you know, the way that I look at it is if your ultimate goal is to get out of your job

as fast as possible and get financial independence, like level one, like I can pay my bills, a 15 year mortgage costs more, right? Like you said, Rick, a couple hundred dollars a month more, maybe. Okay, so maybe if you're all, like, if you just need money right now and you got to get out of your job, I'd probably go for a 30. Like when I got started, I was going for a 30. Like, for that same reason, you wouldn't want to buy a house for cash. You wouldn't want to, like, you know, use as much debt as possible. Like, all those reasons make sense if your goal is to just be aggressive and get out

of your job. Later on, though, your goals might change. Paying off a bunch of houses sounds like a really awesome thing to me because my goal is changed. I want more security. So 15-year mortgages now it's not a whole lot better. And so I can withstand the weight a little bit. Do you agree with that, Rick?

Oh, yeah. I mean, and like, like David said, usually the rates aren't like this. and so you're getting a better rate for a 15-year mortgage. And if you found a deal, it all works out. But, yeah, like you were talking about David, I can remember because, like I said, I'm a real estate broker also. And, of course, I mainly just would sell my stuff over the years, but I had agents or whatever, sell my stuff.

I can remember, though, back in the 90s, that 11, 3-quarter fix was the best we could get people. Wow. And it was a bond issue, and they camped out all night long to get this federal bond issue. Isn't that something? But 12% of Jospa was the best they could get at that time. And these people camped out to get 11, three-quarter fixed. And people are still selling houses, buying houses, are making a limit.

It's really important to remember that, that we oftentimes fall victim to recency bias, where we're looking at everything around us and seeing this is how things are, this is how they're supposed to be. But it wasn't always that way. And what I really like about your story is I'm sure along this in time, journey, there was never a really good time to buy. There was always something that could have come up that said, you know what, now is not the time I should wait. That voice never goes away. But I would say in my lifetime, the best that I ever saw was 2009, 2010. Looking back,

we would all say, you should have bought everything you could get. But Rick, you remember that. It wasn't a lot of people saying go buy real estate right now. It was fast in the hatches, duck and cover. Who knows what's coming. The apocalypse is on the way. Don't buy anything. So there's always a reason that you're going to have to not buy real estate. But like you said in the beginning, that comment you made about inflation, that's so powerful. That's why you want to build wealth the boring way, just doing boring stuff with real estate, because inflation takes you so far both in increased rents and increased values. That's right.

In fact, like I always keep referring to my videos, but I've got one about anything you want to talk about. I've got one just about recessions where I named, since I've been out of high school, I've been through six recessions counting this one. Now, the first one was a gas embargo. when I come out of high school, you know, it lasted about a year and a half, the recession. You'd be getting gas lines, hope you had gas go to work. And then the next one, by the next five, I was in business, not for myself full time, probably four of them since I've been in business for myself full time.

And there's always things, but nothing, nothing was like 2008. Now, if you were a home builder, a real estate agent, it was tough. I mean, my agent's been with me, like I said, 16 years. she had to go to work part-time as a dental assistant. I mean, it was tough. I was fortunate enough to have my rentals to live on because, like I said, up to the recession, my whole career I built approximately 500 houses.

But since the recession, I probably only built 10. Of course, we were dealing with the tornado right after the recession ended in 2011. But a lot of people that were in the business had to sell off their stuff. Like I said, I learned these hard lessons in the late 90s. So I was able to pull back, do what I needed to do, just live off my rentals. We actually opened up an interior and antique shop to my son and his wife would have something to do because he worked with me because we wasn't building.

Because my rentals could take care of me at that time. They couldn't take care of everybody. But so I tell people now, you know, since the Great Recession, and it sounds terrible, but a blind person could do this business. I mean, it's just being going up, up and up. But what happened? You had people to come in that were able to buy stuff in 2000. 2010, 11 that the people lost during 2008 and 9. So, you know, they weren't geniuses.

They just able to get a good deal. See, the people that were losing it couldn't borrow money. You know, they were fighting battles, and the banks quit on it. Now, me, I had some private money lenders, and I was able to increase my net worth by $2 million right after the recession, because I bought stuff I knew I wouldn't keep that didn't fit my criteria. But I knew I could sell it when things picked. up, you know, it all worked out. But it was tough. I mean, you know, here in my town, they were probably

just a handful of us that didn't go out of business that was builders. In fact, 2009, I was president of our local home builders association. Worst time you could be president. I mean, when we were having our awards banquet, I told them, look around the room. We have about 300-something builders and associates at that time, all 400. They wasn't a banker won in there, except one. And he was the secretary, know, the association or the bookkeeper, whatever they call it. I said, the bankers, well, they were scared to come. It was terrible. People don't know how bad it was. So what we're going through now is so different. It's bad to health stuff. But banking wise, there's so many things that are, the banks are being, you know, the government's happening. You didn't have none of

that in 2008. It was just, they just shot the doors and banks were in damage control. So what do you state of people right now who are listening to this show going, ah, you know, the recession might be coming again. I'm freaked out. The economy's in limbo right now. I don't know what's going to happen. I just want to sit out. Should I sit out? What do you say to those people right now that are just worried about the economy? I have

a philosophy. I tell people, I said, people are going to either rent or buy or live under the bridge. Only so many can live under that bridge. So just because the market gets bad and people can't sell or, you know, they got to live somewhere. Real estate

never goes out of style. That demand for housing has always been there. It's always going to be. You can't just say, well, I lost my job. I can't do this. I just ain't going to rent no more. Where are you going to live? What are you going to do?

Now, you may have families move in together, but they've got to live somewhere. They're going to be paying rent to somebody or owning their own house. And another thing I always like to tell people when you're looking at property, I always remember, liars can number, but numbers don't lie. them two things right there. That's your thought. You know, you just got to keep going.

I mean, you can't, there's opportunity in every situation, just like there's going to be opportunities after this one. What do you think about advice for helping people find the right tenants? You know, I'm old school, of course, so, you know, I don't pay any attention to the Beacon score or the FICA score. I hear people talk about. I'm hooked up with one of the credit bureaus. we do the credit checks right there in the office.

But you can still get what I call an old-screw credit report. All you do, it shows basically the same thing, but it doesn't even talk about their score like a beacon score. You can look and you can see, you know, okay, are they paying the water bill, the power bill, the gas bill? I don't care if my tenants have medical bills. A lot of people don't have insurance, you know. If they have student loans, they're not paying.

That doesn't bother me. I check the past two landlords. you know, you always want to check to them because the one there's now maybe wanting to get rid of them, they're a good tenant. Yep. So if they do that and they pay the utilities and sometimes I don't even care if they own the cell phones

because sometimes I hate paying mine, you know what I mean? So if they're doing those things, more likely they're going to pay you, you know. And, you know, I hear people got, I don't take anybody with a beacon score, I mean, whatever, if I could score under 700, whatever, I'm thinking you're cutting you on. There's good people out there that don't have high scores but pay the bills.

Yeah. How about you, Brandon? What do you notice as far as just advice you can give to people that are looking to scale and they want to make sure they, when they're self-managing? Like how to find tenants you mean or just in general? How to avoid the wrong tenant? Hmm. I think so here that I do.

And I'm curious, Rick, of like, do you agree with this? I mean, basically, I look at real estate like a funnel, right? So everything's a funnel in my life. No, but like basically, if I'm having trouble finding a good tenant, whether I'm just not getting to apply, I look at the problem, did I either not do a good enough job advertising? Did I get it out there? Right? If people don't know about your listing, they're not going to call, right? And then if I'm still having problems, that means, is my unit up to snuff? Is it better than the average or is it better than the average? I look at that. You know, am I charging the right rent? Am I at or below or at least somewhere around like where it should be? And if not, I'm going to fix one of those things. I have never, ever, ever, ever had a problem finding a tenant ever. In my entire career, I never had a problem. I've never had a vacancy more than a month or two. Now, I've only been known this for, 14 years versus, you know, Rick, you've been doing us a lot longer. But I don't have problems with that because people always need to rent. Doesn't matter the market. They always need to rent.

So I just need to make sure that I'm better than other people in quality or in price or in advertising, marketing, one of those three things. And then additionally, I am really big on defining my criteria ahead of time. What makes a good tenant? What doesn't make a good tenant? So, like, I don't want somebody who's murdered somebody. I want somebody who has a job. I want that job to be at least for six months.

I have like these criteria, right? And then I do the same thing Rick does. We check the last two. landlords, we want to make sure they've paid their rent on time at the land, like they don't have any horror stories. And then I put my criteria out there. I get a lot of marketing and I've never had an issue getting tenants. I tell you something else we do because we do manage our stuff. And everything I have is right here in Tuscaloosa, Northport. So I tell people, I like to use contractors that do the work they sell. But you know, when you interview in a contractor, just kind of look over

at his truck and too. If he takes pride and all those things, he's going to take pride in his work. He comes driving up an old raggedy truck, gets out with it. First of all, be sure they have license, insurance, and workman's comp.

If he doesn't have all those things, or she, and they give you a bid, it may be cheaper, but what makes you think you've got to, you're going to get them back? Because that's something I hear all the time. People say,

my contractor screwed me. Now you screwed yourself. I've been a contractor since the 70s. You know, it's hard to compete with the truth against a lie, because a lot of them will lie, but you've got to pick them and check them out. Now, I got off the subject there, I apologize.

No, I think that's a great point, though. The contract you didn't screw you over. Every time I've been screwed over by contractor, every single solitary time, it was my fault. Like, it's always my fault with the contractor. Something I did wrong. I didn't check something. Yep, yep.

You didn't check something. You didn't check their license bond insurance. You didn't set up the payment schedule right. You didn't manage them correctly. Yeah, people need to stop the blame game and just admit that they didn't do something right. I will say this, if it's okay to me talk, it may be people asking, what are y'all doing different during the pandemic, you know?

So I had been looking probably six months ago or longer. It's about getting where people could go online and fill out and do fill everything and do all this stuff, you know, because we don't have all that. We use QuickBooks Pro. That's our property management stuff we do through there. I told them, the only thing we're doing different is we were, before they found out the touching stuff didn't spread. I said, we was leading the front door open.

All they had to do is walk in and pay the money. And if I had it in and didn't want to, you know, come to the office, I'd go collect the money, but I was going to get my money. Got to get the money. We just put someone under contract last night in San Jose. And he was asking me like, hey, do you think that we're going to have some trouble renting in the neighborhood? It's like, well, you know, one thing you can do is you can put a little ad on Craigslist or Facebook marketplace and see how many people apply for it.

in the 12 hours from the time you put it up till the next time we talked. He said, I had to turn it off. I had 52 notifications. And people were saying, can I please give you a deposit right now? And it's just one of those things where the fear in your head was so loud that this person was like, I don't know if I want to buy this house. Like, what if? That what if was very, very loud to where he didn't want to take action.

And then that one little piece of advice went from, I don't know if I should do this to, oh my God, we got to get this deal today. Don't let me lose it. I'm going to get like a third more rent than I was even budgeting for. And I've just seen this happen so many times where we let those fears that are unfounded be louder than the facts that would say you should go and do it. And we can all listen to Rick talk about he's been doing this since what was 81. Rick, is that when you got the first one?

Well, I bought my first house to flip in 1976. My wife and I was 21. We sold the mobile home. We bought the house. We fixed it up, lived in while we was fixing it up, sold it, turned around. I had a first mortgage and a second mortgage. Second mortgage was almost as high as the first. From a man, I sold it because I didn't have any money.

I mean, it was 100% finance, but it was through mortgages. So we did the labor ourselves. We sold it. Turn around. I went back to the man. I said, would you be willing to do it again? I said, you paid me the first time, sure. So I did it.

So all three of these, by the third house, we'd went from a little old two-bedroom, one bath that was built before right after war or two, to a practically brand new three-bedroom, two-bathes. brick house on acre of land from 700 square feet to about 2,000 and we moved like it did all that in two years fixed them up moving in and by the third house I had paid off the second mortgage of each time you I'd sell it by the third one I paid the second mortgage off had about $8,000 left over and I said you know there might be something to this but I assumed a seven and a half percent VA loan on the third one and assumed FHA loans on the first two see people don't realize in the old day

back in the day, all it took to qualify to sum an FHA loan or VA loan was two things. You had to have $45 for a transfer fee. You could have no credit. It was 100% of sumble. You had to have $45 for a transfer fee or if they held a mirror on your nose, you were breathing. Those were the two qualifications. Let's bring those back. We need those days back.

I'll tell you, man, it was good days. Well, you know, even before the recession, you could still borrow. you could buy a piece of property, you borrow enough money to fix it up, you know, get in at 100%. I mean, of course, all that changed after 2008. Part of that's what led to the recession, though, is we were just handing out money to anybody that could fog a beer, right? Even earlier, I mean, we used to build houses. You could go to bank, bar enough to build the house, buy the land, pay the interests,

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and support our show by saying you heard. heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. So I see that you've moved 31 times. Were these properties that you bought with owner financing, moved in, improved it, and then moved out?

It was a little bit of everything. Like I was just telling you, I had the mobile home in three houses. We would. And then when I started building in 84, what I would do, I'd take trades, and I'd move in the trade and sell the new house. and see I've been where I met now for almost six years and I lived in the house before that one, 17. So basically you take all them years out of the picture since 1984.

That's a lot of moving. My kids, my wife was a schoolteacher so we could keep them in the same schools on. So they'd leave to go into school. They'd come on at eating, we'd be moved. When she'd pick them up, man, we got good at it, you know. And it's just you did what you had to do. I mean, you start out. with no money because you're trying to buy rental property you're trying to borrow money

to build you're trying to borrow money to buy lots so you got to keep hustling this so but it's worked out pretty good i don't mean it as a brag but you know i tell folks where i live now there's doctors and lawyers and we got a football coach uh coach sabin lives three houses up from me the coach of University of Alabama. I tell my wife, I said, well, like I said, there's doctors and lawyers that live in here

in a football coach and now they got a redneck. I said, I'll let you in. I said, we may not be the only one to start out in a mobile home, but I know I'm the only one

ever worked on the garbage truck because that's what I did when I was 16 years old and I was a old port. I love these stories. Brandon's got a similar one. He used to sleep on a couch, all seven foot,

six of them, hanging over the top, you know, while he rented out the rooms that actually had beds to other, people. You see this pattern all the time, the people that are willing to do what others are not end up getting to live that life that other people can't. I just don't understand when people aren't willing to do what it takes. You know, when you come up poor, you've got

wants and things and you know, and you're just willing to do what you got to do. But I can tell you another little old story. I was, we used to move a lot. Like I said, and I had been in one house for about three years and we had moved. And I'm on the phone back when your cell phones, you know, plugged in, you know, they were plugged into your car and it looked like a phone. And I'm on the phone. I pull up in the driveway and I'm talking with somebody and all of a sudden I said, I don't live here no more. I'd went to my old house.

I mean, I just had moved and didn't even, I'd forgotten nowhere just, you know, that wrapped up and what was going on moved so much. I can't say I don't do that all the time. Just the other day I went on to a listing appointment and completely forgot the two folders I was supposed to bring, had to go back. Shout out there to all the assistants out there who keep guys like us and cows like us on the rails. Hey, Rick, what do you think the biggest mistakes are landlords make or property managers? I think not keeping your property up's a big one because you won't stay competitive in the market.

You need to keep your property up. Getting, you know, just not appreciating the tenants, you know, your tenant, you don't have a business without them. I have tenants that been with me. I've got one tenant. I bought the house 17 years ago, and she was in it when I bought it. I asked the other day, I said, how long you lived here? She said, 21 years. But I've got tenants being me 12, 13, 14.

In fact, young man, come in and pay this rent for his mom the other day. I didn't know his mama said, now, who are you? And he's like 19, and he'd moved in my house when he was seven. Of course, I don't have all the contact every day. You know, I still approve every application, but I don't do that. Now, if somebody comes in and there's nobody at the counter, I definitely take the money. But if my office manager leaves, I say, put it on answer. My number's not out there anywhere, David.

I just don't get. You know, I don't talk. You know, I just, I'm at that point in life. I get people, you know how on Instagram I say, I can help you grow your business. I say, I don't want to grow it. I go back to tell him. I still buy stuff. So sometimes I tell my son, I said, we're not buying any more rentals.

And it won't be a day. He says, son, come on. I got a house. We're going to go look at it. Yeah, that's exactly right. Even when you don't need them, when you got the knowledge and you like it and you get that hit and you know you're good at what you do, you're going to provide housing. I mean, you're obviously doing a good job. People are staying there for 19 years. It's hard not to keep doing it. I love that point you made. You're not going to retire at 40 because what it takes to get to where you can retire at 40, you've invested so much. At minimum, you're just going to go do it in another way, whatever is rewarding to you. With the way I look at it, I went in business for myself full-time, 1984. I just turned 29 years old.

One month, I just had turned 29. So basically, as far as I'm concerned, I've been doing what I've wanted to do ever since then. I mean, it's always been easy or whatever, but, you know, I had to punch a clock for somebody else for like 10 years. And my son, he's fortunate. He's never had to do that. He's been in this business.

He was raised in it. and he's been in full time since he graduated high school in 2000. Rick, where do you find deals at today? Where are you finding? You know, I find a lot of deals on the MLS still. Because so many times, and David, I'm sure you agree with this, so many real estate agents, I tell anybody, I think it's good to get your real estate license

if you want to do this business full time and buy rental property, but you can never start thinking like a real estate salesperson. You've got to always keep thinking like an investor. So a lot of times there's deals out there. They don't have a deal across the front of it, big sign, because, you know, you got to know your market and know what you're looking for. But the agents are thinking selling a lot of them. They just won't make that sell.

And you've got to constantly always think about it as being an investor. So I get a lot of them through that and off market too. That's your reticular activating system. So the person with a hammer, everything's a nail. The agents have trained their brain to see listing or buyer opportunity and it's even if it is staring them in the face they miss it and that goes for a lot of things in life when you get used to looking at just one goal that you have that's a really good point i like that that you're even if you're if you're an investor and you become an agent you got to keep

reminding yourself you're still looking for deals for both yourself and clients when i got license that's why i did it i thought it helped me find more deals i sold part-time for a year so i actually quit two jobs and one day when i went full-time i'd been at university 10 years and i had been and selling real estate part-time a year and doing my side work also. To this day, I only sleep six hours a night. I mean, I was like four hours, six hours. You get used to it. You can't do it.

But I come in and tell my wife one day, I'm fixing to do this business full-time. I'm going to build me a house. I'd never built a house for then. And we had two babies. And, you know, she's always been supportive. She's never been involved in my business, but she's always been real supportive.

And that meant a lot. Yeah, that's cool, man. All right. Before we move on to the next segment of the show, I'm curious, what do you need in your business right now? Like, what could help you out? What could have our listeners? What kind of value could they bring you? Are there anything specifically you're looking for? I just want to go and follow me on Instagram. You know, I'm not, I retired from building. Like I said, 2015, I turned 60. And that has helped me because it's hard to pull back. You know, you want to keep it.

David, you asked earlier, you know, about the fears and don't take this wrong. But I came up so poor and things were so hard. You know, I got married at 18. You know, we were married seven years before we had children because I wanted to get a house. We were doing that. Put my wife through college. Put my daughter through college. Luckily, my son's like me.

He just wanted to get his carpenter certificate and come, you know. So I was always kind of fearless. You know what I mean? I didn't have that. My fear was not the fear of the unknown of the business. Like I said earlier, my fear was the fear. was the fear of failure. When I was young, I'm a pretty big guy, you know, eating the, you know,

but when I was young, I come out of high sky, six feet tall, 249 pounds, and construction and all I did. You know, people say, what are you scared of? You know, he said, I ain't scared of nothing. But in reality, I was scared of failure, and I could talk about that now, but back then I couldn't. So that was my go-to thing. I did not want to be a failure.

And I became fearless, you know, because I didn't want to be poor. Yeah. Yeah. I don't mean that any way bad. I mean, I'm just sharing, you know, but the thing that Instagram has helped me before I got on there, I had nobody share anything with, but my son. And when I got to doing that and people,

and it's the ego thing too, you know, people like you and they like what you're doing. And, you know, I just want that to grow. I just enjoy it. I tell them I don't do a lot of DM stuff and all that. And I'm kind of like David. You can only get back to so many people. But I try to share it through my videos, and I tell them it's not one time in there.

I'm trying to sell anything. I just won't help people. But I will tell you this, David, I bought your book because I'm all the time telling folks, because I've been doing, I believe in that Burr Method, even when I didn't know what was called. That's been the hardest thing for me to learn all these abbreviations. So I bought your book the other day because I've been recommended. And I'm always telling people to go to bigger pockets. But to give you a good example, I mean, literally I've had to learn this stuff

because I say, what does that mean? I had a guy that usually what I try to do when somebody starts following me, I always try to say, thank you for the follow. Well, a lot of times, I guess they think it's automated or something. One guy, come back and he said, because he asked me something, and he said, well, I just didn't know. I thought you was a bot. And I'm thinking, I find it.

Buddy, I don't know what you're talking about. And he said, a robot. I mean, I don't. You know, I'm old school, boy, all this stuff. I mean, that's been the hardest part, like I said. But it didn't stop you from taking action. I think that's what's so cool about your story, Rick, is you have a mentality like, what do I have to lose?

And because of that, you're successful. And I really wanted to highlight it for the people that feel like they have something to lose, sometimes the fear of I can't take action because what if I lose stops you from what you could go get. And because you said I was poor, I had nothing to lose you. I just went, did it. Well, now look at where you got. $10 million real estate with $2 million of debt.

I don't think there's anybody here who'd be mad about being in that kind of a position. It's a really good lesson forever. Well, thank you. I tell you something that it's kind of the answer to what you said. You know, we're all talking about what people say to you, like, what if they all get baking and all that? My answer to people, when I went in a bit, when I was leaving my job, like I said, I'd been there 10 years. I was vested. I took the money out there because I knew I could do more with it in real estate.

but they would say what you're going to do if you fail well here's been my philosophy you get a house you get a job and you get a car you got the same thing everybody else's got and i've had my failures you know but you just got to you know you either pull the cover over your head or you get up and lace your boots up and get at it wise well with that let's head over to the next segment of the show our deal die All right, Rick, you've got a hundred and some properties or houses now, but we want to dive into one particular deal that you've done and ask you a series of questions about them. So we're going to fire a bunch of questions at you. Number one, what, by the way, do you have a property of mine, something we can dig into?

Yeah, if it's a flip, you know, when we quit building, we try to flip about 12 houses here because I still have the office. And if it doesn't generate enough money through the sales of real estate with my agent and I still have my son's house. I read my office manager, my maintenance man. So if we don't generate enough money, it comes out of my rentals. I don't like that. Yeah, I don't like that either. Okay. So I got a flip I did.

I love it. So what kind of property is it? What kind of property type? This is a single family, which is what I do. And you want me to tell you how I got it? We'll ask you. Okay. So the next question is going to be, how did you find that deal?

Okay. I'm glad you asked that. This is a good story. I've got this private money lender I've been doing business with for 20 years Now he loves to go to state sales I love go to state sales And I've got a video about just telling people

It's a good way to find houses Something's going on when there's the state sale Somebody's dying going to nursing home whatever He called and said man I was at a state cell A day and they're going to sell the house I said we'll see what they take for it And so he negotiates the sale He buys it for 90,000

So he's going to be the private money lender plus basically he wholesale it to me. That's another word. I didn't know before we got on here. It was the sign of the contract. So he closed on it. We turned around right back. He closed.

He soaked me for 95. But here's the thing. He says, I'll finance the house. I loan you $30,000 to fix it up with. And what he does is you got two years to make it happen. I said, that's a deal. So I bought it for $95,000. I put $32,000 in the house.

Now, you want to go ahead and tell everything. about it or yeah well so we got how much you find it how much was it negotiation we talked about it for 95 000 all right he loaned me extra 30 to fix it up with so i'm in it for no cash i end up spending 32 000 with some closing costs and whatever quick as i got the house finished like three days i mean really two days time we got to sign up we had multiple offers of course i sold it for 189 000 i paid uh 5% sales commission, which 2% come back to my company because I owned a house in a separate company. So Jarman Realty Construction made 2% and the other company made three.

So the commission was like $9,500. I paid $4,700 worth of closing. So when it's all said and done, I mean, it took about 60 days. We got a check at the end. We netted $48,705. Wow. Only a $95,000 house. That is not a bad flip.

That ain't always like that, but, you know, it was a good one. So to kind of wrap up the deep dive, like, what lessons can you pull out of this deal that'll help, like, listeners? Like, what can you teach about this that applies? I think you, it's good to have a private money lender lined up if you're out doing business in case you don't have the cash or whatever. Because you've got to act fast. it's just like my house here where I live I was at for 13 years we had a condo at the beach

me and two other guys and Gus Shores Alabama on the beach and we didn't rent it every third week was your week so anyway I never spent a full week down there in 13 years I'd tell you I like to work

a few days I'm ready to come home like old David there I tell you got watch that video I talk about you Dave but anyway I want to see the video I said that David Green reminds me of me he likes to work

he likes to get it But anyway, I'm at the beach and this house where I live, they'd been marking it down. The people had already moved. And anyway, long story short, I tell my wife, if I can get it for X amount of dollars, I'm going to buy it. So we call them and tell them to look, we want it, made an offer anyway. And I'm out of town. And he's the guy that's my private money lender. I called him and said, you know, would you ride by and look at this?

Would you do this deal? He calls him back. he said, look, if you don't want it, I'll give you $50,000 over what you're looking at right now. So you can act on it fast. But when you've got to go in and wait on all the banks and everything, you're going to miss the deal. Yeah. So line you up some outside financing. So I love that tip, Rick, but I want to expand on a little bit here with you and ask you, like, how does somebody, like, you kind of have that mentality of like, just, you know, it's a good deal.

I'm just going to go for it. Like I don't, you don't seem to be stuck in analysis, paralysis very long. But a lot of our listeners are. How do you get over just, is that just coming with years and you're doing this? Or is that another mental thing to get over trying to be perfect? I never had it because, like I said, I come from the, you know, the working background. So back when I first started, you didn't have home inspectors and whatever. I mean, with my very first house that my wife and I bought at 21, we're not in it two weeks.

Central heat and air goes out. We're sleeping in the screened in porch in Alabama and 102 green heat at night. you know, but you just, but it was a good deal. I knew I could make money on it, so I saved up enough money while I'm doing it to put new cindering there and we still made money, you know. I think you've got to, I tell people my videos, if you're looking at a foreclosure, you want to make your offer neat and clean, you know, cut out as many, have an inspection, but don't make all these contingencies, this repair, that repair.

A lot of times I get a deal because all I tell you is giving me a deal. eating the title insurance, and I take care of everything else. And I'll tell them I're closing seven days. Well, you know if you're ever bought a foreclosure, you can't even hardly get an answer in seven days. But it gives them that. So you've got to make, it's that least path of resistance, whatever you're doing. And that's important because you're looking at it from the seller's perspective and you're

saying, how easy can I make this for them to just say, okay, fine, you can take it? The minute you jump in and start saying, well, I want this and I want that and I want this too. The natural human response is for them to go do the same thing back. Okay, well, then I want more money and I want this and I want that. And now you get yourself into a complicated mess. And it usually is, it's coming from the place of fear. What if there's some rot on the house? What if one of the pieces of wood is bad? And when those get out of hand, you can easily create a situation for yourself that's not in your best interest as opposed to, I'm getting a great deal. There's a ton of meat on the bone. Let me make this easy for the seller so that I can close and not make them want to make it more difficult

to. Zach, that's what I meant. You said it well. Well, you know, if you live in the South, every house got any age on said termite, so you can't be scared of that. I mean, they don't just come and stay there and eat the whole house and falls in.

They come and they go. It's just, you just got to keep, you know, the more you learn about construction, houses, and the big thing is finance. And I don't care what it is. This business is based on financing. The more you learn about, not where you're a real estate agent, a flipper, or buying rental property.

You've got to learn financing. That's why I use that analogy all the time of like if you have a tool belt and you have a lot of tools in that tool belt, you can take out a lot of projects. But if all you have is one tool, you can't do a whole lot. So like build up that mental toolbox of these are the different financing options I have. Here's how hard money works. Here's nine hard money lenders in my area that I built relationships with. Like having those options gives you so many more options on what you can do with real estate.

So, yeah, if you're somebody to listen to this right now and you, like, don't have any money whatsoever, it doesn't, like, go out and make those, like, fill your toolbox right now. You don't need money to fill your toolbox. Start building relationships or getting an idea of who does what, how you can put things together, meeting people. Yeah, that's how you're-based. I bet your neighbor Nick Saban would agree with that, Rick. He'd tell you, I got different tools I can use in different situations. That's why he's a good coach.

Well, let me tell you this. So when I've lived here almost six years, I see him coming and going. Now, his wife has been down there talking to my wife. I tell folks, he doesn't run. down here and ask me who to play and I don't run up there and ask him about real estate. But I will tell you this, when I bought my house, I was remalling it. And everybody, when they found out I lived, you know, he's two houses up. He said, do you ever see him?

I said, yeah. He came down there the other day. He was talking. I said, look, I don't have time to talk. I got to work. And they said, really? I said, no. Because this is an Alabama.

This is a football town right here now. Yeah. But I like to see him win. It helps my property values. keep winning because I'm not into all that they're going to work that into bigger pockets insights who's expected to be the top

college football team and how will that house property values everyone's looking at the high school draft class to figure out where they should go invest next there you go that's why I tell them I don't care if Auburn wins the state championship Alabama's good for Alabama because I'm into music like you Brandon I was a musician all them years

in fact I played six nights a week my senior in high school in Mottay in us my wife's brother's band. That's how I met her. That's awesome. Would you play? I play guitar, but I went to Bluegrass in 1974, and all I did is Cuska since then. I play the Dobro Rezafonic guitar. Wow. It's awesome. Well, we need more videos of that on your Instagram. That's what I think we need. Okay. But before we get there, before people go check out your Instagram, I think it's time to slowly wrap this show up by heading to our Famous Four. All right, but before we get to the Famous Four,

Let's hear something else you should be listening to as soon as this episode ends. Hey, guys, it's Felipe from the Real Estate Rookie Show. Last week, we had Rubin on this show, who's got a full-time job, five rental properties, and has figured out how to automate all of it. He also talks about how he took over someone's loan that was in pre-foreclosure, got them money, made himself equity, and is now living in the property, and is using his rental income to buy his forever home. What a great show.

Make sure you go back and listen. All right, so make sure you check out of that episode. and now it's time for our Famous Four. I did it twice, do that. You like it? Guest, Mr. Rick Jarman. Are you ready for The Famous Four? Can you handle this? I think so. I hope so.

All right. Number one. Current favorite real estate-related book. Current favorite real estate related book. You know, it'd probably be the Burr Method, even though I hadn't read it yet. You recommended enough. The reviews alone were enough to make you call it favorite book with that reason? Yeah, well, you know, I hadn't read a lot. Like I said, about last year

something I've been working on some YouTube and Instagram, learning all this stuff. In fact, somebody asked me, what's my favorite? I got to look at one of my books was, you know, Robert Kiyosaki and Donald Trump wrote a book together. And I got to look at that for 13 years ago. So I read a lot, but I just don't read a lot of real estate. But it would probably be the Burr method. I hadn't read it yet, but I know it's going to be good. That's how you know you wrote a good book. That's right. Well, it's because that's a good title.

And Brandon came up with the title. So that doesn't tell you guys something about marketing. Brandon, I'm going to buy your books too now, buddy. Oh, you better. You better. You got to buy one of his coffee mugs. Get one of those squawk like a bird. Squawk like a bird.

There you go. All the profits go to the Hawaii Meat Society. Is that right, Brandon? That is true. They do. BiggerPockets.com slash shirt. It should be slash mug. But it is slash shirt.

And you can buy yourself a shirt or a mug with Stuart the bird on it. All right. And there's a very funny video on Bramette. on Brandon's Instagram of him trying to make a video and Stewart flying in the middle of it coming home and just like hanging all over his shirt. It's,

I was laughing out loud. Like it, yeah, this is an L-O-L-L-Mee laugh out loud. It does, but you never do. You never do. L-L-L,

like literally laughing out loud because we just put L-L for nothing. Don't get me going on in abbreviations. All right. So do you have a favorite business book, Rick? You know, I do. And it's when,

like I told you, I went through some hard times in the late 90s. You know, I went from being, have borrowed millions of dollars to where I couldn't get a $1999-pager finance. So it was tough. And I read a book. It's by Tramacrow, Master Builder.

And he, I don't know if you're familiar like with the Lincoln properties and Tramacrow properties and all these things. In fact, I recommend this book on the first podcast I was ever on. The guy went and said, man, that book's $80 because you know,

it comes a lot, but it's like a textbook on most. But what he does, He had all these different partners that none of them were related. He was like a spider in the center, and it was like a spider web. And like maybe I'm doing something with Brandon. I'm doing something with David. And they have nothing to do with each other, you know.

And so I started that because I had accountants and lawyers and even private people that knew I knew how to make money and what to do. So I'd do business when we set up companies. And that's how I came back, you know, because I could take my money. I was making and buy. rentals and half of something's better than nothing, you know. They put up the money. I'd be the talent.

And it reached the point. A couple of them said, man, you don't need us no more. I guess we're not going to do business. No, man, you were there when I needed you. I keep doing it. In fact, one of my buddies who's an appraiser, he and I've been doing stuff together since 1987. You know, I built his office.

I did a video about it and stuff. But today, the only partners I have are my son and my accountant, who's also my my nephew, he and I on four houses together. But working with partners, I did a couple videos, how I did that, and it's good. That book helped me lay out some groundwork. Very cool. I had not heard of that one. So we know you love to work, which is awesome because I do too.

So when you love working, it doesn't feel like work. But what about hobbies other than playing bluegrass guitar and hanging out with Nick Saban teaching about football? Yeah. Well, I tell you know, I did a very big. videos, I'm always telling you, I told folks that says, I don't, people ask them what I do for fun. Well, I do, I play music. I don't hunt fish. I tell them, but I do hunt them George Washington. So that's, that's about the only hunting I do, you know. I don't know why I'd tell you.

I mean, I'd love to do family things. I love to travel. You know, of course, I told my wife, I said, here we're in a position. We're ready to really start traveling because that was one reason and we sold our condos where we could travel, and it was like three years ago. And then, you know, got grandkids always doing stuff. We couldn't get down there because of grandkids. Because I got four grandkids,

15, 10, 5, and less than two years old. So I want to travel now. We're in the pandemic. Yeah, you can't travel. I was stuck here to house. Yep. But hunting George Washington, that's a good hobby. That is a hobby.

All right. Number four. Rick, what do you think sets apart successful real estate investors from all those who fail or they never get started or they just give up? No quit mentality. You know, you know, you just can't quit. You just don't give up. You know, it's like those saying you might lose the battle, but you got to win the war.

Yeah. Yeah, because as long as you're learning from your losses, then they're not really losses. You're getting one step closer to winning. I will tell you this. Kevin, you know, sent that little list of stuff to fill out. Like here's how old school I am. My office manager was going out of town, and our scanner was messed up.

She's going on vacation, and he sent me the list. I'm thinking, I'm just going to have to handwrite it, and I have my wife to write it because I tell folks, I can't spell, but I can add like hell. So I had her to write it out for me, and I took pictures of it and sent it to Kevin. But one of the examples are something, I was afraid you're going to ask this,

where do you see your career in 10 years? I'm thinking, well, I'll be 70 5 years old. I don't know where it to be. Hope I'm doing what I'm doing now. There you go. All right. Well, last question of the day. People want to know more.

Where's your preferred place for them to find out more about you? Instagram, real estate, old school. Just come and follow me. I try to throw out a video, like I said, four, five, five, six a week. And I don't do any mentoring. I just try to share it through my videos. There you go. And I don't want nothing from anybody just to come follow.

I tell folks now when I write me a book, I'm going to try to sell it now. I'll be like you big timeers then. Rick, if you write a book, I will buy your book and I will try everyone else to buy it. It's actually my favorite real estate book, guys. Rick's new book is actually my favorite book of all time. I haven't read it yet. I just know it's my favorite real estate. Every time from now when somebody asks me my favorite book is, I'm going to say Rick's a new book.

Rick, you're going to need to give us the name pretty soon. Is it going to be called Real Estate Old School? Yeah, I think so. There you go. Now you have to worry well. Like maybe after you buy your first piece of property, you know, with things, I wanted to be really prepared you for it. I love it.

Do it, man. Well, with that said, we're going to get out of here. By the way, Rick, and for anybody else who cares, I once wrote a, or I did a podcast for another, like for a guest podcast for somebody else on how to write a book in 100 days. We'll put a link to it, the show nuts at bigger pockets.com slash show 393. If you want to learn my tips for writing a book,

anybody listening to wants to write a book, can learn how it's worked for all for me. I came to Brandon when I was going to write my first book, long distance real estate investing, and you gave me incredibly good advice. It was very, very helpful. Well, that letter I sent the first one or the second when it got lost when I was filling out all that.

I told, I said, Brandon, I got an idea for a book. Man, I'd like to talk with you. There we go. Now I'm going to send you a podcast, and you're going to go listen to it. Like I can turn anything into an analogy. Brandon can turn anything into a book.

I mean, I'm still waiting for you to get into the competitive eating space and blow Joey Chestnut away how fast you can eat and then write a book on how to eat fast. Fastest eater in the world. Well, I won't say this, guys, like this, for me, it's been like being on the Jimmy Fallon show or whatever because I'm still a gold setter.

And, you know, like I told you all, you all the reason I'm doing what I'm doing the bigger pockets is and uh thank you for making my goal come true of being able to be on here i have really enjoyed it and i tell you i recommend you all to everybody all the time that's awesome man it was great thank you today right it was great i've enjoyed it all right and that was our show with rick jarman i guess david you want to take us out yeah this was a great time guys make sure you go check out rick's instagram page real estate old school he is Beardy Brandon. You can watch Stuart the Lovebird climbing all over him. I am David Green 24. Also, if somebody can find that video, Rick's talking about, tag me in it so I can watch.

Apparently, he's got a video to me, which is very cool. You're the first person. Rick, you're the closest thing I got to a groupie out there, man. Don't ever change. I need guys like you in my life. This is David Green for Brandon. Best Book I Never Read Turner. Signing off. You're listening to Bigger Pockets Radio. Simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast.

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