BiggerPockets Real Estate Podcast - 428: Using Simple Conversations to Get Deals Others Can’t with Investor Rodney Ross

Episode Date: December 24, 2020

Rodney Ross didn’t have the most gracious entrance to the real estate space. He bought a house while in college, with only $8,000 down and not a lot in the bank. The house ended up getting de-authorized for tenants to live in so Rodney had to go back on his loan. Game over right? Time to give up? Not for Rodney! While finishing college, Rodney decided to take it a bit slower, getting his real estate agent license so he could build up the capital to buy rentals. He’s been an agent, a wholesaler, a general contractor, and a buy and hold investor. If it’s happening in real estate, Rodney probably knows about it! Unlike many new (and even experienced) real estate investors, Rodney took the time to nurture leads, have meaningful conversations with sellers and buyers, and found that by having some basic empathy for the other party, you’re more likely to close deals. This strategy seemed to have worked, in a decade since his first deal, Rodney now has around 20 cash flowing units, and he’s looking for more!  Using the 203k loan, Rodney has been able to get homes at a discount, finance the repairs, and get them rented and refinanced, kind of like a speciality BRRRR. This episode proves that if you care about real estate, care about your partners, and are willing to take risks, it will truly pay off. In This Episode We Cover: How to get back up after a frustrating investment How knowing about construction timelines and projects can help you get comfortable enough to do your first rehab Why mixed use properties are often an overlooked real estate class The importance of defining your role with your partner How to talk to buyers so they’ll choose you over other offers Why it’s so important to look out for the other real estate parties in a deal And SO much more! Links from the Show BiggerPockets Forums David's Instagram Brandon's Instagram BiggerPockets Podcast BiggerPockets Store Keller Williams Wells Fargo Check the full show notes here: http://biggerpockets.com/show428 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 428. They said, hey, I just want to let you know. We got your offer for 18. By the way, no proof of funds, no nothing. Like, we got your offer for 18. We met this other guy who's a cash buyer. He was like 50 places in the area. He offered us 20.

And I was like, okay, well, that's it. I'm about to hang up. She's like, well, wait. Like, we're going to go with yours. I was like, why would you go with mine? Like, well, we like you better. 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, and I got one thing to say to you,

my co-host, Mr. David Green. Merry Christmas, buddy. Merry Christmas. Merry Christmas. to you as well. How you been? You look like a slim fit young Santa Claus.

Wow. Thank you. That's actually what I've been going for. I've actually been watching a ton of the Grinch for the whole like Christmas season here. It's like two and a half months. I'm watching the newer version of the Grinch, not the Jim Carrey one, the newer one. Because Rosie loves it. And so I like to say I'm like the Grinch because he's like he's fairly thin.

But you know, he's not all the way in shape. And he's got kind of a nasty looking beard. But it's okay. Whatever. And he loves green. And so do you. I actually don't like green at all. Well, you got to pretend to when you're doing this podcast.

Okay, I love green and I love Christmas. Actually, we got a tree up like two months ago because we're like, this has been a rough year. Let's have a longer holiday season. So we like put it up before Thanksgiving. There you go. I'm sure the kids didn't mind that. Yeah. Actually, this actually leads into today's quick tip.

Here's my quick tip for you. You can choose like what you want to be excited and happy about. you don't have to rely, and it sounds like super, I know, esoteric or whatever, but like, listen up, like, you get to choose what you want to be excited about and what you want to be excited for in the future. And so in other words, if you're like, like, I was like, early as year, I'm like, I'm going to choose to just be super excited about Christmas and be all in rather than being grumpy about it.

So I'm not quite the Grinch. You can do the same thing. Choose what you want to be excited about, what you want to choose to be enthusiastic about, and then be that to your family, be that to your friends. So that's my quick tip today is choose what you want to be excited about. It's really good. You like that? I just think people always like they feel like their emotions drive them. And they do, but they forget that we're actually in charge. You can define what emotions you want to have and then you can kind of make yourself feel that way, which is cool. 100% true. Yeah. All right, man, well, I know you're not feeling super good today. You got a little bit of cold, I see.

Yeah, I'm fighting one off. But this weekend was awesome. In spite of that, we put six people under contract. Did you really? Sunday. Yeah, it was spectacular. Maybe you need to get a cold more often to get more people in contract. I don't know. balance out the force. I can't have a great weekend and be healthy the whole time, right? You got to take good with the bad. Well, speaking of good with the bad, you know, you and I are the bad. And our guest today is the good. Our guest today is Rodney Ross. Rodney is awesome. He is a real estate investor in the Philadelphia area. What part of Philadelphia? West Philadelphia, born and raised. And he is, I don't know if he's actually from West Philadelphia,

but he's investing there now. And he's got just like a cool, like, vibe to like the way he approaches real estate. It's very relational-based. He's going to talk today about how to get people to like you so they want to do business with you. How when you make an offer, and even if you offer less than other people, you may still get your offer accepted above those who had a higher price because they like you. So we talk a lot about that today. We talk about the Burr strategy, something we call Brouse Hacking, which is kind of cool, and about like financing a bunch of real estate deals, how he's done a lot of really creative, no and limited down stuff and how his first deal, he lost a bunch of money on it. You're going to learn about that today and a lot more.

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Member FDIC. All right. With that said, it's time to get into today's show. Anything you want to add, David, before we get started? Yeah, what I love about Rodney is that the beauty and what he's doing is in its simplicity. He's finding deals on the MLS. He's doing it through relationships.

He's being very open and transparent about what he does. He's putting other people before himself. And that has resulted in big wealth being. built. It's not some super secret little niche that no one else knows about. You got to outsmart everyone. Just do the fundamentals better and you can be successful, which means that his strategy can be replicated by anybody. And he gives us some really good advice on how to do it. Yeah, so good. So good. Well, with that said, let's get to the show. All right, Rodney, welcome to the Bigger Pockets podcast, man. Good to have you here. Thank you so much for having me. It's a dream come true.

Yeah, good. I love making dreams come true. Let's talk about your real estate story. How did you get started with real estate? Why real estate? What were you doing before that? And how did you get into your very first deal? So I actually learned about, I started learning about the whole concept of real estate way back in college. Like, I'm from Philly and that's where I'm at and pretty much grew up in the suburbs here. So I was going to, I was studying engineering here. And I moved in my second year. I moved in after I was like, I was on the rowing team and stuck up all my time. and energy and all that, and then stop that, move in with six of the roommates, and one of them was a Keller Williams agent. And mind you, like, he was in his fourth year. And he, long story short, like, it just blew me away that, like, you could, I didn't know anything about business or real estate or anything. And just as an agent, he was making, like, more money than almost both my parents who were working full time. And he's a part-time agent in classes. So he's one of my

best friend today. He just gave me this book. So he he gave me this book called Rich Dad, Dad, Poor Dad, which I'm sure obviously you guys heard about. And it just fascinated me so much. Like, I read the whole thing through in one sitting because I thought I was going to just follow the traditional like, all right, I'm going to do my college, be an engineer, make money, and whatever. And then that just changed everything. So that was actually 19 then. I read that book and then I'm like a I'm kind of like a high risk personnel now you're like ready fire aim so I took a little bit of money extra money in student loans and I actually bought my first place right before I turned 20 and I lost everything oh no yeah it was basically it's like a little single

family section eight rental in southwest Philly and I put down $8,000 and took over this guy's mortgage which I'd read about in the book I'm like yeah cool I can't qualify for the one, so I'll take over this guy's mortgage. And then everything went horribly after that. The section eight payments stopped the month after I bought it. The tenant actually ended up dying in the house, believe it or not, a couple months afterwards. And then the son who was there, like, he started threatening to sue me because he tripped for something. So I just let it go. I gave it back to the guy. I got a thousand bucks. So I pretty much lost everything but a thousand bucks and then I got my license year afterwards in 2010 and then started selling you know graduate in

2012 finally was able to start buying stuff again like in 2015 and then in 2017 that's when the whole like you know it's growing into it so I want to go back to this first deal this is fascinating knowing today so a couple things that went that went crazier there right like section 8 stop pain at some point is that because the person got off the program or they stopped you know it's because the lease renewal happened to be a month after I closed and they had to do their buy annual or their annual inspection and then I failed and I didn't have any money because I spent it all buying. Yeah, this is something interesting.

A lot of times people talk about Section 8, you know, like for those who don't know Section 8, which is the, they have a new fancy name for it now. Everyone still called the Section 8. But yeah, it's like this program where the government pays the rent and so, or at least a portion of it, right? So investors tend to think, oh, amazing. Like, this is going to be great. Like, free money from the government.

There's no risk. The truth is like, yeah, I mean, I like section 8. I have some section 8 rentals still, but I've had very similar bad experiences where like one of mine was the section 8 stop paying because, and this one wasn't necessarily my property's fault, but the lady refused to allow in the inspectors because she thought they were government spies. Well, if they can't inspect, they won't renew their voucher. And so like, we ended up having to evict her and she ended up threatening us with our like saying she was going to shoot us. And it was, it was like, it was messed up. So section 8, first of all, doesn't guarantee money for sure. Like there are still our conditions. But what I want to know is, like, knowing what you know now, you bought this property, basically subject to, and it just didn't work out.

What would you do differently today? Do you think you could have salvage that deal based on the knowledge you have today? Or is that just going to be gone, no matter what, just because you had no money to go into it? Like, what would you do? I think it was probably doomed from the beginning unless I, the only way I could have made it work is to have had a little bit more money to start with because, like, I only had, like, $10,000 in the world was, like, everything on the planet. and I borrow a little money from the ones to get that much. And so after I, I didn't have money to do the repairs to get the Section 8 back up the running.

But I think I was, so like if I had had that extra money, probably, but I was still kind of upside down from the start. It would have been like salvageable, but like the mortgage balance was like $50,000 and the house was probably worth $50,000. So not the best deal ever. I just wanted to try and get some cash flow. And it would have cash flow a little, but it would have been a rough road. I don't think I would have done that way, knowing everything I know today.

Yeah. Well, I do what I just commend you for, I mean, jumping in and trying it. Like, most people will never even will never jump in and try anything. So, I mean, the fact that you jumped in, you tried it, didn't work. You figured out what didn't work really, really well. Yeah. And then a few years later, you got back into it heavy. So let's move there.

So you became a real estate agent first. Is that right? You started, became an agent then after that? Exactly. Right after that, 2010. So I still had like a couple years of school left. I thought, okay, I clearly know how to not do it, right? And I'm going to get my license, but I'm going to go join the same off as my buddy's at,

learn how to sell houses, like learn with other people's money, and make some commissions, and then hopefully I can have savings and start investing with that. So, like, I graduated in 2012, then went right, you know, right into full time. I probably sold like two or three houses while I was in school, just random, like the cookie truck guy or some person I happen to talk to off at Craigslist. And then started doing okay. I graduated and then a year after I graduated, I actually joined a, except for this 18-month period, I've been like with Keller Williams all the time. I just, I didn't really know much about

construction. So I left the Kelly Williams office and went and joined the construction company, developer in the area. So I was pretty much just like the lone realtor in the middle of the construction office. I figured I'd get a double whammy because like they would, they had a couple sales that they gave to me, which helped with a little bit of income. But also like I was just kind of sitting around in a bunch of construction meetings, trying to learn about the rehab process, so I could actually feel comfortable buying something. So that was like 2013, 14. And then finally in 2015, I was actually able to buy like a couple, three more places with, I was wholesaling in between that time. So like I learned, I think I did my first wholesale deal in 2013, did, I don't

I mean like a dozen or so in the next year and a half. And then one opportunity came along where there was a family that I had sold one of their houses for in West Philly. And there was an old lady in her family. They had a group of five places. And long and so short, like I was trying to sell all five of them as a realtor at once. They were all beat up shells and all that. It needed to be sold their investors. But it didn't work out.

And I figured like if I had more control, because they all needed to close with different people, but at the same time. So I just put them under contract instead. and then wholesale two of them and was able to keep the other three. Oh, cool. Without putting any money in the pocket, which is like crazy. And I resold those and paid off some debt. And that was like my next jump into the investing in 2015. Yeah, very cool.

All right, so you got started, you kind of started doing this wholesaling thing, started picking up some houses. I mean, these are like, you said, shells of houses that are maybe not in the world. Excuse buildings, actually. Really? Okay. I know, I mean, I was honestly, like, you're looking at Philadelphia this morning for rental property stuff. I'm just working through some projects for BP, and I was just digging into the

data in Philadelphia. And there are a lot of really old properties there that are some of them are shells. You still buy them $20,000 in some areas for some rough little properties. Like, is that what these were? This is a little bit different? Pretty much, that's what it was. Like, these three, they just happened to be mixed use because the guy, like, the other investor that I sold the elements who didn't want them. So it was actually like an old seafood store and then some really, really beat up almost falling down. I don't even know what kind of story used to be. But I didn't even really care what they were.

I just figured like, all right, I can make a little bit of once. I figured like, so basically all the properties had like a bunch of liens on them, right? They had like 100 something dollars worth, 100 something thousand dollars worth liens on them. And the two that I sold, that I knew that investor was going to clear the liens off, which and those same liens were on mine. So like once he paid them off, then I was able to sell mine a couple months later. and make like $40,000 off of it.

And that helped a little bit with like more confidence than anything. And then I started looking for like, I'm like, okay, cool. Like I'm starting to get a long confidence. Also some properties. Now I'm trying to find partners. And then it really like took off in 2017. The one I put together the one partnership where we did the 36 houses redevelopment in West Philly. And also in that year, another partnership with my partner where we bought like we bought probably like 17, 18 places.

We're just building up a steady. we've got almost 20 units right now building up a steady like rental portfolio but yeah like to kind of answer your question you can buy you can just find really is pretty simple like most properties are like 14 18 feet wide and 35 to 45 feet deep and it's it's all kind of the same sort of box and you can make buy level duplex you know duplex with two bi level units or a triplex with three single four units and the cash flow is pretty good yeah that's cool so would you say most of these properties you're buying, they require an extensive amount of rehab? Yeah, most of them are almost full guts. We probably only got like two that aren't. And now we're jumping into Camden. Like we just bought,

the last one we just bought was already good to go, but it's all full guns. So is part of, is part of your team a contractor who's included in the equity of the deal or are you just contracting that out? We're contracting that out. And like for the first couple, we managed ourselves to really, really learned and just subbed everything out and built the whole team and got like all the mechanical guys electric guy hbeck guy plumbing guy carpenter framework all that and then then we used the general contract we've worked with one one guy most of them who's handled most of the gc work but now i have my gc license and we're kind of back to subbing out like i think the guys prices that we've been using like i've crept up a little bit so now we're managing the construction a little more more closely

yourself. Okay, so you have your general contractor's license, a real estate license you hold with Keller Williams, you're doing wholesaling and you're keeping a lot of these properties yourself, correct? Yeah, I'm not really wholesaling that much anymore. Right now, it's mainly just retail sales and then just focusing on, and we're doing three or four or five at a time rehabs. And so you're at about 20 units, you said? Yeah, 23. Is that with your partners? Yes. I pretty much have one partner. And I all have that one partner, but most of them are. So how do you in this partner that we're referring to here split up the work as well as the ownership? So we're 50-50 partners. We split up. So like I've managed the construction a little bit more closely.

And I'm like cutting the checks and doing a lot of the communication. She's really good with the finishes. And like there's certain things that I don't like to do. Like colors, I'm horrible with kitchen designs. that kind of more abstract stuff, terrible with. I love numbers. And I have more time than she did this generally. And that's how our partnership kind of started. She had much more savings than I did. I had more time.

And so that's how it's split. And we need to, that's one thing we're actually working here right now. We have to, like, more closely define what our roles are, which is one of our resolutions, if you call it that. Beautiful. Okay. So that's what you're going to be doing moving forward. Now, it sounds like you've got a lot of things covered for once you find the deal.

Tell us how you're actually finding these deals, what your strategy is to get, to lock them up, and then divvy up the responsibilities of who's going to do what. Yeah. So finding the deals for me, like, I don't have any magic systems. Like, we actually don't really do a lot of marketing. Most of it's almost everything we bought for now has been one-on-one conversations. Like, I'm really good at like one-on-one phone call or in person. So before this year, I'd gone to a bunch.

I've been going to networking events for 10 years. There's a couple big meetups that were here. By the way, this is like how I met my one partner who we did the 36 houses with, but it's nothing complicated. I just asked certain questions. Like, I think that my superpower is probably like being able to build rapport with people and ask the right questions and then get into like a meaningful conversation really quickly. And as simple as it sounds, like just doing that X amount of times every week,

a deal just come around once every so often. And a lot of stuff we buy is on the MLS too, by the way. Yeah, I was just going to ask, is it mostly awesome? off market or on market. It sounds like it's kind of a mix. It's a mix. It's a little more on market than on market, but like we probably about like eight or nine that are on the MLS and the rest off market, but it's the same like for stuff that's on market, it always comes up at a like it's the same thing every time. Like you see something, I'm thinking about a house that we flipped and sold it, sold like a month or so ago. It was listed at 110,000. I knew it's worth like

50 to 60 and call day one, hey, like my name's Rodney and buy this place in the area. We don't know each other yet, but I'm just letting you know, like, this is exactly like what we buy. I'll pay you 55 for it. No, no, whatever, we're going to get more for it. Like hang up, call them two weeks later. Same conversation. How are you going? Have you sold it? No, no, no, no, no. And then hang up. So like, and then that one evolved into a month in, they got another offer finally for like 75 from a 20 or 3k buyer, which I knew that was probably going to fall through. It always does because the buyer walks in and they think that it's going to need 30 grand and it needs really like 100.

So just it's a lot of waiting people out and just being really up front or really, I guess I'm like I come in with my real number usually like right off the bat and then Italy if it doesn't work, I don't I'm not changing anything like hey like this is it's the same number I told you like two months ago like we're we're serious. I can get this clothes in a couple weeks. I'm not joking around but I know what I'm doing. Like I know what it's actually worth and what it's going to take to say you know to That is such a good point. And something that people should be like, you know, writing down this note and then make, I mean, if you applied nothing, like no change to your business, but that one thing is like every time you make an offer, follow back up two weeks later and just keep doing that until the offer, like the project is sold or, you know, somebody else buys it or you buy it? Like, people would buy so many more deals just from just from that one little thing. So yeah, so when you're do you, how do you track that stuff? I mean, are you just remembering like, I know, I know you're not doing, you know, dozens of deals a month here. So, but do you have like a CRM or how do you try? You

track, you know, I got to go follow up with this person in a couple weeks. These days, we keep it real simple. Like, we use our KW system, just KW command, and like, it's got this little pipeline thing and you just drag people from one step to the next. So, like, the warm leads, we've just got, you know, maybe like a couple dozen people there. And I just look through that once a week and like, oh, man, I feel like, you know, so-and-so is probably ready for another phone call. The same thing with, like, wholesalers.

There's just a couple wholesalers. so I'll keep in touch with. And then every once in a while I'll get lucky and they'll bring me something. We have another one in the contract right now where the guy brought me something right before he was about to list it. The whole sales and does retail sales.

So I've just lucky to have some decent relationships with some of these guys and gals. And they bring stuff to us. And then we go after it immediately. So would you say like when you're talking off market stuff, are most of them, you talk about relationship-based, which is awesome. Does that mean primarily you're talking with like wholesalers and they're the ones out there

maybe doing the direct mail or doing the door knocking or you know, auctions or whatever? And then they get under contract and sell to you. Is that how this is? Or is it, okay. A lot of it. Yeah. And like we sometimes it'll be sellers, but like it's a lot of it's wholesalers and realtor's we do the occasional wholesale deal.

So how do you find a good one? I mean, this is a common complaint in real estate is there's so many bad wholesalers out there. There's so many people who think they're wholesaling and really, It's just daisy chaining like 10 different wholesalers and everyone upsells. And it's hard to find the good ones that are providing actual good deals. So how do you find a good one, a good wholesaler that's out there hunting deals for you? And then how do you build relationships and keep that rapport going?

Because I agree. You seem awesome at building rapport. So how do you do that for somebody who's listening to this going, I don't even have any experience at all? I just want somebody to find deals for me. So I think that like, so finding a good wholesaler, you don't really know. well, I think I'm trying to think about the best way to answer. It's like when I say I ask the right questions

and I get in the conversation for people, that kind of knocks off. I think it checks all the boxes. Like how do you find the right people and get in a relationship? Like I think within a couple minutes of meeting someone or talking to them on the phone, I'll ask like if I'm talking to a wholesale that I don't know.

I like to just ask like, hey, I see you sent out whatever. Like I'm thinking about this one on Belmont Avenue that we looked at a couple weeks ago. Like you send out this place with $75,000. You just need to know the right question to ask. Like, hey, just want to make sure, like, you just got to ask the obvious. Like, is this your deal or do you have this under contract and you're JVing with somebody?

Awesome. Like, did you guys already run title already? Or like if we put something under time, if we come to an agreement, do you want me to run title? How many, like, do you typically do stuff in this area or are you all around the city? And by the time you just ask four or five questions like that, they get a sense that you know what you're talking about. and, you know, then you get to, all right, like, if you had any offers on this, cool. All right, you have someone who offered you asking price on it.

Cool. Like, did that person send you proof of funds and all that? Or, like, what do you think is the percentage you're going to close that person? And I think that, like, if you have the EQ to just know what position they're in, because a lot of wholesalers, they're writing off so many people. They have tons of buyer leads, right? Yeah. So I think if you just show that you know that, like, one of the things I think I say to

wholesalers, like, I don't need to be your, first guy like, just please keep me as a second runner-up. Like if your main person falls through, like, I'm serious. I can get this thumb, but I understand you already have relationship for buyers. And if you have that conversation up, we're like, I'm going to be your runner-up guy, eventually you get something. So that's what's really, really helped us actually, like, get in a relationship with real people. You know, it reminds me of like, I mean, imagine this picture where there's 20 people in a room. There's 10 wholesalers out there looking for good deals out there and trying to like, you know, whatever,

the 10 people call them those wholesalers. And then there's 10 real estate investors who want to buy from those wholesalers. The problem is there's only two real buyers in that, out of those 10, let's say 20% of them are actual buyers. And out of those 10 wholesalers, there's only two actual wholesalers. So really, out of the 20 people,

there's only four actually doing business, two and two, let's just say. Yeah. I'm making the numbers up, right? So the problem is people who, like, first of all, people who are wanting to be buyers, like people listen to this show right now saying, I wish I had wholesalers to just bring me deals.

first of all, are you one of the two out of ten that can actually close? And the way you know that largely is because either you've done it before or you're asking those right questions. And then secondly, like if on the wholesaling side, like you've got to talk to a lot of them. And the wholesale is you've got to talk to a lot of investors and you've got to ask a lot of questions. And eventually, if you're networking enough, the reason I bring up the 10 people and 10 people is it's a picture of like what you have to do to find the right people.

This applies to contracts. It applies to anything. There's just terrible people all over the place. But the more you mingle and talk to more and more people, the more you prevent your own skill, your own vocabulary, your own desires and wants and needs what you need and how you portray yourself. And then the more you meet these other people, the greater chance of getting that connection with the top guy over there and you're the top guy over here. You work together and boom, now you got magic.

And now you can do a hundred times more deals. But when people are like, well, I can't find any good wholesalers. I'm like, that's because you've only talked to a couple. And the chances are the couple, like their odds are nine out of ten or eight out of ten are going to be terrible, which means you've got to talk to 20 or 30 or 40 different wholesalers to find the one or two. That makes sense. Does that make sense to you? Is that how can you operate your life? Yeah. And I agree. And I think like there's, like you said, there's no way around the numbers. And then just I don't like, whether it's wholesalers or sellers, like I also just, I like to learn.

I love to learn about people. Like, I'm a super huge extrovert. And so just asking some of the basic, like, tell me a little bit more about your business. Like, are you guys like one of them, you're sending $10,000 in mailers a month and like you're selling 100 places a year or are you just kind of building up and like your wholesaling things to make money to build your own rental portfolio. And I really actually like want to know the answer to that. And then asking some like another really good question I think I'd like to ask is like what kind of challenges are you having in your business right now? Like I'll tell you what I'm going through. It's really hard for us to find good deals right now that actually make the numbers work and wholesalers that are daisy

chaining everything like what is it looking like from your end and then you know another follow-up to that is like would it make it easier if i think is a good lead off like all right would it make it easier if i can just be that buyer that like never bothers you and then when i see something i can just i'll send you my offer like i'll send the deposit in the title company directly so you know i'm serious like i think just having a good sequence of like i i just try and make it really easy people to work with us and ask the right questions to like and then yeah i mean whether it's a seller or also i'm telling you like it's it's the same thing almost every time and like that's how we put our last uh place under contract that we're closing on we have a residential house on this block that we

did development and i was talking to seller and how we got under contract was someone on the block uh who i'd spoken with before rosam actually just happened to pass away she she knew this person She gave my phone number, whatever they called me. And I said, like, I met with them and said, hey, look, since I'm a realtor, I have to always disclose. Like, you know, before we talk about us be buying your place, I'm going to let you know. You could probably list it for like 170, 180 and get an offer.

But it doesn't sound like you may want to do that. Like, is it easier for you if I make an offer that may be a little bit less, but we're going to be at a closing table on 30 days? Or would you rather go through the whole market process? And they decided, oh, no, I actually like you. And I think you're going to close. And so let's go. say 145. I don't need that extra or whatever, maybe.

That's a really good point. And I like the integrity behind that too. I mean, like wholesale is get a bad name. And sometimes rightfully so for like, you know, like robbing grandma of her property and whatever. And I like to say like the best wholesalers, I know they're not robbing anybody of any properties. Like they're like, hey, this is a legitimate service. You could probably get more. And the seller knows that. And so you're like, hey, I could list this for you. We could go through the hassle. You might want to fix some stuff up. You might, you know, there's a thing there. Or, I get you a little bit less, but it's, you know, we're done and it's simple.

And a lot of people choose that because money is not always the number one primary motivator for people. I 100% agree. And just being like genuine and like I'm, I like to tell it like it is, like even if you don't have like the first couple deals way back when I did, like I didn't have any money at all to close in anything. The first wholesale deal I did in South Philly, I went and hung up ban. it signs a couple times at like 4 a.m. on a Saturday so they wouldn't get torn down.

And the first place I put under contract was for $18,000. It made them off for $18,000. A little house probably worth like $30,000, I thought. And long story short, like, it took me a while to make the offer. It took me a while to do a lot of things. But I met with a seller and had a, I just built a lot of rapport. Had a really good conversation. Learned about, like, what happened.

It was an estate situation, like horrible way that they found their family member, like deceased inside the house. I was there for like two hours, right? Yeah. They got an offer, they got two offers. Mine for 18, somebody else is for 20. And when they called me back, they said, hey, I just want to let you know, we got your offer for 18.

By the way, no proof of funds, no nothing. Like, we got your offer for 18. We met this other guy who was a cash buyer. He was like 50 places in the area. He offered us 20. And I was like, okay, well, that's, that's it. I'm about to hang up. She's like, wait, like, we're going to go with yours.

I was like, why would you go with mine? Like, well, we like you better. I was like, what are you talking about? Like, I was like 22. I'm like, I don't have any money. Like, it's going to take me probably like two months to close. Oh, yeah, that's fine. Like, just let us know.

We'll come back up from, they lived in Delaware. We'll come up from Delaware. It took me like two and a half months to close in that place because I couldn't find a buyer. And they stuck it out because they actually like enjoyed our conversations. I said this all, I said this all the time. Just people like to sell the people they like. And like, the more you can get people to like you, the more chance you have what people want to work with you.

Now there's a number of that they're not going to sell you that property for a dollar. You know, they're not going to give you 20, but there's a discount that everyone offers called the likability discount. And everybody, no matter how grumpy they are, even like, you know, Scrooge McDuck or whatever would offer like a little, you know,

or man, I don't know, Scrooge from, you know, whatever. Like they offer, they offer, they would, there's a likeability, like discount. So the more you can build into that, the more you can build that rapport, the better. Yeah. So, Rodney, what advice do you have for listeners

who are maybe thinking, well, I want to be likable? What do I have to do to be likable? It's a really good question. I mean, the first thing comes in mind is like, don't try and be a lot, like, as less judgmental as possible. Like, everybody has their, life isn't, like, the life is hard. And everybody's got their own, whatever they're going through.

And, like, I try and not judge anybody off the bat, regardless of some of the crazy things that you see or people you run into crazy, right, in quotes, in real estate. And, like, I think just asking, like, really learn how to ask pro, questions and that that says a lot more than trying to like tell someone how cool you are like I never I don't ever get asked for like proof of funds or bank statements or all that just really because I asked a lot of probing questions and people get the sense that like cool like I think this guy knows what he's doing and I actually want to learn about people so I don't know if that's just like genetic

wherever but have asked probing questions and like the ones we talked about like just what's like what's going on in your life like how do you I'm here. hearing that I think this is a way that I can help you. Like, do you think this is a way that I can help you? Just trying to take people through that conversation, whatever, whatever script it is, whatever, whatever you want to,

whatever system you want to come up with, once you figure out the whole, like, this is how I'm going to get leads and this is how I'm going to follow with people, just asking the probing questions, like does wonders. Yeah. In other words,

as opposed to looking at that person, like, they're a transaction and how quickly can I get to the point where I can figure out, can I make money from them? Start with them as a person, what situations they're dealing, with what obstacles maybe they're dealing with and then say okay now that i know their background

here are some methods that i think can work with what you're specifically struggling with and the goal that i have to buy this property yeah and like and then you can you know also share just share really genuinely like what what you're trying to do like it's not wrong to try and make money off like i wholesale that at that first place for 29 000 we made 11 000 of settlement and like there was an attorney representing the sellers at settlement. And I was like, and the attorney, that was my first time. So I was like, is he going to feel some sort of way that like, we're walking with a check and it's on the HUD and they can see it. But he shook my hand after he was like, congratulations. You were able to like put a deal together and make some money and great.

And guess who brought me my next wholesale deal? That attorney. So like, I think just being open within it and once you're okay with it and you're, you know, you just treat people like they want to be treated with respect and learn about them. I mean, this is how I could have stories for days. This is how I put together that big development too. Well, you said something there that I don't want to gloss over because it was so good. And you just said, you said, well, maybe it's, you know, genetics or something, but I just actually care about these people's stories.

And like that, like, in other words, like shocking, you genuinely care about people and people can read into that. People know when people genuinely care or when they're being, you know, a transact. And so, like, anybody listening to just, yeah, genuinely care. Like, we're not saying, like, pretend to care and do a better job acting, but, like, genuinely care. Like, be in the moment. Be present when you're having conversations with motivated sellers or attorneys or wholesalers

or mentors and stop thinking what's in it from me. How do I get more out of this? But just genuinely say, hey, I'm really interested in this person. And I want to know what's going on in their life. Yeah. It's like how to win friends and influence, like, 101 from Carnegie. It's such a good book. but like that's like the basis of so much of his of that book is like just care just care and people

like they'll root for you like you like you said that other that the 18 and versus 20,000 person they wanted you to get it because they liked you and they were rooting for you. They're on your team which feels weird because like you're trying to get a good, you know, they're making less money but they people sincerely like to sell the people they sincerely like. So anyway, that's awesome. People love to call real estate passive income. which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market.

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Cost segregation guys is the go-to firm, having done over 12,000 of these studies with 500 million in total depreciation identified. Head to costsegregation guys.com slash BP to get a free free. proposal and see your potential tax savings. All right, dude, so let's talk about, like, what, what, 20 some properties? You're buying a bunch of stuff. You said you had, what, 20-some rentals now? Yeah, 23 units up to that, including the ones of construction. And you're, so you got the, that's a lot.

I mean, that's awesome. So how are you financing all of these properties and, like, are you flipping some? Is that how you're paying for it? Are you burying them? What's your strategy? So most of it, like 90% of them were doing the first strategy by, it's all the same. We're buying stuff for like 30 to 70 and putting either like 50 to up to probably the biggest ones like 180 since it was a triplex.

And then where we have the value, you know, we're in it for right around the 70% mark and then we're able to refinance and get most of the money back. We've sold a few of them, especially this year. Like in March, we were like, all right, let's cash up a couple of them. And we want to move up to larger stuff too. So we're also thinking about selling some of the duplex and triplexes we have. But it's basically the births. strategy for all of it and selling some when we need to like get more cash back in our pockets.

That's cool. And are you finding like local banks are able to help you refinance? Like, you know, this is the whole like can't have more than four or ten loans to your name. But are you running into that problem or how are you getting around that kind of stuff? So we're not. We have all of ours are in LLC except for like one that I have that's in my personal name. But there's one local credit union that's been like a great asset to us. We've found a lot of options like most local lenders, whether they're like banks or what do you call, I don't know from like larger institutions. They're usually lending around like 70, 75% LTV. The rates are like five, six, amortized over 25, 30 years, but you got to pay it off

in like 15. This one bank that we've found that it's amortized over 20 years. You paid off in 15, but they get 80% of the value. That's cool. And the rates only like, we just refiled the six the other week. And it's like four and a quarter. So really low. So we're trying to lock in as much of these rates,

as much of these lower rates as we can right now before, I don't know what's going to happen next year or the year after. But yeah, the refi has been the easy part, luckily. Like, we've built a good relationship, and that's, they've gotten this. And we've been hitting our values, too, like this. We've been focusing on, in most thing on West Philly.

So, like, I decided to specialize in this one area. And rents are going up in that area, values are going up in their area. It's, we're going, we're going all right. That's cool. Does anybody else have a problem where every time somebody says West Philadelphia. They immediately think, born and raised on a playground

is where I spend most of my days. Anybody else every single time. Anyway, so you're buying these properties, you're burying them. I love the tip about the local community bank. Like, yeah, you're not getting a 30-year mortgage necessarily. You're paying it off way faster,

which is great for long-term wealth building, maybe a little less cash flow. Maybe the return is not as low. I mean, sorry, the interest rate isn't as low as you'd get from maybe like a Wells Farger, US Bank, but it's so much easier. Like, who cares right now? You're building wealth.

you're building passive income and cash flow and building these things up and you're building the portfolio which is awesome and so you do what you got to do i think so many people get stuck with these like this is the rule of real estate is i have to go to a big bank and put down 30% and get this on it like like there's so much flexibility and you don't know that until you jump in and start doing stuff and asking questions and talk with other investors and getting to know it so i'm curious uh before we move on to like the deal deep dive this is the question i want to ask more often on the show but i never do but I'm going to ask you, how has mentorship played a role in your upbringing of being a real estate investor? Maybe it hasn't. And what I mean by that is, are there people that, like, they were

your mentors getting this or did you just kind of figure things out along the way? I guess what role is mentorship played? I haven't, I don't think I've really necessarily had a, I don't know if you call a coach and a mentor the same thing. Like, do you or sort of? Yeah, you could, I mean, I've heard people call them the same. I've heard people call them differently, but yeah. So I've had, I've, I've had sort of mentoring, like, I've had both coaching and mentoring. I've had a business coach for the majority of like since 2000, late 2013, UKW. He's really helped. And he invests in real estate too. So he's helping the sales in and like pulling me back to reality with investing because I'm kind of crazy and I'm like, let's go do this. He's like, no, no, no. So like that's really

helped. But mentoring wise, like there's just been a couple people who have really helped. first joining the development firm in 2013. Like, that was a really close. There was only like five of us. And so just I could ask all the questions in the world that I wanted to, about the guys I was working with and were doing all this construction. So, like, that really helped on the construction end. And, like, one of my lenders is actually, he's been a big investor for himself.

And he's been a really good resource for us. One of our hard, he's in between, like, hard money and private money rates. But a guy who's done tons of developments, tons of rehabs. And, like, I just have a few key people like that, like, one of my partners on that large project, the, um, before the construction guy, the developer I was with and then one of the lenders. Like, I think a few of those people have made huge differences in like, and what we've done, places that I bought and not bought, um, but I haven't had like any direct apprenticeships or mentorships like that.

But I think having a couple key people makes all the difference because there's, there's been some moves, like definitely. And there could have been some places that would have been really bad investments that I was going to buy. And I'm glad we didn't. Like this 10 unit in Camden, we almost bought that I think would have had all these structural problems. We could have lost a bunch of money on. Like being talked out of some of those things is that we've dodged some bullets. So I don't know if that sort of answer the question.

It does. It does. I'm just, I always like to know like, because some people are like real big on like, I can't get started unless I have a mentor. And then they're like, will you be my mentor? And they get like kind of the awkward relationship. But like you strike me as somebody who. was more like just figure things out and but but also at the same time build relationships with people who are experienced so you you don't have the formal necessarily like awkward like I'm gonna meet with you every week mentor thing you have a business coach which I love coaches I love

like performance coaches or business coach I think they're fantastic but you you just build relationships with everyone around you and I think I guess the word I'm like the way I'm going with this is like you strike me as just super authentic in the way you build relationships and I think that's the way that people trying to get into real estate right now should be focusing as authentic relationships with sellers with vendors with potential mentors like just authentic build friendships and relationships with people and they want to help you they want to root for you as long as you're not weird about it yeah and i think something that comes to mind as you say that is like when you're at i like i hate asking people for help first of all like i it's one of my things that just

I'm working on. But I think if you do, whenever I ask someone a question, I like try and make triple sure that I've gone and researched everything I possibly can. So like it ends up being like a three minute conversation and I'm not sucking out way that person's time. Like I think that's why the rare times that I do it, people want to talk to me because I'm like, I went and tried this and I called this lender and I did this and I can't figure this little thing out.

Like can you please help me instead of like, hey, I'm trying to buy a 10 unit. Like what do I do? Yes. Yes. So that's really helped. Yeah. I think that's the ideal use of a mentor is I've tried everything. I'm stuck on this one point.

Can you help me out here? And then a little question, like I've talked to 10 banks. I can't get one that will finance this. That's a good question for a mentor. Yeah. But not what bank do I go to to finance this? Like, go talk to the 10 first. Yeah.

So good. I think that's a great lesson in general when it comes to looking for partners or looking for help. that the more general your question, the more onus you put on the other person to figure out how to solve your problem, which gives them less incentive to do it. The more specific of a question you're bringing, the easier it is for them to help you. And so the more likely they are. And I say this because a lot of very well-intentioned people probably have no idea how that question comes across to the person that you're asking it of. And Roddy, I think that probably for you is somewhat

unnatural because you're very good at being likable and you're a genuine person. So that would automatically be the way that you go about it, which is probably one of the reasons you've been successful. And I'm sure that that success isn't just related to real estate investing. I'm sure in your agent business, you're doing very well there also. And you probably are on a very good trajectory to build that business as well because people like genuine people. If you look at the real estate industry in general, just all of real estate, the trend is towards technology. There are big companies that are trying to convince people that own real estate. You don't need humans in this.

They all do the same. They're all interchangeable. Every agent's the same as every other agent. Let us connect you with a buyer. I buyer programs, SEO programs, get people to click on something and say, I can sell my house without an agent and they get really excited. And they're not being told you probably would have got a lot more if you'd used an agent or the agent that you use matters as far as how much money you can walk away with.

And the only way for those of us that are trying to, make a living in this industry that are not part of a huge machine of eye buying companies is by setting ourselves apart with the relationship piece. And that's really why Brandon's asked you these questions and why we wanted to share your story with the listeners because you've got that secret sauce. You can, one conversation with you, it's very clear this is different than most people. I trust this person. I think they're looking out for me just as much as they're looking out for themselves. And that's how you get ahead. You don't try to beat technology by at its own game, by let me make this as transaction focused as possible.

A computer program will always be able to do that better than we could as a human being. You do it by playing this other game, this relationship game, that technology will never be able to overcome. Yeah. Totally agree. It's an intangible thing that kind of sounds every, very talk about sometimes. But like, and by the way, like, one of the challenges I'm going through right now is, like, my age of business is doing okay.

But, like, I feel like I've been self-sabotaging because I'm actually like, getting bored in a way of like the vet. I really want to step up on the, and do larger investment stuff. So I've been talking to my coach and like, I'm ignoring all my clients. Like I'm, so we're trying to figure,

we're trying to figure that out. But the people that I do work with, I think really appreciate, like just having a relationship. Like, I've taken time to learn about someone's whole life story. Like talking people out of buying the wrong house. There's a conversation I have a lot more often than like,

okay, this is the one you want. Like, because you told me, you're trying to, you know, buy investment properties and retire next amount of years, but you're telling me you want to buy a $500,000 house and you're like, you don't have any kids yet. Like, so sometimes that conversation goes in the other direction. But they'll remember it. And those people will come back to you when it's time.

There's many people that's called me about selling their house and I talked about of it or that wanted to buy the wrong type of property. And I talked about it of that and how to buy a different one where they knew I made a lot less money, but it was better for them. And it always comes back tenfold with referrals that get sent your way. them bring in other people to you. I mean, one really good investment deal can be five to ten transactions and a normal thing. So that's just, that's always the struggle, though, is there's a tempting side that wants to say, well, I could get this right now. But if you just have faith, then you put other people first, it always ends up coming back to you. That was really one of the core

tenants that Josh Dorkin used when he established bigger pockets was you're not going to be in business long. If you go for the quick, easy kill right off the bat instead of the nurture of doing the right thing. And Brandon and I have seen this time and time again. There are flashes in the pan that come along and put a lot of people in her contract really quickly. But the way they do business was very one-sided or dishonest and they don't last very long. And then the Rodney's, you know, I'm sure when we talk to you five, ten years later, you're going to have an empire that was built on the back of this being genuine and being trustworthy and being an honest person. Try and try an empire. There you go. All right, well, let's move along and hit the next segment of the show. It's called our

deal. This is the part of the show where we dive deep into one particular deal that you've done. Rodney, so you have something we can dig into? I do. It's a simple, straightforward one, actually. All right, perfect. So I'm going to ask you, well, we're going to ask you a series of eight questions about it. First, well, technically eight, technically nine, because the first one I always asked two questions.

What kind of property is it and where is it located? That's the first question. It's a duplex that's being turned into a triplex in Cobbbs Creek, most ofilly. All right. All right. And how did you find this deal? on the MLS. MLS.

There's a side question of the deal deep diet, but what do you look for when you're looking on the MLS in a competitive market like Philly? So for some, like for this one particularly, I look for areas that are, I'm pretty confident that have, you can see a couple things going on with the area that are going to be worth more

the next couple years. And this is the perfect example of it. I bought it like two something, a little more than two years ago. And now the rents are way, like three to $400 higher, the values way higher. And so having a certain amount of cash flow, like a couple hundred bucks per unit,

plus the appreciation, and plus being able to put the least amount of money out of pocket, which is what happened here. All right. All right. So MLS, very cool. And how much did you pay for this property? It was $132 with the $7,000 assist.

Wait, 132 with a set. So they gave you $7,000 for closing costs? Yeah, and mindy, it was actually listed. only for like one 10 or 115. So I over, I overpaid for it because I saw that. I thought it was worth something.

All right. And how do you negotiate all that? Like what would you negotiate just look like? Obviously, that played into it offering more. So I called the agent like day one when it was listed. I had this really short window that I was financable for like a couple months to the end of the year.

So I really wanted this. Called the agent, set up a showing, felt out whether I thought I needed to have them represent me or not. and they actually seemed to be, it was okay if I represented myself. And then I just said like, hey, look, like, what's your highest offer right now and tell me what I need to do to beat it? That was really what it was. And then that number happened to match, oh, we're, you know, our highest offers one, 22, one, whatever. Cool. I'm going to offer net 125. But I'm going with FHA, but here's the reasons why I think I'm going to close because

I'm Rodney Ross and blah blah blah, blah, blah. And I've got a great lender and here's this phone number. And so built a lot of report that agent, really nice lady. And, and that's the only reason I got it because there was like six of her offers. Right on. So you already told us you funded it with an FHA loan. Any additional financing? It was actually FHA 20-203K loan.

Okay. So did the $20,000 dollars with a rehab. Now I'm putting another $4550 out of pocket adding a unit and going to refinance again. Oh, so it's like a burr house hack. It's a brous hack. It sounds like. Exactly.

Okay. All right. So by the way, 203K loan, Can you explain what that is? Because I love the FHA 203K loan. Explain how that works for those who might not know. Yeah, so a 203K loan is standard FHA loan. You can put as little as 3.5% down.

You need a 203K loan is the same, and you're allowed to do rehab work. I did the streamline one, which is like if you do less than 35,000, they don't need to have their whole HUD consultant go out and do their whole. This is what I think the rehab is going to cost. You just submit a budget.

Boom, like here's your contractor. What contractor would you use. here's how much it's going to cost, and then they let you just go at it. And it takes a little bit longer to close. You're probably looking at 45, 60 days, but it's a really good product. If you know what you're doing and can have a contractor who doesn't need a ton of money up front because they have to find a little more money than normal. Yeah, well, it's cool.

You can, yeah, you don't have to come out of pocket with all the repairs needed. Like that gets financed in. It's just three and a half percent of the total, which is super cool for those who want to do kind of a brous hack, we'll call it, like the, the, yeah. the buy rehab it's like you don't have to refinance because you get the rehab built so it's like the buy rehab rent it out and live in it because you got to you got to live in at least for a year right and then instead of refinance you just like it just transitions to a long-term loan basically because it's already from the beginning anyway and then you yeah it's awesome well there's not a lot to

refinance out if you use an fHA loan because you only put three and a half percent down so there's not a ton that you need to get back out of it especially because the rehab was included in the loan too so you accomplished the same thing as a burr unless you add another unit like like Rodney's doing it, which is super cool. Like you went, you so much from a duplex, you added a whole other unit. You're covering that out of pocket now to make the value go way higher. So then you can refinance.

Right. Exactly. That's so cool. And like what David said, like I use my commission, 3% commission as my down payment. So I actually came out of pocket like 500 bucks at closing because the last insecurity covered the other half percent down payment. And my sellers assist cover the closing costs.

So it was literally like 500. bucks out of pocket. And both the units were already rented at like 8.25 and 850. And I had every intention to move in there, but within the first 60 days per FHA guidelines, you know, but I, it actually just ended up being a straight duplex investment. I didn't live there. Yeah, the FHA guideline is you need to have the intention to move in there. Now, if you, if something changes in your life and you end up not moving in because they don't come at you with guns and jail time, but you do have to be able to say you like you have to you have to genuinely have a plan like your intentions are to move into the place uh so just something that that's what we're that's what you're talking about there

right yeah i just had a there was an old way in the first four unit who like didn't move out so yeah he's like well i could evictor or just leave it right it was that's i don't even want to talk about that i was not so for this third unit did you have to get it permitted to add it how did that work Yeah, so this one is on a block where luckily it's the the places are all set really back far from the street and the first floor is raised a good like six steps off the ground. So all the basements have tall ceilings. The only have to do is add an entrance and it's like three steps down. And it's a really deep two bedroom unit. I'm like a thousand square feet.

So that's how we're, you know, we're just going through the process. We dug the entrance, got the permit. I just I love basements so much. wish we had more of them in California. They're like the best thing ever when it comes to real estate if there's a decent rental demand. Yeah. That's one of the benefits, I guess, of living near tornadoes and stuff. So wait, there aren't there aren't basements at all really in California. Hardly ever do we have those. Yeah. Oh. Yes. I can't even imagine. You know, it's very rare when you come across that, very old properties and only in certain cities do they

even have properties that were built with basement foundation. So that's something that as an agent, when I'm looking at stuff, if I see anything that says basement, I immediately key in on that. And how big is it? How big is it? How. How tall is it? Like, it's so easy to convert those and relatively inexpensive compared to building a whole new ADU. Side note, we do have legislation that passed in California that makes it so that the government can't stop you from building ADUs on your property. The problem is there's no easy financing in place for those. So it's going to cost $80 to $120,000 to build this entire new structure, which could have been the down payment on a whole property. So it's not very

financially advantageous to do that. Well, so the question for you, David, on that, because This is something I've been thinking about lately here in Hawaii for the same reason that you got in California. It sounds like a business opportunity for me somewhere. And here's what I'm going with it. If you spend a hundred grand, let's say, building on an ADU, I don't know if that's reasonable in California, but let's say you've spent 100 grand building a two-bedroom little shack on your property.

What does that rent for there in your area? Somewhere between $1,500 and $3,000. All right. So we're looking at probably like a one and a half to 2% rule, a basic on this thing. It's going to cash for like an ATM machine. It's going to be really, like it's a good investment. to do. Most people won't think that way, A, or don't have the money to do that. B, right? So what if there was a company? I'm just making this up, like, but I've been thinking about this.

What if there was a company who would go into people's properties, fund the entire building of the ADU, manage the property that gets rented out and just take a sizable percentage. Like, I'll take 50% of the rent for the next 10 years or 20 years. So they get paid back their whole amount plus some. Is that like, anybody ever heard of that, anybody doing that? Because I feel like there's an opportunity there somewhere. It's like a business model that could work really well. nothing. I think it would work, I think that, especially with as much money is floating around, but I just, I don't have heard of it. Yeah, I don't know anybody doing it, but it's cool. Yeah, if anybody knows of anybody doing that, let us know in the show notes, because I'm super curious.

I think in Hawaii, that probably adds more value to your property than it does in California because everybody wants that, that O'Hon unit in Hawaii. So you can then refy the money that you spent out, you basically burr your Hawaiian property and get it back out. California, having one of those doesn't really add a ton of value because not as many people have caught on to. I want to rent out part of my property. Of course, bigger pocket listeners want that, but your average home buyer isn't looking to be a landlord. Anyway, though, I've digressed a little bit here. Thank you for letting me get back on track. All right, Rodney, we know that this became a Burr House Hack. You're adding an additional unit. That's not completed, correct? Not completed, not yet. Okay. So what lessons

have you learned from this deal so far? The main lesson, having had challenges with my one section A tenant, so how to like work through you know, it's just difficult with, especially this year, like I had challenged over this year

when all the eviction rules happen and all that. Just ended up being a weird situation with that tenant. But mainly, I think the main thing was like believing in it was the only place I think I paid like over asking like that. especially with financing.

But I knew in the back mind, I'm like, this has got to be, like, this is the cash flow makes sense. Day one, like, it's already making like $17.50 a month. My payment's going to be like 11. So I believed in, like, what I thought the value was, even though it was listed on the MLS for a lot less than what I thought. And that paid off because in just two years, the rents now, like that unit that the old lady was in, that was 825.

I just listed 1175 and there was a bunch of people that wanted. second floor just vacated. It's going for 1175. Bottom is going to be a thousand. So it's going to turn from making like 1750 to like $3,100 or even a little more maybe, which is crazy, like in a couple of years. So the area is just really just whosh. So believing in what you think something is worth and when you know enough that you can see the value and just going after it and like forget what other people think that it may

may or may not not be worth. That means. It does. Well, real estate investing is meant to build wealth over time. So it's somewhat foolish to look at your year one numbers and assume that's what it's going to be forever. They could go up. They could go down.

But you should be looking at which you expect them to do because my experience has been just like yours. In areas that I bought in in higher appreciating markets, both rent and value, they performed really, really well over time. And it's okay if I didn't make an incredible high ROI in year one. because by year five or six, I definitely was. And conversely, some of the markets where I had a stronger ROI going in on year one, they sort of flatlined.

They didn't really do a whole lot. And then when I did get capital expenditures, they crushed me. Like I got one right now that hasn't appreciated at all. And the sewage line has to be fixed. It's about $3,500. And that's like probably two years of profit completely gone by one thing. And rents are, you know, over a two to three year period, have gone up like $25, hardly anything.

So it's definitely wise to consider the big, picture. That's what I wanted to highlight with what you're doing. It sounds like you got a great deal there. Yeah. Yeah, I'm thankful for it. That's awesome, man. Congratulations on that. That sounds like a really, like that's like the, I feel like the Brandon Turner special right there. I love that type of, I've done so many of those like small multifamily add in a unit, that kind of stuff. I love it. All right, well, we got to move on to the last segment of the show. It's time for our famous four. This is the part of the show where we ask the same four questions every week to every guest. So we're going to throw my shoe, Rodney. So number one, Rodney.

any current favorite or all-time favorite real estate related book? All-time favorite is probably the rich dad, poor dad. Current favorite that I've been revisiting is the millionaire real estate investor. The diagrams in that, I really like. I'm a visual kind of guy. And it just, it's a good mental reminder. And even for clients, it helps. Like, it shows like, this is what happens.

Even if you buy a place every other year for like 15 years or whatever, it just shows, it does all the math where, like, it shows if he put, this many such and such. They have the basic models like you get, get a little house, 20% under value, put 20% down and finance it. It's funny,

the rates that they use in there are like seven and eight. I'm like, oh my God, like rates. So anyway, those models are like timeless. It just shows that if you just make little investments over a decade or two,

you end up having millions of dollars. So that's a current one I've been looking at, but rich debt board at, I mean, all time for me. Cool. Awesome. That's a great shout of.

out. What about your favorite business book? I think my favorite business book was really just like a whack me in the face last month, which I actually think you guys mentioned on another episode. The E-Mith, I got the audio book. I was like, oh my God, I'm going through this, breaking down the three roles and the truck technician and entrepreneur, I'm like, wow, I'm going to this burnout thing right now. We're like, I'm operating and all that. And it's different skill sets to run a business than to be a really good agent or investor or whatever. So we're readjusting now. And it just like it hurt a little bit to read that, but I think I'm getting, I'm stepping

way back out of my comfort zone again, trying to make our business look more like a business and not just based off like my energy all the time. Yeah, I love that. Awesome. Love it. You're very smart guy, Rodney, in case no one's ever told you. I'm just trying to learn from, I listen to so many podcasts. Like I've been, it's been a long time listener.

I think I started listening to Bigger Pocket. It's like, I don't know. How long have you been around? We've been around for almost eight years now, I think, right? Yeah. It's been a while. So I've learned a lot of tips from both of you guys. Just trying to pick off a little here and now.

I like how you gave us credit for your own intelligence. That's a very classy move there. And smart, proving my point even more. Okay. When you're not flattering the hosts of the podcast you're being interviewed on, what are some of your hobbies? I love working out, like the bike, like the lift. I like to speak French.

I really was, my big goal this year was trying to, like, go back to France for like a month or two. Didn't happen. I literally, you know, I don't even think you could go right now because they just show out again. But working out, speaking French and just playing guitar. That helps my mind, like, because my mind goes a thousand miles an hour thinking about this all the time. Yeah, big goals right now are like to take time off. Get over to Europe and for a couple months at least, getting a happy place. That's fantastic, man.

Well, my final question of the day in the last of the famous four, what separates successful real estate investors from all those who give up, fail, or never get started? So I've forgotten the yes, that. I think as cliche as it sounds like just sticking with it, not getting out of the game. Like, this is as simple as it is. It's not easy.

And like the hardest part about this right now, like a couple of years ago when we were just building up, Like I feel like figuring out the rehab and like the numbers and that was I hadn't done any of that yet. But now it's like managing my own emotions and like and not getting to the point. I've kind of my coach was telling me, he's like, look, you've been doing this for like the past year again. Like you're really good for a couple months and then burn the heck out and get anxious as heck and not be able to sleep. And then you have to chill out and then you don't have any business. And then it happens again.

So just managing like learning how to first of all staying in the game and then just learn how to. manage your own emotion and like just be more self-aware. That's my biggest thing right now. Like I'm I'm taking a step back. I'm not really out looking to buy something hardcore right now. I'm trying to like get my head together to get ready for the next, hopefully next step, which is buying bigger things, not houses. All right, man. Love it. Well, with that said, David Green. For those who want to learn more about your story, tell us where people can find out more about you. Sure. So we're a lot of heavy on social media these days. Philly Real Estate Boss on Instagram. I've linked in our new website, which is almost done. It'll be done in a week or two,

LimitlessR.com. And so Instagram, LinkedIn, Facebook, mainly the Instagram, I think, is we're posting most often. Just started TikTok, which is also Philly Real Estate Boss, but, you know, so I think there'll be more fun stuff up on there in the near future. Those are the main channels. All right. Very cool. Well, with that said, I think it's time to get out of here. David Green, you want to close down shop. I appreciate you, Rodney. It's been a great show. Thank you so much. Appreciate you both of you. Thanks, Rodney. It was awesome talking to you. And thanks for sharing your knowledge.

I think it's going to do a lot of people, a lot of good. This is David Green for Brandon, the Browse Hacker 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

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