BiggerPockets Real Estate Podcast - 448: The Lazy Person’s Guide to Financial Freedom in Less Than 10 Years with Dion Mcneeley

Episode Date: March 4, 2021

Busy people tend to be...busy, and often, real estate investing is one of the things that they “just don’t have time for”. If you feel that way, listen to today’s guest, Dion Mcneeley as he describes his own system for buying real estate the “lazy” way.  Dion was a police officer and a truck driving instructor, taking care of his kids as a single parent, and struggling to get ahead. He went from $89,000 in debt to becoming debt free and financially free, thanks to the help of rental properties, in just 10 years.  After buying his primary home, Dion heard of success in owning rental properties, so he decided to move out of his house and into an apartment to see if he fit as a landlord. He rented the house to his friend, who later moved out without notifying him. Dion tried to make landlording work with another tenant, but ended up being underwater on the house payments. This is when he found BiggerPockets and read Rich Dad Poor Dad.  What was Dion’s mistake? He wasn’t running his rental properties like a business. After upgrading his processes, he went on to buy and house hack a duplex. Then he bought another duplex as an investment, and another one, then another house hack duplex. Within just 6 years, he had 7 units and was raking in $2,700 a month in pure cash flow! Dion talks about the mistakes he made, why he prefers side-by-side duplexes, how he’s located his properties for maximum asset protection, and goes into his amazing strategy for getting tenants to sign longer leases and raise their own rents. You can check out Dion’s Youtube channel or find him on the Real Estate Rookie Facebook Group! In This Episode We Cover: Why being lazy can be a benefit when building systems for real estate How to use your job and your rentals to achieve a 100% savings rate The benefit of side-by-side duplexes as opposed to two-story duplexes Making sure that your procedures are easy so they can be repeatable  Getting tenants on longer leases and higher rents with the “Binder Strategy” Spacing out rentals so you have a large pool of tenants to choose from And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Podcast 276: Early Retirement ($10k/Month) by Age 35 with Bryce Stewart BiggerPockets Podcast 443: 10 Ways to Learn Anything Faster with Jim Kwik BiggerPockets Podcast 356: 30+ Rentals (in a Pricy Market) Through BRRRR and Section 8 with Joe Asamoah BiggerPockets Money Podcast BiggerPockets Business Podcast BiggerPockets Rookie Rookie Podcast 51: 18 Deals in 2 Years AND a Full Time Job with Kevin Christensen CDS Rental Calculator App BiggerPockets Rental Calculator Zillow Trulia Wells Fargo Guild Mortgage BiggerPockets Facebook Group Check the full show notes here: http://biggerpockets.com/show448 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 448. The reason my strategy works for me is because, and I can't say this clearly enough, I'm super lazy. Working 50 hours a week, raising three kids, I don't have time to run a real estate business, but I have to live somewhere. So reaching financial freedom sounds like a big milestone, but what did I do? Every couple of years, I did one thing.

I bought a property. 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 Brian Turner, host of the Bigger Pockets podcast here with my host, Mr. David Financially Fit Six-Pack Green. What's up, man? How you doing? Pretty good. comes up in today's show. We draw some analogies, believe it or not. Weird. Analogies in the Bigger Pockets podcast. Who would have ever thought that? All right. Today's show is phenomenal. We got to guess. His name is Dion McNeely. Dion is a former Marine who it was a single father making like a low

dollar-per-hour job. I mean like just getting started doing a you guys are going to hear about it. It's crazy. And he used that foundation to build actual financial freedom. Like he doesn't have to work. He makes more money than he spends. He's got this thing called the income snowball, which is awesome. It's a great way of explaining the power of rental properties. And here's the thing about Dion is everything he does. You're going to hear the same phrase over and over and over and over today. And that is, I'm lazy.

I'm lazy. He doesn't do fancy, like weird, no and limited on financing things like I had to do in my business. He doesn't do a whole lot of like crazy. Let's do all these fancy strategies. Like he's very simple, very lazy in his words on how he did it. Yet genius. And you're going to love this. everything from the income snowball to, he talks about this thing called The Binder.

It's how he gets his tenants to actually request an increase in rent, which is something you've never heard on this show before. You're going to love it. And here's the last point I'll make is Dion is actually a product of Bigger Pockets. In other words, he found Bigger Pockets early on in his investment career, like as he got started and was struggling. And he used the lessons that he picked up from the podcast and from the groups and the forums to get to where he is today. So something that a lot of you are exactly in the midst of that. You are where Deion was. Maybe you're a lot farther than Dion, but regardless of where you're at, this episode is going to change your life. I really believe that. Definitely one of my favorites we've ever done.

But that said, that was a long intro. Time for today's quick tip. All right, today's quick tip is brought to you by David Green. Today's quick tip is keep it simple, silly, the kiss method. Dion is one of the best examples that I've ever seen of creating a very simple roadmap that anybody can follow that will lead to financial freedom. One of the key components of what he did was to keep his income from creeping up. As he made more money, he did not spend more money. That requires discipline.

Look for different ways in your life where you are starting to get lax with your standards. Or at one point, you had a very specific plan and you were very focused on it. And you've maybe slipped out of that and tighten those things back up. Because over a long period of time, it makes a very big difference if you're keeping things tight. Well, there we go. I like it. Good quick tip from David Green. We all joke that rentals are passive, but if you're spending nights matching receipts or guessing what a property earned last month, that's not passive at all.

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This isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes,

10% below market value in the best markets across the country, without making real estate your second job? That's exactly what rent to return. retirement does. They're a full service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. And now I just want to jump into today show. Anything you want to add before we jump in?

No, let's grab Deon. All right. Well, with that said, let's just jump right into the interview with Dion McNeely. All right, Dion, welcome to the Bigger Pockets podcast, man. Good to have you here. No, thanks for having me here. I'm super excited. It's really weird for me. I've been watching you guys for so long.

When I got the call, I thought I was being pumped. Ashton Kuncher show up and be like, ha, you got punked. I applied to be on the real estate rookie show. I mean, I have 14 units. You guys are a show that have people like Matthew McConaughey and Grant Cardone and Meet Kevin and Graham Steffen and Hakeem-Viles. And I'm like, what can I bring to the table? I mean, my story is, you know, it was 89,000.

$8,000 in bad debt, single parent with three kids. And from what I learned on bigger pockets, it took less than 10 years to get bad debt free and financially free. So I'm hoping that there's somebody in the audience that can learn from something that I'm going to bring today. Dude, I'm excited to unpack that. And we like having these, you know, Matthew McCona Hayes and stuff on the show. But it's funny, like our biggest shows are never those shows. Our biggest shows are like, hey, I can identify with that person. I was where they were. And those are always the biggest shows we do. So this might be our biggest show ever. Who knows? I guess we'll find out. With that said,

Tell us about yourself. How did you get, what were you doing before real estate? Kind of walk us through. You said you were single dad and all those dead. So paint us a picture of that early life of Dion before getting into real estate. I mean, there's really two things that bring me into real estate. And then if you go back to early life, the way I was raised was the biggest factor. We never were homeless. We always had a house. We just didn't own it or pay rent. We used to move into houses, fix the doors and windows and wait for the owners to show up and say, who are you guys? And then we moved to the next place. So one of the reasons why I joined the Marine Corps was they provided housing. And I remember going to friends, houses as a kid and listening to their parents talk. And once in a while I would hear about rent. And it blew my mind. I couldn't imagine that I was in the house of somebody who was so rich that they could afford to pay rent. And not only that, how much it was, but they did it every month,

which is crazy. And so actually now I still think of all of my tenants as much richer than me because they can afford to pay rent. And I'm just house hacking living for free. And the second thing that brings me into real estate is I was tired of sources of income being taken away due to things outside of my control. After Desert Storm, the Marine Corps downsized, in 2008, when the recession hit, police departments shrink, like there's no revenue coming in. So people think, you know, there's no more crime, so we don't need cops anymore. And I got laid off. And I started looking around thinking there has to be a way to make money that doesn't rely on selling your life one hour at a time, especially when those ways keep getting taken away. And my brother had retired before 50 with real

estate. He used a strategy that I probably couldn't do because he took out a home equity line of credit basically turned his house into a big credit card, purchased mobile homes in the middle of nowhere, and they were falling apart, and then he's like a craftsman. He would fix him up and make them really nice. I'm a single parent with three kids working a full-time job. After the police department, I started teaching people how to drive trucks, making $17 an hour. So it wasn't like I had a ton of money coming in or I had a big savings rate, but I thought I should try out real estate like my brother did. And to test out the waters, I moved from my house into an apartment. I thought, I'll just rent the house out to see if I can handle all of these things of parenthood, job, being a property owner with tenants.

And I didn't see myself as a real landlord. And so I wasn't running it like a business. I thought, I shouldn't make a profit. So I set the rent at what the mortgage was. So I wasn't figuring capital expenditures or vacancy. I was, if everything went perfect, I'd be losing money. And it didn't go perfect. I rented to a friend because I figured I couldn't trust a stranger. And he was a single parent. And so I identified with his issues when rent. became late. It became later because I let it slide, so he stopped paying and it became never. And when I finally went to the house to have a face-to-face conversation to ask what happened, I found out he didn't even live there. He had moved out, rented the house to someone else,

and was collecting the rent and keeping it. So I thought, okay, I'll try this again. I'll rent to the new tenant. And in three months, I was able to collect $700 of a thousand dollar a month rent. Luckily, she moved away and I gave up. I thought, like you've heard you say a million times, I'll just go watch Dancing with the Stars, which I haven't seen yet. There you go. But I was underwater on the house. Couldn't even give the house away. Even subject two or somebody taking over the mortgage wouldn't work.

And right about that time is when I found bigger pockets. And this is in the dinosaur days. You guys weren't even doing online video yet. You were doing blogs. And I thought, that's my mistake. I'm just trying to jump into real estate without any training or education, you know, to become a Marine that's boot camp, infantry school, MOS training or job training, to be a police officer.

It's a six-month academy with ongoing training. and I thought, oh, just go to real estate and replace my job with this, and I won't need any training at all. So I started reading and learning. I found Rich Dad, Poor Dad. Your book hadn't come out yet. It helped when it did. So I found a tenant, got her in the house, realized I can handle this, and started looking for single family houses. I figured I'm working too much. Kids take a lot of time, so I don't want to buy a place I have to fix. I just'll buy a place, live there for a year, in a year, move out, buy another one and kind of repeat it. But single family houses cost too much. in my area, they just didn't cash flow. I'm in Tacoma near Aberdeen, where you used to be.

Tacoma Washington, the Tacoma aroma. Exactly. Is that what I'm smelling right now? Oh, yeah, anyway, the Tacoma aroma. I love Tacoma. It's actually a great rental market, but yeah, yeah. Anyway, I keep going. To I derailing this with an insult to Tacoma, but I love Tacoma. Yeah. I like Tacoma. I've got a couple properties here that are making it to where I don't have to work. Exactly. On one of the bigger pockets forums, I've, found out that small multifamily and single family have almost the exact same lending structures. And I looked at duplexes, which cost less than a single family house in this market. And I thought, well, I don't I buy one of those in house sack. And so I moved into one unit, rented out the other,

purchased my first duplex. And that one move, it took my housing costs from $1,500 a month for the apartment down to $300 a month. So $1,200 a month added to my savings rate. And when you're making $17 an hour and it started to go up slowly, that's a lot of money. And avoiding life creep, you know, not getting a nicer car or doing things that just cost more money, I kept saving a little bit over two years later, I purchased an investment duplex. And then this is when this thing happened that I called the income snowball. Everybody talks about the debt snowball, about paying off the smallest amount and adding that to the next. But hardly anybody talks about when you purchase a cash flowing asset each time you purchase one, the savings rate gets bigger and

bigger. And so it was a little over two years for one duplex to the next. The next duplex was in less than two years. And so at this point, I had a single family house and three duplexes, and I was limiting myself to four mortgages. I figured the big banks kind of do that too. Lenders will go up to 10 mortgages in a person's name. And if you're married, you can get 10 each. But some institutions like Wells Fargo, Bank of America, kind of like that four mortgage limit. And I thought, I'll do that because they're smarter than me. So it must be a reason. So I then, instead of buying another property, I focused and paid off the house, the original single family house. So within six years, I had seven units when the house was paid off.

Now, this is where I absolutely reached financial freedom with just seven units. As a police officer, I don't know what David, you make in San Francisco, but in this little tiny town, I was a cop in. I was making $1,300 every two weeks. That was my take home. So $2,600 a month. My cash flow with seven units, after all expenses and saving for vacancy and repairs and, you know, principal interest taxes and insurance, was $27. $700 a month without having to go to work. So I wasn't rich, but I made work completely optional in six years based on what I picked up

from bigger pockets. So someday I'm going to write a big check, send it to you guys. Dude, you're paying it back right now. This is awesome. I want to unpack everything you just told. That story is amazing. So a few things I wanted to point out. First of all, I love that you jumped into like this idea of house hacking.

Like that's probably the number one thing we recommend people doing. And you mentioned, I even wrote this down because I want to dig on this. You said the same lending structure for a single family house versus a multi-family, a small multi. Can you explain that for other people who are saying, well, what does he mean by that? How is the lending kind of the same for the small multi versus single? What did you mean? That's probably one of the reasons why you guys are show is so great. People forget what it's like to not know something.

So when you're teaching, clearing things up like this is amazing. It's helped me a lot. The lending structure, when you buy a single family house, you have several options. You can buy it as an investment property. But if you're going to live there, you get to do low-down. payment like an FHA can go all the way down to 3.5%. I found a conventional lender. This is a few years ago before the pandemic and the lending fears went through the roof, but I found a conventional loan at 5% interest for that first duplex because I was going to owner occupy it. I had a VA loan

available, but I've never used it. I've actually kept that in my back pocket just in case the perfect property pops up sometime when I don't have a down payment saved up. And my goal also is at this point was cash flow. So I wanted to do the bigger down payments. After that first 5% I've done 20 or 25% down. With mortgages for four units or less, you can get 30-year, fixed rate, low-interest loans. If you go to five units or more, you start talking about commercial loans where you have shorter periods and then there's a loan reevaluation at seven or 10 years. And that's, for me, so far, been what's been the barrier to getting into commercial properties. I'll explain a little bit through this story. But the reason my strategy works for me is because, and I can't say this

clearly enough. I'm super lazy. Working 50 hours a week, raising three kids. I don't have time to run a real estate business, but I have to live somewhere. So reaching financial freedom sounds like a big milestone, but what did I do? Every couple of years, I did one thing. I bought a property, and that one thing is broken down into all the little steps from the, you know, get a old washer truck episode or vacuum the truck episode. And breaking down each one of those little steps, it's easy for lazy people, especially when you have the motivation of making work optional, which is for a lazy person, the strongest motivator out there. 100%.

And what's even more amazing and made this whole thing work, too, is that, like you said, you minimize the lifestyle creep. In I think it was the book I wrote called How to Invest in Real Estate, I wrote it with Josh Dorkin. There's a chapter in there where I talk about, there's a movie called like Fantastic Beast and Where Where to Find Them. And in this, there's this creature, I can't remember what it's called, but there's this little creature that will expand to whatever size container you put it in.

Right? So in the movie, they like put it in a teacup and then later they put it inside of a bus or something like that. And it will grow to whatever size we have. And so I make the analogy in there that our finances are for most people the exact same way. So whatever container, meaning like the amount of money you make in a given month, your spending will increase to that size with almost everybody. I mean, I've hung out with people who make $400,000, $400,000 a year saying that they're broke

and they live in paycheck to paycheck and I've been out with people who make $12,000 a year and they're broke living paycheck to paycheck. Why does most people, I don't know, 80, 90% of people

live paycheck to paycheck. I think it's 88% I read the other day. Why is that? It's because everybody, and I'm not different. I've said this before. When I was younger,

I slept in my car. My wife and I would travel around and why would we pay for a hotel when you can sleep in the back of a Prius, right? And then it was like, well, now we got some money. We can stay at Motel 6 or whatever.

You had a Super 8 was like a nice hotel. And today, I rarely go anywhere. Like I won't say anything less than like a Hilton, right? Like I've increased my lifestyle and everybody kind of does it to a degree. But what you did is you said, no, I'm not going to do that. I'm going to stick with the lower like this ability because the more you can hold that line, the easier financial freedom is. And then once you get the financial freedom, now you can go and dramatically increase your income if you really want to at that point. But at least it got

you to the point where you had the financial freedom and you can enjoy life a whole lot more. Is that a good like summary of what you kind of did there? Yeah. I mean, that pretty much nails it right on. head. One of the things that I have is a really strong focus. You know, to work in law enforcement or the military, you learn how to really structure things. And so even when it comes to money, I structured it. Instead of increased money that I can spend, I was working on the savings rate because everyone that I hear about talks about saving 10 or 15 or 20 percent. But my mind said, my savings rate goal is at least a minimum of 100%. So when I got the first little bit of cash flow

from the house in the beginning and I reduced my housing costs, I took that money as a savings rate. A couple of years later, add the cash flow from the new duplex to the savings rate. So it's seven units. I reached my goal of 100% savings rate because all of my living expenses are now covered by assets. So 100%, every single penny from work is now my savings rate and I'm living off the assets. So I've tried to explain to a few people, you know, I have over 100% savings rate and they think that's not possible. And I guess I don't clarify that it's from my job. And now I'm saving about 60% of the income from the rental properties because that income snowball is crazy. When I started out saving up about $20,000 to get that first duplex with closing costs and reserves and

those kind of things seemed like a monumental amount of money. But the down payment, the amount of money that I spent, seems like an impossible number to me. That's so cool. I love that concept of the income snowball. Because like you said, Dave Ramsey and everyone else talks about the debt snowball, but the same thing applies here if we're talking. Yeah, I mean, I heard the analogy and I use it often of like oil wells. Like every rental property you buy is like an oil well. that's pumping oil out of the ground. And so you have one, you got one gallon of oil a day. You got two of them.

You got two every day. So, yeah, really, really cool stuff. Hey, real quick, also. So kind of summarize your story here in a nutshell. You bought a house. You then house hacked a duplex and then a little bit later, bought another one and house hack that one. A little bit later, house hack that one.

Each time getting these low down payment loans. And then you paid off the first one. That's where we're at, right? Pretty close. And to make it sound a little easier to the people out there that might possibly be as lazy as I am, I only house hacked once on the duplexes. That savings rate increased so much from the house and the duplex that within a little over two years, I saved an actual 20% down payment on an investment property.

And the next purchase was an investment too. It was the next purchase, which is going to be the deal deep dive, was my second house hack. I've only house hack twice. So to reach financial independence doesn't mean you have to move every year and relocate your family and move your kids to new schools, which I think people should talk to their kids when they think of that as a barrier. A lot of times I try to help people reach financial independence. And I've figured out how to do it in less than 10 years, pretty much no matter what your starting

position is. And it drives me crazy that no one wants to hear about it. No one cares. So the Bigger Pockets community is like my therapy. I get to find people who actually want to listen to this stuff. So I'm in the Bigger Pockets, the official Facebook group and the real estate rookie group, trying to answer questions as much as possible. And taking phone calls, usually about an hour long, trying to figure out where someone's at

and where they're going. But the Bigger Pockets community is actually full of people who are ready to make these steps so we get to share this information with them. And that really becomes a time sync. Taking those phone calls becomes really long. And so my solution, because I'm really lazy, and I really want to help people, is I started making YouTube videos and answering the most basic simple questions. And so now to make sure that the person is ready to hear it, I'll say, here, watch this five-minute video. And then we'll talk about house hacking, because it doesn't have to be every time. It's just that momentum in the beginning. And I've heard David say this a few

times really a lot better than I probably will. But once you get the momentum going, the first few years are the most crucial. Like you said, once you're financially independent, now you get to have some of that life creep happen. Yeah, I mean, I think I did basically house hack. I'm still technically I'm house hacking today. But I house hacked pretty strongly the first five years, six, seven years of my investing. So when I was 27, I was living on three grand a month. I was making three grand a month in my rental properties. I was able to quit my job at the bank. And I just like hung out for six months. And that's when I was like, you know what? I should start a blog. And so I started real estate in your 20s. And then I became friends with Josh Dorkin. And Josh and I were like, hey,

we should start a podcast together. All of the Bigger Pockets podcast, the last eight years of doing this was because I had that low income financial freedom. Right. And like that I wasn't making millions of dollars a year, but I had enough that I could live. So I go and take those risks, which is what we're at Bigger Pockets is all about. Now, I'm curious real quick. I'm going to fire this at David, because I've been hogging the mic a lot today. David, actually, you are a lender or you lend in California and I don't know other places now. So I'm curious like do you still see those like, I mean, house hacking still works right now even in today's crazy market?

What are the rates like right now? And can you still get 5%? What are you seen right now? Yeah, that's a good question. So I own a mortgage company and we lend to people. And what you find is that most people make the, they have the same thought that Dion described in the beginning, which is I need 20, 25% to put down.

So those of us in the business, that's obviously not the case. But to so many people like Dion said that we forget people don't know stuff. I get clients to come to us all the time and they say, hey, I'm not ready yet. I have to figure all this stuff out. And I'm like, no, you don't. I've done this a billion times. I'll just tell you right now, we're going to put five percent down. There's tons of conventional loans where you can put a little bit of money down. You hear a lot of people talk about the burr strategy. That's another thing I've noticed that people say, I got a burr, I got a burr. Well, if you're putting three and a half

percent into a deal, you don't really have to burr. There's not a whole lot to get back out. Many burrs you're going to leave more than three and a half percent in the deal in the first place. So 5% down, 3.5% down is not that much money to put into a deal. Like I think Deon's going to share with us in a little bit. The important thing is that you're intentional. And that's something Deanne, I've noticed as you're speaking, you are very measured, you are very intentional about what you're doing. And it shows in the results that you've had. You literally said, here is my plan. I'm going to save X amount of money. I'm going to put it into a house. I'm going to rent that house out. I'm going to make this much. I'm not going to let my

lifestyle creep happen to where I'm losing some of that money. I'm going to take all my profits, invest it right back into real estate, and then I'm going to keep saving the money that I'm making at my job. That is not an easy thing to do. It requires discipline. But at the same time, it is not a complicated thing to do. It's remarkably simple. It's just like a lot of other things in life that make you successful.

You want to be fit. You eat good food. You make sure you exercise. You do it for a consistent period of time. You end up fit. You're just very financially fit. Like we've seen, like, you know, Deon here has a financial.

six-pack. This is awesome. And when you get in good shape, you can do things in life that you couldn't do when you're out of shape. You can take different hikes. You can surf. You can do physical activities that energize you and get you pumped up. And then it makes it easier to go out there and live a healthy lifestyle again. Wait, wait, wait, whoa. Are you not going to take this opportunity to throw in a jiu-jitsu analogy? I mean, come on, man. Like when you're in shape, you can do jiu-jitsu, but if you were completely out of shape, you'd have a hard time. I was going to avoid that. You were going to avoid that today because you don't want everyone thinking you're upset. This is a conversation Brandon and I have where I feel like the amount of exposure actually

have the jiu-jitsu is not nearly enough for as much as we talk about it. And I don't want to be labeled in the community as a jiu-jitsu fraud. So I'm trying to make less jiu-suitou analogies. But yes, anyway. That's a good analogy, though, the fitness. Like once you have that financial sixth pack, is that what you call that? That's good. You agree, Dion?

I'm going to steal that. I'm definitely going to use that. The thing that really piqued me. I still a lot, by the way. I still a lot of what David says. It's okay. He doesn't mind. Just take it.

Well, that's the funny thing. I've helped a lot of people reach financial independence, and anytime they thought I know something, it's not true. I'm a filter from what I've heard on your guys' show. I just take the small parts and put them together in something that I can explain. We're just a filter of what we heard from that's exactly right or whatever. And the really cool thing is what it's done for me to help people, just like you said, you're a filter from what you've heard from someone else. If five years ago, somebody said, what do you plan on investing in? I would say, well, I want to buy rental properties that make money. But since I've answered the question to people who are just starting out,

and they say, what do you invest in? My strategy is, narrowed down so perfectly that I don't even have to think about it. It is side by side, small multi-family, so there's no tenants living above or below another. I want two bedrooms with a garage because more space equals more stuff, so less likely to move. No tenant turnover. Washer and dryer in each unit because people don't like using a laundromat or shared laundry. And so I have a 22nd answer to a strategy that makes work completely optional. And five years ago, I never would have been able to put that on paper. And now it's just in the back of my mind because every time I help somebody, I'm actually the one learning. You know, the highest form of learning is teaching. And

I heard that recently on your podcast from Limitless is, you know, when you start something, start with the idea of teaching it later. And that's helped me a lot. And just a few minutes ago, Brandon, you mentioned how you were able to take the risk to get bigger pockets going. And not everybody needs to take a risk to get a big, successful show going. But I was teaching people how to drive trucks at a truck driving school, making $17 an hour. And I hadn't even got the first duplex yet, but my mind planned out a 10-year plan to be financially free. And so I was able to take a risk at work. The owner retired from the truck driving school and new owners came in who had never worked in transportation. They're just really nice people. They wanted to buy an educational place to help people learn a trade.

And before, with no plan, I would have kept my head down and just done my job because I need the paycheck to raise my kids. But since I had the plan for financial freedom that I was getting from bigger pockets, I had an idea that grew the school from six staff to over 60 staff. We had one location. We have four now and we're opening in other states. So because I was willing to take the risk and present my idea, they actually said, that's a great idea. We'll try it.

And if in six months we're doing good, you'll run the place. If in six months we're not doing good, you're fired. Someone else will run the place. It was the best chance I'd ever been given. And because I had financial freedom as a path, I could afford to lose the job. Took the chance. And now I'm the company president and part owner of the company because I was willing to, to take the chance.

That's awesome. There's a lot of lessons in there. The main one I want to point out here is something that David and I talk a lot about, which is excellence in everything you do. It's like how you do anything and how you do everything. So if you're at a job right now, a lot of people are like, well, you know, I don't want to have a job forever. I want financial freedom.

I'm working towards it. So I'm going to put as little effort into this job as possible. I'm going to just scrape by because I don't want to be here and that's not what I want to do long term. Versus like, I'm going to be the best person possible and try to make the most bloody money I can at this company and help this company just completely like change their destiny because that just reflects on me. And if I leave in a few years because I got financial independence, fine. But at least you like showed up and did a good job, which gives you a higher paycheck, I'm sure than you

were when you were making 17 an hour there. And now you have the choice. You can stay there. You can help. You can be a part of it or you can go and do your own thing if you really wanted to. But yeah, there's just such value in that that I see a lot of people not doing. They just try to scrape by on minimal work. Man, there's such value to just hard work. David, what do you think on that? I was going to mention the fact that when you're in better shape, it makes life more fun. You do fun stuff. It makes it easier to stay in shape. Exercise is easier when you're fit than when you're not fit, okay? Finances work the same way.

When you have some discipline, you're saving money and you're earning money, it becomes fun. Now you're buying houses. You're getting this jolt of dopamine that you feel so accomplished that you just did it. You want to do it again. Your mind starts looking for how can I save more money? Where can I cut back? How can I get the next deal? And it makes it easier to grow.

That momentum that Dion mentioned earlier is really, really important. And for people that are having a hard time getting started, I think a lot of them feel it's always going to be this hard. It's not. The first workout's always really hard. The first house is insurmountable. But once you get it, you see that kind of what Dion, what you've done is you've almost turned this into a procedure that can just be repeated over and over.

And it has to be simple. The lazy kicks in. And so I like to work out. I used to run a martial arts studio when I got out of the Marines. And I practiced defensive tactics with law enforcement agencies still. but I'm really lazy. So how do I work out when I'm at home? I like to binge TV shows. I'm a big nerd. I mean, if you can't tell this is a forgotten realms map on the wall behind me. But when I watch a show, I have a home gym. TV is in the home gym. So when I want to work out, I mix it with something fun.

When I want to buy real estate, anytime you do something in real estate, the first time is terrifying. The second time, you can just about teach a class. It just seems terrifying until you've done it once. So making a game out of it is what's worked for me. When I'm hunting for deals, and all of my deals are from the MLS. I use traditional lending. I don't have off-market deals. I don't have any special systems. It has to be easy to reproduce or my lazy would stop me from doing it. And there's a book called One Rental at a Time. And I didn't find it until years after I had my properties, but I realized. Michael Zuber, right? Michael Gruber, I think, yeah. And he laid out my strategy like word for word of save up the down payment, buy a property. Four properties will be life-changing

because it was at four when I had seven units and didn't need to work anymore. And it's just straight from MLS. And you know, you have to, in law enforcement, whenever you get new evidence, you adjust your opinion. Don't form an opinion and then fight to stay there. You find the evidence and then you would change. I wanted single family houses, but they don't cash flow. So I shifted to small multifamily. House hacking helped, but I'm too lazy to move every year. So I found a way to invest while only doing that twice. So the easier you can make it, the more likely you are to keep doing it. Right. When I bought my first rental, I thought collecting rent would be the hard part. Nope. The admin crushed me. Every night was receipts, tax forms and checking who was late on rent.

I kept thinking if this is one unit, how do people run 10? Baselaine changed that. It's BiggerPockets official banking platform that handles expense tracking, financial reporting, rent collection, and even tenant screening, all in one place. It's the system I wish I had from day one. Sign up today at baselane.com slash bigger pockets and get a $100 bonus. Baselane is a financial technology company and is not an FDIC insured bank. Bank banking services provided by Thread Bank, member FDIC.

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visit BiggerPockets.com slash retirement. If you think property management is expensive, try mismanaging a vacancy, or an eviction, or a maintenance issue that turns into a five-figure problem because no one caught it early. That's expensive. A good property manager isn't overhead. Their protection against small mistakes turning into... into big losses. And that matters more than ever in this economy. That's why I like Mind. Unlike other property managers, Mind manages your property like an investment. They obsessively measure

the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score, and they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is much cheaper than learning the hard way. So here's a question that I have for you. You've taken the same information that everybody who listens to the podcast gets and you've turned it into something actionable that you're making progress with. Do you mind sharing what about your background or the way you filter information has led to you being more successful with this than others who hear the same thing but have trouble putting it into action? I kind of think that's like the question that comes up in the famous four of what separates the people who are successful from the people who don't. And my answer is 95% of investors. fail because they never start. That first deal gets you to the second deal. You can't have the 10th. And you've made the analogy, and I can't remember the word. I've tried to of the domino effect. The first small domino will knock over 150% larger than it all the way through the chain.

And taking that first step, you know, everybody that wants to get into real estate thinks, I'm going to buy a property. Well, that's so vague and so large. How do you do that? I'm going to learn how to save something, even if it's small. I'm going to work on my credit score. even if it's small adjustments. I'm going to find a lender to find out what I'm qualified for, these tiny little steps of a ladder that gets you to the top of the wall instead of trying to scale the whole wall all at one move. So figuring out what is that first small step that you can do now

that isn't a big commitment. And it could just be saving or working on your credit score or watching this over and over and over and over through every show because, I mean, bigger pockets money, bigger pockets business, the rookie show, the real estate show. it's helped me grow a business. And this is a life hack. I could not for the life of me get my son to listen to anything I was saying about real estate and making work optionally. He'd gone to college, had racked up some debt. And so while I was answering questions to some of the people in the Facebook groups, I started making

the YouTube video. I started doing posts called Dion Talks, long things about how you can get into real estate with simple, easy steps, how being lazy can help. So I made some YouTube videos to answer those questions. And my son watched them. Every now and then he'll come up to me and he'll say, hey, And he'll explain some strategy that I had to research to put into the video. And hopefully he doesn't watch this because I think I've cheated at life to get him. So in one year, he's gone from $54,000 in bad debt to completely debt-free. And him and his wife have $15,000 saved towards their first small multifamily. So I'm super excited about that.

Dude, that's so good. I want to go back a second here. You mentioned just kind of casually that you have a very strict criteria when it comes to buying stuff. And you mentioned side-by-side duplex, not up and down. I also love those, but I'm curious of why is that something that you look for? So I'm trying to increase the pool of tenants that would want to rent a place. All properties will work. My dad one time was trying to insult my brother.

My brother was buying his first rental properties. It was three places, two, needed so much work that could have been torn down or repaired. And my dad, trying to be sarcastic the way my whole family is, told my brother, man, people will rent anything. Not realizing he was putting the thought in my brother's head that he was right. people will rent anything. The nicer you make it, the more likely there is to be a bigger group of people willing to rent there and less likely for them to move. And since I'm really lazy, I don't flip or wholesale because those are jobs. And the Burr method, it would have scaled faster. It would have worked better. But it's a lot of steps and the refinance and the rehab. I like to buy occupied or rent-ready properties where I don't have to do hardly any work because I am working and raising kids.

but the criteria, and I didn't have these when I started, again, I have to thank you guys. The criteria comes from explaining it to people as to why I like what I do. So side-by-side units means that there's no noise complaints from tenants above or below another. If there's a water leak, you only affect one tenant instead of possibly both. And then the two bedrooms in a garage means more stuff, so less likely to move. The washer and dryer makes it more convenient. Mindy Jensen has talked with me a few times about how a noisy street can be a deterrent for people wanting to live there. So the location in real estate location, location, location. But then I also have

strict criteria that have protected me. And this is one of the most important things I like to help people when they're just starting out. My portfolio is designed for a prolonged government shutdown, a pandemic, or a stock market crash. In all of 2020, I didn't have one late or missing rent payment. And some of the criteria that you can add, so you have criteria that first the math needs to work. Will you get your return? Does it hit the 1% rule or your 10% cash on cash return or what is your criteria for money or numbers. But then it's the side-by-side unit, it's the size and the washer dryer. But I like to diversify my properties because I don't invest in any stocks. I can't stand the idea of a retirement account. I hate money being locked away,

not paying me now. Whereas in a rental property, there's cash flow, appreciation, principal pay down, tax benefits. So my goal is to put all my money into real estate. But if you're 100% in real estate in one apartment building and you have a rent strike, you could sink. So my small multi-families These are all more than 10 miles apart, all within about an hour's drive since I self-manage, so that I don't pull from one source of tenants. That way, and each one is close to at least two economic drivers. So I want a base, a port, a college, a hospital, a Boeing or Amazon terminal, and at least a population of 100,000 or two or more of those.

And then I diversify the tenant base. I have about one-third military. I'm by joint base Lewis McCord, so it's a large base. And I have about one-third section eight. I can't thank you guys enough for the Joe SMOA episode because I had a house. A single family house rented out for $1,400 a month. I had to know how to research rent prices. I didn't know how to find tenants.

Watch that episode. I called Section 8 and they said, oh, we'll have a tenant for you tomorrow at 1825. She has an 8 30 credit score. And so it opened my mind. So I keep at least one third of my tenants from Section 8 because a lot of people think of Section 8 is low income housing and that's not what it is. It is fixed income housing. So someone on disability or retirement, military, disabled vet.

And then the third thing is I have people who are working or retired. So if the base shuts down or companies move away, a total of one third of my portfolio can be impacted. And so I'm saying all of this because I'm thanking you guys because I wouldn't have known how to even explain any of this or develop it to such a way to where I have confidence to keep buying properties. In 2020, a lot of people were in this panic mode. I don't know what's going on. And I missed a couple of deals because I wasn't paying attention to interest rates. Interest rates started to drop. Prices started going up and my brain said that place costs too much. I can't afford it. So I actually ran the numbers. And I used the CDS rental calculator app and the bigger pockets rental calculator to run the numbers,

but I'd never followed through to the very end and seen what the actual mortgage payment was, amortizing it. I was just trying to find out the return. So in 2020, I bought a fourplex and a triplex, basically doubling the size of my portfolio. My payments for those, even though the prices are higher or less than what I was paying when I used to pay higher interest. And I've over doubled my cash flow in the middle of a pandemic. So again, thanks for the show because I've been able to do that because of what I'm learning here. That's so good.

Hey, one more thing on the side by side. I don't know if you've done this yet, but I just wanted to point out one of my favorite things about side by side properties is that the water lines are typically not as intermixed as they are in like a old house that's been chopped up into three different units or whatever where like you can't separate the water meters where on most side by side properties, they're already separated or it's a simple, very simple, few hundred dollars for a plumber to come and separate the water meters and put separate meters in there. So that's one other just benefit of that is that it's a lot easier to transfer over water to your tenants. So I'm not sure if you've done that

yet, but I'm a huge fan of side by side for that reason. I really like tenants being in charge of their expenses like that because if you're paying the electricity, you'll find the windows open and the heater on. And there's about eight inches of snow on the ground outside right now. So as much as possible, everything I put in the tenant's name when I can. Right. So anytime I hadn't thought of that. That probably is easier to separate out me just for water. Side note from the mortgage side, a lot of people don't realize how cheap money actually is right now.

I hear a lot of people that say, I'm trying to save another $10,000, then I'll buy a house because I want my payments to be lower. At today's interest rates, it's about around a little bit less than $4 a month for every $1,000 that you borrow. So that $10,000 is going to save you $35 to $40 a month to save that much more money to put down on a property.

That's exactly why, Deon, you were able to spend more money on a property that probably brought in a little bit more rent than what you were used to and have a lower payment because interest rates are so low, which also plays into why people are complaining that property prices are so high and everyone's complaining that prices just keep going up, up, up. But when interest rates are going down, it doesn't actually become more expensive to pay more for the property. Yeah, that's 100% right, especially when you can do, if you're using an owner occupied for a house hack, with the less money down, the higher price is even less of an impact,

because you still have the low money down and the lower monthly payment. That's cool, man. All right, so you kind of took us through 2020, what your portfolio is like today. I thought maybe we'd move along and get to the next segment of our show, the deal deep dive. All right, this is the part of the show where we dive deep into a certain deal that you've done. I know you mentioned that you have one prepared.

So let's go to it. Why don't we start with what kind of deal was this? What kind of property was this and where was it located? Okay, this is a fourplex and spanish. away Washington, which is about 10 miles away from Tacoma. All right. And how did you find it? All of my deals are from the MLS. And I got really lucky. This was an agent that was about an hour away and an owner who was in another state. It was listed with one terrible photo. And like I said, I like side by side units. And most fourplexes in Washington state are big boxes with two tenants up top and two tenants on bottom.

And there was one photo. And fourplexes were going for about 750,000. This was listed at 595. And luckily, I thought, well, the price is great. Maybe it's falling apart. And I look at the photo, it looks like it needs a roof and the decks have some rot just from that one bad photo. But I Google Earth did. And I went down to Street View. And I'm looking around on Street View, like I'm turning him, but I'm looking around on Street View. And I see this lawn care company that's really nice. And I look across and I see this apartments and I look across and I can't find it. I'm thinking, oh, this is a fake. Because on Zillow and truly sometimes I'll find fake accounts for some reason. I don't know why they're there. But this is off the MLS. And so I'm looking around and I look back at

the apartments and really what the forplex is is almost townhouse style side-by-side fourplex with garages for each unit. And my heart went up into my about right here and I call text and email my agent and I say, here's the offer. I want a $600,000 offer, so I'm $5,000 over and escalation clause up to $650,000 in earnest. As the market is heating up, it's really hard to get a seller's attention. And I don't have a lot of money to offer more money than what it's really worth, but I can put a big earnest money down. And I'm comfortable doing that because I still have an inspection clause and an appraisal clause. So I'm really not putting that money at risk. I have a way to get out of the deal if I don't want to get it. But I wanted to get this under contract.

And my offer was accepted. And it was a house hack. So I was going to do owner occupied. I want to do 20% down because the income snowball had kicked in. And remember, I was making $17 an hour 10 years ago. I had $141,000 in the bank. And to me, it sounds like a lot. life savings, but it was a couple of years savings with the income snowball. And the down payment would be $120,000. First, I was going to throw in a couple escalation clause, which is where you offered $600, but escalation clause basically says, hey, up to $6.50, I will beat any other offer that comes in. Is that a good way of explaining that? That's it exactly. So if someone else comes in, mine would go $1,000 above theirs, or $5,000 above theirs. Yeah, it's not that common,

but I really like escalation causes. They're fun. And yeah, if somebody else would offer $620, and boom, you're actually at 621, and so you got the higher offer there. It just shows you're very into it. Secondly, you mentioned the earnest money, of course. This is like I'm putting, not a down payment, but I'm pledging this money that I'm actually going to close on this property. So you give it a sizable chunk of earnest. I mean, I just put an offer on a condo out here and got it accepted, and it was like

800 grand and only put 10,000 earnest money. I mean, I've oftentimes done $1,000 earnest money. Why did you do $50,000 earnest money? What does that tell the seller? To somebody with a lot of investment properties, it means that I'm serious. If it's a seller that maybe inherited the house and doesn't understand the business very well, which was entirely possible, it just means that in their mind, I'm hoping they think they're going to get that money if I back out. And $50,000 looks very attractive. I found out later there

was actually a cash offer of $600,000 and they took mine over theirs without going through the escalation process. Very, very cool. All right. And then the last little thing here, the last little note, I want to make sure we unpack was contingencies. You said, well, I've got these inspection contingencies and stuff. So the reason you're okay doing that, that's like, The escalation clause and the 50K is because you could still back out if you needed to. And so a lot of people are always worried like, well, if I put all this money in, what if I don't like the property or what if I, you know, okay, well, that's why we have inspection contingencies.

I just want people to understand when we're listening to this, that like, there's such a great strategy to what you just did. Like you fired an offer of quick. You found some hidden value that a lot of people that weren't recognizing. You offered a higher earnest money than normal. You put the escalation clause in there. And yet none of that was more risky than anybody else. but it sure looks a whole lot better to the seller.

And so it's just such a great picture of once you kind of start knowing what you're doing in real estate, it gets easier. It gets better. You figure out these little tactics and strategies so you can find properties on the MLS still today, even in a competitive market. So nice job on that one. So we did what kind of property is it? How did you find it?

Went over that. We did how much was it? Let's go negotiate. Well, we did how do you negotiate it? So really, how did you fund it? What was your loan like then? 20% down, you said? So it was 20% down. This was my last loan with Wells Fargo since then I've gone to Guild Mortgage.

When I'm shopping for lenders, I treat lenders like a contractor. And you get pre-approved for an amount so you know how much you can borrow. And you get an interest rate. I go to at least three lenders and I get their offered interest rate and their fees in writing. And I show all of the lenders what the others are offering because my Wells Fargo lender educated me. She said, I can't go to my boss and say, I really like Dion. I want to give him a lower interest rate. She said, But if you bring me something in writing, I could take that to my boss and he can say, we want to keep the business, let's beat it. So every time so far I've gotten a lender's best, lowest interest rate that they can do,

lowered by negotiating by showing other lender's offers. And the strongest negotiating tool with the property was the professional inspection report. If I called the listing agent and said, well, it's going to need a roof and it needs a deck, I'm just talking. But if I take a professional inspection report, I paid $1,150 for one, and I sent specific pages from it, Not the whole thing. I wasn't going to give them my $1,150. But I took pages saying, here's the missing parts of the roof that need work.

Here's the parts of the deck. There's a door with a hole punched in it. And I sent an email saying, I estimate about $30,000 worth of work. I would like to take $20,000 off of the price. And the seller did exactly what I thought he would. They came back and they said, well, we recognize it needs some work. We'll take $10,000 off. So my $1,150 saved me $10,000, which was immediately, since I'm doing 20% down,

$2,000 off my down payment. So I got my money back from the inspection immediately and then saved me $8,000 over 30 years. So it saved me quite a bit more than that. Hey, real quick, one more thing because I use the exact same strategy all the time. Most people split the difference is very common. So I just play into that knowing that they're gonna split the difference.

I'll ask for more than what I'm actually doing. One more like added piece to supercharge a little bit. This isn't any negotiation with anything. I love to scare people with a significantly higher amount first to price anchor the actual amount I ask for, which then will make them more. more likely to just split the difference and have it. Here's an example.

I would love to show them a bit. It's like, hey, actually, there's gonna be $60,000 to fix this thing. Now I know 60,000 sounds like a lot, blah, blah, we're not, I'm not asking you for that. I'm just looking for like 30. I think I can get it done a lot cheaper. So now they start with 60 in their mind, their gut sinks. Oh, we're gonna lose this deal.

And then 30 sounds a lot better, so or 20. So then when they split the difference at 10, it's, oh my gosh, we got by with such a great deal on this thing. I gotta do that with like negotiation in real estate, negotiation on pretty much anything. I'll anchor it to a much higher price. I actually got that from Monopoly. Whenever I play Monopoly people,

I'll always do things like offer them some crazy low number. Like, hey, I'll give you $100 for that property. They're like, it's Park Place. I paid more than that. I'm like, $100 right now. And they're like, no way. I'm like, fine. $500.

They're like, ha ha, sucker. Six. And I'm like, fine. And they'll take 600. And people, it's just psychologists, how people react is. So anyway, there's a really funny story of a girl who wrote her parents from college and said, mom and dad, I'm sorry to tell you, my life is sick a turn to the left. I met a guy in a biker gang.

I'm pregnant. I'm dropping out of college. He's moving me to a third world country. I'm not going to see you anymore. If you could send me somebody to help take care of the kid, I would really appreciate it. She goes on this horrible thing. And she goes, actually, I'm just kidding, but I did get a 2.1 GPA. And I need like $1,000 in my account for some food.

Love you guys. And it's an example of what you just said. You set this baseline at a horrible place. And so now the person who you're asking for something from feels like they're winning by giving you less. Yeah. I can pretty much guarantee that you guys have had a very similar conversation to this a couple of times on the show. And subconsciously, that's how I structured this. By talking about 30,000, saying I want 20,000, and being happy with 10,000.

So thanks for making me $10,000. There you go. You can rent me a check personally if you would like. Next question. I'm going to come over and take you out to Monkey Paw. Oh, dude. I know that. You're going to have to take a loan to take him to Monkey Pod.

So go talk to your guild mortgage guy. Get ready for that. All right. Next question. And what did you do with it? Was it a flip? Was it a rental? House hack? So I've only done buy and hold. I've never done any flipping or wholesaling. So this is a house hack. I offered cash for keys to the tenant that had to move. And a tip for cash for keys is I always offer that on the deposit of wherever they're moving to. So there's no chance that the tenant can stay and

keep my money. That's a good tip. And I moved in. Can you explain cash for keys for those who may not know what that is? So a lot of tenants, and this is kind of generalizing, live in a kind of fear of the property being sold or the landlord not renewing the lease or the rent being raised to where they can't afford it. So most times it's because they don't have the security and deposit and first and last month saved up for a move. So whenever I've had to displace a tenant because I do a house hack, I will offer cash for keys. So you're saying, I'm going to pay you a certain amount of money because, you know, say this part, but it's a lot easier for me to just give you this money than to go through an eviction or to all the other options. So you're paying the tenant to make it easier for them to move.

And that's why I do the deposit thing because that's one of the expenses they're going to, going to have associated with moving. Yeah, that's really smart. I do the cash for keys quite often like to avoid eviction. I'd rather pay a tenant because I'd rather pay a tenant than a lawyer. I've done it for, yeah, when I bought a property and I just, I want to remodel a unit, we'll pay a tenant to leave. I'm a big fan of that. And it doesn't have to be a ton of money. Like, it just helps ease the pain. I will also do use the same anchoring strategy with things like that. You start with like, hey, man, like, you got to get out. If it's a bad situation where it's a bad tenant who's just being a jerk, you can start by offering you like, hey man,

like I can give you like a hundred bucks to get out. But like, we really want. wanted to be more helpful. So, you know, how about a thousand? Right? So the $100 are like, oh, that's not very much, but they're debating in their head. Then they get to the part of the letter or if we were in person talking where it's the thousand. All of a sudden, that seems way better. So anyway, all right. So you bought this to house hack it. So you moved into the property. What was the outcome? I mean, you still live there right now? What's this property like right now? Still there now. Close January 6th, 2020. So I've had it a little over a year. So I'm looking at doing my next house hack in Arizona. So I'm going to get paid to Snowbird because I'm profiting pure

cash flow at the 4plex, $1,700 a month. What did you learn from that? Because that's awesome. So I learned two things. The first one is the power of the income snowball. I had $141,000 saved up. The down payment, the closing costs, the immediate repairs, the cash for keys cost me $141,000. I had $200 in my bank account on January 6th last year and poor me from 10 years ago would

have been terrified. But backup plans have backup plans. have backup plans, so contingencies. I had $17,000 in credit cards untapped. I have a retirement account I can tap if I need to. I have a paid off house I can tap into. But the income snowball affected me over years, every two years, buy a house and gets faster and faster. But here's the power of the income snowball. I collected the rents for January from Title. So I don't have a mortgage payment and I get the rents from the fourplex. There's no mortgage payment in February because you wait 30 days past the next first. So I collect the rents from February. So from just the fourplex, I have

over $10,000 in my bank account one month later from when I was down to 200, not counting, I have a W-2 job, not counting, I have rent coming in from other rental properties. And the second thing I learned was something I didn't expect and should have saw coming, but I got to rent out the unit in the duplex. The first house hack lowers or reduces your housing costs. I've never heard anybody talk about the second house hack. Whenever you buy another property, you add the total number of units. I'm buying a fourplex. I'm only going to rent out three, but I also have a the duplex. So my cash flow on the duplex went from paying 300 to now profiting 800 in pure cash flow. So just because I was willing to move about seven miles across town, maybe a little bit more,

my income changed by $2,500 a month. And I'm not doing any more work. I called two guys in a truck, paid $300 and went to work. And when I came home, all my stuff was at the new place, the lazy. I love it. Such a good deal, deep dive. And I love how it's just a perfect picture of what's possible when you're just thinking like how can I house hack, how can I get this done better? Like you didn't even do a 5% or three and a half percent down. You just save the money from previous cash flowing deals about the next one. It's just snowballing on. So dude, I love it.

Amazing story. So let me just ask you two more questions before the famous four. Number one, where are you headed next? Like what do you see the next few years of your life look like? And then is there anything, our audience could bring value to you, like anything you're looking for right now that our audience could deliver to you to bring you value. So where I'm headed next is if anybody's in it around Phoenix. I'm looking for a fourplex.

I'd like to find one that also cash flows even with me living there so I can get paid to Snowbird. I've been looking but not really looking yet, so I'm just now at the stage where I'm ready to. The next few years, I hope to be the same. I get to work at a truck driving school where I get to play in a truck like it's a go-kart. My idea that grew the company was founding a nonprofit that does job placement assistance for non-driving jobs, all the jobs in transportation like HR, IT, operations, forklift, all those other positions. So we help people find those jobs for free.

So if anybody is looking for work, hidden jobs.org for free will help you find those local jobs to where you're living at no charge. It's a 501c3, so there's no fee at all. We don't charge the company or you. How did that grow the trucking business? So truck driving and moment of transparency, don't hate me. Transportation sucks. What you're supposed to do is get your CDL drive over the road for two years, making $6 to $10 an hour. You're gone all the time. And in two years, you get a good paying local job. Local jobs pay $70,000, $80,000 a year and you're at home in your own bed every night. My idea was, if we get people non-driving jobs, we will develop relationships with local trucking companies. And then those local

trucking companies will hire out of the school. So when somebody goes to a truck driving school and they go to work over the road, they tell their friends, they got a job, the school did what they were supposed to. When they go through a school like ours and they get a local driving job right out of school without having to go over the road, they drag in five of their friends. So we went from 300 students a year to 1,500 students a year, and it just snowballs. The more and more local trucking companies higher out of the school. But the thing that people can bring value to me is one of the things I want to say that's really awesome about the Bigger Pockets community. I started doing the YouTube videos, and I expected, I honestly expected 50% likes and 50% dislikes. I don't invest in stock,

so I figured stock investors wouldn't like me. I do small multifamily, so commercial wouldn't like me. I house hack, so people who can't house hack wouldn't like me. And I just expected all of these. I was 15 videos in when I finally just went in and gave myself a downvote so I could finally have one because nobody had given me any. This community is open to there are more than your way of reaching financial independence and something like when I'm listening to Bigger Pockets money and there's a guy who runs laundromats. That helped me grow my trucking school. Things I picked up from that episode were relatable.

So I would appreciate some honest feedback. How the YouTube thing happened was I started talking in the Facebook groups and I do nice long. I try to put motivational posts to give back to bigger pockets because I'm actually financially free based on this information. So I want it to give back. And the Bigger Pocket's forums are great. But there's people there with mountains of information and they'll answer questions really quick.

I found a niche on Facebook where there really wasn't a lot of people jumping in. Kevin Christensen, it was just on the real estate rookie show. Him and I try to answer questions and help people as much as possible. But at the end of mine, I always say thanks for coming to my Dion Talk because they're pretty long. If you could check out Deon Talk, Financial Freedom on YouTube, and give me some feedback. Tell me what I'm doing wrong. Tell me anything. I would appreciate that. Well, awesome. Well, what that said, let's head over to the last segment of the show.

It's time for our famous for... This is a part of the show where we ask the same four questions. Every guest, every week. We're going to fire them at you right now. But before we do, let's hear what's going on this week around the Bicker Pockets Podcast Network. Hey, what's up, guys? It's Tony from the Real Estate Rookie Show. And this week, we had Maria Acosta on the podcast. And she talks about so many different things. I know you're going to love. She talks about subject to financing, how she's hiring and training VAs to help scale her business, and how she turned a roach-infested duplex into a $1,200 per month profit. All right, let's get into the famous for question number one. Deion, either all-time favorite or current favorite real estate-related

book. So I have all of the bigger pockets books on Audible and a couple paperbacks. I've given away set for life probably 20 times. But I'm trying to bring new information. And I would have to say my favorite is the book one rental at a time just because it is really simple. It's super easy to duplicate and you don't need a special strategy. Just slow and steady within 10 years, your entire life has changed. All right. What about your favorite business book? Same thing. Shameless plug for all the bigger pockets books, especially your book, David Green that just came out, sold. Sold. Which everybody says, and I've heard you say it on the show, that is not for agents. That is helping me interact with, because I use three different agents on a large scale. So I suggest.

a lot of people get that. But my favorite business book is by a guy named Andrew Ballard, and it has made me better at running a business, and it has made me a really good property owner with tenants. It is called, Your Opinion Doesn't Matter, because when you're buying a rental property, a lot of us think, what kind of countertops do I want? Where do I want the kitchen window facing and how much parking do I want? And it doesn't matter. You're not renting the place. Your tenants are. And that's really helped me develop this tool that I have that has helped me, and I wanted to mention this at the start of the episode, but this is a strategy that I've used that gets tenants to ask for rent increases and ask for longer leases. So whenever I buy a property,

okay, so I'll break this down because this is one of my favorite things. I have a video on it, but here's the secret to this. I prefer to buy already occupied properties because I'm super lazy and a tenant turnover and fixing things takes time and energy and money. And tenants are afraid that they're living in a property that's going to be sold and the rent is going to be raised to a point where they can't handle it. So what I do is I make a thing I call the binder. I take a three ring binder. The first page is a picture of the property with the amount that I paid because $300,000 or $590,000 is a huge amount to a tenant. And then the next page. Your price anchoring, by the way. I'm price anchoring. Exactly. I'm using your strategy.

The next page is a picture of a map from Rentometer with all of the rentals that are similar in the area. and you said the same number of bedrooms, if you can. And then each page after that is page after page of those rentals and what they're going for because traditionally, well, not traditionally, but usually when a property is for sale, an owner is just tired of being a landlord and they're selling it because the rents are low and they don't want to go through the process of raising it. So the tenants have been getting a good deal and they're usually far below market. So when they see like a duplex that I did, the area rents were $14 and $1,500.

The rents were $8 and $900 when I purchased it. So I show the binder, I show how much I paid. I show what the area averages are of 14 and 1,500, and I slide the binder over to the tenants because most tenants have never been involved in the decision-making process of what their rent is going to be. And I just asked them, what do you think is fair? Because I'm not telling them the rent's going up. I'm not telling them anything. I'm saying, this is what I paid. Here's what the area is. You know what you're paying. What do you think is fair? And 100% of the time so far, almost every single tenant has asked for the rent to go up just below the area average because

they know that as a business, my best option would probably be to kick them out, fix the place up, and rent it out at the highest round that I can get. But I'm lazy. So the 8 and 900 are both now paying 13 and 1350. They requested that. And I like that it's their idea, but I said, you know, if we do a two-year lease, I can't raise the rent next year? And so they said, well, can we do a two-year lease, which is a great idea. So I don't even have to think next year of renewing a lease or finding a tenant because of the lazy. And the rent is much closer to where I want it. And my 10% return would have been around 1,000 or 1100 a month. So to get them to request it to go to where it is, I've used the binder over and over and over.

And hopefully, at least that made it worth everyone's time who watched this episode to this point. That's awesome, man. Next question. What are some of your hobbies? Three. I love in making the YouTube videos. I like to scuba dive. Me and my brother have gone to Colombia and Thailand.

And for the first time of my life, I'm taking a month every year and just going and doing something because I've never taken vacations. and my kids are older now, so one's graduated college and they've moved out. And my third hobby, which I swear I do all the time, I want to say it's real estate looking at deals, but that's pretty much it. Yeah, like the scuba dive. My last dives were with whale sharks in Thailand, so we had 35-foot whale sharks moving the whole water that we were in as they went by. That's awesome. It was pretty awesome. That is. And I guess my third hobby is I like to help people reach financial independence. Feel free, anybody listening, reach out. I like to find out where you're at, what your goal is, and figure out the first steps to get you going that way.

That's cool, man. I love it. Well, final question from me, what do you think separate successful real estate investors from those who give up, fail, or never get started? You kind of answered it earlier, but we'll see what else you got to say. Yeah, it really comes down to getting started. People talk about analysis paralysis.

So instead of boiling the whole ocean all at one time, cook your pan of water, figure out what's the first step? What do you need to learn first? Is it how to save? Is it how to improve your credit? And once you have those done, it makes sense to go on to the next step or that effort might have been for nothing. There we go.

Love it, man. This has been phenomenal. Really, really good. I think people are going to have their lives changed by this episode. And then obviously following you, they should and go check out all your YouTube content, and everything else. It's all that David asked the final question about that. Thank you, Brandon.

Deion, tell us where can people find out more about you? Well, the bigger pockets Facebook groups are probably one of the best ways, but I'm close to 5,000 friends. So if you send a friend invite, please say something like real estate. so I know you're not a fake account. I answer every single question or comment on YouTube. That's probably the best way to find me. Yeah, that would do that.

Very cool. All right, man, well, with that said, I guess we'll get you out of here. Thank you so much for being part of this show today. It's been an honor to have you on. So thank you. You rock. Thank you. Awesome job, Dion.

This is David Green for Brandon, the aroma of Tacoma, Ticoma, 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 height, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress?

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