BiggerPockets Real Estate Podcast - 483: The 5 Things You Need to Build a $1,000,000+ Rental Portfolio

Episode Date: July 4, 2021

Last week, Brandon and David sat down to talk about the “Core 4” of any successful real estate team. Now they’re here to talk about the “Divided 5-ed”, a term they coined to describe the five team members you’ll need to scale your portfolio to new heights. Both Brandon and David agree that a sizable, growing real estate portfolio needs to be thought of more as a business than just a group of rental properties. Maybe you’re looking to scale into large multifamily properties, commercial properties, self-storage units, or mobile home parks. Or maybe you’re just going to buy 1,000 single-family homes. Whatever your strategy, you will need a lead generator, underwriter, money raiser, asset manager, and financer/bookkeeper on your team. You may start out doing many of these roles when you buy your first few properties, but as you scale, you’ll need to fill these roles with more fitting individuals. Maybe you want to get more experience before you start buying properties. Great! Join someone else’s team and think about how you can be the BEST in the role that you’ve been appointed to. In This Episode We Cover: The five roles that will make scaling possible (and easy) for your future acquisitions How to choose the asset class that fires you up Using DISC scoring to decide who would be best for each role How Brandon built his team at Open Door Capital using this layout Finding a team where you learn, grow, and thrive And So Much More! Links from the Show BiggerPockets Forums BiggerPockets Youtube Channel BiggerPockets Pro Membership Open Door Capital BiggerPockets Podcast 481: Build an Unstoppable Real Estate Portfolio with the “Core 4” BiggerPockets Podcast 407: Buying 100+ Houses/Year in 4 Hours/Week Using Teams, Traction, and (Get this…) TikTok with Ryan Pineda BiggerPockets Podcast 444: 150 Deals at Age 22 by Putting Relationships Over Profit with Cole Ruud-Johnson How to Use the DISC Profile to Communicate Effectively in Business BiggerPockets Events BiggerPockets Facebook Group BiggerPockets Store Brandon's Instagram David's Instagram Click here to check the full show notes: https://www.biggerpockets.com/show483 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 483. You're going to build a team with the cash flow hopefully pays the team and the fees that you do when you buy this stuff will pay the team. So you're not like out a lot of money or even any money and maybe making money along the way a little bit. But your real benefit is the fact that down the road you're going to make millions of dollars off this portfolio. 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? I'm on. I'm on. It's Brandon Turner, host of the Bigger Pockets podcast. And here in my seashed, once again, I am with David Green. What's up, David?

You always hold up one finger when you say host. Should I hold up two fingers and say the co-host of the Bigger Pockets podcast? Host. I did that because Josh did that for years back when I was in your chair. And he said it. That's why we say hosts of the Bigger Pockets podcast. Yeah. This is the Bigger Podcast.

Yeah, that's how he did it. But where does the one finger come from? Why was Josh Jordan? I don't know. He always did that. He wanted to subliminally let everyone know he was number one. It's been drilled into our heads now. You see Josh and you just think winner.

You can't think anything else. Well done. Well done. Dorkin. Josh, well done Dorkin. That's a good nickname for him. Yeah. All right.

Well done Dorkin. Today's show is part two of our series on building a team. We talked about being a solar entrepreneur, a solopreneur. In other words, you're a small-time investor. You've got your first property, second property, fifth property, maybe single family, maybe some small multi. You're doing most of the stuff yourself. Maybe you're hiring a property manager.

Maybe it's long distance. But it's smaller deals where most people are at right now. And where I was out for a long time. And in some regards, I'm still there in some things because I'm a smaller investor when it comes to like my Maui properties. but then I'm a larger one when it comes to open to our capital. And so today is going to focus more on the scaling entrepreneur versus the solar entrepreneur. A little SS all there.

So what does a scaling entrepreneur mean, David? So basically when you start with a core four, you are doing a job and then you are finding four additional people making it a total of five. So we covered the four people you need on the team, but we didn't actually talk about what you're doing. And you're the biggest piece in the whole thing, right? There are four people that support you. When you scale it as something bigger, we're going to take your job.

We're going to divide that into five pieces. So there's five when you're a solopreneur. And then there's five when you're a scaling. So we have the core four. So we're going to call this the divide five. The divided five. The divided five it. That's what we're going with.

The divided five it is what we're going to go with here. If you guys get anything better than divided five in, please let us know. But it's like the five roles that you play when you're doing small deals. And you all know this stuff. We're going to cover them today. I can just say what they are real quick. But then as we get into the larger deals, you're going to find people to run those,

we're going to divide you into five pieces. So those five are, you have to have somebody in the beginning. This might all be you. So don't get stuck today thinking, oh, they're talking about hiring employees. So number one, you have to have somebody generating leads

and bringing the lead flow in. So we'll call that a lead gen person. Number two, you have to have an underwriter or an analyzer, somebody who's making sure the numbers work right and that you know how much to offer on it. Then you have the money raiser, the guy or gal who's raising all the capital for it. Again, the beginning, that might be you.

They're working with the bank, you know, bank financing, raising money, all that. Then you have an asset manager or maybe a property manager. Asset manager is kind of a bigger word. We'll talk about the difference here a little bit. And then you have kind of a finance bookkeeper type role. So those are like kind of the five roles that you play. And now there is a sixth role here that basically just means the person who puts it all together. Right. I like to call it a C-O-O or CEO. Like, that's probably you no matter what, but maybe you're going to be a piece of this on another team. For example, at Open Door Capital, I'm not really any of these roles. I actually have a full-time person on every one of these. In fact, some multiple people on each one. But I'm kind of like this aggregator, maybe like the person that makes sure that each part is working correctly. I'm a mechanic, but the pieces are in the engine working. So anyway, so we're to talk about these five areas today. Again, lead gen underwriter, money raiser, or investment.

relations, asset manager, and the finance side of things. And so that's what today's show is all about. So those five pieces are like your five Avengers. And the aggregator is like being Nick Fury. You brought the team together. That's pretty good. I like that. I was going to go with Captain Planet, right? Earth, wind, fire, water. When our rings, what's it? Unite. They form Captain Planet. He's a hero. Right? So like they come together and they, yeah, but that's actually, I like your example better. Nick Fury, because he brings them together. It's like, yeah, it's less egotistical. and saying, I'm Captain Planet. And their rings make me.

Although I will give you credit for bringing Captain Planet into a bigger pocket podcast. And I didn't think it could be done. Actually, that's a funny idea. Do you ever seen those like TikTok videos or YouTube clips where like celebrities have to try to put a certain word into a into a, whether it's a radio DJ has to say a certain word in their thing? Anyway, it's like a thing. Oh, yeah, yeah. We actually did that as police officers.

Did you? You would come up with a word of the day. Super troopers did that with police officers. And then maybe where we got it from. Yeah, yeah, you got to say now. You have to say something ridiculous in a radio transmission. Exactly. But we would come up with just like seven syllable words that there's no reason it would ever have to be done.

And whoever said it would get like a free dinner that day or something. Yeah, I'm thinking we might have to put that into a future episode of the podcast. Anyway, so if you ever hear a say a completely unnaturally long word. We got divided five it and Captain Planet. We're on a pretty good start. We are. All right. Before we get into that, though, we got a couple of housekeeping things they do.

First one being today's quick tip. Now I mentioned this a few weeks ago, but I'll say it again now. Bigger pockets now, if you are a pro member, you have access to something very cool that David and I did together. We sat here in my C-Shed recorded for almost four hours a video series on no and low money down investing. So if you are a bigger pockets pro member, you have access to that. So to get access to that, go to your profile and go to the upper right corner. It says like your little face up there in the upper right hand corner and drop down. It says like, I think it says promotions.

I should know this, but I don't know exactly. I think it says promotions. Go in there and you're going to probably find it in there. If you have any trouble, you can email support at biggerpockets.com, but it should be there. Again, that is a no and loaning down kind of masterclass that David and I did together. And it was awesome. Candidly, I think this is the best content you and I have ever. I think so do. Yeah.

When we were making it, it was like just that feeling it when you're in the zone. Yeah. You can't miss. I know four hours felt like an hour. And like you can break it apart. It's it broke up into the little videos. But yeah. If you're a pro member, you just scored.

Go check that out. If you're not a pro member, and I think it's only pro-annual, actually. So if you're not a pro-annual member, I don't think you have access to it, but something to think about doing in the future. Most investors spend all their time talking about their high-level returns.

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Actually, why don't we cover the core four first as a quick review in case you didn't listen to the last week's show. So, David, give us a rundown of what of the core four? And then we'll move into the divided-five-ed. I came up with the core four when investing in different markets from where I live because I was forced to leverage things that you could be tempted to do yourself. So the core four are the four people you need to invest anywhere. They're a deal finder, a property manager, a contractor, and a lender. All right. And that works when you are a smaller investor, small time investor. I don't understand that. I don't understand that. You can stay, don't misunderstand that. You can stay small forever.

I'm just saying like when you're a solo type person where you're doing almost everything yourself, that's a certain level. In fact, the book that I wrote with Brian Murray, the multifamily millionaire, we have volume one and volume two. Volume one is really all about that, which is like the smaller deals, like the stuff that you're doing yourself. And then volume two is all about the bigger deal. So it's almost like these two podcast episodes are kind of, you know, kind of playing with that same kind of framework. So anyway, core four works really, really well. And you still need those in your larger deal. We're going to, there's some overlap today. But you covered all four, right? I didn't interrupt you today.

And when you get into larger deals, the problem is you are not going to want to do every job that you were doing in the smaller deals the same way. Yeah. It becomes much, there's a lot more at stake. There's usually more complexity in analyzing a 200 unit apartment complex versus a duplex type of a thing. So you can get by with maybe weak analytical skills when you're buying a duplex. You can just use a bigger pocket calculator. Pro members get to use that for free. Correct. Once you move into something this big with all these moving pieces, it becomes to the

point where your lack of skills will probably start to show up. And they're compounded in everything, whether it's the lead generation component, the organizational bookkeeping component, whatever it is. So you and I have broken down the five roles that are needed that the investors typically playing themselves when they're buying smaller deals. Yeah. Let me tell you all a little, a quick little story. I've said it before in the podcast, but if you haven't heard it, with Open Door Capital.

So my company is called Open Door Capital. We buy mobile home parks and apartments. In fact, we're raising for a big apartment deal right now. Odcfund.com. And we are that, I think we have 13 people now on the team or something like that, like between employees and, you know, team members and contractor, independent contractors. But we got like these 13 people, right? But that started.

That whole entire business started because I was in Nashville, Tennessee. And I saw my buddy, Seth mostly, who shout out to Seth, who runs a company called Open or sorry, full circle music. Full circle music is awesome. They produce a bunch of like Grammy winning songs and stuff. And I saw his team, how he had this team of like five people that were amazing, like top of their game,

Grammy winning people, amazing success. And I was like, I want that in my life. I want that like top people that like really get along well, have a great culture fit doing impactful, meaningful work. And I went home from that trip going,

how do I build that? And then I went to a conference. It was I think was Joe Fairless's best ever conference, like three years ago or four years ago, three years ago. And I saw like these investors that were doing huge, like what we're talking about today, these larger multifamily deals. And I was like, dang, I got to build that. And so all that combined is why I built open door capital. And I started with the divided five that we're talking about today. I'm going to laugh every time I say divided five in because it's funny. So what I started with, I said, well, what would I need to build a team

like that could just buy big deals? I'm like, well, I'm going to need somebody who can lead gen and get the leads coming in. I'm going to need an underwriter. I'm going to need a money rager, an asset manager, a finance person to do all this. And that's where it started. And what's different about how I did Open Door Capital than any other business I've started is I started it from let's build the team and then go after it. I mean, I started with the asset. I knew I wanted to buy mobile home parts to start with. But I still said, like, let's build a team now. I'm not going to do every one of these roles and then one by one outsource some of the people. I'm just going to start from the beginning doing this. So not that you have to do it that way, I'm just giving you

guys a little background story of these roles are important for anybody who wants to scale their business. In the beginning, it might be all you or you might decide tomorrow to put together a team of five partners and each of you take one of these roles. Or maybe you hire five people and they're all the employees or maybe there's a mix of the two. But this is what you're going to need to go forward. So cool. Anything you want to cover before we jump in maybe asset class picking that? Do we want to do we start with asset class? Is that like before you build your team, you got to kind of know what you're doing about it? Yeah, I think that's a good way to go. So basically our theory here is that you start with the end in mind. So the first question you have to ask yourself is, what do I want to buy? Why do I want to buy it? Yeah. And then you're going to work backwards,

putting pieces in place from there. So when you decided you wanted to get into mobile home parks, why did you pick that asset class? And what was that really like process like as you went over your option? Yeah. I interviewed a few people on the show that on the podcast here who did mobile home parks. So now we just thought it was sounding intriguing. And that's about, I mean, there are benefits to mobile home parks. I could brag about them all day long why I love them, but somebody could also give me equal good reasons on why vacation rentals are the best thing ever. And somebody could give me equal good reasons on why, you know, whatever, building a small, a single family house fund is a better idea, right? They all work, all this work. So really,

I just had to pick something and go with it. So I picked something that I felt some fire in my belly about, like where I was like, oh, this is cool. I like this is cool. And I just followed that fire. It's a phrase we say a lot here on the show is follow the fire. So I just followed the flyer and I said, okay, I'm going to stop looking at a million different things and thinking about everything and not taking action because too many options lead to inaction. So instead I just said, I'm going to just pick this thing and go with it. So that's how I chose it. Now, there were probably a few components of it that allowed it to work for what you actually wanted to go do. So one is you have to buy an actual product big enough to support all the people

on your team. Yes. Right. So that's why you didn't pick duplexes. Correct. Local home parks are large. You can scale. Now, I could have said I'm going to go buy 50 duplexes over the last couple years. And then we could have built a duplex fund. Right. You know, it's just, it's a different way. This is such a mindset thing, right? It's, I'm not thinking of it as an individual. I'm buying investment properties. I'm thinking about as I am building a company that happens to trade in this, the asset of mobile home parks for me or could have been anything. It's a great point. The way I would, I would look at it is you are buying an income stream that happens to be a mobile home park. And out of that income stream,

you were going to pay all the different people on your team. Yeah. And because it's a company, your goal is to have more money left over at the end than what it was that you spent, that would be your profit. Yeah. Now, one of the benefits of building a company based on real estate is that it's not just the cash flow. In fact, it's probably the least important part in the whole picture. Can you share a little bit about what the goal is the vision for like 10, 20 years down

the road? Sure. In fact, I was talking to this group of people yesterday doing a call with them about a lot of them were in e-commerce. And I was like, e-commerce is great. I love it. I've started random e-commerce business over the years. They've almost all failed.

And the truth is because I just, I wasn't as passionate about it, but they do work. You can make a lot of money in e-commerce. You can make a lot of money selling courses or being a coach or a consultant. All those things work. But at the end of the day, a simple Google algorithm or an Amazon algorithm can completely change your business overnight and shut you down. When you're a consultant, you go to, you have a car accident. Your business should shut down because it's dependent on you.

There's so many problems with most businesses that people run because they're so easily destroyed. So, like, even I wrote books, right? You were written books. We make money off book selling. We sell books, right? It's good money. I like making it. But that could shut off tomorrow.

Y'all could stop listening to this podcast and then stop buying my book and not buy the multi-family millionaire and then I don't make that money anymore. So many businesses are like that. What I love about real estate and specifically building a company that transacts in real estate, like we're talking about the larger stuff, is that it's so long-term secure. Like, I don't worry about some small. change in Google's algorithm, destroy my business. Because real estate's been around for thousands of years. It's going to be around for thousands of years. And yes, we adapt to make changes. But

anyway, just that's what I love about the real estate side of things. What was your original question? Yeah, the cash flow isn't the most important. Oh, yeah, yeah. Yeah. So what I'm actually building, the cash flow is great. But just like if I was going to go build a tech company, the profit you make is good, but it's the fact that I can sell that tech company someday that I really want. So like, I with the larger deals we're talking about today, what I like about is that over time, we're going to improve the value of them and you're going to do the same thing if you get into the larger deals. You're going to build a team with the cash flow hopefully pays the team and the fees that you do when you buy this stuff will pay the team. So you're not like out of a lot of money or

even any money and maybe making money along the way a little bit. But your real benefit is the fact that down the road you're going to make millions of dollars off this portfolio. So yeah, cash flow is important, but it's that it's everything else. It's the appreciation of that the property, the loan getting paid down, the tax benefits, all that. And then the resale eventually, that's going to benefit you. So now we're not relying on appreciation, but we're doing it's capitalizing in all, like, of the wealth generators in real estate, which is really fun. And when you do it with the deal that's big enough, you can then leverage other people. So you get the best part of business. This is when you only do the part that you enjoy.

The part that feels light to you is the only part you have to do when other people do the heavy stuff. Yeah, that's true. Yeah. So anyway, so again, I'm not saying anything wrong with starting internet business or anything like daddy. They're just so people are clear. I'm not saying that. I'm just saying like it's short term income. It's great. It could be great. income, you might make a lot of money for it, but it's going to end at some point. The same is true for flipping or wholesalers, right? The market could change. And all of a sudden you can't find deals anymore. But the fact that I own whatever, our 2,000 rental units, like, I own them. They're mine. Like, I mean, and my investors who invested with me. But they're there. So, yeah,

last thing I want to say before we jump into the divided five is you might be wondering, well, do I even need to listen to this episode today? Because I'm not trying to build a big, gigantic company. I'm trying to buy my first duplex. I'm trying to house hack. I'm trying to do the birth strategy on little deals. David, what would you say to that? And I'll get my thoughts to. I would say the first thing you have to understand is if you get this concept, when you're doing the smaller deals, you will recognize what role you're performing. Yeah. And that's important to you because there will be parts you don't like, that you don't enjoy that you feel heavy, that cause you fear, that you naturally recoil from. And if you don't understand, you don't

hate real estate investing. You just don't like analyzing. Yeah. You just don't like investor relations. You'll think I shouldn't do this. This isn't a worthy pursuit. I guess I should go watch dancing with the stars, right? I should go back to working at Starbucks. If you recognize every time this thing comes my way, I can't stand it, there's actually incentive to scale. Because as you grow, you get enough being on the bone that you can get other people doing that and the job becomes more fun the more you do it. Yeah, that's very true. So let's dive, let's dive into it. Number one, let's talk about the lead gen person. So, you know, we talk a lot about a bigger pockets in on the webinars and here at the podcast. We talk about the laps funnel, LAPS. That stands for

You have to get leads that come in. Then you got to analyze those deals. And then you got to pursue them, like go after make offers. And then you got to get success once in a while. It's just a giant funnel. So the beginning of the funnel is going to be the lead gen person. So trying to find somebody who can help you generate leads is actually probably one of the hardest roles. But for most of you, I would say, not everyone, for most people, that is you.

Like you are the lead gen person. If you are the person putting together this team. unless you do what I did, which was actually hire somebody to help with that up front, because I didn't even want to do it. But the cool thing about the larger deals is almost always they're focused on brokers. Like you're dealing with commercial brokers, which is very different than real estate agents. They're similar in some regards, but also very different. Have you ever dealt with commercial brokers?

I know you do mostly residential stuff. It's more infrequent when I do with commercial brokers. Yeah. So the big difference is the way that residential used to be done, let's see back on the day, and you can correct me if I'm wrong on any of this, but back before we were born, and before the internet, is brokers, like real estate agents,

would get a listing. Like the guy at the hardware store he meets says, I want to sell my house. He says, great, come on down my office, we'll sign some papers. He goes to the office, signs the papers,

and now that agent has the listing. They then fax it or mail it or whatever to all the other brokers or agents in town that they want to. They don't have to give it to everybody. They just call up their other agent friend, John, and he said, hey, John, the guy at the hardware store

I just met wants to sell his property. Do you know anybody wants to buy it? John at the hardware store, I mean, John and the other agent says, yeah, I think I've got a client that was looking for a house and they come together. It's very personal related. One broker knows another broker. Then the internet changed all that and made the MLS happen. And now there's a million agents and everyone can see everyone's deals pretty much all the time. And now it's just this free for all, like giant box where all the properties are and all the agents are just playing in it. Commercial real estate, what the big deals are talking about. And again, you don't think in terms of unit number here. We're just talking about doing the larger deals though. But they typically. operate the way that residential used to. Broker gets a listing from the guy he met at the hardware store. It just happens to be an 80 unit apartment complex.

He calls up a couple of his broker buddies. Well, it calls up, first of all, his clients. Then he calls up his broker buddies. And after all of that, if they can't find anybody to buy it, then maybe they throw it on like loop net, which is. Which would function as an MLS, but it's not the same as an MLS. Because it's still very much, like agents almost, like most agents just go put on the MLS.

That's the first thing they do. They don't call around every one of their clients and all their agents. They don't do a lot of pocket listings. but commercial world say it's all about pocketless things. So all the point I'm trying to make here is that you, depending on what asset you're going into and what size of properties you're trying to buy, if you're trying to scale your business, you may be the asset, I mean the lead gen person yourself by you're talking to the brokers. And we spent a long time on the last episode or the one two weeks ago, oh, sorry, two episodes ago last week where we talked about the small deals. We've done a long time

talking about how to stand out to a broker or to an agent or to a lender. So we don't need to rehash that now. But basically the idea is you need to be professional. when you present you. And I'll say it's even more important that you do that with commercial brokers than residential agents. because you can find the deal on the MLS and then if you're a jerk to the agent or you're not very personable. Yeah. Or you can write an offer and if the listing agent doesn't like you, but your offer is really good. They're still going to, they're still going to accept your offer a lot of time. With commercial brokers, you will never even know that there was a deal out there if they don't like you. Yeah. Yeah. They'll blacklist you and it's a real thing that happens. So

yeah, reputation matters a lot more in the bigger deals. Now let's just say you do want to build, you want to scale your business, but you want to skill it with single family houses. So you're dealing with the MLS. But you don't want to do all that work yourself. You still might bring in person on your team. Again, like the divided, five it. That's just in charge of lead gen. Like that's their job is to generate leads.

In fact, like, I'll give you an example of Ryan Paneda, who's a buddy of mine been on the show a couple times out in Vegas flipping houses. Like he has multiple people in his company. That's all they do is lead. So they're doing, you know what? I think we're going to do a TV commercial or we're going to start a direct mail campaign or we're going to go and talk with wholesalers. Ryan doesn't do that.

Ryan doesn't do that job at all. Just like, I don't do that job. I hardly ever talk to brokers. Unless I need to, like, add some weight. Like, it's Brandon from the podcast. Like, I don't talk to brokers. My team does that. Right now, we have Walker and Jay.

They're the ones in charge of that side of things of the lead gen. They're talking to agents. They're also generating off market leads. They're sending their direct mail marketing. So finding that person, I'm curious. If you are, if you're trying to find somebody on your team who's going to be the lead gen guy, what skills do you think that that person needs to have? That's a really good question.

because I would say this is the most important component of any business. And real estate is no. If you can't get leads, you're dead. Yes, it starts at the top of the funnel. So the first thing you're going to look for when you're looking for a person who generates leads is a person who has a strong motor, first off. There's no one who's generating leads that just is afraid to talk to people that wants to sit in their basement. Your underwriter can be that person. It just wants to be away from everybody and sit in front of a screen and they sort of act as a filter.

You bring things to a filter. You run it through a filter. The filter doesn't have to go look for something to get to catch, right? You need something to go out and hunt. Yes, you need a hunter that's going to push things through a pathway to go fill up that filter. So a motor is the number one most important thing. That means they have to be motivated. It's either they got to be motivated by money.

They have to be motivated by talking to people. They have to be motivated by pleasing you. There has to be some high level of motivation because otherwise they're not going to be running around going to look for leads. Then the next thing is they have to have an understanding of human nature. This is when people miss a lot of the time. You can send a billion letters to people. And then when the phone rings, if they don't understand what to say to that person, it was for nothing. You can send a bunch of letters and send it to the wrong place, right?

You really want to be sending them to distress properties, people that are likely to respond. If you just shotgun letters all over the place, you're not going to be very successful. So that's another big part of it is understanding human nature and what makes people respond to what sort of being likable. The last thing I would say is a person of influence. They need to have a big circle of people. They either need to build a big circle or they already have a big circle. So I always tell people the best thing I could ever find for my real estate agent business like a lead generator would be the most popular person in high school who's still very popular, tons of Instagram and Facebook followers. Everyone listens to what they say and all they have to do is join my team and route the people that listen to them are away.

That's like the best position ever being. Now those people are hard to find, but that's really what you're looking for. Yeah, that's a good point. One thing I would add that I look for in that person and that works really. well in my team is I need people who are very process driven. Like it's too like not necessarily like an under like an underwriter has to be very like high C on the disc profile. Right. They're very like like, you know, they want to be in a spreadsheet all day. I'm not necessarily talking about that, but I need somebody who's good with like, let me let me back. I'll back into this explanation this

way. We all like finding deals is actually pretty simple, right? Like you and I could right now go generate a bunch of leads here in Maui and find properties to flip, let's say. We want to flip, right? What would we do? We'd probably go out and get a list from like list source. of like people who are absentee owners that maybe have owned their property a while. Then we're going to go order a bunch of letters and then we're going to mail those letters out to all those people.

At the same time, we're going to drive for dollars every Saturday for four hours. Then we're going to answer the phone every time it rings. We're going to put them into our CRM. Then we're going to follow up with those people every single month

when they start calling until we buy their property. If you do that, you will, I guarantee we'll buy properties. It's very simple how to achieve property, like how to buy properties in real estate. Why does nobody do it? Why do I not do it?

Why do you not do it? Because it's very, you and I, are not process driven people. Like we might like processes for other people, but you and I are not one that like every single week we're to drive for three hours and check it off and make sure that was done and done well. And then try to improve. So what I found like when I hired Walker and now Jay is they're like you, you should see their spreadsheet. I should, and it's internal, but I could, I would love to show you. It's basically like they have a list of like 30 activities. They do every single week. Every week. It is everything like like like or like every once a month,

but it's on a schedule and they have a red light green light they put in the spreadsheet. And did they do it or not? Did they read. reach out to seven wholesalers this week of manufactured housing or of whatever. Did they reach out to five brokers this week? Did we do send this many letters? Did we send a gift to this person? Like all these actions that are lead measures that will generate the results you want. That's what I want in a really high level lead gen person is somebody who does that in other areas of their life so that they'll do it here as well. Because that it's hard to get people to do that like especially W2, especially like people who aren't like don't have this like thing. But it's, it's harder for me to do it.

Yes. Like it's easier when it's your job to do it because like they have to do it. And then we'll talk about this later, but I guess we can talk about it now. We we wrap our entire business in some kind of business system. So we use EOS from traction. The book traction. We use EOS. And that makes sure everyone has those defined. And so everyone's following their process whether they want to or not. But anyway, bottom line is I'll get off my soapbox. Process driven people. Yes. Super important. So yeah, lead gen. You people are valuable. We want you. And if you're that kind of person, right, listening to this. By the way, another piece of this whole. Another piece of this whole. conversation today. You might be thinking, well, I'm nowhere near being able to build a team. Great. Could you be on somebody else's team? Could you be a partner of another team? And I mean, let's say you and four other people came together like Captain Planet style, right? And each of you took 20% of the general partnership. Could you do five times more deals if all you were doing was what you feel light and awesome about doing? And everyone else was doing what they feel light and awesome of doing. And together you just buy a bunch of big stuff. I bet you could do a hundred times more than you could do on your own by only getting 20% of the company if you divide it up. Or if you worked for somebody else just for a year or two to learn and got no equity, who cares?

Like build that knowledge, get those systems down and then maybe you'll use it five years from now. So that's why this stuff is important too, is not just you as the leader of the team, but maybe you as a member of the team. So that's really good. In fact, I would say there's way more people out there that should be on a team than should start a team. And that's just, it's just common sense. We call the person who starts a team is called an entrepreneur. The person who joins a team is called an entrepreneur. They build their world inside of someone else's world.

There's only one Apple. How many employees does Apple have? Apple's nothing without those employees. I mean, is there even a number we could throw out? Yeah. Too many to even count. Too many.

Yeah. Yeah. So don't think, don't hear this and think, I got to start my own Apple. I got to start my own Apple. Even if you do want to start your own Apple, you're probably going to work for somebody else's IBM before you actually go do that. So part of, I think, the barrier that stops people from getting into real estate investing, seriously is they're trying to do all of it.

If you know where your strengths are, join somebody else's team, work for them, learn, and then you can either start your own or you can just build your own thing inside of theirs. Yeah, that's really good point. And if you're somebody who you're thinking right now, like, oh, I could be a lead gen person for somebody. I'm process driven. Great. Like start working your process.

Even if you can't close a deal, start working that process. Maybe on smaller deals. Maybe you start wholesaling. That's like that skill of what we're talking about lead gen is really like what a wholesaler needs to be amazing at if you want to do small time. Like the guys like, you know, like Cole Rudd, we interviewed a really. Rude, sorry,

I think of his name's Rudd. Cole Rood. He's going to kill me forgetting his name wrong. Cole is like a 21 year old kid, 20 years old. That means young, like 21.

And he does like 100 deals a year. Why? When I think of what makes Cole amazing at wholesaling and flipping he does both, is he is so process driven and he has a big network and he just shows up

and he does the obvious simple things that you know you have to do to generate leads, but nobody does. It's like somebody, We all know how to go to, you know, lose weight. We all know how to go to the gym and lift weights and run. It's just we don't do it.

So you need people who actually do it and can prove that. That's exactly right. Yeah. Cool. All right. Well, let's move on. That was the first one. You got to get that lead gen person again.

It might be you in the beginning. Great. Just think of it. Okay, that's one of your hats. If in the beginning you're doing all five of these, great. Just how can you eventually divide yourself up? So you have other people doing this so you don't have to work as much. Eventually you can work a few hours a week and everyone else is working and building

your empire for you. Number two. You got to have somebody who can underwrite the deals. Underwrite's a fancy word for analyze. It just has one extra syllable, so it sounds better. But you're basically running the numbers to find out exactly how much you can pay on a property. And again, it's another difficult role to hire for. But what do you look for in an underwriter?

What would you look for? Your underwriter is going to be your filter. So the first thing you're looking for is somebody who functions as a filter. What a filter does is it takes, you know, like a stream of like, say, liquid. So like it's in a car. and it catches impurities and it holds them back. So what underwriters, their first job that you're hiring them to do is to eliminate all the properties that aren't going to work.

Of the properties that could work, the underwriter's job is to now tell me, pay me a better picture of what it would look like if we bought it. Yeah. Okay. A lot of people get in the habit of thinking the job of an underwriter is to say, well, here's what it would look like if you had it. If you know right off the bat, you can disqualify this property before actually doing it, you should.

It's like the 1% guideline that we talk about. You don't have to meet the 1% rule to buy a property. It just tells me, is it worth putting into a calculator to even go over if it's at 1% than it is? If it's close to 1% than it is. So underwriters are very detail-oriented. They care about the details. They know that those things matter. And it feels light to them to look at all the little tiny pieces and organize them.

In fact, part of being a good underwriter is having, and this is for everything, whether it's a loan that you're trying to originate, whether it's a property that you're trying to buy, whether it's an insurance policy that you're trying to put together for your company. They take chaos and create order. Underwriters take all this stuff that's flying around all over the place and they put it in an organized fashion so that it could be quickly read and understood. Yeah, that's really good. That's exactly what they do.

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then go to passive pockets.com slash summit and use a coupon code podcast to save you $50 off your registration. Can you talk about the disc profile for a minute and what? Yes. I mentioned earlier high. So let's talk about what those are and why that matters. The disc profile is a personality assessment. I wrote an article on bigger pockets.

If you Google DISC or searching on bigger pockets, you should find it. that splits the human personality up into four components. Your D score is how decisive you are. It's how quickly you make decisions when you've never been there before. Those tend to be drivers. Those are usually the person running the company. Your eye score is how likable you are or how much you want to be liked and how personable you are.

It's how much you value human interaction. People that are high eyes tend to value relationships. They're the most fun. You like being around them. Those are kind of like the social butterflies, the people that everyone just, I just like that guy. Every time I talk to them, I feel good. That is usually you're like investor.

relations type person. Your S score is how much stability you like in life. It measures how much predictability and pace you like. High S's want the same thing all the time. And then your C score is your conscientious or your compliance score. And that measures how much attention to detail you tend to value. So that would be your architect, your engineer, your doctor, your lawyer, your underwriter, people that really like, they know every policy. If you're a police officer, that's a detective. That's a person who knows every single crime, every single law and can sit there for four hours looking at evidence and trying to piece it together. So underwriters, I see what you're going with tend to be higher on the C score. They really like diving in that they're compared to a

beaver that wants to chew through a tree. They will chew on that same tree over and over and over till it finally falls. That's really good. Yeah, I definitely, we run a disc profile on everyone that works for Opener Capital and we want to find people for the underwriter role. Like when we do that, we want people who feel light and easy when it comes to spreadsheets. And they're usually a high C, usually a higher They want that like that thing. When it comes to like investor relations like my guy might we'll talk about that in a minute. My guy Mike Mike is like definitely a high eye. I'm a high eye. Like I want to be liked. I want people to like me. And for that reason, I'm not a super high D. Which these are a little bit more driven forward like the, you know, the hard hard charge of CEOs. They don't mind that difficult conversation. You are much higher D. Right. So people probably like when they meet this in person, I'm much more like like give me a hug everyone. And you're a little bit more of like the everyone's like, oh, it's David.

at me. Yes, I get that all the time. Because you're just like, you're like, you're blunt. You say what you're thinking and like this is what it is. And it's just, like our and that's why these tend to make better CEOs where eyes tend to make better of invest relations and seeds tend to make better. Now, I don't want to like box everyone into a thing and say you can get out of it. Right. But when you're looking to build a team, look for people who like really love, just really love to analyze deal. Well, the problem is if you're not a high C and you're playing the analyzer role, you're going to hate it. It's just going to to feel heavy. It's going to drive you nuts, right? For me to be in the high eye role,

I would burn out of patience very quick. I think people are surprised because we do the podcast. I'm, I'm a high eye when I'm podcasting. But when we're done, I'm done. That's about all that I had to give. So if I was nothing but just walking around meeting people having to do like the thing that you do really well, I'd be in a bad mood all the time. My energy levels would be really, really low. So this is why this is important. It's the same principle, breaking up the job of investing into the parts that you like, understanding where you fit on the disparate. So that you can know why certain parts feel heavy, why certain parts feel like. It's that self-awareness and investment awareness that makes a really big difference.

Yeah, totally 100% agree. All right. So you got that deal under the deal analyzer the underwriter. They need to be comfortable analyzing a lot of deals. And again, this is framed within some kind of organizational system because like how many deals are they analyzed? What are they analyzing? What makes it a good deal? Yes.

When Walker came into our team, the thing I loved about it was he took our spreadsheet, just completely re-hap, like, tore it apart and built a whole new one. He's like, this is not how you underwrite. This is how you underwrite. And like, he just like, rebuilt the whole thing. And then he continually made tweaks on it for the first year as just kind of an intern until we brought him on as like the full-time guy. Now he's kind of CEO, kind of running everything. But again, that was that that underwriter, very important role, especially if you don't want to do it, get somebody else to do it. The problem with underwriters, the ways that you can use them wrong is if you don't pay enough attention to them, because they're just going

to chew through that tree you put in front of them. Underwriters will run things through spreadsheets, we'll look at all the details and they will rarely ever ask, why am I doing this? So you have to be paying attention to what they're doing. When you use them right, it's like using a sniper in the military. Don't ask them to do anything other than make that shot. That's where they're really good. Find someone else to go line up the targets for them, find somebody else to make sure that their weapon is loaded. Find somebody else to kind of shield the sun from getting in their eyes and make sure that they're hydrated. Those are positions that other people can play. you want to use that underwriter to just take that shot, hit that target, and then you get the number that you can come back with and say, would this work or not?

Yeah, very much so. And now these two people we're talking about here. We've got the lead gen and the underwriter. They're both on like what we call the acquisitions team. They're like almost all these people are really part of acquisitions, except for one. We'll talk about in a minute. But another piece that comes in, this is not a role, not part of the divided five. But because you, for most people, this role is shared for a while. And that is the due diligence person. So I generally speaking, we put our. underwriter in charge of due diligence. Because due diligence, what I mean by that is they're going to be checking all the leases to make sure that they, all the leases were signed correctly. They're going to be checking all the rent roll. They're going to be checking all the tax from the, you know, from the county. So why would we have an, why would we have an investor? I mean, underwriter do that because it's the same.

It's just checking boxes and documents and spreadsheets. Something that feels right in their wheelhouse. It feels right in their wheelhouse. So eventually maybe you'll add somebody on for that or you'll, you'll outsource that. But for most people in the divide. five ed, like that underwriter analyzer slash due diligence person. Now, due diligence will also be done slightly by some of the other people in the team. But we are underwriters kind of lead the entire process. That's good. All right. Number three, another piece of the acquisitions

team would be the money raiser. It's actually called, we call it typically investor relations. And that is who's in charge of raising the money. Now, it's a little different than the bank person. And I'll talk about that in a second. They could be the same person. They could be separate. But when I talk about investor relations, I mean, if you're going to put together like a syndication, you're going to go raise money from multiple investors like we do at Open Door Capital. We raise money from limited partners. They put money in and we buy big deals. Somebody's got to be good at talking on the phone. I mean, people, I mean, we raised, I don't know, back when we raised for our fourth fund just a few weeks ago, I'm not exactly sure what day this episode comes up,

but we just, when we're recording this, we're just closing it here this week. But that fund, we raised $20 million in seven days. from like hundreds of investors. Now when we did that, almost everybody wanted to get on the phone. And because that just makes sense, right? You're gonna go give my company a quarter million dollars. You're gonna get on the phone and you wanna talk to somebody first just to make sure everything's good,

just to cross your T's and dot your eyes. I would do. I just wanna feel good about it, especially if you don't know me personally. So who's gonna have hundreds of phone conversations? Or even if you're gonna raise money from 12 people, who's gonna have those 12 conversations? Or do the webinar that shows the power of your deal

or any of that stuff. That's investor relations. So that's why that investment relations I mentioned earlier, the high eye is so important. When people talk to Mike Williams, my guy, they're like, they're like, he is the greatest person I've ever met. Everyone says that. Every single person who knows Mike says he's like the greatest person I've ever met. And I love that about him. And Mike's going to be talking to a lot of people in that role.

Yeah. If he doesn't enjoy conversations of human beings, they're going to get. I'm talking to him last night. We went and why it was like outdoor movie under the stars with our kids because we have young kids that are like best friends. And Mike and I are talking. And he's just like giddy. He's just like, dude,

this is so much fun. I love this. I'm like, I'm like, what do you mean? He's like, I just, I had like 15 phone calls today.

And everyone's like, how did I get the money in right away before we close the fun? Because it's like filling up fast. And he's like, I just love this. I just feel the energy coming off of him, how pumped he was.

And when I think of that, I'm like, oh gosh, that sounds horrible. 15 back to back phone calls all day. Like, that's all you did to sit in a chair and talk to people. And he comes off of that so energized.

Thank God. for people like Mike. Because I just, I'm not that guy. Even though I'm a high eye, I just, I don't get energy that way. I want people to like me. But like, I don't want to. He's afraid, oh, after this phone call, there's no one to talk to. How do I find a person? We're like, oh my God, another phone call. It's coming up, right? Yeah. So if somebody wants to talk to Mike, how would they get a hold of them? Generally, the way that most people do it is they go to our website. Odccfund.com. But no, they go to like our website, they submit their information, like, you know, give us their email address or whatever. And then usually in an email go back and forth.

and then they'll say, how I want to talk to me, you Mike, and then he, like this is why, this is why he's good for this role. And if you're looking for an investor relations person, they also create systems as well. Everybody is system driven that we,

what we hire because it's so important. But he's got systems for, okay, the email goes here. This is the link you click to book time on his calendar so that he doesn't have to go back and forth with that. Then they book a time. Then he calls them because their numbers right there in his calendar.

That whole thing is a system that works out. So that's how it typically works. You know, they go to the website. They contact them. It works really well. So yeah, system driven people.

people, investor relations. Now, the other half of that is the bank person. The reason I say that sometimes it's the same and sometimes it's different because everyone's personality is different. And this could be a whole topic of a show right here in itself, but you kind of build a little bit of your team. How do I say this best? It's like you start with the vision of what you want, right? We talked about your asset that you want where you're going. Then you find the roles that are going to fit there. But then you have to go back and tweak things based on the personality of who you get. For example, Mike gets a ton of energy being on the phone with people. He would not have a ton of energy being on a phone with a bank. I just know Mike would just not want to sit for six hours

on the phone with a bank going back and forth with documents to the bank and having to sign everyone and like that side of things, he just thinks is crazy. So that role is split between our underwriters who deal with a lot of that stuff and our finance guy, which we'll talk about here in a moment. So I'm just letting everyone know there's a little bit of flexibility in this role, the person who's in charge of the lending. Again, that might be you. We just want you to start thinking. These are the hats you wear if you want to scale so you can start putting people in in the process. So yeah, the bank person, a very valuable person also probably should be a high seat because it's all that information is in spreadsheets, all the loan applications.

All that stuff is just document, document. High Cs can handle a lot of that. Hey, I need another paper. Oh, you're right. I have to complete the packet. If it's 99% done, it's not done. and that'll drive a high C nut. So they're going to enjoy having to send more paperwork back.

So one thing I just started thinking is with your company, there may be times where you pair Mike and Walker. You pair your investor relations with the guy who likes talking to banks and they work together to handle the things that they're better at doing. Yeah. And a lot of things are that. It's like making a, it's like you have all these ingredients.

And depending on the deals, depending on the food you're making, you need to pull different things in. So it might be a bank meeting between me and Walker and Mike. Or it might be a meeting between Walker and, Jay or might be, you know, and the bank or whatever, like, depending on the situation, you bring in the right people. And the great thing about that is like every person, I don't know if I made this clear

earlier, but one of the benefits of thinking of your business this way is that each of these people then are not only personality driven to be awesome at this role, but now they've got experience and they're gaining experience. Every day they're getting more experienced in this one role. So everyone gets better and better. It's like the Avengers to go back to the analogy, right? Like the Hulk gets stronger and better and Tony Stark gets better and he's got. better equipment. And as a team, everybody just tends to improve, which is super cool to see. So if

you're trying to scale, you got to find these people. And then your job is the leader. If you are the leader of this team, is to develop them, to be a multiplier. Like we talked about that book multipliers. Great point there. Your job is to multiply their skill set and to help them and to build the systems maybe as a whole. Like I put an EOS. That was my job because I'm the group leader. I'm Nick Furious. I'm saying, hey, this is our framework we operate within. And then now they operate within it and they're all excelling. So yeah, great point. Thank you.

So that's investor relations. Quick note on that. I mean, we've talked about this on numerous other episodes lately because we're talking a lot about multifamily this month and next because of the multifamily millionaire. But just understand raising money. There are a lot of legal things to do and don't do. So just be careful. There's 506B, 506C.

There's crowdfunding. There's all these things. And if you do it wrong, you can end up in jail. So just do it right. And make sure your investor relations guy knows the laws and they're studying that stuff. That's part of being an expert. All right, moving on. Number four, let's actually go this one next. Let's go finance next. So again, in the beginning, might be you, might be hired out. So my team, we hired a guy named Micah.

So Micah is our finance guy. I kind of put finance, bookkeeping, the paperwork, the tax stuff, the notary signings. All of that is like this role on the team. And again, it's typically, there's a lot of high C roles in this in your business. But it's that type of role again. Because I hate doing that stuff. I can't think through a spreadsheet and try to bookkeep and check what every dollar went. If we're raising money in a fund, who's the fund administrator, who's taking care of all that? Well, the reason there's a lot of high C rules. If you break down in business, the Ds and the Is tend to be in the front of the funnel and the S's and the Cs tend to be in the bottom of the funnel.

Okay. Okay. So D's and I tend to go be more self-driven. They're more initiative. Like your top salespeople in real estate are a combination of D and I or I and D. you're um the s and the C are more more uh comfortable with being handed something like you set up the target I'm going to shoot it right they're a fish cleaner versus fish catcher would be another way to put it that's how I look at it so in this business that you're building you're going to have

more S's and Cs because typically you are going to be functioning in the in the front end the D I rolls right you like you're going to go out there and you're going to load up a the funnel for people to analyze you're going to help raise the money once you've got those pieces in place you're like hey I need someone they can talk to the guy who I'm raising the money. from, hey, I need someone that can analyze the deal that I went and found. So there's a rhythm between like fish catching and fish cleaning is what I always call it. And really business can be simplified and understanding it in those two roles. Now, most people that ever had a job in their life, they were a fish cleaner. You're rarely ever hired to be a fish catcher. If you just think

about every job from your first job to now, it was almost guaranteed to be you were cleaning a fish somebody else caught. And so what makes it tough when we're talking about this is your mind is trained to think. It is my job to do what somebody puts in front of me. When the customer in the door, I ring, I talk to them. When they walk up to me and say, here's the spark plug I want to buy, I run it through the cash register. And that's all of business we ever know. We think that's what work is. That's not. There was so much work that was done before that person ever got there. And when you step into what we're talking about here, you're responsible for all of it. So you're typically going to be looking for people that are more S's and Cs to play those support roles or

those fish cleaning roles. But that's okay because that's what they like. That's what most people are comfortable with. In fact, if we said what makes most investors give up fail or never get started, I would bet you that that mindset of I'm a fish cleaner, and now Brandon and I are saying, you got to go catch fish. We're talking about how to catch fish. We're talking about CRMs and cold calling and direct to seller and all this type of stuff. Like, they're not comfortable with that. That's not a thing that most people have ever had to do. Yeah, that's a really good point. Really good point. So yeah, so find that person who can keep track of all the books and paperwork and all that. Now, I will say this one thing that David talks a lot about in the long distance

real estate investing book, when you talk about the core four. It's almost like, I don't remember if you use the analogy in the book or if we've just talked about it since, but it's like checks and balances with the government, right? One government entity checks the other. Judicial branch, checks the executive, which checks the legislative, which they all work together and make sure nobody takes over too much power. That's an important thing to keep in mind here as well. When it comes to like raising money, especially trying to scale your business, you can scale your business and then get everything stolen from you and then lose everything, right? So just make sure you have those checks and balances. The finance guy is going to have a lot of power to be

able to write checks and pay bills and all that stuff. Just make sure you have other checks for maybe the underwriter, then checks that work. Or maybe there's two phone calls every time there's a wire done. Like your job is to protect the money of the people you're raising money from and then like first job don't lose money. Second job grow money. So having that that checks and balances in place is super important. And that might also play into our fifth role of the divided five it, which is the asset manager. Because that asset manager is going to also check a lot of they're going to check a lot what goes on, but they also need to be checked to make sure that they are not, they don't have that opportunity to steal as well. Yes. And either steal or just be bad

with the money and have nobody looking after what they're doing. So let's talk about asset manager and we'll talk about how that differs from property management as well. So asset manager. So the asset manager's job is basically once the deal is completed, it's been purchased. You own it at that point. They're going to be the ones that run it. Right. And this doesn't get brought up very often. When we go on the podcast, we typically talk about how to get a deal, how to get a deal. That's everyone starts at the front of the laps funnel. They're always like, how do I get something to go look at? Well, once you get it, your job's not done.

No. Right? Now you're in the process of managing it, like keeping it alive. You know, like I think when you're trying to have a kid, all you think about is how do we get pregnant? Yeah. And then I got 18 years of this. Yes, that's exactly right. Yeah.

So part of what Brandon and I are talking about is when you're choosing your asset class, understand that you're going to own this. You're having a kid. You're going to have them for the rest of your life. Or for as long as you own that property, you're going to want a person that's going to actually manage it for you. They're going to have their own unique set of skills and their own responsibilities. But I think, in my opinion, the most important part of all the properties I've bought between the ones I liked and the ones I didn't. The properties that I enjoy are ones that make the asset manager's job easier. Yeah.

And asset manager's job is to not just manage, like, I mean, the asset manager is not out there fixing the toilet typically. They're not out there even collecting rent or knocking on doors. Like property management, right? That's property manager. Asset manager is thinking more big. picture, how do we make sure that the returns are what I expect, that the growth is there, that the wealth is being built. It's thinking much bigger picture. And so, yeah, the property you buy is going to play a significant role in that because the asset manager can't change

a whole lot. They can't change the location where you buy, can't change a condition of the property. They can't change much of that. So they need to be involved actively in everything up into that point, which is why this whole thing is a team-based focus. But there has to have, you have to have that role. Like a lot of these roles are like, well, they could be, you know, maybe fudged a bit, but you can't leave out asset management. Now, you could do that role yourself, but it still has to be done because, again, property managers would never take care of your property the way you will. So the asset manager is the one that's calling your property manager saying, hey, our numbers are down 3% last month, what's going on? And then thinking of big picture solutions,

okay, let's run a new advertising campaign, if that's what's going to work here, or they're going to fire the property manager and find a new property manager. That's asset management, very important role. That's what I hired or not really hired. We partnered on it because he's a partner in mine, but Brian Murray. That's what I'm. I brought Brian Murray in because he had owned thousands of units before. And I'm like, he'd be a really good asset manager. That's his strength is to be able to do that. And so yeah, same Brian Murray that co-wrote the multifamily millionaire books with me because he's, that's just his thing. So we have the asset manager. Yeah, just make sure that everything is done correctly. Now, they're going to

work with the finance team because they're going to get issue reports, let's say to your investors, if you have them, or they're going to look over together like every month, the financials. How did we do this month? What happened? The answer manager is going to work with. the underwriter because they understand boots on the ground. Like, this is what it actually takes to manage your property. So Brian is constantly talking with Walker and Jay, my underwriters and lead gen guys about like how how do we tweak our underwriting to more match what we're seeing in the market today? Because that's where the asset manager comes in really handy. And again, if you want to scale, it's just really hard to do all five of these roles yourself. You can do it.

It's just incredibly difficult. And so, but this is the great part about real estate. This is one that gets me super pumped up is that, imagine like you wanted to get in shape. Let's use an analogy of like trying to get in shape. We use that a lot here on the podcast, probably the most overused analogy on earth. But like you can do arm workouts and you can do leg workouts and you can do running cardio. It's good for your heart and all that. But you have to do all that. Like you're the body. You have to do everything here. And so like it's hard, right? You have to do everything. But in real estate, it's not that way. You do not have to do everything. You can hire someone to be your arm guy. You can outsource your leg guy. You can outsource your head, your heart, your everything.

You can outstart everything. Now, you, if you're the leader, still need to make sure it's all getting done. But you don't have to be sitting there pumping weights all the time, which is super exciting about scaling. And when we talk about scaling, that's why these five rules are important. It's because when you put them together, you can grow your business to hundreds or even thousands of units over time. It's easy? Of course not. But the better your systems are, the better you can lead this team or manage the team or be a part of the team, the more you're going to do. And so that's the secret to scaling is to build this divided five-ed and crush it. It's also the secret to enjoying what you do.

Yes. I'm glad you said that. I love what I do because I don't do much. And the stuff you do is the part you like. Yes, it feels light to me. Like I love coming on podcasts and talking about things. And I love my Instagram and posting about what I'm doing. And I love meeting with my team and helping like Mike come up with a new idea to take investor.

Like, good example. Last night Mike and I are sitting there talking. We're like, you know, Mike is amazing having these phone calls. But Mike knows and I know, we both know, like, if we're going to go buy a billion dollars of real estate, we can't just rely on my Instagram audience to come and give me money. We got to get to that next level. So me and Mike had this long talk while our kids are watching this movie last night. And it's like, like, how do we get to that next? Like, how do I help him get to that next level? I mean, you can hear my voice. It fires me up to think, how do I make him better? And I get to work with him to make him to elevate him to a whole new level. And then he didn't want, he wants to. But if he didn't want, he wants to. But if he didn't want to, but if he didn't want to. But if he didn't want. to be like, hey, man, I like this. I like being the guy just on the phone all day with investors. I don't want to be like that level. Great. Then it's my job to be like, what's that, like, as visionary, what do I want that role to look like? And so I get fired up about that. I know a lot of you listening get fired about that too, because it's fun, be able to like build a machine and then

watch the machine work. It's fun for you. It's fun for me. Yeah. Someone else might be terrible. Horrible. Yeah. Like, I don't want to be responsible for that. I don't, I don't know what's going to happen. I don't have vision. What they want is I want to play this role in the machine. All I have to do is they're going to be happy as a June bug. Yep. And so when you find those people, put them together, it's amazing. Yeah, it's amazing. One of the mistakes I made and I probably still make in my life is assuming people think

like I do. So I'm like, oh, I don't want, why would anyone ever want a cold call? I would hate that, right? And then there's literally human beings out there. All I have to do is cold call. Yeah, I love to talk to people all the time. I can just solve their problem. I would love to be able to do something like that.

And so getting out of my own head and recognizing that there's things that are heavy to me that are light to other people, I don't know why it's so hard to embrace it. It makes sense that everything else in life, right? Typically, the person with a strong upper body isn't going to have a strong lower body as much, right? Like, ask a, ask a woman, would you rather bench press or would you rather squat? The majority of them are going to say I would rather squat. I would, I hate squatting. You just did a lake workout with Jerry and you're probably hating every single day. Every time we sit down to stand up. There's just parts of a workout if you're like lifting weights where like you like lifting chest or you like doing shoulders or you like doing

arms or you like core stuff. You just work your core out all the time or you like cardio. No body is the Well, personalities are like bodies. There's people that enjoy certain parts of this job and are pumped up to go to the gym on arm day. But when it's like, you know, ab day or something, they're looking for every excuse that they can to not go. Well, it ends up happening is you don't go to the gym. What makes business awesome is I can leverage ab day. Yes. And someone else can go work my abs out for me.

Yeah, exactly. I love it. Yeah. It's really fun. And it makes, it makes scaling fun. I work less now than I did at any point in my real estate. Maybe maybe at any point. another time I took a year and just kind of did nothing. But like generally I work less than I

ever did when I was like actively trying to grow my business. Yet I'm growing faster than I ever had before. And it's more fun than ever before because I've got these people in the right places. You got Avengers. Yeah, I got Avengers. And that's what you can do as well. If you're trying to listen to this show everyone and you're like, hey, I want to scale my real estate business. Just start thinking. This is a very much a mindset related episode, even though it's a real estate show about like if you start thinking this way that there are people, there are roles, there are hats that you wear and you can shift between the hats and then eventually give give the hat to somebody else and pretty soon you've got a whole team or you're part of a team and you're just killing a long time

of other people and you're learning how all these roles work so that you can go out maybe someday if you wanted to and do it on your own or you don't have to you can get wealthy and get a piece of what somebody else is doing on their team and that's amazing as well there's nothing nothing wrong with that I mean think about it I wear a hat at bigger pockets I don't own all of bigger pockets right I got a you know like I own a little bit of the company but like that's not my wealth. But it sure is fun playing a role. I love having that hat that says podcast guy. Like, that's fun. But I get to use that. And I built up so many skills that I now apply to other areas of my life. And that's why I built open murder capital. That's mine. But like entirely, well,

not entirely mine. I do partners for that too. But it's like that's my baby. And so the point I'm trying to make here is don't feel bad about being on somebody else's team. Like, that's when you grow. Because it's like we talked about last week, it's a lot harder to get up and do those tasks when you when there's no accountability. You're actually making a good point that I didn't think about. I'm on more people's teams than I am the owner of the team. Interesting. Yeah, I probably am too. Actually, yeah. Right. I know I am. So you can't look at that and say like I'm too good for that or I don't want to be on someone else's team. I'm on a lot of people's teams. Like we're on a podcast because we're on bigger pockets team and within bigger pockets I'm on the publishing team's team.

I don't run publishing. I don't know on the webinar team's team. Like there's and that we can keep going for a lot of ways where you really, when you and I talk about going into a deal together, going in a business together, what you really boil our conversations down to is what roles would I have to play on this team? Yeah. Right. Neither one of us owns the team. And what we're doing is we're looking at, would I enjoy that role?

Am I good at that? Would I mesh well with the other people? Or am I going to end up wearing every single hat on this entire team and wearing myself down? Yep. Well, everyone, I hope you like this show today. We're going to wrap things up here in just the moment. But first, we'll get our last segment since we didn't do it last week. We'll do it now.

And that is today's famous. Famous Four is a part of the show. We do every week, pretty much. We need to do it last week or where we go through the same four questions. We ask every guest every week. But we're going to alter it slightly right now. And I'm going to ask you the question. What habit, first question, what habit or trait?

Are you currently trying to improve in your life? What are you working on right now? I am paying a lot of attention as of the last five days to what drains me and what energizes me, which is probably not a coincidence why we're having this podcast today. Yeah. So I am working on. putting up walls so that other people can't bring their problems to me and I'm going to solve it because I like doing that. I like solving problems, but when you're doing it for 40 people

at a time, it can become very draining. So I'm learning to say no to things, but not just like, no, I don't want to do it at all. No, I will do it, but it has to be under these circumstances. Yeah, that's really good. All right. So what am I working on posture, which I'm terrible at. I got a book on posture. It's called becoming a supple leopard. It's like stretching and posture and all this stuff. Yeah. Tarle gave it to me or told me that you get it. Yeah, becoming a supple leopard. I'm working on that from my physical standpoint. And I am working on focusing more.

I talk about it a lot, but I'm still not that good at it, which is like saying no to things that aren't as important and saying yes to the things that are really important and then having the wisdom to know the difference, right? So I'm trying to work on that right now. You know what I was just thinking? Saying no to things is hard for us. There's this point in life where you have to say yes to everything

because you don't have opportunity. It's very similar to being poor and I don't know if I have enough money to eat. So you never say no to food. You need it. You're going to die if you don't say no to food. And you do this long enough to where you become successful. And now you have more food than you need. But your habits are ingrained to be afraid of being like hungry all the time.

So now the problem becomes I have to say no to food, which is a muscle I've never used because that would have gotten me killed. Right. And I have to completely switch gears from saying, yes, everything to know to everything. and we are like really fat when it comes to some decisions that we've made where we have too much stuff going on. We have too many things we need to say no to food more often. So don't feel bad if you're in that same position. And it's just confusing. You're like, am I supposed to say no? Am I supposed to say yes? It depends on what position you're in and what how much food is around. Yeah, that's good. I feel like you'd write a book on that called like the flip.

The food flip. Yeah, that point in your life where you have to say no to yes. I see those angles all the time. Like we said one earlier where there's all this work to get a property. the minute you get it, it changes. Now it's all about maintaining it or catching fish. The minute that fish is in the boat, the mindset changes and it becomes in cleaning fishes. And it was different skills that got you here than would be to get there. That people mess up a lot in, in the business world by just doing what got you here thinking it's going to get you there. There's usually a hinge on that door that you have to recognize that as long as far as it can in that direction. It has to go the other way now. What about instead of a business book,

since we mentioned that last week. What about business, YouTube, Instagram accounts that you're like influencers that you're following? Anybody right now it stands out as like, hey, I've been following a lot of what that guy says or that lady says. Why is it that whenever you get this question asked all of a sudden, you blank. You blank and out all the time. Yeah. I listen to a woman named Allison Armstrong. That's really good talking about understanding like the differences between how men and women tend to process information.

And one of the things that she talks about is we assume everyone else thinks, like we do. So when they do something the way we wouldn't have done it, we think that their intentions were bad. Oh, you know that you're not supposed to do that. And you just did it anyways. And I found that I'm 100% culpable of that, where I will get irritated with people assuming that they knew and they just didn't care, but really it didn't occur to them at all that something was going on. She's not so much business, I would say. In the business realm, I listened to a lot of Patrick Bet David. We had him on the show. Man, I'm blinking right now. Who are you listening to? Buy me some time here.

Yeah, sure. There's an influencer online. His name's Sean Whalen, I think is his name. He's a lion's not sheep guy. He has a brand called Lions Not Sheep. He's one of those kind of like, like, man, like, you know, mental toughness, kind of jaco, David Goggins type. You know, always pictures of him working out or whatever.

But I just like that mindset right now of the mental toughness and the like, stop giving up your authority, stop being, you know, a whiny little baby. I don't know. Maybe at the point in my life right now. I'm like trying to become a better leader. And so he's very much, I've been following a lot of his stuff. Like his Instagram stories are just solid. So that's probably, that's probably the influencer I look at the most. Does he know Ryan Mishler? Yeah, they're connected. Yep. Yeah. I think I think Ryan's is part of the is in his mastermind or something like that because I see him comment on each other stuff a lot. So I hate to say this. I'm looking through my YouTube right now. It is mostly comedians. UFC fighters or commentators on MMA or sermons. There you got a whole lot going on in the business. It's all right. Maybe that's where we're out right now. All right, man.

Well, third question, hobbies, what have been working on lately? You've been in Hawaii here for a little while now. Yeah, I have been exercising more. I've been spending more time asking questions instead of giving people direction. I have a tendency to if you say, hey, what should I do? I go tell you. And then you go do it and you come back to me and say, now what should I do? Whereas if you're trying to develop leaders, you have to ask them questions like, well, what are your options?

Why would you go that way versus this? What will happen if you did that? So I'm trying to do that with like everything in life. I'm literally trying to just practice on like the waiter at the restaurant that I'm at or by asking questions to get where I'm trying to go. I know that's not really technically a hobby. The only other one would be the jiu-jitsu lessons that we're doing. That one's that takes quite a bit. It does take quite a bit. Yeah. I'll go with the cop out jujitsu answer too. because I think it's only a hobby. I feel like, yeah, you're only allowed one hobby when you have a kid or when you have multiple businesses. Well, the problem is you get older, you start to realize that if you want to be good at something, you got to say no to a bunch of stuff. You cannot have a bunch of hobbies if you want to be good at all of them.

Yeah, that's a really good point. All right. Last question. What do you think separates successful investors from those who give up failure and never get started? You kind of answered it earlier. Yeah, I mean, it would be the mindset. And I would encourage everyone to think about, am I a fish catcher or am I a fish

cleaner. And am I open to considering that I need to think like a fish catcher? And here's one of the, like the litmus test to know if you think that way. If you've ever worked at a job and you thought I'm the only one that does all the work, you're automatically in a fish catcher or fish cleaner headspace. All right. You walk into a restaurant, fast food place, wherever, and the employees are all talking and they're too busy to come like talk to you. Right. I went to a McDonald's like last week and I was in there for probably four to five minutes before. And there was like nine of them behind the counter. Didn't even look up. Okay. In their heads, they're probably all thinking, I just got the fries out last time. Why don't I have to get the fries out this time? Or I got to

sweep the dining room again. I'm the only one that does anything, right? The employees out of McDonald's are such a small piece of that entire thing, that of that whole system that's created. They've got advertisers. They've got people that priced the stuff. They've got people that looked over the books. They've got people that made sure that they were in compliance. They've got HR people, they've got hiring. They're building manuals to be able to bring people in and train them. They've got partnerships with other companies that they're doing. It's a ridiculous amount of work that that entire corporation is doing. We just played that little tip of the iceberg and we think that that's all that's going on. So that is a huge, huge, huge limiting belief for a lot

of people that are out there in the world that work at a company and think that they do all the work. Work yourself backwards from where you are. When someone says, hey, can you do this for me? Can you get these spreadsheets together? Oh, I'm only when they get spreadsheets together. why do I have to do this? Ask yourself, what do they want that spreadsheet for? That's a whole new job that you know nothing about why they even need a spreadsheet. And when you learn why does that person need a spreadsheet, ask yourself, well, who are they going to report to for that information? That's a whole other job that you don't even know that exists. And you can literally start with at the end and work yourself backwards to seeing how an entire company runs if you ask those

questions. And that's what real estate investing is, is you are the company. You're not a business, man. You're a business man. Good stuff. I'm going to give a much shorter answer. I think people who are successful are process driven. In other words, they don't just rely on, oh, it just happened. They rely on, oh yeah, of course it happened. I did what you do to get that. Like you say success shouldn't be a surprise. Yeah, success should not be a surprise. Trademarked. That's sort of the jaco discipline equals freedom thing. That's why we hate process because it's discipline. We like the freedom to just do it whenever we feel like. But when you live that way, you end up with no freedom. You're a slave to, oh, this thing just went wrong. And now it's a disaster. I got to go fix because I had nothing in place. to prevent it. Another way to phrase that would be success should be inevitable. Like how how would there's a question asked for you what would make success in whatever you're doing right now inevitable?

Like if you can answer that question like what would make success in your scaling of your real estate business inevitable? Well if I had this person this person this person this person and we all did this and we had this system and it'd be inevitable. Of course we'd be successful. So yeah, that's a powerful question. Much like Thanos. Yes. I am inevitable. What would make you Thanos? All right, everyone. Thank you for joining us today. Don't forget to give the ratings, reviews and all that on the Bigger Pockets podcast. If you have not yet followed us over on social media, you can follow David personally at David Green 24.

You can follow me at Beardy Brandon. You can follow Bigger Pockets at Bigger Pockets. Big Shock there. And subscribe to our YouTube channel, YouTube.com slash bigger pockets. You find content from me and David over there quite often. And I think that's all we got today. So David Green, well, you get us out of here. Good job today, man.

Thank you too. This is David Green for Brandon, the subtle, Supple Leopard, signing up. 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. Thank you all for listening to the Bigger Pockets Real Estate podcast.

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