BiggerPockets Real Estate Podcast - 538: Find the Real Estate You Hate (So You Can Buy the Real Estate You Love)

Episode Date: November 30, 2021

Not everyone will love commercial investing, mixed-use buildings, flipping houses, BRRRRing, or even traditional buy-and-hold rentals. But you’ll probably find one type of real estate class that you absolutely love. It may take you some time, but if you’re able to find a property type that sparks your creativity, all while providing positive cash flow, you’ll know you made it. Katie Neason definitely didn't love government-subsidized rentals. She dreaded the phone calls, the repairs, and the unresponsive tenants. Katie thought that upgrading her investing strategy to multifamily housing would solve the problems. Unfortunately, after buying some fourplexes, she realized that too wasn’t for her. After trial and error, Katie found her true real estate loves: flipping, developing, and mixed-use buildings. So, she went into all three and is doing phenomenal! Katie shares a special Deal Deep Dive where she walks through a degraded downtown building that is now the talk of the town due to her smart negotiating, creative redesigns, and ability to use her network to fund the deal! In This Episode We Cover: Why it’s important to find the real estate classes you truly enjoy working on Understanding the positives and negatives that come with subsidized housing Revitalizing a downtown through smart planning, designing, and financing  Taking action so you can achieve “hockey stick” growth in real estate Working with the city so you can collectively build something that adds value to the community How to negotiate so both the buyer and seller walk away with a win And So Much More! Links from the Show BiggerPockets Forums BiggerPockets Youtube Channel BPCon 2021 David's Instagram BiggerPockets Store Open Door Capital The Self Storage Conference Maui Masterclass with Brandon Turner and Tarl Yarber Noah and Jeff's Episode (coming soon!) BiggerPockets Podcast 511: Getting Your Market, Money, and Mindset Right | 3 Coaching Calls! How to Invest in Real Estate—The Ultimate Show for Getting Started with Josh Dorkin, Brandon Turner, and 11 Rockstar Investors BiggerPockets Webinar JDC Mindset Academy Audible BiggerPockets Podcast 500: Robert Kiyosaki: America’s ‘Rich Dad’ Sees a Real Estate Crash Coming BiggerPockets Podcast 365: Ret. Navy SEAL Jocko Willink on Embracing Discomfort and Leading Through Extreme Ownership (+ His Real Estate Investing Tips!) Josh Dorkin's Instagram Check the full show notes here: https://biggerpockets.com/show538 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, so 538, where we talk about a whole ton of stuff with commercial and residential revitalization of downtown with an awesome guest, Katie Neeson. But like we're doing this because we want a sense of freedom of your life back. You want to live a different life. So if you just like have more problems and hate what you do, like just stick with your job. And even though like my first two investments, if I started over again, I'd probably pick a different path knowing what I know. It was, I learned so much that I wouldn't exchange it at all.

What's up, everyone? My name is Brandon Turner, host of the Bigger Pockets podcast, at least for the next few weeks, until David takes over as host. And I'm going to spend some more time surfing. Today's the podcast, this is the show where we, it's our mission to arm you with the tools needed to jump into real estate investing so you can reach that financial freedom faster and make working a 9 to 5 job optional. I'm here today, again, of course, with my bestie.

and co-host David Green. What's up, David Green? How you doing, man? I'm doing fantastic, actually. A really good mood. The David Green team went on a tear. So we have a Southern California division and a Northern California division.

And the SoCal team's on fire. They have 14 houses in contract. A month ago, they had like four. So that's going, yes, absolutely. And that gets me pumped up. Because every single person we help get a house under contract, I look at like we just made a future millionaire with the way that things are going.

So I am in a very good mood. I'm happy. Thank you for asking. How about you? What's going on in your world? Man, I just got done with a five-week vacation. So that was a long time. I went to Disney World. I missed you, man. I don't think I told you that. It was five weeks without Brandon is harder than it sounds. It was a long time. But, yeah, man, I missed you too. Actually, so what did you do? Everything. Yeah, we, I did I did a week in Cordon. I did a week in Cordon. I did A.J. Asman's conference, the self-storage one. And then I did BPCon. And then after that, did Disney World. Then after that, did Disney Cruise. And then after that, spent a week in Washington. Oh, and I stopped in Houston to go check out the new. We got like a $71 million property under contract in Houston,

and then we raised all the money for it in like a few days. It was for Vianna vacation. It was a very big month, so about more real estate than in my entire life combined in like under contract in one month. So crazy. I like vacation. So a couple years ago, we released a journal at Bigger Pockets called The Intention Journal.

And it's not one of our best selling books. Like it doesn't sell anywhere close to what Burr or rental property investing does. But this thing really changed. a lot of people's lives. In fact, our guest today uses it. And she talks a little bit about it today in the show. So my encouragement for you is if it's not this journal, I don't care what journal you use, but like a success-based, goal-based journal that you fill out every day and every week. It's been such a huge monumental tool in my life.

And so I want to encourage everyone to look into that, whether it's the Bigger Pockets one or something different. Check it out. Ours is called the Intention Journal. You can get it at BiggerPockets.com slash store. Especially because we're coming up to a new year, which is when everybody really like that's when you should be drilling down to come up with your plans. I'm going to be hosting a free webinar for anybody that wants to come and just talk about how I set goals, the way I set goals, the format I use and why they're important. So if you're following me on Instagram at David Green

24, you'll see whatever the information is when I posted about that because goal setting is massive, man. It's like it is literally programming your brain to go get you what you want in life. I love it, man. I love it. We'll keep delivering the goods. Speaking of goods, we've got a good show today with Katie Neeson. So Katie is a buddy of mine from down in Texas who does a lot of really cool stuff. I mean, everything from commercial redevelopments, like taking old buildings and remodel them to building townhouses to flipping houses, buying rentals. And she goes through her story, a lot of like, she got into like fourplexes and a lot of stuff that you're looking to do. And then she found out very quickly she hated it.

You're going to learn about why that is and some of the lessons behind that. we go into how to find deals off market, how to talk to sellers. We go through a lot of just tangible, tactical stuff that could change your business forever. So I think this is going to be one of those shows you're going to remember for a long time, and it might just impact the type of investing you pursue. Because if you're anything like me, you're going to hear this and be like, that is super cool. I want to do it.

So I'll say trigger warning on the show. It's very easy to get shiny object syndrome with stories like this because they're so cool. So you're going to love it. 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,

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and a timeline you can count on. Fast, simple, Reliable. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. That's BiggerPockets.com slash Dominion. All right. Now that said, let's get to the show. Katie, Neeson, welcome to the Bigger Pockets podcast. Awesome to finally get you on here. Oh, man. It's so awesome to be here. What an honor. Thanks. Let's go into your story a little bit. I mean, you and I know each other a little bit, but let's introduce you to the world of Bigger Pockets. So how did you get into real estate? You know, I grew up as an entrepreneur or as a little kid, I always wanted to be an entrepreneur,

but both of my parents were in the real estate industry in the 80s and early 90s in Texas. So I was pretty sure real estate wasn't going to be a very good option for us. And went into the corporate world, wondered how I could start a business and then like many others, read rich dad, poor dad. And really it put context around my mindset about money. And it brought to the realization that our problems of the, 80s and 90s weren't about real estate. They're about our relationship with money and like it just caught fire about real estate and just had a piece like that's the direction I need to go.

So within a couple of weeks, I went and bought a condo. And my deal was, I don't know if y'all ever Googled Robert Kiyosaki's name, but he's got just as many haters as he has fans. So I had no idea. Like, is this a fraud? Is this guy for real? So I decided I wanted to do a test case to see if it worked. So I found a $17,000 condo in my hometown, low income. Wow. Had a tenant that was paying $550 a month in rent. And I even borrowed the $17,000 from family and bought it and it worked. That's cool. What year was this? 2006. Wow. Okay. 17,000. What town is this in Texas, right? Brian Texas. Brian College Station, home of Texas A&M. That's on

most people know it. I'm assuming you still can't buy condos for 17,000 anymore. You know, I think it'd be hard to find. But in this particular condo, when I took my husband to see it for the first time, the reason it was a special price is it was a gated community, but the gate was always broke. But as you turn and went down the street to get to the gate, it was lined with fourplexes. And they were all boarded up with plywood and vacant. And my husband and was like, what have you done? And I'm like, well, this is what opportunity looks like. So we had a drug problem in the area and the cops went in, kicked all the tenants out, boarded it up and basically sent letters to the homeowners and said you're responsible

for what goes on in your properties. So yeah, so that made it a really good price of the time. Wow. Yeah. Okay. So by the way, you brought your husband. So for those people who were at BP Con this year and you saw an actual real life cowboy walking around, that would be Katie's husband. I think he's the most cowboy-looking person I've ever seen in my life. Now he's going to listen to this. His head's going to get big. But yes, that is who he is.

He was not dressed up. Yeah, he is a true, like authentic cow. He's what all the cowboy like wannabes, want to be is your husband. So that's awesome. The tax return says working cowboy for his job. Yeah. Is it really? That's funny.

Yeah. I didn't even know that. He is legit, not just in the look, but in the career. That's great. Yes. All right. So about that first deal. What went wrong on that one went right?

You know, I got to learn so much for that. What went right? Is it validated my concept or validated that it was possible? But like you would expect with a low-income, one-bedroom condo, there was lots of turnover. And I had lots of entertaining but stressful tenants. And, you know, one, quit paying, looked him up, he's in jail, went over, check it outdoors busted open, but I kept it for a long time after I rented it for a while and then I

owner financed it. And that went well for several years. And then they stopped paying. And so I got to foreclose on it. But what was really exciting was I got to go to the courthouse steps and be on the other side. So I went ahead and had my attorney show up. And I just wanted to be like a person in the room just so I could get that experience. And then at the end of the day, no one bought it on the steps, but someone called me who was there the day before and bought it. And so it was just really cool to learn like all the steps and see it all the way through. But it was a challenge. I wouldn't have bought it again.

I didn't know about HOA fees. We had assessments right after I bought it. They redid the outside. So, you know, like all the things that you could think I could go wrong with the condo it did. But it was still a pretty cheap learning experience. At the end of the day, I made money. All right. Well, what came next?

So after that, I kind of took a break because I had a real job. and then jumped into fourplexes. Like I wanted to create cash flow, and I convinced my business partner and mother to go on this venture with me. And we bought some fourplexes out of foreclosures. So that was 2010. So there was quite a few foreclosures going on. And we bought them vacant. And the first one we bought, we went to Colorado, like the day after we bought it came home.

And there was water running down the driveway. Oh, no. Because there was a freeze here, pipes busted. But we were going to renovate the whole. thing anyway. So if it was going to happen, like it was a good time. But, you know, like the water was shooting up from the faucet. And so the sheetrock on the ceiling had all gave it, like it was a mess. But we fixed it up. They were three bedroom, two bath. We were going to do HUD tenants because the security of the government paying me, like I still thought I liked that. And we fixed them up. We

got tenants in there. They were three bedroom, 800 square foot fourplexes, and we rented them for $850 when everything else on the street was renting for 550 because that's what HUD was willing to pay. And I just don't think people knew that. They just assume you could get what everybody else did. Cash flow was great, put tenants in there and hated it. Totally hated it. Why? I mean, you're making all this money. I mean, you're renting way above market, it seems. Why would you hate that? Hated the property management part of it. I hated. You know, you're like, oh, you'll never get those calls. Yeah, I got one. Oh, my God. The place is on. fire. We tried to turn the light on, you know, light bulb popped, and it turns out it was just

the light bulb was dead. So it needed to be changed. And, you know, it's tiny. They're 800 square foot. So again, fourplex, lots of turnover. Just hated the maintenance and the, you know, bigger TVs than I had, nicer equipment than I had. Like, it kind of made me cynical. I felt like we were lied to a lot. And, but what we really loved, we love fixing them up. And, you know, we did them nice. We had colored walls and, you know, like we did it like we would want it. And so we loved that part. So we said, you know what? At that point, we'd already bought three, four plexes. So we said, let's just sell these to investors and let's start flipping houses. And that's what we've done for the last 10 years. And that's kind of been our niche. And that's what we really loved

doing. And so we've done that for the last 10 years. Yes. Landlord and especially landlording with lower income tenants where you're dealing with everything, it really can make you cynical, can't it? Like, you just get so like, it can. Like, oh, I don't know, just the number of stories I have of like that phase in my life where I was just in it, like dealing with the phone calls and all that. That's why like, you know, as soon as I got out of that, I was like, oh, there's like a whole other world to this real estate thing besides just being the low income landlord. Exactly. So I was happy to leave it. And I didn't like, like, I became skeptical of everyone, you know, like not just my tenants. Like, I just didn't like the path I was going down. You know, I think that's important to highlight that we often, here's what I hear, especially from newer people, every real estate deal gets reduced down to what is the ROI on a property. It's as if the analysis starts and ends with what is the ROI my spreadsheet will tell me. But those of us that actually own real estate understand there's much more art to it than science.

And one of the big pieces that I've learned I need to look at and I frequently coach people into is if you buy a property, that you think gives you a good ROI but makes you hate your life, it will cost you so much money because you'll stop investing. You'll stop pursuing deals. You'll stop learning. You'll stop growing. You won't find the path that you're supposed to be and you'll just quit and say, this isn't work. I'm going to do something else. Would you mind speaking just a little to those people that are maybe new? They have one or two properties and they're these like spreadsheet trolls that just, they go right into it and they can't get out of it and they it's all they talk about but the actual like do you enjoy doing this means a lot as far as ultimate success you're going to have totally like i am still a

spreadsheet troll like that's why i got in it was to create cash flow so i totally get it and then when i was like oh my gosh i can make so much more than anybody else on the street everybody told me i couldn't i spent hours in the HUD office making sure i asked all the right and questions and understood but like we're doing this because we want a sense of freedom of your life life back. You want to live a different life. So if you just like have more problems and hate what you do, like just stick with your job. And even though like my first two investments, if I started over again, I'd probably pick a different path knowing what I know. Like it was, I learned so much that I wouldn't exchange it at all. So it's better that you just go and do it and learn that you don't like it and then

pivot and go a different direction, then worry that you're not going to like it. So you never even start. That's one of those. I want everyone to work wine in the last 30 seconds and just hear that again. because that's so powerful of like you don't know what the right path is until you start walking on one. Right? Like you don't know. Like, because you just, when I got into like real estate, like I didn't know I'd end up in mobile home parks. And when I got in the mobile home parks, I didn't know I was going to end up with a certain type of them and which ones I like and which ones I don't. And in that first deal I bought it was 50 units in Bangor, Maine.

Like, I would not buy that today. There's no chance I'd buy that today. It was way lower income, way smaller, way too many problems, way too small of an area. I didn't know about those things. So until you jump in and just do it, you won't have the perfect solution. And so many people are waiting for this perfect solution and the perfect path to be laid out in front of them before they make any action. But I think it's just a wrong approach. Yeah, it was the right next step for you, even though you wouldn't do it again.

Yeah, I love it. All right. So what came next thing? You started flipping houses, find good success in that? Yeah, and we loved it. And we, you know, they say don't get emotionally attached to your real estate. Well, I don't know how to do that. Like, if we didn't love it, we'd love it.

We totally wouldn't be doing it, and we overimprove them. But what we really fell in love with is our downtown was revitalizing. And there were lots of businesses starting up. And we started flipping houses near the downtown. So there were these old, cool houses. And people wanted to be closer to downtown. So, you know, like it just caught momentum. It felt easy.

It felt light. And we just loved improving them. And then people would reach out to us because we won't list them until their stage, because we don't want anybody tell us down like our light fixtures are our top. like like it and buy it or don't, but we don't want to get in between. And so we started, you know, having people saying, as soon as you have something come up, let us know. And so we really loved it. And it kind of became our identity. And it kind of inflated our ego. But when we reflected back, like, the reason we're doing this is to generate cash flow. And so there was kind of a

big pivot point that happened probably about 18 months ago. And it was the culmination of a number of things. One was COVID hit and the idea that we know real estate's a cycle. My mom, who's my partner's been in it for 45 years. You know, we've seen the cycles. But the idea that it could dry up overnight, you know, was like, to me, it was frightening. And almost like we'd been living this kind of fake life in real estate. We thought we were investors. But the reality is, as soon as we quit flipping, we'd have to go get a job because there was no money being generated. So that happened. And we were. general contracting, our first commercial ground-up development. So it's me and my mom, general contracting,

a 20,000 square foot building. And even though we had done our houses before, we had lots of different subs because they didn't transfer. And it was kind of like every morning going to the job site and getting in the fetal position so people could kick the crap out of us and solving problems for that day. And during that time, our pipeline totally dried up because all we could focus on was getting that project off the ground. Then I'm watching little old Brandon over here who owns a few rentals and does this BP podcast. And he comes on, I don't remember which one it was, but it was during COVID when we had way too much time to reflect on life. And you're talking about your hockey stick growth. Like you just woke up one day and all of a sudden you were successful with all these

mobile home parks. And I realized. It just happened one day. It was weird. It woke up and they were there. That's exactly how it happened, right? And it just hit me that I, I had used the excuse, even though I knew I needed to shift, I didn't know how. And I used that as an excuse that, like, it would reveal itself, you know? So I was waiting to see how am I going to shift away from this? And I was using that as an excuse not to do anything. And so I didn't have a circle of strong investor influencers here, people who made the next step feel easy. So I just didn't do anything.

And then you were on that podcast. I don't know. It may have been the Jason Breeze one. I can't really remember. But the hockey stick growth you were talking about, I was like, that's it. Like Brandon is a freaking open book. I'm just going to do whatever he did until I can find a better path. It's so you were like, I read Vivid Vision and wrote a Vivid Vision.

I'm like, me too. I have it up on my wall. And then I joined the Jason Bree's mindset Academy. Everybody I know that's successful says they have a mind coach. So I got a mind coach. And I did, got the intention journal. You know, like I just started doing, just taking steps. And what I learned is kind of what you referred to.

earlier is that, you know, you can be moved. For me, it's God because I'm a Christian, like, it's or a ship. It's hard to turn a ship if it's sitting still. But if you just start moving, it's easy to guide and pivot. And even though I experienced that early on in my real estate career, I didn't realize it when I was stuck in a middle again of basically a cap and not knowing how to break through. And then the Maui mastermind came up and I was like, you know, I'm just going to do it. I'm going to go meet the types of people I need to be around. And I'll figure out like how to make it work later. And it was a big sacrifice. My daughter, we moved our oldest off to college. And I missed it because I was in Maui. But it was worth the ability to get around the

types of people that like just fed my soul and was doing what I do. And so did that in like the last 18 months in a blur. We quit worrying about how are we going to pay for these properties. And we're like, let's just get the properties. We'll figure out how to pay for them later. And we hired an integrator. We're like, you know what? We can't run construction sites and fill the pipeline at the same time. So we had an annual off-site meeting. My mom and I went out of town for the weekend and were like, what are our goals? What do you love doing? What do I love doing? And we mapped a path that made sense for us and we started just filling in the holes. And I mean, it has just skyrocketed in the last 12 to 18 months because of that. And it was just taking action. That's it. It doesn't

even matter what action I took. I just started doing it. I love that point about a ship that's sitting still is hard to turn. Maybe think about when you're trying to ride a bike, if you're not moving anywhere, balance is incredibly hard. But when you're going, balance gets easier. And the faster you go, it actually gets easier. You know, like, I remember when I was first learning how to ride a motorcycle, I had a concern that like going faster, be harder to control it. But no, when you're going really fast, it's, you're never going to top it over. You can't. And that's a great point that a lot of the time, when you're just sitting there analyzing a deal and analyzing a deal and analyzing a deal and you're never actually getting deeper into the process of what it's like to own real estate, it's like

trying to balance on a bike that isn't moving. You're never going to feel like steady. It's only when you start making progress and moving that you start picking up those nuances i think that's fantastic advice so katy i want to jump into the change that you went through you were doing these the single family flips and then you started working that other one and then all of a sudden you just ramped it up over the last couple of years i'm wondering like was there a point where you were just like i'm afraid like i like i don't want to go bigger because i'm scared or were you just pretty like power through like oh yeah i got this. And if it was scary, how did you overcome that? Yeah. So I live at odds with myself all the time. So I am fiercely independent to a fault. And I am scared of everything. It's so every step that I take,

I encounter fear, just like not knowing if Robert Kiyosaki was a fraud. So every next step is always full of fear. What I like to do is just figure out worst case scenario, what would it be? And like, could we live through it? And then I get my motivation knowing that I'm doing more than most people are willing to. Like, there's just something about like, if I know I'm doing something that somebody else won't, like I use that to motivate me and drive me forward. So, you know, we kind of decided in 16, we need to start slowly accumulating cash flowing assets that we like. We already know we don't want to do low income. We don't want to do manage houses. We want it to be able to have property management. And so we said, let's just buy one cash flowing asset a year and an asset that we love.

Like, I want to be able to take people by and say, hey, I own that. And, you know, we didn't get that from the fourplexes. So the first one we bought was an old boarded up building on Main Street. And I mean, we just looked up who the owner was. We contacted them. And we bought the building, put tenants in it. And that was our first cash flowing asset. And then the next year we did, we decided to go outside and we bought a bakery. Like to actually run or just like somebody else ran the bakery? Yeah. So it was three partners with the third partner was the operator.

So she ran it. And then we did like social media and the bookkeeping and kind of the back end. And it gave us a great realization of what tenants in our downtown that's being revitalized, like what they go through. So it was a good experience. But we realized it was taking too much mine space. So we sold it. So it's kind of like a year of wasted not getting cash flowing assets. And so we were just collecting a morning to.

But then when I had that pivotal moment in that epiphany, I was like, we need to do, we just need to do this faster. But we didn't know how are we going to finance it. How are we going to manage it? I mean, we're two women now in commercial construction building, you know, mixed use buildings. And so the main thing that's always helped me is I try and find someone who is really smart. So like when we were our GCN, our first single family, it was because our general contractor was too busy to do it.

But I had used him before and he was like, we'll help you. Like if you need help, if you need subs. And so he was there to coach us. When we did the commercial project, I did a consulting agreement with a construction company. Because I knew I wouldn't know what I was doing. But there was someone I could call and say, hey, come over here. Help me look at this.

What am I doing wrong? So I just try and surround myself with people who have already done it that kind of make the next step feel easy. But like you never overcome the fear. Like today, if I could get myself all worked up about just the pipeline that we have ahead of us right now. And so it's just a matter of realizing that you're trying to make a better life for yourself and just like a W2 job, you might lose your job. You may have to change your career.

It's no different in real estate, but at least we're loving what we do. And we feel like we have ownership in it since we own it. So it's really no different. How did you find that consultant that you hired for the commercial project? It was a contractor that had built some of our first developments when we didn't GCM. It was the same thing. And they did commercial and they did some developments and they did some residential. So it was just because we were already in that world. They were also investors and general contractors. So we connected on a lot of levels. And I mean, really, I don't know why he did it. I mean, I think people in real estate who are successful want to help other people in real estate who are successful. Because the reality is he probably shouldn't

have. You know, like he was my G.C. No, I'm my own G.C. But we still invest in deals together. But the reality is, is if you're out there doing stuff, like there's people out there who want to help you get to the next level. That's cool. I want to dig into the development stuff here a little bit, but before I do, I want to just point out like a kind of a lesson that I see in your story. And that is, you know, David and I say a lot, this idea, follow the fire. In other words, like, something fires you up. Some people right now are just fired up about crypto, then you should. If you're fired up about crypto, then go dig into crypto. But like, there's something that just resonates in you that with that development of like the downtown, the old buildings, the drive-by.

And somebody might be listening and going, no, that's stupid. You can get way better. turn by doing this thing over here, right? No, you couldn't because you wouldn't be passionate about it. You wouldn't be willing to suffer through all the pain because it's not your fire. And so I love the fact that you jumped around a little bit and you found something. You're like, this is the thing. Because it's not about necessarily making, like the goal of life is not to make as much money as humanly possible, right?

I think we all would agree to that. And so if you're doing something you don't enjoy, and this is the point I want to make, is if you're doing something right now you don't enjoy as a means to an end that you will enjoy much further down the road, I think that's faulty thinking, right? Like, you can have your cake and eat it too. You can have an incredible life right now doing something that does fire you up that also leads you to a better life later on that fires you up then. You don't have to trade crap for now for joy later.

I'm reminded of that quote, Steve Jobs once said, I'm going to pull it up here because I really like a lot. It was, yeah, here does. I've looked in the mirror every morning and I ask myself, if today were the last day of my life. What I want to do, what I'm about to do today. And whenever the answer has been no for too many days in a row, I know I need to change something. So it's been one of my favorite quotes. Yeah, isn't that great? Like, so I don't know. That's my encouragement to everyone listen to this. It's like, don't necessarily judge something for is this the highest ROI in my life right now. But is this

something that brings me life right now? And I can use it to get towards a different life or a better life or whatever later on down the road as well. Absolutely. There's stuff. definitely better ROI projects out there than what we do. But they definitely give us the most pride. Yeah, that's awesome. I love it. All right. So let's talk about the development stuff a little bit. Let's say I want to get into what you're doing. I want to go and buy an old building. These are commercial properties, right? So I want to buy a commercial property, maybe a three, four, five, tenant old crappy building. And I want to make it nice. What do I do? Like, coach me, Katie.

Okay. So what we have found is the path of lease resistance that also meets your passion. is a better place to be than always fighting uphill. So find out from your city. Every city has a master plan. And in my experience, it's better to do what the city wants you to do than try and do what you want to do if it's against their will. So they had already invested a lot of money downtown. We knew they wanted to grow downtown. And so we started looking, what can we do? Our passion and our skill is we can put heads and beds downtown. So the development pattern, of past or of today is commercial follows rooftops. So you go build five or six subdivisions, all of a sudden all the strip centers and the commercial buildings start going in, the restaurants,

the stores. But when you're revitalizing a downtown, it's in reverse. The first thing that comes back is they try and get shops and boutiques down there, but there's nobody living down there. And so those boutiques cannot live on events alone. They need someone to roll out of bed and go eat or shop there because it's the most logical place for them to go. And we feel super passionate about that. So our goal is how can we put as many heads and beds into the downtown? So we look for buildings or property that we can just redevelop from ground up that we can put heads and beds. Now, we did some studies to find out like what do people who live downtown? Like what do they want versus we're in a college town? So college students don't want to live downtown because we don't have

volleyball nets and pools and that's not our target. The people who want to live downtown, which is so nice in development, the amenity is the downtown. So I don't have to spend money on gyms and I don't have to spend money on all the extra amenities. I get to just build the building. They walk out the door and the humidity is already there. And so the first thing to do is identify what does the city want? What do you want? And then just start scouring and looking for a building. Once you find it, you're going to set up a meeting with your development services people in your downtown. You're going to have a group meeting. They're going to have the fire marshal there. They're going to have... I don't even know what development service people

teams. Is that a group of people? Yeah, kind of. So when you go and build something in your city, there's two sides. One is like the permitting and the inspection people. So like if you just buy a lot and build a house, you're going to deal with those people. The development services side gets that lot ready to be built on. So they're the ones who say, yes, you can divide the land. You're going to need to add water and sewer. So they're going to... They're the like before you're ready to build, they just get the land ready to build. So they're going to bring in city engineers, the fire marshal, the development services, probably somebody from permitting.

You're just going to sit down. And what we have found success is you want to share your vision with them. You want their buy-in. And so we'll take renderings or we'll take pictures of buildings like we want to create this. We've learned, you know, if people live downtown, they don't want three by five windows in a sheetrock box. They want wood floors. they want open ceilings. And so we try and have imagery and the city gets excited.

They're like, yes, this is what we've been wanting. So our very first development downtown was a townhome project. It was actually low-income housing that we, modular houses that have been brought in a long time ago. And we're like, you know what, let's buy it. And let's see if we can't do something else with it, which I don't recommend because we didn't know lot sizes. We didn't know any rules. But we knew worst-case scenario, we could just sell it and it cash flowed as a headhouse.

So we go into the city and we tell them what we want to do. And they were like so excited, I was nervous. I was like, their level of enthusiasm means they may be dumb enough to do it. And so, but what came out of that is, so in a lot of downtowns, I have really wide ride of ways because that's how they stop the spread of fire back in the old days. They separated buildings. So you'll have like 80 foot rideaways with, you know, a 20, 30 foot road in the

middle of it. So the city said, hey, what if we release some of that land to you? So instead of building five town homes, you would be able to build seven town homes. And we were like, what? And they said also the lot's not deep enough to meet standards. But if you guys will build this, we'll give you exceptions to those rules to make sure that you're able to do it. And so just open our eyes that when you're doing what the city wants, they will work with you to get it done. So the first thing you got to do is sit down with them, find out if they're going to support your project when it goes to planning

and zoning and when it goes to the council. And if they are and you guys see eye to eye, they really are helpful in making sure that you're successful. Yeah. So this is interesting because in my head, I've always envisioned like working with the city planners and all that. It's like a very like, I got it. Maybe it's just because I'm on Maui right now and that's how it is on Maui.

It feels like, but like it's like you got to fight these people who their only hope in life is to deny everything you want to do in life. Like all they want to do is deny. But what it sounds like and it makes a lot of sense is like, no, they want. want this. If you can get them on board and get them excited about it, and you can cast your vision, like they're going to support you and help you. And this becomes way, way, way, easier. And so, yeah, that's just an interesting way to, like, kind of a frame shift in my head that I'm doing right now is like, maybe it's not such an animosity thing, but it's a partnership. Yes. And I'm pretty sure the

city doesn't listen to Bigger Pocket, so I'll share this with y'all. I only talk good about them behind their back. Like, they are still a government entity. They still get their paycheck, whether they delay my deal, whether my deal passes or not, and I remind them of that every opportunity that I get. So it is still a difficult process, but if your passion crosses what they're trying to get for the city, they want you to be successful. Yeah, that makes a lot of sense.

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Yeah, so let's go into it. Do you have a project, like a some kind of development project we can dig into the numbers on? Yes. All right. So I'll start with, we'll fire a bunch of questions at you. Let me find my list of questions here. I should know this by now. It's not like I haven't done this a million times.

Number one, what kind of property are we talking about here and where is it located? Okay. So the very first one we did was a commercial building. And it was on Main Street. It was like a row building, which means, you know, it shared walls with each building on either side. It was literally just the exterior brick walls, a newer roof that had been put on, dirt floors and a cistern inside the building. Oh, wow.

So it was completely gutted. What's a cistern? So it's what collects water. So it's, it's circa 1890s. And so it's how they used to collect water to then be able to have water inside the building back in the day. All right. So that was, you got a shell, like a shell of a building, basically.

Yes, just a shell of a building. And basically the reason it was dirt floors is I'm sure it was a wood raised floor and the roof had rotted out at some point and the wood had rotted out. and the city made some owner come in and clean it all up and put a new roof on it. I see. Okay. All right. Number two, then. Number two, how did you find this deal? So we knew we wanted to try an office in downtown. So we just started walking blocks, and we would write down the address of any building or land that looked distressed that we thought we might be interested in. This particular building was the only unoccupied, boarded up building on the most developed block in downtown.

So we went ahead and wrote it down, but we were like, if that building, was to be had, it would have already been had. But we went ahead and wrote it down and then looked up on CAD to see who all the owners were of those buildings. What's CAD? So CAD is the county appraisal district where they list property values and owners. And we got their names. You know, they have addresses on there, but you never know. So we got their names and just started Googling them. And the one of the building that we were interested in, that turns out the guy was an Aggie. So he's a fellow alumni from the university I was at. He lived in here. Houston. So he was remote about an hour and a half away. And he only owned the building a couple of

years. And his email, his work email was right there on the internet. So I just shot him an email and said, hey, fellow Aggie, real estate developer, see you on this building. Would you be interested in selling it? And really thought he'd probably never respond. Yeah. And he did. So, all right. So I guess next question then. How much did he want? How did that work through? What did you want, what'd you end up buying it for? So that was tricky because it wasn't for sell. So basically he said, you know, we had plans to build a restaurant. His daughter was graduating from the university. She was going to run this restaurant. But he was like, it was at a time he was in the oil field industry, which I learned on the Googler, and that it was a tough time in the oil field world. So I was like,

maybe that's my hope. And he's like, you know, we've had a change heart. We're not sure if she's going to do that. So we want to make a decision what to do with that building. And I said, great, what do you want for it? Well, he would not throw a price out. So we tried. and he wouldn't give us a price. And so it was hard to know. I mean, it's dirt floors. And we had never built downtown to understand the cost. But we just did the best we could. We estimated what we thought the renovation budget would be. And we backed into it. And we offered him $225,000. And then he, I don't think I'm supposed to go on. No, you're going. You're already committed. You might as well finish now. So then he countered at 260 and we settled on 250. And at the time, had no idea if that was a good deal or not. All right.

So that kind of covers the negotiation piece then. Yeah. Anything else in there? Here, I'll add a little caveat. In Chris Voss's book, Never Split the Difference. He covers exactly how most negotiations go like what you just did. So knowing that, I don't know what the percentage is, I guess like 80% of them you're going to see somewhere in the middle.

You can exercise quite a bit of control over what. price you went up on just by understanding that. Is there anything you want to share with the listeners? Like, was this a plan that you knew you were going to hit on 250? Well, we definitely wanted to give room for negotiation because we wanted him to feel like that he won two. But it was trickier on this one because we really, there are no comps. I mean, we're in it, you know, in downtown, there just aren't even that many buildings. But I will tell you, we've read, never split the difference. And it has helped tremendously on our flipping side of the business on negotiating deals. but yeah, we went in a little low

so that we would have some room to go up. Yep. Brandon, just curious. You have the experience with the same thing? I mean, yes. I'm not a great negotiator, honestly. I'll admit that. Like, I even never supposed to difference. Like, I've read it and I still don't put most of the stuff in the practice.

That said, I do recognize that people always want to split the difference. So I just, like, I lean into that, knowing that. It's kind of like a monopoly. So if I play monopoly, like, probably the thing I use more than anything else when I play monopoly is somebody will have, like, let's say they have boardwalk and I really want boardwalk. I'll usually start by saying some absurdly. low number, right? Like, I'll give you $200 for it. And I was like, no, screw you. And I'm like, okay, well, what do you want? And they're like, well, the thousand. I'm like, oh, okay. Well, I would,

I would have paid him a thousand right then, right? But like I kind of anchor it to that price. That's about the only negotiation strategy. I feel like I do is just price anchoring. But side note from the person who just said he's a bad negotiator, you're like a wild savage at monopoly negotiating. I think psychologically we maybe need to dig into why that comes out when you're playing monopoly, but not in real life. You know, one thing. that we do on all of our properties that I think actually came out of that book. I didn't even really realize it was a tactic, but we always go into, you know what, like we have to make a living, you have to get what you need out of it. And there's very little chance as it's probably

going to work out. So I don't want to insult you with an offer. So I'm not sure this is going to work. And we always try and get them to say, well, just tell me what it is. So we've already grounded them and it's going to be shockingly low. And we actually did do that with this building. I mean, we, from the day I emailed this guy until we got it under contract, six months passed, which at the time felt like in eternity. It was roller, oh, we're going to do it. Oh, we've decided my daughter's going to do it. And no, we can't take that price. I mean, like, it was a roller coaster ride, but we did ground it with, you know, it's probably not going to work because at the end of the day, I doubt we're going to actually see eye to eye on this deal. So at least it gives them a grounding

point. And that actually is something I do do occasionally, especially in negotiations, and I'm a big fan of, which is the like, I don't know if this came from Never Split the difference or what, but like this idea of like, oh, yeah, that's probably not going to work. You almost like you want the other side fighting your battle for you. Like, no, I think we can make this work. Like you want them like helping you. By always being the negative, it makes them go positive. Because people know that negotiations back and forth.

You say one thing they're going to say the opposite. So yeah, by saying like, yeah, this probably won't work. Or yeah, you probably wouldn't even be interested in that number. Yeah. Yeah, I can pay 100,000, but that's probably ridiculous. Thanks for bringing that up, David. Yeah. Thanks for bringing that up, David.

I forgot we did that. I knew that there was more to that story. So yes, thank you for sharing that. It's funny because I will sometimes on our real estate team, the agent will come to me and say, hey, this is what we got. What should we do? And I'll say, here's exactly what's going to happen. We're going to counter with this.

They're going to go to their client. They're going to come back and they're going to say that. When they say that, you're going to say this. And like, I will almost paint the next five steps of how we go back and forth and say, and you're right. I'm sure like 100% of time. Like, because like, yeah, psychology is so predictable. Yeah.

Yes. And they think that I'm this like magician that reads mine. It's human beings. are much more predictable than we want to think. And we all have huge egos. And that's really when you're negotiating what you're catering to. So thank you, Katie, for sharing for everyone listening to this. Like the key to negotiating is not trying to find their weakness and smash it into the ground and just bleed them for everything. It's really just how do I make their ego feel good about giving me what I want. So once you came to the price that you came to, how did you fund this deal?

So we used debt and equity on the debt side. We got just a commercial loan from a local bank. they did a two-year interest only, and then it rolled automatically into a 20-year amortizing note with the five-year rate maturity on it. Can we break that down for those people who don't know what that means? So two-year interest only, which means... So that gave us time to build it, and during that time, we only had to pay interest on our loan, and because we were building, we were taking draws. So we only paid interest on the outstanding balance. So it built as the loan increase. That's cool. All right. And then the 20-year am, or amortization means... So they based our payments on paying the entire loan off in 20 years.

So the longer that is, the lower your payment is. So you want it longer. 20 years is not great. But we have the comfort of knowing if we can't refinance it, we already have an option for permanent financing. Yeah, that's very cool. I like the fact that it roll right into it. You didn't have to go and refinance it and hope that you can get a,

it's almost like a burr. Like there are banks that will do burr loans. So like you buy it with an interest only loan kind of thing. And then like almost like a hard money. and then it automatically rolls into a long-term loan. It takes a lot of that risk of what if I can't refinance it, right? So, all right, that's cool. So two-year, inches only, 20-year am,

and then you said five-year, what? Was that five-year? It basically matured in five years. So at the end of five years, then the bank would call the note and we could either redo the note or get financing somewhere else. Yeah, and by the way, everyone listened to this. Like, this terms are important. If you want to, like, get into any type of real estate,

obviously this is more common for commercial when you're talking about the 20-year versus a 30-year for residential. But if you want to look like you know, what you're talking about when you go to a bank. Just say, like, do you offer any interest-only periods? Or do you do a 25-year-am or a 30-year-am? Or, you know, asking these questions will make you look like you know what you're talking about. So don't like shy away because, oh, these are big words. I don't want to deal with it. Lean into this because this is the stuff that matters when you're getting into real estate, even the small stuff. This helps. So, all right, keep going.

That was the debt side. On the equity side, we brought some money in. We, my mom and I kept 10% for bringing the deal to the people. So we got 10% for no cash in exchange, basically. What do you mean you got 10%? So we are going to have multiple owners in this project, and everybody's going to bring money to the table, and we're going to divide the ownership out based on how much each person brings. But we get 10% even if we don't put a dollar in. So there's only 90% left to divide amongst the people who are going to bring equity. It's how we structured this deal. I know this is your first that you did, this, do you feel like that was overly generous of you? Because I feel like that was overly generous of you.

Oh, yeah. Like, yeah. Okay. Even like in my, in open door capital, like my syndications, we start at 30, 70, 70. So we take 30 for being the GP and we give out 70 to our investors. And it still gives our investors a phenomenal. I mean, we just get a, we just sold our first fund and gave our investors like a 35% IRA like per year, like 35% return each year. Like, yeah. And that's at 70, 30. You gave 90% away. And I was scared to death to ask for the 10. like that I was asking for too much. So, yeah, definitely a lesson learned. I know people who do 50-50s.

So, yeah. Anyway, keep going. There's a whole lesson in there we could dig into on why we all shortchange ourselves and don't value our skill set enough. But keep going. And it's part of it's ignorance. But the other thing that we did is we were scared to death that this thing could go bad so we wanted to make sure it went bad for as many people as possible.

So we brought in our general contractor and our architect. And they used their fees as sweat equity. So it was less cash that we had to bring to the closing table. And we didn't have to pay them for that money. They basically earned their right into the deal. And then we still went and got a couple of more outside investors. The renovation budget was like $500,000. We paid $250,000.

The whole deal is $750,000. I write a seven quarterly checks for this one deal because we have so many hands in the pot. So that was another lesson learned. But hey, it got the deal done. I got the deal done. Like we said earlier, you don't know what the right path is until you start walking down one. Exactly. And that was 80% loan to value.

So we brought 20% of that to the table. Okay. All right. So then I guess next question, what did you do with the property? Then you fixed it up. You were a model that you developed it. I guess you called it. Yeah, we renovated it.

And we put two retail stores down below and then three offices on the second story. And in my very humble and unbiased opinion, it is now like the most beautiful building in downtown. We hired a mural-ish, paint a big mural on the wall. Like, it's beautiful. What shops are in there? We have a retail boutique in the front, and then we have a cafe in the back. And then we have two architects and us, our real estate office, is the office with no windows. The lowest rent, smallest office is the one we took for ourselves.

It's the only one we could afford. There you go. I'm attacking. That's great. Yeah. All right. Next question. What was the outcome?

So we refinanced at the end of 2019. and it had appreciated significantly. We pulled 100% of our money out of it. The distributions on it are about $45,000 a year. So we're not going to get rich on the deal, but it's infinite returns because we have zero money in the building. So that's kind of the outcome. You kept your investors in then, right?

Like even after, so now they're just getting, they're getting an infinite return. They love you. Yeah, who knew? I could have bought them out. Who knew? Yeah. Yeah, that's another option.

Yeah. All right. So last question. And then what lessons did you learn from the deal? I mean, I learned, like, don't bring so many people in. It's a lot of paperwork on the back end. I learned that, again, I didn't think we would get this building. And we asked, so don't presume that you know what the seller wants before you've even asked them.

And I cannot tell you, once we started posting on social media that we got this building, I mean, like, many people started reaching out, I've always wanted that building. How did you get that building? I was like, I contacted the seller. If you wanted it, how did you not get that building? right? And so I learned it's important just to take action. I mean, I guess those are probably too big lessons learned. And it proved that you could do burr on a commercial property because that's effectively what we did. And it's really the model we use for most of our ground up developments

now too. Curious for you. This is completely unrelated to that deal deep dive. But because I'm sure you probably don't love having all these partners, have you thought about selling a 1031 into a bigger property, letting some of them bring their gains into that deal. Some of them keep their gains. And if you get, like, let's say that you get a property four or five times bigger would then have enough cash flow to support having a bookkeeper so you didn't have to do that. Yeah, it's great. I did, David. Do you remember how we talked about how we were emotionally attached to our real estate? I can't remember if we talked about that or not. We own the coolest building on Bade Street. But yes, there will be a way in our future. We're actually going through that with another building right now

that we wanted to never sell. And we're like, it would probably be disclite. irresponsible not to sell it because it's even better than the one that we're in. I just sold my Kirk Cobain house. You did? Like his childhood home. Yeah, I said I would never sell because it was an emotional thing. But finally, like the nostalgia of having Kirk Cobain's very first home or first two homes, it was a duplex.

It played out. It was surpassed. Well, it was surpassed by the frustration of dealing with low-income tenants in Aberdeen, Washington that I was like, I'm done. Like, I'm done with that one. So we sold it and we got a great price for it. I made a couple hundred grand and dumped it into a actually condo that I'm buying here in Maui. I should close next week.

Yeah. Well, let me ask you, David. I always thought if you 1031, and that's because we're just now learning about it, I've never had deals big enough. Well, they were always flipped. So 1031 wasn't even an option. You don't have to keep the same ownership structure in place. I was under some false pretense that those owners went with you.

I think you do, but there are ways around it, like things like ticks and other things like that. Or you could like buy out people ahead of time. There's always a way. There's always a way. There's always a way through it. My guess is if you sold, everybody gets their gain and then they can choose if they wanted 1031 that into a different type of structure. The answer is always ask your CPA. How can I do this versus?

I'm in the market for a good one. If anybody has recommendations. Are it we all? If you are a good CPA, contact me because that's the next business I want to start so we can bring it to the masses because, man, it can be. challenging. Please. Yeah. Dude.

Do that. Yeah. I'm right there with you guys. All right. That was an awesome deal deep dive. I like I tend to get like very like shiny object syndrome. So I always tell myself, no, don't do it. But like I really want to do what you're doing.

I love the idea of taking old, especially old commercial properties and redeveloping them and the good downtown stuff. That's so fun. Like I love that idea. So I really have limited my number of investors. But you know, maybe I can work you into a deal or something sometime in the future. Maybe we'll partner on one. Exactly.

That's, that's my better role. giving people money and then they can do what they're good at. And I'm good at taking money, so this works. It's a match made in heaven. I never thought I'd find somebody like you. This is amazing. Katie, let's buy a bunch of cows and hire your husband to be the asset manager. Absolutely.

Now you're living his dream too. There we go. All right. So we're going to start taking this towards the clothes here. Where are you at today in terms of like, what do you own? What's your portfolio look like today? And then what have you got up to? And yeah, where are you headed after that?

Yeah. So our investments basically are in three buckets, the flips, which we have three of those going on right now. We still do those, just keep going if they come along. We have developments of mostly houses, so like townhome developments where we increase the density. Almost all of those are for sell, but we will rent them and hold them, but generally we sell those two. And then the third bucket is our ground up developments. And those mostly are boutique apartments or mixed use buildings. we'll put commercial on the bottom and like 20 residential lobst or however many we can fit on the top.

And those we want to hold for cash flow over the long term. And so today we have two office buildings that are multi-tenant office buildings. We have mixed-use building that's 20 residential lofts in three commercial spaces. We have two townhome developments with 15 townhomes under construction right now. And then we have one mixed-use building that's in permitting, fixing and break around the next 30 days. And then we have three more properties that we're going to develop into apartments or mixed-use buildings that are in the design phase with an architect. Very cool. Very cool. Yeah, that's neat. So where do you, where do you see us off wanting to head with all this? Do you want to just keep scaling this up? Yeah, you know, ultimately, I think I just want to sit back and collect checks. I mean,

that's what I told myself when I started this. So I don't know what that looks like. I don't know if one day, like, we'll maybe keep a couple of properties that we just love too much to sell and invest in syndicates and, you know, like, I don't know. We're going to do it until we love it. And then when a clear pass shows its way and we need to pivot, we'll do it. But in the meantime, we're just love what we do. So we're just going to keep doing it. All right. By way, how are you financing all these projects now? Is that all kind of the same model of like bringing in private investors and such? Yes. We've gotten a little smarter. So we try and keep a little bit more. and on our like townhome developments, those are 50-50.

We bring in zero money. We do the deal. We manage it. We sell them. The investor brings in 100% of the money and then we split the profits 50-50. On the apartment ones, you know, it's a little more traditional. We keep as much as we can and still get returns. And I learned something new from an investor about, you know, you go in where maybe you only

own 20 and they own 80. And then once the construction's done and it's leased up, it flips. They get 20 and you get 80. So we actually experienced that model with the one we're fixing a break ground on for the first time. And yeah, so I'm really still exploring all the different ways. Like one of my goals in my intention journal every day is by the end of this quarter, I have to find three new ways to underwrite or finance a deal. So I'm still exploring best ways to do that.

But we have a handful of investors that provide most of the equity. And then we invest in every deal as well. I love it. I love it. Well, thank you for sharing. I love your story. I love your journey. And I'm excited to see where you kind of end up.

And, yeah, it's been a lot of fun. We're not quite done yet. We got famous for it. I just want to tell you that. Yeah, I really like hearing from you. So this is cool. It was great to have you out in Maui, too, for the Maui Masterclass. It was, you were a huge contributor to that and people loved you.

Well, thank you. I would tell you, of all the things that I did on my list, I think that's the one that can see the most direct benefit from. So thank y'all for hosting it. Oh, that's awesome. Thanks. I love to hear it. You know what I kind of think we should do?

I kind of think we should make David do one high-pitched intro. Oh, look, he's so excited. I don't know. I'll leave it up to you, but it's my suggestion. Brandon sort of peer-pressured me into that high-pitched quick tip I've had to do over all these years. It's not natural. It's amazing every time. I'd rather, I want to do it in Batman's voice, but Brandon's always like, let's see how high we can make our voices every single time.

Quick tip. There it is. All right. Speaking of high-pitched voices, even though we have a sound effect for this, we're still going to do it. I don't know if people know this. So even though we have a sound effect that comes in for the famous four every time, David and I still, even to like Keosaki and Jocko, we're like, we still do the high, like when we're recording this, the high pitch, famous four. Every time, every time. So with that said, it's time for the famous four.

This is the famous four. It's the part of the show where we ask the same four questions to every guest every week. And Katie, I'm excited to dig in. So first question, what is your current or all-time favorite real estate-related book? So I'm going to give a real estate-related book that deals with the type of investing we do, urban infill development. And it's Strong Towns, A Groundup Revolution by Chuck Morone. I never heard of it.

I love new book recommendations. That's great. Yeah, I like when it's a new one we haven't heard of. Thank you for that. What is your favorite business book? I mean, the one that's had the biggest impact on our life for the last 18 months is definitely who not how. I mean, you got to have that to be able to scale and we think about it every step we take now. That's great. I'm actually reading the second book they wrote together, Ben Hardy and

Dan Sullivan. So Who Not How was the first one they wrote together. Second one is called The Gap and the gain. Have you read that one? I haven't heard about it. I didn't realize it was already out. Is it good? Yeah, it's out and it's incredible. I actually like, oh, you got it right there. Nice, David. Yeah. I actually like it more than Who Not How, I think. I mean, I love it. I loved who not how, but I think I like it even more. Yeah. It was phenomenal. So, okay, I'm going to grab it.

Well, it is. I'm listening on an audible right now. And the audible is cool because he actually interviews. So Ben Hardy, who wrote the book, really from Dan's advice on the audible one, he actually interviews Dan after every chapter and kind of like goes deeper into it. So it's kind of what they did on like David Goggins book. What was it called? Can't Hurt Me?

Whatever? They did the same thing on that one. Yeah. It's actually a good idea for Bigger Pocket's books. We should do that when we write a book, David. He's record the audio book as like a every one, every chapter just have like an interview with us. It's a good idea. Yeah, it doesn't mind. We'll work on it. All right. Moving on.

Little known fact, they actually named the gap of the game after Brandon and I. He is the gap. And I, are you flexing? Are you really flexing right now? Are you showing this your guns? Next thing you know, he's going to have a shirt off on Instagram, posting pictures. Yep. Well, you know, a form. No, that will never happen on Instagram. But if you watch Bigger Pocket's YouTube channel, you will see a former podcast host who showed up with his shirt off and showed off a little bit. Yeah, I think that's coming up here in the next, let's see, what episode of? is this one? I don't know. It's not the one with Noah and Jeff, who you also know, Katie. Noah and Jeff. Yeah, Mr. Josh

Dorgan just randomly shows up with his shirt off in my office, which was pretty funny. Oh, that couldn't have happened with two better guests. Yeah, I know. It was amazing. It was amazing. And Josh is looking ripped. So that said, moving on. Next question, David. It's yours. Next question. Katie, what are some of your hobbies? Well, I have two almost grown kids.

So my biggest hobby is spending as much time with them as they will allow to make memories. Right now, they're both really big into showing cowhorses. So I play horse show mom on most weekends. And they show horses we raised. And so it's just fun to see the joy that they get out of competing on the horses that they've trained themselves. But when we're not doing that, I like to explore cities in Italy and snow skiing.

That's kind of the family vacation. That's cool. Brandon, when you're describing an environment that's not urban, what would you call that? I don't know where you're going with this, David. The rural rural. Are you making fun of my inability to say rural? I'm giving another homage to Josh Dorkin, ripping on you for like the first 100 episodes that rural was. That's how you know the real OGs of the podcast if they remember. It's rule. You don't even need the second or. Just rule.

R. All right. R you are. Rer. I like the rure places. All right. Last question for me. The rur, burr. The last question for me. What do you think separates successful real estate investors from all those who give up, fail, or never get started? You know, I think it's hard to stereotype everybody into one thing. But I think what it's not. Yeah, it's not.

So let's do it anyway. Okay. I think with my kids, what I see the most is, and it probably applies across the board, is people who are not willing to are able to take ownership in their place in life. And once you give up your ownership or once you give up your ability to change your position to outside forces, like your mind's powerful. It'll believe it's true and you'll get stuck right where you're at. Wow. That's so good. So good.

I'm going to take that and make that an Instagram clip later. I throw up on TikTok, put some music behind it. It'll be, it'll be perfect. I love it, Katie. Well, thank you so much. This has been a lot of fun, super informational. And I hope this helps a ton of people. I know it will because you're on to something there.

That's a really cool strategy. I think a lot of people will take and run with us. So thank you for sharing your wisdom. Thank you. It was awesome. I can't believe I got to be on the OG with the boys. loved it. Yeah, there you go.

Well, appreciate you. Katie, do you remember what episode we had did where I coached you? Yeah, it was recent five something. I don't remember what the episode number was. We'll see if we can put that in the show notes. But if you want to hear more of Katie, she was on one of the episodes I did when Brandon wasn't here where we went through three different investors and we walked through your personal situations and coached you.

So it's very nice to have you back to go. How did that voting go? Weren't you trying to compete to see who did the best coaching with Brandon? We probably won, right, David? Oh, was there? Was there? I didn't know. I wasn't going to tell Brandon.

I did not know there was a competition here. Everything is a competition. Yes, everything is a competition. Speaking of that, it's funny, so I was gone for like a month on vacation back like two months ago, whatever when this episode airs, it was like two months ago. Anyway, people like were going crazy on YouTube saying like, yeah, I know there's a beef between Brandon and David.

There's obviously a problem between Brennan and David. And I don't know why they're so angry at each other. I was on vacation. I was at Disney World. I didn't want to record 10 episodes ahead of time. You just want to say people, go do something productive. Buy some real estate. Yeah, exactly.

No, I'm actually flattered that I've hit the level of fame that I'm now having rumors said about me that are true. People can say more things like that. I'm actually like, wow. Like, people are making stuff up. I made it. You made it. That's funny.

All right. Katie, there's no beef. The only beef is what Katie's husband is. Cooking up, baby. All those cows that are being hurted, wrangling up. Yeah, what kind of cowboy is your husband? Let's end this show with that question.

What kind of, is he cows? Ask me, ask me the question again. What kind of cowboy is your husband? Oh, my goodness. So he's a working cowboy. So that means it's like a day working type thing where he oversees cattle for large ranches all the way across the state. They are a horseback.

They rope them. They cut them. They, you know, do all the cowboy whale. life different than a rodeo cowboy that goes into the arena and competes. And so, yeah, he's a working. I would imagine those working cowboys don't care much for those show cowboys. I tell you, they can't get along with the farmers. They can't get along with the rodeo cowboys.

They got the right way of life. Yeah. Yeah, cowboys are just lonesome. I don't know. I feel like there's been a few songs written about that. Yeah, it's very romantic. And they're very, it's almost like getting stuck in junior high and never getting past it. Every thing you wear, every way you look, it's all very important about who you are.

That's hilarious. I love it. All right, Katie. Thank you. David, get us out of here. I'm going to close up shop. Thank you very much, Katie. This is David Green for Brandon High Pitch Turner, signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for

informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.