BiggerPockets Real Estate Podcast - 566: 10 Properties in 8 Months by Saying “No” More Than “Yes” w/Jason Rash

Episode Date: February 3, 2022

How many rental properties do you own? It could be one or one hundred rentals. But, whether you’re a rookie or veteran real estate investor, it’s hard to not be impressed by Jason Rash’s story. Jason has put off investing in real estate for most of his working life, focusing more on passive income streams like investing in stocks. This all changed when Jason saw tens of thousands in stock value disappear from his accounts. He wanted something more reliable, stable, and calculated that he could control. Of course, real estate investing fits that criteria exactly. So what did Jason do? Did he go and buy one rental, wait a few years, and then try to buy another? Nope. Jason went and bought ten properties over the span of eight months. That more than one property a month within his first year of investing! Be warned, there is a method to this madness. Jason has a tight control on his long-distance investing, having only the best agents, property managers, plumbers, electricians, and contractors on speed dial. This wasn’t a system he fell into, this was a system he intentionally built. Jason shares his six-part criteria that any new investor can use, especially when trying to minimize headaches and maximize cash flow. In This Episode We Cover: The huge competitive advantage of having local knowledge and a core four Lowering your property management fee while creating a win-win for both parties Seller credits and using them to finance house repairs and upgrades Fighting off “shiny object syndrome” so you can stay focused on your goal Jason’s six-step criteria to buy headache-free houses when investing from a distance Building a scalable, repeatable, simple system for finding, funding, and closing on great deals And So Much More! Links from the Show: BPCON2021 Zillow TEDx Talks: How to Succeed at Doing Anything | David Greene | TEDxRoseville Airbnb BiggerPockets Website David Greenes's Instagram Grant Cardone's Website Check the full show notes here: https://www.biggerpockets.com/show566 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 566. When you're investing in real estate, it should be the complete exact opposite experience of you buying your personal home. Like your personal home is like your personal home. Like, oh my God, I want to live here. I want to know these neighbors. Oh my God. I love this countertop.

I love these colors. Oh my God. The view's amazing. When it becomes a rental, like none of that matters. None of it matters. Like the only thing that matters is the number. What's going on, everyone? This is David Green,

your host of the Bigger Pockets podcast, where it is our job to teach you how to become financially free through real estate. We believe real estate investing is the best way for ordinary people, just like you and me, to build wealth. And we prove it by bringing you stories of people who started out right where a lot of you are today. They've taken these concepts and applied them in a simple, but not easy way to find financial freedom for themselves. And I want the same thing for you. And so does everyone have bigger pockets. Today we have a fantastic show with Jason Rash. Now, Jason ran into one of our producers, Eric, at BPCon 21, and Eric was so impressed with Jason's story that he

invited him to come on the show. Now, Jason has been able to get 10, not doors, but properties over only eight short months all in Alabama. He goes over his strategy, what he looks for in deal, some of the hurdles that he encountered doing this, and how he was actually able to scale his portfolio safely and quickly. I think that that's very important. You're not going to miss Jason's strategies of what he looks for in a property, specifically what he looks to say no to. So Jason talks about he only wants to buy brick houses. He says no to homes with pools and a list of other things that he says, nope, that's not going to work for me in order to make the yeses more clear. You're also going to see what he looks for in a deal to know that it's going to work for him

and how he negotiates hard even in a hot market. He gives some very good practical strategies that anybody can use in most markets across the country today. Finally, Jason's going to share some of the details that he looks for when finding property and managing property to make sure that he doesn't have surprises like air conditioners, roofs, and furnaces that go out that he wasn't prepared for. So Jason's got some pretty good examples of the types of property he wants to find that's going to keep maintenance and capital expenditures low so that his cash flow can stay strong for a good period of time. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy,

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And that comes down to, to three numbers. Occupancy, delinquency, and net promoter score. If those numbers slip, your income slips, and your trust slips too. And most PMs don't hold themselves to performance standards. They focus on activity, not outcomes. Mind is different. They obsess over the metrics that actually grow your cash flow. Go to mind.com slash show me to see how mine performs and get a month of management for free. Because if you're going to hire a property manager, hire one that manages your investment like an investment. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress?

Here's a better question. What if you could buy brand new construction homes, 10% below market value in the best markets across the country without making real estate your second job? That's exactly what rent to retirement does. They're a full service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75% of or down payment back at closing, plus interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Without further ado, let's get into our interview with Jason Rash. Jason Rash, welcome to the Bigger Pockets podcast, my friend. Thank you so much for having me,

David. All right, so why don't you give us a brief overview of what your real estate portfolio looks like in sort of the business environment that you operate in and then we'll dig in from there. Sure. So first of all, I want to say thank you so much for having me on the show, David. I'm a big fan of the bigger pockets. And I've gone into the events. I've read your books. I've read a lot of the other books, just rental property investing, you know, how to invest in real estate, things like that. And so my portfolio honestly consists of single family homes. It's very simple. I'm not the smartest guy in the room, but I figured out, I hacked it pretty much said, okay, I can do single family homes. It's not that hard for me to understand it.

And so for me, the easy thing about building a business is having a simple formula. And single family homes are what I feel comfortable with. And once you get one and you hit one, you know, you do your first and do your second one. And then you can start doing it over and over. It's the same exact thing over and over. So I've been in real estate for about, I'd say less than a year. I did my first deal in February 5th, bought 10 homes in the first eight months of 2021. It was a hell of a ride.

And here I am, man. I went to the Baker Podcast podcast and bumped into Eric and the rest is history. So where did you buy these eight homes in? Yeah, so I bought the Tim Holmes in Montgomery, Alabama. I'm actually originally born and raised in Montgomery, Alabama. And oddly enough, I surveyed land there. So I happened to pick up things about flood zones there, building types, socioeconomics, demographics, way things are moving through the city. And I was like, man, I really don't like living here.

So I moved away. But then I was like, I needed somewhere to invest. And I'll talk about that in a second how I got into this. But I was like, first spot, Montgomery, Alabama. I was like, man, I know the area. I know everything about it. And I was just, it felt very comfortable to me. That's right.

You said 10 homes, who does eight months. Now, in the book Long Distance, Rills, and Investing, I actually talk about looking for a competitive advantage when picking your market. My perspective is too many people say, what is the next hot market? And they try to outsmart how the market works. And I say, no, just find a way where you have an advantage that you can pick a momentum. So if you live somewhere and you know the people that are there, you're familiar with the market, there's a comfort level.

That's where you start. Would you mind sharing if that was, like the similar mindset you were in and maybe what were some of the competitive advantages that you utilize to get such a nice portfolio so quickly. Yeah. So first things first, like you're right on point. Actually, that is my next book to read is long distance investing. Oddly enough, I haven't done it. I live in Colorado. I need to get around to read now. That's the next one on the list. So number one, local knowledge is everything. Like no local knowledge from a realtor, local knowledge from friends, local knowledge from family, or your own personal local knowledge

of the area is gold. You can't get a lot of the stuff that you can find on the internet. You can't get hard data from net light like hey listen these homes down the street that are not on the internet you know that's a crack house over there and four blocks over you got like some some sketchy areas over there you're not going to see that on the internet nobody's going to put that out there so number one i went to a real estate agent that i knew and trusted she had actually sold my house when we moved out of montgomery 11 years ago i just connected with us say hey wanted to check back in see if you're in real estate oh yeah my god i've been in real estate i've sold like a couple hundred homes 500 homes 600 homes since you moved away 10 years ago i was like oh my god yes so

you know, number one, I went with her. She could tell me, and then I explained to her, and said, listen, this is what I'm wanting to do with real estate. I want to come into the market. I want to buy these properties and these parameters. And this is what I'm looking for. Can you help me? Yes, absolutely, I can help you. So I went in. I leveraged that. And then all of a sudden, I found myself when I got me deep into the homes, hey, I need a painter. Hey, I need this. Hey, I need that. My real estate did you help me out with that. And I was also able to lean on some of those contacts. I had been living in the city for 31 years. I was also able to lean on some of those contacts like yard guys, electricians, things like that. And that's, that's all valuable. That's all

valuable. When you're looking to build a portfolio, like having trust into people that are helping you repair or build or whatever it is you need to do to make ready, like having that is, it's gold. It's worth this weight in gold. That's really good. So did you go in there knowing these are the pieces that I need to find to make this work? Or did you just go buy a property and then figure it out from there? So I went in, number one, I think if you're going to go into real estate, you need to know what the back end looks like. So for me, I want to be hiking through the jungles of Tibet and I want to get a rental check. That's me. For other people, they want to be more hands-on. They want to do flips and things like that. Right now in my career, that's not me.

So what I did was I want to buy homes. I'm 1,500 miles away. I need a property management company number one. So I found a property management company at the recommendation of my realtor. I have a long list of questions. I've vetted her out and actually vetted two or three more. I don't take anyone's word as like gospel. So I had vetted her out, vetted out of others. but I did wind up going with the one that she recommended. Now, I knew that I needed a team. So I talked to my property manager, hired her, got a real estate agent, I got contractors, I have everybody in place. So I think that if you're going to do something like this that I'm attempting to do, you need people and you need people that you can trust. That's so funny. So it doesn't offend

me that you haven't read long distance for real estate investing in case you're worried. I'm actually fascinated when other people do the same thing I did. They invest out of state or in different area. and then they just naturally did the stuff that I put in the book. It's almost a validation that I got it right when the people who did this well are doing the same thing. So in the book, I talk about the core four. And it's your property manager, your deal finder, usually your realtor, your lender and your contractor.

And if you have those four pieces, you can put the whole thing together anyway. And what you mentioned is a big piece of how to do this right is you don't have to go find four of them. You start with the realtor. And they usually have a recommendation for a lender and a property manager. property manager probably knows a contractor and you end up sort of vetting different people through the ones that you do like can you just explain a little bit about the specifics of how that conversation went like what did you say to your realtor to get the recommendation

and when you found your property manager how did you explain to them what you were going to need to make this work as you were hiking through the junk sure so when i talked to my realtor i said listen here's what i want to do i told her the plan said i need a property manager so when i met the property manager said listen here's here's the deal number one one, you know my realtor, but I need to ask you these questions. So she went through all the questions and said, number two, I will be your best customer, guarantee you for a fact. But the first thing I need to know is how many people, like, what is your biggest client? And who is it? She's like, I'm not going to tell you who it is, but they have 30 homes. We have two clients here. They have

30 homes with us. I was like, cool, I will be your best client. Guarantee you for a fact. And I said, hopefully my actions will show you what it is, how it's serious I am. Number one, number two, whenever since a couple of things started to break along the way, I got them fixed immediately. And I think property managers really can stand behind you more and recommend your homes in front of other people if you're willing to fix repairs that come up immediately and you're willing to be proactive. There's a lot of people she explained to me that said that, you know, hey, listen, they got mold in their house to let them live with. It's not a big deal. Hey, listen, we've got a little water leak there. We'll get around to it.

A lot of people are very, you know, they're very nonchalant. That's not me. I'm a very hands-on guy. So I made a deal with my property manager. I said, how much you charged? She said 10%. Okay. Fantastic.

When I get to a certain X number of homes, because I will get to. these homes with you, I want to drop it down to 8%. She's like, done, not a problem. You're the only one I'm going to cut this deal for, but not a problem. And so me and her have a great working relationship. That's exactly how I did it too. That's so funny is I didn't just go in there and beat them up and say, drop your price. I said, look, when I get to X amount of homes, I'm going to expect you to do this. And they said, hey, that's fair. And that's all it took was just setting that expectation in the beginning rather than waiting and then going to them with a sense of entitlement that usually just causes conflict. Absolutely. So tell me about this first house that you got. What are the details of it

and what made you pick it out? Sure. Give me one second. Let me pull this up right here. So the first house, now I want to go, I want you to backtrack this. Okay. So number one, I like to set goals. And I set goals with the timeline. So I got into real estate. I think this David, I didn't need to back up to how I got into this. So my father passed away in June of 20. And he had been telling me for a few years before, hey, you need to get in real estate. You need to get in real estate. And so I'm like, okay, whatever, dad, you know, I don't understand it. I made up all these excuses in my mind that I apparently didn't have that investor gene, so to speak, or the math was too complex or whatever it may be. So I was like, okay, I'm just going to invest in the stock market. Well, I got like,

$300,000 launched into the stock market. I lost $26,000 in eight minutes, like, poof, just like that evaporated. And I think it was October 18th of last year of 2020. And I was like, you know what? I feel like God's trying to tell me something. And, you know, I'll be honest with you guys, like, I don't know what you believe in. I always feel like God, the universe, wherever you believe in is trying to talk to you. So I thought about it, $26,000 out of $400,000, $350,000. It's not that big of the deal. But what if it was like $2,000 or $2.6 million in eight minutes, a lifetime of savings.

And I was like, oh, my God, I can't control this, however good I think I am in picking stocks, I can't control it. So immediately I started looking into real estate. I hooked up with some friends and some other mentors outside of the bigger pockets community. And they're like, man, this is a great idea for you to go into real estate. And they kind of gave me some nudges as well in the right. direction. So in October, actually, I bought these books. I bought how to invest in real

estate and the rental property investing book. I bought these books right here and I also bought managing rental properties as well. And I gave myself a goal. I said, okay, here's the deal. I'm an action taker. And if you're out there in your real estate, you've got to be an action taker. Number one, you have to overcome doubt and fear. But number two, you got to overcome like markets and like changing market conditions as well. So what I did was I said, okay, I'm going to buy these books. I ordered him from Amazon October. I think it was October 26, 27. So fast fast I move. And then I said, okay. I said, okay. I'm going to give myself 90 days. I'm going to close on the very first deal in 90 days.

Okay, that's how fast I was going to do it. Keep in mind, guys, I've never done real estate. I don't have any idea how this thing works. So I'm like, okay, I'm going to absorb it. I'm going to invest. I'm going to invest my time and money. Okay, boom, I'm in the market. By December 20, I'd say probably December 21st of last year, I started putting it out there on Facebook, hey, I'm going to be a real estate investor. I'm looking to buy homes. I'm looking to buy homes in this area. I just threw it out there at my hometown of Montgomery, Alabama. And this guy from school, who I haven't talked to in 20 years reaches out to me and say, hey, man, am I have a deal for you. And I was like, really? Send me some details. So he sent to, he sent like an old

zillow listing of this house. I'm about to share with you. And he was like, listen, man, this house, nobody lives in it. It's got new appliances. It's got a new roof. It's got a new flooring and a new H-back. It's three-bedroom, two bath, 1900 square feet. And I'm like, okay. So I start running numbers on spreadsheets. We're going to get to spreadsheets in a minute. But guys, I want you to understand something. If you're out there trying to do your first deal, like whenever you put it out there in the universe. You have no idea where people are at in their lives. You have no idea how much pain they have. They may just have this property. They're sitting on it's perfect for you that they just want to dump. I hadn't taught this guy in 20 years. He just followed me on Facebook. He sends me the thing.

He says, listen, I'll sell you this house because I want, if not, if you don't want to buy it, I'm going to give it away to charity and turn it into a home or somebody's going to turn it into a home. He sent it to me of $63,750 for the whole entire thing out the door. And I was like, what? You got to be kidding. I started running numbers. So I'm sitting here doing my numbers, right? If I'm, it's six to three thousand. That's going to give me about a 25.4% cash on cash return on investment. That's that's their long term maintenance and everything's factored in in vacancy, 10% vacancy. And I'm looking at it. And this is with $950 a month coming in, okay? I can raise the rents to $1,000, maybe $1,100 a month. So what you guys understand? I'm like, like the best deal might be right out there off market right underneath your

nose that somebody's just sitting on. Like, David, this is how fast it moved for me. And I don't know how it was for you when you went into new markets, but this is how it was for me. All right. So when you saw that deal, what caught your eye about or what made you think that's a house that stands out amongst the others? Well, number one, I was like $63,750. I was like, well, dude, if I screw it up, man, I only got $13,000 into it. I mean, I think the down payment was like $13.9 with closing costs and everything. And I'm like, I can't mess it up too bad. I mean, and I'm looking at the mortgage payment. The mortgage payment was going to be like three, what, like $3.60, $3.70, something like that with tax title, insurance, mortgage payment, everything. And I'm like, I can't mess this up. There's no. I mean, this is like my car payments more than this. If everything goes south, I'll just pay the thing and just sell it.

Right, I'll pay the mortgage payment for a few months and sell it. That's literally what went through my mind. I'm like, new roof, new appliances, new flooring, new H-Fack, three-bedroom, two-bath, all brick in a great area. I'm like, this just seemed like a home run to me. Okay. And then how did you research what the income was going to be, what you thought you could rent it out for and what your ROI would be? Fantastic question. So I started going on Zillow and I just started looking around in the areas for rent.

And I just started doing some past stuff. And Zillow actually had it all completely wrong. They were off by like a couple hundred bucks, but in the wrong direction. So they were saying you could get like $750 for this house, $8.50, stuff like that was another company that I looked at. But I was like, you know, if it goes for like $750, $800. So I just did the average. I'm like, I could still make this work.

I mean, it just seemed like a no-brainer to me. Did you take those numbers to your property manager and ask them to verify it? So I didn't have the property manager at the time. That's how fast I was rolling. I was like, well, it looks good on the spreadsheet. I didn't even, by the way, let me be very clear. I did this first deal without a realtor. I did the whole entire thing myself.

And so what happened was I did all the documents myself. And by the way, I don't recommend you doing your first deal by yourself with no real estate agent. I did the whole entire thing all by myself. Okay. So on this deal, like how has it worked out? Have you been happy with how it performed? Have there been any hidden surprises that popped up that you didn't expect?

So I flew in to do my first deal. Okay, I flew in and I actually made an offer on the second deal before I closed on the first deal. And I'll talk about that in a minute. But real quick, I did hit the 90 day mark. actually I missed it by one week only because of my lender. I was supposed to close January 26th, and I missed it by one week only because my lender dropped the ball. I fired the lender, by the way. I was like, listen, this is unacceptable. I went to a better lender. She's way better

anyway. She crushes it. So the deal's been fantastic. I've had like a couple of issues, like we'll say like maybe like a toilet leaking underneath and a couple of like a flapper. They had to come in and like put some like drapes and stuff up. Nothing major. Like nothing major at all. Fantastic. It's cash flowed wonderfully for me. And I can't complain. It's been absolutely magical. It's been great. Awesome. So is there anything that you would change with what you know now if you went back when you bought that first deal? I probably would have negotiated a little bit lower. I probably would have done $5,000 or $10,000 lower because I didn't pick up on how much pain this guy was in. I think I wanted the deal more than he wanted to get rid of it. Okay, so tell me how you would

have gone about, or at least the attempts that you would have made to try to get that thing lower. And then also, if you don't mind, what did you see in that seller that made you think? think, ooh, there's a little bit of blood in the water, and I could have been more aggressive. So he had mentioned to me, like, whenever he first sent me the deal, it's like, hey, listen, man, if you don't want to buy it, I'm just going to give it to a home. Now, keep in mind, guys, this is February or whenever he offered it to me, December 21st, 2000, we were in a very different market than we were just last year. Just six, seven, eight months ago, we're in a completely different market in a lot of markets

of people that are listening to this. So first things first, I would have negotiated with me. He would have thrown out $63,000. I would have said, listen, I'll pay you $59,000. for it, $58,000 for it based on XYZ. I mean, all the homes in the area were going for like 69, 70, 71. So it was still under market. So, I mean, I felt like I still got a great deal, but I would have just asked five, just throw it out there. Hey, man, let's just do, I'll do the deal for 59, 58. Yeah, sometimes you'll still do the deal at the price that they want, but it,

there's almost like the couple thousand dollars isn't going to make a difference, especially if you're financing it at this rate. I mean, we're talking about 10 bucks a month or something. maybe it's close right but the the sort of the experience that you get i feel like i'm about to do it again i can feel it coming a jiu jitzy reference if you go roll with someone who's better than you and you know you're not going to win but you learn something and it's very similar like sometimes i will do the same thing as you i will push i will poke i will negotiate harder i'll try to find where you see some softness in the other side not because it mattered on that deal but because that experience will help me on the 10 million dollar deal where that is going to help right absolutely can you share

little bit because you seem like a similar mindset. Can you share some of the lessons you've learned when it comes to how to get a little bit more? For sure. So I'll talk about another. Can I talk about another deal I did? Yeah. Let's hear about it. So I mean, I've gotten roofs. I've gotten age facts. I've gotten all sorts of stuff from people, man. It's unbelievable. So I want to say the dirt house that I did, they were real snobby, to be honest with you. They were just like, oh, this is our house. And the market, by the way, is starting to go up at this point. We're talking like March, April. It's starting to go up and tick up a little bit. And And they're like, listen, we were, you know, I put the contract in for 100, and they're,

they're sitting back like, like a week goes by, we're in this deal. They want to get out of the deal because they're like, hey, we could put this thing on the market for 120. They felt bad about it, number one. And I was like, listen, I got the deal. I got you locked up in the deal. And it turns out from the inspection that there was some issues with the roof. It was old.

It had some issues with the shingles and stuff like that. And the inspector, I can't remember exactly what went wrong with it. But the inspector was like, hey, listen, you need to have this roof replaced. So I just straight up said to him, say, listen, I met you on your turn. I told you I'll just go closed in 30 days. I've offered you full price for this house. I want the roof replaced. And we went back and forth and they didn't want to do it.

And I was like, listen, either I'm going to do it or somebody else is going to have you replace this roof. So what is it going to be? Because I'm going to close. And the next person that you give, by the way, the house has to go back on the market. So someone's going to be asking, hey, what's wrong with this house? Is there something wrong that the seller of the seller backed out? You know, so I mean, it's starting going to stigmatize the house.

Let's just go ahead and do this deal anyway. And they were finally just like, okay, fine, you get the roof. And they weren't very happy about it. but it felt great. There's another one that I did that I got $10,000 out of. I don't know if I'm supposed to mention all this, but I'll mention it anyway. So there was like a leak underneath the AC unit, and it was just like a slow leak in the condenser line. And that was my assumption the whole time. I had an AC guy going there. He verified all the wood underneath the AC had been rotted. And it was the foundation that has like a little cross space underneath and like the

wood underneath it started a riot. Anyway, this is probably, I'd say June July. So the market's changed from March to June July. This is a different house. And My guy wanted to, the selling agent wanted to sell this house so bad. And my buyer's agent was like, hey, listen, let's just go ahead and just buy this house. I said, no, no, no, no, no, there's something wrong with this. Let's go ahead and get this fix. We were about to close. And the lender said, hey, listen, you've got to get this fix.

You're going to have to get this fix. So the seller's agent went and got the first person he could find on the internet, which, by the way, happened to be the most expensive company. They came in and they're like, okay, we're going to do this deal, but it's going to be $10,000 to fix this thing. I guess the buyer was just like, okay, I mean, the seller was like, okay, let's do it, whatever. So we wound up closing. It turns out I got a different guy because the one that he quoted, it was busy. It turned up to be only $1,200 bucks, $1,200 to get fixed. So the other $10,000 went into like other areas of the house fixing it up. Unbelievable, man. Unbelievable.

So let's break into some details there with the house that you had the roof replaced. You said the seller replaced that roof themselves, right? Yes. Did you work anything in that they were required to have it done by a licensed company and you could check the work or how did you work that out? Absolutely. So like whenever I put it in any contract, I'm always saying, hey, the work must be professional. formed by a license contract. This could be electrical. This could be plumber. This could be roof. I mean, I don't want their cousin coming up and putting on the roof on the house. I also want a warranty. I ask for a warranty on the house, too. I mean, on the roof as well. So, you know, warranty of the work, warranty of the shingles, all that good stuff. So absolutely, every time I ask for license contracts. And if they don't do it, then we'll just get ripped out, rip out that work and we'll do it again. But somebody who's licensed. I'm not afraid to go there if I have to.

Okay. And then sort of recap what you said. You went a little quickly on the second deal where it sounded like you negotiated a lot of repairs off of one sum of money? Yeah, so there was an AC unit in the middle of the hallway and underneath the condensation line apparently had gotten clogged up. So water had started dripping. And over the years, it just started to drip down, started to rot the wood underneath the sub-deploying and then the foundational beams inside the cross space. And so my guy, we're at the very last day. And my lender was like, hey, listen, we're not going to close on this house because of these repairs. You're going to have to get this repair to get a seller credit. So the guy that's the seller's

My buyer's agent didn't do it. She was like, hey, she put it on the seller's agent to do it. Hey, go get a repair. You need to get a contract or estimate for this so we can run this through escrow. So he went and just Googled somebody and he just picked the first one available because that was just who it was. Turns out to be the most expensive. They came in and said, we'll do this job for $10,000. And they were like, okay, all right. I guess like I said, I guess the buyer was making enough on the sale to cover that. They ran $10,000 in escrow. I tried to call the same guy back. He was busy. He wasn't going to be there for like a while. I'd say probably he was probably six, weeks out from getting to it. So I just called somebody else. They were 1,200 bucks. So I just ran there. I ran gutters around the house. I got a whole bunch of electrical work done in the house with the rest of the money. Okay. So you negotiated a chunk of money for repairs. And then in this case, you chose how to allocate it as opposed to telling the seller, hey, you go fix the problem. Is that right? Yes, correct. They didn't want to have anything to do it. They were just ready to be done with it. So I'm curious, when you make that decision, do I ask for the repairs or do I ask for the request for

a credit? Are you doing that? on just whatever the seller says, are you saying like, hey, I want you to fix it? And if they say no, then you say, fine, give me the money. I'll fix it. Or are you kind of strategically looking at this from a financial perspective and saying, I bet I could get this much money from them and use it more wisely than if I asked them to go make the repairs? So that's a great question. So part of it is I live 1500 miles away. So, and I will dive in on like what I do on most deals. On a lot of deals, what I do is I actually will offer them what they want because I could tell the market was going up. I was like, I'm going to buy this house. It's going to be worth $5,000, $10,000 more just in

45 days. So like, for instance, some of the deals, I've asked them for full price only, only, and I'll just say this, like, this is the only reason I did this. It's got a new H-Fack. It's got a new water heater. It's got a new roof. Like I came across the deal I offered 5,000 more because it had all that stuff, new flooring, new kitchen appliances. I was like, hey, listen, I'm going to get out bid on this. I know for a fact I'm going to get out bid. I'm going to offer $5,000 more. Now, when it comes to repairs, I actually offered them full price, but I said, here's what we're going to do. I'm going to meet your price, but you have to meet my terms. Because I'm not there.

I can't walk through the house. I can't touch it. I can't smell that. I've got to trust my real estate agent. I've got to trust my inspector. So I send my inspector through there. I've got a great inspector. And so he just bang, bang, bang, bang, bang, bang, bang.

I'll come back with a list of 20 items. And I'm looking for 50% of them to get done. The big ones to get done that are going to cost me. We're talking like GFI outlets. I don't want to hire a contractor to come in, electrical guy to come in, like GFIs or like new electrical boxes out. So I will ask the seller to repair this. Most of the time they push it back on me and say, listen, we'll give you a seller credit, but you've got to do the repairs. And I'm like,

I don't want to do the repairs because I live out of state. So I want them to do the repairs within 30 days. So basically, I can have it make ready. I've had the sellers get it make ready. And so I can push it through there. The only reason why it changed on that last one is because we had gotten down to like the day right before closing. And that's why whenever that had that water damage, the guy just, he just pulled the first guy he could find. Then it was the fastest way to get the problem solved. Have you run into the situation yet where you negotiate a higher credit from the sellers than what you can actually allocate towards your closing costs? I have not.

Have you? Yeah, that one does come up for our clients. This happens pretty frequently. So a lot of people that are listening might not realize you can't get a seller credit of just infinite money because otherwise fraud can happen. You could say, I'll buy your house for $100 grand and I want a credit from you of $100,000. And then the seller gets $100,000 from the bank and you get $100,000 from the seller. and then you just let the house go to foreclosure and the bank eats it. So the lenders will limit how much closing costs you're actually able,

you can only ask for the amount of your closing costs from the seller. So one of the techniques that we'll use on the David Green team is, like, in general, most of our clients know the money in the bank is better than the price on the house. So if you're going to buy that place for $100,000, you're better off to buy it for $110 and get $10,000 back as a credit because you can take that $10,000 and fix the house up to make it worth more. maybe you can make it worth $30,000 with that $10,000, or you can keep that money in reserves in case something goes wrong. You can use it to buy your next property. In today's market with

appreciating asset values and low interest rates, money in the bank is worth a lot more than the actual price on the house. That part makes sense so far? Yeah, it actually does. So what we'll do is we'll negotiate as high of a credit as we can get. And then if that's more than their closing costs, we'll use that money to buy the rate down with our in-house lending team that we have. So if your interest rate was going to be, say, 3.5, we can now take part of your seller credit, apply it towards your closing cost, buy your rate down to 2.8. And that actually is going to save you money over the life of the loan, even though you paid more to get the rate by back. And I'm always looking for little ways like that to make the deal more efficient for our clients. And so that's what I love about what you're saying is it sounds like you're looking at it from the same perspective.

Yeah. I didn't know all that, but yes, absolutely. Well, I'm encouraging people to think that way. And especially here's why. When you're in the price point that you're playing in, Jason, these repairs can make or break your deal. There is a small margin of error for maintenance vacancies, right? Like, you're not getting it. How much is your average rent that you probably get a month?

I'd say $9.50 to $1,000. We'll say $1,000 for easy numbers. So that's pretty solid. But, I mean, it's not $2,000 or $3,000. Right? So a couple hundred bucks can make a huge, huge difference in your ROI. I was going to say absolutely, man. Like the main issue with some of the houses is,

I bought them with like 1956 to 1954 era, and they've got that galvanized piping. And, you know, I mean, $200 here, $250 there, and it'll eat it up. One sewer line running under the house that needs to be repaired can screw you over. Sometimes just a tree removal that you didn't see coming can crush you at that price point. So when you're in, like now I don't buy houses in that price point anymore because, right? Me neither. So now I don't have to, this is going to sound weird. I don't have to look at the details quite as closely when I'm buying a $2 million.

asset because the cash flow producers will cover over a lot of what I miss. But this is why the market you're in is so good to get started in this because it forces you to be really, really tight with what you're doing. You build very good habits when you're investing in those markets, having to look at everything as closely as you are. And the price point is low enough that you don't need as much money saved up to get entered into it. So one thing that, like, just that's the strength of the market you're in. Obviously, the weakness is that much attention to detail can become very burdensome as you start to go into scale. So at, at, At what point did you realize that and what did you transition into when you wanted to move out from these types of deals we're talking about right now?

So here's the deal. I went so fast that I haven't bought any other homes in that price range, but I'm about to put an offer in next week on one that's built in 2005. It's a little bit more, but I'm not dealing with galvanized piping. I'm not dealing with plumbing issues in the house. I'm not going to deal with anything of stuff. It's got all updated things. Like that's been my biggest issue when purchasing homes like that. And don't get me wrong. They haven't been deal breakers.

It's just, hey, we had a plumbing issue here, is 150 bucks. Hey, we had to do this with this sink or showerhead or something like that. So I'm actually bumping up. And I have a guy, as a friend of mine, and he was like, hey, listen, you've done great to purchase the 10 that you've got. Now what I would do is he's actually made the suggestion. We said, bump up $40,000 more, $50,000, $60,000 more in a house and bump up an extra 40 years, too. And then 40 years is going to be like you're going to have like PVC piping or have updated electrical codes. You're going to have just everything's going to be a lot more modern.

and it's going to flow better with less repairs. And he's like, listen, what do you want? Do you want to keep going down the road? This is totally fine if you want to, but you can expect some of those repairs or you can bump up $40,000, and it'll be less of a headache. And you could still go march through the jungles of Tibet and get your paycheck without repairs coming off of it. That's really good advice. I recently did a TED Talk. It's going to be released pretty soon here.

And in the talk, it was basically about how to be successful at anything, how to learn how to do anything. There's a pattern that any time you're building a skill, you always see. And one of the rules is that you're trying to build momentum. And so you're lining up these dominoes to accomplish what you want. And people make the mistake of lining up the same size domino over and over and over. And you end up with 100 single family houses. And yes, you were successful, but you're sure not taking a hike into Machupeachu with something like that. You're dealing with death by a thousand paper cuts when you have 100 single family rentals and there's diminishing returns.

What you want to do is stack your dominoes higher and higher and higher every time. And that's what I love about your strategy is that you're evolving into something that's a little bit bigger. With the stuff you've done, you seem like you pay a lot of attention in detail. Is there a spreadsheet that you're using to kind of track everything that has to be done in every deal? Or is this just all still in your head? So, no, I used a spreadsheet. My friend actually made it up. I'm sitting here looking at it like everybody else can see it too.

But it's a very, very simple spreadsheet. I'll be honest with you before I got in real estate spreadsheets made my eyes glows over. But the spreadsheet, it literally counts in vacancy, counts in long-term maintenance repairs. it gives me a breakdown. And I didn't invent this thing, by the way, just throwing it out there. It breaks down like, this is your maximum cash flow if you have no repairs and this is your, you know, forever until the infinity until the end of time and everybody pays on time all the time, right? That's never going to happen, right? So then it goes up to a long-term maintenance cost. It counts that in. So that's what I base everything off of is the long-term maintenance cost

because I had heard or read somewhere that like 40% of all the money you make will go back into the house and repairs. Is that about what you're coming up with too? sometimes more when it's older houses like this. I think it blows people away once they own real estate. So the problem with spreadsheets is that they give us the false sense of security that life can be figured out that predictably. Right. And what you find is if you buy a house built in 2000, 2010, just the amount of money you put back into it pales in comparison to something built in 1940. But we rarely ever think when you're looking at a 1940's house, I'm buying a money pit, right? The spreadsheet doesn't tell you the difference. And so that's what we're going to be. And so that's

one of the things that I'm constantly telling investors, you can't be a one-trick pony. You cannot buy only for cash flow. Just like you can't buy only for appreciation, a lot of people lost money speculating in 2000 through 2006 that prices would keep going up. And we all learned, don't bet on that. You need cash flow to balance this out. But I think the new mistake everyone's making is the pendulum swung too far and they're only looking at cash flow on a spreadsheet. And they don't realize that even if that property is making you $300 a month, if the air conditioner breaks after the third year, all of your cash flow is gone. You don't, you don't actually have cash flow. You have the appearance of cash flow. And so if your property appreciated 50 grand,

when that happens, you're okay. You can refinance it and put on a new roof and a new air conditioner fixed it all and your rent will have gone up. So it's still going to cash flow. But I, I'm saying this because I think the word needs to get out there more that if you're going to play the cash flow game, you got to do it like you're doing it, Jason, incredibly focused on every little detail. And it almost makes real estate investing not fun if you have to be that way. And that's why I like it to be a little more balanced, because then you can kind of live the life you want and let that property pay for it. Yeah. So like for instance, we're doing 20 single family homes. And then our next home, our 21st home will be an Airbnb where we want to vacation, let's say Miami or I live in Colorado.

So I mean, I'm in the mountains already. So obviously it's going to be a coastal town somewhere and definitely not California. Just throwing that out there. Oh, man. Low blow. What's wrong with California, Jason? And first rule of financial freedoms leave California. That's funny. Yeah, everything becomes a lot cheaper when you get out of here. I was just in Texas. And I was looking at gas prices were like $2 and something. And I was hearing people complain about it.

And I was secretly thinking, ours are like $4.50. And I'm like, oh, it dropped down to $4.30. Gas is cheap. You know, like you go to a restaurant and you can eat for like $8 or $9. You can't even get an appetizer for $8 or $9 in California. Everything's a lot more expensive. get through the door. I just did my daughter to a concert out in L.A., a BTS concert. And I don't know if you know there are. It's like a mega-Korean pop band.

I take her out there. And, I mean, gas was like four, I think it was like $5.25 or something like that, $4.89 or $4.99. I can't remember, but it was somewhere in there. Unbelievable, man. Unbelievable. What you guys are paying out there. Yeah, but so that's, I also talk about that in long-distance investing is that every market, any market, whether we're talking at a macro scale, right? Like that, economy, or you're talking about a micro scale, like a city, they have pluses and they have minuses. So part of where my wealth came from was I worked in an area that is incredibly expensive to live in, the Bay Area in California, but the wages were also really high.

So if you're able to spend, like I did a lot of my time working, making good wages, and I didn't go spend it on anything that was really expensive because I was working, I was able to save more money than everyone else and then go invested into some of these other markets that made more sense. And then I learned how to buy Bay Area properties that would still cash flow. And I had like the perfect mix where I could buy a Bay Area properties with cash flow. I could also invest into emerging market. So I'm always encouraging people.

Yeah, it's easy to see the negative. Like California is very expensive. But at the same time, I sell houses here that are a million dollars routinely, which is very good for business. The commissions are high enough that I can afford to pay salaries to people to kind of help run the team. So no matter where you are, there is a strategy that will work. And I remember I used to hear Brandon Turner say that all the time, and I would roll my eyes, like, not where I am. But now I look back and I realize he was kind of right about that.

Yeah. So as far as the next stage of where you want to go, you said you want 20 properties, then you want to get an Airbnb. What is it about that number 20? Number one, I think a lot of people got crushed during the pandemic. I mean, I don't think anybody saw what came coming in 2018. Like, hey, two years now, it's going to be a pandemic. So you guys watch out.

I think for me, what I think is, number one, I like to have a foundation. I got two kids, man. I need a solid foundation. So I figured out mathematically that if I just build a solid foundation of 20 single family homes, bringing me in roughly $10,000, $12,000, $13,000 a month, maybe nine, whatever, wherever I land, you know, that's going to be enough to offset the Airbnb if something were to happen. I was staying at a spot. It was a multifamily unit, and it was all Airbnb's.

But when the pandemic came along, he had to actually rent one of those out full time. He's an investor out of California. And he had to rent one of those out full time because he was getting crushed on all three other ones being vacant. So I want the number one. I don't know what the future is going to hold. I know everybody's like Airbnb, Airbnb, Airbnb. But here's the other thing, man. If I buy an Airbnb,

if I buy a house with the intention of doing Airbnb, then all of a sudden this city over here just, they change their laws. My business models render obsolete overnight. Poof, it's gone. Evaparating. And I can't rent it out monthly for cash flow for long-term tenants. So I've got to have something to cover that shortfall.

So I think it's smart to have like a target. By the way, by the way, it gives me targets. I mean, I got 11 properties right now. I've got to buy nine more before I get to do. Airbnb. Obviously, I could buy the Airbnb right now, do the other nine afterwards. I mean, I've got to have goals. I've got to have targets. I have to have something to shoot for. And the great thing about the Airbnb is my wife, she's fantastic of like marketing materials. So we were going to do our Airbnb house. She had a thing, had it written up and everything.

Deal fell through, but she is not excited at all about real estate. Like, she really doesn't like it at all, to be honest with you. But I said, hey, why don't we do an Airbnb? She's like, I like that. It's a way for us to get closer together, too, man. That's a fantastic thing. So many people don't, you can't discount that marriage. You've got to keep that growing too. I haven't had to deal with that problem yet because I'm not married. So, you know, my heart goes out to the couples that are like, I love real estate. And my husband says, no, he thinks it's a scam.

I can't get him into it. It's just a whole hurdle. I'm lucky. I haven't had to challenge. But when you were talking, I did start thinking about my mom. My mom has been bugging me for years to help her invest in real estate. And I know what that will turn into is I will say, hey, you should look here. And then she'll start saying, well, what about?

this deal. What about this deal? What about this deal? Eventually, I will have to pick the house and negotiate it. Then I will have to run the rehab. Then she's going to say, well, the property manager said, what do I? I'm going to basically take on all the work of doing a deal that isn't mine. But I do think my mom would be very good at running a short-term rental. She loves that attention to detail. She loves being hospitable. She's a very good eye for what people like and what people don't like. And as you were talking about your wife, I started to think, oh, that's how I'm going to get this monkey off my back is I'll buy an Airbnb with my mom. And I will manage the financial side of it and I will let her pay attention to the throw pillows

that we're going to use and what pictures we're going to put on there because she's going to love that. Fantastic. Yeah, man. I mean, you don't want another job. We all don't need another job. You know what I'm saying? Amen to that. That is exactly right. If you own a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, chilly weather, and higher guest turnover, having the right coverage is more important than ever. Steadily offers insurance designed specifically for short-term rentals, covering property damage, liability, lost rental income, and even unexpected issues like bedbugs.

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especially having it happen over eight months that you didn't foresee, but that you've now corrected and you're not going to make mistakes going forward. First things first, I was like, hey, listen, I'm going to do, like I said earlier in the very beginning this podcast. I'm going to do single-family rentals. One of the biggest challenges is I've had so many shiny objects coming at me. Like so many people, hey, you should do storage units. You should do multifamily.

You should do that. Just drop all grandiose ideas of single-family homes and do this. That's the first challenge is staying focused. It's like I've got a laser side. Like if I'm going to do something, I'm going to do it. But a lot of people that I meet in real estate are not a master or anything. They kind of like under, kind of understand this business model of multifamily, maybe have an Airbnb over here, one or two single family homes.

And they just are kind of like floundering. I'm like over here, like, crushing it because I'm like the master of my universe of single family homes. You know, I mean, that's my thing, man. That's the first challenge. Number one, it was just staying focused and being able to say no to everybody. That's the first thing. The second thing was I'd say I'd have to come up with hard and fast rules. I actually wrote them down over here.

I say, okay, what do I want in real estate? Like, I want to control as many variables as I can. Number one, I don't want HOAs, like condos and things like that. They can just drop, hey, listen, now everybody's got to pay $4,000 extra more dollars a year or whatever. So I was like, okay, no HOA's, no flood zones because it thinks flood. The house is going to flood. But number two, they're going to keep raising that flood zone insurance. Like just, they're going to keep on raising it.

Number three, no pools. I don't want to have that constant maintenance cost of a pool. And by God, if the child died in that pool, I could never forget myself. I've got two kids. I've been married 20 years next year. So I couldn't do that. Number four, actually, no basements. You know, with basements, it's not a matter of when they're leak.

It's a matter of if they'll leak or not a matter if, but matter of when. And last thing is no large decks. And I'd say the sixth thing, to be honest. is all brick. I like all brick homes. So I was like, okay, I need to find these control costs, something that when I say it's going to be like this, it's going to be relatively like this. And the other parameter is three twos and four twos. I've had a lot of people, hey, man, I've got a two, two over here. I've got a two one over here. I've got a three one over here. You need to get it. The market's going up. And this is the thing about a lot of investors.

There's a lot of people get emotional when it comes to investing. Number one, they think that nothing in the zip code that are going to come up again. This is like the last house I'm going to be able to get. Like, it's the only one I've got to buy it. And they get sucked into a deal. Like, you're laughing. Obviously, you know what I'm talking. I'm a newbie, dude. I'm a newbie. But I'd say those are probably the two biggest things. Timing, obviously. And, you know, I run another company. It's a seven-figure income stream every single year. So I run that with my wife. And it's a sales team of people all over the globe. Those are like the two biggest things I could tell you that really, really became a challenge. I'd say the last thing,

the last thing I would say is know your numbers. Like, a lot of what's happened in the marketplace, a lot of prices have been driven up just strictly through bidding wards. And like I said, when you're investing in real estate, it should be the complete, exact opposite experience of you buying your personal home. Like your personal home is like your personal home. Like, oh my God, I want to live here. I want to know these neighbors. Oh, my God. I love this countertop. I love these colors. Oh, my God. The view's amazing. When it becomes a rental, like none of that matters. None of it matters. Like the only thing that matters is the numbers. I mean, yes, some of that matters. Yeah. If there's a car up on blocks next door, a meth lab down

the street. All that matters, right? But I'm just saying, like, it should be almost a complete actual opposite experience. And I think what we went through this year was just a lot of newbies getting into the market, emotional like teenagers, they just don't have any numbers. When they get sucked into a bidding war, they're like, oh my God, okay, let's keep going. Let's keep going higher, higher, higher. And the cash flows to do, do, it's just dropping down. And you know how it all goes, man. You've got to be able to relate. What you're saying is absolutely right. There's a couple points I want to highlight from it. As far as the last point you said, I think a lot of investors get very frustrated that other people are willing to pay more than they would. And I often hear them saying

things like, the seller needs to understand he's being unrealistic or the, they need to realize their house isn't worth what they say it is. But some other buyers happy to pay that much money because they're not going to rent it out. They want to live in it. And it's worth it to make your quality of life higher. get in that school district you want to have the house with the pool that you're going to raise your kids in and to you paying another 40 grand to have that is well worth it. So in a sense, that house is worth whatever someone can get for it. It's not worth it to us. And that's the key with not getting emotional is if you know what you want, you can't let yourself get attached to it. You have to know that doesn't work for me. And if you get frustrated that it didn't work out,

you were attached. You got to be able to say, hey, I'm happy some family wanted to pay 40 grand more for that house because they're going to use it for a different purpose. And then maybe how can I start looking for houses that a family might not want? That would be the way that I would approach that. I think that a lot of investors, they're just not used to having to do something over and over and over before they actually find success. And so they do get caught up. Another thing you mentioned that I love that I want to talk about on this podcast, because I've never heard another podcast say it in the real estate space anywhere. When I was a new investor, I thought like every amateur thinks.

and it's just how low under market value can I get this house? And there's nothing wrong with that. It's actually a very good thing to look for. But it was the only thing that I looked for. I just said, like, where's the deal? And I found what I thought was a good deal. And then I said, how do I try to justify buying this thing and making it work, even though I don't have experience or resources or knowledge or any of the things that I would need to make it profitable?

So I'd end up with the house that I got under market value and a list of headaches that I then had to learn how to go solve. and it took a ton of time. What you said was, I don't want this, I don't want this, I don't want this, I don't want this. And whatever's left is worth looking at. And while it may sound odd to hear me say this, that is now how I approach real estate. So I like to find Bay Area properties that I can turn into more than one unit to rent out. Like if I can buy a house for $1.5 million, but I can turn it into three units or something like that and I can make it cash flow. Doesn't need to cash flow a ton in year one. By year five, that thing's going to to be crushing it. But it brings a host of problems. Where am I going to find a property that has enough parking spaces for all of people that are going to stay in those units? You don't even think about that when you're getting a regular house, right? Is this in a neighborhood that that's going to piss off all the neighbors and they're going to be calling it in because they don't like all these renters in their neighborhood? Are the units? Is the floor plan of the house itself conducive to how I would like to use it? If it's like a track home, there's no way to get anyone to the

upstairs unless they walk through someone else's bedroom, that's not going to work. So I've switched to looking at it like you, like doesn't have all the pieces that I need. And if it does, I don't necessarily have to get it at a hundred grand less than what I think it will appraise for. I need to get that house because that's a rare gem that's going to make me a lot more money. And I just want to encourage people when you can say no to what's out there, the yes has become so much more clear as to moving forward. And I want to give you a chance to kind of elaborate on that thought. You know, I was just thinking about my own house right here, right? I'm like, man, I should have David coming by my house. I live at a three-level house.

I have literally a million-dollar view of the mountains. But what's crazy about it is, there's an access door back here. You could put a kitchen up here. There's one down here. There's a bedroom down here. And down below, they've got a little kitchenette. And I'm like, Dave, it would be the perfect buyer for my house. My house is going to the market, actually.

Anyway, so where are we? Sorry about that. No, it's just that idea that I look at real estate from a different angle than other people do, where every other investor is going out there saying, how do I find something less than market value? I'm happy to let them all fight over those things. deals and then buy a house that you got for maybe 50 grand less than it's worth, but it doesn't accomplish the purposes you had of having cash flowing real estate. Instead, I look for noes.

I realize the reason that you're saying I only buy brick homes is because you see that you're cutting down on maintenance costs, right? So would you just mind sharing a couple of those reasons of what you look for in a house and how that's going to save you money? So I think, number one, I really pissed off my real estate agent. First of all, whenever I reached out to her and told her what I wanted to do. We started working together, and she was like, hey, listen, look, look, this really isn't going to work. And I was like, listen, you telling me this isn't going to work, isn't going to work. I'm like, this is what I want. This is how it's going to work. It was a little rough in the beginning. Not every real estate agent's going to be about, about it.

So we kind of had a little rough thing. But, you know, when it does so, it narrows the field of vision. Like, for everybody's like, okay, house over here, house over here, house over here, house over here, and it brings it in where I can actually focus and I can run the numbers on those houses. I know the thing I've ever got to mention, I don't buy houses with large flower beds and gardens and all that stuff out front. Like anything that has a lot of outdoor maintenance, like gazebos and stuff, I don't buy any of that stuff, no matter what the price is. I'm looking for concrete as much as possible.

Tenants cannot mess that up. Absolutely, man. Absolutely. I've won something that doesn't require a lot of attention. I don't want something that requires a lot of maintenance. So that's the whole behind the hard and fast rules. That's such a good. I mean, if you just think about after owning that property for 30, 40 years, that you may get

it for 30 to 50 grand less, but it has all these. issues. You're going to spend more than that fixing it up and repairing stuff that people messed up over that long period of time. Absolutely. So what's something that you think every new investor who's thinking, I'd love to do what Jason did, but I don't know how to even get my first house, let alone my first 10. What did you do that you feel like worked out that many other investors don't realize is possible? Well, number one, you have to have a system. Like you have to have a system. Like I said, mentioned before me and my wife, we run another. We run actually, we're in network marketing and we run a company over here. And if you're going to be successful in network marketing, you have to have a

system. Like, you have to have a system to move people around and close leads and things like that. It's the exact same thing in real estate. If you're going to do this from either 15 miles away or 1,500 miles away, you have to have a system. The first system is, how are you going to get the money? That's the first system. How do you get the money and repeatedly get the money? Not just something like maybe I can say $2,000 this month or I could say $4,000 next month or $4,000 next year, whatever it may be. it needs to be consistently the same thing. A system requires you to work the system. That's how everybody becomes successful in business. Every business is a system like McDonald's, right? David, let me ask you a question. Can you make a better burger than McDonald's? I'm sure I could.

Absolutely, man. We could blindfold you and throw some ingredients in front of you and just kind of do your thing, man, and whatever comes out comes out. The question is, how come you don't have a billion yet? Probably because you haven't built a system around how to make burgers, right? Same thing with real estate. If you're going to jump into real estate and you're going to get your first House, number one, narrow your parameters down. Do you want to do single family? Do you want to do long term? Do you want to do, excuse me, short term?

Do you want to do multifamily? Do you want to do storage units? Do you know, I want to do storage units. I'm going to go into storage units probably in year five. That's where I'm going to head to. But I'm going to build that foundation first. You have to have the system. So narrow down the parameter, get the money right,

narrow down the parameter and build your team. That's the first term. It's very similar to how athletes don't just walk in a gym and look at every machine or every exercise and just like, I'll try that one. Now, I'll try this one. If you're developing your body for a purpose, you're working out specific muscle groups in specific ways. Business is just a different kind of sport and you play it with your mind.

So I love what you're saying. Probably part of the reason you were successful is because you had already done it in the business that you had. And you took those principles and applied it to real estate, right? Yeah, absolutely. I mean, that taught me, nowhere marketing taught me that about business. Like I've learned so much about how to speak to people, how to like close leads, how to like get what I want.

I mean, that's been helpful with my lender. When my lender was like, hey, listen, this isn't going to, work. And I'm like, okay, let's have a little tax chat here. Bang, bang, bang, bang, bang. I've had to get on the phone a lot of times, negotiate with people, negotiate with lenders, and negotiate with attorneys. I mean, attorneys like, hey, listen, we can't close that day. And the lender will come back and say, we can't close. I'm like, give me five minutes. I'll be back. So I get on the phone. I thought, what's your name? Let me talk to you for a minute. And I get on there and I make it happen. I was lenders like, what are you like, Tony Robbins

or something? How'd you make that happen? I'm like, listen, you just got to know how to talk to people, yo, that's it. I think that's an understated part of your success, particularly is, I think there's a lot of people that their agent says, here's what's going to happen. And in their head, they're like, no, that's not what I want. But they don't know how to articulate that into words. And so it just turns into fine. I'll let my agent do what they want to do. And it doesn't work.

Whereas you said, no, no, no, I told my agent, this is how it's going to work. And we kind of went back and forth, but ultimately we settled on the right solution. Right. Let me just say this for everybody doing the first deal or their 10th deal or whatever. Business has to be great for both parties. Nobody can walk away feeling like they got to take an advantage of. No party should negotiate so much. The buyer got to take advantage of.

The seller got to take advantage of. Everybody needs to be able to make this work because you never know. That seller may know somebody. Hey, by the way, John's selling a house down the street since you did such good with me. John wants to work with you too. Since you closed all time, John won't work with you too. You never know. And that's that to me, David, is how real business works.

I think this is some very good advice. I hope everybody got something out of that with just understanding. If you feel trapped, you don't know how to talk to people, you feel like you're being dragged in a direction you don't want to go. go. That's an opportunity to improve a part of yourself, your ability to articulate, your ability to come up with the win-win that can help you get over that hurdle rather than just saying, oh, I guess I'm not good at real estate. You often find the people that are most successful at this were successful at other things before they did this. And this was just another domino in that stack

of what they were knocking down. So, yep, that being said, I'm going to move us on to the next portion of the show. It is going to be the deal deep dive. All right, Jason, do you have a deal for us to dive deeply into. So is this a deal that I currently did or one that I'm working on right now? Could be either one. So I want to go back to the, I've got a deal that I did, okay? And this deal here is $99,000. Okay, I closed the $99.

It rents out for $9.50 right now. But hang on a second. I'll ask you the questions. You can answer those, okay? So we'll start with what kind of property is this? So number one, this is a single family home, three bedroom, two bath. All brick. Okay, perfect.

The brick special. How did you find this? So this is actually, I flew in. to close on my first deal because I live in Colorado. I was closing to Montgomery, flew in for that first deal. And then while I was out, I was like, came in a day early. Let me look at the properties, call it my agent. Boom. We found this deal. I was like, made it off on it right then and there. Then it was like, darn, let's roll. Love it. Okay. How much did you pay? You said 99,000. So we got that. How did you negotiate that

price? Again, I didn't negotiate anything. I looked around the whole day. They were leaving the washer and dryer. They were leaving a really nice refrigerator. I looked around. I was like, the AC's been serviced. Everything looks great. And I was just like, man, this is a pretty good deal. It's a pretty good deal. And I started running some numbers, talking to my property manager. And she was like,

we can read that out for like $9.50 to $1,000, $9.50. And I was like, okay, let's just come $9.50. And I was like, all right, that's not bad. 13% return on my money. That's not going to be too bad. All right. Let's do it.

Let's roll with it. It was an old lady, too, by the way. Listen, man, I will negotiate and I will go to tell with people like you, but a little old lady reminds him in my grandmother, man. Sorry, I just couldn't do it, man. I was like. Well, it sounds like she already had it price right.

If she's including everything and it was a good price, sometimes you win by letting the other side win too. Yeah, it's worth about $1.20.125 now. So, I mean, did I get a good deal? I think so. That's exactly how I look at it versus the person that tried to save another $5,000 didn't happen. They lost that on that $30,000 in equity.

Did they get a good deal? No. Right? Now their money's worth less because inflation has worn it and all the other houses cost more and they lost the cash flow of three years. Yeah. Taking action is often better than trying. to just beat the other party. I agree with you. Yeah. All right. So how'd you fund this deal?

So I literally just put 20% down. Our other business is pretty successful. So I just literally put down. I mean, it wasn't even that much. 20, I think it was 21, 22 out the door, 22, 5 closing costs, something like that. Wasn't bad. All right. And then what did you end up doing with it? Rented it out. Literally within, I'd say, two a week and a half after I closed, boom, property manager came in, dropped the tenant 950. We're rolling. Literally no problems, by the way with this house. None. Zero. I'm talking zero. That is awesome. Fantastic. They pay on time. I mean, I mean, again, did I get a bad deal? I don't know. Maybe I should have negotiated that five, but I got great tenants. I mean, no problems. No problems. And they pay on time.

I just think in 30 years, you're not going to remember if you paid another three, four, five grand. The house is going to be worth 300, 400,000 at that time. And so many of the things that we worry about during the moment don't matter when you look at it over at the bigger time scale. True. So true. All right. Ask questions. What lessons did you learn from this deal? It's number one, trust in your gut. Trust in your gut. I would say that's a big part of real estate. It's like you can do all the numbers. I looked at the spreadsheet. Everything looked great, but I walked through it. I smelled it. This is one of the rare few ones, by the way, that I was able to walk through before I closed on it. But I looked around. I just kind of looked under the sink. Obviously, there was no active leaks, no presence of any leaks.

I looked at the AC. I'm not an AC guy. I just kind of tinkered with it. I'm over there tinkering. What else am I going to do? I'm going to tinker throughout the whole house. And I just like, man, I mean, my gut's telling me like, this is a good deal. this is a good deal. It's a good deal. And so I just went with them, man. Trust your gut when it when it comes to real estate. Just trust your gut. I like it. Well, you trust your gut, but know your numbers, right? They're both kind of operating at the same time. And when you get it right, the numbers determine what your gut tells you. And that's when you can trust it. Absolutely, man. And by the way, when I asked my property manager, hey, what's it going to rent for? Like, give me the low, give me the high. And I was

in the middle. And I'll shoot towards the low end, to be honest with you. And a lot of times now moving forward it was a newbie back then i still kind of am compared to you david but i you know i was i mean if all goes to hell i can still run it out for 900 bucks and still do pretty well with it's not going to break the bank well it's funny that you said that you're a newbie you're probably newbie compared to everyone because you've only been doing it for eight months but you own more houses than the people that are not newbies so there's some irony there between that how are we going to define what newbie is dude action action action action it will get you to your dreams faster than reading books and faster than anything else all right well let's get into the last

portion of our show. Famous for where we ask every guest the same four questions to find out a little bit more about what makes them tick. So first question, what is your favorite real estate book? Oh, I'd have to say by far, hands it away. I'd say the rental property investing, this one right here, the bigger pockets when it's by far. Everything you need, by the way, to buy a single family home and grow it to 10, right here,

right here. You ain't got to buy anything else. I'm just saying it starts right here. everything Brandon does is just good. He just does good work on everything he does. Yeah. I think that's the top selling real estate book in the world. It should be. I don't see why it wouldn't be. And I read the other one, by the way, how to invest in real estate by Brandon Turner and Joshua Dorkin. And this is, by the way, let me just say, it just confirmed everything that was in the other thing. It's almost like the exact same boat. Maybe expanded a few areas, but yeah. Awesome. Okay.

What's your favorite business book? Oh, yeah, man. I mean, that's a good one. I would say, obviously, a lot of people say rich, say a poor dead man. I would say, honestly, be obsessed or be average by Grant Cardone. By far, hands down, I way, that or sell and be sold by Grant Cardone, because here's the thing at the end of the day, I mean, you're selling yourself to people every single day. And if you get in there and you can't sell yourself to the agent or you can't sell yourself to the seller, like, hey, listen, I'm your guy. I'm going to close. I'm going to make this happen. We're not going to have any problems. If you can't deliver that with confidence to your people and to your lender and everybody else, man, I mean, you know, it's going to be tough. It's going to be a

tough go. I got to say, Jason, I don't think a lot of our audience is shocked that you just mentioned Grant Cardone as someone whose business books you like. Have you been told yet that you look like an NFT that was based off of Grant Cardone's likeness? Well, kind of, yeah, I've been told that a little bit. Like, dude, you're like a younger version of Grant Cardone. You can tell he's influenced you for sure, your speech pattern the way that you project yourself. It's very professional, very high energy. Thank you. I appreciate that. I haven't always been this confident, man, to be honest with you. And I feel like I've kind of, he was the first person I came along in my life that gave me permission. Like, hey, listen, I'm not different.

I've always felt different. I've always felt like an outcast. I've had a, you know, hard time making clicks with some of the people, friends with all these clicks and stuff like that. And I realized the whole time, that was that's nothing wrong with me. There's nothing wrong with me, man. I love that. It's just, I finally gave my permission, myself, permission to be who I was born to be.

And I just stepped right up, man, and owned it. That's a great testimony to why we need to be ourselves because you never know who's out there and sees you and says, it's okay that I'm like. like this because that person's that way too. Yeah, it's nothing wrong with big dreams, man. I've been told I was crazy my whole life, man. Like, who do you think you are? Do you know where you come? I come from Uptok, Alabama. You ever even heard of that? Probably never have her. Well, didn't Grant Cardone come from Louisiana? Somewhere in Louisiana. I think it's a similar background that you two both probably came. Yeah, I did a lot of drugs in my 20s. I'm 44 now, man.

I mean, I was like, oh my God. This guy's speaking my language, man. It's crazy, man. It's crazy. All right. So what are some of your hobbies today? Oh, my God. What are my hobbies? I would say I like to hike. Obviously, I'm here in Colorado. I like hanging on my kids. I really like doing that a lot. Other than that business, I work out. I do, what else, man? What else? I'm just trying to think. That's about all I got time for. To be honest, with you, just building businesses. I'm working on two more right now behind the scenes. And we're playing with my kids. Hanging out of my kids. My kid's 14. I've got another daughter who's 18 and she's about to go off to college. So, like, I'm going to cry like a baby. I'm just saying I'm going to cry so hard when she goes up to college. So right now, I pretty much put all the stuff that I like to do on the Bat burner, really, very, really focused a lot of time on her. All right. So in your opinion, what sets apart successful investors from those who give up, fail, or never get started? Oh, man, this is an easy question, man. Super easy question. Number one, get rich in a niche. Like, find out what you want to do, own it. That's about as simple as I can make it. Don't get distracted with all this other stuff. A lot of people, I'll be honest with you when I came to the BP conference back in New Orleans,

man, a lot of people that's, I probably come to a couple hundred people, made friends with a lot of them, great people. Everybody, no matter where they're at on their investing journey, including myself, feels like they're behind the eight ball. There's always somebody else to compare themselves to, so they feel like, well, what I'm doing is not getting me there fast enough. So now I need to transition over here into this. I'm over here doing single family homes. I must go into storage units. I'm over here doing RV storage. I need to get into something else, more magical. And a lot of people just don't ever stop to realize, hey, listen, right where you're at right now, maybe you need to learn something where you're at right now. Maybe you need to grow. Maybe you need to transition to be

who you want to be, right? Because a lot of people out here, they're like, oh, man, I want to make a million dollars. I want to make a million dollars. Really? You want to make a million dollars? I'm like, okay, you want to deal with family coming after you for money, making you feel guilty, the IRS, you know, all this stuff. And so you've got like all these people that are sitting here and they're doing something, they do it X, but they think that the grass is greener on the other side because somebody is a little bit further along or they've got a, even if they hadn't started by the way, by the way, I thought to two, due to, I hadn't even started yet. And one was like, well, I've got 140,000 save them. I've got 150,000 say double. I need to go over here

and like start saving up even more. I mean, it's just, it felt like this comparison game. Guys, if you're listening to my voice right now, get rich in a niche. Do something. Own it. Be the master of the universe. So nobody can ever take advantage of you, that you can get the best deals and so that you can teach other people to do the exact same thing.

Yeah. To your point, I don't think anyone at the time McDonald's started ever thought you could be worth billions of dollars selling hamburgers. Yeah. That was just a concept no one had ever considered before. They got rich in the niche of hamburgers. and now we got the golden arches everywhere. Yes, exactly.

That would be my biggest thing. Another thing I think David would be action, man. Like action, like granted, now listen, here's the thing, guys. Like I said in the very, very beginning, I bought all three of these books. I bought all three of these books. I put a timetable to say, listen, I'm going to buy my first house in 90 days. I hadn't even, I had never done my first deal. I had no idea how to do it.

I just knew that, okay, I Googled these real estate books. They had all, I didn't know what the box was, by the way. Let me just throw that out there. Sorry, David didn't know the BRRRRRRR method. however many hours there are. But I'm just saying, like, I put a time table on. Okay, I'm going to read these three books and these three books only. That's where I put the cap on and said, no more learning, time to do.

No more learning, take action. No more learning. Let's roll. Like, that's just how it was. And so I said, 90 days, read these three books. If you can't do it on these three books and 90 days, you don't need to get into this Jason reaction is what I told myself. So that's the thing.

The action is the barrier from where you're at to where you want to be always, always. Like, if you're scared, do it. Like it's all saying it's like that what you fear is what you must do. Great stuff. Last question of the show, Jason. Where can people find out more about you? Yeah. People can follow me.

Just Google Jason Rash. Obviously, but Facebook, it's just Jason Rash and Instagram, Jason Rash. It's not like Pink Sunset 77. I was born in 1977, by the way, giving away my age. But it's not Pink Sunset 77 or Real Estate Investor 77. It's just Jason Rash. You can find you there. And that's where I'm at.

I don't have any websites or anything like that yet. But I will. I promise. Well, thank you very much for your time, your insight, and for sharing some of the knowledge that you developed over the years. This was awesome. I believe you ran into our producer, Eric, at BPCon, right? Yeah, what's funny is we were, did the whole March Line thing. We all went to the bars and everything. I was just standing out there talking to some guys. And I turned around and this guy named Eric sitting here talking me and all of a sudden, he hands me a card. Hey, man, do you want to be on the podcast? And here I am. I've had a lot of people

reach out to me, by the way. A lot of people that are bigger investors than I. How'd you do that? I took action. I went to the conference. I went out and meet people. I'm not scared. I mean, that's, yeah, so many people just take action. Eric's out there like Willy Wonka handing out golden tickets at BPCon. That's why you got to go to BPCon in 2022. You never know if you're going to bump into Willy Wonka and get your golden ticket. Absolutely. David, thanks for having me, man.

I really appreciate this. My pleasure. Thank you very much. This is David Green. You can follow me online at David Green 24 and be sure to follow bigger pockets online as well on all social media. This is David Green for Jason. Ted X your life rash. Signing off.

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