BiggerPockets Real Estate Podcast - 638: Making a Profitable Pivot Out of Regular Rentals and into Vacation Investing w/Brian Davila

Episode Date: July 21, 2022

Rental property investing is a great way to make cash flow, or so it seemed in the pre-2022 world. Interest rates are rising, home prices have skyrocketed, and rent can’t keep pace with this market. Brian Davila saw this in his portfolio and knew he needed to do something about it. Buying “traditional” rental properties wasn’t going to cut it, especially when the monthly cash flow was a measly few hundred dollars. How many houses would it take to grant him a life of financial freedom? To most people, Brian Davila looks spoiled for choice. He’s a young guy, doing forty or so flips per year, bringing in big active and passive income checks. If you think that Brian can’t relate to the average investor, you’re wrong. Brain immigrated to the United States at just six years old, dropped out of high school in the ninth grade, and had his first child at nineteen. He was working at Las Vegas day clubs making ten dollars an hour before he decided to become a real estate agent. After cold calling hundreds of sellers a week, Brian was able to grow his clientele and eventually become a top agent. The only problem? He had no time for his family. He made the switch to start flipping and buying long-term rentals but had to pivot once again to a different strategy that would make him more cash flow even as home prices rise. Brian knows what it takes to become very successful in real estate in a short amount of time, and if Brian can do it, anyone can.  In This Episode We Cover: How to become a successful agent and why most people shouldn’t get their license  Transitioning from trading your time for money to letting your money give you back time Brian’s biggest mistake when growing a fast-paced real estate investing business  Flipping forty homes a year and how to get around permitting pain points  Short-term rentals vs. long-term rentals and which will survive in 2022 Lowering your tax bill as a real estate investor and avoiding capital gains  And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram Rob's BiggerPockets Profile Rob's Youtube Rob's Instagram Rob's TikTok Rob's Twitter Real Estate Rookie 113 BiggerPockets Podcast 616 How to Calculate Numbers on a Rental Property Rob’s Video on The New Airbnb Redesign Books Mentioned in the Show SKILL by David Greene SOLD by David Greene Flip Your Future by Ryan Pineda $100M Offers by Alex Hormozi Connect with Brian: Brian's BiggerPockets Profile Brian's Instagram Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-638 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockus podcast podcast show 638. Something people don't talk about is like as you start to make more money, you start understanding that your time is more valuable. So I'm like, okay, I'm spending all this time on this rental. That's pretty much making me nothing. Like I get the appreciation, but there's no cash flow at all. There's like no money being made. But with short-term rental, I can get the appreciation.

I could get the cash flow. I could get all the same benefits, but more. So that's kind of what made me decide to switch to short-term rentals. And I'm actually not going to buy any more long-term rentals. I'm still going to go hard with short-term rentals, but I'm just going to have to probably pivot markets. What's going on, everyone? This is David Green, your host of the Baker Pockets Real Estate podcast,

the best real estate investing podcast in the world, here today with my beautiful co-host, Rob Abasolo. Rob, so glad you could join me today. How you doing, man? I feel like it's been a while since we've been back on the mic. That's exactly right. And that's funny that you just, because the minute you said it's been a while, I thought about that song. I just got back from a three state tour.

I was in Michigan for a conference that we were invited to because the mortgage company is one of the top producers in the country right now. So we got invited out there to kind of like learn how to grow that business by United Wholesome Mortgage, which is like a huge. They basically rival quick and loans for the, biggest people that do loans. They service a couple of mine. Yeah. And then I flew out to Florida and I looked at some investment property and I put one under contract and I got a couple more that we're waiting to here. And then I flew to Tennessee and I was out in the Smoky Mountains area

looking at cabins and I bought several those or put them under contract, haven't closed on them yet. So I'm all happy because I'm happiest when I'm buying real estate and I don't always get to do it because of responsibilities that I have with bigger pockets and the companies that I'm running. But once you get to actually go put stuff under contract, that's when this becomes the most fun. Oh yeah, man. Yeah, you're a bit of a busy boy. I'm actually doing a little tour myself at the moment. Do you care to share?

Yes, yes. I was thinking about how to, yes, I would like to share, actually. I'm currently setting up appointments at all the gyms in a 15-minute radius. So we've got Orange Theory on deck. We got CrossFit on deck. We got Equinox, Lifetime Fitness, and then this rock climbing gym. So we're going to go and work out at each one of, of them and then make our commitment to be fit, hopefully in the next two weeks.

Confitment. Yeah, confitment. Yeah, that's right. Mm-hmm. I like it. Well, that's awesome. And now, when I was on that trip, you actually texted me pictures of our property we bought together that I did not reply to, which unfortunately is probably sensing you have to deal

with a lot. You go hosted me, man. I was like, huh, how dare he? How dare thy David Green, which is a reference everyone will get. Yes, they'll understand that letter better later. You know, we could put the Airbnb in the show notes if anybody wants to check that out. No, we should put it on social media somewhere. Like, do you think we should put it on Instagram or YouTube?

What do you think we should do with that? Yeah, yeah. Click the link in our bio. How about that? Well, we'll have it up at the top of our bio. We will share those pictures so you can see what it looked like before if you watched some of our YouTube videos and then you can see what looked like after. Looking at these pictures, I'm sure Rob did stellar.

The few that I did look at looked really good. So I'm excited to see more of those. And people can book it. Exactly. It's the ultimate glow up, man. I mean, I think when we bought that property, we knew it was a special architectural home, but the furniture was a little lackluster. And we've gone in, we've done our thing, we worked at the interior designer,

we took out all the weird teal blue colors and curtains and paintings. And we really, I mean, we spent, you know, we spent a lot of money to get this thing up and running. But, you know, as I said from the very beginning, I didn't want to put hubcaps on a Ferrari. So we might have, you know, gone over budget, just a hair, just a hair. I'm scared to report back to you on that, but it's going to be totally worth it in the end. Oh, I do that. It was going to be coming. You did it in a public forum, so I couldn't get too upset because we're on the podcast.

That was smart. All right, well, we're not going to go too much longer here. Today's episode is simply put, fantastic. Rob and I interview Brian DeVila, who works with Ryan Panetta, who we interviewed on episode 616. And Brian has a fantastic story, moving here from Puerto Rico at six years old, not speaking any English, having to learn the language, then working in Vegas in the sort of like bar and club industry as a young man, not liking it, not liking the hours he had to work.

Having a child and realizing, I want to be able to drop my kid off at school when I can't where I have to work in somebody else's world, becoming an agent, becoming a top producing real estate agent, then moving out of that and into flipping houses, then taking profits from flipping and buying long-term rentals, then getting into short-term rentals.

This is an amazing story, but even better, fantastic interview, where you are going to learn a ton. Rob, anything you want to add about that before we get to the quick tip and then bring in, Brian? You know, I think this one's particularly inspiring because imagine getting into being a realtor and then clocking how much he was making and putting up on the board from a salary perspective, which was a hefty, like a dream amount.

If you could make this much money, it's the dream. And then he was like, you know what? I'm not fulfilled. I'm going to go and do something completely different. And then he went and started a flipping business and now he's flipping houses a year. And it's just, it's really cool. It's really cool because he's actually doing even better. flipping homes and doing the burr and even doing what we call the burster. And so yeah, he drops a lot of

a lot of great knowledge on us and also turns the mic around onto us and even asks us a couple of curveball questions too. You sure does. So in today's episode, we are going to share what goes on behind the curtain with real estate agents, strategies that you can use if you're an agent or even more important if you're working with an agent, what you need to know about what they're doing, how to tell how good your agent is or how to spot a bad one. We then get into flipping how to manage rehab projects, how to make sure you're not losing money on deals from some of the examples that Brian did lose some money and then how he scaled to where he is. And then we get into short-term rentals where you could be buying and then some real estate overall strategy and

philosophy at the end that you don't want to miss where Brian basically was like, hey, I'm going to ask you you guys some questions because I finally got you tied down. So this episode does go a little bit longer. But please listen all the way to the end because this is fantastic information that typically only get shared within the elite inner circles of people that own a lot of real estate and you're not going to hear it very often. So I'm very proud of how this show came out. I hope you guys like it. Before we bring in, Brian, I'm going to introduce today's quick tip, which is going to be put simply, consider being a real estate professional according to the tax code. You can save so much money and income if you're making it through real estate activities. And if you are classified

as a full-time real estate professional, if you'd like to talk to one of my tax strategist, it helps me with my own stuff. You can email me. I'm happy to connect you. Rob may have somebody as well, but you're bleeding money in taxes that you don't have to be if you're a real estate professional. So look up what that would take. Talk to a CPA, ask them that question. Consider making money in different ways so that you can save it. And you won't be upset that you did. Rob, any last words?

Yeah, you know what? We actually, not us, but Brian Davila was actually on the real estate rookie podcast on episode 113. So if you like his good attitude and the knowledge that he brings, go go give a download to that episode as well. Here's why savvy real estate investors are obsessed with bonus depreciation. It lets you take that rental property or commercial building you own and depreciate most of the cost against your income. Legally, 100% IRS compliant. That's instant cash flow improvement. Cost segregation guys is the number one firm nationwide, specializing in identifying these faster depreciating assets in your property.

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Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fundrise Fund. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement. All right. Let's bring in Brian. Brian DeVila, welcome to the Bigger Pockets podcast.

How are you, my friend? I am so excited and nervous. It's amazing right now. It's the perfect cocktail, right? Excitement mixed with nervousness. That's what makes life worth living. A lot of people don't know this, but my co-host here, Rob. Abasolo. He is actually what the Dos Echis man's avatar was based off of was Rob's life.

And he's taught me that specific thing. He's like, David, you have to be like me. I love to dance and I'm from the mountains. And life is lived best when it is a mix of excitement and nervousness together. I don't a podcast often, but when I do, it's on the bigger pocket of podcast. That's right. Yeah. So before we get into your story, I'd like to hear, can you give us a big picture? What's your portfolio look like? What kind of business are you doing? Just tell us how how your real estate success has worked out and then we'll work backwards from there. All right. So I guess right now I am flipping houses in Southern California. I also wholesale. I also have a small portfolio of Airbnb's. I think I'm up to eight right now. And then I have

11 long-term rentals. I think last year I broke seven figures, just flipping and wholesaling. And yeah, I'm mostly using the Burr strategy on all rentals. So you're using the Burr strategy on your long term and you've got, and probably some of your short term. And then you've got some short term rentals. So you got something for both Rob and I to jump in with with some expertise. And some curveballs. Yeah. This is going to be an interesting story. You've done. And I was a realtor. I'm still technically a realtor, but I don't sell real estate. So you're just like me 10 years backwards. You got the same hair.

And I'm currently becoming a realtor. So we're all this weird trio right now. Yeah, I signed up for the exam. You didn't tell me that. I think I did. You just, you didn't listen. You weren't listening to you. That's probably true. I feel like, yeah, dad, I'm going to be going to your alma mater and I just, like, had no idea that was the case. I'm really hoping I can pass without studying. Because I've been a realtor. I was a realtor 10 years ago, actually. I'm like, I'm hoping that my bigger pockets, you know, fanaticism, listening to all the episodes over the years have prepped me to just go and blind. Well, I think, honestly, the hardest part about being a realtor is passing the test. As most of us know from working with different realtors, the bar is not very high. There's people that have realtors that forget that they even have their license. So that's kind of cool. What makes you want to get your real estate license? Oh, well, I think I'll jump into that when I tell my story, but I needed to make a career change. So I see.

Decided to become a realtor. And what were you doing before that, just so we know? So before I became a realtor, I used to work at the Palms Casino as a barback. And then I used to work at the same time at a day club at the MGM Grand in Las Vegas. Cool. And for people like me who don't go to Las Vegas, what is a day club? A day club is pretty much people start drinking at 10 a.m. and they will black out by 5 p.m. and then they get kicked out at 6 p.m. So it's the farm system to alcohol anonymous, basically. Yeah. So you're evicting people from the bar basically. So yeah, yeah, pretty much I'm a landlord. Right on. Okay. Now I want to hear about your story. How on earth did you go from working at a day club and barbacking to being a real estate tycoon?

Okay, so that's a great word tycoon because I'll bring that up later too. But so I guess I'll go a little bit far back. I was born in Puerto Rico, moved to Las Vegas when I was six years old, grew up with a single mom. And I pretty much dropped out of high school in the ninth grade, decided that high school was not for me and started working. and had my first child when I was 19 years old and pretty much worked two jobs, two or three jobs, until I was 25 years old. And it was my son's first week of school. And my manager at the time wouldn't allow me to take the day off.

And I decided that I didn't want to work for anyone else ever again. So I got my real estate license and as soon as I sold my first house, I quit my jobs. So it's a quick journey into real estate. So that's why you got your real estate license is this was my way out. So what made you, were you just passionate about real estate? Was there something about that specifically that caught your attention? So I'll tell you a little bit of the story. So I always knew I didn't want to work for someone else, but I didn't know what to do.

So I had a great idea that me and my friend were going to start a barbershop. and it was failing, literally failing. Like we had barbers leaving, we were past due on rent. The landlord was meeting with us and, you know, pretty much telling us to leave. And I was sitting there one day, pretty much just soaking in all the failure. And this guy came in, he was driving a nice car. It was a Mazda. And at the time, I used to drive like a beat-up Dodge Intrepid.

So he had a Mazda. big Nixon watch. And I'm like, man, this guy's bawling. And I was like, hey, bro, what do you do? And he was like, hey, I'm in real estate. And I was like, how much do people in real estate make? He was like, I make like, I make like $50,000 a year. I was like, damn, you make $50,000 a year and you only have to work one job. He was like, yeah. So I was like, all right, well, I'm going to get into real estate then. All right. And so obviously getting your license is like the most obvious way to do that because that's what you're seeing on TV. And so you get your license and then how many houses did you sell as an agent?

Through my career, I sold somewhere around like 100 or 200 houses. I got up to being like a top producer. I used to sell a lot of houses before I stopped being a listing agent. Okay. What was your strategy there for how you were getting so many clients? All right. So 2016, I think 2015, I got my license. And then I was introduced to the godfather of,

of realtor training, Mike Ferry. And Mike Ferry, for those that don't know, he is a coach that teaches people how to cold call. So I used to watch his YouTube videos like they were the best movie of all time, even though they're super dry and boring. I would literally wake up at 4 o'clock in the morning. I would throw on some Mike Ferry and I would work out. And then I would get dressed up in a full.

suit and start cold calling at like six or seven a.m. in the morning and I would freaking cold call until I couldn't cold call anymore. Who would you cold call? Just out of curiosity. So most realtors call expired listings. So those are listings that were listed on the market and the contract with the listing agent expired. So the home came off the market. And then I, I would call those people. I would call for sale by owners. I would call notices of default. So, yeah, pretty much those three lists are who I would call to call.

Oh, awesome. Yeah, I was actually talking to Brian a couple weeks ago, and I gave him a really lofty goal of what I wanted to sell my first year as a realtor. And Ryan was like, well, maybe, maybe not quite that for a first year. I was like, no, we got this. So, yeah, you're very knowledgeable in this regard. I'm kind of curious, did you do? it. Have you arrived and were you able to go and go to the dealership and get the keys to that

dream Mazda you always wanted? So, so funny story. So I was in real estate school and my teacher was a very motivational guy and he gave this big speech on how, you know, not to be cheap, how you could achieve your dreams, how you could do anything you set your mind to. and before I even sold a house, he gave that speech. And I got up mid-speech, went and bought a BMW and came back to class and showed him that I bought a fancy car because I was going to need it as a realtor. Okay. So, okay, so you established yourself, you got, you became a realtor. You sold 100 to 200 houses.

You got the dream BMW. Yeah. So what exactly? I mean, it was going well, obviously. So why did you leave being a realtor? I mean, I think a lot of people don't ever even reach that number. I'm sure it's a very small percentage of real estate agents. So what was the motivation behind that?

So I believe it was like 2017, the end of the year. And I sold around 50 houses that year. And I did it all with a TC, a transaction coordinator. And I wasn't happy. I for sure was not happy. a lot of money, probably made like half a million dollars net. I didn't have this big team. I had a free office, so I was very profitable. But I literally was like miserable because I was just like trading my time for money. Like that that was my plan. Like hey, work double, work as much as possible.

And that's how I'm going to make more money. And on New Year's, I remember everybody was going over their numbers for the year. I was like one of the highest or the highest agent. And and then I was like, okay, what's my goal next year? Is it go, is it to sell a hundred houses? Because I just sold 50 and that was like terrible for me personally. So I decided like, hey, I can't keep doing this. I'm going to get burnt out. So I needed to make a pivot. I was watching some guy named Ryan Paneda on Facebook. That was before Instagram. And he was talking about. Ryan, Ryan, who? I don't I don't think we, I think I've heard of that yet. Yeah, he's not that popular.

But he, he was talking about how he would make $20,000 every transaction he did. And I was averaging like $5,000, $6,000 on some houses. And yeah, I decided like, hey, like, if this guy can do it, I need to start doing whatever he's doing because he's making twice as much and he's not working on the weekends and he's not working. working past five. So that's kind of how, that was the start of me transitioning to a real estate investor. Yeah. And also just a quick plug here. If anyone hasn't listened to our episode that we did with Ryan Pineda, he was actually on episode 616. So go check that out if you want to learn more about digital real estate and the NFT space. But I want to kind of backtrack here a little bit,

Brian. Did you say that you were making $5 to $6,000 per flip or did I miss hear you? Yeah, five to $6,000 a flip. But then I would have some higher. transactions because since I was working with notices of default, some of them I would end up kind of getting paid more for relisting it. So those were helping my income go up higher. I was never flipping the house myself, but I was helping investors buy them. So is that like, because I always thought, you know, when you're flipping a house, you're hoping for at least, you know, anywhere from like 20 to 20,000 plus. So it was five or six thousand dollars kind of a very scary like profit margin considering that, you know,

anything that goes wrong could effectively wipe out that profit. Or what was your process for determining if a deal was worth it? Well, yeah, I was like, that was like five to six thousand as a realtor, not as a flipper. Got it. Got it. Okay, okay. As a flipper, I usually want to make now like $50,000 or more on every flip. So is that just from trial and error, have you made less and sort of learned things a hard way? Or what's the decision process for kind of drawing that hard line in the sand that says, I've got to make $50,000 a flip? Yeah.

So when I first started, I wanted to make 20 because I thought that was a lot of money. And then I realized that quickly that $20,000 could turn into negative $5,000. So $50,000 is a very safe number to, to, to, to, make up for any repairs that may came up or if we need to make a price adjustment, especially right now in today's market. We're definitely seeing a lot more price adjustments. So $50,000 is a minimum right now. And about how many houses are you flipping right now, like as it stands every year? Last year I did 40, 40, I think it was like 45. Wow. And then what are you doing with the real estate business that you developed when you built that book of business over those years.

So I probably did the worst possible thing. I just let it die. I completely just stopped working with buyers and sellers because I'm a guy that I'm all in whenever I do anything. I'm 100% in. I am never like I'm doing this and then I'm doing this also. I try to be focused on one or two things max at a time. So I completely let my realtor business die. I don't think that's that uncommon. I think when we're talking about it now, we're like, oh, why didn't you sell it or why didn't you get a referral system? But the reality is it's complete chaos when you're selling that many houses. Every day, you're tethered to your phone.

Your emotions are spiking and plummeting nonstop. It's exhausting. You're not thinking, how do I smooth out this crazy roller coaster? You're like, I just want to get off of this one and not something different. So I don't think that's that uncommon. Yeah. And even like I had a friend reach out. me like two weeks ago to list their house. And I was like, you know what? I haven't listed a house

in a couple years. I'll help you. And just like even trying to set up the staging was so annoying that I was just like, man, this is exactly why I quit this because it's so annoying to have to ask someone else for permission and then, you know, negotiate things where when you're the seller, you're like, hey, this is the plan. Boom, boom, boom. Let's get it done. But when you're a realtor, you have to negotiate with the seller. Or you have to talk to your client. You have to think about how they feel. If you know the answer, you have to wait for them to get to the point where they believe

the answer was their idea. And it takes a lot of time, a lot of emotional energy. And I'm sure in the state you're in now, you recognize time and emotional energy can turn into money in the right environment. And this is why very, this is one of the reasons I think, this is a side note. We won't go too far. This is one of the reasons I think there are very few good realtors out there. Because when you get to the top of this pinnacle and you're the good

realtor, you don't want to do it anymore. This is such a struggle. This is such a burden. Can I get out of this thing and own a brokerage or move into something different? And that's what you did. And that's one of the reasons people are very frustrated. There are no good real estate agents, but just the way that that industry is set up is incredibly taxing to go through for the long term. You have any comments on that before we move into the direction you took your business? So I remember one of my last transactions, I was helping an expired listing sell her house. And let's say she expired at like, let's just say, 345. I ended up getting her house in escrow for 365.

So I got in an escrow more than what it expired at. And then I remember the home inspection came and the buyers wanted like a $300 credit for a hot water heater, a water heater. and she refused to pay the $300. And I was like, lady, I just got you $20,000 more than what you were going to get. And you won't pay these $300. And it's and what the tough part about being a realtor again is like, I can't do anything without her. So if she doesn't like do it, then I have to talk to the buyer's agent. And then if the buyer doesn't want to fix a water heater, then we're just like at stalemate.

So it was just very emotional. There was a lot of things that, like, again, the time, like most realtors, they have to take calls past five. Most realtors have to work on the weekend. Most realtors are, I feel underpaid, to be honest. Most people feel realtors are overpaid. I feel like they're underpaid. The good ones. Well, that's also because when you're working with an agent, you're thinking like all they did was

A, B, and C, and they got this big commission. They're overpaid. Yeah. They're not thinking about the other 98% of clients that constantly talk to you and don't ever sell their house or don't ever buy a house or switching by a different house or oops, I can't get the loan. I thought there's a million things that go wrong. We close on very few of the properties we're actually working with.

Yep. And that's a great point where like, yeah, I got paid maybe $10,000 on this listing. But what about the listings that didn't sell? Or what about those buyers I drove around for four weeks? and they decided to not buy a house. What happened to all that time? So I do think realtors are underpaid, and I know that their commissions are going down.

When I first started, it was like 3% commission. And now on the MLS, I rarely ever see a 3% commission. I see 2% starting to see 1%. So, yeah, so that's why I decided to switch. That's exactly right. So be kind to your friendly neighborhood, realtor. And Rob, welcome to the complete chaos that you're going to be willingly entering into. Not sure.

This is like one of those dirty jobs. You're like, I'm the CEO of a company and I'm really good. And I'm going to step down and I'm going to clean the toilet just to see what it's like. Rob's going to be hosting open houses. There's a little bit more to it than that. But we can save it for its own bigger pockets podcast. And there is like realtors are needed basically. In this industry, you need agents because what you're talking about are people spending

half a million dollars, $700,000. a lot of money on a thing that they've never bought before or bought eight years ago, right? Or you're dealing with a person who's selling a house that could be worth $400,000, but they've never done this. And so this is the first time they've actually been involved in a business transaction maybe in their life. And it's a huge one. So realtors are needed. There's so many of us.

That's, I think, what the problem is. It's very hard to find one that's experienced. Well, what I think is going to happen, I guess this could be the last point on realtors. but now that the market shifted, David, I want to hear your opinion too, all these part-time agents or these agents who were just listing stuff on the MLS and the houses were selling overpriced, that's not going to happen anymore. I think now you're going to see agent have to hold open houses. They're going to have to learn how to negotiate.

They're going to have to follow up on buyer appointments because with the market shifting, I think the strong realtors are going to make a living. And then the ones who are doing this part time are, it's going to be tough. Yeah. There's a really good point there. And this is good for people to hear that don't work in the realtor space. So they kind of understand the conversations that we have. What I was just telling my team is for the first time, since I got my license, the entire time I've

had a license, we are able to go negotiate for buyers to where they feel like they actually won and they can be happy with their deal. I have not had it be this way. from the minute I got my license till now, it's who is going to pay more than the other nine buyers that are all trying to get that house. And the person who had the Cajonais to go in there and do that made a lot of money because the prices just kept going up so fast and rents kept going up so fast. And now that we've had this interest rate hike, you're seeing some of the, like, sellers had 99% of the leverage and buyers had 1%. And it's sort of tilting closer to being in the middle, which is healthy. This is needed. Like we have needed this to happen for so long while people have been complaining about how hard it is to get a house.

It's because there have been too much competition. And now we're at a point where like I'm still buying houses and I'm writing offers under asking price on a lot of this. You're seeing houses have been on the market 30, 60, 90 days. That was never the case. Man, if it was on there for 14 days, we're like, whoa, what's wrong with this one? Yeah. Did it already fall out of escrow? So it must be in a sinkhole.

Yeah, exactly. Like I don't want it if it's been on the market 14 days. Something's wrong with it. So I think this is helpful. And now the realtor you have matters. It used to just be like if they could get an offer filled out and you could put a high price, you could get in contract and you kind of figured out escrow on your own. Well, now you need realtors that have skills of actually talking to listing agents and figuring out,

like, how motivated is that seller? I'm constantly, when I'm buying houses, I'm coaching the realtors at license in those states. This is the question I need you to ask. And if they respond this way, that tells us this. If they respond that way, that tells us that. Like Rob and I, he saw a little bit of that when we bought the Scottsdale house because it's been on the market a long time. And as a buyer, we had a little bit of leverage, which hadn't been the case for very long. So I do agree with you that right now, if you're a good realtor, you actually have the ability to help your client to represent your client.

And if you're a good listing agent, it matters. It used to just be, oh, I'll sell your house for 1% because I throw it on the MLS and it gets multiple offers. And as you know, Brian, most sellers have no idea the money they leave on the table. they never will know right you list you tell them their house is worth 450 you put it up there and if they get offers at 460 they think they won but they could have got 510 if they had gone with a different realtor that knew more and no one will ever know especially with all the bad agents that are discounting their commissions 100% yeah and if you're looking to sharpen your skills you know be sure to go to store dot biggerpockets.com and pick up a copy of david green's newest book

skill yeah thank you david didn't pay me to say that but david's a great writer you guys should go pick up his book. Now that Rob's getting his real estate license, you might actually have to read it and tell me what you thought. That's it. Yeah. I read your other books, so I will. You know I will. Yeah, you did. You're a good friend, actually. Now you're not even a realtor. You're reading those books. So that one was biggerpox.com slash sold and this one is slash skill. Those are written for real estate agents because they need to be better. All right. So but you got out of that and you got into the investing world, which are most of our listeners are kind of living their life now. So what it sounds like is you went from making money selling houses to making money flipping houses.

and then you invest that money into long-term and short-term rentals. Does that sum up what you got going on? Yep. 100%. I don't know how you guessed that, but yeah, you're right. Wow, that was really just all I guess, huh? Yeah. Well, yes, but I've done this for as long as I have you.

I can see all of the angles that he would have tried and said, nope, that doesn't work, and this is where you're going to end up. So tell us, what were some of the challenges you had when you switched from being an agent who sold houses to a flipper that had to manage projects and put properties under contract. Some of my problems when I first started off is I'm not the most detail-oriented guy. I am a visionary. I am like, let's conquer the world. So I bought like two houses immediately. I bought one house with a tenant without knowing the eviction laws in California. So that was a terrible idea. And the second house I bought, I straight up eyeballed it. I was like,

man, this is going to cost like $30,000. I ended up costing like $75,000 for the rehab. So I definitely took some lumps. I try to be very optimistic on a lot of my first flips. Like I bought a house on like a major street in California. And I'm like, man, I'll make this house so nice. It's, This huge highway in front of the house is not going to matter. But yeah, it did matter. It definitely mattered. So, yeah, I think for me, just understanding the small details of the rehab and then understanding comps when you're flipping was some big problems for me.

Yeah, I think it's pretty clear that you're good at what you've done here. The first couple of mistakes that you talked about, that makes a lot of sense. I'm kind of curious. Like, now that you have really developed your business, you're up to about 40 a year now, do you still make mistakes? Like, what do the mistake look like to this current version of yourself versus what you just described? That's a great question. So, again, I am not the most detail-oriented guy.

And sometimes I'll buy too many houses. So I have a house right now sitting in 29 palms. It's been sitting there for like 60 days. untouched. So sometimes I'll buy too many. Sometimes I will right now because the market changed. So let's just say I bought a house in January. And if I've had it sitting for this long, now the valleys are actually going down. So I messed up by buying too many houses and not having someone to immediately start the rehab. Also in California, involved or something like that happens, that could also be a huge problem. From a regulation standpoint or from inspections, what do you mean there?

So let's just say the city just happens to see us like maybe painting in some cities. They can stop work and then make you pull permits. Or let's say I've had this happen where I'm flipping a house in L.A. and this is the crazy this is a crazy story so I was flipping a house in Azusa on the tax records the house says 1,100 square feet right and then when you sell a house in Azusa there's something called the pre-sale inspection you could waive it so I waived it when I bought the house but when you're selling it to a traditional buyer you have to go through that inspection so they come out and they say hey Brian, this house originally was 700 square feet. And I'm like, well, the tax records say 1,100 square feet.

And they're like, oh, yeah, because there is an illegal addition here. So this needs to be torn down. And I'm like, oh, crap. So that extremely affects the ARV of the house. So there's still problems that come up, even with, like, you know, I'm like 300 transactions in. There's still problems that come up. Yeah, California is really good at making you. not enjoy real estate. I will say that. However, this is something that, this is a trend I noticed with real estate is that the markets that have the most difficulty like what we described also have the highest upside. Oh, 100%. Right? The ones that are the most like easy to do business tend to have its hardest to own and manage it and make money once you've got it. So one thing I've learned in my old age is you can't ever isolate the good from the bad. They're going to come

as a group, right? Like, especially hosting the podcast because you hear all the frustrations of everyone trying to do what we do. So for the last five years, everybody has wanted to be in real estate. They're seeing these amazing returns. It's very similar to the crypto market. I want to be in crypto. Millionaires are being made in crypto in a month, right?

You're seeing people's networks literally go over a million dollars from one or two purchases they made in crypto, similar to real estate. Back in the day. Yeah. A little different now. Well, that's what I was getting to, right? So everybody runs in because they see this is. is hot. I can make a lot of money really easy. I want to be in real estate. I want to be in

crypto. And then you see the difficulties getting something in contract. What made it a great market also makes it very hard to succeed in that market when it comes to real estate. Now we see the market slowing down. You actually can get in there in a lot of these places. I'm getting stuff in contract. I couldn't get in contract before. However, everyone's afraid. It's going to crash. Nobody wants to be buying. Interest rates went up. Now they're all salty and bitter about the fact that it's how the loans are more expensive but that's the only thing making it so that you can actually get the deal and to the crypto example that just crashed i don't know what by the time people listen to this maybe it's doubled again that that's what it's like but what i'm getting at is

the things that make it appealing to you that you can make money very fast in crypto are also you could lose money very fast in crypto right it wasn't really ever real money i can make good money in real state it's hard to do it and then the things that are scary oh rates one up we might be hitting a recession. We might be having a crash in prices. Those are the same things that make it possible to make money. So one of the best pieces of advice I can give to people is quit trying to isolate the good from the bad. It's what mix of good and bad are pros and cons do you, are you willing to work with in the market that you're going to invest in? Those barriers to entry, which are bad are literally what create the opportunity. Have you noticed that, Brian? Because you haven't been,

you're not very old, but you've done a lot of deals. You've very experienced for the time that you've been doing this. Like have you come across a similar perspective with your own businesses that you're operating? Yeah, my perspective, um, is that, you know, I've made millions of dollars flipping houses. Are there going to be some tough transactions? Yes. Does California suck? Yes. But, you know, it's better than I used to work 10 p.m. to 6 a.m. cleaning floors and bars for $10 an hour. like it's not nearly as bad as that. So if I have to talk to the city a couple times, right. You know, oh, well, boo-hoo. So, like, I do make it sound tough, but it's actually relatively a lot easier than 99% of the jobs that pay minimum wage. And that's, that's my

point. It's easy to say, oh, the city can come in, they see you painting, and they can stop you, and they will. In California, you are not allowed to change your floors. You're not a lot of change a lighting fixture. Technically, you're supposed to get permits in almost every county for very small things like that, even painting. And sometimes you get popped and you do have to go through this process, but no one mentions, well, I made $150,000 in equity over a year and a half. Exactly. And that's also a part of California. Rob, what do you think? You've done a lot of different real estate. Yeah, I think it's very funny because obviously I've got like a lot of students and I'll have a lot of students that reach out and they're like, man, I just, I can't believe you invest in

California, I would never invest there, man. That's crazy. And I'm like, well, you know, I'm willing to deal with the crazy because the profits are crazy, you know. And so I think, you know, there's always going to be regulation and there's always money to be made for those that, you know, are willing to stick through the regulation. It's not like fun. It's tough. I mean, I'll be honest. Like I painted my house in California like five years ago and I found out you had to get a permit. And I was like, well, said a naught. And I was outside all day on that corner, just looking at, around. It's getting in my head about it as like my guy was like painting my house. I was like, hurry, hurry, finish the front. But, you know, now I absolutely recognize. I'm like, it's just, you have to do it because the actual financial downfall of, or the repercussion, I guess, is pretty big, you know, and it's never worth losing the money. So I think nowadays, I've really changed my model a lot. I think glamping is a really big example of this where when we started, we were putting tents out on land and everything. But as we try to scale our glamping business from, the five units that we had to 100 units, the only way we can really do that is by going through

intense, and I mean intense regulation and going to city halls and working with civil engineers and spending $50,000, $60,000 to do it. But I know that because we're the only people that are willing to do it, there's a lot of money to be made on that. So for me, it's taken a little bit of time because I don't really like spending a lot of time on the red tape. But it's the only way to be profitable in, I think, these days is to just kind of be willing to bite the bullet on that stuff. I was thinking it would be funny to make a skit or a video. You see these movies where someone wants to rob a bank.

So they call the police and they report like a robbery on the other side of town and all the cops go over there and then quick go rob the bank. You do something like that with the city in California. You're like, hey, the guy at 1, 23 Main Street over there has an illegal bathroom demolition and then all the inspectors are like driving over there to try to catch them and you're like, now, now, now. And your painters come in and your flooring guys come in, and everyone's like, scrambling to get the windows replaced in the house, and then they all jump in a van and vanish before anybody can find out. It's the Ocean's 11, you know, of really. Yes, yes. And Brian,

are you in Vegas or are you in California working with Ryan in Vegas? So I actually moved to California, but I do all my business now in California in San Bernardino County. Okay. So this is an awesome segue into once you're flipping this houses, you're making this money, but you've got, like you said, you're visionary. You've got the big picture in place, which you know means owning real estate long term. What type of properties are you buying? What's your buybox look like? What's your strategy when it comes to owning real estate? So another lesson in real estate is what works this year. It doesn't mean it's going to work next year. So what has worked for me the last two years could have just changed today because I got an email from my Airbnb manager that San Bernardino

just passed a new ordinance. We still got to see if this is 100% going through. But for my understanding it is that every person can only own two Airbnbs in San Bernardino County. So my was to get up to 20 in San Bernardino. And from my understanding now, that's not going to be possible. But typically now I'm trying to buy Airbnbs somewhere between like 50 to 70% of market value. Get all my money back out of it using the Burr strategy and just keep recycling my money like that. My goal was to get up to 20 because I figured if I get up to 20, I should net around half a million dollars. of passive income. But that's my dream. I'm going to see how I'm going to have to pivot moving forward now. Yeah. So we call that the, we call that the Burrster, the Burr into the STR. And I think

we've chatted about this. But what was your, what was your intention for getting into short-term rentals? Because it's obviously a really big pivot from, well, A, burs and flips. But is it because you like the profitability of it? Or was there some other reason that you, that you decided to kind of break into the Airbnb world. So I, Tony Robinson from the Bigger Pockets Rookie Show, he actually was the one who kind of introduced me to short-term rentals. I've always heard about them, but actually seeing him do it in my backyard kind of just motivated me to actually take the leap and get into it. But with my long-term rentals, what I've noticed is I was making, you know, 300 to 500 to 500 a month net on passive income. But one repair would come up and that would just wipe out the cash flow.

And then as something people don't talk about is like as you start to make more money, you start understanding that your time is more valuable. So I'm like, okay, I'm spending all this time on this rental. That's pretty much making me nothing. Like I get the appreciation, but there's no cash flow at all. There's like no money being made. But with short-term rental, I can get the appreciation, I could get the cash flow, I could get all the same benefits, but more. So that's kind of what made me decide to switch to short-term rentals. And I'm actually not going to buy any more long-term rentals. I'm still going to go hard with short-term rentals, but I'm just going to have to probably pivot markets.

Right. Well, welcome to the dark side, my friend. And we've known for a long time that this was too good to be true. Like I remember saying a year ago, I don't know literally one short-term rental investor that is losing money. This is impossible that every single deal could work out so well and people can do so good. And now we're starting to see some of that correction. It's coming mostly in the form of regulation. And that is what is so scary.

Because when you run your numbers on the calculator and you do everything you're supposed to do and you know this is a good deal. And then after you buy it, the entire situation changed. that you couldn't have predicted. You can get hurt pretty easily. So what's your guys' thoughts on just your experience with the different cities? Because now all of us are short-term rental investors. You know, I don't only buy that, but I'm buying it now and I never really did before.

With if some of these properties that are bought are going to be grandfathered in or what people should be looking for when they're doing their due diligence as far as regulation from individual municipalities. I mean, personally, I think that you want to diversify. to me, a lot of people are like, what are you doing to mitigate this? I'm like, I diversify. I've got 15, 16 units right now, and most of them aren't in the same city. You know, there's a couple in Joshua Tree, Los Angeles, Scottsdale, you know, I've got some in Texas and Tennessee and Virginia and Wisconsin. So for me, I understand that diversifying protects me a little bit more simply because if

something happens in one city, all of my eggs aren't in one basket, which, you know, that's not always the case. I mean, there are definitely cities that I heavy up in a little bit more, but I think the more you're diversified, it's just, it's a little easier to at least have time to strategize and think about how to move forward, whereas if all of your portfolio was in a spot and then something, you know, like this regulation you're talking about, Brian happens. It's really tough to strategize with the clear head because you're like, this is my entire business, you know, it's really tough. So what's your plan? Like, are you going to go to different areas, cities? So what my plan moving for, is I'm going to go home and cry tonight and then after I'm done crying because I have eight

short-term rental so I'm way above the two. I'm going to start looking into other markets like Robert said and I'm going to have to pivot. I'm probably going to have to have to I've been looking at Florida and other markets but pretty much I'm going to have to pivot. But I want to ask Robert also. I've heard that the revenue is down, even in like Tennessee and other markets that the revenue is down on short-term rentals. Why is that? And can you give me some feedback on that? Yeah, definitely. So right now, I actually just did a whole video on this. If anybody wants to check it out on the channel, it's called like, it's about the new Airbnb redesign and effectively Airbnb shifted the design of their website to be less in the control of the traveler, it used to be like, oh, I'm going to go to

Joshua Tree and I'm going to pick a place. Now, Airbnb really wants you to say, oh, I don't know, I'm going to go to Airbnb's website and just choose a place that they serve up to me. And so Airbnb has curated all of these different categories and like the most aesthetically pleasing listings based off of an AI algorithm. And so it sort of entices people to try something new. So I think a lot of people are blaming that right now for, you know, a loss in bookings because they're like, ever since the new redesign happened, we've lost our bookings. Like, we're not getting nearly the same amount of bookings. Here's what I think. I think that we're just going back to typical seasonality. Like if we talk about Joshua Tree, for example, if you looked at your portfolio over

the last year or two years, you might have had an 80, 90, 100 percent occupancy like me. My tiny house Casa Conejo, I was booked 100% never missed a day. And now I'm looking at it and there are a lot of openings on there. And as much as I want to get nervous about it, it's just, it's just, I think that we're recalibrating, not post-pandemic, but as the dust settles on the pandemic and people no longer are itching to just travel anywhere and like book Joshua Tree or book these places, like a lot of people are going internationally. And so I think it's coming at a time where people are no longer traveling super close to them. They want to just get on a plane. They want to go internationally. But at the same time, I think there's a few economic conditions as well. Gas is

what it is. It's double what it was. Or maybe it was like 50% like a few months ago, right, above what it was a year ago. And like that's also causing people to be very cautious about not driving and spending an extra 400 bucks on gas. So I think there's just a little bit of like the perfect storm right now. But ultimately I'm chalking a lot of this up to we're just going back to standard seasonality in the desert markets. Like Scottsdale right now is really slow. We were hoping to be fully booked, but it's like the summer. It's like 110 degrees there right now. Like, who's traveling there? So I don't think it's the end of times or anything, but we just have to write out, you know, if you're in the summer, if you're in the desert, it's hot in the

summer, you know, so you just got to understand that. Probably not going to get a lot of bookings until like September, October, November. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features 4,700 a single-family rental home spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce

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In real estate or in short-term rentals specifically? I would say in rentals. I think something we all should keep in mind is that, like I said earlier. Short-term rentals, when they first got started, many industries are like this. If you made a website anytime in the early 2000s or late 90s, you did well. If you could make computer networking happen, you guys aren't really old enough to remember that. Everybody was rich. There's this phase when new technological advances come in that if you're competent, you crush it. There's no competition. Like it's an elevator ride up. We've seen that with short-term

rentals. If you owned one in an area people wanted to visit, we saw people totally prefer staying in a house versus a hotel. The experience is way better for the person visiting. That short term rental industry exploded. VRBO, Airbnb, everyone did well. It's now kind of plateauing. I don't think it's crashing. I think it's hitting what the homeostasis of this market should look like, which is that you have to compete with other people for the bookings. This is how business works. If you make a tennis shoe. There's other companies making tennis shoes that are trying to make a better looking shoe than yours. And that's why they're all competing for what athletes going to wear their shoe. You don't just start a shoe company and you're done and people buy shoes for the rest of

time you make them. You have to constantly be innovating and improving. So now if someone's going to visit a market, say somewhere in Tennessee or Joshua Tree, they have options. They can go on Airbnb and look at all the different places. And there's so many investors in those spaces that it's getting to the point where there's more possible listings than there are people that want to visit them. So you're seeing the better ones are going to be picked. Now, this doesn't scare me because I was planning for this the entire time. This is how business is supposed to work. You should have just buy a three bedroom, two bathroom, throw it up on Airbnb and be making 10 grand a month, which is what people have been doing a lot of the time. You have to have the best listing,

the best area. And I think the ratings are starting to become a thing now. If you get a, if you've been doing this five years and you've got five years, worth of reviews that are all positive and then David Green steps in and I get in and I've been in it for two months, I'm not going to get the book of business that you are. You're going to show up higher in the algorithm and you deserve to. You've got a stronger business. I'm just getting into it. So I think investors need to be aware that that elevator ride up is coming to a slow with both rates increasing and the saturation of other people getting into these markets. So I think you have to tread more carefully, but that shouldn't shock people. No one should hear this and go,

oh, it's over. I can't make money in short-term rentals. No, you can't make easy money like what you can make. Rob? Yeah, I mean, I think I'm not going to say I'm relieved because I like making more money when possible, obviously, but I think for me, short-term rentals were always insane returns, you know, like most of my portfolio was getting between, I don't know, 40 to 100% cash on cash, which is, you know, don't look at that and like go for that. That's a lot harder these days. but it was always outperforming the long-term stuff for me. And I'm actually not really slowing down on my end because now, you know, we might be equalizing the returns a bit and maybe it's not 40, 50%. Maybe it goes down to a 20, God forbid, or a 25%. But to me, I'm looking at this like, well, okay,

not only is the return going down, but it might be the only place where I can get a return like for a while. And so for me, I'm still kind of investing in short-term rentals, but I'm being a lot more strategic about picking my place. I'm going back to sniper mode, as David put it. Yeah. And maybe taking a longer term approach. I keep going back to this. When I'm buying a lot, I think I just put eight short term rentals under contract in the last three days. And when I'm looking at the numbers, I'm saying, okay, that's what I want to hit. It may take three years to get to that point because I need time to build up the reviews of this property. I think one of them I'm buying is already been a short,

term rental with great reviews and I'm inheriting those. So like now that if you own that short term rental and you've got three solid years of great reviews, that property is worth more to sell to someone else because they're bringing. I think we're starting to look at these homes as businesses. We're evaluating like if you were to go in and buy a business, these are all the things you'd be evaluating like what Elon Musk is doing with Twitter. He's like, well, how many of these accounts are real? How many of these are bots? I have to evaluate what I'm actually getting. And I like this being a part of real estate because this is what real estate investing is, is you're buying a property, but what you're really buying is a business. You're buying an income stream. And we tend to

look at it like, I'm buying a house the same as if I were to live in it. And now those lines are kind of being more clearly drawn. And I like seeing the industry go that direction. I noticed, Brian, you smiled at that. Did you have a comment on that in that direction? A little bit. And I also have a selfish question that I want to ask you guys. But I don't know if you want to finish what you were saying first. I like, no, you're like tossing it back to us. I'm like, oh, I'm being interviewed. Yeah, because I see David is like the godfather of real estate. So do you think that crypto and NFTs are going to disrupt or change the real estate market?

I'm going to make you enough for you can't refuse. I'll sell you one Bitcoin for $8,000. Yeah. I actually, my pet peeve is when people talk about disruption, disruption in there. It's like this pretty cool thing that they want to make it sound like, this rebel, revolutionary, no, that doesn't happen at all. I think it will affect the way that the transaction occurs. The principle is going to stay the same.

I think that blockchain entities, I think like when we interviewed Ryan, he talked about it, he and I are 100% locked in with how we see the future. Real estate's becoming so expensive, so difficult to buy, and the tax benefits are so strong that if the laws stay the way they are in the IRS code, corporations are going to figure this out. Like, ooh, instead of paying the corporate tax rate, which will probably get bumped up at some point from 21% to 28, we can just go invest that money into real estate right off the depreciation. We can own the building we're in. We can write that off. We can buy other people's buildings. We can, like, I don't know, Ford can buy Chevy's headquarters and Chevy can pay rent to Ford

and Ford gets all the tax benefits if they had cash. I think you'll see this happening a lot more, which means that big players buy it more real estate. What that means is the little guys got to kind of huddle together and go and make a group to go take on the big guy. which will happen through the form of an NFT. So I think you will see more of like, hey, we're going to go buy like the property Rob and I bought. Someone could turn that into an NFT. So a portion of it, like they could make 20 pieces of it.

Everybody owns 1 20th of it. You benefit, you buy it into our NFT and you get a piece of the upside as it goes up. And if you decide you want out, it's kind of like a stock. You sell it for more than what you bought it for. Somebody else buys into it. They get the tax benefits now, depending on how much is left.

And you take your money, go put it somewhere else. So I think the way, the transaction happens, NFTEs, crypto, that could change it. But the fundamental principle of how real estate works, no, it's going to stay the same way that it is. I'm mostly watching what the tax code does. I'm looking to see if they go after real estate investors and say, these guys are, they need to pay their fair share. We need to quit letting them have cost segregation studies and depreciation. They don't need to write off the house. If that changes, real estate becomes inherently less valuable, at least as a business. But absent that, no, I don't think it's going to be any different.

What do you think, Rob? Well, the question is, do I think that NFTs and crypto is going to disrupt? Disrupt? Yeah, so I don't know. I think after listening to Ryan Panetta's episode and kind of getting into the NFT, I'm relatively convinced that the big shakeup, obviously it's going to come from the crypto and the NFT side of things, but I think it's just moving real estate out of the dinosaur age, and technology is really going to shift how real estate works and how instant it can be

come through the blockchain and through NFTs and how quickly you can liquidate. So I think that's really where the disruption is going to come versus, you know, buying a piece of land in the metaverse and, you know, becoming a, out of building a house in the metaverse and then like people can pay you and you, I don't know, make money that way. Like, I don't know about that. Yeah. I mean, I think that's all stuff that's certainly going to come.

But I think it's the blockchain and the contract and the instant, um, the instant ability to move and transfer assets. That's where I think the real disruption is going to come. come. And I do think the next five years, it'll be pretty significant. I always say that being very good at real estate is being a master of transfer. And that's what we're going to see in the next couple of years is how good are you at transferring your stuff around? And instead of having to pay money in taxes, you're transferring money to properties that can effectively help you avoid your taxes. So the better you are at transferring, the more wealthy you'll become. I love it. What do you think?

Anything you want to push back on there, Brian? There's people that I've heard people say, oh, you know, later on, if I want to buy your house, I could just send you crypto. And, you know, it's on the blockchain and we don't need a title company and all that stuff. But I think people don't really fully understand what escrow and title does. It's not just transfer money. They want to make sure the title's clean. They want to make sure if David sells the house. What if David's married?

And she's not on title. What happens to her? What if David inherited the house? so there's so much so I'm not like a big believer in the crypto and NFT thing but since you guys are the leaders of the real estate investment world I wanted to get your guys's opinion yeah but I think even just diving into that though I think the with the title company stuff it's yes obviously there's a they're checking of the title is clean but that record is public effectively on the blockchain and

through kind of that you know the the cryptocurrency world or whatever so I think it's it's not that it's not checking that. It's just that it's a lot faster to check who actually owns it and the kind of the line of ownership on it. So it's, again, it's not necessarily removing the function that already that exists. We need title companies, but what we really need and we don't know what we really need are faster title companies and things that can be instant and the ability to close on a house on a Saturday at noon. I think that's sort of the bigger disruption that I see. This is a really good topic and maybe Brian we should do like a bigger pockets YouTube thing. I'll wrap up with this before we go into the deal deep dive now that you've taken over our show, which is awesome.

This is the Brian DeVila takeover episode. I love it. I love it. I really do. That's great. The best way to understand real estate at a general level is a store of money or value. It's a way to put money as you understand money, which is money itself is just a store of value. and we see this because as inflation is going, whatever you thought money was worth is less than what it used to be. It's very difficult to understand that $100 is never $100. It's always moving. It's becoming $97, then $92, and then $78.

And actual cash in the bank is a terrible way to store energy. It bleeds, it loses value just like a car that you bought that becomes worth less, the more that you drive it. Real estate is a safer place to store energy as far as currency goes. energy as in purchasing power. So these technologies will make it easier or more efficient or faster to do that. But as real estate becomes a stronger storage of value, which is what all of these technological improvements we're describing are making happen, the people that have more of that energy, the wealthier corporations and individuals are going to own more of the real estate. And that is

why I'm out here banging the drums, shouting from the rooftops, telling everyone I can hear, they're not building houses fast enough. You have to buy this while there's opportunity to. Now, that doesn't mean buy it tomorrow because I understand where we're entering into a soft spot. We could be going into recession. Different people are in different financial situations where they don't all, maybe their job is shaky, right?

But in general, it's going to become harder and harder and harder to buy real estate the more that what you're describing Brian happens. That's what no one recognizes. It's like, oh, this is awesome. There's podcasts where I can learn all about how to invest in real estate. yep, and everyone else is listening to it too. And they're competing with you to get those houses. I remember when I wrote my first book for Bigger Pockets,

which was long-distance real estate investing, there was like hatred and vitriol coming at me from kind of the older school investors. Like, you're going to make people lose a lot of money by telling them to buy in another state. They're going to get hammered. They don't know what they're doing. They didn't understand that technology had improved

to the point that you could do it much more safely than you could before. The problem is everyone now doesn't. it like five years ago 10 years ago people were not buying real estate out of state now everyone is and what it did is it creates more competition so i'll wrap this up by saying as real estate becomes easier to purchase as this information gets out there so that you feel safer as financing becomes smoother everyone else is getting that too and they're all competing over limited resources there's not a lot of houses and then there's definitely not more land being built right like the most prime land is what it is and you're not going to be able to make any more of that. So I always have a sense

of urgency that the easier this becomes, the more my competition is going to go out there and buy those houses and you have to take it with more seriousness where before like 50, 60 years ago, real estate was a secret. Nobody was real estate investing unless you were that one guy in town that knew how to do it and you happen to have a mentee. So while we get very excited about technological improvements in real estate, I'm also like that scares me because that means people that are not as smart, not as experienced, they can get an education in six months to a year that used to take 10 years to learn. So you got to keep doing what you're doing. You got to keep making money in your business. You got to keep buying real estate. You have to take a long-term approach. You have to keep

money and go any reserves. Now is not the time to take your foot off the gas and say, ah, the market's going to completely crash. Like, I've been hearing this for so long. It will probably slow down. It is slowing down. I think this is healthy. We've needed to slow down. But crypto's not going to replace real estate if that's what anybody's worrying about. No, yeah, definitely not. All right. Well, This has been a very long episode, mostly because Brian did such a good job of wrestling the microphones away from us. He's throwing the curveball to us. You're like the guy in the movie that takes the gun away from the bad guy and then points it back at them.

I was like, that's exactly what happened there. Great job. We are going to move into the world famous deal deep dive. In this segment of the show, we dive deep into one particular deal that you've done. Do you have one in mind, Brian, that we can dive into? I think I'll go over my first deal. So I remember after two years of being a real estate investor, I'm sorry, after two years of being a real estate agent, I finally got pre-approved and I was so excited to buy a house. And I was looking for a couple of months and I never pulled the trigger on anything. And then I remember it was the 4th of July and I remember it was night and I could hear fireworks going off in the background. and I was on the MLS and I found a little house in Las Vegas.

I saw I was listed for like $225,000 and I had a pool. It was in a nice area. I knew the area was good and I knew that it had a pool and it was just like really good real estate. So I was like, you know what? I'm just going to buy this house because I know it's in a good area and I just need to buy a house. I've been thinking about this for years and I haven't done it. I'm just going to put an offer in. I put an offer in, got it accepted, and I immediately started freaking out.

I was like, holy crap, like, what if I, like, can't make this payment, you know? What if I, you know, what if I have to file bankruptcy? This payment's going to be $1,200. How am I going to be able to afford this? Will this even cash flow? So got the offer accepted within an hour on the 4th of July. I couldn't sleep that night. and I ended up going on YouTube and searching how to calculate rents.

And I came across a show called Bigger Pockets. That's literally the first time I came across Bigger Pockets. And after staying up all night and watching the videos on how to calculate rents and how to calculate how much you make on a rental, I decided to move forward and buy that house. And I say, you're never going to get rich on your first deal, but you'll get rich because you did your first deal. And I'm super grateful that I ended up buying that house and coming across bigger pockets.

It completely changed my life. So if you guys are being a little bit gun shy, sometimes you got to go out there and just make some mistakes and pull the trigger on something. And just out of curiosity, how did you fund that deal? Just a regular conventional loan. So regular, I was going to use it as a second home. So I ended up actually buying it and then moving my mom into it and using it as a second home. And then I eventually rented it out. And I still own it today. And I think it's like doubled in price. Okay. We're going to we're going to fire questions at you, rapid fire. And now we know preface it like this wasn't the best deal you ever did. But it led to the better deal. So that's valuable.

Question number one. What kind of property is it? It is a single family house with a pool. It's a two, two, two with an office, so now it's a three-two. And you said you, okay, usually we ask how we found it, but I think you said you found it on the MLS. Is that right? Yep. I went on the MLS and put in an offer. All right. And what was that offer? How much did you buy it for? I ended up buying the house for, I believe, like $225,000. And how did you negotiate it? I think I was so scared to negotiate. I think I offered list price, but just didn't, but I asked for a home warranty. Okay. That's a total realtor move right there. This was your realtor days, I can tell. That's funny. All right. You talked about how you funded it. What did you end up doing with it? Was this a flip?

Was this a bird deal? So I ended up, I let my mom move into it because her house was upside down. So I ended up helping her short sell her house. And then I ended up turning it into a long-term rental. And I'm trying to turn it now into a short-term rental. And what was the outcome? The outcome is I became a, multi-millionaire through real estate investing because I bought that first deal. Ooh, that's good. I like that. Yeah. And what lessons did you learn from this deal? I learned that it's better to swing and miss than to just let balls keep going past you. That's awesome. It's how you become better at baseball, right? Was that a baseball metaphor because

you work with Ryan or did that just happen to happen naturally? Yeah, it was because I remember Warren Buffett talked about, you know, the baseball analogy. You know, just wait for the right ball and swing. So I kind of keep that in mind. There you go. And on this deal, who was the hero on your team? The hero on my team, honestly, was myself because my wife told me not to buy it. Everyone was telling me not to buy it because everyone at the time thought that real estate was overpriced. But now that house is worth like $500,000. I bought it for $225,000. So honestly, like last lesson. Like when I started, my wife, my mom, no one supported me. Nobody was like,

yeah, let's go out and do this together. I kind of had to like do it on my own. So if you don't have that support, it's okay, you know, lean on bigger pockets and go out there and buy your first deal. You know what I really love about that though? You know, a lot of people say it's really hard to become a millionaire. And how can you do that with real estate? And, you know, if you buy a 225, thousand dollar house and it appreciates to five hundred thousand dollars plus you know in however many years three four five that you're a quarter of the way there you do that four more times than you're a millionaire it's really achievable if you just break down the numbers and like put together a plan to get there 100% all right that was our deal deep dive remember you could do more deals with the help

of bigger pockets tools and resources which you can find on the main page of the website just hover over tools. Okay, we are going to move to the last segment of the show, Brian. This is our world famous, famous for. Famous for you've no doubt heard other people answer these questions. Now we're going to be firing them at you. Question number one, what is your favorite real estate book? My favorite real estate book is Flip Your Future by Ryan Paneda, and it's not because I know Ryan, but it's because he gives you literally everything you need to know about flipping houses, and it's a very short read. Awesome.

Question number two, favorite business book. Right now, I like a $100 million offer by Alex Hermosey. Okay. I just heard about him for the first time. You popped up on my YouTube. I think that it was his interview with Ryan that got him in front of me. Is he a real estate guy or a business guy? Business.

I think business mostly. Okay. Yeah. Question number three, when you're not out, you know, burstering into eight Airbnbs and flipping 40 houses, houses a year. What are some of your hobbies? So I do work with Ryan at Future Flipper. So we teach people how to flip houses. And then I also just hang out with my kids. I like to take my kids to the beach and really just enjoy, you know, spending time with them while they're young. All right. In your opinion,

what sets apart successful investors from those who give up, fail, or never get started? I think that successful investors have to have an appetite for risk. This is a risk. This is a risk business. You can make a lot of money flipping houses or buying rentals. You could also lose money. So you have to have an appetite for risk. Yep. A hundred percent agree. And lastly here, Brian, can you tell us where people can find out more about you on the internet? If somebody wants to follow my journey, the best place is Instagram. So it's the Brian DeVilla. And I have a couple of impostors that made fake pages, but just have to make sure the spelling of the and Brian DeVille is correct. Yeah, we talk about that. Probably every single episode.

What about you, David? What can people find out more about you? I'm at David Green 24 at TikTok. I'm David Green official and on YouTube. I'm David Green real estate. I think I probably have the most boring handles in the entire ecosystem of real estate educators. Would you say so, Brian? I would say throw a the in front of it and it's going to look awesome. I told you if you add thy before at thy David Green. that is much cooler. This is why I love Rob, because Brandon would do the same stuff. Like, he came up with beardy Brandon because that's funny.

Like Rob's laughing, just hearing that name that that's funny. That thy David Green. I love it. All right. Well, Brian, we appreciate you being here. This has been a very good episode. And I also appreciate you turning it around on us and letting us answer. Did you have any last words or last statements you'd like to make before we get out of here?

Last couple statements. If you're listening to this, you know, believe in yourself. No matter where you're at, you could change your life. If you take daily consistent action, surround yourself with the right people, listen to the right podcast. You know, I struggled with drug addiction. I struggled with a bunch of other problems and I was able to come through that. So no matter where you're at, you could change your life.

And, you know, thank you, David and Robert. You guys are impacting people's lives more than you can imagine. So thank you guys. For sure. And, you know, just to end with a little good news here, Brian, during this podcast, I did a little bit of research. on the San Bernardino Ordinance, and it says that all existing permit holders will be grandfathered in. So as long as you got your permits, my friend, you are going to be okay. Nice. And that's it. That's it. I usually get a little nervous ending with something that David's always like,

hey, do you got any last words after our guests say like something really beautiful and profound? And I get to end with some good news. So thanks for your time, dude. We appreciate it. Thank you guys. Appreciate it. This is David Green for Rob King James Version Abasolo, 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 Calicoke 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.w.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.

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