BiggerPockets Real Estate Podcast - 755: How a Barber Went from $12 Clips to Six-Figure Cash Flow in 10 Years w/Rick Morin

Episode Date: April 20, 2023

Most people buy rental properties on purpose, but most people aren’t Rick Morin. Rick is what we would call an “accidental investor.” He has been able to build a home-run housing portfolio by slowly, steadily investing whenever he had the chance. The best part? In the beginning, Rick had no idea that what he was doing was real estate investing. He was stunned when he bought his first home, which ended up paying for itself entirely. Fast forward a couple of decades, and Rick is sitting pretty with $285,000/year in passive income, a $3,000,000 portfolio, and the financial freedom most Americans won’t achieve until their 60s. So how did a barber, growing up in an impoverished household, go from making $12 a haircut to pulling in over $200,000 per year in pure cash flow? It’s simple: buy right, buy consistently, and trust your gut. Rick has done flips with car-sized holes in the roof, gone over budget and timeline, and made up his own comps, but at the end of the day, all the deals he’s done have led to him holding this massive real estate portfolio. And while he’s nothing short of an investing genius, his process for evaluating and doing deals is NOT complex. You don’t need a degree, a large inheritance, or any experience to repeat Rick’s system. If you’re trying to build wealth in the background, leave a legacy for your kids, grandkids, great-grandkids, and everyone else down the line while focusing on doing what you love, tune into this episode. Rick has wealth-building advice that ANY investor can benefit from hearing.  This Show Sponsored By Take your business to the next level with Left Main: the #1 CRM for Real Estate Professionals, built on Salesforce. Go to leftmainrei.com/biggerpockets to learn more. In This Episode We Cover: Turning $12 haircuts into a $3,000,000 real estate portfolio  How Rick used “house hacking” to accidentally start investing in real estate  House flipping and how to use short-term profits to pay for long-term rental properties  Leaving a legacy, building generational wealth, and escaping poverty  Where to find off-market deals and using Facebook, friends, and clients to get DEEPLY discounted properties  Short-term rental investing and the secret tip a top tourist group CEO gave Rick  Why building wealth slowly will make you richer than speeding your way to financial freedom  And So Much More! Links from the Show Find an Investor-Friendly Real Estate Agent BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch BPCON2023 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 David’s YouTube Channel Work with David Rob's BiggerPockets Profile Rob's YouTube Rob's Instagram Rob's TikTok Rob's Twitter House Hacking 101: What It Is and How to Get Started How to Easily Find Off-Market Properties The Plight of an Accidental Landlord Flipping Houses: How to Get Started and Everything You Should Know Connect with Rick: Rick's Instagram Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-755 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets Podcast Show, 755. Growing up with no air condition in my house to becoming a barber and charging $12 a haircut, and then bam, over a span of 10 to 12 years, we've got a portfolio of $3 million. So today's guest is Rick Maureen, who went from being a barber to a million hair. That will make a lot more sense as you listen to today's show. That's right. Rick's story specializes in getting rich, slow, and safe, and steady. that will never do you wrong.

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lending hold you back another day. That's hostfinancial.com. Rick Maureen, welcome to the Bigger Pockets podcast. How are you today? I'm doing great. Thanks for having me. First question, where are you joining us from today? Corpus Christi, Texas. You know, I was looking into investing in Corpus Christi, Texas like eight years ago. I was thinking that might become a travel destination. Do you think that I made a mistake not buying there? Do you think that was a good call? I think it was a good call, it's going to allow me to buy more. I love the honesty. We're going to have to a great start here.

Yeah, and you would have ruined Corpus Christi for everybody if he had talked about it on bigger pockets for seven years. That is the curse of David Green. You're exactly right. I did that to myself in Jacksonville and a couple other markets. So that is how it goes. So before we get into your portfolio, Rick, I want to ask you, what are you doing for work these days?

So I'm a I guess you could say part-time barber because I'm in the barbershop two days a week. and I also I travel. I work for a clipper company and I travel the world sharing barber knowledge. And up until recently about two years ago, I started sharing real estate advice to barbers and stylists at these big barber conventions as well. So let's get into this, the most important pressing question that I can think of, what do you recommend we do with Rob's Quoth? Honest opinion, I think we need to take it all off and let it regrow because I think it's uneven on top. Okay.

And so shaving it off would even it out a little bit? Well, it'll give you that fresh start. Oh, okay. All right. I mean, I've always thought about it. I've always thought about buzzing my head just for the sake of looking at a photo one day and be like, oh, yeah, remember when I did that? Otherwise, I'm going to show photos to my kids and I'm going to look exactly the same.

same over the course of like 30 years. Well, I tell you what, when you're ready, make sure to go to bookseat and book an appointment with me. Okay. You're the guy I'll call. Rob Ser does look like when you're raising a palm tree and you tie it to something next to it so that it grows in a certain direction. Like, it's been trained to go in that way. I've grafted, I've grafted the quaff on over time. Yeah, I'd be curious to see what it'd look like if you split it in half and had each one going at a 45 degree angle, like a V for victory. Y'all are starting to sound like my TikTok comments now. Every day I get comments. that are like, you make all this money, but you can't even afford a barber.

Well, I mean, you're keeping the attention off of your black pocket teas if they're talking about your hair. It might be part of your grand plan. You're like, I don't want everyone to realize that I have a big sponsorship with Haynes. And that's why I wear these underwear t-shirts for every episode of the podcast. So you keep talking about your hair. So what about before you bought real estate, Rick? What was life like then? Wow. Like childhood-wise or like adulthood-wise? No, when you were an adult, like, what were you doing for work? Okay. You know, actually, no, let's go back a little bit. What would your childhood like? Because I want to know what drove you to get into Real Thin v. And to the degree that you did. Okay. So childhood, so childhood, I grew up on what the common people would say, the wrong side of the tracks, the bad side of the neighborhoods. And it was tough. I mean, I loved, I loved my childhood, but it was extremely tough. Like I said, I live in Corpus Christi, Texas. We're in summer. On average, we get 105, 110 degrees with the heat index of 115, 120. And I didn't have air condition in my house. house. My parents, we'd had no air-conditioned in the house till I was about 16, 17 years old.

And at that, they put it in a window unit in their bedroom. So at night, me and my brothers and sisters would sleep on the floor there. I mean, if I came home and dinner was tortillas and butter, I mean, that was great. I didn't have my first steak until I was 18 years old. I didn't know what a steak was. So it was a, it was humble beginnings, but it allowed me to value life as well. So yeah, at 17, I joined the Army, spent six years in the Army, loved every single minute about it, blew out my right knee. So when I blew out my right knee, it was a, it was an unfortunate situation at the same time, you know, so I blew it out right before my unit was going to Iraq and I called home, call mom and dad and say, hey, I'm not going. My mom, thank you,

Jesus. She said I was praying, she was praying that I wouldn't go. And I was like, well, now I'm broke so I can't go. So fortune for me, I was at the time I was station at Fort Hood in Calene, Texas. And my orthopedic surgeon then said, hey, I've got a friend who's in Corpus Christi at the NAS station down there, the Naval Air Station in Corpus. And he's a phenomenal orthopedic surgeon. I think I want to send you home your last two and a half years of active duty and just go get your therapy and surgeries done down there. So I was like, oh, wow, this is great. So I came home and at the time my sister had just had a baby and she was about 19 and she lived with my mom and dad. Well, this baby was a cry baby. I'm talking like he cried nonstop and I'm telling my dad,

dad, I got to get out of here. I can't stay here much longer because I'm trying to sleep and have friends come over and that baby's crying all the time. I said, I'm going to go rent an apartment. He said, you can't leave this house until you buy a house. And I said, I'm only 20 years old. what am I going to do buying a house? He's like, well, it's the only way I'll let you leave this house. I said, okay. So me and the girlfriend at the time when I was dating, now she's my wife. I say, hey, I want to move out. And my dad said the only way I can move out is if I go buy a house. Wow. Okay. That's a journey. That's the whole journey. And I think, you know, you say it very, very casually that you didn't have AC, but that it sounds like based on the temperatures,

you were hot all day every day. What was that like growing up, man? Well, that's the thing. Like, I didn't know, you know, because my grandparents didn't have air condition, you know, most of my families. And we had, we had fans on the windows. Remember the box fans that you put in the windows? So that, that really helped a lot. It helped circulate air a lot. But I didn't know any other way. The only time we was ever at AC was when we went to, to school, really, you know, school was most of the time had AC unless it broke, which was very rare. But other than that, it was, as a kid, we're outside playing all the time all the time. anyway, so having an air condition wasn't really, I didn't feel as if it was a necessity at the time. Sure. So, you know, your parents live in there. You're doing this thing. You're trying to move out. Your dad's like, you got to buy a house first. I got to imagine there's a reason for that. What were your parents' relationship with real estate to sort of dictate that one requirement for you? So my parents didn't buy their first house until, I think my dad was about 30, 30, 32. when he bought his first house, he rented the whole time, right? So I think his theory was,

if you go out and buy a house, you'll be a homeowner. You won't, quote unquote, throw your money away on rent. Okay. So he was watching out for you. Oh, definitely. Wow. Okay. Cool. And so you, you said you're now wife, but you pitched this idea to her and she was on board and then you guys bought a house? Well, I bought the house. We were, at the time, we were probably dating for maybe a year or two. So we didn't move in until the day after we got married. But I knew she was the one. So I wanted to make sure she was happy with the house because it would ultimately be our first house married together. Okay.

And how long ago was that in reference to today? About 20 years ago. Wow. Okay. All right. And at what point did you buy your first rental property? So that first, the first real rental was that house. So what happened was I bought that house at 20 years old and I was staying there for about three months.

And about three months after I'm in there, a buddy of mine calls me and say, hey, you got a room for rent. I know your cousin told me that you got just bought a house and I need a place to stay. And I was like, yeah, I got a three bedroom house. He said, you want a roommate? And I'm like, I grew up with the roommate. My brother stayed with me my entire life. When I was in the army, I had a roommate. Like, sure, come on over.

So he came over, checked it out. He's like, yeah, I like it. And he's like, how much you want rent? I said, bro, I don't know. I've never rented anything to anyone. I don't even know what to do. He said, well, how about I pay you $500 a month and we split all utilities? And I wanted to be fair because he's my friend.

So I said, is that a fair price? Like, I don't even know what to charge. Is that fair? He's like, yeah, yeah, no, this is real fair. I said, okay, cool. Deal, let's do it. So no lease whatsoever, just a handshake. And he paid me $500 a month and we split utilities.

Well, my mortgage was $515 a month. Wow. So, yeah, I was winning big time. But I was fortunate enough that I was, you know, still working, well, getting my paycheck from the Army. And what I did is I said, you know what? He's giving me $500. I might as well just pay the additional $15 and throw in my mortgage payment as well.

So I paid off a 30-year note. I did that. And then when I had extra money here and then, I paid. I paid off that note in seven years. Whoa, okay. That's huge. Yeah. Yeah, you were basically doubling your mortgage.

That's exactly what I did. I doubled my mortgage every month. One payment was going straight to principal. And then periodically, if I got some extra cash, like a big bonus or something, I would throw that towards the mortgage as well. He stayed with me for about three years. And then that's when me and the wife got married. And I said, hey, man, me and the wife are getting married, you got to get out of here.

So that's when he moved out. and then me and the wife stayed there and she was working. So I said, hey, this is what I've been doing with the mortgage. And I think it'd be beneficial if we continue to do that. Because if we do, I think we can pay this off. And I figured about eight years total. And she's like, okay, let's do it. So she was technically the second roommate who came in and kind of helped me pay double mortgage on it. Well, I was just going to say, the fact that you paid it off so quickly, like David, as our resident mortgage expert in-house at Bigger Pocket. Kind of mortgage guy.

Kind of mortgage guy, yeah. That's a callback. That's a callback. I don't know if that episode is out yet. But as our kind of mortgage guy, why was he able to pay off that so quickly? Like, how does that math actually work out? That's a very good question. And I love Rick that you sort of stumbled bass backwards into like this awesome hack for paying off the house, right?

Which especially when mortgages were $500, we all went from you could go back in that time. It'd be easier to do it. But you would think that if you doubled your payment, you'd pay off in half the time. So a 30-year loan would you pay up for 15 years. But it's actually a quarter of the time. And it's because when you're first making payments, the majority of the payment is going towards the interest, not the principal.

Well, that $500 extra payment you were making goes a hundred percent to the principal, meaning that the next payment has more going to the principal and less going to the interest because you basically like jumped ahead in the payment schedule when you made the extra principal payment. And then that compounds with every single payment where a higher chunk is going towards the principal than the interest. So for those that are disciplined, this is a great way to pay a house off fast. Now, we haven't really been giving this advice the last couple of years because you're paying off a 3% mortgage. It didn't make a ton of sense. But as mortgages are getting to be expensive again, and the interest rates are getting higher, this is a legit strategy people can use when you can't

find new cash flowing properties to just take the one you have and make it more efficient. Oh, yeah. I mean, if you ever look at your amortization schedule at the end of the first year, you're going to see, oh, man, okay, I paid $15,000 this year in mortgage payments. and then you see that only, you know, $1,000 of it actually went to your principal, and the other $14,000 went to your interest. I mean, it's very much like that student loan amortization rate where you're just like, man, do I ever actually take down this principle, man? It hurts in those first couple of years. Yeah, but Rick, you kind of found out a hack there without realizing you did it. And I love that you told your wife, like, let's do it again. I don't know why that

works. It's just real estate magic. But, dude, if I just stick my hand in that magic hat, pull out another mortgage-free rabbit, let's go for it. So was she on board with that? Did you have a wife that was sort of on the same page with you when it came to financial independence? Or do you get some pushback because they weren't seen it from the same perspective? No, even when we were dating, it's really cool. So when we were dating, we'd go, I remember our very first date. We went to a movie and dinner, just like majority of people do, right, dinner in a movie. Well, dinner came.

I paid. When we went to movies, I'm pulling out money to pay. And she's like, no, no, I'm going to get it. And I'm like, I'm sorry. She's like, I'm going to pay for the movie in popcorn and snacks. I was like, why? She's like, well, you paid for dinner. And I was like, well, that was the first.

No girl I'd ever dated did that. You know, it was just common thing for the guy to pay for everything. So when that happened, and then we obviously switched back and forth, you know, but I knew she was going to be a team player. So, yeah, I know when I told her about, hey, look, you know, the roommate moved out. We're moving in together now that we're married. I think this is the best thing she can do. And she was on board.

She's like, okay, great. Sounds good. Let's do it. That's really cool. That's important, too. And that's why I always make David pay when we go out. But so it seems like what you stumbled on to here is just a good old-fashioned. house hack. You took your property, you subsidized a portion of that property, right, a room to a friend

to subsidize your mortgage. And really, most of the time when you do a house hack, you know, a rent, renting your room can chip away three or four hundred bucks at your mortgage. In this case, it actually paid for all of it. So this is just the magic of a house hack that not only did someone pay your mortgage, you continued to diligently pay that mortgage and he paid it off in seven years. That is a huge success story. I got to imagine that probably was a catalyst for the rest of your portfolio. Oh, definitely. I mean, I was 27 years old with a paid off house and I was like, whoa, this is not the norm. And honestly, I didn't know until maybe about 10 years ago that that was called house hacking. I didn't even know. I was like, whoa, I house hacked our first house and I

didn't even know I was doing that. Wow. Okay, cool. And so how long between buying this, this accidental house hack, if you will, and getting into your first flip? Because as I, as I remember, that's kind of your trajectory, right? So actually what we did at when we paid off that house, we stayed in for maybe another year and then I wanted to move to the other side of town. So I found a house on the other side of town. We bought that one. And then I full blown use the first house as a full blown rental.

So now I've got my personal house and now the first house is a full blown rental. And then in between that time frame, it was about, I'd say about seven, eight, nine. So at year nine, two years after paying off the first house, year nine, we're in our current home, we're at the homestead at the time, our second house. I saved up some money from the rent of the first house and saved up money. And then I just started looking and talked to a friend at church. He's a real estate agent. I said, hey, look, this is what I'm looking for?

He's like, what's the budget? And I said, man, honestly, I got like $20,000. So I don't even know what you're going to be able to find. He's like, let me see what I can find. We found a small one bedroom, one bath house. on a big lot in the neighborhood I grew up in. It was $23,000. And my dad is actually like my go-to guy. So nine out of 10 properties that I've bought, dad goes in there first and checks it all out. My dad's that inspector who does all that stuff for me. And he's not a true inspector.

He's just a jack of all trades and knows a little bit about a lot. So he'll go in there and check things out for me. Well, he did. And he's like, it's done it. The foundation is jacked here. And I was like, but he goes, but I mean, the man's actually living here. And it's livable. It just needs a little bit of work. You know, you can live in it like this. The foundation's Jack, but it's still livable. And like I said, in our neighborhood, that was probably the norm. So I was like, so is it worth it? He's like, I think it's worth it. Offer 20. I said, okay. So I told the realtor, hey, I'll offer 20. It came back. It's like, no, sorry, that's not going to happen. I said, okay, cool, no worries. Wait, $20,000. $20,000. Yeah, they wanted $23 for the house. You got a house for $20,000. $20,000. Let me finish. Let me finish. Okay. So remember, it's a one-bedroom, $1. bath about 600 square feet in a bad side of town and I offered 20 they went to 23 offered 20 they said no well then about two weeks later my realtor comes back and says like hey Rick he'll take the 20 if you can close before Labor Day and Labor Day was like 10 days away and I said okay well now I'm only

interested if he'll take 17 and I can close before Labor Day because I got cash in hand he's like dang it Rick oh man and I'm that guy I will because I'm like what's the worst they can say, no, then what I'm, I'm in the same position I am right now. So I'm totally that guy. So he calls me about the next day. He's like, all right, Rick, he said he'll take it. I'm like, let's do it. So we bought it, bought it for 17. Me and the dad went in there. We literally put lipstick on a pig. And then I rented it out. We put $3,000 in it. So now I have 20 grand in that house. And I rented it out for about $6.50 a month to the same person for about two and a half, three years. So you do the math. I recuperated my 20 grand from just the first renter. Yes, she messed it up. So now I have my other handyman in there because dad was a little too busy. So I have my other handyman in there fixing him some stuff. And he calls me. And he's like, Rick, some man just drove by and says if the house is for sale. And I was like, shoot, everything's for sale. Yeah. Tell him to call me. So he called me. And he said, hey, yeah, I want to buy the house. How much do you want for it? And I had never thought of selling it. So in my head, I just said, well, if I got 20,

in it, but I've already recuperated my 20 from the rent. Let me just throw 40 and see what he says. So I said, 40 grand. He said, I'll take it. I said, holy snap, I just flipped the house. Okay. You didn't ask you what he thought was fair? No, I didn't. No. He said, I'll give you 40,000 that I'll pay the utilities. And you like, man, I love to hear the story that you're telling here so far. I was just thinking like, okay, you paid 20 grand for a house, running for $6.50. Where are these 3% rule deals in today's market? Oh, my gosh. Yeah. So yeah, let me, let me get this straight. So it was listed for 23. You offered $20,000. They said, no, get out of here. A couple weeks later, they're like, hey, if you can close before 10 days from now,

we'll do the 20. You say, eh, I'll do 17. And they're like, we got to take it. And they take it. That's exactly what happened. Wow. And then how long ago or how long after that did you sell it for 40K? Three years later. Wow. Okay. So you doubled the appreciation, I guess, or the worth of the home doubled in three years. That's amazing. Now, this was before Zillow, right?

Yeah, yeah. This is way before Zillow. So you can't just go online. I think a lot of people are wondering, why would you do that? You had to call a realtor back then and ask them and they had to do some work. It wasn't like it was easy to just jump on a computer and find it out. So there's a couple patterns I see emerging. You became a landlord accidentally.

Your homie hit you up and was like, can I rent your room. Okay. I can. and that basically paid off your house in seven years, that one decision. Then you became a landlord accidentally because you ended up moving out and running out this house that you never had planned on running. We call that the sneaky rental tactic when you buy a house on a primary residence loan. Then you move out and you basically have a rental for like three and a half percent,

five percent down, whatever it is. Then you become a house flipper accidentally. You're just like, okay, I'll just double what I paid for this house. A couple years after I've already got my initial investment back in rent. You just accidentally fighting your way to the top of the bouncing man. And like, this is a pretty cool story. Well, I'm not going to. Yeah, it sounds accidentally, but I'm a man of faith.

And I prayed for this, right? I manifested it. I thought about it. I wanted it. Now, I never thought it would be reality. I'm going to be totally honest. From where I come from, the lifestyle I live now is amazing and I'm truly blessed for it. But I never thought it was going to be a reality.

But slowly, but surely, it was coming reality. That's amazing, man. Well, give us a little frame of reference here because I think if a math is correct, you bought your house and then about nine years after that is when you bought the next house. So how long ago was that from today? Like that second house? About 12 years ago. 12 years ago. Okay. And so that's really the beginning of when your real estate journey really kicked off. And you started blowing up your portfolio, right? Yes, that's exactly what happened because then I had, now I have this, well, technically I

had the 40, but I didn't. What I didn't mention is that when I called my realtor and said, hey, look, this is what's going on. I already got the deal. But I don't know how to fill out this paperwork. Can you help me? And he was like, yeah, for sure. I'll do it for like a hundred bucks. I was like, okay, cool. So he helps me fill out the paperwork. And then we go to close, they said, uh, he goes, the buyer's like, oh, by the way, can you owner finance it for me? And I'm like, oh, yeah, sure. 10% interest. He said, okay. And I said, and $5,000 down. He said, done. So I took the $5,000 and now I knew I was going to have the 40. And he did a five year note. He's like, look, let's be realistic. This is a car. This is a car note. So I don't want 30 years. I'm going to do a

five year note. So he did a five year note. So what I did with that $5,000 and then with some other money I had saved up, that's when I bought my first true flip. Okay. Okay. And so you're at this point, again, this is around 12 months ago, you're getting into the flipping side of it. Obviously, you're ramping up. Had you set any goals? Like, did you know what you wanted to do? Or are you just like, oh, I'm going to buy one and see where it takes me or buy another one and see where it takes me? So the goal was to have... Sorry, I said 12 months. I meant 12 years. Yeah, 12 years ago. Yeah. So the goal, and I still haven't written down on my notepad, because I'm a firm believer that written down goals get achieved more than just thoughtful goals in your mind.

but I wrote down that I wanted to have 10 rental properties by the age of 40. So that was the goal. But then when I made double my money on a flip, I'm like, whoa, whoa. Maybe if I do a flip, I can take all the money and then go buy a rental. So after that deal, I went and bought my first flip. It was a three bedroom, two bath, one car garage, and a nice neighborhood. Actually, like two blocks away from my very first house that I bought. So that house, it's the only house I've ever bought that I didn't share with my dad.

I didn't ask dad to go look at it because I was pretty sure dad was going to tell me not to buy it because it was bad. I mean, it was bad, but it was good at the same time. So the house was already gutted. It was all studs. So I'm like, okay, this is going to, and this is my very first flip. So I'm like, this is a big project, but I think I can do it. A hole in the roof.

Like I'm not holes in the roof. There's several holes, like sunlight just beaming in like car size holes, right? And I was for sure dad was going to tell me no. So I was like, I can't do it. But my realtor was like, Rick, this is a really good buy because the house was, they wanted 40 grand for it. About 1,400 square feet in a good neighborhood. They wanted 40 grand. And I told him realistically, how much you think this house will need? He's like, I think 35, 40 pushing it and you'll be golden. And it'll sell for 129, 139. I said, okay, great. I'm going to do it. So we did it. I told the wife, hey, look, this is what I'm doing. She's like, all right, let's do it. Well, I bought it.

and I end up dumping 50 grand in it because I and the professionals tell me to never do this, but till this day, I still do it. I overdo houses. I fix up houses as if I'm going to live in them. And people are like, why do you do that? Even my rentals, I fix them up as if I would live them. I said because if at one time, at any given time, if I need to move in it, I will feel comfortable because I fixed it up the way I like things and the way I like my environment.

So I went over budget 10 grand on that deal. And the whole time, my realtor's guiding me and helping me right because I'd never done a true flip. Well, I was watching those home improvement shows where they do the flips and then sell them. And one Sunday, me and the wife just, you know, just sat on the sofa all day long watching those. And I said, you know what? One of them, they did an open house, but they had a moon jump for the kids. They did mimosas for the ladies. They did beer for the guys.

I told the wife, you know what? I'm not going to use a realtor to sell this. we're going to sell it on our own and we're going to do exactly that. I call my realtor and I'm about a six, not about a month away from finishing up, call the realtor and tell him that he's like, Rick, please don't do this to me. And remember, this realtor is cool. He goes to the same church. I've never signed an agreement with him.

It's always just, we shake hands and we trust each other with it. And I said, look, if I owe you anything for your time, let me know and I will pay you. I said, but I think I can, I think I want to do it on my own. He's like, Rick, give me seven days. If I don't sell your house in seven days, then the deal, you can do that. And I said, you know what, that's fair. I'll give you seven days. So I gave him seven days.

And then he actually called me on the following Sunday, which was Father's Day. He says, hey, Rick, happy Father's Day. I said, thanks. Same to you. He said, you ready for it? I said, what? He's like, check your email. Check the email.

He had a signed contract for the house for 149. Oh, wow. Okay. So 20,000 over your low end, right? Because 129 is what you were the baseline. Yes. Wow. And do you think that's because?

the market was just really good at that time, or do you think it's because you actually splurged and over designed it, if you will? He told me it's because I splurged and over designed it. Because that neighborhood called for like Femica or like butcher block type countertops. Well, I went level three granite, you know, I put, you know, camlights. I did a bunch of cool stuff that shouldn't have been done in that neighborhood. But he said ultimately that's what sold it as well.

Man, yeah, this is what I'm, why I'm so scared of taking on flips. at a large scale because I am the person that splurgeon, David can attest to this. Like, we would probably make a great HD TV show always fighting about the budget. But I would so over-design everything. David, are you ever in that situation? Are you, like, very good at staying on budget with your flips these days? Yeah, that's a great question. I don't splurge nearly as much as it sounds like either of you do.

But I think if I do splurge is probably on different things. So I'm more likely to add, like, score footage to a house, than to put really nice light fixtures in. Or like, Rob, I've noticed that you, you look at real estate from the lens of how is this going to look at the photo. So you'll splurge on furniture. You'll splurge on furnishings. You're like, look.

And I actually just thought of this yesterday when I was walking through our house in Scottsdale. Like, I think I get it. I look at it like practical use. What's the most efficient use of the space? Like, you're looking at it like, how's it going to look in the picture? Because that's what makes people book it. And it is money. It's not like emotional immaturity.

It is a short-term rental investor. That is the way you have to think about it to get it to book. So that was actually a good little insight for me because I think before I just assumed it was, oh, you just like nice things and so you spent too much money on it. But there is a financial reason why you look like that. And Rick is a good example too where when you overspend on a rehab in a hot market, sometimes you could get bailed out. You definitely don't want to do that when the market's on the way down.

But Rick, was that just your personality? Like, I see you're wearing a hat that says honor that craft. And you mentioned you're a barber. And I know you're really serious. Is it just who you are as a person that you believe you need to do your best that everything that you do? That's exactly what it is. Yeah. I, man, I just can't, I can't settle for anything less. And it's just built in me. I yesterday I was flying home walking in the airport and I saw someone accidentally or maybe not accidentally drop a napkin. And I'm like, you should be. pick it up. You should pick it up. You know you're going to pick it up. I walk past it. I said, I'm not picking it up. I didn't drop that. Two feet after walking past it, I turn right back and

pick it up. Yeah. Yeah, I feel that. The voice of God can make to you to pick up that napkin, man. You just can't resist it sometimes. And that's when you read the plot to lethal weapon and you made the movie. You know, they always say that movie is made on the back of a napkin. All right, we can move on. No movie buffs anymore? Has cinema died? Never heard that one. No? Okay. But thank you for explaining the joke. I appreciate that. Well, maybe somebody will laugh. All right. Maybe someone in the large bigger pockets audience will laugh. Okay, so after this, you're obviously like you're very, you're budding, you're a budding real estate entrepreneur in this time. It seems like you're relatively got a knack for it. You're pretty good at it. It seems like

you're, you're passionate about it. You want to keep doing more. Was there any why that was driving you? Was there any, what was the reason for pursuing real estate more? Yeah, definitely. So there's a verse in the Bible, Proverbs 1322. And it says, a good man leaves an inheritance for his children's children. And I take that to heart. And I know what biblically, it's meaning like, hey, make sure you tell your children about me, about his ways and to honor his book and the Bible and things like that. But I take that literally as far as finances and and, and housings and properties and things like that. So that along with not having grown, well, not growing up without air condition, That is my driving force. My goal in life is to make sure that no Mourin that comes after me

ever has to live in a house without air condition. That's beautiful. I love hearing that. I mean, that's a powerful why. And what I love about that is it's not going to drive you to get into materialism. You're not going to over-extend yourself. You're not trying to keep up with the Joneses or prove that the only champagne I will ever drink will be Cristol for the rest of my days. it's a very healthy goal that's going to stop you from taking your eye out the ball and losing focus, but it's not going to make you make foolish decisions that could jeopardize your children's inheritance. Everybody has to be able to sleep with air conditioning. That's a beautiful baseline.

Did you come up with that? Did you sit down one day and just say, this is my wife? Or did you kind of look back at what you'd been doing and just realize that that's what had been driving you? Was that pain in your shop? Yeah. So the Bible verse has always been there probably the last eight. to 10 years. It's been my go-to. The why with the air condition, yeah, I think that was, as I was looking back over the last couple years, I was like, man, like the goal was to have 10

rental properties by 40. I hit that at 37. Me and the wife hit that at 37. And she's like, well, what now? And I'm like, well, we'll just keep buying more. And she's like, well, how many more? And I was like, I don't know until we just can't buy anymore, maybe one a year, two a year, you know? And then she's like, why are you so persistent about this? I thought, 10 was the goal and then you'd be happy and satisfied. And I was like, no, 10 was the first goal. There's obviously multiple goals. And then looking back, I was like, you know what? That's exactly what it's why. I want to make sure that my great, great, great, great grandchildren who I'll probably never meet will be able to hopefully my, my, my errors would show photos of me and the wife.

And like, these are the two murines that literally changed our generational finances because they sacrifice and they busted their butt, we're able to live in a house like this. Yeah, man. Well, can I ask you a personal question? Because my dad, very similar, you know, immigrant for Mexico, gave up a lot and did not grow up with air conditioning either. We had air conditioning and you never let us turn it on growing up. So what do you keep your air conditioning at now when you go to sleep?

69. Yeah, baby. That's me too. 68, 69 here in Texas. All right. I just had to get it out there because I want to know. Yeah. That's true goal right there, right?

Like, not just having the air conditioning, but turning it up, go to sleep. It's a big deal here in Texas. Well, 69's not that bad either. Like, you still learn to wield this power that you've been given where you have air conditioning, but you're not running all the way down to 62 and going overboard. You're still handling that responsibility well. Yeah, definitely. For decades, real estate has been a cornerstone of the world's largest portfolios.

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With great air conditioning comes great responsibility. So let's recap this. So you buy a house, accidental house flip or accidental house hack, then you turn that into a full-on rental. You get another house that becomes an accidental flip. And then you sort of decide to go into another full-on flip that you make pretty good amount of money on at 149. What comes after that? Do you just go all in on long-term rentals or do you start experimenting with other real estate asset classes? Yeah. So from then on, we bought

long-term rentals with the profits of that second flip. I went and bought a condo, one-bedroom condo because I'm telling you, my reasoning sometimes have no backing. So I just sold that three, the three bedroom two bath flip. The very next day, one of my friends slash customers, because remember I'm a barber, hits me up. He's like, hey, Rick, do you have any rental properties right now? I was like, man, I don't have nothing open. What are you looking for? He's like a one bedroom. I was like, all right, let me see what I can find. Give me a week. He said, okay, I need to move in like within two weeks. Call the realtor. Say, hey, you know any one bedroom's going up? Probably a condo or something. He's like, hey, actually, I just listed one yesterday. Yeah, for sure. So dad goes over there,

checks it out for me. He's like, yeah, the only thing carpet's trash needs to be replaced, put some vinyl in it or something. I said, okay, cool. So that was a super cool one because it was a cash deal. So I tell the realtor, okay, I'll take it. And he's like, okay, they'll accept it, right? Full asking offer or whatnot. I said, but here's the thing. This was on Monday. I said, I need to close by Saturday. He said, why? I said, because I fly out of town to India on Friday and the renter needs to move in on Saturday. He's like, holy smokes. Let me see if I can find a title company to make this work. He found one. Made it work. Friday, I went and closed. Went to the airport, jumped on a plane. And then he took care of the rest of the deals. I say, hey, get with my friend. Make sure to sign

the lease with him and get them the keys, everything like that. So yeah, so then we bought that long-term rental. And then I'm a huge saver. I'm a huge saver. So I just, I literally save like 90% of all rental incomes. So now that I've got a couple long-term rentals going on, the money stacks very easily. So then once it stacks to a certain amount and I'm just in the market looking, I find a house within that price range and then I just go buy another one. Cool. And so how are you finding them? Like, do you have a pretty good deal pipeline just rocking and rolling at this point? So yeah, well, at this point, yeah, there's about three or four realtors who hit me up every so often. But I tell them, guys, honestly, I'm not looking for on-market deals because on-market

deals is retail price. Like, I'm looking for something that's on sale. So there's a couple wholesalers that hit me up every so often. And then I, the most recent deal I just found, I, I, I, it was via realtor. We went and looked at it. They didn't accept my offer. They accepted someone else's offer. So I was like, all right, whatever. Well, it was in December. And I told the wife, man, that got me, like got that fire under my butt. I want to buy something now by the end of this year. And she's like, well, what are you going to do? I was like, I just went to Facebook. I just went on my Facebook page and said, hey, guys, I got this much money. Anyone have a property they want to sell or know if anyone want to sell something. I'd like to

close here within the next two weeks. And an ex-neighbor of mine had a duplex and hit me up. And he's like, hey, Rick, I think I want to get rid of the duplex. So yeah, I closed on that duplex with him within 10 days. And so I bought that one last year in December as well. It's kind of cool how when you become a real estate person, right? You're like the one person in your network or in your group of people. And they know you for that. Deals just find you. Right. Like you obviously have to work for that at all times for consistency, but it's really cool how deals can just find their way across your desk, right? So I understand you make your own comps. We were talking about this earlier before the podcast. Can you explain what that means? Yeah. So remember, the neighborhood I grew up in wasn't

the best, but they were big houses because in the early 1900s, that neighborhood was the original country club for my city, for Corbis Christi. So there were some. 5,000 square foot houses in that neighborhood. The house I grew up in was about 1,600 square feet. But then the house on the opposite corner, literally the same street I grew up on, Brooks Drive, went for sale, foreclosure, actually. But I knew that house has been empty for like two or three years because I go visit mom and dad and drive by it. And I never really seen anyone there. And I knew the family who lived there. And they weren't there no more. So I buy that house. And the realtor tells me, Rick, how much do you think you're going to sell this house for? I said, I'm going to sell it for over

200 grand. He's like, it's not going to happen, Rick. And I was like, no, no, this house, this square footage of this house, this is a 2,400 square foot house with a two-carred detached garage and a 300 square foot man cave slash she shed in the backyard on a corner lot, huge. I said, I'm going to sell it for over 200. He said, Rick, no house in this zip code has ever sold for over $200,000. So I go with the different realtor. He tells me the same thing. I said, so what do y'all tell him? They said, Rick, we think you didn't buy goodbye because that house needs so much work. You'll probably just going to break even. And I said, well, if all else fails and I break even, I'm okay with that as well. Why? Because I fixed up the neighborhood that I love, the neighborhood I grew up in. Well, long story short, I fixed it up.

It was probably the worst flip I ever did. Not necessarily the condition wise, meaning it took me two and a half years to do it because I got screwed by three or four contractors, you know, and that will for like 20 grand. So at this point, I'm like, yeah. How long should a flip take, by the way? Well, I think it varies on the square footage and what all needs to be done. But that first flip I did that was all studs, that took me 12 weeks. Okay. All right. So two and a half years is considerable. Oh, yeah, definitely. I was telling myself that this flip was going to take me four to six months and that was pushing it. Like that was extremely a long time up. The goal was three to four months. Okay. Okay. And so you had ran through a few contractors. So then I finally get it

done. And but here's the cool part. While I'm fixing it up, and this is the only house I've ever done that to, I think because I had an emotional attachment to it because it was my neighborhood. While I'm fixing it up, I'm taking a picture of the outside. Hey, guys, we just put new siding on what color do you think we should paint the exterior of the house? And I'm getting like 50 to 120 comments, right? On social media, just, oh, I think this is going good. This is going good. And then I'm like, hey, I'm thinking of painting the cabinets,

bottom gray, top white. What are y'all's thoughts? You know, and then people are giving me a bunch of comments. So the whole process I'm giving my supporters on social media the options of, hey, what do you all think I'm going to do? A or B. And whichever one, literally, whichever one went with the most votes, I was like, all right, we're going to do that.

And the wife's like, you are nuts. And I'm like, I know, but this is super cool, right? Because I like both of them. So it's not a loss with either one we go with. So long story short, we get it done. Right about two weeks before I get it done, I'm still, once again, posting on social media. And I'm posting, I'm posting, I'm thinking price point of this point, this point, this point. Well, I'm like, all right, guys, how should be finalized within the next two weeks?

229 is what I'm thinking. Here's all the details and here's some photos of the work that I've been working on before it was completed. Well, then a child, a friend of my sons, my son and his and his friend, they've been playing football on the same football team since they were six years old. They're 11 now. So we've grown to love his parents, right? Because they're like friends of ours now. And she hit me up and she's like, hey, Rick, I think we're going to want the house. And I'm like, oh, that'd be great. She's like, would you, what's asking price? I told her. And she's like, okay, let me talk to the husband. Let me talk to the bank. Came back. And she's like, yeah, we

want it. I'm like, like, for real, for real? She's like, yeah, we want it. I'm like, heck yeah. So I ended up selling it for 229 and I was the first person or slash first house in that zip code to ever sell for over 200 grand. Wow. Okay, that's a big deal. So the, you talk to two realtors. You told them that you wanted to sell it for 200. Is that right? I told them I was thinking about 209 to 219. Okay, 209 and they're like, you're crazy. I'm sorry, this is a bad deal. You're like, you know, probably a little bummed about it, but you go out there, you do the social push. Someone actually agrees to buy it for 229, so you actually superseded that goal. So all along the way, you're just kind of crushing your own goals, right? Yeah, definitely. And the crazy thing is,

is after I agreed, and once again, there was no contract involved at the time, but they're personal friends and I agreed, yeah, we're going to do it. Someone else hit me up and said, Rick, I'll give you 249 if you take this deal. And I'll take, holy crap. And I'm like, man, If it wasn't these people, because I love them so much, like I said, their family now, I said, I would do that deal. But I can't, man. I said, this is a family that we love and cherish. And no, I don't want to give their hopes up.

Do you lose a little sleep, though? Were you, that night where you like, dang it? Not at all. No, no, not at all. That's the answer I was hoping you'd say. So all while you're doing this, you're still working as barber? Yeah. All right.

So let me ask you about that, if you don't mind. Why keep working? You're making money with real estate. isn't the dream to get a couple houses and then quit and do nothing and just go to the beach and drink my size? Why were you still working at this time? It's funny you say that because that's what I told the wife. When we get to 10 houses, I'm going to stop cutting hair and we're going to just live off, you know, the rental properties. Well, when that happened, I was like I said, 37 at the time, she said, so you are you quitting?

And I said, no. And she said, I thought you said, you didn't quit. I said, here's what I'll do. I'll only cut hair two days a week. I'll just cut here two days a week. I said, you know, five days, you know, two days, family day, three days working on real estate projects, you know, paperwork, things like that. Now, some of those days I do travel, like I said, I work for a clipper company and we travel the world and teaching barber classes. But I'm only in the barbershop on average two days.

Some weeks is only one day. And then depending on travel and vacation, sometimes I'm not in the shop. But on average, I'm at least in the shop six days a month. So why am I still in the shop? because I love cutting hair. Like, I've been a licensed barber for six, this year makes 16 years and I seriously do not feel as if I work. Even when I was in the barbershop, 65, 70 hours a week, I didn't feel as if it was work because I truly enjoy what I do. I make connections with people. I meet people. I cut their hair.

I make them look good. And at the end, they give me money. And I'm just so blessed with that opportunity because not only that, When I first started cutting hair, I was charging $12 a haircut. So $12 haircuts allowed me to buy my first rental property. So I feel on top of loving what I do, I feel as if I owe it to barbering. It's my way of paying homage to the industry that allowed me to change my family's legacy. That's really cool, man.

So are there any actual, like what are some of those skill sets that you got from being a barber? and running that business that have helped you succeed so much in real estate. I got to imagine there's probably some parallels there. Yeah, I'm going to say like management skills, right? Because I own the barbers. So being able to manage barbers and clients and things like that. Because, I mean, the whole, the worst thing about flipping a house is dealing with contractors. That's the worst thing of all.

And, you know, it was so funny because one day, it was actually when I was doing this, the house that I just told you that we sold for over 200. I got so bummed with that house. The third contractor I got screwed over with, I told the wife, I'm done. We're just going to sell the house. Even if we take a loss, we are so done. And then I listened to a podcast when Brandon was on. And Brandon just so said, you guys want to know how to deal with contractors?

And I'm like, yes, yes, I do. I want to know how. And he says, they all suck. And I'm like, oh, crap. Okay, it's not just me. This guy's in Hawaii. And they suck out there too. So that got my hope stuff.

I showed it to the wife and I said, look, they suck everywhere. We just got to deal with it. We're going to make this work, right? That's a big piece of real estate, I think. Sorry to interrupt you, but a lot of people think they're doing something wrong because they can't buy a cat, fooling deal or stuff falls apart in the house that didn't anticipate or the contractions don't get the job done and they think that means it there and bad at it when really everybody has these problems, but nobody wants to make a TikTok video to get

a bunch of people to pay for a course by saying, let me show you all the ways I screwed up with contractors. But that's the reality of what everybody's doing. Yeah, definitely true. So yeah, that and then being a bar, and here's another reason why I love being a barber. One of my, houses that I found was via one of my customers. We're small talking. He's like, hey, Rick, you're looking to buy another house. I was like, man, if the opportunity is there, I'm always looking. He's like, hey, my aunt's selling this one, you want to go check it out. I was like, sure, I end up striking to deal with that. Um, you know, my plumber, you know, great guy. I don't cut his hair, but I met him via a barbershop, you know? So, I mean, it's just the connections. It's the

networking, the connections that I make with people via barboring that allows me to, I feel, be successful in real estate as well. Okay. So your portfolio is at Stance today. You have nine long-term rentals, one commercial building, in two short-term rentals, right? Correct. Okay. And so of your total portfolio, can you tell us what is your portfolio net worth and what is the net passive income? If you don't mind disclosing those details. Yeah. So it's a net worth's about three million and passive income. Nice. Passive income is about 275 to 285 a year. That's amazing. So you really, you went from barber to millionaire by really just consistently investing. You started small. You were going slow. Boom. Acquiring property is just absolutely crushing it. And somehow you were also able to

really marry the trade of being a barber and a real estate investor and using those skill sets that you built through just years of that trade. That is an amazing story, man. Yep, exactly. Yeah, for sure. It didn't. Here's what I tell a lot of people like, this isn't a, this isn't a sprint. It's a marathon. Like, like, I hate running. When I got out the army, I haven't ran a day since I got out the army because the army made me run all the time. I walk. I'm like, no, I'm a walker. I walk three miles every day. And that's about it. I hate running. Rick, I want to ask you, when people come to you and they hear your story, of course, they're going to say what everyone says.

You're saying, I want to do this. How can I do this? My opinion would be, many of them are not ready to manage a portfolio because they're not managing a business. They're not managing their own lives. They think that they're going to go from a lot that's chaos into managing potentially millions of dollars of assets. And it doesn't work.

They don't have the ability to manage the things that you're doing. Is that the same perspective you have? or do you think that people can get into real estate, buy a lot of houses, make money in it if they don't have an experience like what you had with the barbershop? I see both sides of it. I would agree with your first statement that, yes, that was very beneficial for me and helped me. But I do think they can. It's just going to be a little bit more organizational management that they're going to have

to learn in the process of buying the real estate. So maybe I see buys you give to people that are aspiring investors. It's not just analyzing the deal and closing on it. There's an entire element once you're done of actually managing this asset if you wanted to stay profitable that people need to understand. Definitely. Definitely for sure. Well, that's fantastic, man.

And I love the fact that you did this slow. That was a great line. This is a marathon, not a sprint. It does not help you if you start a marathon racing as fast as you can right out the gate, shooting to the front of the line just to run out energy and get packed up by everybody else. And then you can't finish the race at all. The best wealth, at least my opinion, it sounds like yours too, is well. that is built slowly and consistently and as boring as you can possibly make it. Do you have any other

advice for our listeners who are inspired by your story and want to follow in your footsteps? Yeah. That's what you state is exactly right. Once again, it's a marathon, not a sprint. Don't compare yourself to other people. And live life the way you want to live life with real estate. If buying two properties changes your life because now you'll never have a car payment because the pay that and that's all you want, then stick with it. Do it. If you want 10 properties or 15 properties because you want to retire your wife or you want to physically retire from your 9 to 5 because you don't love it and you don't like it, then go for it and do it. But if it takes 10 years, you know, don't get, don't get upset. Just stick to the grind. Keep walking. Keep walking

and you'll get it. That's cool, man. Well, what's next? What's on the horizon for you, Rick? So after we got the portfolio we have now, I told the wife, you know, I want to obviously continue sharing my knowledge with. And I've got a barbers and stylists are big in my heart because they make a lot of cash. A lot of cash. We're a cash industry business, but because they make it quit cash. Most barbers, you know, they're young 24, 25. I said, if I can share with you to do what I did at 25, I said, when you become 40, you're going to supersede me. I said, that's what I'd love for you to do. So I want to. I want to share with you. I I'm going to continue to share my real estate advice and coaching with barbers and stylists and obviously anyone who listen. I'm going to continue traveling the world with the clipper company I work for and sharing barber techniques as well because it's something I'm very passionate about. And I'm going to continue to keep buying property. When we hit the goal of 10 in about eight years or whatnot, the wife said, what now?

And I said, we'll buy one every year. She's like, for when? I said, forever. She said, one a year? I said, yeah, that's very doable. One year is very doable. If I live on average, I think men, statistically, men live to be 78. I'm 40, so that's 38.

That means when I pass, we should be able to have at least 45 properties total, you know. So, I mean, that'd be a great inheritance to leave towards my three children. I love it, man. I love the story. Well, thank you so much for sharing it, man. This is, I think it's going to be very inspirational for everybody at home listening. If people want to reach out or if people want to connect or find out more about you or learn, learn, learn from your teachings here, where can people find you online?

Yeah, on Instagram, it's the people's barber. So it's D-A, people with an S, and then the word barber. How much did you have to go back and forth deliberating between people's with an S or people's with a Z? That was not the deliberating part. The deliberating part was the versus the. That was my follow-up question. You beat me to it.

That's exactly what I was thinking. That's good. Rick, do you have a bigger pocket profile by chance on the website? I do not. Would you mind doing me a favor? making one. Yeah, for sure. Yeah, you'd be a huge asset toward committee there, man. I'd love to see you on the website more. So everybody here, please do go follow Rick and then look him up on bigger pockets, Adam there. You are a gem of an investor, man. I really appreciate your time today.

You've shared some great things. You've kept the level head on your shoulders. You brought your wife along with the journey instead of finding with that person. You teamed up with that person. Doing it by faith and then just doing it slowly was awesome. So thank you for being on the show. Rob, do you have any last words before we get out of here? No, man. Very inspirational. Very, very, very inspirational. And if I'm ever in Corpus Christi, I will hit you up. Yeah, man. We'd love to have you on again, Rick. So let's make sure you stay in touch, man. Appreciate you. This is David Green for Rob Abby Avisolo. Signing off.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.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

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