BiggerPockets Real Estate Podcast - 8 Rental Units in 2.5 Years (While Working 6 Jobs!)

Starting point is 00:00:00 Have you thought to yourself, it's just too hard to invest in this market? Or maybe you're thinking it's too late. I've missed all the good deals. Or maybe you're thinking reaching financial independence is impossible with high interest rates. Well, in today's episode, we're going to hear a story that will make you believe that investing in real estate and reaching financial independence is still possible even in 2024. Hey, everyone. And happy Monday.

Starting point is 00:00:32 It's Dave. Welcome to the Bigger Pockets podcast. where we share real estate investing content every Monday, Wednesday, Friday. So make sure you hit that follow button on your favorite podcast app and never miss an episode. In today's episode, we're talking to an investor named Brandon Tilson, who is a social worker by day and has many, many side hustles by night. And one of them, of course, is being a real estate investor. And with Brandon, we're going to discuss how he's created a strong cash flowing portfolio on a short time around. He just started a couple of years ago and is buying cash flowing deals.

Starting point is 00:01:08 We'll also talk about how he's working to achieve fire in just the next seven years so he can retire early to spend more time with his family and playing video games and how he's growing capital to invest in real estate despite having a job that's frankly on the lower end of the income spectrum. Brandon is an awesome investor. He's got some great advice for everyone. So let's bring him on. Brandon, welcome to the show.

Starting point is 00:01:33 Thanks for joining us. Thanks. I'm super excited. Me too. Let's start with the beginning here. When did you get started in real estate investing? So me and my wife, we started investing probably about two and a half years ago. All right.

Starting point is 00:01:46 So that's pretty recent. I am very eager to hear how you got started in the last two years. But tell me first, just what motivated you to get started in real estate investing? So basically, ever since I was like 18, like I knew I wanted to invest into real estate, but I didn't really know what that looked like. I just knew that like you kind of buy some properties, people, pay rent and you kind of just make money somehow. That's not it. I thought that's, I thought that's all you do. I grew up kind of like HUD housing and food stamps poor with like a single mom raising three

Starting point is 00:02:13 kids by herself. And I just knew there was more to life than just like taking one to two vacations per year. And I wanted to retire early. I wanted the ability to spend more time with my kids. And I just knew I had to do something outside of like the nine to five grind. Like I wasn't going to be able to survive and live the lifestyle. I wanted to live working nine to five. Wow, good for you. well, it sounds like you're well on your way. Brandon, tell me a little bit more about what led up to that first investment. Because it sounds like you did the HELOC two years ago and we'll dig into that deal. But did it take you some time to like build up to it or were you educating yourself for a while about finance or did you just jump in with that first HELOC?

Starting point is 00:02:53 So basically, I kind of lived the Dave Ramsey lifestyle without even knowing who Dave Ramsey was. Like I had paid off my student loans. I had paid off my car. I had paid off my house. I had zero debt. I have a credit card that I put everything in my credit card every single month. And then I pay that bill off at the end of the month. And basically I get the free cash return from that money every single month, which is usually about a couple hundred dollars. And so we put all of our bills on that credit card. And then I just knew that it was going to be real estate. I just didn't know what that looked like or what that meant. And so once we started educating ourselves and like I was on board right away, like I knew this is what I wanted to do. My brother had told me about big. her pockets. So I'd started listening to all like the rookie real estate episodes. And then I say that like I graduated. And then I started looking to like to, or listening to like the main episodes. I had got a couple of Brandon Turner's books and read like his, his first two books that he had wrote. I had got those.

Starting point is 00:03:48 And then it just took some time to like convince my wife and really get her on board with like, this is what this process looks like. And this is how it could change our family forever. And so she was okay. She was kind of one of those people like she was okay with just having a little bit of money in the bank and taking your standard vacations a couple times a year and just moving forward and retiring at the ages of 65. For me, I just, I wanted more. And so real estate was the avenue that was going to give us more. Very cool.

Starting point is 00:04:13 Well, I am very impressed by your perseverance. Brandon, tell me, like, what do you do full time? It's more like which one. So for me, I always joke with my kids that I have like six different jobs. So I'm a primary ACT case manager. So I work in the mental health field in second. Michigan, which is one of like the most dangerous cities in the world. And so I primarily spend 90% of my time in the community with that job. And I probably work about 45 hours a week there. And then I

Starting point is 00:04:43 carry an additional case load and our other case management program there. And I get paid a per diem based on my productivity in that program. Then I work inside a covenant ER and I screen people for crisis for nights and weekends to determine if they need inpatient hospitalization or if they just need like resources on how to follow up with either like substance abuse or like mental health outpatient. And so I do that anywhere between eight to 30 hours a week, just depend on the week. Basically, we cover for the full-time staff when there's an opening in the schedule. Then I have my real estate license. I got my real estate license about six months after I started invested into real estate because I wanted to be able to get into properties when I wanted to see

Starting point is 00:05:26 them. And I also wanted to be able to get the commission. No point of paying somebody else for doing the work. Well, I guess I wasn't paying them. but you know what I mean. I might as well take that commission myself. So I went and got my real estate license. And then we self-manage all eight of our units. And so we don't pay anybody to do that. So that's additional responsibility.

Starting point is 00:05:42 But my wife does like 80% of that. And I just really make the big decisions. And then the one that everybody laughs at and makes fun of is we started social media accounts for our two boxer dogs. And so we have Bella who's about two years. And then Bowser who's like 10 weeks. And so far in about five months, we've made like $2,500 just starting out. Wow. covers the food, right, at the very least.

Starting point is 00:06:04 It does. It's just all about the grind. And we started out doing that just because it was something, because me and my wife worked so much just doing different things. We wanted something that we could do together that we would enjoy outside of the real estate stuff. So we started doing this and it's like, okay, we're making a little bit of money here. And as the accounts grow, we'll make more and more and more.

Starting point is 00:06:21 Well, good for you. And Brandon, it sounds like what you do, let's say full time. I would count your 45 hours a week as full time. It's very important work, but also pretty stressful. Is that one of the reasons that you've been pushed into real estate? Or are you passionate about what you do? I mean, I enjoy the work that I do, but it's incredibly draining. My wife's also a social worker.

Starting point is 00:06:43 So, like, that was part of the reasons that we bonded and we were able to bounce ideas off each other and stuff like that, was because we understood the stress of what that job retains. And so when we found another avenue, it basically all came down to what's going to allow me to retire faster. Like, if I'm going to focus on social work, I'm going to have to do that for another 40 years. And I don't have that in me. And real estate is the thing that can provide that passive income that's going to allow us to retire early to spend more time with the kids and take more vacations and just be able to manage from wherever we want. Like if we want to move to Florida, we still can self-manage our properties here. I can't do my social work job from Florida or California

Starting point is 00:07:22 or wherever it is I want to go and visit. Well, Brandon, it sounds like you're thinking about it the right way. And congratulations on getting started. But I want to ask you, about getting started because we're recording this here in August of 2024. So two years ago, that would put us in the summer of 2022, which is an interesting time to have started in real estate, right? Like, were interest rates already on their way up at the point you jumped in? So when we got our HELOC, it was right, our HELOC was right before interest rates went up. So our helock was at 3.25. And then things started going up quickly. Our first property, I think, was like 4.25. Our next property was like 5.6, and then we got up until like the sixes. And then like our last one was like

Starting point is 00:08:08 6.675 with like a thing, a point and a half or two points, something like that. So you've done it across different interest rate environments over the over the last couple of years, which is super impressive. I'd love to just learn more about that first deal. So tell me, you took out a helock, which for anyone who doesn't know, that just stands for a home equity line of credit, it means that Brandon has a primary residence and he's able to borrow against it. Why did you use a HELOC instead of applying for a regular mortgage? Yeah, we did a cash out refinance originally and now we have a HELOC on it also. So we've done both.

Starting point is 00:08:42 And so the reason we did the cash out refinance is because cash out refinance to me shows commitment to the cause. We were committed to investing into real estate and that's what we wanted to do. and that locked us in at a lower interest rate at a 30-year fixed-rate mortgage. We do have to take a quick break, but if you're looking for more real estate deals like Brandon, make sure to visit biggerpockets.com slash agent finder where an investor-friendly agent can help you. I have an uncomfortable question for you. If your rent collection drop to 80% next month, how long would your cash flow hold up?

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Starting point is 00:13:04 All right. So let's dig into your first property here, Brandon. How did you finance it? And where is it? First, actually, let me just ask you. Is it in Saginaw? No. So I won't invest in Saginaw. It's because I work there. It's just there's too much of a risk there. But no, my first property is in Graswick County. It's actually in Elma. And that's our primary investing area. My geography is bad. Is that driving distance from you? So it's about 13 minutes from my house. Oh, okay. Okay. Great. So it's still considered local investing. Yes. And so basically we have a rule of thumb. We basically try to invest 30 miles from our house. So if you just draw a circle around it, that's where we focus at. But our original, we got started. So we went back and forth between like

Starting point is 00:13:46 a cash out refinance and a helix. We really had to educate ourselves between the two differences. and because we are committed to the cause of investing into real estate, we decided to do a cash out refinance of our primary residence. It locked us in for 30 years at a fixed rate mortgage at 3.25%, which I think if we would do the he lock, it would only have been locked in for, I think, it's five years, and then they could change the rates and stuff like that. We didn't want to have to worry about that.

Starting point is 00:14:13 We knew that we were going to spend this money, and we knew that we were going to start paying on it right away. So we just wanted to jump in with, both fees. So that's why we decided to go with the cash out refinance. Makes a lot of sense. I think it's very wise. And what kind of property did you target? Is this a long-term rental property? Can you tell us just some of the details, maybe what you were looking for, price point, cash flow you were generating? So when we first got started, our first deal was just an absolute train wreck. Oh, no. My realtor at the time,

Starting point is 00:14:45 which is now my broker, brought me this deal. He said it's off market. He's like, I think this would be really good for you. Mind you, my broker owns like 110 doors. And so he's been a pretty good mentor for me to help me out when I've had questions. And so we get this property and I'm thinking, cool, we got it for like 64,000. It needs quite a bit of work. We estimated it like five to eight grand worth work. We're going to go in there. We're going to do all this stuff. And it just, it failed miserably. I got in there, went to start laying flooring, realize I don't know what I'm doing. We had to replace the cabinets, realize I don't know what I'm doing. So at a certain point, we got super frustrated. Me, my wife looked at each other.

Starting point is 00:15:20 And like, this isn't for us. Like, we probably should quit. What do we do? Like, I can't do this. And then I started thinking, like, what are my strengths? Well, I grew up with a single mom. So hammer and tools and stuff like that are not my strengths. But my strengths are my ability to work with people.

Starting point is 00:15:34 I'm a social worker. Again, I have very good people skills. So if I can focus on what my strengths are, I can do that. So I started looking around. It's like, let's build a team. Let's build this team of people that can help do these things that I don't have the skills to do. And so we actually had a contract. on the books to replace the bathroom in our primary residence.

Starting point is 00:15:53 And I was like, hey, I wonder if we call him and say, hey, can we keep this slot, but slide it over to the rental property and not do our house? So we moved that contractor over to do all this work in the property. And then they did that work. They basically replaced. They completely redid the kitchen. They did do very small bathroom stuff. They put like a new vanity.

Starting point is 00:16:12 And we did some painting, just cosmetic stuff. And like originally it was right around like $15,000, I think is what it was to do the rehab. And then like we eventually had to replace the windows, then we had to put gutters on it and just do everything. And it ended up being like $25,000. So we went from like $5,000 to $8,000 to $25,000 in a hurry. And so it kind of changed our whole perspective. But I would buy that house all over again, because that was the experience that got me started to learning like, Branden, you really need to educate yourself. How much does it cost to replace windows? How much does it cost to replace flooring? So now when we walk a property, I basically, my wife either has her phone pulled up or we carry in like a piece

Starting point is 00:16:48 paper and we'll be like, this is this amount. The counters are going to be this amount. The bathroom's going to be this amount. And so then when we're looking to put our offer in, we know exactly where we feel comfortable at because we know what the rehab is going to cost. This is an unfortunate story, Brandon, of course, but a really important one, I think, for our audience, because this just is a lesson that almost every real estate investor has to learn at some point. We all kind of just take on more than we can chew or think something is going to be a little bit easier than it works out to be and you work lined up, you know, in a little bit over your head. That's sort of an inevitability of learning the business.

Starting point is 00:17:23 But I want to commend you for really thinking about the skills that you have. That is such an important thing because real estate investing requires so many different skills. And frankly, we can't all be good at every one of them. I'm like you. I can't swing a hammer. I'm not going to do any of the rehabs yourself. When I think about what I'm good at, it's more like analytics. I'm good at, you know, figuring out what deals to buy or what markets to work

Starting point is 00:17:46 It sounds like your superpower, the thing that you're really good at is being able to work with people, find great contractors. That is a super hard thing to do. So I just want to make clear to everyone that figuring out what you're good at, there's going to be a way to apply those skills that you have somewhere in your real estate business. And the sooner you could do it, the better. And Brandon, I want to ask you, you said you thought about quitting. This sounds like a pretty rough first deal. what kept you going when things got rough? My wife, she's my rock.

Starting point is 00:18:19 She's everything. When you're investing into something, especially real estate, real estate's an expensive. I call it a hobby, career, whatever you want to call it. To me, it's more of a hobby because I don't do it 40 hours a week. It's just being able to lean on her in stressful situations and then just bounce ideas off her. And then, again, it's just about building a team of people that around you that you have the ability to talk to and figure out like, hey, there's this. The amount of times I posted on the bigger pockets of the rookie real estate forums

Starting point is 00:18:48 asking questions or on like the Facebook group asking questions when I first started. Like if you go back and Google my name, there's probably 100 questions in like a three to four month period of me just like, I don't know what I'm doing. But you know what? I'm not afraid to embarrass myself to ask the questions that I don't know. And so I will ask all the questions because it's better to know than to not ask. You know what I mean? That's great advice.

Starting point is 00:19:12 And I recommend everyone do it. I think there are so many people actually listen to this podcast that don't even know that Bigger Pockets has forums where you could go and ask these questions. It's completely free. So if you have questions, you find yourself in a difficult situation, go leverage the Bigger Pockets community. That is exactly what it is there for. Go ask a question.

Starting point is 00:19:31 Take a page out of Brandon's book and don't be fearful about how people are going to respond, at least in my experience, people are generally really helpful and supportive in that part of the community. Well, and that's one thing when you start to invest and you use the bigger pockets community, you're not, you're never alone. No matter what it is, I just posted something the other day. I went and looked at a property and it looks like there's water damage or something. And within like 48 hours, I had like 20 different people that had responded and said, hey, it's this.

Starting point is 00:19:59 Yeah, I think that that experience is relatively common. And I just encourage people to check that out. It's a free resource. All right. So the first deal didn't go as you were expecting. Meanwhile, you know, while this is going on, It sounds like interest rates are going up. So it's creating a more challenging investing environment for you.

Starting point is 00:20:19 What did you do for your second deal? So that's for my second deal, that's when I went and got my real estate license at that point. Because I'm like, interest rates are going up. The market's going to be harder to invest in. Hardcore investors are going to get in to see these properties right away. And I'm like, this is something I have to be able to do. With my schedule, I work anywhere from 60 to 88 hours a week, depending on the week, you know, 22, 23 days in a row.

Starting point is 00:20:41 So I have to figure out what can I do to give myself an advantage. And that's what I did is get my real estate license. And so for the second property, I went the day that it was listed. I went and looked at it. And me and my wife were like, yep, this is our next property. We want it. It's a one bed, one bath. This would be a perfect transition from our three bed one bath.

Starting point is 00:21:01 And we put an offer in. And we actually went below asking. And we told them that we would go at a certain price cash or we would go for a slightly higher price financing it with a 25% down conventional loan. And the sellers chose to go with the higher price conventional loan. So that property was pretty much for the most part turned key. We had bought it. Tenants had moved in about three months later. We had to replace the furnace because it was an old Balberian furnace. It was just incredibly loud. So we replaced that. So I think total maybe since we bought that two years ago, we maybe have about $5,000 into that place.

Starting point is 00:21:37 I got to say, man, your hustle is incredible. I'm very impressed all the stuff that you do to improve your financial situation, whether working full time, taking on extra shifts, investing in real estate, then you go get your license. It's honestly very, very admirable. I want to ask you, Brandon, about that the second deal, because it sounds like you bought something turnkey, something that's stabilized, which if you're not familiar, just basically means it doesn't require a lot of renovation or rehab work.

Starting point is 00:22:05 Was that intentional? Like when you went out and built a buy box and thought about what you're, were going to buy next. We were sort of scorned by that first experience and wanted to find something easier? No, not at all. So we have a buying box and we stick to that buying box. And pretty much my focus point is the ROI. And basically anything that's 8% ROI I'm okay with. I would prefer, obviously we all prefer 12 to 15%. But ROI is where I then will go look at a property. And I think when I ran the basic numbers, and it's funny because I use Brandon Turner's numbers. I, from this is the very first thing I learned about real estate.

Starting point is 00:22:40 I googled how to run numbers and something came up from Brandon Turner. And it was just a very simple mathematics. You just write it out hand stock like with your hand. And that's how I still run my numbers to this day was this equation that Brandon came up with. And so I ran the numbers. The ROI came back at like 10 or 12 percent. And I'm like, okay, let's go look at it. And then we kind of go from there.

Starting point is 00:23:01 It just kind of prevents us from wasting our time to go look at properties that just don't fit in our box. Yeah, that's very wise and highly recommend that to everyone listening here. It's just you can't look at every property, right? There's especially now these days, inventory. It's still low. It's starting to get up there, though. You can't look at everything. And having that discipline really helps.

Starting point is 00:23:20 Before we move on, Brandon, I did want to ask you about becoming an agent because this is like one of the most common questions I get is should I become a real estate agent to get into investing in general? You said that the main motivation was that you wanted to get into properties sooner and to earn commissions. So does that mean you're just doing an agent for yourself or do you take on clients as well? I do a little bit of both, but primarily I got it for myself. And it's funny, I get to ask this question quite a bit, like should I become an agent? And really, it's subjective. It's completely up to you and your lifestyle and what you want to do.

Starting point is 00:23:59 If you don't have a side hustle, then I would encourage people to do it. If you have other side hustles, you don't need it. It's just a bonus. And so for me, I always tell people, if you have a real estate agent that you're using to invest with, they should be able to provide you with resources, such as contractors, such as home inspectors and lenders and things like that. So like if you're a realtor is not providing you with those type of assets, then you need to find a different realtor. That is good advice. I totally agree with having a realtor that can help you build your network. I think the interesting thing about you, Brandon, is that you're. You became an agent, but not full time. You're just adding more things on top of what you're already doing. You know, when I get this question, I think most people are saying, I'm going to quit my job and go full time into real estate. Has that ever crossed your mind to become an agent full time to help you in your investing? I think about this weekly. I'm not going to lie.

Starting point is 00:24:55 It's something I think about. Honestly, it's just, it's very hard because with everything I do, I have a pretty set schedule. as is. And if you become a full-time real estate agent, like your schedules vary and it just depends. And the money is not consistent. And so it's just there's a lot of uncertainty. But what I'm doing right now is working. So if something's working, why fix something that's not broken? We make a surplus of anywhere between $4 to $8,000 a month with everything that we do, including like our rentals. So why deviate from that baseline when what we're doing is currently working? around here, we can buy a property for like roughly 25,000 down, maybe 30,000 to close.

Starting point is 00:25:39 So let's just say 6,000, six times five is 30,000. So basically every six months just from what we make in a surplus, we can buy a decent three bedroom household. And so there's no point to deviate from that baseline. I absolutely love this. So many people ask this question. And there's no right or wrong answer. But I love that you're informing it, one, with numbers, sort of my thing. But I love that you're saying, hey, look, I have.

Starting point is 00:26:02 budgeted this. I've calculated what my current financial picture is and it's going to allow you to buy two rentals a year. Like that is probably going to get you to retirement to fire faster than trying to go out and build an agent business. For some people, that might not be the right answer. They might not have the same situation you're in and, you know, they want to find a whole new business. But I love that you're sort of thinking about the end in mind and using numbers to inform how you're spending your time and how you're applying your skills, right? Like you said, you're figuring out what you're good at. And clearly what you figured out is a way to create excess cash flow for you and your family every month that you could go and invest in

Starting point is 00:26:44 real estate with. So kudos to you. We have to take one more final break, but more for Brandon and how he's approaching his financial freedom journey through real estate right after this. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details so you don't have to. In some cases, investors even receive 50 to 75% percent.

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Starting point is 00:29:28 Curious if you qualify, just head over to hostfinancial.com and find out. Stop letting outdated lending practices hold you back. That's hostfinancial.com where your property's potential meets unlimited financing. Welcome back to the show. You mentioned, though, given that you're an analytical person, I'm curious, do you have a specific cash flow number? Some people call it your fire number in mind that you say like, okay, now financial, financially free. Now I can take my foot off the gas and maybe do something else with your time. For both me and my wife to be able to comfortably retire at $10,000 is the number that I'm reaching

Starting point is 00:30:06 for. So if I can cash flow $10,000 a month, and that's prepaid off any properties like that's the ultimate goal would be $10,000 a month. And do you have any sense buying two properties a year or how long that might take you? Well, I can buy more than two properties a year. It just It all depends on where things are. Our last property that we bought was $8,500. We put right around $15K into it, and that's $1,800 a month. So that property did very well. It cash flows at about $6,700 a month after we cover everything.

Starting point is 00:30:41 So that property was great compared to some of our other ones that we bought years ago that were single families. So it just kind of all just depends on what comes up. I mean, there was probably a year-plus. plus period of where we didn't buy a property at all because we couldn't find anything that fit in our buy box. We went under contract. We would go in there and there's just so much structural issues with the properties we walked away. And that's the thing is we're not afraid to walk away from a property like if it just doesn't make sense. It sounds like a great deal.

Starting point is 00:31:09 So do you have a plan then? How many deals do you plan to buy? Let's just say in the next 12 months. Like we just we have a financial number that makes sense. And so I can't really answer that question because the reality is it's what presents itself. If I have, eight one bed one bath that are 70,000 and I can afford to buy them all, then I'll buy them all. If I have a duplex or a triplex, quadplex, there's a deal I was just looking at the other day that was a triplex, duplex, and a single family that's all listed together. I'm extremely interested, but the numbers just don't make sense right now. So it's just the math has to math. And where are you getting the capital for all of these acquisitions? Did you not hear me say I

Starting point is 00:31:48 work six jobs? Well, I just thought, and I just thought. I just thought. You said $4 to $8,000, we were sort of doing the math backwards earlier where it sounded like it was two, you know, it would work out to approximately two rentals per year that you could acquire. But then you're saying, I'll buy anything. So I was just curious how you make that work. So yeah, basically that month, that year period where we didn't buy anything, all that capital just got saved up. I see.

Starting point is 00:32:15 Okay. And so it might even been longer than there. So all that capital got saved up. Like, we are super frugal. We don't, we don't do a lot. We'll take some family vacations here and there, but the reality of it is we just are super financially smart. We don't make poor decisions. We don't buy expensive clothes.

Starting point is 00:32:32 We don't my cell phone's like five years old. We just make super smart decisions when we save up money, then we reinvest. The purpose of money is to make more money. I love that. And love the attitude. Absolutely. It's pretty inspiring to hear. I mean, I mean, no offense, but social workers are not known to have the highest incomes.

Starting point is 00:32:49 but the fact that you are making this work with your current situation, I would hope is an example for everyone listening to this to show that you can buy property and you can buy real estate even if you have a job that's probably on the lower end of the income spectrum. Oh yeah, social work is definitely on the lower end of the income. Between me and my wife's base, Sally, if I had to guess it's right around $95,000 a year between the two of us, but then it's all the extra stuff that I do that allows us that extra money to invest. And then we have two separate bank accounts. So everything to do with our rentals, all of our rent goes into one bank account from one bank. And then all of our money from our

Starting point is 00:33:28 W-2 jobs and all the other income goes into a completely different bank. And then we try to pay everything out of our W-2 job. And then all of our rental money outside of paying the mortgage and the taxes which are escrowed in, all that is strictly for just reinvesting. Like we don't, we don't pay the plumber out of there. We don't pay the maintenance man out of there. that money sits there and the sole purpose of that bank account is for it to reinvest. And so that money grows quickly because we cash flow right around $2, $200 a month. But then we also have like the insurance that goes into that account. We have any like maintenance fees that we have built in, Capax built in, vacancies built it.

Starting point is 00:34:04 It all goes into that account. But then we don't touch it for those purposes. We pay it out of our W2 job. And so it's all there just to reinvest. This is such good advice, everyone. When you think about finance, probably. the best advice you could ever give someone is to invest as much as you can at the highest rate of interest for as long as possible and just keep reinvesting. Every dollar that you get from an

Starting point is 00:34:28 investment, if you're just reinvesting, that's the beauty of compound interest. And it sounds like you've created a really good system for continuously reinvesting. Because I know from experience, when I first started, I put it on to just my bank account. And I thought, oh, yeah, I'll put it in the stock market or I'll buy something useful with it. But it's pretty tempting, especially when you're younger, to just say, hey, I've got this money in the bank. I should spend it. But by physically separating it into different bank accounts, I'd imagine that you are

Starting point is 00:34:58 able to keep that 100% reinvestment rate. And if you look at these like a compound interest calculator online and you just go do this, see how different your portfolio value and net worth will be when you reinvest 100% of your profits versus 50%. percent of your profits. The difference is massive, absolutely massive over time. So I think this is really, really important lesson for everyone to latch onto here is try to reinvest as much as you can. Well, one of the things that really drives at home is that my net worth prior to investing, I think it was right around 150 to 200k. When I say my, it's me and my wife's,

Starting point is 00:35:34 150 to 200k to now 800K. I mean, so we quadrupled our net worth in two and a half years just by making smart choices and investing into real estate. That's amazing. So Brandon, do you have a time horizon? You think you'll hit your $10,000 a month? My goal, again, when I did the previous podcast, my goal was five years at that point. So that would have put me at 43. But the economy got hard and investing got hard because of all the changes with interest rates. The market, there was nothing on the market. There's very few houses. Competition was high. And so it kind of slowed that process down. So for me, I would like to think, 45. The age of 45, I should be able to walk away. It might be earlier. It just kind of all just depends. There's a lot more properties in my area right now, which opens more opportunities, because, again, we are smart financially. If I could buy two, three, four houses per year, which would be my goal ultimately would be four houses per year, if I could make it work.

Starting point is 00:36:32 And so that 45 seems pretty reasonable, which would be seven years from now. It just all depends on the market. Well, I just think, you're right. Real estate has gotten harder. Cash flow is not as easy to come by as it was. But I guess I hear people use that as a reason to slow down or to not invest at all. But what you're saying in your math, you know, that's seven years from now. You've been investing for two and a half years. That would still go from two years ago, you were looking at investing at 65, right? So you were about 35 then. You were looking at 30 more years of working. Now, even with the more challenging investing climate, you're looking at maybe more years of working and you're cutting down your time horizon for working from 30 more years

Starting point is 00:37:19 to nine more years from the time you got started. So I just want to encourage people to think long term and think big picture here because no, can you retire with real estate in a year or two or three? Probably not. That's pretty hard unless you're starting with a ton of capital. But can you replicate what Brandon's doing and put in hard work for seven to nine years and dramatically move up your retirement date. I think that stream is still alive. And branded, it seems like you're living it and showing people that it's still possible. Yeah. And one of the things I get the most is like, well, you're not seeing your family or you're going to miss your kids' events. And that's not true. My kids played baseball. I didn't miss a single baseball game.

Starting point is 00:37:59 I haven't missed a single event for my kids' school. It's easy to find time to do the things you want to do. So we have to stop making excuses and saying, I don't have time to do that and find the time to do it and put away whatever else you're doing that's not important. Like that Netflix and chill that you're doing for two hours at night, that could be two hours that you're listening to a podcast to educate yourself on real estate or finances. I drive 40 minutes to work. Every single morning when I was just getting started,

Starting point is 00:38:23 I listened to a podcast and the way to work and a way home. That's free time that I had to use no matter what. So if I can listen to podcast and educate myself, we live in a world of unlimited free education. It's on you to take advantage of that. That's fantastic advice, Brandon. And before I get out of here, any other advice for people who are trying to get into the market or who are struggling in today's investing climate?

Starting point is 00:38:50 I mean, the biggest thing you could do is, again, use the bigger pockets forum, use the bigger pockets Facebook page, and just reach out to people who are like-minded. Surround yourself with people who are like-minded. Because if you surround yourself with other people, when I first started investing to real estate, I got a lot of naysayers telling me that I was not intelligent for taking a cash out refinance in my primary residence that I was put in my family. at risk. And I just knew that I'd educated myself enough to like, no, this isn't a risk. This is making smart choices that's going to benefit my family long term. So if I would have

Starting point is 00:39:18 listened to that negativity or to those naysayers, I would not be in the situation I'm at. Now, now those same naysayers call me and say, hey, how are you doing this? How can you help me do this? So surround yourself with positive, like-minded people and figure out how you can do it together. My guys that invest in California, they're just two buddies. They're both married with kids, but they invest together and they're just positive like-minded people and they want to get out of the rat race. So don't listen to the negativity. Feel free to reach out to someone like myself or other people in the Bigger Pockets community. And I filled phone calls.

Starting point is 00:39:50 I always tell people that if you want to call me while I'm driving home from work, again, it's time that I wouldn't be using to do anything else. So send me messages, reach out to other people, see if they'll have those phone calls and people are more than willing to help out. That's fantastic advice, Brandon. I love your approach, just finding a way to get it done and, you know, taking what you've got and making the most out of it and pursuing your financial goals. You're doing fantastic job of it. You're a fantastic podcast guest. Thank you for being here. If anyone wants to connect with Brandon, we will make sure to put all of his contact information in the show notes below.

Starting point is 00:40:28 Thank you all so much for listening to this episode of the Bigger Pockets Real Estate podcast. Greatly appreciate it. And we'll see you for the next one in just a couple of days. Thank you. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand new construction homes, 10% below market value in the best

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BiggerPockets Real Estate Podcast - 8 Rental Units in 2.5 Years (While Working 6 Jobs!)

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