BiggerPockets Real Estate Podcast - 800: Million-Dollar Advice from Millionaire Investors Codie Sanchez, Alex and Leila Hormozi, and More!

Episode Date: August 3, 2023

Want to be a millionaire? We sat down with Codie Sanchez, Alex and Leila Hormozi, Mikey Taylor, Cody Davis, Christian Osgood, and other multimillionaires and distilled their most critical investing, business, and entrepreneurship advice into one episode. But we couldn’t unleash all this wealth-building content on any old episode, so we packaged it up and made it into our episode 800 special! This time, we’re not just hearing from one successful guest but dozens of them as we get their take on the biggest mistakes, the worst wastes of money, the best advice they’ve ever received, and whether or not you’re too old (or young) to get rich. You’ll hear what’s holding them back today and the one thing they wished they had done earlier that would have made them millions more and saved thousands of hours. Stick around because this episode is a masterclass on making your first (or next) million from investors who are playing the game better than anyone else. Be sure to keep an eye on the BiggerPockets feed, as these full interviews will be released over the next few weeks!  In This Episode We Cover: What you should NEVER ignore if you’re building a rental portfolio or business Why focusing on making money while you’re young is a WASTE of time  The $3,000 purchase that Alex and Leila Hormozi wish they could take back Why you DON’T need money to make millions and an eight-figure mistake you CAN’T repeat Building your systems and processes NOW so you can relax while others work for you Shiny object syndrome and how it’s secretly making you broke  And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch 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 Instagram Rob's TikTok Rob's Twitter Rob's YouTube Connect with The Guest: Alex Hormozi's Instagram Alex's Latest Episode Andrew Cushman's BiggerPockets Profile Andrew's Latest Episode Ashley Kehr's BiggerPockets Profile Ashley's Instagram Real Estate Rookie Podcast Christian Osgood BiggerPockets Profile Christian's Instagram Christian's Latest Episode Codie Sanchez' Instagram Codie's Latest Episode Cody Davis' Instagram Cody's Latest Episode Danny's (Mentee) BiggerPockets Profile Jason Lee's Instagram  Leila Hormozi's Instagram Leila's Latest Episode Mikey Taylor's Instagram Philip's (Mentee) BiggerPockets Profile Soli Cayetano's BiggerPockets Profile Soli's Instagram Tony Robinson's BiggerPockets Profile Tony's Instagram Wendy's (Mentee) BiggerPockets Profile Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-800 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Recorded at Spotify Studios LA. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 800. In the very beginning, it's lack of resources and knowledge that I feel like was holding me back. And then now I would say that it is overwhelm of resources and knowledge. The most important thing isn't that you have success young. It's that you stack the deck in your favor. And the way you would do that is by learning as much as humanly possible young. First business we ever started we had to raise money for. There was this guy who told us that he would help us raise money.

And he said, I'm going to raise the money. But I'm taking the equity now. We gave him equity before he performed. He didn't raise any money. We ended up selling the company, and that cost us about $2.5 million. Whoa. That one hurt. What's going on, everyone?

It's David Green, your host of the Bigger Pockets Real Estate Podcasts. We are the biggest, the baddest, and the best real estate podcast in the world. And we have a special episode for you all today. Episode 800, quite the milestone. We wanted to do something special for you guys. So we've gift wrap billions of dollars of wisdom on real estate business and life to answer questions that you get to benefit from. We talk to people like Cody Sanchez, Lela and Alex Hormozzi, Cody Davis and Christian Osgood, and they absolutely delivered this episode. They gave specific,

they told stories, and they had so much fun with it. There's value in here for every single investor, no matter what phase or stage you're in. And Rob, I've already made it home. Why are you still at the airport? Well, I woke up at 4 a.m. and my flight got delayed and got delayed again, and then got rebooked, and then they got canceled. And so I am hanging out in an airport lounge, having a mojito, and beautiful, tropical Atlanta, Georgia. Your favorite toe has always been a mojito. I'm glad that there's something to take the edge off of that halacious traveling. Hope you make it home safe, bud.

Yeah, you know, it's a little awkward. Everyone's like looking at me talking to a microphone. I feel very weird about this. But, hey, I've surrounded myself with all the wisdom from all the people we're about to listen to today. So because of that, I feel very secure. I feel very wise and ready to take on today's episode. Before we get to today's show, today's quick tip is simple. ask more questions. And I'm not saying how can you get a piece of somebody else's pie,

but ask how they did what they did, how they accomplished it. That might just make someone like you more to where you could get deeper into their world and find more success. Thinking about wholesaling or flipping your first property, but not sure where to start. The truth is, deals don't just fall into your lap anymore. You need to go out and create opportunities. That's where PropStream comes in. With PropStream, you get instant access to over 160 million properties nationwide. Use 20, pre-built lead lists such as pre-foreclosures, tax delinquencies, and vacant homes to find motivated sellers fast. And now PropStream has integrated batch leads and batch dialer to

provide you with a complete all-in-one solution. That means you can not only find motivated sellers, but you can also reach out right away. Skip trace phone numbers free on select plans, then send postcards, emails, or call sellers directly. Don't worry if you're new. PropStream also gives you AI-powered insights and comms that are over 99% accurate. So you know you're making smart offers. Plus, you'll have access to PropStream Academy to guide you step by step. Start your seven-day free trial and get 50 free leads at Propstream.com slash BP. That's P-R-O-P-S-T-R-E-A-M dot com slash BP. Don't just dream about real estate. Make it happen with PropStream.

Okay, we're going to shift gears for a minute to cover something important, especially for new landlords. The shows often talk about getting stuck doing everything ourselves and the cost of sweat equity. The key question is simple. Is my time? better spent elsewhere. I use a tool that cuts down on a lot of landlord hassles. And the wild part is, it's just $12 a month. It handles rental screenings, rent collection, maintenance requests, and accounting, all in one platform via a mobile app or desktop. It saves me time in tenant communication and keeps me organized for tax season. It's called Rent Ready, and you can sign up for a six-month plan for just $1 with promo code BP 2025. Pro users get it for free because we believe in it. Just sign in through your pro

account to get started. Rent Ready helps ensure on-time rent with auto reminders, keeps communication professional, and lets you post listings to multiple sites. Check it out at rentready.com slash bigger pockets. That's rent-r-re-d-i.com slash bigger pockets. A lot of property managers think their job is answering tenant emails and coordinating repairs. That's not the job. The job of a property manager is protecting and growing your operating income and earning your trust while they do it. And that comes down to three numbers, occupancy, delinquency, and net promoter score. If those numbers slip, your income slips, and your trust slips too. And most PMs don't hold themselves to performance standards. They focus on activity, not outcomes. Mind is different.

They obsess over the metrics that actually grow your cash flow. Go to mind.com slash show me to see how mine performs and get a month of management for free. Because if you're going to hire a property manager, hire one that manages your investment like an investment. But since today's episode is literally an entire episode of Quick Tips, we're going to get right into it. The first question that we asked these millionaires was, what phase of the deal cycle do you think people snooze on? Intrude a form, our friend Cody Sanchez kicked it off with the hot take. This is the bigger pocket podcast coming at you from the Spotify studios in downtown L.A. All right, Cody, is there a phase of the business deal cycle that you think other people snooze on?

I think every business and every deal is really easy to get into and hard to get out of. And so the problem is people get excited and they want to do a deal. And everybody tracks the time to execution. Like I have 50 doors by the time I was 24 or, you know, I bought my first piece of real estate inside of a year. I think that's a terrible metric. Is it a good deal? Not just a fast done deal.

So I think that's the most important thing. It's much easier to just keep learning and execute on one deal really well than execute on a bunch fast. Alex and Layla Hormosi also answer this one. It turns out their advice actually works for real estate and for dating so you know that it's real wisdom. Is there a phase of the business deal cycle that you think other people snooze on? I actually think it's after you have gotten a verbal like consent to a sale or to an

acquisition or whatever it is and prior to them it actually happening. So I think it's, you know, say the person verbally agrees to yes. And then people feel like, oh my gosh, thank goodness. a feeling of relief, the work is done. And then there's like a four or six week or eight week or 12 week in a business acquisition gap where people forget about that. They're like, oh, they already said yes, so it's done. No, that's when I think you need to start bringing in people from the other side.

So whomever they're going to interact with after the sale, I say bring those people in immediately once they've said yes, and then start integrating them in and start treating them like they're already a customer or a partner or whatever it is. Because that's actually where I see a ton of drop off because the person feels like they just said yes, and then they're, they're expecting treat me like, yeah, I just said yes, but a lot of people just treat them like, oh, my work is done. You propose? She says yes. You're like, great, all right, back to work and forget all about the fact that. Totally. I'm going to stop dating her now. It's like, what? Like, we just got, it's not done until the credit card has been slid. It's not done until

the paperwork is signed. I give this example, like you're underwater, you're swimming to the top. You don't get to breathe in until you actually breach the surface. Like being two inches from the surface is no different than being 20 feet down. You're still going to die. And there's always this urge to exhale early to like, yay, we won and then relieve the pressure. And I'll tell you, when I'm representing the buyers, like, I've snuck in on many people who didn't get that thing signed, and I'll say, well, we'll pay 10 grand more. And the next thing you know, we grab that deal because we didn't exhale. And on the follow-up, this happens a lot looking for investment properties. They write their offer. The seller says no. They forget about it. When I'm in

buying mode, I keep a spreadsheet of all the houses I wrote offers on that said no, and I will go back and I will say, hey, what about now? And life happens. Emotions change. And, Like that's usually the ones you grab were not the first try. It's like you're not going to chop that tree down with one swing of the axe. But once you've swung a couple of times, why are you stopping? Like you've got some work in. So I couldn't agree more. Those are, that's great advice.

Did you ever have a time where you asked out Layless? She said no and you just had to keep following up and you caught her in a better mood. She tried to cancel the first date. I mean, it works many times in life, right? No, she tried to cancel the first date. And so I called her up. So I called her up. I was like, I was like, follow up, right?

I called her up. And she's like, oh, I just feel really sick. I was like, you're talking to me. you're not that sick. I was hungover. Yeah, whatever. And so I was like, no, like, we're on. So we were on.

And was that part of the appeal? Was like, okay, this person really wants it if they're going to keep trying? I just like somebody that was so assertive. I think that I was just so used to people that, like, I was more assertive than them. And so I was like, well, it's kind of refreshing that he's so, like, directive. And like, some people might be. Please come on this date with me. I was like, no.

You said, we're doing it. We're doing it. I was like, I need to meet people too. I need to get out. Let's go. You know what I mean? Let's do this. Well, when you're a seller and you're used to getting offers on either your business or your property or whatever, a lot of the time we assume that the first thing they're thinking about as the price, but most of them are thinking about are you actually going to close? Are you legit or are you messing with me? And when a person continually follows up, you're sending that subconscious symbol. Now, I really am going to close and I want to close and I'm the right

buyer for you to take it. I actually just think it's like just keeping things warm. So a lot of people have hard closes. Like, if you don't take my terms or you don't take my price or whatever it is, like, screw you, go away. But like, when we look at the deals that we did this year so far, 75% of the deals were people that we had talked to over a year ago and been like, hey, it's not a fit for us right now, but like, try to do these things and like, if this works for you, like, give us a call. And those people did those things. They worked and then gave us a call. And so, like, people tend to be a little bit too transactional, even though they are. are, quote, transactions. But I think that the relational becomes the compounding mechanism in terms

of like deal flow and getting things back. And I think that just becomes the long-term mode that snowballs. Ashley Care, who co-hosts Bigger Pockets Real Estate Rookie Podcast, kept this grounded with some classic, no-nonsense, real estate wisdom. Looking at income opportunities on a property that I think too many people are going through their listings and saying, oh, this is a single family. I'm looking for duplexes, but not looking at something as to how you can generate additional income off of something. I think there's a lot of money left on the table of, you know, looking at a property and be like, you know what, there's actually a garage there. I can rent out the garage for, you know, additional unit. It's by the Bill Stadium.

I can rent out this grassy area for parking and just looking at different ways to get creative to make deals work. And one of my favorite responses to what people snooze on came from multifamily mogul and friend of bigger pockets as well as myself, Andrew Cushman. Everybody, not everybody, but so many people. are either scared or they're just, I'm going to sit and wait. You know, I'm not going to build my relationships for money. I'm not going to build my relationships for leads, for properties, all that. Now is the time to be building out your systems and in your potential business and for your potential investment.

Maybe it's okay if you're not actually buying anything right now. If it doesn't underwrite, it doesn't underwrite. But it is not the time to just sit on the sideline and say, well, well, I'm going to wait. I can't tell you. I know people that in 2016 sold everything they had and said, I'm waiting for the crash. Well, here we are. Finally, seven years later in 2023, things are shifting, but they missed out on so much by just saying, yeah, I'm going to just, I'm going to take time off. You cannot perfectly time to market.

It never works. Once in a while, a few people get lucky. So I think people, there are people who are snoozing right now that shouldn't be. They should be laying the groundwork for huge success when the time. comes, which I think might be next year. You heard Andrew, now is not the time to stop working smart. Part of what keeps these people so sharp and so centered is the good advice that they've gotten along the way.

Our hosting counterparts over at the Real Estate Rookie Podcast kicked things off. Here's Tony Robinson and Ashley Care. Do you have a core memory about some advice and how did that shape you? One core memory I have that really shaped my business was there was actually a conversation with Brandon Turner. And it was shortly after I became a host. And he told me one of the things that he regretted in his business was thinking too small for too long. And he was like, if you think bigger sooner, your business is going to grow faster.

And I just really internalize that. And that's why I now have a goal of mine a billion dollars worth of real estate. My core memory was when I started working for an investor. It was my first experience with anything real estate. And he was buying a business. And he took his rental properties he had. He refinanced them, did a cash out refinance, took that cash and was using this cash to buy the business. The core memory I have is sitting at the closing table in this wood paneled old attorney's office with shag carpet on the floor and him letting me write out these very large checks.

And at that moment, that's when it clicked for me as to like, if he can do this, I can do this. And this is how it's done. Jason and Andrew, welcome to the podcast. Do you have a core memory about some advice? advice and how it shaped you. I do. So I actually grew up as a young kid in New England. And I remember one winter walking by an apartment complex with my dad and there's snow on the ground and he stopped and he's like, Andrew, you see that over there. I'm like, see what?

And he goes, the chain fence. And I was like, yeah, he goes, that's a dog park. I'm like, okay. And he said, whatever you do, don't ever make snow angels than that. In addition to that, probably even more impactful was something my mentor, Tim Road, one of my mentors, Tim Rhodes said to me. And he told me to play your own game. And what that means, or some of the things that that means, is to lean on your own strengths, do what is in line with your why. you know, basically, you know, don't compare your success to other people because everybody is starting from a different place and they have a different place that they're trying to get to. And while it's incredibly valuable to learn from those people, in the sense of your own success and what you're trying to do, it's irrelevant. And that was something that was really important to me when he said that, just play your own game because, you know, it would be really, sometimes I found it really frustrating.

I would meet somebody who's in the multifamily syndication business, and they've done 10,000 units in four years. I'm like, what's wrong with me? I've done two, right? And so I'm like, well, no, he's playing his game. My game's a little bit different. So that was a really meaningful and impactful advice to me. Awesome. Jason, the same question.

Yeah, for me, I think the best advice I ever received was at a point where I needed the most. When I first started as a young person in the business, as a commercial real estate agent, I had been banging the phones for three or four months with no leads and nothing to really. even show that I might make income next month. And my mentor told me that basically in your first year in the business, you're trying to get skill sets that teach you to become a successful person later so you can become valuable to the marketplace after you shape these skills needed to add value to investors or to people that are looking to buy real estate. So I think that advice was probably the most pivotal point in my career comes down to, because some people in my age, we care about like the starting salary, like the 60, 80 grant salary and the tech work.

or whatever it is. But I think in the early years, it matters so much more about starting to shape the skills. They're going to create more value to the marketplace. And hence will turn into more money for you. That last voice was Jason Lee. He's a young but up-and-coming investor. And you'll hear more about his backstory in a few weeks on episode 812. And pro skater turned beer maker turned real estate investor Mikey Taylor chimed in on this one too. Best piece of advice I've maybe ever been given. I was 18 years old. And my friend told me as long as I'm trying to build anything, skateboard career business, never burn a bridge. That was this big thing.

Never burn a bridge. And what that looks like today, I think this has been huge for me. Anytime something happens that either rugs me the wrong way or creates like an emotional kind of spark, I never respond. I don't respond in the moment. I might draft something up, but I always sleep on it. Then the next day reassess that has been massive for me. Yeah, but even smart people make mistakes. In fact, I don't think anybody builds big wealth.

without making mistakes along the way. And they're always going to get something wrong. Now, that can be hard to remember when you're listening to podcasts like this with everybody telling the stories of their huge wins. So here's the biggest business mistakes that these people have made. Let's start with Cody Davis.

Worst business decision that I ever made was letting someone else when I was getting started control the rents. I did all the asset management. But this put me in a position where I was doing all the work and this other guy was, collecting the rents and then doing distributions until he wasn't. And that put me in a position

when I had 30 apartments and I stopped getting on my rent distributions. And so I should have handled the money, but you don't know what you don't know in the beginning. And so trusting someone to handle the money as a manager rather than doing it myself was my biggest mistake because it costs me a lot. I think it's hard to answer that question about what my worst business decision is because I feel like every decision that I've made, even though it hasn't turned out how I wanted to, I still learned an incredible amount. And none of them have been fatal, per se. So it's like, yeah, these are just like the costs of learning things. But I did buy a house, my second rental property ever. It was in Shreveport, Louisiana. And it was honestly a great deal initially. But the flood insurance

changed from one year to the next, like literally quadrupled. That's fun. And it's, we know, we went to multiple different insurance companies. No one wanted to insure it for whatever reason, even though nothing had happened. There was no flooding, like literally nothing changed. So the deal went from cash flow on a few hundred bucks a month to be in, you know, cash flow negative pretty quickly. We tried to sell it, sat in the market forever, finally got someone that wanted to buy it. Then during their due diligence, they found some issues with the foundation. We had to spend another, I think, like $12,000 cutting out the concrete in the middle of the house. Then we eventually sold it for a loss of $30,000 in addition to carrying the mortgage for an entire year.

So I said that was probably one of my worst deals early on. Yeah. That's a terrible deal. But that can happen, especially when you get into lower price real estate because you're like, Oh, it'll cash flow better. Right. One little thing goes wrong, like flood insurance. I mean, that's happening in Florida right now, which is true to the homeowner's insurance right now. It's like tripling, quadruple.

I got a quote on a property. I bought $26,000 a year. Only insurance that I could get on that property. Wow. Yeah. What are you going to do, though? You're stuck, right? And the person who's buying it, they're going to have to pay the same thing.

My worst business decision was probably one of our first. First business we ever started, we had to raise money for. We didn't have enough to do it. And there was this guy who told us that he would help us. raise money. And he knew everybody. And I remember asking before we did the deal with him, what happens if you don't raise the money? And he said, I'm going to raise the money. But I'm taking the equity now. I will not do this without equity. So he gave him equity before he performed. He didn't raise any money. We ended up selling the company. And that cost us about $2.5 million.

Whoa. Yeah. That was a bad one. That one stung. What's he doing now? Don't know. I haven't talked to him in a decade. That one hurt. Along those lines, Ashley Care and Soli Cayetano both had to learn some contractor lessons the hard way. Mine was not accurately or fairly compensating people around me, whether it's contractors, employees, or partners. I feel like I really struggled for a long time as to how to effectively do that. For example, I had this property where we hired contractors, paid them by the hour, right there. Big mistake. I ended up firing them. I can't say I haven't been there. So big mistake and ended up costing us more money in the long run because we had to fire them.

Our project went longer. We had to hire someone else. And then even with my partnerships, like especially early on, like I gave that first partner, principal and interest payments for the capital he put into the property and 50% equity. So I think that I've had to learn how to adapt and to kind of like not rush into like, okay, yep, I'll pay for this or whatever, getting like, like, a clear scope of work or a clear job description as to this is what I'm compensating you for. This is the work that will actually be done and making it very, very detailed.

So there isn't like those gray areas. What's the worst business decision you've ever made? Choosing cheap contractors, especially when investing at a state, you don't actually see the properties a lot of the time. And so when three bids come in and one says 10,000, one says 15 and one says 20, you really want to believe that that 10,000 bid is actually. And so I made the mistake many times starting out, choosing that $10,000 bid and it coming back to bite me and actually costing like $40,000 because you have to hire someone else to fix their mistakes. And it takes like twice as long.

So I try not to make that mistake anymore, but I made it a lot when I was starting out. Do you find yourself gravitating towards the middle quote or the more expensive quote whenever you're getting those contractor quotes? I gravitate toward the person who I have the best relationship with and who comes with the best referrals or who I've done projects with before. And so I try not to look at the number as much as the consistency and their ability to get the job done. Fortunately, each of these folks have been able to bounce back from their mistakes. And even more importantly, they've been able to learn from them. But it's way more fun to talk about the mistakes. So we asked everyone about the stupidest thing

that they've spent money on. See if you can notice some common themes among the answers. I bought a car that I almost couldn't fit into. So I think, yeah, Yeah, you know, I've had moments. It was like one of those fancy little Porsches. The stupidest thing I've ever spent money on, and my wife would probably tell you this quickly also, but I bought a BMW. And it was my first, like, job where I was making over six figures. And I was driving, you know, I was driving like a Toyota Sion or something like that. And I got this big job, this big raise.

And I went on and bought this expensive BMW. My wife, who was my girlfriend at the time was pretty upset. She was like, probably not the best decision. She was like, you know, we're thinking about buying a house and all these other things. and lo behold, about less than a year later when we go to buy that first home of ours, like Tony, great news, you're approved for the loan. Only thing is you've got to sell the BMW.

Bentley. So we got a Bentley. I think it was more, it wasn't that like buying an expensive car is dumb. It was more that, like, I don't care about expensive cars. And then we've, I returned it six months later. It was an all-white, forer TRD Pro. Like, $65,000 is the most expensive car I bought at the time. It was a year and a half ago.

And it was dumb, because I work in downtown San Diego and I have to go into parking structures a lot and my forerunner was too high to fit in most parking structures and one time I just said, screw it, I'm just gonna go through it and see what happens

and my car got stuck there and that basically towed me out of the parking structure so that's one of the dumbest things I've done as well. I would not do it again. I used to be in the cars as a kid. Hondas and Acura's and Mitsubishi's. We used to spend money on

basically every part you could put on a car. Did you have a blowoff valve? Turbo? I didn't. I don't know how I can tell. I just got a good read on you right now. Spoiler. Like a nice spoiler on the back? No spoilers. We actually, we stayed away from all the stuff that made the car look fast. Oh, you want to trick everybody. Yeah. We'd race you not expecting anything. Exactly. Yeah, we try to build like sleeper cars. I like it, man. So are you a fan of GTRs? Yeah, of course. Yeah, that's one of the reasons I like them. They don't look fast. You never think so. Yeah, that's right. So we did the whole thing. Went to the races every Saturday night. people. Rob spent way too much money on pickleball gear. He's got super into it. He's got these fancy

goggles that he wears. I've never even played. It's fun. He's got like clothes, like biker clothes that streamline air so he can run faster. P.F. Flyers. How long until you're sponsored? I'm looking for sponsors. I'm seeking agency now with the pickleball gear company. So please hit me up over at Robbilt.

All right. First question, Layla, I'm going to ask you, what is the stupidest thing that you've ever spent money on? And is there any reason you do it again? A dog. A $3,000 dog. Oh, wow. What kind of dog is it? This is the Bugatti of dogs that we're talking about it.

A King Charles Spaniel. Okay, okay. Sounds cute. Small? Big? Super cute. Super cute. Super small.

Super dumb. And the reason I say it was stupid is because, like, there are things I bought that maybe would be like a net neutral when I bought it, like a jacket that's very expensive, right? But it didn't harm my life. But the dog stole so much of our life for a period of time that I think is. It was the stupidest purchase I could have made. Alex, do you like the dog?

No, I was in favor of getting rid of it. He's a productivity killer. Does the dog still exist? He's live. Okay. Yeah, I didn't like take it out back. We rehomed him. Yeah, no, we rehomed it.

But no, I remember I was like walking the dog, and it was like the fourth time because the bladder is like the size of this thing. And I'm on like a call. And I was like, I know what my hourly, like, income is. And I was like, this dog cost me $10,000 a day. I was like, I would never buy this dog at $10,000. thousand dollars a day. This is ridiculous. I would say some of the courses, mentorships, and maybe some of the programs I've signed up for. And I would just say what had nothing to do with the people

who were running them, it more had to do with my commitment level. I think there's a lot of people who are signing up for things and they take signing up for things as a proxy for maybe taking action, but without actually committing to doing the thing that you're signing up for, nothing really changes. So it's like a gym membership, you never go to the gym. Exactly. Right, right. Ah, yes, commitment. It's a sneaky thing that's held me back from time to time. But what's even sneakier is that the things that hold us back can change over the years. Thinking about wholesaling or flipping your first property, but not sure where to start.

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in the industry. Now, they're the fastest, too. They just launched 10-day DSCR closing. That's right, 10 days. And they're still the only lender with a DSCR price beat guarantee. That means faster closing, the best terms, zero guesswork. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. What is something that was holding you back in the beginning and what holds you back now? A belief that you have to have money to play the game. What holds you back now? My biggest thing is we learned that we could buy everything, so we bought a whole bunch of stuff.

We need to come in and optimize more pieces of the business. I think a few more systems would serve us well. People do systems too early, I think, which is not a great thing. We came in, we built the business, then we built more business, then we built more business. It's time to sit back, optimize a little bit for the next push forward. That's the thing that's hold me back. All right. Cody, same question. Lack of confidence in the beginning.

a mentor who helped enable me in the beginning, taught me a little bit about seller financing, but he also put me down, told me I wasn't a sales guy, that I couldn't do this and repeat it, which was a little bit tough to hear. And so when I first met Christian, he said, well, you actually can sell and you know what you're doing. I haven't met someone that's doing it the way you are. So that really lifted me up, which is when we ended up partnering, but it was that lack of confidence. What about now? Right now, it would go to the systems. I exited property management. I don't do that anymore, but I'm limited in what I get to buy, not can buy, but get to, buy the systems in place for the actual asset management.

So with your mentor, just out of curiosity, was it like a tough love kind of thing, or was he just not nice? It wasn't very nice. Okay. He was just being an ass. He said iron sharpens iron, and I believe that to be true. However, Christian could probably put it better because he got to witness it. It just wasn't very kind.

So he said iron sharpens iron as a way of being a jerk. That was a justification. I feel that was a justification. From an outside perspective, that was a, he's like, oh, shoot, I can't replicate what my mentee is doing. Like, Cody outshined him in literally everything he did. So the strategy was, well, I'm just going to tell him he's not ready yet. He needs an equity partner.

Yeah. And Cody just absolutely carried that partnership from an outside perspective. He was an enabler, though. I mean, I needed help, but he didn't want me to outscale it. And so that's where it got stuck. And that lack of confidence really hurts a lot of people, that's what I've found. We ended up leaving around the time he made a statement of, you guys need to stop buying multifamily properties because you're making me look bad.

Yeah, that's a, if you can hopefully get it. I was like, well, you could also buy more. It was taking away his credibility. Yeah. Okay. What was holding you back at the very beginning versus what's holding you back now? I think that in the very beginning, it's lack of resources and knowledge that I feel was holding me back, like first starting a business, lack of resources and knowledge, and

lack of clarity as to even what the right resources were to try and attain. And like where was the right place to go for knowledge? And then now I would say that it is overwhelm of resources and knowledge. And so it's like in the beginning, I think you lack opportunity because you have no track record, you have no brand, you have like nothing to show. You have no evidence to even prove to yourself that you're good at what you do. And then I think as time goes on and you gain all of those things, there are constantly opportunities coming at you. And it's like, gosh, which ones do I pick when they're all actually good? Early for me, it was, I didn't understand the people component. It was for me, I was all

like hard science of business. So just like marketing, sales, conversion rate percentages, like all of every, if it wasn't quant, I didn't care. And I think that now I have a different appreciation, which is the difference between like hard skills and soft skills is more that hard skills are easy to measure, soft skills are hard to measure. But, but no less important. It's all the differences. They're just more difficult to measure, but not any less impactful. And I would say arguably they are more impactful in terms of long term.

And most starter entrepreneurs, you know, once you're a million, three million, you know, is right in there. It's like usually when you can still kind of muscle your way through stuff and always, like, kind of save the day. But like getting from there to like a million a month and beyond is all team, you know, and having the right culture and having the vision and all the soft stuff that I used to like throw out and be like, oh, this is all who do. And it totally is who do when you're under $3 million. Because it doesn't matter because you got to sell stuff and you got like, that's all it is. But if you want other people to do that for you, then they have to have a reason. And I think that's all, that's, that is the soft stuff. Um, nowadays, it's, it's still the same, uh, woman in the red dress,

uh, which is one of the analogies that I use a lot. Matrix. Mm-hmm. Uh, as like, learning how to say no is actually, in my opinion, not a binary skill of like, oh, he knows how to say no. It's more that you learn how to say no at every level. So like, when you you were, you know, when I was poor, I couldn't say no at anything, right? But then I learned how to say no to a thousand dollar opportunity when I was making $10,000 a month. But at that point, like, could I say no to another $10,000 a month opportunity? I struggled with that for years. I would, you know, spread between different things. I had at one point, I had nine businesses when I met Lela, and I was making no money. Lots of revenue, no profit. And then as I continue

to like go up the ladder and the thing that got me to go from nine, business to one business and then from, you know, relatively small wealth to mega, mega output quotes here, wealth was just putting all that attention on one thing. But even as I, like, climbed up that ladder, some of the biggest mistakes I made in business, even when we had gym launch, which were the context of the audience was doing like four-ish million a month, I should have just kept doing that. And instead, I was like, let's start a software company. And then just diverted all these resources to this other thing. And it ended up being a mistake that probably costs, you know, multiple eight figures, maybe nine figures for us. And so I've learned how

to say no to that level now. And I still have to learn how to say no to higher level opportunities today that the woman the red just gets more and more attractive. That's all it is. It's like your game gets up and like she steps up her game in terms of how tempting she is. And so that's the thing that I still struggle with all the time. Go back in time and give yourself some advice. Knowing what you know now, what would you tell past Ash? Processes and systems. start early documenting writing lists of everything that I was doing. And from there, I can take that and I can hire a VA. I can grow and scale. I can change it. But for too long, I went with just like, it's in my brain. I know how to do it. But every time I did something, I'd have to like go back into my brain and think about it instead of having a list of, okay, here's an eviction. Here's my little checklist of every single step that goes into an eviction. Here's what to do. And I waited until I had. so many units and it was time consuming for me to actually stop working on my properties and go back and take the time to lit, like write out those lists and document those processes. If I could go back

in time and tell past Tony something, I think it would be to adopt an abundance mindset earlier as well. Like I grew up, we weren't on like public assistance or anything. I wasn't on free stance, but we grew up and money was tight. And I just always had this kind of scarcity mindset around money and I just assumed that everyone else like didn't have money either and it wasn't until I started to meet other successful people that I realized just how much money is actually out there and how money actually flows and I think I would have maybe attempted bigger things that I not had that scarcity mindset or I think I'm very similar to you in that way yeah it's hard to break out of that totally because it kept you alive for a while yeah to let go and it feels like you're gonna

die yeah it's scary spend time in education like I did but no one to cut it off I think in the beginning. I spent way too much time just trying to figure everything out. Didn't really take action quick enough. I think I could have probably shaved three to six months off of my initial year of figuring things out and kind of figuring out how do I want to walk this real estate path. Yeah, that's great. I think there's a fine line between, you know, when you have analysis paralysis, a lot of the times because you just don't know enough, so you start researching, start feeling better. And then you research too much putting yourself back in analysis paralysis. So you got to remember real estate, you're studying concepts, you're studying things, foundational elements that make

real estate a business, but you can't just learn it all from a book. You have to actually apply the things that you read into real life scenarios, and that's how you actually learn real estate. Yeah, and that's how it sticks. It's kind of codified in your mind once you've done it. You know, you read about it and apply it, then it's almost like permanent memory. There's really two things that I think I would tell myself. The first one is if a property manager is no good for the first few months, they're not going to get any better. And I have a fault that I trust people longer than I should. And this is something I've really learned this year, that property managers are key to your success and they will make or break it. And if you have a bad

property manager, you need to replace them quickly and move on. You might have recognized those last two voices as Danny Zapata and Wendy St. Clair, two of the mentees that Rob and I helped to get their next a deal earlier in the year. And to Wendy's point about bad property managers, sometimes you got to know when to hold them and know when to fold them. It's important to know when to walk away because certain relationships just don't get better. If you don't have a means to get it to cash flow positive, you should figure out how to restructure number one. And if you can't restructure, you can't refinance, you can't adjust the equity. I mean, there's a lot of ways to play the game. But if there's no way to get it to cash flow positive and exit, then I would walk away. And you know, and I would walk away.

And at the end of the day, you can relever your other portfolio to pay it off. But if you have no means to get it to positive cash flow, absolutely, it's a no deal. If you can't get through due diligence, walk away from the deal. We've had a deal that should be absolutely phenomenal. The terms are ridiculous. These stated incomes there, they just did not have the bookkeeping to back it up at all. And it's like, you know what, if they can't prove they're bringing in the income, we've seen this so many times. Due diligence is not fantastic.

Just don't close on the deal. You need to know what you need to know. The best predictor of future behavior is past behavior. And so most often people will not surprise you as the first bad thing that person has done before. And where I've gone wrong is not doing enough due diligence on people in the past. So if they've exited multiple companies and done well, if they've done other partnerships well, if they have a happy marriage, if they have good friendships, if they have long friendships, I want to see duration and time of execution. And typically we don't do that. We meet a person in a moment in time, and we think that that person is who we're getting into business with.

What you should actually do is go back and look at their history. You need a track record on excellence, because if it was a track record on poor performance, that's most likely to continue. And so do you actually go through like a vetting process or like a reference check or anything like that with someone that you want to partner up with? Now I do for sure. I mean, I had one deal recently go really, really bad. and it was because it was a friend who I had gotten to know who I really trusted, but I didn't do the traditional background check, which I think you should do every single time. And I think you should do five references that they give you. You should talk to all of them. And you should do five references you find. So those are just people you reach out to because it's so easy to tell if somebody thinks this person is exceptional or not. If they don't respond, there's your answer. They don't think they're exceptional. If they respond and they're like, I don't really comment on X partner. There's your answer. And usually they'll respond and be like, that person's awesome. I have nothing but good things to say about them. And typically people don't do background checks. They don't, they might call references that that person gave them, but they very rarely go out and look for their own references. And these are people like, I want to talk to your last five bosses. I want to talk to the last five investors that you had come into your most recent deals.

While Cody is schooling us all about how to be objective about our friends and our hires, it's also important to try to be objective about ourselves. We decided to turn the mic around back on our friends and ask them what their biggest area of improvement was in regards to their own performance. I think often I tend to err towards the side of because I want to make everyone feel included and I tend to be very people focused. I don't make decisions quickly enough. And so something that I'm working on right now is just being more decisive for the sake of speed. And I think it's good for a leader to not lean more towards like authoritative in that they command everyone to do things, but also not. Like, you know, this is a democracy and everyone gets an equal vote and like all. And so I've tried to do a better job lately of collecting the information for my team and then making a decision quickly rather than sitting on it and, you know, being swayed because I tend to take, you know, I hire smart people and I want to take their opinion into account.

And I truly do. I mean, I value all their opinions so much. But I have to hone in that scale of decision making and do it faster. I would say my last season was all about getting better at patients and getting better at brand. And personally, like those are the two skills that I've been working a lot on. But I would say my current biggest deficiency is still focus. It's still very, it's still, it's still a daily struggle for me to, to say no to opportunities. I'm a golden retriever, you know, so I just see little squirrels everywhere.

I want to try, why I want to chase. And so if you were taught to talk to my operators, my number twos in any of my companies, they would say, like you have to have like a, you have to have a Cody boundary, which is basically Cody's going to come up with a bunch of ideas. She's just going to vomit them at you for equal. And you have to know which ones she really wants to execute on and which ones she's just bringing to you because she saw a shiny object to the left or right. And then also you've experienced this because we text a lot. I move pretty quick.

And so half of my texts are like her, him, you, them, you know, yes, maybe no. And don't make a lot of sense. So learning to slow down, focus on less things for sure. Double down on the systems, then like really committing to the systems that I use. the idea phase and the action phase is that's never my issue like taking action and and really yeah being committed to a path but sticking to systems and organizing and the things like what's my kPI's what are my how are any of the things all the ideas that I've been implementing are they working or not that's always something that I do better or I do better or

when I focus on that or I partner with people that are really focused on that. Go bigger sooner. Don't be afraid to expand yourself and push your limits. So I tend to fall really easily into my comfort zone. So it's called comfort zone for a reason. You know, you want to stay there. But really, true growth comes from stretching yourself and trying things you haven't done before, doing things that scare you. Focus and stick tootness when I get tired of a project. Those are the two things that probably

plague me the most. I have no lack of energy. I have no lack of optimism. I have no lack of ability to communicate and bring people along with me. But sometimes I have a little bit of that focus challenge where I get excited about too many things at once and can't decide which one to go for. Probably time management. That would be one. Second, probably time. It'd probably be time management. So how does that work out? You didn't manage your time very well when you're answering that question. Like you get distracted or? Okay. So I'm okay. My personality is I, I can get really obsessive with things and I can drive at them basically at full speed. But sometimes that's in a direction that actually is not the best use of my time.

And then I also have the ability to pull people around me. Like I'm kind of one of these like, let's go, get in. All right. That can distract us. And so I would say if a boss, if I had to work for somebody, they would probably critique that. Yeah, Mikey's right. We all have to figure out how to manage our time because it's the only thing that we can't get more of.

You can lose money on a deal. You can get more money. You can mess up a relationship. You can get a new relationship. but you can never get your time back. So we went head on about one of the biggest myths in real estate success. Is there a stigma around chasing success and having it by a certain age? Should people listen to this?

Or do you think everybody's kind of playing their own game? There's no one way to play any game for sure. I think the most important thing isn't that you have success young. It's that you stack the deck in your favor. And the way you would do that is by learning as much as humanly possible young. I actually think, you know, we have some mutual friends that have had a lot of monetary success, really young. But I'm not sure that they've learned the lessons that you want to learn at that age to scale to that really big next level. And so if it's me, I am sacrificing

short-term pay and I'm sacrificing short-term probably. I'm sacrificing my short-term 100K to a million bucks when I'm young. And I'm going to instead spend a bunch of that on learning. Because I think my R-O-I, you know, you can only make 10% a year if you're the best investor in the world on, let's say, 100,000 or a million bucks. It's not enough for you to live the rest of your life off of. I'd much rather put that 100K into myself, because I can ROI 100x on the things that I learn. And people don't really think like that, but they should. They're negotiating their early on salary. They're looking for some crazy arbitrage opportunity or some hot speculative item to invest in. And that may get you to that first 100K or a million, but you're going to

skip all the lessons. And then everybody, you know, I think growth kind of, growth looks like a company. Typically, when you're young, when you're in your, you know, when you're 15, 20, 25, you're pretty much, you're not doing much impressive from a total income perspective. But then all of a sudden, the line for your income starts to go like this if you've been learning, because underneath, you're learning like this while everybody else is trying to do this with their salary. And so you want hockey stick like earnings, which means, slow and then it slopes and you want exponential learnings. So delayed gratification and focus on what you learn, not what you earn. 100%. Is success measured by age or race by a certain age? I would say society

says that success is a race to a certain age. So the younger you are and the younger you get to financial freedom, the more successful you are. I would say that's the push from society. I would say reality though, no. I think there's no race to success because I think success has different pillars to it, right? A lot of times we look at success as just the wealth function, but we skip, you know, whether it's family, faith, fitness, all the other components. And I think when it comes to relationships, especially it takes time to build wisdom and you end up not knowing enough at a young age. So I would say, no, success I think looks better as you get older. Well, I'm feeling a lot wiser after listening to all these smart people. What about you, Rob? Well, I didn't know that was possible,

David, because you are the wisest man I know, my friend. But for me, I'll be the first one to admit that I leveled up with every single answer from all of our guests. You know, what you lack in wisdom, you make up for in charm, good looks, and pure raw talent. If you guys have never heard the vast array of voices that Rob can do, he rivals even myself. Do you want to give me a Nicholas Cage in a spelling contest, try to spell rambunctious? Give me your best Christopher Wacken and expression. Wow, slow down. I've got a fever and the only prescriptions for you to shut you a hole. That's pretty dang good. I mean, I think that could pass as a deep fake. You guys see why we have talented people on the Bigger Pocket's podcast. In case we ever run out of stuff to

talk about real estate, we can just do this the whole time. And if you want to connect it to any of the wise people featured in today's show, just check out our description wherever you're listening and you can find out the best place to follow them. Rob, if people want to find out more about you, where can they go. You can find me over on YouTube at Rob Built or Instagram and threads at Rob Built or, you know, if you happen to be the Delta Lounge in Atlanta, I'm also here recording live. So you can come say hi if you see me talking in a microphone. How about you? You can find me at David Green 24 on all social media. Instagram is where I am the most or David Green24.com. Same goes for YouTube. They let us use handles over there now. Thank you, Rob. And thank you everybody who listened.

We appreciate you helping us get to 800 episodes of the finest podcast in all of the land. We hope you like this one, and we will continue to bring you future shows to help you grow in wisdom, just like my friend Rob here. This is David Green for Rob the massive talent Abbasolo,

signing off. You gotta know when to hold them. Know when to fold them. Know when to something, something. And walk away. Got to know when to hold them. Why are you singing so slow? Let's just get to this.

Is this chopped and screwed? Because you're from Houston. This is a chopped and screwed country song. We might have just started a new trend there. Someone's going to chop and screw Garth Brooks. 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.

On the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico content. And editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk.

So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.