Rich Habits Podcast - 107: Scaling to $1B in Real Estate w/ Brandon Turner

Episode Date: March 3, 2025

In this week's episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz sit down with Brandon Turner.You might recognize Brandon from the Bigger Pockets Podcast or the Better Life Podcast. Brandon has scaled his real estate to portfolio to over 15,000 units representing over $1 BILLION.We hope you enjoy this episode we've recorded with Brandon, no matter where you are in your real estate journey.---👉 Listen to ⁠The Rundown⁠ podcast by Public! This daily podcast does a wonderful job of keeping you up-to-date on the headlines moving the markets.---🔥 If you're serious about investing in 2025, you should be using Public to build your portfolio! No matter the asset class, Public has you covered.⁠Click here to start investing on Public!⁠---⚡️ Still looking for your online investing community? Blossom has you covered. Join Blossom to see Robert and I's personal portfolios!⁠Click here to sign up for Blossom!⁠---🚀 Sign up for the Rich Habits Network so you don't miss out on the next big investment opportunity,⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠---⭐ Download our FREE Financial Planner –⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Download our FREE Budgeting Template –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Earn 5.1% on your savings with a High-Yield Cash Account –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Trade stocks, options, music royalties and crypto on Public –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Automatically buy stock where you shop with Grifin –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Protect your family with term life insurance from Suriance –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Use code “Spotify” for 15% off our 4-module video course –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Optimize your portfolio with Seeking Alpha –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠---👤 Explore everything Austin does –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠👤 Explore everything Robert does –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

Hey everyone and welcome back to the Rich Habits podcast, a top five business podcast on Spotify, brought to you by public.com. My name is Austin Hankwitz, and I'm joined by my co-host, Robert Croke. Robert is a seasoned entrepreneur in his 50s with lifetime revenues of over 300 million, and I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full-time job in corporate finance a few years ago, I've built a seven-figure media business and actively advise some of the most well-known fintech companies around the world. the show name might suggest every episode we talk about rich habits as they relate to business finance and mindset however we try and bring you two unique perspectives one from an industry veteran

which is robert and the other myself someone who's still in the process of building wealth and figuring it all out so robert what are we going to be talking about in today's episode in today's episode of the rich habits podcast we're sitting down with one of the top real estate investing educators in the country, Brandon Turner. You may recognize him as the host of the Better Life podcast and the former host of the Bigger Pockets podcast where he helped millions of people get into real estate investing. He's also the founder of Open Door Capital, which owns over $1 billion in real estate investments and a bestselling author with over one million copies sold. We're so excited at Brandon join us today because he is not just about making money. He's on a

mission to help others build wealth without losing their soul. He's a huge believer in mindset work, goal setting and giving back so you know that resonates well with Austin and I. In fact, he's on a mission to give away $1 billion to fight human trafficking. So Brandon, thank you so much for joining us. Tell our listeners a little bit about yourself and why you're someone who should be listened to when it comes to real estate investing as if having $1 billion of real estate to your name isn't already enough, but tell our listeners a little bit. Give them the backstory because we're so excited to get started. Oh, Robert, Austin. Thank you guys so much. This is a huge, tremendous honor. You guys have a phenomenal show, huge, huge show, huge reputation. So it's an honor to be here.

Yeah, my name is Brennan Turner. I like to start with my dad is a meat cutter, was a meat cutter. Now he's an Uber for the Amish. And my mom did daycare in my house. So I started like Minnesota, blue collar, you know, Midwest, public school, trying to figure things out. And so like I started where a lot of people start from, which is the bottom, for whatever reason. You know, there's a great Warren Buffett quote that says, and I'm going to butcher it, but he basically says, like, I don't know why stocks just intrigued me in, you know, companies. I could have been intrigued by being a schoolteacher. I don't know why. I just happened to pick a thing. Like, the universe made me interested in something that makes me extremely wealthy. I think the same thing is true

for me. I just read a book early on. I was like, I don't know, 20. I read a book on real estate from the library, and I was just hooked. I mean, I just thought that was the coolest thing ever. I don't know why. I could have, you know, I tried to book on, I don't, day trading. It was terrible. I tried to book on, like, stocks. Terrible. Try to book on real estate. Loved it. So, yeah, got into real estate young, bought a property, rented out all the bedrooms to a bunch of buddies. I got to live for free that way. And I thought, well, this is neat. I could do that again. So I bought a duplex. We got married. Bought a duplex. Lived in one unit, rent to the other, got to live for free. And I'm like, this is great. And so I just kept repeating that.

Fast forward 20 years. And yeah, we're just under 15,000 units. And, um, still growing. I love it. And one of my favorite things about this episode is how our messages align so well. I get a lot of flack publicly because I tell people to stop thinking about buying their first property as their primary home and house hack first. I tell everyone that'll listen, buy a duplex, buy a quadplex, use a Fannie Mae 5% down mortgage, find a way to house hack the first property and that'll pay for the primary home when you're ready. So when we got to have you on the episode, I was like, good. Somebody that speaks my language when it comes to real estate and house hacking to get people to understand. It's exactly where I started. I bought a four unit quadplex.

I renovated it. I lived in one unit. I rented the other three units out. And it made me cash flow for 20 some years and helped me build the rest of my portfolio. So this is the very exciting episode. Yeah, you know, I love that house hacking concept, not just because I've done it. And funny enough, not just that I've done it. it numerous times, but I'm doing it.

I live at a $4 million house in Maui. Like the stupid house, the stupid view, it's a stupid house. But I rent out one of the units, it's a triplex. I rent out one of the units to a buddy, which generally I don't recommend renting it to a buddy, but whatever. I rented it to a buddy, and he pays a good, it's almost a quarter of the mortgage, and I have another unit that I, at any point could rent out. It would cover most of the rest of the mortgage.

Now I keep that for my family to come out and hang, but like, I'm still house hacking. At almost 40 years old, I just love the concept because, like, Dave Ramsey talks about, you know, like, how horrible debt is, right? We all agree, like having lots of crazy debt, it's just terrible for you. But if you have debt that gets paid by a tenant and you live in the property, like all of a sudden, like what Robert Kiyosaki talks about, your house is not an asset, it's a liability. Well, no, it's an asset at that point. And so you're making money or living for free. You can take your money, put it into investments. Such a foundation. So we've had a lot to cover in today's episode. We're actually going to be diving into five different topics.

The first one is how to buy your first rental property even with little money down. The second one is the strategy behind house hacking and why it's one of the best ways to start in real estate. The third one is whether or not now is a good time to invest in real estate despite high interest rates. The fourth one is the difference between cash flow and equity and how to prioritize both. And then finally, we'll talk about how to scale your first property into building a real estate empire like Brandon has so successfully done. So Brandon, you are wildly credited with quoting the term house hacking. Robert uses that term literally every time we talk about real estate on the show. I feel like we should be paying you royalties at some point, right? This is just, it's funny. So can you just break down house hacking? I know we alluded to it here,

but how can someone go from like, okay, I've got, you know, I'm renting an apartment or I've got some roommates. So maybe I just graduated college. Like, how do they go from where I am today to I am now house hacking and why is it a good way to start in real estate. Yeah, it's funny, by the way, that phrase, yeah, came from a blog post I wrote called How to Hack Your Housing and Get Paid to Live for Free. And I'm a big believer at any time, this is a media tip, I guess, more than anything. But anytime there's a concept that people do that takes more than one sentence to explain it, I'm like, oh, it needs a word. So like, I just like constantly make up words for things and then, you know, one in a hundred happens to hit. And how long ago was that, if you don't mind

me asking? Yeah, that was, man, had to be 15 years ago now probably. It was one of the The very first thing I ever wrote a bigger pocket. That's so cool. Yeah, it was a long time ago. And it hit because it was already being done. And I didn't invent the concept, obviously. I just put a name on it because of a marketing guy. And so here's why I love house hacking.

I mean, to explain it in kind of a story, right? It's like I said earlier, like even this $4 million house in Maui, I'm reducing my mortgage by a significant amount, even almost all of if I wanted to. But my very first house, I bought a single family house for 80 grand in a rough area, and I rented out the bedrooms, got to live for free. So house hacking is the idea where you're using. using your primary residence as an investment rental property as well at the same time. So that could be a single-family house, we rent out the bedrooms, or it could be a duplex or a

triplex or a four-plex. Now, the beautiful thing, the reason we say one, two, three, or four units is because the FHA, which is a loan program sponsored by the government, I don't know, let's mean it's sponsored the wrong word, but put out by the government or insured by the government, that program allows just 3.5% down payment on your property. And that's good for a single family, a duplex, a triplex, or a fourplex. So we're talking, if you could buy a $500,000 fourplex, let's just say. And again, every area is different.

Some people will yell at me and say, you can't find a parking lot for a 500 grand. And other people will say, you know, you can buy a mansion for that. So just ignore the numbers. But the idea, what's three and a half percent of half a million dollars? I don't know, like 20 grand-ish? I don't know. I'm not a math guy. I'm a real estate guy.

But it's like 20 grand, right? It's all of a sudden, that's not a tremendous amount of money to buy. Now, would I normally recommend buying an investment property at 96.5% leverage? No, probably not. However, if you're going to live in the property, especially if you buy something that's maybe a little bit of a fixer-upper, and now you get the opportunity to build equity, you're living in the property, the cash flow allows you to live for free or at least reduced your amount. And then over time, what's that $500,000 worth?

You know, is it $6, $7, $8,000 a million over time? Probably. And so what I would say, house hacking is like training wheels for an investment. investor. It's really hard to screw up. It's really hard to destroy your life by doing it. And you can try it out. Hey, do I like being this landlord? Do I like this thing? Am I getting a bit by the bug, so to speak? And it's it's changed. Yeah, millions of lives. So I guess my follow-up question would be, I know a lot of people, it might sound sexy to do that, even to myself, but, you know, on the same side of the equation, like borrowing 96.5 percent like that is leverage and that's debt. So like,

especially now as interest rates around this like six, seven, eight percent range. And maybe for the person who's like intimidated by being a landlord or like maybe they're not that handy, do you have any like tips or tricks or just like ideas that could help that person take their first step toward house hacking? Yeah, a couple of things. One, you don't actually, if the fear is I don't want to be a landlord out where my tenant coming over and talking to me, no one says you have to tell your tenant you're the landlord.

This is often a little known, little known trick, but you can hire a property manager, literally. And then you're both just the tenants that live in the property. The other tenant never has to know. So just if that's your fear, it's a good way to just reduce it. In fact, for the first couple years of me house hacking, I always would just tell the tenant that I was the property to caretaker. And like the other, I just take care of the property for family. Well, yeah, the family is my wife.

But like I take care of the property for my family, like for family. It gives me that really easy out of like, well, let me go ask, let me go ask the family. Let me go ask my, you know, the owners. And then I'd come back and I could make a decision. So that was a good tip for me early on. and just never let them know that I was a sole owner because then it just puts, you know, all the responsibility on me. And I'm a nice guy, right?

They're like, hey, could I have this pit bull with rabies? And I'm like, sure. Why don't you get two? Like, I'm just like, nice guy. I want to give tenants everything. So instead, I put the blame on someone else. Oh, yeah, talk to the family about it. They're just not into that.

So number one, that helps a lot. Number two, the great thing about real estate is the ability to do math ahead of time to kind of, like, estimate your future. Like, I have no idea what Apple's going to do in the future. And I have no idea what Tesla is going to do. I mean, I can make guesses and I can do broad investments. I'm not saying stocks are bad. But with rental property, you can get a pretty clear picture.

I'm assuming you're halfway, you know, you've done a little research into how to analyze deals, into what the rent is today. I mean, if that place is 1,200 a month, and that place over there is 1250, and that one's 1275 and that one's 1175, I know mine's going to be in that if mine's a similar property. I also can tell what my mortgage is going to be. I can know what the insurance is going to cost and the taxes. And I can run those numbers and say, okay, I'm okay taking that 67 or 96.5% loan to value that high leverage debt, knowing that I'm going to make money every single month.

Like, I don't mind that debt. And again, Dave Ramsey and I might disagree on this one where Dave said there is no good debt. I tend to say there is some good debt. And good debt is debt that's paid by an asset that brings in more than what it cost to pay the debt. So I'm okay with that. Does it increase your risk a little bit? Of course.

but no risk it, no biscuit. So I'm a big believer in that. And then, again, you're not stuck in it forever. I think people oftentimes assume you buy a real estate deal and you're forever. Yes, it's not liquid like stocks. You can't just go and sell it like a Bitcoin. But like, okay, it doesn't work out. You go and resell it.

And okay, worst case, you lose five grand, let's just say, five or ten. Oh my gosh, you lose 20 grand. Horrible, right? But what if it works? And what if you discover a path towards real estate? You could lose 20, sure. Or you could make a million on that one. deal over the course of 30 years. So it's an asymmetric bet to like the craziest degree.

You might as well try it. There's so little downside and so much dramatic upside. And there's a million resources. Let's say you had an idea. Last point on this. You had an idea. You're like, I'm going to go make a dog walking business for people with Rottweilers. Like, that's probably never been done. It might not work. It might work. Entrepreneurship is incredibly difficult because most things are brand new. We don't even know what they are if they're going to work. There's a reason that 90% of businesses fails because, you know, there's a lot of, we don't know what we don't know. And we don't know the systems because that thing has never been done. Now, I've heard, I don't know if the stats totally true, but I've heard that 90% of franchises

succeed. Why? Because it's been done over and over and over and over. So the systems are there. So you just follow them. Rental properties are like the ultimate franchise, right? There's literally a thousand books published every year on rental property investing. There is, last study I heard, there's eight million investors in real estate in America.

Like 8 million people can tell you what they've done wrong and what they've done right. So again, you're not making things up. You're not reinventing the wheel. You're just doing what millions and millions and millions of people have been doing for really probably thousands of years. So it's a very solvable problem and a low risk to get into house hacking. Yeah, I love it. And a couple key takeaways for all of our listeners. I've been at it a very long time as well, just like Brandon.

And a few things that I really take away from what you said is if you catch the bug. Because a lot of people get real estate investing wrong early on and they think it's all rainbows and unicorns because all the fake gurus say it is because they want to sell an expensive course. It is not. There is always going to be setbacks. It's always going to take longer, cost more than you think. But at the end of the day, if you catch the bug, it is one of the best ways to build wealth and sustain and grow wealth. So I really love that phrase of if you catch the bug because so many people think real estate is super passive. And they can just, you know, write a check and buy a house. And the gurus tell you you don't even have to visit the property. They've never seen the property. And they just put it in the hands of all these managers and it's all going to go smooth. That is not true.

Even at Brandon's level, there is still, you need a good team. You need solid partners. You need really good GCs and all of that to make sure that the projects go smoothly. Because trust me, there's a million ways it can go wrong. But if you catch the bug, it's very important to understand. this and you start doing it more and more, then you have all the processes in place. You can build your team and that's when you can truly scale like Brandon has. And I love that for people, but you can always start out like he said, very, very small, buy a single family fixer

upper, buy a duplex, buy a quadplex, whatever it is. And then just grow from there. And you can always find a good partner that's been doing it for a long time if you're not sure on the first deal. So keep that in mind. Now before we jump into our next question with Brandon, I need to make sure that everyone knows about public.com. If you are serious about investing and not just investing in real estate, but also investing in ETFs, stocks, crypto, bonds, and maybe even options, public.com is where you need to go. You can even earn some of the highest yields in the industry like there's 6% or higher yield that you can lock in right now with their bond account. Public is a FINRA registered, SIPC, insured platform that takes your investments as seriously as you do. Fund your account in five minutes or

less at public.com front slash rich habits and get up to $10,000 when you transfer your old portfolio. That's public.com front slash rich habits paid for by public investing, full disclosures and podcast description. As you guys know, we love public.com. They're a wonderful platform and cannot recommend them enough. All right. Let's now jump back to the interview with Brandon. So speaking of getting started, when do you think is the right time for someone to buy their first investment property? Do you think they should start with a primary home? We've discussed that. We've discussed duplexes.

Because Austin and I talk about it all the time. And we believe that people should have their base built. Something that is a key component to our message is build your financial base first to like we like to tell people $100,000 that is saved and invested in the index funds and ETFs. We talk about, and I think this is very important, but I want to hear from your perspective, because we just had a question the other day where I believed a couple had $17,000 to their name, and they wanted to go buy their first rental property. I feel it's a mistake. I've seen people go broke before where they've got all $40,000 of their dollars that they have

saved into one property that doesn't go as planned. Then they're starting over or it doesn't sell for months and months, and they didn't realize the carry cost. So walk us through it in your opinion. When is the best time for that person that's hungry to get into real estate to get started? That's such a great question. And you know, it's obviously a nuanced one, right? And there's a lot of depends.

But let me give you a few thoughts. One, when I was starting out, I was working at Coldstone Creamery, scooping ice cream, singing, you know, we used to sing for tips. Great job. I made like $9 an hour with tips. It was like 11, right? Did save up $100,000 back when I was doing that, it would have taken me a hundred years. right so there is a situation in which you know i don't i didn't have much to lose i didn't have any credit didn't have any income didn't have any assets so if i when i jumped into real estate with no i mean no

money like all i mean i maybe had a thousand bucks to my name do i regret that not at all because what would have worst case scenario i would have been right back where i was which is at the bottom and so again no risket no biscuit i'm kind of i'm kind of a fan of that now that said you've got a career you've got some money, you're, you know, you're building your business, you've got 10 grand. Should you go dump that whole 10 grand and some house flip? Probably, probably not. I mean, again, I think having good reserves, and by good reserves, I would say at least being able to make six months of your payment, should you get no rent whatsoever, or the house

doesn't sell, mortgage, insurance, taxes, repairs, all of it for six months, minimum, after putting in the down payment and all that. So I would say that's probably the line I generally use, and that's what a lot of banks uses six months reserves. But again, if you, if you, it depends on where you're at a little bit. And so I, I'm a bigger advocate of jumping in earlier, uh, in that you get those, like, lessons learned of those hard knocks early on and you fight through it. If you're willing to fight through it.

And some people are just not. And then they should not invest in real estate period. Like you said, if you get the bug and you're willing to go through the hard times, I mean, there were times where like I'd be doing a house, a remodel and I went so far over budget. And I had to, you know, go out there and paint the house myself. and crawl under and fix the plumbing because the plumber wanted $8 grand. And I'm like, I don't have that. So I spend, you know, a week under a house and an eight-inch crawl space with spiders on my face,

fixing plumbing. And I want to scare people up. But sometimes, like, when you're young and you have no money, all you have is your skill set and drive and motivation. So I had to use that in place of money. The other thought, just one more thing. And I think we're going to get to this probably later on the idea of like no money. But there's also a way to invest in real estate that doesn't put you out risk.

And like you just alluded to Robert, you find somebody more experienced. In fact, one of my buddies, Scott, lives out here in Maui, a super good dude. He's been helping me out as a landscaper on my property. I started teaching him about real estate a little bit. He started following what I'd do. He didn't know who I was before he started working for me. And then he got the bug. And he's like, I really want to do this.

So I'm like, all right, let's do it. So together, we just bought a house in the Atlanta suburbs that we're going to rent out. And, I mean, technically speaking, he did put some money in. He had some money and he put some in. But, I mean, worst case scenario, this deal goes just disastrous. Okay, well, I just cover the car. Like I cover his loss should something bad happen. That's like that's my part of it.

I'm the financial guy. So when I say, hey, Scott, you shouldn't invest in this deal because you need to have $100,000 saved. I'd say, no, you figured out a way to do it, even though you might not have $100,000 saved. I think I've told the story a couple times. But when I bought my first primary residence, my first house, I was 24, 25, 26, something like that. But what happened was I was renting and our landlord sent us something in the mail that

said, hey, your rent's going to go from 1,600 to 2,300, you're in Nashville, rents go up, figure it out. You have two months. And I'm like, geez, $2,300, like, that's a mortgage. And so this was before I knew anything about the FHA loan and, like, all this stuff. And I found a really cool neighborhood about two or three miles down the road, so my commute wouldn't really change. It was in a cool spot of, you know, Nashville. And I ended up putting $10,455 down, which was like all the money I had to my name. I had to go into credit card. debt to hire the movers and to get some furniture, right? So it's like, that, that was stupid. If I would go back and like, if someone was like, hey, like, do you think I should do that? It's like, no, you

shouldn't go into credit card debt to hire the movers. Like, you really don't have money if that's the case. But like, one, it worked out great. I just, you know, to your point, you kind of put yourself in a situation to figure it out. And I think like, like, nothing's more dangerous than someone who has their back against the wall and just have to like figure out life. So like that was sort of my figure out moment. But looking around to now where interest rates are higher, and, you know, I think the average mortgage is probably close like $2,200, right now. That mortgage was closer to $1,200. So it was like way different. I like the rule that you had mentioned around this idea of having enough for a down payment. You want to have your emergency fund, like personally, like three to six months of expenses.

But if you approach this as a landlord, right, have the down payment to cover that three and a half, maybe 5%, and then also have up to that six months of like reserves. So if you can't find a tenant, if something's going crazy, you're going through an eviction process, right? All these crazy things happen when it comes to real estate. You are not going to be put in a situation where you've got to, you know, sell out of your retirement early to cover some crazy expense or, you know, go into credit card debt or, you know, have to, you know, take on a personal loan or something at a high interest rate that's going to set you back financially. I think that's the biggest thing that Robert and I try and share with our audience is like, you want to have a buffer between you and life.

Because if that buffer isn't there, it forces you to do things that are very silly with money, like selling your 401K investments early or selling out of your Roth IRA early or going into high interest credit card debt. No one wants to do those things. And those are very bad for your financial future. So if you set yourself up in this like, call it $50,000 to $100,000 base that we encourage people to have invested and saved and built before you begin to diversify into real estate, It gives you enough buffer between you and life.

But to your point, you know, having some down payment, a couple months worth of reserves, I can understand that. The other thing I would encourage people is to really, really don't underestimate the importance of knowing how to accurately run the numbers on a deal. There's something I often call there's pure cash flow and then there's phantom cash flow. And people say, oh, I have a property that cash flows X amount. I'm always wondering, is that pure cash flow or phantom? What I mean the difference is, if let's see you have a rental, your mortgage is $2,000 a month. that includes taxes and insurance. We'll even give them that.

So it's $2,000 a month, including tax insurance, and the rent is $2,500. Most people would say, I cash flow $500 a month. And I would say, no, you lose about $500 a month in reality. And they're like, well, what do you?

No, of course. I look right here, $2,025. I'm like, well, what about repairs and you got to fix things? Well, you know, things don't break every month. I mean, but on average, over time, it does. And it's usually 5 to 10%, maybe even 15 on a smaller, you know,

older house. So let's just say it's 10%. Okay, well, that means it's $250 a month on average just for the repairs. Then what about replacing things? Or if refrigerator goes out every 10 years, the windows go out every 20 years, the roof every 20 years, the furnace every seven years. Okay, average that out out.

That's another 10%. Oh, now we're at another $250 a month on average. What about vacancy? It sits empty once every two years for a month. There's another 5%. So now of a sudden we're in the negative, right? So when you really look at the actual cost of owning rental properties, you've got to do the pure cash flow calculation.

I call it pure because gold goes through the fire to get purified. Like when you put rental properties through the fire of analysis of saying what all could go wrong over time averaged out, that's pure cash flow. And if it purely cash flows, actually cash flows in reality. Your risk drops dramatically, especially if you have good stable debt, which I would always recommend, get a fixed mortgage if you're going to buy rental properties. Then, okay, you can, as long as you can hold it. you can always win in real estate. This is one of the secrets to, I mean, really all finance, right? But as long as you can hold it, you're always going to win. I mean, unless an asteroid hits or something crazy, but a house in 30 years is worth more than it is today. And you paid it off

over that time. So how do you not win? As long as you can hold it. And that's the tough part, holding it. So I'm going to say two things to this, and that was great. There's an old saying, do as I say, not as I do. And I'm going to change it a little bit. And that is do as I say, not as I did because Brandon, you brought up a good point. When I first got started in real estate, I want to say it was perfect and I had my bridge account set up and I had my base built and all that. But being a true entrepreneur, a lot of times you just go for it and you're like, here's the opportunity.

Betty down the streets got this old rundown house. I know the neighborhood. I know people. I'm going to buy it. I'm going to fix it up. It's going to be great. And you learn along the way. And I think it's really important for people to understand.

that we would love for everyone to listen and build their base first so no one goes broke in the process of trying real estate and buying their first property but not everyone's going to listen and i never want to be the person that quells someone's entrepreneurial spirit but then secondarily a big point that i want to make to kind of wrap that up is understanding the numbers and the total ownership cost of a project is easier than it's ever been when i started 30 some years ago in real estate, we didn't have any of this. You literally looked at it and you go, well, I need a roof. I need this. I need to paint. I need to fix everything. I think it's going to cost 30 grand, but you had no idea. People today, entrepreneurs and wannabe entrepreneurs have all the advantages.

It's unbelievable and I'm so glad at my age to be alive during this golden era of technology and all the tools we have now to succeed. It's just so, so incredible. And so I'm glad. you guys discussed that and kind of alluded to it of, you know, humble beginnings and how to get started. So that brings me to my next point is Austin and I talk a lot about and covered a lot in the private community and on the podcast. And that is how do you buy the first property? You know, a lot of people think they need 20% down. I do owner financing all the time. You and Pace really use the sub two as that word you've created now to make it sound really cool. fun, but how do people get started and what are some of the creative financing options you could

share with our listeners around purchasing real estate when you don't have a lot of money? Because, you know, I talk about owner financing, hard money lending, you know, all of those things. But give us some insight from your experience of some of the crazier ways you've been able to get financing done early on. You know, we talked about house hacking. I still argue house hacking is the greatest no or, you know, low money down strategy for getting started. Now, some people might be like, listening and go, well, I don't even have the, you know, the 20 grand down that I need. Little known fact is that you can actually bring in a partner to fund the down payment on a, even a house hack, as long as one person lives on the property, as long as you're in the property.

And I don't know if we made this clear earlier. The house hacking idea with the FHA loan, you only have to live there a year. So people are like, well, I don't want to be trapped in a house forever. Just a year. That's it. And then you can move on to another house. And yes, you can only have one FHA loan at a time. But fine, next time you go 5% down conventional.

And another five, you know, so there's ways to do this. So house hacking, love that strategy. But probably my favorite way, and I'll illustrate it by a story. There's a triplex years ago I really wanted to buy. It was super cheap, nasty little property. It needed a lot of work. But I knew it was a home run. I just knew it was a home run.

But I needed like, I don't know, 30 or 40 grand. I think probably 40 total for repairs and a little bit of a down payment. And I didn't have that. And so instead I just went to this friend of mine at church, this guy that I met at church. And we'd been talking about real estate just casually, like, you know, in that awkward greeting time, if you were to go to church, there's awkward, like greet your neighbor kind of thing. We just talk about real estate for a minute. So I mentioned to him about this property.

I say, yeah, yeah, I got this really cool deal. I'm looking for somebody to partner on it with me. Do you know anybody that'd be interested? And he's like, I might. And so him and his wife came in. They brought the $40,000. We bought the property. We each made about $5,000 every year on that.

I put no money in. He put, you know, $40,000 in, and it just worked. And we held it for a long time. Each made around $100,000 when we sold the property. It was just a win-win across the board. And he had the money. He had the credit. He had the ability to borrow, but what he did not have, and this is kind of the theory that I'm

getting to here, he didn't have the knowledge or the hustle, like the drive to actually do it. So in real estate, I always say there's three things you need. You need the knowledge, and you know what you're doing, how to analyze a deal, what makes a deal, what properties, cash flow, et cetera. You need to have the drive to actually go and do it. It's the hustle. It's the making the offers and the guts to go do it. And then you got to have the money.

But you do not have to have all three. If you're lacking the money, you just bring the other two. bring the knowledge, bring the hustle, there are far more people out there with money than there is with hustle. Like there's far more, there's millions of millionaires in America, millions of them. Yeah, especially with the fact that real estate's gone up so much over the last few years, like there's a lot of millionaires. There's probably a million millioners in California.

I don't know. There's, they're everywhere, right? So once you have that abundant mentality of like, oh, I can get the money if I'm just good at the finding deals and the way you get good at finding deals is knowledge and hustle. Okay, I'm going to go focus on that. So that brings me to my favorite, probably my favorite strategy. I've used to scale up my portfolio, which is that partnership thing with that, like my buddy from church.

But you can do it on a single family house. You can do it on a multifamily. You can do it on an industrial property. I have 2,500 investors right now. We just do the same thing. I find the deal. I do the work. I mean, my team does.

And then they bring the money. They bring the down payment. That has worked out really, really well. And so again, I like that approach because it's probably the most expensive approach you could take. Like, it would be probably cheaper to go put it on credit card. I mean, in reality, you're giving 50% of a deal away maybe if you partner versus 29% on a credit card. But it is the safest way, in my opinion, to invest creatively.

Because it's somebody else who has the money. They're the ones bringing it. And I would rather do twice as many deals, but give away half the profit for the security of knowing that I've got the financial backing to make these investments work. So I love that strategy. I mean, there's dozens of other no and low money down stuff. Like you said, sub two lease options. You can take out a home equity line of credit on your house if you want to. It's almost like a credit card, but usually like 5% interest.

And you can use it to buy property and then pay it off and use it. There's a lot of fun strategies out there. But my favorite would be the equity partnership for sure. Double click on the 203K loan and the SCR loans. Yeah, I love the 203K loan. I love this. This is my favorite loan products in the world. It's part of the FHA program.

So it's still 3.5% down. But the beauty of 203% down. but the beauty of 203K is that it allows you to wrap in the repair costs. So earlier when we talked, so you got to house hack this thing, but let's say you find a house. Let's say you find a duplex, whatever. And it's 200 grand, but it needs $100,000 worth of work. So now you're in for $300,000, you know, $300,000. But because of that, you know it's going to be worth four.

And by the way, those are completely normal numbers. Those are not crazy. You can find a $400,000 property that you can buy for two because it needs $100,000 worth of work. So that's a doable scenario. Well, normally, you'd have to put down 20% on the 200, and then 100 grand for repairs in cash. So you're coming with, what's that, $140,000 out of pocket? The 203K loan allows you to wrap that all in together. So 200 for purchase, 100 for repairs, is 300 total.

And they say just pay three and a half percent of that. Well, now you're looking at, like, what's that less than 12 grand for the all-in? And now you use the money, the FHA 203K loan pays the contractors as you go. Now, it is hell to do this. Like, it's a lot of, it's government. It's government and banking combined together. So it's, it's red, oh, three things. Government, banking and contractors all combined together.

It's like the three worst administrative things in the world, and you combine it all together. So there's a lot of red tape to get through and you got to file the right paperwork at the right time to this person, and it's annoying. But at the end of the project, you may have a cash flowing property that's on a fixed rate mortgage, that's low interest rate, you know, comparatively. You're not paying crazy hard money rates. And you have a hundred.

thousand dollars of equity in the property that you could sell it if you had to right then and make a bunch of money you can hold it for a long time and the value of that property goes up over time based on the higher amount this is gets a little bit in the weeds but you're not increasing from 200,000 at 3% per year you're increasing at 400,000 from 3% per year on average over the next 30 years so it's like you get this like immediate it's like buying a stock for those people's stock it's like you buy Tesla and whatever I don't even know what any any stock at $100 a share and an immediately goes to 150 a share the first day, and then it climbs from there. Like, that's what we're doing with real estate by doing that fixer upper strategy.

Yeah, I'm just a big fan of the 203K loan. I love doing it. And the whole Burr strategy, if you're familiar with that, is really just like a twist on the FHA 203K idea. It's buying a fixer upper and then holding onto it as a rental. So you're flipping it to yourself, essentially. And so like you mentioned, like there's a lot of red tape, it can be kind of difficult to go through some of this stuff.

Maybe there's someone listening right now who's in the weeds with. their two or three K loan and they're just trying to figure it out and they're holding on for dear life. Do you have any tips or tricks for people? Because I feel like this is definitely one of those financial loan products that can really help people go from zero to one with real estate, especially if they only have enough for a decent down payment. They might not have the network. They might not have the church friends. You didn't mention the Mexican restaurant story. So I encourage you to do that as well. But do you have any tips or tricks for people that maybe are really in the trenches with these two or three K loans and are trying to figure out maybe new lenders?

Like, just anything around that? Yeah, a couple of thoughts. There's a book out there. I'm going to sound like a complete deviation to your question, but I'll come back to it. There's a book out there about the whole 30 diet. I think it's called like the whole 30 diet. The whole 30 is like a really strict diet. I read this book one time, but I don't remember much of the diet, but I remember a line in the first chapter.

And it said this. It said, whole 30 is not hard. Cancer is hard. Your spouse leaving you is hard. Drinking your coffee black is not hard. Right? And I love that line. I use it all the time with things.

I'm like, we think things are hard. in business, almost everything is actually an email or a text or a decision. It's all really easy stuff. What's hard is identifying what decision means to be made and then having the guts to make a decision. So it's not even, it's not hard. And so the reason I bring that up is because, and this is just a broad, uh, principle that I apply to my life, but I'm always wanting to ask, what is that most important next step?

I call it mins, M-I-N-S. And I'm like, what is the very next thing I have? have to either do or decide. Like, and it's the smallest thing. So, for example, let's see you're going through the 203K loan. Yeah, it feels hard. Well, it only feels hard because either you don't know what the next step is. Okay, well, then your next step is to figure out what the next step is.

Or your next step is to make a decision or to go do something. And the do something is usually send an email, make a phone call, shoot a text to somebody, ask your contractor why he wasn't there today. It's pretty easy stuff. We just simply ignore what that next step is. And so we sit for weeks or months, not take. action because we just haven't identified what action to take. And so it's like, this may be a dumb metaphor, but it's like if you read a book one page

every month, it would take you 300 months to finish the book. But if you read a page every hour, it would take you 300 hours. If you read a page every minute, it would take you 300 minutes, right? The consistency and the persistence matters, but also the intensity or the frequency, maybe we'll call it. Right? So if you're making decisions frequently, like every minute, you're going to move that 203K loan much faster.

And that, again, goes to every area of your life. If you wait a week to make a decision, that didn't take you a week to make a decision. It takes 10 seconds to make a decision. You took a week, a break before making a 10 second decision. And so in my life, and this applies again, everything, is I'm always asking myself, how do I just move the ball down the field just a little bit? How do I make that next step? What is the next step?

Can I make it right now or put it on my calendar so it gets done? Anyway, that's my best advice for any, like getting through a loan process, is it's actually not hard. It's just something we haven't decided on or figured out what they decide on. Well, it really reminds me of our conversation with Sahil Bloom. He was on the show a couple weeks ago to talk about his new book, The Five Types of Wealth. Yeah, I'm in the middle of that right now. It's awesome. Dude, it's such a good book. I'm right there with you. He was talking about the most successful people that he's met in his life have a razor thin sort of gap between learning something and acting upon what you just learned, right?

So to your point of like, you know, you need to take the most important next step, you figure out what that next step is, and then you actually go do it. Do it. It's so simple. Yeah. In my career, one of the biggest things that I have seen and probably the word that strikes the most accord with me is I want tenacious people in my life. Because I have seen some of the brightest minds in my lifetime and in my career where when

they run into a wall, they don't figure out how to. climb it or get around it, they just give up. And I think that is one of the most important mindset hurdles that people need to understand is that guys like us don't get to where we are by giving up. We're tenacious. We keep going. We figure it out. We call. We email and we just pound and pound and pound until we get to the end. That is how success is born. That is how it is bred. And that is how you get to the next level is by not giving up as soon as something gets hard. And I think it's such a great concept to unpack. So I appreciate you guys bringing that up because it just happens so much to so many gifted people and talented people. They just don't have the drive and the tenacity to make it to

the other side. Yeah. And that goes down to the mindset thing, right? It's like if you believe there's always a path forward and you really believe that you're going to figure it out, then you'll figure it out. But as soon as you believe, like you set to believe that there's not a path forward, you give up. That's like that. I want to always believe there is a path. There's just something I haven't figured out yet no matter what. So whether it's a 203K loan or whether it's trying to find a property or whether it's trying to, how do I let go of an employee?

Like there's always a way to get through whatever you're going through. And if you really believe that in your soul that you, there's a way forward, then you will figure out that way forward. It's just mindset. Yeah, I always tell my team, there are no problems. There are only solutions that you haven't found yet. That's beautiful. And I always really say that to all of them.

and they just get because it's not true. Stop worrying about what's happening and figure out how to fix it. And it really just loosens their minds up a little bit and gets them to understand that you have to figure it out. You can't just quit. Oh, I love it. Now, Robert, I want to pull away from the interview with Brandon just real quick because I want to give a shout out to the rundown by public.com. It's their daily podcast that's seven to eight minutes long hosted by my friend Zaid Admoni. And he does a wonderful job of breaking down the market moving.

headlines that happened the previous day, and it's in every morning episode. So you get all the information you need every single day. They also do a weekend deep dive episode. I think last weekends was about like Uber Eats versus DoorDash, and they go into the weeds about all the fun differences and how these businesses are built. It's a wonderful podcast. So if you want to listen to the rundown by public.com, there's going to be a link to the show in the show notes below. I love it because, as you stated, seven to eight minutes, I listened to that. I listened to them all the time in the car because I can get through it, see if there's anything I'm missing because they do a lot of really good deep dives and the information is great. Okay, let's jump back

into our interview with Brandon. So a big concern right now are interest rates. Interest rates are high. Again, when I bought my first property, I think I had a 3% interest rate, 3.1, something like that. The mortgage is like $1,200. A identical property, the mortgage is closer to $2,500. The house I'm in right now. is a 6.6% interest rate. So it's like a completely different game, right? I can't command rent on a $2,500 mortgage in this neighborhood. This is just my house. So it makes sense for me financially. But back to this idea of high interest rates, phantom cash flow versus real cash flow. How do people find cash flowing real estate investment properties in 2025? Is there a strategy? Is there a part of the country? Is there like how do they find those deals?

today with high interest rates and everything that's going on. Yeah, this is my favorite thing to talk about these days because I feel like most people trying to get into real estate look at the price because yeah, prices are maybe double and interest rates are double. I mean, it's just, it's ridiculous, right? And so they look at that property and like, well, it would only rent for $2,000 a month and my mortgage is $2,500. Now I'm negative $500 just from day one.

And that's not even accounting the repairs and vacancy and capax and all that stuff that goes into it. So what do you do? Most people give up, right? Because most people say, oh, too hard, can't do it. But then if you believe there is a way forward, then you ask the question that you're asking, how? I think the most powerful word in the English language is how. Like, how do we get through this?

Not can we, but how do we get through it? And that leads to like these, what I call the fringe strategies is where I see the best opportunity today in real estate. Back in the old day, you go get a real estate agent, go on, you know, realtor.com or Zillow, find a property, put 20% down on it, and you're cash flowing and it's great and everybody's happy. That's 2012, 2013. It doesn't work like that anymore. Instead, I'm trying to think, what are the fringe strategies? So I'll give you like four or five examples. And these are not in any particular order.

It really depends on location and all that. But Airbnb still works. Like short-term rentals still work. Now, they are very different than they were even three years ago. The market got way over competitive, overheated. I interviewed a couple yesterday on my podcast. They are making thousands of dollars a month on an Airbnb that they own. It's a bus.

They remodeled a bus. They call it the beach bus. They spent 20 grand. total. 15 to buy the bus, five to remodel it. They put it in their front yard of their house, and they're making thousands of dollars a month on this bus, the beach bus. It's wild, right? So, like, this couple said, how do we make Airbnb work? They figured it out. So Airbnb is one of them. Midterm rentals, super interesting. Like traveling nurses and construction workers, they need places to stay that are furnished over a long period of time. There's a great website

that kind of facilitates this kind of the Airbnb of that world. It's called Furnished Finder. They can pay sometimes double what you get a normal rent just because you have a couch and a bed in there. And so that's a cool strategy. One of my kind of current obsessions is something called co-living or rent by the room. And like the Airbnb of that is called Pad Split. They're the biggest company called Pad Split. And so I just bought two of those actually to kind of test out the idea because I like the idea. It's crazy to say it out loud, but it's like you literally take a house, add bedrooms to it, you know, legally.

But let's say you go from a five bedroom to an eight bedroom. And then you rent out each room separately. You got a lock on each door. They share the kitchen. They share a bathroom. Maybe. Maybe they get their own bath depending on the house. and they just live in their houses.

And again, it's like, well, who would possibly ever do that? Yet anybody who makes less than 50 grand a year and a loan and single? Because, like, if you're in any major city, you're in Nashville and a studio apartment, $1,600 a month where you want to live, but you can go get a bedroom in a house for $900 a month, yeah, I'm going to do that all day long. And there are literally tens of millions of people in America that fit that bill that make less than $50 grand a year that are single. So it's a huge market.

So now, let's say you take that eight-bedroom house and you're getting $900 a month, out of each bedroom, you're bringing in $7,200 a month. Now, are there other expenses? Yeah, you've got to pay the electric bill. You've got to pay the internet. People are going to move out more often. I'm not saying there's not problems, but all those are figure outable. There's a great book, Marie Forleo, right?

It's called Everything is Figure Outable. And I love that. I use that phrase all the time. It's all figure outable. You just figure out. So anyway, those are the fringe strategies. Assisted living is one of my favorites. One of the most difficult.

But residential assisted living, you buy a house. Maybe it's got five bedrooms in it. You widen all the doorway. You put up the shower handle so that they don't fall. And then those things on average in America, the average room in a residential assisted living goes for over $5,000 right now. So, yes, you have to have some staff there, part-time or maybe full-time. Yeah, it's complicated.

How are you going to find people to work there? Oh, my gosh, it's going to be so hard. What if the person dies? Like, okay, we figure it out. Everything's figure outable. One residential assisted living house, I have a buddy who does a lot of these. And his number, by the way, is $10,000 a month in profit per home. or he won't do it.

Like, one house can get you out of your job. One house. So if I told you, you work your nights and weekends for the next year to learn and then put into practice a residential assisted living house and you're going to make a bunch of mistakes, that first year, in fact, the first one you buy, let's be honest, you're probably not going to make a lot of money. You're probably going to break even because you didn't know what you didn't know. Okay, the second year of your life, you buy a second one.

And that one makes you $10,000 a month going forward. Would you spend two years of your nights and weekend to get the $10,000 a month for the rest of your life and give you a new career that's pretty flexible. I would in a heartbeat, right? So those are the ways, that's how I'm thinking about real estate now, are these fringe kind of like nuanced strategies that are a little more business, a little less real estate, and they just work. And how do you know what those are? Listen to podcasts of people doing it. I just pick one and go with it. Yeah. I think really to unpack this a little further, it's about getting creative. The people that win in any sector, especially real estate, when Airbnb,

B got really oversaturated because everyone was selling a course of how to do Airbnb and arbitrage and all that. The people that continued to win in Airbnb that didn't have a lot of money got created like the bus people. I know a guy right now that crushes it in Boise and he has a train car in his side yard where he actually put railroad tracks, put the train car on the tracks and it's only 20 feet of track, maybe 30 feet. crushes it because this train car is in his side yard right next to a waterway, right next to the parks. He prints money with this thing, but he got creative. He paid very little for the train car. He did what you said they did with the bus put in 20, 30 grand, but it's being creative. And I talk about it all the time.

People should be looking at old schoolhouse buildings, old campgrounds that they can turn from a campground to a tiny home community. Get creative. and that's where all the wealth can be built in these fringe concepts. So I'm so glad we're covering it today. Yeah, that's super cool. You know, the last point on that, it goes back to mindset, whenever I teach any of these strategies, especially if you look in the YouTube comments of this video,

like you guys probably have a better audience, but I'm a lot of podcasts that, like, the YouTube comments are just atrocious. And the number one comment is usually that can't be done or that's too hard. I don't want to, you know, get old people and deal with them. And like, there's two types of people in this world, right? Some people see something that's hard and they say, I don't want to do that because it's hard. And then there are people who say, that's hard. I want to do that because that's hard.

And who do you think becomes wealthy, right? It's the people who say, that's hard. Like, money is in hard. Wealth is in hard. Or it's in time. I guess you take your pick, right? You can throw money in the S&P 500 and for the next 40 years and you're going to be wealthy. If you want to be wealthy quick, it's in the hard.

And there's no other way around it. It's just in the hard. But I think it's also about understanding that the most successful people, that I've ever met have zero analysis paralysis. They don't overthink it. They do their research. They go for it. And it usually works out.

And I think over time, especially now, because people can hire mentors, they can hire partners, they've got podcasts, YouTube. You can learn to do anything in the course of a few hours now and be pretty damn sure you're going to be successful at it

once you do it a few times. So I just love this podcast and really unpacking not just the real estate side of things, but also the side of things relative to mindset and how it is such a big hurdle for so many people. So, you know, once someone has successfully completed a house hack and they're renting out all the units, what's the next logical step, whether it's one of these fringe strategies or just a traditional strategy to get them to that second property, the third property, the fourth property. where do you tell people how to get there and move from the first property onto others? I mean, the most important thing, I said it earlier, but you have to decide. You have to pick your thing, like pick your heart.

So the next step is once you've gone into it, and again, you might have to test out different options. You may have to try the rent-by-the-room thing, and you're like, eh, it's not really for me. Try Airbnb-oh, it didn't really work, right? But you have to make a decision. It's like going back to the diet metaphor. Like all the diets work, right? Pick any random diet, insert diet here. It works.

And there's science to back it up. and there's Instagram influencers who talk about it and sell courses on it. It all works. But what doesn't work is not doing anything. Just sitting at home eating nachos and Twinkies all day isn't going to work, right? So you have to decide I'm going to go all in on this diet. I'm going to stick with the rules and then I'm going to lose the weight. And it always works.

So you do the house hack. You're kind of getting into it. You got bit by the bug. Now you're addicted. And it's funny because people do. Like I get addicted. Everyone gets addicted. If you're in real estate, like it's a weird obsession.

So you get into it. Yeah. It's super funny. Then we all like commiserate together and like it's such a community. Real estate's wild in that, by the way. Side point is how shareable. Like I have never met a real estate investor in my life. I mean,

and I've talked to thousands and thousands of them who has been a jerk to me and tried to hide things. Like I've never had somebody not tell me what they're doing or their full entire strategy when asked. Everybody's open to sharing. It's not like I think a lot of the business world, which is like I'm not going to share with you. you're my competition. It's weird.

There is no competition, I feel like, in the rental space, even though there clearly is. I could be at a meetup with three people in Maui who all invest where I do, and we're all looking for the same condos, and yet we're all like sharing ideas and helping each other. So anyway, side point. So you got to, you got to decide. You're in real estate. You're bit by the bug. What am I going to do next?

And again, it's probably picking one of those strategies or it's going to Ohio and trying to find the problem because there are places in the country where you can still buy cash flow. I shouldn't say there's not. You know, terrible. Don't come here. Yeah, don't go to Toledo. Yeah, terrible. Stay away.

You decide, and then you commit to that thing to seen it through. I mean, not for 30 years, but commit to the deal. I'm going to get this. I'm going to test it. I'm going to say, do I like this? There's a great book came out probably 20 years ago, maybe more called The Lean Startup by Eric Reese, I think. It's like I love this book, my favorite business books.

And the idea is not lean as in like run your company minimally, even though maybe that's a piece of it. It's lean as in like lean into what. works. So you try things, you test an idea, oh, I think that Airbnb is the thing. I'm going to try it. And if it works, I'm going to lean into it. And I'm going to be like, okay, well, how do I make it work even better? And then I'm like, oh, I can do a train car. I'm going to lean into that. And you're like, oh, that works really good. I'm going to build a spaceship. That I'm going to lean into that one. So you lean into what works, but the only way you can

lean into what works is if you make those tests. You put the hypothesis out there, try it. Decision is the first step. What am I going to do? Write that down, set a goal. Like this year I will do this. In order to be on track for that goal, this quarter, I'm going to do this. And then if I'm going to do that this quarter, what are the actions or habits or constraints, meaning the things I won't do that will give me the result that I want for the quarter. So I'm going to analyze deals. I'm going to talk to a real estate agent.

I'm going to go to a meetup. And these are the habits that will make me rich to steal your show title. You could steal it all you want. You've coined enough really cool things. So you can go coin rich habits too. That'd be awesome. Everyone will know about it. But, you know, I think what's really interesting about what you just said is real estate to me,

at least it was like, again, this was a 24 year old, you know, talking right back then. But like real estate to me when I was 24 and I had to go buy this first house. Like I learned, I listened, I read, I did all of these things to set me up for success. But it was still so hard to pull the trigger. It was still so hard to say like, all right, I'm going to go do it. I'm going to go buy the house, right? it's such a big leap and it's investing but it's a different form of investing so like when you compare that to like buying you know the s&p 500 on a broker like public dot com you know you can deposit 50 bucks

and you just go buy it and you're off to the races right it's like it's such a frictionless thing where i'd argue that buying real estate has a lot of friction there's the underwriting there's you know all the communication providing your documentation and like it's a month long process to buy a property more cases than not. So I just, I don't know, I hear what you're saying and I get really excited and pumped up about like, you know, go to the deals and the meetups and like get these people like in your corner and excited. But I think there's people listening right now that need an extra nudge in the right direction to really go take that first step. So talk a little bit about, you know, setting up that vision for your future financially, the mindset that goes into

really taking that first step, going from I'm a person that lives in an apartment, or maybe, you know, I am house hacking at the moment to Robert's original question here, but now I really want to scale my portfolio. Like, how do they really go and set up their sort of vision board or that really cool thing that's going to allow them to not only learn about it, but stay consistent throughout the next five, 10, 15 years of real estate investing? Yeah, there's a lot that I could unpack there. But I'll give me a couple of thoughts.

First of all, about a year ago, I had, you know, I'm always trying to get in shape. I always try to, you know, go to the gym and I'm never consistent with it for, I mean, 30 years of my adult life, been trying to go to the gym and trying to eat right, but you know, it's just tough sometimes, right? But about a year and a half ago, a friend comes to me and he's like, hey, we're doing a fitness challenge. Me, you and 12 of our best friends. We're all going to report every single day what we ate and how many steps we walked and we got to go to the gym three times. And if you don't do any of those things, you owe $100 bucks into the pot every week. At the end, you know, we'll spend all the money on a big party

or we'll give it to whoever won. All of a sudden, I started going to the gym every single, like, you know, three, four times a week. I started hitting it. I don't want to pay the $100, right? but in a community. If you want to be a runner, go surround yourself by a bunch of runners. You want to be a vegan, go hang out with a bunch of vegans. You become like those you hang out with.

So I say the most important thing, if you want to start getting into it, you want the extra motivation, you want the push, you want to scale, you're nervous, is just get around people who make the extraordinary

look like a Tuesday morning. Just like, oh yeah, that's just what I do. Example, I had a buddy named David Osborne. He runs a group called Gobundance, which is a big mastermind. And David Osborne once, I was at a Go Abundance event,

and he said, on stage that he was raising $100 million. And I was so blown away by that. I'm like, I can't imagine a human being could raise $100 million. Like, that's insane. A year later, I raised $120 million in eight weeks. I could not have done that had I not been in that room, right?

To make that possible. The extraordinary was just like another Tuesday morning for David Osborne. Just he thought differently. So through osmosis, I became more like him. So you got to get in those rooms. The cool thing about real estate I mentioned this earlier. but there's meetups and they happen all around the country all the time like every major city has a meetup happening every single week and some of them are you know just you know pitch fast we're going to sell you

some course but most of them are pretty good they're just normal people hanging out at a pizza place or a bar and there's 20 old school landlords just hanging out talking and there's 20 newbies that are there trying to learn and everyone just talks and hangs out and some are more organized some are less organized but you start going to that thing over and over and over first of all nobody does right they go one time and then they disappear if you're new. But you start going to thing over and over. You start being friends with these people. You will become like these people just naturally.

You want to scale, then get around people who have scaled. If you want to buy your first deal, get around people who have bought, to buy deals. You'll become like them naturally. And then I'm a big believer in reverse engineering your success. I always say this line is you get the results of what you repeatedly do. If you want a six-pack, then there is a prescription to get that. If you want to be a better husband, there's a prescription to get that. There's things you can tangibly do.

Like, you're not naturally a good husband, but by going on date nights and by giving your wife flowers and by, you know, listening to her. Those are tactical things I can do. You get the results of what you repeatedly do. Okay, so what do you want? What's your goal? Let's reverse engine into that. What are the things you need to do on a regular basis? I alluded to the idea of the three, like, how do I get three yards down the field?

I said that earlier, I think. It's this metaphor of if you're playing football, right? You got to get all the way down from one side of the field to the other. like Hail Mary's get all the press coverage, right? That's the shows on the 10 o'clock news is the Hail Mary, the guy catches in the end zone, everyone's excited. 95% of football is carrying the ball like two or three yards. It's just like three yards, four yards, two yards, three yards.

That's what wins games. So if you want to, you know, people are like, oh, man, I want to buy a rental property. I want to get rich. I want to retire early. I want to blah, blah, blah. Start a business. That's the Hail Mary. They're looking at the end zone.

Stop looking at the end zone. What is the three? I mean, it's good to know where the end zone's at. otherwise you're going, you know, left or right and you're going to the stands, know where the end zone's at, and then ask yourself, what is the three-yard carry here or the three-yard toss? Let me just get a little bit down the field. That is a whole lot less scary than I'm going to go buy a rental property. That freezes people.

So what is the three-yard play? Identify it, decide, commit, take action. I love that because I feel like the Hail Mary anecdote is the clickbait of our generation. Yes. Yeah. Everyone wants to follow the clickbait because they think. there is this get rich quick scheme that actually works. And unfortunately, they find out that it is just tenacity and hard work.

And following people that have actually done it, you know, I always tell people that to get to a place that you have to get uncomfortable before you can get comfortable. And so many people don't understand that, that, you know, going to these meetups might not be fun. It's easier to stay home and watch Netflix. Going and traveling to go to a mastermind might seem ra, ra, wow. woo-woo, but at the end of the day, you're getting yourself around the right people. And if you don't do it, you're not going to be able to get to that next level, even if you

do it from a local or regional standpoint. You know, I'm at these Dan Fleishman events, aspire events, Pace Morby and I were at an event together recently as well. When you get around those people that are all doing it, then like you said, it's kind of that osmosis of energy and information that really helps other people get there as well. And I think it really is true that you are the five people you hang around with the most. It really is true. Because when you're around a bunch of people that are your high school or college buddies that have a lack mentality or a victim mentality, guess what? You're going to get lazy to and feel that's just the way the world works.

But when you're around a bunch of killers like I get to be around Austin every single day, it's phenomenal because you don't find yourself being lazy or being passive in not making the effort. And so we're always moving the chains that three yards at a time. And I think it's so incredibly important. Now, before we asked Brandon, our very last question, let's take a moment to hear from this episode sponsor, Blossom. Investing is more fun when you're doing it alongside like-minded people from dividends to growth stocks. There's a community for everyone on Blossom. We just talked about communities in real estate. Well, that's with real estate. This is with stocks. Remember, Blossom is not an online broker, but instead a social investing app that's built around transparency, a social media platform built specifically for investors. I've already connected

my personal accounts to Blossom it, and I enjoy seeing how everything is divided up and performing on a daily basis. Additionally, they offer duolingo style educational video content for those of you that are still learning. They were just recognized as a top 25 app for 2025 by the Apple App Store for good reason. So click the link in the show notes below to sign up for Blossom or simply type Blossom in on the app store. Let's now jump into our final question for Brandon. So let's go into my little last piece of information

I want you to break down and that is you mentioned earlier MINS, most important next step. We talk about the mini wins, but what is something people can achieve right now, whether it's educational, it's checking out your book or a podcast like this, to help them move closer to their goal as becoming a first time or maybe growing their portfolio in the real estate industry. Yeah, if you just pay me $100,000, I'm just kidding.

No, if you just, I'll say this, from a few perspectives here, if you're brand new, I mean, you know, you know nothing, right? You got to start with education. So yeah, I'd say the simplest thing is to pick up a book. Like, go to Amazon, go to the real estate section, and look at all the top books. Look at the reviews. Look at the ones that are ranked high. And then get a book.

And maybe it's mine. maybe it's not, but like, get a book and read it. Simplest thing in the world. It cost you $20. I remember way back early in my career. I just read that first real estate book. I got from the library, and I thought it was really good, and I got bit by the bug. And I was like, I mean, I would love to do real estate, but I don't really know if that's for me.

And I don't know. Can I make this work? And then a friend recommended I read Rich Dad, Poor Dad, which is the foundational book. I mean, I'm bigger pockets and now on Better Life. I've interviewed, what, over 700 investors. 90 plus percent of them have identified rich dad poor dad as the book that changed their life and it changed mine as well for whatever reason it just changes everybody's life and gets them excited about money it just changes mindset and perspective but i didn't even have the money to buy that book

like i was so broke and they didn't have it the library so i went to a barns and noble and i sat there the whole book just sitting there because i couldn't buy it so i just read it while there it's like that's the tenacity of like oh i'm going to figure it anyway so go read rich dad poor dad read a good rental property book that's yeah step number one there's a million in YouTube videos, obviously you can watch, but I, in my opinion, nothing takes the place of like a book in that you get 20, 30 years of some industry veteran, like ridiculously high level person giving the best of what they know in a format that explains it for 20 bucks. Like, there's no greater investment than a book. That's why I'm an avid reader. I have, I just, I buy every book

somebody recommends. I just buy it no matter what, even if I don't read it. I just buy every book because I'm like, over time on average, every single book makes me millions of So I'm just going to keep buying books because they're game-changing. I love it. I love it. That gives me goosebumps. And then I'll give you one more. Just go on to Zillow or Realtor.com and just start playing around.

Like sort by like the cheapest properties, like a single-vime house and sort by cheapest one and just start playing with it. Just like there's no commitment. It's just playing with it. You're just looking for stuff. And here's a fun game. I'll get people a little game. Try to read between the lines on a description of a cheap house. What I mean by that is real, you'll find it.

I find it every time I go on the M-L-L-L-S. Yeah, and Robert, you know exactly what I'm talking about. There's little things they say that you're like, oh, there's something more here. For example, great for multi-generational living. This is a duplex. They're not saying it's a duplex. That's not legally a duplex maybe, but this could be a duplex. Or it'll say something like, you know, could use some TLC.

Quaint. Yeah, quaint. Quaint. Yeah, exactly. You're like, oh, opportunity. Like, one of my favorite quotes, I had a friend interviewed on the podcast years ago, and he told this story of how every time him and his kid would walk into a, like, a, a nasty house and it would stink really bad, which is common. Most people turn around and leave. But he trained

his kid. His kid would go, smells like money every time, right? Like we look for those opportunities. What you're looking for is you're looking for hidden money in those descriptions of the properties. Of like, where's the opportunity here? Bonus room. Oh, could I add a bedroom? All of a sudden, you go from a three bedroom to a four bedroom and the rent goes from 25 to 3,000. Oh, now there's opportunity. So in today's market, to kind of summarize what I said earlier, and I'll say it again now is in today's Today's market, you don't typically find good deals on the market. It's really, really hard, but you can make good deals on the market by knowing to identify those little things.

Which is a game with zero commitment is go to zillow or realtor.com, pick a market and just start digging around and see what kind of games you can play there. I love it, but also the meetups. I told that story earlier about my buddy Scott who out here in Hawaii, right, he wanted to buy a property with me or he wanted to buy property. I said I'd partner with him. So he just starts calling. We didn't even fly there.

He just started calling everybody that was in the industry in that area, talking. to one gentleman, he's like, yeah, actually, I just saw a deal earlier today, came across my desk, I would love to, you know, I can show it to you. That guy ended up selling us this house, and I think, I'm going to probably get the numbers wrong because I bought a couple of them. I think it was 210,000 the guy wanted for it. Now, he was wholesale, which basically means people find a deal. It's cheap, and then they sell it for a little bit more money to another investor. So this guy was, I think he was buying it for like 180. He somehow knew the owner and he was getting it for 180. He sold it to us for like 210. And it's like, well, you know, cool, but then the thing appraised at

310 day one without any work. It appraised that 100,000 more than we just bought it for. And the after repair, it needs to work. So the after repair value was more like 450. And we're only going to have about 350 into the whole thing. So we're going to be able to refinance get all of our money out completely. And this is a guy, Scott, first deal ever done. And he just had to make a bunch of phone calls and call people. Brandon, I feel like, you know, again, I've listened to several episodes of podcasts that you've been on. And it's just I learned something every time I listen to you talk. And so I very much appreciate you coming here onto the Rich Habits podcast and, you know, share your unique perspective on building your billion dollar real estate empire. I just want to emphasize that again for

everyone listening. It's like, oh, why should I care about what Brandon says? It's because he has a billion dollars in real estate with nearly 15,000 units, right? So it's like, this guy's figured it out. To add one more piece to that, just because I think it's important, it's like, I bought the billion dollars and that matters. And I say it's not to, like to my horn or to pat myself on the back because I just want you as you're listening to people out there that are doing like real estate as you find educators I bought whatever 15,000 units. I also bought two houses, one in Atlanta, one in Florida last month, right?

So what I mean by that is like a lot of people, they teach what they did 20 years ago and they don't do that stuff anymore. Like they're not actually in the game anymore. So they're teaching what worked 20 years ago. So as you're following people online and you're, and this is true for any industry, make sure they're doing what they're teaching that they're doing, not just what they did, if that makes sense. And if you're an educator out there, you're somebody listening, like, do the work. Keep current on what works, even though you don't need it anymore. It just keeps your skills sharp.

It's so funny because the old saying is people that can't do coach. And I see it a lot of times. And I'm always careful to point that out. But so many people that failed in business now coach online and they're telling all their followers things that might have worked 10 or 20 years ago, but they don't work now. And that's why people get a kick out of my content because I'll show me on a roof. Yeah, I love that you. I love it. You're still doing it. It's awesome. I do. I love it. I mean, I'm right here in a house. We're renovating. There's people right over here doing tile work. And it's hilarious. And I love it because it just really shows authenticity in our work and in our message that we're actually doing what we're educating people on. And I think that's so

important. So, Brandon, this has been an incredible episode. And for anyone listening, and if you enjoyed this, please share with a friend, leave a review. And let's keep stacking. good days, good weeks, and good months. And we appreciate you all tuning in so, so much. And before we sign off, Brandon, you got to tell the people, where can they learn from you? What's the name of your book? How do they connect with you on the interwebs? I would say, I mean, there's a lot of places. I've written a lot of books. So if you Google my name in Amazon, you'll find them. But my Instagram is my favorite place. Like, I'm an Instagram nerd. So Beardie Brandon, beard with a Y at the end, beardy Brandon on Instagram and TikTok and all the

social channels. Thanks, brother. Robert, what an incredible conversation we just had with Brandon. Again, I learned something every time this guy talks. He just did a wonderful conversation with Graham Stephan and Jack Selby. I love it when people like this are able to come onto our show and really unpack the blueprint of going from, you have no idea what you're doing to, wow, congrats. You're an expert now if you put in the work. Yeah, I love it.

And Brandon's message is great. He is very authentic. He really puts a lot of great information out there. and I like his mindset stuff because it aligns really well with ours. So make sure you guys share this episode with a friend. Tell him about it if they're thinking about getting into real estate or maybe they're having some mindset issues. Because I think this episode like you said really unpacks a lot, especially for people that are interested in real estate or maybe just getting started or even if someone has a couple properties and is looking to scale. I think it's a great episode.

And I also want to mention that we're so happy and so proud. of where this podcast is gone. We appreciate each and every one of you that shares it, gives it those five-star reviews, and lets other people know about our message and this podcast. Robert and I are incredibly grateful. As you guys know, last Thursday was our two-year anniversary for the show. We had a whole reflection montage that we had shared sort of at the end of that Thursday episode, and it's just, it's awesome.

We're just so grateful that 80,000 of you come back every single week to listen to the Rich Habits podcast. and continue to give us those five-star reviews, share it with your friends and family. And this episode, I feel like, can especially be shared with someone, maybe someone in your network, a colleague, or a family member that's like really trying to get in a real estate

and wants to get a little bit of extra nuggets here and there. This is a good one for them. So thanks again for coming back every week and have a great start to your week this week.