“This Advice Changed My Life” with Brandon and David

Brandon:
This is the BiggerPockets Podcast, show number 400. “Stop telling me what you have and what’s possible with what you have.” He said, “Instead, tell me what’s possible, period. Then tell me what you need to make that happen.” This advice just completely at the time … It seems so simple now, but it just blew my mind.

Speaker 2:
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Brandon:
What is going on, everyone? It’s Brandon Turner, host of the BiggerPockets Podcast, here for show number 400 … I feel like we should insert some clapping sounds here … with my cohost, Mr. David Greene. David, what’s up, man? Welcome to show 400.

David:
Thank you very much. It’s kind of amazing that BiggerPockets has this many awesome episodes and that I get to be a part of it. I’ve listening to all 399 before this one, and I’m excited to be a part of 400.

Brandon:
Yeah, man. I’m pumped. It’s crazy, we’ve never missed a week in … what is this? Seven? I don’t know, I don’t do my math very well. Seven or eight years? It’s been a while. And there’s been so much good advice on this show over almost a decade now, of just real estate advice and how to get started, how to build wealth, how to save money, how to make money, how to do all this stuff.
So today, we’re going to actually spend the next 845 hours going through every episode … I’m just kidding, no. But we are going to go through some of the best advice we’ve heard both on the show and from books we’ve read, from mentors we’ve had in the past, and just really just dive into this world of good advice that’s going to help you on your real estate journey. So whether you’ve done no deals, you’ve done one deal, two deals, you’ve done 100 deals, if you want to invest in a real estate, we want this show to be one that you just come back to over and over and over because this is the stuff that changed my life, that changed David’s life, and we’re excited to share that with you guys today.
With that said, before we get to the advice, it’s time for today’s quick tip.

David:
Quick tip.

Brandon:
All right, we’ve done that quick tip I think, what, 400 times now? I don’t know if we had it on the first couple shows, but we brought it in in the early episodes. Today’s quick tip is very simple. Listen guys, we don’t charge for this show. I’m going to pull something out of another podcast, Andy Frisella’s podcast. He says this, but I’m going to totally steal from him. We don’t charge for this show. There is a cost to it. The cost is go out and leave us a rating or review, or at least tell a friend about the show. It just helps us out a lot. So that is what it costs for this show, and I would love if you just tell the world about this show and that we’re doing good stuff here, because that’s how we reach more people with the message of you not having to live in a cubicle for the next 80 years of your life to retire on government cheese. Our goal is to get you out of that life plan and get you something better. Sound good? David, anything you want to add to that? You feeling good?

David:
Yeah. You also benefit when you share the show with other people because all of us when we first heard it were like, “This is amazing. This is all I want to listen to.” Well, the more people you have in your life that think and feel the same way, the more it will strengthen the part of you that is trying to make progress in that world. Life is more fun when you do it with somebody else, and it’s more effective when you do it with a tribe or a group. So work on building that tribe right now by sharing the parts of real estate investing that you love. And just like Brandon and I have found more success in our personal lives once we’ve teamed up with our friendship, I want more and more people to have experiences like that for themselves.

Brandon:
Yeah. Good stuff, man. I love that. All right, with that, let’s get to today’s show. We’re just going to go through a bunch of the best advice. I’m not even sure how many … I think we might have 10 tips in here. We might go a little bit more, might go a little bit less, we’ll see. But we just want to talk about the things that changed our life. And so tip number one actually is one that when we were prepping for the show ahead of time, David, you brought up. Do you want to take number one, then, some of the best advice you ever got?

David:
Yeah. The best advice that I ever got came from Tim Rhode, who we actually had as a guest on this show. He was my original real estate investing mentor. He’s the person that got me started with real estate when I was 18, 19 years old. He taught me to always play great defense. We had him on show 353 if you want to learn more about Tim. By great defense, what I mean is get your personal finances under control before you try to scale and build really big wealth. There’s an easy analogy. Before you start pouring water into your bucket, plug all the holes. Because you can go out there, you could be really good at this stuff, and you could make a lot of money and then you can lose it all. And we’ve all heard those stories of people that, once the money’s rolling in, it’s really hard to plug those holes at that point.
Who you are is who you’re going to be, and many people take the Mike Tyson route and they don’t learn until it’s too late and they’ve lost all their money. So I really love the concept of, “I have these goals. How can I start with delayed gratification, with discipline, with getting my own financial picture under control before I put a lot of effort into scaling?” And I know there’s a lot of people like you, Brandon, who have success stories that have shown where because you delayed the life that you wanted to have in the moment, you have a much better life now.

Brandon:
Yeah. That delayed gratification thing is huge. I always like to use the analogy of whenever I eat a bowl of Lucky Charms cereal, I always eat my cereal first and I save the marshmallows. Then I pour more cereal in and I eat more of that cereal and I don’t touch the marshmallow yet. So after like two or three bowls … now everyone knows why I was a 300-pound middle schooler. But I’d have this giant bowl of marshmallows and I’d save it all to the end, and it was the best ever.
So this idea of delayed gratification … Early on in my investing, I was struggling. When I was a couple years into it, my wife and I were like … We were living, I mean, for free. We called it church hacking because we literally lived … There was some church. A friend of mine had a church where the pastor used to live next door, or the priest or whatever. He left and the house needed to be fixed up, so my wife and I stayed there, did all the manual labor to fix it up, didn’t have to pay rent. Even though we weren’t paying anything to live there, we still were not getting ahead at all. We were losing ground and I was going deeper and deeper into credit card debt.
And it wasn’t until I read … So to piggyback on your advice you got from Tim Rhode, this is the same advice I got from Dave Ramsey from The Total Money Makeover, that book. It said every dollar should have a name. Every dollar has to have a spot. And so I sat down and I really … Everyone hates the word budget, but I sat down and I took my bank statement and I put every single item in a category. I said, “Where’s this going?” And I realized I was spending $1,000 a month more than I was making. I mean, I was only making like, I don’t know, a couple of grand, three grand a month maybe, and I think I was spending four. And so every month I was going deeper and deeper into debt and deeper and deeper into the hole because I didn’t have that foundation. I wasn’t playing good defense. I was trying to flip houses a little bit and trying to work a couple odd jobs and doing some contracting stuff and just couldn’t get anywhere. I had no defense.
So it wasn’t until I just stopped right then and we made a plan. We even went to the envelope budget. We literally bought this 80-fold billfold type thing that Heather carried in her purse and we put money at the beginning of the month in every one of those. I had to get that self discipline of stop just buying whatever I want because I want it right then. That changed everything, was building that foundation. So yeah, great advice.

David:
I feel like when you do that and you don’t allow yourself to buy the thing you want, the desire for those things doesn’t go away. It grows. It creates a pressure. “I really want that thing.” And if you are strict and disciplined and you don’t let that pressure escape, it can build to the point that it actually propels you towards your goals. All the excuses that you have … “But what if this goes wrong? But what if something happens?” You get over it when you have this pressure behind you, like, “I really want that.” And that actually makes it easier for you to go be successful to learn more, to be so good that they can’t ignore you, which is something we’re going to talk about later.
You make it easier for yourself to be more successful when you set that thing that you normally would just go buy as a goal that you have to earn your way towards. There’s also a practical element of this. When you have your own budget under control and you have plenty of reserves, the fear of, “What if I lose money?” becomes much less significant because you would lose capital you’ve saved. You’re not going to let your family starve. It’s a completely different dynamic when you have a safety net.

Brandon:
Yeah, that’s so true. There’s a buddy of mine named Adam. He runs a company called MyBodyTutor. It’s the fitness program I’ve been using for a couple years and I love it. Big shout out to MyBodyTutor. So Adam says this thing. He says, “You got to learn to exercise your no muscle,” and I love that phrase, “the no muscle.” Because most of us have very weak no muscles, in other words, the ability to say no to things like, “Well, I wanted it, so I just got it. I wanted that cheesecake. I wanted that new car. I wanted that better house,” whatever. And so we have a very weak no … But the more you exercise that no muscle by saying no to things, even though maybe it’d be a fine habit. Like, “Who cares? It’s just a beer. It’s just a cookie. It’s not going to change anything.” It’s the idea of developing that muscle and making it stronger that benefits you in every other way of your life.
I have a question for you, David, before we move on to the next advice. What are some tangible ways people that are listening to this in their real estate business can start with that advice of playing more defense. How do they play defense in real estate? What does that look like?

David:
First thing you do, just like if you’re playing a sport, ask yourself, “Where’s the other team scoring the most points on me? Are they beating us with the long ball every single time? Is our pitching giving up a lot of home runs?” Well, your own expenses, your biggest threat is your housing expense. For almost everyone I know, the most money they spend goes towards their housing. That can come in the form of a mortgage on a house you don’t need … you’re spending way more to have this big, fancy home … or rent that you’re paying that goes to someone else. Attack that. Ask yourself how you can save money. And house hacking is the pill that will work for almost everybody.
Now, we describe house hacking as go buy the property, rent out the rooms, rent out a part of the unit, do something to get some rent coming in since you have to pay for housing. And that is the best way. But for some people that can’t do that … their credit’s not there, they can’t get a loan, whatever … I house hacked in reverse. I rented a room from somebody else for six years while I was working as a police officer and I spent about 20% what it would have cost to have a house all to myself and during that time, I put that money that I would have spent on housing into a budget, and then that was my down payment for the first six rental properties that I bought.
So even if you can’t buy a property for your own self, you can still house hack renting rooms from other people. That’s the very first thing I would say, and then the next thing is, Brandon, like what you said. Consider where your money’s going. Are you watching it and looking at it every month and seeing, “That’s where all my money went? Is it really that important that I ate out that often or I took a vacation that I didn’t even need, or I have this $160 cable bill when I never watch TV anyways?” There’s tons of ways that you’re probably spending money that you’re getting zero value in return. Go eliminate all those. That’s the calories you save that you aren’t even going to miss.

Brandon:
Yeah, that’s so true. Yeah. Because I played defense in my life early … Once I changed all that … I read Dave Ramsey’s book, I started setting a budget, I really got specific on lowering my expenses, I exercised my no muscle a lot more. We ended up buying this fixer upper house that was a live-in flip, and it wasn’t even a house hack. It was like 80 … No, I think we paid 65 grand for it, and I did all my own work to fix it up. It was just a nice, simple house, but it was cheap. I think my mortgage was $400 a month to live there. Because everything in my life … and I didn’t have any new car, I didn’t have anything like that. I kept it very, very low.
Then I was able to … I was making three grand a month in cashflow when I was 27, so I quit my job when I was 27. It doesn’t mean I laid on a beach. It wasn’t like I was retired, but what I got to do then because I had enough money coming in to pay all of my bills, now I could focus on a little bit more … I don’t call it risky, but more adventurous stuff.
Two things that I did. One, I started buying more real estate. I started doing bigger deals because now I had more time to focus on it and I started to do my flipping. But then maybe most impactfully is I started podcasting with a friend of mine named Josh Dorkin here on a little podcast called BiggerPockets. So us being here today was a result of me having had played good defense at that point, having learned what good defense was.
So whether that’s … I’m not saying you’re going to go start a podcast, but maybe because you kept your expenses low, you can afford to quit your job that you don’t like anyway to go do a job that makes half as much money, but who cares because now you have flexibility. Or, go become a real estate agent because you can take that risk of a job that doesn’t necessarily have a paycheck, but because your expenses are so low, now you can go and make a whole lot more money. Because the opposite of defense, of course, is once you have the defense down, then you can go on the offense and take the bigger risks.

David:
There you go. Absolutely.

Brandon:
I think that’s huge.

David:
It’s investing in yourself when you have enough money. And I’ve had interns that came to work for me that saved up their money, they left their W-2 stable job, they came here, they took six months to learn it, and now they’re making more in a couple months than they were in a full year of their other jobs. They invested in themselves. In general, if you can get good at defense, it will open up so many doors to improve your life.

Brandon:
Yeah. So true. Man, I feel like we could talk an hour just on that one point, but we got to move on. So let’s go to the next tip here. Let’s see, number two. This is advice that I got early on … very early on, before I ever bought my first [inaudible 00:13:24]. I sat down with this guy named Harry. Harry was a customer. My wife worked at Starbucks while we got started, and Harry was a customer there, and he had done real estate. So my wife got to talking to him because she was friendly at Starbucks and learned this. And I sat down with Harry for a cup of coffee at Starbucks because he was an experienced investor and I asked him what should I do, what advice does he have, and here’s the advice he gave. That was a long setting up for this.
Harry said, “Wait for the best tenant.” I don’t remember the exact words he used, but he said, “Don’t feel like you have to go and take a tenant because you have this mortgage looming and you’re not going to be able to pay the bill next month.” He was like, “Wait. If it takes a month, if it takes two months, if it takes three months, the tenant will make or break the deal, so wait for the perfect tenant.” And that advice, I think, was the beginning of what we call excellence in property management. There’s a lot of terrible landlords out there, but there are some … and my wife I would put up there as one of the best, as being excellent at being a landlord or in property management, because it is not a skill you’re just born with. You have to learn how to do it the right way. The biggest piece of that is learning how to pick the right tenant. So that’s the advice, is don’t jump on it. Don’t jump the gun. Wait for the best tenant.

David:
I would say that that advice applies to other parts of real estate as well. When I’m representing people selling their home, it’s … You often hear agents that brag about, “Sold in two days,” and every time I hear that, I cringe, because I think, “What if you’d have waited 12, got five offers instead of jumping on the first one, used them all to negotiate against each other and got yourself another $50 to $80,000?” It’s often an ego thing where you say, “Hey, I sold my house in two days. I’m the best agent around.” I tell my clients all the time, “We should wait for the best offer, not the fastest offer.”
Now, that comes with knowing your market. Sometimes houses sit six months and if you get an offer right off the bat, your best offer is the first offer. But don’t get scared to where you jump too quick. “Oh, I have a tenant, let’s lock it up.” Once you’ve accepted an offer as a seller or accepted a tenant as a landlord, there is a power shift that occurs. That person now has a lot more power. It’s very difficult to get a bad tenant out of a property. It’s very easy to get a bad tenant into a property. And the same goes with a contract. It’s very hard as a seller to get out of a deal with a bad buyer. You got to wait.
I know, Brandon, you just recently sold a condo in Hawaii, and I think I gave you that same advice. The offer came in. It was contingent on selling another one and I said, “I think you should wait. You’ve only been on the market a short time. See if there’s something better that comes in.” And we see a lot of investors that are just so scared of, “What if I lose?” that they lose the perspective of you could do better if you wait.

Brandon:
Yeah. Just patience in general with all this stuff. It’s like take time to breathe. My performance coach tells me that all the time. He just says, “Brandon, breathe. Think through this. Don’t just react. Think through, is this the best choice for myself, for my finances, for my family, for my future. Is this really the best thing?” And when we take those moments of just breathing through that, then we find the tenant that carries us into success.
I mean, I think Joe Asamoah, who was show 356, it was. That’s one of my favorite shows we’ve ever done. And Joe gave that advice, right? The tenant is the asset. Yes, the house is an asset, but really, the tenant is what’s going to make or break. If you have a terrible tenant, you’re going to get burned out quicker, you’re going to lose money. And if you don’t learn how to find that great tenant, you’re going to struggle. So again, look at this in the long term, take your time, breathe.

David:
I just had a conversation with a client who was selling his house. Believe it or not, two days before closing, the sprinkler system went off and completely drowned out the entire property. He’s owned it for several years. Two days before closing, it went off for no reason at all. He lost the tenant, and he was thinking, “Man, I just don’t know if I want to go through this again.” And this was the conversation we had. This could be a blessing because it’s going to prepare you for having to have the stick-to-it-tiveness that you need to be an investor, because stuff is always going to go wrong. You cannot react every single time, because in this journey, Brandon, I’m sure you can agree, you take a lot of shots to the stomach. You get punched a lot, and not reacting is a really, really, really important way to be able to build wealth.
I think Joe, that’s a perfect example of how this should work. He gets a property that is so amazing, everybody wants it, and then he takes his time picking the best one. Instead of short cutting it on the front end, not getting many options, and then having to pick the best shirt in the dirty laundry.

Brandon:
Yeah. That’s a good analogy. All right, let’s move on to number three. Number three. So this one comes with a little bit of a story. A lot of you guys know BiggerPockets actually … So a few years ago, Josh sold a chunk of BiggerPockets off to private equity. It wasn’t a big deal, but Josh, his daughter went through that difficult time. You guys have probably heard the story when he was on since then. But he basically had to retire. He just stepped away and had to deal with his family for a while. His daughter’s doing great, by the way. I was actually just hanging out with his whole family yesterday. But this private equity firm put a board in place, a board of directors in place, and they brought in this guy named Mike, and Mike is, I think, chairman of the board. And Mike is a guy that’s been around the business world forever. He’s been in dozens of different businesses. He just understands business. He’s a very smart guy.
We sit down at this table, this big, long table, and we’re trying to tell … This is our first meeting, and we’re trying to tell Mike all the stuff that we have. We’re like, “Okay, we got this many developers, we got this many people, we got this marketing person over here.” And after a little bit, he holds up his hand and he says, “Guys, guys, guys, guys. Stop.” And we said, “What?” And he said, “Stop telling me what you have and what’s possible with what you have.” He said, “Instead, tell me what’s possible, period. Then tell me what you need to make that happen.” This advice just completely at the time … It seems so simple now, but it just blew my mind because my entire … I realized not just BiggerPockets, I’m talking all of my life, I have looked at what do I currently have? Money, what relationships do I have, what assets do I have, what can I do with what I have? And then I go and build something based on that.
Instead, he said work backwards from a vision, from like, “This is where we want to go,” and then work backwards. At the same time, then, right after that, I was on a plane and I read that book. It’s called Vivid Vision by Cameron Herald. You guys have probably heard me talking about it before. It’s all about having a three-to-five-year vision of where you want to go, and then backing up to it. So that’s what I did in my business. I just literally said, “Okay, I want $50 million of real estate in three years,” because that sounded neat. And then I said, “I want 1,000 pads. In order to do that, what do I need? What resources do I need?”
I’m like, “Well, I’m going to need a director of acquisitions, somebody just to find deals for me. And I’m going to need an assistant. I’m going to need somebody just to help me with my life, just to coordinate all this because I’m going to the next level. I’m going to need somebody to handle investor relations because we’re going to have to raise money, so we started a 506(c) fund. I’m going to have to have these people.” I defined what all five roles were, and I said, “Okay, well, how do I find these people?” And I basically worked backwards from the vision of what’s possible and I built what we have. And so our goal was 1,000 pads in three years, and now here we are a year and a half into it. We’re going to close on our thousandth pad property, because we’re buying mobile home parks. We’re going to have our thousandth unit next week. Actually, when this show comes out, we should have had it, actually. We’ll have hit that number a year and a half early from what our goal was because we saw the vision and worked backwards.
So anyway, thank you, Mike from the BiggerPockets board for telling me that advice. It completely changed my life.

David:
The other way of thinking, “Hey, this is what I have. What can I do?” That comes from a mindset of someone who’s dropped into the woods with a couple matches and a lighter and compass, and like, “How do I survive?” It’s literally a scarcity way of thinking, and it doesn’t take into account that you live in a world where there’s so much available to you. And it’s hard to open your mind and allow yourself to believe it. If you’ve always worked in a W-2 job and you think, “Well, this is all the money that I am able to make,” or, “This is all that I am worth,” the plan you put together will be based on that information. But you are able to make a lot more money than that. You have more options available to you than you think, if you can embrace this way of thinking.
It’s a muscle you have to develop similar to the no muscle of, “What do I want? Okay, what would I have to do to get there? Who would I have to become to get there? What would I have to learn?” But as long as you are comfortable approaching life with that method, having a big portfolio of real estate goes from, “How could that ever happen?” to, “That wasn’t nearly as hard as I thought.” And Brandon’s example, I think, is a really good one of once you actually set that thing in place, your goals tend to happen much quicker than you would have thought.

Brandon:
Yeah. This isn’t even just about … I know a lot of people are listening going, “Well, good for Brandon. He’s got some big portfolio, but I’m trying to buy a duplex right now. I’m trying to get started. I can’t just go say I want $50 million.” You’re right, but this applies to the small stuff as well. And it’s actually related to the other advice I wanted to bring up today, but we’ll make it part of this advice packet here, and it is from Rich Dad Poor Dad, Robert Kiyosaki’s just unbelievably good book. He said in there, “The poor say, ‘I can’t afford it,'” and he’s basically saying people who are financially poor tend to say-

David:
The mindset of … yes.

Brandon:
The mindset, yeah. The poor mindset is, “I can’t afford it.” The wealthy or the rich mindset is asking the question, “How do I afford it?” So a lot of people are saying, “Well, I don’t have any money so I can’t do it.” But instead, it’s that, don’t tell me what you have and then try to explain what’s possible with what you have. Tell me what you want. Tell me where did you want to head to, what is the vision. “I want to own a duplex this year.” Okay. How do you own the duplex this year? “Well, I live in an expensive market and every property’s a million dollars. I could never come up with the down payment … How?” Well, do you know there’s 5% down conventional loans now? “Oh, really?” [crosstalk 00:23:16]

David:
“I thought it was 20%.”

Brandon:
Yeah, exactly.

David:
They went their whole life thinking that was the way you had to do it because they never asked that question.

Brandon:
Oh wait, you were in the military once? You can get a 0% down VA loan? What? You can get it for nothing now? You live in a rural area … rural area … and so you can get this thing done for zero-

David:
USDA loan.

Brandon:
Yeah, USDA loan, get it done for 0% down? Really? There are so many options out there once you start asking the question. I’m a big believer, how is the most powerful word in the English language. Just asking yourself how this gets done, it just changes everything.

David:
And then work backwards from there.

Brandon:
Backwards from there.

David:
Beautiful. I love that.

Brandon:
Cool, man. Well, two more quick points that I want to bring up just because they’re kind of related to this point. Number one, the book The ONE Thing from Gary Keller and Jay Papasan … Jay’s been on the show a couple times. He’s one of our really good buddies, a very smart real estate investor and agent and business owner, and his wife’s awesome. Anyway, they had this whole thing called goal setting to the now. It’s basically like, what is your vision three years away? Like, “Three years, I want to own $50 million in real estate and 1,000 pads.” Okay. To be on track for that for my three-year goal, what do I need to accomplish this year? “Oh, I guess I need to build a team and buy my first park.” Okay, great. Or whatever yours is. Okay, to be on track for your one-year goal, what’s your quarter goal, then? To be on track for your quarterly goal, what is your weekly benchmark? What do you got to get done in this week? And then to be on track for this week, what do you got to do this day? To be on track for today’s goal, what do you got to do this minute?
So you really work backwards through this now, like everything … If you just do that simple one-minute practice every day, a couple minutes maybe every day, it will change your life because all of a sudden, success is no longer a mystery. It’s now a formula. It’s not just ingredients that you’re putting together, and when you work backwards to get there, you’re like, “Oh, I guess it’s really not that complicated.” Which is why we stress journaling, like the intention journal we offer at BiggerPockets. I mean, I literally do it every single day. It’s sitting right here so I can do it because I missed it this morning because I was running, so now I got to do it when this podcast is over. I’m going to do it because then I go, “What is the goal? What’s the quarter? What’s the month? What’s the day? What’s the minute look like?” So good. That’s all I got on that. That’s all we have.

David:
I think that’s all we have to share, yeah. And then, if you want to see, “What do I do in the meantime when I’m trying to figure that out?” Because you’re not going to sit down in one moment and draw out an entire blueprint of your success. Well, ask yourself, “What can I do right now to get started?” And I feel like show 276 that we did with Bryce Stewart was that amazing show where he gave an incredible piece of advice that really spurred this entire topic, which was, “Vacuum the truck.” I don’t know exactly what I have to do to sell a truck, but I know it needs to be cleaned, so let me get started doing that and get some of my creative juices flowing while I’m trying to figure out the master plan.

Brandon:
Yeah. Everyone’s like, “I can’t figure out the five-mile plan. I don’t know how to get to a million dollars in real estate. I don’t know how to build an empire of real estate.” So they just give up. But he’s like, “Look, I don’t know how to sell a truck that had a title on it or had a lien on it, so does that mean I don’t sell it?” That’s how we operate in life so many times. “I don’t know how to do the whole thing so I’m not going to do anything.” But I can guarantee you there’s this zone of clarity. I like to call it the zone of clarity around you all the time. If you’re driving through a fog bank, you can’t see a mile down the road. You can see 50 feet, though. That’s your zone of clarity. Work in your zone of clarity in the right direction and you’ll always see a little bit more. So get out there, and what is that thing today you can do to vacuum your truck?

David:
There’s a lot of people that they just said, “Well, I know I want to buy a house. I don’t know what it takes. Let me call an agent.” They end up … Their zone of clarity ends up in my zone of clarity, and I say, “Oh, I’ve done this a million times. You don’t even have to figure this out. Just follow me.” And they’re like, “Oh my God, I had no idea it was this simple.” They thought they had to figure everything out. It was that first step of vacuuming the truck that brought them into my world where it’s already all been laid out, and that’s another great example of how just starting something and maybe asking, “Who could help me?” instead of, “I have to do all this myself. How do I find someone else that can help me get started?” can vastly, exponentially decrease the amount of time it takes to learn something.

Brandon:
Yeah. So good. All right, moving on to the next one. I heard this piece of advice years ago. There’s a guy named James Wedmore. He’s an online marketer influencer guy, teaches you how to do … He used to teach how to do videos for YouTube. So a lot of my early YouTube content, even to today, was based on what I learned from James. But this is completely unrelated to video making. It’s about real estate.
He had this little diagram and it had an island on one side … It was a big whiteboard, basically, and on one side of the whiteboard was an island. He said, “This is reality island.” The other side of the whiteboard he wrote, “This is your goal island or fantasy island,” or whatever, the place you’re trying to get to. And he said, “What most people do is they start building a bridge from reality island where they are today over to whatever the island they want.” Now, you’re probably the same way, right? You live where you are today, but you really want to get to a million dollar net worth, quitting your job, being able to support your parents in their retirement, whatever it is. And you start something. “I’m going to start an Amazon business. I’m going to go and do this flipping house thing. I’m going to try wholesaling. I’m going to buy rental properties. I’m going to do the BRRRR strategy.”
And instead of building one bridge, you start building one, then you get a little bit bored because reality sets in and you start doing the next bridge. Or it’s slower than you think it should be, so you do another bridge. So you start selling whatever on eBay because you think that’s the next way to get there, and pretty soon you got 20 bridges all being built and none of them are making any progress because you’re constantly running from bridge to bridge to bridge to bridge rather than building one bridge across. So the advice is, build one bridge until either completion or mastery. And mastery means it’s just running on autopilot by itself, somebody else is running it, your machine’s going, and you can move on to something else. So if you see people like Dr. Oz doing 100 things, it’s because he’s got people on each one of those things. Or Oprah, or whatever. They got people that run each one of those because they are masters of that craft. So yeah, build one bridge until completion.

David:
And don’t be afraid to say no, right?

Brandon:
Yeah.

David:
This is what I’ve found when I’m working with home buyers, and it’s the same with brand new investors. It’s just human nature. We’re always afraid in the beginning to miss out. We have FOMO, fear of missing out. “What if I say I’m looking for a duplex, but then I find an eight-unit commercial complex and I don’t get it because I wasn’t open minded?” So we flood ourselves with opportunities and options, and then we’re paralyzed and we can’t make any progress, and it comes from a scarcity mindset. There’s not enough in the world, so I have to take whatever comes my way.
But the smart people that are successful, they don’t spend a lot of time worrying about losing a deal. They spend a lot of time drilling down and nicheing into, “What I really want,” and they focus on that bridge until they’ve got it down, then they’ve earned the right, delayed gratification, to go chase after that eight-unit commercial complex that they might be looking for.
With buyers, they have all of these, “I want to buy a house over here, but I want to do that and I want to house hack, but I also like that house on the hill, and I might want to buy in this city, but I might want to buy there,” and they never get anywhere. It is only through eliminating options that they actually make progress. And so my job as an agent is to dig deep and find out, what do you really want? What is your goal? How do I eliminate all the wrong options until the right one is clear? Then once we’ve got it, now let’s talk about what your other goals are. You’re house hacking. You bought a duplex, you’re living in one unit, you’re renting out the other. You also mentioned you want to be in a great school district. How long before you have kids? “It’s going to be five years.” Okay, let’s put a five-year plan together for how you can buy that house on the hill that you really want.
And I’m hoping that you guys recognize when you focus on building that bridge, all the other stuff that Brandon and I are talking about right now speeds up the process of the building it. You build it quicker when you start to incorporate all these principles that people have taught us into those goals.

Brandon:
Yeah. That’s really good. And just to piggyback on the say no thing. I told this story at BP Con last year, but I’ll say it again now. That’s something I learned from Josh Dorkin. We just talked about Josh a minute ago, founder of BiggerPockets. He was so good at saying no to every idea. I mean, I think he said no to the podcast when I first suggested we should do a podcast. And the webinars, and the books, and all of it. He said no to everything because he knew that if his default was no, then you have to convince him to say yes. In other words, you can’t let your default be yes. Make your default no, then, “Convince me why this is a good idea.”
And so today in my life, I generally have a default no to almost everything. I default no, that way I can have time to reflect, “Is this really the right thing?” Podcasting, yeah, it was the right thing at the time to start a podcast. For you, is it really … No, you should not start an Amazon business right now if you’re also flipping houses. Because now, once you say no, now somebody’s got to talk you into it, or you really got to talk yourself into it, you got to put some thought into, like, “Is that really the right thing?”
So I guess the lesson I learned, then, from Josh was make no your default because that allows you to build one bridge and not to get distracted with 50 different bridges that I know you want to. And one more point I’ll make on this is … And it’s advice we had later on planned for today’s show, but I’m going to actually bring it forward and talk about it right now. Cal Newport, who was a guest on our podcast … I don’t remember what episode it was. I’ll look it up in a minute. But Cal Newport wrote a book called So Good They Can’t Ignore You. It’s basically this idea of like, if you want to achieve success in anything, you’ve got to build rare and valuable skills. In other words, you got to be really good at it. Now, how do you get really good at something? It’s not by building 20 bridges, right, David?

David:
Yeah, absolutely. And it goes back to the point we made earlier about pressure. There’s always an obstacle that stops you from being more successful, and it’s usually some form of personal growth you have to go through. Self-limiting beliefs, lack of discipline, lack of believing in yourself, or frankly, just a skillset that you have to build up. The more pressure that you can build up, the easier you’re going to blast through that thing. Well, imagine that you have a natural desire of pressure that’s building to help you, but you’ve got 20 different bridges going on, so that pressure’s going over 20 different areas. It never builds up to enough to blast through the obstacle that’s getting in the way, and so you never accomplish anything.
Saying no eliminates ways where you’re losing water pressure and keeps it all in one area so that you can blast through the obstacle and then take the full force of your concentration and your focus and put it towards blasting down the next goal. This was something when I was new, people told me. I didn’t take them serious, and as I’ve become a little bit more successful, I recognize now this is why everybody gave me that advice.

Brandon:
Let me put this into a tangible way for listeners. If you’re just getting started right now, you may be wanting to buy your first property. Okay, if you had a very clear idea of what that first property is … “I want to house hack a duplex,” or, “I want to buy a fourplex just to own as a rental in what city and what condition,” you’ve got all that laid out. If every morning you woke up and said, “My goal by the end of the year or whenever is to close on this fourplex, and what can I do today to make myself better to be able to do this? What skill can I develop? How many deals can I analyze today? How many viewings can I go look at? How many offers can I make this week for that one goal?” If that’s all you … I mean, I’m not saying you’re not spending time with your family or whatever. I’m just like, that is the primary thing that you know when you wake up, that is where you’re headed, you’re marching there.
Does anybody listen to this? There’s a quarter million people listening to this right now. Do any of you believe that you would not achieve that goal if that’s what you really did? If you just knew that that’s where you were headed and you wrote it down every day and you believed that it’s possibly and you constantly asked how, could you do it? I think everybody here is nodding their head right now saying, “Yeah, of course I could do it.” So why don’t we? Why don’t we? I don’t know. I mean, I do it, too.

David:
Well, there’s a fear of, “What if I don’t do it right?” But the answer to that is, you’re not going to. Just give yourself grace. You’re not going to do it perfect. The second time you go try to buy your next fourplex, you will get it in half the time and twice as good of a deal. And every single time you do that same thing. You get better and faster at doing it, and that is how you build mastery. Once you think, “Okay, I can buy a fourplex without even thinking about it. I’m on autopilot,” now you go do the next thing. You’ve built that bridge.

Brandon:
Yeah. So good. Man, again, another one of those shows we could talk forever about it. But if you want to know more about that, Cal Newport … thank you, Kevin, our producer, a wonderful producer named Kevin … it’s 330. That’s the episode he was on, was 330. 70 episodes ago. Crazy.

David:
Wow.

Brandon:
Moving on. Advice number five. You want to talk about this one, David?

David:
Yeah. Advice number five is going to be don’t let your ego lose you money. This came from Ryan Holiday on show 245, the author of Ego is the Enemy, Obstacle is the Way. I think he has probably other books that are noun is the verb, or however that pattern goes of how he labels his books. He was actually the assistant of Robert Greene and learned how to write incredible books. He developed mastery as a great example. That’s why he’s doing so well.

Brandon:
He actually has a book called Mastery.

David:
That’s funny. That’s very funny. Yes, that supports what we’re saying. And what we want to talk about is, don’t let your ego lose you money, okay? There’s so many times that we throw good money after bad. You’ve heard the phrase, “You make your money when you buy.” There’s a reason people say that. It is very easy to overpay for a property and try to dig yourself out of that hole by over-rehabbing it, by hiring the cheaper real estate agent, by holding onto the property hoping that the market continues to go up. All bad ideas, and they’re typically motivated by, “I can’t sell a property for a loss.” This is not how successful business people think. If you’re going to sell a property for a $5,000 loss now, but changing your plan, trying to over-rehab it leads to a $20,000 loss later, it’s the same as making $15,000 to sell it for a $5,000 loss now and make it up on the next deal.
There’s other ways. It doesn’t even have to be the same deal. You can be bad in one asset class and say, “Well, I’m not going to try to make more money flipping houses if I’m bad at it. I’m going to go in a different area and make that money up.” And I know, Brandon, you have a lot of examples of how you’ve seen this thing play out in your life.

Brandon:
I mean, definitely. But I was going to say, I’m thinking back to deals that I’ve lost money on, especially like … I’ll own a rental property and I’ll think it just doesn’t cashflow, just year after it doesn’t cashflow, and I’ll hang onto it. And when you were just talking there, this is where my mind was going. I was like, “I think I was punishing myself for doing a bad deal.” There’s two thoughts that came to mind. One, it’s like, “I did that, I need to …” Rather than just cutting my losses and moving on, which would have given me a lot more mental sanity, I was like, “I got to whip myself on the back with this property every month because I made the mistake of buying it.” Where I should have just freed up …
My coach always told me, “Does it feel heavy or light?” I love asking that question. Because I want to do things that make me feel light. It doesn’t mean easy. There’s a big difference. Like I hate running, but I run, but it feels light to run. It’s hard, but does that make sense? It’s like mentally it’s not-

David:
It’s not a mental burden.

Brandon:
Yeah, it’s not a burden. Yeah.

David:
You’re not going against the grain. Yeah.

Brandon:
Correct, yeah. So I would hold onto properties, and this is where ego plays into it. I mean, it’s funny just talking this through right now, is there are influencers out there … and I’m an influencer, right? I admit that. I don’t really like that term, but I’ll say it … who brag about, “I’ve never lost money on a deal ever. I’ve done 500 deals and I’ve never lost money.” And I wanted to be able to say that, and I realized that’s just ego. Yeah, I’ve lost money on deals now. I can say that. There’s been a few deals where I lost money. Does that make me a bad investor? I mean, maybe. But I think it makes me an honest investor because there’s a lot of people who lose money on real estate deals.
And so I would hang onto stuff because I just didn’t want to lose money on that deal versus why couldn’t I just sell that and go put money into something that feels light and that feels fun and exciting? And again, it could be real estate. It could be something else. Maybe what feels light to you is you’re like, “I’ve been …” I mean, this is going to go against everything we’re teaching at BiggerPockets, but maybe not. Maybe you were just trying to do real estate for the last couple years. You’ve been just trying it, and it always feels heavy. You just hate it all the time. Maybe you should think, like, “I don’t know, maybe there’s something I could … I keep losing money in real estate. Maybe I got to go try something else. Maybe I should go be a real estate agent instead of being an investor. Maybe I should go sell items on Amazon.”
Now, that’s hard because you also don’t want to give up, because you don’t want to just constantly move from thing to thing. But if you’ve given it years of hard work and focus and determination and it just feels heavy and awful, yeah, maybe it’s time to make money in another niche or another asset.

David:
I’ve seen this play out in practical terms with my clients who bought a property and something went wrong right off the bat. I’m thinking of one where they bought a condo right before the market softened from COVID, they spent too much on the condo in the first place because they used a bad agent. Their son was going to move into it, and then he changed his mind and said, “I actually don’t want to live there,” so they had to go find a tenant to stick in there, and they did not know anything about screening tenants. All of this snowballs into a bad deal when you see things go wrong. And I’m like, “Yeah, that’s okay. You made a mistake. Things didn’t go like you thought. Get out, start over with a better asset.”
And so this person was losing about $700 a month on this condo of $450 HOA fees, by the way. So just eliminating that right there could make the deal way better. They don’t want to sell it because they’re going to be at a $5,000 loss if they do. They feel like, “If I sell now, I’m going to lose money.” However, they could sell that condo, go buy a single family house that has two different units, rent them out, turn that $700-a-month loss into a $400-a-month gain. In six to nine months, they could turn around what they thought was the loss, and over the next 10 to 20 years, it’s a no brainer better financial move. What’s stopping them is that ego move of, “I don’t want to lose money on this deal.”
It’s so easy to lose sight of the forest for the trees, and that’s what we want people thinking about. Don’t let your ego make the decision. It is okay to lose money. Brandon, to your point, would you guys rather be the investor that has made a million dollars over 10 years and never lost money on a deal ever, or the investor that’s made $20 million over 10 years, but you’ve lost a million trying to figure it out?

Brandon:
Yeah. I’d rather have the lesson learned and the …

David:
Yeah, it’s okay to lose money if you learned.

Brandon:
The knowledge matters. Yep.

David:
Exactly.

Brandon:
Yeah. In fact, I think it was Aaron Amuchastegui who was on our podcast recently, the foreclosure guy. Aaron said … I think it was Aaron. It could have been Brian Burke. But one of them told me, they said, “Well, we buy a lot of properties at auction. And we know …” Because when you buy at auction, you can’t always get inside and inspect them and see what you’re getting. He said, “We know that one to two to three of them are just going to be not moneymakers. We know we’re going to lose money on them. It’s okay.” Because it’s the long game that matters. They know the other ones are going to make way more, then it will compensate for the losses. That was just an interesting way of looking at real estate from somebody I really respect, was like not, “I never lose money. I would never do a deal that …” They’re like, “Hey, we’re getting out there.”
One last note on this and then we can move on, is early mistakes early on … Your early properties, your first property or two, David, is going to make like 1% of your net worth 20 years from now, maybe half a percent or a quarter. But we think it’s such a big deal when we’re getting into it because it is a big deal. You have to go through the first deal to get to the next and the third and the fourth and the fifth. But wealth is not built from a property. It’s built from a portfolio. So wealth is built over time by having lots of properties and you pay them off over time, maybe, or they just keep going up in value. But it’s not like one deal.
So if you’re scared to jump in because you don’t want to make a mistake or you’re looking for that home run deal for the first one, I think that’s more ego than anything. You’re just trying to do it perfect. Get out there, get in the game. You’re going to take some punches on your mouth. It’s okay. Hopefully you don’t lose money. Have good reserves and a good defense so you can do that that we talked about earlier. But it’s not going to make it … The most important thing is 10 years down the road from now, did you gain all those lessons? Did you jump in? Did you learn? So if that’s holding you back right now, the fear of, “I don’t want to make a mistake,” just make the mistake. Just do it now so you don’t make it later on.

David:
Love it. That’s great advice.

Brandon:
Thanks, man.

David:
All right. Next piece of advice, number six. This is something that Brandon says often, and I really like it. I’m going to let you take this one, Brandon. The advice is, you can go broke buying good deals.

Brandon:
Yeah. I think I heard this from my buddy, Kyle, who was my mentor growing up. You guys have probably heard me talk about Kyle before. He was my best friend’s … at the time, Adam, we were young 20s … he was his landlord, so I painted houses for him. So Kyle said when I was like, “Oh yeah, I want to buy this thing and this thing,” and I was all excited and I was broke … and this was even pre-Dave Ramsey, I was spending all this money. And I was excited about real estate and he said, “Brandon, just understand you can go broke buying good deals.” And his point was, you have to have reserves. You have to be smart about what you’re doing. Just because on paper it looks like a good deal doesn’t mean you should fire at everything.
He’s just basically saying … kind of, I guess, what we’d been talking about earlier … is like, keep your ego in check. Make sure the deal makes sense not just on paper but in reality. Learn your lessons, don’t scale too quickly. I’m not saying be afraid and go too small, but this is why I’m generally not a big fan of going from zero to a thousand deals your first year, because you haven’t had time to learn the lessons. So anyway, that was the advice, is you can go broke buying good deals, especially if you don’t have the knowledge yet to be able to handle those deals, you don’t have the infrastructure to have them. So when people tend to fail at real estate, it’s usually because they got a little too big for their britches and they went broke buying good deals.

David:
I see this come up a lot in … Also, the phrase “good deal” is very subjective. You can tell yourself you got a good deal and sometimes it’s your ego talking. We see this in my world of real estate brokerage or agency where people think if they got it under the list price, that means they got a good deal. Or if they got it under the appraised price, that means that they got a good deal. And I know there was a lot of people in 2006, 2005 that got something under list price that thought they were bragging, “Hey, I got a great deal,” and two years later, those places in California were worth half what they paid. That appraised value moves. It’s not set in stone.
And the same is true for people that got something … Or sorry, that was for the list price. The same is true for the appraised values. You can get something that appraises for more that feels good at the time, but when the market goes down, everything goes down. And if you don’t have reserves in place to weather the storm or that property doesn’t pay for itself, it may not look like a good deal when things change. So don’t make that mistake of chasing what you believe is a good deal thinking that that’s keeping you safe.

Brandon:
Yeah. So good, man. Yeah. Don’t go broke buying good deals. Have reserves. Keep your ego in check. Anything else we want to add there, or move on to number seven?

David:
Yeah, let’s move on.

Brandon:
All right. Number seven, winners track results. Winners track results. I think there’s a famous phrase that says, like, “What’s managed gets …” What’s the phrase? You know what I’m talking about? It’s like, “What-”

David:
Yeah, “Inspect what you expect”?

Brandon:
Yeah, that’s another one. But it’s the same concept. It’s like-

David:
Oh, “What you focus on expands.” That’s what you’re thinking.

Brandon:
Close. It’s the same concept, yeah. It’s an MM thing, it’s like an alliteration. “What manages matters,” I don’t know, whatever. The idea being, winners track results. In other words, if you want to get better at eating less food, track your calories. You will eat less food, because all of a sudden you’ll be aware of it. If you want to be better at real estate investing and you want to buy more properties this year, start tracking how many leads are coming across your desk, start tracking how many deals you’re analyzing every week, start tracking how many offers you’re making. Just tracking this stuff makes such a difference.
In fact, in our completely, Open Door Capital, for the mobile home park business, we meticulously set goals and track the number of hot leads that are coming in, cold leads that are coming in. We track the number of deals we underwrote fully. We call them a hard look, or we took a long underwriting process on it. And the ones that we just underwrote quickly, like kind of a rule of thumb analysis. We track all this stuff. How many offers we made, how many LOIs, all that stuff. So the key is … And that, I believe probably more than anything else, has made the difference in my business, is any time I track meticulously what I’m doing, things tend to improve, which was a big part of the show we did. We had an author named Chris McChesney. He wrote a book called Four Disciplines of Execution. It’s probably my all-time favorite business book, definitely in the top five. It was show number 328 of the BiggerPockets Podcast. That’s the advice he gave, is focus on your lead measures. David, you want to explain what lead measures are?

David:
Yeah. You have to understand lag measures to compare them to lead measures, to have some context. So let’s say you’re trying to lose weight. Once you step on a scale and you see how much you weigh, we would consider that a lag measure because you’re tracking something that has already happened. You are tracking the result, not the action that led to the result. A lead measure would be tracking daily how many calories you’re actually eating. Because when you track lead measures, you’re thinking your mind, “If I eat this gummy worm, it’s going to affect my goal in this way,” as opposed to, “Well, let’s just see how good I did when I track my weight.”
Lots of people know to track their net worth. That’s cool, but it’s much better to ask yourself what would lead to an increased net worth. Okay, that’s buying deals, and then work backwards from there. In order to buy more deals, I need to write more offers, I need to look at more properties, and work all the way back to the point that you can actually vacuum your truck. And training your brain to look at the world that way and value lead measures will almost certainly lead to better results.

Brandon:
Yeah. It’s funny how much all these advice tips, they fit together so-

David:
There’s a common thread, isn’t there?

Brandon:
There’s a common thread, yeah, and they all fit together so well. You’re tracking your lead measures, [inaudible 00:48:59], but you’re getting your lead measures because it’s the vision back … It’s that advice, “Start with the end in mind and don’t tell me what you have, but tell me what’s possible, tell me what you need to get there.” It’s all connected and I love that.
Another related piece of advice that’s part of this number seven. I can’t remember the guy’s name. I wish I could, I just don’t remember it. But I was at an event. It was a GoBundance event and David and I are part of this tribe called GoBundance. There was a speaker there who won a gold medal. I think it was in swimming he had won a gold medal. And he said this phrase, and I wrote it down at the time and I thought it was so good, and I think about it all the time. “Winners are made in practice.” Winners are made in practice. In other words, you see … I mean, you guys get the analogy, right? No matter what it is in life, it’s not like they suddenly woke up that day and won a gold medal. That gold medal was actually earned from the hundreds and hundreds and hundreds of practices before, thousands of practices, the waking up at 5:00 AM and going to swim and all that. That’s where winners are made.
And so in real estate investing, winners are made in practice. What does that mean? It means running the numbers, analyzing the deals, going to meetups. That’s all practice. You’re not necessarily closing on a house. That’s the end result. That is the lag measure. It’s the practice. It’s the reading the books, listening to the podcasts, attending the webinars. That’s all practice for what you’re going to get to. So again, how can you make sure every single day you’re practicing? It doesn’t take eight hours a day, but it does take time every single day, consistent daily action is what leads to results.

David:
Beautiful. That’s great advice.

Brandon:
Thanks, man. Let’s move on. Number eight. You want to take that one?

David:
I love this one. This is advice that comes right out of the book The Richest Man in Babylon, which was one of … I consider that book to me a mentor to me when it comes to my own personal finances. One of the rules of finances that came out of that book is only invest in what you know. There’s a story that’s told in the book about a very hard worker who’s saving all his money who is approached by a friend who says, “Hey, I got the inside scoop on a deal.” Anybody relate to this? Somebody who comes up to you talking about something that you don’t understand, but how you have a great opportunity. That person says, “I know a guy who’s going to sail this ship to this country, buy a bunch of gems at wholesale prices, then sail the ship to a country where they have a bunch of money, sell them at a 10 times profit, and then come back with all the money they’ve made. If you invest X amount of dollars in this deal, you can get X amount of return.” And the person thinks about it and he says, “Where else can I get a 10x return? Here’s my money.”
Here’s the crazy thing. Nobody ripped him off. The people who he trusted were honest. They intended to do exactly what they said, but in the story, they weren’t sold gems. They were sold colored pieces of glass that they didn’t recognize were not valuable because they didn’t know the asset class that good. So even when everybody was honest and upfront, they still lost all their money. And what’s the rule? The rule or the moral of the story that you take from this is you should only invest in things you understand. I understand real estate, and that’s why I invest in it. When people come to me and say, “Hey, do you want to buy bitcoin? Do you want to invest in foreign exchange trading?” Even, “Do you want to get into the stock market?” My answer is always no until they convince me, like you just said earlier, Brandon, of yes. Not because I don’t trust the people, because I don’t understand the asset class and it’s foolish to put my money into something I don’t understand.

Brandon:
That’s so good. Yeah, it’s so good. I had a buddy the other day … just the other day, he comes to me and he says, “What would you say if … I got a buddy. What would you say … I got a buddy who he’s making an 80% return on investment every month on your money? 80% every month. That means you basically double your money every single month, almost.” He’s like, “It’s this really cool … It’s a brand new proprietary system that works with 4X and blah blah blah.” And I was like, banging my head on the table. First of all, I’m not saying it’s not true. I would never say the stock market is not a good idea. I mean, look at the last four or five months. It’s been amazing, right? I would never say 4X doesn’t work, or day trading doesn’t work, or Amazon businesses, FBA, all that stuff, I would never say that doesn’t work. But I don’t know it.
I mean, I could pretty much tell you whatever this guy was trying to do doesn’t work, but I don’t know, maybe he did figure out some proprietary thing. I don’t know, but it doesn’t matter. I have a default no because the way I operate my life is based on that. It’s the same advice I said I read in the same book early on, is I don’t invest in things I don’t know. It doesn’t mean I have to be a complete expert, but the person I’m investing in … I’ll put money into other syndication projects, like other investors. It’s because, A, I understand the basics of real estate and I invest it in a person I understand, which is also key. Because I know they understand the asset class. So even that, I would say probably is not necessarily quite as safe as doing it yourself, but it’s a whole lot better than saying, “Well, I don’t know anything about bitcoin, but my brother-in-law is starting a bitcoin mining company.”

David:
That’s it.

Brandon:
Yeah, “He didn’t do bitcoin last year either, but man, have you seen bitcoin?” And then they invest in that terrible advice. Don’t do it.

David:
Yeah. I get approached a lot by the people that are trying to buy … like in the cannabis industry. Like, “It’s legalized. Let’s be the first people to get into there.” I’m okay to miss out on an amazing opportunity because let’s say that everybody had the best of intentions and they’re very smart people. There’s still curve balls that could be coming that they don’t see, and I’m definitely not going to see it. And all this work I’ve done to study real estate benefits me zero when I’m trying to figure out how to make money in the cannabis industry.
I know I’ve talked to a lot of real estate investors that were super good at what they did and they got crushed when they stepped outside of their asset class. Even something as simple as buying hotels instead of commercial property. Have you heard that one, too, Brandon?

Brandon:
Yeah.

David:
The people that know how to do multifamily and then they try to buy a hotel and they get absolutely hammered. There’s just too many things that you can’t see coming, and like we’re saying, every time you learn a new thing, you have to be ready to get punched in the mouth a little bit. You don’t want to put a big chunk of money into an asset class and go get punched in the mouth if you’re not willing to do things right and really learn what you’re investing in. So for me, hard no if somebody approaches me with an opportunity in an industry I don’t know. And it takes the pressure off of me. I don’t want to hurt my friends’ feelings. There’s some times your buddies will come to you and you don’t want to do it, but you don’t want to say no. I just point to that book and I say, “Well, I can’t because it violates the principles in Richest Man in Babylon, and that’s my mentor.” End of discussion.

Brandon:
Yeah. Oh, man. That’s so good. Yeah, I mean, I could just leave it right there and let you drop the mic, but I’m going to pick it back up again and go a little longer, just a tad longer on this. People might be wondering, like, “Well, what about expansion and growth?” You don’t want to stay in that single family house forever, or that duplex forever. How do you grow into a next level if you don’t know it, right? And the answer is, you learn it before you get into it.

David:
There you go.

Brandon:
So when I decided to get into mobile home parks, I didn’t know anything about it. I just interviewed Jefferson Lilly here on the podcast, interviewed Kevin Bupp here on the podcast, and really enjoyed their episode. So rather than just going and buying a mobile home park, I then read every book I could find on mobile home parks, talked to every mobile home park investor I knew, and just spent months and months and months living in this world of practice, analyzing deals and working it. That’s how I was able to expand. And even when I did, I didn’t expand into a thousand-unit portfolio right away. I bought a … what was it, 42 units at the time. We’ve expanded it to 50 now.
And then I didn’t even do that entirely. I brought in a partner. I worked with Ryan Murdoch on that very first deal because he lived in the area, he understood that market, he had managed mobile home parks. Even though he hadn’t owned one, he had managed them for like a decade. So I then harnessed all of his experience with all the education I was getting, and that is when I bought that first park. And you know what? We learned so many lessons. We’ve lost money in different ways. I mean, overall that deal is going to be amazing. But different aspects of it cost way more money than we thought, and it’s because we didn’t know it. Even with all that experience and knowledge, we still didn’t know it. But you know what? We started small. Then after that, we bought a 168 unit. It was bigger, but it wasn’t like a million times bigger, and we learned some lessons there.
Then I lost 40 grand on a deal I tried to buy and it didn’t work out, so I lost 40 grand with the earnest money and that sucked. But I got back up and tried a little bit more. So in other words, the point being, it doesn’t mean you have to stay where you’re at forever. But investing in something … You have to learn it before you can invest in it, so it doesn’t come easy. You have to put in some practice.

David:
Absolutely.

Brandon:
All right. [crosstalk 00:57:31]

David:
All right. Last one.

Brandon:
All right. Last one today. Let’s see. You want to talk about it? You want to take it?

David:
Yeah. The last one I want to talk about is that bigger deals does not always equal harder deals. There’s a misconception in people’s minds that buying a single family house is easier than buying an apartment complex. I would say it’s different, and it feels easier if you understand single family homes, which most people do. But something as simple as getting the financing for a 100-unit apartment versus a one-unit residential property is often way easier to get it for the apartment than it is for the property.

Brandon:
Even if it is harder, it’s not 100 times harder. It might be 10% harder if there’s some additional work you need to do. But yeah, we found commercial loans are actually generally easier …

David:
Very good point.

Brandon:
… than a residential.

David:
Yeah. Don’t get caught up into the thought that buying a fourplex is more difficult than buying a single family house, okay? Or that buying an eight-unit property is way harder than buying two fourplexes, okay? Brandon’s concept of the stack where you buy a one unit, then a two unit, then a four, then eight, then 16, and you continually improve, sort of combines only invest in what you know with the growth principle. You’re staying in your lane of real estate investing, but you are expanding how big you get. We have found that once we get into the bigger deals, they’re not always harder than the smaller ones. They just feel that way at first because you have to learn something different that you didn’t know before.

Brandon:
Yeah. That’s really what it is. It’s like you have a certain knowledge base right now, and so in the beginning, everything feels hard. Going from nothing to a single family house is much easier, I’m sure, than going from nothing to a 100 unit, because there’s just things you don’t know. However, if you stay at the single family forever … rather than growing, you just stick in there because it’s easy, you’re living in your comfort zone … That’s another way you could’ve phrased this entire tip today, this advice, is bigger doesn’t always equal harder, but at the same … Don’t live in your comfort zone, unless that’s really just what you want. You’re just happy in this little spot. But I think there’s so much happiness in growth and trying new things that people just get stuck in their comfort zone of, like, “I just buy little deals.”
But if the idea of bigger deals worries you because you think it’s harder, that’s what we’re trying to erase here. Bigger deals are not harder. They’re different. You have to learn them. There’s a whole new learning curve, but take it a step at a time. How do you vacuum that truck? What’s the first step? How do you learn? Who can you consult with? Who can you bring in to help you? What resources do you currently have and which ones do you need to build? Now, that’s how you get to that bigger level, if that’s where you want to get to.

David:
And that’s what I did with the David Greene team, my real estate brokerage. When I was selling two houses a month, I was working a legit 10 times harder than I am, and we’re on pace to do around 140 this year. I’m doing way more work, but it is way easier for me because as I grew and I brought people in to share the load and we became more efficient, it got a lot easier to make a lot more money and be a lot more effective. There’s so many agents that are afraid of that growth, and so they try to just do it all themselves. And most of them max at like 40 houses a year. It’s very difficult to get to do more than that as a single agent.
But I followed this principle myself and now I have a much more profitable, streamlined, more fun and easy business with several people because we grew than if I had stayed in that small place, which was a comfort zone at the time. That was a lot harder, man. I was grinding to get to that 24 deals a year. Because if you’re selling two houses, you’re probably working with, like, eight people every single month to try to get there. And now that I’m on the other side of it, I totally understand this principle and it would be hard pressed for me to ever go backwards once I’ve tasted it on this side.

Brandon:
Yeah. Yeah, I would tell my wife that a lot in the growing years as we were building our portfolio. It’d be hard work. We’d be up until 2:00 AM painting a unit and … I mean, there’s a whole lesson there on when’s the time to move out of doing your own work and should I have done it. But besides that point, I would often tell her, and still to this day, the only way this becomes easier is by going bigger. Because she’d be like, “Are you sure you want to buy that next level, that next property, that bigger thing?” I would say, “The only way this becomes easier …” So today, I mean, I think she works a couple hours a month on the managing side of the business. I work a couple hours a month on the current portfolio we have. And I spend time with my team at Open Door Capital, but they do 90% of the work. It’s finally come true where it’s easier because we got bigger. Now we have the support needed to be able to support the team. So in reality, sometimes going bigger is actually way better.

David:
And that’s the reward for stepping out of your comfort zone. If you can delay that gratification and continue working towards, “Okay, I’ll put all my money back into my business. I’ll keep getting punched in the teeth until I figure out how to find the right team members or be a better leader.” All the pieces that you needed to get to where you are now with Open Door Capital, the reward is you can make money at the beach. You can work when you want to. You can work on the things that feel light to you. There’s definitely an amazing light at the end of the tunnel if you keep pushing forward.

Brandon:
Yeah. So good. Hey, you brought up something, and I know we said that was the last tip. But I want to add one more in here since we actually took one away earlier, so it’ll make this a full 10 pieces of advice. You mentioned maybe you need to work on your leadership. I want to talk on that just for a second. Not just leadership, but also just business success. So this is the advice. It comes from Michael Gerber, who was on our show a long time ago. I don’t remember what episode it was. But Michael Gerber, he wrote the amazing book The E-Myth Revisited. If you have not read The E-Myth Revisited, please read The E-Myth Revisited. It is game changing. But that book can be summed up in this sentence, this piece of advice. Work on your business, not in your business. Now, I’d add the word not just in your business, because at some point, you have to work a little bit in your business.
But what he means by that is there are people who are really good at … he uses this analogy … at baking cakes. It doesn’t mean they can run a bakery. Those are two completely different skillsets. There are people who can paint a wall but can’t manage tenants because they’re two completely different skills. And so the advice that he’s basically giving here and that I’m giving everyone here is focus on being a business owner. As a rental property owner or as a house flipper, what does that mean? It means, A, you’re always thinking in terms of systems and processes and people. Like, “How do I systematize this? How do I make this a process?” You’re also thinking about leadership. How do you inspire people around you? How do you get others to come to your side? I mean, you’re not leading if nobody’s following you, right? The clearest definition of a leader is somebody who has followers.
So how do you get people fired up around you? How do you inspire those people? How do you just have a vision for where you’re headed? That’s a CEO’s job is to have a vision and to just focus on that. And so that would be, I guess, my advice, is really work on the higher level stuff, the business stuff. Don’t read just real estate books, but read business books. Read personal development. That’s the higher level that you need to master. What do you think?

David:
Oh, absolutely. Real estate investing is a form of owning a business. Every rental property you own is its own little business, and having several of them all together in a portfolio is just a bigger business. When Brandon and I are helping people through why they’re having trouble getting started with real estate investing or why they hit a plateau, they can’t quite get over it, it’s always a business principle that needs to be brought in. When we’re talking about how to run numbers, how to analyze, how to build cashflow, those are the fundamentals of the business that we are in. This is why we’re talking about it. But it’s still a business.

Brandon:
Yeah. It’s still a business, and so learn the business. Get good at the business skills and you’re going to see everything in your life get better. I’ve told this story before, but maybe we’ll leave and end it with this. I had friend … I have a friend … whose parents were real estate investors for like 40 years. They’re super hard working, blue-collar people, very, very hardworking. They owned maybe two dozen rental properties in the area. They mostly did their own work. They screened their own tenants, did all that. And I’m not saying anything wrong with that. We still do some of our own projects as well. We have a kind of internal team. But they never treated it like a business. It was always a hobby to them. They were always just like, randomly get a phone call on their cell phone and they run over to fix a leaky pipe or whatever, and for 40 years, they managed their real estate this way.
A couple years ago, they went bankrupt. I mean, they lost everything pretty much. They even got a divorce in the process, this couple who have been … I mean, we don’t invest in real estate because we like managing tenants. We don’t do it because we like managing contractors or flipping houses or whatever. That’s not why we do this. We do it because we want the life that is possible. So in other words, these people spent 40 years trying to create a life possible and never got there. And I would argue the reason why is because they never treated their business like a business. They always were working in their business and never on it, and as a result, they never got the amazing life that real estate can offer. So don’t be that person. Develop businesses like systems processes, people, and get this done right.

David:
Make that part of your vivid vision. How are you going to build those systems? How are you going to build those processes? and work backwards from there.

Brandon:
Yeah. I really like to think of it as a machine. I think Gerber might have said that in the book, but everything I try to think of as like, how is this an engine that just runs? This piece moves into this piece, which turns this piece. Everything runs like a machine and I am not a part in that machine. Now, I might be in there. I might temporarily be a part, but I recognize that I am a part that can be replaced with somebody else.

David:
Yeah. Sometimes things break and you got to go in there while you’re waiting on the replacement part or the new person to hire, you go play that role for a time being, and as they come, then you replace yourself and you get right back out and you work on the next piece.

Brandon:
Yeah. One of the best pieces of advice I ever had was … When we were planning this show, I should have thought of adding this as an actual piece, but it fits here perfectly, is … It was some billionaire being interviewed and they asked him, “What’s the secret to your success?” And the guy said, “I’m a quitter.” And the interviewer laughs and said, “Well, what do you mean?” He said, “I’m a quitter. Everything I do in life is to quit. I start something and I find the fastest way out to get somebody else who’s better to do that job correctly and to keep it going.” So I’m always quitting. I’ll start something and I quit it. It doesn’t mean that nobody’s doing it. It means that I find somebody better to do it. And so I’m basically … His job and your job and everyone listening, your job is a mechanic or an engineer. You’re building a machine. And keep that mindset. “I’m building a machine. I’m not the machine. I am not a part in a machine. I am building the machine and I’m going to just keep being a quitter so that each one of these works more fluidly and smoothly together.”

David:
Oh, that’s so good. I mean, that’s a lot of what Long-Distance Real Estate Investing the book is written about, how I put the systems together to buy in other states because I didn’t have the luxury of going to paint the wall myself. It’s somewhere else. So it forced me to kind of tighten up those systems. But this is really good. You want to listen to this, because you could escape the job you have and end up with the new job of being a full-time real estate investor, which may be better than the job you had before. But it’s still a job. It’s much better to own a business, not just have a new job.

Brandon:
Yeah. So true. All right, man. This was fun. I don’t know. I probably should do kind of an ending here. We don’t have to do the famous four or anything, but maybe I’ll ask you this question. What books are you reading right now? What fires you up? What books from your past made a big influence on you? Maybe we’ll end it that way, give people something to go listen to or read.

David:
Pitch Anything by Oren Klaff. I’ve talked about that quite a bit. I don’t like the title because it sounds like how to be a salesman, but it’s really about the psychology of getting people to understand what you’re trying to say. Has been huge because as I’m trying to build my machine that you referred to, other people have to play a role in it, and I need to get them bought into that vision. The principles in that book really helped. That was one of the things where I had to say, “What do I need to do to accomplish what I want? Well, I need people. Well, how do I get them to buy in? I’m missing a skill.” That book has sort of stood in the gap. And then, of course, it also helps with the people that are coming to me to buy or sell a house. They’re often nervous, they’re scared, they’re confused, and the better that I can communicate what’s in my head and get it into theirs, the more success I’ll have.
And that’s something that I’m just very passionate about. “Okay, I want to be at B and I’m at A. What does it take to get there?” Often time, it’s knowledge, and books like the ones that we referred to today or mentors like the ones we referred to today can help bridge that gap.

Brandon:
So good.

David:
How about you? What are you reading right now?

Brandon:
I’m reading a book called Storyworthy by a guy named … I think his name is Matthew Hicks, but it’s called Storyworthy. It’s about storytelling, just being a good storyteller. I’m reading that one right now. It’s phenomenal.
But I’m going to actually name another book I want to recommend. If you guys have not read Cashflow Quadrant by Robert Kiyosaki, I want to recommend that one today because it ties into what we just talked about a minute ago, about you can be working in your business or on your business. He basically defines there’s four quadrants that people find themselves in. They’re either employed by a company, which is fine if that’s what you want to do, and there’s nothing wrong with that, but you’re there until you find a way out of it or you die. Then there’s the self-employed. It’s like, I own a landscaping business and I go out every day and I cut grass and I trim trees. Then there’s the business owner. They own a business and they hire people to go out and trim all those trees for them. Then there’s the fourth category, which is the investor. It’s the person who basically puts up the money for the business owner to be able to buy their tools so they can then hire employees to put it out there. So the investor just makes money off investing their cash.
And so in the beginning, real estate investors really go through all four stages of those. I mean, we all have jobs when we start, and eventually, most of us become self-employed. I was definitely a self-employed landlord. I was in there doing all of my own work, doing everything myself, just because that’s what my job was. Today, I consider myself much more of a business owner. I have people that do most of that stuff. I’m making the engine. But then fourth was the investor, which now I take my cash that I make, whether it’s from anything … from book sales, from rental property cashflow, from flipping houses … and I dump that into investments, whether it’s people … I invest in people and build my team, but also other people’s syndications or other projects in the future that are hands off. So Cashflow Quadrant was a big one for me.

David:
Beautiful.

Brandon:
Cool, man.

David:
Well, thank you for 400 episodes, Brandon. I wouldn’t be here right now if it wasn’t for you and for all of BP. Hopefully everybody who listened to this got a little bit more value and they understand that … I believe that one of the few things in life that you cannot outgive is real estate. Everything you give towards learning it, investing in it, whether it’s your money, your time, your energy, whatever, real estate will always pay you back more than you give. That’s one of the reasons I love it so much.

Brandon:
That’s so good, man. Well, everybody, if you liked today’s show, like we said earlier, please do us a favor. Leave us a rating and review in iTunes and tell a friend about the show that you liked it. Last thing here, just a personal favor I’d like to ask everybody. We recently relaunched my three early books, which was the book on investing with No and Low Money Down, the book on rental property investing, and the book on managing rentals. We basically relaunched with new covers, updated content a little bit, and we never did a huge formal launch for it. But just want to let everyone know that that’s out there.
So here’s the favor I’m asking, is A, if you haven’t read any of those and you were going to do it, if you want to pick it up and get the new cover, that would be helpful. But more importantly, if you have read it, especially if you bought it from Amazon, if you could leave me a review for those three books. And I’ll throw David’s as well. If you’ve bought David’s on Amazon, those verified reviews are really important for helping us reach more people with those books. So that’s just the personal favor I’m asking for, and that’s all I got, man.
You can find David Greene over on Instagram @davidgreene24. I’m @beardybrandon, of course, on Instagram. You can follow BiggerPockets everywhere at BiggerPockets, all over YouTube, all over Instagram. I don’t know if we have a TikTok yet, but we probably will. And that’s it. That’s BiggerPockets. So David, you want to take us out of here?

David:
All righty. Thank you. This is David Greene for Brandon 400 episodes Turner, signing off.

Speaker 2:
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