Live Q&A with Brandon and David: Risk, Partnerships, Inspiration and Opportunity of Real Estate

Brandon:
This is the BiggerPockets podcast show #453.

David:
You have to learn the skill of delegation and management in order to be able to do everything. That would be the one thing that would benefit you immensely if you could get that down.

Intro:
You’re listening to BiggerPockets radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing, without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com, your home for real estate investing online.

Brandon:
Let’s go down, am always Brandon Turner, host to the BiggerPockets podcast, here with my other host of the BiggerPockets podcast, David other host Greene. What’s up David other host, Greene, how are you doing?

David:
I’m doing great. You guys have spoken and we have listened. We have another awesome episode today where we bring in live callers to answer their questions on, mindset, growth and really anything that is stopping people from having the life and the success that they want.

Brandon:
There we go. So we’d a live call-in show and we had some amazing questions today. Really good stuff that we dive into, like the mindset and the strategy behind what it takes to really succeed, especially to succeed as a real estate investor. But we talk about other just business things in general, that I think that, no matter what business you’re in right now, it’s going to benefit you. So listen all the way through, you guys are going to love this. And if you’re wondering, “Wait, how come I didn’t know they were going live? What was going on, why didn’t I get on, on this action? It’s because you probably weren’t following me on Instagram. So that’s your quick tip, is follow BiggerPockets on Instagram, follow davidgreene24 on Instagram and beardybrandon. We’re going to be doing more and more live stuff, answering your questions. So that is today’s quick tip.

Brandon:
One more quick tip for you, is if you have questions, like did you know we have a forum that’s open 24/7 that’s totally free, biggerpockets.com/forum. You can ask questions about anything and there’ll be thousands of people reading your questions, maybe not thousands, but there are thousands of people on the forums. In fact, there’s over two million forum posters right now. So go on there, post your questions, get real-time feedback from people who are smart and in the business and that care about you and your success. It’s really an amazing place.

Brandon:
All right, big thanks for our sponsors as always. And now, I think it’s time for us to get on with today’s call in show. Like we said, these are actual real BiggerPockets members who are going to jump in and ask questions, and I think you’re gonna like this. So without further ado, let’s get to the first one.

David:
Logan, what’s up man?

Logan:
How’s the going guys, you are doing all right?

David:
We’re doing all right. Where are you at? Where are you calling in from?

Logan:
I’m from North Carolina, right outside of Charlotte.

David:
Very cool. That’s a good real estate market actually.

Logan:
So you got me right over here, relieved to talk with you guys right now.

David:
We’re excited to have you.

Brandon:
Hey, look at that?

Logan:
[crosstalk 00:02:38] okay.

David:
Yes, you saw on Brandon’s book.

Logan:
I’ve got chores over here. I just finished your BRRRR book. So we’re good. Now, so I’m looking at my first property, probably doing more like a 20% down to start out, so I can get some more cashflow to maybe buy some more properties. But what I’m asking is, I noticed that duplexes in places like Birmingham, Alabama, Huntsville, all kinds of places, they usually cheaper, but then they’re obviously a lot cheaper than it is in Charlotte. So I’m just more of nervous to get started on something like that, because A, it’s farther away B, I don’t really know the area as well. How much risk am I really gonna face by not knowing the area that much?

David:
Logan here has two options. So you can buy in Huntsville, Alabama, or where was it? North Carolina?

Logan:
Yeah. So like Charlotte or the outskirts in North Carolina, which is a little bit more expensive.

David:
And you know that area worse or better?

Logan:
I know North Carolina a lot better. I know nothing about Alabama, I was just using that for example. I just noticed that their properties are about 10 to 20% cheaper.

David:
So the question is, should you buy in a cheaper area that you don’t know as well to reduce risk? Or should you buy in the area that you know better, even though the properties are more expensive?

Logan:
Save my money just a little bit longer and before. I’m just getting antsy on getting started, but maybe waiting that extra six months or so, might benefit me.

David:
Let’s dig a little bit deeper into this, it sounds like you’re trying to figure out what’s the right decision for you. Is that fair, Logan?

Logan:
Yes, sir.

David:
All right. And then you’ve got a pit in your stomach that feels like you don’t want to make the wrong decision.

Logan:
I don’t want to invest in a bad area with bad tenants who just destroy. In your BRRRR book, it’s something like the hole in the glass windows or something like that. Theory that if I bought a bad area they’re just going to destroy it.

David:
Oh, the broken window theory.

Logan:
Yeah. That’s it. That’s it.

David:
Okay. Yeah. Right, so Logan here is trying to figure out, should I buy in a cheaper area that I don’t know as well, because there’s less risk associated with the lower price point or a more expensive area that I know better? Which one’s actually less risky? So Logan, this is a question of risk, is that fair?

Logan:
Yeah. Yes, sir.

David:
My assumption would be, your gut is telling you North Carolina is better, because you’ve already mentioned things like, the broken window theory. You think there might be high crime in the Alabama area, you don’t know it as well, you don’t have the people in place. So it should be an obvious yes, you should buy where you are. Only thing that’s stopping you, is the fact that the prices are higher, which tells me that you’re associating higher prices with more risk. Is there anything I’m missing?

Logan:
Yes. That’s that sounds pretty spot on.

David:
Okay. So your mindset issue right now is, is a higher price actually more risky? And I’m going to tell you, Logan, I can relate to you on this because I get in the same boat as you. I’m looking at a $15 million property right now, I’ve never bought one property that’s that much money. And it is terrifying to think about the fact that I’m buying this place that’s going to be $70,000 a month. My mind just keeps going back to, if all my tenants stopped paying, it’s going to be 70 grand, 70 grand, 70 grand. It’s just pounding me. Which is the same thing that I felt when I bought my first house, believe it or not. I was like, “All right, if I don’t have any tenants at all for a full year, it’s going to cost this much money. Am I going to be able to cover that?” And I think this is a normal thing that our brain thinks about. Do you want to comment at all on how you approach those situations?

Brandon:
Does risk equate to the price that you’re buying? The risk in my mind, or at least I always experienced it was, can the risk of like the time it takes to actually get there, in other words, to actually get to that financial freedom number or whatever that thing is. So if you’re just getting started, and you’ve got 30 grand you could put down on something like if you’re going to buy an area where properties are $500,000, it’s gonna take you forever to get the first deal, forever to get the second deal, forever to get the third deal, versus you will buy in Alabama where you can buy the first one tomorrow, and then three months from now, you could probably afford another one.

Brandon:
That is a risk, I definitely tend to be concerned about. Like you hate your job, your goal is to get out as quickly as possible, you want to go to that cashflow financial freedom. I would definitely be concerned. Now, longterm, I think an area like Charlotte is probably gonna appreciate way better, when you have $500,000 house turns into a $700,000 house, that equity, that growth is way, way better. But the difficulty of course, is just that takes a lot longer in terms of cashflow to get there, and each deal just takes a lot longer to buy. So, I don’t know, that’s the way I look at the risk. There is not so much to risk of the deal, the deal can go bad in any market. A deal could be scary, now it’s which one is going to get you there faster.

Logan:
I just feel antsy to get started. Then I’m just like, “I can get one now in Huntsville, or I can wait another year and get one in Charlotte.” You know what I mean?

Brandon:
Yeah.

David:
I would say your risk is lower when you get into higher price points. As odd as that sounds, I want you to just think about somebody living in a really rough area where houses are very cheap, unemployment is really high, job stability is really low, maybe their education is different, they don’t value things like paying rent as much, versus a doctor in Beverly Hills. Which of those people is more likely to make their rent payment? So even though our mind sees a big number and says, “This is scarier,” it’s probably much less scary because the quality of tenant you’re going to be renting to in a nicer area that you know very well is going to be more likely to pay, just statistically speaking. This isn’t any like judgment on different demographic groups. So I would remind myself of that.

David:
And then, like Brandon said, what your struggle here is going to be, how long are you going to have to wait to get started? So my question would be, how do you make peace with the fact that North Carolina is probably the better option for you, and it’s actually less risky? And how do you get there without having to save for another year? Can you buy a house as a primary residence in [helsaki 00:08:28]? That takes you from 20% down to 5% down, right off the bat. You probably have enough money right now to do that. Can you find a house hack that’s not a stereotypical Triplex or duplex. If you could find one of those, that’s awesome, but if you can’t-

Logan:
I found one duplex in the area that was sold and then all of a sudden, just come back on the market. So I’m excited about it. But that was one of very few that I’ve noticed. It’s on the outskirts of Charlotte, in a little town called Kannapolis. It just came on the market today, so I’m pretty excited on that one. When we thought about house hacking with that duplex there, the numbers line up pretty good.

David:
Literally asking you, what would stop you from doing that?

Logan:
I really don’t have an answer now. I’m probably going to be all over that one more, but with that being said, so let’s say I purchase that one this week, this month, blah, blah, blah, I’m looking at my next step. At that point it’s, okay, now, I found a great deal in Kannapolis at the outskirts of Charlotte, I was looking more of, do I now go to Huntsville or something like that because funding deals are so hard to come by around here?

David:
So I was about to say, don’t just look for the duplexes. Look for single family homes that have basements, that either are or aren’t finished, that you can buy and operate it as a duplex, or an ADU or a floor plan that would be very easy to split into two. Avoid one bathroom houses, because then you got to run plumbing for a kitchen or a bathroom off of only one bathroom. If you have more than one bathroom, like two or more, you got easier ways you could tap into plumbing. So you’re turning it into basic to be able to function as more than one unit.

David:
And try to avoid anything that’s on a concrete slab foundation. If it’s on a raised foundation, it’s much easier for you to run the plumbing, the electrical that you’re going to need. And the minute you do that, you start looking at the market that way, you’re going to see that there’s way more options out there than what you thought. You were thinking Huntsville or Charlotte, and now you’re like, “Okay, in North Carolina, I got 25 options, which is the best one?” And I think that your anxiety is going to go way down.

Logan:
Okay. Perfect.

David:
All right, man.

Logan:
Thank you very much.

David:
Pleasure, Logan.

Brandon:
All right, Sammie. Welcome to the show. Sammie, how are you doing?

Brandon:
Welcome. This is our first official call in show that we’ve done in the shed today. So we’re figuring out the technology here, but what can we answer for you?

Sammie:
I’m actually going to be a new real estate agent. But I’m also still dabbling a little bit in real estate investing and where I live currently, the market is kind of good, but a lot of the houses are more expensive in, well, like the areas that are good to buy houses and everything. And I keep getting told by other real estate agents like, “Oh, you’ll find, you’ll be fine, you’ll get it eventually, houses, some clients you’ll just keep, you’ll go and then you’ll fail or they won’t want that house. How do you keep that fire going even though, it’s like time after time, it’s not exactly what they want or what you want? How do you keep that mindset of just like one day I will get this?

Brandon:
If everything’s a funnel, when it comes to real estate investing, finding deals or being a real estate agent or being a salesman in a car dealership, doesn’t matter. It’s all the same. You have to work this process over and over and over, and eventually, should work out to success. So if you’re a real estate agent, you got to meet with dozens of people, you show dozens of houses, they just keep saying, no, the deal falls through.

Brandon:
If you’re a real estate investor, you go and make an offer on 20 deals. Every one of them or 20 properties, every one gets rejected. And then you feel like it’s not working and you lose the fire. So this is a very common thing with anybody that has any kind of sales type job, which real estate investing is, real estate is and car dealership is. So the question is, how do you keep the fire? Let me start with you, David, on answering that one because an agent, you’ve dealt with that a lot, and then I’ll jump back in.

David:
The question here Sammie, is going to be, when you’re getting rejected over and over and over, how do you stay motivated?

Sammie:
Yeah.

David:
Okay. This is a great question. I love it. And frankly, this is what separates legit agents from not legit agents, which is-

Brandon:
And investors.

David:
Yeah. And investors, absolutely. Okay. I’m trying to give a nice way to say this, the amateur expects everything to come to them easily, and they blame everyone else for why something doesn’t work. So they write 20 offers, they don’t get anything under contract for themselves. And they go, “I guess, real estate sucks.” Or they show 20 houses to a client, the client can’t make a decision, and they go, “This client’s an idiot.” It’s where we get this phrase in real estate, buyers are liars. We hear this all the time.

David:
On my team, and the attitude that Brandon and I ascribed to, is the extreme ownership way of looking at that when it says, everything’s my fault. So if I show a client or I write 20 offers for a client and they’re not accepted, that’s my fault. I did not advise my client what it would take to get an offer accepted, I did not meet with my client for long enough to talk about what their goals are and if this is something that they really want. Maybe they’re sabotaging themselves on purpose, maybe the house is listed for 300 and you say, we can get it for 302,000. And they say, write it for 301,500.

David:
They actually don’t want to get the house. They’re afraid of home ownership. And you got to dig in and figure out, is it like Logan, where they think that the house is too expensive and they’re afraid to buy anything over 300? Did they buy a house in 2005 and lost in 2009, and now they have PTSD? There’s some psychological issue that your client is having where they’re not writing competitive offers or going after the correct properties. And we have to, as agents look at that like it’s our job to figure that out. We cannot expect the client to do that on their own. Some people will get to that point on their own, many of them won’t.

David:
So what I would say is, stop letting your client drive the car. Get them out of the driver’s seat, put them in the passenger seat, you drive the car. And you say, “Look, let’s dig deep and figure out what you actually want here. Maybe you shouldn’t be a homeowner. Let’s figure out if this is even something, do you just want to pay rent for the next 20 years, this is what rents will be. Let’s talk about why we’re going about it this way.”

David:
And the same goes for real estate investors. There’s so many investors that come up with a million reasons why they don’t actually want to buy a house. It’s just weird like the moth gets close to the flame, but it doesn’t actually want to touch it, so it just orbits around it and never actually gets in there. It’s what’s between our ears. This is why we’re talking about mindset. If you’re being honest Sammie, can you give us a little bit more insight as to why you think this client is not actually putting a house in contract?

Sammie:
In all honesty, I think they’re limited with how much they want to put down financially and how much work they would want to put into it, if it’s a little bit of a fixer-upper before they make it a rental, or if they just want a house that they can buy it and they can flip it and turn it straight into a rental without doing any extra renovations. I think it’s maybe also just them committing.

David:
So this is an investor client, who is figuring out a way to pretend like they’re in, in the investment game, but not actually commit and get skin in the game, is that fair?

Sammie:
Correct.

David:
So they have something in them, they’ve got a little hitch that’s stopping them from moving forward. And you need to look at it like, they need your help to get over that, that the universe brought you into their life specifically to help them figure out what their fears are. It could be something as simple. And this comes up with my own clients where, “We’ll, Brandon and David said, I should be at 70% of the ARB.” Because they listened to our podcast like episode 107 or something like that. And it’s in their mind that there’s a certain discount that they have to get, and if they don’t get it, they shouldn’t buy the house. That’s outdated information that doesn’t make sense for them.

David:
It could be something else where someone in their family is telling them, “You should never pay over the list price.” And you’re over here, saying “We got to go over the list price.” And there’s just this, they’re so confused. They’re waiting for you Sammie to have enough competence to jump into their head, figure out what’s going on in there and help them work through that problem. I can promise you that.

Sammie:
Okay.

Brandon:
I’d also throw in this, that it’s just like real estate investing, and this happens with real estate investments as well. People chase a property because it’s there, rather than chasing a business structure that will deliver continual clients to them or continual houses. For example, someone will be like, “Yeah, my uncle’s cousin is selling their house.” And therefore they’re like, “Oh, off market, I might be able to make a good deal or this.” And for the next six months, that’s all they do, is try to think of 100 different ways to make this one property work. And they just keep trying this property. And I’m like, Shoo, one out of 100 deals is actually going to work out. So instead work on how to get 100 deals a day coming into your pipeline, and you’ll buy a deal a day. It’s really that simple.

Brandon:
And so the same thing is applies to real estate agents, is like that one client just might just never buy a property because they suck. And so work instead on, how do we get a pipeline of clients that are coming in here, what are the actions I can do there? Now, one more follow-up piece to the question of how do you hold the fire? How do you keep that momentum going, when you just get rejected over and over and over and over, whether it’s been an agent, investor or whatever else?

Brandon:
What I like to say is this, is don’t set your goals based on results, set your goals based on process numbers. For example, if I was going to go offer on a real estate deal, my goal is not necessarily go buy a real estate deal this quarter, it’s I’m going to make 30 offers this quarter. If I made 30 offers this quarter, I’ll probably get something accepted. I’m just almost for sure I would. Now, if I didn’t, if I got into the quarter and I hit my goal of 30, because now, notice what I did, is I’m now gamifying the process rather than just hoping for the results. So the same thing you chose for agents or whatever, but gamify the process.

Brandon:
Now, if you get to the end of the process that should have produced the result and it didn’t produce the result, now you got to dive into the process and ask, where am I wrong on that? So finding a real estate deal, I’d say, “Okay, so I made 30 offers and everyone got rejected, why? Because I’m only offering on on-market deals. There’s 30 other offers on every offer I’m submitting, and I’m only offering a nice properties. Hmm, maybe I need to tweak my system and find out what would work better.” And so again, look at the process, make sure you’re gamifying that, your goals are set based on that. That’ll keep the fire going because you know the process is going to get there. Stop thinking about the result. And then, analyze the funnel, where is it breaking down and what part is it breaking down and how can you improve it? So, that’s what I’d-

David:
Yeah. So for investors, you need to do that for yourself, for agents, you are the fiduciary of your clients. Your job to help them to do that and that is why we have real estate agents. If people could do this on their own and they didn’t need that guidance Sammie, then there wouldn’t be the profession of agents. So, my advice to you is that, you have some hitch in your own mindset, that things that you’re either uncomfortable getting into somebody’s world like that, or that you don’t know enough to be able to do the job. You got to let go of that. They came to you for a reason, you do know, your gut is telling you what this person needs to understand. You need to have the courage to go engage in that conversation and you’ll find that they probably just Arg, they’re just going to throw all of their fears all over, and you’re gonna be able to pick through that.

Sammie:
Okay. Thank you so much.

Brandon:
Well, thank you, Sammie. Tyler and Zasha, welcome to the BiggerPockets podcast. So how can we help you?

Tyler:
Thank you guys. Awesome to be here. As far as the mindset stuff goes, I love everything that you guys been putting out and we’re coming up against a two-part problem, one of which is, fear of growth. I think we’ve got a ton of tools at our disposal and opportunity is knocking. And last year, with three extra income and we really want to move forward, but there’s this fear of growth it’s holding us up. And then beyond that, I’m a business owner, self-employed general contractor, a secondary follow-up question is, advice for how you guys would recommend getting away from feeling like I have to do everything myself, and always being disappointed by delegating or having team members? Building a team and not being afraid of growth, in a nutshell.

Brandon:
All right. Great question. So let’s first talk about fear of growth, because this is something I’ve dealt with over the years. I feel like I’ve got a fair amount of experience in. In fact, I still work with my coach, I have a coach in Jason Drees. I still work with him all the time on this concept. And one thing that he taught me and I’ll just explain it here is that, growth is very much like a balloon. The other day my daughter had a little tea party, and so I’m blowing up this balloon and it flow like heart-shaped balloon. And I blow really hard and it just like Aah, it just wants to stay flat. And then finally, it blows up a little bit, Now, right there at that size, it’s like it’s good right there, it’d be easy if it went down, it could blow up to that size again. But then to go bigger, it takes even more work. So in other words, you get to these levels of growth, where it feels suddenly comfortable and then you have to go and stretch right to the next level.

Brandon:
So the question is, how do you get there? And the way that my coach always tells me and the way that I, and it’s going to sound super like Woo, Fufu, kind of esoteric thing. But it’s to breathe. And what he says in the way that I interpret that, is to just accept in the moment, like this is where we’re at. I don’t think you go to like, it’s breathing, meaning pause. Reflect this is where we’re at, we’re good here, this is comfortable. Now we want to stretch to the next level because we’re ready to, because we want to. So I guess that’s the way I looked at it like for example, when I had 100 units roughly, and then it was like, “Should I form a private equity company and go buy 1000 units?” That was like Haah, scary. But I had to be okay, Uuh, I’m here at 100, everything’s fine. It’s working, all my systems are going, this is actually fairly easy. So I breathe and then I accept that I’m going to go to the next level. And that’s when we formed a team. And so it’s probably maybe sounds like layman advice, which is literally that it’s like, breathe and say, “I’m good here, my systems are good here. Now I’m going to challenge myself with the next level.” David, what do you want to add on that? What do you say [crosstalk 00:22:36]

David:
Well, Tyler, part of your question was, how do I let go of the need to do everything myself because no one does it as good as me?

Tyler:
Right.

David:
Okay. This could be literally an entire podcast or more. There’s so many things we can talk about with this. Let me start with this, be grateful that it’s hard. Because those who build a team, dominate, and no one does because of what you just said. That is a struggle every person has and that is a barrier to entry that creates massive opportunity for those that are willing to bust through that. I’ve had to do that, we just hit 57 houses in escrow on my real estate team. When we had nine or 10, I was the stud in my office. So, this is like getting to a point that my mind can’t even wrap itself around the fact that this is going so good.

David:
And it happened because I stopped doing everything, and instead of David having to do it all, I made 10 little Davids, worked 15 little Davids. Now, a few things that I use to get me to that point, because it was incredibly hard like what you’re saying. The first is I started looking at certain problems as, can anyone do this or can only I do this? So there’re certain things that you guys excel at, there’s other things that you do better than other people but they’re not really that important. You have to make it like a game or a rule, that if you catch yourself doing something that someone else could do, it means that you suck. That’s the way I look at it. It’s like a bad sign on myself. Not everyone is maybe is as negative as saying they suck. But if I catch myself doing a really good job, putting the listing into the MLS, I slapped myself.

David:
I need to make it my priority to teach someone else, to do a really good job to put it in the MLS. And I will pour into them until they can do it as good as me. And I repeat that process for every single thing that I catch myself doing in the day that I specifically, am not the one that has to do it. So certain things like putting a house under contract for a client, incredibly important, I’m not just letting somebody else to do that. But calling the listing agents, ask a bunch of questions about if we even have a chance to get it, or looking at the tax records. If I did that, I would slap myself. Nope, that’s somebody else, give them the opportunity. What I was actually doing was robbing other people of the ability to learn the business, because I who kept thinking.

David:
And so, instead of thinking, well, no one could do it as good as me, it turned around to, I’m not gonna be good at my own job, because I’m stopping other people from growing, I’m stopping myself from getting there. That mindset shift was huge when it came to having the freedom to let go and let somebody else. Now, I’ll give you a piece of tactical advice once you’ve come to that point where you’re willing to do it. It should feel like there’s someone on your team that is trying to pull that task away from you, and you’re hanging onto it. You don’t just let them take it. They got to earn the right to do that thing. So give me an example of something in your business that you feel should be delegated, that’s not?

Tyler:
Project management as a general contractor, just overseeing or scheduling sub-contractors, picking up materials, that sort of stuff. All the in-between the sub stuff that falls on a general contractor. I find myself doing these low level things, what am doing there absolutely needing to be performed by somebody else, but-

Zasha:
Huge time suck but doesn’t use-

Brandon:
There you go.

Zasha:
… the energy or efficiency as needed to grow.

David:
Because you’re afraid if I don’t do it, then days and days and days are going to turn into weeks and weeks. And that turns into a lot of money and then my sub gets let down because somebody else screwed up, now he doesn’t want to work for me anymore. It makes you look bad. That’s why it’s-

Tyler:
And my clients.

David:
… and your clients look bad. You don’t want to just hand that job to someone and say, “Hey, you’re going to go be my project manager.” You’re going to force them to pause carefully.

Brandon:
Now we [crosstalk 00:26:13] that up many times.

David:
We’ve screwed that up. It’s like hand something to somebody like, “You’re in charge now.” And it never goes well.

Tyler:
Abdication or delegation.

Zasha:
Delegation. Yeah, you guys-

David:
Yeah. There you go. So they’re going to sit with you and they got to want it. So if they’re like, “Ah, I’m willing to pitch in” Nope, gone. Pitch in means, I don’t want any of the responsibility of something going wrong, and I want all the credit for helping you. They have to say, “I want that job.” Once they’re there, they’re going to sit with you and they’re going to say, “Let me do that for you, let me do that for you, let me do that for you.” And you’re going to hang on to that job until they pull it away from you. And what pulling away from you looks like, is jumping in and making the phone call and impressing you with the way they do it. You’re going to want to see them thinking ahead. All right, if I order the roofing materials, is it going to be raining when we store them at the projects? They need to be thinking about those types of things that could go wrong.

David:
And if they’re not thinking it, you hang onto the job and you’re like, “You’re not pulling hard enough. I need to see this from you, I need to see that from you.” And they should rise to the challenge. And at a certain point, you’re going to notice that they’re doing that just as good as you, and then they pulled it out of your hands. At that point, you decide what’s the next thing I’m going to let them pull or who is going to pull this thing away from me. So it’s not an easy thing to do. This is what’s difficult. In fact, I feel like there should be a podcast center towards people who want to get a promotion, and this is what I’d be telling them.

David:
You need to learn how to pull things away from your boss. Quit waiting for someone to just shove something on you and then, I hope I’ll learn as I go. But in general, if you guys can create a vision for other people, paint a vivid vision that they can see, if I learn to do this for Tyler, I can make this much money, I can create this much opportunity. Tyler can then go and he can get this many more deals, now I can supervise other people, and they see how they can create their own opportunity wherever they want. People will start doing this.

Brandon:
I would also throw in just a couple of thoughts. One, the idea of I could do better than them, that crosses my mind occasionally where I’m like, “Well, I could do a better job than that employee.” I had that a lot early on. So two thoughts on that, number one, usually it’s a lie like for example, even today, I’ll ask my assistant, Drew, who lives here in Maui and helps me with a lot of like personal projects. He’s actually putting a platform on what was a sandbox for my daughter. I said, “Can you build a little platform here?” Now in my head, I’m like, “It’s eight pieces of wood, you nail it down. I could be done in 20 minutes.” That’s what I tell myself. In reality, what would have actually happened?

Brandon:
I would have gotten over there, I’m like, “Oh, I don’t have the, wood. I got to go to Home Depot,” then I got to do this, then I got the wrong type of wood probably. And then they didn’t have it in stock, I had to go to Lowes, and then I came back, and then it didn’t fit quite right at the measure. And so in reality, that would have taken me six hours to do it just like it took him six hours to do it. It might have taken him seven, because I’ve got a few more years of experience. Our ego says we can do things way better and way faster, because we forget all of those annoying little things that happen when we actually do a project. So number one, is recognizing that it’s our own ego that makes us think we’re way better than other people doing the job.

Brandon:
And number two, over the last two years, I’ve really discovered that some people are just way better at doing things than I am. And I just wasn’t good at finding those people. And so I was bringing in people in my world who were there rather than who were amazing. So example, Open Door Capital is my real estate fund. So Walker, is my underwriter. Now I thought I was pretty good at deal analysis. I might get a video on YouTube on analyzing deals that has 3.2 million views. I’m the deal analysis guy. And then I met Walker, and I was like, I am a moron. I don’t know anything about deal analysis compared to Walker. Now it took 700 applicants and Walker rose to the top of 700 people that we worked through our funnel to get him.

Brandon:
So in other words, I have really perfected and got good over the last couple of years at finding those people, because they are not just normal. But if you accept the fact that ego… It’s actually harder to get things done than we really think it is. And then two, you transfer all your energy into finding those people who really are better. That makes the scaling thing, at least for me, that made all the difference, those two things. So I hope that helps there.

David:
Let me add one piece of motivation for you. When you do a job, even if you do it better than someone else, you get a benefit from that. That’s like flipping a house, you flip a house, you made some money. When you buy a rental property, you get benefit for the rest of your life. As investors, we love this idea that I work really, really hard to get something and then I’m done. And it just pays me all the time. That is the difference between having a job and owning a business. Anytime you do something that you are not also training someone else how to do it, you are flipping a house. The minute that you move into, I’m doing this, but I’m showing someone, I’m training someone, I’m bringing somebody along, I’m investing into them. You are turning that into a rental property.

David:
That employee is your investment that will pour into your business passively at a certain point. So what I started doing was taking these principles that I use to buy investment property, and I made people the investment instead of the property. And I bought a lot of bad, like Brandon said, “Oh, that house was right there, I’ll just use that one. It’s there.” And then it was terrible. It took me a while before I recognize what a good deal looks like in the form of an employee. But once I got there, I now don’t let myself do anything unless there’s somebody with me, at least one person watching. And now there’s someone watching and I’m recording it. So that becomes training material for the next human being. And if you can rewire your brain to look at stuff like that, you will dig yourself out of this hole much faster than you think.

Brandon:
One last point, and then we’ll move on. But one more thing is also what I’ve realized, and you have as well, and it fits with the analogy. When you buy a rental house that pays you for life, however, it doesn’t pay you for life if you don’t manage it correctly, if you don’t have a good property manager and the right systems. People are the same way. So when I started hiring people, we had a lot of problems like we had a lot of like, “I don’t know what to do with this,” and they’re not pulling their weights and all that. And it wasn’t until I implemented really strong management principles. Now we work on the EOS system at Open Door Capital, which is from the book Traction. So we run that system. So there’s other ones like 4DX is a good one. There’s a lot of other ones, but we have EOS. And it’s basically like managing tenants and managing properties and property managers, same thing. It’s not just, set it and forget it.

Brandon:
But when you have the right people, and you have the right mindset going into it, knowing like keeping your ego out of it. Then you get the right people and you manage those people correctly, it is unbelievable what can happen. And people said that to me for years on the podcast, everywhere else, And like I knew it in my head, I didn’t feel it in my heart until the last two years. We’ll, now I’m like, I just want to shake everybody and be like, “You don’t understand how amazing it is, when you get amazing people, all doing their job that they were put on this earth to do.” And I work less hours and get so much more done now.

Brandon:
And they’re thriving and they are paying for their lives, and they’re buying real estate. Now my team is buying individual real estate deals for themselves because I’m giving them money to do that and it’s such a beautiful thing. So just trust that It works. It’s not always easy, but it does work. So, hope that helps.

Zasha:
Well, that helps when that question up, because we know that we have the vision, we keep on calling it the out here. The mindset is there, you guys are in our heads all the time and it’s that growth mentality. And this was super helpful and very insightful. I love that analogy of renting versus flipping-

Tyler:
That’s huge.

Zasha:
We’re both in that right now in Denver and it’s like okay, but this is longterm for quality of life, not just for what we want to do as well. So, I appreciate that.

David:
From [crosstalk 00:33:46] that’s a great question.

Brandon:
Thanks guys. Yeah. Awesome question. All right.

David:
Cliff.

Brandon:
[foreign language 00:33:49]

Cliff:
[foreign language 00:33:49]

Brandon:
What’s up Cliff, welcome to the show. What can we do for you?

Cliff:
Good. Good. So can you guys hear me okay? If you guys-

Brandon:
We can. Yeah.

Cliff:
Okay. Good. So I’m on my second house hack here in next by Travis Air Force Base in Fairfield. So I’ve been doing this and using my VA and using FHA, but I want to scale this year and bring on other partners, because capital is getting thin. So just to get over that hurdle of having partners, how did you guys do that in your guys’s first partnership? Did you guys have a gut feeling like, is it gonna work out? Or how did you get to get over that?

Brandon:
That’s a great question. I love that. All right, so to recap the question real quick is, how do you get over the fear of bringing in partners? How do you start the partnership route? Because cliff here wants to scale his business. So, love that question, because it is terrifying to bring in a partner into your business. If you want to scale, obviously a partner is a good way to do it. Raising money or bringing in a partner is a great way to do it. But it has to be the right partner. And there’s a lot of people who are like, “Why? I’ve heard bad stories about partnerships.” A lot of bad things can happen, and it’s true. I’ve had bad partners before. So how do you get through it? A couple of ideas.

Brandon:
First of all, I’m a big believer in, you don’t know how someone is going to be until you’ve actually worked with them. It’s kind of a catch-22. If you don’t know how they’re going to be until work with them, but you don’t want to work with them until you know how they’re going to be. How do you put that together? Well, the way that I do it is very small things like rather than, let’s partner on a bunch of real estate deals, it’s, Hey, do you want to flip a house with me? Do you to buy a rental with me? And so if you did one and it goes bad in terms of you guys hate each other or whatever, that sucks, but it’s only one deal. I heard about a person the other day, actually yesterday, somebody told me about a friend of mine who has a partner who they’ve now separated, but they own like a dozen properties together and they don’t like each other anymore. And so it’s a drama filled experience.

Brandon:
So hopefully you try to settle those things ahead of time. So, first of all, is find a way to make it easy and small. Start very, very small. It could literally even be like, not even a real estate deal. It could be like, Hey, do you want to partner together on finding a real estate deal? And if we find something, maybe we’ll partner in doing it. So each of us put in $1000 and we’ll see what happens if we can find a deal using direct mail. At least you get to see a little bit of how they work. Do they show up on time to appointments, do you feel like there’s some trust built there?

Brandon:
Secondly, the more you manage expectations up front, the better long-term. So the more you can manage those expectations. So what that means is, really spelling out ahead of time, this is what I’m going to do, this is what you’re going to do, this what’s going to happen if things go bad, this was going to happen if things go good. And almost every partnership fails because something wasn’t specified ahead of time enough. So what I like to do is, sit with a lawyer, it’ll cost you 200 bucks. Once you have your partner that you know you’re going to work with together, you sit down with an attorney and say, “We want to put together a partnership agreement, will you just interview us.” In turn the lawyer Will ask a bunch of questions like, what happens if it goes good? How are you going to split profits?

Brandon:
The lawyers know how to do all that stuff. So they’ll help you come up with stuff that you didn’t even realize was an issue. Like what happens if one of you dies? Oh, that’s a good question, what does happen? Because the attorney is going to help you prepare that. So that’s my answer to the partnership thing. It’s hard, but like I said, start small, have everything in writing, manage expectations. What do you think, David?

David:
I think specific to this question, which is how do I partner with someone to buy single family homes because I don’t have enough capital? Maybe don’t look at it just from, I need to find someone that has capital. You could partner with somebody else that can actually get financing for another low down payment like what you’ve already done. Can someone else use their VA Loan, someone that’s in the military with you or another FHA loan. And you get on title to that house, and you just co-sign basically on their loan, but they use those low down payment options. That’s a, that’s something you can use that’s more than just capital.

David:
So maybe, don’t assume that you have to just do it the same way that you’ve already done it, where you buy a house and now you’re thinking, well, who’s got money? I don’t have a track record. It’s hard to borrow. There’s people that have more to offer than just capital. They’ve got a loan, and there’s also people that are currently not happy with their housing situation. Can you go to somebody in the military with you and say, “Are you tired of living on base? Well, buy this house, I’ll connect you with the lender, I’ll show you what we did, you and I will live together, we’ll rent out the rooms to other people.” You show them how that’s going to save them money, Boom, you got yourself a partner.

Cliff:
Well, thank you. Appreciate you guys.

David:
Thank you, cliff.

Brandon:
All right. Let’s bring in another question asker, other guests for the podcast. Brody, welcome to the show. What can we do for you?

Brody:
I live in Utah, I’m 28 years old. The last couple of years I’ve been, I guess, financially free from real estate. I have been able to do pretty well at creating passive income. It’s been amazing. This internal battle that I’ve had lately is, what’s the balance between thinking big and constantly going bigger, better, bigger, better, which I know is a good thing, I need to do that. But then the flip side is, complacency is bad. Comparison is the thief of joy type thing. How do you not compare yourself to somebody else and at the same time, be satisfied with where you’re at? So it’s in this constant like, Oh, I’m proud of where I came, but do you keep on grinding, and where’s the line? Is what I want to ask you guys.

Brandon:
All right. So I love that question because it’s something that I actually ask people all the time. I’ve asked the guests on the podcast is before, and something that I’ve struggled with over the years. How do you balance that contentness and ambition? The two of them. Because I get a ton of value out of growth. It’s fun, we love building new things. I said a joke to a friend the other day, a tough joke, because he asked me the same question.

Brandon:
I said, “well, for thousands of years, men would just kill each other and just murder one another in battles and war,” and today we just do business and we just do real estate. It’s the same hitch. To conquer and to win, to climb that mountain, to run a soar through somebody, I don’t know. It’s just like I just get a lot of their internal validation from conquering something. And so at the same time, I’ve got a wife, kids, I want to surf more, I want to just enjoy my time, I want to look back on my life when I’m 90 and be like, “All I did was work.” So here’s this where I’ve landed on it and it’s a continually evolving thing for me, is that when my wife thinks I’m working too hard, I’m working too hard.

Brandon:
In other words, I don’t base my ambition/my contentness on my feelings. I base it on the people around me. If they feel like I’m working too hard, because I don’t have a good barometer for myself. That said, do yo remember something in the podcast the other day, or maybe I heard it somewhere else. They’re talked about having an internal… No, it was John Eldredge book, I’m reading, called take your life back. And he says in there, everyone should have an internal… There’s these barometers. And so for example, one of his barometers is if he can’t get his evening walking. He tries to do a 20 minute walk every night. If he hasn’t got his evening walk-in for a few days in a row, that’s a barometer, that’s like a temperature gauge saying, Oh, warning sign, you’re you’re working too hard, you’re working too much, you’re being too ambitious.

Brandon:
And so, there’s these internal barometers. Mine is, if my wife says I’m working too hard, I’m working too hard. But I plan to work until the end of my life. I think Brody, you probably plan to work to end of your life, David and most people live, are going to work to the end of the life because we get value out of that growth. So again, I just looked at other people as kind of my barometer. What do you think?

David:
If I give you a practical example of how I navigate this issue, just what I’m doing right now in Hawaii. And you tell me if I miss anything or if I should add. So I’m currently staying in Maui with Brandon at a condo, and I’m buying a couple of condos in that same complex. So I will assume have that same floor plan to stay in when I come visit, 800 square feet, one bedroom, two bathrooms. It’s right across the street from the beach. I walk out of my door and I’m looking at the ocean and I cross the street and I’m there. There are also condos that are not across the street, they’re on the same side of the beach, that I could have bought one of those for $400,000 more, and I wouldn’t have to cross the street.

David:
The way I look at this is, it’d be very easy to start being upset with the condo I have, because I have to cross the street to get there. And I think that’s what you’re getting at, is at what point do you say enough is enough, I don’t need more? Because it would be silly for me to be pissed every time I cross the street and literally take six steps or seven steps to get to the ocean. So what I do to manage this, because like Brandon said, I’m going to be having to move forward and conquer and grow. I also don’t want to be unhappy, is I focus on the things I love about what I have and I try to squeeze every amount of joy that I can out of it. I have an ocean view, it’s awesome. I make sure I look at the ocean and I thank God every day that I can see the… How many people in the world get to be in Maui, running their business remotely, staring at the ocean with their best friend next to them.

David:
It’s incredible the life that I have. But if I build this to the point where I can have a house on the other side of the street, and it’s not going to stress me out as far as finances go, I will buy that one, and I will be glad that I can see the ocean closer and not have to cross the street. And I will squeeze every single ounce of joy that I can out of that. And at a certain point, like Brandon and I, we do Jujutsu when we get done recording, it’s really hot, we do it outside. It’s miserable. And I’ve thought, wouldn’t it be cool to buy a house that was big enough that had a mat room that was air conditioned, that everybody could go to that house and we could do it in a more comfortable setting.

David:
I will be super grateful that I get to pay for a personal trainer to teach us Jujutsu where I’m not getting strangled for an hour by people that are having fun killing me. I’m very lucky I get to do that. But if I get an opportunity to buy a house where I can have an air conditioned room with a mat, that everyone can come and we can all be blessed, I will go get it, and then I’ll be very grateful to have that. That’s the way that my mind tries to process this so that I don’t stop pushing myself and I also don’t rob myself of joy.

Brody:
I think real estate is a perfect example, because it’s like, we’re constantly tempted with, Oh, do we keep the cash flow now and buy a nicer car and up [inaudible 00:44:11] whatever, or we roll that into the next deal? And then it’s like at some point, where’s the end? Where does, I don’t know, where you keep on going until when? And so, I think that for sure helps just being grateful for what you have and then constantly looking for opportunities to improve.

Brandon:
So, I look at real estate very much like alcohol. Alcohol can provide a lot of fun, at a big party everyone is loosening it up, whatever. There’s some good things I’m sure with alcohol.

David:
[crosstalk 00:44:38] money like alcohol.

Brandon:
What’d I say?

David:
Real estate.

Brandon:
Yeah. Okay, both. Money and real estate, like alcohol, you’re right. But it’s both. It’s dangerous I say, money, but through real estate [crosstalk 00:44:48]

David:
[crosstalk 00:44:48] here.

Brandon:
Meaning, in excess, there’s a lot of danger we have there. In fact, I’ve even morally question like, is my whole life is about making people rich? No, I don’t want that my life to be about making people rich. Because making people rich doesn’t make you happy, in fact, studies show that the richer you are generally, the less happy you are. It’s more about what are you doing with that money that you have. And so I look at like, if all you ever do is just make more money, just so you can have more money, you’d be able to spend more money, that is a dangerous, I think, spot to be in, in life. Because it makes you less happy and more likely to fall victim to the things like depression and that constant envy of what your friends are doing.

Brandon:
So I and a few friends including David here, we talk about that fairly often, what are we doing with our money, what’s our attitude to money right now and wealth, are we being generous, are we giving it away, are we just trying to be, as Tim Ferris says, was he called The Fat Bald Man In the Red Convertible? Something like that has this whole analogy in the book about like, I don’t want to be just the old fat bald guy in a convertible who just like, that was the peak of life, is just to have the red convertible. I want to be something different.And I think the ultimate answer to me anyways, it’s work life balance. There’s no such thing, I think it’s work life balancing. It’s a continual balancing act, looking at your heart, looking at where you’re at and your ambition.

Brody:
I think at one point it comes down towards, it’s no longer about the money and it’s about potential and that’s something like I’ve been starting to grasp a little bit. Because really like does my life changed that much if I make an extra couple $100,000 this year? No, probably not at all. But it’s more about, okay, do I have the potential to do that? Am I maximizing my potential? At the end of the day, that’s what’s ongoing, that’s what feels good, is reaching your potential and stuff. Anyway, I may have something to do with it as well.

Brandon:
Yeah. I agree. I try very hard not to compare myself to other people, compare myself to my potential. And we’re not perfect at it. I still I’m scrolling Instagram and I see the guy with the fancy jet and I’m like, “Oh man, it’d be cool to have a jet.” But I try not to let that affect my mood and instead just say, “What is my potential to get a jet?” That should be, if I believe I really want a jet and that my potential is to get the jet, that would be better for me and my family and society for me to have my own plane, then fine. I can go and do that.

Brandon:
But the answer right now is, no. It wouldn’t benefit me at all or the society or the world to have a plane. I’m not knocking people who have a plane, good for them. It probably helps them in their environment, in their family, in their business. But for me, it doesn’t. I knew my potential was to live in Hawaii, I know that there was a huge piece of it and I would be happier there, my family to have a good time so I moved here because I thought that would be a big part of it. So, anyway, hope that helps Brody. Thank you for the question. It’s good topic.

Brody:
Appreciate it.

Brandon:
Josh Lupo, welcome to the podcast, man. How are you doing?

Lupo:
Hey, I’m doing very, very well. This is such a cool idea. I’m so glad you guys are doing this man. That’s awesome.

Brandon:
Well, thanks man. We’re figuring out as we go here, but what’s your question? What’s your thought today?

Lupo:
Yeah. Absolutely. So actually it’s a continuation a little bit of what Brody said. So you guys, a few episodes ago, I think it was like three or four of you had [enseyanga 00:48:02]. One of things you guys talked about was finding that balance between getting inspiration when you’re surrounding yourself with successful people and getting inspiration from that. But then, also not having that necessarily, like detract from where you are. I think you guys use the term, run your own race.

Lupo:
So for us, we started the end of 2018. We listened to the podcast, we got our first house hack, we had a bunch of student loan debt. And we were like, “All right, let’s pay that off.” So we got a house hack, paid off a lot of student loans, got a second house hack back in September. And we’re feeling pretty good at that time, but then we also have a lot of friends who are really starting to ramp up their investing. And it’s finding that balance where like, we’re really inspired by what they were doing, but also trying to not have it detract. We feel like we’ve accomplished a lot, but sometimes it almost feels like those accomplishes are negligible compared to what our friends. Finding that balance, I guess.

Brandon:
Yeah. How do you not compare yourself to the other person is because no matter what, I’ve battled this all the time, there’s always somebody who’s doing more than you are, who’s doing better at the job than you are. That’s crushing it. Part of my story over the last few years was, I went to the Joe Fairless’ Best Ever Conference, three years ago or two years ago. And I was surrounded by people who are doing way more than me, and I was like, I don’t say I was jealous, but it fueled me to launch my own bigger game, like to play at a bigger level. Because what it did is that, it showed me I wasn’t living in my potential, that I had a huge amount of potential that I wasn’t living up to. So it wasn’t like jealousy that led me there, but definitely it fueled me.

Brandon:
And so, trying to not get jealous and feeling bad about yourself versus letting it fuel you, it’s tough. But all I can say is that literally, in my mind just shifting the terminology because when I see somebody doing something great, I think Grant Cardone says this in the 10X rule. He’s never jealous of people because if he sees somebody doing something cool, it just means it’s possible. Like, Oh, they got a TV show, I’m not jealousy they got a TV. Like the other day, I saw Grant Cardone hanging out with Robert De Niro on his Instagram, like Grant got some role in a movie. I’m like, my instant reaction is, “Oh, I’m jealous of Grant Cardone because he got a role in a movie with Robert De Niro.” And I’m like, no. That’s possible, let that fuel me. Let me be happy for Grant that he got that, and let that fuel me to the next level and be like, if it’s possible for him, it’s definitely possible for me. What do you think, David?

David:
I think it’s a great answer.

Brandon:
Well, thank you.

David:
Josh, if you have a follow up comment on that?

Lupo:
No. No, I think I get it. I think you guys nailed it pretty much for the Brody, and it sounds like there’s a lot of people who share that same sentiment of being where we are and understanding that just because… Like you guys just had a guy on who’s 25 with a million in real estate and I just turned 30 and I’m like, “Oh, damn.” That being content, and David, you said something that I really liked with Brody too, was like having an attitude to gratitude and just being like, especially in the world we’re living in right now, like we’re breathing and we’re doing things that so few can do, depending on what their circumstances are. I think you guys nailed it and I really appreciate again you guys doing this. This is super awesome.

Brandon:
Well, thanks man. [crosstalk 00:51:23] you jumping in. Hey, Grayson, welcome to the show. What can we do for you?

Grayson:
Yeah. Hey, thanks guys. I’ve been a long time listener, read all the books and have a really good problem. I’m so thankful. We just set our first BRRRR investment, but what do we do next? I’m really overwhelmed with the opportunities before me. I’m a super connector so I talk to people all the time and I’m always presenting things and whenever I see a neat opportunity, I’m like, Oh, we can take it that way. Just today I looked at a 300 unit multifamily building that I have no business even trying to purchase, but then yesterday, I went through with my realtor to a duplex so we could turn into a triplex. That’d be fun. But he’d have to, as my partner, put up money.

Grayson:
Basically, there’s all these great opportunities and I’m really overwhelmed with them and distracted by them like my business, I’m a remodeler. I do basements, it’s really simple. I found that niche, it works really well for me. But I’m finding that I’m just getting really distracted by all these, again, wonderful opportunities. But it seems like every person I talk to, has something that I could work with them on. And I get to a point where it’s kind of analysis paralysis, I guess, except I haven’t had to not make a decision yet so, we’ll see.

Brandon:
This is my life, like the same thing. There’s so many opportunities that are presenting themselves to me, to David, to you, to most people and not necessarily… Obviously, David and I have a leg up because we’re on the podcast and people bring stuff to us. But just anybody with a growth mindset is looking around the world right now going, “There is so much opportunity everywhere right now.” Just in real estate alone, there’s a million things you could do, and you can start a million different businesses and the world is shifting and changing. So how do you pick that next thing when there’s so many good opportunities?

Grayson:
And ones that make sense too. They’re not random, they’re not out of the blue, they’re really reasonable. The apartment complex, forget that, but there’s so many other reasonable opportunities but I’m just getting distracted essentially.

Brandon:
Yeah. So I know exactly how you’re feeling because I felt the same way. So here’s how I look at it, number one, I recognize the fact that it’s more important that you decide, then what you decide. There is no script for your life that you’re trying to figure out, there’s not a hidden pot of gold in the beach that you’re out there, digging in the sand trying to find. You’re an artist at a canvas, you can paint whatever you want. It just doesn’t matter. What matters is that you’re happy doing it and that it’s going to work, I suppose. I believe you’ll be fine no matter what you do, if you work at it hard enough. Not every business in the world works but you’ll be fine no matter what. So what do you want to do is the bigger question. What I asked myself, and this was a couple of years ago, I said, “What sounds amazing? What sounds amazing? And it doesn’t matter what you answer that with.

Brandon:
So for me, I said, you know what sounds amazing was, and I’ve told the story many times, but I saw my buddy Seth Mosley, he owns a music production company in Nashville. I saw the way his company worked, he had five people, they were the top of their game, they were hanging out with each other, having fun, joking, doing meaningful work, again like Grammy winning people. And then after work, they got off when they wanted to get off, they go hang out together at the local restaurant, they had dinner with their families. And I was like, that is what I want. I recognized something that sounded amazing and I would and literally build my business because of what I saw his… And that was completely different company, I have a real estate fund, he had a Grammy winning music company. But the point was, what I wanted was a group of people I could do business and life with and have a fun time doing meaningful work.

Brandon:
So once I defined that, I then just worked backwards and I said, “What’s my vision? Where do I want to get to?” So I set a three-year vision. In order to bring that result of the five people that work with me that are at the top of their game, that were doing meaningful work and making money, doing it and having fun, I would need to have this many properties, this much whatever, this much whatever. Now, there’s 100 ways that could have gotten there, I just picked one that sounded interesting, Mobile home parks. So then now I had a three-year vision, I worked it to an annual goal, worked it to a quarterly goal, worked it to a weekly goal, worked it to a daily goal, worked it to a what’s the most important next step to get there? And I aligned everything in this vertical that all lines up with the thing above it and I was able to accomplish my goal within a year instead of three years, because it was all aligned there.

Brandon:
Now, could I have done 100 other opportunities? Of course. And I had to say, no, to a lot other stuff that could have been great. But I just keep reminding myself, it just doesn’t matter what I do. So I picked one thing and it worked and it’s great. It was exactly like I thought it would be and it was awesome. And now I’m working on my next three-year vision right now, five-year vision. So that said, when there’s a lot of opportunities, this is where the bridge-building is coming in. When we say bridge-building, we’re saying, look, you’re on one Island and there’s another Island, we’ll call it success Island. You can build a bridge to get from where you are today, reality Island to success Island, or you could build five bridges or you can build 10 bridges, but you’re only one person. You can only build one bridge at a time.

Brandon:
So what happens is that we build too many bridges over to that Island. So the bigger problem with guys like you and I, and David is not that we can’t build the bridge. It’s that we’ve built too many and they don’t get there. So if you’re going to build a bridge, another one, if you’re tired of the basement thing, if that’s this working, that bridge is already going, you’re not that involved with it. It’s already running itself, great. And you want to build another bridge? What bridge can you build that is simply adding another lane rather than a whole entire new bridge. David, what do you think?

David:
I think that the first thing to recognize with this problem that you’re having is there’s probably a little bit of fear of missing out, that you might be operating under this thought of, if I don’t buy this apartment, someone else is going to get it, I’m not going to get another deal. And that’s normal, especially when you’re first getting into real estate investing and then after a time you realize there’s always another deal. There’s always another way to make a deal work. And so just having the faith to believe that another one’s coming will sort of take the pressure off of you that you’re feeling, where it’s like a dog that doesn’t want you to take away his food, you’re looking at all this stuff like, I have to go get all of it. So, take a deep breath, like Brandon said, breathe, and just recognize that deals will never go away.

Brandon:
Can I interrupt you real quick on something? There’s an episode of the Tim Ferriss podcast where they interviewed Derek Sivers, and we are timid over Derek. And he told us the story, basically about doing too many things, same concept. But they said this, that just changed my life. He said, “Look, if you’re 30 years old right now, and I don’t know how old you are, but you’re probably somewhere in that vein, right?

Grayson:
35, Yeah.

Brandon:
Okay, perfect. So if you’re 30, you have your whole 30s, you could do an entire like thing for 10 years of time, and then you have your 40s, you could do another entirely different thing. And then your 50s and then your 60s, and then your 70s. And most people that are today in their 30s and 40s, they’re going to live to 100, at least about 120, because of technological improvements to medical. So you could do an entirely new thing every decade and still got seven more chances in your life to do a decade long thing. I haven’t even been doing the BiggerPockets podcast for a decade.

Grayson:
If I could reframe the question then, like you guys have processed this in my mind, I think it’s a good next step question is, to quote Jim Collins, when it comes to these different ideas. And like I said, we just did a BRRRR it went and it went gray. It was actually out of state. Thank you, David, for your book, that was extremely helpful in out of state real estate investing. But when it comes to these different opportunities, I guess the real question is, to quote Jim Collins, bullets versus cannonballs, you only have so many resources. How do I fire bullets at these different opportunities to see which one is maybe the one I really need to dive into before firing the cannonball.

David:
So what did that BRRR deal do for your financial future?

Grayson:
Before we do the cash out refinance, we’re doing about $800 a month cash flow. The cash out we’ll be able to pull out about 70 grand, middle still cash flow with a couple $100 a month with management and other fees. Then I’ll still have about 40 or 50,000 in equity.

David:
So you’re making a couple 100s bucks a month and you’ve got 40 or 50,000 equity. And you can go to another one, right?

Grayson:
Yes, exactly.

David:
If you do that twice a year for the next five years, and you end up with 11 of these BRRRR, or let’s say 10, would that be enough money to change your life?

Grayson:
Yeah. I guess the other side of it is like, it’s exciting. I think we live the life that we want right now, this remodeling company, I don’t have any intention of getting rid of that. And so really it’s about the security of the long-term future and having the retirement fund as well as that. And then the excitement of the pursuit as well.

David:
So these houses represent a financial piece for you in retirement first off, they’re not necessarily going to change your lifestyle is what you’re telling me? You make enough money from your job and you’re not going to quit your job, which is great. So make up your mind, how many of them actually make sense before it’s diminishing returns. You don’t want to have 200 single family houses full cycle, that becomes a whole job to manage them. Then look at how you can take your remodeling business. You’ve mentioned that several times, it shows me this is something that’s important to you and ask yourself, would I like to scale that? Do I want to bring in more people to make it passive? Do I want to do a form of both, scale it and make it more passive? Do I want to make enough money with that, that I could go buy the 300 unit apartment building?

David:
You’ve got these pieces and I can tell a very important to you that you want to keep in your life. Now you need to ask yourself how you can make that a form of passive income so you can go do all this other fun stuff because, Grayson, you’re one of those guys that just wants to do everything and you’re going to. You have to learn the skill of delegation and management in order to be able to do everything. That would be the one thing that would benefit you immensely if you could get that down.

Grayson:
Yeah. It’s true of all of us, right?

David:
Well, all of us that want to do a million things. Some people are happy just doing one thing and that’s not as important of a skill for them.

Grayson:
Yeah, it sounds nice.

Brandon:
Real quick Grayson, one more question I want to ask you related to this stuff, your basement business, this is going to sound counterintuitive to what we teach on BiggerPockets, we’ll get into real estate, but would it be easier for you to take your basement business and 10X, that over the next five years and then sell that business, then for you to get into real estate? Because I feel like you already have a really solid bridge there.

Grayson:
Yeah. I’m in Northern Colorado, they’re building six to 7,000 homes a year. That’s a lot of basements. All I do is new houses and so the scaling is there. I’ve built it to scale and I’ve built it to sell. I wasn’t intending to get into real estate investing, this opportunity fell in our lap. I was literally pumping the brakes on purpose because I didn’t feel like it was the right time. But now that I’ve delve in, I’ve tasted the blood, if you will, it’s not that the right way of putting it, I suppose, but now it’s like, man, that was a lot of fun. I got to do with my family, my kids got to see the whole process and it’s like, Okay, basements it’s providing. And it’s a very important to continue growing it. However, just as a lifestyle, even the investing is something I feel like a lot more excited about involving my family in.

Brandon:
Yeah. That makes sense. And the reason I ask is because a lot of people, it’s like they already have this really scalable, it sounds like you do, a scalable amazing business and they’re more bored with it than anything. And so I challenged people often is to think like, how can you just double, triple, quadruple that instead. Forget BRRRR, forget a couple $100 a month. It’s useless compared to what you’re going to get in your other business. I don’t know your business, but let’s just say, it’s percentage-wise, useless compared to that.

Brandon:
Get your business cranking out a million or $2 million a year in extra profit, dump that into real estate, but stop playing with the $100 a month, $200 a month BRRRR things and go take your family be like, “Hey guys, as a family, we’re going to buy a 300 unit apartment complex this year, cash. That sounds fun, doesn’t it? That’s sounds like it’s the same thing. You should add some zeros to it and you have the ability to be able to skip what most people have to go a decade through because you already have a leg up. So I guess encouragement is just to think about that, is could you instead put all your effort into double downing on your business and then generate the profit to go into bigger real estate deals, not the small stuff. So just something to think about, I’m not sure which way is right for you, but just to challenge some thinking there.

Grayson:
No, that’s good. Thank you. Appreciate it.

Brandon:
Cool, man. Well thank you for coming on today. And with that said, let’s bring in one more question asker today. What’s up Roberto, how you doing?

Berto:
Doing good. So I live in Michigan. I’m going to be a new agent, cross my fingers on March 18th, I take the exam. I also want to invest and I have a full-time job. Am I taking out too much? Or so I just focus on doing the real estate thing.

Brandon:
Great question. So the question is basically, Roberto wants to, am I saying that good, Roberto?

Berto:
Everybody calls me Berto.

Brandon:
Berto, all right. Berto, must easier. All right. So, Berto is wondering he’s getting his real estate license, also has a W-2 job and wants to invest in real estate. Is that too much? A very timely question for a lot of people, because people right now, they’re working a full-time job and they’re like, “I gotta make more money. Well, being in a real estate agent is a good way to do that.” But they really want it as long-term in rental properties or whatever because that makes like passive income. Is it too much? Is it too many bridges to use, an analogy we talked about earlier, to try to get there. David, why don’t you start this one? [crosstalk 01:04:43]

David:
Okay. So, man, how do I want to get into this? Let’s talk about the trajectory of success. Most people assume success if you have a graph, success would be going up and time would be going sideways. That it’s going to be just, the more time you spend, the more success you have, that it will be even. That’s what it’s like in the W-2 world. The more hours you work, the money you make is proportional. When it comes to getting good at something, it typically looks like this. It just goes really, really slow, you don’t really get any better. And then at a certain point you figure it out, and it just scales really fast. Anything you do, you’re going to have a really long period of time that you just aren’t very successful at it until you get it figured out. The problem with building a million bridges is you’re going through that phase where you don’t get anywhere all at the same time, and you never actually get any of them to scale.

Brandon:
Kind of takes three times longer in that phase because you’re working a third at each one.

David:
It’s like downloading 10 movies at the same time on your laptop. You’re better off to download one and watch it while the next one’s analogy.

Brandon:
Creative analogy. That’s a good analogy.

David:
So part of this question-

Brandon:
When you go pirating movie’s at internet analogy, I like it.

David:
Yes, exactly. Please don’t tell the FBI. The part of answer to this question is, you got to be able to figure out how much time do you have in a day and how quickly can you get to the point deal. We call it the inflection point where you start to become successful. So you’ve got a full-time job right now, you want to invest and you want to be an agent. I would say, keep working your full-time job and while you’re there, talk about real estate nonstop with everybody that will listen to you, make them excited about real estate, make them think of you when it comes to real estate. You will start to generate leads at your age of business while you’re at work.

David:
So it’s not, am I doing this or that? You’re literally doing both of them, And that period of time where you’re just waiting to get leads and you’re talking and you’re not actually getting anything, you’re still getting paid because you’re going to work. And at a certain point, you’ll start to see success, leads will start to come in, people will start to hit you up about buying a house, you’ll work with them. Then you get to go through a whole another period of learning how to be an agent. What do I do with these people, how do I convert them? At the point where you are now closing more deals than you have time to do, you can leave your job and be a full-time agent.

David:
You should now be making enough money that you can move on to going and being a real estate investor while being an agent. And there’s a lot of synergy between those. That is how I would structure that. I wouldn’t try to do all three with equal effort at the same time. Make sure every time you meet someone and you have a good rapport, you get their contact info, you put it in a CRM and you make a purposeful effort to stay in touch with those people.

Brandon:
I would also push anybody who’s doing multiple things at once, because sometimes it’s unavoidable. You have a job that you would like to get out of, you need to make income. So maybe you have to be a real estate agent at the same time. I would really encourage you to be thinking, because you don’t have a million hours a week, you really got to get that agent business into like 20 hours a week, because you just don’t have more time than that. So if every hour, the most impactful thing you can possibly be doing for that business, are you really doing the actions toward that thing that’s going to get you like David, as an agent, I’m not an agent, but as an agent, what are the things that like, what’s a $10,000 an hour tasks that they should be definitely, definitely, definitely doing [crosstalk 01:07:54]

David:
Asking someone, do you know anyone that wants to buy or sell a house?

Brandon:
Right, so if you are not asking 50 people a week that question, that’s the thing that you should be doing. If you’re making business cards or if you’re like-

David:
Making a flyer.

Brandon:
… making a flyer. If you’re at another sales meeting at the office, I don’t know, whatever. There’s a lot of things that make people feel like they’re doing busy work or doing work when really it’s busy work. The same applies for real estate, there’s nothing wrong with trying to build your portfolio at the same time as being an agent and doing your job. But like the thing you’re doing your real estate investing, you should be doing the most impactful thing for that. Are you analyzing a deal? Are you talking with a real estate agent? Are you making an offer? Are you sending out a direct mail letter? Things like that are the very tangible things. And I would say, you can invest in real estate with probably three hours a week, two hours a week, one hour a week. It doesn’t take that much if you’re just doing those really important tasks.

Brandon:
For example, if you just analyze one deal every day that your agents sent you from the MLS you use, ran the numbers on it, five minutes every day for five days a week, that’s 25 minutes a week, and that could land you a deal. I think you could totally do all three if you wanted to, but you’re not going to do all three Well so make sure you’re focusing on the ones who can do best.

Berto:
That’s awesome. I appreciate.

Brandon:
Awesome man.

David:
Good question though. Thanks for that, Roberto.

Berto:
Thank you.

Brandon:
Thank you. All right, let’s get to the last question of the day before David and I get out of here because this shed is hot. I can hear you Ben, welcome to the show, man.

Ben:
Awesome, David, Brandon. How’s it going men? Hey, love you guys. I’m a huge fan.

Brandon:
Thanks.

Ben:
Stoke to be here. I really mean it. I think I’ve got the OG version here. Brandon, shout out to you guys [crosstalk 01:09:33].

David:
I Love it. Holy cow, Ben sounds like he should be hosting this podcast right now, doesn’t he?

Brandon:
He’s got that quality. It’s great.

Ben:
I don’t know that I’ll ever be able to live up to the analogies that the two of you want to throw down.

David:
No one can. No one can.

Ben:
I know, it’s quite ridiculous and awesome. Anyway, look Brandon, I know this topic has been brought up multiple times on the show, which I’ve listened to almost every episode, still working on getting there, just catching up on past episodes. But the question is about mindset of your spouse. And I know it’s been talked about, so I was hoping to do a little bit of a unique angle on this. And that is your own personal experience, which you’ve talked about briefly on a number of shows. But I’m curious, at some point in the past, you and your wife agreed to swap books and I believe she gave you this.

Brandon:
Yes. There it is, Twilight. Yes. I read all of Twilight just to get my wife to read Rich Dad Poor Dad.

Ben:
To be clear, this is my wife’s copy.

Brandon:
Oh, sure it is. Sure it is man. Yep. Yep. Don’t worry your secret’s safe with us in the quarter when people listening right now.

Ben:
Then you got to read, Rich Dad Poor Dad, I’m curious, did that actually change her mindset? I know it’s baby steps and it’s been a long time. That’s been many, many years now. And I’m curious, like has it continued to change over time? And do you feel that your mindset is still on a different plane? Because I think a lot of us we want to know that we’re not alone in this struggle. I’m the constantly learning, constantly listening, constantly reading, constantly educating. And so anyway, I’d love to get your experience on that and how it’s been over time now that you’ve had many years to reflect on how that changes occurred.

Brandon:
Sure. Yeah. I think you nailed it right when you just said, you want to know that you’re not in it alone. And I think that’s the bigger issue for most married couples, when they’re like, “I can’t get my spouse on the same page.” What they’re really saying is I can’t get my spouse to be a partner/cheerleader for me. But what I find is, first of all, I find that I don’t need Heather to be my partner or cheerleader on this. I’m not going to do anything against her will, but I don’t need her to come take half the business, do that work. If she wants to help, great and she does want to help. And after reading Rich Dad Poor Dad, it really did start to change her mindset.

Brandon:
Now it wasn’t an overnight thing, but she was like, “Oh, I get it. I get what you’re doing., I get this idea that there’s more to work than a nine to five for the next 50 years, that it’s okay to take some risks, that passive income is a real thing, that there’s little oil Wells pumping out money.” All of that she got by reading Rich Dad Poor Dad, and then the conversations we had. What was probably more important was just getting the terminology in her head so we could have the conversations easier. So it wasn’t just me explaining some crazy idea I had about getting rich through real estate. It was like, no, this is like a real thing people do.

Brandon:
Now in the meantime, what does that do? Over time, So Heather like people know, she started managing our rental properties. She took a lot, she read a ton of books on managing, she built all of our systems, our forms and everything together. That’s why we wrote the book on managing rental properties together. But since having kids, she has really phased out of a lot of it. She still talks to her mom almost every single day. Our care mom manages a lot of our local stuff in Washington. So she still handles a lot of the day-to-day stuff in terms of a quick text to her mom or to our property managers or whatever. But she has not scaled with me in terms of Open Door Capital or all the things we’ve done there. And so I guess what I’m getting at that is, she was a part of it for a long time and then she went away.

Brandon:
And then honestly right now, in our life, we’re looking at buying some condos, David inspired us to buy some condos here and Maui. And so we’re looking at this condo as a vacation rental and it got her reinspired. It’s like, “Oh, we could do this and we can design it this way, we could paint this wall this way.” She’s totally back into it again. And so what I’m doing as I’m leaning into that. I don’t say I’m giving her that, but in a way, I’m giving her that. I’m like, “Oh, this is fire.” Like we always say follow the fire, but follow your spouse’s fire too.

Brandon:
She had fire for property management. So I led into that and let that be her thing. And today I’m letting the vacation rental be her thing and she’s going to manage the entire rehab of that vacation rental herself. I’m not even gonna touch it. I even told her, I’m going to see if I can just never show up one time to the entire rehab, not once. And she’s rising to the occasion that was all excited about it. And so anyway, I’m not sure if that answered that question at all, but that’s just our, our past.

Ben:
It does and it’s really great. But you mentioned early on, like she started taking initiative and wanted to get more involved and I’m a little bit indifferent or whether or not my wife actually gets involved in the investing. Personally I want her to really understand where my mind’s at, so that she thinks about money. Because I think the biggest takeaway I’ve had from Rich Dad Poor Dad, is money mindset, literally the way that I think about money. And I’m just curious how you cultivated that growth in her and again, just allowing her to be herself and choose what she wanted to be involved with.

Ben:
And then real quick and then David next for you, you have a unique perspective. As a close friend of Brandon for years now, being able to look in from the outside. And I’m just curious, what you’ve learned and what advice you can give just from your own perspective on seeing that relationship change and grow over time, specifically Brandon’s experience.

David:
You are a professional Ben, because I’m not married. I’m unfortunately single. So now you found a way to incorporate me into this question. Very good. So my relationship with Brandon, I would say, I think, and this is not me just saying this because I’m on the podcast, Brandon and Heather have the best relationship of anybody. If my friends are listening to this, I saw Daniel Del Real, you’re on here. You have a great one, too. Brandon and Heather are next level. I do not know a more attentive, humble, servant minded person than Brandon. And Heather is incredibly supportive. So they’re freak, I don’t think any other people could do what Brandon and Heather do to be honest with you. Sometimes when you give advice, it’s like Arnold Schwarzenegger, his prime giving weightlifting advice, you feel like okay, cool. What am I ever going to do with that?

Brandon:
We had an argument last night, we argue sometimes.

David:
Yeah. That was like, they had a harsh tone or something like that. I would say that what Brandon does really, really well is he’s very, very aware of how his actions affect other people. And he does not push anyone further than what they want to be pushed at. So rather than try to force his Heather to go along with what he’s doing, he will say, here’s what I want to do, let’s talk about what role you’re going to play in it. So Heather’s making the decision if she wants to be there or not. He does that every time. So Heather never feels like she gets left out and he always checks with her, so she never feels like she’s getting dragged along. That’s probably the best advice I could share for the masses if you actually want to have a good relationship, like what Brandon has, while doing crazy new stuff and going through growth all the time.

Brandon:
Well, Ben, thank you for coming on and asking the final question of the day. Awesome. Everyone else, thank you for joining us today. For those people who are watching this thing live, thank you for jumping on. For those are the questions we didn’t get to, I apologize. We’ll do a lot more of these Q&A’s in the future. It was fun having me in David, sitting here answering questions. And if you thought this was good, let us know, go and comment wherever you’re watching this. If you want to listen to one of our podcast, go over to our Instagram, whether it’s the BiggerPockets Instagram or davidgreen24, or beardybrandon. Let us know you like this. We’ll be posting clips on our Instagrams and on our Facebooks about this show. A lot of these Q&A we’ll be posting and let us know.

Brandon:
You could also go to biggerpockets.com/show453, again, biggerpockets.com/show453 leave a comment there. We’ll be checking those. And then of course, if you’re watching this on YouTube, you can leave a comment in the use of section as well. And let us know if you like this format, we’ll be doing more of them I think if you did. So with that said, I’ll let my co-host here, my fellow hosts, David.

David:
Wow. Wow. I got a promotion. Apparently that but kissing, lied about the relationship works.

Brandon:
There you go, my fellow host. We’re both co-hosts, that’s the thing. I’m a co-host, you’re co-host.

David:
You just never called me that.

Brandon:
I’m calling you a host.

David:
For the first time ever [crosstalk 01:17:36]

Brandon:
My co-host. We’re both co-host.

David:
See, this is why he’s good with relationships because he pays attention.

Brandon:
I’ll let my fellow host get us out of here.

David:
All right. This is David Greene for Brandon, the relationship god, Turner, signing off.

Outro:
You’re listening to BiggerPockets radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place. So they too, that’d be sure to join the millions of others who have benefited from biggerpockets.com your home for real estate investing online.