Full-Time Fireman Does 300 Deals While Working 40 Hours/Week

Brandon:
This is the BiggerPockets Podcast show 482.

Mike:
I never started this to actually quit my job. I struggle with that sometimes because my friends were either like full-time real estate investors or full-time fireman and not too many or in between. So at the end of the day, I still like my job. As long as I liked my job and enjoy going to work and I’m able to do both things, what I’m doing. At this point, I plan on seeing it to retirement.

Speaker 3:
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:
What’s going on everyone? It’s Brandon Turner hosted the BiggerPockets Podcast here in the sea shed with Mr. David Green. What’s up David Green. How are you doing?

David:
Hey man, we got a great show today. Mike’s story reminded me a lot of me when I was first on the BiggerPockets Podcast episode 169. Crazy that we’re at 482.

Brandon:
That is crazy [crosstalk 00:01:06].

David:
… maybe 169, but he’s also a first responder that started working a job while buying real estate. He’s way further ahead than I was. I just had a handful of rental properties.

Brandon:
Yeah, he’s doing…

David:
Mike’s got a whole business going on.

Brandon:
Yeah. So we’re going to talk today to Mike Webb. Mike Webb is a fireman out of the D.C. area. Invested in West Virginia. You’re going to be surprised. I mean, he still has a full-time job today and works 40 hours a week. Very normal job yet, he’s done between two and 300 deals. He owns 35 current rental units right now. He’s just killing it. And you’re going to hear about how he’s used partnerships for that, how he’s hired people for that, and some of the traits, I mean, hiring where the good things to look for. He’s got some really genius systems that you’re going to love.
We talk about risk. We talk about a ton of stuff, so you’re going to love today’s show. So stay tuned for the whole thing and yeah. Awesome stuff. Well, before we get into that, let’s get to today’s quick tip. Today’s quick tip is there’s a little website out there. You may have heard of it. It’s called biggerpockets.com. It is the world’s largest real estate investing website. I found it very early on in my career and it helped me build everything that I have today. David Green found it early on. Millions of people have come through BiggerPockets to learn network grow. It’s like the place for real estate. So the reason I say that is because a lot of people don’t realize BiggerPockets is more than just a podcast.
Yes. We’re the largest real estate podcast out there, but we’re also a lot more than that. So definitely check out the site, go look in the forums, go look in your local forum. There’s a forum for like every major metropolitan area in the country where people in your area are talking about real estate and doing deals together. There’s a marketplace. There are the deal analyzers. There’s a lot there. There’s books, right? We got books all over there. In fact, right now you can. Pre-order my new book that’s upcoming. Me and Brian Murray are launching a book at the end of July called the The Multifamily Millionaire, Volume I and II. And there’s some special goodies if you pre-order. So all that and more all we’re on BiggerPockets. All right. Well, that’s that. I think we’re ready to jump into this episode, David, anything you want to say before we jump into the conversation on working full-time job while invest in it?

David:
That’s what I love about this conversation is it doesn’t have to be either or. Do I do real estate or do I do my job? Why not do both?

Brandon:
Why not do both? Today you’re going to learn how to do that. So without further ado, let’s get to our interview with Mike Webb.
All right, Mike, welcome to the BiggerPockets Podcast, man. Good to have you here.

Mike:
Thanks for having me.

Brandon:
Yes. Let’s dig into your story. You mentioned a little bit about it on a recent episode of the BiggerPockets Podcast when you were one of several guests asking questions, but we were just so inspired by your story. We wanted to bring you in and hear the whole thing. So let’s start at the beginning. How did you get into the idea or into the world of real estate investing?

Mike:
Sure. So I worked as a career fireman since 2008. So I had always had an entrepreneurial thirst growing up through high school and stuff. I had my own car detailing business and did all these little things, but I always want to be a fireman growing up. So when I graduated college, the opportunity had presented itself. So I ended up going down that path. But in the back of my head, I always had that entrepreneurial thirst. So it really kicked into overdrive whenever my wife and I found out we were having our first child and I was like, you’re scared, you’re excited, everything all into one. I was like, “Oh, I’m going to look to see what it costs to go to Disney.” So did a little research and I was like, “Man, that’s pretty expensive.
So at the time I figured out what my hourly rate was and I figured how much extra I was going to have to work in order to afford to do this cool things. I was like, “I’m literally just going to be trading a lot of time for the money and then I’m not going to be around to see my son grow up.” So I had been researching subway and liberty tax and lawn care businesses and all these franchises and ideas. And I kept coming back to real estate. My parents had some rental properties when we were growing up and sold them for a host of reasons, but something always interested me in real estate. So I spent probably about a year or so, just reading every book.
I found BiggerPockets, started going to the local meetups and just doing everything I could to turn my vehicle and my spare time into just a university on wheels. I picked up my first rental property in 2013. And then from there, I’ve just evolved into what I’m doing now, which is, I guess you could say a little bit of everything. In a nutshell, how I got into it.

Brandon:
That makes sense. Let’s dive into that very first deal. Then the first investment property, what was that?

Mike:
It was a side by side duplex.

Brandon:
Okay. And did you house hack that or you just bought it straight out?

Mike:
So I bought that off the MLS. And if you wanted to back up one deal before I even knew what a live and flip was, I did that. My very first house after college, I bought this house had like cat hair in the refrigerator, it’s disgusting. It was like mauve green and salmon pink. It was disgusting. I basically lived there and redid it room by room. Some of it, myself, some of it I hired out and then eventually sold. It made a very little bit of money, but I learned a lot doing it. So unbeknownst to me, that was my first deal I guess you could say. My first income producing property deal was a side-by-side duplex I bought off the MLS.

Brandon:
Okay. Did you live in one side or you rented both out directly?

Mike:
I rented both out. This was in 2013 and I had met a realtor at the local meetup. Basically, I didn’t know what I didn’t know at the time, I just knew that I had picked duplexes because in my mind it was not much bigger than a normal house. At least if one side was faking, the other side would carry it. I may not make money, but it would at least carry it. I found that this one on the MLS and I was able to in essence, get a hard money loan. I had saved up some money working overtime and a part-time job in order to pay the points and the fees associated with it.
I just jumped right in and at the time I was scared to death. I was like paralyzed, but I knew I had to do something and kick both of the people out and turned over one unit then I kicked out the other side and fixed that unit up, moved the market rents up or moved the rents up to market, and then eventually refinanced it out. I thought I was going to refinance all my money out like you read about all the time, but that didn’t quite happen because it did not appraise for what I thought. At the time, I was surprised. Now, knowing what I know, I shouldn’t have been surprised it didn’t appraise.

David:
So I can tell from the language you’re using Mike, that fear was a big part of this. When you say things like, “Well, I knew at least one side would rent out and not the other.” Those are all thoughts we think when we’re worried about what we could lose in the deal. What was going through your head at the time before you bought this deal, and then compare that to, now that you have a little bit of experience, how do you look at it differently?

Mike:
So there was, I would say a combination of thoughts. You’re soon to be dad. I was still working a career as a firefighter and I had a couple friends get medically retired, like 25, 27 years old. And I was like, “Man, if that happens to me, if I can’t wear this uniform tomorrow, how am I going to keep this roof over our head?” So you start having that like, “Man, there’s a lot more people depending on me, besides just me soon.” My wife, my kids, et cetera. But I also knew that nothing was going to change if I didn’t do something. And 2013, you got to think back when I’m sure you guys remember, we were just coming out of not a great economic time or economical time. I was in a batch of firefighters that was projected to be laid off.
So that scares you. Like I had just moved my wife to where we live now. We’d built a house and I was like, “I’m going to lose my job.” So you got soon to be dad. I had just come off the last couple of years of financial uncertainty with the county and the government and whatnot. And that’s where I was at with the fear mindset, if you will. So I was like, I want to do something, but what is the safest thing I can do, but still do something to move that ball down the field?

David:
Yeah. Do you still own that duplex today?

Mike:
I don’t. I sold it on Craigslist a couple years ago.

David:
Why was that? Because you learned more in the process sensor, you just thought you’d get a maximum.

Mike:
Yeah. At first, I was just buying everything that made sense with like a 2% number and that’s certainly a great role, but I learned that there are certainly some downsides when you only use that as your evaluation criteria.

Brandon:
Can we dive into that a little bit? For those people who don’t know what that means. Like the 2% rule, the 1% rule, can you explain what that is and what are the dangers of just following that?

Mike:
Yes. So the 2% rule was basically you take whatever the monthly income is or rental income and you’re going to go ahead and divide it by 2%. That’s what you want your all in number to be. Like what’s some simple numbers here?

David:
So if you buy a place that’s going to generate a thousand dollars a month in rent, you’d pay $50,000 for that house.

Mike:
And a lot of people are like, “That’s impossible to hit that metric. How can you do that?” It’s not impossible. Right now it’s a lot harder, but I was using that criteria to be like, “Okay, if I’m buying it for 50 and I’m going to put nothing into it, I want a thousand bucks a month.” So this one for real numbers, I paid, I think 100 and I thought I was going to put about 35 in it total for both sides. I put a little bit more than that into it and then it only appraised for like 135. So I didn’t have quite enough to payback the lender at the time.
So basically worked something out to where I held a sec or they held a second and I just slowly worked that off. So yeah, it’s like one of the things that didn’t go nearly as I planned, but I still think the best deal just because you learn so much by doing that first one.

Brandon:
So what came next? You had the one. I’m getting the hang of this thing. What’d you do next?

Mike:
I just stuck with that side-by-side duplex property thought process and I identified like a little pocket of the area I was working in and I just started making lots of offers on every single one of them I saw and then eventually had about nine side-by-side duplexes an a three or four street area. Yeah. So I had 18 units in this little corridor of this city. I knew that little area very well. I knew what things would rent for. I knew roughly what I would need to do to get that rent and stuck with that for the next, probably about three years.

Brandon:
I got to unpack this. Because I mean, going from a duplex to 18 units while working a full-time job. I mean, you’re still doing your job throughout this whole time, is that right?

Mike:
Yes.

Brandon:
Yeah. I mean, how did you even do that? Did you have the money to be able to do all that? How could you get all those loans? Like how did that whole thing happen?

Mike:
Not, not easily. There were definitely some things you had to learn throughout the process. That’s for certain, but yeah, I had a full-time job and still do, and I had just identified one property type and I just started to get a lot better at that one property type. Granted knowing what I know now I should have bought everything I saw during that timeframe because now it’d be amazing, but I stayed very focused on those side-by-side duplexes in that area. I knew what I could pay and I knew what I had to do and then I knew what I could exit at. So once I got pretty good at that, I was able to just make some relationships. My first one I financed it was with the local bank that held my very first mortgage and it was not the best rate. I had a lot of extra fees.
However, it was my first one and they knew me as a person. So they were willing to lend on it where that’s always seems to be a big hangup for people. I would say you may not get the lowest interest rate, but you have that relationship with that person. And then once you have that experience, then you can go shop your local banks, but then develop a relationship with a local bank that’s going to go ahead and fund those types of deals. You get in touch with the commercial guys and they start figuring out what you’re doing, what person you are and you just have a conversation like this is what I’m looking to do. Do you think you can help me? And that that’s how you financed it or I financed it rather.

Brandon:
That’s awesome. I want to unpack that a little bit here. First of all, I love that you said you picked that niche. I don’t know the exact words you used, but you picked that niche and you went all in on that. Like side-by-side duplexes where your thing. I talk about that a lot on BiggerPockets webinars and elsewhere. There’s a million things you can do in real estate, right? There’s a million different things. You can do self storage, you can do townhouses, you can do condos, flips rentals, burr, house hacking, whatever. But as David the analogy you use all the time is getting your reps in. You have to get your reps in, but when you do one flip and then you go do one duplex and then you try to buy a small apartment and then you go back to doing a burr and then you go do a house hack.
Like you’re not getting your reps as well in anything. So I love the fact that you just chose something and said, “That’s what I’m going to be good at.” Because the beauty of that is that you can then talk about that. You’re the expert in that field, in that area. And so when you go into a commercial lender or a residential lender, or any lender, or trying to talk to a partner, or trying to raise private money or whatever, you’re so good at that thing. So I’m wondering how you’ve balanced that focus, but I’m assuming you’ve bought other property types now as well. I mean, maybe bring us up to where you’re at today in your portfolio, and then we’ll work backwards from there. And then I want to ask about how do you view focus versus expense.

Mike:
What we’re talking about this time period was probably like the first three or four years of my investing. And after that first duplex that didn’t appraise to where I thought it would appraise, I actually started wholesaling because I had to come up with some chunks of cash to pay down that second. So I did that for probably another year before I bought another rental. Jumped back into the rental game and then I slowly segwayed flips. And then that’s about whenever I met my partner, who’s from BiggerPockets also, and he’s a local KWA, and him and I formed our own joint business, probably about three years ago at this point. What we do now is we run a meetup. We have probably about 35 doors and do a little bit of lending.
Now we’re not to go totally against what you just said. We went from being like super niched, but we just basically became instead of a one trick pony, we’ve had to learn how to basically monetize all the different types of deals that come across your desk. So it might be a listing for him, or it might be a wholesale, a rental, a flip, a loan or something. We’ve even bought land recently. So we’ve just learned how to figure out where we can fit into all these different deal types. That’s what we have right now.

Brandon:
I’m glad you brought that up because it’s not necessarily even against what I said. When I get that advice of getting good at one thing, that’s for like when you’re just getting started and you’re looking at 100 different things. Just get good at something, but as you get good at that, you got your reps in, great then you can try something a little bit different, then you can add more and then you can add more. And that’s when you build out this exhaustive skillset so you can add more things. When I started opening our capital, the first thing we did was mobile home parks. We said, that’s all we’re going to do because we needed to get our reps and we needed to get good at that.
But then now a year in, I mean, now we’ve got two apartment complexes under contract. Now we’ve got a self storage deal under contract and we can do that because we’re adding them on one at a time. And we’re also partnering with people who have expertise in those areas, but we didn’t just start by going, “I’m going to invest in anything possible.” Because that’s just a recipe for disaster, I think.

Mike:
Yeah. So now you’re just adding spokes to the wheel.

Brandon:
Exactly. Yeah. Very cool. So you got 35-ish units. You got to meet up going. I want to talk about that later. Are you still working the job? Did you quit that at any point? What’s the status with that right now?

Mike:
I still work as a firefighter and actually right now a lot of people think a lot of firefighters just don’t work because they’re always home. That changed a lot for me, probably about a year ago. I took a promotion and now I work in a Monday through Friday office type setting, just like most people. So that required a lot of change within my business because I had actually served in a role similar to that about three years ago and it wiped my business out for pretty much a year. So whenever I went back to what most people know, it’s like a normal fire department schedule. I was working 24 hours on. I was off for 48. Those 48 hours is when I did my real estate side hustle, if you will. Well, whenever that all shifted to a day work schedule, all my momentum stopped.
So basically, spent the last three or four years, like I said, building a partnership. We’ve got a couple of folks that work with us now. So did a lot of getting stuff off my plate. So even if I’m not present, the machine’s still churning. So that now when I’m in this current role, Monday through Friday, the business is still working. So yeah, I’ve maintained my job throughout all this. I can retire in a couple of years, like five or six years. Sometimes may seem like an eternity. I never started this to actually quit my job. I struggle with that sometimes because my friends are either full-time real estate investors or full-time fireman and not too many or in between.
So certain times I go through these spells where I’m like, “Ah, I’m going to quit. I’m just going to do real estate full-time.” Then I’m like, “Ah, no I’m not.” At the end of the day, I still like my job. So as long as I like my job and enjoy going to work and I’m able to do both things, what I’m doing. At this point, I plan on seeing it to retirement.

David:
What are are some systems that you put in place so that your business can continue to run while you’re going into your 9:00 to 5:00.

Mike:
Before, I would say I was a pretty serious hobbyist, and now you have to actually think about it like you’re running a business. And with that, I took a lot of the things I didn’t know about business, but I knew about the fire department. So we operate with standard operating guidelines or procedures or whatever. So I just took basically my thought process with how you function in an operational setting with the fire department and created SLPs or SLGs for my business. That was an overwhelming thought at first, but I just set up a Google Drive folder and every time I would go do something, whether pay this bill, transfer utilities, do this, do that, order appliances for a rental, I would record it on either Loom or Screencast-O-Matic or something like that. I would just save it to that folder and it just said systems 1.0.
Because I knew it wasn’t perfect, I knew it wasn’t exactly where it needed to be, but it was a start. And then as we brought people on, I’d be like, “Okay, these are your roles and responsibilities and here’s your job tasks. Here’s how you do it and we’ll work through it.” So I use that as basically my training folder. Another thing we do that’s extremely helpful is we chat day-to-day on an app called Voxer, which is like Slack or one of those push to talk type apps. We run our weekly 10X meeting or KPI meeting, whatever you want to call it. So every week we’re touching on all the KPIs for the different parts of the business. “What do we need to do here? What do we need to do there?” And basically, handling everything at a 30,000 foot view for approximately 60 minutes a week. And then from that, a lot of the folks in their different seats know what they need to do that week to accomplish whatever.

Brandon:
Yeah. That’s a really good, I want to touch on a couple of things there. First of all, I love the weekly meeting cadence like that. Meeting weekly with an agenda, with a plan. It’s not just like, “Well, what are we going to talk about today guys?” When I did that, we implemented EOS, right? That’s one system. There’s a lot of systems out there. When we implemented that, I went from like over a dozen, maybe two dozen hours of work every week and opened our Capitol down to four where it’s like that one impactful meeting, I meet with my team. We review any deals that need to be looked at. Everyone says what their goals are and where they’re at and they show their progress. And it’s amazing because now your system’s managing the people, you’re not managing the people. That’s the biggest thing.
And the great thing is it doesn’t have to just people with like a does in employees. It could be, I’m going to get my contractor. I’m going to get my property manager or whatever, project manager, whatever that thing is and we’re going to just work it for 30 minutes or an hour every Monday to make sure that all this stuff is going together. So I just want people to know that this doesn’t only mean people who have massive teams of people. It is what it is. The second thing I want to point out is Loom is exactly what we use as well for a lot of stuff. Loom is great. For those who don’t know Loom is just Chrome plugin on your computer. I think they have it for other browsers too, but you just click this button and it records your screen or your video or both.
And then it automatically saves it to this website and it copies of the link to your clipboard if you want it, and you can put it in little folders right on there. So it’s super simple. So anytime I’m like, I don’t know, doing something that I’m like, “I don’t really want to do this anymore.” Or like, this is something that I do regularly. Oh, I’ll just do it one more time, record Loom and I’ll just talk through it. Like, “All right. So this is typically what I do for looking for a condo complex and Maui. I go to this website and then I searched this thing.” I just talk it while I’m doing it. And then at the end of that, I’ve now got a training. Like what you said there, just throw it in the folder called systems for now.
You can get fancy later, you can have hierarchies and whatever, but at least now it’s recorded somewhere. So then later on when I’m like, “Oh, I just got a new virtual assistant. Oh, watch this video and you write down a list of all the steps. So now we have a checklist.” The system was created by somebody else. Anyway, that’s some gold stuff right there. I love that stuff. When you mention team and these people with you, what does that team look like? I mean, do you have a bunch of full-time employees or are these independent contractors or what is this?

Mike:
Bill, who’s my partner from BiggerPockets that we met on here, him and I own the company. And then we have a full-time assistant and she works probably about 35 to 40 hours a week. All of this is remotely. So she’s stateside, we have two part-time/full-time acquisitions type folks. So we have somebody setting the appointments. We have somebody going on the appointments, looking at all these houses or else that’s how I would do on the evenings and weekends. And then we have, so it’s blurred lines, but my business partner, Bill, he has a full-time virtual assistant that works for his realtor business, who is in the Philippines. He works 40 hours a week, but he does some of the behind the scenes stuff for our business as well.
So it’s a mix of everything and then we have a couple crews that we keep pretty busy so that they’re working, not directly for us or exclusively for us, but they’re probably getting 75, 80% of their business just from us. So that’s what it looks like.

David:
These people that you partnered with Mike, who was responsible for training them?

Mike:
Depend on what seat they were going in. So a lot of the acquisitions and/or dispositions stuff was being handled by my partner, Bill. I always explain it, when it comes into our funnel, Bill, pretty much it’s handling it. Once it gets put on the conveyor belt, I handle it. I handle the rehab, whether it’s going to be a rental or a flip, and then whenever it’s ready to come off the conveyor belt, it goes back to him to either turn it into a rental or listed as a flip. So if it was something regarding the property management or the rehab stage, I would do a lot of the training. If it was something as far as the acquisition or disposition, Bill would handle.

David:
So Bill handles the initial stuff. You take the sandwich in the middle and then he handles the end.

Mike:
Pretty much.

David:
Have you guys had to address any resentment on either party thinking that one of you is doing more work or the work that one of you does is harder than the other?

Mike:
I can’t say that we’ve never had like a knock-down drag-out over anything like that. But I think at times you have to just realize with a partnership. I would say we never started this business right from the get-go with the intent of starting a business. We had known each other pretty much since 2013 and had done a handful of deals on a handshake, which I wouldn’t necessarily recommend that approach, but it just worked out for me. So we knew each other as people. So before we ever started a business together, I think that was very important.
With a partnership, you have to realize there’s going to be ebbs and flows and times where one person’s doing a lot more than the other and vice versa, but just being aware of that and being like, “You know what, I don’t have a ton going on right now. Do you want me to pick up the slack on that or do this or do that.” But yeah, there are definitely times where he’s putting in more work and there’s definitely times I think I’m putting in more work and they’re not always at the same time, obviously. So you just have to be mature enough and also be willing to step back and take a look to see what’s actually going on and knowing when you can chip in and help.

David:
One thing I noticed that makes partnerships work is the attitude of the people involved. If they’re a team player, and when I say that, I don’t mean they’re willing to work in a team. I mean, they care more about the success of the team than their individual accolades, which is always difficult. It’s not hard to find a player who says, “I want to go play on that team in score all the points and make all the money.” But oftentimes, what makes a team win is stuff that doesn’t get noticed. The people I partnered with or work with in my companies that say, “Look, all I care about is how well the company does and I’ll do whatever is needed.” They tend to be less angry, less cynical, less bitter, and that relationship stays together for the long-term. So it gets smoother versus the people who are showing up to a partnership saying, “Well, what’s in it for me?”
If you’re coming in and your thought is, “How quickly can I quit my job, become financially independent, be very wealthy, be sitting on a beach and not have to work.” And that’s your attitude when you step in the door, that will be exposed in your partnership. I can guarantee there will come a point and that will cause resentment on your partner’s behalf and then usually it falls apart. And all that work you did to get the business to that point was for nothing. I think that’s something that I really want to highlight because we talk about real estate, a lot for its merits, which all those things are true. You can make money from anywhere. You make money when you sleep. That’s all true. But the work is still there. It’s just like, if you have a job or if you want to be in shape or you want to be good at a hobby or whatever, you have to put that work in.
And I see people like you, Mike, I think are doing well over this long period of time, because you understand commitment to a cause. Being a firefighter, you’re part of a department, you’re one piece in this puzzle, what you do affects all the people around you. And when you act in a way that’s considered of others or hey, that person’s struggling with that hose, let me go help them just cause I’m not carrying anything right now. It makes the team better. I guess what I’m getting at is have you noticed that those principals that helped in the fire department translated into your business or do you feel like they’re just two completely different worlds?

Mike:
I think it translates into a lot of things and I don’t even think you need something as quite dramatic as the fire department to make that parallel. I think good people are good people and bad people are bad people and chances are, if you’re going to be good at being an insurance agent and you have the right mindset, the right mentality, everything you just explained, then chances are, you’re going to be able to get put into the real estate world or a real estate team and probably mirror a lot of that same success you did in the insurance world. If you’re the person of that mindset and those beliefs. I don’t care really who you are. I know you’re a big sports guy.
How many times do you have some of these, just all star athletes go to these teams, but they can’t get along and they can’t play nice. They can’t do this. They can’t show up to the practices. Next thing you know, this star is a nobody, even though they’re on a great team and they have all the skill sets in the world, but they have the horrible mentality, personality, whatever you want to call it. It’s the same thing.

Brandon:
What have you found has worked for you? Attracting and identifying good people to work with whether it’s a virtual assistant overseas or whether it’s somebody local, what have you found? It is just been like, oh yeah, that’s the secret to our success with hiring? Or maybe you haven’t found that yet.

Mike:
Two parts, dumb luck. We follow a lot of the Keller Williams stuff. So we did the desk profile and it’s the 411 or 211, 3 11. I can’t remember.

Brandon:
That’s 411.

Mike:
Yeah. 411. Like I said, my business partner Bill is Keller Williams agent. So they have that system pretty dialed in. So we’ve mirrored some of what they do. When we hired our assistant, we started with like 113 applicants, and by the time it was all said and done, we probably had four to six to actually sit down and do an interview with. It’s a lot of little tasks and a lot of people just self select themselves right out of that process. So I wish I had a better answer to that, but no. It’s just putting them through all the different steps and then eventually sitting down with them, whether it’s on Zoom or on the phone or in person preferably, and you can tell through all of that process, what person they are.
Obviously, once you start working together, you start to see a little bit more. But as long as there’s humans involved, I think you’re always going to have that variable and it’s going to be tough to say with 100% certainty, this is how you do it because we’re humans. But I think you can weed out a lot of the trouble ahead of time by following a process like that.

Brandon:
I think you just totally nailed. I mean, you’re like, “Oh, I wish I had more than that.” That is it. You had a process, you were intentional. What I think most people do and I’ve done before. I know David, you’ve probably done it before, which is like, “Well, that person’s here. Let’s hire that person.” It’s like somebody in your life. So you’re like, well hire that person. I’ve done it too. I’ve been guilty of it many times. It’s easier to do that than it is to go and make a job listing to tell everybody about it, to have them filter into some website, like WizeHire or Google Docs or whatever, and then you have to filter them and read them and then interview people. It’s like a 10 hour process. And so what I have done and what many people do is they’re just like, “Well, this person’s here. I think there’ll be fine.”
Imagine approaching real estate that way. Actually, a lot of people do approach real estate, right? Like, “Oh, I don’t want to do the work of analyzing properties.” That’s a house. There’s a front door. It must be good. It’s a recipe for disaster and yeah, you might get lucky. You might have a good deal that comes in, but chances are, it’s just going to be terrible. And so it’s like the whole analogy of, if I had six hours to chop down a tree, I’d spend the first four sharpening my ax. Getting the right people, whether it’s employees, whether it’s a contractor. I mean, how many times we’ve done that with contractors? Like, “Oh, they’re the first one that gave a bid. I’ll go with them.” If we approached contractors the same way as we should approach employees and property managers. If you just vet people, put in through a system is going to give you a dramatically different experience. It doesn’t guarantee it, but definitely does better.

Mike:
Couldn’t agree more.

Brandon:
David, I’m curious to your thoughts on finding good people. I know you hire a lot and you’re growing very quickly. What have you found has worked? What hasn’t worked in you’re hiring?

David:
Well, for being super transparent. It doesn’t work when somebody reaches out to me and says, “Hey, I want to work with you.” And they give me their word. I’ve had so many people say, “David, I’ll do whatever it takes. I’ll move to California. I’ll work for free. I just want to learn.” And I’ve made the mistake many times of saying, “Well, why would someone lie? They give me their word. I should be able to trust them.” It’s over 90% of those people break that promise that they made, right? Once they actually sit and think about having to move to California and having to work for free, they changed their mind every time.
So one big thing I’ve had to recognize is you can’t assume that enthusiasm is going to last forever. That’s not an actual trait of good partner because enthusiasm doesn’t stay there all the time. What find when you drag out that hiring process, you make people go through several, several steps. You make them wait a long time. You make them prove what value they have. Like Mike said, people self select out that weren’t going to be there. What makes that hard is that you don’t like breaking people’s hearts. You can see these people that are so excited and there’s a party that wants to help them, and wants to partner, wants to see the best in them, and they want the best for themselves. I think they just haven’t gone through enough of life yet to recognize that that short burst of intensity like the tortoise and the hare, right?
The rabbit that comes out the gate, taken off right away. You can’t maintain that for a long time. It’s really the tortoise that wins in this. The committed person that knows I’m going to suck at this for awhile I’m not going to make money. I’m building up skills. I have to have faith. It’s going to turn into something. So it is the people that go through the long, drawn out hiring process with me that always work.

Brandon:
I got two questions. I got one question for both of you. I’ll ask Mike you first, if there is one trait that you could identify above all others in hiring somebody that they have to have, and that you’re looking for, regardless of the role, just like a general trait, what would that be?

Mike:
Have you heard of the OODA loop?

Brandon:
No. [crosstalk 00:33:46]

Mike:
All those really important steps, right?

Brandon:
No I don’t. OODA? [crosstalk 00:33:50]

David:
The OODA loop.

Brandon:
Yeah, tell me what it is.

Mike:
Sure. I think it was Colonel in the Air Force, John Boyd. So he developed this thing for basically at a tactical level fighting. So you have to observe what’s going on, then you have to orient yourself to where you’re at, then you have to decide what you’re going to do, but the most important part of the whole process is the acting. So I would say like, you get this great hire in there and they come in and they observe what’s going on with your business. They get oriented. They start to learn the lingo. What needs to happen when. Then they start to make decisions on how to make those things happen, but if they don’t act, none of that matters.
So I would say of that act is probably the biggest one because they can have all these great intentions and all this stuff, but if they’re not going to pull the trigger and act, none of it matters. So I would say if I had to whittle it down to one, that’s what it would be.

Brandon:
So, David, what do you think? Is that trick?

David:
I would say it’s track record. So the people that do well in my businesses are people that treat it as if it was theirs. So if I say, “Hey, Brandon, this is my buyer. You’re going to show them homes this weekend.” And you take it like, all right, how do I get in and out as fast as I can so I can get to the pool this weekend and be done with it and get my commission check. You’re going to give them a bad experience. They’re going to tell that they’re bothering you. If you treat it, like if this was my client, I would show up prepared. I would do all the stuff that David said. I would have questions for them, ready to help them make the determination I would have already called the listing agent to find out, are we going to get this house?
They’re going to sense that you care about them and it’s going to make me look good. I can’t tell you how many people think that it’s okay to treat the clients of the business as if they’re completely unrelated. You would never treat that person that way, if it was your client, but when it’s somebody else’s, then they feel good. So I like to look at the track record that they’ve had before they came to me. Did you have success at something that would translate into this or have you gone from job, to job, to job taken everything you could from that employer getting paid and not being productive, and now you’re telling me, well, when I come work for you, it’s going to be different.

Mike:
Yeah. That’s really good.

Brandon:
I’m curious of where you are headed in the future. I mean, what’s the plan going forward? Where do you want to see your business in the next few years?

Mike:
Probably do a little less flipping. The whole reason I got into this was to not have to be working all the time and flipping, even if you get it systematic, still takes a little bit more work I think on the day to day. I’d probably rather just have a more passive, if you can use that term rental portfolio and focus more on the partnerships like you just said and the lending aspect. So whenever I think like, “Hey, in five years, where do I want to be?” I don’t necessarily think about a unit goal. I think more of income goal and a quality of life goal. So I just listen to that life in every books so I’m re-evaluating some stuff. But I would say probably…

Brandon:
That book messes with people. Change people.

Mike:
So I would say probably more towards a rental and a lending approach or a partnership approach.

Brandon:
How many flips are you doing right now?

Mike:
Like right now, probably about five, but throughout the course of the year, it just depends maybe about somewhere between 20 and 30. If I had to just ballpark. It just really depends on sometimes you have a lot, sometimes you don’t.

Brandon:
Yeah. I mean, how many have you done total over your career while working a full-time job?

Mike:
I tried to think about that when I was filling out the paperwork. If I had to guess, I probably have done between two and 300 deals, but as far as flips go, probably about 50, I don’t know, somewhere in that ballpark. I should have kept better records when I started.

Brandon:
If you’re driving this volume in your business. What are you doing for marketing? What’s your lead acquisition funnel look like? You off market, on market, both?

Mike:
So when I first started, I was pulling most of those side-by-side duplexes off the MLS where that’s non-existent pretty much right now. So most of it is direct to seller marketing, do some direct mail pay-per-click SEO. We run a meetup that has helped a lot with you get some of these newer wholesalers. They don’t quite know what they got or how to get it, where they need it. So a lot of times they’ll bring it to us and we can purchase it. So I would say the meetup is a little bit of a deal flow source for us.

Brandon:
Yeah. The meetup thing is cool. I mean, we talk a lot about it at BiggerPockets about starting a meetup, and then COVID put a damper on a lot of that for the last year, but as we’re emerging out of it, meetups are starting back up again. Some people just did digital once throughout the whole thing, but just a reminder for everyone, you can go to biggerpockets.com/events and you can look for meetups in your area, and if there isn’t one, you can start one. Especially, I think you can post in the events system if you’re a pro member on BiggerPockets. Start a meetup, get people together. What have you found works for your meetup? How do you run it? How does it work? Why do people like attending? Tell us a little bit about that.

Mike:
So we started it because you guys kept talking about it and we were like, “Okay, we’ll try it.” So even though I’ve never envisioned myself running one, we set it up like, “Hey, we like talking about real estate. We know a couple of folks that like talking about real estate let’s see what happens.” So we scheduled one at a restaurant and we knew going into it. We might just end up being two dudes having dinner together, talking about real estate. And if that’s what happens, it’s what happens.

Brandon:
Which sounds like that’s still a pretty good evening.

Mike:
But then like 16 people showed up. So we’re like, “Okay, maybe we’re onto something.” So we’ve been running it now for a little over two years and we don’t have the people getting up to sell this course or do this, or do that. We just approached it as the, “Hey, we always want to have somebody like to lead and somebody to follow.” Like you two guys, a lot of people look at you and they want to follow. You’re building this big company, you’ve got all these books, mobile home parks, whatever and then there’s people that are always going to be following you. So like there were people in that room that ended up showing up that like we try and chase in a good way. And then there’s people in that room that have never done a deal and they’re looking up to us.
So, there’s all these different skill levels in that room, and it’s just been cool to be like, “Hey, I’ve never heard of that, but you’re really killing it in note investing. Could you maybe talk to all of us about it and educate us all with basically no agenda other than just looking to help everybody.” And you’ll get people in those rooms that maybe take a little more than they give. That’s just how it is, I guess. But for the most part, it’s created a little community and you just mentioned COVID. What we did is we unbeknownst to us how important it would be, we created a private Facebook group at the beginning of it. So that’s where we ended up meeting during COVID and that’s just a great place. Like, “Hey, I need somebody to do carpet.” “Oh, call this guy.” Or, “Hey, I need a lender for this.”
So everybody’s sharing deals and passing services around in that room, in that group and it’s just been super beneficial for us. Just taking that approach like, hey, we’re not looking to charge, we’re not looking to do this. We’re just looking to like help everybody grow. And that’s just come back to us in tenfold. So that’s how we run it and I always started every meetup, Hey, we’re much better at real estate than we are running a meetup. So bear with us because we always have some technical difficulty or some mess to deal with.

David:
So when it comes to working your job and investing Mike, can you share with us how you made the decision for yourself that it was best to stay working while investing? What went into that decision and what you would need to see before you decided it was time to leave the job?

Mike:
Whenever I first decided to get into real estate, I never started with like, “Hey, I want to quit my job.” Obviously, those types of thoughts change. One of the things I always say and I forget who I heard it from, but go as far as you can see and once you’re there, you’ll see a little bit further. Once I got started in real estate, I was just like, “Ah, man, I didn’t know all this stuff was possible. I could make more than I do in a year in a month.” So you start to wrestle with that thought process. But I’ve always just thought like, you know what, I’ve always wanted to be a firefighter ever since I was a little kid. So to me, I’m able to do something that gives me purpose and quenches something that real estate doesn’t.
As long as I’m able to do both, that’s where I’ve just decided to stay doing either or. When would I make the decision to leave? I think, like I said, a little bit earlier. If it ever gets to the point where it’s like, this is not fun and I can tell you now, if I was in a normal cubicle job, I would have never have made it as long as I have. But I still enjoy going to work, hanging out with the guys I work with, doing what we do. I shouldn’t say totally different. It’s a little bit different pace than real estate, but it’s still satisfying to me. I still feel like I get purpose out of it, but everybody there, I shouldn’t say everybody, a lot of people will be like, “Oh, buying houses, that’s risky.” You know, this, that.
I’m like, “My thought has always been like, it’s riskier to only have one source of income.” It’s less risky for me to invest in real estate than to solely depend on politicians for my salary. Now it’s like, okay, God forbid if I were to get hurt, like I said earlier and I couldn’t work, I would know how to pay my bills. If nothing else, if you think about the last 18, 24 months with COVID, how much has that changed some people’s income? One day they had a business the next day they didn’t. Imagine owning a catering company right now, or a year ago it could have killed you or law enforcement. A lot of people have just left those types of professions, and if they didn’t have something else, what would they do?

David:
That’s such a good point.

Mike:
You’d be screwed.

David:
You got me thinking about people. There’s always risk in anything you do. I’m going to use to go to the gym and I’m going to start working out. Probably pretty easy to pull a muscle, especially when you’re new, you’re going to stretch a ligament. You’re going to jam something, right? Jujitsu, we have all these little injuries, like Brandon’s foot is pretty messed up. It’s broken and it hurts all the time. So there is a risk in doing it, but what is the risk of not exercising? It’s significantly more than jamming a joint or something like that. You’re going to die earlier. Your life’s not going to be as good. So if you’re looking for risk, you will always find it.
There’s just something about that, and when you’re getting advice from people saying, “Don’t invest in real estate, you could lose your money.” That is true. Not investing in real estate at all is probably much riskier, and if you’re listening to us, we would say the same thing. Like, well, why do you have all your eggs in one basket? You’re imagining people that they’re working in industries now like they were a manager of a blockbuster. Okay, it’s not risky. I go to work every day. What happens when blockbusters completely shut down and you had no control over how that happened.
So I really liked that mentality, Mike, that you’re spreading that there’s risk in everything. And oftentimes staying in your comfort zone is probably the riskiest thing you could possibly do. You’re just giving control of your fate to others and hoping that politicians or the environment or a virus or whatever is going on in the world won’t ruin that. What do you think about that, Brandon? Because you’re a parent, right? You have to think about two little kids. You have to think about your wife. Risk is obviously going to be a bigger part of what goes through your mind than someone like me who doesn’t have any of that.

Brandon:
Yeah, for sure. I mean, you said it, there’s risk in everything. There’s risk in non-action. I was thinking back to what Mike said about keeping the job. And then when I think about a lot of people look online at people like you and I, and I think, “Well, Brandon’s over there in Hawaii and just living this life and David’s over in California and Hawaii.” I don’t think people realize like you and I worked jobs. I mean, they might not be like a typical job, but the very fact that I’m sitting here on a podcast right now, I don’t do this for free. I get paid to do this. There’s ad revenue and this stuff like that. Our capital gets fees when we buy stuff, I sell coffee for goodness sakes, like [inaudible 00:46:07], get your coffee today. I do all these business things to generate massive revenue. I write books.
I do all this stuff to generate massive revenue because I’m trying to decrease my risk. And so like I would not be even remotely close to where I am. I mean, I would be nowhere near where I am today real estate wise, if I would’ve just quit early on and just had no job this entire time. I mean, some people maybe could, but I’ve been able to take more risks because I have more income. And the more income I make, the bigger risks that I take. I mean, I got properties under contract right now than I bought my entire life combined. I can take those risks because I’ve got all this income coming in that can support it. So again, I think there’s just a good remember, this isn’t Brandon sitting on a beach all day doing nothing and David’s sitting on a beach. We work extremely hard and you should as well.
Now again, there are ways to do fun work. I think that’s where people get, they hate their job and so they think, well, I’m going to quit my job and do real estate full-time. Maybe if you want. It just makes it so dang difficult.I would encourage people to ask what can you do that’s fun?

David:
I think there’s a lot of pressure on you if you quit your job also to do deals that you might not have done, if you weren’t.

Brandon:
I got toto bring that revenue in.

David:
Yes. I think Mike has the ability to analyze deals a little more carefully to pick and choose the spots he wants, to take time to form partnerships because there’s revenue coming in from his job. It’s like, you don’t want to jump into a relationship because you’re really unhappy with the relationship you’re in. You’re probably going to end up in another bad one. I think that pressure people have, get out of my job, get out of my job can often be like, “I don’t like my relationship. I need to go find a new partner to get out of this one.” And you can end up in just the exact same spot you were in.

Mike:
100%. I think it’s important for some people to realize, like you said, people see you guys on mine or whatever, and whoever they focus on or follow and it’s easy to be like, “Oh, this guy just must drive around on a Rolls Royce all day or this guy must just do this, that, and the other thing. That must be what I’m supposed to do. I think it’s real important for you to figure out what it is. For whatever reason, why are you listening to this? Why are you gravitating towards real estate? What is it you’re trying to accomplish? And just realize like your path is your path and it’s okay and it’s real easy to get focused on somebody else’s journey and try and make it your own. It’s okay to use those folks as motivation, but don’t think that you have to be just like them for it to work for you or to make yourself that.

David:
You may not want to be just like them either, right? If someone had to sit in your spot, Mike and deal with, “Well, I have employees I’m managing now. I’m investing other people’s money at times. I have commitments to my partner that when I want to take some time off, I can’t depend on what’s going on.” There’s a lot of people that don’t want the pressure that comes from the growth.

Mike:
That’s a valid point. You may be happy just to be the guy that flips two houses a year and does all the work yourself and makes 50,000 a pop. That could be totally fine. You don’t have to do a hundred of them to make it make sense for you.

David:
That’s a good point. Yeah. Run your own race.

Mike:
Exactly.

Brandon:
Mike, last question before we head to the famous four. What can our audience bring… how can they bring value to you? What are you looking for right now deal wise or people wise, what do you need?

Mike:
I’m really interested in more of a partnership route going forward. I just did my first loan. I just loaned on two flips down in South Carolina. So I’m looking to do some stuff like that more as I grow. Another thing I just recently started a little group is called First Responder Financial Freedom. So thinking ahead, whenever I retired, I really want to focus on helping police, fire, that stuff. Realize that they can invest in real estate. How can I do that? So moved it up a little bit, started it now so that I have a new mission when I retire and I can start working with that same clientele if you will, because I don’t ever see myself completely severing ties with that first responder community or at least for a long time. If you’re a first responder or nurse, or really anybody feel free, reach out to me on there and we share a bunch of information from guys all over the country.

Brandon:
Very cool, man. Appreciate that. Well, let’s head over to the last segment of the show. It’s time for our famous four. The famous four. The same four questions we ask every guest every week and Mike, I know, you know that it’s coming, so let’s get to it. Number one, what’s your favorite real estate either all time or current favorite real estate related book.

Mike:
Probably real estate book, The ONE Thing.

Brandon:
I like it.

Mike:
I guess if you want to call that a real estate.

Brandon:
It’s written by real estate investors.

Mike:
I didn’t want to say Rich Dad, Poor Dad. You know, everybody says that.

David:
All right, what is your favorite business book?

Mike:
I would say, Who Not How and Extreme Ownership.

David:
Extreme Ownership is the way to my heart. I love that book.

Mike:
Number three.

David:
Funny side note. There was a spelling error in Extreme Ownership in the version I had. I don’t know if it’s been corrected and I was talking to my buddy Kyle about, “Hey, did you see that spelling error?” And he said, “Well, no I didn’t, but I can guarantee you that if you told Jocko, he would take complete ownership of the fact that there was a spelling error in that book.” That was hilarious. All right, Mike, what are some of your hobbies?

Mike:
Well, like you heard a little bit ago, I got a three-month-old, and nine-year-old son busy doing a lot of the dad stuff, which I love. I like to travel, hike. Been doing a little bit of the Appalachian Trail and pieces. So I like that. When I get the chance, do some surf fishing.

Brandon:
Surf fishing, whats this?

Mike:
Yeah. Like out where the waves come in.

Brandon:
Oh, I see. Surfing and fishing. Because that would be pretty [crosstalk 00:51:42].

Mike:
No, no. That’s like a mountain Dew commercial there. Ride, board, and fish.

Brandon:
[crosstalk 00:51:49]

David:
Yeah. That’d be fun.

Brandon:
That’d be pretty good.

David:
Fish dragging you through the water.

Mike:
But kind of crazy.

Brandon:
Speaking of surfing, my daughter got her on a surfboard for the first time ever just a couple of days ago.

David:
Those are very cute pictures you posted.

Brandon:
It was like this little Cove that was totally protected and I would push it when a little wave came and she’d stand up. It was great. So anyway, I’m excited to get her and she ended that with like, “I think I’m ready for a bigger wave beach.” I’m like, “Oh, right.” So anyway, I’m excited. All right. Last question from me, Mike, what do you think separates successful real estate investors from those who give up, fail or never get started?

Mike:
Talked about it a little bit, but I think whatever reason you’re doing this, keeping that promise with yourself and just realizing things are going to come up. COVID is going to happen. Life’s going to happen. Tenants aren’t going to pay. Appraisals will be low, whatever, all those things are going to happen, but you just got to keep focused on why you’re doing this and realize nobody’s going to show up and make it happen for you. So you gotta just do it if you want this thing to be successful. Because if you’re going to look for excuses, it will not take you long to find one. So it’s where I would say it’s up to you.

David:
It’s very similar to the risk conversation we had. If you look for risk, you’ll find it. If you look for excuses, you’ll find it. If you look for extreme ownership, you’ll find it.

Mike:
There you go.

David:
All right. Mike, tell us, where can people find out more about you?

Mike:
I’m on Instagram, Facebook, the investing fireman, or one of those places reach out to me and I try and get back to every single person that contacts me. If I can do anything for you, let me know.

Brandon:
And did you say it was a First Responder Financial Freedom? What does that, is that a website or a Facebook group or what that?

Mike:
It’s just a little Facebook group I started. So it’s got firemen and cops from east coast, west coast, all over the place and we just get on there. Usually, we’ve been doing this thing every Friday. We get on and solve the world problems. We say, so we’ll be talking about all sorts of different aspects of investing.

Brandon:
Awesome man. Well, we’ll link to all that in the show notes at biggerpockets.com/show482. Everyone go check out all that stuff there or reach out to you directly, and appreciate you, Mike, thank you so much for joining.

Mike:
Thank you for having me.

Brandon:
And that was our conversation with Mike Webb. I love that conversation. Everything from the hiring, to the working a job, to the risks and everything we covered in there. Mike’s a good dude and he’s just gets how to build a real estate business, which is awesome.

David:
He’s not doing anything that is reinventing the wheel. He’s not doing rocket science. The business Mike put together is based on a partnership with a real estate agent who understood acquisition and disposition and putting a meetup together where they can get deal flow. This is not complicated stuff and Mike just did the simple.

Brandon:
Better. Yep. Very much. So, very cool. Hope y’all enjoyed today’s episode, and again, if you have any questions or comments about the show, you can leave them in the comments. If you’re watching this on YouTube below, and if you’re watching this on YouTube, make sure you give the little thumbs up button. Subscribe to our channel if you haven’t yet, that just helps us reach more people because YouTube is like, “Oh, this is a popular video.” And you can leave comments below there or if you’re listening to this right now, you can go to the show notes page at biggerpockets.com/show482, and you can leave your comments down below there and we’ll have my check-in and respond to your questions if you have more for him. So that’s today’s show. Last reminder, go pre-order the Multifamily Millionaire, Volume I and II, and get some goodies. Biggerpockets.com/store. All right, David, you want to get us out of here?

David:
Oh, one last reminder. Go follow Mike @theinvestingfireman on Instagram. And while you’re there follow Brandon @beardybrandon and me @davidgreene24.

Brandon:
You don’t want to do that.

David:
Yeah. Actually, unfollow Brandon and follow me because he’s got three times as many followers. Don’t do that. Brandon puts really good stuff out there. Go look at some videos of him teaching his daughter, how to surf. That was adorable.

Brandon:
Well, thank you. Let’s get out of here.

David:
All right. David Greene for Brandon, the surf coach Turner signing off.

Speaker 3:
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