Leukemia & Bankruptcy to Retired with 250 Units in 7 Years

Brandon:
This is the BiggerPockets Podcast, show 521.

Jeffrey:
The Moment you take responsibility for everything in your life is the moment you can change anything in your life. Now, I love that quote, it’s radical responsibility. It’s not my fault that I got leukemia, but I still had to take responsibility for it. And I think that that’s applied to real estate is, yeah, stuff’s going to happen. And same with good and bad days, good and bad stuff’s going to happen to you no matter who you are, no matter what you do.

Speaker 3:
You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you are here looking to learn about real estate investing without all the hype, you are 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, host of the BiggerPockets Podcast, here with my co-host. Mr. David “No Bad Days” Greene. What’s up, man? How’re you doing?

Dave:
There you go. I’m good. I’m actually in Denver at BiggerPockets headquarters right now recording the podcast from ground zero.

Brandon:
Fancy. And I’m actually not in Denver, which is weird that you’re there and I’m not. But I came back home. But you and I were hanging out this past few days, it was amazing. I love hanging out with you, dude. I don’t know, whenever we get to hang out, I just walk away so refreshed. You’re a good soul.

Dave:
I appreciate that, because I was about to say the same stuff about you, but now I will look like a d-bag if I do that, so I will just accept the nice things you said about me and tell everybody that if you ever get an opportunity to hear Brandon speak and you don’t do it, you will regret it for the rest of your life.

Brandon:
Mutual admiration society. Thank you dude. Yeah, no really, it’s fun hanging out with you. And that’s that. I want to get into today’s quick tip.

Dave:
Quick tip.

Brandon:
You know what, today’s quick tip, I’m going to keep it kind of, I don’t want to say light, but I’m going to keep it non-tangible, and that is, adopt the attitude that our guest today has. That’s all I’m going to say. I’m going to let you listen to the show. But adopt this attitude and your life will be changed. But speaking of today’s show, we have Jeffrey Holst. Jeffrey is a real estate investor in the Chattanooga, Tennessee area, who went from being bankrupt, getting leukemia, all the way to having hundreds of rental units and killing it. And I would say it’s largely because, if not entirely, because of his attitude that you’re going to hear more about later. So make sure you listen for that.

Brandon:
You’ll learn a little bit about medium multifamily, kind of like the in between large and small, you’re going to learn about this crazy cool strategy that we actually name right on the show where he utilizes a combination of three different creative strategies to pull off a lot of no-money-down stuff, and you can start using it right now. If you’ve got no credit, like he did, he had no credit when he started and he couldn’t buy stuff or no income, no money, this thing is phenomenal, I think you’re going to like it.

Brandon:
He talked how he uses partners a lot, this no-bad-day attitude, which you could adopt today, I hope you do, help you have a little better life. And really, we go into some steps for understanding your market like, how do you know what a good market to buy is? And Dave, you and Jeff go real in depth on that topic. That is one of my favorite things we talked about today. So all that and more coming. All right. I think that’s all we got. It was a phenomenal show. So I’m excited to let everyone listen to it. Anything you want to say before we jump in?

Dave:
Today is one of, I think, the best shows we’ve ever done of taking the mindset stuff that Jeffrey talks about, and combining it with practical application within real estate.

Brandon:
I agree.

Dave:
So the whole win-win, take what you have and make more of it, Jeffrey did a really good job of taking that concept and applying it to raising money, to making it a win for his investors, to structuring deals that were a win for everybody, which just made his own job easier when he scaled his portfolio. So I think that that’s a really interesting thing to pay attention to, is as we talk about the mindset that Jeff has that allowed him to get to where he is, there’s some very clear, practical ways that you can apply that within our specific world of real estate investing.

Brandon:
Perfect man. Perfect. Well, with that said, let’s jump into our interview with Jeff Holst. All right, Jeff. Welcome to the BiggerPockets Podcast, man. Awesome to have you here.

Jeffrey:
Thanks. I appreciate it.

Brandon:
Yeah. So let’s get into your story. What were you doing before real estate?

Jeffrey:
I was a bankruptcy attorney.

Brandon:
A bankruptcy attorney?

Jeffrey:
Yeah.

Brandon:
Sounds thrilling.

Jeffrey:
It’s an interesting field, for sure. It was 2008, ’09, and ’10 that I was doing that, so it was probably the best possible time in the world to be a bankruptcy attorney.

Brandon:
Yeah, that sounds like a pretty good time. So are you still doing that right now or that’s the old you?

Jeffrey:
Yeah, that’s the old me. I haven’t practiced law actually since 2010. I actually was diagnosed with leukemia in 2008, and it kind of distracted me a little bit, as you might imagine. And what ended up happening is, I had another attorney that worked for me and he quit a week before I got diagnosed, which was bad timing. So we went from two attorneys to zero, literally like overnight. And as a result of that, I ended up going personally bankrupt in 2010. I didn’t really want to do that work kind of anymore after going through that myself.

Brandon:
What led to that original bankruptcy? I thank you for talking about it here. So what led to that?

Jeffrey:
Well, it was a couple things. One, I didn’t start investing in real estate soon enough because that would’ve supported me when I couldn’t work, but I had the small firm and my overhead was about $6,000 a week. And we went from making 10,000 a week to zero right away. And so instead of making four, we were going negative six every week. And I did that for months and months and months, and that’s what caused it.

Brandon:
Dang. Man. And leukemia is no joke. Did you have to go through treatment for that, I’m assuming, and all of that?

Jeffrey:
Yeah. I actually still technically have leukemia. It’s called chronic myeloid leukemia, and it’s treated by a one-a-day oral chemotherapy. It’s like a daily reminder that I might die one of these days. It’s pretty fun.

Brandon:
Well, nothing like a daily reminder that you’re going to die, it spur you onto some real estate. How’d you even discover real estate? Why real estate? What was the build up to that?

Jeffrey:
I’m actually a really weird guy. So when I was like 14, 15, I would sneak out of my bedroom late at night and watch nefarious television by which I mean Carlton Sheets, No Money Down infomercials. I literally was that guy. I was like 14 and I’m going to sneak out of my room and watch how to buy real estate with no money down infomercials.

Brandon:
That’s funny.

Jeffrey:
And so I was always interested in it. My parents had a four or five rentals when I was growing up. So I think I always had a little exposure to it and that definitely helps pique the curiosity.

Brandon:
First deal, here we are 2010, I’m assuming its after that or was it before that you got started?

Jeffrey:
Actually, when I was in law school, I met this guy who was flipping houses in Detroit and he was doing pretty well and he was paying for law school by flipping houses. And so I did actually do one flip when I was in law school, and by do a flip, we bought a house for like $4,500 or something like that, and sold it for 8,000. So it wasn’t a huge amount of money, but when you’re not making any money and living on student loans, an extra two grand for your share of profit, it was pretty good. So that was my first deal. That was like 2005 or ’06. But then in 2011 after I had quit practicing law, I took a job, I moved from Michigan to Chattanooga. And when I got down here, I thought, “I got to do something in case I can’t work.”

Jeffrey:
And so I just said, “Well, what do I know makes money no matter what?” And the only thing I could think of was real estate. So I just started buying real estate. But it was challenging because I didn’t have any credit or any money. I actually had a negative net worth because I had 100,000 in student loans that didn’t get discharged in bankruptcy. So negative, 100,000 net worth and no money, I had to be a little creative.

Brandon:
Let’s walk through the very first one you did. I want to get a little bit of your mindset that you’re like, “I got no money, I’m just going bankrupt, negative net worth, I’m going to go invest in real estate.” How did you even get that process started and what was the very first deal?

Jeffrey:
Okay. So the first deal I did was actually a condo, and it was with the same guy that I met in law school. I started saving money right away. I got a pretty good job, that’s the nice part about having a lot of education, I have an MBA and a law degree. I got a pretty good job, and I didn’t have really any consumer debt. So I just had my student loan and a rent payment because I lost my house to foreclosure during the bankruptcy. So I just started saving my bonuses. So I had saved up like 17 or $18,000. And we bought this condo for $30,000 for cash, and it was a bank-owned foreclosure.

Jeffrey:
And remember, this is 2011, bottom of the market. It had been $100,000 condo a few years earlier. So we just knew it was a good deal, but I still had to put in like $17,000 out of the 20 I had to my name. And my wife said to me, she said, “Listen, if this doesn’t work out, you can never buy real estate again.” Fortunately, it did work out, so it’s fine. And we actually still own that condo today, it’s probably worth about 150, something like that now.

Brandon:
Wow, wow. Okay. So how did you even buy it? You had no credit, you said, so how were you able to buy it without the credit?

Jeffrey:
Like I said, I saved up about $20,000.

Brandon:
Oh, that’s right, your partner.

Jeffrey:
And my partner in that deal, he also had a little savings, so we actually paid cash for it. It was 30,000. We started an LLC and we each put in $17,500. So I went from having 20,000 savings and the negative net worth to having $2,500 like overnight. So my wife was not super on board, but she’s a saint, so she let me do it.

Brandon:
So what was the plan? You’re like, we’re going to rent this thing out, make a few hundred bucks a month in cash flow,” and that was the plan?

Jeffrey:
Yeah. I thought about it quite a bit. And I’d been reading about real estate and watching infomercials for 15 years at that point, so I had the idea that it was more of, yeah, it would pay for itself, but more, it was an appreciation play. It’s in a really good area. And we knew that the market was kind of goofy at that point. And I was just very, very certain that there buying opportunities in 2011, just because I had been paying attention to the market for as long as I had. And actually, as a bankruptcy attorney, I was exposed to a lot of real estate investors, and a lot of people that were going bankrupt because the real estate market was crashing.

Jeffrey:
And I was looking at it, thinking about it quite a bit before I quit practicing law. So I had really paid a lot of attention to that.

Brandon:
Yeah, that makes sense. Keep going. This is a good story. So where’d you go next? What’d you buy?

Jeffrey:
You had asked about the mindset, because that’s actually the harder part. It’s one thing to just find a deal and go buy it when you have the cash sitting in the bank to do it, but it also was very scary. Everyone’s first deal is terrifying, but in this case, I had just gone through bankruptcy so I really didn’t have the option of going bankrupt. I didn’t even have a safety net, there was nothing. If this didn’t work out, I was just out of luck. So I just said, “I got to do this.” That’s actually, I think, why I partnered with my one partner in that deal, is because I wanted to find someone that already he was doing the kind of thing I wanted to do and freeload off of his knowledge.

Jeffrey:
And it’s been a really good strategy. We ended up buying another duplex in the same building about two or three months later. This was just dumb luck on my part, but we named our LLC after the address of the building and this condo actually there’s like 20 units in the building, and they’re like 123 main street, one, two, three, four, five, etc. And so we had bought number 10, and the number 14 came available. So when he went to buy it, I said, “Well, we already have this LLC that has the name of that address in it, we ought buy it together, and I didn’t have any money left.

Jeffrey:
And so he ended up actually loaning me the money for my share of that from his personal resources. So I was able to get my second deal, essentially $0 down like that. And then it got a little trickier, because I still didn’t have any money and no credit. So I found a private money guy who was a relative of mine, and I said, “Hey, we’ve got these two paid off condos and they’re going well, they’re cashflowing a few hundred dollars a month.” Actually, they were cashflowing pretty well because they were paid off.

Brandon:
Yeah, no mortgage there.

Jeffrey:
It was like 800 a month or 900 a month, something like that. I said, “Why don’t you give us a small mortgage on each one and then put in some of your own money and we’re going to go buy this duplex. And it was like down the street a little ways. And I think it was like $75,000. So we got $25,000 mortgage on each condo, and then this other investor put in 25,000, and we each put in 25,000 to buy this duplex, again for cash, because this is 2011 and the market was different than it is now. We actually still own all three of these assets, and that duplex is on a double lot and we ended up later buying the one next to it. And I think the four lots together that we own are probably worth like close to a million dollars, just because the market has been insane the last few years.

Brandon:
Can we dig in a little bit to the mindset of that private lender? How did you approach them? Why do you think they said yes? Can you talk about that a little bit? A lot of people are thinking, “Well, that sounds great, but I don’t know anybody that’s a multi-millionaire in my life to give all that money.” Is that who this person was, super rich, or?

Jeffrey:
Well, he had $75,000 sitting around, so he at least had that much, which was more than I had at the time. It certainly seemed rich to me. I don’t think he’s super rich though, although he did loan us a fair amount of money over years. But look, when he did that deal, he got 6% interest on his $50,000 that he had put on the condo loans, and then he got a third of the equity in the deal that we were doing. And it was a deal that made good sense, it going to be a free and clear duplex, it was going to cash flow like $1,000 a month. So he’s looking at it and going, “Hey, I’m going to get 6% on this 50,000, and my 25,000 is going to have some equity upside and also going to give me a few hundred dollars a month in cashflow.”

Jeffrey:
So it was actually a really good deal for him. And I think when you’re trying to deal with private money lenders, the secret is to think about it from their perspective, like, what would entice you to make that deal? So I literally just said, “Hey, like if I had $75,000 and someone proposed buying this duplex, how would it be attractive to me?” Because our original plan was, we’re just going to be like, “Hey, why don’t you loan us $75,000 and we’ll pay you 6% interest.” And he was like, “I don’t know, inflation. I’m not sure.” And then I was like, “Wait, wait, I got it. This is what we’re going to do. We’ll give you some collateral, the condos that were paid off, and then we’ll also give you some interest on the money loan, and we’ll give you a chance to participate in the deal.”

Jeffrey:
And that actually ended up being one of the smartest things I ever did because the same guy loaned us about $700,000 over the next five years and never had collateral again after that. It was always 6% interest to the company that the three of us owned together. He just loaned the money to the company and we’d go buy something for cash.

Brandon:
That’s cool.

Jeffrey:
Yeah. And when you pay 6% interest only, it sounds like a lot now, but back in 2010, ’11, that was a fair rate. But even still, it’s a pretty fair rate for private money, people pay a lot more than that.

Brandon:
Yeah. I love that you put yourself in their shoes and you’re like, “What would make this attractive for them?” And so many investors, I think when they get started, they’re just thinking, “Me, me, me, me. How do I get this? And why can’t I find an investor to give me a 6% loan?” It’s because 6%, it’s not that high, you can probably get that in the stock market on average. Now, granted, back then nobody knew what was happening to the world. But you give equity, you gave some whatever collateral, we call that oftentimes cross-collateralization, a big fancy word. You put the other properties that you have maybe paid off or you have a lot of equity in it, you put those up and say, “Hey, if something goes wrong, you can take this one as well.”

Brandon:
Yeah, that’s smart, man. Do you still do that today, that kind of stuff? Partnerships and all that.

Jeffrey:
I do. In fact, I was just having this conversation with someone yesterday. I have never done a deal without a partner.

Brandon:
Really?

Jeffrey:
Yeah. Several times I’ve had smaller deals under contract and I was going to buy them, and then at the last minute I was like, “Eh, I think I’ll bring someone in on it.” Because what happens is, just the other day I had this duplex, it was still under contract actually, and I was going to buy it, and I’m like, “I’m finally going to buy something on my own. 250 units.” And I’m like, “I’m excited about this duplex because it’s going to be my own deal.” And I was talking to a friend of mine about it that is a really smart guy, and he’s always wanted to invest in real estate. And he’s like, “Man, I wish I could find something like that.” And I was like, “All right, I’ll split it with you.”

Jeffrey:
Because like I really want to help people get into real estate, and he’s a friend of mine, so I was like, “Well, we’re just going to split it.” So again, another partnership has been born.

Brandon:
That’s cool. All right. If we can only move. Why don’t we speed way forward and go to the end of your story and then we’ll come back and fill in the blanks. So what are you at today? What are you doing today? What’s your portfolio look like? And what’s your business like?

Jeffrey:
Yeah. I’m mostly in multifamily now, and I don’t mean duplex multifamily, I mean like a mid-sized multifamily. I target 10 units to like 50 units. So we’re at about 250 units, mainly those types of buildings. I bought 60 units so far this year, and we’ve got another 120 under contract. And we do some of that through JVs. In fact, we bought a 16 unit this year using the exact same strategy that we used back for the first duplex. It was this, have somebody put up all of the money, actually, and get interest on that, and they loan it to the company that we formed, and then we each own a third of it together.

Jeffrey:
So we did that exact deal. I’ve tried to think of a creative name, because you’re so good at that, like BRRRR and stuff. But I was talking to Matt Faircloth about this a couple of months ago and he’s like, “You should ask Brandon. Brandon will come up with a name for you for this structure.” Because he was like, “I’m the private money guy and I’ve never even heard of anyone doing it like that.”

Brandon:
That’s funny. I got to think on that one. Let’s go through this strategy real quick. So the guy or the gal, whatever, the partner lends the money for the down payment and the repairs and all that stuff that you need to the LLC, the LLC then takes and buys the property, and then you just split everything equal partners?

Jeffrey:
Yeah. Or whatever percentage we negotiate.

Brandon:
Or whatever percentage.

Jeffrey:
So depending on how much money it is. We’ve done this where somebody might get, if they didn’t want to be on the bank loan, we can keep them under 20% equity, they don’t have to sign the guarantee on the loan. Sometimes we’ll give them like 15% and a little bit more interest or we’ll give them a third and a little bit less interest. And it’s all negotiable, but it really is like a combined debt equity play. And what I learned is, the banks don’t care, they just want to see the money comes from the partnership group. A lot of people are like, “Well, banks won’t let you do it if you don’t have skin in the game.” And it’s like, “Well, we do have skin in the game. The skin in the game is our other partner’s equity.”

Brandon:
Yeah. That’s awesome. It’s a combination. I don’t have a good name for you, but it’s a combination of different strategies, you’re doing a little bit of private money, a little bit of partnerships, and combining it together. In the book on Investing in Real Estate With No and Low Money Down, the longest book title and history, I have a whole chapter called Creative Combinations. And that’s because the best no money down deals or low money down deals are typically not one thing, it’s usually two or maybe even three. You can buy in that strategy with the BRRRR strategy maybe. And now you can build some massive equity in it. You got three different strategies all in one. It’s cool. It’s awesome.

Jeffrey:
Exactly. And then we BRRRR these deals too, because their value add multifamilies to them. What we do is we’ll actually BRRRR the deal and pay back our investor all of his capital, eliminate that interest payment, and then keep the property for the three of us.

Brandon:
That’s just so smart.

Jeffrey:
That’s worked out pretty well. It’s allowed me to buy a lot of real estate with very little of my own money involved.

Dave:
Jeffrey, when you look at the numbers on some of these deals after you refinance out and you pay back the people that you borrowed money from, what’s your typical ROI that you’re seeing on most of these deals?

Jeffrey:
It depends on if you’re looking at my personal ROI or the ROI for the deal. If it’s my personal, it’s like sideways, it’s infinite return because I didn’t put any money in, that’s my favorite. One of my partners, when I explained this strategy to him, he was like, “We need to name our company Sideways Eight. And I was like, “I’m not doing that.” So for us, it’s really high, but for the investors, they’re usually looking at… Because they’ll get 6% interest on their money, and then they’ll get paid off in like 18 or 24 months, and then they get the equity upside.

Jeffrey:
So it’s really hard to count an IRR unless you’ve actually liquidated the asset and we almost never sell anything, but the last one we sold, the investors, there was two guys that put up the money on that one. They made, it was like 27% annualized return over a two-and-a-half-year period. That’s, I think fantastic return for them. And then of course our return is infinite. I think I put like $130,000 in profit to myself on that deal and had no money.

Brandon:
I’ve got a name for it. I’m going to give you two options, you tell me what you like better. Because we like alliteration, so it’s not an acronyms, it’s illumination. There’s the infinite investing strategy, infinite investing, just like the Sideways Eight, so the II, or we call it the triple threat, which is actually a jujitsu move. But threat is that the three things, the private money, the partnership and the BRRRR. Wrap it together, it’s a triple threat. That’s how you do no money down.

Jeffrey:
Those are both solid. I would have to go as infinite investing though, I like that, because of Sideways Eight. We should just call it like Sideways Eight Investing.

Brandon:
Sideways Eight is not bad, I just wish that there was an alliteration in there because people remember the-

Jeffrey:
My partner’s going to be super Joe if we call it Sideways Eight though, because he wants to name his company that.

Brandon:
It is pretty good.

Dave:
Sideways Seven, and just drop one of them.

Jeffrey:
Yeah, yeah. Sideway Seven, right? It’s not quite the same one. That’s like a hockey stick, I think, or something like that.

Brandon:
Maybe there’s like an E word for eight, or either an A word or an E word instead of sideways, I don’t know.

Jeffrey:
Or could go like the old school weatherman thing and call it like ESPN Ocho, which is called like Ocho Investing.

Brandon:
Ocho investing. That’s not bad. ESPN Eight, The Ocho. Yeah, that’s great.

Dave:
Well, I was going to ask, you said there’s three ways that you’re securing their investment. The first is you secure it with the property, the next is they get a fixed return of 6% and then you will let the guy participate in the deal. Is that still basically how you’re structured now?

Jeffrey:
Yeah. I do some traditional syndication also, but again, smaller deals. My strategy has been pick a market that I like, and I’m in couple of markets, Chattanooga, still in Metro Detroit, not in the city though, but in the suburbs. So pick markets that I really understand and like, and then target stuff that other people aren’t targeting. And I find there’s like a soft spot in the market between like about a million dollar minimum purchase price to like about four or five million, the five million and up you get all the big syndicators are jumping after it, and under a million, you start competing with like mom and pop people.

Jeffrey:
Actually, one of your previous guests is in Chattanooga, and he said there’s only three people in Chattanooga that do what I do and I’m one of them. So I get it, he’s right, there’s only three of us.

Brandon:
I call it the medium multifamily, medium multifamily. Because they’re like small multifamily everyone talks about, and then large, that’s very much medium multifamily, another alliteration for you there. In my world view of me dealing with these things, it’s incredibly challenging at times, because you’re not big enough to get the massive economies of scale, but it’s incredibly rewarding if you figure out how to manage them right, and I want to go into that here in a minute and figure out how you’re able that. Because I’m in a bottom, there’s always a headache for me in that size.

Jeffrey:
Oh, you’re going to like my strategy on that actually.

Brandon:
Yeah, I’m excited. I’m excited to hear this. So I love it because, again, it’s bigger than most newbies can get in and do. You’re not competing with 99% of people listening to the show because either people are way above that or below that, so that’s genius. And again, understanding the area and having some good system for management. So yeah, that’s cool. And 250 units and 60 so far this year, you’re killing it on this. By the way, I’m changing my mind, I like Sideways Eight Investing. I think I’m going to go support that one.

Jeffrey:
Sideways Eight, okay.

Brandon:
He’s right, it’s not an alliteration, but it’s clever, I like it.

Jeffrey:
But we have to credit my partner then because he’s really the guy that came up with it, and he’s actually got the best name in all real estate, his last name is Leverage.

Brandon:
Really? No way.

Jeffrey:
Literally, Leverage is his name. So that’s like the ultimate leverage is Sideways Eight. So Brian, thank you for that-

Brandon:
Brian Leverage.

Jeffrey:
… we’re going to go Sideways Eight Investing. Yeah.

Brandon:
We could just call it The Leverage Investing Strategy.

Jeffrey:
Yeah. We call it Leverage Investing. It’s solid.

Brandon:
Yeah. That’s pretty solid. Leverage, who’s that? His parents knew what he was going to do. I guess it’s not really his parents, his great, great, great, grandpa knew what he was going to do.

Jeffrey:
No. In Tennessee, it’s spelled a little different, it’s like reg instead of lever-age, but it’s close enough.

Brandon:
Well, close enough. All right. Let’s talk about how you’re able to take down, not necessarily buy, because we get the Sideways Eight investing strategy now or the Infinite investing. Isn’t Infinite investing too much like infinite banking and everyone has-

Jeffrey:
It is. It’s too much like that. We’re going Sideways Eight investing.

Brandon:
Sideways Eight. Side Eight. You could do Side Eight, it is a little shorter. Side Eight.

Jeffrey:
Yeah. Side Eight is good too.

Brandon:
That sounds like Side Eight.

Jeffrey:
Yeah. It’s better than Side Ocho, I think,

Brandon:
I agree. The Side Eight Investing. I like that a lot. We get how you’re buying it, but how’s that model work? How are you managing those size?

Jeffrey:
I almost feel bad saying this because my partners will be like sad when they realize the secret, but I’ll tell you anyway because I like you guys. I only pretty much partner with property managers. So my friend Brian who came up with Side Eight Investing, he’s a property manager, owns a property management company. And then my partner from law school all the way back in the day, when he got out of law school started a property management company, and so I partner with him. And those are my two primary partners.

Jeffrey:
Now, I do have a lot of people that come in and out of deals with us, but those are the guys that I do the majority of my investing.

Brandon:
That’s smart. That’s really smart. I guess in a way, I did that too. Brian Murray who is my partner in Open Door Capital, he owns Washington Street Management. And so when we bought all these mobile home parks, 2,000 in last year, it was just like, “Take care of it.” And he just took care of it. And now we’re bringing it in house, but with Brian.

Jeffrey:
Well, I was thinking about that actually earlier, you’re much smarter than me because you are-

Brandon:
You too.

Jeffrey:
No really, because you didn’t go to law school. That was a smart move. They know you were thinking about it and you didn’t.

Brandon:
Oh yeah. I was going to. There you go. I’ve probably heard from 20 attorneys in my life when I say, “Oh yeah, I was going to go to law school.” And they’re like, “Oh, you are so much smarter than me.” Because I’ve never heard a lawyer say, “I love being a lawyer. It’s the best job ever.”

Jeffrey:
Yeah. I always say I’m a recovering attorney. And then I actually make it a life mission to talk attorneys into quitting practicing law. I’ve done it through now.

Brandon:
Yeah. That’s funny.

Dave:
That’s a nice little side project there I want to ask you about, many people did take that road of going to college, racking up a lot of student debt. Obviously, a degree in law’s going to be better than some of the things that people get. And it could be discouraging to think, “Oh, I screwed up. I should have went into full-time real estate, instead I went in, I did this.” But you really took your knowledge of, you were a bankruptcy attorney and I’m sure you saw what happens when assets get divvied up, and you took some of the connections that you have in that world and you’ve used them to create partnerships.

Dave:
So what advice do you have for people that are, they’re already a doctor, they’re already an attorney, they have a good job, they’re making good money, but they also recognize, “I’m going to be in this thing, this rat race forever.” How do they use the skills they have from the career they started to amplify the success they can have with real estate investing?

Jeffrey:
Well, first of all, law is actually a great thing if you want to get into real estate, learning about contracts, learning about mortgages, securities, things like that is super handy. But I think in Kiyosaki’s Board Game, you get these cards and you’re assigned a different occupation based on your randomly at the beginning of the game. And one of the things that I always found interesting is it seemed to me that if you were a mechanic and had really low expenses, it was pretty easy to win the game, get out of the rat race, and it was a little bit harder if you were a doctor or a lawyer.

Jeffrey:
But if you did manage to win the game as a doctor or a lawyer, because your expenses were higher, you were doing awesome. So what you have to do is you have to leverage wherever you’re at. So if you’re a doctor and you have high income, you have the opportunity to invest in other people’s deals, you’ve got cash, so you have opportunities that people like me when I was… It’s ironic that I had low expenses. The reason I had low expenses is because of falling into this bankruptcy trap. Otherwise, I might never have been able to do what I did.

Jeffrey:
In fact, I have this thing where, when I was 17, I said, “I’m never having another bad day.” And I got diagnosed with leukemia at 30 and people would come into the office and they’d say, or they came into the hospital and say, “Oh, you must be having a bad day today.” And I was like, “No, I didn’t find out until 10 o’clock at night, my day’s going pretty well.” But I even have my coffee mug, No Bad Day. So I just use all the time, constantly talking about not having bad days. But the thing is, somewhere in the world right now, someone’s having the best day of their life. Somewhere in the world, someone’s having the worst day of their life.

Jeffrey:
So objectively, the day is neither good, nor bad, it’s really just how you perceive it. So when I say, “That day was a good day for me,” it felt that way at the time, and then in retrospect, honestly, if I hadn’t gotten leukemia, I might’ve still been playing this someday I’m going to invest in real estate game and I wouldn’t be able to do all the amazing stuff I’ve done the last few years. Right before COVID, I climbed to Mountain Kilimanjaro. I took a month off and went to Africa in February of 2020. And this year, I went to Puerto Rico for a month.

Jeffrey:
People don’t get to do that unless they developed finding until freedom and real estate’s a great way to do it, and I would’ve never done that as a lawyer. So I would say, to answer your question in a roundabout way, take advantage of the situation you’re in and recognize that you have to take responsibility for everything that came before and just move forward.

Dave:
Well, I think if you’re asking yourself, is this a good day or a bad day, it’s very funny you say that, because I literally just committed a week ago to never having a bad day. From now on, if I catch myself thinking that, I will do something to either see good in it or make good happen. And so I’m new on that journey, but I like that you brought that up.

Jeffrey:
25 years, man. It’s so possible to do it, but it doesn’t happen right away. I’m going to give you, I wasn’t going to go on to this tangent, but I need to tell you this, because it’s really important for you, is the first day that I said I wasn’t going to have bad days, I was in a dark spot. My parents were going through a divorce, I broke up with my girlfriend, but I was 17, so it seemed worse than it was. I actually went into the bathroom with a knife and I don’t know what I was thinking, but I put this knife on my wrist and I was like, “God, that hurts. I don’t really want to do that.” And I go, “You know, I live in America and a middle-class family in the suburbs, my life can’t be that bad. I’m young and healthy.”

Jeffrey:
So I’m like, “Today, I’m just going to decide it’s a good day.” And this is pre-YouTube, so I didn’t know what mantras or affirmations were and stuff. And I just said out loud, 10 times, today’s a good day, and the next day was not a good day. So I just kept doing that. And it probably took about a month of saying today’s a good day out loud. Every time I saw a mirror, every time I got in the car, every time I was in a room alone, pretty much anything I could think of to trigger that, I would say out loud, today’s a good day.

Jeffrey:
And then one day I walk into a 7-Eleven guy behind the counter says, “How are you doing today?” And I go, “I never have bad days.” I didn’t even think about it, it just came out from inside of me. And then I went, “Holy, I can never have bad days.” And the thing is, Tony Robbins talks about this, it’s the Reticular Activation System, you train your brain to recognize the familiar. And if you are used to seeing the positive and everything, you’re embracing that, you walk outside and the sun hits your face and you’re like, “That’s nice.” Stop for a second and say, “This is really nice. It’s a nice day.”

Jeffrey:
Or if your car starts go, “Hey, this is great, my car starts.” I know it sounds weird, but it rewires your brain and there’s science behind this. I’ve read books on it and stuff now, but back in the day, I didn’t know it, I just did it. And it’s the greatest decision I ever made because it allowed me to do things like when I got sick, I thought I was going to die. You have to understand when I got diagnosed, my white blood cell count was so high, the nurses, not the doctors because they didn’t have official diagnosis were treating me in a way that knew I was going to die.

Jeffrey:
In fact, I knew one of the nurses because she was a childhood babysitter of mine and she’s like, “I’m really sorry you’re here. This is really terrible.” And she’s all crying and stuff, and I’m like, “I’m actually really happy to be here because I haven’t see you in 20 years and that’s exciting for me because I only look for positive in everything no matter what.” But I think she thought I was in insane, literally insane. But again, that’s still one of the best days of my life. So the fact that I went through that day and felt positive about where I was, it allowed me to figure out what I needed to do to get healthy and stay alive, and now I’m here, 13 years later, it’ll actually be like 13 years next week, and no bad days for 25 years. It’s amazing

Dave:
Brandon and I talk a lot about the power expectations play in our lives. And I promise, I will relate this to real estate. The idea of a good day or a bad day is like you said, objectively, there are no bad days, it just depends where your expectation was. If you had very high expectations the sun hitting your face, it’s supposed to hit my face. You don’t look at that like a blessing. And it sounds like what leukemia did was it really lowered your expectations for what you expected out of life, you’re just happy to be alive. And so now all these things that happen, because very easy to have a good day.

Dave:
And these problems that real estate bring apart, they don’t really seem like that big of a problem compared to dying. And I think what I’m really getting at here is we all know if you want to make people wealth through real estate, you got to get into one deal, you got to get that first deal and it will all start to come together. But the expectations that you’re not going to lose money, it’s not going to be stressful, you’re not going to make a mistake, they’re so high when you’re new, especially when you’re listening to a podcast like this and it’s all success stories, Brandon moved to Hawaii, David’s had a successful career.

Dave:
Jeffrey here, he’s on the podcast talking about what he did. The expectations are, “I got to be that.” That is ridiculous. And so I really think that boundary is what stops most people from getting involved. And what you mentioned when you’re raising money is you’re actually just trying to set expectations with the person you’re raising it from, what do they expect? What return do they expect? What safety do they expect? And then how do I meet or exceed that expectation?

Dave:
I think Jeffrey, we’re going to get back into your story in more practical details of how you buy properties, but what I’d love everyone to hear is the reason you got ahead was that you had lower expectations for what the deal should look like, especially when you were new, you built momentum and then started to raise expectations on the deal accordingly, but that has nothing to do with being happy in life. You could make a bazillion dollars in real estate if your expectations where nothing is supposed to go wrong, my car is always supposed to start. It’s so hard to be happy.

Dave:
I just went through an experience when I did my TED Talk where my car didn’t start the day of the thing. And I feel like that was God’s way of reminding me, “Don’t expect everything in life is supposed to be easy, you just show up and you do your TED Talk and it goes great.” When those little things go wrong, it reminds you how fragile a lot of life is. And it makes it easier to be happy when your car does start. I think in addition to all the practical insight you’re giving us here, that might be the most powerful thing that you’ve said so far, was those lowered expectations made it easier to get going.

Jeffrey:
I’m actually super glad you pointed that out because that’s actually why I wanted to come on your show. The real estate stuff is cool, but there’s a million people that have a lot of real estate. I love real estate, like I said, I watched infomercials about it when I was 14, I’m a weirdo, and I would drive around when I was first 16, I’d see these big abandoned buildings and be, “Someday, I’m going to own that.” I’m glad I didn’t ever buy the big abandoned building, but that’s a different issue entirely. But that’s literally me, but at the same time, I was terrified to do it until I got sick. And then when I got sick, I was like, “Well, what do I have to lose? You can’t count on the future, you can’t count on your life.”

Jeffrey:
And I was looking at this and going, “Look, my wife, she helped support me when I went through law school, I owe it to her to make sure that if I die tomorrow, she’s fine.” So that was a big motivator for me, and you’re right, it was about changing my perception. I wouldn’t phrase it necessarily as lowering expectations, but when you said about starting your car, I’m glad you brought that example up because I use that a lot, when my car wouldn’t start, I would go, “I’m so glad that mechanics exist and somebody can fix this for me because I’m not a mechanic.”

Jeffrey:
So it was just about reframing whatever you were at. Actually Hal Elrod has this thing he says that the moment you take responsibility for everything in your life is the moment you can change anything in your life. Now, I love that quote, it’s radical responsibility. It’s not my fault that I got leukemia, but I still had to take responsibility for it. And I think that that applied to real estate is stuff’s going to happen. And same with good and bad days, good and bad stuff’s going to happen to you no matter who you are, no matter what you do, no matter what how good you are at what you do, good and bad stuff will happen.

Jeffrey:
Good and bad stuff are going to happen to your investing career, it’s going to happen in your personal life, but if you look at it and you say, “I’m going to focus on the positives and I’m going to do what I can to mitigate the negatives.” Buddha has this thing, I’m not Buddhist, but Buddha has this thing where he says, and it’s about worry, but I think it applies to almost everything in life, “If there’s nothing you can do about, it doesn’t help to worry about it. So you might as well ignore it.” And if there is something you can do about it, still doesn’t help to worry about it, you should just go fix it. I feel like that’s the strategy in real estate, some stuff you can do something about it.

Jeffrey:
Well, if you can do something about it, go do it. And if you can’t do anything about it, then just mitigate it to the extent you can and move on because you’re going to learn from it.

Dave:
So now that insight you have, that perspective you have, how would you say that has changed your strategy when it comes to both raising money, choosing what deals you’re going to buy, running your business in general?

Jeffrey:
The first thing is, and I call it the last life philosophy, it’s my last life, so I get to do this right this time, I think of it like this, one, I’m going to guard my time really a lot, a lot more than I could make more money if I wanted to, but I’m much more interested in setting up my deals in a way that I don’t have to spend a lot of time, day-to-day working on them. That’s not, I can never get to where I don’t pay attention to them or don’t care about them, because if I do that, then they’re not going to work out. I know this, but I can mitigate the amount of time that I spend on it. That’s the first strategy.

Jeffrey:
And then the second thing is, if it’s a really big problem, I have to see a clear path to victory or I’m not going to be interested in it. Some stuff it’s just too hard to deal with and sometimes you just got to cut your losses. I’m a big fan of selling your problem property. If you’ve got a property that’s bugging you and it’s causing you a lot of trouble, get rid of that thing, even if it’s your only property. It’s a lot easier when you have a bunch, but if you only have one, it’s still better to get rid of it than try to fix it, because I may sell it to one of you guys and you might have a different process that fixes it and it might be a great deal for you, it just didn’t work for me.

Brandon:
Yeah. That’s such a great principle.

Dave:
No one says that, but it’s so brilliant because the whole reason we’re buying real estate is to have a better life. It doesn’t make any sense if you’re doing it to have this big balance sheet so you can say, “I have another 50 doors.” This is how many doors I have becomes everybody’s metric, but 50 doors on the wrong property can be 50 headaches that you don’t need.

Jeffrey:
Yeah. And listen, I hear these people, and I go to these seminars sometimes and people are like, “I have 1000 doors.” And then you find out they’re a limited partner and they own a 10th or a percent or something. That’s cool, whatever. It works for them, it’s fine, but for me, if I was going to ask someone and I never would because I don’t think it’s anybody’s business really, I’ll be like, “Well, really how much money do you make? Are you paying your bills? And do you have to show up to work?” Because that’s the metric that matters to me. I think the secret to life is buying back your time as soon as possible.

Jeffrey:
I stole that from a guy I interviewed on one of my podcasts, his name is Dr. Tony Pinellas, but when he said that, I went, “Holy cow, that’s amazing. That is the secret to life. Buy back your time so you can do what you want to do with your time.” And then you can do things give more, help more people. You can’t do that stuff, if you have to struggle to pay your bills, you can’t help people. And the world, it does rewards value. The more value you give, the better off you are, the better off the world is.

Brandon:
What do you see is in the future for you? Where are you headed in the future? How big do you want to go now that you pay your bills, it sounds like, you got some money coming in, do you keep growing or do you go and shift focus?

Jeffrey:
A couple things. One, when I first quit working, I quit at 2017. So I literally went from bankrupt to retired in seven years, actually about six and a half. And my goal have been to retire by 40. So when I went bankrupt, I was like, “Wow, that’s not going to happen, I’m 32.” But I still did it, squeaked it in before 40. That was pretty cool. But I got bored really fast. I was sitting on the beach, actually was at a pool and I was reading Rich Dad, Poor Dad for like the 9,000,000th time in my life. And I was sitting there and I was like, “Well, other people should hear about this.”

Jeffrey:
So I started doing trainings and going to events and talking to people and just going to network stuff and telling people. And that’s when I got into syndicating. I didn’t really do it because I wanted to grow as much as I wanted to help other people get into investing. And that’s been an amazing journey in and of itself. It’s been a lot of fun.

Brandon:
What would you consider your superpower is?

Jeffrey:
I’m really good at structuring deals like the Sideways Eight thing, I forget what we were calling it already, Side Eight strategy?

Brandon:
Side Eight.

Jeffrey:
But no one else does that apparently except for me and the people I’ve told about it, but stuff like that, it’s comes from, I think, combination of being in a really bad spot and not having an option. And also having my background in law, to David’s point earlier, that’s really useful. And when you combine those things and you get a little creative, that really helps. So that super power, probably just taking complicated things, simplifying it in a way that people can understand it and projecting it out there to make it work for everyone.

Brandon:
I love it. I love it. And you said syndicating, so I’m assuming that you do more than just… you’re not just doing that Side Eight where you bring in three partners. For those who don’t know what that syndication is, can you walk through what that is and how your syndications typically look and what you’re buying there?

Jeffrey:
Yeah, sure. I’m actually buying the same kind of stuff. Now, this is very unusual for syndication. Most of the syndicators are pooling people’s money, because really what a syndication is, it’s like you just take a syndicate or a group of investors, you put their money together and you buy something. From a technical perspective, if the three of us go out and buy something, it’s a type of a syndication. But the kind that really matters is when you start raising money from passive investors, at that point, it becomes a security and there’s all sorts of legal implications to that, so people need to get good legal advice.

Jeffrey:
And I’m certainly not giving that right here, even though I maybe an attorney in some jurisdictions, but pooling money to buy deals. And so what I’ll do is, I might find a deal and I might just bought one, and so I don’t have any of my own cash and maybe one of my investors is like, “I can’t really take it down all by myself.” So we look at it and go, “Hey, we need a million bucks.” So we’ll get like 10 people to put in 100,000 each and then we’ll keep a piece of it for putting the deal together and they’ll each get a percentage of it for their investment. That’s really what a syndication is, and we still are targeting that.

Jeffrey:
Those are usually a little bit bigger, but it’s still that medium in multifamily, medium multifamily, 25, 30 units. So, that’s where we start on that. And we’ve done a couple of commercial buildings that way too like a strip mall and an office building. I don’t think I’d buy another office building. Fortunately we have it under contract to sell, so our investors are going to do well on that one, but I don’t think I’d buy another one at this point because their market’s goofy on that with COVID and everything.

Brandon:
Yeah. I can totally see that. Where are you buying at?

Jeffrey:
Those are both in Chattanooga. Again, another one of my core investment principles is, you have to know your market. If you don’t know what your market, that’s how you get an unfair advantage actually. When we talk about unfair advantages, if you can buy something and you know more about the market than everyone else or just in most people, you can, I think I heard David say this a long time ago on a podcast, if you can actually be the expert on a specific subset of your market, I can be the best guy at buying 10 to 20 unit buildings in Chattanooga, I know I can do it because there’s not that much competition. And then I get unfair advantage over the market because of that.

Dave:
Well, you’re about to have a lot of competition now that you just said that on the biggest real estate podcast.

Jeffrey:
That’s all right. I’m going to move and find a new market. It’ll be all right. We won’t tell.

Brandon:
Can you talk, and don’t mind the baby talking in the background. Hi wild man, what’s going on? Wild man just came in to say hi. But can you talk real quick about, when you say know your market, what do you mean?

Jeffrey:
Part of it is just you have to have, and I’m not expert, out of state investing like David is. So I apologize for if I simplify this, but the way I look at it is, I think you have to know enough about the market that you can see if a deal makes sense or not. You need to know what the rents are, you need to know what the trends are in that market. Because some things can look really good on paper, especially from the distance, and then you drive the market and you’re like, “Whoa, this neighborhood’s not as good as I thought it was.” So it’s about really just getting a deep breadth of knowledge about your local market.

Jeffrey:
I’m a big fan in local investing, but even when I do invest out of state and I invest in a few other markets now, I spend a lot of time in those markets. I invest in Michigan, but I’m from Michigan, to me, it’s not rocket science. The reason I pick the markets I’m in, I like the metrics, I like the growth. Like Chattanooga, I moved here partly because I knew it was a good market, but I didn’t buy real estate in Chattanooga from Michigan, I moved to Chattanooga and got to know it. And in fact, I took a job as an Uber driver so I could drive around and see where people that were riding in Ubers were getting picked up from.

Jeffrey:
And it turned out, these guys were getting picked up from apartment complexes. So I started seeing all these small apartment complexes and I was like, “Whoa, I didn’t know that was there, I didn’t know that was there.” And that stuff, that kind of knowledge is really helpful.

Dave:
But here’s the thing, Jeffrey, if I wanted to invest in Chattanooga, I wouldn’t have to fly there. I would just invest with you because you do know Chattanooga.

Jeffrey:
That’s my strategy in Michigan actually. I invest with my property manager friend that I’ve known for 20 years and I know he knows what he’s doing.

Dave:
And that’s why in the Long-Distance, I hammer how important your property manager is. They are not a person that collects checks and fills vacancies, they are a Sherpa that leads you through some of these areas because they know better than anyone. Brandon manages his own properties. He can tell you where he likes investing and owning and where he does not because property managers cannot avoid the pain of real estate investing. They’re the first people that hit it. I think that’s brilliant.

Dave:
This one other things that I use them for the most is their insight in a market, no one’s going to know it better. I just want to say, you’re making my point that you shouldn’t invest in market you don’t understand unless you have a person who you trust that does understand it.

Jeffrey:
Oh, I agree with you completely. That’s what I said. I simplified a lot more, but I actually think your solutions are very elegant because it is really about that team on the ground, and the property manager to me as the number one person on that team because they also can bring you deals. They know when people are getting ready to sell, they know what things have traded for, they know what rents are. So much knowledge in property management

Dave:
I’m going to tiny quick tip to what you’re saying. People don’t understand, there’s two reasons that people get into the property management business. The first is they want to make money, and God bless you for trying to make money in property management. They’re doing God’s work. It’s a very, very hard business to run a margins. The second reason is that they know they’re not going to make a lot of money, but they’re trying to get to the front of the funnel. They’re finding opportunities when the landlord doesn’t want to own the property anymore, they either sell it through that property manager’s real estate company, or they buy it themselves.

Dave:
And you hit the nail on the head, you find deals through property managers. And I probably shouldn’t be saying this because it’s going to hurt my own method in a lot of ways, but if you want to find off market stuff, that’s the number one best place to go to right now..

Jeffrey:
I 100% agree with that. And that’s why I partner with them because then you get to the front of the funnel, because you know if a property manager is also an investor and they almost all are, they still take the first crack at it. It’s when they don’t want to buy it that you find out about it. And that’s still better than waiting until it gets listed on MLS or something a lot of times, but it’s definitely good to be at the front of the funnel.

Brandon:
Yes, it’s really, really smart. I’ll ask you both good question, but I’ll start with you, Jeff, what would you recommend, for somebody listening to this show right now going, “Well, I just don’t know what market to go to once I pick that market.” Give me some tangible steps to learn that market. Should they become an Uber driver, drive around? Or what’s some tangible stuff they can do.

Jeffrey:
Well, I don’t think everyone’s going to do it the way I did, which is actually moved to the market and drive around as an Uber driver, but that does work.

Brandon:
It does. And you know what? It also shows, I just want to call this out, it shows a level of dedication that most people won’t do. They say, “I will do anything to be financially free. I will do anything.” “Well, move across the country and go to a market that’s amazing and then learn everything you can about it.” “Well, I’ll do almost anything.”

Jeffrey:
I had a really big advantage then I got sick and I thought I was going to die, so I was hanging and motivated, but try to avoid the chemo, that’s the first step to finding the right market. And then step two is, look for a market where there’s growth. One metric I think is really interesting, and one of the things I’m most happy about being in Tennessee forest, that we have a net migration of U-Haul Truck. So U-Haul publishes this thing where they say, “This is where the most U-Haul trucks go.”

Jeffrey:
And so as a consequence, if you want to move out of Chattanooga, super cheap to run a U haul, because they’re basically subsidizing you to move the truck away from here because they just build up here because people want to move here. So if you see U-Hauls building up in the neighborhood, that’s a good sign, but also job growth. This stuff you can buy the stats on this, job growth, diversity of employment and population growth, because at the end of the day, population needs to live somewhere, so that’s going to drive rents forever. If the population is growing, probably it’s going to be fine.

Brandon:
That’s so good. One of things you said earlier is something that I’ve been doing lately a few times, we had Feras from Disrupt Equity on the show back a few months ago maybe, I’ve partnered with Whitney Sewell who is another investor. So what we’re doing is very similar to what you’re doing in that I don’t know Houston and I don’t know Colorado market very well. So I’m partnering with these companies who are the best in that area, one of the best operators. And in the example of Disrupt and Feras down in Houston, they also are a massive property manager there.

Brandon:
And so it’s funny that you say that, because I don’t even know if I did it deliberately with the property management side of that, but it sure does work well, because if I can’t be the smartest one in the market, I’m going to find out who is the smartest one in that market and we’re just going to partner together. It’s a win-win.

Jeffrey:
And the thing is, I didn’t do it deliberately either. I like to pretend I did, but it really was, I knew these guys were doing a good job on stuff and I was like, “I want to be partnered with them.”

Brandon:
That’s what a lot of actually stuff, for example, my entrance in the house hacking, I had no idea that was going to be a thing or that people did that. In the very beginning, I was 21 years old, I’m like, “Well, I got to live somewhere. If I live in a duplex, I can make the mortgage from the other unit.” And then burrow was a complete accident, it was just me trying to flip a house, couldn’t sell it, so I just refinanced it. And a lot of the things in life, we may be looking back… There’s a great quote from Steve Jobs, it says, “You can’t connect the dots looking forward, you can only connect them looking backwards, so you have to trust that the dots will somehow connect in your future.”

Brandon:
And I’ve always loved that quote of, looking back, I can see all these things that makes me look really, really good, and David probably looks really, really smart when it comes to figuring out the long distance investing game and the BRRRR thing. We just do stuff, and then make mistakes.

Dave:
Literally, I couldn’t buy in California and I was like, “Well, where can I buy? I can buy in Arizona.” I didn’t even know you weren’t supposed to do that.

Brandon:
You do it.

Jeffrey:
That’s how I ended up with my Side Eight Investing, is I didn’t know, I was just like, “How do I do it? I’ve just got to do it. And this is the way that it works for me.” And I’ve been able to repeat that over and over, because that’s the one thing, when you find something that works, just keep doing it.

Brandon:
Just keep doing it.

Dave:
Do you hear that newbies? Quit overthinking it. The most successful people didn’t think enough, and that’s why they did well. I was just in Steamboat with Brandon at a GoBundance Event, and we were sitting and talking and I was saying, “You know, it’s funny as much real estate we own and we talk about it, we make our living off it, to this day, there’s still not a deal I buy that I don’t wonder, did I pay too much? Is this the wrong time to buy it? Is this a bad deal? What if it goes wrong? And there’s not a deal that I’ve bought that I didn’t look back and say, “I’m so glad I bought it. I wish I would have bought more.”

Dave:
It never goes away, you always have that fear that says, “Be careful,” because you can’t see how the dots connect. But when you look back, you always see how they connect. And so I hope that encourages the people that are listening and you’re looking at a deal and it makes sense, but you got that little thing going on in your head that’s like, “But what if?” And it’s bringing up ridiculous ideas. All of us, I would bet Jeffrey still has that when his buying, “What if I lose my investor’s money? What if it doesn’t work out? What if it has mold and I don’t know?” It never stops.

Jeffrey:
Yeah. And actually, I think if you don’t have that, then you’re not actually doing anything. I know that sounds weird, but if you don’t have any fear, then that means you’re not stretching yourself at all. And there’s something about just doing things that are a little bit hard, that’s where all the rewards come from. So if you don’t have any fear, then you’re probably not doing anything hard. And if you’re not doing anything hard, you’re working at McDonald’s flipping burgers for the rest of your life.

Dave:
As Brandon would say, so good.

Brandon:
I don’t say that. What? What are you talking about?

Jeffrey:
Look at me, I love McDonald’s. What can I say?

Dave:
Not McDonald’s, I mean the comment you made.

Jeffrey:
Oh, sorry. I thought Brandon was a big fan of McDonald’s. He doesn’t look a McDonald’s guy, but I know the mint Starbucks thing or whatever you do.

Dave:
Today, it’s a cappuccino from Akamai Coffee, is probably the greatest drink on the planet. So if you guys ever in Maui, Akamai Coffee cappuccino.

Jeffrey:
All right. I’m hopping a plane, I’m on the way.

Dave:
Anyway, we got to start getting out of here in a few minutes, but I just want to say you’re an inspiration. I love hearing your story, everything you’ve done, everything you’re doing, you’ve got so much to teach. So I hope people follow you, and we’ll ask you in a minute where they can. But anyway, I just want to give you just-

Jeffrey:
Thank you.

Brandon:
Good job, man, thank you. You’re awesome. David, any questions before we head to the famous four?

Dave:
I want to clarify the point you made that if it isn’t scaring you, maybe you shouldn’t do it. That’s a common thing, a lot of actors are saying that now, and it became kind of cheesy, but there is an element I think of really insightful truth in there. When I gave that TED Talk, I was talking about the way you build skills. And part of the talk was this idea, they talk about it in The ONE Thing in chapter two, that a one inch domino can knock down another domino that’s one and a half times bigger. And one of the ways we cheat ourselves in life is we stop going for bigger dominoes, we get comfortable doing the same thing.

Dave:
Brandon talks about just quit buying a single family house every time, you use the stack, you can get a one house, and then a duplex, and then a fourplex. And the fact that you’re trying to knock down something bigger than you did last time will absolutely create fear that maybe this is something you can’t do. And that stops a lot of people from moving forward, but really, if you ever want to be growing, if you want to get the best out of yourself, there has to be a point where you put enough weight on the bar that you don’t know if you can lift it or maybe you fail. You can’t lift it without a spotter.

Dave:
But I would say that probably the times where I need a spotter to help me lift the weight are the times I’m getting the strongest, pushing myself past what I could do and leaning on someone else. And it’s going to feel scary, but that’s why you should do it. You made that point, Jeff, and I don’t want to gloss over that because-

Jeffrey:
I think that’s right. There’s nothing wrong with doing deals that you’re comfortable with. Just to be clear, it’s okay, but for somebody like me, I want to be growing. If I want to grow, I have to push myself. The scariest deal I did is still the $30,000 condo that I would be able to do without even hesitating right now, because I’d be “Whatever.” But it was really scary because it was the first one. And so it does get easier. But every time I push myself just a little bit, it’s like, “Ooh, am I sure I want to do this?” Even moving to Chattanooga was like, “Do I really want to move to Chattanooga? Maybe I should just stick around, Grand Rapids is pretty nice.”

Jeffrey:
I think that’s true in everything in life, just push yourself a little bit, you’re going to feel that fear, and then you know you’re going in the right direction.

Dave:
That’s the hero’s journey. You don’t find the parts of yourself that are the best without going past what you’re comfortable with and it makes you dig deeper because you don’t have enough to accomplish what you’re trying to in the current version of you. Every time Brandon rolls jujitsu or I do, you’re reminded that you’re not good enough, and that you that you are right now cannot accomplish that task. And so it forces you to get a skill, get more in shape, learn something, improve yourself in some way. And literally, real estate is one of the easiest ways to force growth in your life because you just buy the pursuit of it.

Dave:
It forces you to realize, “I didn’t know as much as I thought I did,” or, “I need to live beneath my means and be a little better with managing my money so that I can have more in reserves.” I think that’s one of the reasons we’re addicted to it is because you can’t succeed in this without growth being tied to it.

Brandon:
Yeah. Really good stuff, man. Well, let’s head over to the last segment of the show. This is our-

Speaker 5:
Famous Four.

Brandon:
The Famous Four is a part of the show we ask the same four questions every week to every guest. Jeff, I know you’ve heard them before, so you should be ready for the Famous Four. Number one, you like that line?

Jeffrey:
I am ready, for what it’s worth.

Brandon:
Now I get, I’m a poet and I didn’t realize it. Number one, favorite real estate related book?

Jeffrey:
I know everyone says Rich Dad, Poor Dad so I’m going to skip that because that would probably be the answer. But I like the book, What Every Real Estate Investor Should Know About Cash Flow… And 36 Other Key Metrics by Frank Gallinelli.

Brandon:
Yeah. Frank Gallinelli. He was on our show years ago.

Jeffrey:
And I’m telling you, this book is fantastic. It breaks down every metric that I think about and some I never heard of. And it was recommended to me actually, ironically by, because I’m weird and I still go to school even though I work for myself, I took some online Harvard class and the professor was like, “You should read this book.” And I’m like, “Okay.” I read it, and I was like, “This is amazing.” I liked it so much, I made a YouTube video, written a book review of the book because that’s how crazy I am about this book. It’s the only time I’ve ever made a book review YouTube video, but it’s out there. So people should definitely read that.

Brandon:
It was a phenomenal, I read it before I got into real estate. We recorded with Frank Gallinelli way back on episode four of the BiggerPockets Podcast. Where we are? Like mid-500s now?

Jeffrey:
That’s interesting. I don’t remember that. And I started at number one and worked my way up.

Brandon:
Yeah. I would have blacklisted that one. That was in the days when me and Josh were like, “Hey Josh, how are you doing today?”

Jeffrey:
And I think number three was, I don’t know if he was number three or four, five, somewhere around there you interviewed somebody that didn’t talk about real estate the whole time. Do you remember that? Like a financial planner or something?

Brandon:
Yeah. Talking about death, was planning for death-

Jeffrey:
Just like that, and nothing to do with real estate.

Brandon:
Yeah. We were still trying to figure out what the show is going to be at that point. Ironically, we’ve come back to every other show not talking about real estate, but it took 500 episodes to get back to not real estate. When we realized that sometimes it’s the not real estate people that can teach you the most about real estate, which is what I find fascinating about those Sunday episodes.

Dave:
And you want to talk about personal growth, go listen to episode two with Brandon and Josh. Both Brandon’s life and just podcasts in general. Brandon just gave in Steamboat the best presentation I’ve ever heard him give. It was even better than what I thought Brandon might grow into in 20 years. He just looked like Michael Jordan in the zone and he could not miss. He commanded the crowd.

Jeffrey:
I saw he posted on the Facebook and I was like, “Man, I wish I was there.” I actually saw Brandon speak a few months ago, by the time this comes out, it might be a few months ago, and I was really impressed, especially because you just popped in and it was a surprise appearance, I think you just kind of, “I’ll just talk about what I do.”

Brandon:
I like getting the compliments, but here’s the irony that I want to actually point out of this. So I’ve done a lot of talking over the years, the two speeches which I’ve done the least amount of prep work in my entire life was the one at Steamboat that David you just thought, because I didn’t know I was even talking until I got there. And so I didn’t plan anything, I just sat on stage and talked with Pat Hiban. And the other one was the one where I met you, Jeff at Brad Sumrok’s event where I didn’t plan anything until I was on stage, I’m like, “Oh wow, there’s 300 people watching me right now. I guess I’ll talk for a minute.” And I ended up talking for…

Brandon:
And those are the two people seem to like the most. I’ve worked hours and hours, and hours, and hours on speeches before and it just falls flat, but sometimes in life you just got to wing it. That’s my lesson there.

Jeffrey:
I actually agree with that. My best talks have always been once where I just was like, “I know what I want to say, I’m just going to say it,” and I didn’t plan how to say it.

Dave:
But it doesn’t mean to be lazy, it means to always be prepared. What were you going to ask me, Brandon?

Brandon:
I just think David’s is also my cheerleader. So I’m sure the speech was probably mediocre at best, but I was literally answering questions about my net worth

Dave:
I was literally in the bathroom stall when Brandon got done, and hearing people talk around me about how good the speech was. That may be TMI, but that’s how powerful I just want people to understand. Rickson Gracie, he has a new book out called Breathe: A Life in Flow. And he is considered one of the best fighters, definitely the best jujitsu practitioners the world ever saw. And part of what made him so great was that he never knew who he was going to fight, when he was going to fight, what style, he just had to be ready that he believed, “My style is better than anyone’s in the world, and I’ll just beat anyone you put in front of me.”

Dave:
So he didn’t prepare for the fighter, he prepared by perfecting his craft. And I think that’s why you two do really well when you’re not over-preparing. It’s not that you don’t care, it’s that you’re always caring. You always want to have the answer when someone comes to you and says, “How did you do this? How does this work?” that’s part of being in a platform like this where people look up to you it’s forces you to sharpen the iron that’s in your life. And that’s one more argument for why you should do things that are hard and scary, because you’re getting on a podcast where we talk about real estate constantly, and at any minute, someone could pull me aside and say, “How does this thing work?”

Dave:
And if I don’t have the answer, I look really stupid because I’m expected, it forces me to grow.

Jeffrey:
Oh yeah. And I’ve been on a lot of podcasts, but I don’t normally get nervous on, but I get nervous listening to you guys. I’m not going to lie, you guys are a big deal. So thanks for having me.

Brandon:
We show up late without cameras, microphones working and you very graciously dealt with about 30 minutes of tech issues this morning. So, thank you.

Jeffrey:
It’s all right.

Brandon:
Question number two, moving on from the mutual admiration society.

Dave:
What is your favorite business book?

Jeffrey:
It’s still Rich Dad, Poor Dad, but if I don’t count that one, Total Recall actually by Arnold Schwarzenegger.

Brandon:
Really?

Jeffrey:
Yes. And ironically, I heard about this book on your show, I think it was like 400 episodes ago so you may not remember it, but I think it’s the best mindset book I’ve ever read. And in real estate and business in particular, it’s really about mindset. It’s amazing. The guy tells his story about how he went from being a poor person who didn’t speak English and the Hills of Austria to becoming the best body build in the world, the biggest action star in the world, the Governor of California. And everything boiled down to one thing and that was, he just reached refused to accept that whatever he wanted wouldn’t happen.

Jeffrey:
He first heard about the Mr. Universe Contest when he was 16, he’d never lifted weights before and he goes, “I will be Mr. Universe.” That’s it, it’s just, “I will. I’m not going to consider anything else.” And the greatest part about it is it’s almost a real estate book because he made his first million in apartment complex investing.

Dave:
Is in Southern California, right?

Jeffrey:
Yup.

Brandon:
Crazy. I love it, man. I’ll read it yet, so I will.

Dave:
Next question, what are some of your hobbies?

Jeffrey:
Well, I love traveling. I think I alluded to that before, but honestly, my biggest hobby, and this is going to sound so weird is helping people figure out what they want in life and helping them achieve that. That’s going back to my last life philosophy, I feel like I’ve had this life experience that allows me to go to people and go, “Hey, you know what, if I can never have bad days, so can you.” And not everyone has the story that they can back that up. And so I feel like I almost owe it to the world to do it. So I just love to get out, and I’ll go to a café and the person behind the counter will say, “Oh, how are you doing today?” And I’ll be, “I never have bad days.”

Jeffrey:
And they’ll say something like, “Oh, that must be nice.” I’ll be like, “It is, and you can do it too.” So that’s my biggest hobby, I think, is just trying to tell people how to live their life, which is when you say it like that, it sounds really bad. It sounds like I’m telling them what to do, but the reality is, I just want to help people wherever I can. That’s what I focus on these days mostly.

Brandon:
Awesome, man. Awesome. Well, final question from me. What do you think separates successful real estate investors from those who give up, fail or never get started?

Jeffrey:
You’re going to think I memorized this answer by the way, but I think it’s taking action. I know people say that all the time, but there’s a quote I love and I did not memorize it. I swear for this show, I’ve known it forever. I think it was Richard Branson, I can’t even verify who said it first, but it’s, “The difference that separates successful people from those who never succeed is successful people take action,” and this is the key part, “Without all the possible information.” And that’s the fear thing we were talking about earlier. You have fear because you don’t know everything about what you’re doing, but you got to do it, just got to take action.

Dave:
That goes back to that Mike Tyson quote, “Everyone has a plan until they get punched in the mouth.” He would go into a fight knowing whatever plan they have or whatever plan I have, it often goes out the window the first time something hits you really hard. And I put up an Instagram quote that Brandon says, everyone has self-discipline until the waiter brings chips and saucer to the table, very similar.

Jeffrey:
That’s true for me. Mike Tyson, his book is really good too, Undisputed. That audio book is amazing actually.

Dave:
There’s something very, very powerful about all these successful people like Rickson Gracie, Mike Tyson, Jeffrey Holst, that are all telling us, you don’t have to have all the answers, in fact, you’ll never get them. So if you’re waiting for that to happen, you’ll be waiting for your whole life.

Brandon:
Mike Tyson is somebody who also has some real estate in his career and his portfolio, I believe. And we’d love to have him on the show, so maybe you have good connection to Mike Tyson?

Jeffrey:
No. That goes for me too. So I’d love to have him on any show that I’m doing, or if he just wants to hang out with me, anything. So if people know Mike Tyson or Arnold Schwarzenegger, send them my way too.

Brandon:
Hook him up. Arnold is another one. We would love to hang out with Arnold. If they want to come hang out with me and Jeff and Arnold, David might go to camp.

Jeffrey:
Yeah. I’ll go wherever he is. Brandon and I will meet you, Arnold and Mike wherever you want to say.

Brandon:
Anywhere you want to go, we’ll get there.

Dave:
Or Shaquille O’Neal. If anyone has Shaquille O’Neal connection, he’s got a good real estate.

Brandon:
They’re on our list of people who want to get on the show and connect with Jeff. All right, let’s get out of here fellas. David, why don’t you ask the final question.

Dave:
Last question of the day, Mr. Holst, where can people find out more about you?

Jeffrey:
I thought about this a lot because I’m everywhere, if they Google me, they’ll find me, but Instagram’s good @jeffreyholst. But my real passion is, like I said, the last life philosophy and I have a Facebook group called Last Life Ever private group. And people can find me there because that’s where I hang out the most actually. It’s a lot of fun and people can come hang out there and they can find me, it’s not hard, I promise. If you Google me, you’re going to find me, it’s not a common name.

Brandon:
All right. If you Google me, you’ll find me or a skateboarder.

Jeffrey:
Well, it’s actually really sad when there’s somebody famous with the same name as you. There’s a guy in Sydney, Australia named Jeffrey Holst that’s working on solving cancer, and I’m like, “I hope he doesn’t solve cancer because if he does, then it’d be hard to find me.” But then I’m like, “Oh, I have cancer, so maybe I actually do want him to solve cancer.”

Dave:
There you go. That’s the no bad days, either way, you win.

Brandon:
No bad day, either way you win.

Jeffrey:
That’s right. Either way I’m okay.

Brandon:
There you go. All right, Jeff. Jeff, this has been phenomenal. Thank you so much. I love chatting with you and I’m excited to see what you had in the future and all the people you’re helping and all the lives you’ve changed today, just thank you.

Jeffrey:
Thanks so much.

Dave:
All right, guys. This is David Greene for Brandon “So Good” Turner signing off.

Speaker 3:
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