Financial Freedom in 3 Years by Investing in “Boring” Rental Properties

Henry:
Have you ever wondered how to use real estate to replace your W2 income? Have you ever dreamed of time freedom and spending more time with your kids or giving more time to your passions? Well, on today’s episode, we are going to hear a story about how an investor did just this, so you can too.

Henry:
What’s going on investors? I am Henry Washington and I’m solo today because several of our hosts are taking some time off to enjoy this beautiful summer. But today we’re talking with Grant Frankie, who’s an investor out of Nebraska, who has successfully replaced his W2 income through real estate investing. So we’re going to talk about how Grant forecasted and planned to leave his W2 and how he built up the Kaons to actually jump off that cliff. We’ll discuss the cashflow that he needed to leave that job and how many doors that equated to in his portfolio. We’ll also talk about how Grant scaled from zero doors to this level and how he’s adjusting or not adjusting his business to grow his portfolio in this current economic environment. Let’s bring Grant on the show. Grant. Frankie, welcome to the show.

Grant :
Thanks, Henry. Happy to be here.

Henry:
Awesome man. It’s so good to have you. I’m excited to have this conversation. I think there’s some synergies between you and I, so that’s exciting. So let’s kind of paint the picture, man. Let’s go back a little bit. When was the moment that you decided you needed to replace your W2 income?

Grant :
So I hired out at the railroad as a conductor in 2006. It’s a great job if you’re single, you don’t have any kids. It changed for me when I started. We started having kids once, Mallon and Brendan, my son was born. The job’s very demanding on your time and weekends and holidays. So at that point, my wife and I, we decided we needed to start looking at something else to do to get me away from that job.

Henry:
Wait a minute. So you were a railroad conductor?

Grant :
Railroad conductor, yeah. For BNSF railways. Yep. I hired out when I was 19. And that’s

Henry:
A job that when you’re a kid you realize there’s a job, but as an adult you never really hear people say that you’re the train conductor. What is that like? What do you do as a train conductor? You said it’s demanding, but what’s that mean?

Grant :
Yeah, it’s not a physically demanding job. It’s more of a time demanding job. So I live in Lincoln, Nebraska, so we would take trains from let’s say Lincoln to Kansas City. That’s a three hour drive in a car, but it’s a 12 hour drive on the train. So you got to take a train there, stay there for 12, 24 hours and then bring a train back. So I’d be gone anywhere 36 48, sometimes even more hours. And you’re on call. It’s in the middle of the night it it’s a rough life.

Henry:
Oh man. So how many days out of the week were you home versus on the road?

Grant :
It varied. There’d be days where I’d be gone for three days back for one and then gone for another three days, and then you could have a couple days in between there where it’d be a little bit better where you’re home. But it was a lot of time on the road away from family.

Henry:
Okay, and this was, you said 2006?

Grant :
Yep. So I hired out in 2006 when I was 19, pretty much right out of high school. And then I got married shortly after that. And like I said, once we started having kids, I knew that I needed make a change.

Henry:
Okay. So how long was that working period?

Grant :
Yep. So we started buying rentals in 2016. So in about 2015 I got the bug started learning everything I could from BiggerPockets and all the books. 2016 we started buying rentals and then by 2019 we had enough cashflow to replace the job.

Henry:
So what led you to real estate? What made you figure that this was going to be your path to being able to have some more time with your family?

Grant :
So I’ve always been somewhat handy. I don’t love doing it, but I could do it. So I was like, I’ll just be a handyman or a contractor. So I was googling around and I saw some post that said landlords are the best clients for handyman because you keep ’em busy, you keep ’em happy. That led me to a BiggerPockets episode of a handyman that became a landlord. He recommended a book in there called Rich Dad. Poor Dad drove to Barnes and Noble read that and it was game was over,

Henry:
Man. Did your head explode? That’s what mine, that’s what happened to me.

Grant :
Yeah. I’ve never read a book that I felt like it was written for me. I just felt like it was just speaking to me. So I read that book and then I gave it to my wife, she read it and we were on board,

Henry:
Bro, it’s like looking in a mirror. So for me it was pretty similar. So I had an epiphany at about three in the morning that I needed to do something to generate more income, did a random Google search, found a BiggerPockets blogs, and started going through the blogs and started going through the forum posts. And I was just blown away at how many regular people invested in real estate. And I was like, this is incredible. And so that’s when I decided I was going to do it as well. Let’s do that Google search. And then I woke up the next morning and went to speak to the only person I knew that knew anything about investing in real estate, who I worked with. And I said, can you just help me point me in a direction I don’t even know how to ask you for what I’m asking you for, just but point me in a direction.

Henry:
And she brought back a box of books and said, pick a book. If you read one of these books, I’ll help you. And so I was just sifting through this box of books, looking for a title that sounded somewhat familiar, and I just happened to pick Rich Dad, poor Dad. And then yeah, my head exploded. But similar to you, I also gave the book to my wife and we kind of read it at the same time. And that really helped her get on board with this journey. Was that kind of the similar experience to you? Was she on board from the beginning?

Grant :
She’s always been super supportive of everything I’ve done, but once I gave her that book and she read it and we were able to sit down and so she’s an accountant, so she’s an Excel master. So we sat down and we did some numbers and well, if we do so many of this, so many times this is feasible. Like you said, real people are doing this. There’s an entire community out there teaching people how to do this for free. We can do this, we can make this work.

Henry:
So you read the book you guys are in, you were like, we can do this. We know we need to do a certain number of deals. How long between that period to when you bought your first deal?

Grant :
So I started learning in the end of 2015, and then it was about six months later, six or seven months later, we bought our first duplex.

Henry:
Okay, okay. That’s solid timeframe. Six or seven months. Oh, you went straight into it with a duplex, didn’t even go single family first.

Grant :
Yeah, I went straight to a duplex. Yeah.

Henry:
Awesome. So you said you guys had talked about how many you could do a year that would sustain you guys. So how did you plan out your goals and how did you prepare for generating the income you would need to quit your job?

Grant :
Yeah, so like I said, we were able to, once we got that first one done, we were able to take that cashflow and just do the math. Like, okay, let’s do this six, seven more times and put everything we have into it right now because it’s going to suck for a little bit. But the light at the end of the tunnel’s there,

Henry:
Is that a train joke? That sounds like a

Grant :
Train joke. It could be. But on purpose, that’s a good one. But if we do it a certain amount of time, it’s going to work like the math works. And we were able to do that and then we were able to start building our systems and processes around buying properties and managing the properties and working on the properties while I was still at the railroad.

Henry:
We do have to take a quick break, but more from Grant Frankie and his journey to quit his W2 through real estate investing after this. Welcome back to the show. Let’s jump back in. So talk to me about some specifics of some of those goals. You said you needed to do a certain amount of deals during a certain amount of cash flow. So what were some of those goals?

Grant :
So what we did, we took the math of what I was making at the railroad. So depending on traffic and how busy we were, I was making anywhere from 60 to $80,000 a year. So we took that, my cash flow that I got from the railroad, which was after tax income. And then we put a formula together for our cashflow that we needed. And we also took into effect the benefits of real estate investing. So the depreciation, the write-offs, all that stuff. So once I became a full-time real estate investor, we were able to capture those losses and those depreciation off of my wife’s income as well. So we were able to come up with those numbers and it ended up being about $4,000 a month of cashflow that we felt comfortable. Once I had that clean pure cashflow coming in of 4,000, we felt good coming.

Henry:
So it sounds like to me, you did your math to figure out net cashflow, right? So we’re talking after all of expenses, after all of the holding costs, after all of the debt service, after all of the maintenance and capital expenses, this is the net number you would need to bring in each month in order to replace your W2 income. So what did that turn out to be about? How many doors did that equal out to be for you and when did you feel comfortable leaving that W2? Because it wasn’t comfortable for me to make that decision?

Grant :
No, that was terrifying. So we ended up, once I had around, it was about 42 doors we had once I left the railroad, so that equaled out to about 4,000 a month in cashflow. So once we did that, and then we probably could have left earlier, but man, that was terrifying. Just going in there and resigning from that union job with a really great pension and really great insurance, all that stuff kind of doing that was pretty tough for me to do. So it took me a while to get up to guts to actually do it, but then once I did it, it was the greatest feeling in the world, just so freeing.

Henry:
So was 4,000 your actual number or was your number lower than that and then you just waited till you got to 4,000?

Grant :
Yeah, we just waited. So 35 was probably more accurate of where we could be, but we waited until because I wanted a little bit of buffer just because I didn’t want to eat peanut butter and jelly all the time. So we waited for a little bit more of a buffer.

Henry:
That’s perfect. It’s like you’re reading my mind. My next question was going to be, did you have to change your lifestyle before you hit that number and become more frugal or did you have to change your lifestyle after you hit that? How did your lifestyle get impacted either before, during, or after the transition? Yeah,

Grant :
Great question. So one thing that my wife and I did was, since it is a union job, you can bid around to whole different jobs. So those two years prior to me leaving, once I started really getting into the railroad stuff, I bid to the lowest paying job on the railroad that I could hold. So we figured out if we can survive on this amount of money a month from my lowest paying job at the railroad, then let’s just get to that number cashflow for real estate and then we’ll be an even change.

Henry:
So you were essentially testing your cashflow theory on your railroad income to see if you guys would be comfortable with that lifestyle ahead of time. That’s super smart, man. One of the lessons that I’m learning is that as you start to build more income streams, it’s hard to maintain that frugality, but sometimes you need to in order to build up a cushion. And so you were able to kind of build that into your plan as you were going. So I think that’s super smart. And so it sounds like rental properties has been your main jam in order to help you build up that income and look. So I quit my W2, right? But it was not an easy decision. So when I quit my W2, I was essentially, I would say forced to do it in a way I was faced with an option of either giving more hours per week to my W2 or not.

Henry:
And when they asked me to do that, it forced me to really do the math and figure out, well, what exactly am I making per hour outside of my job? And so I did that math, I had to figure out what is I making per hour on the real estate side? What was I making per hour on the teaching side? And then when I put all those numbers together, I was clearly losing money if I chose to give my W2 more of that time. And so I tell people I essentially didn’t quit my job until it cost me money to have a job, but it was still extremely scary. So what were some of the thoughts you had or decision points that you used to finally make that leap? I didn’t do it until I was forced to.

Grant :
Yeah, I had a similar thought process too. It got to the point where the railroad was almost getting in the way of my scaling and growing the real estate business. There’d be deals I’d want to go check out or go underwrite or go walk and I’d have to go to work and I’m like, well, I’m literally losing money by going to work. So once it got to that point, and like I said, once the cashflow was there, our number was hit, it made it a lot easier to make that jump. I don’t think I probably could have went a whole lot earlier just because I didn’t want, like I said, eat peanut butter and jelly all the time.

Henry:
Me too. I told my wife, I was like, we probably could have did this before, but it was a little scary. So you said you started with a duplex and you use cashflow to retire. Is rentals all you’re doing? Are you flipping to generate capital? What’s your strategy?

Grant :
Yeah, we’re just straight buy and hold, boring cashflow real estate. That’s kind of what our motto is, is nothing super sexy, but just boring cashflowing buildings,

Henry:
Man. I say the same thing. People ask me what I do and I’m like, man, I do old boring real estate. I buy properties, I fix ’em up and I rent ’em out. It doesn’t seem like nothing to write home about, but one day I’m going to wake up and be like, I’m really, really glad I did

Grant :
This. It worked out well.

Henry:
Okay. So duplexes, why start with multifamily? Do you do any single family?

Grant :
So we do have a few single families that we’ll pick up every once in a while. I live in a smaller town outside of Lincoln, so if there’s a house that comes up in this town, we try to pick that up just to have something close to home. Otherwise, it’s really for me, in my mindset when I started it was if I have a duplex with two units, if one goes vacant, I still have half the rent coming in where single families, if they do go vacant, then all my income’s gone. I just started with it that way and I’m glad I did. We do still have a few single families, but I prefer managing duplexes and up. It just seems easier for me to do that.

Henry:
So it sounds like a lot of your decision process is based around cashflow, right? Because what you just talked about using the duplex is protection of cashflow, right? So if one side’s empty, you’re still making money on the other side. And you did mention one of the other ways real estate pays you when you talked about depreciation, but are you mainly, is your sole focus cashflow, are you worried about appreciation and depreciation and debt pay down the other ways that real estate pays you?

Grant :
Yeah, so our main thing is cashflow, right? That’s great. The other two ones, depreciation and debt pay down. Those are awesome. Those are going to be coming in with when you make your payments. Appreciation to me is just icing on the cake. I can’t spend depreciation and if I want to spend depreciation, I got to go out and get a loan against that appreciation or do a cash out refinance or something. So for me, in my philosophy, it’s pure cash flow is the number one thing. Loan pay down’s awesome too. After you’ve had a property for five or 10 years and you looked at the balance, you’re like, well, that’s a significant amount of money that was paid down by my tenants.

Henry:
And I think that investing for your peer cashflow is a great way to invest because essentially it’s a safety net. If you’re making money on day one, when you buy a property, you’ve protected yourself. And then anything you can do to force the appreciation and add value and increase your rent increases that cashflow going forward. So I think it’s a very safe approach to real estate investing, but it can also be a challenging approach, especially for new investors because that means if you’re not generating capital any other way, then you’ve got to be able to afford to buy more rentals. Typically, there’s a down payment that’s associated with it. So how are you financing your deals that allows you to scale without doing any flips or anything to build up capital?

Grant :
Yeah, so the nice thing about what my job was beforehand is I was able to work a lot beforehand and we had a decent amount of capital saved up doing that. So that was able to help us scale pretty good when we were just starting. The other thing we were able to do is take out a loan against the 401k from my employer had. So I did that and then so you just pay interest back to yourself and you pay the loan back. And then once we left, we actually ended up just cashing that 401k out and throwing it all in real estate. So

Henry:
Bro, I think we’re twins. That’s how I’d financed my first deal. We

Grant :
Have similar stories.

Henry:
Yeah, we borrowed against my wife’s 401k. I was not financially smart enough to have my own 401k at the time. And so yeah, we took out a loan against the 401k. So for those of you who don’t know, 4 0 1 ks are retirement vehicles that you have typically at corporate jobs, right? And you’re putting money away and they’re essentially putting that money into some investments for you. And if you want to use your 401k money before retirement age, you typically have to cash out your 401k. And then there’s penalties and fees and things associated with that. But what a lot of people don’t know is you can actually borrow against your 401k, so you can go to your employer or whoever is and find out whoever controls your 401k and you can take out a loan from the money that you have in your 401k. Typically it’s a percentage of the money that’s in there that they’ll give you access to and then you borrow that money, you do have to pay it back.

Henry:
It is a loan, but since it is your money, you are paying yourself back with interest. And the best part about when you use a 401k loan to buy real estate and buy real estate rental specifically is your tenants essentially end up paying back your 401k loan, which is interest to you. So it is a good way that you can leverage some money to buy real estate, but I want to make sure that people understand it is a loan and you do have to pay it back. And so you must be extremely careful with the assets that you go and buy because if you go and you buy a bad deal and that bad deal’s not making you money, you still have to pay for that bad deal and you got to pay that 401k loan debt. So you have to be careful with any leverage. But if you are smart with your money and you buy good deals, it can be a good way to help you get capital to build your business. And so it sounds like to me you were very smart financially by having savings plus being able to utilize the 401k and that’s helped you to build your portfolio. So what does that portfolio look like now about what’s the size, what’s the unit mix?

Grant :
Yes. We have about 104 doors. It’s around 8 million in assets under management. We’ve got five, six single families and then the rest are duplexes. And then we have a few, four plexes, six plexes and an eight plex in there as well.

Henry:
Okay. You said that was 104 doors? Yep, 104 doors. Mostly small multifamilies and some singles. Yep. Man, that is incredible. Congratulations.

Grant :
Thanks. Appreciate it.

Henry:
And so how are you typically financing these properties? Are you using commercial loans? Are you putting them on 30 year fixed financing? How’s that looking?

Grant :
In the beginning it was a lot of 30 year fixed until we ran out of that option. You can only have so many of those, and that was a sad day when that happened. But now we’re just a commercial lending. We’ve got really good relationships with a few banks in town. They trust us, they know what we’re trying to do, we can bring ’em a deal. They know we’re not hiding anything. We can get a transaction done pretty quickly, but it’s mainly commercial debt now,

Henry:
Man. Same here. And again, for those listening, conventional loans are typically capped at, what is it 10? Yeah, 10 per person. And so can you have 10 and your wife can have 10?

Grant :
I don’t think we could. I think we were capped out at 10 if we could, then we probably should have. But

Henry:
So fixed rate mortgages, you’re capped out at 10. So once you cap out at 10, you have to figure out a different way to finance your deals. And so I do the same thing. I use commercial loans from small local banks. The loan structure’s a little different where a conventional loan is typically going to be 30 years at a fixed interest rate, 30 year amortization at a fixed interest rate. Where commercial debt is a little different is it’s going to be amortized on a 20 or 25 year note and it’s going to be an adjustable rate, meaning your rate will be fixed. But for a standard period of time, typically that’s a three or five year adjustable rate. And so that means after three or five years you either have to, your rate can adjust, it can either adjust up or down or you’ll have to refinance that loan into another commercial loan or into a 30 year fixed at that point if you have availability to do so at that time.

Henry:
But what I do love is what you said is that commercial banks are relationship banks and they can be a little more flexible on some of those terms that you have tied to that loan. So they can be a little more flexible with your origination fees and a little more flexible with the interest rates. So I’m getting a loan, matter of fact, I’m closing on a loan next week. I think Prime is somewhere around eight and eight and a half percent right now. And I’m able to get eight and a quarter because of the relationship I have with the bank. So right now I like the adjustable rate because, so if you’re of the opinion that rates may come down in the next year or two and you lock yourself into a 30 year fixed at eight and a half interest and you’re on a prepayment penalty because some of these conventional loans have prepayment penalties, then you might hurt yourself if rates come down. So you just have to know when and how to use these. So love the relationships with commercial banks. Is that your plan to continue going forward? And how are you looking at your portfolio in a sense of paying off debt? Are you in a situation where you’re looking to pay off more properties or are you in a situation where you’re looking to continue to grow?

Grant :
Yeah, financing wise, we’re not really looking to pay down debt. We’d secured some pretty good interest rates during those covid lows and we were able to lock some of that in for 10 years for that. So we are going to hold that as long as we can. So we’re just paying down our usual payments on that. And as scaling goes, yeah, we’re still going to continue with those commercial banks and building a relationship with those people and trying to find more lenders as well. So we can always have a couple in our back pockets if we need ’em.

Henry:
We have to take one final break to hear a word from our sponsors, but while we’re away, make sure to hit that follow button on your favorite podcast app so you never miss an episode of the show. Welcome back to the BiggerPockets podcast. Alright, well while we’re on the subject of numbers and financing, can you tell me about a recent deal that you’ve done?

Grant :
So the most recent deal we’ve done was a fourplex that we got through a relationship that we built from a different seller, but we got a fourplex, we paid $300,000 for it put 25% down and after our underwriting and everything, we make about 330 bucks a month of peer cashflow after all expenses on that

Henry:
1, 330 bucks a month for the total building? Yep. Okay. That’s awesome. And did you have to renovate this building?

Grant :
Nope. It was fully rented, just under rented. So that was the nice part about it is we were able to buy it and leave the tenants in there slowly start increasing the rents here over the next six months to get everybody up closer to market. We don’t technically go all the way to market, usually we’re kind of under market, let people stay there for longer, less vacancy.

Henry:
Okay. So no renovation, raise the rents to closer to market rents kept the same tenants and you paid 300,000.

Grant :
$300,000. Yep.

Henry:
And is that what it’s valued at or did you get it at a discount? So

Grant :
I would say when we valued it, it was like 360, but we were able to get it for 300 from the seller. They had some family issue stuff going on and wanted to offload it quickly so we were able to step in and help ’em out.

Henry:
Okay. So you walked into equity and cashflow from day one? Yep. That’s a win in my book, man. Congratulations on that deal. Super

Grant :
Boring building, but it cash flows and gets the job done.

Henry:
Kidding me. Fourplexes are like my dream property. That’s my sweet spot. My biggest property is an eight unit. Everything is single, small, multi, and I have a couple of quads. And it sounds like based on what I’m hearing that you manage your own properties. Is that true? No property manager? That’s

Grant :
Correct. Yep. We manage 104, all 104 doors.

Henry:
Oh my goodness. How is that for you? It’s not

Grant :
Bad. So about a year and a half ago we brought on a full-time va and that’s really helped us out with the management side. She handles all the tenant communications and leasing issues, all that stuff. She does that, but we really built it in the beginning with the end in mind, my management side. So I was able to start building those processes as we were scaling up before I left the railroad. So now in this we have this 104 door portfolio, it’s a lot easier to manage because we started doing it right in the beginning.

Henry:
Yeah, I mean obviously that’s super smart and a lot of investors, our highest and best use is out there finding more deals to bring in more income and managing your own properties can take away from some of that time. So how much time do you spend per week managing your properties?

Grant :
Right now it’s about 10 hours maybe a week with my va. Before that it was 25, 30 depending on what was going on. The reason we brought on the VA is so I could start working more on the business instead of in it, which it has helped out with that a lot. So scaling up and building those systems from the start helped us get to that point where we could bring the VA in, drop her in, and then it just kind of runs itself.

Henry:
Well, it sounds like we need to bring you back at some point and talk about your, I know a lot of people want to do that, but not very many people do it well.

Grant :
Yeah, it’s tough to do it well.

Henry:
Seems to be a better play for people to just hire it out if you can find a good one because good property managers are hard to find. That’s always the conundrum. So looking forward, it sounds like you’re still at a place where you’re looking to grow. What are your goals moving forward? Are you shifting goals? I know interest rates are higher now. Cashflow is harder to come by, so how are you changing, if at all in your real estate strategy?

Grant :
We’re still just doing controlled growth. There’s still deals out there. Real estate’s always about a building, but it’s still mainly a relationship thing. So we’re still out there building a relationship with sellers brokers and trying to get the deals. We actually got a property under contract yesterday for the first time in about a year that’s actually cash flows and it’s going to work. So we’re real excited about that and things are starting to pencil out a little bit more, but we underwrite so conservatively that if I don’t make money or at least break even when we closed, we’re not going to buy it. And I know I’ve lost a lot of deals in the last eight years by not buying, they didn’t pencil out on day one, but I slept better because I knew everything that I bought cashflow and I had that safety net with it.

Henry:
I think there’s a lot that I want to unpack there. But first, can you tell our audience what you mean by controlled growth?

Grant :
Yeah. Controlled growth to me is we’re at a point with our portfolio that I don’t need to stick my neck out and buy a class D duplex and just if it’s going to make a couple hundred bucks a month, but I’m only going to buy stuff that I want to hold now for long periods of time. I’m not in that grinding mode where I need to make all the cash flow I can right away. We’re just controlled growth. We’re just going to continue to grow, buying nice properties and nice areas that cash flow well.

Henry:
So essentially you’re saying you have a pretty strict buy box and pretty strict underwriting criteria. Extremely. If a deal does not hit your buy box and underwriting criteria, you pass it no matter what.

Grant :
Yep. We’re not going to hope that stuff works out. Everything needs to work out from day one for us.

Henry:
And cashflow is harder to come by, but what, like what you said is that A, you’re not going to buy it unless it’s either cashflow or at a minimum you’re breaking even on day one. But you said you are talking to sellers and so I assume that means you are mainly buying deals direct to seller.

Grant :
Yeah, so a vast majority of our portfolios come from off-market deals. We send out targeted mailers. I don’t send out 90 letters a week. I send out 25 a quarter to certain sellers. We stay in contact with them and like I said, a lot of my portfolios come from those off market deals, building relationships with people and just staying in contact with ’em.

Henry:
Did you say 25 letters a quarter? Yeah. Wow. So you send 25 letters a quarter. So you must do a lot of follow up, A lot

Grant :
Of follow up

Henry:
And maintaining relationships,

Grant :
Maintain relationships. If they email me then I keep their email and I’ll check in every once in a while. I know what some of the owners are, so when I’m driving around, if I see ’em about by the property, I’ll stop and say hi. And I mean that’s wielded us a lot of deals. In the past we had a property that we had an plex and there was a sixplex right next to it and I just stayed in contact with the seller. She’d call me, I’d answer every call she wanted to call and talk about and we just stayed in contact and we ended up buying her property from her when she was ready to be done.

Henry:
So for people listening who think you got to spend a bunch of money to find deals, this is a great story to show you that you don’t have to do that. What I call what you’re doing is network marketing. And so you’re reaching out with your mail and then you’re building relationships with the people who end up calling you and you’re maintaining those relationships by continual conversations, stopping by and saying hello. There’s one thing that I do where I’ll send out marketing to a specific list and then the goal from that marketing isn’t to buy a deal to get them to go have lunch or coffee with me so I can build a relationship. And so this is a great strategy if you want to have good deal flow, but it does require a lot of organization because you have to remember who to reach out to, when to reach out to ’em, what you talked about last. You can’t just cold call somebody and be like, Hey, think Gary, how are you? Right. What systems are you using to be able to stay on top of your leads like this?

Grant :
We’ve got a pretty good Google spreadsheet.

Henry:
Oh, your wife’s the spreadsheet lady.

Grant :
So we got a spreadsheet in there. So I know the properties they have when we’ve talked last and all that stuff in there and I’ll just keep it in. But it’s also like I also don’t ever want it to come across as fake. We’re genuine. We’re not doing this to try to fake people out on who we are. We’re trying to be good people to them. I want to keep track and make sure I know what I’m talking about with

Henry:
Them. Man, that’s amazing. That’s a lot of hard work and dedication, but being genuine and being honest and truthful with people will go a long way to getting deals and direct to seller is a great way to get good deals. And I tell people all the time, yes, it is harder to find cashflow right now, but honestly every deal, cash flows, every single deal, cash flows at a certain price. You just have to be willing to make the offer at that price even though it’s uncomfortable and you have to be willing to stick to your numbers. And it sounds like that’s exactly what you guys are doing. You every deal you buy cashflow. So you are a testament to that works. And lastly, to follow up on the financing, when you’re buying these deals, are you putting money down to help that cashflow or are you buying them without much money into ’em?

Grant :
We’re still putting the 20 to 25% down. I’m not over putting money down like 30 or 40% down at this point just because I want to still want to save some capital for when I do have deals. So this deal that we just got under contract, we’re still doing the 25% down on it and it’s going to cashflow for

Henry:
Us. Okay, man, that’s amazing. So it sounds like you have a very conservative, safe approach to real estate yet still finding scale. I think a lot of the time when you hear people that say they are conservative or when you hear people talk about wanting to invest but doing a conservative way, they don’t have scale along with it. And I think that you found a great way to maintain being conservative, but also growing and scaling your real estate business. It sounds like a super fundamental real estate strategy. What advice could you give to someone who wants to do something similar, buy small multifamily and buy cash flowing assets and do it in a safe way? What are some of the things that they need to do ahead of time now to prepare themselves to be where you are now?

Grant :
Yeah, the big thing for me was education and getting the right mindset. If they’re already listening to BiggerPockets, they’re ahead of the game for most people. But listening to all the podcasts you can, reading all the books you can, that gives you that confidence when you go in to make that offer or you go in to do the deal or work with your tenant, then you already know what you’re talking about. You’re not just shooting from the hip and hoping that you can figure it out while you’re going. So having that education and that mindset shift of what you’re trying to accomplish, why you’re trying to accomplish it is huge. For me, once I figured out why I was in real estate, why I was investing in these properties, it made all the tough times a lot easier because things are going to go wrong, acs are going to break, tenants are going to do things, pipes are going to freeze. But if you know the reason why you’re doing it, that makes the whole thing a lot easier.

Henry:
And on that note, you seem to have a very strong reason why you wanted to spend time around your family. And so can you tell us how your life has changed since you’ve gone full-time real estate, and are you able to do the things that you planned or thought you were going to be able to do?

Grant :
Yeah, it’s been unbelievable. It’s the greatest thing I’ve ever done. My kids are 10 and eight, so when I left the railroad, they were six and three, so I got to see him grow up more. I got to go to all the games so far. My son doesn’t even remember when I was at the railroad. That’s how young he was when I left. So I was able to do all those things. We take trips, we spend a lot of fun time as family together. So it’s just been amazing. It’s been everything I hoped it’d be.

Henry:
Oh man, I love hearing that because people use the word financial freedom is always almost like this buzzword now when people say it and they don’t really know what it means or have an emotion tied to what that means because it’s such a popular phrase. And financial freedom can mean so many things to different people. But the time I’ve been able to spend with my daughters has been amazing. And it’s all because I’ve been able to invest in real estate and I love that you set a goal, you planned, you took action. But what I heard that’s most important for people to hear is you stuck to your plan, like you stuck to your plan. You’re only buying rentals, you’re only buying cash flowing rentals. You are making sure that they hit every box before you buy that property on day one. And you’re doing it in a way that mitigates your risk by a, buying the good deals, B, putting some money down each and every time and making sure that you’re not being super risky and sticking to your buy box.

Henry:
Man, that’s incredible. Thank you so much for sharing those bits of information. I think it’s going to be very helpful for people. Yeah. Well, thank you so much, grant, for coming on and sharing your story with us. You have an amazing story. You should be super proud of what you’ve accomplished. I’m sure your family is super proud of you and proud that you’ve able to now be at home spending more time with your family. And it’s really, really cool and inspiring to see someone have a goal, set a goal, stick to a plan, achieve that goal, and then now inspire others to do the same. So we really, really appreciate you. You

Grant :
Bet. Thanks for having me on, Henry.

Henry:
And if you want to connect with Grant, you can find Grant Frankie at www.biggerpockets.com/users/g RT F1. Or you can simply just Google BiggerPockets and type in Grant’s name if you’d like to connect with them. Thank you everybody. We’ll see you next time on another episode of the BiggerPockets podcast.