BiggerPockets Podcast 120 with Josh & Brandon Transcript

Link to show: BP Podcast 120: How to Find, Analyze, and Finance an Incredible Real Estate Deal!

Josh: This is the BiggerPockets podcast, show 120.

You’re listening to BiggerPockets radio, simplifying real estate for investors – large and small. If you’re here looking to learn about real estate investing without all the hype – you’re in a 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.

Josh: What’s going on everybody? This is Josh Dorkin host of the BiggerPockets podcast here with my co-host, the man, the myth, the screw-up himself, Mr. Brandon Turner.

Brandon: Now everyone knows about it. Only 11,000 people knew about it before I deleted that but maybe we should tell them what we’re talking about.

Josh: We should. Well you see last week we launched new podcast which we are going to talk about in a minute but in so doing somebody broke the original BiggerPockets podcast.

Brandon: I didn’t break it I just lost it, there is a difference. I lost the podcast.

Josh: There was show 119 and that was it.

Brandon: There was an issue with RSS feed and trying all this tech-y stuff that was way over all of our heads.

Josh: Speak for yourself.

Brandon: We spent hours trying to figure this thing out and I think we finally figured it out.

Josh: We did. The podcast is back and we are sorry to those of you who couldn’t get your fix of the BiggerPockets podcast over the past couple of days. We apologize. I don’t apologize. I apologize for Brandon.

Brandon: It was all just a big sham to build up publicity. What’s that phrase – all publicity is good publicity. Everyone’s like why is the podcast broken and I could be like because of the new AskBP podcast. You are going to find out in ten years this was just on purpose.

Josh: It was brilliant. Check it out. We do have a new podcast. It is called Ask BiggerPockets podcast otherwise known as #AskBP so the AskBP is unlike this show, its short, quick segments that answer a single question and a lot of these shows are going to be hosted by Brandon but we’ll have me do some, we’ll have other guest hosts of the AskBP podcast and basically this questions come directly from you. You guys can post your questions on BiggerPockets forums, on twitter, on Facebook, wherever you want – just use the hashtag AskBP.

Brandon: While were talking here ill just read the list of what we covered so far. Today we came up with “Should I use a home equity loan/line of credit to invest in real estate? How do you submit an lowball offer without offending the sellers? How do you organize real estate business? How setting goals can change your real estate life? When is a right time to quit your job? Should you get a real estate license? What is the AskBP podcast?”

Anyway, check it out. Good advice hopefully you’ll like what I have to say and keep your questions coming. I'm excited.

Josh: The cool thing the show is off to a great start. Despite and I think it might have been Brandon’s grand plan to have main BiggerPockets podcast down so this thing would do well. Keep the feedback coming, keep the ratings and reviews coming on iTunes. At last check we were ranked at 5 of all business podcasts.

Brandon: That puts us ahead of Mr. Dave Ramsey which was pretty exciting.

Josh: If you go on the investing category you’ll see we made BiggerPockets/Dave Ramsey sandwich surrounded by both of our podcasts.

Brandon: I’ve got 42 ratings and reviews already and every single one is a five start. You guys rock, thank you so much. For example I'm just going to read a couple here just I like to. Austin Craig said “Amazing just like full show these are great” This one says from Robert98 “I enjoy Josh and Brandon on BiggerPockets podcast. AskBP seems to have same personality in a more concise message. I like this format for morning pick me up. Brandon save your bear hug for someone else. Keep up the good work.”

Josh: Nice.

Brandon: I said I’ll leave the bear hug to anyone who leave us a review. That offer still stands.

Josh: Alright guys let’s keep moving here. BiggerPockets is hiring. We are hiring, we are looking for another content creator. We are looking for somebody who can pretty much be Brandon, do kind of what he does, help us on podcast, create videos, write content, you name it. We are looking for someone who has experience in real estate, who can write really well, who’s just got great charisma, who can do fantastic jobs on videos and who’s smart and savvy and looking for a job. This is a real job, it is a nine to five type “job”. If you are looking for a new job and love producing content and have lots of experience in real estate we’d love to chat with you and potentially bring you on the BiggerPockets team. Here is the cool thing about it – that person that comes in and ends up getting that position, your visibility to thousands and thousands of real estate investors around the world through the BiggerPockets content machine will be massive. If you are interested apply at jobs@BiggerPockets.com. Submit a few pieces of content you’ve written, submit a video content you created and we’d love to evaluate you and we’ll take it from there.

Brandon: You have to just move to Denver.

Josh: We would definitely prefer Denver however we will consider people outside of Denver for sure. Denver is absolutely preferred.

Brandon: Todays show is little bit different. You guys are going to like that but we’ll get to that in just a minute. First of all last week on the podcast we did talk about 10% sale on The Book on Investing in Real Estate with no and Low Money down using the code GRAHM. That was our guest last week and at the very end of the show I said that. Not everyone listens to the end so I thought I repeat it here. If you wanted to buy that and you haven’t bought it yet it’s not on Amazon it’s only on BiggerPockets – BiggerPockets.com/nomoney, 10% off using GRAHM. We should talk about today’s show. It’s different.

Josh: It is. It’s very different. We decided we switch it up because we want to introduce the listeners to the podcast to another format of content and that format is the webinar. I will tell you that I personally was not a fan. I was not a fan of webinars until I learned more and better understood what they were. We want to present a webinar trough this podcast so you guys can see just how good our webinars actually are and we are putting this webinars on weekly. Its tons of free content to help people. It’s a free class.

Brandon: People thing of webinar and podcast as the same. They are not the same. It’s not an interview. It’s basically me in front of a camera for an hour and a half teaching you something. We’ve done a show on The Five Roadblocks that New Investors Face and Ten Must Follow Steps New Real estate Investors Should Follow. We did how to quit your job using real estate, we did one on how to buy multi families, did one on how to wholesale. I try to do a brand new topic every week and today we are actually going to play you a recording of one of the previous webinars that I did just a month ago or so called “How to find, analyze and finance an Incredible Rental Property Deal” This thing is packed with content. If you are driving your car you are probably going to try to take notes. Just kidding.

Josh: Do not listen to Brandon.

Brandon: There are just ton of how to tips in this webinar on today’s podcast. Hope you like it.

Josh: Really, really quickly before we move on let’s bring on today’s sponsor.

Brandon: Todays sponsor is HomeSearch.com. HomeSearch.com is a rapidly growing site in the investing property listing space. These guys hold online auctions on hundreds of properties every week from around the nation. This includes foreclosures, RIO’s, short sales and an interesting set of assets you can’t find on MLS called Second Chance. These are the properties that are in pre-RIO status. Again these properties can’t be found on MLS so make sure you get on their list. That’s HomeSearch.com. Go get your free account and see if you can apply some BiggerPockets learning to sign your nest deal.

Josh: Really quickly we are sorry this is such a big lead in here but this is different show, we’ve got a bunch of announcements so we apologize. I’ll talk about ReplyRoom.

Brandon: This is how we structure webinars – every week we do webinar. They are usually on Thursdays. They are live so you get in on all the fun. If you don’t make I usually try to record the webinars I don’t always record them, sometimes things go wrong and something’s I just don’t. If I'm able to record them we take them and we put them for free for everyone to look at for the next five days and after that they go behind pro wall. Pro members can watch any replays whenever they want but free members you’ve got to watch it live or if I record it in the next few days. If you are a pro member check out BiggerPockets.com/proreplay and you will see all the old ones.

Josh: Todays show. We are going to talk about, we being Brandon, we cover the ten best ways to find properties – even in a hot market, ten biggest mistakes people make when analyzing properties and end up buying terrible deals because of those mistakes – if that’s you obviously you want to pay attention and 12 ways to finance an investment property even if you have no money. Again, lots of great content so we defiantly want to recommend you to take out a pen and take some notes.

Brandon: Two more things and we’ll get to it. Number one – there are slides that go with this, you don’t need them to go and listen to the webinar but understand if you do show up for the webinar there is actually slides and I'm actually there on video talking to you. Today you have to use your imagination. Lastly I want to invite everybody to come to the next live webinar. We’ve got this brand new system worked out today so you can actually text us with your phone to sign up for next webinar. To do that all you have to do is get out your phone and send a text message to a number 33444. Again, send a message to 33444 and include only one thing on a text message, just a word, BPWEBINAR. You just follow the steps that come after that, we’ll text you back with instructions on how to actually join in the webinar.

Josh: With that let’s get to it.

Brandon: This is a webinar on how to find, analyze and finance an incredible rental property deal.

Welcome everyone to the webinar on how to find, how to analyze and how to finance an incredible real estate deal. Those three things we are going to talk about today. Let me give you few quick webinar instructions. First of all you don’t need a microphone even though go2webinar said you might. Don’t worry about that. You don’t need one, I'm the only one talking so we won’t have a million people talking all at once. We are going to be very close to capping this webinar out, webinar cap is set to 1000 people and I had 2500 people sign up for the webinar. You think I'm crazy but trust me I know this only usually a third to half of the people show up for webinar. Usually somewhere around 40%. Rest of the people fall of and never actually watch it. Which is kind of sad but these are the action takers. First of all high five everyone here for begin an action taker and showing up. That said I caution you not to leave you might lose your spot. Just in case we hit that max, we very well might.

Couple of more housekeeping things. I'm going to try to record this webinar, I can’t guarantee that it’s actually going to be recorded. Go2webinar is a very finicky software that I tried to record many times and it does not record. If I can record it I will send you are replay tomorrow but if I can’t I apologize. If you’ve been on the webinar with me before sometimes ill record sometimes I'm not. It’s kind of a tossup, really annoying.

I think we are pretty much ready to get started. Let’s do this thing.

First of all I want to say thank you for showing up tonight. Thank you for taking action, for being somebody who showed up on time and present with us. I love this. You guys are action takers so thank you for giving me your time I know there are a lot of things you could be doing tonight, busy family life and all that, fact that you are spending it with me is an honor and I hope I can deliver some amazing content and amazing education and help you become a better, smarter real estate investor due what I'm going to talk about today. I mentioned earlier too but I'm going to cram a lot of information into what were are about to talk about. I highly recommend that you take some notes. Grab a piece of paper and a pencil and take some notes because seriously in going to give you so much information. This is crash course in finding, analyzing and financing property. With that in mind pay attention as close as you can, try to avoid evil cellphone which distracts you and Facebook and all that. Close your browser windows trust me I know how webinars work. When I have webinar and Facebook open I tend to go I don’t know what he said in the last five minutes. I want to encourage you, you’re here, give me your full attention and I’ll give you mine.

We are going to cover three man things that you already knew about. Talked about them before. We are going to talk about how to find properties even in a hot market. It’s a lot of places all around the country they are hot markets. We are going to talk about how to analyze so you don’t buy an absolutely terrible deal – that would be bad. We’ll talk about how to analyze those properties and we are going to talk about how to finance those properties even if you don’t have a lot of money. A lot of people know that I wrote the book The Book on Investing in Real Estate with No and Low Money Down. We are going to talk about a lot of strategies from that that you can use to invest in real estate even if don’t have a lot of money. That is generally everyone’s part of this webinar.

I’ve done this couple of times before, fairly similar, I actually changed much stuff today I just to make it a bit new information. When we’ve done this theme before people love financing part of it. Defiantly best content people like so stick around for that. I'm also going to be giving away at some point soon towards the end of the webinar a free BiggerPockets pro membership which is a $299 value. I'm going to give it to one of you on this webinar so stick around for that too and I’ll give that around later. I'm also going to tell you how you can get my book and you can get it for free later but we are going to deal with all that later.

Right now we are going to ask you a question. I’ve got a poll. Go2Webinars allows me to have polls so poll question just to have idea what everyone on here is doing. Is going to be what kind of investing are you interested in? That is the question. Go ahead and let me know what kind of investment you are interested in. you can choose multiple options if you want or you can just chose one. This will give me a good idea how I should cater my talk today, what kind of real estate is this audience today interested in. Go ahead and type it in, I’ll give you guys 30 second more and then we will move on.

92% of people here today are interested in rental properties. That’s great because I love rental properties. That’s my bread and butter. 55% of people are interested in house flipping. I also love house flipping and I did a lot of more in the past but I do a little of it now and I try do one right now, I'm going to talk about that later. I'm going to walk you guys trough an actual deal I'm trying to put together right now and I'm going to show you exactly how I'm putting it together. Or at least how I analyze that deal. You are going to analyze a real life deal that I offered on yesterday, this morning. 28% of people are interested in wholesaling. A wholesaling if you don’t know what that is finding good deals for house flippers and rental owners and then selling the deals to them quickly. Wholesaling is a very cool strategy. 13% of people are interested in notes, mortgages and paper and 6% are interested in something else other than that.

I’ve got one other poll I'm going to launch really quick just to get idea how many rental properties you currently own because 92% of you are interested in rental properties and I'm assuming some people are pretty experienced. Go ahead and just fill that out really quick. How many rental properties do you currently own and I’ll give you guys eight more seconds.

65% of people here have no rental properties so we are little bit leaning towards the newbie side. That’s okay, I love talking to newbies. 18% of people have one rental property. That’s a big chunk. 15% of people here have two to ten and 2% have 11+. We’ve got a good mix today. Hopefully I can cover both beginner aspect, keeping the cookies on the lower shelf and hopefully I’ll also be able to give you guys new information for those who are a bit more experienced some things you might learn.

One question before we get to actual how to find properties. Some people want to know a little bit of who we are. Let me give you a ten second description of who BiggerPockets is. BiggerPockets is a real estate investing social network, marketplace and information hub. It’s my assumption that everybody on this webinar is probably BiggerPockets member but if not basically we have social network, we have market place you can buy and sell deals or whatever else you need and people do deals all the time together and information hub. We are a hub of most information you will ever find in entire world on real estate investing stuff. Anything you want to know about you can find on BiggerPockets forums, blogs, our podcast, webinars like this, articles, private messages, conversations, build relations with people and get information that way. So much information it’s crazy. Little overwhelming but amazing. We are going to talk a little bit more on how to maybe process surf that later. Really quickly about me those people who don’t know who I am – my name is Brandon I'm a real estate investor. First and foremost I will always be a real estate investor. I love the game of real estate. I'm a VP of growth at BiggerPockets which means I spend a lot of my day hours working on growing of BiggerPockets on site and members themselves – how to make people better investors.

I'm also co-host of the BiggerPockets podcast which is a world’s largest and most downloaded real estate podcast in the world which is kind of awesome. I'm a musician. You can see my drum set behind me. I don’t ever play that – that’s what kind of musician I am. I do play guitar as well, I'm a blogger, I love to write, I'm an author too so I wrote a book a while ago. I'm writing another one now it’s going to be out in July and I'm a math nerd. Finally I'm a cat and dog lover. Some of you earlier already saw my dog Charlie but if not this is him. Isn’t he cute? He is probably the cutest dog ever. I'm sorry your dog is not this cute but there can only be one cutest dog ever and Charlie wins it. Little bit about my background in real estate. I’ve never shown this in my life this is a very first time in showing this picture. This is my very first investing property right here. That’s not my car I took this off the county website. This is the first property I ever bought back when I was 21 years old.

I bought this property for right around 83,000, rehab it for 20,000 while I was living in it and then I sold it for 139. I basically flipped my own homes so live and flip, a house hacking, whatever you want to call it that is what I did in this property. It was really nasty before. You can see now it is at least kind of cute but still it was cheap house, it was lower middleclass lower income area but again I was 21 years old. That’s what I did. I got in this game and I didn’t even know what I was doing. I got lucky with this property. I'm not going to say it was skill I got lucky and here’s why. I bought it when the market was at the peak and it was looking over the edge and I sold it on Halloween of 2007. Stock market was crazing all around and the real estate was dying and it was disastrous time and I got out just in time. I guess it thought me I was luck thank goodness I didn’t lose like a lot of people did but it also taught me to be more careful. I saw how close I was to being burned. That house a year after I sold it was listed at 110. Today it’s regained a little bit of value but I got out in time. That’s my fist property was a flip It was live-in.

My second property was this one. This one I bought right after that and again I didn’t really know what I was doing. I purchased it for 74. It is actually two houses on one lot. This is just a front house and there is another little house in the back. If you guys know my story this is a property that I bought and we later found out bunch of people had taken pictures of it that its Kurt Cobain’s very first childhood home. He actually lived in both houses, in back and front and people come by and take pictures all the time now I should probably plaque and charge money or something. Got it for 74,000, rehab it for 6,000. We went it today for 1045 and our cash flow after everything said and done all the bills all the expenses comes about $300 a month which is pretty awesome to have that extra $300 a month. When we were living there we were living almost free. We had font unit rented for a month we had back unit we lived in ourselves, the mortgage was 600 a month and we only had to pay the expenses like utilities and water, sewer, garbage. That’s an awesome way to start my career and I learned about the power of rental properties in that situation and I fell in love with rental properties.

Later on we flipped a bunch we bought bunch more rentals. Bunch of single families, bunch of single families that we turned into rental properties and then we bought some multi-families and I fell in love with multi families. Let me show you my favorite multi family. This is my apartment complex that me and my wife bought. Yes that is me in the same shirt I'm wearing today which is funny. I don’t have a lot of shirts. We purchased an apparent complex a 24 unit for $550,000 with almost no money down. Really my own time which time is money but I put a lot of work in this thing. With almost no money down, we rehabbed it with about $60,000 using other people’s money and we produce today around $3000 a month in cash flow. That goes up a little bit in some times of year and down in some times of the year but overall we are making $3000 in cash flow. It was when I bought this property that I quit my job, I was working in a bank, and I said I was done. I had all these rental properties I’ve this one, combined all the cash flow was enough that I didn’t have to work anymore. That was amazing.

However I quickly found out that being retired-ish when you are not really retired but managing rental properties was not it was cracked up to be. I was actually bored a lot so I ended up starting a blog and coming on BiggerPockets go help grow this site because now I can do both in the same time. Now I can do my passion of teaching and my passion of rental properties and all combined and occasion flip tossed into that. Couple of thigs. Can you get same results as me? I don’t know. Can you? I'm not guaranteeing anything so today is not about guaranteeing anything. I just want to give you background of my story. Everything I did was unique to me and I figured things out as I went. That said I'm not that successful compared to a whole lot of people out there especially people on BiggerPockets that I talk to that had been doing this for a long time. They are very successful and its rally really awesome. Jeremiah said my dog looks a lot like a cat. Okay, he kind of does. He’s actually smaller than a cat.

Based on my story there how will your story change, you don’t have to answer this I just want you to think going forward, if you no longer needed to work to pay the bills? That’s what happened to me. It was that tipping point where I didn’t need to pay the bills. The bills were paid. I'm not saying I was set for life, things happen, it can be national disaster that destroys it all. At that time I didn’t work for income anymore to pay the bills so question is how would your life change if you no longer needed to work to pay the bills? In your head answer that question and just think about that for a second. That’s what we are going to talk about today. We are talking how to buy rental properties the smart way to avoid all this.

Let’s talk about 11 ways to find great real estate deals, this can be rental or flip or wholesale. If you are just joining us please grab a pen, paper and jab this things down. I'm going to give you a lot of information and it’s very important that you write this stuff down because you will not remember and as you can tell I talk very quickly. Try to take some notes if you can and I’ll try to keep this moving a little bit slower.

Number one - the MLS. It is the easiest place to find real estate listings. A lot of the deals maybe 99% of the deals on MLS are not deals. What is the MLS? MLS is collection of all the properties that real estate agents are currently selling. It’s like a list but it’s all online. If you go to Zillow.com or Realtor.com or Trulia.com or RedFin.com those are all the sites that kind of search the MLS. If you are not real estate agent you will not have direct access to the MLS. Only agents can list and search the MLS with full power. You don’t have that super power if you are not real estate agent. That’s okay, you can find real estate agent they can help you find things on MLS. Property that I’ll show you in a little bit that I’m looking to buy for myself was on MLS. Agent called me and said “Hey Brandon there is this property keep dropping the price on I thought you might be interested looking in it” we’ll talk about it in a little bit.

Number two – for sale by owner. These are properties that have sign in the yard. There is one six blocks from my house I saw earlier and I'm going to call on it because just people who don’t want to sell with real estate agent will go and just stick a sign in their yard and say for sale by owner. Most for sale by owners are not very good deals. Here is why. A lot of times people are stingy and they don’t want to pay real estate agent so they stick sign and say we’ll let’s see if somebody will buy it for my price. 99% of deals that are for sale by owner are also not going to be very good deals. However you are not looking for 99%. When you are looking incredible deal. Today we are talking about how to find incredible rental property deal. You want the great one. How do you find them? You have to find that one in a hundred. You have to find that really, really good deal. If you want to supercharge your investment you have to find really good deal. For sale by owner you can definitely content the owners and see if they are willing to give you a good deal.

Number three – Direct Mail. This is the most popular method for wholesalers who have some money to spend on marketing. If you don’t know what the direct mail is let me try to explain it really quick. You ever seen those junk mail you get in the mail like from a credit card company. I get one all the time that says “You won” and got a key attached to it and there is a big picture of fancy convertible and it says that I won. I read closely and it says well I’ve got to take this car down to the local car dealership and test drive a car and then I’ll find out if I won. I’ll look even closer in fine print and it says that my chance of winning a car is one in 400 million but the chance to win a coffee cup is 399 million to 400 million. You get the idea, right? Why do they send those out? Here is why they send that pretty expensive piece of paper with key attached to it - its direct mail. They send thousands and thousands of those letters hoping that a small percentage will respond to them and small percentage of that will end up buying their product. Same thing with direct mail.

For example a very common strategy you are going to send out 5,000 mailers to absentee owners. What I mean by that owners that own property but don’t live in the property. What does that tell us? It’s probably a rental or could be inherited house. For whatever reason the owner doesn’t live in the property you can buy those lists from the company like Listsource.com. You can buy those lists, send out 5,000. Let’s just say you’ve got 5% of people to call you back. You get 250 phone calls from people that are interested in hearing what you’ve got to say. Now let’s just say out of those 250 phone calls you can close on in every 25. In another word you get ten deals out of that 5,000 mailer. Those numbers might not be exactly up to scale depending on your area. That’s the magic of direct mail.

You don’t need to get everyone, you need the 1% or the small portion. If you get ten deals and you made 5,000 on each of those that’s 50,000. How much did you spend on those mailers? 5,000 for stamps and paper. You spend 5000 you made 50,000 that is a lottery machine that I would love to play. That is direct mail. If you can crack that code you can do amazing thing but you are going to need some money to get started. If you are completely broke that is not the best way but everybody can save up little bit of money in their budget to try get some direct mail going.

If you don’t have a lot of money here is very inexpensive way to find real estate deals – that would be world famous Craigslist. We all use craigslist or have used it at one point in our lives. Craigslist is online classified section where anybody can post anything for sale. Real estate deals are prolific on it. They are not always good deals, like I said 99 compared to 1%. There’s two cool ways to use Craigslist. Number one – you can use it to search for people who are selling properties by owner. They put an ad up, I'm trying to sell my house. You can contact them to see if they want to sell. Number two – you can put an ad up there. What’s to stop you to after this webinar to go on Craigslist and writing an ad saying I buy houses in this town or in this county? Noting. It’s free. It will take you two minutes to do it.

What is going to stop you from renewing that ad every couple of days so it always show up the top of real estate section? Nothing. Only your own motivation is going to stop you from doing that. Doesn’t cost a penny to do that so go ahead and do that. The third avenue and most creative is this – Go on Craigslist, go to the rental property area and go and look on there for mom and pop landlords. How do you know they are mom and pop? Typically their listings are not that good. The property management companies are going to do really nice looking ads that have color and photos. You don’t want to deal with property management companies. You want to find mom and pop landlords that have for rent signs on Craigslist and you call them.

They put their phone number in the ad how much easier can this get. You call them and say “I'm a new investor, I really want to start investing in real estate and I saw you have rental and I might be interested in renting but are you interested in selling?” Sure 99% of the time they are going to say no. or at least 50%, I don’t know alto of people want to sell. 99% of the time it’s not going to be good deal but if only one in a hundred Craigslist numbers that you call are good deal how many you have to call then to get a good deal? Make a 100 phone calls.

How much would that take – ten a day for ten days? If you can get a deal in ten days because you make a hundred phone calls I don’t know what your numbers are get your mind working that way this is not impossible game especially if you don’t have much money. There are ways to do this. A lot of landlords suck at becoming a landlord. If you can contact them and say “I know you are renting this property are you interested in selling” a lot of them are “Oh he might save me from bankruptcy or losing this” because they are crappy landlords. You might be a good one. You might be good to flip the property or you might be good at wholesale deal. Craigslist can be awesome tool for finding good deals.

Driving for dollars. Driving for dollars is idea of getting in your car, throwing your kids in the backseat, put on the Barney video and drive around looking for good deals. You just drive. You don’t want to do it aimlessly. There is method to the madness in driving for dollars and there are some really good blogposts on BiggerPockets about it. Search on Google BiggerPockets driving for dollars and you’ll find them. You want to look for deals that look like they might be motivation to sell. It might mean long grass, it might be boarded up windows – huge sign that something going wrong, might be tarp on the roof, the property that I will show you later has a big tarp on the side because siding was bad. Things like that are signs of motivation. Notices taped to window, legal notices on the door, there are a lot of motivated people desperate to sell and they don’t know where to go, they don’t know what to do, their house is in shambles, they can’t sell trough real estate agent, what are they going to do? They are going to give it back to the bank? Not if you can talk to them first you never know what you might find. Again, driving for dollars is another hustle way to find good deals.

Another cool way is BiggerPockets marketplace. Deals get bought and sold on BiggerPockets marketplace a lot. What is BiggerPockets marketplace? You go there by going to BiggerPockets.com/marketplace. There people put teals to buy and sell. Dozens and dozens and dozens every day. A lot of stuff is going on there and alto of people are buying and selling and trading and making deals happen on the BiggerPockets marketplace. If you are looking for a deal why not post and ad in the marketplace that says I'm looking for a deal? There is thousands and thousands of people on the marketplace every day looking at it. Why not post ad saying I'm looking to help and investor. Is there investor in my area that I can work for, intern for, and volunteer for? Good way to get started. Marketplace is a powerful tool. You do have to be pro member to post in it but you can be free member just to scan it and read it.

Here is the strategy with Eviction rectors. Eviction records are public records which means every time a landlord files an eviction on a tenant that is part of the public record that means you can grab it and you can go and look at who is being evicted. Why is this important? Generally speaking every landlord goes through eviction, however bad landlords do a lot more evictions. They don’t have good screening processes, they let in wrong people, they get take advantage of and furthermore eviction is most stressful event landlord can go through business wise. Imagine this – you are a landlord, you are terrible at land lording and you rented to your cousins friend who is drug dealer and didn’t pay rent for a year and a half and no you are “I'm so tired of this I'm going to evict him.” You give it to your attorney and your attorney goes to evict him. Then you get a phone call and somebody says “My name is John, I'm trying to get into real estate and I really want to buy rental property and I'm just wondering if you have anything that you’d like to sell? I know I say in the newspaper that you were looking to sell or you are evicting a tenant are you interested in selling?” That is easiest sale person can ever make. Sucky landlords have been dealing with this for years and years and years and now all of the sudden someone saying can I just take that off your hands? I’ll take care of eviction. I’ve got this. That’s like greatest sale ever for finding good dals and it’s a 100% free. It’s free, people. I love this stuff. Eviction records – very cool.

If you want to buy a big property you want to look at a site called LoopNet or CoStar. LoopNet and CoStar are actually owned by the same company. They are billion dollar companies and they sell and broker big stuff. Ten million dollars and above generally. Then we have some smaller stuff in duplexes and triplexes but generally their bread and butter is big stuff. Here is secret with LoopNet and CoStar – you generally do not use those sites to find deals. You use those sites to find brokers who find you deals. You go on LoopNet and you can find out all the people who are listing these properties. You call them and say “Hey Mr. Johnson I don’t like deal that you have on LoopNet but here’s what I'm looking for, can you let me know if you find that?” You build relationships with these brokers. Time and time again for people who are big investors that do big stuff like Ken McElroy and Grant Cardone and Brian Burke those players that’s what they’re doing, building relationships with brokers. Its beautiful thing.

Online advertising. You could use Facebook or Google Ads to drive traffic to your We Buy Houses website. If you don’t have I Buy Houses Website you can pick it up online very easily. If you are a BiggerPockets pro member you get a discount on Lead Propeller which is absolute coolest software for building a website. I use it for my We Buy apartment’s website. You can do that, have an online ad to point there. There is little bit of learning curve there, I'm not going to lie so you probably want to hire a kid who knows what he’s doing with AdWords or something who can handle that for you. It’s not that complicated, it can be done. Facebook ads are very easy. We use Facebook ads to fill vacancies in our rentals sometimes. We just put Facebook post and sponsor it and we get 500 people in our area to see that we have a vacancy and it cost us 15 bucks. Online advertising – very cool.

Wholesaling. You can find deals from wholesalers. Wholesalers are people who find good deals, who know all the good strategies that we talked about and they find a great deal, they lock it up under contract and they sell you the contract. I don’t have time to go deep into wholesaling but two weeks ago I did a long webinar on how to be expert wholesaled. How to analyze wholesale deals, how to put wholesale deal together. If you want to check that out you can watch reply if you are pro member at BiggerPockets.com/proreplay. If you guys are pro members you can go and check that out in reply room.

Perhaps the most important of all of the ways to find a good real estate deal is passion. What do I mean by passion? Let me tell you about my 24 unit apartment complex that I bought. We bought that 24 unit apartment complex from a couple from our church who didn’t know owned real estate. I read Ken McElroy book The ABC of Real Estate Investing. I was obsessed with it, it was so good, it was all about buying apartment complexes and I said I'm going to do that, that’s what I'm going to do with my life. I flip my switch in my head and that is where I'm going. Then the next morning I was in a church and I was talking to this old guy, just retired, I'm like “I just read this really good book on investing in apartment complexes and that’s what I'm going to do with my life” he looks at me funny and says “That’s interesting Brandon because I have an apartment complex that we’re thinking about selling” Did I get lucky? Maybe.

But what’s that famous quote – the harder I work the luckier I seem to get. I think it originally was attributed to Tomas Jefferson but it wasn’t him. I attribute that to passion. I told ten people that day about that book and about what I wanted to do. He wasn’t the only person I told. I told everybody that I talked to about what I was looking for. I was passionate about it and I still am. I told everybody I knew about what I wanted, I was passionate about that and they made it happen. My people put that deal happen. That is what passion is, that is a great way to find deals. Passion about it and letting people know what you want. People like to help people succeed and reach their goals.

Next section of this thing – we are going to talk about how to analyze the deals. Let’s say you go to find a property – how’d you know that it’s a good deal? How do you know that you want to buy it and you’re not wasting your money? How do you know that you’re not going bankrupt and be one of those crappy landlords we talked about earlier? We are going to talk about how to analyze that rental property like that kid right there. He’s a smart analyzer.

When we are talking about analyzing properties we are talking about two things. I'm kind of specifically at this point talking about rental properties. If you don’t care about rental properties you are in the 8% that didn’t care about rentals just bear with me one moment. When you are buying rentals you care about two things primarily. Cash flow and appreciation. Cash flow is how much money you have left in your pocket at the end of the month. Appreciation is how much money you build over time by the property value going up. Appreciation is kind of a crystal ball thing, we don’t know exactly how much appreciation something is going to get. No way of predicting that, sometimes property values just go down. What I care about most investors care about is cash flow. That is a number we care about. Appreciation is icing on the cake it is not the cake. The cake is cash flow.

How to analyze a rental property? I'm going to talk about two different methods that people use. I'm going to call this one The Bankruptcy method. This is how people go bankrupt investing in real estate. Bankruptcy method looks like this – you got income, you’ve got expenses. Your rental income minus your expenses – that’s what cash flow is. Let say you made $1000 from rent and mortgage payment was $750. What did you just make? $250. No that’s not what you have. That’s the bankruptcy method. That’s how you get bankrupt and people do it all the time.

They buy crappy properties that they pay way too much money for because they are using the bankruptcy method. Some people are smarter than that and using the second part of the bankruptcy method but still bad and that is they add in property taxed and insurance. That’s good. Let’s just say that $750 we mentioned minute ago included insurance and taxes. We are at rental income of $1000 a month and expense are $750 including taxes and insurance. Great. Now you’ve got $250 you can spend in casino, right? That would be the bankruptcy method.

Let’s talk about BiggerPockets method of analyzing properties or the smart guy method. You want to include all of the income and all of the expenses. In the income you want to make sure you include laundry and storage fees and other fees and charges. Now that’s not usually a big deal. Most of the time there aren’t extra income things you’re not thing about. Especially if you are just getting started. Usually just rent. Maybe a storage room. Expenses are where everyone messes this up. They forget expenses things like the flood insurance if it’s in the floods zone, the vacancy factor, the maintenance, the repairs, the capital expenditures, water, sewer, garbage fees, permits, HOA fees and other thins. Every community might have different expense. If you forget those things you are going to be in some trouble. Let me transition this to top ten mistakes that real estate investors make when analyzing deals. These are ten mistakes that a lot of newbies make. Don’t make these mistakes.

Number ten – relying heavily on rule of thumb. I'm not going to go in what rules of thumb are. Just trust me that there are rules of thumb that you can use to quickly analyze the deal. I actually like to use them occasionally. If you buy a property based on rule of thumb you are going to buy a bad deal potentially because rule of thumb is meant to be quick but not to be ultimate decision makers. If you want to know what those are write this down – 2% rule, 50% rule, 70% rule.

Number nine – underestimating the repair costs. People are “Hey this property I think it will take $5,000 worth of paint and carpet to fix it up.” Then they get in there and start working or get contractor in there and it’s like $10,000 or $15,000 or $20,000 and all of the sudden their great investment is crappy investment maybe an upside-down investment.

Number eight – people who don’t include closing costs. When you buy a property and when you sell a property you pay several thousand dollars in closing costs. That can be pretty hefty and if you don’t include that your return on investment what you think you are going to make might be pretty crappy.

Number seven – overestimating the ARV. ARV or after repair value is how much its worth after its done or rental income is how much money is going to bring every month. Flippers and landlords both screw this up and that is the future idea what’s this going to rent for. I think this will rent for 1000 a month. No it won’t, it will rent for 800, all of the others rent for 800 yours isn’t going to be any different. Or I think this will be worth 170,000. No it won’t it will be worth 125,000. Basically there was one time I flipped a house and I thought I was going to sell for 170 and I didn’t do numbers very good and I sold for 125 and I lost two years of my life fixing this up and selling it.

Number six – counting on appreciation to bail you out. If you buy a crappy deal hoping appreciation to bail you out it may never bail you out. Or maybe take you 20 or 30 years to bail you out. Never buy a bad deal just hoping the appreciation will bail you out. That’s called gambling and only time you should do that is if you have a lot of money to lose. Obviously gamblers sometimes win big. A lot of people made money on appreciation but if you are buying bad deals especially at the start hoping the appreciation will help you, you are in trouble.

Number five – relying only on pro-forma from the broker. If those are the numbers that you’re looking at when you are analyzing your deal and you’re not looking at your own numbers and your own number crunching you’ve got a problem. Never rely on numbers given to you by sales document or by real estate agent. Real estate agents do not what they’re talking about when they’re trying to sell a rental property. Very few of them do, maybe 1%. You can’t rely on your agent help you do the math.

Number four – not planning for property management. Now I'm not saying you can’t manage on your own – I mange on my own. If you don’t plan on property management and what I mean by that is if you don’t budget for property management you are going to be in serious trouble. Some day you are going to be so successful and you are going to realize that you bought yourself a job. You can’t go and give it to property management now because you don’t have money for it. Now you are stuck managing properties for the rest of your life until you give up and you go bankrupt and you cry. That’s the problem. People buy properties saying I can handle this. This is what I did. When I was stating everything looked good because I could handle myself now today all that cash flow you saw earlier its great but if we suddenly gave away all of our property managed a good chunk of that would be gone and I would not have financial freedom that I have today. That is mistake that learned. I corrected since then and now whenever I analyze deals I always include property management in the numbers.

Number three – forgetting to include vacancy cost or holding costs. Whether you’re flipping or whether you’re rental there are two things called vacancy or holding cost. Vacancy is how much time before it gets rented in between rentals. Let’s say person leaves and it’s vacant for a month that’s one twelfth of year that’s a good portion of your year you need to make sure your account for. Holding cost, same thing for a flip, holding can be several thousand dollars a month and if takes it six months to sell it there goes most of your profit potentially so you have to make sure to calculate those numbers.

Number two – forgetting to plan for CapX. This is on a rental side. CapX is those big ticket items that of every ten-twenty years. New roof, new driveway, new sighting, new appliances. They don’t happen all the time but they do happen and you’ve got to save up for them and plan for them. I always budget at least 3% to 5%, 6% for CapX depending on the age of the building and how old it is.

Number one – not doing analysis at all. This is a huge mistake that people make all the time. They don’t do analysis and as a result they end up buying bad deals. They spend more time picking up their wardrobe then they do picking up rental or their next flip. It’s a terrible mistake but most people don’t do analysis or they do it on a napkin or they do it in their head. I'm smart I can do it in my head. No you can’t. Trust me. There is too many variables. You need spreadsheet, you need a big piece of paper, you need to take your time and it can be done by hand. You can sit down 8 sheet paper and hope that you remember all these expenses.

What would happen to your financial goals if you made one of these mistakes? If you totally forgot about CapX and all of the sudden had $10,000 bill on the roof five years later. What happens if you didn’t plan for property management and now you want to go on vacation and you can’t afford it? What happens if you didn’t plan on vacancy factor? Ten percent of your income is gone every year because you didn’t plan for it. You bought a deal you thought it was cash flowing but didn’t. What if just one of those number wasn’t in there? What would happen to your financial goals? I think that’s important question to ask because people make these mistakes.

When you’re getting started especially you make a lot of mistakes. What BiggerPockets does and one of the ways BiggerPockets helps people become better investors is by helping them analyze property. We are actually going to walk through analysis together to make you not make these mistakes. To do that I'm going to be using the BiggerPockets property analysis software. If you guys want to follow along you can just watch on my screen. BiggerPockets.com/analysis is where you go to actual access that area of the site. Again, you can do this by hand if you want to do it slow way but you can’t also do it with calculator online.

511 Bender Lane in Montesano. If you run an offer on this property its fine. Let me just show you. My agent called me the other day and said “Hey this property is dropping price, started at 120 they are down to 97, and it’s a good property.” It’s owned by housing and urban developing of United States government. $97,000 and it looks kind of nice. You can see inside, it actually looks half decent. I was pretty impressed by it. It has little fire stove there. Got nice little back yard, big garage. It looks like it could be pretty decent house. I can do flip or rental with this. It looks interesting for both those things. Here is what I'm going to do BiggerPockets.com/analysis looks like this. There might be a different couple there we have pictures rotating and I'm going to click analysis because I want to make this go faster. I'm going to show you what I did. What I'm actually doing is using wholesaling calculator. There is a reason why I’m using wholesaling calculator and it is because wholesaler calculator I can actually put zero for wholesale fee so I can find out how much I should pay.

You can take wholesaling calculator and replace it with words how much should I pay calculator. That’s what I did. I put in the address, I put in information, I put the picture of the property, I put description and then I chose rental. I could chose rental or flip, this time I want to run it as a rental. I enter all steps into process, 139 after repair value, I want to get 12% cash on cash return on my investment, I want $90,000 loan on 5% advertised for 30 years. If you don’t know any of these numbers it’s not a big deal while you walk through the calculator all you do is hover over these question marks and it tells you. Next stop estimated repair cost, I think about $15,000, purchase closing cost $2500, total gross rent $950 – I think that might be short but I want to estimate conservatively, property taxes I looked that up on the county record, put in the expenses that the landlord would have to pay, I put in variable expenses, then I calculate results. This is page four of the calculator, you can see here that these four numbers are the most important. First of all I'm allowed to offer them $86,000 for this property.

They’re asking 97 and my numbers came out to 86. I'm pretty close to what actually make sense. I would get 12% ROI and remember because I used wholesaling calculator there is wholesaling profit zero dollars. I can also see some other things like income. What kind of cash flow would I get? $135 a month. Not a lot but I need $13,000 to buy this property. I can scroll down and see what it looks like in year one, two, three, ten, twenty, thirty. I look at the value on the graph, I can learn all sorts of the cool stuff including 50% rule. I can do all stuff using this calculator I can also download a PDF. Why is this PDF important? One very good reason. If you are trying to convince lender to lend on a property they want you to be organized. If you are trying to convince a partner to go on a deal with you they want you to be organized and know your numbers. The better organized you are the better you are going to explain why a deal is a good deal.

The more chance you have to get it funded. Did anybody have trouble convincing their spouse about their air brain ideas? I know I do sometimes. If you can present this in nice put together formula like this it can go a long way as helping to convince somebody that this is a good deal. For another reason it helps you figure it out. Whenever I go look at the property I do an analysis first, I print it out and I went by the hose and I looked around and looked through the windows because it was vacant and I had this with me so I could look at the property and look at the numbers. I could also just take out my phone and see it on there but it’s not quite mobile friendly yet but that should be done in the next couple of weeks. That is the BiggerPockets calculator. You have to be pro member to use it full time. You get 5 free uses if you are a pro member,

For those people who are pros let me just explain few things really quick and if you are not pro I’ll explain what you can do to become a pro. Basically by being a BiggerPockets pro member you get unlimited use of the BiggerPockets analysis software and that is the rental property calculator, house flipping calculator and wholesaling calculator which I find incredibly valuable for both reasons. I almost use wholesaling one almost exclusively even though other ones exist just because wholesaling one can do most of what others can but more. You can get unlimited access to that, BiggerPockets pro member has other cool things too like you can post ads in the marketplace.

If you are looking for a good deal you can post on the marketplace. Whatever you need, do you need lending, do you need funding, ask yourself that question right now what you need? Pro members I'm talking to you now what do you need in your business right now? Is it lander is it a partner is it a mentor is it a deal? What do you need? If you are a pro member go and post tonight you get unlimited aces to it. You can’t spam, you get one ad but you get unlimited access to the marketplace if you are a pro member so take advantage of that pro members. You can help your profile on BiggerPockets stand out with an enhanced forum signature, you can have profile video to your profile which is a huge amount of trust and credibility and you can get that little pro badge that also builds a lot of credibility.

Let’s say someone on the site goes and ask me “Hey Brandon can I work with you on a deal? I love to learn from you and I want to partner with you on a deal.” What the first thing I look for? I go to their profile and see if they have a good picture. I want to know if they are a real person. Anybody can have a good picture so I look for a video. If they have video I'm instantly 100 more times likely to trust them and to work with them. Simple fact of human nature video just communicates trust so much better. If they are pro member that means they are paying money which means they’re serious about doing business. If someone wants to work with me and they’re not a pro member I wonder if they are serious about real estate or are they just another of the people who come to BiggerPockets, flash and pan and then they leave.

BiggerPockets pro member lets people know you are serious and you try to stand out as somebody who’s taking action. You also get more keyword alerts. Be notified about things that mater to you. BiggerPockets/alerts. If you put Seattle and multifamily and I have alert set for both those terms if someone posts forum post that has a word Seattle and multifamily I'm going to get notified about it via my phone. I have it setup so it text messages me. Pros can do that. You get more keywords alert and you get SMS for being a pro member. If you are looking for a deal put the name of the town you are looking for deals in that way when someone posts a deal in a market in your town you’ll be notified about it. It’s simple to find deals that way. Also you get increased networking abilities trough BiggerPockets.com/meet. You can especially find people all across BiggerPockets do variety of things.

Say if you want to find a lender in Georgia or you want to find house flipper to sell your deal to who’s in New York City. You can go on BiggerPockets.com/meet, you can search for members specific for zip code in America and in vicinity around that. It’s the coolest tool ever I use it all the time. I love this thing. You can find people all across the country and in your area in 100 miles radius. Tonight, actually, I have a local meetup in my area. Very first Grays Harbor BiggerPockets meetup tonight. I'm pretty excited about that. I organize stuff like that trough BiggerPockets.com/meet. Good way for me to exchange ideas with people and do deals together and work together. You can download unlimited files and forms in the fireplace by being a pro, you expand private message abilities, add extra keywords and you get to see who’s checking out your profile. Finally, you might be a pro member you might want to be a pro member to help support the site that had changed how people build wealth in America.

A lot of people just support BiggerPockets by being a pro member so we can continue to develop more and more tools to help people make more money. You might want to become BiggerPockets pro member for four reasons I’ve got here. Number one – if you are word about buying bad deal run the numbers trough the analysis calculator. You can do it by hand if you want to do it slow way, you might forget something. If you don’t want to forget something just run it through analysis calculator. If you need lenders, partners on properties you can use BiggerPockets marketplace to find that. You can also use video to upload a video of yourself to try instill trust.

If you need to connect to investors who can help you whatever you need /meet can help you connect with people. If you looking to take noticed by community by someone who takes action someone who’s serious about this game you can noticed by community by having pro membership and if you want to support BiggerPockets. Those are the five reasons why you may want to be BiggerPockets pro.

Let’s move on to talk about how to finance a rental property even if you don’t have alto of money.

Number one way – cash. That’s the obvious one. That’s what most people think real estate investors do. They don’t even realize there are these 11 things we are going to talk about. They think cash is only way people do it. If you have it nothing wrong with that. I do caution people if you are going to use all cash to invest in rental property be sure you do your math even better. Having money makes you dangerous. It makes it like walking with a loaded shotgun without training how to sue it. Do the math right, spend even more time educating yourself. And don’t waste that money.

Number two – conventional loans. This is the idea of going to a bank and getting a normal loan. 20% down, 25% down. You find $100,000 property you put $25,000 down they give you $75,000 mortgage. Very typical. Normally that works fairly well in the beginning if you have good income and good job. However it can be tough the more properties you get to get conventional financing. You can’t usually have more than three or four.

Portfolio loans are one of my favorite. Portfolio loans are banks that are smaller banks and essentially what they are is they are in house loans. They don’t sell them to the government, Fanny May, Freddie Mack, pseudo-government conversation. They keep them in house which means they have rules they have to fit you in. when you go conventional you have to fit square peg into a square hole. You have to fit otherwise the government won’t let you do it. Portfolio loan is kept in house. I use those a lot. How do you find portfolio lender? You pick up the phone and call. Usually the small bank, small branches like they have less than a dozen branches. They are community banks, usually in the suburbs, they are not Bank of America, Wells Fargo - things like that. They’re smaller. Portfolio loans are good way. You can also find them talk to other investors in your area, in your state, in your county where you are getting your loans from. Again, if you are pro member use BiggerPockets.com/meet. Reach out to some people that are in your area like “Hey bill I see you are land lording this area I'm wondering if you have any idea where I can get a mortgage?” what powerful way to get a loan.

FHA loans. If you want to live in a property and invest in it you can get FHA loan which is 3.5% down. That’s a phenomenally good deal. If you want more information on that it’s in my book or you can get more information on BiggerPockets about it. Very cool loan but you have to live in there for at least a year.

Same apply for 203K loan. 203K loan is loan in which repairs are built into it. Repairs are factored into the loan. You can borrow the entire amount of the property plus all the repairs and you only have to pay 3.5% of that total. Let’s say it was $100,000 property and it needed $50,000 worth of work. Normally a person would have to come up with $50,000 of cash to buy that property and then get a loan on the rest but you can actually finance the money in there and you pay 3.5% of the total 150.

VA or USDA loans. These are also owner occupied loans. You have to live in the property for almost a year. VA you have to be a veteran. USDA is same organization that certified your ground beef and that is US Department of Agriculture. Cool thing about VA and USDA 0% down loans they still do. VA if you are a veteran or family member of one or USDA you have to live in rural area. If you live in middle of the city or Chicago or Denver or LA you probably can’t use USDA.

Seller financing. That’s how I got my apartment complex. That older couple they financed apartment for me because they wanted to retire, they wanted to get monthly income. Instead of me going to the bank I just pay them every month for the property. Every month I give them $3700 and that funds their retirement. Someday I’ll sell the apartment complex probably with seller financing because now I want my retirement to be paid for that way. Roughly third of all houses in America are owned free and clear which means they are prime for seller financing.

Next one is Partnerships. Partnership is fantastic. I love them because you can work with people that have what you don’t have. If you don’t have good enough credit work with someone who’s got good credit. If you don’t have enough cash work with someone who’s got cash. I got a triplex that I bought I found some partner that wanted to go on a deal with me. I found a really good deal and said “If you guys put the down payment down for the property will manage the property myself and I found it. I won’t put any money into it but ill mange it, you put down payment down, we’ll get a mortgage on the rest and we’ll got 50-50 on it” that’s one of my best properties. Its amazingly good triplex in my town that I love and I got it with nothing down because I worked with somebody who had something that I didn’t have, that was cash and I had something they didn’t have that’s motivation and the deal and experience. Find somebody who can work with you and make that happen.

Next one – Hard money. If you are flipping you can hard money loan on your flip. It’s expensive. Hard money loan is very high interest short term loan. 10, 12, 15% interest with a lot of big fees on top of that. But if you are flipping just include those numbers in your analysis. If you are a landlord and trying to buy a rental property you can also use hard money but be careful. You can buy property with hard money and refinance it with a bank. That’s a little bit more complicated strategy but I did that one a lot. I love that strategy.

Next you can do Private Money. Private money is kind of like hard money but less professional. It’s like individuals that you might now and have relationship with want to earn more money than what they’re earning on stock market or CD. Great Aunt Betty is getting 2.5% on her bank CD and you can be “Hey Betty why don’t I give you 8% your just fund this rental property for me?” Then she’s happy she’s making three times income she did before, you’re happy because you don’t have to go to the bank – everybody wins. Private money - that’s the future where most real estate investors eventually end up.

Next – Syndication. If you want to do a big deal you’ve got syndication. Syndication is idea putting together multiple people. You are going to put 100,000, you are going to put 50,000, you are going to put 100,000 and we are going to buy this 8 million dollar apartment complex together. That’s syndication. That gets way more complex and we have talk about today but that is avenue a lot of people like. Brian Burke and Ken McElroy use a lot. You can learn a lot about that on podcast just look for podcast with Ken McElroy or Brian Burke. Even Ben Leibowitz we talked with him a lot about syndication so check those out.

Finally the last option is creative combinations. What do I mean by creative combinations? Creative combinations is idea of pulling together a lot of different strategies into one. Almost every deal I’ve done was been that way. Think of the apartment complex that I got. I got this good deal from this couple in my church, they agreed to do a lease option, triple net lease option which I didn’t even cover in this list but that’s another thing I talk about in the book, first the first year. In the meantime I would be able to save the cash flow from the property to use for a small down payment.

I didn’t have to come up with it myself they agreed to let me finance that in there using the cash flow. Then I went and contacted a partner, my dad, and I said “Hey dad do you want 50-50 on a deal? I just need all the repair money on the property?” he then did “I don’t have a money” I'm like you have a line of credit on your house. We used home equity line of credit also which I didn’t cover in this list which I covered din the book, to fund the repairs on this. Then we went and used seller financing. We converted triple net leases with seller financing.

I know this is overwhelming if you’re brand new to real estate your mind is exploding right now you have no idea what I'm talking about. I used four different methods and I'm working on my fifth to put together $550,000 apartment complex purchase using none of my own money. It’s not because I'm super smart and super talented, it’s because I'm creative, because I had to be. I didn’t have money when I as 25 years old to buy apartment complex so I could do one of two things. I could sit out, I could do nothing, I could wait to save my money until I'm 50 or I could choose to be creative, I could choose to take action and that’s what I did.

That is kind of 12 ways to finance rental property. We are going to move on and do some question answer time.

We are going to end webinar there. Normally we are going half hour of question and answer time where people can ask about anything, about webinar, about just real estate in general and I just kind of leave it open for questions.

I'm going to live it there because I want to encourage you if you want to take part of that question and answer time to show up and come to the next BiggerPockets webinar. As we talked about it earlier you can sign up at BiggerPockets.com/webinar or you can just text on your phone – text number 33444. Send a message to that number and the only word you want to include in there is BPWEBINAR and just follow the instructions that you get back. I hope to see you on the future webinar. Again, we try to do them every Thursday, the date might be changing a little bit, don’t worry about that just go ahead and text that number and you’ll find next one is. With that I'm going to hand over to Josh.

Josh: Hopefully you enjoyed that webinar. Lots and lots of great information as we promised. Again apologies for the long lead up but we hope it was worth it. Definitely one of our more popular webinars and again if you are interested in hearing more webinars like this you can go to BiggerPockets.com/webinar to sign up or you can text BPWEBINAR to 33444 and that’s it.

This is the BiggerPockets podcast show 120. You can check the show notes at BiggerPockets.com/show120. If you are not already actively engaged on the BiggerPockets community please jump in, check us out, go on the forums, BiggerPockets.com/forums, create account at BiggerPockets.com and get involved in network and make things happen.

Brandon: We’ll see you guys on the next podcast and hopefully on the next webinar.

Josh: If you haven’t already subscribe to the AskBP podcast please go ahead and check it out at BiggerPockets.com/askbp. I'm Josh Dorkin, signing off.

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