BiggerPockets Podcast 134 with Terry Adams Transcript

Link to show: BP Podcast 134: Creative Finance and Gaining a Millionaire Mindset with Pro BMX Rider Terry Adams

Josh: This is the BiggerPockets Podcast, Show 134.

Terry: I want to be a millionaire. I want to say that my net worth is at a million. And I’m happy to say that with investing in real estate, it was relatively easy to make those numbers grow.

You’re listening to BiggerPockets Radio. Simplifying real estate for investors large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place.

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

Brandon: What up? I feel pretty cool today because we are talking to a cool guy. And I’m not a cool guy normally, but today, I feel a little cooler.

Josh: Yeah, well, you know, you need it.

Brandon: I do need it. I’m like, the nerdy, white kid that gets beat up a lot.

Josh: Is that why you pick fights with guys bigger than you wherever you go?

Brandon: I didn’t pick a fight with today’s guest. We just got done recording and I didn’t. I should have.

Josh: You didn’t. Yeah. That would have been funny. I challenge you to a bike-off.

Brandon: I could do that. Yeah, today’s show, you guys are going to love this. This guy is a professional BMX bike rider, does some amazing stuff. I was actually watching some YouTube just a little bit ago. He was on Ellen, the show Ellen. He’s done some amazing stuff.

Josh: He was on Glee.

Brandon: He was on Glee. We’ll put a link to the Ellen thing. I’ll actually embed the YouTube video on the Show Notes page at BiggerPockets.com/Show134 so make sure you check that out. It’s incredible what he can do. We’ll get to that in a minute, but before we do—why don’t we come to today’s Quick Tip?

Today’s Quick Tip is actually something based on something we’re going to talk about later in the show. In the show, the guest mentioned the idea of how a property manager can help you find good deals so I want to expand on that a little bit. I had a conversation with a guy—we went out to lunch—a BP member a few weeks ago—and he asked me what he should do to get started finding deals. He can’t find them on the MLS and I said, here’s a very, very simple thing to do.

Go every week to one local property management company and just go introduce yourself and say hello and tell them you’re looking for properties—if they have any owners that want to sell, you want to sell. I mean, I even told them to bring donuts if you have to. Make them love you. Because they’re usually like—I mean this sounds really, really like—I’m stereotyping, but most property management companies are older women that work there. I see it all the time. They’re like, 50-60-year-old women that work there.

Josh: Way to do it, man. Way to go there. You had to do it. You couldn’t control yourself.

Brandon: I couldn’t control myself.

Josh: Like women named Edith and Gertrude. Is that kind of what you’re saying—

Brandon: Oftentimes, they are older women. So if you go there—I don’t know. They like me. Brandon’s in here. I don’t know. I built that relationship because I’m like the young guy that’s eager about real estate. So build that relationship. Bring them donuts if you need to. And every week, go to different ones so you won’t repeat them—I don’t know, once every month or two, and just let them know you’re looking for deals. If they have any owners that want to sell, you’d love to get in touch with them. They’re happy to give leads because they’re hoping you’ll keep their business with them instead of taking it elsewhere. There you go. That’s a Quick Tip. That was kind of long.

Josh: Good tip. A little long but solid except for the part where you—

Brandon: That’s what she said.

Josh: Insulted the managers. Did you really? All right. So, let’s get to today’s sponsor.

Brandon: All right, our sponsor today is Residential Investor One, a powerful cooperative that connects real estate investors with the resources, bargaining power, and tools that they need to properly run and scale their business. In other words, you can access better vendor discounts for the services that you care about and start saving money now. Like, I’m talking up to 60% in certain categories. So to find out if Residential Investor One cooperative is right for you, there is no obligation. Just call to find out how much Residential Investor One can save you. Check them out on the Show Notes page at BiggerPockets.com/Show134 or at ResidentialInvestorOne.com/BiggerPockets.

Josh: All right. Today’s show, we’ve got a guy who, when I told my brother-in-law, Jesse, about it, he was very excited. Let’s just say this guy is a superstar. This guy is a gold medal winner—

Brandon: Not in the Olympics.

Josh: X-Games, but gold medal winner in the X-Games is pretty much a gold medal in the Olympics because they don’t do that in the Olympics so it’s the same. Wow. We haven’t even got—Terry, if you’re listening, I apologize in advance and it’s a good thing that you didn’t hear this before we did our interview because we are recording this after.

Brandon: I just want people to know he’s not like Michael Phelps. He didn’t swim, you know. I’m setting you up for a cooler thing, which is the X-Games. I’m building him up.

Josh: Okay. Yeah. So he’s an artist. What this guy does on a bike is unbelievable. What’s really cool is, he’s smart enough to know he’s not going to be making money as a biker forever so he sought to get into real estate and we really get to dig in and talk about mindset and other things. The guy I’m talking about, his name is Terry Adams, and I’m super excited to bring him. So let’s get to the show.

Terry, it’s a pleasure to have you on the show. Thanks for joining us.

Terry: Thanks for having me on, man. Greatly appreciate it.

Brandon: Yeah, so I don’t know very much about you except for your name, when I type into Google, it comes up with like a lot of results. So apparently people know who you are.

Josh: Seriously?

Brandon: That’s really all I know.

Josh: I apologize for my co-host. There’s one of those guests who should be known and guests who shouldn’t be known. He’s kind of a big deal, Brandon.

Brandon: Tell me why. Terry, what do you do?

Terry: To make a really long story short, I’m a professional BMX rider and BMXers—there are a ton of different types of BMXers. BMX racing. Guys racing. BMX parks, guys doing the ramps. And what I do is BMX flatland, and it’s a very niche side of the sport. It’s almost like dancing on the bike and it’s all done on the flat land. So I’ve kind of built my career around BMX flatland around the last 20 years or so.

Brandon: Very cool.

Josh: And by career, you mean something like what? Not a big deal, but I think you won a gold medal. Not really a big deal, we don’t have to talk about the gold medal that you won, but I think you won a gold medal, didn’t you?

Terry: Yeah. You can mention it, yeah. Yeah. I mean, it’s cool because as small as flatland is, I’ve kind of learned how to promote myself just as an athlete or a BMX rider and that’s how I’ve kind of stood out in the industry so to be as successful as I am as far as obtaining sponsors, because flatland may be small but if I can get flatland in all these media outlets just like everyone else, then I’m able to obtain the sponsors that the other riders are getting. So that’s kind of how I’ve ran my gig for a while and it’s worked out for me. So I’m super happy about it.

Josh: That’s great. And I will tell you that when my brother-in-law found out that we were interviewing you, he lost his mind.

Terry: That’s awesome.

Josh: Yeah, man. We got you here not to talk about BMX, obviously—we’re happy to talk about it—we got you here because you are a real estate investor, correct?

Terry: That is correct, yeah.

Josh: All right. So let’s get into that. Why would a guy like you—you’re out there working your job, which is to be a professional athlete—why did you decide to get into property? You could have put money in the market. I’m sure you have put money elsewhere. Why real estate?

Terry: I guess the easiest way for me to put it is riding a bike for a living—I kind of grew up wanting to ride bikes. It was a dream of mine. It was like, 100% I was a kid with my whole walls plastered with guys that rode bikes. Well, at the time as a kid, I didn’t really realize that those guys were actually making money doing it or they had monthly salaries doing it. I just wanted to be as good as those guys and be in the magazines. My focus was just being in the magazine, just being in the magazines and the videos, which were VHS tapes back then—I became obsessed with it enough to where I put myself in the media so much, I kind of earned a spot for myself to obtain those sponsors that would actually pay me a monthly salary. Well then, when I got to that point, it kind of didn’t really feel like a job. It was kind of like, man, I’m riding my bike, I’m kind of living my childhood dream. These companies are paying me to do what I love, and so I started to think honestly—what am I going to do after this? What can I do to create the same feeling, and the feeling that I got was just getting checks in the mail for doing nothing. So I kind of landed on real estate for that main reason, is that when you invest in a rental property, besides the fact that you’re building wealth every month because your tenants are putting money into your equity of your home—you are getting these checks in the mail and it kind of felt exactly the same way as it did as being sponsored by these companies. So that’s kind of what got my interested, is I don’t ever want this life to end, so when the sponsors and the bike riding career does end, how can I supplement that income and keep doing the same thing that I’m doing, which is essentially just riding my bike and doing kind of whatever I want to do.

Josh: So there’s no like geriatric BMX tour?

Terry: Nah.

Josh: All right. I mean, golf, you’ve got it. You never know.

Terry: We have a world circuit, and that circuit’s four stops. Sometimes, I attend it. Sometimes, I don’t. One of the stops on the circuits is here in New Orleans. I’m one of the organizers of that stop and it’s just in a month on the 25th.

Josh: Cool. Well, if it’s ever in Denver, please come on and let us know, man. We’d love to come and check it out.

Terry: Will do.

Josh: Cool. So you chose real estate and I think a lot of people agree with you about the checks in the mail thing. It’s kind of nice, on the 1st of the month, go to the mailbox and suddenly, you’ve got checks and you’ve got money in the bank and that’s a beautiful thing. So let’s get into your beginnings.

Before the show, we talked about—you had talked about making mistakes and wanting to be this guy who could help spread the word to people who are just getting started about what this thing is like. A) I love that—we really appreciate people who are open about the ups and the downs and let’s kind of go into the very beginning. What was the first property that you looked at? What was that deal like? Walk us through it.

Terry: It actually started off—a lot of my family grew up in trailers and the first property that I had was a trailer. When I had that trailer, I didn’t have the mindset that I had now. I was basically just living comfortable. In my head, I’m like, I got these couple of companies that are paying me. Man, I’m going to stay in this trailer. I’m going to pay it off and I’m going to stay in here. This is going to be my forever home. At that point in my life, I didn’t really realize that I could have more or that I even wanted more. There was a couple of times where I even considered taking that mobile home and putting bricks over it, like hurricane-proofing that thing because in my mind, I kind of felt like—not that that’s all I could ever have, but that’s kind of where my mindset was. A lot of my family growing up didn’t really teach me to invest money. Basically, I was comfortable where I was at. I came across—a good friend of mine, Bobby Carter, suggested a book to me—Secrets of the Millionaire Mind. That book was basically a great starting point for me. I’m not a big reader but it was very simplistic to where I understood it and it was basically changing my mindset about money, is what the whole book was about. And at that point in my life, I didn’t have a mindset about money. My mindset about money was just I want to get this trailer paid off and I’m going to be sitting pretty. Never in my wildest dreams did I thought—I didn’t even know what an asset was or how to acquire one.

So after reading that book, to say it opened my eyes was an understatement. I completely just lost it when I realized that you could create passive income and passive income, obviously being money that was created from your investments—that passive income just reminded me of what I was already getting. So that first step was taking that trailer, buying me a home, and using that trailer as rental property. And I still have that trailer and still use it as rental property today.

Brandon: That’s awesome. I want to talk about that first one. How did you find tenants when you first started? How did you know what you were doing? Did you read books or did you just guess and figure it out? How’d that first time go as a landlord?

Terry: Yeah, I mean, I can remember one of the first properties that we bought, my wife and I. Well, the first one I bought was in Michigan. And I’m in Louisiana. But I just heard that my friend was buying homes in Michigan for real cheap, because you can. Because the auto industry crashed and what not, so he was getting houses as low as $500 or $10,000, $15,000. So I was watching him kind of buy a lot of them. So I said, man, I want to do that. So the first thing I did was just get on the phone and I just kind of basically grew the balls to buy this thing over the phone. I saved up some cash. Over there, you had to buy the property cash because most of the offers come in cash and you just can’t get financing from them. A lot of the investors are coming in from out of state.

So I just grew a pair and called up and did everything over the phone. Had the real estate agent sign at closing as power of attorney and I bought that with cash. And then when I realized that money started coming in, I was kind of at a point where like, man, I’m in my new house, the trailer’s rented out, and now this passive income that’s coming in is basically paying half of my house note right now. And it was kind of getting over that fear and getting out of my comfort zone to buy that first one. Because as you know, everything that you’re not comfortable with, it seems challenging. But when you do one or two, you’re like, this is nothing to me. So that’s kind of where I’m at right now, is challenging myself and my business partner and I challenging ourselves to get out of that comfort zone and do some bigger investments.

But to answer your question, I’m sorry I’m kind of rambling—

Josh: Ramble on, man.

Terry: One of the first properties that my wife and I bought in this state, we were very concerned. Like, is this going to rent? We were parking our cars on the street that the house was on. We were talking to the neighbors around. We were sitting out there for hours and hours upon the day, wondering should we put in an offer because we thought it might have been in a bad neighborhood. And now, today, after I’m more comfortable doing this stuff, I don’t think twice. The last thing I’m going to do is go sit on a street and see what cars drive by or see what kind of people are in the area. We just kind of run the numbers really quick and pull the trigger. And when I say, run the numbers—we don’t really run a rate of return. We just run, is this thing going to cash flow and is it going to cash flow after insurance and property taxes are paid?

Brandon: So, you say you don’t necessarily anymore look for the idea of the neighborhood and all that—how bad of a neighborhood would you buy in, just out of curiosity? I mean like, will you buy anything as long as you think it’ll give a return in the long run? How does that work for you?

Terry: Where I kind of lucked up was when I was searching for a tenant for one of my first properties, I called a property management company over to kind of get some advice on what it would rent for and what kind of houses does he have in the area? Because that’s good advice from someone, someone that’s scared about buying a house in a neighborhood that they typically wouldn’t live down themselves, the easiest thing to do or what I’ve learned, is call the management company that’s close in your town, and 9 times out of 10, they’re probably going to manage some rentals down that street. And so not only are they going to tell you what those houses are renting for, they can pretty much kind of tell you what your experience is going to be like investing down that street.

So that’s what I did. I called him over there and oddly enough, me and him just wound up having some similar mindsets and that guy ended up being my business partner today, which—his name is Kenny Barnes and he’s been in real estate for over 20 years. So his company manages over 500 properties, so after I kind of realized that and met him that first day, I spent as much time as I could going to his office before we were partners, just asking questions because he’s like a wealth book of knowledge on this stuff. So I’m super thankful to have run into someone that was willing to give some advice.

Josh: That’s great.

Brandon: Two things I wanted to point out in there that I thought was really good tips. One, your idea of talking about calling property management companies. I say that all the time to people. And they say, well, I don’t really know—I don’t know how much it’ll rent for or I’m nervous about that. You’re 100% spot on there. Call a property management company. They’ll typically tell you anything you want to know. They’re people just like you are. Just build a relationship. I love that. And secondly, just the idea of that kind of mentor. The guy who trained you and taught you—you didn’t go pay $100,000 for somebody to sell you a book. You went to somebody who actually was doing it and who was in the market and you learned from that guy. Both those things are just awesome tips.

Terry: I mean, the biggest thing that I’ve learned is that if you find someone that successful in real estate, 9 times out of 10, they’re going to want to tell you their story. Because their story is going to be unique and everyone got there a different way. Everyone can skin a cat differently. There’s been a handful of guys that I get advice from that I consider mentors and I always go to those guys. Those guys have no problem telling me how they became successful and that’s what’s great about this, is the knowledge that I get from them, I can pass down to guys that are also doing the same thing.

Josh: That’s great. And that’s why we do this show. We want to get that knowledge and get it out to as many people as possible. Thank you, of course, for being on and being able to share it. Let’s dig in a little. I am one—I think I would get thousands and thousands of e-mails if I did not go there, so I have to go there. I bash on a little town called Detroit because I think it’s one of those places where the unsophisticated investor should probably avoid for the most part, due to a number of reasons. I don’t know if when you’re in Michigan, you’re investing in Detroit, but what was that like? Who’s managing the properties? It sounds like early on, it was good. Has it been a good experience for you? Have you had issues and problems? Tell us a little bit more about that property. I don’t know if you’ve picked up more in that area with that experience.

Terry: Actually, it does pretty well. One of the biggest reasons for investing out there and one of the biggest reasons why I kind of push a couple people into getting into real estate there is because it’s affordable for them. A lot of people, they can’t afford the 20% down. Are they looking to buy a property cash to get that full cash flow back? And Michigan is somewhere where you can go and do that. I’ve actually pushed some guys to go there and get some of their first rentals there and it was good for them. Because say you buy a house $20,000 cash and you’re getting $650 a month for it, well, you can’t really put $20,000 cash in the bank and get $650 a month for it. So even if that property is vacant for two or three months, what bank is going to give you $4,000 on $20,000? So that’s kind of how I sold it to a lot of friends. And I’ve kind of told them that it’s worked out there for me and they went over there and did the exact same thing. The town that I invested in is Saginaw, Michigan. They call it The Nasty. It’s pretty close to Detroit but it’s been a good experience.

As far as a management company, most real estate agents in those areas, as soon as you buy the property, they’ll offer to manage it as well. So I think there’s more of that going on than actual management companies. I could be wrong. Don’t quote me on that but the real estate agent I worked with and a real estate agent my friend has worked with, that’s kind of how it worked out. As soon as they closed on the property, they started looking for a management company and then the real estate agent is like, well, I manage 10 or 20 of them. I can do it. And it’s been an all-in-all a pretty positive experience. The only thing that we kind of run into is the property taxes are a little bit high with the winter property taxes because of the street cleaning of the snow and stuff.

Brandon: Interesting.

Josh: I mean, at the end of the day, obviously, $600something bucks to $20K is somewhere around high 20s, low 30% ROI if you pay in cash. Am I doing the math right, Brandon?

Brandon: I don’t know. I lost you.

Josh: Decent return as long as the properties are maintained. Do these properties you’re buying—are they needing a fix-up or are they good to go from the beginning?

Terry: It all depends. In Michigan, that particular property, you can spend $20-$25,000 in Michigan and get something pretty much ready to rent. You can get something for $10,000 sometimes and just put a little bit of work into it and have it ready to rent. We have kind of a different business model that we’re doing over here. Right now, we’ve kind of switched over to not using our own liquid cash. We have a great relationship with the bank and we can talk about that in a little bit if you want, building these relationships and building a team. But over here now, we’re kind of buying properties that are a little bit distressed and need renovation and then we’re buying them cash with a line of credit and then going back and putting those properties on permanent financing. And then taking the money and putting it back on our line of credit. And then our line of credit is paid back down and just keep reusing that line and create a financing way. That way, we’re never using our own liquid anymore.

Brandon: I love that strategy. I call that the BRRR strategy because that’s the Buy, Rehab, Rent, Refinance, Repeat. And you can recycle that money over and over and over, as long as you can get that refinanced. You can just keep doing it.

Terry: Yeah. And if you’re using your line correctly, 9 times out of 10, the bank is going to then hopefully up your line and you can keep building that relationship to where your $50,000 line will turn into a $200,000 line or a $500,000 line. It just all depends on your loyalty to that bank and the relationship you have with them.

Josh: So how would you recommend somebody who’s new, start doing that where they get into BRRR, as Brandon calls it, but they start building out that line of credit and can start to utilize that fix, rehab, sell it, get out, refinance?

Terry: I mean, there’s a ton of different ways to do it. Obviously, a lot of people are doing these things, as you know, is putting 20% down, which is what’s typically needed for an investment property. But I had a good friend of mine and his wife, Tiger and Rach, they kind of wanted to do the line of credit method and finance 100% of this thing and then go back and put it on permanent financing. They didn’t have a big relationship with the bank but we kind of brought them in there, kind of vouched for them, and told the bank that look, these guys know what they’re doing. They already have a couple of rentals. We suggest that you start working with these guys because one day, they’re going to be doing a lot of stuff. So our advice is work with them because they’re kind of on the same path and mindset that we had. So that bank started them off with a $50,000 line of credit. So it was kind of a test or a challenge, like let’s see if they can do it with $50,000 and so they just got the line. It was $50,000. They found a house for $36K. They bought it cash out of the line and then they had, what is that left to renovate the house—out of $36K.

Brandon: $14K?

Terry: They had $14,000. They’re just about done with the house right now and so they’ll have around $50K in it or so and it’ll probably appraise for $70K. So it had proven to work with just a $50,000 line. And some people think, maybe I can’t get that line. Maybe I can’t go to a bank and they’re going to loan me 80% of this property. Well, you’ve got to kind of treat these banks, we’ve learned, they’re just like a retail store. You go in one—if they tell you no—just walk into the next one and ask the next one. That’s kind of what we did when we first started. We’d go to a bank, we’d show them our portfolio. We’d show them our financial statement. And if they weren’t impressed, we’d go to the next bank. And we’d make sure to tell every bank that we are in this for the long haul. We’re trying to work with someone that understands that we’re going to be doing this for a long time and that we’re going to be doing this aggressively. So if you don’t want to work with us, we are going to go down the street and we’re going to find someone else to work with us. In a way, we weren’t really being cocky about it but we were just kind of being truthful. So we landed on a local bank here that’s just been really good for us. Now, when stuff gets pushed to the board when our loans get pushed up there, they know that maybe we’re not the biggest investors in the area, but they do know that these guys are on the come-up and they are investing aggressively and we do want to keep working with them because we do believe that they’re the future of this town as far as real estate.

Brandon: I love that. I don’t know why I’ve never in ten years of being in this game, I’ve never even heard of this idea of like, necessarily—just thinking the idea of getting a business line of credit, a small one, and then doing the BRRR strategy and then raising that limit over time. Because banks want to lend their money out and they want to build a relationship. I think that’s a fantastic idea and I never tried to do that. I always think in terms of home equity line of credit. But you’re actually talking about a business line of credit, is that right?

Terry: We’re talking about an unsecure line of credit. So obviously, in the beginning if we had our property paid for cash, we would go and get a line of credit and use that property for collateral, you know. So they could take that house if we didn’t pay the bills. But our main goal was, over the past couple of years, to build a relationship good enough with these banks to where we get something unsecured so we don’t have to put up a property for collateral. So when we finally did get that first line of credit, they started us off with $100,000 and what’s really cool—what we did was the first time we used it, it worked out really nice.

We took the line. We found two houses that were $17,000 apiece. We bought both of those houses at the same time on the line. We put about $25K or so in each property. So what’s that? We had maybe $42-$50K in each property so we had our line pretty much all the way used up. But then both of the properties appraised for around $80-85K a piece. Then, when we went to closing to reclose at the property, because you have to reclose at the property a second time—you buy it first with the cash and then when you put it back on permanent financing, you have to reclose. When we reclosed on the property, they actually cut us a check for $30,000 because of the equity that we had in the property. So it was up to us whether we wanted to take that $30,000 and put it back on the mortgage or take that $30,000 and do something else with it. So we took that $30,000 and went and bought a house cash with it. So essentially, we feel like we got three houses for free because we didn’t put down any money.

Josh: I’ve got a question on that. So on the unsecured side, do you think—how much of you being able to get an unsecured note do you think was based on the portfolio, based on the success—truth be told, you are obviously somebody of consequence in society. How much of that had to do with you being who you are? Could Joe Schmoe go and start to get his portfolio to kind of where you were at and then get that unsecured line or do you think it might be a little tougher?

Terry: You know what? I had heard stories of—a friend of mine in Iowa was trying to get $100,000 unsecured line and he went to a couple of banks. They told him no, no, no and then he went to kind of a little local bank and told him he was using that unsecured line for his business, which is a mail-order company and finally, he landed on that bank that gave him the $100,000. I don’t think his finances were super crazy or his financial statements were super crazy. He had a big portfolio and it’s kind of the same thing with my friends, Tiger and Rach. They had properties and stuff but they didn’t even have a working relationship with that bank. All it took was us going in there, kind of vouching for them, and just like that, at a snap of a finger, two weeks later, they had an unsecured line.

I think these days banks just aren’t used to people walking in and asking for that. Maybe 10-15 years ago, to my knowledge, maybe that was a little bit more common but banks have kind of backed off of that, I think. And we’ve just kind of went in and know that it’s a possibility and kind of pushed for it.

Josh: To somebody who’s thinking about doing it, just get out there, shop—definitely the smaller banks—and we’ve learned that over the 130+ shows and all the success stories we’ve had—community banks, smaller, local banks definitely are more open and easier, typically, to work with, in terms of getting those kinds of things so don’t necessarily start at the big guys. Look local. Look at the smaller banks and you’ll probably have more success.

Terry: Yeah, of course. And then, there’s always a way to make it happen, you know. I mean, there’s always a way to make it happen. In my opinion, a lot of unsuccessful people think that there’s only one way to make it happen and if I can’t get it, then I’m just going to give up. Well, there’s always a way to get a loan. If you have to put a little account to the side and start saving a little bit for a 20% down payment, I think it’s possible for anyone to do that. There was a point in my financial, I guess, my financial path of where I’m at right now is I didn’t even know how to manage my money correctly. I think a lot of people might fall under that category. And I did, too. There was a point to where I didn’t even realize that I needed two bank accounts. There was a point where I just had one bank account. Now I realize, the more bank accounts I have, the more money I have. Because the more I manage my money, the more money I have to manage. And the second that I realized that, it kind of changed the whole game for me. And I’m talking, it’s down to now to where I give every dollar a purpose. If a $100 check comes in, sometimes I’ll split that $100 check and I’ll put $25 in the tax account. I’ll put $25 in the investment account. I’ll put $25 in the savings. I’ve learned that over the years. The more I managed my money, the more I have to manage. That’s the biggest thing. You come across people that want to invest in real estate and the first thing they say is, I can’t afford it. The moment you say you can’t is the moment you’ve kind of created your own destiny and you can’t. But the moment you say I’m going to figure it out, then you can find a plan to get it done.

Josh: That’s pretty much what The Richest Man in Babylon was all about. It was a pretty cool book. Pretty much, take your market, put it away, and if you can’t or don’t want to do creative methods for acquiring property, start that way. Which is funny because this morning, I saw a piece of news in the San Diego Union Tribune about San Diego. The median-priced home there is up to $589,000 in San Diego and they said the average household earning $89,000, saving 10% of their income, would have to save for 18 years to get a down payment for a house in San Diego. Those numbers are crazy, and then I think about where you’re at and I’m like, man. You want to start investing? Look outside the box if you have to.

Typically, we like to say look within an hour or two of where you are and pretty much anywhere in the country, you could find property that’s affordable within an hour or two or where you are. But I want to dig in on the mindset more. I see you as kind of this philosophical guy and I love that. And so, people should put their money away, obviously. How does somebody who’s—take a guy who just graduated high school or college or something. They don’t have much going on. They’ve got their first job but they see the picture. They see the light. They know that real estate is the path but they don’t know—they’re stuck and they don’t see any way to get there. What would you say to that guy? How would you guide him to kind of get the ball rolling?

Terry: I would say, man—what I did and what worked for me and one of the biggest mentor I have in this town, the guy owns half the town. He’s like an older guy. He owns a lot of commercial property around here. And he told me a long time ago and he still tells me today—the biggest thing in real estate is what you don’t know. So if you’re that guy that just got out of high school, go find someone that does know about it in your town and go talk to them. You’re not born with this type of knowledge so go find someone that’s done it before and like I said, 9 times out of 10, they’re going to sit down with you and tell you how they did it or how to get started. And they’re going to see something—they’re going to see something in that person’s eyes—they want something more for themselves so 9 times out of 10, they’re really going to want to help that person and it’s happened to me a couple of times where I’ve had some younger guys come to me and they said, I want to get started in this. How did you get going and I went and sat down at a coffee shop with a couple of them. There was a younger couple—the kid shoots photos for a living. They grew up here but now they’re living in Nashville. And they sat down with me and they brought a pen and paper and I said look, I want to start off by saying I don’t know everything. I just know what I’ve done and I’m learning every day and I’ll tell you everything I know, start to finish.

And we sat at the coffee shop for about two hours and that was like less than a year ago and now, they have two properties in Nashville where they live. They took the knowledge I gave them. They probably had to revise it a little bit because they were in a different market but it was more about them stepping out of their comfort zone and knowing it was possible and I think just sitting down with someone that’s done it before, it makes it all that much more possible.

Brandon: Earlier, you said something about the idea of things seem overwhelming sometimes, especially buying rental properties. But now, for you, it’s like, I’m going to go buy it. I was thinking that the other day in the car. I mentioned that in a podcast a few weeks ago. I was making an offer through text message. I wasn’t even thinking about it. Well, I was driving and illegally texting and making an offer. And I was like, just amazed at how easy it seems now and so other people—they’re sitting there for a year, scared to death about making an offer. I think the solution you just said about just hanging around with people who for that is easy, it just becomes easy for you. It just becomes so much more simple.

Terry: Yeah, and I hate to say it, but even there was a time in my life where I didn’t start cutting people off that didn’t have the mindset that I had but there are a lot of people that you can surround yourself with that don’t want more for themselves. And sometimes, that can bring you down. Or you can choose to be around people that want more for themselves and you’ll probably find that you’re going to stay more motivated. I read in that book and I still say it today. If you want to fly with the eagles, why are you swimming with the ducks? And I read that and I’m like, man, there is a lot of ducks I’m kind of walking around with. I kind of want to be around the eagles. So now, I do surround myself with those positive people that believe they can do anything and I surround myself with people that want more, even if they don’t have what they want yet. They want it and they believe that they can have it. That always motivates me as well.

Josh: That’s huge, man. That’s huge. And I’ve been through that myself where I saw the people around me kind of bringing me down a little bit and I was like, I want people who are ambitious. I want people who are striving for success. I want people who are goal-oriented. And once you’ve changed your mindset, once you’ve changed the people that you surround yourself with, it’s amazing. It’s literally just being around successful people helps you breed success and that’s absolutely phenomenal.

I want to talk about your portfolio a little bit. I don’t know how open you are and you don’t have to tell us anything if you don’t want to but I’m just curious, what kinds of property are you buying? It seems like single-family houses. Have you expand from that to multi-families? Have you done any commercial deals? Tell us a little bit about your portfolio.

Terry: My wife and I started off with single-family homes because that’s what we felt comfortable with. And like I said, we felt comfortable with it so we were just kind of buying one after another. We were doing some cash in the beginning and now we obviously kind of smartened up a little bit and realized that we don’t want to use our own money for pretty much anything if we don’t have to.

When I met my business partner, like I said, Kenny Barnes—he manages 500 properties, so he’s really in the hen house and knows a lot. He’s had a lot of opportunities to see all these owners make mistakes in 20 years. So he kind of knows what not to do. So after partnering up with him, I felt a little more comfortable about going into multi-unit stuff. We’ve done stuff as big as eight-plexes and four-plexes. Just because that’s kind of what me and him are comfortable with right now.

Right now, we’re kind of sitting down and talking weekly, monthly, about what are our next steps? Because right now, an eight-plex, it’s comfortable for us. We do want to branch off and start doing something bigger and to do that, you’ve just got to grow a pair and get in there and do it. Figure out a way to use that line or to use that extra liquid that you have to jump into that bigger project. That’s probably what our next steps are going to be, but yeah, we have some duplexes, some four-plexes, some eight-plexes and then obviously, a handful of single-family homes.

Josh: Right on. I think we’re going to title the show, Get Out There and Grow a Pair.

Terry: Yeah. And I never say that but I don’t know why I’m saying it now.

Josh: I love it. All right, so you’ve got Kenny Barnes as your partner. This guy has been around. He’s been doing all these great things. There’s you. How do you guys work the partnership? Who does that? Since you’re not using your own money, what do you bring to the table? What does he bring to the table? How do you split everything? I don’t know again, how much you’re willing to share, but I would love to hear more about that.

Terry: Yeah, it was cool because at first, he just started off managing my property. When I realized how much knowledge he knew, I started just going in weekly and sitting down in his office. He would schedule—he’s very busy managing 500 properties but he would always schedule an hour for me a week to just sit down for me to ask questions. And I would just drill him with a pen and a paper. I didn’t have many rental properties. I just wanted to know more and more and more. So it went from me going into his office to ask questions to him letting me ride around with him and talk to tenants and talk to owners and go to the bank and meet with banks. And then one day, we were just kind of riding around and we pulled over at a vacant property and he said, man, I really like your mindset and I really like that you’re willing to learn and I really like that you want more for yourself and that the sky is the limit for you and you realize that. He said, I feel like we should partner up and I thought about it—he said, I’ve had a lot of partners in the past and he said to himself, I would never get into another partnership situation because he has a lot of them—but he said, I just feel something different about you and if you’re comfortable with it, I would want to enter into a 50/50 partnership. So since then, that was in 2012, we’ve just been on fire. It’s great because he works—he owns the property management company so he’s there every day. The times that I’m not travelling and riding, I can pretty much go over there, jump in the truck with him and ride around, meet tenants, meet owners, and continue this learning streak. It’s been the biggest blessing ever for me because not only are we acquiring properties—because of him, we’re acquiring properties that aren’t really for sale. We kind of have the inside scoop. We’re kind of in the hen house, is what he calls it, because we kind of know that this owner might be a little bit frustrated with this property. He’s got 50 of them and he’s 70 years old and he just wants to dump a couple and he doesn’t want to spend money on this and that and the other, so we know that we can kind of come in and lowball him with an offer and acquire the asset. So that’s kind of been our business model over the past couple of years, just kind of having that inside knowledge.

As far as how we run the day-to-day and what our different responsibilities are—since he’s kind of tied down in his company of managing those properties so much and I kind of have a lot of free time because I ride a bike for a living, I’m kind of the one sitting here just writing motivational notes that go to his e-mail, you know. What is going to be our next steps and what are we going to talk about on that Wednesday meeting? We have weekly meetings on Wednesday and those meetings consist of, what are we doing with this project we just bought? What are we going to do that we just got this line up? How are we going to get from being where we’re at right now to go into the next level, is always on our goal list? Going just from being guys that invest in low-income rentals and decent rentals and multi-complexes to how do we get to the point to where we really want to be at, which is hotels? Gas stations? Hundred-plexes? And we know that that’s in our future. We’re just on the path to getting there and that’s what those meetings are about.

Josh: That’s great, man. And the idea of—it works out really well having a property manager who has that inside scoop on the tired landlords. I’ve always thought of that. The greatest way to ever find properties before they get on the market is to be a property manager. Because you know who’s kind of getting fed up. You know who’s done or you know who’s getting to the point in their careers where they’ve made all the money they want. They want to sell out and kind of move on and do something else. So, that’s a great idea. I want to really, really quickly to also mention—you had talked about getting in the truck with him and driving around with him. The fact that he took you to the bank, the fact that he let you just do everything—that is unbelievable and at the end of the day, I guess what I want to put out there to those folks who are listening, who are experienced—this is gold. We’ve got this guy Terry here, who’s successful and probably would have been successful on his own, but obviously accelerated because of this mentorship with this guy that he’s working with. So I just really want to press upon the experienced investors that are listening—if you’ve got these young guys, whether it’s on BiggerPockets or on the forums asking questions or just in your town, somebody local asking you to help out—help him out because you probably wouldn’t have gotten where you are without somebody else helping you. Step it up. Help somebody out. Take him around. Don’t take him to the bank the first time you hang out with him, but that’s so cool. That is literally gold, being able to walk into a bank and seeing how he presents himself, going to properties and seeing how he deals with tenants. That is unbelievable. I love that he did that and I just want more experienced folks to help others to do it.

Terry: There’s another guy out here that I mentioned and this guy, he’s kind of on another level. He’s kind of like a guy that everyone talks about that we kind of aspire to be at his level one day and hopefully, we will be. I met this guy—he’s a little bit older. Been in the game for a long time and does a lot of commercial real estate. I was just riding my bike out in the parking lot one day that he owns the parking lot—he stopped out there and just told me I had to leave and I had to pull up my pants. Because I kind of look like a hoodlum, I’m out there practicing for like the World Championship in Germany or something. At the time, that was my spot that I had to ride so I kind of copped an attitude a little bit. I have a tattoo on my stomach. I really look like a thug without my shirt on. And I copped an attitude really quick and said, you can’t kick me out of here. I said, you do not own this property. And he was really quick to say, I do own this property. And he said, I own a lot of property in this town. And when he said that, I said, I know who you are. And the guy’s name is Ed Hoover and he’s kind of well-known around this small town for owning a lot of property.

Well, he said, if you want to ride here, and this is really what you do for a living, come in my office and I’ll write you something saying you can ride your bike here. And that way, I’m not liable if you get hurt. So I was at his office at 7:00 o’clock the next morning. He had his secretary sign me up something—I still keep that in my car and I still ride out in that parking lot and I developed a relationship with him over the years where I also got a lot of advice from him to where it’s really helped even Kenny and I out because he’s on the board at that local bank. So now, when our loans get pushed through at the bank and all the guys on the board are looking to see if they should approve these loans or not, Big Ed is in there and he’s like, I know Terry. He’s the bike rider kid, he’s doing good things. I believe in what those guys are doing. Let’s push this loan through.

Brandon: That’s great.

Josh: Inside connections, man. Look at you. So we talk about this thing—everybody has their superpowers, right? And anybody in real estate and pretty much anything, becomes successful—we all have one or two things that we’re amazing at and we have our advantage. It seems like, for you, not only is it your capacity to ride a bike like a ballerina—that’s a compliment—that’s not an insult, man.

Terry: Hey, now.

Josh: You took that one moment with a guy that you guys started shit-talking and suddenly, now you’ve got a relationship. This guy’s a mentor to you and he’s on the board at the bank who’s getting your back. That’s a really great skill to have, the capacity to transform opinions and the capacity to really work with people and build relationships.

Terry: I think there was a time, after that day, he would stop out there and talk to me. He’s seen that. At the time, I drove a ratty car. He knew I rode a bike for a living and I was travelling the world but he also knew that I looked at him as a mentor and that any advice that he gave me, he knew that I was taking it in and he could feel that. So, he would stop out there and our conversations went from what country I just came from, to nothing about the bike at all and it was just me asking him questions about how I get started, or what should I do with my liquids? Should I hold onto it or should I get rid of it? Some of the things that he’s said to me over the years have just really stood out.

One time, we were out there and I was thinking about paying my house off. So I just ran it past him real quick because I was really big on being secure at the time. I always had this fear in me—when bike riding’s over, what am I going to do? Even though I have these rental properties—should I just save up a big lump sum and pay off my current mortgage? I ran it past him real quick—I had the money ready. My wife and I was about to pay off the house and I said, hey, I’m looking at paying my house off right now. And he said, why would you want to do that? I said, to be secure. And he said, man, I’ve got three stints in my heart—I don’t know what he said because I don’t want to quote him—he got mad at me for quoting him for something I said he said last time. But he said, I’ve got a couple stints in my heart. He said, you’ve got to live life now. You can’t worry about being secure. He said, you take that money and you keep doing what you’re doing with it. You keep investing in rental property because you cannot build wealth with liquidity. And you cannot just hold onto that cash. You can’t pay off your house right now because it’s not going to be worth what you paid for it in five years. It’s just not. So keep doing what you’re doing and you’re going to be better off. So I had to come home and explain to my wife, hey, we’re not going to pay off the house now. We’re going to hold onto that money and keep investing in real estate. I’m really glad he gave me that piece of advice and I’ve kind of held onto it. He’s been really big on making sure that I keep liquid in the bank but I don’t need a ton of it.

I can remember one time, we were out there and he said, what’s the difference between me and a lot of people that are driving around in the street right now? I said, what? He said, liquid cash. A lot of people just don’t have liquid on hand. So if you have an opportunity to keep some, keep some. But you don’t need that much. You take your other liquid and you invest it, because that’s where you’re going to build wealth. After he started talking to me about building wealth is when I got pretty serious about going to my financial statement and knowing where I was at. Because if you don’t know where you’re at, you really, in my opinion, you really can’t push for your goal as far as where you want to be at financially.

So the first time I worked out my financial statement, my net worth sheet, it was crazy to me because I had no idea where I was at with the loans that I had out there, with the credit cards, with the medical bills, with the properties—I had no idea where I was at. So when I worked it all up and seen where I was at, I don’t know if I was in the negative, but I was pretty close to it. But then I became obsessed with building that net worth. It was like, I want to get this thing—I want to be a millionaire. I’ll just say it. I want to be a millionaire. I want to say that my net worth is at a million. I’m happy to say that with investing in real estate, it was relatively easy to make those numbers grow. Because every time we bought a property, not only the tenants were sticking money into equity and that net worth sheet was changing every month. But 9 times out of 10, we were buying a property that was worth $30,000 more than what we got it for, and it was also adding to that net worth sheet.

So to say that I really stand by that net worth sheet and I update that thing probably more than I should, but it’s just kind of an obsession of mine because I know that’s what really matters. The guys that are really wealthy out there, they’re not talking about how much liquid they have in the bank. They’re not talking about how much income they made that year. They’re talking what their net worth is. So that’s what I think, anyway. And that’s kind of what I’ve done in the past couple of years and it’s great to always know where I’m at financially.

Josh: That’s great advice. Again, anybody listening, if you’re not tracking that stuff, you don’t know where you are.

Terry: You have no idea. I mean, really, you could have $500,000 in the bank or you could have $1 million in the bank and you can work your numbers up and you can be broke. You have so much debt behind you. So it’s good to know that, to know what loans you need to tweak down. You need to know what areas you need to work on to build it up.

Brandon: That’s probably a good place to transition to kind of our next round of the show, which we call The Fire Round.

The Fire Round—these questions come directly out of the BiggerPockets forums, so these are real users that are asking these questions and we’re going to fire them at you. So #1—what step should I take to acquire my first property, a duplex or triplex? Like, they want to buy a duplex or triplex—what steps should they take to buy that first one?

Terry: I would say, get with a real estate agent that deals and has sold investment property before because that was kind of one of our first mistakes in the beginning is—she was a good person and I’m still good friends with her, but she wasn’t really a real estate agent that sold investment property. She was just getting started and we probably would have bought a different property if we would have aligned ourselves with a real estate agent that worked with investors than just a normal person looking for a house. That would be my advice. Get with a real estate agent that kind of knows what they’re doing that’s been in the game for a while and that knows investment property.

Brandon: One tip to people who are listening or that are watching this on YouTube can check out BiggerPockets.com/MEET. You can go there and you can type in your zip code and you can find people in your area and you can sort them by if they’re an agent or an investor, if they’re a wholesaler or whatever. If I wanted an investor-friendly agent in wherever, I could go and look for them there. Kind of cool. Check that out at BiggerPockets.com/MEET, not the beef kind.

Josh: All right, next question. What can I do with $10,000? How can I invest it strategically?

Terry: You go to Michigan and buy.

Josh: Oh no!

Terry: You go to Michigan and buy, cash money.

Josh: Oh, boy. All right.

Terry: No, my advice to that would be is if it’s your first property, hold off. Go buy a book or two. Read a little bit about money management and about resetting your financial blueprint that’s in your brain, the way you think about that $10,000 might not be the way you need to be thinking about it. So maybe go give yourself some knowledge on changing the way you think about money because after you read that book, you might have a different plan for it.

Josh: That’s great. More and more, I agree with you. I would have disagreed with you a long time ago but I didn’t really think about. Over the years, I’ve talked to thousands and thousands of investors and really, that’s exactly what it is. This is a mindset. You have to have the mindset. If you don’t have the mindset and you haphazardly go out and do it, odds are, you are probably going to fail. So you’ve got to be there. You’ve got to be mentally ready to do this and you’ve got to be in a position to understand what’s to come and where you need to be. So I love that, man.

Terry: Exactly. Yep.

Brandon: Cool, cool. So next question—we kind of covered this earlier but I’m going to ask it again here. Maybe you can expand on it. How would you suggest that I start saving my money for investing? A lot of people struggle with the savings thing. So somebody asked that question. How do I even start saving?

Terry: I’ll tell you what I did, and my wife has done over the years that’s worked for us is, obviously, most people have a checking and a savings account. My advice is to open up one more account and title it, “My Investment Account”. You can go online, in your bank info, you can actually title it—this is my investment account and everything that goes in there, you know that that’s not your savings. That’s not your emergency fund. That’s not your checking. Everything that goes in there is going to be for an investment property or some type of investment venture that you decide to do. When I first tell people that, when people have asked me that question before, their first initial saying is, you can do that because you have more money. I can’t do that. But you can. Because every time I think I’m going to spread myself more thin by opening up another account, I have more money because I’m giving those dollars a purpose. To the point to where now I have an account that’s just a play account to where it’s an account to congratulate myself how good I’ve done that year.

We started a separate account that was just for our new pool. We started another account that was just for our new house. But still our main account that we’re most proud of because it’s done the most damage is that account that’s labelled “Investment Account” because we know that if a dollar goes in there, that dollar’s going out to get spent on something that’s going to bring money back in.

Brandon: Fantastic.

Josh: Last question of The Fire Round—do you suggest living in the houses you flip while renovating or live away from the property? So, kind of doing this live-in flip thing where you move in, fix it up while you’re there, flip it and move onto the next one or just kind of flip a property that you’re not staying in?

Terry: We’ve never flipped a property.

Josh: Well then, that’s a bad question.

Terry: Every time we run the numbers on flipping the property, we just can’t wrap our head around it in this market because we barely have any vacancies. Our properties stay rented out and we just kind of run the numbers on what we’re going to make on this thing in three to five years and it just doesn’t make sense for us, so—

Josh: Fair enough. Right on, man. I’ll supplement it with a different question, which is, what’s your best success tip for new investors?

Terry: I would say what I said earlier, is ask questions. Ask questions and if you don’t want to be—a lot of people get afraid. This is what I’ll say—when you talk to people about rentals, and I know you guys know this firsthand—the first thing that people say is they always want to say what they’ve heard from, “Oh, my aunt has rentals and they have problems with it. My uncle has investment properties or my sister knows someone that has one and they just have so many problems”. Well, if you listen to everyone else, it’s just lagniappe. You’ve really got to go out and do it for yourself. All these horror stories and stuff that people hear and if they come at me when we talk about investing, it’s never been that stressful for me, so yeah—maybe those people that are investing in those properties that you’re hearing those horror stories from—maybe those people don’t have a property manager to take care of everything for them. Because if you have a good property manager, you shouldn’t be doing anything. You should just be sitting back and the only time your phone should ring is if they got your bank account info wrong. And that’s if you have a good property manager. Maybe a lot of these people that are going to tell you horror stories are people that were trying to manage it themselves and that weren’t good with running their own business. Because essentially, that’s what investing and having rentals is, it’s running your own business and if that’s not something that you’re good at, you need to hand it over to someone else.

Brandon: So true. I mean, real estate is a business. It’s an investment but it’s just like running any other business. It’s just like the guy running Subway and the guy running a flipping business or the guy running a rental business. And so, I think that’s terrific advice. I actually would love to hand over all my stuff to property management someday but there are no property management companies in my town that are even halfway decent. So, I’ll get there.

Terry: Start one.

Brandon: That’s the next step. We start our own—

Josh: And then we get the inside scoop on the deal—

Brandon: After you said that today, Terry, I’m like—I really should be doing that. I manage all my own under my own property management company but I really should like start managing for other people because of that very reason. I love that.

Terry: When I’m telling you that Kenny has the inside scoops and he’s in the hen house, I mean, you know first-hand if this person is getting frustrated with their property. You know that they’re at a point to where they’re desperate to get it rented out. You know that they’re at a point to where it’s got a lot of renovations and it needs and that they don’t want to fix it up. So if someone’s got $5,000 worth of repairs and they don’t want to fix it up, well, it’s not going to get rented. It’s kind of up to them. Maybe you fix this thing or you can sell it but it’s not going to get rented in the shape that it’s in. And I can remember a couple of years ago, I was on an airplane flying to a bike contest with a good friend of mine, Scott O’Brien. And it was probably right when I started investing in rentals and I was kind of telling them all these good deals we were getting and he said, man—he goes, the only thing I don’t understand—if these are such good deals, why are these owners getting rid of them?

I was investing in real estate at the time. I had rentals and I could not give him an answer. I was kind of like, say that again? He said, why are they selling off these rentals if they’re good investments? Then why not just keep them? Well, I didn’t have an answer then. And now, after being in the game a couple of years, I know the exact answer to that question. The answer is, a good owner keeps up with the property and as things break, they fix it. And a lot of the owners that are selling their stuff to us, anyway, have just let these properties get so bad that they’re beyond the point of putting in a couple of hundred dollars. They could have been maintaining it the whole time. But then, when their tenant finally moves out, not only do they not want to put in the $5-$10K to fix it up, they’ve also taken all their cash flow and not putting it back in their business account to take care of that stuff, so they’re not prepared for it.

So you’re catching basically owners that hadn’t prepared for the future, which is the biggest mistake. You set these things up as a business so the money that comes in, you put it back in a business account to prepare for these things. You don’t spend all that positive cash flow and that’s why they get rid of them. They’re in a bind and they didn’t do it smart.

Josh: Terry, that’s amazing and it’s true. Straight up true and that’s why new investors who say, hey, I’ve got no money and I want to buy rental properties and the gurus might say, yeah, put it on your credit cards and go—listen, some people have gone and done that. I know Brandon, you’ve bought a property with a credit card?

Brandon: Well, repairs.

Josh: But like, you have to have a reserve. You have to have a reserve. You’ve got to have that cash in the bank so when things happen, you could jump on it because putting it off is a death sentence. You just nailed it so really, love that. Love that. Love that.

Terry: When I first partnered up with Kenny, I was really illiterate to that side of real estate because everything that I had bought up to that point was cash, so of course, I was taking on a lot of the money and using it for living expenses, but when we first partnered up, I sat down with him and one of my first questions was, when are we going to be able to start taking money for ourselves? Right away? It really scared him because he’s like, whoa—he had a lot of properties at the time and he wasn’t even taking a salary out for himself. Now I know kind of why that scared him because even where we’re at right now we take a very small salary and the reason we are even taking that salary out is to motivate us to up it every year. We’re very reasonable about it. We know that the only way we’re going to give ourselves a raise out of the company account at the end of the year is if we murdered it that year and that we have a lot more properties that we acquire that are bringing in more money. But if we didn’t murder it that year, then our monthly salary is going to stay the same.

Brandon: I like that, kind of motivating you to move forward. Very cool. All right, let’s move onto the last segment of the show, which we call, lovingly, our Famous Four.

These questions, we ask every single guest every single week. We’re going to throw them at you. The first one is, and I know you said you’re not a huge reader but do you have a favorite real estate book?

Terry: My favorite book of all time, I’ve got to go back to that Secrets of a Millionaire Mind because it changed my life. It really did. In every form. It changed my life. It wasn’t necessarily just about real estate investing, but just the basic fundamentals of what an asset was versus a liability—look at you, look at you.

Brandon: I’ve got the book.

Josh: You kiss-up.

Brandon: I’ve only read half of it, so now I’m going to have to read the other half.

Josh: You’ve never read that book?

Brandon: I read half of it and then I never finished it for some reason.

Josh: Because you gave me grief about Four-Hour Work Week and you’ve had Millionaire Mind sitting on your shelf for eight years and you haven’t gotten past halfway.

Brandon: It’s been like a year. I’ll finish it now.

Terry: Not only do I have that book, I buy extra copies of it and when I do come across people that are wanting to expand their mind a little bit, I’ll give the book out and I’ll even go through and highlight the parts that kind of stuck out to me.

Josh: That’s awesome, yeah.

Terry: Look at you pulling that book down. You got me there.

Brandon: All right, man. Next question—business book. Do you read business books? Do you have any favorites in that realm?

Terry: Not so much. Not so much.

Brandon: This one is kind of a mix between real estate and business.

Terry: It’s kind of a mix between the two.

Josh: It’s a mindset book, so yeah.

Terry: For me, right now, in my career, it’s managed between bike-riding, managing the sponsors that I have, the travelling that comes along with it, and then when I’m here, just aggressively doing the real estate thing. There’s not too much book reading going on. But I need to get back on that because I know that’s where the knowledge lies, is in those pages.

Brandon: What I’ve been doing lately a lot, because I don’t have time to read at all—I used to read a lot. I don’t read at all anymore, is I started listening to audiobooks whenever I could. So the last two months, I’ve listened to seven or eight different audiobooks and I’ve been kind of obsessing about that.

Terry: That’s another reason why I like riding around with Kenny is because I can read something in the book and I’ll forget it. But if I’m riding around with him, and we meet an owner that made a mistake or we meet a tenant that has a problem or we learn something at the bank that we didn’t know before, those things, I’m going to remember those things more than something that I read. Sometimes, riding around in a truck with him for two hours—I’m going to learn more than reading two books because I’m going to remember it.

Josh: Right on. All right, my last question in the Famous Four—what do you do for fun? I mean, the cool thing about you is, I work for fun—I ride a bike! That’s amazing. But outside of your fun career, which I am completely envious of, what do you do for fun?

Terry: Man, I ride. I just gotta say it. Like I said, it was a childhood dream. I’ve been riding that bike since I was eight or nine years old and I don’t know how much research you did on flatland but it’s kind of like an infinite art form. There’s never really an end to what you can come up with on that bike. There’s tricks being invented all over the world right now and I can go on YouTube and there’s kids in South America and India and Japan and Korea—any country you can think of. They’re out there creating new tricks on these bikes. It’s always been a passion of mine, so obviously, when I have time—that’s what I do for a living. I’m on the bike and enjoying it.

Josh: Quick question—we’re all kids at heart. What is it like being the guy that gets to have the career that was his childhood dream? That’s kind of a special thing. I think everybody on this planet would love to have the opportunity to live the childhood dream and you do, so since we’ve got you, I’d love to ask you that.

Terry: It is something that I just never want to take for granted. So for me, taking it for granted would be not riding my bike when I get the chance. For me, taking it for granted would be not keeping those sponsors updated, not doing it to the best of my ability. So, I think that’s why I’ve been successful in my career, is that I knew how much work—I know how much work it took to get to this point so I just never want to let it go, so I just don’t want to take it for granted, is the best answer. When I get out of bed every morning and to know that my job is to ride that bike, 9 times out of 10, I’m going to find time during the day to get on that bike.

Josh: That’s amazing. Excellent.

Brandon: All right, my final question of The Famous Four—what do you believe sets apart the successful investors from those who give up, fail, or never get started?

Terry: I think that the successful investors or the successful people that get started—they take action. And they jump right in. Everyone else, they’re in that procrastination mode, to where they want to do it. They might think they can do it but there’s always something stopping them. And a lot of guys that I know, when they invest in that first property—it kind of broke down that wall and it broke down that barrier, so it’s kind of all about just taking that step, taking that lead. I was talking to my friend Tiger last night on the phone and telling him that I was doing this podcast, and we got into the subject of real estate a little bit, talking about when he bought his first rental, it was actually at a time where his job was stopped. I don’t know if he got laid off or he quit or he got fired—I forgot the details on it, but basically, at a time when most people would never think about buying a rental because their income just stopped. He took a chance and he bought a rental property and now, a couple of years down the road, he’s in a much better place because he started taking those chances.

Josh: Fantastic.

Brandon: Hey, one more—I’m going to add to The Famous Four—I saw in my notes here that you’ve been on Glee. Why were you on Glee?

Terry: I don’t know, man. What’s funny about that is I was on Glee in 2009 and it’s like a residual plan where you get paid when it gets on, so since 2009, I’m still getting payments in the mail from Glee. We were complaining—a couple of the BMX athletes were complaining that day that our pay is not that high. You guys should give us some better pay. Well, we were on the Superbowl episode of Glee, so they kind of pulled us to the side and they were like—you’re not getting paid that much today but you’re going to be getting checks for a long time for this particular episode. Here we are, six years later, and Glee checks are showing up. Sometimes, they’re 49 cents, but hey—you know me, I’ll take that 49 cents and break it up. And go put it in a couple accounts.

Josh: I used to be in the entertainment business and my friends like to call those RU—residual unemployment. I’m not working a job today but I’m getting paid from the residuals. That is one of the nice things about that business, for sure.

Terry: I have a friend that did like Casper the Friendly Ghost movie-type thing 20 years ago. He showed up to do it and they didn’t even use them. They were like, we don’t need you today but you can just hang out. 20 years later, he’s still getting residual checks. And he wasn’t even in there.

Josh: There you go. Amazing.

Brandon: I’m in the wrong industry. I’m going to Hollywood. All right, let’s get out of here.

Josh: Listen, man, it’s been an absolute pleasure. Let’s give you a second here to plug. Where can people find you, check you out? Watch your videos? Tell us where to go.

Terry: You can go—my Instagram is @terryadamsbmx. My Twitter is @terryadamsbmx. My snapchat—careful what you see on there, I get a little wild on there—that’s as well @terryadamsbmx. And my fan page on Facebook is what stays updated the most and you can just type in Terry Adams Fan Page and I’m the guy with the blue check—there might be a couple of them but I’ll have a check by mine that shows that it’s verified.

Josh: That’s great, man. And your website is TerryAdamsBMX.com.

Terry: That’s it. I’m going to take a selfie with you guys for my SnapChat right now.

Josh: Hold on, I should do the same. Where’s that phone? All right, Terry. Thanks, man.

Terry: I appreciate it and you guys are awesome and I look forward to hearing this thing.

Josh: For sure.

Brandon: Hey, thank you very much. We’ll see you around.

Terry: All right, thank you.

Josh: All right, guys. That was Terry Adams. I’m sorry, again, that Brandon had to be a part of it, for his insults up front.

Brandon: I don’t know what you’re talking about. No idea.

Josh: That was great. Lots of really great tips, especially for new investors. There’s some real gold in there so listen up. Take notes and get out there and take some action, guys. Otherwise, thanks for listening. We really appreciate it. This is Show 134 of the BiggerPockets podcast. If you’re listening to us on your phone on iTunes, please jump on there and take a minute to leave us a rating or review and subscribe. If you’re not subscribing to the show, subscribe. We’ve got other guests lined up—we’re looking for big guests, little guests, anyone who invests in real estate. We’re trying to tell their stories and so, subscribe and learn from these guys who are out there doing it. And leave us those ratings and reviews. They really do help us. Otherwise, jump on BiggerPockets. It’s an amazing community of active investors who can mentor, who you can mentor, who you can partner with, who you can do deals with. Get in there, get active, get involved and make moves.

Otherwise, follow us on Facebook, Twitter, G+. Interact with us, connect with us, and share our videos and posts and articles and stuff and help other investors learn by getting the word out. That’s all I’ve got for you. I’m Josh Dorkin, signing off.

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