4 No (& Low) Money Down Investing Techniques with Brandon Turner and David Greene

This is the BiggerPockets podcast show 299.5?

You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

Brandon: Alright what’s going on everyone? This is Brandon Turner. Today’s host of this very special kind of weird episode of the BiggerPockets podcast here with the co-host of the year, Mr. David Greene.

David: Thank you, thank you. This was a long time coming. I worked very hard for it, but I can’t say I’m surprised. Nobody deserves it more than me, and I was about to go Kanye West and take the microphone from Taylor Swift to tell them how great I am, but Brandon you did it for me so I don’t have to.

Brandon: There you go, there you go. You know what, it was a hard vote. It’s between you and me because I was co-host this year for a little while.

David: Well you recognize that co-host was a difficult category to win and you elevated yourself to host to get away from the competition rather than taking on the champ. I can’t say I’m surprised. That’s what prized fighters do. Like Floyd Mayweather, you just waited until you couldn’t lose and then you take a fight.

Brandon: Wow. Wow, alright so let’s get to today’s show. I want to directly answer the question, why is this show called 299.5? I mean like last week was 299, this should be show 300. But here’s why, it’s actually kind of a funny awkward reason. It’s because next week’s show is one of the most impactful powerful shows we’ve ever done especially for those people who are getting started, and we really wanted that to be number 300. But it had to coincide with a certain date which we’ll talk about here in a minute why next week is an important date.

So we are awkwardly making this show 299.5 just so that we can fudge with the numbers and next week can be show 300. So David, thanks for coming to show 299.5.

David: Well the important thing that people understand is we’re squeezing as many of these things in there as we can because we care about your success, your wealth, and your real estate investing education.

Brandon: That’s why we’re doing that. That’s exactly… we’re spinning this a little bit. So anyway, with that, we got to get to this show. Today we’re talking about creative real estate investing. In other words how to do it without using your own capital. We’re gonna go deep into that topic today so if that interests you, hang around for that.

Before we get to that, we are going to get to actually today’s Quick Tip. And because today is a little bit different show, we’re gonna be just a little bit different in the Quick Tip. In fact, today’s Quick Tip is coming from a listener, a long time listener of the show I believe who’s gonna be calling in.

Alright caller, you’re on the air with David Greene and Brandon Turner, how can we help you?

David: How do you know about you’re asking questions? Do I need a lawyer?

Josh: Where’s Josh? Why isn’t he here?

Brandon: Josh left the show a long time ago because he was too good for it. That’s what happened. We had this nice man named Josh Dorkin who was a host of this show for many years and then…

Josh: Good guy, great guy.

Brandon: Well I wouldn’t go that far.

Josh: He was the best.

Brandon: He was a guy and he was on the show for years but then he left to go do big and better things with family and whatever. I’m not bitter. I’m not bitter and jealous. Whatever.

David: Are you calling to tell us that you like the new co-host more than the previous one? Is that what your point here caller?

Josh: He’s better than the former co-host, current co-host. Much better, and more handsome.

Brandon: Alright everybody. Today’s Quick Tip is from our caller. What’s your tip caller today?

Josh: Alright I got a Quick Tip. Was that good? You liked that?

Brandon: That’s pretty good. Tell us what your tip is caller.

Josh: Here we go. One week from today, the host of the BiggerPockets podcast along with the current host of the BiggerPockets podcast Brandon Turner, this is Josh by the way guys. Hi. What’s happening.

Brandon: I’m gonna be surprised if nobody knows that yet.

Josh: David Greene has got this like stoic stone-face. He’s completely unamused by this whatsoever. Hi everyone. Hi David.

David: Hey. This is what it looks like when you’re in shock and awe and in the presence of glory basically. He visited upon us from the past and it just brings back all these memories of like almost 10 years of BiggerPockets listening and hearing your voice Josh.

Josh: Man, you make me feel good. Alright guys, it’s me. It’s Josh. I’m just calling in with today’s Quick Tip and there’s an important reason for it. A, I wanted David Greene to feel good about himself, let him know how much better he is than our former co-host. Way considerably better. But that aside, I am calling to let you guys know we’re really, really excited to announce an upcoming book, and that book is authored by the two hosts of the BiggerPockets podcast, yours truly and Mr. Brandon Turner, titled How to Invest in Real Estate: The Ultimate Beginner’s Guide to Getting Started. What do you think about that David Greene?

David: I think that that’s probably the number one question that we get on BiggerPockets, is I’m a beginner and I don’t know how to get started. So it was a fantastic idea to write a book about that and who better to do it than the two most famous experienced and skilled real estate investing educators in the world?

Brandon: Wait, he is talking about this book?

Josh: We have a book coming out. We’re here to let you guys know, everybody know, that’s my Quick Tip. There’s a book. It’s exciting and it’s gonna be amazing, and Brandon did a fantastic job. I just showed up once in a while.

Brandon: This book is pretty cool. But the reason we had Josh come on for the Quick Tip today is because pre-orders are open right now and if you pre-order the book… the book actually launches next week. And in fact, next week Josh is on the entire show. Yeah, Josh is on next week’s show, we’re kicking David Greene off.

But the pre-orders are live today and if you pre-order, you get invited to a special live webinar with Josh and I doing a Q&A. So if you questions you want to talk to us, pick our brain, we’re doing a live webinar that you get invited to. It’s gonna happen like early November.

Josh: The calls have already started.

Brandon: The calls have started, good. Pre-order it and that’s all we got. So we’re gonna kick you off the show because me and David are going to talk about No Money Investing, so get out of here Josh.

Josh: Do it. Big moves guys. Thank you for having me. Enjoy the show guys.

Brandon: Alright, well that was awkward and kind of funny.

David: It was nice to see Josh again, just not the way I was expecting it to be.

Brandon: So for those people who don’t know, they’re not watching the YouTube version of this, Josh actually showed up to that Quick Tip wearing a ski mask and all we can see was his eyes and obviously we knew it was Josh but it was a humorous little fun moment. So anyway, terrorist-looking Josh called in for the Quick Tip.

I think David you remarked earlier that it felt like you kept wanting to reach for your gun to go fight that terrorist but you held it together.

David: Bad blood of old emotions. He definitely looked like he was going to cause some trouble. But he’s Josh right? Like he could take whatever form he wants. He’s a real estate god. If he visits this earth in the form of a beautiful Hercules or a poorly beggar, that’s what gods can do.

Brandon: Alright, let’s get to today’s show but last thing before we get there, let’s hear from today’s show sponsor.

Our sponsor this week is a company a lot of you have been talking about on the forums called Roofstock. Roofstock is the number one marketplace for buying and selling single family rental homes. Their marketplace of cash flow and rental properties makes it easy to invest an income-producing real estate across the US. They connect you with vetted local property managers and all properties are backed by their industry-leading Roofstock guarantee so you can invest remotely with confidence. Why wait any longer to begin building your passive income stream? Roofstock makes it easy to become a rental property investor and start you on the path to financial independence. To sign up for a free account and start browsing cash flow and rental homes, visit Roofstock.com/biggerpockets. Create your free account to get started at Roofstock.com/biggerpockets today.

Brandon: Alright big thanks for our sponsors as always, and now with that let’s talk about creative real estate investing. Of course I wrote a book on that a few years ago and I think we’ve got a second edition coming out next year which is kind of cool. But for now, I want to go with you this topic of no money because this is like the number one thing I believe that holds up most, it may be number one or number two depending on the person, that holds up people from really diving into real estate, is I don’t have enough capital to just jump in and get started.

So that’s why this is such an important show. The first thing I want to talk about with David here and kind of go through is should somebody do no and low money down? What do you think DG?

David: H.E. double hockey sticks yes. If you can get into real estate for no money down or low money down it’s better than a lot of money down and there’s a lot of reasons why but it may not be the reason you think, okay?

Most people that I hear from have no money, they don’t like their job, they don’t manage their finances well, they’re not on a path of financial prosperity, and so they’re looking to real estate to be their savior, right? And that’s kind of a problem no matter where you are in life. If you’re not doing great in life and you’re looking for a significant other to be your savior, you’re gonna end up in trouble, right? You’re vulnerable. You don’t want to be in that position at all. You want to be in a position of strength where you can pick and choose the people that bring the most value to you because you bring value to them as a general rule.

Well real estate works the exact same way. The reason that I like low and no money down is because when I was investing in the traditional method which is what I just called like putting a big downpayment on the house, fixing it up and then having a rental, I learned a lot about investing but then I ran out of money. And right when I got good at investing, I had no more capital and that was like a cruel twist of fate.

When I learned how to BRRRR, I never ran out of capital. I got much better at investing. I did a lot more deals, I built better relationships. My skills grew. I became an overall much better investor and it was due to the BRRRR strategy which is one of the ways that we’re gonna talk about investing with no and low money down.

So I’m a big fan of doing this for one of the biggest reasons is it allows you to be a better investor and that’s what it’s all about. You get more deals under your belt, you get more experience, you learn more, you start to get more profitable, and then as you know Brandon, the better deals you get, the less money that you need right? So it kind of becomes this virtuous cycle to where you don’t need money anymore because you’re getting really good deals because you learned how to invest the right away. So that is what we’re gonna talk about today. Lots of strategies to get yourself started and then get better.

And this is one of the cool things where it’s not like “Oh I don’t have any money so I should invest with no and low money down.” Really, the best investors invest with other people’s money, right? Like they’re not investing with their own money either. It’s all about finding good deals and knowing what you’re doing.

Brandon: I think you make a good point there, like it’s not about being poor, it’s not about being rich, it’s not about the only people who should invest with no money down are people who are poor. I would actually say that the better you are as an investor, like the more experienced you are, the less money those people typically put in right? So this is not about get rich quick, it’s not about I am broke.

In fact in you’re broke, you probably shouldn’t invest in real estate. And a lot of people might be surprised to hear me say that, but look if you can’t put food on the table and all of your eggs are on this one basket of I got to do this flip or I got to get this rental going or else I will not be able to feed my family, you’ve got bigger problems. Fix that problem first.

And David you and I talk a lot about this idea of like so many people like live paycheck to paycheck and barely scrape by. Now, it either means that they’re not earning enough money at their job and they need to find a way to make more money whether it’s through their job or through a side-hustle, or that means they’re spending way too much money and they need to figure out how to get on budget and spend less money.

I mean, I know people who are earning half a million a year that are broke, living paycheck to paycheck. I know people who are living 30,000 dollars a year who have plenty of extra money. There’s a financial responsibility thing that have to come first before you get into real estate. Do you agree?

David: 100%. I mean there are so many analogies that I could use. I’m a big sports guy so I usually go to a sports analogy. It doesn’t matter if you have an amazing offense and a terrible defense. So those are the people that are making 500,000 a year and they never have money. They can score a lot of points but the other team only has to score a little bit more. And if you’re spending all that money that’s coming in, you’re not getting ahead.

And it also doesn’t matter to have a team that’s focuses on slowing the game down and making it ugly and messy and keeping the score low, you still can’t score points, right? Like you could say I save 50% of my income but if you make 12 dollars now or you’re not getting anywhere. You have to combine the two. And like I’ve heard Gary Vaynerchuk talk a lot about like where his parents came from in communistic USSR. You did not have a way to get ahead but if you started to get ahead, the other companies who are already in place that had ties with the government will come in and chop you off at the knees, right? It wasn’t a place like America where there is nothing that stops us here but our own mindset, our own self-limiting beliefs, our own vices.

If you can overcome your own problems at America, you can succeed. And that’s what Brandon and I are very, very passionate about, and that’s what you hear us talk very passionately about mindset. Like having the right mindset will get you ahead in life, saving money that you’re making, earning more money. And we don’t like when people come to BiggerPockets to say “I hate everything about my life, real estate saved me,” because that’s not what it’s meant to be. And those are the people that fall for the gurus that say “Give me 25,000 dollars and I can change your life. I’ll teach you these things that you need to know” right? You don’t have to do that.

What you do have to do is learn some of the strategies that we’re gonna talk about today. Look at ways to creatively put them into practice, sharpen your skillset as an investor and slowly start to build your way out of financial ruin and to financial success.

Brandon: Yeah I love that. I love that. So, before we get to the actual, we’re gonna go through four different strategies of course today for doing deals creatively with other people’s money, but before we get there, I want to talk about kind of like the two keys, like two things you have to understand about creative finance in order to put these deals together. Like these are like the foundation right? There are two keys to it.

Key number one is you have to find an incredible deal. The creative finance, the foundation is finding really, really good deals. Let me give you an analogy of what I mean. Or maybe not an analogy because that’s your dominion David Greene. But I’ll give you an example.

Let’s say David was gonna go buy a house or a rental property we’ll call it right? David was gonna go buy a property for 100,000 dollars. Now, ignore the number, it’s not important, its just an example right? 100,000 dollars, and David is gonna go put down a 30% downpayment because that’s what the bank said to do because that’s what the bank wants right? So David drops 30 grand down on the property and now he has a 70,000-dollar mortgage on the property. Everybody follow me here right?

So he’s got a 70,000-dollar loan, it’s worth a hundred. Great, he’s got 30,000 dollars of equity because he put a downpayment of 30%. Now if I come and I’m better at finding good deals, and there are so many ways of finding good deals, we could do an entire solo podcast or duet podcast, is that what you call this, a duet? We’re gonna do a duet podcast today.

David: We could probably find a manlier name than duet to describe these. Give us some time to work on that guys. Brandon is a much better marketer than he is showing right now. We’re gonna do a duet ballerina dance together. Yeah, I don’t think so.

Brandon: Alright. We can do a whole duet podcast just on finding deals. But for now, let me go back to the story, right? So David buys a 100,000-dollar house, he gets it for a hundred grand, he puts 30% down, he’s got it for 70k. I go out and I use some creative methods to find good deals and I buy that same property and find it and get it for 70,000 dollars. Now I buy it with no money down. I use one of the four strategies we’re gonna talk about today, and I get it at the end of the day for 70,000 dollars. Total all-in money. It’s still worth a hundred just like David’s, I still have 30,000 dollars of equity just like David, except for in this case, I put no money down and David put 30 grand.

So here’s the thing people always say. No money down is riskier. Well, in that story, who has more risk in that story? Me who put 0 dollars down, I like how I made you the bad guy in the story, or David who put 30,000 down? In this case, we’re at the exact same position but I have way less risk because I didn’t put any money into the thing so I have no risk at all, yet we’re in the same spot. So it’s more important to get good deals than just to worry about how much money you’re putting in downpayment. Because what if David found that same property, the 100,000-dollar property but he paid 150,000 for it and put 30,000 down? Well now he’s like under 120 grand.

So downpayment is irrelevant in a way right? What matters more is equity and there are two ways to get equity. You can do the find equity by getting a good deal, or you can put money down to get equity. Anything you want to add to that?

David: Yeah. When you put money down to get equity, it’s a false sense of security. It’s you telling yourself I’m being safe but you’re really not. What you’re doing is buying equity, and there’s still an assumption that you’re actually getting it at market value because an example of where I paid 150 for a 100,000-dollar house… turnkey, right? You actually didn’t buy equity, you bought debt. You owe more than the house is worth, and you lost your money in it, okay?

So that is something we want to change your mindset on, is don’t think that downpayment automatically equals equity. It can. But when we’re referring to risk, Brandon is safer. But there’s more than just risk to look into this. What if we look at time and effort, okay? When Brandon went out and got that deal for 70,000 dollars that I bought under contract for 100,000, think about how much time, effort and energy I had to put in to saving that 30,000 dollars? What if that represented a year of my life working in a side hustle to save 30,000 dollars that Brandon didn’t have to do? Think about what you can get done with a year of your life’s time, energy and effort?

Brandon could’ve made money on the side doing something else. He could’ve found five more deals. He could’ve found deals and wholesale them to other investors. He could’ve read a hundred books. There are all kinds of things you can do that will improve your financial position in life with that same time that David spent earning and saving that 30,000 dollars. And I’m okay being the bad guy in this example because this is how I live my life for my first 6, 7, 8 years of real estate investing before I got serious and realized the BRRRR strategy which is a bazillion times better, and that’s why I’m writing the book on that because I’m very passionate about other people not making that same mistake.

So, we’re challenging some of the ways you’re thinking but it’s because we love you and we know that there’s a better way that will come out once you understand it from the perspective we do.

Brandon: There you go. So I said earlier there are two keys to no money, right? The first one I said is you got to get great deals. The foundation of creative investing is getting good deals. The second key though is that creative finance is a toolbox, and I use this analogy in the book on investing real estate with low or no money down, because I really like this analogy.

So, the idea being this. If you only have a hammer in your toolbox, if you own a toolbox and you have just a hammer, you can do very few projects. You can like pound it in nail if it happens to be in the wall already, you know if you have a nail lying around. You could like hit somebody in the head if they break into your house but that’s about it right? But you add in a screwdriver and a wrench and I don’t know, a jackhammer, and the more tools you have in your toolbox, the more and greater projects you can take on, right?

So add in a tape measure, add in a saw, add in all these things. The more tools you own, the more projects you can take on. So in the same way, with creative finance, it’s not enough just to have one method that you go to, this is my method. I think it’s a good idea to learn a lot of methods because every deal is unique. That deal might work very well for the BRRRR strategy, we’ll talk about that, it might work better for house hacking which we’re gonna talk about. That one might work better for a hard money loan which we’re gonna talk about.

So like different deals work different ways but you got to have a lot of tools which is why in today’s show I think, hopefully you guys are enjoying this already and hopefully you’ll continue to because we’re gonna give you a bunch of different ways. We’re gonna fill your toolbox today. And again, you might know this stuff, maybe you’ve read this on a book or you’ve heard it before but I want to encourage you to listen to it anyway because you might just pick up one more tip, one more idea, one more way to think about it that changes how you run your business.

So those are the two keys. Of course, getting great deals and fill your toolbox. And without further ado, unless you want to add anything to that David, let’s just jump into the four. Is that good?

David: Let’s do it man.

Brandon: Alright. Number one, and we’re gonna fly through this pretty quick. Of course there are a million blog posts and articles and forum posts and books on all of these topics, but we’re gonna fly through them. But the first one is partnerships. Using partnerships. Now, quick story on partnerships. So when I discovered the power of partnerships, two different stories, I’ll tell the first one. I tried to flip a house, my very first house I ever tried to flip deliberately. I mean, I flipped an accidental living flip, but the first official flip I tried to do was back in like ’08 and the market was crashing and I couldn’t sell it. And I didn’t really know what to do and I didn’t have the ability to get a mortgage because I didn’t have a job.

So I found a partner, in fact I actually grabbed my dad and I said “Will you save me from ruin by helping me?” And so I brought him in as a partner and then he had no problem getting a loan on that property and we just turned it to a rental property. Because my dad is like a solid, he’s like the bank’s best friend.

So that’s the first time I ever tried to use a partnership in any way and it was more like daddy I need your help and it worked, right? Then later on, I found this triplex, a rental that I just absolutely love the idea of this triplex. I really wanted it, it was a great deal. I did not have the money it and I didn;t have the ability to get a loan. But how was I gonna do it? Well I found a couple that I knew, some good friends of mine, and I mentioned to them that I was putting together a deal and asked if they knew anybody that might be interested in helping me fund it, and they said “Well we might be interested in that.”

And of course they ended up bringing the downpayment. They didn’t even have all the money. They just brought the downpayment. We wanted to get real deep. They didn’t even bring the downpayment, they used a home equity line of credit on their house to bring the downpayment. I brought no money to the deal. They brought the downpayment and the rehab cost and we split everything 50-50. And that is the power of partnerships I learned very strongly then.

All of a sudden I was making hundreds of dollars a month in cash flow in this property and I had no money into it. Of course they brought some money into it but they had zero work into it so they loved that. They had no work at all but they had easy ability to get a loan. So anything you want to add to that?

David: But, but, but Brandon, that’s because you’re Brandon Turner. You host a podcast, you had investment property, you’re 6 foot 5. You know, Josh “the surprise caller” Dorkin right? How do I do it when I’m not as experienced as you Brandon? What is the secret for why those people felt safe and comfortable giving you their money?

Brandon: Yeah, there are a couple of things in it. First of all, I was not, and that was pre-podcast, that was pre-me even knowing Josh Dorkin, that was pre-anything. I had a few properties that I had done a couple flips at the time, it was very early on. What got me that deal was one, I built good relationships. I build good relationships with people all the time. Real estate is a relationship business We talk about here all the time here on the show. The second thing I did was I talked about my deals. I make sure everybody knows that I’m a real estate investor. I put it on my Facebook. I talk about it. I go to meet-ups, right? Everybody knows what I do.

And third, I’m really good at showcasing the strength of a deal. Now this was before the days of the BiggerPockets calculator which we made for this very reason, is that you can have the best deal in the world but if you can’t showcase its strength, you have a hard time convincing people to fund it for you. So I would spend hours putting together a really nice like PDF documents, like colors, graphs, I mean literally hours before presenting a deal to somebody like these partners. And I’d walk them through all the numbers and sit down for a presentation. I might spend 10 hours getting this but at the end of the day of course it’s worth it if you can pull off a no money down deal. That’s how I was able to do it, right? I was confident with my numbers, I found a great deal, I networked with people, and I let everyone know what I do.

So I put a thing on my Instagram a long time ago @beardybrandon if you want to check it out, but basically it’s like a triangle right? And on one side of the triangle, it says knowledge. On the other side of the triangle it says hustle, and the other side it says money. And the key to creative finance is you only need to bring in two of these in reality. If you want to do no money down deals, you only need two out of that triangle. So if you don’t have the money, bring the knowledge, bring the hustle. And when I saw hustle, what I mean is like the work, the getting in there, the finding the deals, the making it happen, the networking. Like that side of things, you don’t need money for.

You do not need money for the knowledge. If you want to be real cheap, just go to your library. Every library has dozens of real estate books. Go read them there if you want. Or pick them up on Amazon or go to BiggerPockets.com/store. Get the knowledge, listen to podcast, hustle, and there are so many people out there who have money but do not have time to hustle or do not have the patience to sit on a podcast and listen to David Greene and Brandon and some obscure terrorist caller talk about real estate right? Like, people don’t have that hustle to do that. Whoever is listening to this show right now, you guys have that and that is worth way more than money. And that’s where partnerships come in really handy.

David: This is so good. Okay guys, this is not just Brandon saying a lot of words that sound good. Like he’s giving you the playbook to do what he is doing and I want to sum up what Brandon said. So everybody here can get serious about if you want to do what Brandon did, look at these points, okay? He mentioned he had done a couple deals, not a hundred deals, but not zero deals. He had done just a couple. You hear us say all the time, “Hey, your first deal is really important. Get one under your belt.” This is why we’re not just blowing smoke. Where we have seen, because we deal with frustrated and new investors all the time asking how to get started, what needs to happen, and we know this is cornerstone to get you moving, that’s why we’re always saying this.

And if you guys understand how BiggerPockets was built, a lot of it was by people like Brandon and I talking about “Man, people have a hard time with this” or “I’m having a hard time with that,” and then they build something in BiggerPockets to help somebody like that. We’re giving you guys the playbook for how that works. Brandon talked about his deals a lot. This is a fancy word is marketing, right? But all he was doing was when he met people was he talked about real estate. He said I just flipped this house, I just brought this rental, right? Even though he had only done one or two deals, if he talked about it to enough people, people started to think “Whoa, he’s really good. He knows a lot about real estate.” That’s probably all they thought. They didn’t know any more, but that’s all he needed for them to be potentially interested in buying deals with him, is that he had that credibility, right

He would showcase those deals specifically “Here’s the thing about this deal that worked out so well.” That’s very important. I do that as a real estate agent. Whenever I talk to people, they’re like what’s going on in your life? I say “You know what’s crazy, it’s such a hot market but I’m getting 100% of my buyers into contract because I’m doing these three things that other agents aren’t doing.”

People don’t know real estate that well but what they know is “Well that sounded smart. I would use David if I wanted to buy a house.” That’s what you need. You showcase the part of the deal or the part of your business that’s working so that when people walk away from you, they’re left with a good impression.

Brandon didn’t mention it but I will tell you this, his personal reputation mattered there too. He lives a life of above board character, I would give Brandon money and I know that he would pay me back. I would have no doubt about it because Brandon wouldn’t sleep at night if he didn’t. If that’s not what people think when they think about you, if they’re like “They’re a hustler but they’re also kinda shady” right? They’re not gonna let you borrow money, so you need to have introspect to look at yourself and say “Am I living my life in a way that people would actually feel comfortable letting me borrow their money?”

Brandon: That’s a great point. Really good point.

David: And another reason why we tell people “Follow us on instagram. I’m @davidgreene24, he’s @beardybrandon,” we want you to see what we are posting so that you see what good marketing looks like and how you build a good reputation for yourself so that you can copy it and you can do the same thing in your own life, right? I follow Brandon. In fact I have my assistant, his name is Allan Rosso, and he is kicking butt right now following all of Brandon’s videos because we’re gonna starting making them and we wanted to look as good as Brandon’s does, right? If it worked for Brandon, it would work for me, so we’re copying his content. You guys should be doing the same thing as us. You should be following the Grant Cardones. You don’t have to do it like Grant Cardone is doing it but you can still learn from the way that he is putting his stuff out there, and if you change your style to look more like that, you’re more likely to get the same credibility that these other people do.

So I know it’s easy when you hear Brandon say what he did to just like “Oh that makes sense” and move on, but stop and dissect that and then ask yourself what can I do? So as you’re listening to this, you should be pulling up your phone and following he and I on Instagram and any other people, like maybe a Gary Veynerchuk that you’re like “Well, that guy markets really well.” Look at how they are doing and then copy that stuff as you build up your own business.

Brandon: There you go. I love it. Alright, so partnership is a fantastic way to invest. In fact, that’s like the one technique of all of these that we’re gonna talk about today, where if you legitimately have no money at all… earlier I said no money down isn’t for people that have no money, but this one in a way could be, and here’s why I say that. You could partner with somebody, and what I mean by that is find somebody who’s experienced, knowledgeable, doing lots of real estate deals, and you can partner with them and have them help you with every part of the deal, and who cares if you get 1% of that deal? Because next time maybe you’ll get 20%. Get the deal done even if you’re broke. Go partner with someone even if it means 99% or 1% or even if it means you’re working for free and you get no equity or no cash flow.

The point is like, this is like the one caveat to the don’t do it if you’re broke. You could partner with somebody and be the knowledge and the hustle side of things and maybe make some money in the process. So partnerships. There you go.

David: Everybody here is understanding, yeah there is some value in borrowing money, right? If I have to give away some equity, I’ll do it to be able to borrow money. What Brandon is talking about is borrowing credibility and that can be even more valuable than money. If you would do it, if you’d give away equity for money, give away equity for credibility. It’s even more important. Now you’re the person who has 1, 2 or 3 deals under their belt and when you don’t want to give away any of the equity any more, you don’t have to. You can’t just give away equity for money instead of credibility because you’ve built it.

Brandon: Yeah. I love it. So the next one we’re gonna move on to is talk about a strategy that both David and I do quite excessively we could call it. It’s something that… I love this idea. It’s called the BRRRR strategy. David, can you tell us what BRRRR is, what it stands for and how it works?

David: I love BRRRR. I would talk about BRRRR all they long every day if I could. It’s everything that I like in life all wrapped into a strategy. It’s efficient, it allows you to scale faster, it allows to leverage and it forces you to become excellent at what you do. It’s an acronym that stands for buy, rehab, rent, refinance, repeat, and it’s a way for buying property, the order in which you’re buying it, you’re just switching a few things around and that little change can add up to a huge difference in the amount of money you pull out of the deal.

So in the example that Brandon gave earlier where David bought a house for 100,000 and put 30,000 down, and he paid 70,000 dollars for the same house that was worth a hundred, it doesn’t have to end there. Brandon could pay the 70,000 dollars, get the house, then refinance it. It’s worth a hundred. The bank lets him borrow 70% loan of value. So he gets the 70,000 dollars back. He can now go buy another house but this time he’ll do even better because he takes everything he learned from that first deal and applies it and does even better on the second deal.

Brandon: That sounds pretty good. So, I want to go to an example of this but I believe you have an example of this for today’s Deep Dive.

David: Yup. I’m gonna pull back the curtain and tell everybody all about the last deal that I did. It was a bird deal. I will explain exactly what I paid for it, how I found  it, all these stuff we go into in the deep dive. And then you guys should be able to see “I see why these guys are into it. This is where it’s at.”

Brandon: Alright, well what’s that. Let’s get to the Deep Dive.

The right hire can make a huge impact on your business that’s why it’s so important to find the right person, but where do you find that individual? You could try posting on top job boards but can you really be sure the right person is gonna see your job? Instead, find the person who’s gonna help you grow your business with LinkedIn. Hiring the right assistant to help run your real estate business can help double or triple your portfolio but hiring the wrong assistant can lead to tons of headaches and your business falling apart. That’s why you should use LinkedIn to find your next hire and grow your real estate empire. Most LinkedIn members have not recently visited those top job boards but 9 out of 10 members are open to new opportunities. That’s why a new hire is made every 10 seconds using LinkedIn.

BiggerPockets even uses LinkedIn as part of our hiring strategy. Hurry to LinkedIn.com/BP to get 50 bucks off your first job post. That’s LinkedIn.com/BP to get 50 dollars off your first job post. LinkedIn.com/BP. Terms and conditions apply.

Brandon: Alright everybody, this is the Deep Dive. This is the part of the show where we dive deep into one particular deal of our guest, and today our guest, of course it’s just me and David, and so we’re gonna dive into one of David’s deals. So, let’s get to it. We’ve got 7 or 8 questions we’re gonna ask about this. First of all, David tells us a little bit, before we get into the finding it, how much it was, all that stuff, like what is this and where was it at?

David: This was a single family house with three bedrooms and one bathroom in Jacksonville, Florida.

Brandon: Alright, so let’s get to the deep dive questions, these 7. Number one. How did you find it?

David: I found the house because a wholesaler emailed me and said “Hey, I have a really good deal. I think you should move and assume.”

Brandon: Alrighty. Number two. How much was the property?

David: I paid 45,000 dollars for the property and then I got three rehab estimates and I went with the middle one, it wasn’t the cheapest but it wasn’t the most expensive, and it was 85,000 dollars for the rehab which meant my total cost to be into this house was 53,500 dollars.

Brandon: Alright, and what did you think of the time… well I’ll get to that when we get to the outcome, but how did you negotiate it? Any fancy negotiation stories in there?

David: So, negotiation. That’s actually a funny story. We typically look negotiating like how did you get it for less money, right? But negotiation is all about how did you get a deal that worked for you the best and worked for the other people? In this case, the strongest thing that I brought to the deal negotiating-wise was closing on it faster than anybody else could. They had already marked this house down so much and the person needed a quick sale, like they needed to sell it that week, that I went in there and said “I’ll pay 1000 dollars more than what you need if you don’t show this to anybody else and you let me wrap it up right now.” It was that good of a deal.

Brandon: That’s awesome. How did you fund it? How did you come up with this 53, can you talk about the strategy there?

David: Yeah, so what I’d done was I had sold a rental property in Phoenix, Arizona and I had taken the proceeds and I said “I’m gonna go start buying in Jacksonville, Florida with this money.” And this was one of the first houses that I was looking it, and maybe the first one that I bought. So I took the money from Phoenix and I didn’t even do a 1031. I just sold it. It’s really the only house I’ve ever sold in my whole investing career, and I took that money, put it in the bank, and then I went looking in Jacksonville and this is the deal I found.

Brandon: Alright. So you bought it for cash I’m assuming then?

David: Yup. Big cash.

Brandon: Big cash for it. What did you do with it then, like flip, rental, BRRRR, how did that work?

David: So this was a BRRRR strategy as we alluded to earlier, and all that I had to do to get it ready for rent was I had to remodel, it’s 1-1/2 bathrooms so I had to remodel the half bathroom. Instead of doing new flooring, I just went in there and refinished the hardwood floors they already, they were in terrible shape but refinishing floors is much cheaper than putting in new ones. And I did stuff like painted it, painted the cabinets, I put on some new appliances, I fixed a lot of dry rot that they had going on, and I paid a cheap landscaper to go in there and cut down the jungle that had become this house. It was like, it looked horrible and that was one of the reasons that I was able to get it for such a low price, is the owner was thinking “I can’t sell this thing on to MLS. It looks so bad.”

But it was like 400 dollars to pay someone to go on there and just hack these weeds down. But what I’m saying is it looked a lot worse than it really was when I translated the problem into a financial amount on paper.

Brandon: Sure. Yeah, actually landscaping is one of those things that doesn’t actually cost usually that much money, unless you get really fancy with retained walls or whatever else, but like really, cutting down stuff is usually a low dollar per hour task that you can hire people and it makes a huge impact.

Cool, alright. So like you funded it that way, you did a BRRRR which means you would’ve gone and refinanced it. So you bought it, you fixed it up, you rehabbed it, you rented it out, and then later you went to a bank to refinance it. Tell us about that. What was the outcome in other words? What did it appraise for? What did you end up pulling out?

David: So the house appraised for 95,000 dollars after the work I had done. I was expecting it to come in between 85 and 90 so I was very happy with 95,000. They let me borrow 75% of the value of the home which meant I got a loan for 71,250. Now I was all I for 53,500 which means I got back 17,750 dollars more than what I put into this house, okay? The house rented for 1000 dollars a month, so when I added up all my expenses by cash flow was about 450 dollars. So if I was to sum all these up, I ended up with a check for almost 18,000 dollars, more than what I put in, a house that was pretty well rehabbed and wasn’t gonna have any issues for a really long time, 450 dollars a month in passive income, plus every relationship that I built.

The wholesaler now knows when David says he’s gonna buy something, he’s gonna buy it. I went on to buy about eight more houses from that wholesaler. I met a landscaper who is willing to do a lot of work for really cheap money. I developed a relationship with a bank that I have refinanced about 20 more houses with after that, right? I could go on and on about all the benefits that came from this but that house became the cornerstone that I then built a portfolio in Northern Florida on because I used the BRRRR strategy well.

Brandon: Cool. Fancy. Last question of the deep dive. What lessons overall did you learn? Do you want to add to that? I mean, that was pretty good already but…

David: Yeah, this house, I was able to buy it because I had cash and I could close. What the seller needed was like a close within a week, right? So I was in a position of financial strength going into this that allowed me to capitalize on all these stuff. So there’s people that will say “Well of course you got a deal for 53,000 that it was gonna be worth 95.” Anyone could make money if that’s the case right? So be that anyone.

Put yourself in a position where you have the access to the same capital. Talk to private money people and say “Hey, this is what I want to do. If I find a deal, can you have this money on standby so I can go buy it, right?” Don’t just say “Well I can’t do that because I’m not person.” Ask yourself what would it take to be in a position to where I could do it too? Because now I have all my money back plus 17,000. So I went into it paying 53 and I walked out of it with a check for 71. Now I can go buy a house under contract up to 70,000 dollars, and I can do the very same thing again with the very same money and build my portfolio that way.

Brandon: There you go. So last thing I want to talk about because we’re talking about, this is the no money deal, people are listening to this and saying “Sure, it must be nice to have 55,000 dollars just sitting around. I couldn’t deal because of that.” What do you say to those people?

David: I got that money because I bought a different house and it appreciated in value and then I sold it, and I took the equity plus my original downpayment and rolled it into a more efficient deal. And I got the money to buy that house from working overtime at my job as a police officer rather than going to Cancun or hanging out with all my buddies when they were flying and vacationing because they thought they had extra income, right? I had a plan, I wanted it. I designed my life around the plan, what it takes to be successful. I executed it. I saved up a little chunk of money, and then by making wise investment decisions, I built it up, built it up, and built it up until I got to the point that that snowball was so big, that this first house I bought in Florida turned into 20-something more houses after that.

So, it’s hard in the beginning but it gets much easier once you get going. So if you can power through the initial like how do I do this phase and get into where you’re actually taking action, the whole thing becomes much easier.

Brandon: Yeah. That’s great, that’s great. Now I have one more point too is that if you’re trying to do things… let’s say you had the exact the same deal in front of you, this deal that David found here, like you could use one of the other strategies we talked about today, I mean that we’re talking about, like the partnership. Like David could’ve found a partner to bring the 53,000 dollars down or he could’ve done what we’re gonna talk about next which is hard money.

So let’s shift over there, away from BRRRR and move over to hard money. Now, hard money of course, what is it. Let me tell you a quick story. So when I was trying to flip my very first house, I told you guys about it earlier right, the one that didn’t go so well and I had to refinance it. But I was looking a way to flip and I had no money, no job, no credit really to speak of and I needed to find a way. And I read this on the book, it made mention this word hard money, and I was like “What’s that?” And basically what it is, it’s people or businesses out there who lend money usually to house flippers and to BRRRR investors, but usually house flippers, on very short term, like a year is usually about max. And then really high fees and points.

So you might be paying 10, 12, 15% on interest rate potentially, and you might be paying 2, 3, 4, 5, 10,000 dollars and a fee, we call them points, upfront on the deal. So it’s very, very expensive. And I remember reading this going “Why would anybody in their right mind ever pay somebody 12% to borrow from hard money?” And then the book just said this, it said well, that’s why when you run your numbers and when you do the math, just plug those numbers into your math and if it works out, who cares what they’re making? And it was like epiphany, like “Oh, that’s completely right. Who cares what they’re making? If the hard money lenders are making 20 grand but I’m making 30 grand, who cares?”

It’s a great way when you’re getting started to work in there. So have you used hard money at all?

David: I have used hard money for the initial, like on flips I use it a lot of the time, and I have used it a handful of times for BRRRR projects where I didn’t have the cash available, I was waiting on a refinance from other homes, so I used hard money to buy the house, then the refi went through, I went to pay off the hard money.

Brandon: Okay, yeah. So hard money can be a good tool. It is expensive, right? It’s honestly not as expensive as a partnership though if you think about it right? Like I like hard money especially when you’re getting started and you have all the funds for a couple of reasons. So first of all, a hard money lender is typically somebody who has been an investor before.  They look at hundreds if not thousands of deals. They get the business.

So it’s almost like you get a second opinion on your entire deal if it’s worth doing. If they don’t fund your deal, there’s a good chance that they do. In fact, I had a hard money lender once that would not fund a deal for me and I worked for him a number of times and he wouldn’t do it. He said “I don’t like the deal. I don’t think it’s good enough” and I went and did it anyway. I was like “Screw you. I’m doing it anyway.” And that deal ended up being the worst deal I ever did. I ended up losing much money on that one.

And I should’ve listened to him because he was more experienced than me. And so that’s another thing about hard money. It’s also very quick. You can get funded in days. And right now in this economy, in this part of the market, there are a lot of hard money lenders out there, a lot of them. So they’re competing. Back in the day where average was 15% to 18% for hard money, I’ve even heard hard money lenders getting into single digits now, down to 8% for hard money.  And like 1000-dollar or 2000-dollar fees. It’s getting very competitive at the hard money space. So you can potentially find some pretty decent money that is not that much more expensive than traditional but way faster, way easier to work.

David: Yeah. In a sense a hard money lender is a form of a partner also. They’re sharing risk with you and they’re sharing reward because if your house sells and y ou can pay them back, they win. If your house doesn’t sell, they just took a hit because they have to foreclose and take over the project you couldn’t work on. So they’re just a cheaper partner than giving away a big chunk of equity to somebody else. So yeah, you’re still partnering with somebody if you’re using a loan on a house at all. You might as well find an experienced person to partner with like a hard money lender than an inexperienced person who would leave you like in a situation you ended up with losing money.

Brandon: Yeah. That’s very true. So I want to talk, because it’s the no money show, let’s talk about hard money. Will hard money really lend with no money down? Like can you really get low money down loan? Yes and no.

So most hard money lenders like to see what’s called skin in the game which basically means you should have some kind of like incentive for not blowing the deal up right? Like they’re invested in you and people. Hard money lenders usually want to see that you have skin in the game. Now could that come from a partnership? Could it come from a credit card? Could it come from something? Probably.

That said, there are hard money lenders out there who will do a 100% loan and 100% of the rehab if you find a good enough deal. In fact, you know this book that Josh alluded to earlier that’s in pre-order right now, you can go to BiggerPockets.com/store to check it out. It’s called How To Invest In Real Estate. So for that book, we did some bonus content that anybody who buys the book gets and one of those pieces of bonus content is a series of interviews that I did with some lenders. A commercial lender, a traditional lender, and a hard money lender, and in that interview with the hard money lender, I flat out asked, will you guys lend on something no money and he said absolutely if it’s a good enough deal.

Like basically they will lend, I think it’s been a few weeks since I have recorded this, but I think it was like 65% or 70%. Whatever what the after-repair value is, if the property is worth 100%, when it’s all fixed up, they will lend, we will call it 65% of that, which means 65,000. So if you find a property for 50,000 that needs 15,000 dollars of work but will be worth 100 grand when it’s done, boom, you can do financially no money down there.

Now again it goes back to the if you’re flat broke, there’s a lot that could go wrong so I don’t recommend it. If you have no family to feed your family, you have no reserves, that’s not what we’re talking about here, but you could do a no-money down deal and if you don’t have the money at all, we’re gonna partner. Something like that.

David: I would add to that that your track record is gonna matter a lot too. If this is your first deal and you go to a hard money lended, like what’s an ARV? Oh, I think I heard Brandon and David talk about that. I thought it was an AVR. You’re not as likely to inspire confidence than if they know you’re a house-flipper, you’re successful, you’ve done several deals. Even if you don’t have skin in the game financially, you have skin in the game time-wise and they know you value your time because you’re a successful business person. So having a couple of deals under your belt will definitely grease those wheels to make it easier for you.

Brandon: Yup. But they will lend to first time investors. You better have that knowledge. You know we talked about the triangle earlier, the deal delta is what I call it. The deal delta, you got to have the knowledge and the hustle if you want to avoid the money. You got to have the knowledge and the hustle if you have to avoid bringing in the money. You can tweet me on that.

Brandon: Alright, moving on to the next one, unless you want to add anything more to hard money. Oh, I will have one more on hard money. BiggerPockets actually has the web’s largest, I believe the web’s largest collection of hard money lenders. We have been adding to it for years, it’s all sorted by state, it’s fantastic, and it’s 100% free to go search that list. So go to BiggerPockets.com/hardmoneylenders.

And also if you’re using the BiggerPockets calculators like the house-flipping calculator, when you get a result like on page four of the calculator, you can actually click one button and it will send it over to some hard money lenders in your area to look at the deal that you just analyzed, which I think is super cool as well. So definitely check it out at BiggerPockets.com/hardmoneylenders.

Last one of the four today. Well maybe it doesn’t apply to everybody, but something I’m just a huge fan of is this idea of house-hacking. So David Greene, what is house hacking?

David: House hacking is utilizing different strategies to lower the payment that you have to make in a house you’re buying and it can take many different forms. It can buying a triplex and renting out two of the units. It can be buying a home and renting out a couple of bedrooms. It can be buying a fourplex, renting out three of the units and then two of the bedrooms and then you sleeping in the family room or something, right? Like there’s all kinds of ways you could combine this, but it’s looking for the highest and best use of your property from a financial perspective. How can I make this into an income-generating machine that I can also live in at the same time. So on top of all the money the house is making you offensively, it’s now saving you the money that you use to pay in rent, so it’s helping you defensively as well, which can have huge impacts on your financial position overall.

Brandon: Yeah. And I love the fact that like house-hacking, it’s like you get training wheels right so you kind of learn how to do it. It’s like, you know I figured out my very first rental property after I kind of accidentally flipped the house I lived in. I bought a duplex. And all I knew was well, with two houses in one lot, if I live in one house, the other house could help pay the mortgage. And in fact, my mortgage was like 620 a month and the first day they brought over my new tenants about 650 in rent in cash over. I don’t think rent in cash anymore, but they were like 650 over and I was like, I’m living for free. Like this is the best thing ever. Now you can dump all of the money that you were spending on expenses, like I used that actually to quit my job at that point to go flip houses. And I was able to do that because I had very few expenses.

Scott talks about this a lot, Scott Trench, host of the BiggerPockets Money podcast and author of the book Set For Life. Scott talks a lot about house-hacking because like that’s what he did as well. He actually read an article years ago that I wrote on househacking then he started househacking, then he came on BiggerPockets and today he’s president of BiggerPockets Corporation there in Denver, and host of the money podcast. So househacking could be a fantastic way to get started.

And of course there’s duplex, triplex, fourplex, some people even do it with a single family house. They rent out the bedrooms. And then there’s one more way to househack that we don’t… actually there are two more things about househacking that we’ll talk about. First of all, if people are wondering how you do househacking with no money down, here’s what we mean by that. When you have a house that you’re going to live in for at least a year, you can get some special financing that is very low downpayment, sometimes no downpayment.

For example, there is something called an FHA loan, it’s 3.5% down, so if you bought a 100,000-dollar property, it’s 3500 bucks, fairly easy to qualify for that thing, and I’m sure David, you probably work with FHA buyers. Every house I sell is to an FHA buyer. There is also something called a USDA loan where if you’re in a little more rural area, you can get it for no money down. There is also the VA loan which is zero money down for either you’re in a military or your family was, like your spouse. And there’s even something called a 203k loan, which today I coined a new term.

So househacking was a term that we came up with years ago, then BRRRR was a term we came up with a few years after that. The new term you’re gonna hear here first today is BRRRRousehacking. BRRRousehacking is the idea where you’re combining househacking with BRRRR. You’re buying a property that you’re gonna live in, you’re gonna fix it up, you’re gonna rent it out as a duplex, triplex, fourplex or maybe just bedrooms, and you’re going to refinance it, but you may skip the last refinance. So it’s really like BRRRR. And here’s how.

It’s a loan called the 203k loan. It’s part of the FHA program, don’t get confused here, I’m getting into the weeds here in a little bit but this so important. 203K loan is a loan that is part of the FHA government-sponsored loan which allows you to bring just 3.5% of the total, which means the rehab and the purchase price. So if you find a fixer-upper that you want to buy and then fix up. Let’s say you find a house for 100 grand and it needed 100 grand of work. Well now you’re at 200 grand total right? So you can just bring 3.5% down of that 200 grand. You’re bringing 7,000 dollars to the table and FHA program, the 203K loan program will fund the entire 97,000 dollars of your rehab. It’s pretty cool.

Now the numbers have to work out, it’s got to be an incredible deal, but BRRRRousehacking could be a great way to get in because you find nasty smally multifamily and get in there. I love BRRRRousehacking, this idea.

David: Yeah, and what I love is that we’re combining two of the methods that we’re talking about in the show to give you a better result, and in a little bit when we sum up the show, we’re gonna go over some examples, other examples of how you combine this tool from the toolbelt with this tool from the toolbelt and build this cool thing that you can kind of stand on to elevate your financial position.

I have an example of a client that listens to the podcast, he reached out to me, his name is Ryan Mineger, awesome game. He said “David, I’ve been listening to you on the BiggerPockets podcast, I work in San Francisco, mortgage are insanely expensive but I love this city.” He works in the tech industry so they make good money but they also have to spend it all on their expenses. “So how can I do this?” So we talked about househacking, right? Obviously the more bedrooms he could buy, the better of he could be because he has more to rent out.

So we found Ryan this like, it’s kind of like a condo, similar to a condo in San Francisco in a very, very good area that a lot of people wanted to live but of course they’re expensive. He was able to buy this thing, rent out two of the rooms, and live in it completely for free in the most expensive city in the world while having other people pay off his mortgage and saving all the rent that he was throwing away to rent from somebody else, right? It’s the perfect way of he gets to be a home owner, he gets to save all his money, he gets to build equity over time and he gets to pay his loan down over time, in a city that we typically would think there is no way that that could work, right?

And because he’s renting it out to other people living in a tech industry, most of those guys work all day, they come home to sleep and they go right back to work, it’s not really gonna have a big impact on his living situation. Now, if you’re hearing this and you’re thinking “Well I could never have someone live with me,” that’s fine. Is it worth having to work until you’re 70 years old because you don’t want to have someone live with you for a short period of time? Right?

Like it’s sometimes making that sacrifice for a little while is worth it because of what you’re gonna get in the end, and if you just work a little harder, like maybe you find a nurse who works the night shift, and she is sleeping when you’re at work, and when she’s at work, you’re at home sleeping, and you never run into each other. It’s not like you’re gonna come home and some weirdo’s gonna be eating Cheetos on your couch in their underwear, like just making everybody uncomfortable. You might be able to find a way to where it has a minimally intrusive impact on your lifestyle, and you get all the benefits of househacking.

There’s lots of ways to look into househacking but if your problem is I don’t know, I just can’t afford to buy a house right now, what you’re really saying is I can’t afford to buy a house right now and have the lifestyle that I’m accustomed to and I want to keep.

Brandon: Yeah, that’s fantastic. And yeah there are other ways to do it as well. If you don’t want to live with somebody like, you could do a vacation rental hacking, like VRRRRousehacking. We’re making up terms left and right here. You can do VRRRRousehacking right? You could do a live and flip, that’s another method right. Mindy, host of the Money podcast, her and her husband are like serial live and flippers. We need to make a name for live and flip, that’s too many words. Fliphackers. I don’t know.

David: Well it’s awesome because you avoid capital gain taxes when you go sell your house and that’s like a huge expense when you’re a houseflipper, and you’re reducing your risk by an incredible amount because if it does not go up in value, you can’t sell it to make money, you just keep living there. It’s very hard to lose when you’re a live and flipper.

Brandon: In fact the house that I’m living here in Washington, you know the house that I’m selling, basically that’s what I did. Like I haven’t actually officially closed yet, we’re closing here in a month or so and I will officially become a Hawaiian native at some point here coming up this fall. But when the house sells, so like, what I did was I bought it for 280,000 dollars a little over two years ago. I bought it for 280,000 dollars, then I put in probably like 25 grand worth of work, I fixed it up 30 grand, I remember it wasn’t like nasty but it was like oak cabinets, oak counters, I mean like laminate counters. So I like fixed it up, made it look repainted, made the landscape and whatever, put in 25, 30 grand of work over those two years.

I’m selling it now for 400 or just like 390 or whatever it is. So like essentially at the end of the day, I’m gonna make I think somewhere in like the 75,000-dollar range, like maybe 65, I can’t remember the closing cost total. But anyway, let’s call it even 60 grand. So I’m basically making 60 grand at 0 taxes, I held it for two years, it’s my primary for two years, I owe no taxes on it. If I were to take 60,000 dollars, divided by 24 months roughly that I lived there, that’s 2500 dollars a month I was basically making. Guess what my entire expenses to live in that house were, about 1800 a month? 1900 a month?

So in other words I just lived for free if you really want it like… so it’s the same thing. That’s why we call it part of househacking because if you do a live and flip right, you can potentially like at the end of the day live for free or make a large chunk that you can then dump into real estate later. So that’s live and flipping. I think it’s very, very cool and a good way to get in for low or no money down as well.

David: When you hear Brandon and I talk about we use real estate to build wealth, it’s not are we live and flippers or are we houseflippers or are we BRRRR investors, it’s all of it. I’m going to do BRRRR investing and I’m gonna flip a couple deals a year while doing a live and flip and I’m gonna househack that live and flip to save myself some money and I’m gonna maybe buy it with private money partner, like you’re combining all these stuff together to save you money at every step, and all these little small actions add up to huge results over time, and you’re not really doing a lot of work. You’re letting real estate do the work.

There’s this saying that small hinges swing big doors. Real estate is a very big door. You just have to control that hinge. And we’re giving you guys some of the tools that you can use to control and build that hinge to swing a really big door. And once you get good at this, a lot of it kind of just takes on a life of its own and does stuff for you so now Brandon did this and he moved into Hawaii and from Hawaii he can househack, he can live there for free. If he makes his house worth more, he can do a live and flip and he can move into somewhere else where he can do a vacation rental.

There are all kinds of doors that are gonna open up because we understand how real estate works and how to make it work for us, then you start applying those things and you can live an epic life and that real estate pay for it.

Brandon: Very, very good. And before we get any further, we want to kind of sum up this show and then we’ll do fire round and famous four after that. So why don’t we just kind up of wrap up your thoughts today. I’m gonna let you kind of start with that David.

David: Alright, so here’s what I want to talk about. One of the reasons that it’s really good to invest with no and low money down is not just because you can invest sooner and not just because of the risks that it’s reducing, it’s also because it impacts what we call the velocity of money. That’s a fancy economic term that has to do with how quickly the same dollar is used to buy several products. It’s usually used by the federal government when monitoring things like the GDP of the country to figure out like how quickly our dollar is moving through the economy, but you can take that same principle and apply it to your own specific financial life.

I want my velocity of money to be very fast. I want to earn a dollar, save a dollar, invest that dollar, get it back, and then go invest it again. And the reason is when I look at the whole process of earning through real estate, let’s take the BRRRR strategy for example, you make the majority of money when you buy then you might add a little bit of money during the rehabi if you do it well like adding bedrooms, adding bathroom, stuff like that, but the majority of it is when I bought that deal, and the deep dive example that I gave, I made most of my money when I paid 45,000 dollars for that house. I spent 8500 on the rehab and I probably added some value to it through the rehab as well, but I made 30, 40 grand when I bought the deal.

So if I know that, I want to keep buying as many deals as I can because every purchase is it’s what adding to my net worth, that’s where I’m going with my equity. The faster I do it, meaning the quicker I get my money back and reinvest it, the quicker I can build wealth. These strategies allow you to take the same dollar and invest it faster and faster and faster, making it less expensive with every single acquisition because of things like househacking paying for a lot of your bills. Most of us are used to thinking in terms of how do I reduce risk, how do I reduce risk, and that’s good, you should be thinking of it. It’s not the only thing you should be thinking about. You should also be thinking about how do I build equity, how do I build relationships, how do I streamline this process, right?

So what we’re not talking about now helps in both areas. That’s one of the reasons that we’re like so passionate about this is why you should do things like that. It also forces you to find better deals. It’s cheating if you just go put 80,000 dollars down on a house and then you tell people, “I bought my first property, cash flows” and you’re making 200 bucks a month, right? The return on your money is like 3% ROI or something, it’s nothing to brag about, right? It’s don’t get yourself fooled into thinking because you saved a bunch of money, you made a bunch of money and then you went and invested it, you’re a great investor. What we’re talking about forces you to really find the best deals because you’re trying to get in and out with none of your own money. So it really makes you dial down and narrow down exactly what you’re looking for and get really good deal so you can move on to the next.

The last thing I want to leave you with is combining the strategies in Brandon’s toolbelt analogy, so you’ve got a hammer, you’ve got a screwdriver, you’ve got a… give me another tool Brandon, you’re a handy guy…

Brandon: A tape measure.

David: A tape measure, there you go. That could be like a VP analyzing tool, like one of the calculators is your tape measure. But, you’re combining all of these strategies together like I mentioned earlier, to make them all work for you. So one of the popular ways I see this done is someone uses hard money to buy a property, then they refinance that hard money with private money that they started raising but they couldn’t get it all together before they had to buy the deal. So they used hard money to buy the deal, they raised private money, they pay off the hard money lender and reduce their interest rate, then when the property is finished, they go refinance it into a conventional loan with like a portfolio lender, and they pay back all the private money, and they start it off at a 12% interest rate and ended up at a 4.5% interest rate and added a ton of equity to the deal, right?

So if you understand all three aspect of it, you can make those work for you and buy deals that other people can’t.

Brandon: I call that creative combinations in the book on investing with no and low money down, and I think I tell the story in the book, I’m not sure but basically when I bought my first apartment complex, my 24-unit that I owned back, I sold it now but when I bought that, what I did was used five different creative strategies combined together. So first, I found this great deal, I talked with the owners, I had no money to get into this thing. So they let me do what was called the lease option which we’re not talking about today but it’s in the book if you want to know more about it. We used a lease option, a triple net lease option for me to able to take over the property essentially. Now, I had to rehab the property, so I had to fix it up.

So I did a lot of my own work on fixing it up because I didn’t have any money so that’s one thing I did have right? But I needed rehab money, so I brought in a partner to fund the actual cost of the rehab. It’s almost like I had a [30:54] materials whatever, so I brought in a partnership. The partner though didn’t have the money to fund the deal, so we used a home equity line of credit that the partner had on their house to fund the deal, and then I refinanced the property into a normal commercial loan later on, so I BRRRR’d it. So let’s see, what do I got, so I got BRRRR, I got the partnership, the got the HELOC, I got the triple net lease option and what was fifth one in there?

David: Lease option?

Brandon: I got lease option, BRRRR, home equity line of credit, the partnership, oh and seller financing. At the end, although I did a lease option to start with, six months later, we converted that, well I refinanced it first into seller financing, so then I actually owned it. Because they owned it free and clear. So now for two years I paid them and then I refinanced it into a commercial loan. So I actually held it for two years as a seller finance deal so I could buy equity and then when I go to the bank, it was just a straight re-fi that I took out a hundred grand. Now if I would’ve gone to the bank with a lease option, I would’ve had still put down a 25% downpayment, but because it was a seller finance, I had the equity, they just did a straight refinance and cash out re-fi.

Anyway, a lot of you guys had no idea what I was talking about there and that’s fine. I do have a book if you want to kind of go in detail on that, I made a Kindle book, it’s on Amazon called like How I Bought a 24-unit for Almost No Money Down. Just go to Amazon, type in Brandon Turner, go look for it, like honestly it’s like 99 cents and check it out and then leave a review because I want more people to read that book. Because it basically just walks you through this idea, and you don’t even need to understand what I just said there, right? What we need to understand is that the best creative deals are put together by a variety of methods and just the more tools you have in your toolbelt, the more you understand how those tools work, the more projects you can take on. Drops the mic.

David: There you go. With every step of the way, all five steps, you put yourself in a better position than you’re at the step before, and rather than saying “I need to go in there and chop this tree down with one swing, otherwise I can’t do it,” you said “Nope, I’ll just make five very strategically executed swings that will bring down the whole tree.” And that’s what we want people to see. Most of the time when someone comes to Brandon or I and says “Hey, I want to invest on real estate but I can’t because of this reason,” they’re trying to solve that problem with one decision or one phone call or one move. Where it’s really not something you can do but if you broke it down into a bunch of little steps and strategically put a plan together, you could take it down working backwards, and you need the methods we’re talking about to be able to do that.

The last way that I will bring up like a creative combo again, that’s a great term, is using hard money but when the hard money lender says you need this much skin in the game, that’s fine, go find a private money lender to represent your skin in the game. You can still be in for none of your money, you’ve combined several different methods and you can use other people’s money to bring a deal down, and then once you’ve done a couple of them, you could have your own money or you have at least a track record to maybe the hard money lender doesn’t ask for it.

And then let’s say the private money lender goes and tells all their friends “Yeah, I invest with Brandon Turner and I make this much money” and they go “Holy cow, I want to do that too.” You get enough of those you don’t need a hard money lender anymore. You can borrow money at 7% instead of 12% and no points instead of 3 points and now you’re in a better position. You get enough of those private money people together, you’ve eliminated hard money, now you can take bigger deals. Maybe you get into commercial investing. The possibilities are endless if you keep making small progress with like a repeated effect.

Brandon: Yeah I love that. I want to end this segment with one more, like a quote, I guess you can call it, even though I’m gonna come up at the top of my head so I’m gonna butcher it, but in Rich Dad Poor Dad, Kiyosaki has this great line that says essentially, I don’t know if it says poor people but basically, “Poor people say I can’t afford it, rich people ask how can I afford it or how do I afford it?” And that changed my life when I heard that. And that just kind of summarizes the creative finances about asking how. It’s about asking how. It’s like when you have a deal in front of you, ask how. How do I figure this out? How do I make this work? How do I put this together? How can I try this thing or this thing.

It goes back to the creative combinations. It goes back to knowing a lot about a lot of different strategies and toolbox analogy. It’s about networking, about knowing people, the more people you know the more chance you can put together these things, and about finding good deals, because if you find a good deal, you will find a way to fund it. So go out there, find good deals, network, connect with people, learn, grow, bring the knowledge, bring the hustle and you all can do it. So there you go, there’s your encouragement for the day.

Let’s shift gears here and head over to the world-famous Fire Round.

It’s time for the Fire Round.

Here’s why I’m a big fan of SimpliSafe home security. SimpliSafe is ready for anything that get’s thrown at it. If a storm takes out your power, SimpliSafe is ready. If an intruder cuts your phone lines, SimpliSafe is ready. Say they destroyed the keypad of the siren, SimpiSafe will still get you the help you need. Here’s what I love about this. Maybe it’s overkill, maybe you don’t need to be ready for every worst case scenario, but SimpliSafe is always ready just in case and that’s what makes it great. Now, SimpliSafe could cost an arm or leg, it should but it doesn’t. And that’s because they’re good people. They charge what’s fair, what’s right. 14.99 a month. No contracts. No hidden fees. I recommend SimpliSafe to everyone I know. You got to check it out. I even have it in my own house. So, check out SimpliSafe.com/BiggerPockets.

Brandon: Alright, let’s get to the Fire Round. These are the questions that come direct from the BiggerPockets forums, I almost said the line for the Famous Four there. These are the questions that come out of the BiggerPockets forums and we’re gonna fire them at each other with a little duel today. Maybe we call this instead of a duet, it’s a duel, it’s a podcast duel.

David: I like that much better.

Brandon: A podcast duel, that’s much more manly-sounding than a podcast duet. But hey, I was in show choir in high school, I can do a duet.

David: So I’m gonna turn around, put my back to yours, wait 10 paces, and then you turn around and you’re gonna fire at me?

Brandon: Yeah, here’s what I never understood about that. Let’s say you were to duel with somebody, right? Like Aaron Burr and who was that, Thomas Jefferson? No… Aaron Burr and somebody. Anyway, like turn around, take 10 steps and turn around and shoot each other right? Would you not take nine steps and turn around like and shoot?

David: Or 10 steps way faster?

Brandon: I guess it’s like the gentleman thing but like man, gentlemanship goes out the window when you’re gonna die, like when there’s a gun at you. I would take one step. I would be like alright let’s boom, and while talking I would shoot the person and then be done with it.

David: Right. Because they turn their back to the person trying to kill them. First of all, terrible police tactic. We would never encourage that right? And then second of all, what’s the worst that happens? Oh, like throw a penalty flag, 15-yard penalty, you didn’t take 10 paces. You’re in the penalty but you’re still alive.

Brandon: Anyway, okay, the let’s to the duel here. David, how do I find accredited investors if I want to raise money from them? How do I find accredited investors?

David: That’s a good question but you got to be careful with it. I’m not a lawyer but I know that there are rules that are set in place by the securities exchange commission that monitor what the rules are for actually looking for people to raise money from. Now, accredited investors don’t fall under all of the same rules and that’s why people tend to chase them. However, accredited investors usually have higher expectations so you have to give up more of the deal. You have to understand that’s what you’re doing when you’re getting into this. My strategy for finding accredited investors has been, what’s the best word I should use here. Like showcasing myself or building up a reputation as the expert. So I hold meet-ups, I host this podcast, I write books, I produce content, I write articles. I do stuff that would let people see like “Well, this guy must know his stuff if he’s doing XYZ” then I get them in from of them and I talk and I prove I know my stuff, right?

So once they hear me, they’re like “Okay, I trust David,” then they look into me and they see that everyone around me says “Yeah, he’s a stand-up guy. He’s not gonna lose your money, he’s not going to rip you off.” They’re way more likely to invest me. My actual conversations with them are very short, 5 or 10 minutes long rather than me needing to spend hours to convince this person why they should let me borrow their money. I think that that’s a better strategy, is you set yourself up using some of the examples that Brandon Turner gave earlier for how you showcase your deals and make yourself like a thought leader in the space, and let them come to you because just like you need money for deals, they need a return on their money. They’re probably not getting very much of anything on it while it sits in the bank.

So it’s much better to make sure like when you walk around, I guess the analogy would be you want a toolbelt that’s really impressive. They’re just like “Well, that guy looks like Al Borland over there. He’s just got a toolbelt full of all kinds of different tools. I want to work with that guy. He looks like he could build an entire house. He’s not just a plumber. He’s not just an electrician.” And there’s kind of like you’re the PhD of real estate and everybody respects you more.

Brandon: That’s really good. One thing I’ll add to that too is when you become an accredited investor yourself, in other words when you become a more higher net worth, you earn a good income, you probably are going to start hanging around with more people who are that as well. So I’m gonna give this example. So we talk a fair amount on the show about this group or tribe that David and I are both part of, in fact the reason we became good friends is through this group called GoBundance and essentially, to be in GoBundance you pretty much have to be an accredited investor. But once we’re part of that group, like David and I could raise money in a heartbeat from a lot of these guys because they’re there. They have money. We’re in their group, right? Like they trust us because we’re in the same group. We’re in the same peer group.

So I mean, you don’t have to join GoBundance to be able to get that but the idea being when you surround yourself with people, you’re not begging for money from people, you’re investing with other people that are of the same level as you and same income. So I would encourage you, go out there and do what you got to do. Hustle, work hard at your job, become and accredited investor yourself which basically means 250 a year in income or a million dollar in net worth, there are some rules there.

David: And that’s because rock stars know rock starts. I don’t know what anything else to say. RKR. Become a rock star, you will hang out with rock stars. Life will get a lot easier when you’re playing with people that make really good music.

Brandon: There you go, alright.

David: Alright Brandon. Your turn. I hope you’re taking you’ve taken your 10 paces because here it comes.

I have a prospective tennant that has an emotional support animal which happens to be a pitbull. Do I have to accept it?

Brandon: Alright, good question. So of course I’m not a lawyer that we can preface every question with that really but the key with this, okay, everybody knows if you’re a landlord right now, you know that the emotional support animal thing is really obnoxious, right? Because there are legitimate people out there who legitimately need an emotional support animal. I 100% agree with that, right?

And there are a lot of people who go and buy it for 29.99, a piece of paper on the internet that says they can have an emotional support animal. Well there are doctors that write notes faster than like Prozac, right? So like they love this idea of tennants, love the idea of taking their pitbull, their dog, their cat, theire moose ,whatever, and calling it an emotional support animal because they know that legally as landlords we can’t ask things like why do you need that emotional support animal? We can’t refuse to rent because of that emotional support animal.

That said, the key there is because of that support animal. You can refuse to rent that tennant for any other reason. Just because they have an emotional support animal does not mean they’re guaranteed to be accepted to your property, right? That’s often times people get confused about that. You just can’t deny them because of that. So like, this is going to sound like a really big generalization and people are going to yell at me later, but if you have a pitbull, there is a decent chance there are other things that I can deny you for.

And again, I know there are people who own pitbulls that are fantastic people, but I also know there are a lot of people that own pitbulls or other nasty breeds of dog, I love actually pitbulls, I really do love them, but there are people who own them that have a lot of other problems in their life too, right? Oh you have a felony, yeah we don’t take people with felonies. So you can almost always find other reasons to deny people that have nothing to do with that. That said, I actually have no problem generally with pets and properties, I just charge a little more for them which you cannot do with emotional support animals, you can’t support more.

But people with pets or emotional support animals tend to stay a little longer because they know they have trouble getting those… Sorry that was a long-winded answer to no, you don’t have to take them if they have an emotional support animal but you cannot deny them because of that animal. Be very careful there. Read your laws. Read the landlord tenant acts. Read the federal fair housing. That’s the key there.  The federal fair housing, what you can and cannot discriminate against, and be careful because you don’t want to end up with a huge massive fine or jail time from the government.

David: Yeah. And it’s not that we don’t like people that have pitbulls. It’s that if somebody’s chihuahua bites somebody, that sucks. If somebody’s pitbull bites somebody, that can end a life. And you have a lot more legal exposure when it was your property because it’s typically not the tenant that gets sued, it’s the landlord. And that’s where this whole thing even comes up for pitbulls, right? Brandon and I are not saying that if you have a pitbull we don’t like you, we don’t want to rent to you. We’re saying that we don’t want to get sued because your dog bit somebody and it created like serious havoc, as opposed to like a golden retriever which you very rarely hear about ever biting somebody, right? It’s just the numbers game that we are talking about.

You are exposing yourself to much more risk if you rent to someone that has a pitbull and you were not there to raise that dog, right? People listening to this that are like, I have a pitbull, what are you trying to say? I don’t have a felony. Yeah, that’s great. You’re a good person and you raised your pitbull right. There are a lot of people that were not and they’re drawn to pitbulls and you can’t control how they raise that dog or if they had been in dogfights when it was younger, if they had been abused and now it’s extra defensive. So take off your personal hat for a minute, put on your business hat for a second and think about it. And hear what Brandon is saying is that it’s not the pitbull itself but if a tenant is going to cause you problems, find a reason that isn’t the pitbull which you probably would’ve found anyways if you were going to deny that tenant. There was something that you’re gonna do.

So very, very good and smart advice. I like that.

Brandon: So one more thing to add on to there. Insurance companies, actually a lot of insurance companies do not allow you to rent to somebody with a certain breed, and it’s not just pitbulls of course, we’re using generalities here but it’s like pitbulls, German Shepherds, and there are a few on the list, they being dangerous breeds that statistically have a higher likelihood of causing problems.

Though here’s a really fun dilemma for landlords right? Is your insurance company will not allow you to have a pitbull yet a tenant who is perfectly qualified, you cannot get rid of them or you cannot deny them because I mean they’re really like perfect, they get a pitbull as an emotional support animal, what do you do? I have no idea. That’s a hard thing right? Because your insurance company will not do it.

I actually would love to ask a lawyer that question but I think even lawyers have generally, if they feel like I have asked things like that too, they just always say the same thing, find another way to disqualify them. But what if your already existing tenant gets a pitbull as an emotional support animal and your insurance company freaks out? You may have to just get a more expensive insurance and that just sucks but that’s the world we live in and that’s whatever.

So anyway, lot of conversation, actually if you go into BiggerPockets forums you’ll find a ton of threads on this topic. One of the hottest topics for landlords for today. And it’s not just landlords. It’s like you go to Walmart and they have sign there that’s like “we allow registered service animals or whatever and not emotional support,” like they have that actually spelled out pretty well because they have very expensive lawyers, and they can handle lawsuit. So they’ve figured out the way around that and ata some point the government is going to have step in and draw some lines because right now it’s just too gray.

That was the longest Fire Round answer in history but moving on. David, am I crazy to self-manage a rental property from afar?

David: So I’m sure this question is coming to us because I wrote the book on long-distance investing and here’s how I would answer it. When you’re considering management services, they are doing two things for you. One, they are handling the Xs and Os of actually managing a property. Collecting a rent, advertising it for rent, fixing stuff when it goes wrong. Two, they’re acting as an adviser to you and in my book I spell out that’s actually the more valuable aspect of what they offer, is the advice that I get from them regarding where I’m investing and what strategies I should be using there.

I don’t think you should be managing from afar unless you used to live in that area or you have intimate knowledge about it so that you don’t need the advise of somebody that’s boots on the ground for you. If you’re like me and you live in California, you’re just investing in other states because they make more financial sense for you, you can do it from afar. It will be more work, right? You can go find a handyman. You can put a lockbox on the house that they can use to get in and out. You can find eviction services and find someone to handle that for you. Like you can piece together everything you need if you’re a total cheapskate and you don’t want to pay a property management company. But you can’t replace that advice that they were giving you. Should I buy in this neighborhood? What should I charge for rent over here? What should I expect from the tenants? Is everyone gonna have a pitbull or is nobody gonna have a pitbull? That’s why I like using management companies because I don’t want to put all that burden on myself to solve all these problems and figure this out and take all these risks because if I fail I’m probably not going to want to keep investing and I’m gonna lose a lot money over the long term that I could’ve made.

So you’re not crazy to self-manage from afar if you don’t need advise and you want to do all these work of putting stuff together. I would advise you that if you’re worring about spending a hundred bucks a month or something or less on management, you’re trying to save that money, challenge yourself to find a way to do better at your job so you can get a raise of like 2 or a dollar an hour, something that would equal a hundred dollars a month, right? It’s probably much easier for you to step the game up in other areas of your life to save that money than save it on a property manager.

Brandon: That’s a great point. Alright, last question.

David: Alright, Brandon. Is it the consensus that in a rehab you should always use white cabinets? This is funny. If the property already has useable cabinets that aren’t white, is it always worth it to have them painted?

Brandon: Yes. 100% of all houses should have white cabinets.

David: In fact we should make this a law.

Brandon: Yeah. I will be contacting our president and asking for a law on white cabinets. Okay, so white cabinets, they do look great, right? They’re kind of timeless. Everyone wants the white cabinets typically. They’re definitely not required. In fact, I  did have a rental. I did a BRRRR recently. Well I’m in a middle of a BRRRR right now, we got to refinance it here soon, where I took it and I painted it… I went on Pinterest and my wife and I went through Pinterest and we’re looking at cool pictures of cabinets and we found there was like this dark navy blue and it looks super cool. So we went and found the exact color, painted it, looked super cool.

So I would say you want your cabinets to be like modern, modern doesn’t mean white. Go on Pinterest, look for some cabinets. White works though. If you want to do white, easy.

David: But if it doesn’t need to be painted and it’s in a perfectly fine color already, it would be kind of silly to go paint it white just because you heard other people say renters want white cabinets.

Brandon: But if you got like a nasty like 1999 orange oak cabinets, like I did in my house, the live and flip I did, yeah we painted those cabinets cream color. It wasn’t even pure white. I actually cream cabinets way better than white. Like, a little off white and it looks way better. And that took, I don’t know. I hired a high school girl to come over and paint it for a week and she painted my cabinets for like 500 bucks. So, easy and she did a good job.

David: Go Brandy.

Brandon: Alright. Well with that, that’s the end of the Fire Round. Let’s get to today’s…

Famous Four.

But before we get to today’s Famous Four, let’s hear a quick word from Mindy and what’s going on this week on the BiggerPockets Money podcast.

Mindy: Hi Brandon. You won’t believe who I was able to snag as a guest this week. It’s you! And some guy named Josh who claims he founded BiggerPockets. Scott and I turned the tables on you and Josh this week and put you in the hotseat. We got a bit of your money story, some tips and tricks that you’ve learned from your decades in the business, and even some fun Harry Potter references. What does Harry Potter have to do with real estate investing? You’ll have to listen on Monday. Okay, go to the Famous Four.

Brandon: Alright, thank you Mindy. And with that, let’s get to today’s Famous Four. These are the same four questions we ask every guest every week. We’re going to alter them a little bit because you guys have all heard me and David’s answers before.

So first question, David, any recent real estate books you’ve read recently?

David: Yeah, it was by the redundant author of redundancy.

Brandon: Thanks. Any good books you read recently on real estate?

David: I just read Emerging Markets by Dave Lindahl. It was a little bit like salesmany, like you could tell he was trying to get you to sign up to do his courses. But there was good information in it and more importantly it really hammered home the point that, like what we’re talking about, you want to find deals that have equity in them. You want to create equity out of your deal. He talks about specifically by looking for markets that are likely to be appreciating in value and growing there and what he calls the path og progress so that you could create equity when you buy, and he talks about the BRRRR strategy a little bit in the book before it was called BRRRR. So I like it because I’m a long distance investor and I feel like when you combine the principles in his book with the principle in mine, you kind of get that sweet spot of I’m gonna go invest in another state and I’m gonna pick an area that’s likely to be growing more so that I can get my money out faster.

Brandon: Alright that’s good. I’m gonna throw in an old one what I read a long, long time ago but it really inspired me, I thought it was really good. It was called A Million Bucks by 30 by Alan Corey. Alan Corey might even be… he actually listens to this podcaster or emailed me a few years ago and said he was listening which was kind of cool too. But year, A Million Bucks by 30. It was just like a story of this guy named Alan Corey who went out there and used real estate to make a million dollars. And he was also, he was like on Jerry Springer and he did just like crazy stuff. It was really a fun to read. Anyway, I found it at my local library. A Million Bucks by 30 by Alan Corey. Pretty entertaining read.

And he is actually now a real estate agent somewhere in the US, can’t remember, I think Atlanta maybe. Anyway, alright. So business book. You read any good business books lately you want to throw out?

David: Yeah. I’m reading one right now called Mindset by Carol Dweck. A lot of people probably heard of it. It’s a pretty popular book. And I just got to a part where she is talking about, well basically the books talks about that there was like a fixed mindset and a growth mindset. Whereas fixed mindset people think like I was born this way, this is just who I am, so if I’m not good at something I shouldn’t do it. And growth mindset, people think like I will become whatever I want to become. I will adapt to any environment that I’m in, and why it’s better to have a growth mindset and people that have them tend to do better in life because they filter things that come their way like failure and instead of saying I failed they say “I just learned a bunch new stuff. I’m more likely to succeed the next time” as opposed to “I just failed at this that’s why I shouldn’t try any more. I shouldn’t do anything new.”

And she said something that really, really struck me. She said there are two kinds of leaders. There are people who say “This is my plan. You go execute it” which I realize right away that’s usually how I am. This is what we’re gonna do. How do I get an employee that will go execute that plan? And there are leaders that say “You are very talented. This is the general direction we want to go. I want you to come up with a plan for how to get us there and encourage and grow those people so that they’re not dependent on the leader whenever something goes wrong to run back and say “Okay, it didn’t go according to plan. How what do I do?” And I think it’s much harder to develop talent that way but I was convicted and realized this was what I needed to be doing. I need to be taking the people that are in my world and helping them to become better versions of themselves so that they can grow within the world that I’m trying to create and help us all grow.

So with that being said, I made up my mind that the David Greene team is hiring. I want to find people that believe that they’re talented individuals who are not happy in the job they have or believe they have more to offer and they want to get together and figure out like how would they be able to help. And I want to have the focus on how do I grow you as a person with what I know to help you reach your goals so that you can help me reach mine in the process. And it’s a much different way of thinking but I’m absolutely like convicted this is the way it needs to be because it’s too hard if I’m trying to control everything and then having other people do it my way. So if anyone is interested in that, please reach out. We’re putting together masterminds to talk with people about it. And then Brandon, you being my friend, you can hold me accountable to like if I’m doing that or if I’m not doing that because it’s hard.

Brandon: That sounds good. That sounds good. Hey, what’s Christa’s email? Your assistant Christa, what’s her email?

David: So the best way to email is actually Allan, the guy I talked about earlier. It’s [email protected]. He will put you together with us and get you scheduled for the next mastermind we’re having if people want to get together and talk about how we can help each other.

Brandon: Nice. Very cool. I’m gonna throw out there the book that you and I both absolutely love. It is not a business book but I believe it applies to business, and it’s a book called Wild at Heart. So Wild at Heart changed I think both of our lives quite a bit. It’s a book about like discovering the heart of a man, so if you’re a woman you can still read this book. But they actually have a version for women, I think it’s called Captivating Heart or something like that.

Wild at Heart was a book, just like how we as men, and again there’s a woman version but I’ll speak for the one I read, have like this wound or this hole in our heart that society tells us to be one way, and that’s not how we were made to be, that’s not how we are, like our spirits or our minds are wired. And it’s very much like, you read that book and you go like “I’m gonna go hunt!” Like “I’m gonna go and hike a mountain right now,” “I’m gonna go take down a blue whale on a ship.” I don’t know, you just feel like so fired up to go and be a man, to use kind of a cliché right? But I mean that in the good sense, like I want to go be an amazing business leader, an amazing husband, an amazing father, and that book really impacted my life a lot.

David: Well I’ll take you one step further. If you’re having a hard time being comfortable with some of the things that you just mentioned, the book helps you understand why that may be. Like that’s what I love about it, is there are areas where my confidence was lacking and I was really struggling, and this book helped me pin down exactly why that was and gave me hope that I could like build myself out of it and strengthen some of those muscles.

And I know there are people that are listening to this that heard everything Brandon and I just said, they got all pumped up and they’re like “I want it so bad” and then the next thing that came in was this thought that “You’ll never do it. You’re not gonna. You’re not smart enough.” This book helps shine light on why that might be, and gives you hope to get out of it.

And then for the women that are listening, I think you should read this because it helps you understand the heart of a man. Like when I read Captivating, kind of the woman version of it, I was like “You’re kidding me. That’s how you guys think? That is so weird. Like why would you think that way, right?” And I know that women must be looking at us the same way, like “Why is he such an idiot?” or “Why is he doing things that way?” That book really shines a lot of light on what makes men men and what makes women women.

Brandon: Yeah, in fact if you look right now, I’m looking through this glass door right next to me and my daughter Rose she is sitting on the floor, playing with her princess castle with these little like Peppa Pig toys and just the cutest little things, right? Why is she doing that yet when I was her age, I had a sword in my hand, a stick, and I was hitting everybody I could find with it. Like why are we that way?

David: You give her the same stick and she likes wraps it up in a bed and asks it to go to sleep.

Brandon: Yeah. There’s like this, the wires in our head work in a certain way, and I’m not saying that everybody’s the same or whatever, I’m just saying like there’s this general like things we fall between and this book really helps to find a lot of that. Now if you are a completely non-religious person, there are a lot of religious overtones in it, it’s a Christian book, so take that, don’t go offended. But it is fantastic. I would highly recommend it to everybody.

So, with that, hobbies. David, what have you been doing lately?

David: I just got back from visiting you in Hawaii. That was pretty cool. I’ve been trying to make more time to exercise more. This might sound corny but something I’ve been doing recently is going to movies by myself and paying attention to what in the movie moves me. So a lot of superhero movies are kind of cheesy and as a grown man I get teased by people that are like “Why are you going to watch these cartoon superhero-type movies that 11 years old like.” Well, it’s because there’s something in that movie that makes me wish I could be that person, right? Or makes me think I have that guy inside me somewhere but he’s buried underneath all these other stuff, and trying to isolate what it is about that character or that story or that person that inspired me and then looking to see like how can I do that in my life?

Obviously I’m not gonna turn into the Incredible Hulk, right? But maybe I have like a very strong power inside me that I have been pushing down and I need to let it out, whether it comes from inspiring other people, asking my boss for a raise, asking for more responsibility. We all have things in life we wish we were doing better, and sometimes those movies can shine a light and help you see for yourself what it is that you’re longing for that you are not pursuing. So even though that sounds corny, that’s actually like a hobby that I’ve been trying to be more purposeful about.

Brandon: Nice. Nice. Very cool. I’ve been doing a little bit of surfing. So I spent last winter in the island of Oahu, so Ryan Murdock and I, Ryan we talk a lot about on the show and in fact he’s gonna be one of the guests on either next week or the week after he’s one of the interviews we did. Anyway, Ryan and I jumped over to Oahu which we’re on Maui now, and spent like 14 hours to see the entire islands. We did three hikes and we ate shaved ice at Island Snow over in Kailua, and we did all sorts of cool stuff there. So that was a fun little hobby day I guess. And I got my surfboard, brought it back to the Maui, brought it home, and I got to go use it today.

David: Awesome man.

Brandon: Alright. Last question. What do you think separates successful people from those who give up, fail and never get started? In creative finance we’re gonna say, what separates successful creative finance people from those who don’t?

David: The people who succeed are the one who did what you said when you talk about the Robert Kiyosaki quote. How do I make this work? The people who fail are the one that want a path that’s already laid out and created for them, it’s very easy and they don’t have to think very much and they just fall away. The problem is when somebody makes a path that that’s simple and anyone can walk it, all the opportunity is gone because everybody went before you and they already picked up all the stuff you’re looking for, right? It’s the people that can forge a new path that have the opportunity because they can find this stuff that other people didn’t.

Brandon: There you go. I was gonna say pretty much the exact same thing. So we’ll leave it at that. So, if people want to connect with BiggerPockets, of course make sure you guys have free account. It’s totally free to sign up for an account for BiggerPockets. Go to BiggerPockets.com, and follow BiggerPockets wherever you can find it. Facebook, Twitter, Instagram, BP is all over the place.

And with that, remember next week, we are launching Josh Dorkin and my new book, How to Invest in Real Estate, and get it by going to BiggerPockets.com/store and if you pre-order, remember you get invited to a special sort of webinar Q&A with me and Josh that we’re gonna talk about real estate and kind of help you along.

So with that, I’m super excited for next week’s show. You guys are gonna love it. It’s really fantastic. It’s very unique show. Something we’ve never done before. And Josh is the host again on that show. And David is actually one of the guests. That’s all I got. David, you want to take us out?

David: That sounds like a great idea. This is David “the man” Greene for Brandon “take one step turn around and fire before he’s looking” Turner, signing off.

You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

[End of Recording]