BiggerPockets Money Podcast

BiggerPockets Money Podcast 72: Increasing Your Income Through Commissions With Dawn Brenengen

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Dawn Brenengen’s money story begins a bit differently than most. Dawn’s parents shared their finances with her. She knew what things cost, she knew her parents worked hard to pay off their mortgage, and she saw her mother writing checks to pay bills every month.

She went to college and graduated with relatively little debt—around $21,000 in student loans and credit cards combined. After graduation, she stayed at her low-paying college job until her father suggested she get a real estate license.

Dawn completed the work for the license and got a job making almost the same money, working for a builder and selling their new homes. But she was the assistant to the agents who were making the BIG BUCKS, and she knew that’s what she really wanted to be doing.

At the time, real estate agents were eligible to take the test to open up their own brokerage simultaneously with the licensing test, so she did that. While working as an assistant, she laid the groundwork to strike out on her own, eventually ramping up her income to multiple six-figures—with virtually limitless potential.

Here Dawn share her story of how hard work and determination paid off tenfold—and all in just four short years!

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Welcome to the BiggerPockets Money podcast show number 72.

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Dawn: One of probably the most positive things that happened to me was not making a lot of money in those early years because I learned and I could see what was going on around me. I learned from other people’s mistakes instead of having to go out and make my own.’

It is time for a new American dream, one that does not involve working in a cubicle for 40 years, barely scraping by. Whether you are looking to get your financial house in order, invested the money you already have or discover new paths for wealth creation, you are in the right place. This show is for anyone who has money or wants more. This is the BiggerPockets Money podcast.

Scott: How is it going everybody? I am Scott Trench. I am here with my co-host, Ms. Mindy Jensen. How are you doing today, Mindy?

Mindy: Scott, I am having a great day. How are you doing?

Scott: I am doing fantastic. I am excited to interview Dawn. She is a long time BiggerPockets contributor has a fantastic career as a real estate agent. We are going to hear all about her transition from kind of dead end career but not really because they helped prepare her to become a successful real estate agent and just kind of how she managed to build an incredible financial position on the income and wealth building fronts over the last couple of years.

Mindy: Yes. You know what I like about Dawn’s story is you know I am a frugal person on the path to, well, I have reached the end of financial dependence, but I am a frugal person who does it. She is showing us that you do not necessarily have to be frugal. You do not have to eat rice and beans and peanut butter sandwiches and spend $10,000 a year to continue to be financially independent or continue down the path to financial independence. She is more of a fat fire story and I have just really liked that.

Scott: Yes, I think it is fantastic. Should we bring her in?

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Mindy: Okay, thanks for today’s sponsor. Dawn Brenengen, welcome to the BiggerPockets Money podcast. How are you today? 

Dawn: I am doing great, Mindy. How are you?

Mindy: I am doing fantastic. I am really excited to hear about your story because not only are you going to tell us how you grew up with money, but you are also going to share with us how you increase your income, which is, on the path to financial independence you can either reduce your spending or increase your income or do a powerhouse combination of both. 

Dawn: Right.

Mindy: I really like how you increased your income because it is repeatable. It is not like you are a nuclear physicist and you went to school for 7,000 years to become this. You have a really great story and I am super excited to jump into it. Before I tell your whole story, why do not you start off with where your journey with money begins?

Dawn: Yes. I grew up in a really money, financially literate households. My parents were really good at making sure I just kind of knew the day in and day out, things to know about money, right? My mom would sit at the kitchen table and pay our bills. I knew our mortgage was $600 a month. I knew when our mortgage was paid off. They would take a car loan out to buy a car, but then immediately would start knocking down that debt. I do not think we ever had a car loan for more than six or seven months. I knew how much electricity costs, I knew what our food budget was, I shopped with my mom. She was a stay at home mom for a long time and started working when I was a little bit on the older side. My dad, he was in the army, and then he was an entrepreneur after he retired from the army.

They just kept me very involved with stuff. I helped my dad make deposits from his store and I worked in a store when I was 14 and 15 years old and for free because he would not pay me to do…

Mindy: That is why you have kids. 

Dawn: Yes, that is right. I was also an only child and quite spoiled in other ways, but he did not let me trade time for money. I think I had a big head start when I went to college. I was able to make sure my rent was paid on time, my credit card bills were paid on time, but I still did those dumb things that 20 year old do like go into debt or buy cars you do not need or go out to eat every day for lunch. I made all of those financial mistakes along the way. 

I think I just had enough financial education to know that they were mistakes and to put myself back on the right track. I worked a w2 wage job when I graduated from college and made about $27,000 a year when I graduated back in 2001. Now, we are 18 years ago and $27,000 a year was not very much back then either. I had roommates, I had people to share expenses with and stuff and so I was always able to pay my bills but just never really had a whole lot to put away for savings. Like I said, I spent my twenties having a lot of fun. I went out drinking all the time with my friends and we would go out to eat and we would go on vacations and it was definitely spending a lot more than I earned, but kind of quickly figured out like, hey, I have got to figure this out.

I think when I graduated from college, I thought that I would make a lot of money and therefore would be able to pay back all this stuff pretty easily. It did not happen that way.

Mindy: What were you doing? What did you go to school for? 

Dawn: I was a psychology major and I worked in a therapeutic foster care agency when I graduated. I managed their medical records and then I also worked one on one with some of the high risk kids in their community.

Brandon: What were  the debts that you accumulated in this time period? What are you are paying off?

Dawn: A lot of credit card debt, I probably had, by the time I graduated from college, probably had about $10,000 in credit card debt. I had a car loan and then after I graduated from college I had a little bit of a student loan too. Fortunately, I was able to work my way through most of college and my student loans were only about I think $11,000 when I graduated. But the reason I took out the student loan was not to pay or school, it was to pay for spring break. Again, bad decisions along the way.

Mindy: Well, bad decisions. I am going to give you a little bit of a pass because it sounds like you graduated college with $21,000 in debt, give or take. 

Dawn: Yes. 

Mindy: That is, I mean, that is nothing compared to some of the people that we have talked to. Although, when you are making $27,000 a year…

Dawn: That is still huge. How did you pay off your loans and when did you pay off like all of this debt?

Dawn: I kept everything. Like student loans, I just kept on the regular payments schedule because the interest rates were so cheap. Actually, I say I took out that loan for a spring break, I actually use part of it for spring break and actually invested the other part because I knew one, I would not have to pay my student loans back until after I graduated so I had a few years of being able to earn interest on the money and then I could pay it off when I graduated. 

Mindy: What did you invest in?

Dawn: At that time, my parents had a mutual fund that they had started a IRA for me when I was a kid and so I put some more money into that and the idea was it would grow a little bit and then by the time I had to pay it back, I would have some money to pay it back. Unfortunately, I just also just kept spending money along the way. Again, there is like a tag-o-war of being smart with your money and not smart with your money. I had big ideas, just not everything would always work out the way I planned on. 

Scott: That is really interesting though. Do you think that other people could apply that where, hey, I can take out a student loan and then just invest it instead of using it for education or for something?

Dawn: Sure, if you are disciplined enough to not spend the money, absolutely. 

Scott: To think I am not. 

Dawn: If they were deferred loans, right? I did not have to make any payments or pay any interest until after I graduated. Theoretically, if you could pull out loans that first year of college and let it grow for four years, obviously you are counting on being in a bull market or whatever it is you are going to we invested in needs to have a return at the end.

Mindy: Yes. Hey, invest it in real estate. No, okay.

Dawn: That is right.

Mindy: I want to a time out here and say if you choose to invest in real estate or invest your student loan money, just know that past performance is not indicative of future gains and you could lose it all. We are at the, what, 10 years into a bear market, bull market. 

Dawn: That is kind of how it worked out for me.

Mindy: Go with caution. 

Dawn: I went to school from 1997 and graduated in 2001, that was not a great market to graduate into. The .com buzz that happened shortly after that. Stock market kind of took a dive or it is just was very very flat in my years of early investing. I just felt like my 20’s were almost the last decade of not making very much money, not having great returns in anything, still kind of floating along. I am spending more money than I should but just kind of slowly increasing my income there. It was not until my 30’s that I took off. 

Mindy: How long did you work at the foster care place? 

Dawn: I worked there during college for a while, but once I graduated and started working full time, it was only a year.

Mindy: Okay. Then where did you go after that and how much were you making? 

Dawn: I realized that I was not going to make any money at the foster care agency and so I started looking into other things I could do. My dad suggested that I go get my real estate license and so I did that. Once I had my license in hand, I just started applying for every job that was real estate related and ended up getting an assistant position in a new homes subdivision. I did not even know new homes were a thing, I did not know builders. We are out there building communities. I knew nothing about nothing. I started working there and actually took a little bit of a pay cut to work there but I had the opportunity to make a little bit in bonuses as well. When you are not making very much money and you have learned all kind of live off and nothing, you can kind of take a pay cut and not really affect you all that much. 

Mindy: Was this a real estate… Like what kind of position was this? You said it was an assistant position, were you selling the new homes? Were you the agent there? 

Dawn: There were two agents that worked as partners at the model and we work for a real estate company because there was a builder team. It was a custom builder team and they hired the real estate company to go hang out at the model and sell homes for all 13 builders that were building in the neighborhood. Those two, they made awesome money. This was 2003 and I was probably there for three years or so at that particular neighborhood. The home prices range from, at the time, probably to $250,000 over a million because there was like a little lake and had some beautiful lake houses. You know we get the breakdown in commission for every house that we sell and I am doing the math to see what these other ladies are making. They are just paying me an hourly wage with a small bonus. They are making $200,000 a year. I was like, huh, I was like, ‘Okay, I am going to keep doing this and try to work up and get my own neighborhood and try to do their job in this thing. 

Scott: Would you say that that realization was the point where you kind of like got serious about making money and building your finish position or where did that kind of moment happen for you if that was not, that moment?

Dawn: Oh, it was definitely my goal. I wanted to have their job. The problem with new home communities though is that eventually they run out of lots and you have to move on to another community and some communities are better than others. Some are super popular, you sell tons of homes, and some are just small, entry level… In today’s market, they would do really well, but small entry level homes that do not sell as well, especially when you hit the recession. 2008 brought the beginning of the recession around here and nothing was selling. I had moved from that assistant position to another assistant position in a very active neighborhood where they are selling a ton of homes. My income increased there until probably depending on the year, somewhere between 45 to 60, but my goal was still to get the where I was making the bulk of the commissions and not just the assistant level of the commission.

I did eventually get my own neighborhoods, but they were not like those kinds of neighborhoods where you made a ton of money. I kind of capped out doing new home sales around $60,000 but it was a comfortable job, right? Like you do not have to chase clients, you have a neighborhood full of listings, you have a set schedule. It was an easy schedule, eleven to five every day. But you did have to work weekends. I know eleven to five is awesome especially in your 20’s and hanging out at night until 2AM, you have to roll into work until 11. It just fit my lifestyle for a while and so I did that. Then it comes the recession, right? Now we are sitting around not selling anything. I was bored, I was just used to being in active neighborhoods, were selling homes left and right and just stay busy all day long.

When the recession hit, we just had very little to do. You are stuck in your office, you cannot go do other things so you are just sitting in a sales office and nobody is coming by. I wanted to open up a property management company and I approached my broker to see if they would allow me to do that separately from the company I was already working with and they would not. I did not quit right away but I started to kind of get my decks together. I spend a lot of that time sitting onsite, not having customers coming in, and spending that time planning my exit. I was getting my LLC paperwork together and I was figuring out how it is was going to market, just coming up with a lot of different plans. When I finally pulled the trigger, I was ready to hit the ground running.

Mindy: In my state and in several other states, there is different levels of real estate agent certifications or qualifications. In Colorado, there is the real estate agent and then there is the employing broker. Does your state do that as well? Did you have to take additional coursework?

Dawn: It is called different things. It has changed since the time I got my license. When I first got my license, the test was the same, the state test was the same, for your salesperson or your broker license. I went ahead and took both classes so that when I got my license I was already a broker. The day I got my license, I could have just run out and started my own company if I wanted to. 

Mindy: Really? 

Dawn: Yes. Somewhere along the way, they decided that was a bad idea? 

Mindy: It is, no offense.

Dawn: It probably is. Now, everybody is a broker but they call them provisional brokers and then full brokers. If you get your license, you are provisional broker, you have three years to take another 90 hours of coursework over those three years. You can do it all the first year if you want to. Then there is also an unemployment requirement that you have to, I think, work two years full time, do not hold me to that, under somebody else before you can go hang your own shingle. Then there is just a broker in charge class is what we call it. Once you take that broker in charge class, then you can qualify to be an employing broker.

Mindy: Okay. You did it a little differently because they used to do that differently. The rules have changed and frankly I liked the rules better.

Dawn: Sure.

Mindy: In Colorado, when I got my license, I could have waited two years, sold zero houses, done zero work, and then taking the coursework and pass the test to become a employing broker which I have never felt qualified to do so I have not done. Just recently they changed that. Now, you actually have to have done a set number of deals and been in the business for a while and all of that which I think is better because you are helping somebody buy the most expensive purchase they are ever going to make. You should probably know a little bit. 

Dawn: Yes, you should know what you are doing. 

Mindy: Yes. If you are like leading people who are doing this, you should be an expert.

Dawn: Yes. 

Mindy: But you have had your license since, what, 2002 or 2003?

Dawn: Yes, I got it right at the end of 2002 and started working in 2003I did not start my own company until 2010 and that is when I became a broker in charge. 

Mindy: Okay, you opened up your own business and then all of a sudden you are a millionaire.

Dawn: Not really all of a sudden, I actually took the time to go through all of my tax records. I am the kind of person who keeps everything right. I am going from my tax records back when I graduated from college to what they were. I did not do my 2018 taxes yet, but 2017, just to kind of see like how it ramped up. Yes, 2010 was a lean year. I had just gotten started and I have spending more time trying to get the business going. Then I was actually out there doing stuff. I was really scared when I started it because I did not know if anyone would ever hire me. I felt unqualified. I think I had just had a big case of imposter syndrome going on but I started to get clients. I remember the very first time my cell phone rang that I had bought separately as a business line.

I hear this like ringing sound in my house. I was like, what is that? It is not my regular phone. I was like, what is that sound? I realized, oh my gosh, it is my work number. ‘Hello. Trailwood Realty, how can I help you?’ I was so excited to get that first phone call and it is funny because I remember that phone call and she is actually still a client of mine now. I do not know if she knows that she was my first. But when I started my business attack in that first year, I only made $16,000. But by my fourth year, I was making six figures. I had made about $125,00. Four years after that, I was able to ramp it up into six figure salary. I know 2017 I had hit about $200,000. Last year, I have not done my taxes yet but I did figured out all my income and stuff. 

I did take on a business partner last year, beginning of last year, which I think has helped increase the business because now we have two people out there and we can kind of focus on things instead of me trying to do everything by myself. I was able to increase my income last year up to about $300,000. 2019 should be about the same, if not, maybe a little bit better hopefully. I did all that in my 30’s. In 20’s, I spent being broke and having a good time, 39 years old now. When I started that business in 2010, I was 30 years old. Part of why I felt I was able to take the leap at that time, I had also gotten married. My husband has a stable W2 job with health insurance and stocks. I felt a little bit more grounded and able to take a little bit of risk because he was there to catch me if I fell.

But fortunately, that did not happen and he has had some income increases along the way. Obviously, mine has ramped up a lot in the last five years and now we are kind of sitting on a net worth of about… It is about $1.2M. If we wanted to retire today, theoretically, we probably could do it. I personally know how I like to also spend money, so I am not ready to retire until I am like flat FI. I want to go flat FI before I do so now I have to like think about the money that I am spending. 

Mindy: Did you enjoy being a real estate agent? I really liked it. It definitely has some trials and tribulations sometimes, but I love that. No two days are the same. We are out there all over town. I am meeting people all the time. I am having conversations with people all the time and I liked that I just get to meet new people and I started working with a lot of investors. It is kind of cool to like watch them grow their net worth and to grow their portfolios and stuff. It is very cool to be able to help people kind of achieve those same goals.

Scott: Sorry, going back to that kind of beginning stage of building your business, right? Like imagine that some of our listeners are out there and they are thinking, ‘Hey, I do not mind my job but it is not got that great prospects. I want to kind of go out and do something like this. Become an agent and build a brokerage business.’ Like if you go and went back and looked at those couple of years, what did you need to have prepared? It sounds like low expenses, it sounds like the stable job from your husband was helpful in that with the health care. But what kind of personal like business outline do you have to have? What would be a reasonable expectations for new agents starting out?

Dawn: Yes, I went and tried to learn as much as I could before I started my own business. I did not have any money really to go out and pay people to figure these things out for me. I had to figure out the legal stuff. I had to create my own LLC and I had to build my own website. I literally learned how to build a website and I am not a… I went back and looked at my website a few years after that, I kind of built it and then just forgot about it and went back and looked at it five years later and I was like it looks like a child who built this website. I did not have a CPA in the beginning so I made some financial mistakes trying to figure out the best way to do my taxes and record things and stuff.

I kind of just really bootstrap stuff in the beginning to keep my expenses low. Some of that stuff I probably should have paid to get the professional help from the beginning. That is definitely, I think a mistake that I made. It was not finding the money to pay a CPA and make sure everything is done correctly from the beginning. Because to pay somebody to come back and fix everything that you messed up is way more expensive than having them just do it from the beginning. Fortunately, the LLC paperwork and all that stuff was fine, I was able to do that on my own. But if you have any questions about that type of thing, you do not want to mess it up. Hire the right people that you need. 

Mindy: Besides the CPA, who else would you recommend people hire out from the start? Because I think the CPA and hiring somebody to do your taxes, oh I have got turbo tax, it is so easy. Well, yes, if you work a W2 job and you have no extra anything and it is just a straight boring tax return, sure, you should probably do a turbo tax. Or if you do not feel comfortable, go to h&r block or whatever, but once you start adding these weird things, these special little things, you have your own business, there is a lot of things that you can write off, but you can only write it off if you know what you are doing. If you know that these are write off able expenses. Who else would you recommend to hire out? 

Dawn: Yes, the CPA was definitely the big one. Once I got in good with a good CPA and a bookkeeper, actually now I have both and they are two different people, I changed the business from an LLC to subchapter S corporation and kind of figured out some tax strategies to make things a little bit better along the way. That is not stuff I would have ever figured out on my own. 

We hired a lawyer to create the partnership agreement so we spent probably I think $3,000 for them to come up with a good operating agreements so that my business partner and I knew exactly how we were going to run this business from this point on. What happens if somebody wants to leave the business? What happens if one of us dies? What happens… We really want to make sure we covered every base that we had. It was good to hire a lawyer to come in and do that. It is like you could do stuff of illegal but that seems like a bad idea unless you already know what you are doing.

Scott: If you are starting this business tomorrow from scratch, pretend you do not know anything about this, but how much would you say what would be needed from money and time commitment just to get the t’s crossed and i’s dotted from a legal accounting, all that kind of stuff perspective?

Dawn: Well, one nice thing about real estate is that it is such a low overhead business if you want it to be. You do not have to go out and rent office space and create like a big brokerage. You can work from home. Half the time you are out in the community anyways. You do not really meet clients very often in an office. It just does not take very much money but the requirements are going to be different in different states because filing paperwork is going to be different fees. Being a broker costs a little bit differently here versus if you are just working under somebody brokerage. You need to get proper insurance, errors and omissions insurance. Since I also do property management, I have a liability insurance. I would say probably a good $5,000 budget to just get some of those things off the ground would be reasonable but you do not really need too much. I mean you do not have to get a brand new website done, you do not have to get the fanciest business cards. Some of that stuff is just a fluff and not necessary but good to have along the way for marketing.

Scott: Then the challenge here, these are definitely hurdles you have to overcome to get started, but the challenge I think is going to be in the production of revenue. Generating clients, generating business, all that kind of stuff. What did that journey look like for you in those first couple of years? How did you… Can you talk about the first call? How did you get more and scale? 

Mindy: How did you get that first call?

Dawn: Right. That is typically where I see people fail when they get their real estate license and not just open your own brokerage. But people go through the classes, they get their real estate license and I am not sure exactly what they imagine it to be but you go out there and you work for a broker and you are kind of thrown into the mix, right? I think that they think that brokers are going to give you leads or there is some salary or there is some handholding that comes along the way. 99% of the time, it is just not like that. You have to go out there and hunt your own food. You have to build a big network. I am in every moms group, I am in every neighborhood gathering, I am at every BiggerPockets meetup, I am everywhere.

We are on Facebook, I have got past clients and everyone has used me before but a lot of them are friends of mine. Further in a mom’s group and somebody is looking for an agent, they are in there tagging me and saying called on. Your name comes up over and over and over again. People start to recognize it. Same thing with BiggerPockets. BiggerPockets has been wonderful lead source for me to get in with investors and now I am getting calls regularly because of people in the forums. I am posting all the time and people will write me and say, ‘Hey, I saw something you wrote four years ago and I really liked it and wanted to ask you some questions about Raleigh.’ You never know where that business is going to come from but just kind of going out there and making sure you are in the places that people are looking.

If you want to work with investors, you should be on BiggerPockets. If you want to work with retail buyers, maybe you should be on Facebook. You should definitely be in your own neighborhood and your community, getting to know other local businesses. Getting good with a lender. My lender gives me leads, they have a good website. If he gets leads for his website, he sends them to me because he knows I am sending him all of my business. You have got to make sure like you have got some good relationships built with other people and that stuff does take time to ramp up. I think what people think is that they are just going to go out there and start working.

Your first year you might only have three or four clients, you might have no clients. You have got to figure out a way to whether that as you get your name out there. If you are new to an area, it is hard. You do not have a big sphere of influence of people to trust you. If you have been a stay at home mom for the last 15 years, it is hard to get your license and then have people see you differently than how they have always seen you. You have got to go out there and put a very like professional face on and if that is not who you have been for the last 15 years, it is hard to watch your friends or your family choose a different agent because they do not see you in that role. You got to have a thick skin to make sure that if somebody does not use you, you are okay, you have got the next person.

Mindy: Yes. All of that is super super important and I cannot agree enough with what you are saying because it is not that hard to become an agent. The coursework, the tests, especially if you are good at taking tests. Like I do not think that the coursework really taught me anything about real estate in general, how to sell, how to work with clients, any of that. It taught me how to measure a house when there is a rock over there and a tree over there and like a lot and block system. Every agent listening is like, ‘Yes, yes, yes.’ Everybody else is like I do not understand that.’ Do not worry, once you go through the coursework, you will know it too. But yes, it does not teach you anything about that and I think people see this giant commission that the real estate agents are getting when they buy or sell a house and they are like, ‘Oh, I could do that.’ Well, it is a lot more than that and it is not just you become an agent and all of a sudden it is like, wow, I did not know an agent before. Yes, everybody you know is an agent.

Dawn: Yes, for sure. Like in my social circle, there is probably 10 different real estate agents that my friends could choose to use, you know? I have got to make sure that I am always out there looking like the most successful, the busiest, the one who is out there making stuff happen all the time because yes, people absolutely choose somebody else. Sometimes you are just in the right place at the right time or in the wrong place at the wrong time and somebody buys a house with somebody else and you are like, ‘Oh, I did not know you are looking,’ or ‘Hey, I called you and you did not answer your phone so I just called the listing agent,’ and therefore they bought a house and you are like, wait, what just happened? It happens. You have got to be able to like not see those things as  super detrimental and just be able to move on and go on to your next client. Trying to build up that client base is absolutely the hardest part about real estate but if you have got a good social circle, that you can go out there and be a professional, it will happen. 

Scott: To give you kind of a, to give the listeners, a scope of just what this looks like cumulatively over the years, right? I mean Dawn has posted to BiggerPockets 2.1 thousand times over the course of how many years you have been on BiggerPockets?

Dawn: A few years, let us see. I mean I would probably say three or four years. I do not know, time has a tendency to fly.

Scott: Actually, it looks like it is 2014. 2000 times over the course of five years and that is just the posting on BiggerPockets. That is not all the events that you… She just  mentioned that she has attended and the always on it sounds like and receiving these calls and recognizing, ‘Hey, got to respond immediately or going to lose business. This person is going to move on to the next agent, right? That is just one component of your business is that those posts on BiggerPockets and adding value relentlessly to discussions in your area. That is the scope of activity, it looks like, that is needed to develop into this $300,000 a year real estate agent. That, by the way, give more context. That means you are selling about $10 million or more in real estate annually, right?

Mindy: Now, this all sounds like a lot of work. Oh wow, you have to post 2000 times on BiggerPockets. You do not have to, but I know that when I need somebody in Raleigh, I see something… Because I am in the forums all the time. That is my job outside of the podcast is to be in the forums and help people out and answer questions and I somebody saying, ‘Hey, I am thinking about investing in this area or Raleigh. Does anybody know about them?’ I know to tag Dawn Brenengen, ‘Hey, you should reach out to Dawn Brenengen, she knows the Raleigh market.’ Or when I see people send me emails all the time, ‘Hey, do you know anybody? I am looking for an agent here.’ Check out Dawn, she can help you out. She knows the area. You know she has been there forever. I know this because I see you in there. Now, all that said, how much time do you spend working in your real estate business now? Let us say on an average week or month?

Dawn: Well, now that I have a business partner, I actually worked a lot less than I was previously. I mean it was a grind. I am not going to lie, I am not going to say that ramping up your income like that is a breeze. You do have to work hard. When I first started my business and I was not making much at all, I mean from the time I woke up to the time I fell asleep, I was on my computer, I was marketing, I was just trying to just come up with new ideas of how I was going to run my business or how it is going to earn clients. I think I just kind of worked all the time at the beginning.

Now, I have been able to dial it back a little bit. Theresa, my business partner, she handles a lot more of the property management stuff now so she can kind of take on the day to day operations of that. Before she came on, I was managing about 100 properties on my own and I was selling about, at that time, probably 40 to 45 homes a year. I brought Theresa on. Last year, I was able to sell 57 homes and then she sold a handful of homes too and she is doing the property management so and we are able… I think the two of us combined just had an exponential force on what we were able to do together. 

Mindy: I do not know how you do that. I have got two deals going right now and the mortgage guy called me up this morning and I am like, ‘Ah, wait. What property is this?’

Dawn: Well, you also have another full time job at BiggerPockets. You have got kids like there is always all these balls in the area and I liked that. Like I am a busy person because I would like to be at this person and if I sit around for too long, I think I start to grow roots and I do not get up. I like to just keep it moving. But I like that. Every day, I can go pick up my kids from school. Three o’clock, I tell all my clients I have an appointment, I am sorry I cannot make it. We will have to do that showing a different time but I go and I pick up my kids. Then my husband does not come home from work until maybe 5:30 or 6 o’clock or so. If I need to show a home in the evening, he can cover the kids at that point.

But usually from like three to that time, it is me and the kids, we are hanging out. We are on the front porch playing outside and I just love that time. That is not always something I could do before I had my business partner. Before, I had to always be on my computer. Okay, kids, you play outside but I am to answer all these emails here, type, type, type. Having her, we also now have an assistant that we, whose licensed and he is full time with us. Having his help means that if an investment property hit the market that I think looks good, I can send him to go see it, take a video of it. I have taught him how to walk there and what to look for and then I will pull comps and stuff and send that to my clients. We are just being able to like leverage other people’s time at this point. But again, that is something you build up to.

Mindy: Right. I had a conversation with the Cody Berman from episodes, something on our show. I saw him this weekend and he was telling me about his company and now that he has got it up and running, it is running much smoother. But in the beginning, he was putting in all this time and now he is putting in 10 hours a week and still making full time money which is just amazing. Cody was in episode 26 of the money show.

Dawn: Yes, I am a big fan of the 4-Hour Work Week concept. I love the idea of leveraging out as much as you possibly can so you can have your time back because that is the one thing we do not have, we cannot make more of.

Scott: Yes. But it sounds like the price of this outcome right is those years and years of 80 hour plus logs that you are going through optimizing every front, just working, figuring it out, experimenting, all that kind of stuff. Is that right?

Dawn: You say years and years but it was really only about three or four years of really having to put in the energy to getting going and then I had a couple of years it was going and now I am just trying to keep all the balls in there. But that is when I started looking into getting an assistant. Now that I am ever able to leverage other people’s time, can I kind of coast a little bit more which is nice. I mean I am 39 years old. I think I have got a pretty good work life balance at this point. My kids are only in first grade so they have got 11 more years of school left. I doubt that I am going to go anywhere between now and then so I have all this time that I can work the way I work now and be happy. Then by the time they graduate from college, my husband will also be eligible for his pension at that point. Well, it is always here as soon as the kids graduate.

Scott: How are you applying all of this money that you are making in terms of your wealth building philosophy? You are buying real estate but how what is your kind of investment approach to back into that outcome you just described 11 years down the road?

Dawn: We have got a few things going. I do invest in rental properties. I have got five right now. They probably cashflow… They do not cash flow a lot. The Raleigh market is not a high cash flow market. but when these homes are paid off, they will be bringing in, in today’s dollars, about $8,000 worth of rent. Obviously, some of that would go to expenses, but I would say 60% of that I could live off of once everything is paid off. They are in various stages of being paid down. I invest everything I can into any tax deferred account. Before the S corporation, I was able to invest in SEPRA, I did that. I got the Roth now because of the income limitations where you are having to do the backdoor Roth. My husband has a 43B at work, he has got a pension. Basically, any kind of tax advantage account that we can put money into, we do. We have got the real estate and then I have also gotten into doing a little bit of private lending. There is a couple of flippers in our area that I lend money to.

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Dawn: When you are thinking about… When you are kind of describing this investment philosophy, let us back into like those early years. You start your business, you have some debt, right? What is your kind of approach look like in those first couple of years of your business formation in terms of how you are applying any surplus money?

Dawn: I was able to actually pay off the most of the debt before I ever started my own business. Combining mine and my husband’s income I think kind of gave me enough breathing room that I was able to pay off what little debt I had back then. The student loans we can just kept on track because the low interest rate but we knocked out the car. When I would say good thing about not making a lot of money as an assistant in the hayday of real estate before 2008, was that I made just enough money to pay off my debt. I did not make enough money to run out and go get a brand new house and a Mercedes or anything because I watched a lot of people do that. You are making $200,000 a year and you inflate your lifestyle to accommodate that while, 2008 nine coms and now you are making $40,000 a year.

Like that is a big cut. I was just making enough to aggressively pay off debt. I bought my first house back in 2003 and I did that with like no money down at all because banks would still do that at that point. To start at just sucking money away in little increments once the debt was paid off. I lived fairly frugally, frugal for my standards versus when I was in my 20’s. My husband was pretty good about listening to me when I said, hey, we cannot spend money. Like this is why I had the spreadsheet’s going, I had the payoffs here and the spending tracker is here. I just kind of kept track of everything that was coming in and out which is good because you could see the debt number is getting smaller and you can see the bank account getting bigger and that is super motivating.

Scott: Yes, I love it. I think this is all fantastic. It is fantastic. It sounds like you kind of approached this zero net worth position around the time you are starting your business or a little bit beforehand. Is that accurate or am I?

Dawn: I think I was definitely a zero net worth when, probably not a zero net worth, that is not true because I had a couple of houses when I started my business. 

Scott: Oh, you did. 

Dawn: You did, okay. 

Dawn: Yes, I had bought my first property in 2003 and I lived in that one and then I turned it into a rental property in 2006. Then I helped my parents buy two properties in 2004 that I eventually bought from them. I had a handful at that point and that is actually why I decided to get into property made instrument is because the sales market was so flat and nothing was selling. I figured why do not I just say to two properties for other people, it is gone well for myself and so that is why I went in that direction. I ended up helping a bunch of accidental landlords at that point. That is how I grew the business in the beginning on the property management side.

Scott: Okay. Let us take a moment on that first house then. Was that an important component of your wealth building overall approach or was that relatively minor in the scheme of things relative to your other investment approaches and income generation?

Dawn: I would say it helps on two fronts, right? You build equity in this house and then you are also not paying rent to somebody else, right? My first house, like literally I paid nothing to get into the property. 2003 was a great year for me. I will just do whatever when it came to getting your mortgage. I had a first and second loan on an 80-20 and I paid $1,000 from my refrigerator because it was new construction and it did not come with a fridge and that was all it took for me to get into that house. But what I did was I got a couple of roommates, it was a three bedroom town home and I rented out to the rooms and I virtually lived for free in the other one. I was not paying rent somewhere else. I had roommates during my mortgage, I was building the equity, and prices did go up after the recession. I think I paid $134, now it is worth maybe about $180 but that one is probably done by the worst out of everything that I have owned. But because I put no money in it, somebody else is paying my mortgage for me. I will take the $380 when it is done.

Scott: No or very low risk, huge leverage. Where have we heard this story before on… 

Mindy: Wait, wait, wait, wait. 

Scott: Welcoming journeys of entrepreneurs and people who are financially free at very early in life. 

Mindy: This sounds like she is talking about house hacking but Brandon did not invent that term until 2015 so I do not know what this is.

Dawn: Yes. Then I moved out of that house and capped it as a rental property and because I had bought it as an owner occupant, I had those wonderful financing terms. I moved out of that one and bought another house not too far away, but a single family house, and brought my roommates with me. They helped me pay down the second mortgage. I refinanced that one right before I moved out to shorten the loan term for that. Just for that, it would be paid off by the time my kids graduated from high school. I was trying to stagger some properties to be paid off at certain times so I should have two paid off by the time they graduate from high school and then I can start paying down the others should I want to but they are all 4% or less so I am really in no hurry.

Scott: Fantastic. Are your rents covering all the mortgage payments?

Dawn: Yes.

Mindy: Plus them? 

Mindy: Okay. 

Dawn: Yes. They do cashflow. Of course I am doing my own property management, but I would say between the five of them, I am probably cashflowing… I mean it does not work out to be a ton, maybe $12,000 a year or so. 

Mindy: But still, over five properties. That includes the mortgage pay down and I am assuming that you know how to calculate for expenses and CapEx and all of those other things that some people may forget to account for.

Dawn: But what I will say is that, yes, they are only cash flowing that much, but I mean the appreciation in those has been awesome. I do not think it is Denver level appreciation, but it is definitely awesome for our area. My plan is to just keep these properties until I die and then my kids can sell them and they will enjoy a wonderful stepped up basis and not have to pay any taxes and they can sell it and go live on an island somewhere. 

Scott: Your overall plan here, it sounds like, at least one component of this is to pay off the mortgages on these properties over the next 10 years, 11 years, I think you said. Is that the bulk of your approach? Is that how you are applying all of the excess surplus in your life or…

Dawn: No, I do not prepay any of those mortgages. I kind of regret getting a 15 year loan and a 20 year loan on two of them that I did just because it creates a little bit more of a debt to income ratio problem if you are trying to get additional mortgages. It has not been an issue so it is fine. But if I really wanted to ramp up on that, it could create an issue. If your interest rate is 4%, I mean there is literally just no reason to pay that off. On a rental property, that is going against your income. Of course that is money you do not pay taxes on, you get to account for depreciation. Tax wise, it is wonderful benefit for me to have these rental properties and if my kids can inherit them and not pay any taxes on them with that wonderful loophole, that is just awesome.

Scott: What are you doing with the surplus cash then? Are you buying more rentals? 

Dawn: I started doing some private lending. I have not find a great deal for a rental property that I have wanted to buy partly because I have so many investors that I am working with that I have to find stuff for them. It is kind of the shoemaker has no shoes sometimes. I am spending so much time helping other people find stuff, I do not have a whole lot of time to find my own. But I had a couple of flippers in my market approach me and did small amounts. There is one who I have got like 50 out to and another one I have got 40 out too. I kind of just tested the waters with that a bit. But it is 12% interest so it is like better than what most things would return and fairly low risk as compared to stock market.

Mindy: Okay. I want to unpack this a little bit right now. Private lending is when you are acting as the bank. How did you meet these flippers? You said it is relatively low risk. Do you have a first position lien on the property? There is like a thousand question to throw at you. Because I have done a little bit of private lending as well and I lent more to the person than the deal. I know the person is not going to default. If they do, then I have an amazing property. I just do not want to own that amazing property, I would rather have the money back. 

Dawn: Sure. 

Mindy: You are lending out at 12% interest and the going rate is like four and a half or five-ish at the time of this recording. How did you find these people and how is it low risk to you?

Dawn: One, it is in my market so I know these areas, right? I know these houses, I know the people. I actually did meet both of them, probably through BiggerPockets. One of them was a client of mine who bought a property and he flipped it and he was new at the time, but he did well on it. He had taken on a partner for that. He did well on it and then he just decided to just quit his job. He had a nice w2 job and just said, ‘Forget it, I am going all in on real estate. He started flipping full time. I lent some money to him to kind of keep a couple of projects going. I have a second position lien on two properties for that money. It is not based on an individual project right now. He just borrows it for six months at a time. I have got a second position Lien on two of his longterm rentals that he is holding.

The first position loan is well under what he gets all the property for. If we had to foreclose on that, there should be enough to pay off both first and second positions on those properties. Then the other one that I lent for to actually just got the check back today. He closed on it on Friday and I got a check today. It was funny because it came like Fedex and opened the envelope. It is from an attorney and I was like, ‘Oh gosh, what did I get today?’ It was a check. I was like, oh, thank God. 

Scott: Yes.

Dawn: Sometimes those very important looking envelopes can be scary. 

Scott: A lot of times I have noticed talking to investors that they will do this kind of lending inside of an IRA. Are you doing that or is this with after tax dollars?

Dawn: This is with after tax dollars. I am interested in learning more about that though. Yes, I have got probably just now enough in any one individual account to be worthwhile to lend out to somebody else. But because I do like to diversify all of those tax advantage accounts are mostly in VTSAX, very simple. I do not know enough about the stock market really to do anything different.

Scott: No, makes perfect sense. The advantage to doing it with a IRA is that you do not have to pay income tax on a couple of interests, always at a high tax rates, but awesome. Anything else besides the private lending or is that kind of your major approach with your surplus right now?

Dawn: I am looking for a good flip property in our area to do myself. I have run quite a few renovations for clients who needed to renovate their rental properties or I have helped somebody buy something that needs a lot of work and to get it rent ready. I have got plenty of experience in rehabbing homes but I have not found a good project for myself yet. I have been making a lot of offers, but nothing has come to fruition yet. I have actually got a pretty good cash position right now just waiting for a good deal to get into.

Scott: Awesome. 

Mindy: The flips are my favorite. I really love walking into a house being like this is so gross, I cannot wait to make this pretty.

Dawn: I like that same thing. 

Mindy: Yes, yes. I think you are coming at it from a position of extreme advantage because you have run these properties or you have run these projects for other people. You know, ‘Oh, this is the carpeting guy who never shows up on time, I am not going to use him.’ ‘This is the electrician who shows up early and is always on time and on budget,’ that is a huge advantage for you.

Dawn: Oh, yes. I have great sub-contractors that I can use just from the years of having the property management business. I vetted quite a few people. Yes, I have got some great subs to work with. It really is just a matter of finding a deal that makes sense. It is a very competitive market here so a lot of these are going for over, or I can see anyone making any money. 

Mindy: Yes, I do not understand how some of these houses are being purchased right now but that is a different story. Okay, is there anything else you want to talk about in increasing your income? Because this… I mean, I do not know how to say this without making it sound like I am belittling what you did but there is not a huge knowledge investment into becoming a real estate agent to actually getting your license. There is a huge knowledge investment into becoming a successful agent, but to actually get your license is really just not that hard. It is not that much work. You are not going to school for four years to get a real estate license in Colorado, which is one of the strictest. It is 168 hours, that is like four weeks of rather leisurely time. I did a big research project on this. In some states, it is like 40 hours. There is not a huge time commitment. You said maybe $5,000 for the first year, there is not a huge money commitment and you turned $5,000 into $300,000 last year, I do would that.

Dawn: Yes, yes. I will take that all day. I mean, it is not huge… There is a very low barrier to entry and I was thinking the other day and I was picturing all the people who live on my block. My block of homes probably goes for about $400,000 to $450,000 if you were to sell the house here. Good incomes but not great for a lot of people here. Most of the people bought them in the low to mid 300. Everybody on my block is in some sort of sales position. I mean there is a handful of accountants and teachers and stuff like that but for the most part, at least one member of the household is in some form of sales. I have realized, like I really think to be able to increase your income, there has to not be a ceiling on it. If you are a teacher, there is a ceiling on how much you are going to make and somebody else is going to dictate how much that is. But if you are an entrepreneur or if you are in sales where you get commissions and bonuses or whatever the case may be, there is no ceiling on that and I think that those are the types of jobs that people should go out there and try to get if you really want to ramp it up.

Mindy: To be able to increase your income, there has to not be a ceiling. That is like brilliant and sales, there really is no ceiling. I think you should be… To be a great real estate agent, I think you should be knowledgeable about how a house works, how a mortgage works, how the area in general. But you do not have to know a lot to be a really successful real estate agent. Please do not think that I am talking smack about real estate agents, I am an agent too. I see some really great agents out there who just have a really good knowledge of their local market. They do not know how a house works and that is okay too. But sales is wonderful. Obviously, I am partial to real estate, but like real estate is just not that hard and there is so much income that could be made. Like you pointed out, you did the work upfront. 

Dawn: Yes. 

Mindy: You busted your butt, you did all of this in the beginning and then once you get the ball rolling, it is like a snowball down a hill.

Dawn: Absolutely.

Mindy: Once you get it rolling, you cannot even stop it. People just call you all the time. ‘Hey, Dawn. Can you help me buy a house?’

Dawn: Yes, absolutely, yes. Once the ball gets rolling, it is I will not say easy but it is relatively easy to get the clients. At that point, it is just managing your time and making sure everything is serviced properly. That is the hard part for somebody to get started just to get to that point. But once you get to that point, it is awesome. It is very easy I think to kind of keep all that momentum going. After you do a bunch of deals, you are going to have the process down, you are going to know what the pitfalls are and how to guide your clients and stuff. I think for people who are just starting out, it is maybe a good idea to be somebody’s assistant or to work on a team where you have a little bit more support because if you are just kind of thrown out there and said, ‘Alright, go make it happen,’ with no support, I think a lot of people cannot do that. Some people can, but a lot of people cannot. Sales in general and yes, I am partial also to real estate, but I know pretty wealthy insurance sales people or software sales or pharmaceutical sales and they just have like as I said, no ceiling on their income, as hard as they are willing to work

Mindy: Oh, right there. As hard as they are willing to work, it does not just come to you. You did not just hang out your shingle and be like, okay, come on, where is my business?

Scott: Yes. I will also point out that I see a correlation here between your life choices and how you are spending just as a household can impact your ability to go after that because if there is no ceiling, there is also no floor. A lot of these gigs that can have these unlimited business, unlimited potential or high income. The fact that you guys had a household budget, you talked about spreadsheets, you touched on that very lightly, but you were able to keep your household running even on $16,000 just from your income down from what sounded like 60 a few years prior on that. That is a set of life choices that most of middle class America do not make, right? In terms of running their household on one income. You could go into that, into this new role and now that has led to a path in less than a decade where your household income is likely to be close to, if not above, the top 1% for all of America. 

Dawn: Yes. 

Scott: Right. That is the difference I think that comes in there that allowed you to propel towards that. Or at least that was one important factor I think.

Dawn: Yes, you are right. It was not just financial independence through the income side of it which is obviously probably where I was able to do the best job. But in those early years, you should have seen me Sunday mornings I was running around getting newspapers. I could grab all the coupons out and then I am on the coupon blogs figuring out like what are the sales for the weekend? I had my grocery budget down to $250 a month and I was very regimented about a lot of things and saving money was, like I said, as frivolous as I was in certain areas in my twenties when I wanted to dial it in and take care of stuff like I really did.

Scott: Yes. I mean if you had not house hacked, right? Instead if you had… You had both been making $60,000, you and your husband, right? You are spending $111,000, right? With the house and the two new cars and all that kind of stuff, this would not have been conceivable and you would be listening to the show right now thinking this person is full of it. That is not even a potential outcome for me and my family because we have got bills to pay with these things, right? That is the difference, I think that this whole world of opportunity was available to you in part, in one small part, because of your discipline on the other side of the equation.

Dawn: Yes. I mean the big trick is like do not spend more than you make. 

Scott: Yes.

Dawn: It really is just math problem.

Mindy: Aim for a lot less. What is your annual spending? Do you know-ish?

Dawn: Yes. It is probably around $100,000 a year between…

Mindy: Okay. But you are making 300? 

Dawn: Yes. I would not even say… I mean some of that I think is also going into like a Roth IRAs and things like that. It is maybe a little bit less than that. We know our mortgage is reasonable. It is $1,700 a month, which to me when I was 20, I thought that was insane. I was like I thought if you could commit to $1,700 a month, man, you better be like the doctor or some dentist. Now, like I am here, it is very comfortable. I am able to save money and is very relative to what you make of course. 

Mindy: Well, but you are also making like doctor level salaries.

Dawn: Today. But the thing about real estate is that all of that could poof in an instant, go away if we hit another recession. 

Mindy: That is true, that is true.

Dawn: I had to be very careful about what I spend and make sure we save that money. Again, when that last recession hit, my co-workers were making in the $200,000 to $250,000 range per year. They were doing awesome but they were spending that money just as fast as they could make it. When that recession hit, I mean their income may be dropped to $40,000, maybe $60,000 a year, which is reasonable for most people to live off of but when you are used to making $200,000 and now you have got that $2,000 a month house payment and you have got that $600 a month car payment, like you are not making enough to live that same lifestyle that you used to be accustomed to.

Just making sure you do not get accustomed to the two finer things in life I think is the because, yes, $300,000 I could afford to do a lot of things but I do not because I want to make sure that if my income drops to $100,000 next year, that it is fine. Or if it drops to $50,000 or if I do not make anything. If I lose my license for some crazy reason, worst case scenarios of what could possibly happen to you, I want to make sure being broke is not going to be the ultimate outcome.

Mindy: Yes, and I am glad you make that point. I said you are making doctor level salaries. You are like, well it could go away. Yes, it could and I hope it does not. But right now you are making $300,000 and spending $100,000. You are saving 66% of your income.

Scott: Plus your husband’s income. 

Mindy: We are not even talking about him, he is not on the show. This is the Dawn. 66% of your income you are saving, you are not spending and you know IRAs and all that other stuff, at least 66%. If that 66% went away, your life does not change. If 70% went away, your life is not going to be a huge difference than what it is right now. I think that that kind of, well, I am making 300 so I should be able to have fun with it. Well, yes, that is great, but that is not guaranteed. That is an anybody’s. My salary is a guaranteed because BiggerPockets is not going to go out of business tomorrow. But what if we did? Like what if all of a sudden we decided we do not want to be here anymore. Sorry, Mindy. Thanks. Then my income is not guaranteed. Having a cushion is so important because even with a regular w2 job, your income is not guaranteed.

Dawn: Yes. I actually think probably the most positive things that happened to me was not making a lot of money in those early years because I learned and I could see what was going on around me and I learned from other people’s mistakes instead of having to go out and make my own. Because I was kind of right there at that cusp. Like I had gotten my debts paid down, my car was paid off, student loans get paid off, everything gets paid off. Now, you are starting to feel wealthier. You are starting to feel like, ‘Oh, I can go out to eat today. No big deal.’ I think once that happens is when that lifestyle inflation starts to happen.

Mindy: Yes, well then I had a very positive 20’s too with that no income.

Dawn: You learn from those hardships. 

Mindy: Yes, you do. Okay. Should we go onto the Famous Four now? 

Scott: Let us do it. 

Mindy: Okay. These are the same four questions and one command that we ask of all of our guests. Dawn, are you ready? 

Dawn: Yes. 

Mindy: What is your favorite finance book?

Dawn: I would say Secrets of the Millionaire Mind. I liked it because it was very… It is about changing like your view on things. Basically if you view yourself as a poor person, you will be a poor person. If you view yourself as a millionaire, you will act like one. It was really about changing like your mindset on how you truly see yourself. If you find you are just somebody who is never going to get ahead because the world is out to get you, then that is what is going to happen. I think it was a good like mind shift book. 

Scott: Awesome, I will have to check that out. I do not think I have read that one.

Dawn: It is a good one. 

Scott: Alright, what was your biggest money mistake? 

Dawn: I would say buying cars that I did not need to buy. I have probably had five cars since I was 16 which at this point is not terrible because I am 39 now. That is, what, 23 years of driving five cars. Does not sound awful. Well, the first four of them were within like the first 10 years. Well, I guess I have had six cars then. I got rid of perfectly good working cars because I just did not like them anymore or I got into real estate. I had a Ford Explorer when I got into real estate. Because it was a two door car, I decided I should get rid of it and get a four door car to make it more comfortable for my clients except for I did not drive clients around so it just really did not make any sense to do that. I was selling new homes, that made no sense at all. ]I definitely could have made due with what I had for sure. Additional debt and making big car payments, not a good idea.

Scott: How much did you think that might have set you back? 

Dawn: My mom actually helped me out a few times along the way. If it were not for her, I would probably be a lot more setback. But I probably spent at least $20,000 on one car that I just absolutely did not need. Yes, usually $20,000 compounded over the last 20 years. Does that work out to you, Scott? 

Mindy: Couple of bucks. Yes, Scott. Do that math right in your head. What kind of car do you drive now? Related question because you are a real estate agent.

Dawn: I am a real estate agent so I drive to super fancy Honda Odyssey minivan. I generally do not have clients in my car. We are meeting people at places and stuff. If somebody really wants to get my car, they can. But I warn people it is sticky. I got kids, they are seven, they are kind of gross, that is what I drive. I do not look like a very successful. Like I see everyone else out there in their Audis and their Mercedes and their BMWs and they are clean and they are fancy and it is lovely. Yes, they do look successful but I prefer my paid off minivan. It is like driving around in my living room, it is wonderful.

Mindy: They look successful, are they successful? 

Dawn: I do not know.

Mindy: They just maybe have a really big car payment. Okay, what is your best piece of advice for people who are just starting out? I am going to ask this as a two part question. Starting out on their financial journey and starting out as a real estate agent.

Dawn: First starting out on your financial journey, I would say to really work on your savings as a muscle. I think Mr. Money Mustache talks about that, like where he says, ‘Your savings reflects is a muscle that needs to be worked out.’ I think if I had done a better job of just putting small amounts of money away, like I said when I finally did do that seeing the bank account balances grow and the debt gets smaller was really really motivating which made me do better as time went on. We are spending a lot more money in the beginning as I saw the benefits of actually not going out to eat every day or spending money on cars that I did not need to buy and putting that money into something that would actually grow a little bit made me want to do it more.

It is kind of like working out, like when you start to see the benefits, it becomes less of a chore and hassle and more of something you really want to do. Then as far as starting out on real estate, I really think you should start out working with somebody else so that you have a really good support system. Whether it is an assistant or under a team or even just under a good broker who provides a lot of support and training. I think a lot of times people want to rush out and work for a 100% commission companies or something like that that do not take a big piece of the pie. But when they do that, if that comes along with a lack of training, it is a huge mistake because like you said, when you go and get your license, all they do is really teach you how to stay out of real estate jail.

They do not really tell you how to run a business. You might know the legalities and the ins and outs of that but they do not tell you how to get a client or how to take a contract from contract to close and who do you need a hire? Where are the inspectors, who are the good inspectors, all that kind of stuff is just things you learn over time and it is better and stop trying to figure out that stuff on your own to work with somebody else who is already a pro.

Mindy: I would second that third that and vote for you a hundred times if there were some voting available on a podcast because I was that person, ‘Oh, I am not going to go and get my real estate license because they are going to take 50% of my commission, but then 50% of a deal is better than 0% of a deal and when you first get into that contract, you are like, ‘Oh God, what do I do now?’

Dawn: Right.

Mindy: Maybe you have got an experienced agent who is asking you for things and you are like I do not even know what those words mean. You do not have to sign on for a team and be there for the rest of your life. it is that indentured servitude. You are there to learn and you are not learning anything in real estate school. You are learning how to pass the licensing test and that is kind of really all that you are learning and I wish they would revamp it because this is such a huge part of somebody’s financial picture, helping somebody buy a house… That I helped somebody buy a house. I got a $9,000 commission. I should know what I am doing. If you are going to pay me $9,000.

Dawn: Yes.

Mindy: Okay, Scott. 

Scott: This is the most difficult question or the Famous Four here. What is your favorite joke to tell at parties? 

Dawn: This is the whole reason I wanted to do the podcast. 

Scott: Nice. Yes.

Dawn: Alright. What do you call a cow with no legs?

Scott: I do not know. What?

Dawn: Ground beef. What do you call a cow with two legs?

Scott: I do not know, what? 

Dawn: Lean beef.

Scott: Nice.

Dawn: It got this from the six year old that lives next door to me. 

Scott: That is so great.

Dawn: She made me laugh for like an hour.

Mindy: Oh my goodness. That is… I have not heard the lean beef. I heard the ground beef, but I forgot the answer. Okay.

Scott: I have got one, I have got one this is week too actually. This kid swallow some coins and gets taken to the hospital, right? The parents are worried sick but they have to go home for the night and later can stays over it. In the morning and the

doctor says, and they say, ‘How is my kid doing?’ The doctor says, ‘No change yets.’

I like that one. That was a good buddy joke, right? 

Mindy: Scott, you need to have some kids so you can share with these jokes. Yesterday, Daphne said, ‘Dad, your dad jokes are terrible.’ Like, yes, that is kind of the definition of a dad joke.

Dawn: My kids and the neighbor’s kid, they ask Alexa all the time for jokes and so we have come up with a handful of good ones.

Mindy: Yes, we just got a one of those things. Maybe it is Alexa and the girls are just sitting there all the time talking to her. ‘Stop.’ Okay, Dawn, where can people find out more about you?

Dawn: Alright, my website is I am always on BiggerPockets, I am a moderator there now so that is part of my job also is to be in the forums and talk chat with people and really the only social media I use regularly as Facebook. I have the Instagram and Twitter and all that stuff, but Facebook is where I will actually spend some time. My profile is G0hills as in chocolate hills, tar hills. 

Scott: Nice.

Mindy: Awesome. Dawn, thank you so much for your time today. This was really awesome. I love this story because not just I am a real estate agent, but I love this story because it is an easy way. Easy is not the right word, Scott?

Dawn: I would say repeatable way. 

Mindy: It is a repeatable way that does not cost a lot in time or money to get started, that you can increase your income with no ceiling.

Scott: It is a great alternative if you are feeling stuck, like your career has a ceiling or something like that. To begin exploring, maybe moving one spouse into this type of career with this kind of and this type of a commission thing and what a great place to learn how to become an agent when we are already talking about real estate all day long anyways.

Dawn: Right.

Mindy: Well, we did not even get into this. You do not have to quit your job to become a real estate agent. You can take your coursework over the nights and weekends. I mean when are you working as a real estate agent? Nights and weekends because you are helping people who have jobs buy houses. When do those people have time to go look at houses? Not in during the weekday, it is nights and weekends. You could start off, you can figure it out. You have one closing, maybe two closings and you have made all of your money back. You just really have to have that first one. I mean you can represent yourself in your own first property deal and then figure out, hey, I like this, I hate this, whatever. But you kind of make back everything and then your ongoing costs are not that expensive.

Dawn: Yes. 

Mindy: Outside of…

Dawn: You got like licensing fees and MLS dues and stuff like that. The cost, the ongoing costs are not terrible. Maybe very basic, at least in our area, between licensing and paying

your board dues and stuff, maybe $2,000 a year. You have got to take continuing education credits, you got to renew your license, you have got to pay your…

Mindy: MLS dues. 

Dawn: Yes, the MLS.

Mindy: I was trying to think of like I know I have expenses but what are they?

Mindy: Very little upfront cost, very little ongoing costs. If it is interesting, try it out. At least look and see how much time it is going to take you to get licensed. 

Scott: Yes.

Mindy: But this is absolutely repeatable. Okay, Dawn, thank you so much for your time today. We really appreciate it. 

Dawn: Thank you guys. It was great talking to you.

Scott: Thank you. 

Mindy: It was awesome talking to you too and I will see you around the forums. 

Dawn: Yes, you will. 

Mindy: Okay, Bye bye. 

Dawn: Alright, bye. 

Scott: Alright, that was Dawn Brenengen. Mindy, what did you think? 

Mindy: You Know, Scott? I love her story. I love that she did not decide to just stay in this comfortable job that was not really making a lot of money. She decided to go out and get a real estate job. She did not stay in that comfortable position where she was making what like $30,000 a year. She saw thought that other people could make a lot more money and she took the leap. She made all the choices that she had to make to get to the point where she is now at multiple six figures. Is that how you say $300,000 a year? Multiple six figures while still spending very low six figures? I mean is she does not have to limit herself to, $10,000 a year or $25,000 a year and still on the path to financial independence. 

Scott: I think I did not want to point out also the frugality component and a basic money management there I think was helpful contributor enabling her to pursue this career. 

Mindy: Yes. The foundation that her parents gave her by not hiding how much things cost, really put her leaps and bounds ahead of where everybody else was. She still made poor money choices but she made smaller poor money choices than probably a lot of her friends did. 

Scott: Yes, absolutely. 

Mindy: That just all builds up and leads you to this financial position of peace and security.

Scott: Love it. Should we get out of here? 

Mindy: We should. From episode 72 of the BiggerPockets Money podcast, this is Mr. Scott Trench and me, Mindy Jensen, signing off.


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In This Episode We Cover:

  • Dawn’s background with money
  • How she grew up in a financially literate household
  • The debts she accumulated during and after graduating college
  • How she paid off her debts
  • Is it possible to invest your student loan?
  • What happened after she got her real estate license
  • How she got serious about making money and building her financial position
  • Having a goal to get a job where she was making a bulk of the commission
  • Started her own brokerage business in 2010
  • People she recommend to hire out when starting a business
  • How much time and money is needed to start a business
  • The benefits of having a business partner
  • Her wealth building philosophy
  • Dawn’s investment approach
  • Private lending on her surplus cash
  • What private lending is
  • Her annual spending and her income
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “To be able to increase your income, there has to not be a ceiling.” (Tweet This!)
  • “Don’t spend more than you make and aim for a lot less.” (Tweet This!)
  • “Having a cushion is so important.” (Tweet This!)
  • “You learned from those hardships.” (Tweet This!)

Connect with Dawn

The BiggerPockets Money Podcast is for anyone who has money… or want to have more! Join BiggerPockets Community Manager and Podcast Director Mindy Jensen and CEO Scott Trench weekly for the BiggerP...
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