Avoid These Common Newbie Mistakes! Hard-Earned Lessons from Nathan Brooks

This is the BiggerPockets podcast show 319

Nathan: ‘If you just say like I want a deal or I want a partner, you are not bringing the value to attract somebody else who wants that. But instead, if you said I am looking for a contractor that I can give my time for the next two weeks on a job that is in this area which is where I want to work, I will come and work a couple hours a day and I would like to learn what your process is.’

You are listening to a BiggerPockets Radio. Simplifying real estate for investors large and small. If you are here looking to learn about real estate investing without all the hype, you are 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: Hey, what is going on everyone? This is Brandon Turner, host of the BiggerPockets podcast. Here with my co-host in crime, David Greene. What is up, buddy?

David: Dude, I am having a great day. We have an incredible interview today with just an all-around solid real estate. He is not a guru but he knows as much as one. This is a very experienced person who is kind of been through the ringer and I could tell he knows his stuff.

Brandon: He is a rock star. Nathan Brooks, he has been on the show a few times before. We will talk about that later. But today, we will talk about a little bit different topic. We will go into what he would do differently if he started over. We spend a lot of time on that. We also dive really deep and onto the disc profile, which if you do not know what that is, it can completely transform your business. Like David said earlier in the show, that it completely changed everything about how he ran his business. We will talk about that.

We talked about how he is finding deals. He is closing 12 to 15 deals a month and he is not doing DirectMail marketing. Wait until you hear what he is doing to get those deals. It is something that everybody here, whether you have never done a deal, you have done a hundred, you could implement your business today. Yes, it is fantastic. Without further ado, let us get to today’s Quick Tip.

David: Tip.

Brandon: Alright, today’s Quick Tip is simple. Laura over in the BiggerPockets marketing department has been hard at work, negotiating a ton of excellent deals exclusively for our pro members. They include discounts on loans, property management software, DirectMail marketing, and even cash back from Airbnb. These savings are available to our pro members on top of all the other cool stuff you get at being a pro member and the landlord forums and the calculator usage and all that. Check it out, biggerpockets.com/perks if you are a pro member and if you are not a pro member, you can go there also and there are some regular member like free member perks as well. If you are just a free BiggerPockets member, we love you too. Go check out what the kind of discounts and stuff you get access to. Again, biggerpockets.com/perks, that is BiggerPockets.com/perks. Hey, David, let me tell you about another cool perk.

Later in the show, we talked about some really really good books. Reading of course is one of the best ways that you can improve your investing. I mean, I am a huge reader. The first year I have read like a hundred books and I want to tell everybody today about a great way to do this on the go with an app called Blinkist. I absolutely loved Blinkist. I do not always have time to sit down and read. I mean, David, I read a lot. But sometimes I use Blinkist to listen to a 15 minute audio summary of great books. I am actually pulling up my Blinkist app right now and I will tell you a couple of them. I have just finished Atomic Habits by James Clear. David Goggins, Cannot Hurt Me. Brene Brown, Dare to Lead, Nicholas Boothman, How to Make People Like You in 90 Seconds or Less. Milwaukee Robbin’s 5 Second Rule, all these really good stuff, The Checklist Manifesto. Some stuff from Robert Greene, all that is in here. Absolutely love Blinkist.

I mean, again, all the things like the Four Hour Work Week is in there. Seth Godin’s’s new book, there is marketing and more. Like Blinkist has been used by over 8 million people. Like right now they have got self-help, business books and a whole lot more than that. Like even Becoming by Michelle Obama which is actually is on my list to read and our producer Kevin Actually love that book. Hey, if you are listening to this, I really think you will love Blinkist. Here is what I want you to do, go to blinkist.com/pockets to sign up for a free seven day trial. Again, blinkist.com/pockets and check it out for a week on us, blinkist.com/pockets. Alright, big thanks to our sponsor as always. Without further delay, I want you all to hear this interview with Mr. Nathan Brooks. Let us get to that interview right now. Welcome to the BiggerPockets podcast, Mr. Nathan Brooks. How are you doing?

Nathan: I am so good, Brandon. How are you?

Brandon: I am good except I almost said myther and then that would have been awkward so I said mister.

David: He is the myth, right? The man, the myth, the legend. The only four timer on the BP podcast. I know what you were doing, Brandon.

Brandon: That is exactly what I am doing. Thank you for supporting me there, David.

Nathan: I am supporting you, David, for supporting Brandon. I think we are good.

David: We have got a circle [inaudible][04:42].

Brandon: It is like the massage circle.

Nathan: You are doing great, buddy. You are doing great.

Brandon: Thanks man. Aright, Nathan has been on the show four times before and I wrote down the numbers and then I lost them. What numbers were they?

Nathan: This is number four, so it is 87, 159, and 232. This will be, I am not sure, but…

Brandon: You are pretty much on the show like every other week. There is a reason though, because Nathan and I are actually pretty good buddies. We talk fairly often, we text like high school girls and we have a good time with it.

Nathan: We do.

Brandon: Nathan, I just really, really look up to you a lot in how you built your real estate business and so I just keep coming back to you for advice and I am like why not bring the rest of the BP nation into it? That is what we are going to do today. Sounds fun?

Nathan: Yes, that is meaningful for you to say and it is a real on honesty, it is a real honor to be on here for the fourth time and it has been a huge part of my growing, my success, my business and everything too. It is definitely mutual and I am pumped to be on.

Brandon: Well, let us go into it. Before we go into today’s topic, which is we will be looking back in helping new investors like by asking you, ‘Hey, what would you do differently if you could go back or what you wish you would have known when you got started?’ I mean, let us first of all do away with the whole like one time I asked Seth Godin, this is a true story. Seth Godin is a famous author, writer, blogger, very famous guy. I emailed him directly because I heard that he responds to all his emails and so this is back like seven years ago. I said, ‘Seth, what would you do if you could go back and do it all over again?’ He responded with, ‘If I went back, I would not be the person I am today so I would not change anything.’ Right, it is kind of like… I love Seth Godin. But that is like the cliché answer. Like of course, you would not be who you are today. Let us just throw away that.

Nathan: Sure. Besides that, we are going to talk about what you would do differently.

Nathan: Yes.

Brandon: That said, before we get there, who are you? What do you do? How did you get into real estate? Walk us through your story in a minute or two and bring people up to up to speed if they did not listen to your earlier shows.

Nathan: Yes, absolutely. I am Nathan Brooks. I am out of the Kansas City market. I am a turnkey provider of a really well renovated properties. We are pretty obsessed about that quality piece. For years, turnkeys has got a bad rep because people did not really do what the right thing was. We will do about 150 houses out of Kansas City this year. I got the start back in the mid two 2000s and I rode the wave up and a crash and burn with the wave down and had to rebuild my business myself, my mind, how I wanted to do business. It is one of those things where I had that choice, I had that decision to make if I wanted to get back after it after going through bankruptcy and having that horrible experience or not.

I started doing some more deals after post-bankruptcy and started to do some joint venture deals. Then from there, met my business partner in 2015 and that is when I really started to understand more and more and more kind of what sit I should sit in, what I am good at, what I am not good at. Mainly from hearing from other people, right? When you actually start to listen and learn. We have grown now and we have that turnkey company. We have a retail, a realtor team. This is our second year. We actually just… I just got this certificate. We had the number one listing top dog in our office for 2018 which is our first year of business and our target is to do 30 million in sales for our second year and then we just started a local meet up and we have literally gone from nothing December 4th to almost 2,500 Facebook members and we will have 250 plus show up at our third meet up ever in Casey here in a week.

David: That is incredible.

Brandon: Alright, on that note, let us go back and divide your story into kind of two chunks. There is what you would have done differently the first time you got in real estate, pre-bankruptcy, and then what would you do different now the second time? Because it is really like to almost like two different stories, right? That you built something, it collapsed, you built something else, both in real estate, right? Let us go back to the very, very beginning. Your first looking into real estate, what would you do different?

Nathan: I definitely would have gone just a tiny bit slower. I think there is something about people who jump in and go after opportunities and there is something important about. I think there is a lot of people who have that analysis paralysis situation. We do not take the offense, but for me, I jumped in so fast. I literally had no idea what I was doing. I was taken advantage of, I made some bad bad decisions and I just did not have any context to what was actually going on, if that makes sense.

Brandon: It does, it does, yes. How do you balance the forever question of jumping in, taking action, doing stuff, or analysis paralysis, just not ever taking action. How do you balance that and how do you recommend new investors balance that?

Nathan: Well, I think now that I have learned so much about like a DISC profile. In culture index, there is a bunch of these things out here that we can learn. I think it honestly starts with learning about yourself more first. If I would have understood more, I am that high D DISC profile person. I am going to literally just jump in, ready, fire, aim. If I would have recognized that about myself, then I would have recognized like, hey, we are going to jump in and that is cool but let us make sure we understand what it actually looks like. Really, the BiggerPockets of the world, it has grown exponentially in the learning and teaching and all the books that are out there.

Honestly, if I would have found somebody who already had been doing it and I had learned more in kind of the path of what I want it to look like or at least somebody that I was excited about would have made all the difference in the world. Now, I spent so much more time doing that and now I have so much more clarity in what I want to or what I need to learn about or what I want to go after.

David: You mentioned something there. I think it is credibly helpful for people and that is knowing yourself and you have mentioned the DISC profile is one of the ways you do it. I know I wrote an article on BiggerPockets about the DISC profile and like kind of an overview of it and how to help use it in your business but can you explain a little of what you mean by how it helps you understand yourself and maybe how it helps you with the team members in putting them in the right roles?

Nathan: 100%. I have not read that article. I am going to go back and read it too. DISC profile is wonderful. To go to just kind of the short answer, D is for driver or like the general type. The one that is in the front of the room, that is probably the D. I is influencer. That is like a people person high I, low I is not a people person. You could be a driver and not a people person. You could be a driver and a people person. S is stabilizing. That is like high S takes a ton of notes and they like everything in order. Low S, me, not into details, not tracking all of all of those things. C is that caution. It is like being high C is really really really every I dotted, every t crossed, super to the last 99% is not good enough.

Once we started understand what all those things meant, then we could say, okay, well you want somebody in an administrative situation to be a really… They do not need to be personable enough but not so high that they are going to talk everybody and not get any work done but you also need higher S, higher C so that they are going to actually run the play, actually how the detail to do it. Once I started to learn that about myself, then I can say okay well I am a high D, high I. I am terrible with details. Now, I need to surround myself with people who are good at that. One of the business coaches I have talks about the like it and love it box. If it is not in the like it love it box that I am doing, I do not like details, why am I doing them? That was really the start of it.

David: Brandon and I talked about how when something feels light or heavy, that is one of the ways of knowing if this fits within your skill set or not. But do you want to take on that, Brandon?

Brandon: Sure. I mean, yes. Just like ask yourself, does this feel light? I think one of my coaches back in the day said that to me because it feel light. Like think about like analyzing a real estate, does that sound light? It actually does, it feels like a light activity. It does not feel heavy but I think about calling up a contractor to tell him to pay, like to show up because they did not show up yesterday, that is the heaviest thing in the world. It just feels like I am carrying around a thousand pounds on my back. Right, I have learned, yes. I heard a quote from Sara Blakely, the Spanx Lady, Jesse Itzler, his wife. I heard a quote from the other day. It says , ‘As soon as you can afford it, hire your weaknesses.’

Basically, what she is saying is find what you are good at, what you are not good at, and hire that stuff out. The DISC profile, by the way, people can access. There is a free one online. I know there is probably a few. I know Tony Robbins has one. If you type in Tony Robbins’ DISC, you will find it in Google and then you can take it, you can have your team take it, your spouse take it. It is kind of cool. It is fun to kind of see.

David: No exaggeration, it changed my life when I learned that. It is seriously, it was like the Rosetta stone that helped me understand how to communicate with people that were not me and I realized I was carrying around so much anxiety because I knew I am a very high D and then C, which is kind of rare so my brain fights with itself. But most people just did not understand the way I thought in the way I looked at stuff and I knew when I met a new person, I did not feel confident that I could explain what I was trying to get them to understand until I learned DISC and then I was like I went from feeling insecure to feeling super empowered. Like I know how you talked to an I, I know how I talked to an S, I know how I talked to a C. Then I mean life just got a lot easier.

Nathan: It is so true and I love that. High D and high C and not to get too nerdy in the DISC, so you are somebody who has vision and somebody who has, who likes those details to understand. My business partner is a high D, high C and because I always get frustrated. I am like as soon as I say something and I say it a couple of times, I am why is it not done, right? Well, hey, guess what? If you go back and look back at my business now, some of those decisions that were made are like, okay, well as soon as I say something a couple of times, I process it out loud and then I am assuming that whatever it is, whatever it takes is getting done and it just simply not that not the case.

Brandon: Yes. That makes a lot of sense actually. I think I am a… David, you are what? A D, you said high D, high C. I am a high I, high S, right?

David: Which is why Brandon and I are really good partners, right? As long as our values are aligned and we have the same goal, the stuff he does not like, like calling and talking to contractors is easy for me, that is a light activity. Like I am going to call that guy, I am going to light a fire under his butt and even like when we hang out I take his phone out of his hand and I am like let me just talk to this guy for you.

Brandon: Yes, he has done that.

David: I do not care, right? I will do it. But the stuff that I do not know about doing like putting myself out there and being a little bit more like gregarious and Brandon is amazing with conflict resolution and making people feel comfortable. Even the way that the podcast works out, if you think about it, Brandon does a lot of the of the getting the guests going and getting them moving and then getting them comfortable and carrying it and I kind of hone in on specific details because that is what a DC’s brain was going to do. This is so much easier because we understand that and then we can build out the system and I really feel this is applicable to even the newbie investor because there is things about themselves that they do not understand about why investing seems so scary.

If they are like, ‘I do not want to go to a meet up and talk to people, I do not like people.’ That is not what you should be doing. Get a business partner who is like I do not want to understand a spreadsheet ever. I just want to go tell everyone and hand out business cards and be fun. You marry those two things together and then investing is fun.

Nathan: Huge. It is huge. You mentioned something that I think that you cannot underestimate either which is the culture in which you have it built in those values and once you start to understand that culture and value part, and it is not the same. We think about and we see these core values and we have done that in our business, but those values are indicative of the leader in that organization and so they hope they are the guiding principle to the way that that business runs. The more I learned that, the more I understood that. Hey, not only is it like having the right person, right? You understand the DISC and you put them in the right seat, that is the Jim Collins, right? In the right seat, on the right bus with the right leader go in the right direction.

But then, culturally right, you start to realize that those things attract and reject each other. If the culture, if it is right, you are going to have those people attracted to what you have going on in the first place.

Brandon: Yes. I 100% agree and I love that analogy of the get them on the bus. I use that phrase a lot. But when you find really talented people, get them on the bus, get them in the business, find out where to put them, find a seat for them. If you have to move them around a little bit, you can. That comes from Good to Great, right? Jim Collins.

Nathan: Good to Great, yes, exactly. The most terrifying thing about this in any person, in any level of wherever you are in your business, is that the direction is your responsibility. Even if you have never done a deal before, now if you started thinking about okay well these are my strengths and these are the things that I could do a really good job on and then I can help understand who I need to put around me. It might not be even having people on your team or on your staff, so to speak, but you still need to have an attorney, a title agent, and whether a real estate agent, whatever it is, contractors. Now, you start to understand what type of personality they are in the way that you communicate with them and all the more clear, all the more those expectations come out the way that you want them to be.

Brandon: Yes, that is fantastic. Before we move on to the kind of the next topic, I want to get back to what you would do differently but obviously like understanding yourself better, understanding the people around you is huge. Of course, if people want to read that article by David, it is called How To Use the DISC Profile to Communicate Effectively in Business? You can find that on the show notes of this page on this show, BiggerPockets.com/show319. We will put a link to it there. Alright, let us talk about pre-crash. Before the crash, what would you have done differently in terms of like mechanics in your business, like leverage or risk taking, exit plans, things like that?

Nathan: I definitely would have had clear, I just, I literally did not understand how to fundamentally buy, operate, and sell or hold a deal. I literally did not understand that. I would definitely have better fundamentals on what the actual data looks like. That is one. Number two is I would have also had a clear process in which I started and ran the construction portion of the job. Just a simple like here is what the expectation, this is what it looks like when it is done. By the way, that is a great question for any conversation. If there is some idea that is coming about, well, okay, cool. This is all really awesome. What does it look like when it is done? That is of course the high D in me who asks that question.

Then, finally, I think that it was about understanding my end goal and the clear that I have been on my why and how I actually am, what the goals are long term and the more clear those things. You think about that analogy of like a mile and how many steps are there in a mile and in each step gets you closer to the end game. It is a huge long journey but all of a sudden you are at the end, you are like, Oh wow, here we are. If the more clear I was on what that ending look like or what the target was, then I would have made a lot more concise, better, faster, more clear decisions.

Brandon: Can you tell us what went wrong? I know people can go back and listen to the first time you were on the show. We talked a lot about it, show number 87, but what went wrong that first time? Like if you had to boil down to a few mistakes that people can avoid today.

Nathan: It was definitely kind of a confluence of multiple things. Hiring a contractor who is “a business partner”, working with the bank that I did not really understand the terms, did not really understand how it worked. Then I had some bad luck, the partner did not do what he said he would do. I did not learn from it and I did not also have a backup plan so I kind of just went into panic mode. Ultimately I had just a lot of different problems happen at once and then I had no backstop. As far as having savings more in that, in that reserves.

There just was not that ability to write it down a little bit and so I will tell you what now, I do not go these deals without understanding what my timelines are and how much money, what is the worst case scenario. There is a great book in money mastering the game. I cannot remember who they are interviewing but Tony Robbins asks like what is the number one thing that is important and all these guys talk about, it is not actually making money, it is first not losing money I am always looking at that downside. I am always looking at what is the worst case. I am always thinking about not just A exit strategy, but B and C and what actually eyes wide open are the possibilities in this deal.

Brandon: Yes, that is smart because I mean things do go wrong constantly so we always encourage people around BiggerPockets, right? It is have that exit strategy, look at what could go wrong. Oftentimes, it is really easy to, in real estate, look at everything from best case scenario like when you are analyzing a deal, right? It is like, well, you know we could probably only have $75 a month in utilities or it is probably only going to be 5% for repairs. Like I caution people they are thinking instead like what is the worst that could happen or maybe not the absolute where I mean like you could have a meteor hit the building, right? But like generally, what is like a reasonable worst case scenario for this deal? Run your numbers that way, see what it looks like there. Then you can run and maybe more of a medium like, hey, what if it is probably okay and then make a better decision based on that.

Again, having the reserves huge. Do you have a recommendation if somebody is jumping into real estate and going to buy their very first house, let us say they want buy just a single family house, maybe something from like your turnkey company or whatever, how much should they have in reserves sitting in a savings account to be able to buy a call it hundred to $200,000 rental property?

Nathan: If we are talking to one of our turnkey clients, I will say let us say the mortgages are $600 bucks or something like that, I like to have six months reserves. I like the safety of it. What was that $3500 bucks, something like that. Even a few thousand dollars. I remember this so clearly, so I remember buying a couple of homes pre-foreclosure where I did not do the inspection because I could not afford it. Can you think of a dumber dumber response than I cannot afford the inspection so I do not know better, right? I do not know what I am buying, I do not know what I am looking for. I have not done hundreds of deals now, I can walk it with 95% accuracy or whatever it is and I cannot afford the inspect. It is just so dumb.

David: Yes, they are smoking that hopium. Just hoping that that  thing sells.

Nathan: Yes. I was just wild with that hopium man. Let me tell you, it does not work very well. Sometimes you get lucky, but sometimes you do not.

Brandon: You can say the same thing about like I am going to start a partnership with this guy or girl or I am going to raise money from this group but I do not have enough money for an attorney to at least look over our partnership agreement.

Nathan: Yes.

Brandon: You really should think twice if you do not have enough money for an attorney to look up your partnership, should you have a partnership at that point, at least like a legal one at that point. Definitely look at it.

David: I was just telling someone this yesterday that anytime you catch yourself thinking thoughts like, ‘Oh, I do not feel good about this. I hope it works out.’ You should just stop, like stop right where you are. Do not take another step and say instead of saying, ‘I hope this works out,’ what do I need to know in order to know that it will work out or at least know what could go wrong, right? That is where the skills of being an investor actually come into play. Like I do not know what my repairs are going to be, how do I find that out? Do not take action until you or someone around you that you trust can get that right. Like your anxiety is there for a reason, your fear is there for reason.

It does not need to be your excuse to not take action. It needs to be like a warning sign that hey, you need to figure this piece of it out. Like education, knowledge, understanding what you are doing. Now, I bet, Nathan, when you buy a deal you do not feel much anxiety at all. I mean, I do not think we have asked you how many deals is your company doing a month right now?

Nathan: We are doing 12 to 15. We are buying and selling 12 to 15 houses a month.

David: Right. That is like massive success. You guys are kicking butt and you do not feel like I hope this works out. Now, there is going to be elements of your business where you may get a little bit of that but then you are like, okay, I see what went wrong and you are going to readjust it there. Can you tell us how are you finding 12 to 15 deals a month in today’s market?

Nathan: We really focused, and I think I have probably talked about this before, but really on the relationships because ultimately if people know that we can execute in and we actually close, then A, it is that. People now know that will actually close. Number two is that we have the economies of scale to actually come at something like that. We have multiple people looking at deals all the time. Then we built out a proprietary system. Literally, in 60 seconds I can plug in numbers in the back end and my system, it pops out three numbers which are the LTV of the deal, Loan to Value. My all in costs to the value, my return on capital. What am I going to actually make with my money invested? Then the third one which I think that we do not talk about enough is the return to the cost of construction.

We found when we would look back and see the ones that we got our butts kicked on, we would have been really high. Let us say it was a $200,000 ARV, we get the smoking deal that is $30,000 for the house or something, but you have $100,000 budget. Now, all of a sudden you take, okay well the scaling and the opportunity of having something goes sideways that is a $30,000 budget compared to $100,000 budget is totally different. That is a massive massive difference. We can really quickly get on something, we pay cash, we can close it in a couple days or a week or a month or whatever that that person wants.

David: Well, I think you recognize that the construction is the riskier part of the deal because more things can go wrong than just the price you pay for the house, like you have a really good idea what the asset is worth. You can mess up in small ways but there is less variables. But the construction, there is so many things that can go wrong, right? When the deal starts to get heavier on the construction side than the actual price you paid, there is more opportunity for risk. That is just so beautiful said. Like what you did was you recognize here is the part where I could really get hurt. Let me avoid this rather than focusing on the things that are not going to get you hurt as much. Like should I do this in a LLC or in my own name and that is where a lot of people get stuck.

Nathan: Right. Well, I think one point before this conversation we were talking about what to say no in our feeling, how our feelings are, and the other cool part about having those metrics really clear is that it is faster yes but it is also faster to no. People, I think, a lot of times are afraid of no. We need to be trained that no is okay, we just have to know why we are saying no. I think that is a massive massive opportunity and then people who are buying homes for us then can say, okay, well I know this is a no, I can see the data right here and now I am going to move on to the next one rather than sending out my guys to go look at it or put in the contracts and all that stuff together that takes that most important thing which is that human time capital to go do it.

Brandon: Yes, that is really a good. Hey, I am wondering, when we talk about relationships with finding deals, a couple of questions on it. First of all, are those typically wholesalers that are wholesaling deals to you? Are you guys also doing DirectMail marketing? Are you doing anything else like specifically on your lead gen?

Nathan: We do not do really any DirectMail marketing. We buy off MLS still, we build relationships in our meetup. We were definitely getting deals out of that meetup and an opportunity to talk to people about them. We are also looking ways to help those new wholesalers too. Like, hey, let us help you understand how to comp stuff better. Let us help you understand how to price them better for you so then we can buy them and you know how to buy for us. The other thing is having the clear buy box. We talked about this a lot. When we explain to the people, they already come to us and they are like hey, this looks like a bridge deal, right? They already know like this looks like this is something that you guys would buy. The better we do at explaining what we buy and how we buy it and the numbers that we need to buy them at, so MLS wholesaler relationships and then other realtors that we know and then occasionally buying from direct sellers but not very often.

Brandon: Okay, alright, that is great. What I like about that is that anybody can do that today. Listening to this, if you are a brand newbie, you can go to networking events, you can meet wholesalers, you can tell them what you are looking for, you can help them learn how to run their numbers if they do not know how, or if you do not know how, you can learn online and learn like you know how to run the numbers and then help them. I mean like you are not doing anything to buy 12 to 15 deals a month that the newbie looking for a first deal cannot do.

Nathan: 100%.

Brandon: That is what I love.

Nathan: The other thing about this, and I see this a lot, in our meet up now I actually coach people on this when I see people post stuff in there. If you just say like I want a deal or I want a partner, that is not really, you are not the value to attract somebody else who wants that. But instead if you said, I am looking for a contractor that I can give my time for the next two weeks on a job that is in this area which is where I want to work, I will come and work a couple hours a day and I would like to learn what your process is. Whatever you want me to do, I will do it. The more that you start thinking about how you can help other people, those will naturally come back to come and help you.

David: Very true.

Brandon: What is going on everyone? It is Brandon. We are going to take a quick break from this podcast to invite you to this week’s Webinar. How a newbie, meaning a new real estate investor, can start building wealth through real estate. Because look, when you are beginning to invest in real estate, it can feel overwhelming, right? Where do you go? What should you do? What should you buy? I do not want to make any mistakes, right? That is why this is a must attend event. Look, if you have fewer than five properties, do not miss this.

You are going to learn the different strategies and niches you can take, some of the common mistakes that investors make, some of the best and worst strategies for new investors and a whole lot more. We are even going to be looking for a real life deal on the market together. We are going to run the number, then find out how much we should pay for it and how much will make if we buy it. It is going to be a ton of fun, super helpful. Again, if you have less than five properties, you better be there, BiggerPockets.com/newbiewebinar. Again, biggerpockets.com/newbiewebinar. I will see you there.

Let us move on a little bit and talk about your current business model. You own a turnkey business, which for those who do not know it is you basically buy, and correct me if I am wrong at any part of here, you buy properties, you then fix them up, you make them look and function and again you said you focus on quality, getting them really good then you rent them out and then sell them or do you sell them to out of state investors typically or just anybody really but usually probably out of state and then you rent them out and then you manage them correctly. How does that work?

Nathan: Okay, very simply, we use the two set of eyes approach. Two set of eyes when we buy it, on the acquisition side, and then we have a full renovation scope in budget. Really, by the time we close on them, we want to have all that stuff in place. Literally if we wanted to, we have a contractor assigned. I will buy it on Monday, I started on Tuesday.

Brandon: Okay.

Nathan: That is our goal. We were not always that tight on it but then a week or two now, we are pretty much typically on that job. We run the construction and we take an approach that is anything that does not have a 10 year useful life or more gets fixed or replaced. This is one of those places where turnkey really got a bad rap and people would basically lipstick on the pig, sell it as a turnkey home. We wanted to kind of go against that, make sure like listen, not only are we giving you the scope of work to our client but hey, if it does not have a 10 year useful life or more, we fix or replace it. Then we go through that and complete the construction.

Then we bring in two people again, so we have two sets of eyes and we go through literally three steps. Our team internally looks at it and make sure, hey we create the punch list if you will, and then we send an a third party inspector and they go through it with a fine tooth comb and then we bring in that property manager. By the time it comes out of the factory so to speak, we have really done a good job of double and triple checking everything that is in there. Then we send it immediately to the property management company, take professional pictures. If you are not taking professional pictures of your rental property, stop and go start doing it now. It is so important, it shows so much better. You will get more rent for it. Do not even think about it. Goes from the hundred bucks or whatever it is and go have it done.

Brandon: That is a great tip.

Nathan: It vital. Then lastly, we actually tenant that property before we sell them. That way we know that the client, because let me tell you, we have been through some nightmare situations where we sold it at prior to and now we can literally say listen, Brandon, David, you are buying a turnkey from us, do not sweat it. We are going to have the tenant place, by the time you close on it, it is truly a turnkey property and it is truly is cash flow day one.

Brandon: Yes, that is fantastic. Let us talk about mistakes that people make like newbies especially when they are buying turnkey. When they are buying from somebody who essentially what you are doing, I mean, for those who still maybe not do not quite grasp it. You are basically flipping houses, but instead of listing them on the market, you are selling them to your private list of investors. Like people who are interested in buying out of state or again, you probably have some in state, but usually it is like I notice a lot of people from California or New York or Hawaii that do that.

Nathan: I want to actually give you a specific example too. We started working with this company called ADPI, Active Duty Passive Income. These guys help military guys specifically invest in real estate. As opposed to going and blowing money on the brand new F150 or the brand new Mustang, I am personally really passionate about this because I am always the guy who goes in the airport and is like, hey I see somebody in uniform or whatever. I am like, ‘Hey, thank you for your service.’

Now, when we get somebody like that, we get to explain the basic real estate education, right? We know that, hey, you do not have to be an expert in Kansas City real estate. You have to know that this is what your goal is. You want to invest in real estate, you want to get your spouse home from work, you are active duty service member and you just want to take that money and invest it in something that is going to come back. Almost all of our clients are out of state and we always tell them, ‘Listen, we want to build this so that you do not have to sweat it. You do not have to worry about it. You just need to understand like what kind of returns you are looking for and that long term, this is a long term play.’

David: For people who hear this and they are trying to figure out is this right for them? Should I go turnkey? Should I do it myself? What are some ways people can know what the best option for them would be?

Nathan: Such a great question, so says the high seat. Turnkey is not for everybody, 100%. Turnkey is for the person who we have firefighters, we have military personnel, we have tech entrepreneurs, attorneys, on and on and on. Those are the people who are professionals. They love what they do. They have money to invest and they want to have something else besides that stocks and bonds and investment. By the way, now is an incredible time to be investing in real estate too if you look at the tax benefits and all of the things that are politics aside, the current administration that we have benefits as real estate investors and if you have not looked at that and you are thinking about investing, now is definitely a time.

Turnkey is not for somebody who maybe you are real handy. You want to go in and do some of this stuff yourself. You could do that BRRRR strategy, the buy, rehab, rent, refinance and repeat, which is wonderful and that is how I started in real estate. If you are somebody who you like to build systems and build teams and we know people who have teams. I know really successful businesses who have teams in other states but you have to be very processed driven, you have to understand how to build that team and be able to invest in it. I think turnkey is great for somebody who does not want to swing the hammer, does not want to fix the toilet, does not want to have the headaches of running the construction, knowing how to buy it, knowing how to rehab it, knowing how to price it. Then buying them, BRRRR strategy or whatever is for somebody who wants to be a little bit more in depth and go through those lessons and also reap the reward of having some equity or whatever in those deals.

David: I have an analogy that buying turnkey is like going to 7eleven and getting a coke out of the fridge. Like it is just right there, right?

Nathan: Yes.

David: I got to grab it at home. I do not have time to go to Costco and load it up and fight traffic and get at home and put it in my fridge and wait for it to get cold and then remember to take it. That is kind of like what my method is, is I want to go find those houses and do all that work.

Nathan: Yes.

David: But if you are someone who is doing really well and you just know I am not going to do anything, turnkey could be a really good option for you because someone else has already done the work. They have taken care of the part of the funnel that is the hard part.

Nathan: Exactly. The other thing about it I think that is nice, and obviously I sell turnkey so it seems a little self-fulfilling, but if you are in a market that is really tough to have cash flow properties this way even at the number of paying retail price, you still get a really nice cash flowing asset and you get a really stable market like Kansas City or some of the other Midwestern cash flow markets that are just really good, stable, great long-term investment place.

David: Yes. Let us say that I want to build a turnkey company just like yours and I want to do 12 to 15 deals a month and I am getting excited hearing all this. What are things that people need to know, like the most important thing they got to do to get started? If you look at your whole career, what is the thing maybe that you would have done differently or maybe just that you realize when I figured out this piece, everything fell into place, the most important part?

Nathan: When I started to understand myself better, in what I was good at and the more clear objectively I was about it and I stopped doing the other stuff, the far better my business went. We went through EOS implementation. There is a book called Traction and so we started to learn about like, okay what are organizationally, what does the company look like and what seats should sit in where and then who should do what tasks? By the way, this is stuff I hate doing. I do not like the detail, I do not like getting in to try to understand all those tasks, but let me tell you what, it is a game-changer. Once we finally started to be able to say, this is what my job is, Nathan.

I am the person who creates culture. I am the person who has this sets the vision and helps explain what is happening as a company. I am responsible to help lead and show the team from the front what I should do. If you really want to build a team, you are only as good as you are. That is the terrifying and wonderful thing, your business is only as good as you are. You have to start today with learning not only what is your core focus as your company. You want to do 12 to 15 deals, awesome, what does the infrastructure look like today doing one deal a month or two deals a month? Administratively, construction management, how am I buying and selling deals? How am I financing? Then what does it look like it scale? Then back to that question I asked earlier, right? What does it look like when it is built? I have eleven full time staff people on my team and we have three people sitting in leadership seats and now you can start to back it up and say, okay, well there are actually people out there who are doing that.

This is what their business looks like and then you go start asking questions right now with those people in your market are on BiggerPockets or whatever it is. Go take them to lunch, harass them 52 times and start asking the questions of, okay, this is what I want it to look like, now what? Okay, cool, I learned that, now what? Just start building out that pathway to understand what it actually looks like and keep coming back to that 10,000 foot view. You come out to the 10,000 foot view and then come back down to the today and then come back out to that 10,000 foot view and then you start to actually assimilate the information and build that bridge, the bridge from where you are to where you want to go.

Brandon: Alright, I mean that is really really good. What about the brand newbie? Should they do the same thing? Should they sit down and mock up what their business looks like at the end and then how should they treat… I mean should they, like if you were to go back and do that over again, let us say the second half, you are building your turnkey company the second half here of your story, should you have sat down and take it on a piece of paper and said there will be a CEO, there will be a VP of this, the VP of this, VP or whatever your structure looks like or is there another way of looking at that?

Nathan: That is a great question. I think it is important to do that even though it is probably going to be wrong. I think, a lot of times we are afraid to write it out. I have a journal and it is in my bag back here. I journal all the time about what the next quarter looks like and then we have five year targets as a company. I think people are afraid to write it down and it does not happen or write it down and you have to make a change. But without having the actual vision of what you want, then how are you possibly going to put things in motion that are actually going to get you there? You just cannot, right? It is just like shooting. You are shooting at a target, but there is no target, right? You are just shooting down range, but there is nothing to aim at. How do you know if you are on target or not?

Brandon: I think it was Eisenhower that said like plans are worthless, planning is everything.

Nathan: Yes.

Brandon: Like your plans might not work out, but who cares? Planning is what gets you there.

Nathan: You have to plan and there is something else like plan to fail or fail to plan or something like that. It is the same deal where… Go ahead David.

David: Failing to plan is planning to fail.

Nathan: There you go. Thank you.

David: I had me a general instructors and coaches screaming that to me over my ear.

Nathan: Yes, exactly. I think that is the beautiful thing. If you are a newbie and you are like, okay, I really want to just flip my first home. Okay, well that is the mission, right? Great. Where are you going to buy it? What price point? How are you going to fund it? Do you have a partner? If so, what is their responsibility? If not, okay, what is it that needs to happen next? When it closes, what do I do? Do I have insurance on it? Okay, cool. When I meet with the contractor, do I have a clear scope of work? Do I know how to explain to them what I want it to look like? If I am putting it on the MLS, bring your realtor in. Okay, this realtor has done a bajillion deals in this neighborhood, they know it well, this is what we needed to look like. Just because you have some ARV of some number, it does not mean that you are going to produce that house if you do not put the intent behind it. We can pull it all the way back down just to have one single house as the focus and you can still apply that same concept and working through it from start to the end goal.

Brandon: Going to your personal story again a little bit, obviously you are flipping these houses to sell to investors which is a fantastic model, what about your personal? I mean are you still buying rentals for yourself? Are you still doing any of that work and what does that look like? Yes, we will start there.

Nathan: Yes, I am still buying rentals myself. I still buy in the same areas. Personal goal of having $100,000 a month in passive rental income. That is what I like that to look like ultimately. I am buying personally, I have several dozen rentals. Our company were looking at some senior living stuff. I am really excited into 2020 to look at some of the senior living and there is going to be a huge need for people. All of this comes, one of my big goals personally is to be able to give away a dollars a year before I am dead and to have it in perpetuity and it goes to health education and in arts.

I know if I have this big fat goal at the end, that all those things in the middle, I am just going to be pursuing a life and a business that produces this end goal that then we are able to give back. What is the point of building this giant business and having all of this stuff if you cannot actually do something cool with it. That is absolutely as motivating as making the money now.

Brandon: Yes, really really good perspective there. Let us shift gears here a little bit and get dive a little bit deeper into your real estate business through our Deal Deep Dive.

Brandon: Alright, you guys hear me talk about SimpliSafe a lot, but do not take it just from me. Investors are singing their praises in the BiggerPockets. Forums. Jim, a contractor from Pittsburgh says he secures his vacant properties using SimpliSafe. He likes how he can set it up at one property, then easily take it down and move it to the next and for 24/7 professional monitoring, you pay just $15 a month. Try SimpliSafe today, it feels good to fear less about your property. Plus, hey, there is a 60 day risk free trial and free shipping with free returns if you are not 100% satisfied. You got nothing to lose so visit SimpliSafe.com/pockets today so that they know we sent you. That is SimpliSafe.com/pockets, save today.

Alright, let us get to the Deal Deep Dive. This is a part of the show where we dive deep into one particular deal that you have recently done or something in your story that we can really spend some time going over a number of questions about that property. Without further ado, let us just dive into it. Do you have a property in mind?

Nathan: I definitely do.

Brandon: Alright, we will start with this question, what kind of property is it? Then me and David will do go back and forth.

Nathan: Well, it originally started as a turnkey property.

Brandon: Alright, originally started. Alright.

Nathan: Yes.

David: How did you find this mysterious property?

Nathan: We bought it from a wholesaler and we had a pretty pretty incredible deal when we looked at it from the front end.

Brandon: How much was that deal?

Nathan: It was about a $100,000.

Brandon: Alright, you got under contract for $100,000 or is that the asking?

Nathan: Yes, yes. It was under contract for about a $100,000.

David: How did you negotiate that price of a 100,000?

Nathan: We have gotten pretty good at knowing our numbers. We pretty aggressively negotiate and kind of explained the values and explained the construction and so working through that. If I remember correctly, it was, it was one that was pretty easy under contract and through that whole process we were able to get pretty much what we had asked for.

Brandon: Okay, let us go with funding it. How do you fund this one and then I am also curious how do you fund all your other deals? Let us start with how did you fund this one?

Nathan: We fund this one a with private money. We have raised about $6.5 million in private funds. We help buy and sell our deals through that. It was very simple on the funding side of that. Lots of times people use like their IRA money or something like that, retirement fund, so that they can get a great return and then we are able to use it for the buy in and renovation.

David: Okay. What did you do with it once you had it?

Nathan: We began in earnest with the construction. I remember now that there was actually like a foot and a half of water in the basement when we bought it because it was a foreclosure. Literally, you could have gotten, it is a big house, I think is around 2000 square feet. You could have literally got in a canoe and canoed through the basement in this house, I am not even kidding. We get the property, we get multiple pumps down there, those water pumps or whatever and get everything out. No big deal, it is not the first time we have had issues with water. We have this full construction budget and plan and a scope work and everything. We began running through the whole rehab.

David: Okay. What was the outcome? Like what happened? I sense a story coming.

Nathan: We get most of the way through construction and we are almost done, right? We have the house pre-sold now for I think it was $200,000 and we had a really nice margin in the deal. I do not remember exactly the construction, I want to say it was about $40,000. Come to find out, we are literally like a week or two from selling it, from closing on it, and we are about to send it to property management because we want to sold it as turnkey. Come to find out, this house is in the flood zone. All of a sudden, the insurance rate right goes from whatever it would be to double or triple or quadruple.

It blows out his cash flow numbers. He is like, I am sorry guys, I cannot buy it. We are like, ah, it has been like three times insurance rate of that. It was just a complete nightmare. We go out of contract, we give his earnest money back. We have to start figuring out what we are going to do. We decided, okay, you know what we will just going to put on MLS. It is a really cool area and somebody will like to live here and so we put on MLS. Everything else had been working fine in the house but we put it on. We have a buyer, puts it under contract and does their inspection. Most of the things in the inspection is just fine but this one little tiny thing that it is not on city sewer, it is not on septic, is actually on holding tanks.

Brandon: What does that even mean?

Nathan: I am pretty sure it is like some guy had a really good idea that put like a crate of gallon jugs and then, like puts it down under the ground or something, I do not know. It is not good, not Good. Come to find out this really great deal that we bought and we ran the construction and we had all this stuff then we put it on MLS or sold to turnkey, not turnkey, now a flood zone and now come to find out that it is not connected to city sewer. It is 300 feet to the nearest connection.

Brandon: 300 feet.

David: That is not cheap.

Nathan: And across the neighbor’s backyard.

Brandon: You have met her.

Nathan: We have to get agreement from the neighbor and then we have to run 300 feet of this sewer line and then have the city connection of course which is not cheap either. Twenty some thousand dollars later and… We had to bribe the neighbor, we had to send one of our staff over and make sure that talk really kindly and nicely and get them to agree to it. We finally, finally, finally get this thing. We get the right buyer and go through the inspections. Instead of making, $40,000 $50,000 on the flip, I am pretty sure we lost like $5,000 or $10,000 in the deal. It was one of those were just so happy to have it gone.

David: Gone.

Brandon: Gone,

Nathan: Yes. That is definitely a crazy one.

David: What lessons did you learn from this one?

Nathan: I will tell you what, we learned a lot of lessons in this one. We learned from the scoping standpoint. What do we look at and if there is any question, checking those sewer lines. We do not scope every single property but we definitely just double check. Is it all the neighbors… Well, that is what was so strange about this is all the neighbors were on sewer, but this one was not. Then we also learned that we need to stay in our lane and it has taken us a lot of different times to learn this. But like staying in your lane, we are a turnkey company and we do a really great job delivering great turnkey properties but we are not a high end flipper, that is not what we do.

We have got lots of buddies who are great at it but as soon as you start to veer off in and get outside of the thing that you have really practiced and not to say that we could not do that, right? If we put the time and focus on that we could, we could solve that. But the passion in the direction of our company, we spend a lot of time in the turnkey and we had to really get back to that and make sure we were buying the things that we knew well, we knew how to operate well, and we can execute well.

Brandon: Such good advice in there for anybody, right? Like stay in your lane as much as possible. Like it is easy to get shiny object syndrome and start looking around for other the things because it is fun. That is usually when you end up screwing up. Thank you for sharing that. I love deep dives where things do not work out necessarily awesome because like it teaches it like even the pros, we screw up. It happens, right?

Nathan: It does. It does and it is okay. It is a lesson, right? We need to use it as a tool that we learned from and not be ashamed of it and not be afraid of it.

Brandon: There you go. Alright, well, let us just gears here and head over to our Fire Round. But first, hey David, I actually want to go back to something we talked about earlier today.

David: Oh, yes. What is that?

Brandon: Remember those DISC personality we talked about? I mean you are actually the one that taught me about DISC personality, David? Yes, I love the whole DISC thing. You take a survey, it tells you a lot about yourself and your team. Alright, now we actually did not plan this. This is really funny. We did not plan this but our sponsor this week happens to be a company called WizeHire uses the DISC assessment to help companies hire the right people. I think really easy, really simple their software. You basically use it. Expert hiring coaches will actually help you write the best possible job descriptions and then post them to 60 plus job boards including Indeed, LinkedIn and Zip Recruiter.

I mean like if there is one thing I have learned from Nathan like over and over the years I have known him, he is a really really big on hiring the right people. Like the right person can make you millions of dollars in your business. The wrong person can cost you decades of headaches. Anyway, so important. When candidates apply, WizeHire gives them a personality assessment and stores their score for you to review. Like Nathan, David and I all love the DISC personality assessment. Check it out today at WizeHire.com. That is WizeHire.com, WizeHire.com. Alright, with that, let us get over to the Fire Round.

It is time for the Fire Round.

Brandon: Alright, let us get to the Fire Round. These are the questions that come direct out of the BiggerPockets Forums. We are going to fire them at you in a nice quick manner here. Number one, Gilbert from West Palm Beach, Florida. ‘After mustering the courage and getting out there, research and analyzing, I have been making offers. But I feel like I am behind on negotiation. Any tips on negotiating with sellers in a competitive market?

Nathan: Absolutely. There is a great book out there called Never Split the Difference and it talks about like how you formulate questions and how you are talking to people. I think the more we understand what problem, not that we are solving for ourselves, but what we are solving for that seller. If you really focus on the pain, you really focus on the problem and you get to the root of it in that you are on their side and it does not feel like there is this budding up against each other, but rather working together, then you will find a lot more success.

Brandon: Perfect, perfect. Of course we interviewed Chris Voss on show 260 of the BiggerPockets podcast, you can listen if you want. Go to biggerpockets.com/show260. Alright, next question. Hey, sorry, actually this is yours, David.

David: Well, Chris Voss was the author of Never Split the Difference. A really good book. I have even seen Chris Voss and listened to him talk quite a bit. He has some really good stuff. Alright, next question, ‘I am curious if anyone out there can chime in on what specific projects within a rehab produce the best return on investment? Not Big things like ROOF for HVAC. I am talking about smaller finishes like granite counter tops, flooring, vanity, et cetera.’

Nathan: I am actually going to take it a little different route. When I was in a mastermind all weekend and we were talking about staging and especially on staging home or like earlier we talked about the rental properties and taking professional photography. But in the day and age now, it has to look right. It has to feel right. I think most people, even when you look at granite, there is so many types of counter tops and stuff like that that look really nice. We really focus on staging the home and taking really great photography or like there is a thing called a Matterport camera where you can walk through the whole property. I would really think about the experience.

First of all, who is this product for, right? Is it a tenant? Is it a buyer? Is it a high end buyer? Whatever. How does it feel when we walk in and it is a home for them and then how are we delivering that experience to them in a way that is really good, really well explained, visualized, whatever through that.

Brandon: You are doing any work staging for tenants at all?

Nathan: We do not really do much staging on the tenant side. We do still do some retail flips and we stage every single one of them because the photography just looks way better. That is an interesting question though, is if you did a little bit of staging just like the towels and a few pictures and stuff like that. That is pretty interesting, we might have to test that.

Brandon: Well, yes, when we first got into real estate, it was not as easy to rent out a unit as it is today. I mean today in my market, like you just put up a craigslist ad and you got 20 people calling. But back when I got started it was not like that. We actually used to do that a little bit. We would stage the bathroom a little bit. We were not hauling couches and beds or anything like that but we would do just a little bit. We put up curtains sometimes, just little things like that. It helped us at that time. Today, we do not do it because we do not need to but when the need arises, how do we get better than other people? It is like that is how I am going to do it.

Nathan: Absolutely. You can do other little stuff like something that smells nice and the plugins in the home and you can also just… The pictures make such a difference when you are looking…

David: It is like the number one. I cannot stress enough. Agents will come and tell people, hey, I am going to market your house better than anyone else, right? Like there is this super-secret list of buyers and no one knows about and that is not the way it works anymore. Like everything is out there for everyone to see. You do not go to a super-secret squirrel group of people. You just make your stand out from everyone else and when tenants are just being bombarded by all their options and then yours look the best, they are just going to zoom in on that and go see it right away and good photographers do it. The other thing that is tricky about that question, and I love how you answered it is people want to like get a direct answer.

If I put in the vanity, how much more will the house sell for? But buyers do not make decisions like that. They are not a computer that runs through an algorithm and says, oh, do you use this tile shower instead of that shower stall, I will pay $743 more. It is the feel that it gives them, they make decisions based on their emotions and so if you spend a lot of money to fix your house up and you then do not change your kitchen cabinets that are just ugly and they stand out. It does not matter what you spend on everything else, people just do not like it. Or if it smells bad, man, that is such a good you gave me. Like the pictures are great, but the minute they walk in, it smells like a wet dog. Good luck, you are not going to sell it, right?

Nathan: No.

David: It is just kind of helping people understand that shift away from you cannot turn this into, if I do X I will get Y. It is more how do I get the finished product for as cheap as I can because that is what the buyer cares about. Yes, the more experience that you are, the more you start to realize is that becomes a case. Brandon, you want to take the next question?

Brandon: Sure. Josh from Atlanta, ‘I have been running into a lot of shady wholesalers. They are doing things like marking up properties 200% and then marketing those deals that they do not even have other contract. Is that normal? How do I tell if the wholesaler we are dealing with is legit?’

Nathan: We have had some similar experiences which drives me crazy by the way. You can have a contract and you can assign a contract that has been assigned. That is legal if you actually have it under contract, but well at least it is in my market. I do not want to speak for anybody else. I am not an attorney, I am not giving legal advice.

Brandon: Thank you.

Nathan: This is what you need to do. You need to say, ‘Cool. One, two, three main street looks great. Are you the seller or do you have this under contract and are you assigning it? Okay, great. Would you please send me the assignment contract along with the sales contract?’ That is as simple as it is. Then you know if they actually legitimately have somewhat a property that they can sell or not. Then we stopped doing business or even looking at emails, getting off the MLS to people we know who just send out blasts of stuff. You can just ask them and ask around too because the communities are small. In real estate, there is a lot of people out doing this business, but when you get really down into the market specific, people know. If you are not sure, ask around and then ultimately it is all about that contract because it is not going to close without it. You might as well ask for it now.

David: Yes, wholesaler is a bit of a misleading title because there really is no way of defining. It is not like if you say you are an agent and you can produce a license that shows you went through a process.

Nathan: Yes.

David: A lot of wholesalers are people without an agent license and do not have a house under contract. They have like nothing and they are half pretending to sell it like a real estate agent and then they are calling themselves a wholesaler to do it and you have zero protection when dealing with someone like that so it is a little scary.

Nathan: 100%.

David: Yes.

Brandon: Okay. Last question, ‘When it comes to vetting property management companies, I was listening to your show 124 with Jared Sturm and he talked about reaching out to local property managers in the role of a renter rather than as an investor with a portfolio which I thought was pretty clever. I am curious if anyone else can share strategies for assessing property management companies.’

Nathan: In our business, obviously property management is a huge component of turnkey. Any investment that any person is holding is, it is actually not about you, it is not about the property, it is actually about the tenant. Guess nothing else happens if you do not have the tenant paying your rent, right? Because then all the other things and benefits we talk about do not matter. With that said, I still think it is important to approach it from the owner’s perspective.

You want to ask about like what does it like, how do you manage, what is your philosophy? What is the culture of your company? How many staff do you have? What do you do when it is time to market a property? What sets you apart? What is your process for that? Tell me about how you actually turn the property. When the tenant is moving out, what is the timeline like to go from the date that they moved out, how do you notify me about make ready? How do you charge? Do you have in house maintenance, do you have a maintenance is none? Then also like understanding what are the fundamental costs of it? Like what is the monthly management, what do you charge to place a tenant? Then how do you markup maintenance or do you have that in house out? I would start understanding and then talking to a couple other investors who work with them. Then also how do I access my information, right? Do I have a portal? Do I get a monthly email. Like my property manager would email me my information and the individual itemized properties so I can understand and see clearly and quickly what it is that that month looked like.

Then here is the last one which is I think even the most important. We always talk about like when it is good, it is easy. But what happens if there is a problem? I would ask my property manager, if you are interviewing somebody, say hey there is $1,000 sewer problem, what are you going to tell? How is that going to be handled? When you call me, what do you tell me and then what is the process like and what is the expectation of me and how fast do we adjust it and get on the problem? Because ultimately if you are taking care of the tenant, that tenant will be happy, that tenant will be paying. It is all about that communication that comes back and forth between that property manager.

Brandon: There you go. Alright, well that was the end of the Fire Round. Now, it is time to get over to the world Famous Four. Now, let us get to these four questions that we have asked you three times before. This is the fourth Famous Four you have ever followed through on. Number one, what is your favorite real estate related piece of literature, a book?

Nathan: I am going to go with a book that has changed me on my business trajectory and thinking, but it is not technically a business book, and it is called On the Shortness of Life by Seneca. It really has helped me think about the direction and vision of my business, of my person, of who I am as a person and really thinking about that and applying it to my whole business and it is a beautiful little book. I just got introduced to it. Yes, I love that book.

David: Alright. What is your favorite business book?

Nathan: I would say that I am currently most fired up about Extreme Ownership which I may or may not have talked about before but it is… I think when I think about the level and quality of books, when there is books that are around for just a couple of years in our fad or would be around for a hundred years. I think that book will be around in not just on business but on leadership and on personal growth and it is just a fundamentally fantastic book.

David: I love that book. It is the only book I have read Brandon has not and I tell them about it all the time.

Brandon: I read half of it.

Nathan: I am going to text you about it every day.

Brandon: I know, I need to finish it. It was good, it was a good book. Like I started it and then I listened to something and then I got into something else and just I need to get like a physical copy in my hand and I will actually finish it.

Nathan: It is so good.

David: I really want to get on Jockos podcast and talk about that book and how it is changed my life.

Nathan: Me too. I so badly want. I so badly. I trained him in MMA also. Not only is he a great writer and an author and Dichotomy Leadership was great too, by the way, but also he owns multiple businesses and he is just a brilliant, brilliant guy.

David: Super humble which is another thing.

Nathan: Super humble.

David: Very impressive about that guy. Okay. Other than training in MMA, which you just mentioned, what are some of your other hobbies?

Nathan: Well, I will tell you what, I love to train and I train four or five days a week typically. I also recently bought a tractor. I put in like a road on my property, so my wife and I, our home is on 11 plus acres so we actually have all kinds of space to do whatever. That is a blast and hanging out with my kids and wife and we have a creek on the property and we can do all kinds of stuff outdoors. Anything outside and being able to just enjoy being with the kids and the missus is all.

Brandon: Alright. Well, what do you think sets apart successful real estate investors from those who give up, fail or never get started?

Nathan: I am going to name another book, which is the Go Giver, and it is by Bob Burg.

I think the thing that actually separates people, and I just am learning this, is a willingness to give and then willingness to actually not be afraid that though we are so protective of everything that we have and we have worked so hard but the more that you help others and then you give that information or give that time or give that kindness away, it comes back and it real and it is palpable and it is powerful. The more successful the people are the more willing, I know and see it over and over again, they are willing to help you and help others. To me, that is the biggest tool. The most powerful thing. Just having an open mind and a willingness to help.

Brandon: Alright, well if I want to buy a turnkey property or just find out more about you, Nathan,

where can people find out more about you?

Nathan: There is a couple of ways. Most active social media on Facebook, you can just search Nathan Brooks. There is a cute picture of myself and my daughter wearing these pink glasses so it is pretty adorable, that is number one. Number two, it is bridgeturnkey.com, bridgeturnkey.com and you can check out the properties and talk to my team there. Then, if you are local in KC or you are coming through, then bridgemeetup.com is our meet up and come and hang out. You two gentlemen would be welcome anytime. I had already harassed Mr. Turner about coming out but maybe now that you know that we have rented a theater, maybe I can get you to come.

Brandon: It may happen.

David: I am sure you guys will coordinate your outfits and have your little bromance going on before you go.

Nathan: A 100%. We will have a beard check-in.

Brandon: We are pretty much identical looking, for those who are not watching YouTube. We look identical. I am a little better shape than Nathan, because I trade for MMA. He has got a little bit of flat bottom still but whatever. I am not judging. Alright, Nathan, it has been fantastic. Thank you so much and thank you to all of our listeners today for listening to this episode. It has been fun. Thank you, Nathan.

Nathan: Thank you. Thank you both and I really appreciate you having me on and the opportunity and you guys keep doing what you are doing. BiggerPockets is an amazing place. Amazing community, changes people’s lives all the time. I love what you guys are doing.

Brandon: Thanks man.

David: It was a blast.

Nathan: Thank you.

David: This is David Greene for Nathan ‘The Bridge’ Brooks and Brandon ‘Read Half A Book’ Turner, signing off.

You are listening to a BiggerPockets Radio, simplifying real estate for investors large and small. If you are here looking to learn about real estate investing without all the hike, you are in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online.