This is the BiggerPockets Podcast show 329-er.
My flips buy my rentals so most people will flip a house, buy a car. I flip a house, buy a rental. That way I don’t, again I don’t work even from my rentals. Like my flips do that for me so my goal was always to have everything paid off by something else.
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Brandon: What’s going on everyone? This is Brandon host of the BiggerPockets Podcast here with another amazing show alongside my cohost, Mr. David Greene. What’s up buddy?
David: What’s up with you Brandon? Are you excited for the Pacific Northwest real estate Expo that we’re going to be speaking at?
Brandon: I am. In fact, this episode comes out just after we got back from that so it was awesome. It was so fun. It was amazing.
David: Yes, you did great. You crushed it.
Brandon: Thank you.
David: I’ve never seen you better.
Brandon: Well, thanks. No, yes I’m excited for that. I’m also actually while this episode comes out oh no. You would have just left Hawaii as well. You were hanging out with me. We had a blast. It was so much fun.
David: I can’t wait to go back. That was a ton of fun.
Brandon: Yes, I love future recording episodes. Anyway, no recording this thing here back about a month before it comes out, but today’s show is so much fun. This was an amazing episode that I think this might go down as one of our more popular episodes ever and I say that because our best shows. Like I don’t want to call it best shows, but our shows that tending at the most downloads are the ones where people are like that person is just like me. Do you know our like number one show of all time? Do you know what it is David? Most popular show of all time.
David: Probably like a Nathan Brooks show or something.
Brandon: It’s the How I became a Millionaire on the Gym Teacher’s Salary.
David: Oh yes yes.
David: The school teacher.
Brandon: Yes, yes, Michael Swan, Swanny, Swan. Yes, like he was like our I think he’s our number one, maybe number two, but he’s up there. Like number one or two because like real person doing amazing things. Today’s episode is about Felipe who just a few years ago was on a totally different path and the last like few years he was able to obtain financial freedom. He is not even 30 years old yet and he actually, the day this, two days after this podcast comes out I think he is turning 30 this year. I think. Maybe it’s next year.
Brandon: It might be next year. He might be 29. Anyway, and he’s only got like 10 deals. It’s amazing story of how it doesn’t take that. I say this all the time on webinars. It doesn’t take that many real estate deals to obtain financial freedom.
It just takes the right ones and the right strategy. You’re going to hear all about Felipe’s strategies today on how he built his business using like mobile homes to begin with. Like he got some crazy stories there. He shifted into. He’s got some multi family, some single-family houses. He actually like his entire career was built off a massive failure of like his lifelong goal, his dream.
He’s going to tell you that story. He’s going to tell this great story about his tenant how he didn’t know his tenant’s name for the first three years, which is hilarious. Then one of the more powerful things I think we’ve ever talked about on the show is he calls it then Know Why Principle. Listen for the Know Why Principle and also you’ll hear how like why Felipe and I are actually working on a deal together right now. It’s one of the reasons I wanted to bring him on the show because of what you guys to understand what it takes to be able to like work and build a portfolio and why did I want to work with Felipe. What did, how did he pull that off?
How did we get to know each other, anyway and then of course his strategy on buying single-family houses and cash flowing like an ATM machine. There’s so much in here. Anyway, I didn’t want to give you guys a few heads up of what’s coming so stay tuned for all of that, but before we get to that let’s hear from today’s show sponsor.
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All right, big thanks to our sponsors always and now before we get to the interview with Felipe let’s talk about today’s Quick Tip.
David: Quick Tip.
Brandon: Today’s Quick Tip is very very short and simple. If you are not a BiggerPockets Pro member that’s fine, but so me a favor, this week head over to biggerpockets.com/pro and check it out. We redesigned the pro page. It’s got all like the features of what you get with a pro membership. Like chances are you will find you will make more money or save more money by being a pro member than by not being one.
It’s at least worth looking into and at the end of today’s show I actually kind of in a humorous way, but legitimately it actually works. I made a coupon code based on kind of a something we talked about. Kind of a joke into the show so stick around for the end. You’ll actually get a discount on a pro membership if you’ve been thinking about that so. Hang tight for that and that’s all I really got. Anything else you want to add David before we get to today’s show?
David: Yes, I want the listeners to let us know what they think about today’s show so if you guys could listen to this and then message Brandon and I on Instagram and let us know you like this style of show or you prefer the stuff that’s a little more serious or if you like it kind of mixed up. Today was definitely a little bit more lighthearted fun. Somebody who’s maybe a couple steps ahead of a newbie, but he’s still doing really really well as opposed to.
David: The person that has 400 houses or you know.
David: 400 apartment complexes, whatever. Let us know what you guys think we want to make the show as good as we can for you and we need your feedback to do that.
Brandon: Please do. All right. Well with that, let’s get to today’s show.
All right, Felipe man, welcome to the BiggerPockets Podcast. Good to have you here.
Felipe: Oh man, it’s such an honor to finally be on this podcast. It’s great.
Brandon: Yes, this is going to be fun. This is exciting. We’ve been chatting here for the past hour while waiting for Mr. David Greene here’s computer to start working and him to get Internet back. What’s up David? You’re back.
David: Yes. Thank you guys for being patient here. Apple is supposed to make the best products in the world, but.
Felipe: Let’s get you another one.
David: It took me about 30 minutes for that computer to restart. Yes. See this is because I dumped all my money in real estate I can’t afford a decent computer.
Felipe: You can’t afford a new computer. It’s like.
Felipe: Hanging by a thread or whatever, but you’ve got a million dollar listings.
Brandon: That’s funny. Well okay so in the last hour while we’ve been waiting for David. It hasn’t been quite an hour, but we’ve been Felipe and I have been chatting here just a little bit our story what we’re going to talk about today and like I probably I don’t know. How many times have I said in the last like half hour whatever like okay make sure you talk about that today.
Felipe: Right yes.
Brandon: Like that’s so good.
Felipe: Yes, there’s a bunch.
Felipe: Of good stuff in there that you’re like you got to make sure he’s like who we basically had done a podcast already.
Brandon: Yes, pretty much we just did the whole podcast. We’re going to do it this time in front of everybody else so.
Felipe: Let’s do it.
Brandon: With that let’s jump into this. Actually before we get into the how you got into real estate. Do you want to tell the story of how you and I first met?
Felipe: No, but yes. Well I’m just kidding. This is awesome and this gives so much honor to my wife. I love this.
I have the best wife in the world guys. Seriously so what happened was my birthday was coming up back in May last year and my wife was like what you want? You know it’s really hard because I have everything that I could want. You could say, I feel comfortable.
I’m really and I was like I don’t know and so she was able to look into what I she just knew what I wanted in real estate and all this kind of fun stuff and so she got me a book. She sent a DM to Brandon on Instagram. It was like, “Hey will you talk to my husband for 30 minutes on his birthday?” You said, “No.”
Brandon: I say no to. I have never said yes to that ever.
Felipe: No, you said no and then you said because that’s my wife’s birthday too or something.
Brandon: Yes, yes.
Felipe: And might have been. I don’t know.
Brandon: Yes, I think it was.
Felipe: Then she liked DM-ed you again or and then anyway so she finally got it set up with you to where it worked out and me and you had like an hour long conversation and I was like alright man I know you only gave me 30 minutes. I’m going to let you go. I can talk forever and you were like no that’s cool. Then I just said, “Hey man before you get off do you mind if I save your number and maybe just ask you some questions going forward?”
I bet you were like well if I say no he’s going to do it anyway. Which I was. I just I just ask your permission, kept it and you know it’s kind of flourished into a little friendship here.
Brandon: Yes, yes that’s basically what happened. I never say yes to things like.
Felipe: No, you just said no.
Brandon: Because I don’t have a lot of time right.
Felipe: That was so rude.
Brandon: I always say no did everything right. That’s my rule.
David: But you found the one chink in Brandon’s armor, which is to send your wife and to his DMs.
David: You’re guaranteed to get a response.
Felipe: Yes, dude.
David: You’ve cracked the code, Felipe.
Felipe: Oh gosh. Now everyone’s going to be, “Hey babe.”
Brandon: Yes, I know.
Felipe: “Get on him.”
Brandon: Yes, no I will not likely talk to you on your birthday anybody else, but I don’t know. I honestly, I don’t know why I did. Yes, I don’t know. Other than like I just felt like I should do it and.
Brandon: That’s one time.
Felipe: Here we are.
Brandon: Here’s the funny thing is now like like Felipe and I are actually working on a deal together right now. I know who knows if it will work out, but it’s just funny how those things kind of happened so anyway, a funny story. Very random how we met and we’ve been keeping in touch. Here’s what’s cool about it. Let me just tell everybody before we get into this story.
What’s cool about Felipe is that like we started chatting right. Occasionally we’re text messaging, but you didn’t like blow me up all the time. You didn’t ask a million questions. Like you just kept it around and then you provided value whenever you could then you you found some deal and you shot it my way.
You’re like hey this looks kind of interesting right. I tell the story in the podcast a lot about how Ryan Murdoch did the same thing. He brought me a mobile, the mobile home park that me and him and Mindy ended up buying together. It just was like provide value. You know be a friend like a normal person and don’t blow somebody up all the time, but you’ve been awesome about that so.
Felipe: I think that’s what people don’t understand. I think people try to come in and one they hold people to like this pedestal. I mean they put you guys probably like on top of the world and they’re like scared to talk to you and that comes across that way. Like you’re scared to talk to this person. That just doesn’t work. I mean just you guys are regular. You know your put your pants on the same way I do. Except David, I bet he jumps into his, but no.
Brandon: He does.
Brandon: Yes, it’s really amazing.
Felipe: You guys are regular people and.
David: You’re also assuming Brandon wears pants. There’s a reason that it always shows him from the head up when we’re recording these things on YouTube. He’s on Hawaiian time. Oh he scared me. Sit up right there.
Felipe: Whoah, whoah. There’s kids watching it up.
Felipe: No, but yes I think people really just don’t realize that like you guys have good days and bad days and like don’t annoy you every day or don’t try to send you a gajillion emails like. If the email doesn’t provide some type of value, is it worth sending? I’ve written up a hundred texts that I didn’t sent you because I was like this doesn’t add any value to him or I realized it didn’t have a question in it. A lot of times I get even messages from friends that are like whatever with no question and I don’t reply and they’re like oh did you get my message? Like you didn’t ask me anything. I’m like what.
Brandon: That’s funny.
Felipe: Like what’s going on? Anyways yes.
Brandon: Yes, yes. I hear you. Well anyway I just wanted to give you a shout out on that because you are very good at building relationships I’ve found and something that a lot of BP people would learn a lot from of how to build relationships, how to talk with people, how to network in your market, and we can talk more about that as we go through your story, but I thought we just kind of prep start this thing with that so let’s go into your story. Let’s get into your real estate. I don’t actually know a whole ton about your history of how you got into it so first deal. How did you get into real estate? Why real estate? Where did you come from? What’s your story?
Felipe: All that fun stuff. I’m actually born and raised here in Nashville, Tennessee.
Brandon: All right.
Felipe: My family migrated here in 1989. I was born in 1990. Nashville is a great city. I love it here. Know I got started in real estate it’s funny. Once I graduated high school, my mom and then my family didn’t really have a lot of money. We didn’t have, we weren’t like by any means well off or anything.
For graduation, most people get cars or a ring or whatever. I get a mobile home. My mom owned a mobile home and that’s what she gives me. She was like you know this is all I can give you. You know and but she said it with like I’m giving you a fishing rod.
Go Fish. What I did was I moved in. You know I went started going to college and I was like whoah I have to pay rent there and over here because I was an hour away. I quickly just found a tenant and was just a painter from a construction site that I used to work at that lived in the same area and he was moving out and he was like yes, I’ll rent a room. I was like okay, the lot fee is $350. I’ll rent you a room $350 plus the bills. He said sure so I live for free my first year of college.
That mobile home was basically just kind of paying itself, paying the lot fee so I would come home and be able to live there for free on the weekend. After I graduated college, while I was in Cookeville, Tennessee, I came back to Nashville and I was like okay. What does everyone do after college? They get a house, they get a car. They get a job. I was like okay.
Brandon: And a dog.
Felipe: I guess I should do that and a.
Brandon: A dog. Get a dog and a guitar.
David: A guitar to sing country songs with.
Felipe: Maybe yes in Nashville you’re absolutely right.
David: And you can write the songs about the mobile home and the dog and all the other things that you just mentioned.
Felipe: No so I came back and I moved back into my little mobile home and I was like okay. I need to buy a house because I just thought that was next. I didn’t know anything. My goal and I’ll talk about this more, but my goal is actually to become a police officer.
This is why I know this is going to work out because David, the cop thing. Anyway, my goal was to be a police officer here in Nashville. I moved back into my mobile home and quickly realized like this isn’t this isn’t it man. I need to buy a house. I sold that mobile home. Used it as a down payment for my first single family resident. Move in to there and brought my tenant with me. You want to hear something really funny?
Brandon: Oh good.
Felipe: I still don’t know. I still didn’t know his name at this time and this is three years into our rental agreement. Why? Because he moved in while I was in college and after the first three or four months it was just rude to ask him his name. I would just come home and get rent money and then leave.
Like that was it. I bought the house and I was like hey do you want to come with me? He was like sure I have nowhere else to go. He came with me and he’s been faithful for rent. By the way I still have him as a renter today.
Brandon: Oh no.
Brandon: Do you know his name now?
Felipe: I do, his name is Victor the painter.
Brandon: Okay good.
Felipe: Victor the painter. In my phone, in my phone it says Victor the painter. Anyway so.
Brandon: That’s really funny.
Felipe: I sold the mobile home. I bought the single-family and I moved to Laverne, Tennessee and I started my nine to five. After that, to sell that house, or after I got into that house, I moved into the master bedroom. I rented out one room to Victor the painter and then I AirBNB-ed the other room. I got AirBNB, a renter, and me in that house. Air BNB would usually come on the weekend and that covered everything. Up to this, up to then I still hadn’t paid mortgage or lot fee or anything. Like I was living for free since like 18, since my mom gave me that mobile home.
Brandon: You were house hacking before you knew what house hacking was.
Felipe: That’s absolutely true.
Brandon: That’s cool.
Felipe: From there, I was really focused on becoming a police officer. Like that’s what I wanted to do. I took a job while I was applying for the police department. David knows. It takes about a year and half roughly here in Nashville because you have to go through like applications and they do background checks and I mean it’s just on and on and on, which I think is great. Don’t get me wrong. I think that’s awesome. I took a job at a company here in Nashville in their human resources department.
Brandon: That sounds like a plan.
Felipe: No, it was terrible. I gained like 30 pounds. I mean it was, it was terrible. I didn’t realize what God was doing in my life though because in while I was pursuing like this goal that I had of a police officer and like doing all this stuff. You can kind of see real estate in my background. Like I did the mobile home thing. I got my first single-family home.
Like you can kind of and you’ll start seeing it slowly play out. I was focused on that and then after, during well let me backtrack one. I do have one backtrack so in there I actually bought another mobile home and we’ll talk about that in my deep dive. Remind me to talk about that.
Felipe: I have another mobile home during I had my house in Laverne. I bought another mobile home after I had sold the original one for the down payment on my single family home.
Felipe: Do you guys keep up on that? Yes. Okay.
Felipe: I got another. I ended up with just one mobile home and a single-family home and I’ll talk about the other one in my Deal Deep Dive. Anyways, I was at the other company after college and I hated it. Man I gained like 30 pounds. I was sitting at a desk all day.
It was terrible. I did not enjoy it at all. I was like this isn’t the way to go. I got to figure something else out. During this time, I met my wife and she owned a townhome so or I have my single-family home. Me and my girlfriend then and now wife. She has a townhome and I have the mobile home so you can see real estate in my background while I’m pursuing something else.
Felipe: Me and her end up getting married. We move in together. We AirBNB her townhome because it’s in Nashville by the airport. Nashville as you know blowing up like everyone else I’m assuming. Oh AirBNB is just taking off so we AirBNB her house.
We live in my master. AirBNB one room, rent to Victor the painter and have the other mobile home renting as well.
Brandon: All right so I need to jump in here so I hear a lot of people say and you can’t, my wife would never let me house hack or I would house hack, but you know I rented a bedroom or whatever, but my wife just would not let you. What do think made her okay with that idea of getting started that way.
Felipe: Of getting started that way. I mean she saw the potential in it right away when we’re renting, when I was renting one room a month for $400 or getting $1,600 in AirBNB for that same month. I was like man, this is not where it’s at. Like AirBNB is the way to go. She saw the money. I mean and she believed in me and saw and she you know agreed with my leadership and she was like I get it.
Like you read all these books and you understand everything that you’re doing. You come at me with facts. You’re not coming at me with maybes or ifs or buts. Like you have history with this. I think that’s why she agreed.
Brandon: Yes, that’s cool. All right so one more question then before we move on. Mobile homes, I’m sure we’ll talk about it a little bit more lately later. In fact, the deal that Felipe and I are working on together is trying to buy a mobile home park, but I want to talk about. I mean mobile homes, like you actually bought a mobile home that you then are paying a lot of rent to somebody.
Like a lot of people just look at that and they go wait what? Like I heard those are horrible investments. I heard they just go down in value. Yes, why would you buy a mobile home? Honestly, you weren’t like you know the top-notch investor already then.
Felipe: No, I just had one so the reason.
Felipe: I bought it was because I realized because remember I was in college and I had a renter in one who paid everything so I came home and lived for free in Nashville. No one lives for free in Nashville and so what I do is I bought the mobile home and this will kind of get into how I do my real estate now. I rented out each room single to the construction workers that work in Nashville so Nashville is having a boom, but everyone forgets that there is a bunch of construction guys that have to make that happen. What’s going on is these guys come from other states and they come to Nashville and these big old companies who will rent out almost full hotels, which is why hotels’ prices go up.
Which is why AirBNB goes up. Anyways, you can see kind of how that works, but these construction guys sometimes can take a thousand dollar by out a month and go rent rooms. They get on Facebook, Craigslist, whatever and they’ll say, “Hey I’m looking for a room for $400- $500 whatever bucks.” Because they are making $500 on the other end because they’re getting a thousand dollars a month.
Felipe: I would rent out each mobile home room for about $400- $500. A lot fee is $350. Do the math.
Brandon: Yes. Yes, that’s awesome.
Felipe: I know it was an easy, it was an easy. I mean I would go by one for $10 grand and I’m renting it out for $1,400.
Brandon: Yes, okay. That’s fantastic. All right, so you had the townhouse. You’ve got the mobile home and then you’ve got the single-family house that you lived in.
Brandon: When you rented the bedroom and AirBNB.
Felipe: Correct so then all right. Going from there we got married, we decided to sell her townhome to buy another single-family to AirBNB.
Felipe: We said, “Okay awesome so we don’t have kids at this point.” We sold her townhome, made I don’t know maybe $15 grand on this sale. I mean nothing crazy. We put $10,000 towards the our next single-family where we were living at now and we lived in the master and AirBNB-ed three rooms plus the bonus room. It was crazy.
We were making a killing. We would make seven- $800 per room a month and then maybe an extra $1,500 in the bonus room. We had people who are just in and out, in and out, in and out, in and out. We both worked full-time jobs so I mean we didn’t really ever see anybody. We put a little code on the door, in and out.
I had a camera by the front door to see when they check in, check out. It was fantastic. Most of the people, were people traveling through the airport and needed to stay overnight.
Brandon: Yes, okay. That makes sense. Allright so then what happen next?
Felipe: Sure so after we got into that, into our single-family home that we’re in now. This is where the story gets a little sad so I wanted to be a police officer so bad. I mean it was a dream of mine, born and raised in Nashville, bilingual, college degree. I don’t know what better police officer there is than that. That was my like that was what I wanted to do. Again, bilingual, born and raised in Nashville. I know my city. I wanted to be in Antioch, which is like the rough part of Nashville Hill.
Brandon: Yes, yes, yes.
Felipe: I was like perfect so I finally got into the academy three days into the academy. One of the training officers told me to leave.
Felipe: He told me to leave. I don’t know if I can say this on the podcast, but he basically said we have enough Latino police officers, you’re welcome to leave. I was like, “Oh okay. This is just part of the way they train. This is fantastic.” Like, “I love this.” He’s like drilling me. This is great. Like it was cool and he said, “No, I’m not kidding. You’re going to get a pink slip if you don’t leave. From there I’m going to blacklist you from the police academy to ever come back until I leave.” I was like, “Wait a minute. You’re serious.”
Felipe: After lunch, I came back and I had a pink slip on my desk. Pink slip if you get three, you get booted out, you can’t reapply for five years. I’m sure David knows a little bit about that. They said, “No. You have of pink slip on your desk.” I was like oh fluke. I signed it and I took it and he was like I’m not kidding. I kept thinking it’s just a scare tactic. Is to but, once I realize the legality of that pink slip and I and knew it was serious. I just left and didn’t come back.
Brandon: Oh, yes.
Felipe: Saddest day of my life, cried all the way home.
Brandon: Yes, I was going to say that’s got to be like how do you go from I mean when that took your entire dream in life is to be that police officer like I don’t know. What’s going through your head then? Do you think in right away hey I’m just going to go do real estate instead?
Felipe: No, heck no. I was depressed for–not depressed, but yes, I mean I was just down. I don’t know what depression feels like, but it yes I think that was the closest I’ve ever been to that. It was terrible guys. Again, three years of college. I did a four-year degree in three years because I couldn’t. I mean that’s how I am. I couldn’t wait to get to being a police officer. It was like life dream to do that. It was just until now.
David: Well I think there’s something to this that I think there’s a lot of value that listeners can get out of it because we’ve all known what it’s like to be really excited about something and get like the wind knocked out of you. That’s what that is. Right like you are geared up, you’ve been training for this thing for like you know God knows how long. You show up and then something beyond your control happens and you realize it’s not going to happen right now. How did you rally together to not quit and use that as an excuse to get into you know alcoholism or other kind of like self pity behavior instead it sounds like you came back and you made something happen that was pretty special. How did you process that information so that you didn’t quit?
Felipe: Sure so that’s an excellent question. I love that you asked that. That’s why you’re on the show. I love it. See so I had one or two options.
I was either going to do what you just so all it is you’re going to go become a drunk or just really get into my self-pity or get down. The way I got over it and this is why still have respect for this Police Department. I just accepted the fact that I was not what they were looking for. I have to be okay with that because knowing that someone was better and I am okay with that. I had to say okay.
They saw something in me or didn’t see something in me that didn’t allow me to earn my badge and I’m okay with that. That’s your answer. Like that’s how I got through it daily. I just told myself I have to respect that they know what they’re doing and I am not. That’s it.
David: I think that’s. That’s powerful just right there because it was probably very tempting to be like these guys don’t know what they’re missing out on. I’m so great. Like it’s their loss and now I’m just going to go party or I’m just going to go back to human resources or whatever and I’m just going to let the bitterness towards them carry me through. Instead it sounds like you just accepted it really fast. Like Brandon and I have a friend, Hal Elrod and he has saying that he wrote the book The Miracle Morning. Really inspirational guy and he always says if you can’t change it then why dwell on it?
Right so he’ll give himself what like five minutes or so to just rant and rave and scream at the world and get it all out. At a certain point just take a deep breath, you’re like alright well I can’t change it. Let me not be overcome with bitterness. Let me just say hey maybe it wasn’t in the cards. Maybe I’m not what that department is looking for. Maybe this isn’t the right time for me. What can I do and you took all that energy and instead of focusing on something negative you redirected it to your next pursuit right?
Felipe: That’s exactly right in Spanish we have a saying, “El que se no ha pierde.” Which means the guy that gets mad is going to lose. I wasn’t going to be a loser. I wasn’t going to be the guy that lost and I just accepted it that was it quick? I wish I could say it was. It took a little time.
To this day I can get sour about it. You can hear it in my voice, but I know. I know that I know that I know that I know that I’m on the path that I’m supposed to be on now and I told you. You heard some of my story like real estate was always in my background.
I just, my vision was somewhere else and I felt like the Lord was leading me this way and I just wasn’t paying attention to that. Like I should have oh my gosh I can’t imagine if I had put in the effort that I put in to be a police officer into real estate. Brandon, I’d be sitting beside you in Hawaii. If I.
Brandon: That’s funny.
Felipe: If I put that much effort seriously guys. Like I put in.
Felipe: A lot of effort into doing that. That’s what my conclusion was. They saw something in me or didn’t see something in me that a police officer needed and I find comfort in that. That’s it. Like I just I just find comfort in that that now I can see it. I get to spend all day long with my son if I want to or I go out and do real estate stuff or flip homes or whatever and we’ll talk more about that in a minute, but.
Felipe: Being a police officer I wouldn’t have had that time. David, do you agree?
David: No, you don’t have any time at all.
David: I mean and not only do not have time, but you don’t have anything left in your brain to think about the stuff we talk about right now because you’re constantly trying to turn yourself into this like perfect machine of part lawyer and part warrior and all the stuff that goes into being a police officer. I think that what I love about your story the most is that the piece that you felt like you were missing that as a man probably made you feel like a loser. That’s what no guy want to hear. You’re not good enough we don’t want you. I mean that’s like straight to your soul the worst thing you could hear right.
The piece that you felt like you were missing that could have lead many people to quit is actually what allows you to be very successful in what you’re doing right now. Right and I don’t know what that piece is yet because we’re just meeting each other and I’m sure were going to talk about it more, but that’s kind of what I want to get into is what do you think you learned that like well I don’t have that so this isn’t going to work, but because I’m built this way it’s allowed me two excel like this. All the listeners can hear oh that’s why he’s successful. Because he’s got this thing and then maybe if they’ve got also they could bring it out of themselves.
Felipe: Sure. It’s an opportunity that I missed, which is now why I am successful and that’s my know why. My know why is okay I’ll accept your no, but why and if I feel like I’m going to pursue that then I need to know what and like why is it so if you’re like no you can’t be a basketball player because you’re not six five and can dunk. I’m like there is my why, but there’s a no, but I also have my why and you can translate that into real estate when I go to the bank and they’re no, you can’t get a loan. Well why?
Because you haven’t worked two years and da da da and then the list goes on and on. I’m like okay so that’s my know why know, why. If I get a no I’m asking you why and I think I missed that opportunity as a police officer where I could have asked okay that’s fine. I get it, but why? Oh well.
Brandon: Yes and the.
Felipe: Da da da da.
David: The reason we don’t ask is because we’re kind of afraid that they’re going to give us an answer that’s going to cut even deeper. Like maybe you don’t want to hear someone tells you well it’s because your too soft or well it’s because whatever right. What you’re showing is if you’re willing to walk that path and to the party you were you’re most afraid that’s where the reward is. Right because you did ask that question when it came to real estate and boom you’re successful.
Felipe: Oh my gosh exactly right. I think success is like and it’s so cliché, but success is definitely on the other side of your fear. If I would have just asked why he maybe would have said well this is just one pink slip. Maybe you were supposed to come back. Maybe that was the answer. You know I have all these whys that I didn’t get answer and that will never happen again. I tell people that I have failed and one thing in life and it was it was the police officer thing and I didn’t ask why. That’s why I failed. I didn’t fail because they told me to leave. I failed because I didn’t ask why.
Brandon: Yes, yes.
Felipe: But know why.
Brandon: I feel like there’s a book in your future called The Know Why Principle.
Felipe: There might be.
Brandon: Like David and I are all about like putting like frameworks around certain things. Like the fact that you did that like this like the know why. Like you know no yes. Like you I can’t get a loan. Why? Like no you can’t invest in real estate. Why? Like it’s like it’s all you’re asking that why thing and that does separate people who are who never get anywhere. Yes, I love that. The Know Why Principle. We’re definitely going to make that a thing.
Felipe: People stop at no and don’t ask why and that’s.
Felipe: The answer to everything. No, but why and then go from there.
Brandon: You know what’s sad is when you get to the other side of it you realize how simple that why usually is. Right?
Felipe: I honestly believe that he would have told me this is a pink slip. If you would have came back, you would have been okay.
Felipe: I believe in the heart of hearts and I know that I’m supposed to be doing something else now, but if I would’ve said why or got an answer I bet. If I was a betting man I would say that he would have said it was just a test to see if you were grit through it.
David: Well we—Brandon and I just interviewed Ben Kinney not too long ago and he buys a lot of companies and he’s a buddy of mine and he’s told me several stories. If you made an offer on a company then the person said, “No.” He said, “Okay, why?”
David: Well because I don’t know what I would do if I didn’t have the company. I don’t really want to work here, but what else would I do with my life? They’d be like well what do you want to do? I want to retire with my family. What if I gave you enough money every year you can retire with your family and I’ll just take care of the company. Oh I would do that. It was like literally that simple right. When Brandon worked at a bank people come in, they say can I get a loan? No. Okay and they slink away and they real estate is terrible. Bankers are horrible, but if they had just said why.
Felipe: You asked Brandon Turner why.
David: Well you have too much debt. Pay off this credit card and you can get a loan. Oh that’s all I got to do? Then what you learned in the process of paying off your debt will probably serve you when you get into the next phase of your life.
You got more discipline, you’ve got more focus, and so yes I think that’s a great great point just in general. To point out to our listeners that like having the guts to ask that why is one of the things that makes successful people successful and then it becomes like an addicting habit. You hang around with Brandon and he’s asking that question for like everything. Everything, we go somewhere and he’s like, “Can I get the hamburger?” They say we don’t have any hamburgers. He’s like why? He’s like well we didn’t order enough this week. He’s like oh.
David: How many guests do you get? How many burgers are you selling and like he goes into this really long yes. Like he fixed their business problem.
Brandon: I don’t think I’m that bad.
Felipe: Yes, yes.
Felipe: I relate, I relate, but so.
David: He’s that good.
Felipe: That’s what happened. I didn’t get into the police department or I got three days in and they asked me to leave. Then from there I kind of went on to an entrepreneur. I said I’m working for myself. I’m going to do this on my own.
I’m going to figure it out. I didn’t have anything else to do. From there, I started just I think I went like Ubered for like three months or something while I got my head back together and then I started working on construction sites cleaning, cleaning the construction sites and just like just kind of like wishy-washy trying to figure out what I wanted to do, but real estate was always there so I was like okay so I’m going to buy another rental property and then like let’s say I quit my job and like two months later I was at the bank asking for a loan. They were like no and I was like why?
Like because you there it is again. Sorry, the know why. I was like. They were like no I was like well why and they were like well you haven’t been self-employed for two years and I was like I quit three months ago. There were like sorry. I was like no.
Felipe: Why did I quit? No so I started an LLC just like a handyman LLC, very general and then I started working on my two years and I call those my terrible twos. I have a 16 month old son. I’m going to get to eventually there I guess.
Felipe: I call those my terrible twos because I read tons of books. Some of my favorites are back there. You can see it, but I just read tons of real estate books. That’s how I came across BiggerPockets and that’s I just got tons of knowledge. Just tons and tons and tons and tons of knowledge on real estate and I was like itching for a deal.
I was just like oh my gosh and the banks were like no. I didn’t know about hard money and if I did I didn’t want to do it because in my life that’s not what I wanted to do. Like I knew all these little bits of how to get money, but that’s not what I wanted to do. For some of the listeners I would tell them that that’s okay. You don’t have to use Brandon Turner or David or everyone else’s you know gimmicks or whatever to get real estate.
Felipe: Do what works for you, where you’re at, how you’re at, what stage in life you’re doing. I mean do. I’m married and I had you know back then I had a three month old and just hard money and that kind of stuff didn’t work for me because I didn’t have time to build those relationships with people. For me it was all about making sure that I could provide for my family while still trying to get these two years put in. What I did I just saved a bunch of money. I read every single book that I could get my hands on, everything and then I was starting to come up on my two years and I don’t advise this for everyone, but what I did was I was itching so hard for a deal that I bought a condo cash during those two years.
Felipe: Because I couldn’t get money. I was like I’m not going to have my money sit in the bank. I put in a condo, which I know you guys don’t like prefer, but I really really looked into. I had the renter before I had the property. I had, I mean I did a lot of research before I bought it and I was like I’m only going to sit on it for a year. I’m going to have my money sit there instead of the bank. I’m going to get a better return so that’s how I did it, setting myself up knowing that when my two years were up I was going to go big or go home. Like I’m going to buy the biggest thing that I can assuming my two years were up.
Brandon: Okay so I love that a lot of people go through this phase so let me backtrack here a second. Scott Trench and I talk a lot about this. Scott Trench is the current CEO of BiggerPockets right after Josh kind of we’ll call it retired. Scott stepped up as kind of the CTO or a CEO. He is running it in Denver anyway. Scott and I talk a lot about this, but why do people come to BiggerPockets?
Then get really excited and maybe they buy some books. They join the pro membership, whatever and then they disappear for years and then maybe some of them come back later, but there’s this common thing, which happens is people come. They’re excited and then they go away. We call it the dip oftentimes. It’s like this isn’t just real estate. It’s all business and like the thing that we’ve determined is that people jump in and then they realize this is harder than it looks.
Oh I can’t get a loan quite yet and so what they do is a lot of people just stop. They give up. They stop reading the books. They stop going to like you know like trying, they stop saving money. They just say I can’t do this right now therefore I am done.
Felipe: They’ve never been told no. I’m so sorry to cut you off.
Brandon: Yes. Yes go ahead.
Felipe: I know those people. They’ve never been told no. They’ve never been told it’s going to be hard. They’ve never been told you’re not good enough to become a police officer. They’ve never been given an obstacle you know. That that.
Brandon: They give up.
Felipe: They give up.
Felipe: Then that’s and they don’t understand that all they have to do is why.
Felipe: They get a know and they don’t ask why. That’s it.
Brandon: That’s powerful right so I love that you were like you asked the why. You learned you needed two years. Great you went and built a company so you could have the two-years like who does.
Brandon: During that time during that time you worked on like learning how it’s done and analyzing deals and making connections and doing everything like sharpening. You know the whole if I had six hours to chop down a tree I’d spend the first four sharpening my axe.
Felipe: Sharpening my axe, yes.
Brandon: You spent your terrible twos sharpening your axe so that way.
Felipe: I worked on the construction sites with headphones on listening to every single one of your Pockets, every single one of your podcasts. Brandon, I know your voice like the back of my hand. Oh my gosh.
Brandon: That’s awesome.
Felipe: I’ve listened to every one of your podcasts on the construction site.
Brandon: I’m so sorry. I’m so sorry.
Felipe: It’s okay. You know people ask me how do I fund my deals. Well working and that’s what I did so for my first two years I would be on the construction site with another college education listening to my podcast, picking up sticks with a college degree hanging in my house. It wasn’t because I couldn’t go get a job.
It was because I knew that there was something different that I wanted in my life. People would criticize, I got a crazy story where a guy that knew my mom would say look you sent your son to school. My mom paid for my college cash. Let me throw that out there.
Felipe: My mom paid for my college cash cleaning houses. It blows my mind to this day. He would say, “Look your son’s out there you know picking up sticks. He’s got a college degree.
I thought you told us he was going to you know do this that and the other.” She was like, “He knows what he’s doing.” Like just just he knows what he’s doing and I’m not going to bug him. I’ve given him the rod. Remember, my mobile home.
Felipe: He’s going to do fine and she was right. I actually have a deal with her right now. I can talk about that later.
Brandon: That’s cool. In other words like what I see is like you weren’t afraid of hard work and I think the picking up sticks like who cares. Like there’s this like entitled mentality sometimes. I mean I’m going to get some backlash saying this, but like I got a college degree. I’m not going to go work that. Like I’ve got friends and family who you know they got a college degree so they would never catch themselves working at a construction site or doing anything that’s physical labor or whatever right because they got a college degree so instead they just stay unemployed for a long long time or take a job they don’t like and can’t get ahead in life because they don’t want to work hard because they got a college degree and that means you don’t have to work hard apparently.
Felipe: That’s exactly true. There is a lady that’s been asking my mom for a work for about a year. My mom is like yes, come clean houses with me. She just won’t do it.
Felipe: She won’t do it because she has a college degree. She’s like I’ll help you run your business. I’ll do this and like no just come clean houses with me. You’ll make a hundred dollars a day.
Felipe: You’ll be fine until you find what you want and she won’t do it.
Felipe: Because of that.
Brandon: Yes, there’s like I mean. Yes, I got a college degree and then afterwards I went and worked at like. I mean a number of different places, but like for awhile there even when I quit my job I worked at a bank it was horrible. I went and like did construction work where I had to climb under houses.
Like I remember I spent three or four days under a house that was like eight inches of clearance. Like I mean I was on my face in the dirt putting insulation up like getting the fills in my lungs and I’m going to die 10 years earlier now and like I needed, I did what I had to do and it was like yes. Like I had to do it. At that point like it was partially relationship building and yes I could have outsourced more things and on better there, but like.
Felipe: You know what though Brandon? I want to ask. I wonder how much resolve was built up during that period of time in your life where you subconsciously were just like if I ever get a chance do not do this, I’m never going to let it go.
David: So that when obstacles come your way that other people would quit at your you don’t even think about it. You just know this isn’t that bad because I’m not sticking insulation up with 8 inches of clearance right. Like and that’s just something people don’t talk about. Like yes, I was a police officer, but I don’t talk often about the fact that I had to apply at 11 departments before I finally got hired.
Felipe: That’s exactly true.
David: It was like all day long going on the Internet, looking to see who’s hiring, filling out hours worth of applications, showing up for oral board, showing up to take tests, showing up to take physical tests, showing up to interview, showing up to interview with a different person.
Felipe: People don’t know that.
David: Yes, it’s insane and there’s like three or four months of time in between every single one of those tests right and then I got turned down for all kinds of stuff. I had too many speeding tickets. I didn’t get in enough fights. I had it, I didn’t have enough like what they called life experience. Like I hadn’t been drunk or high enough times and they thought the job of being a cop would like break me because it was just too hard.
Right, my GPA was too high in college. I got too good of grades to be a cop or like then there was the other side. Like well you seem like you’re super into athletics and we want someone who’s going to be committed to the department so I don’t know if you would be able to do this and pursue some of your other things. It was just constantly being told no, no, no, all the time and during that period of time you just build up this resolve to push through that that when you finally get your chance you know you’re not going to let it go.
When I got in the academy I went into like an animal. Right I was just so prepared for what I was going to get into, but we don’t consciously sit there and think oh I’m just going to go do this. It happens during that struggle phase and I know there’s people that are listening do this right now that are driving like a forklift or well maybe you shouldn’t be listening to this while driving forklifts, but doing some kind of manual labor that they don’t love thinking when am I going to break through. This phase of your life is what’s setting you up so that when that shot does come you take advantage of it when the next guy lets it pass.
Felipe: Yes, that’s exactly right. I also applied for so many police departments. I can’t even remember how many oral boards I went to. How many questionnaires I went through. How many physicals I went through. The same thing, he’s not kidding.
They’ll ask you the weirdest questions they’ll be like oh what do you do if you weren’t a police officer? I’m like this. Well why don’t you go do that? Because that’s not dude. Well like yes they would ask like you know have you ever smoked pot? I’m like no and they’re like well we’re looking for someone that at least understands that. I’m like that’s illegal. Like what.
Felipe: That doesn’t even make sense. They’re not, they’re serious and I was like oh my gosh okay. Yes, so like he said when I got in I was gung ho. I mean I was going to do it, which made it just that much more harder.
David: I don’t think we’ve asked you. Tell us where’s your portfolio at now?
Felipe: Okay so I have a sixplex, four single families, and a flip right now.
David: Then how much income would you say they’re generating a month?
Felipe: Each one is way different so like my sixplex.
David: I mean in total, your whole portfolio.
Felipe: $4,500 oh gosh I wasn’t ready for that question. I mean I can go through them so like my sixplex easily does $1,200- $1,300 depending on you know what like during the winter we don’t have cutting the grass and things like that. Then I have a single-family home that also does about $1,500 a month and I’ll explain why it can do that versus because I don’t rent the whole house out. I really want to talk about that too like I rent.
Felipe: All my single-families I rent out per room so I’ll explain all that as well. Then I have mobile homes that rent out differently as well.
Brandon: Let’s go there next. I mean first of all so you don’t have I asked you this earlier. You do not have a full-time job right now. I mean you were able to, you have the handyman. Are you still doing handyman stuff or are you still?
Felipe: The handyman became a moving labor only company so people will rent trucks and my guys we’ll go out and load and unload.
Brandon: Okay, but you’re not actually doing that physical labor anymore.
Felipe: I mean sometimes if I want to go out.
Felipe: If I’m missing a guy or something if somebody calls.
Felipe: In sick I’ll go do it. I’m not opposed to work so if the guy is like.
Felipe: Hey man can I? I want to spend time with my kid. Heck yes dude I got you.
Felipe: I’ll go in and unload the truck if I have to, but no typically no.
Brandon: Okay so and you don’t have another job so you’re able to like I mean we could call that like and we need a better word for this. There’s like financial freedom and then there’s like whatever the, which I would call that financial.
Felipe: Let me answer. Let me answer this.
Brandon: Independence. Go ahead please.
Felipe: Really quick. If I wanted to.
Felipe: I could sit in here the rest of my life. I would be okay.
Brandon: Yes so I would call that financial independence. Yes.
David: Yes. That’s the point I was trying to get at.
David: Is you went through that garbage so that now if you wanted you could be retired at this point. Your financial independence.
Felipe: I’m 28 years old.
David: Now you don’t have what Brandon and I would say is like. Like FU money.
Brandon: Level two. Yes like I call it level one level two there’s like.
Felipe: I’m level one.
David: That’s a nicer way to say it.
David: Yes. that’s awesome right because like.
David: And this is all from someone who thought that his story was over before it even started.
David: As you’re just getting started in this real estate journey you’re already at that point and that’s how powerful real estate is. That’s our power.
Felipe: Yes, I live for free. I’m in Nashville and yes I definitely live for free. Me and my wife talk about it almost every night how blessed we are that we don’t have bills.
Felipe: At all. It would have buy my wife’s Lexus when we had our baby cash. Good.
Felipe: Because I don’t have bills. Everyone is like well how do you save so much? I’m like because I don’t pay a mortgage and I don’t pay.
Felipe: The light bill and I don’t. Because I don’t all the money I make literally goes into my savings account.
Brandon: Yes, that’s amazing.
Felipe: Like it’s the craziest thing to walk into the bank and the ladies are like oh hey how are you doing? Oh Mr. Mejia. Like as soon as everything else.
Felipe: It’s because of that I’ve been able to build that so yes, I don’t have to work if I don’t want to.
Brandon: How long has this been going? I mean like give us an idea of the timeframe from like let’s say the cop thing when that failed and you started how long?
Felipe: Two years, two years.
Brandon: Two years. You’ve done all this in two years? Yes, amazing. All right so incredible.
Felipe: Yes, it just took two years. After that two years I’m going on my fourth year now so my third-year is when I was financially.
Felipe: Done working. I mean I was my real estate really just holds me up.
Brandon: That’s amazing. Okay so you’re flipping houses. You said you have a flip going right now so.
Brandon: Let’s talk about that. What does your flipping strategy look like compared to your rentals? Why you choose one over the another? What is that like?
Felipe: Sure so I’ll go into it. My flips buy my rentals so most people will flip a house, buy a car. I flip a house, buy a rental. That way I don’t, again I don’t work even for my rentals. Like my flips do that for me. My goal was always to have everything paid off by something else.
My rentals feed my life, my flips feed my rentals and it’s just a continual thing there. Like I’m flipping a house in my first BRRRR right now that we but for $75,000 cash and we’re probably going to sell it for $220- $225 easy. That’s if we just want to be like open house and you know best best person gets the house. My rental properties in like the very first six, the very first rental that I bought was a sixplex in Cookeville, Tennessee. That was like three months after my two years went up. Because I had all this money saved up, because I hadn’t spent anything for two years because I was like I want to get into this rental thing.
Felipe: The moment that my two years were up and the bank would let me borrow money, I went and bought the biggest thing that I could afford and that was a six unit apartment complex.
Brandon: That’s great. Well.
Brandon: What have you learned? What do you learn on the six unit because some people have a lot of luck with those. That kind of that medium like the small multi families that are larger than the residential. Some people love them, some people hate them. What have you found?
Felipe: They pay my mortgage.
Felipe: I don’t care if they call me and say, “Hey the toilet is out.” Cool. I got a guy in Cookeville that will fix it. Every month that unit pays off all my mortgage completely so I’m literally just answering calls to make sure that everything there gets taken care of. I have somebody there that takes care of everything. I can go do it if I want, if I don’t feel like calling him or paying the guy for that month or whatever.
I can go out and do it, but most of the time I just have my guy out there who does all the work for me. It’s not, I don’t think that’s any harder or any different than how I manage my other properties because for instance I have single-family homes and this is what I do with those. This is my strategy with. Is that okay to answer on that?
Brandon: Yes, you’re right please. I was actually just going to ask you that so.
Felipe: Cool so my strategy with my so the sixplex is simple. You rent it out to anybody there. It’s just really cut and dry. It’s really simple. My single family homes are pretty cool. This is going to be awesome so what I do is I buy single-family homes in Nashville that have a giant two car garage under the house.
That’s how a lot of houses here are built. They have four bedrooms upstairs, two bath and then giant two-car garage on the bottom. What I do is I go there and then I build four bedrooms downstairs. Now I either have four or now I either have seven or eight bedrooms and I rent them.
Felipe: Individually out. Two, the construction workers that live that worked in Nashville so what happens is these—this boom that’s going on brings in a lot of construction guys. They want to get some of that money so the company pays them a thousand a month to go find a house or wherever. They pay me $500 a room to live in this place. They work 12- 13 hours a day. They work seven to seven. They come home have dinner, eat, sleep. Do the next day again.
Felipe: Every single one of my rooms rents for let’s say anywhere between four and $500 bucks. You have eight rooms, do the math. I just I constantly do that with single-family homes. I put, it gets down to like.
Brandon: That’s cool.
Felipe: $15 maybe $18,000 to build the whole downstairs, but now I’ve converted a single-family home into a duplex. Now I have the top and the bottom rented out and usually they’re all friends too because they so one guy gets a room. He takes all his buddies hey come live in here. You need to make $500 more a month or a week.
Felipe: Or I’m sorry a month and they all and then if one leaves he tells next guy, “Hey I’m leaving. If you want the room.” Boom so I rarely do advertising on any of my rentals.
Brandon: That so cool. All right so I want to dig in a little bit deeper on this on this topic.
Brandon: And talk about some of the pros and cons of it.
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All right so let’s get back to this. You are basically taking these single family houses.
Brandon: You’re adding another level. You’re taking the garage or basement or whatever you want to call it, turn it into a more bedrooms, which then now you can rent out by the bedroom which is super cool. Now you’re dealing with roommate situations. You’re dealing with people who are you know like I don’t want to, I don’t want to like stereotype, but like probably single men who aren’t always the cleanest. Right like I’ve rented to a lot of roommate situations. My infamous toilet story was.
Brandon: To four roommates.
David: That’s terrible.
Brandon: That lived in a.
Felipe: I laugh every time you. I wish somebody had videoed that. That would be fantastic.
Brandon: No you don’t. Tell me about like what’s it been like? What have you found that works.
Felipe: What’s the hardest thing with it?
Brandon: Yes, what’s hard about it? What works? What have you found that helps you?
Felipe: Sure so the hardest thing with that is actually everything is paid in cash. Look at that real estate problem is cash.
Brandon: Yes, yes.
Felipe: They always end up calling me to come pick up cash. That’s what I do. I just go and pay with cash, but like I said most of them are friends. They will call each other to you know hey I got a house with three rooms. All their buddies come in and they’re not messy because they don’t kind of have the time to be if that makes sense? Because they’re all construction workers. They literally like I said have dinner, shower, do it all over again.
Felipe: The biggest thing that I have is maybe the kitchen gets a little messy, but that’s okay and then most of these guys have like sleeping bags or they don’t even have furniture. Because like I said they’re only here on a one year contract or whatever so they go out and buy a mattress or two and a TV. Like that’s it.
Felipe: I don’t have laundry rooms. I don’t have anything like that. They have to go and do their own laundry somewhere else and another key factor in that is a lot of these guys can’t go out and get apartments because they’re construction workers. Most of them don’t have the documentation they need to go pull I don’t know a lease in an apartment or they’re not going to be here long enough or whatever the case may be so a lot of times they’re just going to get kicked out.
They’re super respectful. They call me to pick up rent. If there’s any problems they’re like, “Hey sir. You know there’s an issue.” They’re like real conscious about it. They tell me immediately so it’s fine. It works out great. Someone asked me once like is it hard?
Is it and I’m like no. It’s not at all actually. It’s really really easy. They don’t feel entitled by any means.
They know look they’re not stupid. They know that they’re in this country undocumented. It’s not to get political, but they know it’s wrong. They are very self-conscious. I mean like they come in. They’re quiet. They’re not trying to stir anything up. They’re trying to get enough many to make sure their family has food to eat that month and I’m not going to kick you out because of that.
Felipe: They’re awesome. They are my favorite tenants to be honest. Cash, Hispanic guys that pay cash single. Go construction work all day. Come back, sleep. That’s great.
Brandon: Yes. Yes, I had a number of tenants who paid cash when I first took over. Like my when I first got started whenever and I would go pick up cash. I shifted eventually over to something. I don’t even know if it’s still around for everyone else. I heard that they shifted, but it was called like PayoneerMe. I think it’s still around, anyway PayoneerMe basically all my cash trans now just go to 711 down the street.
Brandon: They pay cash at 711. That way I don’t have to actually physically deal with it so there was that as well. Something to throw at you because like people are actually shocked that like why I don’t like especially early on like I didn’t take rent. We don’t really have like an easy way to pay rent online. I was like because half of my tenants don’t have bank accounts. Like what are they.
Brandon: How are they going to pay it online? They don’t have a bank account. That blows people’s minds. Like why don’t I use like there’s some like great software out there like Cosi is a fantastic program.
Felipe: Yes, I’ve seen all that and most of these guys don’t like you said don’t have bank accounts because they.
Brandon: Bank accounts or computers.
Felipe: Or exactly or computers.
Felipe: What I’ve done as I’ve always noticed that there is like a crew leader that lives in the house. Who is the crew leader on the construction site who collects all my rents, who I meet at the taco shop.
Felipe: Or at the gas station or whatever and then pick up all the money. He handles the house basically if you will because he’s the construction leader.
Felipe: When he gets home things don’t really change.
Felipe: They usually end up knowing that guy pretty good.
Brandon: What’s so cool about this is like a lot of people are probably listening to this right now going oh my gosh. I would never do that. I couldn’t rent by the room. I don’t want to pick up rent. I want to meet people right.
Brandon: But other people are listening to this going I’m working a crap nine to five job in an HR Department right now. This sounds so much better than what I’m doing.
Felipe: Yes. It’s construction gets cash.
Brandon: He did it in a couple of years.
Brandon: Yes like.
Felipe: Two years.
Brandon: Who cares like you know like it’s just there so many ways to invest in real estate and so many different strategies that work for different people. This works perfect for you and I love that.
David: I wanted to point out what Felipe is doing is he is solving a problem.
David: That nobody else wants to solve other than a hotel.
David: These guys need a place to stay. They don’t have a bank account. They’re ideal tenants, but it’s tough for them because they can’t spend $200 a night on the hotel room right. You’ve solved that problem for them. Now in solving that problem, you created a fewer smaller problems for yourself. How am I going to collect the rent? How am I going to manage these guys? Right? I don’t want to have to.
Felipe: How am I going to pick up cash?
David: Yes, how am I going to go create money right? You’re also showing a lot of those problems take care of themselves. The guy who runs a cruise at work, runs a cruise at the house. I’m really only dealing with one person who deals with the other five right?
Like that’s the same way corporations are structured for a purpose right? They don’t want to manage 300 people. They manage one guy who manages five and then five of those guys get managed by another guy and you create this hierarchy right. As you were talking I’m thinking about if I was to do what you were doing how would it look and one of the things that keeps popping is this AirBNB thing definitely will help you generate more income, but it creates a little bit more work.
You’ve got more turn over. You have to clean things more often. You have to reset things so I would imagine you have to have somebody who is assisting with some of the logistics as well as some of the bookkeeping is that so.
Felipe: Oh I love that you ask that because I hadn’t even thought about telling this, but yes so listening to your podcast I’m mixing the processes that you guys talk about a lot and then kind of my Latino heritage if you will so like let me go back. Okay this construction guys also fix a lot of things in the house because they’re construction guys. Like they fix a lot of stuff. Like they rarely call me for stuff. I’d come home and like the whole place is painted.
I’m like oh. That was really nice of you guys. Thank you because I get bored so I still do do AirBNB in a couple of my single-family homes. I’ve got into a cool process where someone handles that for me. I pay a young lady to handle on my AirBNB interactions and I don’t have to worry about it anymore. Eventually, I’ll probably hire her to go pick up my rent as well. I just have to, I’m in that process. I love that I’m doing this podcast because a lot of times when I listen to you guys, people are like way ahead on step like 20 and I’m still on step four or five and I think a lot of your listeners will be like oh okay cool so I’m like he’s only two years into this.
Felipe: It’s doable.
Felipe: I’m like yes.
David: It gets.
Felipe: It really is.
David: You got to solve the steps that you’re working on at four and five before you can get to 20. It’s really that simple right and for the people that are thinking I don’t want to pay somebody to do that work. That’s cutting into my bottom line. You’re not. Your investment is paying them. Your buildings is paying them.
The rent you’re generating is paying that person’s salary and then some and you’re able to generate their salary because you’re doing an AirBNB, which is a way that requires you to have help. Right? That’s just one of these principles of business that you want to understand is if I can do it this way and it’s four times as profitable, but it’s only twice as much work well I’d take half of that money and I dedicate it towards paying somebody to do it and I’m still making twice as much as I would have been right? That’s just a smart way to run a business and you’re doing this at successfully at a level that in my guess Felipe will be very small compared to where you are in five or 10 years. Because you’ve learned these principles at step two-three-four that you’ll then be able to apply when you’re doing this with like 200 unit complexes.
Our buddy Andrew Cushman is very similar to what you’re doing. He’s just doing it with like 300 unit apartments right? He’s analyzing all of them. I’ve just been relentlessly beating on this guy. Andrew, if you’re listening, you’re welcome.
To hire an assistant to help set him up to analyze stuff right. Like he’s got to be the one to look at the numbers, but he doesn’t have to be the one to gather and verify all the information. He can have somebody else that does that. Just that one step will probably allow him to close on 3 to 4 times as many properties with the exact same amount of work or less because he’s leveraged something off so.
Real estate is super powerful and when you combine it with just very little fundamental business practices like you’re doing Felipe hiring the right or finding the right kind of tenant. Hiring people to help with some of the stuff you don’t like. It allows you to leave your nine to five a lot quicker than you would think.
Felipe: I think people get stuck on their wage for time. They’re like oh well I wouldn’t pay somebody you know $150 a month to handle AirBNB and do the text messages or talking to the clients or whatever. I’m like well when I looked at it I would spend a lot of time talking to these people where I would be in a bank meeting or I would be talking to you know trying to put together a dealer or something. I got AirBNB coming through and I’m like I feel like I’ve graduated from that. Like I need to really hire this out and I was, but same thing. I was like man $150. That’s a lot of money to pay.
Felipe: I would think that is, but now I’m like oh my gosh. I just bought myself so much time for only.
David: That’s exactly right.
Felipe: Hundred you what I mean?
Felipe: That’s key.
Brandon: One way that I look at this is like let’s say I was going to hire someone to okay I’ll give you a real example. Like I don’t mow my lawn or take care of my landscaping. I could. I like hard work. I actually enjoy landscaping.
Instead I pay a guy and he’s probably making 50 bucks an hour to do my landscaping right. Some people would be like that’s crazy to spend $50 an hour doing landscaping. I’m like no, I’m not paying him $50 to do my landscaping. I am paying myself like I’m paying $50 so I can hang out with my daughter Rosie for an hour, for $50. Is hanging out with Rosie for an hour for $50 worth it? Hundred you know, 100 times right. Yes, I would pay for an hour of time with my daughter it cost me $50 bucks.
Brandon: It’s like shifting that. Like what are you? What’s the opportunity cost?
Felipe: What’s your time worth?
Brandon: What’s your time worth?
Felipe: What are you losing because you’re out there running AirBNB issues?
Felipe: Or if a person is or rent would like my next thing is hire somebody to pick up rents for me. I think I thought would never say that. Like no, I’m going to go pick up my on rent money or I’m going to handle my Venmo or like all this stuff. It’s like no, you hire that out as quick as possible so you can free up your time.
Because that’s the end goal right? We do, everyone does real estate to get their time back. If you just went from one job and then got into real estate and created yourself another job then you didn’t really get out of your job.
Felipe: You have to get comfortable with the real estate covering all that for you. If I’m making an excess of let’s say I make an excess of a thousand dollars a month or more then I’m going to use $150 of that to buy back another day. This is the way I look at it so if I have 30 days in a month or whatever, whatever month it is then I need to find a way to buy back every single one of those days. If one day is took up by AirBNB then I’m going to purchase that out.
If at the end of the month I made zero dollars, but I have all my time back then that I mean that’s worth it to me because I can go build something else and that next thing or whatever the case or something that I love to do that I think people don’t realize how important that is.
Brandon: Yes, that’s powerful stuff. Very cool. I was going to throw one idea at you and again you’ve maybe thought of this before, but it’s an idea. I’ve never done it, but I’ve heard people doing it. For those who like get cash like this if you don’t want to do like a PayoneerMe kind of a situation what some people do is they’ll give their tenant a bank account number because you can deposit money in any bank account. A lot of people don’t know that, but you can go to a bank. You don’t sign to deposit money. You only sign to withdraw money. What I know people will do is they’ll give all their tenants deposit slips and with the account number on there.
Now it could be a different account number that you just transferred the money over that way you don’t have to worry about them knowing your account number, but anyway you give them all like the account number where rent gets deposited and then every tenant gets a different penny number on their rent. If the rent it’s $500 it’s $500 and one cent, $500 and two cents right. Now you know who paid, who dropped. Now you don’t have to deal with it at all. There’s no cost for the tenant. You’re just putting the hassle of having to pick up rent on this cash tenant who then goes to the bank. It has to just go and drop off $500 and one cent.
David: That’s a good idea right.
Brandon: Then you know exactly who paid the.
Felipe: Oh I didn’t think about that.
David: That’s really good.
Brandon: Yes, kind of a cool strategy. There you go. I’ll bill you later. All right, so let’s move on to. Let’s move on to how you’re finding deals in today’s crazy national market. One of the hottest markets in the entire country.
Felipe: So true. I’ve just built a relationship with a good realtor that oh my gosh realtors I think work for free. It’s crazy. I don’t understand how you guys live. Man, she does so much good work for me.
Felipe: She finds personal homes. She finds flips. She knows what I want and her husband does it as well so we work on a lot of stuff together because they both have their licenses so they’re like, “Hey Felipe we should work on this together.” They know that I work hard because they saw me through my two years.
Felipe: They’re the ones who helped me purchase all of my properties and they saw how I hustled for two years. People don’t understand. People are watching you dude. You can say all you want, but people are watching what you’re doing.
Felipe: You can talk the game, I mean you can really talk about it, but if people are watching you. This, my realtor watched me and she saw for my two years me grinding it out and talking about real estate and when I finally bought my first purchase, my first sixplex, she was like, “Oh, he’s about it.” Like okay that makes sense, but then her husband was like hey you worked really hard and you like real estate. Why don’t we flip homes? I was like, let’s do that. Like that makes sense and it was because they saw me work right. I didn’t just talk about it, but I was about it. You know I was about my business and they saw that and that’s why.
Brandon: Yes, that’s amazing. Do you remember earlier I said, “I did that.” I insulated under house for days and like I made like $300 bucks, but I ended up hiring people. I don’t know. Like it was the worst experience right. That was actually my attorney’s house that I did that job for.
Like I did that because like and to today like he sees me as a hard-working, enthusiastic young kid and now like he is willing to put like he’s going to be one of my investors like soon. Like on one of my deals. Like he keeps telling me like bring a deal to me. I want to fund you. Because I built a reputation, somebody who works hard and under that. He did the exact same thing. You work hard, you understand real estate and people are longing for that combination right like.
Felipe: Yes. That’s exactly right. I can bring that value to a lot of people because they know like oh this dude is not scared to work. He’s also got a little bit of change and he’s done real estate deals before and he’s got like you know little stuff behind him, but it’s only two years also. Like I really want your listeners to understand that I’m not Brandon Turner. You know I’m not ten-15 years into the game. I’m two years in and it is doable guys like just pull the trigger like you’ll get it. Just do it.
Brandon: Why do you think when you brought me. I mean like this is a good lesson for everyone here like when you brought me this idea of this mobile home park, you just kind of brought it up to me kind of casually like why would I jump at it with you and not other people who bring. Yes, it leads a lot from a mobile home park. I rarely jump at them. It’s because you’ve proven yourself as somebody who is got the hustle and got the education down.
There’s this thing I talk about in the book on. Well I talk about three different places, but the how to invest in real estate book me and Josh Dorkin wrote. I call it the deal Delta. Basically it says any deal you have to have three things to pull it off. You got to have money, you got to have hustle, and you got to have knowledge.
Those three are required in every deal, but you don’t need to have all of them. In this deal, what I’m hoping is that you’re bringing the hustle and the knowledge. I’m bringing knowledge and I’m bringing the money or at least like well raise the money and we’ll buy this park hopefully and if not this one, will do another one. Right? Because you’ve proven that you have the hustle and the knowledge and when people are out there going I don’t have any money. Who cares? Go out there and prove that you got hustle and knowledge. You’ll do fine.
David: All right, Felipe real quick. Brandon, you’ve said what you look for in Felipe, which is why you’re willing to deal with them. Felipe, what do you look for in a realtor or a partner or someone who’s going to bring you deals.
Felipe: You know, at first my first initial reaction was to tell you someone like myself, but that’s wrong. My business partner that we do flips on is nothing like me. He is—he has money and knowledge and he’s applied that knowledge into wisdom. He has all like I’ve seen it in his past what he does.
He might not be a super super hard worker, but he’s got money and he’s got knowledge and he’s done it slowly in the past. He’ll do when a year. That’s it. He’ll flip one or two properties are year, make a hundred grand and not do one until next year.
I’m like, dude you could do like one every two months. Like what are you doing? That’s why me and him clicked because I can do one. I can do a flip every two or three months. He sees the hustle in me. I saw that he’s done this before. I saw that he has proven that he can do it. He’s proved himself to me by doing it over and over. One or two a year, one or two a year. I’ve just come in and did kind of like what’s that guy with McDonald’s did. I was like dude we can really blow this up. Like this isn’t.
Brandon: Yes. Funny.
Felipe: Like let’s make this process and let’s just make this like a machine boom boom boom knocking it out.
David: I just watched that movie The Founder on Netflix last night.
Felipe: Yes, that one.
David: About the.
Felipe: That’s exactly right.
David: Okay, so what I hear you saying is you were drawn to him because of his knowledge. He knew what he was doing and that’s something that’s very difficult to fake. His track record, it wasn’t just him telling you, “Hey man let’s go do this.” You could look back and you could see he has been doing this right? Then maybe his sense of restraint. Like he wasn’t running out there and doing a deal every single month just to say it was done. He wanted to do a good deal and you recognized I can take all of his strengths and add like you know some gas to the fire, which is my drive and we’d be a good partner. Is that right?
Felipe: Yes, he is like this like 65-year-old guy who like I said doesn’t have to do it I don’t think. He just does it to like. Okay he does a house and he lives for a year. He doesn’t have a house, he lives for another year.
Felipe: That’s great. I get it.
David: That’s perfect so now people know what they should be looking for when they go look for a partner. I think that’s really helpful.
Brandon: Yes, that’s great. All right so I got a note here. Before we move to the Deal Deep Dive. I got a note here from Kevin, our producer who says to ask you about the ending of the story of one of your early mobile homes. Something drastic happened and he won’t tell me what it is, but do you know what he’s talking about?
Felipe: Yes, so that’s in the Deal Deep Dive. Do you want to do it now?
Brandon: Oh okay. That’s part of the Deal. Okay let’s go, let’s actually go there. We’ll go there right now. It is time for the Deal Deep Dive.
Hey, it’s Brandon. I want to take a quick break from this podcast to invite you to this week’s BiggerPockets webinar, which is like an online class and this week is going to be something that’s really really popular around BiggerPockets. How to buy small multifamily properties because look, small multifamily properties changed my life and they can be one of the best real estate investment vehicles out there especially those who are fairly new to real estate. There are so many benefits to buying small multifamily properties, which is why this week I’m going to be dedicating like 90 minutes of just direct training on how to get started with this. You’re going to learn how to find them, how to analyze them, how to finance them as well as some of the dangers. There’s like four specific dangers I call out that you should know before you even make an offer. Don’t miss this. Just go to BiggerPockets.com/multiwebinar. Again, M-U-L-T-I so BiggerPockets.com/Multi webinar and I will see you there.
All right, it’s time for the deal deep dive. This is the part of the show where we dive deep into one of your deals and apparently we’re going to talk about one of your mobile homes here so why don’t we start with number one, what kind of property is this?
Felipe: Sure, it’s a mobile home.
Brandon: All right and you, you don’t own the land. It’s just you’re renting the land.
Felipe: Yes, exactly. It’s just, I pay a lot fee and I just own the mobile home.
Brandon: All right.
David: All right, how did you find this deal?
Felipe: I was in college and I was driving back home. That I think it was a weekend and I was driving by and if I’m being a hundred percent honest, I drove by it. I wasn’t into real estate as much as I am now and I really felt a tug at my heart. I just felt like the Lord with saying buy that mobile home. I already had one there. If you can rewind the podcast you’ll see that I owned another mobile home there where I rented with the painter.
Brandon: Okay yes.
Felipe: Now known as Victor the painter. Right and I just felt like I was supposed to buy it.
David: Is it just me or doesn’t that sound like a Game of Thrones name? That you have thought somebody.
Felipe: Victor the painter.
David: Victor the painter.
Felipe: That’s right. That’s right.
Brandon: Okay that’s cool. Okay so you felt like you should just buy this. How much what? I mean was it for sale? Was there a for sale sign in front of it or like.
Felipe: I don’t think it was for sale.
Brandon: That’s fine.
Felipe: I don’t think it was for sale. I think I just walked up and told the guy, “Hey, all I have is $3,000 I’ll buy it.”
Brandon: Okay so that’s. That was my question. How much was it?
David: It’s terrible. Listen, if it wasn’t for a pull on my heart I wouldn’t have bought it.
Brandon: All right. All right.
Felipe: Anyway, yes.
David: I want to ask how you negotiated it, but I think you’ve already answered that. You just said, listen I have $3,000, I’ll buy your house. Is there anything more to it? Did you have like—did you practice puppy dog eyes in the mirror or something like before you went to go talk to him.
Felipe: No, dude. I just totally told him hey I got three grand and he was the right time for him. He probably needed three grand. I think I later did find out that he hadn’t paid his lot fee in a bunch of months so he was going to lose the house so he sold it to me for three grand. I called the owner if that was okay and he said, “Yes, that’s fine.” Because he knew that I had history there, which is the mobile home that me and Brandon are looking to buy. The guy knew that had a history.
Brandon: Oh nice.
Felipe: With paying all my rent on time so I bought it. He was like oh well I was going to have to evict him and get 30 days and da da da. I was like, he was like instead of paying him cash for keys are anything I’ll just buy it for three grand and I’ll take over. He was like okay cool. Then I bought it from that guy. He moved out with three grand. I got the mobile home that he was going to lose anyways.
Felipe: He got $3,000 out of the deal and I got a mobile home.
David: That makes you wonder if like he was sitting there praying, please help me find some way to get out of this rather.
Felipe: I would say yes.
David: He could tell the same story like let me tell you about the time I was praying for somebody to come and.
Felipe: If a dude walked up with three grand.
David: Yes, this guy just walks up and says I have three grand. It’s just what I needed.
Felipe: That’s exactly a right. That’s exactly right, David. I think that’s exactly what happened.
Brandon: All right, so how did you fund the purchase and did you have to do any rehab and how did you fund that?
Felipe: So I funded it from saving up all the money that I had made because remember I don’t pay a lot fee where the mobile home that my mom had given me so I just saved up.
Brandon: Okay yes.
Felipe: All my money that I had while I was in college, which was like $3,500.
Felipe: I had like $500 bucks left. I gave the guy $3,000 and he moved out and the house was trashed.
Brandon: Okay. How did you? What did you do with that at that point? sorry David, I took your question.
Felipe: I walked in to the mobile home and it smelled like cigarettes and there was holes in the walls so I didn’t know how to do anything at this point. I hadn’t worked on any construction sites yet so I just started fixing one room. I did the master bedroom first. I just you know kind of started with YouTube and oh this is how you put up a drywall. Okay cool, let’s try that. I just started fixing one room at a time, which is what I was what my plan was.
David: You had no money so your construction background came in pretty handy since you couldn’t afford to fix this thing up and you could do it yourself and your previous plans of hey I’m going to rent it out room by room led you to well I’ll just do it room by room. I’ll fix up a room. I’ll rent out that room and then I’ll move on to the next one. Is that right?
Felipe: Boom. Boom. Boom. That’s exactly right.
Brandon: You didn’t have the construction experience right at this time. Like you were just figuring it out, learning.
Felipe: No, I was just trying to figure it out.
Felipe: I was just starting to.
Brandon: Oh okay.
Felipe: Yes, yes.
Felipe: No, I was just trying to figure it out.
Felipe: I was just starting to.
Brandon: Oh okay.
Felipe: Yes, yes.
David: I was going to say this sounds too much like Mr. Miyagi teaching me how to wax cars and then. That became my karate move.
Felipe: No, I just started fixing one room. We didn’t get into it, but I actually did like carpet installation through.
Felipe: High school and stuff just to kind of make a little bit of money.
Felipe: I’ve always been a worker so I’d lay the carpet in the room and then kind of fixed up the walls slowly and enough to be able to use the restroom in there.
Felipe: I actually moved all my stuff into that room from the other house.
Brandon: Nice. People might think. I actually did my own carpet for a long time. Actually the carpet installation is interesting because it’s actually one of like the. I think not easy to do and it’s like a little bit complicated to learn how to do it, but it’s so expensive to hire other people like.
Felipe: Ah it’s really easy to do. You watch a YouTube video on it.
Brandon: Yes, it’s not bad. You can. That’s how I learned it. I learned how to do it watching YouTube videos.
Felipe: It’s all right. Yes, just watch YouTube videos.
Brandon: I would haul in these big 12 foot rolls of carpet like up two flights of stairs to my rental units and I would lay the carpet in the afternoon.
Brandon: I be like. I just it. Now grant it. I know we just talked about like how hiring other people, but when I was young.
Felipe: Yes you do what you got to do when you’re young.
Brandon: When I was like you know 23- 24. Yes, you do what you got to do and so I would install my own carpet and save myself a thousand bucks whatever and it would take me a couple hours to lay a carpet.
Felipe: There you go.
David: This explains the size of Brandon’s biceps now. I’ve been trying to figure out how he is so rod without ever touching a weight.
Brandon: My little like pencils for arms.
Felipe: Yes, flex his muscle.
David: It was very lightweight carpet.
Brandon: It was very lightweight carpet.
Felipe: Sure, sure, sure.
Brandon: All right.
David: He wasn’t doing carpet. He just threw rugs all over the place.
Felipe: It wasn’t carpet he just.
David: He just used a stapler to tack them down around the corner, yes.
Brandon: That’s all you got to do.
David: Looked like a quilt on the floor.
Brandon: Oh my God.
David: A bunch of rugs together.
Brandon: Okay, well I was going to say so funny thing. Actually, one thing I loved about doing carpet. I still to this day like this is it’s like a challenge to seam carpet. Can you seem carpet without people seeing where you seemed it?
Brandon: It is such a challenge.
Felipe: The secret.
Brandon: That’s the hardest part right?
Felipe: Yes, just doing it away from the windows because it’s the lighting that makes it show.
Brandon: Yes, it is.
Felipe: You just do it in the sides. That’s not.
Brandon: There’s the little tricks like you got to use a sharp knife right and you got to have like it’s got to be the same direction of the carpet. Once you learn this stuff, like it’s an art project every time.
David: Look how excited you are.
Felipe: He’s really excited about this.
Brandon: Oh I get so.
Felipe: Doesn’t he?
Brandon: I know.
David: You guys should write a book together.
Brandon: I would have so much fun.
David: Carpet hacking with Brandon and Felipe.
Brandon: I often, well I often think if everything in my life exploded and I lost all of my money and I lost everything that I have today, I would probably go start a flooring company. I wouldn’t do all of the flooring, but like I think like people will always need.
Felipe: It pays.
Felipe: So well.
Brandon: And it pays well.
Felipe: It does. I just the flip that I’m doing right now. Oh I’m sorry back to the deal deep dive, but.
Brandon: Your deal it’s okay.
Felipe: Yes, so the flip that I’m doing right now actually I order like 15 boxes of laminate or I’m sorry of LVT to put in to the property and 10 of those were wrong.
Felipe: Like only two of them were the right color. I was so upset and I had to pay my installers lunch to come back because I had to go pick up more flooring, but I’m 1paying this guy like tons of money to lay this. I’m like dude, I could do this.
Brandon: I know.
Felipe: Now I’m at the point where I can pay someone to do it.
Felipe: Because you know it’s better for my time for him to do it while I can be doing something else.
Felipe: But yes, it’s yes flooring pays very very well. People don’t understand.
David: Okay. Next question.
Brandon: All right.
David: What was the outcome?
Felipe: Okay so this is where it gets really crazy and it’s really hard to believe, but I can’t make this up so this is exactly what happened and if you’re in Nashville or you’re from the South, you know this, you know what happened in Nashville in May 2010. Nashville flooded completely. It was insane and in the mobile home park three of the mobile homes are in flood zone only three and one of those was mine. I bought the deal and about three months later the mobile home flooded. I was so upset. Like I was like I really felt like God had failed me because I was like Lord you told.
Like I really felt like you told me to buy this mobile home so what happened? It’s flooded. Now what? 30 days later, rent is still due. That’s another hashtag of mine. I don’t care what happens. Rent is due. If someone is complaining about something, rent is still due. It is a matter. Rent is still due boss.
Felipe: Anyway, so that place got flooded and 30 days later I started to pay the rent on it. I remember I had $500 bucks and the mortgage on it was $350, the lot fee. I’m down to like nothing. I think it was like 15 days later I got a check in the mail and I was like starting to open it right and like you know like opening your mail and I’m like okay. Aw this is going to be a bill, but no it was like a $300, I thought.
I opened it and it was like $30 bucks, $300 bucks. I was like oh my gosh. I’m getting the money back for the mobile home from insurance or FEMA or whatever. I was like this is great. Okay I’m going to get some money back. Thank God. I can pay the lot fee this month. I keep opening it. No, it’s $3,000. I was like oh my gosh. I made the money back from my mobile home and then I took the whole check out and it was a $30,000 check.
Felipe: Yes it was.
Brandon: That FEMA sent you?
Felipe: Yes, for that mobile home.
David: They’re amazing.
Felipe: They came in and saw that I was redoing that one room and I had all my college books in there and my laptop and all that fun stuff.
Felipe: And the FEMA guy was like do you live here? I was like unfortunately yes. He said, you’re a college student? I was like yes. He was like man, I’m going to give you the most that I can give you for this property for what’s going on here. I was like and he’s like I’m trying to give you the full value of this mobile home whenever it was first purchased. I was like okay.
Felipe: I was like maybe $300-$3,000 bucks no. He came back with a $30,000 check.
Felipe: What kind of return is that?
Brandon: Yes, so did you fix it up and keep it and hold onto it? Was like what.
Brandon: Where are you at today?
Felipe: Yes, we still have it. I went with that check. At this time I was like mom, what do I do? Like I’m 18 years old with a $30,000 check.
Felipe: Well do what you felt that you were supposed to do in the first place. Except now, you have enough financing for it.
Felipe: I was like what? You are so right. We fixed that property. We fixed it and now we just rent it out. It’s been in my family for still. We still have it.
Felipe: And then about 350Z with the rest of it.
Brandon: Did you really?
David: Like every other financially responsible 18-year-old. I was about to say did you go try to buy all the other mobile homes in the mobile home park?
Felipe: I should have. That oh my gosh. What an idiot.
David: Not a 350Z.
Felipe: I went out and bought a 350 Z cash.
Felipe: I put in like $10,000 into the mobile home and then bought a car.
Brandon: That’s funny. Well, you need a car so well done.
Felipe: When did I buy right?
Brandon: We’re going to call that. We’re going to for the FEMA hacking from now on so we can write a book called FEMA hacking. It’s going to be great. What lessons did you learn from the deal?
Felipe: Don’t buy a sports cars. I sold it for like six grand later. It was trash. Terrible. I loved the car, but. Yes, no I learned pull the trigger. Don’t be scared. I mean all of my eggs well that was like that was everything I had. I just, I felt like it was the right deal at the moment. Now I don’t much go on gut. I go a lot of what wisdom I have and what knowledge I have acquired.
Felipe: I still do listen to my gut. Like that’s important. People need to remember that too. You can have all this information. You can have all this stuff, but go walk the property. Go feel it out. You’ll know man.
Felipe: Like you’ll know if it’s right or wrong and just me being who I am and being you know a spiritual person. I walk the deal. I get all the numbers. I get as much information I can and then oh I pull the trigger. I’m not scared to pull the trigger. That was a big thing for me. I think that I learned and that deal. I said okay I’m going to listen to my gut. I’m going to pull the trigger on deals that I know. For instance today before this podcast started Brandon and I were on here and I was pulling trigger.
Felipe: On another deal. I don’t know if it’s going to go through or not, but I mean I pull the trigger all the time.
Brandon: Yes, I was actually going to mention that. Like we were literally like during that time when David Greene was trying to take his computer out of the 1800s, he like literally made an offer on his phone while we were sitting there. I think that’s it’s such a good reminder like making an offer doesn’t have to be scary or overwhelming.
Brandon: People understand like you can make an offer while sitting on a podcast waiting for David Greene to boot up his computer. Yes.
Felipe: It’s that easy. People to understand that it’s free too.
Brandon: Yes, it’s free.
Felipe: And offers. I’m going to get a thousand no’s.
Felipe: That’s okay like and then I say why? Well I need. Like back to the know why thing.
Felipe: Yes, the know why thing. I go back to that and they’re like oh well. Because I need $170 to pay off the loan. Okay well then now we’ve got conversations. What if we do it this way or that way or you know we just we figure that out to the best.
To where it works out in both of our favors. I never try to make it completely about me. I try to figure out a little bit if I can about the seller. Oh well I have this or that or whatever the case may be. Okay, what about if I just paid you out the rest of the month or I mean just whatever. What if I got my movers to move you for free? That would help you out because you’re going to have at $3,000 cost. I’ll do it for you and I’ll pay closing.
Felipe: Boom we got a conversation started so no, but why.
Brandon: Know but why. I love it.
Felipe: Know why.
Brandon: All right well that was a fantastic Deal Deep Dive. Very cool about the property. I mean.
Brandon: Interesting that that happened. Lucky or you know blessed, however you want to look at it.
Brandon: Like it worked out and very very cool. Alright so let’s head over to the next segment of the show. Our Fire Round.
It’s time for the Fire Round.
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All right, time for the Fire Round. These are the questions the come direct from the BiggerPockets forums. We’re going to fire them right there at you right now, Felipe. Number one, from Ryan from Grand Rapids, Michigan. I need some advice about staying organized in the beginning of my investing career.
I have a habit of keeping track of everything in my head and I know that’s not going to work long term. What tools do you need or what do you use to maybe like keep track of your life? Any programs or tools or tips?
Felipe: I try to worry about the big stuff and just make sure that if I worry about all the big stuff in my life, the little stuff seems to get taken care of and a lot of times people say oh well take care of the little stuff. You’re going to drive yourself nuts I think doing that. I just take care of the big stuff. Like I said I write a hundred offers. I don’t worry about all the little details because the offer hasn’t even been accepted yet.
Felipe: If someone is like worrying about all the little stuff in their life. I think they’re never going to all the important stuff. Worry about the big important stuff and just make it down the list. Then write things down. I mean that’s helped me a lot. I just write things down and I check them off the list and I’m like okay done, done. All these things get done perfect so for me making a list. What’s the most important? And then usually I end up finding out that 80% of the things that I thought were important aren’t.
Felipe: Only focused on that 20%.
Brandon: Yes, that’s true.
David: Very good. All right next question. I want to hand over my AirBNB to a full-time manager. This is a smart person. How should I find this person and what systems should I set up?
Felipe: Sure, so for AirBNB, I have. There’s no key so I found that really quick. That was an issue people would steal my key or lose or whatever so I put in a little lockbox or a little punch in code thing.
Felipe: Boom that takes care of one of the issues. Then I just and pasted my response to each room and I just saved it on my phone. Every room has the exact same response to the same questions, same check and instruction, same everything. I processed all that.
I set it up to where all I had to do was text, text, text. Here’s the code. Boom, boom, boom and then I handed that off to another person so they could not mess it up. Then if there’s anything crucial they call me.
You can just put on Facebook hey looking for someone to handle my AirBNB and you’ll get tons a responses. That’s a business in any city. People will look out for that. You just go through some references and make sure that they’re legit. See about their history and then I mean just hand them over, literally an SOP, as Standard Operating Procedure for how you want your AirBNB to be run. They handle all of it. Process it all.
Brandon: Yes, that’s great. You bring up a great point about like somebody to manage your AirBNB. Like typically the person doesn’t have to be their own person, which means it’s a perfect job for like that stay at home parent right. Who’s at home and would love to bring on a few hundred dollars a month extra working completely flexible general, you know generally flexible hours at. All they need is.
Brandon: A smart phone to be able to run.
Felipe: That’s exactly right.
Felipe: Copy and paste. Whoever made up.
Felipe: A copy and paste is a rich man.
Brandon: Yes. Number three, we’ll call this may be the last one of the Fire Round. It’s getting to be along show. We’re wrapping up here. We don’t know when the next major. This is from Chris from LA.
We don’t know when the next major the downturn is going to come or what it’s going to look like. We do know that it will come. What are some of the things that you are doing now to be prepared in case prices take a big hit.
Felipe: I focus on cash flow for myself. I’m in it for the long run. If you’re doing flips, the first flips that I used to do I had huge like $300,000 to sell $400,000 or something.
Felipe: You know to me that was a lot. Right now, I mainly focus on small, but consistent returns, $30-$40 grand. I told my guy that. I was like look we don’t need to do these huge properties that take years and years or a year to do.
Felipe: Like we just do small properties at $30-$40 grand every three months and we’re safe there.
Felipe: If for any reason something happens, we’re going to be stuck.
Felipe: In a deal that cost us $30 grand. It’s not going to be the end of the day or the end of the life for us so we focus on those little things and then I do cash flow on the other ones and me personally, this works in my life. I do about a 60-40 split on debts. Every one of my properties is paid off about 40% and then I keep bring that down and I don’t buy anything that I can’t afford to at least be in between 40% and 30% paid off debt when I get that property.
Brandon: Cool. That’s a great answer. Yes, I have a little bit of room there. A little breathing room in case the market does drop a little bit. You’re going to be fine. We’ll probably have a little more of cash flow. Smart. All right, well with that let’s get to the last segment of the show. This is our.
Brandon: The famous four. These are the same famous four questions we ask every guest every week. Felipe I know you’ve heard this, while you’re bumming around a construction site back in the day.
Brandon: Hear these coming so let’s throw them at you. Number one, favorite real estate related book.
Felipe: Rich Dad, Poor Dad. Does that surprise anybody here?
Brandon: I am shocked.
Felipe: Oh my gosh right. It’s true and true man. It’s the book that I think has impacted a lot of people. Rich Dad, Poor Dad, if you read that book you’ll understand and it will speak do you. I think it’s a lot and the book is alive.
Brandon: Love it.
David: All right. How about your favorite business book?
Felipe: The Richest Man in Babylon. There’s plenty of books man. If I could give out more, Lifeonaire. Why the Rich are Getting Richer by Robert Kiyosake. The Richest Man in Babylon is such a boring but it’s so good. I got my wife to listen to it on the ride back from Florida once and she hated it. Because it reads so boring. Then the other one is that is Lifeonaire. Man, if people just.
Felipe: Kind of grasp that book I think it’s a fantastic book.
Brandon: Yes, I really love it.
Felipe: It really fits into what I want.
Brandon: Yes. Yes, so good.
David: Brandon, talks about it. All the time.
Brandon: I know. Didn’t I send you a copy of it David?
Brandon: I should.
Felipe: You should. It’s a good book. It’s actually right there.
David: That was her other friend. I’m just your side chick you forget about.
Brandon: Maybe when you’re out here next month you can pick up one of my. I have two copies sitting on my bookshelf.
Felipe: Oh yes, it’s a good book.
David: Squeeze me in there between like the guys you really like and your real friends.
Felipe: The real guys he invites over, but not David.
Brandon: Yes, my friend that he thinks of at 2 AM when no one else is answering his texts. Then that’s when I hear.
Felipe: Then you get a text.
Brandon: Yes, good one. Hey what’s up girl?
David: I guess it was someone else I sent Lifeonaire book too. Sorry I get you guys all confused.
Felipe: That’s funny.
David: All right, next up what are some of your hobbies Felipe?
Felipe: Man, right now I’m really into like I said I have a 16 month old. I really enjoy playing with him and real estate is giving me that opportunity. I used to work out all the time. There’s a lot of things that I used to do and then real estate gave me back my life if that makes sense. Gave me back my time, my minutes, my days, my hours so I like to spend my time with him whether it’s riding a bike, going to the park, going to you know anything with my son it’s fantastic. Real estate has given me that opportunity.
Brandon: Yes, very cool. Fantastic.
Brandon: Well my last question. What do you think sets apart successful real estate investors from those give up, fail, or never get started.
Felipe: The comfort zone, that’s an easy answer for me. I think a lot of people get stuck in their comfort zone and I can say that because I really feel like I never had a comfort zone. Being Latino in Nashville is really hard because like everyone is not Latino. Like for instance when I was in high school I was too Mexican for the white guys and I was too white for the Mexican guys so I was never in a comfort place because I spoke perfect English, but you know the American people were like no, well you’re brown so.
Felipe: You know, go over there and then the Hispanic the same thing so I think a lot of times people get stuck in a comfort zone and they don’t step out of that. The reason I was able to be successful in real estate is because I never had that quote on quote comfort zone. If I go to the bank in they’re like you know no. You can’t have that loan.
I’m like, but yes no why. Why can’t I? I get out of that comfort zone. People don’t want to ask that do not be rude. They don’t want to be rude to whoever is in front of them.
I’m not being rude. I just want to know why. Like just give me the answer of why and that set me apart I think. Asking that next question why. Like I told you guys in the earlier. I think I have failed at one thing and that was becoming a police officer and it was because I didn’t ask why.
David: I think that’s a very very very insightful observation that you never were able to sink in to a comfort zone and so it makes it easier for you to be more successful. As you talked I started thinking about when I was hanging out with cops it was always like I was much more ambitious. There were people that said all the time well you don’t get into law enforcement to get rich. Like it was their excuse for why they’re not good with money or they’re not because building wealth.
David: Because well you’re a cop right and then in the other sense when I was hanging out with like the entrepreneur types who were all about money I was always irritated because they had no substance and they had no grit. They’re like they’re not the guy that I want next to me in like a dark alley on a bad night right. I never really fit in on either side either and I think that for the people who have lived that life, they get it immediately.
They know what you’re talking about. People who don’t, they’re just completely clueless as to the understanding of well I get along with everyone, but I don’t really fit in with anybody. Like what you were saying it, but the reward is you get to kick butt.
Felipe: You use that to your advantage.
David: Absolutely. There you go. Don’t be a victim about it. I love it.
Brandon: That’s right.
David: All right, you are fascinating individual Felipe so tell me. Where can people find out more about you?
Felipe: Sure, so I’m going to answer this question like this. A lot of people are like well how can I find mentors? Well bring value. You know what? You can find me at SideGuyMovers.com.
That’s my moving company. If you want to learn how I did everything in two years, come work with me. I’m going to be loading the truck with you sometimes and you can ask me two hours worth of questions. I can tell you everything you want to know because moving to me is just second nature.
I can talk real estate with you all day. You can find me at [email protected] Just shoot me an email and we can chitchat man. It’s that easy. I’m on Instagram you know National Side Guy, SideGuyMovers. you can find me there. That’s how you can get a hold of me.
Brandon: Cool and we’ll put links to all those in the show notes as well, BiggerPockets.com/Show39. With that, Felipe this has been amazing. This is been awesome. I loved hearing your story like in one full picture instead of like the bits and pieces I’ve got over the last two years.
Brandon: Yes, unbelievably cool so keep it up. We’ll have you back on the show again when you hit the you know when you keep crushing this in the next few years. We’ll do it again.
Felipe: Let’s do it.
Brandon: Fun. All right dude well thank you so much and everybody else, thank you for listening to the show. I hope you enjoy not just this episode, but all of our episodes and you can get updated on new episodes by subscribing to our show of course on wherever you listen to the show. If you’re on Youtube right now, you know hit let’s subscribe button, if you’re on iTunes hit the subscribe button. Leave this rating and reviews over on iTunes, Stitcher, SoundCloud, and Google play if you can that helps us out a bunch as well and come hang out on BiggerPockets. I mean that’s where things are happening right. BiggerPockets is the world’s largest real estate investing social network. Make sure you have a free account there or a pro account if you want to be a pro member. And in fact, use code Felipe to get 10% off a pro membership. You like that I made a code just for you.
Felipe: I really love that.
David: You just made him immortalize in the.
David: In the annals of BiggerPockets lore.
Felipe: Yes, they can spell my last name. They should get an extra five percent. Use coupon code Felipe how do you even say your last name?
David: See I told you he doesn’t know how to say my last name.
Felipe: Go ahead.
David: That’s his Achilles’ heel.
Felipe: How is that hard?
Felipe: Yes, David got it.
Felipe: That’s how all my middle school teachers said it. That’s terrible.
Brandon: All right use code FelipeMejia, MEJIA.
Felipe: Come on.
Brandon: To get 15% off your pro membership.
Felipe: That’s awesome. All right cool. All right well David Greene, you want to take us out? Felipe thank you so much.
David: This has been awesome. Felipe, what’s your IG handle? Instagram.
Felipe: Instagram SideGuyNashville.
David: He is SideGuyNashville. Brandon is BeardyBrandon. I am DavidGreene24. Add us on Instagram so we can stay in touch. This has been a blast. This is David Greene for Brandon. I love my daughter more than my landscaping Turner. Signing off.
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