BiggerPockets Real Estate Podcast

BiggerPockets Podcast 381: 5 Rules for Investing in a Down Market with Tucker Merrihew

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Can you flip, wholesale, and buy rentals throughout a downturn?

Yes… IF you heed the advice given out in today’s episode.

Our guest Tucker Merrihew is more than qualified to tackle this subject, having launched his real estate business in Portland, Oregon, in 2008—during one of the worst housing markets of all time.

In a rare “Double Deep Dive” segment, Tucker walks us through a couple TTM Development projects from 2009 and reveals exactly what he did right and wrong at the time.

As for the coming months… you’ll learn which types of properties to avoid, which price ranges to target, and why renovating old homes can be risky business at this stage of the market cycle.

Plus, Tucker explains why he underwrites every deal at 3 different prices to make sure it passes his “Oh $#!# Test” if the market goes south.

Tucker is a seasoned pro with hundreds of deals under his belt, and he shares tons of valuable information for free in this episode. Be sure to subscribe to the BiggerPockets Real Estate Podcast for more tips on investing safely while taking advantage of the opportunities ahead.

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Brandon:
This is the Bigger Pockets Podcast, Show 381.

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Tucker:
This big mantra out there that the key to this business is marketing. Marketing to get leads in, leads equal deals. Everybody’s put their emphasis or their desire to learn about this business on marketing, and that’s great, and that’s a necessary skill for sure. But another necessary skill is to understand the product itself. I think a lot of investors, they don’t understand the product itself.

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

Brandon:
Hey, what’s going on everyone? It’s Brandon Turner, host of the Bigger Pockets Real Estate podcast, here with my co-host, the man, David Greene. What’s up, buddy?

David:
It’s a great day. The sun is out. I ran like five miles yesterday, which I haven’t done in a long time to split it up-

Brandon:
Was somebody chasing you?

David:
Someone chasing… That’s very, very nice. Right before we recorded this show, we helped put a house [inaudible 00:01:13]client under contract right at asking price or you’d have to go over. It’s a good day, like Ice Cube would say.

Brandon:
Wow, very nice Ice Cube reference, wow, you are having a good day. Well, let’s make everyone else’s day good, because today’s show is going to make your day even better, because here’s the deal, today we’re sitting down with one of the smartest investors I’ve ever had the pleasure of meeting. His name is Tucker Merrihew, who was on our show a long time ago. Let me see if I can find the number.

David:
Episode 22.

Brandon:
Wow, you're good, Episode 22. Almost seven years ago, I think about seven years ago, he was on our show. You'll hear a little bit more about him and his story, but he's been through the last recession. They invested on the way down last time and then the way back up again. Today, he shares with us five rules for investing in a down market. Specifically he's done new construction, he's on flipping, he's done wholesaling, and even done a bunch of rentals. He's done all sorts of stuff, and they've got a machine down in the Portland Oregon area. But he talks about what those five rules are and how you can get through the coming economic difficulties, no matter how bad it gets based on these rules. They're very, very smart. He's got a lot of good stuff to say today.

Brandon:
With that, before we get to the interview, let’s hear today’s quick tip. Hi, David Greene, what is our quick tip for today?

David:
Today’s quick tip is don’t assume that because everybody else is not doing something that you shouldn’t not be doing something. That really what you’re looking for is barriers to entries and signs that other people are not taking action. That’s a huge, huge thing. Right now there’s a lot of people say, “I really don’t know about real estate, I just want to wait and see.” That’s when you need to sprint, that’s when you have to go harder. You can catch opportunities that you normally wouldn’t get. Fight the herd mentality. Don’t think because everyone else is doing it, you should do it too. You’re really looking for the opposite mentality to be successful.

Brandon:
That’s a good quick tip for today. Very nice, man. Way to do it last minute because I didn’t tell you that was coming.

David:
But I knew it was coming because I knew you didn’t have anything. I’m finally catching up to you, B.

Brandon:
All right, I think we are ready to jump into the show with Tucker. Anything you want to add before we get into it, DG?

David:
No, this is just such a good episode, and it’s not just typical oh, in a recession, you should pay less. That type of advice is not what you get in here. This is good, practical, sensible stuff.

Brandon:
Yeah, it’s awesome. All right. Well, with that, let’s get to today’s show with Tucker Merrihew. Hi, Tucker, welcome back to The Bigger Pockets Podcast, man. How you been doing?

Tucker:
Well, it’s been, what, seven years almost?

Brandon:
It’s been a little while.

Tucker:
Over the past seven years, I’ve been doing awesome. I appreciate you guys having me back. We’re taking a little stroll down memory lane. Although circumstances are a little bit different right now.

Brandon:
They are a little bit different. One, Josh Dorkin has changed his look quite a bit and now he’s got a shaved head and he looks like an NFL… I don’t know, I was going to say a linemen crossed with a cop though. This is David Greene, I’m sure you guys have now met but, yeah, man-

David:
I see what you were going for there, that I am Josh Dorkin, okay.

Brandon:
Exactly, look at that, man. Apparently my jokes fall flat today. I’ll blame it on the getting up at 4:00 AM and 3:00 AM and 2:00 AM with Wilder.

David:
Awesome.

Brandon:
Anyway, what’s up guys? Let’s talk about real estate. First of all, I want to go with market. Well, no, I was going to go to market, what’s your market like, but some people don’t even know who you are. Back when you were on the show, we had like seven people listening and three of them were my family. Today, we got like a lot more. Who are you? Tucker, what do you do? What’s your story in a nutshell?

Tucker:
Sure. Well, I got to say you had more than seven listeners back then because you guys were a big springboard to me starting my own show even back then. You guys definitely had a listener base. But for those people that don't know me, I've been in the real estate game since about 2002 in a variety of different ways, but I started in the mortgage game. I was one of those greasy, grimy loan officers way back when, that slang a bunch of less than scrupulous type loans the people. Although-

Brandon:
No job, no credit, no problem.

Tucker:
That was me, but bear in mind, it was legal back then, and we were told that that was normal. Fast forward to today, it looks a little different, but that’s how I got started. About two or three years into that, I started my own mortgage company, and that was about 2005, 2006. I was actually sitting in this office right here in March 2007 when the financing spigot got shut off. From there, we ended up going through the Great Recession.

Tucker:
But during that time, I was buying and flipping some properties probably one or two at a time, while I own my mortgage company. I did the, what you have now coined, probably one of the most well-known phrases ever is the house hacking. Prior to Brandon Turner coining this phrase called house hacking, I lived in a house with a bunch of buddies, fixed it up and rented it out and then I sold that before the bust, made about 200 grand. That was my big casino win we'll call it, heading into the downturn, which was good because I was then flush with cash and not with make believe equity.

Tucker:
When we did hit the skids there in mid-2007, I did have a fair bit of cash on hand, which was great. I actually downsized instead of upsized. I went from a house to a town home, which the only reason I really did that, I can’t say that I had great foresight or anything, but I had a boat, I did buy a boat with some of that money, which was probably not the smartest thing to do. But then I took that boat and I docked it across the street from my house on the Willamette River.

Tucker:
I thought, well, I’ll just live in a town home and I’ll have a boat and there’s a bar in between, and it sounds like a great way to live your 20s, right? That’s what I did. But then back to the real estate side of things, 2007 happened. By the time we got into early 2008, I decided to essentially close up my mortgage shop. I was doing a little bit of originating still but I had a partner who had a Washington license and I handed everything off to him.

Tucker:
Then November 2008 is when we opened or filed paperwork for what is now TTM Development Company. We basically or I decided at that point I didn’t want to generate really any of my income moving forward from originating loans. I wanted it all to be in the real estate investment space. We went from basically, or I went from in the loan side to full-time into the house flipping world.

Tucker:
Over that time, I guess I should say, I did acquire a number of rentals. I built out a decent rental portfolio, some of which stuck, some of which didn’t, depending on when I bought them on the run up, some of which I still own today. But from 2008 on, we started basically buying and selling property as our active income, and that’s been my main income ever since.

Tucker:
We went up… When you guys had me on the show in 2013, we had ascended from buying your typical three bedroom, one bath, three bedroom, two bath ranch style home, all the way up to building a multi-million dollar new construction. Last time I was on the show, it was right before what we call the Street of Dreams here in Portland, which was our first multi-million dollar new construction, which I’m happy to report, we ended up selling that right after the show for just under 2 million bucks. We did pretty well.

Tucker:
From there, we started doing a lot more new construction, we also did a lot of renovating, but now, here we are, end of April, beginning of May 2020, things are feeling a little bit like 2009, 2010 in certain segments of the market. That’s me in a nutshell.

Brandon:
That’s cool, man. Well, there’s a couple of things I remember from last time we talked back, almost seven years ago, I remember one you had the postcard. Didn’t you have the postcard with your dog on it?

Tucker:
I did.

Brandon:
That’s what I… I remember that, because remember that stood out to me was like, the dog’s name Buys Houses or whatever it was? I thought that was super clever.

Tucker:
I’m happy to report George is a Mastiff and he’s still alive, seven years later.

Brandon:
Wow.

Tucker:
Yeah, he’s nine and a half.

Brandon:
That’s good for a Mastiff.

Tucker:
Yeah. That postcard was pretty popular, actually. I do remember a lot of people reached out to me after that show, and they’re like, “Hey, I made a postcard with my dog on it.” I don’t know if it pulled as well for them or not, but people-

Brandon:
I don’t know, but I thought that was clever. The second thing I remember about the show is how Josh and I just could not get over how much you looked and sounded like Matt Damon. Now, you have a little bit of a facial hair, I think you’re trying to distance yourself from him, but do you still get recognized as Matt Damon from time to time?

Tucker:
Occasionally. The beard throws people off a little bit, but originally I grew it to look older and now I just… You grow accustomed to beards, as I’m looking at you, both of you guys, actually.

Brandon:
well, it’s actually a state law now in the Pacific Northwest. You can’t live in Portland or Washington, Oregon. That’s where you are, you’re in Oregon.

Tucker:
Yep.

Brandon:
What’s your volume looked like over the past couple of years? What kind of numbers are you doing in your business in terms of how many flips, or how many builds?

Tucker:
We’re probably, let’s call it seven or eight new construction and then probably similar to that on flips. Not comparatively to the narrative out there of huge volume, we’re not it, but we’re higher profit margin, lower volume, and that’s been the business we’ve been running really since I talked to you in ’13. We did more flips, I was just looking through those lovely clearance file cabinets that I have back there along with see my Circa 1972 office environment here, I’m a big fan of C-class office space.

Tucker:
I was pulling old files to really dig into what we were doing in 2008, 2009, 2010 to reacquaint myself with the transactions we were doing that were successful and unsuccessful. We were doing a lot more volume back then. But then we were also doing lower price point, a lot of smaller type remodels. But now, we’ve moved up price point, or we have over the last seven or eight years dramatically. With that, comes a higher profit margin attached to each deal. We’ve also raised a lot more capital, we’re doing a lot more construction. We’re not an incredibly high volume operation, but we try and be as highly profitable as possible.

Brandon:
Yeah, and I don’t think that’s a bad thing. I think people focus a lot sometimes on volume. Like David, you make this point all the time, I got 12 doors, I got 100 doors. Each of your doors makes $3 a month. Congratulations, that’s a lot of work.

David:
People say it as a bragging metric, and it’s actually the opposite. I hear that and I’m like, “Oh, that sounds horrible.” Like, “Oh, yeah, I have 75 foster cats that I have to care of all the time.” It reminds me of a quote I was reading yesterday that Newt Gingrich said, and it had something to do with the fact that a lion can catch field mice all day long, but it will die because the caloric content of a field mice is less than what it takes to go chase it. Instead, lions chase antelopes.

David:
A lot of us in life spend our time chasing field mice because it feels good to say we did something. Like, “I caught 75 mice today.” But really, you just wasted your entire day and you didn’t get anywhere. That one antelope could have fed you for a long time. That’s the same principle I see going on here. I’m curious, though, Tucker, because you said you got out of the loan origination business. I just started a company to do loans and I’m wondering, did you get out of it because you recognized that the return on your time and the frustration was just more than you could get if you put your efforts somewhere else?

Tucker:
To be totally honest with you, I never loved the loan origination business, it felt like a real grind. The straw that broke the camel’s back was 2008, 2009, I actually was being audited a bunch of different ways by the State, Finance Securities Division. They would audit you, and then they would charge you hourly for the auditors.

Tucker:
Then when I got the bill, I remember looking at it, they charged me for the drive time for the auditors to drive from Salem to Portland. I thought, you’re charging me for the audit, and it was an absurd amount each hour, but you’re also charging me for the time that it takes them to drive from Salem to Portland before they even start the audit.

Tucker:
At that point, I was like, you know what, forget this, it’s just not fun anymore. It was a tough decision. It wasn’t an easy one because I’ve been making a lot of money doing that, and that was my primary source of income up to that point, but I just got burned out on it. I don’t think I’d go back, maybe in like a consulting or like high level way maybe I’d be in the mortgage game, but I wouldn’t want to be on the front lines originating.

David:
That’s a very important factor to consider though, for everyone listening, when it stops being fun, when you start to hate it, when it’s what Brandon and I call it becomes heavy, it’s just a heavy thing, it gets to be where you’re going to lose money because your subconscious will be working against you. An opportunity will cross your path, and instead of pursuing it, you’re actually going to find some way to avoid it. But you’re not going to want to work that day, you’re going to sleep in instead of getting up.

David:
If you think… What I learned with was when I would be really hard on myself, when a deal didn’t work out like I thought that it should, I would not want to go chase the next deal. I realized, if I do this, and I miss three deals a year, just because I’m not in a great mood for the next 20, 30 years of my life, that’s going to be a massive impact on my overall wealth. I recognize that, you have to protect your emotional health if you want to be financially wealthy.

Tucker:
I agree. If you’re in the mortgage game, the challenge was I was in the broker world. With the broker world, you’re dealing with these wholesale lenders, and you’ve got underwriters that are not in the same building as you, and then you’ve got customers that you’re playing the go between with. It’s a real tough world. Now, With all of the additional guidelines and overlays and things that are required, it’s a tough business again, in my opinion. People will weather through it and last, but it just wasn’t for me.

Brandon:
Hey, I got a question on that, I don’t want to get to the market stuff and the relevant timely stuff, but something that it doesn’t depend on the market, it’s completely irrelevant of the market is something that David brought up about, if you’re not in it, if you’re not feeling it, there’s this, maybe you shouldn’t pursue it. But at the same time, it’s like the question where I’m getting at is when to grit and when to quit?

Brandon:
When do you just buckle down and say, “You know what, I’m not feeling it today or this week, but I know that I just need to keep working my process.” When do you say, “You know what, I’m just done, I’m tired. It’s just not for me right now, I’m going to move on to something new.”

Brandon:
A lot of people are thinking that maybe in their job, they’re not sure if they should stick with it or their side hustle or whatever. When do you see that difference?

Tucker:
I love real estate, don't get me wrong. The whole real estate game, all facets of it. Some I'm focused in, which is challenging because we all have this shiny ball syndrome where we're like, oh, [inaudible 00:15:01]ooh, multifamily, ooh, new construction. It all is interesting to me. But I just looked at it, number one, I was burned out. I'd done it for a number of years. It wasn't like I gave it a month of trying to do something like let's say you're trying to learn how to direct a market directly to sellers and you give it one campaign. You're like, screw it, I'm not going to grind it out, I want to do it.

Tucker:
I’ve been doing it for years, and I just knew deep down that it wasn’t fulfilling for me, but I also knew that there was a better way to make money in this business. The real estate investing side, I knew that was a better way to make money, I just had to learn that side of the game. I just decided to dive in headfirst and really figure that out.

Tucker:
I’d had some success with it, which helped, but I knew that there was just a better way. Being transactional on the loan side it’s like the toughest way to make a living in this business. Realtors you have pre-determined commissions that you’re basically paid on the loan side. You’re scratching and clawing in your bid against other people on rate and fees. It’s just a tough way to make day in and day out. I just got burned out on it after years.

Brandon:
That’s awesome.

David:
For people listening, if that’s what you’re feeling, if you relate to that, you’re like, “Yes, it’s so frustrating. I have what I thought was a good deal, and then the client is beating me up on the price. When it’s all said and done, and then I pay taxes, I’m like, why did I even do that? I would have been better off bartending one night a week or something.” Then you got to look for a way to get out of that position. You’re 100%, right, the way that… I bet if you tell us how you feel now, you’re excited, you see that deal, and it feels like an antelope and you’re going to chase it with everything you got, and you’re going to get the best out of yourself. You got to listen to those internal voices that are trying to guide you to the right place for you.

Tucker:
For sure. That’s not to say this is the easy side either. As we’re talking about before we started recording, I get people to tell me they want to kill me occasionally with the messages they leave. We get a lot of NIMBYs [inaudible 00:16:53]around here that hate redevelopment. I get people cruising by my house at eight o’clock at night, yelling obscenities because they know where I live and they don’t like the fact we’re building new construction in the area.

Tucker:
There’s definitely challenges on this side as well, but I have much more of a fondness for this side of the business. This is where I wanted to be, ultimately. So, that’s where I am.

David:
Well, it’s a good thing that your best friend, Ben Affleck is now Batman and you can call on him whenever you need.

Brandon:
That is a good thing.

Tucker:
That is true.

Brandon:
Hey, Tucker. Okay, let’s talk about the real estate market and the changes that we’re seeing right now. What do you see personally right now in your market in the Portland area and are you only in Portland? Do you do Salem and other areas and then what have you seen?

Tucker:
I’m purely in Portland right now. Obviously, I talk to a lot of investors, fairly high level across the country. I’m getting a read on other markets as well. But I don’t want to speak to that today. I’ll just talk to what I’m seeing in Portland and then you can take from there what will happen across the country. But we’re on a unique position right now because we’re in multiple buckets in terms of price points, types of buyers, products, things like that.

Tucker:
The Tale of Two Cities, we’ll call it. We had one house that we sold last week, that was slightly under median price point for an area called Lake Oswego. Even in the midst of this whole corona mess, we had multiple offers, and it sold over a list. Now, it was a little bumpy coming into closing with financing and people deciding whether or not they really want to pay that number, just challenges like that, but we got it to closing.

Tucker:
Then on the other side, we’ve got some million plus dollar new construction that’s on the market, that’s pending right now, and we’re taking it in for closing, but that market is very stagnant. There’s very few buyers out there. Those buyers that are out there are bargain shoppers. We’re seeing the median price point preserve its value still, but we’re seeing the higher end really start to get back and get back quickly.

Tucker:
Now, whether or not it’s going to be a sustained give back or whether or not it’s going to be a blip, I don’t know, I can’t really speak to that for certain, but my gut’s telling me that it’s probably a sustained give back to some extent and certain pockets more than others. But right now, the median price point, you probably see it in your feed too, people are like, “Sold a house in 24 hours with four offers.” There still is a lot of activity out there in that closer to median price point. But once you get into the higher end and whatever market you’re in, it’s soft.

Tucker:
From what I can tell probably about a 10% reduction in what buyers’ willing to pay versus what stuff’s listed for right now.

Brandon:
That makes a lot of sense. What are you going to do differently? Because you said earlier that it’s looking a lot like maybe 2009, ’10, if that happens, how does that change your business what you’re doing? Do you stop developing? Do you focus on the lower end? Where do you see yourself headed?

Tucker:
There’s a number I’d probably start to do different. I will say, regardless of whether or not we’re in the more median price point bucket that’s selling easier, or the higher price point bucket has taken more work, the buyers feel a lot like 2009, 2010, where this morning, I got an email of like, “Hey, we were over at the house this weekend, there’s like 30 things we noticed that we’d like punched out right.

Tucker:
I was like, “Well, that’s circa 2009, 2010 where everybody wants everything just perfect.” As opposed to like, “I’ll take it.” That’s one thing we’re preparing for is just an ongoing that, but more than that too, I don’t know if you want me to get into it yet, but we’ve got some rules that we’re going to operate by. I went and looked through all of our previous stuff that we’ve done, just to reacquaint how we navigated it last time and what applies this time. But yeah, we’re going to do a variety of things.

Tucker:
The first is going to be, I can get into the nuts and bolts here, but the biggest thing, we were going to bow back our high end exposure, for sure. If we do do high end, it’s got to be A plus lot, A plus area, nothing that could be whether internally or externally wrong with the property. We can fix the internal stuff a lot of times, but the external, we can’t.

Tucker:
We’re going to limit our high end exposure for sure until we can find a bottom in it. But, I don’t know, do you want me to run through some of these things?

Brandon:
Yeah.

Tucker:
Okay.

Brandon:
Yeah, let’s do it.

Tucker:
I would say for everybody listening and just this is essentially what we’re doing. I’m not like a poster child for it, because again, we have shiny ball syndrome when we see deals come in, and we’re like, “Oh, deal, deal, antelope.” Or whatever David said there. I have to pull the reins in on myself. Even last week, I was like, “Why am I looking at this deal? Don’t buy it. It looks good, it smells good, but it just doesn’t quite fit into this box.”

Tucker:
It does take some self-restraint to do this. Before I go through it, I just want people to know that. But the first thing that I’ll say is that speed is going to be your best friend on projects. We’re definitely not doing development projects now, because if we do a development project, that means we have to replot a piece of land and make multiple lots where there’s one now. That’s going to be probably a 12 to 15 month process, if we don’t have delays from corona, and people not working and counties being shut down.

Tucker:
Looking forward 12 to 15 months, I don’t know what their value is going to be. I especially don’t know what their value is going to be when we’re talking a million dollar plus new construction. It’s going to be a real challenge to forecast that out. Speed is our best friend here right now, which means we’re going to take on essentially smaller projects, quicker to market type rehabs, because our primary function is we’re a new construction and rehabbers. We wholesale third, but primarily we’re rehabbers and new construction.

Tucker:
We’re going to look for stuff that we can take down, and we can take it back to market as quickly as possible. That then takes me to the second rule that I’m trying to abide by, and this is where I almost broke my rule last week, but we’re going to try and buy homes that are not as old as we would have previously. Anything that’s like, ’50s, ’40s. I did a webinar last week, I said, “Don’t buy ’40 houses.” Because that’s what we didn’t do back in 2009. Well, now that’s the same as ’50s houses. I guess they made a point there.

Tucker:
But anything ’60s forward, it’s usually less of a project; ’50s, ’40s, ’30s, ’20s, they’re just a pain in the ass.

Brandon:
Can you explain, for those people who are new listeners, what’s the difference between an old house, what kind of challenges do you experience in those 1910, ’20. You’ve got those in Portland, just like we did in Washington, the 1900 giant house. What’s the difference between that and the newer ones?

Tucker:
The first problem you’re going to run into is foundational issues. Because I call it the old crumbly Portland foundations, Washington has them too, but you pick at them and they just fall apart. You got funky, crawlspace height, you’ve got lath and plaster everywhere, you’ve got knob and tube wiring, you’ve got old windows, you’ve got funky floor plans, you basically have to redo everything, reconfigure everything, if you want to get 100% of what market value is for this property.

Tucker:
You’re taking a very old house and trying to make it brand new, which it’s just a lot of work, it really is. Then that adds into your timeline to get it to the finish line, and then also the amount of money that it’s going to take to get there, because the older the house is, the more likely your rehab budget is going to get blown up.

Tucker:
You can try and create a budget for an old house, but I don’t know one person that’s ever actually hit that budget. We’ve done a lot of houses and we still can’t get it right on these older walls, they just can’t do it. We’re going to resist buying older homes as much as possible. Ideally, ’60s, ’70s ranches are the perfect houses. The one we just sold last week, that was actually an ’80s ranch, and we were in and out and sold that thing as quickly as we could, given the situation. But, we didn’t have to do a whole lot, we were really… The electrical was fine, the plumbing for the most part was fine. We opened up a wall. Roof had been replaced in the last 10 years, so it was okay. Siding was good, windows were double pane aluminum, but they could be kept and cleaned up. Just the HVAC system was still good, it had been replaced once since it was built.

Tucker:
Just a better, easier product to take in an investment grade form, and then take it to retail form on the other end. Speed of project ties into essentially the age of home that you’re buying. The older the home you buy, the longer that project’s going to be and ultimately, the more money you’re going to spend on that rehab.

Brandon:
I remember my first few… Most of the first few flips and rentals I bought were all pre 1920s. I did a lot of my own work. I was just very used to the fact that you tear out a bathtub, the new bathtub that you buy at Home Depot isn’t probably going to fit. You open up a wall and you’re going to find problems. Then I started doing some newer house, especially now here, we’re doing condos and newer stuff, like I think 1970s. The one we got right now is like 1999, I think.

Brandon:
It’s amazing how much easier it is to rehab a 1990s property than a 1920s property. It’s absurd how much easier it is. You just cut the drywall, and the new drywall fits exactly the same width. How amazing is that? It goes back to almost like what you were saying, David about the mice. At the same time, it’s not just the size of the deal, but just… A 2,000 square foot 1920s house, it’s not the same as a 2,000 square foot 1980s house. It might be half as much to rehab the ’80s one.

David:
That’s what experience will teach you. Is the experienced person looks at that 1920s deal, and they don’t get caught up in a metric like just price per square foot or look, there’s a comp down the street for whatever. They are seeing the effort that it will take to get them there, and then you develop a feel for, is the juice worth the squeeze?

David:
That’s really what Tucker is describing, is he’s done this enough times that he’s recognized the juice is worth squeeze in these areas, and now that we’re going into some changes, this is how I’m going to adapt, and this is really good stuff, this is exactly how people should be thinking. This is why Tucker’s not saying, “I’m freezing all operations. I don’t know what to do. I’m just going to freeze in place and wait to see.” He’s just making tweaks and moving forward.

David:
Older homes is something that… Because the market’s been so hot, we haven’t really asked the question, “How old’s the house?” It really never comes up. It’s just, “Can I get it, or how big is it?” But as things start to slow down, that should become something you think about.

Tucker:
It’s a trap. I mean, it really is because I don’t know many investors that get done with a ’30s or ’40s remodel and they’re like, “That was awesome.” Most of the time they’re like, “Thank God this thing closed.” In appreciating a harder market, sometimes you carry a higher price and you make some more money and it balances it out. You’re like, “Okay, well, it was good.”

Tucker:
But when you’re in a potentially depreciating market, or at least there’s some downward pressure on pricing, your budget inflates here, your timeline inflates there, and the price you get for it comes down a little bit. You just rarely look at those and go, that was a good idea.

David:
Okay. What else have you got for us?

Tucker:
The next one, and this is… Again, it’s going to depend on who you are and your skill set and your market. But generally, I don’t want to deviate too far from the median price point in any given area. I know that’s a blanket statement, but median price points, they change a lot depending on even within a certain area like Portland itself has a median price point of upper fours, Lake Oswego, where we do most of our stuff, it’s in the sevens. We try and stay around median price point wherever we’re at as much as possible.

Tucker:
To do that, quite frankly, you can’t really do new construction these days, it just doesn’t make sense. It costs too much to build, the permit costs are too high here. You have to renovate existing construction. We’re going to do the best that we can. If we’re going to take on a project apples to apples, we will choose a newer built home that’s closer to median price point before anything else.

Brandon:
A question for you on that. If you’re not going to do new construction, you’re not alone in those fears. I’m sure there’s… Not fears, just in that being careful. There’s probably a lot of other developers thinking the same thing. I’m just curious from an economic, big picture standpoint, from David, from you and from Tucker, but I’ll start with you, Tucker. But, what does that mean, three years down the road? Are a lot of developers going to stop now? Three years down the road now we’re going to have a massive housing shortage, or does that not really matter? Do you think that now plays into it? What do you see this long term ramifications of the new build slowdown?

Tucker:
David probably saw it, but the HMI the Housing Market Index went from 72 to 30 last month, which was-

Brandon:
I don’t know what that is. What is that?

Tucker:
It’s basically build our confidence. They pull a bunch of national builders, and that was the largest drop month over month on record. We’ve been hovering between 68 and 72 for a number of years now, and they dropped all the way to 30. That basically says, I don’t know if I can swear on this, but it means-

Brandon:
Sure.

Tucker:
It means they’re scared shitless. That frightens them based on all the economic implications of what’s going on right now. To answer your question, I think there will be probably a void at some point. I don’t know how big that void is going to be, I don’t know how much they’re going to stall out on building. I know, there’s two camps of builders right now in our market, one is just blind faith, still going with it, and other ones are like, “We’re pumping the brakes, and we’re going to try and read the tea leaves a little bit here before we advance forward on the dirt that we own or the projects that we’re in the middle of planning or whatever.”

Brandon:
Okay, that makes sense. What do you think, David? Long term, what does this do to the economy?

David:
Well, I think that we've had a housing shortage, at least in the market that I'm at in a lot of other markets. There's been a lot of wind at the back of the economy of America that's made housing much more expensive. If you're not in the upper tier in your market for income, it's already been very, very difficult to buy a house. Typically, you had the first time home buyer, the entry level homes, the ugly ones that had decent bones, but nobody really wants them. That's where you get your first house and you get some equity and you move up.

David:
But a lot of people are buying those as rental properties now, especially the ugly ones. There's so many investors that really eat up that bottom tier of the market. Like Tucker, if he does his job well, he gets that property before it ever even gets the MLS. There's a lot of other people doing that because of technology increases and so much capital floating around.

David:
That house that used to make it to the MLS, someone’s like, “Wow, look how ugly that thing is. If someone could just take on a do it yourself project and get a good price.” It doesn’t get there anymore. That’s part of why more homes are tougher to get into, and now there’s more regulation, it’s just harder for builders to build houses.

David:
People don’t realize that every time you add a permit process, a regulation, something to make the job harder, you make it more expensive for someone, which forces them to now build a house that’s more expensive, which makes it harder to make affordable housing and then we scream in the country, “We want more affordable housing.” But you can’t have that with extra regulation.

David:
One thing that people have to understand about a builder, let’s say that Brandon, you want to fix up your house. You’re like, “Well, should I put 20 grand to repaint it, or put a new roof on it? I don’t know, are prices going to go up?” It’s a $20,000 decision you got to make based on the confidence you have about if that investment’s worth it in that given moment. But when you’re a builder, you don’t get to build in chunks, you don’t get to upgrade a bathroom or a kitchen, you have to spend the entire amount of capital upfront to build an entire asset. If it doesn’t sell, you get the thing back, or you have to decrease it massively and you lose a ton of money. The stakes are so much higher for a builder.

David:
Yeah, you can make more money building a house than just rehabbing one, but you also have way more risk. Builders have to be extra careful. It’s full steam ahead when the economy is amazing, but other than that, they got to walk with trepidation. It’s just by the nature of the game, they can’t break their risk into smaller portions like when you buy a house from the 1930s and then you upgrade the electrical and 10 years later you put a new roof on it. You slowly upgrade that house over time putting little bits of money in it as you feel comfortable.

David:
I think this is something that we should get used to seeing when we have a big scare like this, the smart builders, really any builder that’s worth their weight in salt or gold or however that saying goes, is going to say, “I got to wait, make sure there’s someone who wants to buy this house.” If Tucker puts the house under contract and it doesn’t work, well, he could rent it out, fix it up, he could do less rehab and try to get rid of it faster. He could wholesale it to someone else, there’s options that that person has. A builder really doesn’t have any luck. They’re borrowing millions of dollars, they’re developing land that could be completely useless if that house doesn’t actually sell, and then they’re dumping tons of money into building this house with one exit strategy. With more risk is going to come more expense.

Tucker:
That’s a good point. It’s a big… Just so people can understand it, if we were to build a house, it’s a six to eight month commitment to get to the finish line. Whereas if we renovate one of these newer built ranches, we’re in and out in six weeks. If you’re in a market where you’re not sure Where the footings going, where’s the bottom going to be? What kind of pressure is coming on pricing? Which one do you want to do?

Tucker:
We’re a hybrid company, we’ve always been. We renovated first and then we got into new construction. A lot of builders are not that way, they just went straight into building because their dad did or family member they started to build a house, then they never go back. Becoming really good at renovating houses, that’s an acquired skill set. You can’t just be a builder and then back up and just be a great at renovating houses too. It’s almost two entirely different businesses.

Tucker:
They’re firmly entrenched in that new construction world and there’s a lot more risk to it. We have one right now that I’ll have plans approved probably next week for probably $2.8 to $3 million build. It looks over the lake, it’s in an amazing area, but two months ago, I would have been like, “Let’s get this thing built and we’ll bang it out and we’ll make a ton of money and it’ll be great.” But now I’m like, I don’t know, is it right? Should we be doing this thing? Maybe it’s an A plus lot in an A plus area, but still, I want to see how this shakes out before I hit go on that, because I can’t just do a little bit here, and a little bit there, that’s going to be a million, 2 million, five, build out.

Brandon:
Yeah, crazy. The reason I asked that question too about what does that do to the economy, I’m just thinking there should be… I’m sure somebody listening to this has this data, but it feels like it would not that complicated of an analysis to run to figure out how many new homes are being built in America every year or in a certain state or market. How many new homes are going in, how many homes are going out, they’re demoed? Then how many new people are starting to buy or rent, and how many people are stopping buying or renting?

Brandon:
Generally, those four numbers should generally always even out in the market for the most part. When one goes down, one goes up. Obviously there’s some changes there, where people double up and they live with their parents longer and stuff. But anyway, it would be interesting to run some predictive spreadsheet work on that.

Brandon:
Again, if anybody has that, listener in the show who has some really fun details on that, feel free to shoot it to us in a message or something on Instagram and let us know because that’s… My thought is, if we see a housing shortage even more than we already are. Already, like David brought that point up, there’s already housing shortage. If that happens, especially in the world of rentals, but also supply and demand says that, that will make… If there’s less supply, the demand goes up, the price goes up. We may see rents going up after all this. We may see property values going up because of all this long term… I don’t know, it’s an interesting-

Tucker:
One point that I want to make, and I had made this in the presentation that I gave last week to one of our followers is that, going into 2009 when we did a lot of these projects, the average number of months of inventory on a countrywide level, it varied a little bit city by city, but it was 12 months, which now if I told you had 12 months’ worth of inventory, you’d be like, “Holy shit, we are in a tough spot.”

Tucker:
We were selling houses in ’09 with 12 months of inventory and it didn’t seem like it was that big of… It was a big deal, but it wasn’t like oh my God, the world’s on its head. right now, our most recent numbers were under two months for the Portland area. There is obviously some supply and demand effects going on.

Tucker:
The challenges with new construction and how this will fit in is that generally new construction is higher price point. Unless you’re in middle America where they’re planning 100 lots and they get their dollar cost average way down per lot, and they build them out as cheap as they possibly can, and they sell them for 299 to 399. That’s really the only place in America you’re going to find that cheap housing that’s new. But generally on the coast, you’re looking at 600 plus for new construction, entry level new construction.

Tucker:
As you start to get up into those higher price points, jumble loan financing is a big issue right now and getting people… For example, the one we’re selling right now, that’s a million plus, they have to have 20% down and they have to be gainfully employed for a while or at least on an underwriting perspective, it’s not going to be an at risk type job, and then they have to have 12 months’ worth of reserves that are not in a retirement account.

Tucker:
That slims down your buyer pool dramatically. Even though you might have a low amount of supply, that bottlenecking in the world of finance or those additional hoops that people have to jump through or criteria they have to meet, it slims down your buyer pool as much as you have low inventory and products. Even though you just have low inventory, that’s not the end all be all that the market should have upward pricing.

Brandon:
Fascinating. We have to find ourselves an economist to come on here [inaudible 00:37:24]Who’s the top guy in the US with that? We got to find that guy and get him on here.

David:
I tell people all the time that really buyers drive markets. Buyers determine how many people put their house on the market to sell, buyers determine how quickly it’ll sell, buyers determine how much they’re going to pay for it. It’s how much money the buyer makes, it’s how confident the buyer feels, it’s how many options the buyer has.

David:
You can have a market with a ton of houses, if there’s no one to buy them, it doesn’t matter. You can have a market with only a handful of listings, but if all the buyers are super picky, they’re still not going to sell over asking price. It’s really the thirst of the buyer that determines what happens in a market. If you want to know markets, understand all the things that affect what makes buyers want to pull the trigger.

David:
Part of why it’s really hard to invest to buy cash flow properties in the Bay Area, is that there are so many people here that would pay way more than investor because they just need somewhere to live, and they don’t need a great deal. They make plenty of money, they just want to get the house. They’ll easily spend 30 grand more to know it’s locked up, and it’s mine, and I don’t have to worry about writing in offers for another three weeks to find something.

David:
You’re going to compete with that. You’re competing with… You’re trying to find an off market deal. Well, everybody knows their house is worth money out here. It’s very hard to find someone that doesn’t know their house’s worth… What it’s worth, because they hear about it all the time. That has a huge impact on the psychology of the people that shop here and then the price you can get on the house. That’s why I like to go to other markets, because not everybody knows in other markets what their property is worth or they know if I spent 50,000 I could make it worth $200,000 more.

David:
A lot of those markets don’t have as many people that are primary residents buyers you’re competing with. You’re competing with other investors who also want a good deal. Makes it a little bit easier to get what you need.

Brandon:
For sure, makes sense. Well, Tucker, what else have you got for us?

Tucker:
I got a couple more that I think are important. I’ll rattle these off for you guys. But I guess number four is, because I’ve given you guys three, number four is, and you know this, Brandon, and I’m sure you do too, David. For the last, let’s call it three years, there’s been this big mantra out there that the key to this business is marketing. Marketing to get leads in, leads equal deals.

Tucker:
If everybody’s put their emphasis or their desire to learn about this business on marketing, how do I connect with potential sellers of investment grade real estate? That’s great, and that’s a necessary skill for sure. But another necessary skill is to understand the product itself. I think a lot of investors, they don’t understand the product itself. What I mean by that is the actual house.

Tucker:
As we head into a slower market, the biggest challenge that we're going to have is recognizing okay, not only do I not want to buy an older home, but am I buying a house that has some sort of weird functional obsolescence? Whether it be internal or external? Can this floor plan be fixed? Does it have a bathroom on the main floor? If it doesn't, it's a weird house. A hotter market carries that and people look past it. Does the neighbor next door have blue tarps all over everything? If it's in a gentrifying, getting better quickly type neighborhood, then people will look past it. But when the market slows, that gentrification stops, and then people look at it, they go, "He's going to be there for a while. I don't know that I want that." Or is it on a busier road that… In a hotter market, busier road stuff always sells closer to 100 cents of what any normal house would sell off a busy road.

Tucker:
You get on a slower market, it gets punished by probably 15%, maybe 17%, where in a hot market, maybe it’s 3%. There’s all these things that a lot of people just haven’t acquired those skills to recognize over the last few years because you haven’t had to. Now, you really need to have a keen eye for that. I would stay away from houses that have functional obsolescence, whether it be… Or functional challenges, whether it be internal or external. Stuff you can’t control, it costs more money to control it, right? You got to fix things or if you can’t control, well, you can’t control it, you can’t fix that.

Brandon:
I had a house that I bought, I flipped it, well, sort of flipped it back. I think it was 2009, it might have been ’10, but it shared a driveway. It’s like this little tiny neighborhood, a C-class area. Little tiny house next door to a bunch of other little tiny houses in this little neighborhood. The house shared a driveway. It’s a short little drive, only like 50 feet long, but shared it with the neighbors. It was a double wide driveway. But the two driveways basically was just one solid slab, and then the houses were on the edges. The driveway was in between the two houses.

Brandon:
Anyway, but the neighbor’s house was just a disaster. Just like a broken down car or two in the driveway, piled up windows and all this stuff. That house, man that just did not sell. It was on the market for, I think six months. I actually moved into it for six months while I didn’t know what else to do. I was panicking, I had to make the payment. That was rough.

Brandon:
We finally ended up selling it for about what we had into it. We sell it for 60 grand. But a year ago, house down the road, I’d probably get like 120 for it, but people would look past it, oh, the neighborhood’s fine. The neighbor, we’ll take care of him, he’s not a big deal. But it’s going to matter a lot those issues. I love that you brought that point up, I had not thought about that in a while.

David:
It’s so good. We don’t talk about this very often. It’s one of those things where when the tide is rising, you don’t have to pay attention to what obstructions might be under the water, because it just keeps going up. I see that in the market. Where I live in a city called Brentwood in Northern California or close to it, and we have this area where they’ll build all these houses that share one driveway. They’ll have one long driveway that goes all the way back and maybe six different houses that are three on each side along that driveway and they all share the same thing.

David:
When it’s a red hot market, the buyers are like, I don’t care, I just got to share a driveway. I really like that granite countertop and I want to go buy that house and I’ll try to talk them out of it and they just don’t want to hear it. Like, “No, no, no, this house just feels right.” But I know when the market shifts and the tide goes down, nobody wants that, nobody wants a driveway they got to share with five other people that they don’t know, and you’ve got houses stacked up on each other that close. It is very smart to think about things like that.

David:
Just like the 1910 house, it doesn’t matter at all. Like Tucker said, in a hot market, it’s all the same. When it goes down, and there’s less buyer demand and people have more options, they don’t want a house from 1910. The minute they hear the words knob and tube, they’re like, “See you. I don’t want anything to do with that.”

Tucker:
Absolutely. Another example would be, master suites are a huge thing. We want to find a house that has more than one bath, because if you have a one bath house, that’s the type of product that gets punished in the solar market too. Or if you have really small closets in the master, that’s the type of house that gets punished in a solar market.

Tucker:
Now, let’s say it’s a ’70s, ’60s house and it still has the original single pane aluminum windows, in a hot market, they’re like, “I’ll take it, whatever.” In a cool market, they’re like, “Well, we want the windows replaced.” Then they get some ungodly bid from some retail GC that they hand you with their repair addendum for like 40 grand to replace windows, and they want a price reduction.

Tucker:
Stuff like that happens a lot. You just have to be aware of that. It’s a skill set some people have acquired, but a lot of people have not as an investor over the last few years because they haven’t had to.

Brandon:
Makes sense.

Tucker:
That’s the big one. Then the last big one here is just how we underwrite stuff in terms of whether or not we’re going to do it. Let’s say it passes the other tests and fits within these boxes that we’re creating here for ourselves, and that’s the pricing strategy. How do you say yes to a project based on pricing? Everybody has their own threshold based on capital costs and distance that they’ve got a drive to get to the project and what they’re willing to take on a project for. That varies for everybody, but you can apply these three pricing strategies regardless of where you fall on that spectrum.

Tucker:
We look at it like we have our hopeful pricing, which most of the time in a hot market, you get your wholesale pricing, sometimes you get more than hopeful. You’re like, “It sold for 20 more than what I thought.” Then you’ve got likely pricing. Hopeful would be best case, likely would be most likely. Then you’ve got oh shit, oh shit pricing is like the sell it in a day, get an offer in a day price.

Tucker:
If we can do the project and it makes sense with the sell it and an offer in a day price or the oh shit price, then we do it. That’s how we underwrote everything back in ’08, ’09, ’10, ’11, all the way up until really probably later in 2012 when the market started picking up steam, but that’s how we said yes to everything, and it worked out well. I think we’re going to go back to doing that exact thing again.

Brandon:
Yeah, so many investors have gotten like… Myself included, I’m sure David you probably as well, I’m not talking bad about people, but I’ve got these rose colored glasses. Our glasses are getting more and more rose colored as we got into the good market. It makes us, rather than thinking worst case scenario, like, “Well, I think this will probably sell for this price.” Which is all super optimistic, and it’ll sell for way more than we think, at least above.

Brandon:
You don’t even think worst case scenario because it’s unlikely to ever happen. I think you’re right there exactly, we need to be realistic in our pricing, and assume the worst going in, or at least assume a pretty bad scenario. If it works out better than that, then awesome, then we all win. But really good point.

Tucker:
I love how simple that makes the decision. Does it meet the, oh no price? Yep. Then let’s do it, and we only have an upside. If it’s, we might hit the likely price, we could miss that, we’re not going to very unlikely to hit the, I hope so price, then don’t do it at all. Because you got to learn how to punch through that analysis paralysis where your brain is trying to figure out 7,000 options of what could happen like a computer, and you’re just not designed to be that way. If you make it that simple, we can not lose money, we can at least make money or breakeven, and then we have a high upside, you know whether you should do the deal or not.

Brandon:
There’s that flip I’m doing right now in Maui, that we’re almost done working on. We’ve been talking on the show for the past couple of months that I was not sure if I was going to do it or not. I’m doing it. We bought it for 900. Right about 800, 900. Bout it for 900 and then the best case… The top price, we were like 1.3. Then it was like likely, 1.2 and then it was like 1.1, 1.05 if we had to. Now, today I’m like yeah, we’re 1.1, 1.05 might be more realistic. Our breakeven is at about a million at this point. If we sell it for a million because we don’t have to put that much of rehab into it, we’ll have broke even. If we go under a million, the agreement basically is okay fine. If we cannot get a million for it and break even then I’ll turn into a rental. I’ll go refi for let’s call it for 750,000 rent the thing out for $5,500 $6,000 a month and call it good, at least break even over the next little while.

Brandon:
But yeah, that’s how those three tier price. I really wanted the 1.3, but you know what, it just might not happen and that’s okay.

Tucker:
A lot of people are midstream on their projects right now too. This came on last time around like it was a slow burn to get to problem status. I got the calls in March 2007 of the wholesale lenders shutting off their pipelines, which then basically, eight months later the Dow cratered. It took a while to get to that point where everybody was like, “Okay, we need to reassess how we’re pricing stuff and what’s going on with the world of real estate.” This was like two weeks has changed.

Tucker:
There’s a lot of people that are mid stride with these projects. Anybody that has a project like yours, I’d be like, take it to the, we’ll call it the oh no price, so I don’t swear constantly on your show, but let’s take the oh know price, and let’s just get it gone, move it. Because if you list it as hope or likely, you’re probably going to have to reduce it anyway, and then you’re going to get stale inventory, and you’re going to be sitting with everything else. It’s just like, sometimes it’s best to just get it to where it sells and goes, and especially in a market like this.

David:
Sometimes you make more when you do that. It's so hard to price the house too low. I've learned this as an agent, you almost can't price it too low if there's any kind of demand, because people will come in and you'll get more than one offer and they'll bid it right back up to where it should have been or even more than it should have been, because now you have all that emotional fear of oh, I don't want to lose the deal.

Brandon:
That’s interesting. I was going to comment about, don’t try to chase the market down, it’s what you’re saying. I’m not going to start at 1.3 and then wait a month or two, then go to 1.2, I think we’re listed at probably 1.05 and if we make 50 grand off it, we’ll call that good, and if not, whatever, we’ll deal with it. But also this is why knowing… The thing that made me want to go into it, one, was because we decided we could rent it out and at least break even, but two, we are speeding through it as fast as humanly possible. We’re going to have the whole rehab done in two and a half, three weeks and back on the market again.

Brandon:
We’re already letting agents know it’s coming because everyone else is pulling their houses off the market. We’re letting people know it’s coming and trying to pre-market the thing a little bit.

Tucker:
Do you know what the median prices for condos around there?

Brandon:
In that area… This is actually a house but median price is like 1.2. We’re below the median price as well, we’ll be the cheapest house in the neighborhood for the past year.

Tucker:
Your deal fits within really this-

Brandon:
It fits within the rules-

Tucker:
Okay, you just would have bought it for a lot cheaper if this had happened later, but you can’t fix that.

Brandon:
Mid-stride, I’m like, whatever, we’ll make it happen. A lot people listening right now, like you said, are in mid stride. Do what you got to do.

David:
Don’t be afraid to take an L, though. It’s so much better to lose a little bit of money and get out of the deal than to chase the bottom. That’s just that ego metric of I can’t sell it for less than a million because then I’m losing money is stupid, because if you have $200,000 of your own capital in that deal, and you won’t sell it, and another deal comes along me that you could have made 50 or 75 grand with that money, you didn’t break even on the deal, you lost 75 grand that you could have made-

Brandon:
On something else.

David:
This is just what experience people understand is if I got to get out of this deal, and lose 10, 20, 30 grand, but I have my capital to go do the next deal, and I make 100 grand, well, who cares?

Tucker:
Yeah. That’s what we’re doing with one of our high new construction, we’re clearing the books. We’re making some money but not nearly as much as I’d hope right? I’m at the oh, no price, that I’m selling it at, but we’re clearing the books, and we’ve got almost a million dollars of capital coming back in. There’s opportunity of cost attached to that if we sit out there and hopefully we make another 20 or 30 or 40 on that, when I’d rather just have it in play. It doesn’t matter what the dollar amount is, it’s all relative, but you get that back in, and now you can redeploy based on new pricing metrics for this new world that we’re in.

Brandon:
Yeah, really good stuff.

David:
All right. We’ve got five things to rehab, we’ve got speed is going to be your best friend in the market where prices are dropping or could be dropping. Buy homes that are not as old as you previously would have considered buying. Don’t deviate too much from median house price in an area that’s really good. Avoid red flag properties, like a bad layout, a busy road, small closets in the master bedroom, shared driveways, and then have your three options; the hopeful price, the likely price and the oh no price.

Brandon:
Yeah, that’s a really good, really good.

Tucker:
Thank you.

Brandon:
All right, Tucker, though, let’s talk real quick because some of the people listening to this right now are wholesalers. People who they go on out there, they’re looking for good deals, and then they’re going to wholesale them or basically sell them quickly without doing any work to a house flipper or whatever. Wholesale is that middleman, for those people who are not familiar. What should they wholesale in this market? Do the same things apply or give any advice for those people.

Tucker:
Well, I’ll tell you this, first off, we’re in a front end, choppy period here, where nobody really knows what the bottom is going to be. That’s a tough time to wholesale, because most of the wholesalers I know right now that are trying to shop stuff, rehabbers are pulling back. They want a really juicy deal if they’re going to do something right now, because they don’t know, they don’t know what’s coming.

Tucker:
Wholesaling will get progressively easier as we can conclude where the bottom is on pricing. For example, like the stock market right now, some would argue that there’s another leg down to be had, but it’s been trading within a very tight range for the last couple of weeks. A lot of people think that’s the bottom. If you take that and you apply it to real estate, we’re kind on the front end, we don’t know where the bottom is yet, but maybe a couple months from now, once everybody gets back to work, you’ll have a better idea of that. It’ll make wholesaling easier because you’re selling to people that just have more confidence that values aren’t going to deteriorate as quickly as they could.

Tucker:
As a wholesaler, generally, if you can wholesale a simple [3132 00:53:13] ranches all day long, that’s the ideal rehabber product. If that’s the type of stuff you go after, you’ll sell that all day long, because rehabbers can quantify the rehab, they can get to the finish line quickly, they can comp it real easy. There’s no functional, weird stuff going on with the house, and ranches always sell well.

Tucker:
If you’re a rehabber, or a wholesaler, excuse me, that would be the stuff that I target. Whatever that bread and butter type housing is, that’s not too old, that’s the easiest stuff to sell. On a type of product to target perspective, that’s what I would say.

David:
That is so good. People don’t understand how the home buying market works. When I became an agent, it really opened my eyes. A lot of the time we have this understanding that there are a number of homes and there are a number of buyers, and they are equally dispersed amongst each other. That’s even how we look at the metrics. How long is this house sitting on the market? How long will inventory last. But when it comes down to making a decision to buy a house, you’re not looking at every house like it’s equal. There’s a very specific classification of home that will always be more demand than the other ones. When the market becomes hotter and confidence goes up, people are willing to stretch a little bit further to get there, which ultimately ends up in luxury housing.

David:
Like you said, Tucker, that’s what you think is most at risk. As the market gets more uncertain, people pull in, they get scared, and they want to keep things close to the chest. They’re always going to be going for those bread and butter, a little bit under median or right at median price homes. They don’t need to be completely gorgeous, but they should be clean, in a good neighborhood, without weird stuff like a busy street or a shared driveway. Even in a terrible real estate market, those houses will still perform okay or good even. It’s everything that isn’t the ideal home that will start to suffer.

David:
Like you just said, or this will work for area as well. If the market gets bad, San Francisco doesn’t really get that bad. People still want to live in San Francisco. It’s those cities where you got to drive an hour to get into San Francisco that get crushed, because now there’s no reason to stretch out that far. If you just understand that principle, like you said, when things are getting worse, you just have to go for the more primo properties, that you can’t stretch as far as you could get away with when it was a red hot market.

Tucker:
Yeah, very wise advice.

Brandon:
That’s a good point. Hey, one thought that came to mind while we were talking about the wholesaler thing, for those people who are listening right now that are new wholesalers or new to real estate and you’re trying to get into wholesaling, one thing that could work pretty well right now is to rather than normally how people approach wholesaling is, I’m going to go out and market to a bunch of deals. I’m just curious you guys’s thoughts on this, I’m making it up as I go here. But rather than going out and marketing for a bunch of property, seeing what you can get, getting some under contract and then going out to a bunch of buyers to try to get somebody to buy that thing. You’re just blasting and blasting.

Brandon:
It almost seems like it’d make more sense at this point because we don’t know who’s going to be buying your deal, and there’s very few people buying, go find the buyer first. Find out exactly what that guy wants. I want a mobile home parked with 100 units. That’s what I want. David wants something specifically, Tucker, you want something specifically, those ranch houses, right? Go talk to the end buyer, tell me what you want and then go out and find that thing.

Brandon:
Wholesaling should be a whole lot simpler in to regards when you don’t have to market to a bunch of different people necessarily, but two, you can really focus your marketing on one specific product, get really good at that thing. Does that make sense?

Tucker:
Yeah, I think so. For a while now, there’s been, for lack of a better term, a lot of dumb money chasing deals. With that becomes a much bigger buyer pool. People are just throwing stuff into the piranha pit, and they’re like, “I’ll take it, I’ll take it.” But now, it’s like, just find a few good guys that actually are well capitalized and are still buying and they know what they want and just go find out for them, that’s it. You’re actually at a pretty good point if you’re just getting into wholesaling, because we’ve been in probably the most competitive wholesale type environment that I’ve ever seen for the last few years. Well, now the tide is going out, and people are not going to want to spend as much money on marketing, they’re going to freeze it, their operations are unwinding a little bit.

Tucker:
There’s a lot less noise in people’s mailboxes, there’s a lot less ringless voicemails going out, there’s a lot less cold calling happening, all those things that wholesalers did at such a huge volume previous to this happening, there’s just a lot less competition out there. If I was getting into it now, it’s as good a time as it’s been, in my opinion during the last few years.

Brandon:
Yeah, that’s really good. Really good stuff. All right, man. Well, let’s head over to the next segment of the show and dive a little bit deeper. It’s time for the Deal Deep Dive. All right, let’s get to the Deal Deep Dive. Tucker, we want to get into the details on something that you’ve bought. Do you have something in mind, something that we can talk about?

Tucker:
Yeah, well, let’s look at a couple deals that I actually bought. We’ll call it back… I think these were 2009 deals. They apply to exactly what I’m talking about now. This might be a good place to insert, not only am I talking it, but this is what we did.

Brandon:
Perfect. All right, cool. First of all, what kind of property is the first deal?

Tucker:
Just to frame it, one will be a [inaudible 00:58:27]we’ve made money on both, but one would be one I do again, and one would be one I wouldn’t so people can see the parity there.

Brandon:
Sure. What kind of property is it?

Tucker:
The first one, we’ll stick with the theme here. This was a classic three bedroom, one and a half bath ranch style home. It was about 1,134 square feet and it was built in 1978. We’ll call this Curtis Avenue, which I guess there’s a lot of people who listen to the show, I won’t give you the actual address, but if you look at First Avenue in Portland, Oregon, and you look back to 2009, you’ll see that TTM has sold a couple of homes on that street.

Brandon:
Okay.

David:
All right. How did you find this deal?

Tucker:
This was back in 2009. For those of you guys that heard stories about way back then or you actually were in the business back then, there were these things called REOs that came on the market. You used to call in romance REO realtors and tell them to call you first if they got any listings that were in an absolute terrible shape, or you watched them on market for a while until they hit about 90 days and then you started blasting lower offers at them. This one was actually an REO agent that we called and romanced a little bit and they gave us first crack at it because they were going to price it aggressively.

Tucker:
We actually bought it on market. Back then you could do that pretty easily, and I think you will, moving forward a little bit, more easier than you have in the recent past, but this was when we got off market. It was an REO listing.

David:
I remember those days-

Brandon:
How much did you do?

David:
I was not much at romancing at that point, I was kind of just like, “Hey, I got some money, do you want to give me your house?” I just shotgunned it, just the total inexperienced. Just tried to talk to every single person in the room instead of going deep with the right one, but you did it the right way.

Brandon:
There you go. How much was the property?

Tucker:
Back then, believe it or not, you could buy houses for $134,000 in Portland. Nowadays, that’s a cheap piece of dirt way farther out, but we bought it for $134,000. I pulled the numbers on here, I assume you want me to throw them, but we actually renovated the house, believe it or not for 31 grand, which is virtually impossible to do these days, unless you’re just painting and carpeting something for the most part. But we did-

Brandon:
That’s one thing we don’t talk a lot about, it’s amazing how much more expensive rehabs got. It blows my mind… Because it’s like, do contracts are just charged twice as much, is materials twice as much? Not even twice, five times more, sometimes it feels like. I don’t know how that happened, but it did happen.

Tucker:
Labor has gone through the roof. I was looking at labor line items, we paid a lot less for labor back then. I think moving forward now because, I don’t know about you guys, but the subs that we’ve been using for the last couple years, it was us getting on the phone like, “Hey, did you get us on the schedule? Did you get us on the schedule? Did you get us on the schedule?” After the fourth call, “Yes, we do.” Now, there calling us like, “You got any work? You got any work? You got any work?” What does that tell me? Well, it tells me they’re going to work for a lot less money moving forward here while we’re in this period.

Tucker:
Yeah, labor prices went through the roof over the last few years. But we bought this deal for $134,000, we renovated it for about $31,000. Then this was in… Let’s see, we sold it on 10/22/2009. Keep in mind, its worth of inventory at that point in the market, approximately. We sold it in three days with multiple offers, and we sold it over list price. We listed at 199, we sold it at 208. We ended up making approximately 35 grand and some change on this, which for about a three month flip, this was a great deal back in 2009, especially for the amount of capital that was actually deployed to buy and sell this thing and the amount of rehab that was done.

Brandon:
That’s cool, man.

David:
What lessons did you learn from this deal?

Tucker:
This one was your classic… Speed was definitely a lesson here. It was a quicker rehab. We were in and out faster than you would be with an older home. It was a simple house, it was little over 1,000 square feet. There were no structural changes that needed to be done. It was basically paint, carpet surfaces, light fixtures, things like that. It had a standard bed, bath count. It had one and a half baths. It didn't have a master suite, but we were selling it below median price point at the time, median price point was about $270,000. We could get away with not having a master suite and still having quite a bit of demand for a turnkey product.

Tucker:
It was a quick rehab for the profit and the amount spent. Back then we looked at stuff like, okay, if we spent about 30 grand on rehab, we want to make 30 grand on profit. That was our metric that we used. This one fit it and under the timeline that we did stuff, it worked out great. This, just to project forward, this is the exact deal that we did with different numbers of course that sold last week.

Tucker:
We bought it for 420 and some change, we put about 65 into it and we sold it for 615. We made a little more, we spent a little more, but it was basically the same project in a different time period, in a slightly different part of Portland, but it was the same house.

Brandon:
Yeah. Interesting. Cool, man. Last question on that deal, how did you find that one? I think that’s the only thing we didn’t cover, how did you-

Tucker:
That one, we only paid 134 grand for it, so I paid cash back then for it.

Brandon:
All right.

David:
Was that part of how you negotiated it?

Tucker:
Yeah, that was part of it. It was really tough. I made the rounds back then going to banks and be like, “Can I get rehab financing? Can I get rehab financing?” It was like, “No, no, no.” We raised a little bit of money, but all the REO stuff we bought back then was mainly with just a little bit of cash that I had from that first house that I sold and some other money I’ve made.

Brandon:
All right. Well, next property, what was the second deal? What kind of property was it, the house?

Tucker:
The next one is basically one that we wouldn’t do now, and this really, it doesn’t fit within the box that we went through, but this one was on River Road in Milwaukee and the reason being is because this was a 1947 house. It basically needed everything. It had funky weird spaces, the plumbing was bad, the electrical was bad. It had a roof that was sagging. It was bigger square footage wise. Obviously, that cost more, but we paid 155 for it.

Tucker:
At the time, it was like, 155 seems cheap for the amount of square footage, but the more square footage you have, the more money you got to spend on rehab. We spent sizably more on rehab on that one, I think we ended up about $83,000. We’d hoped for somewhere in the 60s, we ended up at 83. That’s what happens when you buy an older house, your budget balloons.

Tucker:
We ended up selling this… It took a couple of weeks on market but we only got one offer on this and we ended up taking five grand under list. It didn’t perform that well. We only ended up making about 27 grand and some change on it to do an $80,000 remodel. This goes to show, you think it looks like a great house and a great lot and it is but at the end of the day you sell it, you make money, but it’s not one of those you do again. You look at it and go, “Yeah, we made money. Yeah, we turned it over. It looks great, the lot’s awesome, but we just didn’t make enough money because it’s hard to buy these older houses cheap enough to do everything that needs to be done and still make money as the market’s softening.

David:
You got to think even for people that hear, $27,000 is not that bad, I’d do that. You’re not thinking about your capital gains taxes that come out of that $27,000. Now, it’s basically cut that in half.

Tucker:
Yeah, it’s earned income. You’re basically paying her an income tax. We sold it for 295. That was a little above median, but when you spend $83,000 in the middle, that’s what you get. We wouldn’t do a deal like this. This, just to project forward, this is basically the exact deal that I looked at last week that I told Duran I said, “I had to pull the reins and be like, okay, it was in a good spot, but it was a 1920-something house. It had a new foundation on it, but all the framing was wonky, the floor plan was weird. It was going to need everything and it still was not going to be a perfect product once we’re done with it just because we couldn’t fix everything about it.

Tucker:
I pulled from this list in here, and I said, “Okay, pump the brakes on yourself here, bud, and don’t go buy this house.” Fortunately, I didn’t.

David:
That was smart.

Brandon:
I like the fact that you wrapped together this show looking at how these five rules fit in with the Deal Deep Dive. They fit, didn’t fit. A couple quick just follow up questions on that last, the River Road one. How did you find that property and then any negotiation things that went on in there?

Tucker:
Again, this was the ’09 era. We sold it 10/16/2009, we bought it in June. This was basically all REOs back then. We were buying courthouse steps stuff, but this was also an REO that we bought. It had season on the market, I think this one was on the market for like 120 days. We got them to take less, but I wish they hadn’t in hindsight.

Brandon:
Makes sense. All right, man. Well, let’s do maybe one final question before we head to the famous four. I’m going to go with this one, what are you working on now most to improve your business? What are you working on now, and I want you to relate that to our listeners as well if you can, what should other people be doing right now? Besides the five rules, just in general of improving your actual business, the running of your business, what are you doing? What should others be focusing on?

Tucker:
Just like most people, I’ve been really auditing a lot of our costs. Stupid stuff like CenturyLink, I’ve been looking at the phone bill, and I’m like, “Damn, they charge us too much money for the phone lines.” It’s amazing, we call in, we’re like, “Hey, we’re going to go with Comcast unless you can cut this bill down.” What do you know, they cut it in half, and we got the same plan. Then we called Comcast, we told them the same thing about our internet, and they cut that in half.

Tucker:
We've been auditing a lot of our expenses just because it's a good time to do that. But on an actual… The way the business is running front, we're being very aware of the types of leads that we're trying to have come into our world. We do a lot of marketing to get people to contact us. We've created a lot of new lists, and we do a lot of driving for dollars, by the way, but we've created a lot of new lists in areas that have '80s and '90s construction. We're trying to pluck those homes out of those areas that are not retail ready or slightly off retail that we can have conversations with people and hopefully buy those and have a quick buy sell.

Tucker:
We’re really ramping up the number of lists that have that exact type of product, that then we can market to, and hopefully we can buy some of those, then take them back to the retail market quickly. That’s probably the biggest change versus before, we were looking for just a lot of really great dirt, and we were going to then build out that dirt.

Tucker:
We’ve pivoted to going back to much more rehabs and that’s probably the biggest change right now.

Brandon:
Yeah, okay. That makes sense. All right. Well, with that, let’s head over to the next segment of the show, it’s time for our-

Speaker 5:
Famous Four.

Brandon:
Our Famous Four. These are the same four questions we ask every guest every week. I’m guessing yours have changed slightly in the past seven years, but before we get to it, let’s hear what’s going on this week over on the Bigger Pockets Business Podcast.

Jay Scott:
Hey there, Brandon and Bigger Pockets Real Estate Podcast listeners. This is Jay Scott, your co-host for the Bigger Pockets Business Podcast. This week on the business podcast, we have Ryan Welch, he is founder and operator of Breezy Moving. On this episode, he tells us all the secrets of how he has expanded, grown and optimized his business, spending essentially zero dollars on marketing and advertising. Lots of great tips on this episode for any of you small business owners out there. Check us out on this week’s Bigger Pockets Business podcast. Now, back to your Famous Four.

Brandon:
All right, with that, let’s get to number one of the Famous Four, current favorite, or high impact real estate investing book that you’ve read?

Tucker:
I hear there’s this guy named Brandon Turner, and he’s got some books that are pretty good.

Brandon:
He sucks.

Tucker:
Yeah, and there’s also this guy named Jay Scott who’s got some books and there’s also this guy named Anthony Young. Any combination of those three will probably serve you well.

Brandon:
All right, good deal. Sorry, David, you got left out of this one.

Tucker:
I forgot, there’s David Greene too, but I just met David, so you got to [inaudible 01:09:50]

Brandon:
He’s not a friend yet.

David:
That’s my role within Bigger Pockets, I’m that… Oh, yeah, that’s right, David’s here too. He’s just here for security. That’s basically all, make sure that Brandon doesn’t get a crazy fan that wants to go hug him or something like that.

Tucker:
I’ll be honest, I don’t read a lot of books. I listen to a lot of podcasts and just take your information.

David:
You’re also making a lot of movies like The Bourne series was really great.

Tucker:
Right.

David:
That takes a lot of time and you got to practice your martial arts. I hear you.

Tucker:
You think about a three year old and a four year old make reading a little tough.

Brandon:
I hear you.

David:
Brandon definitely hears you because he was up all night with little Wilder, they were not sleeping last night. I can see it in his eyes. Okay, I want to ask you about your favorite business book, but if you don’t read a lot of books, do you have a favorite business podcast, or perhaps a business philosophy you can share with us?

Tucker:
Traction was a good book. I did read that one for sure. There’s a number of business shows that I listen to, but I would say, I think I told you this seven years ago, my favorite book just in general, I think you can take a lot of lessons and transpose them onto business. Like How to Win Friends and Influence People. I know it’s a classic, but it’s… Businesses is just dealing with people a lot of times and you’ve got some products to sell, but if you can… There you go, if you can navigate relationships with people, everything else will take care of itself.

Tucker:
I know there’s a big overarching business philosophies that you can apply as well, but it really just comes down to how you handle people. Whether it be good situations or bad, and that book, I think, really breaks it down on the science to that.

David:
I don’t know that there’s a human being alive that shouldn’t read that book. Is that good for every single person no matter what you do, that’s a very well read book. Okay, what about some of your hobbies?

Tucker:
Hobbies, I’m definitely not short on those. I love playing basketball. It’s my outlet to stress reliever/I’m just competitive nature. I built an indoor basketball court behind my house. That’s where I’ve been quarantining, working out. But generally I play a few times a week at a club around here. I love to snowboard, I play a lot of golf. I like doing a lot of different stuff, but those are probably my three biggest.

Brandon:
You built an indoor basketball court. What’s that like?

Tucker:
Well, it’s amazing if you want to know, but-

Brandon:
I do want to know.

Tucker:
Basically, we have a detached garage, and then off the back of the detached garage, we enclose that. It’s like a 32 by 32 foot area that we framed in. It’s got vaulted ceilings, and then we put up a hoop and some heat and custom floor. It’s basically like your own training facility back there.

Brandon:
That’s cool. Through [inaudible 01:12:37]I’ve been thinking about building my own private racquetball court here on Maui, because I’m like, I want to play racquetball. It’s my game and nobody plays. I got a couple of buddies that play. It’s like 40 minute drive to the YMCA. I’m like, we’ll talk about that offline.

Tucker:
I will say I was like, do I spend the money and do it? Now, here we are a year and a half later, I’m glad I did. I think you should build your racquetball court.

Brandon:
I very will might now. Thank you for the encouragement. Last question for the day. What do you think separates successful real estate investors from all those who give up, fail or never get started?

Tucker:
That’s a big question. I think give up is probably the big takeaway from what you said there. This is not an easy business. I know, David at the beginning, we’re talking about do you grind it out, or do you move on? You have to grind it out to a certain extent in this business, you really do. Some days are not easy by any means. There’s always going to be another hill to climb. But I think people, they’re easily persuaded to not climb the next hill, or let’s say they do a marketing campaign and they get two people that call, they’re like, “Screw this, it doesn’t work.” Or they do one rehab, and they pick the wrong house and it ends up being a nightmare, and they don’t want to do another one.

Tucker:
You have to persevere, but that’s with everything in life. I think people just in general need to learn to persevere a little more and grind it out a little more to get to the other side of that proverbial mountain. Once you get there, it’s great. Everything you learn along the way, it’s not easy sometimes, but then you can apply all that stuff on the back end and playing in real estate, it’s like your own little real estate playground.

Tucker:
I know you guys enjoy it, obviously, and once you know the rules of the game, it’s not to say you still can’t make some mistakes, but it’s a fun life to live.

Brandon:
Yeah, very cool, man. Well, David, you want to take us out and ask the final question?

David:
I would love to. Tucker, where can people find out more about you?

Tucker:
Probably the best place for those of you that are in this world of listening to podcasts, you can go on iTunes, the longest running show that I have is called the Real Deals Podcast and it’s dealz with a Z. Then if you’re local to the Portland area, or the Pacific Northwest, I have a local show, it’s called the Portland Real Estate Podcast. I’ve got a co-host on that one.

Tucker:
We talk to basically all the biggest players around here that are in the real estate game. Those are probably the two places you can hear me and then you can send me a friend request on Facebook, message me there and of course, you can find me on Bigger Pockets as well.

Brandon:
That’s awesome, man. Hey, quick question. I hope this will be the last one, but you have a local podcast. I don’t know anybody else who has a local podcast. You’ve been doing it for a while now, what kind of benefits have you seen out of that? Or is it just more of a hobby, or you’ve actually seen a lot of business success because of it?

Tucker:
It’s been great. It was one of those ideas that I had just driving in the car. I was like, “Huh, a local show, there’s an idea.” To be totally honest, it took probably a year or two for most realtors to understand that there’s this thing called a podcast app on your phone, and you can listen to podcasts. But, now here we are 2020, virtually everybody knows how to listen to them.

Tucker:
It’s been great. We’ve connected… It’s really been great for relationship building with agents and other real estate professionals all over town, but it’s also been great for our lead flow and our deal flow. I insert an ad at the beginning of every show. That’s like “Hey, this is Tucker with TTM. We’re looking to buy non-retail ready product basically.”

Tucker:
We market to all the people that listen to us both email and audio-wise. We have a constant stream of leads that come in from free marketing because of it. It’s been a great resource for us on that front, but also just… Everybody knows who TTM is here locally because of that show as well, and obviously the product that we do, But, I would highly encourage anybody that is willing to stick with it to put together a local show because most markets have no competition. They’re starved for something that people can listen to, with people that are actually in the real estate business talking about it locally.

Brandon:
I think it’s a phenomenal strategy. I should start the Maui Real Estate Podcast.

Tucker:
You should.

Brandon:
I get it, you don’t need a quarter million people listening. If you got 100 people listening, and those 100 might be super important, which is one of the benefits of being a podcast guy, I’m going on this tangent now. But you get to connect with people that you would normally connect with. I probably wouldn’t have ever met you, Tucker or David Greene here, or Hal Elrod or David Osborne or any of the guys that we’ve… Tim Ferriss, Ryan Holiday, without the podcast. Even in a local sense, you want to get to know that guy that owns a 400 unit apartment down there, invite them on a podcast, there’s a much better chance than hey, can I take you out to coffee and pick your brain?

Tucker:
It’s great. The last three shows we’ve had the biggest agent in Oregon for the last 10 years, the second biggest agent in Oregon for the last 10 years and the biggest local homebuilder in the Portland metro area. When am I ever going to get their time for an hour to chat if I didn’t have a podcast like that? It’s fantastic.

Brandon:
That’s so good. It’s so good, man. Well, thank you for sharing that.

Tucker:
Yeah.

Brandon:
David?

David:
All right, well, thank you, Tucker, I think you shared not only really good information, but very unique and rare information, something that frankly doesn’t get talked about. This is a show that you should go back and listen to again and really focus on, as we said, when the tide goes out, you see what was really underneath the water and it matters where you park that ship, and you don’t want to be in the wrong spot when that happens.

David:
Thank you for sharing that stuff. It doesn’t get talked about very often. Most people like to just focus on their success, but you really went into some things that can get people burned. I personally I appreciate that. I know our guests do too. This is David Greene for Brandon the Podcast OG, Turner, signing off.

Recording:
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In This Episode We Cover:

  • The economic indicator Tucker pays closest attention to
  • What homebuilder confidence says about the economy
  • Getting out of a career he wasn’t passionate about
  • Why Tucker avoids old houses when the market is turning
  • Why ranch-style houses are perfect for a first flip
  • How the power dynamics of the industry are changing
  • How to succeed as a wholesaler in a recession
  • Why Tucker isn’t taking on any development projects right now
  • How lending standards are changing
  • Why understanding a house’s footprint is so much more important during a downturn
  • Why you need to have thick skin if you do direct-to-seller marketing
  • And SO much more!

Links from the Show

Books Mentioned in this Show:

Tweetable Topics:

  • “I don’t want to deviate too far from the median price point in any given area.” (Tweet This!)
  • “Speed of project ties to essentially the age of home you are buying. The older, the longer the project.” (Tweet This!)
  • “Buyers drive markets.” (Tweet This!)

Connect with Tucker

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investo...
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    Jonathan Williams from Wilmington, NC
    Replied 8 months ago
    Great episode and loved the 5 points. My biggest takeaway was actually the conversation about vanity metrics and going after quality deals instead of quantity and comparing that to why a lion chases gazelles instead of field mice. You've got to chase things in life that actually provide true value otherwise you're just wasting your time.
    Zach Lemaster Rental Property Investor from Denver, CO
    Replied 8 months ago
    A reminder to all of us to stick to our fundamentals in building a sustainable portfolio. We are all guilty of the shiny object syndrome from time to time so having concrete goals for long term investing is essential. Great discussion! Thanks for sharing!
    Julie Marquez Investor from Seattle, WA
    Replied 8 months ago
    I love it when people talk construction. It's the sticks and pieces that make up our beloved real estate. This was a fantastic episode! I wish I took notes, but this would be a great blog post so I could reference back to the points.
    Katie Rogers from Santa Barbara, California
    Replied 8 months ago
    America already did the no-regulation experiment. It failed because people won't do the right thing, either because they cut corners or they don't know any better. America ended up full of hazardous buildings that were a risk to the the neighbors as well as the occupants. Regulations happen for a reason. Sure there may be some regulations that have been rendered obsolete. Fine, get rid of those. Otherwise, each regulation must be evaluated as to the reason for its existence. A blanket get-rid-of-regulations stance is foolish and dangerous.