BiggerPockets Podcast 458: Ditching “Active Investing” for More Passive Income Streams with Tamar Hermes

BiggerPockets Podcast 458: Ditching “Active Investing” for More Passive Income Streams with Tamar Hermes

52 min read
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Every real estate investor knows that things don’t always go as well as we’d like. What happens when you’re hit with a $16,000 bill to fix a sewer, or when 20 of your tenants call you all at once with problems? Some things, like those examples, make active real estate investors envy passive investors. This is why Tamar Hermes decided to go on a more passive route for real estate investing.

Tamar started at age 28, working as an executive in the television industry. She realized that she was trading her time for money, and without her job, she wouldn’t be able to pay her bills. So, she put 10% down on a duplex and started house hacking. Over time she bought more and more duplexes, some even out of her 401(k). She was an aspiring landlord, but after being hit with the situations above, she decided to sell all her units in Los Angeles and put her money into more passive income streams.

Now she’s invested in syndications, like Brandon’s Open Door Capital to be exact. This gives her far more freedom to pursue her passions in life, without having to worry about those 2 A.M. toilet calls. Tamar refers to herself as a very cautious investor, and that may be why she feels far more diversified with passive investing than active investing.

She also talks through “finding your tribe” and how Gobundance has helped her meet friends and partners within the real estate space. This doesn’t mean you need to go out and find a group, but having friends and allies within your certain niche can help move you miles ahead of the competition!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Brandon:
This is the BiggerPockets Podcast show 458.

Tamar:
There was a point when my husband and I, we took a leap. And this was 15 years ago when we bought our other house, and it was well over seven figures, and we were so nervous. And at the end of the day, we did have to ask ourselves, “Okay, well, will our kids still love us? What will happen if this happens? Do we think that we can make this money?” And we ended up doing it, and it was the best thing that ever happened because sometimes when you expand yourself and you actually take a leap, it’s amazing what can happen.

Speaker 3:
You’re listening to BiggerPockets Radio, simplifying real estate for investors large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com, your home for real estate investing online.

Brandon:
What’s going on everyone? It’s Brandon Turner, host of the BiggerPockets podcast here in the sea shed with my amazing friend, David analogy king Greene. What’s up, man?

David:
Not much, bro. I’m happy to be in Hawaii. And I’m happy to be making magic in the sea shed once again.

Brandon:
Wow, we have a good show lined up for everyone today. We’re talking to Tamara Hermes. And so, Tamar is an awesome real estate investor who I met about a year ago and learned what she was doing. And she’s killing it right now. And so, she’s going to tell us her story about both active and passive investing. We’ve got a lot of good things to talk about, fear and overcoming difficult times to come from crazy stuff happened within her properties. You’ll hear about that story today. You’re going to hear about when and why she sells properties. And it’s something we don’t talk enough about on this show. But I think it’s super important.
And we talk about later on in the show, something about that I want you guys to listen for, and that is the question of should you have multiple real estate agents or just one? And actually, David, you gave… I mean, Tamar had a really good answer, but then you had a really good answer as well on that. So everyone listen for those things and more on today’s show. But before we get to that, let’s get to today’s quick tip.

David:
Today’s quick tip is consider that the partners that you make need to have mutually aligned goals with your own. It’s very easy to look at life only from our own perspective. But everybody else is doing the same thing. So the person who learns to look for other people’s perspective will become very interesting to the people they’re talking to. This applies with your real estate agent, with your loan officer, with your lawyer, with your consultant. Make sure that the things that you are partnering with people to do is in their best interest as well as your own and you’ll have a lifelong partner.

Brandon:
Oh, that was pretty good. I like that. Then now I think we’re ready to get into the interview with Tamar. Anything you want to add before we get started?

David:
No, I want to get started. I like what Tamar has to say.

Brandon:
You guys are going to love this. So without further ado, Tamar Hermes. All right. Tamar, welcome to the BiggerPockets Podcast. It is awesome to have you here.

Tamar:
Thanks so much. Thanks for having me.

Brandon:
Yeah. So, you and I first connected about a year ago, and I learned a little bit about your story. And ever since then, I’ve been like I got to get Tamar on the podcast. So I’m excited that we finally made this happen today. And I want to learn more about you and that journey. So why don’t we start early on? How’d you get into this idea of real estate investing? How’d you get that, get bit by the bug?

Tamar:
So I when I was 20 years old I was an executive in television. And I was making the six figures. And I thought, “Oh, wow, I’ve got it made.” But I knew better because I realized that I was exchanging time for money. And that if I didn’t have that job I would basically be, I don’t know, I wouldn’t be able to survive. And so, I started looking at my bottom line. And it made me think about when I was 14 and a half I really wanted a car. And I grew up poor. I was the child of a Holocaust survivor. If I wanted that car, I was going to have to work for it. And so, by the time I was 16 I had saved $5,000. And cut to me realizing my bottom line, which was that I needed to figure out how to get rid of rent. That was the biggest expense. And so, I took the $40,000 that I had saved, and I put 10% down on a duplex.

Brandon:
You lived in one side of it then?

Tamar:
I did. I lived in one side of it. And I lived in Los Angeles, so I also lived within two miles of my work, which made it really easy because your time can really get sucked up when you live far away from your job, especially in LA.

Brandon:
Yeah, that’s awesome. All right. So, it get started [inaudible 00:04:30]. Do you remember what year that was? Like how long ago.

Tamar:
It was and I’m going to age myself a little bit, but it was 1998, ’99.

Brandon:
Perfect. So, that makes you like 29 years old today.

Tamar:
Yeah, 29. I’m just about 30.

Brandon:
Way to go with that. All right. So, you signed the house hack, you’re living in one half of this duplex, which is such a great way to start. We know so many of our guests here on the show started the same way. So what came next?

Tamar:
So after that I started to… I kept working, but I started to think about ways that I could expand. And so, what I did was I started buying more duplexes because I had one formula that worked, so I kept doing it. But I have to say that I was a very conservative investor. I was really scared. I completely relate to everybody that is just getting started out. I wasn’t… It sounds like, “Oh, I took $40,000, and it was a piece of cake.” But I was petrified. And every time I made another move, I questioned myself. And so, I did everything very conservatively. But I love to say that it’s amazing how real estate is so kind over time, and you say that sometimes, too. And so, that’s what I did. I just kept buying slowly but surely, but I was buying in the right places, I was holding, and my properties were appreciating like gangbusters.

Brandon:
How many did you have? Give us an idea. Maybe even let’s go to today? What did that look like your overall portfolio? Because I know you’ve been in this a long time. So these shows are always different than the whole, like, “Hey, I just got started two years ago. We could walk through first deal, second deal, third deal, fourth deal, done.” So what did that overall picture look like in your life today? How many units do you have or have you had? Stuff like that.

Tamar:
So right now I have nine units, and I have a lot of passive investments. Because like a lot of people, once you reach a certain level, you realize that you can get other people to do a lot of the heavy lifting, and you can make the same amount of money or very close to it. And so, I’ve navigated my portfolio to accommodate that. So right now with my investments, they’re all one to two units. And at a certain point, I had five duplexes, and I also had single family homes. And I sold everything in Los Angeles last year when I moved to Austin because it was just a great time to sell, and it was time. I had held on for a really long time. They had appreciated a lot. And it was really just a move that I needed to make.
It’s really scary to sell properties, I have to say. When they’re doing well, and they’re working for you. And you know you can make a lot more by making that move. And that was the time that I really needed to take action on that. So I had been selling them for the past few years. But I really got bold the last year.

David:
So you mentioned you’re in passive investing, and then you’ve also got some active income streams. Can you define how you look at those two terms?

Tamar:
Yes, absolutely. So to me, the passive investments are ones where I find deals like Open Door Capital. That’s not a shameless plug. He didn’t pay me to do that. There are so many great deals where there are sponsors that are putting together opportunities, multifamily homes, you’ve had a ton of these guests on that are just brilliant, storage units, mobile home parks. And what they do is they put together deals and oftentimes you need to be an accredited investor, which means that you need to be making a certain amount of income or have a certain net worth. But once you do, you can invest money into these deals as silent partners and get the money. So, that’s the passive.
The active is where you’re actually doing what a lot of the investors on this show do, which is that you manage the property, you buy the property. And there’s a lot of advantages to that. And part of the reason why I do that still is one I like it, I love people, I love the game, it’s fun. And also that I get the real estate professional status, which is a great tax advantage.

Brandon:
So when you say you’re doing the active stuff, what does that look like today? I mean, are you buying rentals? Are you flipping houses or wholesaling? What’s that like?

Tamar:
So, what I do, I’m not big on flipping because I like to acquire assets. So to me flipping is a little bit more like a job. I don’t mind fixing up a property and keeping it and holding it. That’s fine for me. But if I’m going to be selling assets then I feel like I’m taking money out of my portfolio. So for me, I’m not partial to that strategy. So what I will do is I will buy whenever there’s a good deal, I will buy it, and I will rent it out.
I’m getting more and more into short term rentals. And what’s really popular right now, which is a great strategy, and a lot of my friends are doing this really well is to have nurses come and stay. And for long terms or business executives, especially right now with the shortage in housing, they come in for a few months, and they need a place to stay, and you furnish that place and you can make so much money in the rents and it’s a very, very easy model. It also doesn’t count with those short term gains that you have to pay those taxes, you have to pay on an Airbnb style. So I love that strategy.

Brandon:
Yeah, that makes sense. I’m a huge fan of those as well. We’ve had a few traveling nurses over the years. And in fact right now it’s not launched yet, but we’re launching a website called amonthinmaui.com with the whole idea of we’re buying condos and we’re just going to let people rent them out for a month and you get the property, and you get a bunch of cool stuff with it. I don’t want the stay for three nights, stay for four nights, I want a little bit longer term people who want to stay.
Now in Maui, it’s a little different. People just come for months at a time to vacation, or for a month. But regardless, the principle is the same. I don’t necessarily love the every three night turnover. I like the idea of somebody saying a little bit longer. And again, yeah, the tax designation could be a little bit different once you go in month to month versus nightly. There’s less. The hotel tax usually isn’t an issue. So yeah, I’m a super big fan of that. So, I mean, that strategy. I mean, how do you find those type of people to stay there? What’s worked for you, and for people you know? How do you find the traveling nurses or the people that are looking just for a longer term short stay, if that makes sense?

Tamar:
Well, I think that there’s a website. I can’t remember the name of it right now. But there’s a website that does one just for nurses. And yeah, and you can definitely go on and find a lot of resources. There’s a lot of actual websites for those.

David:
Now, you’ve mentioned before that you hit this dilemma that every real estate investor eventually hits where you have to figure out do I keep this asset that’s performing, or do I trade it up for something that I think would perform better? And you’re really weighing the risk and the reward, but it always feels scary when you have to sell something that’s good. That whole bird in the hand is worth two in the bush thing. Can you share with us a little bit how your experience has shaped out when you decide it’s time to upgrade? And then maybe how you facilitate that process?

Tamar:
Yeah, absolutely. I think for sure that I’ve held way too long. But like you said, when it’s working a lot of times if you don’t feel comfortable then you can just hang on to it, and it still works for you. So for me, there was a certain point, especially with all the opportunities where interest rates are super low. And Los Angeles was at an all time high, and a lot of us are projecting that Los Angeles may have some adjustments coming in the next few months or years. It may not look the same way. So it just felt like it was just at an all time high. And also when you have a certain amount of appreciation in the deal. At a certain point, it makes sense to sell those properties because you can’t… The amount of appreciation outweighs the cash flow. Just can’t keep up with it. And that was sort of where I got.
So, it was either refinance it or sell. And because also I own a lot of properties, I had bought a lot of properties I didn’t mention in my 401(k) plan, which isn’t also an interesting strategy. And because of that, I really was at a point where I really couldn’t do… I couldn’t use a refinance or a 1031. Because when you’re in a qualified plan like that, you have certain provisions you cannot do. It’s great for deferred growth, but not that great for the other strategies.

Brandon:
All right. So, let’s let’s dig in a little bit on the 401(k). I’ve never done that. I mean, I think I have a 401(k) maybe with a few dollars in it from random previous jobs, but I don’t do anything with it. So, how do you invest in real estate in a 401(k)? What does it look like?

Tamar:
So first of all, I would say that there’s a lot of variables within a 401(k). There’s a 401(k) profit sharing plan. There’s the solo K. There’s the self directed IRA. There’s the Roth, which is the keys to the castle, really, because everything grows tax free. So once you get your money into a plan, if you’re a W2 employee, generally they’ll make you invest in their whatever stocks they have in that portfolio. You really can’t do much about that. But when you leave the company, you can take that 401(k), or if you have a business and you’re making a lot of income, you really needed a place to shelter it at a certain point.
I don’t necessarily know that if I was doing this, again, that I would recommend the 401(k). But it is a viable option in terms of setting up these plans. Also, the defined benefit plan is another one that really even gives you more flexibility. So what you do is you can actually invest and you could invest in Open Door Capital. You can invest in any kind of syndicated deal, you could do that for sure. And that’s a great way where you’ll grow income. You don’t get depreciation, but you get to grow that until you retire. And then you’ve got to figure out how to get it out with paying as little tax as you can. So you can do that. And the other thing you could do is you can buy a property in cash. So I was building up the portfolio and paying for properties in cash.

David:
Okay, this is really good. I don’t think we talk about this often. When you say that you can buy it in cash, does that mean that you cannot get a loan if you’re buying a property in your 401(k)?

Tamar:
That’s a great question. And I think that there is… I’ve heard that there is a way to get a loan, although is not advised, and it’s very hard. So it’s not something that you’d want to do. In fact, I’ve heard somebody say that they could do that. I would almost venture to say that it’s very uncommon. And for most of the time, those plans are plans that are designated as retirement plans. So you really are using them as cash vehicles.

Brandon:
That’s interesting. So people have got, let’s say they got a couple 100 grand in a 401(k) from their previous job or a couple jobs ago, and they’ve been rolling it over to new jobs, or if it’s got some equity in it. Then they leave, they can now take that, I believe what you’re saying, and you can put into some kind of self directed 401(k) or something. And then they can take that and go invest in real estate with that-

Tamar:
100%.

Brandon:
… in a careful way. Again, you can’t just go out and pull the money out of the bank and go and buy a property 20% down, you’re saying, but if you follow the rules right to maybe buy one for cash, or put into somebody’s syndication, and start growing wealth that way.

Tamar:
Absolutely. In fact, you can have a check writing access, and with a self directed or IRA or a Roth IRA, and when you have the check status, or whatever you call it, you basically can write those checks, and you track it. And you do have a custodian, but you have a lot of freedom. You can invest in cannabis, you can invest in anything really, in Bitcoin with that. So you have a lot of flexibility.

David:
I’m guessing the reason it’s that way is a 401(k) plan is designed to be the government incentivizes you to save for your own retirement. So if you take out a loan on a property, there’s more risk that the bank might take it back, and you would have lost the money. I’m guessing that’s where that rule comes from. If somebody out here is a financial planner, preferably certified and is willing to come on the podcast to share some of this, I think that’d be a really good interview. Tamar, can you share with us how you learned about this? Who did you go to in your life to get this information about how to use your 401(k) to invest?

Tamar:
Well, that’s a really good story. And it’s interesting that you just did a call out to financial planners because I have a little bit of a chip on my shoulder about financial planners. And I love a lot of them, and I teach finance, too. I found that you have to be very careful when you find a financial planner to educate you on this. I got this in little bits and pieces. So somebody told my husband and I that we could get a defined benefit plan. So we did. And then we came to find at a certain point, we maxed out our defined benefit plan, and they told us to roll it into a 401(k) profit sharing plan. But then we came to realize that that really wasn’t the best strategy.
So, I just kept asking people, I’m a very curious person. I will ask everybody every question under the sun, and I and I’ll take chances. And sometimes I lose a little bit of money, most of the time I make a lot more than I lose. But it is a situation where you really want to get the information. And then I would check it with a couple more people to make sure. Make sure also that their incentive is to understand real estate because a lot of the CFPs, they are really set up to make money for themselves. Before you know it, they’ll start selling you life insurance, they’ll start selling you annuities, and all kinds of other vehicles that you really don’t want. You want to be in real estate because it’s the best place to be. But you need to make sure that those CFPs are looking out for their pocketbook, but really looking at what you want to do with real estate.

David:
I think that’s a good principle to understand overall, when you’re dealing with even in the real estate space. Because it’s very easy to think the same thing about an agent. The agent wants to deal the close. They’re not looking out for my interest. The agent just wants a bigger commission, they don’t care if I make money. The loan officer in many ways is incentivized by giving you a higher interest rate than a lower one. It’s sort of how this whole industry operates. And it becomes easy, and this doesn’t apply to you, Tamar. But for people that are listening, it’s very easy to get jaded, and just write them all off and say, “Well, none of them are looking out for me, so I’m not going to do it.”
I think the better approach is to understand that we don’t pay those people a retainer like a lawyer. A lawyer does have to look out for your interests, but they get paid by you regardless of how they perform. When you’re in the world that we’re in. And I’m going to dig in more in a bit Tamar about how you navigate these relationships to make them work for you because you’ve been very successful. It’s important to note that you’re in a partnership with these people. They also lose if you don’t buy the property. They have to look out for their interests, just like we have to look out for our interests. And there’s really a dance of understanding who the right person is with the right mix of character who has the right skill set. I know there’s a lot of investors that just get frustrated because they can’t find the right agent, but when they tell me who they picked I’m thinking, “Of course, that didn’t work out. You went for the worst person ever.” You’re trying to figure out how to buy a Ferrari and you’re at the Honda dealership type of a situation.
You’re making a great observation and that’s actually a part of how you become a good investor is you learn people. You learn the right partners that can find the things you need and help you. Do you mind if we transition into some of the skills you’ve built or the ways you’ve learned to read people so that you do pick the right financial planner, the right agent, the right loan officer, the right property manager when you’re building your portfolio.

Tamar:
Yeah, no, absolutely. I would say the first thing is trust yourself before you trust anyone else. And that’s why I’m a huge advocate of making sure you’re educated, and making sure that you understand everything when you go into a deal. So, with certified financial planners, like you mentioned, David, is that they’re supposed to be fiduciaries. They’re supposed to not charge you or sell you any products. Really, in the fullest form, you would pay them a fee like an attorney. You would say, “Here’s $20,000, or whatever the price is, please share with me what I can do and what you advise.” So the first thing is learning the rules, is really studying that.
For a long time, I didn’t trust that I could learn the rules. And I know that sounds… It makes sense in a way because real estate can be complicated when you look at all the facets coming at you. And so, I really had to dive in and say, “No, I can do this, I can understand this.” And it’s the same thing with financial planners, the same thing with anyone that you do business with. And I think that the other thing that is a gauge for me is that if I start to get the feeling, if they start to say certain things that make me feel there’s been partnerships where people start to say certain things, then I think, ‘You know what I think they’re out more for, they’re looking out to make sure that they make money more than they’re thinking of the partnership.” And when that happens, I’ll usually back out of the deal and won’t want to deal with them.

Brandon:
There’s oftentimes these little intuitive things we pick up on. And then later on in our life when things go bad we’re like, “Oh, yeah, that was a red flag. Why didn’t I just trust myself in those moments?” That’s really good. Encouragement. Know yourself, dig in, trust yourself that you have this… We’re only using part of our brain. And so, the other part of our brain, the subconscious is constantly working trying to figure out what’s good and what not. And so trust that. I think that’s really, really good advice.
One of the hard things with this whole situation is when it comes to financial advisors, or real estate agents or lenders. For example, if you were to ask this advice about 401(k)s to 10 different financial planners, you’d get 11 different answers, right? And so, a buddy of mine recently went to this big real estate investing CPA firm. This big real estate investing firm that all they do is help real estate investors. And he’s like, “Okay, put a bunch of money to them to help set up his LLC structure format,” this whole thing, this elaborate system. Paid them a lot of money.
He was just complaining the other day, he’s like, “It’s so frustrating, Brandon, because I call them and I talk to a different person every time.” And every time the guy has 100% different idea of what I should be doing than what the last guy said. This is all within the same company. I mean, that’s just what you get when you have a tax code that’s a billion pages long. And there’s rarely one best strategy for everyone. And so this goes back to your point. You got to just dig in yourself.

Tamar:
I love that you said that. It’s so true because you can get different opinions on everything. I mean, think about real estate investing. You can talk to 10 investors and they’ll tell you just buy… I mean, listen to Grant Cardone, he’ll say, “Don’t buy anything unless it’s 16 units or more.” You listen to somebody else, and they say buy single families. And you’re thinking, “Well, what’s the best thing?” So, you get the same runaround. It’s more complicated I think with when it comes to 401(k)s and because it feels like there should be a clear set of plans. I mean, real estate investing, there’s a lot of choices. There’s a lot of ways you can go. But with structuring your retirement you should be able to have one direction and it’s true. You really need to dissect and decide what’s best for you.

Brandon:
That’s so good. And it is, it’s hard to know because there’s so much advice out there on what the right thing is and what the wrong thing is. I’m pulling this from my phone right now. I just put this on my Instagram today. I wrote this little paragraph here. It says this, “Wake up at 4:30 AM, don’t eat carbs, write down your goals six times a day, shout out affirmations, take a cold shower, don’t check your phone first thing in the morning, workout first thing in the morning, meditate. This is just a sample of the success tips you read online. And they might just work for you or they might not. I check my phone first thing every morning, and I spent way too much time on it. I really work out early. Sometimes I sleep in. I don’t do affirmations at all. And that works for me.
You might do the exact opposite, and that might work wonders for you because everyone is different. But you know what one trait applies across the board to everyone I’ve ever known who’s successful.” And Tamar this applies totally to you in what we’re talking about. “They sought solutions that worked for them. They tried keto, or they try waking up at 5:00 AM. They try to phone fast. Everyday, they intentionally ask and attempt to answer the question, how can I be better? Tips are fine.” And then this is kind of the summary statement. “But the search is the secret. The secret to success. It’s just being a person who’s curious, like you just said by searching. And so, that’s something I’ve been thinking a lot about lately is who do we get our advice from? And then we have to make sure we filter that through? Is it the right advice for me? What’s your thoughts on that?

Tamar:
I mean, that is 100% me, and I think that is the way to move forward in your life is to just keep getting up and looking at what works for you. And there’s going to be different seasons in your life depending on how old your kids are, or where you are in your relationships, and it’s going to change, and you’re going to need different things.

David:
That’s a perfect segue into what I wanted to ask, Tamar here. Because, well as a side note, I think when you’re afraid you look for the certainty that comes from the science aspect of investing. I want to make… I need an LLC, so I don’t get sued. I want to know exactly how to analyze a property. How do I make sure I don’t get burned in this transaction? But when you actually get into it, you realize it’s way more art than it is science. That there’s so many ways to flow and move and be flexible in the industry. And even when you screw up royally or someone screws you over royally, over time real estate is so kind. It can absorb that loss. And that’s one of the reasons that I think the three of us are so passionate, we just keep talking about it all the time.
Tamar, I’m curious if you’d give us some insight into your specific situation, how you chose the properties that you wanted to buy, why they worked for you, why it felt right? That maybe the people listening can get a better idea of what would be what works for them.

Tamar:
Yeah, absolutely. So, I am a… I love that I can share this because I’m the scaredy cat. I’m the one who did not want to lose money. I grew up poor. I get it, I understand anyone that has any of those feelings that they don’t want to lose money and don’t really feel like they will be able to make it back? And so, I pick deals that are extremely easy to understand. I’m an ABC kind of girl. I pick up in the best locations. I’m willing to pay money for them. I look for some meat on the bone. And I look for ways that I can rent them, that I know there’ll be tenants, that I know I can get certain rents for them, that I know that they’ll appreciate.
Basically, I check all the boxes, and it’s not that hard. I mean, it does take a lot of time. You have to look at a lot of deals and see that a lot of things don’t work. But then you’ll know when that one comes. And it’s very easy, and in my deep dive you’ll see it’s just the simplest strategies. There’s nothing complicated, but I’m going to make a lot of money on it.

David:
What is your strategy today when it comes to that type of property? Like your kind of more active stuff, the unit that you own? Is it appreciation more? Is it leaning towards cash flow? Is it trying to get a balance of both? What are you aiming for right now?

Tamar:
Yeah, I mean, one of the things I really focus on right now is I’m extra cautious because of the way the market is right now. Because we know that we’ve seen growth for what, 12 years now. So we know that something may… We don’t see it coming. And I live in Austin, and I promise you that people around here and in San Antonio are not seeing anything coming. They have no idea how it could possibly happen, and we’ll see. I’m very, very cautious in terms of not only I’m looking for… I look for appreciation, and I look for cash flow. I believe you can have both. And I look for deals where there’s an opportunity.
So, there’s got to be some way where I feel like there’s some meat on the bone. So I’ll look and see where I can make an improvement in a property or where I can get it where somebody wants to give me a very fair deal in this market where I know I can cashflow it and make a decent amount of money by buying it at a negotiated price. So, I’m pretty much I would say that I have high expectations, but I don’t do anything far out or over the top. It’s pretty simple. And it’s just it’s I buy and hold. I generally will not sell a property. So that’s the other thing is that I’m willing to hang on to a property for an extended period of time and let time do its part because it’s just like that the story of the avocado.
If you think of an avocado what it cost 20 years ago, it was a lot cheaper than it is today. And in 20 years an avocado is going to be a lot more expensive. So it’s the same thing, especially when you walk in. The other thing I look for is I love the 30 year fixed, especially right now with the price that it is I mean, that’s the best deal in town. I mean, come on 30 year fixed. 2.99 on an investment property. It’s just so good to be true. I mean, that’s the great part of this market right now. You can really borrow money from almost nothing.

Brandon:
Yeah, it’s insane how cheap interest rates are right now. I’m curious. Actually, I’m going to ask both you guys, David and Tamar. Where do you think interest rates are headed? Where do you think the real estate market’s headed? I’ll start with you, Tamar.

Tamar:
Well, I think that interest rates will stay low for a while just because they have to. We really need to do something to ensure all the money that’s been printed, which is going to turn into a complete disaster at some point. So, there’s no way that it can’t, and you can read any number of history books or listen to anybody with the logic around that and know that there’s no way this is going to end well. So there’s that and I think ultimately they’ll probably… They’re not going to stay low forever. So, they’re going to go up. I don’t know how much or how fast because they really can’t right now because the economy will completely collapse. So that’s that’s my thought process on it.

David:
Well, first off, we should probably differentiate mortgage rates are not the same as the Fed fund where the Fed sets rates as far as the prime rate, and there’s a lot of confusion, oftentimes when we hear rates dropped, but mortgage rates went up, that happens sometimes. But overall, I think interest rates are going to stay low. It would be healthier for us if they went up. It just doesn’t make sense. I wouldn’t lend my money at 2.9% 30 years, right? That’s kind of all you need to know when it comes to, is that a good idea or not?
I think they will stay low. But I think the bigger reason is that our country operates at a deficit. We spend more money every year than we bring in through taxes. And so, what we do is we borrow money from either our citizens or other countries through bonds and treasury bills and stuff. And if you raise rates now it’s sort of the equivalent of borrowing money at 18% on Visa to pay off the 14% on MasterCard. If rates go down, you’re borrowing money at 12% to pay off the 14% you’ve already borrowed. So you can keep borrowing. But as we all see, that just makes your debt get bigger, which is what’s happening with our country.
So none of us here have a crystal ball. But my bet is that we’re not going to stop printing money. We’re not going to stop keeping rates low. That’s going to cause the price of assets to continue to inflate. It’s going to cause debt, in a sense to become an asset of itself. And it is a dangerous game to play.
Let’s be clear, it’s not ever a great idea to take on huge amounts of debt. There’s an argument to be made in this environment, you kind of have to play the game that way because that’s the way that the NFL has created the rules, in a sense. We’ve seen they have a lot of rule changes in the NFL, and now passing is much easier than running the ball was. Well, when you pass it the odds of an interception are much higher than the odds of a fumble. It’s not the safe way to play. But that’s how the teams that are doing the best have re-structured their teams and their offense. And I sort of look at the economy the same way. It’s not a game in the sense that there’s no consequences. It’s a game in the sense that rules often change, and you have to build a skill set like when we’re playing a game. You and I had a conversation with Mindy and Scott.

Brandon:
Yeah, don’t tell Mindy that you just called it a game.

David:
Yes, I know. Mindy, I love you. We’re not saying investing is not serious, and people’s money is not serious. But it functions in the way that a game does where you have to learn the rules and strategy is applied, and you can lose, right? There’s a lot of… I mean, professional athletes play games, and they cry when they lose. There’s still a lot on the line. But that’s the overall understanding I have of why I think rates will stay low. And I say this because I want people to understand that if the way that the government effects monetary policy changes, will the rules of the games just change, and now I might expect interest rates to go up, and that would affect the way that I invest.

Brandon:
Wow. That was good. That’s a good answer, both you guys. All right, Tamar, darkest days in your real estate investing? What are some of the moments or a moment when you look back and go, “Oh, that was rough. That was difficult to get through.”

Tamar:
I did have one property that was a real troublemaker. And two weeks after I bought it, I had the city sanitation department calling me saying that things weren’t looking so good at the property, if you know what I mean. I can say that in a very piecey way. And I needed to get the situation fixed right away, and it cost me $16,000. And I ended up taking the sellers to small claims court. And that was… I mean, the whole thing, I learned a lot just like everything, and it was an adventure. But it was it was tough, it was stressful, because that’s not a situation that you can walk away from very easily, and I ended up winning. So I got $10,000 back at the end of the day. But those kinds of scenarios…
The other thing was that at a certain point where I had maybe 20 tenants I was managing at once, and they all call at once. That just gets really stressful. And it’s all little things, and there’s always something. That part, that was when I started hiring property managers because it was just my life was just turning into one thing after another. But those were the only times where I didn’t love buying real estate. I just think it’s the most amazing thing in the world, and everyone should do it.

Brandon:
So what does your mindset look like in those periods? When you’re going through that how do you power through? What goes on in your head? I think there’s so much power in understanding people’s mindset during those difficult periods. So what did that look like for you or what does it look like now when you go through?

Tamar:
Yeah, I mean, this is something that’s interesting. I notice this more and more now that I’m 30.

Brandon:
29, you’re not there yet. You’re 29.

Tamar:
I’m 29. Yeah, I’m 29. I start to realize that I manage this better and better as time goes on. But it’s pretty much like we project situations in our mind, and they’re a lot worse than they’re really going to be, and we’re more resilient than we think we are. And so, something like that happens, I get the call. And the first thing I do is I just start thinking, “Okay, what am I going to do? How am I going to fix this? who am I going to call?” And so, I call the plumber, I get estimates I go fast and I just get it done.
And then as far as that moment where I have a lot of tenants coming at me, I just start thinking, “Okay, this isn’t working for me, I manage everything.” And then I create a solution so that moving forward I don’t have to deal with that. But I don’t let it take me down because it’s all just stuff that we need to deal with. Just we can handle it. It’s amazing. Once you’re faced with something that you never thought you could do… I mean, I never thought I’d be on this podcast. So, hello, there you go.

Brandon:
You get there. I love that. I love that. David, what do you think? Any thoughts on that?

David:
It’s funny that you mentioned that, Tamar. I just was having a conversation yesterday. I’m helping my friend Matt with he’s writing a book on triple net leases, which is a very different way of investing. I’m getting into that space as well. The price points are so much higher that they’re just a natural fear that comes with that. It always feels safer to buy $100,000 house than a $200,000 house, even if the $200,000 house is in a better neighborhood with better tenants and a better income stream, and it’s in better shape. Something about a higher price point feels scary. And I was sitting there thinking like $80,000 a month, that’s what my mortgage is going to be, $80,000. How am I going to pay $80,000? What if I have two to three months? What’s that going to do to me? And we sit down to analyze the deal. And dude, it was stupid, how easy it was to analyze a triple net lease. It’s, here’s your mortgage, that’s all.
Other than vacancy, which doesn’t happen nearly as often there is nothing to talk about. I had this surreal moment of how high my panic meter was thinking 80,000, 80,000 versus how safe this income stream was compared to everything else I invested. And Tamar, you’re reminding me, you’re exactly right. Our brain always goes to worst case scenarios. Our subconscious is working to protect us, and that’s what it thinks will protect you. Like, but look out, you could drown in this $80,000. The battle that we fight when we’re in that mode, it really determines whether we move forward or if we don’t, and I love that you’re sharing, you got to bet on yourself. You will think of answers. And oftentimes the answers I come up with in those moments are so simple that I wonder why I ever even worried about it. And that goes with running a business. I’m sure starting a family. Were you ready to be a dad, when the time came?

Brandon:
100% I was a perfect dad from day one, actually.

David:
You probably were better than most dads from what I imagine. But there is no way to know what to do. So if you’ve been a parent, you can keep a human being alive and functioning, you can be a real estate investor. I promise you that it’s much harder to be a parent, I’m sure than what it is to be an investor.

Tamar:
I love that. And I actually know… I know Matt and I know those deals. I’ve looked at those deals, too. And I went through the same exact scenario in terms of okay… With the triple net lease what’s extraordinary is that they’re locked into a lease. The company cannot leave and they pay for everything. The only thing that I couldn’t get past and this might be helpful for the listeners is recourse versus nonrecourse loans. And I don’t know if you want to speak to that because I thought that was a very interesting topic in terms of how the loans are lent out.

Brandon:
What are you talking about for a minutes, Tamar, if you’re comfortable with that?

Tamar:
So the recourse loan means that they can call that loan and that you’re on the hook for it. Nonrecourse which is like Fannie & Freddie, those kind of loans. It means that they’ll just take the property back and you can walk away. So if you’re doing a $6 million deal, and it’s a recourse loan, they will basically deplete every single thing that you have to get that money back. You owe them that money if anything goes wrong.

Brandon:
Yeah, it sucks. So, in our fund, most of our deals, we’re trying to get everyone nonrecourse. There’s a few we’ve had to do recourse. But the more recourse debt you have, the more dangerous it is on you. Because yeah, the more they’ll come after you if something goes wrong. So, yeah, that nonrecourse debt is beautiful. It’s a good thing.

Tamar:
Yeah, and it’s just something to think about, just in terms of… It doesn’t mean you don’t do it. I mean, there are great deals, and the truth is like David said, once you lay it out, you can see there’s a lot of insurance and risk mitigation in those triple net leases. But the recourse versus nonrecourse is something that you do… It’s a question you want to ask. You want to see what you’re on the hook for.

David:
Well, it’s a good example of what we started the conversation off when we were saying, when do you keep it versus when do you sell it? If you get too much recourse debt, that would be the properties that you would look on moving just to reduce the amount of debt. There’s a healthy amount that you can handle based on whatever your own finances are. When that goes too much that’s when you would offload those properties, upgrade into something else, maybe move from recourse into nonrecourse, but that’s what I mean by the way that you play the game. When you understand the rules the right decision just comes to mind like that when just did. You just will never know that before you get started. You won’t know what the answer is. And so your brain will tell you, you’re never going to be able to figure it out. But that wasn’t a really complicated thing. I’m getting too much recourse debt. I don’t feel comfortable. They could take my house. My family could be affected. Let me sell those three properties and keep one and reinvest it into something with nonrecourse debt.

Tamar:
Yeah, absolutely. And there was a point when my husband and I, we took a leap. And this was 15 years ago when we bought our other house, and it was well over seven figures, and we were so nervous. And at the end of the day we did have to ask ourselves, okay, well, will our kids still love us? What will happen if this happens? Do we think that we can make this money? And we ended up doing it, and it was the best thing that ever happened because sometimes when you expand yourself, and you actually take a leap, it’s amazing what can happen.
I mean, even moving from Los Angeles to Austin, it’s a big deal when you’ve lived in one place, and you have all your stuff, your life in one place. And you look around your house, and you think, “Oh, my God, I got to move all this.” And actually, if you’re willing to move, I think that’s the best deal in town to be able to move every two years and get that tax write off for 250 or 500,000. That to me is the best. So, we didn’t utilize that as much as we could just because we didn’t like moving and we didn’t need to. But if I wanted to make money fast, I would be utilizing that strategy.

David:
Well, one of the reasons that moving as hard is you lose your support system that you had in that area, and that’s a big piece. And that’s also one of the things that makes investing less scary is when you have a support system. You have people you can bounce ideas off. Like Tamar, you’re in the same tribe that Brandon and I are in that Matt’s in, we’re all GoBundance members. And so, a lot of I think the success we have comes from knowing there’s a good 20 to 30 people that have done the same thing that I’m doing that may even be a couple steps ahead of me that I can bounce off some of these worst case scenarios. Would you mind sharing a little bit about how having other people around you that are doing similar stuff has affected your confidence and your mindset?

Tamar:
Yeah, absolutely. It is huge to have that support system. There’s not a day that goes by where if I need something I know that I can call one of my tribe sisters and ask them for something for different skill sets that they have. And they’re oftentimes ahead of me in a certain place. And I’m… I don’t want to say ahead of but they’ve more experienced in one area than I have in another. And so, it’s just a great model to be able to ask people that you trust and that you like that you know have your back and say, “Well, what do you think of this?” Or what do you think of this deal? What do you think of that? And they’ll ask you different things. It’s not just real estate, it’s life. I mean, it really at a certain point, we’re really talking about a well rounded life, not just real estate, because there’s certain point we have a certain amount of money, and it doesn’t mean that much at a certain point. We need more than that in our lives.

Brandon:
Yeah, that’s so good. Yeah, having like a tribe of people around that you can depend on and talk to you is such a vital piece of anybody success in anything. I mean, this is why I think like in sports if you’re just by yourself all the time, you’d never be as good as if you practice with other people and you share with other people. Or in business or in real estate. And so, again, like David mentioned, you and I are… David and I are in GoBundance. You are also now. People might be wondering, “Wait, I thought GoBundance was a men’s thing.” But now there’s a woman side. Can you speak that for a second just so we get some clarity on that?

Tamar:
Yeah, absolutely. So two years ago, GoBundance decided to start with women. And it’s interesting Brandon, you’re actually the one who told me to join GoBundance. It’s another-

Brandon:
Am I really? [crosstalk 00:43:17].

Tamar:
Yeah, you’re the one to me. When we had that call together, you had told me to join GoBundance. And so, I actually took the coaching, and I did, and we’re a group of successful women that support one another. We’re doctors, there’s real estate investors, there’s realtors. It’s a group… Best salespeople, top executives, it’s great. It’s just a great group of women that support one another, and we do things together. We play and have fun, too.

Brandon:
That’s awesome. Yeah, it’s a cool thing to see that the women’s side growing as well. And yeah, it’s funny because you and I started talking, I mentioned earlier in the show that we talked about a year ago. It’s because my brother… So, just to tell a quick story. My brother had a car accident or something happened with his car, and didn’t even knew why. He was just going through a rough time. And so, I did a fundraiser. I just thought on my Instagram, “Hey, anybody who donates 500 bucks to my brother’s GoFundMe I’ll do an hour call with you.” And Tamar, you were one of the people that took me up on that. I think we ended up raising 30 grand for my brother, which was-

Tamar:
I’m surprised it wasn’t more. You even gave me your cell number. I can’t believe it. You’re like, “And I’ll give you my cell number.”

Brandon:
Exactly. Yeah. Actually, I still chat with a number of the people that did that with me back a year, a year and a half ago, whatever it was now. And it’s kind of fun to see everyone’s progress over the last couple of years do this. But anyway, so thank you from me and my brother. That was cool. And I’m glad that conversation led to something, you working on the tribe stuff. So yeah, very cool.

Tamar:
Yeah. And it speaks to just what it means to take a chance. When you had put that out there. I mean, I didn’t know what it would be like. I mean, I knew it would be being enjoyable to speak with you and that you’d probably share some pretty good ideas with me, but I was willing to just go for it. And it’s the same kind of thing where we’re always looking for the ROI, we’re looking for… We’re always trying to weigh it out so much. And it’s not always about weighing out the variables in that way. So, we need to take chances.

Brandon:
Yeah, that’s so good. Yeah, we just got finished out here. We did another one of our… We did it two years ago. We called it the Maui Mastermind. I just did it again out here. I would just grab 25 real estate investors and did a bunch of mostly outdoor activities because we can’t really go inside most places. But it was still, it was amazing. Just getting together with other people who are working, growing, trying to better themselves. They’re on that search that I talked about. The secret is the search and they’re on that.
I can’t even put into words how powerful those moments are. Anyway, I’m glad to see that you’re heavily involved with the GoBundance as well, because again, it’s been instrumental in my life and David’s life, and obviously in yours now. So, very cool. Well, before we go on and get out of here, I do want to head to our next segment of the show, and that is the deal deep dive. All right. The deal deep dive is part of the show where we dive deep into one property, something that you’ve recently…Maybe recently or maybe not so recently bought, and we want to dig into some of the numbers on it. Do you have a property in mind that we can dig into?

Tamar:
Yeah, awesome. So I’m going to share a property that I just closed on. And the reason why I like this, this is another thing I didn’t talk about was right now I think finding tenants has been a much more intense process for a lot of people, especially with the moratorium, and people defaulting. And so, there’s been… I think a lot of people are afraid of buying because they’re worried that they might get bad tenants. And I have to say that there have been scenarios where it has been a little tricky, and I’ve had to be really careful in terms of who I select. But this property is a property that I bought 20 minutes out of San Antonio. It was $225,000. Oh, do you want to ask me my questions before I dive in?

Brandon:
Sure. Yeah. Well, that was actually the the first question was what kind of property was it? So, single family house I’m assuming or is that not?

Tamar:
Yeah, a single family house in San Antonio and just out of San Antonio.

Brandon:
Yeah, love that.

David:
Okay, how did you find that property?

Tamar:
So, I found that property through a realtor that knew that I was looking for that sort of property. So, I literally had fillers out to probably 80 realtors, wholesalers, you name it, people know what I’m looking for, and what I’m capable of in terms of closing. And so, she called me and she said she had a couple that was looking for their dream house. So they wanted to spend as much time in the house. They didn’t want to have to move. Whereas, if they sold it to someone that wanted to move in, they’d have to move out. And they didn’t want that. So they were willing to make a deal and make it work. They didn’t want a lot of people coming through too for COVID. So she brought me that deal.

Brandon:
That’s cool. Hey, maybe I want to take a quick aside from the deal deep dive here to talk about something. I don’t think we’ve ever… And I want to ask both of you this question of how do you deal… Because I get this often. How do you deal with having multiple real estate agents? And so, the reason why I say that, and this is why I want two perspectives here, Tamar and David, is it makes sense if I had 100 agents out there looking for deals for me, that sounds awesome. But at the same time David as an agent you probably are thinking, “Well, why am I going to work with you if you have 100 agents?” So I’m curious if each of your perspective on that? Tamar, how do you handle that? Do you have one agent you go to when you need something, and everyone else kind of knows about it? How do you work that system? And then I’ll fire it out to David?

Tamar:
That’s a good question. Because I feel like there’s a lot of agents that I’ll reach out to and tell them what I’m looking for, and they’ll not really respond very much and not really follow up. So I can tell they’re not that invested in having a relationship with me. And some of those agents will follow up with me. And they tend to get access to deals that they don’t all get access to the same deal. So if you’re just dealing with one, you really are missing out because Jim might be friends with Jane and if I’m not talking to Jim, Jane’s going to give him the deal.
And so, I sort of need to I feel like… I mean, if I was selling my house, I would have one agent, but in terms of buying… Also, I mean, I can’t have one agent for all of San Antonio or one agent for all of Austin. I mean, there’s just too big of a territory. So that’s kind of how I looked at it.

David:
I think it’s an amazing question, and it what it boils down to is what are you looking for from your agent? So the way that Tamar answered it, she’s looking for a deal. Find me the deal I’ll do the rest. If that’s the case, it’s okay to have multiple agents, and it’s basically first come first serve. You find the deal, I’ll buy it with you. The minute though that it starts to blend into hey, I want my agent to answer my question, to hold my hand, to talk me off the cliff, to give me resources, to analyze it for me, to get me a scope of work, it quickly… There’s a slippery slope, and it turns into I have a million questions, and who am I going to ask but my agent? Now you’ve got three, four, or five different people. And as an agent I’m like, “I’m not doing this with you, if you’re going to be asking me all these questions, but you’re also working with five people.”
So what we do on my team is you’ve got two options. You can go with the whole, I’ll send you deals if you want it, and we’re going to represent you. You tell me all right, the offer, we’re not getting involved until that point. Or the way we prefer, which is we sign an exclusive agency deal, and now you get me as like, for lack of a better phrase, I’m not a lawyer, but it’s more similar to a lawyer. You get to have conversations with me, we come up with a strategy, I help you with the emotional side of it. I’ll be much more engaged in what you’re doing getting into your head and helping you to become successful.
I think the danger is when you try to bleed those two things. I want all the service that I should be paying, or I should have an exclusive agency deal. But I like all the freedom of being able to have five or six agents. And that works out very similar, I think to how the rest of life works out when you’re like, “I want to date seven different people at a time. But I also want all of them to be completely committed to me.” That doesn’t end very well.

Tamar:
They know I’m sleeping with all of them.

Brandon:
Exactly, yeah.

David:
And you’re going to get the effort of someone who knows they’re just one of seven. They’re not going to be there for you when you really need it.

Brandon:
That’s a good analogy. All right, that was good. Let’s go back to the deal deep dive then. The question was how much was the property?

Tamar:
So, it was 225,000.

Brandon:
225, all right, and David?

David:
How did you negotiate that price?

Tamar:
The realtor had come to me, and she was representing both sides. So, she had come up with that price. And I ran the comps and looked around and ran my numbers. And I thought it was a fair price for both of us. The sellers were agreeable, and I was agreeable. So, it was actually very easy. There wasn’t a lot of negotiation, and it was off-market. So it really wasn’t there wasn’t a lot of competition because it was just us negotiating, which made it a lot easier.

David:
Yeah, for sure. How did you fund that property?

Tamar:
I put 25% down and I got a 30 year fix at 2.99%.

David:
Wonderful. Now, once you bought it, what did you do with it?

Tamar:
One of the agreements was that the sellers wanted to be able to live there so that they could find the other home that they really wanted. And they wanted to take their time. So we did a lease back, and we agreed again on that price, and I was fine with it. And shortly after that, they found a place and now I’m renting it. I had three days between them moving out and the tenant moving in. So it was pretty amazing. No vacancy at all, and they’re paying $250 more than the sellers were paying.

Brandon:
Yeah, what’s the rent for today?

Tamar:
It’s going to rent for 2150.

Brandon:
And I’m assuming the tenant pays their own water, sewer, garbage, electricity, that stuff.

Tamar:
Mm-hmm (affirmative). The tenant’s going to pay for everything.

Brandon:
That’s great.

Tamar:
So, it’s a really sweet deal, and it’s going to cash flow, and they signed a two year lease.

Brandon:
Wow, that’s awesome. Well done. All right. Well, I guess that’s kind of it. What was the outcome is basically that, and San Antonio, which is a market that’s clearly shrinking, and no one’s moving there right now. What did you learn from this deal? What was the overall, what did you learn from it? That was a joke by the way, everyone. San Antonio is blowing up.

Tamar:
Yeah, everyone’s going to San… It’s not like this is news. It’s not like everybody’s going to go to San Antonio on Austin to buy or anything.

Brandon:
Yeah, it’s not like Texas is blowing up right now, and everyone’s fleeing California for Texas. David, when are you going to Texas?

David:
I’ll be going to Texas probably [crosstalk 00:53:38], expanding into that area. Maybe even late this year if I get there quicker than I thought.

Tamar:
Oh, really, are you moving?

David:
No, I’m putting David Greene teams in different hot markets because so many Californians are leaving here. And then we have to go find them a house with where they’re moving to so we’re looking to replicate our systems and put them in different states.

Brandon:
There you go.

Tamar:
Perfect.

Brandon:
Do you have state income tax in Texas?

Tamar:
No. No, see taxes here. Property taxes are very high though. And that is something to consider. Property taxes are very high here. But I came from California so nothing’s that expensive.

Brandon:
Yeah, California has high property taxes and high [crosstalk 00:54:11]-

David:
Which is why they love us so much in San Antonio when we move there and say, “What? It’s only 275? I’ll take two.”

Brandon:
Exactly. No, but it does bring up a really good point that sometimes people are looking at, “Oh, well, Texas is so cheap. You can buy a house for whatever, $200,000.” And they don’t realize your taxes are going to be four grand a year. And then you look at like Hawaii, and it cost a million dollars buy a house, but your taxes are $1,000 a year. Our property taxes are dirt cheap here. But we got 11% state income tax, and that might even go up to 18% they’re talking. There’s these different levers in different areas that you push and pull and different things make different things work. And so, don’t just take… Again, going back to the don’t take the blanket advice. Texas is great to invest, don’t invest in California, things like that. You can find people successful and killing it in every single market in America, everyone, you can find people doing well in real estate.

Tamar:
Everywhere, and anytime, anytime, regardless of what the markets doing. There’s always properties. There’s always opportunities.

David:
There’s condos that I’m buying in Hawaii right now. We’re closing on them in a couple days. And when I tell people the first question they always say is, “What’s the HOA?” This is a perfect example of that. Oh, they’re 550 a month, and they just choke. You’re paying 550 for an HOA.

Brandon:
Yeah, mine’s 900.

David:
The taxes though, the Delta is less than what I paid for the same property in California, right? So there’s a higher HOA fee, but there’s low taxes that it actually ends up being cheaper to pay that HOA fee-

Brandon:
And insurance is like 25 bucks a month.

David:
It’s like nothing.

Brandon:
Nothing.

David:
That’s exactly right. And that’s because the HOA fees are covering a lot of what insurance normally covers. So, you guys are both making a great point, you have to look at the big picture. You can’t just hear that one number and then freak out.

Brandon:
Yeah. All right. Anyway, any other lessons on this deal? I know we hijacked this deal deep dive and covered a lot of stuff. But anything else that you can pull out and say this was important?

Tamar:
I mean, this deal is just jump on any opportunity where the numbers work. And it’s interesting because in my favorite book that I’ll share, they talk about how you need to jump on deals. And it just goes to show that when you see the numbers and they work, jump on it and get the deal.

Brandon:
All right. Well, that was phenomenal. Thank you for sharing. And now I think it’s time to head over to our last segment of the show. It’s time for our…
(singing).
The famous four is a part of the show we ask the same four questions every week to every guest. So, Tamar, we’re going to fire them at you right now. And I know you know what’s coming. First question, favorite either all time favorite or current favorite real estate related book.

Tamar:
The Millionaire Real Estate Investor by Gary Keller, and what a great author he is. Just such a great book, and he actually talks about that one deal that he lost. I don’t know where it was, but he said he lost $100,000 because he didn’t take the deal when somebody offered it to him. And from that day on he learned always when you see the numbers, and you see the deal works, jump on that because it’s not going to last long.

Brandon:
Yeah, there you go. Love it.

Tamar:
And that’s being a good investor

David:
That is a very good book. I like that book as well.

Brandon:
It is well done.

David:
It’s just not as good as any of the BiggerPockets books.

Tamar:
No, it’s not as good as the BiggerPockets books.

Brandon:
It’s no Long-Distance Real Estate or BRRRR.

David:
I’m going to write the billion dollar real estate investor, and it’s going to be better.

Brandon:
Yeah, we got to get Gary on this. Yeah, we’re going to get Gary on the show some time, and we’re going to talk about his books better. [crosstalk 00:57:27].

David:
All right. What about your favorite business book?

Tamar:
I’m going to go with Who Not How by Dan Sullivan and Dr. Benjamin Hardy. I know you had Dan on recently. And that’s just such a… That’s a great book. It really is a mind shift when you think about who can do this not how do I do it? And for me, it was just a game changer.

Brandon:
That is a phenomenal book. I find myself saying that who not how at least 10 times a day. Just that phrase reminds me, yeah, that’s right. Who’s going to do this?

David:
Did you find that now that you’re thinking like that you have a really hard time with people who don’t think that way, and you’re trying to now get them to [crosstalk 00:58:07]?

Brandon:
Yeah, yeah. I’m constantly pushing people like are you sure you should be the one doing this?

David:
Yes.

Brandon:
Yeah, and everyone’s like, “Well, of course. Well, shouldn’t I be doing that?” I’m like, “I don’t know. Should you?” And then they’re like, “I don’t know.” It’s great.

Tamar:
It’s one of my favorite books to gift.

Brandon:
All right.

David:
Okay. Next question, what are some of your hobbies?

Tamar:
So, we love to travel, and I’m a huge adventure seeker. So, I’ll go anywhere, anytime. I’ve been taking up paddle boarding in Austin because we can do that really easily. And we bike ride and play ping pong.

Brandon:
Josh Dorkin has been begging me to come to his house. He lives six blocks from me, begging me to come to his house to play ping pong with him.

Tamar:
Oh, it’s so fun. You got to do it. Yeah, he probably plays all day long. It’s great.

David:
He does. That’s the thing. He’s doing the same to me. And now I realize why because he’s been practicing nonstop and he knows he’s good, and that’s why he’s asking us. He’s not asking you to go over and play golf or something he never does.

Tamar:
It’s like that scene in Forrest Gump.

David:
Yeah, exactly. Josh is going to Gump us.

Brandon:
[crosstalk 00:59:05] paddle at same time. Yeah, that’s funny. True story. I just read this online the other day, so it might not be true, but apparently in Forrest Gump when they filmed, in that movie somebody says, “Don’t take your eye off the ball.” And so, for the next three minutes of that movie Forrest Gump’s eyes are never off the ball no matter what in that scene. Any scene with ping pong, his eyes are always glued to it no matter where it goes. So, little movie random fact that does nothing for your life right there. That’s our new segment of the show. Movie facts that do nothing for your life part 75.

David:
Was that the Reading Rainbow? Is that what that was?

Brandon:
It kind of sounded like it. I was making up a theme song, but apparently I stole Reading Rainbows. That’s terrible.

David:
You brought it back, man.

Brandon:
Yeah. Okay, last question for me. What do you think separates successful real estate investors from all those who give up, fail, or never get started?

Tamar:
That’s a good one. So a friend of mine interestingly enough just gave me a scenario that I think defines perfectly what I think about this. So she told me about… She’s a realtor in Georgia. And she said, “I had this client, a new client, and I found a property for $65,000. They would have to put 30,000 rehab into it, and the RV was 150. And I was going to manage it for them and take care of any… I was going to manage the rehab, too, and I was going to manage the property.” And they asked her, “Tell me everything that can go wrong with the property. Tell me everything that can go wrong.” And in the end, she did and they didn’t buy it.
And so, I really think that the thing that stops people is that gap from knowing and not knowing. We’ve talked about it today, too. It’s that uncomfortable feeling that you need to take a risk in order to get to the other side. I just think that we’re just so inclined to knowing and to comfort that we don’t want to get uncomfortable. And so, when you’re willing to get uncomfortable, then you’re going to see a lot of things moving for you.

Brandon:
That is so good. That’s one of those rewind the last 30 seconds to listen to it again because it was gold. Tamar, this has been amazing. Thank you so much for joining us today. It’s been fantastic. And I’ll let David ask the final question.

David:
Last question of the day. Tamar, where can people find out more about you?

Tamar:
Yes, they can find out about me at Wealth Warrior Woman, W-M-A-N on Instagram, or [email protected] And if they want to find out about GoBundance, they can look at gobundancewomen.com.

Brandon:
Awesome. Well, thank you very much. This is fantastic. I definitely encourage people to go check out those links and follow you everywhere you’re at. And of course, people can jump in the show notes at biggerpockets.com/show458, ask questions there. Or if you’re watching this on YouTube right now you can leave questions and comments in the comment section below with all the other trolls that like to hang around YouTube. And that’s pretty much it. Hit up Tamar on Instagram or wherever you can find her. Thanks.

David:
Thank you very much, Tamar. Great job.

Tamar:
Thanks so much. This is great. Thanks.

David:
This is David Greene for Brandon Turner signing off.

Speaker 3:
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In This Episode We Cover:

  • Using house hacking as a way to fuel your real estate investing 
  • The difference between passive and active real estate investing
  • Finding cash flow AND appreciation when looking for rental properties
  • Upgrading your investing” and growing your investor mindset
  • Recourse vs non-recourse loans
  • Finding quality agents, certified financial planners, and other partners
  • And SO much more!

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