{"id":99566,"date":"2018-05-31T00:02:31","date_gmt":"2018-05-31T06:02:31","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=99566"},"modified":"2023-02-09T19:36:03","modified_gmt":"2023-02-10T02:36:03","slug":"biggerpockets-podcast-281-how-to-get-your-first-deal-an-episode-for-new-investors-with-bill-jacob-and-david","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/biggerpockets-podcast-281-how-to-get-your-first-deal-an-episode-for-new-investors-with-bill-jacob-and-david","title":{"rendered":"How to Get Your First Deal\u2014An Episode For New Investors With Bill, Jacob, and David!"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Your first deal might just be your most important \u2014 because it leads to all the rest. That\u2019s why it\u2019s so imperative to study others who have just recently purchased their first deal! So today we\u2019re excited to bring you a mashup episode, in which we sit down with <strong>three different investors<\/strong> to hear how they bought their first few investment properties. You\u2019ll hear how Bill went from ex-con to house hacker, how Jacob used some highly creative methods to find his first deals, and how David is building an empire from across the ocean. Don\u2019t miss a moment of this powerful episode! <\/span><\/p>\n<p><a href=\"https:\/\/itunes.apple.com\/us\/podcast\/biggerpockets-podcast-real\/id594419649\" target=\"_blank\" rel=\"noopener\">Click here<\/a>\u00a0to listen on iTunes.<\/p>\n<h2>Listen to the Podcast Here<\/h2>\n<p><iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC9949064744\" width=\"100%\"><\/iframe><\/p>\n<h2>Read the Transcript Here<\/h2>\n<div style=\"overflow-y: scroll; max-height: 400px; background: #eee; padding: 20px; border: 1px solid #ddd;\">\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>This is the BiggerPockets podcast Show Number 281.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><i>\u201cAnd I found out, I was so prepared for it as through Meetups, through reading, through BiggerPockets, things like that, that when I did it, I was kind of so prepared that I was like hey, this really isn\u2019t that hard\u201d.<\/i><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><i>You\u2019re listening to BiggerPockets Radio. Simplifying real estate for investors large and small. If you\u2019re here looking to learn about real estate investing without all the hype, you\u2019re in the right place. <\/i><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><i>Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. <\/i><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What is going on, everyone? This is your host for today, Brandon Turner, here with my co-host, Mr. David \u201cAnalogy Man\u201d Greene. How are you doing? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I\u2019m good, buddy. How are you today?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>You\u2019re good as what? I need an analogy.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I am as good as the icing on birthday cake. I actually had a really good night last night. I was hanging out with our buddies, Mario <\/span><span class=\"s2\">[inaudible][1:04], <\/span><span class=\"s1\">Beau Epstein<\/span> <span class=\"s1\">and Vinney Chopra.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I love those guys.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>How do you not love those guys?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>We need to get them all on the podcast sometime.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Yeah, we need to share their awesomeness with the rest of the world.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>We do. Anyway.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Vinney is a multi-family syndication guy and he\u2019s telling me how he bought a $23 million dollar apartment and he raised money to do it. He\u2019s getting investors like 18% return on their money. And then Mario is probably the top appraiser in the Bay Area so he knows all about how appraisals are done. And Beau Epstein, he raises money\u2014he works for a fund that\u2019s raised money and he gives hard money loans to investors. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So, I get to sit there with these guys and I get to learn how loans work, what lenders are looking for, how to put yourself in a position to get more money, then I get to learn how appraisals work and how to add more value to my houses and as a real estate agent, what I can do to get my houses to sell for more. And then I get to learn eventually when I want to start buying apartment complexes from somebody who\u2019s been doing it for 12 years, who\u2019s got hundreds and hundreds and hundreds of units, maybe thousands by now, under his belt. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I\u2019m just sitting there thinking like, how cool is this? I get to talk about real estate for a living and then I get to hang out with guys that are this successful and that\u2019s what fuels me to want to do better in my business and learn more because I\u2019m around guys that are so inspiring. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, what\u2019s cool about that, too, is people listening going oh, I wish I could do that. You can do that. Every single person here should be hanging out with and talking with people and meeting people in your local area. I mean, that actually sounds a lot like today\u2019s <i>Quick Tip<\/i>, I guess we could say. It is go hang out with people in your area, whether it\u2019s a local BiggerPockets events\u2014you can go to BiggerPockets.com\/events for that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Or you just find somebody on the site who is in your area. Go to BiggerPockets.com\/meet to search people in your zip code. Whatever. Just find people in your area that you can connect with, just like you did last night. Which, I wish I was there. That would have been a very fun conversation. But whatever. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>It\u2019s always more fun when you\u2019re there. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Aw, thanks.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>You were like too busy in Hawaii.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Whatever. I\u2019m in Washington but whatever. I would have come a thousand miles for that conversation. No, I wouldn\u2019t have, but you know. Whatever. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right, moving on. Speaking of hanging out with multiple people, today\u2019s show is actually a little different in that there are multiple interviews happening today. In fact, we\u2019re talking with a few different people. First of all, we\u2019re talking with a guy who was in prison for a decade, got out, and rather than like accepting life sucks, I\u2019m going to have a hard time doing this, he goes and changes his entire life around, became an entrepreneur, became a real estate investor, and he\u2019s got a really cool story buying his first deal. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then, secondly, we\u2019re talking to an engineer who turned into a real estate investor in his twenties. He\u2019s actually really good at buying off-market deals. So, finding deals that aren\u2019t listed. And then our third guest is a buddy of mine who I met in Hawaii who is actually a Marine who has invested in real estate on the mainland. In other words, not in Hawaii. And he\u2019s got a really cool story. He bought a property for very low money down recently. You guys are going to love that story\u2014a 10-unit out in the Midwest. So stay tuned for all those stories. But before we get to the stories, let\u2019s hear a quick word from today\u2019s show sponsor.\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Here\u2019s why I\u2019m a big fan of SimpliSafe Home Security. SimpliSafe is ready for anything that gets thrown at it. If a storm takes out your power, SimpliSafe is ready. An intruder cuts your phone line, SimpliSafe is ready. Say they destroy your keypad or siren, SimpliSafe will still get you the help you need. And here\u2019s what I love about that. Sure, maybe it\u2019s overkill and maybe you don\u2019t need to be ready for every worst case scenario but that\u2019s what makes SimpliSafe so great, because it\u2019s always ready. Now, SimpliSafe could cost an arm and a leg. It should but it doesn\u2019t. That\u2019s because they\u2019re good people over there at SimpliSafe. They charge you what\u2019s fair. $14.99 a month. No contracts. No hidden fees. I recommend SimpliSafe to everyone I know. You\u2019ve got to check it out. Go today to SimpliSafePockets.com. Again, that\u2019s SimpliSafePockets.com.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right and with that, let\u2019s move on. So today, we\u2019ve got three guests like we said. We\u2019ve got Bill, we\u2019ve got Jake, and we\u2019ve got David. So we\u2019re going to do them in that order. Each interview is about 30 minutes a piece, so it\u2019s a longer show today so stay tuned for the whole thing. Again, if you have to like go to work or you\u2019re in your car, listen to the other ones later because every story is unique. Everyone is going to give you guys a lot of ideas and suggestions and confidence and encouragement on your own journey, as you learn how these three investors kicked off their investing career. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And last thing before we get to the interviews, and the first one here with Bill, is I want to take this time to invite every single one of you guys to a live, online event that I\u2019m hosting this week. Look, it\u2019s really hard to find good deals right now. It\u2019s really, really tough and so I\u2019m going to do a live webinar, an online class this coming week. Five unique strategies for finding incredible deals in today\u2019s competitive market. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So we\u2019re going to go through five strategies that investors are using. We\u2019re going to go in-depth on those strategies. So if you\u2019re looking for more deals, show up. You sign up by going to BiggerPockets.com\/webinar. Again, BiggerPockets.com\/webinar, and I hope to see you there. Now with no further ado, let\u2019s get to our interview. Our first one here with Bill from Wealth Well Done.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right, Bill, welcome to the BiggerPockets podcast. Good to have you here. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Hey, I\u2019m so excited. So, let\u2019s jump in.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Awesome, awesome. So, let\u2019s go to your backstory. Before we get into your first real estate deal, you have an interesting story. So I\u2019ll let you tell it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Starts off, I was 21 years old and I wake up, I was going to college and I found out, my friend died of a drug overdose. The next thing I hear is the cops, they\u2019re looking for me because I was partying in my apartment that night before. I didn\u2019t know anything bad happened. The next thing I know, police are coming to my apartment, I go running out the front door, they\u2019re there. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I get put in the handcuffs, and put in the back of a squad car for the first time in my life, brought to jail where I sat in jail for the next year. I got charged with reckless homicide by delivery of a controlled substance and before I knew it, I was being sentenced to 10 years in prison for it. That was my future for the next 10 years. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Whoa. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s a lot.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Okay, so you\u2019re 20. You hit your roaring twenties nice and slow place.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>20 years old, I thought I had life all figured out. I was in college. I was doing well. I had two different lives that I was living. I had this perfect suburban life going on but then I had this other drug life. And I thought hey, as long as I\u2019m doing what the suburban life wants me to do, I can party it up. And I got away with that for years until one night happened and I never thought a friend of mine was going to die. And it happened. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Wow. That\u2019s crazy. Did you spend the whole 10 years in prison or did you get out early?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>No, in the state I was incarcerated in, there was no good time, no parole. So once I got sentenced to it, in 2002, there was no way out. No matter how good I was, no matter what programs I took, I was in for I think, 10 years was 3,650 days. So I was locked up in 2002 and I finally got out in 2012. And I\u2019ve been out five and a half years now. And I\u2019ll tell you what, these are the best years of my life so far.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Got that. I met you in person once before. We hung out at FinCon. And you were super positive, uplifting, super friendly guy. There are other people I have met in my life, and I\u2019m sure David can agree, because David is the police officer here\u2014like who are not super friendly and uplifting and happy when they get out of prison. Like they don\u2019t change their life around. So why was your story different? What changed in prison for you that other people don\u2019t seem to have happen to them?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, I will definitely say my success didn\u2019t start when I got out. It started right away in the very beginning. And I\u2019ll tell you what, I went through the same feelings of when somebody fails, like for bad things happen to somebody, I went through the same process that everybody else does. First, you have shame because I felt shameful for some of the decisions I made that put me in that situation. Then you feel guilty because you\u2019re like, man, I did this to myself. And then you know what, acceptance starts to come. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then all of a sudden, at least for me, I had this little voice inside my chest that went to my mind and it said, you\u2019re better than this. And at least for me, I chose to listen to that voice and I said you know what, and my first cellmate ever, I remember him telling me one time\u2014he said, you know, this isn\u2019t going to last forever. You will get out of here one day as long as you don\u2019t have a life sentence. And I held onto that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">That was a thought that I held onto for the next 10 years. I said, you know what? I will get out one day and every day in here, even though my life sucks or it seems to suck, I\u2019m going to do something with it so that when I get out, I\u2019m going to be 31 years old and I\u2019m going to take advantage of every opportunity that comes my way. I don\u2019t know what\u2019s going to happen to me. I don\u2019t know if I\u2019ll be successful. But you know what, I\u2019m going to do it. I\u2019m going to stay out of prison. And that was my goal the first day I got out of jail. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>So what I love about that is that you took responsibility for your part. You could have played the victim. You could have blamed the cops. You could have blamed the system. You could have blamed anyone but you said nope, this is what I did wrong and I want to change that. And then you took it a step further and said, I\u2019m not just going to sit here and wait. I\u2019m going to start taking proactive steps to prepare myself so that when I get my chance, I\u2019m ready. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">That\u2019s something that I really, really love. I feel like Olympic athletes know four years later, I\u2019m going to be in a competition. You could wait until the competition to start getting ready or you could start training right now so that when it comes, you\u2019re in peak performance, right? And not enough people understand that. They\u2019re like well, I can\u2019t buy a property because I don\u2019t have any money. I\u2019ll wait until I save up money and then I\u2019ll learn how to invest. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Well, you just put yourself back however long it takes you to learn. You could be learning while you\u2019re saving up the money. That was something that you did right while you were there and you talked a little bit about some of the books you read. Brandon, do you have anything you want to add before we ask him about those?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I do. Well, I wanted to point out if you\u2019re listening to the show right now, maybe you didn\u2019t end up in prison but maybe you just screwed up your life in some other way. Maybe you woke up one day and you\u2019re like I\u2019m 45 years old and I have no savings, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Like, put yourself in Bill\u2019s shoes, not necessarily like the same exact situation but the same solution that you found, Bill, was like take responsibility, accept the fact, and then say starting now, I\u2019m going to be a different person. I\u2019m proactively changing my life. So I just want to again, commend you for that. Just the attitude was brilliant. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Totally. And let me just add one point. I\u2019ve never shared this on the air before but I remember one moment that it all became real to me. I had been in prison for maybe a year and a half or so and a friend came to me and he says, hey man, I got some pills in here, you wanna take them? And I remember thinking, for a second I thought, oh, I could just do this as a special occasion. Like I\u2019m not getting out for eight years. Like, who cares? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then all of a sudden, it was a revelation in my mind like, you know what? If I\u2019m going to be successful out there, I\u2019m going to start right here with nothing. Like, I\u2019ve got to make the decision no, and from that day of saying no to that, I said you know what? From now on, I\u2019m just going to keep doing it no matter where I am. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s amazing. I love, love, love that. That\u2019s why you\u2019re successful right now, because of that decision you made eight years ago or whatever that was. And people need to understand that. So tell me, you\u2019re committed to being successful although you had no idea what that even meant at the time you were there. What were some of the things you did or the books you read that helped transform your mind to prepare you for where you\u2019re at now?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, totally. I\u2019ve been successful financially in the last five years I got out, but when I was in prison, money doesn\u2019t exist in prison. So I was no way able to comprehend like financial ideas. So I took the opposite approach. I looked at, what can I control right now? And I said, I control my mind. I control my thoughts. I can control my feelings. I can control what I want. And I started getting into reading a lot of just leadership books. Even great leaders, Abraham Lincoln, Martin Luther King, Jr., people like that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then I got into like John Maxwell, all his leadership books. <i>21 Irrefutable Laws of Leadership<\/i>, some Tony Robbins, <i>Awaken the Giant Within<\/i> type stuff. And I didn\u2019t know if it would work but I started being like, you know what? If I can learn how to become a leader, and not a leader of others, but if I can just lead myself, and learn how to be a leader in myself, then theoretically, I should be able to lead myself through no matter what happens to me through the goals I want one day. And that was a philosophy I grabbed onto and I read as much of that stuff and prepared myself to not only how do I lead other people but how can I best lead myself to the dreams I see in my mind. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, that\u2019s fantastic. I think the books you read influence so much about who you are. Like, there\u2019s a famous quote, I don\u2019t remember who said it but like, \u201cIn five years from now, you\u2019ll be the same person you are today except for the books you read and the people you meet\u201d. And I love that quote. The people we hang out with define who we are and the books you read define who we are. And I would even add the podcasts we listen to change who we are as well, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So when you got out of prison now, you can\u2019t easily\u2014people don\u2019t like giving jobs to people who get out of prison. So now you are going to do nothing for the rest of your life and you\u2019re going to sit around and blame the system for the next 40 years, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>That was one choice I had.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What did you do out of prison?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>So I got out of prison, I had three goals. Some people might look at me and be like those are easy goals, but to me, they were hard, scary goals because I was getting released into a scary new world that I didn\u2019t even know. Social media didn\u2019t exist, cellphones, what they are today, didn\u2019t exist. I didn\u2019t know anything. So I had three goals. One, quit drugs. Quit the things that were holding me back and putting me there. Because I knew if I wasn\u2019t using drugs, I would never go back to prison again. Two, stay free. And then three is just get a job that makes $10 an hour. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Because I knew financially, I could live on $10 an hour. It might not be the most glorious lifestyle but I could do that. And I thought, being a leader or those things that I\u2019ve read, that doesn\u2019t have to be the rest of my life. That\u2019s just one step because once you get that $10 job, you can set your next goal at $15 an hour, $20 an hour, or starting your own company or whatever. So that\u2019s what I did. I got my first job stacking magazines for $10 an hour and that only lasted a couple of months until I started my first business and we\u2019ve been rocking and rolling since. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>So tell us about that. What did you start and why did you decide to become an entrepreneur then?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>I had my first job and I started interviewing for a better job. And I met a business owner and he basically, just an interview\u2014so I was doing nothing more than what most people do when they\u2019re looking for a better job, they go on interviews, they network, they meet people. And the business owner looked at me and he talked to me, he found out my backstory, and he\u2019s like you know what? You can start your own business. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And he\u2019s like you know what? I could give you a job but you look to be happier in what you\u2019re talking about, to doing your own thing. He\u2019s like, how about I teach you how to start a business and then you can just sell my products? And I\u2019ll fund your purchase orders. And I was like sweet, that\u2019s kind of what I\u2019m looking for because I always wanted to get back the life I lived in prison. Like, not the bars and stuff but being free, reading books that I wanted to do. So I looked at him and I was like, that sounds great. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So he just said, man, start going door to door, make contacts with businesspeople. I\u2019m actually at my home office now so I sell branded apparel to corporate accounts, so promotional stuff. And first six months, I think I sold like $10,000. And it was like $300 bucks a month. You can\u2019t live off that. But I kept at it. I kept networking. I kept just going door to door, looking for people who want to buy from me and I think in the next six months, I sold $180,000. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I started to be profitable enough to save money and I was living in my parent\u2019s basement at the time and then I was able to start saving money and actually getting out of there. And that\u2019s when I bought my first house.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. So we\u2019re going to get to the house here.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, I live in the suburban area, the Metro, Twin Cities, Minnesota. Minneapolis, St. Paul, Minnesota. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>My home turf. I left there at 18 and didn\u2019t come back. Okay, I came back but I do like Minnesota. I\u2019m glad you\u2019re representing my home state here. I want to talk real quickly here about the entrepreneurial thing before we move onto the real estate. Because so many people listen to this show right now work a job that they do not like. They\u2019re making $10 an hour, maybe $15, maybe $20. But they got a job they don\u2019t like and they look at real estate like it\u2019s some kind of magic pill. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Like, if only I can buy enough real estate to quit my job, whatever they don\u2019t\u2019 realize is that there is an in-between that\u2019s possible and that\u2019s call entrepreneurialship. You can start your own business of some kind, to start drawing more revenue than you were making from your job. So I know David here is now a real estate agent. So he does what he loves and in the industry that he loves but he\u2019s a real estate agent. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I write books for BiggerPockets but I also buy real estate. So there\u2019s other ways to make money because just real estate that a person can go into. So do you have any advice for people who are thinking, I do want to start my own business. What have you learned?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>What I\u2019ve learned is you know what? It starts slow. I had to work a job I didn\u2019t like first before I found a job I actually liked. So one is I started somewhere but I always had the next goal of what do I want to do next? And then if you look at my story, I didn\u2019t have this great idea to start a big business. I was just networking and finding other entrepreneurial minds and entrepreneurial minds that I was meeting with actually looked at me and said actually, this is what you should do. Try this out. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So the networking thing was my next step and then the final step was just not being afraid to get out there and start selling and making contacts. For me, I\u2019m a salesperson. That\u2019s what I am. But really, when you get down to it, sales, it\u2019s helping people. They need a service or a product and all I\u2019m doing is presenting that service or products at a good value so you\u2019re looking for that 10% of people you meet that says yeah, I could use what you\u2019re doing. Let\u2019s work together.\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s awesome. I like that you mentioned that you got around other entrepreneurs that said hey, you should be doing this. I mean, that\u2019s really, really powerful. My life changed when I got around more successful people because I was working at a police officer. I was the most successful person in that world. Everybody was looking up to me like what should I do? And you get lulled into this false sense of security that you\u2019re really, really smart. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then I started hanging around with guys that were much more successful than me and all of a sudden, I felt like that big. It was like I was the guy that was in really good shape and all of a sudden I had to start hanging out with Crossfit people and I\u2019m like oh my gosh, I don\u2019t want to take my shirt off. This is really bad, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So it forces you to kind of step up your own game and you\u2019re around smart people that tell you smart things. Like, you\u2019d be really good at that. So then you get into it and you start to crush it and your confidence goes up and your skills get built. Now, what I understand is you took some of those skills and you applied them into real estate investing. So tell us a little bit about how you found your deal, what kind of deal it was, why you bought it. All the details. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Sure, so I bought my first investment property in May of 2017. So a year ago\u2014so I\u2019ve been a landlord for a year now. So I actually have some real life experience. But no, the property\u2014the beginning of it started in 2015 when we bought our first house. We bought half of a twin home. So it\u2019s basically a duplex, or if you think about it, it\u2019s a large townhome that can be split up and it\u2019s zoned a single-family property. So we bought half the property. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Here\u2019s another thing is I had no idea if I was good at real estate or fixing stuff and all the things that come with home ownership. But in 2015, I found out I liked it. I like projects. I like working at it. So we lived in our house, saving money, and I became friends of the neighbors who owned the other half of our property and you know, when their family got big enough to move out to the next house, I just planted the seeds and said, you know, if you guys ever want to sell, I\u2019m here. If we can find out a deal that works for both of us and we both walk away feeling like we got a deal out of this thing, I\u2019m open to buying it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I planted that seed about a year before they sold and all of a sudden, one day, I got a text saying hey Bill, you want to talk numbers with us? And at that point, I got all excited and I said all right, let\u2019s start talking. And then the next thing we know, we were in negotiations and I bought it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. So why\u2014what even sparked the idea of, I\u2019m going to buy it. Essentially, a twin home, so like two single-family houses that are next to each other, combined. So it\u2019s like a duplex. But what made you think, I want to buy the neighbor\u2019s house? How did that even come into your head?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, so I had a couple of inspiration. I think if you want to live your dreams, you first need to look at other people in the world who are living their dreams and say, that\u2019s the dream I want. My friend had 10 properties and I saw him leave Minnesota and go live down in Austin and now he\u2019s living the dream down there with his properties up here. So I looked at his life and I said, man, that\u2019s the life I want. So that was the first deed that stuck in my mind. And I said, hey, I live next door to this property. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">What a great first property to try to own because I live next door to it. I had a ton of fear. You see the news saying, tenant trashes the house and the guy loses $100,000. So I had all this fear that I didn\u2019t want that to happen to me so I thought, hey, I could live next door to it and then when I got the numbers, they started making a lot of sense. It was going to cash flow me from day one. I was going to make money living in my own house. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And eventually, I\u2019d have this massive\u2014it\u2019s a 2000 square foot side unit. I\u2019d eventually have two properties that I could go out and buy another one. And I\u2019ll also say is since I\u2019m self-employed, just in case I had a bad sales month, I have rental income coming in. So I didn\u2019t have to worry about losing a big account or something like that. So it helped\u2014real estate helped my entrepreneurial endeavors.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, I love that. And you know, we talk a lot about this idea of house-hacking which is basically what you\u2019re doing in this property. You basically live in one unit, rent the other ones out, and I love\u2014in fact, I wrote an article for Entrepreneurial.com a long time ago called like \u201cHow House-hacking Can Help You Build Your Entrepreneurial Business\u201d. That\u2019s not the exact title, but basically, the idea being if you\u2019re trying to build a business and you\u2019re trying to be a real estate agent or have a print screen company or what do you call it?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Promotional company.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, or whatever. You want to sell Tupperware door-to-door or whatever. If you\u2019re trying to build a business, what better way to build a foundation for your life than house-hacking where if something goes wrong, you have a bad month, which does happen. There are months where things don\u2019t go through the way you want them to. That you\u2019re not like, well, honey, guess we\u2019re eating the kids this week for dinner. You don\u2019t have to start cannibalizing your family because you don\u2019t have money.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Sure, absolutely. Because when you\u2019re self-employed, you\u2019re 100% commission salesperson on that money you bring in. That can be great with big months but there\u2019s always going to be lean months. And if you\u2019re in it long enough, there\u2019s always going to be big accounts that leave for whatever reason and for me, it\u2019s nice to have real estate that\u2019s still cash flowing me through those hard times.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, definitely. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>So to me, it\u2019s just added up to this whole awesome experience of being an entrepreneur. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>So what about funding your deal? Did you end up getting just normal traditional bank financing for this thing, for two purchases? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yep, for our first property, we saved $40,000. Between when I say \u201cwe\u201d, I am married so my wife and I saved $40,000. We put the down payment. It was 20% down on our first house. And then for the second house, we had three years from when we bought our first house to another house, so we saved our money. We needed another 20% down for a conventional loan, which we qualified for and then we had the decision, do we put 20% down or 25% down to get a lower interest rate?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">We had saved aggressively, so we had the 25% and for me, buying my first investment property was still scary. So my logic was, let\u2019s put as much down as we can so the sucker cash flows as much as we can from the very beginning and then just in case I hate being a landlord, like literally, I hate it. I wake up and I hate my life. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">My backup plan was still cash flow is enough that I can hire a property manager to run the whole thing for me. So we put 25% down, just to protect ourselves and from day one, it cash flowed $600 a month. So we paid down $200 for mortgage on the month and it cash flowed $600. So $800 a month, increasing my net worth\u2014for me, it\u2019s a sweet deal.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>So let me interject here, Bill. I\u2019m going to assume that because you\u2019ve talked to us about how you like to be prepared and put things in place, that is what led to this investor\u2019s strategy and why you chose this property. Because like you said, I knew if I didn\u2019t like it, I could hire a property manager. They can take it over. It\u2019s going to be there for me when my own business work is not producing as much money. I\u2019m going to have this cash flow. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Like, in every way, you found a way to make your fears\u2014you found a hedge for all your fears so that you could move forward. Now, you\u2019ve developed a new skillset that in buying this property, your confidence is going up so you can buy the next one, tell me what\u2019s your plan for the future? How are you going to expand on this and grow? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, so for me, like you said, it was dead on. I first had to overcome the fear of the unknown, of owning and investing in real estate. And I found out I was so prepared for it, through Meetups, through reading, through BiggerPockets, things like that, that when I did it, I was kind of so prepared that I was like, hey this really isn\u2019t that hard. And sweet, it\u2019s making me money. I own this giant property, to me. And I basically\u2014very little of my own money comes out of pocket to service the whole thing.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So now that I did that, it broke down the barrier fear. I\u2019ve owned this for years so my wife and I are just going to continue our aggressive savings way, keep building up our portfolio of investible cash, and some investments, too. And that way, when we\u2019re ready for the next property, then we can decide what we want to do. Do we want to move out of our house, buy another property, another single-family home for us to live in? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Right now, we love our house so maybe we target another twin home because I\u2019ve had so much good experience owning this one. So right now we\u2019re in the savings strategy of not getting carried away because I like the idea of large down payments that keep my mortgage cost low so they cash flow me. I\u2019m into real estate for cash flow. Like, that\u2019s what I\u2019m here for. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And so you know, I think we have a goal of just continuing making bigger down payments until eventually where one day, dreaming of buying in cash\u2014that can ten years out, 20 years out\u2014and I think our long-term goal is I\u2019m a big-time skier. I love beach weather in the Minnesota winters. I love Minnesota but I hate the winters here. So maybe we buy a ski condo or maybe we buy a beach condo, and then we just kind of go in a circle around our favorite properties throughout the year. So that\u2019s what I\u2019m aiming towards, eventually. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s super cool. So do you currently manage the properties yourself then, I\u2019m assuming, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, I do. I live next door to it. I\u2019m self-employed so if something happens during the day, I can run over there. It\u2019s easy. I like the occasional project. And I was prepared to get a property manager but for this deal, so far, it\u2019s been great.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I love the fact that you pointed out the idea that you basically ran the numbers. You made sure it still worked with a property manager in place and then you did it yourself. And that\u2019s something I teach all the time is even if you want to manage yourself, which I think is a good idea. You\u2019re local, you can do it, great. I think it\u2019s a good skill to have. But even if you do, always act as if you\u2019re not going to, right? Because I made that mistake that I own properties today that if I didn\u2019t manage them myself, they wouldn\u2019t cash flow anymore. So did I really buy an investment or did I buy a job? I bought a job. So I love that you said that.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>And I\u2019ll say, as a beginning investor myself, that owns my primary residence and another one, that was the number one tip that I got from an accountant that helped me. And if you\u2019re going to buy property, just worst case scenario, hire a property manager if you can afford it and then just making you money, somebody else is doing the work, and you\u2019re in a great spot as a backup plan.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yep.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I love that. You mentioned that you\u2019re in sales. So your income is inconsistent. So you might have a lot or you might have a little, right? Now you\u2019re investing in real estate which there\u2019s another little wrench in this\u2014it can be great because it\u2019s consistent income but you never know, you can have an expense that hits out of nowhere. So you have a lot of uncertainty that\u2019s kind of floating around you. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And one of the things you hit on, I want to make sure we cover is, you planned to combat that uncertainty by the way that you lived your life, right? Tell us a little bit about some of the ways that you live frugal because even though you haven\u2019t mentioned this, I can guarantee you do because I know how your brain works after listening to you. What are some of the things you do to live beneath your means so that you don\u2019t become overcome with anxiety and fear that something could go wrong and I won\u2019t be ready? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>My wife and I will look for as much free entertainment as we possibly can. And what I mean by that, if you go stroll through our house, you\u2019ll see guitars laying around. You\u2019ll see pianos. You\u2019ll see mountain bikes. You\u2019ll see skis. You\u2019ll see cross-country skis. We have everything we could do that we could literally go out our backyard, which is a nature preserve, by the way, and have fun. All of our date nights are spent just on a bike, doing stuff, and that doesn\u2019t cost us any money. So that was the first big thing.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The next big thing was, our first house, we were able to afford on under $1000 a month for our mortgage. So that helps us put in a position to be flexible with our money and spend wise. So one, we keep our expenses as low as possible. I drive old cars. That\u2019s another big thing. So if you look at this, my house is cheap, my cars are cheap, my hobbies are cheap. And before you know it, you\u2019re living an absolutely fantastic life for basically nothing. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then I know what\u2019s going to happen is as we become more financially successful, as we start having more investments in our portfolio, then they\u2019re going to start paying us to have a wealthy life, which is go on ski trips, starting to do all that stuff. So that\u2019s our long-term plan. Prison taught me how to see life in ten-year intervals. And that\u2019s what I do now.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Oh, I like that a lot. Yeah.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s incredible. The perspective you have is really where your real value is because it\u2019s going to make you so much money. You\u2019re not missing out on life by not driving a Corvette and not going on big vacations. You\u2019re having just as much fun or more fun than the next person by hanging out in your own backyard. And it\u2019s helping you accomplish your goal, right? If someone says, you know David, I really want to get in good shape. I don\u2019t know, it\u2019s really hard. I\u2019m having a hard time with it. If I open up their fridge and I see a bunch of junk food, I can question how bad you really want to be in shape.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">If you tell me that you want financial independence and you want to invest in real estate but you\u2019re just scared and it\u2019s really hard, by the way you spend your money, I can tell how serious you are. That\u2019s your fridge, right? If you\u2019ve got tons of credit card bills and you\u2019re going out to eat all the time and your expenses are really high, you don\u2019t really want this that bad. You just want to pretend that you do and you want to talk about it all the time but not do anything with it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">It\u2019s the same way with what you\u2019re accomplishing. I know you\u2019re serious about it. This is something you really want and you\u2019ve made the adjustments to your life to get there. Brandon, what do you think about that? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I agree.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>I\u2019ve got something I can add onto it. I hope people that are listening to this are realizing you know, it started with me with tiny little steps. Like, my first goal was just to be drug-free. It\u2019s not that hard. My second goal was just to get a job that made $10 an hour. Okay, we can all do that. And then, the thing is, when you do those little tiny steps in the beginning, you start feeling confidence. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Like hey, I did this. Let\u2019s push it a little further and see what happens. Let\u2019s put ourselves in a safe place in life and then let\u2019s take a little risk and see what happens. And you protect yourself from the risk, even if the risk goes bad, well you\u2019re protected from it. And just keep growing that and before you know it, you\u2019ll find yourself in a situation you never thought you\u2019d be in like I\u2019m in now. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s cool. We interviewed a guy back a few weeks, Bryce Stewart, on Episode 277 of the BiggerPockets podcast, and he tells a story in there about how he wanted to sell his truck but he had a loan on it and didn\u2019t know how to do it and so like, he just didn\u2019t do it for the longest time. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And finally, he was like, you know what? I don\u2019t know how to sell the house but I know how to vacuum my truck. So he went out there and vacuumed it. The next day, he\u2019s like, I don\u2019t know how to sell it but I know how to take pictures of it. So by taking these little actions ahead of time, they propel you and give you confidence, even though you can\u2019t see the whole picture, I used an analogy of driving through fog, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You can\u2019t see a mile down the road when you\u2019re driving through fog. You have to trust that there is a road up there and there\u2019s not going to be a murderer in the middle of the road with an ax. But like, all you can see is 20 feet in front of your car. But if you keep driving, just keep moving forward. You\u2019re going to always see a little bit further and further ahead.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yep, and for real estate investing, I first had to move out of my parent\u2019s bedroom and buy my first house. And that gave me the confidence like, oh, real estate isn\u2019t that scary. I can figure this out. And then that gave me the confidence for the next one.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s what\u2019s so cool about this episode because we\u2019re talking about people who are taking some of their first steps. We\u2019re not talking about the guy that\u2019s 25 steps down the road and you\u2019re like, well that\u2019s so cool. I have no idea how I\u2019m going to get there. Those are the bodybuilders that are competing professionally and you\u2019re like, how will I ever look like that person?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All you need to do is go to the gym. Right? Just get there. When you\u2019re in the gym, look at somebody else lifting weights and try to copy him. It doesn\u2019t have to be a heavyweight. Just pick up a weight and start getting the movements down. Once you\u2019ve got the movements down, start to see how many of these can I do before I get tired, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And you\u2019re incrementally adding to the weight, adding new exercises as you\u2019re there, being around people at the gym is going to teach you more about working out. It\u2019s going to be seeing what they do and you\u2019re going to copy it. If you\u2019re in that environment long enough, you will learn how to work out and then it\u2019s up to you if you actually want to become in great shape. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I\u2019ve got to stop using these workout analogies because I\u2019m in terrible shape. But I know that\u2019s just how life works, whether it\u2019s real estate investing or getting a better job or getting in really good shape or building up your own wealth. Whatever it is, it always works in these small incremental steps. And that\u2019s what we\u2019re teaching people. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">How did you get that first couple of steps going, because everybody can do those. Everyone can vacuum their truck and keep your eyes on that. Like Brandon was saying, keep your eyes on what\u2019s right in front of you, the road that\u2019s right in front of you and keep going in that direction and eventually you\u2019re going to get there. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>I have to say this, too, I remember one of our first steps, my wife and I, we were just getting our life started. We didn\u2019t have a house yet, and one of the first revelations we had, we were out probably on a bike ride or something and we stopped into McDonald\u2019s to buy breakfast and there was the 99 cent McMuffin and there was like the $3 with egg McMuffin. And we looked at that and we said, you know what? One day, we\u2019ll buy the $2.99 McMuffin with egg but today, we\u2019re going to buy the 99 cent. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And we repeated that over and over. And I guarantee you, people that heard that conversation would laugh and be like, look at these idiots. And then five years later, you look at that guy who didn\u2019t buy the egg McMuffin has two houses and is worth about $250,000 to $300,000 and is kicking butt in life. And he\u2019s like, man, I wish I would have bought the 99 cent meal, too. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Can you post that on your Instagram with like one of those\u2014when everyone else is posing in front of their Ferraris, you\u2019ve got like a $2.99 egg McMuffin in your picture with an inspirational quote, \u201cWork hard, and you, too, can be where I am eating the expensive\u2014\u201d <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>This is how you\u2019re getting rich. This is how you buy investment properties, right here. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>It reminds you of videos you see on YouTube ads a lot, the guy like holding the check for $100,000 and is like, I\u2019m just going to my bank to go cash this $100,000 check right now. Like people still get checks from title companies, but yeah. I love the fact that you\u2019re saying, just take\u2014these little things matter. They\u2019re mindset more than they are tangible. That $2.00 you saved, is that really changing anything? No, but it\u2019s the mindset that you have that changes everything. Because I love that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>That way, when $2000 opportunity comes and you know how to buy the $200 one rather than the $2000 one? Man, you can start kicking butt. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yep, there you go. So many people in this world want to achieve, like I don\u2019t know if it\u2019s like the mentality we have or whether it\u2019s a millennial thing. I don\u2019t think it is, I think it\u2019s an everybody thing, just a human nature thing. We want the end result now, especially like, I remember getting out of college. You see your parents, they have a nice four-bedroom house and they have a nice BMW and so you\u2019re like, well, I deserve that as well. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So they go out and finance those things and get into a ton of debt because they want that life now. I love that you brought up the ten-year increments. Think of life in ten-year increments. This phase in my life, this little time here is going to be about this. And if I do this right, I can do that differently. Then I can get my parent\u2019s life that they worked for 40 years to get as well. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>For sure. I remember when we bought our first house and it was connected to another house, I\u2019m sure people looked at us like, oh, I wouldn\u2019t want to live in that house. But when they look at now that I own the whole thing and I own multiple properties and I\u2019m thinking about buying this ski condo and a beach condo eventually, they\u2019re probably like man, that was a good idea. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What\u2019s Dave Ramsey always say? Live like no one else now so you can live like no one else later. I always liked that a lot. Cool. All right, well let\u2019s shift gears here and head over to the end of the show, which section we love to refer to as our <i>Famous Four<\/i>. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">What is your favorite or current favorite real estate, specifically real estate related book?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>I\u2019m going to go with the one that changed my perspective so much and that was just <i>Rich Dad, Poor Dad<\/i>. It defined what an asset was and what a reliability was in my life and once I really understood those meaty terms, then I was able to focus all my cash on buying assets. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>There you go. Perfect.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>All right. What\u2019s your favorite business book?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>I\u2019m going to stick with leadership books because that way, if you understand leadership, you can use leadership skills to build whatever business, whatever field that your soul craves living in, so I\u2019m going to go with John Maxwell, <i>21 Irrefutable Laws of Leadership<\/i> or let\u2019s throw in Tony Robbins\u2019 <i>Awaken the Giant<\/i> <i>Within<\/i> one, something I remember.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Cool.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Love it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Both fantastic books.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Tell me about some of your hobbies. And I\u2019m very excited to hear about this because I know you do stuff that doesn\u2019t cost much money. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Favorite hobbies\u2014a lot of our hobbies are, we consider our hobbies our biggest investments. Yeah, it cost some cash going up front but once you have the gear, you\u2019re set for a free life of it. So my wife and I got mountain bikes. We got trail bikes. Biking in the summertime is one of our favorite things. I\u2019m a bigtime skier and so is my wife. We love to fish. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">My wife actually can outfish me because I like to swim a little bit, too, but she can get in the boat and go all day long. So anything outdoors. And when it\u2019s rainy, I kind of like working on real estate projects. I like Google and YouTube, how to do a project using some physical exertion and looking at it when you\u2019re done and being like, oh, that\u2019s cool. I did that. I learned a skill in the process. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I love it. All right, last question from me. What do you think sets apart successful real estate investors from those who give up, fail, or never got started? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Understanding that we all have the fear of the unknown in our brains. That fear of the unknown is there for every human being. You\u2019re not alone if you\u2019re afraid of it and I think the successful ones are the ones who stop back and think and know that yes, the fear of the unknown is there so therefore, I\u2019m going to take a lot of time before I get to that fear and prepare for it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So even if that fear that I have happens, I\u2019m going to be okay. I\u2019m going to have food on the table. I\u2019m going to have a dry, safe, warm place to live. And then also, one of my favorite things that inspired me was a Warren Buffet quote. When he began investing in companies, he had to learn that sometimes a terrible company at a rock bottom price isn\u2019t the best thing. He found out that good companies at a fair price were a better investment. So that\u2019s what I see. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I took that to real estate investing and I look for good properties in good locations, in good school districts. I look for properties that good tenants would want to live in, that when they come tour with me, they say wow, this is a really nice place because if you can have a product that people want to use, and own, and live in, then you\u2019re always going to always have people that want to live there. And it makes the job of a landlord or a real estate investor so much easier. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s fantastic. I love how you mentioned that you\u2019re going to have fear and anxiety anytime you\u2019re dealing with uncertainty and the unknown, the quicker people can just understand and accept that, the more successful they\u2019ll be. As a real estate agent, that is like the number one problem for me and my business, is working with clients who are just always\u2014they\u2019re on edge the entire time. Because you just don\u2019t know. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Brandon is going through a transaction right now. He\u2019s trying to buy a house in Hawaii and he\u2019s stressed but he\u2019s dealing with this better than the most people because he\u2019s just accepted\u2014I don\u2019t know if I\u2019m going to get it. I might, I might not. I don\u2019t want to get emotionally attached. Because you don\u2019t know if the loan is going to come through, if the property\u2019s going to appraise or what the inspection reports are going to look like. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">There\u2019s a million things you don\u2019t know. You can\u2019t know. And anxiety will always accompany that. And anxiety doesn\u2019t mean you\u2019re doing something wrong. It doesn\u2019t mean that you\u2019re making a mistake, right? Like life is not meant to be lived in a way that you\u2019re always avoiding anxiety, just like when your muscles hurt when you work out. It doesn\u2019t mean you did something wrong. It\u2019s supposed to be like that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Embracing the uncertainty will bring anxiety and anxiety is a part of it but it will go away the more I do it, is to me one of the biggest keys to living a successful life because you miss out on opportunities when you\u2019re afraid of anxiety and want to run away from it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I just think that Bill, you\u2019ve like taken that head on and you\u2019re running right at it and I have no doubt that anything in front of you is going to get knocked over because you\u2019re like an unstoppable force right now. You have a very fascinating story. Can you tell us where can people find out more about you? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, absolutely. They can find about me at my blog, WealthWellDone.com. So just think of wealth grilled like a steak and well done, so it\u2019s WealthWellDone.com. We publish weekly articles there about everything I learned when I was in prison and when I was out. I\u2019ll tell you what, if you want to learn more about my prison story, go ahead and subscribe to my e-mail list and you\u2019ll have all the interviews I do like this where I talk about everything I went through and how I got there. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Perfect. All right. Very cool, Bill. I really enjoyed having you on today. I guess we\u2019ll see you around the community.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Bill: <\/b>Yeah, see you around. Thanks, Brandon. Thanks, David. It\u2019s been a blast. I absolutely loved it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Thank you.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Well, that was incredible. I have not been this inspired in a long time. Bill\u2019s story was awesome. Let\u2019s see what Jake has to say. He\u2019s another awesome investor. Let\u2019s do it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right, Mr. Jake, Jacob, Josephat, Jake, right? We\u2019re going to go with Jake. Welcome to the show.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Jake is good. Jake is good.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right, welcome to the show. I want to get to know you a little bit more. I know you and I have kind of seen each other, talked to each other, social media wise, online, known each other a little while that way. But I\u2019ve never actually talked to you in real life here like this so this is going to be kind of fun to learn your story. Why don\u2019t we start at the very, very beginning? What did you do before real estate? What do you do now? And how did you get into real estate on your first deal?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>All good question. First of all, guys, thanks so much for having me on. I\u2019m really excited to be here. I think it\u2019s going to be really fun. Well, a little bit about me, I\u2019m a young professional obviously. I\u2019m 28 years old. And I work in engineering and I\u2019m a part-time real estate investor. But going back before that, like many of your audience members out there, many of the people listening to your podcast right now, I was kind of raised with this blueprint to go to school, get a good education, further that education, get into college, study something that challenges you and get a job.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I did all of these things and I found myself in corporate America working at an engineering firm and I realized this blueprint only gets you through about your mid-20s for most people. So here I am sitting in corporate America, kind of wondering what\u2019s next. I\u2019ve always had something to shoot for after this, get into college, get a good GPA, get a good job. And so here I am looking about like, in my life, like what\u2019s next? So what I\u2019m seeing is essentially retirement at age 65 and a half, if you\u2019re lucky, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So you know, it just didn\u2019t sit well with me. I knew there was something more out there, something that I wanted to do, and at the time, I was really involved and really interested in my own personal finance and kind of building a life I wanted. So I kind of started looking down this investing path and going down this path, I realized, there\u2019s kind of a fork in the road and on one side, you\u2019ve got like the more traditional sense, investing in stocks, bonds, mutual funds through your retirement accounts. Things like that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And that didn\u2019t excite me so much. And then on the other fork, there was the alternative asset classes including real estate investing. That just kind of rung true to me. There\u2019s a lot of stuff that drew to me, just like for the same reasons that many of the audience members out there, tangible asset. I understood it. I could see it. I could touch it. So that\u2019s just kind of where I found myself and I jumped into real estate investing and I\u2019ve been practicing it ever since. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Okay, so what would you say\u2014well, first of all, what kind of engineer are you? I\u2019m just curious.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, my background is in fire protection engineering. So a little bit niche and yeah.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s kind of cool. Is that like if somebody builds a house, they\u2019d call you and be like, hey, how did you put in the right staircase so it doesn\u2019t burn down? Is that a thing?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>That\u2019s part of it. I work in more of the industrial space so I work for oil and gas projects, for refineries, chemical plants, so yeah. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Trying to make sure people don\u2019t blow up themselves. That\u2019s kind of the goal. That\u2019s a cool job. Okay. So you thought real estate sounds better than like this other, you know, the other investments out there. Real estate sounds kind of cool. Did you have anybody in your life at that point? Were people telling you real estate? Did you read a book? What made you go, oh, real estate, that sounds cool.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>You know, it\u2019s kind of weird because no, the answer is no to all of that. I didn\u2019t have any previous experience in real estate. I didn\u2019t have any family member into it. I just kind of stumbled into it and I can remember sitting at my desk one day and somebody had mentioned, hey, you should check out some of these podcasts. And this was in 2014. I had never even heard of what a podcast was so I start looking at real estate investing podcasts, BiggerPockets being one of them, and I just stumbled in all of this information. I mean, there\u2019s like a treasure trove of information and knowledge out there\u2014<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>By the way, Jake, you just said that wrong. You said \u201cone of them\u201d\u2014BiggerPockets would be one of them\u2014you meant to say the best, most handsome, most professional\u2014<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Right. With this really cool host, Brandon Turner at the Times. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>So you\u2019re listening to the podcast, learning that way. And then what connects? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>So, I\u2019ve spent about six months kind of educating myself just diving into podcasts, forums, books, and then about six months in, I bought my very first investment property. And looking back, I probably did several things wrong but it turned out to be pretty good so it\u2019s a pretty fun story. I think it\u2019s one of the more interesting ones about myself because it wasn\u2019t so much impactful at the time but it got the ball rolling. I think that was a really important takeaway for the audience members listening to it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So this property was a $25,000 single-family house in my home market in Oklahoma so most people think $25,000 property\u2014does that even exist? Is it in a war zone? Is it a terrible condition? The answers are all no. It was a fairly normal single-family one-bedroom house. So that\u2019s how I got started.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>All right, so tell me a little bit about, Jake, why you chose that house and what got you moving in that direction?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, that\u2019s an interesting question and at the time, I wasn\u2019t sure that this investing thing was what I was going to do. This was kind of more like a test kind of proof-of-concept thing and the risk was so low that I thought, hey, at the end of the day, if it doesn\u2019t pan out very well, it\u2019s not going to cripple me financially. So, my mortgage on that property, yeah I do have a mortgage\u2014interesting fact about it, on a $25,000 property.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, I want to ask you about that next. But go ahead.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>My mortgage is $141 a month. So I mean, Brandon, I\u2019m sure your cell phone bill\u2019s more than $141 a month.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>My cell phone bill is $240. I don\u2019t know how two phones can be $247 but it is. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Especially because Brandon doesn\u2019t talk on his cell phone ever. He basically pays $250 for a texting device.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>It is so true. Anyway. You got, how much did you say?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>$141 is my mortgage.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Can I ask you real quick? A lot of people have a problem when they\u2019re trying to get loans on property and I heard it all the time. People are like, they can\u2019t find a bank that will go that low, like go under $100,000 or under $50,000 even. How did you find a bank that would even do that?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I didn\u2019t even know that was a problem at the time. I was so na\u00efve. I didn\u2019t know that you weren\u2019t supposed to be able to get loans for something that cheap. I went to a local lender in my market, a credit union. They obviously kept it in-house through a portfolio loan and they just lent on it and there was never any question like, it\u2019s a little bit below our limit. There was just\u2014I just didn\u2019t realize that there was supposed to be a hurdle. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What is a portfolio lender, for those who don\u2019t know? I don\u2019t know, David, were you going there, too? I saw David pointing at himself.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>So my understanding of a portfolio loan is a loan that the bank will lend to a borrower but they keep it on their own personal balance sheet rather than packaging it out and selling it to an investor. So they can be a little bit more lenient with the terms of the loan. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>So tell me, how do I find the portfolio lender that\u2019s willing to give me a mortgage where my payment\u2019s $140 a month? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Well, from my experience, you go to local banks, credit unions, local regional banks. Not the big branch that you see around. You don\u2019t go to a big bank. You go to a smaller bank, smaller credit unions I\u2019ve found are actually more competitive than ever banks. So that\u2019s been my experience.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Yeah, absolutely. I agree 100%. A lot of the time, when I was first trying to find portfolio loans, I was going to every big bank I could find. And then I found that going to smaller credit unions or savings and loans institutions, my odds of success were skyrocketing by like hundreds percent up just by going to those smaller banks. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Another thing that I\u2019ve found, just as a little add-on is if they\u2019re telling you no, you might be able to get a yes out of them if you deposit some money with their bank. If you can go in there and say I\u2019ve got $10,000, $20,000 or $30,000 to put on deposit, all of a sudden, that conversation changes a little bit to oh, Mr. Greene, tell me more about this. Maybe we can make something work out. So don\u2019t stop when you hear no. No doesn\u2019t mean no. No means not yet.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I love it. Yeah. Good points. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Hey Jake, can you walk us through the numbers a little bit? I know you said you bought it for $25,000 and you put how much down, did you say? And then kind of what are the expenses? What does the income look like on that?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, sure. So it\u2019s a traditional loan. It was an investment property so I put 20% down, or $5,000 down. So I bought this property when I was 24 or 25 years old. I was a recent college graduate. I didn\u2019t have a ton of money. I mean, I had a good job but it\u2019s not like I had a ton of cash to go deploy somewhere. So I\u2019m kind of bootstrapping things at this time. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I put $5,000 down, a few thousand dollars in closing costs, so I can get into this property for $7500 to $8000 kind of range. So my mortgage, we\u2019ve already covered, is $141. I\u2019m setting aside money for maintenance and capital expenditures, things like that. Things we\u2019re taught through BiggerPockets. And I rented it out for $475 a month. So I\u2019m cash flowing about $300 a month. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. That\u2019s cool. I like deals like that because they\u2019re so attainable to somebody getting started. You know, a lot of people think you have to have $20,000 or $30,000 or $50,000 to buy a deal. Granted, you must live or are investing in a lower-priced market so some people who are listening to this going, there\u2019s no way I could do that. I live in insert expensive crazy city here. Seattle, Portland, whatever. New York. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">If that\u2019s the case, do you have any advice for people, and I know you\u2019re still early on in your journey but for those people who are saying that, well I can\u2019t find that house right now. I\u2019m going to go shut off this podcast and go back to watching, I don\u2019t know, Dancing with the Stars. Any advice for those people?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Don\u2019t shut off the podcast. Continue listening. Yeah, I understand that a $25,000 house doesn\u2019t exist in every market and doesn\u2019t exist in most markets. But there are markets out there that make sense for you. So if you live in San Francisco or Seattle or New York, or one of these more expensive markets, there\u2019s a guy that wrote a book recently about investing out-of-state. It\u2019s a really good book. You should check it out. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But yeah, do that. Find a market that makes sense because location is the most important thing about real estate to begin with. Find a market that works for you, that you\u2019re comfortable with, that you\u2019re comfortable with the numbers, and yeah. I would say go there and follow the money. Follow where those numbers make sense. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, I like that a lot. Of course, the book, you can pick it up at BiggerPockets.com\/store. It\u2019s called <i>Long Distance Real Estate Investing<\/i> written by my buddy David Greene here. A fantastic book. Anyways, so let\u2019s walk through real quick, how did you\u2014did you say how you found that deal or am I just blanking and forgot what you said?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>No, I haven\u2019t mentioned it yet. I found this deal off market so it was just in my local neighborhood that I grew up in. I knew that it was for sale by the owner and I just approached this owner and made a deal. Yeah, there was all kinds of handshake stuff. Keep in mind, this was my first deal so I had no idea what was normal, what was regular. I was really na\u00efve at this point. I wasn\u2019t held back by what I knew, in other words.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, that\u2019s cool. And so did you like just contact the guy or what? Walk us through that story.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, I knew it was vacant and I knew nobody was living there through family friends. And yeah, I just approached this person and we made a deal and the numbers worked. What they were asking for it. I knew that I could make it work based on the calculators and the numbers I\u2019d learned so far. So yeah, just kind of off-market deal.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Awesome, love it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Let me just jump in here, Jake. How did you hear that they had this house they wanted to sell?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Well, it\u2019s a very small community. Obviously, this was a rural location, rural communities so pretty tight knit. My hometown actually has 2000 people in the town so it\u2019s kind of those everybody knows everybody type things. So it was just from local market knowledge, you could say.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>All right. Two things. One, I love that you said \u2018rural\u2019 because that used to be a thing on BiggerPockets, making fun of Brandon every time he tried to say rural. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Rural. Yeah, way old school. We are way past that joke now, thank you, David Greene.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I just wanted to bring it back. And maybe if we had Josh, I\u2019m sure he would appreciate it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I\u2019ve learned how to say \u2018rural\u2019.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Brandon was sent to speech therapy and he\u2019s been working on that ever since. But here\u2019s the second point that I wanted to make. I don\u2019t want to gloss over the fact that what you did\u2014you found several different things that would increase your odds of success, you added them altogether, and you ended up with the positive result you wanted. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So you knew you wanted to buy a house but you\u2019re only 24 or 25 years old and you don\u2019t feel comfortable taking a big risk so what you do is you go to a market where you can buy houses for $25,000. You get all the experience of getting into real estate investing but much less risk because you\u2019re playing in such a smaller field. Then you let everybody know in your community, I\u2019m buying houses. I want to know when somebody has a house to sell. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You\u2019re looking for off-market deals. You\u2019re not just waiting for someone to bring this deal to you, right? So someone finds a person who says they want to sell and it goes right to you before it hits the MLS, before a realtor gets involved, before another investor gets involved. You get involved and then they\u2019re also vouching for you saying hey, we know this guy. He\u2019s a good guy. He\u2019s going to close. Right? You\u2019re also working at a price point that isn\u2019t super risky for you. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You\u2019re not like well, let\u2019s go buy a $300,000 house. You\u2019re like no, I\u2019ll buy one for $25,000 and I\u2019ll go to the market where they have $25,000 houses to make sense. So it sounds like when you\u2019re talking, oh I\u2019ll just stumble into it but really, you did a lot of things right. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I tell people that if you\u2019re doing everything right, it\u2019s a matter of turning that crank up like a Jack-in-the-Box if you know\u2014you keep cranking it and it\u2019s going to pop and boom, you have your deal, you know? And I just love that you were intentional about going after what you wanted. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You didn\u2019t let all these reasons stop you. Like my market\u2019s too expensive, I\u2019m too young, I don\u2019t have money. I can\u2019t find any off-market deals, I don\u2019t have $10,000 for direct-mail. You just did what you could and you found it. Tell us a little bit about how you got your next deal. How did you take what you learned with that first one and then apply it to go get the next one? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, like you hear so many people say, once you get the first deal, the second one comes easier. You\u2019ve already got a little bit of a knowledge base to understand how things work so once again, off-market deal. At this point, I knew that backing up to this property, when I got that first rent check, it was like my proof of concept, my aha moment, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I thought okay, this thing really does work. Now I\u2019m confident to go out and do another deal. But I knew I wanted to grow. Another $25,000 house wasn\u2019t really going to move the needle for me. It wasn\u2019t going to change anything for me. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I really wanted to get into the small multi-family properties. So I started looking at duplexes, triplexes, fourplexes, that kind of thing. Well, I had some targeted markets that I wanted to invest in and I would join that Facebook Marketplace, like local Facebook pages. And I did this and I saw somebody advertise this duplex for sale. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And what this duplex was, it was recently inherited by three siblings like middle-aged people and they just wanted to get rid of it. They didn\u2019t want to rent it out. They didn\u2019t want to fix it up. And I saw this the very same hour they posted it, reached out to them, went over and met them, and made the deal on the spot and bought it. So this was a duplex and this was a $55,000 duplex. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Okay, that\u2019s awesome. So you saw that listing. Did you say Facebook? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>It was on Facebook. It was like a Facebook Marketplace kind of page.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, I\u2019ve got that in my notes here. That\u2019s good. I wanted to make sure we talked about that. So it was a Facebook page\u2014say that again?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, it was like one of these Oklahoma City Buy\/Sell\/Trade Facebook kind of page, you know, like all these little communities have them. So yeah, it was just one of those.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. I don\u2019t think we\u2019ve actually talked to anybody on the podcast who has found a deal that way. But that\u2019s super cool. There\u2019s so many ways to find deals out there. People are saying yeah, I can\u2019t find anything, I can\u2019t find anything. Well what are you doing to look for them? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I\u2019m working on a book right now for BiggerPockets that will be out later this fall, kind of like a beginner\u2019s guide to real estate. And in there, I have a chapter on 28 different ways to find real estate deals. Like completely unique ways and that one wasn\u2019t even there so now I want to ad that\u201429. It\u2019s just crazy. There\u2019s so many ways to find deals that people just don\u2019t do it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I just wanted to cover one more thing before we dive into specifics on that. I say this a lot lately about how the first deal people do\u2014like, that deal for $25,000 will not make you rich, right? We all agree. It\u2019s a decent deal. Fine. You get a few hundred dollars a month in cash flow. Great. What does that really do? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">What it does though is it gave you the confidence to do the second deal and that\u2019s the beautiful thing, right? Now the second deal gives you the confidence to do the third and the fifth and the hundredth and before you know it, you\u2019ll be financially free. But so many people just can\u2019t get off the couch to buy that first deal. So I love that you did that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, it was super important at the time and I kind of knew that going into it. I knew it wasn\u2019t going to make me rich. I knew it wasn\u2019t really going to make me move the needle. I mean, $300 a month or so in cash flow\u2014it\u2019s nice but it\u2019s really not going to change my lifestyle or allow me to retire at the age of 30 or something like that. But I knew it would get the ball rolling for me and sure enough, it did.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, it\u2019s like a train. You have to get the train moving, like my analogy, David? Look at that. I\u2019m an analogy king like you now. So you get the train moving and it\u2019s slow at first, right? But like, once you get it going, it just kind of goes and it kind of propels itself and that\u2019s how I\u2019ve always felt my real estate has been. It was really hard in the beginning. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So this is a message for everyone out there who is struggling right now with your real estate, if you\u2019re like, I\u2019m having a hard time getting that first deal or the second deal, this is so hard. I can\u2019t imagine doing this for the rest of my life. Just know that it does get easier. Like the train does start picking up momentum as long as you make it kind of a goal to like always be asking, how do I make this run more smoothly and more efficiently and how do I do a better job of this? You\u2019re going to find that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So tell us a little bit more about this duplex. I mean, did you rent out both sides, both halves then right away? Did you have to do any fixup on it or anything like that?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, like I mentioned, three siblings inherited it. They didn\u2019t want to do anything with it. They didn\u2019t even want to rent it out. So they really just wanted to get rid of it immediately. So I went and met them. I asked them a little bit about the property. We walked it. It was fully vacant so that\u2019s kind of scary, you know. You\u2019re going to take on an investment property but have to go out and get it rented. So that was a little bit of a risk. Something kind of set me off about it a little bit. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So they were asking $55,000 for it. And I knew that it had been rented in the past for $600 per unit and I thought, wow. With those numbers, I can\u2019t go wrong. So I just said sure, I\u2019ll buy it for $55,000. So I\u2019m only like a year into my investing journey at this point so I still don\u2019t know much. I\u2019m not like super experienced but I just knew it was a good deal at the time. So I pulled the trigger, wrote up a contract, and they accepted it and 30-45 days later, we closed, and it didn\u2019t need that much work. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">It was a little musty, needed some freshening up. Just did simple things like interior finishings, ceiling fans, hardware fixtures, interior, exterior paint just to increase that curb appeal and then advertised it, got it rented, and it\u2019s been rocking along ever since. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>There you go. That was awesome.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Tell me a little bit more about how you\u2019re taking that Facebook strategy that you used and give us some details about what you look for, how often you look, what you\u2019re targeting, kind of walk us through that so that other people can kind of copy that strategy in different markets. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Sure, so I kind of mentioned it earlier but the very most important thing I always looked for is location because you can change a lot of things about real estate. You can paint it, fix it up, you can change the floor plan, you can change the use even. But very rarely can you pick it up and move it somewhere. So I\u2019m really first off selecting certain markets that I want to invest in. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then after that, I\u2019m looking at cash flow because I\u2019m not doing this for my health. I\u2019m doing it to achieve financial freedom so the cash flow is pretty important to me. So I\u2019m looking at certain numbers. Like, I want to achieve $300 in cash flow per door. So if I buy a duplex, I want it to cash flow $600. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And a good rule of thumb I\u2019ve been finding in my market to do that is everyone knows the 1% Rule. 1% rent to value ratio. I\u2019ve kind of found that it\u2019s easy to achieve 1.5% in my market. So if I can look at something really quickly and identify that it achieves 1.5% rent to value ratio, I know that it\u2019s probably going to work for those criteria that I have set. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s perfect. And I love that you\u2019ve set this criteria for yourself. This is something I think is so important. Investors, especially if you\u2019re newer, but everybody needs to set\u2014what is your metric? What is your criteria you\u2019re going to examine a deal being good or not? Like if you don\u2019t have that defined, you\u2019ll just either buy whatever comes your way or you won\u2019t buy anything. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I find that once you have a benchmark\u2014for me, it\u2019s like $100 per month per unit on a multi-family property is what I\u2019ll go and jump. So 20 units, and that\u2019s after like I\u2019m super conservative on my repairs and cap ex and all that. So after everything\u2019s said and done, including property management, I want $100 bucks. And I just know, that\u2019s my metric. So if it passes, great. I\u2019ll move on. If it doesn\u2019t, I won\u2019t. It takes the emotion out of it. So I love that you\u2019ve got that as well.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So can we move on? What else do you look for now in properties? If you\u2019re looking for location, anything else? What are you buying? What are you looking for? Multi or single? Let us know more. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, so in terms of physical assets what I\u2019m looking for, I don\u2019t want anything with like an obsolete floor plan. I want something that\u2019s going to be easy to rent because I understand that my highest risk is vacancy and I don\u2019t want to have to struggle to get it rented. So I want to buy something that\u2019s certainly desirable. In terms of what I\u2019m looking at these days now, obviously I wanted to transition into small multi-families as quick as possible from that initial single-family purchase. And I want to scale even larger from here. So I want to get into larger multi-families and I want to grow a sizeable portfolio. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I\u2019ve got some pretty lofty goals. I really want to be financially free by the time I\u2019m 30 years old, which is in two years and some change from today. So yeah, I really want to scale and grow this portfolio to quite sizeable.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s cool, you mentioned that. And I love that. And you mentioned a phrase, I wrote it down here\u2014and I want to cover it. \u201cHighest risk is vacancy\u201d. I think that\u2019s like\u2014a lot of people don\u2019t look at vacancy as that big of a deal. A lot of people don\u2019t even calculate it in their numbers, but like vacancy is probably the number one greatest expense when your unit is vacant, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I mean, it\u2019s a huge bleeding wound on your investment portfolio. And so many people are really\u2014I don\u2019t know. They just like ignore that metric but it\u2019ll kill your cash flow. I mean, you can probably have this cash flow amazing, 11 months out of the year and you go vacant one month and there goes your entire year of cash flow. If that happens every single year, you don\u2019t have an investment, you have a job that you just bought yourself that doesn\u2019t make any money. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Yeah, so I love that you said that you look at your vacancy and you want to find things that are going to rent that are going to be easier to rent. And that is so, so important. So I just wanted to point that out. If you guys are listening to this, and you have rental properties or are getting into it, don\u2019t underestimate the value of learning how to rent out your unit fast. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Just this morning, I was looking at the numbers of my 24-unit over in Ohio and I\u2019m pulling up the metrics the property manager sent over and there\u2019s three or four vacancies, out of 24 units, and I\u2019m like, ahh. I\u2019ve got to deal with this because this is killing my cash flow. That\u2019s over $2000 this month I lost out of my pocket, gone. I\u2019ll never see that again because they didn\u2019t get the unit rented. And there\u2019s four of them. Anyways. So yeah. Vacancy.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I\u2019ll go one further on that, Brandon. I\u2019ll say real estate investing as a whole, your biggest threat is going to be vacancy. When I look at just investing in real estate versus investing in stocks or businesses or anything else, you almost can\u2019t miss with real estate as long as you have enough of a reserve to weather a storm unless you can\u2019t find someone to rent out your place. That is like the one Achilles heel in this entire thing that your whole business is dependent on. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">As long as you have a tenant and you\u2019re cash flowing positive, anything that comes up, the rent can cover your expenses. You might make less profit but you\u2019ll keep your unit. If you buy a multi-family or a single-family in an area where people are leaving or jobs are leaving like in Detroit, something like that, there is nothing you can do to turn that around and you can find a way to save it. Like if there\u2019s no one to rent your place, that\u2019s the only way you generate income with this investment vehicle at all. It\u2019s not like you\u2019re a business and well, people aren\u2019t buying shoes so let\u2019s go sell shirts. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All you can do is rent this place out so vacancy is something that I take very seriously when you\u2019re deciding where you want to invest or why you want to be investing there. It hurts you in the short-term when you have it and it can destroy you in the long-term if you just can\u2019t find people to rent out your unit. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And so, when I listen to people say like, David, what about this or what about that, I\u2019m afraid about real estate investing\u2014what happens if a toilet breaks and all the things that people worry about. None of those are legit concerns, right? What you need to be worried about is what if there\u2019s no one available to rent my house? That is like the only thing that I need to make sure I get right. And if you\u2019re okay on that, everything else will work itself out. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, definitely so. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>So tell us, what else have you done before moving onto the <i>Famous Four<\/i>? What else have you done since this? You have the single-family and you have the duplex. Anything else in there as well?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah, so I try to look at my investing journey as like a holistic thing and with an engineering background, I realized that I was pretty good with the numbers. I spent a lot of time in BiggerPockets in the forums picking up stuff, practicing on the calculators, so I felt pretty comfortable with the numbers. But I realized that I wasn\u2019t getting ahead as quickly as I wanted to because I didn\u2019t build those relationships. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I didn\u2019t have a team in place. I was kind of working with my nose down. And so once I started opening up my eyes to building a team and developing relationships and networking with other people and finding people who are doing what I wanted to do and are where I wanted to be in a few years, I really felt like that really kind of sped up my process in the whole real estate investing game. So yeah, there was that and yeah, it\u2019s just kind of one unique thing about that is I have since launched a podcast to help grow that network. So that\u2019s been a really big, helpful thing, too. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, that\u2019s a really good way. Just interviewing other people, talking to the people, whether it\u2019s on a podcast or whether it\u2019s out at coffee or at a local networking event, just connecting with other people. It\u2019s just so important in growing it. So anyways, so total units now. What are you up to, then? Is it just the three or do you have more than that?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I have eight total units now.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Oh wow, eight. So what else do you have? The single-family, the duplex, what else?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I have a single-family, two duplexes, and a triplex.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>And I started two and a half years ago.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That is fantastic. So for the people listening again, like two and a half years ago, and you\u2019re up to eight units. Like those eight now\u2014you start with that single-family, it gives you the confidence to move into the next. It gives you confidence for the next. Pretty soon, you\u2019ll be buying bigger. I mean, if you want to anyway, buying bigger and bigger deals because the bigger you get, it actually tends to get easier. At least that\u2019s what I\u2019ve found. Have you found that similar?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yeah definitely still. Once you get that ball rolling, it\u2019s almost hard to stop it. You have to do some work to not buy a build, almost. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I know exactly what you mean. Yeah. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>It\u2019s like a train, right, Brandon?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>It\u2019s like a train.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>It\u2019s hard to get that train moving but once it\u2019s going, it\u2019s hard to stop it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, as long as you keep that crank turning on the Jack-in-the-Box, look at that. Right. All right, so moving on, let\u2019s head over to the world famous <i>Famous Four<\/i>.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">What real estate books have you read or do you enjoy? What\u2019s your favorite real estate related book?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>You know, there\u2019s so many but I have to say it\u2019s probably <i>Th Advanced Guide to Real Estate Investing <\/i>by Ken McElroy. It\u2019s in the <i>Rich Dad Series<\/i>. It\u2019s a really good book and it covers a lot of topics. I\u2019d say that would probably be my number one real estate book.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Fantastic book. Love that. All right, number two.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Brandon loves that guy. Every time McElroy\u2019s name comes up, his eyes light up. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>He\u2019s killing it, yeah.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>We should get him back on the podcast. It\u2019s been like four years since we\u2019ve had him on. We\u2019ll have to reach out. Ken, if you\u2019re listening, come back on the show. I want to talk to you. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right, moving on, number two. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Favorite business book. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I have two favorite business books. <i>How to Win Friends and Influence People <\/i>by Bill Carnegie and <i>The Miracle Morning <\/i>by Hal Elrod. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Nice. Good choices. And I believe\u2014maybe we shouldn\u2019t announce this. Oh well, we will anyways. I believe Hal is coming back on the podcast here shortly, whether it\u2019s because or after this interview comes out, I believe it\u2019s happening soon if it hasn\u2019t already. So listen for that.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Awesome.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>He\u2019s confirmed it. We\u2019re going to be getting together. Hal is an awesome guy. If you guys haven\u2019t looked him up, look him up, read his story. Learn a little bit about what Hal did. He ended up writing the endorsement for my book that\u2019s on the cover, just a super inspirational guy, very very smart. He\u2019s very big into teaching people how to be successful and as you can see, it\u2019s working for Jake because he\u2019s got eight units in like two years. He can give Hal Elrod some of the credit and BiggerPockets the rest.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Definitely. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>There you go.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Tell us about some of your hobbies.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I love to kayak fish when I get the chance, when I\u2019m not building my real estate empire, I love to be out on the water and fish. So I live in Houston and I\u2019ve got the opportunity to do both saltwater and freshwater fishing. And lots of warm weather. So that\u2019s what I like to do in my free time.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Nice. So wait, we never really covered this earlier but you live in Houston but you were buying in\u2014where were you buying?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>I\u2019m buying predominantly in Oklahoma, so out of state.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>We never even talked about that. That\u2019s actually a really interesting plan as well. Even though you live in a market\u2014Houston\u2019s not expensive but it\u2019s not cheap either. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Sure.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Depending on the area, I guess. But yeah, my sister lives there. She just bought a really nice house and it was not cheap. So anyways. Yeah, cool. All right, well next time I\u2019m visiting my sister down in Houston, we\u2019ll have to go get some coffee or something. All right.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Jake, what do you believe sets apart successful real estate investors from those who give up, fail, or never get started?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>So good. And for me, it comes down to your reasons why. If you don\u2019t have strong reasons why, you\u2019re probably never going to get started in the first place and if you do get started and you don\u2019t have strong reasons why, you know, real estate investing\u2019s full of ups and downs. You get told no a lot. You get a lot of rejection so you if you don\u2019t have strong enough reasons why, you\u2019re probably going to fail, quit, never even get started.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So what I mean by your reasons why are understanding what drives you, what motivates you, why you\u2019re doing what you\u2019re doing. You\u2019re not just going to haphazardly build a real estate empire. You\u2019re not going to haphazardly fall into extreme levels of success. So you have to have something that\u2019s driving you, something that\u2019s motivating you to get out of bed every day and chase that success. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What drives you?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Oh man, a lot of things. First and foremost, financial freedom but that\u2019s very nearsighted. I think that you have to have bigger goals than financial freedom for yourself because most people are comfortable in their financial lifestyle. They\u2019ve got enough to get by and if that\u2019s all you need, then why even get started? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I think you have to have something, a reason bigger than yourself. I don\u2019t really know why I don\u2019t have any kind of batting mound to it but I\u2019ve always kind of had a soft spot in my heart for kids in poverty. So you know I\u2019ve always wanted to write a big check to a school one day. I\u2019ve always wanted to give back to children so I don\u2019t know why. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I don\u2019t know what motivates me to do that but it\u2019s just always been something I\u2019ve wanted to do so you know when you can kind of identify with a reason that\u2019s much bigger than yourself, like oh I want a nice car or I want a bigger house, then you kind of got some responsibility from others riding on your shoulders. So those are some things that drive me and motivate me. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Super cool.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>You also mentioned you want to be retired by age 30, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Yes, financially free or i.e. retired by age 30. So I\u2019m guessing exponential growth to hit that but it\u2019s looking well and I\u2019m excited. I don\u2019t have any illusion that when I hit 30, I\u2019m going to kick my feet up and start drinking mojitos on the beach in Cancun. But I\u2019m still going to hustle and build stuff and grow my business and help other people but I just want to be able to replace my earned income with passive income by the time I\u2019m 30.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Perfect.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s a pretty good reason why. That\u2019s why I\u2019m here.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>You\u2019re 28 now, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>28.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right. Looking forward to it. Let\u2019s have you back on here in two years when you hit that number. That\u2019s your motivation right now.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>There it is.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Well Jake, thanks so much for joining us today. That was a lot of fun. And where can people find out more\u2014I took your line, David. Sorry. Where can people find out more about you?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Sure, so I host a real estate investing podcast called <i>The Real Estate Way to Wealth and Freedom<\/i>. You can find it anywhere you can find podcasts and if you want to connect with me or learn more about me, you can visit <a href=\"http:\/\/www.jacobayers.com\" target=\"_blank\" rel=\"noopener\"><span class=\"s3\">www.jacobayers.com<\/span><\/a>. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Perfect. Ayers.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Jake: <\/b>Ayers.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right, perfect. Thanks, Jake. We\u2019ll see you around the site.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right, super cool. Yeah you know, what I like about Jake\u2019s story there is that a lot of people think that their first deal, you have to find it on an MLS. You have to use a real estate agent. But I love that he just was like nah, I\u2019m going to find a different way to do it. I\u2019m going to use networking and connections and Facebook groups, right? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I love that he looked outside the box and went and found two good deals. Like, he talked about he\u2019s getting that train moving, so to speak, right? Yeah, super cool. All right, before you guys get tired of hearing me and David talk to each other, or me just babble on, let\u2019s get to third interview today with David Pere. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">All right, Mr. David Pere. What\u2019s up, dude? How are you doing? Welcome to the show.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Living the dream. Thanks for having me.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, so you and I go way back along with David Greene here. And like way back, I don\u2019t know, like a year or so. You are living in the great state, my favorite state of Hawaii. Tell us about that. Why are you in Hawaii and then when did you get into real estate?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>All right. So I am an active duty Marine. I\u2019ve been in the Marine Corp for just shy of ten years and they decided to send me to Hawaii for three years so I got to get paid to live on one of the nicest bases in the world and spend some time on a beach that\u2019s basically a private community. Not a bad gig.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, it\u2019s pretty awesome. So the first time I met David was like a year ago, right? We connected when I was in Hawaii the first time. We did, right? And we went surfing. We\u2019ve gone out actually a few times now that David\u2019s actually a good surfer, as way as just a super genuinely good guy. So I was super excited to get you onto the show. And a super good investor. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Even though you\u2019re just ramping up your investments while working a full-time job while living across the seas. So that\u2019s why we\u2019re excited to talk to you today to kind of help other people who are just getting started figuring out how to get their journey on. So without further ado, let\u2019s jump into it. So tell us about your very, very first real estate investment. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Okay, so first real estate investment, I was a recruiter living in a little town of Springfield, Missouri and I can\u2019t even remember who it was. Somebody told me to read the book <i>Rich Dad, Poor Dad<\/i>. That starts everything for everyone. And I told them, I don\u2019t have time to read so they told me to download Audible because I spend a lot of time driving. As a recruiter, you\u2019re driving to high schools all over the place. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And so I did and I listened to it and I want to say it was less than two months from when I finished the book to when I closed my first property. I just basically took away from the book how can I take action? I figured I would learn the hard way, if anything. So I was paying about $485 a month to live in a two bed, one bath apartment. And I used an FHA loan, 3.5% down to do a house-hack on a duplex. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I paid, after some negotiation, $81,000. So about $2800-$2900 out of pocket. And I had the one side rented for $515 and the mortgage was $615. So I went from paying $485 a month living in an apartment to, I think my total expenses were like $200 a month to own a two-bedroom duplex and have a shed and a porch and be able to tell my neighbors to be quiet because I own the place. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. Super cool. So you house-hacked your very first one. You bought a duplex. Again like, we talk a lot about that on the show because house-hacking, I think, is one of the best ways to get started. Not everyone has to do it but man, if you can live for cheaper or even potentially for free and learn how to be a landlord, learn how this whole real estate thing works, it\u2019s just awesome. Okay, so you bought a house-hack, you lived in that while in the military and doing the recruiter thing. What happened next? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Well, I got married so I moved out of the duplex into my wife\u2019s house, which funny enough she didn\u2019t have any idea she was doing this, but she did a BRRRR. So she bought a house that somebody actually OD\u2019d in that was across the street from her dad and she got it for pennies on the dollar, rehabbed it with family and stuff like that, and so we moved in there. And since then, we\u2019ve done a HELOC refinance and stuff like that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And overtime, we did a BRRRR strategy with it, I guess. Lived there for a little bit and then it was like two months and off to Hawaii. And then from Hawaii, the next deal we did was actually the five acres next door to that house. The neighbors decided to move out of state so we figured we wanted to five acres. It was originally less of an investment and more of a we want to own the five acres so we don\u2019t get someone who builds a big house and ruins our view. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But we turned it into an investment because we took out an agricultural loan on it. Her dad\u2019s a cattle farmer. We have a little bit of cattle and we actually moved cows onto the five acres and we were going to do an annual payment but we ended up doing a semi-annual. But nonetheless every year, we sell the cows and it pays off our entire year\u2019s mortgage and some pocket change. So I joke, and I know I joke with you about the fact that we cattle financed our land. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s super cool. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Dave, I need you to unpack some of this. You just used three acronyms. BRRRR, OD, and HELOC. Can you describe all three of these acronyms for me so our listeners know what we\u2019re talking about?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Absolutely. I will revert to non-acronym usage as much as possible. So the BRRRR is the Buy, Rehab, Refinance, Repeat. Or in this case, instead of the Refinance, we did the HELOC. So we bought it, we rehabbed it, we rented it out, and then we did a HELOC instead of the refinance. So that HELOC\u2014it\u2019s actually, we\u2019ll talk about my 10-unit in a little bit but that HELOC is actually what paid for the down payment I had on that 10-unit. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So the HELOC is a Home Equity Line of Credit. So we bought the house for\u2014I think she bought it for $55,000 and then spent like $40,000 renovating it and then she owed $91,000 on it. We got it appraised for like $160,000. So the Home Equity Line of Credit allowed us to pull 70% of the value of the house out. It\u2019s basically a checking account. I can write a check for it and then I pay it down with 3.4% interest. So we got $72,000 worth of money that we didn\u2019t touch. So that\u2019s actually more than what she bought the house for. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So we didn\u2019t have to do anything for that money and it\u2019s the cheapest money I\u2019ve ever had. And anytime I want to buy something with it, I just write a check, which I had to remember how to do because we don\u2019t do that anymore. I write a check and put it in the mail and I pay my super, super low interest and I\u2019m not even amortized, so it\u2019s like the cheapest money you could ever get to buy a property. And then the final one, OD was overdose. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Overdose. I thought it was like overwhelmingly good deal or something like that.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Yeah, no. It was definitely more like silhouette of a guy who almost died after that. So nobody wanted to buy it so she got it super cheap. He didn\u2019t die but he definitely didn\u2019t feel like living there anymore. So I guess that\u2019s kind of like a taboo area. Like probate. Nobody wants to buy a house that someone died in, but definitely. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>If it was like, guy comes up with an ax and took off his two heads, I would not want to buy. But like somebody overdosed in a house or they just died or passed away or whatever, I\u2019m personally okay with that kind of thing. I don\u2019t know. What about you, David? Agreed?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Let me ask you. Did you have to disclose that to the tenant? Did you look up laws about when someone passes away in that area, how long because you have to let someone know that somebody died here?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>He didn\u2019t actually die so we did not have to disclose it. But I want to say, in the state of Missouri, I would have to double check on that but I don\u2019t know the distance. I know you do have to disclose for at least a certain amount of time. It\u2019s probably some generic five-year mark, but I would have to look that up. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Yeah, so that\u2019s good to know because I mean, you found a deal. You found it in the form of distress and in the form of a drug overdose, which is a unique way, but I like it. And you get yourself a deal there. But you do need to be aware when you\u2019re getting a deal, you have to disclose certain things to your tenants or if you\u2019re planning on flipping the property to the buyers of the property.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Brandon and I talked about this a lot where if you get a really good deal on your first deal or your second or your third, it will pay for your next deal, and that\u2019s exactly what you did. You took out equity from this house and basically gave yourself the cheapest loan that I know of in real estate, other than like saving up all your birthday money, if that counts. And bought another house with it, right?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And if you do that right and you steamroll it, you get a really good deal. You\u2019re going to have equity in that deal. You can either refinance it, take out a HELOC, sell it, whatever we\u2019re going to do. Roll that money into your next deal. So you really only have to work really hard to get that first deal. Tell us a little bit about what you did to target in on that deal specifically\u2014how you found it, and why you pursued it?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Do you want the duplex or the single-family?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>The one that you take out the HELOC on. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Gotcha. So that was actually a referral from church. So it was just the neighborhood knew that had happened and then it was basically a hey, let\u2019s contact them and see if they want to come back to the house or if they plan no selling it. And it was as simple as that.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>So this was you telling people hey, this is what I\u2019m looking for, do you know of anybody who\u2019s in this situation and like the universe just brought it back to you when somebody found someone. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Well, this is actually the one that my wife did before we got married. And she was actually the one. It was like her and her dad found it and since it\u2019s in the neighborhood, her dad was like, you should buy that because we can help you fix it up and then you can\u2019t live near us. And so, I don\u2019t even know that she was necessarily telling people she was looking so much as it just kind of came up and now they\u2019re smart enough to say that\u2019s a really good deal. We\u2019re going to jump on it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then from there, after the Refi, or after the rehab, that\u2019s when we stepped in and said instead of just selling this when we move, how about we rent it out and profit, we can take out a Home Equity Line of Credit and that will be the jumping off point for the rest of our investing.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>What\u2019s cool about Home Equity Lines of Credit, is that like typically, you can get up to 90%. Back in the day, they\u2019d go back for 120% which is crazy but you know, typically you go up to 90% today. I see that quite often. At super low rates. And then you only pay\u2014you mentioned this earlier but I want to just reiterate\u2014you only pay on it when you\u2019re using it. So it\u2019s kind of like a gigantic credit card in that way. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And that might scare people but it\u2019s just like a gigantic amount of money you have sitting there depends on how much equity you have obviously. And then when you\u2019re ready, you just use it and then you start paying on it and when you do pay on it, it\u2019s super, super low. So I financed a number of deals that way over the years because equity\u2014in fact, I have a triplex and I did this about six years ago. I didn\u2019t know how to fund it, didn\u2019t have a job, didn\u2019t have a W-2 income, couldn\u2019t get a loan. But the deal was fantastic so I contacted a friend of mine who I knew wanted to do real estate. I was like, I\u2019m looking at this deal. I\u2019m looking for partners. Do you know anybody who was interested in? Of course, I knew he would be interested. So he was like, I\u2019m interested. But he\u2019s like I don\u2019t have any money. And I\u2019m like, okay, well do you have a Home Equity Line of Credit? He\u2019s like of course, my house is paid off. We just have a line of credit sitting there for like $100,000. I was like, oh, you could use that. He\u2019s like yeah, you\u2019re right. So we bought the deal together for technically no money down so we used his line of credit and then we as part of the cash flow from the property just paid his line of credit, which was like a couple of hundred bucks a month, maybe not even that. But I know it was like $50 a month. It was tiny.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Anyway, so Home Equity Lines of Credit, I don\u2019t think people look at them enough if people are really, really powerful tool. So how did you\u2014you mentioned it a little bit ago. You said there was a 10-plex. So you just used the Home Equity Line of Credit for ten plus. You tell us, what was that, sir? How do you have that going there? You\u2019re living in Hawaii at that point. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Yeah, absolutely. So I would say \u2018creativity\u2019 would be the word that I used for this duplex. Or the 10-plex. So I was going home for Christmas and we decided that hey, I\u2019m going home for Christmas. Let\u2019s turn it into a business trip and look for some properties. And so what I did was I went on List Source and I got a list of a specific zip code that I knew I wanted to invest in, of absentee homeowners. People who own the property but don\u2019t live in it. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Typically investors or someone who inherited the property. I find they\u2019re more likely to be willing to negotiate a sale. So I sent a list out to I think it\u2019s like 80 people. I\u2019ve got a bunch of different callbacks but there was one guy who called me back and said, I do have a duplex. I\u2019m not going to sell it to you. But I have a 10-unit. Would you be interested in looking at that?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I said, if we\u2019re going to be home on vacation anyway, I might as well look at the 10-unit and that\u2019s exactly what we did. We walked through and truth be told, I looked at two of the 10 units and the laundry room and the parking lot. I was there for maybe 25 minutes and I was like, hmm, the numbers do not seem to make sense. I\u2019m going to get this realtor and my property manager, can walk through this in more detail. But first I\u2019m going to get it in contract.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So we made an offer. The seller wanted to sell it for $250,000. And we walked through, we ran some numbers, and honestly, $250,000 probably wouldn\u2019t have been a terrible deal for it. The gross rent is like $4100 at the time. So if you use the 1% Rule, that\u2019s well over so it should have more like $410,000. It doesn\u2019t really work that way in Springfield but we negotiated down. We got $225,000 as the contract price. And then as we were doing our due diligence, which keep in mind, I only looked at two units. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I had my property manager walk through with the inspector and so I had property manager and inspector walk through together and they gave me their feedback and again, still could have probably bought it for that price. But there was about $8,000 worth of stuff that needed to be done with it and I had just finished reading the book <i>Never Split the Difference <\/i>so I decided, I\u2019m going to try some of these negotiation tactics and see if they work. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And without getting into that, we turned the $8,000 that I was going to request in repairs into $12500 that I got kicked back and they just kind of did a weird deal where instead of giving me the $12500 at closing, they just took it off the sale price. So instead of $225,000, we closed at $212,500 but the bank had already approved the loan and the seller had already committed on the seller financing. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So what that did for me was my down payment on the property went from $25,000 to $10,900. So yeah, if you factor everything in, I paid like 5.05% down on a 10-unit apartment with a commercial loan, seller financing, and that was out of the HELOC. So realistically, my bank account didn\u2019t see a dent and we walked away with a property that cash flows like $1,000 a month or $1200 a month. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. Yeah, there\u2019s a lot in there that I want to unpack. Essentially, you used creativity. You used a combination of different creative methods to get this thing down. So first of all, you negotiated a credit for the discount, the bank, a little bit of seller financing in there, and the bank approved a little bit. They were okay with you not putting a full 20% down because of how it all worked out, which is great. I\u2019m assuming this is like a small, local community bank there or was it one of the big national banks? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Absolutely. So I was actually working with a larger bank and they just took forever to get me answers on anything and the one I did get an answer, it wasn\u2019t ever really what I wanted to hear or the full answer. And so while I was working with them, and I had been working with them for the whole due diligence process. It had probably been like 20-30 days at this point. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I called the local bank, another local bank that somebody recommended and they had me approved for the loan in like four days. It was a better rate. It was 85% of the purchase price rather than 80, and the seller covered the other 10. So yeah, it worked out great. Honestly, that\u2019s like what David talks about\u2014that\u2019s a huge just shout-out to referrals because literally somebody I knew said, hey this guy is great, why don\u2019t you call him? And I called him and that was the best decision I had ever made? I\u2019ll probably use him for everything. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s super cool. All right, so yeah, you put together the 10-plex and while you\u2019re in Hawaii\u2014you did all of this from Hawaii, essentially, right? I know that because we were sitting out there on the waves talking about this deal and waiting for this next wave to come. And it was awesome. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Wait a minute, how did you buy a property in Missouri when you\u2019re in Hawaii. Shouldn\u2019t you have to only buy property in Hawaii if that\u2019s where you live? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Is this where I think I\u2019m supposed to give you a plug here. There\u2019s this book by this guy. No, so realistically, the way you do it is with your team. If you have a good agent, you have a good property manager, which I have a phenomenal property manager. I could tell you all kinds of stories about times where I thought I had an issue and I\u2019d call her\u2014in fact, last week, I got a letter saying that there was trash outside my apartment and I called her. And she was like, oh yeah, we took care of that three days ago, we just didn\u2019t call you because it wasn\u2019t too much money. Perfect. I don\u2019t even get bothered. It\u2019s great.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So realtor, property manager, insurance agent, lawyer. Whoever your team is, but realistically, I trust all of them and I can make a phone call and have my realtor, my agent, my inspector, walk through the property and call them and say yes or no. I have a couple of buddies that do some contract work that can do bids and so being able to have people in place that you trust, allows me to, I can MLS surf, I can send out letters, it really doesn\u2019t matter. I am fully comfortable trusting them. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The other thing is that I won\u2019t look at a property until the numbers make sense. So I won\u2019t send my agents out somewhere unless I\u2019ve already run the three super basic things that I\u2019ll run numbers on. And if it doesn\u2019t meet those criteria, I won\u2019t waste their time and then I won\u2019t have to worry about it being a total\u2014unless the place is just totally falling apart, I know it\u2019s going to be an okay deal. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>There you go. I like it. All right, so kind of what comes next for you then? What do you see down the road in terms of your investing? How far do you want to get? Do you want to stay in the military working fulltime long-term or what\u2019s kind of the plan?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Okay, so there\u2019s a whole lot of stuff, I guess, involved in answering that question. So I\u2019ll try to make it as short as possible. So military, most likely going to stay til retirement. I almost didn\u2019t this year around but I realized that the reasons I\u2019m staying in the Marine Corps are for things that I won\u2019t be able to get most jobs elsewhere.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So like, the adventure, the thrill of travel, the people I work with and just the culture that is the Marine Corps, right? It\u2019s not got anything to do with the paycheck or the job. I mean, I can make that money maybe not anywhere but I could find a place in Missouri where I could live cheap enough that I wouldn\u2019t even need to make that kind of money. It\u2019s just, I love what I do.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The investing side of things, we actually close in nine days on a flip out here in Hawaii. I did like a wholesale. I found a property that nobody seemed to be buying fast enough and I sent it to a mutual friend of ours, Cory, and he was all about it. So we decided that we were going to go ahead and close on it and I actually pulled on it, basically pulling my HELOC. I\u2019m playing the bank, I guess. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I\u2019m taking my 3.5% interest HELOC loan and I\u2019m going to throw it into the property with him and I\u2019ll earn 12% interest plus a kickback when the property sells as being his partner plus like a wholesale fee and so we\u2019ll partner up on that and I\u2019ll end up bringing in some interest on the HELOC. So that\u2019s the next deal long-term. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Long-term, more buy-and-hold stuff in Springfield. The goal is when I retire from the military after 20 years, so like 38-40 years old, the goal is to not ever have to work again unless I want to. There\u2019s also some other stuff in play, so I started a blog somewhat recently. It\u2019s kind of your doing and that was really just, I kind of realized when I get out of the Marine Corps, I\u2019m going to want I guess, purpose is the word. I\u2019m going to want something that I have to wake up and do and I felt like a community where I could talk about things that have benefited me, the things that I wish I had learned at a younger age would be the way to do that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So we\u2019ve got that and the other, I guess thing, that I\u2019ve got going on is the other guy\u2019s idea, which is that I\u2019m currently sitting in a classroom. My real estate license to sit on the side, and I figured I\u2019m already in the real estate community. I already know people in the area. I might as well make a little money on the side by selling houses as well as just buying houses. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Super cool. There\u2019s so much in there that we don\u2019t have time to dive really deep but a couple of things I want to point out. First of all, I love that you\u2019re getting your license. I think that\u2019s super smart, especially when you live in an area that\u2019s like really expensive because if you can sell one or two houses a year, it will pay for your license many times over. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Whereas like you live in Detroit, and you have a license, you might make $1000 on a sale, it might not be worth having it unless you\u2019re going to do volume, right? So I think that\u2019s super cool. Also, you mentioned this flip that you\u2019re doing. The kind of back story, because I got to see the backstory. You sent that deal over to me once. You\u2019re like hey, nobody\u2019s buying this. I think it\u2019s a good deal. I looked over and this does look like a good deal but I don\u2019t have a wise market at all. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I passed on it, simply because I don\u2019t know the market, so you brought it to Cory. We\u2019re going to get Cory on the show at some point, too, because he\u2019s legit a super cool investor, dominated in Hawaii. And doing some amazing flips out there. But what I think is so neat is that you went out there and hustled and found a deal. Then you used that as like collateral to build a relationship with an experienced flipper that you can now learn from. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So you built a relationship, you brought value to me. I wasn\u2019t just showing up and being like, hey, will you teach me everything you know for free and waste all your time with me? It was like, hey, here is a really good deal. I think you should pursue this and then hey, do you mind if I like work with you on it somehow? I can provide\u2014I can bring some money or I can bring some labor or materials, you know, whatever a person can do to bring value, you did that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So you brought this guy massive value and now you brought me the deal, you\u2019re going to see everything on how this is done and that is going to be worth more than any flip would ever pay, in terms of profit. You\u2019ll get so much more value. So anyway, very very cool. And then the last thing I want to bring up is you also started a local Meetup while I was out there in Hawaii. Tell us about that. Why did you do that and how does that work? Not even a lot of people would benefit from running Meetups like you do. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Okay so, Brandon talks about like in all of his videos that if you go onto BiggerPockets.com\/events, you\u2019ll find events in your local area. And then he always says, if you can\u2019t find an event, go make one. Well, I realized that in Oahu, which for those of you who aren\u2019t familiar with the island, I live on this side and like the whole rest of the world lives on this side. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And it\u2019s not a big island but with traffic, it takes a little bit to drive across and most of the Meetups were during the week at like 6:00 o\u2019clock. I don\u2019t get off work in time to drive over there, just if I hang out for two hours, drive back, and not see the family.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So I decided there\u2019s not one over here. Let\u2019s make there be one over here. And so I posted it on BiggerPockets event and my little Facebook group and I said hey, we\u2019re going to do this Meetup, it\u2019s going to be at this awesome place called Graves and Growlers where you can drink adult beverage if you would like, and I\u2019m going to buy pizza and bring pizza, so if you want to have pizza, have an adult beverage or not have an adult beverage and talk about real estate with other people. Come hang out and have some pizza. And we had like 11 people on the first month. You were one of those. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I was. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Yep, and then we had the second month, I showed up and there were only a couple of people in the place and people just started showing up and all of a sudden, we realized, oh man, this venue is no longer going to work. We can\u2019t fit. We had like 22 to 25. I don\u2019t know, I couldn\u2019t keep track because we were seated all over the place because there wasn\u2019t enough room for us to sit together. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So this next month, in two weeks, we\u2019re going to meet at a church. One of the guys who was at the event volunteers with the church and they let him use the cafeteria so we\u2019re going to pull some tables together, hang out there. We won\u2019t be able to have adult beverages but we will still have pizza. Maybe I\u2019ll fill in some donuts or something to make it up. And yeah, we\u2019re going to hang out, network, talk shop, and honestly, it\u2019s going to be a lot of fun. I think networking is honestly\u2014there\u2019s some key tenets to anything you do in life but as a recruiter, I always said, if they like you, they\u2019ll join. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I don\u2019t mean that like you need to try to make yourself likeable. I mean that like, if you become a person that\u2019s worth being around and you develop yourself and you bring value to people and you genuinely care about talking to people, good things are going to come your way. Whether that\u2019s from a referral or networking or just the fact that you\u2019re going to learn something. I mean, shoot, I met you a year and a half ago and I\u2019m on a podcast. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s pretty cool.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>It\u2019s awesome.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. So yeah, I do stress the Meetups all the time. I know David Greene here does as well because he hosts Meetups as well. They\u2019re so valuable. I can\u2019t like overhype this because it\u2019s just so incredibly valuable. Even the one that you hosted, I showed up there, your very first one. I\u2019m talking with this older couple, I mean not older, they\u2019re just older than I am. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But like this couple was like established, living in the area, and they\u2019re like talking about how they have this amazing contractor who is just unbelievably good, super hardworking, fair rates, and all of a sudden now I\u2019m like, I\u2019ve got friends with these people and now I\u2019m looking at a deal I\u2019m trying to work in Hawaii right now, as you guys know, and as soon as I close on this, guess what contractor I\u2019m going to be calling to see if he can go over and work on my deal? It\u2019s those things. And what did it cost me? $2? I don\u2019t think I even ate or drink there that night. It was totally free. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>You didn\u2019t have my pizza? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I don\u2019t think\u2014I mean, I did have a slice of pizza. Anyway, it was fun. Anyway. Go<span class=\"Apple-converted-space\">\u00a0 <\/span>to BiggerPockets.com\/events. Like, most of the events there are free. Most of them are put on just like David or David here, and are saying hey, let\u2019s get together and talk real estate. We know that we all help each other by getting together. There are also maybe paid ones on there, I don\u2019t know. And if you have to pay a few bucks, who cares, right? You show up, network, talk to people, and get some food and drinks. All right, with that, we\u2019ve got to move on and get to the world famous <i>Famous Four<\/i>. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But before we get to today\u2019s <i>Famous Four<\/i>, let\u2019s hear a quick word from Mindy Jensen on what\u2019s going on this week on the BiggerPockets Money podcast.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Mindy: <\/b>Monday\u2019s guests join us during the first half of their gap year, a pre-FI road trip around America. Becky and Noah didn\u2019t grow up rich but carefully planned out their life to avoid student debt and chose employable in-demand degrees that allowed them to earn high salaries. After discovering FI on Reddit, they made a few tweaks to their lifestyle, quit their jobs, and hit the open road. This episode shows that financial independence isn\u2019t just a pipe dream. And while Becky and Noah aren\u2019t there yet, they\u2019re well on their way. All right, and now back to the <i>Famous Four<\/i>.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All righty, make sure you guys check out that Money podcast and be sure to subscribe to that podcast. If you\u2019re like on YouTube, subscribe to the YouTube channel. If you\u2019re on iTunes or Google, hit the subscribe button. It helps us out a lot just like ratings and reviews do. So both that show and this show as well.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">With that, let\u2019s get to today\u2019s <i>Famous Four<\/i>. Number one, what is your favorite real estate related book?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Okay, so we\u2019re just going to go with this guy, <i>The Long Distance Real Estate Investing<\/i>. I know, I didn\u2019t want to give him a plug earlier but it was just because I was going to steal my own thunder. And the reason I picked that book, don\u2019t get me wrong, there are a ton of great books and honestly, I had to think about it last night because I realized that you were going to ask me that and I hadn\u2019t gotten an answer.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The reason I think about that one is not necessarily\u2014so I don\u2019t know that I would say that\u2019s the first book you should read. But I would say that if you have any desire to invest out-of-state, that is the first book you should read. So I had been investing out-of-state for however long, two years, three years, and I had a system. And it was working great. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then I read this book and realized it really wasn\u2019t working that great. If I\u2019m being honest, I was looking at property in a different state the other day and I literally like sat down with the book and typed out the e-mails that David had suggested sending and sent them and they worked and I had a super high value real estate agent call me or e-mail me back and shot me not only that deal but like three others that were pretty solid. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So just being able to refine what I was already doing and find out things\u2014I mean, I didn\u2019t even know about Rentometer, which I don\u2019t know how I didn\u2019t know about that but just things\u2014it\u2019s really streamlined my process. So, that book. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Awesome, and by the way, when I was at your house\u2014we had dinner at David\u2019s house when I was out there, and I go in the kitchen and there sitting on the counter was this book. I took a picture and I snapped it and sent it to David Greene and I was like, look, you\u2019re famous.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>And I was like, that being in my house constitutes famous, but I appreciate the sentiment. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I don\u2019t see any reason why we should keep going. Thank you, David. That was great. I think the people have got everything they need. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Sidenote, I reviewed David\u2019s book on Amazon right after I finished reading it and like a week goes, and it\u2019s anonymous, right? No one knows who it is. Like a week later, I see him post on Facebook about this awesome review he got and I\u2019m like, hey, I wrote that. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Nice. I like this guy and his mustache. All right, David, tell us about your favorite business book.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>So again, I tried to narrow it down and so I came up with <i>The Miracle Morning <\/i>as one. And the reason for that, it\u2019s not necessarily a business book. It\u2019s more of a lifestyle book. It is because it basically told me, I was waking up at five in the morning to work out and it told me, hey, you should wake up at four in the morning to do more stuff. So now I wake up at four in the morning every day because that two-hour window before the family wakes up is me time. I don\u2019t have to feel bad that I\u2019m not hanging out with the kids. I can read a book, work on the blog, find a deal, fall back asleep on the couch while reading a book and no one\u2019s going to care. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The other book, and this is probably the more business related is <i>The 80-20 Principle<\/i>. And the reason for that book is because it applies, not only to myself but to the military career. So in the military career, a lot of people do things the hard way, not because they want to do things the hard way, it\u2019s because it was just how it\u2019s always done. And so I like to try to find like what are the most important things and how do I knock that out to be effective and then the rest will fall in place?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Well, that helps in the Marine Corps side. It also helps greatly in the civilian side because now, I\u2019m able to streamline work, which allows me more time to streamline real estate, which allows me more time to streamline personal development and I think that single-handedly being able to pick out the one thing that will knock out the most for the least amount of effort\u2014it\u2019ll save you\u2014anything that saves you time is a worthwhile investment.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>It\u2019s brilliant. Before you move on, real quick, speaking of books, did you guys like the Jimmy Kimmel bit that I think came out this week or something like that. Did you see it? So they go onto the streets interviewing people. They do this random like, interviewing people on the street and they ask a bunch of random people, can you name a book, any book? Just name a book. And like legitimately, tons of people could not name a book. People were like uh, The Lion King. And like they could not. And finally, some guy goes <i>Moby Dick<\/i>. No wait, that\u2019s the opera. That\u2019s the opera. People legitimately could not name a book. Anyway, I thought that was funny. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That is really funny.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>That just means the two of you aren\u2019t marketing enough.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>That\u2019s a good point.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I guess. They all need to name our books. I was waiting. I was like, come on, name the book in property rental investing. No. Anyway, moving on. Number three. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Also, let me add, as far as your <i>Miracle Morning<\/i>, I know that you do it in a closet. You literally lock yourself into a closet, away from everybody else, and I don\u2019t know if you\u2019re still doing that but you did it for a while. And if you can do a Miracle Morning in a closet, then there\u2019s no excuse for not doing a Miracle Morning.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>It\u2019s a full-sized closet. I mean, my desk fits in there. We\u2019ll make it sound a little better but yeah.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>It\u2019s your closet time. There you go.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>I have to come out of the closet every day. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Thank you for doing that for the show. All right, tell us about some of your hobbies. Because you\u2019re in Hawaii. I can only imagine what you\u2019re doing all the time.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Well, when I\u2019m not busy having my appendix removed, I like to surf. Hiking, surfing, networking, going to the beach. We just bought this awesome little dad-powered surfboard thing that I drag my kid along in the beach.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, Roderick\u2019s company. Yeah. We should give him a shout-out. What is that? Dad-powered\u2014I\u2019m going to look it up while you\u2019re talking.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Yeah, Dad-powered. You should check it out. I have some awesome photos and videos I\u2019ll probably post to BiggerPockets of my kid rolling around in it. That thing\u2019s sweet. So dragging him around on his sled while he smiles. Surfing and hiking are really the biggest ones.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>DadPowered.com, by the way. It\u2019s like a little sled that you pull little kids on. It\u2019s amazing. He gave me one while I was in Hawaii. You guys, check out DadPowered.com and get your kid one. It\u2019s super cool. Anyway. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Definitely.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Very cool. All right, number four. My last question of the day. What separates successful real estate investors from those who give up, fail, or never get started?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Taking action. So I\u2019m a huge believer in just learning the hard way, as I like to call it. But the reality isn\u2019t learning the hard way. The reality is that I\u2019ve found every time I think about doing something, I learn, which is great. But I don\u2019t do anything. But every time I stop thinking about doing something and just go do it, everything seems to fall into place for me. Like, the 10-plex was way out of my comfort zone and I had a duplex on the time that I was like, oh, I could buy this, no big deal. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And I could have bought it. I could have made $100 in cash flow. But I went all in for this 10-plex, figured I would learn the hard way, and we\u2019d see what happened. And I ended up buying it for less than what I put down on the duplex and making like ten times as much every month in cash flow. So I would say just taking action. Just do it. If you ask the right questions, you\u2019ll learn. Whether you\u2019ll learn the hard way or not, it\u2019s better than getting stuck in the analysis paralysis trap and just not doing anything. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Very good advice.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Yeah, that\u2019s one of the reasons I really like you, David, is like whenever like I talk to you, you\u2019re just like, yeah so I was just thinking about doing some direct-mail so I just sent out a whole bunch of direct-mail. And I\u2019m like, how many people do that in reality? People are like, oh yeah, I was thinking about doing direct-mail. And I\u2019m going to keep thinking about it for the next couple of years. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Sometimes, I sent out 10 the other day and I got seven back in the mail. I apparently wrote the wrong address on all of them.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>That\u2019s awesome. Well, at least you took action. That\u2019s more than what most people do. So yeah, learn from David Pere here and take action. David, this has been awesome. Really, really good to have you today. I hope people enjoyed your story and can learn from it and take action in their own life. So last question\u2014I\u2019m going to steal your question, David Greene. But where can people find out more about you? What\u2019s your blog and your Instagram and all that good stuff?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>I get to shamelessly plug. So they\u2019re all titled FromMilitarytoMillionaire. So the blog is FromMilitarytoMillionaire.com and the Facebook and Instagram both have that on there. I have a YouTube channel as well that I just started. However, that\u2019s name is like PaintballerDP2 because I just picked it when I was in high school and it won\u2019t let me change it back until I get over a hundred subscribers. So if you want to go subscribe, then I can change my name and it\u2019ll match.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>Help the man, out. Come on, people. Help him out. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>But you can find that through the Facebook and the Instagram. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>So there was a PaintballerDP1? And you had to be DP2? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>No, it\u2019s actually worse than that. There was a PaintballerDP1\u2014it\u2019s DP for David Pere, if you can\u2019t figure that out. There was a PaintballerDP1 and it was me and I lost my password and then I decided that it was still a great name. So I generated a new one instead of just upgrading to a normal name. And the sad thing is that I was never good at paintball. So it\u2019s just like, I had fun once and it was just around the timeframe where I was building it, back in the Instant Messenger days and yeah.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Yep. That\u2019s hilarious. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right well, thank you, David. It\u2019s been fun. We\u2019ll see you around.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David P: <\/b>Absolutely. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>All right. And that was our final interview. I like that guy a lot. He\u2019s a good buddy of mine. We did some surfing together. I know you did some surfing with us as well. So yeah, David, good guy.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>David is a solid guy and his business is just as serious as his mustache. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>There you go. You know, David actually, we didn\u2019t talk about this but he was recently on an episode of Hawaii Five-O because he was an extra in the background on Hawaii Five-O. I\u2019m going to see if I can find that clip and put it in the Show Notes on this show at BiggerPockets.com\/Show281. If I can\u2019t find it, sorry.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>He played a Russian spy in a soap. Yes, very serious man, David. He plays good Russian.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I don\u2019t think he talked like that though. But anyway, I loved today\u2019s show. I love talking with new investors who are getting their feet wet and jumping in because it reminds us of the principles. Because you and I have been doing this for a decade, almost. We\u2019ve been doing this a long time but it\u2019s good to kind of refresh with what are those first initial steps? What\u2019s the fears? What\u2019s the thoughts, the scary things that come up? So just kind of learning from these three guys, Bill, Jake, and David, I really enjoyed it.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>Well, your first steps are the most important and that\u2019s why we want to keep coming back to covering those because while we look at the guys, like we used the bodybuilding analogy a lot\u2014that are in incredible shape and we see them working out at the gym. And they\u2019re working out so hard and we say wow, look at that guy. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I guarantee you the workouts he does an hour are not nearly as hard as his first ones when he was first getting started. That\u2019s where the battle is won. Can you get through the first initial stage of getting that train moving? Because once it\u2019s moving, it doesn\u2019t take as much energy to keep it moving. And success kind of like comes easy but you\u2019ve got to get moving in the very beginning, these first steps are so much more important than your hundredth step.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>So true. All right guys, thank you so much for joining us today. Could you do us a favor? If you have not yet subscribed to the podcast, it matters. It actually helps a ton if you actually click the \u2018Subscribe\u2019 button. So please do so. iTunes, YouTube, whatever. Stitcher. Google. Subscribe to the show and you\u2019ll get it automatically delivered to you and it doesn\u2019t cost you a dime. So please do that and then follow us over on Instagram. @DavidGreene24 and @BeardyBrandon. That\u2019s our Instagrams. Sound good? Anything you want to add, DG, before we get out of here?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>I just want to talk about in the beginning, the <i>Quick Tip<\/i> was masterminding with other investors and letting other people know what you do. You want to put yourself in a community where other people are likeminded and keeping yourself pumped up. My favorite way to do that is just to share my favorite podcast episode with somebody else and say hey, check out this cool thing I\u2019m doing. It\u2019s like inviting your friend to the gym. Your friend probably won\u2019t go by themselves but they would go if you invited them. Now you have a workout partner and you\u2019ve got someone to spot you and bounce ideas off of and keep you encouraged. So think about in your life right now, who do I know that I can share this with that\u2019s going to love me forever because I did. Send them the podcast. Ask them to listen to it. Start the conversation right there and boom, you just found yourself a mastermind buddy and you never know what that can lead to.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Brandon: <\/b>I love it. That\u2019s like a second <i>Quick Tip<\/i> of the day. But we\u2019ll take it. All right, well, with that, let\u2019s get out of here. Until next time, do you want to take us out?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>David:<span class=\"Apple-converted-space\">\u00a0 <\/span><\/b>This is David Greene, for Brandon \u201cLike a Train\u201d Turner, signing off. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><i>You\u2019re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you\u2019re here looking to learn about real estate investing without all the hype, you\u2019re in the right place. <\/i><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><i>Be sure to join the millions of others who have benefited from BiggerPockets.com, your home for real estate investing online.<\/i><\/span><\/p>\n<\/div>\n<h2 id=\"podcast-youtube-video\">Watch the Podcast Here<\/h2>\n<p><iframe loading=\"lazy\" title=\"How to Get Your First Deal\u2014An Episode For New Investors With Bill, Jacob, and David! | BP 281\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/dJl5m8P9wmA?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h2>Help Us Out!<\/h2>\n<p>Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found <a href=\"https:\/\/www.biggerpockets.com\/forums\/25\/topics\/161423-do-you-listen-to-the-bp-podcast\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>. Thanks! We really appreciate it!<\/p>\n<h2>This Show Sponsored By<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-77567 alignright\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/03\/simplisafe.png\" alt=\"simplisafe\" width=\"271\" height=\"58\" title=\"\">Check out <strong>SimpliSafe<\/strong> Security&#8217;s DIY home security systems; an affordable, wireless, cellular, and customizable system that doesn&#8217;t require a contract!<\/p>\n<p>Try it today with a discount:\u00a0<a href=\"http:\/\/simplisafepockets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">simplisafepockets.com<\/a><\/p>\n<h2>In This Episode We Cover:<\/h2>\n<h3>Bill<\/h3>\n<ul>\n<li>Being <strong>imprisoned<\/strong> for 10 years<\/li>\n<li>What changed <strong>in prison<\/strong> for Bill<\/li>\n<li>Starting your <strong>business on the side<\/strong><\/li>\n<li>How he ended up<strong> investing<\/strong> in real estate<\/li>\n<li>What went in his head with <strong>his first investment<\/strong> property<\/li>\n<li>The beauty of keeping <strong>expenses low<\/strong><\/li>\n<li>Having <strong>tiny little steps<\/strong><\/li>\n<\/ul>\n<h3>Jacob<\/h3>\n<ul>\n<li>Jake&#8217;s <strong>investing path<\/strong><\/li>\n<li>How he <strong>got into<\/strong> real estate<\/li>\n<li>Buying a $25,000 house with a <strong>$140 monthly mortgage<\/strong><\/li>\n<li>Going for the <strong>smaller banks<\/strong><\/li>\n<li>Investing at a <strong>very young age<\/strong><\/li>\n<li>Joining<strong> local Facebook<\/strong> pages<\/li>\n<li>His<strong> criteria<\/strong> for finding properties<\/li>\n<\/ul>\n<h3>David<\/h3>\n<ul>\n<li>David&#8217;s story and how he got to<strong> Hawaii<\/strong><\/li>\n<li><strong>BRRR, OD, <\/strong>and<strong> HELOC<\/strong><\/li>\n<li>Paying close to<strong> 5 percent<\/strong> on a 10-unit apartment<\/li>\n<li>Having a <strong>great team<\/strong> you can trust<\/li>\n<li>How he built a <strong>meet up<\/strong> in Hawaii<\/li>\n<li><strong>And SO much more!<\/strong><\/li>\n<\/ul>\n<h2>Links from the Show<\/h2>\n<ul>\n<li><a href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Forums<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/webinar\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Webinars<\/a><\/li>\n<li><a href=\"\/renewsblog\/biggerpockets-podcast-277-building-a-six-figure-family-real-estate-business-with-ashley-wilson\/\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Podcast 277: Building a Six-Figure Family Real Estate Business with Ashley Wilson<\/a><\/li>\n<li><a href=\"\/renewsblog\/2016\/01\/14\/bp-podcast-157-simple-morning-ritual-help-dominate-every-area-life-with-hal-elrod\/\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Podcast 157: A Simple Morning Ritual to Help You Dominate Every Area of Your Life with Hal Elrod<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/events\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Events<\/a><\/li>\n<li><a href=\"http:\/\/dadpowered.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Dad Powered<\/a><\/li>\n<li><a href=\"https:\/\/www.instagram.com\/beardybrandon\/?hl=en\" target=\"_blank\" rel=\"noopener noreferrer\">Brandon&#8217;s Instagram Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.instagram.com\/davidgreene24\/?hl=en\" target=\"_blank\" rel=\"noopener noreferrer\">David&#8217;s Instagram Profile<\/a><\/li>\n<\/ul>\n<h2>Books Mentioned in this Show<\/h2>\n<ul>\n<li><a href=\"https:\/\/amzn.to\/2kDP38e\" target=\"_blank\" rel=\"noopener\"><em>The 21 Irrefutable Laws of Leadership<\/em><\/a> by John C. Maxwell &amp;\u00a0Steven R. Covey<\/li>\n<li><a href=\"https:\/\/amzn.to\/2LaCTPn\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Awaken the Giant Within<\/em><\/a> by Anthony Robbins<\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/richdadpoordad\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Rich Dad Poor Dad<\/em><\/a> by Robert Kiyosaki<\/li>\n<li><a href=\"https:\/\/get.biggerpockets.com\/longdistancebook\/\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Long-Distance Real Estate Investing<\/em><\/a> by David Greene<\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/ubg\" target=\"_blank\" rel=\"noopener noreferrer\"><em>The Ultimate Beginner&#8217;s Guide to Real Estate Investing<\/em><\/a> by BiggerPockets<\/li>\n<li><a href=\"https:\/\/amzn.to\/2srJAoi\" target=\"_blank\" rel=\"noopener noreferrer\"><em>The Advanced Guide to Real Estate Investing<\/em><\/a> by Ken McElroy<\/li>\n<li><a href=\"https:\/\/amzn.to\/2LM7FPC\" target=\"_blank\" rel=\"noopener noreferrer\"><em>How to Win Friends &amp; Influence People<\/em><\/a> by Dale Carnegie<\/li>\n<li><a href=\"https:\/\/amzn.to\/2J3cmCX\" target=\"_blank\" rel=\"noopener noreferrer\"><em>The Miracle Morning<\/em><\/a> by Hal Elrod<\/li>\n<li><a href=\"https:\/\/amzn.to\/2xvNORy\" target=\"_blank\" rel=\"noopener noreferrer\"><em>The 80\/20 Principle<\/em><\/a> by Richard Koch<\/li>\n<\/ul>\n<h2>Tweetable Topics:<\/h2>\n<ul>\n<li>&#8220;My success story didn&#8217;t started when I got out (from prison), it started right away in the very beginning.&#8221; <a href=\"https:\/\/twitter.com\/home?status=%22My%20success%20story%20didn&#039;t%20started%20when%20I%20got%20out%20(from%20prison),%20it%20started%20right%20away%20in%20the%20very%20beginning.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;Quit the things that are holding you back and have you put in the exact location you are.&#8221; <a href=\"https:\/\/twitter.com\/home?status=%22Quit%20the%20things%20that%20are%20holding%20you%20back%20and%20have%20you%20put%20in%20the%20exact%20location%20you%20are.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;Find a market that makes sense.&#8221;\u00a0<a href=\"https:\/\/twitter.com\/home?status=%22Find%20a%20market%20that%20makes%20sense.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;I want to buy something that is certainly desirable.&#8221;\u00a0<a href=\"https:\/\/twitter.com\/home?status=%22I%20want%20to%20buy%20something%20that%20is%20certainly%20desirable.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;Highest risk is vacancy.&#8221;\u00a0<a href=\"https:\/\/twitter.com\/home?status=%22Highest%20risk%20is%20vacancy.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;Become a person worth being around.&#8221;\u00a0<a href=\"https:\/\/twitter.com\/home?status=%22Become%20a%20person%20worth%20being%20around.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<li>&#8220;If they&#8217;ll like you, they&#8217;ll join.&#8221;\u00a0<a href=\"https:\/\/twitter.com\/home?status=%22If%20they&#039;ll%20like%20you,%20they&#039;ll%20join.%22%20BP%20Podcast%20281%20biggerpockets.com\/post281%20%40biggerpockets\" target=\"_blank\" rel=\"noopener noreferrer\">(Tweet This!)<\/a><\/li>\n<\/ul>\n<h2>Connect with Bill<\/h2>\n<ul>\n<li><a href=\"http:\/\/wealthwelldone.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Bill&#8217;s Blog<\/a><\/li>\n<\/ul>\n<h2>Connect with Jacob<\/h2>\n<ul>\n<li><a href=\"http:\/\/jacobayers.com\/podcast-2\/\" target=\"_blank\" rel=\"noopener noreferrer\">Jacob&#8217;s Podcast<\/a><\/li>\n<li><a href=\"http:\/\/jacobayers.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Jacob&#8217;s Website<\/a><\/li>\n<\/ul>\n<h2>Connect with David<\/h2>\n<ul>\n<li><a href=\"http:\/\/www.frommilitarytomillionaire.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">David&#8217;s Blog<\/a><\/li>\n<li><a href=\"https:\/\/www.instagram.com\/frommilitarytomillionaire\/\" target=\"_blank\" rel=\"noopener noreferrer\">David&#8217;s Instagram Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.facebook.com\/frommilitarytomillionaire\/\" target=\"_blank\" rel=\"noopener noreferrer\">David&#8217;s Facebook Page<\/a><\/li>\n<li><a href=\"https:\/\/www.youtube.com\/user\/paintballerdp\" target=\"_blank\" rel=\"noopener noreferrer\">David&#8217;s Youtube Channel<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Your first deal might just be your most important \u2014 because it leads to all the rest. That\u2019s why it\u2019s so imperative to study others who have just recently purchased [&hellip;]<\/p>\n","protected":false},"author":17340,"featured_media":117894,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4565],"tags":[],"class_list":["post-99566","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-podcast"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/99566","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/17340"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=99566"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/99566\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/117894"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=99566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=99566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=99566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}