BiggerPockets Podcast 128 with Anca Rader Transcript

Link to show: BP Podcast 128: Investing in Foreclosures, Quitting Your Job, and Getting More Than 10 Loans with Anca Rader

Josh: This is the BiggerPockets Podcast, Show 128.

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Josh: What’s going on, everybody? This is Josh Dorkin, host of the BiggerPockets podcast, here with my co-host, Mr. Brandon Turner. What’s up, Brandon?

Brandon: Not much. How are you doing?

Josh: I’m doing good, man. I’m doing good. It’s been fun having you here.

Brandon: Thanks.

Josh: It’s been a fun adventure.

Brandon: I’m leaving you in like two hours. I’m going back home.

Josh: You are, you are, you are. Yeah, but we got to do this cool team-building thing while you were here, the insane Inflatable 5k was lots of fun to do with the BiggerPockets team.

Brandon: I walked my first 5k.

Josh: You kinda had to walk because we were going through these mud fields. You couldn’t really run it or you would have been on your face the whole time. So yeah.

Brandon: It was cool, though, yeah. For people who don’t know, the Inflatable 5k is an actual 5k race-ish and it’s this gigantic inflatable jumpy things that you climb up, obstacle courses. It was pretty cool. So check it out near you guys.

Josh: Awesome, awesome. Cool, man. So today we’ve got an interesting show. We talk about all sorts of stuff, really dig into foreclosures and acquisition strategies. But before we get into that, why don’t we get today’s Quick Tip?

Brandon: All right, today’s Quick Tip is there is currently a sale running on The Book on Flipping Houses and The Book on Investing in Real Estate with No Money Down, 10% off right now when you do and the code SHOW128. One word. SHOW128. No spaces.

Josh: When does that expire?

Brandon: That’s 10% off and it expires one week from the day this comes out. So this comes out on the 25th. It expires on July 2nd. So if you want to get 10% either of those books on BiggerPockets, not on Amazon—do it right now. So yeah, anyways, to pick those up, just go to Again, that code is SHOW128. There you go. Quick tip, cool.

Josh: All right. That was quick. And quick on your toes, Brandon. Nice one, nice one. All right, guys. This is show 128. Thank you everybody for the ratings and reviews you guys have been leaving us. They’re awesome. Today, I’m going to read a couple of really quick ones. Bill Horton—“Great podcasts with great info. Looking forward to many more”. Thank you, Bill.

Brandon: Thanks, Bill.

Josh: J.W. Hoss says, “The podcast is great, just like the website. These guys are interested in helping people learn without trying to sell something. Highly recommend”. Thank you, J.W. Hoss. And this last one, somebody was going to give us five stars but gave us three because of our stupid jokes. We actually get that as feedback from time to time. But guess what, guys? We’re going to give you the show that we want to give you. Brandon and I are being real. We are who we are. We’re not trying to come up with stupid jokes. We are just stupid people.

Brandon: I try.

Josh: This is who we are. You’re going to get what you’re going to get—yeah, don’t do that. We’re going to be us. We’re going to be real and we’re not going to put on airs to produce the perfect show for you because frankly, that’s not who we are. That’s not what we want to do. And you know, hopefully you’ll respect us for that. If you don’t, maybe you won’t—

Brandon: Give us a three-star rating. At least give us a rating.

Josh: Well, they gave us three stars.

Brandon: I don’t care. Go give us a rating. Even if it’s three.

Josh: Yeah, get out there. Help us out. Leave us a rating and you know, just make sure in your feedback, you talk about Brandon and stupid jokes and not mine, because mine are pretty bad as well sometimes. Anyway. With that, let’s get to this—today’s show with Anca Rader. She’s been a buy-and-hold investor focused on single-family and small multi-family. It sounds like—and we’ll find out a little bit more as we get into this—Anca’s got some cool strategies for acquisition, really with a focus, it seems, on foreclosures. And so let’s find out more about that and get into the show.

All right, guys. She’s officially my newest, most favorite guest, thanks to the snarky comment she just threw at Brandon. But let’s bring her on. Anca Rader, welcome to the show. It’s good to have you here.

Anca: It’s great to be here and an honor and I’m glad to be talking to you guys.

Brandon: Awesome.

Anca: Thanks for having me on. And I love BiggerPockets.

Josh: You’re the best.

Brandon: You’re the best.

Josh: Not just because you’re my favorite guest but because of what you said before.

Brandon: Okay, thanks.

Josh: So we’re going to leave all our guests wondering exactly what this is. But yeah, so Anca, welcome, welcome. Thanks for being here. We are talking to you live in Romania, is that right?

Anca: Yes, correct.

Brandon: Well, we’re not live in Romania, Josh. We’re in Denver, come on. Anca is in Romania.

Josh: Yes. This might be our most long distance show. Very exciting. Thank you for taking the time to do this and let’s just jump right in. Who are you? How did you get into this crazy world that is real estate?

Anca: Well, I’ve kind of always been a saver and moved to the States when I was 12 and in high school, I read the Rich Dad, Poor Dad, as most people have. I wonder what percentage of your listeners have actually read that book and that’s how they got started.

Brandon: We should do a poll someday.

Josh: And by the way, you said you moved to the States. Presumably, you’re talking about moving to the States from Romania as well, yes?

Anca: Yes, correct. So I moved from Romania when I was 12 and anyway, so when I was in high school, I read the Rich Dad, Poor Dad book and I just thought it was a great idea and something that I would really enjoy doing. So I kind of kept that in the back of my head and then went to college, went to grad school, figured out how to get into real estate and get a job. And in 2007, I finally got a job working as an IT consultant and that’s about it for that.

Josh: You had gotten your MBA, right?

Anca: Yes. I do have an MBA. And a BBA.

Josh: Wow. That’s very impressive.

Anca: Yeah, I’m pretty good at excelling. That’s what my husband calls it. Excel—to look at places.

Josh: All right, so you did all this stuff. You’re an IT consultant. You got your MBA. And you all along, trying to think about what do I do, how do I get into this real estate world? What happened from there?

Anca: Well, I got my license in 2005 at first. I just didn’t know what to do. And in 2007, when I started working, I started saving up more money and because my dad has a construction company and he knows that I’ve been trying to figure out how to get into real estate, he offered to go 50/50 with me on an investment property.

Josh: Let’s go there. So your dad trusts you, for some reason. Maybe it’s the MBA. Maybe it’s the bloodline. But this guy says I’m going to go 50/50 with you. I’m assuming he probably was putting up the money?

Anca: No, we are 50/50 partners. So 50/50 money.

Josh: 50/50 money. Okay. So bad assumption. Don’t assume. It makes an ass of you and me. And I just assed myself, but okay. And you guys go in together and what was the strategy? What was the first deal that you guys decided to do?

Anca: We bought a house, a single-family home. We closed on April 1st of 2008. And then we bought it with cash and we bought it under his name. And then by the end of the year, we were both able to save enough money to where we bought a second house with cash on my name. So that’s kind of how we got started.

Brandon: Nice. Why did you decide to go cash instead of using a loan on those first properties?

Anca: We had some cash and we didn’t know any better.

Brandon: It’s not a bad thing. A lot of people think you have to do one way or another. But I don’t think there has to be—there’s not a right or a wrong way. There’s some that works for some people and some that works for others and yeah, I think that’s cool. I don’t think there’s anything wrong with doing that.

Josh: Absolutely.

Anca: I didn’t even know how to get any loans at that time, so we just jumped in, did the best we could do. And then we did get loans after that. So, the next step was my dad got a home equity line of credit on his property, and then we were able to cash out and get two more places with that loan.

Josh: The home equity line of credit. Can you kind of explain what that is and how that exactly works?

Anca: Sure, well, it’s just basically a loan where you can take money out on a property that you own free and clear. At least ours was free and clear. And so what we did is—you don’t have to take all the money out at once. You just kind of take it along as you go. And we just got like something along $95,000 line of credit, so we took some money out, bought a place, then fixed it up, rented it. Then took some more money out, bought a place.

Brandon: Anca, what market are you working in?

Anca: The suburbs of Chicago.

Brandon: I was going to say, Chicago for $90,000, I would think would get you like a 2x2 box. Is this southwest suburbs? Northwest?

Anca: No, it’s not. Pretty much all our properties are within 15 minute radius of where my parents live.

Brandon: Okay, got it.

Anca: But starting in 2008—the property got appraised at $150,000. It just was the loan—that’s what the loan—the property got appraised at $150,000 but we just got about $90,000 in a line of credit.

Josh: Okay, got it. What can you tell us about those first few purchases? What were you looking for? Were they single-family houses or what kind of properties were they?

Anca: Yeah, they were all three-bedroom, one bath, single-family homes and we were just looking to find something that we could rent and we had the budget for. So at the time, the market was still going down. Like I said, we bought the first one in April 1st of 2008 so the market was still coming down. So we started buying at the time that it was coming down.

Brandon: I like to say, I started buying in, too, my first one was in 2007-2008 and it was like a roller coaster, like buying in on the way down. Not sure where you’re going to hit the bottom but we just kept buying, hoping that we’d hit it at some time and start going back up again. Luckily, we did eventually hit bottom and come back up.

Josh: For sure. I know you said your parents’ house. I don’t have your parents’ address so I have to ask—what market is your parents’ house in?

Anca: Southwest Chicago. But it’s more west.

Josh: Okay, fair enough. So you said 3/1s. You guys were buying 3/1s. A lot of people say the bread and butter is the three bedroom, two bath. Why were you guys going for the three bedroom, one bath?

Anca: At first, it’s just what was affordable. They were all foreclosures. And we were just starting to learn the real estate game.

Josh: Got it. So foreclosures—how are you buying them? Were you finding them on the MLS? Were these REOs? Were you getting them at auction? How are you acquiring these?

Anca: MLS. So we’ve been mainly by MLS. Since then, I’ve bought some places at a live auction, online auction, short sales. But mainly, MLS.

Josh: Okay. And those are REO foreclosures, correct?

Anca: Correct.

Josh: And so, for those people who don’t know what an REO foreclosure is, you’re talking about a property that has been taken back by the bank and when they do, they clear all the liens so you pick up that property, there’s no liens attached to it. It’s definitively less risky than an auction property that may have liens on it. But that’s kind of the advantage of an REO. And so these first properties that you acquired—did you know that? Were you buying the REOs just because they were foreclosures? Were you buying them because you didn’t know any better? What was—

Anca: We were buying them because they were the cheapest properties around.

Josh: Okay.

Anca: So yeah.

Josh: At the end of the day, you were looking for cheap. And did you have any kind of idea on returns, or again, you were like, I want to buy the cheapest property I could buy and we’ll figure the rest out later?

Anca: At the beginning, I tried to run the numbers but there wasn’t really that many resources—at least I didn’t see BiggerPockets at the time. So pretty much after we bought the first place, I started running the numbers. I came up with my own Excel after we bought our first place.

Josh: Got it.

Brandon: Can I ask what kind of advice you have for other people who might be listening who are just starting out, maybe want to buy their first property? What did you learn during that process that you can help other people with?

Anca: I’ve learned a lot during that first process but what I would recommend for people starting out is what you’ve said, too, is go more of the hack your housing route and buy a place where they could live in. Now, I live in the city so I was renting while I was buying investment property because I wanted to live downtown. I wanted to live in the city. But things were too expensive in the city. That being said, if people can live in the suburbs or somewhere—I would say more affordable. If they live in a more affordable area, then just buy a duplex or a four-flat. And I said that with my husband’s first loan. We got an FHA 203K, a four-flat and we bought it to live in.

Josh: Hey, can you talk about that a little bit? The 203K loan? What exactly is it and how does it work and why is that an advantageous type of loan for an investor?

Anca: 203K loan is where you also get extra money to fix up the place. So it’s advantageous because for example, with an FHA 203K loan, we put 3.5% down which I actually recommend, knowing better now, putting 5% down. We put 3.5% down and then we got $35,000 on top of that of the original loan to fix up the place.

Josh: Why 5% versus 3%?

Anca: The rules changed pretty much the week that we closed the deal on our place. But now, if you put only 3.5%, you can never get rid of your PMI. So it’s more of a 30-year commitment in terms of the PMI payments.

Brandon: Unless of course, you refinance into a whole new loan, right?

Anca: Yeah, but the interest rate is so low that I doubt by the time that happens, that it’ll be just as low. So it might just be worth keeping it as is and getting the rate.

Josh: So who would get a 203K loan? I mean, can I get one if I want to just buy a primary residence? Does a landlord use that kind of loan? Is it for flippers? Who uses those?

Anca: It’s for owner-occupied places. So I got—because I already had a lot of experience in investing, but more as an investor—I never lived in any of my investments. I got this with my husband’s loan, which is a tip that I would also recommend, is I don’t know if any of the people know—I think it was mentioned for as a couple, you can get four loans, but if you get them separately as individuals, even if you are married, you can get eight separate loans. So anyways, I already had four loans and I got my husband to get his first loan like that with an FHA 203K and it’s for owner-occupied places. It’s not for investors as far as I know.

Brandon: So to clarify that for people, in case they don’t know what you mean by four loans—so Fannie Mae, which is the largest buyer of mortgages in the country—most of the loans that people go out and take come from Fannie Mae. So anyway, Fannie Mae makes people fit inside this perfect box of you have to fit this, this, this and this. And one of Fannie Mae requirements is, we only want you to have four loans on your credit report. Anything more than that, we’re going to be angry. Now, Freddie Mac, the other large buyer, will sometimes let you go up to ten if it’s the right bank, the right situation. But either way, you’re capped at those for having them on your credit thing. So what you’re talking about is the marriage—you might play that as well. I love that. The rule is, you can only have four on your thing. So yeah, my wife has a few properties in her name. I have a few in my name. And we’ve played that game as well. There’s nothing wrong about it. You just have to fit within their rules and that’s part of the game you have to play to fit that. Anyways, I think that’s awesome. I’m also a huge advocate of the 203K loan. In fact, can I plug here? Anca, can I plug on your show my book?

Josh: Oh, here it goes.

Brandon: All of Chapter 2 is about house-hacking, including a huge section on the 203K loan. So if people want to pick up that book— All of Chapter 2 is about house-hacking, including a bunch on the 203K. So, very cool.

Josh: Which, by the way, as we’re recording this, I just have to add this. It is officially the #1 book in the real estate category on Amazon right now, as we’re speaking. Which we’ve never had happen before, so congratulations to Brandon for being the #1 absolutely official #1 bestselling author in the real estate category on Amazon. That may change in three weeks.

Brandon: That is pretty awesome. And here is what we’re going to do to celebrate. We’ve never done this before. to encourage people to comment on the Show Notes on this, I’m going to give away two physical books, mailed to your house, of The Book on Investing in Real Estate with No Money Down to somebody who comments—so two different people can win—in the comments section. So we’re going to have Anca pick the best comment. We’ll give it seven days, maybe. And the two best comments that she—

Anca: Can I comment?

Brandon: You can comment as well. And if you pick your own, that’s cheating.

Josh: You can do that at That’s Leave a comment and you’ll get a chance to win one of the two books of Brandon’s—what is it called?

Brandon: The Book on Investing in Real Estate with No Money Down.

Josh: No money down. There you go.

Brandon: The best book ever written on humankind. Moving on. Let’s see, so you did the 203K. You bought a four-flat, is that what you said? Or a four-plex, if you’re in the rest of the U.S., not in Chicago. Which is funny. Chicago calls them flats. I’ve complained about this before, but you’re the only place in the country that say flat.

Anca: Four-unit?

Brandon: Yeah, four-unit. That’s what the rest of us say. The rest of the world—anyway. You did that. How many total properties have you invested in now overall?

Anca: 33 at the moment. And I have offers on three.

Josh: So are you guys holding the 33 properties right now?

Anca: Mhmm.

Brandon: Still you and your dad?

Anca: Okay—I’m a little younger and a little more aggressive than my dad so I have basically three different companies. One with my dad and I at 50/50, one just by myself, and one with my husband now.

Josh: Okay, very cool.

Brandon: So are you primarily—this is what you do for a living now, right? You buy rental properties and you hold onto them and you take the cash flow and are expanding that business? Are you working while you’re doing all of this?

Anca: I’ve had a full-time job until March of this year, so I had a full-time job the whole time that I was investing and I didn’t want to quit my job until I pretty much replaced my job from passive income in real estate.

Josh: Got it. How long did that take?

Anca: Seven years.

Josh: Seven years. So for those people who are like, hey, I’m gonna be a real estate investor and buy and hold property and then I’m going to quit my job in like six weeks—you’re playing the long game.

Anca: Yeah. My tip to them is wait. Don’t do it. Invest in real estate but don’t quit. Keep your day job.

Josh: And why should they do that? Why keep your day job? What advantages did you find that having a day job gave to you?

Anca: Just being able to leverage. I could not have leveraged if I had not kept my day job. So I just made enough income from my regular job to where I was still, regardless of what happened with the properties, I was still a good bet. And once I got to the point where I didn’t really need my job anymore—the business was making money and was supporting itself, then I started feeling comfortable with quitting my job. I still didn’t quit for six plus months after that.

Josh: Got it.

Brandon: So now that you’ve quit your job—has your husband quit his job as well?

Anca: Yes, temporarily. He is here with me. My grandparents raised me so I took the time off as soon as I had some freedom to spend some time with them.

Brandon: I love that. That’s cool.

Anca: So that’s why I’m in Romania.

Brandon: How nice. Because people work so hard to achieve their goals with real estate—I love the fact that after you achieved that goal of quitting your job, you went and travelled the world or at least travelled back home to your native land—is that the word? I think that’s awesome. I love that.

Anca: Yeah. And we’ve been travelling, too. My husband’s bike is here—his motorcycle. So we’ve been riding around. We went to Moldova. We went to Ukraine. Trans Istria.

Brandon: That’s great.

Josh: These are all places in a land called Europe, to all the Americans listening who don’t know anything about what you’re talking about. Because we’re very much self-centered people here in America. Which we shouldn’t be but we are.

Brandon: So you guys did like a motorcycle trip around Europe. That’s so cool.

Josh: Eastern Europe. That’s so cool.

Anca: Well, my husband did a motorcycle trip from South Africa to Norway a couple of years ago.

Josh: That’s awesome.

Anca: And he left his bike here. At my grandparents’ house. So the bike was already here. So why not?

Josh: Nice. So let’s talk more about your business. Let’s rewind a little bit. You said 30something units. The first bunch, you did on your own. You’ve got partnerships. What happens when you hit your four limit and your husband is going to hit his four limit and now where do you go? Your dad hits his four unit. How do you move forward?

Anca: Get into commercial loans. That’s what I ended up doing. I guess a tip would be for people to look at small, local banks for loans. It took me a while to figure that out. So what I ended up doing—and how I found the two banks that I work with in Chicago—there’s Crane’s list of top 100 local banks and I just copied that, put an Excel spreadsheet, got the addresses, got the phone numbers, so I could also find which bank is closest to me and just started calling them during lunch.

Josh: And what do you ask them when you call them?

Anca: I asked to speak with a commercial banker and then I asked if they offer commercial loans on residential property and if they do, what type of loans? Because I don’t just want to get a loan, I want to get the best option possible but also get a bank that’s close to around where we live. Around where my parents live.

Josh: And what does the best option possible mean? I’m sorry. Is that just interest rate or are you looking for anything else beyond that?

Anca: Interest rate and also the term of the loans. So different banks do like—let’s say—advertised over 20 years but then it balloons over five years or maybe it’s fixed for 15 years. That kind of stuff. So because I am pretty risk adverse for a real estate investor, I try to find a bank that not only gives me a good rate but also gives me a longer term on the loan.

Brandon: I just want to point out what you did that I think is so awesome that I think our listeners should do. If you guys are struggling to get a loan, or you’re having trouble—that is so cool. You went and got a list of 100 banks, wrote down the phone numbers for every one, and called every one. I mean like, or you just started making phone calls. That is such like an action step that—people are like, I don’t know what to do. I can’t get a loan. And then they go and play their video games or watch TV, right? That is so cool. I don’t know. So that’s just a tip for people. If they’re struggling to get loans, just do what you did there. I think that’s awesome that you found that. So what kind of—maybe you kind of said this but what kind of terms are you actually getting? Are you getting 15 years—are you getting a five-year balloon payment? What kind of things are you seeing?

Anca: I’m using two different banks but the one that I got the better terms that I liked to work with is a 20-year AM but then a seven-year fixed rate.

Brandon: That’s not bad.

Anca: I thought that was a pretty good deal. Yeah.

Brandon: Are you—with a 20-year AM—for people who don’t know, the loan is spread out over 20 years. A lot of times, a residential is spread out over 30. So with 20, you’re probably seeing less cash flow because your payment is a lot higher. Is that what you are noticing or are you still seeing cash flow anyway? Or are you in this more for appreciation and a loan pay down now?

Anca: I’m mainly a cash flow investor, but all the places, minus the first one we bought, cash flow pretty well.

Josh: Can we talk about that? I’d love to hear typical numbers or an example of one of the properties that is your average, cookie cutter, Anca Rader investment property? Can you potentially pick one out and tell us about it?

Anca: Sure. I’ll speak about one of my favorites. We have three of those, but it’s a four-flat. So they’re four-flats. What I like to do rather than flipping is what I call flip to myself, which is buy a place, like a foreclosure, fix it up, rehab it, rent it out, then get a loan on it. Then get it appraised and get a loan on it. So that’s kind of what I’ve been doing. One example is like I said, a four-flat, which we bought for $85,000 and we put $20,000 into repairs. Now, the $85,000—it was in pretty rough shape. When we went in to look at it, there was ice on the floor in the bedroom and ice on the wall.

Brandon: Nice.

Josh: Brandon’s got this mystery where he’s got a water spot in one of his apartments in the middle of the floor and nobody has figured out where this is coming from. Where, pray tell, is the ice coming from?

Anca: Well, it was winter. The pipes burst and the water was still on. I guess it wasn’t winterized—there was like a sheet of ice on the wall so you could pretty much skate on the floor.

Josh: That’s awesome.

Brandon: That is pretty great. So, the strategy you’re talking about is something I like to call the BRRRR strategy, which I made up a few months ago. BRRRR, which is the Buy, Rehab, Rent, Refinance, Repeat. And basically, that sounds like what you’re doing. You bought it. You fixed it up. You rehabbed it, and then you rented it out. And then you’ve got to get a loan on it and get all your money back or most of your money back or whatever and then go and do it again. It’s just a really solid thing. I did a webinar on it, back, what—a month ago? And we have a Pro Replay Room where Pro members can go and watch all the old webinars, so if you’re a Pro member at, go look for the webinar. It’s like an hour and twenty minutes on how to invest in fixer-upper rentals using the BRRRR strategy. Anyway, I just thought I’d let people know—if you are a Pro member, go check that out today. It’s pretty cool. And yeah, so Josh, where do you want to go from here?

Josh: I want to talk more about the numbers. So you say, cash flow, you’ve got a 20-year AM on this. You paid, what did you say, $85,000 and put $20,000 in.

Anca: No, $40K in repairs now. My dad’s guys work, do the rehab, so it’s probably a little cheaper than if you outsource the work, so to speak. So we’re pretty much a total of $125,000 in. It got appraised at $180,000 so we basically got a $130,000 loan on it so we got in—we were 25% equity plus we got $5,000 extra dollars, but of course, we’re actually using that to reinvest in other property. And the place is rented for $850 per apartment so that’s $3500 a month.

Josh: It’s $850 per apartment for four.

Brandon: Those are some incredible cash flow.

Josh: Where is this?

Brandon: I’m going to move my investing there. Were those like incredible deals or are those fairly common or are those getting harder to find, I’m assuming?

Anca: They’re not that common, but I check it pretty much every other minute. Okay, not really that often. I check it pretty often, though. Like before I go to bed.

Josh: That was REOs, MLS deals.

Anca: Yes. But what I typically do is even though I have my license, I’ve had my real estate license for a year—what I typically do is call a selling agent, have them show me the place and give them the commission. That way, they’re more likely to have me buy the place.

Brandon: That’s an amazing tip. I think somebody said that a long time ago but we’ll just repeat it here. That idea. If you are an agent, or even if you’re not an agent, if you work with the selling agent, they get double the commission, they have double the incentive to sell it to you. Of course, technically, an agent isn’t supposed to steer one buyer or the seller to accept one buyer versus another, but we all know these are people. So if an agent’s got two deals on their desk and one is going to give them double the commission, naturally, they’re going to be a little more inclined to hurry up and get that offer submitted and all those things that maybe—I don’t know if that’s illegal or not but they do it. It’s common.

Josh: I mean, you’re allowed to double book a property, but you’re definitely not supposed to steer—you have to select in the best interest of the client. The best interest of the client is the person who’s going to close, not just the person who’s going to give you the biggest commission check.

Brandon: But I see it all the time. People still do it. I think that’s a great tip.

Josh: Well, that’s a great deal. That’s awesome.

Brandon: Can I ask who manages that property, or like all of your properties?

Anca: Sure. My dad does.

Brandon: Okay, that’s cool.

Josh: So you guys manage everything as well.

Anca: Well, he does. I more handle the—

Josh: Excel acquisition?

Anca: Yeah, the acquisitions, the long-term planning. That kind of stuff. Financing.

Brandon: Yup. Got it.

Josh: Anca, I want to go into your buy strategy. So this one was REO MLS. A bunch of the early ones, you said were REO MLS, but you also had talked about going to auction. Are you purchasing properties from websites like or Hubzu, or are you just buying it at the courthouse steps? Can we dig into that a little bit?

Anca: Well, I’ve done all three, actually. So I bought one live. I’ve bought one from and I’ve bought one from I’ve not yet bought something from HomeSearch.

Brandon: Can you explain the differences between the three? I’m going to cut you off every time. It’s more important that I ask the question. I’m better looking. I talk clearer. I’m clearly better.

Josh: All right, Anca. Let’s start with Hubzu.

Anca: You’re both really good.

Josh: Can we start with Hubzu?

Anca: Sure. I’ll start.

Josh: Do you want me to leave? Do you guys need a room?

Brandon: We can talk ourselves. You can go over there. I’ll handle this interview.

Josh: You’re getting a little aggressive here.

Brandon: I want to know about Hubzu. Since Josh asked that, I’m going to ask it better. Tell me about Hubzu. What exactly is Hubzu and should I be using it?

Anca: It’s an online auction site where houses pretty much keep on getting relisted every seven days. So let’s say, for example—at least the ones that I keep an eye on—the house that we ended up buying and we closed on in February, I was keeping an eye out on the house since pretty much June or July of last year. So the price kept changing and then it kept going back up, down—at the time when it was first at auction, it wasn’t low enough to where it was worth buying.

Josh: So explain that. Because you said it goes up, it goes down. This thing goes on the market, it goes to Hubzu.

Anca: Maybe I should repeat that.

Josh: That’s okay. It goes to Hubzu. We’re going to keep talking here. It goes to Hubzu. This thing goes listed. Is there a reserve or no reserve?

Anca: There is a reserve.

Josh: Okay. So there’s a reserve. So say a property goes on the market. The reserve price is say $100,000. Nobody bids $100,000 so it doesn’t sell. I don’t really understand somebody raising the price at that point. Or a website raising the price. Is that typical?

Anca: Well, the price changes. I mean, they relist it every seven days even if nobody bids on it.

Josh: Why? I guess I’d have to get the guy from Hubzu in here to talk about that.

Brandon: Actually, that wouldn’t be a bad idea.

Anca: I just know how it works. Yeah. So it gets relisted every seven days.

Brandon: Interesting. Yeah I need to look into that more. I know that some properties in my area have been listed on Hubzu and I never bothered to even hardly pursue them because I’ve never done it and it scares me and I’m afraid and sometimes I cry because I’m not going to do it.

Anca: It was a pretty good experience. I’ve been on Hubzu places more than once. It’s just that I only got one out of the several ones that I bid on. And it’s because sometimes even though there is a reserve and even if, let’s say you have the highest bid at the end of the auction, they might still come back to the bank—depending on what the reserve is—they might come back to you and counter. And maybe the counter is too high and then you might not want to take the place.

Josh: Can you look at these properties? Can you visit them and walk in or are you bidding sight unseen?

Anca: You can look at them. I do have my license so I can just get the code right on the site. You just click on the view code link.

Josh: Gotcha. And for somebody who does not have a license?

Anca: They can have an agent show them the places.

Brandon: Okay. That’s good to know. So it’s not like the courthouse steps where you may not have a chance to see these properties before you’re bidding on them.

Anca: Correct.

Brandon: Okay, cool.

Josh: So Hubzu, I’m looking at it right now. You’ve got time. You’ve got bid. It gives you kind of basic details. You could click the “View Detail” link here and it’s got pictures, an MLS ID. So these are properties that are actually listed on the MLS.

Anca: Most of the time. I’ve noticed that some of them are not listed on MLS. They’re just on Hubzu.

Brandon: Got it. Okay.

Anca: It probably depends on the agent.

Josh: Makes sense. What about Is it similar?

Anca: No, it’s not similar. They typically just have the price keep going up and up and up to where with Hubzu, you just bid. And if nobody bids, nothing happens. But with, it seems that the price goes up whether or not somebody bids on the place. To meet the minimum reserve, potentially. For example, we actually bought a house that was at I kept an eye on it. It went up to $100,000 and it said that it sold or it went up to $100,000 but several months later, I saw it on the market on MLS for $69,000.

Josh: Really?

Anca: And bought it for $68,000.

Brandon: That’s funny, so maybe they listed it on there—I’ve heard complaints about like certain auction sites bidding automatically that may not have actually been a bid. I don’t remember what auction sites they were but certain ones that are phantom bids that the company just does—I don’t know if that was the case or not but—

Anca: Yeah, that’s what seemed to be the case because I’ve been also keeping an eye on just to see how the system works. So I did buy a place on and that’s just—it just kept on bidding even in $100 increments. And then I ended up getting the place, but yeah.

Josh: Right on. Let’s jump lastly to the courthouse steps. You said you’ve purchased from the courthouse steps.

Anca: Yes. Well, courthouse steps as in the Judicial Sales Group.

Josh: Okay. Got it. And what was that like? Tell us the experience.

Anca: Okay, there’s just an office in Chicago and it’s the Judicial Sales Corporation and we went in—you had to go there 30 minutes ahead of time. Sign up. Have your cash. You have to have enough, at least 25% of the property, the max of what you’re willing to bid, and different properties came up for sale. And they started with the bank minimum bid. And people either bid and raised the price or if not, the bank got them. And with the property that we got, there were a couple of bidders so we went several thousand, maybe about $15,000 over the original bank asking price or minimum bid.

Josh: So when they say cash, do you literally have to show up with a pile of actual hard cash currency, 50-dollar bills, 100-dollar bills or is it like a cashier’s check?

Anca: It’s a cashier’s check.

Josh: Okay.

Anca: You might want to get different increments of checks just because if it’s 25%, you might want to get three or four $5,000 checks or something like that to give to them.

Josh: But you don’t have to go with a stack of 20s, right?

Anca: Don’t. Correct.

Josh: Okay, gotcha. All right. Now, on these properties, are you able to see them beforehand or not?

Anca: You’re not supposed.

Josh: Meaning that there’s ways—

Anca: But if there’s a way to get in and you happen to see it—I just call it doing your due diligence.

Brandon: So if the door is wide open and you’re walking by and you happen to look in the front door while it’s open, you can see some stuff about it. I gotcha. Okay. So what’s the danger—

Josh: I’m not going to comment at all. The danger is that you walk in a door—

Brandon: Not danger as in you’re walking in and getting shot by someone who’s still living in that property, which they’re usually vacant at that point. But what’s the danger of buying at an auction? What should people be worried about if they go to an auction to buy?

Anca: They might not even know—for example, Chicago is really strict in terms of bailage requirements, so the specific house we bought needed $8,000 worth of work in terms of the water line.

Brandon: The danger is definitely in not knowing what you’re going to get. I mean, there’s a lot of things that could be wrong, requirements that once you get in there, you have to bring it up to a certain code and you didn’t know—there can definitely be some risk there. But more risk, more reward, I guess.

Josh: Do you guys recommend auctions for new investors or is this something that probably should be left for those people who have been in the biz who kind of know a little better, who have the capacity to—yes, I’m spoon-feeding the answer to you—who would be smarter and know about the business before they start doing this?

Anca: Yeah, we were pretty much at like our 25th property so we are at 33-unit properties but almost 60 units now. So we were already 25 properties in by the time we started looking into auctions.

Brandon: Got it.

Anca: So I would not recommend it to a newbie just because there’s a lot of risk and if that’s your first deal and you get burned, you might not get a second deal.

Brandon: I’ve talked to investors before who do a lot of auctions and they kind of look at it as a numbers game in that they’re like, we know that one or two out of every ten are going to lose money. But we know the other ones are going to be better and so they risk knowing that a certain percentage will be bad but the good ones will make up for it. So if you’re brand new and you’re only going to buy one property—let’s say 20% are bad—you have a 20% chance of buying a property that’s going to sink you. There’s a risk there and people that can but a lot of properties can overcome that risk purely because of the volume that they buy in. So I don’t necessarily say don’t buy if you’re new, but be careful and make sure you do your due diligence and if you’re unsure where you don’t want to take that risk or you can’t afford to take the risk, then don’t do it.

So before we move on and go to the Fire Round, I wanted to ask you about—you’re currently in Romania but you mentioned earlier, before we got on the call, that you were currently working on making some offers and doing some stuff—that’s a long distance to be investing in real estate while you’re overseas. Do you have any tips for other people who might be—whether or not overseas or maybe just across the country—how do you invest in real estate when you’re at a long distance like that?

Anca: Well, we already have a team in place. So we have the same people that have been doing the rehabs, that have been doing the flips, the flip to yourself, not actual flips, have been doing the property management. And my dad can handle that so it’s really not a problem. I would not buy something sight unseen but that’s just me. And I would really do a lot of research before buying something across the country. Since I’ve been here, we have closed on two duplexes.

Josh: Nice.

Anca: Even if I wasn’t in the States—we had already seen the places—we were under contract.

Brandon: Cool. Congratulations.

Anca: Thanks.

Josh: Nice. That’s great. And good advice, by the way. Sight unseen is definitely dangerous and I think when you’re new, it’s probably a bad idea and as you get smarter, it obviously makes more sense.

Anca: And if you’re willing to spend $10, $20, $30, $150,000 on a place, you should be willing to spend a couple hundred bucks on a plane ticket to check out the place and the area.

Brandon: That is true.

Josh: Very good advice. That’s a tweetable topic.

Brandon: That is. I like that. All right, so official last question before the Fire Round—what are your future plans? Where do you see yourself going in the future with your investing?

Anca: I would like to get to the point where I’m investing in apartment complexes and commercial buildings. So I’m slowly trying to grow to get the business to the point where it’s not that big of a deal to start buying a 50-unit versus a 6-unit.

Josh: Cool. All right. Awesome, awesome. Hey listen, it’s great. Seems like you have a good strategy. You’ve come a long way and congratulations on all the success. Why don’t we move forward to the Fire Round and we can kind of dig in a little bit deeper and ask some questions?

So, it’s time for the Fire Round.

Brandon: All right. Question #1 of the Fire Round is, I’m going to—let’s see, where is it? I just saw it. Oh yeah—“I just passed my real estate license exam. What’s my next step? I’m an investor. I just passed my license. What’s my next step? What should I do with my license now that I have it?”

Anca: You need to find a company to work for. Ideally, you would look for a real estate company that has other real estate agents that are investors. I just used my aunt because she had a company. So that’s kind of the route I went.

Brandon: Okay. I like that tip, though—looking for a company that has other people that are investors in that company. I think that’s very, very smart. Nobody’s ever said that, I think, on the show.

Josh: We haven’t heard that. Yeah, I think if your focus is going to be that, then you definitely want to do that. There’s a whole lot of brokerages that know nothing. I mean, the brokers don’t know anything. The agents know nothing. You want to be around people who know what they’re doing as it pertains to investors. So great advice.

Anca: Just as a tip—just because you have your license doesn’t mean that you cannot give the commission away. It might be helpful to still give the commission to the selling agent even though you could get the commission. In the long run, it might be worth it to give it away so you can have the place.

Josh: I love that.

Brandon: I almost feel like getting my license just for that reason. Just for that alone, is being able to do that. I think that’s great. Okay, next question, Josh.

Josh: Next question—“I’m looking to finance my first residential property. The owner is just going to sell me at $35,000 if I can come up with the financing. What’s the best way to finance rental properties?” So forget the numbers—what’s the best way to finance rental properties?

Anca: If they have good credit and don’t have any loans, I would say just go to a regular bank. But otherwise, if you have four loans or more, you should just get a commercial loan on it. That being said, $35,000 is kind of low to get a commercial loan.

Josh: Yeah, you may have a hard time with a loan that small, correct?

Brandon: So maybe I can ask, what would you do in that case? $35,000. If you didn’t have the cash. Do you have any good ideas?

Anca: I might try to ask some friends or family, potentially, to begin with, if I didn’t have any cash and I didn’t have good credit. But what I would do nowadays is just get a couple of properties and get a book loan on it.

Brandon: Okay. And that’s one of the benefits of a commercial loan, too, is that they can be a little more creative with that idea. Let’s package two or three properties together and loan on that. I mean, commercial is just so much more creative than residential loan. So another benefit.

Next question is, “Do I have to have an LLC in order to get financing through a hard money lender or a private lender? Do I have to have an LLC?”

Anca: You don’t have to have an LLC. But it would be helpful just in general, for your protection. That being said, a hard money lender wouldn’t necessarily care if it wasn’t an LLC because you would still be held responsible for the loan anyway.

Brandon: Sure. And I know a lot of banks will give you a hard time—a lot of banks won’t lend to you if you’re trying to buy it with an LLC. Hard money lenders generally are willing to do more LLC lending because like you said, they’re understanding you’re still responsible. They know how it works. They’re investors themselves. They get it. So yeah, I think your advice is spot on.

Josh: Right on.

Brandon: Cool. Next question. This is directly from the forum. I saw it today so I thought I’d ask you. “I made an offer on a four-plex. Now, how do I negotiate?” Do you have any good tips on negotiating on multi-family properties? Have you ever done any negotiation with them?

Anca: I typically just figure out what I want to pay for the property and kind of base my offer on that versus negotiating because sometimes, it’s listed for more than it’s worth. Sometimes, it’s listed for less. So you just have to figure out what the property is worth.

Brandon: That’s my strategy, too. I figure out what it’s worth and then offer that. They come back and they try to negotiate, and I’m like the worst negotiator because I’m like, no, I did my numbers. I already gave you my best number. That’s what I pay. It’s what it’s worth.

Josh: And does that work?

Brandon: It generally works well for me.

Josh: Well, there you go. You just negotiated. Congratulations.

Brandon: I guess that’s my negotiation, is take it or leave it. This is my best price. What do you want to do? Sounds like you’re kind of somewhere there, Anca. Cool. All right, let’s move onto our World Famous, Famous Four.

The Famous Four—these are questions we ask every one of our guests. So we’re going to throw them at you right now. #1, what is your favorite real estate related book?

Anca: I read, I listen to a lot of books. And I tried to think of a book that hasn’t been mentioned and that I think is pretty cool. And that is Arnold Schwarzenegger’s autobiography. It’s called Total Recall: My Unbelievably True Life Story.

Brandon: Very cool.

Anca: I don’t want to give too much away, but it does involve real estate.

Brandon: That’s what I heard—it does.

Anca: It’s a great book and I think whoever reads it will be inspired to do more.

Brandon: Cool. I’ll have to pick it up.

Josh: We’ve been trying to get Arnold for the podcast and hopefully, if anyone is listening and is connected to Arnold and wants to put a good word in, we would certainly love to have Arnold come in and talk about his real estate background because it sounds like that’s one of those things that he was into before he became huge. Anyways, cool story. But awesome. Good suggestion. Let’s go to business books. What’s your favorite business book?

Anca: Again, I’m trying to use one that hasn’t been said—it’s The Obstacle is the Way by Ryan Hill. It just talks about, in order to succeed, one needs to take action, to be persistent, to learn from their failures versus being defeated by it. So I think those are some pretty good rules of thumb for any real estate investor and entrepreneur to live by.

Brandon: Very cool. I like it.

Josh: Never heard of that one. That’s great. What about hobbies? What do you do for fun, Anca?

Anca: Real estate.

Brandon: And travelling the world.

Anca: Yeah. When I’m not focused on real estate, I do like spending time with my family, travelling, reading, learning, and drawing.

Josh: Cool. You should draw a picture of Brandon.

Brandon: You should draw a picture of me.

Anca: Okay.

Brandon: That’ll be a pretty awesome picture. I’ll tell ya. Random story about a picture of me. So I was in a play, like a community theater when I was a senior in high school and for this play, I was supposed to be the dead grandfather or something like that. Anyway, they took a picture of me and then they had like a painter—I think it was a computerized painting—of like a 4 foot by 4 foot picture of me, a portrait of me to put above the fireplace on this scene on the stage. Anyway, after the play was done, they gave me this gigantic poster of me, this big, huge, framed—so I took this in college and I would randomly go place it in the girls’ dorm room, like around my college, and just hang it on the wall. This 4 foot portrait of Brandon Turner. It’s pretty awesome. I think I still have it somewhere in my parents’ garage. I’ll try to find that. I don’t know, show it on BP. Anyway, moving on.

Anca: Was that your pick up strategy?

Brandon: That is how I got my wife. That is exactly right. I hung it in her room right above her bed so when she woke up in the middle of the night, it was there—no, I didn’t do that.

Anca: That’s not creepy at all.

Brandon: All right, moving on—you’ve got hobbies—my turn, right? Anca, what do you believe sets apart successful real estate investors from those who give up, fail, or never get started?

Anca: Setting goals, taking informed action, and being persistent.

Brandon: Three out of three. Perfect.

Josh: Perfect, perfect. Anca, where can people find out more about you?

Anca: On BiggerPockets and also on


Josh: All right, we’ll link to your profile in the Show Notes. That’s Anca, thank you so much for being on the show. We really appreciate it.

Anca: Thanks for having me, guys.

Brandon: All right, thank you.

Josh: All right, everybody. That was Anca Rader. Big thanks again for being on the show. We really appreciate it. If you’ve got questions for Anca, jump on the Show Notes at And be sure to leave a comment there because we will be picking two guest commenters and be giving away a copy of Brandon’s book to two people who will leave a comment on the Show Notes. So if you’re one of them, you might get a free book. Check it out. Get on there. Leave feedback. Leave comments. Ask questions. Whatever you want to do. And we appreciate you doing that. Brandon, you had something you wanted to add?

Brandon: No, I had an idea—

Josh: Congratulations.

Brandon: I know. You and I should take a motorcycle trip around Eastern Europe. Wouldn’t that be fun? Can we go like next week?

Josh: Can I get behind you?

Brandon: No—yeah. Have you guys seen that music video with Seth Rogen and James Franco on their motorcycle? It is the best music video you’ll ever see. It’s the funniest thing. I’ll put it in the Show Notes. Anyway, that will be you and me.

Josh: Excellent. I’ll drive.

Brandon: Yeah, you’ll be driving. All right, let’s get out of here. You want to take us out?

Josh: Yeah. All right, guys. Thanks for listening. Check out BiggerPockets at Jump in, get connected, get engaged, and we’ll see you next week on the show on BiggerPockets podcast. Check out our old episodes at All right, guys. Thanks for listening. I’m Josh Dorkin, signing off

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