BiggerPockets Podcast 133 with Jason Cohen Transcript

Link to show: BP Podcast 133: Scaling Your Business From Scratch to $50 Million in Assets with Jason Cohen

Josh: This is the BiggerPockets Podcast show #133

Jason: So we own and manage over $50,000,000 in real estate.

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

Brandon: Not much. What’s going on?

Josh: You know, viva bella, man. Life is good! Life is good.

Brandon: Viva bell—I don’t habla Español.

Josh: That would be Italian, or Español, I don’t know. Man, life is good. Things are going well. We’ve had an interesting week at work here.

Brandon: Sure.

Josh: Came under attack by some rogue overseas hackers trying to disable BiggerPockets, that was fun.

Brandon: So I woke up the other morning, I have key word alerts set for a lot of terms on BP and then I have subscribed to certain forums on BP and one of those I have set up so it sends me a text message so I notice when there’s a new message on the site, so anyway, I woke up with 700 text messages buzzing. I mean, my phone was just buzzing continuously for 3 hours and what it was was these spammers coming in and attacking the site trying to take it down and that was a fun wakeup call 700 text messages.

Josh: Yeah which led to a wakeup call for me and some of our other staff. So, yeah, that was fun, but we’ve handled it and anyway. Yeah, but things are good, man.

Brandon: What’s that thing Jordan said? Our buddy Jordan said you know you’ve made it to the big time when you get attacked by North Korea.

Josh: Yeah. There you go. I don’t know if it was exactly North Korea, but, you know. Anyway.

Brandon: Yeah, well, I wanted to say it because it sounds really cool. It sounds like you and I are Seth Rogan and James Franko.

Josh: Yeah, who are you, though?

Brandon: I’m clearly Seth Rogan. Clearly Seth Rogan. You are clearly, well, James Franko’s a better looking one than Seth Rogan so I don’t know.

Josh: Well, then that makes sense. That makes sense. Alright, anyway. We’ve got a cool show today. I’m pretty excited about it and definitely looking forward to digging into it. Before we get to today’s show why don’t we get to today’s—

Brandon and Josh: Quick Tip

Brandon: Today’s Quick Tip. Today’s show is one of the best shows, in my opinion, that we’ve ever recorded. I firmly believe that. I think you guys are going to love this. Just the idea of scaling your business from nothing to $50,000,000 I think it’s going to blow you guys out of the water so my Quick Tip for you today is: share this with one person that you think would enjoy this. Every single one of you know people that are into real estate, even just remotely kind of interested, I want to encourage you guys today if you enjoy this interview at all to send an email, send a tweet, send a Facebook message and say, “hey, I just listened to this podcast I think you’d like it,” just one person on your list. That’s my Quick Tip for today. Maybe we can get this thing viral.

Josh: Yeah, that’s be great.

Brandon: You guys can help us get there so alright.

Josh: Thank you. Excellent, and really, really quickly I just want to talk about the show. This show—

Brandon: No, that’s not allowed.

Josh: I want to talk about it.

Brandon: You can’t talk about the show on the show.

Josh: I want to talk about this show.

Brandon: That’s clearly not allowed.

Josh: Can you stop?

Brandon: That’s like dividing by zero.

Josh: You’re dividing by zero.

Brandon: Can you guys asked Siri what is zero divided by zero yet?

Josh: No.

Brandon: Have you done…? Where’s my—hold on.

Josh: Are you going to bust it out right now?

Brandon: I don’t know where my phone is. Dang it! Anyway.

Josh: Hold on. Do I need to do this?

Brandon: Yeah. Hold up to the mic and say, “what is zero divided by zero?”

Josh: What is zero divided by zero?

Siri: Imagine that you have zero cookies and you split them evenly among zero friends. How many cookies does each person get? See, it doesn’t make sense, and cookie monster is sad that there are no cookies and you are said that you have no friends.

Josh: Siri’s kind of got attitude problems.

Brandon: Yeah, Siri’s got a little attitude.

Josh: Alright.

Brandon: Okay, where were you?

Josh: Today’s show. We’ve got a show that’s, as Brandon said, it’s all about building up this big business from nothing. So those of you guys who think, “hey, this guy’s talking about $50,000,000 in real estate I can’t even imagine getting to $50,000 in real estate,” this show is actually for you so before you hang up and disappear and stop listening this show is for you. This show is also for the guy who’s got $25,000,000, $50,000,000, $100,000,000, but this is really a show for everybody so don’t get intimidated by the numbers. I definitely want you to pay attention. Alright guys let’s bring him on. Jason, welcome to the show, man! It’s great to have you here.

Jason: Thanks, Josh. I appreciate it. How you doing, Brandon?

Brandon: I am doing well. Today we’re doing something a little bit different in that Josh and I usually have some, you know, a pretty long list of questions we want to ask. Today, actually, my goal on this was specifically to ask as few questions as possible because you’re an intriguing guy. You’ve done a ton of stuff and I just want to see where the conversation goes so—

Josh: We’re completely unprepared for this show.

Brandon: Completely unprepared, but purposely so. I did it on purpose.

Josh: Yeah, it was completely intentional.

Brandon: Let’s wing it!

Josh: Let’s see how good we are. We could completely fall on our face.

Brandon: Alright. I want to know, first of all, what do you do? What’s your niche? What’s your strategy? What kind of investing do you do and then we’ll get into your history of how you go started.

Jason: So we’re a vertically integrated company so we own and manage multi-family properties. It started off with duplexes, triplexes that sort of thing and it’s built up now to communities. It started with just some minor new carpet, new paint type of improvements and now we’re doing major, major repositionings.

Josh: Nice.

Brandon: Okay, and how big are we talking? Like, you said communities, how many? Like what are we doing?

Jason: So the last one that we purchased it was a 148 unit community. The purchase price was $4,000,000 and we’re doing $3,000,000 of renovations.

Brandon: Wow.

Josh: Wow.

Brandon: I want to definitely dig into that later in the show.

Josh: Yeah, for sure.

Brandon: We’ll have to remember to come back to that, but that’s awesome.

Josh: I want to get right to the nitty gritty. So you said you started with 2 or 3 units and now you’re dealing with communities, how long have you been in the game?

Jason: So I’ve been in the game for 10 years. I bought my first property in December of ’05.

Josh: Okay. So December of ’05 you bought a what?

Jason: It was a 7 unit.

Josh: So you bought a 7 unit. How does one scale from a 7 unit to a 148 unit? So that’s what I want to talk about because I think our listeners, our viewers, our listeners, I think they’re particularly interested in stories of people who can scale something. You’re not a guy who came in and started with an inheritance of all these properties; you built up a business, you built up this company, and so it’s fascinating to hear about how somebody actually went about doing that. So you start with this 7 unit now you’re buying 150 units at a time for $4,000,000 with millions in renovations. How does one get there? Can we kind of quickly, not super quick, but can we kind of trace the pathway of how did you go, you know, tell us about the first couple deals you did and then how did you start to scale? What did it take to get there?

Jason: Well, the great thing about it is I had no clue from the day that I bought my 7 unit property. So if one of the listeners have a duplex or a triplex and they have no way of knowing how to get to the next level you were exactly where I was, and the long and short of it really is it’s just a matter of finding solutions to the problems that come up. I bought my first 7 unit property. Well, at that point if there was a plumbing leak what could I do? I didn’t have a plumber on staff, right? So I had to call a plumber. Well, that plumber came and he charged me $95 an hour and I really didn’t like that so that was a problem so I kind of had to figure out a solution for that so what was the solution? Well, the solution was if I buy more property, have more income coming in, I could support a staff. Maybe one day support a master plumber then I’ll never have to do that again, right? So that’s kind of the first problem so I was like, “well, okay, so let’s go buy some more”.

So, I looked to acquire additional properties and it kind of steam rolled from there. Every additional asset to my portfolio was a head ache, I mean, so there was a problem associated with it. So to answer your question briefly it’s just a matter of what do you want? For me it was to build a large operation to employ a lot of people. That was kind of my initial goal just to see how big we could get it. As we started buying more property I could afford having my first employee, but my first employee he didn’t have a car so I had to drive 30 minutes to pick him up in the morning and 30 minutes back and the only thing he could do was paint.

Josh: So you were the employee, by the way, just so you know.

Jason: Absolutely. I’ve hung out many windows painting the awnings, I’ve done a little bit of it all and basically after that employee I figured, okay, I don’t want to have to drive 30 minutes, that was my next problem, right? So I need to find somebody with a car. So, I found somebody with a car the only problem was he was driving under a suspended license, right? So he was driving under a suspended license so I had to graduate from there. I figured I needed more rental income so I bought additional property and then I graduated to a guy who had a car and he could get to work.

Josh: Stop it!

Jason: Believe it or not it happened. It happened and just the craziest thing would happen. We would get a call here or there, it wasn’t that often. It was maybe once a month or so, but for example I got a call from a tenant and she said, “I had a work order somebody to come and fix a,” I can’t remember what the work order was, but she said, “and my two laptops are gone,” and we call the guy and we say, “hey, you had a work order for this unit, right? Funny thing is immediately after you left that unit they’re missing their laptop,” so a couple things started to disappear and I realized, okay, I had to move on from there. Therefore, that was just the other headache, I graduated from there.

Bought some more property and from there it was just running more efficiently and really I think that’s kind of one of the things that projects and makes us successful. It’s when you find a problem you create a system to fix it, and I’m not talking about a system that’s you internally saying, “you know what? I’m not going to do that again,” it’s a system. It’s a checklist. It’s a way to go from A to B without correcting it and without letting that situation happen again and if you can do that for a majority of the problems that you have there’s really only one way to go from there.

Brandon: That’s awesome. There’s so much good stuff in that that I want to dive into. I want to start with this idea of facing problems and overcoming them. So, the best book I’ve read, and this is the best fiction book I’ve read in the past year, was The Martian. Have you guys read that?

Jason: I haven’t, no.

Josh: I have not.

Brandon: Fantastic book called The Martian, the movie coming out with Matt Damon in the fall, but I mean excellent book. Anyway the whole entire book is about this guy who’s stuck on Mars and has, like, one massive problem after another after another and the whole entire book is just him solving these problems and when I was reading it I just thought, “this is exactly like an analogy for the life of a real estate investor,” because that’s all it is. It’s putting out fires and solving problems and then creating systems so those problems don’t happen again. Exactly what you were just saying.

Jason: That’s absolutely right.

Brandon: I love that. I love it. Systems have been such a big part of my life the last few months just because everybody keeps talking about them and I’m like, “man, I need more systems,” so in my own investing what I’m looking to do is exactly what you were looking to do which is why I was excited to talk to you today. I want to scale up in terms of hiring people. I finally came to that conclusion about a month ago. I’m like, “I’m tired of paying plumbers $100 an hour to come fix a stupid leak,” I mean, a guy working for $15 an hour right now could do the same thing I just can’t find that guy to come work for two hours.

Jason: That’s exactly right.

Brandon: Yeah, so how do I get to that point? I mean, maybe I can get some free consulting here, how do I get—

Josh: Brandon, this show is about Jason it’s not about you.

Brandon: It’s always about me.

Jason: Pro bono!

Brandon: So how do I get that first guy? How do I scale to get the right first hire or do I have to make the same mistakes you did?

Jason: Well, it’s interesting. I mean, talking to you right before we started the podcast you had mentioned that you have a 24 unit property and to me that’s incredibly impressive seeing as how you have another full-time job.

Brandon: Thanks.

Jason: The rule of thumb that I kind of always went by, or that I was taught, was if you have a full-time job you never want to own more than about 12 or 13 units or so. That’s about the max and if you are going to go into it you need to go full-time into it and get quickly up to about 80 or 90 units at a minimum and that’s kind of what the rule of thumb is, like I said, that I’ve been taught and it holds true today having gone through the experience myself. You know, to have 24 units and operate 24 units and have another full-time job, I mean, that is incredible and you’re juggling a tremendous amount right now.

Brandon: My wife handles a lot of that. She quit her job to handle a lot of that so that helps definitely having that.

Josh: He’s not that impressive.

Brandon: I’m not that impressive. No, but we’re up to 42 right now and that’s why we’re at that awkward space like we have the 24 unit and then we have a bunch of multis, like, small ones. It’s at that awkward place where it’s not big enough to—

Jason: It is. It’s at the toughest place.

Brandon: Yeah, it’s not big enough to hire a full-time crew.

Jason: Absolutely.

Josh: But at 42 it’s probably enough to bring on that full-time handy guy or that kind of, you know.

Brandon: That’s what—I looked at my expense numbers the other day and I said that we’re spending, what was it? $2,200 a month on average for maintenance. That’s like normal maintenance. I’m like, even if it’s not a full-time could I, and maybe that’s a question I can ask you, can I start with a 30 hour a week or 20 hour a week employee?

Jason: You absolutely can but, again, you’re going to kind of get what you pay for. Like you said, with a 24 unit property 2 hours a week it doesn’t interest the maintenance guy, you know, he’s got papa bear over here that’s giving him the 40 hours every week and then he’s got Brandon that calls him once in a blue moon to come and you know you’re just not priority for him.

Brandon: Yes.

Jason: That’s just the bottom line. I mean, who knows? Some people stumble upon just a phenomenal guy that’s just sort of there for them, but that’s a rarity so the answer to your question, and again, I say 80 units, again, it’s kind of a rule of thumb. If you happen to get 40 units and you buy it for the right price and it’s cash flowing in the right way, sure. Look at your numbers. Look at your I&E and if you’re able to afford the full-time guy I agree, you might be right there where you can afford him and absolutely. That’s kind of the way to do it, but to scale if I were you, if I were in your position, as many headaches as you may have at this moment I’d kind of put the pedal to the metal a bit and buy a few more so you can hire that staff.

Brandon: I love that. I’m taking this podcast as a sign.

Josh: Yeah, alright. I’m going to steal the show back to the people, not just to Brandon.

Brandon: Take it.

Josh: Really quickly, I&E you’re talking about income and expenses, correct?

Jason: Correct.

Josh: Just making sure.

Jason: Correct. Profit loss, P & L.

Brandon: And I did not know that so I’m glad you said that cause—

Jason: Sorry, I’ll clarify.

Brandon: No, please, I’m not very intelligent so.

Josh: Alright. So, again, there’s been a lot of gold already talked about here and I want to kind of circle back and get a few data points and kind of move from there.

Jason: Sure.

Josh: You talked about your goal being to build a large operation with lots of people; how many employees do you have today?

Jason: So right now we have just over 30 employees.

Brandon: Oof.

Josh: Okay, so 30 employees and how big is your business? I mean, if you’re willing to share that. How many properties do you have? How much in assets? I don’t know if you’re willing to share, but if you are.

Jason: Sure. So we own and manage over $50,000,000 in real estate. We have over 1,200 units.

Josh: Wow, okay.

Jason: So the beginning started with, like the mentioned, the duplexes and triplexes. I amassed a portfolio of about 700 units, but it was comprised of about 75 different properties. In the last 12 months we’ve acquired an additional 450-500 units buying communities, buying 100 unit communities, 130 unit, 150 unit, that type of scale.

Josh: Got it. Okay.

Jason: That’s where the trajectory is headed.

Josh: See, I mean, you’ve got a relatively small business going there, I mean, it’s not that impressive and I don’t know why we have you on the show.

Jason: Well, I’ll give it my best. I mean, give me a chance!

Brandon: And you’re not an older guy, I mean, you’re a younger guy, right? Do you mind me asking how old you are?

Jason: 34.

Brandon: Yeah, so, I mean, that’s impressive.

Josh: That’s ridiculous. It’s not impressive.

Jason: I appreciate that.

Josh: It’s ludicrous. Now, this is ludicrous in a good way. It’s very impressive, I kid.

Jason: Well, thank you. Thank you, Josh.

Josh: So let’s kind of step back again cause that’s crazy. You talked about systems, clearly to manage 1,200 units you’ve gotta have systems and we throw that word around a lot, you know, we really, really throw it around a lot and I just want to simplify it really quickly for the folks who just don’t get it and I think you talked about it enough, but let’s dig a tiny bit more. So by system you mean finding a way to take something that I do on a regular basis, or something that I’m trying to avoid doing, problems, mistakes, or things that happen regularly and putting pen to paper, putting a checklist, putting an operations book to kind of run your company that you can bring other people in, they can read it, they can take over from you, and it helps you scale. Is that kind of what we’re talking about here?

Jason: I mean, that’s exactly right. I always say if you want it you’re going to find a solution and if you don’t want it as much you’re going to find an excuse. There’s really a solution to every problem and the solution can be extremely fundamental. It could be as simple as a Word document with a checklist, you know, step one, step two, step three, step four, and you can’t go to step four without doing step three, you know?

Josh: Yeah.

Jason: It’s really as simple as that and then once you kind of get those basics, you know, once you kind of learn those fundamentals then yeah, your systems can get a little bit more advanced. Heck, once you start buying more assets and it starts generating additional income you can afford systems that people, you know, the IT guys, the guys much smarter than me, have created to run things even more efficiently and you can utilize those systems and just get bigger and better systems. So, you know, it’s really, in all honesty, it’s a mindset and I wanted this. I wanted it and I wanted to grow. I wanted to grow and I want to grow even larger and I think that’s what it really boils down to. I’m not a smart guy. You say it’s incredible and all that, and I appreciate it, I appreciate that tremendously and thank you, but at the same time I’m not the smart guy. I mean, I’ll tell you how much in assets I have, but I’m not going to tell you my SAT score because it’s pretty embarrassing.

Josh: Well, I think that’ll give people hope, though, hearing about your 600 SAT score.

Jason: Absolutely. That’s the bottom line. Initially it’s as simple as creating a checklist and that’s what we did and then from there we’ve acquired additional systems. I’m happy to elaborate on that if you want to get into it.

Josh: No, I think that’s enough. I think that’ll give people an idea of generally what we’re talking about. Alright, so—

Brandon: Can I jump in real quick before we move on from systems?

Josh: Yeah, whatever. I was going somewhere, but—

Brandon: But we’re winging it, Josh! C’mon.

Josh: Do what you’ve gotta do.

Brandon: No, I was going to write a blog post this week, my next BiggerPockets blog post which will be out by the time this interview comes out, but the title was going to be If You’re Unhappy Your Systems are Broke or something along that line which now I guess I have to do that title because I just said it. No, like, the idea of anytime in my life that something’s not working right and I’m upset or some things are going slow or whatever like I’m, for example, yesterday for two hours I spent painting the front of a rental property because my painter didn’t show up for 2 days in a row and it’s gotta be done by tomorrow so I went over there and painted for 2 hours with my wife. Now, I can give myself excuses all day long of why I don’t mind painting, I like painting, we got to hang out, but it was my anniversary and we spent 2 hours in the evening painting because my system is broken.

Josh: Happy anniversary?

Brandon: Thank you.

Jason: And Brandon don’t beat yourself up, you know, I mean, I really wouldn’t say that your system is necessarily broken because you had to do that. If anything I would say you’re learning the ropes and that’s fundamental step one in the business. I know what it takes to replace a toilet so the next time that a plumber walks in here and tells me it’s a 3 hour job I’m going to have him walk out just as quick as he came in because I’ve been there, I’ve done that, you know?

So you can’t tell—that’s really kind of the craziest thing, and it’s one of the things that I wanted to get into, about how you wear so many hats in this business and how every step that you take there’s somebody in there kind of gunning for you. What I mean by that is from the initial offer you’re negotiating with the seller on the contract, right? Then from the due diligence whether you hire an inspector he’s going to try to come in and get his cut. Then you’re dealing with the banks and they’re going to try to put in a point. Then you deal with the insurance guy, he’s going to start high and you’re going to negotiate him low. On and on and on and on.

For your listeners that are here studying up on this that’s just—they’re doing a tremendous deed by doing that. They’re saving themselves thousands. They’re saving themselves tremendous amount of mistakes, but the mistakes are coming let’s not kid ourselves. The mistakes are going to come but if you can minimize that, if you can limit that, if you can negotiate the bank down to just so much or this person to just so much then maybe you can keep your head above water long enough to build an operation where you have good quality people working for you providing great services to your residents and so forth.

Brandon: I love that.

Josh: Jason?

Jason: Yes?

Josh: I want to dig into you a little bit more because I love how transparent you are.

Jason: Sure.

Josh: I love how you talk about the mistakes that you’ve made and you still make and I think one of the hardest things for newer investors, especially the new guys, is this fear. It’s the fear to get started, the fear of making the mistakes. They want to know everything, they get paralyzed and you’re this guy who’s got this portfolio of $50,000,000 in real estate telling us that you’re still making mistakes. You know, a lot of them are probably pretty unavoidable because you’ve kind of gotta get your hands dirty. From a guy who’s doing pretty significant stuff tell these listeners, tell the new guys, who are frozen and paralyzed what’s your take on getting started and screwing up?

Jason: Good question. So I write a blog also on JasonCohenPittsburg.com and I have a top ten list and one of them is pull the trigger. Pull the trigger. Don’t be afraid to pull the trigger. I talk to just countless people that, “I want to get into real estate,” and I kind of get with them and I coach them through some things and a great deal passes along that I’m not interested in and I kind of hand it off to them and I talk to them next week and, “oh, yeah, I was going to do it but then I was scared about this or that,” at some point you have to pull the trigger.

Now, the fear. Fear I would say for the most part is associated with the unknown, right? So, if you want to get into this business it’s like my father always told me, you know, when I was getting out of college I didn’t know what the heck to do, right? I said, “maybe I’ll open up a franchise or something,” he says, “okay. Well, what type of franchise?” “I don’t know. Selling burgers or something,” he says, “well, you want to open up a franchise? You want to sell burgers? Go work at McDonald’s,” and I said, “what do you mean go work at McDonald’s? No, I’m going to start my own thing. That’s the whole purpose of this thing, right? I’m going to start my own thing. I’ll be my own boss,” and he says, “look. You want to own your own thing? You want to do your own thing? Go flip burgers, figure it out, and then start it,” and it just meant a tremendous amount to me as I kind of learned throughout the process exactly what he was meaning by that.

So how I transitioned that back to real estate is if you want to be in this business and you have a fear start off small. Start off with a triplex. Start off with a 4 unit building. Learn the ropes. Learn the fundamentals. You know, you’re going to get taken by a contractor.

Brandon: Yup.

Jason: You’re going to get taken by the bank. You’re going to get taken, and so on and so forth and it’s going to happen. Try to minimize it. Try to study up. I mean, do exactly what you’re listeners are doing right now which is studying up and once you learn those ropes jerk the hell out of it. Once you learn those ropes go pull the trigger on something. Just study up and know what those headaches are going to be as they come to you. You know, as you grow you’re going to have a guy that is going to take some things from your residents. Suddenly things are going to start disappearing from your tenant’s apartments. You’re going to have to deal with that guy who just disappears on you. You’re going to have to deal with the guy that steals your supplies. You’re going to have to deal with all of that, but as long as you can kind of foresee that, study up, you can do great. You start small. You start with 6 or 7 units and you can get to the thousand units. You absolutely can if that’s what you want.

Josh: Yeah. That’s awesome, man. Really, really great and I think as, you know, putting myself in the place of somebody who’s never done it, that’s scary. It’s scary, but hearing that other people who are successful continue to face these things and fight through them, you know, it’s not impossible and you just have to deal with it and I love it. I love it.

Jason: You know, like you said, it’s scary but what you’re doing now, I mean, I was reading you have what? Over 300,000 subscribers to BiggerPockets? Is that right or has that number gone up? I mean, that’s incredible!

Josh: Oh, yeah, that number’s gone up.

Jason: I mean, to start with the idea, “hey, let’s start a forum for real estate,” I mean, that’s quite random, you know, but it’s incredibly—

Josh: Well, everything we all do is scary.

Jason: Absolutely. So if you want it, and you guys clearly want it, this is what you end up with, something amazing.

Brandon: I think it’s more scary to think of the people who are living off of what? $870 or whatever from social security when they’re 60 years old and they have 20 years or 30 years of that just sitting in front of a TV. I mean, that scares me.

Jason: That scares the hell out of me.

Brandon: Yeah, that scares me.

Josh: Absolutely.

Brandon: I mean, you’re going to be scared about something so you might as well do it about something that you can make some income on.

Josh: Look at you all wise at your 30 years Brandon.

Jason: He is enlightening.

Josh: That’s amazing. Alright, man, let’s get back to your property. How do you find properties?

Jason: So, that’s actually what I think makes us really, really good. You know, I got a job out of college of buying properties in Philadelphia so they taught me how to buy real estate and that’s really the only thing I knew how to do and I knew how to do well. Then from there the management side I had to learn that on my own through the mistakes that I’ve made, but how do we find property? We do it by approaching the owners directly. So driving the streets finding the owners. The excuse of, “well, I can’t get ahold of them, I can’t find his phone number,” we found a solution to that so I’m pretty confident that we can find just about anyone and everyone and their phone number.

Josh: What’s my phone number?

Jason: Give me, I need 5 to 10 minutes and I’ll get it. I know your Skype for sure.

Josh: There you go.

Brandon: I fully believe that. I mean, in today’s information age you can find anything you want to find it you want to find it.

Jason: Absolutely.

Brandon: I’ve even heard stories, I mean, there’s a guy oh, what’s his name? I think it was Mike Nelson we interviewed here on the podcast who would send a cell phone to the PO Box of the owner and then as soon as he got that return receipt or whatever, like some kind of instant message, he would call the phone so that they would have to answer it because he’d know that they’d picked it up. I mean, it was so creative and random but what an interesting, like, if he wanted it bad enough he’d get it.

Jason: That’s exactly right, and Josh I’m glad you asked the question because one thing I kind of wanted to talk about is a lot of people ask that, I mean, in these 100, I don’t know how many, 130 podcasts that you’ve done I’m sure the question comes up a lot, you know, how do you find your property? Taking it back more at a fundamental level because I’m not the sharpest tool in the shed, right? So I like to keep it simple.

For you listeners out there: how to find real estate? Well, the answer is to do what is not done by the masses, right? So you’re not going to find it on LoopNet, okay? You’re not going to find it by calling your agent and asking them what’s on the multi-list, okay? So what you want to do is: how do I find an asset in a way that other people aren’t doing? Right? Other people are driving down to their realtor, finding their realtor who does the business, or talking to a friend or a buddy, but how many people are driving down a street looking at a property that is dilapidated and has tall grass or something, going up to the door, knocking on the door, leaving a business card or finding that person’s address through the tax accessor records sending them a letter? Not very many. Not very many so if you can find kind of that unique approach whatever it may be. I’ve heard a lot of variety. I know the Yellow sticky pad or note pad—

Brandon: Yellow Letters, yeah.

Jason: That’s a great method. If you can do something different it’s going to pay off because everybody else on LoopNet, I mean, how many thousands and thousands of eyes do you have on that property? What makes you feel so special that you’re going to find something in that that those thousands and thousands of eyes have not seen? You’ve just gotta be honest with yourself, you know, you’ve gotta look for another way.

Josh: So you’re saying you’ve gotta do the work, you’ve gotta hustle, you’ve gotta just get out there. I mean, a lot of people, I think, think there’s nothing in my area. I see nothing for sale, there’s nothing listed. I don’t know what to do this is so hard. You’re saying yeah, it’s hard. You’ve gotta do the work and if you do the work and you hustle you’re going to find the opportunities.

Jason: There’s no secret here. I mean, if you’re looking for the easy way out I’m sorry you might want to go back to another podcast because I’m not able to provide that information. It is not easy by any stretch. I think one of the greatest life lessons, and I owe a tremendous amount to the company that I got and actually my closest friend that got me the job, but one of the greatest life lessons that they taught me was basically in week two and I was out in Pittsburg they told me, “we want you to stop at Walnut Capital,” that was the company’s name, which it still is, and they owned thousands of units. Thousands of units and I’ve been at the business two weeks coming off of a bus boy temporary job at the Island. He says, “I want you to go in there and I want you to try to buy their properties,” and I said, “what are you talking about?” he says, “I want you to walk into that office, ask for the owner of the company and try to buy their properties,” I go, “you have got to be kidding me,” you know, I’m still learning the terms here, you know? Sure enough, I mean, I didn’t want to disappoint. I put on my suit and I walked in there. I had my little briefcase and I knocked on the door and asked to speak to the guy and they say, “well, hold on,” and I was like, well, okay I guess they’re going to go get me his secretary or something. Sure enough the guy walks down and I said, “hey, do you mind if I talk to you a little bit?” he said, “well, who the hell are you?” I said, “well, I represent a group of investors. They had seen your property and are interested in talking to you a little bit further about it. Would you mind sitting down with me and having a ten-minute conversation? I’m not going to occupy too much of your time”.

Sure enough he took me up there, his partner was there, we were at a round table and bottom line is within 10 to 20 minutes they kicked me out of there and I got nothing from it. So I’m sorry the story doesn’t end with a great ending, but the bottom line is kind of looking back on it I basically thought that if I could do that I could walk into anywhere and I could talk to anybody. Sure enough it went from there, and don’t get me wrong, I’ve been grabbed by the collar and escorted out of somebody’s office because I didn’t have my appointment lined up. I’ve been told some choice words here or there and I have built up a tough skin, but out of those 2,000 “no”s and 100 “get the hell out of here”s and 10 dubious situations I’ve gotten some “yes”s. I’ve got 1,200 units worth of “yes”s and that’s what it comes down to if you want to get to this level. If you’re looking for the 10, 20, 30 units there’s other ways to go about it. There’s other ways to achieve it and you don’t have to get the scrapes and bumps that I’ve gotten along the way, but if you want it find a way to get it.

Brandon: I love it.

Josh: That reminds me of Michael Jordan and his quotes about all the miss-shots. I just pulled up one of the ones, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I failed over, and over, and over again in my life and that’s why I succeed,” Michael Jordan, the greatest basketball player that ever lived. You’ve gotta fail to succeed.

Jason: You know, he obviously says it much more eloquently than I do.

Josh: You did alright.

Jason: You know, I’m not the—I’ve made a heck of a lot of mistakes and that’s the beauty of the forum here. People can come on here and learn about other people’s mistakes, but don’t think that you’re going to go through it unscathed. As long as you accept that these issues are going to come up, headaches are going to arise, there are going to be issues and obstacles. As long as you accept that I think you can minimize the level of fear.

Josh: Nice.

Brandon: I love that. One nice thing about multi-families too is, like you mentioned earlier, you’re not going to necessary find them on LoopNet, you’re not going to necessarily find them on the MLS or whatever because you want to work where people aren’t looking. The fun thing about multi-families is that because they’re owned by investors every one is for sale. It’s not like single-family homes where people, I mean, obviously some people will not sell no matter what, but generally speaking investors want to make money so there’s always a price. Everything you see that is a multi-family is for sale pretty much.

Jason: Yeah. Also, kind of an extremely helpful thing, is to learn your market. I mean, exactly what you said Brandon, everything’s for sale. It’s very interesting to really understand the dynamic. I mean, we started in Pittsburg, right? Pittsburg, Pennsylvania which is an incredible, incredible city and it’s a sleeper city I’ll tell you what. I mean, that city in 5 to 10 years it’s going to be much more incredible than it is already showing signs of being. To see the dynamic there and the conversations that you have with owners there, I mean, there you’re dealing with a lot of situations where the property owners are saying, listen, my great grandfather built this property with his bare hands and there’s no way in heck I’m selling. So there’s a different approach to that and I love Pittsburg. I mean, that’s where it all started for us and that’s a unique conversation to have where the dynamic here in Texas is somewhat shifted from that in the sense of we’re calling about a property, it’s an investor from California let’s say and they say, “well, what property?” and I say, “well, this one here on so and so address. It’s a 150 unit property you own there, you might want to look that one up,” but they say, “yeah, absolutely. Anything’s for sale. As long as you meet my number, you offer the rate that I’m looking for you can have it”.

So it’s a different approach, but learn your market and learn the fundamentals. Start small, learn the people who are the owners of the property. When I was doing the acquisition side of it I felt comfortable in saying that any area that I’m purchasing real estate in over a 4 unit property I know them. I know who the owner is. I’ve either been kicked out of his office or I know that his kids are taking over the property or I know that he’s going to sell in 2 or 3 years and I have it in my database. That’s where you want to get to because once you have that data you truly are an asset. You really become powerful and you’re able to cherry pick at that point. Okay, I’m going to dedicate my energy on this part of town with these particular people and you can kind of be dangerous at that point of time in regards to the amount of real estate you can acquire in a short period of time.

Josh: Nice.

Brandon: I love that. Alright, let me relate back what we just talked about now to something we talked about way earlier and that is the idea of systems with the idea of finding properties. My assumption is you’re not the one out there driving and knocking on the doors, is that right? Do you have people for that now?

Jason: Well, you know, the way that I always explain it out of our 30 employees I and one other guy I say are part of the expansion side of our business. Everybody else is part of the operational side. So, Quan, Quan Meldonado, who’s a subscriber and he’s very active on BiggerPockets, has done just an incredible job for our company and he is solely responsible for the acquisitions. A lot of the time we tag team the situation, you know, he’ll find a deal, he’ll get the information, maybe I’ll get involved at that point. Am I cold calling? Not as much as I would love to be doing, but yes I am involved in that side. I do negotiate, I am involved in the due diligence. I am very involved at this point in time and kind of trying to work towards pulling myself away from that, but that is where I’m at.

Josh: Okay, right on.

Brandon: Cause, you know, that is something, like, when I think of systems I think a lot of the idea of a property manager or somebody to do maintenance, but I struggle a lot with that idea of scaling and bringing on somebody to do acquisitions and that side. That’s a whole different skill set and thing that I don’t have systems for at all. I’m pretty good at other systems that I have in my business, some of them whether they’re broken or not, but that acquisition side is just tough but it seems like you have a pretty good system that is working for you.

Jason: Luckily for me that was the part that was taught to me. That was the company that joined that taught me how to do it, taught me how to find a deal, but everything else where you say you have the management systems and those types of things I knew nothing about it. That’s kind of where I started from scratch and made my mistakes and I wasn’t smart enough to do what your listeners are doing which is really, really dig deep in for that education and find that education so every one of them is in strides much smarter than me in that regard.

The route I took was the route of the mistakes. The stumbles, and fumbles, and bumbles, that’s the route I took and it hurt. It definitely hurt, but along the way good came from it and I think where we’re at right now is a really great position and we’re really positioned well to just expand aggressively. Like I mentioned, it took us 10 years or 9 years to get to about 700 units. In the last 12 months we’ve acquired about 450 so you can see the expansion and the pace of where we’re at today.

Brandon: Yeah, that’s awesome. That’s very—scaling like the hockey stick kind of thing.

Josh: And it’s a lot easier for somebody with an operation of 30 people to acquire 400 units in a year than it is a guy like Brandon who doesn’t have an infrastructure. No offense to Brandon, but you know, you’ve gotta build up to get to the point where you’ve got the infrastructure which will allow you to then accelerate how quickly you grow your portfolio.

Jason: That’s exactly right. In fact, the acquisition specialist, which is the title of the position that we call it, that was essentially the 30th position in our company in regards to the number on the payroll. That is purely an overhead play. I mean, from day one that guy is not making any money for us, you know, he’s costing us money. Until he finds a deal that’s cash flowing he hasn’t really added a dollar to the till, but once you build that infrastructure and have that cash flow coming in to the point where there’s a little bit of excess cash flow that you can hire these kind of reinvest in the company in this way those are the decisions; rather than take that money and put it in my pocket I want it to grow even larger, like I mentioned, build an operation. So instead of putting that money in my pocket I put it in an acquisition specialist and, like I said, I mean he’s been incredible and has really taken our company to the next level.

Brandon: I love that. Okay, let’s move over to financing. How do you finance $50,000,000 worth of real estate? Or however many loans you’ve got. I mean, are you doing partnerships? Are you doing bank loans? What does that look like?

Jason: Well, you know, initially—

Josh: He’s got $50,000,000 in his pocket, Brandon. C’mon.

Jason: That’s how it all started.

Brandon: Clearly.

Jason: I stumbled upon it and life’s been good.

Josh: Over the rainbow! Yes! A pot of gold.

Jason: Initially it was, and I was taught, how to buy real estate with no money down and you guys I’m sure have talked about that a tremendous amount of times, you know, contacting the property owner, convincing the property owner to hold a second mortgage, going to the bank and requesting a first mortgage. You know, right now the banks certainly frown on that a little bit more. I still believe it’s possible, but that’s how we initially started. The first property that we bought I left with the keys and a check for $8,000.

Brandon: Nice.

Jason: That, to me, was an eye opener. So that’s how it happened. I typically like to work with local banks when I’m buying my properties. The smaller banks, typically, they aren’t able to cherry pick like the big guys, right? I mean, I’m not going to go to a Chase bank or Bank of America and ask for a loan because their terms are not going to be as aggressive as the little guy. So you want to go to a local bank that will look at the piece of real estate and the way that I always explained it to the bank is, you know, listen, I’m not going to be knocking on your door every day of the week with a new deal. I got this deal, I got that deal on LoopNet, I got this deal, but when I find there’s going to be something special about it. It’s going to be substantially under market value or there’s going to be just a major upside potential so I look for a bank that, while they do look at me and yes I do have a reasonable credit score, you know, I’m not bankrupt, I have those fundamentals that you really have to have to be in this business, take them the deal, show them the deal, show them that it cash flows from day one and that’s how I started.

So, initially started with no money down and bought several properties that way. Also then got a line of credit from a bank and started using that as some of my equity. Then from there started every month when I was paying down my mortgage I was building that equity, right? So every month I was worth more. My net worth was going up. My cash flow was starting to, but again this, especially at the beginning, it’s a cash-poor equity-rich business, right? You never have the cash flow until you’re able to scale.

So once we got to that other level then I could start putting—instead of trying to find the deals that we had to convince the seller to hold a second mortgage cause we got kicked out of a lot of those offices when we made those offers, finding the deal that required $50,000 or $25,000 down years into it I was able to put that down. At that point one of the most valuable things is track record. Once you have that track record then you have a very close relationship with the banks. They know what you’re capable of doing and they believe in you. So at some point I really believe they’re investing more in you than in the real estate or the particular guarantee and again it all boils down to when you have that problem you find a solution. So if you get turned down by the first bank why don’t you pitch to 7 or 8 banks on your first deal?

So you get told your 4 or 5 “no”s and you figure out why they told you no and the answer could just be, “hey, we’re Bank of America and we can cherry pick and we’re not going to risk it on a first timer like you,” or the answer could be with a smaller bank, “yeah, sounds good. Makes sense. The numbers make sense. You have a good approach. Sure, we’ll start with a 7 unit with you and see where it goes from there”.

Josh: Hey, Jason, so you talked earlier about this 148 unit you picked up for $4,000,000, again, I think it was $3,000,000 in renovations, how did you finance that particular property? Was that from a bank loan? Did you put 25% down? And then how are you financing the repairs?

Jason: Great question. So, you know, my initial goal was to find somebody that had a car, right? I mean, that was my initial goal. As we’ve scaled my goal is essentially to try to get into the private equity realm and then maybe after that get into the institutional realm, right?

So, let’s start with the private equity which is obviously kind of my next goal in the process which we’ve been planting a lot of seeds with.

Josh: This podcast won’t hurt that, by the way.

Jason: Yeah, no, thank you. Thank you, again, for having us on there. So, if you private equity guys are out there please give me a call, but yeah. I mean, that’s kind of the next goal and ultimately from learning and studying up about what it is that they’re looking for really track record is kind of the number one thing, you know, track record. So what they want to see is that you’ve been able to pool other people’s money together to buy a project with their money, do some proper reporting to them, give them a positive return on their money and kind of go full circle on the deal. Buy the deal, reposition the deal, stabilize it for a year or two, divest it and that’s what they would like to see or at least that’s what I’m being told that they would like to see.

So that’s what we’re going for and initially the way to do it is you start with your family. You start with your cousins and your friends and it gets in some dangerous territory in the sense that you don’t want to ruin a relationship with your family cause Thanksgiving dinner is going to be a quiet one, you know? But if you have the track record, you have the confidence, yeah, you pull the trigger.

Josh: Alright, so let’s get back to the specifics on the 148 unit. Was this through a bank or was this through partners or was this through family?

Jason: So I have a GP, right? So the general partnership is made up of myself and another very, very close friend of our family a physician. So we then went out and got a couple of our family members to put in some money via the LP side, the limited partnership side, and there’s a lot more related to that, related to the disclosures and the paperwork that you have to do associated with that. You know, this is certainly something that we’re taking it very, very slowly and we’re kind of just learning the ropes cause this is the next area that we want to get into, but this deal was made up of a few people putting some money together, going to a local bank that we have a relationship with. Them funding 80%, us funding 20% and it’s off to the races from there and if we don’t disappoint and we prove ourselves and we do the proper reporting and we send them the evidence that we’re using their funds wisely and that the rents started at $500 a month and now they’re at $795 a month and this is what the product looked like before. We have to be able to tell that story. Not only to the bank and to my partners, but we have to prepare that story and package it next for the private equity people.

Josh: Sure.

Jason: That’s kind of where we’re at. I think that we’re at a really, really exciting point, at least in our organization, where a couple of these deals are probably going to come full circle in a year or two. Then hopefully that pace of what I mentioned before which is buying 450 units in 12 months is going to be compressed into maybe a couple months. Who knows? I think our experience and track record has proven that we’re on the right path.

Josh: Alright, cool. One more follow up on this. So presumably the bank is lending on the asset itself. $3,000,000 for repairs is that coming from the bank as well?

Jason: So we typically like to approach a bank and ask for about 80% LTC or loan to cost. So that’s 80% of the purchase price of the property and 80% of the renovation funds. So they’ll loan 80% of the $4,000,000, they’ll loan 80% of the $3,000,000 and we’ll come up with, in this particular situation I think it was $1,600,000.

Josh: Okay, got it. Cool. Okay, last question for you.

Jason: Sure.

Josh: You’re a guy who’s doing quite a bit of business and you’re on this little site called BiggerPockets with 320,000 plus members, yes more than 300,000.

Jason: And I’m happy to be here.

Josh: Why? Why does, I mean, a guy like you why would you—I mean, hopefully this is the right question to ask, but why do you join BiggerPockets?

Jason: A guy like me, I mean, I really don’t know what that means. Like I mentioned I’m not the sharpest tool in the shed. I’m not the smart guy. You know, when I was in college and I had to study for a test you always spotted those guys that it looks like they went to bed at 9 they woke up at 7 happy and ready to go and they aced their exam. With me I had to stay up til 3 o’clock in the morning, I barely made it in class hair all a mess and I had to fight for my B- you know? And that’s just the guy I am.

So being in a forum, and I learned a tremendous amount from it, don’t get me wrong, although I’ve made a ton of mistakes there’s another ton I haven’t made and I love to hear about other obstacles that people are going through and the position that I got straight out of college was a mentor-mentoree set up the same way that it is for Quan and myself. I am his mentor, he is my mentoree and that is the set up that we have and it works just tremendously. I mean, where it’s gotten us in just the short period of time that he’s been with us is incredible.

So, I have spoken to a couple people that have reached out to me and I love sharing the knowledge and if I can save them from the major headaches and problems that I’ve come across I love to do it. I have to bring it up, Josh, in regards to how I ended up on this podcast here. We had a little gathering at my house and I’m sitting there and talking about this or that and somehow real estate came up and somebody spoke up and said, “hey, you know, how do I get into real estate?” and I said, “well, you know, there’s this phenomenal source that you should go on it’s BiggerPockets,” and in the background I hear my brother say, “hey! Is that Josh Dorkin’s BiggerPockets?” and I look back and I looked at this guy like, “how the hell? What do you know about Josh Dorkin?” and he’s like, “he’s on my phone! Look, he’s a contact on my phone! He’s my buddy!” and I’m like, “what do you mean he’s your buddy?” and he says, “yeah, we did a film together,” and I said, “listen, you know I’ve been in this business for 10 years now. You know over the last few years where we—you didn’t think it was important to mention that you happen to have worked closely and you’re buddies with a guy that runs one of the most rapidly growing real estate forums? You wouldn’t think to at least just mention that to me??” He says, “hold up. I’ll text him right now,” and I said, “you should have texted him 3 years ago!” you know?

Josh: So Johnny texted me and told me about you guys hanging out and we talked and he’s like, “you know, let’s see what we can do,” and yeah, man, it was—I didn’t think we’d talk about it here, but it’s a great site. Your brother, I love your brother, he’s a great guy. I’ve known him for 15, I don’t know man, 15 or 16 years. Back when, the people who know this story, I mean, you were flipping burgers at McDonald’s or thinking about it in order to get into the franchise business, I was doing some real crap stuff to learn the film business and I was working on every student film so I could learn how real films were made and ended up meeting your brother and we did some projects together and I love working with him.

Jason: Well, it was completely random. Up until a couple weeks ago we had no idea that he knew you and that I, well I don’t know you, but I feel as though I do listening to all the podcasts and being on BiggerPockets and it was random and it was hilarious. You know, I’m glad to be here. I really appreciate you guys letting me come on here and kind of bloviate for a little bit and thank you.

Josh: Oh, no.

Brandon: This is awesome.

Josh: It’s all good, man, it’s all good. Perfect. Well.

Brandon: That’s a good transition over to the world famous Fire Round

It’s Time for the Fire Round

Brandon: Alright, the Fire Round, these are questions that come directly from the BiggerPockets forums which we’ve talked about numerous times in this episode already, but people can get to that at BiggerPockets.com/forums. Go participate in the community there, but question number one, and you kind of already touched on this so I’m going to tweak the question, the question was: where is the best place to look for multi-family properties for sale? I’m going to tweak that and I’m going to say, and maybe it’s the same answer: where’s the best place to find small multi-families, for those people just looking for a duplex, triplex or fourplex, where’s the best place to find that?

Jason: My answer to that would be pounding the pavement. Walking down the street and looking for the property that looks a little off, has some tall grass, has some shingles falling off the roof, looks a little bit dilapidated and then grab that address and don’t stop til you find the property owner, call them, ask them to sell. Simple as that, and get ready for a lot of “no”s, but, again, there will be some “yes”s.

Josh: Fantastic. Alright. Looking to get into my first apartment acquisition, hopefully 5 to 10 units to start. What’s the best route for financing with a small down payment $10,000-$15,000 but very high credit score?

Jason: Okay, that’s exactly the next question I was going to ask is what is your credit score and what type of financial situation are you in? So if your credit score is good as long as the numbers make sense, and certainly you want to study up on that, you want to know how to run, how to underwrite a deal, you know, what to factor in. It’s not as simple as the rent and my maintenance costs and my taxes and my utilities. It’s not as simple as that, but once you really have a good bearing on that and there’s plenty of sources here on BiggerPockets that provides that information. Plenty of people offering formulas for free. Once you know that those numbers are right, your credit score is good, like I mentioned, go to a local bank. Nothing huge, don’t go to the big banks, don’t go to the big names, go to a local bank, ask to speak to their commercial department and pitch them the deal. Do that 5 or 6 times when you have the first deal under contract, and again, you’ll be told many “no”s but there will be a “yes”.

Josh: Awesome. That’s great.

Brandon: Love it. Yeah. So, what questions should I ask when interviewing a property management company?

Jason: Hm. Wow. Okay.

Brandon: And I know you manage your own, but if you were going to hire a property manager to go and look after some of your properties?

Jason: I would like to see their reporting. What type of reports do they produce on a monthly basis? What’s on the report? Kind of associated with that is what do they charge for it? Some charge for a leasing expense if they lease the apartment for you. Some charge a strict management fee, but are they going to charge anything above and beyond that? What does the management fee cover? It’s really just learning more on the financial side of it. Obviously I’m going to do my due diligence before I go to a management company and study up on what others have to say about them, what their track record is in the neighborhoods. I certainly don’t want a company that has their entire portfolio 30 miles away from me and now they’re interested in taking on this duplex 30 miles away from where their bread and butter is so there’s some other things involved there. Sorry, it’s not a simple, direct question but it’s a combination of that. Doing my due diligence on them and their reputation and seeing what their billing practices are.

Josh: Right on.

Brandon: Cool.

Josh: Okay, well follow up would be what should I know about building a successful property management business?

Jason: Hm. As long as you can minimize your errors. Keeping your errors to the minimum is the most important part. You’re going to have a lot of them, but if you can minimize them. So, again, it just comes to if you make a mistake create a system to where you can’t make that mistake again and that’s ultimately how you build a successful one. You’re expected to make mistakes. You’re expected to fail in some areas, but as long as you can correct it quickly and try to never repeat it again you’re only going to get better from there.

Josh: Right on.

Brandon: I love that. That perfectly sums up what I was saying earlier about the broken system, right? So if you make a mistake look at that as, “okay, how do I build a system that this mistake doesn’t happen again?” and I love that. You put that perfectly.

Jason: That’s exactly right.

Brandon: I love that.

Jason: Thank you.

Brandon: Cool. Alright, moving on. I guess it’s time for the famous—

Famous Four

Brandon: Alright, so the Famous Four these questions come, wait, no, these don’t come directly. These are the questions we ask every single week here on the show to every single guest. So you’ve probably heard them before but we’re going to ask them anyway. Number one: what is your favorite real estate book?

Jason: Favorite real estate book. Can I pick a newspaper?

Josh: Okay.

Brandon: Sure.

Jason: So I am a fan of the Business Journals or the Business Times, right? So in the markets that I’m in I have the Austin Business Journal coming to me, I have the Pittsburg Business Times coming to me. Shout out to those guys. They do an incredible job, and to me that is one of the best real estate books that I read on a weekly basis. It provides you leads, it tells you who’s going through some financial troubles, it’ll show judgements or bankruptcies, things of that nature. Might be some people you want to make a phone call to. It’ll show deals that have kind of transacted; that to me was more of a, “dammit, I missed that one,” type of thing but it’s a fun read. It also gives you knowledge about what’s going on in the market and that’s huge.

I mean, when you’re talking with a seller, you’re trying to negotiate with a seller and he can tell you, “hey, John Doe sold his property for twice as much as what you just offered,” “yes, but John Doe just fully renovated their property and bought it so and so long ago for this amount of price,” if you have that knowledge, that expertise, they’re more prone to listen to you. They’re more prone to take your deal seriously. So if you know the industry, you know the business, you can go talk to the players, you can talk to the bankers, you can talk to these other people much more intelligently and come across as somebody that they should invest with or somebody that should do business with you.

Josh: I love that. Business Journals, local Business Journals, are absolutely amazing resources for real estate investors and I don’t think anyone’s mentioned it in 130 plus shows so thank you.

Jason: Hey, I accomplished something today.

Josh: Hey, some value. Alright, how about business books? What’s your favorite business book?

Jason: You know, again, kind of keeping the theme of keeping it simple, fundamental, my favorite book, and I’m sure it’s probably been mentioned here before, is How To Win Friends And Influence People by Dale Carnegie. That book it has some extremely fundamental tips about how to negotiate, you know, something as simple as smiling, something as simple as eye contact, something as simple as repeating the person’s name, but it drives each one of those points home with some incredible statistics about how they can benefit you. It’s been an incredibly helpful book that has guided me throughout my entire career and yeah, I think that’s certainly a must read. That is the only book that is required reading for anybody that joins my team. I think it’s just a great place to start.

Brandon: Cool.

Josh: Solid. Alright, let’s get to my last question which is: what do you do for fun? I know your brother’s obsessed, absolutely obsessed, with Nine Inch Nails. Are you following them around the world like he likes to do?

Jason: He’s absolutely obsessed with Nine Inch Nails. He’s obsessed with soccer.

Josh: Soccer! Yeah.

Jason: Big Argentine fans.

Josh: Yes you are.

Jason: Suffered a ton of loss recently against Chile in the finals, but we’re over that. Unfortunately real estate kind of consumes me and I really don’t, I mean, I go out to the bars with my buddies here or there and they’re talking about stats and they’re talking about this guy rushed this many yards and I think he’s going to be this draft pick because he has this type of whatever and I’m unfortunately quiet during those conversations because I just can’t add any value there, but what I do for my hobbies, you know, it does shift from time to time. I really try to work out as much as I can. Unfortunately over the years that has dwindled down to very, very minimal, but lately it’s been spending time with friends and family. Usually it’s in or near the water whether it’s on a boat on the water or at the beach that’s really where I like to spend most of my free time.

Josh: Sounds good.

Brandon: Great, and I wanted to add another question here cause I wanted to ask it earlier and I forgot, before I get to the final question of the final four, so this is like 3.5.

Jason: Sure.

Brandon: What’s your goal? Like, where are you headed now?

Josh: That’s a good question.

Jason: So my goal, or the next step really for us, as a company is to team up with a private equity group. That’s our goal and let’s call it two goals, right? So that’s one of my priorities now is to work with a private equity group that wants to come in and sees our track record and is interested in doing business with us.

Secondly I would like to expand our third party management platform. So I would like to take on clients, so anybody out there in San Antonio, Austin, Pittsburg, Pennsylvania that is looking for management—

Josh: Wow, he’s plugging away.

Jason: Sorry, that’s just—

Josh: We’ll just cut it off that’s all. That’s fine.

Jason: Yeah, so we’d like to build that platform.

Brandon: Sure. Okay, cool. Okay, so my official last question: what do you believe sets apart the successful investors from those who give up, fail or never get started?

Jason: Again, I’m sure we touched on this a few times today, but I like to think I find more solutions than the other guy. You know, when he comes across a problem he’ll come across an excuse for why it can’t be done, or why it shouldn’t be done or why it’s impossible to get done or whatever the case may be. I try to find solutions. I am decisive, I believe, you know, I pull the trigger and I think ultimately that’s what it comes down to. Again, it’s not the smarts, it’s not just the genius ideas that we come up with. I don’t have them in this noggin of mine, but it’s the decisiveness mentality, the mindset.

Josh: Cool. Excellent. Listen, it’s been a pleasure. Before I let you know where can people find out more about you? Here’s your chance to plug!

Jason: Oh, okay, I get to do it again.

Josh: Plug away.

Jason: Well, I always have a passion for Pittsburg and I stay true to Pittsburg so you can find me on JasonCohenPittsburg. Anything really. I didn’t know there was a .info but there’s a .info. JasonCohenPittsburg.info, I’m on there, I’m on .com, .net, .biz, all of that so yeah, reach out to me, shoot me an email. I’m happy to talk about real estate at any time.

Josh: Excellent. Alright, Jason. Well, it’s been a pleasure.

Jason: Same here, Josh, thank you.

Josh: Thanks so much for sharing your story and we’ll see you around.

Jason: I appreciate it, thank you.

Brandon: Thank you. We’ll see you around.

Josh: Alright. Guys that was Jason Cohen here on the BiggerPockets podcast show 133. You can check out the show notes at BiggerPockets.com/show133 that’s BiggerPockets.com/show133.

Brandon: What is it?

Josh: Show 133.

Brandon: Wait, I didn’t hear you.

Josh: It is show 133.

Brandon: Okay.

Josh: Should I say it again?

Brandon: People can go there and ask questions.

Josh: Ask questions.

Brandon: And tell Jason you think he’s awesome because that was an incredible interview. It was awesome.

Josh: It was great.

Brandon: I say awesome a lot, but it deserves it.

Josh: That’s okay. People don’t mind, and the people that do, you know what? They’re going to send us angry emails because that’s what they do.

Brandon: Yep. That’s what they do.

Josh: Don’t know why, but they do it.

Brandon: They’re going to stop paying for this podcast if we’re not careful.

Josh: Oh, stop paying for the free podcast.

Brandon: Yep, they’re going to stop paying for the free podcast.

Josh: Yep, anyway. Guys, we have 60,000 listeners per show. It is amazing. We are so honored by that.

Brandon: Thank you.

Josh: It really, really means a lot. We charge you nothing for this thing. The only thing we ask is that you share it. You share it and you help us by telling us what you think of the show. That’s all we ask of you so get out there and share this! Link to the show on Twitter, on Facebook, on YouTube, BiggerPockets.com/show133. Jump on iTunes or Stitcher and leave us a review. If you don’t already subscribe to the BiggerPockets podcast hit subscribe on Stitcher, or iTunes or SoundCloud. These things will help us, they’ll help you get more of us and they’ll help other people learn about BiggerPockets podcasts so please help us out. We really appreciate it.

Brandon: We do ask one more thing.

Josh: Oh yeah? What do we ask?

Brandon: Like send chocolate chip cookies. Cause usually I ask that, but nobody ever sends them.

Josh: You can’t—

Brandon: They always send them to the office and then I’m not at the office.

Josh: But don’t send the homemade stuff.

Brandon: That’s true.

Josh: Not that I think you’re crazy stalkers sending poison chocolate chip cookies, but send packages chocolate chip cookies because it’s kind of weird when you get a plate with cookies on it with saran wrap on it.

Brandon: Mold growing…

Josh: Yeah, you know, I don’t know, a little shady, but Brandon’s address is beep.

Brandon: That was a terrible beep.

Josh: In case you didn’t get that.

Brandon: That was kind of pitchy.

Josh: You sound like Simon Cowell.

Brandon: That was pitchy. Isn’t that what’s his name? Randy always say that? It’s kinda pitchy.

Josh: Yeah, pitchy. Pitchy, bro. Anyway. That show’s off the air now, isn’t it?

Brandon: I think they’re in their final season, I don’t know. I haven’t watched it since season 1.

Josh: Kinda sad. Alright, guys, well listen, it’s been a pleasure. Listen up, jump on the forums, create an account, get involved, get active, network with guys like this. This guy’s on BiggerPockets, get out there and meet him, you know? Get out there. If you do one thing, one action thing, besides sharing the podcast introduce yourself to him, to somebody else, make that happen. Take the steps that you need to build your business, build your community, build your profile and make it happen. Thank you for listening. I’m Josh Dorkin signing off.

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Brandon: That’s our sound effects.

Jason: I like it.

Brandon: Alright.

Josh: Very professional.

Brandon: They’re amazing.

Jason: There was no button involved with that, right? I mean, you just came out with that, right? That was natural?

Brandon: Yeah, natural.

Josh: That’s amazing.