BiggerPockets Podcast 056 with Ankit Duggal Transcript

Link to show: BP Podcast 056: Syndicating Deals, Investing without Tenants, and Tax Liens with Ankit Duggal

Josh: This is the BiggerPockets podcast, show 56.

You’re listening to BiggerPockets radio, simplifying real estate for investors – large and small. If you’re here looking to learn about real estate investing without all the hype – you’re in a right place.

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Josh: What’s going on everybody? This is Josh Dorkin host of the BiggerPockets podcast. Here with delightful Brandon Turner.

Brandon: How’s it going Josh?

Josh: What’s up Brandon?

Brandon: Everything’s delightful.

Josh: It is isn’t it?

Brandon: It is. Things are always delightful here.

Josh: I always love when you’re in a good mood. Sometimes you get all grouchy.

Brandon: I’ve never not been in a good mood.

Josh: No, come on.

Brandon: We’re going to take a poll. Hands in the air listeners have you ever heard me in a bad mood? I don’t see any hands.

Things are good I’m getting my rental property little more stabilized, I’m getting them rented out finally. The dark days of December and January are ending.

Josh: Nice, that’s awesome. All’s well over there. We’re crushing it on the podcast, the site is really starting to pick up, we’re in the process of hiring folks for BP. Things are going well. 2014 is off to a pretty ok start.

Brandon: Nice, I agree.

Josh: Why don’t we jump into our quick tip and then we’ll start getting into the show here.

For today’s quick tip we are going to remind you if you’re not already doing so to please come and follow us on Facebook at facebook.com/biggerpockets. The reason to do so is not just to boost Brandon’s ego.

Brandon: Which it does, I do like likes.

Josh: We do like likes, in fact. But we share a lot of great content on Facebook, we put out best articles we share a lot of our best forum discussions, we do weekly polls to help you to think about and learn new strategies in ways of doing your real estate and ultimately the idea is to help you find better ways to help you grow your business and if you’re following us on Facebook that contacts will follow you in one of the big places that most of our users like to hangout. Please come and like us on Facebook – facebook.com/biggerpockets.

Brandon: Just to rub that point in a little bit – we’ve got averaging almost 20,000 people per show listening to the BiggerPockets podcast yet we only have 10,000 Facebook fans. By the end of the week I want to see 20,000 Facebook fans, that what I want to see.

Josh: Brandon just threw down the gauntlet. We know who you are – we know who our fans are. If you’re not yet a fan of us on Facebook Brandon is personally going to come and talk to you until you lose your mind.

Brandon: I was hoping wrestling match but whatever.

Josh: For today’s show we’ve got I think it’s yet again one of our best shows. We cover some amazing content here so let’s get into it.

Today’s show features Ankit Duggal. Ankit is the owner of RER LLC a real estate investment company based in New Jersey. Ankit has experience in everything from flipping to land lording to working with tax liens and we’re going to really dig in to all that stuff today. Ankit is also a writer on the BiggerPockets blog and provides a lot of really great content to us all. There’s a lot of really right end stuff in this show and some of the content that we’re going to cover is actually going to blow your mind – I know that Brandon and I were super excited afterwards and I learned a ton from this show. Definitely check it out if you’re a novice or experienced real estate investor you’re going to get something out of this.

Definitely listen through to the very end because there’s great information all the way along. Of course if you have any questions please jump to our show notes page at BiggerPockets.com/show56 and ask any questions you’ve got for Ankit in the notes below show notes and he’s going to be there to answer them and help you out. Definitely do that. With that let’s get this thing going. Ankit welcome to the show man, it’s great to have you.

Ankit: Thanks Josh, how are you today?

Josh: I’m fabulous, absolutely fabulous. You don’t care about Brandon thought…

Ankit: Not at all. Brandon how are you doing today?

Brandon: I am doing really well. Let’s jump into this and go back to the very beginning. How did you get first started with real estate?

Ankit: Actually my fist start in real estate was I started as a real estate agent. I became a sales person and started selling real estate. That stated this love and hate journey in the real estate asset class and today it’s a very loving relationship to this business but real estate started off as basically being a realtor and selling houses.

Josh: How much love, how much hate was there for being a realtor?

Ankit: I am not the best person to deal with when it comes to first time homebuyers so I’m really couldn’t love that part of the business at all and that’s how I got started. I guess that’s how a lot of people start. I was lucky enough pretty early when I was about 19, because I got my license when I was 18, I started working with investors to buy a flip projects. And that part of real estate I truly enjoyed investment side of the business – I truly had a lot of fun with it. I give a lot of props to people who are regular realtors in the work with the first time home buyers it’s a very difficult thing in the world.

Brandon: You said you were 18 when you got your license, 18-19 year old kid doing real estate as an agent. Did people take you seriously? I hear that question all the time.

Josh: That’s nice, Brandon.

Ankit: Thanks Brandon, I’m really mature 18 year old.

Josh: He just got on the show man so be cool.

Brandon: I hear that question all the item in the forums – I’m worried people won’t take me seriously in whatever I do in real-estate because I’m 18-19-20-21 years old. What are your thoughts?

Ankit: I think it’s a thought line to cross. I look very young so it was very difficult for me, I looked like 15 when I was 18. It came down eventually as you learn your markets and as you learn your products class you can speak intelligently somebody will look at you and say you actually know what you’re talking about and that’s been the biggest saving grace for young person. If you’re hungry enough and you learn more you have no problems competing.

Brandon: I think that’s wise right there. I also when I shave my beard l look like I’m 13 years old.

Ankit: That why you keep the beard going?

Brandon: That’s exactly why I keep the beard going because you don’t want to see me without that beard. You mentioned you started working with investors who were doing flips, is that when you got into flipping at all or was that later?

Ankit: I stated working with investors back in the good days of the market, the 03’s the 04’s when everything was working great and then I started flipping in ’08 when the market started going down. I’m a big history buff so I love reading about the RTC, the Resolution Trust Company so I kind of saw the same thing happen when ‘07’s market started collapsing and so I said “I want to start buying distressed properties.” At the end of 08 I started my first flip project and made my fist flip using that and we turned 30% profit off of it and that was one of my best flips still until today.

Brandon: That’s cool. You did while market was collapsing you still managed to succeed. Do you have any reason why?

Ankit: Bought it at a very very deep discount and even if the market’s going sideways up or down if you can buy it at the deep enough discount you can still make money.

Brandon: That is a great tip. I flipped also on the way the market was collapsing and that’s how I became a landlord is I just kept acquiring this flips that as a market dropped I kept losing my equity so I don’t know.

Ankit: You because a de facto landlord?

Brandon: Yes. But I don’t regret that it totally made me excited to be a landlord and I still have them today but that’s not easy, congratulations for you doing it.

Ankit: You’re excited to be a landlord? I love that Brandon.

Brandon: I was excited to be a landlord.

Josh: I have a feeling were going to get something else out of you.

Brandon: Let’s actually go to that, what happened next?

Ankit: Kept flipping, actually did fairly well in flipping in the course of two years we did about 40 somewhat projects in buying and flipping and little bit was timing a little bit was luck. A lot of was getting distressed it was getting liquidated in 09 10 and we got really good at syndicating deals and putting together capital from private equity guys. We did in our area about 20,000,000 in flips. On average we turned about 15% - 18% profit line on that whole portfolio but I stated realizing after flips were done you kept selling everything and you never built anything. The best part of the real estate business is this residual wealth gain. That wasn’t happening when you were flipping. I always wanted to get into buying and holding so I decided to become the landlord back in 11 early 12’s market. We moved the business model, let go quite a few people in our organization and stated becoming a landlord.

Josh: I’m fascinated I want to get into that but I’m curious that’s a substantial amount of real estate that you did in that short period. How did you finance that and you said you need a team to do that kind of business – how did that all come together?

Ankit: The first flip we ever did we syndicated the whole project and for the listeners out there who don’t know what syndicating is basically pooling a couple people together to buy the property. So we syndicated that first project and we really tried to do that first project very correctly as much as we could. Don’t get me wrong we had a lot of buffer in there and we screwed a lot in that first project – it’s part of life. We had a contractor that ditched us and our budget went over by 30,000 but at the end we still made a profit on that deal. But we bought it so safe that we still made 30% return overall. As we build that first track record down then we went back to the same people and then their friends and then started syndicating the second project and then as we flipped that and made a record it became a ball that we kept building off of. Eventually we came across one or two high net worth guys who were willing to invest a bigger chunk of capital and we got lucky in a sense we also signed deal with private equity group and they funded a big chunk of our investment capital for a portion of time. It was I believe a little bit of luck and a little but just working a lot really hard and making sure that the deals that we put together were the good deals.

Josh: You start out syndicating a real estate that’s something most people don’t really get into. I’ve got a couple of questions along those lines. First – You said “We” a couple of times – Who is we? And how is that you decided about doing it in that particular way and for those who are listening we haven’t done a ton of coverages on syndicates we kind of glossed over it, maybe we can chat about that a little bit.

Ankit: When I started the business back in 08 it stated actually in an office the size of the closet I would call it. Honestly I was my own assistant but I had a business partner at that time, Amir, me and him started doing the business together. He used to do a lot of mortgage work I used to do alto of realtor work and that’s how we met during undergrad and as we started this firm together while he was in law school and I was in MBA school and we started building that together and the reason we stated syndicating is in Jersey the cost of real estate is really high. Just to buy a distressed property you’re talking $250,000 and by the time you’re investing in another 50 or a 100 in it you’re 300. Only way we knew to make this work, we’re two young guys 23 to 25 between us two and we needed way to raise money and the only way we knew how to do that was to say “Ok, we have people who we know have 20,000 $30,000, why don’t we put all of them together - not knowing what we were doing was called syndication at that time. What we did is we stated staying more into the idea and really developed and lucky at that time Amir who was my partner he really knew the law side of the business really well so we started putting together offer agreements properly and we really started bulling the syndication platform and we brought our investors with us along the way and gave them a very high profit margin.

When we started we were giving away nearly 70 to 75% of our profits and that one deal we gave 80% of our profits to our first line of investors. Over time we started building our syndication and build that track record out and that’s what a lot of investors don’t understand when they start off. They’re like “I want to make that $40,000” and that’s great if you want to do that but if you want to build a syndication business where people trust you with money your first time investors who really take entrepreneurial risk with you should give them that 70 80% and as you get better overtime you can then scale back.

Brandon: That’s really good.

Ankit: That’s what allowed us to build a decent business because unlike everyone else was asking 40% or saying “You as investors are only making 30%” we were saying “We’re new show we’ll give you 70 or 80% of the profits.”

Josh: Where did you end up finding these people to come in on the deals with you?

Ankit: First round of deals that we had was trough connections of friends and family. We never tried to take in friend’s money of the family’s money in the first round. In one of the articles that I wrote I actually talked about the fist circle, we just tried going to the second circle because we didn’t feel comfortable having family money in there. A lot of it was initially our friends, our friends of friends who were working professionals, 30’s, early 35’s who had put aside that 30 or $40,000 into a CD and needed to do something with it instead of just putting it in for a one or two interest rate.

Brandon: Can you actually touch on that really quick? I remember that article you wrote that probably a year ago now, about the circles of people in your influence and I thought that was awesome and ill link to in in the show notes at biggerpockets.com/show56 but as a refresher can you kind of explain what you mean by circles?

Ankit: When you’re going to raise money syndication wise there are few reams of circles that I call them. The first lines of circles are basically your initial contacts, your family, your uncle - these are the people who know you really well as a person and they’ll be very comfortable giving you money to certain expend depending on how much they can afford. We love Josh we love Brandon were going to give them money and they’re going to invest in the first round of deals and they will trust you more so than the deal.

The second circle of people are their connections, their friends, their cousins and you’re basically going to them next and saying “I’ve done well for this first round, they trust me, they’re making the introduction, I’ve done a good deal also at this point and I want that second round of capital to come to me and to give me money.” That’s second circle. Third circle is your family offices your truly third party people, people who are professionally managing money or have money – a high net worth who don’t know you but by this point you’ve not build a track record and you have a team and you have some history and you go to these people as your third round and you’re then able to work with them on bigger projects. Which is where we are somewhat now in my business where I am at this point and started to do bigger deals. This is the circle that I go to.

Brandon: Can I talk a little bit about that because this is in issue – I’m in a first circle. A lot of people I’ve raised money from are the family and friends that’s pretty easy for me now I’ve got that down. How do I make that jump to the second circle? You can’t just go and put an ad in the paper, maybe you can now with the new laws but probably not. You can’t just go and advertise generally for this stuff so how do I make that jump from the first circle to the second circle?

Ankit: If you’re doing a good job on your money returns from your first circle then shouldn’t be no problems with them telling their friends about you. If your uncle made a 10% return a year with your 20% return you can just ask your uncle and say “Hey I’m trying to put this next deal together and do you know anybody in your circle who you think would be good in this type of investment, who would want to hear about this?” They’re going to be the people who talk to you. What happened with me at least people did fairly well in our first circle that they were already talking about our returns to their friends so I was getting a call before I even asked for that name or number.

Brandon: That’s cool.

Josh: That is great. Ankit you’ve got a masters at NYU on real estate?

Ankit: I’m going to have my masters at NYU, this is my last class and I’m finishing this year.

Josh: The syndication stuff is slightly more complicated than the average I’m going to go out and buy a property on my own. My question to you is – Those folks wo were thinking about this, there the debate the guru the non-guru, to go to BiggerPockets. I’m assuming that it’s well worth the price of admission to go ahead and get a masters in real estate finance? I’m assuming you’re just so far ahead of the game with your knowledge base after going through all that then you we’re previously. Is that correct?

Ankit: The masters in finance is amazing program is amazing I have nothing to say about that but really good things. In terms of raising money in syndication that’s been something that I really just picked up practicality more so than at the program. I picked up a lot of refinement at the program. I knew that the basic process of now setting up complicated waterfall structures, setting up different entities and how they link. Yes, that program thought me that level but that first baseline level of taking mom’s money or uncles money and his friends money and putting it together was something that I kind of figured out on my own with the partner at that point. Then we moved forward from there and yes the education is amazing program for that specifically but if you’re looking to do bigger deals and bigger structures yes you defiantly do need to get education of either an MBA in real estate or a masters in real estate.

Josh: In terms of the syndication stuff our intent was actually not to cover syndication as much as we are but it’s a fascinating topic so we’ve dug in here. You absolutely need a really good real estate attorney on your side in order to start getting that stuff together, yes?

Ankit: You need a couple of things on your team. You need a really good accountant, you need a really good real estate attorney and then you need a really good SSC attorney or somebody who understands private placements. Those are the three professionals if you want to do syndication well that you really need to get into your door. It also depends how much you’re raising, you don’t really need a PPM document for the first $500,000 deal. You’re putting together $1,000,000 plus deal then, yes, you need a private placement. You just need something to really make sure your investors understand what you’re doing and you need to make sure that your investors understand the risks you’re taking with them and that’s the biggest thing that comes out of it because nobody really reads that PPM.

Brandon: For those who don’t know – What is PPM?

Ankit: A private placement memorandum is this thick legally protected document that costs you 7 $10,000 to put together if not 15 and it basically is your business plan to say it in the simplest form. It’s the business plan associated with what you’re investing or what the deal is specifically, what are the risks and what is the next level that you want to put together – what are the returns, what are the risks?

Josh: Somebody who’s just kind of green and saying I’ve got no money and am going to syndicate a bunch of money from people who I know and their circles of circles. It’s not something that’s necessarily going to work unless you got a family attorney who handles that stuff. You need to put some money up front in order to start doing this stuff the right way legally, yeah?

Ankit: Yes. Definitely you need that especially if you’re going after the second circle or the third circle right off the bat. If you’re going to first circle they’ll understand that’s why the first circle is them trusting Josh more so than the deal and they understand that there is a risk element but in that circle you don’t need as much in terms of the legal protection. You need simpler documents which your real estate attorney can provide to you and you don’t necessarily need to spend that 7 10 $15,000 to get a PPM.

Josh: That is of course if your first circle of people are people who are likely to sue the crap out of you for not returning.

Ankit: Hopefully not. Hopefully Aunt Sally or Uncle Jack is not that type of a person.

Josh: I’m with you on that Ankit. I’m one of these people who I think I’m averse to asking friends and family for money. I’m really against it, I have an issue with it personally. Not because I don’t have trust in the things that I might be asking money for but just something that I wouldn’t want to personally do and I think your level of risk potentially increase with that. If you don’t return on that with your friends or family – paybacks a bitch.

Brandon: Awkward thanksgiving dinners.

Ankit: That’s an awkward family dinner moment that why I’ve never taken money from family. In investment as much as you can be great investor we all have to realize it’s not a 100% game. It’s still 75 or 80% success rate game and that’s if you’re good. You’re going to have some losses that’s part of the equation. If you think every deal you work on is going to be 100% lets kind of put that off the table and you don’t want to get that money into door especially if its family money and then you’re like “Oh crap this deal is not going to make money and now I have to face my uncle at a dinner and he’s going to look at me and say So you’re really smart don’t you think you are.”

Brandon: I borrowed on one of my earlier properties from my parents to do it. I shouldn’t say borrow it’s kind of a wrong way of thinking about it. I offered them the opportunity to invest with me and the investment turned out really good the things are great, they’re making monthly return but still every conversation we have its always “So when are we getting that paid back?” and am like “It’s coming” I never had a deadline on that.

Josh: That’s one of those things man that’s why you don’t get into bed with family it just gets complicated.

Ankit: Unless you can make sure family understands all the risks, that’s the only way.

Josh: But they’re still going to crawl up your back aren’t they?

Ankit: We’ll Josh I don’t know is that guilty person you’re thinking about? Some families are cool, I guess.

Josh: My family is cool but I know too many people who have families and it’s a problem.

Brandon: I think a lot of the question comes down to how much you really want it? If you’re just starting out and you really want to get started, you’ve done your education, is it worth the risk of awkward family conversations to create a business and financial future for yourself? If that’s all you’ve got is it worth it? It was for me, I chose it.

Ankit: That’s a personal question.

Josh: Brandon I want to come to your thanksgiving dinner man.

Brandon: My parents are different than my uncle. My parents, it’s almost like another circle. We are so close that it’s different than my uncle. I don’t think I would take money from my uncle because that would be awkward. I would take money from my uncle’s friend buy not from my uncle. Is that weird?

Josh: No. I think everybody’s got that.

Ankit: Yeah, everybody’s got that. You feel very comfortable with your own parents because they supported you for 16 to 18 years of your life. “Hey dad you love me so much can you give me some more money?”

Brandon: Exactly. We’re cool. Why don’t we move on from syndication and kind of go further down your line of your story. After that you said you got into land lording. How did that transpire?

Ankit: Back in early 11 I had an epiphany. I guess I can call it epiphany at this point where I started realizing that if you’re continuously selling your assets that you get its very difficult to build a long term business and everybody who hast been successful, I define success as people like Sam Zell, guys who built like major equity residential and how did they become what they are today because you can learn a lot from this types of people. A lot of them built based on having assets and controlling assets, it’s called AUM – assets under management. I started saying if I keep flipping every good deal that I buy then what I’m I going to be left with when they’re no more good deals to buy? At that point back in 11 I really stated shifting gear and started building more of a land lording business that’s when I basically sold the flip business out to private equity group.

My partner at that point left and then a private equity group basically started building that land lording business with me as one of the people in the business. We built the business out over the course of the year and a half to an approximately 30,000,000 under management and that was decent because I was managing a portion of that portfolio and that was about 30 units and that’s when I stated be coming to the point of my no toilets and you’ll read about that eventually as well and we’ll talk about it. When I got first I was so excited. I’ve got a multifamily property I own it and I got a call from tenant to fix the toilet. No problems I’ll go find a plumber. Then I got a call at midnight the heat’s out. Ok, no problems we’ll go find another person. Then as you started extrapolating that to bigger and bigger unit sizes and even though you put in support staff to help you it was still a very interesting process of being landlord.

Brandon: That’s exactly what you and I were talking about the BiggerPockets meetup we did in New York. That’s where I am right now I’ve got too many to functionally handle and I’m exactly where you are. What did you do next to solve that problem?

Ankit: What we did next to solve the problem was…

Josh: You flushed the tenants down the toilets.

Josh: Exactly I started flushing every tenant as I could down the toilet. No, no, not exactly. What I really started doing was I started putting in systems as much as I could - an automated call center who would take in the messages for emergency repairs. I got a few managers involved in the local markets who would get paid as soon as a cool me in the call center would call them next and not call me if it was an emergency and they knew what the emergency was, that I defined.

So I created this process and systems and them I worked with Buildium which I think is one of the venders you guys talked about for collecting rents with. I started building out a Buildium systems so that we could have property management more automated on the software side and have an admin. But even after all of that you still we’re getting bogged down in the day to day and that was something when I started looking in 13 this doesn’t make any sense I’m spending 90% of my time dealing with operational headaches and not really doing real estate anymore. That’s not how a business that can be built out any further and that’s when I started looking into this no toilets no tenants no headaches type of equation.

Josh: You’re saying despite all the systems, all the work that you did, you’re kind of a bright guy, despite all you put together and cobbled together you still had headaches?

Ankit: Yes, you still get headaches. Now you don’t necessarily have headaches of the tenants directly but now you have headaches of your team that you have to manage. If your team screws up on a billing or not filing an eviction on time now you’re really responsible for that. Or if a boiler goes and even though they call the plumber is supposed to go out and he doesn’t go until 9 o’clock in the morning guess who has to show up on courts and still deal with tenant’s oration or provide them a credit - that’s your job, still. At the end you still and this flow down effect of crap as I call it and the crap flows down to you. Yes, the cash flow is good it’s not like its amazing line of cash flow that you can retire off of it yet and the only way to do that in the multi family business is truly build out a much bigger portfolio.

I think Brandon you and me were talking about this when you had your 7 year plan and you had a certain amount of units that you wanted to achieve. There’s a tipping point where always going to be stuck trying to build a business and then running the operations of it and you still get clubbed down. With tenants the problem is everything has to happen today and everything is an emergency and everything tis a problem.

Josh: What happened, man, burn out hit you pretty fast and you decided you’re going to move into different direction. What was that final tipping point and then where did you end up going?

Ankit: The final tipping point was actually when I was out in Colorado, in your home state there Josh, and I was snowboarding for my vacation at Breckenridge and I was getting these calls and I’m like “I’m on vacation why am I still getting calls from my team to deal with the problem?” At that point I said “Ok I can never walk away from this business.” That’s what this means, I’m still involved and I still have to take care of the headaches until I can build this out to 200 unit or 500 unit business. I really said “Do I really want to do that? Or do I want to find something else that is a little more passive, a little less yield but I can live a life?” I am not most money driven guy but I’m more of a lifestyle driven guy. When I have enough money that I can have a good lifestyle and enjoy everything.

For me that was my tipping point and at that point by 13 I was really interested in tax liens and I already started researching them in 12. I kind of made my first test investment not knowing much and in 13 I really started getting heavily into tax liens and that’s when I built another business with one of my new partners for Inbar Group and we started buying tax liens. We really started investing in that asset class aggressively and still work forward with it.

Josh: What is a tax lien?

Ankit: A tax lien is simply when a home owner and investor, anybody who hasn’t paid their property taxes. I’m specifically talking in Jersey it’s different from state to state. Basically if they haven’t paid for their first year then it comes back and It gets sold in an auction and you can buy a tax lean and the reason it gets sold is the municipality still needs that money to take care of the schools, the snow cleaning, the garbage pickups so they will sell those for money to the third party investors how can then earn a yield. In new Jersey its 18%, that’s where it starts. I said “Hey that’s a great little business. What’s more of that that we can really look into?” that’s what a tax lean is.

Josh: Like a collection agency.

Ankit: Not exactly a collection agency. The way I look at it is you helping the municipality because some people let’s say fell on hard times and they’re not able to pay their taxes and the municipality couldn’t function without it especially in the urban market then you’re really giving them influx of cash that they need to take care of the schools, take care of the roads, take care of what needs to be taken care of for the public good, that’s number one. The number two is the municipality they take tax lean back they can actually foreclose and specifically in the New Jersey I’m speaking about within first 6 months of taking it back. But as an investors I can sit back and still listen of the story of the person and say “Ok you can’t pay right now let’s work out some kind of payment plan down the line for getting to the point of redemption.” That why I justify that we are not a collection company you’re actually trying to help out more of both the municipality and the property owner or the investor at that point.

Brandon: You said 18%. Where does that number come from? Who pays you that? Is that the municipality that pays that or is that the homeowner?

Ankit: In every state there is a statute. A statute provides the amount of interest that the homeowner would have to pay back to new investor who purchased the lien. The 18% is actually paid to you once the property owner pays all their taxes and they’ll say “Hey, I owe 10,000. Ok its 10,000 plus 18% on that.”

Brandon: When they pay it back that’s when you get your 18%?

Ankit: Yes.

Brandon: And if they don’t pay it back then what happens?

Ankit: Then in every state you’re able to start a foreclosure process and take over the property.

Josh: Let’s talk about an example. Somebody owes $10,000 in back taxes, they don’t pay so the municipality issues this tax lien offering 18% interest on top. You come into the auction and you buy the lean and say you get it, what does it cost you to buy a $10,000 back tax lean?

Ankit: $10,000 lien comes out, the city will then advertise it in an newspaper or in one of the websites that are on the open market, the actual people who are interested in it can actually learn about it and In this area its about 4 weeks before any auction has to be advertised. If an investor wants to find out what the leans are they can either look a newspaper for your county or you can actually go on and buy the lists from the websites that are out there in the open market. Once it comes out then you show up at the auction with a lot of other people potentially and you’re going to buy this $10,000 lien. The way it starts off is it starts off at 18 and you’re not bidding up the lien but you’re bidding down the interest. To buy a lien that nobody truly competes against you, you buy it at 18 and you pay a $100 for the transfer and the recording fees and that’s your cost to buy, specifically.

Brandon: You say I will pay 18%, Josh says ill pay 16% and I say “I’ll do 10.” Nobody else bids lower and then I get it for 10%?

Ankit: Then you get it for 10%, exactly.

Josh: Say he gets it for 10, its $10,000 is he paying $10,000 to the municipality?

Ankit: To the municipality at the close of that auction.

Josh: He pays 10K, he doesn’t play the interest on top of it?

Ankit: No. Then he gets the right to continue paying the new taxes that come up on the property at 18% without any competition.

Josh: Brandon’s got this lien at 10%. Brandon bought for $10,000, that $10,000 goes to the municipality that paid the back taxes.

Ankit: That’s correct.

Josh: Going forward, who pays the taxes going forward? Is Brandon now responsible or is that the owner?

Ankit: Owner has to pay the next quarter tax bill, the next quarters tax bill comes out the owner has 10 days up to 15 days to pay the bill. If they don’t pay the bill than Brandon as owning the lean in the certificate can say “Ok, the next bill is $2000 I’ll put another 2000 but my 2000 now is going to earn 18%.” So your first $10,000 are earning 10% and now your next $2000 are earning 18%. If the homeowner actually does want to pay out the whole bill that’s when you get redeem and that’s the way you make money in this business is that if you keep buying more and more leans you can buy a lean at 5% at the auction and still end up with double digit return down the line.

Brandon: Because of the future ones.

Ankit: Because of the future subs.

Brandon: That’s what your post was last week about why do people by 0% tax liens, that’s why.

Ankit: Exactly.

Brandon: I didn’t fully understand when I read it because I don’t understand tax liens very well so now it makes perfect sense.

Josh: I bought this tax lean that cost me 10k with the 10% and he’s got this 10% lien, does the homeowner pay Brandon in full or can you create a payment plan, how does all that work?

Ankit: That all depends on your state and what your state allows to do. In certain states like New York or Connecticut you’re able to actually create a payment plan, in my state you’re not. If the homeowner wants to pay out the lien he has to pay off everything – the $10,000 plus the 10% owed to Brandon.

Josh: You’ve been doing this for a little while, my question goes to what percentage at least in your experience of those end up getting paid versus not getting paid. How long does it typically take to collect payment?

Ankit: The industry average, and you can look up at national taxing association, but the industry average is about 95 to 97% liens get redeemed. That means they get paid back to you.

Brandon: Really? I did not expect that. I was thinking you’re going to say something like 15% or so.

Ankit: Nobody wants to lose their house for a tax lien. Especially the taxes the usually the lien is typically a basis of 30% of distress value of a property. That’s your exposure. Nobody’s going to give out 70% worth of equity in a property and no bank is going to let you take a property at a 30% structure either. That’s why 95 to 97% of the time these liens get redeemed and you get paid back your money. The question is how long does it take? That a state by state question. In certain states where they have what’s called a shorted redemption period like a Texas or another location where then within the 6 months they have to pay you back. In my state where I invest there’s a longer redemption period, up to 2 years.

Brandon: What do you mean by that?

Ankit: A redemption period is basically you sold the taxes at the auction Brandon bought it. Now Brandon obviously is not going to sit and wait forever to get his money back. You need some kind of timeline. The way the statute set it up is that the timeline is this redemption period and every state gives a homeowner a certain amount of time to say “Get the money together, get the interest together and pay off this investor or this investor can now start the foreclosure process.”

Brandon: I see.

Josh: You had said that the banks don’t want to lose the property over unpaid taxes and I get hat. Does the bank ever come in and help out the homeowner and say “Listen Brandon you owe 10k, were going to issue you some kind of loan on that 10k.” How does that end up benefiting anybody? I can see the banks interest in not wanting to lose a property over $10,000 tax bill so how do they come into play?

Ankit: Every mortgage note allows the bank to have a right to preserve its interest. This interest is the property. They’ll usually have a servicer a guy who kind of takes the payments or handles your foreclosure process call the county and say “Hey Is this property delinquent on taxes?” If it is then they’ll just pay it in the sense they’ll call in and say “What’s a delinquent?” The game basically is, it’s really simple, banks are so embed into this foreclosures right now especially in certain markets that they don’t have the time to normally follow up. They won’t pay the bill every quarter and be they’ll usually call once a year and say “What’s due on it and we’ll just pay it.” And they’ll pay it on that point to control their interest, that’s number one.

Or number two happens is bank is actually going to foreclosure themselves. They’re taking this property to the sharers auction and once the property is at the sharers block and let’s say either somebody buys it or nobody buys it and the bank takes it back, than the bank has to actually pay of the taxes first. The tax liens are the greatest thing about this investment that I like about it was its very high in priority. You get paid before anybody in the line of payments and they have to pay you off before they can transfer seller – do anything to the property.

Brandon: That brings up couple questions that I actually want to touch on. You said the number 18%. Let’s say you get 18% tax lien on the property, nobody else bid and let’s say you got 18%. Does that mean 18% annually or does that mean you just get 18% on that investment? If you get paid in 6 months you actually get paid 36% return, how does that work?

Ankit: Its 18% annual payment. Every year you’re earning that return on that portion.

Brandon: If it took two years, if it took three years you’re still making 18% per year?

Ankit: Exactly. Plus potentially any penalties that the state or the city may give out plus whatever you spend on legal expenses that gets paid to you like if you stated the foreclosure process.

Josh: I see all these positives sounds like they’re great, where’s the negative?

Brandon: That’s exactly my question that I was going to ask next.

Ankit: That’s what I was looking out when I started. The negative is twofold. One is you don’t know when you’re going to get paid back especially in long redemption states. In my state it takes 24 months. If nobody decides to pay the taxes for next 24 months I have to kind of wade and continue paying into it to continue preserving my right and then I have to start the foreclosure process which may take another 6 to 12 months in my state. For 36 months my money may be tied up in this deal, that lent of time that you don’t know is the negative for some people. The second negative is not getting paid the income on the quarterly basis. It’s not like you’re getting a check sent to you every quarter. You get all of your money at the end when somebody pays off all those taxes. Those are predominately the two big negatives that you get in this type of a business.

Josh: Can you circle back a second you talked about preserving your right as the lien holder. Can you walk us to an example to what that might potentially look like. You buy this 18% two year redemption lien – under what conditions would you need to potentially put more money up in order to stay in the game?

Ankit: If you want to continue the foreclosure process, that’s the place where you’d have to continue money up. Let’s say Brandon bought that first year lien at $10,000, next year the taxes are coming up again and now Josh buys the lien at $10,000 and the way tax lien business work is the person who has the latest lien in the sense the lien that is the closest today has the right to foreclose. But they would still have to pay off the prior lien. It’s in no way I can foreclose in saying “Brandon you get no money.” You’d have to give Brandon his money plus his return back.

Josh: He’ll still get his payment but you have the right as the new guy who comes in to actually take back the property.

Ankit: Yeah, in the sense that you waited the property. Let’s say Brandon bought year’s one taxes, you bought year’s two taxes and year three is now coming up at this point Brandon still has an investment and Josh you bought another year. Now you can say “Well, Brandon’s pretty much out, I’ll pay Brandon back his return.” Brandon now can’t really foreclose unless he pays Josh off. It’s a counter intuitive, both people can pay each other off it just depends on who wants to preserve their right. I can continue paying into the lien because you’re interest on it so if you have money that’s sitting side doing nothing in the CD it just makes sense to invest the next 10,000 and earn the 18% if you bought it at 10% the first year.

Brandon: What happens if you’re not one of the 95% that gets redeemed? Do you take it all the way to actually owning the property then?

Ankit: If you get that lucky then yeah you would actually get it all the way to getting to the property and actually foreclosing on it which in certain states is couple of months process, in certain states is a yearlong process. The beauty of it, and that’s why I love this asset class so much right now, even if you invested three years’ worth of leans that’s $30,000 the value of this property as long you’ve done your homework and that’s something every investor should do – just because you’ve seen this thing as really safe you should still do all of your due diligence.

Let’s say the value of this property is a $100,000, you’re 30 into it, even if you’re liquidated into it at 70 you’re still making a really good amount of money. If you get that process and you get to go through filing the complaint and doing all the processes and getting to the other side of it, yeah, you’re going to wind up with really good payday.

Josh: You get the property and you down bid to an investor for 70% value because you don’t want to hold onto it, you don’t want more toilets?

Ankit: Maybe, maybe not. If you own a commercial building and its and its triple net type investment then maybe you keep holding onto it. It really depends on your strategy and that’s one of the other things me and Brandon were talking about is that every new investor who’s building their business need to really look at as business in “What is my strategy? What am I trying to do and what am I trying to get out of it?” Have that plan of attack so when you’re looking at an asset you know how to attack it properly and really build business to that plan.

Brandon: You said due diligence – what do you mean? When you do your homework how does that look like on a tax lien?

Ankit: The due diligence or homework on a tax lien unlike the properties you won’t get to go into the property. It’s kind of like buying a property at a sharers auction – you won’t be able to get inside of it. The way you can do your due diligence is really simple. A, you have got to make sure the value of the property is good. You got to make sure that if you’re buying something it’s worth a 100 plus thousand dollars so you got to do your comps right off the bat. Then the next thing that you should do is go drive on it and say “Is it boarded up, is it not boarded up? Is it falling apart, is it nice? Does it have overgrown weeds in it? That will tell you a couple of things. If it’s boarded up then this property is really going to fall apart. Do you want to put your money against really bad piece of property that you don’t know what it’s going to look like two year from today? A visual check. A lot of people in this business they’ll just do a Google Maps. They’ll say “I’ll go into Google Maps and take a look at what the property looks like. Don’t do that. Because the Google Maps is at least year plus old and sometimes when you get to the property it doesn’t not look exactly like what Google Maps may show you.

Brandon: I went to a shearer sale here in my area couple years ago and I know it’s a little different tax lien but they handed out this piece of paper like pamphlet of all the properties that were being auctioned off. One of them went for like $30,000 and grandpa showed up there and bought this young couple a house for $30,000 and they were so excited, they were hugging and I went “Man they really got a good deal out of this.” On my drive home I drove by the property and it was destroyed, the house was gone. There was no house there anymore. The people didn’t know that they just bid on a house because they thought they were getting amazing deal.

Ankit: You’ve got to do your due diligence, that’s what that teaches you. It’s an expensive $30,000 lesson.

Brandon: Now, when you’re bidding on lots of them you can’t drive by every single one can you? Or do you?

Ankit: I actually do. I do my numbers on every single one because that’s the discipline of being an investor. You have to do it or you need to hire a stuff or have somebody there that’s going to help you do that properly. I have done real estate investments from the hard assets side for a very long time and for me driving through a ten or 15 properties is a lot easier. I just say “Area makes sense, drive by is good.” it’s a lot simpler, it’s a lot quicker especially if you know how to filter your list. If you get a 2,000 lien list and you don’t have a strategy then it’s really difficult. But if you have a strategy of what you want out of it it’s a lot more manageable especially if you get it down to 50 or 100 150 that you want to bid on.

Josh: I’m going to get noisy. What’s your strategy, how do you typically go ahead and filter it? If you are willing to share that, of course.

Ankit: The way wave done it and our strategy is we look for high yielding assets in urban markets that are backed by density properties. What I mean by that is multi family or commercial asset than a piece of land or a single family. We’ll buy in “ghettos” of the area because we feel even if it’s really secure because of the way we evaluate it. We filter first by property type. Is it a land is it a two family is it a four family is it a commercial building is it industrial? We use property tax code to really look at that and look at the property tax card and say “What is this property?” we’ll use that’s as a first level of filter. Then we’ll say “What is the value of this property from the equalized value scenario?” We take the tax assist value we equalize it and say “This property is worth X. How big taxes are relative to that?”

Once we filter those two layers down then we’ll do our Google Map check. Obviously driving is expensive and time consuming so we’ll look at next list and say “Okay, it’s true that the property look like crappy on Google Maps so maybe we won’t go out there.” After that the forth layer of filter comes into the MLS because we have access to it at this point in our firm. We basically use that as our filter to say “We have this pot it keeps falling into this rain bucket and now you have this pot that may be a 100 150 liens and we drive on it, then as our last step and say “Out of those 150 what makes sense for us to buy?” Based on our strategy.

Brandon: How many are you buying of these? Is this you buying dozens a day, dozens a week, dozens a month, and dozens a year?

Ankit: We’re being about a dozen a month that’s our goal that we’re aiming right now. As we get further along the process and keep continuing raising more money towards this idea then we will hopefully buying way more than that.

Brandon: You’re not just using your own money you’re syndicating?

Ankit: Yes.

Brandon: I don’t think I know anyone else doing that.

Ankit: We’re syndicating tax lien money as well. We started off with our own money and then as we built the track record the same way we did something else we started syndicating tax lien money.

Josh: you’re in New Jersey, you said 18% is percentage that the auctions typically start at. Where you’re end up getting your liens at, on average?

Ankit: There’s another part of this market and that’s interesting part of tax lien, there’s an auction market and there’s what’s called orphan liens. Orphan liens are these liens that get left over that nobody bought at the auction. One of the county lists we looked at in our market had about in December 29,000 liens that came out for people to buy. By the time the auction was done there was still about 450 liens left over that nobody had bought. We will actually specialize first in going into those liens and talking to tax collector and developing our relationship with them to get that list in the door and from there we will be able to buy our liens without any competition that we like at 18%, relatively.

Josh: You smart guy you.

Ankit: No, remember, lazy guy. I’m trying to figure out ways around.

Josh: That’s great.

Ankit: I’m just trying to do it in a more sophisticated manner that I’m saying I don’t want to compete against some really big boys because at the auctions there are really some big boys at play. You’ve got a Fortress Capital Groups out there like Tower Financial. These are really big capital people who are coming with 50 $100,000,000 to spend and they have their acquisition teams together so if you’re not at their level yet how do you compete? In every business there’s always a niche. In every asset class there is always a niche. You’ve got to find your niches first and then build out of that niche. What we started doing and that’s how we got started was this what we call orphan lien or OTC market. We buy them, it’s a little more painful process of getting it approved to government regulation but were buying ours at 18% with really no competition out there from a lot of people.

Josh: When you’re not doing that, when you’re actually buying at auction?

Ankit: When we’re buying at auction were getting 10% on average. Going in is about 10 and by the time we keep buying the next quarter and the quarter and the quarter we’re winding in about 15% per year.

Josh: That’s your average after you keep paying into keeping your position?

Ankit: Yes.

Josh: I’m assuming you’ll see auction that will drop from 10 to 5 to 3 to 1 to 0 is kind of what your article is about. Is that true?

Ankit: That is correct. You’ll see not only that but in our state you’ll actually see people paying a premium to the face value of the lien. If the $10,000 lien – let’s say tenant is in Suburban Township and really good market and really nice piece of single family property you’ll sometimes see it go for 15 or $20,000.

Josh: Above?

Ankit: Above. It will be total. $10,000 plus a $5,000 premiums. That means that lien is earning 0% for somebody and they’re putting up additional $5,000 to the city and saying “I believe so much in this idea that I can give up this much money and take a longer time to earn the return because I’m going to continue paying the subs, I’m going to continue paying next quarters with the payments.”

Josh: You’re buying direct, you’re buying at auction. Are you also buying via some of these online platforms?

Ankit: No we haven’t started buying with the online platforms as of yet because we have plenty of products that we can just buy at the auction and at the actual OTC markets that we don’t really need to go there as of yet.

Brandon: This might be a stupid question but I was wondering when you say auction is there a guy with a gavel auction or is totally different process?

Ankit: You’ve obviously been to shares sale auctions? The idea is still the same, they’ll announce that “Next up for bid is tax id number bla bla, lot 5, lot 8, property located at 5 Quart LLC or 85 Court and Clifton” then they’ll start “Bid starts at 18%” then it goes 18, 15, 14, 10, 5, 4, half, 4, 3, 2, and that’s how it usually goes. Somebody out in the front was actually recording this and noting it but it’s just a big process that goes on based on interest rate.

Brandon: How do I find out when my local areas, I know it’s different for every state but if I want to get into this how do I find out where my local sale is?

Ankit: It’s fairly easy if you’re not scared getting on the phone and actually talking to your tax collector. Call them up and say “I’m a local investor I’m looking to get into tax lien buying when you guys hold your sale and what do you need?” Then usually the tax collector will then at that point say “Just send me a letter, and this is a tip for you guys out in the market if you don’t know this it’s fairly free way to get a list you don’t have to pay for it if you don’t want to, write a letter to your tax collector saying “I’m an investor” and say that “I want to get next tax lien list that comes out”, include the prepaid envelope in that letter and send it to them.

What happens is when that lien comes out they will send you back a list photocopied into that envelope and that’s how you can get a free list, basically, before its coming out. Or you can always try to watch where your tax collector advertises, in which local newspaper and just go off of that. Just call them up or buy that newspaper when it comes out.

Brandon: Are we talking counties or cities or both?

Ankit: You’re talking, in certain states, in your state it’s going to be different compared to Joshes state so in my state its cities. Like a Florida or other locations it’s a county level thing.

Brandon: Ok. That is something I can look into.

Ankit: It’s fairly easy. A lot of people thing taxes are very complex – it’s not that complex. I try to keep it as simple as possible and not a very smart guy just a hard working guy. It’s easy enough to do it you just have to a little bit of legwork upfront.

Josh: You’ve got this lien, you’re not beating them up over the head with phone calls or letters or anything like that saying “Where’s my money, when are you going to pay me?”

Ankit: No.

Josh: How do they know that they need to pay you money?

Ankit: The tax collector is following up with them. You get those lovely tax bills every quarter sent to you. When you’re delinquent you’re getting tax bills every month by the tax collector saying “You’re not delinquent X amount of dollars.” The tax collector is basically doing the collection work for you.

Josh: Is tax collector going to say “Now somebody owns your taxes, essentially, you need to send payments to Brandon Turner at 123 Bumble Street in Montesano.” Or how do they know where to remit payment? How does that work?

Ankit: The tax collector will actually do all the processing on their end. Also depends on certain states, like in Connecticut you can actually process yourself if you wanted to and reach out to the owner but if your tax collector is going to do it they just going to pay that money direly to the tax collector, tax collector is then going to fax you a document saying “This person is redeeming, can you verify the amounts?” You sign off on it, they basically send you a purchase and finance order, you sign that as a physical copy and then they sand you your check.

Josh: It’s pretty hands off. This is literally most hands on part is research up front.

Ankit: And the due diligence. That’s the hardest part of this and it’s the crunch of the time. If you’re buying at sharers auctions to begin with this is not a time crunch. If you’re doing weekly auction than that’s a lot of time crunch. This Is like three to four weeks of time you still get to do everting its just still a lot of volume that you’re going after but once you’ve done the research and you’ve done your due diligence it’s a money making game where you just keep adding dollars to and then eventually when you build a big enough portfolio in five years this thing keeps just kind of paying you off. All of the sudden you’re getting a check in the mail and you’re like “Wow, when did this redeem or that money came out and I have to put money in again?” It becomes a cycle that you’re just working out of.

Josh: Tax liens versus tax deeds – what is a difference?

Ankit: Tax liens are basically when you own a lien on a property, you don’t actually own the property as of yet. The tax deed is the government has now sold the property for the amount of the lien to the new investors. Now you as the investor are responsible for taking care of the property, fixing up the property moving it forward. In Detroit we’re talking with somebody at the BP meetup who bought one of those properties for $3,000. It’s basically that’s a tax deed. He actually bough property from the tax collector in an auction.

Brandon: In a tax deed to the people still live in the house or are they already foreclosed and gone?

Ankit: You’re still responsible to making sure that they’re getting out at that point and you’re basically taking the property for the amount of the taxes, potentially at the discount tax value but you’re now responsible for everything that you would be normally responsible for as buying it in an auction or having it as an RIO in your hands.

Josh: Is there any situation in which you’re not getting paid back on the purchase of the tax lien?

Ankit: No. Never seen it, statutorily it’s not allowed. Even in bankruptcy your principle is always going to come back to you. This is one of the investments that I actually go to family members and say “Give me the money Uncle Sam or Aunt Sally.” because I know it’s not going to be an awkward conversation. It’s going to be conversation where’s the money coming out and I’ll tell you up front to certain extent it’s going to come out between now and 36 months.

Brandon: Let’s say I’m a new investor and I want to get started. What do you think is the first step in doing tax liens? What do I do?

Ankit: Your first step in tax lien is same thing you do in real estate – figure out your market. Where do you want to invest fist? If you want invest in the local market then call your tax collector, do some research, understand the legal strategies. It’s not hard, people say its legal I can’t read it. It’s not that difficult you just have to go and analyze it and if you can’t do it put up an ad on craigslist, hire a law student and have him read the statute and analyze it for you.

Josh: That’s another good tip.

Ankit: Thank you. Once they’ve read the statute for you and given you that information then you really know what is the returns, what are the penalties how long is the timeline and that will be the first step. Educate yourself as an investor. That’s always the first step in any investment.

Brandon: Why don’t we move on to the Fire Round?

You have the keys to the property what do you do first when you’re going to go rehab it?

Ankit: When you get the keys to the property the first thing you’re got to do is have your scope of work and get your three contractors in the doors to give you bids.

Josh: What are your best tips for prepping for an appraisal?

Ankit: Get your comps together before hand, make the appraisers job as easily as possible. Remember the appraiser is only getting paid $500 or $750 for doing things work. If you can make his job a little bit easier, people are lazy they’ll actually give you the evaluation value closer to what you want. Especially if you are in a very distressed market or market that has both distressed and non-distressed comps treating close to each other.

Brandon: That’s actually a tip Ryan Lundquist on a show 7 – BiggerPockets.com/show7 said so I always thought that was an amazing idea.

How do I find a good city to invest in?

Ankit: The hardest question that I think there is out there on the market. It’s a mixture of a few things. A good city to invest in that I feel it has good demographics. What are you investing for is also the question you have to answer. If you’re investing for cash flow then you really need to find a city with some growing household size some growing tenant base and a high renter ship rate. This is all data that you guys can get through the lovely US Government, the US Census. They can give you a good breakdown saying “These cities have rental rate of X and these cities have this many housing units.” You can do this fundamental analysis, this is I guess my NYU education talking at this point and I apologize if it goes a little over people’s heads, but you can use the fundamental analysis to really give you an idea on where to invest. If you’re doing it for flipping fairly easily – look for places that have good household growth and good job growth going on and low unemployment rates. Those can be great cities to target for your next investment market but you still have to dig in dipper than that but It will give you a good starting point.

Josh: Not so quick but certainly good.

Ankit: It takes maybe about an hour or so but you can get it done.

Josh: If you’re not willing to put an hour of time into finding a market you probably don’t want to be investing in real estate.

Ankit: Probably no, you don’t want to be into real estate investing at that point.

Josh: That kind of kills get rich quick part.

Ankit: I don’t believe in get rich quick I think it’s get it slow and always thirsty. You got to put in the time and the effort that’s all this is.

Josh: What is the best way to bring up a rent increase?

Ankit: Don’t make it a surprise, make sure you if its already going to be something you’re going to want it in your lease, make sure its negotiated up front in the first lease and if it’s something that you’re saying “This lease is coming due and the rents have gone up 20%” sit down with your tenant three to five months before the lease is due and say “Listen the markets up 20% I’m going to do an increase on you up to X amount of dollars as long as its allowed by law and you should expect that.” That way they’re not shocked and they’re not like “Oh my god what just happened?”

Famous four.

Brandon: The Famous Four. These are the questions that we ask everyone.

Josh: Your favorite real estate book?

Ankit: My favorite real estate book is The Real Estate Game by William Poorvu – a Harvard business school professor. Really good book, it’s a really good frame of mind and it gives you a really good background on how each asset class work especially if you trying to build a buy and hold type business.

Josh: Sounds like a lot of get rich quick nonsense in there.

Ankit: A lot of get rich nonsense in there.

Josh: That books sells for $997.

Ankit: And Boot Camp goes for about a grand but if you bring a friend it is 50% off.

Brandon: What about your favorite business book, non-real estate.

Ankit: It’s called Built to Sell by John Warrillow. It’s an amazing book that really shows you that you should be working a business and bulling a business that you can eventually sell out and what process and system is that really entail.

Brandon: I haven’t read that one either. I love getting new suggestions on the podcast.

Josh: It’s nice for sure. I was getting a little tired of the same books. I still haven’t read it of course.

Brandon: Rich Dad Poor Dad.

Josh: What do you do for fun? Obviously you are analytical real estate machine but surely you have some joyful times outside of business. What do you do for hobby?

Ankit: That is what this is all meant for is to have fun out there. The fun parts of life are surfing, snowboarding and actually I’m trying to get my private pilot’s license for flying a single engine Cessna right now.

Josh: Nice.

Brandon: That’s on my list of things to do, too.

Ankit: I want to kill myself one way or the other.

Brandon: What do you believe sets apart successful real estate investors from those who fail?

Ankit: Truly hard work and concentration. Really spending your time and spending your efforts in one direction and doing a lot of work in it. That’s the part of success, that’s 99% preparation. Keep grinding guys, that’s all you’ve got to do, just keep working hard.

Josh: This was fantastic, absolutely fantastic and I know I certainly learned a lot and I think Brandon might be buying his first tax liens soon.

Brandon: I really want to now.

Ankit: You guys should I definitely think you should. Especially Brandon if you want to get from no toilet no tenants headache.

Brandon: I do, desperately.

Josh: It’s been absolute pleasure. We definitely want to thank you for the time, also want to thank you for the all you’re awesome posts on the BiggerPockets blog. If you guys have not yet followed none of Ankit’s post swell put a link to them in the show notes. He’s got a ton of really good stuff. Lastly, the big question is where can people find more information about you?

Brandon: I have about me page and you can reach out to me at any time. It has my cell number and you can give me a call. I’m always available to talk and help out and I’ve helped out all of the BiggerPocket members and I’d like to give the new investor generation get out there and build their business.

Josh: Where is the about me page? Just a point of correction because that’s what I do – It is BiggerPockets. It’s all good. We don’t want people to go to the wrong site.

Ankit: The about me page is actually within my page at BiggerPockets. Its aboutme.com/ankit_rer.

Brandon: Thank you very much Ankit this was awesome and I think this was our first show we’ve ever done that we did not screw up in the middle of it and I had to edit.

Josh: That is true. I did have to disappear, nobody would know but I actually had to disappear twice because my daughter is home sick and I had to take care of her briefly for a couple of moments so I had to slip away. But it turned out perfect so fantastic show, nicely done all of us.

Ankit: Thank you so much guys, I appreciate it.

Josh: See you around.

Brandon: See you on the site.

Ankit: Take care guys.

Josh: Alright everybody that was show 56 with Ankit Duggal. We definitely appreciate him taking the time to help us out. It was fabulous. If you enjoyed the show guys please just leave the comment in the show notes at the link I just mentioned and let us know, let Ankit know. Ask him any questions you’ve got – this is all about helping you out. We’re all trying to educate everyone here so don’t hesitate to get involved in the conversation.

Otherwise if you like this or any of our presiding 55 shows make sure to jump on iTunes and leave us a rating and a review. We definitely appreciate that. Finally along with the quick tip make sure to follow us on Facebook, on some of the other networks – twitter, LinkedIn, G+ and as I say every show do yourself a favor and join BiggerPockets if you haven’t already and don’t just join the site and disappear. The value is still there, you’re going to learn a lot but once you start integrating and getting involved you’re going to make connections like Ankit and our other participants of the podcasts and these guys are going to become your friends or colleagues or connections, you’re going to start working with them. Get in there start interacting, start making friends and build your business up. That’s all I’ve got for you. I’m Josh Dorkin host of the BiggerPockets podcasts, my co-host Brandon is going to take us out of here.

Brandon: This is the BiggerPockets podcast show 56. This is Brandon signing off.

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