BiggerPockets Podcast 099 with Scott, Lauren, and Philip Transcript
Link to show: BP Podcast 099: 3 Personal Finance Bloggers & Their First Real Estate Investment with Scott, Lauren, and Philip
Josh: This is the BiggerPockets Podcast show 99.
Brandon: Party like it’s show 99.
You’re listening to BiggerPockets Radio. Simplifying real estate for investors large and small. If you’re here looking to learn about real estate investing without all the hype you’re in the right place.
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Josh: What’s is going on everybody? I’m Josh Dorkin host of the BiggerPockets podcast here with my cohost over 99 shows, oh my goodness.
Josh: Crazy. It’s Brandon Turner. What’s up, man?
Brandon: What’s up? 99 shows. I can’t believe I’m still talking to you after all this time.
Josh: You must be crazy. Most people don’t want to talk to me after 99 shows, or 99 anythings.
Brandon: Well, no, this is good. I’m a little under the weather, so are you, so is Scott, so is everybody today apparently. A little cold is going around, but we’re going to fight through strong.
Josh: We are, we are. We got this, man. You know, I’m very much excited about this show. We’ve had a couple technical difficulties in making this show happen, however, today’s guests came through in spades for us. We had a guest who, unfortunately, couldn’t come on and—
Brandon: Also got sick.
Josh: Also got sick, but all three of our guests today managed to come on last minute so we’re really, really grateful to them, but otherwise things are good man. Life is good. Thanksgiving was fantastic. I got to spend some really great time with my family which was outstanding, my kids were ecstatic and it was great. I know you had a great Thanksgiving, you have new writing on your arms and things are great.
Brandon: Josh is making fun of my new tattoo, but yeah, on Thanksgiving evening I went to Wal-Mart just to watch that chaos of what happens there. Me and my wife do it every year, it’s our Thanksgiving tradition.
Josh: Wait, are you making fun of people who shop Wal-Mart on Thanksgiving?
Josh: Wow. We just lost half our listeners, dude.
Brandon: I know, that’s a lot of people, but it’s fun to watch. I like to watch crowds go crazy, so, I don’t know. It’s a tradition. We’ve been doing it for a few years now, but with that I’m going to lead that into our—
Josh & Brandon: Quick Tip
Brandon: Alright, so, this is not a Quick Tip.
Josh: On show 100 we gotta do something, man.
Brandon: I know. I’ve got a funny story. This is funny. I don’t think I’ve said this on the podcast. So I started doing this new thing I thought of it because of when I said Quick Tip, you’ll see why, I started on this new thing when I go to a birthday party and we sing Happy Birthday what I started doing is whoever’s the loudest voice everyone follows, I’ve learned this. So, what you do is you slow down. So it starts out Happy Birthday so by the, I’m not even kidding, nobody will know who did it, but by the end you’re going—
Josh: By the way, don’t sing that song because they—
Brandon: Oh, that’s right they—
Josh: That guy—
Brandon: So, anyway, by the end of the song it’s like, [making slow-mo noises] like that’s how it ends and everybody’s looking around like, “how did this happen?” and it’s the funniest thing. So, anyway. Try that out next time you’re at a birthday party. Real good times. So, anyway, today’s Quick Tip is:
Josh: What was the point of all that?
Brandon: I slowed down Quick Tip.
Brandon: I made you draw it out a little bit. Alright, now today’s Quick Tip: this is something that happened to me in real life this weekend so I wanted to share it, I hired a guy who lives at my apartment complex, he’s kind of our sort of resident manager, to go in and do smoke alarm checks just to make sure every unit has smoke alarms because legally you have to have them. In our 24-unit he went through 70 smoke alarms and we put them in every single unit when a unit goes vacant which means that over the past 3 or 4 years people just get rid of them and they throw them or whatever. So, the Quick Tip is: do inspections because you don’t have smoke detectors, most likely, in your units. Right now you don’t have them.
Josh: Who does that?
Brandon: I don’t know! I think what it is is it starts beeping cause the battery’s bad so they walk over to the wall and they just tear it out and throw it in the garbage.
Josh: Smash it?
Brandon: Yeah. Anyway. So, that’s my Quick Tip is: do inspections for things like smoke alarms. Also, we found like probably 10 water leaks that are costing us probably, I would guess, between $500-$1,000 a month in water that we’re going to now fix. So, anyway. Inspections every six months or sooner.
Josh: Great advice. Very, very good advice. Cool. Awesome. Alright, today’s show. You guys, today’s show is really cool. We have three brand new investors who are all super smart personal finance writers so they bring a really great perspective to the show. We’ve got Scott Trench, Lauren: Bowling, and Phillip Taylor today in that order and I think you guys are gonna love this especially if you’re getting started. I don’t know, even though we’ve been around the block for a while hearing these new guys and their experiences, if you’ve done it it kinda brings you back, maybe you get a little excited and maybe you’re inclined to go and help some newbie out who you know or whatever, but lots of cool stuff. Before we get to the first interview Brandon does have a quick word from today’s sponsor.
Brandon: That I do. Alright, today’s sponsor is: RealtyShares.com. RealtyShares.com is a real estate crowd funding platform that allows accredited investors to invest in pre-vetted real estate deals online. Some investors can browse and invest in both residential and commercial properties that yield returns of up to 16% annually. As a RealtyShares member you can passively invest in professionally managed real estate investments in a variety of asset types and geographies for as little as $5,000 all from the convenience of your own living room. So, to learn more and to get started with a free account visit RealtyShares.com/BiggerPockets. Again, that is RealtyShares.com/BiggerPockets.
Josh: Nicely done, nicely done and big thanks to RealtyShares for sponsoring the show. Yet once again we definitely appreciate the support and the sponsorship that’s awesome. So, thank you guys.
Alright, well let’s get to the interviews! First up we’ve got Scott Trench. Scott is actually working in the operations here at BiggerPockets and he just purchased his first property. His first rental property and his first property so he’s here to tell us all about it and I’m excited to beat him up a little bit and bring him on. Poor guy puts up with my nonsense all day. I give him a hard time so he’s a great sport. We love having him on the BiggerPockets team. So, Scott, welcome to the show, man! It’s good to have you.
Scott: How’s it going, Josh? It’s good to be here.
Josh: I am—
Scott: I’ve been a big fan of the show for a long time so it’s awesome to be here on the show with you guys.
Josh: So I’ve got to tell everybody a story. I was sitting here in the office just working away and one day this guy who works in the co-work space with me comes over and he says, “hey, can I bring somebody in here? This guy really wants to meet you,” and I’m like, “yeah, what’s up?” so he comes over and brings this guy, he looks like he’s like 14 years old, he’s super excited, he’s like, “hey! I’m a huge fan of you guys oh my god it’s so nice to meet you!” I was like, “hey, what’s up?” you know, and he was like, “hey, I’m Scott, and here’s who I am, and I’m really interested in getting into real estate,” and that was the first time we met and it was cool. He was so enthusiastic about getting into real estate and about us and the BiggerPockets podcast which he’d been listening to so it’s awesome A: to have you working for us now. Scott is working on our operations and sales team, and B: now you’ve just closed on your first rental property so it’s really cool to have you here to discuss it.
So, let’s take it back to the very beginning. First off, what made you interested in real estate?
Scott: So, I guess first of all it’s great to be a part of the BiggerPockets team. Yeah, I remember that day walking in and meeting you guys, that was one of the cooler experiences I’ve had in my life.
Scott: And, yeah, although one thing you left out there is I tried to work for you on the weekends and you’re like, “nah, nah, nah, just kinda move on here,” and then a week later I hear back from you, “hey, maybe you can come in for an interview and we’ll talk about this,” but why did I get interested in real estate? I guess I’ve been interested in personal finance for a pretty long time. Somewhere in the course of reading Biz books that have been mentioned time and again on this podcast, like, Four Hour Work Week, Rich Dad, Poor Dad, Millionaire Next Door, I kind of really got this goal of early retirement and creating a lot of passive income and I guess if you’re really thinking of passive income, early retirement and investment eventually, at least for me, I arrived at real estate and I think that’s going to be the case for a lot of people who really think their whole portfolio through.
So, it was about a year ago probably when I really got serious about it and I was like, “you know, I’m going to really start the process of getting into the buy and hold rental game as soon as I can”.
Josh: Okay, okay. So you got interested in this. A year ago you were 23 years old, I mean, you know, you’re still just learning what a beard is and pimple cream and all that fun stuff.
Brandon: He had a pretty nice beard last week. I didn’t notice you shave, but.
Josh: Yeah, his November was hardcore.
Brandon: It was hardcore. It was a good-looking beard, yeah.
Scott: Some call it good-looking, some might call it scruffy.
Brandon: In the Northwest we call that good-looking. We all have kind of the Lumbersexual look out here.
Scott: My dad was not sorry to see it go for sure over Thanksgiving.
Josh: Nice, so you’re a 23-year-old kid thinking about real estate investing and a lot of people say, “you’re 23 how do you prep for that?” I know you well enough to know that you have this mindset where you say, “I’m not going to go out and blow all this cash. I’m not gonna spend all my money on partying and clothes and different things. I want to save up and really get myself prepped,” so let’s talk about that really quickly. What’s this mindset you’ve got going on here?
Scott: So, I guess my first mindset is: with the concept of early retirement one of the first things that comes to mind is how do I reduce my expenses? How do I reduce my lifestyle expenses as low as possible and then how do I get as much passive income from that? And so I guess, you know, in order to invest in real estate I think you need cash. Obviously Brandon Turner is the master of the No Money Down game.
Brandon: Low money. LOW money down.
Scott: No and Low Money Down game, but for me I thought there were some risks involved with that, there’s some strategies that you have to do, there’s some creativity that needs to be implemented and I thought that a better way for me to get started was with a simple, traditional approach and to do that you need a lot of money, or you need a sizeable trunk to invest which I consider to be in the ball park of about $20,000. So, the plan was how do I get to $20,000 as rapidly as possible? And my situation last year the best way to do that was cut costs. I’ll live with a roommate, I’ll cut transportation costs, I’ll shop at Costco, I’ll make my own food. I’m not going to not have fun on the weekends and go out and hang out with my friends, but there are certain big lifestyle expenses that I think you can reduce to help you get that savings rate that you need to get that first property.
Josh: Yeah, and in your case, I mean, you bike to work, right? You don’t take a car so save on that. He’s a member of the Crock Pot Ladies.
Scott: Oh, yeah. LadiesCrockPot.org fantastic.
Josh: So great way to save money. You’ve got the roommate. All these things kind of coupled together represent a considerable amount of savings, correct?
Scott: Yeah, and another thing is how do you make your lifestyle expenses, the things you do for fun, cheaper? So, for example, I play in a club Rugby team and there’s ways that you can carpool with that, there’s ways that you can share costs associated with events that are around Rugby. There’s ways you can carpool to skiing, you know, borrow old skis. Any type of lifestyle expense that you do for fun there’s always ways to creatively reduce that cost and still have the same great time.
Josh: Yeah, I mean, I know some guys who go out and they look better than I do and they go shop at thrift stores and they have fancy clothes and that’s just another way to do it too, right?
Brandon: I used to be a total thrift shop junkie. I even had a shirt that said, I bought at a thrift shop, that said, “Thrift Shop Junkie”.
Brandon: It was amazing.
Brandon: Yeah, I stopped that, but—
Josh: So you’ve done all this to cut costs and you’ve been kind of putting together this plan, right? Hey, what do I do? How do I kind of kick things off? And you eventually came to the decision that you wanted to purchase a multi-family, correct? So, tell us the genesis of that. How did you get to that? And also before you go there I know you’re also a part of an investing group in town here in Denver so maybe you can kind of lead us from there to the decision to make the duplex purchase.
Scott: Absolutely. So, while I was at my old job, which was a kind of corporate finance gig, I got really interested again in this whole personal finance early retirement idea and I talked about it a lot. This is something I would talk about with people I met, people that I ran into, people I would meet at lunch or in the park, and I happened to run into this guy while I was going for a jog one day and we got to talking about investing and the early retirement concept and he said, “you know, I’ve got a group of guys here that all kind of have that same mindset. Why don’t you come and meet up with us?” little did I know that this real estate, or I guess entrepreneur group, would end up being a huge asset to helping me to kind of launch my investing career here.
There’s different guys in the group, all of the guys in the group are self-employed with the exception of a few, including myself, but they invest in various types of real estate. One’s a lawyer who does commercial brokerages. He’s also a commercial real estate broker. One is a house flipper. One’s got a buy and hold portfolio. One’s an agent. There’s all different types and they’ve been really great guys, really friendly; they’ve given me some great advice on which neighborhoods are likely to appreciate in the future, how to kind of estimate expenses in the area and then to kind of estimate rents, and so that really helps me kind of get more of the practical nitty-gritty on the neighborhoods and properties that I was looking at and kind of get a good feel for the area.
Then, it came time to decide what kind of house would I want to buy? What kind of property would be a good first investment? And in that regard my property is probably not the traditional BiggerPockets investment. I’m living in a place called Five Points which is a neighborhood just to the Northeast of Downtown Denver and property there is not the cheapest. It is not a $30,000 that is going to meet your 2% rule, but for me, for Scott Trench, that property makes a lot of sense in a lot of ways.
First of all, it’s a duplex so I can get the tenant to pay most of my mortgage, and it’s also within 5 miles of BiggerPockets headquarters so I can keep biking to work and I love biking to work.
Scott: You know, Josh you and I talk about that all the time.
Scott: And then it’s also in one of these neighborhoods that we decided there’s a pretty good shot at appreciation in, and there’s a pretty good chance of that icing on the cake with that appreciation.
Josh: Gotcha. So, you’re taking this guy, Brandon’s, concept of house-hacking essentially and buying a duplex. You’re planning on living in it and you’ve also got plans for a roommate that’s the “we”, correct?
Josh: Okay, so let’s talk about the deal more specifically. Again, it’s a duplex. How did you find this deal?
Scott: I actually found it on the MLS. An agent that I met on BiggerPockets actually pointed it out to me and she said, “hey, I think this might fit your criteria pretty nicely, what do you think?” and I looked at it, and I’ve been looking at a number of properties over the last six months, and this one kind of seemed to fit my situation the best. It was on the lower end of price side, it was on the closer end in terms of distance to where I work, and it just kind of seemed to work out for me.
Brandon: Nice. I guess I want to know about more of the market in Denver. I know cause I’ve been sort of casually sort of looking for maybe something there and I know it’s crazy expensive, like, compared to Podunk, Washington here where I do have the $30,000 houses. It’s a whole different world. So, I mean, what is that like to shop in a competitive environment like that? Like, how hard was it to find a deal?
Scott: Well, it’s kind of scary because you look at a property and the property would be gone in 2 days, you know, and it’ll go for higher than what it’s listed at. This has been going on for months now and this property I actually got kind of lucky on because it was initially listed with home path financing. Home path financing cannot be bid on by competitors, it has to be bid on by somebody who intends to occupy the place as an owner-occupant. So, that’s how I was able to kind of get a little bit more time to get my numbers together and make sure that this property did make sense for me in the end.
Brandon: Yeah, and I mentioned that to somebody yesterday too. They said they’re in a very, very competitive market, how do they find a good deal? And that’s what I said is: if you find a property that’s a HUD home, something that’s foreclosed on by HUD, or in your case home path, but kind of same gist of it. They have those restrictions on investors so that investors can’t bid for the first, you know, sometimes 3, sometimes 10, sometimes 30 days. That gives owner-occupants, people who are house-hacking, a tremendous advantage.
Brandon: I think that’s awesome that you did that.
Scott: And I think that with the owner-occupant thing it’s not about buying a property that meets the 2% rule or necessarily hits all of the criteria that other investors seem to talk about a lot. It’s about what property makes sense for you, and I think that this property makes a lot of sense for me even though it might not be the best for an investor looking to hit that high cash flow number.
Josh: Yeah. So, your plan was let’s get a roommate, that’ll cut my expenses, that’ll increase my gain, let’s put somebody in the other unit. Are you going to end up having to spend any money on a monthly basis rent wise or mortgage wise or are all of your expenses pretty much covered when it’s all said and done or pretty close?
Scott: When it’s all said, I mean, my mortgage payment all said and done is going to be about $1,500. That includes some FHA mortgage insurance which I plan to refinance out of in a year or two, but even with that mortgage insurance between a roommate paying me rent and the other half of the property being rented out I should be able to at least cover the mortgage. There may be some expenses that I’ll have to pay for out of pocket depending on what the maintenance ends up costing me, but it’ll be much better than my current situation where I rent for $600-$700 a month.
Brandon: And I was going to say, that’s something that people ask me a lot too and I hear across the forums and all that is: if I’m house-hacking or if I’m going to do that do I have to live completely for free? I mean, yeah, that’s kind of cool if you can live for free or get paid to live for free, but sometimes if you can just get it significantly cheaper than you would otherwise then it can still work out to be a good deal which it sounds like it’s going to be for you which is awesome.
Josh: And you get the experience as well.
Brandon: And you get the on the job training, yep.
Scott: Absolutely, and part of it is, again, it comes back to what makes sense for me, right? I could go find a property that’s 20 miles away where I will live completely for free with the house hacking strategy, however, I don’t want to do that. That’s too far, that’s not conducive to my lifestyle here and part of the investment for me is: how can I reduce my total lifestyle expense?
Josh: Yeah, that’s great. So, tell us about working with the agent. I mean, obviously, this is, well, not obviously, this is your first purchase, your first property purchase so what was that like? Then I also want to hear about, I mean, this was not a quick close. It took a little while. There were some kind of hurdles, tell us about that as well.
Scott: So my agent, first of all, was fantastic. Again, I found her through BiggerPockets, and we had a pretty complex transaction here using FHA financing and I was buying a foreclosure. So, for people who are kind of new to this those are two very slow-moving entities in the real estate game.
Brandon: What is FHA, for those people who don’t know?
Scott: FHA, I can’t remember exactly what the initials stand for.
Brandon: That’s alright.
Scott: But it allows you to put a—
Josh: Federal Housing Administration.
Scott: Federal Housing Administration, yeah, so for me that meant that I was able to put a low down payment on the property, but at the cost of having to insure my mortgage. So, that’s going to end up being a couple hundred dollars per month extra on that mortgage payment, you can think of that kind of like interest, plus a sizeable cash payment at closing, again, part of that insurance, but the end result was it allowed me to put much less down on the property and get in there sooner.
Josh: Gotcha. And then on the agent.
Scott: I’m sorry, what about the agent?
Josh: Just the general kind of process of the transaction itself. I mean, I know that we’ve spoken there are a couple of headaches that kind of came in. I know I had headaches as your boss I had to go back and forth with the lender. Lots of documents back and forth with the lender, but you know, verifying employment and those things, but what else?
Scott: Well, anytime there was any type of delay with the property with paperwork or with inspections or appraisals those kind of tended to be compounded just because of the two entities I was dealing with, which, again, I wasn’t just dealing with one seller. For example, a couple weeks ago they sent the FHA appraiser there to kind of determine the value of the home and he was unable to turn on the water. Part of the FHA deal is that the property has to be livable in order for them to approve the loan and if you can’t turn on the water it’s not livable. So, actually that ended up being a pretty nice little benefit for me because the bank was then forced to send in a plumber, fix all the plumbing, which I had estimated I would have to be paying for after I closed on the property, but because of the covenants of the FHA terms they had to go in and fix all the plumbing, make it workable at their expense.
Scott: Then again, it took 2 to 3 more weeks for us to close.
Josh: Yeah, well, hey that’s a nice little gimme, huh?
Scott: Yeah, it was a nice little gimme, but it was also kind of frustrating. Like, you know, okay this could have been done 2 days after the appraiser went in there, but no it took 2 to 3 weeks.
Brandon: Do you mind me asking a couple more questions about the financing side of things? I mean, how much did you actually pay for the property and then what was your down payment on that?
Scott: Sure, so my purchase price was $240,000 and I put down $12,500 for that.
Brandon: Okay, that’s not terrible. Like you said those are things you can save up for if you need to by cutting expenses or increasing your income, whatever it takes, so very cool. Well, let’s move on and shift gears a little bit. I want to know if there’s anything that you would do differently now that you’ve been through this process? I mean, three months ago somebody just like you is starting out, let’s say, where you were three or four months ago. What advice would you give them that they should do differently, or maybe do the same, as you did?
Scott: I guess one of the things I would have kind of done differently is maybe be more prepared with my funds. I had all these funds, and I’ve been a really big investor within personal finance so I had all these funds within different retirement accounts and different brokerage accounts and it might have been easier if I’d had these all in a liquid format ready to go at the time when I was looking to purchase properties. I think that there’s more opportunity when you have that all settled and altogether in one account where you can make offers and deal with sellers more easily. In this case I was limited in my opportunity to buy because of my illiquidity of my assets.
Josh: Nice, gotcha.
Brandon: Makes sense, yeah.
Josh: So, you just closed. I mean, you literally just closed on Thanksgiving weekend so you just closed on this property. There’s still some work to be done, obviously, I know you’ve talked about the roof and all sorts of other stuff that you need to get together. You know, this is a show for newbies, this is a show for pretty much everybody. I’m curious, what’s your emotion? First off, how do you feel? You just closed on your first property at 24. Are you scared? Are you excited? And what’s kind of your plan to get filled and move in?
Scott: Well, it’s funny because when I closed on the property I actually closed—my family lives back in Maryland so I went back to Maryland for Thanksgiving and the bank insisted that I close right then right when we were ready so that happened to be the Wednesday before Thanksgiving and I’m back in Maryland. So, they send a notary to my parents’ house 1600 miles away from the property and I go through the 2 hours of paperwork and close on the property and at the end the notary says to me, “normally this is a big moment in people’s lives where there’s a bottle of champagne, they hand you the keys, they shake your hand, but here ya go! Here’s the paperwork. Guess you’ll see the property on Monday,” so—
Brandon: That’s funny.
Scott: My emotion kinda I guess was different than a lot of people who make their first purchase who are like, “oh my gosh, this is my home now!” but cause I was at my parents’ house. I guess I kind of was more businesslike. When I actually landed in Denver on Monday I went to the property and checked it out and that’s kind of when it hit me, you know, this is mine. This is my property, this is my house, I can do whatever I want, I’m excited to get to work on it.
Josh: Yeah, and my last question to you on this property is: you and I have talked and somewhat battled over the last couple of days about your plan, right? You know, hey man let’s get this thing fixed up, let’s get it stat and I know your plan is a little bit more reserved. You’re definitely methodical about how you want to make sure everything gets taken care of and I think that’s great, but for somebody who just bought a duplex who needs some work you’re not going to move in first and worry about the other unit, right? You’re going to fix the unit that you’re going to rent out first, correct?
Scott: Yep. So, I plan to—well the biggest thing with the duplex is there’s going to need to be some work on the roof and I’m going to need to do some additional plumbing work. They did fix the water but they didn’t add any hot water so that’s pretty useful if you want to live in or rent out a property.
So, once those two big things get done, I’ll be able to move into the property and then I can start doing almost everything else on my own. I think I have the skill set and handy man skills to do all of the remaining repairs and my plan would be to make one side perfect, or at least up-code for the tenants and then move into the other side as soon as that’s done and get the tenant in there and that’s going to start this weekend. Again, I closed on the place on Wednesday and I’ve been planning and contacting contractors and trying to get all that in place for this weekend and next weekend.
Brandon: So, in other words, you’re not going to live in the unit while you’re fixing it up. You’re going to fix it up first then move in and then fix up the other side and move somebody else in, that’s what you’re saying?
Scott: I’m going to do a bare minimum of fixing up to both units at first then I’m going to move in once I’ve got hot water and a new roof on it then I’m going to start repairing it, yes.
Brandon: Cool. That’s exciting. I had a friend two years ago who knew that I did real estate, I worked at a bank with her, I think it was three years ago now, man… anyway.
Josh: Gettin’ old, man.
Brandon: I know. This property came up in the market for $60,000. It was a triplex with a whole separate big house and then two units in the back. The best owner-occupant situation you can imagine for that sort of thing and for $60,000. She would be making bank cash flow every month. Like I said, three years ago, I just asked her the other day if she’s gotten the units rented out yet and she said, “not yet,” and so for the last 2 and a half to 3 years those units have just been sitting empty, and they need about $1,000 worth of work, maybe. It’s like, they need paint and that’s it. Like, there’s something that stopped them. So, I guess my encouragement to you and everyone else is: Get that done as quick as possible cause it’s very easy for months and months to go by and not do it, I mean, you know this Scott, that’s cash in your pocket every month that you don’t have it rented. You’re a finance guy, you get this, but some people don’t so anyway. That’s my encouragement.
Scott: No, I absolutely agree and I’m going to try to move as quickly as possible but, again, I’m kind of limited to afternoons/weekends, but I’m really trying to get that done as fast as possible. However, my projections financially start having a tenant in there by the end of February which I think is pretty conservative.
Scott: So, I’d like to get them in there much sooner, but that’s my—I’ll be fine on my projections if I take until then.
Josh: I love that, by the way. I love that he projected so many months out. That gives him time. He had cash in hand ready to have this property empty for a few montsh and wasn’t going to be in deep trouble if he didn’t get the tenant in by then. I think that’s a really good idea to be conservative, especially the first time that you jump in and do this.
Brandon: Yeah, I think a lot of people underestimate how much work a property takes to get rented. I know I did, like, I can think of probably 20 times in my life where my wife and I would be up til midnight, 1, 2, 3 in the morning trying to get units rented out for a week’s straight cause we wanted to get the units rented out by this date and we just completely underestimated how long it actually takes.
Josh: Nice. Right on. Well, Scott, where do you see yourself going forward with real estate? Big goals? What’s kind of the long term plan here?
Scott: So, this year I purchased two properties and it’s kind of my first year out of college here. I guess I consider the duplex two units. Next year I’d like to purchase 4 either a 4-plex or two duplexes, whatever, and I’d kind of like to keep playing that doubles game as long as I can here. I am not convinced that my next property will end up being in Denver. It could be a couple hours away. I think there’s plenty of properties that meet the kind of more standard investment criteria around the country, and especially within 100 miles of Denver, that I can start investing in. So, I think that’s going to be my plan going forward is get those kind of 2% properties.
Josh: Nice. Awesome.
Brandon: Perfect. Well, let’s move on. I guess kind of wrap this thing up with our world famous—
Josh & Brandon: Famous Four
Josh: Something wrong with your voice there, Brandon?
Brandon: Alright! The Famous Four.
Josh: That was awkward.
Brandon: It’s always awkward. The Famous Four: these are the questions we ask everyone, and Scott I know you’ve heard us ask people these questions before so I’m excited to be able to ask you them. So, I’ll start out with number one: do you have, and if so what is it, a favorite real estate book?
Scott: My favorite real estate book, you know, I’m going to plug Brandon Turner here and say it’s The Book on Investing in Real Estate with No and Low Money Down.
Josh: What’s really your favorite book?
Brandon: Wish they could get a BiggerPockets.com/NoMoney ahem.
Josh: Yeah, yeah.
Josh: Ultimate Beginner’s Guide is a good Bigger real estate book.
Brandon: Are you giving him suggestions, Josh?
Scott: I’m going to say The Millionaire Real Estate Investor is probably—that was the book I read before I heard about BiggerPockets.
Brandon: The Millionaire Real Estate Investor, Gary Keller.
Josh: There ya go, nice book. Cool. What about favorite business book?
Scott: Favorite business book. It’s not really a business book, but I think one of my favorite books that really changed my mindset and how I think, I’m a big numbers guy so I like how they kind of projected, and that’s The Millionaire Next Door.
Scott: I think they did a great job of very quantitatively proving what helps build wealth.
Josh: Gotcha, good book. What about hobbies? You said you play Rugby. In fact, it was funny one day I’m at work and Scott walks in and he’s got like a big ol’ shiner from Rugby so wild child. What else do you do?
Scott: Well, I’m a big Rugby player. Played my whole life. I’m a big skier now that I’ve moved out here to Colorado. I love that, I try to go at least once a weekend.
Scott: I’ve hit a couple mountains. Love biking, love running, anything physical and I’m a big reader.
Josh: Cool. Awesome.
Brandon: Cool. You’re also a very good large—what’s the game called? Large Jenga or whatever?
Scott: Oh, Giant Jenga!
Brandon: Yeah, Giant Jenga.
Scott: Me and Brandon went downtown in Denver and kind of went a little bar hopping for a little bit there and we had a good time.
Brandon: Yeah, we had a good time.
Josh: I hear you’re the champion.
Brandon: He’s a legend.
Scott: I call myself a legend.
Brandon: He’s the legend at Giant Jenga.
Scott: at Giant Jenga, and then proceeded to topple the tower everywhere.
Brandon: Yeah, thank you, you screwed us on that. You know? That’s alright. I forgive you. I don’t hold grudges, jerk. Alright, final question: what do you believe sets apart successful investors? Those who actually take action and get things done and move forward versus those who fail, give up, never get started? Like, what do you see in successful investors?
Scott: I think it’s a mindset. I think it’s goals. If you have a clear objective that you want to achieve and believe that it’s achievable I think that’s what will help you keep going because, again, I think that the hardest step to take in real estate investing is going from not investing to be an investor and for me what that took was about a year of saving and projecting and planning to get that down payment ready for this property.
Josh: Great. Great, great, great. Otherwise, where can people learn more about you?
Scott: BiggerPockets.com, you can check me out at BiggerPockets.com/ScottTrench.
Josh: Actually, it’s user/
Scott: User/ScottTrench, and yeah, I’m always here, I’m always available. Any questions about BiggerPockets or newbie real estate investing.
Brandon: Or ad sales, talk to Scott.
Scott: Yes, you want to advertise on BiggerPockets.
Josh: Oh, yeah, yeah, yeah, good plug. Nice. And also Scott has been doing some writing for us on the BiggerPockets blog about personal finance.
Brandon: Kicking my butt in terms of traffic, comments, everything. It’s very depressing.
Scott: Not all of them are loving, though.
Brandon: Doesn’t matter, you write well.
Brandon: Well, Scott, this has been fun. We are glad to have you on the BiggerPockets team, obviously, and Josh and I talk about this all the time we love having you here.
Josh: Yeah, we appreciate it.
Scott: Great to be here. I think it’s the coolest job in the world and I got to be on the podcast today, so.
Josh: Yeah, world famous, baby!
Josh: Awesome, Scott, thanks so much, man. I’ll see you in about 6 seconds.
Scott: Alright, see you then.
Brandon: Alright, bye, Scott.
Scott: Bye guys.
Brandon: Alright, very cool. Good interview. I like that guy. I sure like Scott.
Josh: Yeah, even though he’s listening, if he weren’t listening we might have something else to say, but nah, Scott’s great and I’m excited about this new deal for him. It’s been fun to watch him go through the process, you know, seeing how excited he was. I know that you and I both were beating him up when he was looking at it about just different things and really trying to make sure that he was smart about what he was doing and really considered everything, and he did and he did what worked out for him and I think that this will be great.
Brandon: You know, to just to add on to that what I was thinking is that a lot of people are probably thinking, “well, yeah, Scott works at BiggerPockets of course he’s going to buy a good investment property like he did,” but the unique or kind of cool thing is that one: Scott did most of this on his own. Like, he learned in the forums, and the second thing is: everybody listening to the show has the exact same opportunities as Scott does because every day Josh, Me, all of the BiggerPockets team, I mean, all of the people way smarter than us are in the forums every single day and asking and answering questions and just hanging out. So, let that be an encouragement to people is: jump in.
Josh: Yeah, awesome, awesome. Alright, well, let’s move on to the next interview with Lauren: Bowling. Lauren:’s a writer over at LBeeAndTheMoneyTree.com and she’s doing the house hacking thing, similar to what Scott’s doing, but a little bit different than anyone else we’ve had on the show so why don’t we bring Lauren: in? Lauren:, welcome to the show, it’s good to have you.
Lauren:: Hi! Thanks for having me.
Brandon: Awesome! We are glad to have you and thank you, again, for coming in at the last minute. I know we just asked you a few hours ago, so, yeah, you definitely saved us here on coming in to do this interview.
Lauren:: No, thank you.
Brandon: Yeah, today we’re going to talk to you about something that I did in the very, very beginning and I thought it was one of the best ways to get started building a real estate investment business or whatever you want to call it. So, can you maybe kind of tell us what it is that you do with real estate?
Lauren:: So, I bought my first home in July 2013. I knew I wanted to get into having passive real estate income, but because I was just starting out I knew I was going to have to live in it. So, I actually own it, it’s my first home technically, and then I also rent it out to people so I’m just starting out on this real estate investing adventure.
Brandon: Nice, and it’s a single-family house, right? And you rent out bedrooms to roommates, is that right?
Lauren:: Yeah, it’s a single-family home, 2,000 square feet, here in Atlanta and it’s three bedrooms and the attic’s actually a master-suite so I live up there and rent out the bedrooms downstairs.
Josh: Nice. You know, it’s always a great way to get going, you know, whether it’s a single-family or a duplex, other kind of small multi-family, as Brandon dubs it, house-hacking as a means for kind of kicking things off. I actually have a question for you and it’s going to be very pointed, and don’t get mad at me, but why are you taking the master-suite instead of the small bedroom and not getting all that extra money renting out the biggest room in the house?
Lauren:: Cause I like my privacy and I live with people I know so I kind of like having that separation between me and them.
Josh: Alright, fair enough.
Lauren:: I’ll admit it.
Brandon: I took the nicest room as well when I did that.
Josh: Alright, alright. So, let’s talk about it. How did you find this property and when you did find it was the intent, hey, I’m going to buy this to start renting it out or was it you bought and then you were like, “oh, you know what? Maybe I can use this as a means to build some income and start becoming a landlord”?
Lauren:: Well, that’s a very interesting question. I actually was engaged when I bought the house so we bought it thinking that we were going to live here as a family. It was a total fixer upper and I put about $60,000 worth of renovation money into the home and then we parted ways, but I legally own the house so I was like, “you know what? I’m going to turn this bad situation into a good one and rent it out and recoup my money that way,” and it’s actually better for me.
Josh: It’s his loss.
Lauren:: Yeah, well, totally! This house is beautiful.
Josh: Yeah, and you know, he’s off trying to find somebody he’s never going to find somebody as cool as you so don’t worry about it.
Lauren:: Thank you, it was a long time, well not a long time, about a year ago, but thank you.
Josh: Alright. So, you took a difficult circumstance and you kind of turned it around. What’s it like renting out a house that was your house for you and your, sorry to kind of go there, but you and your fiancé living with these tenants? Is it different? Is it difficult? Or how does it feel like to have tenants in the same unit as you’re in?
Lauren:: I’ve actually lucked out. One of the tenants is my brother so he kind of understands the situation and treats the house like it’s his own.
Lauren:: We had another roommate and she kind of treated it like a rental and she would throw her things everywhere and she would be really messy and it was like, “this is my home,” like I’ve doubled down and put everything I have into this so that part is difficult I think, not from a he and I were going to live here memories perspective, but just from the fact that I have invested so much financially and emotionally it’s hard to see people come in and just treat it like they would an apartment in a complex or something, if that makes sense.
Brandon: I know exactly what you mean. I get irritated all the time when I look at a property that I fixed up. We used to flip houses and we would turn the flips into rental properties cause the market started crashing. So, I look at these houses that were one time just gorgeous and I look at the pictures and then I drive by today and I’m just sad cause it just looks like every other rental around. They don’t care, they don’t maintain it the way that a flip looks, or the way that I want it to look, they treat it like your average, blue-collar neighborhood and it hurts every time and I feel like irritated that they don’t treat it to the level that I would so I feel you, there.
Josh: Well, how do you deal with that, as a landlord, as somebody who’s renting out a property and who lives with the other person? I mean, you see this, and I don’t know if that person is still living with you, if so hopefully they’re not listening, but what do you do when somebody’s just kind of disrespecting the property a little bit while you live there.
Lauren:: Yeah, it’s definitely difficult when you know the person at least a little bit because then you kind of dance around those conversations whereas you’d probably be more direct with somebody that you didn’t know so well. She doesn’t live here anymore. It was one of those situations where me and my brother both tried to talk to her about how she was keeping the house and the way she was treating it and eventually we had to part ways because we couldn’t agree.
Josh: Yeah, gotcha.
Brandon: I think that’s an important thing, right? When you live with people obviously you have to get along with them. When you have a tenant that lives next door or lives a mile away or a hundred miles away you don’t, necessarily, have to like them, but when you’re living with them you’ve kinda got to like them at least somewhat which makes it weird too with the whole. Like, I have a rule that I don’t rent to family or friends, but when you’re in that situation you kind of, you don’t have to, but you generally either become friends with the person or you rent to your family. So I’ve done both; I’ve rented to my brother-in-law and I rented to one of my closest friends back then.
Josh: Nice to see you following the rules, Brandon.
Brandon: I know well, well, I didn’t have these rules, right?
Josh: Rules are meant to be broken, okay.
Brandon: There you go, yeah, so it’s an awkward place cause you want to be friends with the people that you live with. You don’t want to be weird, but at the same time you want to maintain that professionalism and it is a business whether or not, you’re not selling a product per-say, but you are running an investment business just by having that house. So, I don’t know, do you have any good tips for people who are doing the same thing who have roommates, or are renting out a room in their place who are dealing with that kind of thing?
Lauren:: I would just say get it all in writing. When you’re with someone you know it’s kind of more casual, it’s like a handshake agreement, and you can’t go back to those when stuff hits the fan so that would kind of be my number one rule, and also to just be careful. I think, sort of with the bad situation with the person who was living here before has kind of turned me off to being a landlord in some ways, and so if that’s something that you want to do I would say just starting out just make sure all your ducks are in a row so that way you can keep doing and keep up that bandwidth.
Josh: That’s great advice, I’m glad you actually said that. I mean, I’m not glad that it’s happening to you, but I’m glad that we’re talking about it because I think that is important and I think that a lot of people experience, get that one or two bad experiences early on, and they’re like, “I’m done! I’ve had it. If this is what it’s going to be like why would I want to continue? Why would I want to own 10, 20, 50 units if just having 1 or 2 people are going to treat me terribly,” and so, at least from our brief conversations, it sounds like you have plans to continue going forward and eventually, potentially, moving out and renting the property so this hasn’t totally turned you off.
Lauren:: No, definitely not, and I got lucky. I bought in kind of an up-and-coming neighborhood here in Atlanta so I bought sort of at the bottom of the market and now things are turning around and I have a lot of equity in this home that I hope to one day leverage into another investment property, or either a home that I will just live in by myself and then just rent out this one and have this be the sole source of income.
Brandon: Yeah, do you mind if I dig in a little bit on the numbers?
Lauren:: No, absolutely.
Brandon: Cool. What did you buy it for originally?
Lauren:: I bought it for $65,000 and then I got down payment assistance through the city of Atlanta through a lift program that they were doing to revitalize neighborhoods that had been hit hard by the economic downturn, and then now I think it’s worth like $140,000-$150,000?
Lauren:: Yeah. So.
Brandon: Sorry, my phone’s going off here.
Josh: You said you had put in about $60,000 in repairs, is that right?
Josh: Okay, so that puts you at $120,000, you’ve got some equity, tell us about the program because, you know, I’d be curious, do you have to put money down or do they just give you full assistance or 100% or how does it all work?
Lauren:: So it’s a soft loan, so they gave me $15,000 towards a down payment and closing costs and it’s forgiven $5,000 for every year you live in it in the home as your primary residence, and I had to pay $1,000 just as a program fee, but then at closing they put that money in and I think I paid, maybe, $800 at closing that’s it.
Lauren:: To get keys to a home. Yeah, which is what a lot of people pay to get into an apartment so I lucked out. I found it through just researching. They don’t offer the program anymore cause they ran out of grants, but to anybody looking to house-hack I would say research your options for down payment assistance because a lot of, you know, first-time owners who make a home their primary residence can qualify for that money.
Josh: And what would I do? Would I just look for down payment assistance and if I’m in Denver, which I am, would I just say, “Denver down payment assistance plans,” or, I mean, is that pretty much what you’re Googling?
Lauren:: Yeah, you can Google that or you can talk with your mortgage broker. They won’t mention it to you, but if you ask they’ll probably tell you if something’s going on or if they know of a program that would be a good fit for you.
Brandon: Yeah, I was going to add that a real estate agent that they paid when they get people in houses so real estate agents are usually really good. Agents and mortgage people both are really good about knowing those programs so it’s definitely something to ask because you never know. I know there’s programs like that in almost every major city, or there was, almost every major city has something like that and some are still going on today so it’s worth looking into so cool.
Well, let me ask you about, we talked about kind of financing then, I guess the down payment assistance they covered that, did you still have to go to a regular bank to get the loan, then?
Lauren:: I did.
Brandon: Okay, so you went to just a typical bank and I guess what was that process like? Was it difficult for you? Did you run into any issues in that?
Lauren:: It was only difficult in terms of there was more paperwork always when you go through things like that so you have to be really hyper-organized and make sure you have—they wanted letters from all of my previous landlords, my bank and also the down payment assistance, they wanted to ultra-verify my income and a few other things cause I also freelance so they wanted a little bit more proof of that than the bank had asked for.
Josh: Okay, gotcha. Hey, in terms of organization, I think that’s something where a lot of people find issue. You know, I work with him every day and he’s—
Brandon: I have a lot of problems.
Josh: Well, we could talk about them now if you want or we can just use it as an aside, as an example.
Brandon: Okay, sure.
Josh: I mean, I’m mostly organized, but what kind of advice would you give for somebody in terms of organization? You know, somebody who’s buying their first property what kind of things do they need to kind of get together? How organized do they need to be? What do you do?
Lauren:: I would say that if you know that you’re looking to buy a home within the next 3-6 months to go ahead and start pulling your tax returns, your W-2’s, rental history, maybe kind of reaching out to your previous landlords, if that’s something that you’re comfortable doing, just saying, “hey, can I have a letter saying that I lived with you and that I was a good tenant?” those things go really far.
Brandon: That’s great.
Josh: I think that’s great.
Brandon: And I wrote an article last week on the blog about how to get a bank to say yes to you every time and I talk a lot about what you need to have prepared to get a loan and how you can organize that and stuff, but anyway you can check it out if you want to. It’s on the blog everyone, and I’ll link to that in the show notes at BiggerPockets.com/show99.
Brandon: That said, I want to move on and ask you about the repairs. You said you did about $60,000 of repairs in that. Did that come out of your own pocket, or did you get any kind of financing for that or how did that all come together?
Lauren:: No, I did a 203k renovation loan so they lumped the cost of that into my mortgage, and since I bought the house for such a low price it was well within what I had been prequalified for so I didn’t have any problem taking out that much to finance the house. I actually was really thankful that I had that available to me because otherwise I wouldn’t have been able to do any of that.
Lauren:: So it was a great way to renovate a home without having a ton of cash on hand.
Josh: Yeah, so can you explain—I mean, what is a 203k and how do you go looking for these things?
Lauren:: Again, if you talk to your mortgage person there’s lot of literature about it. Most big banks, like Wells Fargo, Chase, that kind of thing, have their own brochures about the 203k renovation loan. You just have to have a contractor come out and estimate the work he’d like to do on the home and then you can take out a certain amount and then they put that amount into sort of like a separate escrow account for you and then you have an inspector come through and check the work at these check points and say, “yes, the floors were done. Yes, the kitchen was repaired,” and then he’ll release those funds to you, give you a check to sign, and then you had it to the contractor so you never actually touch the money except when the check comes made out to the contractor you just have to sign it.
Paperwork was pretty much straightforward. It was all lumped into the basic underwriting process of the initial mortgage so I can’t really speak to how that qualifying process works, but I know that it is available.
Josh: Sure, nice.
Brandon: I’m a huge, huge fan of the 203k loan. I mean, I talk about it all the time. I write about it. It’s in chapter 2 of my book that I just wrote. The entire chapter is about house-hacking and that’s one of the main parts is a 203k loan so I think it’s really cool that you used it and you used it exactly the way that I think people should. For those people who are interested in doing that just you guys know you can do that with a 1, or a 2, 3, or 4-unit property so you can actually use a 203k loan on a four-plex or a tri-plex or whatever. I’m a huge fan of that because you get to do exactly what you did, right? You bought a low-price property that needed work, you fixed it up using the bank’s money and then you added instant equity in when you did that so kind of get to gain all of these different sides at the same time and now you get the cash flow cause you’re renting out the rooms in there, I mean, just all around it’s just an awesome thing you’re doing so I commend you on that. Good job.
Lauren:: Thank you.
Brandon: Yeah, what about mistakes? Anything you did wrong? Anything you’d redo over?
Lauren:: I think just because it was my first time renovating—first of all, I don’t know how you guys feel about this, but I would not recommend such a massive renovation. I bought a foreclosed home. It had no plumbing, it had HVAC, no nothing so I was basically starting from scratch and I know a lot of fire time buyers just kind of do cosmetic updates on a home.
Lauren:: And so I think I bit off a little bit more than I could chew in that respect and then I also didn’t super-do my due diligence with the contractor. Luckily there were guards in place through using the 203k program that prevented him from completely taking advantage of me, but I was not satisfied with his work in that respect.
Josh: You’re not alone.
Brandon: That’s one thing we complain about on the show all the time. every guest same thing is: dealing with contractors is one of the most difficult parts of being in the real estate industry at all.
Josh: Which is an absolutely shame, and there’s these sites that have these referrals with ratings and you know what? I’ve used contractors who’ve had plenty of high ratings and I’ve been screwed by them and so, you know, referrals is really, really one of the best ways to find a good contractor. talking to other real estate investors and find out who they’re using, but we’ve all been there so don’t feel too bad.
Lauren:: Yeah, well, it’s interesting cause my realtor actually referred him to me.
Josh: Oh, fired.
Lauren:: He went to her church, I don’t know if he’d actually done any work for her actually, but so that’s probably where I went wrong. She seemed nice and I was like, “oh, yeah, this is great!” I have it all in one little package, but.
Josh: I tell you what, I think that’s one of the worst ways to find a real estate agent and to find anyone else is to go through a personal, like, I think personal references are great to some extent, but when you’re talking about somebody who’s going to be a part of one of the biggest purchases you’re going to make, you know, they’re friends with my mom or somebody who went to my church is a really easy, it’s so easy to go that path.
Brandon: Yeah, it’s very convenient.
Josh: And so many go that way. Yeah.
Brandon: And that’s not a good thing.
Josh: Right, but the agent that you’re using to buy that 4-family may have never sold a 4-family, may not know how to analyze it and may not know enough and maybe giving you not the best information so I, you know, I’m not trying to pick on you and use you as an example, but I definitely recommend vetting folks primarily through a network of people who may have worked with those individuals not necessarily because they’re friends or churches and that, you know, again, it’s convenient but sometimes it can be problematic.
Lauren:: Yeah, it ended up costing me thousands of dollars because I just didn’t vet him properly and he didn’t do the work right the first time so yeah. That would be my biggest piece of advice is just do your homework and then do extra homework. Whatever you think is appropriate do more than that.
Brandon: Well, and do like what you said about the 203k loan. One of the nice things about that is they don’t release funds to the contractor until the work’s been done as expected so there is a few more safe guards to make sure they are not completely ripping you off, and that’s just one more benefit to the 203k that I like cause it’s not my fault, it’s the bank’s fault, sorry, you didn’t do that right. I don’t have to be the one yelling at the contractor.
Josh: But that’s something that newbies should, and experienced people should be doing as well, you know, releasing or giving half the money up front to a contractor is just a really bad idea, you know, you definitely want to have milestones and really organize the process and if you find a contractor who says, “well, I want 50%-75% up front or I’m not doing this,” move on. There’s always going to be somebody else.
Brandon: What I typically do if they want all that money up front it’s usually cause they need materials and the guys in my areas don’t have any money at all, right? So I’ll tell them, “hey, I’ll tell you what, I’ll buy the material. You just get it all together at Home Depot, call me, I will pay for the material and that will be your 50% up front and I’ll give you whatever else, 20% as your starting fee or whatever,” and that’s usually worked out well for me, but anyway. So we’ve gotta move on and wrap this up, but my last question is: where do you see yourself going in the future? Do you plan on buying more? You said earlier you might turn this into a rental, we talked about that, I mean a full time rental. What are your thoughts going forward with real estate?
Lauren:: Yeah, I definitely see this home, I don’t think I’ll be here for the long term like I had initially thought when I purchased the property, but it will definitely turn into a rental. I would like to buy more because just collecting that check every month does get addictive so I would like to be a little bit more in that. I’ll probably, I don’t know, maybe hire somebody to help me with the property management aspect of it if I ever start having more than 1 or 2.
Lauren:: Just cause, as I said before, I’m a little turned off to the landlord thing right now, but other than that yeah, I definitely want to keep going.
Josh: Nice, and my last question is: you’re a personal finance writer so I guess I would say besides real estate what else do you recommend people do to financially prepare for the future? What’s your biggest and best tip? We have an audience of real estate investors, but they’re all primarily interested and concerned about their personal finances so what’s your big take away?
Lauren:: I think other than real estate just creating multiple streams of passive, or not passive, but just multiple streams of income. So, I freelance, I have the blog, I have my full-time job, I also rent out rooms, I’m just trying to have as many avenues as I can to make up this total income pie that way I’m not so reliant on one thing or another to make my living. I don’t like having that pressure so that would be my one time.
Lauren:: That’s kind of what I write a lot about on my site as well.
Brandon: Great. That’s kind of another side of, earlier on this podcast we talked with Scott and he’s really big on cutting expenses, like that’s his main push, and I like that there’s two sides of building wealth, right? That’s cutting expenses or adding income and so you kind of add that side to the personal finance stuff so I love that.
Brandon: Cool. Well, let’s move onto our world famous, Famous Four.
Josh: Famous Four.
Brandon: Something wrong with your voice, Josh?
Josh: No, puberty.
Brandon: Alright, good. These questions we ask everybody and we’ll see what you’ve got to say. Number one: do you have a favorite real estate related book? I know you’re not like gung-ho buying lots of properties, but do you have any books that come to mind when you think real estate? It’s okay to say no.
Lauren:: Oh my gosh.
Josh: Put her on the spot, boy.
Lauren:: I’m going to say no right now.
Brandon: That’s fine with us, yeah.
Josh: Fair enough.
Brandon: That’s a good answer.
Josh: How about business book? What business books come to mind?
Lauren:: Oh, gosh, I just read one. It’s not necessarily a business book, but it’s just about work-life balance. It’s called Overwhelmed and it’s by, she writes for the Atlantic, her name is Bridget Shultz and it’s just about how our lives just keep getting busier and busier and that ties into the revenue question but just how can we make it so that our lives balance out with our work and that we feel good about ourselves an we’re not just heads down in a cubicle 9 to 5 all the time. So, it’s not super-business related, but it was a really good one I read recently.
Brandon: Yeah, nobody’s ever recommended that one so I love new books.
Lauren:: Well, hey.
Josh: What do you do for fun? What are your hobbies?
Lauren:: So, I work out a lot. I do yoga, I walk my dog, I go hiking, but then I also perform in community theater shows.
Josh: Oh, nice.
Lauren:: I have a theater degree. I was a professional actor in New York for a while, actually a year or two.
Josh: What year?
Josh: Oh, I predated you by a decade, but okay.
Lauren:: Yeah, so I still do community theater. I like to be in musicals. I love rehearsing and it’s completely unrelated to finance or writing so it’s’ a really good outlet for me.
Brandon: What’s your favorite musical? I’m a huge fan of musicals, too, so.
Lauren:: Thoroughly Modern Milly is my favorite.
Brandon: Really? I have not seen that one.
Lauren:: Oh, it’s so cute! IT’s so good.
Brandon: maybe I’ll watch that sometime.
Josh: You guys having a moment?
Brandon: We are having a moment, you know, theater nerds. Alright, last question, from me anyway: what do you believe sets apart successful, I’m going to say open it up and not just say real estate investors, but just successfully financial people. People who are financially successful, thanks mom, from those who—so what sets apart financially successful people from those who continually struggle in life and never really kind of gain any traction or get anywhere? What would you say?
Lauren:: I think what sets people apart is just having that, I want to call it an investor’s mindset, knowing that it’s a lot of small actions over time that make you successful. That very few things happen overnight and realizing that difference between kind of flash in the pan fast success and the kind of stuff that you build overtime is, I think, what makes people successful with their finances. I don’t know anybody who’s gotten rich overnight, literally overnight.
Josh: I like that. I think that’s great. Well, my last question is: where can people learn more about you? You’ve got a website. What’s the URL and tell us a little bit more about that.
Lauren:: Sure! So, my website is LBeeAndTheMoneyTree.com, it’s based off my nickname, people call me L Bee, or they can find me on Twitter, Instagram @LBeeMoneyTree, or they can find our web series Awkward Money Chat using the hashtag #AwkwardMoneyChat so, lots of ways to find me.
Brandon: Cool. I just watched an Awkward Money Chat today, the one with Paula Pan, I thought it was excellent.
Lauren:: Thank you so much! I had to do season 2, yeah.
Brandon: Well, thank you very much and Josh you wanna…?
Josh: Alright, Lauren:.
Brandon: Take us out?
Lauren:: Thank you so much.
Josh: Yeah, I’ll take you out, Lauren:, thank you. It was great, we really appreciate, I mean, seriously thank you for coming in last minute and big thanks to Leticia as well for helping us scoop you up and get you on the show so much appreciated.
Lauren:: You’re welcome! Thank you guys.
Josh: Take care, you got it. Alright, guys that was great. That was our interview with Lauren: and I hope you all got some really good information, I know I did. If people want to know more about her you can check her out at LBeeAndTheMoneyTree.com, that’s L-B-E-EAndTheMoneyTree.com.
Brandon: Cool, yeah, and I do love that strategy, the 203k thing, that loan is such a fantastic loan product. I talk about it all the time. So, like I said earlier, if people do want to learn more about it pick up a copy of my book The Book on Investing in Real Estate with No or Low Money Down.
Josh: Oh, boy.
Brandon: By visiting BiggerPockets.com/NoMoney. I just want people to know if they want to learn more about the book, you know?
Josh: It is a good book, and you find every opportunity to plug it.
Brandon: I find every opportunity to plug it.
Josh: You do.
Brandon: We’re going New York Times Bestseller, it’s getting there.
Josh: Nice. Alright, alright. With that let’s move on. Today’s third guest is Philip Taylor, and to tell you a little bit about him, Phil is a writer at PTMoney.com and he’s a great guy who turned a potentially bad situation into a really great financial opportunity for himself and his family. We’ll talk all about it, and again, we are grateful to Phil for coming on and it’s been great knowing him over the past few years so I’m excited. So, Phil, welcome to the show, man, it’s great to have you.
Phil: Josh, totally glad to be here. Hi, Brandon, looking forward to the chat.
Brandon: Hey, look at that! He actually said hi to me! Most people don’t say hi to me. Josh, like, welcomes them and then they ignore me like I’m chopped liver, isn’t that the phrase?
Josh: Oh, look at you! You remember the tribe, I love it.
Phil: Well, I see you guys in pair everywhere I go so.
Brandon: That’s true, we’re kind of joined at the hip.
Josh: He’s my other wife.
Brandon: Well, I’ll put that on my Twitter today: Brandon, Josh’s other wife. Alright. Philip, let’s just start early. How did you get into real estate? You’ve got one property so how did you get it? When was that and how did it happen?
Phil: Yeah, so my one property is my old home. So, I’m sort of a quasi-accidental landlord and I say it like that because we bought it in October 2007, it’s a town-home across town now, and when we decided to move out of that property selling that would have, it wasn’t an underwater situation, but we would have lost some of our down payment, a small amount of our down payment and my wife and I were just not in the position to do that. We just didn’t feel comfortable doing that. It was like a pride thing, you know? And luckily my income at the time was enough to support a couple of mortgage payments if things went wrong, and really, when we bought the property, we sort of knew that it would be a potential rental property for us so we kind of had that in mind when we bought it. So, we’ve owned it for 7 years now and it’s been a rental property for the last 2 to 2 and a half.
Josh: Nice. How’s that been for you?
Phil: It’s been very positive. For me it was something that I thought I always wanted to get into, you know, real estate at some level, and it certainly gave me that opportunity. You know, I decided if I was going to do it I was going to do it all the way, DIY 100%. Rent it out myself, repair it myself, and manage it myself.
Phil: So I’ve done all of those things and you guys know that I’m a writer, a financial writer, so I was able to get a lot of content out of that experience. So, it’s been good. It was something I was a little nervous about, I’m a pretty conservative guy, but for the most part at the end of the day I’ve been really happy and blessed to have gone through it and now I see it as something that is going to be a big part of our future.
Josh: Yeah. So you mentioned you’re an accidental landlord, tell us a little bit about what that is. This is really a show aimed primarily at newer investors and newer real estate folks so what’s an accidental landlord and other folks who may be finding themselves in a similar position what advice do you have for them to get through? You haven’t really told us the experience, necessarily, but get through kind of some of the challenges that come with being an accidental landlord.
Phil: Yeah, so for me how I would define it is someone who needs to sell their house for some reason, but ultimately can’t sell it and has to turn it into a rental property cause either the market doesn’t produce a buyer or the market produces a sale price that is either below the equity that’s in the house currently, or is just sort of a negative, for our case it was starting to bite into our down payment that we had put down on the house.
Josh: Right on.
Phil: So, yeah, that’s accidental for us, and I would say I’m a fairly conservative guy so I don’t like to lose money so in this situation we luckily had our finances lined up where we could handle both properties at the same time, and i would say that for me I wanted to be in real estate eventually at one point so this was almost an excuse for me. If you’re not someone who’s slanted in that direction I would say be wary of doing something like this. I would rather that person get out from under the property somehow and eat a little equity, I guess, but I don’t know that I have a good answer there necessarily, Josh, sorry.
Josh: That’s good enough. I mean, you know. I’m going to judge you no matter what your answer is so that’s fine.
Brandon: I was going to ask: you said earlier you’ve always kind of been interested and thought you’d get into real estate. I want to know what about real estate kind of made you want to get into it eventually and keep that in the back of your—like, why was that in the back of your mind to get into it?
Phil: Right. So, my father was not—my family is not necessarily real estate owners so I didn’t necessarily get it there, but I’ve seen other people, and you know what it was? When I started blogging a lot writing about personal finance a lot of people talked about how rental properties would be a good addition to the income streams that they’re trying to build for themselves. So, typically personal finance you talk about saving enough in your retirement accounts so you have an income stream in retirement to live off of, well, people additionally add onto that with real estate and so for me that was always an interesting part of it.
My wife’s best friend’s dad, if you can follow me there, does a little bit of real estate dabbling and he just seemed so practical about it, like, it wasn’t a mystery for him, it wasn’t scary for him, and I had a lot of conversations with him about the process, some of the rental properties he had, some of the ways he was adding value to the pieces of land that he was purchasing, and it just seemed so—it sort of brought it out from behind the curtain. It wasn’t necessarily a mystery anymore and he just made it seem so practical.
You know what? We also had a very good landlord when we were renting a townhome in that same neighborhood. So, we rented a townhome in that neighborhood that we eventually purchased a property that became our rental property and we just enjoyed him as a landlord and I really just felt like he was—it was a beautiful investment for him. So I could see it and at the same time I was sort of fixing my financial situation and I thought, “you know what? We’re putting a lot in our retirement accounts, we’re really hammering those maxing those out. Let’s take some of this extra cash now that we have and think about doing a rental property”.
Brandon: Let me ask you about the landlord. You said you had a really good landlord.
Josh: I was going to say the exact same thing, that’s really funny.
Brandon: You know, we have a lot of landlords listening to this so what do you believe, what made them a good landlord? What do you admire about them? What made them good to rent from them?
Phil: You know what it was? We were pretty easy tenants, I think, on him, but he was very responsive as soon as we had an issue or question he was there. He fixed problems immediately, but it was really more impressive how he was handling it because he lived in New York and here we are in Texas and I don’t even think he—I think he purchased the property without even seeing it, and was renting it out so it just seemed to be just a wise guy to have pulled this off and to be doing it and in a time when he could see some good tenants come through there, we being one of them, but I don’t know. I just looked up to the guy because he was the one, he was making money off of the deal, I was paying him, but I wanted to be that guy one day, you know?
Josh: Yeah, and I’m just curious, I don’t know if you remember, but how did he, I mean, were you working directly with him as the manager? Was he managing the property from 2,000-2,500 miles away or was there someone else in between?
Phil: Yeah, it was just he and I and he would give us deposit slips to take the check over to the bank and put it in and we could deposit our check for him, and when we had a problem he would call a local service person or something to fix the issue.
Phil: And you know what also led me into real estate I think? Was that when we did buy that, eventually buy the property that became our rental, I made some improvements to the home myself. I put down hardwood floors, we did some painting, and I got comfortable with doing a lot of the maintenance at the house itself so that gave me some confidence when we decided eventually to make it a rental.
Josh: Right on.
Brandon: Can I expand on that just a minute? I want to talk about doing your work because a lot of people, I mean, me and Ben Leybovich have this battle back and for the last year about I like to do my own work a lot of times, I don’t as much anymore, but I did a lot of my own work, and he doesn’t so you obviously are one that’s more hands on. I guess do you have any advice for people listening who might be wondering that? Like, they might say, “I don’t know how to do anything right now, I’m not very handy,” should they just try to learn? Like, what are your thoughts on that?
Phil: Yeah, I mean, YouTube is your friend. So, go there as much as possible, but also don’t get yourself into a situation where you’re working on something over your head. I mean, electrical or some plumbing issues are, to me, red flags even though I know some electrical I still try to stay away from some of those repairs. So, just know your limits, I guess, and know when to call in a pro. Don’t drag issues out with your tenant cause that’s just going to create a negative situation if you’re trying to always go over there and be the guy who fixes the toilet or whatever if it requires a pro just be able to judge what’s something that, okay, I’ve spent as much time as I need to on this particular repair or whatever it’s time to call in a pro.
Phil: Yeah, so just find that balance for yourself and don’t feel like you need to take it all on initially. For me I looked at it as a learning experience. So, whenever an issue came up I thought, “you know, I can learn something about this. I can maybe try to fix it,” but there’s a point to where, point of no return I guess, or what is it? The law of diminishing returns. You just get to that point and it’s like, “okay, call someone”.
Josh: So you manage your own properties and you do your own work. How do you manage your properties as somebody who’s never done this before? What do you do? What’s your process, or do you not have one and kind of play by the seat of your pants?
Phil: I do a little bit by the seat of my pants. I stress that I have a good property, it’s a new property, it’s only 7 years old, and it’s also an area where there’s high demand right now. So, I wouldn’t feel as comfortable probably in a reverse situation so I have that going for me, but in terms of managing it it’s pretty simple. I connect with the guy over Chase QuickPay to make the rent payment so that’s pretty simple. I check in with him periodically, not as much as I should, but periodically, to make sure everything’s okay. I make all my mortgage payments, my HOA, my insurance, is all automated so I’ve got that to where it’s not something I even have to think about.
In terms of the onboarding tenant that probably was the most hair part, and a part I was just more comfortable doing myself, but just did some research, talked with a buddy who had a rental property agreement already in Texas, and he’s a lawyer, and so I paid him for that rental agreement and then I started doing that for my own tenants.
The onboarding process was still difficult, though, because you need to screen people, you need to make sure you go through a background check, all those things, but what I decided was basically that I just needed to have a fixed process I put everyone through.
So, they make the application, they go do the screening process, they give me the other information they need to make, and I make sure I just put everyone through that same—that’s what I’ve heard about onboarding tenants is you’ve just got to make sure that you put everyone through the same process, right?
Phil: So, that’s what I stressed is that I made it an identical process for everyone coming through and I set pretty high standards for myself, and I could, I mean, we were in a pretty on-demand market like I said so that made it pretty easy to keep my standards pretty high.
Brandon: That’s great.
Josh: So what does that mean in terms of high standards? Is it your income ratios? What exactly are you using as your high standard?
Phil: So, people with perfect credit situations and no pets, no smoking, and no criminal history at all. So, that’s kind of what I’m looking for is people coming in which I can tell are corporate employee types who are coming into the area just because of job movement or situation.
Josh: Right on. So, any mistakes that you’ve made on the property as a landlord? Forget the part when you lived there.
Phil: The biggest mistake I made was when we bought it. We bought it at the peak.
Josh: Yeah, but you bought that as a property to live in, so I mean, was that a mistake? You needed a house, that was where you lived, right?
Phil: Yes, we were happy with it, we still are.
Brandon: I like the idea, I mean, you bought a house in a bad time. a lot of people buy a house in a bad time, like ’06 - ’07 and maybe they go underwater, whatever, and they blame the economy, they blame Bush or Obama whatever, they just get like and then they end up losing the house in foreclosure cause it’s not their fault, you know, the economy sucks. I love the idea that you stuck through it, you know, you made it work. You turned it into a rental. Maybe you could have sold it and had a loss or lost your down payment, but I don’t know. I just like the idea that you are somebody who took action and didn’t let the world push you around. You made it work rather than making somebody else make it work.
Josh: Have you seen this guy? He pushes people around.
Brandon: I know he’s good at this so this is good.
Phil: Well, thanks for that, but I also have the advantage of being in Dallas, Texas where real estate the bubble wasn’t nearly as bad. So, it wasn’t as bad for me as it was for some people, but yeah, I appreciate that, and we did put 20% down on that property and I would always encourage people when they’re buying their homes to try to shoot for that.
Brandon: That was actually a question I was going to ask, yeah.
Phil: Yeah, it makes situations like this a lot easier to manage on the back end.
Josh: Nice. So what are your thoughts, you know, you’re in Texas. Texas for people in California is a good place to buy, and people from other places. What are your thoughts on paying cash on a property versus financing it?
Phil: I’m a pretty conservative guy so if I could pay cash for a property I probably would. My next rental property if we got that far, well, let’s put it in this perspective: Before we get another rental property or another investment property of any type we’re going to pay off one of our home loans. So, we’re going to get to that comfortable—notice I say one of our loans. So, either our home loan or the rental property loan. We would want one of those to be 0 before we take on another debt so I’m comfortable with a little debt. It certainly helps from a tax perspective. We’ll see if we go through the numbers on my property, but I cash-flowed $4,000 and then had a $5,000 loss on my taxes that I could net against my income. So, there’s benefits to using the leverage I think that makes sense so I’m not necessarily opposed to buying all cash or using some debt, but ideal for me is cash. Keeping debt out of my life.
Brandon: So you mentioned you cash-flowed, yet you took a loss on your taxes. For those people who don’t know why that is, or how that works can you kind of shed some light on that?
Phil: Right. So, I cash-flowed because the rents I took in exceeded all of my expenses for the year so that makes sense, right? Anybody can follow that. On the flip side for tax purposes for taxes you get to take advantage of depreciation so depreciation of property, I think, was somewhere around $12,000 or so for the first or second year and so netting that against that, if you take that against that $4,000 gain, I mean, that’s somewhere around $5,000-$6,000. I got the math wrong there, but anyway.
Brandon: I gotcha.
Josh: I’m lost.
Brandon: You usually are.
Phil: The depreciation is the big factor. So, with taxes you get to take depreciation on the property, something that’s not factored into a cash-flow analysis, and so from a tax perspective it comes across as a loss which reduces my taxable income by $5,000 which, in effect, in a 25% tax bracket would save me $1,250 a year in taxes.
Brandon: That’s great. I know I found, before my current W-2 that I have through BiggerPockets, when I was just doing real estate 100%.
Josh: When you were financially independent?
Brandon: When I was relaxed and on a beach because I’m, you know, rich, yeah, I’m loaded, right? No, I never paid taxes cause I didn’t make a lot off my rentals, it wasn’t like I was raking in hundreds of thousands of dollars a year, but I made enough to survive, yet the depreciation on all of my properties killed any taxes that I owed so I didn’t pay a dime for years in taxes and it was the best thing ever. Now all of a sudden, like last year, I had a tax bill for the first time cause my depreciation didn’t quite offset all of my income. So, anyway. That’s just another benefit. We don’t talk about that much, especially here in the podcast, or just in general, but it’s one of the four biggest reasons why people invest in real estate, you know, cash-flow, appreciation, tax benefits and what am I missing? What’s the fourth one?
Josh: I stopped paying attention when you started talking so, you know.
Brandon: Oh, whatever. You usually do. So, moving forward one of the last questions I have before we kind of move to the end; where do you see yourself going forward? You said this earlier, you kind of want to pay off a loan, but how do you envision using real estate going forward to achieve your goals and where you want to get to?
Phil: Yeah, so I’m actually starting to look at early retirement or financial independence. So, I see real estate right now as a part of the cash flow, monthly cash flow, that provides me the ability to be financially independent and retire early possibly. So, I like it for that reason so for that reason I’ll always try to have it, and I think it’s a counter-balance to, not a direct counter-balance, but it balances us out when it comes to our other savings, our retirement savings, so I see us at some point starting to withdraw on that and also withdrawing the cash flow from our rental property as both income sources to sort of have, when one’s bad you can draw from the other, when one’s good you can draw from the other so it’s just a balancing act. Another iron in the fire so to speak to have. So, whether we go to more properties… I think eventually we will? I’d like to even get into like a—it’s always been an interest to me to do a storage facility, or an RV rental type of piece of land. Someplace where you can add a lot more value because you have a lot more land instead of just a fixed home, but I really like the property we have and if we can repeat it 2 or 3 times I would do it.
Brandon: Cool. Oh, by the way, I remembered my fourth one: amortization. It other words, like, a loan gets paid down, that’s the fourth benefit. So, cash-flow, appreciation, tax benefits, and the loan pay down. Anyway. I just want people to know I’m not completely stupid here.
Josh: And, again, I wasn’t paying attention cause you just starting yapping.
Brandon: Yeah, whatever.
Josh: So, really quick, we did our last show with Alan Glass on value add investing and if you haven’t check it out yet Phil I definitely recommend it. It’s really interesting. His whole philosophy is look for properties where you can add some kind of value and he does some really fascinating stuff. Definitely worth listening to, and that’s BiggerPockets.com/show98. My last question before our last section is: you’re a personal finance writer, for those people who are unfamiliar with Philip, he probably is one of the most famous personal finance writers. This guy is a big deal and I know he’s blushed and that’s okay because I’m going to hype you up anyway. No, he’s amazing. He’s a big deal. He runs a monster conference for financial bloggers and has for years and so the pressure’s on, you ready? Here’s the question: so besides real estate what do you recommend to our listeners to do to prepare financially for their future? What’s your best piece of advice for folks? And, you know what? I’m going to tweak it. Not necessarily to prepare for their future, but to prepare for their future and to prepare so that they can continue to, or if they haven’t already since this is a newbie podcast, start to get involved in real estate?
Phil: Yep. Good question, and this part works perfectly with my story because we were able to do what we do because we had implemented some personal finance practices before we got into real estate that made the whole thing work a lot smoother. So, my biggest piece of advice I try to tell people is to pay yourself first. You’ve heard it before, but I’m going to tell you specifically how I want you to implement that. I want you to take the first few dollars that you make every week, every month, every bi-monthly or whatever your payment is and automatically invest that in some type of savings account whether that be a generic savings account or a retirement investing account or multiple. So, set yourself some goals and then make these automatic savings deposits into these accounts happen before you have money then to spend the rest of the month. So, if you wait til the end of the month to do it, and I’ve tried myself, you’ll fail. You’ll have some months of success, but then ultimately over the long run you’ll fail, but if you pay yourself first consistently, automatically, and in accounts that are separate I think you’ll in the long run you’ll have success.
That’s what set us up for success and we continue to do that and it allowed us to have that rainy day fund and that nice down payment and allow you to do a lot more things in the future. So, pay yourself first. Get that money over into a savings account. Save, save, save before you do anything else and make that a priority in your life and then every other thing becomes easy after that point.
Josh: That’s great advice.
Brandon: Love it.
Josh: Richest Man in Babylon is where I learned that. We do that with our kids, we pay them before we pay ourselves to savings and we put money away for them doing the same thing because once it’s automatic and it’s gone we don’t count that as income. We have to make above and beyond that money or else we’re in trouble because that money is coming out period no matter what and if it’s not something’s not right.
Phil: Yeah, people who follow that method in retirement they say the same thing over and over: they didn’t miss the money cause it was going out before they had to think about it. And you can start small. Start with just $25 a month, but get into that habit and you’ll start to see those results and you’ll start increasing that number over time and it’s a beautiful thing.
Josh: Awesome. Great. Well, time to move onto the end of the show, end of the segment which is—
Brandon: Famous Four.
Josh: Oh, something happened. This is our Famous Four. We ask these questions to everybody on the podcast and we will ask you the same questions. So, Brandon, why don’t you take it away?
Brandon: Do you have a favorite real estate related book?
Phil: The only one I’ve ever read is James Randall’s The Skinny on Real Estate Investing.
Phil: And it’s a cliff notes version of a book. It’s great, action packed with—talks about the 10% rule, making your decision to buy specific property, talks about adding value, all those things that you need to learn up front to evaluate properties.
Brandon: Cool. I have not read that one and I have never heard anyone on the show recommend it.
Josh: Yeah, I haven’t either.
Brandon: Man, we’ve got a lot of good recommendations this episode of the podcast.
Josh: Yeah, nice.
Brandon: Alright, moving on.
Josh: What about favorite business book?
Phil: Definitely love the E-Myth and I love Millionaire Fastlane, both of them are top notch in my opinion.
Brandon: Millionaire Fastlane has been on my Amazon wish list forever and I’ve never bought it yet, but I will buy it now cause you said that so I’m buying it today.
Josh: There you go. Nice. Well done. What about hobbies? What do you do for fun? You’ve got a beautiful family, I know you get to spend some good time with them, what do you guys do?
Phil: Yeah, we do little kid things I guess. We spend some time with them. Also, work on my businesses that’s fun for me. My hobby outside of business is to play basketball once a week with some guys, pick-up basketball and also just got into Walking Dead.
Phil: Yeah, so I’m doing that.
Brandon: Good show. Alright, my last question: what do you believe sets apart successful, and I will say it like I did last time, what do you believe sets apart financially successful people from those who seem to fail or never really gain any traction with their finances?
Phil: Yeah, I thought about this question for a while and there’s sort of two answers because of the way you said the question, you know, never get started or fail, so I think it does take someone’s willing to risk to get started. I think you need to be a risky person to get started, but I think to avoid failing you sort of need to have a conservative tilt as well so you need to be prepared to take that risk. So, in my opinion what’s worked for me is that I was conservative enough in my finances to be able to take that risk so I guess it lessened that risk, but I still had to take it. I still had to go into that unknown area. That place where people try to warn you about going, you know, doing it all yourself and getting tenants, or whatever. So, being willing to take that risk, but doing it in a conservative way I guess.
Josh & Brandon: That’s great.
Brandon: Yeah, that’s awesome.
Josh: Love it. Alright, where can people learn more about ya, or read ya, or whatever? Where do we find you? How do we get in touch?
Phil: I like Twitter. You can hit me up @PTMoney on Twitter, or just head to the website PTMoney.com. Also, like I mentioned, I run the conference as well. It’s @FinCon, or FinConExpo.com so check it out. Pleasure being on with you guys, thanks for having me.
Josh: Hey, what’s the best real estate investing site on earth?
Phil: BiggerPockets, baby! No doubt. Oh, and you can go on PTMoney and read some of Brandon’s work. He’s written there a few times.
Josh: That’s true. Yeah, yeah, yeah. Awesome. Sorry to put you—
Brandon: You’re not sorry.
Josh: I’m not sorry at all, man, hey listen—
Phil: You guys are blowing away the competition, man.
Josh: It’s been awesome. Listen, we really appreciate it and thank you, thank you so much for coming on, man. It’s been a pleasure for sure.
Phil: Awesome, thank you guys.
Brandon: Thank you.
Josh: Alright, everybody that was our interview with PT Philip Taylor, the man behind the FinCon Conference. Brandon and I really love attending that thing. Lots of great people, we’ve got lots of friends in that community and we definitely encourage people to follow Philip at his blog at PTMoney.com so yeah.
Brandon: Cool, cool. Well, I need to go find a Kleenex and a nice warm bath and I don’t know, what else do you normally do when you have a cold?
Brandon: Josh, take us out of here.
Josh: Do you want some pampers too?
Brandon: I don’t.
Brandon: I just want the sympathy of the 40,000 people listening to this.
Josh: Yeah, you get none.
Brandon: I get none.
Josh: Alright, you guys, listen, thank you so much for listening. Thank you for putting us with us for 99 shows, we’ve got an extra-special show for you next week I think.
Brandon: Extra special. Emphasis on the “special”.
Josh: Oh, jeez. Listen, we’re excited. Thanks to our guests, thanks to our sponsors, RealtyShares, for putting up with us and supporting us and thanks to you guys for being a part of our world. If you aren’t already a part of BiggerPockets please jump in, create an account today—are you crying, or?
Brandon: No, I was inhaling, alright? C’mon.
Josh: You do live in Washington, so, you know.
Brandon: Not like that.
Josh: “I did not inhale!” That was my very, very bad Bill Clinton.
Brandon: Terrible, and he used to be an actor people, come on.
Josh: Yeah, alright guys. Well, thank you for being a part of our world and if you’re not a member of BiggerPockets already please jump on and create an account today at www.BiggerPockets.com. The greatest real estate investing site on the planet. It’s awesome. There’s lots of great people. Join us, hang out with us, meet great people, become successful, hang out, and anyway. We’re thankful to all of you guys post-Thanksgiving and we’ll look forward to talking to you next week on the BiggerPockets podcast. I can’t talk, Brandon take us out of here.
Brandon: Alright, show #99 is in the books.
Josh: In the books.
Brandon: This is Brandon and Josh signing off.
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