There are a lot of excuses people use for why they don’t invest in real estate. Maybe they work too much. Maybe they don’t have any money. Maybe the market is too hot. But some — like our guest today — don’t let those difficulties stop them. Instead, they use creativity to overcome obstacles and build a real estate empire. So today on the BiggerPockets Podcast, we are excited to introduce you to Dave Meyer, an investor from the Denver market, who shares his story of buying eight units using creativity, intelligence, and in incredible level of hustle!
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In This Episode We Cover:
- Who exactly Dave, the VP of Growth for BiggerPockets, is
- How his silly neighbor unintentionally encouraged him to buy a house
- Why he chose his friend as a partner
- The details of his first deal
- What he looked for in his first deal
- The numbers on that deal
- Would it still be a great deal without the appreciation in Denver?
- How he raised his funds for this project
- The importance of acting on opportunities now
- Who manages his properties?
- How a tenant built a staircase for him
- How you can learn the market by working hands-on
- How Dave bought properties while waiting tables
- His first experience with house hacking
- Tips to keep in mind regarding zoning when finding properties
- And SO much more!
Links from the Show
- Josh’s Twitter Account
- Brandon’s Twitter Account
- BiggerPockets Webinar
- BiggerPockets Forums
- Dancing with the Stars
- How Great Leaders Inspire Action by Simon Sinek (TED Talk)
Books Mentioned in this Show
- The Book on No or Low Money Down by Brandon Turner
- The Ultimate Beginners Guide to Real Estate Investing by BiggerPockets
- Start with Why by Simon Sinek
- Leaders Eat Last by Simon Sinek
Tweetable Topics:
- “If you have an opportunity, you’re a fool to ignore it. Find a way to do it.” (Tweet This!)
- “You learn a tremendous amount if you do hands on things such as screening the tenants, doing the open houses. You learn the market and what people want.” (Tweet This!)
- “Find the deal and figure out how to get the money to make it happen.” (Tweet This!)
- “Once you start owning, it feels weird to start paying someone else to live in their house.” (Tweet This!)
Connect with Dave
Brandon’s Photo
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21 Comments
Dave,
Great name, great show.
One other thing that I’ve done is add finished space, but not more units to increase income. At one place added 4 more bedrooms, didn’t need a building permit as I wasn’t changing the footprint, greatly increasing the rent.
David Krulac
That picture of Brandon might be one of the creepiest things I’ve seen in a while. He has a disturbing animalistic gaze in his eyes as he’s mouthing that pulled pork. Good podcast!
Hi Dave, I want to say great podcast and it’s cool to hear from someone who is working for BP.
I do have a question regarding your first deal: you said you used other people’s money to finance the down payment portion of the 4plex with a conventional loan. Don’t banks usually disallow that?
Or did you structure your deal in a way that the down payment wasn’t seen as debt but as equity instead? You said the sales proceeds would be 25% each, which I thought meant equity at first. And then you said you were also paying them 6% interest, which sounds like debt.
Thank you in advance!
Great podcast on buying properties in competative market.
Hey Mike, good question! So we did put down equity, it wasn’t really debt. Basically, only two of the four partners contributed equity to the down payment, so they got a preferential return. They are accruing 6% interest on the down payment. When we sell the property the two partners who contributed equity will be paid out their downpayment + accrued interest first. After that the proceeds are split 25% each. Hope that helps!
Thanks for the response, Dave!
To confirm, does accruing that interest mean they are only paid back their downpayment + accrued interest when you sell the house? At first, I thought you were paying those 2 partners interest every month from your cash flow and that’s how you were paying them back. Was that ever an option to you?
And is it safe to say that you have an agreement on a set date to sell the property? Or are your partners ok with having an indefinite sell date?
I was wondering the same thing as Mike. In addition, what happens if something breaks like the water heater? Or there is an extended vacancy? How is the deed structured?
Hi Dave Meyer, great podcase! It is very interesting setup you got there and I have one more question. For the mortgage portion, how did you qualify with 4 people in the deal? Does all 4 of you are on the mortgage application or only couple of you? If there are more than one person on the mortgage, do you know how does it change their future buying power (like if there are 2 of you, on your next deal, does bank see as one of the people could be responsible for all of the mortgage amount)?
Great podcast and I love the enthusiasm on this show!
anyone else noticed Brandon’s Photo?
Definitely one of the highlights in the show notes! Great picture Brandon!
Hey Mike,
We did discuss an annual payment, but opted for the deferred payment. When we first bought the property we had no idea we’d be cash flowing as well as we are. We have a relatively complex buy-sell agreement, but our initial agreement was a 5-8 year hold. The voting, tie breaker and all that was fairly complicated, but thankfully we haven’t had to resort to that. Actually, I am working with another partner right now to try to buy out the two others. It’s all amicable, but two guys want to take their money elsewhere, and I am trying to double-down on my real estate! So the structure is likely to change.
Who pays when something breaks?
There is an operating account that pays for all repairs. At the end of the year we pull out any profits over and above our “operating reserve”. If at any point the repairs exceed the amount in the operating account, costs are split equally.
Great podcast Dave! I enjoyed listening to your story on how you “unintentionally” got into real estate and how it has changed your life over the years eventually landing you in a position here at Bigger Pockets. Your advice on getting partnership agreements notarized will definitely save on potential headaches that could arise in the future. I’m a newbie investor myself and it was great to hear what you have been through, what you have learned, and the confidence you gained from making your first deal. Thank you for sharing!
Good show! I really liked the zoning conversation. Sounds like the “granny cottages” ADU strategy can be good. I nearly purchased a place like that in the Baker neighborhood when I was shopping for my first house way back in 2000.
That was a perfect podcast for me! I don’t want to be a full time real estate investor like everyone else featured on the show, I just want to slowly acquire some properties to add to my income and creative legacy wealth. I’m also looking in a very competitive market, and just pulled up the zoning map and definitions. My plan is to get a home with the ability to add and ADU or MIL. Thanks for sharing your story, and I also hope to hustle a deal and get it before the seller puts it on the market, get success for you there!
That was like, a really like, good podcast. But like, something was like making it like difficult to like listen to. 🙂
Seriously, good content, I’m just an old guy giving you some sh*t. But young folks need to be aware of how many times they use the word ‘like’.
Mark—that’s what my Dad said! I’ll try to do better next time.
Hey Dave, great podcast! This was perfect for me to hear. I’m a newbie who just moved to Denver and looking to get into buy and hold investing. Knowing the zoning is a great tip, especially when it can lead to adding value in a crazy market like Denver. Thanks for sharing and best of luck going forward!
Excellent podcast and that photo of Brandon’s is definitely unique.
Thanks for sharing!