BiggerPockets Podcast 283: 18 Houses in the First 18 Months with Paul Thompson

by | BiggerPockets.com

Start slow—or take off like a rocket? When it comes to real estate investing, the choice isn’t the same for all. This week, our guest Paul Thompson made a clear choice: Rocket! After realizing the fragile nature of his six-figure salary, he set out to replace his salary with passive income—as quickly as possible. This led him to average a new home purchase every month for the first year and a half, and soon he had true financial freedom and quit his 9–5. This show is packed full of actionable tips, including some never-before-heard-on-this-podcast strategies for finding deals with the use of virtual assistants, Craigslist, and cold calling! This is one episode for which you’ll need to take some notes, so grab a notebook and let’s get into it!

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In This Episode We Cover:

  • Paul’s backstory prior to real estate investing
  • His first deal doing the BRRRR method
  • What is escape velocity?
  • P.I.L.E. (Passive Income greater than your Living Expenses)
  • How he manages his properties
  • Finding private money lenders through BiggerPockets
  • His system in making offers
  • Things he looks for in each deal
  • How to negotiate for seller financing
  • Subject-to explained
  • Why does he L.I.E. every day?
  • His interesting thoughts about money
  • How he balances his time
  • The third-party catalyst
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Fire Round Questions

Tweetable Topics:

  • “How many deals do you have is the wrong question to ask. It’s how much cashflow are you generating?” (Tweet This!)
  • “Never assume that what is important to you is important to the other party.” (Tweet This!)
  • “There is plenty of money for the things you really want.” (Tweet This!)
  • “You don’t want cash, you want what cash can give you.” (Tweet This!)

Connect with Paul

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners — without the non-stop pitch prevalent around the industry.

With over 1500,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

22 Comments

    • paul thompson

      Great, I’m glad you enjoyed. My suggestion is to pick one system or one aspect of your business you want to turn into a system. Rome was not built in a day. It’s funny we overestimate what we can do in a day, week, month, year but underestimate what we can do in 3, 5, 10 years. Reaching the “summit” of success is not a straight line. Your path along the path to the summit will look like a hockey stick. Flat for a long time before it goes vertical all of the sudden and you are an “overnight” success. Shoot me a comment or email and tell me what is the one thing you’re going to improve so that your life is easier.

  1. Don Spafford

    Awesome! Love this guy and his way of thinking. Thanks for including science with it. I love physics so any form of science is cool and relating it to REI is awesome. Very cool to have had rapid success and figuring it all out. Lots to learn here.

    • paul thompson

      Glad you enjoyed it, I hope it helped

      Two of the best things to say in any negotiation
      1. Tell me about your situation…
      2. What would you like to happen?
      then silence…

      Open-ended questions/statement and being quiet are invaluable!

  2. Fidencio Tamayo-Gonzalez

    I downloaded this episode’s MP3 file directly to my computer – in case the worst happens to BP, I’ll still have it. Really, though, this episode is so “meaty.” More of this type of content, please.

    Also, an ask, what book(s) would you all recommend to improve understanding of owner financing strategies?

    Thank you, Paul. Please come back and do a deeper dive – case studies on strategy stacking?

    • paul thompson

      Honestly, there aren’t any modern books that summarize the strategy of buying using owner financing in today’s market. It has fallen so much out of favor that most people aren’t interested. I have actually considered writing my own book on the subject as I feel it’s an underserved strategy, especially among the younger generation of investors.

      The books that are out there talk mostly about selling on owner financing. Those books are
      ‘My Life and 1000 Houses: The Art of Owner Financing’ by Mitch Stephen
      ‘Seller Financing and Real Estate Notes in the Dodd-Frank Era’ by Mark Stein

      One older book that does a pretty good job on about buying using owner financing is:

      ‘The Weekend Millionaire’s Secrets to Investing in Real Estate: How to Become Wealthy in Your Spare Time’ by Mikey Summey and Roger Dawson. They’re old school investors that talk about the relationship between price and terms and how to play with them to meet a sellers’ needs.

      Most of what I learned I got from going to old-school investors that host weekend conferences.

      I do prefer buying using owner financing over every other method but it takes a lot offers to get a seller to agree to owner financing. One thing I know for sure if you don’t ask you’re guaranteed not to get it. And it depends a lot on how you ask. I rarely ask the question “Would you be open to seller financing?” The default answer is no, I want the cash. You have to develop a relationship, build rapport, figure out their personal situation and use the monthly payments as an answer to their situation (i.e. gas payments for their RV).

  3. Jimmy Tucker

    What an inspiring message Paul. I have been bordering jumping in to investing in real estate, but haven’t made that leap. I just keep trying to save up enough for that first down payment. You truly have inspired me to believe that I can do this. Thanks again!

    • paul thompson

      You don’t have to have a lot of money to find real estate deals. It does take hustle and knowledge. But bigger pockets has empowered us all to acquire knowledge with very little money. Diligently saving cash is a good idea but there’s no reason to sit idly by waiting to have a pile of money. Go find a deal and monetize the deal. This is about creating additional sources of income and not only depending on the savings from your day job. Doing nothing is still a choice, a choice to defer what you really want for another time.

  4. Ryan Moore

    Hey Paul, I haven’t been able to listen to the entire show just yet, but i will be following up with taking down notes. Your ‘escape velocity’ discussion really hit home for me. I have always been talking about getting more and more properties to produce a snowball effect, but I love the more visual aspect of the escape velocity, and how all that hard work now, little by little, all comes together to get you blasted off to being out there on your own.

    I am 37 w/ family and have a 6 figure job in corporate America, and I know too that i would never been able to take extended trips/summers off to do fun things with my family. I’ve set a 10 year goal to be able to disappear for an entire summer w/ my family to travel across the country…. but with real hard work and passion, I know I can do that faster. I own 1 4-plex that cash flows great and I’m getting setup now to find the next MF property. I have never thought about private money before and utilizing a team to scour the sites for possible deals. I have been resigning myself to using the MSL to find something that hopefully would work. I look forward to listing a little more and trying some of your actionable items.

    • paul thompson

      I created a life list. It’s all the things I hope and dream about. Each year I knock off 2-3 things from that list. This year I started a podcast, I went to Costa Rica with my family for 2 weeks, and I wanted to be worthy of being on a show such as bigger pockets. I’ve done all 3. If you want to take a summer-long break why not do it next year? You have all year to plan it, prepare for it and make it a reality. Too many of us (myself included) live a life by default where we design our lives around how we make money. What if we flipped the script and designed the way we make money around our lives? In the modern world it easier than ever to live a life by YOUR design. The trick is you have to figure out what you really want and despite our culture’s message, it’s not about the money.

    • paul thompson

      Ironic you mention that I talked to a buddy of mine in Jackson, MS last night about doing that very thing. We talked so long I lost track of what was going on, left my car on and my car battery died. I had to uber home to get jumper cables.

    • paul thompson

      When farming using free leads sources like Zillow, craigslist, Redfin, FSBO sites, or property management websites the VAs are either calling, texting or mailing and in every case making offers if the properties are still available. They key here is making offers. This is the metric you can control… how many offers you make.

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