BiggerPockets Podcast 305: Financial Independence in Your 30s Through Just 5 Investment Properties with Brad Dantonio

by | BiggerPockets.com

Are you interested in retiring early with real estate but don’t want to manage hundreds of properties to do so? Today’s guest has managed to travel to 54 countries in the last three years after retiring in his 30s by owning just FIVE properties.

Brad Dantonio shares exactly how he reached financial independence at such a young age by focusing on three unique skill sets (and how you can, too). In this episode, you’ll learn how Brad has created “time wealth,” how he tracks every expense he has, and how he achieved the equivalent of a four-year degree while sitting in Houston traffic!

Brad also gives us the three tips he shares with young people (including how to take your journaling to a whole new level), how he forever changed his relationship to fear, and how learning the art of delaying gratification at a young age gave him an advantage over his competition for life! Brad has a fantastic story of overcoming adversity as a young child and using his setbacks as fuel to create the system he used to retire early and live the life of his dreams. If you want to use real estate to live your best life, this is an episode you don’t want to miss!

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Read the Transcript Here

Brandon: This is the Bigger Pockets podcast show number 305.

Brad: I think that I have more time wealth than a lot of billionaires so on Thursday I’m headed to Munich for three weeks and my wife is going to meet me there so one of my retirement gigs is touring people around central and eastern Europe and I am able to do that because when I was in my travels since April 2015 one day I was sitting at a cafe and a guy said, “Man, you ought to turn this into a business” so I do that like two or three times a year where I’ll show people around Munich and Prague and Budapest so that’s one thing that I am able to do that if I was climbing the hierarchy I wouldn’t have the time to do it.

You’re listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you are hear looking to learn about real estate investing without all the hype you are in the right place. Stay tuned and be sure to join the millions of others who have benefitted from biggerpockets.com, your home for real estate investing online.

Brandon: Hey everyone. It’s Brandon, a quick announcement before we get to today’s show. So if you are listening to this the weekend that it comes out; that means that it is Black Friday, Cyber Monday weekend which means it is the best time in the world to buy stuff online and that included Bigger Pockets books so all those books that we published – I think there’s 14 of them now. They are up to 75% off right now until Monday night. Cyber Monday so, check it out biggerpockets.com/store. Again, it’s like the best time ever to buy them so go check it out biggerpockets.com/store and with that, let’s get to today’s show.

What’s going on everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with the co-host of the day, of the year, of the month, Mr David Greene. David, how are you doing, man? What have you been up to?

David: I’m doing great. I closed on a property yesterday, I believe.

Brandon: You’re on fire.

David: And Flego yeah, it’s going very well so I have phone calls set up with contractors so I get to start the part where we all love which is managing a rehab, but once you get through that then it becomes a cash cow and you get to enjoy making money.

Brandon: That’s super, super exciting. Well, very cool. Well, I don’t got much to talk about today and in fact today’s show is so good and so powerful I want to get into it as soon as possible so we’re going to jump right into it.

Before we do though let’s hear from today’s show sponsor.

This podcast is brought to you by Zillow Rental Manager.

Brandon: Alright, so I have this really – we’ll call it handsome property.

David: Handsome, you say?

Brandon: You can describe a property by handsome, right? It was a handsome property, but the problem was it was vacant and I needed to fill it very quickly. 

David: So, where would you start with that?

Brandon: Well, where would I start with that?

David: You can post it on like an online classified forum like Brandon’s list, I guess.

Brandon: Is that a thing; Brandon’s list? No. Alright, what if I told you there was a better way?

David: I just have to say there has to be a better way.

Brandon: There is. Enter Zillow Rental Manager.

David: That sounds amazing, but what is a Zillow Rental manager?

Brandon: Alright so Zillow Rental Manager is an online platform that lets me reach a wide swath of potential.

David: A swath?

Brandon: A swath, that’s a word, right? A swath of potential renters. Like, I can digital create new listings for my property, manage the ones I already have and even collect payments electronically from renters and the best part is; free for me to use.

David: Free?

Brandon: Free and I know rental is going to be listed and seen on all of the Zillow Group sites like Zillow and Truliet and Hot Pads; it’s the largest rental network on the web so I want my listing to be seen.

David: It sounds sleek and modern.

Brandon: It is. Managing a rental can be hassling, but look, Zillow Rental Manager brings the process into the 20th century. That’s why we use it. Best of all, I can collect payments electronically from my renters at no cost to me. So go to Zillow.com/biggerpockets to learn more about Zillow rental Manager. That’s Zillow.com/biggerpockets.

Alright, a big thanks to our show sponsors always and now I wanted to get to today’s… I almost forgot it. I wanted to get to today’s quick tip. Alright today’s quick tip is very, very, very simple. Get out there and attend a local Bigger Pockets meet-up in your area. They are happening all over. They generally don’t cost any money. They are probably a bunch of people getting together for drinks at the local bar; it doesn’t matter or a restaurant or whatever. Get together with people that are doing this stuff. Get excited, get pumped up. A new year is coming, a new you is coming, but only if you take some action. Do you like that?

David: Cheesy.

Brandon: It sounds like something from a headline last year. I think we’re actually going to do a new year, new you like book sale this year on January 1st so you know I’m stealing headlines form others. With that though, I don’t know. That’s it so go to biggerpockets.com/events and find a local group, go meet them, connect, grow; you become more like them. Now, today’s show what? Go ahead.

David: If you live in my area come to my meetup. I pick a different topic. I teach about it every month. We are doing three meetups a month all throughout the bay area so depending where you live there’s probably going to be one near you so please check it up and let us know you want to come and I’ll get you on the list.

Brandon: Fancy you. Look at you. If you are in Maui; we do one once a month as well or if you’re in western Washington; we do them there too. I don’t know, that’s all I got. So today’s show we are interviewing Brad Danton. Oh man, I dint get his last name.

David: Antonio.

Brandon: Antonio. Brad Antonio is like seriously a guy to look up to okay so I do a webinar every week on Bigger Pockets and one of the things I talk about a lot is that it doesn’t take that many properties to obtain financial freedom. I say that a lot on thee webinars because I really believe that.

People think you have to have a hundred, right but like it doesn’t take that money and today’s guest proves it. In fact, he talks about he is able to travel. He’s been to 54 countries in the last three years. He has financial freedom, financial independence and he does it because of the way he invests in real estate and he; as you will find out; he does not have that many. In fact he has just 5 properties.

It’s a pretty fantastic story. You’ll hear how that’s done and some of the tactics he uses to save money, some of the tactics he’s used over time to make more money and a lot of good mind-set and strategy things so again,. I mean this show is so fantastic. You guys are going to love it so if you do make sure you do jump onto the show notes; biggerpockets.com/show305. Again, biggerpockets.com/show305. Leave a comment, leave a question and talk to Brad and make sure you review and rate this show on I-Tunes.

With that let’s get to the interview with Brad. Hi Brad, welcome to the Bigger Pockets podcast. Good to have you here.

Brad: Hi, thanks for having me.

Brandon: Yeah, yeah so I don’t know a whole lot about you. I know that you are a finance wiz and I know that according to Mindy you are a genius so I want to pick your brain today and find out how was it that you do a lot of travelling, I hear; 50 something countries. Is that right?

Brad: Yes, 54 countries since April 2015.

Brandon: Wow and you don’t look that old of a guy. I mean you can’t be a year over 75.

Brad: I’m 32 and I did finish in the top 80 of my high school graduating class so I am quite the genius.

Brandon: There you go. Okay so you clearly have something going on here that allows you to travel and do cool stuff and I hear some of that involves real estate, correct?

Brad: Correcto, yes.

Brandon: Alright so why don’t we get into your story? How did you get started with real estate?

Brad: Okay so when I got out of college I saved $8000 for a down payment on a house and I tried to find the cheapest house that I could find in a decent school district and I used a stated income loan which meant they didn’t verify my income or my assets and I remember actually the lender asking me, “How much do you project to make this year?” I said 50 000 and I ended up over shooting the mark by probably about 30 000 so luckily I had a roommate lined up.

I mean you could… it wasn’t hard to get a mortgage. This was the wild-west of mortgage lending back then in the like 2003 so if you could fog a mirror and then write your initial in that fog… the signature, yeah. So I got a 7.5% interest rate and got a roommate so I was sort of house hacking before Bigger Pockets coined the term and I had that house paid off by my 26th birthday and I remember celebrating by having my first steak dinner and the waiter asked me how I wanted my steak cooked and I said, “I guess just put it on the grill. Like, you know” so that’s how naive I was, but yeah it was my… had to act.

David: That’s pretty funny.

Brandon: Okay, I want to dive into this thing. First of all, how did you pay off a house; your primary by age 26? Like that’s… for most people you’re looking at 30 years to pay that off. How did that happen?

Brad: Well, it was only an $80 000 house so like I said, I found the cheapest house that I can find, my roommate was paying half the mortgage and I really focused on getting my income up while keeping my expenses low and I just allocated as my income went; as my income went up about $1500 a month to paying that thing down and then I didn’t buy my next house until I could pay cash for it.

Brandon: Okay so I want to ask a question that a lot of people maybe are wondering at this point; why pay off a house? I mean you’re a finance guy. Like, you know that if you are getting a 7.5%. Well, maybe 7.5 you couldn’t get, but the stock market averages more than that. Why not just throw your money into investments instead of paying off your house? Like, why not leverage?

Brad: It’s a good question. I wanted a simplified process so I was in real estate at that time and I knew the headaches that could come from all the documentation that’s required and securing funding. I knew that it could get messy and I wanted a deal where I could view it, quickly assess it and run the numbers on the back of an envelope. There were a lot of guys that were looking to pay cash for houses at that time. Like, when I was starting to acquire more properties it was very competitive because I think a lot of people keep cash on the side lines in case properties dipped in value and that ended up being what happened.

I like to keep my finances simple. I know the market well enough to where I know if I have one house it’s about $100 000 in income, once it’s paid off. If I get two houses; it’s about $2000 and go from there and then I just found that if I had less properties it was easier to manage and I could take better care of the tenant and I could take better care of the property so if that gives you an idea; yeah just pierce of mind. I don’t think you ever regret paying off a house. 

Brandon: Yeah that’s true. I mean I have a couple paid off right now and like I know that I am not getting the best return. I know I can get a higher return elsewhere, but like I just love the security that I find in my couple paid off houses and I hope to pay off more of them at some point.

Everyone has their own little path, right? There is no right or wrong. I talk about a book on the show a lot because it’s like my favourite book. It’s called Life’annaire. It’s like a millionaire with the word life and they make this point in this book and they say that essentially like the rules that you play by are determined by the goal of the game, right so if you are playing Monopoly and the goal is to wipe out every player then you play a certain way, but if the goal of Monopoly was to have the most diverse colours in your portfolio, like then that would be – you’d play it a totally different way.

The goal of the game was to let the get across from the table win; you would play a different way so the way you play your game is determined by the game, like the goal of the game. So they make this point of should you pay off your properties? Well, if the goal of life is to maximise every return has fast as possible then nom, you probably shouldn’t pay off your properties because you could maybe get a higher return with leverages, but the goal of life is not necessarily to get as rich as possible as fast as possible and whatever. The goal is to have a free life, right or something. Like you said, you wanted to be able to take better care of your properties, better care of your tenants and by doing that; paying off your properties you can do that; you get that security. Am I tracking with you here?

Brad: Absolutely yeah and I just read poor Charlie’s harmonic and one of the things that Charlie Monger says that if you’re comfortably rich and someone else is getting rich faster than you, so what. Somebody is always going to be getting rich faster than you.

Brandon: Yeah, that’s a really good point and I think it actually… I

Brad: Go ahead Brandon.

Brandon: I wanted to say it’s easy to do that. I think that it hurts a lot of people for making progress themselves when they compare themselves to other people like you’re not the same as the next guy who made you increment in fasting and eat for a three hour period and have nothing, but keel and tuna fish. It takes you longer to like get your diet under control, but when you see that person is getting results quicker than you you get discouraged because his Instagram posts look better than yours.

You’re like, “I should just give up”, right? And it’s dangerous when you start looking at somebody else’s game when they are playing by different rules than when you just look at your own game and the second point I would make to that is if you are the guy that can learn the somebody else’s… the game they’re playing you’re learn how to help them win. You’re the one who’s going to get ahead in life. Like, if you know what your supervisor’s game is and what their goals are and it’s different than yours and if you can play by their rules and help them they are way more likely to help you get ahead than when we just assume, well everybody’s playing the same game.

So he’s dumb, why is he playing it like that?

Brad: Yeah it’s a great point. It’s the old help enough people get what they want and you’ll have everything that you ever want and then to Brandon’s point where he talked about having a goal so when I got out of college I kept a note in my desk that defined financial independence and it said that financial independence is the ability to live from the income of your own personal resources and so that message kind of always inspired me and I think that if your income let’s say is intertwined with self-development and discipline and all that I think that financial independence in its pursuit is equally as threaded with wisdom.

I think there’s deep wisdom in it because simplifying your need and you’re developing emotional control and you have a long term perspective so all of that; I mean I had to figure out how do I live now versus how long I want to work and so I’ll give you an example of something that I did. There was a lot of pressure ion my real estate office to drive a fancy car and the thought was that if you drove a Mercedes or Cadillac that people are going to want to work with those people because they are demonstrating success with a flashy car and it’s not that I didn’t drive a POS car, but I did try to reduce my expenses in that regard and then I always thought that I would overcome that disadvantage by improving my communication skills and my presentation skills and my ability to both develop relationships so there are some offence there and there’s some defences there, but yeah, always have the goal in mind because that’s where you are going to focus; everything is going to kind of flow into that goal.

Brandon: Sure it makes perfect sense. So what came next then? Like you said you wanted to wait until you buy the next property until you can pay cash for it so when did that happen? Tell us about that property.

Brad: All of the properties that lead to my financial independence were purchased outside of that first property; were purchase between 2007 and 2013 and I had very strict criteria because I was after the highest return. I didn’t want anything flashy. I knew that there were specific neighbourhoods that I was targeting that I could get a cash on cash return of about 12 or 13% so every property that I bought was between 70 and $90 000. They could generate about $1200 in gross rent. Do you want me to go into details?

Brandon: Sure, please, yeah.

Brad: Yeah, yeah so they were renting for about $1200 at that time and the way that I would break it down since I was paying cash, I would do it monthly so in Texas we don’t pay state income tax, but we pay about 3% on the value of the home so 3% of 80 000 is $2400. I would break that down monthly to $200 so I’ve got my gross rent of 1200 less my $200 in taxes less my insurance which is about $800-900 a year so let’s call it $70 a month. So then I’m at 930, right. 1200 less 200 less 70; I’m at 930 and then I’ve got me HOA fee which is about $30 a month and so I knew that if I purchase a property for $80 000 that the $900 would get me… what I did was take the 900 and this was something that you can do on the back of an envelope.

Take 900 divide it by 80 000, multiply by 12 and you’ve got your; that is a 13.5% return. So that’s how I did it.

David: Okay so you just had this very simple formula. You said I want to make you know a cash on cash of 12-13%. For those people who don’t know – can you explain what cash on cash is? I mean you kind of just defined it, but what does it actually mean? Like what does cash on cash…?

Brad: Just your return; your income on the outlay of cash.

David: okay, so how much you…?

Brandon: Yeah, you put into it; how much you were getting back in cash flow every year based on what you put into it. What about things like repairs and maintenance? Did you have much of those? How did that affect your returns? Did that drop them significantly or were you not worried about it at the time?

Brad: yeah that’s a good question because I was very busy and didn’t want to do a lot of repairs so this wasn’t my side hustle. My side hustle was actually selling real estate once I transitioned into software full time, but we can get into that. Yeah so I tried to buy every property pretty much the same way. They were all built after 2006, they were all three bedroom, two bath, single storeys, not more than about $3-4000 in repairs. I knew exactly how many days it would take to rent or lease those properties so I had everything kind of built-in and then I would set up myself in the MLS to get notified by e-mail as soon as something matching that criteria came available. I went and looked at it that day.

Brandon: I love that. Go ahead, finish your thought.

Brad: I was just going to say it was very competitive because as I was saying earlier I think that a lot of people when the markets began to tank, a lot of older folks had cash on the side lines because it’s not like and this is my theory, but I don’t think that a lot of older people were putting a lot of money in the stock market. You tend to transition out of stocks as you increase in age and so I was competing with sometimes 123,13, 14 offers and it took me like 10 tries to get one property and at that time I was buying a property about every 14 months, maybe 16 months; somewhere in there. It was hard to get.

Brandon: Yeah well I love that you said that about you know I mean everything you just said. So it takes 10 offers sometimes to get a deal and that’s… I always joke around. It’s like high school prom all over again. Like I make a bunch of offers and you only get accepted once in a while. That’s okay, right? You are never going to get it if you don’t ask. I mean how many… I’m sure you guys have heard newbies say, “Yeah I’ve made a couple offers and noting really worked out so I’m just – you know I can’t really find any deals.” I’m like, “You’ve got to be persistent and consistent about doing this.” 

I love that, but also just the fact that I guess you knew what you had; that criteria from the beginning. You were just like, “This is what I’m going to do. I’m going to keep try to keep the emotion out of it. I’m looking for this property type. I’m going to set it up with e-mail; automatic e-mail alerts so that I can get notified right away so I can jump in.” Like, those are all things that work today for people. You guys should definitely be listening to this and putting in the practice, right? Like, get some e-mails set up. Get quick on that. Like, if you can – like, look at a property the same day it’s listed or make an offer the same day it’s listed, you’re like significantly better chance of getting that thing accepted and getting the deal when you work quick.

So was there anything else that you were doing? Anything else you were doing to find deals or anything that helped you kind of like get the competitive advantage there?

Brad: Well, the competitive advantage I think only that I was able to set myself up in the MLS system because I was licensed, but if you are not licensed pretty much any person with a real estate license would be happy to help you and set you up. I mean it takes 5 minutes to set up a system for the criteria that you’re looking for so there was nothing sexy about what I was doing. It was very basic. I was buying for cash flow and tax benefits. I viewed appreciation as land yap. It’s what we call it in Louisiana; Land Yap. It’s an extra bonus so yeah, I try not to speculate. I have strict criteria and what I was looking for and yah, that’s it, man. It was very targeted.

Brandon: Land Yap.

Brad: It’s French so yeah, I am originally from an hour south of New Orleans, if you can believe there’s land that goes down that far. Beautiful people and beach, a great part of the country. It’s like a new culture down there. Great people, great food.

Brandon: When we make bonus episodes should we start calling them Land Yap episodes?

David: Yes, yes; Land Yap episodes. I like that. That’s funny. Alright so yeah people who are listening to the show right now, if you don’t have automatic e-mail set up with a real estate agent like make that your goal. Like hey by the end of today I am going to find an agent, I’m going to get automatic e-mail set up for my criteria. Even if you are not ready to buy it, get it set up. Get e-mails coming in, start figuring out those numbers; what works and what doesn’t. Like, get in the game. It doesn’t cost any money to do all the stuff that we are talking about right now. Like, get on there and start working it. Very cool. So how many did it take? How many properties did you – maybe we can fast forward to today? I mean how many properties do you have?

I kind of walked through your portfolio and real estate and anything else that you’ve got for an income coming in?

Brad: Yeah do I have 5 properties that are in the range that I mentioned. I sold 6 so I did buy in 2011 one of those 3-storey mansions, but I kind of looked out because it did appreciate very well and so in terms of all of the passive income. That money I took and put into a van guard, high dividend yield account, but then I have 5 properties that I own free and clear that provide about $5-6000 in monthly income.

Brandon: That’s awesome. So with that money; $5-6000 a month you are bringing in now and that’s basically how you found financial freedom. I mean that’s enough, when you keep your expenses low you can pay your bills with that. Is that right?

Brad: That’s it. Your financial number is; it’s dependent on your expenses,. Basically, we all know the 4% rule which.

Brandon: Explain it what it is. Please do.

Brad: So we should all be tracking our nett worth, right which is basically just your assets minus your liabilities and if you can live on let’s say you have a nett worth of $1 000 000. If you can live on $40 000 which is 33; a little of $3300 a month you are effectively financially free. Another way to figure the same; the flip side of that. If you want to figure it out another way it’s just take your annual spending, multiply it by 25 and you have your financial independence number so it’s very personal. I mean they call it personal finance for a reason because your financially free number is dependent on how much you spend so you should be tracking your expenses if you have the goal of being financially free someday.

Brandon: Yeah so now, Brad you have a very interesting way you’ve accomplished this. It really comes down to like a three legged stool. One is obvious technique or ways that you have built up your income to earn more money. The other defensive techniques or ways that you keep your expenses low to be able to do this and then the third would be the mind set you have and I want to kind of cover all of those.

Can we start off with briefly sharing some of the defensive techniques that you put together that allow you to live at such a low base rate so that you could retire in your thirties, basically and travel or whatever. 54 countries it was on income from real estate?

Brad: Yeah, it started with house hacking so I had roommates until I was 31 years old. I’d mentioned driving used cars earlier. I would cook a lot of hamburger helper, tried to stay out of restaurants. I’m not a partier so I never was the $30 000 millionaire when I was 23 years old because yeah, I don’t drink much at all so I just kind of played defence that way. I mean I’ve kept a journal for 15 years now and I used to write every expense down and then when the I-Phone came out I started keeping my expenses on an app.

Even if you are tracking your expenses you will reduce your spending just by a function of keeping track of it.

Brandon: That’s so true. In fact, the book that we just launched at Bigger Pockets in How to Invest in Real Estate that Josh and I wrote. They talk a lot about it in there of just looking at what you are doing and keeping an eye on it like it basically puts you in the driver’s seat of your money versus the other way around where your money is driving you around and you’re just kind of hanging out or you’re locked in the trunk. You know like, your money is… you say, “Hey, this is what I make. This is what I am spending” and by knowing it you automatically are generally going to improve that metric or whatever. I mean this is true with all business. Like, if you start tracking how many deals you are analysing you will probably increase on the number of deals you are analysing.

If you start tracking how many calories you’re getting, you’re gaping to naturally start eating less calories. Like, it’s just a function of human; it’s tracking. What’s that famous quote; it’s like what gets measured matters or something like that?

David: Yeah, I’ve also heard inspect what you expect. If you expect a result start inspecting those things and it’s true. It puts it into your sub-conscious; your articulate activating system starts paying attention to stuff and you’ll catch yourself like when I was tracking my calories; I think I used My Fitness Pal and you ride in there like this is what I’m eating and it tells you. It would be like I’d be tempted to snack, but I’d be like, dude do I really want to pull out my phone and put the information in? Forget it. It’s not worth it, right and I just… I would not do it whereas now if I am not tracking it, you’re going to snack.

Brandon: I used this thing. I’m using this thing called My Body right now. It’s this service where like you have a personal trainer basically a fitness/food coach and every day I put my food in there, no matter what I eat, right and they just every day he looks at it and gives me advice, like “Hey this worked really well. This didn’t work really well.” I’ve lost like 25 pounds in four months now off of doing nothing, but like writing down my food and having somebody else say like, “Yeah.” I’m not making any changes or any weird diets. It’s just like, I’m writing it down.

Brad: The rise of the algorithm, crazy.

David: You said you’re using an app to track this? What app are you using?

Brad: Toshl. T-O-S-H-L.

Brandon: I don’t know that; Toshl. Tell us about Toshl.

Brad: It’s not very widely used. I’ve mentioned it to several people and nobody ever says, “Oh, I’ve used that too.” So I know there is a lot of apps out there. It’s just, I don’t know. It’s basic. You plug in. You know if you go to a restaurant you put in food and drinks and then it calculates it for… gives you a pie graph and just enables you to track it.

Brandon: Easy enough. The easy apps are probably some of the better ones. They don’t get too complicated. I think that’s fantastic. Alright so the defensive, right? Is there anything else you want to throw in there before we move onto offensive?

Brad: I would just say that I was very deliberate about whether my lifestyle would increase so if I was making $4000 a month and I was living on $2000 a month; if I had a big month because I was in sales. Let’s say I made $8000 in a month I would be very deliberate about increasing my lifestyle so I might give myself a 10% raise and then I’m living on $2200 a month and the whole idea, because I have this goal of being financially independent the idea is to maximise your savings and investments and you are only going to be able to do that if you know how much you are spending every month and I’ll tell you one of the cool things that I do when I track my expenses is if I fall way underneath my target. Let’s say I want to spend $4000 a month, if I get to the 28th of March and I’ve got you know 2 or 3 days left in the month and I am $400 underneath well then I can treat my friends to dinner and they are none the wiser, but that’s the kind of thing that contributes to lifestyle that you can do when you know how much you are spending.

Brandon: That’s cool. Alright, so what about offensive? What do you do to make more income in your life? You started out making almost nothing when you made that first deal. So what have you done? By the way what about your job through all this and do you still work today and then what do you do for more money?

Brad: So my first four years of my career out of college I was in real estate full time so it was commission only. You don’t eat if you don’t sell something and I remember thinking when I got out of college that I was going to be so overmatched because if you think about it a 42 year old, if they started working when they were 22 as 20 years’ experience. The 24 year old who has 2 years’ experience has the 42 year old has 10 times the experience that the 24 year old does, right? 20 versus 2 years of experience. So I just remember thinking, “I’m going to devour every book on sales and negotiating that I can get my hands on” because I was so concerned that I was going to be overmatched and then I did was Zig Ziegler recommends and turned my car into a mobile university so I am just – Houston traffic is brutal and if you can be trying to get like… I mean you basically can get a four-year degree just sitting in Houston traffic for a year so I’m just trying to increase my income as much as possible while keeping my expenses down, learning everything that I can so I can compete and by the way I found out like there’s nobody out there reading books on sales and negotiating. Like that 42 year old is going home and watching Netflix like everybody else.

Brandon: In almost every area of your life, right? If you want to be really, really good at something, like if you’re in sales or if you are in any job that has any ability to increase or grow, like just by reading some books on the topic you will be one of the best. My little brother is a waiter at a place out near Boston and I always tell him, I’m like, “Chris, like just go” and he will probably be listening to this podcast. I’m like, “Just go read some books on like how to be the world’s best waiter.” I can almost guarantee that someone has written a book on being an amazing waiter or go sit down and like ask some like incredible waiters and he actually did this. He actually told me that he sat down with the best waiter at his restaurant and said, “Tell me, how did you do this? How did you become like such a good waiter” and like people are very open to share that, but it’s 1% of the world that actually does that kind of thing; invest in themselves.   

Brad: That’s a great point. I see a stack come up every once in a while that says that 70% of college graduates never read a non-fiction book after graduating. That is astounding, right, but it makes it… it’s so easy to separate yourself when you know that kind of thing. I remember seeing a quote. I believe this was Jim Rome which I know gets mentioned on your podcast quite a bit.

Brandon: I quote him like every day.

Brad: Yeah, he said that the true rewards n life are on the top shelf and the way that you get to them is by standing on the books you read. So I just devoured everything I could, man and I am still a reader. I probably read; finish probably 35 books a year and a few of them I will read twice.

Brandon: Other than real estate, this is probably the topic I am more passionate about than anything else because so many people start off with the excuse of how it’s hard or they don’t know what to do and so few of them understand like once you stand on a couple books and you reach the top shelf you’re like, “I cannot believe how easy that was.” I mean I have example after example of how I rose to the top or whatever I was doing and that was before I had any confidence or any focus or when I even was trying to. I was trying harder than other people did and boom – became the top.

I was a police officer. I transitioned into full state; full time real estate sales two months into the year so I had ten months when everybody else had been doing it the whole year. I finished by first year as the top agent in the biggest brokerage in our entire area and I didn’t even know what I was doing yet. I did not have sales skills. I am not really the easiest guy to talk to. I hear from everybody like 5 times a day that I am really intimidating. It’s all I ever hear. Nothing you want in a sales person, right, but no one else was trying. I wanted it so bad. I was listening to 3 podcasts a day.

I was reading every book. I was talking to everyone I knew that was really good at it and I am absorbing stuff with purpose and my insecurities about how I did it wasn’t a good sales person drove me to want to excel in that area and Brad is talking about that and once we finish up talking about his offensive techniques we are going to get into his mind set and how that was developed, but what I want to convey is if that is if you are that person who is like, “I don’t know how to analyse deals.” I guarantee you that that will become a strength of yours if you pursue the trick to analysing deals or if you think, “I don’t know how to network.” Like, you can become the best networker on this podcast because you would be intentional about learning those networking skills where like the natural who just does it without trying will never read a book in their life like what Brad just said; will not focus on trying to be better at it and won’t grow that skill. I just have so many examples that I can’t take up the hoe podcast talking about it, but if you want to be the best in this country right now, you are surrounded by millennials that don’t want to be the best. They want the world to be given to them.

You are surrounded by older generation people who don’t want to have to learn new stuff, right. They are kind of stuck in their own ways. If you are the person that can improve your skills at anything and make it known to your boss you want to; oh my God everybody is going to want you. You are going to be the top guy. Brad, can you… I know that for 13 years you increased your income year over year every single year. Can you share a little bit about; other than reading books what you did that caused that to happen?

Brad: Yeah you made a bunch of good points just now especially I wrote a blog post about networking because I think it’s so important that people understand that good networking doesn’t look like networking. It is becoming a person of value to other people and that is how you build your network so that’s number one. So you are going to surround yourself with a higher calibre of person as you continue to develop yourself and you are going to learn to make the highest and best use of time which might be most important as well as developing your habits. I think habits are everything, but if you just keep your head down or let’s say ten years and work 10% harder than your peers; the compounding effect of that is going to be huge so when you pick your head up in ten years and you look around you are going to see that you have separated yourself and it’s because you have incorporated these habits and disciplines into your life and I’ll tell you if I give a talk or something or am given an opportunity to speak to young people, these are the 3 fundamental things that I suggest and that is number one is to keep a journal and a journal is where you put your goals, it’s where you put who you met.

So one of my favourite books is How to win friends and influence people by Dale Carnegie and in that book he said that a person’s name is the sweetest sound in the English language at least to them, right, but it’s happened to me several times that I write everyone’s name down when I meet them; it’s happened where I’ll meet someone for a second time and I’ll call them by name and they’ll say, “I think we have only met once. How do you remember my name” and I don’t say it, but I am thinking,” How could I not? I wrote it down the night I met you.” So it’s those little idiosyncrasies that help you to build everything, right? I mean that is networking stuff right there. That is building relationships, but in your journal you put your goals, who you met, what you learned, how it impacted you, it helps with clarity, it helps if you have any type of anxieties, if you want to start your day with like a gratitude practice and find 3 different things that you are grateful for that is going to improve your mood which is infectious and so that’s number one is keeping a journal. 

I think that’s probably number one in terms of if I had to attribute one thing to whatever successes that I’ve had it would be keeping a journal. Number two would be

Brandon: Real quick, before you go to number two. I was going to say Bigger Pockets actually has a real estate investor success journal coming out called 90 days of intension coming out here at the end of the year so if you are listening to this after the end of the year go to the biggerpockets.com/store and if you are listening to this right now; it might actually be in pre-order right now. I am not sure, but check it out biggerpockets.com/store and you’ll see it there, but yeah I also believe strongly in the journal thing. It’s been a huge impact in my life.

Brad: Yeah and you can see how you grow over the years so like I can look back and see what I was thinking when Barak Obama was elected and then I will be able to and that to my kid. I mean how cool is that, kind of thing? I can also see when I was 24 and 25. what I thought was important and then I’m like, “Wow, my growth is pretty impressive. I can’t believe I cared about that stuff when I was 24.” So yeah, that’s huge. Number two would be and we talked about it already, but just start buying books. You can’t spend enough money on books. View that as an investment. It shouldn’t even factor into the budget stuff because that’s going to improve yourself immensely and really separate you. So many people are distracted nowadays so if you can just immerse yourself and absorb some knowledge from books everybody who’s had success has written a book. You’ve written a book right, Brandon?

Brandon: I have and so has David.

Brad: Yeah.

Brandon: It’s a good way to reach massive amounts of people you know like in an easy way so yeah. Read books. Read books. I love it.

Brad: Yeah and the process probably sucks, but once you are done with it’s just wonderful and you can pass that down forever so good for ya’l for writing a book. I’m not there yet. I’m in the blogging space, but eventually I will write a book.

Brandon: Go to Google later and type in how to write a book in a hundred days, Brandon Turner. Like, I wrote a blog post and I did a podcast episode for somebody else’s show on how to write a book in a hundred days so everybody listening to this too; if you want to know how I wrote my book; all of my books in a hundred days that will document exactly how I did it. It’s way easier than most people think so check it out.

Brad: Awesome and do you guys have a like your own publishing house?

Brandon: Yeah we do; Bigger Pockets Publishing.

Brad: Nice.

Brandon: Yeah it’s pretty fancy so there’s also there is a process of getting published at BP too. And I don’t know it so if anybody is listening to this and saying, “Hey, I’m going to write a book and I’m ready to e-mail [email protected] and ask to be connected with the book department. There you go.

Brad: So where was I?

Brandon: You were at number two. Buy books. What was number three?

Brad: Thank you. Number three is set goals and you’ve got to have different categories. Whatever is important to you so spiritual, financial, family, relationships; write those things down. For 15 years I have taken time at the end of the year; reflected gone over the past year, see how I can harness what I learned, who I met and see how I can get better for the next year and that is the best way to do it. I don’t care if an asteroid is coming toward earth. I am going to get those 90 minutes done the last day of every year so that’s really important to me.

Brandon: I love it. My wife and I go out to a restaurant every single year on January 1st and we sit down at the same restaurant and we purchase the same meal and we go over our goals or last year and what we are going to do this year and it’s been – I mean just looking at year after year after year because we have the same little notebook for each one,. It has been unbelievable just to see the growth and whatever we are setting we tend to – it tends to happen and in fact, we tend to exceed our goals for the most part because when you write it down and work towards it amazing things happen.

Brad: Beautiful.

Brandon: You have an amazing way of looking at the world where you just recognise like no one else is negotiating. I am going to make sure I learn how to negotiate. Nobody else is trying. I’m going to try harder than they did. Can you share a little bit with us about how you developed this mentality? Like what you went through that caused you to end up here?

Brad: Yeah I can actually pin point a day that changed my relationship to yeah; so November 7, 1991 and the day – the reason I remember the day was because Magic Johnson retired on that day when he announced that he had HIV and I remember not knowing what HIV was and that was pre-Internet days so I would wait until my dad got home and I would ask him what HIV was, but when my dad walked in that day he – his eyes were blood shot red and he looked like he had been crying and I had never seen a grown man cry before so I knew it wasn’t good, but he told my brother and me to sit down and he said that he was leaving.

I was 11 years old at the time and when he moved out of state I knew that he wasn’t coming back. I mean he had started a new family and so my mom was psychologically and emotionally let’s say unwell and she didn’t have a job and I remember thinking like, “Am I still going to be able to”. Like, I didn’t know where money was going to come from and I remember thinking am I still going to be able to eat like I have been and so it was a very precarious time in my life and I had stuff to talk about, but it drove me to do things that I wouldn’t have done and IO can give you an example so my first experience with business and with money was; I was 13 years old and I would go to the trading cart store with the money that my grandma and my aunts had given me for Christmas or my birthday and I would stock pile that money and then I would go to their trading cart store and buy a box of basketball cards and the boxes were $40 and there w\ere 36 packs in a box and I would take them to school; the packs and I would sell them out of my backpack for $2 a pack and so I would make $32 on each box which is like an 80% return.

I have been able to replicate the returns that I made at 13, but yeah at a young age I learned how to manage money and I learned how to invest and I learned the discipline and delayed gratification of not opening the packs because the packs that I would not sell I would bring home with me and then I am starting at them all night and I wanted the Shakil O’ Neill card that was in there, but I couldn’t open them because then I would be sacrificing all of my profits.

That was kind of how I got my start and where I learned discipline and delayed gratification and it wouldn’t have happened if I hadn’t been through a tough time like that.

Brandon: Yeah that’s’ delayed gratification. It’s huge. We all know like many of us have hard the study. The marshmallow test or like I can’t remember what famous

David: Stanford University.

Brandon: Yeah where they like gave a bunch of little kids like one marshmallow, but if you wait five minutes you can get 2 or something like that?

David: Yeah they put them in a room and they said, “I’m going to leave this room and come back and if that marshmallow is still there I will give you a second one and then you can eat them both” and then they left and they tracked those kids over the next 25 years of their life and they found that the kids that had the ability to delay gratification and not eat that marshmallow were like noticeably more successful than the children who were not able to do that and the implication was that if you can delay gratification then you are successful compound and that is exactly what Brad learned. Like he had to fight a battle at 11, 12, 13 years old that then when he overcame it; the ability to not open the baseball cards and delay gratification served him in all areas of his life and it’s funny that you were to never thought of time that would be a blessing, right?

It just felt like a horrible curse.

Brad: Right, because when you go through the depths of a dark place and you come out of it as long as you don’t self-medicate or drown your sorrows in alcohol or something you come out stronger and wiser and your relationship to fear is forever changed because I mean as I got older I noticed that relative to my peers I had a serious capacity for stress and an aptitude for risk taking that would probably break most people and for me, it was just a Sunday at the park.

Like, I didn’t understand how people couldn’t get over the most trivial of hurts and so I became like this anti-fragile like beyond  robustness and resilience where it served me in so many different ways and a good buddy that just started investing in real estate and at my wedding in May he stood up and said that half of what he does he’s copying my example and so his story is really interesting because his brother died not too long ago; his only brother and he was only about 40, 41 years old and it was really rough. I men he had to carry the guy upstairs and he lived with him until he died and he told me a few months ago. He aid you know after what I have been through, he said, “I feel like nobody can… with me.” And when he said that, man it resonated with me so strongly because it is exactly how I felt most of my life and so you face rejection and you swipe it off and you face you know like losses in your portfolio and you dust it off. So yeah you just become – you have a strengthened resilience where you are bold where other people might be apprehensive and it’s just powerful man, but you have to struggle through it, you have to endure it and your relationship to pain is forever changed. 

Brandon: Tell us about some ways that you changing your relationship to pain assisted you or helped you in your real estate investing.

Brad: Probably rejection. So I was a sales guy and I also played college baseball so I have been successful like 30% of the time and that is success in baseball so in sales, as long as you continue improving your communication and presentation skills your batting average is going to go from 20% to 30% to 40% so I would say more than anything probably just the resilience and the ability to bounce back from anything life throws at you.

Brandon: I love that.

David: Yeah that’s really, really good. Anything you want to add, Brandon before we go to the fir round?

Brandon: Yeah I’m just curious of where do you see yourself heading next? You know you have got this like what I call a level one financial freedom which is where you get to pay all your bills and it’s not like I am going to go buy a jet and go you know buy a basketball team, right but like level one is like I can pay my skills. I am good, I can travel a little bit, I can have a good life and keep my expenses low. Do you plan to try to like just super charge that and go become a multi-billionaire here or where do you see yourself headed?

Brad: I don’t. I think that I have more time wealth than a lot of billionaires so on Thursday I’m headed to Munich for three weeks and my wife is going to meet me there so one of my retirement gigs is touring people around central and eastern Europe and I am able to do that because when I was in my travels since April 2015 one day I was sitting at a cafe and a guy said, “Man, you ought to turn this into a business” so I do that like two or three times a year where I’ll show people around Munich and Prague and Budapest so that’s one thing that I am able to do that if I was climbing the hierarchy I wouldn’t have the time to do and financial freedom is not only like those at the top of the hierarchy aren’t financially free. You don’t have to opt out of the hierarchy altogether if you are going to be financially free so as it stands right now, I still help a few friends with real estate deals if I am in town, but I am enjoying writing and I am enjoying travelling. I’m newly married so the sky it’s wide open. Man, I’ve got – we don’t have gaudy tastes. She’s not into Louis Viton bags and yeah, I mean if worst comes to worst I guess we could move to a low cost area that I am familiar with and live off of what is like you know if you live in America you’re in the top 1% of  income earners everywhere so .

Brandon: Yeah, I love that you said time wealth, right like so many people are worried about wealth; like money wealth, but there is something more powerful and that’s time wealth, right and when people hear y o know wealth and financial freedom and getting real estate and getting all this stuff. Whenever I think of the fancy cars and the Louis Viton bags and all that; it’s like how the world sees what we do, but that’s not why most of us do it. Like, right we want time wealth. We want to be able to like, “Hey I am going to spend three weeks showing people Munich.”

Like what a cool thing, right? It’s not like we are all lazy and we don’t want to work, right? None of us will ever stop working entirely and sit and watch TV every day, right? Like, this isn’t retirement in like our grandparent’s retirement. It’s the freedom… How I would describe financial freedom is like I’d say it’s the freedom to do what you want, where you want and how you want, when you want with who you want, right?

Like, nobody is going to tell me that I have to drive an hour to work every day and sitting in an office trying to climb some hierarchy. That’s what we are talking about here and you do not need hundreds of properties to get there. I love that you did it with five.    

Brad: Yes, I think you said it. Life on your own terms and if you take a macro perspective you realise that what we are able to do has only been possible within the last like 1% of human existence so take advantage of it if you can.

Brandon: Yeah, fantastic. Well, I love that and I want to kind of end this segment of the show on that and transition over to the next segment of our show; the deal deep dive.

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Brandon: Alright, let’s get to the deal deep dive and this is a part of the show where we dive deep into one particular part of your investing. Like one specific deal I’m going to ask you a bunch of questions about that so let’s just go and jump right into it. First one, you have a deal in mind, right; something in your head that you can talk about?

Brad: Yeah they are all very similar so it should be easy.

Brandon: So let’s go to the first one. Like, from a… I’m going to ask you like how you found it and all that in a second, but like first of all what is it? Like, a single family house, I’m assuming? 

Brad: Yes, three bedrooms, two bath, single storey, built after 2006; that’s my target.

Brandon: And where was that located?

Brad: In the Houston area.

Brandon: Alright perfect so how did you find it?

Brad: I set myself up in the multiple listing service with very strict parameters and I was sent a notification by e-mail and I went and looked at it that day, ran some numbers on the back of an envelope and made an offer.

Brandon: Perfect, alright how much was it?

Brad: It was 80 000. I mean I had some that were 72, some that were 80 so between 70 and 90 were all of my deals, yeah.

David: And what kind of property was it, I guess?

Brad: A single family dwelling that was about 13, 1400 square feet.

Brandon: Okay. How did you negotiate it? Anything fancy in there?

Brad: Nothing fancy. I was competing with people who had cash so there were some things that I could do like reduce the option period or do you guys have option periods where you live?

Brandon: Yeah well it depends. Explain what you mean.

Brad: Yeah so in Texas you have the standard is ten days and you have the unrestricted right to terminate for any reason.

Brandon: Oh yeah we have that.

Brad: Oh okay so yeah you pay for that, right typically $100 or $200 and should you buy the house it’s applied towards your pre-paid’s and closing costs, but it just gives you an opportunity to inspect the house and negotiate repairs, but you could actually back out because you decide you don’t like the colour of the front door.

Brandon: Okay yeah we have inspection periods. We have that, but we don’t have like you can ask for an extension period or you know when you offer it you put the inspection period in there, but yeah we don’t have the option, but I have heard people do that, but I never knew what states have that and who don’t, but apparently

David: I think in Texas it’s like no matter what it’s built into like the lot that you can back out after ten days for any reason. Is that right, Brad?

Brad: Within ten days, yeah.

David: In other states you have to ask for the period you would like and they have to give it to you. It’s in your offer.

Brandon: Real estate is very local. Right, how did you oh I guess I’m taking all the questions. David, do you want to do any?

David: No, I think you’re doing great. How did you find it?

Brad: Cash.

Brandon: Perfect, cash. What did you do with it; you held onto it, you flipped it? You know what was the long term with it?

Brad: Yeah I have bought and held every investment that I have ever made except for one which was that 3 storey house that I mentioned earlier so Warren Buffet; he was giving a talk to college grads and he said, “If I can give you a punched ticket that you could only punch 20 times in your lifetime and that was all the investments that you were going to make I think that you would come out ahead doing that.” So that was his advice and I have kind of taken that so I don’t have more than 20 investments, total.

Brandon: So I am curious if you had held onto all those basketball cards that you sold, what would they have appreciated to at this part in your career?

Brad: That year was a really bad draft so I felt like Albert Shaney and like Isiah Rider; a lot of flops so they are not worth anything. 

Brandon: It’s a good thing that you flipped it.

Brad: Yeah exactly.

Brandon: That was in 2005. Okay so I think that was the outcome. I’m going to take to David. I’m going to take all the questions today on the deep dive. What was the outcome? Are you still holding it today? How are you managing it? I mean I am assuming you still hold it because you don’t sell them, but how do you manage it and how do you deal with that property?

Brad: Yeah I manage it remotely myself and that’s another thing that where can really benefit from nowadays with the advent of all the technologies that we have. You can manage a property. I have Skype interviewed tenants; perspective tenants from Bolivia and Budapest and Bangkok. Like, it’s if I can’t meet them at Starbucks I will Skype interview them and then obviously you don’t – there is no such thing as mailbox money anymore because people pay you directly through your account.

If I have a problem I have a GC or General Contractor that I hit up and he goes out to the property and lets me know what it’s going to cost and if I think that’s ridiculous I’ll get another one out there, but yeah you can do that from anywhere in the world.

Brandon: Alright last question. David, do you want to take this one?

David: Yeah, what did you learn?

Brad: What did I learn from?

David: From this deal.

Brandon: Yeah, any lessons learned?

Brad: I would say that any lessons that I have learned like mistakes; is that what you are after?

Brandon: Well maybe you did something right and you’re like, “Oh wow, I want to do more of that” or yeah mistakes can be the case too or what did you walk away from this deal thinking like, “I just learned something big.”

Brad: I would say mistakes only in hindsight because I think that my investing strategy has been sound, but I would have taken more calculated risk when I had a large income which I don’t have a huge income anymore so I’m playing defence in terms of my investing strategy, but yeah I probably would have leveraged a little bit and my wife and I are going to use that on a house here pretty soon.

Yeah, I am not opposed to leverage.

Brandon: Exactly.

Brad: So anyway yeah. I don’t know if that actually answers your questions, but yeah mistakes only in hindsight, but of course you would change your investments a little bit of you know knowing what you know now.

Brandon: Yeah it’s great. It’s great. It’s a good deep dive. I love just how like simple and I don’t mean that in a bad way. I mean that in a really good way; how simple your strategy is. Like, you don’t complicate things. You’re not like, “I’m going to do this and I’m going to do this.” Like, this is what I want, this exact style of house. I’m going to go out and get it and now I’ve got it. I’ve got financial freedom. Done. 

Brad: man, I told you where I finished in my high school class. I figured I had to master the fundamentals if I could; just kind of do the basics.

Brandon: Fantastic, super. Alright well let’s head over to the next segment of the show; the fire round.

It’s time for the fire round.

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Brandon: Alright today’s fire round. This question comes direct out of the Bigger Pockets forum so we are going to fire them at you right now.

First question – has anyone compared the returns of like stock; a stock portfolio against investing remotely in real estate? I wonder if you ever looked into that or would you get better returns because some of you asked if you had other investments and you said no more than 20 so you probably have some stock portfolios still, right?

Brad: I do yes. Stocks go up 7 out of 10 years so real estate has historically appreciated except; as far as I know except for the great recession. I mean I haven’t looked at stats gone back to the great depression, but as you said earlier, Brandon real estate is local so if you asked me a question about the returns in your particular market. It is going to be a whole lot different my market which is different from San Francisco, Miami so it’s a sticky question. It’s a tough question because it varies so much depending on where you are located.

Brandon: That’s so true. It’s actually a good answer, actually.

Brad: Thank you.

David: Yeah and you also have to factor in like stocks typically in my experience or what I do in real estate investing, but I also just click a button and I have a stock and I don’t do anything, but real estate investing takes a little bit more work, right so it’s not an apples to apples comparison in that way.

Brad: Yeah that’s a good point. I think that real estate allows you a little more control which is appealing to me. Yeah, but I am not opposed to stocks. In fact when I sell – did I mention this already that I have a Van guard account and I go for a high dividend value type stocks; almost as like a holding place for cash that I intend to use f or real estate and I know that’s a little bit risky and I am certainly not recommending that strategy, but that’s how I handle my portfolio.

Brandon: Okay.

David: I like that. Brandon and I talk about having more tools in your tool belt and that’s another tool if you understand stocks, you factor that into what you are doing in real estate and you can amplify your returns. It’s less risky for you to do it than me because I don’t know stocks, right so I am not going to do it, but you are a little more knowledgeable. I like that.

Brad: Yeah, I wouldn’t say that I am super knowledgeable about stocks. I just sort of pay attention to what’s going on around me and if everybody is Netflixing and chilling and everybody has got Amazon boxes by their front door. Like, those are the things like when I was in software everybody was using sales force.com and Amazon web services so just pay attention to what people are doing and that’s the stuff that I try to invest in and it is never more than 10% of my total wealth let’s say, but I think you should take a little risk with some of your portfolio.

David: I personally invested in Brandon Turner when his stock was much lower and it has gone up quite a bit so it’s doing well.

Brandon: Yeah the beard has helped quite a bit. I’m like only if you bought it in Tessler. Next question; if someone has the money to pay a mortgage in full should they do it or should they invest it in new real estate?

Brad: Well I think Dave Ramsay would tell you to pay off your house. He believes that’s the standard symbol of choice instead of, what does he say; the BMW. So yeah you don’t ever regret paying cash for a house or paying off a house and I believe Dave Ramsay also says that the grass feels a little differently after you have paid it off and I can kind of relate to that.

Brandon: Does that – doers your answer change depending on the age of the person who is asking?

Brad: I’m so glad you asked that question. Man because I notice that if people are 33 and under then they have not yet and we are in 2018; if you are 33 you have not yet lived through a – you have not had to show up to work and deal with your boss who has seen his 401K cut in half. You haven’t seen your co-workers lose about a third of your co-workers lose their jobs so you are going to have a completely different mentality to somebody who lived through that great depression or somebody who lived through the circumstances that I have just talked about.

We are in an incredible run with real estate and the stock market right now; a nine year ball market that has – its unprecedented so yeah I think that definitely shapes your mentality. 

David: That’s a really good point; really good.

Brandon: Alright, next question. To MBA or not to MBA? So this person was asking because basically they can get into a really good MBA programme which you know an average graduate getting out of it is 100K a year at a business or should they just focus on their real estate? What do you think? 

Brad: Ooh, it’s a tough question because I do value education, but with education materials being so ubiquitous now you can log onto YouTube and learn just about anything you want to learn. So it’s a toss-up and technology; we were talking earlier about algorithms and how it’s changing your health. I mean my brother is a pharmacist and there’s a good chance that his job is automated 15 years from now, right because an algorithm might be less likely to make the same mistake that he does as a human being so yeah I think I’d go with the real estate, man. 

Brandon: That’s a good answer. I never thought about that with pharmacists, but you’re right. They are going to be like cars, like eventually they will do away with them.

David: I worry about this quite a bit, actually. Part of it is my – I just you know I’m a cop and always looking for threats and so always thinking of what can go wrong, but there’s all this pressure right now to increase minimum wage; pay people at Mac Donald’s $20 an hour because no one can live on less than that, right and at what point do they just like, “You know we really don’t need these people at Mac Donald’s, right? We just complain about their bad attitudes.” We go in there and we choose right off the screen and then they build machines that can build it without a person putting the ketchup on the bun. They just put it on a conveyor belt and it makes it for you and now like Mac Donald’s decreases their workers by 80% or whatever and we have a smaller tenant base of people just taking all of our rentals. They can afford it so I think it’s something just to keep in mind like as technology is getting better; the need for people to do stuff is going to be changing.

The job you choose is very important and the skills you build become very important because if you are just living that comfortable life where I don’t want to build up on skills. I don’t want to be out of my comfort zone you are one of the first people that the computer is going to replicate, right like you are the one Ian Musk is going to replace before anybody else so you should have a little bit of like you know I want to read these books and educate myself so that I have a position later on in life.

Brad: That’s exactly right, David. That’s a good point. I think the best defence against that is developing yourself into a life-long learner so that you can adapt to changed circumstances and new environments.

David: Amen, I love that. 

Brandon: Alright the last question of the fire round.

David: The last question; would you buy a property with pending tenant evictions?

Brad: It’s a… it depends question. I guess it depends on the circumstances. I have had tenants before that had really poor credit scores, but I met them and I liked them and I talked to their employer and their previous employer; their previous landlord and the landlord before them because previous landlord is likely to lie to you to get rid of them so I have taken chances on people because I think that I have become really good at vetting people and I am a good judge of character. I think everybody thinks they are a good judge of character, but yeah I’ll make exceptions in certain circumstances.

Brandon: What I love about what you just said there and I want to point this out because I want people to understand. You didn’t say this person had really bad track record and they had a pimple and they had a couple of evictions on their record, but my gut said they were fine so I went with them. You said I checked all these other things and I did all of my homework anyway and there was this one thing or this little you know like I can make an exception there. Like, you did your homework anyway, but the problem people have is like you know there are so many red flags here, but in my gut – I am going to go with them and that normally always ends bad, but you were like you came at it from an analytical standpoint of like, “Yeah they were great in every other regard. I’ll mend this one a little bit.” 

Brad: That’s a great point. I think that people deserve a second chance. I have a great relationship with my mom and dad now, right so yeah. I love them to; yeah.

Brandon: And this is like you went through a really hard part when you were 11, 12, 13 like that is hard and it shapes you into who you are today, but you know I am glad you turned that around so that’s super cool and you are who you are today because of those things so who knows where you would be without it.

Well, we are getting deep here. Let’s get to the next segment; the last segment of the show; our famous four.

Alright, let’s get to the same four questions that we ask every week. Number one, Brad, do you have a favourite real estate specific related book?

Brad: Ooh I know a lot of people who would answer that question Rich Dad, Poor Dad and it certainly taught me the difference between an asset and a liability, but I am going to say The Richest Man in Babylon. I really liked that. It’s not necessarily real estate specific, but it got me saving and investing a large portion of my income in real estate so that’s going to be my answer.

Brandon: Okay what about a favourite business book?

Brad: So many. My favourite biography is Titan which is a John D. Rockefeller book. I like all of the Robert Greene books like Mastery and the 48 Laws of Power. My favourite memoir is probably Shoo Dog by Phil Knight.

Brandon: I keep hearing that and I still haven’t read it yet.

Brad: Yeah it’s really good.

David: Okay what are some hobbies that you enjoy?

Brad: I enjoy travel obviously. I enjoy staying fit and hanging out with the wife and I like reading a whole lot, journaling, meditating. I am a bit of a weirdo, man. I go for walks and I spend a lot of time in my head just thinking and writing and that kind of thing.

Brandon: That’s cool. What is your favourite place you have ever visited out of the 54 countries?

Brad: Ooh. I really like Croatia. I think it is underrated probably because it’s on the other side of Paris and Italy and all of that, but it is beautiful. It’s got history. It’s got islands.

Brandon: I’ve never considered it, but I’m going to consider it.

David: I heard their beaches are some of the best in the world.

Brad: Are you saying that because they are topless or?

David: I didn’t know they are topless, but now I have to wonder like who am I getting this advice from.

Brad: Yeah they have a lot of rock beaches so you have to wear like swims they call him. You know like the kind of shoes that you can wear in water. There’s not a lot of sand, but there are some beautiful rock beaches.

Brandon: Cool alright, last question. Brad, what do you think sets apart successful real estate investors from those who give up, fail or never get started?

Brad: You’ve got to take action. Once you have read all the books and analysed the deals and you are set up in the system beyond that you go look at the property, but you have got to take action and once you do I think that you will probably get addicted. It’s like getting a tattoo, man. Once you have one you are going to want to do the next one and the next one.

Brandon: Do you have any tattoos?

Brad: I do not, no. I adhere to the… I adhere to the Kim Kardashian standard of why would you put; what does she say? Why do you put a bumper sticker on a Bentley?

David: I like that. That’s funny.

Brandon: Alright well, last question for you, Brad. Where can people find out more about you?

Brad: So my blog is manoverfseas.com.I write about financial independence and talked about that travel; the kind of stuff we talked about today and I also mentioned that I am headed to Munich on Thursday because one of my retirement side gigs is touring small groups through central and eastern Europe so there is a section on the blog devoted to that and then I of course am on Twitter, Instagram, Facebook and I’m @man_overseas. 

Brandon: Awesome. Good deal.

David: Thank you, Brad. This has been awesome having you on today’s show. I love your story. Thank you for sharing some of the stuff that you did and giving people an actionable road map that they can follow and show them you don’t need a hundred houses to hit financial freedom and live the life you want. Did you have anything you want to add, Brandon?

Brandon: No, that’s pretty much it. It was an awesome show so Brad, thank you very much.

Brad: Thank you guys. I enjoyed it.

Brandon: Alright and with that we are going to just take this show out so if you guys enjoyed today’s show make sure you leave us a rating review on I-Tunes and of course come back next week for another real estate investor interview so I’ll tell you what; David Greene, do you want to take us out officially?

David: This is David Greene for Brandon stock-is-rising Turner signing off.

You’re listening to Bigger Pockets Radio simplifying real estate for investors large and small. If you are here looking to learn about real estate investing without all the hype you are in the right place. Be sure to join them and millions of others who have benefited from biggerpockets.com your home for real estate investing online.

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In This Episode We Cover:

  • How Brad got into real estate
  • How he increased his income every year for 13 years because he was fanatical about self-development
  • How journaling impacted his life
  • The story of him selling his software to make money and using it to to buy houses
  • How he ended up self studying about negotiation and sales
  • His offensive and defensive techniques on living less and earning more
  • The value of tracking expenses
  • Why he thinks he’s wealthier than billionaires through the concept of time wealth
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Fire Round Questions

Tweetable Topics:

Connect with Brad

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 180,000 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!

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