The “Boring” Path to Massive Real Estate Success with Charles Roberts

 Brandon: This is the BiggerPockets podcast Show Number 278.

“Partner with me on this, and he was a contractor. He was a decent, nice guy. I blame myself. I blame him. Whatever. He told me it would be $12,000. It ended up being $72,000, the fix-up cost. And you could just imagine when you don’t have a job and like you’ve got kids you’re supposed to feed going hmm, how am I going to put all this together?”

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

Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online.

Brandon: What is going on, everyone? This is Brandon Turner, today’s host of the BiggerPockets podcast, here with my co-host, once again, Mr. David Greene. How are you doing?

David: I am doing great. I’m actually getting very close to a refinance of three properties that I have been fighting with for the last six months probably. And the end is in sight because I’m about to get back some pretty good money and I’ll be able to go buy some more properties and that’s the best news that I could get as a real estate investor.

Brandon: That is about the best news you can get as a real estate investor. I know like trying to get through refinancing is sometimes just hell. There’s so much paperwork involved and so much just stuff but when it’s done, it’s like, it’s over. And then we go and buy more and we have to do it again but—

David: Yep, put ourselves back in that spot.

Brandon: Yep. That is life. Well, cool.

David: Today’s guest actually talks about that, why lending is so important and why you need that type of finances. A lot of the time, we get so caught up in looking for a deal that we don’t think about actually how we’re going to fund it or how we’re going to finance it or what we’re going to do once we get it. So I really like a lot of what he had to say. I mean, this guy was just incredible. He had so much knowledge and so much wisdom I could have talked to him all day long.

Brandon: Yeah, this show is full of just like—I just want to like hang out with this guy and listen to him talk for like nine hours. And I feel like I would just like, every minute, become smarter. Super smart guy but also—you said the word ‘wise’. I think he’s just very wise, he has a lot of wisdom just to glean from, so anyways. You’ll love the story today. This guy is fantastic.

But before we get to that, let’s get to today’s Quick Tip. All right, so today’s Quick Tip, we are actually going to be coming out with a new version—not for a little while now but it’s coming out somewhat soon—a new version of the book that I wrote a few years back called The Book on Real Estate Investing with No and Low Money Down. So when we launched that book, well over 100,000 people have bought that and by now, it’s crazy—you guys are awesome.

But here’s what I’m wondering. In the second version, in like version two that we’re coming out with, I want to include your stories. So if you are somebody who went out there and read this book, the book on investing with no money down, and then you did something cool that was like no and low money down, I want to hear from you so we can put a bunch of stories throughout the book to kind of inspire more people with stories. It’s not just me giving examples of what I’ve done, I want your stories in it.

So do me a favor. If that’s you, if you’ve done anything with low or no money down because you’ve read that book, go to BiggerPockets.com/NoMoneySuccess and just fill out the quick little form there. Let me know and I’ll be picking a few of those to put in the new version. So again, BiggerPockets.com/NoMoneySuccess. And by the way, if you guys want to pick up a copy of the book, if you haven’t read it yet and you want to change your life, go to BiggerPockets.com/store and pick it up there. So without further ado, let’s get to today’s sponsor.

Here’s why I’m a big fan of SimpliSafe Home Security. SimpliSafe is ready for anything that gets thrown at it. If a storm takes out your power, SimpliSafe is ready. An intruder cuts your phone line, SimpliSafe is ready. Say they destroy your keypad or siren, SimpliSafe will still get you the help you need. Maybe you don’t need to be ready for every worst case scenario but that’s what makes SimpliSafe so great, because it’s always ready. So I recommend SimpliSafe to everyone I know. I have it in my own house. So go today to SimpliSafePockets.com.

All right, thanks to our sponsors always. You guys make this show a reality so make sure you guys listening, don’t just listen to the ad, go support them. Go check them out. All of the people that we bring on as sponsors are people that we like and that we could not feel bad recommending so definitely check them out.

And now let’s get to today’s show. Today’s guest is Charles Roberts. He is a Denver metro real estate agent and investor. He is a rock star. Very, very smart. Like I said, very wise. He has a great story of getting started, of failing a lot, struggling, trying flipping, doing rentals. We go into really deep a lot—the power of real estate. Not just in terms of like numbers but how it can actually change your life forever. I love hearing that from Charles and you guys will as well. So without further ado, let’s just jump right into the interview with Charles.

All right, Charles, welcome to the BiggerPockets podcast. It’s good to have you here.

Charles: Thank you very much. Looking forward to it.

Brandon: Yeah, it should be fun. So let’s talk about your journey into real estate investing. Can you walk us through the very—how did you get into this real estate investing thing. Talk to your first entrance, your first deal.

Charles: I truly just fell ass backwards into it. I have no great story. I read a book by Bill Bronchik, who is a local Denver attorney and he started a real estate club called Cary here in the early ‘90s. I read the book and I thought it was interesting and I just had $30,000. I’m 32 years old and I had a little extra money and I bought a duplex.

And amazingly, I bought the first duplex I saw which sounds like a bad idea. I can’t put a stick of gum without analyzing it but the guy who showed it to me, it was an agent, still one of my best friends in the business, and he was right. And thank goodness that he told me to buy this property. I bought a duplex. It went pretty well. I bought another one the next year and then I dove in headlong a couple of years later.

Brandon: Did you live in that unit at all or was it just purely investment?

Charles: Pure investment. I got married about 20 years ago, bought a house two months later and then I bought a duplex six months later. So yeah, just a normal duplex and I still own it. And by the way, that’s the best thing I’ve ever done in my life, short of getting married and having kids.

Brandon: That’s awesome, that’s awesome. All right, so you bought this duplex. Do you remember what you paid for it?

Charles: Yeah, I paid $145,000. I know exactly what I paid for it. I paid $144,500 for it at the time. I put 20% down and I got a 15-year loan. And honestly, one of the best things that I ever did in my career was to buy a long-term rental and get a 15-year loan. Of course, there’s always discussions, long-term financing, 30-year versus 15-year. I love having those discussions. For me, at that point with my first bunch of properties, it being 20 years later, I’m very, very happy that I chose a 15-year loan at that time.

Brandon: Well, let’s talk about that. For those people who maybe don’t know the debate and they’re not sure, should I get a 15 or 30 year? Which by the way, for everyone listening like, those are the two most common. You could technically do probably a 19-year loan or a 20 and a half year. But generally, 15 or 30 are by far the most common. What are the pros and cons of each? Can you go through that real quick before you get back to the story?

Charles: Absolutely. So a 15-year loan is great if you want to buy property and pay it off. You’re going to get a slightly lower interest rate but most importantly you’re going to have to basically follow the discipline and pay it off and what you’re going to get for that is paying a lot less over time in the interest costs. So it’s a lot cheaper. So you get it, you buy it, you pay it off early, and it’s cheaper.

But that doesn’t mean you should do it. What it means is you need to evaluate yourself and figure out your financial position and your goals. For example, some people get 30-year loans because actually what they say is I don’t want to put all that money into a property. I want to buy more properties. And I completely understand that.

And the math is such that they probably will make more money if they buy more properties over time. So anybody who says you should do one over the other, well they probably don’t understand that it’s up to the person to actually make that decision and there are absolutely solid reasons to do one or the other.

For me, I didn’t know better. I just guessed right and it was right for me. But some people should absolutely buy 30-year loans. The problem is everybody who gets a 30-year loan says well, I’ll just pay it off in 15 years.

David: And they never do.

Charles: It is one of the top ten myths in real estate, the percent of people who get a 30-year and pay it off in 15 years. So if you’re thinking about it, just be honest with yourself because I’ll bet 50 to 1 against you.

Brandon: That’s funny, yeah. I’ve said that. I’ll pay it off early. Whatever. I never did because yeah, it’s just like, I like cash flow. That was always my determination. Do I want cash flow now, more of it, or do I want to pay properties off? That’s really kind of what it comes down to, a lot of it is do I want to pay it off?

Some people ask me should I do 15 or 30? Well what do you want? Do you want to scale? Do you want to build more? Do you want to save as much cash flow as possible? Do you want to quit your job as soon as possible? If so then maybe 30 years is better because you get more money to be able to quit that job.

I actually recently just did a refinance and my plan was to refinance into a like 18-year loan, basically. So what I did was I went through a 30-year loan and then I set it up and I actually went and set up automatic payments and I worked out the math. I think Dave Ramsey has a really good calculator for how much you’ve got to pay extra.

So anyway, I set it up so it’ll be paid off in 18 years. And the reason I did that is because that’s my daughter’s fourplex. I bought it the week she was born so it’ll be paid off when she’s ready to go to college, right? That’s like the only way I could force myself to actually pay it off in less than 30 years.

Charles: And you’re the 1 in 50. I guess it’s no surprise because you’re you. But you’re the 1 in 50.

Brandon: Well you have to automate it. You can’t rely on your own what’s the word, self-control? I have zero self-control. You put cake in front of me, it’ll be gone. Like I just can’t not eat the cake. But if like you lock your refrigerator then like, I’m not.

Charles: You’re like everybody basically.

Brandon: Yeah, exactly. You have to come up with systems in your life to make up for the fact that we all just suck at generally everything. I’ve actually found that most successful people in life are just better at finding ways to fight against themselves. That’s what causes success.

Charles: We’re all the same, you know.

Brandon: Yep. Super cool. All right so moving on. All right so you’ve got this duplex then you said you went and bought another one. Then you jumped in full. What does that mean you jumped in?

Charles: It means that I went full-time early in the decade, so 2000-2001 I became a flipper and I started fix-and-flipping and I really found over the course of a couple of years that I was pretty terrible at it. It wasn’t like nearly as fun as you’d think it would be.

So we went through something of a downturn in the Denver market but you know, I blame the market maybe 20% and I blame myself about 80%. I just don’t think I was really good at it. I mean I get hives thinking about having city inspectors crawling around my places and trying to wake up my contractors and sober them up and all that sort of stuff.

So to be perfectly honest, I did a whole bunch of fix-and-flips, many of which I didn’t sell so by 2003 into 2004, I had 29 properties. Life would have been better had the market been stronger but it wasn’t and I found myself in a bit of a crevasse for several years in ’03-’04 working 80-90 hours a week trying to keep it all together, fairly young guy, wife at home, two kids, a dog, the picket fence, the whole bit. Saying to myself wow, what have I done?

So I’ve seen a little bit of a good time. I’ve seen a bunch of bad times. I’ve seen a bunch of good times. So that’s one of the things that I try to bring to the table is understand, this is what happens. Deal with it.

David: So let’s talk about what went wrong because we talked a little bit about that earlier, you know, kind of limiting the areas of your own weaknesses so you don’t get in your own way or sabotage yourself. That’s a lot of houses that you were jumping into. Can you tell us what you didn’t do well and how maybe you worked around that? What you learned from your mistakes so that you could put a workaround in place so our listeners can recognize when they’re in the same position?

Charles: I think the first mistake I made was thinking that I was smart enough to do something different and I wasn’t. Pretty much nobody is or very, very few people are and I think a lot of people like me jump into real estate and say I’ll be different, I’ll be smart, I’ll do systems. Everybody else is stupid. And it turns out, we’re stupid and it’s just a matter of time that most of us figure that out. And I did figure it out.

David: In Keller-Williams, we have this saying- “P to E”—or “E to P”, sorry. “Entrepreneurial to purposeful”. And there’s this temptation that everyone has that I am so smart and so brilliant and I will find the secret way to do this that no one has found. I’m an amazing entrepreneur and I’m going to go invent some idea and it never works. It’s always better to follow a model that someone else has already done, or probably hundreds of thousands of people have already done and just become purposeful with your business.

And what you’re saying is so right and I’ve found in so many things, I always start off thinking that I have this revolutionary concept and then ten steps into it, I’m like, this was so stupid. I’m wasting time. I could just follow the proven path and get there so much quicker. I’m a firm believer in that now. I’m not that smart. Stop thinking I’m that smart. Recognize I’m not that smart and just get purposeful about what I’m doing.

And you’ve done that, Charles. You’ve built a very, very impressive portfolio and knowledge base. Can you tell us about maybe a deal you had that went wrong? A flip that went wrong or something like that?

Charles: Sure. I mean, how many dozen do you want? But let me start with my first one. So the wonderful story is, I’ll teach a class and someone will talk about something they’ve done wrong and then I’ll get competitive. I’m like you think that’s wrong? You think you’re stupid? You’ve got nothing. Let me tell you what happened to me in my first one.

So I was off 600% on the bid of my first fix-and-flip. I had worked with a guy and he was actually a partner with me on this and he was a contractor. He was a decent, nice guy. I blame myself. I blame him. Whatever. He told me it would be $12,000. It ended up being $72,000, the fix-up cost. And you can just imagine when you don’t have a job, and you’ve got kids you’re supposed to feed going hmm, how am I going to put all this together?

Frankly, maybe I should have stopped but I didn’t learn my lesson for a while that I just—I still don’t know exactly what I did wrong. I just know that in the end, it’s probably what I shouldn’t have been doing and I’m glad to not do fix-and-flips anymore but I’ll tell you, I invite your podcast listeners—try to beat that story.

Brandon: I did a flip once where my budget was $40K. I put $72K in. Not quite as good as yours. And not quite as bad as yours.

David: With that being said, do we think newbies should get into flipping?

Brandon: Yeah I was going to ask the same question.

Charles: There’s a loaded question. Should newbies get into flipping? I think that certainly universally the answer isn’t yes. Obviously some newbies will do great. In my experience, and when I say my experience, you know, 20 years of doing this, having 750 agents, hundreds of clients, seeing lots and lots of people do it—the vast majority of people who get into flipping fail.

And some fail just very easily. They go to a couple of club meetings and realize maybe I shouldn’t do it. And some fail disastrously. And some fail like I did, double disastrously but just wouldn’t stop working 90-hour weeks for years because I just couldn’t accept failure. So I certainly would never say newbies shouldn’t do it. What I say is that they are generally ill-prepared is what I’ve seen.

Brandon: So what would you recommend on the other side of that? How does somebody get better prepared? Do they just read a whole lot of books until you’re so smart you’re never going to make mistakes or what?

Charles: Actually no. Interestingly. We wrote a book. I know you guys have written some phenomenal books. And the books are great but there’s a catch-22. And the catch-22 is you can’t learn it until you do it. You should read it. You should read yours. You should read this. You should read that. You don’t know anything until you do it.

So I think the acknowledgement, the understanding, the self-awareness that you don’t know anything until you do it is very important because that’s certainly among about a thousand mistakes I made, not realizing that. So you prepare but you’ve got to understand how little you understand until you do it. And that’s a very, very hard lesson to learn.

Brandon: And that is so good. So many people get into things thinking they know almost everything there is to know—oh, I read a book on it. Yeah, you’re right. You don’t know anything until you actually get in there and start doing it which is another reason I generally just encourage people to like, just to go buy something. It doesn’t have to the world’s best deal. Don’t buy a bad deal but like you’re never going to know until you get in there and start doing stuff.

So even if that means partner with somebody who is experienced to get some knowledge and like feed off theirs or whatever, but like, you can’t just get stuck in this reading forever because that’s not the same thing. Or you just don’t do anything and maybe you’d be better off not doing anything.

But I’d like to show people first deals, I think should be like really small like if you had to pick up the property and move it, you could do it. Just don’t think you’re so smart that you’re going to change the world on the first one. And if you are, great. Then BiggerPockets will have you on their next podcast that it’s pretty darn unlikely.

Brandon: Well it’s funny that you mentioned it, that one deal I lost money on or that one flip, at the end of the day I think I lost like $10,000. We still sold it but like that deal, the reason I screwed up is because I wanted to think I was smart and I could think outside of the box and what I was, was I watched those flipping shows, right? Well on flipping shows they go into this nasty house and they’re like we should do this and this and this and they make the house look incredible but what I found later was most actual flippers I know have a relatively boring job.

It’s like, same paint, same color, three bedroom, two bath house. Cookie cutter. Yeah, it was like I found this duplex and I decided to tear out the staircase in the outside and put it up the middle, make it a single-family home. You know, just like 3500 square foot beautiful house now I made out of it. I was like, what was I doing? I just go flip a single house—follow the model that already works.

Charles: Right. Just because you thought you were smarter than everybody else and I thought I was smarter than you and we were both wrong.

Brandon: We were both wrong. So yeah today when I flip houses, I’m much more—I don’t flip many houses because I’m not good at it either. You and I have very similar stories. So what skills do you need to have in order to be good at flipping? And then we’ll go on and go talk about rentals because that’s more fun for me.

Charles: Me, too, by the way. I think that—let me start at the opposite side. What is not a big help, amazingly enough, is being a contractor and being really good with your hands and I want to be very careful here because I cannot screw in a lightbulb. I am the least capable male you have ever met. I’m just terrible at it. But what I’d seen are a lot of people saying, I’m a contractor. I can build anything. But they don’t have business skills and that is a disaster about 100% of the time.

I actually think it is a lot more about business skills and understanding how to run a business and about self-assessment, risk assessment and all that goofy stuff. You need a contractor and if you are that rare individual that has both, there is no stopping you. But there aren’t that many of those people. I think it’s the business skills and the understanding of capital and where the money is going to come from and just the boring crap. Those are the people who make it generally.              

Brandon: You know it’s funny, Jay Scott, who wrote the book on flipping houses that we published what, four or five years ago now, and the book on estimated rehab costs—like, he was not a contractor. He worked in like a Fortune 50 company and he was like a manager at this big company in Seattle or what was it? San Francisco, I think. Anyway, he was like a manager that decided to get into flipping and he was super successful because he knew nothing about construction.

All he knew was, how do you manage team? How do you manage people? How do you manage business? And that’s the people that I’ve found most successful at real estate, are people who can run businesses. It took me ten years to realize that I should actually start reading business books and start talking to more business people.

Charles: It’s so true. It’s the people who love houses, those are the ones who scare the heck out of me.

David: That’s so, so good. This is where I came up with my philosophy of my Core Four of what I want when I go to a new market to invest. Because like Brandon said, I just was like humble enough to admit there’s so many things I’m not good at. I don’t want to do it. I don’t want to manage a property. I don’t want to fix up a property. I don’t want to have to get my own lending license and fund my own loans, right? I don’t even necessarily want to go find deals a lot of the time. I want to go find people that will just bring me deals.

And ironically enough, the less that I do in my business, the better off my business goes because I rely on experts and my job just becomes like finding the expert. So there’s like this kind of dichotomy between needing to learn all you can about real estate and then at the same time, you’re learning it for the purpose of recognizing that someone else is really good and getting out of their way and letting them do their thing. I know that you’ve helped a lot of investors do the same thing, Charles.

You’ve actually helped some other people find financial freedom from the advice you’ve given them. Can you tell us in your experience working with other people and helping people achieve financial freedom through real estate, what are the traits that you see in someone and you know that guy or that girl is going to make it?

Charles: Okay, well I have no idea because it’s very difficult to figure out so thank you for the false sense of confidence. It’s very difficult honestly to know. Let me actually pick up on one thing that you said. Let’s see, how to put this—it’s hard because I’m looking at it as the President of a couple of real estate companies. I have 750 agents and honestly, we think we’re pretty smart. We think we’re pretty good at this. It is so difficult to figure out who is actually going to succeed in investment and in real estate but I really do think it’s the people who are measured, who aren’t sort of one-timers.

They’re going to do the greatest thing and have the greatest open house and everything is always the best and this and that. It’s the much more boring people. So in real estate, as an agent, it’s about the people who prospect, who make the phone calls, who are likeable people and helpful. They have a lot of common attributes except they’re good people, they’re honest people, and they’re good businesspeople.

It’s not complicated. It’s that. I wish I had a more sexy answer for you but I’d write another book if I had the answer. You guys would write another book if you had the answer. But I’m not a dreamer and I don’t see dreamers tend to be the successful flippers. I don’t see people with the unique ideas. I’m sorry. I know a lot of people say it’s all about creativity. I hate creativity. Why?

Because I see the vast majority of people who creative this or creative that fail and these are not bad people. These are good people. They’re mothers and fathers and sons and brothers and sisters. And way more often than not, I’m afraid I see creativity fail and I see business sense and 100-hour weeks succeed.

Brandon: Yeah, I think a lot of people are looking at this like they read books like The Four-Hour Work Week or you hear stories of even me and David hanging out here in Hawaii. Like you hear it, and people compare their—what’s that famous quote? You compare your page one to somebody else’s page 100 or whatever? And so they see the result that they want to get to someday but they don’t realize that David and I both, and you as well, worked 100-hour work weeks for many, many years to get to the level—it’s like a locomotion. Locomotive?

Charles: Everybody’s doing the locomotion.

David: It’s like really slow, right?

Brandon: I’m trying to use an analogy. I’m not as good as David here at analogies.

Charles: Yeah, so let me give you an example of that. So you’re a new investor and you go to a local investor club and that is great. And who do you talk to? You talk to the three folks who made it in real estate. The 97 people who failed aren’t there. And so you get a completely skewed vision. It’s not like anybody is trying to mislead you. I’m just telling you, you walk in, understand the math is that very few people in the end just—there’s no other way to say it—have what it takes to get through but the only people who are there and doing stuff are successful but it doesn’t mean everybody can do it. It does mean everybody has the opportunity. Or a lot of people have the opportunity and that’s what we love so much about this business.

David: Yeah, I know my own success, when I look back and I try to figure out what worked and what didn’t work so I can replicate what worked and stop doing what didn’t, it felt like I was trying to learn. I was looking for deals. I was trying to figure out real estate and reading everything I could. And I was like this prospector looking for gold. And then I found it and the foolish people say great, I found gold.

Let me go look for some more, where the wise ones are like, that worked. I’m going to go back to that spot where I found gold and get really, really involved in how I’m going to do it after this. I’m going to just get some materials, get some stuff, hit this spot really hard and find more gold as opposed to the thrill of the chase is more appealing to you. So you found the gold and now you want to go find it somewhere else.

Charles: Yeah, you have the adventuresome people and they’re wonderful and you have the boring people and they’re wonderful. I tend to think the boring people are the ones who actually make all the money in the end.

Brandon: Yeah, I can see that. I don’t disagree. So let me—I’ve got in my notes here, Mindy, who puts together our podcast notes, says to ask you about the forklift guy. Tell me about the forklift guy.

Charles: Sure. A gentleman named Mark, I met him in probably 2008, which is about the depth of the downturn in my local market and he was just a nice guy. His name was Mark. He worked at Coors in Golden, just west of Denver, and you know, he was just a nice guy. Not overly sophisticated just a guy who was 60 years old and running a forklift for Coors. I met with him. I think I was teaching class or something and he came up and we chatted and we started buying properties together.

And this was literally in the days where in the suburb of Denver called Aurora, north Aurora, we were buying properties for $60,000, $70,000, $80,000 and at its height two or three years earlier, had been in the $140,000 to $160,000 range. So we were buying it half off. And he just—he’s the guy who had what it takes. He could make a decision. He actually was handy. I don’t think he would know how to spell Excel spreadsheet. But he worked hard and he worked at Coors during the day.

We’d buy a $70,000 place. He would fix it nights and weekends. He would get it rented. He managed it himself. He was just in my opinion the perfect long-term investor. He never sold a property. I think we bought six. Either six or seven over the course of three years and he retired five years after he bought his first one. It was lifechanging. It really does bring a tear to your eye to be able to help someone who was willing and able to help themselves change their life. It’s the most incredible business we’re in.

Brandon: I love hearing that. So what attracted you, when he came to you—I’m sure a lot of people come to you. You have a lot of agents that are working for you. What made you want to work with this guy to help him?

Charles: So it’s really interesting you say that because I’ll tell you. So me and my buddies on a Monday or Tuesday, we’ll start talking because we’ll start getting phone calls from people who will say hello, I am looking to build my power team. I would like for you to be my power team and if you have what it takes you can join me in making millions. Then I’ll call Justin and Travis will call me and be like, oh man, that guy was in town? Okay. Because they teach people what to say.

And there’s a perfect segue into saying Mark didn’t do that. So somebody in your position, if someone was to call you and give you a script you would know probably before they started the script, this is not a person you want to work with as opposed to someone who calls and says hey, I’ve listened to your stuff—can I get five minutes of your time? I’m looking to do this. I’d love to get some insight. Right? They’re not groveling. They’re just professional. They’re just saying I would love to get some insight from you and maybe I can give you something back.

And that’s exactly what Mark did and that’s exactly who I like to work with, is someone—yeah, I’ve got more experience than most people who call me but believe me, I have made way more mistakes than any of them have made. I know what it’s like and you want to work with people you like. Money is great. Don’t get me wrong. I like money. You like money. We all like money but you also want to work with the people you want to work with and that tends to be people who are measure and reasonably humble and honest. Oh, I’ve got a group of investors. You want to work with me. No, you don’t. Shut up. You don’t. I know you don’t. I’m calling you on it and stop doing that.

Just be honest. Be a good person, someone who calls you or calls another icon in the industry. You guys are nice guys. You really are. You’re good people. You love to give. But you don’t want to work with some schmuck who’s putting you on. You want to work with nice people and Mark was a nice person and I’m so happy we work together.

Brandon: That’s so cool. There’s this kid in my area, he’s 21 years old, just got engaged. His name is Chris and we used to play ultimate frisbee—we do play ultimate frisbee together. Anyways, he hit me up I don’t know, three months ago over Facebook Messenger and was just like, hey, can I ask you a question? I heard you do real estate.

He was like, I was thinking about buying a house or something and for the last three months, I don’t think a day has gone by—I’ve had like 15 minute conversations with this kid over Facebook Messenger because he’s so nice and honest and earnestly wants to learn and he’s taking action on the things that I say.

So now I might even sell him one of my properties and give him an amazing deal on it because I really want to see him succeed. I just really want to help him and I wish more newbies understood that. We really want to help people who want to help themselves.

Charles: Yeah, I am dying to jump in because that’s exactly right. And so my colleagues who are accomplished people in this business, we all say the same thing. We really appreciate someone who reached out and we want to tell that same story. We just want to work with someone who’s nice, who appreciates and not gives us money—it’s not about money at that point. It’s about doing something good and frankly, our self-esteem goes up when we help someone we feel is deserving. That is the golden nugget.

David: Yeah, I believe that being likeable is probably the number one thing you can do to make yourself more successful as crazy as it sounds. We talk so much about analyzing a deal and finding people and knowing what you’re doing and that stuff is all good. It all helps you not to lose money but it doesn’t really help you to make money. What helps you to make money is being liked by people that know more than you that can like shorten your learning curve.

Like Brandon said, I might sell this guy a house. I would bet you Brandon is not going to sell it for as much as he could get if he sold it to a complete stranger that he didn’t know. He’d be looking at his own interests like he should be. Well, when you like someone, it’s really hard to do that. You’re like eh, I can rationalize giving it to this guy for $10,000 less if I really want to help him out. I’m sure he’ll help me out again later, right?

You’re just like greasing the wheels of your own success when you become a likeable person. And Jim Rohn talks about this so much. I really love Jim Rohn. He’s really big on teaching, you need to work on who you are as a person because you’re never going to be more successful than what your character is going to support. We’re not talking likeable like you’re a sleaze ball and you lie to people. You’re just a genuine, nice person who wants to help other people and it is so hard not to help that guy or that girl, whoever they are.

Charles: And let me jump on that because I agree 100% and you know what? You’re going to make more money because you helped this guy. So maybe you gave up $3,000 but this guy is going to be a bigwig someday and he’s going to make you $10,000 and you’re going to make him $20,000 and that is what’s so cool about this. The more you give, the more you get.

I’ll give you an example. I have a colleague here in town. His name is Bill. He is a wholesaler. He is a fix-and-flipper. He’s a real estate agent and he actually sold me a property a couple of years ago. I wasn’t even looking to buy another one. He made me a great deal. Bill, thank you so much. I probably took a couple of bucks off the table. He was like no, no. I’m good. I know you’re going to buy it. Great. So I’m done buying property, I don’t need it anymore. I’m very happy. I don’t live an extravagant life. I’ve got everything I need.

A couple of months ago, he gets in touch with me and said, look, I’m looking to sell this property. I’m like, dude, you could make a lot more than that. I said, look, you can tell someone if you want it or whatever. And I bought it without ever having any intention of buying a property. And it was honestly, this guy is a professional. I think it was $15,000 less than it should have been. I bought it for less than $110,000. That’s like 14% below. He was like, nah, Charles, I know who you are.

Let me tell you something—it is my life’s goal to make him back that money and more. I’m going to make him—he comes to conferences and believe me, I will pay that back and more. One, because I feel like I owe it to him. And if I give him more money, he’s going to give me even more. This is what’s so cool about this business is you do the right thing and suddenly, it scales enormously and Bill’s a perfect example of that. I bought it two months ago.

David: So let’s talk about that. You’ve clearly figured out the details of what will make you successful. Tell us about your scale. Where have you gotten to now? What does your portfolio look like? How’s your investing going today?

Charles: Okay, so my scale is actually quite modest. At my height, I own 29 properties. During the downturn, and to make a long story short, I got licensed in ’04 just to be a better investor. And what I had found in ’04, I suffered through being an agent for seven years—much to my surprise, people wanted to work with me and I closed my first deal six days after I got licenses in October of ’04 and I closed 34 deals in my first year.

And I will tell you—I was so shocked by that and I was so surprised to be a real estate agent, I didn’t even have business cards for more than a year. Like, you know, I’m kind of an engineer. But a real estate agent? Get out of here. It’s embarrassing now and if my agents are listening, they are just rolling their freaking eyes. I did not have, for 15 months, a business card, because I couldn’t call myself an agent. Anyways, what I found was that I liked being an agent and I got so busy that I sold a bunch of my properties.

I went down to nine and I paid everything off and then about three years ago, at the time, my 13-year-old is a pretty sharp little boy, had been coming to my classes and for a couple of years, he had been saying, Dad, why don’t you buy more? I was like shut up, Jack. Go away. And finally, I didn’t have an answer. I was like God, you’re right. All my clients are still buying. So I bought another round of properties. So right now, I have 16 properties. And so it’s not a lot. You don’t have to have 500 doors. I’ve got 16 properties. They are all paid off.

And I have—I mean, I don’t need anything more. I do everything I do 18 hours a day because I absolutely love it and I’m the luckiest guy in the world. And that’s a whole other discussion of Charles, why wouldn’t you want to leverage that? And the truth is, I describe myself as the youngest Depression era baby you have ever met. I’m 50 years old and I will never ever ever go through what I went through in ’01, ’02, ’03.

At one point, I remember reading to Obi, my oldest—he was probably two and a half years ago, trying to concentrate on reading to him at night and going downstairs and talking to my wife, Jen, and say you know, I just want you to know that I have absolutely no idea how I am going to get myself out of this mess. There is no pathway. I don’t see it. And I insulated her a lot from it because this wasn’t her problem, it was my problem. Call it what you will. Healthy marriage or terrible marriage, whatever. This was my doing.

But I remember that moment thinking I have no idea how I’m going to get myself out of this and all I can do is keep working 90-100 hours a week until something happens and it did eventually. So I don’t want that to ever happen again. I don’t need the last million or the last ten million. But that doesn’t mean your listeners or you should feel the same way. The whole point is you’ve got to figure out what’s right for you. It’s right for me for now.

Brandon: I like that a lot.

David: Powerful.

Brandon: Yeah, I think a lot of times we just kind of get caught up in this. I need more, I need more, I need more. But do we? This book I recommend, probably the number one book I recommend more than anything else other than maybe Rich Dad, Poor Dad is called Lifeonaire. I recommend it. Have you read that yet, David? I keep telling you that.

David: No, it’s on my list. Don’t worry.

Brandon: So this book is written by these two real estate investors but it’s not a real estate book. It’s more like a fiction book that tells a story of this couple. Anyway, the general theme if I can summarize it up is that life is not about getting as rich as possible. If it was, then we would play by certain rules. If the goal of life is to get as rich as possible, then Charles, you should go leverage every single one of those properties to the hilt, take all of that money, pour it into the next deal, leverage those—right?

But the goal in life is not to get as rich as possible so therefore, different rules apply. And so instead of thinking Millionaire, they call the book Lifeonaire. One of the most impactful books on my life. It made me start paying off some properties and thinking what do I really want out of life? Who cares if on this property, I’m getting a 15% return and this one may be a 10%, but this one is so much easier and I get so much more life out of it. Well then, that’s the one I’m going to choose.

Charles: Yeah, it’s something I talk about with my agents as well. So you almost have to go out of the country and live out of the country for a while to realize how interesting Americans are. But let’s say you make a million dollars a year, one year. And you make $900,000 the next year. You’re a loser in our culture. And it’s just fascinating. It’s fascinating. You wonder why everybody is in therapy. So try going to like you know, France, or Kuala Lumpur and explaining how you’re a loser because you made $900,000 the next year. It’s so important to have that vision and that sense of self so everything you said, I completely agree with which was why I do what I do.

Brandon: I was watching that show, Billions. This is one of my favorite shows and last night there was this line where the billionaire guy is Bobby Asterod. He’s telling his wife that they might lose everything. And she said, well how much is everything? And he’s like we might lose everything—and he goes, I can only guarantee that we’ll keep $300 million. And she goes, how are we going to live on that?

And there was like this very funny moment where there is a serious conversation about how are we going to live on $300 million because they were billionaires? And obviously it’s a fiction story but I think we compare our success to both what other people have around us and to what we had before. And that kind of defines how successful we are.

Charles: And if that’s what you like, that’s great. But you should at least question it and make sure that’s what you like.

David: Where I think about this is every year when I watch the Olympics, and let’s say swimming, the third place or the fourth place person, they don’t even medal. We look at them like you’re a loser. You failed. You put four years of training in. You got nothing, right? But if you went back eight years, their time would have been the world record. That blows me away. Eight year ago, this would have been the best swimmer in the entire world and right now you’re a complete loser because someone beat you by 1/100^th of a second or something like that.

That perspective is really important to keep because keeping your own drive, your own ambition, your own healthy desire to do this at its maximum peak is very, very important to your own success. And when you start looking at other people or when your expectation was, you should never go over 600% on your rehab costs on a flip or I fail and I should quit. You can lose that and then you would lose out on all the other deals you would have done in the future.

I know, you understand, Charles—you understand real estate from every angle. That’s one of the things I really respect about you. You run a brokerage. You have agents. You’ve got your own properties. You help people with it. One of the things that you’ve mentioned is understanding lending is almost more important than understanding real estate. Can you tell us why understanding the lending process is so important?

Charles: Absolutely. It’s very important to make. The thing that everybody thinks real estate investing about is about the real estate. And what I tell people is the mistake every investor makes is they spend all of their time on the thing they shouldn’t spend, which is the real estate and they should spend way more time on the lending and the financing where nobody wants to. Why? Because it’s not fun and it’s not sexy and you don’t get to tell great stories. I’m sorry, that’s actually where you’re going to make your money.

So everybody wants the deal. We’ll talk about that more, I’m sure, going down the road. And that’s hard to find. In the middle of my flipping world, probably ’02 or ’03, I was working with a lender. It was a conventional lender and I said look, just tell me how much money you’re making. That’s all I ask. Long story short, his onsite, backend—basically the underwriter actually pulled me into a lunch quietly one day and said, I need to tell you, he’s actually making more money. And I feel bad because he said he wouldn’t do that but he said he’s pulling some money that’s not on the HUD and settlement statement.

And I was so freaking furious because I didn’t care how much he made. I just wanted to know. I just felt like he deceived me. I was so angry about it, I actually became a lender and we had Your Castle Lending, my lending company. It is so imperative to understand the money. So if you’re thinking about right now investing, what I would say is, think less about the property and think more about the lending.

Meet with three to five conventional lenders and meet with half a dozen commercial brokers and get really, really, really good at that because you’ll be like the only newbie who ever does it and you might understand what you need to do, perhaps, to maybe fix your portfolio or do something six months ahead of time. That is where I think people should spend more time because people don’t because it’s boring and that’s where a lot of the money is made.

Brandon: That’s really good.

David: One of the first things that I do with my clients as a real estate agent is we talk about the finances before we talk about the pretty houses and what you want, your wants and needs. And I found that many of them are like, I want to use my lender because I banked at this bank, whatever it is, right? They feel a loyalty to them or they think it’s easier.

These same people will fight tooth and nail over $1,000 they don’t want to pay over asking price but will spend $3,000 extra on their closing costs because they don’t even want to talk to like a wholesale broker or another lender that can get a better deal. And it’s fascinating to me how like we just get in our own way so much. They could have saved $3,000 on closing costs and got the house they wanted. Instead they’re worried about, well the listing price is this and I don’t want to overpay. I don’t want to pay more.

Brandon: Exactly. And some of them are like us. We’re always evaluating ourselves and the way we think or the way we do things because we want to be the best version of ourselves. Whereas your average citizen who’s not doing that—they don’t see how they’re kind of shooting themselves in the foot with the way they think and the way they do stuff. So I completely agree with you. Understanding what matters to be successful is so much more important than just running out there and doing everything you can or what you think is the most fun.

Charles: Absolutely. That’s why the world needs people like you. Podcasts or real estate agents to explain what people should do. If they choose not to do it, their problem.

David: All right, so what is your opinion on—I know you said it before that you believe that you should work harder, not smarter. Explain that a little bit. What’s your philosophy there?

Charles: Okay, so there’s this saying that you should work smarter, not harder. And to be perfectly frank, I think it’s people who aren’t that smart that say that all the time. If they were actually that smart, I’ve probably just lost 15 friends right now but maybe you can edit this portion out. But I don’t know. How about you just work harder? Guess what? This isn’t easy. Guess what? You’re going to fail and you’re going to have to figure it out and hopefully it’s a quick failure and you move on.

But of course you want to work hard. It’s like advice that rhymes. It sounds good. How can you possibly argue with that? Well, you know, just come back in 20 years and talk to me about what your life was like. Of course you want to be smart. Most of the people I have seen who broke through and it’s awfully hard to break through in real estate investing and became the guys like you are, they were hard workers and they did it. And they went out and looked at properties and they met with people and did all the work, not for a day or a week or a month but forever.

So it’s not, you wonder why I’m not invited to more parties. That would help explain it, you know? But how about you work really hard and you might get what you want. Thank God for America and thank God that we live here.

David: You know, I think what I’ve found is the harder you work, the smarter you end up becoming. Like when we go out there and we just grind away at this thing and we figure out, oh, that’s what worked? You just got a little bit smarter. Then you get more repetitions in because you’re buying more houses or you’re dealing with more contractors and you’re learning how to look at a bid and then you become smarter. It’s seeing what worked and then you become smarter. I think that’s what you’re getting at here is you’re not going to learn it by trying to avoid the hard work. You’re going to learn it by doing the hard work.

Charles: And everybody wants to avoid the hard work but forget about it. Just do something else. I’ll give you a quick example of that, working with a guy named Rick. Super duper guy. And just, it’s the simplest little example. We went out and looked at properties. He wanted to buy and hold for the long-term and I walked into a property that was about 1600 square feet, three bedroom, three baths and within seconds, maybe five to eight seconds after I walked in, I realized you could make the perfect four bedroom out of this. Which took it from about a six or seven cap rate to about a seven six cap rate and boom, that was it.

I wasn’t a genius but instead of just sitting and looking at some online this and running through some Excel spreadsheets, I never would have known you could put that fourth bedroom in if we just hadn’t gone and looked at it. Is that working harder? Yeah, a little bit. We got off our asses and we looked at a few properties and we found a property that I think some other investors didn’t actually find because they didn’t go out and look at it. To me, that’s the perfect, simplest, example of doing things. And he got a great property. That was his first one and we’re closing on our second.

David: You know what I love about that is now your brain has figured out, there’s opportunities to take three bedrooms and make a fourth bedroom. You basically created a deal rather than finding a deal. And when you have new opportunities in the future, you’ll go back to that and be like, well I know this worked. Let’s see if we can do that. And that’s the same way that I’ve done it, right? I look at houses that need serious rehab work. I don’t even look at them if they don’t. And that scares a lot of people.

But what I’ve found is if I’ve done enough of them, my brain will start to find ooh look, there is an enclosed patio. I can include that in the square footage of the house if I can just tap into where the air conditioning is and get it to go out there, right? How do I find out how much that’s going to cost? Well if I’ve already done this a couple of times, I have the HVAC guy’s number on speed dial and I call him right away. It’s funny how we say on speed dial. I guess everything’s on speed dial on today’s phones.

But the hard work that I did in the past made it much easier to do this in the future. I become smarter and more efficient and that’s the point that I love, that you’re making is if you’re afraid of the work or you don’t like work or you’re just trying to avoid it by thinking you’re smarter than the system, you’re going to try to get too creative with what you’re doing or you’re not going to be successful, the hard work is what enables you to get the experience that’s going to make you better.

Can you tell us a little bit, Charles, where are you finding deals in today’s market, either for yourself or the clients you’re representing—like, what’s working right now?

Charles: So the word ‘deal’ is a really interesting way of putting it. Let me talk about that. So I don’t do fix-and-flips and I don’t work with fix-and-flippers. I have one guy, Barry, who is a phenomenal flipper. He finds the deals and I sell them for him and it’s really fun to do that. But I have chosen 100% out of laziness not to be in the fix-and-flip world.

In the Denver market, it’s very, very competitive. People who are listening to this all around the country and probably all around the world, I can tell you, it’s really hard. If I thought I could make more money with less risk and have more fun being a flipper, I might be flipping right now instead of being on your podcast. But I don’t think I can. I also don’t want to work for a buck an hour and try to find the world’s greatest deal.

So for me, this is about me—I don’t look for deals. And it’s really interesting because people find that very strange. Wait a second. Huh. I thought you had to find a deal to make money in real estate. And I would call that in the top three myths in real estate. So I think that if you are a flipper, you need to find a deal, and that’s why flippers can make a lot of money. You’ve got to use some sort of metrics like you pay 70% of After Repair Value minus fix-up costs, right? So if you’re going to sell it for $200,000, you’ve got to buy it for $140,000 minus the $20,000 in fix-up. You’ve got to get the deal.

I have decided that what didn’t work for me was being a flipper. What did work for me was being a long-term investor. So I work with people like Mark and Rick because these people don’t buy deals and that might surprise you. You ever heard the saying, you make your money inn real estate on the buy? Oh yeah. It’s not true in my opinion. But I’m going to go a little past that. It’s not true if you’re a fix-and-flipper—absolutely it’s true.

But we have made all of our money understanding that you have to own property and manage property and pay off property and that’s where I have seen the huge wealth creation. So as an agent as well as an investor, that’s what I concentrate on. So I’m telling you like the property that Rick bought last month—it was basically market value. It wasn’t a deal. Like a deal means you can buy it today, sell it tomorrow, and make a profit.

There is no other definition. You actually have to make money the next day. This wasn’t a deal. But he is going to make so much money because we added a little bit to it. He’s going to pay it off and over time, he’s going to do it. So I work with people who can make decisions but most importantly have a long-term vision, are going to buy and hold property for a long period of time because they are easy and wonderful clients to work with because they’re all going to make tons of money and they’re all going to be happy with me and they look at what I started doing 20 years ago and they just put themselves on the same path.

This is not genius stuff here. This is just buying something that fits your portfolio, understanding the financing, doing all the right things. Base hits, base hits, base hits. And that’s my entire stock of millionaire investors who sort of giggle when people talk about deals because we kind of never buy deals. We just buy and hold forever and make tons of money.

David: That sounds really boring, Charles.

Charles: Incredibly. I’m telling you. Not a lot of parties that I get invited to, right? You haven’t invited me yet either but you know, to talk about real estate, I’m okay.

Brandon: There you go. And that’s why I think we love real estate because like, real estate is like that one thing—I mean there are multiple things in life that are like this but like the longer you hold it, your systems get better, you’ll hopefully work less and less because that locomotion—locomotive is moving right? And your wealth goes up and your loans are getting paid down over time.

Your property value hopefully is increasing on a long scale. It doesn’t always on a short scale, but on a long scale, it usually in a long time, money usually goes up. And like it just gets better and better and better all the time. So when you’re in the game for the long haul, when you’re really in this knowing that you’re going to be in this for 20-30 years, it’s really hard to screw it up as long as you’re continuing to try to improve yourself and get better and don’t give up.

Charles: And that’s a piece of advice that I would give to newer folks and some of your listeners, is don’t necessarily focus on the deal because that means you’ve got to be better than the guy to your left and the lady to your right and you might not be. But if you’re thinking about building for the long-term, maybe learn a little bit about lending. A little bit about amortization scales and charts and you guys have a really cool loan calculator. That is where I would spend a little more of my time.

You don’t have to get an MBA. I don’t have an MBA. Okay? You don’t have to be a genius, believe me. No geniuses at this table. You just have to think about some of this stuff like wow, if I actually buy it and I have it on a 15-year loan or a 30-year loan in three years, if it goes up 4% of the year, rent will go up 3% of the year and I’m paying it off, the calculators do all of the work and look at the wealth you can build.

And that doesn’t mean that’s the right or wrong thing. I’m just saying that 99% of investors don’t look at that stuff because it’s boring. And I don’t have a lot of, well, let’s just hope they actually start looking at that because that’s really where most of the money is made and the truth is, it reduces the risk big time. One of the things I like to tell investors is if you want to make money in real estate in six months, good luck.

I personally am not going to work with you because I don’t think you will but if you have a 10-year horizon, you just said it. You can screw things up ten ways to Sunday and you’re going to make a boatload of money. So it’s just deciding what your time horizon is. It’s about you, not the real estate. It’s about you and your risk analysis. Not about the property. That’s what I try to get across to my investors.

Brandon: Yeah that’s a really good perspective. I like that a lot. So let’s shift gears here. We could talk forever on this stuff but I want to make sure we get on with the show. Kind of a last question before we move onto the Fire Round. I want to know where do you see yourself headed in the future? I know you’re not buying a ton of stuff right now. You’ve got all these paid off properties. You’ve got the real estate agent. Where are you headed?

Charles: I don’t know. Personally? Professionally? Which one do you want first?

Brandon: Let’s go both.

Charles: Yeah, I was afraid you were going to say that. So the problem is I absolutely love what I’m doing so much. So two days ago, I had started a benefit a couple of years ago where I challenged a buddy of mine, Joe Mass, who is a great lender and a really, really good friend. We do a lot of athletic things together. And I had suggested that we see how far we can run from sun up to sun down. Just to test ourselves and then each of us donate $20 a mile to the Denver Dumb Friends League, the local shelter. And we did it last year and we raised a bunch of money and I did it two days ago. And we raised over $5,000. We felt really good about ourselves doing it.

And then he had a 15-hour day yesterday and I was teaching at 10 o’clock yesterday morning. I am so passionate, I love what I’m doing so much that the truth is, I don’t know when I’m going to stop doing this. I’m a passionate sailor. In about a week, I’m jumping onto a 42-foot sailboat that a buddy of mine is moving up the coast in Savannah, we’re going to take it up the Chesapeake and that’s what I want to do but I ask myself this question like every hour, is how long do I want to do it? I’m telling you, I work 16-hour days because I’m just in love with what I do and with helping people and making money and building stuff.

So it’s a really great question. My wife’s a teacher and you know, we talk about it. I’m not sure what we’re going to do, to be honest. I don’t know. I just know that my answer is going to be, I want to do what I want to do. And I don’t even know what the definition of work is. Like, evidently I’m working right now. This is work. This isn’t work. This is a pleasure. This is a luxury. This is incredible. Anybody would love to be sitting here talking to you guys. So I just want to do what I can do to be able to do some stuff like this, which is a weird answer but that’s the best I can do for you.

David: This reminds me of a guest we had on, Paul Morris. He gave a speech to what was it, Brandon? Stanford or Harvard or something.

Brandon: A business school somewhere down in California.

David: A really, really prestigious school and the title of it was How to Succeed Without Hard Work or Sacrifice, right? And he was saying that when you love what you do, it doesn’t feel like hard work. You work a 16-hour day and it doesn’t feel like a pain, right? It’s like I love playing basketball. I can play basketball all day long and it doesn’t feel like work. But I burn an insane amount of calories. You’re doing a lot of work.

Brandon would surf as long as he possibly could until he’s too tired to paddle and he wouldn’t say, oh, I just put in a hard day in the ocean. He would love it as you were saying. So if you can harness that power and you can tap into what you love about real estate once you learn it, there are different aspects of real estate, all of it, and you could just drill down on that, it would help a lot in terms of your own success.

So I love that point you’re making and Brandon’s a living example of that. You know, he does what he’s good at. He likes doing it. That’s why he can work like he can work and be successful.

Charles: And last year, I spent about three months out of the year outside of Denver. I go back east for a lot of the summer and you know what I do? I work from my house, it’s my folks’ house, on Nantucket Island, off of Cape Cod, Massachusetts. I work 25-30 hours a week and people find that strange and I don’t. I find them strange.

Like, you don’t like what you do? I like what I do so much that I want to do it. I’ll work from the boat. I do what I want to do. And to me, I don’t know. That’s what I want to be able to do for as long as I want to do it. So in five years, I might be sailing around the world. I’m not sure. Or I might be hoping that you’ll call me back for my second time on BiggerPockets, you know?

Brandon: I love it. Well cool, let’s transition here and head over to the next segment of our show which we lovingly refer to as our Fire Round.

It’s Time for the Fire Round.

All right, let’s get to the Fire Round. These questions come direct out of the BiggerPockets forums. They are real BiggerPockets users wanting to know some stuff and we thought we would fire them at you, Charles. So number one, how do I present the idea of seller financing to a seller? How do I even bring that up without sounding awkward?

Charles: Well, I think you simply have to get to them and explain to them their options and understand that this may be something that makes sense for them. A lot of it depends on the market and a very strong seller market, frankly, they don’t really need to talk to you. In a weak seller market, it could make sense.

But I think it’s a lot of what we just talked about. There’s no particular secret. You want to have the numbers but you want to be able to build the relationship and not like fake—like actually tell them what you believe the truth is because it is the truth and it’s not because you’re such a great presenter, you can fool them. And just say, hey, here’s something you might not have seen before. This is a way that I’ve bought properties in the past. And we’d like to do it if it makes sense for you. This could make sense for me. Do you want to hear more?

The only thing I can say is, you broach the topic and see if they’re interested in learning what their options might be because very few sellers can understand it or do understand it, short of you explaining it to them.

David: I like that. All right, next question. What is the secret to investing in real estate while working a full-time job, Mr. 16-Hour a Week Charles?

Charles: Yeah, I would refer back to my favorite axiom—work harder.

Brandon: All right, I like it.

Charles: I don’t have much more. Like what, you want to work an eight-hour day and build a business? And have a job? I don’t get it. I don’t know. I don’t have a good answer to that. I can just tell you the people who work harder at least have a shot at it and the people who think there’s some mythical way to do it, I don’t think they have a shot at it. Sorry.

Brandon: There you go, I like it. All right, this is kind of a long question but I really like it. So I secured my first big purchase, a nice little cash flowing seven unit. I went in and educated the place—run down, pull in good rents, the numbers worked. I almost had a nervous breakdown the first month but we’re coming around now. We’re good.

So while I’m in the process of recovering my down payment and all the rehab costs, it’s probably going to take me three years to build that back up again, what should I do now that I have no money? My wife’s getting her real estate license but maybe I should get mine, too. I’ve considered being a manager but I don’t really know anything about wholesaling. Do I just hang out and wait for more money to be saved up and be able to buy the next property? It seemed like a long time to do nothing.

Charles: Well, I don’t know the person. I guess I don’t know the person so I don’t know what they want. So it’s not obvious. I mean maybe they would be a terrific real estate agent and maybe that would help their investing career. But the fallout rate from real estate agents is about the same as a fallout rate from investors. It’s very, very high. It’s very, very difficult. People don’t realize how difficult it is to be a real estate agent.

So I think it depends on what they want to do. There’s no obvious answer here. Do you want to be a wholesaler? I never wanted to be a wholesaler. I don’t want to be a wholesaler. I’m not knocking on doors. I work 80 hours every week to not have to knock on a door. That’s not what I want to do. So I think like so much of it, it comes back to this. I don’t have the answer. And anybody who has the answer is selling you their system on what you should do with your life. What the person needs to do is ask the question but I’m afraid they have to ask about themselves and maybe of their wife, what do they enjoy doing? What are they passionate about?

Going back to the last question, what would they like to do after working eight hours a day? Because I’m guessing when you guys were building your business before you became who you are, you might not have been working a 40-hour week. But you were passionate about what you did and you loved it and you built something. So that’s really, if there is a secret to it, it’s understanding what you want to do.

Don’t become a wholesaler because someone told you to. Don’t become an agent. Maybe you just sit back. Maybe that’s what you do. Or maybe you start a Meetup group, you know? Or start meeting other people. Maybe that’s your passion. But you can’t fake it. So you’ve got to do what’s right for you, which is not an answer, but in the end, I actually do think is the right thing you have to do.

David: That’s really good points. I like that a lot. Okay, you and I, Charles, we’re both real estate agents as well as investors. Do you think that other investors should become real estate agents to improve their own investing skills?

Charles: That’s a great question. I was asked that question so often. Once again, I hate to keep saying the same thing but it depends. Clearly, there isn’ a yes or no answer. God help you if you think it’s a yes or no answer. It’s not. It’s who you are and what you want to do. I actually built this like little continuum on a PowerPoint, like a continuum. On the left side might be people who maybe shouldn’t be investors, at least in Colorado. We have a department of regulatory agencies. They regulate us pretty closely. They don’t like investors. They don’t like doorknockers. They don’t like agents who are investors one day and agents the other. And I’ve actually counseled some great producers out of my company, saying stop. Give up your license. You don’t need your license. There are people maybe who shouldn’t.

But let’s say you’re an investor. Let’s say the gentleman who had bought the seven unit. Let’s say you’ve got some friends in your town. You’ve got some family. You know a few people. And maybe, without a lot of extra work, you can close three or four deals a year and make another $15,000 or $25,000. Stay in the game. Learn a little bit more. It depends on who you are.

That person might be the perfect person to potentially become an investor. So it’s a lot of self-analysis, talking to people in your market about what the market’s like and what you want to do. But it’s all about you. That’s so important to do what you want to do. Otherwise, you’re just going to give it up on day three.

David: That’s the perfect answer, I think. I mean, you’ve got to ask yourself, there’s a specific skillset to being a real estate agent. Do you fit that mold and do you want that job, right? There’s no like cookie cutter, this is what you do, follow your ABCs. You’re going to get there because we don’t have cookie cutter human beings.

Everybody is unique and they have different skills and they have different situations where they may have seven kids and so they can’t be on their phone all the time or they may be like me and I’m single and I can work 20 hours a day if that’s what it’s going to take, right? Understanding yourself, I think, is what you’re getting at is the most important place to start.

What do I like? What am I good at? What’s going to get me inspired? And then how do I double down on that as opposed to, well that guy did it so I’ll just copy what he did and expect the same result.

Charles: Exactly and I’ll add one thing to it. In my market, sure. The idea that you’re going to somehow get better deals by being an agent is ridiculous. So that’s the number one thing I tell investors, is don’t for one moment think you’re somehow, we have the deals and we agents know everything.

Certainly in my market, in the greater Denver market, that’s not how it works and I’m guessing that’s the same for a lot of the U.S. Maybe you would though be able to go into a property anytime you want, setting showings and stuff like that. Those are the subtle things that need to be evaluated. So it’s a great question but it’s about you and deciding what’s right for you.

David: Yeah, that’s really good.

Brandon: Well cool, well that’s good for the Fire Round so why don’t we wrap this thing up with our world famous Famous Four. Let’s get to today’s Famous Four. These are the same four questions we ask every guest every week. And we’re going to throw them at you right now.

Charles, number one, what is your favorite real estate related book?

Charles: I will tell you, honestly, it’s Set for Life. When I read Scott’s book, I was stunned. And I’ll be completely honest with you. I don’t read business books. I am the one person that will sit in this chair, I think that you’ll interview in the next 50 years—I just, sorry. I read literature. A little Scott [inaudible][61:34], a little this, a little that. But I was recommended his book and I read it and I’m like, who is this fricking guy? How do I not know this guy?

And so I was actually talking to my son, Obi, this morning, who is graduating from high school literally this morning—I was talking about the book Set for Life and asking him if I had brought it up. He said yeah, you had brought it up. I’m like look, you don’t have to read it but you know, you’re an adult now but I’m telling you, you should read this book.

And you should understand, this guy who was 26 or 27, wrote this book and this was me about 20something years ago doing the things that I did, wearing the secondhand shoes and buying the old cars, man. But you can have the life you want—there’s no secret to it. It’s like, how about work harder? I don’t think he said anywhere work smarter. It just sounded like work harder. And that appealed to me.

David: I love it. That’s a really, really good book. Scott’s actually getting a lot of accolades for that book. He’s getting recognition and there’s a couple of awards he’s up for, for like Book of the Year through different places. It’s actually a really good job he did with that.

Brandon: And they’re publishing that book in South Korea. They’re actually doing another version of it in South Korea. So you know, it’s an international bestseller now, I guess.

Charles: Excellent.

Brandon: Good job, Scott Trench. If you haven’t picked it up, by the way, go to BiggerPockets.com/store and you can get it there. You can get the digital audio or the physical or whatever. Or yeah. Fantastic. All right, cool. Next question, Dave?

David: I was just about to ask you what your favorite business book is but you told us that you don’t read business books. So do you have a favorite maybe self-improvement book or something like that, that you do like to read?

Charles: Okay, so I don’t read self-improvement books. And I don’t mean to sound like a jerk or arrogant. I just feel like, they’re all wonderful books. Just pick one book and do it and you’re done. Don’t pick one book and then don’t do it and read a second book and think the answer’s there. It’s nothing against the author. They’re great advice but enough. One book, do it, and that’s all you need.

I will tell you exactly what I told Scott a couple months ago that my favorite business book, the only one I probably read before, was The Millionaire Next Door. Pretty much everything you need to know is in that book. And then I read Set for Life. Oh, okay. Now I have a number one and a number two. To me, it’s all there. That’s it. And just stop reading more and thinking that you’re smarter. Just actually do what these people tell you to do and you’ll get there.

Brandon: That’s so true. All right, next question. David, do you want to ask it? Do you want me to? It’s up to you.

David: I was going to give you a chance just because I’ve been hogging the mic. Why don’t you go, Brandon?

Brandon: What are your hobbies?

Charles: So I love to stay in shape. I don’t love to run. I hate to run. Running is horrible. It’s just like the best way to do it quick so I do a lot of runs, a lot of races.

Brandon: Have you read the book Born to Run?

Charles: I will tell you a little story about Born to Run. So I was preparing for my first marathon six or seven years ago. And someone recommended the book Born to Run. And I love listening to audiobooks. I’ve been doing it forever in the car. And I actually, this was probably seven years ago. I actually put it on my i-thing, whatever it was. My iPod or something.

And I listened to that book while I was training and all I can tell you is, I literally felt like I was cheating. It was such a good book, it was so captivating, it was so inspiring in the right way that I literally felt like I’d be running these ten and 15 and 18 mile training runs, going thank God I am listening to this book while I’m doing it because I felt like I was cheating. I’m like, I shake when I think about those days. It was that good. If you run a marathon, listen to Born to Run, man. It’s incredible.

Brandon: And I will say even if you don’t care anything about running, it’s like the best story, best written story. It’s not a book about running. That’s why I was confused when I read it. I thought it’d be a training manual for running. It’s not. It’s like a story of like this most amazing race. Anyway, unbelievable. I recommend it.

Charles: I actually had the opportunity to run a 250-mile relay race with a gentleman of that tribe, which was really cool. It was just really, really neat. I’m glad you brought that book up because that’s what I like to read and that’s what I think makes me a better person.

So hobbies, so running—I play a lot of tennis. I love to play tennis. My son, Jack, who is a sophomore varsity player now in high school. I loved to play tennis. I hike and bike. Probably the number one thing though is sailing. I was a baby when I first sailed and I have sailed all my life. Now I live about a thousand miles from a body of water.

Colorado is awesome and I love to ski as well so I like to do something like I call it my 50. I like to combine something like 50 days of skiing and sailing every year so maybe 20 days of skiing and 30 days of sailing or something like that. But that’s what I love to do. If I ever give up the fun stuff I’m doing now, it’ll be because I’ll be on a boat with my wife going someplace and never coming back.

Brandon: Nice.

David: All right. You’ve worked with many investors in your old age, Charles. Tell us, what sets apart successful investors from those who give up, fail, or never get started?

Charles: I think it’s partly passion and partly grit. I think it’s as simple as you’re going to fail. Get over it. Understand it. And then you’re going to fail again and you might fail three times or 30 times. It’s the people who get up and do it again. So it’s just no way around it. I don’t know any investor who hasn’t failed. I like to joke and this is a terrible thing to say but most investors either are divorced, bankrupt, or are alcoholics. And as weird as it is to say that, I’m telling you, this is not an easy business. So I’m half joking and half not.

You have to have a lot of strength of character and it’s not IQ. I guarantee you it’s not IQ and it’s not boldest limbs. It is just—obviously. None of us fit that category. It’s just the determination, maybe, is the right word to just say I’m going to do this and I can do this. And you’ll do whatever it takes. I don’t know if you’ve ever had any sleepless nights being real estate investors but you’d be the only ones who didn’t and that’s why—don’t take this the wrong way but I honestly believe 80% of people shouldn’t be real estate investors.

And it’s not because they’re bad people. They’re good people. They want to spend time with their family on a Friday night and not get called to a meth lab or something like that. But you’ve just got to deal with stuff and determination is what I see as the absolute defining characteristic of the people who break through to the other side.

David: That’s so good.

Brandon: Yeah, I oftentimes say that my best ideas come at three or four in the morning because I can’t sleep because I’m tormented by some real estate problem. How am I going to do this? And then you figure it out after a sleepless night, so that definitely comes with the territory.

All right, well, Charles, it’s been awesome. Where can people find out more about you? What’s your website? You’ve got anything more?

Charles: Yeah, a couple of things. So website, DenverInvestmentRealEstate.com put together with my business partner, Chris Lopez. Just a lot of information on investing. Some of it is specific to the Denver market but a lot of it isn’t. We put on podcasts and webinars and we just are kind of like a teeny, tiny little BiggerPockets. We look at the success you have and said, you know, Denver doesn’t have anything. So thank you for inspiring us. DenverInvestmentRealEstate.com. You can always reach out to me. I’m telling you, I work a lot. Phone number—is it okay to give a number?

Brandon: If you want. We have a couple hundred thousand people listening.

Charles: Try me, you know what I mean? Yeah, sure. Give me a call or send me a text. 303-523-3837. And my e-mail is [email protected]. I love to talk to people. This is the pleasure of my life, is to see what I can do to help someone and someday they’re probably going to help me out and that’s what I love to do. I appreciate the opportunity very, very much.

Brandon: I love it. Well thank you very much. This has been super, super helpful. I love the conversation today. It was fantastic. So thank you very much and we’ll be in touch. Look forward to talking to you again someday.

Charles: Thank you very much. Appreciate it.

Brandon: Okay, bye. All right, and that was our interview with Charles Roberts. Fantastic. Man, that guy understands a thing or two about real estate.

David: Yeah, how did you like them apples?

Brandon: I liked those apples very much, thank you. It was fantastic. I love his focus on understanding the lending side of things. The idea that like the deal matters but like, that’s not everything. There’s so much more than just going out to find a good deal, right? Understanding the whole business as a whole. And yeah, I don’t know. I picked up a lot of stuff. What about you?

David: I think that what I appreciated the most about what he said was he actually said, you don’t get too caught up in trying to find a deal. Oftentimes that’s ego-driven. We want to tell people, I got it for this great of a price. I mean, I’m looking for deals as much as the next person but even if you’re not, you will make money in real estate if you wait over the long-term. What I love about real estate investing is once I got the bug and I knew this was what I want to do and how powerful I realized it was, I changed the rest of the things in my life around so I could accomplish that and I ended up with a way better life.

So I got better at my job. I got better at earning more money. I got better at saving more money. I got better at learning more things and being a better version of myself. So that, I could accomplish what I wanted in real estate investing. And that’s really like the true beauty in what we’re doing here, is real estate investing is a great goal to go after but it’s not the end goal. The end goal is you and what you’re becoming as you chase after it. And if you want to be successful in this, you’ve got to learn a lot of stuff.

We talked about it a lot but the most important thing is being a better version of yourself, being honest, being genuine. Being likeable. Being someone who brings value to other people so they want to bring it to you. I mean, he just hit it right on the head so good and you can’t avoid hard work, right? So find something that you love and throw yourself into that because you’re going to work hard. I could probably talk about this all day long but I’m going to listen to this podcast again. I really, really liked so much of what he had to say.

Brandon: Yeah, he’s got his head screwed on straight. Super cool. With that, I suppose it’s time to get out of here. As we always ask, we will ask it again. If you have not yet left us a rating or review on iTunes, please do so. It helps us reach new people all the time. And you know, if you don’t have an account at BiggerPockets, a lot of people don’t even know that BiggerPockets is not just a podcast.

We are also a social network with a million, or almost a million—we’re going to cross that. I think we’ll have crossed that by the time this podcast airs. A million members. People interacting, talking, sending messages to one another, forming groups, forming friendships. Asking questions on the forums. Whatever. It’s such a cool social network and we want you to be a part of it. So jump in today.

Maybe you have an account and you haven’t been active in a while, jump in. See what you can do to help some people out in the forums or send a private message to somebody and just say hey, noticed you were in my area, I wanted to say hi. Just get active. Jump in there and without further ado, let’s take it out. You want to take it out, Mr. David Greene?

David: Yes, thank you, Brandon. That is some great points you just made about the website. I hope that some more people request me and tell me what they like, what they don’t like about the podcast. We’re always looking to make it better so let us know what you’re looking for and what we can do to improve it and we will make sure we do that. With that being said, this is David Greene and Brandon ‘Locomotion’ Turner, signing off.

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

Be sure to join the millions of others who have benefited from BiggerPockets.com, your home for real estate investing online.