6 Popular Strategies to Make You Money in TODAY’s Real Estate Market

Brandon: This is the BiggerPockets Podcast show 358. Happy Thanksgiving. What’s going on everyone? This is Brandon, host of the BiggerPockets, here with my cohost, Mr. David Green. David, welcome to the solo show with you and I today.

David: Thank you. Welcome yourself to the solo show with you and I.

Brandon: It’s totally a solo show. What did we call it last time, a duet show?

David: Yeah, it’s a duet.

Brandon: We’re doing a duet today.

David: We’re like study and share. We’ll let the listeners decide who’s who.

Brandon: No, okay, there we go. So today’s show, we decided to do something a little bit different because like right now, I’m constantly hearing, and David, I’m sure you are as well, a lot of people talking about how it’s hard to invest in real estate right now. It’s really difficult. But David and I, and I don’t mean to make fun of people because it is sometimes hard, right? But in today’s market, it’s changing, and different things work now than maybe worked a few years ago. So today we want to dedicate an entire show so that you can learn, what should you be doing, what is working in today’s market and give you a bunch of different options. Things that David and I are doing or things that friends of ours are doing, that associates of ours or clients of ours, whatever are doing so that you can kind of get the most out of it. That’s on about right, David? Good explanation?

David: That’s exactly right. You know what I was thinking, is there was a time when people paid a lot of money to learn how to buy real estate, and what they were told was you go to the newspaper, and you look for all the notice of default, and you go not right. That was the hot strategy, and it’s kind of now we think about that is so archaic. But it wasn’t really that long ago. You kind of have to accept that real estate is always going to be changing. The environment changes, the culture changes, technology changes, how things are done change, and you got to kind of move with that in order to always be able to get the next deal.

Brandon: Agreed. Agreed. Hold on one second. I’m going to click pause here. I have to put my headphones in, so it might affect the sound a little bit. So I better do that. Check, check. I’m still working there.

David: Gotcha.

Brandon: Let’s go here. Let’s change these two speakers. Headphones. All right. Give me a check, check.

David: Check, check.

Brandon: All right. Yeah. Okay. On the video, it’s going to be suddenly like, boom, headphones on. That’s funny. Yeah.

David: We pretty much went through the whole [crosstalk 00:02:55].

Brandon: Yeah. Okay. Yeah, yeah.

David: Just tell them what today’s show is going be about.

Brandon: Yeah. Okay. Exactly. Exactly. So today’s show is about six different strategies. We’re going to go through six strategies kind of in depth, talking about each one, why it works, the stories of how it’s worked and kind of how you can use those to make money in today’s market, then we’re going to shift to talking about some accelerants, we call them accelerants, things that you can pour fuel on the fire to make those strategies work. Now, before we do that though, let’s get to today’s quick…

David: Quick-

Brandon: I was waiting forever on you.

David: It took longer to say the quick tip than the quick is probably going to be.

Brandon: I know. The quick tip today is very simple. If you are looking to get started in investing in real estate, a really important thing to do is to start connecting with local people in your markets. I want to challenge you today is to find somebody in your market over the next two weeks that you can take out to coffee lunch, get on a phone call with, go and sweep their garage floor. I don’t care. Find something you can do in the next two weeks to connect with a real estate investor who’s further along the journey than you are.

Brandon: I don’t care if you’ve done 100 deals, find somebody who’s done 200, right? So somebody further along, find someone in your market, and at least connect with them, make a face to face connection in the next week. Of course, you can go to biggerpockets.com/events to see if there’s any events in your area or engage in your local forum or just connect with people like somehow or go door to door until you find a landlord. All right, so that’s today’s quick tip. Now, it’s time to get into this show. Let’s just jump in. Like I said, we’re going to talk about six different strategies that you can use today in today’s market to make money in real estate, things that are working today. I want to start with probably the hottest buzz word, if you can even call it a word, the buzz acronym of the year. A book just came out about that topic recently from David Green here. It’s called BRRRR. David, what the heck is BRRRR Investment for those who have not heard of that

David: BRRRR is an acronym that you came up with, and I got all the credit for, which yeah, I got to say I’m not too unhappy about that. I’m not mad about it. It stands for buy, rehab, rent, refinance, repeat. What were you going to say?

Brandon: I was going to say I’ll send you a check or a bill later for my royalties for that. I’ll be talking to you then.

David: You deserve it, but you never would. You’re a good guy. It’s really funny. In fact, I’m actually kind of like possessive over it, even though I didn’t make it. Whenever somebody else teaches on BRRRR, I’m like, “Who do you think you are?” Right?

Brandon: Yeah. What’s your problem, man?

David: I own BRRRR, but I don’t. In fact people have been BRRRRing before BRRRR was ever a name.

Brandon: Yeah, it’s true.

David: It’s basically just this principle of buying an asset, which is usually real estate because that’s what we talk about, improving its value, and then refinancing it when you’re done to recover your capital to go reinvest. It’s an extremely simple business principle that people have been using for years to make money. But you and I have figured out very specific ways that we can apply it to real estate, and it’s helping a lot of people build a lot of wealth.

Brandon: Yeah. One of the questions people ask all the time is, why go through that whole thing. So BRRRR, let me say the acronym. So it’s buy, you buy a property. I would say you’re usually using short term money of some kind. Because here’s the deal. You’re probably buying a nasty property, right? Most BRRRRs are somewhat nasty, and banks do not want to lend on a nasty property. So you have a couple of options. You can sit on the couch watching TV or you can find another way to buy this. That’s what we do. What have you used for BRRRR to buy a property?

David: I’ve used my own cash. I’ve used private capital that I borrowed from other people. I’ve taken HELOCs on properties and used that cash to do it. I’ve refinanced former BRRRRs and taken that money to buy the next one.

Brandon: Exactly. Yeah. So there’s different strategies, and there’s a lot of them. I’ve done a lease option once to BRRRR, I’ve done seller financing to BRRRR. We’ll talk about some of this stuff later in the later half of the show when we talk about the accelerants. But the idea is you use short term money. Probably, the easiest short term money for a lot of people is probably hard money. Because a lot of people don’t have the private money connections yet. But hard money lenders, they’re just people who basically finance flippers, but they also finance BRRRR investors. So anyway, you buy the property, it was short term money, you then rehab it, you fixed it up and make it really nice. In the beauty of that, when you’re going to hold onto it because these are rental properties, you’re going to hold onto it.

Brandon: Now, your repairs and maintenance budget drops because everything’s already been fixed ideally. So you buy it, rehab it, then you rent it out. What’s great is you now have a remodeled property. It’s a rehab property, which means you can rent it out for top dollar. Tenants love to live in remodeled property. So you now rent it out. Now you’ve got this beautiful property that’s really nice. You go and go to a local bank or any bank and say, “Hey, I’ve got this really nice property. Now, do you want to lend on it?” The bank’s like, “Heck yes, we do. We like nice pretty properties.” So then they give you a loan. Now, with that new loan, you pay off the short term money. So now you have longterm money, you pay out the short term money.

Brandon: Now that your short term money is freed up, whatever that was, whether it was your own personal cash or a hard money lender, you can go and repeat the process, so buy, rehab, rent, refinance, repeat. All right. So the question I want to know from you David today, is like, what do people, if they want to start BRRRRing now, what do they got to do? What are some of the just obvious first steps?

David: Well, the first thing you have to do is you start with the acronym and you work your way down. In the book that I wrote, the BRRRR book that BiggerPockets published, I kind of talk about if you master every stage of BRRRR, you’ve basically mastered every stage of real estate investing. If you can master buying good deals, rehabbing them, understanding how to rent them out and analyzing that, understanding how to refinance them and help in creating systems to repeat the process, you become what I call a black belt investor. You’re going to make big wealth. So it starts with buying good deals. Yeah, there you go. I like that. I was just telling Brandon-

Brandon: My Friday move.

David: … before we recorded that with his long arms, he’s like Dawson from Street Fighter II. Everybody ever played that game. Send Brandon a yoga on Instagram. He’s beardybrandon. Then get back to listening to this. Because this is a really good show. I don’t want you to get too distracted. But you got to buy good deals. In fact, that is where all wealth comes from in real estate investing. There’s a small argument to be made for making good deals and adding value through the rehab, and we’re going to touch on that later in the show today. But buying good deals is really where it’s at.

David: What I love about BRRRR is, if you start with the end in mind, and you know you have to refinance this when you’re done, and you want to get all your capital, you probably got to be all in for 75% of what it’s going to appraise for, which means you got to buy a really good deal. You can’t buy mediocre deals because then BRRRR is pointless. If you’re refinancing at the end, and you’re not getting more of your money back than if you just bought it traditionally, then what’s the point? Why go through all that? So it starts with finding good deals.

Brandon: Yeah. That’s exactly it. Learning how to find good deals, I always say it’s like the number one skill an investor can have is knowing how to like run the numbers and determine if it’s a good deal and building that pipeline. We’ll talk about that later again, the pipeline or the funnel, that’s part of the accelerants that we’ll talk about later. But here’s an example of BRRRR. I want to give an example, and I’ll let you do the same, David, just so if this is a little confusing to people. So I bought a property. I love telling this story. It’s the Rosie story, right? So I bought this fourplex for my daughter, Rosie, the week she was born. I have a philosophy that if you buy every kid you have a property, just any property, like simple, basic, cheap, doesn’t matter, property on a 15-year mortgage before they’re like five years old, then by the time it’s paid off, it’s paid off, it’s worth hundreds of thousands of dollars, and now their college educations paid for it. So that was the deal.

Brandon: So I bought this property super cheap because it was nasty. It was disgusting. There was a garbage hoarder in one of the units, and the other one was a Vagrant living there, and then the other two were just destroyed. So we bought it for, it was $40,000, it might have been $45,000. Yeah, $45,000. $45,000. We then put a 120 grand into it. So we bought it with a combination of private money, and I got just a line of credit from the bank, just like an unsecured line of credit. So I bought it with that. So I had no money out of pocket. So we bought it for $45,000. I put $120,000 into a rehab.

Brandon: That $120,000 also, that came from those two sources. So the hardware lender or the private lender let me 100 grand, and then I borrowed the extra $45,000, $50,000 I needed, where it was, or $60,000, anyway, from the bank line of credit, which made it. So I had very little money in this deal. Then once it was all fixed up, all four units were rented out. It’s a great property. We went to a local bank and we refinanced it. It appraised at like 225 if I remember right. We had, whatever that is, 160 something into it. So we were able to get a refinance, so I could pay back the private lender. Then we now have a low, just a nice 30-year fixed mortgage. Well, it’s a 30 year mortgage that I have set to it pay off, it’ll be paid off entirely-

David: 18 years, right?

Brandon: … in 18 years from the time I got the loan. Well, yeah, 18 years from the time we bought the property, it’s set to paid off. So Rosie will be 18 when that’s paid off to nothing. Now, that money was freed up. So guess what? My private lender, he lend me money on another deal. In fact, we’ll talk about syndication later, but I did a syndication. He just put money into my syndication because I can use that same money and recycle it. So that was an example of a BRRRR deal. I’ll throw one at you if you want to give an example.

David: Yeah. So the example I like to give is the very first one that I ever did that worked out really good. I had this property in Arizona that wasn’t performing very well, and it appreciated in value, but the rents weren’t going up. So I sold that property, I took the money, and I bought a property in Florida that was undervalued through a wholesaler. I fixed it up, and it was worth so much more when it was appraised than it was when I bought it. Not only did I get all my capital back, I got another 15,000 back. So I put 65,000 into it from the Arizona house and then I got back $80,000. I then use that $80,000 to buy the next BRRRR deal, got all that 80,000 back, and continue that process to buy about 10 more properties that year. Now, those 10 properties, you can imagine every time you buy a new property, I’m increasing by an average of $25,000 in equity on each one and about $300 in cashflow.

David: So that’s 3 grand in cashflow, plus $250,000 to my net worth out of the same $65,000 that was one house. I turned one house into a 10. If you get a good deal every single time, it’s that analogy of the snowball that rolls down the hill and it grows bigger as it goes. That’s what BRRRR can do for you. This is why this is such a powerful strategy. Now, it’s not easy because you got to get a good deal. You can’t just go pay market value for something. You can’t go buy something that doesn’t need work. Usually, you’re going to have to manage a rehab.

David: You’re going to earn that money, but man, if you look at like Rosie, you put all that money in, you got it all back out. So you got your capital to buy your next deal. She’s got a house. You’re going to enjoy the cashflow for the next 18 years, and she’s going to be set. She’s going to have enough money to pay for her college, her car probably get a down payment for a house, and then somebody’s left over that she could start a retirement account, all because of one good decision that you made 18 years earlier.

Brandon: Yeah. That’s the power of real estate, right? You do stuff now, and it affects you years and years later. But what I love about rental properties, especially BRRRR, is you can get cashflow now and wealth later. You can get both. You have to choose between them. That’s one thing I like about it. Now, David, in today’s market, which is super heated, we’re at probably the top of the market or at least coming close to it, people are getting a little bit worried about it being toppy. Why is BRRRR a good strategy in this market?

David: Well, you never know what the market’s going to do, and that’s the first thing you have to understand is it could go out at any minute. Now, you and I, we talk, we’re happy if the market goes down because we can go buy houses cheaper. We’re actually kind of rooting for that in a lot of ways. Even though I’m a real estate agent, I’ll make less money in my business, I’ll make more wealth buying properties. But when you BRRRR, you get in and you get your money back out. Now, the only way that you get hurt if the market drops because who really cares what your property’s worth, as long as there’s cash flowing, it doesn’t matter to you. But the hurt is if you all your capital into a deal and then you can’t buy properties when they’ve got down, the opportunity cost is really where you lose money when you buy too early.

David: In fact, that’s why most people say, I don’t want to buy right now because what if the market goes down. Well, what they’re realizing is if I put my 50 grand into the market now, then it goes down, I’ll really wish that I had it when it dropped. Well, BRRRR lets you have your cake and eat it too. You put that 50 grand in, you get it back out, the market drops. You’re in the exact same position, just with another cash flowing rental property. So it’s really the wisest way to be a wise steward of your money and make it work the best for you. You’re muted.

Brandon: Sorry. All right. The way that I like to look at that is, typically in a BRRRR, like you said earlier, you want to make sure that you have like 25, 30% equity in the property at the end. In other words, for simple math, let’s say you find a property that after it’s all fixed up and beautiful, it was worth 100 grand, which means the bank is going to give you a loan. Again, after everything’s said and done, the property’s worth 100 grand, the bank’s gonna probably give you a loan for $70,000 at the end during the refinance, which means you need to make sure that you’re all in, all your money, what you bought it for, all the rehab, all the closing costs, everything. If you want to get all your money out, you need to make sure you’re not over $70,000 total, which is totally doable. I mean, flippers do that all the time. House flippers do it. So soaking BRRRR investors.

Brandon: But here’s what’s cool is that, let’s say people will say, “Well, what if the market crashes in the middle of the BRRRR before you refinance?” Well, good thing you only owe $70,000 on a property worth 100,000. Oh no, the market crashed 10%. Now it’s worth 90,000. Okay, well, now you have a choice. You can refinance it and just have some of your cash left in it or you could just sell it. What if it drops 20%, okay, just sell it, 30%, sell it. So you have a long way to drop before you’re really in trouble. That’s why I like it in this part of the market cycle.

David: It’s funny when people ask that question, “What will you do if the market drops right in this tiny sliver of time when you can be-”

Brandon: Yeah, the six-month period, basically. Yeah.

David: Compared to the whole 30 years of real estate or whatever. But what if you bought it traditionally and you paid 95,000 instead of a 100,000 and you think you’ve got a great deal because you paid less, how much money are you going to lose in that case? So, even though BRRRR isn’t perfect, you could lose money. You are so much less likely to lose money than the traditional method that it’s, to me, a no brainer the way to go.

Brandon: Yeah, there you go.

David: Two more things I want to say about BRRRR before we move on. One, like Brandon said, when you fix it up and you’ve put money into the rehab before you refinance, you get that money back when you refinance. If you put money into a deal after you’ve already bought it, that money’s just gone. One of the benefits of fixing it up, buying a fixer upper is you reduce your capital gains, sorry, your capital expenditures, right? How much money I have to set aside to replace things because I did it all in the beginning and then got that money back. So it’s going to cashflow better when I fix it all up in the beginning.

David: The second thing is what we’re describing is basically the same as what a house flipper does, but instead of selling it, we keep it. So you’re going to pay costs when you refinance it, but you’re going to avoid closing costs on selling a house. You’re going to avoid real estate commissions, and you’re going to avoid the capital gains tax because you kept the property. It ends up being much cheaper as long as the place will cash flow than flipping a house, and you would have to pay all those things for the same work if you are flipping instead of BRRRRing.

Brandon: So what do you think people mess up on, last question before we move on? When they BRRRR, what do they screw up on?

David: Two things. One, they mess up on the appraised value, the ARV. That’s definitely something that it’s very, very tricky and hard to get down. I like to actually pay an appraiser to look at it or use real estate agents that are really good because if you think it’s going to be worth 100, and it ends up being worth 78, that’s going to affect how much of your capital you could get back. Oh, you had something to say?

Brandon: No, no. No, just saying that’s good.

David: Two is the rehab. That’s the case for any kind of real estate. It’s not unique to BRRRR, if you’re BRRRRing your traditionally, if you’re flipping a house, whatever you’re doing. Rehabs are tricky. They always go over a budget. They always go over the timeline you’re supposed to have. But if you make sure that those two things go right, it’s very difficult to lose money when doing a BRRRR.

Brandon: Yeah, that’s really good. Yeah, I’m looking up right now. I’m scrolling through my tax return this year. Let’s see. I want to see what my actual cap X was on Rosie’s property. Let’s see. I’m scrolling through. Hold on. I’ve got so many properties. All right. Let’s see.

David: Let’s all feel bad for Brandon because he has so many properties.

Brandon: I know, it’s rough. All right. So we’re sitting at $4,000 in all repairs and maintenance and cap X. Everything for the whole year was like $4,100. Now, I’m getting $2,800 a month, times 12, 34. Roughly $34,000 a year. So last year, so we had about 11% in total cap and repairs and maintenance last year, which isn’t bad at all. I usually see anywhere between 5 and 10% each for repairs, maintenance and capex. So typically, I’m between 10 and 20% on the high end, 20 on the high end, 10 on the really low. So I was at 11% last year on all repairs and maintenance for that. I’m trying to see what other numbers I can pull out of here.

Brandon: My depreciation was five grand. So I depreciated more than my entire repairs were, which is awesome. Yeah, that’s awesome. So again, that’s why I love real estate. I’m looking at this deal right now. So last year, we made $9,000 on that property. So slightly less than the year before. The year before, I actually made it was like 12,2 or something like that. So 750 bucks a month in actual… Oh no, no. That’s what depreciation. I got it back in again. So it was actually 9 plus 44.

David: You made more money.

Brandon: So I actually made a little more money than last year.

David: 13,400.

Brandon: Yeah, it was just a little over $1000 a month in cashflow on that one. Yeah. So, again, the BRRRR is awesome because you can get cashflow now, and you can get a wealth later. So this property is getting paid down quickly, and I’m also getting cashflow to live in Hawaii. All right. Anyway, I thought that would be kind of fun to look at that live here while we’re recording this as, how did I do on that property last year. I never actually looked too in depth at that one. I got my returns back. So moving on. Number two.

David: Next strategy. What do we got?

Brandon: Let’s talk about house hacking, which is really, it’s a book of BiggerPockets called the House Hacking Strategy by Craig Curelop because this is a really, really popular topic in today’s market because a lot of people… I mean, it’s crazy right now. Rents are crazy, but purchase prices are crazy. As most people are probably aware of, your biggest expense in life is likely your housing expense, or most people, their biggest expenses are housing expense. I mean, for many people, it’s like 50% of all the money they make goes to their housing. Imagine if you didn’t have to pay that 50%.

Brandon: So house hacking is the idea where you buy a property and use it as both A, an investment property and a primary residence. The most common usage is you either buy a single family house and rent the bedrooms out or like the way I started. I mean, I started with that with my very first house. I went to the bedrooms. Secondly, then I bought a duplex, and I rented out the other unit. So, in both those cases, I was able to live for free. I know David, you’ve done the same thing.

David: Yeah. So I’d say as a real estate agent in the Bay area, probably 30% of my clients are coming to me because they want a house hack. That’s how powerful this is. You summed it up perfectly. You are combining, owning a property to live in with owning investment property. One of the reasons this is so powerful is you can use the really low down payment loans to get into the market. When houses are expensive and the market is hot, it’s really hard. Stuff like this becomes that much more important. You have to be able to take advantage of 1%, 3%, 5% down loans to get in and reduce your living expenses and start to learn how to be a landlord and eventually get to the point you have cash flow and start building equity and start paying your loan down. You get all the benefits that come from owning rental property without needing as much capital to get started and frankly by taking a much smaller risk.

David: Because when it’s your own property and you get to pick your tenants and you get to come to learn the ropes at a slow pace and kind of playing in the shallow end of the pool, it’s really good for your confidence, and you also have to put less money in. So you reduce your risk at every point. I gave a seminar, this is the Sacramento actually two nights ago, and I was thinking when I was talking, I don’t know why every single human being doesn’t house hack. You should do. If you want to build financial freedom, either you should buy a property and be renting out rooms or units or you should be on the other end of it. You should be renting out rooms or units from somebody that has it until you save up enough money that you could buy your own.

Brandon: Yeah, it’s such a great strategy. In fact, like in Hawaii here, where it’s very expensive in Hawaii, just like it is in Bay area, they don’t call it house hacking here, but everybody in Hawaii pretty much is house hacking. The whole state is pretty much house hacking because you can’t afford it. The average person doesn’t afford to live in Hawaii, unless you have two or three units rented out at your property. So we call them Ohana units here. There’s so many of them. Some are legal, some are just like, somebody takes a basement and turns it into a unit or they take a bedroom and add up a little kitchenette. But everywhere you look in Hawaii, people are doing that. So it works. I mean, I did it in Grays Harbor, Washington where I bought a property for 80 grand, a duplex on a house hacked. Then I house hacked here, where you buy houses for almost $2 million, and you have to have a hack to make it work. So, again, it works, and it’s very, very powerful.

David: There’s so many ways you can do it. So I think on a future episode, we’re going to interview a client that I had. They’re actually hose hacking an assisted living facility.

Brandon: Really?

David: They bought a property, yeah, and they’re going to rent the rooms out to people who need assisted living, like typically elderly people. They’re probably going to make five to six grand per room on this four or five bedroom house, and they bought it with an FHA loan because they’re going to be living in it, right?

Brandon: Crazy. That’s cool.

David: So, when all is said and done, they’re going to be making 10,000 to $15,000 a month to run this business out of their house that they put three and a half percent down to buy and got rid of the payments that they were paying when they were renting. That is so many wins stacked on top of each other. If you just did that every year, and for them, if they had 10 houses, and they’re making 10,000 to a $15,000 a month or maybe more, that’s massive wealth that you bought, putting 3% down on a bunch of houses because house hacking uses that powerful.

Brandon: Well, on that note, and not to deviate from the house hacking too much, but we don’t have that as one of our six, but we probably could have made this a seven thing is assisted living is a really interesting strategy. I’m definitely intrigued by it. I’m not going to do it because I’m stuck on my mobile home park thing right now. But whenever I talk to people are doing it, it just makes so much sense right now. Baby boomers are getting older and older, and there’s a whole lot of them coming up into retirement age. They’re going to need a place to live. If you can now own these little assisted living for elderly or for developments of disabled or whatever, I mean it’s a business that’s not necessarily straight real estate. You own a business, but it’s very powerful, and I know some people are making a killing right now in this market doing that.

David: Yeah, probably more to come on that later. But for now, let’s just move on.

Brandon: Moving on. All right. All right. So now, number one was BRRRR, number two was house hacking. The one last thing I’ll say about house hacking is one of the reasons it’s so powerful too is the three and a half percent down payment or 3% down payment. If you’re going to live in a property, banks don’t require the 20 or 30% down that you’d normally pay for rental. So anyway, just keep that in mind if you’re just starting and got not a lot of cash. It’s a great way to get in for almost nothing. If you’re a VA or if you’re USDA, if you’re out in the middle of nowhere, you get 0% down as well, which is pretty cool.

Brandon: All right, moving on. Number three, what’s working today in this market, house flipping. It’s still working in today’s market really, really well. In fact, I’m in the middle of a couple house flips right now that we’re projected to make between 50 and 100 grand a piece on. It’s awesome. Because people are paying crazy amounts for houses. But it doesn’t mean to every flip goes well. So what are some things that people should know about flipping houses in today’s market, especially in the Bay area where you’re seeing a lot of probably flipping competitive?

David: Yeah. This year, I’ve done two so far. I close on my third one either today or early next week. So I’m still flipping house here. In fact, there might not be a market where you can’t flip houses if you really think about it, right? Because what stops you from being able to rent properties is either there’s no one to rent it. I guess in that market you can flip houses if there’s no one to buy it. But assuming there is. Or the prices are too high for the rent to price ratio to make sets. But prices never gets too high if you can just sell it for more than what you paid for it. So that’s one of the reasons that I feel like how something needs to be a part of your repertoire. Even if that’s not your main strategy, it’s not really going to build you as much wealth because you get taxed so heavy on it.

David: It is a really good way to make money and build capital that you can then reinvest into real estate. And Brandon, I know you’ve got a couple of examples. You’re flipping houses out there in Hawaii. If you guys have a house to sell, you should definitely hit Brandon up because they’re doing that. But everybody needs to have this understanding it forces you to be a better rehabber, it forces you to get better at understanding values, and it forces you to look at a deal and say, “What’s the highest and best use? Is this a rental? Can I turn it into a multifamily. Can I sell it? Should I wholesale it? Should I buy it and live in it and do a live in flip?” But what we’re doing with house flipping is I’m basically looking at properties that somebody wants to sell usually quick. It’s someone who doesn’t want me to list it for them as a real estate agent. Or it’s a deal that a wholesaler found that my partner, and we go in on it.

David: So, the one I’m buying right now is actually a friend I had that was going into foreclosure. I bailed them out. I stopped the foreclosure process, I gave them a certain amount of time to pay me back. They couldn’t pay me back, so instead I’m taking title to the house. I’m giving them enough money to go and get an apartment complex to live in. They’ve been able to live red free for six months now, so they’ve saved up enough money that they can start their life. I’m taking over title to the house that I stopped, and we’re going to fix it up and sell it so I could get my money back and make a profit.

David: Now, I’m using that as a specific example because that’s not something David Green realtor, David Green host of BiggerPockets podcast can say I did it and you can’t do. Everybody out there can build relationships with people in their sphere of influence and say, “Hey, when you know someone who’s in a jam financially or in a jam with real estate, think of me and give me a call.” If you can solve that problem for them and you can set this up, you can do the exact same thing I did. There’s nothing special about this one.

Brandon: Yeah, that’s great. Yeah. House flipping is cool. There’s a few skills you need to be good at. This is going to sound really familiar because we just talked about them. You need to be good at finding good deals. You need to understand the after repair value of the ARV. In other words, what’s a property worth when it’s all fixed up? Then you need to understand how to manage a rehab. So it’s when we talk about BRRRR. It’s really like the exact same thing. If you can manage a rehab, if you can manage a deal pipeline, if you can manage analyzing a deal to make sure you’re going to make some money on it, house flipping can be a really powerful strategy. Now, the downsides of that, of course, is we are a toppy market. We are at a very competitive hot market right now. So, if you’re going to flip houses in today’s market, there’s some things you got to be aware of, such as?

David: Well first, what if you can’t sell it? So, this house in particular, the house itself is going to be fixed up, and then it’s got, what do I describe it, kind of like a California room or a Florida room in the back that’s humongous. I mean, probably like 1200 square feet. It was used just like an entertaining room a long time ago. So it’s got this bar built in where it’s got the plumbing that you can put in a kitchen, and it has a bathroom attached to it. So we can easily take that thing and turn that into a two or three bedroom unit itself with a bathroom and a kitchen and rent that out in addition to the main house that we fixed up. We have a rental property if something goes wrong and we can’t sell it. That’s one of the biggest things is like having multiple exits is really good.

Brandon: Exit strategies. Yeah.

David: Yep. The other thing, if you don’t have exit strategies or multiple ones, it’s just to make sure there’s so much meat on the bone that even if the market turns around, you can still sell it and get your money back. I mean, this deal has a ton of equity in it, and that’s why I would comfortable doing it. When I saw what this person owed on their mortgage and that they were behind, the reason I was willing to get them caught up was because I knew there’s so much equity in this property. You’d be ashamed. The bank was going to make a grip. They were going to make a ton of money if it went to foreclosure. Better that one of us would do it and she would get a little bit of money out of the deal than nothing.

Brandon: Yep. Yeah. That’s a great point. Yeah. The meat on the bone thing is so important. I had a buddy reach out a couple of days ago. He said, “Hey, I’m looking for a partner to do this flip with me, like a financial partner. Do you know anybody interested or are you interested in working on it with me?” So I looked at. It was my old town. The purchase price seemed great. It was $30,000. I said, “Well that’s a pretty good deal. That’s a low price for a property, 30 grand.” I looked at the numbers, it was 30 grand for that. It was 70 for the rehab. So it’s going to be $100,000 total into it. What was the RV? What was it worth when it’s fixed up? It was 120, 118. With realtor costs and all that, his projected profit was $8,000. Now, that was with zero financing. So he wanted a partner to come in and finance the entire thing and then split the profit. I’m like, “You do realize you’re talking about somebody putting in 100 grand to make $4,000 in profit in a toppy market.”

David: Assuming it all goes perfectly. Yeah.

Brandon: Assuming it all goes perfectly well, you’re talking about making like four grand.

David: 4% on best case scenario. That is not meat on the bone. That is the chicken wing that somebody has already eaten every single piece, and you’re hoping that there’s a little teeny tiny piece of tendon that got left on there.

Brandon: Yeah. My response was like, there’s just not enough meat on the bone. I would not touch a flip today in that market if I wasn’t making, in that market, 25, 30 grand in Hawaii, I don’t want to touch a flip, unless it’s a hundred. Our projection at $100,000 because if the market drops, and I’m paying 700 grand for a condo, I got to make sure that if the market drops significantly, I’m not going to be screwed and be a hundred grand under. So meat on the bone, very, very important.

Brandon: Yeah. The one we thought we were going to make a hundred grand profit, it looks like we might make 60. Boohoo. Because the comps aren’t where they were. So I’m still doing okay. Comps have softened a little bit in that area. Okay. That’s why we project 100K because if something goes wrong, we’re going to make 60K. We’ll survive. So, and then like you said… Go ahead.

David: You were going to say multiple exit strategies, right?

Brandon: I was, yeah. Yeah.

David: Yeah. I was going to say it’s funny that when you’re first getting started, you tend to look at the best case scenario and try to find a way to make it work. When you’ve done this for long enough, you just assume all hell is going to break loose on every deal. That extra meat on the boat is not actually going to be there.

Brandon: No, no.

David: Comps of that meat are getting taken off on every deal.

Brandon: Yeah. There are a lot of investors out there who come in on budget and on time with every flip, and I’m always very jealous of them. Guys like J Scott. It’s like, “Yeah, I’m like three grand under budget.” No. I have never, I don’t think in my entire life. I don’t think I’ve ever been under budget on any flip I’ve ever done. Every time, I’m over. Even if it’s just a few hundred bucks or a few thousand, I’m always, always over budget a little bit. So I just learn to expect that, and I just like chunk chunking an extra 10 or 20% of the end, knowing that I’m going to be over budget. I don’t flip enough to have my systems that perfect to never go over.

David: That’s what it comes down to. That’s why J does it so well.

Brandon: Yeah, it is.

David: He does so much. He has the same crews. Not just he himself, but all the people on his team do this all the time. They already paid the price going over budget many times in the past, so now they’re good. If that’s not you, then just expect you’re going to pay a lot more than you think and make sure that there’s got to be a lot of meat on the bone.

Brandon: Yeah. So, for flipping houses, let’s talk real quick about financing. So the most popular way to finance a flip is typically what we call the hard money. So hard money are these companies out there that exist to help you fund your deal on. For example, the deal that we’re closing that we should make 60K on… Do you remember Cory Nemoto we had on the podcast?

David: I love Cory.

Brandon: Yeah, Cory is awesome, right? So Cory started a hard money company in Oahu. So like I called up Cory, and we’re like, “Hey, can you fund this deal?” So Cory is funding the deal through, I think it’s K-E-C-O Capital. They are on Instagram, Keco Capital, K-E-C-O Capital on Instagram or you can look at the show notes page.

Brandon: Yeah. Anyway, they’re funding this deal. They’re funding I think, what was it, 90% maybe of the purchase price and like most of the rehab. So it was very little money out of pocket. I mean, rates for hard money used to be like 18, 17% interest rate. Now they’ve come down to like… I’ve even seen them high single digits. But usually low double digits, high single digits for interest and maybe a couple percent fee, we call them points. So, as long as you work those into your numbers, hard money can be a fantastic way to get started flipping houses.

David: Absolutely. I’ll tell you this, I don’t know that hard money rates will ever be as low as what they are now.

Brandon: No, no.

David: Right now. Hard money almost barely is hard money because we’re calling it hard money, but this is like what private equity or private capital was like for most of the time that I’ve been investing.

Brandon: Yep. Agreed. Yeah, I totally agree. It’s because of supply and demand. There’s a lot of hard money lenders out there competing for your business. In fact, if you guys want to look for a hard money lender in your area, we have a directory. So we don’t like to prescreen them, but go to biggerpockets.com/hardmoneylenders, and we just have the web’s largest directory of hard money lenders. You can just jump in there and check them out. So, again, hard money can be a great way to flip houses. But like you said, I want to revisit one thing as we transition to the next segment or the next strategy.

Brandon: You mentioned having multiple exit strategies. So here’s what I’m doing. Because I don’t like flipping houses in a toppy market. I don’t want to do all that work and then make no profit. So everything I do has to have a couple of strategies. I’m flipping two condos right now. Both of them are zoned for what we’re going to talk about in a second, which is vacation rentals. So, if something goes wrong or the market starts to drop, I can turn those into vacation rentals and then just rent them out. So that’s kind of my exit strategy on those. Other times, it would be, hey, I can just fire sale and get it sold as quick as possible. Other times, I’m just going to do a traditional rental.

Brandon: Another example is I almost flipped the house. It was like $2 million house. It was a big house. It needed half a million worth of work. So my strategy for that, because it was such a big rehab, I was just going to partner with someone. I was going to find someone, like somebody wealthy, who could bring all of the money and all of the rehab costs, and I was going to manage all of the work, and then we were just going to split it 50, 50, the profit at the end. I might have put in something just to make the person feel comfortable, but the beauty of that is if the market really something went wrong, this person who’s a wealthy individual, well, worst case, we just have to hold on to the property, rent it for a few years, and we’ll sell it later.

Brandon: So you can’t lose money if you just hold on long enough, and especially in that kind of a situation because it wouldn’t be a mortgage, it would just be somebody’s capital started. Again, exit strategies is very important. But like I said, my exit strategy is vacation rental. So let’s talk about that. I don’t think, do you have any vacation rentals, David?

David: No, I don’t have any, and that’s just because they take more time to manage than regular ones do. But I’m not against the strategy at all.

Brandon: Yeah. We should talk about J Martin real quick. So J Martin is a buddy that both of us know. J does a lot. He was in the Bay area, ended up buying a bunch of vacation rentals. He bought some, and then he does what we call Airbnb arbitrage. Anyway, ended up just becoming like, now he just travels the world just like traveling around. He doesn’t even have a home exactly. He’s literally homeless. He has a team of virtual assistants managing vacation rentals. So it’s kind of a cool story and it’s a cool strategy for being able to pull something like this off. I mean, again, a lot of people are doing this right now because it’s a very popular topic. So vacation rentals. Do they only work in vacation areas, David?

David: Probably or maybe not vacation areas, right. It doesn’t have to be a vacation, but it does have to be somewhere that people are going to travel to. So a lot of people like J, they’re doing corporate housing. So they’re buying properties that businesses are going to send somebody to. It could be a traveling nurse, a traveling geologists, a doctor. Anybody who’s going to be moving around that doesn’t want to necessarily pay hotel rates is I would say what your target market.

Brandon: Exactly. Yeah. Yeah. Maybe the better term is short term rentals. Because short term rental could be corporate housing, it could be vacation rentals, it could be whatever. Yeah. I mean, I did it for a little while in Grays Harbor County, Washington, which is definitely not a real tourist area, and it worked for a while. I mean, it wasn’t more headache than I wanted. But yeah, it does have to be somewhere that people at least want to travel. But yeah, again, that could be weddings. I mean, I have people that do it in Nashville, people that do it in… Pretty much any city, it would probably work in because people traveled the cities all the time for things. If there are hotels, you can probably do a vacation rental or a short term rental. That said, like I said, I had one for a while, and I didn’t like it because it’s hard to have one. You know what I mean?

David: Well, talk about that. Why is it hard to only have one?

Brandon: Because your systems just aren’t there. It’s flipping a house a year. It’s actually easier to probably flip 20 houses a year than it is to flip one house a year. Because when you flipped 20 houses a year, you’ve got all these systems and people and processes in place. When you have one vacation rental, you don’t have time to figure out all the automation and all the systems and the virtual assistants and whatever you need to do to run your business because you just have one.

David: It’s exactly right. So vacation rentals are going to increase your bottom end, how much money you’re going to have to be making. Or maybe I should say your top end. But they’re going to also increase the amount of work that you do. When that workload gets to a certain point, you’re going to want to leverage it off. You need enough income coming in to justify bringing somebody else in, which usually means you need more than one property to have somebody that manages it for you. So you got to find that sweet spot where you know, if I have eight of these things, I can pay an assistant to manage it for me and now I’m making passive income theoretically. But numbers one through seven, you’re going to be doing some work on those as you’re building it up. So that’s why this isn’t a good idea to just do like as a one off most of the time.

David: Now, if you like doing the work, then that’s fine, right, if that’s something that you are doing. But that is not Brandon and I. We do not like doing the work. That’s probably why we don’t do a lot of these short term rentals. The other thing I want to caution people on is you don’t know if the laws are going to change, you don’t know if the market’s going to shift. So, when you do this, make sure that you can afford that property if the increased revenue you make from short term rentals goes down. Now, you may be able to rent it out traditionally, and maybe you don’t cash though, but you have enough money coming in that you’re okay, you can survive that. But if you know that’s not you, you don’t have a lot of money, you don’t have additional income, maybe you don’t want to buy it if it won’t support itself with the traditional rental.

Brandon: Yeah. Yeah, that’s a great point. That kind of the exit strategy thing, having multiple exit strategies if you needed it. Yeah, because that’s my biggest worry. A lot of people today and with the vacation rental thing, they’re buying properties, and the only way that makes sense is if the laws don’t change and if the vacation rental, they’re always allowed, and that the economy doesn’t change. But with every industry, things are hot for a while, and then corporate gets into it. It levels out. The playing field always levels out over enough time. So I think that’ll eventually happen. I mean, we’ve already seen it happening, right? Rates have dropped a little bit, I think a lot on vacation rentals because there’s just so much of it.

Brandon: I feel like back in the day, you couldn’t get a short term rental, like $100 to $150 a night in some areas. Now you can get $30 a night, and you can rent the house in some areas. Just supply and demand. The more people get into it. So again, make sure that it works outside of that. But here’s a way around it that I think is a phenomenal strategy. I’ve not personally done it at all, but I know some friends of mine including J Martin have done it, and that’s that Airbnb arbitrage. There’s a lot of names for it, but that’s what I call it. The idea is this. Let’s just say, David, let’s say I end up owning this condo that I’m flipping. Let’s say the market maybe drops. So I just decide I’m going to rent it out traditionally.

Brandon: I could only get for this condo downtown Kihea, Maui, I could probably get two grand a month, maybe 2,500 as a traditional rental. I could basically break even if I own that as a rental property. But let’s say I want it to. I just said, “Hey, that’s okay with me.” So let’s say two grand a month is what I’m getting for my rental just for easy math. David here comes to me and says, “Hey, Brandon, I am an Airbnb or vacation rental specialist. What I do is I rent properties from landlords like you, and then I turn around and re rent them out on Airbnb, and I do all the work and so you don’t hassle it. In fact, you’re only making two grand a month. I’ll actually rent it from you for 2,500 a month. So not only are you making more money, but you’ve got somebody who’s a professional taking care of your property. It’s getting cleaned all the time. If anything goes wrong, I’ll take care of it. You have no risk whatsoever, and you’re making more money.”

Brandon: Now, David then is paying $2,500 to me, but he goes and does all the work of renting it out on Airbnb or HomeAway or any of those sites. Now, David’s renting it out, let’s say, for seven grand a month. So David gets to keep the difference. That’s what we call arbitrage, Airbnb arbitrage. Now, the danger is, of course, you don’t want to lie to your landlord. I never recommend that saying, “Oh, I’m going to rent it traditionally,” and then you go and sneak around the landlord’s back and go and put it on Airbnb. I don’t advise that ever. Because the landlord will find out, and then you’ll get in trouble, and you get evicted from your own rental. You got to make sure that zone appropriately. In Hawaii, there’s very little that zone vacation rental because they don’t like vacation rentals. But if you go and target those condo areas or those house areas that are zoned, Airbnb, arbitrager is a fantastic model right now.

David: Yeah, that’s a really good way. If it changes and you can’t do that, well, what other options do you have? Okay, I’ll manage it myself. Oh, that doesn’t work. Okay. I’ll rent it out traditionally. What if you get five or six years of making good money before the laws change and you can’t do it. Well, maybe you made 30, 40, 50 grand, which isn’t anything to shake a stick at. By then, rents have gone up so much that you are cash flowing with the traditional method.

Brandon: Yep. Yeah. Worst case, you don’t own the property. You can just end the lease. All right. Well, thanks. Thanks, landlord. It was great, and you’ll be done.

David: Exactly right. So, even if it doesn’t work out perfectly, that’s okay as long as you have options. That’s really the theme that Brandon and I are getting at here is the more options you have, the less likely you are to lose money.

Brandon: Yeah, there we go. So short term rentals or vacation rentals is a great strategy. Let’s go on to number five, wholesaling.

David: Wholesaling.

Brandon: David, what is wholesaling?

David: Wholesaling, to sum up very distinctly, would be putting a property under a contract and selling that contract to somebody else, not selling the title to the property. So you have a house, it’s worth the 150 grand, and you agree to sell it to me for 100 grand. I go to someone else and I say, “You can buy it for 110.” I never owned the property, I never took title, I don’t pay the closing cost. I sell the right to buy it for 100 grand to you, and you get to be $10,000 to closing to compensate me for that. It’s a way that you can get in and out of deals without a lot of exposure, without a lot of capital and without as much risk. You’re just still going to have some legal risk if you do it wrong. That’s one thing to keep in mind.

David: But there’s less risk from the business sense of wholesaling. There’s a lot of people doing really, really good. If you have a skill set for negotiating and you’re really good at networking and talking to people and finding deals, but you don’t want to deal with the rehab, you don’t want to deal with finding money to buy a house, you don’t want to be a landlord, you can make a really profitable business doing this.

Brandon: Yeah. Yeah. Wholesaling is interesting. It is very risky in that if you do it wrong, you could be violating a law. So the law that you might hear people say wholesaling is illegal. In some states, they’re very a lot more strict than others. I never advise ever doing anything that’s illegal. So, if it might be illegal, don’t do it or do it the right way. So here’s what we’re talking about. It’s practicing real estate without a license. That’s the key. I looked up in Washington once, like what does it mean to practice real estate without a license? IT gave a list of a bunch of things, but it basically means you’re doing negotiating, you’re marketing, you’re basically doing all the work that a real estate agent is going to do, except for you have no oversight, you have no principles, you just go do it. Therefore, we have laws against that in the US.

Brandon: So you have a couple options. I mean again, we’re not lawyers or attorneys or CPAs, so make sure you guys get proper legal advice on how to do this in your area. But a couple options that I’ve seen that people do is one, they get the real estate license. Now, you’re not practicing real estate without a license. Now, there are questions there, like with fiduciary responsibility and stuff, but that’s a separate issue that you can deal with at that point. So anyway, get your license or just buy the property and then go and resell the property again. What we call as double closing or whatever. Because then you’re not marketing the property you don’t own. You literally just buy a property, which you don’t need a license to buy a property, and then you’re selling your property, you don’t need a license to sell your property. So, as long as you’re-

David: Yeah. But you set it all up beforehand. So you set up that the person’s going to buy it from you for whatever price they have. You close on it, you take title, then you sell title to the property instead of the contract. Very good point.

Brandon: Yeah. Yeah. So there’s a way to do that. Now, there are some lawyers would say, “Well, that’s violating the intent of the law, not the letter of the law, therefore, you might get in trouble there, too. So don’t do that way. Find a way to do it if you want to do it.” It’s like that Jim Rohn quote. If you really want to do something, you’ll find a way. If not, you’ll find an excuse. So talk to a lawyer, figure it out, what’s going to make it work in your market.

David: Let me jump with that. For those that might hear Brandon say that and say, “Oh, that sounds really good.” The thing is, most deals that you get as a wholesaler come from a seller who’s in distress, okay? Picture a person falling off a cliff, and you’re reaching your hand down to say, “Hey, I will catch you.” But the person who’s worried that they’re going to completely fall off a cliff, go into bankruptcy, lose a property, they don’t care if you’re offering a hand, if you’re offering a strap. If you’re saying, “Well, I’ll give you three fingers, but not all five.” Whatever you got to do legally is still better for them than what’s coming. So, if you understand the law, you can set it up to where it’s not illegal, not immoral, and still a win-win for both you and the person. Don’t think negatively like, “Well, this is too hard. If I can’t do it this way, then I can’t do it at all.” Because most sellers won’t care. They just don’t want to fall.

Brandon: Yep. Yeah. That’s exactly it. So find a way to do it. If you really want to be a wholesaler, find a way to do it right, get the right consultant, like the right attorney, talk about it. Again, it works today because flipping works, and most likely, you’re going to be selling your property to either a BRRRR investor or a flipper. Those are the two people that typically most wholesalers are selling to. It’s either a BRRRR investor or flipper. So go out there and again, find a good deal. All of these things really come down. You have to find a good deal. You have to be able to identify good deals. So, if you need help with that, David and I both are teaching webinars. I’ve been doing it for four years. Now, David’s just starting on BiggerPockets where we help people learn how to run the numbers and deals. You can sign up anytime, biggerpockets.com/webinar. So wholesaling. Moving on. Number six. We talked about it?

David: Yes, number six.

Brandon: All right. The last thing that’s working in today’s market, and it’s getting more and more competitive, but that is syndication. Typically, syndication means you’re buying like an apartment complex or my case, I’m syndicating mobile home parks. So syndication is basically where you raise money from what we call limited partners, so people who have money, but want to just be passive. So you can put money into a syndication. Then the syndication, we call them general partners. The general partners are the ones that are doing all the work. So, for example, on my syndications or my fund, it’s very similar, but I am the general partner along with my partners, guys like Ryan Murdock and Brian Murray and Mike Williams at Walker Medal. We are the GP. The general partners. We do all of the work. The limited partners do nothing, but they write a check or wire money in.

Brandon: So the beauty of syndication is you can take down some pretty large investment properties, like huge apartment complexes or whatever, you can do that. You could even syndicate out single family house if you wanted to or a flip, it’s just a little more expensive. So people don’t usually do it, but it’s possible. But the idea is you can take down big properties for really no money out of pocket. It’s working in today’s market because rents are going up. Rents are going up, there are still a lot of dumpy properties out there, and you’d be fixed up. So what a typical syndicator will do is buy let’s say an apartment complex that is $300 under rent, like under market rent. They’ll buy it using a syndication, raise rents, manage better, cut expenses, raise income, remodel of units, whatever they got to do. Then everyone gets a good return. Then maybe three, four, five, 10 years later, they pay everyone back they sell the property. It’s almost like a flip, but it’s over a five to 10 year period. Is that a good way of explaining syndication?

David: Yeah, that’s really good. The reason that it works is it allows, because the deal is so big, you can chop it up into really small pieces that allow everyone to specialize in what they are good at. So imagine like a sniper in the army, and he’s really good at taking out the enemy. But you don’t want your sniper to be running around looking for bullets and finding the gun and finding the right person and making sure that they have water and food to eat. You really want them to just be focused on what they do, which is being a sniper. That would be like the general partner. They find the deal, they take the deal down, and they had people in place that can manage it and make it worth more money. That’s exactly what you want out of the person who’s the general partner.

David: Now, the limited partners are people who come in and supply all the things that general partner would need. “Hey, I got a bunch of bullets for you. Don’t worry, you don’t have to get your own. You can stay looking down the scope, and I’ll provide the bullets. Hey, I’m going to make some shade for you here so you don’t get too hot. Hey, here’s some food for when you’re hungry and you need to eat.” It allows everybody to focus on the part they’re really good at. When you get to the point that you’ve got a lot of money and you don’t want to have to learn something new, it’s really nice to just provide the bullets to let somebody else go make money with it, and then come back and give you your portion.

Brandon: Yeah. So anyway, so syndication, super powerful if you can make it work. It’s a complex more complicated process. Again, I just did my very first one. I just closed my first fund. We just started a second one, and then it gets more complicated because you got to learn like, can you work with accredited investors or not accredited investors. So I had to kind of learn and navigate that. So it’s just been a huge learning process, but it’s a phenomenal tool in today’s market to be able to, I guess, grow wealth very rapidly by taking a small bit of a much larger deal. Anything else you want to add on that?

David: Yeah, why don’t we talk a little bit about things people should be aware of when investing in syndication so they don’t lose money?

Brandon: Good call. Yeah. So the most important thing I think is a team. Because here’s the deal, here’s what I would say. I’ve had people come to me and they’re like, “Brandon, can you look?” Like friends of mine. “Hey, I’m looking at doing this syndication. Can you look at these numbers and tell me if you think this is a good deal or not.” What I always say is like, are you going to go knock on Ms. Betty Johnson’s door at 50617 C, apartment 9. Are you going to go knock on her door and be like, “Hey, Betty, it says here in the documents that your rent is 875, is that true?” Of course, you’re not going to do that. In other words, you’re completely trusting the person to have not lied about what the rent is. You have no idea. So it’s like the engine analogy you use about, you open up your car engine, you’re like, “Oh it looks like I’ve got a problem in here. Just take it to a car.” Because we don’t know what we’re doing when we fix a car. It’s the same thing.

David: Yeah, you don’t. But the mechanic is what matters, right?

Brandon: Yes, the mechanic. Yep.

David: The mechanic could lie to me. That’s our biggest fear when you don’t understand cars. So, when you find a trustworthy mechanic, that’s where you grab ahold of that person and never let go. That’s who your operator is. I think you said that perfectly, Brandon. This isn’t just you and I, this is every successful wealthy person we know. The higher that you get into people that are successful, the more that they start to say, “I trust the operator more than I trust the deal.” I don’t look as much at the numbers, I look at them briefly. But like you said, they can fudge numbers. Anybody can make numbers to show whatever they want them to say. I trust the integrity of the person doing the deal. So yes, Brandon, you’re 100% right. That’s the first thing people should look at.

Brandon: Yeah. So look at the team. Look at the people in there. Do they have the balance sheet? Do they have the experience? Do they kind of know what they’re doing? I’m not saying you shouldn’t necessarily work because its first syndication. But here’s an example. So I just started my very first syndication. Yes, I’m a trustworthy guy. I like to think I’m hearing a podcast. But let’s be honest, you guys listen to me on a podcast every week, does that mean you should trust me? Probably not just because I talk in a podcast. However, can you trust my actions? Can you look at previous deals? Probably. But even so, I brought in a guy named Brian Murray to be our asset manager. Brian Murray wrote a book, Crushing it and Commercial Real Estate and Apartments, or something like that. Probably just butcher the name.

Brandon: Anyway, Brian Murray owns a ton of real estate, like thousands of rental units already. He’s already done syndications. He’s already done, so I brought him in because now I attach my credibility to Brian. So it makes me now much more credible. So, again, it doesn’t mean that if you’re brand new, you can’t go and do a syndication, but you may have to attach yourself to somebody with more credibility or with more experience so that you can borrow their experience and credibility as well. So again, when you’re looking into a thing, look for that exist.

David: Exactly right. So this is like Brandon said, okay, you guys can trust me. I’m trustworthy, I’m opening a mechanic shop. We’re not going to be wrong. You say, “Well, that may be true,” but you’ve never actually worked on a car. So I may trust you, but I don’t know if I trust your experience, right? That’s okay. I got this guy, he used to work for NASCAR, he’s worked on cars the last 20 years. He’s written books on it. He teaches other people how to work on cars. He’s my mechanic. At that point, I didn’t really have to ask a whole lot of questions. That’s exactly what you did, and that’s what you want to look for in a syndication is track record. It doesn’t have to be the main person’s track record, but somebody on that team should have experienced, should have done this before, and should know what they’re doing.

Brandon: Yeah, that’s so true. Yeah. So look for that when you’re going to invest in the teams. Look at the team. Also, I mean, look at what they’re doing. Does it align with what you want? I mean, like when we did our fund, we specifically said we do not want to be controlled by a promise to investors. So I know a lot of syndications say, “We want to be in and out in four years.” But I said, “You know what, I don’t care. I want to cashflow fund because I care about the cashflow.” So, if it takes six years to sell and get the money back or nine years, so be it. We’re going to do whatever the market is best. So you need to look in align. Does this align with what your goals are? If you need quick in and out, don’t go into a fun like mine where we might be in for 10 years. But if you want to be in for 10 years, don’t go with a guy who’s going to get your money back in two years.

Brandon: So make sure that the goal of the syndication or of the fund aligns with your goals, what you want to accomplish. Same with like there’s cashflow. There’s funds and syndications that work more for cashflow, there’s ones that work more for appreciation. I’m in a couple of deals right now on syndication deals where we get very little cashflow. But it is mostly based on that apartment complex getting sold for way higher later. It’s almost like a flip. So the cashflow, I mean, we’re not losing money, but there’s not a lot of cashflow now. I knew that going into it because that’s the type of investment that it was. So just make sure you understand what you’re getting into when you’re going to go into a syndication. We actually have a book on that. I won’t talk too much about it now, but we have a book coming out soon at BiggerPockets on that topic of how do you evaluate other people’s syndications. So check it out. You heard it here first. It’s coming out sometime in the next year.

David: Beautiful. Well said. Okay. Let’s move on to the fun stuff. Let’s get into the accelerants.

Brandon: Accelerants. All right. So these are things that can help improve any of those six strategies that make these things happen. It’s like pouring fuel on a fire.

Brandon: True story. One time, David, I don’t know if I ever tell you the story, so I had a fire at my house. I guess it was in high school, and I had this bonfire we did all the time. It went out. So I was like, “Oh, a bomber went out.” So of course what I do, I got the can of gasoline, and I just started pouring it all over the fire that had gone out. Of course, we all know that the fire didn’t really go out, there were coals down there. It literally just blew up huge in front of me. Then I looked down, and I’m holding this gas tank that is burning, like the actual gas canisters is just on fire. I was like, “Aaah.” I just, as hard as I could, chuck it into the woods, which is probably also not a good idea. Luckily, it went out in the air. But see what I did is I was pouring accelerant on a fire. That’s exactly what we’re going to talk about here today. Do you like that? That’s a good analogy, right?

David: Oh my God. That doesn’t describe how you live your life, man. I don’t know that does. Praise the Lord that you didn’t just start a forest fire.

Brandon: It just burned down the whole neighborhood. All right, guys, it was an accelerant. All right. So we’re going to pour some fire on this right now to make your investments produce more revenue, higher returns, and have a lot more fun doing it. So, first one, what do you got, David?

David: OPM. Learn those three words. This is other people’s money. Now, it doesn’t have to be a friend or family member, though it can be. There’s a lots of OPM. You’ve got seller financing. You’ve got partnerships with other people. You’ve got private money. You’ve got hard money. You can do the syndication we talked about. There’s lines of credit. The point is when you get really good at doing deals, what will naturally limit you will be, oh, this is good. There’s only so much gas. It doesn’t matter how good you are building a fire, if you run out of gasoline, you can only go so far. So what if other people bring your gasoline?

Brandon: Yeah. Other people are bringing gas tanks over to your house so you can pour it on the fire.

David: That’s exactly right. You just focus on keeping that fire going or building new fires, and you let other people come and put the fuel in them. That’s what you want to do. Now, it’s dangerous if you start having people bring you gas before you know how to build a fire. They’re going to lose their gasoline, and you’re not going to make an income from it. So you do want to have an idea of what you’re doing before you really ramp this up. But once you’ve got an idea how to make money in real estate, having other people bring your gas can really ramp things up.

Brandon: Yeah. Well, so true story. So remember all I said, we’re doing a couple of flips right now. One we’re going to make probably 60K if it goes well. One we’re going to make over right around 100K. So I’m doing that with a partner. So I brought in a guy, I’ve mentioned this on the show before, but a guy named Greg. So Greg came to me, and we decide to work together. Greg is doing these deals for no money down, other people’s money. Whose money is he using? He’s using a little bit of my money and the hard money lenders money. So Greg is the one that’s hustling. He’s out there. I mean, every day, he’s at the auctions, he’s out there chucking contract, talking to contractors. He’s out there doing all the work because what Greg has his hustle in time. What I don’t have is time right now. I’m just too busy with a million things like trying to buy 1300 mobile home units.

Brandon: So it worked out perfect for me. So, in other words, when people say you can’t do deals for no money down, look at Greg, he’s going to make like… He’s getting 50% of the profits. If we make 30 on that one and 50 on the other, he’ll make 30 and 50, that’s 80 grand in like three months off of no money down. Yeah, we wholesaled the deal actually last week for like 16K. He made eight on that one. No money down. So again, don’t believe that you can’t do it. It can pour a lot of gasoline on your fire. So learn the art of that. In fact, it would be really great if somebody wrote a book on how to invest in real estate with no one low money down. That’d be awesome. Someday.

David: Yeah. But I mean, if only life worked out that way.

Brandon: All right. Biggerpockets.com/nomoney. Let’s go to the second one here. The idea of value add. You added that one to our list David, what do you mean by value add and why is that an accelerant?

David: Oh by the way, I just passed my real estate brokers license. So now I’m no longer just an agent. I’m actually a broker.

Brandon: Look at you fancy.

David: One of the fancy things they teach us is this concept of highest and best use and as the way of looking at a property and saying, what is the very best way that this could be used to maximize its value, which is usually involving some kind of money. So it’s a good way to train your brain to look at situations. A coach does this with the player. This person’s really talented, how do I maximize the talent they have or what our team can do? A business owner or a manager does this with an employee. A parent does with their kids, if they’re good parents. With property, we want to look at, what can I do to add value to a property.

David: Now, if you’re flipping houses, you want to make it worth as much as it can be. If you’re renting properties, you probably want to make it a combination of making it worth more with increasing the rent. If it’s a multifamily property, it’s what can I do to increase my NOI? But the principle remains the same. So what I like to do anytime I’m looking at a property as say, “What would be the highest and best use of this deal?” So, in the flip example I gave earlier, we’re going to look at the end when it’s fixed up, would it be better to sell it and get this much money and have this much of a return on our money or would it be better to keep it, rent it out and split the cash flow between me and my partner? It’s very simple. We just look at both options, and we see the one that makes the most sense.

David: But if we add a ton of value on both ends, we have options. Again, options are what are actually going to build you well. So buying properties under market value and fixing them up through the rehab forces equity, forces a property to be worth more. Buying properties that are like a split level and taking the basement and finishing it so you can rent it out. It forces value, it creates value where there wasn’t anything there. Raising the rents when you buy a multifamily property. It forces the value to go up reducing the expenses. Same idea. You always want to be looking at, okay, I got a great deal. I’m under market value, I’m going to cash flow, I’m going to buy it. That’s good. Don’t stop there. What can I do to put icing on the cake? What can I do to make it even better for myself? What can I do to give myself more options? That’s what we mean by value add.

Brandon: That’s good. Yeah, that’s good. One thing we’re doing for value add right now in my business maybe, besides flip, flipping is kind of a value add, but one thing we’re doing with the mobile home park thing is we’re deliberately looking for mobile home parks that have vacancy like between 10 and 30% vacant. Why? Because then we can force equity, force value by bringing in homes. So we bring in trailers, rent them out or sell them, and now we just force equity. So that’s one thing I like about four is equity in today’s market is because you don’t have to rely on the market going up. You rely on your own ability to make the value of the property go up. So yeah, value add, very, very powerful in today’s world.

David: That’s one of the things that I help my clients with. They come to me and they say, “Hey, David, I want a house hacker. I want to buy a rental property.” It’s hard right now. There’s not a lot of them. So that’s what we do is we sit down and say, “Hey, we’re going to find you properties that have an upstairs unit and a downstairs unit, and we can easily split them in half and rent them out as two separate units. Very similar to what you did when you bought your Hawaii property. That’s kind of the way you got to look at it. It’s not going to be easy. You’re not fishing in a barrel right now, but that doesn’t mean that you can’t catch fish. So look for ways that you can add value to make a deal in today’s market. Very good point.

Brandon: Speaking of fish, some people catch the fish, David, some people clean the fish to use your analogy. What we’re talking about is some people are good at certain things, and so you really got to leverage other people, which is our third accelerant today is leveraging others.

David: What a transition?

Brandon: Wasn’t that amazing?

David: Expertly done, Brandon.

Brandon: Thank you.

David: This is why you’re the host.

Brandon: It’s like I’ve a podcast before. What do you mean by leveraging others?

David: Yeah. So leveraging is a a cool word, but it basically means using other people’s stuff for your own benefit, right? That’s where you want to be in life. Theoretically, everything Brandon I have talked about is a business if you look at it like a business. There is a place you can get to where you’re doing nothing, you just put all the pieces in place that needed to be put there, and they’re doing all the jobs that are involved in your business. Then you hire someone else to manage those people. So, if a piece falls out, that person has to go find it, right? There’s a way that you can insulate yourself from having to do a lot of work. Now, borrowing other people’s money is a form of leverage. Using a construction crew to rehab your property as a form of leverage. Financing it with the bank, using a property manager. These are all forms of leverage which we accept all the time.

Brandon: Don’t think of it as a bad thing either, right? I’m leveraging Greg, my partner on the flipping because he’s got all this time and the hustle. I’m using Greg, he’s using me because I have the money and the connections and the resources to pull off the financing and to kind of organize this. So we’re using each other.

David: That’s exactly right.

Brandon: It’s not a bad thing, it’s a great thing.

David: No. If you’re leveraging a rehab crew, you’re putting food on somebody else’s table for their family, right? You’re literally a lead for that person. They’re looking for you to get business from you. They want to be leveraged by you. As a real estate agent, you’re leveraging needs to do a lot of the work for you and represent you on a deal. I have knowledge and experience that you don’t have. I’m using all of those things to help you accomplish what you want. That’s what I want. I’m spending all my time looking for people like you saying, “Please, leverage me.” Well, I do the same thing with my business. The four people that I leverage the most are the people I talked about in long distance real estate investing, your core for, your lender, your property manager, your contractor, and your deal finder. You should be using those people for as much as you possibly can.

David: You and I get asked questions all the time, “Should I open an LLC or should I buy it in my own name?” That’s really something that should be leveraged onto a CPA. How do I find a deal? That’s something that you should leverage onto a deal finder. What’s something else? How do I know if this market’s a good market or not? You should be asking your property manager. You should be asking other investors. You should be asking people that know it. They’re all there to help you build wealth, and that’s how they make money themselves. So use them to do a lot of the work that most of us try to do ourselves.

Brandon: Very good. Very good.

David: Who are some of the people you leverage the most in your business?

Brandon: I mean, there’s obviously Ryan Murdoch who was on the show recently. I think that show came out already when this one airs. Ryan Murdoch, he helps run a lot of my business. Again, Brian Murray, like I said, Walker Meadows and Mike Williams. That’s kind of my team. Then Greg, who’s helping doing the flipping side of things. So everyone has a role of something that they’re really good at. But also things like, I got a property manager on different properties. My mother-in-law helps manage some properties of ours. I mean, there’s people all over. I mean, you.

David: Let me ask you. Oh, you leverage me?

Brandon: I leverage you to have a good show. Otherwise, this show would be horrible.

David: I like that. Very well done. Let me ask you two questions about your team. Could you do what you’re doing and make money you’re making without those people?

Brandon: Yeah. Not at all. No.

David: Okay. Now, a lot of people stop and say you’re taking advantage of them. Now, let me ask the next question. Could those people make the money they’re making and do what they’re doing without you?

Brandon: I don’t think so. Brian could.

David: Yeah. But you’re providing gasoline for Brian, right?

Brandon: Yes. Yeah.

David: He could do more with you, right?

Brandon: Yeah. Because my skill has being able to raise money. So I can talk about money, and I can raise money from accredited investors, where Brian, his skill is like managing and building his machine assistant.

David: Yeah. Maybe Brian is the guy that he can help build the fire in that way, and you’re actually bringing gasoline to him. In other situations, you build the fire and people bring the gasoline to you. It’s all beautiful when we’re all doing our part, and we’re all making it work. So don’t look at leverage like it’s a bad thing. That’s the point I’m trying to make. In the best relationships, you focus on what you’re good at, and you let them focus on what they’re good at, and you have kind of a harmony.

Brandon: All right. Next accelerant. Let’s talk about the funnel real quick. We talk about this a lot, so I don’t have to a lot of time in this. But I always say, everything’s a funnel. So, especially in your business, are you tracking how many leads you’re getting in and how are you getting them? Are you checking how many offers you’re making? Are you checking how many deals you’re analyzing? If not, start doing that. Start tracking what you’re doing. I mean, things you track tends to get better. Here’s the point I’m trying to make. Anytime a newbie comes me and says, “I can’t find any deals,” I always ask them the same three questions, “How many offers did you make last week? How many deals did you analyze, and then how many leads came across your desk?”

Brandon: The answer, 100% of the time, one of those, I don’t have any. One of those three is I don’t have any. Well, it’s really that simple. You didn’t make any offers? Well, why not? Well, I didn’t have any properties to make an offer on. Okay. Well, why not? Did you analyze them? Well, no, I didn’t really analyze any deals. Look at why not? Well, I didn’t have any leads. Okay. So we know where the problems that it’s leads. Why not? What are you going to do for leads this week? Just know your funnel, work your funnel, and that will diagnose where your problem is, so you can go and fix it.

David: There you go. That’s beautiful. If it gets to the point where you realize where you have to fix your problem and you’re not fixing it, you have a mindset problem. Shift your focus off of the, what word would we use for that, the logistics of it and get it into your mindset to figure out why you’re not taking action.

Brandon: Yeah. Yeah. So true. Yeah. The mindset thing is important. Because others know what we need to do in that. Josh Darken, he is a keynote speech at the BP con this year was called, you know what you need to do or you know what to do. His point was basically like we all know deep down what it is we should probably should be doing. We know we need to do direct mail marketing or we know we need to go to that local meetup. We just often times don’t do it. We don’t trust ourselves or we listen to other people’s advice. We know what we do to do. So go out there and like do it, and if you’re not doing it, it’s a mindset thing. Get yourself a performance coach or something like someone you can talk with or a therapist or a mastermind group or a journal and start taking some intentional planning around what those steps are and why you’re not accomplishing them.

David: Yeah. This is why Brandon and I talk about it a lot because people come to us and they say, “Hey, I’m stuck.” I have people reach out to me all the time and say, “David, I have this problem. I’m stuck. What do I do?” It’s usually not a logistical answer. It’s not, “Oh, you need to call this person or you need to change this about your rehab.” It’s almost always a mindset thing. So don’t take that for granted. That’s why we bring people on the show to talk about mindset or authors of books to help with that fact because that’s such a huge component of being successful.

Brandon: Yeah, it’s so true. All right. Next, what do you want to talk about? Another accelerant.

David: Let’s get into partnerships.

Brandon: All right, I like it. That’s a good one.

David: So a partner is a form of leverage. We kind of already talked about this, but I want to dive specifically into three things that you can look for in a partner or three different ways to partner. The first would be a personality. You want somebody who’s an opposite personality of you. The next would be a skillset. You want someone who has a complementary skillset to yours. You don’t necessarily want the same thing. The third would be resources, somebody who has resources that are different than yours. Brandon, can you pick one of those and comment on how you’ve that work in either your life or people you know?

Brandon: Well, we were joking about before this call where Ryan is like… If you’re looking at disc profile, there’s D-I-S-C, and I typically means you want to be liked, you want people to like, you’re super personable. So I’m a very high I. Ryan is like a negative I. He’s like the exact opposite. So yesterday, we had like this guy over at my house looking at my air conditioning unit, which Ryan was hanging around with me. We were talking to the air conditioning guy. I’m like, “The thing is not working right. It’s not cooling my house the way it’s supposed to.” So I just like, “Okay. Well, yeah. I mean, I’m not really sure why it’s doing it.” He’s just like, “You guys told us to install the system. It’s not working. Why not?” He’s very direct because he doesn’t have the high disorder that I have, right?

Brandon: So we have a opposite personality in that way, and it works really, really well because sometimes you need to be a nice guy, and you need to have everyone like you so you can do things like raise money or do a podcast or whatever. But other times, you need to yell at a contractor. So, by having people around you in a partnership that have that complimentary skillset and personalities, it’s helped me tremendously.

David: I think you and I probably have a similar thing going on, right? You’ve had times where you’re dealing with a contractor, and you’re like, “This guy’s frustrating. Give me the phone.” Right?

Brandon: So you’re kind of like Ryan. You say, “I don’t care if people like me. I going to get good.”

David: Very much. But that doesn’t always work good, right? There’s times I need you to look at an email I’m going to send and be like, “Can you reword this for me so it doesn’t blast them in the face. I think it’s going to.” In that way, we really help each other. In the podcasts, I hear all the time, you and I have a really good chemistry. We played different roles. You play a function in the process of keeping it moving smoothly, transitioning very easily from one thing to the next, keeping it lighthearted, and I do a little bit more where I can kind of come in like a jackhammer and get to the bottom and pull out a point.

David: Yes, it makes the show way better. This is an example of what you want in a partnership. We’re saying this because we don’t want people to just go find a partner that they like and say, “This is my friend. We’re going to do it together.” That’s an emotional insecurity that you’re trying to fix, and notice that was not one of the three things that we said you should look for in a partner.

Brandon: Yeah. Agreed.

David: So number two would be skillsets. You want a person with a different skillset than you. I think a good example of this would be Brandon and Brian. Like what you were just saying earlier about Brian Murray, he has an analyzer’s brain, he has an operator’s brain. He can manage an asset really well. He’s done it for a long time. He sees potential problems that are going to come up and has a solution for them. This is a guy that can keep a car on the road, he can manage the fine turns that have to happen, and he can keep something under control. You are a blast of nos that makes the car go fast. That’s who Brandon Turner is. If you’re around him, this is exactly what he does.

David: So your role in that relationship is to make the thing go quickly. You’re the accelerate. Brian’s job is to keep it on the rails. This is when you told me he was your partner, it was like a blessing from God because I realized that’s exactly what Brandon needs. Brandon needs a person that can step in and say, “No, we’re not going to do it. We’re going to do what we do with this way, and then you figure out a way to make it happen because that’s what your skill is.” That’s a perfect partnership from a skillset perspective.

Brandon: Yeah, that’s really good. Yeah. The skills I think is vital. That book traction talks about having the integrator and the visionary because there are two different skillsets. Yeah. Like somebody who’s the guy with the vision, with the idea of let’s go here and the ideas and somebody else has to make it work, and the two people are hardly ever the same. So yeah. Two different skillsets Entirely.

David: Beautiful. Okay. The third one would be resources, right? We kind of touched on this earlier when we talked about somebody has the money, someone has the time, someone has the experience, maybe somebody has the deals. A good example of this would be my flip partner, Mario and I. So Mario, he grew up with his dad as a contractor. He knew construction inside and out. He’s really good at looking at a property and figuring out how to make it look perfect and really nice for a cheap amount of money. He has good labor. He has a really tight rehab crew. I am not that guy. I don’t have those resources, and I don’t necessarily want them. I’m really good with numbers, and I’m really good with pushing things through. So I can get the deal, put it under a contract, I negotiate really well. I can know what we’re going to make on it. I can say yes or no depending on how the numbers are going to work. He hates that. He just wants to be out there getting sawdust all over the place, right?

Brandon: That’s awesome. Yeah.

David: So we have a really good mix of resources where I provide something that he can’t find, which is usually the financing and the overall plan. Mario provides a stuff that I’m not always going to have. He’s really good with relationships. He knows people that bring us deals all the time, and then he, he rehabs it. So, when I work with him and I do a deal, even though I’m only getting 50%, it’s so easy. I love it. I’ve never ever complained about a deal that I did with him. I probably never will, which makes me want to do it more. So that’s an example of when you’re picking a partner, find someone who has resources that you don’t have.

Brandon: Yeah, that’s really good. Really good. All right. Well, we got to get this show kind of wrapped up. I got a couple of questions here, not the famous for those because you and I have answered those questions many a times. I want to throw a couple other questions. We’ll go with the sub famous four. David, what is something that you enjoy doing that you never get tired of?

David: I like hanging out with you and having in depth meaningful conversations about stuff that actually matters. So, pretty much every time I leave hanging out with you, I feel lighter, I feel better, and I have a new plan for kind of where I want things to go. I don’t know that there’s ever been a time that I’ve been around you, and I was like, “God, I’m just sick of this dude.” It just never really happens.

Brandon: Well, I enjoy those as well. Thanks. All right. What do you got for me? Random question.

David: Random question. What is something about yourself that you would change if you could and not have to tell anybody about it?

Brandon: Wow. We’re going deep. Wow. What is something about myself I would change? You know, I wish I naturally was motivated and not like set myself up for games to get it all done, if that makes sense. I journal and I have to remind myself to do things like take my wife on a date, and I have to make sure it’s in my calendar to do like family time. I wish I just naturally was good at balancing. But I’m not.

David: Is that why you’re so disciplined about that stuff?

Brandon: Probably because that’s how it’d be nightmare without it.

David: Let me give you some encouragement. I’ve noticed that the things that people teach the best are the things that they struggled with the most to be good at. The people who are naturally talented usually make the worst coaches. So, even though you probably wished that you were better at being naturally motivated, all the rest of us benefit from stuff like the 90 day intention show and everything you teach because that’s tough for you.

Brandon: Well, thanks. Do you want to know another interesting thing? I think it was you and I talking about this, maybe it was me and someone else at the BP con. Do you know the area of my life? I mean this is, this is getting deep and personal here. But the area of my life that my entire life I have struggled more than anything else was self-esteem has been my voice always my entire life. I was made fun of as a kid all the time, I had speech therapy. Isn’t it ironic that the thing that I am most embarrassed by or I struggled with from a self esteem standpoint is the thing that I make the most money from in my life. The most important thing that I do really from a business standpoint and that everything else stems from is my greatest weakness. I mean, there’s…

David: I just thought that about you because when you share the two things you’re insecure about, and you said what was your voice, I remember thinking afterwards like, “How cool is it that that’s what was used to help everybody. Because if you didn’t have a voice, wouldn’t be here, a lot of people wouldn’t be here. So isn’t that a great example of how having the intestinal fortitude to move forward in spite of being insecure or worried can lead to huge blessings in your life?

Brandon: Yeah, I guess. Yeah. Again, this goes to anybody. whatever you’re insecure about, if you hold on that insecurity forever and just say like, “No, this is who I am. I’m insecure, so therefore I’m not going to do that thing or I’m not going to put myself on a limb because of that insecurity,” you never know what could have become of you and how world could use that. So yeah.

David: That is deep. Where did it go?

Brandon: Anyway. All right. David, how has your real estate journey been different than what you imagined?

David: I never thought I would be a salesperson, ever in a million years. I’m probably the worst at sales. The way you’re insecure about your voice, I’m very insecure about my people skills. I was the most shy, conservative, awkward person. If you asked my buddy Kyle Rankie, he got interviewed on the BP money podcast, I was the best man at his wedding. Everybody thought I looked like I worked in the secret service. I don’t know how to make small talk. I was horrible, horrible at it, right? I just wanted to get right to the point with everything, no frills. I think being my friend was like rubbing sandpaper on your face. I honestly think that. The people that are in my life, they would probably tell you the same thing and to have to move into a position where you have to be charismatic and engaging and funny and encouraging and all these skills that I never valued, I didn’t expect I’d ever be helping other people build wealth through being a real estate broker and having a team, and now I have a a mortgage company.

David: That was a big shock. I never thought I’d be a personality that had to teach what I was doing to other people at this scale ever. I’m a very private person. I don’t like to share stuff. I do it because, like you do, we recognize that it’s good for other people, and it’s good for us to step out of that comfort zone. But if you’d have told me 10 years ago you’re going to be the top producing agent in your area, I would’ve probably laughed at you.

Brandon: That’s actually very similar to my story with the speech thing. It’s like the thing that you thought was your biggest limitation. This actually has proven to be like one of your greatest assets. So cool.

David: Thank you. Okay. One more question for you. Let me think about what can we give that would be really, really good. If you could have any gift in the world, if you could be good at any one thing, what would it be?

Brandon: Okay. Is this like where it was if you could have one wish, I’d wish for more wishes. Can I wish for more wishes?

David: Not a wish. It’s going to be a thing.

Brandon: Can I be really good at asking for more things to be good at? There we go. Okay. Question again was what?

David: If you can be really good at anything, what would you pick to be really good at? Playing the guitar, having a six pack, being taller than you are, being shorter than you are, what would you ask for?

Brandon: I would be good at surfing because I’m not good at surfing. But that is a skill I think that would be great to be good at.

David: Is there any studies that have shown that the taller you are, the harder it is to surf?

Brandon: I don’t know.

David: It’s probably got to be a lot trickier too with your center of balance when you’re doing it. I’m thinking of any kind of balancing sport, gymnastics, snowboarding, surfing.

Brandon: For shorter people.

David: Yeah. They’re almost always shorter people that do that better.

Brandon: Well, we’re going to say that’s why I’m not very good. It’s not the fact that I don’t-

David: I think you’re pretty dope. It’s easy to see you when you’re out there, I’ll tell you that. You’re like this super tall and super white tree that just stands out amongst everybody else. If were drowning, it would be easy to find you.

Brandon: Here’s the truth, though, and this is why it’s a difficult question to ask is what skill would or what are going to be good at? It’s because the truth is that all of us can be good at pretty much every skill. I’m not a great surfer because I don’t surf very much. I maybe max once a week. It’s been like three weeks since I’ve been out. If I wanted it to be an amazing surfer, I could be an amazing surfer. I’m sure. The question is like, what would you be good at if you didn’t have to try it would, the answer would be surfing. I would love to be great if I didn’t have to try.

David: That’s a good point. Well, I mean there’s things maybe like having a really good singing voice that you may not ever be able to do.

Brandon: Yeah, maybe.

David: Something like that, being really athletic.

Brandon: I suppose.

David: For most things, if they’re skill-based, yeah, you could do it. But what would you like if you didn’t have? If the skill fairy just touched you on the head, it was like here, you are blessed, what would you pick?

Brandon: Scale ferry. I like it. Speaking of ferries, Rosie yesterday got a package in the mail from her nana, from her grandma and opened it up and it was a fairy costume, and so she’s not taking it off, I don’t think, other than the sleep in the last 24 hours. It’s cute.

David: That’s adorable.

Brandon: Yeah. You’ll love it. You’ll see it next time. So all right. Well, we got to get out of here. So David, anything you want to take us out with, any final piece of advice or anything before we get out of here?

David: Yeah, I think it’s really important to end it with what we started with. Just understanding real estate is never going to be the same all the time. No business is going to be the same all the time. There was a time when emails were a revolutionary concept, and you made a ton of money by sending emails, and it’s getting to the point that nobody wants to see spam emails anymore. Same for social media and everything else. You have to adopt a mindset that’s okay with change that embraces change. Usually, change doesn’t come at a rapid pace, but you got to keep moving. You can’t think, “Well, I just finally learned it. I’m done.”

David: You always have to be looking for new things, and today’s market, it’s really hard to find a contractor. It’s really hard to find a deal. It’s very easy to find money. It’s very easy to find creative ways to do it. There’s a ton of information like Brandon and I out here. It’s better and it’s worse in many ways than it ever was before. 10 years down the road, it will be better and it will be worse in different ways than it ever was before. So look for ways to maximize the benefits, look for ways to minimize the struggles and the hurdles, and you’ll continue to build wealth.

Brandon: That is amazing. Well, Mr. David Green, where can people find out more about you and connect with you at?

David: The best way to get ahold of me is on my Instagram, davidgreen24. If you guys want any advice for like, if you live in the Bay area, especially I put meetups up out here. We just did one the other day. I’d love to be able to meet more people in person, that’s really fun. Email is tough for me to get to. My phone is really tough for me to get to, but I really try hard to reply to everybody on Instagram. How about you Brandon?

Brandon: Yeah, I actually am not very good at responding to Instagram direct messages anymore because I just get too many of them. You can try. But follow me on Instagram if you want to follow my life, and I post a lot of stuff there. If you want to know more about my investment stuff like raising money, the funds, if you’re a accredited investor, opendoorcapitalllc.com. Again, opendoorcapitalllc.com. Let me restate that real quick because we might be changing our URL. So whoever editing this, can you just check with me to find out what the current URL. So ODC, like open-door capital, odcfund.com. Odcfund.com.

Brandon: All right. Well, thank you David Greene for being in this duet with me today. Hopefully people got a lot out of this. If it is, share it with somebody you know, post on your Facebook page, comment below in the comment section of the actual show notes, which is at BiggerPockets show 358. You can check out other links there, and I think even the transcription I think should be there. That’s all I got. So why don’t you take us out of here, David Green?

David: Sounds great. Thank you very much. This is David Green for Brandon, the ghostly white tree surfing on the plane.

Brandon: I knew you were going to do that.

David: Signing off!