Ashley Kehr:
This is Real Estate Rookie episode 144. My name is Ashley Kehr, and I’m here with my co-host Tony Robinson, and today is an episode of the Rookie Reply.

Tony Robinson:
And for those of you that are new to the Real Estate Rookie podcast, Ashley and I are here to give you the inspiration, the motivation, the confidence you need to break into the world of real estate investing. Find financial freedom, really just build the life that you want using real estate as the vehicle. So what do we got going on today, Ash?

Ashley Kehr:
So today, Tony, I really want to talk about short-term rentals.

Tony Robinson:
Ooh, I might know a thing or two about that.

Ashley Kehr:
So my partner and I have two cabins under contract that we are going to turn into short-term rentals. So I thought it was timely to go over what are some basics that investors need to know when they’re getting into the short-term rental space. So I have one Airbnb now that I would consider it more of a hobby and I’d like to take my short-term rental business and turn it more into a business. So the one that I have, it’s actually an arbitrage where I rent the apartment, furnished it, and now it is listed as a short-term rental on Airbnb. It’s gone smoothly. It’s gone great. I’ve had it for two years now, and I’m ready to take on some more properties. So Tony, what’s your advice?

Tony Robinson:
Yeah, let’s dive into it. Now, before I get into all the tips, this episode airs January 1st, I think. It’s right around the new year, we have our Short-Term Rental Bootcamp that launches on January 24th. So if you guys want to kind of do a deep dive on the acquisition process of short-term rentals and make sure you guys sign up for that. Do you have the URL, Ashley? It’s biggerpockets.com/bootcamp.

Ashley Kehr:
Bootcamp?

Tony Robinson:
There you go.

Ashley Kehr:
Maybe, plural.

Tony Robinson:
Yeah. I’m sure if you guys Google it, it’ll pop up. Ash, you got a bootcamp coming up to you. Why don’t you give a quick plug for yours?

Ashley Kehr:
Yeah, so I am doing How to Get Your First or Next Deal Bootcamp. So if you are a new investor and you just want everything put into order for you as to the steps you can take, we all know real estate investing information is free on the internet, free on podcasts everywhere. But what this bootcamp does is it makes it concise for you and packages it all together. And you can follow the steps to get your first property, or if you need help getting your second or third, this bootcamp is great for you. This is definitely a beginner camp. If you are an experienced investor, this is not something for you. We did have one person sign up to a previous one that a couple weeks in was severely disappointed. And unfortunately I had to tell them, “I’m so sorry, but this is a beginner bootcamp.” So I just want to makes that as clear as possible, but got him his money back and everything, so it worked out good.

Tony Robinson:
And Now he’s good to go. That was a really good explanation of what the bootcamp is. So listeners just replay what Ashley said, but replace… throw the word short-term rental in her plug and then you get the idea for mine too. All right. So let’s talk short-term rental. So I got six tips for new Airbnb hosts that I’ll run through and they’re split up between a few different categories. So I’ll talk about getting your listing set up, your revenue and pricing strategies. And then last is like your actual guest communication. So as I’m going through, Ash, just stop me when you got a question and we can have some conversation and go back and forth on it. So tip number one of six is to study the competition. If you are a new host, it can seem insurmountably overwhelming to think about all the things you have to do to get a listing live on sites like Airbnb.
Not only do you have to find the property, analyze the property, go through the closing process, maybe furnish the place. You also have to digitally gets your listing set up, which is creating the listing. Getting the photos done, putting all the little pieces of the listing, your check out time, your check in time, your amenities. So there’s a lot that goes into getting a listing up and running. And instead of starting from a blank slate, my recommendation is to always study the competition to see what is popular in your market. What are the best of the best listings already doing? And how can you take the spirit of what they’re doing, and implement it into your own listing? And you can do this both for the physical setup of your short-term rental, and for the digital setup, the digital experience of your short-term rental.
So I’ll give you an example of both. On the digital listing side, one of the things you have to make a decision on is what time your guests check out. Check out times vary by market. I’ve seen them as early as like 9:00 AM for some listings, as late as like 12 or 1:00 PM for other listings, but it’s going to vary by the market by the size of the property. When we took our first listing live in the Smoky Mountains, we had our check out time set to 11:00 AM. Why 11:00 AM? I don’t even know. We just kind of guessed, we thought it was the right thing to do. Our cleaners let us know that it was putting kind of a time strain on them with the 11:00 AM checkout, because if they have multiple turns throughout the day, it was just hard for them to kind of get through all their properties.
So they said, “Hey, can you move it to 10:00 AM?” A lot of our other owners have their check out time to 10:00 AM. So we did some additional digging. We looked at all of the other comparable properties near ours, and low and behold, they all had a checkout time at 10:00 AM. So what did we do? We changed ours to 10:00 AM. And there was no negative financial impact, but we were only able to make that decision by checking the competition. So that’s on the digital side. And you can apply that to so many different things. To your listing titles, to your description, to your amenities that you offer, so many different things.

Ashley Kehr:
So Tony, how do you, when you’re looking on Airbnb or Vrbo, any of the websites that listings are on, how are you telling which are the best of the best? What is the best way to go and look to see if a property is being rented out a lot? I know I’ve seen… sometimes there’s the little notification that comes up. This is a-

Tony Robinson:
A rare find.

Ashley Kehr:
Yeah. Rare find, yeah, I was going to say hot commodity. I was like, that’s not it.

Tony Robinson:
They should change that to say hot commodity instead. That’s way more enticing. But yeah, that’s one way to look at it. As you open up Airbnb, you see which properties are showing up on the first page for your search criteria. You see which ones have a lot of positive reviews. Something above 4.8, 4.9 range means they’re really crushing it. Something that has really strong rates, a property who’s calendar seems pretty much full, and if it has that little emblem on there, this little blue diamond that Airbnb will put on a listing that says, this is a rare find. This place is usually booked. So those are all the indicators you can see on websites like Airbnb to determine whether or not a property is popular or successful.

Ashley Kehr:
So what would be your next advice? Number two.

Tony Robinson:
So tip number two, and actually, one last thing on tip number one. So you can also use that for your physical setup of your space as well. So if you’re trying to decide on what your design aesthetic should look like, you can also use the competition to help you guide those decisions as well. Now, what I don’t want you to do is is to copy verbatim what another listing is doing. Because you want to have some sense of individuality to your own property. And the design is a really personal choice, but use it to see what elements or what themes are consistent across all of the other top performing properties so you can try and blend those into your own listing as well.

Ashley Kehr:
I was actually watching a YouTube video this morning of your friend, Rob. Rob-Bilt on YouTube. And it was of him talking about the treehouses that he’s building in the Smoky Mountains. And just how every listing around them was just the standard kind of outdated cabiny feel.

Tony Robinson:
Bare cabin.

Ashley Kehr:
Yeah. Bare cabin, and how they were going to make it different so they out from the competition. So that’s exactly what I was thinking of when you said that, don’t copy, just because the other things are doing good doesn’t mean you should do exactly what they’re doing. See if you can find a way to stand out to.

Tony Robinson:
Which takes me into my next tip, Ashley, what a great segue. Tip number two is to try and find a differentiator. Once you’ve spent enough time getting with the other listings that are in your market, start using some of that research to say, “Where is there a gap? How can I improve upon what’s already working?” And the example you just gave of my friend Rob is a great example, right? He knows that the Smoky Mountains is a very competitive, very well performing vacation rental market, but he also knows that almost all the cabins look the same. I kid you not, quick side story. I was on a meetup with a bunch of cabin owners in the Smoky Mountains. And one of the guys, I had to do a double take because I thought that he was in my cabin. He was in a cabin and the background behind him. And I’m like, “Are you at my house right now? Like, are you actually at my property?” And he’s like, “No, this is a house that I just bought.”
So that’s how similar a lot of the properties can look out there. It’s like, I literally, this is a house that I bought that I own, that I thought that he was sitting in because it looks so similar. So if you can find a way to say, “Okay, here’s what’s working, here’s what people want, but here’s how I can make it even more unique. Here’s how I can offer maybe an amenity that the other properties aren’t offering.” So we’ve done this a lot in Joshua Tree as that market has started to heat up, but we’ve gone back and kind of started adding some amenities to our properties to stand out in ways that some of the other competition isn’t. So get really familiar, find that gap and then try and capitalize on it.

Ashley Kehr:
Awesome. Thank you, Tony. I do not have any follow-up questions on that advice, but I love that. So one of the areas that we’re investing in for the cabins, it’s a ski resort town, and there are a ton of short-term rentals. So what we’re doing to kind of make it a little different is we bought a property with land, and there’s a little pond, and we’re going to try to make it a more of an outdoor experience than just the interior, but it’s the same kind of thing where a lot of them look exactly the same in the inside. It’s the two skis crossed together on the wall all the ski decorations, wish for snow and things like that.

Tony Robinson:
Yeah, you got to find a way to stand out. And I think that’s even more important Ashley, because the short-term rental space in general is becoming more popular amongst investors for a multitude of reasons. I think more investors are starting to see that there is good returns to be had there. I think Airbnb itself now that it’s a public company has a lot more visibility. They’ve spent a lot of money in the last year trying to recruit new hosts. So there’s all these different factors at play that are driving more investors into the short-term rental space. And as that happens, if you want to remain competitive, you’ve got to find ways to stand out. So that one’s a really important point. So cool. Those are the first two tips. The next category of tips is all about revenue and pricing. So tip number three, and the first tip about revenue and pricing is don’t be afraid to experiment with your pricing strategy. And I’ll break this down a bit.
There are a lot of different things that you can do when it comes to pricing your property that will have an impact on your occupancy and effectively your overall revenue. So for example, you can change your minimum night stay. So how many nights must a guest book to stay at your property? Some people put it to one night. Some people put it to five nights. And depending on what minimum night day you choose, that’s going to have an impact on your revenue strategy. Another thing is the actual prices that you’re charging throughout the year. In most markets there’s a peak season and there’s a slow season. And the hope is that you know what those seasons are and you’re charging appropriately. If the busy season for your ski resort town is, I don’t know, January and February, because that’s when it’s snowing, you should be charging way more in those months than, I don’t know, in July when it’s the summer and no one wants to go to that ski town.
But understand what those different seasons are and play with your prices to make sure that you’re reflecting that. There are other minor things like how much you charge for your cleaning fee, whether or not you charge more on the weekends than you do during the weekdays, there’s so many different levers you can pull to try and see how it impacts your pricing. So I’ll give you two examples. First example, for our bigger properties, we have longer minimum night stays. So typically we’re between three days during the regular season, up to seven days during the busy season. For our smaller properties, we might go a one night day during the week, Sunday through Thursday. And then we’ll do a two night stay on the weekends, Friday, Saturday, Sunday. So we play with these different things to kind of find what’s been most beneficial for us. So you’ve got to be able to do the same for yourself.

Ashley Kehr:
Tony, question on that is, so the first year that we had our Airbnb, I didn’t go in advance and make the price higher for 4th of July weekend. And we had somebody book it for probably half of what they would’ve paid at any of the surrounding ones. So what are some tools that somebody can use to make sure they’re staying on top of the pricing? I know that Airbnb has their pricing software where it kind of fluctuates and you set the minimum and the maximum, but what’s some other features or software that people can take advantage of so you don’t get into that situation and you’re always on top of the pricing?

Tony Robinson:
So yeah, Airbnb does offer what they call their smart pricing kind of feature that’s baked into Airbnb. I mean, a lot of hosts rely on that. They use it and it works for them. What a lot of the more sophisticated hosts do or host a lot of listings, they leverage dynamic pricing tools. It’s a software that’s labeled as a dynamic pricing tool. Some big ones out there, there’s beyond pricing, there’s PriceLabs, which is what we use, AirDNA has recently launched their own kind of pricing software as well. There’s a lot of different platforms you can go to, but the general sense is that you use these dynamic pricing tools to do a really in-depth research into your market, understand your competition, and then they will dynamically and automatically adjust your prices every single day. So you just kind of set the framework of how you want your pricing strategy to work, and then it’ll go through on a daily basis and adjust it.
So like, for example, I can set, and I’ll keep this one brief, because we can get really, really into the weeds on this one. But I have a two night minimum stay for some of my properties in Joshua Tree, but I know that as I get closer to a certain date, the likelihood of someone booking goes down. So if I have an open date over the next 10 days, I’ll automatically adjust that two night minimum to a one night minimum. Because hopefully there are more people searching for a one night stay over the next 10 days than there are people searching for a two night stay over the next 10 days. So a dynamic pricing tool allows you to set rules like that and then it runs on autopilot on a daily basis.

Ashley Kehr:
Awesome. Very cool.

Tony Robinson:
Yeah. Let’s move on to number four, which ties in pretty closely to number three, but a big part of getting your revenue and your pricing strategy right is having good comparable properties. So in the same way that when you are analyzing a long term rental and you’re trying to figure out what you should charge for rent, you’re looking at other comparable properties in the neighborhood and you’re using that to gauge your decision on the pricing for your property, the same holds true for short term rentals. You want to identify a good comp set of properties, a good set of comparable properties. You can consistently grade your property against to see whether or not you’re moving in the right direction, if you’re pacing in the right direction or if you need to make adjustments. So we keep a concept, we have a broad concept to recreate.
Then we have a more kind of narrow concept. So like for example, say I have a two bedroom property. I might look at all the two bedrooms in that market. So I can see what are the different ranges of prices that we’re seeing for those kind of properties. But then I’ll create a very specific subset of properties. Maybe it’s like 10 to 15 properties, where I go through and I hand select and I say, “Okay, this one’s a really good comp to my property. Let me look at this one. This one’s a really good comp to my property. Let me look at this one.” And when I have the kind of broad strokes in that more narrowly defined comp set, that allows me to make some really good decisions on how we should be pricing our property. So creating a good comp set is tip number four.

Ashley Kehr:
Very cool. Thank you. With that is when I look at listings on Airbnb, what’s the best way to show the vacancy rate when you’re pulling those comps. Is it just like not putting in a date into Airbnb and then hitting search? So you see all of them. Okay. I didn’t know if there was a better way.

Tony Robinson:
Yeah. So Airbnb doesn’t make it super easy to do this kind of competitive research. A lot of the other tools out there, the dynamic pricing tools that’ll assist with this in different ways, but if you want to do it the free way on Airbnb, all you have to do is open up the comparable property that you want to see. And then you can literally just open up their calendar and see what dates are booked over the next 30, 60, 90 days. And that’ll give you a sense of how you should be pacing for your own property.

Ashley Kehr:
Okay. Thank you.

Tony Robinson:
All right. So those are the two tips on revenue management. My last two tips are all about guest communication. So if you guys didn’t know, a big part of being a short-term rental host is actually communicating with the people that come and book your property. We’ve learned a lot. We’ve hosted over a thousand people at this point across our different properties. Some have been amazing. Some have been terrible and everything in between. So I I’ll break down just a couple tips on, on what we’ve learned there. Tip number five is understanding that a refund is better than a bad review. Reviews are the life blood of your business as a short-term rental host. One bad review, especially for a new property can really derail your progress and ultimately your revenue. So if we are ever in a situation where we feel a guest has had less than an optimal experience or less than a five star experience, we are very quick to send some kind of refund. Sometimes it’s small, maybe we’ll send 20 bucks, 25 bucks. Sometimes it’s big. We might refund an entire night.
It all depends on the severity of the incident and what happened. And it doesn’t matter whether or not it was our fault. Sometimes things break and there’s no way we could have planned to prevent that, no reasonable way. But regardless, whenever a guest experience is something that’s less than a five star review, it’s on you as the host to make that right. And what we found, and I read this in a study. I used to study marketing when I was in college and brand… I don’t know what the phrase is, what’s it called when you’re a fan of a certain brand, like brand allegiance? I don’t know what it’s called, but your favorability of a brand can increase, if you have a negative with that brand, but that brand then does a lot to make it right. So for example, if we have a guest that checks in and I don’t know, like the hot water heater, all right, let me give you a real example. So we had a guest that checked in to one of our properties last week.
We’re in the winter time right now. So things are really cold in Joshua Tree. Guest checks in, they try and turn on the heater, and the heater is not working. We’ve never had that problem before. We’ve had that property for almost a year. Guests come in and out, never had that problem. This guest checks in, heater’s not working. We can’t get any HVAC company to go out to make it right. So we call up our cleaner. We say, “Hey, can you guys stop by the property?” Actually, we asked our cleaner to drive to the store, buy a space heater, and then drop it off at the property.
The guest didn’t ask for this, but we just went out of our way to do that to make it right for them. So we gave them that space heater. We gave them a partial refund, had someone come out the next day to get the heater fixed. But those are the kind of things you need to do to make sure that you’re making things right for the guest, because a bad review, a bad review will cost you way more in the long run than a partial refund.

Ashley Kehr:
So I just booked one of your properties for a full week. I can’t wait to say that something’s going wrong and ask for a full refund.

Tony Robinson:
Yeah.

Ashley Kehr:
But that is such a great point. That’s just another example of that money can solve so many problems, including with having somebody that’s having a bad experience in your Airbnb and saying, you know what, I would love to. And especially if they don’t ask for it. Doing more than what they ask for saying, if they just want you to come and take care of the problem, or even if they’re just letting you know, if they’re being super nice, like, “Oh, I just want to let you know, the wifi didn’t work while we were there.” And they’re not, not even asking for anything. And then you go and say, “Oh, let me refund some of your money for that”, or things like that. So that’s such a great point. I love that tip. I think so far my favorite.

Tony Robinson:
All right, well, tip number six is to leverage automation within your business. There are, especially if you start to scale your portfolio, there’s a lot of going back and forth with your guests that needs to happen to ensure they have a smooth experience prior to checking in, while they’re at your property, while they’re on their way out of your property. And then even after they leave. So you can manually send all of those messages if you want to. But that would be a nightmare. So we leverage a lot of automation software to help facilitate that process. There are a lot of companies out there, Hospitable, iGMS, Your Porter. There’s a lot of different channel managers that short-term rental hosts use, but the important piece is to pick one, use one, and then load it up with a bunch of different messages that you sent out to your guests.
So we have three distinct phases of a guest experience. They have before they check in, so they’ve just booked your property, but they haven’t checked in yet. They’re actually staying at your property, and now they’ve actually left your property. So before they check in, we send them a confirmation message that goes out immediately. We send them a check-in instruction message that gives them all the details of how to access the property. So they get those before they even check in, they get two messages from us. During their stay, they get one message that’s just checking in with them. “Hey, hope you checked in all right, hope everything’s going well, let us know if you need anything.” Before they leave, they get another message saying, “Hey, hope you had a great stay. Here’s a reminder of the house rules, and what you need to do as you check out.”
And then once they leave, they get another message that says, “Hey, we really hope you enjoyed your stay. We’d really appreciate an honest review of the property”, et cetera, et cetera. So all those are automated. And some guests, they get nothing but automated messages because everything that they ask is handled by those automated messages. And lo and behold, we get so many people, Ashley, they comment about how responsive and communicative we are as hosts, not knowing that the vast majority of that communication was some algorithm running on the background of our channel manager. So it’s really helpful to have those automated messages to give your guests a really good experience without it being a big time suck on your end.

Ashley Kehr:
And I think that’s a big part of setting up those systems and processes on your first property so that you have them all set to just roll into more properties instead of having to, okay, you got 10 properties now, having to go back and implement those for each of the properties.

Tony Robinson:
Yeah. We’re copy and paste at this point. So we set it up one time, we bring on a new property, it’s literally just copy into the next one. So that’s it. Those are my six tips. I hope that that gives some insight for new beginners on how to be better hosts, and maybe takes away some of the anxiety that’s related to getting started in the short-term rental space.

Ashley Kehr:
Yeah. Tony, this is awesome. This is a super easy episode for me to record and I learned a lot.

Tony Robinson:
All right, next one, we’re going to do it all about RV’s and campgrounds, or maybe running a liquor store. That way I can just lob all the questions your way.

Ashley Kehr:
Or injuring your knee snowboarding.

Tony Robinson:
Or injuring your knee while snowboarding.

Ashley Kehr:
Well, thank you guys so much for listening. I’m Ashley @WealthFromRentals. He’s Tony @TonyJRobinson on Instagram. And don’t forget to check out the Real Estate Rookie Bootcamp and the Short-Term Rental Bootcamp. We would love to have you guys be a part of it. It starts January 25th. We’ll see you guys next time, but before we go, let’s find out what’s new on BiggerPockets.com and can provide you guys the most value.

Ashley Kehr:
This is Real Estate Rookie, Episode 143.

Aaron Latal:
That’s I think the big mindset shift is just using the word if. Like in 25 years, if I was at the number one best place I could be financially, what would look like? Could you make it up?

Ashley Kehr:
My name is Ashley Kehr and it is almost the new year 2022. And Tony Robinson is still my wonderful cohost and I could not be happier to go into the new year with you, Tony.

Tony Robinson:
We made it through another year, Ash. 2021, it was crazy, right? Because 2020 was the crazy year for everybody in so many ways. And everyone thought that 2021 was going to be the year that things got back to normal, but it was kind of just more the same. So here’s to hoping that 2022 is the year that we get back to some semblance of regular normalcy, and that everyone that’s listening gets their first real estate deal, then it’s just good news around everybody.

Ashley Kehr:
I know. I know. And reach out to me and Tony on Instagram too you guys at WealthFromRentals and at TonyJRobinson and let us know what your new year’s resolutions are, what your new year goals are to get that first deal or to get that next deal. We would love to, love to hear from you guys about that.

Tony Robinson:
Yeah. So I think we’re actually probably going to do an episode, Ash, coming up here, but where we talk about our goals for 2022. So I won’t spoil that yet, but just what’s new with you? Give me a life update. What’s going on in the world of Ashley Kehr?

Ashley Kehr:
Well, today started out super great. I just had like, we have our little mastermind call me, you, and our friends, I guess. And then I got some random calls just about different opportunities and I was like, “Wow, today’s great.” And then this deal I’m working on, they won’t even counter my second offer. They countered my first offer, but now they’re not even countering my second offer and there’s another offer coming in, so I have some homework and some more tightening of my numbers to do. One thing I will not do is I will not stretch my numbers to make the deal work as much as I want that property. So always remember that guys is don’t overinflate your income and don’t deflate your expenses just to make the deal work. There will always be other deals. And I’m going to replay this to myself repeatedly today as I really, really want to just offer the full amount and get the deal. But I won’t. What about you, Tony?

Tony Robinson:
Yeah, but just commenting on that, it’s such an easy thing to do. When you spend so much time looking at a deal, analyzing it, you’re already what you’re going to do with the property. It’s super easy to start making decisions that are based on emotions, they’re not based on data. Like there’s a small motel here in Southern California in Big Bear Lake that I put an offer in on a few months ago and we couldn’t agree on a number and it’s still listed and I keep thinking should I just go back and ask them what they’re… But it’s like, if it’s still listed, it’s still listed because they’re asking for too much. So yeah, really, really solid pass.

Ashley Kehr:
I even made the property the background on my phone. So when I look at my phone, it’s like, “Is what I’m doing right now really helping me get this property?” So I’m going to be so disappointed if the reason I don’t get it is because they get a higher offer, something where at first there’s been no offers and really not a lot of interest. So it was more of like, can I come up with enough money to make this work? And can I pull off the operations? But now it’s like, oh my gosh, I might not even be able to get it under contract. So we’ll see.

Tony Robinson:
But they say sometimes the best deals are the deals you don’t do. So if this one doesn’t work out, maybe it’s for a good reason.

Ashley Kehr:
Right. Yeah.

Tony Robinson:
But what’s new with me? Let’s see. Still trying to sell my house in Louisiana. Mentioned that in the last podcast. We had it under contract for all of 48 hours before it fell out of contract because of the flood insurance. So if anyone wants a house in Louisiana, it’s still up for grabs. But super excited, our team-

Ashley Kehr:
You could put a link in the show notes.

Tony Robinson:
… Yeah. We’ll put a link in the show notes if you guys want to check it out. Yeah. But I was super excited. Our team at Alpha Geek Capital is growing. We’re actually looking for an acquisitions person. So we just closed that application last night. We had a bunch of people apply, so we’re hoping to get someone onboarded within the next couple of weeks to help us get to our goal of buying not one, not 100, but 1,000 short-term rental units in the next two and a half years or so. So we’re going to need a pretty cool team to make that happen. But that’s what’s going on in my neck of the woods today.

Ashley Kehr:
I feel like over the last couple of weeks, or even the last month, you and I both have had a lot of clarity as to where we want to go, what we want to do. And just from conversations we’ve had, I think at least like the last six months, we’ve been a little lost, both of us. So I love it that we’re so in sync. We’re lost together and we find our way together.

Tony Robinson:
And what better time than right here at the end of the year, where we can go into 2022 with a lot of clarity. But I last thing on that point, I think what helped me gain that clarity was having conversations with other investors, right?

Ashley Kehr:
100%.

Tony Robinson:
And it wasn’t necessarily that they came to me and said, “Tony, this is what you need to do.” Honestly, what someone told me, they were like, “Tony, it doesn’t matter what you decide, just pick something.” Like, “It doesn’t matter what you decide, just decide on something.” And when I got that feedback, I was like, “Man, I guess you’re right.” And when I had that kind of realization, it was really freeing to realize that I could pick whatever I wanted to pick, I just needed to pick something.

Ashley Kehr:
Yeah. I agree. It was those little side conversations that happened at conferences or phone calls with other investors. So that’s why it’s so important to network, not even just the inspiration, motivation, but because you’re going to get those, it’s usually just one liners too that are like aha moments for you. I’m like, “Wow. Okay.” But I have to say, since I have this clarity again, that I feel so much more motivated. I can’t even tell you the last week, how much I’ve just wanted to grind and hustle and work because I know exactly what I’m going for now. And so nice to have clarity. Let’s hope I can keep it.

Tony Robinson:
Yeah, when the podcast comes around in February, we’re both in totally different directions. I’m buying farm houses in New York by you and you’re buying, I don’t know.

Ashley Kehr:
Vacation homes in Mexico. Yeah.

Tony Robinson:
Vacation homes in Mexico. Yeah.

Ashley Kehr:
Well you guys ready for today’s show, the last guest episode of 2021? Today we have Aaron on the show and Aaron is going to talk about systems and processes for wholesaling. And he just started his wholesaling business in the spring of 2021. So he’s already hired virtual assistants and people to outsource his tasks to. Even if you’re not wholesaling, this is a great episode to listen to, to learn how to do these things and start to outsource.

Tony Robinson:
And not only does he go over how he’s building his team, but we also spent a good chunk of the episode just talking about how he set goals for himself. So what a great episode to end the year out with.

Ashley Kehr:
Okay, well make sure you guys check us out on Instagram if you haven’t already at WealthFromRentals and TonyJRobinson, we’re going to be sharing even more content going into the new year. And then check out the Real Estate Rookie YouTube channel. We post the podcast on there and also have weekly videos released that are tailored just for rookies. And let’s bring Aaron onto the show.

Tony Robinson:
Aaron, welcome to the Real Estate Rookie podcast. Super excited to have you on man. Welcome to the show.

Aaron Latal:
Awesome. I’m excited to be here and honored.

Tony Robinson:
Yeah. Awesome man. So we’ll get into the story here. Aaron, why don’t you tell us a little bit about yourself. Tell us how you got started in the world of real estate investor.

Aaron Latal:
All right. So I graduated from college in 2017 and I got a job. I studied engineering, so I got a decent paying job. And then I was like, “What?” Because I had never really been paid before and then getting a W2 income, like every two weeks they were paying me more than I ever made really. I worked jobs throughout school, but never really made any money. And then I was like, “What am I going to do with all this? Geez a wheeze.” And I ended up having way more time as well, because after I got home from work, I didn’t really have anything to do and I was super involved in college.
So I was really bored when I got home from work. And I was like, “Well, I don’t know, I like working on things. So I’ll just start working on this place that I’m living in now and see if I like that, I might buy a property to fix up and flip or something.” Because I was looking to try to figure out something to do with my money. And I looked at investing in a stock market. And that wasn’t really, for me. I don’t know, tangible guy. So I bought a duplex after looking for a while and getting super involved in reading tons of books and being a Bigger Pockets junkie, listening to those podcasts to and from work for six months or something.
So I bought this duplex, rehabbed one unit, rented it out and then rehabbed the other unit and then moved out of it with… I was living in it with a friend. So like house hacking the unit and the whole duplex. And then me and that friend that I was living with, moved into his duplex, which was a block and a half away. So I grabbed my stuff and we threw it into his car and drove. There wasn’t enough room in the car for me to sit there, so I just a handful of stuff and I walked over to the duplex quicker than he drove over there. So we moved out of that place and then I guess buying that first duplex was how I got started.

Tony Robinson:
Yeah. So it sounds like you house hacked to begin with, is that the first strategy?

Aaron Latal:
Yeah, definitely.

Tony Robinson:
Awesome, man. So just give us an overview of where your portfolio is today.

Aaron Latal:
Okay. I still actually just have that one duplex that I bought a few years ago. And then since then I did one flip/hotel, because it was a bad wholesale deal, really. I couldn’t sell it to anybody else.-

Ashley Kehr:
Can you just explain what a hotel is for somebody that doesn’t know? Real quick please.

Aaron Latal:
Yeah, definitely. It’s a property that really could be listed or it’s really close to being able to be listed. So I bought the property and then listed it in two weeks. So basically I just repainted some stuff and then fixed a couple cabinet doors and closet doors that weren’t closing properly.

Ashley Kehr:
Awesome. So is that your one flip and then anything else after that?

Aaron Latal:
Yeah, after that I did one wholesale deal, and that one, I JV’d with somebody. And then as I got the call from the title company… Or the day that I got the call from the title company like, “Hey, your checks here, come pick it up.” That was the day after I had quit my W2 job. So I was like, “Ooh, that could be, I don’t know. I believe in signs and everything, but that seems like it could be one of them.” So I had quit my job. And then since then went on a little vacation and came back and started wholesaling. And now I’ve done three more wholesale deals since I started doing that. I’ve got a few under contract right now and then one of them I bought and I actually am seller financing it to somebody else.

Ashley Kehr:
Awesome. Okay. So lots of different stuff going on there. First, I want to know what was the motivation to quit your job. Is it because you hated it or was it because you were making money in real estate or you wanted to have more time to pursue real estate really?

Aaron Latal:
Good questions. It was kind of weird to quit my job because I didn’t hate it. I liked it. I liked the job and I liked the people and yeah, pretty much everything about it I liked. I was just like, I don’t love it and it’s not really what I see… I guess I knew what my ideal life looked like and then I knew, or I could see what path I was on and the path I was on was going to end over here to like… And then my ideal life is over here. So it didn’t feel perfect, and it’s a good time.

Ashley Kehr:
Let’s break that down a little bit. So it’s the end of the year, everybody’s getting ready to put together their New Year’s resolutions. What’s going to be their goals for this coming here. How do you set that vision for yourself? For me, it is really hard for me to see into the future and be like, “This is what I want my life to be like in five years.” Do you have any tips or tricks for me and any of our listeners as to how you set that vision for yourself and really pushed yourself to meet that goal?

Aaron Latal:
Absolutely. I will also start off with, I guess, it’s really hard for me to set a long term goal. I’m definitely a goal setter and I love personal self-help books. Basically love those. And so I set goals and normally my goals are like, “Well, this year I want to run a half marathon or do something like that.” That was how I was approaching my goals. But in 2020 I went to the ONE Thing Goal Setting Retreat and they gave me a really good framework for how to set longer term goals. And then they, instead of, I don’t know, I’ve always built my… Or I’ve thought that you could build a three month goal and then off of that, you can make your one year goal and then you can make your five year goal from there. And they were like, “No, do it backwards.”
So think about what you want your life to be like in 25 years. And that’s really, really hard to… I’m barely 25 years old. So in 25 years I’m going to be twice as old as I was, or as I am now, it’s just insane to think about. So they’re just like, “If it was”… That’s I think the big mindset shift is just using the word if. Like in 25 years, if I was at the number one best place I could be financially, what would that look like? And it’s kind of, at that point, you can kind of play around with it and be fun and be like, “Okay. So if I was totally satisfied with my job, what would that look like? And just make it up.

Tony Robinson:
Let me add one comment onto that, because I love the conversation about goal setting because is I feel like it’s such a… I think everyone understands the value in setting big goals for yourself, but people don’t often take the time to really clearly identify what those goals are. And funny enough, Ash and I were just on another call this morning, we were sharing our goals with another group of investors. And it’s just such a motivating feeling when you can set a super specific and clear goal for yourself, because it’s like all of the other noise just starts to go away when you’ve got this really clear vision of what your future looks like and clarity around what you should be doing on a day to day, week to week, month to month basis.
That clarity just really comes in when you’ve got a really crystal clear vision of your future. So not to put you on the spot too much, Aaron, but I guess in the way that you’ve set your goals, what is your advice for someone if they want to mimic what you did and maybe set that big 25 year picture or 10 year picture, one year goal for themselves.

Aaron Latal:
Okay. So basically you got to break it down, because you can’t just be like, “In 25 years, my whole perfect life between my family, my relationships with friends, my fitness, my finances, my job. So I’m talking about all these things. Break those down into categories. So start off and just say, “I think it’s best. If you can try to get some time alone, like make a big time on your calendar and you can go out somewhere. I think that’s what I’m going to do. I think making it more special can make it a little bit exciting.
So do that and then break it down into my perfect finances would look like this. And so I have X amount of dollars saved up and I’m going to be spending X amount of dollars per month. And so that’ll last me the whole time, or I’m going to have this many rentals that are paying me and so that’s going to last me for whatever. And then my relationships I’m going to just have a core group of five to 10 friends. And we see each other a couple times a year and we go on these types of vacations. And so you make all of that up. And like, that’s kind of, I think the fun part. But definitely be writing it down and try to get as specific as you can.
And then, so you have your life broken down into those categories. The basically five that I can think of would be finances, your job, family, friends, and health. You can break it down into more or less, but I think having that is a good place to start. So then identify your 25 year goals in those five areas. And then from there comes the part where you’re going to break it down and figure out basically your most important next steps or your action plan. So break your 25 year goal down, and do a five year goal, and then you can break that down into a one year. And then from there, you kind of know what you need to be working on this quarter or this month or this week.

Ashley Kehr:
That’s awesome. Thank you so much for sharing that, Aaron. Bigger Pockets also has the intention journal that works in the same way, where it has you break down your mins, your most important next step. And it really helps you develop those action items to reach your goal or to get there. But Aaron, enough about goal setting and the future and the vision, I want to hear about what you’re doing right now in your business. So you mentioned you’ve been primarily doing wholesaling. What does that business look like? Do you have partners? Do you have employees? What kind of systems do you have? I want to hear all about it.

Aaron Latal:
Okay. I started wholesaling in May this year and I had been wholesaling, it was basically, I was like, “Ah, I need to make a little bit of money and it would be a good way to find my next property. So maybe I’ll find my property off market. And if I find something that’s not a good fit, I’ll just try to sell it to somebody else.” And so that’s what I had been doing for about six months of the end of 2020, I guess. And so that’s when I found that whole tail deal. And then I found that other deal that I JV’d. But then since May, I was like, “This is what I want to do full time.” And so I’m actually, it turns out, pretty interested in the business side of things and the process side of things. So what I’ve been doing since may is trying to systematize and make a process around things so that I can eventually hire myself out of the business.
So, so far I’ve been able to outsource. I had outsourced some cold calling and text message prospecting to a friend of mine that wanted to learn more about real estate. And he’s since moved on and I’ve found a virtual assistant in South America that’s doing some cold calling for me right now and I’m interviewing a person to help me with dispositions right now. So they’re going to be sending out emails and creating the emails to send out to my buyers list and then doing all that communication between the interested buyers and us and the title company and just making sure that runs smoothly so that I can focus more on spending more time going out and looking at properties and analyzing properties. Because that’s a fun part for me.

Ashley Kehr:
I saw Ashley Wilson, she’s at BadAshInvestor on Instagram, she does multifamily syndication. She had done this post this morning or yesterday and it was that when she goes through her email or when she does anything, it’s either that task is going to be automated, delegated, or eliminated. And I thought that was so awesome and that’s what like keeps her from having to do tasks and to be that high level person where she can take something and categorize it into one of those dumps I guess, and dump it into there. But Aaron, are you using any kind of software to manage these contractors that are working for you or to do your project management workflow?

Aaron Latal:
Yeah, absolutely. I was using Podio when I started just because it was free, and it was working pretty well for me to manage like following up with people, but it wasn’t working as well as I thought it could be. And now I’m using Forefront, which is a CRM that Danny Johnson made. And I found him actually on another Bigger Pockets podcast, and I was using him for a website before that and he invited me to a webinar where he was rolling out the CRM and he was like, “We’re giving everybody a great deal.” And I was like, “I don’t know if I need it, but I think it’s going to be helpful.” And so kind of took a leap of faith and it’s awesome. I love it so much.

Tony Robinson:
Aaron, one thing I want to point out, because I feel like a lot of times on podcasts, you hear the guests and you hear the host talk about like team building and getting this VA and hiring this person for their team and doing these things. And when I think about myself, when I first started in my real estate business, I didn’t have the money in my business to go out and hire somebody. And I think that’s just an important distinction to make because it’s like when you’re first starting, sometimes you do have to wear all of the hats just to get the whole machine to get to start turning. Like if you maybe go out and try and hire everything right away, you might not have the resources, whether that’s money, whether that’s the knowledge and ability to train those people or even just the desire.
So I just want to make sure that we’re framing the conversation in that, yes, it’s cool to hear Aaron and Tony and Ashley and Brandon and Dave and all these other people talk about how their teams are being built. But when you’re first starting out, sometimes you do have to do everything yourself. So I guess my question to you, Aaron is when you first started wholesaling, was your team what it is today or was it just you as a one man show?

Aaron Latal:
My team was me for sure when I first started wholesaling. And so I was making calls to people and then following up with them, and then signing contracts with people at the properties, and then talking to the title company, and then making sure everything closed. And then when it didn’t just tearing my hair out and run around like a chicken with my head cut off, and then go into a different appointment where I’m trying to put my head back on so the person that wants to sell me their house thinks I have it together. And honestly, still, I feel like I’m just, I’m faking it till I make it. I feel like.

Tony Robinson:
I mean, we’ve all read the E Myth, right? Have you guys read The E Myth by Michael Gerber? So in that book, it always talks about working on your business and not always working in your business, but I listened to an interview with Michael Gerber where he made a very important distinction about they’re working on versus working in. And what he said is that, that is a gradual change. Like the book, you read the book and it’s a six hour, seven hour read. But the actual process to go from consistently working in your business to consistently working on your business, that’s a gradual change that takes time. And he said, most people when they first start this should be working in their business. So I appreciate you being transparent and open Aaron about how you’ve started off that way, but you’re trying to transition into working more so on your business.

Ashley Kehr:
Aaron, do you have any book recommendations or even YouTube videos or people that you’ve followed that have really helped you with this mindset shift and to help you implement some of your processes to get to this point where you want to be working outside of the business instead of in it?

Aaron Latal:
Yeah. So like I mentioned, I love self-help books. So I could go on a big list, but I think the most helpful for working on my business, I mean, I’ve read The E Myth and I listened to the audio book of Traction or whatever, and I think I need to read that one because it didn’t like… I was like, “Eh, that book’s okay,” but everybody’s going crazy about it. But the book that really did help me a lot for working on my business or how to think about it is this book called The Road Less Stupid by, I think it’s Keith something, but I haven’t heard of it a lot of places. And I think it’s really underrated, because it gives you these different chapters and then like here’s things that I’ve seen.
He’s I guess a VC, so a venture capitalist. He’s seen a bunch of businesses grow and everything, and he’s like, “Here’s this one specific topic. Here’s how you should think about it.” And then at the very end of the chapter, he gives you a list of 15 or 20 questions and he spends the first quarter of the book just outlining how you should think about your business. And so he coined this term for me at least called thinking time. And he is like, “You should do a thinking time probably two times a week, if possible.” And when I first started my business, it was actually easy to set aside time for the thinking times. And so I got in a good habit of Tuesday, Thursday mornings. First thing I’d do is I’d just make some coffee and get myself really situated. I got a sweet ritual around it where I light a candle and I put on a special hat and sit down at a table where there’s no distraction, it’s just me and a legal pad and write down a question and answers to it. And so that book has been really helpful.
But then, like I mentioned, I don’t feel like I really know what I’m doing when I’m hiring people, because I worked for a huge company, and I never had anybody you reporting to me. And so now I’m hiring a VA, the second VA. I feel like I have no idea what I’m doing, but I heard, basically I heard somebody on a podcast. It’s this guy named Dan Bro. It’s Dan Brault. He was on one of the Bigger Pockets podcasts and he is doing cool things with wholesaling. And so I followed him on some social media and then I saw him post like, “Yeah, I got a mastermind coaching call group thing.” And I was like, “Yeah, sure. I could learn something from you for sure.” And so I signed up for that and he’s been providing a lot of helpful information for wholesaling in particular.

Ashley Kehr:
Yeah. Thank you for sharing that. That’s super cool. And Tony, I saw you typing in to order that book. So please send me a copy too while you’re at it, while you’re shopping. But Aaron, so you’ve been doing your wholesaling business since this spring really of 2021. And you already have started building your team. What is your advice for a rookie investor as to when they start building their team? When they start reaching out to outsource some of their task and how do you find these people?

Aaron Latal:
That’s a good question. I think for me, I knew that when I started wholesaling, I was like, “I don’t want to be a one man operation.” Although, I think there are a lot of people that are just like, “I’m just a one man wholesaling operation. I make good money for myself. I don’t spend that much time doing it.” But when I was going into it, I was like, “I want this to be”… Basically I want to build it up to a certain level and then get myself out of it as fast as possible so I can focus on other stuff, whether it’s flipping houses or burying a whatever I decide to spend my time on.
So I was like, “I want to hire people as fast as possible without rushing into it.” So basically I just came up with a couple criteria in a thinking time where I was like, “I want to have three months of somebody’s salary saved up and I want to have a little bit of other runway.” I think Scott Trench mentioned it, or he had that term where you have like a financial runway. So I want to have my financial runway and then a financial runway for them. And so that’s when I decided I was ready to hire somebody.
And then how I chose the specific person to hire, I used this table of four different categories, I think. It was in EOS or Traction or that book where it was like, “What are the things that you’re good at and you like doing? What are the things that you’re bad at and don’t like doing? And then bad at, but you do like it?” And then so basically it was just start on the things that you’re bad at and you don’t like doing and then outsource those. And for me, I was lucky that those were the repetitive and the tasks that would be easy to train a virtual assistant for. And so I’ve been making videos on Loom. So I’m just recording myself and my screen whenever I’m doing stuff like getting an email ready to send out to the buyer’s list or when I’m sending texts to people how I do that, make a video with Loom.

Tony Robinson:
Yeah. Aaron, so much good advice there. And I think a lot of people, they have fears around building out a team because sometimes it does seem like it’s more work to train somebody up than it is to just do it yourself. But your process of just recording yourself while you’re doing it, because you’re going to do it anyway and then sharing that with them as a training material, I think is super insightful. I think one follow up question for me, because you, you mentioned this briefly, but you said the VA that you hired to help with cold calling is in South America. It’s a totally different country. A couple of questions around that hire. First, is that if you have this person that you’ve hired for cold calling, were they already trained in how to cold call for wholesaling or was that a process that you had to train them up in? And then second, was the language barrier at all, a concern for you in hiring from someone overseas.

Aaron Latal:
So it’s a service that I’m using, and I found them through another Facebook group of wholesalers. They were like, “Yeah,” one person on there was like, “Yeah, we just started or we’ve been cold calling and this person has really helped us out. You should check it out.” And then like a few weeks later, somebody else was like, “Yeah, I just started with that same guy.” And like, “I’m loving it. He’s super helpful.” And so I was like, “Well, this is something that I do want to hire out and I need more leads coming in. I’m ready to handle them. And so it just makes sense. I’m going to test it out.” And the language barrier is, it’s not too bad, so they are just giving me the warm leads. So I guess they don’t have to talk on the phone a ton. And then there’re some words that the script that they’re using, just they don’t say very well. So I’ve been training them a little bit that way.

Tony Robinson:
So two follow up questions for me on that, and this is about the quality control and then the workflow, I guess, I’ll talk about the quality can control portion first. Do you have an ability to listen in on their conversations, to be able to give them feedback or are you just blindly trusting that they’re knocking it out the park for you?

Aaron Latal:
I can listen into their conversations, so that’s a good question. I’m using, what’s now called ReadyMode. It used to be Xendialer. Or that’s what they’re using, I guess, and that records the conversations. And I’ve been recording all the other conversations that I’ve been having, because I’ve been using CallRail. So I’ll call somebody up, when I was cold calling, and actually when my friends and I were cold calling, we would have sessions on Fridays where we would roast each other in our cold call. So it was basically just put on a 10 minute call of you talking to somebody and then let my colleague just tell me what went well and what went poorly. And I really liked those and I’m still doing some feedback sessions with other wholesalers now.

Ashley Kehr:
Tony, maybe we should do those Friday night roasts between me and you. Like, “Geez, Tony, I can’t believe you said that on this podcast.”

Tony Robinson:
Yeah. You know what Ash and I have been talking about doing is just going on social media and just reading all the mean reviews of us on the podcast. So maybe that’s what we can do for our roast session is just read the bad review.

Ashley Kehr:
Yeah. It’s like on the late show they had their mean tweet segment where they’d have celebrities read the mean tweets out. I don’t think anybody’s ever said anything mean about Tony. So I’ll just have to create some.

Tony Robinson:
I don’t know if that would be as productive as Aaron’s roast session, but close enough. So Aaron, one more follow up question for me on the workflow with your VAs. So in terms of how the leads are moved through the pipeline, I guess just give us an overview of what that looks like. Are you giving them the leads? Are they pulling their own list or is it your list? Are they just trying to, I guess gauge for interest in selling, or are they actually setting appointments. And then how do the leads actually get to you? So just give us an overview of that entire process.

Aaron Latal:
It’s actually, the process is still in development. So in ReadyMode, my VA started setting an appointment for me. And since then I was like, right, when she first started, I had no idea. I was like, “Why haven’t I gotten any leads? This is ridiculous. It’s been half a week and I haven’t seen anything come through.” Because I thought they were going to be pushed to my CRM. And then there was just an integration error. And so there was five appointments that I just had not gone to. But since then, she’s now setting follow up call appointments for me to understand what the seller’s motivation is. And then basically get motivation timeline and a price range from them just to see if we’ll be a good fit.
And then from there, I will go out on an appointment to the actual property and take some photos and try to sign a contract if it makes sense for both of us. But the lists I’m pulling and then I send to them. And yeah, I would like to probably at some point automate list pulling and managing of… Because I’m using a couple, I was cold calling for a little. Or sorry, cold calling, texting and sending direct mail. And I was rotating through the lists. And I honestly am not managing that as well as I should be.

Ashley Kehr:
Aaron, I want to take us to our rookie deal review and break down one of these wholesale deals that you have done. I’m going to ask you a couple, just fire on questions here, just so we can get an idea of what the deal looks like. And then if you want to go ahead into the story after that. But so do you have a deal in mind? Do you want to share with us?

Aaron Latal:
I do. Yeah.

Ashley Kehr:
Okay. What kind of property is it? A single family?

Aaron Latal:
Yeah.

Ashley Kehr:
And what market is it in?

Aaron Latal:
St. Louis, Missouri.

Ashley Kehr:
And how did you find the deal?

Aaron Latal:
So I found the deal by driving for dollars, actually, when I would still had my W2 job. Driving for dollars, sent them a bunch of direct mail. They never replied. And then I recycled that list and was cold calling it when I first started and they answered a call and then I went out and meet them.

Ashley Kehr:
That’s so funny that you tried the two different ways and the one worked and the other didn’t. Okay. And then what was your contract price on this?

Aaron Latal:
Got it under contract for $140,000.

Ashley Kehr:
And what did you assign it for?

Aaron Latal:
145.

Ashley Kehr:
Nice. Okay. Do you want to go into tell us how you negotiated that and how you found your buyer?

Aaron Latal:
Yeah, absolutely. So I want to be clear, the assignment fee was $5,000, so-

Ashley Kehr:
Right. Yeah.

Aaron Latal:
… Yeah. That would be a wild deal.

Ashley Kehr:
Don’t worry. I would’ve had a lot more excitement if it was 145,000. Your excitement too.

Tony Robinson:
145, yeah.

Aaron Latal:
So yeah, I’ll let you know a little bit more about it. The reason I guess, that they did not answer or reply to any of the direct mail probably was because it was just not the right time for them. They had a tenant in the property for seven years, and then when I called them, they were finishing up the process of kicking that tenant out, because they had to stopped paying water and utilities and rent for months. And so I just got a hold of him at the right time and I was like, “Hey yeah, have you ever considered selling that property?” And she was like, “Well actually we just had a real estate agent walk through it and I’m going to go and get some quotes from somebody this Friday, would you be able to”… And I was like, “Oh, I could come by and have a look at it and just let you know what I think I could offer.”
And so when I was negotiating it, I really wanted to obviously get it for a little bit less than 140. I was hoping really I could be, I was like 135 would be a good number for me. And then I could assign it for, I was hoping 150. And then I always tried to target a $15,000 spread, although I’ve yet to hit it, that’s what I’m aiming for. So I started a little bit lower with my numbers and she was like, “Yeah, I really want… We want to get 150. I know it’s probably worth 210 after it’s fixed up.” And I was like, “Yeah, but it doesn’t need a lot of work since that tenant was in there for seven years.” And they were kind of like, they had a lot of dogs and they were DIYing some updates to the house that were questionable.
And so she actually had moved out of state after she had the property. So for their, her and her husband’s job, they moved into Indianapolis. They were five or six hour was away. And so I was like, “So what’s your plan with the property?” And she’s like, “Yeah, we’re just going to fix it up, come down on the weekends and stuff and fix it up and then probably just sell it. It’s a good market.” And I was like, “Yeah, it is. If you didn’t want to drive down here.” And she had two little kids with her and I was like, “If you don’t want to come down here with your family all the time, I could just buy it and fix it up. It’ll be easier for me.” And so that’s how that negotiation went.

Ashley Kehr:
So you were listening to things that she said, like she had kids with her and she lived far away and you used that as a tool to offer her something that was appealing so that you could get that lower purchase price. That’s awesome. So how long did this deal take place? How much time did you put into making that $5,000?

Aaron Latal:
Probably more than I would’ve liked to really. Somebody was under contract to buy it for a while. I guess, I think I set the close date to be 45 days after we signed the contract. And this guy went and saw it and he was like, “Yeah, this looks great. I’m just going to move some money out of my 401k. And then we’ll be able to buy this property and fix it and flip it up, or fix it and flip it.” And then it was his deal for a while. And then for whatever reason, he couldn’t get the finances to buy it in closing time. And that was two or three weeks before I was supposed to close. And so I was scrambling for a week or two, just like, “I need somebody to buy this property in two weeks for $140,000 at least.” And then I ended up finding a local investor that wanted to get it, but I was all over the place.

Tony Robinson:
I think that’s a really critical piece. So I want to make sure we don’t gloss over that. You had two weeks to find a buyer and you said you ended up connecting with a local investor. Walk us through how you found that person in the 11th hour. Was it through like a meetup? Was it just a friend? Where’d you guys connect?

Aaron Latal:
So I was like, I was posting it in the different Facebook groups and sending out texts to people that had bought properties, cash in the area before. And I called like the, We Buy Ugly Houses people. And this guy just out of the blue reached out to me and was like, “Hey, I’m looking for this place.” And he was one of the people that I had texted, I think. And then I was like, “Yeah, come through and have a look.” And he was like, “Yeah, it looks pretty good. We buy a lot of houses in this area.” And we signed the assignment contract, I don’t even think it was a week before the close. I think we agreed on it with a handshake a week before we needed to close. And then all the documents were signed on Monday or Tuesday, and then closing was on Thursday and I was whoo.

Ashley Kehr:
Sweating on that one.

Tony Robinson:
Yeah. But kudos to you for figuring it out. I think a lot of people that get into that situation, they kind of panic. But you kept your cool for the most part and found a way to make the deal work. One last question, before we move on from this rookie deal review, what would’ve happened Aaron, had you not been able to find a buyer? What would your next steps have been?

Aaron Latal:
That’s a good question. The contract that I have is, I would’ve just lost the earnest money that I had put down on that property. I had a few other people that were interested in buying the property. And I was talking to another wholesaler that was like, “Yeah, we’ve got somebody that’s super interested, but they only are going to pay 135 for it. That’s what their numbers are coming out at.” And so I actually reached out to the buyer, and I was like, “Would you… I know I said I was going to close on it.” And it was just the worst feeling that I had going into the conversation. And then the conversation was awful and the seller of the property was not happy with me. And she was like, “No, I can’t close for less. People have already talked to us.” And then I finally found somebody that would close for a little bit more than what I wanted to, or a little bit more than, and she got what she needed.

Tony Robinson:
And I asked that question because different whole sellers will approach that situation in different ways. Some will say, “Hey, we never not close on a deal.” I know some that say like, “Okay, if we have to buy it ourselves, we’ll buy it ourselves. And we’ll figure it out from there.” Some, like you said, they’re okay walking away and just leaving the seller with their assignment fee. So there’s a bunch of different exit strategies, I guess, on a wholesale deal. So that’s the point that I was really trying to make. So thank you for sharing that experience with this man. It sounds like you did pretty good clearing 5k on a relatively easy deal, man.

Aaron Latal:
And actually, I would’ve probably ended up closing on it if I had the funds, but for that one, I just couldn’t do it. But the first wholesale that I did where it was a hotel, that was the reason, because I had it under contract for too much and couldn’t sell it. So I was like, “It makes sense for me to flip it.”

Tony Robinson:
Let me do it myself.

Aaron Latal:
Yeah. And barely made anything on it and learned a lot.

Tony Robinson:
But you learned and that’s the beauty of real estate man, is that there’s so many different ways to make a deal work brother. So glad this one worked out for you. So Aaron, want to move on to our mindset segment next. I want to get into the psyche of Aaron and learn a little bit more about what makes you tick, man. So if we go back to Aaron, maybe when he first graduated from college or before he started consuming all those Bigger Pockets podcasts and books and whatnot. You had some maybe assumptions you had about what it means to be a real estate investor. You had some, maybe made up beliefs about what you thought it was going to be like. If you think about all those thoughts, all those ideas that you had, which of those turned out to not be true? Which of those turned out to be misconceptions about what it means to be a real estate investor?

Aaron Latal:
I think it’s kind of funny. I’m probably unique in that I really thought, I was like, “Oh, it’s really easy. You just buy a house and then rent it out to people and then they just pay your mortgage.” Be silly not to do that. So I just jumped in and I was like, “Oh, it’s a little tricky.”

Tony Robinson:
But I think that cuts both ways, right? Because you see some people that overestimate the amount of complexity that goes into real estate investing. And then the flip side, you see some people that underestimated, and I’ve shared this in the podcast a lot. You hear other investors say it as well, but real estate investing is not super complicated. It’s a fairly simple process to get started in the world of real estate investing. But it is definitely not easy to become a real state investor. It takes an extreme amount of effort to get there. So it is hard. It’s not complicated, but it is hard.
I think there’s so many proven paths that you can follow to become a real estate investor, that’s why the complexity’s not there. But it is hard, especially if you’re working in W2. Especially if you have busy family commitments. Especially if you have other things going on to dedicate the time, to underwrite the deals, to make those relationships, to do all of the leg work that’s required to get the first deal done, I think that’s where the hard part comes from. So you’re definitely not alone, man in getting that guess wrong, but we appreciate the transparency around it.

Ashley Kehr:
Yeah. Me and Tony still, even today will text each other and just be like, “Do you feel overwhelmed right now?”

Tony Robinson:
Yeah.

Ashley Kehr:
Yes? Me too. All the things you [crosstalk 00:44:19].

Tony Robinson:
Absolutely.

Ashley Kehr:
Okay. So I’m going to take us to our rookie request line. You guys can give us a call at any time, 1-888-5ROOKIE, and leave us a voicemail. We may just play your question on the show and have a guest answer it.

Ashton Maxima:
Hey there, Ashley and Tony, my name is Ashton Maxima. I’m here in San Diego. I have a question. It’s right now I’m a full-time worker detailing and I’m wanting to get into real estate and I’ve come to a place in my life where I can take off a few months of work and really just focus on it. My main goal is trying to get into wholesaling and doing that, but really just wondering if you guys think that’s a good idea or any other thoughts you guys might have. Thank you.

Aaron Latal:
I would say, start working on getting into wholesaling before you quit your job. Because at the beginning you’re not going to have just a pipeline full of leads that you can follow up with and go and visit. And it takes a long time to close a deal. And like I mentioned, this person that I, like in the deep dive deal, I found them nine months before the deal closed, before you even sign a contract. And then it was another two months after that. So do a little bit of maybe driving for dollars and then get a good… You have a good unique list that way. And then reach out to them however is best for you. If you don’t have a lot of money, but you have a lot of time and energy, cold calling could work. If you are on the opposite end of the spectrum, you could send out some direct mail or something like that. And yeah, just talk to other people also that are in your market that are wholesaling and see what their take is as well.

Ashley Kehr:
Yeah. I bet there’s an opportunity out there where you can even work for a wholesaler doing driving for dollars for them and send them leads and learn their processes and systems. And maybe you just do it one or two nights a week or Sundays or something. But I think giving out your time for that experience is definitely very valuable. And then who knows, they will probably pay you a fee or part of the assignment fee if you bring the deal or something like that. So look out for those opportunities too with other investors, Tony, who is our rookie rockstar of the week?

Tony Robinson:
Today’s rookie rockstar is Dalton from PA, and for all of our rookies that are out there listening, if you would like a shout out on the Real Estate Rookie podcast, be sure to get active in the Real Estate Rookie Facebook group. Be sure to get active on the Bigger Pockets forums. That’s where we’re pulling all these folks from. Or give Ashley and I a shout out on Instagram. She’s at WealthFromRentals, I’m at TonyJRobinson. If we find some good stories we’ll be sure to share it on the podcast as well.
But anyway, Dalton from PA, this one’s really cool. Just got the appraisal back on my first mini BRRRR and the purchase price was 62,500. Rehab was 3,000. So they’re all in for just a little over $65,000. The appraisal came in at $107,000 on this property. So they were able to cash out refi at $80,250, which means they pulled out $17,750 more than what they put into it. So, awesome, awesome. First BRRRR, Dalton, and excited to see what comes next for you guys.

Ashley Kehr:
So great. Aaron, thank you so much for joining us today. Can you let everyone know where they can reach out to you and find out some more information?

Aaron Latal:
Yeah, you can catch me on Bigger Pockets for sure, or Instagram or TikTok. Instagram is ToppDoggEnterprises, T-O double P, D-O double G Enterprises. And TikTok is T-O double P, D-O double G R-E-I, Real Estate Investing.

Tony Robinson:
Dude, you’re giving the Snoop Dogg run for his money right now, man. The TO double P, D-O double G. I love it.

Aaron Latal:
I started an LLC to get my first rental property and I was like, “I don’t know what to make it.” And I was a DJ in college and I was Topp Dogg, so it just made sense.

Tony Robinson:
There you go, man.

Ashley Kehr:
On your TikTok, are we going to see some DJ videos down there?

Aaron Latal:
It’s a mix right now of videos of me being really goofy, maybe too goofy. Really pushing the line and then also real estate stuff, walking through houses, trying to give tips on looking at houses.

Ashley Kehr:
Oh cool, we’ll have to check that out. Well, thank you so much, Aaron. Everybody, thank you for listening to this week’s Real Estate Rookie podcast, and I hope everybody has a great new year’s. This is our last guest episode of the year. And Tony, I think that going into the new year, I’m going to change out the outro, because we always say, this is Ashley at Wealth From Rentals. And this is Tony at TonyJRobinson on Instagram, but I feel like we need something new and fresh. So start thinking about it. Maybe an inspirational quote or a movie quote at the end of each episode.

Tony Robinson:
It’s all Tommy Boy. All Tommy Boy one liners is the end of each episode.

Ashley Kehr:
For a whole year. Thank you guys so much for listening. Have a great new year and we will see you in 2022.

David:
Hey, everybody. It is David Greene here. As you all know, Brandon’s stepping away from the show at the end of the month. Now, we have some great co-hosts lined up in the New Year, and we also want to take this chance to get to know anyone else out there who’s interested in contributing their talent to the BiggerPockets Podcast Network. If you think that’s you, you can make a submission to our system at biggerpockets.com/talent. That’s biggerpockets.com/talent. You’ll see a few questions and a place to submit a video reel of yourself. Again, that’s biggerpockets.com/talent if you’d like to lend your voice to the growing BiggerPockets Podcast Network.

Brandon:
This is the BiggerPockets Podcast show 548.

Tyler:
Just shrugging off the disasters, the failures, the times you were screwed by other people, and just focusing, very clearly focusing on how to get back on top, how to get back in the game. That has been our key to success is that just dedication of saying, “What is it going to take?” And being willing to do whatever that is to get back, instead of looking in your rearview mirror and being bitter at whatever just happened.

Brandon:
What’s going, everyone? It’s Brandon Turner host of the BiggerPockets Podcast, the show where we teach people that real estate investing can change your life forever. And you’re going to hear a lot about how real estate changed two awesome buddies of mine, their life forever on today’s show and we’re going to get into a bunch of cool stuff.

Brandon:
But first let me bring in my friend, my bestie, and the future full host of the BiggerPockets Podcast in the New Year, David Greene. David Greene, man, it is good once again to be joining you for of our last together shows for a while.

David:
It’s good to be joining anyone that says what you just said about me. I mean, you could do that all that you want. How do I hire a person like you to just go before me and announce me in that same way that you just did?

Brandon:
Well, let me just add to your ego a little bit. So as we jump on this call to talk a little bit ago, me and David to record this introduction, he was wearing a tank top because he was getting his official shirt on that he was wearing for this episode, the one you’re seeing right now. I made some joke about muscles and he flexed his arms. And I’m not kidding. I did not know you were that ripped, David Greene. I’m not even kidding, you guys, I wish I could have recorded it. The guy looks like the Incredible Hulk, in a good way, it was not so green. But man, your working out has made an impact, so good job, man.

David:
I appreciate it. I think I do a better job of hiding anything attractive about me than anybody else that’s out there. It is the best-kept secret in media, I promise you.

Brandon:
Mm-hmm (affirmative). Mm-hmm (affirmative). There you go. Well, if you want to see what I’m talking about, you have to watch the YouTube video this show. But anyway, we got to get on with this episode, we got a lot to cover today.

Brandon:
Like I said, today’s good buddies of mine, we got Mike and Tyler. They’re two awesome dudes that come out of the Portland area. Portland, Oregon, not Portland, Maine. Portland, Oregon area. When I talk to anybody who’s within 100 miles or 200 miles of Portland, they know these guys. They are a major player in that market, they do a lot of different types of real estate. We’re going to talk today about combining flips and rentals to maximize your growth. We’re going to talk about doing some seller financing, then something called land banking. We’re talking about how to vet somebody. In fact, they went through a really crazy, crazy experience of meeting each other in this crisis, being taken advantage of in this Ponzi scheme, and all that. Crazy story, all that, and more coming up.

Brandon:
But first, let’s get to today’s quick tip. All right, today’s quick tip is brought to you by David Greene because I didn’t think of one.

David:
Today’s quick tip is find your perfect partner. As Brandon just complimented my physique, which was very nice of him, he complements me in other ways, and we talk about that on the podcast all the time. Today’s guests complement each other and they talk about how they bring various skillsets into a partnership. So when you’re looking for a partner, a common mistake is that you find someone just like you that has all the same skills as you. And now you have two people who are fighting over the same jobs and avoiding the same jobs. You’re actually looking for the opposite. So to sum that up, look for someone that’s going in the same direction as you with the same values as you, but who has complementary skills than you.

Brandon:
Wow, man, that’s really good, that was good on the fly. Well, all right, well, let’s get on with this episode, and today is, if you’re watching this when it comes out, we’re Christmas Eve eve, right? So we are coming up on the Christmas holiday season. So merry Christmas, happy holidays. And as this greeting card that I bought online says, meowy Christmas. And yes, this is a picture of a cat in a sweater. So, David actually-

David:
It looks lot like the sweater that you bought when we went shopping.

Brandon:
It looks exactly-

David:
Doesn’t it?

Brandon:
Yeah, that’s funny. So I am actually going to… I have this card in my hand here, David. Funny enough, I was writing this card to you when we started when I realized, oh shoot, I’m supposed to be on a call with David. So this greeting card goes to you. So, man- [crosstalk 00:05:01]-

David:
That’s very sweet of you, however… And you told me about this card already, so you don’t think that I’m going to fall for it.

Brandon:
You’re going to fall for it to be great. It’s the greatest Christmas card in the history of mankind. I’m just going to say that one. So I’ll tell people what it is, so I probably won’t send it to each one of you. I found this on an Instagram ad and when you open it up, it plays this.

Brandon:
(Singing).

Brandon:
Can you hear that?

David:
Yes, we can.

David:
(Singing).

Brandon:
And then it doesn’t stop until the battery dies three hours later. You cannot shut off the sound of the meows. So, David, I’m looking forward to you-

David:
I think that’s hilarious.

Brandon:
Yeah, I want you to open that. Or I want you to give it to one of your assistants back here, “I got these cards in the mail for Christmas. Will you just open them all and put them in your office for a while?” Something like that.

David:
Exactly what I’m going to do.

Brandon:
Something like that. Yes, yes. It’s going to be great. Once you open it there’s no going back, it’s hours of meowing.

Brandon:
All right, man, let’s get on with today’s show. And now before we bring in Mike Nuss and Tyler Combs, two good friends of mine that are killing it, anything you want to say, David?

David:
Yeah. Just like your Christmas card, this podcast just won’t stop.

Brandon:
I thought you were going to say it’s like meowy good or something, I don’t know. All right, meow, let’s get to the episode.

Brandon:
Mike and… I forget your name. Tyler? Tyler, welcome to the… I’m just kidding, guys. Welcome to the show. How you guys doing?

Tyler:
We’re doing great.

Brandon:
Man, it is so good to have you. It’s been a year since we’ve been friends and we’ve talked 1,000 times about making this day a reality and it has finally come true, so I’m very excited to introduce you to the world. Everybody of the world of Tyler and Mike, and should be a good time today, so. And in fact, I don’t even know your guys’ story of how you met so I’m going to dig into that today. But first, let’s get your individual stories. Why don’t we start with, eenie meenie miney mo, we’ll go with Mike. Mike, tell us about yourself. What do you do, and what were you doing before partnering with this other guy?

Mike:
Yeah. I was a real estate appraiser so that’s how I got into the world of real estate. I was actually in high school when I started. So, I was an athlete, hated school, wasn’t good enough to get a scholarship or make anything of that. And I got a job opportunity to become a real estate appraiser. Job shadowed spring break of my senior year and then started full-time after that.

Mike:
So, I did that for about five years before I bought my first piece of real estate. I’m a slow learner, not really the most aware person. I’ve since learned that awareness is a superpower, it took me about 20 years to understand that. So that was back in 1997 so I’ve spent more than half my life in real estate now. Bought a handful of properties prior to the big crash, learned some lessons, 2009 wasted 26 grand on a rich dad, poor dad real estate package, which got me into the investing world. I met Tyler in 2010 on Craigslist of all places.

Brandon:
No way.

Tyler:
The personal section.

Brandon:
Yeah. I was going to say-

David:
How many relationships have started there?

Brandon:
Yes. All right, so let’s go to Tyler real quick. Tyler, what were you doing before meeting Mike?

Tyler:
Oh man, I was a youth pastor, a missionary, and then I finally… What was I doing when I met Mike? I was working in some tech job, working from home and I had a lot of free time and so I started flipping houses on a whim right after the market crashed 2009. Everyone seemed to be running away so I jumped in and started buying up REOs. And I found all of my contractors, everything off of Craigslist, which at first I was really proud of, and then I discovered they were all stealing from me, so I had to learn some hard lessons.

Brandon:
The only contractor who has ever directly stole from me, I gave him $5,000 for windows, he pocketed it and never showed up again, came from Craigslist. So it’s a-

Tyler:
There you go.

Brandon:
… it’s a pattern. So then you decided to meet your partner on Craigslist as well. So tell us how did that happen? How’d that go down?

Tyler:
Yeah. I bought an REO that ended up being a… I think it was a three-year legal battle with the city over a flood plain issue and some other stuff. So, I eventually did what every good flipper would do and tried to pawn it off on someone else. So I put it up on Craigslist as a flip opportunity, put all the keywords, motivated seller, willing to owner carry, just everything. So I actually got to know a lot of the scrappy flippers in the area that were combing through Craigslist, and Mike was one of them that called on it. And we had a brief conversation, he asked me all the best questions, and then he wisely passed on the opportunity.

Brandon:
That makes sense. Mike, why’d you pass on the opportunity?

Mike:
Well, I had a business partner at the time and I don’t know that I can say on this podcast the words that came out of my mouth when I hung up the phone. But I felt for him, I had a little appreciation for the struggle he was going through. And yeah, eventually we actually ended up getting out of that project together [crosstalk 00:10:21]-

Brandon:
Oh, I was going to ask what was the end of that one?

Tyler:
Ended up having to sell it at a loss. I ended up having… I resolved it with the city and was able to finish the remodel and sell to somebody. But after all the holding costs, and I had some pretty interesting squatter issues while I owned it over the years, so at the end of the day, it was a pretty significant loss. But we were moving and shaking and with all the other stuff we had going on by that time, so it was a loss we could stomach.

Brandon:
That makes sense. All right, so you found each other and let’s get to… so you find each other, what happened next? How did you end up coming together to decide to work together?

Mike:
Yeah, that gets into [inaudible 00:11:09]. We had met-

Tyler:
Thanks for bringing up that PTSD, Brandon.

Brandon:
Yeah, yeah, no problem.

David:
It’s what we do here.

Mike:
Yeah. So when I bought that real estate package, I cashed out a 401(k) to do that, and like I said I had learned some lessons in the great crash, so I had no money, no credit. What do people that want to do real estate full time do with no money, no credit? They try to become wholesalers. So in 2010, wholesaling was easy to find deals, tough to wholesale. Ended up finding two guys that I was able to wholesale a couple deals to. They saw value in me and said, “Hey, we’re putting together this Ponzi scheme,” for lack of a better term, “We want you to bring all your deals to us.” And they had this little event they’re putting together, I show up at this event, there’s this AV guy named Tyler. And I’m like, “Tyler Combs? Tyler Combs? I recognize that name. Oh, you’re the guy I talked to on Craigslist,” and met him in person at that point.

Mike:
They had conned him into doing the other end of that Ponzi scheme. So I was finding, negotiating, evaluating, and getting all the deals, bringing them to the Ponzi scheme. And then Tyler was going and raising capital to fund the Ponzi scheme. And then these two guys had nice suits, nice cars, boat, nice house. They just essentially made sure there was never any profit to share. And so after dealing with that for about a year, we split off to then form our own partnership and started that partnership with a lot of losses stacked together that we had to build [crosstalk 00:12:43]-

Brandon:
Individual losses that you just brought to the partnership?

Tyler:
Not only that but investor losses that we wanted to make right on. So people that had lent us money that these other guys had stolen from. Took us several years to dig out of the hole and make everyone whole again.

Brandon:
What exactly was the ruse, or the scam, or the scheme? What were they doing? Just taking investor money and then just living on it, was that essentially-

Tyler:
I mean, it was a mixture of mismanagement and then just overspending, taking funds that were meant for projects, and buying boats and cars. And then their books were a mess, but when we dug into them, found out they were just mismanaging a lot of money and then just… It wasn’t all stolen, a lot of it was just poorly managed construction projects.

Brandon:
Yeah, so for those-

David:
Let me jump in real fast.

Brandon:
Go ahead, go ahead.

David:
I’m going to ask you if someone is listening and they’re trying to vet someone who’s raising money because there’s a ton of that out there-

Brandon:
Yeah, that’s exactly where I was going.

David:
… right now, what are some things that they should look for that might indicate this would be a bad person to invest with?

Tyler:
That’s a great question. I’d say that, one, you have to get references from people that have done, actually finished deals. I think that all the references that we got from these guys were from people that were mid-project. So, no completed deals, no one had actually gotten their money back. So I think knowing how old these references are and weighting the references that have been working for say years with the person, those are so much more valuable than someone who just started working with that person.

David:
That’s a great point. So you just want references you can contact who has been paid and they can testify to the experience they had?

Tyler:
Yeah. And then you can audit their books. You can ask for P&Ls of the last several projects, you can ask for balance sheets. A lot of people can be really good at hiding their sins in QuickBooks, but a lot of people are surprisingly dumb at the accounting, and if you have any accounting background, you can sniff out that stuff. If I knew what I knew now, I’d be able to take one look at their books and call a spade a spade.

Brandon:
By the way, maybe we should establish right now. Where were you guys at when all this happened? What city?

Tyler:
Portland, Oregon.

Brandon:
Portland, Oregon. Portland, Oregon, the weirdest city in America, I think. But you got good donuts there.

Tyler:
We’ll take it.

Brandon:
You have a good bookstore and you got good donuts, you have a few good things going for you. I actually love Portland. But today, you guys have quite the empire. I mean, a lot of people, even just earlier, I was talking to my buddy, Gene who’s out here who’s from the Salem area, but he is staying out here in Hawaii with me right now. And I mentioned something about I’m doing an interview today, and I think I mentioned, Mike, your name. And he’s like, “Oh, yeah. Yeah, I just talked to him on the phone a while ago.” He’s the guy you talk to when you have a problem or something like that. You just have this reputation, you guys have a name and a reputation around.

Brandon:
So, I want to get through… Here you are starting, rocky, coming together, trying to form this partnership, to now you’re a player in the Portland space. So walk us through what’s your portfolio, or what’s your business like today? And then we’ll go back and fill in all the gaps.

Mike:
Yeah. So we have a development company that does short-term projects. We have various LLCs that holds a bunch of rentals. We have a property management company, and we have the brokerage. And so we started as investors, and just by taking incremental steps consistently over a long period of time and the compound effect through that, we slowly built a rental portfolio which allowed us to then take control of our own management. By having enough properties there we could afford our own manager. We sold enough real estate, Tyler had a broker’s license, it made sense for us to start our own brokerage. And so then it just snowballs from there, right? And we have a big enough name, enough marketing out there that we get a lot of real estate opportunities. And then we just fit those opportunities into the various buckets that we have based on how we set everything [crosstalk 00:17:04]-

David:
Okay. And what’s the portfolio like? Is it units, or multifamily, single-family, lot of houses, what’s the makeup of it today?

Tyler:
All right. So I’d say our rule of thumb has been to flip the single-family and hold the multifamily. So, almost all of our rental portfolio is small multifamily or a few single families that are tied to other multifamily acquisitions.

Brandon:
All right. So total then how many units does that makeup between you guys now?

Mike:
Yeah, somewhere in the 80 to 85 range. Most of that’s small apartments, we do have some commercial projects, and then a couple single families for land banking purposes.

Brandon:
Land banking purposes. All right, we got to cover that. What is land banking purposes?

Mike:
Yeah. It’s something with zoning that allows a future higher and better use with a building on it that creates an income stream to pay for itself now, right? So it doesn’t have a lot of value right now, doesn’t provide a lot of cash flow, but sometime in the future when either zoning’s going to change or when neighborhood’s going to be ready to be developed, then we can put it to a higher and better use.

Brandon:
That’s smart. So you guys are looking down the road saying, “Hey, 10 years from now this might be a really good spot to put up a parking lot,” or I don’t know, “Sell storage or apartment complex, but right now it’s only single-family houses. We’re going to keep it, hang onto it for the big picture.” Is that right?

Mike:
Exactly.

Brandon:
Ah, that’s very cool.

Tyler:
Yeah, an example of that is our office building is on a zoning where we could build a high-rise structure on it. So we just put as little amount of money as we can into the office, we bought up several things around that were adjacent to it. And later down the road when it makes sense for us, we can build whatever we want there.

Brandon:
Now, what would be the plan? How high is a highrise you want to build?

Mike:
We can go 105 feet, so 9 to 10 stories.

Brandon:
All right. Have you ever built that big yet in the development side?

Tyler:
Not yet.

Mike:
No.

Brandon:
Well, let’s go back and fill in the blanks a little bit. Here you are at the beginning, struggling, not sure where you’re headed… debt, I guess is the best way to say it. And then today you’re this force in Portland. So how did you get there? Walk us through some of your journey.

Mike:
Yeah. I think first off is it’s easier to move forward than it is to clean issues up, right? So we knew we had debts to pay off, we knew we had investors to pay off. So immediately, what do you do? You go find some short-term flips, right? So we got some flip projects so that way we could create some lump sums of cash, pay for our livelihoods, pay some investors back and then start stacking those wins.

Mike:
The way we started building our rental portfolios is through seller financing. So we learned some really, really good seller financing techniques that help us start building a portfolio that then created a chessboard. So I think if you look at real estate, the idea of getting a chessboard, you have some small projects that are your pawns, you have some rooks, some knights, some bishops, some kings and queens, and you build out, get pieces on the board, so you can move them around to fit your ultimate goals. We worked ourselves out of it, it’s probably two years of solid just flipping to work ourselves out of the hole.

Brandon:
Yeah. All right, that makes sense. So then let’s talk about your individual roles in the partnership. What do you focus on, Mike? What do you focus on, Tyler?

Tyler:
Well, so Mike does the acquisitions side of things. So he stirs up the chaos, finds the deals, helps negotiate it with our team, and then he hands off the project. We’re working out our project management systems, but we recently switched where he hands off that project and I manage our team that is going to be doing the actual flip or the construction. And then I handle the dispensation, the selling of the flip, and then he handles the… if we turn it into a rental, he oversees our property management company.

Brandon:
Okay. All right. And how are you finding deals today?

Mike:
Yeah, we have various sources. Deal flow is a… the best analogy I’ve heard is it’s like a bicycle wheel, right? You got lots of different spokes. So we do direct to seller, we do Facebook ads, we do cold calling, we do a lot of referrals, pocket listings. Repeat sellers is always a great example, bird dogs, wholesalers. And so you have to have lots of different spokes on the wheel to create a good enough volume. Because at the end of the day, if you have a good enough volume, it’s really easy to say no. And the ability to say no to a lot of deals ensures that what you’re doing is ultimately going to stay profitable. And so that’s our ethos on how to do deal acquisition.

Brandon:
All right. What’s your favorite?

Mike:
I like direct [crosstalk 00:22:08]-

Tyler:
Favorite type of acquisition?

Brandon:
Yeah. Acquisition process. Is it the Facebook, the direct… I know you’re doing a lot of it, but there’s one that you’re like, “Now, this thing we’re really, really good at.” Or is it all pretty whatever comes in, comes in.

Tyler:
I think we’ve gotten really good at sniffing out the seller finance deals in a way that isn’t… that when we can smell a deal that it’s beneficial to the seller, there’s a lot of motivation for them to do a seller finance deal, and it works for our goals. We can smell that pretty fast, we know how to market to that ideal seller that has a lot of options. And then when they start the conversation and they have a lot of experience in real estate and they’re pretty savvy, then it’s just a really fun transaction all the way through, everyone wins, and there’s not a ton of education or expectations that have to be realigned. I think that’s probably my favorite where you get the residual… the exchange where everyone is winning, and then you’re getting the long-term benefits and the partnership that extends. So your energy’s spent upfront, extends years into the future because of the seller finance.

Brandon:
Yeah. Seller financing, that’s something I really want to dig in with you guys a little bit on because that’s something that not… we don’t talk a lot about on the show but can be a really powerful tool. So maybe, Mike, I’ll start with you, what is seller financing? And then how does somebody start using it?

Mike:
Yeah, well, in the IRS code, it’s an installment sale, right? So you’re making a down payment and then you’re structuring installments, whether that’s monthly for a long period of time, whether it’s monthly for a short period of time, and a balloon payment at the end, but it’s just in installments to control real estate. And the key to seller financing is what makes sense from a seller perspective. I think a lot of times people say, “Well, I need this property, I need a seller financing.” And, well, doesn’t make sense for the seller.

Mike:
So it starts with the seller, if it aligns with them, then you find out what installments are going to make their life flow in the way that is going to meet their goals, and what can the property afford to make it successful as well. So simple as that, down payment, interest rate, monthly payments. Monthly payments can be interest only, they can be all principal, they can be negative amortization. They can be whatever you want it to be. So that’s the beauty of seller financing is it does not fit in a box. You can do exactly what you want to do based on what needs to happen.

David:
I think that’s a great point to highlight. I hear a lot of people will say, “How do I get the seller to sell it to me in seller finance?” And the answer is you don’t, if they’re not motivated to and that doesn’t work for them, that’s not the right strategy, but it often gets portrayed to people who don’t have money. I mean, if you think about when someone’s targeting an investor to sell a course to them or a class or something, they’re looking for a person who has some form of vulnerability. Bad credit, no money, that’s why everyone gets into wholesaling, right? Like you were saying earlier and seller financing is this magical pill that will work if nothing is right.

David:
The problem is you have to dig to find usually an off-market deal because realtors aren’t going to be listing a house if it’s going to be selling with seller financing very often. That person is selling their house with a realtor because they want a convenient transaction where they’re going to go use the money for something else. So a great piece of advice you just gave is that you got to have a motivated seller and you got to work to find a motivated seller. So can you guys share any maybe… I don’t want to say red flags, but something that pops up that makes you go, “Ooh, that person might be someone who’s interested in seller financing,” that people can look for when they propose that solution?

Tyler:
Yeah. We call them green lights.

David:
Better than a red flag, there we go.

Tyler:
Yeah, we call them green lights and they are… It’s the opposite of what you just said is the audience for the predatory real estate seminar. The seminar attendee is someone without options, right? They have poor credit. The real estate seller that we’re looking for if we’re going to do seller finance, is someone with options. They have the option to sell with a realtor if they want to, they have the option to keep renting it, they have the option to 1031 exchange if they want to. But they have all these options, a lot of times they’re overwhelmed by those options, and we have found our niche in the ability to go in and say, “All right, let’s lay all your options out on the table and let’s analyze them.” We’ll give them the numbers for every scenario, and a lot of times being able to defer their tax gains over time through an installment sale is the one that meets their needs the best.

David:
So can you cover that a little bit? What does that look like when somebody defers their tax gains by selling with seller financing?

Tyler:
The simplest way to put it is that they don’t have to pay taxes until they take the money. So if you delay the time that they have to take their money, then they’re only paying on what they get. And so a lot of times, if they’re really concerned about their tax hit, they want a very small down payment because then if they receive that money, they have to pay taxes on it. So they want a small down payment and they want a small installment sale payment. So a lot of times those payments are interest only. They’re not even amortized because they want to keep that payment as small as possible, and so those balloons at the backend are very large when due in paying the note, but it allows us the cash flow in the meantime pretty easily.

David:
It sounds like the way that you’re describing this, if I understand it right, is if I sell my house and you pay me all the money upfront, usually, traditionally you get a loan, you use the money from the loan plus or down payment to pay me, I pay capital gains on the full gain. But if I sell it to you with seller financing and I don’t get all that money upfront, I actually just collect a payment from you over time, I only pay taxes on the money that you are paying me. Is that correct?

Tyler:
Exactly.

Brandon:
So what type of person is doing something like that? Is this an experienced real estate investor or is this a new real estate investor or is just a regular homeowner?

Tyler:
I’ll let Mike speak to that.

Mike:
It’s the experienced real estate owner. What we’ve found in our life of doing a lot of it is they’ve owned real estate for a long period of time, they have significant capital gains, they don’t need the cash, they like the income stream, they have below-market rents, they have deferred maintenance, they don’t want to deal with realtors. So they have a mindset of costs and expenses they want to avoid, and a lot of times they want to pass on a legacy. They see themselves in you.

Mike:
And so then you just put all that together. Well, you have low market rents, you can increase the income stream, right? So you can match their net operating income that they’re currently getting, increase the income stream and now you have cash flow. The fact that they don’t need money, they don’t need a large down payment, they’re used to cash flow, they don’t like management. So you solve a lot of problems by just saying, “Hey, here’s a little bit of money we’re going to take into control of your property. We’re going to improve that property and improve the income stream, and we’ll all benefit from that elbow grease, so to speak.”

Brandon:
Yeah, I like this concept of seller financing in that, again, it’s not taking advantage of people, it’s not saying, “Hey, I’m going to trick you into it.” I know a number of investors, in fact, my mentor all growing up or getting into real estate, growing up as a real estate investor, Kyle that was always his plan. He would always tell me that, he’s like, “Yeah, my plan is just acquire a bunch and then pay them off and then sell them off on seller financing when I get older, and that just provides me enough income to get through life.” And I always thought that was cool, and he’s actually doing it right now. In fact, my in-laws bought a property from him on seller finance, and then he had it paid off and he’s just going with it.

Brandon:
Now, do you guys ever do anything with people who don’t want to pay them off? Do you ever do any subject to or lease option stuff? Or how do you get around the due-on-sale clause if they have a loan?

Mike:
Yeah, subject to for us, we’ve done and we typically just do that on short-term projects so we don’t take on the risk of the due-on-sale clause. But yeah, lease option’s a great way to get around that. Or you have the ability to pay the loan off if it’s called, right? So we’ve done that where it is set up as seller financing, there is a loan on it, it is disclosed, and then we just have a clause in our promissory note that should the loan get called we will pay that loan off. So you just plan ahead and accordingly for that, and don’t put yourself in a position where if that loan gets called, you’re going to have to take a loss or you’re going to have to struggle in order to get that loan paid on.

David:
Yeah, that makes sense.

Tyler:
But the vast majority of the seller financing we do is definitely free and clear. So there’s no loan on the property to begin with and that makes it real simple. Or if there is a small loan balance, a lot of times we’ll just make that the down payment. So if they owe a certain percentage of the property and say it’s 20 or 30%, we’ll just pay them that.

David:
Well, let me ask you this then. If your ideal seller finance-type person is an experienced investor, how does that change your marketing? I’m assuming you’re not writing a…, I mean, maybe you are, but I’m assuming it’s not a yellow letter with misspelled words like “I buy house, your house for cash money”, it’s probably not something like that. So what are you doing to attract people who would be willing to do seller financing for you?

Tyler:
We went back and forth on this as to how personal do we want to make it versus professional, and as we got more experience and had a legit company with acquisitions guys and realtors, we decided to go the professional route. And especially because we started targeting larger multifamily projects. So we have our logo and our branding on there, and we talk about being local guys that are building a portfolio in Portland, and we talk about the experience of how we’ve helped people like that owner. That we’ve helped people in their position save money, or whatever the goal is, whatever the specific marketing campaign is, we talk about how we have helped people like them accomplish their goals.

David:
Yeah, that’s cool.

Brandon:
That’s cool, yeah. I feel like this is where having… In the book, The Multifamily Millionaire which we just released at BiggerPockets, I talked a lot about this thing called the crystal clear criteria, which is this is the property type, this is the location, this is the strategy, this is what I’m doing, it’s very particular what I’m doing. And when an investor knows that, one of the reasons that that’s so important is it gives you the ability to then cater your marketing toward that. Look, let’s say you’re an investor and you’re like, “I’m going to do seller financing. That’s going to be a big piece of what I do.” Not that it’s all you do, but let’s just say it was a big piece of what you want to do.

Brandon:
Well, great, then you know that your ideal seller is somebody who has owned a property for maybe over 10 years or 20 years. And okay, great, now you can target your marketing just to those people. You can go send direct mail to that type of person. And the letter will look like something that’ll appeal to that type of person. Versus if you have no strategy or no plan, you’re just like, “I’ll buy anything, I just want a good deal,” then you’re just sending a general message to everyone and it doesn’t appeal to anybody. And so instead, I just like that concept of somebody can pull that out of this episode, pull something from this episode, be it that. Know what you’re going after, and then you can specifically target that thing.

Brandon:
And then you can broaden what you go after, go after numerous things, but then have a plan for each of those things. Because the thing that’s going to attract a 65-year-old seller, a real estate investor who’s been in the game for 40 years, is very different than what’s going to motivate the 25-year-old kid who got in over his head in buying his first property and now wants to move to Vegas and be a showgirl, or something, I don’t know. It’s a different type of marketing.

Brandon:
All right, so that’s cool. So, the seller financing is cool. What other stuff are you guys doing for financing-wise? Let’s say you can’t go seller financing, are you doing… I mean, do you just save up money for down payments? Are you doing any kind of syndication stuff, or raising money, or what’s that look like?

Tyler:
Yeah, we do a lot of private financing. We haven’t done anything, syndication is for like a pooling money standpoint. We do have some capital partnerships where we’re bringing all the real estate expertise, our partners are bringing capital, and we form an LLC and we have our rules in that. But it’s your traditional sources. Private capital, hard money for our short-term projects. We will get bank loans for BRRRRs on the backend. We also like to move our seller financing around. So, one thing that we learned early on is financing and real estate are two separate things. And a lot of times the financing may be a long-term agreement or long-term commitment, but the real estate is not a long-term hold. And so you can sell real estate and keep the financing and use it to buy other real estate. Or you can refinance real estate, keep that financing and buy other real estate. So we’ve used seller financing as a perpetual machine to help us build out our portfolio as well.

David:
Are you referring to cross-collateralizing, the financing you’re doing?

Tyler:
No. Re-collateralizing, substitution of collateral. I actually heard this… Full disclosure, I haven’t heard a lot of your podcasting [crosstalk 00:35:32]-

Brandon:
What?

Tyler:
But you interviewed some guys… I know, I know, blasphemy. You interviewed a guy, I think out of Colorado, he called it walking the mortgage.

Brandon:
Yeah. I remember that, but I don’t remember who that was.

Tyler:
And it’s just that. Yep. Yeah, neither do I. But so again, you created a relationship. What does a seller financer want? At first, they’re intimate with the real estate, they know of the real estate, that real estate makes them comfortable. But on a higher level, what they want is they want trust, they want loyalty, they want a rate of return, they want customer service and they ultimately want collateral. The collateral doesn’t necessarily need to be the real estate that you buy. And so if you’re doing a real estate transaction, whether it’s a sale or a refinance, you have cash coming into escrow, but you already have [inaudible 00:36:22] that doesn’t need to be paid off. So then you can take that note that doesn’t get paid off and the cash that would’ve paid off that note to then buy another piece of real estate, refinance another piece of real estate just by re-collateralizing the note and keeping the cash. Or giving the cash to the seller or giving it to a lender.

Brandon:
Yeah. Because this is such a powerful concept maybe can you wrap it into a story, whether it’s a real one or example of House A, House B, how would that work?

Tyler:
Yeah, yeah. So this is a really good story for you. So I got a call from Bob, Bob is amazing, but I remember Saturday, I was washing the dishes and the phone call. I know it’s piece of marketing when the phone comes in, so I’m all prepared for it. And his first words were, “Do you need to pay all cash?” That’s the magic phone call everyone wants. And Bob knew he didn’t want cash, he wanted $5,000 down. The problem was, was the piece of real estate he owned was a piece of garbage. It was in a part of town that had a high tax ratio, it needed a lot of renovation, it wouldn’t have provided any cash flow at the end of the day, but we needed to put $100,000 into it just to make it habitable.

Tyler:
And so what we did is we set up seller financing on that project, and he knew all along that we were going to sell the property, that we were going to collateralize him on that property to begin with, and then six months later, we were going to give him different collateral. Now, when we bought the property, we didn’t know what that collateral was going to be. We just knew that we always have opportunities, we would find that piece of real estate at the end of the day.

Tyler:
And so we bought the property five grand down, put like a hundred into it. We sold it, and when we were in escrow to sell it, we were then in escrow to buy something else, right? So we had a cash-out, a cash transaction on the buy side, and we had a sale on the front side. So as that sale came in, we owed Bob $220,000, we needed to buy a property for $220,000. So instead of paying Bob off when we sold the property, we just took Bob’s $220,000 and gave it to the other seller on the buy-side of the acquisition. And so we just used Bob’s financing and liquidated that other piece of real estate.

Brandon:
All right. All right, that makes a lot of sense. And it makes sense too because Bob trusts you, he likes you, he likes the payment, he likes all that. Basically, he just becomes just a private lender, long-term for that stuff so, that’s very cool.

Tyler:
A good chunk of our private lending pool started out as sellers.

Brandon:
Yeah. Shifting gears here a little bit, but what’s the hardest part, and what’s the best part of flipping houses? I know you guys do a lot of flips, what do you struggle with? And what do you find you just like “oh yeah, we getting flow, this is easy, we’re awesome at it”?

Tyler:
Man, I mean, the best part is when you underestimate every anything, right? You underestimate how much that neighborhood’s going to appreciate, you underestimate how hot the market’s going to be, and you underestimate how long it’s going to take you to the remodel. Now, most of us that have done any flipping know that it’s not super common for you to underestimate all that stuff, so it could really suck when you don’t. The thing that sucks the worst for us has been when the construction budget just… something gets discovered or you completely miss stuff that just blows the construction budget out of the water. That’s probably the most painful. We’re really good at knowing our numbers when we go into a project but those surprises can sting.

Brandon:
Mm-hmm (affirmative). Yeah, that makes sense. All right, what about what makes you guys each feel alive in your business? What’s your “I like this, this is my piece of the business, it’s what I love to do”? We’ll start with you, Mike.

Mike:
At this point in the career, what I really like is I like seeing other people win, and new investors get traction in their careers. One example is, the majority of our staff have all bought a piece of real estate. One staff member, in particular, has now bought three pieces of real estate over the past 18 months, every one has been a successful BRRRR. One of them was seller financing that they rolled into another acquisition. They have no money out of pocket, in fact, money in their pocket after successfully completing all those projects. So I get more appreciation seeing someone get their first deal than I do from us getting our next deal.

Brandon:
Mm-hmm (affirmative). How about you, Tyler?

Tyler:
I’m a sucker for creativity, and that’s been something that’s been a key to our success is how crazy creative can we get on the deal structure. But it’s also been our kryptonite because sometimes we over-complicate things. Because we have all these tools over that we’ve mastered over the years, tools of how to do deals in different ways, different ways to finance it, different ways to structure the terms, that sometimes we can kind of get overly complicated. So I’d say that’s both probably my favorite thing, as well as the thing that gets me into trouble the most is getting too creative because I didn’t used to think that was a thing, but it’s definitely a thing.

David:
Well, we see that with house flippers. The boring ones tend to do the best, they just use the same materials. They don’t have surprises. It’s when you start trying to get creative, that mistakes tend to happen. So I definitely think there’s a part of that in business. Gary Keller had a quote that was really good for real estate agents where it was something along the lines of “we get bored of doing what works so we start doing what doesn’t work and trying to make it work”. And that’s definitely like a… There’s a fatigue in business that when you hit a rhythm and you just keep doing the same thing, it gets boring and you want to try new stuff, but that’s often the death blow for your business. So with you two each specifically, tell me what is in your future? Where are you two headed?

Tyler:
Where am I headed next? We just did some restructuring where we got rid of a lot of distractions in our business. It was painful, we had to cut some overhead and cut some departments completely that… Just really focus. And so I’m really excited about diving in and becoming masters of the investing that we do, and trying to take a break from the shiny object syndrome that we’ve had for so long as entrepreneurs. And Brandon has hit it home many a time about going a mile deep instead of a mile wide, and last time we had drinks with Brandon, he asked us some pointed questions about that as well and so we finally pulled the trigger and cut out a bunch of extra things in our business. And so now I’m really excited about the amount of mastery that we can achieve with the extra focus.

Brandon:
Well, you probably shouldn’t have… I was pretty drunk that night, so I don’t know what I said. “No, we based our whole strategy off it. I fired 40 people.”

David:
How much money does it cost to get drunk at [Monkeypod 00:43:41]? Is that a $900 night with those [crosstalk 00:43:44]-

Brandon:
One drink does it. One Mai Tai, that’s all it takes.

Tyler:
It depends on how much of a lightweight you are, and I think Brandon is pretty light.

Brandon:
I’m pretty light. Yeah, I’m all 112 pounds of me. Mike, where are you headed in the future? Where do you see the business headed?

Mike:
Yeah, I’m real excited from an affordability standpoint, right? So affordability is an issue. Any large MSA, especially in Portland, we have affordability concerns. So we have a couple things in the works. We’ve taken an advantage of a new zoning program in Portland, which allows you to build more than one unit on a single-family lot. So we can have a house with two ADUs, we can have a duplex with an ADU. We can have three-plexes or fourplexes, or we can do cottage clusters and get up to eight units. On city lots, right? So we permit density at the city level and then we can condo-convert at the state level to then set up… to divide up ownership and sell. And so what this allows us to do is lower our land cost basis to then bring new construction at a price point that’s just almost nearly impossible to get in really high demand portions of Portland.

Mike:
And then on top of that, we bought a piece of property that we can eventually build a 60 unit affordable housing apartment [inaudible 00:45:03] as well. So I’m excited to start adding, changing the value we add to our community here locally.

Brandon:
Yeah, I love that. I love the idea when you’re in a city, yeah, where there’s major problems like Portland with affordability when you can become a solution for that. I just think there’s a lot of power there. So, right on, man.

Brandon:
Well, with that said, we’re going to move on toward the end of the show, I think we’re 40 minutes into this thing so gets us closer to the end here. The next is our thing (singing).

Brandon:
All right, this is the famous four. It’s the same four questions we ask every guest every week, so let’s throw them at you guys each. So why don’t we start, we’ll start with Tyler each time and then move to Mike. So Tyler, first question for you. Favorite all-time or current favorite real estate-related book.

Tyler:
My favorite and I will call this a real estate-related book, Crucial Conversations, just because it’s so applicable in both the way we run our business and the conversations we have with sellers, with other agents, with everyone involved in the transaction. I read it again recently, it’s really helped me revisit the way I structure the conversations I’ve been having.

Brandon:
All right. What about you, Mike?

Mike:
I’m going to go with my favorite two authors, and I’m not just kissing ass, but Brian Murray and Brandon Turner are amazing authors when it comes to their level of experience and the ability to put it on paper that allows people to implement and take action in their lives. When I read books, I rate them based on the ease to implementation, and I think Multifamily Millionaire hits that in spades.

Brandon:
Oh, thanks, man. You might be the first Multifamily Millionaire mentioner on the show, I’m not sure. Well, thank you.

Mike:
It’s a new book, give it time.

Brandon:
Mm-hmm (affirmative). Yeah, we’ll give it time. All right, number two, David?

David:
What are your favorite business books?

Tyler:
I’ll let Mike go.

Mike:
I really like Compound Effect, I think that’s a great one. I’m sure a lot of people mention that too, but I’m a big fan of Benjamin Hardy. Personality Isn’t Permanent, Gap Versus Gain is the latest one, Gap and The Gain. To me, who you are as a person is going to speak volumes to who you are as a businessman or a business leader. And so your personality or how you look at things, how you take on challenges in life are extremely important, so I look more on that of who am I? Because at the end of the day, that relates too much to business.

Brandon:
All right. Yeah, The Gap and The Gain. I’m just about finished with that, I got a few minutes left in the audiobook, but that is a phenomenal book. I really, really enjoy that a lot. All right, Tyler, anything you want to add to that? Business books that you’re loving?

Tyler:
My friend, Ashley just recommended a book recently called Thinking in Bets that has been super… brought some new energy into the way I process my business decisions. Because in our relationship with our partnership, I would definitely be the over-thinker, the one wants to slow down and have a plan and would be the one that would suffer from analysis paralysis. So have a book like Thinking in Bets that teaches you how to make decisions faster with less information, it was really helpful for me.

Brandon:
Yeah, we had Annie Duke, right? She was on our podcast a long time… I wasn’t on that episode. But yeah, Josh interviewed her with, I think, Scott back years ago.

David:
It was Scott and I.

Brandon:
Oh, was it you and Scott? Okay.

David:
All right. Next question, what are some of your hobbies?

Mike:
Yeah, I like to golf. I learned how to wake surf this past summer. I do a lot of hiking, a lot of trail running. So typically for me, it’s getting outside.

David:
And Tyler?

Tyler:
For me it’s, I have two little girls that love the outdoors, or at least they don’t have any other choice, they’re going to learn to love them. I love the snowboard, mountain bike, paddleboard, and we’ve just been doing a ton of camping and road-tripping this summer, and going to go into fall doing some backcountry stuff. So just getting outdoors and playing will be a lot of fun.

Brandon:
Awesome man. All right, well, last question from me and we’ll ask each of you this. What separates successful real estate investors from those who give up, fail, or never get started? Tyler, you want to start?

Tyler:
Sure. I mean, if I look back at all of our critical moments, it’s definitely that idea of just shrugging off the disasters, the failures, the times you were screwed by other people, and just focusing, very clearly focusing on how to get back on top, how to get back in the game. That has been our key to success is that just dedication of saying, “What is it going to take?” And being willing to do whatever that is to get back, instead of looking in your rearview mirror and being bitter at whatever just happened.

Brandon:
Mm-hmm (affirmative). Yeah, man. What about you?

Mike:
Yeah, I’d say for me, short-term memory, forgiveness, strong ego, not having to win. A great book actually is Infinite Leadership by Simon Sinek. Just having that mindset that keeping in motion… you don’t have to win the game, you just have to keep playing game. And that mindset really has done wonders for us.

Brandon:
Yeah, that’s awesome. That’s awesome. I’ve not read that one, but I started it. I read the first chapter then somehow set it down, I never picked it up again. But I need to because I take your recommendations seriously. So that’s said, guys, thank you very much, appreciate you guys. And yeah, it’s been a blast. So I’ll let David ask the final question.

David:
Where can people find out more about you?

Tyler:
Well, for our combined YouTube page, that would be Rarebird Real Estate. Just search that on YouTube and that’s where we have a lot of our content that we’ve put out over the years. And then for socials, my social is iamtylercombs, Combs with a C. And, Mike, think you just had to get a new social, what’s your Instagram handle?

Mike:
Yeah, rarebird_mike. And I highly recommend setting up dual authentication because I had my account hacked so I’m kicked off Facebook. I can’t get back on Facebook and I had to redo Instagram, and so [crosstalk 00:51:47]-

Brandon:
Dang, man. Sorry. That sucks. Well, I’ll put a post on my Instagram later and tell people to go follow you, build you back up a little bit. Guys-

Mike:
[inaudible 00:51:59] gratitude to you.

Brandon:
All right. Well, thank you, guys. Appreciate you a ton and thanks for being part of my community, my tribe, my people. It’s been awesome getting to know you guys the last few years.

Mike:
You as well, man. Appreciate you.

Brandon:
All right. Well, that was our interview with Mike Nuss and Tyler Combs. These guys are incredibly smart and talented so make sure you guys connect with them over on social. And follow BiggerPockets for more episodes just like this. Of course, this is one of my last episodes going to be airing. I think my last episode is going to be on the 30th of December and then David takes over as host, as I sail off to go do some more surfing and family time for a while, taking a little sabbatical. I’ll be back again, of course, and I’ll be here on the show many times in the next year, but going to take a few months at least to just relax. So, David, it’s on you, man.

David:
For people at miss you, Brandon, what can people do to help you in this next phase of your life? What are you looking for?

Brandon:
You can send me teddy bears, preferably cat teddy bears with sweaters, that would be probably a good thing. Or you can follow me on Instagram, I’ll still be active there, beardie Brandon, so hang out with me there. I don’t know how active I’ll be.

David:
Anything we can expect from Open Door Capital? Is there any reveals that you can drop in this podcast?

Brandon:
Oh, man, we just got done with our annual goal planning thing, we are going to the moon and we’re actually changing our name from Open Door Capital, just shorten it to ODC because of the confusion with Open Door, the other companies, so ODC is… Yeah, but we’re going to buy some massive apartments this year, so if anybody has any $100 million-plus apartment complexes, let me know.

David:
There you have it. All right. Sounds good. Anything we should say before we get out of here?

Brandon:
I don’t know, man. I just appreciate you a lot. Thanks for being a good friend.

David:
Thank you, Brandon. That’s incredibly sweet of you, and for the guidance that you give me over the years. I’ve told everyone that you’ll be steering me from behind the scenes like the good friend that you are. So your spirit will live on forever as well as it will be looking at us from above, from our bobblehead.

Brandon:
Yes. Our bobblehead partnership, it’s great. Awesome. Get us out of here, man.

David:
All right. This is David Greene for Brandon ODC Turner signing off.