Brandon:
This is the Bigger Pockets Podcast show 540, where we sit down with Whitney Sewell, a good buddy of mine, partner of mine on a couple deals, and we go through a ton of really good stuff about the mindset needed to go from cop salary to owning $300 million of real estate. That, and more coming up.

Whitney:
I came from no network. None of my family can invest in real estate, no wealth whatsoever, no wealthy friends. And so when I started doing this and started trying to raise money, I raised $250,000 on our first project. And that was all from traveling to conferences and meeting with investors as hard as I could go. By the next deal, I more than doubled that, and by the next deal, I almost tripled that. And then by the next deal, we were at five to 7 million. And by the deal after that, I mean, now we’re having soft commits of 10 to 12 million in just a few hours.

Brandon:
What’s going on everyone, it’s Brandon Turner, host of the Bigger Pockets Podcast here with my cohost Mr. David not the only cop in the room Green. What’s up, man?

David:
Not bad.

Brandon:
And no, I’m not referring to myself. I’m not a cop.

David:
Definitely not a cop. Right?

Brandon:
Definitely not a cop. I was just watching a movie with The Rock and Ryan Reynolds and Ryan Reynolds is being his typical self. And he and The Rock are in prison together, and he stands up and tells everybody, “This guy is definitely not a cop. Don’t worry. He’s not a cop. Don’t worry everybody.” And I thought that was very funny that you just mentioned that.

Brandon:
Anyway, the reason I say this is because our guest today, Whitney Sewell, was a former police officer. He was military, police officer, federal agent, and now has like $300 million in real estate assets under management, which is huge. And he did majority of that in the past two and a half, three years, which is crazy. He has scaled up tremendously fast. And so what we go through today is not so much how do you find that property, and how do you do this? We want to dig mindset of a guy that can go from zero to 300 million. It ended up being a phenomenal conversation. Really, really good stuff.

David:
I don’t know, outside of maybe the tech space where someone IPOs, and just kind of gets lucky and hits the jackpot that I’ve ever heard of somebody who went in under three years to over 300 million in assets under management successfully. And I’m only mentioning that because we don’t talk the entire podcast just about Whitney’s real state. We kind of get into real estate mindset, values, how he manages the weight of the success that’s come his way. So I want to make sure I highlight, this is why this person was brought onto our show. because this is a phenomenal story.

Brandon:
Yeah. Really good stuff. We kind about things like giving money and how generosity and even spirituality plays into wealth and how they interact. We talk about the most dangerous book to read at the beach, I thought that was funny. Looking for problems, waking up early, we have a conversation about what it takes to wake up early, how to do it, do you need to do it? David says no. And Whitney’s extensive hiring process. So if you need to hire eight players, he’s going to tell you exactly how to do it.

Brandon:
All that and more coming up. But first let’s get to today’s quick tip.

David:
Quick tip.

Brandon:
Today’s quick tip’s more of a quick announcement. I mentioned this last week, but for those who have not heard, I’m going to be actually stepping away from the Bigger Pockets Podcast here at the end of the year. So this is one of our last, I mean, we’ve got what, seven more episodes? Something like that left in the month in the month of December. But coming up soon, I’m going to go take the year of 2022 mostly off and really focus on family, maybe a little jujitsu, surfing, and open door capital. So anyway, just quick tip announcement. David’s going to run-

David:
Well don’t do too much jujitsu.

Brandon:
Not too much.

David:
Because I don’t want you getting that much better than me.

Brandon:
I went last night to the, the academy and man, I rolled with my buddy who I’ve been doing training a little bit longer than him, and I did pretty good. And then I go up to another guy, and he’s like, “How long you been in it?” And I’m like, “A little over a year now.” And he goes, “Okay.” And he goes down, and within the first eight seconds he had me in a foot lock. And I’m like, “How long you been doing this?” 13. I’m like, “Oh man.” I felt really good for a second, and then I just felt like a complete idiot for the rest of the time.

Brandon:
The reason I bring this up real quick is because I want to ask the question to you, David, and to everyone listening, is where right now in your life are you putting yourself to be the idiot? To be the dumbest guy in the room? Where are you deliberately choosing to be the dumbest guy in the room right now? Because chances are, a lot of people aren’t. They like being the smart one. They like being the best. But where are you putting yourself to be the dumb one? Because that is where growth happens. What were you going to say?

David:
Definitely in jujitsu. What I was going to say is there’s this bipolar ride that you take, where you’ll go, “I’ll do way better than I thought I was going to do against someone.” And I’m just like, “Yo, I love this. I’m a natural.” And then the next day I’ll get thrashed by somebody who I would’ve thought I would’ve been able to handle. And I’m like, “Why am I doing this at all? This is so dumb.” And your feelings will just switch from one day to the next, and that’s why you can’t trust them. What you got to do is look at, “Well, am I better than I was the last time that I went to class?” And that’s the only barometer that matters in life, at anything you’re trying to do.

David:
You’re always going to have fights with your spouse. I mean, I’m not married, but I’m sure Brandon, that’s a thing that you can’t avoid. And so if you focus on how you feel in the moment, you’re going to have times where you’re like, “I hate being married. This was stupid.” And then at other times, “This is the best decision I’ve made.” But if you’re always like, “Is my marriage better than what it was the year before?” You’re going to stay married, and it’s going to get better.

David:
So I would just say, Whitney’s story is incredible. He started off in Iraq in 2001, which is a very difficult time to be in the Middle East. And he came back and he was a police officer in Kentucky, I believe, which was a very poor salary. Then he became a federal officer where they just work you to the bone and you don’t really make more money. And so he grinded and grinded and grinded. It would’ve been so easy to quit. Then he gets out and finds his niche, and boom, makes this podcast that also was a grind, and then just took off. And he raised all this money, and now he’s buying really good real estate. And it’s that overnight success in 15 short years type of a deal, so. That’s really what we’re getting at here.

Brandon:
That’s what we’re getting at here. So when David and I talk jujitsu, I saw comment at Facebook the other day like, “I don’t like all the sports analogies.” And I’m like … just be like, okay, one yes, we’re into sport … the sport, anyway, of jujitsu. But remember we’re not talking about jujitsu. Replace that with life, or with real estate or whatever. These are all lessons that we’re talking about. So hopefully we don’t offend too many of you with our jujitsu analogies. There’s just so many of them.

Brandon:
All right. Time to get into this thing. I mentioned earlier, the idea of where you put yourself to be the not smartest guy in the room. Definitely today, me and David put ourselves in that spot by sitting there talking with Whitney. You’re going to hear just how wildly intelligent and ambitious this guy is. He’s something. I think he’s somebody I definitely look up to and I think you will as well. So with that said, let’s jump in the interview with Whitney Sewell.

Brandon:
Mr. Whitney Sewell, welcome to the Bigger Pockets Podcast, man, honored to have you here today.

Whitney:
I am honored to be here, Brandon.

Brandon:
Well, this should be fun. You and I know each other a little bit. We hung out there in the Colorado mountains for a few days back last, was it springtime? And we got to know each other a little bit, but I never got to hear your origin story. Where did the famed Whitney Sewell come from? So why do we get into that? How’d you get into real estate, and what were you doing beforehand, and what sparked your interest in real estate investing?

Whitney:
I’m going to go way back Brandon, because I feel like it’s very valuable to your listeners. And I go back in March of 2001, and in March is when I decided to join the military. And if you can remember in 2001, what happened six months later, at that time I just knew it was the right thing to do, but of course I had no idea that in just a few months that our country would be at war and I’d be spending a year of my life in Iraq toting around a machine gun, obviously praying every day that I’d get to go home. Unfortunately not everyone in my squad made it home. Thankfully, the Lord protected me and allowed me to make it home.

Whitney:
But one thing the military taught me Brandon, and I feel like as an entrepreneur you almost just have to have this one way or another, is to have never give up mentality. It’s just not an option to give up when you’re in combat, right? I mean, other people are depending on you to perform. It doesn’t matter if you stubbed your toe, or you hurt your arm. It just doesn’t matter. Right? You get knocked down, you have to get back up and more than your own life is online there.

Brandon:
Yeah. I also wonder if they should just put all kids, they just put all kids in bootcamp and like just put them the military for a little while. Maybe not the dangerous part, but make them go through that. Because I feel like those lessons I’m sure almost every military or former military now real estate investor I know, just has this character that’s just so much stronger than most everyone else.

Whitney:
It would change our country.

Brandon:
It would change our country.

Whitney:
In a massive way, that’s for sure. Yeah.

Whitney:
But when I came home, I had some limiting beliefs thinking that I was not able to get a job. What am I going to do as a career? I felt like I had to have college to make that happen, and so I felt limited. However, I thought, “Okay, I’ve always thought about being a police officer.” So I applied to be a police officer with Kentucky State Police. There were 1200 applicants. I was blessed to have one of five positions. And also, that never give up mentality still became something that was so important, and it had to show from the way I wore my uniform to the way I responded to every dispatch.

Whitney:
However, I quickly realized that I had an income problem. And I would’ve worked the first two years for free. I mean I loved working the road, I loved the service, the discipline, the uniform. However, got married shortly after, and my wife and I, Chelsea, we just passed each other in the hallway the first full year of marriage. And I noticed guys were retiring 25 to 30 years on, making 30 to $40,000 a year. And I was like, “Okay, this is obviously not what is best for our family long term.” And so again, I didn’t know anything else that I was qualified to do. I started searching for some way to supplement income, and this is 2009. And I was making such little money the collapse at that time did not affect me. I didn’t even know anything like that even happened.

Whitney:
But, I learned that not only had one or two people built wealth in real estate, but millions of people had built wealth in real estate. And so I thought, “Okay, if that many people can do it, I can do something, right? I can do something to build some supplemental income for my family and I.” So we bought two triplexes, and I just made tons of mistakes, honestly. Learned a lot the hard way. Mismanaged, trusted the seller, the realtor way too much. But we learned a lot, and we gained a ton of knowledge, and thank the Lord we did not quit there.

Whitney:
Soon after, still looking for better income, I became a federal agent and that moved us to Virginia where we live now. It’s not easy to go into military, or law enforcement, or federal agent, but the Lord blessed me with many transitions there to move up. And that federal agent position was a dream J-O-B for most people, especially in law enforcement. However, I still quickly reached the top, reached the ceiling, and kept looking for more.

Whitney:
And there’s a whole twist at this point in the story though, that I feel like it’s important, and I started training horses professionally. And while that seems way out in left field, this was a passion of mine since I was a little boy. And I’d always dreamed of training and riding, and a few years ago, my wife and I had the farm also that we had always dreamed of. But my schedule, again, became so busy. I was a federal agent during the day, I was training horses actually now at this point. I owned a 15 unit with a partner. I was still trying to dabble in real estate, but this passion of mine was actually going places now. I was making more money training and selling horses than I ever imagined.

Whitney:
And however, I was missing all that time with my wife, Chelsea and our boys, Samuel and Elijah. And so at that time, my wife and I, we were at the beach one fall, and we were walking and what I call now thinking time, and we’ll probably get into that a little bit in a minute. But we were just thinking, and praying, and walking, and thinking, “Okay, is what we’re doing now going to work long term? Three years from now, five years from now, is this going to get us where we want to go?” And it was so obvious to us at that point. And actually at that point I was reading while I was walking on the beach … funny, Brandon and David, we were just talking about this book The Four Hour Work Week. I was reading that during that week at the beach as well.

Brandon:
The danger of the book.

Whitney:
Yeah. It’s a dangerous book.

David:
Especially at the beach. Yeah.

Whitney:
So we got thinking about that and thought it’s obvious it’s not going to get us there. And I was missing too much with our family. We had to make some big changes, and this was September. And by the next 60 days, we had listed our farm for sale. And so by Christmas, we had sold our farm and everything related to that horse training business.

David:
Wow.

Whitney:
And that was, again, that was a passion of mine since I was a little boy. So I’m hoping many people can relate to that. Because you may have something that’s a passion, but hey, if you just put that on hold for a bit, it may help you to go places. It may not be the best use of your time at the moment, and that wasn’t mine.

Whitney:
And so we sold the farm. And I’ll never forget my wife and I pulling out of the driveway and just crying. Right? Just bawling our eyes out because it was so hard for us. But we knew that for us to go places, for us to have passive income, for us to build wealth for our family, that it was something we had to do.

Brandon:
I love that you brought that up, that there are activities in your life that are amazing, and that you love to do them, but they don’t necessarily work right now. That’s stuff I’ve been thinking about lately, about there are things that can work at any time in your life. For example, training horses could work when you’re 40, or when you’re 50, or when you’re 60. You can come back to that. But building wealth, if you built that now, then you can have more time for that fun activity later.

Brandon:
But there are other things that you don’t get back later, like little kids. You don’t get that time back later, so you have to do that now, right? So when you’re thinking … I mean even doing jujitsu. One of the reasons I’m doing that now is because I can’t really do that when I’m 50 and 60. There’s very few that do it well at that age. I could surf though when I’m 60. So I’ve actually been surfing less and I’ve been doing more jujitsu because one of those I can do now, one of them I can’t do very well later. So it’s just an interesting way of looking at life, and you have to sacrifice some things once in awhile. But think through, what can I do again in 10 years, or in 20 years from now and I can get my kick then?

Brandon:
That make sense?

Whitney:
A lot of sense. And that’s definitely what we had to do. And I had to be okay with giving that up for a time period. And I’ll come back to that in a minute, and just the way things have worked out. But about a month later, I hired a mentor and there’s a long story behind that, but one way that I even narrowed that process down was on Bigger Pockets at that time, and finding people who were being mentored by lots of other people to figure out hey, what’s the best avenue here?

Whitney:
But I also started traveling to conferences as much as I could possibly go. I mean, two to three weekends a month I was flying somewhere, meeting and networking as many people as I could. But what that did also, Brandon, I still had that limiting belief. I had bought that 15 unit, and even that was so much bigger than I’d ever imagined buying. But now, going to these conferences I started meeting people who were buying 100, 200 unit complexes and had only been in the business a year or two years. And so I was given that belief again, okay, wait a minute. If all these people can do it, I can do it too.

Whitney:
And so I mean, we just hit it as hard as we possibly could. And so soon I started a daily podcast. I’ve been called crazy more times than once for that. But started a daily podcast and over the last three years now we’ve interviewed over 1,200 people who are just experts in the business. But this rapidly gave me credibility, right? Exposure, results. My network of investors and industry leaders exploded.

Whitney:
But this was also my own university, right? Just like you all, I mean you get to ask all the questions you want to ask of all the experts and that’s what it did for me. And I’ll point out something else here: I started the Real Estate Syndication Show before I’d ever done a syndication. Okay?

Brandon:
Really?

Whitney:
So people called me crazy, right, back then. But it’s been so worth it. And so not only did my network of investors grow, but my network of mentors as well, and all of these people that I’ve built relationships that normally I would not have gotten to talk to. Right?

Whitney:
But also what I call over-committing. I over-committed in a massive way, but in a good way, because I know that if I had done a weekly show, I would’ve tried to have done the audio editing, the video editing, the show notes, all those things myself. I probably would’ve gotten behind and halfway done them, but it pushed me to build teams, pushed me to hire people, pushed me to scale and brand in ways that I never imagined.

Brandon:
Which is interesting. That’s the same logic that goes into why you and I like multifamily. If I go buy duplex, I’m going to do the work myself. I just know I’m naturally going to because it’s just right there. I would take care … I was at my condo yesterday I’m remodeling. I didn’t necessarily do the work, but I’m really involved. But I’m not involved in a 200 unit property, I just can’t be. It’s impossible. So you’re forced to level up your, to higher dollar per hour skillset by having the bigger deal. Same with a daily podcast. I love that you said that.

Whitney:
So at this time while we’re excited about massive growth, obviously in our business and our team right now, I want to share something that’s behind that growth. Because during that time when we sold our farm, my wife and I moved into a small house in town. We bought a small house, and I built an office in the basement in the corner. And that’s practically where I lived for about two and a half years. And unfortunately, I mean, days that … doing a daily podcast, I was off every other Monday for my federal agent position. And those Mondays we called my marathon days, and I would record 12 to 15 interviews back to back to back to back nonstop.

Brandon:
Oh, man.

Whitney:
And so my wife would literally pack me lunch to go to the basement for the day. So, but it was just, it was quiet madness, honestly. I was still traveling, doing deals, and still working full time and it was a very stressful time for the family. That’s why I wouldn’t recommend a daily podcast for most people, but the Lord sustained us.

Whitney:
However, so something that helps sustain us though is having something that’s bigger than us driving us. And so a lot of that … I’ll share, when we moved to Roanoke, Virginia, we were listening to a pastor talk about how they had adopted and just 150 million orphans in the world. We had never been exposed to adoption before or just that need either. And so we had only been married a couple years at this time, but on our way home from that event, we immediately asked ourselves, “Why would we not adopt?” And it seems so simple, right? And I’m so thankful now for our ignorance really, just in the process of adoption, because it’s not easy. However, it seems so simple, and within a week we turned in our application to adopt from Ethiopia.

Brandon:
Oh wow.

Whitney:
But two years later … yeah, it was two years later our first Samuel came home from Ethiopia. A year later, our second son Elijah came home through adoption, and now we have a daughter as well, Eden Joy, who came to our family through adoption. So it sent my wife and I on a mission now to help as many families through the process of adoption as we can. That became our why behind Life Bridge Capital. And so now we’ve committed half of our personal profits to this foundation that we’ve created that’s now helping families with the financial burden of adoption. And so that why changed everything for us. And now it’s just amazing to see how it’s changing everything for so many other people now as well.

Whitney:
But, and I share … I mean, it’s obviously such a big part of who we are in our business, but during that time, my wife couldn’t care less about real estate. Right? And I feel like there’s probably a lot of listeners who can relate to that. But however, she is extremely passionate about our mission, extremely passionate about our why. And so when I’m up late, just weeks and weeks and weeks and weeks in a row and traveling, recording all these shows, that she knows we’re working for a larger vision, and that helped us all just being united in a bigger way.

David:
That’s cool, man.

Brandon:
There’s a lot we can unpack there, but I love, and I remember talking to you over lunch when we were in Colorado, talking about just the heart you have toward adoption. That’s how my wife and I feel very strongly as well, that we plan to adopt. It’s always been in our plans. It’s in our five year goal, it’s in all of our stuff. And in my entire life, I’ve always kind of known that that’s what I will do someday. And so it was cool to meet you. I looked at that very much as a sign, like, “Okay, yeah, this is somebody who can help make this thing a reality.” Because it is a complicated, confusing process that is in some ways heartbreaking at times because you think you’re getting it, and then it’s not. And I’ve heard a million stories.

Brandon:
So anyway, super cool, man. I love hearing that. Where does the name Life Bridge come from? I know Life Bridge Capital. What’s Life Bridge?

Whitney:
That was really the mission behind the name before we ever even started Life Bridge Capital. Right? And connecting a way for these families really to bring their forever children into their home. That’s where that name came from.

Brandon:
All right, very cool. So why don’t we jump to where you’re at right now in your business and then we’ll go back and fill in the gaps and how you got there. So what’s your business look like right now? Assets under management, or money raise, or whatever you want to go with that, what’s it look like?

Whitney:
So we have about 300 million in assets under management right now.

Brandon:
Whew.

Whitney:
And so we’ve grown very fast, but that’s been by building a great team. And I’ll elaborate there, we have about 10 to 12 full-time people in the Philippines, we have five full-time people in the States and hiring two to three more people as we speak. And so yeah, we’ve grown very fast.

Brandon:
What do they do in the Philippines for you? What’s that look like?

Whitney:
They are all podcast production. We’re producing other people’s podcasts as well now, but mostly all of our marketing team.

Brandon:
Okay. And so the podcast, it really has helped drive I’m guessing a lot … I mean, you kind of said it earlier, it helps drive a lot of the relationships, but also are you raising money from it? And what does the podcast I guess do for you? And a second part of that question is, for those who listen to this show that maybe are thinking, “Well, maybe I want to start a podcast.” Do you advise that? What’s your suggestions there?

Whitney:
I say what are you waiting for? What are you waiting for? And you have to get past the limiting belief, because everybody thinks, “Well, there’s so many podcasts out there, how am I going to be different?” And all those things, and you got to get past that, because you’re going to build your own following. And it doesn’t take too large of a following to be able to raise a lot of money. Right? But ultimately you’re building credibility for yourself.

Whitney:
So to give you an example of what that podcast has done for me, I think our first project I started traveling and again, I came from no network. None of my family can invest in real estate. No wealth whatsoever, no wealthy friends. And so when I started doing this and started trying to raise money, I raised $250,000 on our first project. And that was all from traveling to conferences and meeting with investors as hard as I could go. By the next deal, I more than doubled that. And by the next deal, almost tripled that. And then by the next deal, we were at like five to 7 million. And by the deal after that, I mean, now we’re having soft commits of 10 to 12 million in just a few hours.

Brandon:
Wow.

Whitney:
And that’s in a, what I consider a pretty short period of time. But the podcast plays such a large role in that. Our investors may not all listen to the show, however, I get on the phone with them and they say, “Whitney, I feel like I already know you.” Right? And you can’t put a value on that. There’s so much value, but most of that is from the podcast.

Brandon:
Yeah. And, and one thing I like about what you did too is you mentioned earlier, you started the show before you even did a syndication. And it reminds me of something that Jordan Harbinger, who was a guest on our podcast back a year ago or so. He said, “Dig your well before you’re thirsty.” You knew you were going there at some point. So you started digging that well even though you didn’t need it quite then. So then when you did need it, you had it. And I just think that’s just something to be I guess pointed out to our audiences. Where are you headed five years from now? How can you start developing that now? So that way it’s not a shock, or not a surprise, or you’re not running late later on.

Whitney:
No doubt about it. I mean, a big part of that also, Brandon is that mission component. And I’ll ask people, “Do you know your mission? Do you know what that is?” And even by expressing that on the podcast and it stands out in a big way, right? And even networking at events, people may come to the podcast by hearing me speak at an event, but we connect on a much deeper level by the mission component.

Brandon:
Yeah. That’s very cool. The whole [inaudible 00:17:20] start with why. People buy, they don’t just buy what you sell. They buy why you sell it and I think that applies very much to real estate. It also plays into the how you do anything is how you do everything kind of component, where people see that you have a heart towards helping they’re naturally … I mean, for good or for bad, I don’t know whether or not it’s accurate or not, but people who are deep in charity are less likely, I think, to go and take your money and run. Right? So there’s just this feeling we get. I’m like, “I can trust you Whitney, because you obviously have strong character.” And that’s what people are really investing in.

Whitney:
I believe you have to exist for more than just money. Right? And really I believe your investors also want more than just a return whether they like it or not, or know it or not. I mean, they really want more than just a return when they can be a part of something that’s bigger than just a financial return. It sets you apart. Right? And we all know about this. Know, like, and trust, we all talk about, right? Everybody talks about this triangle of know, like, and trust. But I say that there’s something missing, and instead of a triangle should be a square, and I say it’s loyalty. And you have to build loyalty. And when you can build loyalty, you can quickly rise the top. You can quickly raise more money if that’s your industry, if that’s what you’re doing.

Whitney:
But an example of that I like to share is Harley Davidson, right? You think of Harley Davidson, I mean, people are tattooing Harley Davidson on their arm or on their back. I mean, that is loyalty, right? I don’t expect too many investors have Life Bridge Capital on their arm, but however, that would be extreme loyalty. That person’s probably going to own a Harley the rest of their life. Or Apple, people sit out in front of the Apple Store through the cold all night to get to be the first one. I mean, that is loyalty. When you have a mission I feel like that’s bigger than just a monetary goal, you’re going to gain much more loyalty, and your investors see those things and just like you were just talking about.

Brandon:
Yeah. That’s very cool, man. Well I mean, one of the reasons I was excited to partner with you on the Colorado deals that we bought is, I don’t think I’d even been on your show before we partnered together. But everybody in my circle, everybody, I know and trust were all like, “Yeah, Whitney’s a real, he’s the real deal. He’s a great guy. You got to get to know him, he’s awesome.” So when the opportunity came for us to [inaudible 00:18:55] on a deal together, it was like, oh yeah, of course, everyone knows that you’re legit. So again, it goes back to the podcast thing, but it also just goes back to networking in general. And people talk, this is not a big industry. I mean, comparatively so, and so when your name just gets mentioned all the time from various people, I’m like, “Okay, well, there’s something to look into here.” And anyway, you’ve done a good job on that.

Brandon:
I got a question for you. This is something I get asked all the time. And in fact, so much that I’m working on a book about it at some point. And I’m curious, David, I’m going to ask you the question too. From a wealth monetary standpoint as a, from a spiritual background. Now, obviously not all the people listen to the show are spiritual, but most people subscribe to some religion or another. Right? And I think all three of us do. We’re all Christians. And so how do you view money, your role in wealth creation? How does that combine with your faith, and how do you view, I guess, money? What would you say to that? I’ll go to you first Whitney, and then I’m curious with you, David.

Whitney:
It’s a great question. Great question. I believe it, none of it belongs to me. Ultimately, I believe it all belongs to the Lord. I believe we are stewards. He allows us to be stewards of that. And I do believe that we’re given much and we’re expected much. Right? And that’s why I don’t feel like it’s just all for me to hoard or for me to keep. But I do believe the Lord provides those things for a reason. And that’s why … I can’t use it all, right? We can’t take it with us. And so I do believe that we’re given that and we’re expected much.

Brandon:
David, what do you think?

David:
I think we could do a whole podcast on this topic.

Whitney:
For sure. No doubt about it.

David:
The first thing I would say is I think that money gets isolated from all the other things that we could easily include in wealth way too easily and way too often. So, having a lot of money in my head is not different than being really fit, having a great personality, having a ton of friends, having a good disposition or mood. It’s one way that you are empowered in life and can open doors for you. But those things I just mentioned all do the exact same thing. Wealth comes in more ways than just money. I think money gets isolated, frankly, because it is the only of those qualities I mentioned that can be taken from one person and given to another, so we tend to just separate it from everything else in life that really matters, because it’s so easy to get it to pass hands, but it really shouldn’t be. It’s classified in my mind, just like those things.

David:
And the way that I look at it is in the same way that you would want to use your good personality or your good sense of humor to make other people happier in a hard world, or if you have a constitution that’s very stout and you can stand firm and others would quit, you want to use that to encourage other people when they feel like quitting, or stand with them when they can’t stand. Money works in the exact same way. And so the answer of how do I look at my spiritual life along with money is I don’t look at money like it’s any different than anything else. Who I am inside will be reflected by how I spend my money, where I invest that money, just like my time, my energy, my emotions, the gifts that I have. All of those things are, in my mind, looked at the same way.

David:
So I think where people get in trouble with money is, like I said, they isolate it away from everything else. And they’re like, “Well, that’s my money. You can’t touch that.” But this other stuff, maybe I’m going to be measured by how I use it, but I don’t think that’s fair. I think that money can be used to help other people, or it can be to help yourself. It can be used as sort of your sense of comfort. If I have enough money in the bank, it can protect me from any bad thing. But I think people make those same mistakes with their personalities. I think certain people close themselves off emotionally to the world because they don’t want to be hurt, and they think that’s keeping themselves safe, just like the person that dies with $100 million in the bank, but no friends. So I don’t know if that answered your question, but that’s how I see it.

Brandon:
That does. Yeah-

Whitney:
How you spend your money, it speaks, right? And how do you spend your time? It speaks.

Brandon:
I just finished a book … well, I shouldn’t say I finished. I’m almost finished with it. It’s a short book, it’s called The Treasure Principle by Randy Alcorn. It’s a Christian book about being generous with your money, but he makes this fascinating point in there. I thought was so good. He said, if you were to go buy, let’s say you had $100,000 net worth right now. You got about $100,000 net worth, and you were going to drop 90% of that on Dell stock, in Dell computers. Right? Guess what you’re going to be focused on? Every newspaper article. Oh, Dell. Okay, I got to read that one. He said, “Your giving doesn’t follow your interests, your interests follow your giving.” So do you put money into is what your mind’s going to focus on, which is one of the reasons we all think about real estate a lot, because a lot of our money goes into our real estate deals. So we see real estate in the newspaper we’re going to perk up.

Brandon:
So he’s like, look, if you’re like, “Ah, I wish I was better at education, helping kids with education,” put a bunch of your money with kids in education and you will naturally be more interested in that thing. I just thought that was such a great point that yeah, that our interests will follow where we spend our money. And show me your bank account and I’ll show you your heart, I think they’ve said.

David:
Yeah, it’s where your treasure is, your heart will follow. And I think that’s great about what Whitney’s doing, is by adopting children from a place where they likely wouldn’t have had as good of a life as he’s going to be able to give them here, it tears your heart away from the intoxicating elements of what wealth can do, and it keeps it grounded in something else. And Brandon, that’s something I’ve seen you make very intentional, is investing your time not just into business, but making sure that you’re putting it into your family, and into the people you influence. And that’s how you sort of avoid some of the worst things that can come from having money.

David:
So, this doesn’t get talked about a lot, because people come to this podcast to learn how can I get more wealth? Which is great. But it is worth mentioning that once you get it, it comes with a whole new set of problems. And what we’re talking about now is how you can kind of prepare for that. Don’t wait until you’re thirsty to dig that well.

Brandon:
Yeah, ooh. Way to bring that back, David.

Whitney:
That’s awesome.

Brandon:
Yeah. Cool, yeah. My last thought on that and then I’ll move on, is I [inaudible 00:23:13] alcohol … sorry. Alcohol is similar to money in that in itself, drinking a beer I’m sure isn’t bad for most people out there. But if you consume a whole lot of it and don’t have the right standards or the right friends to help you out, it’s very easy to get down a wrong path. And so I look at the two in very similar lights. I’m okay drinking a little alcohol, but I’m not okay if I was just spending all my time in my room, just downing beers and not going out because I’m getting to be an alcoholic.

Brandon:
I think the same thing with money. If I’m just hoarding my money and I’m living unproductively, and I don’t have friends that could pull me out of a problem if it became a problem, yeah. I think that’s an interesting … the other question I have sometimes is as people who want to give back again, this isn’t just specific to Christianity, but if you just want to give back in your life, is it better to give back now knowing that we are really good at multiplying money, or to just save it all up and just keep compounding it and then give way more later? Right? I don’t know if there’s a good answer to that question though. Do I just keep multiplying-

Whitney:
I think the good is going to compound also, right?

Brandon:
Yeah.

Whitney:
These children that are being adopted, I mean, how can we even measure the effect on their lives and the people they’re going to affect as well?

Brandon:
Mm-hmm (affirmative). That’s such a good point.

Whitney:
And that wouldn’t happen if I waited until the end of my life.

Brandon:
Dude, that’s such a good point. I’ve never heard that answer before, but I really like that. Because yeah, I could save $1 million and do a $20 million 30 years from now, but what could that million dollars today do to a life, and what could that multiply to? So good stuff, man.

Brandon:
All right. Let’s shift back to real estate a little bit. What are you looking for when you buy, what are you buying these days? Obviously multi-family to get 300 million. So what kind of stuff you buy?

Whitney:
We are buying all multifamily at the moment. We have one class eight project, three developments happening, but the majority of our focus has been on all value add type projects, right? Preferably 100 plus units at a time, preferably 150 or more at a time, but there’s some problem right, that we can fix. There’s a problem, whether sometimes it’s easy as just management, but typically that means renovations as well, market’s under rent, the ways that we can raise rent. But there’s some kind of issue that we can fix to increase the value of these apartment communities, and just increase the benefit to the tenants as well at these communities.

David:
That’s very cool.

Brandon:
Yeah, you’re looking for a problem. If we only took one thing for real estate specific that we isolated from this, that’s what it is, is the best investors are not running away and trying to find the perfect deal with some computer algorithm that can scratch the entire internet and find the best deal out there and avoid the problems. They’re running into where the problem is, because that’s where the opportunity lies.

David:
Yeah. That’s so true.

Brandon:
Whitney, can you give us some examples of maybe some of the best problems that you’ve found that maybe other investors missed? Because you saw the problem they just saw, “Oh, the NOI’s not good enough,” but you could see a little past that.

Whitney:
I think of one project that we’re about to exit, because it’s an amazing story. Just this entire deal. However, we first came to the project, it was sent to us and we made an offer and the broker said, “Oh, that’s not enough.” Long story short. “That’s not enough. That’s not going to get it.” And we said, “Okay, thank you. Farewell.” That’s enough in that project, onto the next one.

Whitney:
However, it went under contract with another group, okay, and then the project was under contract for a couple months, falls out of contract. Guess what? The broker comes back. “Would you all like to make another offer?” We made our same offer, and the broker eventually comes back, we were eventually awarded the deal. But I’ll tell you what that did. It allowed us to see the financials at two very different parts of the year, even, for that project numerous months apart.

Whitney:
And so by the time we got the second amount of financials, we could see there was a problem. It was getting worse, and so we knew they were even more motivated at this point. But we made the same offer, and we got the project. Right? But even that deal, we went and secret shopped this property. So one of our employees, somebody went up to it, and knocked on the door, and the sign said opens at 10. They opened the door, they were five minutes before 10, the person opens the door and says, “We open in five minutes,” and closed the door in their face. It’s just simple things like that, inadequately staffed and all kinds of things that were easy fixes. Right? And putting people in place that care, right, amongst many renovations and a million pounds of gravel and landscaping, but lots of things happen. But like I said, a few things early on, just one, not giving up, but also sticking to what we knew was going to work for that project as well. Sticking to our numbers.

Brandon:
You mentioned earlier, you said something about the phrase thinking time, and you said, “Yeah, maybe we’ll come back to that later.” I want to come back to that. What does that mean for you, thinking time and how does that play into your success?

Whitney:
So I know you’re going to ask me later about a book, but I’m going to go ahead and mention it by Keith Cunningham. Right? I’ve got it right here, because I knew you’re going to ask, called Road Less Stupid right? And-

Brandon:
Oh yeah, I have a book.

Whitney:
… I highly recommend that book and I’ve learned a lot from Keith Cunningham. But one thing that stands out, and he does this in every chapter of his book, and he encourages you to have thinking time and ultimately have a space in your day, right, even a space in your office, or your home, or somewhere where hey, it’s just you, a pad of paper, a pencil, and go ahead and put some dots on that paper. Your mind already knows it has to come up with something to put down there. Right?

Brandon:
Mm-hmm (affirmative), I love it.

Whitney:
But even that thinking time, like when my wife and I were on the beach, that was crucially important, and that changed the entire trajectory of our entire family, I mean our entire future in drastic ways. But it’s by separating from the daily, just mundane things that just keep coming, right? Every day, all these things that come at us and we’re just playing defense constantly. Right? And so having that thinking time helps us separate from the phone, separate from the computer and really just ponder. Right? And think about the things that are most important to you as well.

Whitney:
But also, what are you going to accomplish that day? What are your goals that you’re hitting right now? What are you not hitting? Maybe think through some of those things, but that thinking time has been crucial for us. And it is for me every day now as well. So I mean obviously, it changed my entire morning routine from there and forward.

Brandon:
What does your morning routine look like?

Whitney:
So morning routine’s going to look at like getting up about 5:00 AM, sometimes 10 ’til, and I also have a light that comes on on a timer, it helps me to wake up and I have the phone with alarms set across the room, I have to get out of bed. Right? Make myself get up. But then it’s about 30 minutes of exercise, and at that point too, my wife and I are fixing a Bulletproof coffee. You’ve probably heard of that.

Brandon:
I love it.

Whitney:
You blend it, but we do put lots of Kerrygold butter in there, and whole milk. And so, but that time also that time with my bride in the morning has been just phenomenal for us, right? Time for us to pray together and just think, and talk about the kids. Even through that two and a half year period where I still working full time doing real estate, all that madness, if it wasn’t for that morning time, I don’t know that we would’ve made it, right? I mean, it was just a time for us to reconnect and think about the day, and discuss the day. But that thinking time was crucial.

Whitney:
So after that, it’s going to be spending time in the word. It’s going to be spending time in prayer and usually spending time reading some kind of book. Typically now it’s real estate or business, some type of business book, but that constant education has paid off for me in such a big way. It motivates me, learning from other people that are way ahead of me. And it just gives me a push for my morning.

Brandon:
I love it. I just finished reading a book called The 5:00 AM Club by Robin Sharma. Have you read that one?

Whitney:
I’ve not read it. I’ve heard of it.

Brandon:
Yeah. I feel like it was a phenomenal book in terms of the information giving. It was obnoxious to read, because it’s a fable, so it’s like a storyline. And I kept saying every page, I was like, “Nobody talks that way. Nobody would ever have that conversation.” It was almost too cheesy for me, but I love the book in terms of all of the information it gave. It was one of the best I’ve read in that regard. But it’s basically about having a morning routine, very similar to Hal Elrod’s Miracle Morning, or exactly what you’re saying right now. Start with some exercise, get up at five, start with some exercise, get the blood flowing, get some reading in, get some meditation in, or prayer, and it’s re-reminding me of that.

Brandon:
So I’ve been doing that every morning. I’ve been waking up, I have one of those VR Oculus things, the Oculus Quest or whatever it’s called. I play this game called Supernatural, and you can go anywhere from like five minutes to like a, you know, half hour if you wanted. But I’ll do a 10 minute, maybe, quick get the heart running, get a little bit of sweat going. And all of a sudden, that just transformed my morning in such a big way. I used to wake up early sometimes and just lay the couch and like scroll Instagram for a while, and then slowly get my coffee in me. But now, that first 10 minute thing, it sucks for the first minute, and then I’m in it, and then I’m awake for the rest of the day in a much more powerful way. So I’m just reaffirming what you say there. It’s a great way to start your day, that morning.

Brandon:
David, do you have a morning routine? I don’t think we’ve ever talked about that. You’re not even a morning guy at all.

David:
No, and that’s why we’ve never talked about it. I’ve never been a morning guy. I actually want to ask you Whitney, so here’s the age old debate, right? Are some people morning people and that’s why they love this stuff in the morning? You want to start your day off and you get to a good rhythm. Jaco’s one of those people. And some people are night people or is that just something we tell ourselves in our heads and you could be either one depending on the habits that you develop?

Whitney:
I believe most people could be morning people. I don’t believe that I was always a morning person, and I even still struggle with getting out of bed. That’s why I make steps, and make myself get out of the bed and get started because I do value that time in the morning so much. And I would say this, too, I’ve experienced it firsthand. My wife was never a morning person, but once I started doing this, hey, she started doing it as well. And all of a sudden we love that morning time, and it’s our favorite time of the day. I do think it’s a mindset shift. I mean, I’ve interviewed almost 1,200 people myself and more times than not, more successful entrepreneurs and more … not all. I’ll give that to those who say, “I’m just not a morning person.” Yes, it’s not 100%, of course, but more times than not, they do have a morning routine where they’re up early and making things happen quickly, more times than not. And I do not believe that all of them just have this natural tendency to be up early. Right? I think it’s a choice.

David:
Okay.

Whitney:
It is something the majority of them have decided.

David:
So let’s say that I agree, and I say, “Yes, I think you’re right. It is a choice,” and I could become more of a morning person if I developed those habits, right? What I see on the end side of this is that other people get tired and have to go to bed and I can keep going. I can work out at night with a lot of energy where in the morning, it’s not as easy. As weird as this may sound, when I first wake up the several first three, maybe four hours of the day, my mind is very foggy. It is hard for me to hold a thought. I don’t think-

Brandon:
It’s because you don’t drink coffee.

Whitney:
I was going to say, do you drink coffee? And do you drink Bulletproof coffee? And do you drink Bulletproof coffee?

David:
I drink caffeine, I don’t drink coffee. But at nighttime-

Brandon:
Downing energy drinks.

David:
… I can be up at night with my mind, just firing off with so much clarity, here’s everything I have to do, and that’s what causes the hesitation because it’s been this way my whole life. I do think I messed myself up working in law enforcement and making myself stay awake to work 20 hour shifts and sleeping on a couple hours. So, there’s probably some brain chemistry that was redeveloped that I taught myself for the marathon, right? Don’t go to sleep when you’re tired, and then when I can sleep, I hibernate like a bear just, okay, now I got to sleep for 14 hours because I’ve been awake for so long.

David:
But I will admit, I would much prefer to sort of just phone it in for the first couple hours of the day, get all my routine, easy stuff done, and then later at night is when I have better conversations, more clear thoughts, and strategize. But I see how that works against me, because what you’re doing, Whitney, is kind of jump starting the competition. You’re getting ahead of everyone else. And so I think that I’m not the only one who wonders this, and I just want to get your guys’ feedback on, for the people like me that are like, “Yeah, you may wake up earlier, but you also go to bed at 8:00 at night and I have another like three or four hours of productive time.” What do you say to that?

Whitney:
I don’t think it’s a must. I think there are plenty of productive people that are just as productive as early risers that have the opposite schedule. However, I do say majority of people that I’ve interviewed have the opposite story where, hey, they’re up early making stuff happen.

David:
Brandon?

Brandon:
I would say because it’s, I feel like there’s going to be a really good analogy for this, but I just can’t think of it. But if you have that time in the morning, the time in the morning is not about being productive. I think that’s where there’s a misconception. I’m not working during my first hour, really. I might be reading a book, but it’s about having margin to clarify your day and your thoughts and your interests and your goals. Right? It’s getting yourself aligned in spiritually, not in like the religious sense, but just philosophically aligned for the day. So if you do that at the end of your day, that’s fine, but you’re not carrying that into the day. Right?

David:
That’s a good point.

Brandon:
You’re getting it at the end of the day. So productivity wise, yes. Now there’s a really good book out there called When, W-H-E-N, by Daniel Pink that goes into the scientific, it was the scientific secrets of perfect timing. And there’s a whole chapter on this topic of like morning people versus night people, and I don’t remember exactly the data, but it’s basically he says 80% of people are better in the morning at certain tasks, but 20% of the population is just reverse. So David, you might be naturally inclined to be an evening person. Now you can force yourself either way, but it might be a little harder.

Brandon:
But, now I’m the same way as waiting. I don’t like getting up early. I have to have an alarm. In fact, there’s a great app out there called Alarmy. You guys ever used Alarmy?

Whitney:
I’ve not.

Brandon:
It’s an app, it’s so good. David, you should try this just for the fun of it. You can program it to … the alarm will not turn off unless you do certain tasks. One of those is, the one I do is math problems. So I have to answer three math problems before the alarm will shut off because in reality, the problem with waking up early is that … the good thing about waking up early is it’s only early for the first two minutes. Then it’s just your day. Right? Kind of like a salary. A raise is only a raise for the first month, then it’s salary. If you can power through first two or three minutes and get your brain working by doing little math problems, like what’s 12×4+8, I’m trying to figure out, and the alarm’s going to come back on 10 seconds if I don’t answer the question in 10 seconds. That will wake me up. Or you make it you have to go to your fridge and take a picture of the UPC code or whatever, on the milk jug. And there’s different things you can make it do.

Brandon:
So anyway, and then I brush my teeth, drink a glass of water. And by that time, I learned all this from Hal Elrod, but by doing those tasks, then I’m awake, and then the coffee obviously helps as well. But anyway, I don’t think it’s … I’m like Whitney. I don’t think it’s vital, but I think it’s helpful, so.

Whitney:
Especially if you have kids, as well.

Brandon:
And especially if you have kids, yeah.

Whitney:
It’s helpful to have the time.

Brandon:
Yeah, because what I hate is running … it’s like, okay, I got to do a podcast at 8:00 AM. All right? That means I got to have breakfast by 7:30 on the table. I got to wake up. Then I got to make breakfast, it’ll take 25 minutes, so I can set my alarm for 7:05, boom. That’s how I operated my entire life up until I read The Miracle Morning, was work backwards from the last possible second I can wake up and make that the time. I don’t want to live my life that way, always hurried and miserable. So anyway, we could do a whole show on this as well, but-

David:
All right. So let me ask this question. It’s not sleep related, but it is task related. There are certain tasks in business that I think I, and other people in the world probably feel the same as me, enjoy doing. And then there are other tasks that you just have to do, and part of business is learning how to leverage off the stuff that you don’t enjoy doing, but we don’t always get to do that and sometimes you got to earn the right. You got to train people in the Philippines to do those things so that you don’t have to do it. What’s your thoughts, Whitney, oh the things that you enjoy doing?

David:
Let’s say that you really like plugging numbers in a spreadsheet, but what you don’t like having to do is hassle somebody to get the T-12 that you’re going to use to put in there. You don’t like talking to people, but once you have the information, you’re very good at processing it. Do you do the things you like first? Do you try to do the stuff you don’t like first and save the rest? Or do you just take whatever comes at you and you just roll with it?

Whitney:
I think I’m going to knock out most tasks that I can do very quickly first. Right? Get those things done and get some momentum at the same time. Right? And although I know there’s bigger tasks waiting for me, I’m going to be thinking about those, but I want small accomplishments first. That’s why they tell you to make your bed in the morning. Right? That’s why tell you to make your bed in the military as well. You have a small accomplishment, and even if you had a horrible day, guess what? You get to get back in a made bed. Right? And so I’m going to knock out those tasks, but I’m also going to remember those tasks that I just hate doing, because I’m going to find somebody else to do those ultimately. Maybe I have to do them for a period, right? Or build that process or that system, but I’m going to build the team, ultimately, to do those things that I just hate doing.

Whitney:
Starting the podcast is a good example. I’ve never edited the first piece of audio or video. Right? I’ve had to build that team from the very beginning to do those tasks. They were so much better at each of those things than I ever would have been as well. And that’s the same thing in our commercial real estate business, I think that’s how we’ve grown so fast as well. I decided to focus on one part of the business and get really good at that thing. Right? And then build the team of experts around that.

Whitney:
I met my business partner at a conference, Sam Rust, amazing guy. We knew right away that, hey, this is going to be a great partnership as well. But guess what? We had complimentary skillsets. He had something that I did not have, and I had something that he did not have, and it allowed us to move very fast. Our first project together was $30 million, which is not common. And so that speaks to that. Hey, find people that are really good at the things that you’re maybe not as good at, or maybe you just don’t like doing and plugging numbers in a spreadsheet is not something I typically love doing, or turning them out like he does.

Brandon:
Yeah, [inaudible 00:35:52].

David:
So would you find yourself avoiding putting them in the spreadsheet until you did the things you liked to get momentum going? Because that is-

Whitney:
That’s a possibility. I think that’s a good point. If you hate doing it, you’re probably going to postpone it or procrastinate. Right? But by finding somebody that loves doing it, hey. I mean, I think he just dreams about numbers at night. Right? And I do not. Can I do it? Yes, but it would take me so much longer than him and wouldn’t get it done near as well. And so I think it’s a, document those things. You may have to do them for a period, but plan on a way that you can hand things off. And it doesn’t even have to be something as complicated as underwriting, but even systems behind your emails. Right? And emails take over so much of our lives. Build a system around that, where you can have an assistant help you. That’s what I did, so you can consolidate those tasks of what you do best.

David:
Brandon, what about you? How do you solve that problem? Because you do so many different things for so many different companies right now.

Brandon:
Yeah. So what do I do first? You mean? How do I focus?

David:
Yeah. Do you line up, hey, these are the things I like, so I’m going to save those for the end of the day? I’m going to eat my vegetables first and have dessert to look forward to, or maybe get some of the things done that you like early and then that way, if you run out time, it’s magically for the stuff that you didn’t want to have to do anyways. Or do you just take it as it comes?

Brandon:
Yeah, I have kind of a funny setup on this, in that I don’t really run my schedule or my tasks at all. I don’t have any say in what gets done. I have so many people that depend on me for little things, and so it just gets put on my calendar and then I do it in the order that they tell me to do it in. It’s kind of funny, I’m sure I could do stuff, but I just find … I am so bad at doing anything. I will lay in bed and watch TikTok if given the opportunity over anything else, no matter how important it is. I will just do nothing. And so I have to hack my life to be, and I know David, you and I are very similar in this, I have to hack my life so that, so that-

David:
So that your own weaknesses can’t defeat you.

Brandon:
Yes. That’s why Jerry shows up my house to teach jujitsu. That’s why Adriana shows up at my house to do my massage. Because I need that thinking time. I will not take that thinking time, unless somebody’s at my house going, “Well, I’m here.” And I love getting a massage every week, it’s the most profitable time I have, because it’s my thinking time. Plus the hour in the morning, you know, the Miracle Morning stuff helps, but I still say the massage helps. So anyway, I don’t choose what I do, I guess. I mean-

Whitney:
What about a few years back though, Brandon? Before you could hire those people-

Brandon:
Yeah, before I had that?

David:
Yeah, what about the question?

Brandon:
I think I may … I mean, I know that when I eat food, I’m always a … I eat the worst food to the best food in that order. Always. If there’s steak and there’s broccoli, I’ll eat the broccoli first, then move to the steak. Right? I think I did that in my young life, I think I did that as well. So I will always do the annoying work first, eat that frog, like the phrase goes … that’s a really good book, by the way, everyone listening. Eat That Frog by Brian Tracy, it’s a productivity book. Anyway. So yeah, so I will do that first. But, yeah. That’s a good question.

David:
Well here’s why I ask, because Whitney’s at a point in his career where … let me backtrack a second. The pattern of how business works once you get to be pretty successful is that as tasks come in, they get bifurcated into a decision has to be made, and work research logistics have to be done. Usually it’s sort of like the work research logistics is lining up the bowling pins, and then somebody has to come in and roll the ball. And the skills that we teach on this podcast are mostly decision-making skills; analyzing a property, how to raise the money, how to get the money coming in, which property are we going to buy, what ways are we going to add value? That’s really, what Brandon you call the cut that Dr. Oz would make. That’s what a good investor is really focusing on. But then 80 to 90% of the work still, someone’s got to line these bowling pins up. And when we have to line up our own bowling pins, I don’t want to get out of bed to do that. And so my brain starts working against me, versus if I’m walking into the decision that has to be made, I can be really energized.

David:
So what I wanted to ask you, Whitney is what steps did you take to get a team of people that you now have, that I’m assuming are lining up these bowling pins so that you just show up and bowl every day, which is fun, and energetic, and exciting, and you’re learning new things. And now you’re teaching other people how to bowl, and you’re not having to deal with spraying your shoes with the little nasty shoe spray that they do, and making sure that the lanes are oiled and all of that?

Whitney:
Early on, it was over-committing like we talked about. It pushed me to hire people, and that was all virtual at first. And so that was by having four virtual assistants from all over the world, thinking about what tasks do I need completed? And that was for the podcast at first, but that helped even me learning. It helped me to learn ways to hire people, right, and hire the right people early on. Obviously that changed over time. Different people, different virtual systems from all over the place. And that team has now grown in a big way, but even in house now, one method that we use is called top grading, by Bradford Smart. And I don’t know if you all have heard of that, but you should look that book up Top Grading. And I would say I went through this book when hiring even my assistant that I have now, and we probably used a fifth of that book, but it helped me to build a process and narrow that down very fast.

Whitney:
And so I put a job offer out to my network and then I also put one out on Indeed, and I think I had about 700 applicants. Well, who has time to look at 700 applications, right? Or do that many interviews? Well, nobody. But in that process at the bottom, I asked them to send me four things. The first two were not optional, the second two were optional. Okay? The first one, though, was a 14 page questionnaire and it went into massive depth about all their job history. I mean, pros and cons about supervisors, different things. And I even told them, I let them know that, hey, you are going to have to set up a call with your previous employer for me to talk to them. Okay? And most people are going to write you off right then, right? Most people are not going to be willing to do that. But the few that are, hey, that’s going to help me narrow that down very fast. Right?

Whitney:
So I received probably about 30 of those forms completed. I mean, which is quite impressive, right? So I went through those narrowed that down to about 12. I called each 12 of those people out of the blue, no notice and said, “Hello, Whitney Sewell, Life Bridge Capital. You’ve been selected to move to the next round. Thank you for applying. Here’s four tasks. I need you to complete by tomorrow afternoon.” And so I gave them the tasks and said, “Thank you,” and seen what they sent me. Right? That helped me then narrow that down to four I mean, just top notch people. Right? I mean, I could see so many things.

Whitney:
I didn’t even care really if they, he did it all 100% correctly, right? But was it on time? How was it presented? How did they word things? How much time did they spend and on what, right, did they spend the time on? That helped me narrow that down to four people. And then my business partner, Sam and I, we did tandem interviews and those interviews take a minimum of three hours, going through asking lots of questions just to get to know them. Right? And again, more times than … I mean, almost every time now that I think about it, I care so much more about this person’s integrity. Right? I care so much more about who they are more than their ability. I can train them to do many things or get them training, even if I don’t know how to do it. I’m much more willing to do that, but I cannot train that person to be integrous. I can’t train them to work hard. And so once I can see that in them and hey, they have some ability, some skillsets, hey, that’s a person that I want as a part of our team.

Whitney:
And so my assistant, Alana, she’s been with us a year now, and she has done amazing. And so I’m just always impressed at her work ethic, and how she’s helping me in this assistance she’s helping me put in place. So like Brandon I’m almost told where to go to on a sometimes 15 minute basis, 15 to an hour basis. I know at that moment where I need to be or what I need to be prepared for.

Brandon:
That’s so good, man. That’s so good. Yeah. That Top Grading book, I just looked it up on Amazon. So Brad and Jeff Smart, right? So Brad, I think is Jeff Smart’s father, I think? Anyway, they have another book called Who on hiring that I did read, so I’m just going to order this one as well. Because yeah, finding top talent, that’s the game. That’s the game. And so good.

Brandon:
Let me go back to basic question about your real estate. When did you start buying? When set of scaling up to these big deals? When was that, that you bought your first large apartment building?

Whitney:
So I partnered on two projects with someone else and they were 398 units and 415 units. That was the end or the fall of 2018.

Brandon:
Okay. So 2018. So now here we are three years later, I think? Yeah, three years later you got $300 million in real estate. So how-

Whitney:
It was February ’19 when Sam and I met, and it was June when we closed our first 30 million project together.

Brandon:
Wow. All right. So how did you overcome the fear of scaling, and the fear of growth, and the fear of screwing something up? And maybe a piece of it is what you just mentioned, you partnered on the first couple deals. But anything else you can share? A lot of people struggle with this, like, “Well, I’ve been so comfortable in this like duple, triplex, lane. How do I scale my, business?”

Whitney:
That’s such a limiting belief. Right? And we’re all stuck there at some point. However, at this point where my wife and I were, even before I met Sam, it was the point where we were ready to sell the farm to make this happen. And I think that was just a crucial pivot for my wife and I and our family. It was like we were all in. I mean, we burned the bridge. I mean, we had to make it happen. We didn’t have any choice.

Whitney:
And even at this point too, when I started the podcast, and I’m sure you all know this, it’s very expensive to produce a podcast, especially daily. And so, there were many months where I would share with my wife in the morning, “I’m not sure if we can produce the podcast next month. I’m not sure if we can afford to make it happen.” And something would happen, and we’d make a little bit of money, and then it would happen again. I’m like, “I’m not sure if we can produce it again the next month.” And then something would happen, the Lord would provide again, and we kept it going obviously. And it was not easy, to say the least. However, we had no choice but to keep going. We had no choice, and it was our dream to get back out on a farm. Right? It was our dream to get back out there again, to have that farm again, and for our kids as well.

Whitney:
So for us, I think it’s a matter of being so committed that it’s just not an option to turn back. And so I wasn’t as intimidated by the size of deal once I decided that, hey, we’re only looking for 100 plus units. And then it’s irrelevant then, the size of the deal. We’re going to make it happen.

Brandon:
That’s cool, man. So to kind of pull back full circle, you sold the farm originally, had to get out of that, the horse thing. Have you got back into it yet?

Whitney:
We bought a farm and believe it or not, I actually bought one of my best horses back.

Brandon:
Oh, no way.

Whitney:
And so it’s pretty cool how that’s come back around. Yes.

Brandon:
That’s awesome, man. So how does your time split today between that as a hobby versus your real estate? What do you spend your days doing?

Whitney:
My days are mostly spent in real estate and obviously leading our team. And then afternoons, I’m spending time riding with my boys, or we’ve been hunting the last few days, but ultimately hiking or anything like that, outdoors mostly, with my family. But yes, the days are spent in real estate and working on our processes, our systems, our team, and providing support for all of them.

Brandon:
Any tips on leadership that you’ve learned as you grew this team, both a digital one, in the Philippines overseas, and then a local based team? Any tips on that?

Whitney:
I think it’s a matter of seasoning. As you become more seasoned, as you stay in business longer, especially I think military, law enforcement, federal agent, those things have a way of seasoning you to where things don’t bother you as much as maybe it does some people, right? And it helps you to lead in ways that maybe you wouldn’t have before. It helps you to be more patient. But one thing I think is so important in leadership is asking great questions. And obviously that’s something the podcast helped me a lot to do, but you need to be able to ask great questions of not only your team members, but even of your investors. And I love asking good questions to even my family, my wife, my kids, right? Ask them what do you love? What did you learn? Ask them questions about that, that stirs conversation for education.

Whitney:
And I’ll share, I created a document just recently that’s probably four or five pages of questions to do performance reviews with my employees and that, I gave it to them weeks ahead of time, because I wanted them to have that time to think about it. But even giving them the questions ahead of time, that provided so much valuable feedback. Providing that avenue, your team needs to know, hey, there’s a space for me to talk to the CEO or talk to the leader that’s not just about the normal day to day grind, right? The day to day tasks that they have. You need to provide an outlet for that.

Whitney:
And something else that came up was our team, they love the relationship component, right? We’re also virtual, and I bet many listeners are dealing with that as well, especially in real estate. We have so many virtual team members because that’s so available to us. But even my team in the Philippines, guess what? They love community even more, I think, than us as Americans do in a massive way. It’s so much more important to them, and it should be important to us as well. But one of them had the idea of having a virtual Christmas party and I’m like, “That’s great idea,” right? But I wouldn’t have known that if I hadn’t taken the time to ask all those questions.

Whitney:
It’s not just money, again. Remember, it’s so much deeper than just that monetary goal. I want them to be paid well, but even your employees want to know that they’re a part of a team. They want to know they’re a part of something bigger than just a paycheck, and our mission even comes into that and I’ve seen that happen so many times with our employees. But leading well in that, and always provide an avenue where I’m not above them. Right? I’m not way above them in a way that they can’t talk to me, and I want to express that as often as I possibly can to them.

Brandon:
What about, do you have any recommendations for people that you listen to or follow on YouTube, podcasts when it comes to the specific skills of leadership?

Whitney:
John Maxwell would be one I would highly recommend. Of course, most people have heard of The Five Levels of Leadership. He also wrote a book I’ve been reading recently called Good Leaders Ask Great Questions, and I would highly recommend that as well.

David:
Very cool, man.

Brandon:
Awesome. All right. Well, we are just about at time, we’re going to get you out of here, but question, where do you see yourself headed in the future? Where’s Life Bridge headed to?

Whitney:
I see us growing, obviously, our team in many regards. I see us growing in specialties, right? I see us bringing on people who are experts in different asset classes, and growing in different divisions and even in things outside of real estate as well, we want to be that opportunity for investors where they can invest in numerous different things depending on their needs and depending on what their portfolio is, or their risk tolerances, those things. So I see, by the end of next year, I think we’ll probably be close to a half a billion in assets under management, and we have almost that now either in development or under contract, and that was a big goal for us, and we didn’t expect hit it as fast as we did. And so I can see us surpassing that, but also growing, like I said, in many other avenues.

Whitney:
But I also want to continue to grow our team in a way that not only are we growing in income, and all those things that obviously are important, but I want to grow in my time with the family. I want to grow in that special time, that unique time with the family. So hey, the time when I am at work is high impact.

Brandon:
Yeah. Awesome. I love it, man. Well, with that said, we got to start wrapping up. So why don’t we head over to the last segment of the show? It’s time for our famous four.

David:
Famous four.

Brandon:
All right. The last section of the show is about the four questions we ask every guest every week, and we’ve been doing this now for years and years and years and years. But the first question here on a Sunday episode, which I believe this is coming out on a Sunday, we usually change the question a little bit. So what I’m going to do is I’m going to throw an audible here and we’re going to call this the famous five today, because I’m going to ask you actually, I’m going to ask you both the question we usually ask on Thursday for the first question, and the question we ask on usually on Sunday. So the question that I usually ask on Thursday is do you have a current or all time favorite real estate related book?

Whitney:
Well, there’s so many, but I think for our industry, one of the best ones is Joe Fairless’, my good friend Joe Fairless, Best Ever Apartment Syndication Book.

Brandon:
Yeah. Phenomenal book. Phenomenal. So then the second question that I usually ask then on the Sunday show is, is there a habit or trait you’re currently working on developing in your own life? Something you’re trying to improve?

Whitney:
More intentionality with my family, with the kids, and ultimately, habit is putting the phone down during that time. Not trying to work during that time. It seems so simple. Everybody talks about it, but it’s hard to do.

Brandon:
It is hard to do. Yeah, I’m seriously contemplating that in 2022, I’m going to turn my phone off. Well, I’m going to basically brick my phone into a camera and that’s it, for the whole year, and try to operate the whole year on my desktop computer, or on my laptop. Because you can Instagram, you can Facebook, all that on a laptop, but I don’t get sucked in on a laptop. So I’m thinking about that. So we’ll see if I do that, but-

Whitney:
That’s a great idea.

Brandon:
Anyway. Yeah. We’ll see, doing a whole year with it.

David:
Can a carrier your pigeon make it across the Pacific Ocean?

Brandon:
I don’t think it could.

David:
So we can’t Game of Thrones our way through this.

Brandon:
Nope.

David:
All right.

Brandon:
Nope. All right, David next question’s yours.

David:
Whitney, what is your favorite business book right now?

Whitney:
It’s The Road Less Stupid that I mentioned earlier, Keith Cunningham. Every chapter is its own business coaching segment with thinking time.

Brandon:
So I have that on my shelf to read, it’s one of my upcoming books to read. Did you send me that or did I buy that because you recommended it? I don’t know why I have that book, but-

Whitney:
I did not send it to you.

Brandon:
Okay. Well, somebody recommended it. It must have been you, I’m going to assume, but maybe it wasn’t. I don’t know, anyway, it’s on my shelf. I’m looking forward to getting to that one. So.

David:
All right.

Brandon:
All right.

David:
What about hobbies?

Whitney:
Riding horses, hunting, active in our church, but ultimately the horse riding is probably my top hobby.

Brandon:
Cool. All right. Last question.

Whitney:
I’ll tell people, if you go to straightpathhorses.com, you can see the things I used to do with horses, and I looked at a horse called Shamrock. He’s the one that I sold, he was my best horse ever, and the one that we bought back,

Brandon:
Straight Path Horses?

Whitney:
Straightpathhorses.com. If you sign up for our newsletter email, nobody’s going to respond. But that website is still alive.

Brandon:
All right. Well, last question for me. What do you believe separates successful real estate investors and entrepreneurs and business owners from all those who give up, fail, or just never get started?

Whitney:
It’s the mission. It’s the mission. Do you know your mission? Most people can’t articulate their mission, and can you articulate it? It’s something I had to learn very early on, and it changed every investor conversation. And so I say, “Do you know your mission? Does your spouse know your mission? Does your team know? Do your investors know your mission?” And make sure that, hey, if you only have five minutes with somebody that they even remember what your mission is.

Brandon:
That’s awesome, man. Yeah. And my BP con speech this year, my keynote that I did, I talked about alignment. I got to be aligned in five areas and it was vision, passion, action, emotion, and your mission. If you don’t know why you’re doing it, you’re out of alignment, so-

Whitney:
You’re going to quit.

Brandon:
… I’m right there with you. Yep. That’s it. All right, man. Well, all right. If people want to know more about the mysterious Whitney Sewell, where can they find out more about you?

Whitney:
Lifebridgecapital.com. You can email me, [email protected] You can call or text me (540)- 585-4338. If you email [email protected] we have a tip sheet about multifamily investing we’d love to get to you. Just mention Bigger Pockets.

Brandon:
Awesome, man. Well, thank you. Appreciate you, and appreciate you coming on the show. Keep doing your thing, keep doing your podcast. Yeah, you’re killing it, man. It’s awesome.

Whitney:
Thank you, Brandon. Thank you, David.

Brandon:
Thank you.

David:
Thank you very much. This is David Green for Brandon no phone in 2022 Turner signing off.

Brandon Turner:
This is the BiggerPockets Podcast Show 539. This is the show where we’re going to go into how to get your first, second or third property. Specifically if you’re just getting started or maybe you’ve gotten one or two deals, we want to help you build momentum. That’s what this show today is all about. You don’t need to freak out about getting a perfect home run amazing deal on the first few deals. It’s more important just to get going, get that momentum going. So again, that’s why the first few deals matter so much, but at the same time, they don’t matter. You don’t need to hit a home run. You just got to get going and this webinar’s going to show you how.

Brandon Turner:
Of course, this is the BiggerPockets Podcast, the show where we teach you how to use real estate investing to change your life. Something that I’ve done, that David here has done, because we believe that real estate investing is the number one greatest way the average person can build wealth and financial freedom in this world and so we’re going to preach it from the rooftops. Now, speaking of rooftops or rooftops, David Greene, make fun of me for it.

David Greene:
Well, because the way you call them rooftops.

Brandon Turner:
Exactly. Every time I say roof-

David Greene:
[crosstalk 00:01:14].

Brandon Turner:
Roof or roof, roof, roof, David makes fun of me. So David Greene, welcome to the podcast, man. It’s awesome to have you here once again.

David Greene:
Thank you very much. I think everyone at this point knows that I bring absolutely no value other than slightly teasing you, Brandon, so I will make sure I consistently do that.

Brandon Turner:
Thank you, man. Thank you, man. Well, today’s show is going to be fun. Today’s show is actually a recording of a class that I taught on BiggerPockets recently, about building momentum. And now, before you’re going, “Well, I don’t want to listen to a recording,” it’s just like a podcast. Literally, it’s not me and David, it’s just me. I just recorded this. I had a one time shot. Now there were slides when I actually did the class, but you don’t really need them. You’ll be able to hear just fine. If you really want to see them, go over to the YouTube channel, BiggerPockets YouTube, which is at youtube.com/biggerpockets, and you can find this episode there with the slides as well, but you’ll be able to listen to it just fine.

Brandon Turner:
But here’s the deal. David and I want to talk about this for a second before we get you on. That is if you want success in real estate, you need to buy your first few properties. Look, nobody buys three properties and then doesn’t continue on to build a good portfolio and achieve the success they want, but I know a lot of people who have never bought any, and I know a lot of people who have maybe stumbled maybe across one on accident, but they never built the big M, momentum. And this is something I know, David, you talk a lot about as well. It’s like we just got to get people going, and once you’re going, you’re going to get to the finish line. Agreed?

David Greene:
Yep. That’s 100% true. In fact, any endeavor I’m taking on, obviously real estate, but a business that I start, an athletic endeavor, whatever it is, all that we’re really trying to do in the beginning is find a way to hit momentum. All of the brainstorming and strategizing and knowledge is just a way to create some momentum, and then once you have it, everything falls into place and it gets so much easier. Now, the trick is that in the very beginning is when everybody starts, they don’t have momentum and this is why everybody quits, because they start to think it’s always going to be that hard, it’s always going to feel like this. That just isn’t the case. It gets so much easier if you can stick with it.

Brandon Turner:
Yeah. It’s like, I’m not going to use… Watch me, watch me, restrain myself from using a jujitsu analogy. And instead, I’m going to use a basketball analogy which is much better. So imagine you get into basketball and the first time you try to dribble and you’re a little kid, it just kind of piddles out and rolls away and you go chase it. And then you try to shoot it and you just airball it. If you went and played a couple of games of basketball and just sucked at it and then you quit, it’s never going to be fun. You’ve got to get past the point of that momentum to where it’s actually, oh, this is fun. I actually like this. I’m not just concerned the whole time I’m going to look like a moron. I’m actually doing it. That’s what today’s show is all about. All right. On a scale of one to 10 of a David Greene level analogy, how was that? Okay?

David Greene:
It wasn’t bad. I’d given it at seven.

Brandon Turner:
Okay.

David Greene:
I think you’d have been better off going with surfing because for me, I’ve only gone two or three times. Surfing’s miserable.

Brandon Turner:
Yes.

David Greene:
It’s just exhausting the whole time, but you talk about surfing like it is the most amazing, esoteric, fun experience that you could ever have, but I bet it wasn’t when you first started.

Brandon Turner:
You’re right. This is such a good point here, I should have gone with that one. Because when I decided to surf, the first time I did it, I went for four hours. I sucked, I didn’t stand up one time. It was miserable, it was tough. But I said to myself, I can understand how this could become a thing that’s really fun, so I went and booked an entire month in Hawaii. That was my first time coming to Hawaii for a month. I came for a month with the sole purpose of learning how to surf, and then for a solid month, every other day, I went and surfed with Doug Nordman, shout at the Doug, who taught me how to surf. And by the time I was done, I could surf. I had to force my way through that month or for the first 10 times going off surfing before I was good enough. That’s what this episode’s about today so thank you, David, for making my analogy, taking it up tenfold. That’s what you do. You do it well.

David Greene:
You got it, brother.

Brandon Turner:
All right. With that said, it’s time to get into today’s episode, and by the way, later in today’s episode, we’re going to go through probably, I don’t know, I’d give it 45 minutes give or take of where I’m teaching this direct content. And then I go into actually how to analyze deals. Now, that part might be a little confusing because you can’t see the screen if you’re listening to this. Again, jump over to YouTube if you want to. But in that deal analysis, I actually use a tool that I helped create called the BiggerPockets rental property calculator. With the BRRR Calculator, the House Flipping Calculator, the Wholesaling Calculator and more. Now, these are part of our pro membership. Now, I know many of you are pros because we’ve got tens of thousands of pro members around BiggerPockets, but being a pro member gets you access to a ton of stuff, including unlimited access to this calculator.

Brandon Turner:
So I’m just telling you now that later on, I will talk about that. If you’re interested, hang out until then, but if you aren’t going to stay around for the whole episode, I did drop a discount code for the pro membership and that code was podcast21. No spaces, just the word podcast and then the numbers two, one, podcast21. That’ll get you 20% off your first year of a pro annual membership so instead of paying 390, it takes it to 312, which is a pretty good use of money if you’re going to go buy real estate. So that said, let’s get into the episode. Anything you want to say before we jump into me talking for an hour straight?

David Greene:
No. Just for the listeners who are hearing this, I want you to be perceiving the information Brandon is providing to you from the perspective of how can I use this to build momentum? The knowledge is great but the knowledge isn’t going to be what actually gets you properties or makes you wealthy. It’s going to be the momentum that you build from the knowledge.

Brandon Turner:
Yeah. There you go, man. Thanks for saying that. Oh, one more thing too. You might be wondering, well, I already own five deals or 10 deals. Should I still listen to this episode? I would say yes, because it’s kind of like right now, I’ve been surfing now for five years, four years, but I can guarantee you, if I went and took lessons with a surf instructor, there would be things I’d be like, “Oh yeah, I totally forgot about doing that,” or “Oh, that little tweak right there, you’re right. That would make sense.” Sometimes, it’s important to just relearn the fundamentals so I would challenge you, if you’re an experienced investor, listen anyway. See what you pick up. With that said…

David Greene:
Great point.

Brandon Turner:
Thank you. Let’s get to the episode.

Brandon Turner:
What’s going on, everyone. It’s Brandon Turner, host of the BiggerPockets Podcast, host of the BiggerPockets Webinar, author of a bunch of real estate books, and I’m going to be here today teaching y’all about how to get started investing in real estate by getting that first, second or third deal. Specifically how to get those first few deals, so I think we’ll just jump into this thing right now. Welcome to How To Buy Your First, Second Or Third Rental Property. My name is Brandon Turner, I’m going to be your host today and I want to start by telling you a quick story. So there’s a boss and his employee, Johnny, and they work at some company. And the boss takes Johnny out to the parking lot and says, “Hey Johnny. You see that yellow Lamborghini right there?” And Johnny says, “Yeah.” He says, “Yeah, that’s my Lamborghini. It can do zero to 60 in 1.4 seconds. I paid $180,000 for that baby.”

Brandon Turner:
And Johnny says, “Wow.” And then the boss says, “Now look, Johnny. Right next to it, there’s an empty parking spot. You see that, Johnny?” And Johnny says, “Yeah, I do.” And the boss says, “Johnny, if you really put in the extra hours this year, you really come through for this company, you just drive millions of dollars of value for this company…” And Johnny’s like, “Yeah?” “You do all that, I’m going to put my second Lambo right there.” And so the joke, right? But the truth is most of us spend our entire life working hard to make other people wealthy. We slave away for years at a job just to make the investors or the boss or the owners a lot of money.

Brandon Turner:
And so what I love about rental properties is it changes that power dynamic. It says, you know what? When I put extra work in, I’m going to change everything. I’m going to change my destiny because I’m putting it in this work. So that’s the plan today, to talk about how to do that. How do you get that first, second and third deal so you can get the momentum needed to build your business?

Brandon Turner:
I have a question for you. You don’t have to answer this physically but think about this. Why do so many people think and talk about getting into real estate investing? It’s so popular. If you were to ask the average American, do you want to buy real estate someday? They all say yes, but most people never pull the trigger. And then why do some people maybe get one deal? Maybe they inherit a property or they turn their house into a rental when they move out but they never scale up. They never get to the point of that financial freedom. Why is that? Well, I like to say it’s usually because of one of the three Ds. You know what the three D’s are? Number one, it’s dollars, they lack the money. Number two, they lack the deals. How do you get properties that’ll actually make sense and how do you know it’s a good deal? And then number three is the direction. What are the steps I need to take today and every day to change my life?

Brandon Turner:
Now, one thing you’re going to hear me talk a lot about today, because I always harp on this, but it’s the idea that success is not a secret, success is not an accident, success is not something that you stumble across. Success is an action. It’s a series of the right processes put in place. For example, some people are like, “Man, it sure must be lucky to be in shape. Those people are so lucky that they have a six pack.” I mean, come on. That’s how people feel about people who are super in shape. But the reality is those people typically worked for it. There is a process that will lead to being in shape. Now, yes, are there weird examples where somebody has a thyroid issue? Sure. But by and large, 99.9% of the population, if you follow a certain diet and exercise long enough, you’re going to get the results that you want.

Brandon Turner:
So if we can solve those three issues, if you knew you could finance whatever deal came you your way, if you knew you could find the deals and you had a consistent flow of good deals and you knew how to recognize those good deals when they came up and you had the money for it, and you knew exactly what to do to generate dollars, deals, because you have the right direction and you know what to be doing at every step and you feel confident and you know what to do, is there anything stopping you? Yes or no? No. You have what you need if you can solve these so that’s why today’s webinar really could have been called triple D, how to solve the dollars, deals and directions to acquire your first few rental properties. Because the goal here with the first three, why do I say the first three? The goal is not to get rich off your first three properties. The goal is to, what? Build momentum.

Brandon Turner:
The goal is to build momentum. The goal is to build a network. The goal is to build confidence. The goal is to believe in yourself, is to validate your hypothesis, right? That’s the goal of their first few deals. It’s not just to get rich. And so again, I want to talk to you guys today about how to do that, how to get those deals because by the time you got three deals, you’re not stopping. That train is moving. And so that’s where we’re going to get you guys today.

Brandon Turner:
So real quick, who are we? When I say we, what is this we? We as BiggerPockets, the world’s largest real estate investing website, millions of people come to BiggerPockets every single month. Millions of people come to BiggerPockets every month to learn, to network, to grow. We’re the largest real estate investing blog, largest real estate investing forum, largest real estate investing podcast, overall 100 million downloads of the podcast. It’s just a massive site that teaches how to use real estate to build financial freedom.

Brandon Turner:
Because at the end of the day, at BiggerPockets, here’s what we believe. We believe that real estate investing is the greatest wealth building tool the average person has to achieve incredible wealth and financial freedom. We really believe that at BiggerPockets. We also believe that it’s not get rich quick. We believe it’s a business, it is a process, but it can be learned. And third, we believe anybody can do it, regardless of current position in life. I don’t care what your income looks like, your credit looks like, your intelligence looks like, there are people who have had it worse off than you that have succeeded. So if you had the direction, you knew what you were doing and you wanted it bad enough, we believe that anybody can do it.

Brandon Turner:
Now, I don’t say that stuff because I heard somebody say it or I read it in a book or it sounds good on some kind of mission statement for BiggerPockets. I say it because I live it. I’m actually the BiggerPockets poster child. I didn’t start the company. So Josh Dorkin started it over a decade ago, almost two decades ago now, forever ago. He started in his basement because he needed help with his real estate. His first three deals made him struggle and he said, “How do I get through this?” So he started asking for help online, couldn’t find any help that wasn’t going to charge $50,000 for some guru coaching program. He said, “Look, I need real people who can help me figure this out.” And he built BiggerPockets into the largest site.

Brandon Turner:
Now, I was one of the very early members there and I had nothing. I had no credit, no income, making just above minimum wage. I didn’t have much of anything going into that, but I found BiggerPockets and I started to learn and network and grow and ask. Well, you can go back and look at my old questions. They’re terrible. I’m like, “What is real estate?” I didn’t know anything. And so in other words, I’m right where many of you are right now, a newbie. That’s nothing to be ashamed about. We were all there. We all will start from somewhere, right? And I used BiggerPockets to get my first deal, my second deal, my third deal, and from there, I took off. And so, again, that’s me in a nutshell. I’m a real estate investor first and foremost. Yes, I write books and teach this stuff online but the majority of my wealth is through real estate. The majority of my time is spent in real estate investing.

Brandon Turner:
I live in Maui, Hawaii, because listen, if you have passive income, you can live anywhere you want. I spent a decade in Grays Harbor, Washington, the rain capital of the world. I got tired of that so I moved to sunny Maui, Hawaii. I flip a little bit of houses, but mostly, I invest in large multi-family properties like mobile home parks, just got a huge apartment complex under contract, got some self storage stuff in the works. So I run a company called Open Door Capital. If you want to know more about that, odcfund.com. We raise money from accredited investors and we invested for you, it’s great. I’m also the host of the BiggerPockets Podcast, married to a wonderful woman named Heather. I’ve got two little kids named Rosie and Wilder. I think I got their picture coming up next. There they are. They’re adorable. And author of several real estate books. Anybody read any of my real estate books out there? I’m curious. And then I’m a travel addict.

Brandon Turner:
And honestly, that’s what got me into real estate, is because I wanted… These two things got me into real estate. One, I wanted to make sure that when I had kids someday, I was there for those kids. Every ballgame, every dance recital, every field trip, I wanted to be a very present father. And I knew that the path I was going, which was law school and all this stuff, I was like, I won’t have that life. I don’t want to spend the next 60 years of my life or 40 years of my life building up wealth just so I can be the richest guy in the graveyard. I wanted to be there for my family so that was number one that drove me to real estate.

Brandon Turner:
Number two that drove me to real estate, I wanted to travel. I once heard it said that the world is a book and those who don’t travel read just a page. That rocked me because there’s so much out there, so much out there to explore and see, and I knew, again, with my two weeks allotted vacation from some company that may allow me to take my vacation time, that just wasn’t for me. Does anybody else identify with that out there? You’re like, no, there’s more to life than just like working to make somebody else rich.

Brandon Turner:
And so I jumped in, I powered through a lot of difficulty and struggle and pain and it got me to where I am today. So today, I’ve got a little over, I think, what am I at? Almost 2000 units right now. I should be at over 2000 units within the next few weeks, and most of that has come… Actually, I had a huge growth over the last year and a half with Open Door Capital, which has been awesome. But for years, for a decade, I was just in the small deals, and I still buy small deals. I still flip single houses once in a while and condos.

Brandon Turner:
I just bought a condo to do vacation rentals out here in Maui, bought a triplex recently. So I still do this stuff and I love it, I’m just addicted to it. But again, today’s webinar is not about me. It’s about you so the last thing I’ll say about me, if you want to know more about me, you can go to my website, odcfund.com or check me out on Instagram, that’s where I’m most active. I’m like a 13 year old girl, I’m always on Instagram. BeardyBrandon, you can follow me there and you can even learn… If you go to my link in my profile, you can sign up for my text message list. That’s where I keep in touch with people.

Brandon Turner:
Now, let’s talk about why the first few deals matter so much, the most important things you’ll ever do. But at the same time, they don’t matter that much at all. Now, this is so important, I wish somebody would have told me this, what I’m about to tell you, when I got started. I really wish somebody would have told me this. So do me a favor, if you got your phone out and you’re Snapchatting right now or selfie-ing or Instagram-ing, take it, shut it off, put it down, throw it out the window, whatever you’ve got to do. If maybe you’re on this webinar on a phone, in which case go to a computer if you can, but just try to keep the distractions at a minimum. Take your kids, lock them outside. I don’t care if it’s hot. Just focus here. Life changing stuff, at least it changed my life. I don’t know if it’ll change yours but man, this concept stuff changed my life.

Brandon Turner:
So let’s talk about this. Why do the first few deals matter so much? Well, to walk through this, I want to explain a concept, a framework for building a massive portfolio of real estate. Now, I want to tell you something very important. Wealth is not built through a property. Let me say that again. Wealth is not built through a property. Write this down. Wealth is not built through a property, it’s built through a portfolio. A portfolio means a collection of properties. Now, that tends to scare people, especially when you’re just getting started. You’re like, “God, I don’t know how I’m going to buy a lot of properties.” Well, let me explain how this works. This is how most people who scale up, this is how they scale up.

Brandon Turner:
Now, they typically start small. Most people start with a single family house. So imagine you bought a single family house this year. Just any time in the next 12 months, you buy a single family rental house. Congratulations. Everybody here, regardless of your position, your money, your credit, anything, you can do that step. Everybody can do it. Now, let’s say a whole year later, you were to then buy a duplex. I mean, you already overcame the biggest hurdle of all. You know, I was talking to a Brazilian jujitsu guy one time who’s a black belt in jujitsu, and I had just started. I just started doing some jujitsu and when you just start, they give you a white belt. That’s the first belt, everyone gets it just for showing up, right? So they give you this white belt just for showing up, and I talked to this black belt and he says, “So what level are you?” And I said, “Oh, I’m just a white belt.”

Brandon Turner:
And he said, “Brandon, the white belt is the hardest belt to get.” The white belt is the hardest belt. What did he mean by that? Because 99% of the population will never get that white belt. And so just by stepping foot in the door the first time, by taking that action, by showing up, you’re automatically ahead of everyone else or almost everyone else, right? You’re an elite group. And so the truth is real estate is the same way. You are a real estate investor when you buy that one, that’s the hardest one. The hardest property to buy is the first one because most people will never do it.

Brandon Turner:
Now, once you did that, let’s just say you buy a duplex next year. You already bought a single family house, the hard work, you buy a duplex. And again, you’re saying, “Well, I don’t have the money for that.” We’re going to talk about that in a minute. But then what if next year, the year after that, you bought a fourplex and then the year after that you bought an eight unit? I mean, you’re only buying one purchase per year. Now, don’t get caught up in the specifics. I don’t care if it’s a nine unit, a 12 unit, a five unit. I’m just talking about exponential growth here. And then a 16 unit and then maybe a 32 unit, so over the course here of six years, we own 64 units, something like that. If every one of those was making you a couple of hundred dollars a month in profit, that’s over $100,000 a year of passive income and you did it in six years. Try getting that from a job. You can’t.

Brandon Turner:
But now, when you look at this, when you look at this list here, this collection of properties, you’re like, “That’s a lot of properties, how am I ever going to get that?” Well, the truth is it starts up here at the beginning, which is why I had that slide that said why do the first few deals matter? Because you can’t get to the later deals without them. However, you don’t need to freak out about getting a perfect home run, amazing deal on the first few deals. It’s more important just to get going, get that momentum going. So again, that’s why the first few deals matter so much, but at the same time, they don’t matter. You don’t need to hit a home run. You just got to get going and this webinar’s going to show you how. Now, again, the three roadblocks, dollars, deals, direction. Let’s hit the first one right now.

Brandon Turner:
Dollars. How many of you would love to have more money to invest in real estate with? Yes? Okay, good. If you said no, then we should talk because you should just give all your money to me, that’ll be great. So let’s talk about how to get that. Number one. Number one, and by the way, can I just say this? I’m going off on a little bit of a tangent here, but this is important. So much of real estate finance is a mindset game more than it is a tactic game. I’m going to give you some tactics here, but I want you to know that people figure it out. If you have the right mindset, the belief that you can do this, you’re going to figure out a way. So if this overwhelms you, just understand that you can figure this out. It’s more of a mindset than anything so get the right mindset and it’s going to fix everything else.

Brandon Turner:
All right, so let’s go into it. Number one, if you can put down 20 or 25 or maybe even 30%, you can go to any local bank or any community bank, any national bank and get a traditional loan, also called a conventional mortgage. They’re typically 20 to 30% down, you can get the mortgage. Now, the problem is most people don’t have unlimited money so maybe you could do this once, maybe you could do it twice, maybe four times, five times, but you’re not likely going to be able to do it 100 times or 20 times or even maybe five, right? So down payments only work so much. They can get you in the game, and for many of you, if you’ve got 25, 30, $35,000, you can get a conventional loan. But for many of you, you can’t so let’s move on to number two. Partnerships. Somebody just said, “Hey, in Costa Rica, there are only traditional loans.” I’d actually argue, [Estaban 00:22:40], there are many more ways you can do creative investing. For example, could your partner get a conventional loan? You could do no money down.

Brandon Turner:
If your partner gets the loan and you bring the deal, could that work? Here’s an example. This is my partner, Greg. We flip houses together here in Maui. We did a few last year, it was awesome. Here’s one of them before and after. We just bought a condo that had ocean front, ocean view, it was awesome. This property, we made on the flip $133,762.95. Yes or no, how many of you would love to have an extra $133,762.95 cents right now. Anybody? What would you do with that money? I’m curious, what would you do with that money right now? I’d love to see some answers. Buy another, reinvest. Oh, you guys are my people. I love it. Maybe somebody here would buy a Tesla or buy a fancy house, but man, I love people who are like, I’m going to reinvest that money and get bigger because I know the power of reinvesting. I’m going to buy another, buy more houses. I’m going to BRRRR it, go bigger.

Brandon Turner:
Okay, good. So that’s what I did, but the cool thing about this property is that Greg put no money into this deal. None. My partner, Greg there on the left, he put no money into this property. By the way, this picture was taken at the hospital because we closed the day after my son was born, so I’m at the hospital still and we had to go sign papers in the lobby of the hospital the day after, which is pretty funny. All right. So anyway, Greg put no money into this deal but I put in the down payment, and we split it 50/50. Now, you might be thinking one of three things. You might be thinking that sounds great, in which case, we’re good people. You’re my kind of person. You might be thinking, well, why would Greg give you half the deal when he did all the work? All you did was brought the money. And others are going to think the opposite. Why would Greg get half the deal? You brought all the money, Brandon.

Brandon Turner:
So there’s two sides, right? Some people think, why would Greg get half of it? Some people think, why would I get half of it? The truth is we couldn’t do it without each other. Greg needed me and I needed Greg. I wasn’t going to put the work in, I didn’t have the time and so I just split the cost with him, split the profit and we did several deals that way, and we continued to do deals. In fact, all of Open Door Capital, my real estate company that we bought almost 2000 units in the past year, year and a half, that all operates on the same principle.

Brandon Turner:
We raise money from investors to be our partners, they’re actually literally called limited partners, and then we find the deal, we fix it up, we manage it, we take care of everything and then we split profits. Not 50/50, we typically start with 70/30 where we get 30, they get 70, but it’s the same principle. And so partnerships can be an amazing way to scale a real estate business, whether it’s a one-on-one partner or whether you’re raising money from multiple people like I do, and so it’s all like kind of the same.

Brandon Turner:
Somebody said if you have 2000 apartments… By the way, that’s units, not apartment complexes. I don’t have 2000 complexes, I have 2000 units. Why would I work so hard for BiggerPockets? That’s a really good question. The short answer is because, one, I’m addicted to helping people, I love doing this. Two, because the more I give back and teach people stuff, the more it comes back to me by I raise money from accredited investors, I get opportunities to hang out with really cool real estate investors all the time who want to spend time with me. It’s all about networking, almost like everything. It’s about meeting people and networking, whether it’s for my fund, whether it’s for my own knowledge base. That’s why. And I’m not doing this out of selfless, like, “I just want to give back.” I…

Brandon Turner:
And I’m not doing this out of selfless, I just want to give back. I mean, I like giving back, but I do it for selfish reasons because it benefits me and it makes me wealthier and more than wealthier, it just makes me live in a more abundant life. I love this stuff. All right. Partnerships’ awesome. And by the way, that doesn’t work just for flips, it works for rentals too. This is a triplex I bought. I should really update this picture. We painted it. It looks beautiful now, but this is a triplex. It’s three separate houses on one lot, two in the front, one in the back. And this property in 2018, 2019, I don’t have that pulled up right now, but I made 12 grand almost in 2018. Now, though it might not seem like a lot, but it’s just one property out of many that I have.

Brandon Turner:
And guess what? I put no money into that deal. No money at all. My partner brought the down payment. Now, again, in both these deals, the partner with the money didn’t bring all the money. We used a loan to get the property. The partner just brought the down payment and the rehab costs. And so, they don’t even have to be that wealthy. And so, this property, I still own today. We still make a lot of money running off this property. My partners didn’t have to do any work whatsoever. And so, the partnerships work… Again, small deals, middle size deals, biggest deals.

Brandon Turner:
Now, is every partnership going to be great? No, you got to find the right partner. You got to learn how to do it. And we can talk more about that later if you want to really go into the weeds on how to find good partners, but I also, I put that in a lot of my webinars too… I mean, books and webinars and podcasts. We talk a lot about partnerships.

Brandon Turner:
Now, number three is another strategy that’s very near and dear to my heart. It’s called the BRRRR strategy. BBRRRR is kind of house flipping. Does everybody know what house flipping is? Yes. You say yes? Everyone knew what house flipping is? Good. You buy a house, fix it up, sell it. It’s like that, but instead of selling it, you keep it. You buy it, you rehab it, then you rent it out. You rent it out and then you refinance it. Now, why would we refinance it? To get all our money back. Well, refinance means you go to a bank and you get a loan from them after the property’s been fixed up. And then you repeat the process because you get your money back. You’re basically recycling the same money over and over and over and over and over, so you can build a massive portfolio using BRRRR.

Brandon Turner:
Now, if this is confusing to you, don’t worry. I’ve done entire webinars just on this topic. In fact, David Greene taught one recently a webinar called using the BRRRR method to achieve financial freedom faster. It is phenomenal. He also wrote a book on BRRRR investing. By the way, if you are a pro member, you can watch webinar replays like this one for free. If you want to watch that one, you need to be a pro member. And if you’re not a pro, don’t worry about it, it’s not a big deal right now. Later on, I’ll tell you more about what pro is. I’ll even give you a discount code if it’s something you’re thinking about doing at some point, kind of a bonus code, they give you some bonuses.

Brandon Turner:
Anyway, that’s kind of one of the benefits of pro is you get to watch unlimited webinar replays. There’s over 150 hours of educational content in the pro vault, so you can watch that later. All right. But here’s the deal, the secret to financing real estate that I’ve learned is that no matter how much money you have, I don’t care if you’re flat broke or you’re a multimillionaire, the key to financing real estate is that when you find great deals, you will find the money. Great deals allow you to bring in other people to use other people’s money. Now, there’s a lot of different ways to do that. I even wrote a whole book on No and Low Money Down Strategies.

Brandon Turner:
The point being the key to financing is finding great deals. If you have a great deal, you can use one of a dozen or dozens of strategies to help you finance it. The real key here is being able to find great deals. And by the way, if somebody said, “I’m doing this alone. I don’t have a partner.” I’m not talking about finding an official, let’s invest together partnership, I’m just finding ways to work together with people who have money. I’ll tell you, there are millions and millions of people out there right now who have a lot of money and are scared about the stock market. They’re scared about the economy. If you can network with those people, you can find them. All right. Here’s the deal. If you can find great deals, you’ll figure out the money. I guarantee it. I know you can.

Brandon Turner:
How do we find great deals? Well, there’s a lot of ways to do it. In fact, one of my books I wrote, I’m not trying to sell books here. You can get it from your library. I’m making a point here. This is a book I wrote called How to Invest in Real Estate. Josh Dorkin and I wrote it together. And in here, in chapter number six is a chapter called 27 Ways to Find Incredible Real Estate Deals. Now, the reason I bring that up is I want you to know, I’m going to show you three of them right now, but this book has a lot more. Not that you need to go read the book right now, I’m not trying to sell a book, I’m just letting you know there are so many ways to find deals. It can be overwhelming.

Brandon Turner:
In fact, because of how many ways there are, many people will just sit down and do none of them. When you have a lot of choices, people tend to take no action. As I go through these three, I’m going to give you the three, probably most powerful, or at least most popular ways to find deals and I want you to focus on one. I’ll teach you three of them. I want you to focus on one.

Brandon Turner:
All right, the first one, in fact, for new investors, I think every new investor should focus on this one, and that is the MLS. That is Major League Soccer. I’m just kidding. No, it’s the multiple listing service. What does that mean? Well, the multiple listing service is a list of all the properties that are for sale by real estate agents anywhere in the country. For example, you might have the Seattle MLS and all of the properties that are for sale in the Seattle area are going to be on the Seattle MLS.

Brandon Turner:
Now, in order to have MLS access, you really got to be a real estate agent, or have a real estate agent, or use one of the portals. Portal? What’s a portal? A portal is a site like realtor.com or zillow.com or trulia.com or redfin.com. Everyone heard of those? Those are windows into the MLS. You can see what’s on the list through a window. Now, sometimes that window’s a little dirty and some of the information’s not perfectly updated on those sites, but usually it’s pretty good. It’s good enough for what we’re doing today.

Brandon Turner:
And so, start there. In fact, I would recommend analyze at least 100 properties on the MLS before you jump to the other more creative deal finding strategies, because you really got to learn your market. You really got to learn what works, what doesn’t work. Analyze a lot of deals in your market.

Brandon Turner:
Let me show you an example. Somebody give me a city name somewhere in the country. I’m going to go to realtor.com right here. Somebody give me a city name. Boise. All right. Oh, it’s Boise. I’m not sure if you meant Boise, but let’s try Boise just for the fun of it. Boise or Boise, Idaho. Apparently, it’s Boise, not Boise, even though we all say Boise. All right, here we go.

Brandon Turner:
In Boise, we got these different areas and we can see some… I know that there’s an area, let’s see. Where are the cheaper properties at? Boise is not super cheap. Now, property type, do we want condos, multifamily, single family, townhouses? Let’s try multifamily. What multifamily’s available in the Boise market? Let’s find out. Multifamily done. All right, here we go. Here’s some multifamily. How about this one for a million, 6, 499. All right, 499 for this thing right here. What is this?

Brandon Turner:
This is cottage style duplex. I love those, because it means that they’re separate houses. That’s great because now they have separate water meters. In the heart of the Sunset neighborhood, close to schools, Whitewater Park, Quinn’s Pond, blah, blah, blah, both units have been well-maintained, recent deals [inaudible 00:33:44], new roof upgrades, blah, blah, blah. Live in one side, rent the other out. I love that strategy. We call it house hacking. All right.

Brandon Turner:
Let’s scroll through some pictures. Oops, what did I just click on? I do not mean to do that. Scrolling through here. I can see some things about the property. Yeah, I mean, it looks fine. It looks like it’s been remodeled okay. I’m not sure I would’ve chosen that color on the walls or cabinets, but whatever. It’s a nice little rental thing.

Brandon Turner:
I don’t know where the cottage is though. That can’t be the unit right there, can it, that little tiny thing? I can’t imagine that. That’d be crazy if it is. Anyway, you get the idea. That’s MLS. Start there. After this episode or this webinar, go search your MLS. See what’s on there. Look around, see what you can find something that might work.

Brandon Turner:
Now, listen, it’s hard to find good deals on the MLS. It’s so competitive right now. I’m not even saying you’re going to… You’re not going to get a home run on the MLS. Let’s just dispel that right now. You’re probably not going to get a home run on the MLS, but can you get a base hit? Can you get in the game? Can you just get started? Can you use the MLS to get really good at analyzing deals, which we are going to do live here in a minute? Of course, you can.

Brandon Turner:
The MLS has a place and I think every new investor can start there. But now, let’s say you want to get a little more creative with your strategies, how about number two here? Let’s see. Number two, driving for deals or driving for dollars, they call it. It’s where you get in your car and you drive around and you want to look for properties that are distressed. There’s something wrong with them. Maybe it’s really long grass. Maybe it’s a tarp on the roof. Maybe it’s shingles are curling. Maybe it’s a boarded up window. Maybe it’s just a lot of junk cars parked around. Something says that the owner of this property might want to sell. It’s not a typical kind of situation like a happy family.

Brandon Turner:
You drive around and you look for these properties. You then write down the address and then go home and look up the owner’s address. It’s not always the same. And how do you find that? There’s a couple ways. One, you could look on your county assessor’s website. Write that down. County assessor’s website, but there are tools that make this way easier. There’s apps. You grab your smartphone. There’s a several different apps. One of them is called deal machine. D-E-A-L M-A-C-H-I-N-E. Another one’s called Driving For Dollars. They literally, you drive around and you click on the house on the map on your phone and right from there, it’ll show you who owns the house and it’ll show you sometimes their phone number and it’ll let you send a letter right from the app. It’s amazing. It cuts out so much hassle. Driving for deals, great way especially if you don’t have much money, but you got a little time, Driving For Deals is great.

Brandon Turner:
And if you’re completely broke, why not drive for Uber Eats and drive around while you’re delivering food and keeping an eye out for properties. Good way to make some money while driving for deals. And number three, by the way, it seems like driving for deals is good for houses, not condos. I would agree to that. It’s probably not great for condos, but it’s great for small multifamily and houses and apartment complexes.

Brandon Turner:
Now, number three, direct mail marketing. This is where you send a letter to thousands of people. Now, there’s lots of different types of letters. There’s postcards, there’s handwritten letters, there’s type letters, but you want to send out letters or some kind of mail to thousands of people, and then some of them may turn into hot leads. A hot lead is somebody who calls you.

Brandon Turner:
Let’s just say for simplicity, you sent 1,000 letters. Out of those thousand letters, it says something like this. This one says, hi, my name is Brandon. I’m an investor in Grace Harbor. I’m interested in buying your property at address. If you’re interested in selling, please call me. I look forward to chatting. Thanks, Brandon Harbor. housebuyers.com. P.S. I can buy it even if it’s in bad condition or if it has tenants in the house. I’ve dealt with it all. Smiley faced and I can pay cash and close quickly. Call me. And then my number once more. That’s my letter.

Brandon Turner:
Yours might be a little different, but that’s the idea. Let’s just say I send out 1,000 letters, then out of those thousand letters, what’s a good response rate of people who call me? Let’s just call it 2%. 2% of 1,000 is? Anybody? 20. Now, out of people who call me, what percentage of them who call me and want to sell their property to me, what percentage of them are actually going to sell me their property? Let’s just say 1 out of 20. In other words, we sent 1,000 letters and only got one deal? What a waste of time. I’d rather go watch some TV, unless that one deal makes you $100, $200, $500, $1,000 a month on a rental property. All of a sudden, direct mail’s like, oh, interesting.

Brandon Turner:
Am I saying if you spend $1,000, that you’re instantly going to… If you spend $1,000, you’re going to get a deal? Not necessarily. Some people spend $5,000 or $10,000 maybe without a deal. That’s the game, but the game is you got to get better and better letters. How can you send a letter that nobody else is sending? Or how can you stand out from the pack? Or how can you be more consistent? How can you get them to call you?

Brandon Turner:
And then, when you talk to them, how can you negotiate a good price? How can you find a way to make a deal work more likely? It’s just a giant funnel. It’s just sales 101. This is the same thing in every industry. A lot of the industries do this. Now, somebody said, how do you get addresses for 1,000 letters? There are companies that will do that. There’s one called PropStream, P-R-O-P-S-T-R-E-A-M. Another one called ListSource. For example, let me just show you ListSource, listsource.com.

Brandon Turner:
Again, there’s lots of sites and companies that will do this for you. But for example, ListSource. Build a list. Let me do it without logging in. This is how we work. You literally get all… Geography, area code. Somebody give me an area code. Somebody give me a zip code. Zip code plus radius. 77008. And we want a radius of 25 miles, add. Somebody give me another zip code. 95062. It’s adding them. All I’m going to do is I’m going to build a list. Here we go. Actually, I’m going to just leave that one. Just that one. There are 1.7 million properties in this area.

Brandon Turner:
Next, mortgage. What if they were late on their mortgage? What if they have a loan to value of a certain amount? What if they’re… Let’s see, they have a lender orientation, a lender interest rate. What if they had an interest rate higher than 5%? Maybe I want to contact them or an equity loan. What about out the property? Do I want one that has a certain amount of equity or the value of a certain amount or the land value of a certain amount or it’s improved or there’s parking spaces or whatever, year built? Demographics, you can do that. Foreclosures, are they in foreclosure?

Brandon Turner:
How about this? I only want [inaudible 00:40:12] people that are in pre foreclosure. We have this information right here. Let’s say it’s this one. I don’t know. The idea being at the end of it, an absentee only. Let’s go absentee only, which means they don’t live in the property. Absentee only and there are 220,000 homes in this area that are absentee owned, just crazy. This is how you build a list. It’s pretty cool, right? This is called ListSource.

Brandon Turner:
There’s also a lot of… L-I-S-T-S-O-U-R-C-E. Don’t get caught up on that. I know this is an advanced strategy and it costs money and you’ve got to have a system to manage all the leads, but man, powerful stuff here. Is that cool? Was that cool to do this? All right. I want to make sure you guys are getting some knowledge out of this. I don’t want to just be talking today. Here we go.

Brandon Turner:
Those are three ways to find deals. What should you start with again, refresher quick quiz. What should you start with? MLS, very good. Everyone should start with MLS. However, these ones can be really powerful as well. And by the way, if you want to know more about finding deals, I cover more strategies in a webinar that I did called How to Find Incredible Real Estate Deals Even in a Competitive Market. I go way more in depth on this one topic. If you want to watch that, sign up for BiggerPockets Pro, be a pro member.

Brandon Turner:
All right. Number three. Let’s move on. Direction. Sherry said, I get about 30 of these letters every week in Austin. Not a good strategy. You’re right, Sherry. Sometimes direct mail works in other areas or one area versus another, but my guess is that because most of those investors are just looking for a normal list. The key with building a list to send direct mail to is sending to a unique list that no one else has thought of. If you’re just sending to landlords, they get a lot of letters, especially in a place like Austin, but what if you built your own list by Driving For Dollars, build your own list and then mail to them every month? That’s a powerful strategy.

Brandon Turner:
And by the way, there’s other things like, I talked to a guy today who does TV commercials for finding deals. I know somebody else who does radio. I know somebody else who has a billboard. I know somebody else who does text messages. I know somebody else who does ringless voicemail, where they call people. I know somebody else who runs a call center. They just call people in the call center. It’s crazy. There’s so many different opportunities for finding deals. Direction. What do you got to do to get these things? What do you got to do to get the leads coming in?

Brandon Turner:
First of all, I want to encourage you to start with a broad education. You got to get educated. How many of you right now feel like you’re in the education phase of your business? The way that I recommend thinking about education is this. Start with broad, listen to podcast, read books that are more general. In fact, the book I wrote How to Invest in Real Estate, again, I’m not trying to sell books here, please, but get it from your library. This was designed for that reason. It’s a broad education. Here’s all the different things you can do in real estate.

Brandon Turner:
Once you then know and get kind of excited about a certain thing, once you feel that fire, lean into it and then focus. Focus on that thing. If you know you want rental properties, great, focus on it. I call it the crystal clear criteria. Write this down. I don’t have a slide for this, but I want you to write this stuff down. The crystal clear criteria, what I want you to focus on is number one, choose a location. Where are you going to invest? Get specific? Don’t just say Austin. What part of Austin? Get really good at one area or two or three that you know you can study and learn all about it. Number one, location, determine that.

Brandon Turner:
Number two, property type. What do you want to buy? Single family, small multi, large multi, townhouses, condos, mobile home parks, mobile homes? There’s a lot of options. Self storage, commercial real estate, office buildings, warehouses? There’s lots. You start with location, pick a property type that works in that location.

Brandon Turner:
Number three, condition. Do you want a fixer upper? Do you want one that’s really down in the dumps. Do you want one that’s in the middle? What are you looking for? How much time and effort do you have into remodeling, in managing contractors and raising the money for that? If you want something nice, fine. Just define that.

Brandon Turner:
Number four, price range. Where are you buying price range-wise? That’s also going to be dictated by your location. If you’re like, “I’m only buying $100,000 or less.” You’re not going to find that in Austin. You’re not going to find that in New York City. You’re not going to find that in Hawaii.

Brandon Turner:
And then finally, profitability, which says how much money do the property need to make in order for you to call it a good deal. Now, that number, I usually look at two things. You can write this down, cash flow and cash-on-cash return. Let me explain the difference. The two things that I look for when I’m buying a real estate deal primarily is cash flow and cash-on-cash return. When I’m trying to buy a deal for myself, I want to know what cash flow a dollar amount will I make every single month on average. Now, my minimum typically on a single family house is a couple hundred dollars a month. I want to make minimum a couple hundred dollars a month in pure cash flow. On a multifamily, minimum of $100 per month per unit. If it’s a fourplex, 400 bucks a month in pure cash flow.

Brandon Turner:
Now, what do I mean by pure cash flow? I mean, not just the mortgage or the rent minus mortgage. I mean, after taking account all of the possible expenses, repairs, maintenance, vacancy, CapEx, property management, utilities, all of that stuff, even the things that only happen once every decade. I want to set aside $50 a month for a new roof every 20 years. I want to make sure that when I say cash flow, I mean, after setting aside money for all of those different things that come up in analysis. How much am I left with per unit? I call it cash flow per unit. Again, $200 for a house typically and $100 per month per unit on a multifamily. Now, that’s one metric.

Brandon Turner:
The other metric I look at is called cash-on-cash return. It basically says that cash flow, we just talked about a second ago, what percentage of my investment is that? If I invested $10,000 and I made $2,000 last year, what is that? It’s a 20% return. You take the amount of money you made in cash flow and divide it by how much money you invested total.

Brandon Turner:
If I invested again, 100 grand, and I made 10 grand, that’s a 10% return. Those are the two. And by the way, I typically look for between 8 and 12% on cash-on-cash return. 8% is like, that’s pretty good, I’ll do that. 10% is like, oh yeah, I like this. 12% is like… I rarely get over 12% on a cash-on-cash return in the beginning. It’s just hard to find, but it’s doable, especially you can get better cash flow if you self-manage, you take care of all your own repairs and maintenance and all that, you can get way better, but as a business, that’s what I’m looking for.

Brandon Turner:
And there’s other metrics as well, things like IRR and average return and total average return. I don’t want to go into that right now, but those are the two primary metrics I look for and I call that profitability. What makes it a good deal? And once you know that, then you can run the numbers on properties and the beauty of it is every property, you can find out what purchase price is going to make it work out. And so, real estate becomes a whole lot less emotional and a whole lot more mathematical. It’s like every property has a number that makes it a good deal, every property has a number that’s going to give me at least $100 per month per unit, and at least an 8% return, maybe 10 or 12, so let’s just work backwards to find out what that price is.

Brandon Turner:
And I’m going to show you guys in just a second how to do that, but this is the power of focus. When I say focus, I mean, get really good at those five things we just covered. That was location, property type, condition, price range, and profitability. Become an expert at that. How do you become an expert at that? By analyzing lots and lots and lots and lots of deals. The more you analyze, the more you interact, the more you know that area, the better you’re going to be, which is why I say analyze 100 properties before you get ready to make an offer, go analyze 100 properties.

Brandon Turner:
Now, many of you’re thinking, that just sounds overwhelming. I’ll show you in a minute how you can analyze deals in under five minutes. If you just did two or three a day for a month, you’d be there. You have to put in the reps. Now, a lot of you are like, “Wait a second. I thought real estate was get rich quick. Why are you telling me I got to do work?” It’s just how it is. I don’t know why people expect real estate to be suddenly easy and just make them a lot of money. Maybe the gurus are making it sound too easy, but it’s a business. Work it. But if you work it, you will get the results that you want. All right, moving on. Focus.

Brandon Turner:
And finally, that leads to process. What is the process needed to produce the results you want? Earlier, I talked about how if you want to lose weight, there’s a process that’s going to give you there. There’s a process that will get you to the weight loss you want, diet and exercise. What is the diet and exercise of a real estate investor? What does that look like? What’s going to give you the six pack… I just took this picture of myself a few minutes ago. I’m totally kidding, but what’s the six pack for real estate investors? It’s this.

Brandon Turner:
This is one of the exercises that you need to get good at. It’s understanding this very simple concept. If you want deals, you have to get leads that come in automatically or regularly, which we already talked about that today. You’ve got to analyze those leads, which we already talked about and we’re going to do here in just a second and then you’ve got to pursue them. In other words, you got to go after it. You got to make offers. I like the word pursue better than offer because sometimes, it’s not a literal offer. Sometimes it’s a conversation.

Brandon Turner:
You get leads, you analyze them, you pursue them. And sometimes they work out into a deal. Example, I once had a deal… I wanted to buy my daughter a property. You see, I have a theory or methodology or whatever you want to call it. I have a practice where I buy my kids a property when they’re young and I put it on a 15-year mortgage so that by the time they’re ready to go to college, it’s paid off to nothing. They can sell that property right then and pay for their entire college education. And in the meantime, I get to keep the cash flow. It’s awesome. It’s such a cool strategy. I wanted to buy one for my daughter Rosie, so I sent out 300 direct mail letters, 300 letters to, and I think I said it’s absentee owners who had owned their property over 10 years in this kind of unique area.

Brandon Turner:
And out of those 300 letters, I got back 40 phone calls. Now that’s a really good response rate. That’s absurd, but it was a few years ago and nobody else was doing direct mail at the time in that area. I got a really good response rate. I got 40 people to call me. Now, many of them were tire kickers and people that were saying, “F you! Don’t call me again!” But about a dozen of them were pretty legit. I sent out about 300 letters and I got back about 40 hot leads. I analyzed those. I figured out how much I can pay for the ones that were serious and I made about a dozen offers. In other words, I pursued about a dozen of them. And out of those, I pursued all of them rejected me. All of them said no, but because real estate is also about the follow-up, sales is about the follow-up, I followed up. And a month later, one of those who said no changed their mind to a yes.

Brandon Turner:
And I bought my daughter a fourplex. That’s the property that currently makes me almost $1,500 every month in profit and cashflow every single month. I also have over $100,000 of equity right now. And when my daughter’s ready to go to college, it should be worth over a third of $1 million. And guess what? We won’t owe anything on it. And so, that one deal is going to make so much… I get the 1,500 bucks right now to go spend it in whatever I want. I spend it on stupid stuff all the time, but who cares? Next month, I’ll get 1,500 more and I don’t have to work for it. I got a property manager who looks after the whole entire thing. It’s beautiful. Now, did it happen overnight? No, I mean, I had to do work to get it. It’s a process. It’s a system.

Brandon Turner:
No, I mean, I had to do work to get it. It’s a process, it’s a system, but that’s what we teach at BiggerPockets. We show you exactly how to build that, that’s what we’re teaching today. And you can do it as well, it doesn’t require rocket science, or brain surgery. It just requires a process, which is why this word I have here, process. Are you working your process? Because at the end of the day, 99% of properties out there are not deals. You have to run the numbers to find the best deal. So, let’s go ahead and try this right now in real life right now, because I want to show you guys how I do this. So, somebody give me another city in the country. Anywhere in the country. Right, let’s see. Eugene, Oregon, that would be fun. Let’s do Eugene, Oregon.

Brandon Turner:
Okay, I’m going to go in here. Eugene, how do you spell that? Eugene, Oregon, there we go. Let’s go to Eugene, Oregon, and why don’t we do like a single family house this time. Before we did multi-family, let’s look for a single-family house, so property type, single family, done. And let’s say I wanted to organize them by, let’s list them all out, and let’s go by the lowest price. I just want to see like, what’s a cheap house in Eugene look like? Okay, we’ve got 225, 225. Now, I like this one because it’s a three bedroom, that’s kind of nice. Three bedroom is bigger than these two bedrooms. Here’s one for 220, about three… Whoa, that one’s a lot. 249 for a one bedroom, one bath, that’s a little, tiny house. Yeah, I’m just kind of digging through here.

Brandon Turner:
Here’s 260 for a four bedroom? Oh, it’s pending, let’s look at ones that aren’t pending. Let’s hide the pending ones. Not that you have to, you can look at pending ones. I mean, who cares if you’re analyzing deals. How about this guy right here? Three bedroom, one bath, 299, single family house. Gorgeous updates throughout the lovely home, luxury floors, blah blah blah. It’s a nice little house. Let’s click in through. Oh yeah, inside looks really nice, they did a good job on this. So, this is totally ready right now. So, let’s go run the numbers on it real quick. $300,000 for this property. So, to do that I’m going to go over to BiggerPockets, let’s go to BiggerPockets. I’m going to go to biggerpockets.com, and at the very top of the page I’m going to click on the word Tools, that’s going to bring me to the calculators.

Brandon Turner:
BiggerPockets actually has calculators to help you run the numbers. I’m going to go down, there’s a fix and flip calculator if you want to flip houses, a rental property calculator, which is what we’re going to use right now, a BUR calculator, and a whole selling calculator. Let’s go ahead and just do the rental property one. And in under five minutes, let’s go ahead and put this information in here. So, let’s start with the address. 1625 Taney Street, Eugene, Oregon. There we go, it’s going to import some data, because we have a lot of data on this. I didn’t put the ZIP code in there. Okay, next, purchase. Let’s see. Purchase price. What are we going to buy this for? 300,000, roughly? Closing cost.

Brandon Turner:
Now, a lot of you are going, “Well, I don’t know what the closing costs are, I’m stuck, I’m confused, I don’t know what to do, I’m going to go back and watch TV, I think Dance with the Stars is on tonight.” Calm down. If you get stuck on any point of the calculators, all you’ve got to do is click these little blue links on the side, and they teach you how to analyze it while you’re analyzing it. Like, we don’t want you to be stuck, we want you to figure this stuff out. At the same time, no-one’s going to do this for you, you’ve got to figure it out. The first time you went to the gym, it wasn’t like you magically knew how to work every machine at the gym, right? You go there, you try some stuff out, you read the little labels on the side of the machines, you maybe ask for some help here and there, and you figure it out.

Brandon Turner:
And so, let’s go ahead and in this case, closing cost, let’s just say $5,000, let’s say we’re not going to be rehabbing the property, so I won’t worry about that. We’ll do 20% down at 4% interest, we’ll go to 30-year mortgage. I know I’m going quick, I want you to go through this on your own later. And then, what does this property rent for? Well, the best way to know what a property rents for is what, anybody? What is the best way to know what a property’s going to rent for? Somebody said check comparables to look at the market. Yeah, so the answer is to know your freaking market. Just to study it, to know it. Like, you should know every neighborhood that you want to invest in, and what a property will rent for there. Now, how do you find that out?

Brandon Turner:
You’ve got to look at a lot of properties, you’ve got to ask some real estate property managers, local landlords, look it up on Craigslist, on Facebook Marketplace. Or, there are companies like BiggerPockets, we actually have data. Now, data has limitations, right? Like, I can put in this… Let’s go ahead and click, get rental estimates here. Get rental estimates, it’s going to open up our rent estimator that we have. I love this, this is a great tool for analyzing deals, because it makes it super fast. Watch this. I’m going to search for this property, so this property, according to our data, should rent around 1,395, based on what other properties in the area are. Now, why did I say that? There’s some limits, drawbacks to data.

Brandon Turner:
Because we don’t know if this street happens to be for some weird reason a better street than the one next door to it, right? But, it looks like things in this neighborhood on the high end go for around 1,700, on the low end go for 1,000. So, we know we’re in that range, 1,000 to 1,700. This is why right in the middle it’s probably around 1,395. But, this is a really nice, remodeled house, so I bet we could probably get a lot higher. So, let’s just say we talk to a local… We looked at this data, we ran some numbers, and by the way, property taxes, you can pull that too sometimes. $2,400 a year, hasn’t been sold since 1998, that’s crazy. I can see what the median rent is in the area, I can see what different number of bedrooms can get us.

Brandon Turner:
Look at this, a four bedroom house averages over $2,000 a month in median rent. A five bedroom house, 2,600. So, there’s some interesting opportunities here. Let’s go back here and just say the income was… Let’s say we talked to a property manager and looked at the data, and we think we can get 1,600 a month, okay? Now, taxes. Oh, I already imported the taxes, which is great, $201 a month. Insurance, let’s call that a hundred bucks a month, we’ll do $100 a month there. Repairs and maintenance, now, if you don’t know how much the budget for repairs and maintenance, maybe we say, click on the blue link, you can learn. I typically go on a nice house like this, probably about 5%. Vacancy, about the same, CapEx, about the same.

Brandon Turner:
And then management, I’m going to hire a property manager for, let’s call it 10% of the rent, and they’re going to take care of this property for me. The tenant will pay their own electricity, their own gas, their on water, sewer, their own all that, garbage, I don’t have to worry about any of that. And that’s it. So, somebody said insurance is on annual. No, insurance is on monthly, right here. $100 monthly. I changed it, it was on annual but I changed it to monthly. So, here we go. Let’s go ahead and click Finish Analysis. All right, based on what we just ran, our cash flow, -$267 a month. Ouch. Why? Well, let’s go down and look. We can see our mortgage payment alone was like $1,100. Down below that, I can see that a mortgage, taxes were a couple hundred, insurance, the variable expenses, which was the vacancy, maintenance, CapEx, management, all add up to $400.

Brandon Turner:
So, after all is said and done, this property loses $267 a month. So, you know what I would do in this case? I would throw my hands in the air and say, “There’s no good deals in Eugene. I quit, and I’m going to go back to watching The Bachelor, because that’s easy. Real estate’s hard.” The truth is, remember what I said earlier? Every property has a number that could make it a good deal. There’s two ways to look at this problem, three ways. Number one, we give up. Number two, we lower our purchase price, we lower what we can pay for the property. Or number three, we find a way to increase our income, or decrease expenses. In other words, we find a way to make this deal work. Now, not every deal can be salvaged, not every deal will work. But remember what I just showed you guys a minute ago?

Brandon Turner:
According to our data here, a five bedroom house could potentially rent for almost 20, or like 2,675 a month. That’s interesting, isn’t it? So, what if this property, which has how many square feet? I think it was pretty large, like 1,800 square feet or something like that, wasn’t it? Oh wait, no, this is 900 square feet. There’s no way we’re getting more bedrooms out of this thing, so forget I said that. I was going to say, what if this property had like 2,000 square feet? Could we add another bedroom? Or, what if it had a basement? Or, what if it had a garage? It does have a garage. What if we took the garage… This is actually a true question. What if we took this garage, turned it two more bedrooms, and then we just put up a carport. Could that do it?

Brandon Turner:
Well, let’s try. Let’s click edit, and go back in here again, and let’s say this time we’re going to be rehabbing it, and let’s say it’s going to be worth 400 by the time we’re done. And repair costs, we’re going to spend $30,000 turning it into a five bedroom property. Okay, let’s just say like we did that, right? That was weird, it said 29 years. Down below that, instead of 2,600 now, we’re going to actually get… Or is that a 1,600? We’re going to get 2,600 a month out of this property. Does that make it a good deal? Let’s find out. Check this out. So now, if that’s the case, if we’re able to do that… Again, I don’t know if we can, but this is just thinking creatively. It’s mindset, right? $500 a month in cash flow, which is a 6.36% return. Oh, it’s still not good enough, it’s still not good enough.

Brandon Turner:
I want 8% minimum, right? I said that earlier, I want 8%, and at least 100. We got the couple hundred dollars a month, I might be willing to fudge on my cash in, cash return, but I don’t want to. I’m going to lower my purchase price down to, let’s say 250, and I’m going to drop my loan amount to 80% still. And let’s say we got an interest rate, instead of 4% we got a 3.5, okay. Check this out. Now, I’m at a 10.6. So, all of a sudden now… And $750 a month in cash flow. Would you buy this deal, if you could do it for… Now, again, I don’t know if you can turn this garage into two more bedrooms, I don’t know the market. This is why you need to understand your market, by analyzing 100 deals… I love it. Nicola said, “Well, what is this showing?”

Brandon Turner:
It’s showing that you’re $750 a month closer to being retired. How many of these properties would you have to buy in order to achieve financial freedom? 10 of them? Five of them? So, again, I just want to show you an example of how to think creatively about real estate. I don’t believe this deal is ever going to work out. Like, I honestly don’t believe they’re going to lower their price to 250, it just came on the market. I don’t believe I’m probably going to turn that into two more bedrooms. I just want you guys to start thinking, “How do I make this a good deal?” You see, amateur investors say, “Is this a good deal?” But professional investors, they ask, “How do I make this a good deal? By either dropping my price, or by changing something about the dynamics of the deal.”

Brandon Turner:
And when you start thinking that way, you will find so many more opportunities out there. But, far too many people spend their time going, “Oh, there’s no good deals in my market.” And maybe there’s not, maybe you should just give up and go sit on the couch, and watch some Dancing with the Stars. But, my guess is that’s not you. One last thing I’ll tell you about the calculators real quick is, once you feel like you have a good spot, it’s save changes, and then you can share this report. I could upload my own company logo to it, let’s say I wanted to upload my logo. Beardy Brew, let’s say I wanted to do my Beardy Brew logo. Right there, Beardy Brew logo. Yeah, I’m actually coming out with a coffee brand called Beardy Brew, pretty silly.

Brandon Turner:
And then I can download a PDF report of this so I can give it to a lender, or to a partner, or to a spouse, or to whoever I want to give this to… Oh, that’s funny, my logo’s all white, which is why you can’t see it. Anyway, don’t do a white logo. But yeah, now I can show this to somebody and say, “Hey, this is why this deal makes sense. Here’s one, two, five, 10, 15, 20.” What does this show? It shows you know what the hell you’re doing, and that you can be trusted, because you understand the math. You have systems, you have processes, you have a machine that can help you get good deals. So, I show this to all my lenders, all my partners, everything. You can upload as many photos of the property as you want to, so there could be a big photo up here. It’s pretty sweet.

Brandon Turner:
So, anyway. Somebody said, “Well, what if we don’t know what we’re doing?” Analyze 100 deals and ask me that question again. Go analyze 100 properties, and ask me that again. So, there you go. So, anyway, I love this thing. Somebody said, “You could just make a spreadsheet and do this on your own.” Of course you could. But, you know why I don’t do it? Three reasons. Number one, a spreadsheet’s really easy to make a mistake on. If you have one comma in the wrong place, or a period in the wrong place, or you forget to close the parenthesis, you can buy a deal that you should never have bought, because you didn’t understand the math that goes into it. And they get bugs all the time, like, I used to have tons of spreadsheets, and I’ve bought properties based on bad math.

Brandon Turner:
This is not amateur hour, if you want to be amateur hour, fine. But it’s like, “I don’t need a personal trainer to lose weight, I don’t need a gym, I don’t need machines, I’ve got a cow to the side, I’ll just bench a cow.” You can do whatever you want, I don’t care. It’s just, we make it easier. Number two, the PDF report makes things look really nice. When you’re going to raise money, like when you’re going to go try to find lenders or partners, showing people that really pretty design with the charts and graphs and color, all that helps quite a bit. And number three, it keeps you organized, and if you’re not organized you’re not analyzing, if you’re not analyzing you’re not offering. So again, if you want to go make your own spreadsheet, I don’t care.

Brandon Turner:
It’s just one of the many benefits of being pro. But, it’s just included as part of a pro membership, so it’s definitely something to consider. I don’t use a spreadsheet for smaller deals. Now, on my gigantic apartment complexes, sure, we’ve got a super fancy… Like a machine of a spreadsheet that we use for the big deals, because the BiggerPockets calculators, they tap out about 30 or 40 units. Once you get into the syndication, don’t use BP calculators. But, everything under that, I still use the BiggerPockets calculators for all of my own small deals, and if I have a partner come to me I won’t let them send me a spreadsheet. I’m like, “No, I don’t have time to go through all your special fields on your spreadsheet to figure out where you screwed up.

Brandon Turner:
“Show me something that’s been standardized and used by tens of thousands of people, and I’ll work with it.” So, again, choice is yours, but that’s how I do it. All right, so, again, if you want to know more about that stuff, I’ve done a webinar in the past on analyzing deals. The primary one that I do that on, it’s called The 90 Day Challenge, how to buy your first or next rental in the next 90 days. You can watch that pro replay by going to biggerpockets.com/proreplay. Okay, I’m going to start wrapping things up here, we’ve got about 20 more minutes of today’s class. But, let me ask three questions. Number one, are you committed to buying your first, second or third deal in the next 12 months, yes or no? And be honest.

Brandon Turner:
If you’re like, “No, I don’t want to buy anything in the next year,” that’s fine. I just want to get a feel for where’s everyone at right now. Yeah, I’m seeing a lot of yeses, I see some capital yeses, and some exclamation marks. I love exclamation marks, I love passion. I love people who are like, “This stuff is amazing, I want to do it so badly,” because you guys are the ones that are going to make this thing happen. It’s not always easy, but if you want it bad enough, you’re going to get it. Number two, are you prepared… This is a more important question, are you prepared to follow a process towards success? You see, I could ask a lot of people, “Who’s going to lose weight this year?” And everyone goes, “Woo, yeah I am. Who wants a six pack? Woo.” Maybe not.

Brandon Turner:
“Who wants to make more money? Woo.” Who’s going to follow a process to do that, who’s going to diet and exercise every single day this year? “Woo.” It’s a lot quieter, right? So, who’s going to actually follow the process to get that success they want? That’s the more important question. And number three, perhaps the most important question of all is, are you actually going to execute on your plan daily, and regularly, consistently? I don’t care if you have the best… You’re in the best market, you’ve got all the money sitting there, you’re ready to invest, you know what you’re doing, you’re excited. But if you don’t consistently work your plan, you’ll never get the results that you want. So, are you going to execute your plan until you reach your goal, until you hit your potential?

Brandon Turner:
Good, I hope so. Because remember, as Jim Rowan once said, he’s a great speaker. Jim, he died now, but he’s awesome. He said, “Life doesn’t get better by chance, it gets better by change.” And what I think he meant by this was not just changing what you do, which is a piece of it. Life gets better when you change your actions, but really, what we’re talking about here is changing your identity. Are you an amateur, or are you a professional real estate investor, or soon to be? What does a professional real estate investor do? They get a lot of leads, they analyze them, they make offers. They read books on real estate, and they read books on business, they listen to podcasts, they attend webinars like this. And so, life doesn’t get better by just chance.

Brandon Turner:
It gets better when you decide that you are not going to be the same that you were yesterday. So the question for all of you, kind of the final question is like, is that you? Are you ready to make this a pivot moment in your life? Like today, you’re going to not just take the steps you learned today and store it away for future. But, will you take what you learned today and make a 5% shift in your life? You know, a plane taking off from New York, going in a straight line to LA, if it veers just 5%, it’s going to end up in like San Francisco or Oregon. A small pivot, a small shift, a small change carried out over a long period of time results in a massively different end point. So, I want every single person here to look back on this moment and go, “That was the moment, years ago, where I made a pivot.

Brandon Turner:
“That was my pivot year, that was my pivot month, my pivot week, my pivot day, where I took the stuff that I learned and said, ‘No more of who I am, I’m changing who I am.’” If that’s you, say yes. Yes? Good, all right, you guys rock. Okay, let me shut off my video for a second so I can go fullscreen, I want to show you guys this. I want to talk for a minute about BiggerPockets Pro. I’ve talked about it numerous times today, mentioned it. But, I want to talk about why it’s so important. I mean, essentially the idea of BiggerPockets Pro is to help you become a better real estate investor, to actually do that. I mean, how many people want to get into real estate, and they come to these seminars, or webinars, or they read my book, or whatever, and then they never take any action.

Brandon Turner:
So, we designed a pro membership with everything you need to actually transition, make that jump from want to to become. Or, if you already are a real estate investor, to make it better, make you more profitable, make you more successful, make you risk less. So the idea is, BiggerPockets Pro helps you analyze properties to get your next deal faster. That’s a big piece of Pro. Now, it does more than that, but it helps you… A big piece of it is the analysis part. So, let me go through a little bit about that. I showed you earlier obviously the, you’re going to analyze those properties in just minutes, figure out which ones are worth pursuing, or which ones you don’t want to. Honestly, one of the most important parts of the whole calculator is like, to know which ones to say no to. It’s really easy to let emotion cause you to buy a bad deal.

Brandon Turner:
But when you stick to the math, when you use the BiggerPockets calculator, it’s going to help you a ton in that. So, you get unlimited access to that with those rent estimator calculators. So, definitely play with that, try it out. Also, you become a better real estate investor with curated articles and video content. You get webinar replays, exclusive articles, basically a ton of content that is only available for our Pro members. So, you can make smart investment decisions, avoid bad markets. I mean, honestly, some of the best content is the stuff that Dave Myers put out there, and others with just data. Like, these are the good markets, these are the rough markets, this is what you should be focused on, here’s where the economy’s changing.

Brandon Turner:
And honestly, in today’s world, things are changing rapidly. So, we put all of our really, really high-end data stuff for Pro members only. And it’s super easy to understand, it’s awesome. Again, workshops, classes, more, it’s all available for our Pro members. Also, as a Pro member, this might sound silly, but there’s just something powerful about having that Pro badge next to your name, everywhere you go on the site. I mean, BiggerPockets is a networking site, so when you have that Pro badge you show everyone that you are more than just the newbie who showed up once and was taking. No, you’re involved, you’ve sacrificed, you’ve put some money where your mouth is. So, having that Pro badge definitely makes you stand out, everyone sees the little Pro badge.

Brandon Turner:
That is an old photo of me, I need to upgrade that, update that thing. But, the idea being everyone sees that you’re a pro, and so they’re more likely to take you more serious. Also, as a Pro member, if you end up owning rental properties, you… I’ve heard so many stories of people using just crappy leases they find off the internet that aren’t approved in their state, and they just cause legal problems down the road. So, what we did is we actually work with 50… Actually, I think it’s 51 attorneys in all 50 states, plus DC, for lawyer-approved lease documents. So you get move in, move out checklists, the actual lease agreement, all this stuff, like pet addendums, and all that stuff for our Pro members. Again, state-specific with an attorney approval on it, which is pretty awesome.

Brandon Turner:
Also, as a Pro member, you can save thousands of dollars on loans and other tools that you’re going to use in your real estate business anyway. So, stuff that you’ll probably end up paying for at some point, we actually negotiate discounts on your behalf. Now, one of those things also as part of the parks membership is these boot camps that we’re doing. So, we’ve got these educational boot camps that are only available to Pro members. Now, there is an additional charge for that if you do decide to do one of the boot camps, because they’re pretty intense. They’re like week after week after week, and you show up, you have homework, and you have all this stuff. So, they’re pretty intense, but they’re not like $50,000, they’re inexpensive.

Brandon Turner:
But the thing is, we only make them available to our Pro members. So, you have to be a Pro member if you want access to any of our boot camps, and I promise you you are going to love the boot camps, they are amazing. So, definitely check those out. So again, these are some of the discounts you get with the different companies. But then again, I think you’ll love those boot camps. Also as a Pro member, you get to use the BiggerPockets rent estimator tool, which is awesome. You can look at different areas, where’s the high rent, where’s the low rent, figure out what your property’s going to rent for, it’s just really, really nice for that. Because honestly, when you’re just at a high level trying to look at a market, you don’t know what rent is in that area a lot of times.

Brandon Turner:
So, until you know more, the BP tool is amazing from being able to dig in. This is kind of what it looks like right here. See what the median rent is, what our confidence is based on the data, different… Over time what it’s looked like, you get a little map. No, all of that’s cool obviously, all that stuff is cool. But, number one reason to consider going pro is actually none of that. Or maybe it’s all of that, and what I mean by that is the number one reason to consider Pro is because it just plain works. We have story after story of people who have gone Pro, and then used the tools to analyze deals, or define things, or to reach out and build connections, and then they go buy properties. Like Erin here, “I locked in my first three unit almost a year ago.

Brandon Turner:
“I’m now selling it for a $70,000 profit that’ll go towards something larger. The BiggerPockets calculators were a huge factor in making sure my numbers were right.” This one from Patrick, Pro member. Attended one of my webinars, signed up for Pro, next couple of weeks analyzed a bunch of deals, found a four [inaudible 01:14:52] contract and then closed another property that was six units. “So, big thank you to you and the entire team. Final pro tip, sign up for Pro, I made the money back at the closing table.” So actually the story from him a few months ago, and then he just… I just talked to him the other day about this, and he was like, “Yeah, you know that deal I mentioned to you that I got after I signed up for Pro?”

Brandon Turner:
He was like, “That ended up being a base…” It turned from a base hit into a ultra grand slam out of the park. And so he’s a guy that I want to actually bring on the podcast at some point to share his story, but he said that deal ended up just killing it, which is pretty cool. So, anyway, now, for those of you who are on the fence, you’re thinking, “Now, maybe I want to go Pro someday.” Let me give you a little encouragement to take action on your goals today, and that is, we are actually going to drop the price by 20% for your first year of a Pro annual membership. So, instead of paying that 390 amount, we’re going to drop that down to $312. So, again, we’re going to save 20% on your annual Pro membership, your first year, by using the code on the screen right now.

Brandon Turner:
Podcast21, no spaces, just the word podcast, and then the numbers two, one, podcast21. Jot it down right now, like on a piece of paper, and then when you upgrade to Pro if you decide to do that… Again, it’s solely up to you. If you think it’s going to help your business, do it, if not, don’t worry about it. But, write down the code so you remember it later. Also though, just for the people who upgrade to Pro annual today, it’s a limited time offer. We are going to include the Intention Journal, that is a journal that I actually wrote, or I made for myself to keep me on track with my goals, and then I’ve been using ever since. And I loved it so much, I was like, “Well, why don’t we just print thousands of copies and sell them on BiggerPockets?”

Brandon Turner:
So, we sell them on BiggerPockets, but you actually get it shipped to your house so you can actually keep track of your goals. It’s awesome, there’s weekly stuff, daily stuff, it’s amazing, I love it. Now, a lot of you guys are stuck right now thinking, “Well, this all sounds great, Brandon, but I still don’t have any money, I can’t do this thing.” David Greene and I, host of the podcast, we got tired of everyone saying they can’t invest in real estate with no money. I even wrote a book on the topic, but still we hear it all the time here on Webinars. So, we actually sat down for like four hours, and recorded a nine-part video series called Investing with No or Low Money Down Workshop. We go through nine different strategies, plus a Q&A that we recorded doing it, because we actually did it live for our Pro members.

Brandon Turner:
And that is included, and this is the only way you can get this. We don’t sell this, it’s not included with any book purchase. The only way to get it is by upgrading to BiggerPockets Pro, and using that discount code I gave you a minute ago. Now, the other problem people tend to have is they might have the money, but they don’t know how to find deals. And I’ll admit, it’s the hardest time to find deals it’s ever been. But, people are still buying deals, I’m buying deals. In fact, I just got a property under contract, I’m closing on it next week. A small one, like a condo, that I’m going to use for vacation rentals. And then of course I’ve got some massive properties that we’ve been buying a ton of with Open Door Capital.

Brandon Turner:
That’s my company, Open Door Capital, ODCfund.com. But yeah, we’re still buying deals. So, how do we do that? Check this out. We actually put together a finding great deals masterclass, it is a $990 value. I sit down with some of the best deal-finding investors that I know, guys that are super legit at finding properties, and I just ask them, “How are you doing it? How are you finding properties?” And apparently I can’t spell the word success down there, so let me add another S to that. There we go, much better. Anyway, super cool, and I put together a book called The Best Ways to Find Real Estate Deals for Investing Success, The Complete Guide. It’s got a ton of different tips and strategies for finding…

Brandon Turner:
The complete guide. It’s got a ton of different tips and strategies for finding properties in today’s market. They’ll definitely check that out. So, yeah. Anyway, I think you’ll like that a lot. I mentioned this earlier, so I just show it, what I’m talking about with this bootcamps. Again, cohort based bootcamps, including topics like getting started, short term rentals, multifamily and more. I think you guys are going to love that. I highly recommend it. Again, those are discounted for y’all and they’re only available for pro members. So that’s it. That’s everything you get. If you go pro annual today, there’s a list right there. You can see everything you’re going to get. But keep in mind, this is for pro annual, not for monthly. There is a monthly option, but we don’t give you all these goodies for going annual. Our annual people means like when you go annual, you’re saying, look, I’m in it for good.

Brandon Turner:
I’m not going to test it. I’m not going to try it. I’m not going to try it this month, and then next month I’m going to try selling Tupperware. And the week after that, selling something else. No, I’m in it. I’m a real estate investor. I’m doing this. That’s why we’re like, look, we want to incentivize people who take massive action. So it’s for annual membership only. Now, many of you are wondering, wait, I’m already a pro member, Brandon, don’t leave me out of this. I’m not going to leave you out of it because you guys are here. You stuck with me the whole time today. You can also get this stuff. So write down this URL or take your phone out, take a picture of this, take a screenshot, whatever you got to do. And you can get that same video content, all those courses and stuff in the ebook there, you can get it by going to bigger pockets.com/pro/videos, if you’re already a pro member.

Brandon Turner:
And if you upgraded, let us know, shoot me a message over on Instagram or put it on your Instagram and tag me in it at Beardie Brandon, Beard with a Y. Go on the Facebook group, the bigger pockets Facebook group and let everyone know there. You have to go to pro. Connect with people network again, it’s exciting time. So don’t be afraid to talk about it. And finally, last point before we move on, the bigger pockets guarantee. Look, we really, really believe in a pro membership. Everything we’ve done is to help you achieve better levels of success by being a pro member. So if you don’t think that’s the case, get a full refund, like literally try it out. You don’t love it. Shoot an email over to [email protected] They’ll get you a full 100% refund just for trying it out.

Brandon Turner:
Like I’m that convinced you’re going to love it. And in that 30 days, shoot, go watch all those videos, go watch everything. Take, advantage of all the information. And at the end of it, you don’t think pro’s going to help you fine, no harm. We want you to be successful. See, we think the best business is one where you win and we win. So bigger pockets wins when you win. Both people are successful, both people are growing and I think it’s a good business model. Agreed. All right. So last point, leave up here again. Upgrade to pro. I got the code there on the screen again, bottom right hand corner there at podcast 21. So when you upgrade to pro you get pro annual, you get all that stuff plus that 20% off your first year pro. So I hope you do. And I’m super excited about just kind of the future where you’re headed, where I’m headed, where the real estate market’s headed.

Brandon Turner:
I’m super excited for all that. So with that said, I guess we’ve got to move on. We’re almost out of this thing today. I know we went a while there, but I’m just super fired up and passionate about this stuff. Hope you guys are as well. I’ll say the last thing before I move on. I know what it’s like to be on one side of the financial freedom, I guess continuum. And I know what it’s like being on the other side. I know what it’s like to be broke. I know what it’s like to be having a job I don’t like. I know what that’s like, I’m just so passionate to help people get out of that. And so if pro can help you do that, then go pro. If you don’t think it will, then don’t worry about it.

Brandon Turner:
But man, I think it will. So all right, moving on. All right. Right. So let’s leave this up here and let’s do some Q and A, what questions can I answer for y’all? Joanie asked a great question. So Joanie said, how possible is it to still find cash flowing properties in this tight market? It’s entirely possible. In fact, let me just ask a question here on this live webinar, how many of you have bought a cash flowing in the past six months? It’s been crazy for a little while now. How many of you have bought a cash flowing property in the last six months? Can I tell you got something cool? I got my goal for the year was to buy 62 million worth of mobile home parks. That cash flow from day one. Last week, we got 64 million on our contract.

Brandon Turner:
So I got to raise some money on, but like there are still deals to be had. Big deals of small deals, whatever. But let me just scroll down. Yeah, I have downtown Charleston. Me. I did, me. Yes, yes. So yes, there are deals to be had. The key though, is you, they’re not just sitting there waiting for somebody to come up and take them. You’ve got to be thinking smarter. This is not 2012 anymore. So what I mean by that is what we talked about earlier. You have to either think what price can make this work on a listed deal, so offer less. That’s hard today. That’s the hardest thing today, because it’s such a competitive market. Or you got to think creatively. How do I make this a good deal? Remember amateur investors say, is this a good deal? Professional investors say, how do I make it a good deal?

Brandon Turner:
So think about, can I add bedrooms? Can I remodel the basement? Can I Airbnb it instead of a normal rental? Can I do senior housing inside this property? What can I do? What game can I play that turns it into good deal? And there aren’t always answers. Sometimes it’s a dead deal. But thinking that way will help you get many, many more deals over your life is when you start thinking how. And then of course the other avenue is off market deal searching. Start looking off market for properties. You’ll find them. All right. Jason said does open door capital do any 506B offerings? So let me give you guys some quick education on 506B is 506C. I know this gets a little in the weeds, but I think this is super important for people to know, especially if you’re going to ever raise money. A 506B is a type of way to raise money in which you can raise money from pretty much anybody, but you have to know them.

Brandon Turner:
You have to know them well and rich, poor. I know there’s some details there like how many you can raise from. But basically like if I want to do a 506B, I could raise money from people that I know and they don’t have to be rich. A 506C means they have to be rich or we call them accredited. Accredited means you make a few hundred thousand dollars a year. You got a million dollar net worth not counting your house. There’s some stuff there. But anyway, 506C says you can only raise money from wealthier people. Now, why would you choose a C? In fact, open door capital, my company, so far has only done 506C. Why is that? Because 506C allows you to talk about it publicly and advertise. So in other words, the very fact that I’m making this video right now is why I have a 506C.

Brandon Turner:
Now down the road, we may build relationship with people and we may offer 506Bs. But right now we’ve just used 506C cause I have the podcast. So if you want to raise money, there’s two avenues to do it. And there’s other ways as well, there’s crowdfunding and other things. But those are the two primary ways to it. 506B 506C. So think about that for your own raising. All right. Other questions. So no, we do not right now, but maybe we’ll but we have to be friends. Nicholas asked, should I start an LLC before I purchase my first property? No, next question. I’m just kidding. I’ll elaborate. Maybe. An LLC protects you in several ways. In fact, there’s actually a video I did recently with my CPA and an asset protection attorney where we talked about nothing but this topic. It’s going to be a pro only feature coming out soon.

Brandon Turner:
So if you’re a pro member, you get access to this LLC masterclass that we’re putting together. It’s just not quite edited yet. So I don’t have it all done yet. But the basic idea behind the LLC has to protect you in case you get sued. If you get sued and your insurance is then enough to cover what you got sued for, you could lose your house or your car or your kid’s college education. You don’t want to do that. So an LLC kind of protects you. But most people, when they’re getting into real estate, they don’t have anything to protect. You don’t have a lot of assets to protect. And so, in fact, it’s even like when you’re trying to buy real estate, sometimes it’s difficult to use an LLC because banks don’t want to lend to an LLC on a small deal. They want to lend to you personally.

Brandon Turner:
So should you use an LLC? If you’re buying small deals and you’re buying it using a conventional mortgage from a bank? You don’t necessarily need an LLC. In fact, you might not be able to. Now you could transfer into an LLC later, and there’s some pros and cons to doing that and some risks to that where banks might not like that, but it’s doable. And that’s what I’ve done a lot. And that’s what a lot of investors do. But the bottom line is this it’s a $500 question. Ask your attorney, ask a protection attorney and ask them and talk to your CPA and ask them. Get them both on one call or watch the video that’s coming out from bigger pockets and you’ll get a good understanding of the LLC issue. And from then on forward, you’ll be able to, I guess, from then on forward, you’ll you’ll know the answer and you don’t have to like question anymore. But for most people it is not required.

Brandon Turner:
It can be helpful though. Long story short, it’s not required, but it can be helpful. Speaking of long story short, I wrote a song the other day, not the other day. It’s been a little while now, but I recall it. Long story short it’s country song. I’m going to put it on my Instagram shortly in the next few days. Make sure you’re following me Instagram for that. It’s a funny song. You’ll like it. Makes me laugh. Oh, let’s see. All right. Somebody asked a question. Can you buy a multifamily, a duplex using the first time home buyer program? So let me first explain this most likely what you are referring to when you’re talking about first time home buyer program is called the FHA loan. That’s what everyone considers a first time home buyer program, but shocking news here, FHA is not a first time home buyer program.

Brandon Turner:
In fact, it’s used by a lot of first time home buyers, but it’s not a first time home buyer program. Anybody can use an FHA. I can go get an FHA loan right now. Now the key is you can only have one though. And so FHA loans can be used typically on a single family house, a duplex triplex or fourplex. Now there literally are some first time home buyer programs. They’re usually like state specific or county specific, but just most people, they’re not worried about them. What you’re thinking of I’m sure is an actual FHA loan, which again, yes, you can buy small multifamily. As long as it’s four units or less.

Brandon Turner:
You can usually qualify for that. And it’s great because it’s three and a half percent down. So like you don’t have to put 10, 20, 30% down. You just put three and a half percent. So on a $200,000 property, it’s $7,000 down and somebody can gift you that money. You can have a family or friend give you that money as a gift, which is awesome. So yeah, there’s a lot of good reasons to do FHA, but the key is you got to live in the property. If you’re going to do a multifamily, you have to live in one of the units or you have to live in the house and you have to intend to live there for at least one year. So that’s how the FHA works. All right.

Brandon Turner:
Ooh. This is a great question. I love this Tamara or Tamahra. I love this. How important is it to buy… So the question was how important is it to buy a home with equity already in it? I’m looking at turnkey properties in Memphis, Tennessee, and I fear I’m missing out on the built in equity and I’m over paying. Let me break that question down because this is super important. So equity is a difference between what you owe on a property and what it’s worth. If a property is worth a hundred grand and you owe 80 grand, you’ve got 20% equity. You’ve got $20,000 of equity in there. So equity is great, why, because if the market goes down, you’re not underwater. You don’t owe more than what it’s worth. The market would have to really go down for you to be underwater. Now, then it begs the question, well, why does it matter if you’re underwater?

Brandon Turner:
Well, if it’s just a rental property, it shouldn’t matter that much. For house flipping, yeah, I don’t ever want to be underwater on a house flip and I don’t like to be under of water on a rental property, but if I have a 30 year fixed mortgage that goes out for 30 years and the market goes down a little bit, do I care that I’m underwater as long as it’s a long term mortgage and as long as it’s making money every single month and I’m never going to have to sell until I want to sell. So do you need equity? You don’t need it. I mean, I like equity. I would prefer to have 20 or 25% equity in every property I own. I would love that. But sometimes it’s just not possible because you’re going to use like an FHA loan, which is three and a half percent down or a 5% down conventional loan.

Brandon Turner:
In that case, you wouldn’t have the equity, but if you’re going to buy like a turnkey property in Memphis, chances are you’re going to have to put down a 20% down payment or 30%. Well guess what? There’s your equity. We call that buying equity. You bought that equity. You paid the money to get that equity with a down payment. Now there’s other ways to do it. You could buy a fixer upper and then build equity. Let’s say you bought a property for like 80 grand. You put 20 grand into it. So now you got a hundred thousand total invested in it, but it’s worth 150. Now you built that equity. The third thing you could do is you could find equity. You could just find it like it could be like I found a hundred thousand dollars property, but I got it on sale.

Brandon Turner:
It’s only 75 grand. You found $25,000 of equity in today’s market, that’s really hard to do. It’s really, really hard to do. It’s doable but it’s really hard. So that’s like the least likely. And then the fourth way with equity is over time you’ll get equity. Because over time your property value will go up. Yes, it goes up and down over time. But like it generally goes up into the right or at least it always has. And over time your mortgage gets paid down. So equity increases over time. So even if you don’t have a lot of equity today, you probably will three years from now or five years from now or 10 years from now. You almost for sure will. So is it a big deal not to have equity? Not a big deal. I would prefer to have some, but I would rather have great cash flow than great equity.

Brandon Turner:
I’d rather have a great cash and cash return and great cash flow and great property and a great market and a great neighborhood and great property managers and great contractors. I’d rather have all of that over equity. All right. Somebody asked me, should I put 50% down on one property or 25% down on two properties? I mean, I would say depends on your risk tolerance, but for me, I would rather leverage and get more properties because the return is going to be greater typically. In other words, like the more profits I own, like I’m going to get a higher percentage on them because I put a smaller down payment because mortgages are what, three, 4% right now. So I like mortgages personally. I like having them as long as the property cash flows. As long as I make profit every single month and a good profit every month, I’d rather have more properties.

Brandon Turner:
I mean, think about it this way. If the value of that property were to double over the next 10 years, would you rather have one or two? Two, right? If you’re going to double the value, if you could buy a $200,000 house or two, $200,000 houses, I’d rather buy two because then 10 years from now, if they both doubled, I’d have $400,000 in each of them. It’s way more money, long term. But again, that all depends on my ability to find properties that actually cash flow right now. So I can survive that. And I also want to make sure I have good income in my life to be able to justify in case I ever go through bad times. I want to have reserves. I want to have good cash flow from my job or from businesses or from flipping or from whatever.

Brandon Turner:
So I can hold through hard times. Real estate works over the long haul almost always. Like it’s hard to fail when you hold it long enough. And so that’s kind of how I look at it. Now, of course, more leverage 25% down instead of 50. Yeah. You’re going to have a higher mortgage payment. You’re going to have a little bit more risk. But for me personally, I’ll take the higher risk for the better reward. I’d like to say no risk it, no biscuit. All right, what else we got here? Kevin said, Brandon, I just buy two of your books. Kevin. I love you. Besty. Besty. Ryan said, how do you get a second or third property when you have that higher debt to income ratio? Help please. Oh, I love this question. Okay. This gets a little bit complicated, a little into the weeds, but let me try to explain what Ryan is talking about here.

Brandon Turner:
Debt to income ratio is a ratio or a percentage of how much debt you have compared to how much income you have. So if you are paying out $3,000 in debt payments, every single month to credit card, student loans, your mortgage, all that, 3000 a month, and you earn $10,000 every single month from your job, that is a 30% debt to income ratio. So the question is, if you just keep adding mortgages, doesn’t that just mess up your debt to income ratio? Yes, it does. It can hurt your debt to income ratio. So how do we deal with that? Well, first of all, understand that the first couple years of owning rental properties, the bank doesn’t look at the income you’re receiving. It doesn’t count that income until you’ve been a landlord for two years. That’s typically how it’s done. So in other words, get your first property now.

Brandon Turner:
Even if you have to just buy like anything, just buy a house or buy something, get the two year clock ticking. So eventually the bank will start two years from now, will start counting all of that income you’re getting and that’ll help keep your debt to income in check for a while longer. So that definitely helps. So in the beginning it’s a little bit tough to buy your own deals. What’s the solution around that, or besides that, if that still doesn’t matter, partner with somebody or do seller financing or do lease options. I mean, I wrote a book called the book on investing real estate with no and low money down. And in that book, I go through like a dozen different, no and low money down strategies and none of them involve a bank. I mean, they could, pieces of them might involve banks like with the birth strategy or partners, but you could do any of them without a use of a bank.

Brandon Turner:
And if you’re not using a bank, then you don’t really need to worry about debt to income ratio. Now the next piece is once you get into commercial real estate, meaning like apartment complexes, self storage, mobile home parks, whatever, which eventually you’ll probably get into. Banks don’t really care about deb to income ratio anymore because they know it’s going to be out of whack. They know that you’re not going to be able to pay a million dollar a year mortgage payment so it’s not about you. It’s about the property. Now, they still want to say you have good credit and you still have a good source of income and you got reserves. I’m not saying they’re just going to give everyone a mortgage on a commercial property, but it just becomes a lot easier. It’s very similar to the question people have often of like, how do I finance more than four properties.

Brandon Turner:
I heard a bank will only let me have four mortgages. Well, some banks are four. Some are five, some are 10. Each bank might be different, but there is a limit on how many residential mortgages you can have. But let me tell you this. I have never met a person in my life who stopped and said, well, I got my four loans or I got my 10 loans. I guess I’m done. Everybody figures it out when you get there. The only people who have that question are people who don’t have any real estate yet. Because once you’re in the game for a few years, you figure it out. There’s so many ways, creative ways to pull it off and figure it out as well. So don’t get caught up in the idea that you can’t do it because of debt to income or you can’t do it because of credit or you can’t do it because of the four mortgages or whatever The thing may be that that you think is going to stop you.

Brandon Turner:
There are ways around everything. Millions of people invest in real estate, very smart people. And they have figured out solutions to all these problems. It’s like Marie Forleo, who was a guest on our podcast. She has a book it’s called everything is figureoutable. Everything is figureoutable, if you want a bad enough. Or in the words of Jim Rowan, if you want it, what is it? If you, if you want it, what is it? Yeah. If you want something bad enough, you’ll find a way, if not, you’ll find an excuse. That’s it. I love that quote. Right? So if you want it, you’ll figure it out. Hope that helps. All right. One more. Let’s do one more question. I know there’s a million of them here. Oh, Santosh or Santos said, where do we access the bonuses for signing up?

Brandon Turner:
Yeah. So if you go to your bigger pockets account, when you’re logged in, go to your name on the upper right corner where it says your name, you see my screen here. It like little pic, not says your name. It shows a picture of your avatar, scroll down to bonus content. That’s where it will live after you sign up for a pro. All right, last question of the day. And let me just say this. Thank you everyone for coming today. I hope you guys enjoyed today’s class. Hope you learned a lot. And most importantly, I hope you’re going to take what you learned today and you’re going to apply to your life and change your life. All right. Last question. Aaron asked the question. If you were in college right now, what would you do? All right, I’m going to broaden this question.

Brandon Turner:
In other words, just to young people in general, whether you’re in college, you’re in high school, you’re in your mid twenties, you’re in your thirties and you just don’t have a lot going for you right now. Basically, if I was just starting out, I had no career really. I didn’t have great income or any income. I didn’t have much credit. I didn’t have a lot of connections. I didn’t have much of anything. What would I do? You know, there’s a book out there called so good they can’t ignore you. It’s by Cal Newport. And in this book he argues and he makes a case for if you want an incredible life, if you want great income and a great career, or you want financial freedom, focus on developing what he calls rare and valuable skills. Rare and valuable skills. Now what is a rare and valuable skill?

Brandon Turner:
It’s something that is difficult for most people to do. It’s a problem that you can solve. If you want to get into real estate, what’s a rare and valuable skill right now. Anybody? What’s a rare and valuable skill? How about finding deals? It’s the hardest thing in the world right now. Everybody in their mother or wants a deal. Everybody wants a property, but it’s so hard to find them. If you can get really good at finding deals right now in college at any age, young, old, anybody, you get really good at finding deals. Also during this time start networking, start going to local meetups. If there aren’t any, make sure you start one, be consistent with it. Every month, have a meetup, meet with people, connect, help people, help them find properties. Connect with investors, get really good at that skill and everything also fall into place.

Brandon Turner:
Even if you had to give away most of your deals to other investors, just to build relationship with them, and eventually they’ll start partnering with you. That’s what I would do. I would work on the relationship side. I’d work on educating myself and most importantly, building rare and valuable skills like finding good deals. Hope that helps. Thank you everyone for coming today. I hope you had a great time. I’m going to put these questions over on my Instagram later. So make sure you check there and you’ll see those at and more.

Brandon Turner:
I try to post a lot of content there. So thank you. I know I didn’t get to all your questions. There was a ton I didn’t get to, but with so many people here today and I didn’t get to all the shout outs that I wanted to. So thank you with everybody who came today. I hope you learned a lot. If this was valuable, please tell your friends. Thank you. I love you all. You’re the best. For bigger pockets.com, my name is Brandon Turner. Signing off. Bye everyone. Hey, everyone. Hope you enjoyed that episode where I just walked you through how to get your first, second, third deal. David, do you remember your first, second, third deal?

David Greene:
Oh, I remember them vividly.

Brandon Turner:
And those the ones that made you just super wealthy in life and that like you could retire after that?

David Greene:
Definitely not.

Brandon Turner:
No, but was it important to get them done?

David Greene:
Yeah, those were the deal that I cherish because I looked at every single detail and it made me go out there and research real estate. And it forced me to recognize what’s real and what’s not real when it comes to this. And really what happened is I developed an identity in those first three deals as a real estate investor. And after I had that identity, then everything that crossed my path, I looked at like, how could I buy that? I quit looking at like, there’s risk associated with that. Of course I acknowledged that, but it wasn’t all that I saw. Like it took about three deals for my identity to be born and then boom, I was buying everything I could.

Brandon Turner:
There it is. So if David Greene can do it, everybody listening can do it. So tested, man. Let’s get out of here. Last thing I did mention again, the code for pro annual membership is podcast 21. There is a due date on that, an expiration. I don’t know when it is, but they’re going to cut that off. So if you’re listening to this, it means it’s probably still valid, but we’ll probably edit this episode when it’s no longer valid. So do it before it goes away. And David, I’m going to let you take the last word. Any advice for people listening to this that are like, all right, I ready to get started.

David Greene:
Take the long haul, right? Every time I’ve made mistakes in life, it’s because I try to shortchange myself by not being consistent and I just try to be extra intense. And I think that’s a mistake we all make. When you first start working out, going in there and giving it 110% on the first day, doesn’t really do you any good? You want to be starting a workout regimen or a diet that you’re going to get to by picking one that you actually know you can stick with over the long haul. This is no different. This is a lifestyle. This is something you have to make work according to your own risk profile, your own skillset, your own comfort level, the time you have, what your goals are. It’s not the same for anyone. So as you’re hearing Brandon talk about these building blocks, it’s not enough to just go, I’m going to run out there and do it. Take a minute to actually plan out what you would like this to look like and how you’re going to approach applying the information that you just heard towards building momentum.

Brandon Turner:
There it is. There it is. The final word from David Greene.

David Greene:
All righty. I’ll get us out of here. This is David Greene for Brandon, the silver surfer Turner signing off.