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.