Order of Man - Building Wealth through Real Estate ｜ BRANDON TURNER

00:00:00.000 I'm going to say something to you that is going to sound a bit controversial. I know to some of you

00:00:04.940 and even rub some of you listening the wrong way, but here it is. Being wealthy will help you become

00:00:10.460 better at being a man. Now I know you can be a good man and be broke, but having wealth will

00:00:17.220 help you become better at being a man. And we're going to talk about why that is, but for now,

00:00:23.160 suffice it to say that this is a podcast dedicated to helping you build more wealth in your life,

00:00:28.520 which is something I'm sure all of you want to do. And I can think of no better guest to talk with

00:00:33.220 us about that today, specifically through real estate, then the host of the extremely popular

00:00:39.680 podcast, building bigger pockets podcast, Brandon Turner. Today, Brandon and I talk about creating

00:00:44.860 money, creative finance strategies for buying real estate for real estate benefits and why you need

00:00:50.740 to pay attention to that, why you should be focusing on building a portfolio over just having a property

00:00:56.600 and ultimately guys, how to maximize wealth through real estate.

00:01:00.800 You're a man of action. You live life to the fullest, embrace your fears and boldly chart

00:01:05.880 your own path. When life knocks you down, you get back up one more time. Every time you are not

00:01:11.740 easily deterred, defeated, rugged, resilient, strong. This is your life. This is who you are.

00:01:18.940 This is who you will become at the end of the day. And after all is said and done,

00:01:23.380 you can call yourself a man. Gentlemen, what is going on today? My name is Ryan Mickler and I am the host

00:01:30.800 podcast and the order of man movement. Welcome here. Welcome back. Regardless of how long you've

00:01:35.960 been listening to this podcast. It's important that you're here. It's important that you're here

00:01:39.600 because this is a movement dedicated to not only helping you become a better man. And it certainly

00:01:45.020 is that, but it's dedicated to fixing society. And guys, I think if you're here, you would agree to

00:01:51.600 some degree that society is in need of restoration and redemption. And I believe wholeheartedly,

00:01:59.780 and I've poured my life at this point over the past six years into ensuring that we as men step

00:02:09.000 up as fathers, husbands, business owners, community leaders, and we come become, excuse me, better at

00:02:14.900 being men. Like I had talked about in, in the introduction. And what does that mean? Let me

00:02:19.180 talk with you about real quickly what that means. Cause I want to get into the show. You can be a good

00:02:23.140 man, which is morality being good, right? Being a nice, decent human being, but being good at being a

00:02:28.840 man is the capability that backs up the morality that I think most of us would attest to. I want

00:02:34.760 to help you be better at being a man. Like David Gilmore talks about in his works. And I've talked

00:02:40.420 about this book, manhood in the making. And of course, Jack Donovan, author of the way of men

00:02:45.300 and other books has talked about as well. We're going to help you become better at being a man.

00:02:50.320 Now, before I get into the conversation, guys, if you would, please just do me a favor

00:02:53.940 and this movement a favor, it's not just about me. It's this movement. Please leave an iTunes rating

00:02:58.900 and review. It's very, very important as it comes to spreading the message, gaining visibility,

00:03:05.600 gaining traction, and it just takes you a couple of minutes. So leave a rating and review.

00:03:09.540 I know we're in the midst of COVID and I want to liken what we're doing here to a virus, not in the

00:03:14.760 negative sense, but if you think about the way this goes, if you share this with just one person

00:03:18.760 and they share it with one and they share it with one and they share it with one,

00:03:21.800 or they share it with two or five or 10, then this movement begins to spread and literally

00:03:28.980 impact every corner of the globe. And that's what we're trying to do because the world will

00:03:33.280 be a better place when we all become better at being men. So if you would leave an iTunes rating

00:03:38.700 and review, it takes you a couple of minutes, share this episode, and that's what you can do to

00:03:42.520 promote what we're doing here. Now, guys, this is the 300th interview episode. I've got a great man

00:03:47.340 to talk with us today about building wealth. Like I said earlier, but I think we've done,

00:03:52.760 I want to say we're close to 700 podcasts at this point, 300 of them interviews. And of course we've

00:03:58.180 got our ask me anything. And then the Friday field notes, but man, absolutely incredible what we've

00:04:02.680 been able to do over the past six years, which is a testament to you, not me. It's a testament to you

00:04:07.460 spreading this movement, sharing it, being engaged, being active, being vocal and stepping up in

00:04:13.420 your, your home, your business, your community, et cetera. So let me introduce you to my guest

00:04:17.580 today, Brandon Turner. He's a friend of mine. He's also the co-host of the incredibly popular

00:04:23.400 bigger pocket. Excuse me. Let me see if I can say that correctly. Bigger pockets podcast. His name

00:04:29.080 is Brandon Turner. He's a real estate investor. I think that's probably a massive understatement.

00:04:34.220 You're going to hear about that in the conversation today. He's been investing in real estate in one

00:04:38.500 form or the other since he was 21 years old. But now really he's on a mission to teach

00:04:43.080 others, guys like us, the behind the scenes secrets to successfully investing in real estate

00:04:49.140 and avoiding some of the dumb mistakes that, uh, that he has made in the past. Uh, he's a 0.63

00:04:54.780 contributor on Forbes entrepreneur Fox money magazine, everywhere else that you think about

00:05:01.600 money. Uh, and his podcast is consistently ranked the number one business podcast in the world. So

00:05:07.220 we've got somebody very, very qualified to talk about real estate. And I hope you guys enjoy.

00:05:13.080 Brandon, what's up, man? Glad to be joining you on the podcast, dude. I am so excited. I first,

00:05:17.100 uh, heard your podcast years ago now. I think, uh, I mean, I think we're going to introduce you from

00:05:21.760 Mike Dillard or, uh, a long time ago you were on his show and I heard about you anyway, ever since

00:05:26.640 then I've been like, I want to be on that show someday. So this is a, this is an honor.

00:05:30.320 Yeah. Likewise, man. I I've been following you for, for years. Um, I've, I've actually never gotten to

00:05:35.040 real estate investing too heavy. We, we actually do have two rentals. Uh, but that's just more of like

00:05:40.940 by default to kind of, and we can talk about that story, but it wasn't something that I was like

00:05:45.560 actively pursuing. Uh, but I've been following you for a long time, the wealth creation, wealth

00:05:50.180 building, obviously the business that you guys have created the podcast. It's pretty cool to be

00:05:53.880 able to sit down and have a conversation with you. No, thanks, man. Yeah. I'm a, I'm an open book,

00:05:57.460 so we'll go wherever you want to go today. But yeah, I just love, I just love all this stuff about

00:06:00.980 like wealth creation and real estate and investing and finance and taking ownership of all that.

00:06:06.420 But like, and that's like key, but yeah, wherever you want to go, let's do it. Is that, uh, is,

00:06:10.600 is the wealth building, the wealth creation, all of the stuff that you're doing now, is that something

00:06:13.760 that you've like always been drawn to? Or is that something that, you know, you, you picked up later

00:06:18.900 in life? Like where did this, this passion, this excitement for it come from? Oh man. Yeah. No,

00:06:24.560 not at all. I mean like in high school, middle school, like any of that stuff, I didn't, I didn't care

00:06:28.660 any about that. I mean, I was blue collar family or my dad's a meat cutter, uh, still to this day cuts

00:06:33.220 meat at a grocery store. My mom did daycare. So yeah, I had no interest at all.

00:06:36.420 Uh, not that we were poor, you know, like they both had incomes, but, uh, you know, very blue

00:06:42.220 collar. And so like, yeah, no, I didn't care about any of that stuff at all. It was, it wasn't until

00:06:46.340 I got on my own in college in, you know, I went to like a bunch of different colleges and, you know,

00:06:52.260 community college after community college is trying to figure out how to graduate without too much

00:06:55.680 student loan debt. And in that process somewhere, I just started thinking like, I don't want the same

00:07:01.880 life that everyone else seems to have, you know, like, uh, this like work until you're 75

00:07:07.440 at a job you hate. And the majority of your life, the best hour, like my friend, Scott always says,

00:07:13.260 the best hours of your life, the best days of your week and the best weeks of your life are spent

00:07:18.120 working for someone else. And I was like, that just, that doesn't sit right. It doesn't feel like

00:07:22.520 that's what we were put on earth here to do. Right. So, uh, somewhere in that, it kind of sparked a

00:07:27.800 change and, uh, I started digging in and trying to figure out what, what other options are there.

00:07:33.020 Yeah. That's interesting. Cause I, I'm actually similar in that, in that regard. Like I've never

00:07:37.040 had, uh, an entrepreneurial background, you know, um, my mom primarily raised my sister and I, and,

00:07:43.060 and she, she always worked, you know, whether it was for the school district or the hospital or

00:07:47.320 something. So yeah, the entrepreneurial bone doesn't run in my body, but very similar to you. It's

00:07:53.200 like, Oh man, I cannot continue to do. I'd rather reinvent the wheel and bang my head against the

00:07:59.280 wall than go to work forever for somebody. It just, I don't know. It's just not my nature to do.

00:08:03.580 And so, yeah, I think we have very similar stories and realized that this is not the path.

00:08:09.680 Yeah. You know, it's, yeah, it's funny. I like to say John Grisham ruined me, you know,

00:08:13.280 John Grisham, like the author of, uh, sure. Although it's like the Pelican brief and the lawyer books.

00:08:18.740 Right. So I started reading him back when I was like 20, just cause it was a good fiction books to read.

00:08:22.300 And, uh, every story was about how horrible it is being a lawyer. And at the time, like I was

00:08:26.580 going to plan on being a lawyer. Cause I was like, I went to school for history. I had a history degree,

00:08:30.240 which you can't do anything with, but be a lawyer or a history teacher. And so it's like reading all

00:08:35.040 these books. And I realized like, like every story that he wrote, I mean, he, he became an author

00:08:39.820 because he hated being a lawyer so much. Uh, and he just, he kind of rails against like you work

00:08:44.260 70, 80 hours a week for years and maybe someday you'll be partner. And then you can work 50 hours a

00:08:49.120 week until you're dead and go through three wives and, you know, being an alcoholic. And like,

00:08:53.860 he just, he just paints his hair, terrible picture. And I was like, I don't want like,

00:08:57.700 I don't want that. Right. So it's funny that a fiction book or a series of fiction books

00:09:00.960 actually convinced me not to go to law school and, uh, instead pursue something more adventurous.

00:09:07.000 So when you say pursue something more adventurous, was that, okay, I'm going to go start a business.

00:09:10.860 Was it okay? I know I'm going to invest in real estate. Walk me through you coming to the

00:09:17.040 realization that you don't want to be a lawyer. You're done with school. Maybe at this point,

00:09:20.340 maybe you're already working a job. I don't know, but I'm really curious about that transitional

00:09:23.920 process for you. Yeah, dude, I was working at Cold Stone Creamery. All right. So I'm 21 years old

00:09:30.700 working at Cold Stone Creamery. And I remember, I don't remember, I mean, I don't think they do this

00:09:34.140 anymore, but we would sing for tips, right? Somebody would put a tip in the tip jar and we would sing

00:09:38.700 them a song. It was some silly, like it was, it was ridiculous. Sing it for me. Don't tell me you don't 0.99

00:09:44.580 still know that song. All right. There's a lot of them, but I'll, one of them was, it was thank you

00:09:50.660 for your dollar. Listen to us holler. No, no, no, no, no. Thank you. Right on, man. I didn't think

00:09:56.860 you'd do it, but I appreciate that. I, I, I am bold and, uh, or, uh, you know, prone to embarrassment.

00:10:04.640 I'm okay with that. So I, uh, you know, I work, I work in Cold Stone Creamery and making $8 an hour,

00:10:12.040 I think. And I realized like, I didn't have any money. And so I thought, well, I'm going to go

00:10:17.440 rent to like, I'm going to go rent like an apartment or something like that. And maybe rent out the,

00:10:21.400 the bedrooms to people that I can find. And maybe I can live for cheaper that way. Right. So I, I,

00:10:26.340 I had a friend and she mentioned, well, her sister was an eight real estate agent. So I talked to her

00:10:30.420 and her sister and she said, well, why don't you just buy a house? It's cheaper. I'm like, uh, cause I'm

00:10:34.180 20 years old and I don't have any credit. I have no income. I make $8 an hour. I work at Cold Stone.

00:10:39.060 Yeah. And so I call up, uh, uh, I call up a lender. This is the 07, 06. I don't remember

00:10:45.080 those days. I call up a lender and that, you know, I go through that. I got no income, no credit,

00:10:48.640 no job. They're like, great. You're approved. Great. Perfect. Some big mortgage. And I go and

00:10:52.740 buy. Yeah. Yeah. So we all, we all know that led of course to the, the, the collapse. Maybe we

00:10:57.960 don't all know, but that led to the collapse of the real estate market back in 07 was cause

00:11:01.900 everyone was getting loans. What if you had a pulse? Uh, they literally had this program. This

00:11:06.140 is just so mind blowing to me. It was called the no doc program and it literally was, you

00:11:11.240 lie. Like it was just like, you lie. So like, they're like, well, how much do you make? I'm

00:11:14.980 like, uh, make like $8 an hour plus tips. Let's just say you make $200,000 a year.

00:11:20.860 Perfect. Really? That sounds smart. Yeah. Like, and like you could do that. And yeah, that was,

00:11:25.540 that was allowed to do that in a, in a, these no doc loans. So anyway, ridiculous. So I ended up 0.92

00:11:31.700 buying a house and at least my mom was a garage sale mom. Like, did you grow garage selling 1.00

00:11:35.200 every Saturday? Like I did as a kid. A little bit, not, not maybe as proficient as you were,

00:11:39.340 but a little bit we did. Yeah, we were, yeah, we were proficient at it. So we, uh, I, I, all

00:11:46.220 I knew was from my mom was that you just negotiate a bargain, get a good deal on whatever you get

00:11:50.500 by the cheapest thing you can possibly do. Uh, so I bought the cheapest house in my town.

00:11:55.340 It was like $80,000 or something like that. And I rented out the bedrooms and I was living

00:11:59.420 for free and I, and I kind of fixed the thing up. I bought a book from a home Depot called

00:12:03.600 one, two, three home improvement. Didn't know anything. I mean, it was literally like,

00:12:06.400 here's how to swing a hammer and learn how to swing a hammer and all this stuff.

00:12:10.360 Anyway. And, uh, I was like in that part, this is when I started reading John Grisham

00:12:14.960 books in there and I got another job now making $11 an hour. Maybe it was 10. And, uh, I, I,

00:12:20.780 I realized at some point that if I sold my house, I'd make like $20,000. I'd actually clear that.

00:12:27.780 And I was like, you know, it took me like six months to do that. So I did that. I sold my house

00:12:31.960 and I made like 20 grand and I was like, that's real money. Like I just manufactured money out

00:12:37.100 of the ground and I felt really good. And that was that tipping point of entrepreneurship. I'd never

00:12:42.020 had it before, but all of a sudden I realized like you can just create money almost out of

00:12:46.440 thin air by, by working hard and by being smart and by, uh, taking some risks. And that's where it

00:12:52.380 all started. So, all right. So you get your 20 grand and you're thinking to yourself, okay,

00:12:57.540 I'm, I'm good at this. I can do this. Right. And I'm sure there's some ups and downs along the way.

00:13:02.220 Of course, what did you do with that money? Did you, did you buy another place? Did you

00:13:06.600 upgrade? Did you sit on it? Did you put it, uh, invested into a business? Like what did you do

00:13:10.880 with that $20,000? Cause now you're out of the house too, right? Oh yeah. That makes sense.

00:13:15.260 Just get married. Yeah. I, I, I, correct. So, okay. So I, I used most of it to pay off

00:13:23.540 the wedding that I got. So we had a wedding, right. I got married right before I sold the

00:13:27.600 house. So put it all in credit card, paid off the wedding, uh, paid off a little bit of other,

00:13:31.440 just random little debt. And then it was broke again. Uh, had to go live in another property.

00:13:35.220 So I bought a duplex and I lived in just one again, but it was like, I think 3% down for

00:13:39.660 the duplex. Um, which by the way is one of the benefits of real estate that is just kind of cool

00:13:44.040 is when you buy like a small multifamily property, meaning like a duplex, right. Or three unit,

00:13:49.240 a four unit, whatever. Uh, you can get like a loan for like three or four or 5% down. Like

00:13:53.820 there, because you live there, the banks are okay. Even today, like that's a normal thing

00:13:57.600 in a very low interest. More of a primary residence. Exactly. Exactly. Same. Banks look

00:14:03.580 at a small multi, exactly the same as a single family. So anyways, I bought this little duplex.

00:14:09.040 Uh, ironically later on, we figured out it was actually the same duplex that, uh, Kurt Cobain

00:14:13.120 was born in like, uh, you know, Nirvana. Are you serious? Was born in. So yeah. Crazy. Yeah. Crazy.

00:14:18.340 That's a cool claim to fame. That's pretty cool. Yeah. All right. So you buy this, it, you know,

00:14:24.000 it, it does nothing for me, but it's a cool story to tell. So anyway, keep going. Yeah. I mean,

00:14:29.140 it's just, it's bragging rights at this point. I mean, it's like, and it's like, yeah, there's

00:14:33.220 nothing other than that, but it's cool. Right. Gotcha. So you buy this duplex. All right. So then,

00:14:37.740 um, now you're talking about entrepreneurship. Like where did that come into play? Cause are you

00:14:42.820 still at Cold Stone or somewhere else at this point? Yeah. Yeah. At this point I'm working,

00:14:49.580 let's see, I worked at overnight job at this point, uh, with adding like a group home for

00:14:53.880 developmentally disabled adults. Uh, and I, I, I, when I bought this duplex and so I'm living there,

00:14:59.560 we're living, we're for free. I mean, I remember that day. I remember the day I'm sitting in the

00:15:03.100 driveway of this property. This is another one of those moments that like changed my life. I'm sitting

00:15:06.700 in this driveway between the two units on this property. It's actually two separate houses on this

00:15:11.320 property. And I rent out the front house to a buddy of mine, which is a terrible idea. Never

00:15:15.580 do that. In fact, he got hauled off to jail later, but, uh, I, I remember him coming over and bringing

00:15:21.860 me $650 in rent and he paid me in cash and other just, no, no, don't take money in cash. And I

00:15:27.260 remember thinking, well, my mortgage is only 600 bucks a month and I'm just get 650 for rent,

00:15:32.620 which means I'm living for free. And I was like, this is awesome. Like this is like, again, real money.

00:15:37.280 Uh, and if I rented out the house I live in now, eventually, which I did, I'd make a whole bunch

00:15:42.320 more money. And so that was kind of the switch that taught me like, if I buy rental properties,

00:15:46.920 if I started collecting these little, I like to call them oil wells. I mean, think of, you know,

00:15:50.460 you drive through Texas and you see those oil wells pumping oil from the ground 24 seven.

00:15:54.400 I kind of consider every unit, every rental unit I own, like a little oil well. And that's when that

00:15:58.620 became clear to me is if I just collected units and just started buying them, eventually I'd have

00:16:04.260 enough to be able to quit my job. And so I kind of just reverse engineered that and said, well,

00:16:07.520 how much would I need to quit my job? If I was making three grand a month, I'd probably be able

00:16:11.720 to just live for, you know, for, for like for real, I could retire quote unquote, retire, uh,

00:16:16.680 you know, living as a 2020 at that point, 22 year old. And so I did that. I just worked backwards and

00:16:21.360 I said, okay, I'm going to go buy about 30 units over the next five years, roughly. Uh, and then when I

00:16:25.760 was 27, I quit my job and I said, I'm done. And I sat on the couch for a few months and that was, uh,

00:16:31.260 that was phase one. We'll call that. We'll call it phase one. I like that. I like that. So where,

00:16:35.420 so where did the money for the 30 units come from? Was this from flipping property? Was this just

00:16:39.640 money you and your wife had saved? Where, where did that, those funds come from? Because the

00:16:43.180 landscape has changed. I mean, the no doc loan doesn't exist, right? Unless you're, you have a VA

00:16:48.920 loan. It's I'm imagining that it's difficult to get a 0% down, uh, uh, loan on a property now. So

00:16:55.560 like, where did those funds come from? Yeah. So I like, I like to say creative,

00:17:00.800 I call it creative finance. So creative finance means putting together deals with other people's

00:17:04.120 money or no money or whatever. There's a lot of ways to do it. Like there's a dozen, I mean,

00:17:07.960 I wrote a book a while ago just about all the different creative methods you could do and,

00:17:11.640 and that I've done, uh, because there's just so many. So I like it. I liken it to a tool belt.

00:17:16.080 Like, and this applies to, I mean, it uses this analogy for anything, but if you have a tool belt

00:17:19.760 and all you have is one hammer, like there's a couple of things you can do. You can like hit a bad guy

00:17:23.580 over the head or you can pound in a nail or pull out a nail. That's about it. But you have a 0.97

00:17:26.660 screwdriver. Now you can do a little bit more. And then you have a drill and a little bit more

00:17:29.740 and you have a, uh, a jackhammer and you can do a little bit more and a forklift and pretty,

00:17:33.920 the more tools you have, the more projects you can take on. So the same thing's true for creative

00:17:38.420 finance, the more tactics and ideas you have on, on how to put together these creative deals,

00:17:43.200 the more you can do. So I, I kind of collected these ideas. And so that's kind of a vague answer.

00:17:48.000 I'll give you the specifics. Um, a few of the deals I would buy with what something called hard money.

00:17:53.120 That still exists today. It's actually very, very common today. It's used by house flippers. And I

00:17:57.320 did flipping as well, a little bit along the way. I was never very good at it. Uh, but where you buy

00:18:01.780 a house, fix it up and sell it. But I would, I would buy a house to fix it up and sell it. And then

00:18:07.120 this is of course, you know, 2011, 12 and the, the world's just falling and I couldn't sell these

00:18:12.520 properties. So after I've used this hard money loan, which is crazy expensive, it's like 12% interest,

00:18:17.680 right. Uh, thousands of dollars in fees. I've actually lent some money. I mean,

00:18:21.640 who cares? Hard money lending. So a little, yeah, a little bit. And some of it worked out and,

00:18:26.620 and a lot of it did not work out the way that I would have hoped it did. So, but,

00:18:31.120 but I understand what you're saying here. Yeah. Sure. Okay. Yeah. So I borrowed from this

00:18:36.780 and then after the property was all fixed up, I'd go to a bank and be like, Hey, Hey bank,

00:18:41.440 I got a really nice property. It's all fixed up. It's rented out now. Cause again,

00:18:45.240 I couldn't sell it cause the market was crashing, but it's rented out. And I, and I kind of had a

00:18:48.540 knack for renting, like being a landlord is tough, but it's, it's not unlearnable. So I learned how

00:18:53.660 to do the landloring thing. I became pretty, pretty good at me and my wife managing our

00:18:56.940 properties. So I go to the bank and I'm like, Hey, I got this property. It's already fixed up.

00:18:59.600 It's already nice. Uh, it's worth a lot more than what we have into it. Can we get a loan? And

00:19:03.260 they're like, okay. So that's a, that's a technique I still use today. You buy a property

00:19:06.460 and then you just fix it up and then you go to a bank and refinance it. And we're getting a

00:19:10.560 little bit into the weeds, but that worked a number of times, uh, for me. Uh, the other way

00:19:15.620 that really worked. And I think this is like one of the best ways is like, uh, I just find partners,

00:19:20.360 like other people who had money and they didn't have the time or the expertise or the passion or

00:19:26.420 the excitement. And I would be like, Hey, well, I mean, I mean, the cool thing about real estate

00:19:30.200 is everyone thinks it's pretty cool. And most people, if you were to pull the average American,

00:19:33.200 I would say 90% of people would say, yeah, I'd like to invest in real estate someday.

00:19:36.580 And so there's a lot of people out there who would be interested in partnering. So I just find people

00:19:41.020 like I went to church with, like, just like, like, for example, there was a couple, I went

00:19:44.860 and told them, yeah, I got this cool deal right now. Do you know anybody that want to partner on

00:19:48.100 this? I'm looking for somebody to bring the down payment. And they're like, well, we would do that.

00:19:52.160 And these aren't rich people. These are people that work at the County. They're just like,

00:19:54.440 right. Had some money, you know, sitting in a, in a bank. Yeah. They've got 10 or 20 or 30 grand

00:19:58.600 sitting aside and they have the ability to do it. Exactly. Yeah. Yep. And so this really,

00:20:04.040 what it, what it illustrates is this point. Oh, sorry. Sorry. Yeah. This, uh, this delay is,

00:20:09.060 it's kind of odd, but I'm, yeah, I know there's a little delay. We're working through it as best

00:20:11.900 we can. So it's fine. But, but continue with your story. Go ahead. I don't want to interrupt.

00:20:15.200 Yeah. Sure. Well, I was going to say what, what it kind of illustrates is that there's three things

00:20:18.360 you need to put together this creative finance. You need, uh, somebody to like the hustle to do all

00:20:23.500 the work, to go out there and find them. And this applies to any business, right? Not just real estate.

00:20:26.660 You need somebody that does the hustle, the work that goes out there. Uh, you need somebody,

00:20:30.780 uh, to, I guess, bring the deal. Like they have to like bring the deal. They have to have a solid

00:20:36.340 understanding of it. And then you have to have somebody with the money. Um, and when I say like

00:20:39.920 the deal, I really mean the knowledge of how to get the deal. I mean, deal like there's properties

00:20:43.940 everywhere for sale. It says you have to have knowledge. So it's the knowledge of how to get

00:20:46.880 deals. It's the hustle to make it happen. And it's the money. So if you lack the money, and this is

00:20:51.700 true again for any business, if you lack the money, then go get the knowledge to be able to make

00:20:56.880 money, get the knowledge to make the money, the deal, and then do the work, the hustle.

00:21:01.480 And you will always find people who do not have the knowledge or the hustle that just want to get

00:21:07.200 a return on their money. It's like, I call it the deal Delta. Cause it's like, you have those three

00:21:10.560 things and you can pull off anything. I mean, you can do real estate with no money down. I mean,

00:21:14.880 we've, we flipped three houses in Maui this year. My partner and I, uh, we've made over a quarter

00:21:18.880 million dollars this year alone on those three flips, like combined. My partner has put $0 into any of

00:21:24.920 those deals, zero, like nothing. But he put, he found the deals. He put in all the work. He

00:21:29.820 managed the contract. He did everything. Right. But no risk for him whatsoever. I put in all the

00:21:33.840 money because right today I have my roles over diverse. So today I have money. I don't have any

00:21:37.640 time. And so like, I don't have the time to go out there and find deals and hustle and do all that

00:21:42.360 work. So I partnered together. So I've been on both sides of the equation and it works across the board

00:21:46.500 in no matter what business you're looking at. How do you, uh, what exactly are you looking for? I get,

00:21:51.600 I get the deal Delta or whatever you called it, the hustle, bringing the deal and the money.

00:21:54.820 I get that. But what other characteristics are you looking for in a partner? Cause I think that

00:21:59.260 could also pose a whole new set of challenges and risks that people need to be very aware of.

00:22:06.220 Yeah, that's so, so true. Uh, you know, the best partners I've had have honestly come from

00:22:12.000 like relationships built over time because I, this is true for employees as well as it is for

00:22:19.020 partners. You never know how somebody is going to be until you work with someone like resumes or lies,

00:22:24.540 uh, cover letters or lies. Like everything's a lot. Like even what people say, even rec,

00:22:28.640 even referrals from other people that you trust in, like how somebody has been for somebody might

00:22:33.540 not be how they are for you. So all my partnership, I mean, Greg, I'll give you an example of my

00:22:37.080 flipping partner here on Maui. Like Greg and I didn't come together one day on a weekend and go,

00:22:41.340 you know, we should flip houses together. I'll put all the money in you bring the deal. Like we met at

00:22:45.900 a, like, it's just a local restaurant. Uh, like we did like a real estate club meetup thing just to

00:22:50.260 talk with other real estate investors. And we met and we talked and I got to know him. We went

00:22:54.780 surfing a couple dozen times maybe. And I saw how he did and how he treated his business. And then we

00:23:00.720 let's just do one little thing together. Let's just try something and see how it feels. So we did a

00:23:04.640 little flip together, a little condo and it felt really good. And so we did another one. And so

00:23:08.440 again, that's how I treat my, like I'm finding employees. I do a lot of internship stuff, a lot of

00:23:12.420 like, like volunteer basis stuff, a lot of contractor based stuff. And then I bring in employees that

00:23:17.240 way. The same thing I do for partners is you start slow, build enough relationship, uh, and don't go

00:23:22.980 too deep too fast. Yeah. I mean, like you said, I, I goes for anything, whether it's a romantic

00:23:27.780 interest or a business partner, anybody's or any situation is, is definitely going to be like that

00:23:33.880 with your portfolio. Now, do you, you were talking about, uh, being your own, the, the, the, the landlord

00:23:39.960 essentially, is that something that you're still doing or do you have some sort of a management

00:23:45.220 company that takes care of all that for you? Where are you at with that?

00:23:48.460 Yeah. So, you know, there there's, when I got started, I managed all my own properties. I had,

00:23:53.140 you know, I think I had up to like 30 some units total. One of them was a 24 unit apartment complex.

00:23:57.880 I made up a big chunk of it. So when I had like 33 units, a big chunk of that was, uh, this 24 unit

00:24:03.640 apartment, which again, a different creative strategy to pull it off. And I get it for almost no money out

00:24:08.460 of pocket, which was crazy. Uh, but it was actually from a, somebody else I knew and built a relationship

00:24:13.940 with over a number of years. I ended up selling this property to me and they, uh, what's called

00:24:18.020 carried the contract, which means I didn't pay a bank. I paid them every month. I was almost like

00:24:21.940 I was renting it, but I owned it anyway. Uh, yeah. Like a rent to own or something kind of situation.

00:24:26.520 There's ways to figure this stuff out. Yeah, exactly. Exactly. So, um, at that point I was

00:24:31.900 managing all of them myself. I was managing all the properties myself and dealing with everything.

00:24:35.260 I was the handyman. I was doing all that stuff. Uh, and then I shifted at some point to becoming,

00:24:41.060 uh, like from like self-employed, there's a great book called cashflow quadrant by a guy

00:24:45.860 named Robert Kiyosaki. And he talks about, you know, like that you are either an employee,

00:24:49.460 right? Self-employed, you are a business owner, or you are an investor. There's those four things.

00:24:54.500 And most people, most people, like, for example, I was a self-employed person. I was out there doing

00:24:59.060 my own work and I was managing the projects and I was doing everything. I was self-employed.

00:25:02.840 I shifted when I was about 27, 28 years old to being a business owner of that, which means I,

00:25:07.660 we built kind of an internal property management company. I hired somebody to manage it. We also

00:25:12.400 started giving some of our properties over to management, uh, other companies. And really I

00:25:16.680 got out of the day to day on that level. Uh, and instead I jumped into for a number of years,

00:25:21.680 building bigger pockets. So we started the podcast. I started growing that I started writing books and

00:25:25.820 all that. And now I've kind of swung back the other way the last two years. And now I have, uh,

00:25:31.260 I think we just closed today. We're closing here in a few hours on a park that'll put me at 800 units total,

00:25:35.720 uh, across, I don't know, a couple of dozen different properties across like seven States.

00:25:39.800 And we got like another 700 units to go that we're buying over the next few months. So I,

00:25:43.960 now I built a company that invests in large deals, uh, using what I'd learned on the smaller deals.

00:25:50.060 And so that's just another, just, you know, a whole different thing. It's a business that I own.

00:25:54.660 It's almost like I don't invest in real estate. I just have a business that happens to trade in real

00:25:59.300 estate versus t-shirts. Yeah. It's a different way of looking at it.

00:26:02.720 That is interesting. And it, and the thing I'm hearing you say too, is that, you know,

00:26:06.480 you've, you've worked into this cause how old are you now? You said this was at 27. This kind

00:26:10.020 of switched around for you. Yeah. I'm 35 now. So, uh, yeah, yeah. I feel old.

00:26:16.180 Yeah. Well, now I feel really old cause I'm 39. I'm like, if you feel old at 35, I'm, I'm,

00:26:21.380 I'm pushing 40. No, what I'm hearing you say though, is that it's all relative. Yeah. Is that this

00:26:27.000 is just taken, taken time really. You know, it's, I think a lot of people think that one day you're

00:26:31.740 just going to wake up and you're going to be a, you know, quote unquote, real estate investor.

00:26:35.540 And it hasn't worked out like that for me. And this is actually something I don't really have

00:26:38.980 a desire to do like, like you are, but even for us, you know, we've got two rental properties.

00:26:44.200 And so people think, Oh, you're a real estate investor. No, not really. We just bought a house.

00:26:48.080 And when we moved, we kept that one. And then we moved again out here to Maine, like you and I had

00:26:52.300 talked about earlier and we kept that one. So it's like, we didn't like proactively go out and do this,

00:26:59.180 but it works over time. You know, we call those accidental landlords and they're actually the way

00:27:04.000 that most people get started in real estate. And, and I mean, this is an important thing here,

00:27:08.300 right? Like you, you did it, you tried it a couple of times, you kind of began to accidental landlord

00:27:11.860 and it didn't spark that fire in you. And it didn't like be like, Oh, I'm going to do this for life.

00:27:17.480 And I think that's so important for us as like leaders and as, as men or women and just like

00:27:24.100 people trying to be successful in life is like, feel that fire. Like I, but I guarantee you,

00:27:29.300 or maybe not, but I almost guarantee you when you started like the podcast order a man stuff

00:27:34.400 and you started feeling that, like you felt this fire and you'd stay up till midnight working on it.

00:27:37.840 You just like felt there was a something, yeah, there was something there. You know,

00:27:41.200 like when I got started in real estate, I read some books on stock market investing.

00:27:44.780 I mean, I was just, my eyes were bleeding. I was so bored to death of everything. I just couldn't do it.

00:27:49.080 But I read a hundred books on real estate investing because there's something in here and I don't know

00:27:54.720 why it's there, but there's something in there that just says real estate investing is it. And I,

00:27:59.220 I talk about real estate, I've written five books on real estate. I love real estate. But if that fire

00:28:03.380 is not there, then don't invest in real estate. Like you're, you're better off doing something

00:28:08.200 else. I mean, I know I would say everyone should invest in real estate someday, like go make a bunch

00:28:12.180 of money, however you're going to do it. And then either invest in somebody else's syndication,

00:28:16.220 you know, buy your own house and hopefully, hopefully, you know, make some smart decisions

00:28:19.860 in the way you do that. I think that real estate is still a great investment, but the business of

00:28:23.920 real estate, like I do, where I'm buying and selling and trying to do this, unless it fires

00:28:27.840 you up, don't do it. Yeah. Follow that fire. That's a good point. You know, and I, and I recognize

00:28:32.580 that when, when we initially got started, I just didn't enjoy the process, but that said, I see the value

00:28:39.640 in it. And one decision that we made early on is I'm going to hire a property management company

00:28:45.840 from day one. Cause I'm just, there's, there's a couple of reasons for this. Number one, I'm not

00:28:49.540 interested. We already addressed that. I'm like, I could, could not care any less about it. I love

00:28:55.200 that we have real estate. I love that we have the asset. I love that somebody else is building the

00:28:58.600 asset and paying for it for us. And that's about the extent of my excitement. The other reason that

00:29:04.020 we did that is because we always wanted a degree of separation. Like our second home that we have

00:29:09.020 since we moved out here to Maine, my wife had a friend who wanted to rent the house.

00:29:15.200 And, and I said, I don't mind if she rents the house, but she has to go through the same 0.93

00:29:19.540 process that anybody else would go. She's got, she doesn't work with us. She works with a property 1.00

00:29:24.420 management company that we we've hired. And her friend said, well, why don't I just work with you

00:29:29.320 guys? It'll save you money. I'm like, it might save us money, but it probably won't. And it will

00:29:34.080 certainly be a headache. So go work with them. And occasionally, initially she started calling us

00:29:39.320 about repairs and things like this. And I just said, you got to stop calling us on this. You

00:29:44.240 work with the property management company. And that degree of separation has proven to be invaluable for

00:29:50.220 us. Dude, dude, we, we need to get you, we're going to get you on the bigger pockets podcast to tell

00:29:55.580 that exact story to our listeners, because like it's the number, I think the number one mistake new

00:30:00.280 landlords make is they let emotion guide their decision because you know, they don't put that

00:30:05.700 separation in there. It causes so much heartache. And I've been there. Like, I feel like I just made

00:30:09.800 that mistake over and over and over. I feel like I'm even been drugged by a car and just like bouncing

00:30:13.460 on the ground as I'm nailing my head. Like it's so important to keep that emotion out of it, keeping

00:30:19.780 the personal stuff separate. It is business. And in hiring a property manager is probably the number one

00:30:24.480 way to do that. Keep it out of it. Give it to a property manager. But like you said, like now you own

00:30:29.420 the asset. So there's like four things I love about real estate. There's a lot of things, but there's

00:30:33.040 like four like ways that people build wealth. And like, number one, like over time, that property

00:30:37.000 will likely go up in value. Yes, there's ups and downs. We see the market crashing, but, but over

00:30:42.100 time on average, real estate appreciates by around 3% per year over time. So now your property value is

00:30:46.980 going up on your two properties. At the same time, you're, if you have a loan on it, if you have a

00:30:50.200 mortgage on it, which not everyone does and it's not required, but if you do, that loan gets paid off

00:30:54.480 over time. And so eventually you might owe $200,000 now. And in 30 years, your tenants have

00:31:00.340 now paid off that whole entire loan. So now you have more wealth that way. Then you have like extra

00:31:05.260 money every month. We call it cashflow, right? So cashflow every month, they get to spend that to

00:31:08.940 on whatever you want. You can go buy t-shirts or you can live in Hawaii or, you know, put it away

00:31:12.500 for a future. And then you have the tax benefits and you know, we could talk all about the tax benefits

00:31:17.720 Trump and his releasing. Like there's a, there's a reason that Trump paid $750 in taxes because he

00:31:23.800 owns a lot of expensive real estate. I mean, not even that much. Like he owns like, I don't know,

00:31:28.420 a small handful of really expensive properties, but the government just loves real estate investors

00:31:33.960 and they give us massive deductions and write-offs. And so anyway, you combine all the four of those

00:31:39.000 things together and then add in the fact that you don't have to have all the money to do it. You can

00:31:41.800 use bank loans. There's a lot to love about real estate. That's, that's what I like about it.

00:31:45.940 Yeah, no, that makes sense. I'm just taking some notes because I want to make sure I cover a few

00:31:49.660 things, but yeah, I like that you're talking about the tax benefits of real estate businesses the same

00:31:54.100 way. I mean, there's so many deductions and so many tax benefits and strategies of owning a business,

00:31:59.560 owning real estate that it just makes sense to, to have that in place. I think I'm going to go back

00:32:05.460 to what I was saying about the landlord thing and hiring a property management company. Cause I think

00:32:09.700 this is important because what a lot of people I think will do is they'll say, yeah, but we can make

00:32:15.000 an extra, you know, 10% or whatever. You're going to save that property management company.

00:32:18.900 And so for me, it's like, you, you've got to ask yourself is in my situation anyways, look,

00:32:24.420 if you love it and you like doing it, that's fine. Cool. Like you said earlier, do you do it.

00:32:29.180 But if you don't like doing it, I'm willing to pay 10% of the monthly income to not have the

00:32:36.040 headache. Like that's worth it to me. So that's why we made that decision is because yeah, we're going

00:32:39.840 to give up 10%, but we know it's all taken care of. But that also leads to another point. If you're

00:32:45.920 looking at a, a rental property, let's say, or, or a multi-unit property, what, what would you

00:32:54.660 recommend for people to be cash flowing on that? I mean, like break even doesn't sound like it would

00:33:00.300 be a wise decision. I think some people think it is, but like, because there's expenses and there's

00:33:05.140 other things that come up and there's property management expenses. Like how much more should

00:33:08.860 you be cash flowing it for it to start making sense?

00:33:12.500 Sure. Yeah. So let me, let me dispel a little bit about the, the kind of the myth of cashflow.

00:33:17.260 So a lot of times I will tell people, so first I'll tell you, I aim for a hundred dollars per

00:33:21.560 month per unit. That's my bare minimum. Now people will hear that and be like, that's a tiny amount

00:33:26.480 of money. Like that's, that's almost nothing right now. I agree. It's not a whole lot of money,

00:33:30.040 but let me explain what I mean by that. When I say a hundred dollars a month in cashflow,

00:33:33.320 I'm talking what I call pure cashflow. You know, like how they refine a goal, they put it through a fire,

00:33:38.580 right? So it's been purified. All the impurities come out of it. So cashflow has been purified means

00:33:43.400 it's been through like the years and years of averaging out the repairs and maintenance. Yes.

00:33:48.640 You might have, you might be getting a thousand dollars every single month and then boom,

00:33:51.840 you have a new roof to put on. It costs you 30 grand. Well, you got to account for that roof over

00:33:56.020 the course of that, you know, time period. And you got every couple of years, people leave your

00:34:00.240 property. It says empty for a month while you're fixing it up and, you know, getting ready for the

00:34:03.480 next tenant. You got to account for that stuff. Like, so if you average all of that into your

00:34:07.760 numbers and you can really just, it's, it's not a super complicated thing. In fact, I have a YouTube

00:34:12.300 video. If anybody wants to like learn how to just do that number, like it's totally free. Just go to

00:34:15.960 YouTube and like search for like, I don't know, bigger pockets, four square method. And I just walk

00:34:21.140 you like, here's how you know income. Here's how you know all of your true expenses. And here's,

00:34:26.120 and at the end of the day, if I can get a hundred dollars minimum on like per unit,

00:34:30.040 so that means 200 bucks for a duplex, $400 for a fourplex. I'm like, okay, well, it's

00:34:34.860 like a base hit. It's pretty good. I aim for more than that. I'd love to get more than that.

00:34:37.640 Some of my properties give three, four, five, $600 per unit. But if I can just get a hundred

00:34:42.700 bucks, I can say, yeah, that's pretty good. It's just easy math. Like I need $5,000 to quit

00:34:46.360 my job. Okay. That's 50 units total. I need a $10,000 to quit my job. That's roughly a hundred

00:34:51.300 units, right? And over time cash flow goes up because rents go up over time. Property values

00:34:56.420 get paid down. Like you said, some people are happy breaking even.

00:35:00.040 Because they still get the property going up in value and the loan getting paid down.

00:35:02.960 That's fine. I just, I'm not, I like money. I like, I like working harder to get those

00:35:07.380 deals that provide good cashflow every month.

00:35:10.320 Man, let me hit the timeout button, the pause button real quickly on this conversation.

00:35:14.760 I do want to share something with you that a lot of you are not familiar with,

00:35:18.060 because one thing I don't talk a whole lot about is our order of man merchandise store.

00:35:22.680 It's our apparel company. If you want to support this movement in a very small way,

00:35:26.740 and you also want to look good in the process. I mean, who doesn't want to look good?

00:35:30.040 Then please take a look at store.orderofman.com store.orderofman.com. The merchandise store,

00:35:36.960 it started out as an ancillary business to order of man guys wanted shirts and hats and that sort of

00:35:43.780 thing. The iron council and other products and services we offer, but I've always had this goal

00:35:49.020 to build an actual apparel brand. And our store right now is in the beginning stages of that dream.

00:35:55.540 So you're going to find shirts and hats and wallets and battle planners and decals,

00:36:04.500 great high quality stuff. Not a bunch of BS that, you know, you'd find or earn for completing a,

00:36:10.780 you know, 5k in your local area. I mean, these are the best shirts, hats, hoodies,

00:36:14.520 battle planners, wallets, decals, everything that you can find on the market. And it's all gear that

00:36:19.640 you're going to be honored and proud to wear. And of course you're supporting this movement and this

00:36:24.120 mission and what we're doing here. So if you're interested, check it out, store.orderofman.com

00:36:28.220 store.orderofman.com. Check it out, link it up on your phone, do it after this conversation.

00:36:35.140 Cause we've got a lot of good stuff to continue to talk about. And we will get back to that with

00:36:39.220 Brandon right now. I mean, I'm with you on that. I certainly like money in that, but I also don't

00:36:45.760 want to be caught with, you know, you got to replace the carpet on this unit and it's going to

00:36:50.520 cost you five grand to do, or like you said, the roof and you haven't been planning for that.

00:36:55.020 And all of a sudden you, not only do you have to pay for it, it actually comes out of your pocket

00:36:59.660 now that you hadn't accounted for. So we actually set money aside, which is just, Hey, here's our

00:37:04.180 repair fund here. We just, this money is just set aside. When my property management company called

00:37:09.040 me the other day, they said, we need to fix the garage door and we need to paint it. And we need to

00:37:12.420 do this and that. Can we do it? I'm like, yeah, go ahead. And he messaged me back. Cause we're

00:37:16.220 friends now. We've been working together for a long time. He's like, man, you're so easy to work

00:37:19.120 with them. Like, cause we plan for it. Like we know this, these aren't surprises.

00:37:25.680 Yep. Doesn't that apply to like everything? Like, I mean, how many people, and I'm not putting

00:37:30.280 people down who lost their business cause of COVID cause it sucks. And we could have never 0.52

00:37:33.280 fear seen this coming. Right. But how many people like they couldn't pay their bills for three months

00:37:37.700 and then they blame COVID or they blame the environment or they blame somebody else or the

00:37:41.920 government or somebody, you know, Trump or the Democrats or whatever. And in reality, like they didn't

00:37:47.660 do the work to set aside the money they needed for unforeseen circumstances, which we all know we

00:37:51.420 should do. So to take a page out of like Jocko's book, right? Like own it, like own the fact that

00:37:56.940 you will have tough times. Set that aside. It's your fault if you didn't have enough money set aside

00:38:01.100 for your repairs and maintenance. So yeah, I set aside between five and 10%, sometimes up to 15 or 20,

00:38:05.340 if it's a older, crappier property, every single month, I set that aside for repairs, maintenance,

00:38:10.220 fix and stuff.

00:38:10.800 Yeah. And you know, if you don't ever use it or whatever, it builds up sufficiently and adequately.

00:38:15.920 Well, okay. That money's still yours. So you can access it if you need to, you know, if you've built

00:38:20.300 it to where it needs to be. What else? So you're talking about a pitfall, uh, as, is not hiring a,

00:38:25.620 uh, potentially not hiring a property management company. What are some other pitfalls that you've

00:38:29.880 seen people step into as they're trying to build their real estate portfolio or just purchase their

00:38:34.160 first unit?

00:38:35.160 Yeah. Uh, I think a lot of people get into this game and first of all, they think it's going to be easy.

00:38:40.640 They hear these late night TV gurus, the guy with the slick back hair and, you know, telling you can

00:38:44.260 get rich quick. Uh, and I think they, they realize this game is, it is a, first of all, a long game.

00:38:50.360 You, it takes, it takes a while. I mean, it took me a decade to become a millionaire through real

00:38:53.940 estate. Uh, and that was, you know, buying at a time where prices were low and they went up in value.

00:38:58.580 And so I became wealthier because of that. And so it takes time, first of all, and people don't

00:39:03.220 have the persistence a lot of times to hang, hang long enough through it to get there. They try it.

00:39:08.200 They're like, well, I bought a property maybe. And they make a couple hundred dollars a month.

00:39:11.460 They're like, well, I don't, I don't really understand the big deal. I could have done

00:39:13.440 that in anything. I could have gone and gotten a job for that. What I don't think they realize is

00:39:17.900 the first deal doesn't make you rich. The second deal doesn't make you rich. Like wealth is not

00:39:22.480 built from a property. It's built from a portfolio. I mean, it'd be, it's just the same as if you were

00:39:27.000 to say, yeah, I went and bought a stock. I went and bought Tesla stock for a thousand dollars today.

00:39:32.040 Uh, and I'm just going to wait for that to make me rich. Like that doesn't make you rich. Like

00:39:35.340 one stock. I mean, unless you happen to be lucky enough to buy Apple back in 1975 or whatever.

00:39:39.900 Right. So it's built, it's the knowledge, it's the experience, it's the momentum. And momentum

00:39:45.180 is like most like under talked about things in business. Like you just need to keep that moving

00:39:50.880 and getting bigger and bigger. So when I said earlier, it probably scared people when I said

00:39:53.940 50 units to be able to get $5,000 a month. And again, I'm, that's super conservative. And I think

00:39:58.360 you can get better than that, but people are still thinking 50 units. Like, Oh, I can never do that.

00:40:02.860 It would take me forever. Well, that's true. If you're thinking linear growth and I'm going

00:40:06.620 to buy a house this year, maybe another one next year, that would take a long time. Still,

00:40:10.600 you'd still win that way. Cause over time, the property guys go up and loans get paid down.

00:40:14.080 But we're talking just cashflow to get out of your job, to quit, to retire. Like you just get in,

00:40:19.360 like get out of your comfort zone and get into the larger deals. Like you go from that single

00:40:23.640 family, maybe you buy a duplex next. Again, not gonna make you rich. Uh, but then you buy a five unit

00:40:27.740 and you're like, okay, well I'm kind of figuring that out. I'm actually buying a sixplex. Uh, hopefully I'm getting

00:40:31.260 under contract today in a Bangor, Maine. So kind of your, uh, your neck. Oh really? Uh, and then

00:40:37.180 you buy it. Yeah. Yeah. Uh, and then you buy the 20 unit and then you buy a 50 unit and all of a

00:40:42.720 sudden, you know, five, six, seven purchases in, you're buying these larger properties because you

00:40:47.160 took the knowledge you gained and you applied it to outside your comfort zone. And this is a true

00:40:52.520 about all businesses. People get stuck in their little comfort zone and their little linear growth

00:40:57.180 models of like, I'm going to grow by 5% per year rather than thinking, how do I double this year?

00:41:01.820 How do I double next year? How do I, what's that next thing I can do? That's, that's scary that I

00:41:05.920 don't want to do, but I'm going to do it because that's where I know that I need to get to, uh,

00:41:10.280 to exponentially grow. So again, that just applies to every business owner out there. It's stop

00:41:14.380 thinking necessarily linear growth of like, how do I improve 5%? That's what fortune 500 companies have

00:41:18.860 to do because they can't exponentially grow, but we are nimble entrepreneurs. We can grow exponentially.

00:41:23.840 Yeah. That's a, that's a good point. Cause at some point when you get too big,

00:41:27.300 you have almost this law of diminishing returns. When you're talking about these big, huge

00:41:31.160 organizations that are, you know, you got all the red tape and they're complex and they have

00:41:35.680 committees and departments that they need to work with and communicate through in order to actually

00:41:40.140 make anything on the ship move. You know, the other, the other nice thing about this too, is that

00:41:44.360 it's, it's the, the activity of, of building a portfolio. I'm not saying that this is passive,

00:41:51.320 but the income is passive. So what you said earlier is you said, you know, uh, I made,

00:41:57.460 you know, $200 this month. I could have done that and got a job. Well, here's the thing.

00:42:00.880 You can actually go work the job and make the $200 or the 2000 and make the $200 over here without

00:42:08.880 consuming your time and attention. And I think that's going back to, uh, Kiyosaki's, uh, quadrants,

00:42:14.100 right? Is now you're not trading your time for dollars. You might be over here,

00:42:16.960 but this is working in the background without you having to do much if you've done it correctly.

00:42:22.420 Yeah, that is, that is very true. And there's like this, there's a scale of kind of passivity.

00:42:27.340 I like to say, there's like certain, like some real estate investments are super passive. Like

00:42:30.320 I have a, I have a real estate fund. So people that are, you know, wealthy can put money into

00:42:34.240 my fund. They don't have to really do anything, but go to the bank and wire money. That's,

00:42:37.060 that's super passive. Then there's people who are like in the trenches, they're buying that nasty

00:42:41.700 duplex. That's got like, you know, needles all over the floor and they're all tearing carpet out.

00:42:45.780 And like, they're in it. That's so not passive, right? In the beginning. And I've been there,

00:42:49.900 I've done all that stuff. I've curled under more houses and dealt with more crap than I ever want

00:42:53.180 to talk about. But over, like you can make that passive and then it moves up the scale of passivity.

00:42:58.540 And so over time, so today again, with, with, you know, whatever, I'm at 700 units now today,

00:43:03.160 hopefully I should, if we close today on this thing, we should be at 700 units. Like I spend less time

00:43:06.920 today working on my properties than when I did, when I own that single duplex, like I have 700 units and I

00:43:11.680 have less time than when I own that duplex. Why? Because I've got like, I scaled it up. It became

00:43:16.260 more and more passive as I brought in more systems and people and processes and property managers.

00:43:21.260 And now I read reports, make sure things are doing well. I meet with my team, you know, and, and make

00:43:26.820 them, you know, do their thing. But yeah, it's, it's just a different game. Uh, so yeah, I definitely

00:43:31.380 think the longterm, like that's where you want to head towards is that, that passivity. And again,

00:43:35.160 everyone you add, it's a little oil. Well, the more oil wells you get pumping oil out of the ground,

00:43:38.820 the more money you start getting every single month. And over time that amount increases,

00:43:42.580 it pumps out more oil, the price of oil goes up and you know, your loan gets paid down on those

00:43:47.920 oil wells to, you know, to beat that analogy to a, to a pulp. Yeah. Well, the other thing you're

00:43:52.820 talking about too, is making yourself capable. Like for example, if, if some, let's say that, that, uh,

00:43:59.120 that I was, I was in your will. All right. Hypothetically. And you, and you passed away and you said,

00:44:03.440 okay, Ryan, here's my 700 units. I would crumble under the pressure of that. Like, I mean, it would

00:44:11.160 be nice for a couple of months, but then, you know, I'd, I'd, I'd mess up on this and attend a

00:44:16.100 tenant wouldn't pay me. And then now it's a couple tenants not paying me. And then it's me not

00:44:20.060 maintaining them. And then there's a damage that I don't repair. I would literally crumble because I

00:44:24.920 don't have the skillset. And so I think what a lot of guys want is they want the, the immediate

00:44:31.180 and the long-term result, for example, Brandon, that you've built up over a decade now, but you're

00:44:36.640 not entitled to that because you haven't earned that. And you have to prove that you're capable of

00:44:41.640 handling one, then two, then 10, then 20, then a hundred and so on and so forth. But it's the

00:44:47.320 skillset. You've got to develop that skillset. You can't have the result without it.

00:44:50.680 It's such an important thing. It's like people want that six pack without going to the gym.

00:44:54.860 Yeah. Like they want, they want all that. They want the end result. They see me and they see you,

00:44:59.620 and they see like people that are at a level they want to, they want to have a podcast like we have,

00:45:02.960 or they want to have a real estate portfolio or a stock portfolio. Yeah. They haven't put in the,

00:45:06.860 they haven't put in the work and put in the reps yet. And so, you know, that goes, there's,

00:45:11.020 there's people out there that will teach you real estate wise. You should go in 10 X your goals.

00:45:14.180 And I mean, I understand the mindset behind that of like setting a huge, you know, a huge,

00:45:18.640 gigantic goal. And, but like, I'm not a fan of like somebody going out there and going,

00:45:22.820 you know what? I'm just going to start with a hundred unit. I'm going to go buy a 50 unit complex today.

00:45:25.700 You do not have the skills in your body, in your mind to be able to, to go and buy a 50 or 60,

00:45:32.280 a hundred, 200 unit property. You earn that by doing the small years, or you borrow that from

00:45:37.140 somebody else. The way to cheat that is by finding the partner who has put in the time and the reps

00:45:41.540 and you just work with them and you take a small piece of what they're doing. And so honestly,

00:45:45.700 that's how I went from, you know, a year, a year ago, I had a hundred units today. I've got like

00:45:50.040 700, right? So like, how did I do that crazy growth? I brought in a guy named Brian Murray. Like he

00:45:54.960 already had thousands of units. He's one of my partners on that, on, uh, in that business.

00:45:58.520 So Brian Murray had the credibility I could go and latch onto. And now I could go and do that. Now,

00:46:03.080 did I give up a lot of my profit for that? Definitely. Is it worth it? A hundred times over.

00:46:08.020 How do you, how do you strike the balance? Because most of us as human beings, in a lot of ways,

00:46:13.220 we can be driven by greed, the emotion of greed, right? Where we, we want all of the profits. We

00:46:18.140 don't want half of the profits. We want all of them. So how do you strike the balance between

00:46:22.980 pushing, you know, like, I think I can handle this and getting overly greedy and then putting

00:46:28.740 yourself in a bad situation. Yeah. The funny thing is I almost let greed guide my decision to have

00:46:35.480 partners. And let me explain what I mean. Like, I know I've like, I try to guard against greed and,

00:46:39.460 and, and, and all that, but I also recognize that, that by bringing in partners, I can do more than I

00:46:46.760 could have done normally. So I, I, it's like that subtle shift. And here's the question I had to ask

00:46:50.340 myself. If I give away half of my business, but I do so, I give away half my business, but I do so

00:46:56.960 with somebody who is a rock star, who has been vetted, who I've built a relationship with,

00:47:01.360 who I really believe has all the missing pieces that I, that I, all the pieces that I'm missing.

00:47:06.820 Can I do twice as much business, real estate, whatever with that person? And if with the right

00:47:12.920 person, the answer is a resounding yes. It's, it's, I can do 10 times more with that person

00:47:17.480 and they can do 10 times more with me. So I'm actually using my own like desire for greed at

00:47:21.980 how much I'm going to make, how am I going to make the most? Uh, and how am I going to work the

00:47:25.860 least to guide my decision to actually bring people in? It's just a, it's a shift in mindset from I want

00:47:30.780 it all to, I can have more by sharing more and by bringing more people in. And now I work way less

00:47:36.540 than, than I ever did before. And in that business, because I have the right people in place.

00:47:41.260 Yeah, that's a, that's very powerful and very applicable. I actually ran into that same scenario

00:47:45.240 in my financial planning practice. So I don't know if you knew or not, but my background is

00:47:49.520 financial planning. I was in the business for about a decade and, and early in my practice,

00:47:54.000 I was really, really struggling almost to the point where I got to throw in the towel. I'm not

00:47:58.840 making this work. I'm not making ends meet. So I'm going to throw in the towel before I did that.

00:48:02.880 There was a couple of guys in our office that were high performers. They were just, they were killing

00:48:08.120 it every, every month we went through the numbers. They were always at the top. And I'm like,

00:48:11.920 how are these guys doing this? And finally, I just grew the balls to just ask them. 0.99

00:48:16.540 And we, long story short, we ended up working together. And I would split my revenue and 0.91

00:48:21.820 commissions with these guys on the cases that we'd work on, work on together. And I had somebody

00:48:25.400 come to me one day and say, man, I can't believe you're splitting your cases. Like you could be

00:48:28.900 making a hundred percent of that. And I remember thinking, and I can't remember if I, if I communicated

00:48:33.640 this, but I do remember thinking to myself, a hundred percent of zero is zero. And that's where I was at

00:48:40.560 that point. Like I w I was so bad that if I would go on an appointment or meet with a prospective

00:48:44.800 client, yeah, maybe I'd make a hundred percent, but they just wouldn't close business with me

00:48:49.160 because I wasn't good at it. But instead we went 50, 50 with these guys. I think it was even 60,

00:48:54.540 40. I can't, I can't remember the exact split, but yeah, initially, immediately when they started

00:49:00.460 coming on appointments, we started closing appointments. We started picking up new clients.

00:49:03.640 I'm like, ah, and then eventually, you know, I didn't need their help as much. And so we scaled

00:49:08.700 back. I brought them on a few difficult appointments, difficult clients or, or, or extremely wealthy

00:49:14.180 clients. The ones that I felt like I could handle on my own. I did. And eventually, you know, I went

00:49:18.220 on and did my own thing, but it was, it was letting go of the, the need to have a hundred percent. So I

00:49:25.400 like how you're switching the greed mentality into something that's positive and productive as opposed

00:49:31.620 to something that's hindering you. Yeah. You know, I, I love that you said that. And there's this

00:49:36.000 quote that I say all the time. I don't know where I first heard it, but 50% of a, I would say 50%

00:49:41.000 of a great deal is better than a hundred percent of no deal. So that same concept, 50, like I will

00:49:46.360 split deals all day long with people because I'm going to, I'm going to win no matter what. And I

00:49:51.380 think the thing that stops us more than, more than greed is, I think it's ego. It's I can do this on

00:49:56.780 my own. I'm, I'm a strong man. I don't need anybody else's help. And that I think just slows

00:50:02.420 people down so much because we feel like we just, we don't need other people's help. That's

00:50:06.280 what, you know, that's what kids need. They need somebody's help. But in reality, when

00:50:10.020 like, I mean, all of human history has operated on this apprentice master model, like for much

00:50:14.420 forever, all the skills were that way. And sometimes in the last like 50 years, we just

00:50:17.740 kind of got away from that. And now we don't think that's as important anymore. But I mean,

00:50:21.060 like I got started in real estate. Part of my story I didn't really talk about is I, throughout

00:50:24.260 that whole process of building my portfolio, I was painting houses and crawling under

00:50:28.880 houses and fixing pipes for a bunch of other landlords in my area for like almost nothing.

00:50:34.360 Like, I mean, I've made almost no money. I'd even lost money on a lot of those deals,

00:50:37.380 but I was gaining knowledge and, and confidence and momentum and all those things that have now

00:50:42.820 benefited me at now I struck up on my own, uh, that now I'm applying just to a whole different

00:50:47.220 game. And now, once again, I'm, I feel like I'm the apprentice to this guy, Brian, who's on my team,

00:50:51.980 who's just so much, you know, wiser and more experienced than I am. So yeah, just putting the ego

00:50:56.580 aside and saying, yes, I maybe could do this and figure out myself. Uh, but it's gonna be better

00:51:00.960 for me and my family and my time and my stress to just figure it out from somebody else. Even if you

00:51:06.400 have to give them the majority of the deal, I don't care if it's 90, 10 and you take 10%,

00:51:10.120 like you're getting the knowledge and the experience when you, when you work with somebody else.

00:51:14.800 I'm glad you're talking about that. And I'm also glad that you're talking about the,

00:51:18.180 you know, the quote unquote dirty work, because one of the things I hear from the guys that

00:51:22.240 listen to the podcast is they'll say things like, you know, I want to have a regular guy on the

00:51:27.800 podcast or I want to hear from, from somebody that I can relate to. And so what, what a lot of people

00:51:32.980 see is they see the men that have had on the podcast yourself included and think, oh, I could

00:51:37.120 never, I could never have 800 units or, or I could, I could never do what Goggins has done. And I can

00:51:43.940 never be how this individual is and what they fail to see. And what I'm trying to make sure that I do

00:51:49.720 when I have guests like yourself on is show and illustrate that you're not some, some godly being

00:51:57.820 that, you know, this has all been bestowed upon you, but that you climbed under houses and you

00:52:05.440 painted houses and you cleared gutters out. And I'm sure you set and cleaned out more mouse and rat

00:52:11.440 traps than you'd care to admit. Like that's, that's what's required. That's part of the deal. If you want

00:52:16.540 to have the success that you and other people have. Yeah. It's, it's entirely true. You have to

00:52:20.940 do like, now maybe could I figure it out a better way? Maybe. I don't think I'd be where I am today

00:52:25.500 without going through that stuff. I mean, maybe I could have, you know, put on a suit and hired the

00:52:30.180 right people. And, but in the beginning, especially like I didn't have, I didn't have the knowledge to

00:52:34.800 be able to even do that. I didn't have the credibility to hire people. I didn't have the knowledge. I

00:52:39.180 didn't have any, I mean, I, what I brought to the table was the fact that I was persistent and I was

00:52:43.520 not afraid to crawl under a house and fix a pipe. And so whatever you got to bring, like if that's

00:52:47.500 all you have and that's all you have and bring that, uh, and don't be afraid of getting your

00:52:51.400 hands a little bit dirty. I mean, they're like, I've lost money on, like on deals. And I've like,

00:52:55.720 like at one time I bid a $300 to put insulation under my attorney's house and ended up taking me a

00:53:01.220 week and I had to hire three guys to help me with it. And I, I, I ended up losing thousands of

00:53:05.640 dollars on the thing, but you know, I finished it. I was there every day and I finished that job and it

00:53:09.000 sucked and I had insulation in my eyes. And like, it was the worst thing I've ever done.

00:53:13.040 But to this day, that attorney helps me with everything I ever have a problem with ever.

00:53:16.620 And he never charges me like really hardly anything. Cause like I proved that character to him

00:53:20.820 and just that, that thing, like he's more important than the thing. Does that make sense? Like that,

00:53:27.080 that, that character trait of the persistence matters so much more than the outcome.

00:53:33.380 Yeah. You know, and, and, and not only that now, you know how to do it. I think about it when it

00:53:37.800 comes to the podcast, you know, for the first, I would say just off the cuff here that maybe the

00:53:43.740 first 30 to 40, maybe 50 podcasts, I was editing and doing all the artwork and all the sound

00:53:50.640 engineering. I was doing it all myself because, well, I didn't know who to hire. I didn't have

00:53:56.520 the money, frankly, to hire somebody to do it. And so I took it upon myself. And now, you know,

00:54:01.100 we're at a stage where I don't do that. All I hit is play and record and have cool conversations

00:54:06.220 with good people. And then I send it to Cody who edits our podcast. But the nice thing about it is,

00:54:11.860 is that I can actually have an intelligent conversation with Cody as he's like, Hey Ryan,

00:54:16.580 this happened, or we need to adjust this or tweak this. I actually know what the hell he's talking

00:54:20.340 about because I went through the process, but how easy would it be for somebody to, and I'm not 0.97

00:54:26.220 saying this about Cody, but just somebody you hire to take advantage of your ignorance. If you 0.81

00:54:30.840 don't know how to do all this stuff. Yep. Yeah. Well, I want to switch gears here real quick and

00:54:36.700 talk about, um, cause you talked about your unit or your units in, uh, in Bangor, Maine. And I'm

00:54:43.480 really curious because I think there's a popular thought that, that says, and correct me if I'm

00:54:49.900 wrong, that you should, the units that you have should only be in your general area. And so I'm really

00:54:55.040 curious as to how you've spread out quite literally across the country and how you manage this when

00:55:01.700 you're in Hawaii and the properties here in Maine, literally on the opposite side of the, of the

00:55:07.560 country, how you do all this kind of stuff. Yeah, that's a great question. So over, over time, you

00:55:11.880 know, when I first got started, I invested locally in my own area. I lived in, at the time I lived in

00:55:15.320 Grays Harbor County, Washington, which is a couple hours Southwest of Seattle. And it was a very low,

00:55:20.440 low income, kind of a depressed area, actually not that dissimilar from Bangor, uh, similar size,

00:55:25.960 similar economy. Uh, and I got my kind of teeth cut there. So I learned how to do this stuff there,

00:55:30.820 uh, at, at that kind of like lower income, uh, rental level. Then I started to expand outward and

00:55:36.300 I bought, I bought two properties. I'll actually illustrate this point in two properties I bought.

00:55:39.700 I went my first two out of state properties. I bought a 49 unit mobile home park in Bangor,

00:55:46.660 Maine or Hamden, Maine. So right next to Bangor. And then I also bought a,

00:55:50.440 uh, 24 unit apartment building in Cincinnati, Ohio. The one in Cincinnati, I had problems from

00:55:57.320 day one. I had issues. I had, I, I contractors taking advantage of me. I had no money coming in.

00:56:03.040 I just continually lost money every month. I had a terrible property manager, got another terrible

00:56:06.820 property manager, got another one, couldn't get a handle on it. At the same time, the one in Maine

00:56:11.440 that I bought, uh, has now just about doubled in value. Uh, I've made like, you know, almost a million

00:56:16.620 dollars on that property. It produces cashflow every month. I never hear about it. It's the

00:56:21.380 simplest, easiest cashflow ATM machine I own. What was the difference between the two? They

00:56:26.980 were both out of state investments. What was the difference? The difference was the core four.

00:56:30.280 There's a term that my buddy, David Green, who's one of the co-hosts of our own podcast. Uh, he

00:56:35.180 coined this term, the core four. Your core four are four people you have to have in a market. If you

00:56:40.520 want to succeed, it doesn't matter if it's a local market or long distance. And that is a rockstar

00:56:44.960 real estate agent. Somebody who's really under good understanding what a good deal looks like and

00:56:48.380 how to find properties. You need a property manager. That might be the most important thing.

00:56:52.140 Uh, you need somebody I can take care of. That's really good. And let me just tell you guys,

00:56:55.360 like there are so many terrible property managers out there. Just so many, like the license

00:57:00.880 requirement to get a property management license in most areas is like less than what it would take

00:57:05.060 to get like a dog license, like the license, your dog. It's terrible. Uh, and people think it's

00:57:09.580 an easy way to make money. Uh, number three, you need to have a good contractor or team of

00:57:13.740 contractors, people you can call when things break. And then number four is you need a good

00:57:16.780 lender. And so if you have those four things, you can invest anywhere. So the problem people

00:57:21.300 make when they go out of this, like long distance, we call it long distance investing is they go into

00:57:25.800 a market without the core four. You can invest anywhere you want. If you had those four people,

00:57:30.600 I did not have those in Cincinnati. I did have them in Bangor, Maine. And that was, that's the

00:57:35.520 difference was, it was all about that. So yeah, you don't have to go local. If you can't find

00:57:38.940 something local, that's fine. You can go elsewhere. It just requires, it's harder to build those four

00:57:43.140 people on your team, uh, to build those relationships if you're not taking them out

00:57:46.580 to coffee in person. But, uh, yeah, totally doable. How did you, how did you find these

00:57:52.420 properties? Did your real estate agent or a business partner or something find these properties

00:57:58.060 outside of your state or is it your own research? Like how do you even look for these places? Like

00:58:02.620 how would you know to look in Maine? You know what I'm saying? Yeah. Yeah. Great question. Uh, so I,

00:58:07.140 I think it begins, usually it begins one of two ways. I'll give you two sides. One,

00:58:11.320 you can go and do some research and some data. So you can go and really dig into the numbers and

00:58:15.740 figure out where are jobs headed? Where's the economy moving? Where are people going?

00:58:19.660 Cities like Denver, Austin, Nashville, they're just booming right now. Uh, even Portland, Maine

00:58:23.940 is listed as one of the top markets in the country, uh, right now in terms of, uh, potential for real

00:58:28.200 estate, uh, Portland, Maine. And so you could start there and then you could go into that market and

00:58:33.240 build your core four. You go out and find those people. Uh, and you can find, I mean like

00:58:36.980 bigger pockets, the website has 1.7 million members. So you can start and like start meeting

00:58:41.560 people, talking with people in that neighborhood. You could fly in and go. So again, that's, that's

00:58:46.000 the approach where you, you pick your market based on data. The approach that I've generally taken

00:58:50.760 instead, uh, is I find people first. So in Bangor, it was my friend, Ryan Murdoch. Ryan lived in Bangor,

00:58:58.440 Maine. He now actually lives in Hawaii, Maui. He moved out here, uh, to kind of work our business

00:59:02.960 together closer, but for years, like he was there and he's been there forever. So he had

00:59:07.040 an amazing lender. He had an amazing, uh, a real estate agent. He had an amazing property

00:59:12.240 manager. He had an amazing contractors lined up. And so that deal came from him cause he

00:59:16.880 knew that market. So again, I harnessed his experience and knowledge and I went into a

00:59:20.420 market that, that he understood. So again, those are just the two approaches and there's

00:59:24.220 not one that's better than the other, but those are two ways to consider what market to

00:59:27.500 go to. Yeah. And I, and I think a lot of this is probably just organic, right? If you're in

00:59:31.420 the business, you're active, you know, you had a partner out here in Maine, like this

00:59:34.780 is organic type stuff that just kind of happens. And you probably would have never expected

00:59:38.960 that it would be out here, but opportunities presented itself and you positioned yourself

00:59:43.140 to be able to take advantage of them. Yeah. Yeah. That's exactly it. It's you just

00:59:46.340 kind of keep an eye out for it. And I'm just always looking for like those opportunities

00:59:50.000 and like to work together with people to, to hear, like somebody says they do it. They

00:59:54.700 had a successful real estate deal. I'm like, Oh yeah, where was that at? Tell me about

00:59:57.620 that. It's just being curious and asking and just trying to like figure out what makes

01:00:01.200 those people successful. The same thing is true for you and your, your financial planning

01:00:05.060 business, right? Like you ask those people like, Hey, like why are you so successful?

01:00:08.860 What are you doing? That's different. And it's like putting your ego aside saying, I

01:00:12.080 don't know what I'm doing here. I'm going to go ask them. And you start picking up what

01:00:14.820 other people are doing. And again, that applies to so many areas of life. I feel like I've struggled

01:00:18.800 with a ton of stuff. Like I started with my weight my entire life. Like I've always been

01:00:21.800 a little bit on the chunkier side. And it wasn't until I really sat down and started talking

01:00:26.100 to people like, look, you are really good shape. What are you doing? And they're like jujitsu. And I'm

01:00:30.060 like, Oh, maybe I should do that. And so like, uh, so now I, I do that a little bit. I'm terrible.

01:00:35.360 I don't, I get killed every week, but you know, I, I started learning what are people who have

01:00:39.660 the body shape I want to have? What are they doing? And I go and do that. Uh, and so again,

01:00:44.300 it applies to everything. Oh, it does. I mean, this is, this is the, the core principle of what

01:00:50.340 we're doing here, even with order of man is, is I think curiosity is an under appreciated

01:00:56.060 and undervalued virtue, you know, but that's exactly what we're doing here. I mean, I'm taking

01:01:00.240 notes, right? Like I'm writing this stuff down. Not only do I want the guys to hear what you have

01:01:03.840 to say and learn all this stuff, but I want to learn it too. I'm really curious about how this

01:01:07.680 works so I can build out my portfolio and more generally just be a, be a better man. So yeah,

01:01:13.220 that curiosity is very, very important. Yeah. What, uh, what are some, uh, some deal breakers

01:01:20.380 outside of, outside of the cashflow? Cause we got that right. If you're not going to cashflow on it and it's not

01:01:25.200 going to be a good property that way. What are some deal breakers or some red flags to, to look

01:01:29.640 into when, when you're considering purchasing a property? I know I get emotional. Like I see

01:01:33.560 something and I'm like, Oh, this is awesome. And you fall in love with it and you overlook some of

01:01:37.840 these red flags. We do this with women. We do this with job opportunities. What are some things that we

01:01:43.320 need to be aware of? So not to get emotional. Sure. Uh, I, there's a couple of things. Number one,

01:01:48.780 like old crappy properties. And I still buy old crappy property. When I say that, I mean like, 0.98

01:01:52.980 you know, the, the, the sixplex that I'm looking at right now in, in Bangor is with built in like

01:01:57.120 1890 or something like that. It's an old, old property. Right. Right. Um, those are definitely

01:02:01.640 red flags. I'm not saying you can't do them, but they're why? Because the plumbing in those just

01:02:06.460 breaks more often. The, the, the walls aren't made of normal material that we make a drywall today.

01:02:11.160 They're made of lath and plaster. And so it's harder to fix. So just something to be aware of.

01:02:15.420 There's very few, what I would call like deal killers in real estate, but there's always like

01:02:20.080 conditional deal. Like there's things that make the deal good or worse or better. And you have

01:02:24.080 to compensate. There's compensating factors. Maybe that's the word is. So again, old properties,

01:02:28.720 that's a big one. Uh, but you can't fix neighborhood very well. I mean, you could buy

01:02:34.120 and hope that the neighborhood gets better, or you could see where the path of progress in a city is

01:02:37.980 moving and you could get in there. But I like to, I like to say that people are like the type of

01:02:42.680 tenant you get is the average quality of the property and the location. Let me explain what I mean

01:02:48.520 to that. If you have a really dumpy property in a really dumpy area, you will get a really

01:02:53.440 dumpy tenant and tenants. I love that. Somebody once said to be tenant is the asset. The tenant

01:02:57.540 is the asset. Like, yes, the property is our investment. That's what we're doing. But the

01:03:01.340 thing that makes or break your investment is, is the tenant you get, which is why another just

01:03:06.100 problem mistake people make all the time is they just put in people. They're like, Oh,

01:03:10.340 they seem nice. They let emotion guide their decision versus logic with tenant choice. But anyway,

01:03:14.740 so you have a bad property, bad location, you're going to get a bad tenant, almost guaranteed.

01:03:18.500 If you have a really great property in a really bad location, you're going to get a marginal tenant.

01:03:22.700 I'm not saying you shouldn't do it. I have marginal tenants, but just know, but if you have a great

01:03:26.280 property in a great location, you're going to get a great tenant most likely, as long as you do your

01:03:29.600 steps needed to find them. So again, a red flag is trying to buy a property in a rough area

01:03:36.420 and not doing the job to overcompensate on the quality of that property. Otherwise you just end up

01:03:42.320 with a bad tenant. And so like I, I avoid war zones. I don't want my, my rule of thumb is if

01:03:47.100 my wife can't jog there during the day, I won't buy there. And you know, it's different at night,

01:03:52.540 right? But if she can't jog there during the day, then I'm not going to buy there. And that's just

01:03:55.840 kind of my rule of thumb that I've always kind of, that's kind of guided my decision. So yeah,

01:04:00.340 again, that's the big, big one is that one is the neighborhood in the condition of the property,

01:04:05.040 those things, if you don't account for them, they'll just, it's, you just get eaten alive month

01:04:10.120 after month. Like you might think you're making money. And then a year later you have another

01:04:13.420 vacancy because another tenant trashed the place and walked out. That stuff sucks. So yeah, that's, 0.99

01:04:18.340 that's huge. Yeah. And then when they leave, you need to fix everything. Yeah. I am really curious

01:04:23.380 about appreciation in real estate because we know that we talked about earlier that generally,

01:04:28.940 you know, your real estate is going to appreciate. Is there a point at which it begins to depreciate

01:04:34.920 based on, you talk about neighborhood, for example, like neighborhoods don't generally

01:04:39.440 improve forever. They usually will improve for a bit and then they'll decline and somewhere else

01:04:45.260 will become the new hotspot. So like does depreciation happen? And if it does, like at

01:04:50.680 what point does an asset begin to depreciate due to the environment, neighborhood, that sort of thing?

01:04:56.640 Sure. Yeah. So it's rare for an air, for a house to lose value over the longterm. It's very rare

01:05:02.980 simply because of inflation. I mean, just inflation alone, like the cost of milk going up,

01:05:06.920 the cost of groceries going up, the cost of everything going up, wages going up. They tend

01:05:10.520 to just all go together up and to the right. And so over time, if you look at a 30, 40, 50 year

01:05:15.760 timeframe, you're almost, almost every area, even the worst area of like Detroit, which got hit the

01:05:21.380 hardest in the recession. Now, even those places like 20 years from now, we're going to be doing

01:05:25.540 awesome or at least significantly better. The real issue that I see is areas will go up and then

01:05:32.660 they'll level off. Or even if they decline a little bit, they eventually will get there.

01:05:36.660 And so what I look at a lot is like, can I get a higher, better use for my money by selling a

01:05:41.040 property? In other words, I don't hold on the properties for life. What I like to do is I like

01:05:44.860 to, what's called reposition them. You know, you get that, you get that upward trend, you get that,

01:05:49.160 you fix the property up. I love buying fixer uppers. I just, I like buying properties that are a little

01:05:52.860 bit yucky. Not like, you know, total gut jobs needing, you know, there's, you know, meth all over the

01:05:59.080 place. I don't want those ones, but like ones that like there's a house near me with bright purple

01:06:02.960 cabinets, all their entire kitchens, bright purple cabinets. And like, that's a pretty easy fixed

01:06:07.520 paint cabinets or putting new ones. I love that stuff. They must be like Minnesota Vikings fans

01:06:12.420 or something like that, or Huskies fans. Like they just purple cabinets. Anyway. So I love those

01:06:17.220 properties because now we take a property. Let's say you buy it at a hundred thousand dollars for

01:06:21.060 simple math. You buy it at a hundred thousand dollars. You fix it up. You put it in, let's say

01:06:24.560 $20,000 of work, right? So now we're in 120. It's not worth 120. If you did a decent job of

01:06:29.960 buying it now, it's 150, 160, 170, let's say. So we've got all this, like, we just went boom,

01:06:35.180 we just exploded our equity. And now from here on out, it grows fairly slowly. So at some point,

01:06:40.140 I'm going to look at that and go, you know what? If I sold that property, I could walk away with a

01:06:43.440 hundred grand and I could put that into this investment, whether it's real estate or something

01:06:47.180 else. And I would make a way better return on my money. So I'm always looking at that as called

01:06:51.180 return on equity, which is like, do I have a better use for this money? And can I put it into

01:06:56.820 something that's better? And so I'm always looking at those options. That makes sense. It kind of goes

01:07:02.680 back to what we were saying earlier, that law of diminishing returns, right? The big return is up

01:07:07.360 front where you built, you know, you put 20 grand into the property, it bumps up 30, 40, 50 grand.

01:07:12.240 That's the largest return in the shortest amount of time possible. And then that gradually tapers off

01:07:18.560 the longer that you own it, it sounds like. Yeah. Which is why house flippers love, you know,

01:07:23.880 and I like flipping houses too. It's fun. You buy that property for a hundred grand, you put 20

01:07:27.480 grand into it, you sell it for one 70. And after, you know, closing costs, whatever you walk with 30

01:07:31.260 grand, you're like, I just walked with, I just made 30 grand. And like, and I didn't have to do the

01:07:35.560 work. I hired a contractor and it was fairly easy. And, and, you know, we, we did a flip last year,

01:07:39.380 you know, this year, earlier this year, it made $130,000. Another one made $70,000. Another one

01:07:44.300 made like $50,000. Like those are real numbers. But here's the, here's the sucky part of that

01:07:48.440 is you pay, I pay roughly half, maybe even a little more than half in taxes. And so let's say I make

01:07:54.780 a hundred grand. It's like, wow, I just made a hundred thousand dollars on this, on this project.

01:07:58.300 And well, no, I only got $50,000. And then, okay, well that, now that $50,000 is gone.

01:08:03.320 That oil well is gone. I don't have that money coming anymore. Now I got to go work again.

01:08:07.240 And so there's nothing wrong with flipping houses. It's fun, but it is a business just like any other.

01:08:11.980 So you have to, when you stop working, it stops making money. So you take that money,

01:08:15.660 dump it into investments. Now you've got a good thing going.

01:08:18.600 Right. Right. Well, Brandon, I appreciate your time, man. We went through a ton and I know,

01:08:22.480 obviously just based on how long bigger pockets has been around and what you guys have been doing,

01:08:26.160 I went through blog posts and of course you and I follow each other on the socials and I've been

01:08:30.780 watching your stuff. There's an infinite number of things that we could talk about, but I want to send

01:08:36.500 the guys over to you if they're interested, right? If they want to learn more about real estate,

01:08:40.740 if they want to use this as a portion of the way that they're going to build wealth in their lives.

01:08:45.240 So how do they connect with you? Where would you direct them to go?

01:08:48.500 Sure. Yeah. You know, the podcast is probably a good way to listen. If you want to learn more

01:08:52.060 about real estate, I love podcasts because you hear stories of other people. And that's why I like

01:08:56.000 your podcast. You're like, oh, this is what this guy did. This is what this guy did in different

01:08:59.200 areas. So listen to the podcast. And I'm most active on social media, on Instagram. I'm like a 13 year

01:09:03.760 old girl with my Instagram all day. So connect with me there. Beardy Brandon.

01:09:08.060 Right on that. We'll sync it up. I actually, I really enjoy your videos. So your videos are

01:09:12.420 good. They're short, they're punchy, they're informative. So definitely guys, if you're

01:09:15.420 interested to go check out the videos, they're really good. All right, brother, we'll let you

01:09:18.460 get going. I really appreciate your time and obviously your expertise in valuable stuff.

01:09:23.900 I'm looking forward to using more of this information in my own life as my wife and I

01:09:27.680 continue to build up our portfolio to the degree that we want at our own pace, you know, but

01:09:33.340 but I certainly appreciate what you have to share. Thanks for joining us, man.

01:09:36.780 I thank you. This has been, this has been really fun.

01:09:40.140 Gentlemen, there you go. My conversation with the one and only Brandon Turner.

01:09:44.560 Brandon's such a great guy, a lot of excitement, a lot of energy, a lot of enthusiasm, and obviously

01:09:49.200 what he's doing with regards to real estate and how he's teaching regular ordinary guys like you and

01:09:55.100 I, how to invest in real estate, how to make it work pitfalls to avoid. This is all phenomenal

01:10:00.400 stuff. I know a lot of you guys are very, very interested in building wealth and real estate

01:10:04.800 is a great way to do it. As I mentioned in the conversation, I, I fell into this a little bit

01:10:09.440 by default with a couple of different properties. I haven't been real active in my real estate

01:10:13.280 portfolio pursuits, but after this conversation, I took a lot of notes myself, actually I'm going

01:10:19.540 to be in investing quite a bit more over the next, I would say five to 10 years. So if you're

01:10:24.540 interested in what Brandon is doing, hook up with him on social media, listen to the bigger

01:10:28.700 pockets podcast. A lot of you guys asked me about wealth building podcasts. This is certainly one of

01:10:32.380 them. And let him know if you would, what you thought about the show, where you heard about

01:10:36.960 what he was doing. And let me know what your biggest takeaway is on the socials, Instagram,

01:10:42.360 Facebook, Twitter, YouTube, et cetera, et cetera, parlor, all of those places. Check it out at Ryan

01:10:47.900 Mickler. All right, guys, we will be back tomorrow for the ask me anything with my friend and co-host

01:10:53.420 Kip Sorensen. And then of course your Friday field notes, but until then go out there guys,

01:10:57.280 take action and become the man you are meant to be. Thank you for listening to the order

01:11:01.840 of man podcast. You're ready to take charge of your life and be more of the man you were

01:11:06.500 meant to be. We invite you to join the order at order of man.com.

Order of Man - October 27, 2020

Building Wealth through Real Estate ｜ BRANDON TURNER

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