What It Takes To Build an Out-of-State Real Estate Portfolio and Earn Enough to Quit Your Job

Sarah Weaver lives with intention, reacts with flexibility, and practices patience. It’s how she managed to acquire 15 units and travel the world as a digital nomad. It’s why agents hire her to coach them. It’s how she started a company to fill a need in her industry. It’s how she earned the financial position to be able to pursue properties in the Smoky Mountains, an area that would have been out of reach for her just a year ago. 

But her journey wasn’t always smooth sailing. 2020 was a particularly transformational year, she explains on an episode of the BiggerPockets Real Estate Podcast. She admits to doing things the wrong way before learning to do them right. She wasn’t sure how to navigate her relationships with real estate agents or how to narrow her focus to the right investment strategy. That knowledge was, like Weaver’s success, earned through hard work. Now, she has carved a path that other long-distance investors would feel lucky to follow—and there’s a lot to learn from her story. 

Be Intentional

People sometimes ask Weaver how she grew her wealth so quickly. She says it wasn’t easy — but it was most certainly intentional. “I think one thing that I can say with confidence is I live really intentionally,” she says. “Was there a lot of tears and setbacks and frustrations? Absolutely. But I woke up and I was really clear on what my goals were and I didn’t let the little things knock me down.”

In 2015, Weaver wrote in her journal that she wanted to be location-independent. Within eight days, she had a job in the real estate industry that allowed her to work remotely. “And that was this ‘aha’ moment of manifestation. And so, ever since then, I’ve just been really diligent about writing down what I want in life and then not really taking no for an answer.” She knew she wanted to live in Buenos Aires. So three years ago, she bought a one-way ticket to Argentina. When you’re intentional about the life you want, you understand that obstacles are par for the course—and you don’t let them turn you around. 

Where to Start

A lot of success in real estate comes from starting with the resources you have. Weaver was living in Denver, Colorado, in 2017. The area was cost-prohibitive for her at the time, so she drove to Kansas City, knowing she could get a better price. “And so I house-hacked in Kansas City in 2017.” She went from single family to duplex to fourplex, house-hacking in different markets each time. It was never an accident that she would become nomadic. She built her investment strategy intentionally for that lifestyle. 

Co-host of the BiggerPockets Real Estate Podcast, David Greene, echoes that a lot of success in real estate and business is built in small steps. “It’s that incremental systematic progress where you’re not trying to just knock your opponent out in one punch,” he explains. That kind of patient escalation is something that Weaver has done very well. 

The Perks (and Challenges) of Long-Distance Investing

“I think long-distance investing is the absolute way to go even from day one. People ask like, ‘What do you do if something breaks?’ And I say, ‘It’s great. You don’t do anything.’” 

Doing nothing, however, requires a lot of proactive work. “ I have what I call the vendor list. And so I don’t just have one plumber. I have five plumbers because of course the day that something happens, the plumber that you love and trust isn’t available. And so that list is crucial.” She starts working on that list as soon as she’s confident she’ll close. It’s how she self-manages all of her 15 units from thousands of miles away. 

Doing nothing also requires that you do your due diligence, she says. “You have to have a team on the ground that you can trust. And so that’s where investor-friendly, investor-savvy real estate agents are absolutely clutch. You need to trust them, but just like online dating, you trust but verify. And so I like to have video tours. I walk the neighborhood on Google Earth. There’s lots of steps in my due diligence process that make long-distance investing possible.”

And though it might go without saying, strong WiFi is crucial. Weaver recommends setting up in a new locale on a weekend day to ensure you can get consistent internet access during the week. 

Though distance can be an obstacle, it also has its perks. Living abroad allowed Weaver to keep her expenses low, save more of her salary, and go from three units to 15 in just 68 days. “And when that happened, I woke up and was like, “Wow, I did it,” like I exceeded my lean F-I number or lean financial independent number. Meaning all of my expenses are more than covered by my rental income. I can easily leave my W-2.” It was always the end goal—and now it’s a reality.

Navigating Relationships with Agents

Working with agents can be difficult even when you’re not in a different time zone. Investing from abroad presents an even greater challenge. But ironically, when you invest from a distance, you rely on your agent the most. Weaver says choosing the right agent is part of the puzzle, and having flexibility in your expectations is another. “Ideally, your agent is also an investor, or at least understands investing,” she says. She asks probing questions when interviewing a real estate agent, such as:

  1. What does your lead generation look like?
  2. What does your portfolio look like?
  3. Have you ever done a BRRRR before?

Once you have a good agent, you should, of course, try to keep them. This means setting crystal clear criteria so your agent can confidently find what you need. For example, when Weaver was in New Zealand pursuing a deal in Omaha, she provided her agent with incredibly detailed criteria. “He knew to give me purchase price, current rent, market rent, estimated rehab, taxes, and insurance.” And that information made it easier for Weaver to evaluate the deal. 

Maintaining your agent’s trust also means putting your money where your mouth is. “One of the quickest ways to be sent to the bottom of an agent’s list is to tell them your crystal clear criteria, the agent sends you that deal, and then you don’t write an offer on it.” 

It’s important to be respectful of your agent’s reputation and time. If they’re going to reach out to their contacts for you and find off-market deals that meet your criteria, you need to be certain about what you want and willing to write an offer when you find it, or it will reflect poorly on them. Weaver also has different expectations of how her agents spend their time than she would from a residential agent. “I actually don’t make my agents walk a property unless I’m under contract,” she says, because their time is spent hunting deals. 

If you’re looking for an investor-friendly real estate agent, check out Agent Finder in the BiggerPockets Marketplace to find vetted and professional real estate agents who can help you secure the deals you need.

Choosing the Right Investment Strategy

Weaver’s success was only possible because she focused on one strategy at a time. Currently, she’s finding a happy medium in the medium-term rental strategy. “If you have someone who’s willing to book your place for a month, two, maybe three months, they want it fully furnished. You, the landlord, cover utilities, and you might not get as much rent as you would on Airbnb, but there’s less turnover. There’s guaranteed income,” she says. 

This strategy also allows investors to evade local ordinances that restrict the number or type of short-term rentals allowed, which have become popular in Western states, particularly Colorado. 

Weaver says she’s had success listing her units on Facebook Marketplace and FurnishedFinder.com. But Airbnb can also be a reliable place to find medium-term tenants. Airbnb CEO Brian Chesky says more people are reserving rentals for a longer period because the pandemic has led to more remote work. In the fourth quarter of 2021, 22% of the nights booked were for stays of one month or longer. 

Filling a Market Need

Investors often have the unique ability to recognize the unmet needs of other investors, and that’s the idea behind Weaver’s newest venture. “I am now filling a need in the market. I started a company called Arya Design Services, and we help investors either revamp or fully launch their Airbnb. We can buy all of the furniture remotely, have it sent to the unit, and people on the ground can put it together, or you can fly my team in to furnish it themselves.” 

It’s just another example of the opportunities that can present themselves when you live with intention, react with flexibility, and practice patience. 

agent marketplace 2

Find a Local Agent Today

The BiggerPockets Agent Finder makes it easy to connect with real estate agents who know the local market and can evaluate properties from an investor’s perspective. Here’s how it works:

  1. Pick your market
  2. Share your investment criteria
  3. Match with a real estate agent

2022-06-30 14:42:59

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Everything You Should Know About Buying Vacant Land in Canada





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A home is the biggest transaction most of us will ever make. That’s why it’s important to work with an experienced and knowledgeable real estate agent. For more than 20 years, RE/MAX has been the leading real estate organization in Canada and beyond. With a presence in over 100 countries and territories, the RE/MAX network’s global footprint is unmatched by any other real estate brand. RE/MAX has always been an industry leader, adopting the latest technology and creating innovative marketing programs. RE/MAX was the first brand to expand its reach world-wide through a revolutionary global listing site, featuring listings from more than 80 countries, displayed in over 40 languages. Closer to home is RE/MAX’s deep commitment to the communities we operate in. Our exclusive Miracle Home Program allows RE/MAX agents to donate a portion of every home sale to Children’s Miracle Network.

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2022-06-30 13:23:28

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Brandon Turner’s 4-Step “Viral” Formula That’ll Bring You Deals TODAY

To real estate investors and real estate investing enthusiasts, Brandon Turner is a household name. Not only has he written one of the most successful real estate investing books ever published (The Book on Rental Property Investing), but he also pioneered the real estate podcasting, social media, and blogging space. Funny to think that only a decade or so ago, this massively successful capital raiser, business founder, and CEO was painting rental properties, just trying to quit his soul-sucking job.

So how did Brandon do this so quickly, and what’s going on in the brain (and under the beard) of one of the most successful real estate investors on the planet? Surprisingly, Brandon doesn’t have some secret formula, world-changing analogy, or crystal ball. He simply did what he said he would do—look for deals consistently, make offers whenever he could, and close so he could move on to the next. If this sounds familiar to your situation, but you’re struggling to find success, you may find that his system is a little bit different from yours.

Brandon gives valuable insight into the “machine-building” he’s doing over at Open Door Capital, how he’s successfully growing his personal brand, and why real estate investing success should never be a surprise. If you’re a new listener to the show, it won’t be long before you realize why Brandon Turner was (and still is) one of the most beloved voices for building wealth.

David:
This is the BiggerPockets Podcast show 629.

Brandon:
Success is not a surprise to anybody who’s successful. In fact, it’s surprising when you don’t get it. If you had somebody driving for dollars three times a week, mailing all those things, had a sales guy entering the phone, meeting with people and you didn’t land a deal after a year, I would be surprised. I’d be like, “Wow, something went wrong in that system. Obviously, the machine just was broken,” but I’m surprised because I feel like it should have worked, and I would say, usually, the reason those machines don’t work is because you invented the machine yourself.

David:
What’s going on, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with my cohost, Robert Abasolo. In today’s show, Rob and I are going to be interviewing my former cohost and best friend, Brandon Turner, a staple in the BiggerPockets community. So if you are new and you don’t know who Brandon is, you are in for a treat. Rob, good afternoon to you. What were some of your favorite parts of today’s show?

Rob:
Oh, man. Very tense show, man. I felt like Brandon was staring me down the whole time, and like I was stepping on some shoe. No, I’m just kidding, man. It was really great.

David:
That’s a good point. What was it like to meet my ex?

Rob:
It was really great, man. I was like, “All right. This has to be a good podcast or else I will have failed at my job,” but honestly, I don’t know if we’ve ever laughed quite so much in my short tenure as a cohost on the BiggerPockets Podcast. So had a really great time. Brandon’s always a hoot, as they say. We came up with a really fun acronym that we’ll be revealing at the very end of the episode. We talk a lot about personal brand development and you know how you can use social media to boost your real estate career.

David:
That’s exactly right. So Brandon was instrumental in hosting this podcast with Josh Dorkin to get it started building. It’s what he is. He’s the best selling author of several books. One of them, the book on rental property investing, is the best selling book in the entire real estate world, period, which is pretty amazing. He’s also my best friend, which is really his biggest accomplishment, and about, what it was, six months or so ago I’d say, maybe longer, he left the podcast to focus full-time on his company, ODC, where they raise money and buy apartment complexes, mobile home parks, really big cashflowing stuff and make money for their investors.

David:
So on today’s show, we get into what Brandon has done to build his email list, to build his social media following, to build credibility and trust with other people so that they’re willing to lend him money and how our listeners can do the same.

David:
Before we get into the show with Brandon, let’s get to today’s quick tip. Today’s quick tip is brought to you by Rob Abasolo.

Rob:
Listen, guys. If you are looking to jumpstart your real estate career, if you want to get into content, I think you don’t need to overthink what kind of camera or microphone that you guys have. All right? At the end of the day, they say that the best camera on the market is the one that you have on you. So my quick tip is put yourself out there because even before I was Robuilt on YouTube, I was striking up partnerships, I was taking on investors, and I was partnering with people all over the place just by simply making content on social media and talking about my Airbnb journey. You can do it, too, guys. You really can. How did I do?

David:
That was amazing, especially because you had to make all that up on the spot.

Rob:
I know, man.

David:
I have no idea I was going to drop it on you.

Rob:
How dare you?

David:
Now, just a announcement to everybody. Today’s podcast is going to be a little bit longer than usual. We went into overtime because it’s not every day that we get to have Brandon back on the show, and we know that the nostalgia factor will be pretty real and high for many of you, which is exciting. So make sure you listen all the way to the end because there is a challenge that has been dropped between Brandon and I regarding our text letters, and I would love your participation and you don’t want to miss out as well on Rob’s amazing acronym that he created on the spot. So listen all the way to the end, participate in the challenge, please. Brandon’s not here anymore so I can just say vote for me.

David:
One last thing before we bring in Brandon. We’ve got some free content for you. Go to biggerpodcast.com/podcasts and click on The Real Estate Show. It’s one that has Rob and I’s pictures on it in the top left. Click on it and you will see a link to download some free information on how you can build your own social media following because we want you to be able to raise money to buy more real estate just like us. All right. Let’s bring in Brandon.

David:
Brandon Turner, welcome to the BiggerPockets Podcast. I know nothing about you. I’m not sure how we even got you booked on the show or why you’re here. So can you tell us a little bit about what you have to do with real estate investing and why we should be talking to you?

Brandon:
Yeah, guys. It’s such a good honor to be on Deeper Pockets. I’ve heard a lot of good things about the show, but I don’t know why my agent booked me. So anyway, what do you guys talk about in Deeper Pockets again?

Rob:
Yeah, how to spend money on houses and you know how to manage crazy tenants and stuff like that.

Brandon:
That’s lame. Let’s switch gears today and let’s talk about something more fun. Do you hear about CrossFit? Can I tell you guys a little bit about CrossFit?

David:
No, I have it, actually.

Brandon:
How do you know somebody’s in CrossFit? They’ll tell you.

Rob:
When they say terms like what.

Brandon:
There you go. All right. So I’m Brandon Turner. I was the host of the BiggerPockets Podcast for a long time. I don’t know how many years, a long time, nine-ish years, and then there was a mutiny and Rob kicked me off. So now, I live under a bridge somewhere outside of David’s house and he feeds me occasionally, and it’s all good. So that’s my story, and I’m sticking to it.

David:
Those that are new to the podcast, I’m a bit of an Eminem to Brandon Turner’s Dr. Dre, if you will. So Brandon’s the man responsible for pretty much you hearing me right now and anything to do with me having an opportunity other than real estate investing. So thank you for that and thank you for coming back. I just mentioned you on the show that we were recording about how I needed a really clever name. Rob, do you remember what I was saying I needed a name for and I was saying I wish Brandon was here?

Rob:
Something about the 1099 mentality and then I believe you were like, “Oh, yeah. This is one of those moments where I really miss Brandon Turner.”

David:
Yeah. We were talking about the fact that new investors have a very difficult time adapting to this space because it’s an entrepreneurial mindset you have to have. You have to be creative. You have to have the 1099 mindset, which is, “I got to figure out a way to solve a problem, and that means that I have to work past 5:00 sometimes or I can work on a Saturday, not a Tuesday.” There’s flexibility. When people bring the W-2 mindset into real estate investing, they’re just constantly frustrated because this world will not honor the way that they’re used to thinking. I was like, “I wish I had a word for what that’s like when their expectations are the W-2 way,” and I had little tear come down my cheek. I’m like, “I wish Brandon was here. He was always good at this.”

Rob:
It was more than a tear. It was more.

Brandon:
It was a sob.

Rob:
We had to tell the editor to, we had to have him cut out 10 minutes of David sobbing.

Brandon:
Well, if you want a real connection there, we don’t need to go into this because we’ve talked about it on the show many times before, but the BP Con speech that I gave last year at what, 2021, and David, you came up on stage and did it with me, we talked about those four mindset levels of entrepreneurship, right? It was the DIY level, which is, “How am I going to solve this problem or build this business?” Then there’s the project manager level, which is, “I’m going to hire my brother-in-law or cousin or whatever, some person I know to do that thing.” Then there’s the COO mindset, which is, “I’m going to build a business.” There’s the fourth level, which is, “I’m going to inspire a team and I’m going to be the visioner that leads it, but I’m not actually doing anything,” right? There’s the four levels.

Brandon:
So here’s where I bring that back to what you just said. People bring the mindset at which they were at at their job into their real estate so often, right? So if they were a DIYer in their job, which 99% of jobs are DIYers, unless you’re a middle manager, then you’re probably a project manager, unless you’re a CEO or COO, then you’re that, but you bring what you brought in, right?

Brandon:
So when J Scott, for example, book on flipping houses J Scott, when he got into flipping houses, it never occurred to that guy to go and pick up a hammer because guess what he was at whatever, whatever tech company? I don’t know if it’s Microsoft or Google or whatever, but he was a project manager. That was literally his job. So what did he do when he came in? He project managed.

Brandon:
When I got into real estate, what did I do? I picked up a hammer because we carry the mindset in which we left our job or which we currently are at our job into our real estate. It’s not always a bad thing, but it can be a limiting thing.

Brandon:
So yeah, if you want to tie that into today’s topic a little bit, the fourth level there, which I mentioned, I call it the architect. It’s that visionary. They inspire. One of the greatest ways to do that is to have a personal brand or a following of some kind or at least to have a good reputation out there in the world. That’s how you elevate to that fourth level. So that’s why today, when we were talking about what we were going to talk about today, I thought that would be a cool topic.

Rob:
Yeah. So do you feel like you have to do all? Do you have to earn your right of passage in each of those levels or do you think it’s possible to skip around or move from one to the other faster?

Brandon:
Dude, that is the question. That is the question. I mean, I could spend hours on this topic, but here’s what I would say to that. Number one is you do not have to. If there’s one thing you take from today’s show, I hope it’s this. You do not have to move through them. Everybody does, almost entirely. Most people move through them, but you do not have to. You have a full, complete, 100% choice on where you begin and where you begin matters because every level has a limit. You are not going to be a multi, huge millionaire working four hours a week sitting on a beach if you’re the DIY mindset. You just are not doing it because your money is tied to the hours worked.

Brandon:
So you can choose, and this is an easier said than done, but you can choose mentally and say, “I’m going to approach it this way.” I’ll give you the hack for doing that, by the way. Remember those WWJD bracelets that everyone wore back in the ’90s, What Would Jesus Do? It was like, “Should I smoke this cigarette? What would Jesus do?” and you point to your wrist and then you don’t do it, right?

Brandon:
That concept, I literally want to have a bracelet that says WWEMD, What would Elon Musk do? What would Richard Branson do? So think of the person you want to … Who is the ideal person in that category? Whether you want to be a COO type level, you want to be more of the architect level or you want to be a project manager level, who’s that guy or girl? What would they do? That’s the easiest hack to start thinking in that mindset. So yeah, you can choose. Rob, great question.

Rob:
That’s very tangible advice, I think. I have to remind myself that I don’t always have to do everything. I’m in between two and three right now, but I want to be a four, but I don’t want to quickly move up there until I’ve really cut my teeth on this 2.5 stage that I’m at right now.

Brandon:
Yeah. Well, be at that four, that architect level, not that I’m always there, but I feel like when I built the current company I have which is called Open Door Capital. By the way, I never explained the story. We can come back to that. I built a big real estate company. We did a lot of cool stuff. I was on the podcast for years. I wrote some books, but when I built the current company, Open Door capital, which now I think we’re right on the verge of 4,000 units, but when I built that I said, “I’m going to build this like an architect.” I’m not going to move through it. I chose to build it as an architect.

Brandon:
So to do that, and this is my encouragement to anybody out there who wants to operate their business in that way, to be a Elon Musk or a Richard Branson, the number one thing to do is to hire yourself a CEO or a COO. Again, easier said than done, but that’s the key is if you want to elevate to the next level, you hire the one at the current level. If you want to stop painting your rental units and answering the phone when a tenant calls, what do you do? You hire a person to answer the phones and paint. So now you’re a project manager, but if you want to just jump right up to the top, go hire yourself a good COO.

Brandon:
Here’s the thing that’s so powerful. When you have an online presence of any kind, I don’t care if you’re experienced or brand new, when you start building that now, that allows you to connect with people and network in a much bigger way than you could ever do in the old world where you actually have to go physically go handshake people.

Rob:
Oh, taboo.

Brandon:
I know. I know. I don’t like touching people. Now, you get to touch people online, right? It’s way less creepy and less germy.

Rob:
In a metaphorical sense.

Brandon:
Yes, purely in the metaphorical sense. Anyway, so the idea being, if you want to elevate yourself, why would we want to do that? Because you make more money and you work less hours. I mean, that’s awesome about being elevated and you get to inspire people. Having a good reputation, especially having a good reputation, is key online because you can find people to work on your teams to get you to that next level. You can find your CEO, your COO, your project managers, your whatever. So that’s been my focus a lot the last six months. Ever since BP Con, I’ve just been every day thinking on this concept.

David:
So my thought was-

Brandon:
It’s like I just gave you permission. I just called on you.

David:
I know. You can’t help it, man.

Brandon:
Yeah, I can’t help it, man. I’ll allow you to speak now and ask a question, David. What would you-

David:
I take it when you’re around your dad or something and you’re getting to drive somewhere that he’s giving the keys and he drives your car. It’s just how this thing works.

Brandon:
Yeah. You automatically go back to those. When I go home for Christmas to my family, I’m instantly back into like I’m 12, my sister’s 13, my brother’s 10 and nine, and we’re fighting in the back seat of a minivan. It’s like we’re right back there again. Anyway, David, what did you want to say?

David:
When you described your four levels thinking, I think there’s a fallacy that people have that the DIY level is the wrong way to do it, and the higher you go up this list, the easier it becomes. So what you’re trying to do is just put aside the temptation to do it yourself, and with every level, it becomes easier and easier and easier, but that’s not true. It’s a different set of skills that you have to do.

David:
There may be a higher value at being an architect versus do it yourself, but that doesn’t mean that you just become an architect. You don’t just say it. I mean, there’s a skill of project management that J Scott had built. Often, that’s what stops the DIYer from going up is they don’t know how to win at that level.

David:
So what we’re really describing here is how do you build the skills to be good at every single level because we do want to be progressing upwards, but it doesn’t just happen. You don’t just get a promotion. When you’re at the level that you’ve achieved, Brandon, where you are raising money, you’re hiring people, you’re calling the shots with Open Door Capital, I was wondering if you would share what are some of the skills that you’ve had to build so that you can do those things to earn the right to get to the level where you’re at now.

Brandon:
Great question. Yeah. So I’ll lay out a few of them. So first of all, if I want to move from DIY, so when I originally got into real estate, just like a lot of people listening to this, my wife and I were out there till 2:00 in the morning painting rental units before a tenant moves in. We were taking all phone calls. We were doing all that stuff. So that is where we all started or at least most people tend to start is doing all the stuff themselves.

Brandon:
The skills needed to get to that next level, if we want to just jump one level at a time, I want to go from that to project management. All right. So what does a project manager need to do? They need to know how to set a scope of work like, “This is what needs to get done.” Now, obviously, this is industry-specific, so different industries have different requirements, but basically, you’re going to say, “This is the job I’m going to hire you to do. I’m going to hire a property manager to manage my tenants. That is what my job is going to be. I’m going to hire a contractor to go do this job and you need to keep them on time and on budget.”

Brandon:
Now, I personally hate that level. I hate project management more than probably any other thing in the world. I would rather DIY or jump to the other one. This is why you brought the point. It’s not that any of the levels are bad. I like DIY and there are areas of my life I choose to DIY business stuff because I like it. I like being involved with that stuff, but there are areas of my life that I really like. I don’t want to be a project manager typically ever. So anyway, so if I want a project manager, I got to be able to set schedules for people and hold them accountable, hire the right third-party people, all that next.

Brandon:
Next, if I want to be a COO or the CEO, COO, however you want to call that, you really got to understand how to, A, hire internally because you’re probably building an internal team at that point, but you need to know how to organize that whole thing. This is where the book Traction from Gino Wickman comes in really handy, and we had Gino on the podcast a while back. That is a system in which you manage all of those people in their organization.

Brandon:
If you want to visualize this, by the way, a COO, that level I think of as you’re in the middle and there are a bunch of roles around you. You are the center and you’re meeting with all these people that are on your team and you’re inspiring them and you’re pouring into them, and it’s amazing. It’s a cool spot to be in, but if you suddenly got hit by a bus, it’s painful for the team because you were the team lead, you were running everything, you were there as the CEO. That’s the difference between the fourth level, the architect. The real skills you need to learn there are things like inspiration. You need to be problem solving, delegation at a large level, not just like, “Hey, I’m going to let you choose how to run that, whatever, how to paint that wall,” but to the point of, “You might even choose what properties we buy.” You’re delegating large things at that level.

Brandon:
Really, you’re just working on brand. I mean, at that point, the fourth level is largely about brand. Richard Branson can own 150 companies and raise all those money to buy these companies and do all this cool stuff because Richard Branson is a freaking cool individual, right? Some people are like, “Oh, yeah, Richard Branson is doing it. Okay. Yeah, let’s do it. Oh, Elon Musk is doing it. Yeah, let’s let’s do it,” right? It’s because they have this persona that just radiates out energy from that level, and because of that, the team can be built just based on that radiance, but the person’s not in the middle. They’re not even involved. They might not even know what’s going on. I doubt Richard even knows half the companies he owns, but it’s his energy that drives the growth of those. Does that make sense?

David:
So let’s talk about that. If you want to build something like that, what are some things that people need to be aware of that will work or what’s a strategy they could have? What have you learned since you’ve left the podcast about how to grow that personal brand?

Brandon:
A couple thoughts. I mean, we can dive as deep as you want on this. It’s like I can do a masterclass on this topic here. First of all, let’s talk about what a personal brand is for a second because I have a friend who’s an attorney and very different mindset, very W-2 mindset, but she always makes fun of me if I ever say the word personal brand because she’s like, “There’s no such thing. You either are a person or you’re a brand. You cannot be a personal brand,” and I differ because the word brand, if I were to ask you guys about Coca-Cola’s brand, what is that? Is it their logo? I mean, that’s part of it, right? Maybe. Is it their colors that they use? Is it the cute snow, what’s it, the little polar bears they use at Christmas time? What is Coca-Cola’s brand?

Brandon:
This is how I define your brand or your personal brand is it’s how people think about you when they think about you, right? How do you think about Coca-Cola when you think about Coca-Cola? The answer to that, that the bulk of people when they think about Coca-Cola, what they think about that is your brand. So if people think of David Greene, what are they thinking about is who David is. I still think of … and largely, books can help with this, right? So I think of David as long distance investor. He’s really good at that. He loves the BRRRR stuff. He’s awesome at the BRRRR stuff. He’s a real estate agent that’s one of the best in the world. When I think of David, I think of ridiculously large, strong arms that are bulging because I don’t know if you guys have seen David lately, but his arms and shoulders look like … He looks like the Incredible Hulk but a more handsome version and he’s not green. It’s insane.

David:
Wow.

Brandon:
When I think of David, that is a large piece of David’s brand, and now getting into vacation rental stuff. It’s how I think of you is your brand. So I would argue that every single person out there, Rob, you’re included and everybody, has a personal brand right now, but most of the time, we’re not even thinking about how to improve that or why that even matters. So when I say personal brand, that’s all I’m talking about is what do people think about when they’re thinking about you.

Rob:
It’s very funny that you say all this because my former life before I was a podcaster, YouTuber, content creator, I was actually in advertising. I’m a creative copywriter by trade. So literally, my career-

Brandon:
I love that. Dude, just this morning I was like, “I need a copywriter to help me with some copy. I don’t know a single copywriter.” I said that to my assistant today. I was like, “I don’t know a single copywriter.” Look at that. The universe brought me one. The universe brought me one.

Rob:
There you go. You’re looking at a senior creative copywriter. I’ve written-

Brandon:
All right. Well, I’m going to need you to quit this podcast and come help me on copywriting from now on. All right. Anyway, keep going.

Rob:
Well, it’s funny because of the amount of scrutiny that all of my clients had. I worked for Gatorade, for Hyundai, for Sonic, for Ole Smoky Moonshine, you name it. I’ve worked for so many brands, and there’s so much scrutiny that goes into the brand and, “Oh, that word, that’s not very Hyundai,” or “That’s not very Gatorade.”

Rob:
So my whole career I’m so scrutinizing what brand really means, and now that I’ve quit advertising, I’m like, “Eh, I’m fine. I’m good. I’m good to break rules and stuff like that.” So for me, I’m very focused on developing personal brand and who I am, but I really have to really challenge myself to just push the limits of what that means because I also don’t really like being conformed to the box of a brand sometimes.

Brandon:
Yeah. I agree. I don’t think you have to define it like, “Coca-Cola is a soda company.” That’s not my brand. The brand’s evolving. It’s just how do people think about you. I mean, if you’re posting on Facebook inappropriate comments all the time or you’re negative all the time and complaining, when you’re posting an Instagram comment that’s just, that’s the brand you are building, and people don’t realize the things you do today affect your building in the future.

Brandon:
So going back to that, what we said earlier about this idea of does this apply, does this concept apply to new investors or is this something I’m talking about people who want to raise millions of dollars like we do, it applies to everybody, especially if you ever want to bring on a partner ever. You got to know that your partner’s going to check you out on online and figure out who you are.

Brandon:
If you ever want to raise money in any sort, maybe you want to raise 100 grand to help fund a flip, you want to raise $100 million to buy an apartment complex and everything in between, the brand you build today, I mean, the brand you’re going to have in the future you’re building right now, right? It’s like that great quote, “Dig your well before you’re thirsty.”

Brandon:
If you ever think you’re going to need to raise money from people, start building your brand today, and it doesn’t mean you have to have a logo and colors and a beard or whatever. I go a little overboard sometimes with the branding, but it’s just pay attention to who you are, and then if you want to supercharge it a little bit, you can get into the world of content creation, which is what the three of us do online, and we do that for a reason, not just because we have big egos, but because it actually grows our business to crazy levels.

Brandon:
I don’t know. It’s like magic, isn’t it? Remember back in the day? You’d have to go to conferences every week and go speak and go meet with people and meet with hundreds of people, and then maybe a couple of them might invest with you and you could raise a few million dollars over the course of 10 years of doing that. Now, it’s like you could have a podcast or you could have a YouTube video or you could have a TikTok dance. It’s crazy. Anyway, yeah, David?

David:
Rob, I’m going to throw it to you in a second to ask about content creation specifically because you did it from the ground up.

Brandon:
Oh, I thought you just pulled the Kanye like, “I’m going to let you finish in just a second,” but Beyonce was-

David:
The real MVP, yeah.

Rob:
I was calling on David because he raised his hand.

Brandon:
Oh, there we go. Okay.

David:
Yes. Yes. See what you’ve done, Brandon? You’ve now put Rob in the position where he is like, “I will allow David to speak. You have the floor for 30 seconds.”

Brandon:
See, Rob, let me teach you a few things about handling David here. Number one, you have to put him in his place right away. It’s like going to prison. Find the biggest guy and knock his teeth out. Dave, you have to knock him out right away and then he’ll do whatever you say. Keep going, David. I’ll allow it.

David:
That was the only piece of advice you had?

Rob:
That’s it. Just hit David.

David:
Yeah, just hit Dave up and punch him in the mouth.

Brandon:
Yeah, walk up, punch him in the mouth. You’re fine. All right. David, you were saying?

David:
You know what’s going to happen at BP Con now when I’m surrounded by just thousands and thousands of people that are like-

Brandon:
Those watching you, yeah.

David:
All right. So Rob, you did it from the ground up without a platform like BiggerPockets. So I think you have a lot to contribute to this conversation, but what I wanted to point about what Brandon said, what I don’t want to have be overlooked, there are certain phrases that in our industry and other industries, they trigger a response that isn’t really accurate to what the word means, but it can be associated with things that people don’t like.

David:
So HELOC, for a long time, we don’t think about it bad now, but if I go back five years, 10 years, saying HELOC made people bristle up immediately like, “Enemy, bad.” You use HELOCs to do bad things and you lose your house. Appreciation, I mentioned several times, has been lumped in with speculation. So when people hear the word appreciation, they automatically think you’re taking a risk, and every time I say that word, I then have to go defend what I meant by when I say it because nobody’s trying to understand.

David:
Networking has that connotation. It sounds like you’re walking around glad handing people, handing out business cards, schmoozing in a very unnatural way that nobody likes, right? So we’re trying not to say the word networking. What we’re actually trying to describe is go meet people, make connections, build genuine relationships, and then they’re going to want to help you.

David:
Brand has that same vibe to it. I hear a lot of professional athletes are describing is, “I need to build my brand,” and it just sounds very pretentious. It sounds douchey. You’re not that important that you need to have your own brand, but if we use a different word to describe what they’re actually saying, it’s my reputation, the way that people feel when they think about me. That’s very different. I could get behind that and I want to highlight this is what you’re getting after is when I go look at, say, Brandon’s TikTok or, sorry, his Instagram. I was warned by Brandon not to go on TikTok because it’s addicting. So I’ve never actually done it.

Brandon:
It’s addicting. I’m there. I’m there.

David:
Your Instagram tends to be very inspirational and uplifting, and it gives me a good feeling whenever I see it. It’s like a puppy. You feel good when you’re going to see a puppy, right? Other people’s Instagram give me the feeling of this person just wants attention. They’re posting things because they want to be noticed or they just want to be controversial for the sake of being controversial. They just throw things out there to see what’s going to fire people up.

David:
If you think about the way that you impact other human beings, it is a incredibly smart business move because other people will subconsciously make decisions about pleasing those they like. So if you want someone to bring new deals, if you want someone to share their contractor with you, you guys all agree, we don’t share our contractors with just anybody. You’re not going to let your girlfriend get in a car with just anybody, right? You know this person really trusts you when they’ll leave you alone with their wife or something like that.

David:
If people don’t trust you, they’re not going to tell you about the secrets that they have where they’re really going to help you versus if they like you, they want to see you win. They are way more likely to give you those little ins. So that’s one of the reasons, Brandon, I think people know your heart is so good, that they’re more likely to lend money to Open Door Capital because I would be thinking, “Brandon wouldn’t put a person on his team that’s not a good person. Brandon’s not going to put his name behind this if it wasn’t a good product.”

David:
If you don’t have that with your sphere of influence, if people don’t get that impression when they look at you, you’re never going to know it, but they’re not going to be sending good things your way.

Brandon:
That’s a really good way of putting that. I love that you brought up the fact that they see me on social media. This is why social media is, I think, so valuable for people who want to eventually raise money or bring partners in or build any kind of real estate business. It’s because people like to do business with people they like. So what’s the fastest way or maybe not fastest, the best way to build knowledge, like, and trust, right? Those know, like, and trust, the three keys. Once they know you, like you, and trust you, people will want to work with you, give you money, partner with you, whatever.

Brandon:
So how do you develop that? Then more so, how do you develop that at scale? Social media allowed that more than anything else ever. So people will watch me for years. I mean, there’s people right now listening to this probably who listen to me for seven years on a podcast, eight years, nine years on a podcast and then invested with me because they were like, “Oh, now, I know him. I feel like I know him because I’ve seen how … I was there when his daughter was born. I was there when his son was born. I know how he treats things,” because we all know how you do anything is how you do everything. Even if you’ve never said that phrase, subconsciously, if you’ve got a buddy who’s always late to everything, always mismanages his money, always broke, always struggling, you assume he’s probably going to be like that if you were to give him 50 bucks to whatever. How people do things is how people do things.

Brandon:
So social media establishes your reputation over time so that you can cash in on that in the future. I don’t mean that in a bad way, but you can jab, jab, jab, right hook is what Gary Vaynerchuck calls it. You give, give, give, give, give, and then when you need something, you can ask, and it’s the most powerful thing in the world.

Brandon:
You actually nailed this better than anybody else on earth. Josh Dorkin, founder of BiggerPockets because Josh, for the first decade, didn’t charge anything for anything on BiggerPockets. It was all just free, pretty much entirely free. He had a donate button. You guys remember the donate button? He had a donate button. That’s how BiggerPockets made money is people donated. Why did Josh do that? Because he understood that if he can get millions of people to know, like, and trust this brand of BiggerPockets, he could do whatever he wanted later. He could start a publishing company. He could launch whatever. He just knew that. So yeah, brand is huge.

Rob:
I think that a lot of people, also, they over, okay, what am I trying to say here? They overthink what social media has to be because they see people like us, influencers out there making content. Oh, man, influencer is another word, David, by the way. That’s another one. I hate ever saying that I’m an influencer, but content creators, I like that more. They see it and they’re like, “Oh, well, if I can’t be that, then I’m not going to do it because I can’t do it that well, but what I try to remind people for myself is that when I got started raising money and partnering with people, I wasn’t Robuilt on YouTube. That did not exist. What I was doing was I was posting photos of my Airbnbs. I was putting all my properties up there. I was showing people. I was always talking about it because I was so proud of my successes that I was like, “You guys can do this, too.”

Rob:
Then I would have friends that reach out and they would say, “Hey, I see that you’re really good at this Airbnb thing. I don’t know. Can we partner up?” and I’d be like, “Sure. If you fund it, I’ll run it.” So I got a lot of partners this way and this was far before I had any platform. So for people that are looking to get out there, I always tell them, just put yourself out there because really, just posting about it, you never know who in your life or who in your network or that random person that you went to college with on Facebook might be interested in actually investing with you.

David:
Well, let’s take this a little deeper, if we will, and this is going to be applicable to everybody. It’s just uncomfortable. As a real estate agent, I’m often telling the agents that are out there, you need to make videos, you need to post things online. You don’t want to be a secret agent in this world. Everyone needs to know this is what you do. The majority of them will come back and say, “I’m not comfortable on camera,” and that sounds very humble like, “I’m just not a person that wants to put myself out there. I’m very private.” These are the words they’re using today, but they’re really-

Brandon:
Yeah, but you have that passive-aggressive like, “Oh, it’s good for you, David, to put yourself out there, but I just don’t have that big of an ego.”

David:
“I don’t need that much distention as you.” Yeah, that’s what’s there.

Brandon:
Yeah, exactly, “I don’t need that much attention in my life.” Some people it’s okay for you, but I’m like-

David:
That’s how it comes out now, but what I’ve learned is that’s coming from a very defensive part of us because the reason they’re not good on camera, I mean, there’s a degree of you got to learn how to do it to a degree, but it’s more they are not confident in their skills as a real estate agent. They don’t know what’s going on on the market, they’re not a good communicator, they maybe sold two houses and they don’t even know what forms they’re supposed to use, but they don’t want their clients to know it.

David:
Social media is an amplifier. If you are an attention-hungry degenerate, it’s going to show up. People are going to be able to tell. This is how you live your life. It’s amplified for everybody to see every single pictures of your butt. If you’re somebody who genuinely likes teaching or helping, it’s going to show up. It amplifies what’s already there.

David:
So when someone’s not confident in what they’re doing, it’s very clear when they make a video. They can’t hide it anymore, right? I would say email is the opposite of an amplifier. It’s like a diminisher. You can pretend to be a keyboard warrior when you’re just typing a comment on YouTube or you’re in an email. Video and social media makes that harder.

David:
So what I’ve recognized is if you make yourself go out there and do what we’re talking about here, the holes in your game, the flaws in your approach get exposed, your lack of confidence, your lack of knowledge, whatever the problem is, you can’t hide it anymore, and that’s what everyone’s actually trying to avoid addressing when they’re saying, “I don’t like to post,” and it’s just an uncomfortable thing.

David:
There’s a lot of cognitive dissonance associated with, “Yeah, that’s why I don’t want to make videos.” So I’m going to throw it to you two. Did you have those emotions, and what did you do to get over those when you both started making a lot of content?

Brandon:
Rob, would you like to be next? I’ll allow it?

Rob:
Yes, I would like to go. I would like to go.

David:
It always reminds me of that scene in the office where Michael says, “I’ll allow it,” when he’s being at a disposition where he has to answer questions and they’re like, “Mr. Scott, can we ask you something?” and he says, “I’ll allow it,” as if he’s in control. Yeah.

Rob:
So funny story. Actually, I might have oversold that. It’s just a story. When I started the Robuilt channel, I didn’t tell anybody. I was scared. I was like, “I’m stupid. I’m going to look stupid. This first video is really bad and I’m not going to tell anybody.” So I posted my first two videos because they were bad. They were bad. I knew that. I was very self-aware of it, but I was still proud that I’d put myself out there.

Rob:
Then on my third video, I went to the Reddit DIY subreddit and I posted it and I said, “Hey, I started this channel. It’s about DIY. Here you go. I hope you guys like it.” It got voted to the front page. It got 3,000 up votes. Then my first video, it got 15,000 views in a day.

Rob:
I was like, “Oh, my gosh!” I was like, “Maybe, maybe I’m onto something,” and I was like, “You know what? I am going to tell the world. I don’t care what the consequences are. I don’t care if people laugh at me,” and I posted it and I made a big, long post, changed my Instagram handle from Robasolo to Robuilt. This was a big deal because Robasolo was my handle for 10 years.

Rob:
I said, “Hey, guys. As of today, I started a YouTube channel. It’s called Robuilt. I’m going to teach you how to do DIY in weird quirky ways and I hope you follow me.” I was like, “Oh,” and it turns out that everyone was incredibly supportive. Everybody sent me text. They commented. That to me was the big game-changing day in my life was I put myself out there and so many people accepted it. It’s like we are our worst critic. I was in my head about it, but I’m so glad I did.

Brandon:
Well, me on the other hand, my first stuff was just flawless. I mean, it was pretty much perfect if you go back. If you actually look at my very first videos, if you go back to, yeah, go to BiggerPockets YouTube channel, and then go in reverse order chronologically, you get through a bunch of really funny old Josh ones, which are him talking to animals and stuff. It’s great. Then you’ll get to my older videos. I’m not going to lie. They’re amazing. You’ll love them. I have my cat. Of course. I think I talked like this. I’m like, “Hi. I’m Brandon and this is how you do a HELOC,” and I had a cat on my lap. I was stroking this cat, and it’s beautiful thing. You guys will love it. Check it out.

David:
Those videos, I always thought when I see those, they look like a stock image of a Pacific Northwest youth pastor. You were-

Brandon:
I was a Pacific Northwest-

David:
I know, man.

Rob:
Oddly specific.

David:
Yeah, and you can tell from looking at it. That’s exactly what you’re getting. You had those glasses, your beard was a lot shorter, your hair was a lot of color.

Brandon:
I had a flannel shirt on. That’s all I wore was a flannel then.

David:
Yes, super flannel. Yeah. So here’s the thing.

Brandon:
You become like the area you live. You guys notice that, right? You just become like the people in the area you live.

David:
Ben Hardy wrote a book on that. What was the book he wrote about your environment having a much bigger impact on you?

Brandon:
Yeah, Personality Isn’t Permanent. That one?

David:
I’ll look it up and see. It was a very good book where it’s basically we give ourselves way more credit for how we turned out than really it’s the environment that you get put in, and I’m a huge, huge proponent for that. You guys became very good content creators because you were making content all the time and you go look at your video and you cringe and you go, “Ugh, what was that?” and I don’t do that anymore or, “Ooh, that part looked good.” As being in that space over and over that you have developed into now, Brandon, you’re much more handsome, you’re very good with the video quality that you’re putting out.

Brandon:
Thank you.

David:
Tell me, honestly, if you start catching yourself getting out of shape, when you’re on video more often, is that an inherent like, “Ooh, I don’t like how that looks. I want to do something about it”?

Brandon:
Well, I try to keep my shirt on for most of my online videos, but yes, it is a thing. When I do take my shirt off on videos especially, I’m like, “Wow.”

David:
Yeah. So it’s your-

Brandon:
I did a video-

Rob:
I’m looking at my videos. It inspired me to get into shape.

Brandon:
Yeah. Thanks. I did a podcast a few months ago and I don’t remember how it came up, but somehow the idea of taking off my shirt came up. So I took off my shirt in the middle of a podcast. I don’t remember whose podcast that was, but that was the first.

David:
Do it. Do it.

Brandon:
No, I’m not doing it today. No. I just got off a three-month long, I was on the road for 92 days on a road trip. In which case, I did not work out one time in 92 days and I ate crap for 92 days. So I’m not going to be taking my shirt off right now.

David:
Okay, but here’s what I would say, Brandon. Probably the fact that you’re not making content like you used to might have played a role in why that happened.

Brandon:
You know what? You’re probably right.

David:
Right? So that’s what I mean by the environment does have a big influence on how we turn out. If you put yourself in this environment of I’m telling people I want to buy real estate or I want to raise money so I’m going to talk about it, they’re going to ask you questions that you’re not going to answer, and it’s going to create a hunger in you where you’re then going to say, “All right. I need to go get these answers.” It’s going to help you by putting yourself out there. That’s really the part I wanted to highlight is you can’t wait to get ready, and when you think you’re polished, you’re going to be like, “All right. I’m going to go make videos on social media.” You got to start talking about it and then letting that lead you down the road.

Brandon:
Well, and could I emphasize also? There are numerous ways in which a person could build an online brand like video and TikTok and Instagram. Video, that’s one of the most powerful ways and that’s very common today, but it’s not the only way. I mean, there are people out there who just are not going to ever be good on camera. I mean, maybe that’s a limiting belief, but if your thing, if you’re an amazing writer, you just love writing, okay. So find a way to make it writing that that’s your thing or some people are amazing at LinkedIn, and they’re just really good at LinkedIn. I’m terrible at LinkedIn. I don’t understand it, but Brian Murray has, I don’t know, 40. He’s my partner at Open Door Capital. He wrote the Multifamily Millionaire with me. He’s got 40 or 50,000 followers on LinkedIn. I don’t even know you can follow people on LinkedIn. I didn’t even know that was a thing, but Brian’s really good at that, and he never does a video. You’ll never see a video with Brian ever, but he’s got a ton of followers and he raises a lot of money for Open Door Capital via LinkedIn.

Brandon:
I happen to like YouTube, right? Some people like TikTok. You could do TikTok without your face. You could just do text on the screen like the little lady on TikTok reads, right? There’s so many. You could start a blog. You could do a forum. You could just be involved on the BiggerPockets forums. We haven’t touched on that yet, but that’s probably one of the most important things you can do, especially as a new investor.

Brandon:
A lot of you who are listening that are new are thinking, “Well, how does this apply to me? I’m not going to go create content. I don’t even know what I’m talking about.” So that’s when you just get involved asking questions on the Facebook group or the forums, and you just start that magic networking thing, which is really just making friends with people.

Rob:
We had that guy on recently, Jonathan Greene. He’s a big contributor to the BiggerPockets forums. He’s a legend in there because he is in there every day answering questions and he sets aside time every single week to Zoom with people and just help people. I’m like, “That’s a very cool creative way to network with people that you otherwise wouldn’t have met.”

David:
So I want to get into the different ways that you make content on different platforms, but I’m sure regardless of what platform you’re operating in, there are certain key components to the message that you’re really trying to nail down. Can you share with us, Brandon, what are some things that every content creator needs to make sure that they’re including in the message and how they could go about doing that so someone has a bit of a blueprint if they want to start making online content?

Brandon:
Sure, man. Yeah. So the first thing I’ll say, I actually have a framework for this. I’ll tell you in just a second, but first, I’ll say this is one of the mistakes people make when they’re creating content in our space, in a real estate or a business setting, is they forget that this is not Kylie Jenner showing off her makeup. This is not about us. In the fashion world, you can just post picture yourself smiling and people like that. What we have to think in the business world is how does this help the person who’s watching this. Every post should be considered. How does this help the person watching this? Whether or not it’s you write a blog, I mean, a post on Facebook or you did a video or whatever, how does this help that person who’s watching this and help a lot of people watching this. So starting with that, I think, is key.

Brandon:
Then let me lay out this little framework here. All right. I want to make sure I got it right so I wrote it in here somewhere. All right. There it is. I’m calling it today the viral formula, even though it’s probably a terribly generic name, but it’s the idea of I watch-

Rob:
Oh, yeah, the VF.

Brandon:
Okay. Yeah, the VF, the viral formula. Trademark that right now. Actually, Rob, I would say Rob’s got even more experience, especially on the YouTube front than I do on this. I’m much more of an Instagram guy, not that you are not both on Instagram as well, but I see this especially in YouTube videos that do really well and I see this on TikTok and reels and Instagram videos that do well. I see it on blog posts that do well.

Brandon:
Here’s what I wrote down. So if you’re listening to this, take some notes real quick. This is number one. First thing your content piece should have is what’s called the hook because our minds go so quick, we scroll so fast. You do it too on Facebook, Instagram, whatever. Everything’s so fast. You have to grab away to hook them real quick and pull them in. So the hook could be something, whether it’s a physical thing like the camera does some kind of movement or it could be you’re doing some kind of thing like you’re putting your hands in the air or you’re pointing at the camera or you’re doing something funny or maybe it’s a clip from later in the video if it’s a video, where it pulls a funny outtake from later on, just something that in three seconds or less hooks them.

Brandon:
On TikTok, for example, it might just be a message. It might be like, “In this video, I’m going to say three things that are going to make you a multimillionaire guaranteed.” I just said that in what, less than three, four, five seconds?

Rob:
Three seconds.

Brandon:
Well, now, I might have hooked somebody in just enough to watch the rest of the video. So as stupid as it is, we have to do it. The only videos that you’re seeing typically have some kind of hook. A blog post, typically the only blog post gets seen. If you’re not interested in the first sentence, you’re not going to read on. In fact, I heard a famous author. I can’t remember if it was Steven Pressfield or Steven King or somebody once said, “The purpose of the first line of your book is to get somebody to read the second line, and the purpose of the second line is to get them to read the third line, and so on and so forth.” So you’ve got to hook them in.

Brandon:
All right. So number one is the hook. Number two is what I call the tease. Now, this might be connected to the hook. It might not be. So the tease is basically, “This is what I promise you’re going to get in this video.” So if you had a hook that’s a little different, maybe your hook is, “How would you like to be a multi-millionaire in 30 days or less?” that might be a hook. Then the teases would be, “In this video or in this blog post or in this, whatever, I’m going to share this with you,” and that’s just one example, right? There’s a million ways to do the tease, but you want to let people know what they’re going to get when the video is over. Again, it’s really, really quick.

Brandon:
The thing I always add in there is some kind of credibility. Now, if this is on a platform like Facebook where everyone’s following you on Facebook anyway, they already know who you are, your followers, it’s not as big of a deal. If you’re trying to reach people on Instagram reels, which is brand new cold traffic, you don’t know who they are or TikTok or YouTube, you got to establish some piece of credibility so they know that you’re legit.

Brandon:
So something along the lines of like, “I’m Brandon with Open Door Capital. We’ve raised $100 million in the past three years to buy real estate. This is why I’m qualified to speak on this topic.” That’s what you’re saying is, “This is why I’m qualified to speak on this topic.” Like, “Hey, I’m a CPA that works for investors. Hey,” whatever. So we got hook, you got tease, you got cred, and then the fourth thing is gold. You’ve got to give them something that they can take away from that piece of content.

Brandon:
The biggest mistake I see people making in the content space is they give way too much gold or what they think is gold. They just go on and on and on and on. In reality, is it simple? Is it easy to grasp? Easy to remember? Is it unique? Is it actionable? So you got the hook, tease, cred, gold, and then finally, a call to action of some sort. If you’re trying to build up your following, “Hey, don’t forget to like and subscribe.”

Brandon:
If you’re trying to, whatever, you’re trying to get people on your email list, “Hey, join my email list by going to this URL. Go to beardybrandon.com and get on my text letter,” right? Those kind of things, quick call to action. Otherwise, people just won’t. It’s not like they don’t like you, it just never occurs to them, “Oh, I should follow that person,” or “I should subscribe to their list.” So tell them what you want them to do real quickly.

Brandon:
One little trick is sometimes I will put the call to action earlier in the piece of content by just saying something like, “Hey, as I go through these five points, if you like this, just hit that heart button real quick. It just helps me out. Thanks,” number one, and that way, if they don’t watch the whole video, they might just hit the heart button right there. They didn’t even watch it, but they’ll still click the like or the heart.

Brandon:
All right. So I want to know first, based on that, I’m going to review it one time and then I want to know, Rob, your thoughts on this because you’re the genius on this. So I came up with hook, tease, cred, gold, and a call to action. I don’t have a good, what’s the word? I don’t have an acronym for that.

Rob:
Acronym?

Brandon:
Yeah. We need an acronym. So I need a thesaurus. This is the homework for everybody listening right now, by the way. Hook, tease, cred, gold, and call to action. Somebody put that into an acronym somehow. Use a thesaurus and we’re going to have a word for that and then that’s going to be trademarked for BiggerPockets. All right. Rob.

Rob:
Well, first of all, let me give you the advertising corporate version of this, what we used. We used an acronym called CHUBS, and it was-

Brandon:
You have an acronym. Oh, look at the acronym man over there.

Rob:
No, but yours is way cooler because ours meant crop. So if we were making a commercial, okay, basically, if we were making a commercial for let’s say Hyundai, we’d want to make sure that it could actually crop to be square and fit the format of your phone. Then it was hook, which is exactly what you’re talking about. How can we edit the front end of a commercial to get straight into it, and then usage, which is how much of that commercial do we actually need to communicate to people on social in 15 seconds or less, branding at the end, meaning we’d want to get the logo out there to make sure that people knew who this commercial was about, and then sound off, meaning people who have their volume off, which is 90% of people, how can we make this work for people, meaning that’s putting the subtitles on there. So that is a way less cool. It’s a cool name.

Brandon:
It’s a cool acronym, CHUBS.

Brandon:
Yeah, but way less cool than the actual bullet points that you put up there. I think you nailed it, man. I mean, it depends on the actual platform that you’re going for, but if we’re talking TikTok, I did a lot of TikToks and I failed and then one guy reached out to me and was like, “Man, we got to blow you up,” and he had 300,000 followers and I was like, “All right. Teach me, master.” So he basically gave me a quick one hour consultation, and literally, the next video went viral. The biggest piece of advice he gave me was you got three seconds. Stop saying, “Hey, guys. It’s Rob. Don’t forget to follow,” and say, “Hey, here’s why you’re going to fail at starting an Airbnb.” Boom. Hook them, and then that’s all my format now.

Brandon:
Whereas on YouTube, yeah, you know what? I could probably grow faster on YouTube if I followed exactly what you’re talking about, but I tend to do funnier intros that hook people in that way, but I’m an acquired taste, admittedly. So it doesn’t always work.

Brandon:
YouTube’s a little bit longer form, right?

Rob:
It is.

Brandon:
So YouTube, you’re allowed to … This is one of those I think of know the rules than break the rules kind of thing. Once you understand the logic, the psychology behind what makes things popular and go viral, then you can start playing with it and trying different things and get quirky and get your own take on it. So yeah, I love your videos. In fact, it’s one of the videos I looked at when I was coming up with this formula is like, “What does Rob do?”

Rob:
Wow. Thanks.

Brandon:
“What makes it successful?” I think you do this masterfully. David, you do, too. In fact, David’s skill on social media has gone through the roof in the past few months. I don’t know what you’ve been doing.

Rob:
Oh, yeah. He’s stepping it up.

Brandon:
He is stepping it up. If you guys are following David Greene-

David:
I hired a company to make my cards out for me.

Rob:
There you go.

Brandon:
Because you, sir, are an architect mentality. You’re a level four, man.

Rob:
That’s right. Yeah. That’s the hard part.

Brandon:
What would Elon Musk do? There you go.

Rob:
I mean, it’s really hard because of the, I don’t know, it’s hard for me to turn it over to a diff … I have one editor and him and I are just going back and forth all day and we are to the point where I need probably three or four if I really want to go Brandon style with Instagram reels and TikToks and everything, but it’s hard because I just know that I can’t manage the creative the same way that I can with one video a week on YouTube, but yeah, it’s the struggle with, “Do I want to just slowly grow or do I want to try to amp it up a little bit? I think slow and steady for me has been the game.

Brandon:
Well, I’ll throw out another thing. I did not invent this thing, Gary Vaynerchuck is, I think, the guy who really blew this concept up. There’s probably a name for it. I don’t have a name for it, but I’ll explain the strategy. Again, Gary was on our podcast back, I don’t remember what episode, a few years ago, but the idea is this. You do one, and this is literally what I do. I spend maybe an hour a week total on all content creation. I do one long form piece of content. Usually, it’s a podcast, whether I’m on somebody else’s show or when I was doing BiggerPockets, one piece of content.

Brandon:
I always record my video separately just so I have one. If you don’t have a fancy camera, that’s okay. Phone actually probably does just as well, if not better, on most platforms. So record yourself doing something like an interview for an hour, and then I just hand it over to my virtual assistant who is awesome. He’s over in the Philippines, and he just takes it and dices it up into a bunch of different content. He makes YouTube videos. He makes Instagram. He makes TikTok. He makes reels. He makes everything, even pulls out paragraph that I said in that content and makes a physical post, a text post, all that from one hour.

Brandon:
Then every day, I just have three pieces of content coming out and I don’t do any of it. I just got that straight from Gary Vaynerchuck. It’s one long form content can be put into about 30 different pieces of content.

Brandon:
So anyway, just throwing it out there for anybody who’s like, “I don’t have time to make all this content.” Just see if you can’t get booked on a podcast once a week, even once a month. You don’t need to put out as much content that I put out. I’m not trying to grow a big operation.

David:
I mean, back to being on a podcast itself, here’s something a lot of people don’t realize. I’m going to let the cat out of the bag in our world. Saying you have a podcast is a lot like saying, “I wrote a book.” It’s not hard anymore to write a book. You can self-publish a book insanely easy, sell three copies, and it will be a bestseller in that category. Brandon, I know you have some really funny stories about how easy it is to make it look like on Amazon that you’re a bestseller.

Brandon:
Yeah, that foot thing?

David:
Podcasts work the same way. It’s not nearly as difficult to get one on. It’s very difficult to make one good. So first off, a lot of the podcasts you’re listening to, don’t assume that the person that you’re hearing it from has a lot of credibility. They might have 12 listeners and half of it is their family, but no one knows that. So getting on someone else’s podcast and then putting that on your Facebook or on your Instagram and sharing with the world, “I was interviewed to tell how I do this thing really well,” will give your brand, for lack of a better word, some credibility, right?

David:
It also invites people to get to know you. They get to hear your story. They get to hear you talk. They get to see what makes you tick, which creates that connection that you’re describing. So I think going on other people’s podcasts, even though you’re not going to maybe get heard by a ton of people because most podcasts don’t have a ton of listeners. It’s something that you do for your own circle to get an opportunity to hear you speaking. Then like you said, you can take clips out of that and you can run with that for months. You just take clips of some of the best stuff you said and you create reels and you put those out there. What do you think about that?

Brandon:
Yeah. That’s exactly it. I think that’s exactly what you should be doing. It’s easy to be interviewed. I mean, it’s easier to be interviewed than it is I think to try to just come up with a script and write-

David:
Produce it.

Brandon:
… produce a 10-minute video. It’s like you sit on Zoom and you record a video. Most people are pretty good at answering questions about themselves and about their own life, right? This is super easy for me. It’s easier for me to be a guest on the show than it was when I was a host, right? Way easy. I just sit here and answer your guys’ questions and then take over the show and allow David to talk once in a while.

David:
What’s that? Let me talk once in a while? You said that.

Brandon:
Yeah, I do. Yeah.

David:
I think simply Googling real estate podcast, you’ll get a huge list or search on iTunes for those and just start emailing the people that have them and saying, “Hey, I own three duplexes in this area. Can I come be a guest on your show?” It doesn’t have to be huge, and the majority of them will be like, “Absolutely. I’d love to have you on. I have been having trouble making shows because nobody knows who I am and wants to do my show,” and bam. You’ve got some, and you’re also getting some experience speaking and articulating yourself and communicating, and it puts you in the environment that we’ve been describing about.

Brandon:
That’s such a good point. I’ll let another cat out of the bag here is that energy on a podcast matters almost as much, if not more than what you say.

David:
Content?

Brandon:
What I mean by that is, yeah, the actual quality of your content. I’m not saying we on the BiggerPockets podcast we want people who don’t have good content. We do, but you can’t have good content without good energy. We have canned shows before because people have not had a good enough energy. So by going on smaller shows, you develop the skillset needed to get on the bigger shows where you can bring the energy.

Brandon:
I don’t naturally talk like this in real life. When David and I are having a conversation, if we were to record ourselves just talking without any cameras, we’d be like this. We’d be like, “Yeah. I mean, I don’t know. I mean, it’s okay. Yeah. I think I’m going to go to the gym later. You want to go later? Okay.” That’s how we talk like normal people, but you develop the skill of this. I’m talking, my hands are moving, I’m excited. So you gain that skill by going on smaller podcasts.

Brandon:
Now, let me throw the question to you guys. What about those people listening right now who have no deals? They’ve not done any real estate. What are they going to go on a pod? They can’t go on a podcast. So what do those people do? Any suggestions for them, Rob?

Rob:
That’s a hard one. I guess-

Brandon:
That’s why I gave it to you.

Rob:
Yeah, I was going to say. I mean, I think I would rather, oh, man, I guess I would rather put them more in the content creation and learn what it takes to get your first deal and document that journey and create content around, “Hey, I’m looking to get my first 10 steps,” or sorry, “I’m looking to get my first property. Here are the first 10 steps that I’m going to take to do that,” because you can actually document a journey. Whereas on a podcast, typically, you’re speaking retroactively about experiences that might have happened, but the thing is, as David mentioned, I mean, there’s million podcasts out there. So it’s not like you have to get into a podcast right here, right now. I think you can wait for that, right?

Rob:
What I think what you can do that’s actionable is use your phone to just make content. A lot of people get really caught up on photo quality and they’re like, “Rob, your videos are so crisp and this.” I’m like, “Dude, my first viral video was shot on an iPhone.” My editor always says that his teacher used to tell him that the best camera on the market is the one that you have in your pocket. Yeah, exactly.

Rob:
So I think, for me, just to be straight up, on TikTok, my really terrible quality selfie videos on my iPhone perform significantly better than anything that’s super crispy. That’s why I actually don’t do a lot of TikTok. I have a huge following on there, but I post a TikTok once a month because it takes me two hours to record and edit it, but that’s all part of the process.

Rob:
So I think if you’re getting into real estate, document your journey and try to create a business plan for where you want to go and just make that into snackable content for people to watch. I really think it’s that easy.

Brandon:
Yeah. I love that answer. I think what my thought went to is not every platform is ideal for every person. If you’re brand new, yeah, you shouldn’t be interviewed on podcasts about your journey. You should probably be doing something else, like you just said. Maybe on TikTok you make like, “I’m about to buy my very first duplex. Follow along. Follow my process. Today, I’m going to do this,” right? People would eat that up. They would love that or they might not and you at least gained some experience in doing it, and that’s cool, too.

Rob:
Dude, that’s what I did on YouTube. I mean, I was at the very beginning of my real estate journey. I wasn’t an expert. I was very green and, literally, my content was like, “Hey, guys. I just built this. Here’s what happened. Here’s what went wrong. I’m going to do it again. Watch my journey.” If you just watch my YouTube channel over the last two years, it’s really just a progression of how I’ve leveled up little by little by little. If you just look at my video today versus two years ago, it’s a whole different person, but it’s not because, I mean, it’s just because I’ve just been doing it and documenting it. That’s all it really is.

Brandon:
Well, let me throw one more strategy at people who are maybe brand new and they’re like, “Well, I can’t create content. I’m brand new. I don’t want to do TikTok,” right? Here’s a very simple strategy. Go find 15, 20, 25, 30, 50, 100 people in the real estate investing industry like the three of us, right? Follow us on Instagram or whatever platform you like the best. Go unfollow everybody else that you follow unless it’s your mom or something, right?

Brandon:
So Russell Brunson, who’s the CEO of a big marketing company, he says, “You should be a creator of content, not a consumer of content.” I’m not telling you to go sit on TikTok and swipe. You should not be doing that. You should be going out and buying real estate deals. However, if you’re going to go on TikTok to swipe or if you’re going to go on Instagram to swipe or you’re going to go read a bunch of blogs, they should be on people that you want to get to know better and you want to build a relationship with because they’re going to be a big part of your life in the future.

Brandon:
So here’s what you do. You go find those 10, 50, 100 people. You follow all of them and turn on post notifications so that you get a text, not a text, but you get a popup on your phone, “Hey, Brandon just posted. Hey, David just posted.” Now, why is that important? Because you go and leave a comment right away, and not just a, “Hey, good job,” or a thumbs up or an emoji, but you leave a thoughtful comment about that whatever they said.

Brandon:
Now, there’s a few people who do this to me. I know they’ve read the same books I have because they do this to me. Every single time I post anything on my Instagram, I get these really paragraph-long comments that are really helpful for people. Guess what? Other people see them commenting and go and follow them. So they’re building this big platform by just doing that to other people, and they’re just providing value in the comments section.

Brandon:
Funny, actually, one of the couples that do that all the time, they’re on the cover of the BP, BiggerPockets Wealth magazine. So it clearly works for them, right? They’ve built a whole brand around it, around just commenting on other people’s stuff. So that’s something that if you’re brand new, anybody can do that right now is just go follow, turn on notifications, and just comment right away with a really thoughtful comment, and you will start gaining people that are following you just because of the help that you’re providing there.

David:
Brandon, what are your thoughts on the idea that we tend to see the end result of a ton of work when someone else posts on social media? So I’m noticing there’s this trend of realtors that are saying, “Just help my clients buy this house,” or investors, “Just picked up this duplex. It’s a lot of hard work, but I got it.” They’re showing you the closing, but you’re not seeing the 17 properties they analyzed and didn’t get or the offers that were written or the process to get to that point. I think it creates the impression that you’re just wandering through life in the real estate investing world. You step on something, it turns into a duplex. You’re like, “Oh, there, I got a house,” and people are waiting for their moment when it’s going to hit them versus being intentional about putting these stages because that’s not shown on social media nearly as much. You don’t see the process behind it.

David:
So I know you’re a person that likes to focus on build a machine, don’t chase an event, right? The same with maybe a workout picture. You see the end result when somebody’s been training for this competition like Tony Robinson. He posted some pictures at the event, but he didn’t post himself at the gym working out every day. What advice can you give for the reality of what it takes to be successful here being different than what you’re seeing on social media.

Brandon:
Yeah. Yeah. Really good stuff. Yeah. What you said there is build a machine, not an event, right? In other words, what I mean by that is so many people, this is how they think of … I mean, this could be buying a real estate deal, right? The event is I’m going to go buy a real estate deal or I’m going to go drive for dollars today. Let’s go there. I’m going to get my car. I’m going to drive around for the next two hours. I’m going to write down every single property that looks vacant, and I’m going to write down their address. I’m going to come home and I’m going to look up who owns the property. I’m going to send them a letter, and by the time 5:00 hits tonight, I’m going to have at least 20 letters out in the mail. That’s great, right? That’s a great strategy for getting a deal. I almost guarantee you none of those 20 people are going to call you.

Brandon:
So what you’re going to do is you’re going to be like, “Well, I did it, it didn’t work.” I mean, you’re going to give up. The truth is if you want something to work, don’t do the event, don’t do the one day I went out and drive for dollars or one day I made a video on YouTube. Ask yourself, “How do I do this every single solitary day or three times a week? How do I build this into a repeatable machine that over the next six months, 12 months is going to produce the result because it would be ridiculous statistically not to produce the result?”

Brandon:
So an example would be I’m going to do a drive for dollars every Monday, Wednesday, and Friday from 3:00 to 5:00. I’m going to hire a VA who’s going to take all that and they’re going to send the letters for me that I generate. So all I have to do is get in my car and drive or I’m going to hire a high school kid to drive every Monday, Wednesday, and Friday. They’re going to upload it to this site. The VA’s going to take it from there. They’re going to send the letters out. From there, it goes to the people. Now, all I have to do is answer my phone.

Brandon:
You can go even bigger than that. I’m not going to answer the phone. I’m going to hire a call service. One of my buddies runs I think it’s called Call Magic Leads. They do outbound calls. So they find the phone number, then they call all the sellers or the homeowners and they ask them if they want to sell their property. So now, only the really important leads are coming to you, but then you go and build a machine that hires a salesperson for your team that answers those phone calls.

Brandon:
Do you notice how at every level you can build a machine bigger and bigger and getting you out of the work? Now, if you had somebody driving for dollars three times a week, you had somebody sending all those people letters, you had somebody answering the phone that was good at sales and talking to people and trying to convince them to sell the house, if you did that for the next 12 months straight and never missed a week, are you going to land a deal? Is there any chance you wouldn’t land a deal? No, but that’s not what people do. People want the event, people want to do it one time and they give up.

Brandon:
So what I’m saying is focus on the machine, don’t focus on the event because the machine is what gets you the success. The reason we were able to buy, and I think we’re at $400 million almost in real estate in the past three years with Open Door Capital, the only reason we’ve been able to do that is because we just built a machine and we make 75 offers a quarter on massive deals. We have a machine around that. We have a machine around investor relations growing our email list. We have a machine around all of that stuff and it just gets done.

Brandon:
If you’re anything like me, you’re not good at getting things done sometimes, I’m terrible at getting things done, so I just hire other people to run the machine for me and then it actually gets done. So that’s a much longer conversation, but there you go.

David:
There’s a lot of wisdom in what you’re saying, and I’m trying to think of the best way to address this without giving the wrong impression.

Brandon:
I hope it’s an analogy.

David:
I’m sure one of them will be, yeah, but which one? It just popped in my head right now as you said it. In this world of education, we have to give people value that they could not … We can’t just say, “Go out and do something,” even though that’s the best advice to give anybody, “Just go start doing it. You will find your way,” but they’re not listening to us to be told, “Just go do it.” They want something they wouldn’t have known from an experienced person.

David:
So what we end up doing is saying, “Here’s the end result and here’s the steps you’re going to take and walk you back to where you are.” So you have some idea of a path. That’s what people are looking for.

David:
The problem with that approach is your brain doesn’t work well when you’re trying to learn things you haven’t done yet. We could say, “Hey, here’s what you’re going to do when you get to this step.” It just doesn’t sync in, right? I notice, here’s the analogy, that this will come up with something like jujitsu. I will want to sit there and talk to a person who’s a higher belt and say, “What do you do when this happens or how would you get out of that?” I’m receiving it when I’m in a certain state of mind, but then when I get out there on the mat, I don’t remember anything that was said. It actually isn’t practical information when I’m in the middle of rolling.

David:
The way I learn is actually the opposite. I get out there and roll. A thing happens that I can’t fix and I’m hungry for the information. I come back and say, “How do you get out of this thing?” and then they tell me and I’m like, “Boom. I got it. I will never forget that. I don’t want to experience that feeling again. Now, I’ve learned.”

David:
That’s what I’m trying to highlight is this is why we say you have to get out there and you have to take action because your brain remembers the lessons and they become a part of you when there was some form of pain that was associated with getting out there and doing it, not just sitting here and hearing the story laid out for you of perfectly how this should work.

David:
You said something. If you did this for a year, could you possibly fail? No. You would have to get a property. One of the things I’ve noticed is if someone’s like, “Well, I’m not sure. Should you do this bench press or this style? Should you do that one or this?” No. If you work out as hard as you can every single time you go to the gym and you have decent form, is it possible to not get stronger?

Brandon:
Yeah. It’s guaranteed.

David:
Impossible. That’s it. If you just go to the gym and you say, “Hey, I’ve got some basic exercises. I’m going to do as hard as I can for as long as I can and then I’m done,” you have to get stronger. Go ahead.

Brandon:
This is where that phrase comes in that I say all the time now. It’s like success should never be a surprise. In fact, my best performing Instagram post of all time was me just talking about this. Success should never be a surprise. Nobody ever wakes up and they go, “Whoa! Where did I get this six pack from? What? Where did this come from?” Nobody wakes up and goes, “Whoa! I’m a millionaire. Crazy. I had no idea.”

Brandon:
Success is just the natural result of the process in which you do. Yeah, once in a while people win the lottery, but they end up losing it because they don’t have the right process. So success is not a surprise to anybody who’s successful. In fact, it’s surprising when you don’t get it. If you had somebody driving for dollars three times a week, mailing all those things, had a sales guy answering the phone, meeting with people and you didn’t land a deal after a year, I would be surprised. I’d be like, “Wow, something went wrong in that system. Obviously, the machine just was broken, but I’m surprised because I feel like it should have worked.”

Brandon:
I would usually the reason those machines don’t work is because you invented the machine yourself. You didn’t learn from somebody else. I mean, we’re lucky right now. We’re in an industry that millions and millions of people do and share freely what they’re doing and have done so for hundreds of years. We’re in the easiest industry in the world to learn how to do stuff, and then we’re in the greatest market we’ve ever seen for that. We are in the YouTube and the blogs and the content, the courses that are out there, the mentor, everything is just there. You have no excuse. So if you’re like, “Well, I don’t know what to do,” I don’t know. That’s a problem.

David:
Well, that’s the value of a machine, though. If you work at the thing, it’s going to happen. I love what you said. It’s impossible to not happen if you’re taking these steps. So I love that advice is what the people that are good at something do is they focus on the machine, not the end result. They don’t wait for just the property.

Brandon:
You want to real example of this, actually? So by the way, I can teach this stuff and I sound like I know what I’m talking about, but I screw up this stuff all the time. I’ll focus on the event and not on the process. I’ll give you a real example. I’m driving with my wife and my kids on our road trip. We just did three months around the country and we’re on the road, and I’m talking to my wife about how we just landed this massive apartment complex deal in Texas. We’re going to have to raise more money than we’ve ever raised before. It’s like, I don’t know, 50 or $60 million I got to raise.

Brandon:
I’m like, “Shoot, Heather. I don’t know. I don’t have a big enough email list to be able to raise that much money that quickly. That’s just so much to raise.” I was like, “So I guess I could go on a podcast, maybe talk about it.”

Brandon:
She goes, “Well, what’s that going to get you?”

Brandon:
I was like, “I don’t know.”

Brandon:
This is what Heather said to me. She didn’t talk to me. She’s like, “Brandon, it’s not about going on a podcast. It’s not about making a post.” She’s like, “Why don’t you go on two podcasts every single week for the next six months straight? Would that get you what you need?”

Brandon:
I was like, “Yes, they probably will or at least they’ll get me closer. It’ll get the word out there.”

Brandon:
Again, I need to be reminded of that. It’s not about the one off. It’s not about doing the thing. It’s about what machine can I build. So then I called my assistant, Matt. I’m like, “Matt, I want to go on two podcasts every single week for the next six months.”

Brandon:
He’s like, “Okay. I’ll make it happen.”

Brandon:
All of a sudden, now I’m scheduled on all these podcasts scheduled out for the … and I’m getting the word out there. I’m like, “This is how it’s supposed to work because now I have a machine to be able to raise that money.” So that’s just one example, but there’s so many ways in life that if we just turn things into a system, into a machine, it actually will get done.

Rob:
Yeah. You can also, outside of podcast, you can also make appearances on certain YouTube channels and all that kind of stuff, too. You know what I mean?

Brandon:
Yeah, but I don’t know anybody who has a good YouTube channel.

Rob:
That’s true. I know. We’re always looking. We’re always looking.

Brandon:
Rob, we should do some JV stuff together, man. Yeah.

Rob:
Let’s do it, man.

David:
I was telling the agents on my team. They had a client that they worked with for over a year and they finally put him in contract on a two and a half million dollar property. We were talking about, “Well, what was that like?” He was describing how it was very difficult at first because the guy was calling every single day to ask a bunch of questions and he wasn’t in a position to buy anything.

David:
I remember the advice I gave them was, “You got to stay in touch with the person, but you can’t let them monopolize your entire schedule if they’re not ready, in our world, be ready to sell, in that world, be ready to buy a property.”

David:
So they worked it out to where they just consistently stayed in touch over email and text messaging until he got to a point that he was more serious. I was telling him, “Every person you work with is eventually going to buy a house once they’ve been qualified.” It’s like turning the little thing on the Jack in the box, right? If you turn it long enough, it’s going to pop. The key is setting up a system that your arm doesn’t get tired before the Jack of the box pops, right? It has to be effective turns. You want to be able to use your energy wisely.

David:
You saying, “For the next six months I’m going to do two podcasts,” you don’t have to pick the perfect podcast at that point. You don’t have a lot of stress about, “Oh, what if I make a mistake?” You got a lot of opportunity over this period of time. You’re not going to get discouraged. You’re going to keep turning that crank, and then eventually it pops.

David:
That’s what the advice I’d love to people to leave with is when you’re making content on social media, you want to raise money to help buy your next deal, you want people to be bringing you leads, whatever it is, the first content you make is going to suck, and who cares? Because I would love it if people go back and look at Brandon and Rob’s original stuff and be like, “Oh, Brandon doesn’t sound nearly as polished and tanned and handsome as he is now as when he was first recording.”

Brandon:
That’s true.

David:
I mean, you’re a bit of a goober. I mean, when I first met you, you weren’t even as polished as where you are right now. You come very far. That is very encouraging to everybody who’s thinking about, “Ah, but I’m not going to be good at it.” You’re not good when you first go to the gym, you’re not good when you first do anything at all. It’s the machine that you build. It’s the commitment to the process. It is impossible not to get better if you keep doing it.

Brandon:
Can I add two more quick points to this that I think are valuable, especially for newer investors this first one? So I’ve been teaching on BiggerPockets webinars now for seven years in a row, right? David, you’ve been teaching a lot. Rob, are you doing webinars yet for BP?

Rob:
Yeah, yeah. I just did one last week.

Brandon:
Okay. All right. Good. So you guys know what I’m talking about. If anybody listening has been on a webinar before, you’ve probably heard the term LAPS, L-A-P-S. This is some acronym I put on a webinar years and years ago and I beat it like a drum, dead horse. I don’t know what the phrase is there, but I say it over and over and over and over and over. Every time I get a speech, anytime I talk to new investors, I say it over and over and over. It’s exactly what we’re talking about today.

Brandon:
LAPS stands for you’ve got to get leads coming in your business, you’ve got to analyze those properties, you’ve got to pursue them, which means go after them, make an offer, and then once in a while, that will result in a success.

Brandon:
Now, why do I beat this drum so hard so often? It’s because that’s the machine. If you want to land real estate deals in any market, competitive or not, if you get leads coming across your desk, you analyze them, and you make offers, you will land success. It’s not a surprise.

Brandon:
So that’s why I said earlier my team makes 75 offers a quarter. That was just a number we worked backwards to figure out. We get about one in 10 offers accepted. So if we make 75 offers a quarter, we’ll get roughly seven to 10 offers a quarter accepted on mobile home parks or apartments. It exactly worked out that way. That’s how we’ve bought so many properties.

Brandon:
So I don’t care if you’re trying to buy your very first single family house or a duplex or a flip or a wholesale deal or an apartment complex. Doesn’t matter. The LAPS system works. Everybody uses it, but the people who are the best in this industry, they know the system and they’re always working to improve it.

Brandon:
So it takes all the mystery around, “How do I find a deal? I can’t find a deal.” It’s just LAP and then you get S. So that’s the encouragement I have for you, for everyone listening, is take the mystery out of it, build the machine, and let the machine work.

Brandon:
Now, the related point I want to make as well is I am the laziest person. I’m not good at self-control. I’m lazy and I have terrible work ethic. I’ll admit all those things. I’m not good. If I say I’m going to go to the gym, David, when’s the last time I went to the gym? I don’t go to the gym unless David shows up in Maui. Yeah. When’s the last time I went to the gym? It was with you. Every time I go to the gym-

David:
I have to pull every string I can to get you in there.

Brandon:
Right? So I will tell myself I’m going to the gym and then I will not go to the gym because I’ll be busy doing something else. I’m so bad at doing things, even things that I know are vital to my success and existence in life. I know I need to work out. I know I need to analyze deals. I know I need to make those phone calls. I know I need to … Basically, I know I need to work these systems. I’m so bad at doing it. I recognize that.

Brandon:
So I can fight against my nature to be lazy or I can hack my nature. Here’s what I mean by hacking your nature is I find ways to obligate myself to do those things. I have a personal trainer show up in my garage and he shows up. Now, am I going to be able work out if Jerry’s down in my garage? Yeah, because he’s here in my garage. I don’t want to make him waste his time to come all the way out here.

Brandon:
So when I’m feeling moments of inspiration like, “Oh, yeah. I should work out next week,” I’ll find a way to obligate myself to do that. I do it with all sorts of things or I hire an employee or a team member to do those things because as an employee, it’s really easy to do those things, mundane things, because you’re getting paid a job to do it, but as an entrepreneur, I’m really bad at it.

Brandon:
So that’s how I hack my nature by either hiring someone to do it or making somebody show up that obligates me to do it. So hopefully that helps somebody out there who’s in a similar boat of just being lazy like I am. It really helps.

David:
Rob, you’re pretty lazy. What do you think about that?

Rob:
Yeah, I like that. Yeah. It reminds me of the whole putting your phone far away with an alarm so that whenever the alarm goes off, you have to get out of bed. You’re working against your own flaws, right? My thoughts on that are that I agree, and I wanted to just bring this full circle, Brandon, because while we’ve been talking, I’ve done it. I’ve cracked the code. I’ve made your glorious acronym.

Brandon:
No, no way.

Rob:
Yeah, yeah. You ready?

Brandon:
Let’s hear this acronym. It better be good.

Rob:
All right. I’m calling it GEESE. All right? So G is going to be get. All right?

Brandon:
Okay, get, get.

Rob:
You got to get them. All right? That’s your hook.

Brandon:
All right. I like it. Get them.

Rob:
Entice. All right? You got to tease them, right? You got to entice them with a little bit of knowledge. Establish. Establish credibility, right? Then gold, right? That’s show and tell, right? Show and tell. Show up, give a performance, make them feel razzle-dazzled, and then at the very end, encourage. That’s your E. Encourage them to take some action today, follow you, click that like button, hit the notification bell, and that my friends is GEESE.

Brandon:
It’s the GEESE method. You heard it here first. Thank you.

Rob:
The bearded geese.

Brandon:
Yeah. What’s the line, David? The people person, I’m a geese goose.

David:
One of the best memes you ever posted. It’s this old pilgrim looking like Puritan holding a goose in his arms or her arms, and up at the top it says, “I’m a people person,” and then near the goose it says, “I’m geese goose,” and something about it just hits your funny bone so hard when you see it. I don’t know the whole image together. We were talking about that earlier. That’s funny.

Brandon:
So good. So good.

David:
All right. Well, Brandon, if people do want to follow your content, if they want to invest in your properties, where do they find you?

Brandon:
So I’ll give you a couple spots. If you want to see how our funnel works when people join our email list, we actually have a text message list, that’s at beardybrandon.com, beard with a Y, beardybrandon.com. We didn’t really talk about it today, and I don’t want to dig into it too deep, but I’ll make the one point on that is social media is great, but you do not own your followers on social media. Mark Zuckerberg does, right? You don’t own it, Google does.

Brandon:
In other words, you could be shut down, your account could get hacked, you could lose everything. It happens all the time. If you all don’t have two-factor authentication on your devices, do it right now. Please do it right now. Everybody’s getting hacked right now. Everybody’s getting hacked right now.

Brandon:
Anyway, so number one, you don’t own your people. You have to get them onto an email list. You need people’s email or their phone number. That’s how you’re going to connect with people in the future, which goes back to what David, as you said earlier, is keeping that warm with text messages. So we have a text message list. Again, beardybrandon.com.

Brandon:
David, you have one as well, Behind the Shine. I like that. We got Behind the Beard, Behind the Shine. Why do we have that? Because I need people’s emails to communicate with them. If I ever want to write a book, if I ever want to launch a fund, if I ever want to do a meetup and say, “Hey, I’m going to be in San Francisco. Who wants to come hang out?” I want to do that via text message or an email.

Brandon:
So anyway, that answers your question and offer some more, hopefully, advice for people is get an email list of some kind and you can join mine at beardybrandon.com and Beardie Brandon on social media everywhere.

David:
Yeah. Let’s have a challenge here. I want you to go download Brandon’s text letter at beardybrandon.com and then go to dgtlive.com/text letter. So it’s davidgreeneteamlive.com.

Brandon:
Is it better?

David:
Yeah. Not only do I want you to see whose is better, I want you to comment on each of our Instagrams to say, “Yours was better,” or on Brandon’s, his was better because mine, I’m the bad guy in a movie where I specifically engineered a weapon that could take out this specific superhero. I studied Brandon’s text letter and I’m like, “How could I make mine better than his?” because everything he does is more aesthetically pleasing than anything I’ve ever done. So I really, really, really need to know that my text letter is better than Brandon’s and I’m okay to admit that. So please go follow it and then see it, and tell us what you think.

Brandon:
I have a severe problem with yours, though, a real problem with yours that’s irritating me. You have a logo on yours of your faith and your body and your arms look like they’re little chicken arms. Look at your arms right now. Give me a flex, David. Let me see your arms. Let me see your muscles.

Rob:
Let’s see it, man.

Brandon:
Everybody wants to see that. Let’s see it, man. No, I want to see your Hulk arms. Look at David’s arms. Those are not the arms in his logo. So whoever designed your logo needs to put on these man arms on your logo. You should be hugging your logo like that. Yes. You need to show off the guns, man, because you got guns. You need to show them off.

Rob:
Don’t be so shy, Dave.

Brandon:
All right. That’s my problem.

David:
You’re making my face red on podcast for 200,000 people to be seen right now.

Brandon:
That’s what we do.

David:
Thank you for that.

Brandon:
Anyway, yes.

David:
Don’t let that distract you from seeing if mine is better than Brandon’s. I really need to know how we did.

Brandon:
By the way, we have Behind the Beard, which is my text letter, which that goes out every Wednesday. Oh, shoot. I forgot to give Matt my … I got to do that right after this call. I’m going to give him today’s Behind the Beard. We have David’s Behind the Shine. What is Rob’s? Behind the, what? What’s your text letter going to be?

Rob:
We were workshopping this just now. I think it’s Beyond the Coif.

Brandon:
Okay. I don’t even know how to spell that. So I might have a problem, but we’re going to go with it.

Rob:
C-O-I-F. Coif.

Brandon:
I was going with Q. I was way off.

Rob:
That’s honestly understandable. It’s surprising to me that coif is spelled with a C. You can also go pompadour.

Brandon:
I was thinking you’re the only one with glasses here. So I was going to go with something on that, but that’s okay.

Rob:
Oh, yeah, a riff on lenses or frame, something like that. I’ll workshop it.

Brandon:
Yeah. Ooh, ooh, that’s good because you’re the video guy.

Rob:
Right. Well, I spent all my creative juices today on the acronym, so I can really only do one creative per day.

Brandon:
That was pretty good. Yeah. I’m going to workshop that a little, too. Anyway, all right, where were we at? We are so off track. David, yes, beardybrandon.com or odcfund.com. If you’re an accredited investor, please give me your money because we’re going to take down some big deals. There you go. How’s that?

David:
Absolutely.

Rob:
That’s pretty good.

David:
I’m DavidGreene24. Check me out. I got somebody running my social media now. Tell me if you think that I should keep him or if I should fire him.

Rob:
That’s awkward because that person is me. Then you can fine me on YouTube at Robuilt, R-O-B-U-I-L-T. A lot of misinformation out there. People call me Robuilt. It’s Robuilt. Instagram, Robuilt as well, and TikTok, Robuilto, if you want to see me dance the real estate game.

David:
The last thing that we will all say here is all of us have people faking our accounts and messaging you to get your money. The most recent one was David Greene backup 24 and it says, “This is David’s private account.” So now my DMs are full of people saying, “Is this you?” None of them are me.

Rob:
Dude, I got literally 20 text messages from all of my friends today because I guess someone did the exact same thing. It’s so frustrating. I’m like, “Oh, guys.”

David:
All right. Well, thank you very much, Brandon Turner. Any last words before we let you get out of here?

Brandon:
No. Do you guys not do the famous four anymore? Did we kill that?

David:
Do you want to do the famous four? You’re going to miss-

Brandon:
No. I mean, did you kill it?

David:
No. It didn’t make sense to do it with you.

Brandon:
Whatever. All right.

David:
Question number one, what is your favorite real estate book?

Brandon:
There’s a million of them but I’m going to say the same answer I’ve said every time somebody’s asked me this. It still is Rich Dad Poor Dad.

Rob:
Question number two, what is your favorite business book?

Brandon:
I think we should change the famous four question two. What’s an impactful book you’ve read recently? If that was the question you asked me, I’m going to go with a book called The Crisis of Comfort. I don’t even know who wrote the book, but it was phenomenal. I recommend it to everybody. It’s not even a business book per se, but it is a book about doing hard things, which I think applies to business. So I’m going to go with that book.

Rob:
Then outside of, let’s see, how can I throw you a curve ball here? Okay. Outside of jujitsu, surfing, hanging out with your daughter and your wife, and building a real estate empire, what are some of your hobbies?

Brandon:
Buying stuff from Pottery Barn, buying stuff.

Rob:
That’s a good one.

Brandon:
It’s a modification house. So we have been buying thousands of dollars worth of stuff from Pottery Barn. So that’s my hobby these days is buying stuff from Pottery Barn.

David:
Rob, do you see now why I say you and Brandon are like the same person?

Rob:
Dave, I love Pottery Barn. It always got-

Brandon:
Pottery Barn.

Rob:
… and TV and stuff, but it’s legit, and Crate & Barrel.

Brandon:
No, you go in there and you’re just like, “It feels so good.” Yeah, Crate & Barrel, too, I agree. I agree. Anyway-

David:
Where does Bed, Bath and Beyond fit into this?

Rob:
Oh, low tier, low, low, low tier.

Brandon:
I don’t know if we’re going to have time. I mean, yeah.

David:
All right. Brandon, in your experience, what makes successful investors different from those who give up, fail or never get started?

Brandon:
They build a machine.

Rob:
Well, usually, I’d tell you to tell us where people, yeah, we already asked. So I mean, how about you just leave us with a little golden tidbit and then we’ll end there?

Brandon:
If you really want to do something, you’ll find a way. If not, you’ll find an excuse, Jim Rohn.

Rob:
That’s good.

Brandon:
That’s it. I’m just quoting somebody else’s tidbit. It was my favorite quote. So I’m going to leave you with that. Isn’t that good?

Rob:
That’s fine. I didn’t say it had to be original.

Brandon:
Here’s why this is such a powerful quote. Let me say it again. If you really want to do something, you’ll find a way. If not, you’ll find an excuse because people listen to podcasts, they watch YouTube videos and the natural reaction is to find a way to why that won’t work for you. Gary Keller and Jay Papasan wrote in The One Thing, “If you argue for your limitations, you’ll win every time,” and people do constantly. This is why this episode won’t apply to me. I’m not good at this. I don’t want to build a brand. I’m not good at that thing.

Brandon:
If you argue for your limitations, you’ll win every time, but if you really want to do something, if you really want to raise money, bring in partners, bring in team members, build your team, raise private capital, all that stuff, you will find a way. You will get good at the social media, the branding, the reputation building if you really want it. If not, you’ll just be coming up with excuses. So stop your excuses and go make some money.

David:
All right. Brandon, we’re going to let you get out of here. Thank you for being back on the show. It was great time. For biggerpodcast.com, this is David Greene, for Rob I’m bringing tidbit back Abasolo, signing off.

 

 

 

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2022-06-30 06:02:49

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10 Questions to Ask Tenants Before Renting

Knowing the right tenant screening questions to ask is key to protecting your investment. Tenant screening is vital because you’re most likely renting to a stranger. There is only so much you can tell from first impressions. Therefore, screening is your only chance to recognize a potentially good tenant from a disastrous one. 

Standard procedures for screening a tenant include checking references from previous landlords, employment references, and a credit report. However, interviewing the tenant is just as important. Asking the right interview questions gives you a chance to learn vital information about the prospective renter. You can also gauge their reaction to specific questions—more than you can from a rental application form. 

This article discusses the most important questions to ask tenants to ensure they are a good fit for the rental unit. But, it’s crucial to know why you must ask these questions. 

What Makes the Ideal Tenant?

Three factors help identify the ideal tenant:

  1. Their ability to pay rent. Rental income should be three times the rental price.
  2. They must have good references. This is because you can often get an idea of future behavior based on previous conduct.
  3. They need a decent credit history.

These factors help to ensure three crucial things:

  1. The tenant has a reliable monthly income proving they can afford the make rent payments
  2. The tenant will pay rent on time
  3. There is a good chance they will take care of the property

Interview Questions You Cannot Ask

Although the pre-rental interview is designed to get to know the tenant better, you must be careful. There are specific interview questions you can never ask a tenant. You should stay clear of questions that appear discriminatory or violate the Fair Housing Act. Here’s what you should know about the Fair Housing Act.

Top 10 Screening Questions to Ask a Tenant

Asking questions is the only way to assess a rental applicant. However, to ensure you get the right tenant, you must ask the right questions. And not just any question will do. The better the questions, the better your position to accurately evaluate the potential tenant. 

Here are the best 10 screening questions landlords should ask potential tenants during the interview.

1. When do you plan on moving in?

A good first question for a potential renter is knowing when they plan to move. Maybe they have time left on their current lease and can’t move immediately. In this case, it may be best to find a tenant who can move in immediately to reduce vacancy time.

On the other hand, suppose the current tenant has given two months’ notice, and you have started advertising early. In that case, someone who wants to move immediately wouldn’t be a good match.

2. How long have you lived at your current address?

A basic tenant screening question is knowing how long they’ve lived at their current place. Their answer can give an idea of their stability as a long-term tenant. For example, have they lived there for less than a year? In that case, it’s good to find out why. It may be because of relocating with work or another legitimate reason. 

A tenant who is constantly on the move may be a sign of a problem tenant, and there’s a risk they won’t stay for the entire lease agreement term. 

3. Why are you moving?

Moving can be expensive, not to mention stressful. So, it’s worth asking a prospective tenant their reasons for moving. Maybe their current place no longer matches their needs. Or, they may need to live closer to work or family. Was it an increase in rent prices? Regardless of their reason, always do your due diligence during the screening process. 

It’s always a red flag if the tenant lies about their reason for moving. For instance, they say they need to downsize, but you learn from references that they are getting evicted or regularly miss rent payments.

4. Do you have pets?

If you don’t allow pets in your rental unit, then you must find out about any animals they have. However, even if you have a pet policy allowing animals, you may have restrictions on the size and breed. So, it’s best to find out before signing the rental agreement. Additionally, you can discuss your policy on paying a pet deposit and any additional fees. 

If you allow pet owners to rent, always carry out pet screening beforehand. 

Pro tip: Remember that a service animal isn’t classified as a pet, and you can’t deny housing to someone who has one. You should also check that the emotional support animal letter is genuine.

5. How many people will be living with you?

Rental laws restrict the number of people per bedroom in a rental unit. If you have a multi-tenancy unit, asking this simple question is essential. In any case, anyone living in the apartment permanently should be named on the lease agreement. 

6. Are you or anyone who will be living in the apartment smokers?

A vital rental screening question to ask a tenant is if they smoke. Typically, a rental agreement should state your smoking policy and outline the consequences for violating the lease. However, asking if they smoke allows you to assess their reaction. 

7. What’s your current income?

It’s not impolite to ask a straightforward question about how much a prospective tenant earns. After all, you must know if they can afford the monthly rent or not. Typically, a tenant can afford rent if they spend no more than 30% of their income on housing. According to a Harvard study, the 30% rule “remains a reliable indicator of affordability both over time and across markets.”

If their pay stubs or bank statements reveal a lower amount, you should be extra cautious about renting.

It’s worth noting that reports indicate that nonpayment of rent is the most common reason for evictions. 

8. Have you ever been evicted?

Asking about previous evictions may reveal why they were forcibly removed from a previous rental unit. Of course, if they were evicted, it’s good to be cautious. But were there extenuating circumstances? Or has enough time passed, and the tenant now has a good credit history for a previous eviction not to be an issue? Again, it’s good to find out. 

9. Do you have current or previous convictions?

Before asking about a criminal record, it’s crucial to know if any local laws prevent you from inquiring too deeply into this. There’s also grey area surrounding the Fair Housing Act, and if it’s truly legal to ask this question, as it may turn out to be discriminatory. However, if you can inquire about convictions, it’s good to do so. In addition, their criminal history and type of punishment could indicate if they are a suitable candidate for renting. 

Be very careful not to ask about arrests. It’s generally illegal to ask about previous arrests when conducting a screening interview. Arrests don’t always lead to convictions. 

10. Can you pay the security deposit and one month’s rent at the lease signing?

The last question is to ensure that the tenant can pay the upfront costs of renting. At the same time, you can ask if the potential tenant has any questions for you.

Conclusion

Knowing the right tenant screening questions can help you assess applicants and choose the ideal tenant. However, never take answers at face value. Instead, always do due diligence to check that the tenant was telling the truth.

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2022-06-29 19:02:12

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How to Navigate Multiple Offers – for Buyers AND Sellers





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2022-06-29 12:44:21

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Financially Free in 2.5 Years by Buying “Low Risk” Rental Properties

You often hear about house hacking as a means to an end, a simple way to start your real estate journey, but what if it could be more? What if house hacking could be your ticket to financial freedom? Today’s guest, Craig Curelop, author of The House Hacking Strategy, shares how he reached financial freedom through house hacking and how to follow along in his footsteps.

Craig started where most do, hating his W-2 and working too much. He began researching how to earn a passive income and came across BiggerPockets. Within six months, Craig started working at BiggerPockets, moved to Denver, and decided to start living his life the way he wanted. Using his house hacking strategy, he went from being $30,000 in debt to financial freedom in two and a half years. 

Before you get into house hacking, you need to understand the basics, and today Craig breaks them down. He goes over the different ways to house hack and its advantages and disadvantages. Craig also talks about how to live with your tenants and the boundaries needed for your ideal house hacking situation. Craig paints the whole picture so you can make an informed decision and decide if house hacking is the way for you to become financially free too (or at least build more passive income)!

Ashley:
This is Real Estate Rookie Episode 195.

Craig:
And so, you need to look at the house with the proper layout, so that you can separate the upstairs and downstairs. For example, there’s many houses in the Denver area where the side door that is right where the stairs are to go downstairs. So, all you have to do is put a little wall up or put a little door up and you’ve got two separate units. And that would be perfect to Airbnb the downstairs. We do that. I’ve got many properties that are just that and I think that’s the most efficient way and the way I like to house hack now.

Ashley:
My name is Ashley Kehr and I’m here with my co-host, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie podcast where every week, twice a week, we give you the inspiration, information and motivation that you need to kick start your real estate investing career. Ashley Kehr, my co-host, what’s going on? What’s new in your neck of the woods?

Ashley:
Well, I’m currently in a stretched position trying to get my knee to stop being painful right now. The six-month, the never ending complaining of me with my knee problems. But hopefully, I just had my last surgery and hopefully, I’m on the mend, but I avoided my pain pill today, which I probably should not have. But I wanted to be of a sound mind for the podcast recording, but I feel like that’s not even possible, even without me on drugs, so yeah.

Ashley:
But yeah, other than that, everything’s good. I’m going to look at a property tonight that could potentially just be a long-term buy and hold and getting excited. I think when this airs, this has already happened, but I’m going out to Boise, Idaho to a conference that I’m going to be the emcee at and speaking at for AJ Osborne. And it is his CRU Circle event, so it’s on mostly about commercial real estate investing.

Tony:
Yeah, it’s exciting. There’s like a loaded lineup of speakers for that one. I think Thatch is speaking there, Brandon is speaking there, so quite a few number of people. When is it again? June, what through what?

Ashley:
June 14th to the 17th.

Craig:
Okay. I think we’re at another conference that overlaps with that, but yeah, I saw the lineup. I thought it was really cool. I wanted to attend. So, you have to give us the full download once you get back.

Ashley:
Don’t worry. Follow my Instagram stories and you’ll be able to see all that.

Tony:
There’ll plenty of that, yeah.

Ashley:
Nothing about the conference, it’s just the after party.

Tony:
Just the yeah.

Ashley:
No, I’m kidding.

Tony:
Yeah. More hula hoops and masquerading views and stuff like that. How cool.

Ashley:
Yeah. Yeah, the last time I went to an AJ Osborne conference, it was in Coeur d’Alene, Idaho and it was a Self-Storage Conference. And I remember the first night, he’s like, “Oh, I’m having just like a small VIP little cocktail hour. It’s just going to be some hors d’oeuvres and cocktails. Just join us.” And it was like oysters, fresh cut prime rib. I’m like, “Wait. What does this cocktails and hors d’oeuvres? This is like a meal, a 10-course meal.” So, the food is what I’m most looking forward to.

Tony:
There you go. All right. Not the networking, not amazing content. It’s the food. I love it.

Ashley:
So, what’s new with you, Tony?

Tony:
Actually, while we were recording this podcast, I got an email that we just closed on another one of our flips, so that’s always exciting. This one’s cool because all of our other flips, we’ve been using that money towards the purchase of more short-term rentals. But this will be the first flip that’s not earmarked for another purchase. We actually get to spend some of it, so that’s always exciting. So, we started flipping houses late last year and we’ve rehabbed, I don’t know, quite a few in Joshua Tree now. So really, really excited that we can continue to grow that part of our business.

Tony:
And we’re flipping these properties as turnkey short-term rental, so even though it’s technically a different type of real estate investing it pretty much is still what we’re doing. But instead of us keeping the property, we’re just selling to someone else at the end. So, it’s been cool to learn this other side of real estate investing and the properties turn out, we get better every single time. So, if you guys want to see the flips or you guys want to maybe buy them from us, you guys can follow on Instagram. It’s @TonyJRobinson. I usually post all the flips we’re selling there.

Ashley:
I think that it’s so cool that you are taking exactly what you’re doing and learning how to have a different exit strategy based off of it. But also helping other people get started. Having a turnkey property is a great way to get started in real estate investing if you know nothing about rehab and especially if you want to get into short-term rentals. A lot of the properties that you have bought purchased out in, and even Joshua Tree, but in the Smoky Mountains, too, a lot of them were pretty much turnkey, correct?

Tony:
Pretty much, yeah, everything we bought in the Smoky’s has been turnkey. It was an existing short-term rental, it came fully furnished and we spent a couple of thousand bucks like replacing linens and missing silverware and stuff like that. But yeah, there’s definitely a gap right now I think in the short-term rental industry, in terms of turnkey opportunities in a lot of markets. If you look at long-term rentals, there’s turnkey operators in almost every major location, but that same thing hasn’t happened yet for the short-term rental. So, we feel like we’re filling a void there, yeah.

Ashley:
Well, today, we are talking about a specific topic and that is house hacking, not short-term rentals. And we have an expert on today, Craig Curelop, who wrote the book, the house hacking strategy. So, Craig joins us from Denver where he has his real estate team, but also recently, we found out just moved to Idaho. So, Craig is coming on today to talk about house hacking, what it is, is it still possible to do in today’s market? What are the advantages, the disadvantages of it?

Craig:
And I’m glad we brought Craig on, because in my mind house hacking is one of the lowest risked ways I think to get started as a real estate investor. And Craig Curelop breaks down his five-year blueprint that most people can probably achieve financial freedom by following or using house hacking as a strategy. So, overall, just Craig is a wealth of information when it comes to house hacking and we hear a little bit about his story, how he got started, how he was sleeping in a cardboard box in his own living room. And how that led to him achieving financial freedom. So, overall, just a really cool conversation with Craig.

Ashley:
Craig, welcome to the show. Thank you so much for joining us, since last time we tried to record with you, you ditched us.

Craig:
I know, I know. Well, I missed the memo. I thought we were doing this podcast in the river in the Grand Canyon on the Colorado River. So, you guys didn’t show up, I was waiting for you.

Ashley:
You know what, I think that is the best excuse to not show up to a podcast recording. And you know what, you’ve definitely left your mark because you’re the first person to not show up to a rookie podcast [inaudible 00:06:41].

Craig:
Really? I’m in the record books?

Tony:
You’re in the record books, man.

Ashley:
Yeah.

Craig:
All right, put me down.

Ashley:
And so Craig, tell us a little bit about yourself. For people who don’t know, you’ve written the book, The House Hacking Strategy. You’ve been a big part of BiggerPockets and you’re a real estate agent. So, just give us a brief backstory on you.

Craig:
Yeah. Really, it all started like a lot of people start out in this industry, just absolutely hating my W2 job before I worked at BiggerPockets. It was honestly-

Tony:
I was I going to say, I was like, “What did you work for?”

Craig:
Yeah. Scott’s in the background there, like yeah. No, so it was when I was in California working like a venture capital job, being an analyst. And just working hundreds of hours a week and looking down the hallway and seeing that my progression would be moving 30-feet down the hall to being my boss. And maybe I worked a hundred hours a week, maybe he worked 80 hours a week, so it really wasn’t a good life.

Craig:
And so, I started getting the idea of a passive income after reading Tim Ferriss’s book, the 4-Hour Work Week. And after reading that book, I was like, “Oh, I should start thinking of my expenses on a monthly basis, my salary on a monthly basis. And then if I can just get enough passive income on a monthly basis to cover my expenses, well, I’m financially free and I no longer have to work.” And that sounds a lot of fun. I get to travel, spend time with friends, do whatever I want and live on my own time.

Craig:
And so, being in Silicon Valley, I was trying to think of dumb startup idea after dumb startup idea and if you didn’t know, Silicon Valley is filled with dumb startup ideas. And so, none of those just worked. And so then, I went back to my house and I looked around and I was living in a 20-unit apartment building. And I was like, “This little Spanish lady, who comes to collect rent every month has probably collect in a hundred grand on the first of every month. And all she has to do is drive her car here.” I was like, “That sounds pretty cool.”

Craig:
And so then, I started diving into real estate. Obviously, I found BiggerPockets, not long after that and then I went down the rabbit hole. And so, within six months of finding BiggerPockets, I found myself working at BiggerPockets, moving to Denver, purchased my first house hack. And that’s where it all started.

Tony:
Craig. I love that you made that observation of, “I’m working a hundred hours a week. Once I get promoted, I get to look forward to 80 hours a week.” Which is, it’s such a weird dynamic, but it’s what so many of us are accustomed to and it was that light bulb that made things go off for you. It’s so funny, man. The 4-Hour Work Week was one of the first books I read about entrepreneurship as well. So, for me, it was Rich Dad, Poor Dad and The 4-Hour Work Week came shortly there afterwards and that’s when I went down the rabbit hole, too, man.

Tony:
But Craig, what makes you unique, man, is that you’ve built a name for yourself around one specific strategy within the world of real estate investing. So, breakdown for us exactly what house hacking is and why you felt it was a good place for you to start your investing career.

Craig:
Yeah. So, I think anyone who’s young or anyone really, in general, house hacking is probably the best place to start. And so, what house hacking is, is the idea that you’re going to purchase a one- to four-unit property with a low-percent down, typically, 3 to 5% down. Because you’re doing a low-percent down loan, you’re required to live there for one year and while you’re living there, you’re able to rent out the extra bedrooms or the extra units. So, the rent that you’re gathering covers your mortgage and you’re able to live rent free.

Craig:
And I would bet that 90% of the people listening right now, their largest expense is their living expense, unless they’re house hacking, of course. And so then, so you’re eliminating your largest expense, you’re investing in a property, you’re living in your investment and so, things aren’t going to go bad when you’re living there, because you’re seeing it every single day. So, it’s like landlording on training wheels and you’re able to do this year after year after year until you have a pretty sizable portfolio. And you can easily achieve financial independence just through house hacking.

Tony:
Craig, thanks for that breakdown, man. So, I just want to recap it to make sure that our listeners are following. So, essentially, you go out, you buy a property and then you rent out the extra space in that property to help offset your cost of owning that home. Did I wrap that up the right way?

Craig:
Yeah, you got it, man.

Tony:
So, Craig, let’s talk about why do you feel this strategy is a great way for newer investors to start. And especially given where the market is at today, there’s a lot of fear, I think, of a lot of people who want to get into investing. Why is house hacking a great place to start?

Craig:
Yeah. It’s a great place to start because you don’t need a lot of money to get started. Simple as that. You need 3 to 5% down. So, if you’re in Denver, buying a $500,000 property, you need between $15 and maybe $30,000 down. That is a lot less than what it would typically cost to buy a $500,000 property over a hundred grand. And so, you’re not putting a whole lot of money down. Because of that, your returns on investment are massive.

Craig:
Like I said prior, it’s you’re landlording on training wheels. You’re living in your investment, so you’re seeing your tenants come in and out. You can stop things and nip them in the bud before they get too bad. And so, I think those are two really big reasons why house hacking is a great way to get started.

Ashley:
Now, you talk about that half a million dollar house that somebody is going to go purchase and maybe they’re buying that because it has four bedrooms, so they can live in one and rent out the other three. How do you get approved for these higher purchase price instead of having to buy a two-bedroom one bath, because that’s what you can afford, but if you’re house hacking this bigger property with more rooms, does the bank actually look at that income that you’re going to be bringing in on the property?

Craig:
So, this seems to change by the month, it feels. Sometimes, the bank will look at prospective rents and take 75% of border income is what they call it. They were doing that at one point. I think they stopped doing that as of this recording. By the time this releases, they may start doing it again. So, my recommendation would just be to talk to a bunch of different lenders and see if they can use any of the expected rent to offset the debt payment to increase your debt to income ratio. Now, you can definitely do that if you use an FHA loan on a two-, three- or four-unit property. I’m just not sure how that works with the bedrooms at this point in time.

Ashley:
So, now, how you talked about things change going on with lenders and definitely, everything in the market is changing right now than what we’ve seen in the past several years. So, has that affected house hacking at all? And is it still possible to house hack a property?

Craig:
So, I truly think that there will never be a time where house hacking is not advantageous. I just don’t see a time. The reason is one, there’s many different types of house hacks. And so, if you’re buying a four- or five-bedroom house, you’re living in one unit, renting out the other. In a bad economy, you’re offsetting your mortgage payment, which will only help you. You’re offering cheaper housing to people who need cheaper housing because obviously people pay less for a room than they will for a full unit.

Craig:
So, I don’t see the necessity for house hacking really going away. I thought, I legitimately thought I was nervous when COVID hit that people may not want to be living in a room with four strangers that they don’t know where they are or how dirty they are. But honestly it’s like it wasn’t even the case. So, because house hacking persisted through COVID, lasted through COVID, I just don’t see any scenario where people wouldn’t want to do that.

Tony:
So, Craig, you also mentioned there’s multiple ways that you can house hack. So, I just want to break down some of those and tell me if these different scenarios work with house hacking. So, you already mentioned you can go out and buy a big house. Buy a five-bedroom house where you rent out the other four bedrooms. What if I want to rent out my basement? Can I house sack my basement?

Craig:
Yeah, we do that all day. So, it depends. Obviously, you have to know what the houses look like in your area. Many houses in the south don’t have basements. In Denver, a lot of houses do and so, you need to look at the house with the proper layout, so that you can separate the upstairs and downstairs.

Craig:
For example, there’s many houses in the Denver area where the side door that is right where the stairs are to go downstairs. So, all you have to do is put a little wall up or put a little door up and you’ve got two separate units, and that would be perfect to Airbnb the downstairs. We do that. I’ve got many properties that are just that. And I think that’s the most efficient way in the way I like to house hack now. Now, that I like to have my own space, now that I’m a few years in.

Tony:
What about like, I don’t know, say I have a detached garage or an ADU in the back. Can I house sack those?

Craig:
Sure. I mean you can house hack anything. You can put a tent in your backyard, you can add storage units. There’s so many ways you could get money out of your house. But people ask me a lot, “Should I renovate my garage and add plumbing and add electrical and add all of these different things?” Honestly, I think it’s going to cost you 75 to 100 grand to do all that. You might as well just buy another house is my thought. It would be less work, less stress, less permits and less time. So, if you got 75 to 100 grand, I would say like, and you get to keep your garage. So, my two cents, I don’t love the garage conversion thing, but it all depends on where you live.

Tony:
Yeah. And I’m asking these questions facetiously. The point I want the listeners to understand is that whatever extra space you have, whether it’s a basement, an ADU in the back, or you buy a multifamily where you live in one unit and you rent out the other three units. Whatever extra space you have on your property, you can turn that into an income generating space as opposed to a liability like it is for most people.

Craig:
100%.

Ashley:
Also, parking for RVs and boats, that’s really big in our area, so a lot of people have these in over the winter. They need somewhere to store it in their driveway in the suburb. It might not be big enough to actually store it and so, they need somewhere else to store it. And a little side note here, our producer also chimed in with a studio space in your kids’ closet, which is how I recorded for the last three years.

Tony:
Yeah. And if you guys don’t know-

Craig:
There you go.

Ashley:
I’m at my kitchen now. No, but-

Tony:
Yeah. If you guys don’t know Ashley’s kids, they’re actually ruthless landlord. So, Ashley pays a premium for recording in that studio every single month. So, she taught them well.

Ashley:
Actually, they did. My one child has a really nice big walk-in closet and I’m forced to take the small bare minimum walk-in closet for my studio.

Tony:
Oh, my gosh. I love that.

Ashley:
The thing is with my knee, with hurting my knee, my knee has been straight for so long, so I haven’t been able to bend it enough to get into the studio…

Tony:
Get back into the closet.

Ashley:
… other than that. So, I should be able to move back in shortly.

Tony:
So, Craig, we talked about some of the benefits of house hacking, some of the different ways you can do it. But what do you think are some of maybe the disadvantages that come along with house hacking? Maybe why is it a bad approach for someone?

Craig:
It is a little bit more work, obviously. You are maintaining a house and you need to get tenants and you need to sign leases and do your diligence and all that. So, it doesn’t come without a cost. Is that cost large relative to what you’re getting out of it? I would say not at all. My story is I went from a negative $30,000 net worth to financially free in two and a half years, mainly through house hacking.

Craig:
And so, it’s not get rich super quick, but it’s get rich pretty darn quick if you want to do it the right way and you want to really be scrappy. And I was really scrappy for those first few years. And so, yeah, I just think that, I think it’s for anyone that wants to, again, expedite their path towards financial independence.

Tony:
All right. So, Craig, appreciate you breaking down some of the disadvantages of that. I think it’s important for new investors to hear both the good side and the bad side of real estate investment, because every type of real estate investing comes with some type of downside. And you just got to make sure that if you choose this strategy that it will align or that you can stomach what those downsides are, I guess.

Tony:
Now for me, Craig, one of the biggest things that I’d be concerned with from house hacking is having to share my personal space with strangers. So, what tips or advice do you have for someone that might be worried about the same thing?

Craig:
Yeah, so we talk in the book about the comfort continuum. On one side, it’s comfort and on the other side is profit. And on the far side of that continuum, the profit side, it’s, yeah, you’re living on the couch in your living room and renting out every other room in your house, so understandable if you don’t want to do that. So, you just move along the continuum towards the comfort side, which is what you mentioned before Tony, about having a house where you just rent the basement. So, that way you have your own space. I’m sure you may hear them come in and out.

Craig:
But honestly, when we’ve done this, I don’t think I’ve ever even seen my Airbnb guests. I’ve heard them walking down the stairs and stuff, but you really don’t see them that much. And so, that usually is enough privacy, so that you can still make some money, you can still cover your mortgage or at least get pretty darn close and you can still make serious leaps towards financial independence.

Ashley:
So, are there a lot of properties out there that have the basements redone or what are some things that me or anybody could look for when they’re looking for a house hack? What do you look for when you’re searching for a property?

Craig:
Yeah, so in Denver, there are a lot of basements that are completed. And so, those are really easy to Airbnb, especially if you don’t care to add a kitchen or anything like that. Obviously, if you add a kitchen, it will get you a little bit more and then you have some more flexibility with maybe splitting it up into two units later on. But if you’re just looking at Airbnb, all you really need is like a microwave and a mini fridge and you’re good to go.

Craig:
I personally like to add kitchens, because I like to have that flexibility in case Airbnb ever goes away or anything like that. And so, what I like to look for is big utility rooms. You’ve got the washer and dryer in there, but you’ve got all the exposed pipes, you’ve got the electrical, so it’s very easy to add a kitchen down there. And usually, it’s about the space that you’d want for a kitchen. And so, it may cost 15 or 20 grand to add that kitchen. And now, you’ve got a house with two kitchens, maybe two laundries. And so, you’ve got this true single family house with a mother-in-law suite that you could rent out both sides. So, it’s like a duplex, but not technically a duplex.

Ashley:
Okay. So, if you purchase one of these properties, are there zoning requirement to say you’re just doing house hacking where you’re just putting maybe a person in each bedroom? Are there zoning requirements for that? And we can talk about the short-term rental side, too, but just for having somebody do long term rental in rooms, does that matter at all?

Craig:
So, each city or each town has different rules for the maximum unrelated people living in a house, so you’ll need to know those rules and my recommendation would be not to break those rules. I would say that most of the time, those rules aren’t super enforced. But again, it’s up to you whether you want to take that risk or not. I know plenty of people that have taken the risk, they have not gotten caught, but it just takes one annoying neighbor to catch you.

Craig:
So, my recommendation is figure out what your jurisdictions laws are, surrounding maximum unrelated tenants, and then you can buy the four-or five- or six-bedroom houses based on what that number is.

Tony:
That’s interesting. I did not know that that was even an ordinance or a law that cities had. But interesting as you go narrow and deep on some of these different strategies, you start to uncover all these different weird nuances. Craig, I want to go back because you said you started off by renting out rooms in your house. That was your first house hack and you’ve graduated to this basement strategy?

Craig:
So, my first house hack was where I was living in the living room behind a curtain in a cardboard box. And then, I went to Rent Find, then I discovered that I could have my own bedroom.

Tony:
Yeah. There was a step-up above that. That’s hilarious, man.

Craig:
Yeah, yeah. Having my own room was a luxury.

Tony:
So, talk us through that. What are maybe some rules. I think it’s a little bit easier if you have separate units. If you’re living in the upstairs unit, someone else is living in the downstairs unit, you’ve got a triplex where there’s two other units. But if you’re in the same house and you’re renting out spare bedrooms, what are some ground rules you should set in place for your tenants? How you screen people to make sure you don’t get some maniac living with you? How do you set yourself up for success?

Ashley:
First, Craig, before you answer that this is bringing you back to college days where this is, house hacking is very common, where you get your group of friends together. You rent a house, each person pays by the bedroom. But I think this is very different is because you’re going and getting your friends to live with you. So, there may not be as many set rules in the house, but you also have that other person as the landlord that collects the rent from everybody, make sure the utility is paid, things like that.

Ashley:
Where now, you are responsible to make sure that everybody is paying and choosing the people to live in those rooms. You may have never have met them before. So, yeah, I’m curious as to what, do you have a rules list that’s posted on the fridge? How do you share the common area?

Craig:
I did have that rules list, but I can tell you, I don’t think people can read. So, this is obviously, it is a thing, but honestly, it’s not as bad as people make it out to be. There’s this common misconception that when you think of rent by the room, you always think first thing is college, living in a five-bedroom place with your buddies. But the thing is you’re not living with your buddies. And so, no one really cares to interact with each other, so there’s not really much like living room, people aren’t really hanging out in their common areas.

Craig:
Most of the time, people are throwing a DiGiorno’s pizza in the toaster oven or the oven, whatever, and bringing it back to their room and that’s it and you’re not. And so, really the rules, we set them right in the beginning. So, I think you always want to make sure that in the beginning and it’s “Clean your dishes, wipe up after yourself.” And then once a month, we’ll get a cleaner to clean the bathroom and the kitchen. And those main areas like that.

Tony:
Craig, did you ever have any instances where people, your tenants weren’t following those house rules that you set up? And if so, how did you go about correcting that?

Craig:
Yeah, tenants, they’re not usually that bad. In my experience, they just haven’t been that bad. Maybe I’ve done a decent job at just screening them. But in the event that something would happen, really, you have to address it soon and address it often before it becomes a habit for them. Habits take a long time to break. And so, if they have a habit of leaving that coffee stir spoon in the sink and that annoys somebody, you say, “Hey, you mind just rinsing that off and whatever, throwing it in the dishwasher?” And just tell them every single time that it happens, so that way they don’t fall back into their habit.

Craig:
And so, if you tell them just once though, you can’t get all mad at them if they do it again a second time. They’re in a habit. You’re helping them break this habit, so you have to realize that it’s going to take time for them to adjust out of that. But to continue to adjust, to asking them and asking them nicely, so there’s no hostility in the house.

Ashley:
Come on, Craig. The answer we wanted to hear is that you laid down the law, you came out, you had your mustache. You had your stored attached to you and walked around the house to make sure all the rules are followed.

Craig:
Yeah, I just walked around with a shotgun.

Tony:
Yeah, Craig, perfect execution. So, you talked about the screening piece, man, so help us understand. For me, I would probably be a lot more stringent for house hacking tenants than I would be for a traditional tenant because I have to share the space with them. So, what did your screening process look like?

Craig:
Yeah, so we would send out an application and that application would basically make sure that they give us their credit score and a background check. Personally, what I looked for was 650 or higher credit score and a clean background check. If there was a DUI like a few years ago or something like that, I would let that go, but obviously, nothing drug-related or nothing violent-related. That’s an automatic pass. And then, you have the landlord references, the employer references, the pay stubs and all that stuff. And so, try to gather as much information as you can about the tenant, verify that information, and then you can go ahead and accept them.

Ashley:
And Craig, there are separate rules for screening a tenant if you are going to be living in the same property, correct?

Craig:
Yes, that’s right. So, if you’re living in the property, there’s the fair housing laws, which you can’t discriminate based on race or sex or family or whatever. But if you’re living in the house, you can basically say any reason that you want. I recommend, just make your life easy and don’t deny somebody because of their race or their religion or something like that. But it could be like, “He looked like a high school bully of mine and I didn’t like that.” And so, that is a perfectly valid reason to not want to live with somebody and so-

Tony:
Craig, was that a real reason? Did you really turn somebody away for?

Craig:
Yeah, I got afraid of one guy. I was afraid he was going to steal my lunch. So, those are like, you can. You’re right, Ashley. You can be a lot more stringent and have weirder answer. If you just don’t want to live with somebody, it’s fine, but I would try to stick to the fair housing laws as best as you can.

Ashley:
And then, what’s a good way to make sure that you stay in landlord mode. And you treat this like a business, so that maybe you’re having everybody pay online or something. It’s just automatically deposited into your account versus getting like, “Oh, well.” Having the person next door to you knocking on your door and be like, “Hey, here’s $100. I’ll deposit the rest later and stuff.” How do you keep that, focus on your business and those systems and processes and it doesn’t get too relaxed into a friendship mode?

Craig:
Yeah, no, that’s great. So, I use a system called Rent Ready. I think I’m sure, I think they were on the bigger pockets podcast and all that. And so, it’s a software that allows the tenants to submit maintenance requests. It allows them to do automatic rent payments and all that. And so, basically you just make sure they set that up in the first month and then you never have to ask for rent ever again, which I think is amazing. As for not getting too friendly with your tenants, that’s a really easy thing to slide into, especially if you’re very friendly.

Craig:
What I would do is I would be civil and cordial with them in the house, but I would never really ask them to hang out, go somewhere to hang out. I would never ask them to go to a restaurant or go to a bar or go snowboarding or anything like that. But that’s just the culture of my house. One way that a lot of people get their houses filled is that they niche out their house, so they say like, “Snowboard is paradise,” or like, “Rock climber haven.” So then, they get a bunch of snowboarders and then they go and they become friends. And that’s actually a really good way to get tenants. So, it really just depends on how you market your house hack and what house hack you want it to be.

Ashley:
That’s cool. I’ve never heard of that before like picking a niche and trying to get people that have common interest into a house.

Craig:
Yeah, it works really well.

Tony:
Yeah. Ash’s would be, “Must have cool hip-hop T-shirts to live in this house.”

Ashley:
Yeah. [inaudible 00:29:10]…

Tony:
Or really bad knees.

Craig:
Yeah. She’s got-

Ashley:
… I should say.

Craig:
She’s got some Kenny Chesney on there now, yeah.

Tony:
So, Craig, one follow-up question to that, so the other thing that always gets me stuck on the house hack strategy is how do you split up utilities, maybe common things like toiletries and paper towels and dish soap? How did you account for all those things? Was it just one flat rate? Was it variable? Switching off month by month? What was your strategy for managing those?

Craig:
Yeah, so when I had these, I would just charge a $75 utility fee on top of the rent. And that would change based on how many bedrooms it was. If it was a four-bedroom, it’d probably be $100. Nowadays, I would actually increase that to $100 because prices are rising. But so, you just have a flat fee. In the winter months, your utility bill is a little bit higher and so, you’re going to lose a little bit. But in the summer it’s a little bit lower, so you’re going to win a little bit. And it nets out within a hundred bucks over the course of the year.

Craig:
And so, that is infinitely easier than going in, splitting it up five ways every single month, adding it all up. It’s a pain. I did that, too and I would just never do that again. And so, that’s what I would suggest, a flat fee, split it that many ways, and you’re good to go.

Tony:
Does that include all the household items, Craig? So, the dish soap, the paper towels, the toilet paper. Everything that’s needed just for the common areas, too?

Craig:
So, when I would furnish a house, I would purchase, I’ll go to Costco and I’d buy a big thing of toilet paper, a big thing of paper towels, a big thing of, like all that stuff. It would maybe cost 100 to 200 bucks and that would be really good for the year. And so, I don’t know if it includes it or not. Sure, but also if things ran out and I wasn’t around, people would replace it. There’s never been a time where we went without toilet paper or anything like that.

Tony:
Yeah. Last question, what about the food piece? Did everyone have their own section in the fridge to say, “Hey, this is Craig’s stuff. Don’t touch it. This is Ashley’s. This is Tony’s.” How was the food handled?

Craig:
Yeah, so there’s specific places in the fridge and also, everyone has their own cabinet. And so you’ve got your dry goods and your stuff you need to refrigerate. There were sections for sure, like section-ish, but sometimes, you put the milks together and you just remember which milk is yours and all that stuff. And we never really had an issue with that. I forgot to say this, if you are going to have five or six people living in the same house, I would probably suggest getting two refrigerators. We always had one upstairs and one downstairs and that way they can store their stuff in the fridge and less time coming upstairs and just more room for everybody.

Ashley:
Interesting. Yeah. I don’t know if I could ever go back to house hacking sharing crisis because I know Tony would yell at me because I’d steal his food all the time. We went to Tennessee together and we stayed at a cabin, a bunch of us. And Tony was meal prepping for his fitness competition and he brought, it’s from California to Tennessee, all of his meals in his little container. And that was the only thing in the fridge, I think that we-

Tony:
And Ash, did you eat one of them or something?

Ashley:
You know what, I was so starving when I got there. I was so tempted to, but Tony, you know how nice him and Sarah are, they actually brought me back some chicken. It all worked out, yeah.

Ashley:
So, Craig, what other tips and advice do you have for rookies that are looking to get started in their house hack? Who are some of the people they should have on their team, maybe? Do they need to find an agent who is friendly to house hacking and knows what that is? Do they need to go to certain mortgage lenders? What does their team look like that they should be building?

Craig:
Yeah. So, I think the first and probably, maybe I’m biased, but the first and probably, the most important person on your team is going to be a real estate agent, because your real estate agent is that node that knows everybody else. And so, if you find a good investor friendly agent that has worked with house hackers before in your area, then make sure they are house hackers, make sure you get along with them, obviously. But if they pass all your criteria, they’ll introduce you to their house hacking friendly lender and contractors and accountants and everything you really need.

Craig:
And so, you don’t need all that stuff up front. Get an agent, find an agent is the first step. After that, they’ll introduce you to everybody else. Let them do the work. And so, I think that’s just the most crucial piece. But I would say take your time finding a really high-quality investor friendly real estate agent and let the rest fall into place.

Ashley:
What about the landlord piece? Is it common for if you’re house hacking, to get a property manager or do you recommend that you self-manage?

Craig:
I think at first it’s best to self-manage just so you know how to do it. And just so you know if your property manager is messing up or not. So, the way I did it was I managed my first two properties myself. Once I got to my third one is when I started hiring property management and I even hired a property manager for the house I was living in to rent out those other bedrooms. And the reason for that was because I was becoming a real estate agent at the time and it just became way more, my time was better served showing people houses versus waiting in the house, having people not show up to see your room. And so, you guys have to figure out what your time is worth. And then, you’ll know when it’s time to hire a property manager. It is very obvious.

Tony:
So, Craig, you mentioned earlier that you’ve essentially achieved financial independence within less than three years through the house hacking strategy. So, what I want to do is, if you can maybe open up the kimono a little bit and give us the behind the scenes. If someone today, they’re working a 9:00 to 5:00 that maybe they’re not crazy about, how can they use house hacking to, maybe not two and a half years, that might be a little bit aggressive, but say they had five years. If someone wanted to achieve financial independence with house hacking over the next five years, what blueprint can you give our listeners to be able to do that?

Craig:
Yeah, so the way that a lot of people in Denver are here doing it is each house hack they buy is going to cash flow them between $500 and $1000 a month. And so, you’re able to buy one of those a year, every year for five years. And so, if get great deals and you can get $5,000 a month in five years, well, that’s financial independence right there. And that, of course, assumes that your rents don’t increase and property values don’t increase, because once you start getting more and more properties that are increasing, you’re able to take the equity from those properties through a HELOC or whatever else. And you can buy more and you can acquire more.

Craig:
And so, I think Brandon has talked about the stack where everybody thinks linearly, but really, it doesn’t work that way. Once you start getting 1, 2, 3 properties, you’ll have more money to then buy 4, 5, 6, 7, 8, 9. And I guarantee you, if you put your head down and buy a property a year, you’ll be very close to financial independence within that five-year timeline.

Tony:
You have my head spin a little bit, Craig. So, I live in Southern California, which is historically a pretty expensive market and a lot of cities here, just buying a long-term rental wouldn’t make sense. And it’s not necessarily house hacking, but just the idea of renting by the room in maybe a more expensive market could be a way to really unlock a different level of profitability. Because if I could rent, maybe a house by itself for $2,700, if you rented the whole house, but if it’s a five-bedroom and I can rent each one for maybe $800 a month, that’s a big difference in profitability there. So, yeah, no, no, just thinking out loud. Maybe I’ll go out and buy a house hack or a multifamily, rent it out by the room now, so we’ll see.

Craig:
Yeah, so in-

Ashley:
I already texted Sarah. She said, no.

Tony:
Yeah. No more deals.

Craig:
So, in more expensive markets, because people always are baffled that I think anyone would say, “Oh, my gosh, I can get a property in Denver,” which appreciates 20% the last two years and still get $1000 of cash flow. I think anyone would take that all day. And I don’t do that by just buying a house and renting it out traditionally. Those are for Midwestern markets and in those markets where you can buy houses for under 100 grand.

Craig:
You have to get a little bit creative in these markets like Denver, Austin, Seattle, I’m not too sure about Southern California, but these tier-two cities, maybe not the LAs and San Franciscos, but what you do. And so, there’s many ways you can do it, whether it’s rent by the room. I’ve been doing this thing now with Airbnb arbitrage. And so, I think a lot of people get excited about finding landlords to rent from, and then put it on Airbnb and keep the difference. Well, I’m just that landlord.

Craig:
And so, if someone comes to me and they want to Airbnb my place out, they pay me $400, $500 a month premium and they take on the management of it. And so, I’m saving. I’m making $400 a month more plus I’m saving on the property management fee, which is about a $600 to $700 difference than I would just traditionally. And so, I’m like all day, I will do that.

Tony:
Craig, you’re going to have so many people, who are fans of short-term rentals, who reaching out to now saying, “Please let me arbitrage your units in Denver.”

Ashley:
Yeah, Craig, let me dig into that. So, you’re not paying a property manager for these fees that the operator is taking over. So, are they taking care of all the maintenance then? Is that included in your lease agreement that they’re in charge of that?

Craig:
So, at least with my agreement, I think every agreement will be different. With my agreement, they take care of the small stuff that the guests will probably do, like little leaks here, little stuff there. If there’s something big, the AC goes, the furnace goes, the roof needs to be replaced, that’s on me, of course. And so, think like most of my maintenance is taken care of.

Craig:
And I’m a pretty nice dude and I don’t want to spoil our relationships, so am I going to let $200 once every four months really destroy a relationship I have with this person who’s given me, say helped me save $600 a month? Of course, not. And so I’m fairly lenient, but yeah, but the agreement usually is they pay for the small things, I pay for the big things.

Ashley:
Okay. So, they would still contact you directly instead of the property manager?

Craig:
Yeah, if something needs to be replaced. Yep

Tony:
Yeah. But so, you have the arbitrage STR operator and you also have a property manager or did you remove the property manager together?

Craig:
I removed the property manager because for me, those things just don’t break that often. Maybe once a year I have to call a plumber and oftentimes, I have an assistant, too. I just have them do it. And so, it’s not really. It’s sure it’s me managing it, but it really doesn’t take much time at all.

Tony:
Cool. Well, thank you for that breakdown.

Ashley:
Yeah. Would you want to go through just the numbers of a house hack for us real quick? You said maybe like $500 to $1000 on average, someone can get from the Denver market. But can you maybe show what the purchase price would be? How much you’d have to put down? What maybe your interest rate would be? And then what they should charge per room? And how much you’d get back in your pocket?

Craig:
Yeah, I can go through my most recent one. Back in July of 2021, I bought this property in a pretty up and coming area of Denver. It was actually a seven-bed, three-bath. And in this, it’s called Virginia Veil. It’s right next to Cherry Creek. It’s a really up and coming area. It’s really nice. What I liked about it’s got that top-bottom setup with that big utility room that I described earlier.

Craig:
And so, I bought this for $585,000. I can’t remember the interest of my mortgage. It was 3 point something, so interest rates were lower back then. And then my mortgage on that is $3,000 a month. So, that was my mortgage. I ended up making one of the bedrooms downstairs into a living room. And so, now it’s a six-bed, three-bath with a living room and I converted that, that downstairs to an Airbnb. I really did not like managing the Airbnb and so, that’s when I got the idea of doing the arbitrage with somebody else.

Craig:
And so, somebody’s renting that downstairs from me for $2,400 a month and she’s putting on Airbnb. And I think she’s making a lot of money because I haven’t heard any complaints. So, that works. So, in Denver, you really can only have one Airbnb per residence. And so, that was an issue in Denver Metro and this one is in Denver Metro versus in the suburbs, the rules are different. And so, the upstairs I have a traditional regular tenant and they pay $2,400 a month as well.

Craig:
And so, you can see the difference there. It’s $2,400 for a top unit, three-bed, two-bath. It’s pretty nice with a backyard versus the same exact amount for a basement unit, three-bed, one bath, no backyard. And so, that is making me $4,800 a month in rent on a $3,000 mortgage, so I’m making $1,800 over the mortgage. And I set maybe $400 or $500 aside for vacancy. Vacancy, I do pay utilities on that one and all the other things you’re reserved for.

Craig:
And so, I’m making a little over $1000 a month on that property right there. And that’s not a home run, out-of-this-world deal. I found that very quickly and just went with it and so, you can get stuff like that all day.

Ashley:
That is so cool. I love that you looked at that property and you’re okay, I want to do short-term rental. And then you’re like, “You know what? It’s not for me. Let’s twist and turn it. And let’s do Airbnb arbitrage.” Especially, that’s one of my favorite things is looking at a property and finding different ways to pull revenue off of it. And also, having those different exit strategies on it where if something’s not working, “Okay, I can do this now with that property.”

Tony:
And Craig, just really quick. You say $1000 pretty nonchalantly, but it’s a pretty healthy amount of cash flow for one property. My first long-term rental, I was making 150 bucks a month, so you did almost 10x that. So, don’t sell yourself too short there.

Tony:
One of the thing I want to highlight. You talked to Ashley about multiple revenue streams, the different opportunities from a piece property. And episode 107, we had Kai Andrew on, and he talked about land hacking, which is similar to house hacking, but his was with land. And he was making 10 income streams off of one piece of land. So, if you guys go back to episode 107 with Kai Andrew, you can hear a little bit more about the cousin to house hacking, which is land hacking and how he set that up.

Craig:
We’re going to have to give that one a listen.

Ashley:
Well, Craig, thank you so much for joining us. We do have a couple segments here to go through. Tony, you want to take the first one?

Tony:
So, Craig, are you ready for the rookie exam?

Craig:
Oh, man, I didn’t study. But let’s do it.

Tony:
The future of your life depends on this exam, so luckily for you, I think you’re going to do well, man. So, three questions for you, same three questions we ask every guest now. So, the first question is what is one actionable thing a rookie should do after listening to this episode?

Craig:
I think you should reach out to a investor-friendly real estate agent in your area. And just start asking questions and start having those conversations, so they can help. if you need some time to prepare, they can help you so that you know what to prepare. And so that way, when it comes time, you’ve got your down payment saved up. You can hit that ground rolling versus getting all the education and getting the team together then. So, start building your team now.

Ashley:
The next question is what is one tool, software, app or system, in your business that you use?

Craig:
For the house hacking piece, I would say Rent Ready is going to be the best thing that I’ve seen. It used to be Cozy, but Cozy got crappy once apartments.com bought them. So, I always recommend Rent Ready now and yeah, they do great for the property management side if you’re going to be managing your house hacks yourself.

Tony:
Awesome. Last question for you, Craig. Where do you plan on being in five years?

Craig:
Man, my future does depend on this.

Tony:
Are you going to chicken on me? We will.

Craig:
That’s always a tough question. We just bought our forever home up in Idaho. And so, I think we’re going to be there. We’re going to be settled in there a little bit more. We’re going to continue to grow the real estate team in Denver and maybe in a few different other markets and just try to help as many people as we can achieve financial independence through real estate investing. And so, similar to BiggerPockets mission, we have a very similar mission. So, yeah, we’re just going to keep taking it day by day.

Ashley:
And even better, I love Idaho. That would be my dream place to live out of all the places that I’ve been to.

Craig:
Yeah. We’ll definitely, come by and hang out.

Ashley:
Yeah, I’ll be in Boise and Coeur d’Alene in June.

Craig:
We are in Coeur d’Alene, so let me know, yeah.

Ashley:
That’s even better. That’s amazing there, so good for you.

Craig:
Yeah, yeah. Let’s at least grab lunch or you can come see the place, yeah. You can meet Grace.

Ashley:
Cool. Well, let’s give out a shout out to our rookie rock star, who is Jason Beckett this week, closed on units two, three, and four. He purchased a triple triplex in an incredibly hot and trendy Tremont neighborhood in Cleveland, and somehow managed to get it below asking with an FHA 203K loan. List price was $329,000. He got it for $290,000, out of pocket $15,200. The rehab was $70,000, which was built into the loan, which is part of the 203K loan. And his expected ARV is to be $400,000. And the rent potential is going to be between 1500 to 1650 per unit. So, congratulations, Jason, that’s awesome.

Ashley:
Well, Craig, where can everyone find out some more information about you and reach out to you besides showing up at your doorstep in Coeur d’Alene?

Craig:
Yeah. Well, you’re more than welcome to Instagram. I’m the Fi Guy. We have a podcast of our own, too, called Invest to Fi. And if you’re in Denver, you can always look at thefiteam.com as well. We’re always happy to help.

Ashley:
Well, Craig, thank you so much for joining us. We enjoyed having an expert on to talk about house hacking. I’m Ashley @Wealthfromrentals, he’s Tony @TonyJRobinson on Instagram, and we will be back on Saturday with a Rookie reply.

 

 

 

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2022-06-29 06:02:35

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7 Common Questions New Real Estate Investors Ask

Real estate can be one of the most profitable investments, but it’s also one of the most costly and complicated. Not only is a lot of money involved, but real estate tends to move in trends, for better or worse. When you decide to invest in real estate, you want to ensure that you choose a property that will pay off in the long run.

As an experienced investor, I’ve learned quite a bit along my journey. Friends and colleagues often approach me when considering investing in their first rental property.

In this article, I’m sharing the most common questions new real estate investors ask me.

Question #1: Is Now a Good Time to Invest?

Real estate is a tricky business. Knowing what’s in store for the market is extremely difficult, but there are a few key indicators to pay attention to that will give you an idea of which way the market is heading. 

Those indicators are: 

  • Interest rates 
  • Tax rates 
  • Local market trends 

In short, the answer is always yes. Now is a good time to invest. 

As long as you are thinking long term, any market fluctuations occurring today will typically not impact an investment property down the line. Looking at the last few decades of housing prices, you would see that home prices have consistently trended upwards.

FRED median sales price of homes
Median Sales Price of Homes Sold in the United States – St. Louis Federal Reserve

The exception to the rule is if you are looking for a short-term real estate investment or if there is a catastrophic change to the market in one way or another. It’s impossible to predict the future, but events like regulatory changes, war, or financial busts can all dramatically and suddenly impact the real estate market. 

Question #2: How Can I Get My Finances in Order?

Before purchasing any property, do the math and make sure it’s something you can afford. 

You should be looking at potential profit margins, mortgage rates, and the average rental rates for the market you’re investing in. Regularly monitor your credit score and work on actively improving it if necessary. Estimate maintenance and management costs, and see how they fit in with your expenses and income. 

Lastly, you should always plan for the unexpected. Build an emergency fund that you can dip into in case of property or personal emergencies that will keep you covered without rocking the financial boat. 

Question #3: Should I Invest Out of State?

If your local market isn’t offering the investment opportunities you want, you might consider buying a property outside of where you live. This strategy can be lucrative, but there are hurdles to watch for. 

Landlord-tenant laws vary from state to state and constantly change. You’ll also need to assemble a team to help you manage your property if you don’t plan on traveling regularly. That being said, looking for investment properties in what may be a more accessible market can provide fewer barriers to entry and help you diversify your portfolio.

So, it’s up to you to figure out if it makes sense.

Question #4: Should I Invest in Multiple Properties?

You might consider adding multiple properties to your real estate portfolio to generate income faster with larger profit margins. In addition to providing multiple streams of income, a larger real estate portfolio diversifies your risk and offers more tax benefits.

I recommend you consider paying down debt substantially on your first property before you jump into a second, third, fourth, or more. While this is a more conservative approach, it will protect you in case of a downward turn in the market. If you are confident you’ll bring in more profits than the interest on your current mortgage and ancillary expenses, you might be able to skip this step. 

Treat every new property as if it’s your only source of revenue. Research your options for securing additional financing, which will vary from conventional mortgages to private loans based on your financial situation.

Question #5: Should I Invest With a Partner?

Coming up with the initial capital to cover a down payment, realtor fees, closing costs, property taxes, home maintenance, and the like can be challenging. To save on costs, many people choose to invest with a partner who can share the finances and responsibilities of owning an investment property. 

If this is a path you’re considering, create a contract or written agreement before taking any official steps. Lay out clear expectations for each partner’s roles and responsibilities, break down each partner’s finances and outline how assets will be protected. 

Look for a partner who complements your skill set. If you excel on the administrative side, look for someone who thrives on repairs, renovations, and maintenance. 

Question #6: Is Turnkey the Way to Go?

Turnkey” generally refers to a property for sale already in move-in condition. Tenants might already occupy it, or it is ready for occupancy without requiring any updates or renovations. A turnkey property can be an excellent investment, as it usually provides quick cash flow without any upfront costs. 

I would recommend this, especially for new investors. While purchasing a fixer-upper can be a great way to save money on the purchase price, vacancies can quickly destroy your profit margins

Question #7: Should I Buy Properties with Tenants Already?

Sometimes the best rental properties are already rental properties. 

If you’re looking to invest in a property that has tenants, don’t make any final decisions until you understand the vetting process the current property owner went through. Please don’t assume that because tenants are living in the building, they are the right tenants for the property. Ask the current owner for as much information and documentation on the current tenants as possible. 

Ask what criteria they used to qualify the renters? What has their rent payment history been like? Are there any existing agreements in place that you need to know about?

Final Thoughts

Good investments require analysis. Setting unrealistic rates of return on real estate is one of the main reasons new investors lose money. Put in the work to understand the different types of rental properties and the different opportunities in your market. You might decide that one successful investment property is all you need, or you might find yourself searching for the next investment.

2022-06-28 18:07:00

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Key Things to Avoid After Applying for a Mortgage





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  • Avoid overspending when applying for mortgage
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2022-06-28 12:52:32

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How Being a Quitter Will Make You a Millionaire

Before you quit your job, you’ll need to do a few crucial things. If you haven’t done these yet, but are strongly considering leaving your job soon, Henry Washington and Rob Abasolo may advise you to wait it out a bit longer. Quitting your job is a big decision, especially if your family relies on the income that you’re bringing in. The good news is, that if you’re prepared, you can walk away making much more than you did at your W2. But, if you aren’t, you could simply be taking a breather in between jobs, instead of building a life you love and ruling your schedule.

Henry and Rob both have eerily similar quitting stories. They both quit during the same month of the same year, making the same salary all while building a real estate investment portfolio in the background. While Henry is more of a multifamily investing man, Rob has taken the short-term rental route to build his wealth. Both men have left the cushy healthcare-provided and retirement-matching lifestyles to build something much bigger not only for themselves but their families and employees.

If you’ve wondered “when should I quit my job” or “is now the right time to go full-time into real estate investing?” then this episode is a prerequisite for you. Henry and Rob go over the four things you need to know BEFORE you quit, things to be aware of as a full-time entrepreneur, how to handle taxes and healthcare, and some actionable tips for when you’re finally ready to take the plunge into full-time investing.

Rob:
Welcome to the BiggerPockets show, #628.

Henry:
Just keep in mind that if you’re on this path to quit your job, that you need to keep what you’re doing in focus and keep that scorecard, that running scorecard, like people say as an investor, you should keep your scorecard of your personal financial statement, right? So you track your net worth. I think you should also track your hourly rate. The more money you start to make from side hustles, the things you should continue to update that hourly rate and kind of keep that in front of you, so you can see where you might hit that threshold of like, all right, it might be time to start thinking about transitioning over from one to the other.

Rob:
The BiggerPockets Real Estate Podcast show is all about keeping you the art of investing in real estate and, hopefully, achieving financial freedom one day. Whatever that means for you, whether that means quitting your nine-to-five job or having an entire portfolio that sustains your lifestyle. We’re here to show you how to do that. And I’m joined here by my good friend and co-host, Henry Washington. How you doing, man?

Henry:
Boom. What’s up buddy? Glad to be on the microphone with you again. You’re like my unofficial twin. Our stories are so similar.

Rob:
Right, we are. We’re spirit animals.

Henry:
We basically look exactly the same, and so I don’t know how people don’t get us confused more often.

Rob:
I know, man. I know. Someone at the airport the other day was like, “Are you?” And I was like, “Yeah, Robuilt.” And they’re like, “No, Henry Washington.” And I was like, “No, why do people keep saying that.” What’s new with you, man?

Henry:
Hey man, life is fantastic. I am enjoying kind of growing and scaling my business. We kind of got to this kind of poop or get off the pot moment with my business. And so we’ve been growing and scaling and kind of taking this entrepreneurship to the next level. So it was fun to kind of get to talk to you about that whole journey on this episode.

Rob:
I know, man, this is, it’s very eerie because you and I have very similar stories. We both quit our job about a year ago, it sounds like. And yeah, a lot of things really lined up for us. So I’m excited to actually get into it because we’re going to be talking a lot. I mean, we’re going to be talking about our backstory, four things that you need to know before you quit your job, things that you should be aware of, like health insurance, people judging you, taxes, all that kind of stuff. And then we really wanted to end this episode, I think, with actionable tips for people that really are set on quitting their nine-to-five job, tangible things that they could do to kind of move towards that path. What were some of your favorite parts about today’s show?

Henry:
So I really enjoyed talking about some of the unsexy things with quitting your job that people don’t talk about, right? Everybody talks about all the fun stuff, right? Like you get all this time and then you can take that time and you can make a bunch more money and then you’re going to be this multimillionaire, and it’s super awesome. But people don’t tell you about some of the ugly stuff, some of the expensive stuff like taxes suck and so you need to be prepared for it. And yeah, health insurance is expensive and you need to have that as well. That was a well-timed cough, I like that. Health insurance, cough, cough.

Rob:
I know, I keep muting myself every time I cough. I’ve got this cough, man.

Henry:
Yeah. But, all these things are things people need to be aware of as they prepare for this part of their journey in their life. And so I love that we were able to touch on some of those things that people don’t talk about in 15-second videos on Instagram.

Rob:
Yeah, that’s right. We only talk about the good stuff in the 15 seconds, but not the bad. But yeah, before we jump into it, let’s jump into our quick tip, which is going to be brought to the audience by sir Henry Washington himself.

Henry:
Awesome. Yeah. So the quick tip for today is to go and check out the On The Market Podcast. On, On The Market, we focus on talking about actual current events happening in the real estate space and how it’s affecting our businesses, what we’re doing or what we’re not doing because of things. So we talk about things like inflation, higher interest rates and how that’s affecting the real estate space and what we may or may not be doing because of it. So go give us a listen. We’ve got myself, Kathy Feki, James Daynard and Jamil Damji, and it’s hosted by the-

Rob:
We were gushing over him a little bit.

Henry:
We were, I mean, there’s a little bit of a man crush on Jamil. Jamil’s…

Rob:
Look, the guy’s got good ads, all right.

Henry:
There’s those people who just do everything well and then, like that guy’s good at all the things, right?

Rob:
Yeah, he is.

Henry:
And then the data deli man, the data guy himself, Dave Meyer is the host of the show and it’s a ton of fun. So go give us some views, some likes, some comments and some shares.

Rob:
Awesome man. Well with that, let’s dive straight in. Hey man, you know what’s really crazy?

Henry:
What’s that?

Rob:
I have been a full-time real estate investor for just over a year, for about a year and three months or so.

Henry:
Hey Rob, you know what’s really crazy?

Rob:
What?

Henry:
I have been a full-time real estate investor for just over a year, like a year and three months or so.

Rob:
That’s right. I think we found this out not too long ago, that we both quit our full-time careers, our nine-to-fives, in April of last year, right, of 2021.

Henry:
Absolutely man.

Rob:
So I think what we want to really impart on the audience today is sort of our thought process, like our evolution, things that we went through and I don’t know, maybe some actionable tips on what you can actually do to bring you closer to actually quitting your nine-to-five job. How does that sound?

Henry:
That sounds amazing. That is a question I’ve been getting since before I even quit my job, is people asking me when they should quit, so let’s do it.

Rob:
Yeah, man. I mean, this is a really big topic and it’s something that I’ve actually talked about on the YouTube channel many times, because I just, honestly, I wish when I was quitting my job, there was content like this. I don’t think enough people really put stuff out there because a lot of people are very scared to, I don’t know, A, be vulnerable about how scary it is and there’s also the financial component, which is a little bit taboo. But I’ll be really upfront and say, I had a really good career. I’ve always loved the career that I was in.
I was a creative copywriter in the advertising industry and I worked my way up. And I was in the industry, I would say, seven or so years if you include internships and stuff. And I was making a $110,000 at my job, so it really, it wasn’t a bad gig, right? And when you combine that with my wife’s salary, I think she was a teacher in California, she was making like $75,000. So together, her and I were both making about $185,000, which, in California, obviously there’s some living expenses that go into it, but we were really comfortable. We didn’t have any reason to actually quit.

Henry:
Yeah, man. It’s super funny because I, similarly, was in a role that I truly enjoyed. I was actually working in the real estate industry. I was an asset manager for an apartment fund, and so I was getting an education in large-scale real estate and getting paid for it. I also was making a $110,000 a year and my wife-

Rob:
This is so weird, man. This is like crazy. It’s like everything lines up for both of us.

Henry:
My wife was making about 85,000 at the time. And so we were both very similar, both in careers that we liked and so it was a, making that decision was a struggle. And so I love being transparent and I love sharing with people the hows and whys of that we did it and hopefully there’s some gems people get from it.

Rob:
Yeah, totally. So is your wife still working now?

Henry:
No. We retired her two or three months after I retired.

Rob:
Oh wow. Okay, cool. Yeah. So my wife is also not working now, as well. I mean she wants to get back into it and we’ll talk about this in a little bit, which is like as beautiful as quitting your nine-to-five job is, I do want to make it known that Henry and I, we’re best-case scenarios. Things have really worked out for us. So this is not us saying, today’s the day you’re going to quit your job. You have to actually work for it. You have to earn your rite of passage here. And I think you and I kind of did. I mean, for me, I was making, again, $110,000 at my job and I had always been developing my Airbnb portfolio. And just by the way, just small caveat, I’m going to toss out numbers. I’m very financially transparent. I talk about this a lot on the YouTube channel. I don’t hold back on this just because I want people to really understand where I was coming from and I want to make it feel as approachable. I don’t want to hide anything.
So, this is not a flex or anything like that. All right. So with that, I’ve been working on my Airbnb portfolio for about four years at that time, and I had really built it up to the point where I was making about $25,000 a month in net, after all my partnership splits, after all bills and everything like that. That was my take-home. And on top of that, I also had started developing all these other sides of income. All these income streams, like side hustles, if you will. And when I started to add everything together, I just started to sort of realize that I was actually making a lot more money with the other stuff. I don’t know about you, but for me, I was like, oh, at the very least I was breaking even.

Henry:
Yeah, no, it was very similar for me, and so I kept my job as long as humanly possible. A, not only because I enjoyed it, but you do the Airbnb strategy, I’m more of a long-term buy-and-hold guy. And I love using small local banks. And one thing banks love is a good old nine-to-five.

Rob:
They [inaudible 00:09:20].

Henry:
They want to see that nine-to-five. Right. They want to see that nine-to-five income, and so I knew keeping my job was going to help me continue to be bankable. And so that was always on the back of my mind. And so there was some strategery, if you will, around.

Rob:
I will.

Henry:
Around how long I kept the job because the strategery there was I wanted my LLC to have been profitable for at least two years, so that I could at least show that I’ve had the profitable income in the LLC business. So that if and when I did decide to leave my job, that I had that track record and provide them that level of comfortability.

Rob:
Oh, that’s actually, that’s a really, hey, you got to, you’re supposed to save that till the very end, when we get into the actionable tips, but there’s a very good one. So, I guess, I’ll tell you a little bit about my story and maybe you can tell me about yours. But I was making really good income and I calculated it out. And I was just realized that while I was making, I guess, 110 divided by 12, about $9,000 a month in that job, I was making like 35, 40,000 when you added up all of my side hustles. And I just realized, I was like, oh my gosh, I can’t possibly make more money with all of my side hustles in my real estate business until I get my time back and my 40 hours a week. And so I was just so scared.
And that one thing that was really holding me back was, well, I guess, all right, let me backtrack. So I had been telling my wife for a bit and she was like, “Just do it, dude.” I’m like, “I can’t.” And so I remember I set up a Zoom meeting with my bosses and, because this was during the pandemic, and I was going to quit. And so as soon as they both got on, one boss was trying to make small talk and he was like, he could just tell that something was wrong. And then the other boss finally joined. And then I was like, “Okay, I brought you here.” And they’re like, “Oh my God, are you okay?” And I was like, “I’m sorry, I need a second.” And so I was crying because, and by the way, every time I’ve ever quit a job, I always cry, but this cry was special because I was so scared.
And they were like, “Oh my God, is everything okay?” And I was like, “Yeah.” And they’re like, “Okay, well, what’s up?” And I was like, “I got to quit.” And they’re like, “Oh, thank God, you’re fine. You’re just quitting.” And I was like, “Yeah.” And they were like, “Are you going to be okay? Like financially?” Because, obviously, I was crying. And I was like, “Yeah, I make way more money doing everything else.” And they’re like, “Dude, you’re going to be fine. Obviously you were going to quit. We don’t even know why you’re still here. Should have quit a long time ago. We’ve been watching your channel. We know you make more money doing this.” They’re very reassuring. And so I remember after I wiped all the tears away and I said, “Thank you guys, y’all were the best bosses I ever had.” I closed my laptop and I was like, this is the greatest relief I’ve ever had. And I was a new man. I really was. It was a crazy feeling.

Henry:
Yeah. Dude, our stories are so similar. It is uncanny, because I had a similar experience by, so I knew it was time to go. And well, I thought, I figured I should start figuring out if it was time to go because I had my boss who, again, we’re talking full transparency, right? And so my boss reached out to me and was like, “Hey bud, I think you need to be putting in a little more effort than you are.” I had dropped a ball on something and so I kind of got called out and then I kind of took it personal. I was like, because I do a good job at my job, I felt like. And so I took it personal.
And then when I took a step back and I took my emotions out of it and looked at what he was saying, I’m like, yeah, well, that’s probably fair, right? But him saying, “Hey, I need you to put in more effort,” triggered me to start thinking now that I had all this other income coming in, does it make sense for me to give you that effort or should I give it to myself? And that’s when I started to do the math and before I even started to do the math, I similarly went to my wife and she was like, “Yeah, just quit.” And I was like, uh.

Rob:
That’s what they always say. They’re like, just quit.

Henry:
How are you so cool with that decision?

Rob:
I know.

Henry:
And so, yeah. And so I did the math and after doing the math, I basically just broke it down to what is my time on my own, what am I making an hour, essentially, versus what am I making an hour giving my company more time that I was working for. And it wasn’t even close Rob. And that’s when I knew, I was like, I hear that you want more of my time, but it’s literally going to cost me money. And so I had the same meeting with my two bosses and I told them that, “Hey, I’m going to go out on my own and continue this real estate path.” And they were like, “Well, yeah, you should do that.” Right.

Rob:
It is so obvious. I mean, if you’re to the point where you’re quitting to become… If you’re working in real estate, like you for example, they know that you’re making… They know that you’re doing Multifamily, they’re probably watching the journey. It’s like, I have a YouTube channel. I talk about finances very in depth. And I know everyone at my job was like, “I don’t understand why you’re here.” And I’m like, “Neither do I, honestly.” It was my goal to, exactly what you’re saying, which is like be a terrible employee and I think that in a very, I say that in like, with perspective now, because it’s like it was a solid income and I was like, “Well, if I get fired, I’ll get severance, but I’m just going to hold onto this security while I build all this other stuff.” And the one thing I had going for me is I had a good rapport with my bosses, liked all my team and all that stuff. So even when I was sucking at my job, they were like, “Well, we still like it. It’s all good.”

Henry:
Right.

Rob:
So I’m very thankful for that. But I think for us to have gotten here and for anyone who wants to quit their nine-to-five job, I think that there are really like four things that are needed to quit your job. And obviously, I’m sure we could spit out like 10 different things. But I wanted to talk about a few of these things because for me, first and foremost and I think we’re on the same page here, spousal approval, right? We need to, the wives need to be on board. Would you agree with that?

Henry:
100%. This is not a marriage counseling episode, but I promise you, your life will be exponentially better.

Rob:
Yeah.

Henry:
If you get that spousal approval. 100%. Now, and I get it, right? Some people it’s going to be more of a challenge than others, right? Some people’s spouses are already bought in and some aren’t. I was fortunate enough that my wife was all in from day one. And so that eased the entire investing journey for me. And so I, literally, wouldn’t be sitting here talking to you if she hadn’t been on board. And I’ve had people say, “Well, how do I get my wife on board?” Right. “What’s the practical application for that.” And no one can tell you how best to talk to your spouse, but it’s your spouse, so you probably know the best way to communicate to them, right?
You probably know. Everybody wants in any conversation where you’re talking about needs, there’s always an element of what’s in it for me, right? And so think about how your spouse likes to be best communicated with and the what’s in it for me and you have the conversation, and sometimes you’ll have to have more than one in different ways. But don’t get discouraged, if you have the very first conversation and it gets shot down. That happens for a lot of people. It doesn’t mean that you can’t continue to work that.

Rob:
And several times too.

Henry:
Absolutely.

Rob:
It’s not just, yeah. And I think that’s okay. I mean, I think here’s a good and bad thing about any marriage, which is like, if you have a good partner, they should be keeping you accountable and they shouldn’t just be a yes-man or yes-woman, right? If you give them an idea, if they’re supportive most of the time, they’re going to say yes, but if it’s a crazy idea, it’s their job to be like, “Hey, that’s a little crazy. We should talk about this.” And there’s nothing wrong with that. I think there is a really pivotal moment for my wife and I, we were on the couch during the pandemic and I was like, “What if we quit our jobs and move to Tennessee and built a tiny house village.” And she was like, “That’s crazy.” And I was like, “I know.”
But at that moment it was nighttime, we were sitting on the couch, we had just had my daughter and she was asleep in my wife’s arms, and I was like, “But isn’t it crazier to work a nine-to-five job and not see our kid every single day for as much as humanly possible?” And she was like, “Yeah, I guess if you put it that way, it kind of is.” And again, if you work in a nine-to-five job, there’s nothing wrong with that. But for our situation, I think it was just like, for me, I was like, “We can do this.” And we had that talk many times. So we got to the point, this kind of move into the next, the second thing that you need, which is side hustle income. But it got to the point with my side hustles, I was really developing stuff outside of real estate, too.
I think if you’re looking to get out of your nine-to-five, you’re not just trying to match your salary, you’re actually trying to make more. You’re trying to make more because now you’re a 1099, effectively. You’re self-employed. You no longer have your health insurance. You no longer have your 401k match. It’s expensive to just match what you were getting at your company. And so I was really growing all these side hustles. For me, that was content creation. For me, that was, I think, oh, I started consulting as a result of my YouTube channel, and I started charging a $150 an hour. And it turned out that, got booked a couple times a week. And then the next week I was fully booked out, and to the point where I was booked out a month in advance. And I kept raising rates to the point where it was like many hundred dollars, I don’t remember, I think like $500 an hour.
And I was doing that four times a day on top of my full-time job. And I was just mathing it out, and I was like, “I can’t consult more unless I quit my job.” And so it was so obvious because my wife was watching me work 80-, 90-hour weeks, and she was like, “You can’t keep doing this to yourself and you make way more money doing the thing that you love. I think it’s time.” And so I think side hustle income, whatever that means for you, for me, again, that it’s, we’ll get into that a little bit later too. But I think developing a financial system around making money, that’s not your W-2, because at the end of the day, if your goal is to become a millionaire, for example, most millionaires have seven or eight streams of income, and I took that to heart. So I was always chipping away about that. What about you? Do you have any side hustles that you don’t talk about often?

Henry:
Oh, man. Yeah, absolutely man. Again, very similar. I think you did something with furniture at some point, right? And so for me, I used to buy stuff at auctions, like pennies on the dollar, like Amazon returns and Target, Walmart returns. So I would go bid on these things at auction, get them for pennies on the dollar, and then I would sell them on Facebook marketplace and Craigslist to make some extra money. And so like, that was kind of how this side hustle thing became a reality for me. Like, oh wait, you can actually generate some legitimate money just by spending a few extra hours doing something. So that was my proof of concept that side hustles work. And then that transformed, as I got into real estate, into consulting. So I very similarly, I was charging a hundred to a 150 bucks an hour and I was getting booked up.
And as I was doing that, I was enjoying the calls man. And my wife, she saw me one time after a call and I looked bummed and she was like, “Hey man, why are you bummed?” And I was like, “Well, I just keep answering the same questions over and over again.” And she was like, “Well, why don’t you just make something that you can put out there that people can just check out.” And so that’s what got me started on the path to creating courses of some kind. I didn’t know there were courses at the time. I just wanted to save myself some time and allow myself to help more people because, you mentioned it, your calendar would get booked up, right? You can only help as many people as hours you have in the day, right? And so once I got on BiggerPockets as a guest, it obviously drew more eyeballs to my page and the amount of people that I could help, it was harder.
It was harder to help more people. When you only have a thousand followers, if 10 people want to have a call over the course of a few months, you can figure that out, but as that grows, it gets harder. And so I put this content out there and it started to make a little bit of money and that’s when I started to really look at, hey, this is something that if I can provide value in the right way for people and then provide the scalability, I can have the income, potentially, to quit my job. And so that’s how the side hustle thing kind of evolved for me. And then once that income grew to a point where, hourly, I was going to be able to make more for myself than my company, that’s how I knew I was going to be able to quit. So 100%, it was like this side hustle evolution for me.

Rob:
Yeah. Definitely. I mean, man, dude, I used to answer the same question every single day and I loved doing it because I genuinely helped people, but it is hard. And I think it was sort of a trap too. With real estate, if you read Rich Dad Poor Dad, we start to, the thing is you can’t sell your time for money. So I always quit my job because I was like, “Oh, well, I’ll get my time back, and I’ll be able to consult for four hours a day and make way more than I was at my job.” But then I realized I was just selling time.

Henry:
Yep.

Rob:
I was just selling my time. And so even at $500 an hour or whatever, even if I was booked out a year in advance at 40 hours a week, which I would never recommend to anybody’s vocal chords, that’s, I don’t know, I think a million dollars a year, which is a lot of money, but that is it. That is the most I can make.

Henry:
Right.

Rob:
And so I quickly realized that too. And so it’s like it ignited this fire to keep chipping away at this real estate fire that I had. So that kind actually brings us to step, the third thing that you need to quit your nine-to-five, which is proof of concept. We had our side hustles, we had the spousal approval, but proof of concept just means I’ve done it. I had done the Airbnb thing. I was good at it. I was really good at it. And people saw that I was good at it. And they were offering to partner with me and they were offering to give me their money to go and buy a property and split it 50/50. I was doing that with several partners. And for me it’s like, okay, if I could do this on the side, then certainly I could probably do it full-time too. I mean, that kind of was at your trajectory too, I assume it’s, based on the rest of the conversation, is probably the same exact thought.

Henry:
Right. Absolutely. Yeah, man. It 100% was like that for me because as I was starting to think through, all right, what’s it look like if I quit because there’s obviously a fear factor, even though you’ve got a proof of concept. I knew I could always find under-market value properties, add value to them and rent them out for profits or sell them for profits. I had that down, and still when it came time to actually pull the trigger and quit, there was some apprehension. And what helped me kind of, one of the things that helped me get over that apprehension was to think about like, hey, I’ve been able to build this real estate portfolio part-time on the side while working a full-time day job and doing side hustles and I’ve still been able to build this portfolio.
If I just take the same amount of effort that I’ve put in, but now I give myself 40 hours a week to continue to put that effort in, I’m naturally going to be able to scale that at a higher rate without putting in any more effort. The level of effort stays the same, you just have more hours to focus that effort on. And so when I thought about it from that perspective, I was like, oh, well, of course I’ll be able, I’ll be just fine, right? And so 100% I felt the same way.

Rob:
Yeah, for sure. And I mean, last one here, we’ll touch on this. And this is really going to just depend on, really, your financial situation. But last thing you need out of the four things before you quit, again, there’s probably a lot more than four but for the sake of a nice, concise little crunchy podcast here, reserves. You want to have some money set aside because, I think it’s not necessarily advisable to say, “Hey, I was making 110, but why not? I’ll quit. I’ll figure it out.” If you don’t have your systems and your income stream set, it’s going to probably be a bad decision.
So I can’t really advise you on that. And again, Henry and I aren’t, well, this is the first time I’m saying it. I say again as if I’ve mentioned this before, but I always do that. I’m always like again, and it’s like, well, what do you mean again? You never even said it the first time. We’re not financial advisors. All right. So none of this is financial advice, but I think the good rule of thumb here is if you can have like six months of reserves to kind of cover you and your bills, that’s always going to be a safe way to go.

Henry:
Yep. I totally agree. And we thought a little non-traditionally about the reserves because, again, that fear factor was setting in as it got closer and closer for me to actually have the conversation to quit. I was like, “Well, how are we going to find this money?” And so what we decided to do was just take the profits of a flip that we had coming up, that we were going to close, and instead of putting that money in our business account, which we would normally do, and the other benefit we’re not talking about is, Rob and I also developed the side hustles so that we wouldn’t have to touch our real estate business money.

Rob:
Oh, yeah.

Henry:
So that we could keep reinvesting that, right? And so, because we made that smart decision of not using that money, when I got to a point where I was ready to quit, I just said, you know what, I’ll take the income from this flip that I’m going to make, and that happened to be about what my wife’s yearly salary was, and I threw that in an account just away from everything else, just as a safety cushion for me to know like, hey, I have 12 months of my wife’s income right here. And so if things don’t work out, I know I’ve got this cushion and we been living off that cushion for years now. So it’s there. It made me feel safer. It made it easier to take the leap. We actually didn’t have to end up touching any of it, but just having that reserve there and knowing that it’s there, gave me the confidence to really put my all into entrepreneurship.

Rob:
Yeah, for sure. And there’s something that you sort of touched on, which is really great, because I want to talk about the things that you need to be aware of before you quit. And you were sort of talking about that 40-hour work week, and now that you could focus on that full-time. But I sort of want to talk about the, I don’t want to say the not so glamorous part of the nine-to-five, because it’s a net positive, I will say that, but things that you should be aware of. And I think, we think, oh, okay, we’re going to give away or we’re going to get back 40 hours of our week and it’s going to be great. We’re going to have so much time. But the idea of work-life balance is, I’m not going to say a myth but it’s, basically, it’s non-existent, right? There’s that old adage that’s like entrepreneurs will not work 40 hours for someone else so that they can work 80 hours for themselves.

Henry:
Right.

Rob:
That’s really true. I mean, I work a lot more than I did, because at my nine-to-five job, as I said, I was a terrible employee. I was trying to milk that cow for as long as I could. And what I really quickly realized is I was really giving about 10, maybe 15 hours of my actual time and effort to my job, which I think most people realize during the pandemic, they’re like, “Oh, I don’t need to work 40 hours.” And so I thought, oh, I was going to get 40 hours back, really I got 10 or 15 back.

Henry:
Right.

Rob:
And it just turned into this whole thing where now I’m working 70-, 80-, 90-hour weeks often. Not as much now, thank goodness. I’m figuring that out. But for the very first year, quitting my job, my focus was to make money and I succeeded. I was able to more than 10x it. And it was a really crazy time for me just because I was just going so freaking fast and furious. And yeah, I mean I think the nine-to-five job, I kind of miss it in a sense because it kept me to 40 hours and now I work a lot more. I don’t know about you.

Henry:
Oh, dude. Yeah, absolutely. That smacked us in the face when we quit, because there’s also this thing that we don’t think about, this added pressure now of you’ve got to go produce because you don’t have that salaried income coming in every month, no matter if you produce in your real estate business or not. And so there’s this pressure to go produce, plus you’re an entrepreneur, you enjoy what you do. And so you just end up cranking extra hours. And I really had to have a sit-down with my wife to talk about how do we establish some boundaries and what expectations do you have for me in entrepreneurship versus when I was working a salaried position, right? And I wanted to have those conversations. So I knew on the front side kind of what she wanted for me and how she wanted me to spend the time and we could have that kind of a conversation, because now you’ve got this added layer of entrepreneurship and pandemic life, and so there was a ton of time at home.
And so you really had to draw that hard line in the sand of when you call it quits and go focus on family and kids and those kinds of things. And so it was a lot in that first month or so but luckily, again, I have an amazing wife and we had that sit-down and we’re able to draw some boundaries. And I’m not perfect with them, but we’re getting better. And so now I come to an office, I moved everything from home to an office, so that I give myself those boundaries physically. I have to get up, get ready, physically go to work, physically take my laptop, physically take my laptop home. And so you’re mentally saying I am taking my laptop home, right? Which means you are planning to go do some work versus leaving it at work. And so that physical office has also provided us some boundaries.

Rob:
Yeah. It’s hard. It’s really tough. I mean, because especially in our first, in our house in LA, when we were doing this, because my wife was like, “You’re right there. Why can’t you help me? The kid is crying or you got to change the diaper.” And I’m like, “I’m sorry.” I know that I’m here, but I’m also like I’m drowning. And there was a lot of those moments where we had to have heart-to-hearts where it’s like, look, it’s not that I don’t want to be around, but it’s like at my work I could mess around and still get paid. And if I don’t work, we don’t make money. And I was way too just in my head about it.
And I think, other things that were really tough for me was like healthcare. Part of the story I didn’t talk about was when I was crying and they were like, “Are you going to be okay, financially?” And I was like, “Yeah, I make way more money.” My bosses were like, “Then what’s the deal?” And I was like, “Healthcare, it’s expensive.” And I was over here getting in my head about $2,000 a month of healthcare, when I was making, I don’t know, at that point like $35,000 a month with everything together. And so healthcare is expensive and that’s something that you have to think about.

Henry:
Yes.

Rob:
And there are a bunch of different options. You’re no longer getting your 401k match. Qualifying for a mortgage is really tough when you’re self-employed, like you said. I make significantly more money than I’ve ever made and a bank still won’t give me a loan because I look poor on paper and it’s really annoying. Now after I get my taxes season, this is my second year of making income like this, I’ll finally be able to count it and finally buy a house without having to jump through so many hoops. But it’s really tough.
So I think, if you’re in this world where you want to become a real estate investor, close on those houses first. I closed on a house and literally as soon as I closed on that house, I quit the next week because I was like, all right, that was it. I did it. So, yeah, qualifying, I think, I don’t know if you had any judgment in your life when you told people that you’re quitting, but I did. I had people that, as supportive as most people were, I had some people that were like, “That’s crazy.” And I’m like, “I think you’re the crazy one. You rely on one income at your job.”

Henry:
Right.

Rob:
I was like, that’s crazy to me. And I was just getting defensive because I was like, “Why not just support me?” That, it hurts. And it was family, at first, because it’s just, no one in my family has ever done this before, and so it’s so weird to them that I would leave a six-figure job.

Henry:
Yeah.

Rob:
And what they didn’t understand was that like kind of what I was working on in the background. So yeah, did you have any judgment in your life or was it relatively smooth sailing for you?

Henry:
Oh, dude, absolutely. It’s been throughout the whole journey. And yes, absolutely, a lot of the judgment, for lack of a better term, will come from your friends and family, the people closest to you because they know you before, they know you as the guy that didn’t do any of it, right? If you’re just getting started on this entrepreneurial journey, right, they don’t know that you, that part of you, they see the old you. And so as you start doing these things that seem crazy, right? You get some judgment and sometimes that judgment comes from a good place. Sometimes it’s, “Hey, this is risky. I love you. I want you to be able to pay your bills and I want you to take a safe path.” And sometimes that judgment is, “Hey, I don’t want you to be doing better than I am.” Right?
And so you can piece together who’s being judgy for what reasons, but absolutely. And just remember folks, this journey that you’re on, this vision that you’ve been given is for you, it’s for you to act on, it’s been given to you. It’s that nobody else has to understand it for you to be successful in your journey. And so don’t let that hold you back. There’s a reason that being a trailblazer is painful. You’re the one going down the path first, you’re cutting down all of the obstacles and barriers that are in the way. And so you’re going to get the nicks and the cuts and the things that come with being the leader. You’re going down a path, maybe people in your family haven’t gone down before.
And so yeah, that judgment is just part of those nicks and cuts and things that you’re going to have to endure as you start to blaze a new trail for people in your family, behind you. It’s a blessing that, that’s something that you get to do. And so don’t see it as a negative. See it as like, I am creating this new path of wealth that other people in my family, behind me, get to go down, and I’m okay taking the brunt of the judgment and the nicks and the bruises so that I can make the lives of people behind me and my family better. I love it.

Rob:
Yeah. Let me just be clear. You are crazy too. When people say you’re crazy, it’s like, “Yeah, you’re right. I am.” Embrace it. Embrace the craziness because I think that’s what’s going to set you apart. I really actually liken this. I used to have like the, like when I bought my house in LA in 2016, I actually had family members that were like, “You’re crazy.” Indirect family members are like, “You’re crazy. You’re buying at the top of the market. We’re in a housing bubble.” And I was like, “Well, I’m still going to do it because I want to buy a house and no one’s going to stop me.”
And fast forward to five years later and my house has doubled in value from 624,000 to 1.2, 5 million dollars. They still don’t own a house. And funny enough, they’re looking to buy a house now. If it wasn’t the top of the market then, you could probably argue that you’re pretty close now. So I think you just got to take action and not worry about what other people think. You know what I mean? And I think that’s kind of how the nine-to-five thing is like, quit your job. Don’t worry what they have to say. Just do it and figure it out, because at the end of the day, if you’re the one that’s right, that’s all that matters.

Henry:
Absolutely.

Rob:
So I’m kind of curious, man. What changes actually happened when you became a full-time real estate investor? Did your investment strategy change or are you doing the exact same thing?

Henry:
Yeah. So from an investment standpoint, we’re pretty much doing the exact same thing, the difference is I have more room to grow and scale that because of the time I got back. And then I can also, the one thing that is changing now is we’re adding people to the team so that I can start to grow and scale the business without me having to put in all the actual work myself. And so that was more difficult before, because there was so much focus on me having to do my nine-to-five and do that the proper way to be able to think about hiring people and making enough income to hire people in my business was a challenge.
And so now that we are producing the income that we need, I’m realizing that I quit my job, that bought me some hours. What if I could pay somebody to buy their eight hours a day, right? And so the more people you bring on the more hours you’re adding to your business and you can get an exponential return. And so we’ve just hired our first person, which is actually my content manager, and we’re actually looking to bring on an acquisitions manager next to help with the acquiring properties.

Rob:
Yeah. So I’m curious because I’m sort of at that point now, I have my team consists of my assistant, who’s effectively like my property manager and everything, social media manager and community manager. And then I’ve got my business partner, he basically executes the whole real estate side of my business. I mean, obviously, I’m still involved from a higher-up level, but the day-to-day he’s doing that. And I’m at this point now where it is time to build a team. So I don’t know, what’s your thought process on, because obviously I’m cheap and I think most real estate investors are, so.

Henry:
Same, bro.

Rob:
Curious like, what are your thoughts on sacrifices of payroll versus getting your time back? Because, obviously, paying people is expensive unless you’re not paying them and you’re giving them equity, which is a lot more pay in the future.

Henry:
A lot more expensive too, right?

Rob:
Yeah, exactly. For sure.

Henry:
Yeah. So, for me, my thought process around hiring people has been around two areas. So high dollar activities, right, that take a lot of time. And so if something produces me a lot of income and takes a lot of my time, I’m going to look at it as is this something that makes sense for me to hire someone to do? The other thing that I’m looking at is, essentially, marketing, right? What is driving more business for me? And so my content manager is essentially part of my marketing budget because we all know social media is less about social media and more about marketing. It’s getting eyeballs to you. And so I wanted to take the things that are going to be the highest impact to the bottom line and take the most amount of time, and see if it makes sense for me to bring somebody in to do those activities.
What I call relentlessly consistent, because I think relentless consistency is what truly builds businesses, right? It’s the ones who are consistent no matter what’s happening. And so right now, those two activities, like I said, for me, are content and keeping the content flowing, as well as keeping the marketing for deals and the acquiring of those deals going, because those two things are going to generate the most amount of income. And if I can have somebody else’s time to do those things, then I can use the time that I have in my brain to think of more income generating activities and get involved in more things than we’re involved in now.

Rob:
Yeah. So quick tip, mid episode quick tip here. Mid episode, quick tip. We just released an episode with Brandon Turner and we talked about all things personal brand and building content and everything like that. So if you want to learn more about content creation and how you can utilize that in your real estate business, definitely be sure to tune in on that. But yeah, man, that makes a lot of sense. I think, you’re a much better influencer than me, I really, I hate saying that, but I just, I can really do one YouTube video every single week and that’s it. I’m like, it takes so much of my time and effort to do one YouTube video right. If anyone’s ever seen it, there’s a lot that goes into it. There’s a lot of editing. I don’t even do the editing, my editor does, who is like the foundation of my marriage because he saves me so much time.
But really, it’s hard. And so I try to put stuff out on Instagram too and everything, but I just can’t do it every day. And I know that you’re right. Putting yourself out there, getting those eyeballs out there, is really important. I know that Pineda and guys like that, I think he spends like, I don’t know, I want to say like 40 grand a month on content creation.

Henry:
I believe it.

Rob:
And I spend about, I don’t know, five, $6,000 on content creation. So I’m actually in that phase now where it’s like, okay, if I want a 10x, do I go and spend 50K a month doing this? And it’s really hard because it’s like such a seemingly vain thing to spend my money on, but I know that it’s like the, I don’t want to get into content creator conundrums, but I know that it can help people more if [inaudible 00:43:13].

Henry:
First world problems.

Rob:
Yeah, exactly.

Henry:
Yeah.

Rob:
So on the acquisition side though, moving back to that, how do you even figure out how to compensate someone like that?

Henry:
That’s a phenomenal question, because we’re looking at all of those strategies right now. And so some of the things I’m thinking about are do you just pay somebody a flat salary, and flat salaries are awesome because it’s stability, but is it motivating enough for someone to continually go out there, make offers, talk to sellers and kind of grow and scale from that level? We’re also toying with the idea of leveraging the eyeballs on social media to bring in somebody who already maybe like, knows and trusts you from your brand and may be good at sales and talking to people and then maybe bring them on as an intern to see how they do and then pay them per deal that they bring down. And so there’s tons of different strategies. And I, honestly I’d be lying to you if I told you I knew which one was the right way to go.

Rob:
I mean, they’re all right. It’s whatever’s right for you.

Henry:
But my gut is telling me that I want to pay somebody based on the deals that they close, and so there’s probably some level of both, where you get some kind of a base but that pay can increase drastically, the more deals that you close.

Rob:
Yeah. Well, look, I’m really in line with it. This is where I’m at in my business because things are going really well as is. And right now I’m at, I think, 15 or 16 short-term rentals, we’re currently negotiating a hotel deal, which is 20 doors. That’ll double my portfolio, effectively, overnight. I’m raising a couple of things. I’m raising a fund where I’m building 20 houses in Joshua Tree with Tony Robinson, Real Estate Rookie. If you guys haven’t listened to that, awesome podcast as well. All in the family. And then I have another fund with Superhost Labs, where the goal is to start raising a lot of money to go and acquire a hundred properties. And I’ve got another investor that we’re working with, who wants us to help him scale up to a hundred homes.
So we’re moving, and I’m like, okay, we have faked it for a long time in that, like fake it till you make it, right. And I’m what I mean is, obviously we’re really good at this and we’re doing it, but it’s like, we were good at doing the single family acquisitions, one at a time. But now to go from one acquisition to acquisition is becoming a really big drain on our time. And so we’re quickly realizing we got to go for like 20, 30, 40 door deals or syndications where we can have a lot more money. The returns don’t have to be 50%, they can be 10%. And then we can just start buying a bunch of short-term rentals around the country. So, for me, as I scale, I understand how to get there but the building the team is very crucial because one thing that has changed for me in a very significant way, obviously I assume this is for you too, but my time is a lot more valuable. You know what I mean?
I hate even saying my hourly rate, so I’m not going to say it, but it’s very expensive. And when you start to scale and when you start to understand that your hourly rate is very high, then it doesn’t make sense for you to go out and buy a two bedroom, one bath Airbnb, you got to go buy 20 of them or build 20 of them. You know what I mean?

Henry:
Yeah.

Rob:
So for me, I think scaling in my business means I’m now evaluating deals based on if they are seven-figure deals or not. So if something is not a seven-figure opportunity for me, I just, it costs me money to pursue it.

Henry:
Yep. It’s the same. It’s like the same analysis you put into quitting your job, right? You have to sit back and think about what’s the best use of the time that I have available. What’s the best return on that. And if it’s not going to provide me what I feel like is what I need for my time, then it doesn’t make sense, right? And so I totally understand that. Yeah, we’re at a place where our normal operations, as far as acquiring properties, is the same but we’ve been focusing a whole lot more on holding multi-family. And for a very similar reason, because I can find single-family homes all day, but they don’t provide the return on investment that the multis do. And so our strategy shifted from buying and holding everything to, we’re going to dispo the singles, build the capital and we’re keeping multis, and heavily looking for more multis. So 100%, I get it.

Rob:
Yeah, man. And I think obviously the big benefit here of scaling, like a big benefit, if you’re doing this right and you’re actually making money doing this, even if it’s 25, 35, kind of where we were at, or let’s say that you’re to the level where I am, where I’ve 10x my income, and taxes, taxes suck, right? So scaling is so important because you’re going to be able to lock down a lot more real estate and wipe out those taxes. I’ve really gone down a huge rabbit hole on taxes because I hate paying them now. Before I was like to pay Caesar onto Caesar, what is his? And now I’m like, oh, I got to pay like hundreds of thousands of dollars.

Henry:
Oh, dude. I met with my accountant yesterday and it was a very painful meeting. Oh, boy. Yes, taxes. Think about that before you go down this path, because, boy, making money is expensive.

Rob:
Yeah. But someone told me this and I try to, it was cheesy when he said it, but it’s so true. He said, “Paying taxes is a good thing, because if you’re paying taxes, that means you made money.” So as much as I want to complain about spending hundreds of thousands of dollars on taxes, I’m like, okay, but the plus side is I made the money that is getting me to pay that tax bill. So with that said though, I figured out, basically, how to wipe out taxes. And it said, yeah, it’s acquiring luxury real estate. Me and David Green just did a deal. We bought a 3.2, 5 million dollar house in Scottsdale. I’m doing these syndications. I’m, hopefully, really going to buy millions of dollars of real estate this year. And when we do cost aggregation and bonus depreciation and all that stuff, it should knock my tax bill down, I’m not going to say a hundred percent because I actually do want to show an income on my taxes, so I can buy a house like we talked about, but it’ll be significant.

Henry:
Yeah, man, 100%. I was recently recording an episode of On The Market and where we were all doing some deal analysis and you’ll be proud of me, Rob, the deal I brought to the table was the first property that I’m buying, specifically as an Airbnb, so I’ve never-

Rob:
Oh man, proud dad over here.

Henry:
I’ve never bought one with the purpose of me buying it to be an Airbnb. Now I have two Airbnbs, but it’s a duplex that I had, a long-term, that I converted. And so this is my first actual Airbnb purchase, so that’s the deal I brought to the table. But Jamil brought a deal to the table where he talked about an apartment building that he got a great deal on. And Jamil, by nature, he’s a deal-maker. He likes to flip stuff. He likes to buy it low, sell it high, right? It’s in his-

Rob:
He’s a everything guy, man.

Henry:
Dude, he’s a rockstar.

Rob:
He’s like a freaking hilarious guy. His ads are, I mean, I’m an ad guy and my ad should be good, and like his ads are like insane. He does funny parodies of lawyer commercials, and oh my gosh, that guy. Yeah. If you guys haven’t listened to the On The Market podcast, go, do yourself a favor because yeah, that guy, well, you guys both, but Jamil, we’re talking about him right now, Henry, don’t be selfish. Jamil’s awesome.

Henry:
Yeah, man. And so he was talking about buying this apartment complex and he could make 1.2 million on an assignment fee if he assigned that contract.

Rob:
Wow.

Henry:
But he also talked about, he just had to pay $800,000 in taxes. And so the benefit to him buying this property, wasn’t the cash flow it was going to produce. Right. It wasn’t the appreciation. It was the, I need a tax shelter, I need something that’s going to help me to reduce that tax bill. And so real estate, yes, making money is expensive but the awesome part about real estate is if you buy the right assets, right? If you use the skills that you’ve developed to grow and scale your business to where it is now, and then strategically buy the right assets, you can use those assets to kind of help offset that tax bill, just like you said, with acquiring the millions of dollars of Airbnb properties, because it’s going to do that for you.

Rob:
Yeah. I mean, so this, look, if you want to quit your nine-to-five job, obviously there’s a lot that we’ve covered here, but I think one of the biggest watch-outs is you have to understand how taxes are going to work and how they change because you’ve been making money passively in real estate, and if you can qualify as a real estate professional, I believe that changes to active. I’m not a CPA, but it changes things for you. And the benefits are astounding, if you just nerd-out about it. So many people always say that taxes are boring and they’re like, “Oh yeah, they’re boring.” And I’m like, “No, they’re not.” It’s actually a very exciting game because it’s making money. If you do it correctly, making taxes is making money.
So last kind of section here is going to be actionable tips. And I really just want to get into this. I want to leave people with just things that they should do. Things that you can tangibly do today that will set you up for quitting your nine-to-five job. All right. So for me, this was a really big thing for me. It was very impactful. I call this talking to other quitters. The term quitter’s always a bad thing, but it’s actually a great thing when you’re in this position.

Henry:
Right.

Rob:
I remember I Zoomed with a lot of founders of companies, people who had like 7-, 8-, 9-figure exits, CEOs, just I’ve met a lot of cool people in my real estate career. And because of YouTube, it’s just, it’s opened up the door for me. But one thing was in common when I spoke to all of these guys and they were all like, “Why are you still working your job?” They were like, I see, I watch your YouTube channel. You talk about how much you make. You’re charging me this much for a consultation. I don’t understand why you’re still working.
And they just, after hearing that so many times in the span of a couple months, I was just like, okay, these guys obviously have figured it out and they obviously believe in me more than I believe in myself. Maybe this is something that I have to do. So I think talking to someone else that’s been through this, talk to someone else that’s quit their nine-to-five job, chances are, and I don’t know Henry, if you’ve met anyone that this didn’t work out for, but for me, the quitting your nine-to-five and going full-time at this field or like the thing you love, it usually works out for people, usually.

Henry:
Yeah, absolutely. I don’t know anyone who is in this industry, who has left their nine-to-five and then ended up having to go back.

Rob:
Right. I don’t know anybody.

Henry:
Not a single person. And I did the exact same thing. My wife was like, “Yeah, quit.” And I was like, “Let me go talk to somebody else.” Right. So I went and I talked to my buddy, Zach, he owns storage facility. He’s a rockstar in the storage facility game. And he’s been an entrepreneur as long as I’ve known him, like full-time. And so I went to him and I was like, “How do you make this work? I’m thinking about doing it.” And he was like, “Honestly, I thought you should have done this a year ago.”

Rob:
Is what everyone says, man.

Henry:
Right. And I said… But it gave me a place to take my fears because what happens a lot with stuff like this, it was the same way when I was getting started in real estate, we have these fears and a lot of the times they’re not really rooted in anything real, right? And so he gave me a place to be able to ask those whys, right? And those what ifs. Like, hey, I’m thinking about quitting. I know you did it. Here’s a big fear. Here’s my big what if, like what if I quit and I can’t produce the income that I need to live monthly? What if I quit and X, Y, Z. And he was able to put some real life to it because he’s lived it.
Like what if I quit and we struggle with the healthcare. So he was able to help us figure out. Give me some actionable advice on this is how much it costs, this is what we do for it, right? Here are some other options you might think about. And so talking to quitters was the best thing I could have done, as far as getting advice on if this is a good move or not, because it helped me realize which fears of mine were actual legit fears that I needed to go create a mitigation plan for and then which fears of mine were just my brain overworking itself for no reason.

Rob:
What’s really funny is that it’s so easy to see what they saw, now that I’m doing it, because to them, they’re like, “Just quit.” And I’m like, “What do you mean? Just quit. That’s so dumb. Why would you say that?” And now I’m like, whenever people approach me, I’m just like, “Yeah, just quit.”

Henry:
Right.

Rob:
And they’re like, “What do you mean? That’s so dumb.” I’m like, “Look, you’re going to figure it out.” I actually just had a conversation with a friend who wanted to go full-time in photography. And he called me, he’s like, “Man, I’m just, I’m thinking about doing it. And I’m at the point where I can’t make more money with photography unless I quit my job.” And I was like, “Look, if it’s costing you money from photography and that’s the only way you can scale, then quit.”
And even if you make half, as long as you can pay your bills with your wife’s salary, who, they both make pretty good money. I was like, “You’re going to be fine.” And he’s like, “All right, well, I appreciate it. This was really meaningful.” And I was like, “Yeah, no worries.” And then I like, this was two weeks ago and I met with him two or three days ago. And I was like, “Yeah, man, so what’d you end up landing on it?” He’s like, “Oh, I quit.” And I was like, “What do you mean you quit? You didn’t tell me. You didn’t text me. I talked to you for two hours about this.” And I’m just really happy for him because I can see it. I think this is a whole mindset thing that you just don’t see it in the moment. Actually a very mind-opening, is that the phrase?

Henry:
Eye-opening?

Rob:
Eye-opening. It opened my mind too. An episode of BiggerPockets that I did that was very eye-opening, was the one that we did with Jason Drees. I believe it was episode 601, and that’s how eye-opening it was for me. We talked about mindset and just imagining who you were 10 years from now, thinking of the version of you 10 years from now. And if you can imagine that person, you can just effectively manifest them in your life. And so, I talk to a lot of people who they make 50,000 or 75 or a hundred thousand, and I’m like, if I ask them, “Can you make a million dollars this year?” They’re like, “What? No, what are you talking about? That’s such a dumb question.” Where if they ask me, I’m like, “Heck yeah, I can.” Because I understand that it’s all mindset. And really just believing in yourself goes a long way. So this is a very long tangent to just say, talk to other people that have done it because I think it’s going to be more eye-opening than you think.

Henry:
Absolutely.

Rob:
Second actionable tip here, which we’ve already sort of covered, but I think it’s just develop your multiple streams of income. I really don’t want people to dip into the real estate income, personally. I want you to grind on that for as long as you can. That’s what you’re going to retire on, but you should really be working on it, like planting those seeds, watering those seeds. And for me, my side income now is I do mentorship, I do coaching, content creation. I’ve got affiliates. This is a very easy one. You can go make a YouTube channel and you can say, “Hey, I’m going to review this item right here.” And if people click that link, you’ll get a 3% commission on it, if it’s like an Amazon product.
It’s crazy. You can make six-figures doing this. You can make six-figures just promoting other products. A lot of people just don’t want to do it because its hard work, but you can do that. Airbnb was my side hustle for a long time. Now it’s my front hustle, if you will. For you, I know that’s probably it’s multi-family, you did that.

Henry:
Yep.

Rob:
For a long time. And then a side income, I think, that’s very actionable because a lot of people are like, “Well, what if I don’t have money?” Partnerships. Partner with people. OPM, other people’s money. They will pay for your portfolio, if you can pitch yourself and if you have a track record of doing this. The proof of concept that we talked about.

Henry:
Yeah. 100%, man. You can go get a side hustle within the real estate space, right? You can go be a bird-dog, find deals and partner with somebody. You can go out and, dude, there’s so many ways to make money right now with just your phone, that it’s insane. And so you don’t have to know exactly what that side hustle is right now. And so a little mindset for everybody, just tell yourself, I’m going to find a side hustle that produces X amount of income for me per month, and just write that down. Say that to yourself three times in the morning, and I promise you, as you’re browsing Instagram, as you’re listening to this podcast, as you’re listening to some other podcast, you will overhear someone say, this thing is cool or this technology is cool. And then you’ll be like, “That’s it, that’s the side hustle that I can do.”
Because Rob’s, 100% right. There’s YouTube channels. There’s people that have YouTube channels that just upload calming sounds and make six-figures a month. It’s crazy. Is that the path you should take? I have no idea, right? There’s opportunities for you to just do affiliate sales for products that already exist. There’s literally websites you can go to right now, pick some products and start promoting it as an affiliate and you’ll get 50% of the sales from it. You just have to figure out, as you start to research side hustle, something’s going to stand out to you and then dive into it.

Rob:
Yeah. Actually this gets into my next tip here, which is, I think this is a big one and it just helps you visualize it. We think about all these side hustles and they’re always in the ether of our head. I think you actually need to put pen to paper and literally map out three financial scenarios. Good, better, best. Hey, here’s what I make from side hustles or here’s what I make from my job, if I want to keep doing that and sort of wean myself off, and here’s what I make from real estate. And actually, I just searched for this on my computer and, again, in the name of transparency, I sort of just want to read you what I mapped out, my good, better and best-case scenario. All right.
So conservatively, I was like, all right, if I just kind of just do what I’m doing. If I just quit my job, I can get to $23,000 a month or $276,000 a year. That was like, if I really just mail it in, that’s what I’m going to make. My medium-case scenario. I really, I put time into this and I foster all of these different things and I really just put time and effort into it. I can go up to $35,700 a month, which is a yearly salary of $428,000. And then in my best-case scenario, I was like, all right, if I just totally crush this, I’ll make $38,500 a month, which is $462,000 a year. But the big difference on that best-case scenario is that $462,000 paycheck that I was working towards, actually was if I quit my job, what I could make. And I obliterated it. I just totally, I met those goals by far and just putting them on paper and mapping out how I was going to make that, helped me out so much, man.
It was just seeing it and being like, wow. And it really helped me believe in myself because I, that was really going off of money that I was already making, so it wasn’t really that crazy. So I was just like, all right, so now let me just do a little growth plan and fast forward to today, I just did that last week. And it’s really crazy. It is really sign… It’s like so crazy to just map out what’s possible next year and I would never have seen that, I would never have a number to work towards, had I not just jotted it out. It’s very unofficial. It’s just literally income stream 1, 2, 3. If I open up this Airbnb, if I grow my channel by 20%, if I grow my affiliates by this, if I, just those simple steps really were eye-opening for me. And I was really motivated to just beat the numbers that I set forth for myself. What about you? Did you map out anything like that? Or were you just kind of like, “Ah, I’m good.”

Henry:
So I’ve always been a ready, fire, aim kind of guy. Right, wrong, or indifferent. But I did want to make sure that I highlight for people how amazing of a tip that is. Because as you were saying it, I was like, that’s brilliant, I should have done something like that. And then as you continued to talk, my next thought was like, “Do it now.” You’re looking to hire somebody, do your good, better and best-scenario for hiring that person. What kind of volume do we think it can do in your business to get deals closed, if you don’t hire the person.
Stay the course, right? How much do you think you can grow, deals per month? If you hire the person, how much you think you can grow deals per month, and then you subtract whatever that income is from what you’re currently making. Right. And then give a best-case scenario. If you hire a rockstar, right, and you pay them more, how many deals do you think they can do per month? And that might help open my eyes and ease that pain of having to figure out should you go out and hire this person to do that thing? So I’m about to steal it and use it right now. Great advice.

Rob:
Yeah. I mean, I think even with just hiring someone, just like what you’re talking about. The worst-case scenario is maybe you lose a little bit of money and they didn’t perform, but you got your time back, so that’s not really that bad of a scenario. A pretty good, like a medium-case would be you just break even, which is still awesome because they’re doing the work, you get your time back. And then best-case scenario is they make you money. You know what I mean?

Henry:
Right. Yeah.

Rob:
For the most part, I think you can, if you’re a good manager and you know how to train people and you can mentor them, someone told me, because I was talking about hiring people and I was like, “Yeah, I need to delegate.” And actually I think it was David Green. I’ll give him the credit on this, because he’s awesome. He was like, “No, it’s not about delegating. It’s about developing.” Develop people and develop loyal people, and they’re more than likely going to produce for you.

Henry:
Absolutely. 100%.

Rob:
Yeah. So, basically, hit me up if you need a job, no, I’m just kidding. [inaudible 01:05:28].

Henry:
DMs are about to get blown up.

Rob:
No. Okay. So last couple of tips here. I’m going to just breeze over this one because I already said it, but buy real estate before you quit your nine-to-five job. If you got a house that you’re thinking about or a second home, like my dad was about to retire and I was like, “All right, let’s buy an Airbnb and then you can quit.” He’s like, “Great.” And then he’s like, “Hey, I ended up retiring, so let’s just buy the Airbnb anyways.” I’m like, “We can’t, you don’t have an income anymore, dad.” So I think it’s very important. Yeah, try to close on that house or that Airbnb or that multi-family or whatever, because it can be, your journey to financing is about to be a little tough. And then last one here, give yourself an end date for your career.
This is, effectively, why I didn’t quit for so long. I had meant to quit in October of 2020. I didn’t quit until April 2021, which I think is about six months. And it’s just because I kept putting it off. I was just like, “I can’t, I don’t know.” And then I think eventually I was like, “All right, April 7th, I’m quitting. That’s it. That’s going to be the day. I’m going to give it two weeks from now and I’m going to do it.” And my wife was like, “Great, finally.” And I was like, “Okay, I’m going to do it. You can’t stop me.” She was like, “Yeah, I don’t want to stop you.” And I’m like, “Just try bud. Just try.” And she’s like, “Dude, just quit.” And so I gave myself that end date and guess what? I quit on that end date, and my life has changed in a really positive way ever since.

Henry:
Yeah. And it’s almost like a mindset thing, right? Because if you set that date in the future and you now have that date planted in your head, you’re going to start preparing for that date. And by the time it comes, you should be more prepared to make that transition. And then if you’re not, I mean, you can move the date. You’re not, it’s not the end of the world. But just from a preparation standpoint, if you listen to this, you take down these tips and these things and you start to, you give yourself a date. Now you’ve given yourself, essentially, a timeline to start to prepare yourself and implement these things. And then by the time you get there, you’ve just made your transition into full-time entrepreneurship that much easier.

Rob:
Yeah. And you know what, just a little bonus onto that. Tell, if you’re serious about it, tell other people. You probably don’t want to tell your coworker, but tell your best friend, tell your mom, tell your dad.

Henry:
Don’t tell your boss.

Rob:
Yeah. Don’t tell your boss, but tell people, your close friends, “Hey, I’m quitting on April 7th.”

Henry:
Yep.

Rob:
Just say that because guess what? They’re probably going to check in on you on April 7th.

Henry:
Right.

Rob:
And so it’s on you to really kind of, if you want that extra bit of accountability, if you’re like, “Dang it, I shouldn’t have said that.” And that, like on my YouTube channel, I do that all the time. I just put out huge lofty goals because I’m like, dude, if I tell 180,000 people that I’m going to make this much, or I’m going to buy this or I’m going to do that, I kind of have to because I don’t want to let them down. So I’m always just like throwing goals. I think there’s a big argument to be made that you shouldn’t tell people your goals, but that’s a whole nother episode, probably. But I think if you put it out there, then it’s up there, you don’t want to go back on your word. So [inaudible 01:08:26].

Henry:
I know, I thought it was totally crazy when you were like, “Henry, on July 17th, I’m going to give you a million dollars.” And I was like, “That is crazy.”

Rob:
And now it’s like, I got to do it though. I got to say that because I’m going to do it on that day. You just wait, man. You just watch that Venmo, pal.

Henry:
I’ll just-

Rob:
Here’s the problem though. Venmo is like, it only gives you $2,000 at a time, so it’s going to take a little while to actually get it to you.

Henry:
I’ll live with that.

Rob:
But that’s it, man. That’s I think, I don’t know, do you have anything else, any other prolific thoughts that you want to leave us with?

Henry:
Yeah, so I just want to tell people, we’re not saying nine-to-fives are terrible, quit your nine-to-five right now. What we’re saying is that if you’re on this path, because you want to get out of your nine-to-five, we want to help you strategically do that by sharing our experience with you. We’re, literally, living this right now, almost in the same weird time.

Rob:
Yeah, I know.

Henry:
And so, we’re not bashing nine-to-fives in any way. I tell people like my nine-to-five was my first investor in my real estate business. I wouldn’t have been able to grow and scale to the point that I got to as quickly as I did, if I didn’t have that nine-to-five there helping to keep me bankable, helping to keep me liquid enough to be able to go buy properties, helping to fund my emergency fund for if things broke on properties. And so my job was my investor in my real estate business, and helped me get to where I needed to be.
Just keep in mind that if you’re on this path to quit your job, that you need to keep what you’re doing in focus and keep that scorecard, that running scorecard, like people say as an investor, you should keep your scorecard of your personal financial statement, right? So you track your net worth. I think you should also track your hourly rate. The more money you start to make from side hustles, the things you should continue to update that hourly rate and kind of keep that in front of you, so you can see where you might hit that threshold of like, all right, it might be time to start thinking about transitioning over from one to the other.

Rob:
Yeah. That is all, dude, I mean, that’s gold right there, man. I don’t really have much to add to that. I think you’re exactly right. We’re not saying nine-to-five is bad. Please don’t take anything we say that, I actually loved my job. I genuinely loved advertising. The only reason I left was because, well, a couple, I wasn’t really that good at it, if I’m being honest. I was good, but I wasn’t ever going to be great. And I’m okay with that. I’m, I mean, I quit for a reason, right. But I was really, I had the opportunity to be great at Airbnb. I had the opportunity to be great at real estate, to be a great content creator. I knew that I could get there and that I can get there still. I’m still working towards that because I’m good at this stuff and I love this stuff.
And because I was actually having success here, it just made me realize that I couldn’t do it for other people because I wanted to do it for myself, so that I could help people in my network, help my mom, my dad pay for their retirement. My brother-in-law, my sisters, my kids. I really started to understand that if I could do this for myself and I could do it well, everyone in my family, in my direct influence, I could change lives and help everyone live a better life. So nothing wrong with nine-to-five, do it for as long as you possibly can, be a terrible employee, get fired. No, I’m just kidding, don’t do that. Do it for as long as you need to.
I always say that there is no right or wrong, there’s just what’s right for you. So that might mean that you’re going to quit in five years and that is okay, it doesn’t have to be today. In fact, it shouldn’t be today if you haven’t been working on it, but it could be next year. It could be in two years or three years. It’s like, whatever, it just depends on your personal situation. So I’ve got nothing against the nine-to-five, do it for as long as you need to. And I promise you, if your goal is to become a full-time real estate investor, it’s going to happen.

Henry:
Amen. And you’re going to be so glad you did. When I had that conversation with my buddy, who was a full-time entrepreneur, he told me, essentially what he told me, he was like, “You should have already done it. You should do it today, and if you do it today, when we talk a year from now, you’re going to tell me it’s the best decision you ever made.”

Rob:
Yeah. And you probably told him that the day you quit because that [inaudible 01:12:49].

Henry:
Right.

Rob:
For me.

Henry:
He’s not wrong.

Rob:
Well, awesome, man. Well, I think that’s it for today. I would typically do the, try to do a David Green ending call sign here, but I butchered it the last time we did this. So I’m just going to say goodbye. Oh, actually, before we go, where can people find you on online, man?

Henry:
Yeah, best place to reach me is Instagram, @thehenrywashington, same thing on TikTok. And you can check me out at henrywashington.com.

Rob:
Cool. You can find me @robuilt on Instagram. Robuilt on YouTube. I don’t know why I said Instagram first. YouTube is my main love. Find me on YouTube, Robuilt, R-O-B-U-I-L-T. Or TikTok, @robuilto. But with that, we will catch you guys on the next episode of BiggerPockets.

 

 

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2022-06-28 06:02:21

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3 Tools That Will Automate Your Short-Term Rental Business

When running a business, automation and delegation can make your life easier and amplify your success. This is even truer for the real estate industry. If you’re in the short-term rental (STR) business, you might have realized by now that STRs are one of the most management-intensive real estate classes. 

This, of course, is because of the high volume of people coming in and out of your property. But even though STRs require more time and resources to manage, that doesn’t mean you or even someone else needs to be completing those tasks. 

As my business grew, I wanted to see which pieces I could start delegating to other people as most other entrepreneurs would do. 

But, instead of finding the right people for tasks, what if I could find the software or tools that can take over these time-consuming jobs without hiring people?

After all, I wanted to delegate three things:

  • Messaging
  • Pricing
  • Guest Services

All of these can be covered by automated software. In this article, we’ll discuss those applications.

Automated Messaging

When it comes to any online travel agency (OTA) like Airbnb or VRBO, at the end of the day, they are a search engine, and outside of keywords, their algorithm rewards specific behaviors. 

One of those behaviors is how quickly you respond to your guests. The quicker you respond to a guest, the higher your account is placed in the search results. 

So, the first thing I wanted to do was automate the messaging for my business.

Before automating, I would manually send booking confirmations, check-in instructions, a check-up message once the guest checks in, a pre-check-out message, and a review request message. That’s a lot for one property, let alone managing others.

To make my life easier, the first tool I found was Hospitable. For a starting price of $25 per month for up to two properties, this tool allows you to integrate with Airbnb, VRBO, and Booking.com, and it can handle all of your messages automatically for you. They also provide excellent messaging templates, so you don’t have to worry about the specifics of your writing. 

The automated messages through Hospitable auto-fill the guest’s name, date of check-in, and date of check-out. When you are away from work, you can set up an automated message saying you’re not available, which comes in handy at night when you are sleeping.  

Another exciting tool they provide is automated reviews. This allows you to automate all of the review requests to guests. Then, the software will read through the reviews and determine which ones should display first on your listings, which can become very time-consuming after you start managing more properties.

After messaging, the next step is to automate the pricing.

Dynamic Pricing 

When I first started listing properties on Airbnb, I would sit down once every week, pull up my calendar, and assess the pricing of each listing. I would slash prices for dates that had not been booked and increase prices for weekends that I thought would do better. There was a lot of guesswork, and it simply wasn’t scalable. 

Cut to today, and I firmly believe that your property is at a disadvantage if you are not using a dynamic pricing tool for your STR. Automated pricing apps will track the local market’s rental demand and adjust prices based on it, making your listing much more competitive. Another great benefit of automated pricing is that it helps your properties rank better on the OTA search results.

The dynamic pricing tool I currently use is PriceLabs.

Digital Guidebook 

My wife and I recently took a trip to Tulum Beach, Mexico. When we checked into the resort, the front desk agent sent us a link to 4 days worth of activities. We absolutely loved this, and I wanted to see how I could apply that to the STR business. I asked myself, “How can I become my guest’s travel agent without spending too much money, and can I automate the whole process?” 

That’s where a digital guidebook came in.

A digital guidebook is a link you can send your guest that provides information and a short itinerary of things to do in your market. I suggest finding 3-4 attractions and making a daily schedule around them. When your guest checks in, you can have this sent automatically.

For instance, Asheville, North Carolina, is known for breweries, hiking trails, and restaurants. I have three separate days that are planned around those things.

The digital guidebook I use is Hostfully, but there are a ton of other platforms you can use. I recommend having a digital book compared to a printed one you leave at the property for many reasons, including easier access for a guest, ease of updating, and the ability to keep it all automated.

Final Thoughts 

These are the three tools I’ve implemented over the last two years to completely automate the vast majority of my business. Even better, applying all three of these tools to your rental will only cost you an extra $60 or so per month, more or less depending on the number of properties you hold. Regardless, the costs are a drop in the bucket to how much money and time these tools will give you back!

short term rental

Find long-term wealth with short-term rentals

From analyzing potential properties to effectively managing your listings, this book is your one-stop resource for making a profit with short-term rentals! Whether you’re new to real estate investing or you want to add a new strategy to your growing portfolio, vacation rentals can be an extremely lucrative way to add an extra income stream—but only if you acquire and manage your properties correctly.

2022-06-27 15:37:49

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