Building Your “Passive Income Blueprint”

David:
This is the BiggerPockets Podcast Show 583.

Johnny:
If you want to get to X amount of income a year, we’re going to need to do these things within your savings rate, we’re going to need to do these things with your assets. Whether it’s selling it, whether it’s doing a cashout refinance, and then we’re going to come up with a plan where you can acquire one every single year for the next five years to hit this milestone of yours.

David:
What’s going on everyone. It is David Greene, your host of the BiggerPockets Real Estate podcast. The show where we teach you to find financial freedom through real estate. Now, if you are looking to have a better life and real estate is the way you want to get there, you, my friend, are in the right place. At BiggerPockets, we are a community of over 2 million members that are all committed to the same goal as you, to find real estate to hit financial freedom.
We do that by bringing in experts in the field, subject matter experts, people who have walked the path you’re trying to walk and are looking back at showing you what they did to get there, as well as people that made mistakes so you can avoid them. Today’s guest is actually a close friend of mine. It is Johnny Hoang, an agent on the David Greene team, here to talk about what to look for in a realtor to have success.
Joining me is going to be my co-host, Rob Abasolo, who helps me to take on this incredibly important topic of picking the right agent to represent you. And it’s fitting because Rob and I recently had to go through this exact same process ourselves for the houses that we are buying. Rob, welcome to the show.

Rob:
Howdy, howdy, man. I’m excited because we’re really unpacking a lot here. One of the things that Johnny talks about that really I don’t think a lot of people give enough thought to is that working with a good realtor is a two way street, right? It’s a partnership in that both parties are expected to give effort. And when one party doesn’t give effort, then the other party moves on. So, we talk about things like, what’s a kiss of death when you’re a realtor? What are some things that a potential client can say to you that may deprioritize them on the list?
We also talk about things that you can tell your realtor in the making that’s music to their ears? It was really nice to talk to Johnny, because clearly, he is one of the best at what he does, and that’s always an exciting thing to get to talk to someone that is so good at their craft.

David:
Yeah. So, you’re going to hear about this, but Johnny owns real estate himself, he’s also an investor, he is a house hacker, and then he helps clients do the same thing. And when I buy property in the Bay Area in California, Johnny is actually the person that I have represent me. He just put me under contract on a $2.2 million place in Moraga that he negotiated all himself. It was a deal he found me that had actually expired. It was not on the market. So, we were able to negotiate directly with the seller’s family.
There was a couple other people that were sniffing around it too, and Johnny got so many compliments from the seller that I said, “Man, he’s just doing so good. We got to bring him on here so he can share what he’s doing well.” Then that gives everyone a blueprint of what they should be looking for when they find their agent. I’m excited to let you guys hear about this. I think this was full of a ton of really good, actionable practical steps.
Before we get to the show, let’s take a quick word for today’s quick tip. Today’s quick tip is go to biggerpockets.com/agentconnect, A-G-E-NT-C-O-N-N-E-C-T. There, you can type in the name of an area that you are interested in investing in and get a list of agents that you can sort of do your research on to see if they might be the right person to help you with your deal. BiggerPockets provides them. If you’re using a BiggerPockets agent, you are much more are likely to find somebody who invests in real estate themselves, understands what you’re trying to do, and listens to the same annoying voice that you are right now on this podcast, me, and Rob with a slightly less annoying voice, teaching how to get this done.
Now, it’s not a guarantee that they’re going to be a Johnny or a Rob or a David, but you have a great place to start. And in today’s show, we are actually going to tell you what questions you should ask them and what answers you should expect to receive. Rob, is there anything you want to add on that before we bring in Johnny?

Rob:
I want people to just pay extra special attention because Johnny does give us some of those secrets for finding these unicorn realtors as well. I think it’s really great to hear it straight from the source.

David:
That’s awesome. All right. Let me tell you guys a little bit of about our guest today. All right. BiggerPockets, I have a special treat for you today. Joining us on this podcast is a real estate agent on my team, The David Greene Team, Johnny Hoang. Johnny is my top agent. He sold $67 million worth of real estate in 2021 in only his second full-time year in resale real estate. Johnny has done 20 deals and currently owns 10 properties across three different states. He also invests in virtual real estate, cryptocurrency, NFT, stuff like that. Like he’s one of my coach when it comes to that side. And he is joining us today to share with us what to look for in a really good agent,.Johnny, welcome to the show.

Johnny:
Thanks, David. And thank you for such an elaborate introduction. I feel honored to be here.

David:
That’s basically the only reason that I’m on this show.

Rob:
Yeah. His introductions are always the best, man. Quite the accolade list. $67 million on your second year. I mean, I got to imagine that’s a very small percentage of people out in the realtor world that are actually doing that. Right?

Johnny:
I would think so. Based on the data I’ve looked up, we’re one of the top producing teams. So, yeah, I would think so.

David:
Well, where did you rank in Keller Williams overall?

Johnny:
I believe it was, in NorCal, it was 11 I believe, if I’m not mistaken. Our team hit top five from my understanding as well, but me personally, it was 11.

David:
But you were in the top 100 agents of all Keller Williams, right?

Johnny:
Yes, I was.

David:
Okay. That’s pretty impressive for the second year. Johnny’s definitely doing something right. You also invest in real estate. So, we are here to pick your brain about what to look for in an agent. Here with me is Rob, who is not a real estate agent. I love that we’re getting to come at this from two different angles, right? Someone that sees behind the curtain and somebody that doesn’t know what the heck is going on, on the other side of the curtain, because our listeners sort of straddle both sides. Rob, if you don’t mind, what’s like the first pressing issue that you’ve always wanted to know about what happens in the world of real estate agents that you’ve always been afraid to ask.

Rob:
Mm, I guess, for me, it’s, I’m always very curious for a realtor. How do you prioritize which phone calls to take and which phone calls to decline? Because I got to imagine, at your level, you’re selling a lot of houses. $67 million, that’s a lot of houses. I got to imagine you get a lot of phone calls every single day. Is your phone just blowing up every single moment of the day?

Johnny:
That’s a great question. We do have a system in place in terms of how we prioritize people that need to buy a house now versus the one that have to buy a house later. The main way we prioritize that in my opinion is just understanding what their goals and their timelines look like and seeing how we can help them and how we can create a plan to help them. We would never shy away from anyone. There’s always going to be a place for someone that comes to us.
We just have to figure out a game plan and a timeline of what that looks like. But to answer your question, Rob, our main priority is to help the people that need a house ASAP. These are going to be the people that are renting a home, their lease is ending, and they need a transition into a new home as soon as possible. These are going to be the ones that are looking to sell their homes, and again, need to relocate for a job opening they just had that is requiring them to work a month later.
Versus the ones that are still playing with the idea of investing in the market and just want some information about how to get started, when to get started, how much capital they need to build up. We also have a plan for them as well. To answer your question, it’s really just, what does the overall timeline look like and what type of expectations do we need to set to see if we can come to those terms?

Rob:
Yep. Very fair question. I’m kind of curious, I mean you’re 28, so obviously millennial. I think you’re a millennial. You’re a millennial, right?

Johnny:
Yeah. I just hit the cusp.

Rob:
Okay. Yeah. I’m on the opposite side of that cusp, but do you prefer if someone is contacting you out of the blue, are you a phone call guy or a text message guy? Is a text message a bit of a breath of fresh air?

Johnny:
I don’t like text messages that much, to be honest. I like to pick up the phone. I like to hear someone’s voice. I like to hear the tone. I like to hear the energy. I just like those conversations to be completely honest. I feel like there’s so much that can be misconstrued in a text message and there’s not enough information for me to really understand how to help someone through a text message. I’m a phone guy. I love Zoom meetings as well, of course. And most importantly, I like to meet them in person. But to answer your question, phone guy all the way.

Rob:
And David, obviously you’re a millennial yourself. What are your thoughts on the matter? Are you a text message guy or a phone call guy whenever you’re talking to clients?

David:
That’s funny because I’m a millennial barely on the other side. Like, I’m one year within before I would’ve been like gen X or whatever it was. I, believe it or not, I’m the opposite of Johnny. My voicemail full because I don’t like people leaving voicemails. I probably get 30 phone calls a day. 15 of them are from spam. So, if I get a number that I don’t recognize, I just don’t answer it because it’s almost always some kind of a fraudulent call.
What I tee each people on our team to do is, if you call someone and they don’t answer, you send a text message saying who you are, because that’s what I need. You need to text me and say, “I’m so and so, I’m calling for this purpose.” And then I can either schedule a call or kick them to the right person, or call them back. But I think, Rob, you’re asking a very good question because this is one obvious problem people have when connecting with an agent is, if you’re calling and they’re a text person, you’re going to be really frustrated they’re not getting back to you.
And if you’re texting and they want a phone call, you’re going to be frustrated that they’re not communicating the information that you’re looking for. I mean, kudos to you. You’re already starting this thing off with some really good questions.

Rob:
Well, I’m really just diving into my pain points here because I think that’s a very fair bit of advice here. I always call my realtor first because I get a lot of people that send me emails and text messages and direct messages. If I’ve never met them before, there’s really no reason for me to respond if I don’t know them. But if I talk to someone via Zoom or via phone call, I can at least … There’s a human element there. It’s like, oh, that’s a real person. Here’s their tone. So, what I do is I typically will call my realtor. Hopefully they’ll answer.
I can’t expect that from super, super busy realtors, but if they do, we have a conversation and I’ll say, all right, I’m going to summarize what we talked about in a text message. Here’s what I’m looking for. If you could get me on a list, here’s what I’m looking for. Let’s say that someone contacts you Johnny and they’re like, “Okay, hey.” They got you to answer the phone. Can you sort of give me two directions here on how this phone call can go? If you write someone off immediately, for example, what is like the kiss of death that someone can say to you in that first phone call that sort of deprioritizes them amongst kind of that group of people?

Johnny:
Sure. In a broad statement, I would say someone that doesn’t have the right expectations. So, it’s going to be someone that calls me and says, “Hey, I just listened to the podcast and I want to buy in San Jose. I currently have 5K, but I’m talking to 10 other people to raise some capital. I want to do a bird deal where I can get 150% cash on cash. Don’t tell me I can’t do it because a lot of people have told me I can do it.” In a situation like that, of course, I would take on to unpack it, to really understand where they got this information, and figure out if I can come up with a plan to adjust their expectations to match the market that they’re giving.
If it’s a battle between the two of us and I just feel like everything I’m saying to them is just going one ear out of the other, they’re giving me just a lot of retaliation as to why it would work, that’s a relationship that I don’t want to get involved in. Because I can just tell that our expectations aren’t going to be aligned. I won’t be able to serve them correctly. It just won’t be a good relationship. Typically, when people are really out of line with their expectations and they’re not listening to someone that’s been in this market for quite some time and has done quite a few deals, that’s my sign to just say, “I’m not the right fit to help you. Maybe I can give you some information to better educate yourself about this market, but at this time, I’m just not the right one to help you.” That’s essentially what would be a red flag for me and the ones that I can’t help.

Rob:
What about you, Dave? I’m sure you got a couple of kiss of death statements here that you’re like, “Oh man, I can’t believe I have to unpack this.” Can you give us an example of that similar to Johnny’s?

David:
Yeah. There’s two kinds of people. The first is someone who says, “I need help buying a property and I want someone to represent me.” And they’re checking to see, can I trust you? Are you good? Are you competent? Are you skilled? And then there’s the other person who just wants information from you. They’re saying, “Hey, what can you educate me on in this area?” And they haven’t really decided if they actually want to buy or if they want you to be the one representing them.
When you get a client that’s telling you, “Here’s what I’m going to do in this market.” And, as the expert, you’re explaining to them why that might not be a good idea. You’re just basically checking to see like, is this person open-minded or are they stubborn? Because everybody eventually comes to the same conclusion. It just matters how fast you get there.
Do you get there because you willingly took this advice that made sense or do you have to go the hard way and you have to bang your head against that brick wall over and over and over? And meanwhile, prices go up $50,000 to $100,000 while you’re waiting. Part of what I think a good realtor’s doing is they’re not letting their client have unrealistic expectations. They’re not telling them what they want to hear, just so that they can get them signed up.
If a realtor doesn’t have a lot a business, if they’re not that good, if they’re not making that much money, they’re going to say whatever they have to say to get that client signed up, knowing eventually the client’s expectations are going to shift, but I want to lock them up now. I think what Johnny is describing is a more honest way to do business, but it will often lose you a lot of clients. Everybody wants to hear what they want to hear. They don’t want to hear what the reality is.
I was going to ask you Johnny, when someone’s looking for an agent, or when you’re looking for an agent, because you, like me, invest out of state, do you look for someone that tells you what you want to hear or do you look for someone that tells you what it is, and how do you gauge how honest they’re being?

Johnny:
I would say it’d be the second scenario. The first scenario I would want to speak to real estate agents and clients here, just to give you some tips. Someone that is being very agreeable, for example, if you have an intro call with an agent and you’re throwing all these grand ideas to them and they’re saying, “Yes, Johnny, I can do it. Yeah, that’s no problem. I can do that 60% cash on cash. We do those all the time.” You really have to pay attention to how agreeable they are and if they even have experience in doing these things.
Because I’ve noticed the top agents are super direct. They tell you how it is, and they give you examples of what can actually be done in the market, and they give you data points, right? They’re just not the yes, man. Typically, what I’ll look for an agent when I’m buying houses is someone that likes to explore ideas with me, but also puts me in my place.
Someone that can tell me, “No, Johnny. You can do this in this neighborhood. But you advise me that you don’t want to be in a bad neighborhood. So, if you want to be in a good neighborhood, you’re going to have to pay a premium in exchange for cashflow if you want to be in this type of neighborhood.” I’d rather have someone tell me that I have to pay more to be in a better neighborhood and lose out on profits than someone to tell me that, “No, you can buy in this neighborhood. It’s a great neighborhood. You’ll still get the cashflow.”
And then down the line I find out it’s a horrible neighborhood and my house is just not performing the way I want it to perform. So, to answer your question, David, I would say pay attention to someone that’s super agreeable, because that’s for me at least, always a red flag. For me, I would always want to check the information that they’re confirming with me, right? If I’ve done these analyses, but I’m not quite sure if it’s going to hit these numbers, but they keep telling me it’s going to hit these numbers, again, that would be kind of a red flag for me.
Sometimes I’ll even test the agents and I’ll tell them, “Can I do a 40% cash on cash here? This is what I’m seeing.” And if they tell me a little fib just to try to push me along, that’s probably not someone I want to work with. I want someone to assess my situation and really understand where I’m coming from and tell me what I can and cannot do in this market.

Rob:
That’s really great, man. I test my realtors with caution, right? I don’t necessarily expect them to know the nitty-gritty of what I’m looking for, because honestly I expect myself to really be analyzing all of these different things. Really what I want to stress check for is if there’s something that I’m missing. I’m really more looking for a realtor to point out flaws in my plan versus helping me formulate the plan.
If I come out at them and I say, “Hey, I’m looking for a 40% cash on cash in this neighborhood,” it’s exactly what you said, I want them to say, “Well, theoretically, what you’re saying is correct, but I wouldn’t do it in that neighborhood for this reason, this reason, this reason.” I definitely think that there’s a little bit of compromise that needs to come from both sides. Setting those expectations at the very beginning, I think, is something that I’ve learned over the years, is a lot easier to maintain the status quo when you can have that conversation at the very forefront of your conversation.
Kind of want to shift the gears here a little bit. I mean, we’ve touched on this a bit, but Johnny, can you give me an example of something that a client might call you and say, that’s like music to your ears? What’s something, if it’s the first phone call, client says this to you, what would make you say, “Oh thank goodness, I love these kind of clients?”

Johnny:
Yeah, sure. Music to my ears. If a client were to call me and say, “Hey Johnny, I’m currently paying $2,500 in rent right now. I want to find a way to get into real estate that doesn’t cost me too much and will enhance my living situation. Can you help me?” That type of client, I just love them because it’s very common for us in the Bay Area to pay $2,500 in rent. But if you can find a way to get into the real estate market and reduce those living expenses while reaping the benefits of being a homeowner, depreciation, tax incentives, I feel like that’s a win all day long.
Because that’s essentially what we teach here on The David Greene Team as well is just how to buy houses every single year using these strategies. So, when I hear someone with that type of situation, it’s music to my years, because I know I can help them. I know the expectations are going to be aligned there. As soon as they hit their first deal and then we work on the second deal the next year later, and they start seeing that passive income come in, and the financial burden being lifted off their shoulders after every single deal, that’s what excites me. That’s what fulfills me.
That’s why I got into the resale space, to help other investors realize that this is the path you want to take if you want financial freedom. It’s going to take a little while, but every house you buy is just, I feel like you just buy more time. That’s kind of long-winded but I hope I answered your question.

Rob:
You did great Johnny. You did great. Yeah, so if I’m hearing this correctly, we’re basically, when I’m talking to a realtor, I want someone that can listen to my needs. Hey, I need a house. I’m paying this amount. Set the right expectations. Hey, if I’m paying $2,500 a month, I want to keep it at that. It’s your job as a realtor to come in and say, “Well, in this market, you can spec this.” And then carve out a plan. Is that the process that you take whenever you’re talking to new clients?

Johnny:
Yeah. That’s exactly the process. I mean, I think the successes I found in resale was being able to listen to the consumer and coming up with the game plan for them to allow them to just follow it throughout the following years. Can I give you guys a little antidote in the beginning stages of my investing career?

Rob:
Yeah.

Johnny:
Okay, cool. As a child growing up, I always knew I would be a millionaire. I just didn’t know how I’d do it. I just didn’t know how I was going to get there. And through BiggerPockets, that was when I found that vehicle, and I knew that, okay, this is what’s going to get me to my first million. This is what’s going to get me to 10K of passive income a month. All I have to figure out is, how many homes do I have to buy and how many homes do I have to have in my portfolio to produce me X amount of income every year?
And how many homes do I have to buy in the next five years? And how much equity do I have to have within these homes? And when is the equity going to compile up to where I make my first million? When I found out how to create that blueprint, well, I didn’t create it. It was just from BiggerPockets. It was stuff I put together that I found on the forums, but I don’t want to take credit for anything that I didn’t fully create.
But yeah, when I found out how to come up with the blueprint based on what I’ve learned from BP, I just felt like that financial weight on my shoulders, it was just lifted, right? Because now I know, if I save up X amount of income every single year and I buy X amount of homes in the next six years, that’s when I’m going to net my first million. In the next six years, that’s when I’m going to have 10K in passive revenue if I stay consistent and continue to act and buy a house every year.
That was a very broad way of explaining it. But typically, someone that comes to us, we’ll assess their situation and see how much liquidity they have, see what type of assets they have. Then we’ll tell them, “Okay, if you want to get to X amount of income a year, we’re going to need to do these things within your savings rate. We’re going to need to do these things with your assets, whether it’s selling it, whether it’s doing a cashout refinance, and then we’re going to come up with a plan where you can acquire one every single year for the next five years to hit this milestone of yours.”

Rob:
I guess what I like about that is you aren’t just looking at their situation, but you’re using your experience to sort of help them carve out a plan for themselves. I mean, how often are you finding yourself, sort of in a sense, not financial planning, but how often are you relaying some of this personal anecdote and journey that you’ve had and helping people carve out similar things for themselves?

Johnny:
I would say it’s pretty often. I mean, think it’s at least 70% of the clients that we work with. Because another thing I want to mention too is, when I first started investing, we didn’t really have anyone to walk us through this process, and outside of BP, I mean, I’ve always said I’ve had hundreds of mentors through the podcast and just listening to people’s failures and successes. But to actually have someone physically there and someone you can pick up the phone and call to bounce ideas off of each other, I think that’s invaluable when you first start on your real estate journey.
To be able to cultivate that type of environment and that type of service, I think, is very important. To answer your question, Rob, I feel like yes, 70% of our clients come to us, and that’s basically what we do for them. We help them plan ahead. You can kind of see it how it’s a win-win for both of us, right? As they grow their portfolio, it grows our exposure. I think it’s just a win-win for everyone.

David:
Yeah, Johnny, one thing I want to ask you, of the 67 million in real estate you sold in 2021, what do you think was your most common client’s profile? What were they looking for and how did you help them?

Johnny:
Yeah, sure. So, I would say the most common profile would be the house hackers. Typically, they’ll come to us with about $2,500 that they’re currently paying in rent. They’ll have maybe 100,000 to 150,000 in maybe stocks or just sitting in the bank that they want to deploy. And they’re looking to reduce their living expenses by 30% to 40% through using real estate as that vehicle. I would say that’s a bulk of them. I think what was really cool was, in 2020, when I, towards the end of the 2020, I should say, when I started getting some traction, a lot of the people I helped in the end of 2020 started buying again with us the following year, because they’ve built up enough equity.
They’ve been able to convert their single family homes operate like a multi-family, so they’re cashflowing in most cases. Now, those same people I helped in 2020, I’m helping them again in 2022. Most of these people that we’ve helped in the very beginning, it’s really cool to see that they’re learning a lot and they’re able to grow by just repeating the same process. But yeah, I would say the house hackers, that’s the main bulk of where the volume came from.

David:
So, do you have a deal that one of your clients did you can walk us through, that was a house hacker, and kind of explain what the numbers worked out for that person?

Johnny:
This is a recent deal that we closed on about two months ago. This deal was in Upper West open, which is a very good area in the Bay Area. And purchase price was right around 1.2 million. They did a Jumbo loan at 10% down. So, down payment was about 120K. We were able to get a 25K closing cost credit. So, they basically just had to come in with a down payment, which was again, 120. The rehab amount was 30K. So, the total cashout lay on this deal was 150K.
Before I go on, I’ll back up just a little bit to convey what their situation looked like. This is someone that was paying $2,500 in rent every month, or $30,000 a year. And they wanted to get started in investing in real estate. They told me they’d been paying rent for last five years, which amounts to 150K that they’ve been paying to their landlord, which amounts to the down payment they’re paying now, ironically. They wanted to park it in real estate and figure out a way that made sense to them.
This property, again, was $1.2 million purchase. And what was cool about it is the main house was a three, two. It also came with a two bedroom, two bath detached ADU. It was converted from the garage, which is very common in this area. And the kicker to this is that the basement level also has another two bedroom, one bath that’s partially converted. It has all the rough plumbing in there. Just doesn’t have the dry wall and Sheetrock up, but pretty much partially converted for. Their total PITI in this is $6,000 of paying a month. And total rent they’re getting is $3,500 for the main three, two.
Then for the ADU, that’s a two bedroom, two bath, they’re renting out one bedroom for 1,200 bucks to one of their buddies, and they’re living in the other room. In this scenario, they’re basically paying $1,300 a month to live in a good area of Oakland. So, it was an opportunity to basically reduce your living expenses by half, from 2,500 to 1300 bucks, plus with the tax incentives you get for owning real estate as well, and the value add opportunity with that basement floor that they plan to convert down the road.
I just love these type of situations because it really just takes one or two deals to really change your life. Right? A saying that I really like is you’re always one decision away from changing your life. I felt like this is like these type of decisions that we can help people understand to help them grow.

David:
100% agree. One of the things I get asked a lot is, I live in expensive market. Should I invest out of state or should I stay here? It frequently comes up, because I wrote the book, Long Distance Real Estate Investing, but when your house hacking, you can get away with 3.5% down, 5% down. When you’re investing out of state, you’re probably going to be at 20% to 25% down in almost every scenario. And when you’re investing out of state, you’re not saving in the rent money that you’re paying if you’re currently renting.
One of the things that I tell people all the time is you should house hack a deal every single year. And anything in addition to that, use the bird strategy, use long distance real estate, some combination of the two. But if you could get a house for 5% down, 3.5% down, even 10% down, that you can rent out, and then when you move out of it, you’ll have another unit that can generate more revenue, that’s in no brainer.
I wanted to ask you, Johnny, of the clients that you’ve had, have you had any that just had a hard time going forward with a house hack because they had their heart set on long distance investing or have most of them sort of understood that house hacking is going to make more wealth if you’re in expensive market?

Johnny:
I feel like a lot of them come to us wanting to understand how to invest out of state because they think it’s more beneficial. In some cases, it is. But in most cases for the people that come to us, it’s not. I would say a lot of eventually understand that starting off with a house act is a lot more viable option and a more beneficial one. Because I mean, what I always tell them is, to put things into perspective, if you look at the overall cash outlay that you’re deploying, let’s say you’re looking into a market like Texas, for example.
Let’s say average purchase price is 200K and you’re doing a 20% down. So, you’re basically deploying 40K out of your pocket. Let’s say we look at a house hack here that’s 800,000 with a 5% conventional loan. You’re still deploying that same 40K. Although in one market, you’re assuming more debt. So, essentially that’s a little more risk, versus the other market where it’s a little less debt assumption, so it’s a little less risk some would say.
But if you really put it in perspective, if you look at appreciation gain, 6%, 7% on a house that’s 200K versus 800K, substantial difference. If you look at reducing your living expenses where you can pay less in rent, which is a profit in its own that is not tax, I think when people come to that conclusion, they’re like, “Oh, okay, there’s a light bulb. I can buy something in the high appreciating markets.” It probably does make more sense right now, like buy a couple of these in a high appreciating market, build that equity, whether that’s just letting the market continue to go where it’s at or do a little forced appreciation, have that be my nest egg, take that equity, extract it and move it into a different market. Usually, people see that it’s more beneficial to house hack, but we do have certain situations where they want to go out of state versus house hacking.

David:
It’s just so uncommon to find a realtor who can break down what you’re doing and help them see the value in why it would make more sense to house hack in this case. That brings me to a problem that Rob, you and I were facing when we were looking in Arizona Area to buy a property. We were looking in a couple different cities and we had a couple different agents. I remember saying, “Look, if we’re going to do this, we need to get an agent who specializes in this type of real estate and has background into what we’re trying to do.
And you were like, “Got it, Dave, I’m on it.” I remember thinking, is he really going to be on it? Did he understand what I was saying? And you did. You ended up finding a really, really good agent. I wanted to ask you if you could share what the process that you went through was like to find that person.

Rob:
Yeah, definitely. I knew that we were going to be going into a luxury buy here. It’s not very common for a lot of realtors to necessarily have $2, $3, $4 million listings that they own. It takes an experienced realtor. I didn’t want to just call up anybody. I just went and I looked up most successful brokerages in that city. I found one, I called them, and the receptionist was like, “What are you looking for? Give us some details here.” And I was like, “Well, I’m looking for a very specific realtor. I’m looking for someone that A, specializes in luxury, and B, and this is more important, specializes in short-term rentals.”
Because it’s always really nice to have a realtor that I have some common ground with, just so that they don’t … So I can pull my weight in the relationship if you will. And they were like, “Okay, great.” They set me up with this realtor and I talked to them, and I did the mini interrogation of like, who are you? What do you do? No, but I talked to them for a bit and I started kind of asking, probing for more short-term rental related questions, to the point where they were like, “Okay, yeah. I don’t actually know too much about short term rentals.”
I was like, okay, that’s what I thought, no big deal. And they said, “But I do know one guy, one guy who’s just the short term rental sniper out here in Arizona. He’s the guy you need to talk to. He owns a property management company. He owns five luxury rentals. He is a luxury specialist in the short-term rental market.” And I was like, “Okay, great. That sounds too good to be true. You’re just giving away a $3 million lead? All right. Sure.”
He was buddies with this guy. We connected, I talked to him and he completely wowed me. I finally met somebody that I could go toe to toe with on the short term rental side and actually educate me in the luxury space. I remember I talked to him and I was so fired up, and I called David. I was like, “Dude, I think I found him. I found the guy. He’s smarter than me in short term rentals and he’s going to help us.” And David was like, “Ha-ha, yes. This is exactly what I wanted.”

David:
Well, I think part of why you really liked him was he owns them himself. Right? He owned short-term rentals in the price point we were looking at in that area. I don’t think you could find a better agent than someone who literally is doing what you’re asking them to help you do. And that gets passed up a lot, is if you’re an investor and you’re looking to find a real estate agent to help you, and they are not an investor, you’re going to be frustrated a lot when you’re wanting information that they just can’t provide. So, I kind of wanted to turn that to you, Johnny, and ask, how much do you think your own investing experience played a role in your success representing people that were trying to do the same thing?

Johnny:
I think that played a huge role in my success because I personally wouldn’t want to go to someone for advice if they haven’t done what I’m seeking advice for. It just doesn’t seem productive to my goals. I think being able to convey the mistakes and the successes I’ve had, being able to convey what plans have worked for me and what plans have not worked for me, and being able to just speak with confidence when it comes to that because I have that experience, I think it’s definitely the game changer. I definitely think it’s contributed to 80% of my successes within this space.
I think it’s just a breath of fresh air when you know someone that knows more than you and knows someone that’s been there, done the mistakes so you don’t have to do those mistakes yourself, and really has a plan in place and has executed on that plan. So, I would say it’s a huge percentage of my success in this space, David.

Rob:
I wanted to quickly kind of ask a follow up here because obviously you’re crushing it. You’re crushing it in the realtor game and you are also investing. For you, personally, where are you at right now? Are you want to heavy up in investing? Does the idea of investing fuel your desire to be a realtor? How has that arc really panned out for you personally, Johnny?

Johnny:
Yeah, sure. I feel like they both coincide with each other because I do enjoy helping other investors get started in their journey, but I also do really enjoy buying houses and building my portfolio for sure. But I think both of them coincide with each other. For me personally, I want to have the opportunity to help over a hundred people this year and I also want to have the opportunity to have 50 doors at the same time. To answer your question, Rob, it kind of coincides with each other. Because the more I learn from investing, the more I can then convey to clients as well. It just feel like a full circle in my opinion.

Rob:
Awesome, man. That makes sense. I like to see that you’re still wanting to grow, right? Because this is the same thing that I went through with my Arizona realtor, where he’s got a property management company where he manages 60, 75 luxury properties. He owns six luxury short-term rental properties and he’s a realtor. I was just like, “Why are you doing this to yourself? Just focus on any of those three things and you’re probably going to be fine.” I think he just genuinely love connecting with investors, especially investors in his specific niche because they’re few and far in between.

Johnny:
Yeah. [inaudible 00:35:21] really cool about the resale space is like, through the mentorships that we can provide to people and seeing them grow, it’s like I bought the houses to be honest. We’re bouncing ideas off of each other. We’re coming up with these game plans, and just seeing them actually come to fruition, it’s like, damn, that’s basically like my deal too. I always like that creative side of real estate where you can come up with different plans, whether that’s buying a single family house, chopping it up into three different units and really extracting the cashflow and seeing it all come to fruition. It’s pretty cool to me. That aspect of the business, I enjoy a lot as well. Just kind of the more project management side and kind of the more visionary side, if you will.

Rob:
I’ve got to imagine that, in your journey now, you’re on year two, as we’ve talked about, you’re crushing it. Year one, I have to imagine, was the year that Johnny marketed the heck out of himself. You were just out there marketing and building your reputation and your brand as a realtor. Year two, I got to imagine that maybe it flips a little bit where you don’t have to market as much and people are finding you. So, can you give us an example of how we find our Johnny, how we find this unicorn realtor that is seasoned investor that knows about cash on cash returns and house hacks and appreciation, all that kind of stuff? How do I find a good realtor like you?

Johnny:
Yeah, I would say, first and foremost, BiggerPockets, going through their forums. What I really like about their forums is because you can see how other people are … How helpful they are. I’ve had countless times where people would reach out to me from an old post that did two years ago about house hacking or about one of my flipping posts. And they just reached out because they thought my answer was very constructive and it was very helpful to them. So, I would say, for me personally, I like to scavenge through the BiggerPockets forums and look for agents that are having these good responses and people that convey that they know what they’re talking about within their market.
Agent Finder is a great place to do that. And just reconfirming that again, what the responses they have within the forums. Outside of that, I really like what you did, Rob, because that’s something I’ve done in the past as well. Just call different brokerages, different high producing brokerages, and look for the top producing agent. But I would say nine out of 10 times I did that, they always referred me to someone else. Because the top producing agent is typically pretty busy, and I think coming from a more investment background, they just wanted to refer me out to like another producer.
But to summarize everything, I would say use the forums that … Use it as a resource because it’s a really big one. That’s where I found most of my business and one of realtors, I should say. Then use your technique of just calling different brokerages and trying to find a top producer and interviewing the one that just makes the right fit for you.

Rob:
I do want to touch on the power of a good forum. I mean, just in the past couple years, I’m an online guy, I like being online. I like talking to people on the internet. I’ve posted so many things on Reddit that years later, people will still send me DMs on Reddit and say, “Hey, I really like this tiny house or the shipping container that you’re building,” or whatever, and all that kind of stuff. It’s so crazy, the DMS that I get, exactly the same way on the BiggerPockets forum too, where if you put thought into your post, if you post something or you have an answer that’s just super well thought out, the amount of DMs that just come from that, people that are just wanting to pick your brain on that subject, or work with you, it’s really pretty impressive. I think.

Johnny:
Yeah, it stays there too. Right? I mean, I don’t know what type of backend work BP does, but my post that I get a lot of traction about was almost like from four years ago. Now, I’ve seen some posts date back to like six, seven years ago that I still refer back to, and I’ve screenshotted to put into my syllabus. Those posts are there forever. So, it’s a good way to market yourself without having to really market yourself in my opinion.

Rob:
Yeah. What about you, Dave? I mean, obviously you gave me the secret sauce here.

David:
When I wrote Long Distance Real Estate Investing, I put in there several ways that you can find top producing agents or people that will help you. One of them was using BiggerPockets, and it was just like Johnny said, is you go through the forums, you look for people that are engaged, and when you call them, here are some questions that you ask. A common mistake that I see is people assume all agents are the same and you just grab the first one you see and then you go look for the house. What happens is you end up doing all this time and energy and effort and emotion looking at properties, and then you send them to your agent to say, “Tell me this, tell me that.” And you wear the agent out and then they just stop responding to you.
Then you start calling the listing agent yourself and you start saying, “What about this? What about that?” And the listing agent’s like, “You’re not my client. You have your own agent. They should be finding that out.” And you end up in this agent purgatory where nothing’s getting done and you can’t figure out why. I look at it differently. I look at it like an agent is an asset, just like the real estate is an asset, and I have to go hunting for it. I can’t just assume every deal’s the same.
I can’t treat people like that either. I have to find the agent that will help me. The one you found for us, Rob, is an asset. When we looked at our numbers, we thought, these are too good to be true. There’s no way that it’s going to generate that much revenue. And he came back and said, “No, that’s probably the low end. It’s probably going to do more than that based on these six properties that I own myself.” And the 50 properties that are managed, that he has access to seeing that data.
Johnny is an asset. He owns property in the area that he’s helping people in. He knows what they’re going to rent for. He has contractors that he can refer you to that can do a lot of this work. He can even help you with what the bid would be or what the approximate bid would be to convert a basement or add a bathroom. He’s that knowledgeable because he does this. So, you got to put the same effort into finding your agent that you do into the property. You start with that. You look for the agent first. There’s a lot of frustrated people that are frustrated because they’re going at it the wrong way.
Now, one thing that is available now that wasn’t when I wrote Long Distance Investing is BiggerPockets has actually created a way for you to find an agent faster. Rather than having to just go through the forums and look for someone that might be in that area and might be good, you could go to biggerpockets.com/agentconnect, and then type in the area that you want to invest in. And it will pull up a list of agents that are also BiggerPockets members.
I really like that, because if they’re a BiggerPockets member, they are more likely to understand real estate investing than if they’re just someone that you found on Zillow or another site. You also can then see how many deals they’ve done for other BiggerPockets people. So, if they’ve done zero deals versus my profile, which probably has a hundred or a couple hundred on there, you can see how much action we’re getting and then you can read reviews from the people we had.
You can look and see what properties other clients bought, right? So, if you go look up our profile for The David Greene Team, you’ll see, these are the areas that we helped clients in and these were the houses that were bought. You could do a lot of the research right there because BiggerPockets made it easier. Now, you still have to do the research. You can’t just find any agent on BP and be like, “Well, they’re a BP agent so we’re good.” That would be like just finding any house that’s for sale on any platform and assuming that it’s going to be good.
But when you … I get all the time, people will email me and say, “Hey, David, what am I supposed to do with this? Will the bank approved me for this kind of loan?” The answer is usually, “Well, did you ask your loan officer?” “No, I didn’t ask them. I thought I had to know.” No, their job is to tell you that or tell you how to do it. Why are you asking me a question about title. Your title company is supposed to tell you that. And there’s just this thing with investors that think they have to do it all.
Now, if you’re looking for off market deals and you’re trying to put together creative things like seller financing, because you’re not going to get a conventional loan. In that space, you do sort of have to operate by no everything yourself. But if you’re looking at something on the MLS, you should have an agent that can direct you to what to look for. They should have connections for a lot of the things you’re going to need.
The loan officer should help you the same way. And I just want to encourage everyone who’s trying to pick up some traction, if you’re having a hard time it’s because you don’t have a Johnny. If you had a Johnny, you would just say, “What can I expect to this market?” And Johnny would tell you. Well, how much would it cost to fix that? It’d be approximately 30 to 50K. Well, what would that do for the rent? It would be about this much. You get a really good understanding by using the experts. And there’s too many people in our field that don’t understand the asset class of real estate.
Rob, I know you have seen this with as much real estate as you’ve bought, where you come across that agent and you think, I know more about this than you do, and this is your job. It’s maddening. I wanted to kind of throw that back to you, Rob, and then to you, Johnny, what are some things that you have noticed when you picked the wrong agent that lets you know, I need to move on and find somebody else?

Johnny:
For me personally, well, we’ll start with, what’s wrong in an agent? Or what I find to be not as attractive in an agent. My expectation of an agent is to find the correct deals for me and convey why the deals will work but based on the criteria I’ve given him. Red flags for me is someone that’s not communicative, someone that doesn’t send me deals, someone that doesn’t put an effort to be in front of me.
Versus a good agent, I’ve noticed that is one that’s constantly sending me deals. Hey, Johnny, this is one you should buy. These are the reasons why I should buy it. Here’s the Rentometer. Here’s the P&L. Worst case scenario, I think you’ll be here. Best case scenario, you’ll be here. It’s literally just like laid out for me like, oh crap, he put everything together. They’re in these organized folders. And all I have to do is reconfirm the math, do my due diligence real quick and say yes or no. That experience works really well for me.
I’ve noticed that when I’m on the other side as a real estate agent, helping our clients, it works really well for them as well. Because they’re coming to us looking for some type of guidance. Of course, as a client, you still should have a game plan in place and double check everything. But I really like the experience where they lay everything out on the table and it’s as simple as yes or no. And I think that’s what makes a good agent, someone that does a lot of good follow up and someone that can just lay everything out for you and consistently provide you deals where you can look at it and review everything they’ve given you, and it’s as simple as, does it meet my criteria or does it not? And you say yes or no.
I think the ones that create challenges are the ones that just blindly send you deals and say, has a little bit unpermitted work. I don’t really know what to do with it, but let me know what you think. That becomes an issue of, okay, now I got to take time from my W-2 job and look at this and spend hours researching about it, which it is part of the game. It is part of buying real estate, but what I would prefer and what I find in a good agent is someone that has listened to me in the very beginning and conveyed all the items that I need to understand to be comfortable to move forward.
Switching it back to the client side, I think that’s very important too, to be able to come to the agent with some type of general consensus of what you’re trying to do. Not saying like, “Hey, I have to 20K. I’m not really sure what I want to do. I don’t really know what the next couple years look like. Can you just find me a deal and get me a return on it?” Versus someone that says, “Hey, Johnny, I have about 50K. I’m looking to reduce some of my living expenses. I’ve looked through Zillow and looks like the price points of these homes are 800.”
“I’ve talked to a lender, they said I can get approved for 800. I’m just trying to figure out how to get started. Can you help me?” They’re vastly different in terms of the two outlooks. So, to summarize my thought process there, I would say a good agent is someone that’s proactive, someone that’s communicative, and someone that just lays everything out for me so I can make an easier decision. A bad agent is someone that’s completely opposite of that, that’s not as responsive, that gives me an extra job when their job’s supposed to be making me more comfortable and making me understand that this is the right deal for me or not. That’s basically how I’ll grade the two different sides.

David:
What about the clients, Johnny, that are going to ask you to do a lot of research that you may think is not an agent’s job? Before Rob you answer, I just want to get Johnny some follow up. What are something people will often ask of their agent that you would say, that’s something that they should be doing on their own?

Johnny:
I would say, although I know a lot about permitting and how to do those things, because I’ve done it multiple times personally, I still think a client or a newer investor, they should put the legwork to do it themselves the first time around so they can understand how that process works. Although I do run numbers for our clients, I always tell them, “This is what I came up with. These are the tools I use. I want you guys to then do it yourself to see what you come up with.” And we can both put our heads together to see if it makes sense.
That was kind of not a direct answer to your question, David, because I think it really depends on what type of expectations are set in the beginning. Because I do have clients that they’ve purchased a couple deals, and they’re like, “Johnny, I just need you to send me a good deal, give me the rents, and I’ll run everything else myself.” Then I have the other end of the spectrum where they tell me, “Johnny, I really want to learn how to invest. Can you walk me through what it looks like for the first couple deals and show me how you run the numbers, and eventually I’ll get to a place where I can do it myself?”
It’s hard for me to directly answer that question because it’s different for every client. But my standard answer to that, I guess would be, whatever you’re trying to figure out from your agent, you should try to look for the answer yourself from two different resources and then go to the agent to ask them. But it also, again, ties back into what expectations were set from the very beginning and what that communication log looks like between the two of you and what you decided on before working together. Again, David, that was kind of a running around to your answer because it’s just so different client to client.

David:
No, I was more getting at the idea that a client may say, “Hey, agent, I’m not pre-approved and I’m not going to get pre-approved until I find the perfect house, but here’s 50 houses I want you to show me. And I just want to text you randomly and have you take … Because that’s your job is you should take me to see these homes.” Then you go look at the house. You say, “What do you want to do?” And they say, “Oh, I’m not in a rush. I’m just going to wait and see.” And you find yourself in the situation where the client is kind of running the show.
And they’re telling you, “This is what I want. Go do it for me. That’s your job.” You can see, as the agent, they’re never going to get success from that. At what point do you feel it’s appropriate for the agent to put their foot down and say, “If you want to hit your goal, the way you’re going about this isn’t right, that’s not something that I can help you with?”

Johnny:
Immediately. I feel like you have to do that right away. Right away, upfront. Because at that point, you’re setting the wrong expectations, and then the relationship is just going to be bad throughout the whole time period. It’s funny because I think a lot of agents do this. I feel like, when you’re working with clients, and this is for clients as well, you’re entering into a partnership where you guys are both helping each other build wealth,.
Whether that’s through someone that’s selling the house or whether that’s through someone acquiring their property, you’re still in a partnership together. So, you have to lay out all of those things and really, really find a level of commitment on both sides, right? Because it’s just, it doesn’t make sense for someone that’s not pre-approved, but expects an agent to show 50 houses to them, because it just shows that you’re not committed and you’re not committed to making this partnership work.
I feel like people should understand that because time is very important and you should enter into a partnership with someone with a win-win attitude. So, in that situation, David, to answer your question, I think you really have to have that difficult conversation up front and immediately because that’s just going to tarnish the experience for both people as you get further into it.

David:
Rob, same question to you. When you are working with an agent, what are some of the red flags that you notice and you think, “Ugh, I don’t think this one’s going to work out, I need to cut bait and find another one?”

Rob:
There are a couple things here. I would say one, I do like to know that they have some investment experience. I mean, it’s not required, but I do want to know that they play the game a bit. That way they’re not just speaking to me in conceptual terms. They actually have tactical things that they can help, anecdotes like Johnny has, that helps me understand certain situations. That would be one. Two would definitely be the Rolodex. Hey, do you know a contractor that can help me with this basement conversion or a landscaper that can help me de-weed this plant box, or an electrician that can help replace that floodlight?
If the answer is no on the majority of those vendors, I’m just going to move on because it’s so much easier for me to find somebody that knows all these people. That way I don’t have to Google electricians, landscapers, pest control, all that kind of stuff. It’s very helpful. But really, I would say there’s two things that really irk me when I’m looking for my realtor. Thing one is when I call and I lay out my expectations and what I’m looking for. And I say, “Can you put me on a list?” And they say yes, and then they don’t put me on the list. That’s very frustrating.
Usually, I give it about a week depending on how urgent it is. And if I follow up and say, “Hey, haven’t gotten that list yet.” And then they say, “Oh so sorry. Yeah, sorry. I’m working on it.” And if they don’t send it again, then that’s basically, I’m like, okay, I’m going to move on. That would be one thing. Second thing here is whenever … And I’m a little bit more flexible than Johnny here. I mean, I don’t necessarily expect a deal to be outlined because I can do my own research.
But there’s a really big difference to me when a realtor out a deal, right? Like crazy off market deal. And I’m on BCC list. Versus when they shoot me a text message with a deal that they’ve picked out. Like, our Arizona realtor, he texts me houses from Redfin all the time.

David:
[crosstalk 00:52:43], Robby.

Rob:
When he sends me a Redfin listing, I’m like, oh, he actually was in the Redfin app. And he said, “Rob would like this.” And then he sends it to me, and I’m like, oh, this fits my criteria. This is exactly what I was looking for. He doesn’t have to bring me the off market juice. It doesn’t have to be the craziest off market gem. I just want something that’s curated based on my expectations.

Johnny:
I love that you said that, Rob. I really do because I think that’s what separates a successful agent versus a unsuccessful agent, is someone that’s more proactive in just sending the deals and not just putting people on listing alerts. I know that was your first thing. Because part of what I think made me very successful in this space is, what I’ll convey to the clients is, before we even hop in a car to go view any houses, I’ve already done some research on it to see if that meets the criteria that you’re looking to get into.
For example, if we’re going to go look at three houses, I’ve already called the listing agents ahead of time to understand what offers we have to be at, what type of offers are coming in, if they have any special terms, like a rent back for example, and just see that those type of turns meet what the client’s looking for. Then once I do all that research upfront, I’ll present it to the client because we know that we have a good shot at it. I know that, this is more advice for the agents, I know that takes a lot of upfront work, but it creates such a good experience for both people, right?
Instead of going to all these houses and then finding out after you view 10 houses, you only have a shot at maybe one, right? Opposed to just canceling out all the noise and digging deep and doing that upfront work to provide a better experience for your clients. I think that’s another thing clients should look for as well, is someone that can do that research on the backend and bring deals to you that are tangible.
Especially in a high appreciating market where it’s very competitive, half the time you don’t even know, this is what people have told me, half the time their realtors took them to places they didn’t even know they can compete against. I think that’s another thing to look for in an agent and that’s another thing to do as an agent, because it just saves everyone so much time and creates a better experience.

Rob:
Awesome, man. Well, I really like to hear it from the other side, Johnny. I appreciate you putting it out there because I’ve learned a lot, even just doing this podcast. That my expectations or what I want oftentimes, aren’t necessarily realistic, and it’s because I don’t just sit down and talk to my realtor and say, “Hey, what would you like to see?” I think you summarize it perfectly. I don’t actually hear a lot of people say that it’s a partnership. I’m in a partnership with my realtor.
I have to put forth effort, and so do they. And if they put a lot of effort out there and I don’t reciprocate, well, they’ve just put a lot of time and wasted it. I think, if you could start thinking of your realtors as partners in your investing journey, that will be a very fruitful relationship for many, many, many years.

David:
All right, Johnny. If people want to reach out and contact you, I know you’re pretty active on BiggerPockets, but let’s say that they want to use you as an agent to buy or sell a house out in this area, how can people find out more about you and where can they reach you?

Johnny:
My Instagram handle is investingjohns. Spelled I-N-V-E-S-T-I-N-G-J-O-H-N-S. And yeah, that’s how they can reach me.

Rob:
And by the way, do you happen to know your BiggerPockets profile name, or your username, or handle on there?

Johnny:
Yeah, so they can find me at [email protected] That’s spelled J-O-H, and then [email protected]

Rob:
Awesome. What about you, David? Where can people find you, my man? And how can people find you on the BiggerPockets forum too?

David:
I’m not too hard to find on BiggerPockets, believe it or not. If you search for David Greene, you should be able to find me. I think my profile name on BiggerPockets is also davidgreene24, just like on all social media. My YouTube is youtube.com/davidgreenerealestate, but everything else is davidgreen24. And if you are an agent, if you’d like to get trained by us, if you’d like to join our team, if you’d like to join what we’re doing, please do reach out.
Johnny is a great example of what it looks like when you get an agent that loves real estate, invest in real state, wants to help people, and is pretty smart, and they all come together. And he’s one of the top 100 agents in the biggest real estate brokerage in the world in his second year. Johnny, I’m very proud of you. I’m very glad to be in business with you, and I appreciate you joining us today. Rob, I got to say, I’m proud of you too. You asked some really, really good questions.

Rob:
Thank you. Thank you.

David:
I thought you were going to say, do realtors poop in the toilets when they’re showing homes? No one knows, and I was wondering if that’s where it’s going to go, but you actually avoided the poop joke and you stuck to really relevant stuff.

Rob:
Well, I did ask it, but it was edited out in post, so what can you do?

David:
All right. Well, thank you very much, Johnny. Anything you want to leave us with before we get out of here?

Johnny:
No, I think this was a great talk. Thanks again for having me, guys. This was awesome. This was very surreal to me. Yeah, my utmost gratitude to you, guys.

Rob:
Awesome, man. Well, thanks so much.

David:
All right. This is David Greene for Rob poop joke Abasolo, signing off.