June 2023

Dave:
Hey, what’s going on everyone? This is Dave, your host of On The Market, and today we have a super fun show for you with Kathy, Jamil, James, and Henry. We are taking listener questions. We’ve got some incredible questions from all of you to answer today. I actually went out and assigned each question to one of the panelists, so they did some research and then we’re going to debate each of the topics. We have some phenomenal questions submitted by all of you, so thank you for submitting them. We’re going to be talking about all sorts of different topics, everything from how and when the housing market might be bottoming, whether ADU laws that are supporting the building of ADUs are actually improving affordability.
We’ll be talking about how to guide your investing 10, 20, or even 30 years down the line. We’ll talk about demographics, why lenders don’t undercut each other, and at the end, we’re even going to predict what asset class is going to perform the best over the next three years based off market fundamental. So this is going to be a phenomenal show. I hope you all stick around, but we do have to take a quick break and then we’ll get into your listener questions.
Welcome back to On The Market. Today we have seven listener questions from you all. I asked people on Instagram what they wanted us to discuss today, and I got tons of great questions. We picked seven that we thought were interesting and applicable to our national audience, so keep an eye out for that either on my Instagram or on the BiggerPockets Instagram. If you have questions for the panel, we’re going to be doing more shows like this and we’d love to hear what questions you have. So the way we’re going to do it is we each one of us picked topics that are within our wheelhouse, and so I’m going to ask the questions and then each one of us is going to answer it and we’ll have a few minutes to discuss or debate for each of the topics.
The first question is how should we think about the bottom of the real estate market? Ben, back in the great financial crisis, the housing market bottomed in 2012 compared to stocks that bottomed three years earlier in 2009, and that is accurate. February of 2009 is when the stock market bottomed. February of 2012 is when the Case-Shiller index bottomed just three years later.
Personally, I don’t really think this is an indicator that I would watch because it really matters when you think about these two different asset classes, what was going on in the context of that big correction and yes, crash. And I think the difference in what happened in 2008 that’s different from almost every other recession that I’ve looked at is that housing actually led the country into the recession in 2008. It was a housing based crisis where bad loans and speculation cratered the rest of the economy and so because housing was the source of the problem, it was also took the longest to be fixed.
If you look back at other recessions like the sort of the dotcom boom where the stock market went down from about 2000 to 2003, during that stock market decline, the Case-Shiller index never declined at all. So that just shows that housing prices weren’t really affected by stock prices in that instance. If you look back to a previous recession in the early ’90s, you can see that although housing prices did go down in the early ’90s, they went down about 1%, whereas the stock market went down about 15%.
So I don’t think these things are really all that correlated, at least historically, the Great Recession was just different because housing was the source of the problem. That is not what we see as the source of the problem right now. Housing is being affected, but I don’t think it’s the cause, and so I wouldn’t really think too much about trying to identify that housing bottom based on stock market performance. But curious if any of you think differently.

Kathy:
Yeah, I think they’re two very separate things. One of the big differences and changes that we’re seeing recently is the Fed seems to be more supportive of the stock market than ever before. And we talked about that on the Chris Martenson episode that we did here. Check that out if you haven’t seen it yet. But there were some changes made after the last recession that seems that the Fed is very accommodating to make sure that the stock market stays afloat.

Henry:
I agree with you, Kathy. There’re two separate markets. I think it’s smart to realize that there’s a shift happening within the stock market and then use that as a trigger to help you and go and research what’s causing the issue and then see if those triggers are affecting the same triggers that you would look for in the real estate market. But just because the stock market is going down, it doesn’t mean that real estate is going to follow suit, but I think again, I think it’s great to understand what’s happening in the stock world and then do some research to make sure that those what’s causing the stock market to go down won’t also have an implication on the real estate market.

Dave:
Yeah, generally speaking, I think if you’re looking for a bottom, we may have already hit it, it’s uncertain, but as soon as the Fed starts lowering interest rates pretty confident that will be a for sure bottom, but we’ll see. All right, next question. This one is for you James. This is something that has impacted your home state of Washington. The question is, can you tell us about the proliferation of pro-ADU, which stands for accessory dwelling units, that’s basically like when you build an extra unit in your backyard, something like that at a DADU mother-in-law suite, whatever you want to call it. So the question is, can you tell us about the proliferation of pro-ADU laws and what, if any effect they have had on affordability?

James:
Yeah, the ADU laws, it’s been a huge transformation of our city. So basically in 2019, the city really started or they realized that we’re going to have a mass shortage of housing and people can’t afford what’s being built there right now. Seattle, Washington needs 55,000 houses added to the rental market every year or properties for it to keep up with supply. And so that’s a big, big demand. And so what they’ve done is they’ve actually just recently, so in 2019, they started passing these rules where you could build a accessory dwelling unit on the back of your property. That started working, so they started doubling down on it and it allowed you to actually get more density throughout Seattle.
What this really comes down to is just density, what you can build on your lot, but they put in restraints on the size of properties you can also build because now you can no longer build a little mini mansion in Seattle. You have to cover a 50% far coverage, which is the amount you can build. So they’re really motivating people to build smaller units because it will provide more housing. The effect on affordability I don’t think has had any impact whatsoever, and there’s two main reasons for right now.
The reason being is the buyer demand was higher than everyone thought, and they thought that these units would be a lot cheaper, and they’re not. They’re selling for more than town homes. They’re in higher demand than a shared wall unit, and so they’re selling for 10 to 15% more than the product that they were trying to be even cheaper than. And so if we’re in a core neighborhood in Seattle, we can build them for 350 grand to 400 grand. We’re going to sell them for about 775 to 850, those are our metrics right there so that works. But the problem is you’re still spending $850,000 on a two bedroom, two bath, 800 square foot house.

Dave:
It’s wild.

James:
And so it’s not that affordable. It’s the highest price per square foot. And then the other issue is you can’t build them cheap enough to work in the affordable neighborhoods. If I build that same product for 400 grand, that thing’s only going to be worth 350 and the rents aren’t going to cover nearly what the debt cost is going to be. And so we’re kind of in this middle of the road issue right now where it’s creating more property for people to buy, but it’s definitely not affordable.

Dave:
That’s super interesting. Yeah, it’s kind of impossible to prove the counterfactual. You have no idea if prices around the city would go up if this didn’t happen because the more supply, but I think it’s really a good point that in the affordable neighborhoods it still just doesn’t pencil out. So even in the areas where it is needed probably the most, it doesn’t make sense. I heard some, I forget who, we had a guest recently who was talking about this and was talking about how one of the main things that would really help is if Fannie and Freddie would allow you to count future rental income when taking out a loan because then just normal home buyers would be able to finance building these ADUs and it might be able to help get some more of these things actually built.

James:
Well, the funny thing is these rules will always be manipulated a little bit. Manipulation might be the wrong word, but it maximized I guess because they did this, so people could build a rental unit in their backyard per viable housing, but then in Seattle, they allow you to condo those off. So all you’re doing is doing a mini subdivision and selling it off for a higher price. And so it didn’t add rental units, it added more units to sell, and so each city is starting to adapt that too, so the rental units might not be there anyways.

Dave:
All right, great. For our next question, Kathy, is there any data to guide long-term real estate investing 10, 20 or 30 years down the road?

Kathy:
Well, my answer is I’ll just let the numbers give the answer. I went back and looked at the Fred basically home sales numbers or home price numbers over the lifetime of my life. So five decades, actually almost six. So going back to 1964, the median home price was $18,000, you guys when I was born, and then by the time I was 10, it had doubled. In just that 10 year period home prices were $35,000. Then by the time I was 20, they almost doubled again, $78,000. Then in ’94 they went up to $130,000. In 2004, $212,000 that’s when I kind of basically started investing. I remember saying that on one of the shows, that’s the home price.
So moving forward to today, the average home price according to Fred, again, $436,000, this is taking in all kinds of units, including new homes. So if I take those, I just decided to go with something more conservative, which would be a 40% increase, not doubling, but if prices just went up 40%, which would be the lowest over the last six decades, by 2034, the median home price would be $610,000 by 2044, $854,000, and by 2054, almost $1.2 million for the average home. And that’s again, using very, very conservative numbers.
It’s hard to imagine that, but it was hard for people to imagine in ’64 that a values could double from $18,000 to $35,000. So the bottom line is that the dollar is being devalued every single year. So it’s not really so much that home prices are going up or that property’s becoming more valuable. Just your purchasing power is weakening every single year. And we know that that’s not changing at all with this issue of the debt ceiling that we’re facing right now where, well, nobody wants to cut costs on anything.
Republicans want to make sure that we’ve got a strong military budget, and of course the Democrats want to make sure that there’s social programs and nobody wants to cut anything. So the debt ceiling keeps increasing, but you can’t keep increasing taxes or else people would have nothing to live on. So the way that the government deals with all of this spending is printing more money. So it’s not going to be anytime soon that we stop seeing the dollar devalue, it’s going to continue, and therefore these prices are going to look like they’re going up.
So that’s the best. Nobody can predict the future, but when you take six decades and just average it really low of what could happen, that’s what could happen. That’s why I think if you’re not getting into the housing game now, it is not going to get easier. It’s just going to keep continuing, especially now that, like I said, there’s kind of a baby boom happening in certain areas in Texas for sure, just look that up, baby boom in Texas. I already said Salt Lake. We are seeing population growth. Some people say it’s on the decline, but we’re still growing and certain areas are growing faster than others. So if you really want to take advantage, you want to be in those areas where there’s job and population growth that would continue over the next few decades.

Dave:
Definitely a baby boom in my group of friends. So anecdotally, I can definitely support it. Everyone I know has had a baby in the last three months, but it’s great. But Kathy, to your point, I think it’s a great point that the housing market fluctuates and we are in a unusually volatile time, but if you just look at the median home price of the United States, go look it up. Go to the FRED website and look at the median home price of the United States back 50 years, and that will tell you what you should do with real estate investing, it’s really not that complicated.

Kathy:
And there’s been recessions, massive recessions during all of those decades. Each decade there was some kind of recession and it was pretty terrible at the time. And yet you’re still seeing those home prices nearly double almost every decade. It’s incredible. So it is hard to believe that by 2054, my grandson’s going to have to pay a million dollars for an entry level home, but that’s just what we’re going to be dealing with.

Dave:
All right. Well, thank you Kathy. Henry, the next question is for you, the question is what is the federal solution to a broad pathway to affordability, ie, a 40-year mortgage restrictive invest? What is that?

Henry:
Those are just examples.

Dave:
Do you think that means restricting investment with them?

Henry:
No, I think it’s more about what the government has done with the FHA kind of restructure. So I think the general question is what can or is the government doing about affordability within the real estate market for the average home buyer? Yeah, I mean, obviously one of those is the FHA mortgage restructure program, which is a start, but there’s some restrictions. It’s not available to everybody. You have to already have an FHA insured mortgage and you have to be current on your payments to qualify. And then if you are, you’re able to restructure into a 40-year mortgage, which can help with affordability because now you’re stretching your payment out over 10 more years, which helps your monthly payment go down. But the trade-off to that is you’re going to pay a lot more in interest now because you’re stretching that interest out over another 10 years.
And again, it’s not available to everybody or all the borrowers. So you already have to be a homeowner essentially to qualify for this. And so if you think about options for what the government can do to help affordability, we’ve talked about this on a previous show, I don’t think affordability can be solved by one party. I don’t think just the government can solve affordability. I think the government partnered with builders and investors and the people who need to afford those homes, I think all four groups have to come together.
And when all four groups come together and work in each other’s best interests, then I think that’s when we can start solving the housing affordability. And what I mean by that is everybody’s only looking through their own lens. And so if the government wants to enforce restrictions on what builders can build, then there will be less builders because builders are building for a profit and city and local governments, that’s who also has to be included. And so a well-rounded solution would be the government provides tax breaks to builders and or investors. The city and local government helps provide either tax breaks for the buyers or tax breaks for the builders.
Maybe they offer discounted land and some city and local governments are doing this, offering discounted land where builders can then build in those areas and get tax breaks and the tax breaks help offset what they would lose in profits because if they’re going to have to build something that they can’t sell at the tippy top price in order to maximize their profits, and there has to be some other reason for them to be able to do that.
And so if there’s a tax incentive and the city and local governments are helping to supply land, and then we help educate the general public on what they could be doing from a financial perspective to improve their financial situation, you put all those things together and you can really help and start to fix affordability. Now, the likelihood of that happening anytime soon, probably not too high. So in the short term, some of the things that can be done are providing incentives to tax breaks to renters. If they don’t have to pay as much in taxes, there’s more money in their pocket to be able to afford rent.
And then just expanding so when you think about affordability, there’s, can I afford the monthly payment? And then there’s, can I afford the down payment? And for the typical buyer, those are two separate things because if I can afford the monthly payment, but I can’t come up with 50 grand for a down payment, it doesn’t matter what the monthly payment is, I can’t get to that 50 grand. So having some sort of expanding access to down payment assistant programs, so there can be maybe some government down payment assistant programs that we can push out nationwide to help with the down payment, and then offering a 40-year mortgage to everyone. Expanding the years of the length of a mortgage isn’t new.
The 30-year mortgage was introduced in what, 1934? And before that, the length of mortgages were like five years. So because what Kathy talked about was happening every 10 years, real estate was doubling, it was becoming more harder and harder for people to be able to afford homes, and so they had to expand the mortgage length to something where people could afford it. And so it wouldn’t be unprecedented for there to be a 40-year mortgage program for the general public in the coming future. I think it’s going to be here. I think it’s necessary because I don’t know how else you’re going to be able to combat the rising home prices. And again, if those interest rates start to come down and that buyer demand is going to go up, that’s just going to drive prices even higher faster so-

Dave:
Yeah, I mean, I agree with you that it should be an option to people, but I also think you brought up a really important point that a 40-year mortgage just means people pay more interest over time. So although it is, I think people should have that option, if they want to choose that, that’s fine. But it isn’t like the best long-term solution in my mind, it could help in the short term just because that’s just putting more money in lenders pockets over time and helping and not necessarily fixing what I personally believe is the big issue, which is a lack of supply.
And you talked about some of the big issues that we need to handle. I’m curious because the question was is about federal, and you mentioned a lot about state and local governments, and I tend to agree that that’s probably where the solution will go. I don’t know if anyone has any other thoughts if the federal government can do anything else.

Jamil:
If you look at what happened in LA, they tried this. The state tried to come in and build units to see if they could affect the homeless situation there and these small little units that they were building were $800,000 a piece. Just think about the amount of waste that had to have happened for that, and we’re talking 400 square feet. 400 square feet for $800,000, what is going on? So there’s just, people are not incentivized at a state government level to be able to be efficient. You’ve got to put the efficiency in the hands of the business people who understand how to do that correctly and efficiently to make it make sense.

James:
Government should not be building housing. It’s got to be together.

Dave:
Yeah, yeah, exactly, but James, you talk about this a lot. You said it just earlier that it’s not affordable to build an ADU in a neighborhood that needs it. So the question is, is it through government’s role then to help incentivize builders to make it profitable so that they can build and help provide a service or a product that is needed?

James:
Yeah, I think, incentives are great. That would help fix a lot of things. They just have to have the right incentives. The problem is the incentives you get have zero impact. It’s like, oh, they’ll subsidize certain things, but they’re still so far disconnected with what actual bill costs are. The funny thing is what Jamil just said that LA was building these for so expensively, but then they expect us to build it for cheaper than a fourth of what they could build it for to keep the cost down. And so it’s like, they’re just unrealistic incentives and expectations and it would make a big, if policy could change everything, but they just got to have that critical conversation. They got to get everybody in the same room and have that solution figured out, not just dictated.

Kathy:
It needs to be more streamlined, less red tape. I think I told you guys about an apartment we bought for, it had 220 units and we wanted to increase density to 800 units in Mountain View, California across from Google where’s it’s desperate, the housing is desperately needed and we were putting aside 30% of those units as affordable, and yet they still blocked it every step of the way and it became too expensive for us to build it. So we didn’t.

Dave:
I saw in Florida, they just announced a law that I think is going to overrule local municipalities to stop them from limiting increasing density. So if people are trying to increase density in, say a town wants to stop it, the state government is preventing that in some instances in Florida now, which is an interesting approach to the “nimbyism” where people all want affordable housing, but they don’t want it next to their house.

Kathy:
But I kind of get that too because you also have resources that are going to be used. There’s only so much water, there’s only so much room for cars and parking and so forth so I also understand the regulation side. It’s not an easy job, but there does need to be a way to streamline it for sure.

Dave:
That’s true. It was a very, very complicated question, but I agree, Henry. I think it’s really about getting the local people together who know what is needed and know what’s possible to try and improve affordability. All right. Let’s move on to our next question, Jamil, this one’s for you. Question is, what do the demographics look like after 2024? How do you see these demographics impacting real estate investors?

Jamil:
Well, that’s a great question and I again look back at what was the demographics of the buyers from 2014 to about 2022. And the largest share of buyers that we had were Millennials. This made sense. They were really cashing in on the cheap rates. They didn’t have large pools of equity and they hadn’t had the sophistication or at least the acceleration in their jobs to be able to have these really high earning jobs that allowed them to come into the housing market and make larger purchases or be able to absorb the higher rates.
And so it made sense that the Millennials were the largest group, but now with rates where they are, we’re seeing the Baby Boomers actually come in and take control of the housing market, and they’re doing that because many of them are repeat buyers. So they’re pulling equity from all of the housing appreciation that they enjoyed over the last decade, and they’re cashing in and buying their dream homes. And I don’t see that ending anytime soon with rates where they’re going and especially 2024 is not very far away. I think we’re going to continue to see the Baby Boomers lead that as well as Gen Xers who are still the highest earning demographic group in the entire picture here. They’re the ones, they’re more racially diverse, they have higher incomes. They are going to be along with the Baby Boomers, the most aggressive purchasers for homes in 2024, in my opinion.

Dave:
All right, so it’s the people who already have some money?

Jamil:
Already have some money. I think it’s going to continue to stay that way for the foreseeable future.

Dave:
Yeah, I don’t know. I don’t have any data to support this, but I imagine it’s really tough for younger Gen Z people, for example, to afford homes in this kind of climate right now.

Kathy:
And part of my research, I was looking at demographics and the people over the age of 65 will double from 52 million to 95 million. So that’s something to pay attention to.

Jamil:
Just to button up what you were saying, Dave, Gen Z right now, they are making up 4% of buyers and sellers so it’s a small amount.

Dave:
That makes sense. I mean some Gen Z is still under 18, I don’t even know.

Jamil:
18 to about 23.

Dave:
Yeah, okay. So I guess that makes sense, but I do still think generally they’re going to face a pretty tough time affording homes in this market. So in addition to 2024, I feel like a lot of people ask me this question about demographics. We are seeing a declining birth rate in the United States, and I have a lot of people ask if that will affect real estate valuations in the long run. And I’m curious if any of you have an opinion on that.

Kathy:
Yeah, I mean, it’s like I said, there’s certain states where there’s actually Baby Booms and that’s probably states where just a lot of young people are moving to and having babies. You have a huge Millennial population right at family formation age between 30 and 34. It’s the largest group of Millennials. So you would think there’s probably going to be a Baby Boom over the next few years. That’s at least my opinion. And then you have states where the Roe V Wade rollbacks where now they’re seeing Baby Booms in those states as well. So I don’t know. I know that historically, Dave, that’s what I was hearing is that there was a decrease. But I’m wondering if that’s going to change over the next few years.

James:
I mean, at the end of the day, don’t we still have a housing shortage and we can’t keep up with it? So I don’t know if it’s going to have too much impact on the housing market, but that’s definitely a stat you got to watch just for all sorts of different reasons as far as social security goes and other types of funding that can affect the whole economy of the United States. But I mean, we’d have to build more houses for that really to have impact.

Dave:
Because social security is just a Ponzi scheme and we need more people to be bored to pay into it.

Henry:
Oh, you’re going to get us canceled.

James:
So is it a clawback thing though? Do we get our money back from social security if it ends up being a Ponzi scheme?

Kathy:
Not if it runs out.

James:
I like to get my check.

Dave:
I mean, it kind of is a Ponzi scheme though. You literally, the whole premise is that more people are born and pay into it, and that funds other people’s retirement. I don’t mean that’s it’s a scam, it’s just dependent on more people entering into it than people who are retiring.

Jamil:
So new investors pay old investors?

Dave:
That’s exactly what it is.

Kathy:
You guys, the money’s not there. They’ve already said over and over that it’s going to run out. So unless they just print up a bunch more money, it’s not there. So I don’t expect to get social security and I don’t want it. I’d rather go towards social programs than to people who need it. And that’s one of the conversations that’s being had right now is maybe the people who don’t really need it should just not, just let it go. But no, I mean, they’ve stated many times that they’re running out and I don’t even think the money’s there. I think it’s just an IOU at this point.

James:
IOU attached to gold somewhere, some promissory now for gold.

Kathy:
Well, everybody says that you’re supposed to have 10% of your net worth in gold. We have a little bit. Rich is into it, but if you’re going to have something that’s sort of a hedge against inflation, I’d rather have something that cash flows or if I’m going to have gold, I’d just like to wear it. I don’t want to store it, but doesn’t cash flow, I don’t get it.

Jamil:
Kathy’s got like $5 million in gold chains.

Henry:
Yeah, she can only physically wear two chains, the gold weighs more than her.

Dave:
Henry, if Kathy put 10% of her net worth in gold around her neck, she wouldn’t be able to walk.

Henry:
That’s it. She’s done.

Dave:
All right, cool. Let’s move on to our next question, which is for me, which is why isn’t there a mortgage lender who offers lower rates to outcompete everyone else? I love this question. So basically when we see interest rates go up or we see bond yields go up, mortgage rates pretty much across the board follow suit, there is some variation between different lenders in different locations, but the reason, at least I believe that you don’t see anyone trying to undercut the market is because the risk is too high for any of these mortgage lenders.
So put yourself in the position of a bank. They have let’s say a million dollars to lend out and they have options on who they’re going to lend it to. One option is to lend it to you as a mortgagee, and let’s say that they’re willing to do that for these days, something around 7%, and although I’m sure you intend to pay your mortgage, there is some risk associated into lending to you.
On the other hand, right now, you could go out and buy a US government bond, which now that we hopefully have a debt ceiling crisis is the most reliable investment in the entire world that pays just north of 5% right now, the bank is thinking, I could lend to the US government. That’s essentially what a bond is, I can lend to the US government at 5 plus percent or I can lend to you at 7%, and that spread between 5 and 7% is basically what they would call a risk premium, that it is riskier to lend to you. And so they jack up the interest rate a little bit.
The reason they don’t undercut you is because they have better options. If they were going to lend to you at 6%, they’re probably better off from a risk adjusted return standpoint to just buy government treasuries or buy corporate bonds or to put the money somewhere else because it’s just not worth it to them. So that’s why I see it is because there are other ways for them to earn a better risk adjusted return. But I’m curious if any of you have other thoughts on this.

James:
Yeah, I think it’s also just because the rates have been bouncing around so much, there is no consistency and the more it bounces around, that’s just more risk. And the banks, yeah, they’re assuming worst case because I mean, right when these rates started jumping, they jumped three points immediately. They were well in front of the rate hikes and I think they’re going to continue to do so. It’s just not worth the risk because if you get caught with the wrong kind of debt, I mean that can be detrimental.

Dave:
Yeah, for sure. Especially you see that with banks right now, they’re all being a lot more risk averse in their lending given what’s gone on in the banking sector right now so that’s another reason that they don’t want to undercut the market because it would hurt their balance sheets. So great question though. Hopefully, maybe someone will do it, if someone will just start undercutting the market and offer cheap mortgages, but these types of capital markets tend to be very efficient and I think they’re very unlikely to do that.

Henry:
And I’d imagine if that happened, the qualifications for being able to land one of those mortgages would be through the roof. It wouldn’t be just everybody go get a 6% mortgage, it’s not going to happen like that.

Dave:
All right. Well, for our last question, we’re just going to all talk about this, is a open debate here. When you see the real estate market in three years, what asset class has the best fundamentals? Is it residential, multifamily, industrial? What do you see? Let’s just make the question, if you were to invest in the next six months, what do you think will have the best return three years from now?

Jamil:
I’m still betting on single family. In my opinion right now, it’s still the most aggressive real estate asset class and again, it’s localized in specific markets, but you can still make great returns, you can still get great deals. There’s a lot of opportunity and because it’s been able to be pretty resilient through what’s happened over the last year, I believe that it’s giving us signals that it’s strong. It’s a strong asset class to invest in. Look at what’s happening in commercial, it’s getting creamed. Look at what’s happening in coming around the corner in multifamily, a lot of blood in the water, but I’m not seeing that in single family. And so I still feel, to me, viscerally it’s the safest investment and that’s why I’m going to continue to double down on it.

Kathy:
Me too. I’m with you there. I have single families where it’s at for me, I understand it. I can get those fixed rates, but also there’s just not enough of it. And we do know that our population is growing, at least with the age group of people looking to buy homes and also right behind them, the Gen Z population as a whole is if you go to the whole population, it’s pretty big. So I think single family is, to me, one of the safer bets right now. And that’s why we have a single family fund and we’re about to start a bill to rent fund.

Dave:
Henry, what are you giggling about over there?

Henry:
I was just going to say Kathy’s got a single family fund. Her investors are listening, she’s like, “She better say single family right now. She better be singing single family from the mountaintops.”

Kathy:
But I do, I look at everything. I want to do something new and different, although that’s never usually a good idea, but I know industrial is probably going to do pretty well. I think certain multifamily will do really well. Certain areas, retail and office are actually going to do pretty well if you go into the suburban areas, I’ve talked to a lot of people who are killing it. It’s just for me, single family is something I know and understand, and I know that there’s not enough of it and people who want it, whether they’re going to rent it or buy it.

Henry:
I wholeheartedly agree. I tease you, Kathy, but you’re right on. I remember my first couple of years investing 2017, 2018, people were saying then single family’s not a real asset class. You got to get into multifamily and commercial and Jamil and Kathy hit the nail on the head, single to small multifamily, I think is the place where you want to hedge your bets right now because if something catastrophic happens, people still have to have a place to live, and it’s typically the most affordable asset class other than mobile homes.
And so I think it’s a way to hedge your bets. I think right now, especially, I’ve heard Jamil talk about this in the past, but that single family asset that’s got that 2 to 3% interest rate tied to it being the new asset class to try to acquire, I totally agree because then you potentially getting some additional cashflow and I think it’s the safest bet people got to have a place to live. They’re either going to rent or they’re going to own those single family assets. And you can’t say the same for commercial real estate and you can’t say the same for apartment buildings. It’s on the ownership side anyway.

Jamil:
And just on top of that Henry, look at the liquidity availability in single family versus multifamily. You want to get some cash because of a catastrophe or something going on, sell a house. It’s not as easy to sell 300 units.

James:
I’m going to go against the grain on this one.

Dave:
Office space in Seattle.

James:
For me, the question is, where do we think we will do best in three years? And single family housing is the safest bet. I 100% agree with that. It’s consistent. You’re going to get your returns. You know what you can do with that asset class. That also seems boring to me, because it’s like if it’s the safest, it’s going to give you the safest return too, in my opinion. So I want to look at what’s getting creamed right now. Multifamily, it is hard to get a deal done, but once you find that deal, it is going to 2X when the rates drop out.
In addition to, I still believe just like the single family housing, people, as things are getting more and more expensive, it is breaking up our asset or it’s breaking up our demographics in classes where the renter, these Gen, we were just talking about these Gen Ys, they’re going to be renters, and so rent’s going to continue to grow. It’s a harder asset class. I think development’s a great one that we’re really buying right now too, because cost of dirt is down 40%, but on a three-year basis, I’m looking at what’s getting cream today that’s going to have the best upside for me.

Dave:
I’m totally with you, James. I was going to say the same thing. I think the things that are going to tank in the next six months are going to be the best returns three years from now, but agree that it is risk of reward return there will definitely adjust it. There’s definitely more risk in that. But I think the question, talking about fundamentals, I think housing units is what we’re saying. You guys are saying single family homes, those are residential. James is saying multifamily. I tend to agree that over the long run it’ll do well because we just need more housing units. I also think industrial is really strong, as Kathy mentioned, but it’s not my area of expertise, so I don’t think I could… There’s also so many subcategories of industrial, I don’t really know which ones are going to do best, but from what I read, these broad macro reports, industrial does still look pretty good, just office looks terrible.

Henry:
No, I totally agree with you and I had completely forgotten about that, but industrial or just warehouse space in general has gone through the roof over the past couple of years because of all of the online spending and just online businesses need places to store stuff.

Jamil:
But do you think that’s a knee-jerk, Henry to the supply chain issues and people are just warehousing more product and inventory so that if something happens, they’ve got access?

Henry:
No, I think it’s more to do with more people becoming entrepreneurs and starting online stores and drop shipping products. And even though they’re themselves not housing the inventory, somebody has to house that inventory somewhere. You’ve also got these ghost kitchens that have started popping up where people are now able to start a restaurant without having to have a brick and mortar restaurant. And you still need a place to prepare that food and get it out. And so people are using warehouse space, turning it into kitchen space, and then renting different spaces out in those kitchens to these ghost kitchens, essentially, who you can order food from on DoorDash like the-

Jamil:
So it’s Mr. Beast’s fault, Mr. Beast Burger?

Henry:
It’s Mr. Beast, the flexibility of being able to start your own online business and not having to own any other brick and mortar, somebody does own it and it’s typically these people buying up or renting out these warehouse spaces. They’re building four warehouses around the corner from where I live right now. They don’t even have a plan for them. They just know we need them and someone’s going to use it.

Dave:
All right. Well, thank you all so much for joining. This was a lot of fun and everyone listening to this, if you like this episode, please give us a good review. We always appreciate that. And keep an eye out for the BiggerPockets Instagram feed or my Instagram feed where we’ll be asking for future listener questions. I think that’s it. All right, well thanks everyone. Thanks for listening. We’ll see you next time for On The Market.
On The Market is created by me, Dave Meyer and Kailyn Bennett, produced by Kailyn Bennett, editing by Joel Esparza and Onyx Media, research by Puja Gendal, copywriting by Nate Weintraub and a very special thanks to the entire BiggerPockets team. The content on the show On The Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.

Don Mullen, Pretium founder and CEO, joins ‘Last Call’ to discuss gains in the Homebuilders sector and why it might not be reflective of what is really happening in the housing market.

When surveyed 81% of buyers say they want to establish real connections with brands. But they also don’t want to be overwhelmed by brand communications. So is there any way to satisfy their desires? Yes; you put the customers’ needs first.

I connected with Surbhi Gupta, a digital product manager based in Silicon Valley, who suggests that the key to putting your customer’s needs first is to start from a user-centric position.

Gupta, who has 18 years of experience in shaping and predicting major industry trends for growing industry professionals, has helped many companies succeed in delivering a top-tier product to their end users.

She recently spoke at the 2023 Product-Led Summit in Las Vegas, where she shared some discoveries made while working on a messaging product for a large brand. Nearly three-quarters of the product’s users said they wanted real-time notifications as one way to connect with the brand. Yet when they got notifications, they started leaving the product out of frustration. It was an obvious (and confusing) case of disconnect.

After approaching the problem from a user-centered viewpoint, Gupta and her colleagues found the underlying problem. Essentially, “real-time” meant something different to users than it did for the company. Users only wanted truly urgent messages right away, not every notification right away. After uncovering this issue, the company began using contextual signals to determine whether to send or delay a notification. The outcome was a far more valuable system built around the needs of users.

If your brand is struggling to put your customer’s needs first, try the following strategies. Each is aimed at fostering more of a give-and-take with your users.

1. Give consumers control over what they see.

Putting consumers in charge of their notification cadence can be a game-changer. Consider Meta’s revamped notification system that Gupta helped overhaul in 2022, for instance. Consumers were given smart defaults and power to opt-out or opt-in. They could also choose how often they were contacted.

This change helped keep conversations flowing between brands and buyers. And what made the premise work was that it was controlled completely by users.

Users will only opt-in if they feel the messages they’re receiving have inherent value and importance.

With this in mind, explore your historic notifications data. Which of your messages get the most responses? Why do users appreciate them over other messages? Are there ways to replicate their success with the verbiage of your future notifications? Be sure to conduct plenty of tests so you can figure out how to please your target audience, so they don’t tune out.

2. Automate without losing authenticity or risking violations.

It’s easier than ever to set your systems on autopilot. Plenty of AI-powered systems promise out-of-the-box automation services. The only issue is that you don’t want your messages to sound too robotic or generalized. Remember, 70% of consumers expect personalization.

It can be hard to know where personalization begins and privacy ends, though. A full 95% of respondents in one recent survey said privacy mattered to them. Consequently, it’s essential for brands like yours to figure out how to lean into technology without violating ethical customer obligations.

This is an area to experiment and be hands-on in your approach. Make certain you’re following privacy regulations and best practices. Case in point: Evaluate how you’re collecting, storing, and using data. You want to foster sustainable, long-term, trusting relationships with customers. To do that, you’ll need to make sure your automated systems are authentic without losing sight of customers’ rights and needs.

3. Adopt a philosophy of continuous improvement.

The systems that work well for you this year might not work as well next year. Resist getting too comfortable or you won’t be able to pivot quickly. The last thing you want is to lose ground to disruptive, future-forward competitors with better setups.

Speaking with Gupta about the importance of continuous improvement, she said, “During my time at Tesla, I was able to revolutionize automotive sales with a zero-touch experience. That groundbreaking innovation embraced a direct-to-consumer model and empowered customers with the information they need, minimizing the need for sales interaction.”

Because Gupta focused on the needs of customers, her projects were industry-changing. In fact, the Tesla web-based application helped generate more than a billion dollars in revenue and saved hundreds of thousands man-hours each quarter. And other product leaders have been inspired to use this model of direct sales.

By looking over reports consistently and listening to consumer feedback, you can spot and remove friction points as soon as they arise. Less friction means fewer user cancellations and a better user-brand connection. It also creates new opportunities for innovation.

As part of this continuous improvement process, solicit customer feedback to inform your ever-changing system roadmap. Allowing users to add their input shows you care about their needs and wants. It also gives you one more touchpoint with your user base.

Getting notifications right can be challenging whether you’re a startup or legacy corporation. Regardless, it’s worth the investment to give your notifications an overhaul. Just be sure your efforts start from a user-centric place for the most impact. If it works for well-respected product innovators such as Gupta, it can work for your brand.

David:
This is the BiggerPockets podcast show, 779.

Pamela:
I went from delivering pizzas to a nine figure real estate career, which was absolutely insane. And getting in the development game, the construction game, and learning about how to add value to properties and all these different things, and then building my own portfolio in this realm has really enabled me to be financially free at such a young age and also create generational wealth for my family to come. And generations beyond that. If they’re smart with it, of course.

David:
What’s going on everyone? It’s David Greene, your host of the BiggerPockets Real Estate Podcast. The biggest, the best, the baddest real estate podcast in the world. Joined today by a fellow bad man, Robert Abasolo. Rob, how you feeling today?

Rob:
I’m feeling good. I’m feeling energized. I walked 10,000 steps today. I worked out, I launched a company. It’s like the running joke on Instagram where they’re like, “Start an LLC by 6:00 AM.” I actually did. Not by 6:00, but later on. So it feels good. I’m feeling I got a new vibe about me. How about that?

David:
Apparently walking 10,000 steps can completely change your life. So there you have it. This is what Rob considers exercise.

Rob:
Well, no, I also worked out. Cool it, pal.

David:
Okay, I thought you were saying the workout was the 10,000 steps and I was a little disappointed. That’s in addition to the workout? Now, I’m getting excited. Okay.

Rob:
And very important, through new said company, I was able to save us four to $600,000 in taxes on our Scottsdale property through cost segregation and then bonus depreciation and all that good stuff. So yeah, it always feels nice to lower your tax bill.

David:
Oh, yeah. And I love that you took credit for it, like you invented cost segregation or had the crazy idea to utilize it for the situation when that’s one of the reasons we bought the house.

Rob:
True. However, my company is a cost segregation company and thus-

David:
Oh, I did not know about this. You have a cost segregation company now?

Rob:
I do.

David:
All right, well slow down over there, Turbo. You’re making all the rest of us feel inferior.

Rob:
Well, you have 18 companies. You start 15 LLCs by 5:00 AM.

David:
That’s me. I’m that guy. Jocko’s up doing a workout and I’m up starting an LLC. That’s exactly right. In today’s show, we interview Pamela Bardhi, who has a fascinating story. Who went from delivering $9 pizzas to owning a nine figure real estate portfolio. And you can too. We interviewed Pamela and she shares a lot of practical advice as well as sort of the emotional parts of her story where her brain clicked, things changed, and she got off of the wrong path and onto the right path where she’s now living her best life and we are excited to bring this to you. Rob, what were some of your favorite parts of today’s show?

Rob:
I think, honestly, it’s a really great story because we get right into why she wants to build generational wealth. A lot of people just sort of toss that out there, but she gave us the motivation on how to do that. She talked about how she found a mentor that helped guide her through a lot of her first deals and how that led into a lot of the successes. She’s done a hundred deals and she’s 31. She was on the Forbes, I guess, 30 Under 30 list by age 27. I mean, it’s kind of one of those talks where she keeps naming the accolades and I’m like, “Okay, I need to turn things around. I need to start several LLCs by 6:00 AM.” It’s a very motivating guest to have on the pod.

David:
And very fun too. You guys are going to love this one. You’re going to want to go follow her when you’re done. Before we bring in Pamela, today’s quick tip is you’ve got the skills, now go put them to work in real estate. Many people listening to this, yes, you as you’re listening right now, have specific skills that you develop through life experiences or workplace experiences or a combination of the two. Those will help you in your real estate career. Just look for the right opportunity to use them. And a bonus quick tip to listen for, your pizza delivery guy may help you build a deal funnel for deals. Listen to today’s show to find out how. All right, listen to today’s show. And on the next episode, Rob is going to explain how he has applied math to real estate to cause it to make money and not lose money. We got you here at BiggerPockets. All right, let’s bring in Pamela. Pamela, welcome to the BiggerPockets podcast. How are you today?

Pamela:
I am doing lovely my friend. How are you?

David:
I am wonderful and I’m excited to dig into your story here. There’s so many cool parts of it. So people have a little understanding of your background, you have done over 100 deals between flips and renovations. Currently, you own 27 units, have been investing for 10 years in Boston. And as a fun fact, you side hustled as a DJ in college. Anything that I missed?

Pamela:
Sounds about right. And I’m a dog mom. I have two dogs. I always count them in there.

Rob:
Now, are you still a dog mom after you have a kid? I’m just kidding. This is a call back to a previous podcast.

Pamela:
Always.

Rob:
But we’ll come out soon before this. Sorry, David, carry on.

David:
So Pamela, what are your dog’s names? First off, let’s give them a shout-out.

Pamela:
Absolutely. Rhea, who’s five years old and Blue, who’s a year and a half. They are hilarious.

David:
Okay, this sounds like the makings of a country song already. We’re up to a great start here. Do you call him Old Blue by chance? I feel like you got to call the dog Old before Blue.

Pamela:
I have not yet, but I’ve definitely got to mention that to him. He is a spunky dude.

David:
All right. So tell me, how has real estate investing transformed your life up to this point?

Pamela:
Where do I even begin? I mean, it’s transcended generations from me at this point, which is I think the most beautiful part of it all. By the time I was 27, I went from delivering pizzas to a nine figure real estate career, which was absolutely insane. And getting in the development game, the construction game, learning about how to add value to properties and all these different things, and then building my own portfolio in this realm has really enabled me to be financially free at such a young age and also create generational wealth for my family to come and generations beyond that. If they’re smart with it, of course, and maintain what I’ve established. But yes, that’s I think, the most powerful thing about real estate. It’s a long game. You guys say that all the time. It’s a long game.
It’s not a let’s make six figures in six months kind of deal. It’s let’s build for the future. Let’s play this out throughout a couple of years and build and build and build and go from that. And all of a sudden you go… This compound interest and rock and roll from there. So it’s transcended so much. Aside from that too, it’s also community. How cool is it that real estate is the space… As developers and as people in real estate, we help to define communities. We help get people into those homes. We create those homes. There’s a whole ideology that I have about all of that, but it’s just the coolest thing in the world for me.

Rob:
That’s really cool. Well, I don’t want to glaze over what you said, which is you went from delivering $9 pizzas to building a nine figure real estate business. That that’s really cool. One thing that you mentioned was generational wealth, and I was just sort of curious on is there a particular reason why you want to build generational wealth? Because that is something we talk about a lot in real estate, but I don’t think we ever get into why that’s important to the actual individual. Is there anything in particular that resonates for you, why that’s such an important goal?

Pamela:
Totally. So I mean, I came to the US when I was about five years old and my parents came here with nothing to build the American dream. And really everything from such a young age for me in my ear was “Build for your family. Build for the future,” do all of that stuff. And then my parents getting into business and all of that, and then me eventually getting into real estate, I saw the impact of all of that kind of in the long run. And I understood how powerful real estate truly is. I mean, we all think about like, “Oh, let’s make money, let’s do this. Let’s get into real estate, let’s do this long term.”
And then we really look at it. And most people don’t ask themselves, “Why am I doing this? Why hustle so hard? Why do this? Why go crazy over all of this?” And the answer is legacy. Why are we working our tails off at this point? It’s so that our generations can then have something we didn’t have and continue to elevate the generational line continuously down the line because real estate builds that wealth. I mean, the last stat I read was 76% of the US, their main source of wealth comes from their primary residence, which is insane. They take equity lines of credit to pay for college. I mean, there’s all kinds of stuff. This is a powerful wealth vehicle for Americans.

Rob:
So as we mentioned, you’re in Boston now? Is that where you grew up?

Pamela:
Yeah, so when I was five years old, we moved to Boston Mass, and that’s where we’ve been kind of this whole time since we came from Italy, because I was born in Tirana, Albania, which is right above Greece, moved to Italy when I was about six months old. And then we won the visa lottery when I was about five to come to the US. So we came straight to Boston.

David:
Okay. So you were five years old when you came here. So most of your life you’ve lived here. How did you avoid picking up the Boston accent? I don’t hear any of it right now.

Pamela:
I don’t know. See, the thing is, Dave, a lot of people tell me that I do have it. They’re like, “Oh, you must be from Boston.” And I’m like, “I don’t have an accent.”

David:
Tell me that you parked the car near the water.

Rob:
No, near the Harvard yard.

Pamela:
I parked the car near Harvard Yard. See, I say my Rs and everything. I don’t know, why do the people say I got the Boston accent? It’s hilarious.

David:
All right, so you avoided a Boston accent, but you did not avoid being exposed to entrepreneurialism. I understand that you went to college. What was your major in school?

Pamela:
So when I went to undergrad, I went to Stonehill College and I literally thought… So being an entrepreneur my whole life. So my parents came here when I was about five years old. My dad ended up buying a restaurant when I was about 10. He spent many, many years working three jobs. I barely saw my dad when we were growing up because my mom was a stay-at-home mom. My brother was a newborn and I was young. So my dad worked all types of jobs and eventually ended up buying a restaurant because his best friend gave him a down payment to do so. And he said, “Hey man, the way that you build wealth in America’s one of two ways. A, you own real estate. B, you own your own business.” He’s like, I know you don’t have the credit to buy real estate right now, but keep that in mind for the future. But here’s a down payment, go out and buy a restaurant.
So my father bought a restaurant when I was about 10 years old and it was the coolest thing ever because I just wanted to hang out with my dad. And so I dragged myself to work with him, even though he was like, “Pam, stay home, play with toys.” And I was like, “Nope, I’m getting into the game, dad.” And so my whole life I had spent in the restaurant industry and then doing all kinds of other things. I’m probably one of the most unemployable people on planet earth because I’ve never worked anything corporate, never did any type of job. So when I went to college though, ironically enough, my parents said, “Hey, Pam, we really want you to get into something that’s more secure. We don’t want you working 12 to 14 hours like we do in our business so that you can get married, start a family, do that stuff,” which is interesting coming from entrepreneurs.
But the restaurant business is really tough. And growing up in the immigrant mentality of how much you physically work determines your success levels, that’s a whole other thing. So when I went to college, I actually went in for marketing. I got a full scholarship to Stonehill and I was wicked pumped… See, the Boston came out. And then I’m taking this supplied calculus class. And first off, I don’t even understand algebra one, let alone algebra two and then get into calculus. And it was this adjunct professor that just was on my case. He just kept throwing tests at us and I was like, “Dude, I don’t even understand algebra. You’re throwing calculus at me. This doesn’t make logical sense.” See geometry, I would slay geometry all day, all night. Now, algebra and calculus is a whole nother thing.
So I get to the middle of the semester and I have a 40 in this class and I’m like, “I’m going to lose my scholarship. I need to drop this class.” I’m thinking that I went in for marketing was then going to graduate Stonehill and work corporate and then get into a 9:00 to 5:00. And then when I was 40 start a business or something. That was not the case. I dropped this class and I thought my entire world ended basically because I could no longer take that major because I needed that class.

David:
Isn’t it funny how certain classes click and they make all the sense in the world and other ones for the life of you, no matter how hard you work, something just doesn’t fit. Very smart people can struggle with certain topics and I’ve always been fascinated by… You said you could slay geometry, but calculus was really… It was similar for me. Geometry, I didn’t understand how anyone could struggle with that. It was so sensible. Just if this is this, then that has to be that. And basic algebra, same type of thing. But when I got into pre-calculus and it was complex formulas that there was no logical connection between those numbers on a piece of paper and a graph that they turned into, my mind could not make a connection to understand that type of thing. Economics made all the sense in the world, supply and demand, and if this happens, that’s likely to happen.
I was like, “How could anyone not understand that?” I think a lot of people that go through an experience like yours, they feel there’s something wrong with them. It crushes their confidence. They think “I’m just not meant for this. Other people are good at this, not me.” And then the saddest thing ever happens, they quit. They say, “All right, well, I’m just going to resign myself to being a secretary or playing small in some way because I tried and I wasn’t smart enough. I didn’t make it.” Did you have a moment like that where you questioned your ability to start a business, to be an entrepreneur, to be successful? Or did you just have an unflappable confidence that carried you through that?

Pamela:
Well, you made a lot of interesting points there. Now, some classes struck more than others and it was so interesting to me how I loved geometry. I was a beast at chemistry. I had 101 average in chemistry. I should have been in Breaking Bad. I should have been casted for that at this point, to be honest. But I really got to a point where I got super down on myself. I’m like, “Dang, why don’t I get this? No matter how much I try, it seems like I’m beating myself against the wall and it’s just not working.” I’ve always been surrounded by incredible mentors and incredible souls in my life that were like, “Pam, just because that doesn’t work for you means that you’re just meant for something else, and that is totally cool and totally okay and don’t freak out.” So I decided to then be dramatic and change my entire major to communications which I loved because I love people. I absolutely love people.
And then shortly thereafter, I was missing the whole business piece because I love that. It’s something that was kind of inherent to me. Imagine you’re in the restaurant business since you were 10 years old. You develop all these business skills. I mean, my parents were making me pay bills by the time I was 12. Like, “Pam, you call them and make the payment over the phone.” And I’m like, “I don’t know what to say.” They’re like, “Well, we can’t speak English, so you’re going to have to do it.” And so these skill sets that as a kid I was like, “Oh my God, this is so annoying. No other kid has to do this.” But it built me into business.
So reflecting back on that, when I was in college, it was kind of like, “Well, I’m missing the whole business element of this. I love entrepreneurship.” So that’s when I decided to go into Stonehill and say, “Hey, I want to double major and I want to create my own major in entrepreneurship.” And I remember as Professor [inaudible 00:16:16] and he’s like, “Pam, you’d be the first in school history to do that. I mean, we’ve had minors but never are a major.” So that’s when I combined the two. But even still at that point, still at that point, I didn’t think that I was going to be an entrepreneur right when I graduated. I had another moment, another one.

Rob:
Okay. All right. So well, first of all, I just had a flashback to my childhood because my parents are also immigrants and I used to always have to call companies and pretend to be my dad or my mom whenever I had a higher voice. I’ve never met anyone else that had to do that. So small connection there. But I know you were helping your parents out occasionally with the restaurant. You picked up another sort of side hustle or another part-time job in college too, right?

Pamela:
I created it, for sure. It was hilarious. And I was a DJ, so inadvertently when my father was doing pizza deliveries as we were growing up, when he bought the restaurant… At that time, there was cassettes and then there was CDs and then came MP3s and Aux cords. Now, my dad’s driving around all day. He didn’t have anything to listen to, so I’d always be jamming with him in the car. That was one of our favorite bonding moments was literally just jamming in his minivan, driving around town in Boston, dropping pizzas off and food off.
Now, all those mixtapes said DJ Pammy B on them. I literally would burn CDs for my dad and create mixtapes and a whole list and everything since it was available to burn. And it was hilarious because I go into college and I’ve always loved music. I’ve always been at parties, under 21s. Anything that I can get into, I was there, I was vibing. That was my jam. So come college days, I’m a freshman going out on campus at Stonehill and I’m going to all these parties. I’m like, “This music is horrendous. You can’t even dance to this. Who are these people? Who’s DJing these things?”
And so, I went back to my room with my three roommates and we just threw a party and it got super wild. And from there my name spread around campus and all of a sudden I became DJ Pammy B and was getting paid stupid money per night to DJ and get free drinks and get free food and everything. And back in 2009, that was a lot of money. 300 bucks a night plus food, plus drinks was unreal. I was like, “Guys, I’ve made it.” So it’s something I did all four years and it was a blast. It was cool because you control the energy of the room. You’re bringing different cultures together. It’s a vibe. And the stuff you see from the DJ booth is hysterical. You get the best view of all of it.

David:
So this experience broke you out of the paint color by number. Go here, go there, go there. Here’s the box you fit in. Then you moved to this one and this one, the corporate world that you were preparing yourself to get into to seeing creativity, to seeing opportunity, to making your own way. I guess as a DJ, you can create the environment you want as opposed to in the corporate world, you bounce around looking for the environment you want. What was the turning point where you decided you were going to do your own thing, that you weren’t going to wait until you were 40 to start that business?

Pamela:
Yeah. So it happened on accident. Most of us, we get into these situations and we’re like, “Oh, man, I was not planning this.” It was my junior year I was entering into, I was still fixated that I was going to be in marketing when I graduated undergrad. And I’m still telling myself I want to do events in marketing, I want people, I want to put on big events because the DJ in me came out. Love those vibes. So I was thinking about the biggest sports venue in Boston. What better place to be that where all the action is for sports, entertainment, all that stuff. That’s where I wanted to be. So I was like, “You know what? Spring semester, I’m going to do an internship there and I’m going to rock it.”
And so I got the internship, which was extremely difficult to get into. The end of the internship, I was doing social media and marketing for them at that point. And at that time, social media was still a fairly new thing. This was 14, 15 years ago at this point. And I go in for my final review for my internship and my supervisor’s like, “Oh yeah, Pam, thank you so much for everything throughout the semester.” And I’m like, “Oh yeah, no, no, thank you guys, learned so much. This is so cool. What a different experience for me. What’s my grade?” And of course, I’m the kid that showed up every single day, was going above and beyond, was crushing it, participating in everything, teacher’s pet level type stuff. But I’m just built to do things at a very high level and to always be doing multiple things at once. I can’t sit still.
And so she’s like, “Oh, Pam, it’s a B minus.” And I was like, “Can I just ask why?” And the interior of me was filled with rage because I’m like, “Dude, I showed up. I did all the things. Why did I get a B minus here? I get punished for doing the right thing? I don’t get it.” And she literally said to me the words that changed my life, “You’re just too ambitious.” And I remember hearing that and just going ballistic in my mind, but still got to keep your cool in front of people. You’re like, “You’re just too ambitious?”
I lost my mind. I’m like, that’s the one thing my parents always said to do was just to be ambitious and go out there and get it in whatever it is that you want and go get it. And that’s what I did my whole life. Whatever I wanted, I got it, period, because I worked my tail off for it. Now, if it was meant for me or not, it dictates itself in the future. But I remember walking out of that room and I said, “Thank you so much.” And I was walking out of the office threshold door, and I remember just little tap on my shoulder that was like, “Hey, Pam, you’re not meant to work for anybody When you graduate, you’re meant to do your own thing. This is why this didn’t work out.” And I felt this immediate relief and I was like, “Oh, I get it.”
“If you’re going to be an entrepreneur, you got to remember to have a big heart no matter what you do, okay? Just promise me that.” And I was like, “Okay, dad.” And that was that conversation. And later that summer, my dad had a vacancy coming up in his building next to his restaurant, which is where I had been my whole life. That’s where I worked and helped my parents and all of that. And I had the opportunity to present a business plan to my dad. And so that’s what I did and got prepared for senior year.

Rob:
Okay, so you tried too hard and you crushed it too hard at your internship. And they’re like, “Hey, we don’t overachievers over here. We only do the status quo.” And so that sort of lit this fire in you to be like, “All right, I’m going to be too ambitious, but for myself.” I feel like I said that word myself. And then you called your parents and you’re like, “Hey, guys, I’m never going to work for somebody.” And somehow miraculously… I mean, I imagine they understood the grit that you had, but they were on board. And did real estate come right into the picture as soon as the vacancy opened at your dad’s place? Or was it some sometime after that?

Pamela:
It was sometime after that. So ironically, I had two restaurants by the time I was 21 because I was super young in college, so I graduated a year early from everyone. So I opened my first restaurant, which was Rio, and then I was offered a partnership opportunity on another restaurant in downtown Boston. So I had two restaurants that I was running by my senior year and then-

Rob:
Wow. At 21?

Pamela:
And one of them, the one in downtown Boston was the biggest food operations in the entire country. So if you know where the Hatch Shell is in Boston, where they do July 4th, the Pops and all that?

Rob:
Were you asking that to us?

Pamela:
Yeah, if you guys heard of the Hatch Shell where they do the Boston Pops and they do the big July 4th celebration and all that? So my partner, we ran that. So we ran every food vendor from the Mass app, so from the Museum of Science to the Mass Ave Bridge, which is miles. So we controlled that. And then we had a brick and mortar location as well. And I had another restaurant on top of that. So this was me at 21 hustling around, I mean working every single day because events, it’s primarily weekends and it’s like 12 to 14 hour days. And I’m sitting here like, “Man, this is craziness.” I’m like, “I started two of my own businesses. I thought this was going to be the dream. And here I am still hustling, still grinding, still working, what is going on?”
I still wasn’t fulfilled and it felt so messed up. This is another moment that I felt like down and out in failure on myself because I’m like, “This is people’s dreams to open their own business. And here I am not fulfilled.” I felt like an ungrateful little kid, but I wasn’t happy, which was ironic. And so I had a lot within myself. And then these real estate developers started to come through our stores and my restaurants. And then also my uncle was a general contractor. He was starting to get into flips because this was around 2013, 2014 when I started getting into the game. Around 2013 is when I was learning because I was like, “What is this real estate game all about?”
Because the first time someone mentioned it to me, I was like, “I’m not selling houses, thank you very much.” I was like, “That’s not what I’m interested in.” And then these real estate developers started coming to my restaurants and I’m like, “Who are these dudes, man? They come in whenever they want. They have the nicest cars, the nicest clothes. They’re talking about their vacations and how they’re going to leave on Thursday night to go to their vacation house.” And I’m like, “There is no way that they do anything legal. These are drug dealers, a hundred thousand percent. These are drug dealers. There’s no legality in what they do.” And then I started talking to them like, “What do you guys actually do?” And started getting into it. And they were telling me about making your money work for you and just concepts that you’ve never heard before. And here I went through undergrad, a very expensive undergrad. Luckily I had a full scholarship there, but did all the things that society told me to and even started my own businesses and just all these things.
And yet I still wasn’t exposed to these ideologies in these types of businesses where making money work for you, investing, what is that? As an immigrant, we knew that hustle determined your success levels. If you weren’t working then you weren’t successful, period. And that’s just the way it was. And so that’s when I decided to go into real estate investing because I was like, “What is this game that they’re talking about? I don’t know. I don’t get it. This is pretty cool.” It was like, “Let me look into this.” And that’s when I dove in. So again, a whole nother accident that kind of just happened on its own.

Rob:
Wow, that’s crazy. Well, an “Accident.” But I think really it’s your ability to adapt, I’m sure is sort of really what forms your entire career. It’s really cool to hear this unfold. So let’s get into your early deals. First, it sounds like from our previous talk you had a mentor. So what made you choose to get a mentor diving right into real estate?

Pamela:
Well, so my game plan in getting into real estate, and the reason why I got into it was not for me to get out of restaurants. My whole game plan was like, “Hey, I want to do a flip or two per year so that I can have some additional income aside from my restaurants.” And it’s something that I can do because I don’t have to be on site every day and all these things. My uncle was a GC and all of that. And so I remember thinking about getting into it and I literally went to every networking event that I possibly could, connected with everyone that I possibly could. And this was around the time that HGTV was really blowing up, Flip or Flop and all those shows were coming out and all of that.
And I remember just thinking to myself, I’m like, “Pam, you have so much to lose. You need to hire a coach.” And my mentors were telling me the same thing. They’re like, “Pam, this is a brand new game for you. You’ve got a lot to lose. You have two restaurants, you’ve got employees and things. You can’t just try to figure it out. This is big money where you could lose thousands. Yes, it’s high risk, high reward, but it’s high risk and you could lose your damn shirt like a lot of people have, so be careful.”
And this was still four years after 2008, 2009. So there was still a lot of overflow of deals from that time period. And so there was still a lot of people that were newly burned from all of that. So that was the biggest piece of advice that I got was “Pam, hire a coach and just somebody who’s been there, done that, who’s playing in your marketplace and just roll with that. You have too much to lose to try to figure it out yourself. You’re going to time hack and time save and all of that, but just don’t forget this part of the game, please.” And so that was the best move I ever did, literally.

Rob:
Yeah. Learn from someone else’s experience. And so obviously it sounds like you were able to avoid a ton of mistakes, but you said that you wanted to do a couple of flips every single year to start making some extra income every single year. You landed on flips. How did you land on what to look for in a flip, really not knowing much about the real estate landscape?

Pamela:
So everything ran by my coach. I was trained by him. Every single move that I made was always audited, I like to say. I’m like, “Okay, so show me the way. How do I get to these deals? How do I make this happen?” It was a step-by-step. I got the handholding the whole time. So he told me, “Pam, number one thing is you fall in love with numbers and not the actual house and you run numbers and analyze every single property.” He’s like, “But first you’ve got to figure out what are you going to buy? What’s your budget? What are you going to buy? And then from there you can work numbers.” But if you’re kind of in the unknown, you’re going to be all over the place, which is what happens with most investors as they’re starting. They want to do everything everywhere. They live on the East Coast, but they want to do a deal on the West Coast because they think magically somehow it’s going to happen.
So he told me, you get very focused on what it is that you want, figure out your asset class, your budget, and then move from there. And I said, “Well, I would like to start with a single family.” It seems manageable. I don’t want to go into a two or three unit property when it’s my first rehab. I want to be as low risk as I possibly can and single family was that. So that’s what we were looking for and we came across an awesome deal from a local wholesaler actually, and picked that deal up. That was the deal that made me go all in real estate, to be honest with you.

Rob:
It sounds so obvious when you say it because it’s sort of hiring a personal trainer at a gym. They just know how to guide you immediately. “Hey, this is what you do, this is what you don’t do. You do this and this and this. If you do all these things, you’ll have results.” And I kind of feel like sometimes coaches get way too much of a bad shake in this industry, but it sounds like it ended up working for you pretty fantastically. So I do want to hear about your first flip. Tell us the story. How did it all pan out?

Pamela:
Sure. Well, the first day that I pulled up to it, I couldn’t find it. I drove by it 17 times and I was like, “What is this thing?” And I remember going in and it was terrifying. It had fallen apart and the family… So the story was that the family had… So the kids were out of state, they’re older, they moved out of state and the parents had gone to a nursing home. And so the house had been sitting vacant for a while and in need of serious disrepair, which was super sad because I could see so many different beautiful characteristics in the house like cathedral ceilings and all this gorgeousness that it had and all the potential that it had.
And I remember the sellers really… The son was mainly handling it. And he said something to me and he’s like, “Pam, please just one thing. Please restore this house the way we remember it as kids because that was our home that we grew up in and we just want to see it come back to life because it’s so sad to see it in disrepair.” So I picked that thing up at 150. It was an awesome deal. I’m like, “I wish we could do 150s here around the Boston Mass market.” But this deal was particularly in Stoughton, and it’s funny because this was only 10 minutes away from where I used to live in college. So Stonehill College is in Easton, so just a stone’s throw away. So I was very familiar with the area and then it was a full [inaudible 00:33:24] rehab. We added another bathroom and all the things. It ended up being a three bed, two bath and absolutely came out absolutely gorgeous. And I’ll never forget, I sent those photos to the family and the video walkthroughs when we were done and they were absolutely mind blown.
They’re like, “How did you do that? It looks absolutely unreal. Pam, thank you so much for restoring that. And our family legacy can now continue.” They were happy that it’s at this stage now. And then I’ll never forget, I’m sitting there at the open house and I’m just soaking it all in. I see the family that actually ended up buying the property and they’re interacting with it, they’re engaging with it, they’re loving it and talking about all the details, all the things and all the heart and soul that I put into it, they’re talking about it and I’m like, “Wow, this is the coolest thing in the world.” It was a very surreal experience for me kind of sitting back and being like, “Holy crap, this is how you impact people.” You literally are creating the homes or the properties that people create memories in. That’s the craziest thing in the whole entire world, the coolest thing and the greatest privilege.

David:
So that was the affirmation. This is where I’m supposed to be. I’m doing the right thing.

Pamela:
Oh my God. Yeah.

David:
Now, I’m curious because you grew up in the restaurant industry trying to figure out how do we use space? How do we create an environment that people want to make memories? They’re kind of coming here, they’re going to eat. You want them to feel welcome, you want them to be in an environment that they’re comfortable, they’re going to laugh, tell jokes. You sort of applied that same logic to housing. Do you think that was just happenstance or do you think that some of your background in the entrepreneurial world made it so that designing homes clicked for you?

Pamela:
Totally. So it was something that I didn’t even realize that I had. I can literally walk into a space and see it all. For me, it was like nothing scares me, still doesn’t. And people are amazed by that. It’ll be just the crappiest, dingiest and they’re like, “Pam, I…” And I’m like, “Oh, if you take down this wall and this wall, we keep this open concept” and this and this… It’s like I can see the final product up here in ways that other people can’t. My visualization skills are on a whole nother level when it comes to that. And that’s what happened with that property.
And to add some figures and some backdrop on that one, I made 100K on that deal. I put in about… I think it was 125 and then we had some holding costs and stuff and ultimately sold it for over 400. So on my first deal making pretty much 100K profit, I’m thinking to myself as somebody who owns two restaurants, how many dinners or sandwiches do I have to sell to net 100K? It was a lot of sandwiches. So it all started clicking for me and designing out my restaurants, I didn’t realize that I had that skillset in designing places and things and how that really applied to what was going to happen down the line in real estate, through development and all of that. So it was all connected. I see it now, but at the time I was always so super confused.

David:
So Pam, you have now done over 100 deals, like we said when we started the podcast here. What are some lessons that you can share that you’ve learned along the way?

Pamela:
So the top three I would say is financial forecasting, operational efficiencies and partnerships. So those three things have been the most critical that I’ve learned. And starting with financial forecasting now, I tend to be a very optimistic human being. And the thing is I’m like, “Oh, I can get it done within six months. I can get it done with X amount budget.” Found out a couple of times that really wasn’t the case. I under budgeted where I was supposed to and realized that cash flow is really important. Cash is king to keep all the deals moving and flowing so you don’t run into any issues. However, how did I mitigate that? And what was the lesson learned there? Number one is make sure you’re opting in for a contingency on every single one of your deals. Create a cushion for yourself in every deal that you do.
I don’t care if it’s a flip, I don’t care if it’s a buy and hold, I don’t care if it’s anything like that. Make sure you’re allocating 20 to 25%. Like, “Hey, if this goes south, I’m going to make sure that I have this in my budget to allocate for that.” And guess what? If the project goes awesome and you’re just as optimistic as you thought you were going to be, then amazing. You get to keep that money at the end of the day, but at least allocate that when you’re analyzing the deal from day one.
Tying into the financial forecasting model, another item that I would like to add in there is making sure that you have several different exit strategies when it comes to a property. We’re in a market where things seem to be changing on a month by month basis. So if you’re purchasing something as a flip, make sure that you are also running it as a long-term hold just in case that property for some reason isn’t selling or it’s going to sell for less than what you thought it would so that you’re not losing money on the deal. So make sure that when you’re running your numbers from day one, you’re analyzing different ways that you can get out of that deal with your shirt on. So if it’s going to be a flip or buy and hold, make sure you at least got two ways out.
So operational efficiencies, what I found was whenever I would have a deal that was more than 30 minutes away from each other, I would have operational inefficiencies because for example, I’m in Boston and there’s North Shore and South Shore and typically there’s no contractor who works on the North Shore that’s going to go to South Shore. They don’t cross certain highways, they work in their zone and that’s it. And I found that I lost a lot of time that way, which means I lost a lot of money. So the key here is to make sure that you’re centralizing operations. So if you’ve got one project going on and you’re looking to scale some more, try to keep them within 15, 20 minutes of each other and keep the same contractors on the job, it’s going to keep things moving much faster. So that is definitely lesson number two.
So number three, partnerships and pretty much all the clan of people that you’re going to have around you, surrounding you during these projects. So just a whole lot of people, making sure that you vet them correctly, make sure that your goals are aligned. And for example, ask yourself question number one, would I have a drink with this person? Would I actually party with this person? If the answer is no, most likely you’re not with the right partner. You want to enjoy the company and build long-term relationships. You don’t want to just, for example, start with one lender and then move on to the next and move on to the next. You want to stay solid with one partner, one attorney, one lender, that kind of thing. So that way you’re cranking out efficiently and building for the long-term together and have aligned goals. That’s super important for long-term growth and scaling.
Some red flags to look out for when you are vetting your partners is anybody who’s really trying to throw themselves at you, I find is very uncomfortable and strange and never really works out well. If they’re trying to throw themselves at you and get very salesy, you can feel that right away. You’re like, “Okay, this is probably not the partner.” And then you’re going to ask yourself that question, would I actually want to hang out with this person? Probably not because they seem very, very clingy. All of these things are things to think about when you’re vetting your partners because you’re going to be dealing with them nonstop. And typically they say that 10% of the people in the market do 90% of the deals, and that’s the truth. The big dogs, the ones who are out there doing deals are the ones who really don’t say much, right? It’s referral basis, they do things on their own and that kind of thing. That’s who you want to be affiliated with, for sure.
What would I say to new real estate investors or those who are just simply interested in real estate in general? Well, first things first is you’ve got to ask yourself, do you want to be a passive or an active investor? That’s the first place to start because real estate is a very overwhelming type of industry. You can make money everywhere. The question is how do you want to make it and how does it suit your lifestyle and fit your needs? So are you going to go passive, which means you’re investing in a fund and then you get your dividends in return and you’re kind of hands off on the deal? Or is it that you want to be an active investor and purchase properties and be hands on and kind of do the thing, whether it’s buy and hold or do fix or flip deals. So that’s the question to start with baseline like, “Hey, passive or active?” Before you do absolutely anything else, that’s step number one.
Now for step number two for advice for new investors is how do you choose your market? Because, oh my God, this has been one that I’ve had to guide so many people on and I’m like, “Listen, it doesn’t have to be super complicated. Just start in your market.” When I started, literally some of the best market that I knew was West Roxbury here based in Boston, Massachusetts, because that’s where I delivered pizzas. And literally I was like, “Well, this is where I have the relationships the best. This is where I know every street. This is where I know all the things. So why would I not start here? When I become super big, then I can go crazy and go everywhere else.”
So I started by printing out just literally an eight and a half by 11 sheet and it’s black and white and all it said was, “Hey, I buy houses in this area, please give me a call if you’re interested,” and my cell phone number. Super plain, no crazy designer, no bandit signs, none of that stuff. Put it on the pizza boxes. And people would call and text me and be like, “Oh, Pam, this is what you’re doing now?” And I’m like, “Yeah,” and then I got a whole bunch of leads from that. But again, start with your relationships and start with your market. From there, you can always expand. You just need a starting point.
So the third piece of advice for new real estate investors, anyone interested in getting into the real estate game is surrounding yourself with like-minded people and creating partnerships off of that. Because in the beginning when I had absolutely no idea what I was doing in real estate, didn’t know anything about it, I started going to networking events. Essentially I wanted to surround myself with real estate developers because that’s what I knew I wanted to do. I had decided that I wanted to be an active investor, that I wanted to flip a couple of houses a year. I knew I wanted to do it in my market, which was in Boston. So I looked for events in Boston that I could go out and meet like-minded people and people who are doing deals in that market.
So that’s super important. I mean, if you’re connecting with people, say you’re on East Coast and you’re connecting with people on the West Coast, it’d be a little bit different because those are different markets. So surround yourself with like-minded people that are doing the things that you want to do in your market most specifically. And if not, somewhere close by. And from there, you can start to meet your lenders, your attorneys, there’s contractors, there’s other real estate investors, and you start to get all of these tips. And sometimes in the very beginning, you may not be equipped to handle a deal completely by yourself. So maybe there’s somebody that you can partner with at one of those events that you meet. I hear that all the time. So those are definitely the top three things I would suggest when getting started.
So within those partnerships and going to these networking events, you’re going to find that you’re going to meet individuals that inspire you and you think to yourself, “Oh my god, this person’s incredible. If they did it, I could do it too.” And that was certainly my case. One of the people that inspired me the most in this industry when I got into real estate development was Cindy Stumpo. She was a builder, still is a builder. She’s out there hustling, grinding every single day. She began in the eighties and she’s building in the most top tier markets in literally the State of Massachusetts, if not the entire country, which is Newton and Brookline. And I’m saying to myself, “This woman has built all these projects in the toughest cities to ever build in, 3 to 5 million houses minimum,” that’s like her minimum and beyond. And I just remember thinking, “Well, she did it, then I could too.”
Finding a model and somebody who inspires you is also a very, very key thing when you’re first getting started because you can relate to them. And it’s almost like if they trail blaze the way, it’s almost like you can walk in those footsteps as well, which is absolutely incredible. And the first thing I did, even though I still think to this day… I’m like, I can’t even believe I showed up to her office and asked her… I said to her is straight up. I said, “Cindy, I know you don’t know me, but I just think you’re absolutely amazing and just thank you for being who you are and just being fearless and doing what you do because you’re inspiring me now to go out there and do my thing, even though I have no idea where I’m going with it. Just know that you’ve inspired me to at least take these steps forward.”
So finding that model is really, really key. And I’ll never forget, she said to me, “Honey, anything you need, I’m here.” Even simple words of encouragement, that really propelled me forward and look at where it got me to this day. So I always give credit to my role model there all the time. It’s funny, I texted her this morning actually, and we’re still in touch.

David:
What are some of the skills that you gained working in your family’s restaurants and then running yours that you feel translated into real estate? And what I’m hoping for here is people that are in a position right now, they work for a CPA, they’re a paralegal, they’re a nurse. They have something where they built skills, and we want them to understand how that could translate into real estate success and make the transition easier for them.

Pamela:
So first and foremost, I think that everyone who wants to start a business or get into real estate should have the prerequisite of working as a bartender and/or waitress or waiter before they do that because that is the biggest pressure test of all time. So being in restaurants since I was 10 years old, I was taught to improvise. I was taught customer service skills, how to connect with people, how to manage a million different things at once. Operations, all these things that I didn’t even know became second nature to me. And so translating into real estate, managing people, motivating people, helping them when there was deals, because in real estate we put out fires all the time, that translated over beautifully, all of it because all the skills that I built in the restaurant world completely translated over, even though it seems like completely different industries, it touched on the same things.
Your problem solving, at the end of the day, you’re literally problem solving and relationships, which I love. And so for anyone who’s out there that’s looking to transition into real estate, I mean, I say this all the time to everyone that I know. I’m like, “Guys, real estate fits into your life differently, whether you’re a nurse, doctor, whatever.” If you want completely passive income, invest in a fund and just close your eyes. And that’s how you’re going to get invested in real estate. If you want to be hands-on, then it’s going to be a little bit more different than that. But just know that there’s different ways for you to get involved in real estate, that there could be ways that doesn’t work for most people but it works for you. Maybe you side hustle on the side and you want to be a real estate agent because you want to get closer to the deals. Maybe you partner with a local developer and invest in their deals.
I mean, there’s a million different ways you get involved with real estate. And just because you’re a nurse or doctor, you’re in a totally different industry does not mean that it can stop you from investing in it. I mean, listen, your primary residence is real estate right there. So you choose how active, how passive, and how deep you want to go. Just don’t be afraid of it. And if you are afraid of it, and if you are afraid of that risk, then just kind of back up and say, “Who can I align with that can make this a little bit easier?” Maybe it’s a local developer like I was mentioning or something that you’re taking the risk off yourself. Because there’s people that I’ve heard that are like, “Oh, Pam, to be successful in real estate, I’ve heard you’ve got to quit everything and put all this money in and do all this.” I’m like, “Guys, no. That is the biggest lie ever. Just because one person did it one way doesn’t mean it’s going to translate the same for you.”

David:
Question for you, because I worked in restaurants all the way through college, do you still get those anxiety fueled dreams where you’re in the restaurant and you’re trying to put the pizza in the box and you drop it on the floor, and then you’re trying to open the next box and it won’t open, and then you realize you left a pizza in the oven and it’s burned and the phone’s ringing it and everything is going wrong and you can’t get your hands to work. Am I the only one that has those terrible nightmares or have you had those two?

Pamela:
I have completely had those two, Dave. Honestly, I absolutely have. And it’s so funny because I used to deliver pizzas as well, so sometimes I would drive too fast and the cheese wasn’t fully settled on that top layer. And if it had toppings and I’ll open it and I’ll be like, “Oh my God, the green peppers are everywhere.” No, you’re not alone. You’re totally not alone on that one.

David:
Rob, did you ever have anything like that, similar nightmares in your past jobs? Never. You didn’t have a marketing dream where they’re like, “Rob, what is your great idea?” And you’re just like, “Oh my God, I don’t have one.” And everyone’s staring at you disappointed.

Rob:
Yeah. I guess my nightmare was that I would be so successful at my 9:00 to 5:00 that I’d keep getting promoted and then settle into the status quo of just living day to day for the corporate machine that bogs us down and doesn’t really ever let us spread our wing and fly away. And so yeah, that was my nightmare for a long time. But thank goodness I’m a real estate investor now.

David:
So your nightmare was that you were too good at what you did and you just got too comfortable?

Rob:
That they would tell me I was too ambitious.

David:
All right. Well, thank you for… Those things are real, dude. When you work in the service industry, you are dealing with so much pressure and anxiety that’s building up and you just don’t realize it. It all comes out in your dreams. And years later, I was doing that a long time ago, 20 years later, I’m still having these nightmares. I’m glad it’s just not me.

Rob:
This inspires me to start a YouTube series with you because we always get the headlines. I’m sure the headline for this podcast is From $9 Pizzas to Nine Figure Portfolio, but we never hear… It’s always from waiter to millionaire, but we never hear from millionaire to waiter. And so maybe you and I do a YouTube series where we go back to our grassroots and become a waiter again.

David:
That could be fun.

Rob:
And see if we still have the chops.

David:
Yeah, see if we still have what it takes. Maybe make an instructional video for other people. I could do that. Here’s how you learn how to be a good waiter.

Rob:
I’ve often thought of that because everybody wants to be the millionaire, but sometimes you got to be good at what you’re doing to build the skills. Like what Pam Pamela was just saying, she got good at this, which translated to this, which translated to this, and ultimately led you, Pam, to where you are today versus trying to skip that whole process and not giving your best. And that’s my philosophy is you have to pursue excellence with where you are that will open up doors to get you somewhere new. So let’s recap your current portfolio. 27 properties, the president of a real estate consulting and development company, a nine figure net worth by the age of 30. What’s next?

Pamela:
So it’s interesting that yes, that was a beautiful recap. It’s been a hell of a journey though. Going into flips, then I got into construction because I was boots on the ground the whole time. And then getting into brokerage because people were like, “Pam, you’re leaving money on the table by not getting involved in these deals. Everyone’s asking you for advice.” So that’s kind of how the trifecta of all three came up. And that’s how I really built this career was through diversified revenue streams in real estate, not just development. And kind of when I got to my first net seven figure a year is when I had this little tap on the shoulder that it’s like, “Pam,” this was when I was 27, “you’re doing great things for yourself. What are you doing for the world?” And I was like, “Well, damn.” That’s when I started kind of soul-searching and dove into wanting to get into the coaching space because again, realizing that real estate changed my life.
And so that’s kind of what has been happening alongside all of this. The development, the construction, all of that stuff. The consulting and the coaching side of things is really helping people get to the next level. And then really thinking about intention has really been the next thing that I’m really honed in on. And Rob, I’m so interested, because I know you’re in this space, to you hear what you say about this, but building with intention and kind of studying what does the world need now? Anyone can build condos. Anyone can build new construction, anyone can flip. Anyone can do all of that stuff. You just need to learn the skillset. But I really want to build with intention and what is it that I want to build? I want to get into affordable housing. And what I mean by that is things that can be reasonably built for a reasonable cost, which really doesn’t exist in the construction industry right now.
I’ve watched it for the last decade, I’ve been part of it. One project can last you an entire year. Whereas if you get into creating a tiny home development or a shipping home container development, you are kind of accelerating the pedal much faster. You’re not dealing with as much construction overhead. Most of all, you save time. And so that’s kind of what I’m working on next is how do we develop these communities that people can actually afford, that could be done fairly quickly and that we build with intention and how do we build these communities across the country? So that’s where my mind is next, to be honest with you. And I am expecting twin girls in August. So that’s a big one in terms of family.

Rob:
Yay. Congrats.

Pamela:
Thank you. But in terms of real estate and business, the investment side, I really want to be building with intention. And then on the real estate front, I mean I’m always helping people elevate through real estate, whether it’s through coaching, consulting, still building up my portfolio as well. But that’s kind of where it’s all at right now. I mean, it’s such a legacy builder. Real estate is the freedom vehicle, period.

Rob:
Yeah. So do you think… Because I mean, you’ve done a hundred deals so far, you’ve got 27 properties, is that going to slow down and then you’re going to really ramp up the kind of tiny home affordable space community aspect? Are you going to keep that machine rocking and rolling while you sort of pursue a different endeavor within this space?

Pamela:
So my portfolio, it basically pays all my bills and everything and then some, which is amazing. So being at my age, I’m 31 now, being at this age where you’re pretty much all set for life, but still wanting more, that’s kind of where I’m at. That’s where everyone comes into play with wanting to help them elevate through real estate and all of that. But building with intention is definitely next. I think now, because it’s my slowdown time with the girls is really when I’m going to go hard because I tell people… They’re like, “Do you think they’re going to slow you down?” I’m like, “No, they’re coming with me. They’re coming to job sites as babies and we’re going to go crush it together.” So it’s interesting that as I’m shifting into this new space, it gives me the perfect time to build those relationships and kind of build that model the way that I want to and really then go out there and execute as soon as I’m able to. Really, that’s the next wave.

Rob:
That’s amazing. Well, let me ask you this as we wrap up here, why should you be looking for deals from your pizza guy?

Pamela:
Oh, my gosh. Remember, real estate is a local business. When I first started in real estate, I’m not even joking, I printed out, “I want to buy your house,” put my cell phone number. And I was like, “Text me or call me.” And I printed these out and put them on the pizza boxes at my family’s restaurant. Because my family sold this restaurant about a year and a half ago. So they had it when I first started in investing and I put it on every pizza box.
And believe it or not, I’d have agents call me, homeowners call me. And they’re like, “Hey, Pam, we didn’t know you were in real estate. This is super cool. I have an uncle who’s looking to sell his two family or whatever.” All my deals happened organically through my relationships, which was amazing. And that’s how I got a steal of a deal, even at the biggest height of the market, which was insane. But yeah, the total valuable tool, small businesses are so key for the locations that you want to get into and the local pizza guy is the guy. He’s going to get you the deals.

David:
All right, Pamela, thank you so much for sharing your story. I think this is awesome. It’s a wonderful American success story. You started off with an entrepreneurial family. Your father starts a business. He is not afraid to start in the trenches delivering pizzas himself, bringing you in the car with him. He’s bringing you to work and you’re making these memories and bonding together as you’re jamming out to the music of DJ Pammy B, you go from cassette tapes to CDs to MP3s and eventually start your own business, realize you’re too ambitious for the corporate world, follow in their footsteps, but amplify the success that your family had, making it even bigger. Not afraid to do things differently, like putting your information on a pizza box and finding the right mentors. I love hearing this. I hope more people are inspired by this and copy it. Rob, what do you think?

Rob:
I agree with that. I think we have a story of adaptability and how that helped create a nine figure portfolio.

David:
So Pamela, for people that want to know more about this fascinating journey you’ve been on, where can they reach out and find out more about you?

Pamela:
Absolutely. So I’m on Instagram, LinkedIn, Facebook, all over Pamela Bardhi, B-A-R-D-H-I, and it’s also my website, www.pamelabardhi.com. To reach out and find me there, DM me, I’m always floating around just living life. So please reach out to me anytime. Any way that I can help you, I’m here, man. I just want to see people rock it and slay it. I mean, what real estate has done in my life, I mean from delivering pizzas to a nine figure real estate career, featured in Forbes and Time Magazine by the time I was 27. If that could happen for me, a kid that came to this country with absolutely nothing and was able to build that just through hustle, it can totally happen for you.

David:
It all started with avoiding that Boston accent. I really think that the skills that you built resisting the urge led to the amazing success you have now. Rob, where can people find out more about you?

Rob:
Oh, they can find out more about me on the Apple Podcast store where you can leave us a five star review and we appreciate it. I appreciate it so much that I’m not even going to plug my channels because I would rather you just go there, just give us a quick little, “Oh, hey, five star. Rob and Dave are so funny. We love these guys. We learned so much about real estate.” That way we can get served up to new audiences and hopefully inspire more people to have amazing stories like Pam. David, what about you?

David:
Well, I need a pity follow because Rob has so many more followers on YouTube than me. So I will ask for a pity follow. I’m not too proud to beg. Please go to YouTube.com at DavidGreene24 and subscribe to my channel there. Or check out davidgreene24.com or DavidGreene24 all over social media, the most boring screen name in all of the real estate space, which forces me to make up for it with better content. Pam, thanks again so much. This was a blast. Thank you for sharing your story. We’ll have to have you back on again. This is David Greene for Pamela, the life of the party, Bardhi and Rob Salt Bae, Abasolo signing out.

Tom Shapiro, GTIS Partners president and CIO, joins ‘Closing Bell Overtime’ to discuss the state of the housing market, where the home builders sector stands, and how the Federal Reserve’s pause could impact real estate.

Jennifer Pahlka founded Code for America to enhance government services with technology and design expertise. She served as deputy chief technology officer under President Obama and has advised administrations at state and federal level. In her new book Recoding America, Jen examines why government is failing in the digital age. A conversation about policy, hierarchy, and how to move ahead.

Konstanze Frischen: In government culture, you write, implementation is seen as policy’s poor cousin. Why is that?

Jen Pahlka: It goes all the way back to the British Civil Service that divided their employees between the intellectuals making decisions and the mechanicals – the people who get stuff done. That division still holds today, even though in the metaphysical Silicon Valley, companies get started by programmers who in the social structure of D.C. would be at the bottom – an interesting reverse. But still – in government culture, it’s the ideas that matter, and how they actually get out into the world is the job of less important people. That divide is not helpful. In our complex, fast-moving world, the implementers need to be at the table when big ideas are being cooked up.

Frischen: Because constituents experience policy in the form of implementation?

Pahlka: Exactly. Just look at our tax system. People in the highest levels of government, economists and analysts think about our tax code, but the average American has no idea about that complexity, they know that they’re supposed to file taxes every year and interact with the system and find it frustrating. We experience policy through delivery.

Frischen: And the delivery, if you allow me to summarize the many examples in your book with one informal word, often sucks – despite good intentions, and despite technology.

Pahlka: Yes. One good example I describe in the book is when the Centers for Medicare and Medicaid Services were trying to implement a law that’s going to pay doctors more for better quality care. A great intention, but many sole practitioners and doctors in small practices were a) already frustrated with their current interaction with Medicare, and b) the administrative jumps they’d have to go through to upgrade to the new system were so overwhelming that they were threatening to leave altogether, which would then degrade the quality of care. The entities who could easily take advantage of the new law were the big health care systems – because they’re better at complying with the paperwork. In other words, the way the law was to get implemented was instead of incentivizing everyone to provide better care ranking doctors by their ability to do administrative tasks.

Frischen: And the ability to comply with the administrative requirements, you write, highly correlates with money and power?

Pahlka: Absolutely, you can see that in so many ways, like the ways in which many wealthy people take advantage of the tax system because they have lawyers and accountants to do this for them whereas low-income people don’t even get the tax benefits they’re entitled to. That is why when we think about the complexity of government services, it’s not just a question of convenience, it’s a question of equity. There’s such an instinct amongst people who care about equity to gather more and more data, which requires more and more paperwork. We’ve got to balance that out and really think about whether the impacts of all of those attempts to track equity end up decreasing equity. Delivery is how we experience policy, and one of my messages for policy people is to look at it from the delivery view up as well as the policy view down.

Frischen: A big theme of the book is what you call the waterfall culture in which civil servants move. Can you describe that?

Pahlka: Government culture tends to be one in which power, information and insights only flow down. When you get direction from the person above you in the waterfall, you have very little opportunity to question it and circle back, and so very often, well-intentioned public servants will simply do literally what they’re told, even though they might have their own opinions as to whether this is good or not. General McChrystal described why this is problematic by telling his people “Don’t do what I told you to do. Do what I would do if I knew what you know on the ground.” The larger insight here is that while the waterfall seems to serve people in power because they get to tell people below what to do, it actually does not serve anybody.

Frischen: But you have seen time and time again that civil servants rise through the ranks when they stick to procedure – even if the outcome is terrible. How can that culture be changed?

Pahlka: First, it’s important for people to understand that we the people have created this culture. We elect our officials who help foster this unhelpful fidelity to the processes of bureaucracy. Second, there are innovators out there with a passion for the mission, who understand the intention of a law they are being asked to implement, and who have the courage to keep that in focus even if that means a slightly loose interpretation of the literal words of the regulation. People want to work for bold leaders like that. We shouldn’t vilify the servants who follow process to the iota because they are operating rationally within the system, but we do need new leaders who are creative and who want impact and reward them. To help bring about this change is one of the reasons I wrote the book. I know some of these new leaders who are civil servants, and they are attractive to top level tech talent.

Frischen: Talking about the tech industry – your book is a strong reminder that technology alone will not reform government, it takes a mindset and culture shift. What practices can government adapt from the tech industry?

Pahlka: Hiring. It currently takes about nine months to hire a product manager in government, which is simply too long. You’ll take another job offer in the meantime. We could solve a lot of government’s problems right now by just making it possible to hire people quickly. Second, incremental budgets— budgets that start small and allow teams to learn what they need for whatever amount of time is appropriate, and then grow it, rather than pretend that they can know everything that the software needs to do from the beginning. But overall, it’s culture. Culture eats even the most well-intentioned policy when it’s applied in such risk averse, legalistic ways — it ends up having the opposite effect. I think it’s Deepak Chopra who says, “What we pay attention to grows.” We need to pay attention to how policy gets implemented, to the new leaders from among the civil servants. And we need to actually design the systems around users, around the American people, instead of just taking the rules that come down from Congress and then making paperwork that fits them.

Frischen: In today’s climate, can the left and the right agree on this?

Pahlka: Yes — I mean the left might call it reducing administrative burden and the right will call it regulatory reform – whatever you want to call it. The required culture change is not about deregulating in the sense of taking away all the rules. It’s streamlining how rules are imposed. We shouldn’t be choosing between lots of burdensome regulations and no regulations at all. That’s a false choice. The big opportunity here is a shift towards accountability and actual impact. And for that to happen, we need to hire talent, and set them up for success so they can get the job done.

Jen Pahlka is an Ashoka Fellow since 2012. This interview was edited for length and clarity.

Another famous name is weighing in on the housing market. A few weeks ago, it was Elon Musk claiming that home values would plummet as commercial real estate faced headwinds. Now, it’s Barbara Corcoran—albeit a more experienced source when it comes to real estate—touting the opposite.

The statements came in a recent interview Corcoran did with Fox Business’s Liz Claman. “There’s no relationship between the commercial and the residential,” Corcoran told her. “The residential is starting to rebound, but the commercial is in trouble.”

“So Elon’s wrong?” Claman asked.

“Of course he’s wrong,” Corcoran said. “Yet again.”

An Interest Rate Bottleneck

According to Corcoran, what’s keeping prices from rising much now is a “bottleneck” caused by higher mortgage rates, which now sit at 6.71%, according to Freddie Mac.

Average rates have climbed nearly 150 basis points in just the last year and over 400 since rates were at their lowest—a mere 2.65% in early 2021.

The rising rates have put what many in the industry call “golden handcuffs” on today’s homeowners, discouraging them from listing their homes and buying new ones. (That would require trading an ultra-low interest rate for today’s much higher one). According to Redfin, about 85% of mortgage homeowners currently have a rate of 5% or lower. 

“Sellers don’t want to move from their apartment or their home because they don’t want to take on higher interest rates, and buyers are too afraid because they are getting less house. In fact, they’re getting half the house they would have two years ago,” Corcoran said. “So you’ve got a standoff going on.”

Higher Home Prices Could Be Down the Pike

Corcoran’s right: Buyers have definitely pulled back since rates jumped. Applications to purchase a home are now 27% below last year’s levels, according to the Mortgage Bankers Association, and home prices have stopped their steep upward climb as a result. The median sale price clocks in at $407,415, per Redfin’s latest numbers, up from $382,000 in January but down 4% from a year ago.

Things will change once rates turn a corner, though, Corcoran told Claman. “The minute those interest rates come down, all hell’s going to break loose. Prices are going to go through the roof,” she said. 

Many industry players expect rates will indeed fall later this year. MBA predicts rates will drop to 5.6% by the end of 2023 and 4.8% by the close of 2024. Fannie Mae’s latest forecast calls for 6% and 5.4% rates, respectively.

Those are just forecasts, but if they ring true, it could spur a jump in demand, which the housing market’s ill-prepared to meet. Housing inventory is currently near all-time lows, and according to Realtor.com, the market’s already 6.5 million short of demand. Lower interest rates would only add fuel to the fire.

As Corcoran put it, “It’s going to be a signal for everybody to come back out and buy like crazy. We could have COVID all over again.”

Find an Agent in Minutes

Match with an investor-friendly agent who can help you find, analyze, and close your next deal.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

On May 5, 2023, news broke that weight loss juggernaut Jenny Craig was filing for Chapter 7 bankruptcy in the US.

Of course, in light of the recent news of so many legacy brands crumbling (the 50-year old-home decor shop Bed Bath and Beyond filed for Chapter 11 bankruptcy in April, and the 30-year-old news outlet Vice Media filed for Chapter 11 in May), it wasn’t exactly shocking to hear that another big-box store was going out of business.

According to an insider I spoke with, who was involved in the M&A conversations, the company “had been declining year over year – they were bleeding cash and trying to figure out how to turn the business around.”

But, why was this particular moment the final death knell? After all, Jenny Craig (“JC”, or “Jenny”) had been through its fair share of private equity and corporate M&A over the years:

• JC was delisted from the New York Stock Exchange in 2001, and a majority stake in the company was sold in 2002 to ACI Capital and MidOcean Partners for $112 million;
• In 2006, Nestlé, the Swiss food giant, purchased the company at a premium, for $600 million;
• Nestlé divested the underperforming brand – selling it to North Castle Partners in 2013; and
• HIG Capital acquired the business in 2019 for an undisclosed sum.

In spite of recent financial challenges, certainly there was some sharky investor eager to scoop up the distressed assets along with 40 years of brand equity, at a deep discount, right?

Wrong.

Here are five reasons why the hate-it-or-love-it diet company met its demise. And if you’re running (or working for) a similar legacy brand – you should be paying close attention to avoid these pitfalls.

1. Jenny Craig, ironically, couldn’t trim the fat

JC’s business model historically focused on high-touch support for individuals looking to lose weight, leveraging a network of weight loss centers and personalized consultants around the country (as well as in Canada, Puerto Rico, Australia and New Zealand). These centers meant that JC maintained a hefty brick-and-mortar footprint, and remained loaded with debt because of this footprint – to the tune of $250 million. This “bloat” became unsustainable over the years – particularly with the accelerated shift to online coaching brought on by the Covid-19 pandemic.

According to the insider I spoke with, JC had a big fixed cost infrastructure. In comparison, newer and more popular weight-loss companies like Noom, which was founded in 2008 as a digitally-native subscription-based app for tracking food intake and exercise habits, offer a much more scalable model.

Part of the challenge was that for many Jenny clients, the centers were an important part of why they stuck with the program. One customer I interviewed named Ariel Faison, who maintains a YouTube channel providing tips on how to recreate JC menu items at home, shared that she had built a strong rapport with her coach, and looked forward to sitting down and sharing the ups and downs of her life and weight loss journey every week. Faison further explained, “it wasn’t just an automated chatbot – where an agent will get back to you. This was a real person, who would learn your habits and really be there as a friend.”

In late April 2023, the company woke up to the reality of its unsustainable model and announced it was overhauling its business with plans to close its 600 centers across the U.S. and revamp itself as an e-commerce player. But it was too late.

2. Jenny Craig, who?

Jenny Craig had its heyday in the 1990s and 2000s – recall their iconic commercial, 1-800 94-Jenny! The company initially IPO’d in 1991 and has been a household name for decades. However, like so many legacy businesses, the Jenny Craig brand hasn’t kept up with the changing times.

In response to the shut-down, Reddit users joked that they were surprised Jenny Craig was still around.

And this brand perception is not surprising, considering Jenny’s lagging social media presence. JC has 31K followers on Instagram, 236K likes on Facebook and 3K subscribers on YouTube. By contrast and for context, its close rival, Weight Watchers (which rebranded to “WW” in 2018) has 1.7M followers on Instagram, 2.9M likes on Facebook and 172K subscribers on YouTube.

Even though WW was founded in 1963 – making it two decades older than JC, they were able to pivot from “IRL” to digital- and appeal to a much younger demographic. How? I believe it was their clear shift in brand messaging from weight loss, to wellness; a focus on inclusivity and curves, and shift away from counting calories. When WeightWatchers rebranded in 2018 to WW – accompanied by the tagline “wellness that works”, they were specifically tapping into a cultural zeitgeist that prioritizes body positivity and getting fit, rather than just getting skinny. And, regrettably, that brand facelift, was something that Jenny Craig was unable to accomplish.

3. “Jenny Craig is for older, White folk”

In describing her experiences, Faison, who is a thirty-year old African American woman, explained to me that she didn’t see diversity at Jenny Craig. “I had heard about Jenny for years and years – in my mind – it’s an old people’s weight loss program. And I have never seen anyone who looks like me in a Jenny Craig center. But I’m used to it. I live in Arizona. You won’t see anyone who’s Black. They are all older and caucasian. [Jenny targets] older, white females. And a lot of them are lifetime members who have been with the company since 1993!”

Competitor WW was more proactive about attracting a more diverse clientele by leveraging celebrity brand ambassadors, like singer-actress Jennifer Hudson (joined in 2010), media mogul Oprah Winfrey (2015), DJ Khaled (2017), singer Ciara (2021) and actress Tia Mowry (2022), through the years.

Now this is not to say that JC never brought on a racially or ethnically diverse brand influencer. In fact, in 2008 rapper-actress Queen Latifah replaced the now late actress Kirstie Alley in Jenny ads. But unfortunately, for JC, the private equity community just didn’t believe that the brand could sufficiently capture a younger and more diverse demographic.

4. O–o-o-ozempic! And other prescription weight loss drugs

The market for prescription weight loss drugs is booming. According to Axios, it is estimated to reach $30 billion by 2030.

The Ozempic jingle accompanying nightly commercials for the “miracle drug” produced by Novo Nordisk and endorsed by celebrities such as Elon Musk and Chelsea Handler, is a steady reminder for Americans – you don’t have to suffer through calorie counting and food rationing, when you can take a daily or weekly injection and have it done-for-you.

Charles Barkley recently shared publicly that he was able to lose 60 pounds in 6 months on the drug Mounjaro, a similar weight-loss medication produced by Eli Lilly.

Both Ozempic and Mounjaro, along with others like Wegovy, Victoza and Saxenda, are part of a class of drugs initially designed for diabetics, known as glucagon-like peptide-1, or GLP-1, receptor agonists. The injectable hormones are designed to do three things:

• increase insulin production, in order to increase sugar absorption and decrease blood sugar;
• slow down gastric emptying so you feel full longer; and
• decrease your appetite by reducing the feeling of hunger in your brain

I asked Faison, who is a diabetic whether she had been prescribed one of these drugs, and she shared, when she first started on her weight loss journey she would have tried anything, but has since developed more discipline. “My mentality was, give me a pill, give me a shot, give it to me, put it in my body! But these drugs weren’t out at that time. Where I’m at now, I’ve learned to develop good habits, self monitor and be more accountable on my own – I am checking how different foods raise or lower my blood sugar.”

Now, it’s not the first time prescription weight loss drugs have popped on the scene. In 1996 the Food and Drug Administration (FDA) approved dexfenfluramine and fenfluramine (brand names, “Redux” and “fen–phen”), causing revenue at Jenny Craig and similar diet programs to plummet. So, JC hired part–time doctors to prescribe the drugs. Unfortunately, the drugs were quickly withdrawn from the market, when a study linked one of them to pulmonary hypertension and valvular heart disease. A cascade of lawsuits then followed, from injured patients who had developed abnormal heart conditions.

WW, which had previously sat on the sidelines during the Redux/Fen-Phen era, took a much different approach. In March of 2023, adopting a “if you can’t beat ‘em, join ‘em” approach, WW acquired Sequence, a subscription telehealth platform offering access to healthcare providers specializing in chronic weight management, for $132 million, enabling the company to offer these drugs to its customers as a premium subscription. This go-round, Jenny stayed out of the fray, likely because it was burned before.

There certainly are plenty of downsides to relying on medications for weight loss, which would cause many to question WW’s business strategy, including:

• hefty price tag — approximately $1,200 / month, without insurance;
• chronic supply shortages, preventing customers from obtaining;
• side effects including nausea, diarrhea, abdominal pain, bloating and in severe cases, pancreatitis and thyroid cancer; and
• the yo-yo effect — these are long-term / life-long medications, so many people who stop taking the drugs gain the weight back.

Despite the drawbacks, the frenetic market demand for these medications is not stopping, and is certainly slowing demand for traditional weight loss programs. And Jenny Craig was undoubtedly a casualty.

5. Meal delivery services are too expensive

At the end of the day, Jenny Craig’s core business was a meal delivery service, which although supremely convenient, was also very expensive.

The cost ranged from approximately $97 to $200 per week ($14 – $30 per meal) depending on the plan you chose, and customers were encouraged to add fruits and vegetables to supplement the pre-packaged deliveries. All-in, customers might be spending $600 – $1,000 per month on food, and that’s just for one-person, let alone a whole family. According to the Department of Agriculture’s most recent figures, in 2021, the average family of four spends approximately $1,000 per month on groceries on the low-end, and approximately $2,000 per month on the high-end.

Some former customers took to Facebook to complain about the expensive diet plan. “Food is great! Jenny Craig is expensive particularly if you have to purchase food from markets for other family members.” Another remarked, “​​I’m surprised they are shutting down. The food was very expensive. Shame that with their high prices she still couldn’t make it work. Seems she racked in tons of money.”

Jenny Craig certainly isn’t the only meal delivery service which has been struggling financially, especially given the drop in demand for meal kits post-pandemic. Freshly shut-down in January 2023. New York-based Blue Apron, which is still not profitable (sustained a $79M loss in 2022), said in early December 2022 that it was downsizing its corporate workforce by 10%. No matter how you slice it, whether it’s restaurant or at-home delivery, the margins are tough and food is a hard business.

Admittedly, there is still strong demand for convenience in the kitchen, albeit at a reasonable price point. And this is why the market for meal kits is quite crowded, with companies like Blue Apron, HelloFresh, Green Chef, Daily Harvest, Factor, BistroMD, offering everything from keto-friendly recipes and ingredients to dietician-designed meals that are delivered fresh and ready to eat in under 5 minutes. However, in a tightening economy, as Americans are looking for ways to trim their food spend, meal delivery services are considered luxuries. And again, companies like WW and Noom have adopted a more sustainable model, where the customer is responsible for their own meal preparation.

Conclusion

A recent study by McKinsey found that the average life-span of companies listed on the S&P 500 was 61 years in 1958. Today, it is less than 18 years. So by any measure, Jenny Craig had a solid run at 40 years. But that doesn’t mean we can’t unpack the ways that they could have breathed new life into the business, to get back to growth. The next question is – which, if any, of the many lessons from JC’s decline, can help you adapt to changing consumer preferences and stay competitive?

David Greene:
This is the BiggerPockets Podcast, Show 778.

Niti Shah:
This book is really about our journey and how we built our 10 million dollar portfolio and we’re able to quit our jobs. So we kind of reverse engineered that into saying, “All right, how do we work with the limited capital that we have? How do we work with the limited time that we have, but also, scale our assets really fast in three to five years as opposed to waiting 30 years?” And I think the question shouldn’t be, “Should I invest right now? The question should really be, how should I invest right now?” Because every market has its pros and cons.

David Greene:
What’s going on everyone? This David Green, your host of the BiggerPockets Real Estate podcast? You already know what time it is. The biggest, the best, the baddest real estate podcast on the planet. I’m joined today by my favorite co-host and good friend, also incredibly handsome man today. You guys got to check us out on YouTube. If you’re not seeing what I’m talking about, Rob Abasolo. Rob, good morning to you.

Rob Abasolo:
Top of the morning to you, Dave. Listen, today, I’m feeling good. I didn’t tell you this, but I know you know I’m not a morning person. Today, I woke up at 4:30, I worked out at five. I’m turning my life around and it feels good.

David Greene:
Today’s show is awesome. We are joined by Nitty and Palak Shah. You may have recognized Palak’s name from previous BiggerPockets episode, 368. They are back today because they just wrote a book for BiggerPockets. The book is called Accelerate Your Real Estate, Build a Hands-Off Rental Portfolio With the SCALE Strategy, where they have taken the BRRRR strategy that I wrote about and come up with a blueprint or greenprint as I like to call it, to scale that to growing a very big portfolio, and we get into a lot of very practical information on this topic. Rob, what were some of your favorite part?

Rob Abasolo:
To me, this is a part two to the BRRRR strategy because I mentioned this later in the episode, I really like this because a lot of people do the BRRRR, right? They do single BRRRR or double BRRRR or triple BRRRR and then, they’re like, how do I get to 20 or 30 or 40 or 50? We have a lot of investors that come into the show and say, “Oh, I did a hundred BRRRRs last year.” And then a lot of people are like, “I mean that’s cool, but I can’t even relate.” So this is actually the systemized approach for how to scale your BRRRR business and get into some of those larger number deals every single year. So very digestible and really the dream team duo here, I’d say. They had it down, like everything, the whole thing was just so massively orchestrated, I’d say.

David Greene:
BRRRRilliant analysis there, Rob.

Rob Abasolo:
BRRRRilliant. Thank you. Thank you.

David Greene:
Before we bring in Niti and Palak, today’s quick tip is going to be brought to you by my tasty cinnamon roll of co-host, Rob Abasolo.

Rob Abasolo:
And you’ll get that reference a little later, but today’s quick tip, we call this the Alex Hormozi hack, buy the digital and audiobook so that you retain the information better. You can read the book and listen at the same time. If you’re like me and you have to read a page five times to understand what you just read, this is going to help you get through the book, and I promise you this is a book that you’ll want to purchase. Also be sure to use promo code ARE778 for a tasty little discount on the said book, over at biggerpockets.com/arebook.

David Greene:
Very nicely done. You got that on the first try. You did a good job with it. You are really developing into quite the co-host that I must say.

Rob Abasolo:
Thanks. I appreciate it.

David Greene:
Today we’re joined by Niti and Palak. Palak and Niti, welcome back to the BiggerPockets Podcast. How are you two today?

Niti Shah:
Great. Fantastic.

Palak Shah:
Yeah, thank you for having us.

David Greene:
Well, Palak, we had you on the show back in February of 2020. What a time that was, episode 368. I can’t believe we have done that many episodes in that shorter period of time. That’s awesome. You were just three years into your investing journey then, and you were focusing on the BRRRR Method, which we immediately connected on for obvious reasons. Can you quickly share for people who haven’t listened to that episode, what made you start investing?

Palak Shah:
Yeah, sure. Niti and I were both in corporate and we had great jobs. We had slowly climbed the corporate ladder. I was a mechanical engineer. He worked in strategy and finance, and I had climbed the corporate ladder for 17 years and then, we decided to have kids. We waited until our late 30s because that’s what we were told you’re supposed to do, become financially stable and then have kids. Then, after we had kids, we realized that the higher up you go, the less time you have for your family. To me, it felt like a lie had been sold to me. I felt like society had conned me into this whole lifestyle that simply didn’t work. We were constantly stressed out and my resentment for that lifestyle started building. One day I told Niti, I was like, “We have to change something. This isn’t working. I’d never see the kids.”
And it was just really difficult, and after a lot of back and forth, we decided we were going to become a single income family, and I was going to start making an impact towards building something for our family that I couldn’t have otherwise, having that full-time job.

David Greene:
Well, I appreciate you sharing that because I don’t think that it is an easy conversation for most people. We always talk about it three years after it’s happened, when we’ve been so successful that we’re on a podcast and then, it gives us impressions to everyone listening like, “I just woke up one day and realized there’s got to be more to life than this. That bird chirping on my window is singing the wrong tune.” We just walked into our boss and said, “You know I just got to do this for me.” And we broke up with our old life, and the next thing we know, our next partner walked into our life sparkling and it was wonderful. That is not how this goes. You go from fighting one battle to fighting a completely different battle and getting your butt kicked. Rob, you had a similar experience. Do you remember what that was like for you?

Rob Abasolo:
Yeah, I opened my Zoom. It was during the pandemic, and I remember opening the computer and you had this speech for my bosses. I was like, “Listen here guys, I’m never going to work for a company again.” And then they joined and I just started crying. I was like … and they were like, “Is everything okay?” And I was like, “Yeah, I’m just quitting.” And they were like, “Oh my goodness, thank goodness.” And it was obvious to every person in my life, best friends, wife, coworkers, that it was time for me to quit, but it wasn’t so obvious to me, which is always very funny in retrospect because it just made so much sense and I didn’t see it there. It’s a very scary decision. So a lot of respect to you for making that decision.

Palak Shah:
I think the big thing was … I don’t know, I felt like a lot of women had paved the way for me to get to where I was in corporate and I felt like I was letting them down by quitting my job, but then Niti was pretty big on … he’s like, “You are not quitting your job to let them down. You’re quitting your job to build something else.”

David Greene:
What has happened since the last time we spoke? I believe you were around five million in assets at that time. What’s it been like since 2020?

Palak Shah:
So we’ve doubled our portfolio. So we are 10 million in assets, and I think six months after the podcast aired the episode, Niti quit his job and he was able to retire and join the business full time.

Rob Abasolo:
Did you expect for Niti to … or Niti let me ask you, were you expecting to quit six months after the podcast or did things just move so quickly that it sort of had to happen that way?

Niti Shah:
So we had been planning this for the longest time, and to what David said, it’s such a difficult decision because once you’re in your comfort zone, we’ve been in corporate … I’ve been in corporate for 15 years, and you are in this comfort zone of getting the paycheck, kind of knowing that you have a trajectory in the corporate life, that you work towards all your life. I remember coming home and telling Palak that we need to get out of this comfort zone. I cannot … if I think that I love my job, which I did, I did like what I do, except that when I looked at people who were 10, 15, 20 years ahead of being corporate, they were nowhere close to financial freedom.
I was like, I don’t want to do this for another 20 years and not be able to spend time with my kids and do things that I want to do. So I used to come back and tell her that I’m going to tell myself that I hate my job because you need something to compel you to make that change. Otherwise, it’s status quo, and wealth is not in the status quo. Wealth is beyond that. So you just have to keep motivating yourself that that’s what you need. So it took us … to your question, Rob, like we’d been planning that for three years ever since Palak quit her job. We’d been meaning for me to quit my job, and it happened maybe a year or so sooner than we had thought, which is great.

Rob Abasolo:
So it seems like you guys have made really great progress. You’ve doubled your portfolio, you’ve gone from five million to 10 million in assets. Tell us a little bit about your roles that each of you play in the business and are you guys complimentary to each other? Are you working on the same stuff? Break that down for us really quick.

Palak Shah:
In some ways we are each other’s business clones, and we realized that early on and as we started working together more and more, we started discovering that we were each good at almost everything in the business, but we were really good at certain specific things, and we realized that Niti was really good at strategy and he was the one who first found the BRRRR strategy and he’s really good at deciding which direction the business should go, and I’m really good at systems and processes and ops. So we have really narrowed it down to our genius zones now at this point. Yeah, I feel like once we did that, that’s when we really started thriving in this relationship because working together as a couple is a whole different ballgame. Nobody talks about it.

Niti Shah:
Yeah, and it didn’t happen … It takes time to figure that out, right? We didn’t know day one that that’s what our roles were going to be. Initially, we were like, “Hey, let’s both be involved in everything.” And that backfires pretty quickly because then nothing gets done. So it took a while to get there.

Palak Shah:
Right.

David Greene:
You’re releasing a book called Accelerate Your Real Estate, Build a Hands-Off Rental Portfolio with the SCALE Strategy. What was it that inspired you to write that book? Where did they idea start from and how did it come to fruition?

Niti Shah:
Yeah, this book is really about our journey and how we built our 10 million dollar portfolio and were able to quit our jobs. I think when we first started, there wasn’t really a clear path of how we were going to do this. We knew that we wanted to build wealth and build passive income.

Palak Shah:
And we knew we wanted to do the BRRRR strategy.

Niti Shah:
Right.

Palak Shah:
When we started executing it, we had to figure out what method of execution we wanted to implement, right?

Niti Shah:
That’s right, and I think even before that in corporate we thought that we had this kind of path that was made for us, but as Warren Buffet says, right, it’s not sometimes how hard you roll the boat, but it’s about the boat that you’re in. So we knew that we had to leave the corporate boat and find something else that we wanted to do, and that was the boat of real estate and how we selected buy and hold investing and the BRRRR strategy. Then within that, we said, okay, in a few years we want to own enough assets that we don’t have to do a nine to five job, but ultimately our goal was to be able to spend time with a family and spend time with our friends.
So we kind of reverse engineered that into saying, “All right, how do we work with the limited capital that we have? How do we work with the limited time that we have, but also scale our assets really fast in three to five years as opposed to waiting 30 years?” So that’s what really inspired the book and the strategy and the framework that we came up with.

Palak Shah:
And we found that … a lot of times, we found a lot of information that was available for people who had no money and had a lot of time on how to get into real estate and how to scale a portfolio or how to work towards it, but there wasn’t anything available to us on how we could execute the BRRRR strategy with limited capital, limited time and still not creating another nine to five for ourselves.

Rob Abasolo:
Yeah, that’s really cool. So would you say that this book is it … obviously, it’s going to be centered around the BRRRR strategy, but it’s not necessarily a how to execute the BRRRR strategy, from what I’m understanding, it’s more on the actual scaling of the operations. Is that right?

Niti Shah:
Right, so it’s almost, I think of like the BRRRR strategy as a strategy that can be implemented 100 different ways, but the scale framework that we talk about in the book is a specific blueprint to execute the BRRRR strategy. So thinking through every step in the BRRRR framework, how do you put systems and process and teams that really allow you to scale the business and treat it like a business rather than just a mom and pop investor?

David Greene:
Awesome. I feel like there needs to be a movement started that anytime we refer to a blueprint for BRRRR, we call it a green print

Rob Abasolo:
You heard it here first?

Palak Shah:
Yes. This is a greenprint.

David Greene:
A greenprint, yes, a green print to SCALE. You know what? The book scale that I wrote is green. This is getting even better. It’s a conspiracy. All right. We’re going to dive deep into some of this content from your book, Accelerate Your Real Estate, Build a Hands Off Rental Portfolio with a Scale Strategy but first, can you run us through the SCALE Strategy acronym and how it connects to BRRRR?

Niti Shah:
Sure. So think of SCALE as one step for every step in the BRRRR framework. So the by step in BRRRR is scalable acquisition and deal analysis. That’s S in the scale framework. So that’s really about not just how you buy a property, a lot of people get stuck in analysis paralysis, but how do you identify the neighborhood? How do you identify the property avatar, how do you build a deal pipeline, so that makes it scalable? Next step in the BRRRR framework is the rehab, which is construction without the DIY, right? And that’s exactly what that means. There’s a lot of people think that, “Oh, they have to do all the work and they have to go out there and do the tiling and do the kitchen,” and that’s not how you need to do it.
If you really want to scale, you want to build a team that allows you to do the rehab no matter where you are, even if you’re investing in a different city or different state, having a team that actually takes care of the rehab for you. Next step in the BRRRR process is the rent, which equates to adding cash flow. This is about how do you rehab the property in a way that attracts great tenants, that allows you to do your cash-out refi, but also maximize the rent that you get. Then, a lot of people talk about managing properties and getting tenant phone calls and having the systems, certain processes and teams to really be able to deal with it, as you scale your properties and as you … even if you’re investing out of state again or out of the … in a city that you don’t live in. Next is the-

Palak Shah:
Refinance.

Niti Shah:
Refinance, thank you. Refinance is leverage and commercial financing, and this is, I think by far, the most critical piece of the SCALE framework, which is understanding commercial finance. A lot of people can scale because they don’t understand how to do the short-term financing. How do the long-term commercial finance and how do you get past the 10 loan limit if you do conventional loans and things like that, which commercial financing allows you to do, it truly allows you to scale. So that’s a very important part of the process. The last is the repeat which is exponential growth. Exponential growth is all about treating this like a business, putting the systems and processes and teams in place in every step of the process that truly allows you to scale fast and focusing on the 20% of the things that give you 80% of the results.

Rob Abasolo:
I love this. I love this and I love that there is a part two to BRRRR, if you will, because we have so many people come onto the show and effectively, a lot of the times they might have already done 50 BRRRRs or 100 BRRRRs, and it’s really hard for a lot of the listeners to relate on how one goes from two to 20 or two to 40. So I think that this process really lays it out for people that want to go to that 10th or that 20th or 30th BRRRRs, so I’m excited to dive into that.

Niti Shah:
Yeah, and to that point Rob, in my mind, it’s as hard to do two rehabs at the same time as it is to do 10 properties at the same time. The difference is the scale, how do you go from two to 10? And that’s what the SCALE framework is about.

Rob Abasolo:
Okay. So on this topic, there are a lot of people out there right now complaining that BRRRR has really gotten harder than ever, but it seems like you’re actively investing this way right now, right? So what would you say some of the benefits are to the current market that we’re in?

Niti Shah:
Yeah, absolutely, and can I start with … take a step back and say this question has been asked by investors since 2015. Since we started investing, we were asking the same question. Everybody’s asking me, is it a good time to invest? Should I be investing right now? I think the question shouldn’t be, “Should I invest right now?” The question should really be, “How should I invest right now?” Because every market has its pros and cons. Back when we started investing, deals were easy to find. The interest rates were low-ish, but it was very difficult to find lenders. Palak had to call 100 lenders to be able to find-

Palak Shah:
Yeah, almost 100 lenders.

Niti Shah:
Lenders. So that was one challenge that you need to solve for as an investor to be able to invest in that market. Then fast-forward to when COVID hit, lumber prices went through the roof. Contractors were really, really hard to find because there’s so much money in the market and deals were really hard to find. There’s 10 cash offers for every deal that you’re trying to get. So that was a challenging market too, but again, as an investor, you figured out how to find the right deal, how to build a deal pipeline to be able to navigate that market.

Palak Shah:
At the same time, lending was easier, right?

Niti Shah:
Yeah.

Palak Shah:
We’d never seen 30 year fixed loans in the commercial world before COVID hit. There were maybe a few lenders offering that, but after COVID, everybody started offering those 30 year fixed commercial loans because it got much easier to borrow money. There was a lot of money in the market.

Niti Shah:
Yeah, and fast-forward to now where the interest rates are at an all time high, but guess what, the positives in this market are that it’s a lot easier to find deals than it was even a couple of years back. There’s less competition in a lot of markets. It’s easier to find contractors as a new investor because there’s lesser money in the market, so there’s lesser construction projects happening. So you’re likely to find a contractor easily, and lumber prices and some other material prices have stabilized. So there’s a lot of positives to this market. You just got to figure out how you’re going to tackle the high interest rate, and that’s it. So every market has its unique challenges that you need to see.

Rob Abasolo:
Yeah, yeah. It almost sounds like you’re saying probably in a lot nicer than what I’m about to say, but people always find a reason to complain about the market that they’re in, right? You’re totally right. When interest rates were low, everyone was like, “Oh, it’s so competitive and oversaturated now interest rates are high, but competition is low because no one wants to do this.” Now, everyone is like, “Oh, the interest rates are high. I don’t want to do it,” but most of the investors that I know in my community, in my network, everyone is still … the experienced people are still investing in real estate because they’re good at it. They just do it consistently, and I think that’s probably the mindset that you have to take.
We’ll have listeners that get really mad at past episodes. They’re like, “You used to tell us to invest and now the economy is this and you’re shifting your viewpoint.” I’m like, “Yeah, we are shifting our viewpoint. That’s exactly what we’re doing because the economy has shifted, so we must shift how we invest and how we look at different things.” This is one of those things as educators in this space, shifting is the most important thing we can do because the conditions change every single day.

Niti Shah:
Absolutely.

Palak Shah:
And as investors, it’s our job to figure out what the challenges are in the market and how to get around them and what the opportunities are in the market and how to take advantage of them. It’s going to be changing constantly and if that’s … that’s a skill that as an investor, we have to develop, that’s a part of growth as an investor, how to work with a changing market.

Rob Abasolo:
Absolutely. I mean, David, I know you, you’ve sort of shifted your strategy. I’m certainly shifting my strategy so many different ways. I mean, primarily I was a short term rental investor. I still am. I just invest completely differently. I don’t buy the same kind of houses anymore. I don’t buy in the same locations. I don’t buy with the same types of loans. I’m doing a lot of creative finance or sub two deals because that’s the best way to get a return for me. So ultimately, I think you have to know how to adapt to whatever market you’re in.

David Greene:
It’s always been that way like we were just saying. It’s hard to believe, but in 2010, which everyone refers to as the golden era, “Man, if I could go back to 20 twin, I would’ve bought every house that there was. I’m just waiting for the next time that happens.” The funny thing is, at that time, everyone thought you were fool if you bought real estate, you were being criticized, you were being mocked. There was contractors that were dying for work, that would take jobs at cautious to keep their guys fed it. It wasn’t, “Is there a cashflow deal?” It was, “Of all the cashflow deals, which one is going to get me the most for the least amount of work?” So we’re like, “All right, I can get a 25% cash on cash return with this one, and all I got to do is paint it.”
That one, I got to do some drywall and paint. That’s too much work, but there was no money. You couldn’t raise money to buy houses. We hadn’t increased our money supply by 80% at that time.

Rob Abasolo:
Yeah. Tell me this, because I was not investing in 2010. I’m sure you guys all were. I have to imagine that in retrospect, it seems like, “Oh my gosh, I wish I could go back to 2010 when the times were good,” but was real estate that obvious of a good place to be in 2010? I got to imagine it was still scary coming right off of 2008, just like you said, right? Most investors were probably terrified to get into real estate except for the people that have probably been investing their whole life.

Niti Shah:
Yeah, and this is a piece of advice we got from a mentor that we had when we first started investing, and he had been through multiple cycles, including the 2008 crash, and the first piece of advice that he gave us was don’t invest for appreciation, invest for cashflow, right? And that’s how he’d survived the 2008 crash because he was not investing just for … in markets where it was going up and he was able to survive the crash because he was cash flowing on all the properties. That’s the best part about long-term buy and hold rental real estate is that the cash flow allows you to survive periods of downturn, periods of recession,

David Greene:
Niti, I’m so glad you said that. You don’t know how much heat I’ve been taking from the real estate investing community for making that statement. I mean, I’m hated in certain circles that consider me a heretic because I’ve shared my opinion. Cashflow is not intended to make you wealthy. Residential real estate was never built for the purpose of creating cashflow. It does eventually do that, and at certain market cycles when the market is really low, you can get into cashflow earlier in the economic cycle of owning it than at other times. So for instance, any property that you buy in a decent area is going to cashflow in 15 years, maybe even in 10 years, it’s not normal that it does the first year you buy it.
That was an unusual phenomenon we experienced for so long, like you said, Rob in 2010 because prices were so low, but as investors, we’ve gotten addicted to this, like all that we think is I have to get cashflow so I can quit my job so I can get a girlfriend so my dog will like me so that my mom will finally respect me. All the things in life we want, we think cashflow is going to fix that problem, but those that have owned real estate for a while understand the perspective I have, which is that it is a defensive metric. It is designed to stop foreclosure just to keep the property alive. And over time, the appreciation that comes from inflation and the loan pay down and the value that you add to the real estate do create massive wealth that will dwarf what most people would make at a W-2.
It’s just so hard to get that through to the people who show up saying, I want cashflow for immediate gratification and they want to fix things. Is that a similar experience to what you’ve had?

Niti Shah:
That’s so true, David, which is what we talk about is, you need to stack assets like pancakes. In your initial years of investing, first two, three, four years of investing, you are just buying assets and yes, you need to positively cash flow so that you can see through periods of downturn and that it’s not burning a hole in your pocket. You need to positively cash flow, but don’t think that I’m just going to get to 10 houses and I just need that cash flow and I can retire in two years. That’s not the way to think about it.

Palak Shah:
It actually puts a lot of investors in that scarcity mindset I’ve noticed, because then you are worried about your $50 a month changes my cash flow if I just do this one thing, and I tell them there are four advantages to owning long-term buy and hold rentals. Cashflow is just one of them. There’s appreciation, debt, pay down and what was the first one?

Niti Shah:
Tax benefits.

Palak Shah:
And tax benefits, thank you. Then, with the BRRRR strategy, now we have forced appreciation, right? Cashflow is just a very small part of it, and when you start focusing so much on cashflow, now I see investors get into this hyper scarcity mindset where they’re trying to focus on that additional $20 a month instead of thinking that if I just own this property for 10 years, I’m going to make a hundred grand. Why am I worried so much about that additional $20 a month? I was reading the book, the Psychology of Money, and he talks about how Warren Buffet, he was always focused on longevity. He wasn’t focused on making that short term gain. He always talks about how. People who are able to withstand ups and downs in the market … yeah, there you go.
One of my favorite books, and he talks about how like … if you are able to hold on to your assets during ups and downs, whatever you need to do to make that happen, longevity is what’s going to win.

David Greene:
Yeah. Thank you for sharing that. This is gold everybody. Listen to this again. It’s different than what you’ve been told, but my opinion of why that is, is most of us hear about real estate investing for the first time from a guru, selling a course. And the fastest way to get someone to pay $100,000 to learn how to do something is to convince them that if they give you that $100,000, you will solve a problem for them no one else can, like getting cashflow to quit your job. So because of that … actually, I was up until 1:00 last night working on my next book for BiggerPockets, which is about the 10 ways real estate makes money, and basically they fall into those exact four categories that you two just mentioned, and how we’ve all been sold the bill of goods on how cashflow is the only thing to look for, and so many people miss opportunities.
So I am very glad to hear that we have this in common as well as our love for BRRRR. This is really good. From here, we’re going to go through each of the individual steps in the Scale Strategy, and for each one, we’re going to ask you about two things. The first is what myths hold investors back at each stage? And the second will be the tactics that you’ve learned that will help investors take action. So let’s start with number one, the scalable acquisitions and deal analysis by what is the myth here?

Niti Shah:
Yeah, so one of the challenges that I often see people get caught up when thinking about buy is they say they’re getting caught up in analysis paralysis, right? That’s the term you hear a lot, and a lot of times they say that they’re not finding deals because they’re so focused on deals. They’re just start looking at deals … every deal that comes to them, whether it’s a single family or a duplex or a quadplex or a flip or a BRRRR, sometimes people make that mistake. What they really should be doing … so that’s kind of the wrong way to do it. What they really should be doing is figuring out where they should be investing first.
What city, what market, and why. What neighborhood you’re going to be investing in. So pick the neighborhood first. Pick the ideal property avatar, which is really what your property should look like first before you start looking at deals. That we can eliminate 80% of the deals that don’t even apply to you, right? You’re like, “All right, this deal may be good for somebody else, but it’s not good for me.” So knowing that property avatar, knowing which property you’re going to buy, helps you hone in on properties that are the right fit for you and helps you move faster and get those properties under contract.

Palak Shah:
We learned this from experience. It took us one whole year to get our first BRRRR deal under contract because we were looking in the wrong neighborhood and we were trying to make it work. What we say now is figure out what neighborhood this strategy works in first before you deep dive into finding the right deal. Niti looks at hundreds of deals every week for our community, and what we find is first, if we help them narrow down the neighborhood before we even get them to look at a deal that accelerates the success rate, because you are not looking at deals all over the country, you’re not looking at all different kinds of deals. Now you’ve narrowed it down to the point where you are so focused that it’s very easy to spot a good deal when it comes.

David Greene:
Absolutely. I call that in long distance real estate investing, a target rich environment, you’re kind of starting with the end in mind. If you’re looking for cash flowing real estate, it’s going to need to be somewhere close to the 1% rule. Looking at luxury real estate isn’t going to make any sense because then you’ll complain that the BRRRR method doesn’t work as opposed to, I’m looking in the wrong area. Before Rob moves this onto the next phase, which is construction of Scale, I just want to ask you too briefly, there is a lot of criticism right now that people say BRRRR doesn’t work, but when I ask them why, they always say, “After you pull your money out, it doesn’t cashflow.”
My thought is, well then it wouldn’t cash flow if you just bought it traditionally either. The problem is that you’re looking at properties that don’t hit price to rent ratios that you need. Is that a similar experience for you too, on why you see people struggling with the BRRRR method right now?

Niti Shah:
Yeah, and I think of it is also, they don’t understand because a lot of people don’t understand commercial financing well, there’s so many things that you can do, so many different terms that you can get for long-term commercial financing that allows you to maybe … for example instead of a 30-year fixed you could get a seven-year-

Palak Shah:
ARM.

Niti Shah:
ARM.

Palak Shah:
Yeah.

Niti Shah:
Right, and that gives you a slightly lower interest rate. Instead of doing a 25-year amortization, and see if you can find a 30-year amortization. So there’s all these tactics that you can do to increase your cashflow, short term if that’s what your goal is, but here’s what I tell people. Don’t worry about the short term cashflow because guess what, your rent is always going to go up every year. You can increase your rents every year and in the next two or three years when the industries come back down again, because inflation will be down, that’s the idea and then, you can go and refinance and lower your monthly payment, and that drastically increases your cashflow again,

Palak Shah:
And you’re going to feel like I’m reading your mind, whoever is saying that their property doesn’t cash flow at the end and bar doesn’t work, it’s because you are looking in a neighborhood where you should be flipping properties, not boring. If you can cash out but not cashflow, that’s a great neighborhood to flip. That’s not a good neighborhood to BRRRR because that’s not a good rental market. You need to figure out what’s a good market where you can cash out and you can cashflow at the same time.

Rob Abasolo:
Yeah, it’s an excellent tip. Okay, so take us through construction that Scales rehab in the BRRRR acronym. What are the myths here and what are the tactics?

Niti Shah:
So the biggest myth for rehab, from all the investors that we talk to is people think that they need to do a lot of the work themselves or be the job site or go to Home Depot and pick all the materials and hire their own subcontractors. That’s a big issue that we see.

Palak Shah:
The real way to scale a portfolio is figure out how you’re going to scale this and how you’re going to scale your construction part without being at the job site every single day because you cannot be at 10, 20 different properties on a daily basis.

Niti Shah:
The key is to find a good general contractor. If you have a good general contractor who has their team and all you are doing is overseeing them, another mistake that we see a lot of investors make when it comes to rehab is that they’ll let … when they hire a general contractor, they’ll just let the general contractor run the entire project, decide what rehab needs to be done, and almost telling the investor what is going to happen in the rehab. It should be the other way around. As an investor, you should be in complete control of what needs to get rehabbed and why, and we talk about the Goldilocks on, which is what kind of rehab are you going to do to get the maximum amount of ARV without going overboard and over-rehabbing?
As an investor, it’s your job to tell your contractor how to do that and what that’s going to look like.

Palak Shah:
And contractors are creatives, right? They’re creatives. They’re going to find creative solutions for whatever dollar amount you give them, but don’t expect them to watch your dollar amounts. Don’t expect them to keep everything on track when it comes to the numbers, you are in charge of that. So, we find that a lot of investors get into this adversarial mindset when it comes to their relationships with their contractor. It’s not about that. It’s about developing the skill of how you’re going to learn to work with that contractor. That’s a whole different skillset that you need to develop as a new investor.

David Greene:
It’s such a good point. One of the hard lessons I had to learn when I was first dealing with contractors was … and this isn’t a bad thing, but the goggles that they look at a situation from are wildly different than the goggles that I look at it from, which you want … if you think about it, you want the contractor to see it differently. They look at the work that needs to be done, whether it’s framing something or repairing plumbing and their goggles, if they’re good, are what’s the right way to do it? I don’t want to cut corners. I don’t want to go the easy route. I don’t want to do what’s easier for me. I want to do it the right way, so this is going to last for 25 years.
Well, often the right way is seven times more expensive than the cheaper way. So when you compound that by the 11 different things you have them doing, they go in there and spend a lot of your money, but they’re not doing it to rip you off it. Their integrity feels like this is the way it should be done. I do things the right way, which is why you have to pay a lot of attention to the numbers that they’re giving you and what they’re saying to do, because frequently, they will explain why it’s so expensive. I will understand their perspective and say, “Well, do we really have to run the plumbing from here all the way to there? Can’t we just take out this one little section and yeah, I guess we could do that. That’d be fine, because the rest of it is okay.” It literally went from a $12,000 job to a $2,500 job because I just asked the right question.
I think so many people are afraid to do that because they assume the contractor is trying to rip them off. The contractor is trying to get them to spend more money. They don’t understand that. The contractor is afraid to propose the cheapest option because it makes them look like they’re the unlicensed person that’s shady and doing it on the side that they all can’t stand. Has that been a similar experience for you two?

Palak Shah:
Yeah, if you think about a consultant, you go to a consultant and ask for their services, they’re going to show you all the services they offer. They’re going to give you the breadth of the projects that they can do for you. That doesn’t mean you have to hire them for all of those things. It’s the same thing with a contractor. He’s going to show you all of the things he can do for you for your project. That doesn’t mean you have to do all of them. You have to decide which, and we talk about how … if you think of your rental as a product, think of the two customers that you’re producing that product for. One is your tenant, of course, that’s your end customer. Make sure it’s a space that’s comfortable that’s appealing to your tenants.
They can pay you the rent that you want, but also, the appraiser, you want to make sure that in the BRRRR strategy, at the end of the day, the amount that the property appraises for is going to determine the cash-out amount that you’re going to get. So you’re also rehabbing it for the appraiser. Now, if you are rehabbing it to the point where you get a super high appraisal, but then you’re not going to cashflow, it’s not going to help your project because now, you don’t have an asset, now you have a liability.

Niti Shah:
I think that’s … to what David, you said earlier, which is anytime somebody goes over a project like you’re early on in the rehab project and your contractor comes and tells you, “Hey, this is … we just found this surprise, this came up,” and surprises always happened on rehab projects. This surprise came up and now, it’s going to cost you 5,000 more dollars to fix that thing. Your immediate reaction shouldn’t be, “Oh, okay, that’s fine.” It should be, “Okay, but our budget is still our budget. Where can we find the $5,000 where we can cut down on other things so we can spend it on this?” And those are the kind of conversations that you need to have with your contractor because they’re there to help you.
They’re a part of your team. If you treat them as a part of your team and pick their brains, they can get creative and help you. If you tell them, that’s our end goal, they’ll help you get there.

Rob Abasolo:
Yeah. That makes a lot of sense. So earlier you mentioned thinking about the tenants you’re running to. How does that play into the question you asked at the adding cashflow stage? The adding cashflow stage is the A in the SCALE acronym?

Niti Shah:
Yeah. So for adding cashflow, it’s really … to Palak’s point kind of think back of what the property needs to look like, what’s going to get you the best rent. So this is where you do your comp analysis to say what other properties are renting for in your area. This is … and you pick a range of, say it’s 15 to 1700 or whatever, it’s renting for per month, properties that are similar to your properties and say, “Okay, if I do this, this, and this, I can rent it for 1700 because that’s what this other property is renting for.” If I don’t put for instance Central Air, maybe I’ll rent it for 1500. That becomes, again, a question that you need to ask your GC and put it on your numbers to see if your budget can support that.
If not, then don’t, and 1500 may still cashflow, right? So what you’re going to to do is make sure you get enough cashflow, but also that your cash-out doesn’t get impacted negatively.

Palak Shah:
One of the other myths I think that people have when it comes to that adding cashflow piece is they think that if you become a landlord, you are automatically going to answer those late night tenant phone calls. Almost everyone we talk to says that they’re afraid of getting a plumbing phone call in the middle of the night. Guess what? You can put the right systems and processes in place and build the right team to not have to answer that call and still keep your tenants happy and still get them the service that you want to provide them. So, it’s all about building it like a business and figuring out how you can provide the same level of service without being a part of that process on a day-to-day basis.

Rob Abasolo:
Could you give an example of a system or a process you could put into place for a plumbing issue that happens at night?

Palak Shah:
One of the things that we’ve done is we’ve assigned categories to the kind of problems that can occur. It’s green, yellow, red, right? You know that if something is green, it doesn’t have to be addressed immediately. If you know that if it’s yellow, let’s get back to them within 24 hours. You know that if it’s red, then it does need something that needs to be addressed immediately. See, first of all, it’s all about understanding what is an immediate issue versus what’s not because to a tenant, it may seem like it’s all immediate, but it may not be. Then, when it is in fact an immediate issue, you can hire an answering service and you can give them a list of vendors to contact when a specific issue occurs and then, build your … that’s all about building your team.
How do you build your team so that the right vendor can be contacted in case of an emergency? There are services that will provide emergency contacts. You just have to find them. You have to interview them within your neighborhood and find them.

Niti Shah:
To add to that, the best part of all of this, is that you don’t need to have any full-time employees. We have zero full-time employees and that’s … you can just outsource all of this. There’s services for everything these days. You can hire a contractor, you can hire an agency. There’s just so many options for you as an investor.

Palak Shah:
I highly … if you haven’t already, I highly recommend looking into virtual assistants. They’re amazing addition to your team.

David Greene:
That’s a great point. I heard someone else talking about that the other day, that they have a ton of property and no employees because they contract out all of the work. The argument against that is usually what you pay a little bit more than if you were just to hire a person. Their case was I save so much time, not training, not dealing with the human being’s drama, not, “I need a day offer today or I can’t work,” or they’re in a bad mood because their team lost in the playoffs, so they give bad service. You sort of avoid a lot of the headaches that come from managing people. I frequently said, if Notorious B.I.G. was still alive, he would’ve written the song, More People, More Problems.
Because as bad as this is to say, it often does come down to people can be the best, but they can also be the worst part of running a business. Whereas we know that we can count on ourselves, and that’s frequently what stops people from scaling, like you said, is they don’t want to have to take on new human beings that they can’t control. Well, if you’re contracting out to some other company that’s already got that problem solved, you can avoid that. So I think that’s really wise counsel. Moving on to the L, leverage and commercial financing. Let’s get straight to the tactics on this phase. What steps should investors take to optimize their financing?

Palak Shah:
Number one, we love hard money lending. We think it’s a really good option for new investors to leverage their money upfront. Number one, you can start with 25K and they can lend you the rest of the acquisition construction money. Also, a hard money lender can be like their big brother slash big sister looking over your project because they are putting their money into your project. They’re not going to lend to you unless the numbers actually work. They also don’t give you the funds for construction unless they sent an inspector out who’s going to take a look at the work that’s been done, and then they’re going to give you the funds as you progress through your project.
So now you have another set of eyes and ears looking over your project. So we highly recommend new investors consider hard money for short term. Do you want to get into the long term?

Niti Shah:
Yeah, and same thing for the backend, the long term financing, using commercial financing for that as well. This is where that question comes up these days of, “Well, on the conventional side, there’s a 12-month seasoning period.” Well, there is no seasoning period on the commercial side. Maybe some banks will let you do it within six months seasoning. And there’s some banks, you pay a little bit for premium, but they’ll let you refinance even before the six months are up. So there’s so many advantages to using commercial financing both for the front end, short term and for the back end long term. One other additional piece that I would say is that we always tell people always, always buy your investment properties under an LLC and not in your personal name for multiple reasons.
One, it gives you access to commercial financing, which you typically wouldn’t if you bought in your personal name. Two, from a liability perspective. In case lawsuits happen, all your assets are not at stake here. Now, I’m not saying don’t buy a second home in your personal name, that’s fine, but don’t scale with it. Don’t think that I can buy five or six. We did that. That’s how we started off. We bought a few in our personal name and we’re like, “No, well, let’s refinance it into LLCs.”

Palak Shah:
Yeah.

Rob Abasolo:
It’s funny, I’m laughing because you sort of just answered the number one question in real estate. I mean, we talk about YouTube comments, Instagram, “Do I need an LLC?” And people get so hung up on the LLC question and I feel like the answer is usually pretty easy. If it’s a commercial property, you need to buy it under an LLC or if like an investment loan, it’s usually going to go under your LLC and then, if it’s a personal or conventional, that’s typically going to go personal name and then a lot of people just will transfer it over to their LLC. Yeah, I agree. I mean I think … I’m glad you put a little bit of clarification there because I do think that hangs a lot of people up from both starting and scaling.

Palak Shah:
If you’re building a business, why would you do anything in your personal name? This is a business we’re working on, right? You’re building a scalable business, go get your LLC. That’s a simple way to answer, to LLC or not to LLC. That is the problem question, to quote Shakespeare.

David Greene:
Yeah. You also mentioned something that gets passed over, which is that you’re using commercial lending to buy residential properties. This comes up when people don’t understand that as an option because they say exactly what you said, “Well, there’s a seasoning period. I got to wait six months to get my money out. Now I got to wait 12 months to get my money out. BRRRR doesn’t work, or what do you do once you get to 10 properties?” Now, you can’t get into it, right? And the answer is pretty obvious, is you’re going to get commercial financing at some point when you’re doing this.
What were some of the hurdles that you two had to go through to get comfortable with the fact that you may not get super low rate 30 year fixed rate terms on every single property light people get used to in residential real estate?

Niti Shah:
It’s funny. When we first started investing, when we did the first few BRRRRs we got a really high interest rate because at that time it was hard to obtain financing, especially under LLCs. There weren’t enough lenders. So we got interest rates as high as six or 7%.

Rob Abasolo:
Hey, those are dreamy interest rates at this moment, by the way, right?

Palak Shah:
It seemed high at that time. Yeah.

Niti Shah:
Yeah, and it still seemed high at the time. Now, that the interest rates are a little bit on the high side, it can be a bit of a sticker shock for people.

Palak Shah:
Yeah.

Niti Shah:
Again, it goes back to there is so many things you can do to bring the interest rates a bit lower, right? Things like getting a higher amortization, maybe even getting a lower LTV, so instead of getting a 75% LTV, if you’re very concerned about cashflow do a 70% LTV, so that you’re going to cashflow a bit higher. There’s so so many things you can do if you understand commercial financing, which is why I’ll say education is important when it comes to financing.

Palak Shah:
You always use the word levers, right? Whenever we are doing deal analysis, Niti always talks about, “Hey, what are the levers I can pull to make this deal work?” Say we know what the interest rates are right now, and that’s the constraint we already have. Now, what are the other levers that we have the flexibility to pull? For example, can I negotiate harder on that property? Can I do the construction in a smaller amount? So, what you realize is whatever your constraints are, those are your constraints. Where do you have the flexibility? Pull those levers and if the deal works, it works, if it doesn’t, it doesn’t.

Rob Abasolo:
Well, man, I got so many questions, but that’s okay. We’re onto our last one here. It’s called exponential growth, and this is, as it relates to the repeat, you’ve already kind of started to talk us through this concept, but what would you say is the biggest myth with exponential growth, the final letter in the SCALE acronym?

Niti Shah:
I think repeat and the exponential growth comes from building systems and processes and teams throughout every step in the BRRRR process. So picking the right neighborhood where you can scale building a deal pipeline that allows deals to come to you that are the right fit for you, having a team in the rehab phase that does all the work for you, that you just oversee, even if you’re investing out of state, maybe hiring a property management company for when you’re renting out properties, or even if you’re renting it yourself, follow the systems and processes and teams. Same thing with when it comes to refinance, having a bank of lenders, having these relationships with the lenders at any time you want to refinance a property, they’re willing to do it for you.
Guess what, the more loans you do with banks, the better terms you get. There was a time when we first started out when we had to bring 25, $30,000 to the table to close on a single family deal, right? Now we bring $12,000 to the table because we have more experience. So, everything scales and all the efficiencies that you get as you scale, exponential growth happens as a result of that. And you want to treat it like a business throughout. There’s different steps that you can take as you’re building your portfolio to focus on the 20% of the things that really give you 80% of the results.
For example, when I’m analyzing a deal and if I find a good deal, guess what? That just made me 10,000 more dollars because I was able to buy it for cheaper. So that’s a $10,000 an hour job for me, as opposed to going to the job site and putting tiles in the bathroom myself, which I could easily outsource.

Palak Shah:
We had to learn how to do all of this, and we followed the framework. Can you automate? Can you eliminate? Can you-

Niti Shah:
Delegate.

Palak Shah:
Can you delegate? Then, if none of that is possible, then you do it and you have to learn what your method of outsourcing is we had to learn it … I’m an engineer, my method of outsourcing is I have to do it all once for myself to understand it. Then, I build a step-by-step process and then, I outsource it. Niti came into the business and he’s like, “Why would you ever learn to do something that you’re going to outsource anyway?” I had a light bulb moment and now, we’ve changed the way we outsource things. If we’re going to outsource it, just outsource it. And that saves so much time that we can focus now consistently on the business itself as opposed to trying to learn all these things that we were going to outsource to begin with.

Rob Abasolo:
That’s a great tip right there. I think that’s an understated tip because I’ll tell you, I am the … my worst enemy on delegation because I like to master something before I pass it off. Recently, I’ve kind of come to terms with the fact that it’s such a relief to delegate things out. I just delegated out something yesterday that was a billing and invoicing thing. I’m always behind on billing and I just delegated it out to my payroll person. It took me an hour to create the loom and to write out the process and sending it to them, and then I was like, “Oh my gosh, I will never have to deal with this again.” And it’s such a relief, so I think you’re 100% right. Delegate away, if it’s something that you have no intention on ever doing ever again, just give it away. There’s nothing wrong with that.

David Greene:
Just wasted time, right? Write that down. If it’s something you’re going to eventually delegate, don’t bother learning how to do it.

Palak Shah:
Yeah.

David Greene:
Learn how to delegate.

Palak Shah:
And it’s so hard to take your spouse’s advice on the way you’ve been running your business.

Rob Abasolo:
It’s the greatest tip of all.

Niti Shah:
It’s easy for me to take advice. I just do what she tells me.

David Greene:
That is a great … well, it worked with your suit today. You’re looking fresh, my man.

Rob Abasolo:
You are looking fresh, man.

David Greene:
That’s actually such a powerful statement. It’s so hard to take advice from your spouse or because I’m not married, but I remember what it was like with my parents, where they would tell you to do something and you don’t know anything. Then, my dad’s friend would tell me the exact same thing. I’m like, “That guy is really smart. I’m going to listen to exactly what he just said.” So now when I have to talk to one of my employees, I stop talking to them. I go to another employee and I say, “Will you tell so-and-so that he would do really well if he would do this instead?” And I just sneak it in there like a piece of broccoli inside the macaroni and cheese to a three-year-old, so they don’t know what I’m feeding him.

Rob Abasolo:
This is kind of like whenever you say a joke, but I say it louder and then everyone laughs and then-

David Greene:
And they laugh, because they think Rob is funny and they think that I’m scary. That’s exactly right. They’re like, when David says it, he’s a cop and it scares me, but Rob is fun and handsome looking like a reverse cinnamon roll over there. I love everything that he says. Yes, that’s exactly right. Rob has become my microphone.

Palak Shah:
We actually had to learn how to listen to each other from a business coach. We were talking to a business coach and then, I said something like … I said, we have a rule now, that I have this shiny object thing, I want to run after a lot of different projects, but we have a rule now if Niti doesn’t approve, I’m not allowed to take on any projects because I get myself in trouble. The business coach could see things way more clearly than either of us and he said, “Well, yeah, he’s strategy in the business.” And I was like, “Oh, I guess you are right. I should give my spouse credit for what they’re amazing at.”

David Greene:
We call that veto power. It’s good to have someone in your life that has veto power. That gives you the freedom to have crazy, amazing creative ideas without restricting yourself, and you don’t have to worry about if it’s a good idea or not. You just run with it. This is how Brandon Turner and I often operate it. He would just have the craziest stuff and he had complete freedom to think that way, but then, I had veto power. I go like, “Dude, that’s insane. We’re not doing it or oh, there might be something onto that. Let’s go deeper and see where you go.” When you try to measure yourself and be creative, your brain fights. It goes start, stop, start, stop, and you start to get nuts.
So I love that idea of somebody is the idea person, the innovator, somebody else who is the strategy person or the executor that brings some balance to the force, especially when it’s in a relationship. I love seeing a couple like you two working together through the challenges of a relationship and business, but making it work as a single entity with different strengths. I mean, that’s amazing. There’s so many takeaways from today’s show. I love what you’ve done with the BRRRR method where you’ve actually systemized how it can be scaled. I love some of the advice that you gave when it comes to contractors and using them as consultants. I love the idea of cash out or cash flow.
It could go either way. So when you’re buying your properties, make sure it works for each. Rob, what were some of your favorite parts?

Rob Abasolo:
You know what I’m like really starting to close a loop on this delegation thing, but I think just like you said, hearing someone else who’s done it much better than me, if I clicked and that’s it, I’m delegating everything. So moving on from this episode, you might see someone else behind the mic, but just know that behind the scenes, I’m feeding him all of the crispy knowledge nuggets that you’re going to be hearing.

Palak Shah:
It’s the AI version of Rob.

Niti Shah:
Looks like we created a monster here.

David Greene:
That’s exactly right. We don’t even know if this is Rob that we’re talking to. Maybe that’s why his tan looks so good. It’s actually a filter.

Rob Abasolo:
AI. I am ChatGPT.

David Greene:
All right. Well, thank you very much Niti and Palak. It was wonderful having you back on the show and hearing how your business has doubled since 2020. So if you want your business to double, go check out their book, where can people find it?

Palak Shah:
So, it’s biggerpockets.com/arebook.

David Greene:
All right. You heard that folks, head over to www.biggerpockets.com/are, for Accelerate Your real estate book, ARE book. Since you’re a loyal listener of the podcast and we love you, which is why you should go give us a five star review anywhere that you listen to your podcast, we are going to give you a coupon to get a discount for free. The show coupon for being a listener is ARE778 because this is episode 778. So go get your coupon and buy your book at the same time and learn how you can double your portfolio just like this couple did. It was so great to see you two again, where can people find out more about you?

Palak Shah:
You can find me on Instagram @openspaceswomen.

Niti Shah:
And you can find me on Instagram @rewealthblueprint.

David Greene:
Maybe you’re going to be greenprint at some point. Rob, how about you?

Rob Abasolo:
You can find me at Robuilt on YouTube and on Instagram. What about you?

David Greene:
You can find me @davidgreene24 on Instagram, Facebook, Twitter, all of it or davidgreene24.com, if you’re old-fashioned and like websites. All right. I’m going to let you guys get out of here because I’m sure you’ve got more deals to put together and rehabs to oversee. This is David Greene for Rob “The Reverse Cinnamon Roll” Abasolo, signing off.