\n<\/p>\n
Knowing how to buy a rental property<\/strong><\/a> is one thing, but coming up with the money<\/strong> is another. This is the constant struggle<\/strong> real estate investors find themselves in. When they have cash, there aren\u2019t enough deals. When they have deals, there isn\u2019t enough cash. This catch-22 usually puts investors in a spin cycle, never pulling the trigger on their first or next deal. But, it doesn\u2019t have to be this way. With the right mindset, you can find the money to purchase more rental property<\/strong>, even if you\u2019ve run out of options.<\/p>\n This is what expert investor, David Greene, refers to as his capital \u201ccarrot,<\/strong>\u201d or the thing that allows him to find (and make) more money to buy even more real estate. And it\u2019s just one of the topics in today\u2019s Seeing Greene<\/strong> show. In this episode, David takes a live call from Garrett<\/strong>, who\u2019s struggling with whether or not to sell or keep his first deal<\/strong>. We also get questions about BRRRRing <\/strong>with high <\/strong>interest rates<\/strong><\/a>, where to find medium-term rental tenants<\/strong>, and how to find a realtor<\/strong> in a brand-new market.<\/p>\n Want to ask David a question? If so, <\/strong>submit your question here<\/strong><\/a> so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums <\/strong>and ask other investors their take, or follow David on Instagram<\/strong><\/a> to see when he\u2019s going live so you can hop on a live Q&A and get your question answered on the spot!<\/p>\n David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Garrett: David: Ryan: David: Aaron: David: \u00a0<\/p>\n \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Check out our\u00a0<\/em>sponsor page<\/em><\/a>!<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is the BiggerPockets Podcast, show 687. Most of the time my lion does not come out unless I\u2019m threatened. Okay? Unless I\u2019m hungry. Then I actually realize what I\u2019m willing to go do. I got to want something. When my life is comfortable, I don\u2019t really function like the lion. When my life is uncomfortable, a different side of David comes out. And so this is an opportunity for personal growth if you choose to take that.
You could go take more jobs as an engineer. You could start studying sales or business. You could change elements of your personality like I had to do when I became a real estate agent to become more charismatic and easier to talk to and less of a cop.
What\u2019s up, everyone? This is David Greene, your host of the BiggerPockets Podcast here today with a Seeing Greene edition. If you haven\u2019t listened to one of these before, these are shows where I will take questions directly from you, our listener base, and answer them for everybody to hear.
We\u2019ve got video submissions, we\u2019ve got written submissions, and we have me going on rabbit trails explaining ways you can build wealth that you might not have thought about before. These shows are awesome, and you can usually recognize them by the glowing green light behind my head here.
Today\u2019s show is fantastic. We\u2019ve got several areas of interest that I\u2019d like to highlight for you. The first is why cost in an area aren\u2019t working and how to navigate the no short-term rental regulations. As real estate becomes more expensive, it becomes harder and harder to make it cash flow traditionally, which has pushed more and more investors into short term rentals. But there\u2019s backlash from that too as communities don\u2019t like short term rentals in their backyards and nimby neighbors make a stink. Sometimes you got to figure out a way to work around the regulations on your rentals, so we get into that with one of our callers today.
We also talk about why changing markets as an agent isn\u2019t always the best bet. But what you could do if you\u2019re a real estate agent listening to this to grow your business. And then I expand on that to say what you should look for in a real estate agent, that is very important. So that\u2019s another point that we get into today\u2019s show. What questions you should ask of your real estate agent, how to find the right one. And if you\u2019re an agent, how you can make more money, how you can be better in the right way to serve your clients.
There\u2019s also a great question about finding an out of state agent and putting a team together in a new market that you don\u2019t want to miss. So please check that out. This is a great show.
All right. Before we get into our first live coaching call, today\u2019s quick tip is check out biggerpockets.com\/resources. It\u2019s a place to find out about all the cool downloads that we have made available and the data that has been put together by our own data guru, Dave Meyer, of On The Market. These are the things that Dave and we at BiggerPockets think would be the most helpful for you to use and see and know.
So regularly check biggerpockets.com\/resources. In fact, it might not be a bad idea to leave a tab open on your browser so you can check it every day. And if you listen all the way to the end of today\u2019s episode, you might learn a little bit about what tabs are open on my browser as we speak.
All right. To start today\u2019s show off, we have Garrett with a beard that rivals our own, Brandon Turner\u2019s and Garrett\u2019s car, from which he has asked questions in the past on shows 588 and 618. He\u2019s now coming to us today live from said car. Garrett, welcome to Seeing Green.<\/p>\n
Thank you, David. Good to be<\/p>\n
Here. Yes. So tell me what is your dilemma?<\/p>\n
All right. So in the past episodes I\u2019ve talked about wanting to get into the real estate. My next one was how I can deal with repairs and which one should take priority. And now I\u2019ve kind of prioritized these repairs and got that all under control. I\u2019m starting to pay down some financing. However, I\u2019m trying to see long term with this investment and future investments. And I\u2019m wondering\u2026 My question is basically trying to figure out an exit strategy. So I\u2019m on the fence of holding long term, which I always told myself I would do if I would get into real estate staying in two out of the past five years so that I can get the $250,000 capital gains. Or if I should just wait one year after the FHA seasons, sell it, cut my losses and find something new, or possibly a 1081. I\u2019m jumping all over the place.<\/p>\n
So this is not a rehab question, this is an exit strategy.<\/p>\n
Exactly. Yes.<\/p>\n
So we got a property and you\u2019re trying to figure out should\u2026 It\u2019s your primary residence. You bought it with an FHA loan. Should you keep it as a rental or should you sell it and move into something else?<\/p>\n
Yes. And like I said, I always wanted to buy and hold. However, the reason why I\u2019m considering selling is because of this property. I feel like I might have bitten off more than I could chew. Just to run some numbers, so my mortgage and interest is about 3,500 a month. My W2 is bringing about 5,000 a month. Right now it\u2019s fully rented. It covers principle and interest. However, all of the reserves are coming out of my own pocket. Basically, any repairs or rehabs, anything like that, it\u2019s coming straight out of my pocket. I just don\u2019t know if it\u2019s a very sustainable property.<\/p>\n
Well, the rent should go up every year, right?<\/p>\n
Yeah, sure.<\/p>\n
If you\u2019re making 3,500 a month, that\u2019s a pretty good location. Are you comfortable sharing where it is? What city?<\/p>\n
It\u2019s Jefferson Park, Chicago.<\/p>\n
Okay. So I\u2019m guessing that those are not cheap homes, that that\u2019s a decent area that you own this asset.<\/p>\n
It is a decent area. I definitely feel safe in the neighborhood. It\u2019s a little three flat. I rent out the top and middle unit, and then I live in the basement and rent out the second bedroom.<\/p>\n
So not only are your rents going to go up, but they\u2019re going to go up on three different units over time. So exponentially this property will become profitable for you. That\u2019s the first thing I want to say. What are you\u2019re experiencing right now is normal, especially if you\u2019re living in it. It\u2019s a house hack?<\/p>\n
That\u2019s correct. Yeah.<\/p>\n
Yeah. So if it\u2019s paying for itself and you only have to come out of pocket for reserves or expenses, how much would the rent be if you were to go rent somewhere else?<\/p>\n
Probably not as good.<\/p>\n
No, just give me a dollar figure per month if you rented a different property.<\/p>\n
If I rented a different property?<\/p>\n
What would you be spending on rent?<\/p>\n
I don\u2019t know, 15, 1600 to rent a place.<\/p>\n
Okay. So that property is profiting you 15 to $1600 a month. You\u2019re not looking at it like that because you\u2019re not factoring in the fact that you\u2019re saving that much in rent. Now, if you moved out of that house, does that mean\u2026 How much could the unit you\u2019re living in right now, how much would that bring in for rent? Or have you already factored that into the 3500?<\/p>\n
So if I moved out, I would get an additional 500, maybe 600.<\/p>\n
Not huge, but it would definitely at least break even. Right? Okay. The first thing is when you\u2019re saying, \u201cI always wanted to buy and hold,\u201d selling a property to buy another one isn\u2019t necessarily not buy and hold. Right? I get what you\u2019re saying is you intended to keep it forever and that is an option. But I want to present a different way to look at it. Money is useful for exchanging for goods. That\u2019s typically how we look at money. But I\u2019m writing a new book for BiggerPockets. I believe it\u2019s going to be called Pillars. And part of the concept I\u2019m trying to get through in this book is that money is actually a store of energy. Meaning you go to work and you put in eight hours of work in a day of labor, calories, effort, whatever you want to call it. You exchange that effort and you receive money in exchange. That money is the store of the energy that you poured out when you were working. Are you with me so far?<\/p>\n
Yeah, I\u2019m following.<\/p>\n
Okay. Now, money is a poor store of energy because of inflation. Inflation makes that money worth less. So the energy that you poured into it bleeds out. Just a different way of looking at it. But it\u2019s better than spending your money and getting nothing. You go buy a pair of shoes, that\u2019s an even worse store of energy than money would be. Right? A better store of energy is real estate. You take the money, you exchange it for a house. Now, that property not only stores the energy that you spent in work for the accumulation of hours you had to spend, it actually increases it.
It takes that energy and it amplifies it. It becomes worth more through appreciation, through cash flow, all these opportunities. When money cash flows into your pocket, you can buy more of it. I want you to look at real estate like a store of energy that you have expended previously through work.
If you sell this house and you buy a different property that performs better, cash flow is more\u2026 Whatever it is that you like about it more, appreciates more, has value add opportunity, you go into a rehab that\u2019s not as daunting as this what was. Okay? You got away from buy and hold. You just took the energy out of a vehicle that is not a great storage of it and put it into a better storage. Okay? You\u2019re shifting your energy from one thing to another.
And if this new house has value add opportunity, better neighborhood, also a three flat or a four flat, something is superior to the one you\u2019ve got. You\u2019re still a buy and hold investor. You\u2019re just a better one. So I don\u2019t want you to be afraid to pull the trigger by thinking, \u201cOh, I said I was always going to be a buy and hold investor.\u201d If you\u2019re doing real estate investing correctly, you will never own every property that you bought.
If you\u2019re really good at this and you end up with 200 single family homes, you\u2019re dumb. You need to exchange those for a couple big apartment complexes. They\u2019re better stores of energy. They\u2019re not going to bleed as much because you don\u2019t have to pay attention to it. So the first point I\u2019d just like to make here is if you sell it, that\u2019s okay. You\u2019re not a sellout. You didn\u2019t do it wrong. The second piece I would say is let\u2019s look at should it be sold? You had mentioned before the rehabs were very difficult. Is that still the case or have you pretty much gotten those under control?<\/p>\n
I\u2019ve pretty much gotten them under control. A few minor things here and there that pop up, but nothing I really can\u2019t handle. But the returns are mostly in control.<\/p>\n
Okay. So you learned you\u2019re not going to get in over your head like you were on this one, right?<\/p>\n
Yeah, exactly. I think I\u2019ve definitely learned that the hard way, but learned for sure.<\/p>\n
So you mentioned let the FHA loan season. I don\u2019t think you have to do that. You can sell that house. You don\u2019t have to wait a year to sell a home. Are you aware of that?<\/p>\n
I actually wasn\u2019t. I thought you\u2019d have to wait a year.<\/p>\n
You have to wait six months to refinance, but you could sell anytime and anytime after six months you can refinance. Don\u2019t have to wait a year at all. Now, you may have been thinking\u2026 I guess the year thing is you usually have to wait a year before you can buy another primary residence. That may have been where you got confused.<\/p>\n
Yes.<\/p>\n
And you won\u2019t be able to use an FHA loan on the second primary residence because you can only have one at a time. All right? So you can either refinance that FHA loan into a conventional loan and use the FHA loan to buy your next primary residence. Or you could keep your FHA loan and you could use a conventional loan to get your next one. That would be 5% down on a single family home. Are you with me so far?<\/p>\n
Yeah, I think so.<\/p>\n
All right. I\u2019m going to complicate it a little bit.<\/p>\n
Okay.<\/p>\n
Because if you\u2019re going to buy a true multifamily property\u2026 The one you have now, is it actually considered multifamily or is it considered single family, but it just functions as multifamily?<\/p>\n
It\u2019s actually considered multifamily, yeah.<\/p>\n
Okay. If it\u2019s considered multifamily, you often can\u2019t put 5% down like a triplex or a fourplex. They usually want somewhere between 10, 15, it might even be at 20%, even if it\u2019s your primary. That\u2019s one of the Fannie Mae, Freddie Mac rules that changed. So you can use an FHA loan at three and a half percent down to get one of those properties. So if you reach out to us at the one brokerage, we\u2019re going to walk you through that. We\u2019re going to explain.
So what might be in your best interest is if you refinance out of your FHA loan even into a higher rate which you\u2019re not going to like, but you can use the FHA loan to buy your next property, you can put three and a half percent down on a multifamily house, which is much better than being forced to put down 10, 15% on it. You with me so far?
So even though the rate goes higher, you get the opportunity to keep more of your capital. And then you just get a better property than you did in year one. Less of a rehab that wears you out, little bit better of a location. You\u2019re a little bit better analyzing properties. You\u2019re not going to feel the pressure of, I got to go buy something because you\u2019re comfortable where you\u2019re at, so you can take your time and buy the right property.
The next one can only get better than this first one. So that\u2019s the path I would lay out for you. What questions do you have considering that road?<\/p>\n
I guess I\u2019d just have to consider how long it would take to\u2026 Because if I sold the house\u2026 Or excuse me. If I refinance this house and I use FHA again to purchase another property, then I\u2019m still going to have to put down that other down payment and any potential little cosmetic fix up or whatever might come along the way. But right now I don\u2019t have that capital. So that\u2019s the issue right now. So I\u2019m like, I\u2019m even considering maybe doing a flip here or there just to get something like this, but I also don\u2019t want to deviate from the path at all of just buying small multifamilies right now.<\/p>\n
All right. That helps a little bit here. So first off, have you added much value to this house through the rehab you did to it?<\/p>\n
Yeah, I\u2019d say some. I mean, I did buy it a little bit over listing, so that complicates things a little bit. But I\u2019ve added new windows. I\u2019ve waterproofed the basement.<\/p>\n
I see what you\u2019re saying, but the reason I\u2019m asking is if there\u2019s more equity in the home when you refinance out of the FHA, you may be able to pull some cash out, which could be your down payment for the next home. But if the work you did wasn\u2019t necessarily going to make the house worth more, or if the market has gone down since you bought it, which likely could be the case, there might not be as much cash to pull out of it as what you think.
So that would be your first option is I want to refinance. I want to refinance the primary residence loan and I want to pull cash out. If they let you, there you go. You got some money for the next deal. If not, let\u2019s go back to the drawing board. You\u2019re saving rent right now that you don\u2019t have to pay. You said $1500. That\u2019s around, I don\u2019t know what that would be. Probably 15 to $18,000 a year, something off the top of my head that you should be saving, plus whatever money that you were saving on top of that. Right?
So if you can save $25,000 in the next year by working a lot, that could be another three and a half percent down payment on your next house.<\/p>\n
Yeah, that\u2019s true.<\/p>\n
Are you just sort of ants in your pants, want to get going, don\u2019t want to have to wait?<\/p>\n
I am really excited. I just want to do more, do more, do more. But I just feel a little stuck right now.<\/p>\n
Well, when you don\u2019t have capital, you are stuck. There\u2019s no way around it. That\u2019s why I\u2019m writing that book I talked about for BiggerPockets, it\u2019s about capital is freaking and important and real estate investors have access to it.<\/p>\n
So in the first unit, the top floor, there\u2019s a long-term tenant. They\u2019ve been there for actually 10 years. So when I bought the place, their rents were really low and I raised that. And then the main floor, that\u2019s the one that I did some cosmetic rehabs on, fixed up the bathroom, made everything look really nice. And then I got someone in there within a month and a half and now they\u2019ll be there for at least\u2026 He said at least two to three years because it\u2019s nearby a school for his son.<\/p>\n
Do you think, Garrett, there is a possibility that you could rent it out as a short term rental or are you locked into leases right now?<\/p>\n
I\u2019m pretty much locked into leases right now, at least until next year.<\/p>\n
What about if you moved out of the unit that you\u2019re renting? Would that rent out as a possible short term rental?<\/p>\n
So that\u2019s what I\u2019m saying. If I moved out of this unit and then I waited until next year\u2019s due because I have a roommate as well. If we both moved out, I could consider it as a short term rental. That\u2019s a possibility. But I\u2019m not sure what the market is like on Airbnb. I wouldn\u2019t even know where to start there.<\/p>\n
So another element we could look into here is if any of the units of your current property could be used as a short term or a medium term rental. What do you think of the possibilities of that are?<\/p>\n
Yeah, so I think if my roommate and I move out, it would be about a year. And then after that, I could consider it for a short term rental. I\u2019m not too sure what a medium term rental is though. Could you familiarize me a little bit with what that is?<\/p>\n
Yeah, that\u2019s a really good question. A medium term rental would be you renting the unit out to a traveling professional, A person who needs a place to stay for more than a short period of time. So this could be someone has a sick family member at a nearby hospital, and so they want to go stay at a furnished property to be close to them or they get a contract to work at a certain area. They don\u2019t want to buy a house they don\u2019t want to rent for a year and they need it to be furnished.
So these are typically corporate people that are moving somewhere. Someone who moved into an area to get a temporary job. Maybe someone is like, \u201cWell, I work remotely and I met this new girlfriend and I want to get to know her. So I\u2019m going to move to this area, get my own space. I don\u2019t know if it\u2019s going to work out or not. So I don\u2019t want to be committed.\u201d
So those medium term rentals are something that we\u2019re starting to see a lot more of coming into the space. And it\u2019s not as much management on the owner\u2019s behalf because once the person moves in, it\u2019s kind of like they treat it\u2019s a long term rental. So those would be some options that you could have to try to increase the revenue on this particular property. Outside of that, what are you doing for work right now?<\/p>\n
So for work, I am in the construction industry. I\u2019m an engineer. Basically, I\u2019m out on the job site and making sure that the contractors and laborers are following the plans necessary to complete the project.<\/p>\n
Do you have options where you could increase your income with what you\u2019re currently doing?<\/p>\n
So we do have reviews coming up. That\u2019s about it. I am actually currently looking into a second form of employment, like seeking some part-time work with either an insurance agency or selling solar panels, something where there\u2019s room to grow and room to make more. It\u2019s commission based. And maybe if that takes off, I could consider switching over into that. But right now I really do like what I do. I\u2019m just looking for some extra money on the side.<\/p>\n
Okay. I\u2019m going to give you my philosophy on this, and this is not the opinion of everyone at BiggerPockets or everyone in the world, just my personal way of looking at it. When we run into the problem, not enough capital, I want to scale, I want to buy more properties, I want to get more into real estate. You\u2019ve got two options. One road is look for creative strategies. And this is typically the one that gets put out as the best option. Go find someone that\u2019s got an off market deal and take over their loan.
Go find a deal from a wholesaler. Go do some kind of magic that you can figure out how to get this deal without money so you can scale. Go borrow money from other people. Learn how to raise private capital. The problem is we\u2019re often giving that advice to people that are newer to investing like yourself. Right?You want to get more reps and you want more at-bats. That\u2019s what you need.
The other option is to take that desire to buy more homes, which is this is the option that I took in life, and let that be the carrot that motivates me to go work harder, take more opportunity, get another job, start a side hustle, start another business, improve the way that I add value to the employer that I have. Do something to try harder.
So Garrett, you\u2019re a human just like everyone else, and there is a element in you that is powerful and brilliant, and genius. It\u2019s a lion. All right? We all have that. Most of the time, my lion does not come out unless I\u2019m threatened. Okay? Unless I\u2019m hungry. Then I actually realize what I\u2019m willing to go do. I got to want something. When my life is comfortable, I don\u2019t really function like the lion. When my life is uncomfortable, a different side of David comes out. And so this is an opportunity for personal growth, if you choose to take that.
You could go take more jobs as an engineer. You could start studying sales or business. You could change elements of your personality like I had to do when I became a real estate agent to become more charismatic and easier to talk to and less of a cop. I would encourage almost you and almost everyone listening to take that road. You want more than what you got.
You have skills in construction, you know you\u2019re good at real estate, you clearly understand this. It\u2019s time to level up. It\u2019s time to get over. Whatever insecurities, fears, worries, concerns, all of us carry around every day that keep us from moving forward, right? It\u2019s hard, it\u2019s scary. That\u2019s why you need the carrot. And you\u2019re feeling it, okay? So that\u2019s the advice that I\u2019d like to give you is what can you do to go get into a different career, a different industry, do more of what you\u2019re doing right now so you can make more money so that you can go buy this real estate that you want to.<\/p>\n
Yeah. Thanks, David. I\u2019ll have to consider that. It sounds like good advice.<\/p>\n
All right. Cool man. So going into the future, tell me the next steps you\u2019re going to take.<\/p>\n
I\u2019d like to, obviously, purchase more real estate. I\u2019m thinking one property every year following Brandon Turner\u2019s favorite or famous stack method. I just finished Multifamily Millionaire. It was awesome. And then eventually after five, six years of owning enough properties and becoming 100% financially free, I\u2019d like to travel more with my fiance, then wife, and just have time to spend with my family and be able to continue purchasing real estate and having that generational wealth for my family.<\/p>\n
Well, if that\u2019s the goal, personal growth, accomplish the real estate will definitely make that future even sweeter. So good luck with that, Garrett. Let\u2019s stay in touch.
All right, that wraps up our conversation with Garrett. Hope you\u2019re liking the show so far. At this part of the show, we like to pivot a little bit and read some of the YouTube comments that we\u2019ve received on previous shows. I like to hear what you guys have to say, what you\u2019re enjoying, what you\u2019re not enjoying, what you\u2019d like to hear differently. We read these and we do take them into consideration, so please keep commenting on YouTube as well as subscribe to this channel. If you can take a quick minute to hit that little bell to be notified when new shows air, like and then share this with anyone else who you think wants to grow some wealth through real estate.
Our first comment comes from Phil. \u201cI would agree that it\u2019s easier to find contractors right now, but I\u2019m still finding it tough to BRRRR. I find that it\u2019s more work on the front end, making sure the numbers work given the higher interest rates. What are your thoughts, David?\u201d Well, this is one of those issues where everything in real estate, there\u2019s always something that\u2019s difficult and something that\u2019s easy in different markets.
So when values were going up like crazy and anything that you bought was appreciating more and more people were buying, it was fueling the frenzy of prices going up, and finding a contractor was incredibly difficult to do. So even if you found a great deal, if you didn\u2019t have a person that could go in there and fix it up or their costs were absorbent, you had to pass on it.
Well, now there\u2019s contractors that are willing to work and their prices are better, but guess what? That\u2019s because there\u2019s less demand for them. And why is there less demand? Because it\u2019s harder to find the deals that work just like Phil is saying. Now, Phil, you\u2019re saying that it\u2019s harder to find deals at work because of interest rates, which leads me to believe that what you\u2019re referring to is it\u2019s harder to find something that will cash flow when you\u2019re done.
A few things to keep in mind on that front. You write the offer based on what numbers work for the cash flow. So don\u2019t be scared or don\u2019t hesitate to write lower offers in this market that favors buyers. It doesn\u2019t really matter what the list price is, it matters what your number is to make that work. We call that the home run number. So consider using some of BiggerPockets calculators to analyze these deals and find what numbers work and write your offers at that price. Then just follow up with these people to see who wants to play ball.
Another thing is I\u2019ve noticed that a lot of the newer investors, they tend to try to make up for creativity with volume. What I mean by that is they will analyze more deals that don\u2019t work, looking for the one that will. Whereas I would look at something and say, \u201cYeah, interest rates are too high to cash flow at that number. It\u2019s not going to work.\u201d So I\u2019m going to quit analyzing those kind of deals. I\u2019m going to look for a different kind of deal that would work. And how that actually turns out in real life is I look for properties that have more than one unit or even more than two units.
I look for ways in a property. Can I finish out the basement and make a separate unit? Does this one have an ADU that other people are not entering into their calculations? What additional ways can I generate revenue from a property that makes the numbers work? Remember how we were saying a while ago that you don\u2019t find great deals, you make great deals?
Well, you can find great deals in today\u2019s market, but you can still make great deals. So if you guys are banging your head into that brick wall, if it feels like you\u2019re trying to take that square peg and push it into that round hole and it\u2019s just not working out, find a way to take that square peg and put it into a square hole. Analyze different kinds of BRRRR opportunities with more than one source of revenue. That\u2019s what I\u2019m doing. I have three BRRRRs going on right now. No, four. And all of them, every single one of them I am adding square footage to that property or converting existing square footage to add a revenue generating component to the deal, which does make the numbers work. That\u2019s all you got to do.
All right. Our next comment comes from Abby Jose. \u201cHello, I\u2019ve been watching BiggerPockets videos for the past couple years. It\u2019s because of you guys that I refuse to give up on purchasing my first home post-pandemic as a self-employed individual. You are also the reason that I\u2019m gearing up to purchase my second property soon using the creative strategies that I\u2019ve learned from your YouTube videos. That being said, I am in agreement with many of the other commenters. I would love to see some of your personal deal deep dives. Specifically, I\u2019m interested in how you negotiate the deal with the seller and also how you deal with contractors.\u201d
All right, Abby, I appreciate that. We are actually working on doing that. In the future. You might have to be a little bit patient because a lot of the time I will put a deal in a contract and it is months before the rehab is complete and I have a rental history that I can actually show how a property is performing.
So I would keep in mind, three months from now, six months from now, you\u2019ll probably start seeing some deals that I bought six, nine months previously because I have some data that I can share saying how they\u2019ve been going and how it\u2019s been working out, and that\u2019s just part of the rhythm of real estate investing. But we\u2019ve heard you guys say that this is what you want. More specifics, you want to see how the deals work out. This is the first time I\u2019ve heard someone say how they\u2019d like to see me negotiate a deal.
So I will see if there\u2019s a way we can put that into the show. I\u2019d like to share that with you. It\u2019s something I teach my agents. It\u2019s something I teach the people to follow me. Negotiating is a huge, huge, huge part of getting deals in today\u2019s market and there\u2019s a lot to learn there.
Okay. Our next question comes from AZ. \u201cDavid, I want to know what pages are on your browser when you open a new window? For me, NerdWallet for interest rates, the MLS, BiggerPockets, and my email. Basically, I want to know how you stay up to date with one, the market, and two, news. Also, do you look at the 10-year treasury bond daily, and if so, where?\u201d
All right, AZ. So I actually have several tabs that are open on my computer every time I log in, and that is a different computer than the one I use for recording because I have so much open on it, there\u2019s not enough RAM to be able to record efficiently. So I have a separate computer just for making these shows. Were I to open the other computer, you would see my normal email that is several hours of work every day to keep up with.
My real estate CRM called Brivity that we use to track the deals that the David Greene team has in contract. My investment tracker, which is made up of several tabs. The first tab shows, here\u2019s all the properties I own. This is the loan balance. This is the current value. This is the equity. These are the interest rates. This is the loan servicer that I use to track my overall portfolio.
The second tab has a list of offers that I\u2019ve written that I\u2019m going to be following up with to see if I can put it in contract. The third is a tab that shows all the properties I currently have in escrow. The fourth is a tab that shows the closed properties that are currently under rehab. The fifth is a tab that shows my closed properties, the furnishing to get ready to go for Airbnb and so on and so forth. I have a tab in there to track every month how the properties did the month before so I can see what\u2019s vacant, what is performing well, what needs some more attention to be able to improve its performance, et cetera.
After that, I look at my goals every day. What are the goals that I set for this year? Am I on pace to meet them? Then I have a dashboard that shows the different companies I have and the main statistics I want to look at. So for the David Greene team, how many escrows we have. As well as which agents have them. For the one brokerage, how many total loans that we have in submission for the mastermind that I run, how many members we currently have in there, my social media improvements, the passive income from my investments, the money that I\u2019ve borrowed from other people that needs to be paid back. All that kind of stuff is on the dashboard.
I then go into my second email, which is specifically for my real estate portfolio with all the questions from property managers or contractors or the work that goes into that. Then I have a tracker that shows the overall profit of every company that I have and different revenue sources that I have. There\u2019s probably 25 different sources there that I review to see, \u201cAm I improving? Am I falling down? What\u2019s going on?\u201d And that is what I look at when I need to track what went wrong. We made this much revenue. Now, we\u2019re only making this much now as the CEO.
I have to dive in and find out did someone make a change that I didn\u2019t authorize. Did the market turn around on us? Did we lose a top producer? The dashboard is\u2026 Sorry, the RevTracker is how I track all the income that is coming in. Then I have the one brokerage growth plan that I review with my partner, Christian, and that has to do with the steps that we have for pushing that company forward.
There\u2019s always a book I\u2019m writing. Right now, it\u2019s a book called Pillars. So I actually have a tab open that shows that where I am in writing that book at that time, so I can work on that in between meetings. I have a page that shows all the projects that I have going on that don\u2019t fall into a specific company. I\u2019ve got a daily schedule by Google Calendar that tells me what I need to be doing, where I need to be recording and what needs to be happening, what meeting I need to be in.
I tend to check Bitcoin every day because I\u2019m looking to see if that falls more. I\u2019ve got a BiggerPockets inbox. I keep a tab open for that so I can try to keep up with the things that come in there. This isn\u2019t in my tabs, but I do have to check my DMs in Instagram, Facebook, and whatever other social media is out there to try to keep up with inquiries from that.
I have research I\u2019m doing for the book, Pillars. There\u2019s several tabs open for that as I\u2019m looking up studies that have been done in personal finance or how people can make more money. I\u2019ve got my David Greene team mastermind where we have a website that actually all the members talk in each other with and so I review that as well and more.
So I don\u2019t actually have a website that I\u2019m spending a whole lot of time looking up. I\u2019m tending to just try to keep up with the chaos of what is happening as I\u2019m building this ecosystem for investors to come to if they need whatever it takes to be able to have a trustworthy agent, loan officer, insurance provider. All the things it takes to be able to take what you learned at BiggerPockets and then go execute it.
So BiggerPockets is incredible at helping you start scale and manage your portfolio. And then I just try to fill in the little gaps of the specifics of what people need to be able to do that better. So most of the news that I get comes from specific searches that I do or something coming up in my phone. I\u2019ll get notifications that this just happened. I also listened to a lot of podcasts. So if you guys are wondering how I keep up with all this in the day, I don\u2019t really know how to tell you how I do it, but if you\u2019re not getting an answer from your email, this is probably why.
Whenever I\u2019m not working on something, if I\u2019m taking a break to go walk or I\u2019m going to the gym or I\u2019m going to eat, I put in my AirPods and I listen to different podcasts that talk about the same type of stuff. So I am constantly having information going in my brain about other people that have read the news and they have digested it for me and I get their take and their summary on it.
So I liked that you asked me that question. I left out probably two thirds of the other tabs I have open. I just couldn\u2019t remember them off the top of my head because I don\u2019t have that computer open. But thank you for that question. All right, we love it and we so appreciate your engagement. Please continue to do so. We would also love it if you would like, comment and subscribe on YouTube as well.
If you\u2019re listening on a podcast app, which many of you are, take some time to give us a rating and an honest review on there. Those help a ton. And in order for us to stay at the top of the business and the real estate categories, we need your ratings and reviews. So please do so.
Last thing, what did you think about all the tabs that I have open? Leave a comment about what information you\u2019d like to learn more about or what you thought when you heard me read those off. Tell me what you\u2019re thinking. All right, let\u2019s get back into some questions here. Our first question comes from Ryan Alexander in Pennsylvania.<\/p>\n
Hey, David. Ryan here from Pittsburgh, Pennsylvania. I am a real estate agent and investor. I started buying properties last year and I have eight doors in Cleveland and then I also have a short term rental in the Smokey Mountains. My question to you though is more geared towards the real estate agent side of things. I got my license back in 2019, but I was only part-time for the past three years. I went full-time this past March because help from the rentals and everything I was able to get out of my nine to five.
My question to you as far as the real estate side of things of being an agent is if you had to move into a new market for whatever reason and were in a market where you didn\u2019t know anybody or you didn\u2019t know very many people, what would you focus on to generate leads and basically dominate that market?
I just started doing videos because I\u2019ve heard obviously that\u2019s a big part of it, but I wanted to get your insight on it and I have your first book, I have the second one and everything, so I\u2019m waiting for that to come out. But just would like to get a gauge from you, an answer from you on what\u2019s what you would do in a new market like that if you were presented one and how you would go about it to generate leads and everything and get noticed in that market? So that\u2019s it. That\u2019s my question and I appreciate everything you guys are doing at BiggerPockets.
You truly are changing lives. I mean, you\u2019ve changed my family\u2019s trajectory for sure in the past year just alone with eight doors and the rentals that we\u2019ve gotten. So I appreciate it and looking forward to hearing your answer. Thank you.<\/p>\n
Well. Hey, Ryan, thank you very much for the compliment there. It does mean a lot that we\u2019re changing lives over here at BiggerPockets and frankly that\u2019s because how much money you have has such a big impact on the quality of life that you live. And it doesn\u2019t mean that I think you should go out there and buy fancy BMWs and wear jewelry. It\u2019s more about money enables you to have the freedom to do what you want, when you want and how you want.
So you\u2019re still working, you\u2019re just working in a different way that you enjoy more and I love hearing that. I\u2019ve often said that real estate and God are the only two things I\u2019ve ever come across that I can\u2019t outgive. As much as you give to real estate, it will give you more in return. I can tell that you\u2019re super bought into it because why else did you become an agent?
If someone gets their real estate license, everybody, it means they love real estate because you eat a lot of crap when you\u2019re an agent. You\u2019re often sort of dealing with the hardest parts of the entire economy or ecosystem of real estate. Your question specific was how do you move into a new area and dominate a market? All right. The short answer is you don\u2019t. You\u2019re not going to dominate a market moving into it as a new agent.
Let\u2019s get out of the sales pitches that people have to give realtors where they try to sell them software or a system or a marketing technique that will allow them to dominate a market. They\u2019re going to tell you, \u201cOh, send letters to every house and farm a neighborhood and go door knocking and introduce yourself to the people there.\u201d That was probably significantly more effective 20, 30, 40 years ago because he didn\u2019t know an agent until someone came and met you and shook your hand and you got a feel for him.
That\u2019s how people made decisions back then. I don\u2019t think people make decisions like that as much anymore. A certain demographic will, majority of them. I don\u2019t want to talk to someone who comes and knocks on my door and they shake my hand. I mean, some people may like that In general. I don\u2019t trust the person who just walks right up to me. I want to be able to research them.
I think a lot more people are doing that nowadays. When you meet a new person, one of the first things you do is you go look at their social media or maybe you go look at a website that they have, but you\u2019re trying to get information about a human to make a decision for yourself rather than just a gut feeling like what we used to get in person. So the farming technique doesn\u2019t work as much anymore.
Video does help that you mentioned specifically because it allows people to get more information about you. But here\u2019s the problem. Video is very easy to do which means every other realtor is doing it. And so we go deeper and deeper down this rabbit hole of how you make yourself stand apart and it\u2019s incredibly difficult to do because everyone else is already doing anything that I could tell you.
When you look at the realtors that crush it, there\u2019s a few patterns that I\u2019ve noticed emerge. The first one is that they have been in the industry for a long time. It\u2019s typically the agent that\u2019s been in for 20 years, 15 years, 25 years, that\u2019s doing so well. And as I ask myself, \u201cWhy is that?\u201d It became pretty clear. It\u2019s because they have the biggest database.
Time in the market as an agent, much like an investor is your best friend because you meet more people. That\u2019s what you really want. You want an army of humans that are sending you referrals, which is a relationship situation. And the longer you give yourself to build these relationships, and the more that you can build, the better you will do.
If you jump around from city to city to city too many times, it makes it too hard to build the relationships that agents need to thrive. The second thing that I will notice with successful agents that do really well is that they make sure that every client has the best experience possible. They don\u2019t try to automate their job. They don\u2019t try to turn it into something that\u2019s quick and easy. They\u2019re not transactional. They\u2019re actually not necessarily doing it for the money. The money follows the relationship. I know the difference between the agents that worked hard to make me money, that worked hard to find me deals and the agents that just waited for me to tell them what to go do.
The ones that work hard for me, the ones that go out of their way to find deals are the ones that get my business and my referrals the most. Again, it comes down to the relationship component. Now, if I were to move to a new market, the first thing I would consider is I want to move to market with high price points. I want to be selling $800,000 homes, $1.4 million homes, not $200,000 homes.
I would also brand myself as a person that helps people to make money. So you want people from out of your area to be looking for you because they\u2019re easier clients to work with. You don\u2019t go show them 70 homes. They look at the homes, you said. Maybe they find one on their own, they send it to you. You go to the property, you send a video, you do a lot of due diligence, the numbers work, they put it under contract. Those are much better clients than your standard ones.
So you want to be able to market yourself as someone who could do everything. You have the property management connection. You have the contractor connection. You have the lender connection. You know all the numbers to the city that they need to call to get the permits for whatever they want to do. Do you want to market yourself as the person that has all the answers that they would need?
Now, a lot of this is covered in the books that I\u2019ve written for BiggerPockets. The first one\u2019s called Sold, the next one\u2019s called Skill, and the third one will be coming out in the next couple months, it\u2019s called Scale. That\u2019s about how to build a team. I think that you mentioned those briefly, but I would definitely read those books.
Now here\u2019s the good news, there\u2019s very few good realtors out there. If you set yourself apart with a great work ethic as a person who comes up with solutions rather than gives excuses, as a person who goes and looks for what needs to be done rather than tells the client why it can\u2019t be done, you\u2019ll set yourself apart. And that advice is good for everybody. I just got off the phone call with my chief operating officer, Kyle, about a different person in our company and we had said, \u201cHey, can you go do this work for us to prepare for an event we have coming up?\u201d
And their response was, \u201cThis is why I can\u2019t. This is why I can\u2019t. This is why I can\u2019t.\u201d It is maddeningly frustrating when you need someone to do something for you or you want them to work through a solution and they give you all the reasons it can\u2019t work. Now, you\u2019re in the position of trying to overcome their objection and convince them why it can, get them to think creatively about the problem.
Don\u2019t be that person is what I\u2019m getting at. If you don\u2019t want to do something, just straight up say, \u201cI\u2019d rather not do that.\u201d Don\u2019t give all the reasons why it can\u2019t be done. The reason I wrote long distance investing and changed the way that people invest in real estate is everybody else said all the reasons it can\u2019t go right or it can\u2019t work. And I came up with a system that it could work.
The same is true for pretty much every business I\u2019ve started, book I\u2019ve written, or piece of advice I\u2019ve given. If you look at what it would take to make something work versus give reasons why it can\u2019t, you\u2019ll find yourself significantly more wealthy. Ryan, you got the love for real estate. You got the drive. I can tell your energy is very positive. If you\u2019re a solution-oriented person, you will absolutely succeed. I hope this advice helps you and reach back out and let us know how it\u2019s going.
Next question comes from Becky Pike in Oregon. \u201cI\u2019m in Oregon and I\u2019d like to invest on the Oregon coast, but so far I\u2019ve found that rents don\u2019t cover the mortgage payment very well.\u201d What that basically means, Becky, is that the price to rent ratio is not in your favor. The homes are too expensive for the rents they can generate, which is normal. When you get into higher price point areas, it tends to work out much more favorably in lower price points when you\u2019re looking into rent. And if you\u2019d like, I can give you a more detailed explanation of why that is.
Just put something in YouTube comments that you\u2019d like me to expand on that and I\u2019d be happy to do so. Back to Becky, \u201cThe properties I can afford are zoned no short term rentals, only 30 days or more.\u201d Before I keep reading, I\u2019ll let you know. The reason that you can afford them that they would work out is because you\u2019re not looking at long term rent. You\u2019re looking at short term rentals, which are much more labor intensive, but do generate more money.
So you\u2019re seeing, I can already tell in order to make that expensive housework, it needs to be a short term rental. But Oregon is one step ahead of you and they have outlawed short-term rentals. You have to rent them for 30 days or more. \u201cI\u2019d like to do medium turn rentals so I could raise the monthly rate, which I believe you mean to be higher than a traditional month to month rental. Where do I advertise such a rental so that traveling nurses and traveling workers can even find my place? Where are these people looking to find their medium term housing? Thank you, David.\u201d
Well, first off, Becky, you\u2019re asking the right questions, so congratulations on that. Second off, I\u2019ve got a couple resources for you. We recently interviewed Sarah Weaver and Zeona McIntyre who wrote a book for BiggerPockets about this exact situation, about medium term rentals and how to manage them.
I would check out that podcast and consider buying that book. Side note, if you\u2019d like to get 10% off anything that you order on BiggerPockets, just use my name as a discount code when you check out D-A-V-I-D. We also did an episode with Mark Simpson who manages short term rentals and gives advice for medium term rentals and he wrote about how you could do this without using online travel agencies, which is what you\u2019re asking about.
So I would consider listening to that episode learning about that. Funny how all these questions were recently covered in what we\u2019re doing and maybe getting his book too. I can tell you right off the cuff that Furnished Finders is one way that people find medium term rentals and Airbnb works the same way. So does VRBOO. You just classify it as a medium term rental.
And then the last piece of advice I\u2019ll give you is I don\u2019t look for that myself. I hire people who have experience doing this to be my property manager and they figure out where to go advertise it. So that\u2019s another avenue that you could take is finding a person who does this and hiring them to advertise on whatever platforms I specifically don\u2019t know about.
So to recap, you got the episode with Sarah and Zeona. You got the book with Sarah and Zeona. You got the episode Mark Simpson. You got the book with Mark Simpson. You got Furnish Finders, you got Airbnb, you got VRBO, and you\u2019ve got property managers that can help you. I believe that is seven to eight different methods that you can use and I do think you\u2019re wise to be taking this course of action and asking these questions. All right, our next video question comes from Aaron Horman in Kansas City.<\/p>\n
Hey, David. This is Aaron here. Got a question for you about investing in a city that I\u2019m not currently located in. So been looking in my hometown where I live and the market is pretty tough right now, so I\u2019m looking at maybe investing. I\u2019m looking for a property in some other areas that I\u2019m interested in. Just want to get your advice on how you recommend going about looking for a realtor in that area that can help me find the properties I\u2019m looking for. Thanks for your feedback and everything you do with the podcast. Great, I appreciate it.<\/p>\n
Thank you for that, Aaron and I do have some advice I can give you because I\u2019m in a similar boat. First one, if you didn\u2019t know it, I wrote a book called Long Distance Real Estate Investing that specifies exactly what you can do to find a realtor in another market if you want to do it by hand. So you can check out that book by going to biggerPockets.com\/longdistancebook and using the discount code David for 10% off. That will help you out quite a bit.
Second off, you can use the BiggerPockets agent finder by clicking on tools and then agent finder and typing in the area where you want to buy. You\u2019ll get a list of agents that are affiliated with BiggerPockets that understand the lingo that have worked with investors before. Research them and find one that will help you.
Third, you can reach out to me directly and you can ask, and if I have an agent in that area that I\u2019ve used before, I am happy to refer them to you.
And then fourth, you can actually start asking other people on the BiggerPockets forums if they\u2019ve used an agent and did they like them? Also, ask a question of what did you not like about this agent? That\u2019s a good question to ask. That\u2019s one of my favorite questions to ask. So if someone says, \u201cWell, I didn\u2019t really love that the agent was really pushy.\u201d I David Greene might like that. I might prefer an agent who\u2019s pushy because I have an idea of what I want, so pushiness doesn\u2019t bother me. I don\u2019t want a passive agent. I don\u2019t want an agent that I got to text first that I got to keep saying, \u201cCan you go do this? Can you go do that?\u201d
I want an agent that runs out there, does everything, comes back and says, \u201cDo you like it?\u201d And if I say no, they go do it again. One of my big pet peeves agents do is they text me an address or they email me an address and they say, \u201cHey, I like this property. What do you think?\u201d Then I have to say, \u201cWell, what kind of revenue is it going to bring in? Did you get that verified by a second property manager? What are the comps for this? What do you think the price that we could get it would be? Have you talked to a listing agent? Are they motivated?\u201d
Now, I got to give them a homework assignment that they got to go ask all these questions and I got to wait for them to come back. They should just do that first. Don\u2019t send me the house until you\u2019ve already called the listing agent and said, \u201cHey, I see you\u2019re listed for 1.5 million. Do you think we could get something done at 1.2?\u201d And they call the property managers and be like, \u201cHey, I think this house could work for my client. What do you think the numbers are like on this thing. What could they expect?\u201d
And then wouldn\u2019t it be amazing if they did the analysis for me and they said, \u201cHere\u2019s your income that you expect. Here\u2019s your expenses that I would estimate. They\u2019re conservative. Here\u2019s what I think your profit would be. Oh, and by the way, I\u2019ve already called the listing agent and they asked these questions and they said, \u2018I think if we have a number between 1.2 and 1.3, we got a good shot.’\u201d Wouldn\u2019t that be wonderful?
As an experienced agent, that\u2019s what I do. So I\u2019m just expecting other agents to do the same. Aaron, if you ask these questions when you\u2019re interviewing the agents and tell them that\u2019s what you like, you\u2019ll get a better feel for what you can expect when they are working with you and then be very direct about what you want.
That\u2019s another problem that the clients make. It\u2019s not always the agent. A lot of the time the client doesn\u2019t communicate their expectations because they don\u2019t want to seem needy or they don\u2019t know what\u2019s industry normal or whatever their issue is. And then the agent doesn\u2019t know how to serve them. So check out my book. Use the BiggerPockets forums. Use the agent finder and message me directly and I\u2019ll connect you to somebody in that area. Thank you very much.
And that advice goes to everybody else who\u2019s looking to invest in long distance as well. I am here for you and so is BiggerPockets. One of the key components of long distance real estate investing was this idea of a core four. I call it long distance real estate investing, but it\u2019s really a book about systems. These are the systems that I put in place and if I have these, I can invest anywhere.
A key piece of that is your team. And your team is made up of four people. Your deal finder, which is typically your real estate agent, your loan officer, your contractor, and your property manager. And if you have those four people, you can invest anywhere. So as you\u2019re doing this research, my advice would be to ask your realtors, \u201cDo you have a good contractor? Do you have a good property manager?\u201d
You\u2019re looking for realtors that can give you actual access to the people that you\u2019re going to need to get a deal done in that area. If they say, \u201cNo, I don\u2019t have any of that. No, I don\u2019t have any of that,\u201d they probably don\u2019t do a lot of deals, because just by nature of doing a lot of business, they come across referrals that are needed. So that\u2019s one of the things that I always prioritize.
Is this a person that can help me with putting my team together? And if they\u2019re not, they better have a very specific niche skill set. They better be great at analyzing deals. They better know a lot about short term rentals. They better have some access to off market stuff that other people don\u2019t have. There\u2019s got to be some reason I\u2019m going to work with you if you don\u2019t have a team, because then I got to put the team together myself. Good luck out there. Happy hunting.
All right. That is our show for today. Thank you everybody for joining us on this Seeing Greene episode. I hope that I gave you some information that you didn\u2019t already know that will help you in your journey, and I hope you had a good time listening. It\u2019s important that as I give you information, I also make it fun and easy to listen to. So let me know if there\u2019s anything I could do to make the medicine taste better, right?
The information is a brand muffin, but I can still put a little bit of icing on that brand muffin for you. So let me know what we could do to make this show better. We\u2019d love it. Please subscribe to the channel and remember to give us an honest review on whatever app you are listening to this show on. We could really, really, really use that. All right, everybody. I\u2019m going to get us out of here for today. Please check out another video or episode if you have time, and if not, I will see you on the next one.<\/p>\n