{"id":5343,"date":"2023-02-02T11:43:27","date_gmt":"2023-02-02T11:43:27","guid":{"rendered":"https:\/\/imsfund.com\/?p=5343"},"modified":"2023-02-02T11:43:27","modified_gmt":"2023-02-02T11:43:27","slug":"david-greenes-untold-story","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/02\/02\/david-greenes-untold-story\/","title":{"rendered":"David Greene’s Untold Story"},"content":{"rendered":"


\n<\/p>\n

Cash flow<\/strong><\/a>, cartels<\/strong>, building a real estate empire<\/strong>, and everything in between\u2014this is the story that many have yet to hear. The world of a real estate investor can seem glamorous<\/strong>. There are always so many properties, cash flow, retreats, speaking events, and jam-packed, money-making schedules that most nine-to-five workers would be envious<\/strong> of. However, what you\u2019re seeing is the result, not the journey. What about the seven-day work weeks<\/strong>, the night shifts<\/strong>, the financial stress<\/strong>, the bad tenants, and the failures<\/strong>? This is what made David Greene <\/strong>what he is today.<\/p>\n

To most, David Greene is the epitome of an entrepreneur. He owns a multimillion-dollar real estate portfolio<\/strong>, multiple cash-flowing companies<\/strong>, and hosts the best real estate podcast<\/a> ever (we\u2019re not biased). But just fourteen years ago, this was far from his reality. David was waiting tables<\/strong>, working at restaurants, trying to become deputy sheriff<\/strong>, and had no real estate <\/strong>to speak of. He sacrificed almost every weekend <\/strong>to make more money so he one day could own his schedule.<\/p>\n

In this episode, you\u2019ll hear precisely how David hustled for years to buy his first property<\/strong>, how his first tenant stole thousands from him<\/strong>, the long nights he spent working overtime<\/strong> to save up even more, and how eventually everything clicked, and he started building wealth<\/strong><\/a> at record speed<\/strong>. If you want an authentic look into the making of a real estate tycoon<\/strong> without the rose-colored hindsight, this is the episode to tune into.<\/p>\n

\n

David:
This is The BiggerPockets Podcast Show, live from Mexico.
My philosophy is that building wealth is a three-pillar system. There\u2019s offense, there\u2019s defense, and there\u2019s investing. If you cannot save money, it doesn\u2019t matter how much money you make, you\u2019ll never be wealthy. You\u2019ll just lose it. If you\u2019re very good at saving money, but you cannot make money, you will be grinding your entire life and never being satisfied. If you\u2019re one of those people that\u2019s like, \u201cI live off of $12,000 a year, but I make my own soap and I wear the same socks every day and I wash them with my hand,\u201d you\u2019re not getting the most out of yourself. Then if you\u2019re good at making money, you\u2019re good at saving money, you\u2019ll die with the big savings account, but never have passive income, never have exponential growth, you have to build to invest the money.
What\u2019s up everybody? This is David and Rob coming at you from Mexico where we are enjoying a wonderful getaway in Cabo. I believe this is\u2026 is it called Cabo because it\u2019s Cabo San Lucas, or are those two different places?<\/p>\n

Rob:
You know what?<\/p>\n

David:
I\u2019ve heard Los Cabos.<\/p>\n

Rob:
I don\u2019t know.<\/p>\n

David:
[inaudible 00:00:53].<\/p>\n

Rob:
I think it\u2019s Cabo San Lucas. I think it\u2019s just one area.<\/p>\n

David:
I think there\u2019s several Cabos. Maybe Cabo San Lucas refers to all the Cabos.<\/p>\n

Rob:
Perhaps.<\/p>\n

David:
Because somebody here has to know. It\u2019s the most gorgeous place I\u2019ve ever been. This is my favorite place in the world. Now, albeit I don\u2019t travel a ton, but I love coming here. Kyla and I were actually talking about wishing that we could put events together at this place.<\/p>\n

Rob:
This would be really cool. Yeah, there\u2019s a lot of things. [foreign language 00:01:13].<\/p>\n

David:
I see.<\/p>\n

Rob:
[foreign language 00:01:16].<\/p>\n

David:
[foreign language 00:01:21].<\/p>\n

Rob:
[foreign language 00:01:22]. Very tasty, just like my face. That\u2019s how that translates to.<\/p>\n

David:
I always think of that, but like marvelous. You\u2019re saying it\u2019s very tasty?<\/p>\n

Rob:
Well, I said the food is very [foreign language 00:01:33].<\/p>\n

David:
I see. I was very [inaudible 00:01:34]. If you didn\u2019t know, I speak a little bit of Spanish and Rob speaks a lot of Spanish and he\u2019s been helping me with it while we\u2019ve been here, but we\u2019re having a blast. This is an awesome place and we thought that while we were here, we would record a show that basically digs into my origin story of how little baby David ended up with a big real estate David.<\/p>\n

Rob:
This is a good one. This genuinely, if you have listened to the BiggerPocket show for many, many years, I don\u2019t think the nuggets and everything, the origins or I don\u2019t think we\u2019ve talked about it in this podcast.<\/p>\n

David:
We\u2019ve never made me the focus.<\/p>\n

Rob:
Yeah, this is really exciting. It was really exciting because the whole time I was just like, it\u2019s very relatable. You\u2019re a very relatable person. You need to tell us more about your origin story, man.<\/p>\n

David:
Well, you did a good job pulling back the layers. It\u2019s like Shrek. Ogres, \u201cI don\u2019t like onions.\u201d<\/p>\n

Rob:
And if you stick around until the very end of the episode, you\u2019ll actually hear David pull off a Russian-Spanish accent.<\/p>\n

David:
Yes, you will. I also learned while we here that Rob does not onions. Just like Josh Dorkin does not pickles. If you ever meet them in real life, don\u2019t give Rob onions and don\u2019t give Josh pickles.<\/p>\n

Rob:
It\u2019s so sad. It really is. I\u2019m Mexican. It\u2019s like a very staple food for us and my mom had to not cook with onion or she would lie about it when she made fun of us.<\/p>\n

David:
A shame in your family for years. Don\u2019t let our relatives know that Rob doesn\u2019t like onion.<\/p>\n

Rob:
Yeah. And then she would hide it from me. She\u2019d be like, \u201cNo, there\u2019s no onions in this.\u201d I\u2019m like, \u201cMom, I see the onions.\u201d I haven\u2019t talked to her in years because of it.<\/p>\n

David:
Well, in spite of that, you conquered your fear of onions as you pulled back the layers of me and you got deep into how I got started in real estate, what I did before real estate, the philosophy that I take when I\u2019m approaching real estate. You did a really good job.<\/p>\n

Rob:
I\u2019m a big fan of philosophical onions. Those I\u2019ll chow down on all day. Well, okay, well, let\u2019s get into it. But before we do today\u2019s-<\/p>\n

David:
Quicketh tippeth. Rob says, \u201cQuicketh tippeth.\u201d Now you have to say it in an old English accent. Today\u2019s quick tip is, \u201cDon\u2019t try to figure out everything yourself.\u201d If you read my book, Long Distance Real Estate Investing, I talk about my Core fFur. And part of the Core Four\u2019s job is to use them to find other people in the Core Four, so if you work with a rock star agent or a really good property manager or contractor, odds are they know other rock stars that are really good. And you significantly increase the statistical likelihood you\u2019re going to get a good person when you deal with a top producer who is a good person themselves. So, don\u2019t try to do everything yourself. Look for the people that are in your world that are already good, and ask them who they can provide that will help you on your journey.<\/p>\n

Rob:
That\u2019s a great and quicketh tippeth, my boy.<\/p>\n

David:
Thanks, pops. All right, let\u2019s get to the show.<\/p>\n

Rob:
Let\u2019s do it. So, we are talking about David Greene today, right?<\/p>\n

David:
All things green. It ain\u2019t easy being green. That\u2019s what Kermit the Frog once said.<\/p>\n

Rob:
I\u2019ve also heard that it ain\u2019t easy being cheesy.<\/p>\n

David:
That rhymes also.<\/p>\n

Rob:
It\u2019s Chester Cheetah.<\/p>\n

David:
Chester Cheetah, yeah.<\/p>\n

Rob:
I\u2019ve heard a lot of your POV. I\u2019ve heard a lot of your philosophies. I\u2019ve heard about your journey in its entirety. You\u2019re like, I\u2019ll say your story to me is very much like Moana, where I\u2019ve seen Moana 200 times with my daughter, but I\u2019ve never actually seen Moana from start to finish.<\/p>\n

David:
You\u2019ve seen pieces.<\/p>\n

Rob:
Yeah. I\u2019ve never seen the entirety of Moana.<\/p>\n

David:
But you don\u2019t know how it all fit together.<\/p>\n

Rob:
And I genuinely generally understand what Moana is about, but I don\u2019t know the story, and that\u2019s what this is for a lot of the listeners. We know David Greene, but we don\u2019t know David Greene, Jr when he was starting out in the real estate world, so I wanted to dive into that today.<\/p>\n

David:
Let\u2019s do it. There\u2019s no better time. We\u2019ve been getting closer. We\u2019re making memories. We\u2019re sharing experiences while we\u2019re in Mexico.<\/p>\n

Rob:
How\u2019d you feel about my analogy, by the way?<\/p>\n

David:
Pretty good. It was very good.<\/p>\n

Rob:
Thank you very much. I practiced that one in the mirror this morning.<\/p>\n

David:
Ripped off on you.<\/p>\n

Rob:
All right, so let\u2019s jump into it. So, you have been investing for how long now?<\/p>\n

David:
I bought my first property at the end of 2009. So, 12 years just about.<\/p>\n

Rob:
Tell us, take us back to that moment. Where were you in your real estate? Where were you in your career? What were you doing? Were you wanting to do real estate full-time? Give us that painting. Paint that picture first.<\/p>\n

David:
It\u2019s so funny because we talk about real estate investing as you need to have a plan, a purpose, know exactly what you\u2019re going to do, map it out, and then go execute it. It could not have been more different for me. I fell into real estate investing bassackwards. I had no intention of being an investor. I didn\u2019t know what it meant. I was saving up money to buy a house because I knew at some point I was going to need to buy one. And this was between 2002 and 2008, where we had one of the biggest hottest real estate runs that we\u2019ve ever experienced and it wasn\u2019t related to quantitative easing. That hadn\u2019t happened yet. It was just over-inflated bubble of an economy.
So, you couldn\u2019t save up money fast enough to buy a house. It was very frustrating. And I didn\u2019t want to buy a house during that period of time, but I knew I was going to need one. So, 2009 comes around. The market has pretty much crashed. A buddy of mine is in a bad situation because he\u2019s got a place under contract in Lathrop, California, but he\u2019s moving away to go to Bible College. He\u2019s going to lose his earnest money deposit. So, he says like, Hey, this is a bummer. Can you pray for me?\u201d And I\u2019m like, \u201cWell, let\u2019s go look at the house. Just see what it looks like.\u201d
He had it under contract at $215,000. It was a house that had been built three years earlier in 2006. It was big, probably like 2500, 2600 sq. ft. It just needed a vacuum run over the carpet. And I was like, \u201cYou know I might need to live in a house. Maybe I\u2019ll buy it and I\u2019ll just rent it out until I can live in it with my family.\u201d That was my original plan.<\/p>\n

Rob:
What were you doing at that time? What was your career?<\/p>\n

David:
I\u2019d been a deputy sheriff for maybe a year, maybe a little bit less than that. Before that, I had been a waiter while I was in college. And then I got out of college and I was a waiter for a year as I tried to get hired to be a cop. It takes a long time to actually have that happen. And then I finally got hired to be a deputy sheriff. I got through the police academy and then I had gone to work. And I\u2019d been doing that for probably nine to 12 months when this opportunity came up.<\/p>\n

Rob:
I\u2019ve always wondered this, and I think a lot of people wonder this because we know that you were a cop. Would you consider yourself a cool cop? Were you a cool cop? Were you like the, \u201cOh, man, that cop, that\u2019s a good\u2026 I like that guy. He\u2019s funny?.\u201d<\/p>\n

David:
That is a complex question. If you were a person who was a good person that did a bad thing, I was a cool cop.<\/p>\n

Rob:
Like running a stop sign?<\/p>\n

David:
Running a stop sign. Driving too fast. Like little violation type stuff that we all know we\u2019re not supposed to do, but it\u2019s convenient to do it sometimes. If you were a bad person, human trafficking, anything to do with hurting kids, stealing from people, something that would ruin someone else\u2019s day or their life if you did it, I was not a very cool cop.<\/p>\n

Rob:
Perfectly fair. Perfectly fair. So, you were cool when you had to be?<\/p>\n

David:
Yeah, and I was cool to the people that were like, if you\u2019re walking up to their car, you\u2019re detaining them for some reason and you see the look on their face like they\u2019re just already miserable. Like, \u201cOh, this is the worst thing. I\u2019m so dumb. I wish I wouldn\u2019t have done that.\u201d There was no reason to jump on you and make it worse and give you the whole, \u201cWhat are you doing speeding down my road?\u201d
I\u2019d always, when my partners would do that, I would just shake my head. \u201cYou were taking yourself way too seriously, man. We all do that.\u201d But if you were stealing something, if you were hurting somebody else, if you were looking to rob someone, if you were a professional deceiver, I was laser focused on catching you.<\/p>\n

Rob:
That makes sense. I just got pulled over by a cool cop two months ago. I was in a minivan.<\/p>\n

David:
Do you want to share your story of how you get out of every ticket you\u2019ve ever had?<\/p>\n

Rob:
That\u2019s right. So, I\u2019ve been work shopping this line when I get pulled over, the cop walks up to the driver\u2019s side.<\/p>\n

David:
And he says, \u201cExcuse me sir.\u201d<\/p>\n

Rob:
He says, \u201cExcuse me.\u201d I said-<\/p>\n

David:
\u201cDo you know why I pulled you over?\u201d<\/p>\n

Rob:
I say, \u201cYou a cop. You got to tell me if you\u2019re a cop.\u201d<\/p>\n

David:
And then he goes\u2026<\/p>\n

Rob:
\u201cHa, ha. That\u2019s funny.\u201d<\/p>\n

David:
\u2026 \u201cThat\u2019s good. You got me.\u201d<\/p>\n

Rob:
And then he goes, \u201cAre you Robuilt? I love your YouTube channel.\u201d That\u2019s how it plays out in my head. I haven\u2019t actually done it. I was like a cop pulled me over and I was like, \u201cOh, yes, sir. What can I do for you, sir?\u201d And he was like, \u201cYour lights weren\u2019t on.\u201d And I was like, \u201cOh, okay.\u201d And then he proceeded to go back into his car for 10 minutes and then he was like, comes back, I\u2019m like, \u201cAll right. My story checks out. You can look at my back. There\u2019s like a lot of Trader Joe\u2019s bags with milk in there.\u201d<\/p>\n

David:
Do you know what cops are doing when they go away to their car and they come back 10 minutes later?<\/p>\n

Rob:
I assume they\u2019re checking to see if I have any warrants out. Yeah. Okay.<\/p>\n

David:
Looking to see if you have warrants, if you\u2019re on probation, if you\u2019re on parole, if you\u2019re wanted for anything. Yeah, there\u2019s all kinds of reasons people could be wanted. There\u2019s sometimes people just aren\u2019t paying child support and they\u2019d just been getting away with it for a long time. There\u2019s bench warrant issued so that\u2026<\/p>\n

Rob:
Dang. Yeah.<\/p>\n

David:
\u2026 their baby mom can\u2019t get paid or something like that.<\/p>\n

Rob:
I\u2019d like to think he was watching a Robuilt YouTube video in this car, just checking out how to learn how to get into Airbnb.<\/p>\n

David:
Trying to figure out how to leave a comment on YouTube.<\/p>\n

Rob:
That\u2019s right, yeah. Anyways, okay, let\u2019s get back to it. So, you\u2019re a cop and at this point your buddy is trying to get out of this house and you\u2019re trying to\u2026 you\u2019re basically saving him from his-<\/p>\n

David:
Losing his earnest money.<\/p>\n

Rob:
From losing his earnest money. And were any of your friends on the force in real estate or was this really just a total shot in the dark?<\/p>\n

David:
I knew no one, man. I didn\u2019t know enough to even know what I didn\u2019t know. I didn\u2019t know what cash flow meant. I didn\u2019t know how to analyze a deal. I mean, I had a basic understanding of being able to tell what property taxes and insurance and mortgage was going to be. And my realtor said she thought it would rent for $1500 a month, maybe $2000, which that\u2019s a very big difference. And I wasn\u2019t even intelligent enough at that time to know there\u2019s a difference between $1500 and $2000. Clearly, she\u2019s not giving me good information if it\u2019s a 25% difference in the rent spread that she\u2019s talking about.<\/p>\n

Rob:
That\u2019s funny because that\u2019s how it is, the short term rentals. It\u2019s like they\u2019re very-<\/p>\n

David:
So, that wouldn\u2019t jump out at you, right?<\/p>\n

Rob:
No. It\u2019s all the returns are always good, so it\u2019s like, yeah, $1500, $2000, it\u2019s like you want to be dialed in, but it\u2019s not a big deal. But on a long-term rental, it\u2019s like-<\/p>\n

David:
Wildly inaccurate. It\u2019s \u201cI should have known.\u201d And then she didn\u2019t tell me that this property was an area that had higher property taxes because it was like special assessments where it were levied on this part of town. So, my property taxes, I estimated to be a certain amount. They were like triple what that actually was. There\u2019s a lot of things that I did wrong because I didn\u2019t know that that was a thing you were even supposed to look for. But that is very common when you\u2019re getting into a new endeavor.<\/p>\n

Rob:
So, what was the plan? You were going to come in and you said it needed to be vacuumed. Obviously, this means that it needed a light renovation?<\/p>\n

David:
Vacuuming was the extent of the renovation. So, I came in.<\/p>\n

Rob:
Literally just vacuumed.<\/p>\n

David:
Brought a vacuum from my parents\u2019 house where I was living to the house. Vacuumed it. I didn\u2019t even spray 409 on the counters and cleaned them. It was that good of shape. It was like a stain on the carpet that wasn\u2019t even that big of a deal. Threw it up on Craigslist with some pictures that I took with an electronic camera and then uploaded via like a USB cable into the computer because that\u2019s the way that we used to have to do things. I don\u2019t remember, I think I just put it up for $1500 for rent because that\u2019s what the realtor had told me. It sat there for a while and didn\u2019t rent for $1500. I dropped it to like $1200 and I got my first bite.<\/p>\n

Rob:
All right. Did he assign the contract to you or what happened? You said he was under contract?<\/p>\n

David:
Yeah, that\u2019s a good point, so I\u2019m getting ahead of myself. I called his agent and said, \u201cMatt can\u2019t buy this house. I think I\u2019ll buy it instead.\u201d And this was during a time, for context, where every house on a street, every three or four houses had a \u201cFor Sale\u201d sign. It was foreclosures everywhere you could look. No one was fighting to buy real estate.<\/p>\n

Rob:
Because this was 2009?<\/p>\n

David:
Yes. So, I called them and the listing agent was also the one representing him, which was common, they would double end it. But they worked for the bank that owned the property. It was real estate owned because the bank had taken it, the title back from the person that stopped paying the mortgage.
And I said, \u201cDo you think you could help me on the price?\u201d And she\u2019s like, \u201cYeah, let me see what I can do.\u201d She called me back the next day and said, Hey, we could do $195,000.\u201d And it was a good deal at $215,000. I was like, \u201cOh, my gosh. Okay, I guess I\u2019m buying it. What do I do?\u201d
She put me in touch with her lender. It was like a Wells Fargo lender, so it was going to be more expensive than everyone else. I didn\u2019t know the difference. Went through the process of getting the loan. Gave them all the stuff they needed. It was a pain in the butt because they were always asking for documents. I rented a room in a different part of town where I was working as a deputy sheriff and all my paperwork was at my parents\u2019 house, so I\u2019d have to wait till the weekend when I could go home and get the paperwork and then find a fax machine somewhere to try to send it in. It was very-<\/p>\n

Rob:
I feel like 2009, we\u2019re using fax machine.<\/p>\n

David:
There was an app on your phone called Jot Knot where you could take a picture with your phone and the app would convert it into a PDF and that was magic. When I could just take a picture of the document and then send it as a PDF, it would save me a day of time. I didn\u2019t have to go to Kinko\u2019s and scan it and that was amazing to me. And now, we don\u2019t even think anything of that. You just send a picture and send it in and that\u2019s what you have.
So, I got this loan and then close on the house and the realtor leaves a key and I put the house on Craigslist. And the first tenant who said they wanted a house, I just signed him up and I had found a lease online for free somewhere and that\u2019s what I printed out and had them sign it.<\/p>\n

Rob:
Did you do any tenant screening? Because you obviously didn\u2019t know much, but did you at least know the fundamental concepts of like, \u201cYeah, I lease it to a tenant. I do a background screening. I like charge a first month\u2019s rent for the deposit.\u201d How much of this were you knocking out on your first deal?<\/p>\n

David:
I had read in a Landlording for Dummy\u2019s Book, you should do that. And then when it came time to do it, I had signed up for much of overtime and I was in. The city was called Antioch, where I was living. It was like an hour away from Manteca where my parents lived. I realized I don\u2019t have time to go home and do any of this stuff, so I\u2019m just going to roll the dice and trust that if I\u2019m good to him, he\u2019ll be good to me. That\u2019s how ignorant I was about managing property.<\/p>\n

Rob:
Now, are you being hyperbolic or did you actually read the yellow\u2026<\/p>\n

David:
Yes.<\/p>\n

Rob:
\u2026 landlord.<\/p>\n

David:
Yellow book at a Barnes and Noble that said Landlording for Dummies. And like they said you should do any of that. And I was like, that\u2019s-<\/p>\n

Rob:
I love this. That\u2019s good. This is good. David Greene, the BRRRR king, the real estate co-host of the-<\/p>\n

David:
Hey, wait till you hear how this worked out.<\/p>\n

Rob:
All right, so you get into this deal, you\u2019re like, \u201cI\u2019m going to trust this guy. He seems like a nice guy. I\u2019m going to be good to him. I\u2019m a cop, so he can\u2019t be that bad to me.\u201d<\/p>\n

David:
Yep. He knew that. And I actually was thinking in my own head, \u201cOh, he wouldn\u2019t try to take advantage of me because I\u2019m a cop. He\u2019d be afraid of that.\u201d<\/p>\n

Rob:
So, what ended up happening?<\/p>\n

David:
So, what ended up happening is he made his first three months of rent, payments and everything was fine and then on the fourth when he stopped paying. And I started to reach out. He had a new excuse every time. \u201cOh, I sent the check in the mail. I don\u2019t know what happened. I\u2019ll send another one. Oh, I don\u2019t know. Yeah, I went and deposited it in your bank, in your account. I don\u2019t know why it\u2019s not there. Oh, I left it at your mom\u2019s house. I put it under the welcome mat. I don\u2019t know why that check is not there.\u201d
It was like thing after thing after a thing and then four months later I\u2019m like, \u201cDude, I\u2019m going to have to evict you. I don\u2019t know what to tell you.\u201d At around that same time I got a\u2026 what was the\u2026 let me think about how this came to mind. I can\u2019t remember the details of how it crossed my path, but I realized that the title company had sent\u2026 I know what it was. I remembered seeing my bills for property taxes were so much higher than I thought they would be because on the mortgage, they\u2019re collecting it through escrow.<\/p>\n

Rob:
And they\u2019re basing it based on that year\u2019s or the last owner\u2019s taxes, too, right?<\/p>\n

David:
And a special assessment. So, at first I thought it was just the special assessments. I expected them to be like $150. They were like $800.<\/p>\n

Rob:
This month?<\/p>\n

David:
Yeah.<\/p>\n

Rob:
Whoa.<\/p>\n

David:
Incredibly high. So, when I realized that\u2019s not all special assessments, I called the bank and they said, \u201cOkay, well, you have to go find out from the county why that\u2019s the case.\u201d I couldn\u2019t figure out how to contact the county, so I ended up calling the title company to ask them what had happened. They\u2019re like, \u201cOh, yeah, they\u2019re not supposed to be that high. They\u2019re collecting those based off of the house\u2019s previous value of $565,000. Not what you bought it for at $195,000. We will fix that.\u201d
A couple of months went by, it was fixed on paper, but they had told me they were going to send me a refund check. And I called to say, \u201cHey, where\u2019s that refund check for all the money you collected at escrow when we closed?\u201d And they were like, \u201cYeah, we sent it to you a long time ago.\u201d And I was like, \u201cReally?\u201d Like, \u201cYeah, it shows it was cashed at this bank.\u201d And so I went to the bank and they had a signature that was not mine and that check had been cashed.
It turns out that they sent the refund check to the investment property, not to my house and my tenant had cashed that check and been paying me rent for three months with my own money.<\/p>\n

Rob:
So, you were paying rent?<\/p>\n

David:
I was paying rent. My own rent of this house and getting lied to about where addition rent was going to be coming from. So, I realized that he had never paid rent. He had paid me rent with money he had cash from my check. He then got into a breakup situation with his baby mama and had told her he was paying the rent and he wasn\u2019t paying the rent and she wasn\u2019t paying the rent. So, when we tried to talk to her, she\u2019s like, \u201cYeah, we\u2019re paying the rent. I don\u2019t know what to tell you.\u201d And when I tried to talk to him, he didn\u2019t talk to me at all. And I realized, \u201cOh, I\u2019ve got an eviction on my hands now.\u201d<\/p>\n

Rob:
Wow. So, you stepped into real estate and on your first deal, you had an eviction come up.<\/p>\n

David:
Eviction, being lied to, getting ripped off, having my money stolen from me, just like thing after thing after thing was going wrong here.<\/p>\n

Rob:
It\u2019s like even as a cop, there\u2019s not really anything you can do because it\u2019s like a civil matter, right?<\/p>\n

David:
Yeah, and the rules for landlords, what I remember learning was there\u2019s so many rules for how I\u2019m allowed to go about getting this bad person out of my house, but there\u2019s no rules that he can\u2019t do this stuff.<\/p>\n

Rob:
It\u2019s so unfair, yeah.<\/p>\n

David:
Serving the legal, getting the legal papers made was a pain in my butt. I had to pay all this money to do it. He didn\u2019t have to pay for anything. And then serving the papers, I can\u2019t actually serve him. I had to go find another person that was a neutral third party that would serve them. So, you got to go through all the people you know willing to do this. And then they had to go through weeks of trying to catch the baby mama to get her paper served, so that we could start the eviction process.
And then you got to wait for your day in court, which can take months to come. It was a very frustrating experience. I remember at that time I thought if the market had gone up, I would have sold that house and never invested in a real estate again.<\/p>\n

Rob:
Man. Okay, so actually you said something that\u2019s crazy. So, you bought it for $195,000. They said they were taxing you based on the previous real estate price of like $595,000?<\/p>\n

David:
$565,000, yeah.<\/p>\n

Rob:
Does that mean that that\u2019s how much it crashed?<\/p>\n

David:
Yeah. In \u201906 when it was built and sold, it was sold for $565,000 as a brand new construction.<\/p>\n

Rob:
Wow.<\/p>\n

David:
Three years later I bought it for $195,000.<\/p>\n

Rob:
Do you still have that house?<\/p>\n

David:
Yeah.<\/p>\n

Rob:
Do you know what it\u2019s worth today?<\/p>\n

David:
It\u2019s probably like $525,000.<\/p>\n

Rob:
It\u2019s pretty close to that, the original.<\/p>\n

David:
Yeah, it\u2019s close to where it was.<\/p>\n

Rob:
Wow. Man, that\u2019s crazy So, you evict this tenant, you serve them and then you give up on real estate?<\/p>\n

David:
Yeah, so what happened was I listed it for sale again and I was like, \u201cWell, this time I\u2019ll try to be a little\u2026\u201d or it was listed it for rent again. I showed it to a bunch of people. And then one of the people that I was really leaning towards was telling me how they had a property manager that told them they should come check out the house. And I said, \u201cWhat is a property manager?\u201d You think that the title would be self-descriptive, but I didn\u2019t know.<\/p>\n

Rob:
Yeah, I understand.<\/p>\n

David:
And they said, \u201cOh, it\u2019s this person that connects with the landlord for you and we pay them the check and then they pay it to the landlord and they take care of everything else.\u201d And I was like, \u201cWell, that sounds better than what I\u2019m doing. Can I have their number?\u201d So, I remember writing it down on a piece of paper because cell phones weren\u2019t very common. And so, I called them and-<\/p>\n

Rob:
It\u2019s 2009, man.<\/p>\n

David:
Yeah, I know.<\/p>\n

Rob:
Not 1999.<\/p>\n

David:
But it wasn\u2019t like, I\u2019m trying to remember it. You were still writing stuff down all the time. You weren\u2019t just like, \u201cLet me put your information in my phone type of a thing,\u201d right?<\/p>\n

Rob:
Yeah.<\/p>\n

David:
There weren\u2019t smartphones is what I should probably.<\/p>\n

Rob:
I see. You didn\u2019t have that.<\/p>\n

David:
I had Nokia type phones. I had this flip phone with a keyboard that was super cool. Everyone thought I was James Bond when I would type with it.<\/p>\n

Rob:
A Nokia?<\/p>\n

David:
Yeah. And I called the person and he explained how it worked and he said, \u201cI collect 8% of the rent, but I\u2019ll do it for you for 7.\u201d And I was like, \u201cOkay.\u201d This person was not a good property manager. It turned out he was addicted to drugs. His girlfriend was actually the one running the business. He was terrible, but he was still light years better than me being terrible. And I realized, \u201cThis is a thing I need to let other people do.\u201d
It was so much better when I was collecting $1200 and I was giving him $100 of that or something like that. And I was keeping $1100 and my mortgage payment was probably like $850 or something. So, I was still making some money every single month and I had a person taking care of the problems. And it was my first experience with leverage and seeing how much better it is.<\/p>\n

Rob:
Man, obviously, you\u2019re still very active on the force and everything like that.<\/p>\n

David:
Yeah.<\/p>\n

Rob:
While you\u2019re dealing with these landlord woes, I got to imagine was that relatively inconvenient for you? If you\u2019re out in the field and you\u2019re like yeah, I don\u2019t know, I\u2019m trying to catch a bad guy if you will, then you get a phone call that this is happening on your property? Or was it pretty separated from your day-to-day?<\/p>\n

David:
Yeah. It\u2019s not very often that you get a phone call from a landlord saying something\u2019s going wrong when you\u2019re not doing a short-term rental. It\u2019s very infrequent. It\u2019s usually an email like, \u201cHey, the fence is leaning over. What do you want to do? Do you want to fix it? Should I get a quote?\u201d type of a thing.
What I do remember is that I was so worried about messing up at work, losing my job, not making the probationary period, as you should be when you\u2019re a new employee, that how the property was doing was really not a priority in my life. I just didn\u2019t want to have to deal with it. So, that-<\/p>\n

Rob:
Break even was like-<\/p>\n

David:
Happy to, yeah. I was like, \u201cI should have never bought this house. I\u2019m an idiot. If I could just break even, this is okay. I\u2019m going to focus on working overtime. I\u2019m going to focus on my career and I\u2019m going to focus on being a better police officer, learning as much as I can. Earning the respect of my peers.\u201d And the real estate thing is just like, \u201cI don\u2019t know what, I\u2019ll figure that out later.\u201d
Which was I think a healthier attitude to have because then when the things didn\u2019t go like I expected, I did not internalize it and say, \u201cI am the problem. I never should be doing this.\u201d Which is very easy to do when you\u2019re new.<\/p>\n

Rob:
So, you get this property manager, you understand now, not just leveraging. It\u2019s leveraging your time, right?<\/p>\n

David:
Yeah.<\/p>\n

Rob:
Well, what happens next? You get into your next property? Are you skittish about that thing?<\/p>\n

David:
Super not intentional. My mom calls me and she\u2019s like, \u201cHey, honey. There\u2019s a house down the street and it\u2019s really nice and it has a cute pool. And I just think you should take a look at it because wouldn\u2019t it be nice if you live closer to home?\u201d And I didn\u2019t tell my mom, but I\u2019m like, \u201cMaybe now that I know how property management works, I\u2019ll get another house.\u201d
So, I go look at the house and this is again a foreclosure. It had been in contract. It had fallen out of contract twice already. I got a different real estate agent working on it. The pool had been completely empty, but it was a nice pebble-tech filled pool with a waterfall. The backyard was really nice. It had this deck in the backyard because it was a two-storey home, off the master suite. I liked the house. It was really nice and it was close to where she lived. And I wrote an offer. I think it was listed at like $230,000. But it had fallen out of contract a couple of times. I wrote an offer at $183,500 and they accepted it.<\/p>\n

Rob:
On escrow?<\/p>\n

David:
Yeah. And I was like, I didn\u2019t know at that time if your first offer is accepted, you probably wrote too high of an up, right?<\/p>\n

Rob:
Yeah.<\/p>\n

David:
But I just thought, how do I turn that down if I could get it for $230,000. It\u2019s worth more than the house I already bought at $195,000 and I can get it at $183,000. And it\u2019s in a little bit of a better location. So, I ended up buying a second house at that time. Now, there was a refund that President Obama had come up with where if you bought a house during this time, you get this $8500 tax incentive, so I was getting that on top of it.
So, I bought the house. I got a different property manager company that was better. I still use them to this day that managed that property and it went way smoother. And I\u2019m like, \u201cOh, I own two houses now.\u201d The bad news is when I filed my taxes that year, I actually claimed it as an investment property like I should. And then I had to pay back the refund because it was only for primary residences.<\/p>\n

Rob:
I see.<\/p>\n

David:
You don\u2019t know when you\u2019re a new person how this stuff works. But the experience with that house was so much smoother than it was the first time because I had a better property manager that I thought, oh, real estate is not that bad.<\/p>\n

Rob:
I think were you just saving up money as a cop? You were making enough money to just buy these houses?<\/p>\n

David:
So, this is probably a better part of the story than just the buying of the homes. Because I think when people hear about a real estate investor or they hear about me as a real estate investor, the perception is they\u2019re a brilliant genius when it comes to deploying capital and making the most out of their money and they analyze better than someone else. I don\u2019t actually think that was my strength.
Where I had done well in life was I was very good at saving money. The whole time I was in college, I was working in restaurants and very focused on doing the best I could to make the most money possible. So, you\u2019ll frequently hear me talk when we\u2019re here at this resort about how impressed I am with the attitude of the staff. The person that was making my room this morning was so fast and so friendly and so happy and in such a good mood. You\u2019 re like, \u201cAre you on drugs? Is somebody holding you against your will and making you this happy? How are you so happy to be working?\u201d<\/p>\n

Rob:
It\u2019s true. They are phenomenal.<\/p>\n

David:
It\u2019s amazing. But I think part of it has to do with this is a very good job to have in this area. It pays better than other jobs. It\u2019s safer. They probably have some form of benefit. And their perspective is, \u201cAll I have to do is be nice to the guests and be good at my job. Making a room, cleaning a room, bringing up-\u201d<\/p>\n

Rob:
At this nice place.<\/p>\n

David:
In a beautiful resort with the ocean view. It could be. So, they have a great approach. I looked at my job like that. \u201cThis is so much easier than basketball practice. There\u2019s no pressure on me. This is so much easier than so many things I\u2019ve done. I just have to think fast and move fast and give guests good service.\u201d Being a waiter is the simplest. Now, this was at a nice steakhouse, so it wasn\u2019t like I was at Denny\u2019s. It was a little more challenging than a regular job. But my-<\/p>\n

Rob:
You\u2019re at a Sizzler.<\/p>\n

David:
Yeah, exactly, yeah. At the TGI Fridays with all my flair. But I remember working harder and being very competitive with all the other staff. I wanted to be the best person at that restaurant. I wanted my boss to like me the most, so I wanted to be able to wait on more tables, give better service, make more money, work longer hours, work more of them. And I gamified that.
A lot of it\u2019s in the book I\u2019m writing for BiggerPockets right now called Pillars, where I tell this origin story of what I did. But what ended up happening, long-story short, is I had a goal of saving a minimum of $500 a week. This is back in like 2004 dollars, 2003. And then I got a better job at a better restaurant after I went through reconstructive surgery in my ankle and I could save even more. I was in college, but I was still working full time. I wasn\u2019t like taking trips to Cancun and spending all my money. I never understood why 21-year-olds think they need a vacation so bad because most of their lives are not that hard.<\/p>\n

Rob:
Their life isn\u2019t.<\/p>\n

David:
Yeah, that\u2019s exactly right. You\u2019re like mom and dad are paying for college and you don\u2019t really have any responsibilities other than studying for a test. So, I would drive an hour to school, drive back, drive an hour to the best place I could find to work at a restaurant and I would save that money. And when I graduated college, I had my school paid for. No student loan. My car paid off cash and I had over $100,000 saved in the bank.<\/p>\n

Rob:
Whoa. When you graduated college?<\/p>\n

David:
Yeah, stepping out of college, and that wasn\u2019t like trust fund baby. And also, I wasn\u2019t like in an orphanage. I still had a pretty strong support system, but I made the most out of what was there. So, I came out of college with $100 grand and then I got a job as a deputy.
And I was like, \u201cWell, what do I need to do on the weekends? I don\u2019t have a family. I don\u2019t have responsibilities. I could sit around at home or I could just fart around or I could go work overtime. And I could let some of the older guys that have families get some time off by picking up their shift for them. And so, that\u2019s what I would do. And then I was making good money and saving money.
So, when opportunities came, which was the crash in 2009, 2010, 2011, or you see the house that was under contract for 230, you can get it for 183. I had enough money set aside that I could not only afford to buy it, but I didn\u2019t have fears of \u201cWhat if I go broke?\u201d And there was more money that was always coming in. It was literally the management of money and the management of myself because that\u2019s what money management is. It\u2019s managing your own desires.
If you can\u2019t control yourself, if you can\u2019t delay gratification, you\u2019ll never be good with money. Those two things are just tied together. And because I was able to do that, I had money to invest in real estate, which ended up growing and I ended up learning how that worked. But that\u2019s why I was able to buy these houses that you\u2019re talking about.<\/p>\n

Rob:
That\u2019s great. That is really good because a lot of people are like, \u201cWhoa. Well, what if you don\u2019t have money or it takes money to make money.\u201d And it obviously it\u2019s true in some capacities, but you were a broke college kid and you kept yourself broke by saving all your money. People don\u2019t really ever put two and two together that making money is as important as saving money.<\/p>\n

David:
Yes.<\/p>\n

Rob:
You come out of college, you have 100 grand, then you\u2019re working on the force, and then you\u2019re working overtime. And now, you buy this first house and you get into your second house. What were the downpayments on these? Were they entry level 5% or were they like the 50%?<\/p>\n

David:
No, they were like 25%.<\/p>\n

Rob:
Wow, so you were really going. You were really putting a lot of your savings into real estate?<\/p>\n

David:
Yeah. It feels it\u2019s a lot of money when you\u2019re that age and you\u2019re dumping them. My first house $195,000 that would have been\u2026 what\u2019s 25% of that? It\u2019d be about $50,000, right?<\/p>\n

Rob:
About 50.<\/p>\n

David:
$50,000 down plus your closing costs. The next one went $183,000. It\u2019s similar numbers to that. The third year my grandma passed away and the family was talking about selling the home. But because at that point my identity has started to rebuild self, \u201cI\u2019m a real estate investor,\u201d not just \u201cI\u2019m a cop who owns a house.\u201d I actually had the foresight to say, \u201cWhy don\u2019t we get an appraisal and I\u2019ll buy it from you guys for what an appraisal for. You can save the realtor fees.\u201d
I wouldn\u2019t have thought that way before my identity was shifted that way and I had the money. So then, I bought her property and then I used the property manager company. I had to rent that out. And now, I was this\u2026 this sounds weird because we interview people on the podcast so often that are 23 years old with 20 units.<\/p>\n

Rob:
I know.<\/p>\n

David:
Right?<\/p>\n

Rob:
Yeah.<\/p>\n

David:
Not the case before podcasts, before internet, before YouTube. There weren\u2019t young kids that were owning a lot of houses. You\u2019d hear these adults that would hear my story, \u201cYou have three homes? And you still rent a room from another cop for $500 a month, but you owned rentals.\u201d I ended up having eight rentals before I ever bought a house.<\/p>\n

Rob:
For yourself?<\/p>\n

David:
Myself, yeah.<\/p>\n

Rob:
Wow. So, were you renting at that time?<\/p>\n

David:
Yeah, I was house hacking, but on the other end of it, where he owned the house and I would rent a room from him. I didn\u2019t need a whole house. And I was like I\u2019m a young guy. I\u2019m working all the time. I need a bed to sleep in and a place to keep my stuff. I need a washer to wash my clothes and a kitchen to cook food. That was about all that I needed.
So, that\u2019s how I lived. I rented rooms from other cops for a long time. And I got all the benefit of having a big nice house that, and we usually work different shifts, so we weren\u2019t around each other very often. It was very comfortable, but I wasn\u2019t spending $2,200 a month on rent, like the people who wanted their own apartment or wanted their own place.<\/p>\n

Rob:
And the landlord or the cop or your buddy, they were probably like, \u201cMan, I\u2019m getting 800 bucks a month.\u201d<\/p>\n

David:
Yes, that\u2019s true.<\/p>\n

Rob:
And so, that\u2019s my mortgage.<\/p>\n

David:
He\u2019s making 500 bucks a month for me. The first guy paid $300 a month for his room and he was just happy to have\u2026 he was lonely. He\u2019s like, \u201cOh, I got a roommate. We get to hang out and talk. We would work out together. And it\u2019s again, if your mortgage, if you bought a house during the downturn and your mortgage was like 1200 bucks, to get 300 bucks was like-<\/p>\n

Rob:
It\u2019s big.<\/p>\n

David:
Yeah.<\/p>\n

Rob:
Dude, my first house, even after I was 20\u2026 man, what was it? 2013, 2014, it was really not making a lot of money. I think I was making 40 grand and my wife and I just barely, barely squeaked into a home. I got enough money from my tax return, a couple of thousand, and then I had this guitar amp that I worked so hard. I was playing guitar gigs on sixth Street in Austin, Texas, and I saved up $5000 doing that. It was my dream guitar amp. And I remember being like, \u201cAll right, it\u2019s time to get serious.\u201d
I just remembered this couple of weeks ago. I was like, \u201cHow did I buy my first house?\u201d And I sold the guitar amp and I got into this house and it was like $1100 bucks a month and my buddy was paying me $400 a month to live with this.<\/p>\n

David:
That\u2019s close to half of your mortgage.<\/p>\n

Rob:
It was a game changer.<\/p>\n

David:
More than a third of it.<\/p>\n

Rob:
Yeah. I was just like, I cannot believe I\u2019m making $400 on a room. House hacking is just such an enabler of wealth, I think.<\/p>\n

David:
Well, I think the key is respecting money. And what I mean by that is it\u2019s easy to think, I make this much money. I have to work. Money comes in. You spend it on the things you want. Not understanding you don\u2019t actually have to work or you could work an easier job and make less money or a harder job and make more money. There\u2019s a connection between the money that you\u2019re earning and the amount and the quality of life that you may be struggling from.
Elon Musk has a quote that, \u201cThe amount of money you earn is in direct proportion of the quality of problems you solve.\u201d If you solve complex, hard, stressful problems, you usually are going to make more money, but your quality of life is going to go down.<\/p>\n

Rob:
Sure.<\/p>\n

David:
We\u2019d all rather not do hard things if we could help it. So, I had a clear understanding that money is related to me being tired because I worked overtime or not hanging out with my friends or pushing myself when I didn\u2019t want to have to do something or just be in an environment I don\u2019t like, so I didn\u2019t want to waste it. It had an inherent meaning to me. And if I could figure out a way to save money by living with someone else or keeping my money in the bank, I saw that it was empowering.
Now, I did not know that planting these seeds in real estate would grow at the exponential rate they did and put me in a position of being a wealthy person. I had no idea this is how it was going to turn out, but I did understand that you need to respect money and if you\u2019re throwing it around like it\u2019s nothing, you\u2019re not respecting your own time, your own energy, your own effort that you\u2019re putting into life and the people that are supporting you. You\u2019re never going to stop working and you\u2019re never going to have a job that you like.
Now, we share the message on BP, \u201cPeople, this is how it can work out. You should do this.\u201d But I didn\u2019t understand it was a journey of faith that I was taking. It worked out like this.<\/p>\n

Rob:
Okay. That was your third house. It was someone in your family. There was-<\/p>\n

David:
Grandmother passed away.<\/p>\n

Rob:
Grandmother passed away. And at this point, things are clicking?<\/p>\n

David:
Mm-hmm.<\/p>\n

Rob:
And then you go into rehabs at this point or are you still just looking?<\/p>\n

David:
I bought my first four-plex.<\/p>\n

Rob:
So, you decided to multiply your problems times four?<\/p>\n

David:
Yeah, yeah, I did. And it was such better cash flow that when I bought that four-plex, I didn\u2019t know what ROI meant. I didn\u2019t understand real estate math.<\/p>\n

Rob:
Which means a return on investment.<\/p>\n

David:
Thank you for that.<\/p>\n

Rob:
Yeah.<\/p>\n

David:
I\u2019ve recently figured that out and now, I teach everybody something. I figured out 12 minutes ago. What I looked at, it was like when I did the math on it in my own, on my napkin or whatever, it\u2019s like, \u201cOh, my God, I can make this money back in three years.\u201d<\/p>\n

Rob:
Because this was before cell phone, so we didn\u2019t even have calculators.<\/p>\n

David:
The calculators. Right.<\/p>\n

Rob:
Yeah, like did on a napkin.<\/p>\n

David:
Did it on a piece of paper.<\/p>\n

Rob:
Then you fax it to yourself?<\/p>\n

David:
And I was like, I didn\u2019t know that was called return on investment, but it was like a 32% return on investment. And I just remember thinking, I\u2019m going to get all this money back in only three years and I\u2019m still going to have the property and the cash flow. This is cheating. How is no one else doing this? Even though I already owned three properties, they probably brought in a total of a thousand bucks a month or something.
That thing, I bought it, every unit was $700 a unit. There was four of them. I immediately bumped the rents up to $800 and it was cash flowing close to what all three of the other ones were.<\/p>\n

Rob:
Wow.<\/p>\n

David:
And it wasn\u2019t the deal of the century. Yeah. It was listed at 250 or 260, and I bought it for 10 grand, less than that. My realtor that I bought it from, owned it. She had bought it as a foreclosure. I went in and I bought it from her. And I remember thinking, \u201cI\u2019m going to buy as many of these as I possibly can.\u201d That\u2019s when it really clicked and I got intentional about real estate. And this was 2013. And at that exact same time, the California market completely turned around. It took off. You couldn\u2019t buy anything. And I was like, \u201cNo, my dream is getting away,\u201d when I had started to figure it out.<\/p>\n

Rob:
Dang. So, what was that like? Because I think you said you owned three and then you decided to get a four-plex. That\u2019s a giant graduation, I feel like, to go from three homes to now doubling your portfolio. Were you super excited to get into that? Were you worried? Because this is where a lot of people get in their head where they\u2019re like, \u201cI don\u2019t know if I\u2019m ready to double up quite yet. I\u2019m barely figuring out how to do.\u201d<\/p>\n

David:
No, man. It was easier to own that one than the other three.<\/p>\n

Rob:
So, you felt that going into it?<\/p>\n

David:
Yeah, I didn\u2019t know that. I was just too ignorant to know it was a very big difference.<\/p>\n

Rob:
I see. I see. So, you do it and then when you were mathing it out, you mathed it out before you made the offer and you\u2019re like, \u201cThis makes a lot of sense.\u201d<\/p>\n

David:
Yeah.<\/p>\n

Rob:
What comes next?<\/p>\n

David:
So, after the four-plex, the market turns around in California. I can\u2019t buy real estate anymore. I spent a year and a half, two years sulking. \u201cI lost my chance. I can\u2019t believe I didn\u2019t figure this out until now. It\u2019s too late to buy real estate. Nothing cash flows anymore.\u201d I finally remember cash flow was just in time to realize I can\u2019t do it.
And I\u2019m watching this commercial and it was like they were advertising some finance thing that caught my attention. And then when the commercial ends, it was on Fox Business News, there\u2019s a real estate agent talking to one of the talking heads of finance about the Arizona market. And her name was Tanya. And Tanya was a big shot agent that was like, \u201cA lot of markets are correcting already.\u201d
I\u2019m like, \u201cThey sure are. Sister, preach it. This sucks.\u201d \u201cBut the Arizona market really hasn\u2019t yet.\u201d I was like, \u201cHuh?\u201d \u201cWe still haven\u2019t come out of our hole. We\u2019ve got a lot of foreclosure inventory. Houses are selling. This is a great investor market.\u201d And all these are key words that I\u2019m listening to.
So, I look her up online. I find her phone number. I start calling her phone every couple of hours for a couple of days. I probably called that number 50 times. Because in my head, a big shot agent is like a celebrity. It\u2019s very hard to get a hold of them. Like you\u2019d think that I was a real estate agent, they\u2019d want your business. She backed now that I am that one.
And I finally got a hold of her and I told her I own some property and I wanted to buy in Arizona. And she sent me some examples of properties and then I mathed them out and I was like, \u201cOh, the return on these is really good.\u201d There\u2019s somewhere between a 15 and 22% return on all these four-year-old houses. So, I flew to Arizona. I met with her. I got pre-approved with her lender.
I looked at a bunch of houses. I wrote offer after offer after offer. They were all very below asking price and nothing got accepted. And then after my third trip there, she sent me two homes that she had not shown me before, like they just hit the market. I wrote an offer on both. They both got accepted.<\/p>\n

Rob:
Did they need any work or were they turnkey?<\/p>\n

David:
No, they needed paint. And that was just because-<\/p>\n

Rob:
It\u2019s a little bit more than vacuuming the carpet.<\/p>\n

David:
Yeah, ut not too much. That\u2019s about it. The person who had lived there had just painted this one room green, this one blue, this one yellow, that type of thing. So, this needed to be painted. And I was like, \u201cWell, which one should I buy? Screw it. I\u2019ll just buy both of them.\u201d And I remember I bought them each for $117,000. And then one of them appraised for 114. And I was like, \u201cOh, I got ripped off. I\u2019m so dumb. I don\u2019t know. I can\u2019t believe I overpaid. I don\u2019t shouldn\u2019t be doing this. I don\u2019t know that market.\u201d
And so I just remember asking her, \u201cWell, when I buy them in California, I need a property manager. Do you have one?\u201d \u201cOh, yeah. We have one that works with our office.\u201d \u201cOkay. And I always need a contractor. Do you have one?\u201d \u201cOh, yeah. We use this guy.\u201d All right. And then she\u2019d already introduced me to her lender and so, I just figured out, \u201cWell, when I have one here, I use this person. I\u2019ll just find one in Arizona.\u201d And what do you know? The contractor of the property manager, the agent, they all happened to know the people that I needed.
Now, were they the best vendors ever? No. But I eventually found the best vendor by bouncing around from person to person until I had a couple of others. And then when I had a really good contractor, I got confident. I\u2019m like, \u201cOkay, I got these two houses rented out, the property manager company is managing them. Everything seems to be going okay.\u201d
But the HOAs there are giving me headache, so I want to find something not in HOA. So now, I\u2019m looking for houses with her again and I\u2019m feeling better and I\u2019m more aggressive. And I\u2019m talking about real estate at work, and I\u2019m intentionally working a lot of overtime to save more money because I want to put it into real estate now. I\u2019m like doing it on purpose.
Finally, she stops accepting my calls. She stops responding to my emails. She goes dark. I call her broker. I can\u2019t talk to you. What is up with this? I find out six months later, she had been arrested for helping the cartels launder money through real estate.<\/p>\n

Rob:
Whoa.<\/p>\n

David:
And the judge issued a gag order that she was not allowed to speak about real estate in condition of being let out of jail. And I found a video of her walking into court in orange jumpsuit and chains. I\u2019m like, \u201cThat\u2019s my person that\u2019s hooking me up in Arizona. What am I going to do? I don\u2019t have her.\u201d So, I called the property manager. He is like, \u201cOh, yeah. We heard about that.\u201d I was like, \u201cWhat am I going to do?\u201d He\u2019s like, \u201cI could connect you with another agent.\u201d I was like, \u201cOh, I guess that-\u201d<\/p>\n

Rob:
Yeah, I guess that does make sense. There are thousands of them in Arizona, but-<\/p>\n

David:
And that just goes to show when you\u2019re a newbie, it is so common to freak out emotionally over these things that are not a big deal, but they feel like it when you haven\u2019t done it before.<\/p>\n

Rob:
All right. This is crazy, man. It\u2019s really good. So, you see this TV commercial and there\u2019s someone that\u2019s like, \u201cDo you need to buy a home? We buy ugly homes. I\u2019m the best realtor in Arizona.\u201d<\/p>\n

David:
Yep.<\/p>\n

Rob:
\u201cCall me.\u201d Boom, boom, boom. And it actually worked. You\u2019re like, \u201cWhoa, this is crazy. She\u2019s on TV. She\u2019s a celebrity. I got to call her.\u201d And then she actually ends up being good.<\/p>\n

David:
Yeah.<\/p>\n

Rob:
And then she\u2019s obviously so good that she catches the cartels.<\/p>\n

David:
She goes for the cartels, yes<\/p>\n

Rob:
That\u2019s right. And then you need to buy more properties and she\u2019s gone. So now, faced with this difficult decision, you have to find another realtor of crazy talk. At this time, you find another realtor.<\/p>\n

David:
So, I find the other realtor by late at night working graveyard one night, looking up Arizona houses. I find a website that seems to have more homes for sale. This was called IDX. There was a technology that was new at the time where realtors could have their own website and they could stream what was available in the MLS through their site. This is before Zillow took off, so you didn\u2019t go find a portal to look at homes as much as you would find a website of a realtor and you\u2019d look for homes through their website and then they could see what you were looking at. It was like a sales funnel type thing.
For whatever reason, his name was Joshua Smith that his site just seemed to have a stronger price of rent ratio and nice houses. So, I reached out to Joshua Smith. He ended up being one of the top realtors in the country at that time. And then he connected me with Billy. And Billy ended up becoming my guy and his team, became my go-to Arizona agent. And then Billy helped me buy probably five or six houses in Arizona over the next three years.<\/p>\n

Rob:
Billy from realtor that I? Wow.<\/p>\n

David:
That\u2019s good old Billy.<\/p>\n

Rob:
He\u2019s been around for a while.<\/p>\n

David:
He was there. He was A one from Day 1, man. Billy connected me with better contractors. And now, I would look for houses that were really small, like a 1200 sq. ft. house in a neighborhood full of 2000 sq. ft. homes. And his contractor could add extensions to make them bigger. And back then it was like, I mean, literally, you could add a wing of a house for $35,000. Stuff that would cost you a $100,000 today.<\/p>\n

Rob:
But wasn\u2019t that crazy though to buy a house in Arizona when you lived in California? Because obviously people have done long distance investing throughout history. But I feel like it\u2019s a way more popular thing now as technology applications.<\/p>\n

David:
And that was a book that I wrote.<\/p>\n

Rob:
That\u2019s right. That\u2019s what started it all.<\/p>\n

David:
So, part of the problem, Rob, was I was too ignorant to know it was risky.<\/p>\n

Rob:
I see.<\/p>\n

David:
No one was telling me it was a bad idea until I told them I was doing it, and then everyone would say, \u201cThat\u2019s a bad idea.\u201d<\/p>\n

Rob:
Got it.<\/p>\n

David:
And I wasn\u2019t arrogant. I was like, \u201cOh, my God. I can\u2019t believe I\u2019m doing this. It\u2019s a bad idea.\u201d But I just kept thinking nothing that they\u2019re saying is going wrong. None of that happens. I haven\u2019t been ripped off by a contractor because I just make him send me a video of the work he did before I send him the next drive. I\u2019ve never sent a contractor the whole price for the whole construction that I don\u2019t know right off the bat.
And I always ask my agent who he uses, and my agent is one of the top performing people in the state. He\u2019s not going to give me a bum. He\u2019s probably used these people before. And just all the things that people were telling me could go wrong, weren\u2019t going wrong. And it was hard for me to believe that out-of-state investing was terrible and I wasn\u2019t finding the cheapest market that I could.
I really believed in the fundamentals of Arizona at that time. It was still near the bottom after a big crash and people still needed a place to stay and rents were slowly going up and values were going up. And so, I kept doing it, but what I did have to do was build systems. I could not rely on myself to go fix the problem that was happening. I had to find the person to go do it, which was eventually what made it into Long Distance Real Estate Investing, the first book I wrote is, this is how you build systems and checks and balances to make sure that you\u2019re not getting ripped off in real estate.<\/p>\n

Rob:
Did you stop at Arizona or did you continue to buy around the country?<\/p>\n

David:
I bought until Arizona was too expensive to make sense to cash flow. Same thing as California. I realized the pattern that coastal markets like the West Coast and the East Coast tend to fly up the highest and then they tend to crash the hardest. And then it\u2019s like this ripple effect that moves inland from there in the middle of the country, nothing ever happens. It just stays static. Stuck in time, like Captain American in suspended animation forever. A couple states in, you got Arizona. Then that market gets too high and you kept moving in.
So, I had the same problem and this time I would talk to people and say, \u201cI can\u2019t buy houses anymore.\u201d I got, what, I had four properties in California and then end up with five or six or seven in Arizona. And I met a guy through Go Buns that said, \u201cMy buddy is the VP of something at this bank in Florida. Let me talk to him.\u201d And he came and said, \u201cHey, they\u2019ll give you a line of credit for a million dollars to buy properties in Florida.\u201d And I was like, \u201cWell, I\u2019ve done it in California. I did it in Arizona. I\u2019m going to go do it in Florida. What do I need? Well, I need these four guys. If I got an agent, a lender, a contractor, and a property manager, my core four, I can figure it out.\u201d And that\u2019s what I did.
I bounced around. I found a couple of agents. I bounced around and found a couple contractors. I found two I liked. The bank in Florida was financing it. The property manager, I bounced around until I had one I liked. And that\u2019s when I really started scale and grow a bigger portfolio.<\/p>\n

Rob:
At what point does the BRRRR strategy start hitting with your portfolio?<\/p>\n

David:
At this time in Florida. So, I realized at that point I could buy if I busted my butt and worked every day of the week, I could buy maybe three properties in a year. Because I-<\/p>\n

Rob:
You\u2019re working overtime, making extra money that-<\/p>\n

David:
And just having no life. You\u2019re just working every single day to do that. And I just thought, \u201cI can\u2019t do this forever.\u201d And we didn\u2019t have what was called the BRRRR, but something clicked where I rehabbed a house and it was worth so much more than what I had paid for it. And it wasn\u2019t like a hard money loan. I had just bought it in a normal way. And then after the rehab, my realtor was like, \u201cDude, you\u2019ve got like $100,000 in equity.\u201d
And I was sitting at work one day and I remember thinking, something clicked in my head. Instead of trying to get money from the police department to go put in houses, what if I took the money out of the stuff I already have and put it into more houses? So, I refinanced that one house. We didn\u2019t call it BRRRR, but I realized if I could add value to every house I bought, I could keep pulling money out and buying more. And that\u2019s healthy because it forces me to buy better houses and add value to houses as opposed to being tempted to buy that turnkey property that\u2019s already perfect and that adds value to it.<\/p>\n

Rob:
And it pays those premium, too, right?<\/p>\n

David:
Yep.<\/p>\n

Rob:
For everybody at home, can you just walk us through the idea of a BRRRR? What is the actual step-by-step process there? Because I know we talk about it a lot, but there are probably a lot of people that are like, \u201cI\u2019ve heard it. I\u2019m too scared to ask at this point because I don\u2019t want to be judged.\u201d<\/p>\n

David:
Yeah, it\u2019s an acronym, so the B is buy. My approach to BRRRR, which was the second book I wrote, is that you want to excel at five stages. It\u2019s the only book you\u2019ve ever read.<\/p>\n

Rob:
It\u2019s the only book you\u2019ve ever read.<\/p>\n

David:
No shit.<\/p>\n

Rob:
In real estate. I\u2019ve read other books. I also, I\u2019ve told you I\u2019m a big fan if you give a mouse a cookie.<\/p>\n

David:
There\u2019s five stages, so buy and I focus on buying right. How do I buy beneath market value? And how do I buy something that has a potential to add value to it? And how do I buy in an area that I think is going to appreciate more than average? Then you\u2019re going to rehab. How do I a master the rehab? How do I add as much value to the house as I can, increase the rent, increase the value, increase the square footage, increase the appraised value.
Then I\u2019m going to rent it out to somebody else. The n I\u2019m going to refinance it where I\u2019m going to pull the money out. And that\u2019s where you find out if you did a good job buying it right and adding value through the rehab.<\/p>\n

Rob:
The bank will refinance it to you because, even regardless of what your debt to income ratio is, they\u2019re applying the rent that you get from a lease, they\u2019re giving you like 75% of that value towards your DTI.<\/p>\n

David:
They\u2019re also looking at a new appraisal, so when you bought it probably\u2026 at the time these houses, I would buy them for around $60,000. So, I could pay cash for these or I could get a hard money loan. Then I would put around 30 grand into fixing it up, which went a lot further back then than today.<\/p>\n

Rob:
Sure, sure.<\/p>\n

David:
I\u2019ve got $90,000 in a property. But now, the appraisal that when I bought it for maybe it was worth 60 because that\u2019s what I paid. Now, that it\u2019s been fixed up, it\u2019s worth 120.<\/p>\n

Rob:
Then you take how much from that?<\/p>\n

David:
About 75%, which works out to be about the 90 that I was all in. So, you\u2019re not always going to be getting your exact 100% of your money out. Sometimes, you get a little bit more, in this case, that\u2019s about $84,000 as you saw. In some cases, you get a little bit less, but it\u2019s close to the amount of money that you\u2019re putting into the property, so it is 90.<\/p>\n

Rob:
Yeah, it was 90.<\/p>\n

David:
So, in that case, I\u2019m pulling about all the money I put in. Maybe you leave a couple of thousand in there, but man, you don\u2019t have to work much overtime to make a couple of a thousand. It is worth-<\/p>\n

Rob:
And it\u2019s a lot cheaper than just doing a down payment on a home, right?<\/p>\n

David:
And you get equity built in. I have $30,000 of equity in that property I\u2019ve added to my net worth. So, if I could do that three times a month, I\u2019m adding $90,000 to my net worth every month, but not needing to earn more capital to go dump into more real estate.<\/p>\n

Rob:
But how did you do that because you had three houses and then you got to your four-plex and you\u2019re scaling up. But your idea was, \u201cI want to work a lot and I\u2019m going to do three houses a year.\u201d But now, you\u2019re talking about three houses a month.<\/p>\n

David:
Yeah.<\/p>\n

Rob:
What was that jumping point? Because this, I imagine there wasn\u2019t a ton of education. I mean, obviously, it was possible to do this, but the BRRRR acronym did it particularly exist is what you said? Or like okay, so you were just like, \u201cOh, I understand this concept in the ether. I\u2019m just going to keep doing it.\u201d<\/p>\n

David:
Yes. I just, I saw the pattern in how the thing worked, and I looked at how do I apply this pattern more efficiently without asking someone to teach me exactly what to do step-by-step. So, when I realized, \u201cWell, I only have 30 grand in the bank and I\u2019m going to need 60 to buy the house cash and I\u2019m going to need 30 to put into it, I need more money. Well, if I wait two years, I can save that money up. But then how much money are you going to lose waiting two years?\u201d
So, what I did was I looked. I went to my Arizona portfolio and I found my house where the rent had increased the least, but the value had increased the most. So, the ROE, the Return On Equity was the lowest on that property. I sold it. I probably made 40 grand in equity, plus I got my original down payment back out of it, which was 40 or 50. So now, I\u2019m looking at $80,000 or $90,000 in cash, plus the 30 I had saved up. And I\u2019m capitalized to where now I can go buy a house cash for 60. Use my own cash to fix it up for 30, get to 90. I get the appraisal. The bank that\u2019s going to give me the line of credit gives me 75% of that 120. so I pull out the 90 I put in. I have that 90 against my million dollar line of credit that they\u2019re going to let me borrow the money, so I\u2019ve used up $90,000 out of the million and I can go buy the next house.
And then, so I had enough money that I could do that on maybe two houses at a time, but I kept working, I kept saving. And then I put some HELOCs on some of the other houses I had, so now, I\u2019ve got capital like little bits from everywhere, some money from HELOCs, some money from savings, some money from more work, some money from rents that are coming in, some money from the refinances on my previous ones. And all of that created this really big snowball that got me up to three to five houses a month that I could buy, fix up, and then rehab, pull the money out and buy more.<\/p>\n

Rob:
Wow. So, in your story, you just needed to figure out how to fund the first one or two?<\/p>\n

David:
That\u2019s the snowball. You get it pulling. And then each house progressively pays for the next one for you.<\/p>\n

Rob:
Man.<\/p>\n

David:
You can screw it up by buying a bad deal and losing money or losing equity and that shrinks your snowball. But as long as that doesn\u2019t happen, it grows on its own as it rolls.<\/p>\n

Rob:
Did you have any of those screw ups in that time?<\/p>\n

David:
I had a handful that appraised for less than I thought, but they were balanced out by ones that appraised for more than I thought. I didn\u2019t have any big, big misses.<\/p>\n

Rob:
But you still did it really and money was just tied up in the house. Over time, it appreciates. And did that end up canceling out any bad appraisals you got?<\/p>\n

David:
Well, I think that the good appraisals canceled out the bad appraisals. I think that the appreciation ended up giving me more money if I wanted to pull out from equity to buy new houses or more houses. The problem was that line of credit went from $1 million to $500,000. The bank changed their mind. They just got nervous about thinking the market was too high. This is funny, in like 2016. They were like, \u201cIt\u2019s getting too frothy in there.\u201d<\/p>\n

Rob:
It\u2019s getting started. Yeah.<\/p>\n

David:
Yeah. So they said, \u201cWe can only let you borrow $500,000.\u201d So, I hit a limit of how much I could refinance on this, out of this bank. So, then I would have to take that loan. I would go refinance that with a blanket mortgage of a commercial lender. That eases up my $500,000 limit. Now, I can start my process again and fill up another $500,000 on the bank\u2019s line of credit.<\/p>\n

Rob:
What\u2019s the most amount of houses that you flipped in a month, you think?<\/p>\n

David:
I rehabbed and pulled money at a five and I probably did that four or five times.<\/p>\n

Rob:
Dang, while you were working a full-time job?<\/p>\n

David:
Yeah.<\/p>\n

Rob:
Were you ever like, \u201cHey, I got to go. I got a random tip in this neighborhood, I\u2019m going to go check it out. Lots of crime going around.\u201d And then you would just go check out of flip or anything?<\/p>\n

David:
Well, no, because they were all out of state.<\/p>\n

Rob:
[inaudible 00:53:20]. Yeah. Okay.<\/p>\n

David:
Yeah. But that\u2019s where the systems that I put together came from. I realized if the information is presented to me in the right way. It does not take long to look at it, especially if you know have a crystal clear criteria. If you know what you\u2019re looking for, I could just train the agents. I could get a text that would say, \u201c123 Main Street, ARV 120, rehab $40,000. Neighborhood B+ location, and then we can write an offer 80.\u201d And I could look at that and say, \u201c80 plus 45 is 125. ARV is 120. Why\u2019d you even send me that?\u201d
That I\u2019d literally send a thumbs down emoji. I wouldn\u2019t even say anything. And then at the end of the week when I wasn\u2019t working, I would talk to the agent and be like, \u201cWhy are you doing that?\u201d \u201cWell, I got so excited. It\u2019s in a great neighborhood.\u201d \u201cI don\u2019t care. The neighborhood\u2019s one criteria. It has to have these other ones. Stop sending me something like that or I\u2019m not going to reply.\u201d
Then she started to figure out, \u201cAll right, he\u2019s looking for this number and this number equal this number, and if I get close to it, he\u2019ll write the offer.\u201d Or I might reply back either a thumbs up or a thumbs down or I might say when she had said 80, I\u2019d say, \u201cOffer at 55.\u201d<\/p>\n

Rob:
Did she have to provide the rehab budget as well? Because that\u2019s like a big responsibility.<\/p>\n

David:
She would spitball. I would write the offer and it would be accepted or not accepted. She\u2019d negotiate it and once, it was accepted, I would then send the property to the contractor and say, \u201cGo walk it. Tell me if you think it\u2019s going to be within this range.\u201d So, I would not take their word for it, but-<\/p>\n

Rob:
It\u2019s a starting point.<\/p>\n

David:
That\u2019s exactly right. Too many people try to analyze an entire deal before they ever had an offer and there\u2019s no reason to do that.<\/p>\n

Rob:
Really? So, you feel like just spitballing is fine on the rehab and then you\u2019re in escrow, then you send your contractor [inaudible 00:55:05]?<\/p>\n

David:
Yes, that\u2019s where you verify. You do the same thing with property manager on the rents. You do the same thing with the contractor with the rehab. You send a home inspector to the house and I would try to time it, so the home inspector and the contractor were there at the same time, so that they could be talking to each other. The contractor could point things out to the home inspector. The home inspector could point things out to the contractor.
And they could come back and be like, \u201cHey, what you asked for is going to be this much, but you\u2019re also going to have to do this.\u201d And then I can take all that information and go back to my agent and say, \u201cReduce the price by whatever to make it work based off of these numbers.\u201d<\/p>\n

Rob:
That\u2019s smart. I do that in short-term rentals, too, where I analyze a deal, but I\u2019m not going to spend like 15 hours analyzing it. Because there\u2019s a high likelihood that I\u2019m not going to get that offer accepted. We know that, especially in the past few years. So, it loosely pencils out.
I put the offer in, they accept it, then I\u2019m really running the cod. I\u2019m doing all these analytics. I\u2019m really making sure that it all pencils out. We do the inspections. We get our repair requests and everything like that, and then we close on the property. A lot of people are so scared to even get into escrow because they feel like they don\u2019t want to spend 15 hours or 15 days [inaudible 00:56:10].<\/p>\n

David:
They think asking the person on a date is committing to marriage.<\/p>\n

Rob:
Yeah, you can walk. There are so many opportunities to walk away from.<\/p>\n

David:
100%.<\/p>\n

Rob:
We\u2019re not saying, \u201cDo it.\u201d Don\u2019t be dumb about it.<\/p>\n

David:
Don\u2019t date people that you know you\u2019re not going to marry. But if you\u2019re not sure, go on the date to get to know them, That\u2019s how real estate works,<\/p>\n

Rob:
Man, okay. I feel like this could be a five-part series. This is crazy. Have you ever talked about all of this on the pod before?<\/p>\n

David:
No, not with someone as skilled and naturally talented interviewer as you.<\/p>\n

Rob:
This was great.<\/p>\n

David:
This is Barbara Walters.<\/p>\n

Rob:
Honestly, I didn\u2019t know any of this. I knew like\u2026 no, I don\u2019t think I knew any of this. This is all very surprising.<\/p>\n

David:
Really cool. Did you know I spoke Spanish before we came to Mexico?<\/p>\n

Rob:
No, [foreign language 00:56:48].<\/p>\n

David:
[foreign language 00:56:58].<\/p>\n

Rob:
[foreign language 00:57:10].<\/p>\n

David:
Rob was saying that I sound like a Russian trying to speak Spanish.<\/p>\n

Rob:
You do. You have a bit of a\u2026 this is not my board accent. Just a little Ironman 2 reference.<\/p>\n

David:
[foreign language 00:57:25].<\/p>\n

Rob:
That\u2019s good. It\u2019s really hard to mat accent some\u2026<\/p>\n

David:
Put two together?<\/p>\n

Rob:
\u2026 different languages. I\u2019ve tried it. That doesn\u2019t ever work out. But this is really cool because I think a lot of people see, they see how successful you\u2019ve been, how successful you are. You\u2019re the host of the Real Estate podcast here at BiggerPockets, so we assume that you\u2019ve been that way forever. But really, your origin story here is very much what a lot of people probably experienced. Like, \u201cHey, I bought this. I was scared. I did this. I messed up. I scaled up here. I was jumping into this because I didn\u2019t know any better.\u201d<\/p>\n

David:
100%.<\/p>\n

Rob:
And then here you are, you\u2019re a pro, because all the things that went wrong is what made you an expert. Not all the things that went right.<\/p>\n

David:
And I would add, my success did not come just from focusing on investing in real estate. That was a piece that came later in the puzzle. It is just as important that you pursue excellence at the job you have, that you discipline yourself to live between your means. That you respect yourself, your time and your money when you\u2019re getting into something. And then once you\u2019ve made money and saved money, that you really learn how to invest it wisely so you don\u2019t lose it.
I think people skip to the very end where they want the big home run win of getting the great investment property and they haven\u2019t really built the foundation of saving up money or working a job and pushing to try to make more money. You had so many experiences that I\u2019ve talked to you. Writing copy for other people. Dealing with a boss that you didn\u2019t like, so that you could learn how marketing worked. And now, as a person who runs the program, you do writing copy, understanding sales funnels and marketing. It\u2019s a huge component to being successful.
Even with your real estate, you don\u2019t use real estate as a way to avoid doing the hard work. You use the hard work you\u2019ve built through real estate and you can\u2019t separate them. There\u2019s too many gurus in the space that are not honest with the people that are listening saying, \u201cYou don\u2019t have to know anything about life, money, resources, wisdom, delayed gratification. You can just skip it all and just take this pill of real estate and make a bunch of money.\u201d And people will get their hearts broken when they find out it doesn\u2019t work that way.<\/p>\n

Rob:
Definitely. I think it\u2019s so great. I love putting all the bad stuff out there. All my YouTube videos are effectively me crying about how my short-term rental business is always popping up with\u2026 well, you\u2019ll hear about this more in our Scottsdale episode that will never air, but-<\/p>\n

David:
This is when I forgot to hit record, obviously and just talked.<\/p>\n

Rob:
That\u2019s right. But I love putting it out there because I want people to be prepared. But I also think that the message here is that you figure it out. If you\u2019re willing to figure it out, you will figure it out. And some people just aren\u2019t, and then they get out of real estate. It\u2019s like-<\/p>\n

David:
But they get out of everything. Those are people that just bounce from thing to thing to thing. They end up falling for multi-level marketing. They end up falling for scams. They end up ripping off the people in their lives because they\u2019re vulnerable, because they\u2019re looking for a way to make money that isn\u2019t hard.<\/p>\n

Rob:
Yeah, yeah. You got to stick with it, man. Anything requires time, you are going to suck at something. Everything that you start, you\u2019re going to suck, and then one day, you\u2019re going to be like, \u201cI\u2019m okay at this.\u201d And then one day you\u2019re going to be like, \u201cI\u2019m pretty good at this.\u201d And then one day, you\u2019re going to be so good that everyone is like, \u201cWhoa, how are you so good at this?\u201d And you\u2019re like, \u201cBecause I sucked for 10 years.\u201d<\/p>\n

David:
That\u2019s it. And it\u2019s disingenuous to portray yourself on social media or anywhere else as, \u201cIt\u2019s easy, just do this. Just do these four steps and you, too, could have all of this amazing stuff that I have.\u201d<\/p>\n

Rob:
I always say this, I think real estate is not hard, but it is hard work.<\/p>\n

David:
Yeah, that\u2019s a good to put it.<\/p>\n

Rob:
Conceptually, we understand the concepts here. Rehab a house, it appraises. You take the money out. That part isn\u2019t hard, but what\u2019s hard is actually doing it, the hard work. You have to actually put a lot of time and effort into it. So, before we end, I thought we could do our famous four. I don\u2019t remember the questions. They\u2019re not in front of me, but I got some good ones.<\/p>\n

David:
All right.<\/p>\n

Rob:
All right.<\/p>\n

Speaker 3:
Famous four.<\/p>\n

Rob:
This is the part of the episode where we ask our investors things about themselves. And question number one, favorite movie that\u2019s not Interstellar?<\/p>\n

David:
Favorite movie that\u2019s not Interstellar, I would say is a\u2026 I can\u2019t pick one, but I\u2019d throw in the Batman Trilogy, the Matrix Trilogy, Inception or Gladiator.<\/p>\n

Rob:
Fantastic. Question number two, favorite brand of shoes.<\/p>\n

David:
Puma.<\/p>\n

Rob:
All right. Question number three, what is your skincare routine?<\/p>\n

David:
I don\u2019t have a skincare routine. Tony Robinson has been telling me over and over and over that I would be much more successful in life if I would actually get one down. My whole body is basically the consistency of the weanest on the back of your elbow. And it\u2019s something that probably does need to change now that I\u2019m in the spotlight more, but I\u2019ve yet to-<\/p>\n

Rob:
I have not heard that terms of Friends Season 5. Last question here, where can people learn more about you if they want to follow you on the socials?<\/p>\n

David:
Yeah, they should look up David Green 24 on whatever their favorite social media is. And you should check out the website, I have it. It talks a lot about the different things that I\u2019ll be doing, where I\u2019ll be speaking, what events I\u2019ll be having, where you can join a webinar. I do YouTube live every Friday night where we bring people in. Sometimes, we have guests. Sometimes, we just take questions directly from people.
The book that I\u2019m writing for BiggerPockets, you can\u2019t buy it yet because it\u2019s being written, but it\u2019s going to be called Pillars or something like that. I really think that will change people\u2019s lives. It details a lot of the stuff we talked about today, like my story and the stuff I learned at all these different phases of my life. We mostly talked about investing, but there\u2019s whole phases of what I learned working in restaurants or working as a cop or when I went through trying my best at basketball and failing. And not having my career work out that applied to different areas of life.
And my philosophy is that building wealth is a three pillar system. There\u2019s offense, there\u2019s defense, and there investing. If you cannot save money, it doesn\u2019t matter how much money you make, you\u2019ll never be wealthy. You\u2019ll just lose it. If you\u2019re very good at saving money, but you cannot make money, you will be grinding your entire life and never being satisfied.
If you\u2019re one of those people that\u2019s like, \u201cI live off of $12,000 a year, but I make my own soap and I wear the same socks every day and I wash them by hand,\u201d you\u2019re not getting the most out of yourself. And then if you\u2019re good at making money, you\u2019re good at saving money, you\u2019ll die with the big savings account, but never have passive income, never have exponential growth, you have to build to invest the money.
And I\u2019m passionate about encouraging people to deal with the hard things in their life that stop them from in saving money or stop them from making more money. You got to be good at all of it. And when you are real estate investing, it becomes much more natural.<\/p>\n

Rob:
Well, I\u2019m excited to read my second book. I\u2019ve got it slated. I got it slated for-<\/p>\n

David:
It\u2019d be dedicated to you.<\/p>\n

Rob:
Well, you can find me at Robuilt on YouTube, Robuilt on Instagram. And I\u2019m throwing my first ever convention Host Con in Houston, Texas, January 8th through 10th. If you want to learn more about that, go to hostcon.com. I\u2019m excited. I\u2019m putting everything I have into this and it\u2019s going to be pretty epic. So, find me on YouTube on Instagram and I\u2019ll be talking about that.<\/p>\n

David:
Maybe I\u2019ll do one of those. I\u2019ll call it the Greene Screen or something.<\/p>\n

Rob:
That\u2019s screen is Greene. I don\u2019t know. I don\u2019t know.<\/p>\n

David:
We\u2019ll have to think.<\/p>\n

Rob:
Yeah, we\u2019ll think about it. The Greene, man, I don\u2019t know why are you\u2019re doing this to me right now? You know I like to riff on this stuff. All right. Please, do it. Invite me.<\/p>\n

David:
Yeah.<\/p>\n

Rob:
I\u2019ll get to your head.<\/p>\n

David:
Yeah. And you can speak to mine and-<\/p>\n

Rob:
Fantastic.<\/p>\n

David:
You did such a good job interviewing me today. I have to, now.<\/p>\n

Rob:
Awesome. Now, I want to do more of these. We need to fly out once a month to do these in-person ones, but okay. Well with that\u2026 oh, don\u2019t forget to leave a five-star review and leave us a comment on YouTube. If you like this type of style interview where it\u2019s just us bro-ing out, chatting about our real estate journeys and trying to teach us something and make it relatable and approachable, then let us know in the comments down below, in a five-star review on Apple Podcasts.<\/p>\n

David:
Yeah. We\u2019ll wrap this up. Thank you very much. You did a great job. This is David Greene for Rob, Barbara Walters, epi solo, signing off.<\/p>\n

\u00a0<\/p>\n<\/div>\n

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