\n
Ashley:
This is Real Estate Rookie episode 262.<\/p>\n
David:
There\u2019s two parts to a system. I talk about this in Scale. Everybody understands the first part, which is you need to create a checklist of things that need to get done or a library of videos that show somebody how to do it. That is the first step in creating a system. The error becomes when we think that\u2019s all a system is, because the second part of a system is having a human being that is skilled and capable at doing those things. We have all had a position where we hired someone to do something and it was super clear what they needed to do and they still screwed it up.<\/p>\n
Ashley:
My name is Ashley Kehr and I\u2019m here with my co-host, Tony Robinson.<\/p>\n
Tony:
And welcome to the Real Estate Rookie Podcast, where every week, twice a week, we\u2019ll bring you the inspiration, motivation, and stories you need to hear. Today, I want to shout out someone by the username of Maryelle PC who left a five-star review on Apple Podcasts that says, \u201cSpeaking honestly, I discovered this podcast after first listening to the OG Bigger Pockets Podcast. I ran out of content and wanted more. This podcast, the Ricky Show, is now my favorite podcast. It\u2019s so relatable to someone who is still early in their real estate investing journey and provides so much useful and concrete advice. Tony and Ashley are phenomenal hosts and I would highly recommend this podcast to anyone looking to further their real estate investing career.\u201d
Maryelle, we appreciate you. That it\u2019s such a great and nice and positive review. If you\u2019re in the Rookie audience and you haven\u2019t yet left us a review, take the two minutes, leave that review. We would appreciate it.
Ashley Kehr, we have a heck of an episode for everyone today, right? Some really cool things we\u2019re going to be getting into.<\/p>\n
Ashley:
Yeah, and I wish our guests would\u2019ve been on today when you read that review for the intro that we\u2019re recording here.<\/p>\n
Tony:
Yeah, that\u2019s true.<\/p>\n
Ashley:
Today, we have David Greene on, and it is amazing how fast he can analyze a deal if you guys don\u2019t know that about him. He wrote a book called Scale and he\u2019s going to talk about scaling your business, and we\u2019re going to focus mostly on how you can quickly analyze a deal to grow your business and things you should be implementing into your systems. It\u2019s definitely a book for any business type, I would say. It\u2019s not even just real estate agent specific or even investor specific, so really looking forward to that. But we actually get to see David in Denver in a couple of weeks.<\/p>\n
Tony:
Yeah. We\u2019re doing a little host get together for all the Bigger Pockets podcasts. That\u2019ll be fun. But Ash, me and you just got to hang out in Orlando for a few days as well, so I appreciate you coming out to the summit.<\/p>\n
Ashley:
Yeah. We just did Tony\u2019s short-term rental summit. It\u2019s my second one I\u2019ve gone to, and both have been awesome and such a great learning experience. You know where I took the most notes down? It was Tony\u2019s wife, Sarah, when she did her presentation, afterwards, the Q&A, just the amazing questions people were asking and she was answering were just these little things that you just don\u2019t even think of that were just like aha moments to me. Like if you allow pets, have super strict expectations like no pets on the furniture. If there is dog hair found, you will be charged X amount. Also, provide a dog bed. Such an easy, cheap, inexpensive thing to do. I was just on my little no pet on my phone adding all these things in.<\/p>\n
Tony:
Yeah, it was super fun. We\u2019re always super excited to to get, we had almost 400 people at that event come down to Orlando with us. We\u2019re going to Austin in the spring, so it\u2019ll be fun to take this thing on the road and meet some more people and talk more short-term rentals. But me and Sarah both appreciate you coming out and being our biggest fan for a couple of days.<\/p>\n
Ashley:
Well, that\u2019s really nice of you to say, even though I brought the bad weather with me as usual. It wasn\u2019t super bright and hot and sunny the whole time.<\/p>\n
Tony:
Yeah, but at least flights didn\u2019t get canceled. We didn\u2019t get stuck. Luggage wasn\u2019t lost.<\/p>\n
Ashley:
Yeah. Yeah, yeah.
David Greene, welcome back to the show. I mean, is this your second, third, maybe even fourth time on the Real Estate Rookie Podcast?<\/p>\n
David:
It might be the fourth time. You guys are such a good host that I have such a good time. I\u2019m constantly bothering our production team saying, \u201cCan I come on the Rookie show please?\u201d It\u2019s a blast.<\/p>\n
Ashley:
Yeah. I mean, we\u2019ve been paid lots of money to continuously have you back on the show. It\u2019s been working out great for all of us.<\/p>\n
Tony:
It\u2019s a win-win situation. But I think you hold the record, David, for most Ricky appearances right now. So dude, kudos to you, man.<\/p>\n
David:
Well, that just goes to show that we never stop being rookies, right? No matter how many properties you buy, there\u2019s always something to learn. There\u2019s always things that go wrong. There\u2019s always ways you can improve.<\/p>\n
Tony:
Dude, so hold on. I know we have a totally different topic to talk about today, but I love what you just said, because it\u2019s like people look at me and they\u2019re like, \u201cOh my gosh, I want to be like Tony.\u201d And then I look at you and Brandon and I\u2019m like, \u201cOh man, I want to be like you guys.\u201d And you guys are looking at I don\u2019t know who else, Ken McElroy, and you guys want to be like him, and Ken\u2019s looking at someone else saying, \u201cI want to be like them.\u201d Even for the people that are listening to this podcast, just know that all the folks you look up to are looking up to someone else that they\u2019re trying to emulate. I love that concept, man. Thank you for sharing that.<\/p>\n
David:
That\u2019s a really good point. I heard there was some NBA players that were having fans trash talk them, like, \u201cYou\u2019re not as good as LeBron James, you suck.\u201d One of them made a really good point. They said, \u201cI am closer to LeBron James than you are to me.\u201d Okay? That\u2019s a very good point, right? Do you ever want a good video YouTube, the Brian Scalabrine challenge.<\/p>\n
Tony:
I saw that.<\/p>\n
David:
It\u2019s awesome, right? He\u2019s this scrub by NBA standards that everybody makes fun of and he picked the best players he could possibly find that thought they could beat him and wiped the floor with all of them. It just goes to show how good those guys are in the NBA. The people listening to this to own a house or two, or their house hacking, they\u2019re looking at you guys and they\u2019re like, \u201cOh, I wish I could be them.\u201d You\u2019re so much closer to Ashley, Tony, and me than you are to the people that don\u2019t even understand that real estate matters, that finances matter, that you should be saving your money and you should have a budget and you should have a plan. You\u2019re so much closer to where we are than the average American that\u2019s just naively walking through life hoping that they win the lottery. Don\u2019t be discouraged by where you\u2019re at right now. If you\u2019re just listening to this, you\u2019re already better off than most people.<\/p>\n
Ashley:
And you\u2019re an expert or experienced in that one thing that you\u2019re doing or maybe a couple things that you\u2019re doing. But David, if we said to you let\u2019s set up a glamping site in Buffalo, New York, would you be an expert in that?<\/p>\n
David:
Absolutely not. No. See?<\/p>\n
Ashley:
Yeah, exactly. Even looking up to somebody who you think is this awesome, amazing expert experience investor, there\u2019s things that you may know and you may know better than them than somebody else, because maybe you just have that one little camping, glamping, campground and you\u2019re way ahead of the three of us sitting here because we don\u2019t have anything like that. Think about that too, you guys, when you\u2019re comparing yourself to others that you may know more than you think that too.<\/p>\n
David:
Oh yeah. Before the show, the three of us were having a conversation about the industry in general that we\u2019re all a part of where we are sharing real estate education. The trend right now is to find a person who has a better plan than everyone else and copy their blueprint. There\u2019s tons of people selling courses and this is like, \u201cBe like this person, be like this person.\u201d They all have their own little branding and that\u2019s how they make money. The problem with that method is you might not have Tony\u2019s skillset or Ashley\u2019s skillset or name your favorite influencer\u2019s skillset. You might not have their resources. You might not have their personality to where they run a wholesaling business and they have a gift of gab and they can talk anyone. They could sell ice to an Eskimo and they\u2019re very good at that. Or you might not be intensely analytical at an incredible multifamily investor like someone else.
We see the stories of X amount of money over X amount of units that we think, \u201cI want to have what they have.\u201d I think you\u2019re way better off to say, \u201cI want to be who they are.\u201d Who\u2019s the person that I can identify with that my skillset, my personality, my goals, my principles aligns with them and then maybe make that be the main place where you get your food from. It\u2019s so hard to know who\u2019s the right person to follow because there\u2019s so many ways to make money in this, but you\u2019re not going to be equally successful at all of them. You could be great at glamping, but you could be terrible at flipping or different ways. And if you pick up a method that is not in line with your strengths and what feels light to you, you\u2019ll hate every day of real estate investing just like you hated every day of the W2 job that you tried to get out of it. There actually is a little more thought that needs to go into making sure you pick the right path.<\/p>\n
Ashley:
David, that\u2019s a great point and it kind of leads us into our discussion as to why you\u2019re on here because you wrote a book sharing your experience with others. Can you tell us a little bit about that book and your reasoning why you think people should learn from it?<\/p>\n
David:
Yeah, thank you. When I left my W2 job, which was being a police officer, I jumped into being a real estate agent, which is a wildly different environment. The things that make you good at a cop do not make you good at selling houses. I had to learn completely different. It would be like someone who was a long distance marathon runner wanting to go work out with Tony and they want to be a bodybuilder. If you\u2019re good at one, you\u2019re not going to necessarily be good at the other. It was a very challenging journey for me that ended up leaving me a more well-rounded person. I do think that was the divine plan that I was supposed to take. But it was motivated by recognizing agents just weren\u2019t good. I kept as an investor finding agents, working with them, and realizing I know more about real estate than they do. This is really frustrating. I\u2019m listening to more podcasts, I\u2019m reading more books, I\u2019m having more conversations. I\u2019m paying more attention to how this world works than my agent does who\u2019s supposed to be my guide.
When I started to work as a real estate agent, I just had a different approach than what everyone else did and I had this fire to learn how to be good at being an agent. So I signed up for every piece of Keller Williams training I could. I talked to all the top producers that were in GoBundance, all the ones in my office. If they were good at selling houses, I wanted to analyze them, dissect them, and figure out why they were good at it, and then slowly I started applying that to me. Now, in that process, I realized I don\u2019t have the personality and the makeup we were just describing to be great at selling homes.
I don\u2019t like having conversations all day long. I\u2019m way more introverted. I\u2019m way more analytical. I like to figure out what makes it work, but I don\u2019t like the execution. I don\u2019t like having to talk to you for two hours and make you feel good about the process. Whereas the top producers, that was the pattern I saw. They loved humans, they loved talking to people, they loved making someone\u2019s day. They were high eye on the disc profile and mine was very low. So instead of focusing on just becoming the best agent, I sort of shifted and focused on training agents to be the best agents and growing a team, which was way more down my line. It felt way more like investing. The principles were very similar. You work very hard to get an investment property, you add value to it, over time it starts performing better.
You eliminate problems that could go wrong. I never talked to a tenant. I don\u2019t want to have to be the person to talk to a tenant. That\u2019s a property manager. That\u2019s the first thing I wanted to leverage. Well, that started to work with real estate as I created systems to help agents figure out what they should do and how to do it, provided them with tools, provided them with training, provided them with knowledge, they were much better at talking to the clients and walking them through the process, and so I built a real estate team. At the end of that journey I looked back and I said, \u201cOkay, how do I share all this information that I\u2019ve figured out over the last six or seven years with every other agent that\u2019s out there in the Bigger Pockets ecosystem?\u201d Because they need that help too. The people that were teaching how to buy homes, they need better agents.
I worked out a book deal with Bigger Pockets where I wrote three books in the top producer series. The first is called Sold, and that just focuses on the first steps for an agent: what you do to just make money at all, how you just sell a house, the basics that your broker should be teaching you and they\u2019re probably not. Then the second book in the series was called Skill. That was about becoming a top producer, the best agent in your market, the one everybody wants to work with, the one makes a very good living and makes a lot of money so that they can then reinvest that into hopefully real estate.
This third book that\u2019s coming out is called Scale. This book is about taking, once you are a top producer and you\u2019re making a lot of money, you want to turn your job into a business so you\u2019re free to do other things or you can scale it at a really big degree. This book is full of principles that any business person can use to move from, \u201cI have a job,\u201d to, \u201cI run a business.\u201d It works for being a real estate agent. It works for being a short-term rental operator that doesn\u2019t want to be the one doing all the work. It works if you own a pool company and you\u2019re cleaning the pools and you want to get to where you\u2019re scaling this business to where you\u2019re getting pool contracts all across the city. The principles are the same.<\/p>\n
Tony:
David, I love the distinction between having a job and running a business, and obviously so much of our audience are people who are at the beginning of their journey. When do you think, at what point in their real estate investing life cycle should someone think about the fact that they\u2019re actually building a business? Let me give you some context. I think so often people make decisions when they\u2019re starting off their investing career with the idea of, \u201cOh, I\u2019m a real estate investor and I have one or two houses,\u201d and not, \u201cI\u2019m a real estate entrepreneur who owns a business.\u201d What\u2019s your advice to folks who are just getting started about having that mindset of they\u2019re actually running a business from day one?<\/p>\n
David:
That is such a great, great point, because they are, but you don\u2019t realize it. I think let me start with what I think screws people up. Most of us don\u2019t make decisions where we sit down and we really think about what we want our life to look like and then we start building that out. That would be the ideal way to do it. But I\u2019ll be the first one to say, when I first joined GoBundance and they were like, \u201cWell, what are your goals?\u201d It\u2019s like, \u201cTo not be where I am right now.\u201d \u201cWhat does that mean?\u201d \u201cI want to get more than three hours of sleep a night.\u201d \u201cHow are you going to get there?\u201d \u201cI don\u2019t know, but that\u2019s what I want.\u201d Right? We don\u2019t really understand how to get out of the place we\u2019re at, but that is a better path. If you know what you want your life to look like, you can start buying the right property, setting it up the right way, taking the steps that you need to get where you want to go.
Just like you, Tony, you\u2019re doing body building. You know what the body looks like that\u2019s going to win the competition. You don\u2019t just go in the gym and grab stuff and work out and hope that you look better. There is a purpose to what you\u2019re doing, how you\u2019re doing it, and the way you\u2019re going about it. And then you make little pivots along the way. If this body part isn\u2019t coming along or this one\u2019s coming along too much and you have to balance that out, you tweak it, right? That\u2019s the right way to go about being good at something. But what most of us do is we say, \u201cI\u2019m in pain. I don\u2019t like my job, I don\u2019t like my commute, I don\u2019t like being broke. I don\u2019t like something about my life. That would be better than where I am now, so let me just go do that.\u201d
Then we go do it and it is better. But then that situation has its own pains. We say, \u201cokay, I don\u2019t like this. What can I do differently?\u201d We end up schizophrenically bouncing around from thing to thing to thing. We call it the shiny object syndrome. We call it building too many bridges. We have all these different ways we describe what\u2019s happening. But it\u2019s basically just human beings moving from pain point to pain point in their life hoping that they where they end up. It\u2019s being addicted to hopium. You\u2019re just hoping if this goes better, that I\u2019ll finally be happy. And it rarely is. What you\u2019re talking about is coming up with a plan to own a business that you choose what role you will play in that business. If you want to do sales, if you want to do operations, if you want to do legal stuff, if you want to just talk about it, if you want to market it, whatever it is, you get to have that option.
When you are an investor, you do own a business. Having a house affords you the opportunity to be the property manager, the construction person. You can be your own agent. You can do all the work yourself or you can leverage that out to different people in the team. What I want to highlight is the human beings that think that they want to get six houses, you probably don\u2019t want six houses. What you want is to get out of where you are right now. Then you can own six houses and decide you don\u2019t like that either and you want to get out of that. Understanding the principles that are in this book Scale will put you in a position that when you decide I don\u2019t like where I\u2019m at, it\u2019s very easy to remove yourself and put somebody else in that place and focus on the thing you do like, not scrap the whole project that you were working on and start a new one from scratch.<\/p>\n
Tony:
Yeah. David, so many good nuggets in what you just shared. You talk about the hopium, I\u2019ve never heard it phrased that way before, but I love that saying. Dude, it reminds me so much of me when I was in my early twenties. You know guys know Blue Host is kind of like GoDaddy, the domain hosting website. If you logged into my GoDaddy account between the age of 19 and 27, there\u2019s like 40 different domains there that I purchased because every couple of months I had this next crazy business idea. I found myself not finding success and the reason was I wasn\u2019t really focused on one thing. And when I started in real estate investing, I really told myself not only do I want to be a real estate investor, but I want to be a real estate investor that focuses on just this one asset class.
When I really made that decision to get world-class in this one thing, that\u2019s when the success started to really follow. So if there\u2019s advice for our rookie listeners, it is that even at the beginning of your journey, the more clarity you can have around the thing you once get good at, the easier it then becomes to get really good at that thing. The other thing you said was just about having those goals up front. I think if we can take the time to think five, 10 years down the road and say, \u201cWhat do I want my business to look like?\u201d It helps us make better decisions today that support those goals. But if you\u2019re just going with the flow, you can end up in any kind of situation because you don\u2019t have that clarity around what it is you\u2019re working towards.<\/p>\n
David:
Yeah, that\u2019s exactly right. I only starting the interview off by pointing this out because it\u2019s sort of like the vegetables nobody wants to eat. There\u2019s someone else\u2019s voice that\u2019s going to say, \u201cIf you just take my course, if you just use my program, all your problems will be solved.\u201d People throw themselves into it, they spend their money, they invest into it, and then in the middle of it, at some point they realize, \u201cOh, this is not any different than the situation I was in. What\u2019s the next thing?\u201d
There isn\u2019t a next thing. The principles of scaling a business are the same across any enterprise that you want to take. If you could focus on that, you get good at those, you pursue excellence in what you\u2019re doing, what you said, Tony, is exactly what will happen. You will pick your thing, you\u2019ll become excellent at it, you\u2019ll play the role in that business that works for your personality, and then you\u2019ll have doors open all over if you want to go bring a new thing into it or start a second or just double or triple or quadruple down on that thing and blow it up to have a whole bunch of them.
Whatever it is that you want to do in life can happen when you build a business, not just chase the job.<\/p>\n
Ashley:
David, I think it\u2019s pretty obvious from our conversation so far is that this book, even though it\u2019s somewhat tailored to real estate agents, that it is business in general. This book will help anybody who is trying to grow and scale any business. The first question I have that comes up when growing and scaling, especially as a real estate agent or even as an investor is, okay, I\u2019ve been buying in Buffalo, New York, now I\u2019m going to take my business model and I want to grow and scale to another market. Can you talk about some of the things that you need to be aware of, you need to research, and kind of do that education before actually building out a business in a whole new other market?<\/p>\n
David:
Yeah, That\u2019s a great point. The typical newbie will say, \u201cWhat\u2019s the hot market? Where should I invest. Buffalo? Okay, I\u2019ll go to Buffalo.\u201d They invest in Buffalo because other people are, and maybe they got it right and that market grows, and they make money, and now they go bragged all their friends at their net worth increased, right? It\u2019s that same vibe you got from NFT or crypto investors. They became millionaires overnight and all of a sudden they\u2019re an expert and then they lose it just as fast. It\u2019s better to know why Buffalo worked. What were the fundamentals that happened that caused Buffalo to do so well and what steps did you take that worked and what made them work? As opposed to monkey see monkey do, I just copy what I saw someone else doing.
When you\u2019re wanting move to a new market, you want to have a good understanding of just basically macroeconomics. What is the country doing? Is our money supply going up or down? Is real estate desirable? Is it not desirable? Is there an area where tenants are moving to in greater droves than others or businesses are moving to where wages are going up? And how does supply and demand work? This sounds really boring. But almost every question I get about what can I expect the market to do, if you understand supply and demand, it becomes very easy to anticipate. Okay, so when this hypothetical Buffalo did well, odds are there was a constriction in supply and an increase in demand that led to some form of result of rents going up and values going up, and that\u2019s why it went well.<\/p>\n
Ashley:
David, where can somebody find this information, so get these statistics, find this data?<\/p>\n
David:
The easy answers are the US Bureau of Labor and Statistics that tracks where people move to. Okay? I believe you could also see where wages are increasing in those areas. But to be transparent, I don\u2019t usually use that. I look at the people who like to read that stuff, the nerds that are tracking that, that then they publish those findings. Bigger Pockets, like Dave Meyer, right? When we do State of the Market, we\u2019re talking about what we see happening with the data that are showing where people move to. If you were following COVID, you saw a lot of people left California and a lot of people left New York during that time. It was all over the news. You didn\u2019t have to have a specific place to go look. It was pretty clear. Californians moved to Idaho, Nevada, Arizona, kind of the states that are close to us, Oregon. And then New Yorkers moved to Florida. A lot of Wall Street moved into South Florida. It\u2019s not a coincidence that real estate values in South Florida exploded at the same time that money was leaving New York and going into Florida.
If you understand the principles of real estate, you can see, well, at a certain point South Florida would be too expensive for people to move to and what are they going to do? They\u2019re going to say, \u201cWell, what\u2019s close to South Florida that\u2019s cheaper?\u201d That\u2019s going to be the emerging market where the people are moving into. These principles, they\u2019re not rocket science. You don\u2019t have to outsmart everyone else. You just have to have a commitment to understanding what drives real estate values and rents increasing.
Once you understand the basics of analyzing a property, knowing if it cash flows, that\u2019s kind of the first step everyone gets. The next step is understanding, well, what would make cash flow go up? What would make values go up? How do I find an area that is more likely to be desirable in the future than what it is right now? And just listening to the news, just watching bankrate.com, you can see about where interest rates are tending to be going. It doesn\u2019t have to be something that people are religiously studying all the time. Just paying attention in general and understanding these principles will give you a huge edge when you\u2019re trying to pick your market and then decide which properties to buy in that market.<\/p>\n
Ashley:
Yeah, for any rookie listeners right now that haven\u2019t checked out any of this data, even just pick a random city and go to the places that David recommended, and just get familiar with these websites. I was listening to On the Market podcast today with Dave Meyer, who David recommended to check out. He released this report on Bigger Pockets. If you go to biggerpockets.com\/report, he just put together a 2023 almost market outlook. It\u2019s giving you data on different cities. What he is forecasting, you\u2019ll kind of see within the next year. I think it\u2019s free to pro members, it might be free to everyone, but you can go to biggerpockets.com\/report. He\u2019s put it out before and there is tremendous value, so I highly recommend you guys check that out and the other websites, too, that David mentioned and just get familiar with those things.
David, what about becoming efficient with growing and scaling? Now that you\u2019re going to different markets, how are you making sure that you\u2019re doing this the best way that you can and you\u2019re not just wasting your time and building from scratch again?<\/p>\n
David:
The mistake most new investors make is they make up for knowledge and skill with sheer volume. They\u2019ll say, \u201cAll right, I\u2019m going to analyze a hundred deals and I\u2019m going to find the one deal, the needle in the haystack, that works.\u201d They go on Zillow and they just start randomly looking at houses that are pretty and analyzing them, and then they get discouraged. \u201cNothing works. Man, I can\u2019t find anything that cash flows. It\u2019s not going to give me my number that I\u2019ve been told to get, that 10% return.\u201d Whereas if you showed me that same Zillow profile, I wouldn\u2019t even bother analyzing, and I could tell you right away, that is not going to work. Single family homes that are in that good of condition at that price point are nothing close to the 1% rule. You don\u2019t even need to bother analyzing it.
Now, I think the key is if you take it the next step further and you say, \u201cWhat would have to change in order for it to cash flow?\u201d Well, the rents are 2,500 a month. The property\u2019s 500,000. It\u2019s about a half a percent. You\u2019d almost have to have two units in the same house for the same price. Well, if you had one unit that rented for 2,500 and one unit that rented for 2100, you\u2019re now close enough to the 1% rule that it could work. So if you can find in that same area for around 500,000, a property with two units that are close to the rent amounts that I just said, it is now worthy of digging into and analyzing. Okay? That one tiny bit of information could literally save someone five to six hours of time bouncing around, analyzing every single single family home, hoping that they find one that just miraculously cash flows.
Rather than the person who understands, \u201cI need to bump the rent up. No one\u2019s paying more than 2,500 to live in this city, so I need to get two units or I need to get three units.\u201d And then you start looking at the property and saying, \u201cWell, could I convert the garage? I only want to look at properties that have ADUs. Do they have basements that are already converted that I could add a bathroom to and then rent out?\u201d Just a little bit of elbow grease. Can you just use a little bit of creativity to find something that would work in that market? Because you understand what makes properties cash flow. That alone makes those investors way more efficient when they\u2019re deciding which properties they should be pursuing and looking into versus the one who doesn\u2019t know why the number at the end, the cash on cash return, ended up good or bad.<\/p>\n
Tony:
David, I want to get your opinion because the market has shifted. Right? What we saw the last couple of years, it was very much a seller\u2019s market where multiple offers, over asking, no contingencies, and what we\u2019re seeing now is more a return to normalcy where it\u2019s kind of a buyer\u2019s market, right? Buyers have a little bit more leverage right now. I\u2019ve shared this on the podcast before, but there\u2019s a property that we just got under contract and actually pulled it up while you were chatting. Seven months ago, that property was listed for $500,000. They subtly dropped the price over the next couple of months. When I initially put in my offer, it was about four months ago, they had listed it at 410. I offered 312 on that house. They rejected my offer flat out. They came back a few months later after a 50K price drop and said, \u201cHey, we dropped the price 50 K, do you want it now?\u201d
I said, \u201cNo, my price is 312.\u201d They came back later, \u201cWill you take 325?\u201d \u201cNo, my price is 512. They said, \u201cWill you take 315?\u201d I said, \u201cNo, my price is 312.\u201d We\u2019re under contract now at 312. There\u2019s obviously, I think like you said, an importance of knowing what kind of properties you should be looking for, but for our rookies that are listening, do you think that they should maybe ignore the purchase or the asking price right now and really just focus on, okay, what do I need to offer for this deal to make sense?<\/p>\n
David:
That\u2019s the first half, yes. You\u2019ve got to know the number of the deal makes sense for you. The error that people make once they have their number is they try to force the seller to accept that 12 is what they should sell for. You\u2019ll see them asking questions like, \u201cHow do I get the seller to agree to create a finance? How do I get the seller to agree to sell for this price? They have to understand their house isn\u2019t worth that.\u201d That\u2019s an exercise in futility. Half the half of the game is knowing what number to offer. The other half is knowing how to identify which sellers are likely to take your number. Right? Just you telling me this story, the fact that they kept coming back to you tells me you created a form of impression. You built some kind of relationship with that listing agent that they knew that you would close and you were very interested.
You did not shotgun an offer. Yes or no, they said no and just forgot about it. You planted some seeds that let them know I really want this house but it has to be at this price, please come back to me when you\u2019re ready. That follow up is what businesses do. That is a principle that we talk about in Skill. You don\u2019t just go to a real estate client and say, \u201cHey, can I be your agent?\u201d \u201cI don\u2019t want to buy a house right now.\u201d \u201cWell, then you\u2019re dead to me. Go pound sand.\u201d Right? You have to keep a relationship alive with that person so that they come back when they\u2019re ready to buy a house. It would be the same for anything. The guy who walked in my office yesterday wanting to sell me high speed internet for my office or something, he\u2019s not going to get the sale the first try, but if I see that person over and over and over and he happens to catch me at a time when my internet just crashed and I\u2019m pissed off, I will probably say, \u201cYes, I\u2019ll take your internet.\u201d That\u2019s a business principle.
The people that get that, when they get into real estate investing, they miraculously get these great deals at 12. The problem is someone hears that and they go, \u201cWell, I don\u2019t know. Tony just gets better deals than me. When I wrote an offer at 312 on a $500,000 house, they said no. It doesn\u2019t work.\u201d Right? It\u2019s the approach of understanding. I literally have a spreadsheet when I\u2019m looking at properties and we write an offer. The fact that I wrote an offer on a house is the first column on my spreadsheet, offers written. I use that to follow up every two weeks if I really like that property. Has it sold yet? Are your sellers thinking different? Because you never know what\u2019s going to happen. A lot of the times the sellers say no. Then they start looking at houses themselves on Zillow and they fall in love with one, but they\u2019ve got to sell their house to go buy that one. And when you come back after one of them just fell in love with a new house, now that offer that you sent might be more appealing than when they first received it.
I\u2019ll follow up constantly. There\u2019s a house I had in contract a couple months ago. I had to back out because it needed $75,000 of work on the deck. The house still hasn\u2019t sold yet. Every couple weeks I tell my agent, \u201cCheck in and see how the sellers changed their mind yet.\u201d That\u2019s a business principle that works in any business. I\u2019d love to see investors getting more into understanding that. And then the next column on my spreadsheet is properties and escrow, and then close, and then with a rehab. I\u2019ve got this whole process of how we track the properties that I\u2019m buying. But the first step is following up on that deal that you really want and kind of monitoring it over time.<\/p>\n
Ashley:
David, talking about your spreadsheets here, Tony and I both use monday.com to track similar things, but would you go a little more in depth with your process so that a rookie can maybe get faster at analyzing deals? What are some things they should be implementing in their business to become more experienced at that deal analysis so that they are going through their buy box or their criteria and not wasting so much time on, okay, here\u2019s one MLS listing. I\u2019m plugging it into this calculator. I\u2019m going through the full analysis for each property. What are some kind of tips you can do to speed up that process?<\/p>\n
David:
That is a great question. I\u2019m so glad to hear you say this, because this is what people need to hear. When you\u2019re learning how to analyze a deal, yeah, you got to go analyze a hundred deals, but once you know how to do it, there\u2019s no value in just repeating this process and trying to push this square peg into a round hole. When you are pretty good at understanding what are the numbers, the inputs that go into determining if it\u2019s going to cash flow or not, now you want to move into phase two, which is, well, what makes some properties work and other properties not work. Okay? In my analysis, the first thing I\u2019m looking at is the area. I have in my head, there\u2019s 10 ways that we make money through real estate, and a couple of them would be buying equity. That\u2019s just buying the property at less the market value. Tony\u2019s property\u2019s going to appraise for more than 312. He\u2019s already made money going into the deal right away. There\u2019s also forcing equity. That would be fixing up a property, improving it cosmetically, adding square footage, something like that.
What we tend to think about is only is just cash flow. That\u2019s one out of the tent that we drill down on and we\u2019re just looking to see which one of these things have cash flow. But even then there\u2019s forced cash flow. Can I come in and add a unit to that property that will make it cash flow better? There\u2019s natural cash flow, which is just what happens because of inflation going up, but then there\u2019s market appreciation cash flow. What if you bought in a market like South Florida before it exploded? You could expect your cash flows to rise disproportionately to the market as a whole.
I\u2019m trying to identify the areas where I\u2019m putting the odds in my favor. I don\u2019t know it\u2019s going to appreciate. I don\u2019t know it\u2019s going to go up. But statistically speaking, if I identified South Florida or Seattle a couple years ago, or Austin, Texas five years ago as an area that tech was going to be moving into and bringing big jobs and there was a restricted amount of properties that could be built because the area was already built out, so that supply and demand were going to be way off with way more demand than supply, it\u2019s reasonable to think that I\u2019m going to get higher returns in that area than somewhere else. The area itself is the first thing that I look for.I\u2019m wanting to know, is this a desirable place people want to live? What\u2019s the weather like? What\u2019s the economic environment like? What\u2019s the political environment like? What\u2019s the tax structure of that actual city or that state like?
And then does it have restricted supply? I don\u2019t know that Topeka, Kansas is ever going to be the hottest market, because Kansas is so big and they can just build some more homes. All you Kansas listeners out there, we love you. If prices of Kansas go up, they\u2019ll just build a million more houses, and there\u2019s plenty of room to do it, right? When you look at the market that are doing really well over the last eight years: San Francisco, Seattle, Portland, Austin, they\u2019re all tiny little hubs where everyone moved to and they were already developed, but there wasn\u2019t anywhere to build. That\u2019s not rocket science, but for some reason it goes over investors\u2019 head because there\u2019s nowhere in the calculator to point out that type of stuff.
The area\u2019s the very first thing I\u2019m looking for. I\u2019m looking for restricted supply, low crime, and signs of development. Are companies moving there and are they bringing higher wages? Because even if you want to pay a higher rent, you have to be able to afford it. You have to be able to make more money to be able to pay that higher rent. The second thing that I look at after area is revenue, which is where most people start. Is it close to the 1% rule? It does not have to be the 1% rule. Especially as interest rates were lower, the 1% rule, you could get farther and farther off of it. Maybe if interest rates are at 15%, you\u2019ve got to hold tight to the 1% rule, but they\u2019re still pretty low considering. It doesn\u2019t have to be exactly there. I\u2019m not even going to bother analyzing properties that are way off.
If someone\u2019s looking at single family homes in Austin, Texas that cost 800 grand and they rent for 3,200, don\u2019t bother. Just don\u2019t even analyze it unless you see an angle and you have the capital to convert extra units out of that property or you\u2019re analyzing it for a flip because there\u2019s a lot of equity there. I like to look at three years down the road rather than year one, sometimes five years down the road. This is another piece of advice that is very unpopular. People don\u2019t like to hear it, but I\u2019m being honest about how I look at real estate. Very few deals right now look incredibly promising. The second you buy them. I\u2019m sure you guys can both agree. Most of what you analyze is not giving you that 12 to 15% cash on cash return that we could get five years ago, or 10 years ago you could get 20 to 25% cash on cash return.
There is so much competition for real estate right now, and there\u2019s so few competing asset classes where people can put their money that it\u2019s all going into real estate. If you\u2019re just wanting an incredible cash flow the second you buy the home, nothing\u2019s going to work. What I\u2019m doing is I\u2019m looking at three years down the road, four years down the road, five years down the road. With rent increases, with increasing demand, with the property finally being stabilized, will this be a good investment or will this still suck?
Because a lot of the people I hear about that get stuck into bad deals bought them from turnkey companies, or they went and bought something in Indiana for $40,000 that looked amazing, and five years down the road they\u2019ve lost money because the minute that one thing goes wrong, all their cash flow is right out the door, or they get one bad tenant and it\u2019s disappeared. Okay? There\u2019s no input on a spreadsheet for those types of things when we\u2019re monitoring for cash flow. I\u2019m thinking five years down the road, what\u2019s development going to be like? You don\u2019t know, but you also don\u2019t know if year one cash flow is going to work. It\u2019s this fallacy that the calculator telling you that you\u2019ll get a certain return is what is actually going to work out. I always take that longer term approach and try to put the odds in my favor with understanding that there\u2019s no guarantee there.<\/p>\n
Ashley:
David, along those lines with looking at the three-year outlook, is there anything specific right now that someone should pivot or implement in their business that you\u2019re seeing compared to the last two years with the market conditions changing? Is there anything just top of head that you would give advice to rookie? Maybe you were in a real estate investor\u2019s course and learned this over the past two years, or you watched other investors do this, and now that the market has changed, don\u2019t do that anymore or do this instead? Did you just have any little tidbits like that?<\/p>\n
David:
Well for one, the government was printing so much money over the last five years. Almost anything you bought was going to grow in value. But the problem was us investors would take credit for that. Okay? Someone would go buy a property in some just random area and then it appreciated by 20% and they were like, \u201cI\u2019m so smart. I\u2019m a genius.\u201d No, you\u2019re not like you. In fact, the way I look at it is properties did not appreciate by 20%, the dollar was devalued by 20%. You just took that credit on your books. That\u2019s a big thing I think a lot of people haven\u2019t realized is we didn\u2019t do as great investing in real estate as we thought, money was devalued. And that\u2019s why I\u2019m not surprised that eggs are expensive or the gas is expensive or the cars are expensive. Everything is becoming more expensive because of inflation.
The best move investors made was we put our money in something that retained its value. It didn\u2019t actually grow in value, and that\u2019s humbling when you can accept that, but it also creates a sense of urgency that you need to put your money into something that will hold its value because naturally the value of money is eroding along with inflation. As we have increased interest rates, we have kind of slowed down prices going up, but I don\u2019t think that that means we\u2019ve stopped it. The minute rates come back down, we\u2019re going to see another poof in value. Part of the strategy right now is balancing, \u201cI can\u2019t buy a property I can\u2019t afford hoping it goes up.\u201d That\u2019s speculation. We don\u2019t do that. It has to be something you can afford. But you do need to maybe temper your expectations that it\u2019s not going to perform great until four to five years of inflation occurs and the rents that you can expect are higher.
Or if you\u2019re buying a property right now, like I just had to refinance one of my BRRRR projects that I had a bridge loan into a 10.75% interest rate. That sucks. This is a $2.2 million loan. I did not like that whatsoever. Okay? But when rates go down, if it drops from I had to pay 10, maybe someone else might have to pay seven or eight. If it goes back down to four or five, what\u2019s going to happen to the value of that property? It appraised at 2.9. When the rates go down a lot, it\u2019s probably appraising at 3.7. If I can refinance from that high rate into something less, my $17,000 mortgage probably goes down to 11 or 12,000, and all of a sudden there\u2019s a lot of cash flow.
I can only buy properties I can afford. I don\u2019t love that that\u2019s the situation I found myself in, but I will be fine if I take the longer term approach. I don\u2019t think investors were thinking that way in the last five to six years. It was like, \u201cWe\u2019re printing money. We\u2019re drowning the country in stimulus. All hands on deck. You\u2019ve got to put your money somewhere right now to ride this increasing tide that\u2019s going up.\u201d Now you\u2019ve got to be a little bit more careful and you have to think, \u201cAm I buying in an area that will maintain its desirability over the next three to five years, because then I\u2019m going to look like a genius.\u201d<\/p>\n
Ashley:
I think a big takeaway that rookies should look at right there with what you just said, David, is don\u2019t have such high expectations. You\u2019re watching people on social media. Like, \u201cWow, I got that 20% in appreciation from doing this rehab on this property. I made that so valuable.\u201d Decrease those expectations a little bit and don\u2019t get stuck. Still take action. Having a return or cash flowing sum on a property, it\u2019s still going to be great. Don\u2019t get focused on having that perfect deal, the one that\u2019s completely maximizing every single dollar you\u2019re putting into that investment, because you just want to make that first deal. That\u2019s going to give you the momentum to propel you. So don\u2019t get caught up in what other people are doing or what they did the past two years, or you did a BRRRR and you\u2019re not pulling all your money out. Maybe you\u2019re leaving a couple thousand dollars into the property. That\u2019s not the end of the world at all. That\u2019s still amazing. You just got this property for $2,000 and people are paying you to live there. You get mortgage pay down and you\u2019re building equity into it. Try not to get focused on what was happening in the past two years and restabilize yourself and stay in your own lane and stay focused on what\u2019s happening now.<\/p>\n
David:
That is such a good point. I hear that one a lot. \u201cOh, I didn\u2019t get all my money out of the BRRRR they failed.\u201d It\u2019s like, well, you would\u2019ve put 25% down plus your rehab. You\u2019d have been left with 35 to 40% of your money in the deal if you bought it traditionally. Instead, you left 10% of your money in there and you think that you did something wrong. That that\u2019s absolutely still a win. I think to your point, if we compare ourselves to the influencer on TikTok that showing their huge wins that you may or may not be able to confirm that they actually did that, we feel bad. If we compare ourselves to the person that did nothing, you should feel really good. That\u2019s just an overall lesson. If we\u2019re all comparing ourselves to Tony, we\u2019re going to think I\u2019m not doing good enough in the gym. Right? Or we\u2019re comparing ourselves to Ashley, we\u2019re like, \u201cI\u2019m just not funny enough.\u201d But if we compare ourselves to what we were yesterday, all that matters is am I stronger and am I funnier than where I was.<\/p>\n
Tony:
David, I want to talk a little bit more about the systems and processes that real estate investors should be building when they\u2019re thinking about the business that they have. As an example, I just had to hire a new assistant in my business. When I was onboarding my previous assistant, I did a really good job of recording videos on Loom for the different tasks that I wanted that first assistant to do. So like, \u201cHey, pay this credit card bill here. Here\u2019s a Loom video. Pay this invoice. Here\u2019s a video. Pay this team member. Here\u2019s a video. Do this other little random task. Here\u2019s a video.\u201d Every time I did this task for that first EA, it was easy for me to train her when I had to replace her. Now it\u2019s even easier because every time I ask this new EA to do something, I just send her a video with the link as well. If you think about that process of building the systems within that little example, how can we apply that to someone who\u2019s building a real estate business? What are some of the things they should start doing today so that way they can start systematizing their real estate business?<\/p>\n
David:
That is another principle that applies whether it\u2019s investing in real estate, running a business as an agent, running any kind of business. It\u2019s easier to just take whatever has to get done and just go do it, but that puts you on the hamster wheel that you never get off. There\u2019s two parts to a system. I talk about this in Scale. Everybody understands the first part, which is you need to create a checklist of things that need to get done or a library of videos that show somebody how to do it. That is the first step in creating a system. The error becomes when we think that\u2019s all a system is, because the second part of a system is having a human being that is skilled and capable at doing those things. We have all had a position where we hired someone to do something and it was super clear what they needed to do and they still screwed it up.
And then what happens is you go, \u201cYou know what? People don\u2019t work. There\u2019s no way to do this. I just need to go and do it myself.\u201d Because when it\u2019s our business, we will always figure out some way to do the things that need to be done. That\u2019s not the end of the world, because at least when you have a checklist yourself, you\u2019re less likely to make mistakes. You\u2019re less likely to forget to do stuff. You\u2019re going to be more efficient in getting it done. What I talk about in Scale is the process of leveraging out what you\u2019re doing needs to be viewed with the same approach that you took when you were learning to do it yourself. I talk about the three dimensions of success.
The first is just a plain one dimension, it moves left to right. That\u2019s what I call learn. We start off knowing nothing and we slowly move down this spectrum towards a hundred. And the closer we get to a hundred, the more money we make, the less time it takes, the more skill we have, the better success you achieve. This is you who knows how to run a short-term rental. You are much closer to 100 because you\u2019ve done this for a while. You\u2019re good at analyzing them. You\u2019re good at anticipating problems. You\u2019re good at maximizing revenue. You\u2019re good at mitigating guest complaints. You\u2019re good at getting good reviews. You\u2019ve learned how to be good at this job, so make good money. The problem is, at a certain point, you reach the end. You cannot get any better. You\u2019re managing 15 of them and you\u2019re like, \u201c16 would break me. I can\u2019t do another thing.\u201d At that point, you have a choice. You could be happy with your 15 and just work hard and make good money forever, or you could start over on a new spectrum, a new dimension, that I call leverage.
And again, you\u2019re going to start at zero and now you\u2019re moving in another direction. It\u2019s your second dimension. Now you\u2019re going up. You\u2019ve got to get to a hundred at the ability to leverage, the skill of leverage. It\u2019s different than learning. Where people mess this up is they think, \u201cI\u2019ve already learned how to do this. I should start at a hundred on leverage.\u201d And you don\u2019t. There\u2019s a completely different skillset that involves identifying talent, training talent, holding talent accountable. All the things that go into being good at leverage, you suck at, and you\u2019re going to start all the way over at the beginning as you fail and fail and fail. And if no one tells you that\u2019s what\u2019s coming, you\u2019ll give it one or two tries. You\u2019ll say, \u201cThis isn\u2019t for me.\u201d You\u2019ll quit. You go back to the learn where you\u2019re comfortable and you\u2019ll just work your butt off and never tell anyone that you hate your life because you make good money but you have no time to spend it or enjoy it because you\u2019re working all the time.<\/p>\n
Tony:
David, dude, so many good examples. It\u2019s funny, I actually had a call earlier today with my ops manager for our short-term rental cleaning company. One of the new roles that we instituted in that company was someone who\u2019s a property inspector. Their whole job is to go to these short-term rentals after the cleaners are done and inspect how good of a job the cleaners did. And my ops manager was saying, \u201cHey Tony, when the inspector finds an issue, I just want her to clean it on the spot. That way we can get it handled quickly and the guests can check in with no issues.\u201d I said, \u201cThat it\u2019s absolutely not what we\u2019re going to do.\u201d Because if that property inspector cleans it on the spot, now we\u2019re taking away accountability from the cleaners of doing that job correctly themselves.
What I want is that if the inspector finds an issue, they notify the cleaner who then drives back to the property for a second time that day to solve the actual problem. Right? The reason I share that is because so often we feel that it\u2019s easier to just solve these problems in ourself as we\u2019re building our business, but what we\u2019re doing is handicapping the people that should be developing the skills to solve those problems for us. So if we can do a better job of pushing that accountability towards the people who we\u2019ve hired or partnered with to do that, it eventually allows us to take a step back and let the business grow on its own.<\/p>\n
David:
What you just described is part of the skill of leverage. You probably didn\u2019t learn that automatically. You had to go through a couple situations being very frustrated that the cleaners are like, \u201cOh cool, I don\u2019t have to do anything.\u201d What you realized was if I want to be good at leverage, I have to create pain for the person who made the mistake, otherwise they will just keep making it. No one tells you that, that\u2019s a part of something you have to get good at. I had to learn that lesson with my businesses too, where I had this tendency to want to jump in and help the agent who makes a mistake and save their bacon and try to keep the deal alive. We all have a thing where, \u201cIt\u2019s easier if I just fix it.\u201d And then the problem continually happens for the rest of your life. There has to be a point where the person that you\u2019ve leveraged to feels pain, is forced to take responsibility, and solves their own problem so you don\u2019t solve it.
There\u2019s a lot of things like that that are going to pop up during leverage. You\u2019re going to have to figure out the right cleaners. You\u2019re going to have to get good at reading people. Is this a cleaner that\u2019s going to show up every day or is this a cleaner that\u2019s like, \u201cI\u2019m behind on my bills. I really need a job. I\u2019m going to tell Tony everything he wants to hear and I\u2019m going to work hard for two months and then I\u2019m going to get caught up and I\u2019m going to stop being motivated and I\u2019m just going to slip back into doing a bad job again.\u201d You have to learn how to anticipate these things, and at a certain point you will get leverage down, and you can now go from having 12 single family short-term rentals into 40. You\u2019ve got a huge portfolio.
But there\u2019s another dimension if you want to go past that, and the third dimension is leadership. That\u2019s a whole new skillset. You have to learn a whole new way of approaching things and you have to start over at zero. In Scale, I talk about these facts because everybody wants financial freedom and they know real estate\u2019s going to help them get there, so then they do it. Then they realize they\u2019re a slave to managing real estate and they need the leverage, so they want to get out of it. So then they get out of that and then they realize, well, I\u2019m still a slave in a sense to all these people that depend on me for how to do the job. Until you get to leadership, you\u2019re not ever actually really in control of your life. You haven\u2019t turned it into a business, you\u2019ve just turned it into a job.<\/p>\n
Tony:
Man, David, so many good things, brother, and I feel like we could go on this point for days and days. But I think the really quick one on the leadership and the leverage piece is that every single person that wants to build a big portfolio should be thinking about those principles from day one, because the more you can integrate that into your business when it\u2019s small, the easier it is to have success when your business gets big.
I also just want to recap, Dave, some of the other things you\u2019ve mentioned. When we talk about market selection and really the deal analysis piece and things you called out were in order to quickly analyze, talk about the area that you\u2019re focused on and knowing what markets you should be moving into. You talked about the revenue potential and quickly being able to exclude certain properties because you know that they\u2019re not going to check that box because you\u2019ve already analyzed a few deals in that market. Looking for markets that are maybe appreciating and not just focusing on that one metric which is cash flow. Ultimately, I think the biggest thing is that even if you have this framework, people still have to take action on a consistent basis to find the benefit of knowing those things. That\u2019s where a lot of rookies get stuck.
David, I guess one last question for you. If someone reads through the books, if someone listens to the podcast, how can they consistently take action? What advice do you have for someone to actually do the things they need to do to see this all the way through?<\/p>\n
David:
Well, start off with knowing what actions would need to be taken. Who would I need to be or what would I need to know to actually be good at this? Just sticking with your weightlifting analogy, you don\u2019t just \u2026 Part of the job is working really hard, but you don\u2019t want to just show up at the gym and work really hard with no plan. Can you identify what makes muscles grow? What foods need to be eaten? Right? How hard is too hard or is there a too hard? Can you get clear on what even makes this successful? When you have that, you just focus on what the next step is. So many investors, this is just my personal opinion, are looking at the guy that\u2019s got 700-unit apartment complexes and saying, \u201cI want to be them.\u201d They\u2019re trying to copy this blueprint or this system that is not realistic for them to achieve.
They\u2019re not going to go become a syndicator and raise a bunch of money and buy 100-unit apartment complex and learn that way. They would be so much better to just house hack, just put three and a half percent down on a property, and get used to the fundamentals, get used to seeing what goes wrong, get used to figure out which part of real estate you like. And then at the end of a year, rent out whatever part of the house you were living in, the bedroom, the unit, whatever, and house hack again. Just do that every year for the next three, four, maybe five years. You\u2019ll get this sense that real estate just starts to become kind of predictable. Right?
You buy a house, you\u2019re like, \u201cOkay, I\u2019m going to go sign. This is what I\u2019m going to check for in the documents. I need to make sure that this gets done. This is the part the contractor always misses.\u201d When you are anticipating what\u2019s going to go wrong right before it does, you\u2019re getting to the point that you\u2019re ready to take the next step. And after you\u2019ve just house hacked, you\u2019ve just put 5% down on a house, you didn\u2019t risk all your money on one deal several times in a row. You\u2019ve built up some equity, you\u2019re in a position to take a HELOC out of that property, you have a very good understanding of the fundamentals of real estate. Then say like, \u201cOkay, I think I could buy a 12 unit apartment complex.\u201d Or if you\u2019re really confident, maybe buy a 20 or 25. And then just give yourself a year to figure out how that works. Then leverage off parts of it, get a property manager to take it over, get a different company to focus on the leases, and then kind of take the next step of what you\u2019re getting into.
It\u2019s really there\u2019s two ways to err. You could go way too big and try to do too much and get yourself caught up and do nothing. Or you can say, \u201cI\u2019m not ready at all. I\u2019m just going to sit here and do nothing.\u201d Just take very small steps all the time. I\u2019ve been getting back into the gym recently myself. It was discouraging because I expected myself to lift what I did two years ago when I was going all the time, and it was nothing close to that. There\u2019s this little voice that\u2019s like, \u201cJust don\u2019t do it. There\u2019s no point.\u201d Right? The key wasn\u2019t like to monitor how much I was lifting. It was just to make sure, did I go to the gym? Did I work out to failure? Who cares if that my old warmup is now my max. It doesn\u2019t matter. It just matters did I do it.
And then in time it slowly starts coming back and coming back, and now about three months later, I\u2019m literally increasing the weight every single time I go and I\u2019m feeling good. It\u2019s that reminder to myself, because we\u2019re all a rookie. You just have to do it over and over and over and make sure you\u2019re doing it, and then the doors open up. It wasn\u2019t like, \u201cHow do I know what I\u2019m ready to lift more weight.\u201d You can tell. You could go heavier and it\u2019s not going to fall on your face, and so you do that. You\u2019ll know after a couple of house acts it\u2019s time to go bigger. And once you\u2019ve gone bigger, you\u2019ll know this is getting boring. I\u2019m ready to take the next step.<\/p>\n
Ashley:
Well, David, next time we have you on, you\u2019ll have to do some kind of lift competition with Tony now that you\u2019re back working out.<\/p>\n
David:
Yeah. That\u2019s what Bigger Pockets needs, the bigger pump competition.<\/p>\n
Ashley:
We\u2019ll do some kind of charity event where people could donate dollars as to who they thinks going to win. Yeah. Well, David, thank you so much for joining us on the Real Estate Rookie Podcast. Can you let everyone know where they can find your new book?<\/p>\n
David:
Yeah, they can. If you go to bigger pockets.com\/scale, or scalebook, but scale\u2019s less words, so type that one. You can get the book there and you can find out more about me on social media at davidgreene24.<\/p>\n
Ashley:
Okay. And if you guys go to the bigger pockets.com\/scalebook and use the discount code scale262, you can get 10% off.<\/p>\n
David:
That\u2019s right. I believe we\u2019re also putting together another marketing plan where if they buy all three books, they can get a free month membership into the mastermind that I\u2019m running, which the books are nothing close to what the mastermind would cost, so it\u2019s a super good deal. And if you don\u2019t know, if you\u2019re not an agent, just buy them and give them to the real estate agents that you have. They will appreciate it. It\u2019s a hard job and they\u2019re not getting nearly enough guidance that they need.<\/p>\n
Ashley:
Or if you already have the two other books, it\u2019s probably still worth it to buy the three and give one to somebody.<\/p>\n
David:
Yeah, that\u2019s pretty true.<\/p>\n
Ashley:
And just to get into the mastermind for free, that\u2019s a really cool value. Okay, so make you guys check that out at the Bigger Pockets bookstore.
I\u2019m Ashley at Wealth Firm Rentals, and he\u2019s Tony at Tony J. Robinson, and we will be back with another guest.<\/p>\n
Speaker 4:
(Singing).<\/p>\n
\u00a0<\/p>\n<\/div>\n