\n<\/p>\n
If you want to build a rental portfolio<\/strong><\/a>, you need to know how to scale the right way. Buying a property every year or two is good, but it won\u2019t give you the financial freedom <\/strong>you desire. However, if you know how to double, triple, or quadruple the amount of real estate you\u2019re acquiring <\/strong>without adding tons of tasks (or stress) to your plate, you could be financially independent faster than you\u2019ve ever thought. This is precisely what Niti Jamdar <\/strong>& Palak Shah <\/strong>did, building a ten-million-dollar <\/strong>real estate portfolio<\/strong><\/a> in less than a decade<\/strong>.<\/p>\n As two burnt-out corporate workers<\/strong>, Niti and Palak were tired of putting their jobs before their future family<\/strong>. So after having children, they realized it was time to start building something that would help them regain their freedom instead of shackling them to golden handcuffs. With a busy schedule and little time, Niti and Palak were forced to automate, delegate, and systematize<\/strong> their real estate business. And now, you can copy their exact steps<\/strong>.<\/p>\n In their newest book, Accelerate Your Real Estate: Build a Hands-Off Rental Portfolio with the SCALE Strategy<\/em><\/strong><\/a>, Niti and Palak uncover the five-step system to unlock eight-figure wealth<\/strong>. They used this same strategy to build their portfolio with little free time or money to throw at projects. In this episode, they\u2019ll review these five BRRRR-inspired steps, explain why today\u2019s market<\/strong> isn\u2019t what most people think it is, and debunk the myths that\u2019ll stop you from investing.<\/strong><\/p>\n David Greene: Niti Shah: David Greene: Rob Abasolo: David Greene: Rob Abasolo: David Greene: Rob Abasolo: David Greene: Rob Abasolo: David Greene: Rob Abasolo: David Greene: Niti Shah: Palak Shah: David Greene: Palak Shah: David Greene: Rob Abasolo: Palak Shah: David Greene: Palak Shah: Rob Abasolo: Niti Shah: Rob Abasolo: Palak Shah: Niti Shah: Palak Shah: David Greene: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Rob Abasolo: Niti Shah: David Greene: Rob Abasolo: Palak Shah: David Greene: Niti Shah: Palak Shah: Niti Shah: Rob Abasolo: Niti Shah: Rob Abasolo: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Niti Shah: Rob Abasolo: Niti Shah: Palak Shah: Rob Abasolo: David Greene: Rob Abasolo: Niti Shah: David Greene: Niti Shah: Palak Shah: Niti Shah: Palak Shah: David Greene: Niti Shah: Palak Shah: David Greene: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Rob Abasolo: Niti Shah: Palak Shah: Niti Shah: Palak Shah: David Greene: Palak Shah: Niti Shah: Rob Abasolo: Niti Shah: Palak Shah: Rob Abasolo: Palak Shah: Niti Shah: Palak Shah: David Greene: Palak Shah: Niti Shah: Palak Shah: Rob Abasolo: Palak Shah: David Greene: Niti Shah: Rob Abasolo: Palak Shah: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Rob Abasolo: Niti Shah: Palak Shah: Niti Shah: Palak Shah: Rob Abasolo: David Greene: Palak Shah: David Greene: Palak Shah: Rob Abasolo: Niti Shah: David Greene: Rob Abasolo: David Greene: Rob Abasolo: David Greene: Palak Shah: David Greene: Rob Abasolo: Palak Shah: Niti Shah: David Greene: Rob Abasolo: David Greene: Palak Shah: David Greene: Palak Shah: Niti Shah: David Greene: Rob Abasolo: David Greene: \u00a0<\/p>\n \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is the BiggerPockets Podcast, Show 778.<\/p>\n
This book is really about our journey and how we built our 10 million dollar portfolio and we\u2019re able to quit our jobs. So we kind of reverse engineered that into saying, \u201cAll right, how do we work with the limited capital that we have? How do we work with the limited time that we have, but also, scale our assets really fast in three to five years as opposed to waiting 30 years?\u201d And I think the question shouldn\u2019t be, \u201cShould I invest right now? The question should really be, how should I invest right now?\u201d Because every market has its pros and cons.<\/p>\n
What\u2019s going on everyone? This David Green, your host of the BiggerPockets Real Estate podcast? You already know what time it is. The biggest, the best, the baddest real estate podcast on the planet. I\u2019m joined today by my favorite co-host and good friend, also incredibly handsome man today. You guys got to check us out on YouTube. If you\u2019re not seeing what I\u2019m talking about, Rob Abasolo. Rob, good morning to you.<\/p>\n
Top of the morning to you, Dave. Listen, today, I\u2019m feeling good. I didn\u2019t tell you this, but I know you know I\u2019m not a morning person. Today, I woke up at 4:30, I worked out at five. I\u2019m turning my life around and it feels good.<\/p>\n
Today\u2019s show is awesome. We are joined by Nitty and Palak Shah. You may have recognized Palak\u2019s name from previous BiggerPockets episode, 368. They are back today because they just wrote a book for BiggerPockets. The book is called Accelerate Your Real Estate, Build a Hands-Off Rental Portfolio With the SCALE Strategy, where they have taken the BRRRR strategy that I wrote about and come up with a blueprint or greenprint as I like to call it, to scale that to growing a very big portfolio, and we get into a lot of very practical information on this topic. Rob, what were some of your favorite part?<\/p>\n
To me, this is a part two to the BRRRR strategy because I mentioned this later in the episode, I really like this because a lot of people do the BRRRR, right? They do single BRRRR or double BRRRR or triple BRRRR and then, they\u2019re like, how do I get to 20 or 30 or 40 or 50? We have a lot of investors that come into the show and say, \u201cOh, I did a hundred BRRRRs last year.\u201d And then a lot of people are like, \u201cI mean that\u2019s cool, but I can\u2019t even relate.\u201d So this is actually the systemized approach for how to scale your BRRRR business and get into some of those larger number deals every single year. So very digestible and really the dream team duo here, I\u2019d say. They had it down, like everything, the whole thing was just so massively orchestrated, I\u2019d say.<\/p>\n
BRRRRilliant analysis there, Rob.<\/p>\n
BRRRRilliant. Thank you. Thank you.<\/p>\n
Before we bring in Niti and Palak, today\u2019s quick tip is going to be brought to you by my tasty cinnamon roll of co-host, Rob Abasolo.<\/p>\n
And you\u2019ll get that reference a little later, but today\u2019s quick tip, we call this the Alex Hormozi hack, buy the digital and audiobook so that you retain the information better. You can read the book and listen at the same time. If you\u2019re like me and you have to read a page five times to understand what you just read, this is going to help you get through the book, and I promise you this is a book that you\u2019ll want to purchase. Also be sure to use promo code ARE778 for a tasty little discount on the said book, over at biggerpockets.com\/arebook.<\/p>\n
Very nicely done. You got that on the first try. You did a good job with it. You are really developing into quite the co-host that I must say.<\/p>\n
Thanks. I appreciate it.<\/p>\n
Today we\u2019re joined by Niti and Palak. Palak and Niti, welcome back to the BiggerPockets Podcast. How are you two today?<\/p>\n
Great. Fantastic.<\/p>\n
Yeah, thank you for having us.<\/p>\n
Well, Palak, we had you on the show back in February of 2020. What a time that was, episode 368. I can\u2019t believe we have done that many episodes in that shorter period of time. That\u2019s awesome. You were just three years into your investing journey then, and you were focusing on the BRRRR Method, which we immediately connected on for obvious reasons. Can you quickly share for people who haven\u2019t listened to that episode, what made you start investing?<\/p>\n
Yeah, sure. Niti and I were both in corporate and we had great jobs. We had slowly climbed the corporate ladder. I was a mechanical engineer. He worked in strategy and finance, and I had climbed the corporate ladder for 17 years and then, we decided to have kids. We waited until our late 30s because that\u2019s what we were told you\u2019re supposed to do, become financially stable and then have kids. Then, after we had kids, we realized that the higher up you go, the less time you have for your family. To me, it felt like a lie had been sold to me. I felt like society had conned me into this whole lifestyle that simply didn\u2019t work. We were constantly stressed out and my resentment for that lifestyle started building. One day I told Niti, I was like, \u201cWe have to change something. This isn\u2019t working. I\u2019d never see the kids.\u201d
And it was just really difficult, and after a lot of back and forth, we decided we were going to become a single income family, and I was going to start making an impact towards building something for our family that I couldn\u2019t have otherwise, having that full-time job.<\/p>\n
Well, I appreciate you sharing that because I don\u2019t think that it is an easy conversation for most people. We always talk about it three years after it\u2019s happened, when we\u2019ve been so successful that we\u2019re on a podcast and then, it gives us impressions to everyone listening like, \u201cI just woke up one day and realized there\u2019s got to be more to life than this. That bird chirping on my window is singing the wrong tune.\u201d We just walked into our boss and said, \u201cYou know I just got to do this for me.\u201d And we broke up with our old life, and the next thing we know, our next partner walked into our life sparkling and it was wonderful. That is not how this goes. You go from fighting one battle to fighting a completely different battle and getting your butt kicked. Rob, you had a similar experience. Do you remember what that was like for you?<\/p>\n
Yeah, I opened my Zoom. It was during the pandemic, and I remember opening the computer and you had this speech for my bosses. I was like, \u201cListen here guys, I\u2019m never going to work for a company again.\u201d And then they joined and I just started crying. I was like \u2026 and they were like, \u201cIs everything okay?\u201d And I was like, \u201cYeah, I\u2019m just quitting.\u201d And they were like, \u201cOh my goodness, thank goodness.\u201d And it was obvious to every person in my life, best friends, wife, coworkers, that it was time for me to quit, but it wasn\u2019t so obvious to me, which is always very funny in retrospect because it just made so much sense and I didn\u2019t see it there. It\u2019s a very scary decision. So a lot of respect to you for making that decision.<\/p>\n
I think the big thing was \u2026 I don\u2019t know, I felt like a lot of women had paved the way for me to get to where I was in corporate and I felt like I was letting them down by quitting my job, but then Niti was pretty big on \u2026 he\u2019s like, \u201cYou are not quitting your job to let them down. You\u2019re quitting your job to build something else.\u201d<\/p>\n
What has happened since the last time we spoke? I believe you were around five million in assets at that time. What\u2019s it been like since 2020?<\/p>\n
So we\u2019ve doubled our portfolio. So we are 10 million in assets, and I think six months after the podcast aired the episode, Niti quit his job and he was able to retire and join the business full time.<\/p>\n
Did you expect for Niti to \u2026 or Niti let me ask you, were you expecting to quit six months after the podcast or did things just move so quickly that it sort of had to happen that way?<\/p>\n
So we had been planning this for the longest time, and to what David said, it\u2019s such a difficult decision because once you\u2019re in your comfort zone, we\u2019ve been in corporate \u2026 I\u2019ve been in corporate for 15 years, and you are in this comfort zone of getting the paycheck, kind of knowing that you have a trajectory in the corporate life, that you work towards all your life. I remember coming home and telling Palak that we need to get out of this comfort zone. I cannot \u2026 if I think that I love my job, which I did, I did like what I do, except that when I looked at people who were 10, 15, 20 years ahead of being corporate, they were nowhere close to financial freedom.
I was like, I don\u2019t want to do this for another 20 years and not be able to spend time with my kids and do things that I want to do. So I used to come back and tell her that I\u2019m going to tell myself that I hate my job because you need something to compel you to make that change. Otherwise, it\u2019s status quo, and wealth is not in the status quo. Wealth is beyond that. So you just have to keep motivating yourself that that\u2019s what you need. So it took us \u2026 to your question, Rob, like we\u2019d been planning that for three years ever since Palak quit her job. We\u2019d been meaning for me to quit my job, and it happened maybe a year or so sooner than we had thought, which is great.<\/p>\n
So it seems like you guys have made really great progress. You\u2019ve doubled your portfolio, you\u2019ve gone from five million to 10 million in assets. Tell us a little bit about your roles that each of you play in the business and are you guys complimentary to each other? Are you working on the same stuff? Break that down for us really quick.<\/p>\n
In some ways we are each other\u2019s business clones, and we realized that early on and as we started working together more and more, we started discovering that we were each good at almost everything in the business, but we were really good at certain specific things, and we realized that Niti was really good at strategy and he was the one who first found the BRRRR strategy and he\u2019s really good at deciding which direction the business should go, and I\u2019m really good at systems and processes and ops. So we have really narrowed it down to our genius zones now at this point. Yeah, I feel like once we did that, that\u2019s when we really started thriving in this relationship because working together as a couple is a whole different ballgame. Nobody talks about it.<\/p>\n
Yeah, and it didn\u2019t happen \u2026 It takes time to figure that out, right? We didn\u2019t know day one that that\u2019s what our roles were going to be. Initially, we were like, \u201cHey, let\u2019s both be involved in everything.\u201d And that backfires pretty quickly because then nothing gets done. So it took a while to get there.<\/p>\n
Right.<\/p>\n
You\u2019re releasing a book called Accelerate Your Real Estate, Build a Hands-Off Rental Portfolio with the SCALE Strategy. What was it that inspired you to write that book? Where did they idea start from and how did it come to fruition?<\/p>\n
Yeah, this book is really about our journey and how we built our 10 million dollar portfolio and were able to quit our jobs. I think when we first started, there wasn\u2019t really a clear path of how we were going to do this. We knew that we wanted to build wealth and build passive income.<\/p>\n
And we knew we wanted to do the BRRRR strategy.<\/p>\n
Right.<\/p>\n
When we started executing it, we had to figure out what method of execution we wanted to implement, right?<\/p>\n
That\u2019s right, and I think even before that in corporate we thought that we had this kind of path that was made for us, but as Warren Buffet says, right, it\u2019s not sometimes how hard you roll the boat, but it\u2019s about the boat that you\u2019re in. So we knew that we had to leave the corporate boat and find something else that we wanted to do, and that was the boat of real estate and how we selected buy and hold investing and the BRRRR strategy. Then within that, we said, okay, in a few years we want to own enough assets that we don\u2019t have to do a nine to five job, but ultimately our goal was to be able to spend time with a family and spend time with our friends.
So we kind of reverse engineered that into saying, \u201cAll right, how do we work with the limited capital that we have? How do we work with the limited time that we have, but also scale our assets really fast in three to five years as opposed to waiting 30 years?\u201d So that\u2019s what really inspired the book and the strategy and the framework that we came up with.<\/p>\n
And we found that \u2026 a lot of times, we found a lot of information that was available for people who had no money and had a lot of time on how to get into real estate and how to scale a portfolio or how to work towards it, but there wasn\u2019t anything available to us on how we could execute the BRRRR strategy with limited capital, limited time and still not creating another nine to five for ourselves.<\/p>\n
Yeah, that\u2019s really cool. So would you say that this book is it \u2026 obviously, it\u2019s going to be centered around the BRRRR strategy, but it\u2019s not necessarily a how to execute the BRRRR strategy, from what I\u2019m understanding, it\u2019s more on the actual scaling of the operations. Is that right?<\/p>\n
Right, so it\u2019s almost, I think of like the BRRRR strategy as a strategy that can be implemented 100 different ways, but the scale framework that we talk about in the book is a specific blueprint to execute the BRRRR strategy. So thinking through every step in the BRRRR framework, how do you put systems and process and teams that really allow you to scale the business and treat it like a business rather than just a mom and pop investor?<\/p>\n
Awesome. I feel like there needs to be a movement started that anytime we refer to a blueprint for BRRRR, we call it a green print<\/p>\n
You heard it here first?<\/p>\n
Yes. This is a greenprint.<\/p>\n
A greenprint, yes, a green print to SCALE. You know what? The book scale that I wrote is green. This is getting even better. It\u2019s a conspiracy. All right. We\u2019re going to dive deep into some of this content from your book, Accelerate Your Real Estate, Build a Hands Off Rental Portfolio with a Scale Strategy but first, can you run us through the SCALE Strategy acronym and how it connects to BRRRR?<\/p>\n
Sure. So think of SCALE as one step for every step in the BRRRR framework. So the by step in BRRRR is scalable acquisition and deal analysis. That\u2019s S in the scale framework. So that\u2019s really about not just how you buy a property, a lot of people get stuck in analysis paralysis, but how do you identify the neighborhood? How do you identify the property avatar, how do you build a deal pipeline, so that makes it scalable? Next step in the BRRRR framework is the rehab, which is construction without the DIY, right? And that\u2019s exactly what that means. There\u2019s a lot of people think that, \u201cOh, they have to do all the work and they have to go out there and do the tiling and do the kitchen,\u201d and that\u2019s not how you need to do it.
If you really want to scale, you want to build a team that allows you to do the rehab no matter where you are, even if you\u2019re investing in a different city or different state, having a team that actually takes care of the rehab for you. Next step in the BRRRR process is the rent, which equates to adding cash flow. This is about how do you rehab the property in a way that attracts great tenants, that allows you to do your cash-out refi, but also maximize the rent that you get. Then, a lot of people talk about managing properties and getting tenant phone calls and having the systems, certain processes and teams to really be able to deal with it, as you scale your properties and as you \u2026 even if you\u2019re investing out of state again or out of the \u2026 in a city that you don\u2019t live in. Next is the-<\/p>\n
Refinance.<\/p>\n
Refinance, thank you. Refinance is leverage and commercial financing, and this is, I think by far, the most critical piece of the SCALE framework, which is understanding commercial finance. A lot of people can scale because they don\u2019t understand how to do the short-term financing. How do the long-term commercial finance and how do you get past the 10 loan limit if you do conventional loans and things like that, which commercial financing allows you to do, it truly allows you to scale. So that\u2019s a very important part of the process. The last is the repeat which is exponential growth. Exponential growth is all about treating this like a business, putting the systems and processes and teams in place in every step of the process that truly allows you to scale fast and focusing on the 20% of the things that give you 80% of the results.<\/p>\n
I love this. I love this and I love that there is a part two to BRRRR, if you will, because we have so many people come onto the show and effectively, a lot of the times they might have already done 50 BRRRRs or 100 BRRRRs, and it\u2019s really hard for a lot of the listeners to relate on how one goes from two to 20 or two to 40. So I think that this process really lays it out for people that want to go to that 10th or that 20th or 30th BRRRRs, so I\u2019m excited to dive into that.<\/p>\n
Yeah, and to that point Rob, in my mind, it\u2019s as hard to do two rehabs at the same time as it is to do 10 properties at the same time. The difference is the scale, how do you go from two to 10? And that\u2019s what the SCALE framework is about.<\/p>\n
Okay. So on this topic, there are a lot of people out there right now complaining that BRRRR has really gotten harder than ever, but it seems like you\u2019re actively investing this way right now, right? So what would you say some of the benefits are to the current market that we\u2019re in?<\/p>\n
Yeah, absolutely, and can I start with \u2026 take a step back and say this question has been asked by investors since 2015. Since we started investing, we were asking the same question. Everybody\u2019s asking me, is it a good time to invest? Should I be investing right now? I think the question shouldn\u2019t be, \u201cShould I invest right now?\u201d The question should really be, \u201cHow should I invest right now?\u201d Because every market has its pros and cons. Back when we started investing, deals were easy to find. The interest rates were low-ish, but it was very difficult to find lenders. Palak had to call 100 lenders to be able to find-<\/p>\n
Yeah, almost 100 lenders.<\/p>\n
Lenders. So that was one challenge that you need to solve for as an investor to be able to invest in that market. Then fast-forward to when COVID hit, lumber prices went through the roof. Contractors were really, really hard to find because there\u2019s so much money in the market and deals were really hard to find. There\u2019s 10 cash offers for every deal that you\u2019re trying to get. So that was a challenging market too, but again, as an investor, you figured out how to find the right deal, how to build a deal pipeline to be able to navigate that market.<\/p>\n
At the same time, lending was easier, right?<\/p>\n
Yeah.<\/p>\n
We\u2019d never seen 30 year fixed loans in the commercial world before COVID hit. There were maybe a few lenders offering that, but after COVID, everybody started offering those 30 year fixed commercial loans because it got much easier to borrow money. There was a lot of money in the market.<\/p>\n
Yeah, and fast-forward to now where the interest rates are at an all time high, but guess what, the positives in this market are that it\u2019s a lot easier to find deals than it was even a couple of years back. There\u2019s less competition in a lot of markets. It\u2019s easier to find contractors as a new investor because there\u2019s lesser money in the market, so there\u2019s lesser construction projects happening. So you\u2019re likely to find a contractor easily, and lumber prices and some other material prices have stabilized. So there\u2019s a lot of positives to this market. You just got to figure out how you\u2019re going to tackle the high interest rate, and that\u2019s it. So every market has its unique challenges that you need to see.<\/p>\n
Yeah, yeah. It almost sounds like you\u2019re saying probably in a lot nicer than what I\u2019m about to say, but people always find a reason to complain about the market that they\u2019re in, right? You\u2019re totally right. When interest rates were low, everyone was like, \u201cOh, it\u2019s so competitive and oversaturated now interest rates are high, but competition is low because no one wants to do this.\u201d Now, everyone is like, \u201cOh, the interest rates are high. I don\u2019t want to do it,\u201d but most of the investors that I know in my community, in my network, everyone is still \u2026 the experienced people are still investing in real estate because they\u2019re good at it. They just do it consistently, and I think that\u2019s probably the mindset that you have to take.
We\u2019ll have listeners that get really mad at past episodes. They\u2019re like, \u201cYou used to tell us to invest and now the economy is this and you\u2019re shifting your viewpoint.\u201d I\u2019m like, \u201cYeah, we are shifting our viewpoint. That\u2019s exactly what we\u2019re doing because the economy has shifted, so we must shift how we invest and how we look at different things.\u201d This is one of those things as educators in this space, shifting is the most important thing we can do because the conditions change every single day.<\/p>\n
Absolutely.<\/p>\n
And as investors, it\u2019s our job to figure out what the challenges are in the market and how to get around them and what the opportunities are in the market and how to take advantage of them. It\u2019s going to be changing constantly and if that\u2019s \u2026 that\u2019s a skill that as an investor, we have to develop, that\u2019s a part of growth as an investor, how to work with a changing market.<\/p>\n
Absolutely. I mean, David, I know you, you\u2019ve sort of shifted your strategy. I\u2019m certainly shifting my strategy so many different ways. I mean, primarily I was a short term rental investor. I still am. I just invest completely differently. I don\u2019t buy the same kind of houses anymore. I don\u2019t buy in the same locations. I don\u2019t buy with the same types of loans. I\u2019m doing a lot of creative finance or sub two deals because that\u2019s the best way to get a return for me. So ultimately, I think you have to know how to adapt to whatever market you\u2019re in.<\/p>\n
It\u2019s always been that way like we were just saying. It\u2019s hard to believe, but in 2010, which everyone refers to as the golden era, \u201cMan, if I could go back to 20 twin, I would\u2019ve bought every house that there was. I\u2019m just waiting for the next time that happens.\u201d The funny thing is, at that time, everyone thought you were fool if you bought real estate, you were being criticized, you were being mocked. There was contractors that were dying for work, that would take jobs at cautious to keep their guys fed it. It wasn\u2019t, \u201cIs there a cashflow deal?\u201d It was, \u201cOf all the cashflow deals, which one is going to get me the most for the least amount of work?\u201d So we\u2019re like, \u201cAll right, I can get a 25% cash on cash return with this one, and all I got to do is paint it.\u201d
That one, I got to do some drywall and paint. That\u2019s too much work, but there was no money. You couldn\u2019t raise money to buy houses. We hadn\u2019t increased our money supply by 80% at that time.<\/p>\n
Yeah. Tell me this, because I was not investing in 2010. I\u2019m sure you guys all were. I have to imagine that in retrospect, it seems like, \u201cOh my gosh, I wish I could go back to 2010 when the times were good,\u201d but was real estate that obvious of a good place to be in 2010? I got to imagine it was still scary coming right off of 2008, just like you said, right? Most investors were probably terrified to get into real estate except for the people that have probably been investing their whole life.<\/p>\n
Yeah, and this is a piece of advice we got from a mentor that we had when we first started investing, and he had been through multiple cycles, including the 2008 crash, and the first piece of advice that he gave us was don\u2019t invest for appreciation, invest for cashflow, right? And that\u2019s how he\u2019d survived the 2008 crash because he was not investing just for \u2026 in markets where it was going up and he was able to survive the crash because he was cash flowing on all the properties. That\u2019s the best part about long-term buy and hold rental real estate is that the cash flow allows you to survive periods of downturn, periods of recession,<\/p>\n
Niti, I\u2019m so glad you said that. You don\u2019t know how much heat I\u2019ve been taking from the real estate investing community for making that statement. I mean, I\u2019m hated in certain circles that consider me a heretic because I\u2019ve shared my opinion. Cashflow is not intended to make you wealthy. Residential real estate was never built for the purpose of creating cashflow. It does eventually do that, and at certain market cycles when the market is really low, you can get into cashflow earlier in the economic cycle of owning it than at other times. So for instance, any property that you buy in a decent area is going to cashflow in 15 years, maybe even in 10 years, it\u2019s not normal that it does the first year you buy it.
That was an unusual phenomenon we experienced for so long, like you said, Rob in 2010 because prices were so low, but as investors, we\u2019ve gotten addicted to this, like all that we think is I have to get cashflow so I can quit my job so I can get a girlfriend so my dog will like me so that my mom will finally respect me. All the things in life we want, we think cashflow is going to fix that problem, but those that have owned real estate for a while understand the perspective I have, which is that it is a defensive metric. It is designed to stop foreclosure just to keep the property alive. And over time, the appreciation that comes from inflation and the loan pay down and the value that you add to the real estate do create massive wealth that will dwarf what most people would make at a W-2.
It\u2019s just so hard to get that through to the people who show up saying, I want cashflow for immediate gratification and they want to fix things. Is that a similar experience to what you\u2019ve had?<\/p>\n
That\u2019s so true, David, which is what we talk about is, you need to stack assets like pancakes. In your initial years of investing, first two, three, four years of investing, you are just buying assets and yes, you need to positively cash flow so that you can see through periods of downturn and that it\u2019s not burning a hole in your pocket. You need to positively cash flow, but don\u2019t think that I\u2019m just going to get to 10 houses and I just need that cash flow and I can retire in two years. That\u2019s not the way to think about it.<\/p>\n
It actually puts a lot of investors in that scarcity mindset I\u2019ve noticed, because then you are worried about your $50 a month changes my cash flow if I just do this one thing, and I tell them there are four advantages to owning long-term buy and hold rentals. Cashflow is just one of them. There\u2019s appreciation, debt, pay down and what was the first one?<\/p>\n
Tax benefits.<\/p>\n
And tax benefits, thank you. Then, with the BRRRR strategy, now we have forced appreciation, right? Cashflow is just a very small part of it, and when you start focusing so much on cashflow, now I see investors get into this hyper scarcity mindset where they\u2019re trying to focus on that additional $20 a month instead of thinking that if I just own this property for 10 years, I\u2019m going to make a hundred grand. Why am I worried so much about that additional $20 a month? I was reading the book, the Psychology of Money, and he talks about how Warren Buffet, he was always focused on longevity. He wasn\u2019t focused on making that short term gain. He always talks about how. People who are able to withstand ups and downs in the market \u2026 yeah, there you go.
One of my favorite books, and he talks about how like \u2026 if you are able to hold on to your assets during ups and downs, whatever you need to do to make that happen, longevity is what\u2019s going to win.<\/p>\n
Yeah. Thank you for sharing that. This is gold everybody. Listen to this again. It\u2019s different than what you\u2019ve been told, but my opinion of why that is, is most of us hear about real estate investing for the first time from a guru, selling a course. And the fastest way to get someone to pay $100,000 to learn how to do something is to convince them that if they give you that $100,000, you will solve a problem for them no one else can, like getting cashflow to quit your job. So because of that \u2026 actually, I was up until 1:00 last night working on my next book for BiggerPockets, which is about the 10 ways real estate makes money, and basically they fall into those exact four categories that you two just mentioned, and how we\u2019ve all been sold the bill of goods on how cashflow is the only thing to look for, and so many people miss opportunities.
So I am very glad to hear that we have this in common as well as our love for BRRRR. This is really good. From here, we\u2019re going to go through each of the individual steps in the Scale Strategy, and for each one, we\u2019re going to ask you about two things. The first is what myths hold investors back at each stage? And the second will be the tactics that you\u2019ve learned that will help investors take action. So let\u2019s start with number one, the scalable acquisitions and deal analysis by what is the myth here?<\/p>\n
Yeah, so one of the challenges that I often see people get caught up when thinking about buy is they say they\u2019re getting caught up in analysis paralysis, right? That\u2019s the term you hear a lot, and a lot of times they say that they\u2019re not finding deals because they\u2019re so focused on deals. They\u2019re just start looking at deals \u2026 every deal that comes to them, whether it\u2019s a single family or a duplex or a quadplex or a flip or a BRRRR, sometimes people make that mistake. What they really should be doing \u2026 so that\u2019s kind of the wrong way to do it. What they really should be doing is figuring out where they should be investing first.
What city, what market, and why. What neighborhood you\u2019re going to be investing in. So pick the neighborhood first. Pick the ideal property avatar, which is really what your property should look like first before you start looking at deals. That we can eliminate 80% of the deals that don\u2019t even apply to you, right? You\u2019re like, \u201cAll right, this deal may be good for somebody else, but it\u2019s not good for me.\u201d So knowing that property avatar, knowing which property you\u2019re going to buy, helps you hone in on properties that are the right fit for you and helps you move faster and get those properties under contract.<\/p>\n
We learned this from experience. It took us one whole year to get our first BRRRR deal under contract because we were looking in the wrong neighborhood and we were trying to make it work. What we say now is figure out what neighborhood this strategy works in first before you deep dive into finding the right deal. Niti looks at hundreds of deals every week for our community, and what we find is first, if we help them narrow down the neighborhood before we even get them to look at a deal that accelerates the success rate, because you are not looking at deals all over the country, you\u2019re not looking at all different kinds of deals. Now you\u2019ve narrowed it down to the point where you are so focused that it\u2019s very easy to spot a good deal when it comes.<\/p>\n
Absolutely. I call that in long distance real estate investing, a target rich environment, you\u2019re kind of starting with the end in mind. If you\u2019re looking for cash flowing real estate, it\u2019s going to need to be somewhere close to the 1% rule. Looking at luxury real estate isn\u2019t going to make any sense because then you\u2019ll complain that the BRRRR method doesn\u2019t work as opposed to, I\u2019m looking in the wrong area. Before Rob moves this onto the next phase, which is construction of Scale, I just want to ask you too briefly, there is a lot of criticism right now that people say BRRRR doesn\u2019t work, but when I ask them why, they always say, \u201cAfter you pull your money out, it doesn\u2019t cashflow.\u201d
My thought is, well then it wouldn\u2019t cash flow if you just bought it traditionally either. The problem is that you\u2019re looking at properties that don\u2019t hit price to rent ratios that you need. Is that a similar experience for you too, on why you see people struggling with the BRRRR method right now?<\/p>\n
Yeah, and I think of it is also, they don\u2019t understand because a lot of people don\u2019t understand commercial financing well, there\u2019s so many things that you can do, so many different terms that you can get for long-term commercial financing that allows you to maybe \u2026 for example instead of a 30-year fixed you could get a seven-year-<\/p>\n
ARM.<\/p>\n
ARM.<\/p>\n
Yeah.<\/p>\n
Right, and that gives you a slightly lower interest rate. Instead of doing a 25-year amortization, and see if you can find a 30-year amortization. So there\u2019s all these tactics that you can do to increase your cashflow, short term if that\u2019s what your goal is, but here\u2019s what I tell people. Don\u2019t worry about the short term cashflow because guess what, your rent is always going to go up every year. You can increase your rents every year and in the next two or three years when the industries come back down again, because inflation will be down, that\u2019s the idea and then, you can go and refinance and lower your monthly payment, and that drastically increases your cashflow again,<\/p>\n
And you\u2019re going to feel like I\u2019m reading your mind, whoever is saying that their property doesn\u2019t cash flow at the end and bar doesn\u2019t work, it\u2019s because you are looking in a neighborhood where you should be flipping properties, not boring. If you can cash out but not cashflow, that\u2019s a great neighborhood to flip. That\u2019s not a good neighborhood to BRRRR because that\u2019s not a good rental market. You need to figure out what\u2019s a good market where you can cash out and you can cashflow at the same time.<\/p>\n
Yeah, it\u2019s an excellent tip. Okay, so take us through construction that Scales rehab in the BRRRR acronym. What are the myths here and what are the tactics?<\/p>\n
So the biggest myth for rehab, from all the investors that we talk to is people think that they need to do a lot of the work themselves or be the job site or go to Home Depot and pick all the materials and hire their own subcontractors. That\u2019s a big issue that we see.<\/p>\n
The real way to scale a portfolio is figure out how you\u2019re going to scale this and how you\u2019re going to scale your construction part without being at the job site every single day because you cannot be at 10, 20 different properties on a daily basis.<\/p>\n
The key is to find a good general contractor. If you have a good general contractor who has their team and all you are doing is overseeing them, another mistake that we see a lot of investors make when it comes to rehab is that they\u2019ll let \u2026 when they hire a general contractor, they\u2019ll just let the general contractor run the entire project, decide what rehab needs to be done, and almost telling the investor what is going to happen in the rehab. It should be the other way around. As an investor, you should be in complete control of what needs to get rehabbed and why, and we talk about the Goldilocks on, which is what kind of rehab are you going to do to get the maximum amount of ARV without going overboard and over-rehabbing?
As an investor, it\u2019s your job to tell your contractor how to do that and what that\u2019s going to look like.<\/p>\n
And contractors are creatives, right? They\u2019re creatives. They\u2019re going to find creative solutions for whatever dollar amount you give them, but don\u2019t expect them to watch your dollar amounts. Don\u2019t expect them to keep everything on track when it comes to the numbers, you are in charge of that. So, we find that a lot of investors get into this adversarial mindset when it comes to their relationships with their contractor. It\u2019s not about that. It\u2019s about developing the skill of how you\u2019re going to learn to work with that contractor. That\u2019s a whole different skillset that you need to develop as a new investor.<\/p>\n
It\u2019s such a good point. One of the hard lessons I had to learn when I was first dealing with contractors was \u2026 and this isn\u2019t a bad thing, but the goggles that they look at a situation from are wildly different than the goggles that I look at it from, which you want \u2026 if you think about it, you want the contractor to see it differently. They look at the work that needs to be done, whether it\u2019s framing something or repairing plumbing and their goggles, if they\u2019re good, are what\u2019s the right way to do it? I don\u2019t want to cut corners. I don\u2019t want to go the easy route. I don\u2019t want to do what\u2019s easier for me. I want to do it the right way, so this is going to last for 25 years.
Well, often the right way is seven times more expensive than the cheaper way. So when you compound that by the 11 different things you have them doing, they go in there and spend a lot of your money, but they\u2019re not doing it to rip you off it. Their integrity feels like this is the way it should be done. I do things the right way, which is why you have to pay a lot of attention to the numbers that they\u2019re giving you and what they\u2019re saying to do, because frequently, they will explain why it\u2019s so expensive. I will understand their perspective and say, \u201cWell, do we really have to run the plumbing from here all the way to there? Can\u2019t we just take out this one little section and yeah, I guess we could do that. That\u2019d be fine, because the rest of it is okay.\u201d It literally went from a $12,000 job to a $2,500 job because I just asked the right question.
I think so many people are afraid to do that because they assume the contractor is trying to rip them off. The contractor is trying to get them to spend more money. They don\u2019t understand that. The contractor is afraid to propose the cheapest option because it makes them look like they\u2019re the unlicensed person that\u2019s shady and doing it on the side that they all can\u2019t stand. Has that been a similar experience for you two?<\/p>\n
Yeah, if you think about a consultant, you go to a consultant and ask for their services, they\u2019re going to show you all the services they offer. They\u2019re going to give you the breadth of the projects that they can do for you. That doesn\u2019t mean you have to hire them for all of those things. It\u2019s the same thing with a contractor. He\u2019s going to show you all of the things he can do for you for your project. That doesn\u2019t mean you have to do all of them. You have to decide which, and we talk about how \u2026 if you think of your rental as a product, think of the two customers that you\u2019re producing that product for. One is your tenant, of course, that\u2019s your end customer. Make sure it\u2019s a space that\u2019s comfortable that\u2019s appealing to your tenants.
They can pay you the rent that you want, but also, the appraiser, you want to make sure that in the BRRRR strategy, at the end of the day, the amount that the property appraises for is going to determine the cash-out amount that you\u2019re going to get. So you\u2019re also rehabbing it for the appraiser. Now, if you are rehabbing it to the point where you get a super high appraisal, but then you\u2019re not going to cashflow, it\u2019s not going to help your project because now, you don\u2019t have an asset, now you have a liability.<\/p>\n
I think that\u2019s \u2026 to what David, you said earlier, which is anytime somebody goes over a project like you\u2019re early on in the rehab project and your contractor comes and tells you, \u201cHey, this is \u2026 we just found this surprise, this came up,\u201d and surprises always happened on rehab projects. This surprise came up and now, it\u2019s going to cost you 5,000 more dollars to fix that thing. Your immediate reaction shouldn\u2019t be, \u201cOh, okay, that\u2019s fine.\u201d It should be, \u201cOkay, but our budget is still our budget. Where can we find the $5,000 where we can cut down on other things so we can spend it on this?\u201d And those are the kind of conversations that you need to have with your contractor because they\u2019re there to help you.
They\u2019re a part of your team. If you treat them as a part of your team and pick their brains, they can get creative and help you. If you tell them, that\u2019s our end goal, they\u2019ll help you get there.<\/p>\n
Yeah. That makes a lot of sense. So earlier you mentioned thinking about the tenants you\u2019re running to. How does that play into the question you asked at the adding cashflow stage? The adding cashflow stage is the A in the SCALE acronym?<\/p>\n
Yeah. So for adding cashflow, it\u2019s really \u2026 to Palak\u2019s point kind of think back of what the property needs to look like, what\u2019s going to get you the best rent. So this is where you do your comp analysis to say what other properties are renting for in your area. This is \u2026 and you pick a range of, say it\u2019s 15 to 1700 or whatever, it\u2019s renting for per month, properties that are similar to your properties and say, \u201cOkay, if I do this, this, and this, I can rent it for 1700 because that\u2019s what this other property is renting for.\u201d If I don\u2019t put for instance Central Air, maybe I\u2019ll rent it for 1500. That becomes, again, a question that you need to ask your GC and put it on your numbers to see if your budget can support that.
If not, then don\u2019t, and 1500 may still cashflow, right? So what you\u2019re going to to do is make sure you get enough cashflow, but also that your cash-out doesn\u2019t get impacted negatively.<\/p>\n
One of the other myths I think that people have when it comes to that adding cashflow piece is they think that if you become a landlord, you are automatically going to answer those late night tenant phone calls. Almost everyone we talk to says that they\u2019re afraid of getting a plumbing phone call in the middle of the night. Guess what? You can put the right systems and processes in place and build the right team to not have to answer that call and still keep your tenants happy and still get them the service that you want to provide them. So, it\u2019s all about building it like a business and figuring out how you can provide the same level of service without being a part of that process on a day-to-day basis.<\/p>\n
Could you give an example of a system or a process you could put into place for a plumbing issue that happens at night?<\/p>\n
One of the things that we\u2019ve done is we\u2019ve assigned categories to the kind of problems that can occur. It\u2019s green, yellow, red, right? You know that if something is green, it doesn\u2019t have to be addressed immediately. If you know that if it\u2019s yellow, let\u2019s get back to them within 24 hours. You know that if it\u2019s red, then it does need something that needs to be addressed immediately. See, first of all, it\u2019s all about understanding what is an immediate issue versus what\u2019s not because to a tenant, it may seem like it\u2019s all immediate, but it may not be. Then, when it is in fact an immediate issue, you can hire an answering service and you can give them a list of vendors to contact when a specific issue occurs and then, build your \u2026 that\u2019s all about building your team.
How do you build your team so that the right vendor can be contacted in case of an emergency? There are services that will provide emergency contacts. You just have to find them. You have to interview them within your neighborhood and find them.<\/p>\n
To add to that, the best part of all of this, is that you don\u2019t need to have any full-time employees. We have zero full-time employees and that\u2019s \u2026 you can just outsource all of this. There\u2019s services for everything these days. You can hire a contractor, you can hire an agency. There\u2019s just so many options for you as an investor.<\/p>\n
I highly \u2026 if you haven\u2019t already, I highly recommend looking into virtual assistants. They\u2019re amazing addition to your team.<\/p>\n
That\u2019s a great point. I heard someone else talking about that the other day, that they have a ton of property and no employees because they contract out all of the work. The argument against that is usually what you pay a little bit more than if you were just to hire a person. Their case was I save so much time, not training, not dealing with the human being\u2019s drama, not, \u201cI need a day offer today or I can\u2019t work,\u201d or they\u2019re in a bad mood because their team lost in the playoffs, so they give bad service. You sort of avoid a lot of the headaches that come from managing people. I frequently said, if Notorious B.I.G. was still alive, he would\u2019ve written the song, More People, More Problems.
Because as bad as this is to say, it often does come down to people can be the best, but they can also be the worst part of running a business. Whereas we know that we can count on ourselves, and that\u2019s frequently what stops people from scaling, like you said, is they don\u2019t want to have to take on new human beings that they can\u2019t control. Well, if you\u2019re contracting out to some other company that\u2019s already got that problem solved, you can avoid that. So I think that\u2019s really wise counsel. Moving on to the L, leverage and commercial financing. Let\u2019s get straight to the tactics on this phase. What steps should investors take to optimize their financing?<\/p>\n
Number one, we love hard money lending. We think it\u2019s a really good option for new investors to leverage their money upfront. Number one, you can start with 25K and they can lend you the rest of the acquisition construction money. Also, a hard money lender can be like their big brother slash big sister looking over your project because they are putting their money into your project. They\u2019re not going to lend to you unless the numbers actually work. They also don\u2019t give you the funds for construction unless they sent an inspector out who\u2019s going to take a look at the work that\u2019s been done, and then they\u2019re going to give you the funds as you progress through your project.
So now you have another set of eyes and ears looking over your project. So we highly recommend new investors consider hard money for short term. Do you want to get into the long term?<\/p>\n
Yeah, and same thing for the backend, the long term financing, using commercial financing for that as well. This is where that question comes up these days of, \u201cWell, on the conventional side, there\u2019s a 12-month seasoning period.\u201d Well, there is no seasoning period on the commercial side. Maybe some banks will let you do it within six months seasoning. And there\u2019s some banks, you pay a little bit for premium, but they\u2019ll let you refinance even before the six months are up. So there\u2019s so many advantages to using commercial financing both for the front end, short term and for the back end long term. One other additional piece that I would say is that we always tell people always, always buy your investment properties under an LLC and not in your personal name for multiple reasons.
One, it gives you access to commercial financing, which you typically wouldn\u2019t if you bought in your personal name. Two, from a liability perspective. In case lawsuits happen, all your assets are not at stake here. Now, I\u2019m not saying don\u2019t buy a second home in your personal name, that\u2019s fine, but don\u2019t scale with it. Don\u2019t think that I can buy five or six. We did that. That\u2019s how we started off. We bought a few in our personal name and we\u2019re like, \u201cNo, well, let\u2019s refinance it into LLCs.\u201d<\/p>\n
Yeah.<\/p>\n
It\u2019s funny, I\u2019m laughing because you sort of just answered the number one question in real estate. I mean, we talk about YouTube comments, Instagram, \u201cDo I need an LLC?\u201d And people get so hung up on the LLC question and I feel like the answer is usually pretty easy. If it\u2019s a commercial property, you need to buy it under an LLC or if like an investment loan, it\u2019s usually going to go under your LLC and then, if it\u2019s a personal or conventional, that\u2019s typically going to go personal name and then a lot of people just will transfer it over to their LLC. Yeah, I agree. I mean I think \u2026 I\u2019m glad you put a little bit of clarification there because I do think that hangs a lot of people up from both starting and scaling.<\/p>\n
If you\u2019re building a business, why would you do anything in your personal name? This is a business we\u2019re working on, right? You\u2019re building a scalable business, go get your LLC. That\u2019s a simple way to answer, to LLC or not to LLC. That is the problem question, to quote Shakespeare.<\/p>\n
Yeah. You also mentioned something that gets passed over, which is that you\u2019re using commercial lending to buy residential properties. This comes up when people don\u2019t understand that as an option because they say exactly what you said, \u201cWell, there\u2019s a seasoning period. I got to wait six months to get my money out. Now I got to wait 12 months to get my money out. BRRRR doesn\u2019t work, or what do you do once you get to 10 properties?\u201d Now, you can\u2019t get into it, right? And the answer is pretty obvious, is you\u2019re going to get commercial financing at some point when you\u2019re doing this.
What were some of the hurdles that you two had to go through to get comfortable with the fact that you may not get super low rate 30 year fixed rate terms on every single property light people get used to in residential real estate?<\/p>\n
It\u2019s funny. When we first started investing, when we did the first few BRRRRs we got a really high interest rate because at that time it was hard to obtain financing, especially under LLCs. There weren\u2019t enough lenders. So we got interest rates as high as six or 7%.<\/p>\n
Hey, those are dreamy interest rates at this moment, by the way, right?<\/p>\n
It seemed high at that time. Yeah.<\/p>\n
Yeah, and it still seemed high at the time. Now, that the interest rates are a little bit on the high side, it can be a bit of a sticker shock for people.<\/p>\n
Yeah.<\/p>\n
Again, it goes back to there is so many things you can do to bring the interest rates a bit lower, right? Things like getting a higher amortization, maybe even getting a lower LTV, so instead of getting a 75% LTV, if you\u2019re very concerned about cashflow do a 70% LTV, so that you\u2019re going to cashflow a bit higher. There\u2019s so so many things you can do if you understand commercial financing, which is why I\u2019ll say education is important when it comes to financing.<\/p>\n
You always use the word levers, right? Whenever we are doing deal analysis, Niti always talks about, \u201cHey, what are the levers I can pull to make this deal work?\u201d Say we know what the interest rates are right now, and that\u2019s the constraint we already have. Now, what are the other levers that we have the flexibility to pull? For example, can I negotiate harder on that property? Can I do the construction in a smaller amount? So, what you realize is whatever your constraints are, those are your constraints. Where do you have the flexibility? Pull those levers and if the deal works, it works, if it doesn\u2019t, it doesn\u2019t.<\/p>\n
Well, man, I got so many questions, but that\u2019s okay. We\u2019re onto our last one here. It\u2019s called exponential growth, and this is, as it relates to the repeat, you\u2019ve already kind of started to talk us through this concept, but what would you say is the biggest myth with exponential growth, the final letter in the SCALE acronym?<\/p>\n
I think repeat and the exponential growth comes from building systems and processes and teams throughout every step in the BRRRR process. So picking the right neighborhood where you can scale building a deal pipeline that allows deals to come to you that are the right fit for you, having a team in the rehab phase that does all the work for you, that you just oversee, even if you\u2019re investing out of state, maybe hiring a property management company for when you\u2019re renting out properties, or even if you\u2019re renting it yourself, follow the systems and processes and teams. Same thing with when it comes to refinance, having a bank of lenders, having these relationships with the lenders at any time you want to refinance a property, they\u2019re willing to do it for you.
Guess what, the more loans you do with banks, the better terms you get. There was a time when we first started out when we had to bring 25, $30,000 to the table to close on a single family deal, right? Now we bring $12,000 to the table because we have more experience. So, everything scales and all the efficiencies that you get as you scale, exponential growth happens as a result of that. And you want to treat it like a business throughout. There\u2019s different steps that you can take as you\u2019re building your portfolio to focus on the 20% of the things that really give you 80% of the results.
For example, when I\u2019m analyzing a deal and if I find a good deal, guess what? That just made me 10,000 more dollars because I was able to buy it for cheaper. So that\u2019s a $10,000 an hour job for me, as opposed to going to the job site and putting tiles in the bathroom myself, which I could easily outsource.<\/p>\n
We had to learn how to do all of this, and we followed the framework. Can you automate? Can you eliminate? Can you-<\/p>\n
Delegate.<\/p>\n
Can you delegate? Then, if none of that is possible, then you do it and you have to learn what your method of outsourcing is we had to learn it \u2026 I\u2019m an engineer, my method of outsourcing is I have to do it all once for myself to understand it. Then, I build a step-by-step process and then, I outsource it. Niti came into the business and he\u2019s like, \u201cWhy would you ever learn to do something that you\u2019re going to outsource anyway?\u201d I had a light bulb moment and now, we\u2019ve changed the way we outsource things. If we\u2019re going to outsource it, just outsource it. And that saves so much time that we can focus now consistently on the business itself as opposed to trying to learn all these things that we were going to outsource to begin with.<\/p>\n
That\u2019s a great tip right there. I think that\u2019s an understated tip because I\u2019ll tell you, I am the \u2026 my worst enemy on delegation because I like to master something before I pass it off. Recently, I\u2019ve kind of come to terms with the fact that it\u2019s such a relief to delegate things out. I just delegated out something yesterday that was a billing and invoicing thing. I\u2019m always behind on billing and I just delegated it out to my payroll person. It took me an hour to create the loom and to write out the process and sending it to them, and then I was like, \u201cOh my gosh, I will never have to deal with this again.\u201d And it\u2019s such a relief, so I think you\u2019re 100% right. Delegate away, if it\u2019s something that you have no intention on ever doing ever again, just give it away. There\u2019s nothing wrong with that.<\/p>\n
Just wasted time, right? Write that down. If it\u2019s something you\u2019re going to eventually delegate, don\u2019t bother learning how to do it.<\/p>\n
Yeah.<\/p>\n
Learn how to delegate.<\/p>\n
And it\u2019s so hard to take your spouse\u2019s advice on the way you\u2019ve been running your business.<\/p>\n
It\u2019s the greatest tip of all.<\/p>\n
It\u2019s easy for me to take advice. I just do what she tells me.<\/p>\n
That is a great \u2026 well, it worked with your suit today. You\u2019re looking fresh, my man.<\/p>\n
You are looking fresh, man.<\/p>\n
That\u2019s actually such a powerful statement. It\u2019s so hard to take advice from your spouse or because I\u2019m not married, but I remember what it was like with my parents, where they would tell you to do something and you don\u2019t know anything. Then, my dad\u2019s friend would tell me the exact same thing. I\u2019m like, \u201cThat guy is really smart. I\u2019m going to listen to exactly what he just said.\u201d So now when I have to talk to one of my employees, I stop talking to them. I go to another employee and I say, \u201cWill you tell so-and-so that he would do really well if he would do this instead?\u201d And I just sneak it in there like a piece of broccoli inside the macaroni and cheese to a three-year-old, so they don\u2019t know what I\u2019m feeding him.<\/p>\n
This is kind of like whenever you say a joke, but I say it louder and then everyone laughs and then-<\/p>\n
And they laugh, because they think Rob is funny and they think that I\u2019m scary. That\u2019s exactly right. They\u2019re like, when David says it, he\u2019s a cop and it scares me, but Rob is fun and handsome looking like a reverse cinnamon roll over there. I love everything that he says. Yes, that\u2019s exactly right. Rob has become my microphone.<\/p>\n
We actually had to learn how to listen to each other from a business coach. We were talking to a business coach and then, I said something like \u2026 I said, we have a rule now, that I have this shiny object thing, I want to run after a lot of different projects, but we have a rule now if Niti doesn\u2019t approve, I\u2019m not allowed to take on any projects because I get myself in trouble. The business coach could see things way more clearly than either of us and he said, \u201cWell, yeah, he\u2019s strategy in the business.\u201d And I was like, \u201cOh, I guess you are right. I should give my spouse credit for what they\u2019re amazing at.\u201d<\/p>\n
We call that veto power. It\u2019s good to have someone in your life that has veto power. That gives you the freedom to have crazy, amazing creative ideas without restricting yourself, and you don\u2019t have to worry about if it\u2019s a good idea or not. You just run with it. This is how Brandon Turner and I often operate it. He would just have the craziest stuff and he had complete freedom to think that way, but then, I had veto power. I go like, \u201cDude, that\u2019s insane. We\u2019re not doing it or oh, there might be something onto that. Let\u2019s go deeper and see where you go.\u201d When you try to measure yourself and be creative, your brain fights. It goes start, stop, start, stop, and you start to get nuts.
So I love that idea of somebody is the idea person, the innovator, somebody else who is the strategy person or the executor that brings some balance to the force, especially when it\u2019s in a relationship. I love seeing a couple like you two working together through the challenges of a relationship and business, but making it work as a single entity with different strengths. I mean, that\u2019s amazing. There\u2019s so many takeaways from today\u2019s show. I love what you\u2019ve done with the BRRRR method where you\u2019ve actually systemized how it can be scaled. I love some of the advice that you gave when it comes to contractors and using them as consultants. I love the idea of cash out or cash flow.
It could go either way. So when you\u2019re buying your properties, make sure it works for each. Rob, what were some of your favorite parts?<\/p>\n
You know what I\u2019m like really starting to close a loop on this delegation thing, but I think just like you said, hearing someone else who\u2019s done it much better than me, if I clicked and that\u2019s it, I\u2019m delegating everything. So moving on from this episode, you might see someone else behind the mic, but just know that behind the scenes, I\u2019m feeding him all of the crispy knowledge nuggets that you\u2019re going to be hearing.<\/p>\n
It\u2019s the AI version of Rob.<\/p>\n
Looks like we created a monster here.<\/p>\n
That\u2019s exactly right. We don\u2019t even know if this is Rob that we\u2019re talking to. Maybe that\u2019s why his tan looks so good. It\u2019s actually a filter.<\/p>\n
AI. I am ChatGPT.<\/p>\n
All right. Well, thank you very much Niti and Palak. It was wonderful having you back on the show and hearing how your business has doubled since 2020. So if you want your business to double, go check out their book, where can people find it?<\/p>\n
So, it\u2019s biggerpockets.com\/arebook.<\/p>\n
All right. You heard that folks, head over to www.biggerpockets.com\/are, for Accelerate Your real estate book, ARE book. Since you\u2019re a loyal listener of the podcast and we love you, which is why you should go give us a five star review anywhere that you listen to your podcast, we are going to give you a coupon to get a discount for free. The show coupon for being a listener is ARE778 because this is episode 778. So go get your coupon and buy your book at the same time and learn how you can double your portfolio just like this couple did. It was so great to see you two again, where can people find out more about you?<\/p>\n
You can find me on Instagram @openspaceswomen.<\/p>\n
And you can find me on Instagram @rewealthblueprint.<\/p>\n
Maybe you\u2019re going to be greenprint at some point. Rob, how about you?<\/p>\n
You can find me at Robuilt on YouTube and on Instagram. What about you?<\/p>\n
You can find me @davidgreene24 on Instagram, Facebook, Twitter, all of it or davidgreene24.com, if you\u2019re old-fashioned and like websites. All right. I\u2019m going to let you guys get out of here because I\u2019m sure you\u2019ve got more deals to put together and rehabs to oversee. This is David Greene for Rob \u201cThe Reverse Cinnamon Roll\u201d Abasolo, signing off.<\/p>\n