Real estate investing can feel complicated, even when you’re doing well. There’s usually a time when every investor hits an invisible wall and moving on to the next deal, partnership, or business can feel like a slog. When this happens, it’s a good idea to lean on experienced investors who have been through these waves of success, failure, and stagnation.Brandon Turner, host of The BiggerPockets Podcast, is back with live one-on-one coaching calls with three different investors, all experiencing some form of investor paralysis. Brandon talks to Mike who’s having trouble letting go of control on rehabs, Stephanie who’s had past success but can’t pick her next move, and Sterling who wants to build organic relationships with sellers.These three investors are in three completely different parts of their real estate investing journey, but all share some of the same headaches. Brandon walks each of them through their predicaments while illuminating some paths forward that could yield them more money, less headache, and a larger portfolio.
Brandon:This is the BiggerPockets Podcast show 536.
Stephanie:Now I’m stuck feeling like I was back when I was just sitting on those three properties. I want to be doing all this stuff and I want to be growing. And I don’t know where to go, I don’t know what’s next. And so I just to make progress on the real estate investing side, but of course have all these things going and would love your advice on how to figure that out.
Brandon:What’s going on [inaudible 00:00:38], its Brandon Turner, host of the BiggerPockets Podcast here with another, I don’t really call these consulting consultation, Q&A, ask Brandon episode here out of the BiggerPockets Podcast. And as you notice, there’s no David Greene today. It’s just me. And I’m going to be just answering some questions from three real estate investors. Now we did this a little while ago and it was a huge hit. People seem to love it so we’re going to do it again. And maybe we’ll do it again in the future. I just sit down and spend 15 to 20 minutes talking with investors, like today we got three investors. One’s fairly new, one’s the middle of the road and one’s a bit farther on their journey and just see if I can help them get to the next level.And so we talk today a lot about focus, we talk today about picking your niche, your crystal clear criteria, we’ll go into things like how do you provide value to sellers? How do you build a follow up machine to sellers going off market? We’ll talk about some of that stuff today and more so hang tight for all of that. I think it’s time to get into our conversations with the three real estate investors from the BiggerPockets community. First, we’re going to talk with Mike, second, we’ll talk with Stephanie and third we’ll end with Sterling. So let’s start this thing off talking with Mike. Mike, welcome to the show, man. How you doing?
Mike:I’m doing very good. Thank you, Brandon. Thank you for having me here.
Brandon:Yeah, for sure, man. Well, give us a little update on who you are and where you’re at and where you’re at physically and in your real estate journey.
Mike:Physically I’m Northeast Tennessee and my real estate journey, I’m still very new. I’ve completed one deal. It was a triplex and it was super simple. It was practically turnkey.
Mike:The problem that I’m having is my second one, is what we’ll get into, which is the second triplex this one.
Brandon:All right. So this second deal, it’s actually a pretty common, people who can do it, there’s common phrase in real estate, right? Nobody does one deal. If you do one, you can do more. But it’s also a very common thing is people are like, well, I could figure out the first deal, like how to get there, I don’t know how to figure out the second. Eventually they all figure it out. Everyone figures it eventually, but it’s a little bit tough sometimes. So let’s go through some of the reasons for that. Where are you stuck on?
Mike:My biggest issue with it is letting go of control. The first one, like I said, it was pretty much turnkey. I don’t have any issues with doing the work or finding the deals, it’s letting it go to let the contractors do what they’re supposed to. I know more than what most people probably do. I have a degree in engineering that focuses on construction. And especially now that prices are gone sky high and contractors are backed way up, I’m like, “Oh, I’ll just do it. I’ll just do it. I’ll just do it.” And I know that’s not scalable. I can justify it every way logically in my mind that there is no reason that I should do this. There’s none whatsoever. I could get done faster, start having income. I’ve read books on who, not how. I don’t have with letting some people do some things, like the electrical, the HVAC. I have no problem with that. I don’t want to touch that stuff at all.But things like the framing and the drywall and the painting and the carpet and the tile or not carpet, but the floor, I’m having an issue letting those things go. When somebody says oh, it’s $4,000 to paint, I know I don’t have the time to paint the whole unit. It’s going to cost me a whole nother month of holding costs so I’m like, I should just pay the money.So I guess for you, my biggest question is how do I let go of the things that I know how to do myself? I know you’ve experienced that. You said you had to just basically throw away your tools. I don’t think I’m there yet because I’m at the very beginning of my journey.
Mike:But at some point I’m going to have to step back and go, whoa, I can’t do this, but I can’t logically or realistically get it through my [inaudible 00:04:34]
Brandon:Yeah. No, I hear you. Yeah, I did. I had to throw away most of my tools to give away some, sell some and throw away a whole lot of stuff just to get me to stop doing it. And I still fall into that a little bit. So let ask you a couple questions. First of all, how much of this is, would you say a money issue when you’re faced with, let’s say going to some drywall and you’re like, all right, I need to redrywall this wall here or this unit, or I need to redo the flooring in here. Is it, “Man, I am not paying some contactor $5,000 when I could do this in a week?” How much does that play into it versus, “Man, I love doing drywall. I love doing the flooring and this would make me super happy to go spend time doing this this week.” Did any of those come into play there?
Mike:Financially? No. I’ve gotten to a point right now where I could pay somebody to do it, but I don’t have the time to do it, but I can’t. It’s like, “Oh, should I give away $3,000? But it’ll take me a whole extra month or…” So I could. I could afford it. It’s not the issue. The issue is just me simply being, I guess too much of a penny pincher to let that go because I know I could do it.
Brandon:Yeah. So this is where… Yeah, that’s where that question focuses is it, is it a question of… Some people are like, I do the work because I love doing the work, but most of us, it’s not that way. Most of it’s that it’s almost seems unfair or it feels not right to pay somebody to do something when it’s so much cheaper to do it ourselves. Is that a huge piece of this? Like it’s just so much cheaper to do it yourself?
Mike:Yes. And especially when I enjoy it and I know it’s cheaper.
Brandon:And it’ll get done better, I’m assuming.
Mike:Yeah. But in the long run of the business, I know that I have to let it go. There’s no way I can get to 30 units or a 100 units doing everyone by myself. It’s not feasible.
Brandon:Yeah, that’s true. That said I’ll throw a couple thoughts that come to mind. First of all, unlike maybe some in the real estate world and even maybe as opposed to what I’ve said in the past, I don’t think it’s the world’s worst thing to do your own work on a few projects. I don’t know if you’re at a scalable point now where it makes a lot of sense. I mean, yes, you will go slower by doing it that way. Yes, you will build wealth a little bit slower, but over the course of a 20 year period, if you spent a couple years doing more of your own work to make sure the first few were solid and you save money and it goes done right, I just want to relieve that guilt from you that you’re doing something wrong. You’re not doing anything wrong. There is no right or wrong way to do this. There is fast and there is slower. And I would argue that that is a slower method, but at the same time you’re also saving money and so maybe it allows you to grow a little bit faster.So anyway, first of all, just relieve any guilt you might have there. There is no right way. The way you’re doing it is probably fine. Most importantly is do you feel like you’re doing a thing that makes you fulfilled? Is it exciting? Is it not robbing time from your family? I don’t know if you have family or kids or anything like that, but do you feel good doing that work and you just feel like because of the podcast or because of people on the podcast or because of me, you feel like you should outsource that? How does that sit with you?
Mike:I do feel a little guilty because I am taking time from my wife and my little boy and my twin girls, taking time from them. But in the back of my mind in some weird way, I’m justifying it because I’m older and I’m thinking if I get this done now and work hard on it, the next few years, I can spend more time with them later. But I’m giving away years or days right now that I will know I will never get back. So it’s hard.
Brandon:Yeah. No, I hear you. The other thing that comes to mind here is something I had to really had to come out in my life is that so much of my identity was wrapped in the fact that I was a technician or I was a guy who did the job, I did the work. Part of that was to grow up with the feeling like a real man changes his own oil. A real man changes his own plumbing or fixes the plumbing when it leaks. A real man does the painting because that’s what a real man does. So there’s these identity like things that were in my life anyway, this might not be the case for you, but I needed to do that work because that’s what people do. And so I had to give up, first of all, that identity and the second identity he gave up was this idea that I am the technician, or I use the analogy in my head of a general or like a war. Right there there are privates out there, there are lieutenants and there are generals. There’s probably other things in there as well.But when I would approach doing things, myself, drywall, flooring, paint, whatever I might have loved to do it. It was fun and I don’t regret it. Again there’s no right or wrong way here. But when I look at it, the reason I defaulted to doing that and the reason that I would say things like, well, it’s just way cheaper for me to do the work is because my identity was that of a private in a war. I was the guy with the gun on jumping out of the boat on Normandy beach. I wasn’t the guy… In my head, I wasn’t the general back in the tent, looking over the maps. And maybe that’s the self confidence issue, probably was, but also just a lack of experience. I wasn’t experienced in being the general.But when I made that shift in my head that no, I am… In fact, I have a performance coach and adjacent [inaudible 00:09:36] and we talk about this all the time. He even uses that terminology to me all the time saying, “Is this what the general would do when I start getting stuck back into being a private?” He’s like, “Is this what the general would do?” And I’m like, “No, what would a general do?” And I stepped into that identity. It seems almost silly, like you imagine Patton or Eisenhower or whatever, grabbing this little gun and [inaudible 00:09:55] on the beach. No, he’s just going to get shot and then the war’s over because the leader isn’t there to do it anymore.So changing that identity to, oh yeah, I am the general, I am the president, I am the leader of this organization, in my opinion anyway, it makes doing their own work almost silly because you start seeing yourself in a whole new light that you would never be that piece. Does that resonate at all with you?
Mike:Yeah. And that’s part of what my training was when I got my engineering degree was to be project manager. I have the skills to do that. I know how to read a Gantt chart. I know how to arrange all this stuff, but in my mind I’m still thinking like a private, even though I have the skill set to act like a general.
Mike:Yeah. I totally just got that. I totally just got that when you said that. It just, I’ve always been thinking I should be doing it, so I can point at it like an ego thing and go, “Yeah, I built that.”
Brandon:I built that.
Mike:“I built that.”
Brandon:Yeah. Because your identity, just like mine for a long time and maybe it’s just some degree still is, is built in that idea that my value or a lot of my value in this is being able to point to that thing that I did.And so what I’ve changed, I guess I’ve been working at changing is today, I get a lot of my self-esteem and my ego and I don’t mean that in the bad sense of the term, but I get a lot of my positive self-worth out of the fact that I’m no longer pointing towards the stairs that I built or the wall that I built, I’m pointing towards the machine that I built. that’s why I talk a lot about Open Door Capital and the machine that I built there. That’s the thing to be proud of because that’s what a general’s proud of. A general’s not proud of, well maybe is a little bit, but of like, “Hey, I went and shot one person or I went and like stormed this one little section.” It’s like, “No, I just won the war. I just took the beach. I just took country.” And so it’s just shifting what you’re proud of.And there’s a million little things, obviously again, you’ve read the stuff. There’s a dollar per hour attached to everything we do and logically you get all that stuff, which is 90% of people don’t even get that. All they’re thinking about is the money. But yeah, I really think so much of it is wrapped in that identity.So I would encourage you to find physical ways. This is just something I learned from my coach a long time ago, but find physical ways to remind yourself that you are the general. I don’t know whether you find a war hat you get on Etsy or eBay, some kind of general, I even know what, what a general wears. More like the little stars or the bars or whatever, they’re on their… Five star general. If you put five stars on your wall, that would be an example. Like in your office, it’s just five stars. And that’s just a reminder every single day of your new identity, that you are shifting your identity. This is who I was. It served me well then. I needed to be the private at that point of my career because I wasn’t ready to be the general, but now I’m the general. And then you’re always asking, is this what the general would do? Is this what the leader would do? Is this what the CEO would do? Is that what Jack Welch would do? Is that what a president would do? And anyway, that seems to help me quite a bit. It’s an ongoing battle, it’s an everyday thing, but then you really excited about the machine you’re building, about the war that you versus the individual battles.
Mike:Yeah. I need to focus on [inaudible 00:12:59]. Now, I do know that you’re well read. Do you have any books that you would recommend?
Brandon:On that topic?
Mike:Because I have read and I say that, in [inaudible 00:13:07], I have listened to audible. Nearly every single book that you have ever suggested multiple times was during what I do for a living. I’m able to listen to audio books, 12 hours a day.
Brandon:Ah, nice. Yeah.
Mike:So is there any books out there on shifting your identity?
Brandon:The one David Greene and I are going to write eventually. David Greene and I are literally putting together notes every time we talk like, “Oh yeah, let’s put this in the book.” So David and I are working on this book eventually. In the means time, I mean, I’ve read books on identity, but none stand out to me as like the book on the subject on this topic. I would say you’ve probably read it, but 80/20 Sales and Marketing by Perry Marshall. Have you read that one?
Mike:That is in my wishlist on audible. And I will download that today.
Brandon:That made such an impact on me in terms of again, the logical side but also just the more the theoretical side of the dollar per hour, how everything we do has a dollar attached to it. But it really made that clear to me that the 80/20 rule, which of course is 20% of what you do gives you 80% of the results or 80% of the results come from 20% of the inputs of anything. And how he applies that concept to people and the rules that we play within our organization, I thought was just game changing.And so essentially, it goes to the argument and I said this a few weeks ago, I think even here on the podcast where I said, I know a lot of people get really upset with CEOs of companies making $10,000 an hour or 10,000 times more than their $15 an hour employees and people are like, that’s unfair. And the truth is and they’re like, “Well, is that person really working 10,000 times harder than their $15 an hour employee?” And I’m like, “Yeah. I mean, not harder, but they are 10,000 times more effective than their $15 an hour employee.” And that’s just the truth of it, because the 80/20 rule, it’s like 80/20 is true but then also 80% of the 20% is also the most effective of that group. And then 80% of that 20% and then 80% of that 20%.So at the end of the day one person in organization can be the equivalent effectiveness of a 100 or a 1,000 or 10,000. And again, it doesn’t mean it’s intelligence or the amount of hours they work, but that’s what we want to get you to is the general is worth a 100,000 privates. Again, it’s not something that the world wants to hear necessarily, because we all want to believe that we’re all equal and equal value, which we are, but in terms of effectiveness in getting something accomplished, the general more important. So yeah, 80/20 Sales and Marketing was an awesome one for that.
Mike:All right. Thank you.
Brandon:Cool man. Well, hope that helps.
Mike:It does extremely. It has opened my eyes.
Brandon:Okay, good. Last thing I’ll say is this, and I say this all the time to people, but I would definitely look into getting with a performance coach of some kind, like a business performance coach. If you can afford it, I mean, it’s not always cheap. You might pay $5,000 or $10,000 a year for a performance coach, but somebody that can continually remind you because it’s like going to church. Why do people go to church? It’s to remind themselves, no matter what religion, it’s to remind themselves of what they believe every week and to reinforce that worldview every single week because it just goes away over time.Performance coaching is like church for the mindset. It’s reminds you, “Oh yeah, I’m the general. Oh I’ve not been acting that way the last couple weeks. I need to get into that.” So if you can find a good performance coach, that’s one of those things that you pay $5,000 or $10,000 a year and it’s almost impossible not to have a payoff, a 100 fold over the course of your life. So that’d be my final recommendation there.
Mike:Thank you very much, Brandon.
Brandon:All right. Good luck to you. Thank you Mike. Have a good one.
Mike:All right. You too. Bye-bye.
Brandon:Bye. All right, moving on. We are going to bring in or I’m going to bring in, I guess I’m always talking to the we, bring in Stephanie. So Stephanie, welcome to the BiggerPockets Podcast. How you doing?
Stephanie:I’m doing great. I’m so excited to be here.
Brandon:Well, awesome. Well give us update, just like I asked Mike, where are you at physically and where are you at in your real estate?
Stephanie:So I’m physically in Denver, Colorado and I started investing in 2008. I had always wanted to be a real estate investor and have cashflow, but I really didn’t know too much about it. And was just divorced, raising too small children and 2008 came and I got an opportunity. So I bought my first rental and then I bought two more. And then I sat on those because it was super stressful, being a landlord, not knowing what I was doing. And I just sat on those things and then in 2014, I really wanted to dive in and do more. So I took my equity and left Denver and went into three other markets, still with single families, small multi-family, and went up to 10 rentals.And then in 2018, my kids were leaving the nest. I’m like, I need to go bigger. I need to really do this thing. So I learned about apartment investing. I hired a coach. I am a GP on several syndication deals and that’s great, but there were aspects that wasn’t clicking. And so the pandemic came and I’m like, “I’m going to buy a franchise.” So I bought a business. Anyway, now I’m stuck feeling like I was back when I was just sitting on those three properties. I want to be doing all this stuff and I want to be growing. And I don’t know where to go, I don’t know what’s next and so I just want to make progress on the real estate investing side, but of course have all these things going and would love your advice on how to figure that out.
Brandon:Yeah. So the summary gist is like you’ve had a lot of success and you’re trying to figure out what’s the next level and how do you get there? Is that a good summary?
Brandon:All right. Yeah. I feel like that’s where I was when I was at that, I tell the story a lot, but I was at that conference [inaudible 00:18:51] as best ever conference in Denver. And I’m there and speaking and I was like, “Man, I have been resting on my successes and on my laurels too long here, I need to take this to the next level. I’ve just been kind of sitting for a number of years buying one property here and there and doing the podcast.” And that’s when I really doubled down and started Open Door Capital. So couple questions on that. First of all, the business that you bought the franchise, what is that thing? Just out of curiosity.
Stephanie:It’s a children’s martial arts franchise really focused-
Brandon:Oh, no way.
Stephanie:… on personal development and character building for children. And that’s with my son. That’s like a legacy project and he’s managing that.
Brandon:Okay. So it’s not like a day to day thing that’s taking a lot of your time?
Brandon:Okay. Do you want to do more of that style of things like franchise up or you really just want to do real estate? You want to get into the next level of real estate?
Stephanie:No, really the business was to fund more real estate. The idea is as a family, we’re a family like real estate. My son’s very into it and it’s building our legacy and just having more income streams to further that. So definitely figuring out the next step in real estate investing is my goal.
Brandon:Okay. Right now, are you actively buying things or are you literally just, you haven’t done anything in a while?
Stephanie:I haven’t done anything since 2019.
Stephanie:Since actually the pandemic. I was getting ready to make my next move and then didn’t.
Brandon:Okay. And then maybe last question. We’ll see [inaudible 00:20:13] just keep asking you questions for a little bit, but where are your other rentals at like right now? Where does your portfolio look like?
Stephanie:Texas, Dallas Fort Worth area, Kansas City, Missouri and Memphis, Tennessee.
Brandon:Okay. Good cash flow markets. And do you want to continue to build there or do you not care where you…
Stephanie:Depending on what I do, yeah. If it’s something that I’m more active in, I have property managers, I have things in place there. So that seems like it would make sense to leverage what I already have in those markets.
Brandon:Okay. And why haven’t you yet? Why have you not… And maybe the question is like, what are you waiting for? What stopped you up until this point? Is it just, I don’t know where the market’s going or I’m not really sure the next step or I don’t even know where to go? What’s the holdup, do you think?
Stephanie:I feel like my holdup is shiny object syndrome. I’m I jump to, okay, next I’m going to do small, the midsize apartments with just a few JV people and then we’re going to rent them out, short term rental. And then I’m like, whoa, wait, I really want mobile home parks. And oh, but the demographic is people are getting older. Maybe I should do that. And those are all a lot of learning for me to take on. I haven’t done some of those things before.
Brandon:Yeah. Yeah I know. I know exactly how you feel because I was right there too, for years. I was just going like, there’s so many things to do and this is really important and no, this could be really good too. And today when people ask why I got into mobile home parks heavy and like why I chose that and then a lot of other people did because I did, I think. The funny thing is like the only, the best answer I have is the reason I chose it is because I chose it. The reason I went into it is because I picked it. And so at some level, it’s like that quote from the book Traction, it says it’s more important that you decide than what you decide. And I had to finally like internalize that.Inaction wasn’t leading me anywhere. So A, inaction leads me nowhere. So I had to do something. B, it just doesn’t really matter that much what I do because I am smart enough and capable enough and you are smart enough and you are capable enough and driven enough that you’re going to succeed in any of them. It just doesn’t matter whatsoever. You could be like, “I’m going to do vacation rentals,” and you’d kill it at that. Can you imagine that life where you’re a 100% clear on where you’re going and you’re like, this is what I’m building and this is where I’m going. And everyone’s like, “Oh my gosh. Stephanie’s going there.” Could you not succeed at that? You’d kill it, right? You know, you’d kill it. And so it’s really just a matter of just picking.And I don’t know why we, because I’m in the boat too, it’s so hard to pick that, to pick a thing because I think it’s FOMO. If I pick the wrong thing or… It’s like part shiny object in part I don’t want to just pigeonhole myself into one thing. I go into vacation rentals and then, oh man, I should have gotten sell storage. That would’ve been fun. Or I did sell storage and oh man, I should have done senior care because that’s a growing demographic. Does that play? Does that resonate in you as well?
Stephanie:Definitely. Definitely. FOMO. I kind of want to do it all. It all sounds so fun. And then of course the fear part like, well this would be apartments are saturated, all the things that go on in your head.
Brandon:Yeah. And it’s true apartments are saturated, but so is mobile home park, so self storage, it’s all a very… In fact buying just normal houses and normal rentals in any market, it’s all so saturated and crazy right now and there’s really no sign that is going to get any better. I mean, we may see a crash at some point, but we may not. This may just continue until we’re just the equal to year up where everything’s just super expensive. So because of that, we can’t really obviously make that decision one way or another.So again, it just goes back to just saying, agreeing in your head, I am going to make a decision. Now I can put a date in my calendar, and I like doing this. Whenever I have a big decision to make and I’ve been waffling on it, I like to take a date on my calendar two weeks out and like circle it and put on your Google Calendar on your wall calendar and say decision day. That’s the day I’m going to make a decision. I have to know 100% clear on that day, what I’m going to do. And I talk a lot about like new book, the Multifamily Millionaire, [inaudible 00:24:06] what the crystal clear criteria. It’s like your location, condition, price range, property type, and profitability. What do I need to make it a good deal?If you can define those five things by decision day and just acknowledge the fact that A, it doesn’t matter, B, you can always correct course or add on things later, but C, knowing that you have to become an expert today. That’s the biggest thing I’ve noticed in the past three years of real estate. This is probably the biggest shift I’ve seen in the last three years is you’re no longer able to be an amateur and do okay in real estate anymore. Maybe at the small level, you go buy a duplex, you go buy a single family house, you go flip a house. Maybe you can be as someone amateur and try and get lucky once or twice, but you’re competing against just such talent today. That the only way to win is to go a mile deep.And then once you’re a mile deep, like we want to mile deep in Open Door Capital on mobile home parks. We bought over 2,500 units now. Boughten, is boughten a word? Let me go boughten. All right, we’ve boughten.
Stephanie:Go for it.
Brandon:We’ve bought over 2,500 units and now we’re going apartments as well. Because now we are a mile deep. I think we are the smartest mobile home park investor in the country. And of course I’m sure other country companies are saying the same thing, but I’m pretty confident. We know more than 99.9% of the world are mobile home parks. Now we are going to apartments. And eventually once we get a mile deep on that and we’re really, really good at, we’re going to probably go into sell storage. Or what I like better, I love the idea of the senior housing. I think like you pointed out… The demographic trends are moving that direction. That’s what Kiyosaki was talking about the other day when we interviewed him. But so is sell storage. That’s also moving in the positive direction. So is Section 8 stuff. I mean, I think the government’s just going to be like printing out money to give to landlords over the next 20 years. So Section 8 could be a great option or just find a way. Private public partnerships, huge.There’s all these trends happening right now that you can’t screw it up. I said a little bit ago to Mike, I said there’s no right way. You go do one, you’ll never know you chose the wrong one. That’s probably the thing that I tell myself a lot and maybe the most when I’m trying to make that hard decision is you’ll never know you chose the wrong option. You’ll go with one and then you’ll do awesome at it and you’ll be like, “Oh yeah, I’m glad I chose this one.” You’re not going to look back and be like, “Oh man, I only made $18 million instead of $25 million. I could have… Because you don’t know. You don’t know how much you would’ve made in the other niche. So does that make sense? The idea of just putting them down on your calendar saying that’s decision day. I’m going to do whatever research I need to between now and then, but something tells me you probably already have done the research enough that you could make the choice. It’s more of just, you haven’t sat down to make the choice. Does that resonate?
Stephanie:Yeah. I think the crucial part for me with what you said is go a mile deep where instead I’m skipping a lot, like going so far deep with all of them. So yeah, I’ll research a little on one aspect and then one asset in one market and I’ll just get stuck there instead of going deep. So that’s very helpful.
Brandon:Well, good. Yeah, I mean, I really think you need to go a mile deep. And by a mile deep, you also get really good at certain niches within that. Let’s say you were like, okay, I’m going to do senior housing. Okay, great. But let’s go even deeper than that. What’s the need for senior housing? What can you be the best in the entire country at doing? For example, when I think would be really fun, I’ve said this on the podcast before and somebody will try it and then tell me that I either worked or didn’t, but, or I’ll try someday, but I want to build 20 little single family houses in a horseshoe with a little center in the middle, a shuffle ball court or shuffle, is that what’s called? Shuffle ball. Shuffle.
Stephanie:I don’t know, whatever.
Brandon:Yeah. I don’t know. Whatever. Old people’s sport. And a little like room for them to gather for birthday parties and 20 single family homes, all in a little U shaped in like middle America. Put it in the middle of Ohio in some medium size town and like all single level, no stairs, walks right in. Everything’s like just Asian place. I love this idea and I would love to build that someday and try that out. There’s probably somebody out there doing it, but could let’s say you [inaudible 00:28:04] yeah, I’m going to do that thing, and this is just an example, hypothetical. You’re like, I’m going to learn everything I can about this idea of putting a bunch of single family houses on one little property and then renting them all out.And then you might find, oh, that doesn’t work. The numbers just don’t make sense there. Well, let’s tweak it and try it this way. And then let’s tweak it this way. And eventually with all your little tests and tweaks, eventually you’re going to find the math that works out in this super unique thing that nobody else is really doing that you can just be the best at. And then you just pour heavy into that because you’re a mile deep, not just in the niche, but in that sub niche within it. Then it’s just rinse and repeat. Then you’re just building this machine that can just build a ton of these things or whatever it is that you end up doing, you’re just building a machine. So yeah, mile deep. It’s huge.And then again, remind yourself, you got a long life ahead of you. You’re going to live another a 100 years probably. With the rate that technology’s improving, we’re all going to live until forever, unless we get hit by a bus. And so you got time. This whole next five years you could spend going a mile deep and then next five years go a mile deep on something else or add in a thing to go mile deep on. I mean, I’ve only been in mobile home bars for two years and I feel like we are a mile deep. We’re like 10 miles deep. And so it scales pretty quickly.One more question to throw at you from the focus part. I mean, besides the focus part, do you feel like you have a good team yet? Do you plan to go with alone? Do you’ve got partners? Do you have, the ability right now to go big into one of these things in terms of [inaudible 00:29:28]?
Stephanie:Yes and no. I have a networks and close people that I’ve built relationships with in real estate investing. We’re all doing different things and we talk about coming together on something, but what that thing is, is out there. So I feel like if I could come up with some unique thing, like you described, I could bring together a team or go… I feel like I could do that.
Brandon:Yeah. What I found to be so true in my own life and other people’s lives is this idea that when you are confident and you are moving in a direction, people naturally want to surround themselves with people who are moving in and that are confident. So as soon as you’re like, I am the, whatever the small, the 20 to 50 unit apartment complex [inaudible 00:30:14] queen of America. And that’s what I do and I do it better than anybody else. And this is where I’m going and I got my vision and three years we’re going to own a 1,000 units. And we’re going to syndicate to be able to do that. This is where I’m headed and it’s broadcasted. Everyone’s like, “Yeah, go follow Stephanie. Let’s do it, Stephanie, because you know where you’re going.” The world craves that leadership that just has the confidence to start moving.And I could totally say that with you is like, you’d just be like, people just flock to your side to want to be a part of that. And then raising money becomes easier because everyone’s like, “Oh, that person knows where they’re going. I can invest with them because they’re confident.” And yeah, that is just fun. It’s just fun. Because you just in total alignment with your vision and your goals and what you’re doing and your team and you just feel crystal clear and it’s the best feeling to just be in that alignment. So yeah, you got this.
Stephanie:I love it.
Brandon:I really feel good about that.
Stephanie:Thank you. Thank you so much.
Brandon:Yeah, Stephanie. Yeah. I want to see you do it and then you got to come on the BiggerPockets Podcast and tell us like, “Hey, I did it and this is what happened.” So a year from that.
Stephanie:Don’t be mad if I do your thing.
Brandon:Yeah. Do it, do it, do it. I love it. Well Stephanie, thank you so much. Any final questions before I let you out of here?
Stephanie:No, I appreciate all your time. Thank you.
Brandon:All right. Thanks Stephanie. All right. Moving right along everyone. Hope you’re enjoying today’s show so far. Real quick before we bring in Sterling and I will say this, if you’ve not yet left a rating, a review for the BiggerPockets Podcast, wherever you listen to shows that helps out a lot so please do so. All right, Sterling and welcome to this show, man. How you doing?
Sterling:Good man. Thanks for having me.
Brandon:Yeah. So let’s hear your story. I mean, where are you at physically and where are you at in your real estate?
Sterling:So I’m from, well, I’m in Dayton, Ohio right now with real estate. I’ve been doing it for a little less than two years to 10 doors with a partner. And then I got a primary residence that we have value add and moving forward from there, we’ll probably sell it after two years.
Brandon:Okay. And you got a full-time job I’m assuming then in there?
Sterling:Yeah. So right after this all started, I ended up starting in LLC, just basically construction, rehabs, things like that, that tie in with what I was doing, which was adding value to small multifamily.
Brandon:Okay. That makes sense. And you own that company and you do you work day to day or do you have a bunch of employees or what’s that like?
Sterling:So sole proprietorship, like one and a half full time guys. That’s the best way to word it. That makes sense.
Brandon:All right. And where are you headed in your real estate? What can I help you with today?
Sterling:Yeah. So, I’m still working towards getting more smaller multi families, but then I’m trying to make the leap basically that you guys have talked about going from level two to four and not necessarily slowly building up or whatever. I’m still taking the time to learn. I tracking all the metrics I can where my hours are going because I currently manage our properties. And making that leap from two, four units in a duplex, into a say 24 unit apartment, that’s a value add situation. Trying to get my foundation in place, financially, experience, partners, the things that will help me be taken more serious in that route.I’m starting to find off market apartments, so contacting the owners directly at that level, I can still pretty much find out, just a Google search, basically, find out who they are, where they are, give them a phone call. But one of the things that I think and this is my question for you, or this is my question, as far as building those relationships that will lead to opportunities. The last example I can give you is a 24 unit, got to talk to the owner, it’s been under contract for a little while. Super great guy. There’s no place that I could offer value to him. So I just thanked him for his time. I’ll check back in, in a couple weeks or a month, however long. But as far as building those relationships, creating relationships in that manner, if you had any advice there?
Brandon:Yeah. So when you say you couldn’t really add value, I mean, did he just not want to sell? Is that the idea he just didn’t want to sell?
Sterling:He was already under contract.
Sterling:So he’s letting go of a good chunk of his portfolio. He is selling three more at the beginning of next year’s tax year. So I definitely want to keep that open.
Brandon:Yeah. So you want to keep relationship with this guy, but also just in general other people and try to just keep that up. Is that the goal?
Brandon:Yeah. So the first thing I would say is to not rely on and not that you are, but not rely on remembering and oh yeah, I got to do that and that kind of stuff. It’s to so systematize outreach and off market interactions that it becomes almost just a machine in itself. And so like if people saw the level of tracking that we do in terms of broker outreach and off market outreach and wholesaler outreach, we don’t forget that stuff because every three weeks, it pops back up. Here’s the nine brokers you need to reach out to this week. Here’s the five owners that we’re talking with in this area we need to talk to this week. And this is what the outreach looks like and this is where we’re at. And we keep track of notes with each of the conversations like, “Oh yeah, how’s Jill doing, like your wife? Is she through the… Whatever yet?And so we are very meticulous with our tracking and with our systems around that outreach. And I think that most people and myself included for years just left it to what I could remember doing and what I think I’ll do later versus sit down for an hour with pen and paper and you will have a nice system worked out. The first thing we do is this. A week later, we follow up with this. [inaudible 00:35:47] two weeks after that we send them a letter. Three weeks after that, we send them a little trinket in the mail, like some stupid little, I don’t know frying pan that’s really cool. Kind of gift [inaudible 00:35:56] style. And then three weeks after that we do this other thing.And now we’ve got, basically they call it in internet marketing, they call it a drip campaign. If you join an email list, you get a drip campaign, which means every week or every two weeks, there’s these are the emails you get every week for like a year. And so it looks like you’re just getting these random emails from this company, but really you’re on a drip. You’re very much… It’s just dripping like an IV drip to you every couple weeks.We just took that same concept and applied it to off market and to just relationship building in general. And it’s amazing the effect that it has because they don’t know that you’re doing that. They think it’s just completely random. I mean, even Steve Sims, we interviewed him, he is out there with the book, Bluefishing, he would talk about if he’s at a hotel, he’ll tear a page out of a, whatever, a magazine at the hotel and like write on it, “Hey, I saw this picture, I thought of you,” and then send it in the mail. Like little things like that.Again, that was off the top of his head. If you can find ways to systematize those organic “outreach moments,” people just think that’s cool and then you’re so much more likely to get a deal from one of those people. And then also you’re able to go way wider. How do you get 500 of those people on your list? And every week you’re hitting them with new stuff and new phone calls and new conversations? That’s how you build that pipeline that keeps going. Does that sound like something you can do or does that sound helpful at all?
Brandon:Yeah. What are [inaudible 00:37:20] have you got from me? I mean, anything else I can help you address on there?
Brandon:Yeah. Go ahead.
Sterling:This is kind of a different direction, but-
Sterling:Okay. So for me, specifically, I haven’t been able to technically afford any of the four properties that I own or have ownership of. I came in at a really low income level and then it hasn’t necessarily [inaudible 00:37:39] the profits are getting touched. We’re trying to tap into compound effect, things like that. So I’ve had… The more experience, the more things I can do, the more stuff I’m able to take on. I have the ability to increase my income, but I don’t see it beating, increasing my investing in real estate. Some of the things that I’m focusing on is obviously I have to make, for me, it’s $4,000 a month to survive. But too far past that, that’s where I’m choosing to spend my time trying to [inaudible 00:38:14] an apartment complex, three duplexes or these other things. And I actively working towards that fits my goals. It fits the direction I’m heading in. I just wanted to get your input on that.
Brandon:Yeah. Couple thoughts. I don’t know if this quite addresses it, but let me ask this way. How many hours a week would you say you put into the construction side of your business, of your life? How many hours a week do you work on that?
Brandon:Okay. And so it sounds there’s this belief in there that says if I wanted to make more than $4,000 a month, I would have to put in more than the 30 hours that I’m currently doing. Does that sound like a logical progression there?
Sterling:If we leave out the value add real estate investing side of it? Yes.
Brandon:Okay. So I guess I would, first of all, push back on that thought a little bit and start asking better question of something like, well, how do I work half those hours? How do I work 15 hours a week in the construction side, but bring in $30,000 a month or $20,000 a month. That’s a fun question to start answering. How would you do that? And I don’t have an answer for you right now, but I guarantee you there’s construction guys out there that are working 15 hours a week that are making $20,000 a month profit, that they can then dump into real estate. So now you get the best of both worlds.The reason I bring that up is because oftentimes I think we get stuck in this pattern of where we’re raised, dollar per hour. We make money for the amount hours we put in. So if we want to make more money, we got to put in more hours. But when we change the paradigm entirely and we start looking at it like lateral thinking of, wait, how do I work fewer hours, but make more money, we start asking that question repeatedly. And you start taking time out of your week, every week, maybe a couple hours every week. You’re just literally sitting in a room in silence with no phone and all you got is a notebook and a pen and you just keep asking that question to yourself is like, how do I work half as much and make five times more? Or how do I make more by working less? And your brain will start to come up with answers to that, which gives you the best of both worlds. So now you’re making 10, 15, 20 a month in profit and you’ve got all this time now to go off to the real estate, which now you can fund the real estate yourself.So I guess that’s just one way I’d answer that or to look at that is it’s totally doable. And I feel like I’m talking to myself 10 years ago or 15 years ago when I started my own construction company where I just didn’t think that way. I just thought like, this is what I make and this is how I do it. But had I been asking myself better questions and had I been thinking of myself as the general? And like we talked about earlier today with Mike and the idea of like, oh no, I wouldn’t even consider doing my own work. I mean, because that’s not what a general would do. I would never. All I do is attract talent and let my team do what they do. I don’t know, I mean like right now, if I were to, I don’t know if this is going to be helpful or not, but I’ll just spitball here.If I were to today start a construction company and I knew I didn’t want to work more than 10 hours a week at this construction company, the first thing I would do is hire an amazing marketing person who’s really good at getting direct mail marketing and ads and all this stuff out there. I would hire a salesperson right away. And I know we have [inaudible 00:41:13] how do you afford this stuff? And I can get to that. But I’d hire a sales person who [inaudible 00:41:17] all the calls and does that. I hire a foreman to oversee the jobs and to do bids, and then I’d hire a crew of let’s say, I don’t know, whatever, two, three, four people.So total I’ve got, let’s say six people on staff and are going to be costing me somewhere in the range of $50,000 per month in salaries. And it feels like an excessive amount of money until you ask the question if you had a person full time doing marketing, full time doing like the sales presentations and somebody to oversee the whole construction site and do the work, your only job is to meet you’re and then probably an integrator in there too somewhere, your only job would meet, or my only job would be to meet once a week with my each department head, if I was integrator and make sure they’ve got metrics and goals. And for example, the marketing person would have a very clear goal on how many leads they need to track. The sales person would have a number of goals of conversions. The foreman would have number of hours and profitability and then the workers would all have their goals as well. Could you not make $50,000, a $100,000 dollars a month in profit? Totally doable. It’s just a different way of thinking. Right? I would never even think of approaching a construction company anymore of I got to go out and buy a hammer so I can go build a construction company. It just wouldn’t have even occurred to me because I just, I’m not there. Does that help at all?
Sterling:Yeah. A 100%. That definitely helps. And it was definitely either or lens I was looking through.
Brandon:Yeah, if we can shift that to how do I give both and how do I change my role, my identity to go full circle here to doing that, yeah, that’s definitely a big piece of it. And then there’s one more thing I was going to bring up too. Oh yeah. Another idea just to throw at you, if you’re good at the construction side of things, I wonder if there isn’t a marketing angle here and I’m just spitballing here, but where you reached out… Let’s say you had a list of 500 multifamily property owners in your area that were… I mean, this might take a few weeks to compile this list and to drive by the properties or whatever you got to do to identify. If you had a list of a 100 or 200 or 500, these are the properties I want to acquire in this area. And then you marketed to those people specifically and called it at cost construction. And you literally sell them on this idea of like, listen, I own a construction company. I charge a lot of money to people. I will not charge you a dime of profit. I will it at cost. Whatever I’m paying my employees and my insurance and all that cost, I will do any construction job for you at cost.Why would we do that? Because I want to build relationships with real estate investors in this area and that’s what I’m doing. And that’s the value I can provide. Because now you’re not losing anything other than your time, which really you’re not the one doing the work. You’d hire people to do it. If somebody came to me and was like, “I will do your work at cost just to build a relationship with you, Brandon,” I’d be like, “Yes. Yeah, I will hire you right now.”And so anyway, it might be an interesting way for you to provide value to all these people at a large scale. So when they are ready to sell, of course, they’re going to go to you because they feel like they owe you. And it almost creates this reciprocity thing there. So anyway, I don’t know if that would work or not, but that I think would be a really fun test is to even start with 20 people or 10 peoples is like “Hey, we’ll do work at cost.” So I don’t know. How’s that feel?
Sterling:Yeah, I like that a lot.
Brandon:Right. Well, good luck.
Sterling:I don’t know if it’s exactly that, but that’s yeah, I beautiful.
Brandon:There’s something there. This is where the idea of sitting in a room for two hours just comes in so handy. Or I love to like I have a masseuse from the four seasons, like hotel comes to my house once a week and literally like 90 minute long. I did it yesterday. It’s best 90 minutes of my week. It is not in relaxing massage. She’s a therapist, so she’s hurting me. It’s like a tattoo the whole time. But it’s 90 minutes where you can just think. No phone, no nothing. And I just thinking, that’s when things like that come up.And the first idea, like that idea is probably dumb. But you start playing with it, you start marinating on it and then it starts… And that is a $10,000 per hour task. Those times where you’re thinking through those ideas. Because if even just one of them worked out and led to a huge deal down the road that made you a $1 million, it’s huge. So yeah. Make sure you’re taking that time every week to just think.
Brandon:All right, dude. Thank you, Sterling. Hope you have a great week and good luck to you, man. You got this. Excited to see where you head to and end up. So good luck.
Brandon:Thank you. All right, everyone. Thanks so much for joining today. Hope you enjoyed today’s episode of the podcast. And if, like I said earlier, if you didn’t write your review yet for the show, please do so. It really helps that a lot. Make sure you subscribe to our YouTube channel at BiggerPockets. You can follow BiggerPockets all over social media. You can follow me personally @beardybrandon over on in Instagram or TikTok and you can follow David Greene. Of course, he’s not here today, but you can follow David Greene @davidgreene24. That’s the number two four at the end of his name. Green with an E. So thanks everyone for joining us today and hope you have a fantastic week. For biggerpockets.com, my name is Brandon Turner. Signing off.
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. Thanks! We really appreciate it!