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Speaker 1: Welcome to Hout of Money. I'm Joel and I am Matt,

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Speaker 1: and today we're talking real estate investing in a murky

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Speaker 1: market with Dave Meyer.

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Speaker 2: That's right, and not just investing in real estate, but

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Speaker 2: we'll touch on some topics for the first time buyers

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Speaker 2: out there who are looking for a good, old fashioned home.

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Speaker 2: But Joel investment properties, man, like, this isn't something that

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Speaker 2: we talk about as often as we used to. I

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Speaker 2: should say, like I'm thinking about a decade ago, like

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Speaker 2: rental properties. It was like the only thing on our minds,

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Speaker 2: the only thing we were talking about. In fact, like

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Speaker 2: when we first batted around the idea of starting in

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Speaker 2: the podcast, we even thought about making it solely about

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Speaker 2: real estate. But that being said, a lot has happened

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Speaker 2: since then. The housing market, it's definitely not what it

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Speaker 2: used to be. There's many reasons for that, and so

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Speaker 2: the question that we're asking today is does it make

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Speaker 2: sense to continue investing in real estate? That is the

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Speaker 2: topic of conversation with our guest today, Dave Meyer. And

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Speaker 2: Dave is a longtime investor. He is the head of

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Speaker 2: real estate over at Bigger Pockets, as well as host

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Speaker 2: of multiple podcasts over at Bigger Pockets, which you definitely

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Speaker 2: need to check out if you want to take real

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Speaker 2: estate investing. Seriously, if you've never heard of Bigger Pockets,

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Speaker 2: you need to check it out. But Dave, we're excited

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Speaker 2: to have you join us today on the podcast.

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Speaker 3: Thank you, Thank you for having me. I'm super excited

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Speaker 3: to be here.

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Speaker 1: Of course, Yes, Dave, Matt and I we like to

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Speaker 1: drink beer. We know, actually you live in a place

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Speaker 1: where there's a lot of good beer, and Matt and

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Speaker 1: I we are even while we're drinking expensive craft beer,

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Speaker 1: we're still doing the smart thing. We're saving investing for

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Speaker 1: our futures. What do you like to supoort John in

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Speaker 1: the here?

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Speaker 2: Now? What's your craft beer equivalent?

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Speaker 4: Oh, it's definitely taking nice vacations. I have a weak

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Speaker 4: spot for a nice hotel. And I do live in

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Speaker 4: Europe and so I get to travel quite a lot,

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Speaker 4: and I do it with reckless abandon.

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Speaker 1: I like that reckless abandon Well, it makes all the

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Speaker 1: sense in the world too.

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Speaker 2: Like once, it's like when you when you hear about

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Speaker 2: folks who do a study abroad and they're like, all right,

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Speaker 2: I'm going to do a semester in Cortona with my

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Speaker 2: art program, and like you got to spend every single

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Speaker 2: week in traveling basically when it's just like a a

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Speaker 2: thirty minute flight or an hour flight and you're basically

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Speaker 2: on the other side of other side of Europe. So

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Speaker 2: is the travel Is that a large a big reason

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Speaker 2: why maybe you've continued to kind of kick the cane

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Speaker 2: down the road as to you know, versus coming back stateside.

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Speaker 3: Yeah, just for some contexts.

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Speaker 4: I moved to Europe because my wife was transferred here

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Speaker 4: for work five years ago, and that was part of

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Speaker 4: the appeal.

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Speaker 3: It seemed like.

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Speaker 4: A really cool opportunity to live in a new culture.

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Speaker 4: But also being in Europe you have such great access

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Speaker 4: to unbelievable destinations. And the first two years we were

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Speaker 4: here is actually COVID and so we didn't get to

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Speaker 4: travel very much. And we've stayed so that we could

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Speaker 4: tick quite a few places off our bucket list, which has.

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Speaker 3: Been a lot of fun.

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Speaker 4: But I will say, you know, people say the Netherlands

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Speaker 4: Belgium has great beer. I will tell you America has

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Speaker 4: better beer. And I know I won't say that loudly

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Speaker 4: outside of my home, but I miss America.

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Speaker 1: Yeah, your neighbors don't let them hear you say that.

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Speaker 1: But I think you're right, like all this fighting words, Drue,

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Speaker 1: although I think per capita we have more great beer.

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Speaker 1: But some of the beer in the in Belgium specifically

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Speaker 1: is some of the best in the world.

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Speaker 3: That is true. But like your average brewery.

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Speaker 4: That you just go to in the US is so good,

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Speaker 4: and here a lot of places you go it's just

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Speaker 4: Heineken and Amstell. You know, it's hard to find craft beer.

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Speaker 4: I think that's the problem, your typical euro pills exactly.

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Speaker 2: Yeah, that is something that's pretty great. And we don't

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Speaker 2: talk in depth about craft beer half another show. But

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Speaker 2: the fact that pretty much any like small little town

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Speaker 2: that you go to now has their own local craft

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Speaker 2: brewery that is putting out pretty decent beer when it

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Speaker 2: didn't used to be the case a decade ago. What

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Speaker 2: are the other things that has happened over the past

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Speaker 2: decade that I certainly welcome.

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Speaker 1: Quick shout out by the way, for you, Dave, but

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Speaker 1: for anybody else who visits Amsterdam. There's a beer store

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Speaker 1: called Debier Cooning, which I think means the beer king.

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Speaker 1: It does the you and oh.

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Speaker 3: My god, gotch accent, by the way.

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Speaker 2: Yeah, he totally nailed that I should move there.

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Speaker 1: But seriously, the best beer shop maybe I've ever been

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Speaker 1: to in my entire life.

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Speaker 4: So good, Really, I don't I've never been. I am

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Speaker 4: going to look this up right now or when we

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Speaker 4: get off.

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Speaker 2: Is that where you did the beer trade? Yes? I

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Speaker 2: brought some US beers, brought him.

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Speaker 1: Dozens of beers overseas to trade with it, and I

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Speaker 1: brought tons of great Belgian and Netherlands beers back with me.

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Speaker 1: And it was like the best thing I've ever done

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Speaker 1: in my life besides Mary and my wife.

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Speaker 2: Probably.

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Speaker 4: Wow, that's pretty good.

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Speaker 3: Yeah, I am whoa. It's not far from where I live.

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Speaker 1: Oh, just let me know what you think of that place.

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Speaker 3: I mean, I'm looking it up right now.

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Speaker 4: It is an eleven minute bike ride from here.

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Speaker 2: Oh yeah, Oh my gosh. Could you imagine text me

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Speaker 2: pictures later from there and buy some n for yourself

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Speaker 2: if you send us some in the But I don't

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Speaker 2: have to.

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Speaker 3: You don't have to, Dave, just text me your address.

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Speaker 2: It's not about real estate investing, because fine, you are dude,

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Speaker 2: like you are all about it. I feel like you're

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Speaker 2: a real estate investing Ninja, But how did you originally

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Speaker 2: get into investing in real estate in the first place.

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Speaker 4: I sort of fell into real estate investing. I was

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Speaker 4: living in Denver right after college. I had moved there

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Speaker 4: for fun and was waiting tables and trying to sort

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Speaker 4: of figure out what I wanted to do with my career,

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Speaker 4: and was skiing a lot with this guy who wound

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Speaker 4: up just buying a rental property with his girlfriend at

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Speaker 4: the time and was making all this money, and I

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Speaker 4: sort of just got jealous and was thinking that if

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Speaker 4: this guy, who was good dude, not my smartest friend

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Speaker 4: of all time, I was like, if this guy could

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Speaker 4: do it, I feel like I could do it. And

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Speaker 4: luckily I had had some internships in college where I

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Speaker 4: learned financial modeling, so I felt pretty confident in the

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Speaker 4: analytics deal analysis kind of side of it. And I

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Speaker 4: had had a job cold calling for a commercial real

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Speaker 4: estate broker who agreed to help me, and so I

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Speaker 4: kind of just backed into it. It was never like

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Speaker 4: I was in the fire movement or I analyzed all

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Speaker 4: of these different asset classes and chose real estate. It

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Speaker 4: just I wanted to make some extra money, and real

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Speaker 4: estate seemed like a good way to do it. Given

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Speaker 4: this was twenty ten, so it was a little bit

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Speaker 4: easier to find cash flowing deals.

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Speaker 3: But we can get into how I pulled it off.

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Speaker 2: Yeah, well, okay, I.

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Speaker 1: Would love to hear how you pulled off your first deal.

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Speaker 1: But I'm also curious too, why real estate over the

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Speaker 1: stock market or starting a more traditional business. And when

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Speaker 1: you're talking to people who listen to bigger pockets, why

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Speaker 1: did they often choose real estate? Would you say over

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Speaker 1: some of those other options that maybe are less labor intensive.

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Speaker 4: There's something about real estate and the tangibility. Is that

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Speaker 4: a word, tangibleness? I don't know, the fact that it's

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Speaker 4: tangible really touch up. Yeah, actually I.

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Speaker 2: Have.

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Speaker 3: It was weird, No, I don't.

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Speaker 4: I never was super interested in the stock market because

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Speaker 4: I just didn't understand it. Whereas real estate, one of

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Speaker 4: the great benefits to it is that it's actually quite

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Speaker 4: a simple business. The revenue is very simple, the expenses

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Speaker 4: are limited. You're not reinventing something, and all the operations,

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Speaker 4: all of the strategy or things.

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Speaker 3: That you can borrow from someone.

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Speaker 4: You don't need to be some stock picking genius or

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Speaker 4: anything to succeed in real estate, and that simplicity really

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Speaker 4: appealed to me, especially when I was young, and I

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Speaker 4: had always been somewhat entrepreneurial. I had started a few

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Speaker 4: businesses in high school and college, just little things, but

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Speaker 4: I liked the idea of just figuring something out for myself,

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Speaker 4: and real estate just seemed to be prime for that.

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Speaker 4: And this was in twenty ten, and so things were

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Speaker 4: pretty cheap and finding cash flow was relatively easy, and

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Speaker 4: it felt so tangible to me that I could buy

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Speaker 4: this deal and even with pretty conservative underwriting, could increase

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Speaker 4: my income by two or three hundred dollars a month,

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Speaker 4: which at the time was really meaningful to me.

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Speaker 2: So one of the things you just said was that

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Speaker 2: it was simple and straightforward. I don't know how closely

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Speaker 2: you monitor like the real estate social media space, but

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Speaker 2: I feel like, if you, it's just like this sort

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Speaker 2: of endless rabbit trail. And I feel like there are

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Speaker 2: a whole lot of different pitches as to how really

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Speaker 2: investing in real estate is being presented. But I'm curious,

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Speaker 2: will A do you kind of keep up with different

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Speaker 2: influencers over there?

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Speaker 3: Oh?

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Speaker 4: I doah, Okay, some might even call me a real

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Speaker 4: estate influencer, which is cringey.

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Speaker 3: But I'm on Insta.

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Speaker 1: But in a more forthcoming way, in a less like

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Speaker 1: hype and yeah, like the hype and the I feel

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Speaker 1: like folks are getting steered wrong. Like what do you

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Speaker 1: see as like the predominant message that you think a

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Speaker 1: lot of folks might be hearing as opposed to what's

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Speaker 1: actually accurate out there.

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Speaker 4: Yeah, there's there's so much to that. But I think

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Speaker 4: that I'll just be real with you guys. I think

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Speaker 4: that a lot of influencers make real estate more complicated,

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Speaker 4: seem more complicated than it is, because that's their business model.

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Speaker 4: They rely on convincing people that they have some secret

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Speaker 4: that only they know, and that being part of their

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Speaker 4: mastermind or their group is going to unlock some secret

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Speaker 4: thing for them, and that you could should pay them

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Speaker 4: five or ten thousand dollars to be a part of

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Speaker 4: this community. The reality is that on bigger pockets, we

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Speaker 4: give almost all this information away for free. We just

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Speaker 4: have a different business model, or a media business, and

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Speaker 4: so we thrive and we can be honest because our

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Speaker 4: whole business depends on us giving good advice, not convincing

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Speaker 4: people that we know someone something that no one else knows,

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Speaker 4: and so I would just you know, not all of

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Speaker 4: them are bad. I have a lot of friends who

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Speaker 4: have courses that are very reputable and really really good.

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Speaker 4: I would just caution people who are wanting to get

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Speaker 4: into real life state investing about just like, think about

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Speaker 4: people's motives and why they're saying the things that they're saying.

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Speaker 4: And in almost all cases, especially if you're new, you

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Speaker 4: can learn everything you need to about real estate for free.

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Speaker 1: Yeah, that's We had a question not too long ago

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Speaker 1: on the show where a listener was considering signing up

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Speaker 1: for I want to forget exactly how much the real

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Speaker 1: estate course costs, but I'm pretty sure was five figures,

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Speaker 1: like ten grand plus, and he hadn't really read a

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Speaker 1: book or listen to a podcast or like some of

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Speaker 1: the basic things that you would advise someone to do

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Speaker 1: before you even consider signing up for something more in

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Speaker 1: depth that costs that much money. Go for the low

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Speaker 1: hanging fruit first at least, and honestly, for most people,

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Speaker 1: that's that's probably all you need. I'm curious, Dave. You

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Speaker 1: wrote a book called Start with Strategy, and you talk

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Speaker 1: about how people like not only need to consider how

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Speaker 1: much money they have to invest, but what they want

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Speaker 1: out of becoming a real estate investor?

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Speaker 2: So what do you mean by that?

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Speaker 3: Real estate?

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Speaker 4: The thing I love about it is how flexible it

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Speaker 4: is and how you can really design a real estate

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Speaker 4: portfolio around pretty much any goal that you can imagine.

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Speaker 4: So for some people, if you want to be a tycoon,

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Speaker 4: you can do that, and those courses might teach you

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Speaker 4: how to be a tycoon. I think for most people

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Speaker 4: that I encounter, which is many hundreds or thousands of

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Speaker 4: real estate investors all the time, are people who just

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Speaker 4: are normal and who have full time jobs and who

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Speaker 4: want to either augment their income, they want to provide

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Speaker 4: some hedge against a job that may be uncertain or volatile,

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Speaker 4: or they want to move up their retirement by five

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Speaker 4: years or a decade, all of which are possible through

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Speaker 4: real estate. Some people want to quit their jobs in

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Speaker 4: five years, some people in twenty, and knowing what your

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Speaker 4: overall and long term objective is will allow you to

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Speaker 4: create a portfolio that's right for you. And to me,

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Speaker 4: that's been one of the most single eye opening and

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Speaker 4: biggest unlocks for me in real estate investing, because I

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Speaker 4: at first sort of felt bad about myself in my

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Speaker 4: portfolio because you go on social media and I don't

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Speaker 4: have hundreds of doors and I don't aspire to start

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Speaker 4: a fund anytime soon. I mean, I'll never say never,

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Speaker 4: but I have absolutely no plans to do that. You're

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Speaker 4: setting your sites too low, Dave.

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Speaker 3: Yeah, but like, yeah, maybe I am. And I'm from

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Speaker 3: with that. No, But I think that.

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Speaker 4: Was sort of what changed my whole real estate investing world,

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Speaker 4: is realizing like I don't want that, and that's okay.

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Speaker 4: I have a great, very profitable real estate investing portfolio

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Speaker 4: because I figured out why I was doing this in

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Speaker 4: the first place and sort of worked backwards to design

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Speaker 4: a portfolio that is designed to meet that specific goal.

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Speaker 2: I love that it can cater to your lifestyle and

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Speaker 2: you can find that portfolio that's right for you. And

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Speaker 2: what you said there about building it backwards, like figuring

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Speaker 2: out what you want the end to look like and

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Speaker 2: be like, okay, how can I get there? But for

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Speaker 2: some people, they do want to be you know, you

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Speaker 2: said that like you had, you know, no desire to

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Speaker 2: be like a tycoon, Like there might be some folks

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Speaker 2: out there who want to be real estate moguls. And

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Speaker 2: so how do you help those folks to think about

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Speaker 2: how rapidly to acquire some of these additional properties as

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Speaker 2: they are looking to ram things up. Well, like, would

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Speaker 2: you agree with the advice out there that that says, hey,

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Speaker 2: let's just find this strategy and this approach that works

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Speaker 2: and this repeat it as quickly as possible.

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Speaker 4: Yeah, I think you can do that if you want

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Speaker 4: to scale really quickly. I do recommend people to really

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Speaker 4: try and master one element of real estate, and I

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Speaker 4: think there's two different ways to do that. You can

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Speaker 4: either get really good at one type of deal, so

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Speaker 4: maybe be great at flipping or multifamily or self storage

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Speaker 4: or whatever. The other way you could do it is

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Speaker 4: get really good at a specific market. So for you guys,

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Speaker 4: for example, just mastering the Atlanta market, and then if

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Speaker 4: you're super good at that physical you know, geographic location,

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Speaker 4: then you can flip and do multi family and short

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Speaker 4: term rentals all within it because you understand the market

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Speaker 4: so well. I do just think that it's important for

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Speaker 4: people to realize that scaling quickly and risk go hand

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Speaker 4: in hand. And so if you want to scale very quickly, well,

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Speaker 4: there's nothing wrong with that. You're going to have to

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Speaker 4: take on more risk. That might be in the form

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Speaker 4: of riskier deals. It might be using more leverage, it

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Speaker 4: might be taking on partners that you.

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Speaker 3: Don't know as well. All those are fine.

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Speaker 4: They just come with risk, and if you're comfortable with that, great,

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Speaker 4: But if you're not, you're going to have to move slower.

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Speaker 4: And these are just some of the trade offs that

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Speaker 4: you need to think through as you build out your portfolio.

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Speaker 1: So the three of us, Dave, I don't know how

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Speaker 1: old you are, but I think we're probably in that

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Speaker 1: same sphere about when we started real estate investing, and

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Speaker 1: we were investing at a time where finding deals was

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Speaker 1: not terribly difficult, So it kind of felt like shooting

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Speaker 1: fish in a barrel, essentially. Finding that makes retrospect.

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Speaker 2: I mean at the time it didn't, but definitely in retrospect,

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Speaker 2: it certainly feels like they were just everywhere.

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Speaker 1: If I could go share and turn back time, like

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Speaker 1: I would go buy a whole lot more properties in

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Speaker 1: eleven right, So yes, I don't know, how would you

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Speaker 1: say buying real estate has changed, and how does that

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Speaker 1: change your advice to investors?

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Speaker 3: It has changed.

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Speaker 4: It was very easy to find deals in twenty ten,

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Speaker 4: and the flip side though, is very difficult to find loans.

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Speaker 4: It was very difficult to find financing back then, and

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Speaker 4: so I think there are always trade offs. There was

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Speaker 4: I think there was like this sweet spot at like

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Speaker 4: twenty thirteen twenty fourteen where the credit markets were a

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Speaker 4: little better and deals were still easy to find. To me,

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Speaker 4: that was like the dream time. But I still think

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Speaker 4: there are great deals in real estate investing. I do

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Speaker 4: believe the challenge. There are real challenges with it right

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Speaker 4: now too. I just think it's all about expectations and

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Speaker 4: goals because for me, I've actually bought more deals this

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Speaker 4: year than I have in the previous couple of years combined.

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Speaker 2: Wow.

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Speaker 4: And it's because I just recognize that my goal is

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Speaker 4: to have rental properties that are going to be hitting

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Speaker 4: their stride and are going to supplement my income when

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Speaker 4: I want to retire, which I think is like ten

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Speaker 4: or fifteen years from now. And so I'm looking at

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Speaker 4: the real estate market and saying, I don't think prices

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Speaker 4: are really going to go down, and yes, interest rates

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Speaker 4: aren't great, but there's not a lot of competition right now,

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Speaker 4: and I'm able to buy deals that I think have

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Speaker 4: good intrinsic value at a price that I don't think

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Speaker 4: I'm going to see again.

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Speaker 3: And does that mean I'm going.

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Speaker 4: To make a huge profit this year. Probably not. But

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Speaker 4: I only buy cash shlowing deals, so I'm not going

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Speaker 4: to buy something that's going to bleed me. And I

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Speaker 4: do think that, you know, over the next couple of years,

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Speaker 4: this is going to turn into a very strong investment.

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Speaker 4: And I can do that because I take this long view.

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Speaker 4: You not everyone is going to do that, and not

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Speaker 4: you know, there's a lot of rhetoric in the social

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Speaker 4: media space in this industry about quitting your job in

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Speaker 4: two years or three years. That's just not going to happen,

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Speaker 4: to be honest, like unless you're starting with ten million bucks,

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Speaker 4: Like I just don't think that's going to happen for

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Speaker 4: most people right now. And I don't think that's what

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Speaker 4: most people want. And I think resetting of expectations to say, hey,

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Speaker 4: real estate is you want to work hard, you know,

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Speaker 4: or work at this for ten to fifteen years, you're

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Speaker 4: going to be in a phenomenal place. And I don't

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Speaker 4: think that has changed at all over the last ten

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Speaker 4: you know, since when I started, or right now, real

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Speaker 4: estate's always been a long game, and yeah, it's a

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Speaker 4: little bit harder to find, you know, have the confidence

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Speaker 4: in that right now, But I firmly believe that's still true.

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Speaker 2: Yeah, you said there's still a lot of opportunities to

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Speaker 2: be had. I think I've heard you describe what's happening

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Speaker 2: now as a stalemate. And so it seems like we've

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Speaker 2: got fewer buyers, we've got fewer sellers. Why, like, why

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Speaker 2: have Can you kind of explain the state of the

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Speaker 2: market and why things have kind of slowed down?

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Speaker 4: Yeah, it's a very strange time in the real estate market,

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Speaker 4: especially if you don't spend all day looking at data

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Speaker 4: like I do. But basically what's happened is during COVID

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Speaker 4: we had a huge influx of buyers to the market.

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Speaker 4: This is due to low interest rates, which makes things

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Speaker 4: more affordable, but also due to demographics. This is often overlooked,

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Speaker 4: but in you know, the millennials, now the largest generation

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Speaker 4: of the United States, hit their peak home buying age

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Speaker 4: in about twenty twenty, and so there's this big demographic

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Speaker 4: tailwent a lot of people want to buy homes right now.

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Speaker 4: When interest rates went up, we start to see that

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Speaker 4: affordability leave the market, and so that part of demand

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Speaker 4: has declined considerably. Millions and literally millions of people have

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Speaker 4: been priced out.

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Speaker 3: Of the market.

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Speaker 4: But what and that part seems obvious, right, That is

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Speaker 4: a really intuitive thing. Prices went up, less people can

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Speaker 4: afford to buy homes, demand goes down. The reffusing part,

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Speaker 4: at least on the surface, is why prices haven't decline

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Speaker 4: that right, because you think demand's gone, prices should go down.

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Speaker 4: But what has happened is that low affordability caused by

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Speaker 4: high interest rates, has also caused supply to go down,

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Speaker 4: meaning that people don't want to sell their homes. And

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Speaker 4: this is one of these unique characteristics about the housing

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Speaker 4: market because seventy percent of people who sell their home

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Speaker 4: go on to buy another home. So when buying conditions

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Speaker 4: decline like they have, it doesn't just hurt demand, but

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Speaker 4: it sort of weirdly impacts supply. And so we've seen

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Speaker 4: just a slow down in the total market where there's

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Speaker 4: just not a lot of buyers. There's not a lot

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Speaker 4: of sellers. But as of right now in November of

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Speaker 4: twenty twenty four, even with high interest rates, there are

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Speaker 4: more buyers than there are sellers. And prices are still

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Speaker 4: going up modestly, and we can talk about forecasts into

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Speaker 4: the future, but that's the best summer I can give

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Speaker 4: quickly of where we stand today.

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Speaker 2: No, that's I think that's helpful.

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Speaker 1: We want to talk mostly about real estate investing here,

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Speaker 1: but I do want to ask a question about a

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Speaker 1: lot of our listeners who want to buy and we

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Speaker 1: get I feel like someone asked me the question, what

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Speaker 1: are you hearing the most on the How the Money

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Speaker 1: podcast right now? I said, if you had to boil

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Speaker 1: it down to one thing, it's a lot of people

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Speaker 1: who want to buy a home and aren't sure whether

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Speaker 1: or not it makes sense, or whether they should continue

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Speaker 1: renting or not. So if someone's been sitting on the

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Speaker 1: sidelines and they're saying, I'm waiting for price reductions or

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Speaker 1: I'm waiting for rates to go down, or hey, I'm

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Speaker 1: seeing this disparity between rents and what I'm going to

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Speaker 1: pay to own a home, the mortgage, all the other

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Speaker 1: things included, like does renting continue to make sense for

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Speaker 1: me for potentially years to come, even though home ownership

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Speaker 1: is something I desire. What would you say to that, I'm.

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Speaker 4: Going to make a lot of social media people angry

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Speaker 4: with this, but I actually think renting makes sense for

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Speaker 4: the majority of people right now.

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Speaker 3: And I know as.

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Speaker 4: A real estate investor and who's someone who has owned

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Speaker 4: a primary residence. That may sound hypocritical, but if you

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Speaker 4: just do the math, and there is very easy math

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Speaker 4: to do, and you can go on bigger pockets. I

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Speaker 4: actually built a buy rent calculator that you can check

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Speaker 4: out there or just google it.

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Speaker 3: There's plenty of them.

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Speaker 4: It is just cheaper to rent right now, and especially

440
00:21:15,000 --> 00:21:17,359
Speaker 4: if you invest that money into something else. So I

441
00:21:17,359 --> 00:21:21,479
Speaker 4: think that's the big caveat is if you're just gonna

442
00:21:21,800 --> 00:21:24,280
Speaker 4: if you're going to say, let's just use a round number.

443
00:21:24,280 --> 00:21:26,920
Speaker 4: If you had fifty grand to invest in a primary residence,

444
00:21:27,359 --> 00:21:31,439
Speaker 4: if your choice is invest that into a home or rent,

445
00:21:31,520 --> 00:21:34,520
Speaker 4: but not invest that money into the stock market or

446
00:21:34,560 --> 00:21:36,680
Speaker 4: into rental property, I'd say put it in a home,

447
00:21:37,119 --> 00:21:41,359
Speaker 4: like that's a better investment. But right now, if what

448
00:21:41,440 --> 00:21:43,800
Speaker 4: I recommend to people is to rent and buy a

449
00:21:43,880 --> 00:21:46,280
Speaker 4: rental property, I rent right now. I've been renting for

450
00:21:46,320 --> 00:21:49,879
Speaker 4: the last five years and I think it's worked really

451
00:21:49,920 --> 00:21:52,359
Speaker 4: well for me. I still buy property, but just not

452
00:21:52,400 --> 00:21:55,840
Speaker 4: as a primary residence or I mean, I'm not a

453
00:21:55,880 --> 00:21:58,520
Speaker 4: stock expert, but I do invest in index funds. If

454
00:21:58,520 --> 00:22:01,199
Speaker 4: you're going to rent and put money into index funds,

455
00:22:01,359 --> 00:22:04,199
Speaker 4: that could be a better decision right now for people.

456
00:22:04,840 --> 00:22:08,200
Speaker 4: That's I think broad advice. But the second thing I'll

457
00:22:08,200 --> 00:22:10,720
Speaker 4: say is it really comes down the math comes down

458
00:22:10,720 --> 00:22:12,600
Speaker 4: to how long you intend to stay in a home,

459
00:22:13,000 --> 00:22:15,720
Speaker 4: and it's usually like five or six years. If you

460
00:22:16,040 --> 00:22:18,399
Speaker 4: intend to stay more five or six years, it's usually

461
00:22:18,440 --> 00:22:22,440
Speaker 4: better to buy. So those are two variables to think

462
00:22:22,480 --> 00:22:25,200
Speaker 4: about as you make that decision for yourself. Is how

463
00:22:25,200 --> 00:22:27,760
Speaker 4: long you would anticipate staying in that home, and what

464
00:22:27,800 --> 00:22:30,760
Speaker 4: you would do with the money for the down payment

465
00:22:31,000 --> 00:22:32,920
Speaker 4: should you not buy a home one hundred percent?

466
00:22:32,960 --> 00:22:35,199
Speaker 2: That's always It's always what it comes down to. Are

467
00:22:35,280 --> 00:22:38,600
Speaker 2: you disciplined enough to not take that money completely squander it.

468
00:22:38,880 --> 00:22:42,240
Speaker 2: If so, then maybe you're fine running and you can

469
00:22:42,280 --> 00:22:44,679
Speaker 2: do the hit the easy button sticking your money in

470
00:22:44,720 --> 00:22:47,480
Speaker 2: the market. But speaking of markets, I think you started

471
00:22:47,480 --> 00:22:49,520
Speaker 2: looking at your first property deal there in Denver, but

472
00:22:49,560 --> 00:22:51,879
Speaker 2: you don't live there anymore. We're going to talk about

473
00:22:52,440 --> 00:22:54,719
Speaker 2: investing in different markets from where you live. We're going

474
00:22:54,720 --> 00:22:56,600
Speaker 2: to talk about finding a deal and more we get

475
00:22:56,600 --> 00:22:57,000
Speaker 2: to all of that.

476
00:22:57,119 --> 00:23:07,359
Speaker 1: Right after this, we're back from the break, still talking

477
00:23:07,400 --> 00:23:10,760
Speaker 1: with Dave Meyer of Bigger Pockets, talking about investing in

478
00:23:10,800 --> 00:23:13,440
Speaker 1: real estate even when kind of we're in a funky

479
00:23:13,680 --> 00:23:17,800
Speaker 1: market and Dave, as Matt alluded to, you invest in Denver,

480
00:23:17,880 --> 00:23:19,360
Speaker 1: I think, is that the only market that you owned

481
00:23:19,359 --> 00:23:19,879
Speaker 1: properties in.

482
00:23:20,080 --> 00:23:20,159
Speaker 3: No.

483
00:23:20,480 --> 00:23:24,960
Speaker 4: I started in buying properties in the Midwest in the

484
00:23:25,040 --> 00:23:29,119
Speaker 4: last few years, and I also invest in syndications passively

485
00:23:29,200 --> 00:23:30,080
Speaker 4: all over the country.

486
00:23:30,560 --> 00:23:34,520
Speaker 1: Okay, so how do you think about location and the

487
00:23:34,560 --> 00:23:37,840
Speaker 1: potential profitability of investing. So let's say someone out there

488
00:23:37,880 --> 00:23:40,119
Speaker 1: is listening Matt and I we live in Atlanta, Like,

489
00:23:40,520 --> 00:23:42,560
Speaker 1: should we invest in Atlanta or should we be looking

490
00:23:42,880 --> 00:23:44,919
Speaker 1: to another part of the country because hey, I know

491
00:23:45,119 --> 00:23:47,560
Speaker 1: I've heard Cincinnati is a great market or something. When

492
00:23:47,600 --> 00:23:50,879
Speaker 1: it comes to the hitting closer something closer to the

493
00:23:50,880 --> 00:23:53,159
Speaker 1: one percent rule, can it be a better idea for

494
00:23:53,200 --> 00:23:55,760
Speaker 1: people to invest in a market that isn't their hometown.

495
00:23:56,359 --> 00:23:56,679
Speaker 3: Yeah.

496
00:23:56,800 --> 00:24:00,080
Speaker 4: I think the short answer is yes, it can be

497
00:24:00,080 --> 00:24:04,399
Speaker 4: better to invest outside of your home market. But I

498
00:24:04,400 --> 00:24:07,879
Speaker 4: would also say that all things being equal, it is

499
00:24:08,000 --> 00:24:11,280
Speaker 4: easier in your home market. So the way I often

500
00:24:11,600 --> 00:24:16,320
Speaker 4: advise people is to again. I know this is why

501
00:24:16,359 --> 00:24:18,360
Speaker 4: my book is called Start with Strategy. I'm not trying

502
00:24:18,400 --> 00:24:20,359
Speaker 4: to pitch the book, but I really just think people

503
00:24:20,400 --> 00:24:23,879
Speaker 4: need to think about their goals first. So this is like,

504
00:24:24,080 --> 00:24:27,400
Speaker 4: if your goal is to get cash flow and you

505
00:24:27,480 --> 00:24:30,200
Speaker 4: can't find cashow in your market, then you should absolutely

506
00:24:30,240 --> 00:24:33,400
Speaker 4: look somewhere else. If your goal is for great appreciation

507
00:24:33,600 --> 00:24:35,840
Speaker 4: and you can get that in your home market, then

508
00:24:35,920 --> 00:24:38,200
Speaker 4: invest in your home market. Like if you can get

509
00:24:38,240 --> 00:24:42,639
Speaker 4: even close to the national average or better for cashal

510
00:24:42,760 --> 00:24:45,159
Speaker 4: or appreciation in your home market, I would say do

511
00:24:45,280 --> 00:24:47,680
Speaker 4: that because you're going to have a lot of advantages

512
00:24:48,160 --> 00:24:52,200
Speaker 4: just knowing the neighborhoods, being able to drive somewhere, you

513
00:24:52,640 --> 00:24:55,240
Speaker 4: just knowing the town. It just matters and it helps.

514
00:24:55,800 --> 00:24:59,240
Speaker 4: But as someone who has done both both invested in

515
00:24:59,640 --> 00:25:04,600
Speaker 4: a local and invested long distance, it's not as hard

516
00:25:04,600 --> 00:25:07,800
Speaker 4: as you think to invest long distance, and depending on

517
00:25:07,840 --> 00:25:10,920
Speaker 4: your goals, it can really make sense. I'll just give

518
00:25:10,960 --> 00:25:13,880
Speaker 4: you an example, like I started buying in the Midwest

519
00:25:13,920 --> 00:25:16,800
Speaker 4: because I wanted to balance out my portfolio. I have

520
00:25:16,880 --> 00:25:23,400
Speaker 4: a lot of appreciation centric deals where I'm investing places

521
00:25:23,400 --> 00:25:26,080
Speaker 4: that are growing and they're expensive and they're probably going

522
00:25:26,119 --> 00:25:28,359
Speaker 4: to go up in price, but they're not the best

523
00:25:28,400 --> 00:25:33,240
Speaker 4: cash flow. I wanted to augment that with some deals

524
00:25:33,280 --> 00:25:36,199
Speaker 4: that provide cash flow and are likely to grow at

525
00:25:36,280 --> 00:25:38,240
Speaker 4: least a little bit, but maybe not as fast as

526
00:25:38,240 --> 00:25:40,840
Speaker 4: some of those other markets. And so I chose a

527
00:25:40,880 --> 00:25:45,080
Speaker 4: market in the Midwest and buy there as well, so

528
00:25:45,119 --> 00:25:49,960
Speaker 4: that I can have a balance of portfolio of different deals.

529
00:25:51,480 --> 00:25:53,600
Speaker 4: That's for me. I've been doing this for fifteen years.

530
00:25:53,640 --> 00:25:56,560
Speaker 4: I think for people who are just starting, whether the

531
00:25:56,600 --> 00:25:59,960
Speaker 4: biggest thing is whether you choose to invest in your backyard,

532
00:26:00,040 --> 00:26:02,880
Speaker 4: in your home market or somewhere else, start with one

533
00:26:03,200 --> 00:26:06,040
Speaker 4: and don't obsess about what the best deal is. Just

534
00:26:06,160 --> 00:26:08,800
Speaker 4: find a place that has pretty good fundamentals and where

535
00:26:08,840 --> 00:26:12,440
Speaker 4: you have a team that you can trust that's like

536
00:26:12,480 --> 00:26:16,480
Speaker 4: a property manager, an agent, handyman like those are the

537
00:26:16,480 --> 00:26:18,840
Speaker 4: two things that you really need, is like solid economic

538
00:26:18,880 --> 00:26:21,879
Speaker 4: fundamentals and a good team. That's what I would build around.

539
00:26:22,160 --> 00:26:24,919
Speaker 2: So obviously, yeah, you're all about getting folks the right

540
00:26:24,960 --> 00:26:27,800
Speaker 2: people in play. So I guess for somebody who's looking

541
00:26:27,800 --> 00:26:31,280
Speaker 2: at that very first deal, though, I'm assuming that you're

542
00:26:31,320 --> 00:26:33,680
Speaker 2: down with them self managing the property as they're learning

543
00:26:33,720 --> 00:26:34,119
Speaker 2: the ropes.

544
00:26:34,320 --> 00:26:36,840
Speaker 4: Yeah, that's what I did. I think it teaches you

545
00:26:36,880 --> 00:26:41,080
Speaker 4: a lot about the business. I self managed for jes

546
00:26:41,480 --> 00:26:44,679
Speaker 4: nine years, ten years. Yeah, and so you learn a

547
00:26:44,720 --> 00:26:48,000
Speaker 4: lot about the business, and you don't need to do

548
00:26:48,040 --> 00:26:50,840
Speaker 4: it that long. I think if you're getting started, i'd

549
00:26:50,840 --> 00:26:52,600
Speaker 4: do it for a year or two because you'll learn

550
00:26:53,000 --> 00:26:56,840
Speaker 4: what good looks like. And for me, I learned what

551
00:26:56,960 --> 00:26:57,840
Speaker 4: bad looks like.

552
00:27:00,400 --> 00:27:01,960
Speaker 3: I was just not handy, you know.

553
00:27:02,040 --> 00:27:04,240
Speaker 4: And I learned what things I wanted to outsource, what

554
00:27:04,400 --> 00:27:07,880
Speaker 4: things I felt I was good at and should continue

555
00:27:07,920 --> 00:27:12,119
Speaker 4: to focus on in my portfolio, and that whole that

556
00:27:12,119 --> 00:27:13,560
Speaker 4: that just taught me a lot.

557
00:27:13,760 --> 00:27:15,160
Speaker 2: But it's a steep learning curve.

558
00:27:15,080 --> 00:27:18,720
Speaker 3: It is. It's you know, it's steep, but short.

559
00:27:18,800 --> 00:27:21,160
Speaker 2: I would say, oh, yeah, you know, it's you learned

560
00:27:21,160 --> 00:27:22,240
Speaker 2: a whole lot, really exactly.

561
00:27:22,280 --> 00:27:24,000
Speaker 1: But if you try to skip that and you try

562
00:27:24,040 --> 00:27:27,480
Speaker 1: to hire somebody, you miss out on even knowing what

563
00:27:27,560 --> 00:27:29,520
Speaker 1: questions to ask the person you're trying to hire, Like,

564
00:27:29,800 --> 00:27:31,879
Speaker 1: you need that couple of years. I think of managing

565
00:27:31,920 --> 00:27:35,200
Speaker 1: your own property to even know how to proceed moving

566
00:27:35,200 --> 00:27:36,159
Speaker 1: forward as a real estate thing.

567
00:27:36,359 --> 00:27:39,600
Speaker 4: Yeah, I do think that's generally true. I know people

568
00:27:39,640 --> 00:27:42,560
Speaker 4: who have invested long distance successfully for their first deal.

569
00:27:42,960 --> 00:27:45,840
Speaker 4: But I think you just need to it just you

570
00:27:45,880 --> 00:27:49,760
Speaker 4: need to do more upfront education. I am some type

571
00:27:49,800 --> 00:27:54,560
Speaker 4: of person who just likes to learn the broad boundaries

572
00:27:54,560 --> 00:27:56,360
Speaker 4: that I should stay within when I try to take

573
00:27:56,400 --> 00:27:58,240
Speaker 4: on a new task, and then I like to jump

574
00:27:58,280 --> 00:28:01,840
Speaker 4: in and learn hands off. I think if you're going

575
00:28:01,920 --> 00:28:03,960
Speaker 4: to do it out of state, you just need to

576
00:28:04,000 --> 00:28:05,680
Speaker 4: be a little more academic about it.

577
00:28:05,800 --> 00:28:06,760
Speaker 2: And that makes sense.

578
00:28:06,880 --> 00:28:10,960
Speaker 4: Study and like, just learn the questions to ask, interview

579
00:28:11,000 --> 00:28:15,040
Speaker 4: a lot of different property managers. Ideally find a real

580
00:28:15,160 --> 00:28:17,800
Speaker 4: estate investor who you know or trust who can help

581
00:28:17,840 --> 00:28:20,600
Speaker 4: you interview those property managers because they can teach you

582
00:28:20,640 --> 00:28:24,560
Speaker 4: a lot. So that's sort of the advice I give.

583
00:28:24,720 --> 00:28:27,760
Speaker 4: But you can absolutely do it. I mean there's thousands

584
00:28:27,800 --> 00:28:28,960
Speaker 4: of people who do it all the time.

585
00:28:29,080 --> 00:28:31,080
Speaker 2: Yeah, that makes sense. So you're talking about your portfolio

586
00:28:31,160 --> 00:28:32,840
Speaker 2: and you were looking your focus shifted to some of

587
00:28:32,840 --> 00:28:35,159
Speaker 2: those Midwestern properties because you're looking for properties that were

588
00:28:35,160 --> 00:28:38,000
Speaker 2: going to cash flow as opposed to solely appreciate. Was

589
00:28:38,040 --> 00:28:41,400
Speaker 2: there a rough portfolio allocation to either one of those

590
00:28:41,760 --> 00:28:43,120
Speaker 2: categories that you were looking for?

591
00:28:43,280 --> 00:28:46,760
Speaker 4: So yeah, the way I think about my portfolio now

592
00:28:47,160 --> 00:28:51,920
Speaker 4: is actually less between the cash flow and appreciation and

593
00:28:52,040 --> 00:28:56,600
Speaker 4: more between direct and passive ownership. So when I first started,

594
00:28:56,600 --> 00:28:58,360
Speaker 4: the first ten years, I was just buying deals in

595
00:28:58,400 --> 00:29:02,160
Speaker 4: Denver self managing them, and that was great. I moved

596
00:29:02,200 --> 00:29:05,120
Speaker 4: to Europe and I was sort of forced to start

597
00:29:05,160 --> 00:29:10,240
Speaker 4: investing passively, either in syndications or I started doing private lending,

598
00:29:10,600 --> 00:29:13,680
Speaker 4: which is kind of like I mean, it is in

599
00:29:13,720 --> 00:29:15,960
Speaker 4: the real estate space, but it's a very different business

600
00:29:16,000 --> 00:29:21,200
Speaker 4: than buying property, and I really liked it. And I

601
00:29:21,240 --> 00:29:25,960
Speaker 4: started to realize that I could create a portfolio where

602
00:29:26,000 --> 00:29:29,960
Speaker 4: I outsourced the things that are profitable but I'm bad at,

603
00:29:30,120 --> 00:29:32,360
Speaker 4: and I could keep in house the things that I

604
00:29:32,400 --> 00:29:36,800
Speaker 4: am good at. And so I am not good at

605
00:29:36,960 --> 00:29:40,640
Speaker 4: value ad investing. That's things like flipping houses or doing

606
00:29:40,680 --> 00:29:44,480
Speaker 4: heavy renovations on properties. I've never done a multi family deal,

607
00:29:44,760 --> 00:29:49,600
Speaker 4: probably never will, not a big one, and so I

608
00:29:49,640 --> 00:29:52,600
Speaker 4: invest in those things passively because there are other people

609
00:29:52,600 --> 00:29:55,240
Speaker 4: who are very good at it, who I'm happy to

610
00:29:55,280 --> 00:29:59,440
Speaker 4: give up some of my income, my return to in

611
00:29:59,520 --> 00:30:03,080
Speaker 4: exchange for that. What I've done almost my entire career

612
00:30:03,080 --> 00:30:06,560
Speaker 4: as and investors just buy small multi family properties and duplexes.

613
00:30:06,640 --> 00:30:10,760
Speaker 4: Triplex's quaplexes that have good long term cash flow potential,

614
00:30:10,800 --> 00:30:13,840
Speaker 4: and that's a business I feel comfortable running, even from Europe.

615
00:30:14,160 --> 00:30:16,720
Speaker 4: And so that's sort of how I've divided it, and

616
00:30:17,280 --> 00:30:19,440
Speaker 4: I would like to get to a point where I'm

617
00:30:19,440 --> 00:30:23,520
Speaker 4: doing maybe i'd say forty to fifty percent direct ownership

618
00:30:23,560 --> 00:30:27,360
Speaker 4: long you know, small multifamily, twenty five percent in these

619
00:30:27,440 --> 00:30:31,000
Speaker 4: passive bigs. I consider them big swings. They're a little

620
00:30:31,000 --> 00:30:34,040
Speaker 4: bit riskier, but they have bigger upside. And then maybe

621
00:30:34,080 --> 00:30:36,920
Speaker 4: twenty five percent in lending, which is a whole other

622
00:30:36,920 --> 00:30:38,240
Speaker 4: thing we can get into if you want.

623
00:30:38,400 --> 00:30:39,360
Speaker 2: Well, I'm curious.

624
00:30:39,440 --> 00:30:42,600
Speaker 1: One of the things typically the upsides of investing in

625
00:30:42,640 --> 00:30:47,400
Speaker 1: real estate is you the market might be less efficient, right,

626
00:30:47,440 --> 00:30:49,200
Speaker 1: so you might be able to find a deal on

627
00:30:49,240 --> 00:30:52,040
Speaker 1: a street in a neighborhood that you know exists, that

628
00:30:52,120 --> 00:30:54,160
Speaker 1: nobody else knows exists, and so you're able to get

629
00:30:54,160 --> 00:30:56,000
Speaker 1: a deal. And then the other cool thing is you

630
00:30:56,000 --> 00:30:58,600
Speaker 1: can kind of force appreciation into the property, right where

631
00:30:58,760 --> 00:31:02,080
Speaker 1: if you're buying an index and sorry, it kind of

632
00:31:02,160 --> 00:31:03,960
Speaker 1: is what it is and it will go up over time,

633
00:31:04,000 --> 00:31:06,280
Speaker 1: but there's nothing that you have very little impact.

634
00:31:06,360 --> 00:31:08,480
Speaker 3: You have one vote, but.

635
00:31:08,440 --> 00:31:11,360
Speaker 1: If you like paint the house, renovate the kitchen, put

636
00:31:11,400 --> 00:31:14,040
Speaker 1: money into the bathrooms. You have the ability to see

637
00:31:14,200 --> 00:31:16,080
Speaker 1: a lot of upside in real estate, which I think

638
00:31:16,200 --> 00:31:18,080
Speaker 1: is what is certainly one of the selling points. But

639
00:31:18,120 --> 00:31:20,840
Speaker 1: then you also look at the ROI on some of

640
00:31:20,840 --> 00:31:24,080
Speaker 1: these studies of certain home renovation projects you might take on,

641
00:31:24,400 --> 00:31:26,080
Speaker 1: and it ends up a lot of them actually end

642
00:31:26,160 --> 00:31:28,360
Speaker 1: up a lot of them end up losing you money.

643
00:31:28,560 --> 00:31:32,120
Speaker 1: So how do you think about being able to force

644
00:31:32,160 --> 00:31:35,520
Speaker 1: appreciation into a home versus the fact that a lot

645
00:31:35,560 --> 00:31:39,719
Speaker 1: of those renovation efforts might not be they might not

646
00:31:39,720 --> 00:31:40,760
Speaker 1: pay off in the way you want it.

647
00:31:41,080 --> 00:31:44,280
Speaker 4: Yeah, that's a great question, and it really comes down

648
00:31:44,320 --> 00:31:48,400
Speaker 4: to understanding your customer in a way that I don't

649
00:31:48,560 --> 00:31:52,200
Speaker 4: think a ton of real estate investors think about a

650
00:31:52,240 --> 00:31:55,560
Speaker 4: lot of times you walk into a home and you think,

651
00:31:55,760 --> 00:31:59,760
Speaker 4: what would I want here? And that is not necessarily

652
00:31:59,800 --> 00:32:02,640
Speaker 4: what a prospective tenant wants if you're a long term

653
00:32:02,840 --> 00:32:05,800
Speaker 4: buy and hold investor, might not be what a guest

654
00:32:05,840 --> 00:32:08,160
Speaker 4: wants if you're a short term rental investor. And so

655
00:32:08,240 --> 00:32:10,760
Speaker 4: I think it's really important to figure out what people

656
00:32:10,840 --> 00:32:13,720
Speaker 4: want and what they're willing to pay for, and for

657
00:32:13,800 --> 00:32:16,960
Speaker 4: a rental property, that's often quite different for what it

658
00:32:17,000 --> 00:32:19,280
Speaker 4: would be if you're a flipper and you're trying to

659
00:32:19,600 --> 00:32:23,880
Speaker 4: create value in a single family home, and so there's

660
00:32:24,000 --> 00:32:26,360
Speaker 4: ways to do this, but I think talking to property

661
00:32:26,400 --> 00:32:31,360
Speaker 4: managers is one great hack that's totally free to figure

662
00:32:31,400 --> 00:32:34,320
Speaker 4: this out. You know, if you call up a property

663
00:32:34,360 --> 00:32:37,719
Speaker 4: manager in Denver, they'll tell you that having covered parking

664
00:32:37,800 --> 00:32:41,600
Speaker 4: is super important, or a yard for a dog because

665
00:32:41,640 --> 00:32:44,600
Speaker 4: dogs are you know, everyone else dog in Denver. Those

666
00:32:44,640 --> 00:32:47,800
Speaker 4: types of things allow you to focus your investment into

667
00:32:47,880 --> 00:32:51,400
Speaker 4: value add in a way that you might not immediately

668
00:32:51,480 --> 00:32:53,560
Speaker 4: know or might not be able to into it just

669
00:32:53,640 --> 00:32:56,880
Speaker 4: by you know, basing it off your own experiences. So

670
00:32:56,960 --> 00:32:59,840
Speaker 4: I think that's really important. I think the thing that

671
00:33:00,080 --> 00:33:04,239
Speaker 4: I've done in my career that has been successful is

672
00:33:05,720 --> 00:33:11,600
Speaker 4: trying to add capacity to homes. And this can come

673
00:33:11,640 --> 00:33:15,240
Speaker 4: in a couple of different formats, but I often think like,

674
00:33:15,360 --> 00:33:17,720
Speaker 4: can you add a bedroom, can you add a bathroom?

675
00:33:17,800 --> 00:33:20,800
Speaker 4: Can you add an entirely new unit onto a property?

676
00:33:20,920 --> 00:33:25,000
Speaker 4: Those are like usually slam dunk ways to add value

677
00:33:25,080 --> 00:33:30,160
Speaker 4: into a property. I've bought homes where I could you know,

678
00:33:30,520 --> 00:33:34,320
Speaker 4: I bought a short term rental, for example, that had

679
00:33:34,360 --> 00:33:35,120
Speaker 4: three bedrooms.

680
00:33:35,160 --> 00:33:36,200
Speaker 3: I turned it into.

681
00:33:36,000 --> 00:33:38,880
Speaker 4: Five, you know, and I you know, that totally changes

682
00:33:38,920 --> 00:33:40,920
Speaker 4: the revenue profile of that home.

683
00:33:41,120 --> 00:33:43,280
Speaker 1: Are you at like square footage or are you turning

684
00:33:43,280 --> 00:33:46,120
Speaker 1: current square footage into more usable bedroom space.

685
00:33:46,280 --> 00:33:49,280
Speaker 4: No, So I actually told my real estate agent I

686
00:33:49,360 --> 00:33:51,520
Speaker 4: wanted a four bedroom or bigger house because I saw

687
00:33:51,560 --> 00:33:54,880
Speaker 4: in the data that that's the where the revenue inefficiency,

688
00:33:54,960 --> 00:33:55,560
Speaker 4: as you said, like.

689
00:33:55,520 --> 00:33:59,120
Speaker 3: You can get better revenue per dollar there. And I

690
00:33:59,160 --> 00:34:02,600
Speaker 3: couldn't find anything good. So I told my agent to look.

691
00:34:02,480 --> 00:34:06,280
Speaker 4: For three bedrooms that were big, and I wound up

692
00:34:06,280 --> 00:34:09,080
Speaker 4: finding a four thousand square foot three bedroom house, which

693
00:34:09,160 --> 00:34:13,480
Speaker 4: is just absurd. It's like every bedrooms twelve hundred square feet,

694
00:34:14,840 --> 00:34:18,480
Speaker 4: but if they had a whole floor, it was like

695
00:34:18,640 --> 00:34:21,080
Speaker 4: I think it was like it was literally like twelve

696
00:34:21,160 --> 00:34:23,840
Speaker 4: hundred square foot living room in the basement. It was

697
00:34:23,880 --> 00:34:26,080
Speaker 4: the second living room. So I just turned it into

698
00:34:26,080 --> 00:34:28,520
Speaker 4: two more bedrooms, you know, And so something like.

699
00:34:28,440 --> 00:34:30,839
Speaker 1: See, these are the inefficiencies that exist in real estate.

700
00:34:30,840 --> 00:34:32,400
Speaker 1: The capitalize on right.

701
00:34:32,239 --> 00:34:33,719
Speaker 4: And do you know how cheap it is to throw

702
00:34:33,760 --> 00:34:36,400
Speaker 4: up some drywall. You know, it's like fifteen hundred bucks.

703
00:34:36,560 --> 00:34:39,000
Speaker 4: So I didn't, you know, the investment was almost nothing,

704
00:34:39,080 --> 00:34:41,200
Speaker 4: and the amount of revenue can bring in for adding

705
00:34:41,200 --> 00:34:43,319
Speaker 4: a bedroom on a short term revue is crazy. That

706
00:34:43,360 --> 00:34:45,080
Speaker 4: probably paid itself off in three nights.

707
00:34:45,080 --> 00:34:46,719
Speaker 1: Well yeah, Now if you've listed it for sale too,

708
00:34:46,719 --> 00:34:48,239
Speaker 1: think about how much you would sell for. Is a

709
00:34:48,280 --> 00:34:50,680
Speaker 1: fives three bit exactly? So is that what it takes

710
00:34:50,719 --> 00:34:52,359
Speaker 1: to find a deal these days? Is kind of look,

711
00:34:52,520 --> 00:34:55,239
Speaker 1: I mean looking at properties, maybe in a way that

712
00:34:55,280 --> 00:34:56,000
Speaker 1: other folks aren't.

713
00:34:56,239 --> 00:34:59,120
Speaker 4: Yeah, so I I'll just tell you what I look for.

714
00:34:59,560 --> 00:35:02,439
Speaker 4: I think there's a lot of opportunity for value add

715
00:35:02,520 --> 00:35:06,600
Speaker 4: so flipping houses. People overlook it, but it's actually quite profitable.

716
00:35:06,680 --> 00:35:08,719
Speaker 4: Right now, I'm not really a flipper because I have

717
00:35:08,760 --> 00:35:10,520
Speaker 4: a full time job, but if you're into that, it

718
00:35:10,560 --> 00:35:13,160
Speaker 4: can be really profitable. Have you guys heard of the

719
00:35:13,280 --> 00:35:17,000
Speaker 4: Burr method before? So this is just this idea of

720
00:35:17,080 --> 00:35:19,680
Speaker 4: buying a rental. It's kind of like flipping but holding

721
00:35:19,719 --> 00:35:22,719
Speaker 4: on to it. So you buy a property, you rehabilitate it,

722
00:35:22,760 --> 00:35:25,000
Speaker 4: you know, bring it up to its highest and best use,

723
00:35:25,520 --> 00:35:28,680
Speaker 4: you rent it out, then you refinance it and you

724
00:35:28,760 --> 00:35:32,520
Speaker 4: just keep doing that washing repeat. That was really popular

725
00:35:33,280 --> 00:35:35,640
Speaker 4: up until a few years ago, and it still should

726
00:35:35,719 --> 00:35:38,480
Speaker 4: be popular, but it's a little less efficient. Than it

727
00:35:38,600 --> 00:35:39,000
Speaker 4: used to be.

728
00:35:39,600 --> 00:35:41,840
Speaker 3: But because a lot of the Burr.

729
00:35:41,600 --> 00:35:43,880
Speaker 4: Method is based on speed, you know, you want to

730
00:35:44,160 --> 00:35:46,279
Speaker 4: do it as quickly as possible so that you can

731
00:35:46,320 --> 00:35:48,839
Speaker 4: refinance and get that money out and buy your next deal.

732
00:35:49,440 --> 00:35:51,480
Speaker 4: But as I think I've told you guys, like, scaling

733
00:35:51,560 --> 00:35:54,160
Speaker 4: up quickly is not really my thing. I kind of

734
00:35:54,160 --> 00:35:56,480
Speaker 4: want to be slow and steady, and so I've been

735
00:35:56,560 --> 00:35:58,400
Speaker 4: doing this thing I need to Maybe you guys can

736
00:35:58,440 --> 00:35:58,680
Speaker 4: help me.

737
00:35:58,680 --> 00:36:00,440
Speaker 3: I've been trying to name it, but I call it

738
00:36:00,480 --> 00:36:04,200
Speaker 3: like the delayed Burr or the chill Burr, where I'm

739
00:36:04,320 --> 00:36:06,040
Speaker 3: just chills.

740
00:36:06,719 --> 00:36:11,160
Speaker 4: Yeah, it's very cold theme the chillbur So basically, what

741
00:36:11,200 --> 00:36:15,239
Speaker 4: I've done is you buy a property that is occupied

742
00:36:15,480 --> 00:36:18,239
Speaker 4: and then whenever the tenants leave, then you renovate it

743
00:36:18,320 --> 00:36:20,640
Speaker 4: and bring it up to its highest and best use

744
00:36:20,680 --> 00:36:23,320
Speaker 4: and bring up the rents. Then, if it's a duplex,

745
00:36:23,360 --> 00:36:25,560
Speaker 4: which is what I've done, you wait till the other

746
00:36:25,600 --> 00:36:28,319
Speaker 4: person leaves, then you renovate that and then over the

747
00:36:28,360 --> 00:36:32,000
Speaker 4: course of twelve or eighteen months, you've really increased the

748
00:36:32,040 --> 00:36:36,240
Speaker 4: rents and then you can refinance. And I've been targeting

749
00:36:36,280 --> 00:36:39,000
Speaker 4: this because you can find deals in a lot of

750
00:36:39,040 --> 00:36:42,520
Speaker 4: markets right now where that deal that you buy right

751
00:36:42,520 --> 00:36:45,279
Speaker 4: off the market is at least break even cash loow

752
00:36:45,360 --> 00:36:48,960
Speaker 4: so to three percent cash on cash return. Then by

753
00:36:49,000 --> 00:36:51,839
Speaker 4: the time you refinance you do the whole work, it's

754
00:36:51,840 --> 00:36:54,960
Speaker 4: maybe seven eight percent cash and cash return, which is great.

755
00:36:55,280 --> 00:36:57,279
Speaker 4: And maybe it takes you twelve months to get to

756
00:36:57,360 --> 00:37:01,560
Speaker 4: that return, but for me, that's totally fine because if

757
00:37:01,600 --> 00:37:03,959
Speaker 4: you get into the math, even a three percent cash

758
00:37:03,960 --> 00:37:07,000
Speaker 4: and cash return, when you factor in the potential appreciation,

759
00:37:07,480 --> 00:37:10,200
Speaker 4: the amortization, which is basically just paying off your loan,

760
00:37:10,640 --> 00:37:15,359
Speaker 4: and the significant tax advantages of owning real estate, I

761
00:37:15,440 --> 00:37:19,239
Speaker 4: still think it does better than an index fund, and

762
00:37:19,560 --> 00:37:22,560
Speaker 4: when you've done with the work, it will significantly outperform

763
00:37:22,600 --> 00:37:24,120
Speaker 4: an index fund, at least in my mind.

764
00:37:24,560 --> 00:37:26,520
Speaker 1: I feel like what you're highlighting here is like patience

765
00:37:26,920 --> 00:37:30,280
Speaker 1: and creativity, those are maybe the keys to success. Whereas,

766
00:37:30,320 --> 00:37:34,280
Speaker 1: like including Matt and I, any idiot could succeed investing

767
00:37:34,320 --> 00:37:36,600
Speaker 1: in real estate right in twenty eleven, twenty thirteen, but

768
00:37:36,760 --> 00:37:38,960
Speaker 1: now it takes maybe more of that outside the box

769
00:37:39,040 --> 00:37:41,520
Speaker 1: way of thinking in order to be successful. So like

770
00:37:41,520 --> 00:37:44,320
Speaker 1: when we're talking about running the numbers and what makes

771
00:37:44,840 --> 00:37:48,640
Speaker 1: a real estate purchase potentially a successful investment for someone,

772
00:37:49,160 --> 00:37:50,600
Speaker 1: what should they be thinking about?

773
00:37:50,800 --> 00:37:54,280
Speaker 4: Yeah, so I think the number one thing we started

774
00:37:54,280 --> 00:37:59,279
Speaker 4: this conversation talking a lot about influencers. I think some

775
00:37:59,320 --> 00:38:01,080
Speaker 4: of the things that you're i'd me crazy about it

776
00:38:01,120 --> 00:38:04,600
Speaker 4: is that sort of overlooking a lot of the expenses

777
00:38:05,200 --> 00:38:08,640
Speaker 4: revenue side of running a deal super easy rent times twelve,

778
00:38:08,760 --> 00:38:11,440
Speaker 4: that's your income. Sometimes you have other stuff that you

779
00:38:11,480 --> 00:38:15,280
Speaker 4: can rent out, like a parking spot or storage space,

780
00:38:15,440 --> 00:38:17,480
Speaker 4: or maybe you have a coin op laundry, but whatever

781
00:38:17,480 --> 00:38:20,120
Speaker 4: it is, you can figure that out. The other things

782
00:38:20,120 --> 00:38:22,720
Speaker 4: that you need to factor in, of course your mortgage payment,

783
00:38:22,960 --> 00:38:26,160
Speaker 4: but it doesn't stop there. You need to obviously account

784
00:38:26,160 --> 00:38:29,040
Speaker 4: for maintenance and repairs. But some of the things that

785
00:38:29,080 --> 00:38:33,239
Speaker 4: people miss are vacancy. Vacancy is the silent killer of

786
00:38:33,280 --> 00:38:36,560
Speaker 4: any real estate deal because even one month of vacancy

787
00:38:36,600 --> 00:38:38,600
Speaker 4: is eight percent of your revenue for the year. That

788
00:38:38,640 --> 00:38:42,040
Speaker 4: can make or break your entire year. And so vacancy

789
00:38:42,080 --> 00:38:46,200
Speaker 4: needs to be accounted for property management chip most of

790
00:38:46,239 --> 00:38:50,000
Speaker 4: the time taxes, And I think the big thing right

791
00:38:50,040 --> 00:38:53,160
Speaker 4: now in this market is insurance. Insurance costs have been

792
00:38:53,160 --> 00:38:55,320
Speaker 4: going crazy in a lot of markets. I don't know

793
00:38:55,360 --> 00:38:57,040
Speaker 4: what it's like in Atlanta, but I know a lot

794
00:38:57,040 --> 00:38:59,560
Speaker 4: of the Southeast it's been going crazy, and so that's

795
00:38:59,600 --> 00:39:01,640
Speaker 4: another thing you really need to keep an eye on,

796
00:39:01,760 --> 00:39:05,719
Speaker 4: is what's happening with insurance rates in your area and

797
00:39:05,760 --> 00:39:08,000
Speaker 4: whether they're likely to keep going up, because that can

798
00:39:08,040 --> 00:39:11,000
Speaker 4: be there's not much you can do about that, and

799
00:39:11,040 --> 00:39:16,279
Speaker 4: it can really be a detriment to your business's profitability.

800
00:39:15,800 --> 00:39:20,080
Speaker 2: No doubt. Okay, well, earlier you said something about being

801
00:39:20,200 --> 00:39:24,520
Speaker 2: willing to go it out on a limb making a forecast, Like, oh, yeah,

802
00:39:24,640 --> 00:39:25,880
Speaker 2: you know, so let's go ahead and get you on

803
00:39:25,880 --> 00:39:30,880
Speaker 2: the record fire. I wanted to look into your crystal ball, like,

804
00:39:30,920 --> 00:39:32,279
Speaker 2: what do you think is going to be It's going

805
00:39:32,360 --> 00:39:35,080
Speaker 2: to happen with real estate moving forward because of the

806
00:39:35,160 --> 00:39:38,560
Speaker 2: lack of supply, household formations are climbing, like all of

807
00:39:38,560 --> 00:39:41,880
Speaker 2: these factors can combined. Do you think that continue to

808
00:39:41,960 --> 00:39:43,840
Speaker 2: leads to rising home prices?

809
00:39:44,000 --> 00:39:47,279
Speaker 4: I do think there we're going to continue to see

810
00:39:47,360 --> 00:39:49,719
Speaker 4: a weird slow market for the next year.

811
00:39:49,880 --> 00:39:51,160
Speaker 3: So is my best gas.

812
00:39:51,960 --> 00:39:55,200
Speaker 4: I am not of the belief I'm going to again

813
00:39:55,520 --> 00:39:58,960
Speaker 4: annoy real estate or real estate influencers. I don't think

814
00:39:59,280 --> 00:40:01,520
Speaker 4: mortgage rates are down that much, even if the Fed

815
00:40:01,560 --> 00:40:04,400
Speaker 4: cuts rates this week, which they're likely to do. I

816
00:40:04,400 --> 00:40:06,200
Speaker 4: don't think they're coming down that much. I think they're

817
00:40:06,239 --> 00:40:08,920
Speaker 4: going to stay in the sixes for at least the

818
00:40:08,920 --> 00:40:11,680
Speaker 4: rest of twenty twenty four, and probably will into twenty

819
00:40:11,719 --> 00:40:14,840
Speaker 4: twenty five. I think even in a best case scenario,

820
00:40:14,880 --> 00:40:17,760
Speaker 4: that may be coming into the high fives next year.

821
00:40:18,239 --> 00:40:22,520
Speaker 4: And so that keeps us away from what most economists

822
00:40:22,560 --> 00:40:25,520
Speaker 4: think is sort of like the magic number of unlocking

823
00:40:25,600 --> 00:40:29,479
Speaker 4: the housing market in increasing volume, which is about five

824
00:40:29,520 --> 00:40:31,719
Speaker 4: to five and a half percent. So I think we're

825
00:40:31,719 --> 00:40:36,040
Speaker 4: going to see more low affordability, which means we won't

826
00:40:36,080 --> 00:40:38,719
Speaker 4: have a ton of buyers. But I still don't think

827
00:40:38,719 --> 00:40:40,840
Speaker 4: that we're going to see any sort of like sharp

828
00:40:40,920 --> 00:40:44,759
Speaker 4: decline in prices because people don't have to sell, and

829
00:40:44,920 --> 00:40:47,319
Speaker 4: they've shown over the last several years that they're not

830
00:40:47,400 --> 00:40:50,520
Speaker 4: going to unless they are forced to, and they're not

831
00:40:50,600 --> 00:40:52,680
Speaker 4: going to be forced to. This is not two thousand

832
00:40:52,680 --> 00:40:55,719
Speaker 4: and eight, where people were underwater on their mortgages and

833
00:40:55,760 --> 00:40:59,280
Speaker 4: couldn't make their mortgage payments. If you look at mortgage

834
00:40:59,280 --> 00:41:03,200
Speaker 4: delinquency rates, they're incredibly low. If you look at foreclosure rates,

835
00:41:03,239 --> 00:41:06,120
Speaker 4: they're incredibly low, and people are just going to chill,

836
00:41:06,239 --> 00:41:08,120
Speaker 4: like I think that's what's going to happen, and I

837
00:41:08,160 --> 00:41:11,000
Speaker 4: know that's frustrating. It's frustrating for me too, But I

838
00:41:11,000 --> 00:41:14,120
Speaker 4: don't think we're going to see any resolution to this

839
00:41:14,200 --> 00:41:16,680
Speaker 4: sort of stuck housing market, at least in the next

840
00:41:16,680 --> 00:41:22,279
Speaker 4: six months. It's really hard to forecast after that. I

841
00:41:22,360 --> 00:41:24,520
Speaker 4: will say that I think in certain markets we will

842
00:41:24,560 --> 00:41:28,360
Speaker 4: see price declines, but modest ones, you know too, three percent,

843
00:41:28,440 --> 00:41:31,560
Speaker 4: maybe four percent, while other markets continue to grow. We've

844
00:41:31,600 --> 00:41:34,600
Speaker 4: seen the Midwest and the Northeast continue to be very strong,

845
00:41:34,960 --> 00:41:38,680
Speaker 4: where the Southeast, particularly Florida, and we also see Texas

846
00:41:38,719 --> 00:41:41,920
Speaker 4: seeing modest declines, and if mortgage rates stay high for longer,

847
00:41:42,040 --> 00:41:45,719
Speaker 4: we'll probably continue to see some more declines. But don't

848
00:41:46,120 --> 00:41:48,840
Speaker 4: I never have seen a crash in the cycle, and

849
00:41:48,920 --> 00:41:52,239
Speaker 4: I still don't see it coming. Of course, there's all

850
00:41:52,280 --> 00:41:55,440
Speaker 4: sorts of geopolitical uncertainty, all this crazy stuff that could

851
00:41:55,719 --> 00:41:59,600
Speaker 4: you know, right exactly like a black swan, always possible,

852
00:41:59,680 --> 00:42:03,000
Speaker 4: and frankly, it feels more likely now than it has

853
00:42:03,280 --> 00:42:05,960
Speaker 4: in a long time. But if you're just reading the

854
00:42:05,960 --> 00:42:09,719
Speaker 4: fundamentals of the housing market, it looks like we're in

855
00:42:09,760 --> 00:42:13,040
Speaker 4: for some more flat slow years.

856
00:42:13,160 --> 00:42:16,520
Speaker 1: Yeah, I love seeing by the way stats be manipulated.

857
00:42:16,600 --> 00:42:19,920
Speaker 1: And it's like foreclosures up twenty percent, which means six

858
00:42:20,000 --> 00:42:20,920
Speaker 1: people instead of five.

859
00:42:20,800 --> 00:42:22,360
Speaker 2: People exactly close.

860
00:42:22,440 --> 00:42:25,400
Speaker 1: Yeah, it's like, really and truly almost nobody is at

861
00:42:25,480 --> 00:42:27,880
Speaker 1: risk of foreclosure these days because of what's happened with

862
00:42:28,840 --> 00:42:30,480
Speaker 1: you know what, the rate that people have locked in

863
00:42:30,520 --> 00:42:31,759
Speaker 1: what they paid for the home and then what the

864
00:42:31,760 --> 00:42:32,560
Speaker 1: home is worth.

865
00:42:32,360 --> 00:42:36,040
Speaker 4: Now nine percent nine percent of is the amount of

866
00:42:36,080 --> 00:42:38,719
Speaker 4: foreclosures we have compared to twenty ten. It's just not

867
00:42:38,800 --> 00:42:39,520
Speaker 4: even close.

868
00:42:39,400 --> 00:42:40,800
Speaker 2: Which makes total sense. Yeah.

869
00:42:40,800 --> 00:42:42,920
Speaker 1: Are we got just a few last questions to get

870
00:42:42,920 --> 00:42:44,920
Speaker 1: to with you, Dave. We'll get to those right after this.

871
00:42:52,680 --> 00:42:54,480
Speaker 2: All right, we are back from the Greg talk in

872
00:42:54,560 --> 00:42:58,879
Speaker 2: real estate investing in a Murky Market with Dave Meyer. Dave,

873
00:42:58,960 --> 00:43:01,080
Speaker 2: earlier you talked to maybe this will be like a

874
00:43:01,200 --> 00:43:03,560
Speaker 2: rapid fire sort of section. We'll see how rapid we

875
00:43:03,600 --> 00:43:08,239
Speaker 2: can keep it. But you talked about the timeline and

876
00:43:08,280 --> 00:43:10,879
Speaker 2: you said, okay, maybe like ten to fifteen years. I'm

877
00:43:10,920 --> 00:43:13,319
Speaker 2: curious why did you choose those numbers? Is that because

878
00:43:13,360 --> 00:43:15,120
Speaker 2: you do you have a lot of fifteen year mortgages

879
00:43:15,160 --> 00:43:16,400
Speaker 2: on some of your investment properties.

880
00:43:16,560 --> 00:43:20,400
Speaker 4: No, no, I just think that I'm thirty seven, and

881
00:43:20,440 --> 00:43:24,040
Speaker 4: I think maybe around fifty years old is maybe when

882
00:43:24,080 --> 00:43:27,200
Speaker 4: I'll stop working full time. I don't think i'll ever,

883
00:43:27,280 --> 00:43:28,080
Speaker 4: like truly retire.

884
00:43:28,120 --> 00:43:29,840
Speaker 3: I'm what ye likes to work.

885
00:43:30,200 --> 00:43:33,840
Speaker 4: But you know, I've been working full time and investing

886
00:43:33,920 --> 00:43:35,840
Speaker 4: on the side and writing books and doing all this

887
00:43:35,840 --> 00:43:37,839
Speaker 4: stuff for a lot of years, and at a certain

888
00:43:37,880 --> 00:43:40,000
Speaker 4: point I'll probably want to slow down. And Okay, I

889
00:43:40,040 --> 00:43:42,719
Speaker 4: think between age forty five and fifty, I'd love to

890
00:43:42,840 --> 00:43:46,239
Speaker 4: just know that when the time comes and decide, you know,

891
00:43:46,520 --> 00:43:49,440
Speaker 4: I'm tired, that I can do that without having to

892
00:43:49,480 --> 00:43:50,520
Speaker 4: really think about it too hard.

893
00:43:50,560 --> 00:43:54,280
Speaker 2: So more about lifestyle for you, less about numbers, totally, yes, exactly,

894
00:43:54,320 --> 00:43:54,640
Speaker 2: all right.

895
00:43:54,640 --> 00:43:57,279
Speaker 1: How do you think, Dave about tenant screening. I feel

896
00:43:57,280 --> 00:43:59,319
Speaker 1: like that is the thing that gets talked about not

897
00:43:59,360 --> 00:44:01,040
Speaker 1: nearly enough, but that can be kind of make or

898
00:44:01,080 --> 00:44:02,280
Speaker 1: break for real estate investors.

899
00:44:02,480 --> 00:44:07,120
Speaker 4: I think it's crucially important to find tenants who are

900
00:44:07,120 --> 00:44:09,920
Speaker 4: the right fit for your property, and that can be

901
00:44:09,960 --> 00:44:14,800
Speaker 4: different for every property, every asset class. But I really

902
00:44:14,840 --> 00:44:19,120
Speaker 4: recommend people set strict criteria of what they're looking for

903
00:44:19,200 --> 00:44:21,400
Speaker 4: and stick to it. And I know I said earlier

904
00:44:21,440 --> 00:44:24,840
Speaker 4: that vacancy is like the silent killer of real estate deals.

905
00:44:25,160 --> 00:44:26,560
Speaker 3: But actually eviction is.

906
00:44:26,920 --> 00:44:29,600
Speaker 2: Way how expensive a reviction is way worse.

907
00:44:29,760 --> 00:44:31,920
Speaker 4: I actually just did a show on this. I have

908
00:44:32,000 --> 00:44:34,279
Speaker 4: an analyst who works for me, and I asked him

909
00:44:34,480 --> 00:44:39,839
Speaker 4: figure out what the average eviction costs a landlord, and

910
00:44:39,920 --> 00:44:42,960
Speaker 4: on the low side, it's like six grand and that's it.

911
00:44:43,120 --> 00:44:46,000
Speaker 1: Yeah, you'd rather have a market or two per expensive

912
00:44:46,080 --> 00:44:49,040
Speaker 1: of that place setting vacant than having a crummy tenant.

913
00:44:49,200 --> 00:44:51,880
Speaker 4: That's right, And you will be much less stressed. Honestly

914
00:44:51,920 --> 00:44:55,480
Speaker 4: with vacancy. It's frustrating, but you know, I've fortunately in

915
00:44:55,560 --> 00:44:58,399
Speaker 4: fifteen years, only had to do one eviction, but it's

916
00:44:58,440 --> 00:44:59,120
Speaker 4: so stressful.

917
00:44:59,120 --> 00:45:00,000
Speaker 3: It's a terrible situation.

918
00:45:00,160 --> 00:45:02,799
Speaker 4: It's a terrible situation for tenants too, And so I

919
00:45:02,840 --> 00:45:05,720
Speaker 4: think that's the thing about tenants screening that's so important,

920
00:45:05,840 --> 00:45:08,400
Speaker 4: is like, you don't want to put someone in a

921
00:45:08,400 --> 00:45:10,719
Speaker 4: situation where they're unlikely to be able to pay and

922
00:45:10,760 --> 00:45:13,000
Speaker 4: meet their obligations. And so it's sort of on you

923
00:45:13,040 --> 00:45:16,120
Speaker 4: as a property owner to make sure that you're finding

924
00:45:16,480 --> 00:45:20,560
Speaker 4: a tenant where there's mutual benefit and mutual interest and

925
00:45:20,600 --> 00:45:23,080
Speaker 4: ability to meet the obligations of the contract.

926
00:45:23,120 --> 00:45:25,840
Speaker 2: That's that's so good. I really like your perspective there,

927
00:45:25,840 --> 00:45:30,680
Speaker 2: like you are helping them succeed potentially by Actually I

928
00:45:30,719 --> 00:45:31,879
Speaker 2: don't think this is going to work out.

929
00:45:32,040 --> 00:45:35,080
Speaker 3: Yeah, yeah, that's exactly right. It's like you don't you know.

930
00:45:35,400 --> 00:45:38,200
Speaker 4: I think that it's tempting to be like, oh, this

931
00:45:38,239 --> 00:45:40,480
Speaker 4: will person is willing to pay, but like are they

932
00:45:40,520 --> 00:45:44,000
Speaker 4: able to pay? But I just think as a property owner,

933
00:45:44,040 --> 00:45:48,160
Speaker 4: you have an obligation to your customer to make sure

934
00:45:48,200 --> 00:45:50,640
Speaker 4: there's a very high probability.

935
00:45:50,000 --> 00:45:51,880
Speaker 3: That you that it's a win win situation.

936
00:45:52,200 --> 00:45:53,040
Speaker 2: Yeah, all right.

937
00:45:53,080 --> 00:45:57,080
Speaker 1: The million dollar question, Dave, is real estate investing passive

938
00:45:57,520 --> 00:45:57,719
Speaker 1: or not?

939
00:45:58,080 --> 00:46:01,359
Speaker 3: No, I don't think it is. I will say, I

940
00:46:01,480 --> 00:46:04,840
Speaker 3: invest in syndications and some funds.

941
00:46:04,880 --> 00:46:06,120
Speaker 1: Do you want to explain what those are? By the way,

942
00:46:06,200 --> 00:46:07,600
Speaker 1: cause you mentioned that term, and I know some people

943
00:46:07,640 --> 00:46:08,399
Speaker 1: just don't know what that means.

944
00:46:08,560 --> 00:46:08,759
Speaker 3: Yeah.

945
00:46:08,840 --> 00:46:12,200
Speaker 4: Yeah, So direct ownership of real estate, which is like

946
00:46:12,200 --> 00:46:14,759
Speaker 4: buying a property with a partner managing it, even if

947
00:46:14,760 --> 00:46:17,319
Speaker 4: you hire a property manager, like I invest in out

948
00:46:17,360 --> 00:46:20,000
Speaker 4: of state, I have a property manager. It's not passive.

949
00:46:20,239 --> 00:46:24,120
Speaker 4: I do almost nothing. I'll be honest. I spend maybe

950
00:46:24,280 --> 00:46:27,479
Speaker 4: five hours a month on it. But it still takes work,

951
00:46:27,560 --> 00:46:31,000
Speaker 4: and you know, I still have to pay attention. Syndications

952
00:46:31,280 --> 00:46:34,440
Speaker 4: are when a bunch of investors pool their money together

953
00:46:34,719 --> 00:46:38,440
Speaker 4: to buy large assets, like a multifamily building or an

954
00:46:38,440 --> 00:46:42,360
Speaker 4: office building or whatever. And in those types of deals,

955
00:46:42,360 --> 00:46:45,480
Speaker 4: there are typically two classes of investor. One is called

956
00:46:45,480 --> 00:46:48,600
Speaker 4: a general partner, often referred to as a GP or

957
00:46:48,640 --> 00:46:51,719
Speaker 4: a sponsor. That's the person who finds the deals, makes

958
00:46:51,760 --> 00:46:55,319
Speaker 4: all the decisions, actually does all the work. And then

959
00:46:55,680 --> 00:46:58,600
Speaker 4: there is a class of investor called a limited partner,

960
00:46:58,800 --> 00:47:02,279
Speaker 4: also called an LP, where you basically give money and

961
00:47:02,360 --> 00:47:06,479
Speaker 4: then do nothing. And so I invest as an LP

962
00:47:06,719 --> 00:47:09,360
Speaker 4: in some deals. Again, this is sort of my way

963
00:47:09,400 --> 00:47:15,759
Speaker 4: of exposing myself to multifamily and to value ad investing.

964
00:47:15,960 --> 00:47:18,640
Speaker 4: So I invest in a lot of places where people,

965
00:47:19,080 --> 00:47:24,520
Speaker 4: you know, my partner will buy a distressed multifamily property,

966
00:47:24,680 --> 00:47:26,640
Speaker 4: fix it up, get it up to speed, and then

967
00:47:26,680 --> 00:47:28,960
Speaker 4: sell it off and hopefully we all make some good money.

968
00:47:30,440 --> 00:47:33,720
Speaker 4: But those kind of deals are very very passive because

969
00:47:33,760 --> 00:47:37,080
Speaker 4: once you write the check, you don't have any rights. Really,

970
00:47:37,280 --> 00:47:40,960
Speaker 4: You just wait until the LP says that they're selling.

971
00:47:40,719 --> 00:47:43,040
Speaker 3: The property and hopefully you get your cash.

972
00:47:43,080 --> 00:47:48,200
Speaker 4: So that is about as passive as it gets It's

973
00:47:48,280 --> 00:47:50,680
Speaker 4: kind of like buying an index fund, right, Like you

974
00:47:50,719 --> 00:47:53,120
Speaker 4: pick the fund and then once you do it, you

975
00:47:53,200 --> 00:47:54,759
Speaker 4: kind of just take your hands off of it.

976
00:47:54,920 --> 00:47:57,520
Speaker 2: Wait. Yeah, so that is fairly passive, but also probably

977
00:47:57,520 --> 00:47:59,319
Speaker 2: not what most folks are thinking of, I guess as

978
00:47:59,360 --> 00:48:02,399
Speaker 2: they're thinking about dabbling and getting into real estate.

979
00:48:02,400 --> 00:48:04,640
Speaker 1: And also a lot of due diligence required if you're

980
00:48:04,640 --> 00:48:05,960
Speaker 1: gonna invest in that way too.

981
00:48:05,880 --> 00:48:08,799
Speaker 4: Totally, and I don't recommend people start that way. Yeah,

982
00:48:08,840 --> 00:48:11,759
Speaker 4: there's no liquidity, which is really important to know, Like

983
00:48:11,800 --> 00:48:14,080
Speaker 4: you can't get your money out, you can't sell your

984
00:48:14,080 --> 00:48:15,799
Speaker 4: share to someone else like you're in it.

985
00:48:16,440 --> 00:48:18,200
Speaker 1: The minimum investment is fifty k. You have to be

986
00:48:18,200 --> 00:48:20,320
Speaker 1: an a credited investor. There's a whole lot of hurdles

987
00:48:20,360 --> 00:48:21,239
Speaker 1: you have to jump through too.

988
00:48:21,400 --> 00:48:24,200
Speaker 4: Yeah, so that stuff is passive and I don't recommend

989
00:48:24,239 --> 00:48:29,560
Speaker 4: people start there anyway. I think the spectrum of how

990
00:48:30,040 --> 00:48:33,560
Speaker 4: passive direct ownership is is big. Right. If you want

991
00:48:33,560 --> 00:48:35,879
Speaker 4: to be a flipper, that's a job. If you want

992
00:48:35,920 --> 00:48:39,520
Speaker 4: to buy, you know, a long term rental that's in

993
00:48:39,560 --> 00:48:42,520
Speaker 4: your market, you could probably spend less than ten hours

994
00:48:42,560 --> 00:48:43,160
Speaker 4: a month on it.

995
00:48:43,200 --> 00:48:43,400
Speaker 3: You know.

996
00:48:43,440 --> 00:48:46,520
Speaker 4: It's not like some crazy time investment, so you just

997
00:48:46,560 --> 00:48:48,120
Speaker 4: kind of have to think about what time you're willing

998
00:48:48,160 --> 00:48:48,600
Speaker 4: to put in.

999
00:48:48,920 --> 00:48:52,520
Speaker 2: Well. Nice, well, Dave. Earlier you mentioned the buy rent

1000
00:48:52,680 --> 00:48:55,799
Speaker 2: calculator that y'all have over at Bigger Pockets, and of

1001
00:48:55,800 --> 00:48:58,480
Speaker 2: course you've got your multiple podcasts now, But where else

1002
00:48:58,480 --> 00:48:59,960
Speaker 2: can folks learn about you what you're up to you?

1003
00:49:00,400 --> 00:49:03,160
Speaker 4: Yeah, so check me out on Bigger Pockets, or if

1004
00:49:03,200 --> 00:49:05,759
Speaker 4: you're into sort of economic data and news, you can

1005
00:49:05,760 --> 00:49:08,640
Speaker 4: follow me on Instagram where I'm at the Data Deli,

1006
00:49:09,520 --> 00:49:12,759
Speaker 4: where I share a lot of my work that I

1007
00:49:12,800 --> 00:49:15,839
Speaker 4: do at Bigger Pockets doing housing market analysis and all that.

1008
00:49:15,960 --> 00:49:19,080
Speaker 1: Awesome, Dave, We've really appreciate you joining us today, man,

1009
00:49:19,080 --> 00:49:19,799
Speaker 1: thank you so much.

1010
00:49:20,040 --> 00:49:22,800
Speaker 3: Yeah, absolutely, thanks for having me, Joel.

1011
00:49:22,880 --> 00:49:25,560
Speaker 2: Nice to dive back into a topic that is sort

1012
00:49:25,600 --> 00:49:27,120
Speaker 2: of at the roots of how the money and some

1013
00:49:27,160 --> 00:49:29,279
Speaker 2: of the things that attracted us to at least talking

1014
00:49:29,320 --> 00:49:31,480
Speaker 2: about personal finance on a personal level, you know, back

1015
00:49:31,520 --> 00:49:33,520
Speaker 2: in the neighborhood, hanging out on the front porch, drinking

1016
00:49:33,520 --> 00:49:35,520
Speaker 2: the beer, being like, all right, let's talk about let's

1017
00:49:35,520 --> 00:49:38,560
Speaker 2: talk about rentals. You into it, Yeah, let's do it.

1018
00:49:38,640 --> 00:49:41,200
Speaker 1: I still love talking about real estate because and I

1019
00:49:41,200 --> 00:49:42,640
Speaker 1: think part of it is what Dave was talking about,

1020
00:49:42,719 --> 00:49:45,680
Speaker 1: kind of the simple accessible. Everybody has had to pay

1021
00:49:45,719 --> 00:49:48,239
Speaker 1: rent at one point in time for a place to

1022
00:49:48,280 --> 00:49:51,720
Speaker 1: live and see it, you can go visit it. It's changeable, yes, exactly,

1023
00:49:51,760 --> 00:49:53,799
Speaker 1: So I think that's why people are attracted to it.

1024
00:49:54,040 --> 00:49:56,000
Speaker 1: But what was your big takeaway from this combo?

1025
00:49:56,120 --> 00:49:58,319
Speaker 2: I think mine was when we were talking about some

1026
00:49:58,360 --> 00:50:00,839
Speaker 2: of the different real estate influencers out there and how

1027
00:50:00,880 --> 00:50:04,120
Speaker 2: they tend to overcomplicate the process. And we want as

1028
00:50:04,160 --> 00:50:07,000
Speaker 2: consumers slash investors in this case, but we want things

1029
00:50:07,000 --> 00:50:08,719
Speaker 2: to be so easy, and we let that sort of

1030
00:50:08,719 --> 00:50:13,480
Speaker 2: consumer nature overcome our approach to investing and truly like

1031
00:50:13,560 --> 00:50:15,880
Speaker 2: it doesn't need to be packaged and placed into a

1032
00:50:15,920 --> 00:50:19,719
Speaker 2: course and delivered to you over six weeks. Instead, it

1033
00:50:19,760 --> 00:50:22,200
Speaker 2: can just be something where you're like looking for a

1034
00:50:22,239 --> 00:50:24,399
Speaker 2: long time, you're looking at a specific market. You become

1035
00:50:24,520 --> 00:50:27,680
Speaker 2: an expert on that market and specific properties, and you're

1036
00:50:27,680 --> 00:50:29,160
Speaker 2: able to spot the deals and you say, oh, wait

1037
00:50:29,160 --> 00:50:31,960
Speaker 2: a minute, that's that's actually really that's priced really well.

1038
00:50:32,000 --> 00:50:33,719
Speaker 2: It doesn't have to be more complicated than that. Yeah,

1039
00:50:33,719 --> 00:50:35,279
Speaker 2: if you know what the rents are going to be

1040
00:50:35,320 --> 00:50:37,279
Speaker 2: for a nice three to two in an area that

1041
00:50:37,320 --> 00:50:39,640
Speaker 2: has a high demand, maybe it's in a great school district,

1042
00:50:39,680 --> 00:50:42,080
Speaker 2: whatever the parameters are, it can be as easy as that.

1043
00:50:42,080 --> 00:50:43,759
Speaker 2: It doesn't necessarily have to be this thing that you

1044
00:50:43,760 --> 00:50:45,120
Speaker 2: have to take some sort of You don't have to

1045
00:50:45,160 --> 00:50:48,160
Speaker 2: join a mastermind drop five figures in order to become

1046
00:50:48,200 --> 00:50:50,960
Speaker 2: a successful real estate investor. Dave point, but that's what

1047
00:50:51,000 --> 00:50:53,120
Speaker 2: they want you to think. I know, I know, because

1048
00:50:53,120 --> 00:50:55,200
Speaker 2: that's how they're making their money. That's how their bread

1049
00:50:55,200 --> 00:50:57,879
Speaker 2: gets bettered, exactly. So I appreciate that Dave was able

1050
00:50:57,880 --> 00:50:59,759
Speaker 2: to highlight that because that's similar to how it is

1051
00:50:59,760 --> 00:51:01,520
Speaker 2: that you I approached investing in real estate.

1052
00:51:01,520 --> 00:51:03,000
Speaker 1: That's why we wanted to have Dave on too, because

1053
00:51:03,000 --> 00:51:04,960
Speaker 1: we think he's just one, he's way smarter than us.

1054
00:51:04,960 --> 00:51:07,600
Speaker 1: But then two, he thinks about real estate in the

1055
00:51:07,600 --> 00:51:09,040
Speaker 1: way that you and I think about real estate, just

1056
00:51:09,040 --> 00:51:10,759
Speaker 1: on a much deeper level because he eats and breede

1057
00:51:10,800 --> 00:51:11,400
Speaker 1: it every day.

1058
00:51:11,360 --> 00:51:11,440
Speaker 3: Ye.

1059
00:51:11,640 --> 00:51:15,000
Speaker 1: So, I think my big takeaway was when he talked

1060
00:51:15,040 --> 00:51:17,319
Speaker 1: about the flexibility of real estate right, and he said,

1061
00:51:17,400 --> 00:51:20,320
Speaker 1: that's what most people want, and there are one hundred

1062
00:51:20,320 --> 00:51:22,040
Speaker 1: ways you can slice this thing up. It doesn't have

1063
00:51:22,120 --> 00:51:24,600
Speaker 1: to look like somebody else's approach to real estate. But

1064
00:51:24,640 --> 00:51:26,200
Speaker 1: as long as you keep that in mind and say, hey,

1065
00:51:26,200 --> 00:51:29,080
Speaker 1: guess what, maybe my route to becoming a quote unquote

1066
00:51:29,120 --> 00:51:30,840
Speaker 1: real estate mobile that makes sense for kind of the

1067
00:51:30,880 --> 00:51:33,319
Speaker 1: goals I want to achieve is buying one property every

1068
00:51:33,360 --> 00:51:36,200
Speaker 1: three years until I get five properties.

1069
00:51:36,200 --> 00:51:38,120
Speaker 2: So let's say that's fifteen years down the road.

1070
00:51:38,400 --> 00:51:40,480
Speaker 1: That's cool, man Like, If that's what you want to do,

1071
00:51:40,520 --> 00:51:42,279
Speaker 1: and that's the approach you want to take, that can

1072
00:51:42,320 --> 00:51:45,359
Speaker 1: be incredibly that could be successful for you. You don't have

1073
00:51:45,400 --> 00:51:48,720
Speaker 1: to own one hundred properties in order to be some awesome,

1074
00:51:48,760 --> 00:51:51,080
Speaker 1: over the top real estate investor owning a handful of

1075
00:51:51,080 --> 00:51:53,120
Speaker 1: properties for a whole lot of people, Matt. And when

1076
00:51:53,160 --> 00:51:55,160
Speaker 1: you look at the numbers, that's the average real estate

1077
00:51:55,160 --> 00:51:57,279
Speaker 1: investor owned somewhere between two and ten rental properties. That

1078
00:51:57,360 --> 00:52:00,000
Speaker 1: is the vast majority of real estate investors across the country.

1079
00:52:00,320 --> 00:52:02,040
Speaker 1: So I think a lot of people put a bunch

1080
00:52:02,080 --> 00:52:05,960
Speaker 1: of pressure on themselves to well successful real estate investor

1081
00:52:05,960 --> 00:52:08,839
Speaker 1: looks like this. That's not necessarily the case, and there

1082
00:52:08,880 --> 00:52:11,320
Speaker 1: is a lot of flexibility inside of real estate investing

1083
00:52:11,600 --> 00:52:13,600
Speaker 1: to be able to achieve what you want to achieve,

1084
00:52:13,800 --> 00:52:15,719
Speaker 1: not what someone else says is successful.

1085
00:52:15,800 --> 00:52:16,480
Speaker 2: Totally agree.

1086
00:52:16,520 --> 00:52:16,799
Speaker 4: All right.

1087
00:52:16,840 --> 00:52:19,440
Speaker 2: The beard you and I enjoyed today was an attention Please,

1088
00:52:19,600 --> 00:52:23,080
Speaker 2: which is a double IPA by bearded iris. What'd you think?

1089
00:52:23,239 --> 00:52:25,320
Speaker 1: I thought this was kind of light, a little bit weedy,

1090
00:52:25,480 --> 00:52:27,000
Speaker 1: A little bit of light lemon vibes is what I

1091
00:52:27,040 --> 00:52:27,400
Speaker 1: was getting.

1092
00:52:27,400 --> 00:52:29,360
Speaker 2: Oh yeah, I think the Yeah, I totally pick up

1093
00:52:29,360 --> 00:52:31,960
Speaker 2: on the sharpness that you get from the like the lemonee.

1094
00:52:31,960 --> 00:52:35,839
Speaker 2: I think that's from the citra but tropical notes for sure.

1095
00:52:35,880 --> 00:52:38,000
Speaker 2: But overall I wasn't a huge fan of this, and

1096
00:52:38,000 --> 00:52:39,879
Speaker 2: I wonder I looked, I noticed the date on here

1097
00:52:40,000 --> 00:52:41,640
Speaker 2: is a little bit older. It kind of has like

1098
00:52:41,640 --> 00:52:45,920
Speaker 2: that older ipa sort of metallic tinge to it.

1099
00:52:46,000 --> 00:52:47,879
Speaker 1: That sitting on the shelves too long.

1100
00:52:48,000 --> 00:52:50,320
Speaker 2: Yeah, I think so kind of a bummer because I

1101
00:52:50,400 --> 00:52:52,520
Speaker 2: was looking forward to enjoying the heck out of this one.

1102
00:52:52,520 --> 00:52:54,799
Speaker 2: But maybe I just don't like pillow. It also says

1103
00:52:54,800 --> 00:52:57,200
Speaker 2: on here it's pillowy and so, which I tend to

1104
00:52:57,400 --> 00:52:59,279
Speaker 2: see is like, I don't know, soft, and I like

1105
00:52:59,320 --> 00:53:03,480
Speaker 2: this like sharp abrasive, I pa is not like overly bitter,

1106
00:53:03,600 --> 00:53:07,160
Speaker 2: but ones where you can really the hot presence shining through.

1107
00:53:07,600 --> 00:53:10,120
Speaker 2: You don't really get that with this one here, guy, Buddy,

1108
00:53:10,840 --> 00:53:13,040
Speaker 2: I see why sometimes you want to just cut to

1109
00:53:13,080 --> 00:53:16,440
Speaker 2: the chase. But I'm glad, even still glad that you

1110
00:53:16,440 --> 00:53:18,799
Speaker 2: and I got to enjoy this one today on the podcast.

1111
00:53:19,120 --> 00:53:20,680
Speaker 2: Head over to the show notes at how to money

1112
00:53:20,719 --> 00:53:22,320
Speaker 2: dot com where you can find some of the different

1113
00:53:22,360 --> 00:53:26,120
Speaker 2: links that we mentioned during our discussion with Dave Meyer

1114
00:53:26,200 --> 00:53:29,480
Speaker 2: of Bigger Pockets Fame during our conversation today. But Buddy,

1115
00:53:29,480 --> 00:53:32,799
Speaker 2: that's going to be it for this episode until next time.

1116
00:53:32,960 --> 00:53:35,759
Speaker 2: Best Friends Out, I'm best Friends Out.