356: 30+ Rentals (in a Pricy Market) Through BRRRR and Section 8 with Joe Asamoah

This is the BiggerPockets podcast show number 356.

You'll find out the greatest demand for houses are four, five and six bedroom houses. So for those people who have the wherewithal to create those four, five and six bedroom, you create what you kind of in an environment I call the nirvana. The ultimate goal of any business holder which is to have a product which is high demand, low supply.

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What's going on everyone? This is Brandon Turner, host of the BiggerPockets podcast here with the co host of of the Year winner 2019. I don't know, is there an award ceremony? David Green.

Well, let's hope I'm more than one year, but thank you, I appreciate that. I'll make sure I mention you in my acceptance speech.

I would hope you would. Definitely hope you would. So what's up buddy? What you been up to? Anything fun?

Well, I think I mentioned that I just got my broker's license so I'm kind of changing the David Green team around where I'm not going to be working with the clients as much. I have team members, I'll kind of be overseeing it, making sure deals close and we find deals for people, but letting other people handle kind of the day to day operations. I'm still speaking a lot and I just started a mortgage company so I'm getting a little bit, I mean for the last three years or so, not really the last year and a half I've done less investing and more focus on building up my real estate business. And it was great to do it, but it's investing is more fun. So I'm just slowly moving more now that I've got people around me that can do that work and we can still represent people well. Getting back into flipping houses and buying apartment buildings and buying some more single family homes, I'm going to be looking for people to help me analyze deals and kind of do the work of making sure this stuff gets pushed forward. So if you live near me and that's something, something you're interested in, definitely hit me up and then hopefully we've got more stories to share on the podcast because real estate investing is freaking fun.

It is freaking fun. And Speaking of freaking fun, today's show was freaking fun. In fact, this is one of my. I know I've said this before, but this is seriously one of my favorite shows, if not my favorite show. We've done definitely top five, top three of the BiggerPockets podcast. I think ever in terms of just like stuff I've never thought about before and just like so good. Anyway, our guest today is Joe Asamoa. Joe is in the Washington D.C. area and just like he figured out, he's figured out an amazing system and process for buying expensive properties in an expensive market and still making them cash flow keeping and having the ability for long term appreciation. It's really, really cool stuff. Thank you guys. I like it a lot. Before we get there, let's get to today's quick tip tip. All right, today's quick tip is based on something David actually just said and you and I talked about this earlier, so hope you don't mind me bringing this back up, but you mentioned how you are now a broker, not just an agent and so you can focus more on being the big picture. And one thing you and I talked about is how like just by calling yourself the broker now, it like your identity has changed in how you view yourself and how other people view you. You're not the guy showing every single house and doing that. You're the managing broker of the thing. Right. It's not like anything actually necessarily had to change by having that title change. But titles do matter in that their identity. Right? So my quick tip for you guys today is ask yourself, what identity are you giving yourself in your real estate business? So are you. I'm a real estate investor or I own a real estate, you know, investment company. I'm the CEO of a real estate investment company because the identities that when the titles we give ourselves are how our subconscious then treat ourselves and then do activities or don't do activities based upon that. So my quick tip is to evaluate your identity today and figure out what are those words that come after the phrase I am.

That's deep. He went deep with that one.

Yeah, that's what I do. That's what I do.

All right.

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It'S time to get to today's show. Last thing I'll say before we get to the show though. A if you're enjoying this show, if you like the Bigger Pockets podcast, you guys do me a quick favor. If you've not yet left us a rating and review over on itunes, it would be much appreciated. Just go over to itunes, look for our show, you can leave a rating review there. And of course if you haven't subscribed, subscribe as well. That's how itunes knows a show is good. Enjoy. Dries it up in the rankings. And so I would like to see the show continue to do well. I hope you do as well. And that's how we do it. So again thank you to everyone who's done that. And now I think we should just get into this show because it is freaking awesome.

No more ado.

No more ado. Let's get to it. All right, Joe, welcome to the Bigger Pockets podcast, man. Good to have you here.

Thank you very much, Brandon. It's a pleasure and honor to be here.

Well, thanks. This should be a lot of fun. I know Kevin hasn't been talking good stuff about you lately, so let's. Yeah, let's. Let's. Let's dig into your story. So, Kevin. I mentioned Kevin. Kevin's our producer of the Bigger Pockets podcast, as well as the business podcast and the money podcast. Kevin lives in D.C. and he actually met you at a local meetup, and he's again, just been talking like you're like the godfather of real estate there in D.C. so that's.

Yeah.

I don't know.

It's a good thing.

You are the king of real estate. That's better than the Godfather. You don't kill people. That's what I hear anyway, so thank you.

Yeah.

Let's go into your story. How did you.

How did you.

I mean, how'd you get into real estate? Tell us your story. How you. How'd you go from. What were you doing before into real estate? Let's talk through that.

Okay.

Yeah.

I used to live in England and came to the U.S. about 32 years ago. When I came to the U.S. you know, literally came with two suitcases and $100 in my pocket and knew one person, which is my boss. Anyway, I was working. He was working a really intensive job. One day I came back from vacation and found out he'd been fired. Nothing for anything he did wrong. It was just that there was a reorganization of the company and the new guy brought his kronas and my boss was let go. So what happened was that a few weeks later, I met him for a cup of coffee, and he told me something which is really, totally ground shaking for me. And that was, hey, Joe, it's no big deal. This is America. These things happen. It's okay for me because I have these rental properties, and so I've got this rental income coming in. So he says to me, whatever you do, Joe, look what happened to me. This could happen to you. Make sure you have a plan B. And in my case, my plan B was real estate. That's what he was telling me. And this guy had like 10 houses at that time. I couldn't fathom how anybody could have more than one house. It was like how is that possible?

So he says, no, but you know, whatever you do, make sure you do three things. One, make sure you buy houses. If you buy them, make sure you keep them and make sure that you continue to increase your portfolio. That's what essentially he told me. And that was a trigger that got me intrigued into real estate about 32 years ago. Needless to say, I bought my first house after I watched an infomercial and that was a complete and utter disaster. Everything, complete disaster. Everything that could have gone wrong, went wrong. I don't want to toy there, were you the details. But I could go through that. But essentially I learned from that experience everything, what not to do. And then I bought another one. Bought another one, just kept on going until about 13, 14 years ago when I my income from my properties equal the income I was making from my job. And that's when I was able to leave that.

Wow, so you're just full time real estate investor now?

Yes, yes, because I have the income coming through from my real estate investments.

That's awesome. Now, now you live, the problem is though, you live in an expensive market. Washington D.C. i know, is just crazy expensive and you can't invest in real estate in an expensive market. So clearly you're wrong. I mean, okay, so how are you, how are you? How do you manage to invest in real estate in an expensive market?

Well, my take is that the real money, the real money, after all is said and done, is appreciation, you know, and not all areas appreciate the same. And so there's something unique about capital cities. I've done quite a bit of travel around the world and they're all essentially the same. You know, usually whenever I think of, whenever you say a country, if I say to you England, you're probably going to say London. If I say to you France, you're probably going to say Paris. If I say to you Iraq, you're probably going to say Baghdad. I mean, it's just the way it is. Most capital cities, they have certain things going for them. One is there's only one. Two, that's usually where the money is. It's usually the economy which is really tied to real estate. It tends to be a lot more resilient. So when the economy goes downhill, most capital cities usually tend to be a lot more resilient than other parts of the country. And because it's where the money is, if you own real estate in the capital cities over, over the long haul, they tend to appreciate in value. So that's the reason why, I mean I live, I just happen to live here. But it's the same dynamics throughout the world. And so the issue was, how do you get started? How do you actually start owning real estate in this expensive potential market? And the thing is, the reality is always expensive. It's expensive 10 years ago, it's expensive five years ago, it's expensive today. And I can guarantee you it's going to be expensive five years from now. And so the issue is, how do you get started? And there are ways to do that. You know, obviously I do the BRRRR strategy and I can go to how I make the BRRRR strategy work for me in this market here.

Yeah. So first of all, before, just in case people haven't heard brrrr, which I'm sure most people have, but if they're new to this podcast, haven't heard that term brrrr, can you explain what. Yeah, what is that? And then how do you incorporate that in your business?

Okay, the BRRRR strategy is incorporate. Well, it's defined by yourself, which is.

Red, refinance, repeat. So essentially, if you believe that the real money's appreciation, then obviously the first part is to buy. At least in this market here, the rents vary from area to area. I do a lot of section eights, which I can describe later on, but the rents in the Section 8 program, for example, is based primarily on the neighborhood or the zip code where the house is. And then secondly, the number of bedrooms and the number of bathrooms. So how do you create value such that you can have the maximum rent which can support the debt that you have? Okay, and so typically I would buy a three bedroom house, I would add two bath, two bedrooms to make it into a five bedroom house. And the rents for a five bedroom house, if it's in a certain area or certain areas, you can get high rents. So by adding value, by understanding how the program works, you can really cash flow. So a three bedroom house, for example, may be negative cash flow. As a four bedroom house you may break even. As a five bedroom house, you could get cash flow. That makes sense.

So let's say David buys this one house and he doesn't do anything to it. As a three bedroom, it'll be negative cash flow. Okay. If David decides to upgrade it to a four bedroom house, he'll break even. But if he's sort of savvy and understands how he can sort of create extra bedrooms from this asset, he can now cash flow. So three different people will get three different cash flows from this one asset.

Oh, that's genius. That's genius. I'm just thinking I just bought a property here in Maui and it, it's, I could make it a giant five or six bedroom house or I could keep it as a triplex, which is what it is. And I never considered making it one like larger. You know, I'm definitely, actually just while you were saying that, I messaged my, my buddy Ryan. I was like, can you find out what a five bedroom house would rent for with Section 8? Because like what a great idea. Like I don't know if I, if I could get way more rent out of that because I mean there's not a lot of them and so, you know, maybe the demand's there. So you're finding you're taking these homes, adding bedrooms, Is that the idea? You're remodeling them and adding bedrooms?

Yeah. So when I, you know, so as part of the Burr Bar, the buy side is when I go to a house, most of the time it's spent in the basement because that's really where you can get the extra bedrooms.

Okay.

So it's got, you know, they obviously for code there's certain requirements for a bedroom, but essentially I spend the time saying how can I, or is it possible to create additional bedrooms in this one house, primarily in the basement. And if it, if it, if I can do that and I meet all the requirements for the code, then it's, it meets my criteria. If it doesn't, I can't make two bedrooms down there. I'm not going to buy it. That's just one of several criteria factors I use in deciding whether to go or no go for a house.

Interesting.

Okay, that's awesome. Now one question I have is, are there legal requirements for what makes something a bedroom? Because I know if you're doing HUD housing, there's government standards that you have to conform to. So can you share a little bit about what makes it a legal bedroom so that people can follow in your path?

Yeah. Typically there's four requirements. Okay. So the first one is the height, the ceiling height. So if the ceiling height is not above a certain amount, usually 7 or 7 foot 2, then it's not considered a bedroom height. Second thing is got to have natural light and ventilation. So you can't have a room with no windows and call that a bedroom. Okay. And that window has got to have what we call egress. So in the event of emergency, there's got to be two forms of egress. One to get into that room and one to escape from that room. Okay. So the window that you have has to be a certain size such that it'll allow somebody to escape in the event of a fire. So you can't have those little basement little windows. Although it's got night light and ventilation, it's not egress. So, you know, an inspector could fail that bedroom based on that alone. And obviously it's also got to have a closet. It's also got to have electrical outlets. It also cannot have a gas, you know, like a gas meter or something in that room. So there are some herd requirements of a bedroom. And so I look at those things in deciding whether what. First of all, what I need to do, and secondly, can I. Is it cost prohibitive to make those changes?

There we go. That's perfect. I got that. So, Joe, one of the things I think is brilliant about what you're doing is you've really niched down and you've gotten out of the analysis paralysis, because you know exactly what you're looking for. You have criteria that you're looking for, and when you find it, you know, you can jump on that house. And that's something successful people do well. So as far as what you look for in a property that really catches your eye and says, oh, that's one I want to look deeper into, what are some of the things that somebody can look for that you look for? To let you know, this is a property that my strategy would work with.

Yeah, it makes a lot of sense because I can provide criteria to the wholesalers and real estate agents and so on, exactly what I'm looking for. But here's the beauty of all this, is that in Washington D.C. i'm pretty sure it's most other cities, most houses are naturally three bedrooms. Okay? They have three bedrooms upstairs, primarily on the first level. You may have a kitchen, kitchen, living room, dining room, et cetera. But the basement is where you can do the most creativity. So since there aren't many, so since there are naturally three bedrooms, the opportunity exists to. To create the five. Okay? And not everybody can create the five I've just described to you, but therein lies the opportunity. Because when you speak to the, the housing authorities and things like that, you'll find out the greatest demand or houses are four, five and six bedroom houses. People with four, five and six bedroom vouchers, they just can't find anything because those type of houses don't exist naturally. So for those people who have the wherewithal to create those four, five and six bedroom, you create what you're kind of in an environment I call the nirvana, the ultimate goal of any business holder, which is to have a product which is high demand, low supply. Okay. The people with those kind of vouchers, there's a lot of them and they can't find a house. Okay. So if you have that product, there's a high demand for it and there's low supply. Yeah. So you can always attract quality tenants.

Do this show. This show is changing my entire. Like my entire viewpoint on this. This property I just bought here in Hawaii. So Ryan, my partner Ryan, just. I asked him if he could look up the rates. Right. So here's what they are. So for Section 8 in my area, and again, it's gonna be higher than other areas, but maybe similar to yours, maybe lower than yours. A studio is 1200amonth, roughly. A one bedroom 14, a two bedroom, 17. So it goes up a little bit. Add the third bedroom and you're at 2,600. So we're going from 17, it's 1781 to $2,600. So we're adding eight. Is that $800? Just by adding that third bedroom, add a fourth bedroom, we're up to $3,200. And at a fifth bedroom, we're up to $3600. So I mean, the jump from a two bedroom in my market to a three bedroom is $800 a month difference for adding a bedroom. Like, so I can take. I'm just thinking out loud here, but I can take my triplex, which I bought, turn it instead into two duplexes and. Sorry, I mean, take my triplex and instead turn it into a duplex, but go three and three on each one. And I already have in my mind how I'm gonna do this. And I'd actually make more money off of having fewer tenants and Section eight if I go Section eight with the government. That's fascinating.

Yeah.

It's blowing my mind.

Yeah. I mean, there's another side to this, which is obviously managing the relationship with the tenants, which I'll talk about, or finding the right tenants and then managing that relationship. But once you figure that part out, it's really. I mean, I don't understand why more people aren't doing it.

Yeah, yeah.

So you've taken something that a lot of people are saying that they want to avoid Section 8 housing, and you've actually found a way to make it work for you better than what it would be like to not be doing the voucher. Voucher system. I think that's awesome that there's a stereotype that goes along with not wanting to rent A section 8 houses and you've completely dismantled that.

Yeah, I mean, you're right, David. There's a stereotype of Section 8. You know, if I rent a voucher holder, they're going to trash my house. There's going to be a bunch of kids running around and you know, blah, blah, blah, my house can be a crack house and so forth. Now, I'm not saying that doesn't exist, but I'm saying that there's a core group of people, in fact, probably the majority, where that does not apply, okay? They are no different than you and I, okay? They don't want to be shot at, no more than you want to be shot at, okay? They are very protective of their family, their children, just like yourself. They want to live in a nice area. They know what a slum lord is. They know a crappy area. They know that they don't want to go there. They don't want to live there. They just want to be in a nice place where their kids are safe. They want to be in a pleasant environment. They're just looking for somebody to give them the opportunity, okay? And what I found is that there's what I call the Nordstrom's of the voucher holders, okay? I don't know if you have Nordstrom's where you are that group of people. The Nordstrom's are the voucher holders. They, I mean, they are no different than you and I. The only thing is that they can't. They don't have the money to be able to get out of their environment. And so if you have a. And one thing I know about these folks, they will not live anywhere, okay? They want to be protective of their children just like yourself. They want the same amenities that you are looking for. Shops, clothes, sorry, shops, schools, recreation, transportation and things like that. And they don't want to live in a rent from a slum lord. They want a nice house in a nice area, okay? So if you have a product that they gravitate to because they know exactly what they want, I know exactly who they are, what they're looking for. If you have something that meets their needs, I'm telling you, you can set the bar for your screening so high that they will not be intimidated by that. And you can attract the creme de la creme. You go to houses where it's spotless, you know, I mean, you couldn't believe I went to on Thursday, okay? This lady, she's living in a project, you know, and she's been there for 20 something years. She has installed new hardwood floors, okay. She repainted the house because she has pride of rentorship. So there's a group of people who, if you give them the chance, okay, they're yearning for that opportunity. They will repay you back four ways. One way is, first of all, they'll pay the rent. Two, they'll take care of your property. Three, they'll be pleasant to deal with. Fourth, they stay a long time. Okay? And the key, the absolute key to single family, which I'm sure you know, David and Brandon, is if you can't figure a way whereby you can minimize turnover, okay, you make no money. Yeah.

Turnover kills you, they'll kill you.

If you can't figure a way to minimize that to next to zero, you make no money, okay? Because every turnover is going to cost you two to three months lost income after all is said and done. So.

Well, plus the fact you have to go in and rehab the property, we call it a turn. And that costs a lot of money too.

Exactly. And all the aggravation that goes to it. So if you have a. I'm averaging. I have 10 year tenants who are 5, 10, 15. My longest tenant is 22 years.

Wow.

Okay. On a 15 year mortgage. Okay, think about that one.

The idea is that they stay, they don't leave. Okay. Which means that the cash flow you make every month stays in your pocket.

Yeah.

Because it's business 101. It's cheaper to have an existing customer stay than is to go out, find another one. Yeah. So. So from a landlord, it's cheaper to have an existing customer happy and want to stay in your home than it is for them to leave. And then you have to come, you know, find a new one as well.

Well, that's a really good segue, actually. So what are some of the things that you do to keep your tenants happy and make sure that they stay there for a long time? Like how do you find that awesome tenant you're talking about?

Oh, boy. It all starts with screening, Okay? I have a very, very thorough. You know, I mean, I'm the, I'm trying to attract the Nordstrom's, okay. And the, the kind of product I have, the house that I have. These are nice houses. I mean, they're HETV quality, They've got granite countertops, they have hardwood floors, they have stainless steel appliances. These are nice homes. Wow.

For section eight.

The section eight, Yes. I mean, the current rehab, we're Doing right Now, we spend 175,000 on the rehab and so on. So these are HGTV quality. I would have no problem living there myself. Okay. Yeah. So when you have a product like that, okay, you can attract the creme de la creme.

And you can set the bar high because no matter how high you are, some people will gravitate towards that. So how do I do it? So it's four parts.

Obviously. I do my first. I start off with a product, okay. And a great product in a great area. So once I advertise, people come to my house. I have an eight page application form, okay. It's very intimidating. It asks a lot of questions. And they tell, I tell them straight up front in bold. This is what we're going to do. If you're interested in this house, I got to call your current landlord, previous landlord. I'm going to do a credit check, I'm going to check your income. But fourthly, which is more important, I'm going to go to your house, I'm going to go to the home to see where you live. Okay. Because what I found is that how somebody keeps their house today is how my house will be in three months, okay. If I like what I see when I go there, I feel pretty good that my house will be in good condition.

So you actually go to their house?

Yes.

Like at what point? I mean, like it's when they apply or when they're just about, you're ready to approve them. Like that's a, that's a investment of your time to go and go check out their house. I mean, obviously a good one.

But yeah, don't forget, David, I'm looking at a 15 year relationship, okay. This is not a one year lease, okay. Or this is a five to 10 to 15 year relationship. And I don't mind investing a couple of hours of my time, okay. To really make the right decision because I'm, you know, we're talking with a 6, $700,000 asset, okay. I want to know who's going in my house. I want to make sure that this is the right person. I want to make sure that they have a history of complying with the program and also taking care of their house. So I don't have a problem, you know, going to the home. And as I said, I, I state that on the application form in bold. We're going to do this, okay? So if you are a crappy land. Well, so if you're, let's say, iffy tenant, okay. Who, you know, you May say, well, why do you want to come to my house? You know, no other landlord is into my house. You know, what the hell's going on? You know, and. But I explained that, and they don't have a problem with that. They say, if you want to go to my house, you can go to my house right now. Because I keep my house exactly the same way that you have it here. Exactly. You can call my landlord right now. He'll tell you.

I pay my rent on time. I'm a 10 out of 10. They'll tell you that. I mean, that's the caliber of people that you're dealing with. And so, yeah, so I. That's the screening process. That's to. That's before they even get into the house. Once they're in the house, it's now managing that relationship. And things, which I do, every Mother's Day, I send all my tenants bouquets of flowers.

Every Christmas, Mother's Day, you send flowers?

Yes.

Every Christmas, we send a Christmas presents to the families. If the kids get A's at school and show me their report cards, I give them a $50 gift certificate. Here's another one. What do you think of this one? We have a timeshare, which we can allow. We can go to not too far from here, a couple of hours from here. We can invite guests. So we give our test. All our tenants free vacations.

Three days, two nights.

That's. That's crazy.

But I love that all of this. All of this cost less than 100 bucks. Okay? A bouquet of flowers is 30 bucks. Okay. Christmas presents is what, 30 bucks as well, you know, the. The time, the. The vacation is free. So we're spending 100, 150 bucks at max.

But can you imagine all the goodwill that it generates?

You know, and that's why I'm saying, Dave, it's. It's managing the relationship. At the end of the day, we are renting to human beings, okay? And if you can manage that relationship and you can set the bar high and you can sort of nurture that relationship, there's a level of loyalty that you will never believe they will. They are not even considering moving, okay? The thought of them leaving is not even coming into the equation. And so now that you have. So if you believe appreciation is where the money is, okay, then if you can have a tenant who's going to take care of your property, pay the rent, pleasant to deal with, and stay a long time, you can now realize the. The true value of real estate, okay, you can have this Asset. I mean I've got stuff which I bought for a hundred thousand which is now worth 7, 800,000. So you know, that's what happens in these high priced markets. So. But you can only get that if you have tenants who stay a long time. And that's what you get with the voucher program.

Yeah, you know that Joe, that's such a good point. That it's really. Real estate builds wealth over a long period of time and it's really about keeping your head above water for a very long period of time to build big wealth through the checks that your tenants are paying.

Right.

Because they're paying down your mortgage. The economy is raising the value of your house. The whole goal is to take the heavy lifting of the wealth building and take it off of yourself and, and put it onto the tenant. But a lot of people are afraid because markets go up and markets go down and we can't know when that's going to happen. It keeps a lot of people from getting in the game. However, I'm sure you can agree it's the people who get in the game and take action that build the most money. And Brandon would testify to that as well as we would. Can you share some things? Because you're one of the few people that I've talked to that's actually been through several market cycles. It's hard for us to get an investor on. With your experience who's been through ups and downs, what are some things that you do to make money in the good markets but protect yourself from losing money when you're in the bad markets?

It's, it's recession proof. I say. I've been through four cycles. Okay. The thing about a cycle, a downturn is that when a downturn occurs a lot of things happen. One of them is obviously is that people lose their jobs and you know, there's nothing worse than you're renting to somebody and they lost their job and therefore they can't pay you rent and the relationship goes south with a voucher holder. Their rent, their portion of the rent is based on their income. So if the, in the, in the downturn, if their portion of the rent, if their income goes down then they go to usually to the housing authority and their portion of the rent goes down as well. Okay.

Yeah.

And the housing authority's portion goes up to, you know, to kind of balance things out. So it's truly a recession proof business model that, you know, I mean, it passed the test of time. I mean, you know, okay, here's this One, I had a house about a month ago. Okay. The last tenant, she was there for 10 years. And so we fixed it up and then we got it ready for rent in the space of 10 days. Okay. I put it on for rent. We received 172 calls.

I received 16 applications. Okay. And for this one house, the demand is there. Yeah. Okay. High demand, low supply, you know, and as a result of that, you can really be picky because when you have 16 applications, you don't need to set your standards low.

Yeah, 100% agreed. And it's because of everything you're doing. It's not one thing. Like, I see it as like, look, you're providing a product that tenants really, really desire. You're obviously your service, your customer service, your engagement, your relationship is like top notch with all the things that you do. But combine all that stuff together, the number of bedrooms that you have there, like you said earlier, you're creating a product that's in demand, yet there isn't a lot of it. I like to say even low income tenants still watch Fixer Upper and Chip and Joanna Gaines and they still like that nobody's providing it. And it doesn't cost that much more money to provide a stainless steel fridge versus a white fridge. Yet most landlords are like, well, they don't deserve it. It's almost like they don't deserve a stainless steel fridge or I don't want them to scratch it up. And like they can scratch up a white fridge almost just as much as a stainless steel fridge. I mean, I've seen so many white fridges just dented and rusty because. And it scratched that up too, anyway.

Exactly.

Yeah. That's phenomenal.

Hopefully this is making sense now.

Yeah.

And here's what I love about this, is that you're coming at it from a standpoint of such a win. Win. Right? So this is not like, let's give the tenant the lowest quality crap that we can so I can maximize my return. That's the investor, like, reputation that a lot of investors have.

Right.

Is provide the lowest qual quality you possibly can to just bare minimum scrape by to make this thing pass an FHA inspection, especially Section 8. That's what everyone thinks about Section 8 is like a lot of Section 8 landlords are doing that. So the fact that you're saying, hey, no, let's, let's treat our tenants right, like people. Let's, let's like honor them, respect them, help them, give them a place they can be proud of. And you said that phrase Earlier. I've never heard anybody say that before. But pride of rentership. I mean pride of ownership people talk about all the time. But pride of rentership, like what a novel concept.

Yeah.

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Let me tell you a story, okay? In the downturn, I think the last downturn, a couple of downturns beforehand, I had a house in Washington D.C. this is really what got me doing this, is that I Used to live there in this house, okay? And so we moved out and we fixed it up and I put out for rent, okay? And what happened was that, you know, I'll never forget this story. This lady came in, she had a voucher, okay? She looked around the house and said, nice house, it's okay, I don't want to rent it. I said, why? She said, it doesn't have a Jacuzzi.

I say, what? She says, well, where's the stainless steel appliances? You know. You know what's going on? Yeah, you don't have hardwood floors here. I mean, I used to live in this house, okay? And I didn't understand what was going on. I understand it now. What was going on, okay? What was going on was that we're in a downturn and there was some flippers, obviously, rehabbers, who couldn't sell their homes. And so they couldn't. Obviously their next choice was to rent it. They had the stainless steel, they had the jacuzzis, they had all that stuff. So everybody, a landlord wants the good tenant. They want the tenant that pays the rent on time. They keep the place. Everybody's looking for that person. And she was one of those people. So now my house was competing with a rehabbers house who couldn't sell. Does that make sense?

Yeah.

So. And he had the jacuzzis, he had all that stuff, and mine didn't. In a roundabout way, what she was saying was, look, there's a guy down. I mean, she obviously didn't say that, but I think what was going on was that I was now competing with a product that I normally, under normal circumstances, I will never compete with, okay? So if I had an apartment building, I'm now competing with a condo, okay? Because the condo guy couldn't sell, so now he's putting it for rent. So if you've got a condo, an apartment, they've got choices. So they're going to gravitate to the better product, especially if the rent's the same. So what I learned from that is that I need to be able to survive in every single market, okay? By having a product which is top notch, which I can attract the creme de la creme, and I can go toe to toe with anybody, regardless, okay? That's what got me this way, is because that lady says it didn't have a jacuzzi. My house.

Yeah, yeah, that's. That's fantastic.

You know, Joe, one of the things I really like about the strategy you're describing here is you've taken this holistic view of how to build wealth through real estate. You're not trying to squeeze out from your tenants every single dollar you can get. Because as real estate investors, there's two ways that we build wealth. We can make money from increasing the revenue and we can decrease our expenses to increase our profit. The thing is, most of us focus on increasing revenue, but that's very hard to do. There's only so much you can do. You don't control where HUD sets their limits of how much they can rent a certain number of bedrooms for in a property, but you can control expenses. And what you've done is you've gotten so good at picking the best tenants and so good at investing in the relationship with them that they don't ruin your house, they don't leave. You don't have all your turnover costs and your vacancy. You focused on the part that actually hurts landlords the most and reduce your expenses. And you don't have to worry about increasing rent, because HUD's going to do that for you every single year.

Yeah, I think that. I mean, I've shared with you that story of the. The tenant with a Jacuzzi. I mean, that was a game changer for myself. The other thing is that what I try and do is to go to. I go to the landlord tenant court usually once every three to four months. Okay. Why do I do that? I go there because I don't have a lot of the problems that other landlords have. But it's always good to go there, to have a reality check as to what other landlords are experiencing, all the lessons or the horror stories that they're facing. So that way I can.

You know, incorporate some of those ideas into what I do. I don't want to get too complacent, if that makes sense.

My lease is 20 pages, okay? There's a reason why it's 20 pages, is because, I mean, I remember once I rented to a lady who had a cookout inside the house. Okay. I mean, yeah.

So obviously in my lease now, you can't barbecue in the house. And, you know.

That'S the least violation.

You know, but we're all going to.

Joe's house this weekend.

We're.

A barbecue right in his bathroom. It's gonna be great.

Exactly right? So. So to ask your question, Dave, is that when the market goes down, all bets are off, okay? You. You've got to focus on minimizing turnover, okay? And this is where what I stuff, what I do comes into play, okay, Is because you. You've got to manage the relationship with the tenant that's important. Otherwise they'll leave because they have other choices. Okay. You've got to have, if something goes wrong, you fix it. You got to have systems in there to make sure that they're happy in such a way that they don't even want to leave.

Yeah.

So these are some of the, you know, things which I found when the market goes down is that your competition changes. What you didn't compete with is you're now competing with. You've got to fight hard to minimize turnover. You've got to really go out of the way to make sure the tenants are happy. Otherwise the profits, the cash flow, the turnover will kill you. Okay. And because, you know, to make profits, there's really two sides to this thing. There is one side which is to increase income. Okay. And the other side is to reduce expenses. Okay. And I think most landlords tend to, most investors tend to focus on the income side. How can I increase the $25, $50 or whatever it is, okay. In order to get extra income that way? My, my take is no. 1 turnover will cost you 5,6000 dollars. Okay? So which dwarfs a fifty dollar rent increase. So if you don't focus on the biggest expense, which is turnover and what's it called, the vacancy costs, if you don't focus on that side of the, of this, of the ledger, it doesn't matter whether you increase the rent by $50, $100, you know, you make no money. Okay? So, so what I do is to focus on that side of the ledger. Making sure my tenants are happy, making sure my tenants want to be here, making sure that I stack the deck so far in my favor that the tenants, I mean the thought of them leaving doesn't even come into their mind. Okay. Now the last house we did, I know you won't believe this, Brandon, but over here for a five bedroom is $5,462.

Wow.

Okay, so which is more than what it sounds like, More than where you are.

Yeah, five bedroom here is 3608.

Yeah, we're 5400. So.

Wow.

So, so that's what it is, what it is. And so the idea is that out of that 5,000, the tenants portion may be, it's going to be a lot smaller. So. And that's what I, I like about the program is that their portion of the rent is not the total rent. And so a market renter, you know, if they stay, if your rent is $5,000, they're not going to stay very long, they may stay a year or two and then they're off to buy their own house. Whereas for a voucher holder, their portion of the rent may be 5, $600. And therefore, you know, for them, as long as they can maintain that five $600, they're going to stay there for a long time. Okay, so that makes sense.

Yeah, yeah, that's great cash flow, but I'm sure you have some taxes and insurance in there too, right?

Yeah. And I believe if the fundamental thing is I believe in appreciation, okay. That's where the real money is. So I need to have people in my home that stay a long time so I can realize that, that, that wealth creation that you know, that they have. So you know, I mean, as I said before, I bought houses many years ago, not that long ago, where you know, 3, 4, $500, which now 6, 7, 800,000. And, and that's not to, to, to, to, to, to, to, to, to brag or anything. It's just that that's the power of real estate in appreciating markets. Okay. That's where I think that's a real wealth vehicle. And that's why I buy what I buy in areas which are on the path of gentrification and areas which is likely to appreciate in value.

So what does your portfolio look like today then? I mean how, like how many units or properties is it all single family? Do you have multi? Like what, what's kind of the overall view of your portfolio look like?

Yeah, they're all single families. About 30, 31 of them.

Wow.

So 31 in these high price markets.

Yeah.

And yeah, every one of those is.

Just climbing in value like they're little oil wells pumping out cash flow. But then they're also just going up in value? Hopefully.

Yes. And I fill them up with tenants that love the home and they want to stay a long time.

Yeah. And you just manage them all yourself then right now?

Well, I, I, yeah, I managed them, but I haven't. The reason why I do that is that I have an assistant, you know, who managed it for me. I couldn't find a property management company that, that did it my way. I couldn't find, I mean their screening wasn't acceptable. I tried it once. After a year or two, the tenants will leave, I'll have a vacancy, I'll have a turnover. It just wasn't there. And so they don't go out to people's houses to check how they live, they don't buy them Mother's Day Gifts, they don't buy them Christmas presents. They don't do none of that stuff. So. And I realized that, you know, if I'm one house in a portfolio of a thousand houses that they're managing, it's not a big deal if, if my house is vacant because they've got 999 other houses they're working on, so I can get lost in that shuffle. So I just realized that I had to do it my way. And then I trained my assistant to continue my way. So I may not be doing it every day myself. I have people who are doing it for me.

Yeah, very smart. I. I'm curious also. Last question before we move in the deal, deep dive, which is where we're going to like, actually dive into a deal. But before we get there, what is a typical price look like? Like, let's say you want to, like typically when you buy a house, a single family house, what are you paying for it? And then what are you spending on a rehab? So what do you kind of have into it? You're burying these. So what are you buying them for? What are you rehabbing them for typically?

Yeah. So in fact, where we are right now, I'll give you that example.

You're in one of your projects right now, right?

Yeah, we're in a rehab. We bought this about three and a half months ago. It's in Washington, D.C. it's in the gentrifying. It's on the path of gentrification the neighborhood. So I'm making a bet that five, ten years from now it's going to be hot. Okay, so this house we bought for 447. 447,000, let's say 450,000 on this house. We're probably going to spend around 175,000. Okay. So 625 and refi out based on the ARV is probably going around 753 quarters of million and fire out. I probably have a note. The last one we did, the note is 4100 and the rent here is 5462. Wow.

All right. That's awesome.

Well, 4100 is the PI with a ti is probably going to be around 46. Okay.

And the rent is 54. So there's still a spread there. And it's new, so you don't have those repair costs and capital expenses that you typically have in an older house. And you have somebody who's going to. Whose portion of the rent may be 3, 4, $500. And you have somebody who wants to be here. And who's going to take care of this? This is a dream come true. And, you know, let me give you a scenario, okay? This is what happened in my other house on Thursday. I try and help other investors do what I do. So I helped one of my students to. And she rented. He fixed up a house. And as part of the process, I went to the. The tenant. Prospective tenants home. This tenant lives in a bad area, but her home is spotless. Okay? And you need to be in that room. Brandon and David, when I say to that family, you've got this house, okay? This is going to be your new home. And the. The joy, the. The tears, the. The happiness is like. It's like a dream. I mean, it's a dream come true. At last, my family can be settled. At last. We can live in a nice house in a nice area. At last. At last. At last. Okay, and you. You just. I've got a video. Next one. You just got to be there when that happens because it's such a heartwarming. I mean, you're doing good. You're helping other families. You're providing opportunities to people who otherwise would never have that chance.

Yeah.

Okay. That's so cool. And. And that's. That's also another. That's why I love what I do as well. But you're also making money as well, but you're doing good, and you're. You're providing opportunities to. To. To good people who otherwise would never happen. If I don't do this, who's going to do it?

Yeah. Phenomenal. Really, really phenomenal. Well, Joe, let's begin to kind of transition to the next segment of the show, and I want to dive into. A little bit deeper into how you do this. So let's go to the deal.

Deal.

Hey, it's Brandon. I wanted to take a quick break from this podcast to invite you to this week's BiggerPockets webinar, which is like an online class. And this week is going to be something that's really, really popular around. BiggerPockets, how to buy small multifamily properties. Because, look, small multifamily properties changed my life, and they can be one of the best real estate investment vehicles out there, especially those who are fairly new to real estate. There's so many benefits to buying small multifamily properties, which is why this week I'm going to be dedicating like, 90 minutes of just direct training on how to get started with this. You're going to learn how to find Them, how to analyze them, how to finance them, as well as some of the dangers. There's like four specific dangers I call out that you should know before you even make an offer. So don't miss this. Just go to biggerpockets.com multi webinar again, m u l t I so biggerpockets.com multi webinar and I will see you there.

All right, this is part of the show where we gonna go in detail on one of your properties. Now, you just talked about one a little bit ago, but maybe it's the same one, maybe something different. But let's go through. We're gonna ask you just kind of fire quick, a bunch of questions, questions at you, starting with what kind of property are we talking about here? You only buy single family, so I'm assuming it's a single family that you're thinking of, correct?

Yeah, it's a row house in Washington, D.C. and single family. So it's. Yeah, a single family in the sense that it's one family. It's not a multi family building, it's a row house, which is like a townhouse for, you know, other parts of the country.

Okay, how did you find this property?

I got it through a wholesaler. Wholesaler. I have a program whereby I teach people what I do. I give people a chance to look over my shoulders because I believe that the best way to learn real estate investing is not by listening to a CD or watching an MP3 list, it's to actually do a deal, or if that's not possible, give people a chance to see how I execute a deal. So I have a program whereby I give people a chance to see how I do a deal. So one of the entry points to the program is if you find a deal, then if I buy it, then I'll give you the chance to see how I execute. Okay, so normally a wholesaler, they would. Once they get paid, once they get paid, they're out of the picture, you know, So I give the chance for the wholesaler, the real estate agents, to see how I execute. And so that's really in a competitive market like Washington, D.C. where everyone's looking for a good deal. I had to figure a way whereby. Why should, let's say if. Let's say, Brandon, you're the wholesaler, okay, you got a good deal and David wants that deal, Joe wants that deal. So why should Brandon give it to Joe versus David? Okay, I had to answer that question.

My response to that was, I will show you, Brandon, how I execute. So hopefully at some point, you'll be on the other side of the table and not just on the wholesaling side. So that way there's an incentive for Brandon to give me the deal versus giving it to David. Okay, so that's essentially what happened here, is the wholesaler wanted to see how I executed. They brought me the deal and they got it under contract for 450,000 and I purchased it from him from 475,000.

Okay, so you made a $25,000 wholesale fee, which is great for them, and they got to follow along and see how you do.

Exactly.

So good. Which is probably worth way more than honestly than the 25 grand. Like that's way more valuable.

Exactly.

Yeah, I'm going to say that right now. If anybody brings me a mobile home park with over 100 units.

I will let you follow along every step of that process. All right, that's good. That's great.

That's my trademark program. Yeah.

It's now called the Beardy Brandon trademarked program, formerly the Joe program.

This is great. All right, so 475 is what you ended up buying it for. How did you negotiate, did you negotiate that price at all? Did he. Did the wholesaler negotiate that price at all? Like any kind of, you know, stories there?

No, not really. No. No, the wholesaler got it from an owner. The owner. What happened was that the owner had a tenant in there and the tenant was giving them hell and they were in the process of evicting the tenant. Okay. So it was like a burnt out landlord, if that makes sense. That's who the owner was. And so they negotiated the 450 price and he then turned around, called me, I went to the house. It met my criteria in terms of location, the size and all those different things. And I knew I could make five bedrooms, two extra bedrooms to make it to a five bedroom. And therefore it was a go from my perspective. Okay. And I was okay with paying 475 for this house. Yeah. So that's how I decided to. I did the due diligence, which is pretty quick. I know what I want and he knew what I want. So I was able to make a decision within 20 minutes of going to the house.

That's great.

Okay, awesome. How did you finance the property?

Oh, this is an interesting one. I normally have lines of credit with some of the local banks here. I mean, I've taken the time to develop relationships, nurture relationships. Some of the banks, I have lines of credit. So most of my deals I use a three part financing. Strategy, Okay. I have lines of credit, you know, from the banks, and then I have private investors. And I also have used some of my own personal money. Okay. So the, the, the banks will fund x amount, say 75 to 80%. The private investors may top up the difference and, or I may, you know, or they may come in for another 15, 20% and then I'll top in the difference. Okay. So in this case, what happened was that the seller realized that 450 was too low. Okay. But it was under contract. Okay. With the wholesaler. So the tenant was in the house. The reason why they just want to get rid of it was because of a tenant. Once the tenant was evicted, if that makes sense, there was three days left between the date of the eviction plus and the date where the contract expired. So the owner said, I'm not going to extend this contract. If you don't close in three days, the deal is off. Okay. So typically my line of credit, it takes about 14 days to close. So I couldn't get the 475,000 using my line of credit. So I contacted a hard money lender, which I don't normally use, but I did in this case. And we're able to get the 475 plus $150,000 rehab in three days.

That's awesome. Very cool. Well, what did you then do with the project? Obviously you started rehabbing it.

Yeah, we rehabbed it. Original cost was 150. Original estimate was 150,000. We ended up spending about 175,000 on the rehab we created. It was a three bedroom, one bath. We turned it into a five bedroom, three and a half bath. So we created a master suite. We had vaulted ceilings, we had hardwood floors. We had, you know, it was a nice home. It's a HGTV style home. And I focus on the kitchen, bathrooms, bedrooms, closets, open space and functionality. That's what we do on our rehabs. It's a beautiful home. That's what we did there.

Now this was a burr, right?

Burr, yes.

Okay, cool. What was the outcome?

Okay, so once everything was all said and done, the house was appraised at 740,000. I thought it'd be 750, but it came in a little bit lower. 740,000? Yes. Okay. I found a tenant. We had about, I think for that house. We had about maybe 20 applications for that house. So I selected a good family and the rent is 5,462. The note, as I said before, is around 40. Oh yeah, this this, this bank, a local bank, we refinanced it. Okay. So typically it's about 75 to 80% loan to value that they will give you. But I've developed relationships with some of the banks and this particular bank they funded up to 9. They funded just under 90%, 4.08% I think it was interest rate and therefore I was able to pay back the, all the expenses and essentially have very little if anything in my money in this deal after the refi. So the rent is 5,462. You know, the, the note is around 46 after PITI. So a little bit.

That's so cool. And again, you're now you're paying the mortgage down every month. Your property is appreciating every month. Your cash flow is coming in every month. You get the tax benefit of owning the property. It's just like, win, win, win, win. You got a great tenant who loves their home. It's just awesome. So what lessons did you learn from the deal? Anything that you, that you learned in this time that you didn't know before or things that just stood out to you as important?

I think the importance is, I mean, you know, the rehab is under 75k so it's a pretty big rehab. It's not your painting carpet job. So I think the importance of teams, whether it be relationships with financial institutions, obviously we're able to get the money pretty quickly. I mean one missed out was that we got the reason why we got the, the money quickly was because I also cross collateralized against another asset that we own, which is free and clear. That makes sense. So. Yeah, so, so that's one of the, you know, that's one of the things that we, we did on this one.

You're basically saying you like put a, you put a lien on another property so that way if you didn't pay on the one, they could take both.

Right? Exactly, exactly. Yeah. So I mean the importance of teamwork, the importance of taking care of your contractors, the importance of.

Creating win win scenarios with everybody that you deal with is what makes this thing truly a blessing in a cookie cutter operation.

Yeah, it's really good. Really good. Joe, this has been fantastic so far and we're not quite done yet because we're moving over to the next segment of our show.

It's our fire round.

It's time for the fire round.

Foreign.

This is the part of the show where we fire a bunch of questions at you direct out of the Bigger Pockets forums. Let's see what you got to say to that first one, C.J. from Moore county says, I'm just getting started with real estate. I've saved up ten grand. I want to hear from some experienced people what they would do if they were in my position. They're just getting started. They got 10 grand and they're in North Carolina. So I don't know. It's probably an idc.

Okay. Okay. A couple of things. I would suggest that the guests from North Carolina, first of all, work on themselves in terms of learning the basics, what they want to do, what their goals are, what their strengths and weaknesses are, and make sure they get buy in from their family, their spouse, and so on. Okay. That's step one. I mean, you got to really work on yourself first. Otherwise that 10,000 go real fast.

Yeah.

Same thing is sort of decide on which the method of focus, which strategy you want to do. Is it wholesaling? Is it, you know, I don't know, fix and flips? Is it landlording? I mean, what's your strategy? What's, what's, what's. What do you feel comfortable with, given where you are? Okay. And then I would. Then once you decide that is, learn the basics of that. Okay. So if it's wholesaling, for example, learn the basics of wholesaling. If it's a rehab, and learn the basics of that. But the next part is to really identify somebody in the area where he is. Okay. Who's an expert, a mentor, or coach. Okay. Because this person can really guide them along and tell them, okay, then this is what I would do if I was in your situation. Okay. I would do A, B, C, D, E. And the key is finding that person and making sure that person, you know will help you create a win win scenario and incentivize the expert or the coach to help you along. Okay. And then once you've done that, then just go out and do it it, take action, do your first deal and leverage that $10,000 that you have to be able to get on the right path. Otherwise that money could go real fast.

Yeah.

They'll have nothing to show for it.

Yeah. Really, really good advice, Joe. That's awesome.

Okay. This question comes from Daniel in Colorado Springs, Colorado. I'm looking to refinance one of my properties with a portfolio lender. I've got a list of local banks to call, and I don't want to come off as uneducated. Do you have any tips for how to approach these conversations?

Okay. Commercial lenders, what I encourage is to show.

The commercial banks or whoever you're trying to raise money, show them what you're doing. Okay? So if you have a rehab project going on or if you have a house that's. That you're in that's taking place, invite them over. They can see you. They can see what you're doing in real time. They can see the activities, they can connect you to the projects. Okay? So you're no longer just an applicant. You're a real person who's doing real stuff, and they can go to the. That they can see you in action, the results of what you're doing. So it builds a lot of credibility, which I think a lot of people aren't doing. So what I would recommend is invest the time to nurture those relationships with those commercial lenders, taking them out, show them what you're doing. But also, also the other part would be to create some kind of a summary of who you are, okay? And it needs to address six key questions, which is who you are, what you do, what makes you different from everybody else that's applying for money. Okay. And how much do you. What are you looking for from the potential commercial lender? How are you going to protect their money and why they should do business with you. Okay? So, I mean, it's a c. Six key questions, which any lender, I think, wants to know because they get people asking for money all the time. And it's everything I do. I always try to differentiate myself from the competition. I always try and differentiate myself from everybody else who's doing this thing. And so if I'm looking for money, how do I differentiate myself from all the other people who are pitching this guy for money? Okay? And I want to show them what I'm doing. I want to, you know, in real time, in real life. And also I put together documentation, credibility, support, materials to prove that I'm a worthy risk and that if you make money, if you borrow me in the money, I will do what I say I'm going to do. I have a track record proven to do that.

That's so good. That's one of those moments. You guys need to rewind that last, like two minutes and listen to that again. Anybody who wants to get a loan ever from anybody, go listen to that again, because that's the secret to getting a loan. That's it. Joe, you understand some stuff. All right, Number three. Charlie. Yeah. You've been doing this a couple years. This is good.

Charlie from Washington, D.C. your. Your neck of the woods said, I have a ton of interest in my properties, like a Rental property to rent. I can only choose one tenant, though. So what language do you use when you need to notify an applicant that you've gone with someone else? How do you turn someone down?

Oh, boy. That's the hard one. Yeah. Because when you have a house that people have set their dreams and hopes to.

Yep.

And you've only got one house, so you have. You've got to be the bearer of bad news to a lot of people.

You need to be on that phone call as well. The. The cries, the. The disappointment. Why? Why? Why? You know, you know.

That'S a tough one. But I've only got one house, and that's why I teach other people to do this thing. Because the demand is so great that it doesn't matter if I teach Brandon or, or David or whatever in the local market. Because the demand is so great, it doesn't matter anyway, so to answer your question, how do I do it? Unfortunately, I just make a call and say, I'm sorry, but after a careful review, and unfortunately, I had to give the house to somebody else.

Yeah, that's.

That's it.

Simple.

Keep it simple.

I. I agree with. If more people were doing this, I think there'd be more wealthy people and there'd be more tenants happy and taken care of, and it's again, a win win. So, so, yeah.

Great.

All right, so everyone's heard nightmare stories about contractors. If you find a good one, what are some ways to keep them happy and continue that relationship?

I've had contractors from hell. Like, I'm sure we can all have a couple. A couple of beers over and talk about contractors. Yeah, I've had the contractors who come in to work drunk. I've had contractors who come in and, you know, they don't know what they're doing and so on. So. Okay, so. So when I find good ones, which is what I've got now, I use the same contracts for the last seven, eight years. They're the only ones that do what my projects, I don't consider anybody else. What do I do? I've given them. It's a relationship. Okay, so one of the guys lived in a room in the house, and one of the other guys, before I met them, lived with his family in an apartment. So, you know, one of the houses I purchased, it's a nice house, nice area. I offered it to rent to him and his family. One of them. So they're living in one of my houses, him and his family. The other one is living in another one of my houses, and he has roommates, he's doing a house hack. And. But he's living in a nice house, a nice area. So the idea is that I'm looking out for them, okay? I'm trying to help them, and in return, they look out for me. These projects, which I do, are very, very low maintenance. Very, very low stress. I'm sorry, Very low stress. I don't come to the house very often because if something goes wrong, they take care of it. You know, they go beyond the call of duty to make sure that the house is done correctly. They don't cut corners because they're looking out for me, if that makes sense. And, and that's. That's essentially all. That's how I do business. I take care of my tenants so they can take care of me. Okay. I take care of my contractors so they can take care of me. I take care of my financial banks because they can take care of me. I take care of my realtors so they can take care of me. Yes, it's a win win scenario, and.

They'Re loyal. I mean, 175k rehab is not a paying carpet. I mean, you know, it's a lot of stuff going on, a lot of moving parts and. But we also have weekly meetings where once a week we meet at a house. Usually at my house, we have food, drink cup of coffee and eat Spanish food and just network and just kind of socialize and then talk about the business, what the project's doing, what are the issues we've having, what's the schedule for next week, what are the problems that we face, what are the solutions and things like that. So it's sort of nurturing the relationship with my contractors. That's been the key to not having some of those issues.

That's cool. That weekly meeting thing, that's. That's a neat idea. Well, very cool. Well, that was the end of the fire round. Now it's time to go to the last segment of our show. It's the Famous Four. All right, but before we get to the Famous Four, let's hear from Jay Scott to see what's going on this week over on the Bigger Pockets business podcast. Hey There, Brandon and BiggerPockets podcast listeners. This is Jay Scott, your co host for the BiggerPockets business podcast. And this week on the business podcast, we have an absolutely awesome episode. We have author and entrepreneur Michael Michalowicz, who's written several seminal business books, including the Pumpkin Plan and Profit First. And on this episode, he tells us all about how we can guarantee that our business generates a profit from day one. So tune in this week for the Bigger Pockets business podcast. Now back to your famous four. All right, thank you, Jay. And now let's get to these same four questions we ask every guest every week. Joe. Number one, do you have a favorite real estate related book?

I'm going to give you two. That's okay.

Unacceptable. Okay, that's good.

Okay.

You can give me as many as you want. I will take a book recommendation all day long.

Well, I mean I'm sure there's other people have said this one that I really like. The Millionaire Real Estate Investor by Gary Keller. That's a really good book. It's a really, really good book. It goes into a lot of detail and about the systems, about, you know, how to do this right, how to manage properties. Sorry. For a financial perspective about the numbers, making sure that you do this thing right. It's, it's a, it's a very, very good book. Book and I highly recommend that. It opened my eyes and I read it. The second book, which I like to. I don't know if, if Jay is being given a lot of credit. He's got, he's written a really good book on the. What's it called? It's called Recession Proof Real Estate Investing. Yeah, that's a pretty good book. I got it from big Bigger Pockets and I mean he goes through logically the different types of investments, sorry, real estate cycles. What works, what doesn't work and what the trends are. How to protect yourself and mitigate yourself through these downturns and upturns. It's a very, very good book. So that would be my second recommendation is sort of Recession Proof Real Estate Investing from Jay Scott.

Perfect. That's awesome.

Yeah.

And I think that's for sale@biggerpockets.com store. I think we still have some of that. Again, BiggerPockets. Well, it's a digital book so I mean I think we're still selling it. Biggerpockets.com store. You can pick it up there and. Cool. All right, number two, David Green, what.

Is your favorite business related book?

There's a couple of books. One of them I'm trying to get more into what's the best use of my time, managing my time and making sure that I focus on what I need to do. There's a couple of books which I'm reading right now. One of them is called the Productivity Project by Chris Bailey. I know recently you had Cal Newport talk about the deep work in the studio It's a similar approach to that.

How do you maximize your time? What's the best use of your time? And how do you get more done? Okay. For the limited time that you have available? I know that in the Chris Bailey book, at least, what I'm realizing is that there's only so many hours in a day, obviously, but he kind of focuses more on maximizing or using your energy and your attention. Okay. So leveraging that to get increased productivity. So it's a pretty good book. And that's a productivity project from Chris Bailey. And the second one is also this other one called Virtual Freedom by Chris Ducker.

Chris Ducker, Yeah, I know Chris.

Yeah. Yeah, that's a pretty good book as well. It talks more about virtual assistants and how do you leverage, how do you outsource and, you know, best use your time. One thing I got from that is I spent some time recently is to focus on what should I be doing. Yeah, what don't I like doing, what can't I do and what I shouldn't be doing. Okay. Once you kind of go through that painful exercise, you can then start saying, okay, what's the best use of my time? What are those tasks that I need to sort of outsource or find other people to do so I can focus on the. On the biggest bang for the return.

Brandon, this sounds so familiar. Did you give me this book? Was it like a white book with blue font?

I think so, Yeah, I think I did.

Oh, so you had two copies. Okay, so you just sent me the one that, like, Rosie accidentally dropped in the toilet you didn't want anymore. Here I am thinking that you actually cared about me and you were trying to give me a book to save my life. And really you were just trying to get rid of your garbage because it's so expensive in Hawaii for it to get picked up.

I mean, I spent money on two copies because I knew I was gonna give you one of them.

Okay, moving on.

All right.

What are some of your hobbies?

You know, I mean. Well, that one thing. I mean, I'm getting more into working out. I work out every day now. I wake up at 5 between 4:30 and 5, and I spend using an hour and a half in the gym every day at Local Planet Fitness. And I'm realizing that, you know, that just that exercise, just that sort of routine every day, it really sort of gets your mind thinking. It really gets you kind of pumped up for the day and allows you to, you know, get the most done.

Yeah.

So I'm a Kind of morning person. And so I like to work out. I like to spend time with my family.

You know, I got. Been married 25 years.

Yeah. Got two kids. And. And then also we like to travel the most of. Yeah. Been through most of Europe, done quite a few countries in the Caribbean and a few countries in Africa as well. So we like to spend quality time traveling.

Very cool. Love it. Last question from me, Joe. What do you think sets apart successful real estate investors from all those who give up, fail, or never get started?

I think it's overcoming your fears and taking action. Okay. Because, you know, it's not easy. It's scary to leave the comfort zone. And a lot of people obviously are scared of losing money, fear of failure, fear of what other people are going to say. And if you're not careful, you'll. That will paralyze you into inaction. Okay. So it's your ability to address your fears and then take the action necessary to move on to the, you know, to pull the trigger. I think that's what really separates at least the people who are starting out is their inability to overcome their fears. And. But if you can do that and then take action, I think that will separate a lot of people out.

Yeah.

Really good.

All right, Joe, this has been fantastic. I just want to thank you for giving such a great interview. This is going to help a lot of people. For people who are more interested and want to connect with you, where can they find out more. More about you?

Okay. We can go to my website, www joe asamoa. That's joe j o e. Joe asamoa is a s a m o a h a s a m o a h dot com. They can email me at joe joeassamo.com we'll get more into social media. So we do have a Facebook and Instagram. Not that hot on it, but I'm getting there.

We'll get you there.

I need help. I need help. Yeah. So. So what's it called? So they can reach out to me through those channels, but the best one is either through the website and they can send me a message or they can contact me, email. Also they can reach me on Bigger Pockets. I've written a few articles for Bigger Pockets now, I think eight articles so far. So hopefully I'll be doing more and you know, and. But yeah, I really like to network with people, especially in the Washington, D.C. area. I like to help more people. I like to encourage people to do what I do. It's a great business. It works. I think that it's not easy, but I think by, you know, networking, I have these events which are free, where we can kind of network and socialize and sort of, you know, you know, talk, talk business. And I'd love to meet more people in Washington, D.C. area.

Very cool. And of course, Joe on Instagram is Dr. Joe Asamoa. We're gonna go blow up his Instagram today because he has 411 followers. We're gonna get him. 4000.

Yeah.

We're at a 10x you Dr. Joe Asamoa. All right, dude, this has been awesome. Thank you so much for being here today. Really fantastic. We learned. I learned so much. I'm gonna. Seriously, as soon as we get off this call, I gotta go talk to my team about changing everything we're doing on this property in Maui. So thanks to you.

Thanks, guys. I really enjoyed it. Thanks a lot, Brandon. Thanks a lot, David.

All right, now is our show with Joe Asamoa.

Joe.

David. That was incredible. That was so good. Like, so good.

I had no idea that was gonna be that good when we started. I mean, like. But yeah, the deeper we got into that, the more brilliant. It seemed just so humble about what he's doing that it's easy to stop and miss, like, the. The sheer genius of what he's put together.

Yeah. So many good things in there. So many good things. So, again, very, very cool. Thank you, Joe, for joining us today. And before we get out of here, I want to give a quick, I guess, shout out for one of our Pro members on BiggerPockets, Kim Talana from Colorado Springs. So this is the pro member shout out or spotlight. So here's the deal. So Kim signed up for BiggerPockets Pro, like nine months ago. She's already taken action, bought a $300,000 house for house hacking with a three and a half percent down payment, which is super cool. A great way to get started, that house hacking technique, which, of course you can read the book the House Hacking Strategy, if you want to learn more about that. But really, really cool. So congratulations to Kim on that and thanks everyone else for sending in your deals. Remember, if you're a BiggerPockets Pro member and you want to be featured on this segment, this spotlight, just email us a note@podcastiggerpockets.com and put your words. Put the words pro deal into the subject line and you might hear your name right here on the show. All right, that's all I got. So, David Green, you want to take us out?

Yes. On Instagram. He is BeardyBrandon I am DavidGreen24. I'm trying to make my way through all my DMs there, so if you want to get a hold of us, that's the best way to do it. I don't know if you'll get a hold of Brandon. I think he's probably buried more than me, but I'm buried. Thank you guys very much for listening. We appreciate you guys and we love you. This is David for Brandon. Break it next and Cash and Checks Turner signing off.

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Thank you all for listening to the Bigger Pockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico, content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose, and remember, past performance is not indicative of future results. Biggerpockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.