40: 40 Quick Tips for Buying Your First (or Next) Investment Property

This is the bigger pockets podcast show 40.

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What's going on, everybody? This is Josh Dworkin, host of the BiggerPockets podcast, here with Brandon Turner, as always. What's up, Brandon?

What's up, Josh? Things are good.

Things are good. I'm doing well. Doing well. I know you asked. I know you asked.

I always do, don't I? Today is the over the Hill podcast, though, so it's more important than you or I.

It is, it is. And you know, I'm getting close to being over the hill. Approaching 40 and I'm approaching the hill, but you're approaching the foothills, my friend. You are a young, young guy who's got a long way.

Go long ways.

Yes, yes, yes, yes. Anyway, so this is our 40th episode and we've done some amazing shows, man. I mean, our first show with Marty Boardman was especially exciting, kicking the thing off. And then we did the ultimate beginner show, which was just you and I. I think our most popular show so far was probably Arthur Garcia's show about, what was it working a full time job.

And I think we're actually going to cover that again today as well.

We are, we are. And then I think what Aaron Mazzarello's was probably the second most popular show that we've done. But yeah, you know, we want to thank, first of all, everybody who's been a guest on our show so far. We really appreciate the time and energy you guys have put in and we appreciate everybody for listening. The show's going great and.

We'Re continuing to get lots of great ratings, reviews, things like that on itunes. If you haven't yet done so already, please do jump on itunes and share your feedback and do jump on the show notes afterwards@biggerpockets.com show 40. And if you've got any questions, comments, thoughts, or anything like that, interact with us. But today's show, as you may have deduced, is a little different because we actually don't have a guest today. Today, instead we are going to, in honor of this being our 40th show, we're going to talk about 40 quick tips for buying your first or next deal.

But don't worry, we're not going to be singing Quick Tip every time. Don't worry.

Why don't we just jump into this because 40 tips is going to take some time so we're really going to need to speed through it since we can't go into incredible detail. We do really encourage you guys to jump into the comments on those show notes and we'll be there engaging in those conversations. Also, if you're an experienced investor, we really want to encourage you to jump into the show notes and leave your own quick tips for others as well. This way, those listening to the show in the future can go to the show notes and find much more than the 40 tips that we've already mentioned.

Cool.

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Alright, well that sounds good. Should we get going?

Yeah, let's do it, man. Enough chitty chat.

All right, so get your papers and pencils out. Here we go. Papers, Paper. Pencil, notebook, I think paper, keyboard.

Plural of paper. Isn't it papers? Papers. I don't know, is it papers? Refers to like a. No, yeah, it's. Paper is plural of paper.

All right, fine. Well, thank you for publicly correcting in here.

I believe so. That's okay. That's what I like to do. It's fun.

Alright, good deal. Alright, let's start this off. Number one tip is to look at a lot of properties because you don't actually know how good a deal is until you analyze a whole bunch of them. I mean, I'm a firm believer in this, that you know, the whole like look at 100 offer on 10 and buy one rule. A lot of people say, I like that rule because yeah, if you don't look at a whole bunch of properties and you just go and buy the first one you look at, there's a good chance you're going to screw something up.

So yeah, yeah. And that'll, that'll give you the experience to better understand what, what the numbers really mean.

That is true.

Yeah. Yeah, for sure. Cool. All right, tip number two, find a good agent. So there's, there's over a million agents in the United States. Real estate agents, of course, but only a small percentage know anything about real estate investments. That's no disparagement on the others. But you know, most agents really don't go and put in the time to understand real estate investing. Ideally, it's good to find somebody who understands how to work with investors and maybe owns some rental property of their own. When you're hunting for agents, you want to ask them that. Find out, hey, have you worked with investors? How do you do that? What's your process? Do you own your own rental properties? What's your criteria, things like that, to get a feel for their understanding.

Definitely want to look for a good investor, friendly agent. That said, really quickly, if you know other agents who are not investor friendly yet, but you think would be amazing at it. Definitely want to have them check out our Agents Guide, which is this guide that Brandon and I collaborated on. It is the ultimate guide for agents working with real estate investors. Something like that title.

You can go to that@biggerpockets.com agentguide. We'll also have a link in the Show Notes. So that's tip number two.

Alright, quick number tip, quick tip. Quip. I just made up the word quip. Quip number three is to line up your financing early. If you start looking at properties and you can't actually buy a property, you're going to be wasting a lot of people's time, including that agent that you just got. So this is a thing that I've stumbled on several times in my career. So definitely get your financing lined up today. Whether it's traditional loan, cash, portfolio, lender, private money, whatever. Just figure it out and do it.

Nice, nice. All right, tip number four, how to find good lenders. I'll tell you one way not to do it is just to go posting on the forums that you're looking for a loan. Don't post on our forums, don't post on Craigslist, don't just post it anywhere. Instead, get to know other local investors in your area and find out who they're using. If you're looking for hard money, of course, be sure to check out the BiggerPockets hard money lender directory at biggerpockets.com hardmoneylenders for the web's largest collection of hard money lenders. I think we now have over 300 lenders there. Definitely check that out. If you're looking for traditional or portfolio loans, one of the best ways to find them is simply by picking up the phone and making a ton of calls. I remember in Show 6 BiggerPockets.com Show 6 Arthur Garcia talked about how he found his portfolio lender by picking up the phone book and making a ton of calls. Definitely don't be afraid to start those lending conversations today, even if you aren't quite ready to go ahead and buy.

Yeah, I agree. Before we go too far in the show, let's take a second and let everyone know this is show 40 again reminder. So if you want to go to the show notes biggerpockets.com show40 nice, nice.

And before we go on, guys, today's special not only because we're celebrating our 40th episode, but also because we're introducing our first sponsor of the show, which is, you know, it's kind of a big deal, I think. Now, before you guys start freaking out over having a sponsor, I just want to let you guys all know that the show takes a lot of time and energy, which.

Yes. As Brandon chuckles in the background over all the hours he spends editing and scheduling and everything else. Yeah, I just come here to talk. Really?

You do? A little more than that.

Okay. All right, listen.

With the sponsor thing, we're not going to have sponsors that we don't know or believe in. Our idea is let's get companies and folks who are part of our community, who we trust and who we know and like and who are doing things that we think are a good fit.

For you and things that will bring value to the community.

Yeah. And bring those guys on board. Let me give our first sponsor just a quick shout out for being so awesome and supporting this episode. Chances are you know the company already and you've actually seen them interacting on the site on a daily basis. On our blog, on the Biggerpockets blog, on the forums, these guys were also sponsors of the BiggerPockets summit last year. So. MemphisInvest.com is a family owned turnkey real estate company with offices in Memphis, Tennessee and Dallas, Texas. They were named small business of the year by the Memphis Business Journal and is one of America's fastest growing companies by Inc. Magazine in 2013. If you're interested in passive investments or even learning how to buy real estate in solid cash flow cities, contact MemphisInvest.com for a free consultation. They have nearly a quarter of a billion dollars in real estate value under management, comprised of 2,000 properties for 800 plus investors. If you guys want to check out more about Memphis Invest, go to blog.MemphisInvest.com BP Cool.

We actually did interview Chris Clothier here on the show a couple months ago. I think it was episode 26. It was an awesome episode.

Yeah, definitely.

Chris is a good friend of mine as well.

I know. I'm kind of honored to have him as a sponsor. This decision didn't come lightly to bring sponsors on. You know, they've, they've been, they've been great to work with. So we'll have, we'll have a link in the show notes as well. And again, it's blog.MemphisInvest.com BP Cool.

Let's move on. All right. Tip number five is to learn to do the math right, because honestly, the math is not very hard, but it does take practice. If you guys know me, you know I'm always harping on this. If you want to see a really detailed analysis of how I analyze a property, I'm going to put a link in the show notes also to a post I wrote called How I quickly Analyze an Investment Property. So again, speaking of math, let's go to tip number six.

Tick number six. Tip number six is the BiggerPockets analysis tool. It's not really a tip, but it's kind of a feature that the tip is go there. That is the tip.

The tip is go there.

Yeah. Go there. All right, so go check out the BiggerPockets analysis tool. We've got a flipping calc out today and the buy and hold calculator is very soon to be on its way for delivery. Not only do these calculators help you analyze a deal in its entirety, they also try to show you how the numbers were calculated. You can get to it by going to biggerpockets.com calc. But keep in mind, anyone who's a BiggerPockets member could go test those things out a few times. But if you want to use them on a continual basis and be able to print out PDF reports to give to lenders, partners or others, you do need to be a pro or Pro Basic member and you can upgrade to those accounts@biggerpockets.com pro.

Cool. All right, so let's talk some more about that math number seven, the 70% rule. I'm sure you've heard of it before. Basically that means this is something that flippers or wholesalers might use. Basically you take your after repair value what the things worth when it's all fixed up and multiply that times 0.7, then subtract out the repairs. Take 70% of the ARV and subtract out your repairs. That's a good general way to kind of estimate how much you should offer. It's not an end all be all number, but it's a good estimate.

Nice, nice. Tip number eight. If you're a buy and hold investor or are trying to analyze a buy and hold deal, make sure you're using the 50% rule to make sure this property cash flows. The 50% rule basically says 50% of your income is going to go out in non mortgage expenses. In other words, if you've got $1,000 in rent, you're talking about $500 in expenses. So if your mortgage were $400, you can estimate about $100 a month in cash flow. We're going to have links in the show notes to some good 50% rule articles and videos. The 50% rule is just that it's a rule to, it's kind of a safety net to help folks find cash flow properties.

Yeah. And when I started out, I did not know about the 50% rule and I honestly like screwed up and I bought some properties that I probably shouldn't have because they, even though they seem like they cash flow, they really don't because there's all those expenses you don't expect. So anyway, yeah, and I think the.

Key there is really just having an understanding of what all the expenses are that, that come into play with a rental property, things like capital capex and vacancy rates and things like that. Stuff that most new investors and agents who don't have the experience.

They usually ignore. So learn it.

All right, the next One is the 1% rule or the 2% rule. You guys probably have heard these numbers. There's a lot of arguments about it. So basically what it means is the percentage of monthly income compared to the total purchase price. So before you get too confused, what that means is if a Property sells for $100,000, the 1% rule says it should rent for a thousand a month or the 2% rule says that should rent for 2,000amonth. Does that, does that make sense? Am I saying that good?

Josh, you're, you're saying it good.

All right, so the 1% rule is 1% of the purchase price per month. So in a lot of areas, honestly the 2% rule is completely impossible to find and people complain about that. And even 1% is impossible in some areas and some people say, well, you shouldn't pay attention to that. But I, I don't know, honestly, for me, like which 1, 1%, 2%, how much you should pay it, you know, it's up to debate and where you live, but anything I've ever bought in my life that fit the 1% rule only is not a good cash flowing property for me. Like I, I really, those are the ones that I regret and say, yeah, they don't give me any income because I, it seems like they should, but they really don't. So I personally stick to the 2% or as close as I can get to it, but I'm a cash flow guy, so that's what I, yeah, I agree.

I'm a 2% guy as well. And in fact there are some markets if you listen to our podcast with Dawn Anastasia, she, she's up in Milwaukee and she, she goes for 3% deals which are pretty, pretty sexy.

Yeah, pretty sexy. I have to say I am getting my first 3% deal right now. I should close in about two weeks.

Nice, nice.

Pumped. All right, great.

All right, well that brings us to number 10, right? Number 10 is make sure cash flows.

Yeah.

Don't buy negative cash flowing properties unless you're uber rich and have another agenda with the property. Even then, frankly, I don't know. I mean, I think if you're betting on appreciation, you're gambling. So, you know, I don't know. As a buy and hold investor, personally, I see no reason to buy a property that is not cash flowing. I know a lot of people do it. They explain why they do it, it makes sense to them and it just doesn't work for me. So anyway, make sure if you buy a cash flow, a rental property that is trying to bring income in that a cash flows.

Yeah, good. All right, number 11 is to use Craigslist to get rent comps to see what other properties are renting for. So people often wonder, you know, is this property going to rent for 500 or 600 or 700? Well, Craigslist is really, I think, at least in my area, like the best way to do that. I mean, some people say use Zillow, but in my area, Zillow isn't as accurate as Craigslist because Craigslist is so current. It's like updated every day. So. And they do have a map feature too. So you can actually look at a map and see all the properties for rent in a certain area. You get a really good idea of how much possible rent is.

There you have it. Good stuff, Good stuff. All right, number 12, don't use the pro forma numbers given out by the selling agent. Oftentimes you'll find that selling agents tend to. Yeah, I'd say what, inflate the numbers just, just a little bit. Just a little bit. Yeah. So verify and definitely double. Maybe triple check the, the information being provided to you.

Yeah, I find that a lot with rental properties. They'll say, you know, it'll be a triplex for sale and they'll say each of these units will rent for 850amonth. And I know for a fact, I mean, I know, but they will rent for 850. Yeah, like I'm getting like 450.

450.

Yeah, yeah, that's what that. You really got to watch those numbers because agents, again, they don't know a lot of times what a place will rent for. They just pull out a number out of somewhere and. Yeah.

All right, moving on. The bag on Agent chair.

I love agents. I Do I just. Yeah. All right, number 13, when running your numbers, be conservative. Do not let emotions cloud your judgment. Like for example, well, you know, I don't think repairs will be that much since the house looks nice or I don't need a budget for vacancy because then, you know, units are easy to rent here.

Yeah, yeah, that's the ticket.

Yeah, it's easy. So anyway, budget conservatively. And again, that's what makes a 50% rule so important because a 50% rule helps you budget conservatively.

Yep, absolutely. All right, well, speaking of budgeting. Brandon. Brandon Branding. Budget, budget. Brandon.

Another nickname.

Yeah. All right, so let's talk about budgeting for repairs. If you are brand new at this, I definitely recommend always doubling your repair budget and doubling your timeline and see then if it makes sense, particularly on these rehab properties. I know we've covered that in a bunch of our other shows and you know, especially as new guys, it's, it's really hard to get it right. It's really, really hard to get it right. And, and you know, if you're safe and you double the budget, you know, the odds of you screwing up that bad are lower.

So it is like, and people wonder, like, they think I'm kind of kidding when I always say that on the forums is double your budget. They think I'm kind of joking, but I'm really not, like double your budget and if you still can make a profit, you're probably okay going forward. So. All right, probably, yeah. Number 15, if you are getting bids from contractors, get at least three of them and then do your due diligence on the contractor because honestly, a contractor can make or break a deal and they're one of the most important people on your team. So. Actually, quick, interesting story this morning actually. I got up at 6am and had to go work at one of my rental properties because my contractor dropped the ball and never finished. And the tenants are moving in this, they moved in this morning and there was like a couple minor things like I didn't move the fridge from the left hand to the right hand side. And anyway, yeah, he never showed up. He just stopped calling it. I, yeah, it was my fault. I paid him before he was done with the last hour of work. I know that should be a tip too. It's not in here. But don't pay your contractor till they're a hundred percent done. Not 99.9. Anyway. Yeah, terrible.

Yeah, that's, that's why you were late for work.

That's why I was late for work.

All right. Well, tip 16.

When getting started, you'll be shocked at how much some contractors charge. Speaking of contractors, of course, in my mind there's three categories of contractors. You got the low end, cheap guys who are usually working under the table. Then there's the expensive guys. They're like the finished carpenters who charge 500 bucks to screw in a light bulb and another $500 to put the flashing above the light bulb.

Because they're used to working with rich homeowners and things like that. You probably are not looking for either of those guys who you want really are the middle guys. These are the guys who do very good work at a fair price, but it's not always easy to find them. So let's go to tip number 17 here. Yeah, 17 is the next one for an idea on how exactly to find these mid level, really high quality guys.

Alright, so this was from the episode that we interviewed Jay Scott on and he said to go to Home Depot like 6 in the morning and find out who's there getting materials. Gotta get business cards, strike up a conversation, talk with these guys. Those are the ones that are getting up early and actually doing the work you can. He said that's a really good way and I love that idea.

Or just ask other real estate investors. You know, it's true that some investors might try to hold on to their contractors and not share them. You know, stingy Brandon.

Brandon, I tell everyone, yeah, that's why.

You don't have any good contractors.

That's probably why. Yeah, use this guy. He's great.

Yes, he's awesome. Where is he? Why isn't he answering? Michael? But listen, so most investors love to give out referrals because they want to help out and it makes them look good. So reach out to other investors and see if they've got recommendations. And that is tip number 18.

That was number 19 is if you are brand new at this, do not skip your professional inspection before buying a property. I mean even if you're not new, even if you're experienced, I don't recommend skipping it. But especially if you're new, make sure you pay the money. It's like usually 3 or $400 to get a good professional inspection. And yeah, definitely do it.

Nice, nice. Tip number 20, we're halfway there, huh? Tip number 20 is when you've got that inspection, go with the inspector, actually go and be there and be present for the physical inspection. Follow him around like Brandon, like a lost little puppy and.

Ask a million questions. These guys listen these guys and we Actually had, we had an inspector. We did.

Oh, it was appraiser.

Oh it was an appraiser.

You know, close enough.

Wah wah. We haven't had an inspector. But anyway, follow your inspector around. Those guys have a crazy amount of knowledge and since you're paying them anyways, you might as well get to know the property you're about to buy and you're definitely going to pick up some tips and tricks to help you out on future investments. So show up and be there.

Definitely. Alright, so the rest of these tips for the second latter half of the show are kind of in categories. So the first category we're going to talk about is off market properties and kind of marketing. So we already talked about the agent thing. So let's talk about off market. So tip number 21, driving for dollars. This can be a really, really good way to get started. If you do not have a lot of money for marketing. It basically means get in your car and drive and find some neighborhoods or communities that you want to focus on and the price ranges you're interested and just drive around and look for vacant lots or vacant, I mean vacant property or whatever. And there's actually a few really, really good articles on the blog that I'll link to in the show notes that give kind of a step by step detail on what to do when driving for dollars. So yeah, those will be in the show notes@biggerpockets.com show40.

Yeah, I actually think that's probably, probably one of the most important jobs a new investor can possibly do. I know the first time I bought I didn't know what driving for dollars was. I literally just got in a car, was like, hey, I need to find a property. This is the area that makes sense. And I went up and down every single block, got to know the properties, the pricing features, things like that. By the time it was all said and done and it took a good number of days to do that, I had such a great understanding of the area. I could tell you if somebody was overpriced or underpriced. I could tell you rent rates, I knew everything.

Now today it's even better. With the smartphones we have, you can take a picture of a house and it'll tell you all the information about it with a couple apps. So anyway, cool stuff.

Yes. Yeah, we didn't have smartphones when, when I was doing this. You're right.

No, you had like the rock and the stone wall. I think it was.

You can't see but I'm eyeballing him.

Right now he is eyeballing me. Let's go on to number 22.

Number 22, if you've got some money for marketing, one of the most popular strategies out there and effective strategies.

Direct mail, is the process of sending out letters or postcards to a huge number of people hoping that a small percentage will respond. Typically, you do want to target those folks to specific criteria. Say you're targeting folks in probate or divorce or things like that. The most common type of direct mail is either postcards or yellow letters, and usually they have a very simple I want to buy your house for cash message on them. Yellow letters are very popular. We've got dozens, hundreds, if not thousands of conversations on the site about them. Lots of great articles. So just search direct mail on biggerpockets and you'll get a ton of great tips. So direct mail, check it out.

Cool. All right, number 23. The secret to direct mail, this is a tip is repetition. You've heard every, pretty much every guest we've had that uses direct mail. They say the same thing is contact people over and over and over again. Aaron Mazzarello said on I think it was show 38 that the letter on their table the day that they decide to sell is who they're going to sell to. Don't be a one and done mailer unless of course it makes sense for your niche. Like last week with Seth Williams. He does that with lan, but it makes more sense for him.

There is an art also to this and we have covered that in previous shows. Knowing when an event's going to happen and you know, making sure that you send direct mail in the lead up to that event like a foreclosure or things like that. So definitely pay attention to that.

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Another tip about direct marketing for tip number 24 is if you're sending to a really large list, either spread out your letters throughout the month so you aren't flooded with calls all at one time or use a voicemail service like Google Voice so that all the calls are sent to voicemail. You could do some pre screening and call people back on your own time. If you think about it, you can do the math. I send X number of letters, I'm going to get X number of responses. Some people might say oh okay, well I want to do 10 times that many deals so I'm going to send out 10 times as many postcards. But if you don't have the infrastructure, you're going to get flooded and you're not going to be able to get back to people in time. You're going to be on the phone constantly, and until you build that team out, most of those leads are going to go to waste. So start small and work your way up.

Yep, Perfect. All right. Another good phone tip comes from the episode number show 21 with Jerry Puckett. And he mentioned when somebody calls and doesn't leave a message, text them back. If it just, you know, you don't pick up and they don't leave a message. Yeah, I thought that was an awesome idea. It just kind of makes it so you're not bothering them if they really don't want to talk to you. But it still leaves the door open.

It's a good tip. Except some people, like me, think it's creepy.

Maybe. But, you know, what are they gonna do?

Yell at you?

Maybe get you or something?

Yeah, you should. You should. No, it's. It's. Yeah, I think it's a great tip. I personally, if somebody texts me that, I don't know, I just don't respond.

Yeah, but you had just called them anyway, so, you know, whatever, whatever.

You want to argue about it? Geez, man. Yeah, let's do it. Let's do it. All right. Tip 26. When dealing with direct mail, look for motivation and equity. If someone has motivation but no equity, there isn't a whole lot you can do for them other than maybe a short sale. If they've got equity, lots of equity, but no motivation, there probably isn't much you can do. What you want to do is you want to focus on those who have both equity and motivation. Remember, as a real estate investor, your job is to help people solve problems. And if they don't have problems, then there's no motivation. If they've got problems, they're motivated, and then you could step in and help them resolve that. You want to find somebody who's got both of those things happening, and that'll help you get the deal.

All right. Number 27 and 28 are a little bit in a category of themselves. It's kind of about NETWORKING. So number 27, get some business cards and just start handing them out. Don't stress about it. Just go order some from Staples if you don't have any, or Vistaprints or Moo.com, whoever, and then go to, like, Ria's Chamber of Commerce meetings or anywhere where, you know, professional people get together and start handing them out.

Courthouse steps.

Courthouse steps. Yes, that's right.

Hand them out, give them out. Let people know who you are, that you're the guy. You're the man.

You're the guy. You're the man now, dog.

You're the man now, dog.

There we go.

That was Sean Connery.

That was Sean Connery. Nice. Yeah, go to. You're the man now, dog. Dot com, people.

It's.

It makes. It'll make you laugh. Anyway, number 28.

Yeah, why don't you do it since you paired them all together?

All right, all right. So consider starting your own local real estate club or meetup. I'm not talking about a guru pitch fest. I'm talking about an actual, like, networking event. And you don't have to be like a seasoned professional to do it together, you know, like minded people together. And you can actually build your reputation quite a bit just by being that guy who brings people together. It's like the connector. Everyone look like likes the connector. So yeah, start a meetup.

Everyone likes the connector.

Is that a song?

I don't know.

Oh, okay.

I didn't even know that, you know, and, and, and along those lines, you can also use bigger pockets to do that. And I know that Brandon's actually put together a couple articles on that topic. How to use biggerpockets to set up your own local BP meetup of folks. And hopefully we'll link to those in the show notes as well.

That we will.

Yes, yes. All right, so why don't we move on from marketing and talk about what happens when dealing with sellers, otherwise known as the negotiation. Negotiation. That was creepy. I tried. All right, tip 29. Brandon. Good tip. Ready? Shut up and listen.

That's nice. All right, so shut up and listen, guys, seriously, a seller is going to tell you a lot of things. So before you start talking negotiating and try to make things happen, just literally sit back and listen. What's the reason they're selling? Use words like tell me more to go deeper into the issues. They may act, for example, like the price is their number one concern. But in reality, if you're paying attention, it might be that their monthly budget or losing their job or one of a million other things is really what's troubling them.

If you actually listen and don't have to talk on top of them.

You'Ll know what's going on and you'll be at their pain point where you could come in and help them. That's tip 29.

Oh, I'm sorry. Were you talking? I wasn't paying attention.

All right, tip number 30.

Tip number 30. What is this? I don't know.

Yeah, yeah, I'm paying attention. All right, tip number 30. Try to think creatively when talking with sellers, because a lot of times people think they're 100% firm on price, and they might be more flexible in other areas like terms or monthly payment. Or maybe you could structure the deal a little bit differently. For example, if, let's say, they don't have a lot of equity, maybe you could do a lease option that's a decent option for people who don't have equity. A lease option or short sale. So anyway, be creative.

There you go. Be creative. Tip 31 is closely related to creativity, and that's to focus on speed, not the drug.

You're funny, man. You're getting funnier. Look at me. All right, so in today's world, guys, people are used to having things like right now. There's no time to think. Which, by the way, is a great book if you want to know anything about the changing speed of the media landscape that we're in today by Charles Feldman and Howard Rosenberg. Fantastic book. I was actually a researcher on the book, which is why I bring it up.

Nice.

How about that plug? No time to think. Use that to your advantage. It may seem crazy, but people may be willing to sell for tens of thousands of dollars less if you can close your deal next week instead of next month. Get out there and make it happen for sure. Nice. Nice. Brandon is actually holding up the book. No time to think right now, which is pretty cool. I didn't know you had it.

Yeah, you recommended it once I bought it. I never read it yet.

That's awesome. It's kind of like what's. What's that book that you recommended to me? Oh, all of them?

Yeah, all of them. You started for our workweek, though.

I did. I'm on page, like, 28, and I've been on 28 for about a week and a half, so.

Nice. Good job. Well, you know, sometime in all your extra downtime, you can. You can read. All right, next 1. Number 32. Do not be afraid of the word. No. The truth is, a lot of deals simply aren't going to work out. So don't try to force one. It's far better, far better to buy one great deal than a hundred crappy deals. So focus on the great deal that you know you can profit from instead of the hundred deals that you have to force. So be patient.

No means no, folks.

No means no.

That's right. All right, let's move on to the next topic, and that's tips for investing while holding a full time job. Both Brandon and I work full time and probably more so. We certainly understand that this can be tough. Why don't we move to tip 33? Tip 33 is evaluate what kind of investing will fit your current lifestyle. If you're working, say, 80 hours a week, my guess is flipping houses is probably not going to be an ideal solution for you.

That's why it's not working. I get it.

Yeah, yeah, there you go. So, yeah, listen, find you're fired. Find investment niches and strategies that fit with your job. And since Brandon's fired, I'll move on to 34. No, just kidding. So, no, seriously, a lot of new investors don't realize this, but it really is important. Flipping houses is a job you can't flip, especially starting out, until you've built systems and processes. You can't do it on the side. You really can't. I mean, there's just so much required. So think about all these things when you're deciding on the strategy and the niche that you're going to be focusing on.

Yeah, I know it's easy to get, like, the shiny object syndrome when listening to the BiggerPockets podcast because it's like, oh, I want to do that. And oh, I want to do that. And, oh, I want to do that.

But, yeah, fire you already. Why are you still here?

I'm staying. All right, number 34.

No means no, Brandon.

Number 34, you've got to have a business mindset or you will go crazy. Trust me. Like, you need to develop systems to handle your business so that you are not a bottleneck within your business. So that's basically the idea. If you guys have read the E. Myth or the Four Hour Workweek, it's that you got to turn your business into a machine that runs smoothly with or without your direct involvement. So it doesn't mean you're going to never work at it. And I think a lot of people misunderstand things like the E. Myth or Four Hour Workweek. They think that you're trying to get out of work, but it's not about getting out of work as much as it is getting out of being a clog in that work. So anyway, a good example of that, having a maintenance guy you can call. I mean, you might be, you know, handy manning, but if you are out of town and you can't fix a leak, and you don't have anybody to call, you're going to stress out and have a problem and you're going to have a bad day and can't go on vacation and whatever else. So anyway, systems, good things.

Nice, nice. And that leads us to our next quick tip, which is don't be afraid of property management. You guys want, you want to plan for it. When we talked earlier about the 50% rule, we talked about all the expenses that come into play when you're buying a rental property, investment property. But property management is something that you need to plan for even if you're not actually paying a property manager per se. When you're just starting out, it's easy to say, well, I'll just manage myself so I don't need to budget for it.

It's a huge mistake because there might be a time when you are forced to use that property management, but if you don't budget for it, you're probably not going to be able to afford it. So even if you're going to manage your own property, make sure to do the math as if you're going to hire it out. I think a safe bet is to factor in about 12% for property management, just in case. So definitely budget for that number. It's really going to be key because you know what, if you're doing the job, you're spending your time working, so you need to be compensated for that time as well somehow. That's, that's how it kind of all works out.

And nobody told me that when I was starting. Like, I didn't have the Bigger Pockets podcast to hear that. And so I didn't. All my first houses, I never budgeted for property management. And now if I'm going to add it on all of a sudden, it doesn't make, you know, it makes my cash flow. Supposedly properties no longer cash flow.

Good losers.

Yeah. So anyway, I wish I had known that when I started, but. Yeah, but now I can know that based on experience and tell everyone else.

There you go.

Alright, number 36. Speaking of property management, if you do hire property management, don't settle for a mediocre one. Find a great property manager because, I mean, these people are in charge of your collective financial destinies. So yeah, find somebody who actually does an amazing job, gets units rented, obeys the laws, follows everything. I mean, it'll save you a ton of time and a ton of money in the end.

Yeah, and we've got a lot of articles on that topic on the Biggerpockets blog. We Also have a interview worksheet which I put together years ago after suffering through some horrible hells caused by terrible property management. What I did was I compiled a property management interview worksheet. We'll link to that in the show notes as well. Check it out, print it out, do what you want with it, but make sure to ask all those questions when you're hitting up property managers so you've got something in writing and you know you can compare them evenly across the board.

Yeah, good, good tip.

Yeah, there you go. All right, tip 37. Another tip for those of you who are working a job and looking to buy an investment property is to set your criteria extremely tight and don't waste your time on properties that don't meet those requirements. Realize that you do have a limit on the amount of time that you've got in your life. Your free time is certainly limited because you're working a job. So focus on your specific niche and criteria and do not deviate. It's really easy to do. So focus on that. Do not deviate. You could probably actually even set up automatic alerts with your real estate agents once you've created those criteria. For example, say you want small multifamily properties between two and four units that are under $200,000 in a specific location. This way you're not looking at that 5 Plex that just came on the market or the single family home that popped up. You might miss potentially some good deals. But when you're working a full time job, that's something that's going to come with the territory. Focus, focus, focus and go from there.

That kind of comes back to that tip we had earlier about not forcing a deal. When you're working a full time job, you can't always take the time to try to, you know, try to be super creative and force every property into a deal. I mean, if it works, it works. If not, if not, move on. All right, number 38, finally find an agent that is good with online signatures because seriously, this saves a ton of time. When my agent started sending me all these documents to sign and I could just take my, you know, my iPhone out and sign them right there. That was like life changing. An offer became like a two hour event, down to like a two minute event. So totally changed my investing life.

Nice.

Yeah.

And who do you use, by the way? Because I use Echo Sign for online signatures. Who do you use?

Who does that company? I don't remember actually, but I don't like them as much as I Echo Sign. I've used echo sign too, but my agent doesn't use echo sign, so I use the subpar one.

Nice, Nice.

But it's.

Yeah, there you go. All right, so we've got two final tips for you guys. 39. It's really, really, really, really easy to get overwhelmed. On this show in particular, we're talking about 40 different tips, but you don't need to master each and every one of them. Just sit back, relax, take a deep breath, and know that you actually don't need to know everything. I think that paralysis by analysis thing comes up from people who just think they have to have the answer to everything before they jump into something. Start by taking baby steps. But start, don't wait, don't deviate. Just get it going. Start today, right now. Do it now. Stop listening to the show and go do something. No, don't stop listening. The show is about over. So when it ends, go out and follow at least one of these tips. Maybe it means calling up a real estate brokerage, local brokerage, to find a good investor, friendly agent. Maybe it means calling back that motivated seller you've been putting off because you're scared to hop on the phone. Maybe it means getting in your car, driving around your target neighborhood, driving for dollars. Whatever it is, just go do it. Just one, just do it. Baby step. Make it happen. Do it, Brandon.

Do it. All right, our last tip for the day is, okay, it's a little self serving, but it's important nonetheless. But it's definitely jump into the BP forums with your deals. Like, honestly, if you have a deal that you think, hey, this might be a good option, like take it to the forums. You don't. If you're worried about somebody stealing your deal, which you shouldn't be, but if you are, you know, don't put the address down. But you know, say, you know, here's what I'm thinking. Here's what the rent will be, here's what the price is. What do you guys think? It's really, really, really helpful to jump in, especially if you're new, but to jump in and talk to other people who might also be in the same boat as you, or those who are super seasoned and they know what they're doing and they can help you walk through it. And there's so many guys that, like, I mean, I'm grateful for who have helped me over the years to look at deals from kind of another angle and tell me if I'm on the right track or not.

Yeah, yeah. And guys like John Holdman and And Will Bernard and Jay Scott, you know, a lot of these folks will, they'll write a whole diatribe about what on earth you're doing right, what you're doing wrong. I think Brandon explained it's free. There's literally no cost to you. Go to the analysis forum, put down the deal and ask for help. Are these numbers good? Are they bad? What should I do? What can I do differently? And get it out there? That's a great tip. And we will of course link to the analysis form in our show notes as well@biggerpockets.com show 40. Cool. Yeah. So that was 40 tips. Not bad, not bad, not bad. It's been about an hour since we started recording. Given all the cuts that we'll probably have to make to this day, it'll be a little shorter. But listen, hopefully you guys can take those 40 tips and apply them to your life this week. Make it happen.

Right?

As always, we do want to thank you guys for supporting us for the past 40 shows.

I don't know, I think of it as an honor to get to hang out with you guys each and every week and talk about real estate. More importantly, really just get to make fun of Brandon for a good hour, hour and a half. So that's a lot of fun.

Yeah, everyone loves that.

But seriously, thank you guys for everything, for being part of our BiggerPockets community. And.

This isn't a tip, and this is kind of off book, but we've got 13,000 plus listeners now on the podcast. And if you guys get value from this community.

And you're not engaging and you're not connecting on our site on a regular basis, it doesn't have to be every day, it doesn't have to be every hour, although that would be great. But get involved. Really get involved. Jump in. You may think, hey, I have nothing to say, but if you set up alerts for local discussions for topics that are of interest to you, like multifamily or lease option, whatever it is, whatever is interesting to you, you're going to find out that there's a ton of awesome stuff happening. There's a ton of people on the site who are connecting and sharing great ideas, and they're doing it and it costs you absolutely nothing. You don't have to spend a lot of money to learn. You don't have to spend a lot of money to build your network.

You just have to interact, take a couple minutes and introduce yourself. Welcome other members in your area, get involved in debates, discussions, conversations, help people, give Them tips you actually learn by teaching many times and I think that's a great thing that happens daily on our site. Give it a go. If you haven't yet jumped in on the site or if you've jumped in with one post and haven't done any more, give it a try. You'll find that it's really a warm and friendly environment and a great place to hang out. It is.

I've been on there now for what, five, six, seven years, who knows forever. And I'm continually, I mean I'm asking questions all the time. Like I'm not just, you know, the get made fun of on the podcast guy. Like I actually like I'm in there asking questions a lot because I'm learning a ton as I grow in my investing. So anyway, please, you know, jump in and also if you guys appreciate the site and the community, you know, pay it forward, tell other people about BiggerPockets. You know, there's like what, 27 million investors in America or something like that. We figured out like in that survey we did. But not all of them are on BP and they don't all have to be on there, but it'd be cool to have a bunch of them.

Yeah, it's not just self serving because the more of this interaction that happens on the site, the better it is for you. You're building your brand, you're building your name, people are getting to know you and recognize you and so engaging is definitely going to help you. By the way, that study was done. That was a BiggerPockets Memphis Invest study.

We did it in coordination with Memphis Invest and Memphis Invest is of course the sponsor of today's show who we want to thank once again for being our sponsor. So definitely make sure to check those guys out@blog.MemphisInvest.com BP alright guys, again, beyond the usual following us on Facebook and Twitter and all the other social media channels, which we hope you do and the interacting on the site. Brandon did say spread the word. I can't tell you how cool it is to watch the site grow. Next week is going to be the ninth birthday of Biggerpockets.

Next Tuesday.

I don't know, we're at 140,000 members. I remember the first member, I remember the fifth, the tenth, I don't remember the 138,333rd but it's really special to see this thing grow.

I've really, really enjoyed being a part of so many people's lives and watching so many people benefit from this community.

If you're on the site, if you're an investor and you get value from it, just tell your friends, tell your agent, and tell your title company and tell your lender and and appraiser and everyone else to come on board. If you do that, you're going to bring them value. They're going to learn more, they're going to derive value. They might get more clients and customers and business as a result.

We'll take this thing from the 140,000 members to 200,000, 500,000 and more. The more people we have, the more information there is from the collective right. And for all you Star Trek fans, there is power in the Borg, there is power in the collective mindset. So come in, get your folks in, and let's hang out and learn and do business together. So show 40 thank you. Thanks for listening. Thanks for engaging. Jump on the show notes biggerpockets.com show40 and that's it for me. What do you think, B How do we do? We did all right, guys. This is Josh Dworkin 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 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.