505: “Act Like You Have 100+ Units” | Coaching Calls w/ Brandon Turner

This is the BiggerPockets podcast show 5:05. When I got to that next level, like everything got easier and less stressful. Like all I do now is make those high impact decisions, like I don't do like the minor level. And it just became so much more fun because I've got people who are really good at what they do. But you know that what that took is that, that leap.

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What's going on everyone? It's Brandon Turner, host of the Bigger Pockets podcast, here with myself today. So today's show is a little bit different. It's a solo show with me, but not just me. I'm actually bringing on three different investors at three different kind of phases of their investment. Different focuses, different strategies, different locations. And one at a time, I'm going to spend about 20 minutes with each person just doing one on one. I don't know, you can call it coaching, consulting or just chatting. I'm just going to try to help these people figure out how to grow their business, how to get to the next level, how to elevate themselves, how to stabilize their business, how to do whatever they need help with is what the plan is today. So three investors and those are Sheena, it is Luke and it is Joe. And so you're going to hear from Sheena, Joe and Luke later and we'll get to that shortly. But first let's get to today's quick tip. Alright, so today's quick tip, I mentioned this a few weeks ago, but I'm gonna say it again. Now is BiggerPockets is doing a giveaway for people who want to, I guess, better their investment life. They want to be better real estate investors. So how, how do you become a better real estate investor? Well, having a Pro membership would probably help and having access to the Bigger Pockets wealth magazine would help and reading some Bigger Pockets books would probably help. So we're gonna give away that A year of Pro, A year of wealth magazine and $100 towards BiggerPockets books here' just put your Social Security number in. I'm just totally kidding. No, all you do is log into your BiggerPockets account anytime between now and the end of September, 930 at 11:59pm and you'll be entered the win automatically. Don't have a BiggerPockets account? It's free. Sign up@biggerpockets.com and as soon as you sign up, you're automatically entered to win, so definitely check that out. No purchase necessary, of course. Void where prohibited, and you must be 18 to enter. Full rules are available@biggerpockets.com Bundle what if.

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It's time to jump into today's episode. Now keep in mind as I, as I try to offer some help today, understand that I am just one man and one man's opinion. And so I'm not a legal person lawyer, I'm not a cpa. I'm not offering legal tax advice. It's just my my opinion, entertainment value for what it is about what I would do if I was in their shoes right now. And I hope you get some value out of it. And again, just I want you don't just take what I say as like oh Brandon said, do it this way. My goal with any kind of consulting or coaching or talking and I don't do a lot of one on one stuff but my goal is to help the person come up with their own solutions. I don't want to just tell them this is what you should do because people like, they need it to be real for themselves. So if something today that sparks some new idea for you, great. But don't just blindly take whatever I said for one of these people and go apply it to your life. Use it to spur you on, to get you excited and to get to the next level. But I think you're gonna like this. I hope anyway. So thank you for being a part of what we do here at BiggerPockets. If you are watching this on YouTube right now, don't forget to click that little thumbs up button if you find this helpful. That helps us reach more people on YouTube. And of course if you like this show don't forget to leave us ratings and reviews wherever you listen to the podcast. Those ratings and like an itunes especially really helps us reach a lot of people and I don't know, I guess that's all I got. Follow us on at Bigger Pockets Everywhere at Bigger Pockets on social media. You can follow me personally @bardybrandon on Instagram or Snap. Snapchat. I'm not on there. TikTok. That's the word I was looking for and I had a post go viral on TikTok, my first one, by viral, I mean, it had like 300,000 views, which is crazy. And all I did was nodded and smiled to somebody else's video. It was stupid, but go check it out. It was good advice, but it was just me. I looked stupid the whole time. But I think that's the key to TikTok is just look stupid. And people want to, like, watch that.

I don't know.

Well, let's get to today's show. I think you're gonna like it. All right, Sheena, welcome to the podcast. How you doing?

Thanks.

I'm great. Thanks for having me.

Yeah, for sure. I want to start just by kind of getting to know you a little bit better and letting our audience get to know who you are a little. So who are you? What do you do? What's your. What's your story?

Well, I live in northeastern Ohio, and I was an engineer for 10 years until my husband and I had a little baby two years ago. And I, yeah, I took the opportunity to say I'm going to take a step back from my career, stay home with him, spend time with him. But I also wanted to kind of take a dive into real estate investing because I had been wanting to for a number of years, but I was so tied up in my career, I just. I never took the leap. So I kind of coincided my start in real estate investing with his birth. And so I've been. I've been kind of in the space for just over two years now.

Okay. And what do you. What do you own right now?

So I started off with two single family births, and it actually took me almost the entire two years to do those two single family births. But within the last month, I kind of gained some momentum, and I'm really working hard on changing the trajectory of my business, and I was able to close on my first mobile home park last month. It's eight pads. Thanks. And I actually picked up a partner, my brother in law, and I have a second mobile home park under contract right now.

Oh, Virgo. How big? That one.

That one's also a unit.

Wow.

All right. And those are in Ohio, I'm assuming, like near you?

They are both of them.

All right. Yeah. So first of all, I just want to commend you on how awesome you're doing, like, just taking action like that. I know it sounds like it took a long time to get that first two deals, but it's like the way I always talk about the train. Like, it takes a long time for a train to get up to like 1 mile an hour and then 2 and then 5 and then 10. But it speeds up over time, as you've clearly seen. So hopefully that's a lesson for everyone. Listening right now is when it feels slow, it's okay. Like it just, it takes a lot of momentum or a lot of effort to get that momentum built. So now you're feeling it. So what, what would you say is like if you could describe your biggest problem or hold up or thing that's holding you back or thing that we can work on today.

So I've started growing very quickly now and I'm just having a little bit of a problem figuring out which direction I need to go in to grow the best and to build the most solid foundation for the business moving forward. Things are happening kind of fast and over the first two years I was the person mudding the drywall and I was way too in the weeds.

I realized a few months ago that I was really lacking momentum because I wasn't leveraging my skillset. I had been trained as an engineer, as a project manager, I was a team manager. I realized I just wasn't applying those to my real estate investing. So now I'm trying to zoom out, look at the big picture and stay, you know, at a high level view, looking how my business is going to move into the future.

So I started, I started small. You know, I hired a VA for my bookkeeping, I hired a CPA because I have done my taxes for my whole entire adult life. I've done my taxes by myself. It's like, it sounds so amateur now, but so I finally hired a cpa. You know, just getting people for lawn care and snow removal and simple things like that. You know, I've got that now, so. And I've also, I mentioned already that I'm leveraging a partnership with my brother in law. So that's going to help me grow faster. He's bringing.

Yeah. What is he bringing? What's he bringing to the table? Like what are you, what are your different roles there?

Well, he's bringing capital and you know, additional boots on the ground to just help me grow, you know, we're hoping that this deal will go well and we'll be able to do more deals together in the future. Having someone to bounce ideas off of and talk through things is so valuable. It's really helped my morale.

It's a game changer. People who are in this game of real estate like by themselves for a long time, it's such a recipe for burnout and for Boredom, right? Like you just like stop caring after a while. It's like, oh, this is such a hard train to get movie and I think I'll give up. So, I mean again, I'll commend you on that one. Yeah, you're killing it there. So what's, what's the long term goal? I mean if you're trying to figure out a scale, try to maybe like to get to that next level. So where do you see yourself headed? Let's call it three years in the future. What do you want to have?

Well, three years in the future, my goal is to have $3 million of real estate in my portfolio and work 16 hours or less per week in the real estate.

3 million in real estate owned. 16 hours of work or less in real estate. Totally, totally doable. Let's get, let's talk about how to get there. So would you say you like, I mean on a day to day basis, like right now, what do you spend most of your time doing?

Well, now that we are, you know, I have a mobile home park and we have another one under contract. They've been sucking a lot of my time up, you know, getting. All of a sudden I've got more tenants than I've ever had before, trying to get them on board with, with our processes and systems and then building those systems in a logical way so that it is scalable because I've just been rolling with a couple of tenants at a time and anything works when you've got two tenants, right?

Yeah, yeah. You know, you probably heard me say this before, but I'll say it again. Is the first thing I did in my like outsourcing life, the kind of the who not how mentality, right, was I hired my mother in law for 200 or 250 bucks a month to just answer phone calls from my tenants. And just that concept of like getting someone else. And you've already started experiencing it with the VA and with the CPA and the snow and all that stuff. Like you're experiencing it, but it's just a constant thing to be aware of is as you're going forward is like what are you spending most of your time doing? And a lot of it is going to be tenant interaction of getting them on the systems. Now at some level you just have to build the systems. It's required. Like you can't necessarily, I mean you could, I suppose, but it's hard to outsource system building. Right? That's the whole point of a system is so you can get out of it but what are you doing right now for like property management? Like what's your systems look like for that? Do you have software? Who are the tenants calling when there's a problem? What's that look like?

So we or I had been using Cozy Co. It just merged over to apartments.com and the tenants call me. They have my cell phone number.

Okay. Okay. That's pretty normal for starting out. I feel like I have one tenant left who has my phone number out of 2500. So it's a completely normal but getting out of that eventually. And that's, that's a system right there that you can start putting in places even if you're not ready to hire a manager, whether in house or outhouse. I don't know what we call a non in house property manager, but you hire like an actual property manager even if you're not ready for that yet. Switching your phone number to one that can easily be shifted around to different people like with a, you know, call what's called call central or Ringcentral. Ringcentral or even Google Voice. I definitely recommend that like maybe you've already done that. But starting there, that's like a system that will, you know, dig in your well before you're thirsty. It's getting ready for the day that you can just transfer the number without losing your own and you get the tenants to just forget your personal number. Right now just hey guys, I got a new phone number. And it's just like a mental thing to start with. So yeah, I definitely, I definitely look into doing that. What about the next, the next kind of phase, I guess you want to close on this eight unit that you just got under contract. That'll put you at 16. So what are your fears behind that or what are your worries? What are your concerns about that taking up all your time? Like where do you think your time will be on that?

Well, the first park that I, that I've already closed on, it's, it has a long way to go before it's stabilized. You know, I have to bring in some homes and so that's taking time right now.

Yeah, the, the infilling of a mobile home park and the stabilization is. I mean not just mobile home parks. Right. But any multi family if it's not a super optimized already. The stabilization takes a lot of effort. I'm kind of letting everyone know that's not familiar with the industry. You got to find homes to bring in. You got to be able to get those tenants like to find the qualified people Put them in place. So that makes a lot of sense. What else? Anything else in there?

Just tenant relations. That's like the biggest concern that I think I have right now. Out of everything.

Have you looked into hiring an actual property manager? And if so, why? Or not. Why or why not would you do it?

Well, I looked at a couple of local property managers. The only problem that I see with them is that they don't manage mobile home parks. And I've heard it said before that it doesn't translate well when you have a property manager that's used to apartments, you know, coming into the mobile home park space, sometimes that just. It's not a good fit.

Yeah, I mean, there are ones that are okay, but I. I always assume, like, a good property manager is the exception, not the rule.

Right.

Like, so most of them are terrible anyway. Especially when it comes to mobile home parks. Most of them are terrible. And that size, like, it's hard. You can't put in a resident manager necessarily, though. Have you looked into that? Could you offer one of those eight units a discount on rent or even free lot rent in exchange for taking over? Is there anybody of that caliber in there that could help with that stuff?

I think there is one, and I have not given that much thought yet. Yeah, so that may be a good option.

One of the best pieces of advice I heard when I got into mobile home parks, I can't remember if it was Jefferson Lilly or Kevin Bupp that said it. I listened to both those guys, mobile home park podcasts, and they said, one of them said, drive around, look for the park, like the. The resident who has the nicest property, who takes the best care of their unit, that has, like, the cute yard or cute little, you know, bunny statues in the front yard, those kind of things, because those people have pride of ownership or pride of rentership. And those people become your ideal eyes and ears there by offering a little bit discount for them. And as long as you give them a system to follow, they can handle like 80% of what comes your way. For example, if a tenant has a problem with a plumbing problem, like you're a guy, call. Call Cindy. She's in, you know, this apartment. She's our resident manager. And honestly, like, some people will do it for free just for the joy of being, like an authority, because they've never been an authority a lot of times in their entire life. So they. They all of a sudden have some authority, and they feel really good about that. They're like, oh, yeah, I'm. I'm the resident manager. Now, that can also go to people's heads and cause problems. So you got to watch over that a little bit. But do the tenants own their own homes or do they rent from you? The home and the land in the.

First park that I bought, they own their own homes. In the second one, they're all rented. So we're going to look into doing some, you know, finding tenant buyers to purchase them from the home.

Yeah, we did that with our first part. I mean, we do with all our parks. But yeah, we try to make sure that as many as possible tenants own their home. Right. Because the beauty of that is once they own their own home, they are the ones responsible for their water bill. And they're. I mean, they might be that way anyway, but their water leaks and their toilet's not working. Right. I mean, this may sound obvious to people, but like, if a toilet. Like. Like the toilet, what's called flapper on the bottom of it, like a toilet tank. Like, if that thing's leaking and like the toilets running all the time, the part is under $5, you go to Home Depot and pick it up. Or Ace Hardware for five bucks. The cost of hiring a plumber to fix that problem, though, is about $300. The tenant, though, can go and fix their own toilet if it's their toilet for $5. Like they. And a lot of times they don't have anything better to do. They can watch a YouTube video, they can fix their own toilet. And that's why I was such a big proponent of buy. They own their own homes. And I'm sure you've probably. You see that as well, I'm assuming, which is why you said you want to buy the tenant buyers or find them. Right. So again, making. Making one of the residents there responsible for phone calls. Have them receive the phone calls and have them deal with maybe minor maintenance concerns, especially the new one that you have a lot of tenants in it. You're going to have to deal with repairs and maintenance. So if you had a list of like, these are my three maintenance people, call them in this order first. And when there's a problem and everyone just calls the resident manager and you have an opportunity on this new property to start fresh. Right. To start with these eight people differently. Because oftentimes what we find is like, I find it very hard to change course when I've run my business badly in one regard. And then all of a sudden I realize not even badly, just the way that I don't want to do in the future. And then I want to change course. But the tenants have been trained on the old system, and so it's way easier to bring in the new people on the new system. So now, obviously the time to be thinking about this, which is why we're talking today. There's also the avenue of, like, with the older tenants. I've done this a number of times where I've sent an email, or not email, but a letter to my tenant saying, hey, management is changing here. Or, hey, my attorney says I need to manage this property differently. Or, hey, my CPA says I need to do this. I just blame somebody else and say, therefore, here's the new system. And if you just come in and say, hey, guys, new system that makes everybody confused and angry. If you blame it on somebody else. Like, my cpa, my attorney, all of a sudden everyone's like, oh, well, the attorney said so? So we're gonna do it that way. Like, Like, I don't know people who treat one tenant better than the other. Or, for example, let's say you let one. Not that you've done this, but let's say you let one tenant slide on rent over and over and over. And you've always been kind of like, soft with a tenant, and now you're like, wait, like, I don't want to be soft. I want to. I want to because they're taking advantage of me. I'm going to be a hard landlord. Like, I'm going to be. I'm going to follow the rules. It's hard to institute that rule unless you say, hey, my attorney says that if I let you slide on the rent and I don't let somebody else, I can be sued for discrimination from that other person. So I have to, by law, start implementing these new practices. And everyone's like, oh, okay, like, that makes sense. So blaming it on. They call it, like, appeal to the higher authority, I think, in negotiation. So that has worked wonders for me in my life. Whenever I find that I want to change how I work, I just blame some higher authority of why I'm doing it that way. And I want to be honest. I'm not going to just, like, lie about it, but I'll talk to my attorney or I'll know something that they say, like, oh, yeah, you shouldn't treat your tenants differently. Okay, great. That's an attorney saying that I shouldn't do it. So, yeah, that's a. That's a huge piece apartments.com you're running. Are you going to stick with that? Are you going to Try to upgrade to something different.

I'm looking at upgrading to something different.

Okay. What have you been looking at?

Inago, I think that's what you say.

Yeah, I don't know that one. I know I use Buildium for my smaller deals. We use rent manager for the bigger stuff, but there's a ton of them out there and they all work basically the same. It's more important that you, like, you feel good with it and you're like, oh, yeah, this thing does what I need it to do. I can get in here, I can, you know, do all that stuff. How are the tenants currently paying rent?

One of them is like, he insists on paying cash. Is. So, you know, I've been, I've accepted his cash rent in my receipt. That's, that's the first rent payment I've ever accepted in cash. Normally I would use credit cards or debit cards online, you know, on Cozy Co. But I've found that the mobile home park tenants, they're almost across the board just like, no, we don't want to pay online. So, yeah. So mailing checks and bringing cash has been kind of the norm.

Okay.

Yeah. And that goes to the other thing too. It's like people will resist. We found this with our mobile home parks. Look, we, you know, we're at over 2,000 now, but it's true for any lower income tenant. They will resist the technology until you tell them it's not an option. And then they all, they all do it. Like, even like old people. Now we've, we offer a few like, optional things like, hey, you can go pick up a money order from Walmart and you can drop that off, you know, put that in the box or mail that, as long as it gets to us by the date. And some of people will still do that because they just don't have a computer or a smartphone. They just can't figure out another option. So I don't want to like, say they can't do it, but everybody else, they will say they don't. They, okay, I only pay rent in cash. But your attorney just told you. My attorney. But you know, whoever, your partner just told you we can no longer accept rent in cash. We just can't do it anymore. It's a liability for us. And we could be, we could, you know, whatever, we could get in trouble for doing it, whatever. All of a sudden now there's like some higher authority. It's like, okay, well we have to create a new system for this. This is what I'm gonna need. You to do, buddy, go to Walmart, get the, get the money order, drop it off. It's gotta be to us before the first. That's what the rule is gonna be because of this authority. Person or it's online. If you give people options, like, it's not. You're being unreasonable. It's like, hey, you can do the money order or you can go and do it online, or you can pay this way. These are your three options. Cash is no longer an option. So, like, I would definitely implement that sooner rather than later. And with the new tenants, especially, like the new ones that you could get, like, no, this is how we work it. You have these three options. When you give people three options, right? Tall, grande, venti, they don't, they don't think yes or no. They just think, which one. And so when you give people options, there's gonna be like, yeah, okay, I'll pick one of these. So that's a huge one. And then like, just like thinking in terms of like, you want to have $3 million of real estate owned, let's just say that's the equivalent of 100 units. I don't know, give or take thumb, but you might have 100 units. So thinking now, acting like you have a hundred units, that's what. Probably the biggest encouragement I could give you is pretend right now that you have 100 units. So what management software would you need to manage 100 units? How would 100 or 100. How would 100 tenants pay rent every month? How would 100 tenants call? How would 100 tenants deal with, like, how would you deal with late rent when you have 10 of them that are late? Like, what's that system look like? And so just envisioning the world where you have 100 tenants will allow you to easily grow into having 100 tenants. And so getting around a lot of people might be wondering, well, how do you, how do you even know, like, you don't have a hundred? And that's where get. Getting around people more often who have a tenants, and they're gonna be like, oh, yeah, this is what we use for management. This is how we take the rent. This is how we deal with this problem, whether it's a local real estate club or whatever. But hanging out with a few people, or even just online knowing people who have 100 units picking their brain is going to be, you know, drastically different versus, like, you know, I can give you my advice, but I'm, I'm at a level right now, and I don't mean it as like, A, a good or bad, but, like, I don't even know. I don't even know how our tenants pay rent. I have no idea. Like, I, I mean, I, I, I know that we have those options, but what can they pay with? Credit card? I don't know. Like, do we, do we still allow. I know we used to have a system where they could go Pay cash at 711 called, like, pay near me. Do we still have that? I don't know. So again, that the guys like me, I can give you advice on like a high level, but the people that have the hundred units, they're going to be better for those specific, like, detailed questions. So let me ask, let me ask you another one. And I love this question. My favorite questions. Performance. My performance coach ask me all the time, like, what do you need to let go of right now to get to that next level? Like, you already, I'm guessing I have identified something like, what do you need to let go of?

Well, the accounting and bookkeeping was a big thing, and so I've taken a step in the right direction. I got a CPA actually just on board yesterday, so that's definitely helpful. But feeling like I need to be physically there watching progress and things happen is something that, like, internally, I just have to, I have to work on letting go of that internally. I can't be there when all the drywall's being mudded. If, If I have 100 units.

How many people live in your area like within like 30 miles drive of you right now, or 20 mile drive?

There are a few big cities around, not huge cities, but like Canton, Ohio, you may have heard of it. That's within 30 minutes.

Wasn't reliant. Do you remember the band Reliant K from back in like the early 2000s? Oh, yeah, yeah. Reliant K was, Aren't they from Canton? Yeah, that's, that's awesome.

Yeah.

Marilyn Manson Ate My Girlfriend was there, like very, one of their first songs. And I love that song anyway. That's funny. Okay, so here's another concept then, that, that I'll, I'll bring to you and I'll probably say it multiple times to the other people that we're talking on the show today too. And that is this idea that you are a rock star right now to thousands of people that live in your area that want to do what you're doing. Like, you might feel like when you compare yourself to where I'm at, let's say, like, you might be like, wow, I'm just getting started Right. But like, you own 10 units in a world where most people don't own anything. So the point I'm making with that is there are people especially listening to the show right now, but at the local meetups that would love to come and volunteer five or ten hours a week to help you with whatever for probably no pay. I mean, maybe you could give them something. But like, they just want to be in your world because it's like you are. Yeah, you are a rock star to them. So if you looked into the idea of an internship or an apprenticeship in your area, have you looked into that at all?

I have not, but it's a great idea.

I was, I would so encourage it. Like, and if you're listening to the show right now and you're like, you know, I just want to get started in real estate. I want to get going, but I'm not sure how to do my very first deal. Like, like, Sheena is the type of person you need to find somebody who's already got a little bit going. They've got the momentum building and you can go there and they got this little fire right now. You can go pour gasoline on their fire for a couple of reasons. One, if you found a rock star, she needed to come and help you with this thing, you could put probably grow to 100 units in way faster than three years. You probably get there like in a year. Right. If you had somebody that was just like pouring like gas, and if that was the case eventually, wouldn't you be willing to offer equity or offer a piece to the right person if they prove themselves because they help you get there faster? Definitely. So it's a win, win for everybody. And so because you already have this little fire going, like, let somebody pour some fuel on that fire and grow that bigger and faster. And here's the, here's the truth. Like, and this is true. In my own life, I am so bad at holding myself to certain standards. What I mean by that is, like, I know that I should do certain things. I should make certain phone calls and cold call and direct mail and all that. I just don't do it because I'm an entrepreneur and I just, I like big thinking. I don't like the day to day stuff. And so I tend to not do it. But you know who always does what they're supposed to do? Almost always employees or interns. Because they, it's like they're not the entrepreneur in that case. They're just sitting there doing what you said to do. So if you're like, hey, I need you to do this thing for me, and you're in charge of this. You're gonna take all phone calls, you're gonna handle all contractor stuff, and you're in charge of finding me a couple houses to put into my mobile home park. How are you gonna do that? Well, I want you to call every single mobile home park in the area and ask if they have any, you know, homes that they want hauled out of there. Or I'm gonna, I'm gonna put Facebook ads up in the Facebook marketplace that I buy mobile homes. You know, I buy used mobile homes for cash. And all of a sudden those things that, you know, you should probably be doing, but you're not doing because you're just busy now that stuff gets done. And that was why, like, BiggerPockets grew so quickly. When I came on board, when it was originally just Josh, it wasn't that I was good at what I did, I was terrible at what I did. I'm not a good writer. I wasn't a good, like anything. But Josh had somebody just to do stuff that he knew was needed to get done. So I wrote hundreds of blog posts and I. And I went to every conference I could think of. So anyway, having that person in your life, I mean, you got the brother in law, which is great, but you could also bring in some intern help. And I'm sure after this show, you're gonna get hit up by a bunch of people, but it's such a great way. Every one of my team members pretty much came from an internship and they learn and I found like, their, I saw their character and I saw their work ethic and they became a major part of my team. It's just such a low investment for what's a massive upside.

I think that's great information, honestly, very valuable. Thank you.

Okay, well, good luck to you and yeah, I'm excited to see where you had good luck on the closing of that property. And I would encourage you on the next one, look, look a little bigger. You can do it. I mean, like, don't stick. Don't. Don't get caught in the comfortable eight unit area. If you can get 20 after that and maybe 30 after that, you'll be at that three year goal in a year and you'll be like, dang, I did it. So you got this.

Thanks, Brandon.

Thank you. All right, everyone, hope you enjoyed that little segment there with Sheena. We're going to do a couple more of these today, so do me a favor. One, if you have more advice for Sheena. You want to be able to jump in and help her answer some of her issues or you have something that you want to correct me on? You think that I gave bad advice yet jump into the conversation. We want to make this an open conversation. You can do so by going to the show notes page@biggerpockets.com Show 505 again Show 505 we'll also have a link, you know, or we'll also have on the BiggerPockets Facebook group. If you're in the BiggerPockets official Facebook group, I'm sure there'll be conversations happening there as well.

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All right, so that said, we're time to move on to our next guest today, and that is Joe Rivera. Joe, am I saying your name right? Joe Rivera.

You are.

All right. I want to share with him Rivera, which I wouldn't imagine so.

No. But many people have messed it up over the years. So you're fine.

All right, Good, good. Well, Joe, welcome. Thanks for coming. You want to tell us a little about yourself? Who are you?

What do you do? Yeah, thanks. So I got started in real estate in the late 90s with a house hack in college and then took a nice hiatus for about 20 years and then bought a 4 Plex that was a section 8 and had some duplexes, sold those house, hacked a house that I was living in at the time and then bought some short term rentals down at the beach. And that's kind of where we're at at the moment.

How many do you have right now? What's your portfolio look like today?

Currently I have two condos at the beach and I have a third property that we're remodeling for short term rental down in the hill countries of Texas.

All right.

What beach are you at on those ones?

Just curious.

Galveston.

Galveston.

All right.

My sister lives right down near the Galveston. Okay. And if you could sum up your what's holding you back right now? Like where are you trying to get to and what's holding you back from getting there?

Sure.

Right now what's really holding me back is just the lack of investors. Right. It's where I want to go is I like the short term rental market. I really enjoy interacting with the guests. I like the all the opportunities and creating the house and the experience and doing all of that. And I have some markets I want to get into. It's just more of finding investors and moving forward.

Yeah. All right. Yeah, I know where you're at. Couple thoughts that's just come to mind. First of all, I actually just yesterday invested in a short term rental fund of a buddy of mine who's buying, building like 13 Airbnbs down in Waco, Texas. So I just jumped into his investment and so I know there are people that are looking to invest in people that know what they're doing and finding people that know what they're doing, that's the key. Right.

I talk a lot about like, if you want to raise money, you got to exemplify the kite principle, which is you have to have knowledge, integrity, tactics and then kit, what was e experience, right? So if you, if you can demonstrate you've got all that stuff, you've got the knowledge, you've got the integrity, you've got the right tactics. Like you've got the business plan and then you've got the experience. I think that, you know, that's what it takes to be able to raise money. But it's not all that it takes. Right. There's like, there's another level and that's what I thought maybe we'd kind of approach you kind of tackle this a little bit from today. Let me ask you a couple questions though. What have you done so far to attract investors? Like, what are you doing right now to reach out to more people that can maybe fund your deals?

So currently it was just word of mouth, talking to people. Right. I've tried to go to meetups in my area and that just hasn't really worked for me. You know, they're always like a sales pitch or I don't know, I'm a wallflower. So, you know, it's a lot for me to get out there and talk to people, but I do force myself, you know, to be uncomfortable and to do it. I just haven't succeeded at it. So currently I have two investors. One of them was just constantly talking about real estate all the time and you know, it's just kind of executed on it.

Yeah.

Okay.

What, where do you want to, like if you had like I'll ask the same question I asked earlier. 3 year goal. Like I asked Sheena about 3 year goal. Where do you see yourself? What would you like to have in three years?

Sure. So in three years I'd like to have properties, short term rentals in Texas, Oklahoma, Arkansas, Arkansas, Tennessee, Georgia, Florida, and working my way out internationally.

Okay, why, why so wide and not deep in one area? I'm not saying it's wrong. I'm just curious what Your logic was, instead of just like, I want 20 in Texas.

Sure.

So I would like to have a portfolio to say, okay, you want to go to the mountains, great. You could go to Oklahoma. I've got a place. I've got a few places to choose in Oklahoma. Or you could go to the Ozarks. Or if you want to go to the beach, great. You could go to Galveston. Or you could go to Florida. Just to have a wide portfolio of places that I could offer. Right. And different experiences, whether it was RVs glamping or cabins in the woods or, you know, direct access to the beach.

Yeah.

Okay, that's cool. I mean, the.

The.

The danger. And again, I'm not saying it's right or wrong, but. And I'm sure you've thought through this, but the danger is you have too many wide locations. Like, it's hard to become a subject matter of that location. So then the question becomes, and we don't have to dig in that today, necessarily. I'm just making people aware. It's like, how. How do you become an expert on multiple locations? You know, it's like, you know, I'm. I'm assuming you know that area of Galveston, Texas, pretty well. You know what rents well, you know, why people like that area and what they want there. But just knowing how to manage that, like, that knowledge at different areas is just. Is just super important. But again, I'm not. I'm not worried about that for you. I think you'll figure that part out. But, yeah. So, okay, so what do you have a. Are you looking at airbnb for all. Like that, where all the guests are coming from? Or is that. Do you have your own kind of brand that you're building?

So I am building a brand. I do use Air Sunrise to Sunset Properties. So we are trying to build a brand. We do use Airbnb. That's probably where I get 90% of my bookings. VRBO is 10% or maybe 8%, and we probably get 2% based off of reoccurring guests. So we're trying to build up more reoccurring guests now that we have a property in the Hill Country. You know, we'll start marketing that. We'll start doing a campaign to guess that we're going to Galveston. Then we could start marketing to them and just kind of start building that. Right. So I know it sounds like it's a wide avenue. To your point earlier, my thought is, is if I had a few, like, I go to Galveston, I did a few there. Great. I understand that market. I go to Hill Country. I do a few there. I understand that. And kind of work my way systematically from state to state to state.

Right.

I grew up in Georgia. I understand that market. I can go there. I. Florida, I'm familiar with. I can go there. You know, that's kind of my train of thought.

Yeah. And again, I don't. I don't think it's bad, but when I think of the work that goes into an Airbnb, like a vacation rental, I just got my first out here in Hawaii, but I've had one before, like the systems that's required, like, there's a certain economies of scale you get, the more that you have. So, like, if you can have, like, I could have two on each of the main Hawaiian islands, right? Like Oahu, Maui, Kauai, and the Big island, and I could have eight total. But I would much rather personally have eight in Maui because I can share the same contract. I don't need four contractors. Any one contractor. When things break, I don't need four. You know, everything. It's just. I have four cleaning crews. I have one cleaning crew. So, again, I'm not. Not saying you shouldn't do it. Just, that's. That's the benefit of going deeper in one area. The. The risk, of course, is that that area, something changes, people get a hurricane, or the people stop traveling there for whatever reason, or the economy changes, or oil and gas disappears. So there's pros and cons of going deep in one area. What I like about what you're thinking is this idea of, like, building a brand that people come to versus just Airbnb. That's just a real. It's a really tall order, but I'm thinking the exact same thing. I got my whole month in brand, like, month in Maui. And so this idea of.

I want to be outside the airbnb ecosystem, if possible. Airbnb, because it's like having an Amazon business. It can make you great money, but then someday, Amazon might just be like, yeah, we're kicking you out, right? And then all of a sudden, your business does nothing. So I like the idea of building your own brand. It's just incredibly difficult. So I. I want to go back. I want to go back to the investor stuff. We talked about the. You know, the. The business plan again. I don't think it's bad or good. It's just what you decide to do and that you've decided to do it. So, yeah, crush it. Rock it. I love that. So how do you get investors for it. The first thing I thought you said a lot of the, the meetups that you've been to are kind of pitching or their sales something or whatever. Have you considered starting your own, like being the guy that just hosts their own?

I have unsuccessfully. I've tried to do it with a few other people, right. Who friends of mine that are also in the business in some shape or form, either a real estate agent or mortgage broker. And it's just kind of fallen flat on his face.

Is that because you didn't continue it long enough or that because you think you don't have a skill set to be able to do it correctly?

Probably a little bit of both. Right. Something I am rethinking, right. And to revisit and just kind of execute on and then see where it goes.

The, the cool thing about meetups and there's a lot of happening around the country, but the cool thing is like you can see what other meetups are doing that are successful. And it's very much a systematized business really to be the host of a meetup. And so like for example, my buddy Tarl Yarber, he's one of my good friends and we have a, that month in as well. We have the, the Maui Masterclass that we do together. But, but he runs these events on Seattle, these huge events called the Fixated on Real estate and. Or the Fixated Fixated something and like he just basically took what worked at everyone else's meetups that he knew and just put it into his. And it's a very formulaic thing like, oh, we always start with this. We stand up, we do this. I ask for, you know, this thing. Here's how we market, here's how we get people. And it's all very simple stuff, but it's really like having a checklist. So that's one thing I would encourage you if you decide to revisit that, that, like reach out to guys that run meetups in other areas. I mean they're not hard to find. Just go to biggerpockets.com events and you'll see people putting on events and just reach out to them on bigger pockets. Be like, hey, can I jump on the phone with you for 20 minutes? Or you know, even if they don't want to do that, hey, can I buy you a hundred dollar gift card to your favorite coffee shop if you'll do a 30 minute phone call with me or whatever, right? You'll get on the phone and just like, how do you run your meetup? Like, help me run a good meetup. In fact, bigger pockets. We've even talked about having some sort of, like.

I don't even know, like, official standard. Like, this is how you run a good meetup, and this is what an official bigger pockets meetup looks like. And we may go that route someday. But anyway, the reason I bring that up again is when you are the one in charge of the meetup and, like, people are people in this world and this is just advice for everybody. Are so desperate for a leader. Like, people want leaders. They want people who, like, know what they're doing. Back when the pandemic was like, coming down on everyone and everyone's freaked out, I made this video of, like, what to do when tenants don't pay rent because of COVID And like, that video has like 3 or 400,000 views now. And I didn't know what to do. I just sat down and go, well, like, what, what, what am I gonna do? Let's let me be the leader of this thing. And I'm like, all right, this is my, like, four point plan. I'm gonna do this, I'm gonna do this, I'm gonna do this. And if they do this, I'm gonna do this. And I just was like, this is what I'm doing. And everyone's like, hey, Brandon knows what he's doing. Follow him the same way with a meetup. If you're doing a meetup and you're confident and you've got a system, like, this is what we do, and I'm gonna do it every month, and I'm gonna suck in the beginning, and the next month it's gonna get a little better, and next month it's gonna get a little better. You will build up a sizable thing. You don't need to have a great fiery up personality, like, you know, or talkative like I am. In fact, I think that's probably more annoying to people than it is endearing. Like, you can just like, be the knowledgeable guy and like, just like I said earlier, like, you can bring people into your life that want to work for you for free because they want to be a part of what you're doing. They want to see what you're doing and then put them in charge of different aspects of the meetup and you become like the leader that people trust and they see what you're doing and then they want to invest with you potentially. So I would definitely look into that. And then a second piece of this, this something I've been thinking a lot on lately is people want to invest in frameworks, people want to invest in brands, people want to invest in certainty. And here's what I mean by that. Let me unpack that. When, if, if I were to go to somebody, be like, hey, so I'm raising money for some trailer parks. There's a bunch of them. I'm trying to buy some. You put in some money, I'm gonna give you some money back at the end of the day. It's gonna be great. You'll love it. Let me send you over wire information. People would be like, I don't think so. Like, it's like, it's just, it's not something they can grasp. It's too vague, it's too big, it's too complicated. The confused mind doesn't buy. Or in this case, the confused mind doesn't invest. So I would also encourage you more and more to try to make it look like, like you have that. You do this every month. You're raising, you're doing five deals a month right now, let's just say, what would that look like? What would your business look like to do five deals a month? You'd probably have a name for what you do. It's not just, we do a syndication, it's called the Sunrise Investment Fund or whatever. Right. There's some like the name for it. This is our PDF that explains exactly. It's a one page that explains exactly what it is that we do. We got this really cool logo that was designed on Canva. It just, it looks like a legit company. And whether or not that's right or wrong, it's probably not right. But humans naturally respond better. The better something looks and feels, the more professional it looks and feels, the more people are going to want to invest with you. And again, I'm not saying you're not doing that, but just kind of thinking through everything is how can you give people a framework? A tangible example of that. And I know I'm just rambling here, but a tangible example in Open Door Capital, when we were going to raise money, we didn't just raise money. We raised money in what's called a cash growth fund. A cash growth fund is a real estate investment that provides cash flow from year one and the ability for forced appreciation that's not dependent on the market. It, it's a cash growth fund. We put a little tm, little trademark next to it. We're a cash growth fund. We also follow a Rolls criteria. R O L, L S. It means that we buy, you know, like there's room for infill, there's opportunity for this. There's like, I've got like an acronym for rolls. All that is is just frameworks that people can then put their head around and say, oh, they're professional, they know what they're doing. I'm going to invest with them. So I would invest some time. It's not a lot of money or anything, but like invest some time and some effort and thought this look like we're doing five of these a month and that this is just standard business. We do a lot of this. I don't know, is that, is that helping it all in there?

Yeah, no, that makes sense. That makes sense.

Okay, what else, what else you got? What else can I help you with? I know we got again, we got to close this up pretty soon. They definitely don't give me enough time to talk with everyone. I could talk for hours. But like any specific things that I can help you directly with, that's really it.

I mean that was very helpful. I really appreciate it.

Okay, cool, man. Well, yeah, I think, I think you're onto something. I think that the short term investment thing is a fast, fascinating idea. The more you can put that into a system, a website, easy to understand, easy to explain. Like a 5 year old could understand it. And this is what we do. It's called, you know, the group, the short term rental group investing program or whatever that's too long. But the, maybe there's a short name there. And this is what we do and this is my experience, this is how we can do it. And I wouldn't get overwhelmed either with like as much as I say treat it like you're going to invest in five a month right now it's more, it's way more important to you. And this, I'm talking to everybody here who's fairly new to real estate. It is so much more important right now to build your reputation and to build your momentum than it is any money whatsoever. Even to the degree that like if I were in your shoes, I would, I wouldn't care If I got 0% of my deals. Like, I'm not saying do this, but what if you partner with people and you raise money, but Instead of a 50, 50 split or a 70, 30 split, you were a 991 split. Like does it really matter in the grand scheme of things if that gets the ball rolling and that gets people into their investment and you start getting a reputation, it just doesn't matter. Like the initial money is fairly irrelevant compared to the experience that you're gaining. So don't be afraid to be overly generous with your investors in the beginning, because that's what you need right now more than anything.

Right?

Perfect.

Thanks.

Awesome, man. Thank you very much. Appreciate you. And again, if you guys have feedback or insider, you want to say that Brandon said something stupid and you want to correct me, that's okay. Go to biggerpockets.com show 505 and you can leave all your thoughts right there. So awesome. Thanks, Joe.

Thank you.

All right, Luke, welcome to the Call. Thanks for joining us today.

Yeah, thanks for having me. Super excited. Thanks.

Well, tell us about yourself. What do you do? How long you been doing this for, and where do you do it at?

So, my wife and I, we started investing back in 2017. We're in Dubuque, Iowa, so eastern Iowa, basically. We started with a duplex and a fourplex, did some seller financing, creative financing with the bank, had a really rough year. But then after that, we basically made the decision, like, go all in or get out. So we started scaling up. So fast forward to where we are now, five and a half years later. Total, we have about 42, 43 doors. We've done about 10 flips, 10 burrs, couple wholesales in there. Really changed our strategy and just did a lot of what the podcast always talks about.

That's cool. I mean, that's pretty substantial. 42 doors. How much of that is multifamily versus single family?

We only have two or two single family. The rest is all multi, from duplexes on up to seven plex. We have a couple six and seven plexes. And then the rest, like, four and two.

Okay, cool. And so you got. You got. You're in that, like, you're in, like, this.

I don't know.

I need to call. I need a name for this, and I'll come up with a framework name someday. But, like, you're in this, and maybe, I don't know, this is where your problem's gonna come in or not. But you're what I was gonna. You're in this, like, desert where you're not big enough yet to be able to bring on all the teams and all the people. You need to be able to outsource all your work. But you're bigger than just, like, a couple small deals. Like, you're in that kind of weird. We're gonna call it the adolescent phase of a real estate portfolio. Right. You're in the awkward. That's the name of it. The awkward adolescent phase. And it's awesome. But I remember having like 35, four units and I'm like, this is a lot of work, but I don't make enough money to be able to hire a team or a full time employee to manage it or else I'll make no money off this thing. Does that feel pretty accurate?

Yeah, that's basically where I'm at. Where I'm stuck right now is I do have a full time employee that does maintenance with me. But yeah, I'm swinging the hammer a ton, which I don't mind doing that, but it's not really going to get me to where I want to be at the end of the day. I know that we've experienced, I forget what you call it exactly, but different levels of financial freedom. We've hit those certain levels that we were able to take three months off this past winter and go to Florida and enjoy like there's no snow. And that was really fun. But at the same time I didn't grow as much as I wanted to at that same point. So yeah, my problem really lies in like how do I scale up without either overleveraging myself time wise or money wise as well. You know, I'm kind of in, like you said, in that awkward spot. I look at it as like plateaus. I felt like I hit a plateau around 15 to 20 doors and then I scaled up to like 35, 40. I had enough cash flow to survive plus hire somebody. And now in order to go to the next step, I almost have to feel like I have to take the plunge, but I need to get over to 75, 80 door mark, you know?

Yeah, it's almost like an identity shift that happens. And it happens in business too. Like not just real estate, but just like you own a business and you get to this plateau. Yeah. And then you have to. It's not just like you got to get smarter or think these different thoughts or read the right book. It's like you got to change the very nature of who you are as a person. Like how you view yourself. And if you're able to do that, you can then accelerate to that next level. And if not, you might be stuck there for a long time. Because our actions and our, our results that we get are direct. Direct our actions, Sorry, let me say it this way. Like our outcome is a direct result of our identity. Right. So like the kind of person you are gives you the kind of body you have, the kind of relationship you have, the kind of wealth that you have. And so if you want to exceed that you got to change your a of identity there. And I think you're feeling that, aren't you?

Yeah. And I've kind of created a perfect storm. I was like. So I took a ton of the advice off the podcast. I've run our local RIA group which gave me great deal flow and so I like I don't I have more deals that I can really handle at this point and so I kind of have the opposite problem. What a lot of people say they can't find deals in this market but we got really good at doing brrrrs and like I've done mine on the refinance on the front end of the purchase. So I'm almost getting paid to buy these properties at closing with rehab funds and everything. And so I'm trying to decide do I continue the path I'm on and just keep scaling maybe another five to 15 doors or do I stop that and change strategy a little bit, go bigger? Something like that.

Yeah. How does that feel in your gut when I say if I were to say stop buying anything under 50 units right now, how does that feel to you?

A little bit of shock and awe I guess.

But does it excite you, fire you up a little bit or is it oh that just sounds miserable. Yeah.

I started back when Covid hit. I've my goal that year was to buy a 20 unit or above. That was kind of like all right, this is what I'm going to do this year. Then Covid hit and probably did a little bit of just personality. I fell back in my shell and like I know I'm really good at buying single families or duplexes. I can burn. I can get some money coming in. So I went back that route. But yeah, I'm not opposed to it.

Yeah and I'm not saying you have to either but I feel like there's you're at this point where you could continue doing things the way you ride. There's nothing wrong with that. You can continue this linear growth. Right. I talk a lot about especially in the new new multifamily millionaire book I talk about linear growth versus exponential growth. And if you're just adding on a single family duplex, a burr, a five unit wholesale and some deals you're you're very linear growth there. There's nothing wrong with that. But the problem with that is like one you don't really become a different person by doing it. You just work more hours and it and eventually hire employees and now you're just a self employed with some Employees underneath you, kind of a, kind of a thing. But when you exponentially grow and you say, you know what? No, I'm changing everything that I do. I'm going to either a create a business that invests in small deals. Now that's an exponential way to grow. It's like I'm going to create a team that goes out there and raises money and gets mass lead generation. And we go, and maybe it's a fun, maybe it's syndication, it's kind of irrelevant. I'm not talking specifics here, but you're, you're doing these things that generate like business at scale and you're just managing at a top level. You are the leader, you're the general of that war. Or, or you can do it on a smaller, a small, ironically I say smaller but more deeper level, which is like a large multifamily, like I'm going to go out and buy shopping malls or I'm going to go buy retail strip centers. In fact, I love that concept of like being in the Midwest and buying like the, you know, the 7, 10, 15 unit retail centers, triple net lease stuff. I think that's a fascinating model, but again, it all works. It doesn't really matter the specific niche you get into. But, but I can just tell you from my last couple years, I was very much, I was in the awkward adolescent stage. And when I grew up, I guess to that next level. And I don't want to sound like it's better or worse, it's not a moral thing, but when I got to that next level like everything got easier and less stressful. Like all I do now is make those high impact decisions like I don't do the minor level. And it just became so much more fun because I've got people who are really good at what they do. But you know what that took is that, that, that leap that I think you kind of are alluding to of like where I think at a hundred units I'm there and at 40 I'm not there. And so how do I bridge that gap? And what it was, was just for me it's like that faith, it's just like having faith that this is going to work out, I'm going to build the machine that's going to take me to that level even though I can't necessarily either can't afford it or don't want to afford it right now. Right. So hiring that, like you have a, you have the maintenance person, but do you have a person that's just helping you Just like an investment advisor, whatever you want to call that role, like a COO kind of a role. Do you have a person in your life that's like that right now, or is that you?

For the most part, it's me. I have some mastermind, you know, groups that I'm part of that they live all over the States. But, you know, nobody necessarily knows my business enough to really say, like, this is exactly where you're at. You know, that's high level. When I talk to them, yeah.

Do you run any kind of like EOs, like the entrepreneur Operating System from Traction, anything like that in your business right now?

No, we just have like management softwares for the actual tenants and stuff like that.

So that's one thing I would, I would really encourage you to look into heavily is like the idea of like, if you have you write Traction by Gino Wickman. So like that whole system just revolutionized like my, my business in getting to that next level because it made it one. It gave some very clear goals. Like, this is where we're headed. We're going to have $50 million of real estate in three years. That's what we're. Yeah, that's what we're to. Going, going. And then from that you can work backwards. Do you have any, like, laid out very specific goals on number of units that you want to have in what time frame?

When we started, we, my wife and I decided we wanted 100 doors within about that five year mark, five and a half years. So we kind of backed into like, I want to buy 14 units a year. But then really we got to that based on we wanted 10,000amonth free cash flow. Well, we basically have gotten almost there with the units we have currently. So we hit my goal sooner with lower unit count. And so that's why I was scratching my head like, like I hit my phase one goal. Now I'm kind of floundering again, like, what's the next step?

Yeah, and I said, I said this to the last two guests as well. And I'll say it to you as well there. You are such a rock star to so many people in your area that if you can find somebody, like, there is no greater joy in business than watching people that you helped train up to do what you're doing. And I don't mean that like in a volunteer aspect. I mean like as an, I mean that's great too. But as an, like, like as a team, like, you get to impart everything you've learned into them. Doing the work to Build that. And it doesn't cost a lot of money. When you're a rock star, you can find people to play, you know, play a show with you because you're the rock star. And so that's. If you could build a small team, two, three people, if you pay them, great. I mean, I don't think that, I don't think that'd be a bad use of. At your level, investing in people is more valuable than investing in real estate. That's kind of a weird way to think about it, right? But a person is way more like, like a real estate. You buy a piece of real estate, you're going to get a 10 return on it. So you spend 100 grand, you're going to make $10,000 a year. If you spent so $100,000, you make 10 grand a year is in cash flow. That's probably pretty typical, give or take a little bit, right? Maybe you're really good. You get 20, 20,000 a year. Let's go with that. You're getting a 20% cash on cash return on your property. You spend 100 grand. What would a hundred thousand dollar salary do you like, could that not make you so much more than 20 grand a year? Yet entrepreneurs, especially real estate investors, are so reluctant to make that call. We'll spend a hundred grand on a piece of real estate, but a hundred grand on an employee is a scary kind of proposition. Even though there's almost no chance in my mind that that would not pay back significantly more at that level for the right person. You can't just hire anybody, of course. So I mean if you can find that person, they can come in and help you lead to that next level. And then you, your identity shifts to that next level. You are now the leader. You are now the, you're now managing this team and they're going to do their own thing. I mean really, it's, it's shockingly simple. Like, let me explain what I mean by this for those who listening to me that doesn't understand what I mean by this. Like real estate is fairly simple. You need like to build that scalable machine that I'm talking about, just build this engine. What's the engine have? You have somebody who's in charge of deal flow, like an acquisitions person. So we're going to deal flow. You have somebody who's in charge of the money. We'll call that like investor relationship systems. You have, so you have the money deal flow, you have the management. How are you currently managing right now? You got in House.

Yeah, we're all self managed.

Okay. Which is another reason why scaling is so helpful. Because you know, managing 40 tenants sucks. Managing 200 is easy. It's, it's shockingly that that's the case. I don't know why. It just the economies of scale allow you to hire the right people to be able to manage 200 units. So you got somebody who's like an asset manager, we'll call them. So you have asset management, you have the investor relations, you have the deal flow. And then maybe you have what I call the kind of the COO role or somebody who's in charge of the actual like day to day. And then you have maybe like an admin assistant. Those five roles, I'll read them again. You have a, you have a acquisitions person, you have a money person, you have a management person, you have a leader or a COO role or a integrator we call it in the EOS system. And you have an admin assistant. If that, if you had those five people and they don't even have to be five separate people. I mean right now you're doing probably all five of those or at least a good chunk of those yourself. Those five roles covered. It creates this little engine and your job is simply the mechanic that's squinting and squirting an oil in the right spots to make sure it's well greased and that's running correctly. And every once in a while you have to find a new piece and replace it in because something goes wrong or one of the pieces breaks. But that machine is what's going to take you to like that next level. And then when I say the identity shift, that's what I mean is you are no longer a piece in an engine. You are now the architect, you are now the mechanic and you're putting this thing together. And when you can start adopting that, that thought, man, it just, it just changes your life because now you get to really scale by leveraging other people versus leveraging your own time. And that's when you're going to find more wealth, you're going to find more freedom, you're going to find more, more excitement, more joy, more wins. I mean I just closed on a 530 unit property this morning and like I like I did so little in that, yet I have the same joy as if I did the whole deal myself. Like it's almost unfair, right? I don't know. Did that help at all?

Yeah, definitely. I think one of the questions I had like in our local market from A property manager side, there's only really like two that are even accepting new clients. And so the problem, I run into them, I've been interviewing them because I've seen this coming for a while. You know, they, they're willing to take on my portfolio from the lease ups and all that. But the maintenance side, they don't have anybody that they actually have on staff. So they're going to farm it out to the same people that I already farm stuff out to if I don't do it. And so I'm kind of stuck. And maybe it's the money side again, I'm concerned about the cost that you know like, well I know these people, why should I pay them to mark it up again, you know, so. But then if I was going to do like a hybrid approach where they manage the lease ups and tenants and then I did just the maintenance stuff or had my guy do it. Do you have any opinions, I guess on the hybrid approach versus straight on?

Yeah, I mean I think you could go either way. But I'll reframe a couple of things. Is the way to look at this instead of asking what it costs, what it costs for property management, ask what's it costing me to not have property management. Right. So when you frame it that way, it's very different. Like let's say you're pay them, I don't even know, whatever. If you got, got 42 units at what, $500 in average rent you're bringing in? What's that? I don't even know, $20,000 a month.

Yeah, we're close to my way up.

25 grand a month and that they're going to charge 10% most likely. So you're going to. Yeah, 2500 bucks a month for property management. That's crazy. Like you can get by way cheaper doing it yourself. Who needs to do that? But if you weren't doing that, could you generate more than 25,000, you know, $30,000 a year in additional net worth growth to your portfolio if you weren't touching any tenant whatsoever?

That's the part that I dislike the most out of all real estate stuff is that feels heavy to me to put in your terms.

Yeah. So if you weren't doing that. So again, not, not what does property management cost but what is it costing me not to have it? And when you look at it in that way, it's like, oh shoot. Same with like bringing in partners, right? Like it's like, well I could bring in a partner but it's going to cost me 50%. The question's not is it going to cost me 50%? I'm not saying you have to do a partner. I'm just, it's an example for people listening, but, but not is it costing me 50% or it costs 50%. It's costing me way more by not having that partner most likely or by not bringing in that person or by not giving out my equity to different people. And so again, just a little way to look at it is, is not don't worry about cost, worry about opportunity cost. It's way more valuable. The other side of that though, if you'd rather. And what I did, I just built my own property management in house for all my local stuff in Washington and my mother in law runs it. I just made them, I made the same machine and it's, I literally like the book Heather and I wrote the book on managing rental properties. Like, like that's just our, that's just our systems and we're like here mother in law just run this. And so she just runs that. And I don't, I mean I spend like a minute every month dealing with my whole like you know, 30 some units, whatever I have left in Grays harbor because it's just a machine. So you could go that route as well. But again that's where it gets easier once you have the 50, 60, 80 units. And so I would look at it and encourage you. How do you get to 100 units by the end of the year? And what are we at right now? We're recording this in end of August. So if you like, what would it take for you to buy 60 units by the end of the year? My guess is it'd be one big shot, like one big apartment complex. And there's a lot of people who like that, that range, that 60 unit, you know, give it, you know, anywhere between 40 and 80. It's really hard to run those unless you're local because like you said, there's no property management companies that want to take them. They're hard to deal with, but you could deal with it. So. And if you had that, could you bring on a full time manager? At that point you're paying three grand a month to and they're managing your whole portfolio the way that you want it done. It's one of those, yeah, go bigger to go smaller or to get more freedom. Like freedom's found in the scale, not in the.

We found this, you know, freedom in the scale. Like I said earlier with going from six units to like we need to scale up, up. But now we did. Sounds like we need to do it again.

Yeah, I. I don't think. And again, maybe you could just sell off into the sunset right now, let these properties pay off and just go and relax more. But I know for me, that awkward adolescent phase is just tough to get through. It's like, you got to get past that. You got to get through the awkward teenage years of investing and. Because it's fun being a kid, right? Like, when you're a kid, you got no worries. It's fun. And so you got, you know, five units and you can manage them yourself, and it's easy. And you're just like, flying by the seat of your pants. That's great.

Straight.

Yeah. In that 40 range, you are just awkward. And you got, like, braces on your teeth and your left leg's longer than your right leg and you can't dance. So, yeah, you got to get to that, like, 20 year old face where you're like, actually, like, awesome and I don't know, riding a motorcycle around Europe.

Cool.

So I think you. Yeah, I think you can get there. And the last thing, it sounds like you're already part of some mastermind stuff, and that's the last piece is the more you get around those people who are at that level, the more you're hanging out with guys that are like, like, doing what I'm doing, the more you're just gonna be like, naturally thinking like that. That's the best, fastest way to shift your identity, in my opinion, is to just get around a bunch of people who already have that identity. So joining those groups or being a part of those organizations of people doing that already is. It will just be a game changer for you. The more you can do that.

Okay. Yeah, that's great.

Cool, man. Any other final questions to throw at me while you got me?

No. I hope to see you at bpcon. We're heading up by. We have five people locally going, so I'm excited.

Sweet, man.

Yeah. That's awesome. Yeah, I'm super pumped for bpcon. It should be great. It sucks that, like, the COVID stuff's coming all back right now, but we'll have a good time no matter what. Even if we're wearing a mask. It'll be fine. So cool, man. All right, thanks. Have a great one. And of course, everybody, you can go check out Luke on the show notes page, biggerpockets.com show505. You can learn more about Luke there. You can answer or ask questions of him you can offer some advice. You can tell me I was stupid and something I said and just get involved in the conversations there. So again, Luke, thank you.

I appreciate it.

All right, everyone, hope you guys enjoyed today's episode where we kind of walk through my advice for three real estate investors kind of at different levels of their investing. If you again want to jump in the conversation biggerpockets.com show505 in the meantime, make sure you follow Bigger Pockets everywhere on social at biggerpockets, Instagram, Twitter, Facebook, Snapchat, TikTok, whatever your thing is, we're probably there. And yeah, you can follow me personally over at Beardy. Brandon. That's Beard with a. Yeah, so I guess that's all I got. I don't have David today to get us out of here, so I got to give myself a nickname for Bigger Pockets. My name is Brandon Awkward Teenager Turner signing off.

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