Want to go full-time into real estate investing? In only a few short years, you’ll be able to make millions of dollars, own a mansion on the beach, and ride your gold-plated jet ski into the sunset without ever having to work again…Of course, none of that is true. But, it’s precisely what the online “gurus” have been peddling for years, seductively luring in burnt-out workers by promising unimaginable income without much upfront work. If you REALLY want to build wealth and amass a portfolio of passive-income-producing properties, this is the show for you.
We’re back with another Seeing Greene, where David goes hard on the havoc real estate gurus have unleashed. He’s here to tell you the truth about getting rich with real estate and why quitting your job to follow your dreams isn’t always the best choice. But, if you follow David’s advice, you can grow a skillset and investment portfolio that’ll lead you to the promised land of plentiful passive income. In this show, we’ll touch on topics like how to supplement your income to buy more properties, turning your side hustle into a full-time gig, when to quit corporate to pursue your real estate dreams, and how agents can instantly get better at their jobs.
Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can hop on a live Q&A and get your question answered on the spot!
This is the BiggerPockets Podcast show 768.
It is easy to complain about your job, easy to complain about your boss, easy to complain about the lack of opportunity, easy to complain about the ceiling that you have that stops you from doing something, easy to complain about the commute, all the things we don’t like. Rather than complain, first off, can you look at all the benefits? “Yeah, I have a ceiling, but I also have a floor. That paycheck seems to come in every single two weeks, even if I don’t show up and do a great job.” Can you also look at the fact that the boss may be taking all the risk and you’re not taking any of it? And then lastly, can we look at earning our way into having more influence, more opportunity. Doing well with what we have now, before we ask for more?
What’s going on, everyone? It’s David Greene. And if you’re watching on YouTube, you see the green light behind me and you know what that means. We’ve got sales at Kmarts. Just kidding. This is not a blue light special. This is a green light special and I don’t know if we still have Kmart anymore. I haven’t seen one in a long time and I remember hearing talk about them going under. Has Kmart gone under? Do you still have one in your location? Let me know in the YouTube comments here.
In today’s show, we take questions directly from you, our audience, with the real life struggles, the nitty-gritty real talk about the challenges that we are having in the real estate space, and specifically people who want to get a job in the real estate world because they want to be involved in real estate but they don’t have enough passive income to go full time. This is an awesome show. I really enjoyed this and I got some real honest and authentic questions from all of your audience. You guys were great.
We get into three practical things that you can track in your business to make sure you’re successful. We talked about what to expect when going full 1099. You’re going to go full send. What are you getting into and how do you prepare for that? And how to know when you are the problem in business? We’ve all heard of the book He’s Just Not That Into You. What if you’re the reason that he’s not that into you? What if you are actually empowered and can do something about that so that he would be into you? And by he, I mean money coming to you. All that and more in today’s show.
But before we get to that, today’s quick tip is stop buying the hype that this is supposed to be easy. You are being flooded if you live on earth with social media posts from influencers that are telling you how easy they’re doing it, how their method works better than everybody else’s method, and what they’re doing is sending this subliminal subconscious message you’re the problem and you’re not enough. That builds up this shame that stops you from being emotionally engaged and your emotions are going to be your biggest weapon in the journey to keep you from quitting. So don’t do that. It’s not you. It is a tough market. That means you have to have a tougher approach. Stop buying the hype this is supposed to be easy. All right, let’s get to our first question of today’s awesome show.
Hi, how you doing? My name is Nigel Daniels. I’m a prospective real estate investor, but I’m a teacher right now and I just don’t know how to build up the capital to get started. So I would like to ideally work in real estate while I’m teaching to supplement my income and eventually become a serious real estate investor. Do you guys have any tips for me? Thank you.
All right, Nigel, this is a very good question and I’m going to shoot straight with you because not many people will. It is very difficult to become a real estate investor. It is even more difficult to do it when you don’t have capital. And as a teacher, you are not going to be making a ton of capital.
Now, I live in California where I think wages are probably higher than maybe anywhere in the country, especially Bay Area, California is probably the highest area in California. Maybe a couple areas in New York might pay like we do, but I really don’t think so. If you look at teachers, public safety, police, firefighter, paramedics, hospital workers, nurses, doctors, staffing, the wages are really high compared to most people in the country. You’re out there in Virginia, I can’t imagine the wages are very high. You’re probably not going to get enough capital saved that you can invest into real estate. You’re probably making enough to pay your bills, to have a reasonable life. You might be able to own a property. But the progress is going to be very slow. And if what you’re saying is you want to accelerate your progress, you’re going to have to do something different.
I like that you already understand that because you’re mentioning maybe become a real estate agent. You’re thinking correctly. “There is not a way to do this as a teacher. I need to do something more.” Now that might be starting a wholesaling business and finding off market deals or making a lot of phone calls, making a lot of contacts and buying off market properties subject to creative financing. There’s ways to do it. But I want to be honest with you all that are listening to this, they are not passive income. The stories you’ve heard of people that built a real estate portfolio and then retired and lived off the rent, that can happen. It is way harder to happen now than when we first started talking about it. And the reason is competition. There are more people who want the same dream that you want, who want the same life that you want, who have understood that the rat race, the W2 world is very difficult to get out of and real estate ownership is the best method to do it. That’s the good news.
Bad news is everyone else is competing with you over those assets, okay? So part of the answer for getting out of a bad situation is admitting you have a problem in the first place. That’s step one. Nigel, you’re there. You recognize, “What I’m doing is not going to get it done. I need to do something more.” You’ve now taken the next step of said, “What about being a real estate agent? Now that’s a way I could earn more money.” And I agree. That is something in the world of real estate that is not just owning real estate that will function as a midpoint. You can make money doing real estate stuff, but you’re still working, still active income. Then you can take that money, put it into real estate, which should eventually produce the passive income you’re looking for. It’s just not going to be easy.
Now, here’s where the advice gets tough. As you enter into the world of being a real estate, you’re not escaping competition. You’re entering into a world with even more competition than where you are now. If you’re a teacher, I’m operating under the assumption that it works the same way it does out here, which is you get a level of tenure, you get pay bumps every single year. You don’t lose your job unless you do something dumb. You’re not necessarily going to get paid more for being a better teacher. You may be a good person that wants to be a better teacher, but you’re not being driven by capitalistic energies in that sense.It’s going to be very different for you as you enter into a competitive field like being a real estate agent.
Showing up, having a good heart, wanting to do the right thing is probably enough of the job you’re at right now. It will not be enough in that world. It’s going to be cutthroat. You’re going to be fighting for clients with other agents. You’re going to be fighting to get deals closed from clients that are afraid of moving forward. You’re going to have people that will be taking advantage of you. They’re going to want to talk to you on the phone for long periods of time and get all the information they can about your market, your expertise, deals you may have that someone else doesn’t have. The world of real estate investing is not an easy game. We tell people you got to find your agent who knows the market. They’re going to be calling to see if you’re that person and at the same time they want want to get in your car and have you drive them around and look at houses and have no intention of closing.
I want you to understand that though the journey that you are talking about is absolutely worthwhile in taking, it is not easy. This is more of a hero’s journey than a casual stroll. You’re going to face bad guys. You’re going to fight dragons. You’re going to have to dig deep and find things. In yourself, they’re going to have to change. Now, this is why I love it. This is why I’m up here preaching the gospel of real estate to everybody because it forces you to change things about yourself for self-improvement. It forces growth. You cannot succeed in this world if you’re not becoming a better version of you, strengthening your weaknesses and amplifying your strengths. But too many people get sold on a journey and told, “All you’re going to do is buy a couple duplexes, then you’re going to buy some fourplexes. Five years later you’re going to retire, you’re going to have a bunch of money and you’re going to get interviewed on a podcast with a big smiling picture of you and you’re going to tell everyone how you did it.” It’s not that easy.
It used to be much easier. If I could get you to not spend all your money on cars and not take as many vacations, save a little more, put your money into real estate, it would appreciate so fast you could then take equity out of that, buy more real estate, that would appreciate fast. Rents were skyrocketing. This was something that could happen much easier. Now, as a teacher, I think you need to accept if you don’t do anything, you’re almost being forced into poverty.
And here’s what I mean by that. As a teacher, you have pay bumps that are negotiated through your union maybe 2, 3, 4, 5% a year. Inflation is much higher than that. Now, I know the CPI might be lower than that, but overall inflation, the stuff that’s not including CPI, I’m talking about housing prices, car prices, food prices, energy prices, they’re increasing much more than the 3% pay bumps you’re getting. You’re actually, in a sense, taking pay cuts every single year from a practical perspective. This isn’t something that you’re doing extra. This is something you have to do if you want to maintain the same standard of living that you’re in. You have to get involved in this competition.
All right. Now that all the hard stuff is out of the way, that the news that’s difficult to swallow that I think everybody listening needs to take a good long hard look in the mirror and ask themselves if the goal of working for three years and never having to work again and living a luxurious lifestyle is realistic or was even healthy to want in the first place, they hate hard work. If you didn’t want to work hard, I don’t think real estate’s a great thing to get into. Now we’ve gotten past all that. Let’s talk about some practical steps of what you can do to prepare for success.
As a real estate agent, the first thing you need to understand is you’re not owed anything and no one’s going to bring you your food, okay? As a W2 worker, we get soft and spoiled like a house cat. Somebody brings us our tuna. Our owner loves us, they hear us meowing and they’re like, “Oh, I feel bad for you. Let me bring you a paycheck. Let me open the can. Let me give you the check.” All you got to do is take it to the bank and hand it to them and they will give you money. You showed up every day. We will make sure that you get paid. When you get into the 1099 world, the competitive world, the capitalistic environment, there is nobody feeding you tuna. Every real estate agent, loan officer, wholesaler, house flipper, contractor, anyone that has their own business that services those of us that are trying to make money in real estate is nodding their head and saying Amen, because they know what I’m talking about.
It is a mindset shift that can be very difficult to understand, okay? Sometimes there’s people that grow up in privileged situations where they never have to be around a rough neighborhood where bad things happen, okay? I remember this happened to me. I grew up at a school where everyone’s pretty nice to each other. I was really popular. I’d gone there since kindergarten, so I knew all the other kids. I never had fear of going to school ever.
And then my family moved going into junior high into a different area that was full of a different demographic, and I realized I was incredibly shy and introvert and I didn’t know that because I had known these kids my whole life, so there was no reason to be shy. Well, I got thrown into this new environment and it was very rough. This was the first time where people saw weakness, they would exploit it, where people were not going to be nice, where you could get picked on or you could get hurt physically if you couldn’t stand up for yourself. It was a shock as I just realized the world’s not what I thought the world was.
There is a similar thing that happens when people leave the W two world and they step into the 1099 world. So whatever route you’re going to take, you got to get out of the Mr. Roger’s perspective that it’s going to be like school where you show up and you pour into these kids and you hope the best for them and you try to make their day. You can do all of that and people will still chew you up and spit you out. You got to grow a knowledge. You have to have value that the client sees as worth committing to you for. You have to do such a good job, not just to close the deal and get paid, but such a good job that that client will refer their other people that they know to you.
And here’s the way that I tell agents that they have to look at this, or really any salesperson. If you go eat at a taqueria and you enjoy it, you may go back. If it’s not great, you’re probably going to find another one. It’s just like that with your business. If you close the deal but you didn’t blow the people away, they’re going to find another agent next time. If it was pretty good, you did a really good job, they’ll come back to you in seven years when they’re going to do another deal, okay? But what you need is people that will go tell all their friends, “That is the best taqueria I have ever been to. You have to go try it. Don’t even consider going anywhere else until you’ve gone there first.” That’s the level of service you have to give clients if you want repeat referral business.
Too many realtors don’t understand that. They think that people are just going to keep coming back and eating their food, that their job was to make the burrito and hand it to the person, not to make the best burrito they could possibly make, not to give the best service they could possibly make, not to go over and above to bring them salsas or upsell them on… Or [inaudible 00:12:51] that they have that might taste really good. If you have that casual attitude that works in the W2 world, you get chewed up and spit out in the 1099 world, okay? So I want you to do it. If it’s on your heart that you want to be a real estate agent to make more money to go and buy more real estate, amen. Let’s get after it, man. But I need you to be aware it is a difficult journey that you are attempting to go on. And the journey you’ve been on pales in comparison to how hard that’s going to be.
So don’t go into that like a house cat expecting tuna. You need to go into it like a feral cat that has to hunt for everything it’s going to eat. You’re going to have to build your hunting skills. You’re going to have to defend yourself. You’re going to have to go over and above to make these clients really, really happy and you’re going to do this for years and years and years to build up enough goodwill and referrals that you can make the money that you want to invest into real estate. I don’t want this to bum you out.
I know some people may be listening to this and thinking, “Oh, that’s not the dream I got sold.” That’s the problem. You got sold on a dream. You got sold on a guru making a clever marketing video to get you to give your money to them so they could teach you the secret to making money in real estate that’s easy and it does not exist, just like there is no fitness secret that is easy, that works, just like there’s no relationship trick, they can just make it so relationships are easy. They’re never easy. It’s always going to be work. It’s just the key is finding work you enjoy doing. The key is being in a relationship with a person that you enjoy serving. The key is finding a level of fitness and diet that you enjoy doing and you can stick with. And the same with real estate. The key is finding a way to make money that you enjoy doing so you can beat your competition.
Thanks, Nigel for this video. I hope this advice helped. Make sure you stay in touch and let us know what you’re thinking. And if you’re serious about becoming an agent, check out my book that I wrote, my series, the top producer agent series that I wrote with BiggerPockets that starts with Sold, moves on to Skill, and then Scale.
All right, our next question comes from Brian Moss in Greenville, South Carolina. Brian owns three rentals, two short-term rentals, and a primary house that’s being built currently. “Stuck on a job/business balance question with the best next steps. What happens when side hustles become your whole hustle? I’ve worked with the builder for eight years and just took on another client last year. I am making 120,000 plus $52,000 per year. I just lost the 120,000 because he got mad about another client. I’ve helped build over 500 units in the last four years. I do all the upfront stuff, permitting, HOA surveys, splits, et cetera for both. I’m in the middle of a build for my own house and ready to take on all the builders in this area. With these skills and this network, what would you do to start fresh or recontract with the original company?”
All right, Brian, it sounds like if I’m understanding your question here right, this isn’t about side hustle becoming whole hustle. This is about you having a valuable skillset, being able to help builders build homes and losing your job over a misunderstanding or miscommunication or some missed expectation maybe I should say with the owner of that company. Now you’re in the position where you’re trying to figure out should you do something different, should you start your own company, should you recontract with the original company.
First question I would ask is, are there other companies out there that need your skills and where are they? How would you find those people? Networking is not just about, “How do I find the agent that has all the deals or how do I find the loan officer that has the best loan product?” It’s about, “How do I find the people that are doing the same stuff I’m doing, so I may be able to serve them someday?” Are there other builders that you can go get to know that may not be happy with the person who’s holding the position that you used to hold at the old job? Are there builders that want to scale and grow more but they can’t because they’re lacking good people? That’s a big problem I have.
I’m always wanting to grow and do more, but I can only extend as far as the people that I have that I can leave in charge. And if I leave someone in charge of something and it falls apart because it’s not me that’s running it, then I lose money, I lose market share and the ground that I took when I expanded has to shrink back as it comes closer to me. So if you do have as good of a skillset as you’re saying, there will be opportunity for you in the market. Can you find another person out there who’s looking for another you?
Another thing that I would say is have you taken extreme ownership over your role in the disagreement that you had with your boss? I didn’t get any details in there and I’m not trying to call you out and say it’s all your fault because I don’t know any of the details. I don’t know whose fault it is. But I know it very rarely is ever all one person’s fault, okay? Have you ever noticed this? You have that friend that is always dating new people and you ask her like, “Hey, how’s your love life going?”
“Oh my gosh, all men are jerks. This last guy cheated on me,” or “He’s abusive” or “He took advantage of me” or “|He was toxic” that type of thing, okay? And you’re like, “How does it you find every single toxic person in the entire world and it’s like…” Coincidentally, that just always happens, right? We all know that person either has a tendency to bring out the worst in other people or is drawn to the worst people. Maybe it’s a self-esteem issue, a confidence issue. But it doesn’t get better until they take some ownership over the fact that they keep dating people that it keeps going bad, that they’re the common denominator, okay? Same goes with people that are constantly getting a new job and you ask like, “Well, where are you at with work?”
“I have another new job. My last boss was a jerk.” And you say, “Why?” And they describe things that any boss would expect. “Wouldn’t give me the day off when I wanted. Promoted somebody else instead of me. Nothing I ever do is good enough and they’re always unhappy.’ Well, the employees who are doing well over there, they don’t feel that boss is a jerk at all. It’s that person.
So that may be an extreme example, but is there something that you could see where maybe you got a little complacent, maybe you got a little cocky? Maybe you were thinking, “Hey, this person really needs me. I do everything around here,” and you found out quickly that isn’t the case. Maybe some areas for personal growth with you losing that position that would really benefit you to look deep into and just lay it down, say, “Hey, this is some areas of my personality where my ego got the best of me, where my defensiveness got the best of me led to me losing this opportunity and more pain in my life.” Sometimes we don’t grow until this kind of stuff happens. So that’s another thing that I would ask you to look into.
And then when I look deeper into your question here, I think what you’re saying is that you were making 120 grand a year for someone. Then you took on a side hustle that paid you 52 grand a year, but you lost your main job of 120 because they were mad that you were contracting with someone else. Now I can understand that, right? I have business partners that are primarily in business with me because of the opportunity that comes from working with David Greene. So I have a platform. People see who I am. They trust me, they trust my knowledge. They come to me for help. That business partner benefits from all those leads that come this way, from the credibility that comes this way.
Well, imagine if they wanted all that benefit, but then they said, “You know what? I’m going to go start my own thing that David has nothing to do with because I get 100% of the income, but I’m going to keep the credibility that I got from being his partner. I’m going to keep the database of people that came to me because they know about David. I’m going to keep all the perks that come from David, but I want to be in an open relationship so I can also go make money on the side that he has nothing to do with.”
Understandably, you could see that would break down the trust of my relationship with that person. It would probably cause me to say, “Look, if you’re going to be doing stuff behind my back and cutting me out of it, I’m just going to cut you out of the opportunity that you have being my partner right now if I can’t trust you.” That’s exactly what I would do. I think that’s what anyone healthy would do. If your partner was cheating on you in a relationship, you probably wouldn’t stay there and let that keep happening and say, “Yeah, yeah, you can go have fun on the side, but what we have isn’t affected by that.” That’s not really true.
That may be how your boss looked at it. Maybe you could have gone to him first and said, “I have an opportunity to make some money. How would you feel about it?” And they said, “Absolutely not.” You could tried to figure out, “Well, then I need a raise. I need to be able to make more money or I need to do something else.” That’s another perspective.
Now, here’s the last perspective I’m going to give you. This could be an opportunity for you to start your own business, my man. This might be a chance for you to become the builder. So you’ve worked for another builder. You got good at it, you worked for a second builder. What if you just become the builder? Maybe you do spec homes. Maybe you find a person who gives you more responsibility. Maybe you find a startup or you find a couple pieces that you’re missing and start your own business while still making the $52,000 a year on the side that you have from the other company. Without any more detail, that’s probably the only options that I can give you, but I think that there’s a lot there that we can all learn from and I appreciate you sharing this.
Robert Greene has 48 Laws of Power, the first thing he says in that book is never outshine your master. Sometimes we come in and we want everyone to see how great we are. We become a threat to people. Was that an element that happened? Sometimes we need to take extreme ownership, but we need to ask ourselves, “What did I contribute to this problem in this relationship and how can I change?” Sometimes we have to understand that when we’re working in someone else’s company, there’s a level of trust that we can violate if we take all the benefits that come from that person and try to eliminate them from an opportunity where we get to keep 100% of the benefits.
But we still want the opportunity that comes from being in the relationship with that person. That’s something I really think you and a lot of people should think about. “Have we become too greedy and have we broken trust?” And then is this a sign that you could go and start your own business and see if you were meant to be a entrepreneur as opposed to the entrepreneur that you’ve been working for someone else. So thank you very much for submitting this. I love questions like this, guys. If you have something similar and you want some advice, bring it to us. Biggerpockets.com/david. Send me your question there. I’d love to take more of these because this is real life, right? It’s not always about, “What do I do when I have mold in a house?” This is the real life stuff that a lot of us are struggling with that that can help a lot of people. So thank you for that, Brian.
And our next question comes from John Heinzerling from Chicago, Illinois. “I recently listened to your show, episode 741. The job portion spoke to me. I currently work for a large real estate company as a corporate finance analyst. My main frustration with my role has been that I have been learning the systems and workings of my company when I would prefer to be learning about the nuts and bolts of real estate investing. My question is, what role should I be looking at to provide me applicable experience for when I do start my investing journey? Any help would be appreciated.”
All right. John, again, I’m going to take a path most people are not going to take with this. I know some of you might not like it. Just bear with me, okay? Because no kid likes eating broccoli or green beans, but every parent that loves them, they make sure that they eat that broccoli and green beans. Now, they might add some macaroni and cheese in there to incentivize them. They’re not just shoving broccoli on a kid’s throat. Parents know that doesn’t work, right? And sometimes you got to make that broccoli come in on the airplane and it need somewhere to land. You got to do something fun. But guys, this is what we need.
There is the quick answer I could give you. The shallow answer would be to go work for a real estate investor, okay? Go work for an investor who is buying properties that is going to have you do what they do. Now, I’ve had many people come to me with the same desire. I’ve hired many of them. “David, I want to learn how to invest,” and they had some level of skill and I’m like, “All right, I want to help this person.” I hire them to manage my portfolio to help me with acquisitions, and they lay an egg. They screw it badly, man.
It hurt me. It’s cost me hundreds of thousands of dollars trying to help the people that came to me and said exactly what you’re saying, “I want to learn how to be a real estate investor.” What they thought was they were going to learn how to comp properties, how to analyze deals, and how to negotiate credibly, okay? It’s like the person who says, “I want to go to martial arts class” because they think they’re going to learn how to do jump kicks and knocking people out with one punch. All this cool stuff that they want to, “I want to beat somebody up.” And then they get to class and they don’t learn any of that. They end up getting put on the floor and they say, “Okay, you’re going to practice squirming around and learning these fundamentals.” Or Mr. Miyagi was like, “Okay, you’re going to practice pinning a fence and waxing cars. That’s what you’re going to do.”
That’s really the best way to learn, is you have to start off not with the cool stuff. The cool stuff’s the macaroni and cheese that you get to if you eat your broccoli and your green beans first. So it’s caused them damage and me damage, quite frankly, trying to skip people ahead to the part where they learn the parts that they really like. They want the financial freedom. They want to learn how to own real estate, and they want somebody else to teach them.
I had a good heart. I still have a good heart, but I don’t do that anymore. It’s not wise to bring these people in this position and give them that much access and knowledge and power and then watch them just burn me. “This is too hard. I’m not going to do it.” They didn’t want to learn the operations. They didn’t want to learn the management. They didn’t want to solve problems. They didn’t want to get on the phone with the city permitting department or planning department and not take no for an answer. They just wanted to come and say, “Oh, there’s a problem. David, what can you do to fix it?” And they just wanted to watch me fix the problem rather than go in there and fix it. It did not work out well for the person that you’re looking to teach you. This is the first part. I’m just being completely honest about here, okay?
The next part is that the best relationships are two-way relationships. Does anybody want to be in a romantic relationship with a person that you give everything and they take everything? I don’t think so. Does anybody want to have a friendship that you’re always listening to them complaining about their life, giving them money when they need it, being there for them, supporting them, but when you need something, it’s crickets? None of us like that. We actually call those toxic. We all want to be in a give-give relationship, a win-win. “I give to you, you give to me. We both provide value to each other.” Those are healthy relationships.
Now, here’s where it gets tough. When we want to learn about real estate investing, what we end up looking for is a one-way relationship where we are the toxic person. We want to receive the information. We want to receive the experience. We want to receive the insight, the perspectives, the skills. But what do we have to give? “I’ll give you my time,” but your time doesn’t help, okay? This is not meant to discourage you. This is meant to open your eyes to the things that are getting in your way for being more successful. We know what we all want from others is win-win, but then we end up seeking win-lose, thinking that if we’re in the winning position, somehow it’s going to be worth it. It’s not. It will not work out for you if you’re not also bringing value to your employer.
So you’ve been hired as a corporate finance analyst. What that means is that company believes your analyzing skills will benefit the bottom line of that company. And as such, they’re willing to pay you money to provide them. That’s a win-win. You win by getting paid. They win by getting analysis done on their properties, okay? Rather than saying, “How do I get out of this role and just find one where I get to learn the stuff that I really want to do?”, why don’t you just ask a better question? “How do I do so good at analyzing properties that my supervisor says, ‘What more can I give this person. Because they’ve crushed it with the little I gave them, I want to give them more and see if they can crush it with that’.” And work your way into acquisitions for the company, analysis of things you care about more, the “so good they can ignore you” approach from the book that Cal Newport wrote, okay?
What I hear you saying is like, “Man, this relationship’s really tough. How do I leave it and find a person that’s going to be easy?” And you’re probably not going to. You’re just going to get in another tough relationship. So specific roles that you should be looking at to provide you with applicable experience for starting your investing journey, I don’t know that you’re going to find that and also have a paycheck, right? Typically, if you’re going to learn those things, you’re not going to be getting paid from someone to learn. Or you have to do it on your own, which is why most of us start small and snowball. You make your money, you take that money and save it, you invest it into your own property. You start with house hacking. You move up into multi-family. You move up into larger multi-family. You start at a level that you can handle learning this stuff yourself. And once you’ve got a good skill set down, you’re now in a position that you can have a win-win relationship with someone doing it at a bigger level, all right?
This is a overall principle that I think everyone would benefit from. It is easy to complain about your job, easy to complain about your boss, easy to complain about the lack of opportunity, easy to complain about the ceiling that you have that stops you from doing something, easy to complain about the commute, all the things we don’t like. Rather than complain, first off, can you look at all the benefits? “Yeah, I have a ceiling, but I also have a floor. That paycheck seems to come in every single two weeks even if I don’t show up and do a great job.” Can you also look at the fact that the boss may be taking all the risk and you’re not taking any of it? And then lastly, can we look at earning our way into having more influence, more opportunity, doing well with what we have now before we ask for more?
Because you’re listening to this podcast because there is not a college degree that will teach you this stuff. There is not a corporate ladder that you can climb that will teach you how to have financial freedom. Every corporate ladder you climb does not give you freedom. It actually sucks you deeper into that business. You become a more valuable part of someone else’s business who’s been paying you and pouring into you the whole time. If that’s not what you want, you’re not going to find the information at another job. You have to do it yourself. You have to develop the entrepreneurial attitude, the 1099 mindset. The feral cat is going to go find his own food okay? So rather than saying, “How do I quit this job and find a job that’s going to teach me what I really want?” There probably isn’t a job that’s going to teach you that because it’s not a win-win. They’re not getting anything.
Ask yourself, “How do I crush it at this job? How do I save as much money as possible? And where do I start doing this for myself, learning it at a level where if I make mistakes, it doesn’t kill me?” Right? As a white belt in jujitsu, I don’t go climbing the ring with professional MMA fighters. I’m going to learn by going up against the best in the world. That’s ridiculous. I just wouldn’t survive it. Enough shots to the head, I’d be done. I wouldn’t be able to trade at all. I go learn against other white belts in an environment with an instructor who doesn’t let it get out of hand. One guy that I’m training with goes a little bit too crazy. He steps in, he is like, “Hey, guys, we’re not here to kill each other. We’re trying to practice our techniques, okay?” There’s a lot of fail safes in there so that I can develop without getting killed.
Finances work the same way. You don’t have to jump into a position or buying a 400 unit apartment complex, raising money from other people on your first deal. There is a path to get you there. BiggerPockets has provided it. We’ve got tons of information out there for where to start and how to grow. Start your own journey and fund it with the money that you make from someone else’s company.
All right. At this segment of the show, we like to get into comments that I’ve received from all of you in the YouTube video. So these comments come from episode 753. Now, as you’re watching today’s episode, I’d like to get comments from all of you on what you think. I realize this is a little different episode. So we’re taking questions specifically about people who want to know, “How do I make money in the world of real estate? Not just how do I get my next property. How do I invest in real estate? What do you do when a property that you have has this problem?” Those are the typical questions we take. Today shows a little bit different. What do you think about this? Do you like hearing about people that are trying to make money through real estate in unconventional methods or through starting a business? Or is this not really your cup of tea? Let us know when the comments.
So this episode is all about making money in real estate, not just by owning it. And episode 753 was a tax episode, that was all about tax questions on real estate. So these comments come from that episode. And I want to encourage all of you to leave comments on this episode in a similar fashion. Hopefully we get to share them on a future Seeing Greene.
All right. Our first comment comes from Cere or Cere. “Love this advice. I don’t know how you find the energy to do all that you do, but thanks regardless.” Ah, thank you for that, Cere. If I’m saying your name wrong, I apologize, C-E-R-E.
From Trucking Landlord, “Strategic Real Estate Loss. I need to know more.” Oh, this is really funny here. So we could talk more about that, but I believe the strategic real estate loss is taking loss on paper that doesn’t actually cost you money. So when you factor in depreciation, I have this philosophy on real estate that you can make money in 10 ways or that you do make money in 10 ways. We typically only look at one way, which is what I call natural cash flow. That’s the only way that most of us analyze real estate, but it makes you money in 10 ways.
So there’s nine different ways. Depreciation is one of those ways and tax savings. So depending on how your taxes are set up and if bonus appreciation is available, you can buy a property that could save you 50,000, 80,000, $100,000 depending on your income in money that you would’ve paid in taxes. Let’s say that a property breaks even, or god, what if it negatively cash flows $500 a month, right? So you buy it. That means you lose 6 grand a year, but you saved $80,000 that you would’ve paid in taxes. Is that a dumb purchase? Is that a bad buy if you are going to lose six grand a year to save 80,000? And then maybe the next year you lose 4 grand and then the next year you lose 2 grand and then you break even? So it ends up being what is that? Like $12,000 loss in natural cash flow, but a $80,000 gain that you didn’t have to pay in taxes. So that’s a $68,000 net gain to you.
Hard to argue that that would be a bad buy. Sometimes with real estate, you don’t lose money every month. Maybe you only make a hundred dollars a month, so your ROI sucks. It’s like 2%. But you save $60,000 in taxes. Now, it doesn’t look bad anymore. So understanding how depreciation can help you shelter income that you make in real estate and in other areas can lead to the strategic real estate loss, which is actually a win. Thank you for that Trucking Landlord.
Rack Pull Above The Knees. “BiggerPockets needs to get all these scammers out of their comments.” Amen. I can’t stand scammers, man. It’s like there’s this fake WhatsApp account that repeatedly shows up in the YouTube comments. Please don’t fall for any of that if you’re listening to it. And it’s the same crypto spammy comments that you see on Instagram, right? “I never realized how good life could be until I followed Mr…” And then they tag the person’s name. My Instagram is full of those. BiggerPockets has the same problem. We do our best to clean this up, but if anyone has any advice for how to help, please leave that in the comments as well, because I agree with you, Rack Pull Above the Knees, not my favorite thing.
Andy’s Otto said, “David got the blue check. Let’s go.” Yes, I finally did. Thank you for that. I had to wait until Meta made you pay for it. So I’m not paying to have that blue check. But hey, if it stops people from getting scammed out of their money by someone that makes a fake account, I am happy to do it because we at BiggerPockets are here to help you guys make money, save money, and invest money.
All right, that is all I have for our section of YouTube in the comment section. Let us know in this episode what you like, what questions that you wish would’ve asked, or what you think I should have gone deeper in, and maybe we will pull up one of your comments in a future Seeing Greene episode. All right, we have time for one more question and it comes from someone who has had success with real estate by following the BiggerPockets’ formulas and methods, which is awesome. So let’s hear from Jon Schumm.
David, it’s Jon Schumm, Nashville’s Fit Realtor. Thanks for taking my question. Longtime listener, first time caller. So my family, my wife and I, we now own three house hacks, all thanks to BiggerPockets. That got me out of the rat race, or at least out of my fitness job. I’m now in real estate sales as an agent, and my question is, what are one to three ways a good agent can level up the biggest return on investment or maybe the lowest hanging fruit that you see in the industry? Or maybe the one to three ways to measure my productivity? How do I make sure that I’m measuring my output by the right metrics? Appreciate everything you do. And as always, you’re a man, Batman.
Now, let’s say that you’re listening to me talk to Jon here and you’re thinking, ‘Hey, David, sounds like you’re pretty smart there. I like your advice, but I’m not an agent. Does this mean I need to become an agent to do what you’re saying?” No, my friend, as an investor, you can do the same thing.
Here’s the three things that I think investors should be focused on. One, how many pieces of content and knowledge did you put in your noggin today? How many podcasts did you listen to? How many YouTubes did you listen to? What is your social media showing you? Is it showing you information that’s actually going to help you achieve your goal? Or is it showing you cute kittens and people in bathing suits? Change your life so that your social media is feeding you… The algorithm of life is feeding you what you want.
Now, that doesn’t mean go follow every investor because a lot of them are full of crap too. There’s a lot of influencers out there that post stupid things that don’t even need to be said, and you think, “Oh, I’m just following them.” No, they’re not all the same, okay? It’s actually knowledge you’re trying to gain. So I made it a rule when I first became an agent that I had to listen to three podcasts a day made for real estate agents. This was agents being interviewed that described how they built their business, what they did to do it. I had to listen to three every single day. So I would get out of bed. I would immediately start it. I would listen to it as I was showering, as I was brushing my teeth. If I went for a run, I would listen to it.
Then I would go to work, and I usually would… I’d take a break at some point in the middle of the day just to go work out or do something to rest my brain a little bit. I’d listen to another podcast during that time. Then I would have to listen to a third one after work. But this was what I did. I filled my brain with what I wanted. So as an investor, be doing the same thing. There’s plenty of content out there. You need to be listening to how other people think and letting your brain be rewired.
The second thing is how many deals are you analyzing? Are you analyzing enough deals that you can tell why it didn’t work? Not just did it work or did it not work, okay? So you got to put the information in the calculator. We want you doing that. Biggerpockets.com/calc, you get access to these calculators. We’re going to see if it has an ROI or not. But if you do this enough, you should be able to tell why it didn’t work out. There were not enough units. The rent is not high enough for where the price is. “This type of property has too much CapEx.” There has to be a reason why it’s not working out. So analyzing deals is the second thing. Do that until you understand why it does or doesn’t work.
The third thing that I want you to be doing is writing offers. Writing offers at prices that work, not prices that don’t work. Too many people look at a house on Zillow and they go, “Oh, they want $700,000 for that thing. I just can’t pay that. It’s not worth that.” Who cares? It doesn’t matter. Did you go to a car dealership and give them the price that they put on the sticker of the car? No. If there’s a bunch of people that want that car, you’re going to have to pay more than the others. If nobody wants that car, you’re probably going to pay less. Real estate works the same way. So write offers that work for you and target houses that less people are likely to want. Poor listing photos, mismarketed, has more square footage than what the property actually has. Look for areas where that property was not done right by the listing agent, all right? So to sum that up for investors, measure how much you’re listening to, how much you’re analyzing, and how many offers are being written.
All right, and that was our show for today. Little different. Little different. You guys are seeing green from a different set of binoculars than you normally see. This was night vision. It was a little darker, but it’s real because the world’s becoming darker and it’s becoming harder and harder and harder to achieve what we want, which is why we have to be more committed than ever. It does no good to sit around sucking out thumb and complaining that this is a tough market. It does no good for me to sit here and tell you guys, “You can do it. It’s not that tough. It’s just the problem is you.” No, it’s not the problem is you. This is an incredibly difficult market because of competition. Rates are up, inventory is down. More and more people want financial freedom than ever. They’re realizing that they can get it through real estate investing just like you. We’re going to have to work a little bit harder to get there, but that’s okay because much of your competition won’t.
Again, if you guys like this episode, if you like straight-shooting real talk, let me know when the comments on YouTube that you appreciate this. If you don’t, if you’re discouraged, I want to know that too, because there may be a way that we can lift up your spirits, but I’m never going to be able to do that if I don’t know how you’re feeling. So leave me an honest assessment of today’s show on YouTube. And then please go leave us a five star review on Apple Podcasts or Spotify, Stitcher, wherever you listen to your shows. This is David Greene. You can follow me online @davidgreene24. You can follow me on YouTube at the same place or check out davidgreene24.com to see what else I have going on. Appreciate you, guys. We’re all in this fight together. Don’t give up. Keep consuming this content and stay optimistic. I’ll see you on the next show.
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