Hey, before we started the show, I wanted to give you some cool news about a chance that you may have to appear on the bigger pocket's podcast on a bonus. Ask me anything episode. Really? So here's the deal. You know, we think bigger pockets. We think real estate investing is amazing. It's like the best thing since sliced bread.

I don't know who came up with that phrase, but it's awesome. Right. And I've heard from thousands of people who tell me that has changed their lives for the better, just like it's changed mine.

Now, if you agree with that, I've got a really easy way for you to share the good news of the bigger pockets real estate podcast with people in your network. And you might just win a chance to be on this show. So here's how to do it. Go to bigger pockets. Dotcom's I share that's bigger pockets. Dotcom slash HAARP e you're going to need a link there that you can share with people you know, and if ten of those people check out the show, then you are entered in for a chance to appear right here with me and David on a bonus Q&A episode of the Bigger Pockets podcast.

Besides, then, all your friends get to see the power of real estate investing as well. And who knows, maybe someone will do a deal with you someday. All right.

Well, thank you and enjoy the show. This is the Bigger Pocket's podcast show. Four hundred and twenty.

I got this crazy opportunity. I was buying a single family home and the lady happened to have a pocket listing for ten duplexes on one street. And I didn't have the money to get it done. And before I would have let that limit me to like, oh, that would have been amazing deal if I had the money. But then I realized it doesn't matter how much money I have in my pocket. How can I get this deal done?

You're listening to bigger pockets radio simplifying real estate for investors, large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from bigger pockets. Dotcom, your home for real estate, investing online.

What's going on? Let's bring in Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Greene. David, it is almost time for the new year. It's almost twenty, twenty one. What are your what's your what's your plans and big goals in mind? Yeah, this is the time of year when I actually start planning for the next year, because as we talked about with our guests, you make it easier on yourself when you come up with, like, I paved the road way before you start the journey.

So that analogy is kind of that was a good analogy. I guess it was. I couldn't help myself. Good man.

I know people play drinking games, I'm sure, to your analogies. And it's great. It's great.

Oh, that's funny. I wonder if anyone does that you should comment on about Instagram. I would like to see it. If there's a David Greene analogy, it would be dead.

There would be dead. Alcohol poisoning would come at the end of the introduction of the show.

I feel like analogies have become the new rural. Remember when you had that thing going on for a while?

I couldn't say it. I still can't say it. Whatever.

Yeah, we keep up the pace a little faster than you and Josh used to, I think. But they're still inside jokes in there, so. Yeah. Anyway, the goal for my real estate team, we're going to try to double our sales of what we did in twenty twenty. So.

Well, gearing up to try to sell you like double twenty. Twenty twenty. I tripled in twenty twenty. I like it's been going you know, just good whatever. This is why planning is so important, you know, because like if you're doing everything that you can be doing, you should expect to be successful. And I feel like in in your subconscious, if you expect I'm going to go get a deal, I'm going to go write offers.

I'm expecting one of them to be accepted. Therefore, I need a plan for what property management software I'm going to use, where I'm going to get my loan from things like that. I just think it really, really helps getting your own psychology, working with you to accomplish your goals as opposed to constantly fighting these fears of like what could go wrong.

So good man. It reminds me of that phrase like work until your success is in a surprise. I really like that a lot. A wise man once said that.

Yes, I actually don't know who said that, but I say that now. I'm sure I heard it somewhere. But yeah, work until you're a success surprise. Which means, like, you shouldn't be like, wow, I tripled my no, you had a goal. You planned on that. You work toward it. You worked backwards from what it looked like.

And then you achieve your goal and you're like, right, I did it like not that it's not awesome, but it shouldn't be a surprise because the prices of the lottery point.

Yes. You weren't expecting to do it. Now, that doesn't mean you first start that. You should not you're going to be disappointed several times as you're getting going. But that's why you're working. You work until you hit that point where you're like, yeah, I had metrics in place. We hit our metrics. I put things in place to make sure we did and we accomplished our goal. So it is possible, everybody. Absolutely. All right.

With that said, let's get to today's quick tip tip. Hey, David, this important holiday coming up in the next couple of days. You know what it is? What would it be, Brandon?

Well, actually, I think it's today, Thanksgiving. Happy Thanksgiving for everyone listening to this today on the day comes out, which means besides the fact that we're all stuffing our face with turkey and cranberries and all that today, it means that tomorrow is a national American holiday, Black Friday.

And I don't know that it's going to be Sunday, which means big savings are on bigger pockets. The Black Friday sale going on is basically it's our we're doing the biggest book sale the year we do it every year, we do a huge book sale. Thirty to forty percent off books, including paper, book, e-books and audio books. An intention journal that I put together, people love that thing, magazine subscriptions, free shipping and everything. And David Greene will come to your house and give you a back rub if you buy one of his books.

So just go to pick a fight back. Have you've ever had to be honest, just go to bigger Phuket's dotcom, flush a store between November twenty seventh and November 30th, and these discounts will apply automatically again to bigger pockets dotcom slash store. With that said, I think it's time to get in today's show.

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Again, that's fundrise dotcom size, bigger pockets. Hey everyone, are you interested in investing in out-of-state state properties? Safely passive investing in real estate is one of the fastest growing segments in investment real estate. And there are ways to invest safely, securely and passively and out of state properties. Chris Clothier has contributed to bigger pockets for a long time through blog posts and is four times here on the Bigger Pockets real estate podcast. He's also an owner of REIT Nation, formerly Memphis Invest, and has written an excellent forty two page e-book and record, an audio book laying out the specific steps that smart passive investors follow to invest safely and securely.

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Add Origination Dotcom Such Bigger Pockets podcast. That's Orientation Dotcom Slash Bigger Pockets podcast for your free ebook and audio on safely and securely investing in passive real estate today and now. I think we're ready to jump into this episode. David, you ready? Yeah, let's do it. I love today's show. All right.

The Today Show is a guest named David Grabner. David was a you're going to hear a story, but basically he started investing from thousands and thousands and thousands of miles away, about as far away as you could possibly get from where he was investing and had some really massive success he's had over the last several years. And you've got to learn how he's done that, using what we call in the show Sweet Spot apartment complexes. You're going to learn about how he finds these, how he finances them.

He talks a lot about how to manage these properties and why they're difficult, but why that's where the money is to be found in today's market and in the future market. So you're telling all these these mid-sized apartment buildings today and a lot more. So without further ado, let's get into the show with David Grabner.

David, welcome to the bigger podcast podcast, man. Good to have you here.

Thank you so much for having me. It's a real honor. Oh, thanks, man. We've got to be careful today. We got to David. So I'm going to call it David Greene here, baby beard.

And we'll call you normal and we'll be all good. It'll be a good show. So tell us about yourself. I mean, how'd you get in a real state? What you do before that? You kind of had an interesting background.

Yeah. So before I became the DIY underscore landlord on Instagram and had all my multifamily properties, I was just a hospital administrator working in the Democratic Republic of Congo in Africa, just like just like everyone else.

I mean, it's a normal story. Yeah, exactly.

And I had this crazy idea that I wanted to become financially independent and but I didn't have any money and I was only making like fifty four thousand a year. And I had four kids, two kids and two of us to four in the family. Yeah. And I was like, how am I going to do it.

Hospital hospital administrator to in in Africa and the Republic of Congo.

Am I saying that right. Democratic Republic of Congo. Is that kind of like United States of America, but you can coordinate just in America?

Or it'd be weird to say Congo is that goes to Congo. So you can't just say Congo. Oh, OK. There's the Republic of Congo and the Democratic Republic of Congo.

So it's very. All right. You in the Democratic Republic of Congo. Why there? I mean, what did you grow up there? I grew up as a missionary kid, so I grew up in Zambia. I went to high school in Kenya. And then I met my wife was from Argentina in Kenya. We got married. Her parents had a hospital in the Congo, and they asked us to come work their vehicle.

My brother in law is Kenyan from Kenya, so. Oh, so now I've been there, but it is in the works at some point, so I hear you need to go.

Kenya is amazing. That's what I hear. All right. How did you get from there to now? You live in the States now, right? Yes, I do. And the United States of America. And because I say America, that could be South America. I don't know. But you live in you live in America now. So walk us through the journey. You went from hospital. What was your first kind of foray into real estate investing?

So when I was over there, I was like, OK, I need to buy, invest in real estate, but I couldn't use my income because all my income was from over there. So no one can verify.

So I had a lot of disadvantages. But as Brandon always said, you need to look at your advantages. So I think what advantage do I have all the time I found the pocket. OK. Sounds good. And I'll tell you, I'll try with this guy.

David says, and everyone just said that. I said, I'm going to go, but I'll take I'll take credit. It's OK.

So my advantage was I had a dad who lived in the States and had some income that could be used to get loans. And he's also a great partner to work with. And we get along really well. And not everyone has a parent who they can work with. But I happen to have one of those that I do have to work with.

So we partnered up and we bought a quad flex. We put like 50 50 down payment. Twenty five percent down, but the quad flex and then just like, started going from there. Hey, this is working. Let's save up a bunch of more money and buy another duplex. Let's save up a bunch of other money and buy another quad plex. And we did that all the way to twenty four units really in about three years.

Wow.

OK, so I want to I want to unpack this a little bit. First of all, there are people who right now I'm going to call some people artlessness. They're going to go. Well, sure. Must be nice to have a super rich family that can just give you money. Right. So, first of all, I don't know your family estate, but I'm assuming they're not just super rich loaded.

I know so. But more importantly is I would encourage people to act like that are thinking that right now I must be nice to have a family that can just partner with you or something like that is. And this is the unfair advantage thing that we talk about all the time. It's like everybody has something. Everybody has something that they're unfairly advantaged in. And so if you spend your whole life going, who must be nice, must be nice to have this must be nice to have that.

You'll never get anywhere like you just people get sucked into that. Must be nice. There is some real estate guy has a T-shirt he sells that just says must be nice because of that.

They like. Yeah. Like people.

Yeah it's crazy. My dad was a missionary, like working as a missionary his whole life. When I was growing up, modems were making loads hundred dollars a month. Whew. Yeah. That's how we grow up living like he didn't have money set aside. I mean he had a tiny little bit that he had saved up, but it wasn't like he had all this money. We just like we're going in this together. We're putting all our money in one basket and let's go.

Yeah, that's that's awesome. So so walk us to that very first of all. I mean, like, let me even go back from there. You call your your father and you're like, I hear me out. I got this crazy idea. I know I live over here and you're over there, but we're going to make millions. How did you approach it with it.

Like what was your logic there. So yeah. So it's like, OK, yeah. I've been reading these books here. Check out this book. Hey, check out bigger pockets. They have an awesome podcast. I've been listening to the podcast, like check out all these things. And he's like he was interested in real estate too. He's like, yeah, we could do this. And I had developed this little Excel spreadsheet and I was like, listen, if we it for this and this, we're going to make twenty percent cash on cash return.

Yeah. And he said that's what Warren Buffett makes.

And I said, I don't know what Warren Buffett makes, but I know we're making twenty percent cash on cash.

Are you sure. I was like, yeah, if we buy it for this and we do this.

And then he started looking at the numbers like, yeah, we could probably make a twenty percent return on this. That's cool. And just scale from there. All right.

So you started you pitched him. He's like, all right, I'm into it. Which, by the way, I think is a good way. There is the thing and David, I would love your thoughts on this because you're really big into this profile stuff. But there's like ways to pitch people that appeal to certain types of people. Like some people love that. Like like you can make X amount return on investment, but. Yeah, that's right.

And other people you'd be like you could retire five years earlier and that would really, really appeal to that person. Or you could work few hours or weeks. You spend more time with your family that would appeal to other people. So I find interesting is when you're pitching potential partners to think about, like what?

What drives them, what motivates them, what gets them excited. And it's might not be the same thing that gets you excited. So kind of interesting thought there, David. What David Green, what are your thoughts on that?

I think that's a common mistake a lot of people make is they assume everyone else thinks like them. So when when there's people that you bring an opportunity to and you say you can make a lot of money to some, that's actually distasteful. Well, that just sounds like a terrible reason to do anything. You know, if you say, hey, would you like more time with your kids? So you work less overtime because I can make you passive income on the side through what I do.

That's a completely different story. So the risk profile that Brandon, you're talking about is a behavioral assessment that breaks down what people value. So the D, the Either. S and the C are the four components of A personality, your discourse, your dominant score. It's how quickly you make decisions in a in an environment you've never been in or in a situation you've never seen your eyes, your interactive score that measures how much you like interacting with other people and how much you value being liked your ass is your stability score that measures how much change you like or how much you kind of like to live by the seat of your pants and your seat is your.

Compliance, your score, which kind of deals with how much you like structure protocol, those are like your engineers, your architects, your bookkeepers, they like Excel spreadsheets. They're very analytical by nature. And so it's not just the motivation for why someone would do it, but the way you present the information. If you're talking to a certain disk, you definitely want to give it according to what they how they perceive things. So they would like to hear admen.

When I learned about that, to me it felt like the Rosetta Stone of communication. I went from continually being frustrated that people didn't understand what I was saying to it just became so easy to get your point across.

Now it's cool. Yeah, real helpful. All right.

So walk us through. So you you guys started buying properties together. You bought the fourplex. What went right? What went wrong? And also where was it that.

OK, so this is in Chattanooga, Tennessee. I love Noga. It's an amazing city. I kind of just that's another advantage I had. Like, I went to college here and and I didn't know it at the time, but I sold after college was a terrible market and everything collapsed. And I started selling insurance and I went door to door like selling insurance. I would call up and say, hey, I'm coming to see you to explain Medicare to you, like, OK, come on out.

So I was driving all around Chattanooga and I didn't realize it, but that was an advantage later in life because I knew all the areas. I knew the zip codes, I knew the streets. And so I was able to invest back here in Chattanooga. And even though I wasn't in the States, I knew what areas, what they looked like just from my memory. So in Chattanooga, find a quad flex from another investor for one hundred and twenty five thousand.

And we still have it today. It pretty much has just gone right. And that was kind of lucky that the first deal went one hundred percent. Right. And hasn't had any major problems. But it made it easy to go on to the next thing now to go to the next one, though, we were sacrificing like we were living off of like half of my income and saving up the other half of the income to invest. So it's not like I had a lot of money and I could just keep investing.

Though we sacrificed a lot. We lived on like twenty thousand a year at twenty four thousand a year so we could save up. And we did that for a number of years and credit to my wife and amazing wife who was willing to do that in the beginning to set us up for success in the future. Yeah, that's cool.

Yeah. So many people refuse to even entertain the thought of sacrificing because it's like it's like, well, I want to have my cake and eat it too. I really want to enjoy my nice car payment right now. You know, my nice car with the hefty car payment. I want to have that nice house in the nice part of town and some people don't like some people will blame it on their spouse. I don't blame it, but like maybe that's what it is.

But they have a spouse that just doesn't want to sacrifice because they don't have that same mindset. Any suggestions for people that are listening right now going, yeah, my my spouse would never do that?

I think it goes back to kind of what David Greene was saying about how they see things and more importantly, how they see money. Early on, I read a book, Millionaire Mindset by half Ecker or Secret of the Millionaire Mindset.

Something like that, like t half Ecker. And I read it with my wife. And there's a part in there where you talk to your partner about how they view money. And it was really, really important because what might be holding that person back is just their view of money. Some people think money is meant to be spent. If you have it, you need to send it spent. Some people think it just needs to be, you know, you just need to save it up.

And a lot of this is like internal. You don't even realize that's how you think about it until you do a deep dive in your own mind and like, oh, yeah, why do I think about money that way? So having that conversation of how people think about money, especially with your spouse, can be so helpful if you're trying to get to the next level. That's cool.

I'm reading a book right now. I'm in the middle of it. Wendy Papasan, send it to me. Actually, Papa John's wife, one of her favorite books, and it's called Happy Money. And it's not about how to make more money. It's literally about how to spend money. And what are the things that you spend, like what actually makes you satisfied and happy and fulfilled in life? I think the tagline of the book is those who say, what was it?

Something like those who say you can't buy happiness, haven't looked at the research. I think it's what the like the line.

Yeah, it's basically like there are ways there are things that we can do that we can spend our money on and that we should. But I mean, it's the stuff we all know, but it's cool to see it in research. Like buying crap doesn't make you happier buying a nicer car and our house doesn't actually make you happier in life. Buying experiences makes you happy and love helping other people makes you happier in life. And so interesting book. I really enjoyed it a lot.

But yeah, it's called Happy Money, but yeah. All right. So let's let's move forward. So you start to pick up these units, kind of what came next to you. You got to a certain number there, right?

Yeah. So like a duplex, a quad plex, another duplex. And I have bigger pockets. I heard about going directly to listing agents, so I would be over there in the Congo researching and then I would find out a property for sale. I would call them up through my Google Voice number. It looks like I'm calling from the States. Hey, I'm a local investor. I'm interested in this property. OK, I'll send my partner over to come take a look at it.

So we started buying stuff directly from listing agents and then they started bringing other stuff off market because they knew we were buying. And so that helped us get to about twenty four units. And then unfortunately at that time my dad got. Sick and he actually got misdiagnosed and they said he only had six months to live and it was like my whole world was turned upside down and so what are we going to do, just sell all the real estate?

Let's find a cure for him. But fortunately, he was actually misdiagnosed. Now he still has a health condition. And so I decided at that point with twenty four units, I'm going to come back to live close to my parents here in Chattanooga. And what am I going to do? Well, if I get a hospice administrator job, I have to go anywhere. So I decided then I'm going to dive in and be full time real estate investor after we had twenty four units.

Wow, that's cool, man. So let's let me ask you as far as how you got to those twenty four units, what do you think your secret sauce was? What did you do better that other people didn't do?

I don't know if I feel like I had to do anything better than what other people were doing in the market back then. There was a lot of deals to be had. This was like starting like six years ago, six and a half years ago. So it wasn't as hot as it is now. And you didn't have to be so good to pick up good deals like Chattanooga was just an easy market to find good deals in. Now, what I did do better was going straight to listing agents, and even though I was over there, start building a network of people that bring me off market deals.

So it's getting a little bit better deals. But honestly, if anyone goes back to 2014 and buys all the duplexes in Chattanooga, you would get a good deal.

Now, like, you know, there's a really good point to that.

That real estate good is a subjective term. You know, like I think one of the mistakes I see newbie's make is they do a year one analysis and they say, oh, it's only a six percent return. But if they looked at it five years later, it's a 19 percent return and it's grown in value. It's very easy when you get scared about doing something to really zoom in on what could go wrong. And that's what happens. But when you talk to people that own properties for ten years, they're never mad about it.

They're always like, I could have paid way more and I would have still been happy. So do you think that you just kind of figured that out faster than maybe some other investors do?

Well, I'm very decisive and my dad as well, like when we see a property, OK, we'll buy it like it is not a lot of second guessing and hemming and hawing. And that can be bad at some point. But we make decisions pretty quickly. So, yeah, like, OK, we have the money on the property. Let's take action. So we did take action a lot more than other investors were at that point for sure.

That's cool. What what did you like about Chattanooga, by the way? I mean, it's a nice climate, the area's nice, the people are friendly, and more importantly, the real estate is really good for the purchase price versus what it rents for. So especially when we started out, you know, you could buy something way better than the one percent rule. Now, it's kind of gone to the one percent rule, but still for a lot of markets, hey, you're at Chattanooga's.

That's the one percent real. Still hasn't gotten worse than the one percent rule.

That makes sense. All right. So you bought the twenty four units. Father got sick. What came after that? You quit your job then? I mean, you move to the states full time. What happened?

Yeah, OK. So I got an opportunity when I was moving back to the states to go and manage one hundred and twenty units for this organization. Now it's a nonprofit that owned the properties and they were managing themselves and they needed some help. So I didn't get paid a lot to do it. But man, I gained so much experience by going and managing one hundred and twenty units and at the same time I started managing my twenty four units and that's the money I was living off of.

OK, I got a management income from my twenty four units. I've never touched like the profit my properties were generating, just like my management fee. And then I started managing one hundred and twenty units at that same point and I learned a lot by jumping in and just doing that. That's cool, that's cool. All right, so I guess I want to walk to walk to some of your skills that we have today, because obviously with your Instagram handle, DIY underscore landlord, right.

You must be a DIY landlord. Yes.

Let's talk about why. Like, why are you managing yourself versus having property managers? And let's go into that a little bit, OK?

Yeah. Let's talk about property managers. It's important and I think this was a really big advantage. I had one. I started managing myself so I could go into real estate full time quicker. Now, that's not the right path for everyone, but for me it was. And when I went into management, I mean, real estate full time, it exploded. I went from one and I went from twenty four units to one hundred and fifty units and two commercial buildings in three years.

So yeah, it exploded when I started doing it full time because I could network, I got connections. I talked to banks like it just built on itself. So if I hadn't managed myself I never would have been able to take that step sooner. And then I started seeing as a managing it. I have a unique advantage because I know exactly what I'm going to do to this property. If I'm going to buy something, I don't have to depend on a third party manager to determine what my outcome's going to be.

It's dependent on me. I also have some handyman skills. I was a framer. I had my own construction framing company in college, so that kind of fit in. And so I do some of the manual labor myself. I've kind of stopped that now that I've hired some people and stuff like I'm facing some things out. But in the beginning I was doing a lot of it because I had time and because it saved me a lot of money and it helped make me money.

So it just help me build my portfolio by doing those things at that point.

Yeah, that makes sense. Well, we haven't done a show in a while on just landlord skills, but a lot of our listeners, they start by managing their properties themselves and we can have the debate all day long whether or not somebody should or shouldn't. But, you know, I started that way. David even started that way. And David didn't stick with it long because he realized his skill set was better and probably management. But like, I started the way.

So let's let's go through some specifics on property management. First of all, when you're looking for a tenant, like, what do you say to people? Like if one of those common questions I get is, what if I can't find a tenant? How do you answer that? What if I can't find a tenant? I have this vacant unit. If I mean and nowadays in America, who is saying that know where you're living, that you can't find a tenant like that?

I mean, the tenants are everywhere for one and two. You control a lot of what you need to do to find a tenant. Do you have a good property? You know, is it desirable? You can lower the rent a little bit. You can figure out how to market it better. Like there's so many different areas. You can be a better landlord. And so you get referrals from your other tenants. Are you telling everybody that you have a property?

A lot of people are kind of scared to be like the owner or whatever. I'm not scared to be the owner. I want everyone to know I have properties so that they call me and say, hey, do you have a place? I'm like, Oh yeah, I have one coming up, come on into it. Like, it helps me to find tenants by people knowing what I do. Like I find tenants from Instagram. Believe it or not, I have tenants reaching out on my Instagram.

Hey, yeah, I saw that you're on Instagram. Do you have any properties to rent?

And it's funny. So it's good to manage your property and your mentioning ways to get tenants, but like you said in America right now, it's not super hard to find somebody who wants to rent some place. So what advice do you have for the listeners on how you're going to screen these tenants, how you choose who you're going to rent to?

OK, so and I will say how I get a lot of tenants besides I use Facebook marketplace, which is an amazing tool because it basically advertises for you for free and that you have this place that you have to pay for if you use your own personal page. Anyways, when I screen them, I have a property management software and I do a credit and background check. If anyone has an eviction on the record, I do not accept them. I verify their income and I hate to be that person, but I don't like renting to entrepreneurs like you have to have real verifiable income.

It's kind of a bad thing to say. Yeah. And then then I get up their landlord history like, do they have a good renter history? And I like when I get an application and they put their landlord, I Google the address. I look up the owner of the address and I basically scrub it down to see if that's the actual landlord. Yeah. And if they're giving me a fake landlord, OK, they're out. If I get a good landlord reference and they have income and they don't have an eviction, it doesn't really matter what their credit score is.

If those three things are true, like I know I have a really solid tenant.

Yeah, yeah. That makes sense. I went to this great tip. I really liked it a lot.

And we do it a lot where when they put down a landlord reference, I will call like not me anymore, but we'll call that landlord and just say, hey, I wonder if you have any vacancies available. And then if they say vacancies, well then why are you talking about then, you know, they just put down some random person or a friend or whatever. But if you're like, hey, John said that he rents from you, are you his landlord?

Then his buddy is like, oh, yeah, yeah, yeah. John, yeah. Great guy. Right. So I just a little sneaky way to get in there to try to make sure that they're not just giving their friends. Yeah, no. Because like they could they could.

But that is that is a good tip. I remember I read that video Stumblin book. All right. So what are what are the things that are I mean, you mentioned those like the credit score may not be quite as important if they've got all the other things, like what are some red flags that you're just like are not going to rent to that person.

So if they have an eviction, definitely not. If they have utilities in collections, that's OK. Plus sign normally that someone kind of got kicked out of their apartment without going through the eviction process. So that's a huge red flag. If they have passed you on utilities, if obviously criminal history, I check that I don't want to have any violent felons living in my place just as a safety concern. And so that's a big red flag and then also verifiable income.

That's a huge thing. Like I got to get the pay stubs. I got to see how much they're making. Is it from a real place that if I have to evict them, I can go garnish their wages? You know, if someone's an entrepreneur, you kick them out, that money's all gone. If they work at a place that they've been working there for a number of years and most likely not going to change the job, I'll get my money eventually.

That's that's really a good point.

You know, one other point you made that I don't think we've ever talked about on this show. You know, it's not in depth. But I want to make the point now, because I've been researching a little bit. It's about this idea of like renting to the criminal history. So here's what I've been finding. And honestly, I didn't even know that the law had changed over the last few years. The way you said it is exactly the way that we said I don't want violent felonies like felons in my properties.

Basically, what has happened in the last few years is listing a lot of states. And I think it's just federal now is if you have a blanket, no felony policy that can be called discrimination because certain types of people have higher rates of incarceration or at least higher rates of arrest.

And so if you say, like, you can't have been arrested or you can't have it, you can get in trouble for discrimination. So you have to be able to apply the same principle across all your properties, of course. But you also have to be careful not to either a decision that could be considered discrimination against a certain type and also drug abuse today and even even other drug related felonies. Again, we're not lawyers not giving legal advice here, but like even certain drug related things can be considered a disability, not a I've even heard people say to the point of a DUI and DWI that they weren't screened against them because, I mean, if they're an alcoholic and they were driving, well, that's a disability.

Their addiction is a disability. Therefore, you shouldn't discriminate. I don't know if I go quite that far. Not that I would necessarily discriminate against that anyway, but just something to be aware of.

If you're a landlord, there are rules and there are laws that we have to be careful. We have to follow. And they might seem silly to some of us, but they're out there. So do your research.

Yeah, the and I didn't I haven't followed it, but it's going to the Supreme Court, that whole thing, because the largest landlord in America got sued because of that interest. And I and I hear it's going to Supreme Court. I haven't followed up on it, but yeah. So I always say violent. Yeah, violent. Yeah, that's the thing.

And the truth is like whatever. I'm not a little bit of possession of here. There. That's not the biggest problem to have an attendant. To be honest. I agree. And going back to.

I just wanted to. And with this whole property management, like why I did it and looking back, I can see why it was an advantage for me because there's like two types of property managers. There's a property manager who is a real estate agent broker, and they know how to manage single family homes. They know how to show the heck out of a single family home. They understand that type of buy or rent or they speak that language. And so they do really good with a single family.

Then you have the sophisticated property management companies who manage like one hundred units and more like. So they manage those apartment complexes and they have all the fancy systems and they understand apartment renters and how to put all these little fees in there to get the most you can. And they even have software that tells them how much to rent the property for depending on their vacancy. So if they have like a two percent vacancy, the price will be here. If they have a five percent vacancy, the price will be a little bit lower, like they have all these things.

But there's not normally very proficient property managers in the in between in the multifamily from like six units to 40 units, because the big guys, they want staff on site. They need a property manager and a maintenance person on site because that regional director is never taking a phone call and they're not doing anything themselves. They need to have people to do it. And then the people who manage the single family stuff, they're not used to apartment renters because when someone moves into apartment, something happens to their mind.

They become a different type of person. I don't know what it is, but it's the truth. They don't know how to throw their trash away like they can't get it in the dumpster. Like, I don't know what happens to these people, but something happens. So there's not really good property management in between. So I kind of put myself in that market that in between market and that's kind of where my sweet spot of managing is, because I can handle a 40 unit apartment complex, having no staff on site.

Yeah, you know, I'm writing this book. I wrote this book where it's in editing right now, but the multi-millionaire comes out next year and we have two volumes. The first one's on smallmouth, the second one's on large multi and in in the small multi. I make this point very clear and very often that there is a sweet spot in multifamily exactly what you're saying, because it's too small for the big institutional guys and all the ones that are really, really, really been doing real estate forever.

And they're going to steal every deal because they're good and it's too big for all the people just getting started buying their first house or single family, or at least they think it's too big. So it's just like in managing, there's no good managers. It's also not as many investors looking in that range either. And so if you're in a market, you're trying to get started with something a little larger, there can be a good, sweet spot right there.

Now, I'm curious, how are you able to get loans for all these properties?

That's another question I get very often from people saying, well, what if you get I thought the limit was only for loans or I thought that was only ten loans. Like how do you get these loans to get up to one hundred and some unit that you have now?

So the limit on loans that people talk about is just conventional mortgages. That's the type of mortgage you get on your own house. You can also get on an investment property and they check the heck out of your credit score and your tax returns and everything you spend and your insurance that they look at everything and it's like a long list and you can only get a certain number of those up to ten normally like four, and then it becomes harder, then you can get ten.

But there's no limit on the amount of loans you can get from a local credit union. There's no limit on the loans you can get from a local bank. They call them portfolio loans because the loans are held in a portfolio at the bank. They don't sell them to another bank and there's no limit on those loans. Your terms are a little bit different, but you just have to make your deals, work with the terms that you get depending on what place you're at in the borrowing cycle.

Yeah, persay. Yeah, that makes sense.

Yeah. I think people I have never known anybody.

I always kind of puts this issue to rest. Those listening. I have never known anybody and I doubt you guys ever have either who went and got their ten loans and went shoot. I don't know what to do next. I can't figure it out. I'm done, I'm stuck. I guess I'll give up like nobody. Like everybody figures it out when they get to like three properties. Like it's like you figure out like you get in the game.

Everyone worries about that when they have no properties or when they may have one. But they don't. They don't worry about it.

Down the road, though, just something of those non issues that everyone thinks is an issue but is really not as big of an issue.

You're exactly right. Yeah.

All right. So let's one more question on the property management side. Like for me anyway, what do you see, like successful property managers? I know later on in the show and ask you about what what are top investors do that sets them apart? But good property managers like what what do they do?

What are some of the principles or trades or skills that good landlords, property managers, people who take care of residential property, what do they have that's different?

Really good customer service. You know, people think like, oh, I have a tenant and then they're just there and I don't have to worry about them if they call. I'm not going to pick up the phone or. No, like, if you have really good customer service, if you have a property manager who always. Picks up the phone. That is just huge because you you reduce your maintenance expenses because you're heading off problems before they start or you're fixing them before they become a big issue, you're reducing your vacancy because, you know, you're a good easy to get a hold of.

So when someone's calling to rent a place, they get in touch with you right away. They're not waiting a day to hear back from you or anything like that. And that's kind of like the main thing. It's like being proactive, being available, that kind of thing. A lot of people don't want to be they're scared of that. What if someone calls me in the middle of the night? What about this and what about that? Like they're scared to pick up the phone, but being always available to the phone is really if I were to hire a property manager, that's what I would want.

I would want my tenants to be able to call them any time of the day. And at least if it's an emergency, they would get someone. And that if they're listing it, if they call, it gets picked up right away. I mean, I've I've done tenant screenings for people who live in other properties. And I would never, ever let those people manage my property because it took me four days to get a landlord reference back like no one would pick up the phone.

And I knew the owner of the company personally, like, I had a message on Facebook and they're like, hey, like, get me this.

That's funny. Yeah, yeah.

Customer service is notoriously bad with landlords and property managers because they don't know how to manage a business they don't have.

Maybe they know how to manage tenants and do a tenant screening report maybe, but they don't know how to manage a business. That's a completely different skill set.

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So when it comes to providing good customer service, there's tools that will help. There's customer relationship managers there, systems in place. Can you share a little bit about what you've found? Works the best to allow you to give that customer service and kind of how you run the management side?

Yeah, that's a good point. So I don't I mean, currently I'm managing like two hundred units in total and all my tenants have my phone number. Well, they have a Google Voice number that goes to my cell phone, but they're pretty well trained to text. If they need something, they send a text message and that's pretty easy. Like I don't mind text messages because I can answer them when I need to get to them. I can see if it's an emergency.

I really like text messages, but on top of that, I have a property management software called Building and building them is a pretty good property management software.

If you kind of already gone past maybe like ten units or twenty units and you're not yet to like the big dogs building is is is a good software for that. And people can text within the app and they can also send in maintenance requests. And I have a maintenance guy who can get those requests right away as soon as they come in. And it really helps, like, OK, if if this person really is like kind of tech savvy and wants to just put in requests, boom.

If it's an old lady who doesn't know how to use the Internet, find she has my phone number, at least she can learn how to text and she can send me a text message. I've seen some people who are like, no, they only have to send in requests online. And I don't think being rigid like that really helps because there's some people who just can't. Figure it out and you might end up with a whole house flooded because that person couldn't figure out how to put in a maintenance request.

Yeah, yeah, that's really good. Well, how can you share some of the specifics? It sounds like what you're saying is that Billiam is a portal that allows communication between landlords and the tenants to make it easier to service what they need. It probably also avoids that whole awkward. They're calling me. They're asking me for something. I know I don't want to agree to it, but I don't know what to say. Does it also help with rent collection?

Does it also help with, like maybe reminders that maintenance needs to be do that you can leverage off to handymen or people on the team?

Yeah, it is a complete package. So I do all my accounting and there all the rent collection comes in. People can pay online, they can even pay cash. You know, a lot of people like how do I accept cash? Well, with this product, I accept cash, except that people go to CBS to pay it. So people go to CBS with cash in hand, they scan their barcode and then the cash automatically goes into their ledger and is just accounted for greatly.

It's amazing.

I get like thirty thousand a month in cash payments that I don't ever have to deal with. It just comes into the bank account automatically accounted for. And then the tenant also has a website. It's the same. It does by tenant screening in there. I mean, it does everything in their aliases. I mean, it's all in one. And that's why I like it. And it's pretty easy to use.

Yeah, we have we actually operate all of our like residential like my grades harbor Washington, like my my starting properties I guess are all manageability. Um, I think my property manager company that does the mobile home parks uses something called rent manager.

Very similar anyway. Yeah. So yeah. Very cool stuff.

So you're using that to kind of handle all your stuff, which is important.

And the nice thing about most of those platforms and there's a number of em out there, is that they allow you to kind of scale up a little bit like you don't have to necessarily pay thousands of dollars a month or hundreds, even hundreds a month to get started. Like you can get started a little bit cheaper.

But it's good. What I think is that it's good to get those systems down when you only have a few units rather than waiting until you have 50 or 100, because that's what I was I had like sixty or seventy units, I think, before we started using Billiam. And then it was hell like that. It was like a lot of work to get figure that out. I would have rather started when I had two units and just acted like I had a big business degree.

I do agree. Yeah, at least have a couple of units, see how it's working and then figure out a system that's going to allow you to grow like, yeah, be ready. It depends what you want. Some people only want two units. Fine. But what is your goal? If your goal is one hundred units will start acting like you have one hundred units and get all the systems in place. So when you do get there, you'll be ready.

I'll tell you something else, in addition to that, that's really cool for the people listening, there's something about that.

If you build it, they will come mentality from the Field of Dreams movie that just works so good with human brains. When I go and hire staff and I have people on payroll, it affects me emotionally when it comes to generating for business. Because now if I don't do it, either that person loses their job or I don't turn a profit. It it changes the way that I interact. It's not. Do I have to do this right now?

You want to go do it because you set everything up when you've got systems in place like what you're describing for one hundred twenty units and you've got ten it. There's this part of you that feels like I need to fill these spaces. I need to find properties, I need to analyze deals. You don't mind doing it. You look forward to it. Is that a similar experience? It sounds like because you said you're very decisive and you take action quickly.

That may have been what led to you scaling, which you kind of paved the road and said, now I got to go take the journey.

You're right. And I can pinpoint the time, though, that I realized, OK, it was going to flip and this was going to go big. And if it came down to two things and Brandon mentioned one of them, one, I realized there was a space in the market between like ten units and forty units that there was hardly any buyers in Chattanooga for, like, I know all the buyers, like there's like five. There's just not that many who are buying in that space.

And there wasn't then and there still isn't now, not as many. So I realize that. And then I got this crazy opportunity. I was buying a single family home and the lady happened to have a pocket listing for ten duplexes on one street. And I didn't have the money to get it done. And before I would have let that limit me to like, oh, that would have been amazing deal if I had the money. But then I realized it doesn't matter how much money I have in my pocket, how can I get this deal done?

And I looked at it from that perspective, OK, how can I get this deal done? And then I went and found someone and I brought her in as an equity partner. She paid an almost entire down payment, got thirty five percent of the share, and we got a loan from a local bank and we figured it all out and boom, got ten duplexes on one street, almost doubled my portfolio on one purchase. And that kind of opened my mind to say all I'm looking for is deals.

I don't care about money, how much money I have in my bank account that the deals are what matter. And I know deals are found in this space because there's not that many of us here. So this is where I'm going to target.

Yeah, you know, one of the reasons I think that that sweet spot exists, the ten to forty unit range is because they are they are a little more difficult to manage. You don't have on site management. Right?

You don't have you don't have an integrated institutional grade one hundred and eighty unit with a pool and a Jacuzzi or whatever. Like you don't have that. And it's not a single family house that's you're going to get really, really nice. Is there the difficulty that is present in that space? So, like, I don't want to lie and say there's not, but that's where money is made, especially in a competitive market like today is if you're willing to take on hard things like that and you can become good at solving those hard problems like that.

I mean, that's why I like people tend to ask why I stick with mobile home parks, because they're freaking hard. They're difficult. They're like midsize apartment buildings. They're hard, they're difficult. The quality is tough. And so I like difficult things. I think that's where a lot of money is made.

So, yeah. Do you do do you agree? I tell you I agree. One hundred percent. And I was fortunate because the one hundred and twenty units that I manage for that company when I came back. Yeah. Same thing, it was built up of streets of duplexes and small apartment complexes. So I was already handling all these really difficult situations.

I mean, I had someone murdered at one of my duplexes. I had all sorts of stuff go on. Right. And I was already handling these issues and I was making it better and I improved it so much. We ended up selling that package one hundred twenty units for seven point five million to another investor. Like, I was like, oh, wow. Then I thought, oh, well, I can do this. I can manage all these things I can do.

I can make them better. I'm going to do it for myself. Yeah.

And that's actually another great point about these apartment buildings is that let's say you buy a 20 unit apartment building right in each unit, rents for eight hundred dollars a month. I'm just making up numbers here. But let's say you're eight hundred dollars a month, times twenty units. If because you're a better manager and you clean up the property a little bit, you make sure that things are getting done on time. You're responding to maintenance requests, you're keeping an eye on the market and you can bump that from eight hundred to a thousand over a couple of years because or maybe it was under rented and you just brought up to where it should be.

You know, you had a hundred dollars a month in rent. And it's like, well, that's not very much, but times twenty units is, what, four thousand dollars a month over the course of a year. That's almost fifty thousand dollars in extra revenue.

And so at a five cap, a million dollars, an additional value you just made, you just made a million dollars by increasing.

I hope I did that math because I did it really quick. But I think that's like you just made a million dollars in a couple of years off of just being a good manager and knowing what you're.

Which is why the the key to that level, that sweet spot, I believe the key to success in that level is management. If you can manage that team or if you can hire the right property managers and keep an eye on them, you can be massively successful.

This is not hypothetical. OK, two years ago, I bought a 40 unit apartment complex.

Now I bought it for the company. So I'm the president of that LLC, but I don't have an equity share. But anyways, I bought it for one point two million two years ago, the end of this month. We're already under contract. It's going to close and we're selling it for two point seven million. Wow. In two years. And that was just it was it was professionally managed when I bought it and I took it over and I professionally managed it better and that I increased rents, I reduced expenses and turned around using the cap rate and like, yeah, like in two years, like that's where like amazing money is made.

Amazing wealth is made like I love cash flow if you're starting out. I started out as a cash flow investor and I still am a cash flow investor. But I realized along the way cash flow is like so important for safety and security and when you need it. But real wealth is built on your your personal financial statement. Real wealth is built as you increase the property values. I mean, you cannot get enough cash flow to compete with the wealth you can generate by improving the property property's value.

Yeah, it's a David like what you say about it being a defense of metric. You don't talk about that because, yeah, that's really good. And it's good for people to hear, especially from someone like David who's doing this cash flow keeps you safe, it keeps you alive, it keeps you from losing a property, but it does not build massive wealth. You know, you look at a typical deal, you're going to get one hundred dollars, two hundred dollars, three hundred dollars a property or a door.

It takes a long time for that to turn into a million dollars in value. The people that are really good at investing, they're looking at the big picture, not just the cash flow. And I feel like cash flow becomes this addictive siren that calls to you because you're unhappy with something in life. Most of the time you don't like your job, you don't like that, that you're stuck at home and that you just want some change. And you think that cash flow, that real estate is my savior and it pulls you in.

And the next thing you know, it's you know, it's not it takes a long time to build wealth just through that look at it instead. Like, this keeps me from going bankrupt. It keeps the property around time equity. You pay down rising rents, more efficiency. And how I manage it, that's what's going to build wealth. Now, I think another thing to point out, David, that you mentioned is that by managing it more efficiently, you improved your NOAA, which would be kind of the same as improving cash flow and that led to bigger wealth.

Do you want to talk about maybe some of your plans to scale, like once you've improved a property, brought it to its peak, and you think that now it's time to to exit when you would do that? And then what? That what you look for in the next deal, like what you're looking for now with your strategies of what you're trying to acquire.

OK, so you ask a couple of things there. So first of all, what I look for now is other properties that have an opportunity, like they're mismanaged, they're under rent, they need some light repairs, not major. I don't actually normally do a huge renovations. I'm more looking for like, OK, the mismanaged properties. I'm also I've started doing commercial as well. And that I just look at is there from some reason, while I'm getting a good deal, like if I can get something for a good cap rate and it's a commercial property, even if it's not mismanaged because it's not much management to like a commercial retail center, honestly, it's pretty easy, but that's just like, OK, there's some problem here in the market.

I'm able to get this for a good corporate. So I'm looking for deals that have the potential to increase that that revenue. So more rents and then when do I sell? That's a tough question because I like holding onto my properties.

I don't always sell. I sell sometimes. But it has to be like if I think I'm really getting a premium for it, even for this apartment complex, the four unit, I probably want to sold it, except I set my price and they met it and I was like, OK, fine, I never even listed it. Like I just told a realtor about it and they brought someone. It was a really easy transaction because I like, you know what if I'm going to sell it, I have to get enough, because now I got to take all this money and go reinvest it and I got to go find another deal.

And so that means I have to put more work in, but it will be worth it because I have cashed in all this money. That makes sense. Hey, man, how do you find him? How do you find this sweet spot? Apartment complexes? Yeah, so network, network, network, network. Honestly, it's more about like I'm really dialed in to Chattanooga Market. That's kind of my it's my advantage. That's what I really stick to this market because I know so many realtors, I know so many other investors.

And I want everyone to know that I buy properties. I mean, I got some deal from a pest control guy. You know, he does pest control at another apartment complex or another duplex is like, hey, they probably want to sell. Oh, yeah. And put me in contact with them. I'll see if they're willing to sell. And they sure enough, they were they were Instagram.

I got people bring me deals on Instagram because they see me. I'm active in the market. I really just want everyone in Chattanooga. I mean, bigger pockets interview like everyone in Chattanooga. If you have a deal, come today with ideas I buy and and I get repeat sellers, especially real estate agents, because my goal is to be the easiest buyer ever. A lot of real estate agents are dealing with really difficult sellers, especially when it's multifamily and there's this and there's that.

The sellers can be really difficult. So I try to be the best buyer possible. I will, like, gloss over some things, you know, I don't know. I try to get for a good price, but I'm really, really easy to deal with, especially on terms and on inspections. I'll be flexible. I'll work with their schedule. I'll come whenever they can. I always do what I say I'm going to do. I've never not closed on a deal that I put in a contract unless I found something in due diligence.

It's just never happened because that's my reputation. I am a good, easy buyer now. I buy things for a deal. Everyone knows that it has to be a good price, but if it's a good price, I'm definitely going to buy it.

That makes sense. What about financing them? You get this is a good deal. It does put 20 percent down. You have to be rich to be able to buy these big apartments.

It's, you know, the the bigger and this is going to sound funny to people.

The bigger the deal, the less money of my own I actually need. Yeah, that doesn't really make sense does it. Like the bigger the deal, the less money of my own I actually need, because if it's a big deal I can bring in other investors and not even doing big syndications or actual syndications like one or two investors who have a couple of hundred thousand dollars and they want to be in real estate and they know that I do it.

And hey, here's a great deal. And they know it's a great deal because I'm going to manage it. I'm going to make sure it's a great deal. So the truth of the matter is what's limiting to me is just the deals. It's not the down payment, because if I find a good deal, I will find a down payment. It just I'm sure, Brandon, you know, like it's like if it's a good deal, people are going to come with their money because they're going to make a good return and they trust you.

Yeah, it's so true. I love that you say like the thing the thing that you focus on is the deal. It's not that you don't think about money. At some point, of course, you're going to think about that. You're that's why you're networking. That's why you're connecting with people and doing all that.

But like, if you're focused and you're you're your primary driver is to understand that if you have a great deal, everything else falls in place.

It's kind of like the book The One Thing, right, DJ Papasan, Gary Keller. Like the one thing is all about what's that first domino? What's that? The one thing that you could do that makes everything else easier or not necessary. I'm butchering the phrase there basically.

Yeah. Get a great deal. Everything else is easier. And guess what? Getting a great deal is totally something that you can learn. It's totally a skill, just like basketball or fishing that you can get good at by reading some books and by practicing and by talking with other people who are already good at it. And so it really when you think about real estate in that way and you realize that, yes, it is that simple, like it should make everyone listen to this.

But right now going, oh, shoot, this sounds way easier than I thought because it is it's like it's not easy, but it's also not like this is not trying to figure out how to, you know, I don't know, date trade stocks with Warren Buffett or some, I don't know, like real if it's not that complicated, like, I don't think I'm that smart, like, honestly, like, I know trigonometry, you know, algebra even like I'm like pretty basic, but it's pretty easy to see for me because I put in the time and the research, I listen to bigger pockets.

I read the books like you have to put in the time. But once you put in the time in the research, you realize, OK, I have the data now the skill set is actually pretty easy. It's not very complicated. I love it.

You could say there's one thing that you did well that other people didn't do well and really just say, hey, this was what I got right. And that's why I got here. What would you say that is?

You know, that's hard to say because I don't think I necessarily there's a lot of ways to do things in real estate especially. And I'm happy to share my story, but I don't necessarily think it's the only or the right way to do it. There's a lot of other ways and a lot of other successful, more successful people than me. Honestly, I took action, though, and the people who don't do anything, they didn't take any action.

That definitely sets us apart. But not only did I take action, I had a goal that I was going. Reach and I was determined to reach it, so I wrote it down. So this is the goal. And then I made a plan to achieve it, wrote that down, and then I took action and I was determined to achieve it. And then it happened like 10 times faster than I thought it was going to happen.

But I find that pattern over and over my life. When I when I set a goal and I write it down and I start working toward it.

It's amazing how fast things fall into place, like you get your conscious mind and your subconscious all working toward it.

And just it just, yeah, I tell everyone to write their goal down and probably one percent of the people that I meet because people, other new investors, they come and ask me questions and I'll go out to lunch with them or whatever, and I'll share my secrets. And I don't really have any secrets. And but I'll share and I'll answer questions. And I think probably one percent of them actually go back to their house and write down their goal.

And it's just so easy. It takes no money. It takes hardly any time, but it takes commitment. And I don't know, like it's all a great idea. But to actually commit to it, what if I fail? What if it doesn't happen? Like.

Yeah, yeah. So good man's really good. Really good. Well I think it's about that time, David, like it's time to move to the deal, the deep dive.

Hey, let's take a quick break from this episode, we'll continue in just a moment, but first, let's hear a word from our sponsors right now.

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All right, Mr. Grabner, it's time for the deep dive, the part of the show where we dive deep into something that you've done. So we're just going to tear apart a property in a good way and find out I get the dirty details. So with that said, are you ready?

I'm ready. We'll start with what kind of property is this and where is the located?

OK, so I'm going to do a pretty simple one for people to understand because I do a lot of creative stuff, so I'll just do a pretty simple one. It is a duplex. It's really a house with a basement apartment. But it's it's a duplex in a little town outside of Chattanooga next to a college.

All right. OK, and how do you find that deal?

I found that deal because I was in closing with a realtor for another property and the realtor was like, hey, I have some people who want to sell a property, but they still have some work to do on it. Are you interested? No, no, thanks. All right, all right, how much how much was it, how much do they want for it and what do you end up getting it for?

They wanted, I think, 150 originally. I got it for one thirty cash, OK.

And and how do you negotiate that price? So I went and I talked with them, I met with them and I was like really easy. I did my inspection really easy. And I was like, well, if you want to list it. And I put financing on it. The realtor had said something around like, oh, they probably would want one fifty. But then I walked the property. They had some work to do, like the bathroom needed to be finished.

And it's like you could just stop working today.

How about one thirty? Stop working today. All right.

Yeah, that's awesome. I actually love that. When I was younger and I wanted to pick up other shifts from people at work, I would simply just call them an hour before their shift. And I would say, hey, do you want it's not going to work today. I'll just go for you every time. Every time, no matter how much they needed money, people would say, yes, they don't want to work. That day there.

I thought I could pick up more shifts of one to earn more money. It's because people think in the immediate they make decisions in the immediate because that's the emotion. I'd rather I'd rather go see a movie. I'd rather hang out in bed and watch some TV or do anything else than do that work. So if you're going to fly, that's a real stay like this. Like right now, you can stop working. I mean, you're not telling them, hey, if you would just work two more weeks, you get ten grand more.

That's a lot of money per hour. But like, they don't they don't think that way. It's not a logical thing. It's an emotional I could stop right now and like I've done it, I've fallen for it many times in my own life as well. And not and I don't regret it. Like, sometimes I just want to be done with something. So now that I love that, very good. Right. So that's how you negotiate. Now, you how did you find it?

You said cash, but was actually like you just walked up with a briefcase of cash. You're like what the financing look like.

So that one I took out of a line of credit that I have against what on my property that has a lot of equity in it. So I kind of use that line of credit to buy properties and then I refinance them. But even for someone who doesn't have a lot of credit or cash, there are hard money lenders out there and they don't require much like don't let that. Oh, I didn't have cash stopped me from being able to do it.

Like you had access to cash. It was just more expensive than the cash I had access to.

Oh, that's good. That's a good way of looking at that. Yeah, we all have access to cash. We just have it a different values or different causes. Different. Yeah, because that's that's really good. That's good.

I guess we buy everything with cash. Just, just use cash so we're using.

All right, cool. So once you have this property, what you do with it.

So I finished up the basement, took a little bit longer than I thought because my maintenance guy actually had to have a hip pacemaker put in. So he was out for a couple of weeks. But good thing I know how to do stuff myself because I can step in when I have to, the advantage of knowing how to do some things yourself.

But anyways, so I fixed it up a little bit and now I got it rented out the upstairs rents for twelve hundred and the downstairs rents for seven hundred. I actually didn't even listed and a previous tenant of mine called me and said they needed a place to stay and I was like perfect. I got the perfect place for you.

So you got this property, you bought it for one, you said one thirty. Right. You put the money. How much you put into it, right? Five thousand and not much at all.

So you just finished it up there and now you're renting for nineteen hundred a month total. Are you paying water, sewer and garbage there.

Do you have it split. No, no tenants. They pay their own water.

Yeah. That's like, that is like the golden like I don't know golden.

Whatever you want to call it. Gousse will stay for now like in a small multifamily. I think if you can get the the tenant responsible for their own water, sewer and garbage like it's it's unreal. The difference, like my all my best properties are the best because of that. That's cool. If you can split it, if you can do submitter, if you can do whatever you can do that.

Oh yeah. It's so important.

I have a twenty four unit right now that I'm like have my maintenance guy like taking meter readings because it's like individual meter. But I'm, I'm then I charge them back. But I'm in discussions now with the water company to have them take it over and it's going to be so awesome once they take it over. I don't have to worry about that.

But the other guy was just the previous owner was just eating it because it was too difficult to deal with.

So he was eating twelve. Twelve hundred a month. Yep. In cost. Yep. And he was just eating it.

And let's do some quick math. Right. Twelve hundred a month times twelve is fourteen thousand dollars roughly a year and that is seven hundred thousand dollars in value out of five cap I think.

Right. So like that I'm like all right, I had a pen cap and I do that math. Yeah. Well now would be like a ten cap does not play that much for fourteen thousand a year. Divide by ten would be four hundred and forty four thousand dollars, one hundred forty roughly nine and ten cats out of five would be three. OK fine. Three hundred K in value that he's just thrown away. Not quite a seven but yeah it's, it's crazy what people are wondering how I'm doing that math if you want to know like just look up like cap rate and no eye on bigger pockets and you'll find that how that formula works.

And there's a lot of talk, but over a three year period, that's almost a million dollars. It's a lot. That's what we're talking about. And it's easy for three years to go by where you just think, oh, yeah, I got to get to that.

Yeah, there's it's it's crazy how much leverage there is when you can shift that water bill over and how much more valuable your properties are when we buy our mobile home park. So it's like the first thing we do is we shift all, we install submitters. If they're not already there, the tenants pay their own water.

So garbage and I have never, ever had a tenant. We like leave because they had to pay water through our garbage. Never I've never had time to leave. I've never had a tenant like even like complain, oh, you pay water here. Like, it's almost like they don't they don't understand, because to them it's like, oh, it's just a little water bill.

It's 50 bucks a month. Two hundred dollars a month. So it's not a big deal for them. They just accept it as like, oh, it's the cost of living in this property. But for the landlord it's huge and it also cuts down and saves water and save the environment. So there you go. You're doing something good.

All right. Let's the end the last question here. So you funded it. What do you do with it? So are you did you refinance it then at that point or.

Yes. So I am closing on the refinance on Friday. Refinance to out. I got it appraised for one sixty five.

So I'm pulling out all my all my money back out. I don't have anything in it.

And I got a great little deal from the college dayle credit union over here down the road and they give me the loans and they're so easy and it's like never going back to conventional because it's so easy when you're in the commercial.

And honestly, that's cool. I the last question of what lessons did you learn from this deal?

Who. To appreciate my maintenance guy, because when he was out and getting other people to do the work was it was tough basically. I mean, it's a pretty small basic deal for me. I didn't really you know, it's nothing really new to me besides that. I had to do it when my maintenance guy was sick. So I appreciate him even more. That's awesome, man.

Well, good, good. That's a really good example of a really good burr like where you buried a property the by rehab, rent, refinance, repeat property. You use the short term money, which was that line of credit to buy it. You then refinanced it got paid off your line of credit then. So now you have a nice long term loan that cash flows like an ATM machine. This property I'm sure does. What's your estimate on what you're going to be getting for cash flow?

You know, I don't know. Actually, I said I should know the top of my head. I don't have.

Yeah, I mean, the fact that you're not paying water, sewer and garbage, it's probably you already did some work to fix it up. I mean, you got to be cash flow in hundreds a month per unit.

Oh, yeah, definitely. Oh always.

Yeah. At least four hundred a month. You'll be at least four hundred a month for that property. Yeah. That's awesome. Very cool man.

All right. Well, with that said, let's get to one of those places. Actually, I will ask before we get to the famous four, I got two quick ones.

First, where do you see yourself headed in the future? And secondly, what can our audience bring value to you? How can they bring value to you?

OK, so where I see myself headed in the future is very unique. I am actually starting a program where I hope to use a modified BRX method to help end homelessness in Chattanooga. So I already house homeless in my apartment complexes, but I had this idea I'm going to buy properties using investor money who want to make a difference and a return. Then I'm going to rehab the properties in partnership with the city of Chattanooga. They'll pay for half the rehab.

If I agree to rent it out to low income individuals, then I'm going to rent them out to people who are on Section eight, who are homeless or at risk of being homeless. So when someone goes homeless, they often get a section voucher. Then I put them in the property. At the same time, I'm going to re-educate the tenant. There's a program called the Homeowner FSS program that Section eight does, but no one takes advantage of and will teach these people how they can achieve their goal of becoming a homeowner over the course of a year.

And it incentivizes them because if they increase their income, they don't lose that money like they normally do it. Instead, it goes into a pot that they can use as their down payment on a property. Then I'm going to refinance property, pull my money out, and then hopefully I'm going to resell the property to that previously homeless individuals so they can just buy the house that they're in. So it's a completely kind of shift from what I've been doing, but it's something I'm really passionate about and hopefully so.

I already bought my first property. I'm going to buy ten next year and then in the three course of three years, I'll have one hundred. I'm going to get one hundred and three years and I'm going to try to see how many people I can successfully put through this program. That's cool, man.

That's awesome. I just yesterday I was walking around. I thought I could kind of like a homeless camp out here in Maui.

There's not a lot of it here in Maui, but there were some and I was like, man, I should be doing more like to try to like because like we get as many people on how to be a landlords, but like, yeah, I need to find more ways to give back and try to end homelessness or at least try to limit it. Some some. Yeah. Kudos to you. A thousand.

Well thank you. I'm excited about it's not the most profitable thing I can do with my time for sure. But it will be one of the most rewarding things that I can do with my time. And at this point in my investing career, I don't need more money. I mean, I want to do things profitably because I want this to be a model for other people to then take into their markets and be like, OK, David's doing that.

I could do that too. And it won't be the most profitable thing, but it will be a good thing for my community and it will be steady income and it will be a little bit of money and then I can then grow my career from there.

Yeah, I think that that is key is you want it like you don't want to just think, how do I help. I mean you can think this, how do I help a dozen people or even one hundred people. But I love it. You're thinking how do I make this scalable? How do I make it profitable enough that it can be scalable? Because if you're just relying on goodwill for scalability, it's very, very, very difficult. So how do you align like capitalism with humanitarianism, right.

To scale something? I think that's like the perfect, perfect model right there. So, yeah, very cool. Thank you. Yeah.

And so how people can if they want to be involved in that or if they just want to reach out to me on Instagram, I really appreciate if people go and follow me at DIY underscore landlord on Instagram. I post stuff on there about being a realtor. I mean how realtor, a landlord, a real estate investor. And also I'm going to be scaling up this. I call it almost a homeowner program, so be looking for more about there.

And if you have any questions, you can message me on Instagram and I will answer your questions as long as it's not. Do I want to buy foreign currency?

Crypto. Yeah. You want some bitcoin? No. All right. Yeah, that's awesome, man, I just followed you as well. So now we're our Instagram buddies. So with that said, let's get to the last segment of our show.

It's time for our famous for.

All right. Time for the famous. For the part of the show, we ask every guest the same four questions every week. David, number one, what's your current favorite real estate related book?

I think my favorite real estate related book is Got to Be the Millionaire Real Estate Investor by Gary Keller. It was just such when I read that book and I still reread it. It's like such good basic concepts in there. Like to really it gives you a good foundation.

There we go. What about my favorite business book? Favorite business book? And this is what people really think. It's a business. It's a negotiation book, but I think it's the most important thing in business. Never split the difference by Chris Voss that that book has made me more money probably than any other book. It's amazing.

That's great. We had him on the podcast. It was really good. Brennan and Josh interviewed him. Yeah. OK, what about some of your hobbies?

Yeah, I love playing soccer since covid. I haven't played in a while and I just started doing adventure racing with those like I don't know if it's OK. So I don't know if you saw Amazon had this the most difficult race, whatever it was. I heard about it. Yeah. Anyway, it's where they go all through Fiji like ten days a race, ten days through Fiji. So basically I watch that the echo challenge and oh I want to do that too.

So I found this adventure racing where you run bike and kayak or swim depending, but you also have to navigate at the same time. So you get a map and you have to find your own way through the course of school. And then it's like crazy long too. So I did one. I've only done one so far, but I'm starting I did a ten hour one and then they have like twenty four hour one.

They have three days, five days. So I'm building my way up. I want to do there's one that goes across Florida, it's called the CDC and it's three days. So I'm building up to be able to do that.

That's awesome. Very cool. All right, man. Well, last question for me. What do you think separates successful real estate investors from all those who give up, fail or never get started?

One, they write down their plan. Two, they're determined to succeed in their plan. And three, they give themselves enough time to achieve it. Too many times people want to be millionaires overnight. Real estate will turn you into a millionaire.

But don't put a ten month timeframe on it or a one month time frame. Give yourself a couple of years and I guarantee you'll get there. So write a plan down determination and spend enough time. And that's what the successful people are doing. I guarantee it. I love it.

All right. This has been awesome. David, thank you very much. For people that want to learn a little bit more about you, where would you recommend they go?

I would recommend that they go to Instagram, DIY, underscore landlord and follow me. And I also want to give a big shout out to my other investor friends on Instagram who helped me actually get on the Bigger Pockets podcast at yoga. Rob Forest and Rebecca, you guys are the best and you actually helped me get on the show. So I am very, very appreciative of that.

That's awesome. Well, thank you to those for and with that said, a time to get out of here.

Thank you. David Grabner. You've been awesome. I can't wait to kind of continue following you on Instagram, see what you're doing following your journey, learning from you growing together. That's what's cool about the bigger pockets communities. We're all like doing this together, learning, growing and helping each other out, which is awesome. So if you're not plugged in to that world, everyone listen to this. You should be up for a free, bigger pocket's account and then follow us on social media.

David Greene. Twenty four Beardie Brandon and DIY underscore landlord.

It's just a it's a good place to learn while you're looking at cat videos.

It's great. All right, man. Oh, David Greene, you want to get out of here today. Thank you, David. This is David, baby beard green for Brandon. Big Beard Turner signing off.

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