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This is the Bigger Pockets podcast show. Four hundred and forty eight.

The reason my strategy works for me is because and I can't say clearly enough, I'm super lazy, working 50 hours a week, raising three kids.

I don't have time to run a real estate business, but I have to live somewhere. So reaching financial freedom sounds like a big milestone. But what do I do? Every couple of years I did one thing. I bought a property.

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? It's Brian Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David. Financially fit six pack green. What's up, man? How are you doing? Pretty good.

That comes up in today's show. We draw some analogies, believe it or not, weird analogies in the Bigger Pockets podcast.

Who would have ever thought that?

All right. Today's show is phenomenal. We got a guest. His name is Don McNeilly. Deon is a former Marine who was a single father making like a low dollar powered job. I mean, like just getting started doing what you guys are doing here, but it's crazy. And he use that foundation to build actual financial freedom. Like he doesn't have to work. He makes more money than he spends. He's got this thing called the income snowball, which is awesome.

It's a great way of explaining the power of rental properties. And here's the thing about Deon is everything he does, you're going to hear the same phrase over and over and over and over today. And that is I'm lazy, I'm lazy. He doesn't do fancy, like weird. No one lamented on financing things like I had to do in my business. He doesn't do a whole lot of, like, crazy. Let's do all these fancy like he's very simple, very lazy in his words on how he did it.

Yet genius, you're going to love this. Everything from the income snowball to he talks about this thing called the binder. It's how he gets his tenants to actually request an increase in rent, which is something you've never heard on the show before. You're going to love it. And here's the last point I'll make is Diane is actually a product of bigger pockets. In other words, he found bigger pockets early on in his investment career. Like his, he got started and was struggling and he used the lessons that he picked up from the podcast and from the groups and the forums to get to where he is today.

So something that a lot of you are exactly in the midst of, that you are where Dion was and maybe you're a lot farther than Dion, but regardless of where you're at, this episode is going to change your life. I really believe that. Definitely one of my favorites we've ever done. That said, that was a long intro. Time for today's Quick Tip. All right. To this quick tip it's brought to you by David Greene. Today's quick tip is keep it simple, silly.

The KISS Method Diet is one of the best examples that I've ever seen of creating a very simple roadmap that anybody can follow that will lead to financial freedom.

One of the key components of what he did was to keep his income from creeping up as he made more money. He did not spend more money that requires discipline. Look for different ways in your life where you are starting to get lax with your standards, where at one point you had a very specific plan and you were very focused on it and you've maybe slipped out of that and tighten those things back up because over a long period of time it makes a very big difference if you're keeping things tight now.

There we go. I like it. Good quick tip from David Greene.

And now let's get to today's show sponsors. All right, everybody. So we recently did a whole show about this, the big three roadblocks for new investors.

What are they. That's right.

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Here's the thing I love most about real estate investing, there's so many different ways to build wealth in this business, like did you know there's a way to invest in real estate that gives you a similar cash flow to rental properties, but without tenants repairs or vacancy? That's right. I'm talking about real estate not investing. If you want to get started and not investing, you need to check out PPR No Company. So People Company's founder, co-founder, CEO Dave Van Horn, he literally wrote the book on real estate note investing for Bigger Pockets.

And he joined us right here on this show and show two seventy three. You know, since 2007, seven has managed distressed mortgage investment funds that have bought and sold thousands of residential mortgages nationwide, managed by a team with expertise in real estate, finance, property management and better investing. They provide investors with passive income for over a decade. If you want to learn more, check out our note COCOM such PBP again. If you're looking to supplement your active investing and get a nice return, passively learn more about how to get started today in notes or a diversified note fund at PDPA Note KO Dotcom SBP again PPR notes ko dotcom sice BP and now I just want to jump into the show.

Anything you want to add before we jump in? No, let's grab Deon. All right.

Well, that said, let's just jump right into the interview with Dion McNeilly. All right, Diane, welcome to the Bigger Pocket's podcast. Man did have here.

No, thanks for having me here. I'm super excited. It's really weird for me. I've been watching you guys for so long.

When I got the call, I thought I was being the Ashton Kutcher show up and be like, you got punkt. I applied to be on the real estate Ricki Show. I mean, I have fourteen units. You guys are a show that have people like Matthew McConaughey and Greg Padoan and meet Kevin and Ingram Stefen and Hakeem Vélez. And I'm like, what can I bring to the table? I mean, my story is, you know, it was eighty nine thousand dollars in bad debt, single parent with three kids.

And from what I learned on bigger pockets, it took less than ten years to get bad debt free and financially free. So I'm hoping that there's somebody in the audience that can learn from something that I'm going to bring today.

Dude, I'm excited. Unpack that. And, you know, we like having these, you know, Matthew McConaughey and stuff on the show. But it's funny, like, our biggest shows are never those shows.

Our biggest shows are like, hey, I can identify with that person. I was where they were.

And those are always the biggest shows we do. So this might be our biggest show ever. Who knows is we'll find out what that said. Tell us about your stuff.

How did you get what were you doing before real estate? Kind of walk us through. You said you were single dad in all this debt. So it paints a picture of that early life of Diane before getting into real estate.

I mean, there's really two things that bring me into real estate. And then if you go back to early life, the way I was raised was the biggest factor. We never were homeless. We always had a house. We just didn't own it or pay rent. We used to move into houses, fix the doors and windows and wait for the owners to show up and say, who are you guys? And then we just moved to the next place.

So one of the reasons why I joined the Marine Corps was they provided housing. And I remember going to friends houses as a kid and listening to their parents talk. And once in a while I would hear about rent and it blew my mind. I couldn't imagine that I was in the house of somebody who was so rich that they could afford to pay rent. And not only that, how much it was, but they did it every month, which crazy.

And so actually now I still think of all of my tenants as much richer than me because they can afford to pay rent and I'm just house acting, living for free. And the second thing that brings me into real estate is I was tired of sources of income getting taken away due to things outside of my control. After Desert Storm, the Marine Corps downsized in 2008 when the recession hit. Police departments shrink like there's no revenue coming in. So people think, you know, there's no more crime, so we don't need cops anymore.

And I got laid off and I started looking around thinking there has to be a way to make money that doesn't rely on selling your life one hour at a time, especially when those ways keep getting taken away. And my brother had retired before fifty with real estate. He used a strategy that I probably couldn't do because he took out a home equity line of credit, basically turned his house into a big credit card, purchased mobile homes in the middle of nowhere, and they were falling apart.

And then he's like a craftsman. He would fix them up, make them really nice. I'm a single parent with three kids working a full time job. After the police department, I started teaching people how to drive trucks making seventeen dollars an hour. So it wasn't like I was had a ton of money coming in or I had a big savings rate, but I thought I should try out real estate like my brother did and to test out the waters.

I moved from my house into an apartment. I thought I'll just rent the house out to see if I can handle all of these things of parenthood job being a property owner with tenants. And I didn't see myself as a real landlord, so I wasn't running it like a business. I thought I shouldn't make a profit. So I set the rent at what the mortgage was. So I wasn't figuring capital expenditures or vacancy. I was if everything went perfect, I'd be losing money and it didn't go perfect.

I rent it to a friend because I figured I couldn't trust a stranger and he was a single parent. And so I identified with his issues. When rent became late, it became later because I let it slide. So he stopped paying and became never. And when I finally went to the house to have a face to face conversation to ask what happened, I found out he didn't even live there. He had moved out, rented the house to someone else and was collecting the rent and keeping it.

So I thought, OK, I'll try this again. I'll rent to the new tenant. And in three months I was able to collect seven hundred. Out of a thousand dollars a month rent, luckily, she moved away and I gave up, I thought, like you heard you say many times, I'll just go watch Dancing with the Stars, which I haven't seen yet, but I was underwater on the house, couldn't even give the house away.

Even subject to someone taking over the mortgage wouldn't work. And right about that time is when I found bigger pockets. And this is in the dinosaur days. You guys weren't even doing online video yet. You were doing blogs. And I thought, that's my mistake. I'm just trying to jump into real estate without any training or education, you know, to become a Marine. That's boot camp, infantry, school, M.O.s, training or job training to be a police officer.

It's a six month academy with ongoing training. And I thought, I'll just go to real estate and replace my job with this and I won't need any training at all. So I started reading and learning, found rich dad, poor dad. Your book hadn't come out yet and helped when it did so I found a tenant, got her in the house, realized I can handle this and started looking for single family houses. I figured I'm working too much.

Kids take a lot of time so I don't want to buy a place I have to fix. I just buy a place, live there for a year in a year, move out, buy another one and kind of repeat it. But single family house cost too much in my area. They just didn't cash them in Tacoma, near Aberdeen, where you used to be.

Tacoma, Washington, the Tacoma aroma. Exactly. Is that what I'm smelling right now? Yeah. Anyway, the Tacoma aroma. I love Tacoma. It's actually a great rental market, but yeah.

Yeah, I you know, that toy derailing this or that insult to Tacoma, but. Oh that's OK. Yeah. I like to go home. I've got a couple of properties here that are making it to I don't have to work on one of the bigger pockets forums. I found out that small multifamily and single family have almost the exact same lending structures and I looked at duplexes which cost less than a single family house in this market. And I thought, why don't I buy one of those in house?

And so I moved into one unit, rented out the other, purchased my first duplex. And that one move, it took my housing cost from fifteen hundred dollars a month for the apartment, down to three hundred dollars a month. So twelve hundred dollars a month added to my savings rate. When you're making seventeen dollars an hour and it started to go up slowly, that's a lot of money and avoiding life creep, you know, not getting a nicer car or doing things that are just costs more money.

I kept saving a little bit over two years later I purchased an investment duplex and then this is when this thing happened that I called the income snowball. Everybody talks about the debt snowball, about paying off the smallest amount and adding that to the next. But hardly anybody talks about when you purchase a cash flowing asset. Each time you purchase one, the savings rate gets bigger and bigger. And so it was a little over two years for one duplex to the next.

The next duplex was in less than two years. And so at this point, I had a single family house and three duplexes and I was limiting myself to four mortgages. I figured the big banks kind of do that, too. Lenders will go up to ten mortgages in a person's name and if you're married, you can get ten each. But some institutions like Wells Fargo, Bank of America, kind of like that for mortgage limit. And I thought, yeah, yeah, I'll do that because they're smarter than me.

So it must be a reason. So then instead of buying another property, I focused and paid off the house, the original single family house. So within six years I had seven units when the house was paid off. Now this is where I absolutely reached financial freedom with just seven units as a police officer. I don't know what David you make in San Francisco, but in this little tiny town, I was a cop and I was making thirteen hundred dollars every two weeks.

That was my take home. So twenty six hundred dollars a month, my cash flow with seven units after all expenses and saving for vacancy and repairs and principal interest taxes and insurance was twenty seven hundred dollars a month without having to go to work. So I wasn't rich but I made work completely optional in six years based on what I picked up from bigger pockets. So someday I'm gonna write a big check. Send it to you guys.

Dude, dude, you're paying it back right now. This is awesome. I want to unpack everything you just told. That story is amazing. So a few things I wanted to I wanted to point out. First of all, I love that you jumped into, like, this idea of house hacking.

That's the number one thing we recommend people doing. And you mentioned I even wrote this down to the one I want to dig in this is that the same lending structure for a single family house versus a multifamily, a small multi. Can you explain that for other people? Everything. Well, what does he mean by that? How is the lending kind of the same for the small multiverses single? What do you mean?

It's probably one of the reasons why you guys show so great people. Forget what it's like to not know something. So when you're teaching, clearing things up like this is amazing. It's helped me a lot. The lending structure, when you buy a single family house, you have several options. You can buy it as an investment property. But if you're going to live there, you get to do low down payment, like an FHA can go all the way down to three point five percent.

I found a conventional lender. This is a few years ago before the pandemic and the lending figures went through the roof. But I found a conventional five percent interest for that first duplex because I was going to owner occupied it. I had a VA loan available, but I've never used it. I've actually kept that in my back pocket just in case the perfect property pops up some time when I don't have a down payment saved up. And my goal also is at this point was cash flow.

So I wanted to do the bigger down payments after that first five percent. I've done twenty or twenty. Five percent down with mortgages for four units or less, you can get 30 year fixed rate, low interest loans. If you go to five units or more, you start talking about commercial loans where you have shorter periods and then there's a loan re-evaluation at seven or 10 years. And that's for me so far been what's been the barrier to getting into commercial properties.

I'll explain a little bit through this story. But the reason my strategy works for me is because and I can't say clearly enough, I'm super lazy, working 50 hours a week, raising three kids.

I don't have the time to run a real estate business, but I have to live somewhere. So reaching financial freedom sounds like a big milestone. But what do I do? Every couple of years I did one thing. I bought a property and that one thing is broken down into all the little steps from the washer truck episode or vacuum the truck episode and breaking down each one of those little steps. It's easy for lazy people, especially when you have the motivation of making work optional, which is for a lazy person, the strongest motivator out there.

One hundred percent.

A hundred percent. And what's even more amazing and made this whole thing work too, is that, like you said, you you minimize the lifestyle creep in. I think it was the book I wrote called How to Invest in Real Estate. I wrote with Josh Dalkin. There's a chapter in there I talk about. There's a movie called Fantastic Beasts and where to find them. And in this there's this creature came what it's called. But there's this little creature that will expand to whatever size container you put it in.

In the movie, they put it in a teacup and then later they put it inside of a bus or something that will grow to whatever size we have. And so I make the analogy in there that our finances are, for most people, the exact same way. So whatever container meaning like the amount of money you make in a given month, you're spending will increase to that size with almost everybody. I mean, I've hung out people who make three or four hundred thousand dollars a year saying that they're broke and they they living paycheck to paycheck and have been out with people who make twelve thousand dollars a year and they're broke living paycheck to paycheck.

What is most people I don't know, 80, 90 percent of people live paycheck to paycheck. And these eighty eight percent I read the other day. Why is that? It's because everyone is everybody and I'm not different. I got this before when I was younger. I stopped in my car when my wife and I would travel around. And why would we pay for a hotel when you can sleep in the back of a Prius? Right. And then it was like, well, you know, now we got some money.

We can stay at Motel six or whatever. You had a Super eight was like a nice hotel at today. I rarely go anywhere. Like, I won't say anything less than like a Hilton. I feel like I've increased my lifestyle and everybody kind of does it to a degree.

But what you did is you said, no, I'm not going to do that. I'm a stick with the lower like disability because the more you can hold that line, the easier financial freedom is.

And then once you get the financial freedom now, you can go and dramatically increase your income if you really want to at that point. But at least it got you to the point where you had the financial freedom and you can enjoy life a whole lot more. Is that a good summary of what you did there?

Yeah, I mean, I pretty much nailed it right on the head. One of the things that I have is a really strong focus to work in law enforcement or the military. You learn how to really structure things. And so even when it comes to money, I structured it instead of increased money that I can spend. I was working on the savings rate because everyone that I hear about talks about saving 10 or 15 or 20 percent. But my mind said my savings rate goal is at least a minimum of one hundred percent.

So when I got the first little bit of cash flow from the house in the beginning and I reduced my housing costs, I took that money as a savings rate. A couple of years later, add the cash flow from the new duplex to the savings rate. So it's seven units. I reached my goal of one hundred percent savings rate because all of my living expenses are now covered by assets. So one hundred percent, every single penny from work is now my savings rate and I'm living off the asset.

So I've tried to explain to few people I have over a hundred percent savings rate and I think that's not possible. And I guess I don't clarify that it's from my job. And now I'm saving about 60 percent of the income from the rental properties because that income snowball is crazy. When I started out saving up about twenty thousand dollars to get that first duplex with closing costs and reserves and those kind of things seemed like a monumental amount of money. But the down payment amount of money that I spent seems like an impossible number to me.

That's so cool. I love that concept of the income snowball because the guy you said, Dave Ramsey, everyone else talks about the debt snowball. But the same thing applies here if we're talking. Yeah, I mean, I heard the analogy. I use it often of like oil wells.

Like every rental property you buy is like an oil well. It's pumping oil out of the ground. And so you have one you get one gallon oil a day. You got two of them you got to every day. So, yeah, really, really cool stuff. Hey, real quick also. So kind of summarize your story here in a nutshell. You buy the house, you then house tacked a duplex and then a little bit later about another one in house like that one in the house like that one each time getting these low down payment loans.

And then you paid off the first one. That's where we're at, right?

Pretty close. And to make it sound a little easier to the people out there that might possibly be as lazy as I am, I only house once on the duplexes. That savings rate increased so much from the house and the duplex that I within a little over two years. I saved an actual twenty percent down payment on a. Investment property and the next purchase was an investment, too. It was the next purchase, which is going to be the deep dive was my second house hack, if only house twice.

So to reach financial independence doesn't mean you have to move every year and relocate your family and move your kids to new schools, which I think people should talk to their kids when they think of that as a barrier. A lot of times I try to help people reach financial independence and I figured out how to do it in less than 10 years, pretty much no matter what your starting position is. And it drives me crazy that no one wants to hear about it.

No one cares. So the bigger pockets community is like my therapy. I get to find people who actually want to listen to this stuff. So I'm in the bigger pockets. The official Facebook group and the real estate group trying to answer questions as much as possible and taking phone calls, usually about an hour long, trying to figure out where someone's at and where they're going. But the bigger pockets community is actually full of people who are ready to make these steps.

So we get to share this information with them and that really becomes a time sink. Taking those phone calls becomes really long. And so my solution, because I'm really lazy and I really want to help people as I started making YouTube videos and answering the most basic, simple questions. And so now to make sure that the person is ready to hear it, I'll say here, watch this five minute video and then we'll talk about house hacking, because it doesn't have to be every time.

It's just that momentum in the beginning. And I've heard David say this a few times, really a lot better than I probably will. But once you get the momentum going, the first few years are the most crucial. Like you said, once you're financially independent now you get to have some of that life happen.

Yeah, I mean, I think I did basically how I still technically mouth hacking today, but I was hacked pretty strongly the first five years, six, seven years of my investing. So when I was twenty seven, I was living on three grand a month. I was making three grand a month on my rental properties. I was able to quit my job at the bank and I just like hung out for six months. And that's when I was like, you know what, I should start a blog.

And so I started really in your twenties. And then I became friends with Josh Dalkin. And Josh and I were like, hey, we should start a podcast together. All of the Bigger Pockets podcast. The last eight years of doing this was because I had that low income financial freedom ride like that. I wasn't making millions of dollars a year, but I had enough that I could live. So I go and take those risks, which is what we're at bigger pockets is all about.

Now, I'm curious, we're going to fire this out, David, because I've been talking to Michael out today. And David, actually, you are a lender or you lend in California and other places now. So I'm curious, like, do you still see those? Like, I mean, how I can still work right now, even in today's crazy market? What are the rates like right now? And can you still get five percent? What are you seeing right now?

Yeah, that's a good question. So I own a mortgage company and we lend to people. And what you find is that most people make the they have the same thought that Dionne described in the beginning, which is I need twenty twenty five percent to put down to those of us in the business. That's obviously not the case. But to so many people, like Diane said, that we forget people don't know stuff. I get clients who come to us all the time and they say, hey, I'm not ready yet.

I have to figure all this stuff out. And I'm like, no, you don't. I've done this a billion times. I'll just tell you right now, we're going to put five percent down. There's tons of conventional loans where you can put a little bit of money down. You hear a lot of people talk about the BR strategy. That's another thing I've noticed that people say I got a BR. I got a BR. Well, if you're putting three and a half percent into a deal, you don't really have to br.

There's not a whole lot to get back out. Many birds, you're going to leave more than three and a half percent in the deal in the first place. So five percent down, three and a half percent down is not that much money to put into a deal. Like I think Diane's going to share with us in a little bit. The important thing is that you're intentional. And that's something I've noticed as you're speaking. You are very measured.

You are very intentional about what you're doing. And it shows in the results that you've had, you've literally said, here is my plan. I'm going to save X amount of money. I'm going to put it into a house, I'm going to rent that house out. I'm going to make this much. I'm not going to let my lifestyle creep happen. So where I'm losing some of that money, I'm going to take all my profits, invest it right back into real estate, and then I'm going to keep saving the money that I'm making at my job.

That is not an easy thing to do. It requires discipline. But at the same time, it is not a complicated thing to do. It's remarkably simple. It's just like a lot of other things in life to make you successful. You want to be fit, you eat good food, you make sure you exercise, you do it for a consistent period of time. You end up fit. You're just very financially fit, like we've seen, like, you know, down here has a financial six pack.

This is this is really this is awesome. And when you get in good shape, you can do things in life that you couldn't do. When you're out of shape, you can take different hikes, you can surf. You could do physical activities that energized you and get you pumped up. And then it makes it easier to go out there and live a healthy lifestyle. Are you not going to take this opportunity to throw in a jujitsu analogy? I mean, come on, men like when you're in shape, you can do jujitsu, but if you were completely out of shape, you'd have a hard time.

I was going to avoid you. I'm going to avoid that today because you go out everyone thinking you're upset. This is a conversation Brandon and I have where I feel like the amount of exposure I actually have, the jujitsu is not nearly enough for as much as we talk about it. And I don't want to be labeled in the community as a jujitsu fraud. So I'm trying to make less jujitsu analogies. But yes, anyway, that's a good analogy, though.

The fitness like once you have that financial six pack that we call. Yeah, that's good. You agree, Deon? I'm going to steal that. I'm going I'm going to use that. The thing that really picked me my. A lot, by the way, I feel a lot of what David said, that they took the heat of the mind to take it. Well, that's the funny thing. I've helped a lot of people reach financial independence.

And any time they thought I know something, it's not true. I'm a filter from what I've heard on your guys, a show, I just take the small parts and put them together in something that I can explain to filter what we heard from your dad or whatever.

And the really cool thing is what it's done for me to help people. Just like you said, you're a filter from what you've heard from someone else. If five years ago somebody said, what do you plan on investing in, I would say, well, I want to buy rental properties that make money. But since I've answered the question to people who are just starting out and they say, what do you invest in, my strategy is narrowed down so perfectly that I don't even have to think about it.

It is side by side, small multifamily. So there's no tenants living above or below another two bedrooms with a garage because more space equals more stuff. So less likely to move tenant turnover washer and dryer in each unit because people don't like using a laundromat or shared laundry. And so I have like 20 second answer to a strategy that makes work completely optional. And five years ago, I never would have been able to put that on paper. And now it's just in the back of my mind, because every time I help somebody, I'm actually the one learning.

You know, the the highest form of learning is teaching. And I heard that recently on your podcast from Limitless is when you start something, start with the idea of teaching it later. And that's helped me a lot. And just a few minutes ago, Brandon, you mentioned how you were able to take the risk to get bigger pockets going. And not everybody needs to take a risk to get a big successful show going. But I was teaching people how to drive trucks at a truck driving school making seventeen dollars an hour.

And I hadn't even got the first duplex yet, but my mind planned out a ten year plan to be financially free. And so I was able to take a risk at work. The owner retired from the truck driving school and new owners came in who had never worked in transportation. They're just really nice people. They wanted to buy an educational place to help people learn a trade. And before, with no plan, I would have kept my head down and just done my job because I need the paycheck to raise my kids.

But since I had the plan for financial freedom that I was getting from bigger pockets, I had an idea that grew the school from six staff to over 60 staff in one location. We have four now and we're opening in other states. So because I was willing to take the risk and present my idea, they actually said that's a great idea, we'll try it. And if in six months we're doing good, you'll run the place in six months, we're not doing good.

You're fired someone else to run the place. It was the best chance I've ever been given. And because I had financial freedom as a path, I could afford to lose, the job took the chance. And now I'm the company president and part owner of the company because I was willing to take the chance.

That's awesome. There's a lot of lessons in there. The main one I want to point out here is that David and I talk a lot about which is excellence in everything you do, how you do anything and how you do everything stuff year to job.

Right now, a lot of people are like, well, you know, I don't want to have a job forever. I want financial freedom. I'm working towards it. So I'm going to put a little effort into this job as possible. I'm going to just scrape by because I don't want to be here. And that's not what I want to do long term versus like I'm going to be the best person possible and try to make the most bloody money I can at this company and help this company just completely change their destiny, because that just reflects on me.

And if I leave in a few years, they've got financial independence. Fine, but at least you, like, showed up and did a good job, which gives you a higher paycheck, I'm sure, than you were when you're making seventeen an hour there and now you have the choice, you can stay there, you can help, you can be a part of it, or you can go and do your own thing if you really wanted to. But yeah, there's just such value in that, that I see a lot of people not doing that is trying to scrape by on minimal work.

I mean, there's such value to just hard work. David, anything think on that. I was going to mention the fact that when you're in better shape, it makes life more fun. You do fun stuff, makes it easier to stay in shape. Exercise is easier when you're fit than when you're not fit. OK, finances work the same way. When you have some discipline, you're saving money and you're earning money. It becomes fun. Now you're buying houses.

You're getting this jolt of dopamine that you feel so accomplished that you just did it. You want to do it again. Your mind starts looking for how can I save more money? Where can I cut back? How can I get the next deal? And it makes it easier to grow. That momentum that Dion mentioned earlier is really, really important. And for people that are having a hard time getting started, I think a lot of them feel it's always going to be this hard.

It's not the first workouts always really hard. The first house is insurmountable. But once you get it, you see that kind of deal on what you've done is you've almost turned this into a procedure that could just be repeated over and over.

And it has to be simple. The lazy kicks in. And so I like to workout. I used to run a martial arts studio when I got out of the Marines and I practiced defensive tactics with law enforcement agencies still. But I'm really lazy. So how do I work out when I'm at home? I like to bench TV shows. I'm a big nerd. I mean, if you can't tell, this is a Forgotten Realms map on the wall behind me.

But when I watch a show, I have a home gym. TV's in the home gym. So when I want to work out, I mix it with something fun when I want to buy real estate. Any time you do something in real estate, the first time is terrifying. The second time you can just about teach a class. It just seems terrifying until you've done it once. So making a game out of it is what's worked for me when I'm hunting for deals and all of my deals are from MLS, I use traditional ending.

I don't have off market deals. I don't have any special systems. It has to be easy to reproduce or my lazy would stop me from doing it. And there's a book called One Rent. A lot of time, and I didn't find it until years after I had my properties, but I realized Michael Zober, right? Michael Gruber, I think, and he laid out my strategy like word for word of save up the down payment, buy a property for properties will be life changing because it was at for when I had seven units and didn't need to work anymore.

And it's just straight from that loss. And, you know, you have to in law enforcement, whenever you get new evidence, you adjust your opinion, form an opinion and then fight to stay there. You find the evidence and then you change. I wanted single family houses, but they don't. Cash-Flow So I shifted to small multifamily house hacking helped. But I'm too lazy to move every year. So I found a way to invest while only doing that twice.

So the easier you can make it, the more likely you are to keep doing it right.

I hope you're enjoying this episode of The Bigger Pockets Real Estate podcast. We'll be right back after this quick break.

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So here's a question that I have for you. You've taken the same information that everybody who listens to the podcast gets and you've turned it into something actionable that you're making progress with. Do you mind sharing? What about your background or the way you filter information has led to you being more successful with this than others who hear the same thing but have trouble putting it into action?

I kind of think that's like the question that comes up in the famous for, you know, what separates the people who are successful from the people who don't. And my answer is, ninety five percent of investors fail because they never start. That first deal gets you to the second to you. You can't have the tenth. And you've made the analogy and I can't remember the word I've tried to of the domino effect. The first small domino will knock over one fifty percent larger than it all the way through the chain.

And taking that first step, you know, everybody that wants to get into real estate thinks I'm going to buy a property. Well, that's so vague and so large. How do you do that? I'm going to learn how to save something, even if it's small. I'm going to work on my credit score. Even if it's small adjustments. I'm going to find a lender to find out what I'm qualified for, these tiny little steps of a ladder that get you to the top of the wall instead of trying to scale the whole wall one move.

So figuring out what does that first small step that you can do now, that isn't a big commitment and it could just be saving or working on your credit score or watching this over and over and over and over through every show, because, I mean, bigger pockets, money, bigger pockets, business. The rookie show, the real estate show, it's helped me grow a business. And this is a life heck, I could not for the life of me, get my son to listen to anything I was saying about real estate and making work optional.

It's gone to college, had racked up some debt. And so while I was answering questions to some of the people in the Facebook groups, I started making the YouTube video. I started doing posts called Deon Talks, long things about how you can get into real estate with simple, easy steps, how being lazy can help. So I made some YouTube videos to answer those questions and my son watch them every now and then he'll come up to me and he'll say, hey, and he'll explain some strategy that I had to research to put into the video.

And hopefully he doesn't watch this because I think I've cheated at life to get him. So in one year, he's gone from fifty four thousand dollars in bad debt to completely debt free and him and his wife have fifteen thousand dollars saved towards their first small multifamily. So I'm super excited about that.

Do that's so good. I want to go back a second here.

You mentioned just kind of casually that you have a very strict criteria when it comes to buying stuff. And you mentioned side by side duplex, not up and down. I also love those, but I'm curious of why. Why is that something that you look for?

So I'm trying to increase the pool of tenants that would want to rent a place. All properties will work. My dad one time was trying to insult my brother. My brother was buying his first rental property. It was three places to needed so much work that could have been torn down or repaired. And my dad trying to be sarcastic the way my whole family is told my brother, man, people will rent anything. Not realizing he was putting the thought in.

My brother said that he was right. People will rent anything. The nicer you make it, the more likely there is to be a bigger group of people willing to rent there and less likely for them to move. And since I'm really lazy, I don't flip or wholesale because those are jobs and the br method. It would have scaled faster, it would have worked better, but it's a lot of steps. And the refinance and the rehab I like to buy occupied or rent ready properties where I don't have to do hardly any work because I am working and raising kids.

But the criteria and I didn't have these when I started again. This I have to thank you guys. The criteria comes from explaining it to people as to why I like what I do. So side by side units means that there's no noise complaints from tenants above or below another. If there's a water leak, you only affect one tenant instead of possibly both. And then the two bedrooms in a garage means more stuff. So less likely to move the washer and dryer makes it more convenient.

Mindy Jensen has talked with me a few times about how a noisy street can be a deterrent for people wanting to live there. So the location in real estate, location, location, location. But then I also have strict criteria that have protected me. And this is one of the most important things I like to help people when they're just starting out. My portfolio is designed for a prolonged government shutdown, a pandemic or a stock market crash and all of twenty twenty.

I didn't have one late or missing rent payment and some some of the criteria that you can add. So you have criteria that first the math needs to work. Will you get your return? Does it hit the one percent rule or your ten percent cash on cash return, or what is your criteria for money or numbers? But then it's the side by side units, the size and the washer dryer. But I like to diversify my properties because I don't invest in any stocks.

I can't stand the idea of a retirement account. I hate money being locked away, not paying me now, whereas in a rental property there's cash flow appreciation, principal pay down tax benefits. So my goal is to put all my money into real estate. But if you're one hundred percent in real estate and one apartment building and you have a rent strike, you could sink. So my small multifamily is are all more than ten miles apart, all within about an hour's drive since I self manage so that I don't pull from one source of tenants that way.

And each one is close to at least two economic drivers. So I want a base support, a college or hospital, a Boeing or Amazon terminal, and at least a population of one hundred thousand or two or more of those. And then I diversify the tenant base. I have about one third military. I'm by Joint Base Lewis McChord, so it's a large base and I have about one third Section eight. I can't thank you guys enough for the Joe Asamoah episode because I had a house, the single family house rented out for fourteen hundred dollars a month had to know how to research rent prices.

I didn't know how to find tenants. Watch that episode. I called Section eight and they said, Oh, we'll have a tenant for you tomorrow at eighteen twenty five. She has an eight thirty credit score and so open my mind so I keep at least one third of my tenants from Section eight because a lot of people think of Section eight as low income housing and that's not what it is. It is fixed income housing. So someone on disability or retirement for our military disabled vet.

And then the third thing is I have people who are working or retired. So if the base shuts down or companies move away, a total of one third of my portfolio can be impacted. And so I'm saying all of this because I'm thinking you guys, because I wouldn't have known how to even explain it to us or develop it to such a way where I have confidence to keep buying properties in twenty twenty. A lot of people were in this panic mode.

I don't know what's going on. And I missed a couple of deals because I wasn't paying attention to interest rates. Interest rates started to drop, prices started going up and my brain said that place cost too much, I can't afford it. So I actually ran the numbers and I use the CDS rental calculator app and the bigger pockets rental calculator to run the numbers. But I never followed through to the very end and seen what the actual mortgage payment was amortizing it.

I was just trying to find out the return. So in twenty twenty I bought a four plex and a triplex, basically doubling the size of my portfolio, my payments for those, even though the prices are higher or less than what I was paying when I used to pay higher interest and I've over doubled my cash flow in the middle of a pandemic. So again, thanks for the show, because I've been able to do that because of what I'm learning here.

That's so good.

Hey, one more thing on the side by side. I don't know if you've done this yet. I want to point out one of my favorite things about side by side property is that the. Water lines are typically not as intermixed as they are and like a old house that's been chopped up into three different units or whatever, where, like you can't separate the water meters where on most Side-By-Side properties they're already separated or it's a simple, very simple few hundred dollars for a plumber to come and separate the water meters and put up meters in.

That's a one other just benefit of that isn't it's a lot easier to transfer over water to your tenant. So have you done that yet. But I'm a huge fan of side by side for that reason.

I really like tenants being in charge of their expenses like that because if you're paying the electricity, you'll find the windows open and the heater on and there's eight inches of snow on the ground outside right now. So as much as possible, everything I put in the tenants name when I can. So anytime I hadn't thought of that, that probably is easier to separate out just for water.

Side note from the mortgage side. A lot of people don't realize how cheap money actually is right now. I hear a lot of people that say I'm trying to save another ten thousand dollars, then I'll buy a house because I want my payments to be lower. At today's interest rates, it's about around a little bit less than four dollars a month for every thousand dollars that you borrow. So that ten thousand dollars is going to save you thirty five to forty dollars a month to save that much more money to put down on a property.

That's exactly why. Than you were able to spend more money on a property that probably brought in a little bit more rent than what you were used to and have a lower payment because interest rates are so low, which also plays into why people are complaining that property prices are so high and everyone's complaining that prices just keep going up, up, up. But when interest rates are going down, it doesn't actually become more expensive to pay more for the property.

Yeah, that's 100 percent right, especially when you can do.

If you're using an owner occupied for a house with less money down, the higher price is even less of an impact because you still have the loan money down and the lower monthly payment that's common.

All rights to take until you kind of take us through twenty twenty what your portfolio's like today. I thought maybe we'd move along and get to the next segment of our show. The deal deep dive.

All right.

This is the part of the show where we dive deep into a certain deal that you've done. And you mentioned that you have one prepared. So let's go to it. Why don't we start with what kind of deal was this?

What kind of property was this and where was it located?

OK, this is a fourplex. And Spanaway Washington, which is about ten miles away from Tacoma.

All right. And how did you find it? All of my deals are from the MLS, and I got really lucky. This was an agent that was about an hour away and an owner who was in another state. It was listed with one terrible photo. And like I said, I like side by side units. And most fourplex is in Washington state are big boxes with two tenants. I'm talking to tenants on bottom. And there was one photo and fourplex is were going for about seven hundred and fifty thousand.

This was listed at five ninety five. And luckily I thought, well, the price is great, maybe it's falling apart. And I look at the photo, it looks like it needs a roof and the decks have some rot just from that one bad photo. But I Google Earth did and I went down to Street View and I'm looking around on Street View like I'm turning them, but I'm looking around on Street View and I see this lawn care company that's really nice.

And I look across and I see this apartments and I look across and I can't find it. I'm thinking, oh, this is a fake because I'm on Zillow and Trulia. Sometimes I'll find fake accounts for some reason. Don't know whether they're. But this is off the MLS. And so I'm looking around and I look back at the apartments. And really what the fourplex is, is almost townhouse style, side by side fourplex with garages for each unit.

And my heart went up into my right here and I call, text and email my agent and I say, here's the offer I want six hundred thousand dollars, offer some five thousand over and escalation clause up to six fifty fifty thousand dollars in earnest as the market is heating up. It's really hard to get a seller's attention and I don't have a lot of money to offer more money than what it's really worth. But I can put a big earnest money down and I'm comfortable doing that because I still have an inspection clause and an appraisal clause.

So I'm really not putting that money at risk. I have a way to get out of the deal if I don't want to get it. But I wanted to get this under contract and my offer was accepted and it was a house act. So I was going to do owner occupied. I want to do twenty percent down because the income snowball had kicked in. And remember I was making seventeen dollars an hour ten years ago I had one hundred and forty one thousand dollars in the bank and to me sounds like a life savings.

But it was a couple of years savings with the income snowball and the down payment would be one hundred and twenty thousand.

First, I just want to throw in a couple escalation clause which is where you offered six hundred, but escalation clause basically says, hey, up to six fifty, I will beat any other offer that comes in. Is that a good way of explaining that.

That's it exactly. So if someone else comes in, mine would go a thousand dollars above theirs or five thousand dollars above theirs.

Yeah, it's not that common, but I really like escalation because they're fun. And yeah, if somebody else would offer six twenty and boom you're actually at six twenty one and so you've got the higher offer there, it just shows you're very into it.

Secondly, you mentioned the earnest money. Of course this is like I'm putting not a down payment, but I'm pledging this money that I'm actually going to close on this property. So you give it a sizable chunk of earnings. I mean, I just put an offer on a condo, I. And got it accepted and it was like eight hundred grand and only put ten thousand earnest money, I mean I've oftentimes done one dollar and this money, why did you do fifty thousand earnest money?

What does that tell the seller to somebody with a lot of investment properties?

It means that I'm serious. If it's a seller that maybe inherited the house and doesn't understand the business very well, which is entirely possible. It just means that in their mind, I'm hoping they think they're going to get that money if I back out in fifty thousand dollars looks very attractive. I found out later there was actually a cash offer of six hundred thousand dollars and they took mine over there without going through the escalation process.

Very, very cool. All right, then. The last little thing here, the last little note I want to make sure we unpack was contingencies. You said, well, I've got these inspection conditions for you. The reason you're OK doing that, the escalation clause and the 50 K is because you could still back out if you needed to. And so a lot of people are always worried, like, well, if I put all this money in, what if I don't like the property or what have I?

OK, well, you get that's why we have inspection contingencies. That's what people understand when you listen to this, that like there's such a great strategy to what you just did. You fired an offer of quick you found some hidden value that a lot of people that weren't recognizing you offered a higher bonus money than normal.

You put the escalation clause in there. And yet none of that was more risky than anybody else. But it sure looks a whole lot better to the seller. And so it's just such a great picture of once you kind of start knowing what you're do in real estate, it gets easier. It gets better. You figure out these little tactics and strategies so you can find properties on the MLS still today, even in a competitive market. So nice job on that one.

So we did.

What kind of property is it? How did you find it went over that? We did. How much was it? Let's go negotiate what we did. How do you negotiate it? So really, how did you fund it? What was your loan like then?

20 percent down, you said so it was 20 percent down. This was my last loan with Wells Fargo. Since then, I've gone to Guild Mortgage. When I'm shopping for lenders, I treat lenders like a contractor and you get pre-approved, turn them out so you know how much you can borrow and you get an interest rate. I go to at least three lenders and I get they're offered interest rate and their fees in writing. And I show all of the lenders what the others are offering because my Wells Fargo lender educated me.

She said I can't go to my boss and say, I really like Deon. I want to give him a lower interest rate. She said, if you bring me something in writing, I could take that to my boss and he can say, we want to keep the business, let's beat it. So every time so far, I've gotten a lender's best, lowest interest rate that they can do is lowered by negotiating, by showing other lenders offers.

And the strongest negotiating tool with the property was the professional inspection report. If I called the listing agent said, well, it's going to need a roof and it needs a deck. I'm just talking. But if I take professional inspection report, I paid eleven hundred and fifty dollars for one and I sent specific pages from it, not the whole thing. I wasn't going to give them my eleven hundred fifty dollars, but I took pages saying here's the missing parts of the roof that need work.

Here's the parts of the deck. There's a door with a hole punched in it. And I sent an email saying I estimate about thirty thousand dollars worth of work. I would like to take twenty thousand dollars off of the price. And the seller did exactly what I thought he would. They came back and they said, well, we recognize it needs some work. We'll take ten thousand dollars off. So my eleven hundred and fifty dollars saved me ten thousand dollars, which was immediately since I'm doing twenty percent down two thousand dollars off my down payment.

So I got my money back from the inspection immediately and then saved me eight thousand dollars over thirty years. So it saved me quite a bit more than that.

Hey, real quick, one more thing, because I use the exact same strategy all the time. Most people split. The difference is very common. So I just played that knowing that they're gonna split the difference. I'll ask for more than what I'm actually doing. Well, more like added piece to supercharge a little bit. This is in any negotiation with anything. I love to scare people with a significantly higher amount. First to price anchor the actual amount I ask for, which then will make them more likely to just split the difference and have it.

Here's the example. I would love it like a bit. It's like, hey, actually there's going to be sixty thousand dollars to fix this thing. Now I know sixty thousand sounds like a lot blah blah blah. We're not, I'm not asking you for that. I'm just looking for like thirty. I think I get it done a lot cheaper than now. They start with sixty in their mind. Their gut things are going to lose this deal and then thirty sounds a lot better so or twenty.

So then when they split the difference at ten it's oh my gosh, we got by with such a great deal. And I think I got to do that with like negotiation, real estate negotiation of pretty much anything. I'll anchor it to a much higher price.

Actually got that from Monopoly. Whenever I play Monopoly people, I will always do things like offer them some crazy low number, like, hey, I'll give you one hundred dollars for that property that gets Park Place. I paid more than that. I'm like one hundred bucks right now and no way. I'm like, fine, five hundred. I got sucker six and I'm like fine. And they'll take six hundred people. All it's just psychologist. How people react is.

So anyway there's a really funny story of a girl who wrote her parents from college and said, Mom and dad, I'm sorry to tell you my life is took a turn to the left. I met a guy in a biker gang. I'm pregnant. I'm dropping out of college. He's moving me to a third world country. I'm not going to see you anymore. If you could send me somebody to help take care of the kid, I would really appreciate it because of this, like, horrible thing.

And then and she goes, actually, I'm just kidding. But I did get a two point one GPA and I'd like a thousand dollars in my account for some food. I love you guys. And it's an example of what you just said. You set this baseline at a horrible place in. So now the person who you're asking for something from feels like they're winning by giving you less. Yeah, I can pretty much guarantee that you guys have had a very similar conversation to this a couple of times on the show.

And subconsciously, that's how I structured this by talking about thirty thousand saying I want twenty thousand and being happy with ten thousand. So thanks for making me ten thousand dollars. There you go.

You can write me a check personally if you would like. Yeah. To I'll come over and take you out to monkeypox.

How do I know that you're going to have to take a loan to take them to monkeypox so your guild markets get ready for that.

All right, next question. What did you do with it? Was it a flip? Was it a rental house? So I've only done by Anholt. I've never done any flipping or wholesaling. So this is a house that I offered cash for keys to the tenant that had to move in. A tip for cash for keys is I always offer that on the deposit of wherever they're moving to. So there's no chance that the tenant can stay and keep my money.

That's a good tip. And I moved in. Can you explain cash for keys for those who may not know what that is? So a lot of tenants and this is kind of generalizing live in a kind of fear of the property being sold or the landlord not renewing the lease or the rent being raised where they can't afford it. So most times it's because they don't have the security and deposit. And first and last month's saved up for a move.

So whenever I've had to displace a tenant because I do a house, heck, I will offer cash for keys. So you're saying I'm going to pay you a certain amount of money because you say this part, but it's a lot easier for me to just give you this money than to go through an eviction or two, all the other options. So you're paying the tenant to make it easier for them to move. And that's why I do the deposit thing, because that's one of the expenses they're going to have associated with moving.

Yeah, that's really smart. I do the cash for keys quite often to avoid eviction that rather pay a tenant because I'd rather pay attention than a lawyer I've done it for. Yeah. When I bought a property and I just I want to remodel a unit will pay attention to leave. I'm a big fan of that and I don't to be a ton of money. It just, it helps ease the pain. I will also do use the same anchoring strategy with things like that.

You start with like hey man, like you got to get out. If it's a bad situation where it's a bad tenant who's just being a jerk, you can start by offering you like, hey, man, like I can give you like one hundred bucks to get out, but like, we really wanted to be more helpful. So, you know, how about a thousand one hundred dollars are like, oh, that's not very much. But they're debating in their head when they get to the part of the letter or if it were in person talking worth the thousand of them.

That seems way better, though, anyway. All right. So you bought this the House Hacket, so you moved into the property.

What was the outcome? I mean, you still live there right now, or did you move on like what's this property like right now?

Still there now. Closed January six. Twenty twenty. So I've had a little over a year, so I'm looking at doing my next house back in Arizona. So I'm going to get paid to Snowbird because I'm profiting pure cash flow at the fourplex. Seventeen hundred dollars a month.

What did you learn from that? Because that's awesome. So I learned two things. The first one is the power of the income snowball. I had one hundred and forty one thousand dollars saved up the down payment, the closing costs, the immediate repairs, the cash for keys cost me one hundred and forty one thousand dollars. I had two hundred dollars in my bank account on January six last year and pour me from 10 years ago would have been terrified.

But backup plans have backup plans. So contingencies I had seventeen thousand dollars in credit cards untapped. I have a retirement account I can tap if I need to have a paid off house I can tap into. But the income snowball affected me over years or every two years by house gets faster and faster. But here's the power of the income snowball. I collected the rents for January from title, so I don't have a mortgage payment and I get the rents from the fourplex.

There's no mortgage payment in February because you wait 30 days past the next first. So I collect the rent from February. So from just the fourplex, I have over ten thousand dollars in my bank account. One month later from when I was down to two hundred, not counting. I have a two job, not counting. I have rent coming in from other rental properties. And the second thing I learned was something I didn't expect and should have saw coming.

But I got to rent out the unit in the duplex. The first house back lowers or reduces your housing costs. I've never heard anybody talk about the second house. Whenever you buy another property, you add the total number of units. I'm buying a fourplex. I'm only going to rent out three. But I also have the duplex. So my cash flow on the duplex went from paying three hundred to now profiting eight hundred in pure cash flow. So just because I was willing to move about seven miles across town, I mean a little bit more, my income changed by twenty five hundred dollars a month and I'm not doing any more work.

I called two guys in a truck, paid three hundred dollars and went to work and when I came home all my stuff was at the new place, the lazy. I love it. So that's a good deal. Deep dive. And I love how this is a perfect picture of what's possible when you're just thinking like, how can I how how can I get this done better? You can even do a five percent or three and a half percent down.

You just save the money from previous cash flow and deals about the next one is just snowballing on some dude. I love it. Amazing story. So let me just ask you two more questions before the famous for number one. Where are you headed next? What do you see the next few years of your life look like? And then is there anything you, our audience could bring value to you like anything you're looking for right now that our audience could deliver to you to bring you value?

So where I'm headed next is if anybody's in or around Phoenix, I'm looking for a fourplex. I'd like to find one that also cash flows even with me living there so I can get paid to snowboard. I've been looking, but not really looking yet. So I'm just now at the stage where I'm ready to the next few years, I hope to be the same. I get to work at a truck driving school where I get to play in a truck like it's a go cart.

My idea that grew the company was founding a nonprofit that does job placement assistance for non driving jobs. All the jobs in transportation like our I.T. operations, forklift mechanic, all those other positions. So we help people find those jobs for free. So if anybody's looking for work in jobs for free will help you find those local jobs to where you're living at no charge. It's a five twenty three. So there's no fee at all. We don't charge the company or you.

How did that grow the trucking business?

So truck driving and moment of transparency. Don't hate me. Transportation sucks. What you're supposed to do is get your CDL drive over the road for two years, making six to ten dollars an hour. You're gone all the time and in two years you get a good paying local jobs. Local jobs pay seventy eighty thousand dollars a year a year and your home in your own bed every night. My idea was if we get people non driving jobs, we will develop relationships with the local trucking companies and then those local trucking companies will hire out of the school.

So when somebody goes to a truck driving school and they go to work over the road, they tell their friends they got a job. The school did what they were supposed to do. When they go through a school like ours and they get a local driving job right out of school without having to go over the road, they drag in five of their friends. So we went from three hundred students a year to fifteen hundred students a year and it just snowballs the more and more local trucking companies higher out of the school.

But the thing that people can bring value to me is one of the things I want to say that's really awesome about the bigger pockets community. I started doing the YouTube videos and I expected I honestly expected 50 percent likes and 50 percent dislikes. I don't invest in stocks, so I figured stock investors wouldn't like me. I do small multifamily. So commercial wouldn't like me. I house so people who can't house wouldn't like me and I just expected all of these.

I was fifteen videos in when I finally just went in and gave myself a downvote so I could finally have one because nobody had given me any. This community is open to. There are more than your way of reaching financial independence and something like when you're listening to bigger pockets money and there's a guy who runs laundromat that helped me grow my trucking school, things I picked up from that episode where relatable. So I would appreciate some honest feedback. How the YouTube thing happened was I started talking to the Facebook groups and I do this long.

I try to put motivational posts to give back to bigger pockets because I'm actually financially free based on this information. So I wanted to give back and the bigger pockets forums are great, but there's people there with mountains of information and they'll answer questions really quick. I found a niche on Facebook where there really wasn't a lot of people jumping in. Kevin Kristiansen that was just on the real estate rookie show him. And I try to answer questions and help people as much as possible.

But at the end of mine, I always say thanks for coming to my Deon talk because they're pretty long. If you could check out Deon, talk Financial Freedom on YouTube and give me some feedback. Tell me what I'm doing wrong. Tell me anything. I would appreciate that. Well, awesome, well, with that said, let's head over to the last segment of the show, it's time for our famous for this is the part of the show where we ask the same four questions every guest every week or in a fire them at you right now.

But before we do, let's hear what's going on this week around the Bigger Pockets podcast network.

Hey, what's up, guys? It's Tony from the Real Estate Rookie Show. And this week we had Maria Acosta on the podcast and she talked about so many different things I know you're going to love. She talks about subject to financing, how she's hiring and training Vas to help us grow her business and how she turned a roach infested duplex into a twelve hundred dollar per month profit. All right.

Let's get into the famous for question number one down either all time favorite or current favorite real estate related book.

So I have all of the bigger pocket's books on Audible and a couple of paperbacks I've given away set for life probably 20 times. But I'm trying to bring new information. And I would have to say my favorite is the book one rental at a time. Just because it is really simple, it's super easy to duplicate and you don't need a special strategy just slow and steady. Within ten years, your entire life has changed.

Right. What about your favorite business book? Same thing. Shameless plug for all the bigger pocket books, especially your book. David Greene that just came out, sold the old, which everybody says and I've heard you say it on the show, that is not for agents. That is helping me interact with because I use three different agents on a large scale.

So I suggest a lot of people get that. But my favorite business book is by a guy named Andrew Ballard, and it has made me better at running a business and it has made me a really good property owner with tenants. It is called Your Opinion Doesn't Matter, because when you're buying a rental property, a lot of us think, what kind of countertops do I want? Where do I want the kitchen window facing and how much parking do I want?

And it doesn't matter. You're not renting the place your tenants are. And that's really helped me to develop this tool that I have that has helped me. And I wanted to mention this at the start of the episode, but this is a strategy that I've used that gets tenants to ask for rent increases and ask for longer leases. So whenever I buy a property, no, I'll break this down, because this is this is one of my favorite things.

I have a video on it. But here's the secret to this. I prefer to buy already occupied properties because I'm super lazy and tenant turnover and fixing things takes time and energy and money. And tenants are afraid that they're living in a property that's going to be sold in the rent, is going to be raised to a point where they can't handle it. So what I do is I make a thing. I called the binder. I take a three ring binder.

The first page is a picture of the property with the amount that I paid because three hundred thousand dollars or five hundred and ninety thousand dollars is a huge amount to a tenant. And then the next pay a price increase. By the way, I'm price anchoring. Exactly. I'm using your strategy. The next page is a picture of a map from Rent ORM with all of the rentals that are similar in the area and you see the same number of bedrooms if you can, and then each page after that is page after page of those rentals and what they're going for.

Because traditionally, well, not traditionally, but usually when a property is for sale, an owner is just tired of being a landlord and they're selling it because the rents are low and they want to go through the process of raising it. So the tenants have been getting a good deal and they're usually far below market. So when they see like a duplex that I did the area rents were fourteen and fifteen hundred dollars. The rents were eight and nine hundred dollars when I purchased it.

So I show the binder, I show how much I paid, I show what the area averages are a fortune and fifteen hundred and I slide the binder over to the tenants because most tenants have never been involved in the decision making process of what their rent is going to be. And I just ask them, what do you think is fair? Because I'm not telling them the rents are going up. I'm not telling them anything. I'm saying this is what I paid.

Here's what the area is. You know what you're paying. What do you think is fair? And one hundred percent of the time so far, almost every single tenant has asked for the rent to go up just below the area average because they know that as a business, my best option would probably be to kick them out, fix the place up and rent it out at the highest amount that I can get. But I'm lazy. So the eight and nine hundred are both now paying thirteen and thirteen fifty.

They requested that I and I like that it's their idea. But I said, you know, if we do a two year lease, I can't raise the rent next year. And so they said, what can we do? A two year lease, which is a great idea. So I don't even have to think next year of renewing a lease or finding a tenant because of the lazy. And the rent is much closer to where I want it.

And my ten percent return would have been around a thousand or eleven hundred a month. So to get them to request it to go to where it is, I've used the binder over and over and over and hopefully at least that made it worth everyone's time. Who watch this episode to this point. That's awesome, man. Next question. What are some of your hobbies of three? I'm loving making the YouTube videos. I like to scuba dive. Me and my brother have gone to Columbia and Thailand and the first time in my life I'm taking a month every year and just going and doing something because I've never taken vacations and my kids are older now.

So once I graduated college and they've moved out and my third hobby, which I swear I do all the time, I want to say it's real estate looking at deals, but that's pretty much it. Yeah, like the scuba dive. I my last dives were with whale sharks. Thailand, so we had thirty five foot whale sharks moving the whole water that we were in as they went by. I thought it was pretty awesome. That is and I guess my third hobby is I like to help people reach financial independence.

Feel free. Anybody listening? Reach out. I like to find out where you're at, what your goal is, and figure out the first steps to get you going that way. That's cool, man.

I love it. Well, final question from me. What do you think separates successful real estate investors from those who give up, fail or never get started? You kind of answered it earlier, but we'll see what else you got to say.

Yeah, it really comes down to getting started. People talk about analysis, paralysis. So instead of boiling the whole ocean all at one time, cook your panel water, figure out what's the first step. What do you need to learn first? Is it how to save? Is it how to improve your credit? And once you have those done, it makes sense to go on to the next step. Or that effort might have been for nothing.

There you go. Love it, man. This has been phenomenal. Really, really good. I think people are going to have their lives changed by this episode. And then I would say following you, they should and go check out all your YouTube content, everything else. I'll let David ask the final question about that. Thank you. Branded Diane, tell us, where can people find out more about you?

Well, the bigger pockets Facebook groups are probably one of the best ways, but I'm close to five thousand friends. So if you send a friend invite, please say something like real estate. So I know you're not a fake account. I answer every single question or comment on YouTube. That's probably the best way to find me. Yeah, that would do that. Very cool. All right, man.

Well, with that said, I guess we'll get you out of here. Thank you so much for being part of the show today. It's been an honor to have you on.

So thank you, Yurok. Thank you. Awesome job, Diane. This is David Greene for Brandon.

The aroma of Tacoma Turner sizing up.

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