February 23, 2024

Too busy to buy rental properties? After this episode, you won’t have any more excuses. Brandon and Dani Tilson started building their rental property portfolio just under a year and a half ago and have already acquired six properties while working schedules that would make most people faint. We’re not talking about one job or two; we’re talking about working three jobs while raising a family and self-managing a rental portfolio. So, if you’re working less than eighty hours a week, this is your sign to get started! 

After growing up with a struggling single mother, Brandon vowed that his children should never have to worry like he did. After learning about real estate, Brandon was ready to invest, but his wife, Dani, was not. Cash in the bank was a luxury Dani wanted to hold on to, but after many long conversations, the couple agreed to try their hand at rental properties. Their first deal didn’t go as planned, but it helped them build momentum and turn a small sum into a cash-flowing rental portfolio.

In this episode, you’ll hear exactly how Brandon and Dani scaled to six units in just a year and a half, the property management software they use to run their portfolio painlessly, and how to get your spouse on the real estate investing bandwagon. Brandon and Dani are set to retire in just five years, and if you tune in, you can too!

Ashley:
This is Real Estate Rookie episode 293.

Brandon:
We thought we were handymen and women and we were going to go in there and do all the work ourselves, and we’re going to put in new flooring and new cabinets. I realized growing up with a single mom, I was not necessarily taught those skills. We had all these false hopes and ideas, and I’m like, you know what? This isn’t worth it. I do not have the skills to do this, but I do have the skills to continue building my team and put people in place who can do this for me.

Ashley:
My name is Ashley Kehr and I’m here with my co-host, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie podcast, where every week, twice a week, we give you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. As always, I’m really excited for this episode because we got a husband and wife duo. It’s been a while since we had the whole husband and wife dynamic. I think our last one was with Devana and Reid, where they talked about sober living. I know that episode did phenomenally well. Today, we’ve got Brandon and Dani and I feel like this episode will do just as good as Devana and Reid did.

Ashley:
Yeah. There’s a common theme that we start to notice by the end of the episode is that at night, they’re not spending their time binging Netflix or going to sleep or going out drinking. They put their kids together and they are having discussions. They are talking about their business. They are exceptional communicators, it appears from this episode at least. They talk about what their process is for their business meetings, what they do throughout the day to create an agenda, and then what they talk about at night. They said that this is just a priority to them. I think the skill sets that they have implemented and the habits can go for you whether you and your significant other are partnering or just they’re supportive and they’re on board where maybe you still need to fill them in and keep those lines of communication, or if you’re not even together and you’re just friends that are becoming business partners. I think there’s a lot of value to take away on partnerships here.

Tony:
I just loved how hard this two hustle. They both work full-time jobs, but Brandon was working three jobs 80 hours a week and they were still able to scale their portfolio to six units in a year and a half, which is crazy.

Ashley:
Yeah, 15 months.

Tony:
Yeah, 15 months, insane. Brandon talks about why and how they were able to overcome the objections of, oh, I’m working a lot, or we have two young kids, or oh, we got to spend time doing this and really just hustle. They also spend a little bit of time talking about the difference between a cash-out refinance and a HELOC, which one they chose and why. I thought that was a really interesting part of the conversation. Then for a brief moment, we also just talk about the identity of a real estate investor. What does it really mean? What are the skills you really need to be considered or to feel like a real estate investor?

Ashley:
Yeah. If you guys are not feeling motivated or inspired, I’m going to tell you this little piece about them is that they just started 15 months ago and in five years, retirement is real for them. Just doing boring old buy and hold rentals.

Tony:
Buy and hold rentals. All right. Let me give a shout-out to someone by the username of Logan Barrera. Logan love to say five-star review on Apple Podcasts. It says, “BiggerPockets is a must for me in the mornings. It’s just part of my routine. Been listening to you guys for a little more than six months now and would really love to start investing in real estate. It’s something I’ve been thinking about for a while now. I got some knowledge, but don’t really know where to start in today’s world.” Logan actually ends his review with a question, and Logan says, “My question is, how can a broke college student start investing in real estate?” Well, Logan, and for all of our other broke college students who are listening, you’ll want to take notes and listen to our next episode, episode 294, where we actually bring on two young real estate investors, one of which was in college, one who’s actually just graduating from high school, and both of those guests used side hustles to fund their real estate business.
So Logan, if you’re interested, check out episode 294 dropping this Saturday and you’ll get the answer. How long have you guys been married?

Dani:
2015. Yeah, we met in 2014, got married in 2015.

Tony:
Do you guys have any kids or just the two of you or?

Dani:
Yeah, we have two. We have a five-year-old and just turned seven-year-old, both little boys, so it’s fun. We take them to all the houses with us and we let them go look at them, and they’re actually getting good at even pointing flaws and stuff out. They’ll be like, “Daddy, the floor is broke.” It’s cool to watch them get involved in it too.

Ashley:
Did you guys start investing after you had kids then?

Dani:
Yes.

Ashley:
Okay. Well, walk us through that.

Brandon:
So just back it up, we met, started dating. We had been only dating 30 days before we moved in. Then we were engaged after about six months, married at a year and a half, and then-

Dani:
Kids a year later.

Brandon:
Yeah. Our first son was born a year later. So everything was just very, very fast. We just knew what we both wanted. The fact that we’re both social workers was incredibly beneficial because we’re able to bounce ideas off each other.

Tony:
Kudos to you guys for 30 days in already knowing that this was the person you wanted to build your life with. I always joke with my wife. We started dating when we were seniors in high school. I told her when we were 17 that I was going to marry her. You just know sometimes. I just love hearing love stories. I’m a sucker for a good love story. But you said both of you guys are social workers. Just for maybe folks that aren’t familiar with exactly what a social worker is, just what does a typical day look like for you, Dani?

Dani:
Well, it starts typically in the office about 8:00 AM. I am in the field around the community probably 90% of my day. So I go into AFC homes, adult foster care homes, private homes and I help support individuals with disabilities, all spectrums, so your schizophrenics or your bipolars and/or those profound IDD like Down syndrome individuals. I teach them and work with them to gain independence so they can live the most quality kind of life that they can. Then I work with them in finding jobs in the community or volunteering in the community. My days, it changes from day to day, moment to moment. You have your 8:00 to 5:00 all planned out and something happens and it’s no longer that. So just living just by moment by moment and he does pretty much the same thing.

Tony:
Yeah.

Ashley:
So when you decided to start real estate investing, was this nighttime hours then? Was it put the kids to bed and we’re going to start looking for deals? Talk about how you were able to integrate working on real estate investing into your busy schedule.

Brandon:
Because from the podcast I learned, I just want to build a team. So we started that throughout the day, me reaching out to different credit unions to find a lender, reaching out to different real estate agents that could meet my needs. Then once we were able to do that, I then was able to use the real estate agent to gain more resources. Once we had all those things in set, then it was just like that after hours when the kids were put to bed of like, okay, these houses are available, what are your thoughts? And again, at the beginning, we were clueless. We had no clue what it cost for rehabs. We had no clue what went into a closing cost. It was just sitting there with the TV on the background, just conversations for hours because we were both scared to make a mistake. Then eventually one day, my realtor at the time just presented us a deal and it was like, okay, let’s go.

Tony:
Brandon, how did you know that you were ready? I think so many people that are in the Rookie community, the BiggerPockets community, they read the books, they listen to the podcast, they watch YouTube videos, but they get stuck in that phase of just eternal education and they never actually pull the trigger. When that agent actually sent you that deal, how did you know that, okay, this is the one that we actually want to pull the trigger on?

Brandon:
For me, real estate is something I wanted to do since I was 18. When I was a senior in high school, real estate was just what I wanted to do, but I had no clue how it worked. At that time, I thought you just buy a house, somebody pays it off and you make some money somehow. So after I had educated myself, with that specific deal, I did the research in the area for what the house would rent for and just ran the numbers. I actually think I read an article that Brandon Turner had wrote about how to run basic numbers. I did a very simple calculation that I still do, handwritten calculations on my numbers to this day, and to me, the numbers just made sense. The ROI made sense and it’s like, okay, this is the chance. Then not only that, but when we refinanced our house, we had plenty of money in reserves if something was to come up.

Ashley:
Before we get into more of your deals, can you tell us why you want to do this? What is driving you guys to talk about real estate at night while the TV’s running in the background? What was that reasoning?

Brandon:
My why is because I grew up with a single mom that was raising three kids by herself with very little support and she was doing the best she could. So for me, this was something that was going to create generational wealth that I can pass down to my kids and my kids can pass down to their kids. Real estate is something that with the appreciation and everything else, it just gets better over time. It doesn’t get worse. I wanted to create something so my kids didn’t have to struggle and their kids didn’t have to struggle.

Tony:
Then Dani, what about for you. Was your why aligned? Was it more so Brandon that initially planted the seed? How did you get integrated into the business?

Dani:
My why was not aligned at all. We can’t even sugarcoat that. I was completely dead against it for a very long time. He had probably been talking to me for maybe a year, maybe a little longer about his desire to do real estate and I was like, no, no, no. To me, it was having to change the mindset of having money in your bank account versus investing. All I could see was the bank account going down and I couldn’t wrap my head around how this was going to make us successful. How is this going to give us financial freedom if we don’t have money in the bank account? So it took a lot of long nighttime conversations and him also sharing the education with me. I had to get into learning about it, running the numbers and diving in with him to understand what we were doing and why this was going to be beneficial before I really agreed to it.
Our first property, I was still very much on the fence. I was supportive, but very much on the fence about what we were doing and why. I just kept telling myself that I’ve trusted him all along, I just got to keep trusting him and to this day, he’ll present a deal and I’m like, [inaudible 00:11:30]. I’m like, “But I trust you, so if you feel it’s a good deal, then we will roll with it.” That’s just how it works for us.

Tony:
Dani, I appreciate the transparency there because I know one of the biggest questions that we get on this podcast is, how do I get my spouse on board? How do I get my spouse to go on this journey with me? You said one word that I think is so critically important. You said, “I trust him and I’ve always trusted him,” and I think that’s the baseline for getting your spouse on board is that the trust between you and your spouse has to be there. If you don’t have that baseline of trust, then there’s nothing that Ashley and I can say on the podcast that’s going to create that trust. That has to start deeper within the relationship. But obviously, Brandon’s done something throughout your time together for you to say, “Okay, when Brandon puts his mind to something, it’s not a brash decision. It’s not him being irrational. It’s because he’s thought about it and it’s because he thinks it’s what’s best for our family.” I just love hearing that from you because I think a lot of people overlook how important trust is.
But something else you mentioned though was the sharing the education. Just from a real standpoint, were you guys just listening to podcasts together? Did Brandon just hand you a book and say, “Go read this?” What did your educational path look like?

Dani:
He started it. He would start talking to me about it and I’m clueless. I have no idea what you’re talking about. So it took me downloading the BiggerPockets app and he had me join some Facebook groups and then I just started reading things that caught my eye or my attention. Then the conversations started from there. Did you see that they posted this or did you see this? Then that would start those conversations. Then I’ll never forget the day he taught me how to run numbers. We were driving and he’s like, “Get your phone out. I’m going to teach you how to do this.” I’m like, “No. I’m not going to be able to do it.” He’s like, “Get your phone out. I’m going to teach you how to do this.” Well, we did and we were driving. I don’t remember where we were driving to, but he did and by the end of it, I was running numbers for him.
I always say it’s our little marriage hobby. We don’t have a lot that we do together because we both work so much, but this has allowed us to find something in common that we enjoy doing and has brought us closer that way, so it’s been cool.

Ashley:
Yeah. I think that’s really awesome that you’ve figured out that piece and thought about it that way instead of like, oh, we just hustle every day. It’s like, you know what? But we get to spend this quality time together and we get to work on a project together. I think it’s awesome that you’ve switched your mindset that way. One thing I did want to ask you, Dani, is what were your finances like before you started investing in real estate? Was this part of you not wanting to do this as you had this life savings that you were afraid of losing? Were you already completely in debt, you didn’t want to take on more debt? Paint that picture for us.

Dani:
Since I’ve met Brandon, we’ve always been very financially sound. He always did way better than I did, that concept of saving money and putting money away. Until I met him, I had never really understood what it meant to be together with someone. I was always single and I always had my own bank account, so a few thousand in the bank account was a big deal to me. As we met and we started working and we started putting money away and buying houses or our first primary house, I seen that balance go up in that savings, so to speak, and I was like, “Oh, I like this.” I like this number getting higher. I like this number getting higher. And he would go in and he’d be like, “All right, we’re going to go pay this off,” and he would literally take it all away and I’m like going to hyperventilate, like what? We just worked so hard to get that bank account up there.
But again, I always seen the dollar amount. I always seen, okay, we have 40,000 in the savings or whatever it is. He see that as what can we pay off so we don’t have that debt? So we had very different financial mindsets when it came to that. He had to understand where I was coming from and I had understand where he was coming from and we’ve had to merge that a little bit and we’ve come to terms with what I’m comfortable with being in the account and what he’s comfortable and making sure we have enough. Again, it goes back to that trusting piece. Like okay, he’s going to take our savings down because he found something, but I’m going to trust him because he promises me that we will get it back up.

Ashley:
Okay, so let’s talk about your first deal then. Brandon, you had touched on it was time. You got the deal and this was the one. Walk us through that process for you as to, did you have a lender you were working with? How were you financing this deal? And Dani, what was your take on where this money was coming from and if you were going into more debt?

Tony:
If I can just ask one question before you get into that, if you also wouldn’t mind, Brandon, just setting the table. What does your portfolio look like today? How many units do you guys have? What’s it a mix of?

Brandon:
We have six single family households ranging from one bed, one bath to three beds, one bath.

Tony:
Okay, awesome.

Brandon:
With the first property, it goes back to me convincing Dani that this is something that we should do. We did a cash-out refinance of our primary residence, which we had paid off. At that time, we had no debt, no student loans. Cars were both paid off so we had zero debt whatsoever. So we did a cash-out refinance and the first property we went into we’re like, okay, we like. It needs a slight rehab. We bought it for 64,000 and this is after I’d already built a team. So I’d already had a team in place. I already had my lender in place. We did a 25% down conventional loan and that’s how we purchased all of our properties. We went in there and we thought that we were handymen and women and we were going to go in there and do all the work ourselves and we’re going to put in new flooring and new cabinets. I realized growing up with a single mom, I was not necessarily taught those skills.
We had all these false hopes and ideas and I got stressed on. You know what? This isn’t worth it. I do not have the skills to do this, but I do have the skills to continue building my team and put people in place who can do this for me. So we found a contractor to come in and basically rehab the kitchen, put gutters on, did some foundation work for vapor barrier. Then later on, we then end up having to replace the windows. So all in all, I think we have about $26,000 into renovating the house. We say it’s a terrible deal because the ARV is probably right around 99. So we bought it for 64, put 26 into it, you’re at 90K. If you got to sell it, by the time you’re closing costs and everything, you’re not making any money. But for us, that was the experience we needed to get started. So that’s probably our favorite house. That’s the house we would probably never sell because it was the start to our journey.

Ashley:
What was the original rehab you guys had estimated and then how did that change when you integrated it now the cost of a contractor to do the work?

Brandon:
The original rehab we had right around between 10,000 to 12,000.

Ashley:
So almost double.

Dani:
Yeah.

Brandon:
Yes.

Ashley:
Okay, yeah. I just wanted to highlight that because even though that could be somebody’s worst case scenario is that, oh, my gosh, I can’t do this. I have to hire someone now. That deal, you’re still saying that it worked out for you because it got you started and you turned that into a rental, correct?

Brandon:
Yeah. And that property currently cash flows at $500 a month.

Ashley:
Yeah, and that’s awesome. That’s amazing. I think some people get stuck in the mindset of it has to be a perfect BRRRR, where when I’m going and refinancing, I have to pull all of my money back out or else the deal didn’t work and that’s not always the case. You can leave some money back into it. So how much money did you guys end up leaving into the deal?

Brandon:
We actually didn’t pull any money out.

Ashley:
Oh, okay.

Brandon:
We just left the money in it because we refinanced our house. We had enough money to continue doing what we wanted to do. We talked about it now maybe pulling the money out of the house, but we’ve never necessarily needed the funds because when we refinanced our house, we pulled out 110K at that point and so we’d only spent about, it was about 38,000 total. So we still had plenty of reserves. And plus because I worked so much, we built up our reserves pretty quickly.

Tony:
I just want to make sure I’m tracking on the timeline of events here. So you guys refinanced your primary residence. You get a little over $100,000 in cold hard cash. You then take that cash and you pay cash for your first investment property and you pay cash for the rehab.

Brandon:
No. We did a conventional loan, so we only had to put down 25% down. So it was about 17,000 for the first property-

Tony:
Got it.

Brandon:
… plus then the cost of the rehab.

Tony:
Got it, got it. Okay. So with the down payment of 25% plus the cost of the rehab, you’re all in for just under 40K is what you’re saying on that first deal?

Brandon:
Exactly.

Tony:
Got you. Got you. Okay. Let me ask you a question because this is something that’s debated quite a bit in the BiggerPockets forums and groups. You had a significant amount of equity in your property. Why choose to get a cash-out refi versus just getting a HELOC? What was your thought process? Did you explore both options?

Brandon:
We did and we had extensive long conversations amongst the two of us on what would be best. Basically it came down to my lender educating me on what would be best. He said the volatility in the market right now, we don’t know what’s going to happen and a HELOC can change the rate after so many years. Our HELOC rate, I want to say was 4.25%, but our cash-out refinance rate was 3.25%. At that low rate, you can’t get much lower than that. So if we can lock in that rate for 30 years and guaranteed to have a hundred plus thousand dollars, I didn’t see any downside to that. We’re like, worst case we can’t find a house, we don’t like this, we hold onto this money for a while, we eventually pay the house back and we’ve lost a few grand.

Tony:
Interesting. Just for folks who don’t understand the difference between a HELOC and a cash-out refinance, would you guys mind describing what the differences are?

Brandon:
Yeah. HELOC is essentially a glorified credit card that you can use the money whenever you want and you don’t have to pay on it unless you’ve used some of it, where a cash-out refinance, they basically give you all the money up front and you start paying interest on that amount right away.

Tony:
And with the refinance, you’re essentially either replacing your existing mortgage or in your situation, you’re implementing a first mortgage and that’s basically your new house payments. You’re replacing one set of debt with a new one. But I love the thought process that you guys have around where I’m like, which one makes the most sense in our unique situation. The benefit with a cash-out refi is that oftentimes, you’re able to tap into a little bit more equity. I guess it might depend. I don’t know. I’ve heard some people going pretty high on HELOCs also, but a lot of times, you can get a little bit more equity when you cash-out refi or definitely when you sell.

Ashley:
There’s also the option to do both as to do a cash-out refinance for some of it and then do the HELOC on another portion of it where you’re going to the bank and getting the same at the same time. Maybe if you’re in a situation where you wanted to do a HELOC because once the rehab is done and you refinance whatever you want to pay off that HELOC because you can’t afford to keep making another payment, well, if you got your mortgage payment, when you do the cash-out to refinance something, you can now continuously afford to pay and continuously reuse that money even if it’s just sitting and you don’t have it working on a deal at that moment. But you can also break it out and do both of those at the same time as do part of the cash-out refinance and then the HELOC too on the property.

Tony:
Brandon, you mentioned that you weren’t a very handy guy. I’m the same way. I can do basic things around the property, but I’m not doing plumbing. I’m probably not going to lay down any flooring, tiling. Those aren’t my things that I’m good at. When I first started, it was this identity where I didn’t feel like I was an actual real estate investor because I didn’t know how to do those things. I felt like if I can’t swap out a toilet then I’m not a real investor. I had to remind myself that the people that are investing at the highest level, not a single one of them are changing toilets or laying down flooring or laying down tile. They’re focused on bigger picture things like, how do I secure my debt? How do I find the right deals? How do I put these deals together? How do I raise the capital that I need for my real estate investing?
For all of our rookies that are listening, if you feel like you’re also struggling with that identity piece because you aren’t super handy, I’m a great example. Brandon and Dani are great examples. Ashley’s kitchen that she did not too long ago was a terrible kitchen and tanked her ARV, so she’s not the best person for that either. I think it’s just something we got to get over as real estate investors. I guess just one last question on that same thread there. At what point did you realize you needed to bring in a contractor for that first deal? Was it you guys tried to do some of this work yourself and you’re like, man, we are not cut out for this or were you guys arguing with each other while trying to lay flooring? What was it?

Brandon:
Yes, yes.

Dani:
All of the above.

Brandon:
Yes. Dani had gone to the store and picked up the flooring and we had it back at the house and she was doing cleaning. Because this house was a previous rental from someone who owned it that was out of state and didn’t do a very good job of taking care of it. So Dani came in to do a lot of the cleaning and then I was going to do the maintenance stuff and fix it up. About 20 minutes into it, I was incredibly frustrated. I felt like a failure. I felt like maybe real estate isn’t for me. All these negative intrusive thoughts started going through my head about how I can’t be successful if I can’t do these things. So we came home that night and just made a new game plan. Again, kids went to bed, let’s have a conversation. How can we do this?
We had just met with a contractor, I want to say about a week prior to that, that was going to come and do the bathroom in our primary residence. We shot him a text message the next day and he is like, “Oh, yeah. Yeah, I could do that.” So we actually took the slot for our bathroom in our primary residence and gave it to our rental property. We didn’t have to wait a long duration because we’d already had this slot reserved for our bathroom. So we ended up just pushing our bathroom back. So we’re lucky in that aspect. That was just the moment of, you know what? I can do this, but I’m just going to do it different than other people.

Ashley:
That reminds me of [inaudible 00:26:46] saying, the shoemaker’s kids never have shoes because he is too busy making other people’s shoes. It’s like you gave up your own bathroom remodel for your rental property to have a bathroom in it. I think that’s a very common thing that happens where investors start to put their properties in front of their own personal preferences or things that they may want and that’s what actually makes them excel and gets ahead because they do put their properties a priority compared to maybe their primary residence. Tony, I know we’ve talked about this before, but I still have not gone in, bought a dishwasher for my primary residence. I think we’re going on maybe a year where I don’t have a working dishwasher.

Tony:
We’ve been at our house for over four years and our mattress in our master bedroom is still sitting on the floor because we haven’t bought a bed for him yet.

Ashley:
But yet you order the beautiful furniture every-

Tony:
All the time.

Ashley:
… single day.

Tony:
Yeah. All the time.

Ashley:
So yeah, I think that’s great that you guys are already in that mindset of right now, we’re sacrificing the weight of our bathroom to be done to get this property done. How did it work out with the contractor? Did everything go great? Do you have maybe some lessons learned? That’s a huge thing even Tony and I love to learn about still is managing contractors, managing rehabs. What were some things you guys learned from the experience?

Brandon:
Actually, it worked out perfect. We had no problems with our contractor. They showed up, did the job. We had zero problems with them.

Ashley:
Tony is turning green right now with jealousy.

Brandon:
We’re a small tight-knit community here. If you just get a bad name for yourself, it goes fast in this community. The two different contractors I’ve used for projects, I’ve never had a single issue with any of them. I don’t even think I’ve actually had a contract written up. They come in, give me an estimate. We give them half of it upfront and then half when they finish.

Tony:
So what city are you guys in? I don’t know if we touched on this yet.

Brandon:
We live in Breckenridge, Michigan, but five of our properties are in Alma, Michigan and then the other one is in Ithaca, Michigan. It’s all within a 20-minute drive from our house.

Tony:
So how did you guys find this contractor that did so phenomenally well for you?

Dani:
Well, I actually used Facebook, used social media and I put out recommendations for contractors. I had a girl that I worked with and give me the name of the guy and his business because he had previously built a house for her. She’s like, “He’s really great. Reach out.” So we reached out and it’s been great.

Tony:
Yeah. Kudos to you guys for finding an A star rockstar player that the first time [inaudible 00:29:40] because finding a contractor is one of the hardest things to do. And honestly, what Ash and I usually say is that you almost never want to give them half upfront, especially if it’s your first time working with them because we’ve heard so many horror stories from other guests where they give half up front and they never hear from the contractor again. They skip town. So typically, we try and put our payments, the bigger payments towards the back as work is getting close to the end. But if you guys got a rockstar, I guess keep using them as much as you can. That’s amazing.

Ashley:
Before we go on to your second deal, let’s go on to look back at other lessons learned. Maybe the rehab went great for you. Is there anything else where you’re like, “Okay, so we’ve taken this first property. It didn’t turn out exactly how we wanted it to. This is what we’re doing,” different going into the next one?

Brandon:
I think it was just more having a better understanding. Then by that time, I had more of a chance to continue educating myself, reading different books, reading more forums. The Rookie Real Estate forum on Facebook is great because you can post right away to ask questions. So we just did that. We would post questions and then you’d get 15, 20 replies within a day. I think that was the biggest thing that probably helped us the most was the continuing education. We figured out we want to focus our primary investing in Alma because it’s supported by the college, it’s supported by a hospital. It has a Walmart and there’s a correlation with towns that have Walmart with appreciations. So just several different things that we just had to focus on about this is where we want to do, and the rents are essentially higher there. We had scoured Craigslist, Facebook Marketplace, apartments.com and just different things like that to find out what rents were in the area. We found out that there, they had the highest rents and this appeared to be the lowest time to fill a vacancy.

Dani:
The other thing that we really learned to start paying attention to as we started looking at houses were those bigger-ticket items, so going in and what were going to be those immediate big-ticket items that we may have to replace that could potentially cut into our finances. We walk in to a house and go, “Oh, the floor needs to be replaced.” That’s not a big deal. However, the roof is going to need to be replaced and we’re looking at a significant a lot more money. So we were also educate ourselves on what’s important and what’s not. Like in our first property, I remember freaking out about underneath the bathroom sink because it was so dirty. Now it’s like that’s no big deal. It comes with that as you go. Now, I don’t even look underneath the sinks. I don’t even care. It is what it is now. Now, it’s the roofs and the foundation and the windows and things like that that are a little bit more important. So that’s the one big takeaway that I have gotten as we go in from our first property to where we are now.

Tony:
Can I ask, so are you guys self-managing that first unit? Because you said your cash on about 400 or 500 bucks a month. Is that with or without property management?

Brandon:
That’s without.

Tony:
Okay.

Brandon:
In the beginning, I was property managing on top of working all my jobs. One day I came home, had a nervous breakdown and said I can’t continue doing all this. Dani stepped right up and said, “Hey, I will take over all the property management.” One of the best things we found was Rent Ready. It is amazing.

Ashley:
Keep talking about them. They’re really a good sponsor of ours, so go ahead, hype them up.

Brandon:
No. I just referred a friend to it and actually, you get a hundred dollars when you refer someone to them.

Tony:
Yeah.

Brandon:
So I just got that. Rent Ready has just saved us so much because it screens the tenant. They request maintenances. They can pay on there. We have to do very little with that. Once we actually found that the management of the property, it actually became pretty easy.

Ashley:
What are some advantages of using property management software as to why do you think it’s easier when you have found software that you can use? Just mention some of the features or benefits that you guys have found.

Brandon:
For us, the big thing was we never wanted to pick the wrong tenant that’s going to destroy our property. With Rent Ready, it essentially screens the tenant for you. It gives you a credit score, a criminal history, and a background check. The tenant pays the fee for Rent Ready so it’s essentially all done for free on our behalf. They do the screen. Then if the screen goes well, then you can approve it right there. They can upload documents that you need such as ID, pay stubs, emergency contacts, phone numbers. Any additional documentation you need, it’s all in a one central place. Then the one thing I like the most is that tenants have a chaotic schedule. They never know what’s going on, but they can pay rent on the first at 11:59 and still be paid in the first. It gives them more freedom to pay from their phone instead of having to take it and write a check and mail it out and then hopefully it shows up. It makes their lives easier and it makes our lives easier.
They can also take videos and photos of things that need to be repaired, upload it to the site, and then that comes directly to us. Then when we go to a plumber or whoever we’re using to fix the problem, we can say, “Hey, this is what’s going on.”

Ashley:
I think those are great key features that you highlighted, Brandon. I 100% agree that getting property management software, it’s super affordable, especially Rent Ready too. But having that can literally change how passive you are or active you are as a property manager. If there’s anyone that’s considering to self-manage, I highly recommend checking out some kind of property management software or switching and implementing it into your business

Brandon:
At the end of the year, they also will send you a 1099 for each property for tax purposes.

Ashley:
Yeah, that’s another great thing too is all of the bookkeeping, the tax prep, the record keeping and everything too that you can do right inside property management software.

Tony:
Before we go on, I just want to ask one question because Brandon, you mentioned this, you said that you had a mental breakdown because of all of your jobs. How many jobs were you working? Just give us a sense of what all was going on in your W-2 side.

Brandon:
Right now, I’m a full-time case manager in Saginaw and that’s 40 hours. I work for what’s called Assertive Community Treatment, which is the most intense case management program that exists. Everybody in our caseload is either bipolar, schizophrenic, or major depressive disorder, and they’ve all been inpatients several times. We see them anywhere from two to five times a week. Then I carry a partial caseload, so a part-time caseload in their case management program. I do that about another 15 to 20 hours a week. Then I also work at Covenant ER in Saginaw and I screen people for crisis nights and weekends. Then for our struggles finding a real estate agent that could meet our needs because my schedule was so hectic because I worked so many hours, if I want to see a house, you need to work around my schedule and I couldn’t really find a realtor that could do that. It is unfair to have that expectation to them of like, I’m available now, you need to be available. So I actually went and got my real estate license-

Tony:
Wow.

Brandon:
… and so now I can write all my own deals and we can go see a property when we want to see it. I don’t have to plan ahead. So technically, I was doing those four plus I was managing all the properties and like I said, it became too much. I came home one night and we told the kids that they could play PlayStation and we went and closed ourself in the bedrooms and we just sat down and just figured out all of our finances for the last six months, averaged out what our expenses were, averaged out what we brought home with the rentals and our W-2s and we’re like, where can we cut back or what can we do? It was at that point that she took over as the full-time property manager. She contacted all the tenants within the next week. She’s the property manager and I like to say I’m the asset manager so I can focus on all the bigger picture stuff and I don’t have to deal with the day-to-day stuff that just takes up my time that I don’t necessarily have time for.

Tony:
Brandon, first, kudos to you, man, for just busting your hump and making all those sacrifices to bring some more cash flow in. But if I’m adding all that up, you got 40 hours here, 15 hours here, 15 hours there, it’s like a 70, 80-hour work week every single week. I think it’s such an important thing to call out because there are tons of people who are listening to this podcast who are working 40 hours a week, maybe even less, and are still claiming that they don’t have time to start investing in real estate. With you working 80 hours a week, Dani, you working at least another 40 hours a week, how were you guys able to find the time to still build your real estate portfolio? Why didn’t the excuse of, oh, I work too much, or we have two kids, or we still got to make time for each other, why do none of those other excuses stop you from getting started and building your portfolio?

Brandon:
For me, a lot of it was the support of Dani. Everybody asked me, how do you do what you do and not be stressed out? And I said it’s my wife. She’s my biggest fan. She’s my biggest support. When I’m having a bad day or even a bad situation at work, she’s the first person I call. So it’s just knowing that yeah, we’re overwhelmed, yes, we’re stressed out, but we always have each other at the end of the day. Then it’s just about figuring out how you can do things to basically combine tasks. I had bought weight equipment to put in my basement, so I’m not going to the gym anymore so I can spend time with my children in between sets of working out, and then giving tasks to each other. Like Dani, she cook or she makes my lunch every single morning for work. That’s something I don’t have to worry about doing. So she does all the little things where I can focus on our business and making more money to grow our business.

Ashley:
We talk about that a lot for business partners, is that give and take as to whose responsibilities are what as team members and making sure that if one person is carrying the weight on some things or maybe doing something that’s supposed to be your responsibility, that it’s not like, oh, I’m not doing that, that’s not my job. Or Brandon, I’m not making your lunch. You can feed yourself. It’s like those things like that too, they can go together in partnerships, in all kinds of different relationships, whether it’s business or personal as to sometimes if Brandon is stressed out and has a lot going on that there may be things that Dani picks up and takes care of even if it’s not her responsibility. I think in all types of partnerships, that is such a big thing you have to wrap your head around is that you can’t nitpick as to what’s fair, what’s not fair, as to who’s doing more this month because maybe it’s next month where you can’t pick up as much as the slack.
So I think that’s a big takeaway from you guys sharing right there. One more thing before we go into our segments that I want to ask about this piece is it seems to me that at a lot of times at night, you guys are having basically alignment meetings where you guys are sitting down, you’re talking about where you want to go, what your goals are, what’s going on in the business. How do you guys stay focused on doing that instead of binging Netflix or as Brandon Turner used to say, watching The Bachelor. What’s some advice can you give the rest of us as to like, here’s how we stay motivated so that at night, we put the kids to bed and we’re building our business and talking about it and having those discussions?

Brandon:
I feel like for me, a lot of it’s like pre-planned throughout the day. It might be her sending me a property or me sending her a property or hey, this is a list of these three things we need to talk about later. It’s like we’ll plan it throughout the day in between our appointments at work and so we have it set in place of like these are the topics we need to respond.

Ashley:
Almost like in an agenda?

Brandon:
Yeah.

Dani:
Yeah. We have a business meeting. We’ve got to don’t forget. This is what we got to do before we can go to bed tonight. And honestly, it’s become the priority. It sounds yeah, relaxing, self-care, all that’s very important, but so is our business and so we try to stick to property management between 9:00 and 5:00. We try not to bug our tenants late, unless it’s an emergency. But there are times like, “Oh, so-and-so texted me today. This is going on. This is what I did.” So it’s bringing the other person up to speed too on maybe what’s been going on. Because as much as I am the property manager, I can honestly say I tag him into situations and things frequently because again, I don’t have all the answers or I am swamped. I’m heading into the hospital, can you please call and make this happen? And he’ll do it on his break.
So again, it’s that give and take and it’s just knowing that we both are not available all the time to do everything, so it’s who can do it in that moment. A lot can happen in our day in those eight hours, 10 hours that we’re away from each other and so it’s bringing everybody up to speed after the kids go to bed on what may have happened in one of the rentals or who we heard from or what the contractor said or whatever that may be.

Ashley:
I always think that’s a great piece because partnerships, whether married or not, they play such an important role and I think communication is really a big part of it. Tony and I just finished writing a book on partnerships, Powered By Partnerships, and it’s coming out this August with BiggerPockets Publishing. We have this pyramid that we put together in one of the key components of that pyramid is communication. I think that’s exactly what you guys are doing every night and even throughout the day is communicating and keeping those lines of communication open and clear and transparent with each other. I think that’s a big reason as to why you guys have grown and scaled so fast. What was the timeframe on that?

Brandon:
We have six units in roughly 15 months.

Ashley:
Amazing. Amazing.

Tony:
Wow.

Ashley:
Let’s go into the Rookie Request Line. If anybody would like to leave us a question and have our guest answer it on the show, you can go to biggerpockets.com/reply. Today’s question is from Zachary. “Hi, my name is Zachary [inaudible 00:45:02]. I’m from Vancouver, Washington. The question that I have today is, what really makes an equity line of credit for doing a HELOC better than refinancing, or how do you decide which is better when you’re trying to make the next move with your property?”

Brandon:
You need a lot more information, I feel like, before I’d feel comfortable truly answering this question because it depends on how much equity you have in the house and what are your goals. Do you just want one or two property or are you trying to scale to where this is going to be your business, this is your retirement plan? I think if you’re trying to scale and this is your retirement plan and you want to get out of the rat race, then I would encourage you in a cash-out refinance because at that point, you’re invested. You have a lump sum of money that you need to spend to reinvest. If not, it’s just going to cost you money. Where with a HELOC, if you can’t find a property, it doesn’t cost you anything. That money’s just sitting there and you don’t have to worry about moving as fast or as quickly.

Tony:
I love that insight, Brandon. I think the only other caveat to that is also think about where your rates are at. If you’re locked into a sub 3% interest rate and you’re trying to refinance today north of 6%, there could be some impacts there. So just also take that into account. But I love your point, Brandon, about committing to it. Yeah, with the HELOC, it’s like, yeah, you can use it, you don’t have to use it. It’s up to you. When you refinance, that payment’s going to be due every 30 days, so you got to make sure you’re putting that money to work. All right, let’s move on to our next segment, which is our Rookie exam. These are the same three questions we ask every single guest. We’ll jump into question number one, which is what is one actionable thing a rookie should do after listening to this episode? Dani, we’ll start with you first.

Dani:
The most important thing would probably find either if you’re going to go on solo, find your team and/or make sure you bring your spouse in and that they’re on board with the plan.

Tony:
Brandon, what about from your perspective?

Brandon:
Yeah. It’s you got to build a team. That’s the biggest component. I had called roughly 25 credit unions to find that first lender and then the agent and then the home inspector, and then a contractor, and then maintenance man. Once you have those five people, you might be lucky and some of those people might be the same, but once you find those five people, you can tackle the world.

Tony:
Brandon, just really quickly, man, you said you called 25 different credit unions. What were you looking for? What were the questions you were asking until you found the one that was like, okay, this is one I want to work with?

Brandon:
The questions, I wanted to know what the interest rate was. I wanted to know what they offered that others didn’t. I wanted to know if I could communicate through text message primarily because sometimes if I’m with a consumer who’s at a doctor’s appointment or shopping, I can respond to a text message, but I can’t take a phone call. So if they’re okay the primary communication is text message, that was the most important to me was the form of communication.

Ashley:
I think you guys already answered this next question, but if there was something else you wanted to mention, what is one tool, software app, or system in your business that you use?

Dani:
We love Rent Ready.

Ashley:
We’ll take that.

Tony:
We’ll jump to our third and final question. Brandon, we’ll start with you on this one, but where do you plan on being in five years?

Brandon:
On a beach somewhere retired. But no, in all seriousness, if we can just continue building at the way we currently are, I could retire in four to five years with the current cashflow that we have. I probably won’t because I feel like I can never settle, but that’s how I imagine it eventually, growing the business enough to where I can buy a bigger apartment complex or something like that to where you can have an on-site property manager, which then relinquishes a lot of the task from us. But right now, I’m really happy in the single family household. There’s not as less stress. You don’t have multiple tenants living at the same place. I don’t know. That sounds like a good answer for right now, but that could change in two months from now. It’s all about what idea presents in front of me or what deal presents in front of us.

Tony:
I just want to call out how amazing of a journey it is that you guys can start investing less than two years ago and already be on the track to financial independence and having the option to leave your jobs in five years or less. That is phenomenal and it just goes to show that when you combine the proven path of building wealth through real estate investing with a crazy strong work ethic and amazing teamwork, the sky’s the limit in terms of what’s possible for you. I really do hope that the two of you achieve that goal because you’ll inspire so many more people through that journey. So yeah, I’m rooting for you guys.

Dani:
Thank you, [inaudible 00:49:53].

Ashley:
Before we wrap up, I want to ask you guys one last question. How does your family feel about your real estate investing? Have they been supportive or was it something they didn’t think you would actually do? Can you give us an insight on that?

Dani:
Yeah. We can start with my family. My family has always been very supportive of the idea. However, it took my mom and dad some time to understand what we were doing and why. My dad is the type of person that very much this, it’s probably where I got my mindset of having money in the bank, having money in the bank. For me, having that mindset, when I would speak to him about what we were doing, it was I was getting that feedback of, but it’s good to have money in the bank. It’s like, right, but now they’ve been super supportive. They’re always asking about the next deal, the next house. If they know we’re going to look at something, my mom will call me up and be like, “Well, what’d you think?” They’ve helped with the kids if we have to go into a house that has people living in it, because we don’t like them running around other people’s houses. So very supportive. For his family [inaudible 00:51:14]-

Brandon:
Her dad has actually gone to properties and helped me fix stuff. Her dad’s pretty handy, so he’s gone to properties and helped us. Her mom, I’d probably say once a week, sends me a property that she’s found on Facebook. Her mom’s constantly sending me property. My family, on the other hand, my mom was incredibly supportive, she always has been. My one brother wasn’t. He thought it was very foolish to pull out the cash or do the cash-out refinance in my primary residence. It was too much of a risk for myself and my family and just didn’t think it was a good idea. It was funny, about a year into this journey, I got a text message from him asking him how am I doing this and how are things going because he’s seen how successful we are. Because every house we buy, we post on Facebook.
He’s like, “You’re doing really well here. Can you teach me how to do this?” So it went from, “You’re being foolish” to “Can you educate me?” So it did a 180. It’s been nice. I feel like once you prove yourself, then you’re no longer a fool. It was very, very frustrating for my family versus her family.

Ashley:
Well, awesome. Thank you guys so much for sharing that with us. Can you let everyone know where they can find out some more information about you guys and follow up with some of these questions and learn more about you guys?

Brandon:
It’s brandonanddanitilson.

Dani:
It’s pretty simple, yeah.

Brandon:
Is their [inaudible 00:52:37]?

Ashley:
Okay. Awesome.

Tony:
I love it. Before we wrap it up, I’ll just give a quick shout-out to this week’s Rookie Rockstar as well. This week’s Rockstar is Gifted Mathis and Gifted said, “Owning real estate recently became an interest of mine due to the BiggerPockets community. I’m 27 years old. My wife and I just closed on our third door. She’s only been in the United States for five years and I grew up in poverty and the first person in my family to own rentals. So it can be done. Just trust in God, find a great partner, and give it all you’ve got.” So Gifted, congrats to you and your wife for crushing it and getting that third property closed.

Ashley:
Yeah, that’s awesome. Congratulations. Brandon and Dani, thank you so much for coming on today and providing so much value. I know Brandon, you had said in the beginning that this was a full circle moment for you as to all the guests that we’ve had on the podcast, all the value you drew from them and now you got to provide value to them. So thank you so much for taking the time, both of you, to come on the show. We really appreciate it.

Brandon:
Yes, thank you.

Dani:
Thank you.

Ashley:
Well, before we leave you today, we’re going to give us shout-out to someone on Instagram for you guys to take a look at. Give them a follow, maybe like some of their posts and learn something. This week, it is going to be Sarah D. Weaver, W-E-A-V-E-R, so S-A-R-A-H D. W-E-A-V-E-R. You can learn all about her real estate investments, but also how she also travels the world living off the income from her real estate investments and how she manages them from all over the world too. So go and check out Sarah’s Instagram page if you want to learn more. Thank you guys so much for listening to this week’s episode. I’m Ashley @wealthfromrentals, and he’s Tony @tonyjrobinson. We will be back this Saturday with a very special, unique show just for you guys for this week’s Rookie Reply. We’ll be breaking down two side hustles, so make sure you guys tune in.

 

 

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