Change Your Financial Future with ONE Real Estate Deal

Summary

BiggerPockets Real Estate Podcast: "Change Your Financial Future with ONE Real Estate Deal"

Release Date: June 25, 2025
Host: Dave Meyer, Head of Real Estate at BiggerPockets
Guests: Matt Faircloth, Liz, and Garrett Brown

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Introduction: The Power of a Single Investment

In this compelling episode of the BiggerPockets Real Estate Podcast, Dave Meyer and co-host Garrett Brown delve into how a single real estate deal can transform one's financial trajectory. The discussion emphasizes the importance of being proactive in the real estate market, seeking out high-impact deals, and leveraging creativity to maximize returns.

Notable Quote:
Dave Meyer [00:00]: "Any one investment has the power to change your financial future."

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Guest Introduction and Setting the Stage

Dave Meyer introduces two seasoned investors, Matt Faircloth and Garrett Brown, who share pivotal deals that have defined their investment careers. These stories highlight innovative strategies and the significant impacts of well-executed real estate investments.

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Matt Faircloth: The Live-In Flip That Launched a Career

Matt Faircloth recounts his first real estate venture—a live-in flip of a townhouse in Houston, Texas. This experience was a turning point, demonstrating how owner-occupied properties can serve both as personal residences and profitable investments.

Key Points:

• Initial Investment: Purchased a townhouse with minimal renovation needs for $220,000, selling it for $278,000, yielding a 3% commission.
• Reinvestment Strategy: Rolled the profits into a new live-in flip that included additional land for building cabins.
• Tax Benefits: By living in the property for two years, Matt utilized the capital gains tax exclusion, allowing him to reinvest profits tax-free.

Notable Quotes:
Matt Faircloth [01:09]: "You don't need decades of experience or fancy strategies to find a totally game-changing investment opportunity."
Matt Faircloth [05:43]: "It was a really easy way to turn my housing expense into pretty much an asset for me going forward."

Innovative Strategies:

• Live-In Flip: Combines personal living space with investment potential, maximizing both personal and financial benefits.
• Gradual Renovation: Allows flexibility in upgrading the property without financial strain, enhancing long-term value.

Expansion into Glamping:
Matt also shares his foray into the glamping niche—transforming raw land into lucrative camping sites—a testament to the versatility of real estate investment strategies.

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Liz: Leveraging Private Capital to Scale Investments

Liz narrates her journey of raising private capital to expand her real estate portfolio, highlighting the significance of networking and creative financing.

Key Points:

• Initial Challenge: Post-2008 financial crash, traditional financing was scarce, necessitating creative funding solutions.
• Private Investment: Secured $50,000 from a Wall Street financial planner interested in real estate investing.
• Strategic Acquisition: Purchased two distressed townhomes in Trenton, New Jersey, each for $25,000, significantly below lien values.
• Renovation and Leasing: Transformed the properties, generating $950 monthly rent per two-bedroom unit, adhering to the then 2% rule.

Notable Quotes:
Liz [17:26]: "I didn't start doing the BRRRR strategy [...] I took the BRRRR thing with this private investor's money."
Liz [23:06]: "There's always good deals out there if you're willing to look and really drill into markets and find deals."

Scaling Through Networking:

• Investor Relations: Built relationships with investors from Manhattan, leading to the acquisition of multi-unit buildings.
• Equity Partnerships: Facilitated multiple deals by pooling resources, demonstrating the power of collaborative investments.

Key Takeaways:

• Referral Power: Leveraging trusted relationships can significantly ease the process of raising capital.
• Full-Time Commitment: Demonstrating dedication and expertise reassures investors and fosters trust.

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Garrett Brown: House Hacking for Lifestyle and Financial Gain

Garrett Brown shares his experience with house hacking—a strategy where one lives in a part of the property while renting out other units—which provided both lifestyle improvements and financial benefits.

Key Points:

• First Deal: Purchased a three-unit property in Denver, allowing him to live rent-free while generating additional income.
• Lifestyle Enhancement: This strategy not only reduced living expenses but also provided a comfortable living environment close to friends.
• Financial Impact: The deal facilitated saving for grad school and accelerated his investment pace, demonstrating the dual benefits of personal and financial growth.

Notable Quotes:
Garrett Brown [34:07]: "Each deal that I've done has sort of incrementally improved my life."
Garrett Brown [35:35]: "This deal kind of showed me that was possible."

Strategic Benefits:

• Cash Flow: Achieving positive cash flow from rental units can significantly impact personal finances.
• Lifestyle Alignment: Selecting investments that support one’s desired lifestyle ensures sustainability and satisfaction in the long term.

Lessons Learned:

• Flexibility in Strategy: Adapting investment strategies to fit personal circumstances can lead to more meaningful and manageable investments.
• Long-Term Vision: Focusing on deals that offer both immediate and future benefits enhances overall investment success.

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Key Insights and Strategies

• Live-In Flips and House Hacking: These strategies provide both personal housing solutions and investment opportunities, maximizing returns while minimizing risks.
• Private Capital and Networking: Building strong relationships and leveraging private investments can significantly scale one's portfolio without heavy reliance on personal funds.
• Creative Financing: In volatile markets, innovative financing methods like HELOCs and private loans become essential tools for sustaining and growing investments.
• Tax Benefits: Understanding and utilizing tax laws, such as the capital gains exclusion for primary residences, can enhance profitability.
• Flexibility and Lifestyle Alignment: Choosing investments that align with personal lifestyles ensures long-term commitment and satisfaction, reducing the risk of burnout.

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Conclusion: Embrace the Flexibility of Real Estate Investing

The episode underscores the diverse and flexible nature of real estate investing. Whether through live-in flips, leveraging private capital, or house hacking, each strategy offers unique benefits that can significantly impact one's financial future. By learning from experienced investors like Matt Faircloth, Liz, and Garrett Brown, listeners gain valuable insights into crafting their own paths to financial freedom through real estate.

Final Thoughts:
Dave Meyer [38:27]: "Get in, start doing things, learning not just tactics and skills, but learning what you like, learning what you're good at, and that's how you really start to take off."

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Stay Connected:
To delve deeper into these strategies and hear more inspiring stories, subscribe to the BiggerPockets Real Estate Podcast on YouTube, Apple Podcasts, Spotify, or your preferred podcast platform. For additional resources and tools, visit www.biggerpockets.com.

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Disclaimer: The content presented in this summary is for informational purposes only and does not constitute financial advice. Always consult with a qualified advisor before making any investment decisions.

Transcript

[Dave Meyer]

Any one investment has the power to change your financial future. That's why you need to be in the game, looking for singles that can turn into home runs and leveraging your.

[Garrett Brown]

Creativity to maximize your returns.

[Dave Meyer]

But don't just take it from me. Learn from these expert investors and the investments that define their whole career.

[Garrett Brown]

Hey everyone.

[Dave Meyer]

I'm Dave Meyer, head of real estate investing at BiggerPockets. I've been buying rental properties for 15 years now and it's had a huge effect on my life, both financial and otherwise. And today I'm bringing two other investors.

[Garrett Brown]

Onto the show so we can talk.

[Dave Meyer]

About the deals that we feel defined our careers. These are the times we tried something new and found it worked or hit a home run that allowed us to scale.

[Garrett Brown]

And I wanted to have this conversation today because you, you're going to hear.

[Dave Meyer]

That these deals, even the ones that had huge impacts on us, aren't out of reach for anyone out there, even if they're just starting their investing careers. You don't need decades of experience or fancy strategies to find a totally game changing investment opportunity. You just need to be in the.

[Garrett Brown]

Game in the first place and always on the lookout for creative opportunities.

[Dave Meyer]

We're going to be welcoming back Matt Faircloth.

[Garrett Brown]

I have known Matt for a long time, I think 10 years now. He's been investing for 20 years and wrote the bigger POC book on raising private capital. And we'll also have Garrett Brown, Bigger Pocket's short term rental expert and the host of The Bigger Stays YouTube channel, joining us here today. Matt Garrett, welcome to the show.

[Matt Faircloth]

Always happy to join you. Dave, thanks for having me on.

[Liz]

Thank you so much for having me here.

[Garrett Brown]

Excited about this show because I think, I believe that there's sort of one deal, maybe two deals that sort of get you hooked as an investor or get you started feeling like you can do it or perhaps even open up your eyes to an entire new strategy or tactic that you can use in your investing career. Today I'd love to hear both of yours. I'll share some thoughts about mine. But Garrett, maybe you'd go first. Tell us a little about like is there a deal to you at least that stands out, like, that was the one and what did it do for you?

[Matt Faircloth]

I've done every type of real estate investing, pretty much anything in the ecosphere of investing. But the most pivotal deal that I actually had happen was a live in flip. That was one of my first purchases. I bought a townhouse in Houston, Texas. This is maybe a year or two after I Got my real estate license. I just found out about bigger pockets while I was in there. You know, they don't, they don't teach you any of this in your licensing classes and things like that. They teach you how to do some contracts. They'll tell you like different clauses that you probably never use during your career. But I started diving into bigger pockets and it started to turn on light bulbs for me. And so I started looking at properties because I was looking to buy my first place and I didn't want to buy anything that was already turnkey. I knew where the value was going to be. Like taking a sacrifice to actually live in something that needed a little work. I looked for stuff that didn't have a ton of, you know, structural issues or big ticket things that I personally didn't know much about. I was looking for something that just needed like a facelift in a good area in a. In a place that I was going to be happy with, living with for a year. So I had a lot of data out there. I was crunching numbers and kind of started realizing that I could get into a place for 5% down with an owner occupied loan and also make 3% technically on my purchase of it as an agent. So I'm pretty much getting in for almost 2%. I found a property that just gotten a new H vac system, just gotten a new roof, all the big things. But it was kind of ugly inside. Like it had some very dated flooring. I think it had carpet in a couple sections. Like all the things that most retail buyers will look at and go, oh, I can't, I can't live in that. And that's not a function. Like I could not come home to a, you know, yellow walls or something like that. So luckily I saw like, you know, kind of was like, well, I could probably, you know, withstand that, especially if it's something that I could, you know, get my hands dirty, use a little YouTube university, figure out how to do a little backsplash. And we ended up selling that townhouse right before even Covid hit for more than any other townhouse had sold in that community ever.

[Garrett Brown]

Wow.

[Matt Faircloth]

We sold it for 178.

[Liz]

I think you bought it for a buck 21. 70.

[Matt Faircloth]

Bought for buck 20. Made a 3% commission on the buck 22.

[Liz]

Love that.

[Matt Faircloth]

So I sold it for 178, took that exact money and then rolled it into a brand new living flip that had some land on it. And then we ended up even building cabins on that property, which is a whole nother deal that we'll talk about a whole another time.

[Liz]

I got a plot before we get into building cabins out there. Tom Sawyer. Let me. I gotta ask you a question. Because those that don't own homes don't know about this rule. I don't think that you can sell your home and keep up to 250k of the profit from that home tax free. And I got buddies that have done what you've done. They're. And they're courageous enough to move every year or two. And they're making up to 250 grand if they're single. Half a million. Put a pinky next to your mouth if they're married. What sticks about flipping houses? You got to pay taxes. What's great about live and flip like you're talking about is you get to keep all of it up to a half a million bucks if you're married. That's a. That's a reason to get married right there. There you go. You know. So you were able to roll that 50k, minus rehab expenses up into this new live and flip with the cabins, right?

[Matt Faircloth]

Yep. And I just rolled it right in and then planning to do the same thing. And then the point you made too is I lived in it for those two years and so I was able to avoid any of those capital gains taxes from that. Yeah, it was a really easy way to turn my housing expense into pretty much an asset for me going forward that I was able to get. Keep rolling in.

[Liz]

It's huge, man. You got to live somewhere, right? You got to live somewhere. And it's either like a house hack or a living flip. Ought to be anyone's first living arrangement.

[Matt Faircloth]

100.

[Liz]

You know, to the bigger pockets listeners, man. I was a house hacker.

[Garrett Brown]

Same.

[Liz]

You were living flipper, man. In that. But just playing the real estate game early just to. Just to cover your living arrangements, man. I mean, it's brilliant.

[Matt Faircloth]

And I still do it even in the house that I'm living in currently.

[Liz]

Are you living in Flipping now?

[Matt Faircloth]

Living in Flip right now.

[Garrett Brown]

Oh, nice.

[Matt Faircloth]

Yeah. Bought about six months ago. I. I've learned so many things from that first one that, you know, somebody gave me an offer. It was about 240. We were like, ah, we'll pass for now. They ended up coming back to us a few months later and said, hey, do you still want to purchase this property? And we ended up getting it for 205. And it had a new H vac. All the same things.

[Garrett Brown]

Oh, nice.

[Matt Faircloth]

But just ugly cosmetics and one of the. I think it's the fourth fastest rising county in all of the U.S. it's Montgomery county in Texas. And so prices are rising. All the same principles I learned and I'm just going to keep rinse and repeat.

[Garrett Brown]

You started this by mentioning that you have done a lot of deals. So like what about this one sort of stands out to you that feels like sort of the one that made you feel like an investor or taught you something that you perhaps didn't learn on other deals.

[Matt Faircloth]

The first living flip was just so monumental for me because I could see where I could do this for years to come, you know, and I don't always have to move instantly after a year.

[Garrett Brown]

Yeah, exactly.

[Matt Faircloth]

Like we probably plan to live this one, two or three years or whatever we want, but I'm going to keep increasing that value while I live in it and I don't have to take on like an equity partner and I don't have to do all these, you know, insane things to just make the deal work for me. Like it's working because I'm living in it and I'm naturally appreciating the property by just adding these things that I know I'm turning into a rental in about a year or two. So I'm adding rental grade things to gradually updated, painting, painting terrible walls, upgrading the bathroom, tub, showers a little bit.

[Garrett Brown]

None of that's even that hard.

[Dave Meyer]

Yeah, it's not.

[Matt Faircloth]

It's like a thousand dollar renovation for a new fiberglass tub or whatever. Like all those things are not anything that are going to break my pockets now. And if I don't want to do it this month, I can wait till next month to do it or when I get a little free flowing money coming in or I get a bonus from my word or whatever like that. So it's not like the pressure isn't on me to get in the house, flip it, make my money and exit before you know, like all the, the interest rates are weighing down on me. It's like I'm going to live here and I'm going to be fine. As long as it has ac, it has running water, has electric, it's stable. You know, I can get insurance on it like things like that. It's, it's kind of a no brainer to me.

[Liz]

What my wife and I did, we bought a house from a bank, the bank foreclosure in a development we wanted to live in and we did the live in but we didn't flip right. So we lived in it, fixed it up and then we didn't want to move because it's a place we wanted to raise our kids and all that jazz, right? So we then put a HELOC on the house because you create that value, right? So you buy a house for at a discount, you bring it up to market, that creates a delta, hopefully and the money is spent to renovate it versus market rates. You've opened up that spread of value. You can either sell it and monetize that value and go roll that up and get a way better house in a bigger area, better neighborhood. All that as you've done, right? Or what my wife and I did was we opened up a HELOC and now we take that HELOC and we've lent it out to people we know in our real estate community through hard money loans. We're currently have that invested in a fix and flip that we're doing right here in the town we live in. So to the bigger pockets listeners, right? I'm talking to them, to the, to the other, to the fourth person in the room here, so to speak, right? If you're telling yourself, well, that's all great, Garrett, but I don't want to move, right? You don't have to. You can go and do exactly what Garrett's talking about and then monetize that value, you put in into other real estate transactions and keep living in this house you've worked hard to create and make it your own, but then take that money and put it somewhere else 100%.

[Garrett Brown]

Matt, you're not just talking to the fourth person in the room, you're talking directly to me. Because yesterday I closed on a house and I'm probably going to do just that. I rebought it as a potential live and flip. But my wife and I are moving in and we might just stay, you know, like, we'll see how it goes, but we might just stay. And if we do, we're probably going to do something similar. Like we bought something under market value. There's good value add opportunity. We're going to fix it up so we can live in it. If we want to flip it, we'll flip it. If we want to live in it, we'll do a HELOC and we'll. Or we'll do a cash out refinance and we'll take some of the equity out and just reuse it. But you know, I'm talking out of my butt right now because I haven't done it yet. But Garrett, like what you were saying really sort of resonated with me about taking the time pressure off of flipping because that's kind of one of the reasons I've never really wanted to be an active flipper is like, I work full time, so I, you know, staying on top of things, like you need to, to be a flipper, to really hit your timelines would be a challenge for me, or at least it would be stressful. I'm sure I could do it, but it'd be stressful. Whereas, like, you go into these deals, you're like, I'm not going to move for two years because that's when I get my best tax benefit. I pretty sure I could handle a renovation over the course of two years. So I just think that's a really cool part of this that really makes it forgiving. Like it's, it's a really sort of, I think, low risk, high upside kind of investment. And to me, that's, that's what you want to be looking for.

[Matt Faircloth]

Y 100%.

[Garrett Brown]

All right, well, great deal and story, Garrett. Thank you so much. Matt, we're going to have to hear yours, but first we got to take a quick break. We'll be right back.

[Matt Faircloth]

You might have just heard me talk about my first deal, but my most successful deals actually weren't houses at all the first time. They were tents, cabins, mirror houses in the woods. It's called glamping. It's one of the most underrated real estate strategies out right now. I've taken raw land and turned it into millions and now I can sell it as a business later on with a 3x multiple that you can't get with single family rentals. I break it all down in my new guide for bigger pockets, the Glampy Investor, which is available for pre order now. Coming out July 15th. Check out biggerpockets.com glamp guide and you'll be able to get your copy reserved. Happy Glamping.

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[Dave Meyer]

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[Garrett Brown]

Welcome Back to the BiggerPockets podcast.

[Dave Meyer]

I'm here with Garrett Brown and Matt.

[Garrett Brown]

Faircloth talking about deals that defined our investing careers. We heard Garrett's awesome live in flip story. Matt, you've been doing this a long time. I can't wait to hear what? You've picked the defining deal of your career.

[Liz]

Yeah, I mean, the story I wanted to tell today was a little different. And this happened a few years after Liz and I were involved in the real estate investing space. We'd already gotten married. I had quit my day job to invest full time. We were living off of Liz's income. So Fast forward to 2011. The crash of 2008 was still there. There was still like a lot of great deals that were being done. But how do you finance them? Because the banks were still really skittish, need to get really creative financing still people doing short sales left and right and stuff like that. Very different time and plenty of deals, just no money. Banks were sitting on their hands. And so creative financing was the way to get it done in the early part of 2011. 12. Somewhere in there. So I married a. I married up. Liz went to University of Pennsylvania Ivy League school, and she was hanging out with one of her friends from Wharton. Yes, I name dropped from Wharton School of Business because she took some. She didn't. She graduated in social work, but she took some classes in Wharton. Smart enough to go and rub elbows there. So she's having coffee with one of her Wharton colleagues in that, talking about, you know, what they're up to. And he's now a financial planner. She's working in corporate, but also was just discussing what they're up to, you know, in all the different facets of life. And so my husband's running a real estate investing company. And he says when I talk about in raising private capital, Dave, he says the magic words, which are real estate investing. That is so interesting. I'd love to do that too, but I just don't have the time. Right.

[Garrett Brown]

Well, do you have a checkbook?

[Unknown]

Yeah.

[Liz]

All you need. Bing. You don't need time. I got time. Right? Yeah, you got money. It's good. So she was like, you should talk to my husband. And so, you know, Matt Fre jumps on a train up to Manhattan to go meet this guy because he's a financial planner up in the big city, right. So we sit down and I tell him what we're up to. And by then, Liz and I had a reasonable rental portfolio, a couple of single family homes, a couple of four unit apartment buildings that we had bought with our money and with our immediate family. Like my parents and her parents were our seed investors on a few deals. And we had also rolled some of our capital, you know, done a deal, rolled it up as Garrett had done, you know, like do a flip Roll it into a rental, that kind of of thing. So small portfolio. And I laid it out, what we had done and what we were up to and what our goals were. And he just goes, what if I gave you 50k for your next deal? And I was like, you're. That's a great question. What if you gave me 50 grand?

[Garrett Brown]

I'd love to find out.

[Liz]

How about you just give me 50 grand? Did you bring it in cash? No. Seriously. He was like, what if I invested 50k with you? What if you found a deal and we went half and half and you do, you do all the work and I put up the 50 grand to find a deal and I said, you know what, let's, let's try that. And so I talked to a lawyer friend of mine. Yeah, sure. This how you do it. You know, you're both active partners. It's not a security because you're both going to be, you know, active to a degree into the project and all that, yada, yada, yada. So I went and found these two little beater townhomes where my investing market, my playground at the time was Trenton, New Jersey. And I found these two little townhomes that guys, they were bought, they had a. They had a lien on them from Deutsche bank on both of them for $175,000. The bank had taken a haircut down to where the wholesaler that I was buying them from was buying it from Deutsche bank for a lower number. I still don't know what that number was, but I paid the wholesaler 25 grand per house. Wow. Right? That's. That was the world that it was. In 2011, 2012, Deutsche bank was willing to take a haircut for off of their175,000 lien down to where we could buy these two houses for 25 grand a piece.

[Garrett Brown]

Okay, I can see how this is defining a career. Defining.

[Liz]

Right, right, right, right. So Now I got 50 grand from a Wall street financial planner looking for a home. I got these two little beater townhomes that needed a lot of work. Right. The problem is just like, you know, Garrett's fixer upper. I needed some money to fix them up. And so I also had another friend and he came to me around like a month earlier and he goes, you know, I've been doing some rental deals and I've been funding them with a guy I work with who has an ira and he's been lending his IRA to me. And I've been using this IRA custodian and Whatnot. And it's been really good. And I've done a few deals. The problem is I also have an ira. This guy that I'm talking to, he says, I have an IRA and the rules don't let me put my IRA into my deals because you're called a restricted party, so you can't do that. So he was like, I want to grow my retirement account. I want to put it somewhere else besides Wall street, but I can't put it into my deals. You know, if you come up with a project, can I lend my IRA to you? And I said, yeah, of course. You know, show me how to do it. And so he showed me how to do it because he'd already done it. So he showed me that, how IRA lending works and whatnot. So now I walk in and I've got 50 grand from my buddy's IRA in a collateralized loan that is on title with a lien on the property with a monthly payment that he got. Then I've got an equity investor from my, my wife's Wall street friend, right? And now I've got a hundred grand so I can buy these two properties for 50k, which is what we did. I renovated both of them. So all in cost at $100,000. Right. 50 grand per door is what my all in cost was. I leased them both out for Again, another time, 950 bucks for a two bedroom apartment in Trenton, New Jersey, which was a good, that was good rent for a fully renovated little town home. Little, little house. Right. But it was also, as we talk about in bigger pockets, the 2% rule.

[Garrett Brown]

I mean, we don't talk about that anymore.

[Liz]

Nobody talks about. I got the half a percent rule, right, you know?

[Garrett Brown]

Right, yeah.

[Liz]

But it was a 2% rule back then. So I was able to then approach a credit union who. They were the ones that were starting to dip their toe in the water back then after everybody got burned. This credit union, which typically does individual loans, like they'll lend to you when you want to buy a car, they'll lend you when you want a HELOC on your house, they'll lend you, you know, for personal stuff. But they were starting to get into business loans as well. And so they were willing to take a stretch on me. And obviously they wrapped me and my wife and this Wall street guy up with a personal guarantee and everything. But they lent us on a valuation of $75,000. So that means I was able to pull out that full 50k, pay off my private lender, get my equity Guys money back to him.

[Garrett Brown]

Wow.

[Liz]

Right. So I didn't start doing the brrrr strategy, which we've heard about on biggerpockets quite a bit with other people's money. Wasn't my money. I took the Burr thing with this private investor's money. And then before you know it, Dave, he's up in Manhattan. I know you used to live in the area. So that's an hour away from Trenton, New Jersey on the train, right?

[Garrett Brown]

Yeah.

[Liz]

And so all of a sudden on the weekends, this Manhattan stock guy is getting his buddies to take the train to Trenton to meet his buddy Matt, who has done this deal with his 50 grand.

[Garrett Brown]

Really? And he's, he's showing you off.

[Liz]

Yeah. And we're doing windshield tours, man. I'm like, well we could buy this by that. So before you know it, me and this guy start doing more. His 50 grand gets rolled up into other, other projects with other friends that he brings down. Said before you know it, we're buying duplexes. We, we buy another four family on the block that Liz and I own. Two four families. We buy a third four family with these investors. We eventually roll it up. And, and, and you know, I started doing YouTube videos back in 2013, 14. Somewhere in there I still have a YouTube channel that talks about real estate investing and all that jazz. And me and my new YouTube friends and this group of investors from Manhattan buy a 10 unit apartment building. And then we were off to the races from there, Dave. Because I had gotten my head into this is what it is. Putting other people's money to work when I'm willing to be the legs and they're willing to provide the money and, and get an equity split for doing the work that we do.

[Garrett Brown]

Awesome. Well, that obviously sounds like a defining deal. I can see why is it? I mean, obviously the returns are great, but I imagine this sort of just opened up a whole new world to you like of how to be an investor.

[Liz]

Yeah.

[Garrett Brown]

I mean now you've written books on this topic, but seems kind of like changed your trajectory as an investor and a business person.

[Liz]

Yeah. I want to speak to the bigger pockets listener that's over here saying like, yeah, that's all well and good, Matt, but you can't buy a townhome for 25 grand anymore. You're right, but it's not about the deal. Right. Is people are throwing rocks at it and saying like, well, you can't do that deal anymore. The deal is not why I had the pivotal moment and the deal is not why Those investors joined me. There's always good deals out there if you, if you're willing to look and really drill into markets and find deals. I mean, Garrett, you're a Realtor, right? There's good deals out today. You know, it's really just about the concept of introducing real estate investing to people that actually did not read Rich Dad, Poor dad, and actually do not listen. Their fault. Don't listen to this podcast. There's people out there in, in our networks as real estate investors that don't understand what we do. And exposing real estate investing to those people, that was my pivotal moment. To go to people that don't know what we know, that that will ask you more questions when we're at the dinner party about like, yeah, I'm a full time real estate investor or I invest in real estate on the side. The people that start asking questions, they're curious about what we do because they don't know what we know about this space. And they think that Wall Street's the only place that they can build their wealth. They don't know that there's other places they can do it. And that's what my pivotal moment was, is that I know a lot of people that are looking for another way. And if I go out and find deals and I put what I know in front of them and those opportunities, I can do as many deals as I want.

[Matt Faircloth]

Do you think there is anything in particular that you did that made these investors, like, excited to work with you or put their money into you? I think that's something even, like in my, you know, years of trying to get investors along with some of my ideas, it's usually like, some get interested, but I'm like, what's. Is there like a magic sauce to get them? Like, besides just the, just, just the screaming deal, you know, the best, you know, the better the deal, the easier it is. But you seem like you were able to kind of get some, you know, investors on board pretty quickly.

[Liz]

Well, it helped that their friend was vouching for me. Right. And so I talk about this, in raising private capital that, that getting referrals is huge because you've already broken through a lot of objections. And a lot of, you know, when people have objections to investing in something, it's likely because they're not sure, you know, what, what it's going to look like. Right. And if one of their friends has already done it, then that dissolves a lot of those things. So that's number one. Number two, I made sure that they knew this is my full time gig, man. This is what I do. You know, I'm a full time real estate investor. I've already burned the ships. So this is, this is my, this is my jam. And so I'm going to be, you know, supervising the contractors at that time. Time doing the leasing myself, you know, meeting with the bank, co signing with them on the loan. So I think that, that them seeing that I was going to be their legs and also that I had a track record and everything like that. I, that's what I recall. That's what dissolved a lot of any objections that they had. And I mean, you know what, Garrett people took the train to Trenton with my Manhattan friend. Toured around Trenton all day long. It said, nah, it's not for me.

[Garrett Brown]

Yeah.

[Liz]

So yet he also be willing to take a no. Not everybody's going to say yes. A lot of people did that.

[Garrett Brown]

Of course.

[Liz]

Yeah. He brought dozens of people down. He brought dozens of people down and we produced maybe 5, 6 investors out of all those tours.

[Garrett Brown]

Yeah. And that was enough. Yeah, yeah.

[Dave Meyer]

That's all.

[Liz]

You need advice. I'll take all the no's I can I can get because I know there's a yes in that pool somewhere.

[Garrett Brown]

Awesome. Well, thank you for sharing that story. I think again, like these numbers might not apply to today's day and age, but the things that Matt did are really applicable to today's day and age. And I think I haven't really done that, but I would imagine that would be a really big difference is going out and starting to work for other people in a way both in opportunity, but forces you to be a more sophisticated investor too. Because now you have investor relations, there's like a whole other skill set that you're forced to learn that I'm sure helps, you know, makes you a better investor.

[Liz]

That deal wasn't a life changing deal. The concept was right. Like you produced like, you know, 300 bucks in cash flow for each one of us, you know, and that's awesome because that's, you know, mailbox money for him. Yeah. And all that. But it is the concept that he was able to get his money back and reinvested in other deals and then make 300 bucks. And saw the potential here and all the, and all the things and I was like, you know, hey, the world's my oyster. I can do as many deals as I want with other people's money if I know how to, how to structure things.

[Garrett Brown]

All right, well, thanks, Matt and I will share my career defining deal when we get back from this quick break.

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[Garrett Brown]

I'm here with Matt Faircloth and Garrett Brown talking about deals that have defined our careers. And I was kind of on the fence when we were planning the show, which one I would talk about. But I'm going to go with my second deal because my first one was great. But the second one I actually started house hacking and I know that's not how most people do it. I actually intended to house hack my first deal. Then I got an opportunity to live in the basement of my friend's grandma's house and I did that for three years to save money on rent. And I was actually talking to my wife about that. We met while that was still going on and she was like, you know, I was really a visionary. I really saw your potential even though you were living in your friend's grandma's basement at that point. But then I actually moved out of Denver for work and I came back and I was like, okay, now I need a real apartment if I want my then girlfriend to stay with me. So I bought a 3 unit actually only one block away from my original building that I had had. So that was awesome because I was able to maintain both properties really closely. But this was the first time I like noticed a really big lifestyle improvement for myself for real estate investing. And I think a lot of times we talk on the show about sacrificing and all the things that you have to do which are true to have financial freedom sometime in the future. But I actually think and for me at least each deal that I've done has sort of incrementally improved my life. Like that first house. Yeah, I was living in my friend's grandma's basement, but I was making 2, 300 bucks more per month and for me a year out of college that was meaningful in my life that I could actually save money for once months. This time I actually was able to live completely for free. I actually made a little bit of money most months, but I was able to live for free in a neighborhood I really wanted to live in. I was able to, you know, be closer to my friends and I had a really good lifestyle and was making this incredible financial benefit to myself. Still on this property, it's at least doubled in terms of equity. It's probably the best cash flowing property I still own. And I did all of that through a relatively simple strategy which is house hacking. And I, the reason it just stands out to me is like, I think when I was first starting I thought it was like all sacrifice. And to me this one just was like actually you could do this and incorporate it and live a good life at the same time. And that was sort of eye opening to me. And as honestly changed my strategy about real estate investing ever since. Like I don't do a lot of deals that are inconvenient to me. I am lazy about it. I pick deals that are support my lifestyle and I'm lucky to have been doing this for 15 years now. So I don't need to like do the ultimate hustle kind of deals. Still doing live in flips and that kind of stuff. But I only do deals that, that support the lifestyle. Want, I don't want to like push off this like, oh, I'm going to really enjoy myself 10 years from now, 20 years from now, 30 years from now. I kind of feel like that's the opposite, opposite of why you get into real estate investing. And so this deal kind of showed me that that was possible.

[Matt Faircloth]

What were you able to get in to the deal for? Like how much down was it? And things like that.

[Garrett Brown]

So I think it was 620 when I first bought it and I put 20% down.

[Matt Faircloth]

Oh, okay.

[Garrett Brown]

Because I had gone in between those two deals, gone back to school, gotten a good job, was able to save up some money and it was listed as a two unit. And I went in there and you know you're like back the envelope like, oh, this is pretty good, this is pretty good, it might work. And then I opened this door and they didn't even say there was just a whole other unit. Wasn't even an opportunity for a unit. There just was a unit that was.

[Matt Faircloth]

Not listed like open in Narnia.

[Garrett Brown]

Yeah, it was, it's like, well, you know how you go to all these properties and they're always oversold. And then like every once in a while you're like, wow, you really undersold this. Those are the deals you want to buy, I guess because no one else is looking at them. But I, I Honestly it's been 11 years. I forget what the rents were, but it basically allowed me to live for free. More than covered my mortgage payment and you know, with costs and expenses on any given month I was coming out probably about even. I think that's the other thing. Maybe a good lesson here is like I wasn't like cash flowing a ton, but that's, that was fine to rent an equivalent apartment would probably be in Denver at that time. 1200, 1500 bucks a month, you know, so that's 15 grand a year basically that you're saving. So to me that was a fantastic choice. I wasted it all at the bar across the street. But it was a good time. I enjoyed it.

[Matt Faircloth]

Yeah, it sounds like you picked a good place to live then that you actually like. Exactly.

[Garrett Brown]

I had a great sandwiches. Lifestyle.

[Matt Faircloth]

Lifestyle benefit.

[Liz]

Hey, pre marriage.

[Garrett Brown]

Yeah.

[Liz]

You know, and everyone should live in an environment like that at some point in their life. And you did it pre marriage. So that's good, right?

[Garrett Brown]

Yeah, yeah.

[Liz]

Going back to understand, underscore one thing for the listeners to relate to. Right. Like anybody answer this question. What would happen if your housing expenses went to zero? Right?

[Matt Faircloth]

Oh yeah.

[Liz]

You know, if you would. If you have a day job and your housing expenses go to zero, what would you be able to do? What I did was paid off all my student loans and all my credit card debt in two years. Got myself completely bad debt free in two years because of having a good job working for Ingersoll ran at the time and no living expenses. Right. Like that. That'll do it.

[Garrett Brown]

Totally.

[Liz]

I mean, Dave, you're probably able to scroll money and do the things and then roll up and spend some money at the bar. I get it.

[Garrett Brown]

But also that was mostly a joke, but they had good two for one deals. So I took that place. It's net, it's networking.

[Matt Faircloth]

You were networking.

[Garrett Brown]

But no, actually you, you raise a good point, Matt, because I paid for my grad school. I was going to grad school also during this time I did wind up taking out loans for grad school, but I went in state so it wasn't crazy expensive. I didn't want to go to private school or anything like that because you don't have to pay while you're in grad school. But during the two years I was in grad school, I saved up all the money that I needed so that when I was done with school, I just paid off the loan and never paid interest on it, which was awesome. And then the other sort of secondary benefit was it took me about four years between my first and second purchase. I cut it down to two years into for my third purchase, you know, so I was able to just save up money at a faster rate, even with paying to go to grad school, which increased my salary, which allowed me to invest faster and, you know, sort of like started this whole cycle that I've been on, I guess since whatever that was. 2014.

[Liz]

That's brilliant.

[Garrett Brown]

Well, this has been a lot of fun, guys. Thank you, guys. So I had a feeling for everyone knowing Garrett and Matt did not know each other before this show. We met right five minutes before we started recording. But I had a feeling we'd have fun and I think that we were right. All right, well, thank you all so much for listening to this episode. Hope you all learned something. These are kind of different experiences, which is really cool, you know, a live and flip renovation. I guess both Garrett's and mine were owner occupied strategies, but both things that really sort of set you off. Turn the light bulb on for the possibilities. Same with Matt's, right? Turning that light bulb on and seeing different things that you can do with real estate. That's the beauty of this business. It's so incredibly flexible and customizable to whatever you want to do. And that's the key. Get in, start doing things, learning not just tactics and skills, but learning what you like, learning what you're good at, and that's how you really start to take off. So, Matt Garrett, thanks again and we'll see you all next time for another episode of the Biggerpockets Podcast.

[Dave Meyer]

Thank you all for listening to the Biggerpockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and I'm the host and executive producer.

[Garrett Brown]

Of the show, Dave Meyer.

[Dave Meyer]

The show is produced by Ian K. Copywriting is by Calico, content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors. Before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.