Real Estate Investing School Podcast

Episode 162: REAL DEAL: One Deal, Two Perspectives With Brydger Purdy
Date: May 30, 2024
Guests: Host Brody Fawcett with Brydger Purdy

Episode Overview

This "Real Deal" episode provides an in-depth, two-sided look at a recent real estate investment with Brydger Purdy. Building on last week’s conversation with Eric Gubler (who played a complementary part in the same deal), today the focus is on Brydger’s perspective: how a new investor with hustle rather than experience or deep pockets can successfully partner on a multifamily property, create value, and leverage networking and creative financing to break in.

Key Discussion Points & Insights

1. The Deal: Discovery, Due Diligence, and Opportunity

• Deal Context:
  • Brydger and Eric spent eight months searching before finding a five-bed, three-bath property in downtown St. George.
  • The property had poor listing photos and unclear details, meaning key features (like an extra unlisted bedroom and a second kitchen) were hidden.
  • Brydger advocated for viewing the property despite initial doubts.
• Unique Features Uncovered:
  • Discovered an additional unlisted bedroom and a separate electrical meter (installed by a contractor-owner) [01:08–02:01].
  • Realized it was essentially a duplex with two living areas and shared laundry.
  • "Ended up being an extra bedroom already in there that wasn't listed because it didn't have a window in there. So that was a plus." — Brydger [01:20]
• Why This One?:
  • Great area with high real estate values, lots of space (0.8 acre), and ample parking, making it viable for room-by-room rental [02:37].
  • "That's what drew me to it in the first place was just the size, the rooms and the space to park." — Brydger [02:57]
• Purchase Process:
  • Original listing at $460K, negotiated down to $443K after appraisal came in low [03:37–03:56].
  • Seller provided credits to buy down the interest rate due to rising rates [15:23].

2. Finding and Funding the Deal

• Role Specialization:
  • Brydger: Driven, energetic, brought cash for down payment ($15–17K from door-to-door sales earnings), but lacked qualifying tax history [07:10].
  • Eric: Provided experience, "tax history," and credibility for the mortgage (used commission income, was not living in the property).
  • "I basically just had the dream, a little hustle and the dream. And so we partnered up on it. We were able to use his tax history and get it done in that aspect." — Brydger [06:55]
• Partnership Structure:
  • 50/50 split even though Brydger put up the cash: "Half a house is always better than no house." — Brydger [07:23]
  • Brody highlights that opportunity, network, and action are often worth as much as money; listeners are encouraged to partner up creatively.

3. Mindset, Motivation, and Building a Team

• Origins & Aspirations:
  • Regularly listened to REI podcasts, attended masterminds, and wrote down explicit goals (“I will buy my first property this year”) [08:31].
  • Built genuine relationships via shared experiences (masterminds, working out, mutual connections).
• Sacrifices and Strategic Networking:
  • Paid to attend events and set goals—investing in relationships and self-development (not just the “deal”).
  • “Those were sacrifices. No one wants to go spend money for no reason, but doing it for reasons. Building relationships and being able to network and set those goals.” — Brydger [08:58]
  • Echoes the importance of networking as a core “investment” for long-term access and trust.

4. Tactics and Lessons Learned

• Creative Value-Add:
  • Converted living spaces into bedrooms, targeting seven total—maximizing cash flow [05:03].
• Renting Out Rooms:
  • Used Facebook Marketplace to fill vacancies; learned not to mix business with personal relationships.
  • Mistake: Letting friends occupy without leases—led to vacancies and missed income [12:40–13:32].
  • “That’s one of the biggest lessons that I learned is ... it’s hard to do people favors.” — Brydger [13:19]
• Key Advice for New Investors:
  • Partner with those who have what you lack (experience, history, connections).
  • “You just need to have a little hustle and then make connections with people.” — Brydger [10:25]
  • Don’t delay waiting for perfect conditions (tax history, large capital), if there’s a way, take it.

5. The Power of Relationships in Real Estate

• Crucial Negotiation and Closing:
  • Eric’s communication with the seller/agent (who were married) led to seller credits and successful closing amidst volatility [15:23].
  • “We would not have been able to do the deal if it were not for the connection ... and the constant communication that Eric Gubler had with the real estate agent and the seller.” — Brydger [15:28]
• Ongoing Value:
  • Maintained good relationships: “To this day, he’s our neighbor. He owns the four-plex next door, so we use his lawnmower, his tools, everything.” — Brydger [16:21]
• Future Opportunities:
  • Building trust today positions you for future deals.

Notable Quotes & Memorable Moments

• “Half a house is better than no house.” — Brydger [07:23]
• “It’s not just going to take you there from listening to a podcast and then trying to go out and execute... It’s actually, ‘Okay, what are all the pieces? How can I give myself the best shot at making this happen?’” — Brody [11:17]
• “Invest in your relationships ... That builds trust there. So now Eric trusts me to be able to go in on a house with me, and now you trust me to be able to come out here and work or do different things.” — Brydger [11:39]
• “Do not help your friends. ... Even if you want to do someone a favor, rethink it, put systems in place and then attack whatever you’re trying to go at.” — Brydger [13:58]
• “There’s always a way to get it done. Doesn’t matter your scenario, doesn’t matter your situation. And this is another example of that.” — Brody [14:49]
• “Eric was able to talk it down and get us some seller credits that we wouldn’t have had—that was able to buy down our rate. That was right when rates were spiking ... I learned from the wise on that one, and it worked out perfectly.” — Brydger [15:28]

Timestamps for Key Segments

• [01:08] — Discovery: The property with hidden potential
• [02:37] — Why this property stood out despite a rough listing
• [03:37] — Negotiations: How the price dropped from $460K to $443K
• [05:23] — How to “force” extra bedrooms/cash flow
• [06:55] — Bridger’s role and the power of partnering with experience
• [07:23] — Splitting the deal: Cash vs. opportunity
• [08:31] — Mindset, networking, and investing in yourself
• [10:00] — Advice for those without money, experience, or tax history
• [12:40] — Biggest lessons: Separating friends and renting rooms
• [15:23] — Closing the deal: Relationship-driven negotiations and ongoing value

Final Pearls of Wisdom

• Invest in networks, not just properties.
• Act before you have every advantage—creative partnerships bridge the gap.
• Be careful mixing friends and business—systems and contracts always win.
• Strong, honest communication is essential for deal success.
• Hustle, openness to learning, and willingness to put yourself out there create opportunities where none appear to exist.

Connect with Brydger:
Instagram @bpurdy6