Real Estate Rookie — Episode Summary

Podcast: Real Estate Rookie
Hosts: Ashley Kehr & Tony J. Robinson (BiggerPockets)
Episode: "Escaping the 9-5 Grind with Just 2 Properties (in 2 Years!)"
Date: September 29, 2025
Guest: Dylan Pettyjohn

Episode Overview

This episode features Dylan Pettyjohn, who transitioned from a W2 job to financial freedom through real estate—all within two years and with just two deals. The conversation centers on the power of partnerships, the advantages of small multifamily properties, and actionable advice for new investors seeking to exit the 9-5 grind without amassing a huge portfolio. Dylan shares his journey from buying his first off-market triplex to acquiring a 12-unit property, offering practical tips on deal analysis, rehab budgeting, tenant management, and the differences between residential and commercial financing.

Key Topics & Discussion Points

The Power of Small Multifamily Deals

• Debunking the Myth: You don't need dozens of properties to quit your job—Dylan did it with two major deals.
  • “Do you think that you need a dozen properties to break free from your 9 to 5? Today's guest proves that you might only need a couple.” — Ashley [00:00]

Getting the First "Pocket Listing" Deal

• Relationship-Based Opportunity: Dylan’s connection with an agent who knew his criteria led to a quick, off-market triplex purchase.
• Buy Box Precision: Dylan stressed the importance of having exact investment criteria for agents.
  • “I had a criteria on like a cash on cash return metric… and eventually we just had something that popped up in their office that was about to be listed the next day.” — Dylan [01:06]
• Advice for Rookies Seeking Off-Market Deals:
  • Show agents you’re serious and ready to act quickly.
  • Be specific with your buy box.

Memorable Quotes

• "The agent needs to know that you’re serious... if they put this thing in front of you, you are actually going to execute on it." — Dylan [02:22]
• "I probably underwrote a hundred or more different properties before I actually got this one." — Dylan [03:18]

Analysis Paralysis & Pulling the Trigger

• Preparation Yields Confidence: Reviewing and underwriting many deals helps investors recognize a great opportunity immediately.
  • “You do that enough times, it starts to become super apparent what a good deal looks like and what doesn’t.” — Tony [06:17]
• Taking Calculated Risks: Despite nerves, a solid buy box, research, and analysis allowed Dylan to move fast.

Key Moment

• “Once he told me the price after I had toured it... I just said, just give them full asking price, write it up tonight, I'll sign it, and then I'm good to go.” — Dylan [04:35]

Rehab Lessons & Budget Surprises

• Hands-On Renovations: Dylan did much of the initial rehab himself with help from friends, YouTube, and learning through costly mistakes.
• Budget Overruns: First rehab went over budget—from underestimating materials and labor to overspending on appliances.
  • “About halfway through, I realized I spent all the money I had allocated to rehab a specific unit... there’s a ton of waste.” — Dylan [10:19]

Improved Scope of Work Over Time

• Started with rough Home Depot cart estimates; now leverages tools like ChatGPT, gets multiple contractor bids, thorough photo/video documentation, and detailed walkthroughs.

• “Now you can use tools like ChatGPT—what’s the cost of painting in this area? Flooring? ... Now, generally I’ll just have my contractor walk it and he’ll bid everything at once.” — Dylan [12:07]

Property Conversions & Tenant Management

• Triplex Was a Quality Conversion: Originally a single-family home; Dylan's was one of the best conversions, according to an experienced partner, avoiding typical issues like poor electrical or plumbing layouts.
  • “He did say that this is the best one he has ever seen as far as conversions go. So I’m happy about it.” — Dylan [18:11]
• Inherited Tenants: Used Dion McNeely’s “binder strategy” to negotiate rents and maintain stable tenancies.
• Noise & Layout Lessons: Soundproofing and shared/common area management are critical in multi-unit settings.
• Lease Strategies: Moved from year-long leases to more flexible terms for inherited tenants to enable rent adjustments.

Rookie Landlording Lessons

• Empathy & Communication: Strike a balance between policies (e.g., late fees) and compassion; timely maintenance is key.
  • “That’s the number one complaint I get... other landlords just don’t care and don’t fix stuff quickly.” — Dylan [23:48]
• Systematizing Maintenance: Logging and communicating every maintenance step, which also provides protection if legal issues arise.
  • “Having these logs... saved me to show that I definitely was taking care of things.” — Ashley [25:15]
• Self-Management: Dylan self-manages to save on costs (PM fees can eat up 40-50% of net, not just 10% of gross).

Scaling Up: The 12-Unit Commercial Deal

Why It Felt Easier Than the Triplex

• Focus Shifts to the Asset: Commercial lending relies primarily on property performance (debt service coverage ratio), not the borrower's personal financials.
  • “With commercial property, they’re looking at the deal specifically... it makes it a lot easier.” — Dylan [31:56]

Finding and Structuring the Partnership

• Partner Search: Leverage existing network—Dylan found a partner at work with real estate experience and available funds.
  • “Luckily, at the company I was working at, there’s another guy that’s been buying real estate for quite a while... he was able to be a large portion of the down payment.” — Dylan [34:29]
• Equity & Control: Partner contributed most of the down payment; split 80/20 on ownership but 50/50 on management decisions.
• Property Management: Dylan charges a fee based on net, not gross income, to better align incentives.

Memorable Quotes

• “20% of doing a commercial deal is better than not owning a commercial deal. I would rather learn the process now... than wait.” — Dylan [47:25]

Commercial Lending Insights

• Key Differences:
  • Commercial loans typically underwritten to the asset’s income, not personal finances.
  • Terms: shorter amortization (20-25 years vs. 30-year fixed), adjustable rates, often require personal guarantees, but debt does not show on personal credit.
• Finding Lenders: Google local community banks, call 20-30 to compare terms/products—local banks often have the best flexibility and terms.
  • “Go on Google Maps and search for local community banks... just call all of them.” — Dylan [38:04]

Value Creation in Commercial Real Estate

• Ability to create equity by increasing income—properties are valued by net operating income and prevailing cap rates.
  • “If you just simply increase the income on the property, you can add substantial value.” — Dylan [41:12]

Creative Financing Approaches

• Offers multiple structures to sellers—interest-only, seller carryback, blended bank/seller financing to achieve prices closer to seller’s goals while minimizing capital needed.
  • “What I’ll try to do is... give them a few different types of offers.” — Dylan [43:02]

Notable Quotes & Moments

• On Preparation:
  “I probably underwrote a hundred or more properties before I actually got this one.” — Dylan [03:18]

• On Taking Action:
  “Once he told me the price after I had toured it... I just said, just give them full asking price, write it up tonight, I'll sign it, and then I'm good to go.” — Dylan [04:35]

• On Partnerships:
  “20% of doing a commercial deal is better than not owning a commercial deal. I would rather learn the process now... than wait.” — Dylan [47:25]

• On Self-Management:
  “I will not pay a property manager because it may be 10% of gross, but if you actually do the math... it seems like it’s 40 to 50% of net if I’m paying a property manager.” — Dylan [27:04]

Timestamps for Key Segments

• How Dylan Found His First Deal (Pocket Listing): [01:06]
• Advice for Building a Buy Box & Underwriting Deals: [03:18]
• Making the Offer & Managing Risk: [05:45]
• Rehab Budget Overruns & Lessons Learned: [10:19], [12:07]
• Tenant Management & Binder Strategy: [18:56]
• Lease Strategies and Lessons Learned: [22:33]
• Self-Managing vs. Property Management Costs: [27:04]
• Jumping from Triplex to 12-Unit - Financing & Partnerships: [31:56], [34:29], [44:32]
• How Commercial Lending Works for Small Investors: [36:10]
• Finding and Evaluating Community Banks: [38:04]
• Value Creation in Commercial Real Estate: [41:12]
• Creative Financing with Sellers: [43:02]
• Equity & Management Structure with Partner: [44:32], [47:25]

Conclusion

Dylan’s story highlights the attainable path to financial freedom through small multifamily properties and smart partnerships—debunking the “more is better” myth. By stressing relationships, clear criteria, tons of deal analysis, hands-on learning, and creative financing, the episode delivers a playbook for rookies who want to break out of 9-5 life, even if they start with just one or two buildings.

Connect with Dylan:

• Instagram: @dylanpettyjohn
• YouTube: Dylan Pettyjohn
• Specializes in investor clients in the Indianapolis area

Episode hosted by Ashley Kehr and Tony J. Robinson — Real Estate Rookie, BiggerPockets