Building Wealth with Real Estate in 2025 with Ryan Pineda | Episode 32

Summary

Podcast Summary: The David Greene Show – Episode 32: Building Wealth with Real Estate in 2025 with Ryan Pineda

Release Date: January 16, 2025

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1. Introduction and Background

In Episode 32 of Real Talk Real Estate, host David Greene welcomes renowned real estate entrepreneur Ryan Pineda to discuss strategies for building wealth through real estate in 2025. The conversation delves deep into Ryan's extensive experience, his entrepreneurial mindset, and the evolving landscape of real estate investing.

2. Ryan's Journey in Real Estate

Ryan begins by recounting his early days in real estate, highlighting significant milestones that shaped his career. He reflects on his first interview with David on the BiggerPockets podcast in 2018, expressing his initial nervousness and the pivotal relationships formed thereafter.

Ryan Pineda [00:41]: "I was actually super nervous, man, because I've been watching Biggerpockets for years, and it was like a dream come true."

Ryan's dedication led him to participate in GoBundance and pursue various ventures, including couch flipping—a venture that unexpectedly became his most popular YouTube video by 2020.

Ryan Pineda [03:30]: "If it doesn't work, let's just shut it down."

3. Entrepreneurship and Attitude Towards Failure

A significant portion of the discussion centers on Ryan's entrepreneurial spirit and his unique perspective on failure. Unlike many who fear failure, Ryan embraces it as an integral step toward success, drawing parallels with his background in baseball.

Ryan Pineda [04:33]: "Failure is an inevitable part of success."

He emphasizes the importance of resilience and continuous progression, stating that not every business closure signifies failure but rather a shift in opportunities.

4. Strategies for Real Estate Success

Ryan outlines various real estate strategies, emphasizing the importance of adaptability and focusing on what works best in the current market.

a. Flipping

Historically, Ryan achieved substantial success through house flipping, managing over 700 flips and wholesales. However, recent market downturns, such as rising interest rates, have necessitated a shift in strategy.

Ryan Pineda [54:52]: "We're able to get these deals on novation that aren't really deals. Right. So I don't know."

b. Wholesaling and Novations

Transitioning from flipping, Ryan discusses the rising prominence of wholesaling and novations. He explains novation as a method where the seller retains title until certain conditions are met, allowing Ryan to profit without the risks associated with traditional flipping.

Ryan Pineda [56:21]: "The easiest way to explain innovation is it's kind of like a net listing."

This strategy has provided a more scalable and less risky model, enabling Ryan to maintain profitability even when flipping becomes unfavorable.

5. Challenges in the Current Real Estate Market

a. Market Changes Post-COVID

The pandemic drastically altered the real estate landscape, shutting down traditional event-based learning and propelling the rise of digital influencers. Ryan critiques the influx of influencers who often oversimplify real estate investing, leading to unrealistic expectations.

Ryan Pineda [26:36]: "Biggerpockets is the first person and then everybody else joined into that space."

b. Influencer Landscape and Trust Issues

Both hosts discuss the diminishing trust in influencers and the broader decline in societal trust. Ryan attributes this to the transparency of social media, which exposes the flaws and failures of even the most successful individuals.

Ryan Pineda [27:45]: "We are at the lowest point of trust in human history."

6. Marketing Strategies for Real Estate Investors

Ryan emphasizes the critical role of effective marketing in real estate success, distinguishing between inbound and outbound lead strategies.

a. Inbound Leads

Inbound leads, particularly through platforms like Facebook, have proven to be more efficient and higher quality. Ryan notes that inbound leads convert faster and require less follow-up compared to outbound methods.

Ryan Pineda [61:26]: "We get deals that convert the same day. We get deals that convert in 48 hours."

b. Outbound Leads

Outbound strategies, such as cold calling and driving for dollars, are more time-consuming and resource-intensive. While still viable, Ryan suggests they are less effective in the current market compared to inbound approaches.

Ryan Pineda [65:44]: "There is no secret. It's like, free, outbound, or inbound. Just pick."

7. Building Credibility and Trust in the Industry

Ryan and David discuss the importance of building genuine credibility as a real estate professional. Ryan advocates for transparency, ownership of failures, and continuously adding value to clients and investors.

Ryan Pineda [37:56]: "The last two years of real estate have been extremely hard."

He stresses that maintaining open communication with investors, especially during downturns, is crucial for sustaining trust and long-term relationships.

8. Final Advice for Aspiring Investors

Concluding the episode, Ryan offers actionable advice for those looking to build wealth through real estate:

• Focus on Acquiring Good Deals: Prioritize purchasing properties below market value to maximize exit strategies.

  Ryan Pineda [52:49]: "You get rich from finding undervalued deals in real estate."

• Adaptability is Key: Be prepared to pivot strategies based on market conditions. Whether it's flipping, wholesaling, or novations, flexibility can sustain profitability.

• Invest in Marketing: Allocate a budget for inbound marketing to generate high-quality leads, ensuring a steady flow of potential deals.

• Embrace Continuous Learning: Understand that real estate investing is dynamic. Stay informed and adapt to new trends and strategies to stay ahead.

Ryan Pineda [60:28]: "We're doing well because we're doing whatever's best."

Conclusion

Episode 32 of Real Talk Real Estate offers a comprehensive exploration of real estate investing strategies in 2025, guided by Ryan Pineda's seasoned insights. From embracing failure to leveraging modern marketing techniques, listeners gain valuable perspectives on navigating the complexities of today's real estate market. Ryan's candid discussion underscores the importance of adaptability, transparency, and strategic planning in building sustained wealth through real estate.

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For more insights and to connect with Ryan Pineda, visit leadkitchen.com. To be featured on future episodes or submit questions, visit davidgreen24.com.

Transcript

[A]

Welcome to Real Talk Real Estate, the show where we cover how to build wealth in real estate with no fluff, no bs, and no sales pitches. I'm David Green, and I've been doing this for over 10 years. I've seen the ups, the downs, and everything in between. This is the show where we pull back the curtain and show it to you too. So if you want to build wealth through real estate or you just love learning about it, you found your home. Ryan Pineda, welcome to the David Green Show.

[B]

Dude, I'm excited for this new endeavor, man.

[A]

Yeah, thank you for that. So let's share a little bit of how we got to meet each other and our journey together. Do you remember the first time we interviewed you on the Biggerpockets podcast?

[B]

Yes. It was 2018. I was actually super nervous, man, because I've been watching Biggerpockets for years, and it was like a dream come true.

[A]

What do you remember about the podcast itself?

[B]

Well, dude, I remember, like, trying to be prepared, because at that time, it was always kind of the same format. You know, it was like the Famous Four and all this other stuff. And, yeah, I just remember, too, you had recently replaced Josh, so that was like a new thing. And so I didn't know a ton about you at the time. Obviously, I'd followed Brandon for a while, but it was just great. I remember talking to you and Brandon after about, like, just different masterminds and all this cool stuff, and, you know, we all became buds after that.

[A]

So I think you joined GoBundance for a little bit of period of time too, right? Yep, I remember that. I remember your couch flipping thing.

[B]

Yeah.

[A]

My favorite part of your story was.

[B]

Yeah.

[A]

You didn't wait until I had the deal of a century to move. You're like, I got to do something. You kind of built it into flipping houses.

[B]

Yeah. And what's crazy about that, too, is I talked about that back in 2018, and then, you know, I talked about it when I started making YouTube videos in 2020, and that was, like, my most popular video ever. And I was like, dude, I've been doing this for a while, but people love that.

[A]

Yeah. I mean, I specifically remember your show because this isn't a big surprise. Anybody that knows me, but I probably don't like most people. Not that I dislike them. It's just hard to get on my radar to where I'm like, I like that guy or that gal. Right. Most people are just kind of NPCs in life. They just kind of cruise through. They're looking for the most comfortable thing they can do. And that doesn't really jump out at you as, like, that's a person to admire. But I remember when we got done interviewing, telling Brandon and I like, Ryan, like, that dude's got it. Whatever it is. Like, that's the kind of guy that if I was building a team, I'd want him on my team.

[B]

I appreciate that.

[A]

Yeah. And I ended up having a good picker. Cause here you are now. So tell everybody what happened from that podcast to where your companies are now.

[B]

Yeah, you know, I think at that time I had. Let's see, it was 2018, so that year I did 150 flips, and so I probably was over 200 at that point. You know, since then, I've done over 700 flips and wholesales. You know, we bought hundreds of rental properties with our fund. You know, some of my own. I started a bunch of companies thereafter. Some successful, some already shut down. So lots of ups and downs. But, you know, I think the main thing was I got on social media during COVID and that really took off. And, you know, ever since then, man, I've been making a ton of videos, ton of content. It's gotten a billion views online and throwing a bunch of events and other things. So, yeah, it escalated really quickly from there.

[A]

So you mentioned that you had some businesses that did well, others you shut down.

[B]

Yeah.

[A]

A lot of people are afraid to start anything until they feel like there's a guarantee it's going to work.

[B]

Yeah.

[A]

What is it about the way you look at it that gives you the courage to say, let's start it. If it doesn't work, let's just shut it down.

[B]

Well, you know, I'm an entrepreneur at heart. Right. So I think, like, the couch flipping was just an example of that, where it was like, well, I think this couch flipping thing will work. Like, let's try it. Oh, man, this is working. And then it worked for a good year and a half, and then I shut it down because I had a better opportunity. I started flipping houses, and that made me more money. And so, you know, not every business you shut down is necessarily because it didn't make money or is a failure. It's just like, your life changes, opportunities emerge. And so, you know, there were situations like that. Like, I had a real estate brokerage with 200 agents, and it was like, this is great, but it's not worth my time relative to all these other opportunities. And then I've had other things where it's like, oh, man. Like, these are getting me into lawsuits. This industry sucks now. This is not good. So now I gotta unravel this and take a reputation hit and deal with all this crap, and then, you know, just keep moving forward. And I think that that's kind of the key with great entrepreneurs is, like, you just keep moving forward. Like, failure is an inevitable part of success.

[A]

Mm. I would say that a lot of people don't want to become an entrepreneur because failure is terrifying to them.

[B]

Yeah.

[A]

Is there something different about your relationship with that than other people?

[B]

Well, I think that. I mean, I grew up playing baseball, and so failure is just part of the game. Right. You fail seven out of 10 times. You're really good.

[A]

Yeah, that's a great point.

[B]

And so I was just used to failing and losing and knowing that, okay, well, there's next season. I'm gonna train for next season, and we're gonna do this better. And I think that my entrepreneurial career is very similar, where it's like, all right, that didn't work. It's all good. That's just one way not to do it. Let's do the next thing and the next thing and the next thing. And so, yeah, I just look at failure differently. Like, I just think it's just part of it. It's not even a. It's not like an end result, which is how I think most view it. It's like, oh, I failed. That's the end of the journey. I'm like, oh, that didn't work. It wasn't even a failure. It's like, all right, cool. What are we gonna try next? What are we gonna try next?

[A]

Oh, that makes good sense. So baseball analogy. Pitcher tries a pitch, gives up a home run. Doesn't mean the game's over. Yeah, don't throw that pitch. I need to find something different.

[B]

Yeah.

[A]

I'm not.

[B]

I don't quit pitching because somebody hit a home run off me. I don't quit making content because somebody said something mean about me. Like, I just keep moving forward.

[A]

So you've got coaching companies and programs that people come to you to learn how to flip houses, how to be a real estate investor, which gives you a big database of information, kind of a nice algorithm with a lot of data in it. The students that do well versus the ones that don't. I'm sure that the way that they look at failure has something to do with that. Is there a pattern you've noticed with people where you can say, that person looks at it the right way and this Person doesn't to predict who's going to be successful.

[B]

Yeah, I think that most people, like you said, they don't even try. You know, they don't even. If we're using the baseball analogy, they don't even step on the field. They're just in the stands. They watch the game. They feel like they're a part of the game because they're there. And they talk the lingo. They talk about everyone else who's playing the game, but they never actually play the game, so they just stay fans. And so I think that those who succeed actually just play the game. Like, it's literally that simple. You know, when I'll talk to people, I'll be like, hey, did you make your cold calls? Did you make your offers? No. Like, that's literally the answer. You know, I had somebody at a workshop a month ago, and I literally asked him. He goes, man, I'm just having trouble getting started. I go, how many offers did you make this week? He's like, none this week. I'm like, how many offers have you made in the last month? He goes, I think I made one. I was like, you literally have zero percent chance of succeeding. Cause you're not even playing. You can't get a statistic if you don't play. And so I was like, until you decide to play the game, you will never win. So I think people just don't even play the game.

[A]

What keeps them out of playing the game? Game Fear. Okay?

[B]

They don't want to be embarrassed. They don't want to be embarrassed because everyone's told them they can't do it. You know, everyone around, nobody around them have had success. So they don't believe it's possible. You know, they've heard horror stories from people who, you know, failed. Like, even for me, I'll be like, yeah, I've lost millions on real estate deals. I literally say that on my podcast and everything else. I'm like, 20, 22 freaking sucked. I had that took 18 months to unravel and recover, and I still got some properties that are finally gonna unravel and be done with, you know, two years later. Right? And it's like, I'm willing to accept that, and I'm okay with it. But they'll hear it, and they'll be like, well, see, I told you. If Ryan's gonna fail, there's no way I'm gonna have success. And it's like, it's just part of it, you know, at the end of the day, yeah, unfortunately, I'm not Floyd Mayweather, where I'm undefeated, you know, I don't dodge fights. I'll just go and fight, whatever. Yeah, but you know what? It's like my winning percentage is 90% plus. So as long as I'm doing that, I'm going to make money.

[A]

So to the person who is afraid, who isn't taking action, they're not making the calls, they're not getting in the game. Do you think they just. Real estate investing is not for them or do you think that there is a different way of looking at it? Can you offer them advice for how they get over and get in the game?

[B]

Well, I think it's important even from a sales perspective and from a coach perspective to know who you're dealing with. Right. Because we know there are different types of people, right? There's analytical people, there's emotional people, there's, you know, all these different types. And so it depends who I'm talking to and what I would tell them. But typically we see that emotional people, like gut people, are more willing to just take chances because they're like, oh, I feel good, I'm ready, let's do it. They don't need proof, they just go by feel. Whereas analytical people are the ones who really struggle. So I'll talk from their perspective since they're usually the, you know, analysis paralysis type people, you know, for them, I think you need to come at them with logical conclusions that help them logically come to the decision themselves that they have to do this. For example, I would go to one of them and I would say, hey, are you comfortable with where your life is today? And obviously they probably will say no. They want to do better. Most people say that if they say yes, you're like, all right, well then there's nothing else to talk about, like, you're good. Do nothing different. Just keep doing what you're doing. So assuming they say no, like, I'm not making enough, I'm not keeping up with inflation, I hate, you know, working all these hours and I'm not building wealth. I need to do, you know, I want more freedom, I want, I want to spend more time with my family. I'll say, okay, great, so we agree that your current path will not yield those results with 100% certainty. There's no way you'll get those results on your current path. Yes. Okay, so you agree we have to do something different. Okay, so let's decide. What's that going to look like? Okay, are you going to get another job to start saving money? And buy some rentals. Let's play that scenario out. Okay, you do that. All right? You know, how many rentals could you realistically buy? How many hours are you going to work? What are those rentals going to make you? I mean, they're not going to make you anything today. So, you know, this is a 20 year plan. If you go down that route and you're going to grind it out for the next 20 years, do you want to do that? The answer is no. No, I don't want to do that. Okay, let's go to scenario two. Let's say you start flipping and wholesaling. Okay? Obviously there's pros and cons to both, but you could start making a lot of money, you know, with a flip or a wholesale. I mean, a couple of deals could make you $50,000, $100,000, whatever the case is. Would that change your life? Oh, man, that would totally change my life. Okay, so what do we got to do to get you there? You know, if we agree that this is the best path for your situation, then let's do it, you know, and so it's just helping them just knock out the things that don't accomplish their goals. That's just somebody who's not making enough there. There are people who are making 250 grand a year who are completely content. And I don't, I don't. I wouldn't say that to them. I'd be like, you're making 250, so what are you trying to do? Oh, I think I just need to build more wealth. Okay, well, like, let's just buy a rental here or there, you know, let's buy a single family. Let's invest in a fund. Like, your path is different. So I don't have any blanket path for anybody. It's like, what's your situation? Okay, I can tell you with 100% certainty, if you're making 60 grand a year, there's nothing. You better get a new job or a new skill. There's nothing you're going to do.

[A]

So let's start with that because that was sort of what my progress was like. I started off just basic job. First job was like basket Robbins ice cream. The only place I could get hired.

[B]

Yeah.

[A]

Then I moved next door to togos and made 75 cents an hour more.

[B]

There we go.

[A]

Became a shift manager at Togos. Learned how to kind of oversee people. Got a job at a restaurant where I made tips. I just kept making little base hits that were growing and growing and growing until I Got to where? Entrepreneur running a business. My heart is for that person.

[B]

Yeah.

[A]

Making the 50, 60,000. Shows up every day, goes through the motions, hopes that the world will reward them. And it doesn't come.

[B]

It ain't going to happen.

[A]

What advice do you have for that person who needs to get to the point where they have a job making 250,000?

[B]

Yeah, I mean, I would, I would just like do a reality check. You're not gonna make more than 60,000 at Togos. It just is what it is. So until you're willing to go get a better job and keep moving up the job ladder and go and make 90, then go make 120, and then you gotta develop new skills. Cause your current skill set doesn't. It's not worth 250. So you're either gonna do that or you're gonna go create your own business. And you don't have to quit your job. You can do it on the side. You know, like most real estate investors start working another job. There are very few people who are just like, they've had. They've saved up enough reserves so they can just go quit. And there are very few people who have literally no money and nothing going on and are able to just start flipping and wholesaling because they just figure it out. Like, both those things don't ever really happen. What happens is somebody has a job, they're. They're making money, they're living paycheck to paycheck. They decide to get into real estate flipping and wholesaling predominantly, and they figure out how to make it work. Like that's just what it always ends up being.

[A]

You mentioned skill building.

[B]

Yeah.

[A]

You see skill building and the wage that you get paid as working hand in hand.

[B]

Yeah.

[A]

Why do you think more people are not focused on improving their skills and they're just trying to find a better.

[B]

Job because they don't understand how value is determined. You know, value is determined by, you know, how much value you create for a company or for a person or whatever else. So it's like, why is some coaching worth $100 an hour versus $10,000 an hour? Well, they're getting far more value for the things you're teaching to that person. Right. And so I just think people who have jobs, you know, they look at what the company's making, let's just say, and they're like, dude, I'm working over here at this company and I'm only getting paid 50 grand a year. And, you know, the company's making this. I Should be making more. And it's like, no, your job is what it's worth. I use this example, and I'm like, I don't pay a contractor more money to renovate my house because I got a great deal on the house. If I got a great deal on the house, that's irrelevant of what material and labor cost to fix it up. And so skill and talent is just worth what it's worth. And the market determines that.

[A]

And you think that your background as a baseball player, where there is no way to hide. No way to hide, had something to do with this perspective you have?

[B]

Yeah. I mean, think about it like, you get paid a contract based on your skill and the value you create for the team. You know, I can't sit here and complain because I was a 28th round draft pick and I got paid $20,000 signing bonus, and every other guy you know in the first round was getting paid $2 million. I can't sit here and be like, bro, I should have got paid 2 million. I'm not as good as that guy. Yeah, I need to get better skills if I want to go get that money.

[A]

Yeah, that's. I think that's what's missing. When you and I talked last, we sort of talked about how life is a competition.

[B]

Yeah.

[A]

And that is a very uncomfortable reality for anybody who is not competitive or isn't comfortable with competition. It just isn't a worldview that I think a lot of people like to think about.

[B]

Yeah.

[A]

But dating is a competition for sure. The girl out there is trying to figure out who's the best guy that I can get. If I'm going to have to commit to somebody and submit and give myself to them. And the guys are thinking, who's the best girl for me? You're competing with all the other guys, and she's competing with the other women.

[B]

Yeah.

[A]

You're competing every day. Go to work with the other employees in your company.

[B]

Yep.

[A]

You got to expose the competition in a way that was brutal. And you realize they're looking at my batting average, they're looking at my home runs, they're looking at my fielding percentage. The better I do, the more I get paid. And if I do not increase those skills, I don't make it to the big leagues, whatever the case would be. Just for people who struggle with understanding what you just said, is there any piece of advice that you can give them?

[B]

Well, I would also say if you're an employee right now, they're not also looking at your results, which would Be past performance, what you actually did. But they're also looking at your projection. So what can you develop into? And so like, one of the things I faced playing was that I was always the smallest guy on the team. I'm a normal size human. I'm 5 10, 1 90. You know, these other guys are 6 foot 5, massive humans, the most athletic people you've ever seen. They're throwing 100 miles an hour, hitting bombs, and it's like, even if I outperform them statistically, they still had higher projection. And so you're not only facing past results, but you're facing future projection. And so if I'm looking at an employee and somebody that I want to invest time and resources into, yes, I'm looking at what are they doing today. But I'm also like, what could they develop into? You know, do I see myself grooming them to be at a bigger position because of their character, because of their work ethic, because of their natural ability, because of their loyalty, because of how they carry themselves and their culture fit. So there's a lot that goes into it beyond just results. So I would just say, you know, to anybody who is in this position, you just need to make yourself more valuable. That's literally all it comes down to. If you can make your company more money, you'll make more money or a competitor is going to take you.

[A]

Yeah. As a business owner, I am sure one of your struggles is how do I find good people that can do good work?

[B]

Yeah.

[A]

For the people that are working in a company, what they typically say is, how do I find a good boss that's going to pay me more money? We're missing each other here.

[B]

Yeah.

[A]

The seller has an idea of what their house is worth. The buyer has a different idea. You don't get a deal done. Do you see this as a growing problem in the American job market? That what the people who are trying to build wealth want versus what the opportunity is, which is what the business owners are having. And you could apply this to real estate investing. What the market's offering you is different than what you're willing to put in.

[B]

Yeah. So once again, it goes back to a skill that they currently lack, which in this case is self awareness. So most people are so focused on themselves and what they want that they are not aware of anything else going around them and how people are perceiving their actions. And so they're not able to properly see, oh, objectively, I'm not that valuable. Like, people just don't have the self Awareness to say that. And it just is what it is. And so it goes back to learning a new skill. Become self aware. Don't get butt hurt. Don't get offended that, you know, your boss is telling you you're only worth this. You know, do something about it.

[A]

Right.

[B]

Don't demand a raise just because you want a raise. Like, prove it through your value.

[A]

Right? No. It makes me think of a baseball player who says, I'll go take extra BP when they give me a raise.

[B]

Bro. You want to hear a funny story? I'm going to ask you a question. Okay. And then I'll reveal the nature of this. Okay. Actually, I'm going to read it to you.

[A]

All right?

[B]

All right. So I don't know where the source of this came from, but my business coach sent it to me. He. He saw it on Facebook. Okay. So you tell me who you would rather have in this scenario. Okay. Help. I need some business advice. I have an employee that we hired three and a half years ago. She's always laughing and cutting it up, but hasn't followed through with anything we've asked her to do.

[A]

I saw this on Facebook yesterday.

[B]

Or she said, do you know the answer?

[A]

No. No, I didn't read the whole thing.

[B]

Okay, so she hasn't followed through with anything we asked her to do or she said she would. Her resume was a little weak, but she checked a lot of boxes and seemed nice enough, so we gave her a chance. Her performance has not been good. Half the time. I couldn't even tell you what she's working on. Now she's asking to be promoted as her supervisor is retiring. During her review, she said that if she does get promoted, she will start to do all the things she was promised. She promised when we hired her. She seems to have no interest in doing them right now, even though she has the authority to do so. We also have another applicant who has worked with us before in a supervisory role. He did a good job, but some people didn't like him. He was a little rough around the edges, but he got the job done. Our competitors respected and possibly feared him, which really bolstered our standing in the marketplace. So what would you do?

[A]

You want the second person?

[B]

You'd want the second person. Right. So you would probably rather have Trump versus Kamala then.

[A]

Yeah, Trump's gonna rock the boat, but he's gonna get the results.

[B]

Right? And that's what the whole, like, story illustrates.

[A]

Oh, I see. They're getting at a political thing there.

[B]

Yeah, the story illustrates she's Been there three and a half years. She hasn't done anything. People don't even know what she's doing.

[A]

Right.

[B]

And now she wants a promotion. And she says, once I get the promotion, then I'll start doing all the stuff I said I've been doing. And then, you know, but until I get the promotion, then I'm not doing it.

[A]

See, I think this is an actual spiritual situation where it is a power struggle over resources. This is how I've come to see this problem. The person who says, I will try harder when you give me what I want is trying to put themselves in the alpha position where they dictate what happens. So you see this a lot with the way that sort of America's economy has been going, that we need more regulation in the marketplace, we need higher minimum wage. California just bumped up their minimum wage to $20 an hour.

[B]

Right.

[A]

That's very popular with the workers whose vote you're trying to get because they see it as free money and they don't understand that's going to make everything expensive and you're not actually going to win. Right?

[B]

Yeah.

[A]

But it puts them in a position where they have the power versus a free market capitalistic approach that says the power is in the hands of the consumers where they spend their money. The business owner has to figure out how to meet the needs that they have, and the employee has to figure out how to meet the needs of the owner to help do that. What it's really coming down to is, are you providing excellence? Because money will flow to excellence, whether you're the baseball player that's playing great, you're making the best taco in town, whatever it is, and you need people on your team that are all pursuing that excellence. When you live in that world, that you understand that power is not in you to make a demand, the power is on. You are empowered when you pursue excellence. And I bring this up because in the world of real estate investing, it has become very common to tell people that there is an easy way to do this, that there is secret tricks that they're going to tell you. You've seen this too, right? Like if you just follow my channel or buy my course or whatever, I will give you the hack. The way around it. AI is going to solve this problem for you, so you're not going to have to deal with it, right?

[B]

Yeah. Yeah.

[A]

And then you or I are dealing with these people. They're coming to me as a real estate agent or they're trying to buy a house, or they're wanting to learn how to. To tell them it's going to be hard. You got to build your skills.

[B]

Yeah.

[A]

They're going to say, that's not why I came here. I'm paying you to show me the easy route.

[B]

Yeah.

[A]

Which there isn't one.

[B]

Right.

[A]

I'd like to talk with you about how you think that the real estate influencing space came to have this problem and what advice you have for people regarding who they get their content from.

[B]

I have a lot of feelings on this, so I'm sure there's people listening who probably don't like me, and that's all good. So let me just come at this from, like, an objective history standpoint. So, number one, I understand now, as a digital marketing guy, why mechanisms, we call this USPs unique selling propositions. Why, you know, secrets and AI and the next big thing, because it just sells it. It really does sell better. So I understand why it happens. On the flip side, I also understand, even with me, why I've been an anomaly, at least selling education, because I've never had, like, a secret mechanism. I'm like, get deals. That's it. Get deals. If you can get deals, you can flip, you can wholesale, you can keep them as rentals. It all starts with just getting deals. There's no secret about it. Just get deals. And I'm lucky that it's worked because a lot of people who have, you know, done our coaching and everything have just bought into the directness of it. There is no secret. It's like, guys, I'm gonna show you this new thing we're doing. You know, we're doing Facebook ads, for example, right now. And it's what I believe is the best thing right now at the very moment. But it may not be the best thing two years from now. It's going to have its lifespan of being a great marketing strategy. And then, you know, whatever happens, happens. Right? I use TV for years, and it's not like it was a secret. It was just what was working at the time. Cold calling was working at the time. That was back in 2018, I was doing cold calling. You know, I got my first Airbnb in 2017, before it was even this big industry, right? And I was like, dude, Airbnb is really cool. I don't know why no one's doing this, you know, and so I understand from a marketing standpoint why it happens. Now, that being said, you know, how did all this even come about? Well, I think bigger pockets plays a huge role in this. So you Know, let's just say 15, 20 years ago, the only way to get information was at these events. You know, they had the free events that then turned into a workshop that then turned into a 30k upsell. And that was the market for literally learning real estate education. And, you know, obviously it gets a bad rep, but if you, like, look, in hindsight of 20 years ago, sure, there's lots of people who it didn't work out for, but there are lots of people who it did. And that was the only way to get information. So if you wanted to learn how to do any kind of crazy real estate stuff, it's not. It was not regularly available. It was. There was no. All these books. There was no. They don't teach in real estate school. So I understand they were filling a spot. Then BiggerPockets comes around and they say, hey, we're going to make this information freely available. And they do. And so they start to take a huge market share of what was going on. And I was a. I was a product of BiggerPockets. Like, I started listening. I'm like, oh, snap, I can learn how to do this. So then that plays a role. BiggerPockets is this big thing for almost a decade. And then Covid hits and you start to see this big shift because all those event companies went out of business because their business no longer could operate in Covid. Covid also led to the rise of real estate influencers that didn't really exist during that time.

[A]

Right.

[B]

There was you and Brandon Turner.

[A]

Yeah.

[B]

There was not really anyone else. So then Covid exists and happens, and then there's the rise of TikTok and Reels and YouTube. And then guys like me come along and. And we start making content guys who are doing heavy volumes of real estate. Then there's guys not doing anything, talking about it. Right. And you start to see the demand for coaching. And so I think those event companies left such a bad taste in people's mouth that bigger pockets, okay? So the event companies filled a massive void. Nobody was teaching how to do this. So they came in filled demand. People got a bad taste. Bigger pockets comes in, fills demand. But I think bigger pockets ended up going on the far end of the other spectrum where they're like, we ain't gonna sell you nothing. And all these people are like, no, we. We do want coaching. We just want it from someone we.

[A]

Trust so they want somewhere else to get it.

[B]

And so we come along and they're like, well, I see you, I trust you. I'm Watching your content. I'm gonna go buy coaching from you because Biggerpockets isn't doing it. So we filled a new demand that Biggerpockets didn't fill. And now BP is starting to realize they should have filled it. But nonetheless, now we're in a whole new era where everybody's pissed at influencers. It's basically all the same. It's just happening again. So now everybody's mad at influencers because guess what? None of us are perfect. We all screw up. I've screwed up. I've lost money on deals. I've had businesses fail. And I'm not the only one. Right? And so the problem is when you become known, your failures become public. Every single entrepreneur has massive failures. Oh, yeah, you just don't know about it.

[A]

Right?

[B]

You only know about the influencers because all the other people making failure videos and all this crap make money doing it. So they are themselves a whole different niche. But nonetheless, I think we're entering into a whole new age where there's going to be somebody that fills this new demand where influencers and education is actually on the decline.

[A]

And you think that's because people lost trust and credibility with some of these influencers?

[B]

No, I think people have lost trust, period, with everyone. I don't think it's an influencer thing. I think people don't trust anyone. They don't trust the president, they don't trust the government, they don't trust influencers, they don't trust businesses. They don't trust anyone. We are at the lowest point of trust in human history.

[A]

And what do you think caused that?

[B]

I think there's a lot of things. I think that once again, social media makes everything more public. So, like, I don't think the world has gotten any more sinful. We were talking about, you know, Adam made from the apple, like there's sin in the world. There's drama. That's been happening since the beginning of time. I think all social media did was expose it. And because there's so much more exposing of companies and people and problems in the Middle east and presidents and the government covering stuff up, now the sin is out there. And now people just don't trust. That's what I think.

[A]

I've thought about this also. A lot of the sins that if an important person, an influencer, a popular person does that, we just rip them apart for. Oh, yeah, your best friend in high school did that 10 times as often. The homie you work out with at the gym says worse things than that. In the locker room. There's something about when you're famous, we expect you to have a higher moral compass than a regular person. But people are people. They have the same drive, they have the same desires. I wish we talked about that more often. Just the expectations that you have from some of these people, do you have those from everyone else in your life? And it's got to be that there's this hero complex that I want to listen to Ryan, or I want to listen to whoever, and I want them to be better than me. I want someone to look up to. Do you think that's unhealthy?

[B]

For sure. I mean, like, I was looking at it today. Today's Kobe Bryant's birthday. And it's like, man, Kobe could remember for so many great things. But then, you know, he was cheating and he had this thing and that thing, and like, you know, it's like, what are you going to remember him for? Yeah, well, guess what? He was just a human, like all of us. Like, he dominated and did so great and so many things that he screwed up, too. So, like, anytime. And I've just come to the grips with that, too. And it's why we need Jesus. It's like, dude, you could criticize me for every failure I've ever had. Guess what? There's going to be many more. If I'm still doing business and I'm still living life like I am never going to be perfect. And guess what? That's just what comes with being known. You know, I was interviewing a pastor, his name is Darius Daniels. And he goes, we call it the backside of a blessing. So we all want the blessing. Hey, I want to make millions. I want to be famous. I want it. Whatever, right? But what's the backside of that look like? Oh, the backside of being famous is everyone knows everything about you and what you do and how you fail and the extra temptation. Criticizing all the. All the temptation, everything that comes with that, you know? Oh, you make money. Well, the backside is you pay more taxes, you have more people asking you.

[A]

For money, more stress and anxiety in your life.

[B]

You got more employees, you got more overhead. So do you want the big business? You got to understand what happens on the backside, too.

[A]

That's a great point. I mean, it's such a good point. I was thinking, when you talk about Kobe with cheating, it's very easy to judge him. It's obviously wrong. How many people are in Kobe's position with women?

[B]

Who's going to be the most famous basketball player in the world? Good looking Incredible shape championships. Freaking nine out of ten dudes ain't going to be able to handle it.

[A]

Yeah. My high school basketball coach, he had played at University of the Pacific. His dad was the head coach there. He was really wise for the age he was when he was coaching us. And I remember he said, david, one out of every ten men can handle adversity, and out of them, one out of every ten can handle prosperity. It is an incredible. It's been much harder for me to handle prosperity than adversity.

[B]

You know, I've. People have asked me too, like, who are my mentors and everything else. And the one thing, the only consistent mentor I've had in my life is my pastor. Because, man, dude, like, it's crazy the amount of people that have walked through the store, like financial, business, entrepreneur, Just the best of the best. And I'm fortunate to know these people and to have interviewed them and be friends with some of them and all that. But the person that keeps me the most grounded is my pastor because very few people are looking at it through the lens that he's looking at it. And the one thing he's always, like, reminding me of are the little things like that. It's like, hey, you know, make sure you don't get a big head. You know, make sure you don't do that. You know, hey, how's your spiritual life? Are you. Where are you getting tempted? Like, what are some things that, you know are happening right now that you're not really telling people about? You know, and so I've just realized that, you know, what's the saying with new levels come new devils. And it's like, it's true. It's very true.

[A]

And you got to keep that in mind when you hear about somebody else's sin. Right. The. The person that's struggling, life's just kicking them when they're down. They can't catch a break. I expect that person to be a little more cynical. Is it a sin? Yeah. Can I understand it? When I'm. Everything I touch turns to gold for five years and I'm in a good mood all the time, it's easy for me to be there than the person that's getting kicked, going through it. Yeah. And the same when you hit a bunch of success, are they going to sound arrogant? Are they going to be pushy? Probably. Are you praying for them or are you judging them because it makes you feel better than the situation that.

[B]

Yeah. Are you hoping they fail?

[A]

That's just waiting. Yeah. So when it comes to different Influencers. You got people that are out there telling people, flip houses, you're going to make more money. You got people that are saying, start a business and invest the money into real estate. You got people that are saying, buy a couple duplexes and quit your job and live off the cash flow.

[B]

I think anything that's quit your job and live off the cash flow of rentals is not true. Like, I just. That part is I've. I know only a handful of people that have a big enough rental portfolio that truly live off of it, and that's all they do.

[A]

And they're not making content.

[B]

They make because they bought it 30 years ago.

[A]

Yes. So this is why I bring this up, because I saw a video that you made saying, like, you've all been lied to about cash flow.

[B]

Yeah.

[A]

I've said this before, and I've caught some heat from our. I say our community. The other real estate influencers out there.

[B]

Yeah.

[A]

Do not like that. I'm telling people cash flow is not bad. It is wildly unreliable. You just, you don't know month to month what's going to happen. And to put your family's well being on a foundation that you are trusting your tenant's gonna pay that rent, that you're not gonna go into recession where they're gonna lose their jobs, that things are not gonna break. It's so irresponsible. I'm not against cash flow. I am against putting all my chips on cash flow. You've been in this game for a while. More importantly, you know a lot of other people in this game.

[B]

Yeah.

[A]

What do you have to say about this entire idea that influencers use to get clicks telling people, you can quit your job, you can get a girlfriend, you can have a way better life if only you had some cash flow.

[B]

Dude, if you need, if you need rentals to get a girlfriend, we got bigger problems, okay? You need, you need to step up your game and get in shape and start getting out of the basement. But nonetheless, I think that there's a few things. So number one, goes back to this whole marketing idea. The easiest sell in history is saying, bro, passive income, retire, do nothing. Yep, I'll sell that. You could sell that. 10 times out of 10 people buy double. Like, it'll buy the same thing twice if you could sell that. So number one, it's the easiest thing in history to sell. So that's why they say it. Right. I think that also, two, it plays to everyone. Okay? Because, for example, if you have half a brain, you know that that's just not true. And so, you know, there are people who are like, ah, I mean, that's not true. But, you know, I would like some rentals and whatever the case is. But you have basically half the population who's like, oh, if there's any chance this is true, I'm buying. Yeah, I'm in. Right, right. The other half is like, yeah, I mean, whatever. So if I go into it and I'm like, hey, guys, you can act. You could make a million dollar slipping houses. Like, it's possible. But let me tell you, it's extremely hard. It's extremely risky. But if you got the stomach for it, you know, there is a blueprint to do it. It's like, all right, how many people are taking the pitch? I mean, there are some, and the people who do, you know, they're of a different mindset. But definitely Joe Schmo, who's sitting on the couch, ain't taking that pitch.

[A]

Right.

[B]

But it's the truth. It just is the truth about flipping and wholesaling.

[A]

Something I've noticed is you've got all these different influencers. You've got all these different motivations. Some of them are honest about what motivates them to make content, and some of them are not. If you're listening to someone who's straight up telling you, I am doing this so that you take my coaching program, you use my business, you invest in my fund, whatever. The thing is, I'm way more likely to trust that person than the person who goes, you know what? I'm just doing this to add value to your life and I want to give back. And I'm spending all this money on editing in a studio and all this time, but I live off my passive income. I don't even need this. This is just something I do to help all of you. I don't trust that person as much because no human being is actually motivated by those things. Usually the people that tell you they're living off their cash flow are living off their course sales and their YouTube monetization.

[B]

Well, technically, it's cash flow. It's just not.

[A]

Just not from real estate.

[B]

It's just not the cash flow. So, I mean, it's somewhat true, but no, I mean, I'm with you, man. I. I try to be as transparent as I can and everything that I do, you know, I try to outline all the risks that I can. And, you know, if it doesn't work, it doesn't work. I mean, that's just. That's life. And, you know, I was telling people this at our last workshop. I was like, hey, guys, okay, what's the number one goal of starting a business? And they're like, oh, it's to have purpose and impact. And I go, no, it's not. Okay. The number one goal of a business is to make money. That's it. That's the number one goal. Now, purpose and impact and all these other things are secondary because guess what? You're not gonna. You're not gonna keep doing it if it doesn't make money. Okay, you know what we call something for purpose and impact that doesn't make money? It's called a nonprofit or a ministry. Yeah, it's called a nonprofit, or it's called a hobby. Okay. Those are both excellent, but they are not businesses.

[A]

But it is so much easier to sell a business if you combine it with a ministry and altruistic motives.

[B]

100%. But once again, to give an example, I truly do love making content. But if it did not lead to making money, I would not make content. It would therefore become a hobby. And I don't make. Content's not a hobby for me. It's a business. And I don't throw big events and risk hundreds of thousands of dollars to throw big events and not make money. As much as I love getting everyone together and, dude, it's super impactful. We change lives. And I believe everything that we're doing. If it didn't make money, I would stop doing it, because it just can't keep going. It just financially would never work. So everything must first start at the business level of how does this profit? How does it make sense? Okay, great. We got a viable business. Now, if purpose and everything else align with that, amazing. But if it doesn't, it doesn't mean you can't do the business. It just means, hey, this business is purely to make money and service customers and, you know, do what we do. And we want to do it with excellence. But I. My subject, for example, flipping houses. I don't care about my flipping houses. It's not something that feels purposeful. It's not something I get. I haven't been to any of our flips, but it makes money. And I can now go fill the other things that give me purpose with that. So therefore, that's why I've done it for the last decade.

[A]

Absolutely. If you're listening to an influencer who's telling you that they're getting nothing out of this and they're not making any money, then you are their money.

[B]

You are the product.

[A]

You are the product. That's exactly right. They are a parasite and they need a host. And your clicks and your views and your support is monetizing their channel or their advertising or whatever it is that's going on. And there is more of that now than there's ever been. Because like you beautifully said. Biggerpockets was the first person and then everybody else joined into that space.

[B]

Well, let me tell you something else I think is happening. So I said that the landscape of education is changing. The landscape of content is changing too. And so when I look at content today versus five years ago, I can't say that I would recommend everyone should get into content today. And the reason is because it's significantly harder. And I don't know that they're going to stand out the way that they would have five years ago if they just got on TikTok. Anybody could have stood out. And, you know, I look at, you know, some of these guys that are my friends who got on YouTube early and they just started talking about finance and stuff. Guys like Graham Stephan and, you know, meet Kevin. And these guys are all my friends. Meet Kevin. Spoke at my last event. Right. And so they don't, they won't mind me sharing this, but it's like they got lucky. I don't even say they got lucky, but they got, they caught perfect timing.

[A]

Just like bigger pockets that you mentioned.

[B]

Earlier, they caught perfect timing where there was this unfilled demand. And they said, well, dude, we'll start talking about how to invest, we'll start talking about basic financial principles and we'll make a ton of money on AdSense and sponsors and everything else by doing it because they didn't have, like, businesses to funnel people into. And so they did it. They crushed it. They got millions of followers. They've done really well. And because of that, they've also stayed relevant throughout the years. They still make good content and so they're good. I don't think that person can happen today.

[A]

Right.

[B]

They cannot jump in today with no track record, no experience, and compete in today's market.

[A]

No skills. Talking in front of a camera is a thing you need skills to do, do well.

[B]

I think just the business world today of entrepreneurship and social media track record is now a prerequisite. They could not have just started talking about personal finance without having done a ton of stuff.

[A]

Yeah, you want to, you want the Alex Hormozi, you want the person who has a track record of doing it because you're trusting the content that you're hearing.

[B]

Yeah. And so that's why I've seen like very few in the last couple of years really just come out of nowhere.

[A]

Right.

[B]

Like, I can see Alex is a guy, you know, Cody Sanchez, my friend Dan Martell is doing great. You know, if you want to say I came up in the last couple years like that, then cool.

[A]

But there's not a lot.

[B]

But there's not a lot. That's my point. Right. And I had to do a lot of stuff in order to have credibility to have anything to say.

[A]

Yeah.

[B]

So I think the days of somebody just being an education creator and just like saying, hey, I want to just do YouTube and talk about money and finance and stuff, you can't do that anymore. Nobody's going to watch because there's way better options today. That didn't exist five years ago. Cody and Alex and those guys did not exist five years ago. So you had to choose the other guys. Now you don't.

[A]

Now on that same topic of it was easier to do this five years ago. It was also easier to make money in real estate five to ten years ago, bro.

[B]

I wish, yeah, I wish it was Covid right now for real estate money.

[A]

So you know people, I know people, we don't need to say their names, but I mean, there are people that are hurting bad in the real estate space. Those are not going to go on a YouTube video. Those are not going to go on Instagram all the time. But like, bad, bad hurt. Just losing properties, syndications they put together, not paying out their investors capital calls. I'm going to be talking more about some of the properties that I bought. I ended up in a bad situation where I bought luxury properties, grade A neighborhoods, got great deals. The city came in and was like, you can't do an Airbnb. I was like, there's no law that says I can't do it. And they're like, yeah, we know, but.

[B]

We'Re going to make one.

[A]

We're going to make them. Yeah, we are going to come in. I mean, they're tagging me up for stuff that was done in the 40s that they claimed didn't have permits on these properties. This making stuff up. And I've got like four properties over a million dollars where this is going on. It's been two years and I'm stuck. They won't let me rent it out, they won't let me sell it because it's been red tagged. You can't get out of it. And I know I'm not The only one who's in this spot.

[B]

Yeah.

[A]

What do you have to say for the people that are beating themselves up because they're not getting 700 doors in two years? Like, the person they're hearing on the podcast about today's market that they're not being told by people that are not in the game like you?

[B]

Well, I would say a few things. So, number one, the last two years of real estate have been extremely hard. And I've shared that on mine. And like I said, I've shared that. Dude, I lost millions on house flips that just, like, I didn't buy them bad. Same deal. Like, you know, I bought them at, like, normal things. We've been doing well for all these years. And then, you know, they double interest rates faster than ever in history. And, you know, for house flipping, that's the death nail right there. Property sat, they went down, and guess what? I had to pay back all my investors and come out of my own pocket to close all these deals. Like, every flip, I had to write a check to close it. And that was extremely brutal. And it sucks. And, you know, thankfully, most of my syndications have gone well. I got one that's been a major headache. But I've told the investor, I'm like, guys, this is what it is. Like, I don't know. It just sucks. And we're going to do everything we can, and, you know, we'll find a way to get this thing sold and be done with it. And, you know, we'll figure out the chips whenever that happens. And so I think that, number one, when you're going through something, having transparent communication is important, and not just as an influencer, because most people aren't influencers. But if you're having a problem talking with your investors about it. And just being transparent is key. And, you know, I've had a lot of students who, you know, went through a ton the last two years, and I've always told them that. And they're like, well, you know, they're blowing up my phone and all this stuff. And I'm like, bro, just tell them what it is like, because they're blowing up their phone. Cause they're unclear. You're not answering. You're not telling them the situation. But if, look, this is the situation, it sucks. You blowing up my phone isn't going to help it. It just is what it is, you know, and the market is unlike what we paid, you know, when we bought it two years ago. Yeah, it's a different market. You know, it sucks. And we're going to do our best to figure out how to salvage the deal and get it sold and do whatever, but this is what it is. It's not looking good. And so, you know, from there it's just like, well, you know, we need to get paid and we got to do this. And it's like, hey, I mean, right now, this is what it is, and this is what recourse looks like. I mean, you can do whatever you want. But for me, even, and I've said this too, it's like in our one syndication, that's tough. I have over a million dollars of my own money into it, so I didn't have to do capital calls. I literally was the capital call. And it just is what it is. I'm like, I want my money back more than everyone. I'm the biggest investor. And it's like, that's life. And so I think transparency matters. I think that. I don't know, just hearing it from guys like you or me saying, dude, we're going through tough things. It's okay.

[A]

Yes.

[B]

And, you know, assuming, you know, whatever, it. Let's just say it fails. Okay? Are people going to talk crap? Are those investors not going to want to invest with you again? For sure. Could there be legal ramifications? For sure. It doesn't mean you got to quit, though. That's my point with all this, is you just keep going. You know, you don't let one bad deal define you. I was talking, I was interviewing my friend Thatch Nguyen a couple of months back when he was speaking at my event. And, you know, he was telling the story about how, like one of his first deals, he raised like $10 million and he lost it all. Everyone lost all their money, and it sucked. The deal went south. Lots of things happened that were unforeseen and it was brutal. And he had to deal with it. He had to learn to recover. And obviously he's done well for himself since then. But it's just like every single real estate investor I know has dealt with a big L if they've done any amount of volume. I mean, you can't do 700 transactions and take no Ls.

[A]

Do you think that the last 10 years of red hot monetary policy, interest rates being low, quantitative easing, real estate market being fueled, led to unrealistic expectations of real estate investors?

[B]

For sure. For sure. I mean, when everything's popping, you know, we all expect just mega hits and home runs on everything. And when the party stops, it's just like, oh, well, this Sucks, you know, you screwed me. It's like, well, I mean, the party stopped, like. And I think also too. I mean, this is also my opinion. And it just varies from person to person. But, you know, there's a level of accountability from everyone involved. You know, there's a level of accountability from the operator, from the investor, from, you know, everyone. And it seems like a lot of times too, when things go south, everyone blames the operator. And I mean, it's easy to say for me as an operator, but I'm also an investor on different deals and different things that I've done. And I just understood. I take accountability for myself. If it doesn't work out, I'm like, yeah, I mean, I lost. It is what it is. I'm not gonna blame anyone else for my loss. It is what it is. That's just how I see life.

[A]

Do you think people get into deals that go south where maybe they put more money in than they should investing with someone else, or they bought it themselves and fear of missing out motivated that? Because they're listening to all these Instagram videos and Facebook posts about someone signing at the CL closing table.

[B]

I get that. But you gotta take accountability for yourself. Of course, if you got fomo, that's on you.

[A]

Yeah, that's what I'm getting at here is, is it okay when you see all of the social media posts about how great someone else is doing to take a step back and say, this isn't real, they're only gonna show their wins. I need to stay on my path and not be influenced by what I see everyone else doing in their YouTube videos.

[B]

Well, you know what's funny? This just made me think of something. But, like, I remember I used to get mad at, like, the whole accredited investor thing because, you know, with most funds, you gotta only do accredited investor.

[A]

Because it makes it harder to raise the money.

[B]

Well. And, you know, it just is. Like, there's people who want to invest and they don't have the ability to invest in certain deals because they're not accredited. But, you know, I used to think that when the market's red hot and it's like, man, dude, these people can't get into these deals.

[A]

Yeah, they feel like it's unfair.

[B]

It's unfair, right. And you'll see that it's like, the rich get richer. So you see that narrative. But now being on the other side, I see it because, once again, right, if something goes south for an accredited investor, you, like, by definition, have accountability and wherewithal to understand what you are investing in, you know, you're a millionaire in most cases. Like you've made money, you've made investments and so you know, you have the cognizance to, to make good and you.

[A]

Should have the financial well being to absorb that loss.

[B]

Exactly right. And so I understand why it exists now. And then I understand like ye, if somebody in your case like you're talking about, if they invest their life savings into a deal and one deal and it doesn't work out, it's like, but even then, like I look at that and I'm like, my first flip, I had to max out my credit cards for $50,000 and spend 50,000. I didn't have to get that deal going. And it was the only way out, it was the only way I was gonna get going. And I had a choice, either do it or I don't. And I knew perfectly well that yes, there's a chance I could fail and guess what, I could lose everything. But in my mind it was like, well, I'm already broke, I'm not losing anything. The worst case is I'm gonna go bankrupt and whatever happens, happens. But I'm still broke, so I might as well take a chance. So even then it's just like, I don't know, people just need to take more accountability for everything that they do. Myself included. Right. Like, you know, I gotta look at too. Hey, if I'm talking about this is this great opportunity and it ends up not being, you know, that's something I have to live with the rest of my life now because there are going to be people who took my advice and it didn't work out and it sucks and I'm going to have to live with that. And you know, and you don't like how it feels. And I definitely don't like how it.

[A]

Feels it's going to lead to changes so that the next time you don't do the same thing or you do it better 100%.

[B]

And so, you know, all my failures have made me better. But that doesn't mean that it didn't make other people better because people will get hurt from your failures too.

[A]

For years investors have been told the purpose of investing is to buy a cash flowing rental, get a whole bunch of them, and now that cash flow will allow you to quit. And cash flow has been what everybody is pursuing. And for years it was out there. I mean real estate investing was kind of a secret for a while. You could go out there. When I started in 09, 2010, it was like this one has a 15% return, this one has a 22% return. Which one's the best cash flow? That was how we analyzed.

[B]

Yeah.

[A]

What do you say to the person who's out there looking, banging out this analysis, putting stuff in a bigger pockets, calculators are trying to find that cash flow and nothing's cash flowing.

[B]

Better learn to flip or wholesale. I mean, that's that, that's the truth. Like this is, my belief system is that you get rich from finding undervalued deals in real estate. I don't think you get rich by buying at market deals, trying to make 200 bucks a month. I don't think you get rich because you create a finance a deal and you pay above market value. You know you can, but it's going to take a long time for either of those scenarios to play out in your favor. And you have no exit strategies the next five to ten years until you get equity from just principal pay down and appreciation and everything else. So if you go into just buying a normal house that's at market value or creative finance deal at.

[A]

Because of cash flows. Right.

[B]

Because of cash flows. Right. You have no exit strategy for the next, you know, five to 10 years. Basically people say, well, you could do, you know, wraparound. You basically have none. Okay. If you buy a deal under market value, you know, you get 20% off, 30% off. You have every exit strategy in the world. Odds are it probably cash flow is better than the one that's not 20, 30% off. You can flip it, you can wholesale it. If you do want to just keep it as a rental and sell it two years later, you have the ability to do that. Because you didn't pay market value, you're not going to lose money, you're going to make money. So I just think real estate comes down to getting great deals. And that's just as I've gotten older in the game, I'm just like, guys, it's really simple. Just get good deals. Just get deals under market value, like that's it. And also too, one thing I've been telling people is like, I'm not pro flip. I'm not pro wholesale, I'm not pro rental, I'm just pro being a real estate investor. And I'm pro doing whatever is best for that period of time.

[A]

Love that.

[B]

And so right now I'll give you a great example. So I haven't bought a rental in Vegas in like a year and a half because every time I get a deal and we've done Lots of deals. It's like, do you want to flip it and make 40k or hold it as a rental and make negative $500?

[A]

Yep.

[B]

What am I going to do? Like, because I want to accumulate doors, so I'm going to just buy bad deal. Like, they're not bad from the sense of they're bad as a rental, they're bad as a rental, they're great as a flip. Another crazy thing that's been happening is I'm actually flipping way less than ever. So, you know, when I was on bigger pockets, I mean, I had like 50 to 70 flips going at that time. And I carried 50 to 70 flips all the way from 2018 through 2023. And you know, getting burned when the market turned changed my mind. Like, you know what, I don't need to be carrying 50 plus flips all the time. I don't need to be taking that much risk. Let me start wholesaling more. So I started to wholesale more and then we started to do more novations and now, you know, right now I probably have like eight, you know, flips that we own. Whatever. They're in just different cycles. Right. But we have 25 properties in escrow that we're currently wholesaling, trying to find buyers for doing innovation, whatever the case is. And the craziest part about all of it is we're almost making the same doing novations and flips as we would on a. On a flip or, sorry, do innovations and wholesales than we would on a flip out.

[A]

All the work.

[B]

As much work or the risk? Yeah, the risk being the main thing, because what's happening is we're able to get these deals on novation that aren't really deals. Right. So I don't know. Are you familiar with innovations at all?

[A]

This would be like buying it and then the seller is going to continue to hold title until some of the work is done. You could explain.

[B]

Yeah, so the easiest way to explain innovation is it's kind of like a net listing. So, you know, as long as I get the seller their price that they want, anything I make above it, I make. So similar to a wholesale. But the only difference is we're gonna go list it on the market and get a retail buyer. So a perfect example of this would be that let's say it's worth as is 450. And the seller's like, I want 400,000. Well, clearly you can't flip that. You can't wholesale that. There's not enough margin. And so those Two options are at the table. So I would lose money if I bought it as a flip. But also, these same sellers are like, but I don't want to list it. We come across that a lot. They're like, I want a cash offer. I want an investor. I don't want to deal with realtors. And I know you're a realtor, but this is what happens.

[A]

Everybody hates realtors.

[B]

Yeah. And they're like, I just. I don't want to deal with realtors, man. I just want as is. And I'm like, well, we can make it so you don't have to deal with realtors. We can make it so that we'll still take care of all those things. We'll pay all the fees, the closing cost, handle repairs. We'll do everything that you want. The only difference is we can't close quick. Do you need to close, like, tomorrow? No, you don't. Okay, so if you give me 90 days, we can go get it closed and get you the 400,000. How's that sound? And that's the pitch of innovation right now. There's lots of paperwork and things that have to happen, but long story short, we then go list it for 450. We handle everything for them so they don't have to deal with counteroffers and negotiations and all that crap. We do it. Maybe we take an offer at 440. You know, there's 20 grand in fees and closing cost. So now 420, minus 400, we make a 20 grand novation fee. And that makes more than a flip. The flip would literally lose money. That makes 20 grand. And so now all of a sudden, we have just like totally shifted where I have a way more scalable model with less risk, doing ovations and wholesales and even on the wholesale front, because we've gotten such good buyers lists and everything else now. I mean, dude, we were looking at wholesales making 30 and a flip making 40. It's like, that used to never be a thing for us. It would always be like, oh, yeah, we'll make 10 on a wholesale, 30, 40 on a flip. But now, because we're getting better at dispo, it almost never makes sense to flip. And I'm known as a flipper. So it's just like, I just do whatever's best.

[A]

Yeah, you take what the defense gives you.

[B]

Yeah, I'm not trying to force anything.

[A]

That's what I like about what you said earlier when you're saying, it's not that I'm against cash Flow, it's that properties aren't cash flowing, but there is still equity. And you said that. I started thinking about the fact that as a real estate investor, you're basically meeting the needs of a particular market. When you buy a buy and hold rental, you're meeting the needs of a tenant. You're supplying the demand that they have. And when you flip a house, you are, for the most part, supplying the needs of a primary resident buyer who.

[B]

Doesn'T want to put any money into a home, just want to buy a.

[A]

House, move in, and they want a place to live. Both of them are legit strategies that meet the needs of a market that allow you to make money. They do it in different ways. And the thing I just want to highlight is it's not that you are against this or I am against this. It's at different markets, different things work 100%.

[B]

And like, different sellers need different things. So it's like that same seller. People are always like, why would a seller do a novation? Why wouldn't they just list it? I'm like, bro, sellers, there are sellers who just hate realtors. It just is what it is. And they just want convenience. It's not even the cash offer. That's the. They just. They want the convenience. You know, nobody cares how their property gets bought. It's just how it happens. And so we're providing another service to a different type of seller. You, as a listing agent, are providing a different service to a different type of seller. And so for me, the thing I always try to teach our students and everything else is I'm like, guys, you're not a wholesaler. You're not a flipper, you're not a landlord, you're not a creative finance guy. You're not a multifamily guy. You are a real estate investor. And your job is to talk to every seller you can and give them what's best for them. If you do that, you will make a lot of money. It's that simple.

[A]

Last question. For those that are out there right now trying to find a way to build wealth through real estate, what do you think is the best approach or strategy in today's market?

[B]

Well, like, we're talking about cash flows really hard right now, right? Dude, I'll be honest. I have been a big fan of what we're doing on Novations and especially too, like, we have a new company called Lead Kitchen, and so we provide leads for people. And we could go on this whole other topic of leads because they're getting extremely Costly for all marketers and real estate investors. But the reason that I like this model currently is because, number one, inbound leads. The way we're getting them on Facebook convert significantly quicker than other lead types. And so I've done every lead type you can imagine. I've done TV commercials, I've done direct mail, ppc, you know, cold call, text, all that stuff. And I have never seen how quickly these convert into contracts. I mean, we get deals that convert the same day. We get deals that convert in 48. Like the. I would say three to four out of five convert within 48 hours.

[A]

These are people reaching out to you.

[B]

Yeah, they're inbound leads and all that. Like the ones that do convert, it's quick. And so you got to think from like a sales perspective, that's way more morale boost for your sales team. It's way less follow up. So you're using less resources to get a deal versus, like, when you cold call. Obviously you got a cold call, do all this crap. And then, you know, if you do get somebody who says yes, the average turnaround time for somebody who is really good is about 100 days on average from a con, like somebody saying, yes, I want an offer to getting a contract. There are some that'll happen quicker, but then there are some that are in your CRM and then they pop a year later, right? Yeah, but with inbound, that's not the case with inbound, especially with Facebook. From what we're seeing, we're locking them up quick because we're also giving them the option best for them. It goes back to your sales pitch. Because before we'd be like, in this $400,000 scenario, we're like, oh, we could do 350. And they're like, well, I ain't taking 350. I want 400. But instead of coming at it from an adversarial point of view, like, you want 400. All right. I mean, that's pretty close to retail. But, you know, let me ask you this. You know, you're coming to us because you just want the convenience. You want it easy and all those things. Right? Right. Do you care who buys the house? Like, no. Okay, well, doesn't sound like you're in any kind of rush. So if you give us 90 days, we can get you the 400,000. Does that sound good? They're like, that'd be great. All right, cool. Sign here. And then that's how we do deals now. And so it's so different than how I've done it for the last decade, and that's why I'm so excited about it. But in order for something like Lead Kitchen to work, you also must have the right sales process. And that's what makes real estate investing and flipping and wholesaling really hard, is because people think, oh, if I just buy leads and start cold calling, I get deals. Yeah, it's like, no, dude, you got to understand sales. And then there are people who are like, well, I don't want to pay for leads. I'm like, well, it's literally impossible to get a deal without a lead. So I don't know what to tell you. Like, that's the business of real estate.

[A]

So for people that want to learn about Lead Kitchen, where do they go to find out more?

[B]

Just leadkitchen.com. yeah, we are literally running my ads in their market. So it's me. And so they don't have to do anything. Like, we could be in. You're in NorCal, right? Yeah, yeah. So we could be in. We actually are in NorCal, but we've run my ads in NorCal. They've, we've already tested them for millions of dollars. So we know they work. And you just get the leads instantly. And so you just tell us what you want to spend, cover the ads. You get the leads. Now, like I said with, with inbound leads in particular, usually they're shopping around so they, you know, they're going to open door, they're going to this guy, that guy. And so your sales process has got to be good for it to work.

[A]

If it's not because you're competing with the other people that want that deal.

[B]

And once again, right, Like, I could sell Lead Kitchen. I'd be like, guys, 24 hours, like same day deals. It's so easy. And like we're making a killing doing this. And in a way it's somewhat true, but I'm like, but here's the catch. You better be good at sales or you will lose all your money marketing dollars.

[A]

Yeah.

[B]

But here's actually a new thing I've realized too is like, I've thought long and hard about this. You know, most people who start, they're afraid to spend money on marketing. So they wanted to go about the freeways, right? They'll go build relationships, they'll go to meetups, they'll maybe cold call because it's cheap and that's what they do. And then they'll go buy a house to flip and maybe two or three or whatever. And that's how I got Started, So, like, it makes sense. But I've now realized that, you know, things can go south on a house flip. Like, I just went through it. So maybe I'm. I'm like getting Dave Ramsey shell shock from losing. But I've now realized that, sure, it doesn't cost you anything on the marketing side, but you're taking on, obviously, the risk when you go to flip it. Anything could happen. If you're telling me, you know, you're gonna go spend five grand a month on marketing and you're gonna go do it for 90 days, the most you could lose is 15 grand. That's it. That's the most you're gonna lose. Now, you could also break even and get one deal. You could get multiple deals, and then you're positive. But the more I look at it, the more I'm like, yeah, marketing is far less risky than actually buying the deal.

[A]

Right.

[B]

It just is.

[A]

That's a good point. And if you're not paying for leads or you're not having some kind of a marketing budget to generate someone coming to you, then you gotta go find them, which means that you're going to be spending effort and energy. And so maybe if you're completely broke, that's where you start.

[B]

You have to start.

[A]

Yeah, but it's not free like people think you're still spending something.

[B]

There's only three ways to get deals. And so the first is you spend zero dollars, okay? And that, that means you're going to go on the mls, you are going to network, you're going to build relationships, etc. Now that's great. That's how I started, how lots of people have started. The problem is it takes a lot of time, because even if you build the greatest relationships, relationships take time. And a relationship might only get you one or two deals a year. So you got to make a ton of relationships to get consistent deal flow. So it's like if you're dead broke and you got nothing you can do, then sure, that's the only way to start. The second way is outbound. That would be the next step up. And it's like, all right, if you're going to truly do outbound, you got to be willing to spend at least a thousand bucks a month. And it's like you can get a dialer, a CRM, pull some data. Driving for dollars would be drive for dollars, text them. But you're going to just go pure outbound. Hit people up, and it's. Once again, you're spending time plus money. Now the first one's all time. This one's time, more time and a little bit of money. And if you're able to, because you have capital, go to inbound impounds. The best, because inbound's gonna cost way more. But it's instant. The quality's higher.

[A]

Right.

[B]

You know, your conversion is way quicker. You could get a lead this week that turns into a deal. That just doesn't happen with outbound.

[A]

That's a good point. If you use, like, a dating analogy, an inbound is like a DM from a girl that's like, hey, bro, I like you.

[B]

I'm interested. I swiped. I'm good. Whereas outbound's like, yeah, I saw you walking around like, what's up?

[A]

That's it. You got to go find a way to start a conversation with a stranger, convince them why they should go out. So if you're trying to understand why one's better than the other, everyone would.

[B]

And then relationships are, you know, like, hey, set me up with them. You know, whatever. Right. And they're like, I don't know, dude. Like, you haven't had much success yet. I don't. I don't know. Put my name on that. Right. Like, the quality of deals probably isn't great. So it's very simple. Like, even when we get people to coach, I'm like. I tell my sales guys. I'm like, guys, just ask them what the marketing budget is that will dictate what they have to do. There is no secret. It's like, free, outbound, or inbound. Just pick.

[A]

So the goal is to get to the inbound point.

[B]

Yeah. And you'll see that with every real estate investor who does direct marketing, they all inevitably want to do inbound because they get burnt out from cold calling. They realize relationships aren't, like, scalable at a certain degree. Right. So it depends what your goals are, too.

[A]

I mean, there's some wisdom in what you're saying, because this applies to more than just real estate. This is pretty much anything in life. You start off having a hustle to find opportunity, and then you get good at that. And then you start going to places that are more likely to be a target for what you're looking for, whether it's dating, whether it's a new job, whether it's a new business. And your goal is to get to the point that those opportunities are coming to you.

[B]

Yeah, right.

[A]

Which is what the Graham Stephans, the Meet Kevin's, the youth, these people. That's what a big channel does, is you get people coming to you inbound. I want what you have. I've been listening to you. Can I sign up for your thing? Can I buy your product? Whatever the case would be?

[B]

Well, I've told. With education, I've told my sales guys. I'm like, do you realize how easy you have it with inbound leads? They've all opted in. They've watched stuff like, they're inbound. I go, if we didn't have YouTube and ads and all this stuff, you know what we'd have to do on outbound? We would have to go cold, call every realtor and be like, and by the way, no one knows me. So I'd have to be like, hey, you know, my name's Ryan. You want to learn how to invest in real estate? I've done a lot of stuff. It's a super hard sell. I'd have to go, you know, to events and meetups, try to get known. It's not scalable. It freaking is a headache. It's a way harder sell.

[A]

Takes time for them to build comfort with you.

[B]

And you could see, like, okay, now that we've built a Six months later, okay, you know what? I think I'll do that thing. I'll try that lead kitchen thing out, right? But that's the power of inbound. They're already warm, they're already hot. They're ready to go.

[A]

And they wouldn't be calling you if they weren't interested in what you had.

[B]

People don't fill out forms for no reason.

[A]

Great point. Yeah. Ryan, great time talking with you, man. Catching up.

[B]

Appreciate you coming out again.

[A]

Yeah, thanks for listening to Real Talk Real Estate. If you would like to be featured on the podcast, I'd love to have you visit davidgreen24.com Ask and submit your question there. Also, please do me a huge favor and share the show with someone that you love, that you think would benefit from his message. And make sure you're subscribed to get notified for future episodes. If you want to reach out directly, you can also DM me on Instagram or social media and check out davidgreen24.com.