From DoorDash Driver to $1.5M in Real Estate (Making $50K/Month)

this is the Bigger Pockets podcast show 749 I never thought that while I was doordashing in college not having the most Clear Vision of what I wanted to do after that real estate would allow me to own over 10 properties right around a million and a half in valuation and have the ability to create some long-term consistent cash flow what's going on everyone this is David Green your host of the BiggerPockets podcast here today with my co-host Rob abasolo with a show that is going to blow your mind today's guest is 22 year old Josh Janus who has already established a real estate portfolio of over 10 properties is also Selling Houses as an agent he sold 17 billion dollars last year and in this episode Rob and I get into how he's doing it and what he's figured out that other people haven't my mind is still blown Rob how are you feeling it's it's one of those things where I'm just like when you find someone that sort of unlocks something in real estate and they're absolutely crushing it it's super impressive but when you find someone that's 22 years old making six figures a month doing really well in real estate it really is just one of those things where I'm like man I gotta catch up and I'm like 10 years after this guy yeah and that leads us to today's quick tip started real estate early right how can you get started now I've often heard it said that the best time to buy real estate is 10 years ago the quicker you get that clock started the better it's going to be for you the best deals that I have is the stuff that I bought the longest time ago that that does not mean to buy bad deals early but buy good deals early and wait Rob what's something about today's show that you think people should keep an eye out for you know even with Josh's success and how much money he was making which we'll get into that in the episode he was still really honest about his fears getting into his first property that he probably could have straight up paid cash for in like one or two months and so it was just nice to hear that even someone that could be making so much money could still be vulnerable and kind of fearful in their first deal but it was really cool to see the glow up and to see that that first deal kind of catapulted him to where he is today so yeah just a really cool uh inspiring moment I think to just hear him put it all out there yeah and he also shares how he got started in business making duct tape wallet and doordashing like this is a person who listened to the podcast driving around dropping off Jack In The Box and pizzas and turn it into a real estate Empire just like many of you that are listening to this now really want so this is what I will listen to twice and pull as many pieces of information as you can out of this story to think of how you can apply it to your life without any further Ado let's bring in real estate Phenom Josh Janus today's guest Josh Janis knew in high school that he wanted to retire by 30 years of age so he built and managed different side hustles from duct tape wallets to a successful sneaker business Josh was a college student who also drove for doordash last year at age 22 he sold over 125 properties in his first year as a real estate agent totaling over 17 million dollars as an investor friendly agent he has purchased and renovated over 10 properties using very little of his own money in real estate over the last seven months we are going to unpack this today Josh welcome to the podcast thank you yeah it sounds like you have a strong entrepreneurial focus and before we get into how you accomplish everything that I've said what was it about real estate that attracted you in the first place so when I was younger I was always trying to save money um I didn't really know exactly the most productive thing to do with it but I was like hey I might as well stash it away and eventually I'll figure it out I had around like ten thousand dollars saved up um like free Capital to use and I was in starting my college career and I was introduced to the idea of house hacking when basically Googling what to do with ten to twenty thousand dollars when you're 20. and that led me to Bigger Pockets and that was kind of my introduction to real estate as a whole so did you ever actually go anywhere with house hacking um I was close so back when I was living in Cleveland Ohio I was looking at properties I figured out kind of where I wanted a house act but I ended up switching and going to a different College I was went to the Ohio State University and then my next Journey was going to be to house hack there but I didn't actually end up doing it so Josh it seems like obviously you're a little bit uh entrepreneurial here like before we get into the real estate stuff because I think even at the age of 22 um having ten thousand dollars in your bank account is is a hard thing right A lot of people are like how can I get 10 000 bucks so can you tell us a little bit about how you even got the ten thousand bucks for did you just have a ton of side hustles or were you working a job sure so I was working you know I was doing a lot of side hustles I used to make duct tape wallets when I was in like middle school and try to sell those and that was kind of fun and um the next thing I was really interested in was like sneakers the whole sneaker culture reselling because I was a pretty big basketball player um and I kind of was exposed to that industry so I was going to different sneaker events I would um rent out a table bring as much shoes as I could fit in my couple bags and try to sell them and basically just kept those profits over the years nice what what did a duct tape wallet run you back in the day oh man it was like five dollars to sell I mean it was a lot of work for five dollars oh I see because I was gonna say you know roll of uh well toilet paper sorry duct tape gonna cost you like three four bucks you know so yeah if you can make see Josh this is my problem Rob always forgets to include the value of time he only looks at the money when he calculates Roi as you can see that's true but you had a lot of time sure yeah I was doing it in class and on the bus this reminds me of me I wish I'd had something I've always had a very difficult time paying attention in class and school any time that I have to follow somebody else's Pace if they're talking too slow I'm like ah my brain just wanders I can't sit there so they didn't have fidget Spinners or what's the other things that everybody plays with now Rob fidget cubes fidget cubes there you go right what did we have in my day we had like we had stupid pencils with different colored lead that you could like click the different colors and play with uh or we had these bracelets that you could snap on your wrists and they would like curl up in a ball I doubt either of you guys ever saw those things but oh yeah you still have that bright pink one right that you always play play with during the podcast yeah and when I work out that's like my my lucky workout wristband bright pink absolutely Pinker pockets for the win so you you're an entrepreneurial at heart Josh which I love because I know this is where you learn the fundamentals of that later translated into real estate investing we interviewed Ryan Pineda on our podcast years ago and he talked about how he flipped couches he would buy couches fix him up and flip him which he then later turned into a house flipping business and now he's built an entire Empire which I like to think we are basically the ones that launched him into the atmosphere but Ryan took that atmospheric launch and built something pretty cool out of it so I'm curious if you could share what lessons do you think you learned with some of these early Endeavors that translated into real estate later um I guess in the sneaker culture you would see some of these really cool shoes right that like athletes were wearing or celebrities and maybe you'd flip a few Pairs and make like 500 bucks and you want to take that profit and immediately buy your own pair to keep and wear and my mindset was I'd rather save that money and maybe put it towards like an asset I learned the idea of assets when I was younger where you can actually use money to make more money I didn't really understand which assets to use at the time I just knew that concept and I was like it's got to be a better way of spending my 500 profit so I think that's one thing that I learned for sure when I was younger by the way that's not the one worst mindset to have where you say I really want this thing so I'm going to figure out how to make money with this thing that I want sell it make a profit and then get the thing that I want that's real estate in a nutshell right you want to acquire property so you buy property you flip it you take the profits and what do you do you go and you usually if you're a good real estate investor you go and you dump it back into another property or you buy a property and have other people pay for it long-term rentals or short-term rentals right so I think it's the the mindset is not incorrect it's just really impressive that you found out at a very young age that instead of buying sneakers you should put it into something that's going to make you more money yeah I think um I was always trying to find more ways to be more productive with my money like I learned early on like for certain shoes that have to go to the store and wait multiple hours I was thinking like this isn't very scalable if I want to try to get like 20 pairs of shoes because I can't be simultaneously at 20 places at the same time I have to learn how to rely on other people different things like that helped so you know I always thought because I tried different Endeavors too I worked at restaurants and I learned how to sell wine and steak and then I tried to get a job selling cars at one point that didn't work out but ultimately I think a lot of us see real estate as the Pinnacle we're trying to get to we want to sell the most expensive thing we can getting a real estate license is not something you need this four-year degree I wish it was I'd feel much better if agents had to go get a two or four year degree to so house is because there'd be less crappy ones out there and we'll get into your career there too Josh but was it the same thing for you that real estate was just a natural progression of the best thing that you could sell yeah I think so it seemed like I had to put almost like now they look back on it the amount of time it takes for me to sell one house was almost the same amount of time and energy it took for me to sell one or two pairs of shoes in some ways and your hands aren't sore from creating these duct tape wallets all the time yes easier that too you let DocuSign do all the work less paper cuts all right so let's go back in time you're in college I go back in time for 22 years old you might still be in college where does this interest in real estate start to come into play how and where did you start to dig in I mean I just was Googling you know what do I do with ten thousand or twenty thousand dollars how do I invest it and um I can't remember if it was Bigger Pockets right away but I saw like house hack and I was like maybe I could buy like a property you know on the college campus I was going to live in one unit write everything else out um and that slowly led me to understand like oh man like if I become an agent I could figure out a way to find like potentially the best deals so that was my goal so you didn't buy a house to house act but you got exposed to real estate it made sense to you and you thought you know what I'll just get my license and I'll help other people do the same thing yep all right so did you just look up how to get a real estate license and just start studying and do that or did you have a mentor that kind of guided you um the first thing was like diving into the Bigger Pockets forms like really this podcast might sound like a bigger pot like Bigger Pockets like promotion but in all reality like a ton of my growth really like stemmed from that Foundation but that was that was one of the first things and then I also got latched on to a guy named Remington Lyman who is also an agent um he works at reefco real estate he owns brokerage I work at but I um you know I messaged him I was like explaining my situation he hopped on a zoom call with me explained you know the benefits of house hacking like maybe if you wanted to become a agent here or come here we can teach you how to find off Market deals we can help you build those systems and the next thing you know I was work as hard as I can to get my license yeah so you're getting a license and obviously you know as you establish your real estate agent business uh that's going to take some time to get that deal flow and actually closing properties and making money were you working any other jobs while you were doing this or were you all in at the very beginning in the very beginning I was still taking classes I was studying computer science and then I was um driving for doordash like 20 to 30 hours a week and then at any moment I could I was trying to figure out I was trying to just cold call that was my main source of finding deals in the beginning my plan was cold call find a deal or at least get somebody to talk to me about their property get some details bring it to one of the agents that I was working with and they would kind of break down the deal explain like oh maybe an investor would like this or get some clarification on what the rents are the lease terms are and it started there did you ever have to like say were you ever deep in conversation you're like give me one second and then you'd pause to take a photo of the the doordash delivery to upload in the app and then get back on the call uh maybe I was trying not to do the delivery while calling to I was doing when I was driving but not necessarily oh I admit mid delivery yeah yeah so what kind of money uh what kind of money does a door Dasher make if you're making if you're working 20 to 30 hours a week is that pretty good income can you give us a little frame of reference there yeah I mean I was around five to eight hundred dollars per week I think working at that amount of hours it's yeah that's pretty good yeah that's solid especially if you're in college and you're kind of doing doing all that so your doordash and making pretty good money for where you are in life and your cold calling what was that first deal like when you actually landed a lead that that became a transaction that paid you out definitely so I was cold calling four units and what I would call like an A-Class area um I just found a guy that happened to be motivated that day he was pretty easy to talk with I presented it to the agent I was working with he's like oh yeah we could sell this deal so um I wrote up an email which is the way that we kind of Market our deals then he presented it to his investors somebody ended up taking the deal on um and that took about a month to close as most properties do and I basically made what I would make in like a month and a half from Nord ash from that and I was pretty psyched because I thought like I just need to knock out a few more of these and I could end up making this produce more income than just doordash so you started mapping out like oh man if I did this three times I'll make this amount of money oh yeah definitely and then another thing is like if you get your license you end up make making a much bigger cut because you can actually represent either the seller or the buyer depends on the situation so I was making like a referral fee so as soon as that deal closed I was like all right I got to get my license let's start studying right now and try to knock it out yeah so was that more like a I don't know like a wholesale deal where you you're calling you find someone you get a property off Market they're like yeah I'm willing to sell it and then you're basically past are you then passing that off to Realtors to sell or were you selling it to an investor and taking like a small fee for that um I worked under a realtor named Abe um so basically I just wrote all the details of the property gave to him and then he found an investor that was interested in The Brokerage that I was working at so it's it's kind of like a hybrid form of wholesaling we just don't actually put the deals under contract we just present the information to the potential investors makes sense so you started sort of uh I guess you closed this deal you're like oh my gosh I just got to do this this many times you start getting more into this how are you able to balance everything from you know getting your license to finishing College to I assume still maybe working some door Dash here and there I mean at that point basically I was like I'm just going to use all of my time outside of school to dedicate towards you know still maintaining a cold calling schedule which I think is really important and then getting my license so I got my license in about two months our cold call hour is always nine to five or were you like getting creative and calling from like 5 P.M to 9 p.m too uh 9 to 11 was like my cold cold calls the people I never really talked to um and then like I would use one to five as a lot of follow-ups or new cool calls but it seemed like you know if you picked if you hit somebody in the morning when they're driving oh yeah yeah call me back later then I just hit him later and usually that's a that ended up being a pretty decent converter David do you consider yourself much of a like a very good cold caller uh I've never heard this side of you before so I'm curious I did it in the beginning of my career when I had to I didn't love it uh so I didn't do it a lot I you're sort of like when you're trying to find deals you there's most people fall into one of two categories there's the direct contact person which is a cold caller or there's the content tank Creator which sort of gets people coming to them like most people usually take one of those to pass and because I ended up as a podcast host and an author I kind of went the content creation side as opposed to the direct cold call Josh I mean you you did what you could do because you didn't have a huge podcast behind you to spread the word I'm curious because you mentioned something you type in this like wholesale hybrid model can you give us a little more detail of what you mean by how you were making money on these deals sure so the seller was like Hey I want 450 for this for you for this four unit and generally wholesalers would write up a contract get it under contract and then sell that contract for a fee so the way that we do it as at The Brokerage I work at iriefko we don't um put it under contract we just take all the details of the deal write it in like an email and then present that to our investors and then if one of our investors likes it or they want to write an offer we just write up the offer and present it directly to the seller and how are you being compensated are you getting a listing agreement from the seller when you bring the buyer to them and there's a commission in there for you guys we don't actually use listening agreements no so in that during that time frame when I didn't have my license um I was getting a fourth of the commission for the agent I was working under so he got three percent then the the agent that brought the buyer got three percent and then I I ended up with 25 of the three percent that's how we did it how were you guys getting commissions if there was no listening agreement um it's still an executable contract with Commissions in the agreement so it's going to say seller to pay six percent to our Brokers I gotcha yeah so you would bring a buyer and in the offer it would have who was getting paid as far as the agents are concerned correct I see so rather than putting getting a house putting it on the market letting everybody see it trying to get offers negotiating the highest one you guys just cut to the Chase and you said hey I got a buyer that will pay this much for your house if you want to take the deal here's how much it's going to cost you here's what the net to you is going to be and you guys were running a little more efficiently yeah I think it allows us to kind of take advantage of those leads that aren't as motivated to sign a listing agreement because there's a lot of people that fall in that category I think and this is also a form of off-market deal so other buyers didn't have access to the same stuff that you guys were bringing them correct yeah yeah but Josh what would stop a let's say you're presenting this property right you because you don't have a contractor you don't have a listing agreement what would stop a like an investor if you say hey investor I've got this cool property here's the address what would stop them from just going over you and going straight to the to the seller and just transacting the the deal themselves that's a good question so we have an off-market agreement that we present to everybody prider setting deals that roughly States if you go after a deal that we bring you you have to use us as your agent so um in the beginning when they haven't signed it yet we'll send people like rough deep descriptions of all the deals it won't have the address usually won't have pictures but then if they're like hey I really like the concept of the steel we'll set on the agreement and then they sign it we're good to go so it's a form of a buyer representation agreement you don't have to people don't realize you don't have to set it up for every house that I show you or every house you could buy you can say for this address I have to be your agent but they could use a different buyer's agent for different properties they get brought to them that actually makes sense and I see now why you're calling it a wholesale hybrid because wholesalers do it that way they say here's a 3-2 with 1800 square feet in this ZIP code that would rent for this much money that's all that people get to start with until they want to analyze it later so you kind of use that marketing approach paired with real estate contracts to protect each party there so what happened next like how did you get to the point that you were making more from these commissions than you were making from your door dashing so um that first check came in that was about a month and a half's worth of doordash I had a lot of warm leads people that weren't ready to sell right away but they're getting close and I was basically like I'm gonna take the next six weeks I'm gonna go really hard at this um and at that point I started you know I was spending two to three times more hours per week on this than I was before um then I got my license then I started putting a whole bunch of deals in contracts and when you say you're putting two or three more hours do you mean just in the follow-up sorry I'm about like two to three times more hours per week than I was before because I was like hey no more doordash for now we'll just work on real estate got it and was that all that time on lead generation was it following up with because you said you had a large pool of warm leads so these are people that you know they're interested they're not ready to pull the trigger necessarily but if you kind of keep approaching them coming back to them eventually they convert right yeah eventually yeah all right were there any key learning points during this difficult time like what was going on in the Market at this time and was it still red hot were things slowing down where are we in time this is the beginning of uh 22 so it was still hot definitely it was cooling off a little bit um but you know every deal that was decent that hit the market would have multiple offers the listing agent would be getting hounded so it was definitely tough um at this time I also tried to make a bigger presence on Bigger Pockets so I was posting a lot I think I cranked out a thousand posts in about three months wait hold on so you you were posting uh okay so that's 90 days so you were posting 10 times to 12 times a day on the Bigger Pockets forums yep yeah that was that was my schedule I believe from 5 30 to 6 30 every morning I had to spend an hour in Bigger Pockets by posting or at least reading content and trying to provide value what kind of like you were you were making posts and actually putting content out there what's an example of something you'd throw out into the uh the Bigger Pockets Universe um I mean most of it was just comments on people's questions I would try to answer them the best that I could I would talk about the Ohio market the advantages to investing here I would talk about kind of like my journey and how I'm learning did you did you feel like people start to know who you were like did you get any relationships from doing that oh yeah I was getting people reaching out to me in Bigger Pockets they're like hey like I see you know a little bit about this Market or real estate investing in general um and at that point I was trying to manage those lead leads and then I was also reaching out to other people so I set up like a calendly link I was like Hey set up a 15-minute call with me we'll figure out you know what you're looking for and how I can help so when the market was hot and listening agents were getting multiple offers how are you getting sellers to agree to sell their properties through you to a specific buyer rather than putting it out there for everyone to see so I think the fact that we weren't using let's say agreements they were a lot calmer they didn't feel like you were trying to push them to sell it was more so like like I was like hey man like you know what what do you need for this property like what number would you not deny and then we would if that number made decent sense we'd spend the time to write it up and Market it out and they weren't having to fix their house up I'm assuming a lot of these were probably sold with tenants already inside yeah tenants inside we get the the rents the lease terms they would almost always be as is yep so and then what were you doing to find actual properties were just pulling lists was this you'd be driving around and just look and see a multi-unit property you thought an investor would like I was pulling lists from prop stream for the most part and targeting different areas I was trying to pull a list of people that hadn't sold in the last year two years or that bought it for a really low price compared to what it was potentially worth now because I felt like those could have been more motivated people all right so you're in this this world right where you're figuring out your systems I see that you've developed habits you had a schedule um you're now an agent give us an idea how long did it take from when you got your license to the first deal that you closed as an agent how long did that take that was December to March so basically three months and I had my first 11 deals fought a contract it was pretty brutal um I felt like everything was falling out for the most unique reasons um but it was a very you know it was a big learning experience for me because I was making mistakes for sure man the 11 deals that is brutal David is that normal at all I know you run a team of the David Green Team uh the most elite real estate agents out there is it normal for 11 uh uh you know deals to just fall out for from like a first time realtor no but as I'm listening to Josh's strategy here that starts to make sense this is more of a volume based approach yes sellers that are not motivated he has buyers that they don't have a relationship with everyone's a bit of a Merchant Marine here like it's just pure numbers if you can get me a deal that gets me the cash on cash return that I want I'll go forward or if you can get me this number that was probably higher than what they thought the property was worth so you've got sellers that probably want to sell for more than a buyer would want to pay you get buyers that are looking for the deal the century every time you have these expectations that are off it's easier for a deal to fall apart so I'm assuming Josh you just had to make up for that with volume you were probably just a Workhorse that was constantly looking for sellers looking for buyers matching them together moving on to the next thing definitely yes that's I haven't really heard a summary like that before that's a very good way of explaining it I was basically just taking two low chance two people that had a low chance of closing and putting them together when that happens you get a really low chance of closing David is the king of this by the way he is the king of summarizing something so concisely and succinct I remember we had uh let's see who was it Chris Voss Chris Voss came on and he gave like a very like a philosophical thing and then David comes in he's like so basically based on this and this it's this right and Chris Ross was like yeah it is that no one's ever told me that before and I was like well it was like uh watching you know who painted the Mona Lisa the painter of the Mona Lisa paint the Mona Lisa but in the real estate World Michelangelo shoot I'm about to look so dumb everyone in the comments are gonna be like no it wasn't Michelangelo well the key is you have to do that with Chris Voss because you don't want to end up in a negotiation with him oh no I remember who it was it was it was also the Blue Angels guy he was like had this whole story about how he had the how he made a mistake in the Jet and then he was like can you guess the reason that I made that mistake and then uh David was like well it was probably because he got too comfortable and blah blah and he was like I've told that story 1100 times and no one has ever said that to me yeah that's exactly why he was stunned so anyways I always like to point that out when I see it well thank you quick tip here if you would like to be able to do the same thing stop looking for patterns to follow or as far as like a strategy give me a blueprint I just want to go do something and start asking questions like well why did that work or why did that not work and then this stuff sort of jumps out so like just from that information alone I can tell certain things about Josh she's a Workhorse he does not get emotionally attached to any of these deals when he put something in contract he doesn't spend the money before it closes he's just like that's a metric that goes on a spreadsheet I am now back to going to work he focuses on what we call the lead measures not the lag measures so what is it I can do right now as opposed to measuring something that already happened this is all really good advice for everyone you see this with real estate agents where they work really hard they put a deal in contract they get emotionally excited they celebrate they go out drinking with their friends they start thinking about what they're going to spend the money on they're calculating their Commission right real estate agents can calculate three percent of anything which is funny because we don't all get three percent hardly ever anymore but they get super attached to the deal and then when something goes wrong the appraisal comes in low the inspection report is bad the client can't get the loan whatever it is they get really discouraged and then they go drinking again which is why most real estate agents all become alcoholics because they're drinking when they're excited and they're drinking when they're bummed out they're just drinking all the time I think Josh's approach is much better because you're sort of approaching the business of selling homes like a real estate investor would think where you're just letting the numbers make the decisions am I off with that you're right yeah it's just just keep put them in contract figure out what mistake I made there and what can I change in my systems and my approach to potentially avoid that in the future okay so let me ask you what are some of the key mistakes that you can share that you learned when you put these deals together that made the deals fall apart so the first thing would be not vetting the sellers sometimes they wouldn't I mean kind of funny they didn't even really know what they owned they would say like oh there's three but these are two three bedroom units and then you get them a contract the inspector goes there and they're like dude there's only two bedrooms and it's like oh you can't do anything about that you can't just build a new bedroom so that's one thing um another thing is I learned about you know making sure the tenants are paying and the tenants are like paying on time that's very important so like getting those uh estoppable agreements potentially in the beginning because that ended up causing issues at the end before closing multiple times um and then not necessarily betting via or vetting buyers very well so like one example that's kind of funny is I had a guy trying to buy two properties for six hundred thousand dollars uh we fell like two weeks prior to close because it couldn't get financing and I learned that he had like less than eight grand in his less than ten thousand dollars in his bank and he was trying to put 25 down and I'm like did we even do the math here this is so funny because I could just totally see how this method would attract those problems right this is like trying to find a date on craigslist you're like it's about it's a numbers game baby you just gotta keep lining them up because you're gonna get these people that are looking for a deal that's unrealistic and let the eight thousand dollar guy I bet you what he was doing was he was he brought this deal to other people and he was trying to get their money on this deal that had a high cash on cash return number because he listens to the podcast and he hears Brandon Turner say when you have a great deal you can find the money so they he didn't tell you that he's like yeah I'll buy it and then he's running around telling everyone he can like what's the what's the raising private Capital script I'm supposed to use he's trying to get someone to come in on the deal he ran out of time and then he has to just back out of it and you Josh you get to sort of work your way through all of these really incredible scenarios that normally a real estate agent like us we're like oh let's see your proof of funds oh you have eight thousand dollars no we're not gonna go show you homes you didn't get to do that so did you put a system together do you have like a checklist now do you have a screening process for both the buyers and the sellers definitely yeah I try to write procedures for as many things as I can I'll hop on a phone call immediately with the people as soon as I meet them a little 15-minute meeting make sure like hey like are you pre-approved if not I have these lenders that I recommend they're great in this area you want to connect with them I try to figure out their timeline you know when you got when you look into uh lock down a deal another thing I think is really important for working with investors is what is your criteria um right a lot of investors don't necessarily put that forward um and agents can end up wasting time because they don't really know what the people are looking for yeah I think that's a common complaint investors have too I told them what I want the agent didn't listen to me that's one way to mess it up the other way is the agent doesn't even think to ask what do you want you know what's funny in our world we'll say someone will say they want a deal and we don't even think to ask them to Define what they mean by deal some people mean a really high cash on cash return some people mean a property in the best area some people mean something at significantly less than arv some people mean just any any multi-unit property it can mean so many different things to people about a deal without asking what that means it's very hard to make sure that what you're bringing them is going to land in your experience what are most of your investor clients looking for in what they call a deal around 60 of the people are trying to get into real estate they have kids they have a full-time job they're not trying to you know quit everything and just do real estate so they want properties that are TurnKey or close to they're occupied they're producing a good sense of cash flow and they can buy a couple of those a year and be happy with a good portfolio when they're done and then the other 40 percent of people I would say are looking to do value-add the Burr strategy creative financing when it comes up self-management um anything that's a little bit more involved and requires a lot more of your time that's for the other people so these are the Financial Freedom group that you're basically working with they're trying to get up enough cash so they can quit their job yeah yeah that's I have a lot of calls where the first two minutes it's like yeah I want to retire in five years it's like you can do it just hard let me show you how to sell some duct tape wallets so you mentioned some earlier Josh uh term estoppel do you think you can just give us a quick definition of that what that is because it seemed like that was something that was popping up in a lot of these deals that that fell out yeah um it's basically a summary of what the tenant is paying um what their lease terms are and showing that they have been paying I don't actually use to stop all agreements that's just like a term that I thought most people knew but it's basically I want to see the rent history like sometimes the seller will just show me bank account to show that deposits are coming in or an actual like summary or an owner statement from the property management company something showing that the cash flow is real it's not fake so you close this first deal 11 deals right fall through you close your first deal tell us a little bit about the actual numbers on that first one you said that it was I guess the same as working a month and a half in the doordash world right yeah so it was a 450 000 four unit um there was three percent paid to the agent that I was working under so he got nine thousand dollars or sorry twelve thousand dollars and then I got a quarter of that so I got around like three grand nice how did that feel that was really cool I that was the biggest truck I think I've ever gotten and I was like a little intimidated but I was like we don't spend this now this is this is like our life for the next like two months oh yeah that's a lot of ramen noodles right there especially at the beginning when you're grinding so much so let's fast forward a little bit because I know you're grinding it out on the you know on the agent side tell us about your your actual first deal because David mentioned at the beginning of the show that you bought 10 deals which I think was about 1.5 million dollars in total for for the portfolio so how did you actually get into the investing side of things definitely so I started to sell a lot of properties um by month six I had scaled my business up to like fifty thousand dollars a month in commission so I had actually had cash reserves and I found um these two duplexes listed by the same agent they had been sitting on the market for a few months so I called them up um and he was like yeah the owner has short-term debt on it he really needs to sell it they're getting ready to call his note um and they were basically willing to sell them at like a 30 discount and I ran my numbers and I was like this could make for a great Burr like both of them you could be all in right around 70 to 75 arv and when you pull your money out it's still going to produce a pretty solid cash flow so I had to really trust my numbers but I decided to go after one of them okay so wow that's a fifty thousand dollars a month that's what you were making how old were you when you when you reached that number uh 21 21 David does that make you feel like I feel so lazy as a like as a 21 year old when I was but I was not doing that I was like trying to make I don't know man that's crazy congratulations that is so cool I was making less than that in a year and that was still more money than everybody else that I knew dude that's crazy so all of that the fifty thousand dollars a month obviously that's gonna lead into your investment strategy but that just came from hunkering down on your agent business growing those systems developing your processes and then you like grew it into just 50k a month that's insane yeah and by month eight I actually got it to about 100K so ever since then I'm right around 100 000 a month um I've been using I've been leveraging va's uh for a lot of procedures I try to do I try to delegate as many tasks as I can as a realtor try not to I don't know spend all day writing contracts as an example because I can take like 30 minutes on average and I'm a lot of days I'm writing between 8 and 10 offers um that would be my entire day so um can I come work for you please can David and I come work come work for you uh okay so you have no deals in the first three months and you start to fire on all cylinders by June of 2022 you decide to get your first investment which is a burr it sounds like or some kind of rehab how did that go was that like a whole new set of skills that you had to learn after already being so good at the real estate side the the Realty side yeah I mean I had never done any rehabs I didn't really know how to price things out very well so one of these contractors that I had been working with for my clients I was like hey can you walk this for me give me a bid it gave me a bid the numbers made sense and another thing was is I could only get the price where it made sense if the owner was able to sell both of them so I was able to another investor to buy the other one at the same time we lined them both up um I used hard money for mine they lended up to 90 of the project cost which which is your purchase price plus your rehab or seventy percent of the arv whichever number is less well it sounds like we're already in the deal deep tag because this is what we're going to talk about so let's go ahead and make this official foreign at this segment of the show we dive deep into a particular deal that our guest has done and get the juicy Deets so first question what kind of property is this Josh it's a duplex two bedroom units are you sure they're two bedroom units do you know what you have are you one of those sellers that claims that he's got more bedrooms than he does I knew luckily this time I knew all right we'll take your word and how'd you find it it was on the market um it had been on there for a few months and I called the agent and he was like we have to you know to sell the current owner has short-term debt on it they're getting ready to call it he really needs to sell if you can sell this one and another one you can get around a 30 discount so my job was to try to sell one of them because in my current situation I was only comfortable with taking down one deal I didn't want to start with two forty thousand dollar rehabs okay how much was this property it was 85 000 um and the rehab estimation was right around like thirty thousand dollars for the one that I took down and the arv that I had projected based on sales comps was right around 155 000. and how did you negotiate it I mean the agent basically told me that if you can close quick you cannot have many contingencies you can get it at this price so then I counted around like 10 000 lower and then we read we met about halfway in the middle and got the deal done and how did you end up funding it um I use hard money so uh I had to put down around like 10 and then I applied my commission because I was representing myself as part of my down payment so I was only really out of pocket like ten thousand dollars and what you end up ultimately doing with this property so I renovated it it took a little bit lower than expected as probably the vast majority of projects do I learned a lot um as soon as I was done I went to the bank I refinanced it I got almost all my money at back out and now I run it as a rental okay so that was the outcome there tell me what lessons did you learn from this deal um you know I was really scared of debt I really didn't have any debt prior to this um I was definitely scared of short-term debt because the hard money is like they're knocking at your door in six months like it's due you need the property you have to either have to pay it off you have to refinance it or you have to sell it so I was definitely intimidated taking on a property that currently wasn't livable and needed around 30 grand to be livable so um those are the things that I was scared of but I learned from the investors and mentors around me that you really need to trust your numbers like in in any instance when evaluating a deal because you know that's what you can rely on especially when you feel uncertain so Josh let me I guess I'm trying to understand because I know you said you use hard money and you're really nervous about I guess getting into this property and that you needed thirty thousand dollars of work but if I'm remembering correctly was were you making fifty thousand dollars a month at this point yes yeah so what was the real concern here because it seems like you know you probably could have covered expenses pretty easily yeah I mean the property was also not in a city that I was living in so I was kind of mimicking the experience of an out-of-state investor because I bought it sight unseen um and I was managing the entire project from remote so I learned that so how do you feel now though like do you feel looking back were you like oh it actually wasn't that bad or do you still have some of those same reservations doing the out-of-state stuff I mean after the first one it's I feel way better I feel a lot more confident I can rely on my team I can rely on the knowledge that I bring to the table by understanding sales comparables and things like that I've got two questions one have you read long distance real estate investing yes I think it was the first book I read okay good because that's the first book I wrote so we have something in common number two if I were to make a revised version of this book based on your experience doing this deal out of state what would you include or what what would you tell me to include in the book um I read it a while ago so maybe this was in there but bro you're 22 years old how long ago could a while I don't know two years year and a half uh I would rely on multiple project managers right those that can take the form of an agent just popping in every once in a while that can be your property manager that is responsible for tenant relations or that can just be completely different contractor that comes in with his own third party opinion about how your Project's going so you agree that the philosophy of have several people looking over everyone's work could extend into the actual rehab management that's what you're saying yeah okay anything else that I should know because I think I will revise this book The burbuck a couple other ones when I get some time I'm just curious what needs to go in these books to update them um don't rely on sales comparables that are old when you're initially looking at the deal because generally at least in my state the appraisers are going to look at the six months like the most recent sales in the last six months when they're appraising your property when when it's done so the one thing that I did on my first year was I was relying on a deal two doors down that appraised for the price I was going after but by the time I was done with the rehab that sales comp was outside the six month window so they no longer could use it that's probably more relevant today right I think so yeah I was just about to say for the last 10 years you looked at comps and that was your worst case scenario odds are it was gonna be better by the time it was done yeah the market has turned around rates that went from three percent to seven eight percent now we're seeing appraisals come in low very frequently right a house could have sold for 800 000 you list it for 750 the appraisal comes in for 6.85 or something because rates have gone up so much so that's another thing you got to be aware of is prices can go down now that rates have gone up and that can catch people by surprise any other surprises that came up specifically when it came to buying in another state that you just weren't prepared for you know always estimate a little bit over your initial rehab budget I the first deal I bought I don't think the contractor looked up in the addict but there were live electric wires running on the wood like floor in the Attic which is number one very dangerous and number two illegal and I had to address that immediately that bumped my rehab budget around 10 so I think and every project I've done since then there's always things that pop up I think a 10 per second to disease is just should always be used what about picking tenants what can you tell us about choosing tenants looking into tenant history what are some things you look for um you know if you're buying something already tenant occupied make sure they're paying they're paying on time um you can kind of see that the way that they're living if you go in there and there's stuff everywhere and it's full to the ceiling it's you might not always get your rent on time let alone even get it so you can still make deals work even with a non-paying tenant depending on how good it is right just make sure you're accounting those expenses and your numbers yeah we briefly mentioned this earlier and it's worth repeating it's very easy to especially if you're a new investor you haven't done this for a while to get a lease to see this property's making 950 a month to run your numbers based on the lease you close on the property you realize that tenant's eight months behind in rent hasn't been paying the landlord hasn't wanted to pay for an eviction or can't afford an eviction and so they just sold it to you that's why we verify that the money is actually being deposited in the bank not just what what the lease is for and this is really really really important when you're buying off Market Properties or deals directly from sellers like you're saying because most people when their property is doing well they don't think I should sell it even if their return on Equity is low even unless there's like serious concerns in the market and people are thinking I want to sell before things turn around if your property is making money and nothing's going wrong you just don't think about selling it but when things start breaking tenants stop paying it becomes a headache you try to fix it when you realize you can't fix it quickly sell which is often exactly when buyers are getting introduced to that deal and if you go in as the buyer expecting this is just like a regular house on the MLS that the seller has put in pristine shape and they're trying to get top dollar you can really get taken advantage of is that something you have any stories you can share of clients you've had or situations you've had where that's been the case yeah um an off Market deal that um I didn't sell but it was in my office but this is a great example um it was a duplex where both tenants were paying 1100 a month the rental comps were truly around 900 Max a thousand so it was really high um which is should always be a red flag if you're seeing units renting for way more than what everything else is around it but when that property closed when the seller got his key or when the seller's PM got their keys and they went to the property both units were vacated it's vacant and they both left so they were and that investor I'm assuming was random numbers based on 2200 a month in rent and they're not going to be getting that that's a great example thank you for sharing that so let's get some quick Clarity here this was your first deal how quickly did the rest of your deals come together after this first one yeah so the next four that I bought were in around a month to two months after that um and then ever since then I've been picking up about one to three every single month and are these you're finding them the same way that you were finding deals for clients uh yeah pretty much the same ones yep all right Josh looking ahead what does your plan look like for how you you intend to scale your portfolio I'd like to build more Contracting teams so that I can take on more projects at a time right now I'm working on 15 units I'd like to build a 10x that rely on more people a W-2 more positions so that I can rely on them more and cut your costs down a little bit um those are some lessons that I've learned from professional property managers now are using the bur method on these properties very often yes for sure okay so with the change in the seasoning period that we're seeing with a lot of conventional lenders have you considered how that's going to affect how quickly you can get Capital out the speed you'll be able to scale definitely um my strategy hasn't really been affected by that because I actually am not lendable still because I don't have two years of the same income as a 1099 person so basically I'm just refinancing out in non-qm products that is awesome hey David you mentioned that there's a change in the seasoning period what what is that change like is it I know with the Burr you have to have the tenant in there for I think six months is that what you mean now it's longer than six months no it's not necessarily the tenant has to be in there but if you are buying a property that has a loan on it and you want to refinance and pull cash out of the property you now have to wait 12 months instead of six months if you're going to use a conventional loan now Josh mentioned he's using non-qm which stands for non-qualified mortgage this would be like dscr products that you're hearing a lot of people talk about it's important also to note that that does not mean like subprime crap these are still 30-year fixed rate loans it's it's not a whole lot different the rate's going to be a little bit higher because they're not going to be basing your ability to repay off of the money you make they're going to be basing it off of what the property will produce itself sort of commercial underwriting guidelines but many loans are making you wait 12 months before you can take cash out of property not six so it sounds like from what you got going on Josh and this isn't slowing you down because you're just making money through commissions as an agent you're not going to run out of cash right I don't think so no yep I love that multi-pillared approach right when you're not dependent on just one pillar these changes don't throw your game off because you've got several different approaches here what are you thinking Rob about about moving forward Josh's strategy I think it's good man I mean I would definitely want you to um I mean you're picking up a lot right and I think it would be wise to really settle into it right if you're if you're at this point where you're at 10 I would start thinking about with I I guess I'm just seeing it in your personal situation your young you're hungry you're making a ton of money and you're doing the right thing you're buying property instead of just pocketing 100K every month you're moving it into real estate funds but I would say now is a moment to maybe kind of taking a uh take a step back and start considering your scale approach right like how can you stop putting so much time into one to three properties every month and how can you start maybe focusing on bigger plays that can maybe even effectively you know lower your tax bill because I know that this is something that you're probably dealing with for the first time making a ton of money and having to pay a ton of taxes on it right yes yep so I kind of jumped on the whole tax situation as early as I could as an agent I set up my intake commission through an S corp versus an individual so that lowers my tax burden uh substantially and then I can also leverage like cost segregations as well and the properties that I'm keeping to lower my commissions coming in I'm trying to utilize as many strategies as I can absolutely yeah you don't hear 22 year olds talk about cost segregation all that often never heard that come out of a 22 year old's mouth actually you're the first time seriously dude I feel like we got to talk about cost segregations more just on the podcast because it is like the the real estate cheat code that can save you I mean in your case hundreds of thousands of dollars in taxes so that's cool man I'm really glad to see that you're saying it it seems like you're scaling up uh according to like what you can do so just think about how you can most effectively use your time because you got the time and the money right now now you just got to figure out how to use it the most effectively sure so your first goal was to replace your doordash income You've Done That What's your next goal my next goal um I want to have 100 units by the end of the year 100 units by the end of the year that's all yeah yeah that's just a little I mean it seems like you're thinking about exactly I'm talking about right if one to three properties in a year that's going to be 10 to 30 properties so obviously you're thinking how can I get to 100 right so um I I think it's so cool man that you you're on this podcast it's a very inspirational story you went from being a doordash driver to owning a 1.5 million dollar portfolio and it's also just so crazy to know that next year your portfolio is going to be wildly different than what we're talking about today I think so yeah so congratulations Josh this is an awesome story thank you for sharing where you're at very inspirational you haven't let anything stop you including your age or how much I think you look like Dave Franco you're pushing forward in spite of all of this you could speak in the Hollywood route instead you took the real estate investing route so welcome to our side if people want to find out more about you where's the best place that they can find you uh two places you can follow or message me on Instagram at joshjanis just my name and then same thing on Bigger Pockets uh Joshua Janus I'm on there all right Rob where can people find out more about you um you can find me over on uh raw built on YouTube and Instagram and in your heart and uh well that joke won't land because the other podcast comes out after this one but you will see why I laughed if you listen to a future podcasting so that will make a lot of sense this was a call back before it was actually said this is some uh tenant type stuff that we're getting into where we're manipulating time for you guys on a podcast you're gonna love it it's a call forward yes call forward even better there you go Josh it totally makes sense you don't know what we're talking about it will in the future so just hang with us here thanks for being a good sport you can find me on social media at davidgrain24 don't ever send money to me because I'm not asking for your money there's a lot of fake accounts out there so hopefully at one point I'll be able to get the blue check mark I heard that meta is changing it so that you just pay like 15 bucks a month and people can stop getting scammed it's about time uh you can also find me on YouTube at davidgrain24r go to my website davidgreen24.com and see what I got going on Josh fantastic job very very very excited to hear what you're doing especially because you're an agent and you're moving forward check out my books let me know what you think about the three books I wrote for uh in the top producing agent series for Bigger Pockets I'd be curious what you think is someone who's 22 and is already crushing it Rob you have any last words before we get out of here yeah Josh I guess instead you could check out the books that David just talked about but really the book that you need to be checking out is David's upcoming book scale which talks about how as a real estate agent you can scale your business and that will be coming out soon all right promo code for that we don't have one but anyway check that out we've got to call forward and a call back all in the same show great job Rob and we're back all right Josh we're gonna let you get out of here this is David Green for Rob the comedian absolo signing off [Music] thank you

Channel: BiggerPockets

Views: 298,864

Keywords: real estate, doordash, door dash, real estate investing, real estate investor, real estate agent, new real estate agent, real estate agent commission, wholesaling, real estate wholesaling, wholesale real estate, off market real estate, real estate deals, off market real estate deals, off market properties, real estate investing for beginners, cash flow, passive income, side hustle, real estate portfolio, brrrr, brrrr method, biggerpockets, biggerpockets podcast, podcast

Id: nVgAoA2usRY

Length: 55min 55sec (3355 seconds)

Published: Thu Apr 06 2023