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How to Build a $1M Net Worth at 31 While Making $55K per Year Through Long Distance Real Estate Investing with Tom Brickman

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In this episode of the Personal Finance Podcast, we're gonna talk to Tom Brickman about how to invest in out-of-state rentals.

 

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Transcript:

 

On this episode of the Personal Finance Podcast, we're gonna talk to Tom Brickman about how to invest in out-of-state rentals.

What's up everybody and welcome to the Personal Finance Podcast. I'm your host Andrew, founder of Master money.co. And today on the Personal Finance podcast, we're gonna be talking to Tom Brickman about how to invest in out of. Date rental properties. If you guys have any questions, make sure to hit us up on Instagram or TikTok app Master Money Co.

And follow us on Spotify, apple Podcast or whatever podcast player you love listening to this podcast on. And if you wanna help out the show, leave a five star rating and review on Apple Podcast, Spotify, or your favorite podcast player. Now, today we're gonna be talking to Tom about how to invest in out-of-state rentals, and I'm really excited for this episode because we've been getting a lot of qu.

Questions from folks who cannot find rental properties who cash flow in their area. And so they wanna look for out-of-state rental properties. So this is gonna be a great episode because Tom has built a very large portfolio and he started off building a portfolio of over a million dollars by just making $55,000 per year.

And we go through all the strategies that he uses. The financing. In addition, we go through how he built out his team, which is very important, obviously in out-of-state rentals. Then we go through how he finds his properties and some additional creative things that he does in order to acquire properties.

So, really excited for you to hear this episode. I think a lot of people are gonna enjoy this one. So without further ado, let's welcome Tom to the Personal Finance Podcast. So Tom, welcome to the Personal Finance Podcast. Thank you for having me. Excited to be here. We are really excited to have you here because today I wanna dive into a topic that a lot of our audience is really, really curious about because they're having a hard time finding rental properties where they live.

And so what we wanna do is kind of dive into out-of-state real estate investing and you've mastered that and you've done it over the last couple years, so I'm really excited to talk about that. Before we dive in, I saw you had a really cool Twitter thread where you were talking about how you were making $55,000 per year and you were working at a movie theater and you became a millionaire just with that salary.

And I think one really cool thing that I love to talk about on this podcast is that you can build wealth on a low salary and or on a middle class salary, and you are proof of somebody who can do that. So can you kind of talk through how exactly you did that? Absolutely. I got creative early on. By default, I started in college and I didn't have enough money for books, so I started reselling on eBay.

I'm sitting in my eBay room right now as we talk, and I started with purses because they were cheap and they were a good name brand, not because I'm a purse collector, but it was a default. For me, and that paid for books and helped me pay for college that semester. And it just kind of got the wheel rolling.

And I'm like, okay, if I can sell purses, what else can I sell? And I mean, I do makeup, I do bras, I do all of that stuff still today. But that was really what helped me get. A property every year. It wasn't that $55,000 salary, it was that side hustle that pushed me over the edge and it's like, okay, now you can afford this.

Okay, we need to fix this one, so we need to sell this much on eBay. And that was really what did it. Cuz if I just waited for that salary or I just invested with that salary, I still would be handing people popcorn. Exactly, and I love that because I think that is one place where I started too, where I was in college, I used to sell stuff on eBay all the time.

And I think it's one of those things where it's an amazing way to kind of get started and you know, you can really make a lot of money on eBay. Even now. I've seen people do it as of late. So it's a really cool way to kind of supplement your income and that extra income you can put towards wealth.

Building activities and obviously you can start to build wealth that way. So really cool that you kind of went through that process and talked through it. I encourage everybody to check out that Twitter thread. We'll link it up in the show notes down below too so that they can take a look at it. So today we're gonna talk about out-of-state real estate investing, like we talked about the top of the show.

Really excited to talk about this because you've figured out a way to do this and a lot of people for a long time, you know, especially new investors are like, well, I can't find any deals in my area. Um, and it's a big issue that we have with a lot of our audience as well. So what made you decide to start to invest out of state?

It was by default. So I bought one at 21 while I was in college in Toledo, Ohio. And then that one always made money, but it dropped in value, so I just held it out of, I don't wanna sell it at a loss. And it still continued to cash flow the entire time I had it. And then I went back in 2018 and 2019 when I really got pushed out of Dallas.

Cause I couldn't make things cash flow. And that was just, You know, at one point in 2009 and 2010 when I was buying in Dallas, they were the same price. So it made sense. I'm here, I'm closer. But then as things continue to rise and the values continue to rise, I couldn't make money here anymore. So I went back to Toledo because I already had some systems in place for the duplex that I had there, and I started to grow the portfolio there.

And I mean, your money goes a lot farther in these other states. It's strictly a cash flow play. Because I don't have that much cash flow in Dallas, and that's the other thing that people don't understand is it's really hard to get that mix of cash flow and appreciation. Dallas has a bucket full of appreciation, but very little cash flow.

So I knew if I was really gonna ditch this nine to five, I needed to get some cash flow in there cuz the appreciation wasn't going to pay the bills until I sold off that property. And I love that, that you kind of had that goal in place to replace your job with that cash flow. And so you went to look for markets that actually had that cash flow available for you to be able to do that.

So if someone else is just starting right now, say for example, we've talked to a lot of folks who are in really expensive areas in California, or really expensive areas in Florida, for example, just to name a few, are there ways that you would kind of think through and evaluate different markets so that you could find it maybe an out-of-state market somewhere, you know, across the country that they could kind of think through?

Maybe they wanna start investing there. Yeah, I mean, I look at, obviously cash flow. I look at is the city growing? Is it declining? I look at the return on investment. So when I buy something at 50,000, what am I going to get back out of this 50,000? So I look at that 1% rule. Does this hit the 1% rule? And a lot of the markets you go to now don't hit that rule.

So that's an automatic, like, okay, that's the bare minimum that you can look at. And then the growth on the city. Like one of the things that's really helped me is I've joined the Facebook groups and I subscribe and I pay for the newspaper there and understanding what the city's doing. And I'm seeing it right now in Toledo where they're spending a ton of money in East Toledo, which wasn't the case 20 years ago.

So I avoided it like the plague. But then I went back this year and I bought one in late 2022. And. I was floored that I had a hundred people through my showing in two showings. Like that's just unheard of for there. So I think understanding where the trends are going, and I mean this is any market in Dallas even too, cuz I got into some neighborhoods before they really started working there.

But following where the money goes and where the city's spending the money and where there's different things popping up that make it an attractive place to live in. I think those are some great tips cause you can kind of ingrain yourself into what's going on in that area. Cuz you really have to know the area obviously before you start just spending your money there and spending your hard-earned dollars so that you can build wealth into some of those areas.

So when you're looking at some of these out-of-state properties, how do you start? Maybe you pick your area, let's say for example Toledo. So you pick Toledo, which is outta state. Say for example, you go in, you're starting to look for properties. Do you go out and look for agents or do you go through Zillow or the m l s or how do you kind of think through that and look for properties when you're looking at out-of-state rentals?

I have multiple different strategies. I'm not realtor loyal. I will go with realtors. I will go with mls, I will go with off market. I was just in Toledo a couple weeks ago working on two projects and I started driving for dollars and I was sending my friend all the addresses of all the properties with the houses, with the overgrown grass and, and the rundown properties.

And I'm like, check this one, check this one. I have off a lot of stuff. Like the stuff that I've bought this year came off market from cold callers. That I have. So there's multiple different ways, but what I'm seeing people realize that Toledo's an undervalued market is that stuff on the MLS is going really high.

And for me, who's been there as many years as I have, cuz I started in Toledo almost 20 years ago, I can't stomach overpaying for a property there cuz I know that it's not gonna have that type of appreciation that Dallas would have or so on. So I think that's why I went to the off market and it's worth me spending some money having someone do some calls for me to find out who owns it.

And I think that that's important as well. Cuz when you buy in a area that you're just in for cash flow, if you overpay, you're gonna be underwater for quite a while. And I see some investors doing that as well. Exactly. You make all of your money, you know, buying the property. So that's the big key is making sure that you buy that property.

Right. So that's an interesting piece that you have cold callers that you have go through and you know, maybe you drive for dollars, you send 'em to your cold cars. Is that kind of how your system works or how does that work? Yeah, I have a wholesaler that I work with directly and we have cold callers that work for us.

I am new to that. I've only been doing that for about six months, but the more and more my account grows, the more and more people are like, I need deals. I need deals. And. I can't with a clear conscious be like, this is a deal when I know for sure it's not. So that's when I went over to cold callers and I'm like, Hey, this is working for some people.

Let's try it out. And from the two months of doing it, we've gotten two deals out of it with a third in the works already. So I think that that is a strategy to approach now instead of just overpaying for a property and competing with 10 other people bidding on the one decent property that does come up.

I think there's a lesson in here because you kind of shifted gears as you start to search for properties, and I think a lot of people have to think through this. You gotta see what works in that market and kind of figure out what type of strategies are going to be working in that market so that you can move forward and kind of find those properties as you go around.

And I love driving for dollars, as you talked about earlier. That was one of my favorite ways to find properties. I would do it all the time that I would said like handwritten letters all the time, but it's obviously a, a big time consuming thing to do it that way. But that's one of the best ways to find an off-market property, so I love doing it.

That way as well. So one big thing that we talk about is, you know, managing, and I think that's one of the biggest questions that people have when you're managing out-of-state rentals and they're kind of fearful of that and having to go through that whole process. So what does your out-of-state team look like?

And, you know, how do you manage your properties? So I have 14 doors there. I do have a professional management company on two, and those two when I go and visit are usually the most neglected. So I've struggled with that. So what I did a few years ago was I hired a contract employee who reports directly to me and.

Runs the other 12. And those 12, you can tell with him being on an hourly salary are a little bit better kept and a little bit better maintained cuz he wants to clock his hours and make sure that he's getting paid. And that was something that I shifted to because the complaint that I get from everyone, and I have other investors in that market that are like this property management doesn't work, this property management doesn't work, was my solution.

And it's worked out well. He has the. Direct contact with the tenant. So I'm not getting any of that. He has the direct contact with the contractors and you know, if someone's like, Hey, my heat's out, or I've got a broken pipe, he can get someone there and then let me know after the fact, Hey, we had a broken pipe over here.

This is who I sent and this is how it was fixed, and so on. And that has worked for me. So I do have a hand in it, but it's a very small hand compared to 20 years ago when I was self-managing. That's a great solution because I've been in a lot of markets where you look at the property management companies around there and they all have one stars and you go and call some of the references and all the references like, I have to manage these people and go through that.

So that's a great solution to have kind of an employee there that's on an hourly rate, um, that can kind of help you manage those properties. That's a great idea. So you mentioned you had contractors in place, so how do you kind of manage rehabs? Cause I know you do a lot of properties where maybe you buy an ugly house and then you do a, a major rehab on those houses.

So how do you kind of think through that? How do you find those contractors? And then do you go to the location, you know, and kind of manage some of that too? I. So I project manage everything and make the scope of work with everything, trial and error. Even in 2020, I hired an electrician. He had done half the work.

He's like, send me the other half. I sent the other half and then he ghosted me. So that was a $3,500 lesson that I won't make mistakes again. But that's, I've been in it at 17, 18 years at that point, and I'm still getting ghosted and I just lost $3,500 and that is, I have really strong team in Dallas and a really strong team in Toledo.

If I could put them together, I'd have like the ultimate team. But I have strengths in Dallas and I have strengths in Toledo, and that is just a trial and error. And I built my team off of referrals and necessities. And when that contractor ghosted me, I'm like, who do I contact? And I ended up contacting a neighbor.

From one of my properties. Whenever I buy a property, I go up and I meet the neighbor. I give them like my card, or I send 'em a Christmas card every year and I put a gift card in it just so if my tenants are having a party, they're gonna text me or they're gonna call me and be like, dude, your house is a wreck.

But I ended up approaching a neighbor who he had his electricity. Truck in the driveway always. And that's who I ended up having finished the project for me, cuz I explained it to him. I'm like, I know that this isn't next to you. Do you have any time? I've called all these electric companies. This guy took my money and ghosted me.

And he is like, oh, I'll see if I can get to it. And then like two days later he's like, okay, I got in there and it we're good. And the city approved the permit and. So it's really, you build it as you go. And in Texas I started with an H V A C guy in Toledo. I started with a carpenter and that's how I started building that team of contractors was trial and error.

And I got a really good plumber early on cause I had plumbing issues at one of the ones in Toledo. So I was just talking with them so regularly. And now when I have jobs, I'm not like calling 10 plumbers, I'm, I go right to the person that I have cuz I know that they can get the job done. Their rates are reasonable.

When you look at the. Big picture, and that's how I built. And then I also, in addition to the property management and the contractors, I have a preferred title company in both cities and states. I have a preferred attorney that I use in both states. So I've been burned enough over the 20 years that I know I wanna use this company.

They can get it done and this is going to be the least headache for me. And that was just a learn as you go and talk to other. Investors in your area that are doing it. And I think that's the best way to do it as well is is talking to some of those other investors cuz they know who's good, who's not good.

And that's kind of how we built our team locally here too, is just kind of trial and error. You kind of kinda have to figure it out as you go on. And we've been burned by folks as well. It's one of the harder parts of real estate early on if you're trying to figure out how to build out that team just to have the right people in place and just kind of managing those team members.

And still you have to manage the managers even. So that's another key when you run through this. So. Say for example, someone finds their market and they're there, they're ready to make an offer. Do you think they should have that team in place before they make those offers? Or do you think that you know, you can do it either way?

Not necessarily, but you do need to have some, like you do need to know, okay, if I'm making an offer, I need to have that inspected. Who am I gonna have manage it? And that's really a lot of what I'm helping. First timers with is, okay, let's get our systems in place. So when we close and we've wired that money, we've got a contractor in place for this.

We're closing. This is how we're gonna advertise it. This is what needs to be done to get it fixed. This is who you need to call to get the water turned on and set up your lease. So I think that if you're making an offer, you need to have some ducks in a row so you have a plan when that money goes out, that it's not sitting there for six months while you're scrambling trying to find who's going to do this work, or who you're going to rent to, or who's gonna watch it for you.

And part of that is just like you said, kind of going through maybe some of the online Facebook groups and or you know, reading local newspaper, you'll see some stuff available there, networking with some of the investors locally. There's a lot of things that you can do there where you can kind of get some of those contacts right away as you start to make offers.

Now, we talked about this earlier, a little bit earlier, but you make all your money when you run the numbers and when you buy the property. That's the key is being able to know how to run the number. So is there a tool that you use to run the numbers and or do you use a spreadsheet or how do you do that?

I have a spreadsheet, but my most basic rule and the rule that I did for many years, cause I didn't know any other way, was the 1% rule. So if I'm buying a hundred thousand dollars house, I wanna collect a thousand dollars in rent cause that's 1% of the house value that I'm paying. So if I'm not making that thousand dollars in rent, then I am staying away from that property.

And it's harder and harder as interest rates go up. But that is the most basic. Rule for people to start with when they're looking at something and it doesn't work for short term. There's a different formula, and the majority of my portfolio is long term. I have the one short term, but that's gonna be your most basic rule when you're looking at something is, can I make my 1% here?

And that is the first thing that I look at as well, when I'm looking at properties. If it doesn't meet the 1% criteria, then I'm not even gonna look at it. I'm not even gonna go out and check it out. Cause it's almost like a quick scanner for you. You can kind of go through, see how that works. So obviously if we want to run the numbers on the, and have the 1% rule available to us, we gotta figure out how much it's gonna rent for.

So is there some tool that you use to figure out what rents are gonna be in that area? Or are you just kind of watching the rental market as you, you know, through Zillow or the MLS or something else? I use Rent Meter, but I also use Zillow and I find that Zillow's a little skewed. Um, but rent meter pulls from a couple different sources.

So when I plug it in there, I find it's a little bit off from the Z estimate, but it's more accurate and that's where I'm going to go in. And when I started using that, I'm like, oh man, I'm like $300 under market on this one. Like I need to start looking at this more. So it was worth it for me to actually.

Pay for and use a tool versus just going off of the MLS or going off of Zillow because I was kind of cutting myself short and I went up and I did their pro whatever it is on there, and I'm like, it's worth the hundred dollars, cuz now I'm making 200 extra dollars on this property that I thought was $800 and now it's a thousand dollars.

So I think that the more you know and the more you dig, it makes it worth it in the value that you get back from the property when you're renting it at market value or around market value. Rental meter is the same tool we used to. I think it's the best tool out there for kind of figuring all this stuff out.

And then you, you can look at Zillow and some other references too and kind of see, make sure all lines up. But I think that's probably the best tool also. That's the one we use. So financing is a huge one here. So obviously there's so many different ways to Financ. You do some creative financing, we could talk about here too, but how does financing out-of-state investments differ from maybe local investments?

Understanding the laws. Like right now, I just bought a property owner financed. I was ready to buy it cash and it was much rougher than when I pictured in my head. So I get there and I go through it and I just told the owners, I'm like, I can't even get a hard money lender to loan on this. This is rough, rough, and all my numbers are way off.

Cuz I thought it was in this condition and it's not. I have 45,000, but clearly 30,000 is going to have to go into putting this house back together. Will you carry a note for me? And they're like, how does this work? And what I structured on that was I structured a five year buyout. I'm at 6% interest, and my goal is to buy them out within a year on that one.

But that also what I did was I offered 10,000 down just to show, you know, I wanna buy this property. I'm not gonna put 10,000 down and walk away from it. And they actually came back and they're like, how about 6,000 down? Because then if you stop paying, all we have to do is an eviction versus a full on foreclosure.

And I'm like, you want less money from me down? Absolutely. Let's do that. Yeah. And understanding that. Is key as well. So if you sell something owner finance, you're not in a situation that you have to do lots of money, foreclosure, cuz I've sold them to tenants before as well. There's been tenants that are like, I wanna own this property.

And I'm like, I wanna sell it to you. Let's make this work. And understanding that. Is key to structuring a deal and how to pitch it. Because even on that owner finance deal that I just did a couple days before closing, I'm like, guys, my numbers are so off and the electrician's coming in at 6,000 and if we do this and we do this, and they're like, how do we make this work?

So the owners were invested at that point, cuz they had had it sitting empty for almost three years and they're like, We need to do something with this. You're local, you understand the market, let's figure out how to make it work. And they came back and they're like, okay, what if we do we'll supply you with cabinets.

What if we supply you with doors? What if we supply you with, and they really brought me quite a bit of stuff that I needed for the project and that pushed the needle enough that I'm like, okay, I can make this work. And that's key as well. So owner financing is a way that I've done it. I've done bought, like when I bought a hoarder house, I bought that.

Personal line of credit for myself and some of my grandparents' money. And then I paid my grandparents back as quickly as I could. And I mean, I just got creative because there was a lot of stuff that I purchased that had been out of commission for years. And banks are like, we're not gonna loan you anything on that, that's got boards over the windows, so please look elsewhere.

And I think that that is key to growing this as well. Because if you just go a traditional loan or a traditional lender, you cut yourself off of a lot of good deals out there. Exactly. And that's where you're missing out on the stuff where you can, you know, force value into some of those properties if you have to go the traditional route, because they have so many criteria around them.

Have you ever done any out-of-state deals with the lender or bank? Absolutely. I've done portfolio loans, so I've bought stuff on the front end and then I've slapped portfolio loans on the backend once they are fully rented. And that is one of my favorites because in Ohio I'm buying stuff in that 25 to 50 to 75 range, and lenders are like, we don't wanna loan you unless it's a hundred thousand dollars loan.

Stop bothering us. So when I bring 'em to and I'm like, Hey, this is 150, they're like, we'll give you money for that. And I'm like, great. So the portfolio loans. Have been big for me in Ohio, so I've gotta get 'em over the finish line and get 'em rented, which is very tough and challenging in itself. But that portfolio loan gets me my money back and it's all like a sigh of relief when that finally hits, cuz I've just paid myself back for the six months of working on it and renting and renovating it.

When you find those local lenders in those areas, do you do them, you know, the local lenders in Ohio, are they actually physically located in Ohio or have you ever done lenders where they kind of invest out of state? I've done both, and I've found in Texas and in Ohio that the credit unions and these smaller banks are like, yeah, we can do this.

When I get a lot of nos when I go with nationals. So for me, sure, the local credit unions have been really good to me in helping me grow my portfolio because they want their market to thrive. They wanna see this thing go through, they wanna see that boarded up house, have a tenant in it because it's down the street from their location and that's a new client for them and that, you know, so that's been my strategy.

I have used the national lenders and it's been heart-wrenching at best, is what I'd say, because I'll get to the finish line, they're like, oh, we can't loan on this one. And I'm like, we just spent two months talking about this one and now the day before closing, you're like, we can't do it. I've found the same thing with some of the national industry.

I think it's a lot easier to use local banks and or just smaller banks in general because they have more people who wanna grow that bank and that's why they want more loans and they're more willing to kind of lend down money, which makes a lot of sense. So you mentioned that you found a bunch of off-market properties in some of these areas, and what are some of your favorite strategies?

We talked about driving for dollars and then you talked to the neighbors sometimes, I'm sure. Is it just kind of talking to more people? Is that how you find those off market properties? Or do you do any mailing campaigns or anything else? I haven't done the mailing campaigns, but I do have a friend that's been very successful growing his portfolio there.

And he even got one that was 0% interest cuz they're like, we just don't want it. If you'll pay us every month for it, let's do a deal. Yeah. And some of my best stuff has come off market and it's been like, I handed out a business card at a flea market in Texas, and the guy who sells me the nail polish that I'm selling on eBay is like, Hey, my mother-in-law passed.

It's a hoarded house. Do you want it? And I'm like, yes. So I think that. Some of the things that people are like, that doesn't work well. I mean, I bought a $15 box of business cards and I passed 'em out and I've gotten two deals that way. And even there was one last year in Ohio that I passed out a business card in 2019 and he's like, Hey, do you want this property?

It was my dad's rental property. I don't wanna deal with a tenant and I don't wanna deal with this. And I'm like, that's on a great street. Yes, I want that. So I think that non-traditional is the way to go in this competitive market and. Besides passing out business cards, besides driving for dollars, besides cold callers, having conversations in those Facebook groups, in those multiple different sources that I was talking about.

Even in the bigger Pockets forum, you'll have people like, I bought this and I don't want this anymore, and I'm like, I do. I can clean up that mess. Right, exactly. And that's kind of the, the biggest thing I've noticed with off market is that what you're really doing is you're solving people's problems.

And if you can solve a lot of people's problems, what can happen there is then if you find a creative way to solve that problem, you can really acquire some great deals that way. I mean, it's a win-win situation. Their problem is resolved and then you are taking over a property that you want a cash flow for a long period of time.

So I think that's one of the coolest ways to buy rentals. And I think. Like you said, in this competitive market, I think that's the best way to kind of find properties right now, because if it goes on the mos, it's gonna have 50 offers every time. Um, and you're gonna have to be dealing with, you know, bidding wars and all those different types of things.

But in a competitive market, off market is one of the best ways that you can kinda look at properties. So I wanted to ask you two more questions here before we get into some of the other questions that we go a different direction with. But what is the worst property you've ever bought? So I bought a property in Cleveland, Ohio in 2004 that I paid top dollar for, and it fell in half.

And by 2015 I had done my first eviction. It was a mess from start to finish, and I ended up selling it for 22,000 less than what I bought it for. And what I wrote that check, it was my birthday. I'm like, this is the. Best birthday check right. I've ever done because it's out of my life and I have a tie cuz I'm actually struggling with one that I purchased last year That is just like, no matter how much money I put into it, it's just not the right property for me.

And I do have a tenant in it, but I'm still spending, like, I've spent $10,000 this month on a $25,000 property, which is just mind blowing and I'm getting it all fixed and. I cannot wait to get there and slam down a for sale sign in front of the property because it's just one of those that you can throw money at it all day long, but it's not gonna fix the issues of the actual house that's 130 years old.

So I've had two that have really challenged me over the years, and one of 'em was just last year. I know exactly how that feels. We've had one before where it was actually the second one we ever purchased, and I could not wait to get rid of that thing. We luckily didn't lose money on it, but I just could not get wait to get rid of it.

There were so many issues with, it just wasn't the right property for me as well. So that makes complete sense. What is your favorite property you've ever purchased? I. Favorite property I ever purchased. I purchased a property that I said no to three times, and it was a mid, like a 1950s build mid-century.

And I just, I lived in it for three years and I did it room by room exactly how like Architectural Digest would encourage you to do a 1950s build. It was the nicest one on the street and it just, By the time I sold it and I did sell it, it looked amazing. It had a guest house in the back. It had every detail done to it and it took me living in it to be annoyed by what it didn't have to make it what it should be.

And when I slapped that for sale sign up, and I sold that one strategically cuz it bought five more, it showed great. And we weren't in that competitive of a market at that time, but I still got eight offers over asking. So it was one of those that just stood out amongst the pack and it worked out.

Because I lived in it, so I had to be forced with the, oh, we can't cut this corner cuz it's gonna annoy me. And it just looked like a architectural digest house by the time I was done and it looked like a dilapidated house when I started. That's incredible cuz you put all your time, your energy, your emotions, you live there.

There's a lot of things involved in that. So that's amazing that you get along those offers over asking. That's really, really cool. Okay. So I wanna shift gears here cause these are some of the questions that we go a little bit deeper with our guests, and I love some of the answers that we get out of these.

So the first one is, what part of your work or life makes you come alive? I love starting every project and I love building a Pinterest board for every project cuz I'm like, oh, I'm gonna try boho on this house. Oh, I'm gonna try this on this house. And it's like a clean slate. So when I get that closed and after I've transferred it over into my little Zillow, this is actually my house list, I start building that Pinterest board on, I'm gonna try this and I'm gonna do this color and I'm gonna do that.

And I get excited. As the finishes start going up, like I've been doing foundation on one of 'em and I'm, it's been dragging, but now the light fixtures just came in, so I'm like, oh, it's starting to look like a real house now. This is exciting and that is one that I can just get excited about because again, it's another eyesore on the block that I'm able to turn into something that people are.

Fighting over renting. They want it now because it's gotten that TLC that it didn't have for the last 30 years, and that gets me fired up. That gets me excited. I think I get excited when I do the showings, even if I get harsh feedback. They're like, oh, I would never do that color. I'm like, well, I did it and it's mine, and that's what it is, and we're not painting it.

And I think that that's a blank slate. And that's why I always did one a year. As I worked at the theater, it was like, okay, what's the fresh one gonna be this year and what can I do to kind of make it look different or better than the other ones on the block? And that's one of the coolest things about real estate investing is we have the opportunity to be able to just improve neighborhoods and you can make the best house on the block.

That's what we really want to be doing, is in kind of improving those areas and really changing the dynamic of some of those areas too. What is your biggest fear when it comes to money? What is my biggest fear when it comes to money? Definitely running out and as I've been out of my job now for about a year and a half, you look at things a little bit differently.

Even though you have that emergency fund, you're like, uh, do I really need this? Do I need to do that? And I'm struggling with that balance. This needs to go to this property. This is a good investment and. Maybe I don't need to do this finish or I don't need to do that, so I'm not cheaping out. But I'm also being more mindful because what I used to do is behind me with eBay is I just sell and sell and sell, and then I'd buy it.

And now that I don't have that regular nine to five income, I'm a little more frugal with the money on those types of things. Makes sense. It's consciously spending kind of through some of that stuff, cuz it is, even if you have the emergency fund in place, a lot of people don't talk about this and I've talked to people who in financial independence and stuff like that as well, where they, sometimes they have these portfolios and index funds or something like that and they still, it's hard to draw down that 4% sometimes it's almost kind of getting through some of that stuff.

But even if you have the emergency fund in place, sometimes it's just kind of hard to get past some of those mental blocks too. So I completely get that. How do you plan to level up your finances this year? Do you plan on buying more properties or what is your plan this year? I have bought three already and I'll have one going on the market in Dallas next week, which has been a very tedious five months.

And I have to start saying no to some things and that's where I messed up last year cuz like at the end of the year when I slept down my taxes on the accountant's desk, he's like, you need to start strategically selling cuz you made nothing because you invested it all into these five properties. So, Let's look at this a little bit differently.

And now I know that after that year of him being like, you've spent everything you made, you need to do better. And I'm saying no on certain things, or I'm helping other people see, hey, this is a deal that I'm not going to take. Do you want it? So, That has been a goal of mine for this year is I'm strategically selling a few properties and I'm saying no to the ones that are just a little bit too far gone, that it's gonna suck up time, energy, and effort.

And that was something that I didn't say no to last year, that I should have three properties already this year is awesome. That's fantastic. Congratulations. So the next one is, what is the best money advice you have ever received? What is the best money advice I ever received? I'm gonna have to say that.

Figure it out as you go. And where I'm going with this is my grandma came out and looked at my first property in 2004, and she came with my dad. And there was one that I desperately wanted that was beautiful and everything had been done. And then there was two others that we put on the list. So they weren't driving out hours and not looking at anything.

And they went into the one that I loved and they're like, no. No, this is trash. You don't want this. And then they went into another one and then they went into the last one. And I remember standing on that front porch with my grandma and dad, and she's like, this is the one you're buying. I'm like, it's ugly though, and I don't like it.

And she's like, this is where you make your money. You're gonna figure this out. And there is value here and you're gonna live in that ugly unit cuz the nice one downstairs brings you more rent. And she was right and she was like, I still own that house in my portfolio at store number one and two. And she was right.

And I'm glad I've driven by that one that I loved and I'm like, oh, it looks terrible. She was right. You have to walk across the roof to get into the upstairs duplex. This is no, makes no sense. And. Figuring it out as you go really is like her saying, you're gonna make money on the value of this property.

You're gonna make money as you improve this property. And that stuck with me even as I was like venturing out of my nine to five. My realtors that I do work with are like, I know not to show you a move-in ready house. I know to just show you either dated or about to fall over houses cuz you know how to make these dated or falling over houses work.

That's amazing wisdom there, cuz I think one of the biggest things, obviously we know now is you can force that appreciation into those houses and she had that wisdom to kind of tell you and look at how many properties you've built and grown since then, just because of that wisdom. So that's absolutely amazing.

The last one is my favorite one and it is, what does wealth mean to you? I. Wealth used to be a number, and I'm sure that you get this answer a lot, but now wealth is owning my time and being able to go sit with grandma in the middle of the summer and last weekend, going to spend time with my sister who's struggling with cancer.

Like that is my definition of wealth because I don't have to beg for p t o. The only thing I need to do is get myself there, and that owning my time and being able to jump on a plane or go on a a weekend trip without begging for time off. Is true wealth and having that flexibility is not what I pictured wealth being, but being here, I know that ownership of my time is the absolute most wealth definition I can come up with because I've been in this a year and a half and it's glorious not begging for p t.

There is nothing more freeing than having that control over your time. You're absolutely right. So Tom, this has been absolutely amazing. I know our, our audience is absolutely gonna love this. So where can people learn more about you and find out more about you? Sure. So I am super active over on Twitter at The Frugal, but I am the same name on Instagram and TikTok, and then through my website, the frugal gay.com.

Perfect. We'll link all those up down in the show notes below. Thank you Tom, so much for coming on. Thank you for having me.

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