Find the Real Estate You Hate (So You Can Buy the Real Estate You Love)

Brandon:
This is the BiggerPockets Podcast show 538, where we talk about a whole ton of stuff with commercial and residential revitalization of downtown with an awesome guest, Katie Neason.

Katie:
But we’re doing this because we want a sense of freedom of your life back. You want to live a different life. So, if you just have more problems and hate what you do, just stick with your job. Even though like my first two investments, if I started over again, I’d probably pick a different path, knowing what I know, I learned so much that I wouldn’t exchange it at all.

Brandon:
What’s up everyone, my name is Brandon Turner, host of the BiggerPockets Podcast, at least for the next few weeks until David takes over as host, and I’m going to spend some more time surfing. Today’s the podcast… This is the show where we… It’s our mission to arm you with the tools needed to jump into real estate investing so you can reach that financial freedom faster and make more working a nine-to-five job optional.
I’m here today, again, of course, with my bestie and co-host David Greene, what’s up David Greene. How are you doing, man?

David:
I’m doing fantastic, actually, in a really good mood. The David Greene team went on a tear. We have a Southern California division and a Northern California division and the SoCal team’s on fire. They have 14 houses in contract. A month ago they had like four. That’s going-

Brandon:
Ramping up.

David:
Yes, absolutely, and that gets to be pumped up, because every single person we help get a house under contract, I look at like we just made a future millionaire with the way that things are going. I am in a very good mood and I’m happy, thank you for asking. How about you? What’s going on in your world?

Brandon:
Man, I just got done with a five week vacation. That was a long time. I went to Disney World-

David:
I’d missed you, man. I don’t think I told you that. Five weeks without Brandon is harder than it sounds.

Brandon:
It was a long time. But yeah, man, I missed you too, actually-

David:
What’d you do?

Brandon:
Everything. I did a week in Coeur d’Alene for AJ Osborne’s conference, the Self Storage one and then I did BP Con, and after that did Disney World, then after did Disney Cruise and then after that spent a week in Washington. Oh, and I stopped in Houston to go check out the new… We got like a $71 million property under contract in Houston, and we raised all the money for it in like a few days. For being vacation, it was a very big month. Bought more real estate than in my entire life combined under contract in one month.
Crazy. I like vacations. A couple of years ago we released a journal at BiggerPockets called The Intention Journal. It’s not one of our best selling books. It doesn’t sell anywhere close to what BRRRR or Rental Property Investing does. But this thing really changes a lot of people’s lives. In fact, our guest today uses it and she talks a little bit about it today in the show. My encouragement for you is, if it’s not this journal, I don’t care what journal you use, but a success-based, goal-based journal that you fill out every day and every week has been such a huge monumental tool in my life.
So, I want to encourage everyone to look into that. Whether it’s the BiggerPockets one, or something different, check it out. Ours is called The Intention Journal. You can get it at biggerpockets.com/store.

David:
Especially because we’re coming up to a new year, which is when everybody really… That’s when you should be drilling down to come up with your plans. I’m going to be hosting a free webinar for anybody that wants to come and just talk about how I set goals, the way I set goals, the format I use, and why they’re important. If you’re following me on Instagram, @davidgreene24, you’ll see whatever that information is when I posted about that, because goal setting is massive, man. It is literally programming your brain to go get you what you want in life.

Brandon:
I love it, man. I love it. Well, keep delivering the goods. Speaking of goods, we’ve got a good show today with Katie Neason. Katie is a buddy of mine from down in Texas who does a lot of really cool stuff. Everything from commercial redevelopment, taking old buildings and remodeling them, to building townhouses, to flipping houses, buying rentals.
She goes through her story, a lot of… She got into fourplexes and a lot of stuff that you’re looking to do, and then she found out very quickly, she hated it. You’re going to learn about why that is, and some of the lessons behind that. We go into how to find deals off market, how to talk to sellers. We go through a lot of just tangible, tactical stuff that could change your business forever. I think this is going to be one of those shows you’re going to remember for a long time and it might just impact the type of investing you pursue. Because if you’re anything like me, you’re going to hear this and be like, that is too for cool. I want to do it.
I’ll say trigger warning on this show, it’s very easy to get shiny object syndrome with stories like this, because they’re so cool. You’re going to love it. All right, now, that said, let’s get to the show. Katie Neason, welcome to the BiggerPockets Podcast. Awesome to finally get you on here.

Katie:
Oh, man, it’s so awesome to be here. What an honor.

Brandon:
Thanks. Let’s go into your story a little bit. You and I know each other a little bit, but let’s introduce you to the world of BiggerPockets. How did you get into real estate?

Katie:
I grew up as an entrepreneur. As a little kid, I always wanted to be an entrepreneur, but both of my parents were in the real estate industry in the ’80s and early ’90s in Texas. I was pretty sure real estate wasn’t going to be a good option for us. Went into the corporate world, wondered how I could start a business, and then like many others, read, Rich Dad Poor Dad, and really it put context around my mindset about money, and it brought to the realization that our problems of the ’80s and ’90s weren’t about real estate, they were about our relationship with money, and just caught fire about real estate and just had a piece like, that’s the direction I need to go.
Within a couple of weeks I went and bought a condo. My deal was… I don’t know if you all have ever Googled Robert Kiyosaki’s name, but he’s got just as many haters as he has fans. I had no idea, is this a fraud? Is this guy for real? I decided I wanted to do a test case to see if it worked. I found a $17,000 condo in my hometown, low income. Had a tenant that was paying $550 a month in rent. I even borrowed the $17,000 from family and bought it and it worked.

Brandon:
That’s cool. What year was this?

Katie:
2006.

Brandon:
Wow. Okay. $17,000… What town is this in? It’s in Texas, right?

Katie:
Bryan, Texas.

Brandon:
Texas.

Katie:
Bryan College Station, home of Texas A&M, that’s how most people know it.

Brandon:
I’m assuming you still can’t buy condos for $17,000 anymore.

Katie:
I think it’d be hard to find, but in this particular condo, when I took my husband to see it for the first time, the reason it was a special price is it was a gated community, but the gate was always broke. But as you turn and went down the street to get to the gate, it was lined with fourplexes, and they were all boarded up with plywood and vacant.
My husband was like, “What have you done?” I’m like, “Well, this is what opportunity looks like.” We had a drug problem in the area and the cops went in, kicked all the tenants out, boarded it up and basically sent letters to the homeowners and said, “You’re responsible for what goes on in your properties.” That made it a really good price at the time.

Brandon:
Wow. Yeah. Okay. By the way, Rob, your husband. For those people who were at BP Con this year, and you saw an actual real life cowboy walking around, that would be Katie’s husband. I think he’s the most cowboy looking person I’ve ever seen in my life. It’s great.

Katie:
Now, he’s going to listen to this. His head’s going to get big, but yes, that is who he is. He was not dressed up.

Brandon:
Yeah, he is a true, authentic cowboy. He’s what all the cowboy wannabes want to be is your husband. That’s awesome.

Katie:
Yes. The tax return says, working cowboy for his job.

Brandon:
Yeah. Is it really? That’s funny.

Katie:
Yeah.

Brandon:
I didn’t even know that. He is legit, not just in the look, but in the career. That’s great.

Katie:
Yes.

Brandon:
All right. You got that first deal. What went wrong on that, what went right?

Katie:
I got to learn so much from that. What went right, is it validated that it was possible. But like you would expect with a low income, one bedroom condo, there was lots of turnover and I had lots of entertaining, but stressful tenants. One quit paying, looked him up, he’s in jail. Went over, check it out, door’s busted open. But I kept it for a long time after I rented it for a while, and then I owner financed it and that went well for seven real years.
Then they stopped paying. So, I got to foreclose on it, but what was really exciting was I got to go to the courthouse steps and be on the other side. I went ahead and had my attorney show up and I just wanted to be like a person in the room just so I could get that experience.
Then at the end of the day, no one bought it on the steps, but someone called me who was there the day before and bought it. It was just really cool to learn all the steps and see it all the way through. But it was a challenge. I wouldn’t have bought it again. I didn’t know about HOA fees. We had assessments right after I bought it. They redid the outside, all the things that you could think of could go wrong with the condo, it did. But it was still a pretty cheap learning experience, and at the end of the day I made money.

Brandon:
All right. Well, what came next?

Katie:
After that, I took a break because I had a real job and then jumped into fourplexes. I wanted to create cashflow and I convinced my business partner and mother to go on this venture with me, and we bought some fourplexes out of foreclosure. That was 2010. So, there was quite a few foreclosures going on. We bought them vacant.
The first one we bought, we went to Colorado, the day after we bought it, came home and there was water running down the driveway, because there was a freeze here, pipes busted, but we were going to renovate the whole thing anyway. So, if it was going to happen, it was a good time. But the water was shooting up from the faucet, and so the sheet rock on the ceiling had all caved in. It was a mess.
But we fixed it up. They were three bedroom, two bath. We were going to do HUD tenants because the security of the government paying me, I still thought I liked that. We fixed them up. We got tenants in there. They were three bedroom, 800 square foot fourplexes, and we rented them for $850, when everything else on the street was rent for $550, because that’s what HUD was willing to pay, and I just don’t think people knew that, they just assumed you could get whatever everybody else did. Cash flow was great. Put tenants in there and hated it. Totally hated it.

Brandon:
Why? You were making all this money, you were renting way above market, it seems. Why would you hate that?

Katie:
Hated the property management part of it. I hated, you’re like, oh, you’ll never get those calls. Yeah, I got one, “Oh my God, the place is on fire. We tried to turn the light on, light bulb popped.” It turns out it was just the light bulb was dead, so it needed to be changed. It’s tiny, they’re 800 square foot. Again, fourplex, lots of turnover. Just hated the maintenance, and the bigger TVs than I had, nicer equipment than I had.
It made me cynical, felt like we were lied to a lot. But what we really loved, we loved fixing them up. We did them nice. We had colored walls. We did it like we would want it. We loved that part. We said, you know what, at that point we had already bought three fourplexes. We said, let’s just sell these to investors and let’s start flipping houses. That’s what we’ve done for the last 10 years, and that’s been our niche and that’s what we really loved doing. We’ve done that for the last 10 years.

Brandon:
Yes. Landlord and especially landlording with lower income tenants where you’re dealing with everything, it really can make you cynical, can it? You just get so-

Katie:
It can.

Brandon:
It’s just the number of stories I have of that phase of my life, where I was just in it, dealing with the phone calls and all that. That’s why as soon as I got out of that, I was like, oh, there’s a whole nother world to this real estate thing, besides just being the low income landlord.

Katie:
Exactly. I was happy to leave it. I became skeptical of everyone, not just my tenants, I just didn’t like the path I was going down.

David:
I think that’s important to highlight that we often… Here’s what I hear, especially from newer people, every real estate deal gets reduced down to what is the ROI on a property? It’s as if the analysis starts and ends with what is the ROI my spreadsheet will tell me? But those of us that actually own real estate understand there’s much more art to it than science. One of the big pieces that I’ve learned I need to look at and I frequently coach people into is if you buy a property that you think gives you a good ROI, but makes you hate your life, it will cost you so much money because you’ll stop investing. You’ll stop pursuing deals. You’ll stop learning. You’ll stop growing. You won’t find the path that you’re supposed to be, and you’ll just quit and say, this isn’t work, I’m going to do something else.
Would you mind speaking just a little to those people that are maybe new, they have one or two properties and they’re these spreadsheet trolls that they go right into it and they can’t get out of it, and it’s all they talk about. But the actual, do you enjoy doing this means a lot, as far as the ultimate success you’re going to have?

Katie:
Totally. I am still a spreadsheet troll. That’s why I got in it, was to create cash flow. I totally get it. Then when I was like, oh my gosh, I can so much more than anybody else on the street. Everybody told me I couldn’t, and I spent hours in the HUD office making sure I asked all the right questions and understood. But we’re doing this because we want a sense of freedom of your life back. You want to live a different life.
If you just have more problems and hate what you do, just stick with your job. Even though my first two investments, if I started over again, I’d probably pick a different path, knowing what I know. I learned so much that I wouldn’t exchange it at all. It’s better that you just go and do it and learn that you don’t like it and then pivot and go a different direction, than worry that you’re not going to like it, so you never even start.

Brandon:
That’s one of those, I want everyone to rewind the last 30 seconds, and just hear that again, because that’s so powerful of like, you don’t know what the right path is until you start walking on one. You don’t know, because you just… When I got into real estate, I didn’t know I’d end up in mobile home parks. Then when I got in the mobile home parks, I didn’t know I was going to end up with a certain type of them, and which ones I like, which ones I don’t.
That first deal I bought was 50 units in Bangor, Maine. I would not buy that today. There’s no chance I’d buy that today. It was way lower income, way smaller, way too many problems, way too small of an area. I didn’t know about those things. Until you jump in and just do it, you won’t have the perfect solution. So many people are waiting for this perfect solution and the perfect path to be laid out in front of them before they make any action. But I think that’s just the wrong approach.

Katie:
Yeah. It was the right next step for you, even though you wouldn’t do it again. Created the path.

Brandon:
Yeah. I love it. All right. What came next then? You started flipping houses, find good success in that?

Katie:
Yeah, and we loved it. They say, don’t get emotionally attached to your real estate, well, I don’t know how to do that. If we didn’t love it, we totally wouldn’t be doing it, and we over improve them. But what we really fell in love with is our downtown was revitalizing, and there were lots of businesses starting up and we started flipping houses near the downtown. There were these old, cool houses and people wanted to be closer to downtown. It just caught momentum, it felt easy, it felt light.
We just loved improving them. Then people would reach out to us because we won’t list them until they’re staged, because we don’t want anybody tell us they don’t like our light fixtures or our tile. Like it and buy it or don’t, but we don’t want to get in between.
We started having people saying, “As soon as you have something come up, let us know.” We really loved it, and it kind of became our identity and it inflated our ego. But when we reflected back, the reason we’re doing this is to generate cashflow. There was a big pivot point that happened probably about 18 months ago. It was a culmination of a number of things. One was COVID hit and the idea that we know real estate’s a cycle. My mom, who’s my partner has been in it for 45 years. We’ve seen the cycles, but the idea that it could dry up overnight, to me, it was frightening, and almost like we had been living this fake life in real estate.
We thought we were investors, but the reality is as soon as we quit flipping, we’d have to go get a job because there was no money being generated. That happened, and we were general contracting our first commercial ground up development. It’s me and my mom, general contracting a 20,000 square foot building. Even though we had done our houses before, we had lots of different subs because they didn’t transfer, and it was like, every morning going to the job site and getting in the fetal position so people could kick the crap out of us and solving problems for that day.
During that time, our pipeline totally dried up, because all we could focus on was getting that project off the ground. Then I’m watching little old Brandon over here who owns a few rentals and does this BP Podcast, and he comes on… I don’t remember which one it was, but it was during COVID when we had way too much time to reflect on life, and you’re talking about your hockey stick growth, like you just woke up one day and all of a sudden you were successful with all these mobile home parks. I realized-

Brandon:
It just happened one day. It was weird, just woke up and they were there.

Katie:
That’s exactly how it happened, right? It just hit me that I had used the excuse, even though I knew I needed to shift, I didn’t know how and I used that as an excuse that it would reveal itself. I was waiting to see how am I going to shift away from this? I was using that as an excuse not to do anything. I didn’t have a circle of strong investor influencers here, people who made the next step feel easy. So, I just didn’t do anything.
Then you were on that podcast, I don’t know, it may have been the Jason Drees one, I can’t really remember, but the hockey stick growth you were talking about, I was like, that’s it. Brandon’s a freaking open book, I’m just going to do whatever he did until I can find a better path. You were like, I read Vivid Vision and wrote a vivid vision. I’m like, me too. I have it up on my wall.
Then I joined the Jason Drees Mindset Academy. Everybody I know that’s successful, says they have a mind coach. So, I got a mind coach. I got the Intention Journal. I just started taking steps. What I learned is what you referred to earlier is that, you can be moved… For me, it’s God, because I’m a Christian, it’s hard to turn a ship if it’s sitting still. But if you just start moving, it’s easy to guide and pivot.
Even though I experienced that early on in my real estate career, I didn’t realize it when I was stuck in a middle, again, of basically a cap and not knowing how to break through. Then the Maui Mastermind came up and I was like, I’m just going to do it. I’m going to go meet the types of people I need to be around and I’ll figure out how to make it work later, and it was a big sacrifice. My daughter… We moved our oldest off to college and I missed it because I was in Maui. But it was worth the ability to get around the types of people that just fed my soul and was doing what I do.
Did that, and the last 18 months been a blur. We quit worrying about how are we going to pay for these properties, and we were like, let’s just get the properties. We’ll figure out how to pay for them later. We hired an integrator. We were like, you know what, we can’t run construction sites and fill the pipeline at the same time.
We had an annual offsite meeting. My mom and I went out of town for the weekend and were like, what are our goals? What do you love doing? What do I love doing? We mapped a path that made sense for us, and we started just filling in the holes. It has just skyrocketed in the last 12 to 18 months because of that, and it was just taking action, that’s it. It doesn’t even matter what action I took, I just started doing it.

David:
I love that point about a ship that’s sitting still is hard to turn. Made me think about when you’re trying to ride a bike, if you’re not moving anywhere, balance is incredibly hard. But when you’re going, balance gets easier and the faster you go, it actually gets easier. I remember when I was first learning how to ride a motorcycle, I had a concern that going faster would be harder to control it. But no, when you’re going really fast, you’re never going to top it over, you can’t.
That’s a great point that a lot of the time when you’re just sitting there analyzing a deal and analyzing a deal and analyzing a deal and you’re never actually getting deeper into the process of what it’s like to own real estate, it’s like trying to balance on a bike that isn’t move. You’re never going to feel steady. It’s only when you start making progress and moving that you start picking up those nuances. I think that’s fantastic advice.

Brandon:
Katie, I want to jump into the change that you went through. You were doing the single family flips and then you started working that other one. Then all of a sudden you just ramped it up over the last couple of years. I’m wondering, was there a point where you were just like, “I’m afraid. I don’t want to go bigger because I’m scared.” Or were you just pretty power through like, oh yeah, I got this. If it was scary, how’d you overcome that?

Katie:
I live at odds with myself all the time. I am fiercely independent, to a fault and I am scared of everything. Every step that I take, I encounter fear. Just like not knowing if Robert Kiyosaki was a fraud. Every next step is always full of fear. What I like to do is just figure out worst case scenario, what would it be, and could we live through it? Then I get my motivation, knowing that I’m doing more than most people are willing to.
There’s just something about, if I know I’m doing something that somebody else won’t, I use that to motivate me and drive me forward. We decided in ’16, we need to start slowly accumulating cash flowing assets that we like. We already know we don’t want to do low income, we don’t want to manage houses. We want it to be able to have property management.
We said, “Well, let’s just buy one cash flowing asset a year and an asset that we love.” I want to be able to take people buying and say, “Hey, I own that.” We didn’t get that from the fourplexes. The first one we bought was an old boarded up building on Main street. We just looked up who the owner was, we contacted them and we bought the building, put tenants in it, and that was our first cash flowing asset. Then the next year we decided to go outside and we bought a bakery.

Brandon:
To actually run or just somebody else ran the bakery?

Katie:
It was three partners. The third partner was the operator. She ran it. Then we did social media and the bookkeeping and the back end. It gave us a great realization of what tenants in our downtown that’s being revitalized, what they go through. It was a good experience, but we realized it was taking too much mind space. So, we sold it.
It was like a year of wasted, not getting cash flow assets. We were just collecting them one at a time. But then when I had that pivotal moment, and that epiphany, I was like, we just need to do this faster, but we didn’t know how are we going to finance it? How are we going to manage them? We’re two women now in commercial construction building, mixed use buildings.
The main thing that’s always helped me is I try find someone who is really smart. When we were purchasing our first single family, it was because our general contractor was too busy to do it. But I had used him before and he was like, “We’ll help you. If you need help, if you need subs.” He was there to coach us. When we did the commercial project, I did a consulting agreement with a construction company, because I knew I wouldn’t know what I was doing, but there was someone I could call and say, “Hey, come over here. Help me look at this. What am I doing wrong?” I just try and surround myself with people who have already done it, that make the next step feel easy.
But you never overcome the fear. Like today, I could get myself all worked up about just the pipeline that we have ahead of us right now. It’s just a matter of realizing that you’re trying to make a better life for yourself and just like a W-2 job, you might lose your job. You may have to change your career. It’s no different in real estate, but at least we’re loving what we do, and we feel like we have ownership in it since we own it. It’s really no different.

David:
How did you find that consultant that you hired for the commercial project?

Katie:
It was a contractor that had built some of our first developments when we didn’t GCM. It was the same thing, and they did commercial and they did some developments and they did some residential. It was just because we were already in that world. They were also investors and general contractors, so we connected on a lot of levels.
Really, I don’t know why he did it. I think people in real estate who are successful, want to help other people in real estate who are successful, because the reality is, he probably shouldn’t have. He was my GC, now I’m my own GC, but we still invest in deals together. But the reality is, is if you’re out there doing stuff, there’s people out there who want to help you get to the next level.

Brandon:
That’s cool. I want to dig into the development stuff here a little bit. But before I do, I want to just point out a lesson that I see in your story. That is, David and I say a lot, this idea of follow the fire. In other words, something fires you up… Some people right now are just fired up about crypto, then you should… If you’re fired up about crypto, then go dig into crypto.
But there’s something that just resonates in you that with that development of the downtown, the old buildings, the drive by and somebody might be listening and going, “No, that’s stupid. You can get way better return by doing this thing over here.” No, you couldn’t because you wouldn’t be passionate about it. You wouldn’t be willing to suffer through all the pain because it’s not your fire.
I love the fact that you jumped around a little bit and you found something and you’re like, this is the thing. Because it’s not about necessarily making… The goal of life is not to make as much money as humanly possible. I think we all would agree to that.
If you are doing something you don’t enjoy, this is the point I want to make is if you’re doing something right now you don’t enjoy as a means to an end that you will enjoy much further down the road, I think that’s faulty thinking. You can have your cake and eat it too. You can have an incredible life right now doing something that does fire you up, that also leads you to a better life later on, that fires you up then. You don’t have to trade crap for now for joy later.
I’m reminded of that quote, Steve Jobs once said… I want to pull it up here because I really like it a lot. Here it is, “I’ve looked in the mirror every morning and I ask myself, if today were the last day of my life, would I want to do what I am about to do today? Whenever the answer has been no for too many days in a row, I know I need to change something.” This one has been one of my favorite quotes.

Katie:
That’s so good.

Brandon:
Yeah, isn’t that great? That’s my encouragement to everyone listening to this is like don’t necessarily judge something for, is this the highest ROI in my life right now? But is this something that brings me life right now, and I can use it to get towards a different life or a better life or whatever later on down the road as well?

Katie:
Absolutely. There’s definitely better ROI projects out there than what we do, but they definitely give us the most pride.

Brandon:
That’s awesome. I love it. All right, let’s talk about the development stuff a little bit. Let’s say I want to get into what you’re doing. I want to go and buy an old building. These are commercial properties, right? I want to buy a commercial property. Maybe a three, four, five tenant, old crappy building and I want to make it nice. What do I do? Coach me, Katie.

Katie:
Okay. What we have found is the path of least resistance that also meets your passion is a better place to be than always fighting uphill. Find out from your city… Every city has a master plan and in my experience, it’s better to do what the city wants you to do than try and do what you want to do if it’s against their will.
They had already invested a lot of money downtown, we knew they wanted to grow downtown. So, we started looking, what can we do? Our passion and our is we can put heads and beds downtown. The development pattern of today is commercial follows rooftops. You go build five or six subdivisions, all of a sudden, all the strip centers and the commercial buildings start going in, the restaurants, the stores. But when you’re revitalizing a downtown, it’s in reverse. The first thing that comes back is they at shops and boutiques down there, but there’s nobody living down there.
Those boutiques cannot live on events alone, they need someone to roll out a bed and go eat or shop there because it’s the most logical place for them to go. We feel super passionate about that. Our goal is how can we put as many heads and beds into the downtown?
We look for buildings or property that we can just redevelop from ground up, that we can put heads and beds. Now, we did some studies to find out what do people who live downtown, what do they want? Versus we’re in a college town. So, college students don’t want to live downtown because we don’t have volleyball nets and pools. That’s not our target. The people who want to live downtown, which is so nice in development, the amenity is the downtown. So, I don’t have to spend money on gyms and I don’t have to spend money on all the extra amenities, I get to just build the building. They walk out the door and the amenity is already there.
The first thing to do is identify what does the city want? What do you want? Then just start scouring and looking for a building. Once you find it, you’re going to set up a meeting with your development services people in your downtown. You’re going to have a group meeting. They’re going to have the fire marshal there. They’re going to have-

Brandon:
I don’t even know what development service people teams… Is that a group of people?

Katie:
Yeah, kind of. When you go and build something in your city, there’s two sides. One is the permitting and the inspection people. If you just buy a lot and build a house, you’re going to deal with those people. The development services side gets that lot ready to be built on. They’re the ones who say, yes, you can divide the land. You’re going to need to add water and sewer. Before you’re ready to build, they just get the land ready to build.
They’re going to bring in city engineers, the fire marshal, the development services, probably somebody from permitting and you’re just going to sit down. What we have found success is you want to share your vision with them. You want their buy-in. We’ll take renderings or we’ll take pictures of buildings, like we want to create this. We’ve learned, if people live downtown, they don’t want three by five windows in a sheetrock box, they want wood floors, they want open ceilings.
We try and have imagery and the city gets excited, they’re like, yes, this is what we’ve been wanting. Our very first development downtown, it was a town home project. It was actually low income housing that we… Modular houses that had been brought in a long time ago, and we were like, you know what, let’s buy it, and let’s see if we can’t do something else with it, which I don’t recommend. Because we didn’t know lot sizes. We didn’t know any rules, but we knew, worst case scenario, we could just sell it and it cash flowed as a head house.
We go into the city and we tell them what we want to do, and they were so excited, I was nervous. I was like, their level of enthusiasm means they may be dumb enough to do it. But what came out of that is… A lot of downtowns have really wide ride of ways because that’s how they stop the spread of fire. Back in the old days, they separated buildings.
You’ll have 80 foot right of ways with a 20, 30 foot road in the middle of it. The city said, “Hey, what if we release some of that land to you. Instead of building five town homes, you would be able to build seven town homes?” We were like, what? They said, “Also, the lot’s not deep enough to meet standards. But if you guys will build this, we’ll give you exceptions to those rules to make sure that you’re able to do it.
It just opened our eyes that when you’re doing what the city wants, they will work with you to get it done. The first thing you got to do is sit down with them, find out if they’re going to support your project when it goes to planning and zoning and when it goes to the council. If they are and you guys see eye-to-eye, they really are helpful in making sure that you’re successful.

Brandon:
Yeah. This is interesting, because in my head I’ve always envisioned working with the city or planners and all that. It’s a very, I got… Maybe it’s just because I’m on Maui right now, and that’s how it is on Maui, it feels like. It’s like you got to fight these people who they’re only hope in life is to deny everything you want to do in life. All they want to do is deny.
But what it sounds like, and it makes a lot of sense is like, they want this. If you can get them on board and get them excited about it, and you can cast your vision, they’re going to support you and help you, and this becomes way, way easier. That’s just an interesting frame shift in my head that I’m doing right now is like, maybe it’s not such an animosity thing, but it’s partnership.

Katie:
Yes. I’m pretty sure the city doesn’t listen to BiggerPockets, so I’ll share this with you all. I only talk good about them behind their back.

Brandon:
There you go.

Katie:
They are still a government entity. They still get their paycheck, whether they delay my deal, whether my deal passes or not, and I remind them of that, every opportunity that I get. It is still a difficult process. But if your passion crosses what they’re trying to get for the city, they want you to be successful.

Brandon:
Yeah. That makes a lot of sense. Maybe we can take a minute here and usually we save the deal deep dive for the end of the show, but maybe we can throw it in here because I’m curious if we can go through some numbers of something done. Why don’t we hit the Deal Deep Dive.

David:
Deep Dive.

Brandon:
Let’s go into… Do you have a project, some kind of development project we can dig into the numbers on?

Katie:
Yes.

Brandon:
All right. Perfect. I’ll start with, we’ll fire a bunch of questions at you. Let me find my list of questions here. I should know this by now. It’s not like I haven’t done this a million times. Number one, what kind of property are we talking about here and where is it located?

Katie:
Okay. The very first one we did was a commercial building and it was on Main street. It was like a row building, which means it shared walls with each building on either side. It was literally, just the exterior brick walls, a newer roof that had been put on, dirt floors and a cistern inside the building. It was completely gutted-

Brandon:
What’s a cistern?

Katie:
It’s what collects water. It’s circa 1890s. It’s how they used to collect water to then be able to have water inside the building back in the day.

Brandon:
All right. You got a shell of a building, basically.

Katie:
Yes, just a shell of a building. Basically, the reason it was dirt floor, is I’m sure it was a wood race floor and the roof had rotted out at some point and the wood had rotted out and the city made some owner come in and clean it all up and put a new roof on it.

Brandon:
I see. Okay. All right. Number two, then.

David:
Number two, how did you find this deal?

Katie:
We knew we wanted to try an office in downtown. So, we just started walking blocks and we would write down the address of any building or land that looked distress that we thought we might be interested in. This particular building was the only unoccupied, boarded up building on the most developed block in downtown. So, we went ahead and wrote it down, but we were like, if that building was to be had, it would’ve already been had. But we went ahead and wrote it down and then looked up on CAD to see who the owners were of those buildings.

Brandon:
What’s CAD?

Katie:
CAD is the county appraisal district where they list property values and owners. We got their names. They have addresses on there, but you never. We got their names and just started Googling them. One of the building that we were interested in turns out the guy was an [Aggie 00:35:10] so, he’s a fellow alumni from the university I was at. He lived in Houston, so he was remote about an hour and a half away, and he only owned the building a couple of years, and his work email was right there on the Internet.
So, I just shot him an email and said, “Hey, fellow Aggie, real estate developer. So, you own this building. Would you be interested in selling it?” Really thought he’d probably never respond.

Brandon:
Yeah, and he did. All right. I guess next question then, how much did he want? How did that work through? What did he want? What’d you end up buying it for?

Katie:
That was tricky because it wasn’t for sell. Basically he said, “We had plans to build a restaurant.” His daughter was graduating from the university. She was going to run this restaurant, but he was like… It was at a time, he was in the oilfield industry, which I learned on the Googler and that it was a tough time in the oilfield world. I was like, maybe that’s my hope.
He’s like, “We’ve had a change of heart. We’re not sure if she’s going to do that. So, we want to make a decision what to do with that building.” I said, “Great, what do you want for it?” Well, he would not throw a price out. We tried and he wouldn’t give us a price. It was hard to know. It’s dirt floors and we had never built down town to understand the cost, but we just did the best we could, we estimated what we thought the renovation budget would be and we backed into it and we offered him $225,000, and then he… I don’t think I’m supposed to go on.

Brandon:
Yeah, you go ahead.

David:
You’ve already committed. You might as well finish now.

Katie:
Then he countered at $260,000 and we settled on $250,000. At the time had no idea if that was a good deal or not.

Brandon:
All right. That covers the negotiation piece then. Anything else from there?

David:
I’ll add a little caveat, in Chris Voss’s book, Never Split the Difference, he covers exactly how most negotiations go, like what you just did. I don’t know what the percentage is, I guess like 80% of them you’re going to see somewhere in the middle, you can exercise quite a bit of control over what price you end up on just by understanding that. Is there anything you want to share with the listeners? Was this a plan that you knew you were going to hit on $250,000?

Katie:
Well, we definitely wanted to give room for negotiation because we wanted him to feel that he won too. But it was trickier on this one because we really… There are no comps. In downtown there just aren’t even that many buildings, but I will tell you, we’ve read, Never Split the Difference, and it has helped tremendously on our flipping side of the business, on negotiating deals. But we went in a little low so that we would have some room to go up.

Brandon:
Yep.

David:
Brandon, just curious, do you have any experience with the same thing?

Brandon:
Yes. I’m not a great negotiator, honestly. I’ll admit that. Even Never Split the Difference, I’ve read it and I still don’t put most of the stuff into practice. That said, I do recognize that people always want to split the difference. I lean into that, knowing that. It’s like monopoly. If I play monopoly… Probably the thing I use more than anything else when I play monopoly is somebody will have… Let’s say they have boardwalk and I really want boardwalk. I’ll usually start by saying some absurdly low number. Like, “I’ll give you 200 bucks for it.”
He’s like, “No, screw you.” I’m like, “Okay, well, what do you want?” Then they’re like, “Well, it’s $1,000.” I’m like, “Okay.” I would paid them $1000 right then, but I anchor it to that price. That’s about the only negotiation strategy I feel like I do, it’s price anchoring.

David:
Side note from the person who just said, he’s a bad negotiator, you’re like a wild Savage at Monopoly negotiating. I think psychologically we maybe need to dig into why that comes out when you’re playing Monopoly, but not in real life.

Katie:
One thing that we do on all of our properties that I think actually came out of that book that I didn’t even realize was a tactic, but we always go into, you know what, we have to make a living, you have to get what you need out of it, and there’s very little chance this is probably going to work out. I don’t want to insult you with an offer. I’m not sure this is going to work. We always try and get them to say, “Well, just tell me what it is.” We’ve already grounded them and it’s going to be shockingly low.
We actually did do that with this building. From the day I emailed this guy until we got it under contract, six months passed, which at the time felt like an eternity. It was really like, “Oh, we’re going to do it. Oh, we’ve decided my daughter’s going to do it. No, we can’t take that price.” It was a roller coaster ride, but we did ground it with, it’s probably not going to work because at the end of the day, I doubt we’re going to actually see eye-to-eye on this deal. At least it gets them a grounding point.

Brandon:
That actually is something I do, do occasionally, especially negotiations, and I’m a big fan of which is the… I don’t know if this came from Never Split the Difference or what, but this idea of, oh yeah, that’s probably not going to work. You almost feel like you want the other side fighting your battle for you. No, I think we can make this work. You want them helping you.
By always being the negative, it makes them go positive because people know that negotiation’s back and forth. If you say one thing, they’re going to say the opposite. By saying like, yeah, this probably won’t work or yeah, you probably wouldn’t even be interested in that number. I can pay $100,000, but that’s probably ridiculous.

Katie:
Thanks for bringing that up, David. Yeah. Thanks for bringing that up, David. I forgot we did that.

David:
I knew that there was more to that story. So, yes. Thank you for sharing that. It’s funny because I will sometimes on our real estate team, the agent will come to me and say, “Hey, this is what we got. What should we do?” I’ll say, “Here’s exactly what’s going to happen. We’re going to counter with this. They go to their client, they’re going to come back, and they’re going to say that. When they say that, you’re going to say this… ” I will almost paint the next five steps of how we go back and forth and say-

Brandon:
You’re right, I’m sure 100% of the time. Because psychology is so predictable.

David:
Yes. They think that I’m this magician that reads minds. It’s human beings are much more predictable than what we want to think, and we all have huge egos and that’s really when you’re negotiating what you’re catering to. Thank you, Katie, for sharing. For everyone listening to this, the key to negotiating is not trying to find their weakness and smash it into the ground and just bleed them for every… It’s really just how do I make their ego feel good about giving me what I want? Once you came to the price that you came to, how did you fund this deal?

Katie:
We used debt and equity on the debt side, we got just a commercial loan from a local bank and they did a two year interest only, and then it rolled automatically into a 20 year amortizing note with the five year rate maturity on it.

Brandon:
Can we break that down for those people who don’t know what that means? Two year interest only, which means?

Katie:
That gave us time to build it, and during that time, we only had to pay interest on our loan and because we were building, we were taking draws. So, we only paid interest on the outstanding balance. So, it built as the loan increased.

Brandon:
That’s cool. All right. Then the 20 year am or amortization means?

Katie:
They based our payments on paying the entire loan off in 20 years. So, the longer that is the lower your payment is. You want it longer. 20 years is not great, but we had the comfort of knowing if we can’t refinance it, we already have an option for permanent financing.

Brandon:
That’s very cool. I like the fact that it rolled right into it. You didn’t have to go and refinance it and hope that you can get a… It’s almost like a BRRRR. There are banks that will do BRRRR loans. You buy it with an interest only loan kind of thing, almost like hard money. Then it automatically rolls into a long term loan. It takes away a lot of that risk of what if I can’t refinance it? All right, that’s cool. Two year interest only, 20 year am, and then you said five year what? What was that five year?

Katie:
It basically matured in five years. At the end of five years, then the bank would call the note and we could either redo the note or get financing somewhere else.

Brandon:
By the way, everyone listen to this, this terms are important. If you want to get into any type of real estate, obviously this is more common for commercial when you’re talking about the 20 year versus a 30 year for residential. But if you want to look like you know what you’re talking about, when you go to a bank, just say like, do you offer any interest only periods? Or do you do a 25 year am or a 30 year am?
Asking these questions will make you look like you know what you’re talking about? Don’t shy away because, oh these are big words. I don’t want to deal with it. Lean into this, because this is the stuff that matters when you’re getting into real estate, even the small stuff, this helps. All right, keep going.

Katie:
That was the debt side. On the equity side, we brought some money in, we, my mom and I, kept 10% for bringing the deal to the people. We got 10% for no cash in exchange, basically.

Brandon:
What do you mean you got 10%?

Katie:
We are going to have multiple owners in this project and everybody’s going to bring money to the table and we’re going to divide the ownership out based on how much each person brings. But we get 10%, even if we don’t put a dollar in. So, there’s only 90% left to divide amongst the people who are going to bring equity is how we structured this deal.

Brandon:
I know this is your first that you did like this, do you feel like that was overly generous of you? Because it feels like that was overly generous of you.

Katie:
Hell yeah.

Brandon:
Okay. Even in open door capital, my syndications, we start at 30-70. We take 30 for being the GP and we give out 70 to our investors and that still gives our investors a phenomenal… We just sold our first fund and gave our investors a 35% IRR per year, 35% return each year. That’s at 70-30, you gave 90% away.

Katie:
And I was scared to death to ask for the 10%, that I was asking for too much. Definitely a lesson learned.

Brandon:
I know people who do 50-50. Anyway, keep going. There’s a whole lesson in there we could dig into on why we all shortchange ourselves and don’t value our skill set enough, but keep going.

Katie:
Part of it is ignorance. But the other thing that we did is we were scared to death that this thing could go bad, so we wanted to make sure it went bad for as many people as possible. We brought in our general contractor and our architect and they used their fees as sweat equity. It was less cash that we had to bring to the closing table and we didn’t have to pay them for that money, they basically earned their right into the deal. Then we still went and got a couple of more outside investors.
The renovation budget was like $500,000, we paid $250,000. The whole deal is $750,000. I write seven quarterly checks for this in one deal because we had so many hands in the pot. That was another lesson learned. But, hey, it got the deal done.

Brandon:
It got the deal done. Like we said earlier, you don’t know what the right path is until you start walking down one.

Katie:
Exactly. That was 80% loan-to-value. So, we brought 20% of that to the table.

Brandon:
Okay. All right. Then, I guess, next question, what did you do with the property then? You fixed it up or you remodeled it, you developed it, I guess you call it.

Katie:
Yeah, we renovated it and we put two retail stores down below and then three offices on the second story. In my very humble and unbiased opinion, it is now the most beautiful building in downtown. We hired a muralist to paint a big mural on the wall. It’s beautiful.

Brandon:
What shops are in there?

Katie:
We have a retail boutique in the front and then we have a cafe in the back and then we have-

Brandon:
That’s cool.

Katie:
… two architects and us, our real estate office is the office with no windows. The lowest rent, smallest office is the one we took for ourselves. Is the only one we can afford.

Brandon:
There you go. Office hacking. That’s great.

Katie:
Yeah.

Brandon:
All right. Next question, what was the outcome?

Katie:
We refinanced at the end of 2019 and it had appreciated significantly. We pulled 100% of our money out of it. The distributions on it are about $45,000 a year. We’re not going to get rich on the deal, but it’s infinite returns because we have zero money in the building. That’s the outcome.

Brandon:
You kept your investors in then, even after… Now, they’re just getting an infinite return. They love you and-

Katie:
Who knew I could have bought them out? Who knew?

Brandon:
Yeah, that’s another option, yeah. All right, last question then, what lessons did you learn from the deal?

Katie:
I learned, don’t break so many people in, it’s a lot of paperwork on the back end. I learned that… Again, I didn’t think we would get this building. We asked, so don’t presume that you know what the seller wants before you’ve even asked them. I cannot tell you, once we started posting on social media that we got this building, many people started reaching out, “I’ve always wanted that building. How did you get that building?”
I was like, “I contacted the seller. If you wanted it, how did you not get that building?” I learned it’s important just to take action. I guess those were probably two big lessons learned. And it proved that you could do BRRRR on a commercial property because that’s effectively what we did, and it’s really the model we use for most of our ground up developments now, too.

David:
Curious for you, this is completely unrelated to that Deal Deep Dive. But because I’m sure you probably don’t love having all these partners, have you thought about selling at 1030 and went into a bigger property, letting some of them bring their gains into that deal, some of them keep their gains? Let’s say that you get a property four or five times bigger, would then have enough cash flow to support having a bookkeeper, so you didn’t have to do that.

Katie:
Yeah. It’s a great idea, David. Do you remember how we talked about how we were emotionally attached to our real estate? I can’t remember if we talked about that or not. We own the coolest building on Main street. But yes, there will be a way in our future. We’re actually going through that with another building right now that it, we wanted to never sell and we’re like, it would probably be basically irresponsible not to sell it because it’s even better than the one that we’re in.

Brandon:
I just sold my Kirk Cobain house, the house that Kirk Cobain-

Katie:
You did?

Brandon:
His childhood home, yeah. I said I would never sell it because it was an emotional thing. But finally, the nostalgia of having Kirk Cobain’s very first home or first two homes, it was a duplex-

Katie:
It played out?

Brandon:
It was surpassed by the frustration of dealing with low income tenants in Aberdeen, Washington that I was like, I’m done. I’m done with that one. We sold it and we got a great price for it. I made a couple hundred grand and dumped it into actually a condo that I’m buying here in Maui, I should close next week.

Katie:
Well, let me ask you, David, I always thought if you 1031, and that’s because we’re just now learning about it and never had deals big enough. Well, they were always flipped. So, 1031 wasn’t even an option. You don’t have to keep the same ownership structure in place? I was under some false pretense that those owners went with you. I think you

Brandon:
I think you do, but there are ways around it. Things like ticks and other things like that. Or you could buy out people ahead of time. There’s always a way, through it.

David:
My guess is if you sold, everybody gets their gain and then they can choose if they wanted 1031 that into a different type of structure. The answer is always ask your CPA, how can I do this versus-

Katie:
I’m in the market for a good one, if anybody has recommendations.

David:
Aren’t we all? If you are a good CPA, contact me because that’s the next business I want to start so we can bring it to the masses because man, it can be challenging.

Brandon:
Yeah, do it.

Katie:
Please, do that.

Brandon:
I’m right there with you guys. All right. That was an awesome Deal Deep Dive. I tend to get very shiny object syndrome. So, I always tell myself no, don’t do it, but I really want to do what you’re doing. I love the idea of taking especially old commercial properties and redeveloping them and the downtown stuff, that’s so fun. LI love that idea.

Katie:
I really have limited my number of investors, but maybe I can work you into a deal or something, sometime in the future.

Brandon:
Maybe we’ll partner on one.

Katie:
Exactly.

Brandon:
That’s my better role, giving people money and then they can do what they’re good at, and I can surf.

Katie:
I’m good at taking money. So, this works. What is the building?

Brandon:
It’s a match made in heaven.

Katie:
Exactly.

Brandon:
I never thought I’d find somebody like you. This is amazing.

David:
Katie, let’s buy a bunch of cows and hire your husband to be the asset manager.

Katie:
Absolutely. Now you’re living his dream too.

Brandon:
There we go. All right. We’re going to start taking this towards the close here. Where are you at today, in terms of what do you own? What’s your portfolio look like today? Then, what have you got up to, and where are you headed after that?

Katie:
Our investment’s basically we’re in three buckets, the flips, which we have three of those going on right now. We still do those, just keep going if they come along. We have developments of mostly houses. So, town home developments where we increase the density. Almost all of those are for sell, but we will rent them and hold them. But generally we sell those too.
Then the third bucket is our ground up developments. Those, mostly our boutique apartments or mixed use buildings where we’ll put commercial on the bottom and 20 residential lofts or however many we can fit on the top. Those we want to hold for cash flow over the long term.
Today we have two office buildings that are multi-tenant office buildings. We have mixed use building that 20 residential lofts and three commercial spaces. We have two town home developments with 15 town homes under construction right now. Then we have one mixed use building that’s in permitting, fixing to break ground in the next 30 days. Then we have three more properties that we’re going to develop into apartments or mixed use buildings that are in the design phase with an architect.

Brandon:
Very cool. Very cool. That’s neat. Where do you see yourself wanting to head with all this? Do you want to just keep scaling this up?

Katie:
Yeah. Ultimately, I think I just want to sit back and collect checks. That’s what I told myself when I started this. I don’t know what that looks like. I don’t know if one day we’ll maybe keep a couple of properties that we just love too much to sell and invest in syndicates. I don’t know, we’re going to do it until we love it. And then when a clear path shows its way and we need to pivot, we’ll do it. But in the meantime, we just love what we do, so we’re just going to keep doing it.

Brandon:
All right. By the way, how are you financing all these projects now? Is that all the same model of bringing in private investors and such?

Katie:
Yes. We’ve gotten a little smarter. We try and keep a little bit more. On our town home developments, those are 50-50. We bring in zero money. We do the deal, we manage it. We sell them. The investor brings in 100% of the money, and then we split the profits 50-50.
On the apartment ones, it’s a little more traditional. We keep as much as we can and still get returns. I learned something new from an investor about, you go in where maybe you only own 20 and they own 80. Then once the construction’s done and it’s leased up, it flips, they get 20 and you get 80. We’ve actually experienced that model with the one we’re fixing to break ground on for the first time.
I’m really still exploring all the different ways. One of my goals in my Intention Journal every day is by the end of this quarter, I have to find three new ways to underwrite or finance a deal. I’m still exploring best ways to do that, but we have a handful of investors that provide most of the equity and then we invest in every deal as well.

Brandon:
I love it. I love it. Well, thank you for sharing. I love your story, I love your journey and I’m excited to see where you end up. It’s been a lot of fun. We’re not quite done yet, we got the famous four, I just want to tell you that. I really like hearing from you. This is cool. It was great to have you out in Maui too, for the Maui Master Class. You were a huge contributor to that and people loved you.

Katie:
Well, thank you. I will tell you, of all the things that I did on my list, I think that’s the one that I can see the most direct benefit from. Thank you all for hosting it.

Brandon:
That’s awesome. Thanks. I love to hear it.

Katie:
You know what I think we should do? I think we should make David do one high pitched intro. Look, he’s so excited. I don’t know. I’ll leave it up to you, but it’s my suggestion.

David:
Brandon sort of peer pressured me into that high pitch quick tip I’ve had to do over all these years. It’s not natural.

Katie:
It’s amazing, every time.

David:
I want to do it in Batman’s voice, but Brandon’s always like, let’s see how high we can make our voices every single time.

Brandon:
Quick tip. There it is. All right, speaking of high pitch voices, even though we have a sound effect for this, we’re still going to do it. I don’t know if people know this, even though we have a sound effect that comes in for the Famous Four every time, David and I still, even to Kiyosaki and Jocko Willink, we still do the high, when we’re recording this, the high pitch Famous Four, every time. With that said, it’s time for the-

Speaker 4:
Famous Four.

Brandon:
This is the Famous Four. It’s the part of the show where we ask the same four questions to every guest, every week. Katie, I’m excited to dig in. First question, what is your current or all time favorite real estate related book?

Katie:
I’m going to give a real estate related book that deals with the type of investing we do, Urban Infield Development. It’s Strong Towns: A Ground-Up Revolution by Chuck Marohn.

Brandon:
I never heard of it. I love new book recommendations. That’s great.

David:
I like when it’s a new one we haven’t heard of. Thank you for that. What is your favorite business book?

Katie:
The one that’s had the biggest impact on our life for the last 18 months is definitely Who Not How. You got to have to be able to scale, and we think about it every step we take now.

Brandon:
That’s great. I’m actually reading the second book they wrote together, Ben Hardy and Dan Sullivan. Who Not How was the first one they wrote together? Second one is called The Gap and The Gain. Have you read that one?

Katie:
I haven’t. I heard about it. I didn’t realize it was already out. Is it good?

Brandon:
Yeah, it’s out and it’s incredible. I actually like… You got it right there. Nice, David. I actually like it more than Who Not How, I think. I loved Who Not How, but I think I like it even more. It was phenomenal.

Katie:
Okay. I’m going to grab it.

Brandon:
It is. I’m listening on audible right now. The audible is cool because he actually interviews… Ben Hardy, who wrote the book really from Dan’s advice on the audible one, he actually interviews Dan after every chapter and goes deeper into it. It’s what they did on David Goggin’s book, what was it called? Can’t Hurt Me. They did the same thing on that one.
It’s actually good idea for BiggerPockets books. We should do that when we write a book, David, is record the audio book as every chapter just have an interview with us. It’s a good idea. We’ll work on it. All right. Moving on.

David:
Little known fact, they actually named The Gap and The Gain after Brandon and I. He is the gap and I-

Brandon:
Are you really flexing right now? Are you showing us your guns?

Katie:
Next thing you know he’s going to have his shirt off on Instagram posting pictures.

Brandon:
Yep. That is coming.

David:
No, that will never happen on Instagram. But if you watch BiggerPockets YouTube channel, you will see a former podcast host who showed up with his shirt off and showed off a little bit.

Brandon:
Yeah, I think that’s coming up here in the next… Let’s see, what episode is this one? I don’t know, it’s on the one with Noah and Jeff, who you also know, Katie.

David:
Yes.

Brandon:
Noah and Jeff. Mr. Josh Dorkin just randomly shows up with his shirt off in my office, which was pretty funny.

Katie:
That couldn’t have happened with two better guests.

Brandon:
No, it was amazing. Josh is looking ripped. That said, moving on. Next question, David, it’s yours.

David:
Next question, Katie, what are some of your hobbies?

Katie:
Well, I have two almost grown kids. My biggest hobby is spending as much time with them as they will allow, to make memories. Right now they’re both really big into showing cow horses. So, I play horse show mom on most weekend and they show horses we raise. It’s just fun to see the joy that they get out of competing on the horses that they’ve trained themselves. But when we’re not doing that, I like to explore cities in Italy and snow skiing. That’s the family vacation.

Brandon:
That’s cool.

David:
Brandon, when you’re describing an environment that’s not urban, what would you call that?

Katie:
I don’t know where you’re going with this, David,

Brandon:
Rural? Are you making fun of my inability to say rural?

David:
I’m giving another homage to Josh Dorkin ripping on you for the first 100 episodes, that rural was. That’s how you know the real OGs of the podcast if they remember.

Katie:
It’s rural. You don’t even need the second R, just rural.

David:
Rural.

Brandon:
Rural. All right, R-U-R, rural. I like the rural places. All right. Very cool. Last question from me-

David:
The rural BRRRR method. All right.

Brandon:
The last question from me, what do you think separates successful real estate investors from all those who give up, fail or never get started?

Katie:
I think it’s hard to stereotype everybody into one thing, but I think what-

Brandon:
No, it’s not.

Katie:
Yeah, it’s not. So let’s do it anyway.

Brandon:
Okay.

Katie:
I think with my kids, what I see the most is, and it probably applies across the board is people who are not willing to, or able to take ownership in their place in life. Once you give up your ability to change your position to outside forces, your mind’s powerful, it’ll believe it’s true, and you’ll get stuck right where you’re at.

Brandon:
Wow. That’s so good.

David:
So good.

Brandon:
So good. I’m going to take that and make that an Instagram clip later, and throw it up on TikTok.

David:
Put some music behind, it’ll be perfect.

Brandon:
I love it, Katie. Well, thank you so much. This has been a lot of fun, super informational, and I hope this helps a ton of people. I know it will because you’re onto something there. That’s a really cool strategy I think a lot of people will take and run with. Thank you for sharing your wisdom.

Katie:
Thank you. It was awesome. I can’t believe I got to be on the OG with the boys. Loved it.

Brandon:
Yeah. There you go. Appreciate you-

David:
Katie, do you remember what episode we did where I coached you?

Katie:
It is recent, 5-something. I don’t remember what the episode number was.

David:
We’ll see if we can put that in the show notes, but if you want to hear more of Katie, she was on one of the episodes I did when Brandon wasn’t here, where we went through three different investors and we walked through your personal situations and coached you. It’s very nice to have you back here-

Katie:
How did that voting go? Weren’t you trying to compete to see who did the best coaching with Brandon? We probably won. Right, David?

Brandon:
I didn’t know that-

David:
I wasn’t going to tell Brandon-

Brandon:
I did not know there was a competition here-

Katie:
Everything’s a competition.

Brandon:
Yes, everything is a competition. Speaking to that, this is funny, I was gone for like a month on vacation back, like two months ago or whatever. When this episode aired it was like two months ago. Anyway, people were going crazy on YouTube saying like, “Yeah, I know there’s a beat between Brandon and David. There’s obviously a problem between Brandon and David. I don’t know why they’re so angry at each other.” I’m like, I was on vacation, I was at Disney World, I didn’t want to record 10 episodes ahead of time.

Katie:
You just want to say, “People, go do something productive, buy some real estate.”

Brandon:
Yeah, exactly.

David:
I’m actually flattered that I’ve hit the level of fame that I’m now having rumors said about me that aren’t true. People can say more things like that. I’m actually like, wow, people are making stuff up. I made it.

Brandon:
You’ve made it. That’s funny. All right. Katie-

David:
There’s no beef.

Brandon:
There’s no beef.

David:
The only beef is what Katie’s husband is.

Katie:
Cooking up, baby.

David:
Yes, all those cows that are being herded. Wrangling up.

Brandon:
What kind of cowboy is your husband? Let’s let’s end this show with that question. Is he cows?

Katie:
Ask me the question again.

Brandon:
What kind of cowboy is your husband?

Katie:
Oh my goodness, he’s a working cowboy. That means, it’s like a day working type thing where he oversees cattle for large ranches all the way across the state. They are horseback. They rope them, they cut them, they do all the cowboy way of life. Different than a rodeo cowboy that goes into the arena and competes. He’s a working cowboy.

David:
I would imagine those work and cowboys don’t care much for those show cowboys.

Katie:
I tell you, they can’t get along with the farmers. They can’t get along with the rodeo cowboys. They got the right way of life.

Brandon:
Yeah, cowboys are just lonesome. I don’t know, I feel like there’s been a few songs written about that.

Katie:
Yeah. It’s very romantic and it’s almost like getting stuck in junior high and never getting past it. Every thing you wear, every way you look, it’s all very important about who you are.

Brandon:
That’s hilarious. I love it. All right, Katie, thank you. David, get us out of here. I’m going to close up shop.

David:
Thank you very much, Katie. This is David Greene for Brandon high pitch Turner signing off.