Brandon Turner,Joshua Dorkin How to Invest in Real Estate Part 01

追加: 2026-05-27

[00:00:00]This is Audible.

[00:00:03]How to invest in real estate. The ultimate beginner's guide to getting started. Written by Joshua Dorcin and Brandon Turner. Copyright 2018 to Joshua Dorcin and Brandon Turner.

[00:00:19]Introduction. The elephant in the room.

[00:00:23]The hot afternoon sun was naked in the blue sky. Not a cloud to be seen when the three travelers stepped out of the jungle and into the clearing.

[00:00:33]But among the three, not a bit of light was observed, because all three travelers were blind from birth. As they walked through the clearing, they bumped into quite literally a large object blocking their path. Unsure of the nature of the obstacle in their way, the three blind travelers attempted to determine just what blocked their path by explaining in turn what the object felt like to them.

[00:00:59]"It's long and flexible like a snake," said the first traveler. "Long and flexible? Are you crazy?" the second traveler declared. "It feels more like a wall. On moving, but smooth and soft."

[00:01:11]"What are you two babbling about?" the third traveler exclaimed. This is like a tree trunk that has fallen over. I could wrap my arms all around it. The travelers argued back and forth for several minutes until finally the great big elephant stood up from its nap and walked away, leaving the three blind travelers to forever wonder what had been in their path. Like the obstacle in the story, there is an enormous elephant lying directly in the path ahead of you.

[00:01:38]And this elephant is called real estate.

[00:01:41]And like the blind travelers, we all walked through life with limited vision, trying to make sense of the world around us. At some point, we bumped into the idea of real estate investing and began to feel around. But that's when the confusion set in because the real estate we saw and felt was very different from what others were seeing. The world of real estate is so large that most only see a small part of the great beast. To one person, it means one thing and to the next something entirely different.

[00:02:13]Real estate experts argue with each other about what real estate investing truly is and what it is not. Rental properties, house flipping, vacation rentals, commercial, direct mail marketing, SEO, door knockocking, wholesaling.

[00:02:28]Yes, these terms are all aspects of real estate. Yet, they differ as much as an elephant's trunk from its body. All are important, but to truly understand the animal at hand, one needs to turn on the light and see the big picture. And that's the goal of this book. It's time to see the big picture and help you get to where you are going. How do I get started with real estate? Over the many years that we've been serving real estate investors at biggerpockets.com, perhaps the most commonly asked question is simply, "How do I get started in real estate investing?" Sorry, we can't tell you that. We know that's probably a disappointing answer, but remember, real estate is a gigantic beast with numerous ways to get started. Instead, we can help you develop your own path. As the largest, most trafficked real estate investing website on the planet, Bigger Pockets has been helping people develop their own path for more than 12 years.

[00:03:26]Millions come to Bigger Pockets every month to ask questions, get answers, read content, interact with others, analyze real estate deals, and in many other ways improve their business. So, we know a thing or two about helping people on their journey. And the one consistent thing we've seen is that there is no one right path. While some might lead you to believe that there is a simple real estate path that works for everyone, that simply isn't the case.

[00:03:53]Just take a listen to some of the interviews we've done on the podcast. No two stories are the same. Every journey is unique and that's really a good thing because it's a beast that can be written differently based on your personality, your location, and your financial state.

[00:04:08]There is absolutely no reason why you can't build wealth through real estate because there are so many options that exist.

[00:04:15]We've written this book to help simplify the process of figuring out how you could get started by seeing the whole picture. Unlike other books we've published at Bigger Pockets, this book is not going into the weeds on the specifics of one type of real estate.

[00:04:29]Instead, this book will give you a broadstroke overview of the entire industry. That way, you can best decide how to begin your own path to financial freedom through real estate investments.

[00:04:42]Why real estate investing? To get filthy rich. We're kidding. Sort of. Yes, people invest in real estate because they want to build wealth. In fact, we believe that real estate investing is the best investment on the planet for helping the average person build wealth and passive income. But it's more than that, isn't it? As discussed earlier, real estate is diverse enough to allow anyone, regardless of personality, financial position, or location to invest. It can be done with a lot of money or with very little.

[00:05:14]It can be done on a large scale or a small scale. It can make someone a billionaire or simply provide a few thousand dollar in extra spending money each month. It's plentiful. It's beautiful or can be. It's relatable.

[00:05:26]It's outsourcable. And it's fun. There are many different places you can stick your money other than under your pillow like stocks, bonds, savings, mutual funds, CDs, currencies, cryptocurrencies, commodities, and more.

[00:05:41]We're not knocking any of these investments. Many people have become rich off of investing in them. But there is something special about real estate, isn't there? Perhaps more than anything else, real estate is attractive because it leads people closer to financial independence. The ability to live life on one's own terms rather than simply earning enough to pay the bills and survive.

[00:06:02]Real estate can offer investors an incredible life now and an incredible life later.

[00:06:08]Throughout this book, you'll see this pattern emerging over and over and over.

[00:06:13]You'll find dozens of real life stories of investors just like you who are achieving success through various real estate strategies. These stories are meant not only to encourage you on your journey, but also to give you a smorgus board of ideas to choose from as you embark on your own real estate journey.

[00:06:30]Take what you want and leave what you don't. That's the beauty of real estate.

[00:06:35]Each of the investor stories was taken from the interviews we've conducted on the Bigger Pockets podcast. Dig in, learn, grow. Chad Carson, Bigger Pockets Podcast, episodes 84, 141, and 293.

[00:06:50]Like many young adults leaving college today, Chad wasn't sure what he wanted to do for a career. Being a premed biology major, his original plan was to go to medical school. But after graduating, he wasn't completely sold on the idea. He decided to try his hand at real estate investing first. Chad learned about real estate investing from his father and mentors, including a former college professor. Chad partnered with a college buddy, and with financial help from the professor, they started flipping houses. Chad's business slowly began to take off, and he and his partner began to do more and more deals.

[00:07:26]Chad recalled going to a seminar and hearing someone talk about doing 50 properties a year. So, he and his partner set a goal to do just that.

[00:07:34]Along the way though, Chad and his partner came to the realization that the more properties you have, the more work, time, and energy it costs. Chad learned from Tim Ferrris's book, The 4-Hour Work Week, that you have to build in measurement tools for more than just money. You also have to quantify time and mobility. You have to think, how much time will it cost me to reach my goals? How much mobility do I need?

[00:07:59]Every time you make a business decision, buy a property, or hire someone, you have to ask yourself these questions.

[00:08:06]After the chaos of closing on 47 properties in one year, Chad decided to slow things down a bit. We had an aha moment where we put the brakes on to think about what we were doing here.

[00:08:18]Chad says, "What kind of business model do we want to have? We wanted to think about what is the objective here? What are we measuring our success by?" When we looked at our goals in the short run and long run, we realized we could do it without being huge. It was fortunate that we realized it at that point because we saw that we could slow things down and we've been adjusting our strategy ever since.

[00:08:42]Chad and his partner switched gears and focused on being a big fish in a small pond. We focused solely on real estate investing. Chad says, "We've been able to make enough money keeping it nice and simple, working out of our house, just doing it ourselves. I can keep a manageable number, keep it small. And that's been really important for us lifestyle-wise. I want to grow and make more money, but I am not really interested in being the take over the whole territory business and have the most sales in the whole area or the biggest flips or manage the most properties. I just wanted to do enough to meet my goals. And it's moving me forward toward where I want to get personally. As long as I'm doing that, I can avoid getting so big that it takes all my energy and time, and I'm able to travel more and be with my kids more.

[00:09:31]Chad currently focuses on three or four flips and three or four rentals a year.

[00:09:36]He says this strategy pays the bills, increases his long-term wealth, and more importantly gives him more freedom to play pickup basketball with his business partner for a couple of hours in the middle of the workday, walk through the neighborhood with his kids in the evening, and go on extended vacations with his wife. Chad and his family even lived in Ecuador, South America for a year, experiencing a new culture, learning a new language, and finding a new way of life.

[00:10:01]Arianne Lamire, Bigger Pockets Podcast, episode 233.

[00:10:06]Arianne was born in the Philippines, moved with her family to New Zealand at age 14, and made her way to the United States at age 23 after marrying her husband. Early into her career as a speech language pathologist, a major realization came to her. She could not easily get more than a week or two of vacation time each year. This was a major problem for her because she wanted to be able to visit her family in New Zealand every year. And for such a long and expensive trip, a mere week each year would not suffice. So she did what most people do when confronted with a problem. She decided to search out an answer on Google. What she found on that search was Bigger Pockets and the world of real estate investing and financial independence. She found example after example of others who were living in financial freedom through real estate.

[00:10:55]people able to leave their careers, invest full-time, and enjoy the life that comes along with that independence.

[00:11:02]Arianne obtained her real estate license, and in 2015, through an auction website, she and her husband purchased a house in their area for $50,000.

[00:11:12]They paid for the house using cash they had saved for many years, and after a small rehab, they refinanced the property. In 2016, they repeated the process with a similar home, this one for $72,000.

[00:11:25]While their original plan was to buy and hold enough houses to live off of the cash flow, Aryanne soon realized that this process would take too long for her to achieve her goal of having the freedom to visit her family regularly in New Zealand. She switched tactics and began to focus on flipping and wholesaling houses to generate cash faster. Their first flip was primarily just a quick cosmetic upgrade, a tactic Arianne recommends for first-time investors because there is less risk, less work, and fewer things can go wrong. After the success with their first flip, the couple decided to take on a more difficult project that required a lot more rehab. To help with this job, they hired a general contractor who was recommended by a peer. But it soon became apparent that they had hired the wrong man for the job. His work was sloppy and in the end he caused more harm than good. This experience ended up costing Arianne an extra $10,000 in repairs and two additional months of construction. Due to these setbacks, Arianne ended up breaking even on the deal, but she learned a lot from the experience and the couple kept going. "It comes down to how strong is your why? There's always going to be something in your way," she wisely reasons. Since they started investing, Arianne and her husband have completed more than 15 flips and 35 wholesale deals. Their current goals include building a team and completing 20 flips and 40 to 60 wholesale deals and acquiring 100 plus rental units.

[00:12:54]Thanks to their success through real estate investing, Arianne is able to visit her family in New Zealand anytime she wants, and her why continues to push her forward through the ups and downs.

[00:13:06]Who are we? Okay, so far in this book, you've seen the word we quite often. So, who are we? We would be Josh Dorcin and Brandon Turner. This book is not about us, so we're not going to spend a lot of time talking about us. If you want to hear more about our stories, you can find them on episodes 192 of the Bigger Pockets podcast.

[00:13:29]But to give you a brief background, Josh Dorcin began investing in real estate while living in Los Angeles in the early 2000s. After buying some multif family properties in the Midwest, Josh soon realized that real estate investing was a lot harder than the get-richqu gurus on TV made it out to be. When he began looking for help online, he quickly found those same gurus charging tens of thousands of dollars for their help.

[00:13:55]Instead, Josh decided to buck the system and build a simple website where he could ask questions and get encouragement from other investors, and Bigger Pockets was born. Soon, it became apparent that this little community wasn't going to stay little for long.

[00:14:09]The site grew, helping millions in the process. Since the inception of Bigger Pockets, more than 67 million individuals from nearly every corner of the globe have visited the website to learn, grow, and network.

[00:14:24]Brandon Turner began investing in real estate because of John Gisham. Yes, the author of best-selling legal thrillers like The Firm The Rain Maker and A Time to Kill. Brandon had been set on going to law school when he realized the lawyer life of 9 to5 drudgery or more likely 99 hell he'd have to put up with for 50 years in order to find financial freedom was not what he wanted. In his quest for answers, he stumbled across Bigger Pockets in its infancy and quickly became part of the community, using the site and its resources to purchase nearly 100 units and find true financial freedom. In 2012, the two of us got together and started the Bigger Pockets Podcast, a weekly interview style audio and eventually video show that rapidly became the number one real estate podcast in the world and to date has more than 300 episodes and a total of 50 million plus downloads.

[00:15:18]From here on out in this book, we'll just say we unless we decide to tell a story that only applies to one of us, in which case we'll say I and make it clear who I is.

[00:15:28]What to expect in this book? This book has nine chapters, each focusing on a specific part of your investing journey.

[00:15:36]If you can master these, you increase your chance of building wealth through real estate and minimize the risk of failure or loss. Therefore, our goal is to get you from brand new to real estate to I know what I'm doing by the time you get through this book. Specifically, this book will walk you through the following. Chapter one, nine questions every real estate beginner wants answered. Before you go investing all this time into reading a book on real estate investing, let's get some of the big questions out of the way. For example, do you need money to invest? If so, how much? What if you live in an expensive market? What if you have a full-time job? Do you need an LLC? These questions and more are addressed in chapter 1. Chapter two, boring financial stuff that might just save your life.

[00:16:25]Just as a home is built upon a solid foundation, your real estate investments must be built upon a solid foundation, your personal finances. In this chapter, you are going to learn how to quickly get a snapshot of your personal finances, how to create a financial spending plan, more than a dozen ways to save extra money starting right now, and even 18 powerful and unique ways to make more income from either a job or side hustles. Chapter three, getting your ducks in a row. Before you buy a single property, there are a few key decisions you need to make. Will you bring in a partner or go it alone? Do you have all the members of your team figured out? Do you need some kind of corporation? What about paying for mentors? These and many other decisions and important topics will be covered in chapter 3 to make sure you are fully prepared to start on your path.

[00:17:16]Chapter 4, real estate investment niches. What's the best kind of real estate to invest in? large, small, residential, commercial, land. In chapter 4, we break down all the different property types to help you make sense of where you should place your focus.

[00:17:33]Chapter 5, real estate investment strategies. There are a number of different strategies and angles from which to approach the business of real estate investing. The more you focus on one specific strategy, the better and more knowledgeable you become at that strategy, the more money you'll make.

[00:17:51]This will be the focus of chapter 5 as we dive deeper into looking at the various strategies you can profit from in your real estate journey.

[00:18:00]Chapter 6, 27 ways to find incredible real estate deals. Regardless of which aspect of real estate investing you choose to focus on, great deals can be tough to find. That's why chapter 6 will dive deep into 27 different methods you can use to find deals in any real estate market.

[00:18:18]Chapter 7. 12 ways to finance your real estate deals. Paying for your investment is much different than paying for a loaf of bread, and the method used can often mean the difference between success and failure in a real estate investment.

[00:18:32]Chapter 7 will dive into the various financing tools you can use throughout your investing career, no matter how much money you currently have to put into a deal.

[00:18:41]Chapter 8, real estate exit strategies.

[00:18:44]How you plan on exiting your real estate investments is just as important as the way you enter them. Whether you sell, rent, or exchange your property, it is vital to have a clear understanding of your exit strategy options for any investment deal from the beginning in order to minimize your risk. This chapter will discuss these exit options in detail to help you plot your investing course. Chapter nine, how to work far less and get way more done.

[00:19:11]Real estate investing takes time. So, in this final chapter, we explore several key strategies that you can use to fit your new journey into your existing life. You'll learn the power of killing dead space and accomplishing your goals and how giving your money away can scientifically make you more successful.

[00:19:28]Are you ready to begin? As you work your way through this book, remember that it is not designed to go into the weeds on the various aspects. This book's goal is simple. To give you the big and broad view of how real estate investing works and to give you the basic tools to get past the all-important question of how to get started. As you read along, make note of any questions or highlights and then come back to biggerpockets.com and search the site or ask questions on our forums to learn more. Finally, if you are not a member already, please take a moment right now to sign up for a free account on biggerpockets.com.

[00:20:03]Seriously, like right now. We'll wait.

[00:20:06]And with that, we invite you to start this journey toward real estate investing success. We'll be with you every step of the way. It is perfectly natural to be intimidated, but our goal at Bigger Pockets is to help you overcome your fears and your countless questions by providing as much information as possible to help you make the best decisions for your own needs.

[00:20:27]If you are ready to begin your journey, turn to chapter 1 now.

[00:20:34]Chapter 1. Nine questions every real estate beginner wants answered.

[00:20:40]Ask better questions. That was the answer given by Tim Ferrris on episode 254 of the Bigger Pockets podcast when asked, "What makes someone successful in any of life's ventures?" As the author of four New York Times best-selling books, including The 4-Hour Work Week and Tools of Titans, Tim knows a thing or two about success. As Tim says, great questions lead to great answers. If the most complex question you ask in life is, "How do I pay my rent this month?"

[00:21:09]you'll likely get an answer and solve the question. But when you increase the depth or intensity of your questions, you'll find the depths of your answers and your life increase as well.

[00:21:20]Additionally, questions have a powerful way of opening doors, allowing one to continue moving through their journey rather than giving up. As taught in perhaps the most popular finance book of all time, Rich Dad Poor Dad by Robert Kayasaki, the right questions put your mind to work rather than simply shutting it down with a statement like it can't be done.

[00:21:40]For example, many people simply argue, "I can't invest in real estate because I have no money." But asking the right question like, "How can I invest in real estate even though I have no money?"

[00:21:51]opens doors, expands one's world, and ultimately leads to an answer that can change a life forever.

[00:21:58]It's for this reason that we decided to begin this book addressing the most common questions new real estate investors have. Rather than forcing you to read through the entire book while wondering about these issues, let's just clear them from your mind once and for all and address them. The following pages include answers to the nine questions below, which have come up again and again on the Bigger Pockets forums and on the live weekly Bigger Pockets webinar. Can I invest in real estate if I have a full-time job? Do I need to pay some guru in order to be successful? Can I invest in real estate if I have no money? Can I invest in real estate with bad credit? Is real estate investing a way to get rich quick? What if my market is too expensive? Do I need some kind of LLC to invest? Should I wait to invest until the market changes?

[00:22:45]Do I need to have a real estate license?

[00:22:48]Let's jump in.

[00:22:50]One, can I invest in real estate if I have a full-time job? Yes, there are hundreds of ways to make money in real estate. As you'll see throughout this book, some of these techniques or strategies might require 40 hours a week, while others might only require 40 hours per decade. The amount of time it takes to grow your real estate business largely depends on your investing strategy, your personality, your skills, your knowledge, and your timeline.

[00:23:17]Furthermore, remember the story of the tortoise and the hair. The hair continually sprinted through the race while the tortoise took the slow and steady approach. While many investors have sprinted toward their investment goals, success is most often found by consistent action, not big action.

[00:23:35]Consider two types of people who try to lose weight. The first person sets a goal and heads to the gym for a 3-hour run on the treadmill. A few weeks later, they go back to the gym and use the free weights for a few hours. Then a month later, they go back and try the elliptical machine. The second person, however, sets the goal and goes to the gym 5 days a week, but just works out for 30 minutes every single day while also watching calorie intake. After 3 months, which person would you assume lost more weight? As any personal trainer will tell you, the second person will win almost every time. Why? Because consistency in action is far more important than sporadic big action. So, what does this have to do with investing in real estate while working full-time?

[00:24:20]Simple. Even if you can only spare a few minutes each day, but you are consistent with it, you can invest in real estate.

[00:24:28]Most real estate tasks don't require hours and hours of work. For example, analyzing a real estate deal might take 10 minutes, especially if you are using the Biggerpockets property analysis tool at biggerpockets.com/analysis.

[00:24:42]If you simply analyzed one deal a day, but did it consistently for 3 months, that's nearly 100 properties analyzed.

[00:24:50]If you purchased just 1% of those properties, you could end up buying a deal every 3 months. So, yes, you can invest in real estate while working a full-time job. In fact, it might even be beneficial. First, by holding on to your day job, you do not need to live off of any of the cash flow or profits you make from your investment. That's what your 9to-ive job is for. By reinvesting all the profits from your investments, you can fully realize the incredible benefit of exponential growth. Additionally, it's much easier to get long-term bank financing thanks to the steady income from work, which can also help increase and stabilize your wealth building. Real estate can be highly profitable both as a career and as a side hustle while working a normal job. However, the choice is yours as to which path you take. Don't simply decide to quit your day job and become a full-time investor because you read about other investors who have been successful doing it that way. You've probably heard the age-old high school guidance counselor question.

[00:25:49]If you suddenly had $1 million and didn't have to work anymore, what would you do? Your answer, it is said, is the career field you should be in. Would you invest in real estate? If your dream path would be to open up a shelter for abused animals or to move to Aruba and train tourists to surf, you probably should not be a full-time real estate investor or you should make sure that your investing lines up with that vision and can get you there. That's not to say that you shouldn't invest in real estate. You just maybe shouldn't go full-time. You don't need to make real estate your career in order to build wealth in real estate. If you love your job, you don't need to quit to invest in real estate. In fact, you can achieve the same or better results as a full-time real estate investor by investing on the side. That said, life is too short to be stuck in a job you hate. Choose a career that makes you excited to wake up in the morning, energized throughout the day, and content when you fall asleep at night.

[00:26:45]If that desire leads you to full-time real estate investing, welcome to the club. Just make sure you are not simply building a career, but building a future. Michael Swanie Swan. Bigger Pockets podcast episode 238. Michael Swanie Swan was happily working as a teacher in San Diego when he heard a terrifying rumor. Potential budget cuts might reduce his salary by $12,000 in the coming year. If this rumor turned out to be true, it would be a devastating blow to his already meek earnings. He and his family were barely getting by as it was. So, the thought that he was powerless over this potential financial tragedy rocked him to the core. Right then and there, he decided he needed to be fully in charge of his financial future. After looking into different investing strategies, Michael settled on real estate after he talked with an old high school buddy who was a real estate broker. The broker helped him find a one-bedroom, one-b condo in his area for $135,000 and it cash flowed $335 per month after all the expenses. Michael was hooked. He had an extra $335 per month coming in with very little work. If this worked so well for one, why not do 10? He reasoned. Michael started taking money out of his IRA to invest in condos. He quickly learned that three-bedroom condos did not cost more than one or two-bedroom ones, but they cash flowed $500 to $600 a month. Despite still working 60 hours a week as a teacher, Michael soon owned and managed 10 condos and had zero money left in his IRA. But he was perfectly okay with that because not only did these properties cash flow well, they were also appreciating in value at an incredible rate. This created a unique problem for him, though. He suddenly had $1.6 million in equity and wasn't sure what to do with it. Since he frequently encouraged his students to look to books for answers to their problems, he took his own advice and researched what to do with all this equity. It was then that he learned about the wonders of the 1031 exchange discussed at length in chapter 8. If he sold his properties and purchased another at a similar or greater value, he could delay paying taxes on that property. Michael sold one of his properties and made a $140,000 profit after it was all said and done. After talking with a co-orker whose family owned and managed properties in the Cleveland, Ohio area, he decided to use his profits to invest there as well. He purchased a duplex in a suburb of Cleveland and hired his co-workers family to manage it. This cash flowed better than his condos in San Diego, so he began to sell off all his condos and purchase properties in Ohio. He soon found a 15-unit apartment building in a suburb of Cleveland for $595,000.

[00:29:30]At the time, it was cash flowing for $15,000 per year, but he knew it had the potential to cash flow for $30,000 with a little work. Later, he purchased a 24-unit apartment that was cash flowing for $24,000 per year. Today, Michael owns eight apartment complexes and four single family homes for a total of 122 front doors and counting. He is also beginning to take on investors as he continues to get more deal flow. Despite the fact that he has more than $2.5 million in equity net worth and earns more than $160,000 in annual income, he continues to work full-time as a teacher. Michael loves teaching, especially now that he is free from the worries of a change to his teaching salary. Two, do I need to pay some guru in order to be successful? Absolutely not. Countless investors have become successful without the help of the guru crowd. The goal of many of these individuals is to sell you on the dream of fast riches, fancy cars, easy money, and so on. And many gurus prey on people who desperately want to make money. They often use very slick and dangerous for you techniques to sell you on their very expensive courses, boot camps, mentoring, training, etc. Keep in mind that there are many in our industry who benefit from the marketing of these gurus. Most websites focused on the investment niche affiliated with them, making large referral fees, often on the order of 50% in return for marketing their wares. Additionally, a large percentage of real estate clubs derive their revenues from splitting the money from products and events sold by gurus who teach at these events. Remember, real estate gurus are in the business of marketing and selling you on the dream.

[00:31:12]Through this book and the thousands of articles and millions of discussions available on Bigger Pockets, you can absolutely learn everything that you would pay thousands of dollars to a guru for, and you can do so for free. Now, that's not to say coaching or training doesn't have a place in the industry or in your future. Even Serena Williams, arguably one of the best tennis players in the world, has a coach. Coaches or mentors can be incredibly helpful in answering questions, allowing you to break through mental barriers, holding you accountable to action steps or working alongside you on a deal. Some of these individuals are very knowledgeable and there are plenty of stories of individuals who have paid money to a coach or a mentor and found incredible success. Maybe the handholding is just what you need. But caveat mour, let the buyer beware. Do your homework on the educator. Searching bigger pockets is a great way to do this. And don't get caught up in the hype or the promise of secrets. There aren't any secrets.

[00:32:08]The point we're making is this. Before throwing money at someone else to make you successful, understand that success comes from within first. In today's world, real estate information has been democratized. That is to say, the information you need is out there, right for the taking. You don't need to pay $20,000 to some national guru that you'll likely never even meet to tell you how to find real estate deals, how to get funding, or how to structure your business. We'll cover all that within this book, and you can find hundreds of online resources that discuss these topics on Bigger Pockets.

[00:32:42]Three, can I invest in real estate if I have no money? The simple answer is yes.

[00:32:48]It is possible to invest in real estate if you don't have any money at all.

[00:32:52]However, there is money involved in every real estate transaction. The issue, therefore, is not that you're investing with no money, but rather that you're investing with none of your own money. Investing in real estate without using any of your own money requires using other people's money, OPM.

[00:33:08]Learning to strategically invest in real estate without any of your own money is one of the most complex but important tools you can develop in your real estate investing career. The key to investing in real estate without any money of your own is simple. Bring something to the table. If you lack money, there are other things you can bring to the table in a transaction if structured correctly, including education, time, connections, confidence, intelligence, and creativity. By reading this book, you are already taking steps toward building your strengths in those areas.

[00:33:40]Many investors use little or none of their own money when investing in real estate by applying one of several methods that include partners lease option strategies, FHA 3.5% down payment loans, USDA or VA no down payment loans, home equity loans or lines of credit, seller financing, private or hard money, wholesaling.

[00:34:04]We will look at each of these areas in more depth later in this guide. We want you to recognize that investing in real estate without income is possible, but may not be as easy as the gurus would have you believe.

[00:34:17]Anen Young Bigger Pockets podcast episodes 34, 96, and 235.

[00:34:23]Anen Young was moving to Phoenix, Arizona with his wife, but had no job waiting for him there. On the road, he read Rich Dad Poor Dad by Robert Kayasaki and decided he wanted to invest in real estate as a way to generate real income and long-term wealth. He decided he wanted to try his hand at house flipping. Not knowing much about the business, he wisely began to work simple, low-paying jobs for investors to learn everything he could. While he found the work to be less than fulfilling, he did learn a lot about analyzing properties, finding deals, and networking. Soon, he felt ready to buy his own properties. But there was just one problem. Anson didn't have money to flip a house. He partnered with a friend who had money and was looking for a deal. They joined together, purchased a property for $80,000, and after putting $14,000 into fixing it up, sold the home for $144,000 and split the profits. Anen looks back at that deal as an amazing learning experience, a stepping stone he needed on his journey. Without a lot of spare cash to use, Anson used his skill and his free time to find incredible deals and rather than flip them himself, began to wholesale those deals to other investors. However, as he built up capital, he began to add some more flips into the mix, improving his skills on managing contractors and earning more and more income. One of Anson's superpowers has been his ability to find deals even in competitive markets using a variety of creative strategies. One of his favorite methods, which he began using early on, is simply knocking on doors of people who are significantly late on their mortgage payments and in danger of losing their homes. If no one is home, he tapes a simple message to the door. According to Anson, it's easy to ignore a generic mailer, but hard to ignore a person standing at your door.

[00:36:09]Since most other wholesalers and flippers are not out there knocking on doors, you tend to stand out. To this day, Anson has completed more than 100 wholesale deals and 75 house flips. He is always seeking to expand his business and to adapt to the market as it changes, but credits his continual success to the systems he consistently works at improving, doing the hard things every day that his competition isn't willing to do. According to Anen, you're either consistent or you're non-existent.

[00:36:38]Four, can I invest in real estate with bad credit? According to credit.com, nearly 68 million Americans, one in three, have a credit score of less than 601. That's a huge number of individuals who are unable to obtain a traditional mortgage because most banks require a score of at least 580 to get a loan.

[00:36:58]This makes real estate investing a difficult task for many. So, can you invest in real estate with bad credit?

[00:37:05]Well, we have good news and we have bad news. The good news is yes, you can invest with bad credit using the same techniques that we touched on briefly a few moments ago in regard to investing with no money. The bad news is you probably shouldn't invest in real estate if you have bad credit depending on the reason for your poor credit score. Bad credit can happen for a variety of reasons. Perhaps medical bills caused the issue or maybe identity theft was the culprit. Maybe a person lost their job and had to miss some payments. The economic recession that started in 2007 led millions of Americans into financial difficulties, destroying credit scores in the process.

[00:37:44]But sometimes bad credit is caused by good old-fashioned stupidity and ignorance. A credit card here, a credit account there, vacations, new clothes, and other need it now luxuries have caused thousands of people to lose their good credit score and wind up in a rough spot. Refusing to live on a budget, buying non-essentials because of desire, or simply refusing to see reality for what it is can lead to missed payments and a poor credit score. This takes us to the big question. Is your bad credit a symptom of a greater problem? We ask this because most of the time it is.

[00:38:18]It's a symptom of greed, selfishness, impatience, and other terrible money habits. Think of it this way. If everyone's credit score was suddenly boosted to 800 and 100% of their debts were wiped out, what would happen?

[00:38:31]Within 3 years, you would likely find the same people with the same low credit scores and high debt because the credit score is merely a number that represents your financial ability to manage your money. A low credit score is just a symptom of a greater problem.

[00:38:47]Do some deep reflection and look at your life. Have you found the solution to ending your bad credit? Answer that question honestly. And until you can 100% say yes, don't invest in real estate. To help you answer that question, ask yourself these three things.

[00:39:04]When is the last time you put something other than food on a credit card because you didn't have enough money to pay for it? If your credit is poor, when is the last time you read a book on credit repair? If you haven't made any attempts to improve it, are you really past it?

[00:39:20]What does your written budget look like?

[00:39:22]What? You don't have one? Uh-oh. Real estate investing will not solve your bad money habits, and anyone who says otherwise is trying to sell you something. Get your credit problems under control and then invest in real estate.

[00:39:37]Five. Is real estate investing a way to get rich quick? No doubt one of the largest draws to real estate investing is the image of investors driving fancy cars, living in large homes, and being all-around rich. While many real estate investors do build significant wealth over their career, real estate investing is not a get-richquick scheme. Yes, there are some who make a lot of money in a short time. However, these situations are generally the exception, not the rule. Investing in real estate takes planning, patience, and persistence.

[00:40:12]Don't expect to make millions of dollars in your first year. Instead, plan on creating a business through real estate that will grow steadily year after year to enable you to meet your financial goals and hopefully your dreams. No matter what you might hear otherwise, being successful in real estate requires hard work, just like it does in any other field. It is also important to know that there are no shortcuts to being successful in real estate. There are no products or tools that will do the work for you either. you must learn the fundamentals and then apply them. Of course, our goal here is to help you with that. At the same time, we believe real estate is one of the fastest ways to generate real wealth in today's world. Many financial experts only advice is to set aside 10% of your paycheck into a 401k or IRA and wait patiently for 40 years so you can retire with a moderate income when you are too old to truly enjoy it. No thanks. Real estate, when done correctly, gives you the ability to supercharge your growth because of the power of leverage, the ability to use other people's money to get higher returns, and the ability to hustle. Of course, this isn't to say that real estate should be the only investment one makes, as it's important to have a well-rounded financial plan, but we still believe real estate to be the best. For example, if you were to start with $10,000 and save $200 per month, after 5 years, you would have a bit more than $22,000 depending on the interest you earned during those 5 years. However, if you took that same $10,000 and used it to successfully flip a house, you could turn that $10,000 into $40,000 in less than 6 months.

[00:41:47]Could you turn that $40,000 into $70,000 in another 6 months of house flipping?

[00:41:53]Work your deals right and you definitely can. Or maybe you'll simply put the money into a rental property and if you get the right deal, begin earning a passive return significantly higher than other investments. So yes, real estate investing can make you wealthy and it can make you wealthy faster than any other investment out there if you are willing to work toward it. And that's the key work. Unlike that 401k or IRA or stock account, real estate investing is going to require some more work from you. You need to learn what a good deal is. You need to learn how to find these deals. You need to learn how to fund those deals. You need to learn how to manage those deals. But that's what this book is all about. Helping you learn the fundamentals so you can build wealth faster than you ever thought possible.

[00:42:39]Brian Burke, Bigger Pockets Podcast, episodes 376, and 152. Brian Burke grew up in California and was just 20 years old when he decided he wanted to be a real estate investor. coming to that conclusion after deciding he would help a family member out by buying a property and renting it back to them. He got the deal with no money down thanks to a combination of seller financing and a traditional bank loan. Although he made no money from the deal, Bryant did learn a few important lessons. After failing the test to be an air traffic controller, Brian went into law enforcement. He worked mostly evenings and weekends, which freed up his days to learn about real estate. Eventually, he decided to try his hand at flipping houses. Being that these were the days before the internet was mainstream, Brian learned to code and wrote his own computer software to compile information from various sources, giving him a competitive advantage in his market.

[00:43:33]Using this software, he had access to everything he needed to know to make quick and accurate decisions when bidding on a piece of property.

[00:43:41]Brian funded his first flip with his credit card, and because of excessive costs, he ended up making only $1,500 when it was all said and done. Despite making less than $1 per hour for his time, he didn't give up and decided to figure out better ways to find, finance, and rehab properties. He then had several successful deals and decided that he was ready to quit his job as a police officer and work as a real estate investor full-time.

[00:44:09]Brian walked into his job one day, informed his co-workers that he was quitting, and invited him to attend his presentation on real estate. At the end of his presentation, he raised $500,000 from 28 investors. With that capital, Brian started buying 15 to 20 houses per year. He ended up giving his colleagues a 20% return on their investment. And of those 28, almost all are continuing to invest with him today.

[00:44:34]When the crash happened in 2008, Brian saw a huge potential to purchase and flip foreclosed houses at rock bottom prices. He knew that in order to truly expand his business, though, he would need a partner. So, he teamed up with a CEO of one of the biggest home building companies in the area, who also saw the market crashing and wanted to scale back his home building company to flip houses instead. Together, they purchased and rehabbed houses in production line fashion. Within 6 months of teaming up, they were buying, fixing, and selling more than 100 homes per year and continued at that pace for almost 5 years. Recognizing that the market had bottomed after the crash, Brian and his team also bought $15 million worth of homes in the Bay Area in Northern California, rented them out, and sold them a few years later for nearly $35 million.

[00:45:24]Brian's business has done 700 plus deals totaling nearly $300 million in real estate. His favorite deals are multifamily properties larger than 200 units. As the business has grown, so has its need to raise capital for investments.

[00:45:41]About onethird of my time right now is building capital, Brian states.

[00:45:46]Today, Brian and his company spend their time focusing on larger multifamily properties across the United States, utilizing the syndication model to fund his deals. He currently owns 2,000 apartment units in six states: California, Arizona, Texas, Georgia, Florida, and New York.

[00:46:04]Six. What if my market is too expensive?

[00:46:08]You should probably give up and head back to the TV. I'm kidding, of course.

[00:46:13]In many parts of the world, the real estate market is insanely expensive. In Denver, where I, this is Josh, live, the average price of a single family home has more than doubled in the past seven years, climbing from a low of approximately $28,000 to a high of $416,000.

[00:46:31]It's absolutely nuts. Yet, each year, prices continue to increase. However, people are making a killing in Denver real estate. They just aren't doing it in the same way that I want you to. You see, different markets allow for different types of investments to prosper.

[00:46:47]Denver or any expensive city might not be conducive to cash flowing rental properties, but many house flippers, pop toppers adding a second story to a singlestory home to increase value and developers are raking in the cash right now. This example of Denver illustrates an important point. If your market is incredibly expensive, you have four real options. One, don't invest, but simply wait on the sidelines for the market to change. I don't recommend this one, but it's a possibility. Two, look harder.

[00:47:18]Often times, the market might be overheated, but good deals could be found for those willing to look harder for those deals. Luckily, we'll look at 27 unique strategies for finding real estate deals in chapter 6.

[00:47:30]Three, change your strategy to something that your expensive market does allow, like flipping or development. Four, invest someplace else. This might mean driving 60 minutes outside the expensive city to find deals in smaller, more rural markets. Or it might mean building a team at a distance and investing 2,000 m away.

[00:47:51]Only you can determine the best path to take. But if you are considering investing at a distance, it's vital that you do your homework. As I mentioned in the introduction, when I, Josh, first began investing in real estate, I lived in Los Angeles, but bought properties in the Midwest. I immediately found myself in a world of hurt and never really made money on those investments because I didn't realize how difficult long-distance investing could be when you're not prepared. Therefore, if long-distance investing is in your future, I would recommend picking up a copy of Long-distance Real Estate Investing by David Green, published by Bigger Pockets Publishing. It's a fantastic deep dive into the world of investing from thousands of miles away and will help you determine which market to look toward and how to build your team there and tips for making sure you don't get screwed over. David Green Bigger Pockets podcast episodes 169 and 257.

[00:48:45]David Green started his real estate journey with a huge blow to the ego and the wallet when his first rental property tenant forged David's name on a check and stole $7,000 from his checking account. Not a great way to begin a real estate investing career. Further, his difficulties in getting started were compounded because he lived in the Bay Area of Northern California, one of the most expensive markets in the United States. Many people would have simply given up at this point, deciding that it's just too tough to build wealth through real estate when one lives in an expensive market. But David was no stranger to hard work in tough situations. As a police officer in the San Francisco Police Department, David routinely put in 100 plus hour work weeks, busting bad guys and chasing down criminals to keep his city as safe as possible. So rather than running from the tough real estate start, David instead began to ask himself, "If my city is getting too expensive, how can I invest at a distance?" This led David to develop a team-based investment strategy he later coined his core four, made up primarily of a rockstar real estate agent, a property manager, a contractor, and a lender. Rather than trying to know and do everything himself, David decided to rely on experts whose job it was to know the market he was considering investing in. If you were to go buy yourself a car, would you actually open the hood and pour over the engine and read books on understanding how engines work to make sure that a Camry is the best car for you? Or would you read a consumer report that compares a Camry to an Accord and to a Hyundai and use that expert opinion to base your decision on?

[00:50:21]David said, "For most people, expert opinion is the ultimate guide to determining decisions." So, David applied this principle to his investment strategy. He started buying properties in Arizona and discovered he could be receiving cash flow each month without ever needing to step foot in the state.

[00:50:38]Later, he expanded his markets to Florida, Georgia, and Arkansas, collecting impressive monthly cash flow with each purchase and becoming a real estate millionaire in the process.

[00:50:48]Today, David buys up to two houses each month across the country, relying on his core four in a system of checks and balances to ensure deals make sense and no one can rip him off. David also became a top selling real estate agent and spends his time growing the business so he can buy more real estate at a distance. And what if something goes wrong? For David, it's simple. You deal with it. Sure, anything could go wrong, but in those situations, there is someone whose job it is to fix it. David says, "Besides, those things that could go wrong at a distance are the same things that could go wrong right down the street from you. It won't be any different when you're out of the state.

[00:51:26]I haven't come across a thing that's any more unique in a different area than what I have with the rentals I own in California. The same stuff happens and can be solved no matter how far away you live." Seven. Do I need an LLC or a corporation to invest in real estate?

[00:51:43]Now's this for a roundabout answer. You probably don't need one, but it might be a good idea someday, maybe. Let us explain. There are no laws that require a person to have an LLC, that is a limited liability company or a corporation, to invest in real estate.

[00:52:00]In fact, for most beginners, having an LLC or corporation can actually make investing much more difficult. But before we dive into the pros and cons, let's take a quick look at what an LLC is and what a corporation is. An LLC and a corporation are legal entities set up to operate a business. Think of an LLC and a corporation as entirely separate persons owned by you who could own your real estate directly instead of you owning it directly. People often open these entities to limit the liability that they would encounter in the case of a lawsuit. For example, let's say that John and Jane homeowner created and owned Biggie Bird LLC and Biggy Bird LLC owned 123 Main Street. The tenants of 123 Main Street slipped and fell and sued the owner. And the courts determined that the landlord was at fault and ordered it to pay $10 million, far more than the insurance policy would pay out and far more than Biggie Bird LLC had in its accounts. Biggy Bird LLC went bankrupt. However, if the LLC had been created and operated correctly, this catastrophic event would have left Jon and Jane financially intact. In other words, if Jon and Jane owned other assets, properties, stocks, etc. directly in additional legal entities, those assets would hopefully have been safe from the lawsuit and the bankruptcy.

[00:53:21]There are also some other legal and tax reasons for setting up an LLC or establishing a corporation that are beyond the scope of this book. For more on that, pick up a copy of The Book on Tax Strategies for the Savvy Real Estate Investor by Amanda Han and Matthew McFarland, which you can get at biggerpockets.com/store.

[00:53:40]Protecting yourself from a lawsuit sounds pretty good, right? But LLC's and corporations have one major downside, especially for new investors. Difficulty in obtaining loans. When you first begin buying real estate, you'll probably buy smaller residential properties with conventional loans. Let's say you'll get a bank loan and probably buy a single family house. But most banks do not lend money on a residential property to a legal entity. They only want to lend to a real person. Therefore, a lot of investors end up going through the hassle and expense of setting up an LLC only to find themselves not able to use it on their purchase. This entire situation is swapped, however, when it comes to flipping houses or buying larger commercial real estate properties like apartment buildings. In those transactions, the lenders will often require the individual to own the real estate in a legal entity. Do you need an LLC or a corporation? You should really check with your legal and tax advisors as the authors of this book are neither and can't offer legal advice. Don't let the legal entity issue stop you. As mentioned earlier, this question of to LLC or not to LLC is one of the most common questions we receive. But we have a suspicion that this question is actually more of an excuse than a question. In other words, many people refuse to take action on their real estate journey for years because they don't know whether to get an LLC or not.

[00:55:03]It's fear disguised as a question. It's much easier and sounds better to say, "I haven't started investing yet because I don't know if I should get an LLC." than it is to admit, "I'm afraid." Listen, if you feel like you need an LLC or a corporation, go talk to the right people today, get what you need, and move on.

[00:55:24]But don't let it stop you any longer.

[00:55:27]Eight. Should I wait to invest until the market changes? Probably not. A lot of investors are looking at the real estate market right now and saying, "Wow, I sure wish I would have invested in real estate back when prices were super cheap. I guess I'll just wait until the market crashes again and then I'll jump in." While we understand and respect the sentiments in that statement, let us offer a few pieces of advice on why we think that's a bad idea. When the market does correct itself again, and it will.

[00:55:55]Real estate is cyclical, meaning it goes up and down. You need to be prepared and ready to buy. But if you sit back right now refusing to partake, you won't have the confidence, the clout, nor the collateral to invest. There are deals to be found in today's real estate market.

[00:56:11]You just have to look harder. This requires that you become an expert at deal finding, deal analyzing, and putting together the financing. Is it hard? Yes, it often is. But consider the baseball player taking a few practice swings before stepping up to the plate.

[00:56:26]Instead of swinging one single bat, he grabs three bats and swings all of them together. Why? Because his muscles quickly get accustomed to the weight of three bats. So when he drops the extra bats and approaches the plate moments later, the single bat in his hands feels light as a feather, giving him the ability and confidence to knock the ball into the left field bleachers. In the same way, becoming an experienced real estate investor now by developing the skills necessary in today's market will help you knock it out of the park when the market does decline. Your skills will be sharp, your reputation will be solid, and your finances will be in order. You will be ready to dominate.

[00:57:06]And as David Osborne said in episode 226 of the Bigger Pockets podcast, don't wait to buy real estate. Buy real estate and wait. Nine. Do I need to have a real estate license? Definitely not, but it could come in handy. A real estate license is not necessary for investing in real estate. A license gives you the ability to help others buy and sell real estate, but anyone can buy or sell real estate on their own without being an agent. Just because you don't have to have a license, does that mean you shouldn't? Not necessarily. Having a real estate license can come in handy for an investor for a few reasons.

[00:57:45]Speed. In a competitive real estate market, the early bird often gets the worm. As a real estate agent, you can get first knowledge of real estate deals that are listed.

[00:57:55]Access. A licensed real estate agent can get into almost any property that is listed for sale with a special key and lockbox. In other words, you don't have to wait for someone else to go with you or give you permission to see a property. If the home is vacant, you can head over any time, assuming the home has the special lock box present. If the home is not vacant, you can set up a time to view it without having to fit into another agent's schedule.

[00:58:20]Commissions. When a home is sold, the seller usually pays around 6% to the agents who made it happen. This fee is typically split 50/50 between the agent who listed the home and the agent who brought the buyer. Therefore, as a real estate agent, when you buy a property, you can represent yourself and use that commission toward your down payment or repairs or to take a trip to Jamaica.

[00:58:41]So, what's the downside of getting your license? There are a few. Time. First, becoming an agent is not as easy as just signing a document. You have to take an extensive class. Depending on the state, the class could be up to 190 hours long.

[00:58:56]And you must pass a difficult test, which may require long hours of studying. This takes away time from actually investing in real estate money.

[00:59:05]Then once you become an agent, you'll find yourself paying several thousand dollar in fees each year just to hold on to your license. Paperwork. Finally, as an agent, you'll find yourself responsible for additional paperwork and disclosures in every deal. If you are representing yourself, you can't simply let your agent do all the heavy lifting because you are the agent. Should you get your license? Really, it's up to you. Of the two authors of this book, John has had a license and Brandon has not. There are plenty of examples of individuals who have had a license and found success and others who achieved greatness without it. But to answer the original question, no, you do not need a license to invest.

[00:59:45]Wrapping it up, great questions lead to great answers. It is our hope that addressing these questions headon right here at the start has put some of your biggest concerns at ease. Now, with those out of the way, we can move on and help you discover how you should start your real estate journey. And the best way to start your journey actually has nothing to do with houses, apartments, or flips. It has to do with you and your financial foundation. Let's get you ready for a lifetime of financial success.

[01:00:18]Chapter 2, boring financial stuff that just might save your life. Hide your kids and lock the door because we're about to tell you a horror story unlike any movie you've ever seen. The scene opens up with a nice family, two loving adults, and a couple of kiddos recently added to the mix. The parents wake up each morning, enjoy breakfast, get the kids off to school, and head out the door to their jobs. After an hour-ong commute, they spend 8 hours, sometimes more, working hard to make their company more profitable. On the outside, they look happy and content, but something evil lurks beneath the surface, their finances. Each month, their paychecks are deposited into an account. Then, like a leaky bucket, the money drains out faster than it should. Our cute little couple knows how much they earn at their jobs, but based their purchasing decisions on emotion and greed. Their banker tells them that they can qualify for a home up to $250,000.

[01:01:13]And shockingly, they've recently purchased a home for $250,000.

[01:01:18]The couple often needs to make larger purchases such as nice cars so they can get to work, nice furniture so they can feel at home, and even good iPads.

[01:01:26]They're for the kids. They borrow the money needed for these purchases from banks, credit card companies, and anyone else who will throw them some cash.

[01:01:34]After all, it's just a small monthly payment. They can handle it, right? Over time, they buy more and more stuff on credit and continue adding small monthly payments. Their bank tells them they can buy a bigger, nicer, more expensive home. So, they upgrade to a nicer $550,000 home for the kids, of course.

[01:01:53]Although this family has a decent amount of income from both parents working, they have just a few thousand in their savings account and far less in their checking account. When the wife's debit card is declined at the supermarket due to insufficient funds, she embarrassingly pulls out a credit card and mumbles something about the bank not working right. Month after month, events like this happen. If only I could get a raise, the husband grumbles one night in bed. We could really get ahead. Years go by, raises come, income rises, the job gets worse, the commute gets longer, and despite the income climbing, our family never really gets ahead. The kids take up sports, which are expensive. Stress from the job makes vacation a must-have quarterly event. Cars need to be upgraded. Then one day after serving loyally at his company for 15 of the best years of his life, an economic downturn forces layoffs and our hard-working husband and father loses his job. 3 months of lost wages lead to even more debt because the bills need to get paid. Relief is found when a new job is obtained, but the pay is slightly lower than before. So he works longer hours, 60, sometimes 70 hours a week.

[01:03:03]The marriage suffers. The kids head off to college, but because the parents can't afford to help with the cost, the kids start their own financial journey with six figures in student loan debt, and the cycle continues.

[01:03:15]Our beloved couple finally reaches retirement and spend the rest of their days living on social security and watching television. When asked how they're doing, they smile and tell everyone, "We're doing great, but inside they are dead." At night, while holding each other, the wife asks her husband, "Why is it so hard?" He replies, "I don't know, honey. I just don't know.

[01:03:36]This story is not fiction. This is life for millions of people. No matter how much they earn, they spend more. They can't invest in their future because there is never any extra money to invest. The desire for owning more and more stuff hinders their ability to build true wealth and financial freedom.

[01:03:55]They are trapped. They are dying. You might have thought the save your life part of this chapter's title a bit of hyperbole. Let us assure you it is anything but. Having a strong financial foundation not only helps you build wealth but it can also help you in almost every area of life.

[01:04:13]As everyone knows, a firm foundation is the key to a long-lasting structure. It doesn't matter how great the building looks. If it's built upon a weak foundation, it's going to collapse. So today, right now, it's time to help build your real estate foundation. And it has almost nothing to do with real estate. It has to do with money and your relationship to it. And yes, while we titled this chapter boring financial stuff, we hope you'll really take the time to read this information because it truly could save your financial life.

[01:04:44]And we'll try to keep it from being too boring.

[01:04:48]Knowing where you stand. The first step in building a strong, stable foundation is knowing exactly where you stand financially. That might seem obvious, but the vast majority of Americans have very little knowledge of what their financial position is at any given time.

[01:05:03]Knowing where you stand comes down to three factors. How much you currently have, how much you currently earn, how much you currently spend. Smart business owners know these numbers at all times and create monthly financial statements that document every penny. Average people, however, do not. Consider the family from the story we just told. They might have known how much