I’ve been doing this since 2002. I’ve done over 2000 single family homes, including more than 1700 fix and flip projects, hundreds of rentals and hundreds of wholesale deals. I don’t want to sound like I’m bragging here, because that’s not my intent. I just want you to know I have data and some personal experience to back up what I’m about to say. If I were starting all over again today, what would I do? I’m going to share it with you in just a couple of minutes.
I won’t keep you in suspense – if I were starting all over today, I’d dive into the BRRRR Method and acquire as many single family rental properties as I could. Today I’m going to be joined by one of the emerging champions of the BRRRR method, David Dodge.
David is a St. Louis Real Estate Investor with over 18 years of experience. He first started investing in Real Estate when he was in college, at the age of 20 while attending the University of Missouri-Columbia. David specializes in Wholesaling Real Estate as well as using The BRRRR Method to acquire Rental Properties with NONE of his own money!
David is the Author of 3 books: “The Ultimate Guide to Wholesale Real Estate”, “The BRRRR Method” & “The 3 Pillarsof Wholesaling Real Estate”. His podcast “Discount Property Investor” teaches people all about wholesaling real estate as well as tons of tips and tricks about marketing, land-lording, rehabbing, and utilizing The BRRRR Method.
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2022, Roger Blankenship
I’ve been doing this since 2002. I’ve done over 2000 single family homes, including more than 1700 fix and flip projects, hundreds of rentals and hundreds of wholesale deals. I don’t want to sound like I’m bragging here, because that’s not my intent. I just want you to know I have data and some personal experience to back up what I’m about to say. If I were starting all over again today, what would I do? I’m going to share it with you in just a couple of minutes. I won’t keep you in suspense – if I were starting all over today, I’d dive into the BRRRR Method and acquire as many single family rental properties as I could. Today I’m going to be joined by one of the emerging champions of the BRRRR method, David Dodge. David is a St. Louis Real Estate Investor with over 18 years of experience. He first started investing in Real Estate when he was in college, at the age of 20 while attending the University of Missouri-Columbia. David specializes in Wholesaling Real Estate as well as using The BRRRR Method to acquire Rental Properties with NONE of his own money! David is the Author of 3 books: “The Ultimate Guide to Wholesale Real Estate”, “The BRRRR Method” & “The 3 Pillarsof Wholesaling Real Estate”. His podcast “Discount Property Investor” teaches people all about wholesaling real estate as well as tons of tips and tricks about marketing, land-lording, rehabbing, and utilizing The BRRRR Method.
[0:00] I’ve been doing this since 2002 and I’ve done over 2000 single family homes including more than 1700 fix and flip projects hundreds of rentals and hundreds of wholesale deals.
I don’t wanna sound like i’m bragging here because that’s not my intent I just want you to know i have data and some personal experience to back up what I’m about to say.
If I were starting all over again today what would i do?
[0:48] Real estate. Wherever you are, whatever your situation, there is an opportunity for you.
And now here’s that flipping America guy Roger Blankenship,
If i was starting all over today i would dive into the bur method that’s a B R R R method and acquire as many single family rental properties as i could.
[1:15] What is the BRRRR method?
David is a Saint Louis real estate investor with over 18 years experience,
He first started investing in real estate when he was in college at the age of 20 while attending the University of Missouri Columbia,
He’s the author of three books The Ultimate Guide to Wholesale Real Estate the Bur Method and the three Pillars of Wholesaling Real Estate we could be talking about wholesaling today but I wanted to talk about the Bur Method his podcast,
Discount property investor teaches people all about
Wholesaling real estate as well as tons of tips and drips about marketing landlording rehabbing and utilizing the bur method which is what I wanna talk about today because it’s where I would start and,
I will say that in my opinion I don’t even know David that well but I can already tell he’s better at marketing than I am.
[2:18] I prefer just going and buying houses and yeah I’ve done my more than my fair share of talking to sellers,
But and and it’s funny because as much as I enjoy talking with you and talking with groups across the country talking with sellers is now one of my favorite things,
I guess because i get a little impatient sometimes with people that I feel are wasting my time but,
I digress. Anyway, David’s gonna join us in just a couple of minutes. If you wanna reach us,
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[5:01] Welcome to the Flipping America show.
Glad, glad to have you. Alright, now, you’re a bird investor. So, let’s dive right into the topic and I never want to assume too much.
On the part of our listeners because we have some people listening today that maybe completely brand new and have never heard of the Burmet that I’ve investing. So, enlighten us, ready, set, go.
Okay. Yeah, no problem. So, the bur method is an acronym and it basically is be with four R’s behind it
And the acronym, you know, broken out each each letter of of the first word makes a bur.
[5:45] And then the hours go like this,
But here’s the cool part Roger. We use this strategy to acquire assets with a little to none of our own money.
And that’s really what the BRRRR Method is, right? So, if I was to break down this method in more detail, here’s how I would do it. I would say, hey, we’re gonna start,
By buying properties but we’re gonna buy them at deep discounts. Now can you do the bur method with little to no money? If you pay retail for a property, you can do it. We could probably not gonna be able to do with no money.
You’re probably gonna need to have some money to be able to do this, right? Yes. So, the way I do it is I go out and I do a ton of marketing.
I have radio ads, I send direct mail, I door knock, I drive for dollars, I network areas, I do all these different activities to try to locate property owners that are distressed, that are willing to sell me a property at a discount.
[6:52] So, the B in my case really stands for buy at a discount.
Exactly, exactly right. So, then what I do is I go, I talk to a private lender or a hard money lender and I borrow the money to actually go buy the property. So, I’m very, very rarely.
Using my own money I’m always borrowing from a private lender or a hard money lender and I’m typically borrowing the purchase price.
So step one is go find a discounted property from a motivated seller,
That’s the b alright then we get into the four R’s and again just to recap rehab rent refinance repeat are the 4 hours the first one is to rehab it.
So, Roger, we’re gonna buy it and then we’re gonna go and we’re gonna fix the property up.
Sometimes the rehab might be five to 10 1000 sometimes the rehab might be 30, 40, 50 1000, over the last 2 years, I’ve done about 200 bird deals,
In the average price that we spend to rehab a property is about 25 to 27 1000 give or take so it’s gonna depend on you know the property in the market you’re in and the level of repairs that you
How long have you been doing this David.
[8:20] Yeah I when I started 20 years ago,
That’s a sad day.
I know. I know. Hello to the rehab this morning that we’re looking seriously spinning $200 thousand to rehab a house.
It’s wild and there’s a part of me that thinks why don’t we just.
Yeah. Anyway, I’ve, okay. So, you’ve bought it at a discount and you stabilize, you’ve got a renter in there and that allows you to refinance it and.
[8:57] And then we repeat the process. So, we rehab it and then, like you said, and then we release it. You know, and you can do it yourself or you can hire a property manager.
And that’s the rental process. Yep.
You know I’m typically getting loans in my EIN number those are referred to as commercial loans,
Not in my social security number which are referred to as personal loan. So, local banks are gonna be much easier to work with whenever you’re getting commercial loans.
Like I don’t ever ask Chase Bank Bank of America US Bank any of the large banks,
For commercial loans because the underwriting process takes forever and they don’t like doing those loans but your local bank right down the street from your house the one that’s maybe got five or 10 or 15 branches that’s the bread and butter for these banks and these credit unions they like landing locally,
And they don’t mind doing these commercial loans. So, then we’re gonna go on. We’re gonna refinance it and here’s what the magic happens, Roger.
[10:00] Add or below 80% of what is appraises for.
[10:04] The bank’s gonna lend me typically 80% of what it appraises for. So if I buy it at a discount and I fix it up,
You know, closing cost, holding cost, interest to my lender all of it, everything,
I’m all in at or below 80% and then the bank that I’m getting my refinance loan from sends an appraiser out in an appraisal and I’m all in at her below that number I can acquire that asset,
After the refinance with literally none of my own money out of pocket.
[10:39] In fact you may put money back in your pocket.
That’s correct. I know the thing too is you may use money for down payment to make the original purchase but if you brought value to the property and you’ve got a tenant in there now to praise us for a lot more. You do that 80% refile. You get all your cash back.
So you’re only using the cash.
[11:03] You’re only using one pile of cash and use it over. Yeah and and personally Roger, I don’t like using any of my own money and the reason is even if I put in, you know, a little bit. Let’s say I had to put in five or 10 thousand or something like that.
Whenever I go to my refinance in the bank says hey you know we’re gonna pay off your existing loan send us a payoffs,
Or they see a payoff going to David Dodge or an entity that I own they start looking at this now like a cash out refinance versus just a rate in term refinance which isn’t a bad thing,
But the but the problem there is they’re gonna start landing at 70 or 75% of the appraisal,
I like to get loans at 80% so if possible I don’t wanna use any of my own money I wanna borrow 100% of the purchase,
100% of the rehab from a private or hard money lender so I can get a higher loan.
Last week I was doing some traveling up in Tennessee doing some speaking engagements and this is a question that I’m getting a lot these days How are you finding deals in this market.
[12:03] Oh, man. That is a great question and that’s typically the the most that’s typically the hardest question for most people that are starting out like where do I start, right? Well, we do a lot of things, right? I love driving for dollars.
And that’s simply me to get in your car. You can even get on a bus if you don’t own a car. And you drive around and you try to locate properties that look like they need work like distressed properties, right?
So, building a list that way is a great approach. I like to send mail to vacant property owners apps and tea property owners and then of course, there’s there’s more niche lists. Well, like, first of all, what do you do to.
[12:41] I typically use third party software batch leads is my favorite software that’s when I use. Yeah. I’m able to skip trace that software,
And I’m able to use that software to send mail I can call from that software and I can even send text messages from that software. Firstly, I’m not familiar with that one. So, you put in the property address and it’ll tell you who owns it. Where the tax bill goes?
[13:15] Oh, deal machine?
And what about land glide? Do you ever look at that? You know, I’ve looked at it. I don’t subscribe to it. A bunch of my friends use it,
At one point I had seven or eight or nine or 12 different softwares and I was like, holy cow, this is getting out of control. So, you know, what one piece of advice that I like to give my students cuz I do work with a lot of people.
You don’t need a bunch of softwares and tools. You typically are gonna need at least one or two. But you don’t need 12. You know, just get one, get from all it, get familiar with it, learn how to use it intensely, and then get to work,
You know one of the biggest problems I see a lot of people have in this space is,
And they’re not comfortable making offers. Well, guys and girls, if you’re listening right now and you wanna be a real estate investor, those are the two most important things that you can get good at,
Talking to property owners make friends with them and then make an offers to them.
Alright. So, you’re looking at these houses and you’re about to make an offer. What are the the numbers or what what are you kinda looking for in terms of.
[14:35] That’s a great question. So, you know, over the last 8 years, we’ve done about a 1000 transactions. My business, you know, roughly does about two transactions a week. So, either buying or selling
You know, two houses a week on average. And over the last 1000 transactions. You know, I would say that the average price that we pay is between 50.
In 65% of the zestimate.
[14:59] I don’t necessarily like this estimate. I don’t think this estimate is, you know, typically the most accurate number.
In my part of the country it’s actually pretty close but the zestimate isn’t a value of today the zestimate,
Is a value of what we like to refer to as the after repair value, right? So, it’s the value of the home, assuming that we cleaned it and painted it and fixed it, maybe even did some updates to that property,
Right? So, on average, I’m typically buying properties between 50 and 65%.
[15:38] Okay. Alright. So, now, this is another question I get. Ask a lot. Now, I’m interested to know your answer. How do you get people to take that little for their house?
Well, when they can, yeah, that’s a that’s a great question. So, you know, I’m not typically buying houses.
I’m not typically buying houses from somebody that just went and spend 30, 40, 50 1000 on rehab.
Right I’m looking for sellers that have a level of motivation,
No the the first thing that comes to mind is this.
The highest level, right? Looking down. What is a real estate investor do? Well, it’s simple.
[16:24] People looking to sell a property in exchange for a discount.
Hey willing to give me a discount well then I’m not gonna give them any convenience and I can actually sum up the conveniences into three things.
Right? There’s a lot of things we can do to make someone’s life convenient. Let’s be honest. There’s a one 1 million things we can do. But the 80 20 principal says that you know 80% of the time it’s gonna fall into 20% of the
They fall into three categories. So, number one would be cash. I’m gonna pay cash. Here’s the cool part. I just told you, I don’t use my money.
I’m gonna use a lender’s money but it’s still cash a close so number one is cash number two is going to be speed,
When I buy a property directly from a seller I’m gonna build a close that deal in two or 3 or 4 weeks right but it’s not gonna be too or 3 or 4 months which would typically be what it would take on the market,
It’s relative of course but number two is speed and then number three is as is,
I’m looking to buy properties from people that have properties that need a bunch of work. They need to be declared. They need to be cleaned. They need to be painted. They need to be fixed and that’s the convenience that I offer. So, if somebody’s looking for.
They’re looking to sell a property that’s distressed and needs a bunch of work,
Right and they just want cash they don’t want a bunch of contengencies with financing that’s where I come in as an investor and I offer them convenience.
I like it. That’s a very good summary, David. Way to go. Thank you. I just couldn’t help but think why you’re talking to ask you about this business model. How about people call in?
You give them an offer on the phone and if they’ll agree to the offer and and sign electronically to put down some contract then you go out and visit the property
And tell them what they have chat to fix in the house before you’re gonna give them that price or,
Renegotiate and discount the price according to whatever price you set for it how do you feel about that as a business model.
[18:19] You know, I there’s a lot of people that do it that way. I mean, you know, yeah, a lot of people that do it that way.
Yeah, some of them are. Absolutely. Absolutely. I think it’s dishonest.
Open door knock. All of these so called iBuyers because,
It’s not, you know, it’s not that they’re bringing the used car market simplicity to the housing market,
It’s a it’s a tactic that involves hidden fees and it’s based on dishonesty.
I don’t disagree I don’t disagree however.
However, during COVID people didn’t want me coming out to their home and they would say, well, I’m not even gonna invite you out unless you make me an offer and send me a contract.
[19:11] And I would tell them straight up well hey I can’t make you AA salad offer without seeing the property but if you want me to send you something,
And that’s it. That’s how I’m gonna get in the door and that’s what I’m gonna do,
So, it depends on how you approach it, Roger. I don’t disagree with you. I think these companies can definitely be very dishonest but I think that there is a time and a place in certain scenarios where you do wanna make the offer and send the contract before you go.
I’m also by making the offer not necessarily getting it in writing and signed,
And be you are letting them know that you are an investor and that you have oh interest in paying retail,
So if you have a property with 100 Ks estimate and I say yeah I’m typically buying properties in the neighborhood between 50 and 65 1000 but again these properties typically need a bunch of work,
If your property doesn’t need a bunch of work that I might be able to pay you more but that’s where I’m gonna start and it weeds out anyone that says well it shows 100 1000 online I should be able to get 100 1000 it’s like man your property needs 40 grand with the work.
[20:10] You ain’t getting 100 1000. Hey, David. Just just it’s it’s so interesting to talk with you. We can go on for a while and I can already tell you that I I gotta get you back for another interview sometimes.
In the near future but we gotta take a quick break and then you gotta come back for the,
Random question don’t let’s do it,
My hands were literally shaking as I hand it over the checks for the purchase,
Fast forward 20 years and over 2000 single family homes and I’ve learned a thing or two.
[20:43] And I wanna help you fast track your success while at the same time avoiding some of the mistakes I’ve made along the way.
[20:51] I’ve put together a comprehensive course called Flipstarter which is designed to teach you everything you need to know about finding, funding, fixing, and flipping houses.
I don’t hold anything back I tell you everything you need and I sell this course normally for $999 but for a limited time it’s available to you for $147,
Flipping America. Net slash flip starter check it out sign up now for lifetime access but this is a limited time offer,
It could go away at any time. Flipping America, flipping America. Net slash Flipstarter.
[21:31] Alright, I’m back with David Dodge. He’s David Dodge. Tell us all how to get in touch with you. It’s discount property investor. Com is your website.
And you’ve got a podcast there, some other resources. You got some free courses. If you want to hear more from David, you can go there. It’s discount property investor. Com,
And alright, are you ready, sir? I’m ready. Let’s roll. Alright.
We do not provide these questions in advance but in case you’re listening for the first time Dave is hearing these questions for the first time right now is asking question number one how does the general economy affect your business.
[22:10] Are the general economy affect my business and a lot of ways mostly with the with their interest rates that I’m paying to my my private money lenders, my hard money lenders, and my banks. Now, I do a lot of wholesaling. I do a lot of fix and flip.
But it mostly affects my rental properties when I’m doing long term financing as rates go up that means I pay more interest which means I pay I get paid less in cash flow
When all my bills are paid.
I still feel like a kid and I still feel like I’m growing up. So,
And you know, as I got older and realized that, you know, there’s a lot of doctors out there that are doing great.
But I think I wanted to be a doctor for the wrong reasons. I wanted to be a doctor because I wanted to be rich and not all doctors are rich. Most doctors are pretty terrible money managers to be honest. Yeah. And when I was in college, I met some real estate investors that were,
You know helping people bringing back neighborhoods but also making lots of wealth and I said you know what I can do that too that’s what I decided to do.
If you could have dinner with any person from history who would it be.
[23:24] Oh, man. Any person from history, that’s a tough one. There’s so many, so many options, man. I would have to go with.
Oh, man. I like comedy.
[23:41] That’s no longer with us and it could be any of them. Rob Williams. There you go. That would make for a amazing dinner. It would be very interesting. That’s for sure. That’s right. Alright.
What role this is number five what role.
Oh man, creativity is massive and I have a lot of students that I work with multiple times a week and I always teach them, hey, he he or she who is the most creative in this business, real estate investing is gonna do the most deals
So creativity plays a big part because,
You know, you may have an individual that wants to sell you a property
So, creativity is massive in my business. Okay.
[24:37] Interest rates.
Talk about the impact personal passion has on your life and business.
In my business. In fact, I’ve been at this full time for 8 years and a lot of my friends, they say, Dave, you’re crazy. Why don’t you hire an acquisitions person or outsource that? In fact, I’ve outsourced almost everything else.
Because I just really really like the peer-to-peer interaction. I like going out and helping people
At the closing table I get people giving me hugs and kisses all the time just because they’re so thankful for the fact that I was able to help them out of certain situations
So to me just I just like people and I like being around people and I like talking to people and this business gives me the opportunity and the ability to help people.
Good. I like that. Alright.
[25:45] On average I would say I’m looking ahead about 3 years.
Sometimes longer but most of the time it’s either 1 year or 3 years and the reason is is a lot of my commercial loans have a fixed interest rate for 3 years so that’s why I’m looking at the 3 year outcome.
Interesting. Alright. If someone walked into your life and ask I wanna get started in real estate investing,
What are the top two three things you would tell them to get started.
If you are not screaming from the rooftops what business you’re in.
Nobody’s going to know what business you’re in. So, you know, it all starts with marketing. That’s number one.
So although you do get paid when you sell the money is typically made on the purchase,
That’s why I said earlier when we’re talking about the bar method in the bee is you have to buy properties at deep discounts if you wanna really make a lot of money in this business,
So those are the top two that I tell all my students and happy to share with you all today as well.
No that was number eight number nine understanding it is impossible to accommodate every person’s lifestyle and spending habits with this answer what would you say is the minimum amount of money a person needs in order to retire.
[27:10] Oh, that’s a loaded question, man because you could say, what’s the minimum amount of money somebody needs to have in a nest egg or what’s the minimum amount of money they need to have in passive income monthly,
Right? Two different questions.
[27:30] Your your annual expense. Give or take. So, you know, just kinda buries on your expenses but.
In today’s age, I’d say probably somewhere between two and three 1 million minimum.
[27:50] Somebody that’s alive today to model my business after. Well, you guys aren’t gonna know him. He’s a local St. Louisan.
Yeah he’s an individual that I met at a Rhea Club.
And when I first met him at the time of meeting him he had 150 properties and at the time of me meeting him I had 12,
I’m doing the math and I said man I’m gonna have to be 120 years old by the time I get to 150 properties and he said no David there’s a better way learn the Bur Method,
And all of a sudden I’m sitting here with over 100 properties.
Yeah that’s good and what is his name.
[28:42] David, that’s it. You made it to the gauntlet.
Contact David at discount property investor. Com and he’s got content and courses and information he does some coaching right there,
If you want to reach out to him he he’ll be happy to hear from you and I’ll be happy for you to reach out to him
That’s really good stuff, David and that’s all the time we have for today. My friends, we will be back again in just a couple of days. Be sure that you send your questions to questions at clipping America. Net and we will answer them.
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