How To Start In Real Estate

By 2018-10-05Radio Show

RPRE 166 | Real Estate


You will never learn the things you need to know until you start taking action. Many are still trying to be good at real estate but have not actually gone to the field to put their knowledge to practice are missing out a lot. Get out of that shell and learn how you can truly start in real estate. Discover some client experiences and personal encounter as we show the many ways people have come and overcome the problem of taking action as they move from newbies to experienced. Learn more about properties on listings, from for-rents to selling, buying, and more.

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How To Start In Real Estate

When I go to events and talk to people and they go, “I watched your radio show every day,” it sounds a little bit strange to me. I was flying back from Dallas. Clark took me back to the airport and he said, “I don’t know how long you have been doing radio, but you’ve got a great radio voice.” I said, “That’s not normally what people tell me.” People who know me tell me that I have a face made for radio. They also say I have a voice made for print. I was describing the early days of the radio show were like and they said, “Do you go to the studio?” We built a studio in our office and we’re patched in. They go, “Do you have a producer?” We’ve got an amazing producer. Her name is Nikki. When we first used to go down to the studio and sit there, we’d show up an hour early and we prep for the show. The more you do something, the better you get. Most people want to be good at something before they ever get started and I’m not that guy. I don’t care what other people think. I want people to know how much I care about changing their life. There’s a saying, “Unless people know how much you care, they don’t care how much you know.” I have my brother from another mother, Daniel Gollinger, welcome.

In the early days, you would plan out what you were going to talk about.

We would do research. We would do some market trends stuff. What I realized is it’s less about that. It’s more about the mindset of taking action.

If you have a certain mindset and you care about people a certain way, you can talk about that for ten hours a day. You never went out of topic, which is awesome.

We had somebody come to our weekend retreat who had never done real estate. They came and sat down on the front row. Outside of their own personal residence, they have never bought a house as an investment piece of property. They had come into some money due to inheritance. She came to the weekend event and liked what she saw. She came to a follow-up event, sat down with some people and within two weeks, she bought her first two properties. That’s taking action. When I look at that type of action taking, it’s going to be the first of many this 2019. It’s going to go from two and then three and then four and five. I wouldn’t be surprised if she has fifteen or more properties that are all buying hold rentals. On our team, we have contractors, appraisers and inspectors. We have all the people that you would need in order to go out and do that. Those relationships are already built.

If you have a certain mindset and you care about people a certain way, you can talk about that for ten hours a day. Click To Tweet

What if I don’t know everything about the house?

You would never learn all the things that you need to know until you start taking action. That’s just what it comes down to. I wouldn’t be surprised if I’m buying a house now sometime. That’s the other thing. I want to continue to buy houses because the market is continuing to change. If I stop buying houses, then I feel that I’m learning new. I was talking to our base camp people and explaining that there are three major frauds that are happening across the marketplace right now. One fraud that’s happening is the title fraud. It used to be on MLS. You could see the listing agent’s name. You could see the buyer’s agent name and you’d see the title company name. It’s all listed there and HAR has taken that off.

Our listing agent, Audra, had a client she was represented as a buyer. She was going to put $140,000 down on the house and was going to be financing the difference. In about four or five days, I had a closing. They got an email and it has the logo of the title company. It referenced the buyer’s agent and the seller’s agent. It looked like it was straight from the title company and it said, “Here are the wiring instructions for your closing on this address,” which is all off of HAR. They wired it to that routing number and account number and $140,000 is now gone. He went to the FBI and they said, “We deal with much bigger numbers.”

They need to find out how much bigger people drink in high school. They don’t have time to be chasing that.

That’s one thing you’ve got to be concerned about. The second thing that’s happening is that people are taking properties that are listed for rent, especially when they’re listed on MLS. I know somebody that has a property listed for rent for $2,200 a month. Somebody else will come in and start marketing that property on Craigslist or through signs in the neighborhood. They’ll say, “Property for rent, $800 a month.” When they call like, “I’m just looking to get it,” they’re like, “I don’t want it to be vacant for very long and if you’ll just give me $800 in cash plus $800 down, we’ll sign a lease and move you in.” Now you’ve got a squatter as the landlord and they’ve got $1,600.

RPRE 166 | Real Estate

Real Estate: The bad guys are out there trying to take advantage of unsuspecting people.


I worked with a girl. She is a single mom. She has an autistic child. She didn’t make a lot of money, but she was doing what she had to do. She came across this rent deal that was too good to be true. She locked it up immediately. They couldn’t meet her to give her the keys that day and that whole thing. When she finally goes, she saw everything through pictures. It turns out, somebody was living there. It wasn’t even for rent. You’ve got to be careful with them. What’s the third one?

The third one is similar to the rental thing, but it’s selling the house. We had a property that we scheduled to close. Lo and behold, when our title company was getting ready for the closing and did an updated title commitment, somebody had been sticking signs out in the neighborhood that said, “House for sale.” It was a house that needed a lot of work. Somehow, they got access to the lockbox and to the keys. I don’t know if there’s an agent involved or how they did it exactly but they had the keys and they would show the house on the inside. They’re like, “We need $30,000 cash.” Sure enough, a lady put $500 down to hold it and then they kept hounding her for the other amount. They deeded the property over from somebody to this buyer and filed it with the Harris County Clerk’s Office. They also created a vendor’s lien, which clouded the title. That created a title issue for us.

This buyer of the property lost $500 and could have lost $30,000. She could have been much worse. You’ve got to be careful out there. She was savvy enough when she put the $500 down to hold it. She went the next day to go to the County Tax Office to see if there were any back taxes because she was nervous like, “Once I buy this property for $30,000, maybe there’s $50,000 in taxes.” It was a red flag for her like, “The person that I’m buying this from is not the person that is listed according to the tax office as the owner of the property.” She said, “Isn’t there a way that we can close at a title company?” The guy said, “No.” All I can tell you is the bad guys are out there trying to take advantage of unsuspecting people and there are three major ways that are taking place. I want to be one of the people in the marketplace that is making people aware of what’s going on. I want to be the guy that’s standing in the gap for what’s right and I want to go after these people.

It’s not just because it happened to me. I don’t believe that that’s an isolated incidence. I’m laying out all the facts. We have full-time on staff, private investigators, skip tracers, forensic genealogists and people like that. We get access to data fast. Because of that, we’re going to be working with the Harris County district attorney to make sure that they get involved. I feel that I have a voice in the marketplace that’s going to become known that this is what’s going on. I believe that the Harris County district attorney is going to take action. I believe in them. I’m going to believe the best for them. I believe that this is the tip of the iceberg.

I think a lot of it too. We’re just simply making people aware that it’s going on so you can watch for red signs. It’s the same thing when there are terrorist issues. Just be aware of your surroundings. If you know what’s going on in the marketplace, you may not be able to prevent it 100% of the time. When red flags pop up, you can get out ahead a little bit quicker.

You would never learn all the things that you need to know until you start taking action. Click To Tweet

It’s important to be able to have fun when you do what you do. I have fun helping other people get started in real estate, whether it’s somebody like Mark who just got started. He had been buying two to three houses a year to buy and hold. He’s growing his wealth and income that way. Over a ten-year period of time, he has bought 27 houses with Bravo. That’s more than 99.99999% of people ever do in their entire life in terms of building wealth and income. He joined us September 2018 and his goal was to get to 50 houses. He bought 23 houses in the next year. He added over $1 million in captured equity and then grew his annual income through excess net revenue from the rental income over $150,000. That’s just picking up an extra level of knowledge. I get excited about that.

I also get excited about someone that’s never done real estate. I don’t know how old she is, but she’s a smart lady. She’s a CPA. She knows accounting but doesn’t know much about real estate. She knows all kinds of stuff about accounting and books and like, “How would I find a deal? How would I fund the deal?” She’s got money, so that’s not the issue. Here we are two weeks later, she’s already contracted two houses. They were found for her. The inspector seen the property, the contractor sees the property, the appraiser sees the property. The deal analyzers explain the numbers to her. She’s a numbers person and now she’s going to get captured equity. She’s going to get appreciation. Her wealth is going to grow. She’s going to get cashflow as well. I get excited about that.

That’s what’s awesome about what we do here. I’ve seen so many people that come in with no real estate experience like her. When you see the first one gets done, I start to see that glint in their eyes. It starts to catch the bug and you’ll see the people that have been doing this longer than you have, but they just keep doing the same thing. They have the same year of experience over and over. They’ve been doing it for fifteen years, but they have one year of experience.

Fifteen years of experience is not the same thing as one year of experience fifteen times unless you’re growing in your knowledge base. I used to play competitive racquetball. I’ve got a buddy that I always play with. Unless he’s getting better or I’m getting better, if we’re just playing each other all the time, we’re not getting better. If you and I were playing all the time and let’s say I beat you then I’d say, “Who’s the best guy you’ve ever played? I want to go play with that guy.” I played and if I beat them, I go, “Who’s the best guy you ever played?” I want to keep playing against better and better people. They say that you’re the average of the five people you hang around with the most. Just decide, “Are you going to be okay twenty years from now, living the lifestyle that you think your five buddies are going to be living twenty years from now?”

There’s also a saying that if you’re at the front of the classroom, if you’re the head of the class, you’re in the wrong class. How much can you grow in a classroom where you’re the number one guy?

RPRE 166 | Real Estate

Real Estate: It is better to deal with one person that has one-eighth instead of five people that each have one-fortieth.


We have a question, “If you’re buying a house with a family member living in there, should you take it and after evict him?” I want to evict a family member prior to that person before I close on the house. We’ve done that. I had a situation where a grandfather passed away. The grandson has been living in the house for ten years. The son is the person that was the owner of the house but didn’t live in it. The son gave us a limited power of attorney because the son didn’t want to evict the grandson. I’m like, “I’ll do that on your behalf so that you’re not the bad guy.” The son gave us a limited power of attorney to give us the power to evict him. We went into eviction court and evicted him. We always try and do Cash for Keys. I also offered the guy $2,000 to be out in five days.

He just wouldn’t do that because he had done so much work on the house.

You went to his house with me. We showed up, we knocked on the door. The house is supposed to be vacant. I was told by the son that the house was already vacant. We were up in Dallas and I started taking pictures outside. I take pictures of the front and I’m working my way around the right-hand side and I’m like, “There’s a window open there.” I get a little bit closer and I’m like, “That stinks. That smells BO.” That smelled fresh BO. I’m like, “Is somebody in there?” Sure enough, there he was. I knock on the door. Somebody else come. A couple of his drug buddies and he came out and like, “This house isn’t for sale.” It’s not yours to sell. It was an interesting story. I would not have bought that house with him still in the property. I would have wanted to deal with that situation prior to that.

Now, we have bought properties. We own a piece of property right now and we gave a life estate. There’s an elderly woman and she wants to live out her life in that house. It’s an unusual situation. She’s in her late 80s and she’s a smoker. Not only does she smoke, but she has two of her daughters in this very small 10×10 room and they’re smoking in there with her. She’s way off the chart and she’s also diabetic. She’s got heart disease. She is not a healthy woman, so I gave her a life estate and said, “You sell me your interest.” I have already bought from all of her because she inherited her portion of the property, but she didn’t inherit it by herself. She had the last one-eighth interest in the property. I already owned seven-eighths of the property. She didn’t want to sell because she wanted to pass away there and she had five kids. I’d rather deal with one person that has one-eighth instead of five people that each have one-fortieth. Sure enough, I was able to buy out her part and grant her a life estate. As soon as she passes, then the property is going to be mine.

You don’t have to worry about any claim from her five kids.

Fifteen years of experience is not the same thing as one year of experience fifteen times. Click To Tweet

Not at all because they don’t have anything to inherit because she’s already sold her interest in the property.

You’ve done almost one of everything. When our students are coming across these situations, whether it’s on the active side or the passive side, when we come across these things, then we see something new.

I’d love for callers to call in and try to stump me with something I haven’t seen already.

For those of you that don’t know, this is a call-in show. You mentioned something and it stuck with me. When you got into this business and started seeing some success on the Houston House Buyers side, you realize that people were going to force you to the education side of it because there was no other way because of the quality of education that’s out there and what you’ve done. You’ve always had a heart of service. I know your history and a lot of things like that. I don’t know if you ever knew that it was going to be on this grand of a scale of where we are now and where we’re going. You said that you have to keep buying houses in order to continue to provide the right kind of mentorship. To me, that’s almost a full circle. You were so good at buying houses that people wanted to learn from you. Now, you have so many people that want to learn from you. You have to keep buying houses. They crossed my mind the way that cycled through and that’s a pretty cool thing.

I see so many people that maybe done houses twenty years ago and then they start teaching. Teaching takes over and they don’t dedicate the time necessary or build the systems and processes to do both. I feel that if I were to stop buying houses, then I could still teach this weekend and I could teach next weekend. If I got about six months out, not everything that I would be teaching would be out of date. This is extrapolating or guesstimating, but somewhere between 10% and 20% of what I’d be teaching would be out-of-date.

RPRE 166 | Real Estate

Real Estate: Unsuccessful people talk about other people; successful people talk about ideas.


Every six months that passes, it gets a little bit less and less.

It would be another 10% six months later and another 10%. I think within about two years, I’d be about 50% out-of-date. Some of the core stuff in terms of math and things like that, that wouldn’t be changing, especially on the buy and hold side but the market is changing and the business changes and tools change. I’ll give away a free tool right now. I don’t care if you have IOS or I don’t care if you have Android, but everybody needs to know about this tool and you will thank me later. If you don’t know about LandGlide already, LandGlide is amazing. I was sharing it with Ashley Patten. I was telling her about this property that I bought at 0.5% interest. There’s a guy that’s been researching whether or not what I did was legal. I’m like, “You don’t know me. I won’t do it if it’s not right.” I said, “Why don’t you listen to the show? Just see who I am.” I think who I am comes out. I hope it comes out in the show. He goes, “Every time you call, you’re coming with so much energy and I just feel that you’re at fault.” I’m like, “I take action. I move and I take action quickly. It’s taking you three weeks and you haven’t got your attorney to return your call in three weeks.” By then, I would have gotten in my vehicle. I would have sat myself down in their office and they would not have been able to avoid me in three weeks. I do more in 30 minutes than you do in three weeks.

If your attorney won’t return your call, maybe there’s a relationship problem there.

I was like, “Why don’t you call my attorney? Why don’t you call Ashley Patten?” I told Ashley, “I didn’t give out your personal cell phone.” I go, “Let me tell you the situation.” She goes, “Thanks for not giving it out.” I want to tell a story about something that happened. One of the things that I find hard is finding good contractors. I go, “Are you trying to build a relationship with a contractor or just get a low price?” If your best friend was a contractor and you knew they were going to take care of you price-wise, then you would expect them to do it for free. Assuming they are running a good business, you would trust them and they would trust you. You’ll build a relationship and you wouldn’t worry about the numbers. If they made an extra $500, it’s no big deal. If you don’t have a relationship, you’re always beating somebody up on price because you don’t have an abundance mentality.

I love my personal doctor. He’s about my age. For you who don’t know, I spent my first three years of undergrad pre-med, so I have a strong science background. I was an EMT in college. I was an x-ray tech in college. I took hundreds and hundreds of x-rays. I was a lab tech in college. I’ve done the CBCs and the all that lab work. I’ve done all of those lab tests. I’ve done a urinalysis. I did all the urine test and all that stuff. I’ve done all those things. I’ve set up cultures, I’ve read cultures, I was a phlebotomist. I throw out the blood in college. I worked at Hermann Hospital, the trauma center. I know more about healthcare than the average person does. I work in healthcare that much and I see what most doctors say. Living is great, life is terrible. Being a doctor who makes a good living, it’s hard to make a great life. I’ve talked about that with my doctor. He’s an Aggie for undergrad so we’ve got all these things in common. I’ve been struggling because I needed to get a prescription filled and I go see him every six months just for a well-man check. I expect that my prescriptions are good for the next six months. I call up my pharmacy and say, “I need to get a refill on this.” They go, “You’re out of prescription.”

If you're at the front of the classroom or the head of the class, you're in the wrong class. Click To Tweet

It wasn’t that you use the pills. It was that the prescription wasn’t long enough.

There’s no reason why they don’t renew as many refills I need for the next six months. You know I’m busy. People know that. I picked the phone call. I didn’t talk to the doctor and this is the problem. It took until Thursday for them to finally send the renewal. I thought about what should I do about this. When they still hadn’t done it, I scheduled a doctor’s visit because I thought, “I want to have a meeting with my doctor about not my health, but about his back-office situation.” I like him as a doctor, but doctors are always also businessmen. Most doctors know a ton about medicine, but they don’t know much about running a business because they don’t go to business school too. It’s pretty much specific to medicine. I just decided, “I can whine and complain about it to myself like what most people do.” Everywhere I go, I’m confronted with situations where I feel that I can speak life into other people where I can say, “Don’t do this. Do this other thing instead.”

I was at the airport flying back and I was getting some vegetarian food. The people at the counter were talking about other employees and I’m like, “Unsuccessful people talk about other people and successful people talk about ideas. Quit talking about other people.” I went like, “You have an opportunity to raise up.” I scheduled an appointment to go see my doctor. I close the door. He said. “How are you feeling?” He looked at me and goes, “You shouldn’t be here. You’re a month early. What’s going on?” I go, “I’m not here to talk to you about my health. I’m here to talk to you about your business because I like you as my doctor. Everything that happens in our dialogue about my health, you let me give input about managing my own health. You listen in all of that. You give me advice and I asked questions, but everything that happens on the other side of that door, that whole back office thing, that is not good. It makes me not want to be here.” He goes, “It’s not that I’m not aware of that. Thanks for bringing that to me. I’m aware of it and I’m working on it, but thanks.” I explained the prescription thing from Friday to Thursday. That’s six days.

They’ve got to fill it out, put it in this folder, then it’s got to get picked up and moved over to the other desk. It’s a process.

He goes, “I’m going to give you my cell phone number.” That’s called a relationship. I’m not seeking to go in there angry. I’m seeking from a heart like, “I like you and I want to help you.”

RPRE 166 | Real Estate

Real Estate: You’ve got to know what your time is worth.


You’re not trying to rectify that situation just so it can be easier for you. You care enough about him and his business to know that continuing down that road, it’s going to be detrimental to his future business.

Out of a relationship, he says, “I appreciate that. I value who you are and what you’re trying to do.” He gets it. He said, “I’m going to call you on my phone. Is this your number?” Right there he called me. He pulled out his cell phone. He called me and said, “Log that number. That’s my cell phone number. If you need me, call me.” Can you imagine if you did that thing with your contractors, with your appraisers, with your inspectors or with your wholesalers? Is it going to make an overnight sensation? In the next 30 days, is it going to impact? Imagine if you did that for a year where your real estate investing business would be a year from now, two years from now, three years from now, four years from now. Imagine what your Rolodex would look like if you were doing that long-term.

A lot of the problem is when people get in a real estate deal, all they see is that deal. It’s hard to think of the big picture when you’re looking at the numbers on a specific deal. If you’re given this business just to do one deal, great. Have at it. Get the lowest price you possibly can and you’re done. I have yet to meet somebody that goes, “Just give me one house and I’m good.” Why not plan to do this the right way and save yourself? It’s not just the money. Doing this business the wrong way will kill you. It’s so stressful. There are so many things that go wrong. You don’t have anybody that you can lean on. You don’t trust anybody. Doing all this stuff without having trusting relationships, I can’t imagine living that way.

Are you working on any deals yourself?

I’ve got a couple of deals going. We just did one with one of the students here. We’re locking that up. One of those came from us at Draco. It’s a nice little rental. The cashflow is great.

Can you share the numbers? Do you remember the numbers?

I don’t have it on top of my head. I think if I’m not mistaken, she’ll be all-in for $60,000. I’m talking about all-in a purchase, rehab and everything. I think it rents for $975.

What’s the ARV on the property?

The ARV is $105,000 or $102,000.

She’s capturing $45,000 or $50,000. She’s almost doubling her $60,000 investment. Better than that, she’s going to leverage. She’s not paying cash. How much is she putting down?

I don’t know the answer to that. Looking at the numbers, the rehab is going to be a real quick rehab. She’ll refinance the thing a little out of pocket.

This is the difference between buying stock. If I buy a thousand shares of Exxon stock and it’s trading at $85 a share, then I just spent $85,000 but I’m not buying it at a discount to its value. If I buy a $110,000 house for only $60,000 all in, I’m buying at a huge discount. That’s what investors do. In fact, if you study what Warren Buffett has done, he’s always bought at a discount. In stock market terms, there’s something called book value. The book value is all the assets worth. How much cash do they have on hand? What is the real estate they own? What is the inventory they have? What is brand equity? They have all that. What is the owner equity? What is the book value of the business? Liquidate it, sell it off or convert the assets to cash. If you could buy a discount to that, then you’re investing. Everything else is called speculation.

The issue is that when we’re buying at a discount, we’re buying at a discount to retail. When we’re flipping houses, we’re flipping houses north of 200 in Houston and south of 600 is 95% of our flips and that retail market is still vigorous. For every eight or nine retail owner occupants that buy those houses, there’s one or two that go to investors. The comp is the retail buyer. In the buy and hold space below $170,000, especially from about $60,000 to about $150,000, what most people don’t recognize in the marketplace that happened is that the retail buyers have disappeared. It’s difficult for that price range house to get financing. We can’t buy 70% from the retail marketplace because the retail marketplace is almost nonexistent. In the flip space, it’s eight or nine out of every ten buyers or investors. If Daniel buys a property for $130,000 and he’s an investor, it shows up as a comp but it’s not a retail comp. How do I buy at a discount to that?

If your attorney won't return your call, maybe there's a relationship problem there. Click To Tweet

That’s the problem that we’ve experienced over the last two years. Most investors haven’t seen that it’s investors buying against other investors. If a retail buyer used to buy at $150,000 and I’m an investor, I want to buy 75% of that. I’m buying it for $120,000, but I’m an investor and then you’re an investor. You want to buy it at a discount to $120,000 so you bought it for $100,000 and I want to buy at a discount to the $100,000. That keeps going down and down until finally, cash buyers step in and say, “I don’t care what the price is, I’ll pay full “retail” because retail is only retail when it’s retail buyers doing it.” The reason why what we’re seeing is that investors are buying at 85% or 90% sometimes even 95% and sometimes even 100%. They’re buying at full retail because it’s retail compared to other investors buying.

I don’t think there’s a set rule on that. It’s what is the cashflow? What are your goals on the deal? If it works, then it works.

We have a question, “I have four properties, so I’ve had to connect gas four times. I work a full-time job, so I’ve had to take half days off work just to sit around waiting for these gas connection guys. Do you all wait around for gas to set up? Do you all do gas setups when you all do so many deals?” No, I do not sit around for gas setups. This is one of the things that I harp on a lot. You’ve got to know what your time is worth. I was talking about this when I was up in Dallas with two young ladies there and I said, “What’s your time worth?” They go, “I don’t know.” I go, “How much you want to make a year?” They’re like, “$500,000 a year.”

I don’t know what you do for your full-time job, but if you can hire somebody for a little bit less than what you make at your full-time job to not take that half a day off, doesn’t it make sense to have somebody there for you?

If you make $50 an hour at your job and 40 hours a week is about $2,000 a week, which is about a hundred $100,000 a year. Just use that as the math. $2,000 a week times 50 weeks out of the year is $100,000. For every $100,000 a year that you want to make or you do make, then that’s about $50 an hour. If you’re less than that, if you make $50,000 a year, you’re at about $25 an hour. For me, I’d rather hire somebody and pay him $15 to $20 an hour or maybe $25 an hour or give him $100. It’s worth $100 to me to go have somebody hanging out for four hours. If they come in the first hour, keep $100. That’s what I would do or maybe get a neighbor. Go knock on a couple of neighbors’ doors and say, “Can I leave a sign? Can I pay you $50 or $100? Are you going to be here for the next four hours?” That’s what I would do. There are some out of the box ideas because I would not go spend my time there.

If you like some of these ideas, if you enjoy our show, imagine if we can change your life just by giving you some ideas that you wouldn’t have thought of on your own. Come to our weekend event. If you give me eight hours, two days in a row, you’d get to do that every month that you want to for the next twelve months. If you want to find out more about that, head on over to We want to change lives so that you can leave a legacy for your family. Are you on a path right now for leaving a legacy for your family that will affect your family for generations to come? If you’re not, you owe it to yourself and your family to take a look at what it is you’re doing now and how you could shift that to create a new path for your family. Thanks for being and show, Daniel.

Thanks for having me.

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