Speaker 1: From a sneaker side hustle in high school and learning the value of having your money work for you to a seven figure income and eight figure small multifamily portfolio in three years by age 23. Good grief.
Scott: Hello and welcome to the Bigger Pockets Money podcast. My name is Scott Trench and with me today is Kyle Mast.
Guest: Yes, good grief. This is Bigger Pockets. The goal here is building a million millionaires and not just so we have a bunch of wealthy people running around, but so that we can have really great lives and live on purpose. If you want to get your financial house in order, this is where we need to be because we truly do believe that financial independence is attainable for everyone no matter where or when you’re starting.
Scott: Today’s guest is an example of how massive action taken consistently and starting very early in life can lead to ridiculous outputs in one’s early 20s. This guy does things like scheduling his day from 5:00 a.m. until 8:30 including on weekends, putting 100 hour work weeks in, writing down every single activity set that he does throughout the day and analyzing them for the ones that make money or that can be delegated and are waste of time, and then leveraging those insights to build massive and scalable systems. We’re going to hear about some of Josh’s big lessons that he’s learned on his journey to financial independence at 23 with easily a 5 plus million dollar net worth and the incredible costs that he’s incurred and what he’s given up to achieve that outcome.
Guest: Yeah, we’re going to get into seasons of life with Josh, talking about different times of like really driving after something and and when it’s time to maybe pull back and transition into different things. This is going to be great.
Scott: Josh was featured on the Bigger Pockets real estate podcast episode 749 in April of 2023 after his first year of investing, having accumulated 10 properties worth $1.5 million in asset value. Check out that episode if you want to hear the full back story. Today, we’re excited to hear about what’s happened since that recording. Josh, can you give us a snapshot of where you are at now and how things have progressed since that recording in April of 2023?
Guest 1: For sure, yeah. So, um, as a real estate agent, which is my primary role, um, I scaled from selling around 100 houses a year to around 200. So primarily to out of state investors, looking in Cleveland and Columbus, Ohio. And I continue to buy and burr small multi-families and single families and I scaled up to right around 140, 150 units right now. Um, and then I have a development company where I’ll buy properties, renovate them, sell them as turn key rentals to investors looking for, you know, less headache cash flow. So I do a couple of those a month as well.
Scott: And Josh, remind me of your um age?
Guest 1: Yeah, I’m 23.
Scott: 23, so 23 years old. And then let’s put some context behind that 150, 160 units you mentioned there and this uh volume you’re doing as an agent. Um what is the the income you derive from this agent business and what is the value and equity the asset value and equity value of this rental portfolio you’ve built?
Guest 1: For sure. So my realtor income last year was right around a million and then I flipped a couple properties and that made around 250. Um, so that’s where it was at last year and I’m trying to triple it this year if I can. I made a lot of mistakes with contractors and lost a lot of money on homes. Or didn’t make money on homes that I could have made money on by going through a bunch of stuff. So that should be much stronger this year.
Scott: You paid taxes in 2023 on an income of 1.25 million, give or take.
Guest 1: Yes. Yeah. So and I learned, you know, the importance of cost aggregation, depreciation because the year before my tax bill was actually four times higher on half the amount of income than it was last year.
Scott: Okay. So you had an you had, you know, uh because you are a real estate professional, an agent selling houses, you’re able to take this 1.25 million give or take income from your agent activities and selling properties to investors and your flipping income, which is active income and offset it with losses from this passive investing portfolio. Now, can you walk us through what how give me give us the high-level structure of this 140 units. How many properties are these units housed in? What are they worth and what’s the debt or what’s what’s the debt and equity ratio?
Guest 1: For sure. So it’s around 50 to 60 properties. The market value is right around 15 million. and um, I’m sitting around $4 million personal equity as a result of that. Most of it is owned individually, some of it is owned in a partnership 50/50 with two different people, two different partnerships. But um, yeah, that’s the personal side.
Scott: And tell us about the the operations of this portfolio. What is the rent versus costs that coming in? Is this property is this portfolio cash flowing today?
Guest 1: Yeah, so some a good chunk of them are still being renovated or in the process of being rented out, because they basically were all acquired through the burr method. But, um, everything nets around $150 a door, monthly cash flow, roughly.
Scott: Okay. So and and and is that is that $150 a month monthly cash flow after everything is rented out and your projection or is that what it’s currently bringing in today averaged out across the portfolio?
Guest 1: That’s when everything’s rented, stabilized, assuming, you know, property management, vacancy, capX, maintenance, all that stuff.
Scott: Okay, so for context, we have a cash flow negative current state portfolio that is in process of being stabilized. Is that right?
Guest 1: Yeah, yeah, it’s probably like it’s cash flowing a little bit, but not a ton just cuz I’m still at a large proportion of renovating to stabilize units.
Scott: Okay. and then I’m I will stop peppering you with questions here uh shortly. I just need like two or three more minutes. Um all of this has happened since April 2023. We’re sitting here at’s June 2024. that is 14 months and you had 10 properties. I imagine there were a few more units than that, but um you now have at least 5X, 6X that portfolio. All of this is going to be purchased at today’s interest rates, not 2021 interest rates. Is that correct?
Guest 1: Correct.
Scott: Yeah. My average fixed rates probably 8 and a half, 8.25.
Guest 1: Okay, and these are these are going to be financed with commercial or or, you know, uh balance sheet debt, I presume, not with Fanny May 30-year fixed rate mortgages because you can’t have that many loans on a portfolio like this. Is that correct?
Scott: Yeah, that’s right. And I wasn’t even ble last year either.
Guest 1: Phew. Um thank you for letting me just pepper you with questions about the portfolio um here. This is a really extraordinary outcome. I think it’s our duty to kind of unpack those and provide some context here. Kyle, why don’t you react to that.
Scott: Yeah, I know I think that’s really good. I think it paints a really good picture of where we’re at. Like this is like a ramp up, you know, of like kind of an extraordinary portfolio for a 23-year old. Um so like the to just help me understand a little bit, the renovations that you’re doing, like the capital for that, you know, you’re in the process of doing that. Are you kind of funning that with your growing real estate agent business? Like kind of pouring the money that you’re making. I mean, that’s a that’s a crazy income on the real estate agent business.
Guest: Yeah, it’s a lot of renovation. So, uh, all hard money. I basically buy everything with hard money. The first lender said I couldn’t get any more loans, so I went to the next one, and the same thing happened there. So now I’m private money mostly.
Guest 1: Okay. So, so when you buy a fixer upper essentially to burn it, you’re buying it with hard money and then, uh, you know, renovating it, trying to refinance back out of that. And this, you know, like what you’re bringing in from your your other business, you know, you’ve got your active real estate broker business and you’ve got or agent and you’ve got your your passive active bur strategy business. So the, you know, the million you’re bringing in a year in your uh agent business, is that are you using some of those funds to fund some of the deals also?
Guest: Oh, yeah, yeah.
Guest 1: Okay, yeah.
Scott: And do you do anything else with the money? Is like your entire net worth what we just discussed here in the real estate or do you also have other assets like stocks?
Guest 1: Uh, I just put a big chunk of money in a overfunded whole life insurance policy, which you can talk about if you want. Um, 401k, other retirement, but good, probably 60, 70% is real estate right now.
Scott: Okay, wow. So you’re well on track to have $10 million in net worth within a couple of years here, even if you cease your ordinary income um activities that you’re generating.
Guest 1: Yeah, the goal is a year from today. Yep.
Scott: Okay. And then, you know, one more question here. Let’s walk through the unit economics on like a bread and butter deal. You’ve done 50 deals in the last 14 months. What what is what is a an average one look like? Not a home run, but like one of the ones that’s just fairway for you that’s contributing to this huge portfolio.
Guest 1: Yeah, classic deals, a duplex I’ll buy for 90. I’ll put around 30 to 40,000 into it. It’ll take like two to three months and then I’ll refinance it at around 170, $180,000 valuation. generally at a 75% ARV loan. So it’ll pay back the old loan. Maybe I pull a little cash out, maybe I leave a little cash in. but the is just like churn and burn.
Scott: And this is all happening in Cleveland, Ohio or nearby. Is that right?
Guest 1: Cleveland Ohio, Columbus Ohio. Yeah.
Scott: Wow. So this is pretty extraordinary here. I I have to ask, what what what is the end state here? You have you said a goal of 10 million net worth by the end of the year, but I I want to observe that you have an extraordinary income here. Um, Cleveland’s one of the few markets where I think you can actually get ave like you can just kind of you don’t have to be it’s not quite average. You don’t have to find home run deals to make this strategy work. You can do this with with deals on a continuous basis, um, here. I’m also observing a super highly leveraged portfolio, um, with, you know, I think it was like 70% debt to equity at this point across the the average portfolio. So how do you think about where this is going to end up? Because I could see this marching well past 10 million to 50 or 100 million dollars in wealth in a reasonable period of time, like 10, 15, 20 years, or I could see you letting it deleverage and being done with $15 million in five or or five years on this. So how do you think about it?
Guest 1: Yeah, so I grew up 20 minutes outside of East Cleveland and it’s it needs a lot of help economically, structurally, in many ways. That’s something I really want to attack and I’m trying to build up a bigger name, build up wealth and figure out a way to help that area because it’s it’s in desperate need. and I know some people doing some things there and I’d love to build a fund with what they’re doing on a significant level.
Scott: Awesome. so that’s the mission is build up wealth so you can revitalize a huge chunk of Cleveland.
Guest 1: Yeah, that that’s that’s kind of where it’s coming from. Yep.
Scott: Oh, actually one more question here. Do you intend to raise capital at any point in time or do you not need it as a result of what you’re doing because you you’re generating enough income and have enough private lending sources to allow this thing to roll for some time to come.
Guest 1: If I get into the commercial space heavily where prices are much higher, then I would do that. I would like to syndicate eventually, but I’m just trying to make what I’m currently doing as efficient as I can.
Scott: All right, we have a good understanding of where you’re at, but I’m pretty curious to find out where the money story actually begins and we’ll get into that right after this break.
Scott: All right, welcome back. We are here with Josh Janice.
Guest 1: Okay.
Scott: So you’re able to roll all this without having to raise capital um from that, which by the way, I think is is great. I think that uh, uh 23 year olds raising huge amounts of equity capital and syndicated structures um has not proven to be a winning formula um for many investors. and that this is a much more um, much more it’s highly risky. It’s you are highly leveraged at this point, but you’re only risking your own money for the most part uh in this. And I think you got a great crack at it uh and having this work out to an extraordinary degree over the next couple of years based on what I’ve heard so far. So with that premise set, let’s go and and understand how we got here. So where does your money journey with money begin and how is it compounded this extraordinary outcome at the age of 23?
Guest 1: Yeah, so I I was a basketball player as a kid and I love sneakers and I couldn’t afford any of the ones that I wanted. So I started to look into like reselling shoes. That’s really where it started. I would go to events, try to flip them. I’d go to stores early in the morning, wait in lines and that’s kind of where the journey started. and I learned the, you know, the importance of time management. I could pay somebody 50 bucks or whatever to wait in line instead of me doing it. and then eventually I could have five, 10 people doing it for me at different stores and different cities. um, and it kind of goes from there.
Scott: Walk us through um what what you were able to accumulate during your high school years and how you parlayed that into what happens next.
Guest 1: So when I was at these sneaker shows, kids would make 300, $500 selling one or two pairs of shoes and they would then go buy their own pair for 2, 300 bucks and wipe out most of their profit. And it was hard for me to see that as like scalable. Yeah, it was cool. They were the cool kid walking around now with the shoes that we all wanted, but I knew that, you know, if I could save all the cash that I was making, eventually I could buy all the shoes and it wouldn’t even be an issue. So that’s another thing that I really learned is like save your money early cuz it it it’s very powerful in the beginning once you figure out like a machine to put it into.
Scott: So how much did you save and what would you what did you parlay this into?
Guest 1: Yeah, so I probably saved around $20,000 selling shoes in high school and early college. And now I had this money sitting around. I didn’t really know what to do with it. I wasn’t really wanting to go to college, but I went to the school both my parents went to. Um, I was, you know, doordashing, listening to to audio books trying to learn about real estate and finance because I had a general interest in it. Then I came across the concept of house hacking. um and, you know, while doordashing, I learned even more like the importance of time management because, you know, I could drive 10 miles for $5 or I could drive two miles for $5. And you know, over time, the person driving less is going to win per hour over time. So I was able to learn that. I read probably like a hundred books on my audible account multiple times at, you know, 1.5 times the speed because I’m I’m doing stuff, but if I read it twice, eventually it’ll get into my head. Um, so I had money saved up. I put that together. then I wanted to house hack at Ohio State in Columbus and that’s where I came across bigger pockets for the first time. and um, you know, found an agent that was on there working with investors. I’d hopped on a quick zoom call and um, I ended up going into his office to check things out when I went down there because I switched colleges and I was like, man, there’s like 15 kids in here that owned real estate under the age of 30 and they’re just on the phones, banging phones like it was basically the boiler room. It’s like one room with desks all around, everyone grinding and uh, you know, instead of house hacking I was like, let me try to do this. This looks way more fun than what I was studying in terms of computer science and uh they gave me a list and I started calling uh, you know, 4 to to 8 hours a day depending on the day. sort of taking classes, doordashing at night to pay my bills. and um, you know, I just took my took the money that I had. I was like, all right, I’m just going to call for three months. I don’t really care if I make a dollar. I’m just here to try to learn and see if I can meet any cool people because that’s what they said like if you call, you can eventually meet some people that own and if you’re a young kid that is genuinely interested in and how an investor built their portfolio, you know, these are generally old dudes that are rich, that owned a bunch of real estate, they made it better than their friends. Their family doesn’t really care that much about it. Their friends don’t care because they didn’t do it. But if you’re, you know, a young person you don’t have to be but if you’re generally interested like hey how did you get this property? I see you own this too like you know they’re gonna pour their energy into you. I met a bunch of people that way and it’s just a numbers game too you’re gonna get screamed at yelled at sworn at all that stuff but you know it’s all about trying to find those couple owners that can teach you something and eventually bring your properties to sell because that’s what it eventually turns into so I learned patience through that just consistently calling you know taking notes trying to learn from every single call I mean not really because there’s so many calls that you do but conceptually like what can I do differently how can I approach this differently and um that’s sort of when I got into putting a couple deals together through calling then I made some marketing fees.
Scott: Yeah, walk us through what putting together a deal meant. Is this a wholesale deal?
Guest 1: Yeah, so I I found a four unit the first one for like 400k in an A-class area. I couldn’t afford it at the time to house hack because I was actually calling to to buy a house hack sort of too and uh but I was working under an agent. so I brought him the information. I was like hey this owner wants to sell it here’s his rents here’s the age of the roof furnace high water tank here’s the price. You know, he’s like oh yeah I I probably got a buyer for that. So then he put together an email saying the price. all he did was add 6% commission on top of what the seller wanted. So it’s not really wholesaling, it’s it’s like hybrid wholesaling which is the concept people have said before. Um and uh yeah, that agent brought a buyer to the seller, they presented the offer, the deal closed, I made a marketing fee and it was like a check for like $2,500 or something and I was like, I just called the person and give information over and I got paid what I made almost every month driving for hours.
Scott: How many calls did you make to get to that first 2500?
Guest 1: Yeah, I I was really bad when I started, so it was probably three months of at least 20, 30, 40 plus hours a week before I actually put something together and then that deal took another two months to close.
Scott: Walk me through how you you and I just curious here, you have like two, there’s two concepts that I see are in conflict with what you just said in your mind, right? One is, I made one call and I got 2,500 bucks. And the other is, I spent three months making 30 to 4 hours, 40 hours a week of calls before I got this one deal. Like, how do you how do you marry those two concepts in your head of what what did that was that going through your mind at that point in time and how did you think about that?
Guest 1: Yeah, I mean my my primary goal with calling was honestly just to learn and learn how to talk real estate and learn the space. So I mean, yeah, making money was cool but I was making enough to live and save a little bit of doordashing and I was like if I close a deal, which I felt like it was kind of quick cuz I started like nervous to call cuz I didn’t know what to say. I didn’t know what to do when I got objections. Like I was starting from the floor. and I got that deal closed like, man, if I get good at this, I could probably do one of these a week, like and then eventually that’s what started to happen.
Scott: how did you balance all of this cold calling activity with um having a social life in college?
Guest 1: So, I’m 23, I’ve never drank. I don’t really party. Like that’s just not who I am. So I literally was working, calling, door dashing, seeing my girlfriend and my family and that’s it.
Guest: So this this calling, you you went into it at I was going to say, uh, pull out the same thing Scott did there. You know, like I could see myself going in for like one or two months and being like, this is terrible. Like I’m just calling and getting rejected all the time. I’m not making any headway. But I think maybe the listeners need to hear, you know, Josh was going into this he was going into it to learn. And he had this other side hustle going on. His life is simple at this point. He’s trying to just gain some experience and see if this is something he wants to do and learn how to do it. and then when he does get the hit, he it’s more of a confidence booster rather than like I took me three months to get here. It’s more like, okay, you know, I’ve learned a lot in three months and then something happened and let’s see if we can make it happen faster and more um after that. So I think I think sometimes people you know and the other piece too is making sure that you’re still working hard in other ways too, like to pay the bills. You know, I think sometimes people think they’re just going to go all in on something and then they give up. But you might have been able to go a little bit longer if you were doordashing on the side or you had some other income coming in on the side to kind of carry you a little bit further through that new venture. So I think that’s another thing good that you had going for you.
Scott: Kyle, I think it’s like the first 40 hours gets you by and the next 40 hours gets you ahead.
Guest: Yeah.
Scott: And that’s what I’m hearing here from Josh, right? Like like those 40 hour, 30 to 40 hours a week of cold calling were happening after you paid the bills with your doordash, got your homework done and made all your family and relationship commitments. Is that right, Josh?
Guest 1: Yeah, yeah, it wasn’t the top priority when it started. Um, and I was just I was just trying to be basic about it. I’m going to call and then once I can make more money calling than doordashing, I’ll just stop doordashing. And then if I can figure out a way to make more money doordashing than what my college degree would make, then I would switch to just calling. And the other the other thing I learned too, if I had a really good mentor and another thing I learned is like the the concept of following up just how important that is, like maybe I only closed one deal in the first three months, but I got 50 people that know my name, I know their address, I know their price-ish and they’re gonna sell probably some of them in the next three months or six months or 12 months and as long as I keep my foot in the door, I’ll be that person and that’s what what hap that’s what happens constantly. You it’s like it’s just like a fallover effect and you can’t stop because then you ruin all of your all of the build up that you built in the past.
Scott: Josh, during this time period, um, cash was going into your life during this period, right? You were not shelling out cash in the form of investing into this cold calling or other business activities. Your bank account was growing and increasing your optionality. Is that is that correct?
Guest 1: Yeah, I was probably like saving a little bit of money every month. I was just getting by with Door Dash versus saving like 2, 3,000 when I was doing it fulltime.
Scott: Got it. Okay. And what what did you put it all in cash or did you have investments going at this point? This is your freshman year of college for context, right?
Guest 1: Yeah, yeah for sure. Or sophomore junior year. Um I just kind of had it sitting in cash because I was going to do something with it active. I didn’t know what to do yet.
Scott: Yeah, I I want to call that out too here because, you know, there’s a lot of talk about investing and like, oh, I’m going to I can earn any money on that especially in like 2021, I think when this is happening, 2022. But if you are like Josh and clearly going to do something entrepreneurial or keep trying um along a list of different things there. I think you’re foolish to put it into a 401k, to put it into any type of market investment, to put it into real estate or anything else. You should be keeping it in cash and allowing yourself options and auction options at 21 like you weren’t even 21. You’re 20, 19 or 20 at this point in time. Um with with that that level of ambition and hustle and drive. I mean, you’re just shooting yourself in the foot taking your 10% market return. There’s just it’s so much better to have a 24-year-old with 50k in cold hard cash than 50k in a 401k if if they have your mindset and have are reading all these books and taking all these actions at the same time. So, I don’t know, just an observation I have there. Sounds like that’s what you were doing.
Guest 1: Um all right, well, so so we have our first deal. We have 20 we made 2,500 bucks. There’s a long way to go between 2,500 bucks and the 4 to 7 million that I’m mentally computing for your current net worth. So how do we progress from there um and continue the journey here?
Scott: Yeah, so the start of the new year, start of 2022 is when I got my license and all of those people that I called started to fall over and started to sell. Now, my first 11 deals from January to end of March, early April, all fell out because I was as David Green said, which I didn’t conceptualize, but he did a good job of. I took unqualified buyers and unqualified sellers and I put them in a room together and it never worked in the beginning. And all these things happened and I was like losing my mind, but I was like, I I’m going to have to figure this out because there’s 15 people around me that have and thousands of others around. So every deal that fell out, I was like, all right, what can I do differently? And I kind of do that to the extreme you know, it’s you got to be cautious about it, but if you can always adjust what you’re doing, you can have control as much as you can. So like with sellers, if they don’t know enough about their property, if they like say, oh, the rent could be this or the roof could be this, like, they’re probably not as invested in making a move as you are on your end trying to get the sale done. And then the buyer, like if they’re not pre-approved or they don’t have a clear buy box. if they haven’t run their numbers on their end. Like all of those things can can cause issues down the road. So it’s literally just, all right, this happened this deal. Let’s not make sure let’s make sure it doesn’t happen again over and over. and then the first deal closed in April of 22 and um I think I closed like six deals that month and then like 10 the next month or close to it and it all just was rolling and I basically just didn’t stop.
Guest 1: Josh, when did you get licensed as an agent?
Scott: Yeah, the beginning of that year, January 22.
Guest 1: Okay, so you didn’t really close, you didn’t make any money really until you got licensed as an agent. The whole wholesaling, cold calling didn’t really contribute to your income until you were licensed and doing it basically through the MLS and and taking brokerage fees, I guess.
Scott: Yeah.
Guest 1: Um did you graduate college?
Scott: No. So, I was 70% of the way there probably.
Guest 1: Uh, in your case, that would have been foolish, I think to finish that play out. What what what did your parents think about all this? You you mentioned, I think that’s a big thing here. You said earlier on that you, you know, you you weren’t sure about college, but your parents, you went to the school your parents wanted to. It sounds like that was Ohio State. Um, uh, I hear they have a a mediocre football team, at least this last year. How did you get into and then out of college and how what was that dynamic like with your parents who it seems like were, you know, are always an influence on someone prior to college graduation years typically.
Scott: Of course, and I look up to my parents heavily in many ways. Like it it wasn’t easy. Um I think the main thing that really got me over it was like, hey mom and dad, I made the last 90 days what I would make if I finished my degree, right? And I’m just getting started. You know, I had I some people had some doubts like, oh, you had one good month or two good months. Let’s see, right? And my motivation was like, I’m going to have that every single month. There’s like I I have to. I got to keep this up. And that’s kind of what allowed me to stop doing college and have it be relatively smooth.
Guest 1: All right, we want to hear what your first year looked like from an income perspective right after this quick ad break. For those listening, while we’re out, please go search for bigger pockets money in your podcast app and follow us so that you can get the latest stories like Josh’s. And, of course, our eternal gratitude.
Scott: All right, welcome back. We heard the tipping point. Let’s get into the outcome.
Guest: So what was your when did you transition? So now you’re you’re starting to have some income as an agent and and started to make some stuff. Like, what what are you making in that first year? Like, what what’s your income look like the first year as an agent?
Scott: Yeah, so my first deal closed in in April and I finished out the year at right around 600,000. So I kind of got it rolling pretty quick. Um and I bought a couple deals and made some mistakes with contractors.
Guest 1: Your first deal was in what did you say April? And you finished the year with $600,000 in commissions to you like net to you?
Guest: Correct. Net. Yeah.
Guest 1: That’s not a bad first year. Yeah, that that’s pretty that’s pretty good. Yeah.
Guest: Yeah.
Guest 1: So and and you’re journe this income by getting listings.
Scott: Like I’ll have a buyer that wants a turn key duplex and I’m going to go find it off market and I’ll be the only agent involved and I’ll just connect them and I’ll try to make 6%. That’s the core of the business is like try to be the only agent involved. Um not every deal is like that, but that’s the ideal. You get to control the most. I get to represent the buyer and be aggressive to the seller like.
Guest 1: And what’s the average price on these deals?
Scott: Uh, I was selling more Columbus then, so probably like 200 ish. now I’m more Cleveland so probably like 140, 150.
Guest 1: So how many transactions? I need to do the math here to make $600,000 in net commissions at 6% on a $200,000.
Scott: Yeah, I think my average commission was like 4% something like that. but it was around 120 transactions, uh 17 million gross.
Guest 1: Did you have any staff or was this you as an individual?
Scott: This was me and then one virtual assistant and then a second virtual assistant towards the end of the year. And I still run the same business with the same setup.
Guest 1: That’s unbelievable.
Guest: Yeah, that’s unbelievable. Like I I’m kind of like my mouth I’m just trying to like pick it up like be like what what just even happened here. Um, so where are you sourcing your you you said you’re connecting buyers to sellers off market deals. So you have a buyer looking for so where are you sourcing your buyers from to to I mean, people always want to find the deals, but where are you finding like these specific buyers that you want to source?
Scott: So as I was calling, I was learning things and I just started posting on bigger pockets. So I found a ton on bigger pockets, uh LinkedIn, Facebook, you can actually find a decent amount of buyers calling if you approach it the correct way. Um it was just a mixture of that and then almost all the deals I found were from cold calling or MLS or some pocket listings and just trying to connect the dots like I have a notepad. I write down everything I do every single day. especially in the beginning, like every little thing. I don’t like, I send an email to a title agent about this. I texted this person this. Like it should be like a hundred plus things. and like at the end of the day, you want to look at it and it’s like, what did I repeat? What can I delegate? What makes me money, what doesn’t make me money and like write out procedures for everything because that’s what allowed me to scale quickly and maintain it with little staff as I think those processes.
Guest 1: I think something else be mentioned there, the neat thing you mentioned your calls and sometimes in the productivity world, if you can um use the same action for multiple outcomes. So you were you you kind of glossed over it, but you said something about if you call in the right way, you can you can find buyers too. You know, you’re calling for like sellers, but you might find buyers as well. So, you know, you were you were now like basically getting twice the benefit of your calls as opposed you connecting these buyers and sellers. So that’s, yeah, I think that’s I think that’s a neat concept for people to think about when you’re when you’re starting a side hustle, sometimes there’s ways to make it easier that you’re not even not even looking at it. Scott, you had something to say.
Guest: Well, I I just going to say, I I love that approach for throwing everything down. Um I don’t I I did that a lot more five years ago than I do today and definitely should get back into it. Um I just love the analysis like on on an ongoing basis. I want to ask if this is a once you gr after you graduate, is this going to 40 hours, 60 hours, 80 hours? Is this an all consuming obsession essentially with building the business in the first year? where on that scale are you in terms of the effort you’re putting in to generate this $600,000 in income and begin building the real estate portfolio.
Scott: Yeah, I mean, as soon as I stopped taking classes a little bit before before the end of junior year, like this was 100 hours a week or stinking near close. Like I would start working at 5:00 a.m. and I’d leave the office at 8:00 p.m. very frequently. and then I would go to the gym a couple days a week. but and then Saturdays and Sunday mornings would be about building the business, taking the notes and implementing different procedures and then Monday through Friday would be working in the business. So one of my best friends is a navy seal and him and I worked out in high school and he’s crazy and I learned a lot of really cool things from him and I just kind of what we did into this.
Guest 1: So this has been a natural extension of what you were doing in high school essentially the the uh in terms of the amount of output of effort that is going into advancing your goals. Nothing’s changed. It’s just been a it’s been more directed, more efficiently to the accumulation of money. but is that is that a way to interpret what you said?
Scott: Oh, yeah, for sure. Like, uh yeah, and I would go swimming in a freezing lake at 5:30 in the morning before school or do pull-ups, we would do murfs, we would do all these things. and then we work out after school again and I’d work on basketball or whatever. I just now it’s just real estate.
Guest 1: All right, so so, you know, this is a really interesting I I I love what we’ve heard here and and I and I and I think it’s not a stretch to understand, hey, that this system has now spit out a compounding rate of return in terms of total income and then allowed you numerous investment opportunities. You can either once you find a deal, you can either sell it, um or to one of your many many contacts in your buyer’s list or buy it and turn it into the, you know, a wealth building machine through your real estate investing and rehabbing business here. So it’s not hard to understand how that kind of has snowballed at the highest level, although, you know, I’d love to cover that at great detail at some future point here. Walk me through, you know, when we talk on Bigger Pockets Money, I would say that the vast majority of listeners here are folks working at W2 or have a small business that is nowhere near as explosive from an income perspective as yours. And, you know, how how do we translate your life lessons here into something that, you know, someone maybe with without the the drive to do a 100 hour work weeks and relentlessly optimize every single part of their life and, you know, those types of things. How do we translate that into something that someone who doesn’t want to to rebuild Cleveland from an ambition standpoint can take away as a message in the in the wealth building journey.
Scott: Yeah, if if if you already have a cash-flowing business or a W2 where money’s coming in, and maybe you have the desire to leave, right? Don’t leave and then invest. Like stay, cut your living expenses down as cheap as you can. I still live very cheap compared to what I make, like that’s never changed, never will, like and use all the money you have on the side to to invest.
Guest 1: Walk me through that point real quick to interrupt. I I see your background here, right? And this is not, this is not the the home of a $1.2 million per-year income generator, right? That one would expect. I mean, you you you would probably be able to pay off this home entirely or buy it in cash three times in a year, would be my guess based on the background we’re looking at there. Um remind me and I and I know you said it, you want to rebuild Cleveland essentially here as your as your motivation. But remind me like is there an intent to harvest any of this income to drive your lifestyle at some point or is that so far off in your mind that it’s it just wouldn’t it just wouldn’t be efficient for you?
Scott: I bought two cars that I liked in the last year and it’s fun.
Guest 1: What what are the cars? What are the cars?
Scott: Uh I got a G Wagon last year. and then I just got a Porsche GT3. So I got two cool cars. And they’re fun, but like that’s not the motivating like drive at all. It’s like I get them to look in my garage and be like, I cannot slack, otherwise I got to give the car back. It’s more like a standard setter, I guess, but um yeah, I was I was making 100k a month in a $900 a month apartment driving a Honda Civic. like and I was fine, you know, two years ago.
Guest 1: Don’t sorry to interrupt interrupt you there. More more you’re you’re you’re conveying lessons conveying, hey, help help me understand how, you know, I I think I think what’s what I’m hearing here and I’m I’m and I’m reacting to is, yeah, it would have been great if I’d done this at 23, but let me ask you some hard questions here. You know, do you regret not doing any of the partying, um, or some of the other social activities that maybe some peers were doing at Ohio State at that point in time, or, you know, how how do you what it like I’m trying to understand the costs associated with this incredible outcome that have come in place here. And can I pick up nuggets from you if I’m not willing or able to commit the 100 hours of just pure intensity that you’ve sustained now for 7, 8 years to get to this point. Does that make sense?
Scott: For sure, there are definitely costs. This is not all upside. I mean, you know, I had to sacrifice a lot of family time. Like I literally didn’t see any friends for like two years. Like nothing, zero. Um, you know, I guess parties would have been fun. I mean, I, you know, here and there, like in this journey, you do get lonely, you know, it’s 8:30 on a Friday and I’m tired and I just work all day every day, but I have these things that I’m trying to implement so that I don’t have to do this again. So I’m just going to sacrifice that night and then I’ll sacrifice the next night. Like, you know, I’d rather do it now or be really intense for a couple of years and then relax for 50 years to some degree, taking advantage of leverage of money and labor. So, um, but yeah, there’s definitely emotional sacrifice that you have to deal with along the way. It’s not all upside.
Guest 1: Josh, I I would I would really like you, could you reach out when you do take that foot off the gas and come back on the show because that that’s going to be like that’s a super interesting. like I think that’s one of the things that’s coming to me from this is like I have no doubt like anything could happen. You could lose it all with all this, but like this this is consistent with what I would expect to hear from the extraordinary numbers you put you talked about and posted at the beginning of the show here as the cost to achieving that and I just wonder like I’m I’m curious about when you will take that foot off the gas and what life will look like at that point because of the ridiculous amount of options you’re going to have at 25 and then 27 and how that’s going to explode for you. And I’m just super curious. I don’t I don’t know, I don’t I don’t know very many people like you. I haven’t I haven’t talked with Mark Cuban, you know, or uh, um, you know, uh, Mr. Wonderful or the other Shark Tank people that that probably went through some sort of parallel journey here in tech or whatever to get to this, but I’m I’m just curious like what it will take for you to feel like you can take your foot off the gas and ease up. um and what you’re going to do at that time. I don’t know if you’ve thought about that.
Scott: No, that that’s fair. What what I’m trying to achieve is like the the conflict is I can still grow my dollar per hour by working harder in terms of volume on a daily basis. And I have not mastered anywhere near people or teams or other forms of leverage or media, like I haven’t gotten to that point. I’m starting there, but that’s where I have to get to in order to not have my my physical hours working on something be so valuable. So that’s just the conflict of being an operator, switching over to an owner, it seems.
Guest 1: Yeah, absolutely. But I will tell you this, like I I I I run Bigger Pockets with all this, right? And every day at 6:00, 6:30, whatever it is, right? I stop I stop my work. and there’s always like 100 grand activity that like has to wait till tomorrow or a million dollar decision needs to go there because like, you know, yeah, there’s other things there. and and it’s like that that um, I don’t know, I’m empathizing with what you went through here because the same thing was going on for me in the early stages of my wealth building journey. I was nowhere near as successful as you are at this age or three or four years into my journey, but I read a hundred books, I house hacked with all my free time. I would wake up early, read a book, go to work, after work, write for the Bigger Pockets blog, research my next real estate investment or try my next side hustle and I sustained that for a period of five years um or whatever. If I started at 20, um and and and and you know, really actually ground it out the way that you did in the way I admire. I, you know, a little bit different. But I’m just curious, you know, I it’s just a philosophical thing around there’s always more to chase on it and when you have people involved and and employees and those types of things, the leverage compounds even further and uh that’s that was a hard one for me thinking about as a CEO. It was like, dude, yeah, it’s 6:00 and like, yes, I could make $50 more thousand dollars if I work through the night on this one, but should I, can I? Is that sustainable? So anyways, something to think about and I think this is I don’t know if I’m if I’m really dancing around it. I just haven’t explored it as much with the people on the show about what this cost of the success that you’re experiencing is. And I think that’s it. It’s that it’s that there’s always there’s the opportunity cost of your time is so high now that it presents conflict with the other parts of life.
Guest: Yeah, for no, it totally does and you know, I love the gym and working out and being physically fit and I had to sacrifice that. I mean, I wasn’t like getting overweight necessarily but I was just not, you know, making it a daily part of my life and now I am again and I I’ve implemented that and it was a struggle because I’m like, man, I could do something else for make money or whatever, but you know, once you get over the hump on one thing, then it gets comfortable and then you can go on to the next. go on the next.
Scott: I was just gonna say, I and hearing you both talk about your journeys, this is this is just really really interesting. Hopefully our listeners are really getting a lot out of this. I am. so if no one is getting anything out of it, I’m I’m enjoying it. Um but like this I I I’m hearing seasons of life, you know, and I think it would be really cool to have you back on Josh down the road because from what I’ve seen with different investors, different business owners, especially, um there is a grind for a season. And the people that come out later in life with fewer regrets usually are better at determining when seasons change. And I and I’ve seen that again and again. So I I would and this is I I feel like I’m like a fatherly figure like talking to you right now or something. This is not, you know, you you’re way more successful.
Guest: This is what I was getting at Kyle. This is perfect. Thank you. like this is what I’m trying to wrap my head around is like total aberration and this will not continue for 30 more years.
Scott: Well yes that’s it can and people do continue it for 30 years but they pay a higher price. I think a season there are seasons for everything. I mean there’s a season like in families there’s a season for young kids, there’s a season for just busting your tail building a business but if you do it till you’re 35 you’re gonna have a heart attack. I mean there’s just so like these are I I’m listening to this and I it’s so cool that the season that you’re in is just like a crush it season. But I think what you’re gonna run into is that you have such a drive and and intellect honestly of like analyzing and reanalyzing for optimization that you’re gonna you’re gonna have to at some point figure out when does the season change where that optimization is not the goal anymore. Like what is you know when you you know you have you you’ve mentioned a big why here revitalizing uh part of your city. So like where where does that transition take place? When does that transition take place? And you always have to, there’s this opportunity cost concept, there are always trade-offs. So you will always to move into another season, you will always give something up and it but it just has to be better, you know, you you just have to remember that you’re giving up something for something better. but I I’m this is just like amazing hearing what you’ve got going on but that’s why what you said Scott having you back on in like three to five years and be like okay are you about ready to have a heart attack or have you figured out like what’s what you know, is the season the same or is the season change. you know, like I think that’ll be really interesting because you’ve got and I think people listening to this podcast they don’t have to be going a hundred hours a week to be relating to this. Like they they might need to grind something for a bit but but be ready to shift seasons before you lose your marriage, your kids or your, you know, or your life. to get a little serious on it. Um but yeah, this is just yeah, let’s move on to the next thing Scott here. but I just want to like kind of wrap that into that season’s thought there.
Guest: I I just think that is the the main thing because again like Josh we we don’t technically talk to folks like yourself on bigger pockets money because you know bigger pockets money is really geared towards folks trying to accumulate maybe a few million dollars and call it a day and and and retire and and and reap the rewards of that, right? Like I think what most people want who are listening to bigger pockets money is I want to walk my dog on Tuesday afternoon at 2 o’clock and not have to worry about a work call or I want to, you know, like travel through Europe for six months and hang out or I just want to like chill at home and you know, homeschool my kid. Um or whatever. and and I think that that’s yours is a yours is a completely different take than what we’re used to on bigger pockets money. Obviously the real estate podcast has much many more ambitious entrepreneurs like yourself on on there. And I you know, I I I’m glad that we explored this concept because I think that’s the story here. The story is, yes, you are a super talented, genius level, ruthless optimizer with your time making a huge impact, making tons of people better off, sellers, buyers, connecting the dots. Um, uh housing, you have a big goal in all this and the cost is 100 hours a week sustained for four or five years. Um and you know, I I think that it’s just really illuminating discussion here. So, thank you.
Scott: Yeah. I I know that if I worked 100 hours every week for the next 10 years, I would probably die to a heart attack or stress or something. No, I’m not no, I’ve I’ve scaled it back. I’m probably 60, 70 maybe, something like that. But like one of the biggest joys in my process is honestly like teaching people around me to do as much of what I’m doing as they’re willing and wanting to do. So like one of my goals was to help five people make $100,000 this year. I think I’m going to hit it. So, you know, and then try to double it next year. like and then see those people help other people and that’s been one of the coolest things in this whole process, honestly.
Guest 1: Awesome, man. Well, where can people find out more about you, Josh?
Scott: You can connect with me on Bigger Pockets or message me. It’s Josh Janice on both and I’ll respond.
Guest 1: Do you need to do a better job on social media? I don’t feel like your fine your time on social media is not worth it. like just it’s just a black hole anyways. just keep doing what you’re doing.
Guest: Yeah I I think you’re doing just fine here. Well, Josh, thank you so much for coming on the Bigger Pockets Money podcast. Thank you for taking us down this philosophical uh rabbit hole here with that’s not where I think I was expecting it to go. Um but your journey is just so extraordinary and poses some really interesting high-level questions here. Congratulations on all your success and the huge optionality of created for yourself. An and yeah, come back on um when you’ve made when you’re entering the next season of life. I’m really I’m really curious to see what that looks like for you. I could see it going in so many ways and you’re going to have such good choices um for whatever that looks like.
Scott: I appreciate it. Thanks for having me on, Scott.
Guest 1: Pleasure, Josh.
Scott: Thank you, Kyle.
Guest: All right, that was Josh Janice. Kyle, what’d you think?
Scott: I mean, I’m, I I’m just kind of speechless, you know, this is this was just a lot of fun. I I loved how you kind of grilled him on on his financials at the beginning to just dive in and make sure that we’re talking to someone who’s legit and he is, like this guy is just unassuming, like hands down, get it done, analyze what I did, redo it better, and just rinse and repeat. I mean, it just it this was really neat to to talk with Josh.
Guest: Yeah, I I’ve I’ve learned over the years to be a lot more skeptical about these kinds of claims, you know, $5 million by age 23, $4 million in equity in that 60% of his portfolio. that’s a $5, $6 million implied net worth by age 23. You know, but that’s why I went out, you know, and and we’ve learned to press on that because we’ve had a couple of folks over the years that haven’t been all that on there, but and, you know, like we we haven’t like gone in and like seeing a financial statement from Josh, but I think that he passed you and my sniff test of telling the truth about what’s going on here and I I believed him and as a bonus and just a little, you know, dig here at certain individuals, he’s not selling a $50,000 mentorship or a mastermind or whatever class around this. He’s just hustling with his business and trying to sell buy and sell real estate and accumulate as much of it for himself as possible. So, I I believe him and trust the guy. Maybe I’m wrong on that. Um, and we’ll find something out. But, congratulations to Josh. I think he’s built a wonderful business and a awesome thing. And I think what was even cooler about today’s show is understanding the cost. And as much as I admire Josh and what he’s achieved here, Kyle, I’m not sure I’d trade places with him uh in some of those things because of what he’s given up to attain it. And I think that’s an awesome lesson from this. and that’s not a dig on him at all. It’s it’s a compliment and and and an appreciation and and I and I admire what he’s done, but I also recognize the sacrifice, you know, and not having college, not seeing friends and family, and putting in those work weeks to really bust it out and get to this position. He’s gonna have way better options than anybody I know, uh, by the by the time he’s 30 in life as a result of that. and so he’s he’s super successful. But I think that was a super interesting and powerful takeaway from the conversation today.
Scott: Yeah, for sure. That that discussion on tradeoffs, it was just so good. I think that’s something everyone needs to think about. We all live different lives. We all have different priorities. We all have different stages of our lives. and what what works for Josh might not work for Scott or me, but it might. and it might in a different season or the same season, but that that was a really neat thing to dive into what he had chose to trade off for his vision of the future. and I think that was pretty neat.
Guest: Yeah, and and I think another thing is, any if anybody’s coming out there and saying, here’s a hack on how to do this. Here’s how to here’s how to get to Josh’s outcome without the cost that he put in, the things that he’s given up, you should run away. Like that’s not how the world works, that’s not how personal finance works, that’s not how outlier success like what Josh is has seen here, um, works. It is an all out commitment sustained for multiple years. And if you go that all out, and if you’re smart and work if you work that hard and that smart, maybe you got a crack at something like that, that was Josh, what Josh has had, but not not without that combination.
Scott: All right, should we get out of here?
Guest: Yep, let’s jump on out.
Scott: All right, from this episode of the Bigger Pockets Money podcast, he is Kyle Mast and I’m Scott Trench. saying, peace out, girl scout.
Mindy: Bigger Pockets money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Kason, copywriting by Calico content, postproduction by Exodus Media and Chris Michin. Thanks for listening.
