Brian Doyle, from Minneapolis, MN and has grown his portfolio to 65 units all while having a full-time job. He will talk about how to choose the right full-time job to grow your portfolio, how he finds deals, and why having a full-time job is an advantage, not a disadvantage. Brian is currently on the board of the 2000 member Minnesota Multi-Housing Association and he is past president of the Minnesota Real Estate Exchangors, he is married with three kids and races sailboats on the weekends.
Brian G Doyle Real Estate Background:
- Works full-time with Marietta Drapery and Window Coverings while investing part-time
- 23 years of real estate experience
- Portfolio consists of 65 units
- Based in Minneapolis, MN
- Say hi to him at: Brian@doylepropertygroup.com
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Best Ever Tweet:
“You’ve gotta provide more value than what people expect” – Brian Doyle
Theo Hicks: Hello Best Ever listeners and welcome to the best real estate investing advice ever show. I’m Theo Hicks, and today we’ll be speaking with Brian Doyle. Brian, how are you doing today?
Brian Doyle: I’m so good and super glad to talk to you, Theo.
Theo Hicks: Absolutely. Thanks for joining us. Looking forward to our conversation as well. A little bit about Bryan – he works full time with Marietta Drapery and Window Coverings while investing part-time. He has 23 years of real estate experience and his portfolio consists of 65 units. He is based in Minneapolis, Minnesota, and you can say hi to him at his email address which is email@example.com. So Brian do you mind telling us some more about your background and what you’re focused on today?
Brian Doyle: First of all, thanks for having me, Theo. I’ve been a fan of you guys and the show for a while, so it’s an honor to be here. If you go way back, I think I learned a long time ago that it’s super fun to be in a position to be able to provide your own value and create value on your own. And then I learned that in cub scouts, believe it or not; that was a long time ago. They told me in cub scouts, they said, “Hey, whoever sells the most popcorn for our fundraiser will win a bike.” And I literally remember the moment they said that I stood up or at least perked up, and I said, “Whoa, what did you guys just say? Whoever sells the most popcorn can win a bike?” I never in my life had an opportunity to trade something, which was my time, for something of value. And I told everybody “I’m going to win that bike”, and every single person I looked at, and every single person I talked to, including all the leaders, and all the other cub scout people, they were like, “Whoa, there’s a lot of people in Colorado Springs. There’s a lot of competition. You don’t want to set your expectations too high because you don’t want to be disappointed”, and all this stuff. And I literally said “I’m going to win that bike.”
I went out every day for 3 weeks and I [unintelligible [00:05:07].20] the neighborhood from right after school to 9 o’clock at night. And I won the bike, and it was awesome. It was the first time in my life that I’d really set a goal and accomplished the goal, which was fantastic.
So I learned from that moment I was like, “I never want to work at a job where I punch a clock that isn’t commission-based.” And that was super fun. So I transitioned from there, I obviously grew up, I went to college… I really liked the idea of Domino’s Pizza. Domino’s Pizza, they’ve got thousands of stores worldwide, and they started with two brothers. One brother wanted to get out of the pizza business after they owned their first store, and the other brother bought him out and gave him the company car, which was a VW Bug. I think that was an interesting story, because basically this guy who wanted immediate results got this Volkswagon Bug, and the other guy who had a little bit more foresight, now he owns thousands of stores across countries. It’s fantastic. So I liked that, I like the long game of things.
I did buy a house in college, and while I owned that house I moved to Vail as a ski instructor, and I really learned at that point the passive versus active income. Pretty cool to be a ski instructor out in Colorado and have a property in Duluth, Minnesota that I still make an income off of. So that was pretty fun.
And then after that, I came back and I bought another house from my wife’s landlord. And I was sitting over there one day and the landlord comes over, and the bathroom is leaking into the kitchen, and he’s just swearing up a storm, and he hates this house… He cussed and said, “I hate my life.”
I went over there and I said, “Hey, dude. I want to buy this from you.” I was only about 21. And the guy is like, “Yeah, man. I’d be happy to sell it to you.” And I bought that house and I made $9,000 per year basically off that house of net income. And $9,000 per year is kind of a magic number if you’d ask me, Theo. And the reason is it’s because there are about 9,000 hours in one year.
So if you can find a property that makes $9,000 a year, you’re making about a dollar an hour. Which doesn’t sound like a lot, right? But the fact that I can go to bed and wake up $8 richer every single night is just something that blows my mind. And that was one investment 20 years ago, so it’s just fantastic. So anyway $9,000 is super fun.
Warren Buffet says you got to find a way to make money in your sleep, or you are going to work until you die. And that was that deal.
So kind of speed forward a little bit, I got a job, got laid off from that job, got another job, and I still have that last job. And the reason — I think probably a lot of listeners have jobs, and a couple of things you’ve got to ask yourself. You’ve got to say, number one, “Is my job flexible in time?” If your job is flexible in time, it’s a fantastic job to have a side real estate business. The only thing that you’ve got to focus on is, “Does your job allow you to work with other people in the real estate business?”
So in my job, I sell blinds to apartment buildings, and I sell drapes to hotels. Well, what a great opportunity, and I sought that job out specifically because it worked in the real estate industry. If you have a job right now that isn’t in the real estate industry, you might consider becoming a vendor or something else in the real estate industry with which is what you might finally want to do… Because I get the chance to talk to other apartment owners all day every day about their blinds. So, it’s a really helpful thing.
So speed forward from all that, now I’ve got 65 units. Most of those are condo’s, I have about 50 condos. The reason that condos are interesting, if somebody is thinking about buying a condo, it’s nice because you only handle the stuff that’s inside your unit. So you don’t have to handle all the other stuff, which is fantastic. It’s a hard way to grow your business, because every single deal you’re negotiating a new deal. So that’s kind of crazy. It takes a long time to grow to 65 units, because you got to negotiate 65 different contracts. And then I also have one little restaurant that I own, that I lease out the restaurant building. And I’m a limited partner in about 500 units, which is about 8 other deals, which is another good way to get involved with real estate if you’re not in it. So that’s a big quick and dirty where I’m at right now Theo.
Theo Hicks: Thanks for sharing that, and I like your comments about getting a job in real estate; a good way to get started in real estate is to transition from whatever job you’re doing now to a full-time job in real estate. So thanks for sharing that.
When it comes to flexibility, so the other aspect is, “Is it flexible in time?” Do you mind elaborating on that a little bit? Do you mean that you’re not working 9 to 5, or you are able to work less than the traditional 40 hours per week? What do you mean by a job that is flexible in time?
Brian Doyle: Well I should step back for one second. I think what you need to do in any job, or any sales transaction or anything, even landlord-tenant, you need to provide more value than that person expects. If my job expects me to, in my job, sell a million dollars a year worth of blinds, I’m going to out and I’m going to sell 4 million dollars a year worth of blinds. And the reason I’m going to do that is number one, I’m probably on commission-based, number two is that I want to provide more value than they expect.
And when you do that, you create a situation where that company is willing to let you do your own thing. I was a sales manager for that company, I’m no longer a sales manager recently because there’s just a lot of stuff… But when I was about 30 I was a sales manager – I’m 42 now – and you always micro-manage the people at the bottom, right? The people at the top, you don’t have time for; you’re too busy managing the micro people at the bottom. So if I’m on the top as a salesperson, or accountant, or whatever I’m doing, or property manager, or leasing agent, I’m going to give that person flexibility because they provide so much value to my organization, right?
So I think you create flexibility in your job, not because you work less, but because, hey, if I need to run out and go look at an apartment building for sale, it’s no big deal because they know I’m going to get my stuff done. So that’s what I mean by flexibility, I guess.
Theo Hicks: So essentially get a job, work really hard on the job so that your boss isn’t constantly asking what you’re doing, until you spend time doing real estate on the side, basically.
Brian Doyle: Exactly, yeah.
Theo Hicks: Okay, perfect. So you say that you own a restaurant, you do condos, and then you invest in eight, I’m assuming, apartment deals as an LP. Of those 3 which is your main focus? Which part of your business do you focus on the most?
Brian Doyle: Condo deals.
Theo Hicks: The condo deals? Maybe walk us through what types of things you’re doing outside of work in order to grow that kind of business?
Brian Doyle: Well, in 2003 I bought a condo for $120,000 from a friend of mine. I bought it cash, I didn’t have all the cash for it, I only had about half the cash, so I asked my dad, I said, “Hey dad, will you give me $50,000 so I can buy this condo?” So he became a 50/50 part-owner with me on that. And what happened then is I bought a fourplex, and then I sold it, and all this other stuff in 2005. And then 2008 comes around, and that same condo that I bought for $120,000 was now worth about $45,000. Most people say that’s a terrible sad story, but that’s not a terrible sad story; that the greatest story ever because all of a sudden I knew exactly what that property would run for, I knew the dissociation, I knew everything about condos, so then I tried to buy every single one I can get my hands on, because if the numbers worked when I bought it at $120,000, they’re going to work just even better at $45,000.
So that’s what really happened between 2008 and now, is that I bought every condo I could afford. And most of my properties are owned free and clear, mainly because if you’re going to buy a $30,000 condo it’s hard to go get a mortgage for $30,000. The paperwork isn’t worth it and the closing cost probably would be 10% of the deal. So I would just go and I would save up money and I would buy a condo. And then I’d save up more money and I’d buy a condo. And I never would have this lifestyle creep where “Oh, now I make more money than I made last year, I’m going to go buy a new thing.” No, I kept it and reinvested into real estate.
Theo Hicks: Are you still able to buy condos at this price point now?
Brian Doyle: No.
Theo Hicks: Yeah. I didn’t so. So are you still buying them cash now? Are you on hold?
Brian Doyle: It is the most interesting thing in the world right now. It feels like 2005 again to me, honestly, because in 2005 I sold a fourplex in a not super great area of Minneapolis for $400,000, and I had bought it for $135,000 four years earlier. And I was like, “What do I do with this money, because I don’t want to go buy another fourplex for $400,000. That’s the reason I just sold my fourplex for $400,000.”
So right now all that same condo that was at $120,000, went to $45,000, and now it’s probably at $135,000 right now, okay? So, it’s just getting back to the previous values. So right now it’s tough. What I’m doing now is I’m networking with every single person I know. There’s a ton of nuances with condos, and the fact that they are not mortgageable sometimes, if one owner owns more than 10% of the building, or there’s over 50% of the rentals in the property, or if there’s too much retail in the property… So a lot of these people are kind of willing to just sell for less than the fair market, because they have a hard time getting out of them.
Now I’m going to have the same hard time getting out of mine, because I haven’t really figured out that exit strategy quite yet… But I think I’ll package them and sell them to one investor. But people are still willing to negotiate. So no, the good old days of 30 caps or 20 caps are really gone. They’re down to 4, 5, or 6, or 7 cap if you buy a condo right now. But there are still deals to be had, and I think if you’re a long-term investor, you just dollar cost average over years and you’re going to be fine eventually.
Theo Hicks: Okay Brian, what is your best real estate investing advice ever?
Brian Doyle: I really, really think you need to get on the same page with your spouse as far as spending your money goes. I think a ton of people want to buy properties that don’t have any money, or they got 10,000 bucks and this is what they have, and they lose it, they’re screwed because they’re living paycheck to paycheck. Because they’re leasing cars, and all this stuff. You’ve got to have a weekly or at least monthly budget, what I call parties, with your spouse. You’ve got to call them budget parties, by the way; nobody wants to go to a meeting, everybody wants to go to a party, so go have some budget parties… And figure out how you’re going to get on the same page and start saving money so you can start investing.
Theo Hicks: And you do weekly budget parties with your spouse?
Brian Doyle: We sure try. You know, it gets busy in the summertime, so we hit about every other one of them. But she kind of puts up with it. She’s been nice to entertain me; and I’m kind of the nerd of the group so she’s nice enough to show up.
Theo Hicks: So you guys just go over what was spent that week, and what was necessarily spent and what was unnecessarily spent?
Brian Doyle: Just basically where we’re at, where we’re going. And it’s good just to get on the same page, just to have a meeting with your spouse, because you’ve got to be on the same page. Not even just for your budget, but just in general. But it’s good to look at things and say, “Where do we want to spend money? Where do we not want to spend money?” We’re both all about experience, so it’s like, “Okay, let’s ‘overspend’ on this travel, and then let’s talk about it. Is it really worth it to go out to dinner tonight? I’d rather spend that on something else.”
So honestly, it’s great, because you maximize the value and the fun out of every dollar, rather than just kind of haphazardly going through life and then coming back and saying, “Oh, what did we do?” So, it’s a worth-it activity.
Theo Hicks: Alright Brian, are you ready for the Best Ever lightning round?
Brian Doyle: I am, man. Hit me.
Theo Hicks: Okay. Fist, a quick word from our sponsors.
Break: [17:12] -[17:48]
Theo Hicks: Okay Brian, what is the Best Ever book you have recently read?
Brian Doyle: Well the most recent book I read, one of my favorite books is a book by Gary Tharaldson. It’s his Gary Tharaldson story, it’s Open Secrets of Success. Available on Amazon. He is the richest guy in North Dakota; he built a hotel empire all on his own, he didn’t syndicate anything, he did it all on his own. Bootstrapped the whole deal, got up to about 350 hotels, sold some of them. And he’s just a fantastic, down to earth, hard-working guy.
Theo Hicks: If your business were to collapse today, your real estate business, what would you do next?
Brian Doyle: Well, probably the honest answer is I’d probably just start it over again. But the more fun thing I would like to think I would do is I’d go buy a sailboat and just sail around the Caribbean for a while.
Theo Hicks: Nice. Out of all the deals you’ve done, what’s the best deal you’ve done?
Brian Doyle: The best deal I ever did was I wanted to buy 8 condos from a guy, and we’d negotiated the price, and he said, “Let’s get this done.” We’re all ready to close and he said, “I can’t close them, it’s because my accountant says I’ll owe $170,000 in tax.” So rather than just walking away from the deal, we created a master lease option, and I did that with $50,000 down, and I make $25,000 per year off that deal; just 50 cap. And if and when he’s ready to sell or passes away, one of the two, I will then buy them from him for a pre-negotiated price.
Theo Hicks: What’s the Best Ever way you like to give back?
Brian Doyle: My favorite way to do it is if a tenant is struggling, it’s probably because they have low financial education. I pay for tenants to go through Dave Ramsey’s Financial Peace University. And one tenant did that and he really turned his life around, and he credits me with turning his life around. And now he’s a manager at a Pizza Hut or Domino’s I guess. And he isn’t a renter anymore but he really credits me with turning his life around, which I didn’t do anything other than pay for him to go to that class, and I’d pay for anybody who would go to that class that is willing to go. Kind of fun.
Theo Hicks: I’ve never heard that before, that’s very interesting.
Brian Doyle: Yeah, it’s only $100 to go to the class. It’s like free; and if I can do that little push, it’s kind of fun.
Theo Hicks: Is it online or is it in-person?
Brian Doyle: In-person and online. There are two ways.
Theo Hicks: And then lastly what’s the Best Ever place to reach you? And then anything else you wanted to say to end the interview.
Brian Doyle: Appreciate that Theo. The best way to get a hold of me is my email address for sure. It’s firstname.lastname@example.org. I think you said you’d put that in the show notes. I guess I’d end with – if there’s one takeaway, it’s you’ve got to provide more value than people expect.
One thing we do is when a tenant has a leak or something, we call them up and we send them a $25 Starbucks card, we say thank you to him constantly; we’re sorry that that happened. Even if it’s not our fault we do that, because that’s how people want to be treated. And if your job expects one thing, just do a little bit more. If your customer expects one thing, do a little bit more. You’re going to always have success if you just do more than other people expect.
Theo Hicks: Perfect Brian. Well, thanks again for joining us and sharing your Best Ever advice. Some of the biggest takeaways that I got and I’m sure the Best Ever listeners got as well, are your thoughts on the job. I know a lot of people when they get into real estate the first thing they think about is, “How can I quit my job?” And I like your approach better, which is to figure out how you can continue to work at your job, while at the same time being able to work in real estate… Because having a job you have income coming in, you’re more attractive to lenders, and that’s the route you want to go, as opposed to just quitting your job. You’re not going to get a loan if you’re not going to get money coming in.
So your advice is to create a lot more value than what your company expects. And don’t be one of the people at the bottom that gets micro-managed and gets calls and emails from your boss all the time. Instead, if you provide more value than they expect, if you’re doing a commission-based job and make more money, but you’ll have more flexibility to spend on growing your real estate business. And you could use that money in order to grow even faster.
And then the second thing you said about the budget party with your spouse, or I guess if you don’t have a spouse, you can do your budget party by yourself, to see where you’re spending your money each week and to see if there are ways you can reduce your spending to save up more money to buy more real estate. And then you also went into your philosophy on buying condos, which was also very interesting.
So Brian, thanks again for joining us. Best Ever listeners, as always, thank you for listening. Have a Best Ever day and we’ll talk to you tomorrow.
Brian Doyle: Thanks, Theo.
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