[00:02:42] Patrick Donley: I am happy to have you on here. I’ve been a big fan. I mentioned before we got started recording that I’d listened to one of your early interviews on Bigger Pockets.

[00:02:50] Patrick Donley: I think it was. When there was like episode 150 or 60, something like that early days. So I am happy to have you on. We’re going to get into your book, but I wanted to hear a little bit about moving to Amsterdam and this hamburger story that you’ve got about eating a. 220 pound hamburger. So can we go into those stories a little bit before we dive into the meat of the book?

[00:03:16] Dave Meyer: That’s so funny. Yeah, those are different stories. So the hamburger thing was when I was in college, I was actually just like walking through a park in Munich when I was doing a study abroad program. And. I just happened to see people making the world’s largest, I didn’t know at the time, but it turned out they were going for a Guinness Book of World Record for the world’s largest hamburger.

[00:03:36] Dave Meyer: It was 100 kilos, so for everyone in the US, that’s 220 pound hamburger. It was about the size of like a wedding table, one of those circles. It was like about the size of that. And I got to eat that and I was on German TV eating it. So that was one of my claims to fame. 

[00:03:54] Patrick Donley: That’s awesome. 220 pounds with all the fixins and all of that bun.

[00:04:00] Dave Meyer: Yeah, it was not that good to be honest. It was more of the novelty. 

[00:04:04] Patrick Donley: No, I can’t imagine. Good story. So did that studying abroad, did that get you into wanting to move to Amsterdam? I’m curious how you ended up in Amsterdam after living in New York and then in Denver also. 

[00:04:17] Dave Meyer: Very much yeah, I was fortunate to have the opportunity to study abroad my junior year of college.

[00:04:23] Dave Meyer: I had almost finished my major at that point and couldn’t go and take some more elective courses and wound up going to Rome and was able to do some traveling and around. It just really fell in love with the adventure of it and just not necessarily. Knowing everything and how things are going to go and this sort of element of calculated risk, but so much rich experiences.

[00:04:47] Dave Meyer: And so I actually wound up figuring out a way to go study abroad a second time. I went home, did an internship, made as much money as I could, and then went to Buenos Aires for half my senior year and just have always had the travel bug ever since. And my wife is the same way. A couple years ago, we probably almost, yeah, seven or eight years ago, we really set a goal to move abroad at some point, and we didn’t know how that was going to happen.

[00:05:14] Dave Meyer: And then fortunately, my wife got transferred to Amsterdam for work. And so it just worked out for us, but we were eager for that opportunity. 

[00:05:24] Patrick Donley: That’s awesome. I had a similar experience, got to study in Luxembourg during college and it does give you this like thirst for adventure and travel and in many ways it’s, I don’t know that it’s, it changed my life quite a bit and it sends you on a trajectory that’s maybe a little unusual that compared to your friends or family, things like that.

[00:05:42] Patrick Donley: So I wanted to hear a little bit about how your friends and family reacted to that move. 

[00:05:48] Dave Meyer: Oh, it depends on who, but my family was thrilled about it. They’re all understand and have the travel bug themselves. My sister lived in Mumbai and India for a while. And my dad really loves travel as well.

[00:06:01] Dave Meyer: And so they were enthused about it. And it’s hard. We had a very nice life living in Denver and it’s hard to pick up and move, but we felt that it was worth the option. But we felt that the the upside and the opportunity was worth any risk or difficulties leaving a comfortable life.

[00:06:21] Dave Meyer: And so far it’s definitely has been. 

[00:06:24] Patrick Donley: That’s so great. I gotta say I’m a little jealous. So it’s really cool that you’re doing that. 

[00:06:29] Dave Meyer: It sounds like you have the travel bug as well. 

[00:06:32] Patrick Donley: I do. I do. I’m married now with kids. And so like that kind of puts a little bit of a damper on big adventures. But still try to do it as much as possible.

[00:06:41] Patrick Donley: Let’s get into the book. But before we do that, I wanted to hear just like your origin story about just how you got interested in personal finance and real estate and investing financial freedom. How did you get like first exposed to those concepts? 

[00:06:56] Dave Meyer: So I think I always had this idea that I wanted to be financially stable, mostly just from some childhood situations.

[00:07:06] Dave Meyer: My parents, both smart, hardworking people, but they got divorced when I was about 10 and our family went through. A lot of ups and downs. It was just like finances were always a conversation. And my parents talked to me about our financial situation. And when I starting at probably 10 or 11 years old, so it was always on my mind and my dad who smart guy got laid off and was out of work for several years.

[00:07:28] Dave Meyer: And I was just always looking at how volatile finances can be. And I had no idea what I wanted to do in college. I picked my major on a whim, but I have always just had this inkling that I wanted to find something that was relatively stable or at least have some control over my financial situation through entrepreneurship.

[00:07:51] Patrick Donley: So you graduated in around what, 2009? So tough time to graduate, right? And your undergrad was in poli sci? 

[00:07:59] Dave Meyer: That’s right. Political science. Yeah. Haven’t used that at all. 

[00:08:02] Patrick Donley: So did you, as a high school kid, did you have, were you reading finance and investing books? Do you have side hustles, anything like that to get started early?

[00:08:12] Dave Meyer: Yeah, it’s funny. Definitely not reading finance books. I wasn’t reading textbooks or doing my homework either, but I have always been entrepreneurial and so it’s small stuff like what kids did. It wasn’t Doing anything that unique I walk around and shovel snow. I had a little bit of a dog walking business around my neighborhood and middle school and where I grew up, most kids in high school didn’t work, but I started working at, I think about 13 or 14 and I’ve been working ever since.

[00:08:41] Patrick Donley: I wanted to hear a little bit about Campucine. So I wanted to hear about that. So that was an entrepreneurial venture. You were the founder of the company. Tell me a little bit about the idea, how it went, what was the impetus for it? And just go into that a little bit, 

[00:08:55] Dave Meyer: if you would. Sure. In college, I was a tour guide by your senior year, you work as basically glorified intern in the admissions department.

[00:09:05] Dave Meyer: And you’d help screen essays and do filing and stuff. And so I got exposed to college admissions and how painfully inefficient it is. And I learned that all about the college business model. And basically they’re just like any other business. They need customers, that’s students, and they need people, they need to be able to forecast Who’s actually going to come and college admissions is this very strange thing where it’s like people apply and then they let in a certain amount, but they don’t know of those people.

[00:09:35] Dave Meyer: They let in how many will actually attend. And so the original idea was to use analytics and some sort of like predictive modeling to try and predict that. And it was largely based off of. Interest, demonstrated interest. There’s all this academic research that shows that the likelihood that someone’s going to enroll and actually even succeed in a given school is more about their interest and proximity to where they live than academics.

[00:10:02] Dave Meyer: And so that was an impetus for the idea. And I started it when I was 23 or 24 with a friend of mine and it did okay. There’s parts where we were profitable. Ultimately it failed. I can go into why, but it was a very good learning experience. No, 

[00:10:19] Patrick Donley: that’s great. I love entrepreneurial ventures and that’s the time to do it is right out of school, I think.

[00:10:23] Patrick Donley: So I was curious, when did you get into data analytics? Was that in undergrad or did that come later? 

[00:10:30] Dave Meyer: Yeah. So in undergrad, the school I went to, you didn’t do minors. You did these things called concentrations where you had to just do a little bit of, in all these different areas. And so I did do some statistics courses and some basic computer science courses.

[00:10:43] Dave Meyer: And I really just liked it a lot. I’m one of those people who. Genuinely loves Microsoft Excel. Like I think it’s the best software product ever created. And I got exposed to it there. And then I had some internships in college where I learned how to do some financial modeling, which I also, people think this is weird.

[00:11:00] Dave Meyer: I find that very enjoyable. And so it was the right time, the right place where people were starting to build these predictive models. I didn’t really know what I was doing, which is part of the reason the company failed. Like I knew that these predictive models worked and I had some idea of how to do it, but not well enough.

[00:11:16] Patrick Donley: So you then ended up at Bigger Pockets. You wanted to blend your interest in real estate with technology and software and things like that. Tell me about those early days at Bigger Pockets because you were there. I don’t know how many people were there at that time, but it was somewhat early days. So talk to me about what it’s been like being there and watching the growth.

[00:11:35] Dave Meyer: Yeah. So actually part of that, the transition between these two things is I decided to learn more about data analytics. And so I went back and got a master’s degree in it, moved away from poli sci, a little more practical degree. And as such I had been investing in real estate at that point for about six years and decided to, yeah, like you said, merge these two interests.

[00:11:58] Dave Meyer: I had and Bigger Pockets was luckily looking for a, what they call growth marketing person, which if you’re unfamiliar with is using analytics to drive marketing performance. Some people call it growth hacking where you yeah, just look for advantages within your marketing funnel. That come from being a little bit more analytical.

[00:12:20] Dave Meyer: And so Bigger Pockets was looking for that. And luckily I got a job at that point. I believe I was maybe the seventh or eighth employee. It was definitely under 10. And luckily it was a half a mile from where I was there, a mile from my house. And yeah, I was able to join the company at what was really an exciting time.

[00:12:39] Dave Meyer: If you’re unfamiliar. With Bigger Pockets, it’s actually been around since 2004. And so for about the first six or eight years, it was just our founder, Josh Dorkin, like by himself, as this hobby, he wasn’t even full time all that. And then it really started to take off 2012, 2013. And by the time I joined in the beginning of 2006, it was really starting to gain some traction.

[00:13:01] Dave Meyer: And then the last eight years, it’s really.

[00:13:06] Patrick Donley: It was funny. I was rewatching that episode that you were first on in 2016 or whatever it was with. It was Brandon and Josh doing the interview. And I think at one point they’re like, what is your title exactly? They’re both just what is it you actually do here? It was funny.

[00:13:22] Dave Meyer: Yeah, it if you’ve ever worked at a small company that what you’re hired for, and then what you ultimately become responsible for are not always correlated. And so that definitely happened at Bigger Pockets for many years. Everyone’s just pitching in. It wasn’t just me. You do what you got to do to grow the company.

[00:13:42] Dave Meyer: And luckily now we’ve reached a point where people can focus on the things they have a specialty in. Let’s get into your book, which is called Start With Strategy. I want to hear about the process of that. We talked about Robert Leonard, my co host, who’s done several podcasts, and he actually wrote a book, it’s probably been six or eight months ago by now, about house hacking.

[00:14:04] Patrick Donley: But it sounded like a brutal experience to me, like the actual writing process. I wanted to hear about that for you this second time. I know you had a co writer, Jay Scott, on the first one. Talk to me about the writing process of this second one and how the idea for the book came about. 

[00:14:20] Dave Meyer: The idea for the book came from a few different experiences.

[00:14:26] Dave Meyer: First and foremost, I think that in my experience investing for now 13 or so years and working at Bigger Pockets, I see a lot of people who are interested in real estate investing and Just don’t know how to get started. And to me, the core of the issue is that there are so many different ways to invest in real estate, whether it’s flipping a house or buying a rental property, or now short term rentals are extremely popular.

[00:14:52] Dave Meyer: And there’s not a lot of guides to help people pick their strategies. There’s plenty of great information if you know you want a house hack, for example. There’s plenty of great tactical advice. about how you should go about house hacking. But I found that there is not a resource for people to look at themselves and look at their own life and say, these are my personal values.

[00:15:13] Dave Meyer: This is my risk tolerance. These are the resources that I can bring to bear. And how do I go from where I am today? And achieve whatever my financial goal is using real estate. And there’s, there wasn’t really a way to create that roadmap. And so that’s where the idea came from. Now, writing it was very difficult.

[00:15:32] Dave Meyer: I agree with Robert that writing a book is. Really, I think mentally the biggest challenge it’s obviously a lot of hours, but the creative process is not something I’m super familiar with being a data analyst. And so having something that is so subjective is new for me and not having a right answer and having to sort through that and not having a co author and really just.

[00:15:59] Dave Meyer: Relying on your own self to make decisions about the right way to present information. It’s challenging. It took me probably about two years of like very consistent writing to finish the book. 

[00:16:11] Patrick Donley: Now, was the idea for the book, was it Bigger Pockets encouraging you to do it? Or do you come, was it your idea and you presented it to them and said, Hey, I’d like to do this strategy 

[00:16:22] Patrick Donley: book?

[00:16:23] Dave Meyer: No, this one was my idea. I just had this idea again. I told you the impetus of behind it. And then I found a couple examples from other industries that I found really interesting for a while. And then canvassing the company I was talking about was in this sort of startup world and went through these accelerator programs where you get to meet all these interesting mentors.

[00:16:44] Dave Meyer: And one of the. frameworks that is used there is something called lean startup. I’m not sure if you’ve ever heard of it, but it’s this agile methodology where you learn to create these business plans and focus your resources in a good way. And then we also have this book, actually, I have it behind me called traction.

[00:17:02] Dave Meyer: I don’t know if you’ve ever heard of that. Yeah. Yeah. 

[00:17:04] Patrick Donley: What’s that guy’s name? 

[00:17:05] Dave Meyer: Gino Wickman. Gino. Yeah, that’s right. Yeah. And so both of those books, I think provide really good frameworks for people, whether it doesn’t matter what kind of business you’re trying to grow, but to create a framework that works for your individual situation, regardless of your goal.

[00:17:22] Dave Meyer: And so for traction, it’s more of an operational plan for lean startups. It’s for mostly geared towards early stage technology company. And I thought, why don’t I apply this to real estate investing? Because Real estate investing is different from investing in the stock market is entrepreneurship and you need to have a business plan similar to what you would do if you wanted to open a store or startup, but there are unique elements to real estate investing that are different.

[00:17:47] Dave Meyer: And so that’s where the idea came from was to blend those two this need for strategic planning in real estate and then. creating sort of a model for people in a framework where they can apply their own personal situation to it. 

[00:18:02] Patrick Donley: I remember Brandon Turner mentioned Traction years ago, and I think he was pretty, pretty keen on the book.

[00:18:09] Patrick Donley: One of the ideas is it like developing an, it’s an EOS? Is that, am I, is that correct? 

[00:18:14] Dave Meyer: Yes, that’s right. The Entrepreneurial Operating System. 

[00:18:18] Patrick Donley: So do you get into any of that in the book itself? Like how to create your own it’s real estate is not passive. I think we both agree with that. And I just was curious, there’s what four sections of the book I want to say, correct?

[00:18:32] Patrick Donley: So we start off with the resource triangle. 

[00:18:36] Dave Meyer: Yeah, so basically the book is split into two, four parts. The beginning is fundamentals, like things that you need to know about real estate investing and also finance certain things, just about how to deploy capital effectively and efficiently over a long period of time.

[00:18:52] Dave Meyer: The second one is called the vision part, which is where you really define where you want to go. And you probably hear this all the time. It’s super different for every kind of investor. Some people like me want to build a modest. Portfolio that supports more free time and the ability to travel.

[00:19:08] Dave Meyer: Some people just want to buy one property to supplement their income. And some people want to become tycoons. There’s this huge spectrum out there. And so determining what types of deals you should be doing is highly dependent on where you want to go. And so that’s the first step in the personalization process is defining your vision.

[00:19:28] Dave Meyer: And that’s composed of a couple of different elements there. Got it. 

[00:19:32] Patrick Donley: So talk to me a little bit about the Resource Triangle. What do you mean by the Resource Triangle? 

[00:19:39] Dave Meyer: Okay, so this is one of my favorite things that’s in the book is that my belief is that every single real estate deal and as a byproduct every real estate portfolio, because they’re just amalgamation of individual deals requires three resources that every deal needs.

[00:19:53] Dave Meyer: It’s capital. You need money to be able to buy a property, to fix things up, to make sure everything is safe and make your repairs. You need time because as you just said, real estate is not passive. You need to operate your business. And there’s certainly a spectrum of how time intensive a deal can be, but every deal needs some time.

[00:20:12] Dave Meyer: And the last is skill, because even if you throw time at something, you actually need to know what you’re doing a little bit. And the thing I love about real estate investing is that you need all three for every deal, but you individually don’t need to have all three. If you have capital, you can buy someone else’s time and you could buy someone else’s skill.

[00:20:30] Dave Meyer: If you have time, you can contribute your time to a deal in exchange for someone else’s capital or in exchange for someone else’s skill. That’s personally how I got started. Or if you have skill like being a. contractor or a property manager or a real estate agent. You can trade that for capital or someone else’s time to get yourself into a deal.

[00:20:51] Dave Meyer: And that’s what’s so great about real estate investing is that it’s extremely flexible because it’s entrepreneurship. Like you can structure it however you can really almost any way that you can imagine. And so I start the book with the resource triangle because I want to encourage people who may not have enough money to make a down payment on a duplex.

[00:21:09] Dave Meyer: Most people don’t, but that doesn’t mean you can’t necessarily get involved because you can combine and trade resources with other investors. That is extremely common. I would say, I don’t know the stats, but in my experience, the majority of deals happen that way. And I also think it’s fun to just go in and figure out how you’re going to get the resources for an individual deal.

[00:21:29] Patrick Donley: So you mentioned your first deal a little bit. I wanted to hear a little bit about that. So you didn’t have money you were a pretty young guy. You, I don’t know if you had the knowledge, but you did have the time and energy for it. So talk to us about how, like what your first deal was like and how you went about finding the people with those other parts of the triangle that you were lacking.

[00:21:50] Dave Meyer: Yeah. So I was about a year out of college and I was waiting tables and I didn’t have money for a down payment. The downside of graduating college in 2009 was the job market was terrible. The upside was that real estate was very cheap. And it just made logical sense. I had a little bit of information and knew.

[00:22:10] Dave Meyer: enough about financial modeling to say the rents are way higher than what you’re paying in a mortgage and what your expenses are going to be like, this makes sense. And so I’m fortunate that I knew people in my personal network from growing up and family and friends that had money. And so I was able to trade it.

[00:22:28] Dave Meyer: My time in exchange for capital, because I brought in three partners, I can contribute any of the down payment. I had no money, but I did I was waiting tables. I had time. So I managed the property and I did a lot of repairs myself very poorly. I was awful at it. But I tried and I basically hustled my way into some of the equity and some salary.

[00:22:51] Dave Meyer: For managing the property. And it wasn’t originally a very lucrative thing for me over time. Luckily it became, but that was largely the product of market forces, just rapid appreciation, but that got me into the game and I learned a lot and I was able to make a positive step for my financial situation, even though I didn’t own a hundred percent of the deal or anything, and that gave me enough to catch the bug and keep wanting to invest.

[00:23:20] Patrick Donley: When you were writing the book, did you have an ideal reader in mind, like the kind of person that you thought, this is who needs this book. This is who should read and learn from what I need to share. 

[00:23:33] Dave Meyer: I wrote this book a little bit more for people who are on the less experienced end of the real estate investing spectrum.

[00:23:41] Dave Meyer: I think the need is greatest for people who know they want to be investing in real estate, who recognize the opportunity that comes with investing in real estate. But feel stuck or overwhelmed by the abundance of choice. And so that might be people who have zero deals. I think that’s probably most people, but I think the other group is people who start to scale after you have two or three deals, it can be confusing about what to do next.

[00:24:08] Dave Meyer: So a lot of personalities in this industry start buying massive multifamily complexes and raising money from other investors. And I don’t think that’s. the way most people want to go. And so I think the book offers a lot of different options and suggestions for how people can scale and achieve their financial goals without really going outside their comfort zone or without sacrificing their personal time.

[00:24:31] Dave Meyer: They’re extending beyond their risk tolerance or anything like that. 

[00:24:36] Patrick Donley: I’ve got a couple of guys. One is my barber. Another guy is in the trades, does some heating and cooling work for me, and they both want to get involved in real estate. And I’ve been talking to them for quite a while about real estate.

[00:24:51] Patrick Donley: Neither one of them have actually pulled the trigger. There’s a lot of different ideas and things like that. But what do you think are like some of the things, the big things that just hold people back from making that first initial step? 

[00:25:02] Dave Meyer: I think fear is the biggest one buying real estate, it’s a capital intensive business.

[00:25:07] Dave Meyer: You need to have money. As I said the concept of the resource triangle is that it doesn’t need to be your money, but you do need to have money to get into real estate. This is not. equity investing, where you can start with 100. And so that I think is whether you have it, or even if you have it, I should say, it’s still a bit scary to put a lot of money into a single investment.

[00:25:29] Dave Meyer: And so that’s probably the biggest thing that holds people up. But I think with a little bit of knowledge, you see that real estate is actually a relatively stable asset class. And this is the millennial podcast. And I’ve said many times in the past that I think millennials have this collective housing market trauma that sort of holds them back because we graduated into what was the worst real estate investing crash in the history of the country, at least as far back as I have data, which is about a hundred years.

[00:25:59] Dave Meyer: And so we. I think a lot of people of my generation feel that’s a normal occurrence. And that now with people always saying the last three, five years, the market’s going to crash, the market’s going to crash. It might, there, there is always that possibility. But if you look at historical precedent, it is not the most likely outcome.

[00:26:18] Dave Meyer: And so I think people see it as the stock market, where these big swings in valuation, when in reality. It’s not. And the other part of that is real estate investing, most people don’t underwrite their deals or base their returns off of property values going up. It’s much more about appreciation, paying off your loans, adding value to the property.

[00:26:38] Dave Meyer: And so I think when you understand this sort of holistic investment, Way that real estate can improve your financial position. It eliminates a lot of the fear. 

[00:26:47] Patrick Donley: One part of the book, you talked about a resource audit and I wanted to get into what a resource audit is and how that can help figuring out your vision and your goals for what you wanna pursue in real estate.

[00:27:00] Dave Meyer: Like we said, the resource triangles, you need these three things. And so one of the first steps in creating your own strategy for real estate is to take a look at what resources you have available to you. And so this isn’t very difficult. One is just taking a look at how much time you have and how much time you’re willing to commit to your portfolio.

[00:27:18] Dave Meyer: So I think this is the easiest one because people can usually reflect on their own time and how much money they spend. Spend in a given week or month doing certain things and how much free time they have. And if you have a lot of free time, that’s gonna open up a lot of different options for you. As a real estate investor, you can do really time intensive things like flipping houses or renovations on the other end of the spectrum.

[00:27:40] Dave Meyer: If you have five hours a week, there are still options for you. There are definitely ways to invest in real estate with five hours a week, but they’re going to be fewer. So you need to figure out what kind of time you have. The second is the skill audit. If you are a contractor your friend who’s in the trades, they’re going to have way more options too, that they can contribute to their portfolio because they can do some of the work that themselves, or they might be very good at vetting other contractors to work.

[00:28:05] Dave Meyer: So you have to understand what skills you can contribute. And then lastly is a capital audit and understanding what money you can contribute. And there are some steps in the book that help you walk through this, but basically you want to understand what your investable assets are, which is how much liquid assets do you have?

[00:28:20] Dave Meyer: And then put a responsible amount of money on the side as a cash reserve in case things go poorly, and then figure out what money you are comfortable putting into real estate by doing this, by understanding what time you can contribute, skills, and capital you can contribute. Then. At that point, you can start to narrow down the different possibilities of real estate and pick the ones that are most aligned with your resources and your long term vision.

[00:28:46] Patrick Donley: Looking back over your own real estate investing journey and career, was, is there anything that stands out like that you wish you had known in the early days when you were first getting started that man, if I had known this, like it would have saved me a lot of time, money, energy, headache, heartache.

[00:29:03] Dave Meyer: So many things, yes. I’ll try and limit them. I think the first thing that I personally feel and I hear very commonly when I talk to other investors is knowing when to start outsourcing things. We’ve talked around my background working in startup and then my introduction to real estate was as the hustle the sweat equity.

[00:29:23] Dave Meyer: You get into this mode where you try and do everything yourself. And that actually not only is. inefficient with your time resources, but it becomes inefficient with your capital resources. And you start to learn that it is more expensive in the long run to spend all of your time doing something that you can pay someone who’s better at it to do.

[00:29:41] Dave Meyer: And you can focus on the things that you are actually good at, right? That’s the whole basis of our economy is specialized in trade. And so I think you should take that into account when building a real estate portfolio. 

[00:29:53] Patrick Donley: Yeah. I don’t know if you’re familiar with Naval Ravikant, but he’s got this idea where you set your hourly, wait, what’s your worth per hour?

[00:30:01] Patrick Donley: And he suggests setting it really high. I think he says a thousand dollars an hour or 500 an hour, whatever it is, but anything that is less than that, that you are doing, he’s outsource all of that. 

[00:30:13] Dave Meyer: I totally agree. Yeah, I like that concept and people think this is crazy because I’m a professional real estate media person, but I have a rule that I won’t spend more than 10 hours a month on my portfolio.

[00:30:23] Dave Meyer: I just won’t do it. I don’t want it. I like real estate. It’s a great thing. I like looking at deals. I don’t want to manage my portfolio every day. I don’t want to be talking about it every day. And so that’s just a limit that I set for myself. That’s the resources I am unwilling to contribute. That’s changed over time.

[00:30:38] Dave Meyer: Like when I first started, I was putting tons and tons doing 10 hours a week, at least into these deals. And now as my life and my goals have changed, now I just reconfigure the resource triangle so that I am in a fortunate position where I have more capital and I have more skill that I can contribute to my portfolio and therefore I get to put less time into it.

[00:30:58] Patrick Donley: I want to hear a little bit about how your own strategy has changed over the years. Has that shifted or changed year by year? And how often do you like re evaluate what you’re doing? 

[00:31:09] Dave Meyer: It’s changed dramatically. And that’s one of the other main reasons for the book is, yeah, when I first started it, my idea of a good deal was just like anything.

[00:31:17] Dave Meyer: Could I get into it and did a cash flow a little bit? And the strategy for me then was I had to be able to earn my equity through hustling or house hacking or something like this. Whereas now I live in Europe and so I can’t be doing any of the repairs myself or much of the property management myself.

[00:31:36] Dave Meyer: And so I’ve almost gone from one end of the spectrum, which was highly involved, highly active investing strategy to basically entirely passive, where since I’ve moved to Europe, I haven’t bought a. individual property. I’ve only invested in funds and what are known in real estate as syndications, which is basically pooling your money together with other investors to buy large deals.

[00:31:59] Dave Meyer: And I do intend to buy more direct properties actually in the next couple of years. That’s part of my strategy for 2024, but it is really shifted from one end of the spectrum to the other. 

[00:32:10] Patrick Donley: I wanted to hear, which do you prefer? Do you prefer more of a hands off approach of investing in syndications or as an LP?

[00:32:17] Patrick Donley: Or do you like more of the hands on stuff, the nitty gritty, the sweat equity, grinding? Do you have any preference one way or the other on that? 

[00:32:25] Dave Meyer: I love the passive investing, I’ll be honest with you. I love looking at deals, but. It stresses me out, honestly, to think about all of the individual details.

[00:32:36] Dave Meyer: It’s honestly just not something I’m good at thinking about how to properly redo a property or planning out a renovation. That’s not good for me. And so I like syndications because it allows me to. Focus on the things that I’m good at, the skills that I can contribute to my portfolio. I think I’m good at deal analysis.

[00:32:54] Dave Meyer: I think I’m good at location analysis and trying to find, identify places to buy. I think I’m good at vetting operators, like these are things that I’m good at and I prefer to put my time into them and then let the people who are genuinely good and passionate about property management or doing renovations do their thing and I do think for me it will continue to be a combination of both, but I intend to lean more heavily.

[00:33:19] Dave Meyer: into the passive investing avenue going forward. 

[00:33:24] Patrick Donley: That makes sense. Do you, you talked about analyzing markets that you’re good at that. What markets in the U S do you find interesting and attractive right now? 

[00:33:34] Dave Meyer: That’s a great question. And people ask me that quite a lot. And I think in the book, I tried to be very clear that what markets are good markets is highly dependent on your vision and your strategy, because if you want to be a flipper, You’ll probably choose a different market than if you want to be a short term rental investor or a buy and hold investor.

[00:33:53] Dave Meyer: There’s also this sort of trade off in real estate markets. Generally speaking, this is a broad rule, but some markets are better historically for appreciation, whereas some markets historically deliver better cash flow. And so if you want appreciation, which Generally, there’s this whole debate in real estate about this.

[00:34:11] Dave Meyer: I think it’s silly. Both are important, but appreciation. Most people focus on when they’re younger in their career, when they’re continuing to work, it allows you to build up a lot of sort of this nest egg that you can invest later into your career. Some people prefer cashflow, but I. Personally believe that cashflow is more important later in life when you’re approaching your retirement or you want to be financially independent, that’s when cashflow matters.

[00:34:33] Dave Meyer: So again, what market you pick depends on where you fall along that spectrum. I will generally just say that if you’re looking for cashflow, the Midwest is the best right now, as is a lot of actually new England is starting particularly Western New York is I guess New York’s not new England technically.

[00:34:50] Dave Meyer: But the Northeast, let’s say, is doing a little bit better. The Southeast it continues to be the fastest growing markets in terms of appreciation. You see a lot of the fastest growing markets in Tennessee, North Carolina, South Carolina, Florida. Although Florida, I always joke, it’s like the most polarized.

[00:35:06] Dave Meyer: If I do these analyses of like best and worst markets, like Florida is always the best markets. It’s also always the worst markets. It’s both ends of the spectrum. And then the West right now is in the biggest. correction. So we are seeing property values decline in a lot of places. It really is like a West East West divide in the United States right now, not necessarily on the Mississippi, but basically Colorado and West is performing the worst right now.

[00:35:33] Dave Meyer: And the East is doing better. But I also want to caveat that by saying a lot of the cities in the West have the best long term fundamentals, strongest population growth, economic diversity, economic growth. And so again, it really depends on your time horizon. Like any investment if you’re investing for next year, probably don’t want to pick something in the West.

[00:35:52] Dave Meyer: If you’re investing for 10 years from now, you might want to. So it’s hard to say any one individual market. It really has to be aligned with your broader strategy. 

[00:36:01] Patrick Donley: So you’re in Europe right now. If you were to come back to the U. S., what market would you focus on and what asset class? 

[00:36:09] Dave Meyer: If I was to buy directly, I am looking at a couple places in the Midwest.

[00:36:14] Dave Meyer: Because, just so we were talking about, a lot of the syndication and passive investing I do is focused on building equity. Because I am not someone who’s going to personally take on large value add renovation projects. I like to invest passively with people who are good at that. I do want to balance out my portfolio with cashflow.

[00:36:32] Dave Meyer: And so I’m looking more in the Midwest, probably with small multifamily asset classes, which is two to four units because those have some financing advantages. 

[00:36:44] Patrick Donley: I wanted to get into a little bit about. Your own, like how you’ve built your own personal wealth. What has been the best Avenue? What’s been the, let’s say your best investment.

[00:36:53] Patrick Donley: There’s a lot of younger people that listen. They’re trying to figure out how can I build my wealth? What would you say for yourself has been the biggest factor for building your nest egg? 

[00:37:04] Dave Meyer: I think this is boring to say, but going back to school and getting a degree, a master’s degree in a high paying, highly secure field has been a huge difference maker for me in my financial journey.

[00:37:17] Dave Meyer: One having a high paying job is great, but it also allows me to take a bit more risk in my investing. So like I feel comfortable investing in real estate projects that are more focused on equity building and might be a little bit riskier. Because I have a stable income that I feel confident in, and I know a lot of people get into real estate investing to quit their job, and that is possible, but I really think a lot of that is Instagram selling something where it’s like, Oh, you can quit your job in a couple of years.

[00:37:49] Dave Meyer: Maybe you can, and maybe you want to, but there’s a trade off with that. Quitting your job and focusing on investing alone is difficult and it’s riskier. The longer you build multiple income streams, the better. And so maybe that’s the right advice is have these multiple income streams. Like I continue to work.

[00:38:06] Dave Meyer: I continue to, I plan to continue working and that allows me to be a little bit more aggressive and honestly, more long term focused on my investing. Cause I don’t need to cashflow tomorrow. If my property value goes down next year, I don’t really care all that much because I’m not going to sell it. And so it’s really gives you that stability and strong foundation that you can use to invest from.

[00:38:29] Patrick Donley: I like that. That’s really good advice. I wanted to get into habits and touch on that a little bit. I wanted to hear what habit you personally wish that you had developed a little earlier in your career. 

[00:38:41] Dave Meyer: I guess organizational skills and prioritization skills. I think it took me a long time. to get good at learning how to like regularly look at all the things I have to do and focus on the ones that are really the most impactful and not necessarily the ones that are easiest or that I want to do the most or sound the most exciting.

[00:39:03] Dave Meyer: And I think I’ve gotten much better at that. Over the course of my career, it’s like keeping this list in my head of what the most important thing I can be doing is, and that’s been very helpful to me. There’s a book called The One Thing, and actually Josh Dorkin, the founder of Bigger Pockets, gave me that book on my first day of work.

[00:39:24] Dave Meyer: Oh, really? 

[00:39:25] Dave Meyer: And was it impactful? Did it, did you read it and it made a big impact? 

[00:39:30] Patrick Donley: It is. Yeah, it is. It’s it sounds intuitive, but it’s not as easy as it sounds. Even if you say Oh, just do the most important thing. Everyone’s. Yeah, of course. It does take a little bit of. learning to figure out like how to weigh different things against each other and to do that prioritization process.

[00:39:49] Patrick Donley: I wanted to touch a little more on habits, but what do you think that the number one habit for new investors or anyone trying to build financial freedom needs to work on the most? What’s the one thing that across the board, you would say this would be super helpful to develop this habit.

[00:40:05] Dave Meyer: That’s interesting. I’m not a big habit person. I’m a very I am a structured person, but I don’t know if I have a specific habit that I would recommend. Just other than, honestly, it’s just consistency. I don’t know if that’s a habit or if that’s how you build a habit, but I think that’s the difference I see in the people I know who are successful is just being consistent at the things they want to do.

[00:40:29] Patrick Donley: It reminds me, I think it’s Woody Allen that said the quote, 80 percent of success is just showing up. So just keep at it. 

[00:40:37] Dave Meyer: And I’ve talked about some of my failures. I’ve had many more that I , we don’t have time to, but I think just knowing what you want and trying to be persistent about it is really the most important.

[00:40:48] Patrick Donley: So how is this book that is coming out in January, how would you say it’s different from your first book, which was real estate by the numbers that you wrote with Jay Scott? What are the differences between the two? 

[00:41:00] Dave Meyer: They’re quite different. So the Real Estate by the Numbers the book I wrote with Jay Scott is really about the finance and the math that goes into real estate investing.

[00:41:10] Dave Meyer: It is not complicated, but it is different than the ratios and ways that you evaluate a stock, for example, is different than the way you evaluate a particular real estate deal. And I guess this isn’t a habit, but if there’s a skill that everyone could get good at, I really just think deal analysis is the most important.

[00:41:27] Dave Meyer: If you learn how to do the math and how to craft the right assumptions that go into the math, that is really just the key to being a real estate investor. If you learn to underwrite well, what happens in the broader economy is less important, especially if you’re a long term investor, maybe not if you’re a flipper.

[00:41:44] Dave Meyer: And so that’s what real estate by the numbers is about is really. Making it simple to understand like what you need to be tracking, what you need to be thinking about as you build your portfolio. Whereas that’s very tactical, right? Like in the weeds, when you’re buying a deal here, the formulas you should be using, the things that you should be thinking about.

[00:42:03] Dave Meyer: Start with strategy is on the other end of the spectrum where it’s really, it’s called start with strategy because I think it’s where everyone should start their real estate investing career. Before you get into analyzing deals, before you start picking what kind of deals you want to, you really need to pick what you want.

[00:42:18] Dave Meyer: Actually, funnily enough, I just said that I think the thing that’s most important is knowing what you want and being persistent about it. And start with strategies really helps you know what you want. And I honestly, I find that so many people don’t know what their financial goal is, or don’t actually have a specific goal or what they want their lifestyle to look like.

[00:42:36] Dave Meyer: And I know for some people that might feel like, Oh, I’ll get to that one day, but I truly believe that having a clear idea of what you’re trying to accomplish. Is essential to accomplishing that goal and so start with strategy allows you to figure out what you want and then like back into the right tactics, the right deals that will support that long term vision.

[00:42:58] Patrick Donley: Can you talk a little bit about some of the prep sections that are in the book along with the journal component that I think you’ve included? Talk about that and how it applies to both new and experienced investors. 

[00:43:12] Dave Meyer: Yeah, so the PREP is, stands for the Personalized Real Estate Portfolio. And in addition to Start With Strategy, which provides all the context and information, the PREP is basically a business plan that comes with the book and you can fill out as you’re reading it.

[00:43:27] Dave Meyer: And there’s three components to it. The first is the vision, which we’ve talked about a bit in this interview, setting where you want to go and why you’re really getting into investing in the first place. The second part is what I call deal design, which is then taking that vision and combining the right elements of real estate investing into deals that work specifically for you.

[00:43:45] Dave Meyer: So that might be choosing between flipping and rentals that might be choosing between active or passive management might be choosing what market you’re going to invest in, what property class and taking all the different. ingredients, if you will, that are available to real estate investors and combining them into your own unique combination, that’s going to work for your vision.

[00:44:04] Dave Meyer: So that’s the second one. The third part of the prep is portfolio management. And this is where things get really tactical. So you start with your vision, you get set this high level vision, then you design your deals that you’re going to pursue. And then portfolio management is the day to day stuff, figuring out, are you going to refinance your property this year?

[00:44:23] Dave Meyer: Should you invest $20,000 to add another bedroom onto this house. Will that improve your portfolio? Will that help get you closer to your goals? It also is where you define your investment thesis. You asked me earlier, I think I skirted that question, , sorry, about how often I evaluate my own strategy, and I recommend doing that once per year.

[00:44:43] Dave Meyer: And so the, this sort of, this prep is this format that you can follow to evaluate and craft your own personal real estate strategy that’s based on your own. financial situation, your own personal situation and help you get towards your goals. So that’s what the prep is. And then there’s also a journal that comes with the book.

[00:45:02] Dave Meyer: If you actually pre order it before January 30th, that actually comes free, which is awesome. Normally it’s 30 bucks. So you can get that for free if you pre order it. And it’s basically a workbook to work through a lot of these questions. Cause you know, it’s easy to say, Hey, tell me what you value most in life and why you’re investing.

[00:45:18] Dave Meyer: Some people like my, I definitely need like some. space to think through and brainstorm about what you’re actually trying to accomplish. And so the journal has some questions and exercises that you can go through to help craft your strategy. 

[00:45:32] Patrick Donley: Is there any other interesting, cool bonus content like that with the book?

[00:45:38] Dave Meyer: There’s actually a lot. We’re giving away a lot. So the other thing that comes with the book for everyone is what I call the strategy toolkit. And these are Excel. This is all coming full circle, Patrick. I was gushing about how much I love Excel earlier, but it’s an Excel workbook. It’s got about 10 different tools that can help you.

[00:45:57] Dave Meyer: Plan your strategy. So there’s a financial planner, which helps you take your income, measure out all your expenses, figure out how much money you can contribute to your portfolio using your standard rate of returns or the type of deals you want to do. Extrapolate how long it will take you to achieve financial freedom.

[00:46:16] Dave Meyer: There’s things to help you with the resource audit that we talked about, like time budgeting and skill auditing. And so there’s all sorts of different tools. Basically, my goal was to come up with a comprehensive way to get. people into real estate investing in a way that feels comfortable for them and their personal situation.

[00:46:32] Dave Meyer: And so I just kept going. I wrote a book, then I wrote a journal and I made a whole Excel thing and you get it all. If you order the book, that’s great. And 

[00:46:39] Patrick Donley: it was a two year process that you said from start to finish and produced by Bigger Pockets. I presume 

[00:46:46] Dave Meyer: it is, but Bigger Pockets has its own publishing department and it is publishing the book.

[00:46:50] Patrick Donley: I think I had mentioned I had a couple authors on Ashley care and pace Morby who both. had written books and had the chance to interview them. 

[00:46:59] Dave Meyer: I think I got them both right here. They’re good books. Yeah. You got it back there? Nice. Nice. Yeah. Yeah. Our Baker pockets do a great job, but really covering everything if you’re interested in real estate, investing, especially tactically I said earlier, I wrote this book cause I think it’s, People need help getting started and knowing what strategies and taxes to pursue.

[00:47:19] Dave Meyer: If you know what tactics you want to pursue, Bigger Pockets is a great book for pretty much anything you can imagine that can teach you the nuts and bolts of like how to actually execute on those strategies. Because my book doesn’t really get into the the day to day operations. 

[00:47:33] Patrick Donley: They’re really nicely produced books.

[00:47:35] Patrick Donley: They do a fantastic job on like the actual, the books just look and feel great. So before we wrap up, I wanted to talk a little bit about your podcast on the market. There was an episode recently that you had the Zillow’s chief economist or he was talking about how people do not want rates to come down.

[00:47:53] Patrick Donley: I wanted to hear your thoughts on that. That seems a little counterintuitive. I’ve talked to a lot of people that are like, I’m waiting to buy rates will come down. Maybe eventually that’s when I’ll buy. Tell me what his thought process was behind saying, no, you don’t want rates to come down.

[00:48:10] Dave Meyer: So yeah, we had Zillow’s chief economist, I’m forgetting his last name, his name is Orfeh, is his first name was on and we were talking about rates and I think there’s a couple of things going on with interest rates. They’re very high, obviously, it’s really slowing down the market in terms of home sales volume, but prices are staying stable and I think there’s basically two camps of people.

[00:48:30] Dave Meyer: Some people believe that mortgage rates should stay high and hopefully can put continuous downward pressure on property prices until the point where. Prices fall and improve affordability. There are other people who perhaps are waiting, wanting to buy a home or an investment and can’t afford it in current rates.

[00:48:48] Dave Meyer: And so they want to see rates fall and the, or people who just have their nest egg and are planning to sell obviously don’t want prices to go down. So I think there’s really no right answer. I think it depends on where you fall. I can give you my opinion if you’re curious about it, but I think there is no real right answer.

[00:49:09] Patrick Donley: There was another episode too about just, we’re at all time levels of consumer debt that came out recently on the podcast. Tell me what that means in your, on your take for housing in general. 

[00:49:22] Dave Meyer: I went deep into this one. I just went on a whole tangent in my life looking into this because I kept reading about how consumer debt was getting out of control and it’s the highest it’s ever been.

[00:49:33] Dave Meyer: And the short answer is yes, consumer debt is the highest it’s ever been. But something like 80 percent of that is mortgage debt. And so if you have a lot of mortgage debt in an asset that has been appreciating, you usually have a lot of equity with it too. And since property prices have gone up so much, it is natural that consumer debt has also gone up with property prices.

[00:49:54] Dave Meyer: Now, if you strip that out to look at the health of U. S. consumers, I like to look at credit card debt because mortgage debt, I think many would argue is quote unquote good debt because it helps you finance in many cases an appreciating asset. Credit card debt, not the same thing. Very high mortgage interest rates is not helping you typically buy an investment.

[00:50:13] Dave Meyer: Sometimes it can, but just generally speaking. So that just recently topped one trillion dollars and that is much higher than it’s ever been. And so that I was like, Oh man, that’s concerning. Until I went a level deeper and looked at two metrics. One is the percentage of disposable income that is going towards debt.

[00:50:31] Dave Meyer: So that’s basically what percentage of people’s income goes to paying off debt, whether it’s car loans, student debt, credit cards. And it’s actually down, which is pretty wild. So even though debt is way higher, incomes have also grown. And so you see that it’s not down a lot, but it’s down modestly. And so you see that even though debt has gone up as a function of people’s lives, it hasn’t actually changed.

[00:50:55] Dave Meyer: Now that might change in the next couple of months, but that’s just where we are today. The second thing that’s getting really nerdy about it is if you look at debt as a percentage of monetary supply. It’s actually about flat. And so everyone talks about inflation and how money printing has made things more expensive.

[00:51:10] Dave Meyer: Money printing also devalues your debt. And so even though you have a trillion dollars in debt, a trillion dollars is not what it was in 2019. And so you have to, if you’re going to discount the dollar in terms of spending power, you also need to discount it in terms of debt. Again, you look at that, you see that.

[00:51:28] Dave Meyer: It actually is largely unchanged over the last decade or so. And I’m not saying all of this to say that huge amounts of consumer debt is a good thing. I think in the longterm, it’s a dangerous thing. I just don’t think it’s an acute issue that just popped up over the last six to 12 months. It has been an issue for decades and the level of that issue or the severity of that issue hasn’t really changed that much.

[00:51:52] Patrick Donley: It’s just still an issue. I want to be cognizant of your time, Dave. I really appreciate having you on the show today. Start with strategy. I’m looking forward to getting a copy of it. Is there anything that you that we didn’t touch on that you wanted to cover today? Or do you feel like we discussed the book pretty well?

[00:52:09] Dave Meyer: No, this is great. I hope everyone gets the point of the book. If you’re interested in getting into real estate and want to figure out how to make it work for you. I hope this book would be useful to you, but you asked a lot of good questions, Patrick. So I think they, everyone should hopefully get the gist.

[00:52:25] Patrick Donley: Thanks, Dave. So for anybody that wants to buy the book or just learn more about you, what are the best ways for them to get in touch or purchase the book? 

[00:52:32] Dave Meyer: Yeah, so you can go to Bigger Pockets. com slash strategy book. You can get the book there and you can see all the bonus content and all the other stuff that comes with it.

[00:52:40] Dave Meyer: Or if you have any questions for me directly, Instagram is the best place where I am at the data deli. 

[00:52:47] Patrick Donley: The data deli. Love it. Dave, thanks so much for your time. I really appreciate it. 

[00:52:51] Dave Meyer: Thank you, Patrick. 

[00:52:53] Patrick Donley: I wish you the best of luck. This has been a lot of fun and thanks for your time. Thanks Patrick. Okay, folks, that’s all I had for today’s episode. I hope you enjoyed the show and I’ll see you back here real soon.

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