David Greene: Yes, sir. I’m excited about it, JLD.

Interviewer: Dave is a police officer, a real estate agent, and an investor with 30 houses. He’s been featured HGTV’s House Hunters. He runs greenincome.com and teaches others to build a passive income with real estate. David, take a minute, fill in some gaps from that intro, and give us a little glimpse of your personal life.

David Greene: Alright, so I got started buying rental properties in 2009, right after the market had crashed. I saw an opportunity there that I could buy properties that I could rent for more than I own, and that’s about as much as I knew. I didn’t know that was a thing that people did, but I knew that I wanted to take advantage of it, so I just decided I’m gonna do whatever it takes to get there. I started working 90 to 100 hours a week as a police officer, sleeping in my car. I kind of gave up a big chunk of my life and just said, “I’m going after this with everything I have.” I was able to buy quite a few rental properties.

The market turned around in 2013, and they got too expensive to buy in California, so I said, “Hey, I’ll go do this in Arizona, where I can still buy them.” I put together a team of people that would help me buy rental properties over there and realized it’s kind of the same no matter where you do it. There would just be little pieces that you need. Since then I’ve gotten better at that system, and now I’ve moved into Florida and Arkansas, and I own some properties in Wisconsin, Texas, Georgia, little bit of everything. I buy properties in all kinds of other states, and I think real estate is one of the most powerful things I’ve ever come across for building wealth, and I’m passionate to talk about it.

Interviewer: It sounds like you know, and I know, what your expertise is, but how would you sum it up in just one sentence?

David Greene: I grow passive income through investing in real estate, and I let my tenants pay my debt off for me.

Interviewer: What’s something that most people – myself, Fire Nation, entrepreneurs in general – don’t know about passive investing within real estate that we probably should?

David Greene: So you can actually buy an asset that will make you more money than what it costs to own it, which means that at end of the month, you’ll have money coming in in excess of what you owe, and if you get enough of that, you can actually retire and live off of that income, or you could take that money and reinvest it and grow your net worth a lot faster. It can be fairly systematic, to the point that you don’t need to be an expert or have a doctorate to be able to do this.

Interviewer: Dave, it sounds like you have the world on a string and that you always have, but we know that’s not true. I want to actually talk about what you consider the worst entrepreneurial moment that you’ve experienced to date. You must have a doozy, brother. Take us to that moment. Break it down.

David Greene: My worst moment ever was actually the very first rental property I ever bought, which is really scary because if I would have let that break me or cause me to quit, I never would have become a millionaire through real estate, and all of the cool things and opportunities I have right now wouldn't have ever happened.

Interviewer: And by the way, think about how many people have let that first bad opportunity stop them, and they’ve never gone back.

David Greene: Yeah, isn’t that scary? Can you imagine if you planted a tree that would someday become like a redwood and the sequoias, and you chopped it down when it was just a sapling before it ever became what it could because you thought it was growing too slow or you don’t know enough about tree growth to make that happen?

Interviewer: What an analogy. Alright, brother, take it away.

David Greene: Alright, so I was a cheapskate, pure and simple. I’ve always been good at saving money. I’ve not been that great at having faith in other people, and that was a big problem. I rented this house out myself because I didn’t want to pay a property manager $100.00 a month, and I ended up with a professional tenant, and when I say that, I mean someone who knows the game way better than I did and found a way to live in that house without paying me for a very long time.

When it was all said and done, the guy owed me about $7,500.00, and it took me months of frustration to finally get him out of there, and I wanted to quit the whole thing because I felt stupid. Luckily, I didn’t. I gave it one more shot. I hired a property manager, and I realized, “Oh, this is really easy. These guys know exactly what they’re doing. I don’t have to go read a book that took me seven hours to figure how to look through applications of tenants. I can just go to work and make more money.”

That was my big ah-ha moment because I started thinking about, “Where else can I do this? Is it worth my time to go learn how to change a door latch and take a half a day off of work, when I could go to work and I could make a couple hundred bucks and pay some other guy $50.00 to do it?” Those were the principals that I eventually built my out of state investing business on, and I’m so glad I did.

Interviewer: Now doesn’t hiring the people that you mentioned, like to actually run this and do all these things, doesn’t that cut into the profit margin a little bit?

David Greene: Yeah, it does, but you have to ask yourself what the highest and best use of your time is. If you’re an entrepreneur, and you're trying to get a business off the ground, you need to put your focus and your attention on that business, on where your sales are gonna come from, on the relationships that you're gonna develop. You don’t need to put it on the flyer that you’re gonna make to advertise what you’re doing. You can pay somebody on Fiver a couple bucks to do that, and you could go right back to work on the big picture stuff that really matters.

I think a lot of us get too caught up in thinking of where I could save money that we lose faith in ourselves that we’re really the driving force in making this thing go. It does cut into your profits, but if you think about – if we use that tree analogy, sure, it’s gonna cost me more money to pay someone else to go plant seeds, but think about how much I can get done if I’ve got somebody else planting seeds that are gonna grow to trees for me.

Interviewer: So beyond hiring a property manager, what’s the big lesson that you learned from that first experience that was your worst experience in real estate? What’s the lesson that you want Fire Nation to walk away with?

David Greene: Okay, none of us are good at everything, and you’ve got to just accept that. The sooner you do, the better. I’m not built to be really good at analyzing property and also a really smooth talker that can manage tenants that are a little bit rough around the edge and also great at construction that can fix things and build things and improve things. I’ve got a limited skill set that I’m really good at, and the rest I’m mediocre or, frankly, bad at. I learned that it’s okay to hire people to do what I’m not good at and to bet on myself to do what I am good at.

I had an opportunity as a police officer to go work overtime and make time and a half and save up a lot of money; that was way more than the money I could have saved had I learned to fix leaky faucets on my own. When I started to take advantage of that, my wealth grew. My net worth grew. My opportunities grew because now I could buy properties in other states and find someone to make those repairs that needed to be made rather than think that I’ve got to fly to Arizona to fix something when the toilet leaks.

Interviewer: Now it sounds like you’re pretty bad at a lot of key things that most people would think you need to be good at to be a real estate investor. What are you good at? What are some things that you are strong at?

David Greene: So I can look at a big picture, and I can see the value or the direction of where we should go. I was able to see, hey, if I can find a way to buy properties that I can rent out for more than it costs to own them, and I can buy them for less than what they’re worth, and I can fix them up for cheaper than the next guy can by hiring the right people, I can add between $25,000.00 to $75,000.00 in equity to each house, and $300.00 to $500.00 a month of passive income, and all I have to do is find a way to keep that system going and find the next property.

I turned my focus onto how do I find other people and help them in their business, like a real estate, teach them how to find what I want; or maybe a wholesaler, help buy some of their properties so that they can afford to do more advertising and bring me more deals. And if I made them like me by helping them enough, they brought me the deals first. That’s what I was really good at. I didn’t want to learn how to manage it, how to fix the stuff. I didn’t even want to have to learn how to go find banks that would give me a loan. I’d rather have somebody else that did that. I just wanted to work on the relationships that would bring me the business.

Interviewer: So it sounds like you’ve had a lot of ah-ha moments along your journey. We’ve talked about a couple already – the property manager, focusing on what you’re good at and hiring out the rest, etc. What’s one of the greatest ideas that you’ve had to date, specifically as an entrepreneur, that we haven’t talked about yet, one of those ah-ha moments that you were able to turn into success? David, really take us into that moment. Walk us through that story, and tell us how you actually turned it into a success.

David Greene: Okay, so I was on a website called biggerpockets.com where I would read articles from other real estate investors, and it really helped me gain a lot of confidence about, “Hey, I can do this too.” We all have questions when we’re new at something, and it helps if you have a resource that can go to. You’re never gonna know it all, but if you know who to go to when you a question, your confidence will kind of skyrocket, and you’ll put yourself out there in positions that have success, as opposed to hiding because you don’t have the answers.

I actually worked up the guts to ask to be on their podcast. They have a really big podcast. To my surprise, they said, “Yeah, we want you on in three days.” I was expecting it to be months where I’d have to wait, but they loved my story. The podcast went so good that I actually worked up the nerve to say, “Hey, how do you guys feel if I start writing articles for your online blog?” They said, “Sure. Send us a sample of your work, and we’ll put it up there if it’s good.”

Well, I wrote one that was so good that they made it the editor’s choice, and then it became my goal every time I wrote an article to make it be the editor’s choice, so I would start studying what makes a good blog article. What do people want to read? I’d ask the editor there, “What are the ones that get the most traffic?” and I would make my work fit those standards.

Those went so good that they came to me and said, “Hey, do you want to write a book? We want to publish it. You write really well.” I said, “Sure.” So they asked me what I wanted to write it on, and I said, “I’ll write on out of state investing,” because a lot of people live in an area where it’s too expensive to buy rentals, but they’re afraid to go buy them where it does make sense.

That book deal led to me getting the nerve to say, you know what? I should actually start working as a real estate agent now too. I got a job as a real estate agent. My sales went a lot better than I thought they would because I knew real estate, and that led me to realize I should start hiring people to work on my team, the same as I hire people to work in my real estate investing business, to do the stuff I’m not good at.

So I found some people that were super personable and really good. I’m kind of a more direct and right to the point type of guy, and I wanted to hire people that would make my clients feel like a million bucks better than I could. Then my sales went even higher, and that got me an opportunity to get on House Hunters. Then I filmed an episode for House Hunters, and they said I did such a good job on that making their jobs easier that they call me every two weeks and say, “Hey, do you have anyone else? We want to get you back on the show.”

I had this moment that I realized if you take where you already are having success, and you just try and go a half step higher, do such a good job that you see what other doors open, that door will lead to a door that will lead to a door that will lead to a door that will to a door that will create exponential success that you never would have thought that you could have when you first started on that journey.

Interviewer: Fire Nation is taking that first step. That Martin Luther King quote never gets old, that you don’t have to see the whole staircase to take the first step. There’s no way that David saw that whole staircase. He had no idea that that first idea that he had was gonna eventually lead to House Hunters calling him every two weeks to be back on the show. I mean, hello, this is what happens when you take action, one step at a time, and you learn every single step of the way. Now, David, let’s fast forward to today, brother, because you have a lot of stuff going on. But what’s the one thing that you’re most fired up about today?

David Greene: What I’m most fired up about today is my real estate agent business. I’m scaling up my investing business to where I’m buying about two houses a month, and I’d like to be able to buy around 2 to 3 a month in each state that I have a team in. But what I need to do is find a system that will fund that whole side of the business. That’s where it comes into selling houses. I’m able to take the stuff that I learned from buying rental properties and apply it to protecting my clients’ interests working in real estate. I’ve found that I’m doing a lot better than the slick talking salesmen who kind of gave realtors a bad name.

So as I learn more and more about real estate, I think that’s really important for the Fire Nation to understand is when you want to be good at some, you need to master it. It’s not enough just to get involved in it. You really need to study it and learn everything you can that will make you the best at it. People can tell when they sit down to talk to you that you know your stuff, and it makes them feel comfortable with you.

I’m now at a point where I can take what I’ve learned, and I can teach it to other people, who can kind of work as leverage on my behalf, and I can take this system and multiply it into different areas. So pretty soon here, I’m gonna start having agents in different offices in different parts of the state, and then different parts of the country, who are replicating the same system I did and having the same success that I did, and making a portion of the profits that they’re bringing in. There can only be one David, but if I can replicate David’s systems, there could be an infinite number of me. Just that concept is so exciting that it’s worth whatever I have to do to get there.

Interviewer: We’ve had real estate agents on this show before, and a lot of them have talked about their worst moment being during the real estate crash, when they were completely over-leveraged, and they lost it all, and they had to start back over and climb back to the top. Now what are you doing to protect yourself and to make sure that you don’t get crushed if and when we have that next big real estate disaster?

David Greene: So the real estate agents that got crushed back then got a little complacent. They put that car on cruise control, and they just figured it was gonna drive forever. Because I got into the market after a crash to buy properties, there’s a part of me that’s hoping it happens again because that’s when opportunities come.

Interviewer: Totally.

David Greene: It’s in down markets that people make their money. You know that? People don’t understand. That’s where Warren Buffet made the majority of his wealth was in the down markets. Being prepared for those is ten times more important than just doing well when everything is going well.

What I do is I basically studied why that crash happened, and you can kind of sum it up into the fact that banks were giving loans to people that couldn’t afford them, and they had to do fancy steps to make it affordable for the time. If you said, “I want to buy this house,” and the bank said, “That’ll be $4,000.00 a month,” and you said, “Well, I can only $2,500.00,” the banks would take the other $1,500.00 you couldn’t pay and say, “Well, we’ll talk it on to the back of the loan, and you can pay us back later for the first two years.” Well, when two years went by and it adjusted and everyone had to pay $4,000.00, the whole market came crashing down.

So now that I’m in this position, I'm watching really closely what lenders are doing. I’m asking my clients, “What are they offering you?” I’m looking like a hawk to see if lenders gonna start doing this fancy footwork that led to the problem again, and if I see that they are, I’m gonna sell everything I have and wait for the crash because I know it’s coming.

Understanding what caused the last crash to happen gives me confidence to move forward knowing that the ground’s not just gonna fall out from underneath me within no warning. That’s why I’m so big on mastering what it is that you’re trying to do well in life, whatever business it is you’re trying to run, because otherwise you're just kind of walking along blinding hoping. You’re high on hope-ium, and hoping that the high never runs out. I think that smart business owners take a different approach.

Interviewer: But if you’re buying houses and you’re renting it to people, why are you concerned about a market crash? You would just then be able to rent to even more people who can’t buy homes, so they have to rent too. Doesn’t that put you in a good situation?

David Greene: As an investor, it absolutely does, and that’s why I’m looking forward to the next crash because I can buy more houses easier. I’m not gonna care about the home values of what I already own when the prices go down. The reason I would sell before prices dropped is so I have more capital to reinvest when it’s cheap.

If I own houses right now that are worth $250,000.00 and then after the crash they’re gonna be worth $125,000.00, if I sell them now and I take $150,000.00 and set it aside, when it drops to $125,000.00, I could buy four of them. So I could take every house I had and multiply it times four. My portfolio would quadruple, and my passive income would theoretically quadruple. If I didn’t want to do that, I’d be fine because as long as the rent’s more than the mortgage, I’m fine, which is really what is beautiful about real estate. There’s always a way that you can play your hand where you won’t lose money.

Interviewer: Fire Nation, value bombs have been dropped. More coming in the lightning round when we get back from thanking our sponsors. David, are you ready to rock the lightning round?

David Greene: Oh, I’ve been ready.

Interviewer: What was holding you back from becoming an entrepreneur?

David Greene: I am a very introverted person, and my introversion caused me to have a lot of doubts that I could be a salesman. I didn’t want to leave being a police officer and start being a real estate agent because I just thought I’m not good at talking to strangers. I found that if I’m talking about something that I know, I can talk to anybody. I put a lot of pressure on myself that didn’t need to be there. It wasn’t until I stepped out and said, “Hey, let’s give this a shot,” that I realized that that was all in my head, and it wasn’t something I needed to be worried about.

Interviewer: What’s the best advice you’re ever received?

David Greene: It is the Pareto principle. The Pareto principle states that 80 percent of your results come from 20 percent of your effort. I had very intelligent people tell me to focus on my 20 percent and leverage the rest of that to somebody else who that was their 20 percent. That was really what supercharged my success when it came to building a real estate team.

Interviewer: What’s a personal habit that contributes to your success?

David Greene: I talk to everyone about my passion, which is real estate right now. When I come across someone and they say, “What’s been going on?” I tell them about a bunch of money I saved a different client, or how we got our offer accepted when there was five others. I tell people about the investing that I’m doing and how incredible it’s gonna be in 30 years when your house has gone up four or five times because of inflation, and it’s paid off, and how smart I’m gonna look. I try to plant seeds in everybody’s mind by talking about what I’m passionate about to get them kind of inspired in the same stuff. By doing that, I become the expert in their mind in my field.

Interviewer: Recommend one internet resource.

David Greene: biggerpockets.com. It is a free website where you can learn all about real estate investing. There’s a lot of people in this world, in fact, almost anybody in this world can do good making money at a business if they apply sound business principles and they work hard. Earning money in business is not the same as growing that money, and most people will find that you’ll make more money investing your profits than in just earning them. The tax base is better. The passive aspect of it is better. There’s just a host of reasons why you need to understand how to invest the money that you’re making, and that’s a great website to go to to get started.
Interviewer: Recommend one book and share why.

David Greene: So I'm writing a book that’s supposed to be out in October about honesty in investing, but I would say the one book I’d recommend right now is The Richest Man in Babylon. It’s a classic that has to do with financial principles that are timeless, really. If you read that book and you understand the principles in it, it’s a lot harder to make stupid decisions later on when you come across unfamiliar territory.

Interviewer: Well, this interview’s going live on October 23, so where can Fire Nation go to learn more about your book?

David Greene: You can pre-order the book at Amazon right now, or you can get it at Barnes & Noble. They both have pre-ordered copies. It’s tentatively named Invest Anywhere: How to Buy, Rehab, and Manage Rental Properties in Other People’s Backyards.

Interviewer: And also, Fire Nation, you can just search for David Greene as an author, that’s G-R-E-E-N-E. David, let’s end today on fire, brother, with you giving us a parting piece of guidance, the best way we can connect with you, and then we’ll say goodbye.

David Greene: So I run the website you mentioned earlier, greeneincome.com. There’s an E at the end of the Greene. That’s how my name is spelled. I basically show people the deals that I’ve done, and I teach them how I found it and what I did to put it together. The best way to learn is from other people’s mistakes, not your own, so if can follow along with what other people did, it can sharpen your learning curve. I also have all the articles that I’ve written and podcasts I’ve been on on there. You can email me through that website, and I’d love to connect with people and share how the power of real estate has changed my life.

Interviewer: And what’s that parting piece of guidance?

David Greene: Understand that money is a seed more than it’s a food. What I mean is when you look at an apple, you can either look at something you could eat, or you could look at something that houses seeds that you can plant. When you grasp that money is something that can be invested that will grow, that will work for you in time, as opposed to just something that you can spend to gratify yourself in the short term, your life will change.

The majority of us are going to make a lot of money over our lifetime, and we’re gonna spend almost all of it. Your goal needs to be to keep every single dollar that you make somehow, whether that’s living out passive income or cutting out the things that aren’t helping you to achieve your goals. If you change the way that you look at money, that money will change the way that you look at life.

Interviewer: Fire Nation, you’re the average of the five people you spend the most time with. You’ve been hanging out with DG and JLD today, so keep up the heat, and head over to eofire.com. Just type “David” in the search bar. His show notes page will pop up with everything that we’ve been talking about today. These are the best show notes in the biz – time stamps, links galore. Of course, head directly over to greeneincome.com. That’s Greene with an E at the end, income.com. And Dave, thank you for sharing your journey with Fire Nation today. For that, we salute you, and we’ll catch you on the flipside.

David Greene: My pleasure, JLD. Thank you very much.

Interviewer: Hey, Fire Nation. Hope you enjoyed our chat with David today. Everyone’s scared of losing, but in my book, I teach you how to finally win. Visit howtofinallywin.com. Learn how to create your dream life one step at a time. I’ll catch you there, Fire Nation, or I’ll catch you on the flipside.