Episode #2 The BRRRR Strategy with Adam Doran

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Show Notes:

Episode #2 The BRRRR Strategy with Adam Doran

Adam Doran is a former police officer-turned wealth advisor who has been investing in real estate since 2011.  He started with wholesaling, then purchased his first rental property in 2012 using creative financing and the BRRRR method.  Through the repeated application of this strategy, he accumulated five single-family rentals in his home market of Kansas City. He later sold those properties and transitioned in 2019 to multifamily.  Through apartment syndication, he now owns 52-units with his partners and plans to continue building wealth through multifamily real estate.  In addition to his real estate investing, Adam works full-time in financial services.  His specialty is helping real estate investors insulate themselves from rising tax rates, market volatility, and lawsuits while maximizing the use of every dollar.  In this episode, Adam talks about his experience with the BRRRR strategy and gives tips on how you can get started using the BRRRR method too!

Connect with Adam Doran:  Linkedin 

Books Mentioned: You Can’t Do That: How One Family Obtained Financial Freedom By Investing In Real Estate In A Down Market


Podcast Transcription: 

Introduction  00:02

Welcome to The Real Estate Investing Made Simple podcast, the show empowering and educating people on how they can grow, manage, and protect their wealth through real estate investing. Now, here’s your host, Bailey Kramer


Bailey Kramer  00:23

Hello and welcome back to the Real Estate Investing Made Simple podcast. The goal of this show is to break down complex real estate investing strategies that you can use to grow, manage and protect your wealth. I’m your host Bailey Kramer, and today we are joined by our very special guest, Adam Doran to talk with us about the BRRRR strategy. Adam Doran is a former police officer turned wealth advisor, who has been investing in real estate since 2011. He started with wholesaling, then purchased his first rental property in 2012 using creative financing and the BRRRR method. Through reading application of this strategy, he accumulated five single family rentals in his home market of Kansas City. He later sold those properties and transitioned in 2019 into multifamily. Through an apartment syndication he owned 52 units with his partners and plans to continue building wealth through multifamily real estate. In addition to his real estate investing, Adam works full time in financial services. His specialty is helping real estate investors insulate themselves from rising tax rates, market volatility, and lawsuits while maximizing the use of every dollar.


Adam Doran  01:35

Welcome to the show, Adam. Thanks, Bailey. It’s great to be here, man. Excited for our conversation.


Bailey Kramer  01:41

It’s great to have you on. So why don’t you go ahead and start with telling the listeners a little bit about your background and how you got started in real estate.


Adam Doran  01:48

Sure. Well, thank you. That was a really good summary introduction. And as far as my background and how it led me into real estate, I was a cop for 15 years and 10 years into my career, I was tired of being what I would call chronically broke, I was living paycheck to paycheck. I think a lot of people, a lot of your listeners can probably relate to that, you know, having a W-2 for a long time thinking you’re going to climb this ladder or do better. And if you spend enough time in that you realize things aren’t getting better. So that’s what motivated me to really start exploring wealth and wealth-building for myself. And that was in 2011. I went to a seminar, I think it was a Get Motivated seminar here in Kansas City, walked away from that, realizing that I just really thought of all the wealthy people I knew in my network, and the wealthy people I knew all had some involvement in business and real estate. So I decided I needed to get involved, and that’s where it started. And then I started going to real estate seminars and conferences. I searched them out and went wherever I could go. And that’s how I got started in my education.


Bailey Kramer  02:54

Oh, that’s incredible. So you did all this education, learning about a lot of real estate related topics. What led you to the topic that we’re going to talk about today the BRRRR strategy?


Adam Doran  03:06

Yeah, so I after doing some wholesaling for a while, which was really cool too. And I would say if anybody is listening to this and they’re looking at wholesaling as a way to get started, it is a good way to get started. It teaches you how to create money out of thin air just by providing value by bringing a deal to the table. And so that was really cool. But I knew I wanted to own real estate. I believed that the true way to wealth was to really accumulate into own assets and to own equity. So I knew that was the direction I was going to go. And that’s what led me into the idea of single-family rentals. And I had the same problem most everybody else does when they get started, which was I didn’t really have much capital of my own. I had a little bit in the bank, but not enough to go buy a house. And so, you know, it was a matter of trying to solve that problem creatively.


Bailey Kramer  03:55

What was the creative strategy you ended up landing upon?


Adam Doran  04:00

So I’ve been sharing what I was learning with some people in my network and it was actually a family member that came to me and she said, you’re really smart. The stuff you’ve been sharing with me, I think is good stuff. I don’t like the idea of my money disappearing in thin air on Wall Street and traditional investments. And she’s like, so if you want to give this real estate thing a try, I trust you. I trust that if anybody can do it, you can do it. And so she offered to allow me to use $20,000 of her capital, and asked me what I thought would be a fair, you know, terms or fair rate of return? And I said, well, if I can give you your money back in 12 months at 10%, would that be good? And she said, that would be great. So there was $20,000 capital right there. I approached a buddy of mine who had a lawn and landscape business who had also gone to that seminar and Get Motivated seminar with me. And he said, man, I’ve got really good credit, we could probably get a zero percent promo interest credit card and a line of credit. So that was the other piece of capital that we needed. And with the $20,000 from the family member, plus an open line of credit at zero percent. That’s where the capital came from to go looking for a deal.


Bailey Kramer  05:15

Okay, awesome. And so the strategy you used to purchase your first property is known as the BRRRR method. Do you mind explaining kind of what that means? 


Adam Doran  05:26

Sure. So BRRRR stands for buy, rehab, rent, refinance, and repeat. And so I didn’t even I hadn’t even heard of that strategy at this time. But I mean, we kind of just figured it out. We were like, okay, so I’ve got this amount of money for a period of time and then within 12 months, I’m gonna need to return it to my lender. And of course, we wanted to pay back the credit card before we ran out of the promo, zero percent rate. So then the question was, what are we going to do once we’ve got this thing and we get it fixed up and we get it rented? How do I get everyone paid back? And so I went to a couple small local banks because some of the seminar habits I had attended said that you need to form relationships with the commercial loan officers at small local banks. So that’s exactly what I did. And one of the small local banks said that if we could bring a property to them that that was rented and seasoned is what they call it, where you’ve been collecting rents, and it was professionally managed, and we could show rent rolls that they would appraise the property and do a cash-out refi for us of up to at the time, I think it was up to 80%. We ended up doing 75, which we can get into those numbers here in a minute. But that was our exit on the back end was, okay, if we can get this thing, fix it and rent it and then do a cash-out refi as long as we buy the property right, we’ll have enough equity that we can pay back, our lending sources, our line of credit and the private lender. So that’s what we did. And I can detail those numbers if you want man just so I can show you in 2012, you know what that deal looks like on a single-family rental in the Kansas City Market?


Bailey Kramer  07:05

Yeah, absolutely. Let’s go ahead and walk through that first deal.


Adam Doran  07:07

Okay. So again, this was 2012. This is the Kansas City Market. And we were in a very blue-collar, middle-class neighborhood. So the numbers I’m about to share today, probably are not going to be similar to what it looks like today. As a matter of fact, that property is now about three times the value was but at that time, it was a foreclosure listed at $34,000. And it was a two-bedroom, one bath with a one-car garage, built in 1980. So it totally fit what I was after I was looking for two beds, one bath, I wanted something small, something I knew that if we wouldn’t be getting into more than we knew what to do with basically. So it was comfortable for me. And when we came to the bank, we already had the bank that had foreclosed on the property when we made our offer. We said look, we’ve got cash. So will you do the deal for $27,000? When we showed proof of funds, they said, Okay $27,000, if you can close in, I think it was 15 days or something. So we closed at $27,000 cash. And then we had $15,000 repairs, which of course, my buddy and I had already gone and looked at the property kind of assessed, you know, we had a good idea of what we’re getting into. We estimated $17,000 repairs, and we came out with $15,000. So with a purchase price of 27, and repairs of 15 that had us all in at $42,000. So I had $20,000 from my family member, and I’m going to have to pay her back 10%. So I’d have to pay her back 22. And then the remainder, the remaining $22,000 of our all in cost was on that line of credit, which was a zero percent which was cool. So I had figured we could rent that house at 750. We ended up hiring a property manager and rented it at 700. But that still didn’t hurt us. We were still positive cash flow. And then we went to the bank to get the property. It was appraised after we had seasoned it with six months of rent. So at this point, we’re nine months in the project because it took us three months to get it fixed. And we rented it for six months. So we’re nine months in and the property appraises $69,000. And we took a cash out refi of 75% of the value. So that gave us $51,750. Or in my head, I always remember it is $52,000. So rounding up. And so with that $52,000, then we paid back the private lender, her 22, paid back the line of credit. And that left us with not quite $8,000 in cash reserves in the bank. And so my partner and I looked at each other after that nine month period was like a holy cow. We just gifted ourselves a property because we did it with none of our own money. And that was probably just the way it all became real to me that this real estate thing really works.


Bailey Kramer 9:56

And just to take a step back, how did you and your partner actually find the property?


Adam Doran 10:02

Yeah, yeah, good question. So we did what was suggested in some of the seminars we went to. We kind of went around interviewing and vetting different real estate agents, and quite frankly, a couple of us in our early 30s talking to real estate agents, I mean, some of them didn’t give us the time of day. Some of them it was immediately clear that they really did not understand the investor mindset or how investors approach purchasing so we didn’t work with them. And the realtor we settled on, I mean, he was young and ambitious, just like us kind of knew in his career looking for a good client. We kind of ran him all over town and in retrospect, that’s not what you want to do. But it was just a process of getting to know where the market was, pricing wise, and then the realtor getting to know what we were really looking for. But after looking at probably 20 some properties and having several of them because we didn’t make a decision to make an offer quick enough they got bought out from under us. After that happened enough times, we were like, alright, man, we’re committed. If it fits this box, and we look at it, and we like it, we’re going to make the offer on the spot. And so that’s what we did. And that worked for us.


Bailey Kramer 11:11

So wow, wow. And how were you able to, you know, analyze these different properties, estimate the rehab? 


Adam Doran  11:20

Yep yep. So I had a target, net annual rate of return that I wanted. So like, if you take the total rents collected over the year divided by your all-in cost on the property, I wanted that number to come out to 14% was my goal. And we didn’t quite hit it on this one on this property. We ended up hitting I think 12% because remember, I said I thought we could rent it at 715 and only rented it 700. So our numbers actually came out between 11 and 12%. But I was okay with that. So what I did was I just created an Excel spreadsheet and kind of reverse-engineered it and said okay, to get the ratio of total rents for a year. divided by all-in cost of the property to come out to 14%. Then I reverse engineer the numbers and said, okay, we got to be all in this or less if it rents for this certain number, so, and I accounted for a couple of different things. I accounted for obviously, purchase costs, like the realtor’s commissions, property taxes, that kind of thing. I accounted for rent, and then the expenses that come off the top of the rent, right? So 750 rent isn’t really 750 rent, it’s whatever your net after you pay property taxes and insurance, and then management fees. And I always include a vacancy rate as well. The rate I used was 7%. Some people would say that’s high. I know some people use five, some of use 10. But for us, we determined seven. So those were kind of some of the factors and the variables we put in there as we calculated, you know, what do we need as far as a net annual return and we just knew we wanted to shoot for 14%.


Bailey Kramer  12:55

Okay, so the BRRRR strategy first letter, B – Buy. You know, that’s what you did. You sought out a realtor to help you look for a property, you were able to analyze it. The second is the rehab part. That can kind of scare some folks. So, how did you and your partner go about the rehab?


Adam Doran  13:16

Yep. Good question on that, too. So, I’m a real big believer in teamwork and, and, you know, everybody using their best set of skills. So I’m really good on the negotiation and working the numbers and finding the deal. I am not as good on the handy side of my friend was able to look inside the house and say, okay, you know, based on what I’m seeing here, we’ve got six grand of repairs to do in this room, and those are going to look like this this this and this in the kitchen. Okay, we’re gonna have to redo cabinets, that’s gonna be this much. We’re gonna have to retile the floor, that’s gonna be this much. I don’t know those things, but my friend did. So that’s where we pulled in his skill set as when we’re walking through the property, doing due diligence, and then we came up with that number of 17 grand of repairs that we would need total. And that was allowing some cushion like we put in there like a 5% cushion. So we had the number we thought it would be and then we added 5% on top of that, and he came up to 17 grand, everybody’s got a different cushion number for that as well. But the only thing I can say is like, you always want to kind of over guess your repairs, because as you kind of alluded to the repairs are, I mean, it’s a sticking point, that’s where a lot of people get in trouble as it costs more than you think it will. So we always kind of allow for that. And then the same thing on rents is you know, we estimated 750 rent, but we had a cushion in our budget because we might not get that. And when we did, we got 700. So I’m always a big fan of building in those different cushions to make your numbers more conservative. The one downside to that is when you do that, you miss a lot of deals because other people that aren’t as conservative with their numbers, buy the house out from under you. And again, that happened to us a lot in those first like 20 properties we looked at. But I’m okay with that. Because if on our first deal, we would have overpaid, you know, your first deal can put you out of business if you don’t do your numbers well.


Bailey Kramer  15:09

Right. So what type of rehab did you guys end up actually going through and doing to this property? This first deal you did?


Adam Doran  15:17

Yep. So we knew we really wanted to try and keep repairs under$ 20,000. Because that was kind of the threshold, we decided that if the repairs were over $20,000, it was a pretty heavy duty long term project. And we didn’t want to do that on the first one. So we were just looking at all basic stuff like painting, tiling, re-carpeting, maybe replacing some ceiling fans, replacing a door here or there, redoing the wood deck, which was a really small deck. Just really, really small stuff. And this property was a good candidate because it just didn’t have any major structural issues. I think the most major thing we did and probably the most difficult project was redoing the kitchen and the kitchen cabinets. That was, that was a really difficult thing. So that was kind of how we determined, you know, what the level of repair was that we were comfortable with. And we just kind of set that threshold and said, we’re not going to get into something that’s a big project right off the bat.


Bailey Kramer  16:17

You did the rehab. And that took us about three months.


Adam Doran  16:21

Yep. So we hired contractors for the vast majority of it. My buddy and I did handle the painting and the cabinet’s just because he had some skills there and some equipment for it. I felt like it was good for me on my first project to be a little hands-on like that, but I knew long term that I want to be more passive and more of a coordinator versus the person doing the work because it’s just not my skill set. And so, moving forward, we did on all the other projects we had moving forward, we hired out everything.


Bailey Kramer  16:51

And just to clarify, you and your partner both had full-time jobs at this time.


Adam Doran  16:55

Yeah, yeah. And so that was the other thing is it really didn’t take away from nights and weekends with family. And, and that was a good learning point to. That you want this to be a business that serves you not creating a new full time job for yourself. I mean, depending on your bent as an investor, I wanted to be passive. I know some folks really enjoy the hands on work. And that’s awesome. That’s not my thing, though.


Bailey Kramer  17:17

Totally. So you did three months of repairs, got your hands dirty, and now it’s time to rent it out. How did you go about getting it rented and determining the rent price?


Adam Doran  17:29

Yeah, good question. So we were really intent that like we had a lot of discussions about, we definitely think property management is a full time job that requires expertise and a team. And so we had agreed from day one, we’re going to hire a professional manager. Now one of the things that I’ve heard as one of the primary frustrations of people that own rentals is that it’s hard to find good property managers, and I would agree with that. So what we did was we just very intentionally launched a search, and this was before we bought the property We launched a search and said, Okay, we’re going to find and we started online. And we did some asking around our network, you know, asking on investor Facebook pages Who do you know that’s a good manager got people’s recommendations culminated a list of about 20. If they didn’t have a website, they were off the list. If they had a website, we would go to the website, the ones that gave us the most favorable impressions, we, you know, cut the list down to like five. So then we had a top five, then we started getting into the details of the information on their website about their terms and their philosophies and just kind of tried to get an impression for how the business operates, how professional they were, then we weeded it down to three. Once we have that list of three, I personally called all of their offices and set up to meet with the head of the operation, the CEO. One of them wouldn’t give me the time of day so we’ve crossed them off the list. The other two were willing to meet with me. We ran them through a pretty extensive interview and asked them questions based on what we expected out of the property manager. And one of them just interviewed far better than the other just totally surpassed the other guy who was super, super intelligent. And I could just tell he’d been doing business a long time. He knew what he was doing and it was going to take care of us. And so that’s who we went with. And I have that property manager to this day if I would acquire more single family rentals.


Bailey Kramer  19:17

What are some types of questions you asked this property manager to ensure that they were a good fit for you?


Adam Doran  19:23

I asked them about their business philosophy and their vision for what they were building and how they serve investors. And this guy actually had an answer the other person I could tell he was kind of making it up off the on the fly. The other thing that I really objected to that I saw a lot of managers did was they expected to collect their fee whether rents were collected or not, which I was not okay with. And so the one we selected said, yeah, no, I would absolutely never charge you a management fee for a month that I didn’t produce your rents. That’s my job is to make sure those come in so I love that answer. And then I just asked them questions too, about like, if we run into an eviction type scenario, what does that look like? What do you need from us? And how can you help us? And the one we selected, I mean, he’s already got relationships and a team of attorneys, like they’ve got it down to a streamlined process. And I was like, okay, that’s perfect. So those are some of the key issues that we asked about.


Bailey Kramer  20:21

And after you had the property rented, how long did you wait until you got to refinance and kind of what was that process like?


Adam Doran  20:29

Yep. So based on our conversations with the bank, which again, we went around and interviewed different commercial loan officers before ever going and looking at properties, and kind of presented them what our game plan was, which was we’re going to buy these properties undervalued, we’re going to fix them up, we’re going to rent them, hire professional management, refi them and we’re going to build a portfolio and we want to do a lot of business with you. That was kind of the business plan. So we had already had some conversations with them and basically determined that the bank we were going to work with was going to require us to have at least six months of consistent rents month to month. So we knew that was going to be the deal. So once we did have six months of rent, we came to that person and said, all right, here’s our rent rolls. Here’s our professional property manager. We’ve vetted them really well, you’re welcome to vet them too. But we’re confident in their ability and the ability of the property to keep cash flowing. And they wrote us the cash out refi loan. In retrospect, I think the fact that not only did we show up initially to say, hey, we want to do this real estate investing thing. Would you loan us money if we do such and such? But the fact that we came back nine months later and said, okay, guess what it worked, we bought the property, we fixed the property, the property is rented and professionally managed, and things are going according to plan. I think that probably really helped our case, coming into her office and saying, okay, we’d like to talk about that refi loan.


Bailey Kramer  21:54

Right, definitely. And with that refinance, you were able to pay back your investors and even put a few dollars in your pocket?


Adam Doran  22:03

We paid our private lender her 20,000 back plus 10%. So 22 grand, we paid back the zero percent interest credit card, the 22 grand we had on there. Plus we amassed some incidentals on there as well. And then that left us with just under $8000 in the business bank account. And the cool part of that is borrowed money is not technically income. So that’s basically a tax free $8000 now that we were able to invest. And so that was cool. And so we just went back to the private lender, my family member, and said, hey, you know, we got you your money back at 10%. Within the 12 month timeframe. Would you like to do another? And of course, she was like, yeah, and she actually offered a little more up this time around. And, and then we made phone calls to the credit card company and said, hey, would you consider extending that promo zero percent rate for another nine months. And so that’s how we got into the next couple of deals. We did exactly what the last R of the strategy is, which is to repeat. And we repeated four times more, and built up my first property portfolio, which was five single-family rentals.


Bailey Kramer  23:12

Wow, that’s incredible. And the BRRRR strategy is so interesting and cool for so many reasons. But the last part, the refinance, that’s kind of the key because you’re able to, again, repeat you’re able to do it again and again, while owning the asset. 


Adam Doran  23:30

Yep yep. I would say, because I think there’s reasons not to do this to court, or at least to do it differently. I didn’t know what I didn’t know. And that is the classic like, that’s the classic business owner situation, right? We just go for it and figure it out. And I feel very blessed. Very lucky that it worked out well for us. I think there were a combination of good factors. We were really deliberate in the team that we hired the realtor, the manager, the bank, and anchor. So that was important. But in retrospect, a lot of things could have gone wrong. And I think about folks who have lived through different scenarios than what we lived through during that time. And I think, well, what if a tornado came through and took off three or four roofs in one evening? Could we have had the cash to come up with the deductible for each of those three or four properties? And then on top of that, would we have had the cash to help the tenants temporarily relocate while we fix the properties? The answer is no. So if one bad thing would have happened, I’m not sure how well we could have stayed in business just for the fact that we were truly relying on other people’s money all the way around. I think there’s a lot of value and something to be said for building your own capital. And having capital available in the event that things don’t go the way you want them to. And I will, I will close that point with one other real quick story on the very last property the fifth property, we acquire because we ran our numbers, right, and because we bought the property, right, it didn’t put us under, but it was really scary that we got into the property, we got it all fixed up. And we discovered a problem with the sewer line. And it ended up being a $10,500 problem where we had to have someone come in and jack up the concrete floor, like the finished floor all through the house, because it was a house on a slab. And it was $10,500 of more repairs than we ever thought we’d have to make to that house. And it also set us back about two months on getting the property rented. And it was really just one of those reflective moments where I was like, man I’m glad this happened on the fifth one and not the first one. So I guess I would just put a word of caution to somebody that I do think this strategy is a really effective strategy for accumulating properties and building equity. I don’t think it’s wise necessarily to leverage is 75% on all your properties like what we were doing. So if I would do it all over again, I would leverage a lot less.


Bailey Kramer  26:07

Totally get that one. What are some low-cost renovations that you did that made a big difference to the renter or to the value of the property?


Adam Doran  26:18

Yep, I think two of the lowest cost easiest to get done improvements that you can make that make a big difference as far as when you’re marketing a property for sale or for rent. Paint is number one. Super, super economical and it can make a house look like a new house. The other one is landscaping, usually super, super economical. Lighting. Now granted, if you’re doing fix and flips you can go crazy on lighting and find expensive lighting. But in all of our experience, painting, landscaping and lighting were some of the easiest things to implement, at a very low cost, made a really big difference in appearance. Flooring, not as cheap, but flooring is something that can be very simple that again you can replace and make the house feel like a totally new house. And then fixtures also can be very, very cost-effective. You know one of our favorite thing to do with cabinets was you don’t have to replace the cabinets even if they’re cruddy, a lot of times, what you can do is you can cover them with a coat of kills, then give them a straight paint coat, and then put new hardware on them and they look like brand new cabinets. We did that with all of our rentals. Super, super cost-effective. So I mean, those are just a few ideas of how you can really make something really make a house pop when somebody is looking at it. The other trick that I learned was that a lot of houses have these, I don’t know what you’d call the blind style, but they’re the blinds they’ve got like little plastic slats plastic blinds and you turn the little handle, okay, those really mess up like light inside the house. And so when we would show a house for rental or show a house for sale, we’d pull those blinds down, and we’d put them in the closets, because it allows a lot more light into the house and it just creates a way better effect. People love it when they can see out the windows and cleaning the windows again, very, very cost-effective and makes a big, big difference, especially when you’re on the inside of the house. So those are just a few ideas I would have and the things that we consistently relied on to really improve the marketability of a property.


Bailey Kramer  28:27

Oh very interesting. Do you have any tips for actually finding the market because you did it where you’re local to. Do you have any other tips besides kind of your backyard?


Adam Doran  28:40

So I am kind of a traditionalist and I believe when you’re going to start buying real estate that real estate’s local, I’m a big believer in that concept. So that’s why I chose local. I think there’s definitely a way to do real estate remotely and successfully. But I do think it’s really, really heavily reliant on you forming really good relationships. And I would generally say those relationships are best formed face to face. So you’re looking at probably flying to the market that you’re interested in and spending time there to really see the neighborhood’s really get face to face with the people. I know, it’s possible to set up business systems where you don’t do that. But it doesn’t fit with my style. My style is very, very relational, I got to feel like I know and trust the people I’m working with. And obviously, if the property isn’t close by, actually, if the property is close by too, you really just have to trust the people you’re working with. And you got to know them well. And I think that comes through personal contact. I also think, just from experience here in my local market, there’s parts of Kansas City, I realized they didn’t know as well as I thought I did. And I would look at the pictures of a deal that I was going to go look at and I get all excited, and then I’d get there and I’d see the neighborhood and I go ooh, maybe not. So I think there’s a lot of value to actually setting foot in the location.


Bailey Kramer  29:58

Okay, thank you. Do you have anything else to add about the BRRRR strategy or any of the deals you did before we move on to our next section?


Adam Doran  30:06

Um, I would just say that I think this is if you’re looking to buy and hold, and you’re okay with a long term time horizon. I think the BRRRR strategy is really hard to beat as far as accumulating wealth over the long term. I think it’s an incredible strategy.


Bailey Kramer  30:26

We’re now going to move on to the Big Four, we ask all of our guests the same four questions. So number one, what’s your number one habit for success?


Adam Doran  30:35

I would say asking questions. Asking questions helps you find solutions to problems and helps you solve problems creatively. So anytime you find yourself up against a barrier, instead of thinking I can’t, or how will I ever, just asking the right questions. Like one of those might be well when we ran into that unexpected sewer problem. And I could tell it was going to be a really big expensive deal. It was really disheartening. And I probably could have got, you know, a mindset of oh man, this is going to do this whole deal in, we’re never going to get this place rented, how are we ever going to fix this or afford it? And I just thought about it for a while and I was like, well, who would be the first person I should call that knows enough about sewers to help us find a creative solution? And that led to calling three local companies. And then when their people came out, I’d say, okay, so if there were like two or three different ways to do this one being the most expensive one being the least expensive. Could you break down what that looks like? So just learning to ask questions that lead you towards a solution to your problem. I think that’s an incredible success habit. So the next time you come up against something that seems undoable and impossible, it’s a roadblock. What are the questions to ask that’ll help you to start finding the solution.


Bailey Kramer  31:58

That’s a great point. Number two, limiting beliefs are thoughts in our heads that hold us back from realizing our full potential. What is one limiting belief that you were able to crush, and how did that impact your life?


Adam Doran  32:12

My limiting belief, when we got started in this real estate venture, me and my partner, was the fact that I didn’t have all the skills. I didn’t have all the knowledge. Like I told you, I’m not a handy guy, I can’t walk through a house and tell you what it’s going to take for repairs. And I didn’t have the money in the bank account either that said that I could go buy a house. So those were the primary things on my mind that would have kept me from doing this. So those were my limiting beliefs was I don’t have everything that it takes. And the way that I overcame those, again, was starting to ask those questions of, well, could I partner with somebody, could I build a team? Is there somebody I know that has that skill set? If I don’t have the money, how can I maybe get a hold of the money, you know, and then the family member volunteered. And then my- And a lot of times, that’s it to you may not even get to contacting the right person or asking the right question, but I really believe and you hear a lot of personal development gurus talk about this. I really believe in that law of attraction that if you really start focusing yourself towards a purpose and a design, that things just start to kind of gravitate towards you that need to.


Bailey Kramer  33:22

For sure, and telling yourself, how can I instead of  I can’t?  So number three, what advice would you give to someone who’s considering investing actively or passively in real estate for their first time?


Adam Doran  33:36

Well, that’s kind of a loaded question because I think whether you’re going to be active or passive, I think that that looks very different. I’m going to go towards the person who’s looking at investing passively for the first time since I can relate best to that. And what I would say is really understanding your investor ID is important. Are you okay with putting your money into something long term? Do you feel like you need to have your money back in six to 12 months, like really understanding that investor ID because not everybody’s cut out to do real estate investing. And it would be good to understand kind of what your investor profile looks like before you jump into real estate deals. So that would be the first thing. I think the second thing would be let’s presume that real estate fits your investor ID. Learn to value the team and value relationships and value other people’s expertise. work with people you trust, stay in your lane, what you’re good at, do that part. But if you’re not good at it, trust the people that you’ve enlisted to do that and be good at that. So that’s, that’s another thing I would say. And then I would say the real big key, especially when you’re looking at a first deal, I talked about how we ran our numbers super, super conservatively. And it’s a really cliche thing and it’s also really true, is that you really do make your money on the buy when you’re buying a deal. So that really is the critical moment. Like you’ve got to buy your deal, right? Don’t overpay because it’s just, it’s really, really hard to try to create value if you’ve overpaid and there’s just no place to, you know, get that money back. So buying right is just so crucial. Make sure you buy right.


Bailey Kramer  35:23

Yeah, that’s great advice. And like you said, you make your money sometimes when you buy now, that’s definitely a safe way to go. And the fourth question, what is your favorite real estate business or personal development related book?


Adam Doran  35:38

I’ve got a lot of those, especially in the personal development books, man, I’d love to read those. But I’m going to go with one that’s specific to real estate because it, I think, will give someone the confidence who’s been really thinking about making the jump into real estate. I just think reading other people’s stories just everyday people reading their stories, hearing their stories helps give us confidence and inspire us. So I’m going to make a book recommendation on getting into real estate investing. And it’s called, “You Can’t Do That: How One Family Obtained Financial Freedom by Investing in Real Estate in a Down Market”, long title, but it’s by a guy named Jim Burmeister. And it is actually available, I think on Amazon. It’s kind of a hard book to find. So you have to make sure you get the author’s name, Jim Burmeister. And it’s titled, “You Can’t Do That”. Really, really good book. And he talks about how he brought up this idea of getting into real estate investing to friends and family members and bankers, and they all said, you can’t do that, you can’t do that. And he went and did it anyway. 


Bailey Kramer  36:41

Sounds awesome. I definitely will have to check that book out. 


Adam Doran 36:45

Great book. Great book.


Bailey Kramer  36:47

So Adam, where can the listeners get ahold of you?


Adam Doran  36:49

The best way to reach me is on my LinkedIn profile. So hopefully they’ve got my name there, but it’s Adam and the last name is Doran d-o-r-a-n. I’m on LinkedIn every day. I use that as my primary communication tool for meeting new people, so if you connect with me on there and you get a message back from me, it’s actually me. That’s me communicating there. So that really is the best way to reach me.


Bailey Kramer  37:12

Okay, awesome. Well, Adam, thank you so much for coming on the show today. You added tremendous value to my listeners. And now thank you again. Thanks, Bailey. This has been a lot of fun man.


Outro  37:24

Thank you for listening to the real estate investing Made Simple podcast. For more resources or to connect with us further, please visit our website, http://www.baileykramer.com. We’ll see you next time.