I’m very pleased to have my friend Josh Dorkin on the show today. Now Josh runs BiggerPockets.com which is one of the most popular real estate investing sites on the Internet.
The numbers for his site are really crazy. He’s got over 200,000 members with many of them paying a monthly fee. His forum boasts over 850,000 posts. He has 35+ writers on staff, runs a top 25 business podcast on iTunes and a successful publishing company as well.
Needless to say, Josh is easily one of the most successful Internet entrepreneurs that I know and I’m really happy to have him on today to share the secrets to his success. Enjoy the show!
Get My Free Mini Course On How To Start A Successful Ecommerce Store
If you are interested in starting an ecommerce business, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
What You’ll Learn
- How Josh created one of the most popular real estate sites on the net
- How Josh started a successful forum from scratch
- How Josh got early visitors onto his site
- The strategy Josh used to build up traffic by engaging in other forums
- Why Josh modeled his site after Yahoo early on.
- How Josh started a blog that catapulted the growth of his site
- Why Josh believes in constantly differentiating his revenue stream
- How Josh coped with being slapped by Google
- How BiggerPockets.com makes money
- Josh’s philosophy on real estate investment
- If you need a website logo or website design, make sure you check out 99Designs.com and enjoy $99 in savings by clicking on this link!
Other Resources And Books
- Bigger Pockets Blog
- Bigger Pockets Podcast
- BiggerPockets Presents: The Ultimate Beginner’s Guide to Real Estate Investing
- A BiggerPockets Guide: How to Rent Your House
For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over a hundred thousand in profit in our first year of business. Go to www.mywifequitherjob.com for more information.
Now before I begin, I just want to give a quick shout out to this episode’s sponsor 99designs. Originally, I wasn’t going to take any sponsors at all, but 99designs actually caught my eye because, well I suck at design. In fact, when I first started my online store back in 2007, the design for my website was terrible, and I had no idea who to turn to for help.
So what is 99designs? 99designs is a site where you can provide a description of anything that you want designed whether it be a logo, a web page a t-shirt, pretty much anything, and have dozens of designers compete to deliver you the best design. And by best, I mean that you actually get to choose your favorite among the bunch. When I first started making websites, I was completely clueless and I had no idea how to find a great designer, but thanks to 99designs, you can instantly have access to over 315,000 graphic designers who are competing to help you.
So, if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit, and if you use that link and tell them that Steve from mywifequitherjob.com referred you, you will receive a special power pack of additional services for free. In fact, by signing up through 99designs.com/mywifequit, your design listing will be bolded, highlighted, given a prominent background in feature before all regular listings, so your request stands out among all the designers. So if you need a logo, a website, t-shirt, business card, or anything designed at all, go to www.99designs.com/mywifequit, and tell them that Steve from mywifequitherjob.com sent you. Now on to the show.
Welcome to the My Wife Quit Her Job podcast. We will teach you how to create a business that suites your lifestyle. So you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.
Steve: Welcome to the My Wife Quit Her Job podcast. Today I have a very special guest on the show, Josh Dorkin. Now like many of my other guests, Josh is actually also someone who I met at the financial blogging conference the first year that I went, and to be honest, had I known who I was chatting with at the time, I might have been a little bit more sheepish, but here is how we met. Now I randomly strolled into a room and just sat down to chat, and here is Josh kind of sitting back in his chair and bursting on one of my Asian buddies Viet Do.
Steve: Incidentally, Viet is another person I’m going to have on the show later on, but anyway, when I saw Josh, was ragging on Viet big time I decided to sit down and enjoin Josh in the burstage, and after that we actually started talking a bit. And it was only later that I realized that he was the brains behind BiggerPockets.com, perhaps the biggest real estate blog out there period. Now, it’s actually much more than a blog. I would call it a gigantic resource platform for real estate. Bigger pockets boasts over 180,000 members, 550,000 monthly unique visitors, a forum with over 850,000 posts, tens of thousands of articles, the site is just ridiculous. Bigger Pockets is easily the most respected online real estate information platform out there and I’m just really happy to have Josh with me on the show today. And so Josh welcome to the show, really happy to have you man.
Josh: Thanks man, thanks man yeah I’m glad you brought out all the burstage in the introduction that’s awesome.
Steve: Well see I liked you right away because you are bursting on him ironically. He was not doing too good of a job at defending himself either so.
Josh: Yeah, that’s Viet man. That’s how he rolls. For those of you guys who will have the pleasure of listening to him down the line, he is an amazing guy and he is awesome. He is one of my favorite people on the Thinkon group so to speak and we were just having fun, but yeah, I’m glad you walked in so I could burst on you or something.
Steve: I don’t think we are at that level yet but maybe after this interview, perhaps.
Josh: Nice, yeah.
Steve: Give us a quick background story. Tell us about how Bigger Pockets got started. I kind of want to go to the very beginning when you were like a total nobody.
Josh: Okay, I’m still a total nobody, but yeah listen– long story short I was doing all sorts of random stuff for employment and I had built websites for fun. Previously I had a real estate license previously and sold real estate as an agent– didn’t love that very much, but what happened, I was teaching high school at the time in southern California and one day my brother calls me and says hey Josh I just bought some property. I said, oh yeah tell me about it.
And he is like I bought this multi families and it’s doing great and I’m making all this money and I was like, oh okay, money that sounds good, let’s do it. What do I need to do, what are you asking of me? He said well why don’t you come down and pick up some property yourself. I said, yeah, okay cool. So I hoped on a plane, flew out and like yeah, I could figure this out. So I looked at dozens of properties and found one that I liked and bought it. I knew nothing, I literally…
Steve: Just like that, it’s like buying candy from like the supermarket.
Josh: I’m not that loaded. I was looking in an area that was not that expensive. I bought a four family property for, I think it was a hundred, it’s either 90 or 105,000, and I had a fourplex. And I was like all right, cool I got a fourplex, now what? And so I didn’t know what I was doing. I’m a person who thinks of himself as fairly smart and I thought I had it figured out. So I quickly realized that there is more to real estate investing than kind of the basics, you know what I mean. You can analyze numbers; you can crunch numbers and pick up a property but then what?
So kind of cutting to the chase I had hired some management to take care of my property and that was a big pain in the neck and that led to problems and I ended up firing the property manager finding another one, firing, finding another, firing, finding another, get ripped off by them on ward and onward. Ultimately, I found myself in a position where I realized I needed to know a lot more, and I needed somewhere to go to.
So, I had a problem which was I getting screwed left and right, I was making bad decisions left and right, and the solution wasn’t really out there for me at least. So the landscape back then was, to learn about real estate investing you can go to the book store and buy books, you could go online and find some material, or you can go on the television late night TV and buy some get rich quick course. The New Yorker in me doesn’t look highly upon the get rich quick stuff, you know the both domino as we say, hopefully I can say both domino on your show even twice.
Steve: I’m going to edit this afterwards, so you know I’m only going to filter out the good things that you say about me.
Josh: Nice. Yeah so, you know there is the bad guys, not necessarily all bad but they are the guys whose job it is to just sell you until you are broke. And then there is really nothing else at this time. And all the websites that existed were all kind of filters for those same the late night TV guys. So there was really no independent body where you can go and find anything about investing. I said okay, that’s crazy, I’m going to create a site where I can get answers to my own questions. And so I did and I put together a forum and a bunch of resources I found useful and had a website, and there was nobody on it. And that was the beginning. The next steps I had to figure out how to get people.
Steve: So the forum wasn’t the first thing that you added right.
Josh: It was– I created– it was pretty close in time, I mean it’s almost ten years now but I created a bunch of directories of resources that I thought were helpful and then I launched the forum. And the forum at that point was me. It was me and myself and you know again I had to figure out how do build a community? Where do I get answers to these questions that I have?
Steve: Yeah, so I was going to ask you about this later on but since we are talking about forums right now. How do you start a forum right, a lot of people try it and as soon as it’s like a ghost town, it’s not going to attract anyone and they won’t come back, right, how do you seed a forum without traffic?
Josh: If you ask me, hey would you start a forum with me, let’s go create a site on this, I would say no way, not going to happen. I have no interest in it. It takes a long time, it’s a lot of work, and you know, like you said if it’s a ghost town you are in trouble. So the key was, you know first of this was a hobby side at first. This was not a business for a long time.
Josh: I was making money from it because I put on some AdSense on but by no means, it was like you know getting a lot of traffic. So what I did to get people on was like word of mouth. I would talk to other investors that I would run across whether it was just locally or I would go on answer sites. So instead of– I thought it’s kind of shady to go on your competitor site and to talk about your product even ten years ago before people were really concerned about that, I just didn’t want to do it. So I would go on financial sites primarily and I participate and I would always create a signature, and the signature was Bigger Pockets real estate investing community.
And so when I would jump on and I would be able to answer some questions about real estate investing at that time. So I would answer the questions and I would have my signature and low and below people would drizzle in through the link in the signature and come to the site. So that was where the first you know few hundred people that we got on the site came from. It was just me you know I wasn’t pitching it, I was not selling it, I was not promoting it, I was just participating, connecting, engaging on other communities and having that signature at the bottom got people to notice. They saw that I provided value and they wanted to come check it out.
Steve: Interesting. So the forum, were you posting a lot yourself in the beginning?
Josh: Our forum?
Josh: Well, yeah because I had questions. So I was posting questions.
Josh: Yeah, I wanted answers to my questions. That was why I started the site. I was not creating a place to help other people; this was a place to help me.
Steve: [Laughter] Okay.
Josh: This was 1000% selfish. My goal was help me become better at what I’m doing. And inevitably what happened was over time, I realized that some of the questions that were coming, I could easily answer so I was answering those. And little by little, I was like wait a second, there is more here. It can’t just be me and selfish me, there is other people who are getting value. So let’s keep going at this, let’s see what we can do here. And so again it was a hobby side, it was making me money, I was teaching high school, I was making some side cash, and mostly kind of plowing it back in, ultimately hiring a developer at some point and kind of handing of the dirty work so to speak…
Josh: To somebody else, I mean, this is again this is almost ten years ago, so my space was hot right. I see my space, I’m like, wow social network. We have to do that. So it went from forum to social network, the forum always kind of stated the hub and the blogs were kind of being born right around then so I created a blog. I didn’t know what I was doing. I would like check out this cool article and then I would cite a paragraph from The New York Times or you know I think this is garbage and I would cite an article from Steve Chou, or whatever it was, you know, and yeah you caught that good.
Steve: [Laughter] You got me mixed up with Viet actually. We look alike.
Josh: No, I’m not going there man, don’t try it. So little by little, we just added pieces to the puzzle. We added the profiles and the blog and then we added a property directory and some other stuff and you know, it just got bigger and bigger and you know I hired more folks and little by little, we got to the point where we are today and you know I’m happy to talk about all the interesting parts.
To me I really see the site to day as; we’ve got community as one component. That’s kind of like the forums, the interaction and the blogs, and really the vibe that kind of flows from us the content side where we’ve got again the forums, there is a ton of content I mean 850, 000 posts those are enough to read for a lifetime. The Bigger Pockets blog which went from me just as the blogger, now we have around 35 people who write for us every week. We have the podcast, Bigger Pockets podcast which is a Brad and Tuner my co-host and I weekly interviewing upstart and sophisticated investors in real estate and then we’ve got some tools, we’ve got kind of like a tools division so to speak where we are launching some other cool products down the line.
And then we have a publishing company we launched a publishing company and we have two books right now, we’ve got a third that’s going to come out next month or so. One of those books has been a top ten real estate book on amazon since pretty much launch. We are like the only non-traditional publishing house that’s been on the top ten.
Steve: That’s awesome man. That’s incredible. So you know outside of your forums, your signature, and your email, like how did you get traffic to your site early on? Like I’m more interested in like the very beginning right, because you are well established now, but I kind of want to hear your struggles early on and how it just kind of built up and what the logical progression was and what you did gradually over time to build it to the site that it is today.
Josh: Sure, and don’t be fooled anybody listening, there are struggles every single day. Whether it was day one to today there is always going to be a struggle at least in my mind at least I see it that way right. Because I don’t ever want to feel comfortable, I don’t ever want to feel like we are where we are inevitably going to be, because then I’m comfortable and I’m not pushing myself to improve and build up. And you know ultimately my goal is to build this into something amazing you know and continue. So to your question on how we built it up, so really it started with the forum posting.
The directory started to get traffic. This was before we were talking about SEO. I mean this was pre SEO, SEO. It existed but nobody– there wasn’t– I don’t think there was a language to discuss it, there was no magcuts, there was no communiqués about how do you rank. It was just, you know there were a couple of websites forums, webmaster forums, I remember a site called like webmaster world, I used to frequent that, a digital point forums some of the others. Also I had my signature on those when I participated and again I asked questions, I answered questions, engaged, some people actually seemed to be interested in real estate so they would come over, so we got some traffic from that.
The directories that we built, they weren’t really any like it. So when people would come across them they would say this is great and they would link to them. And we didn’t have the Facebook or twitter shares or all that stuff then, it was just linkage. And so I was doing link building. I was contacting people and saying hey I just built this cool site and this directory, you know check it out, let me know what you think. And if you like, it you know I would love if you would point a link to us. It was just hard work and outrange.
Steve: Okay. And what is it? This is a directory of real estate agents.
Josh: I had a directory of banks that offer these free listings on their site. I offered you know a directory of tools that were calculators or property management. Whatever it was, we had just kind of all these vertical directories that made sense within the niche. Stuff that I would be interested in, hey, I remember I came across that cool site you know instead of just trying to keep track of it, I would just put it on this little hand correlated directory.
Steve: Okay. So you are like a Yahoo kind of, for real estate?
Josh: Well that was exactly what I modeled it off of. I remember Yahoo being the greatest site since sliced bread, it was the biggest and the best in the very beginning, and I was like I got a model of this somehow. So doing the directory thing made sense for me, and it worked. It started to bring us traffic little by little. Some of those people would come to the forums and they participate, and then inevitably because we got all those links, the search algorithms, we started to kind of do better and better. There was some paid stuff I think early on Yahoo directory, I don’t remember if we were paying in the very beginning, but we made it on to their, and I think it was like the, what was it called? The open directory to remember.
Steve: Yeah, yeah DMOZ, yeah.
Josh: DMOZ. You know, some of those– I didn’t really pay for anything else, so I just wanted to focus on the ones I thought were the most credible. But yeah, little by little it was just that plus a lot of time and organic growth.
Steve: Okay. And then when did the blog kind of come into play?
Josh: The blog is probably eight years old as well, eight and a half. The blog has been around. And the blogs started to drive a fair amount of traffic because the blogs you know the word press was fabulous as SEO. And so the content that I was writing was picking up juice so to speak, and there was a core group of real estate bloggers back then. They weren’t thousands and thousands; they were, you know, we all knew each other. They were 20 or 30 maybe. Kind of like the Thinkon kind group, the original one.
It was really small. We all knew each other, we all linked to each other, we all commented on each other’s sites, and we all pointed to each other, and all we all helped each other out. And little by little, we all kind of grew together which was really nice to have that community of folks to kind of help out. And now there a lot, I mean those people high ups at zeros and truly, I mean those guys are running the show at a lot of these big companies.
Steve: Wow, that crazy. I’m just trying to get an idea of how your site actually makes money. I know you have a crap load of traffic right?
Steve: But how do you actually take that into paying customers?
Josh: Sure, so we are not– fundamentally we are not an E-commerce site. Fundamentally, we are not a community. We are kind of a blend of a lot of different models which were somewhat intentional.
Josh: So you know my biggest is that one funnel is going to shut off. And if that one funnel shuts off, I’m screwed right. What’s the biggest funnel, what’s the funnel that we all think about? It’s Google right, I mean we all say Google is our god, Google feeds us, Google takes care of our families. If you are in the internet world, you are, you know you really owe a lot to Google, and my thought was, well okay, Google is this primary. What if Google comes after me and Google doesn’t like what I do, because they did that.
Because I got slapped by like the first Google slap back in the day, years and years ago, the pre pad or the pre whatever the heck they call it these days. I got slapped because I was using a company called text link ads, and I was buying text links. And I was putting them on the site. And Google created this policy saying, you couldn’t have these paid links. And I was like well sure. I’m making few hundred bucks off text links why would I– forget it. So I lose a little bit of Google, who cares? And turns out that was a really bad decision. I went from like PR6, PR7 on some pages got down to like PR2 and 3.
Steve: Wow, okay.
Josh: The site lost a ton of steam, a ton of traffic. I disavowed all the text link ads– not that the service was bad, I loved the service, but because I realized that Google controlled me. And so I did that and lost all that on that revenue, but it was fine we made up for it eventually, but in terms of the different streams I wanted to have just different kind of revenues streams and I thought it would be interesting because I saw these product lines in the real estate investing space and said why wouldn’t anyone want to have it in one place. Why would they not want to have a great blog that they I could go to, a good community, they could go to, tools, resources, directories all that in one, especially if we can create a brand that they trust.
And so my goal from the beginning when I decided this isn’t a hobby site anymore, this is going to be a business credibility. I want to go 1000% for credibility, we are not going to allow shady stuff, we are not going to allow, you know, we created really strict rules and we were really hardcore and a lot of people got pissed off, but it allowed us to kind of establish that brand amongst people who weren’t just the marketers trying to take advantage of people but it was individuals who were trying to help one another and they loved it.
Steve: So by rules you mean you prevented like some the marketers from just openly advertising on your site.
Josh: Exactly, yeah so that or you know going on people’s profile and sending you know, we had it, like the first version of our profiles had a wall like on Facebook. Not a Facebook wall like a my space wall, so I could go on your profile Steve and you know I could leave comments below and those glittery stars and all that stuff we used to have. We didn’t have all that fancy stuff, but you know, so what the marketers were doing, was they were going on and they would start spamming people on their profiles. And we are like okay, we got to stop that every time that they would do something we would realize, oh no we got to put a stop to this because the average Joe who we were in business for, was getting pissed off.
And the marketers, you know I don’t have a problem with marketers as long as they follow our rules. If you interact, if you share, if you engage and you are not spamming, cool. Come hang out, make money. We have a lot of marketers to make a lot of money of our business, off of our platform, but they do it within our rules and within our guidelines. The folks who kind of violate that we have an issue with. But to your question, your question was on how we make money. The answer is we have– AdSense was really the very first way to make money. I remember that first like you know 12 cents cheque that I got, and so AdSense, other ad networks. I mean we tried them all with chedekas [phonetic] and you know we have kind of toyed through, pretty much all the major ones.
Steve: Which ones are working for you the best?
Josh: AdSense, nobody comes close.
Josh: So we have got the networks, I do direct ad sales as well, so you know, folks would come and buy inventory from us directly. We have a newsletter that goes out twice a week to 70,000 or so and that’s, you know we are selling that inventory on directly on the podcast and of course direct on the site as well, so we’ve got that. We have paid memberships which we added a few years ago, so we have two tiers of memberships and the idea behind those was, you know first of all the idea with Bigger Pockets was let’s democratize information. Okay, we don’t want all the information to be controlled by one, you know a dozen or two dozen of the gurus, we wanted it to be open and available for anybody.
So once we created paid accounts, we couldn’t put content behind a fire wall, a pay wall because that would violate our own state out of what we wanted to do. So, now if we did that, we probably would be making a heck lot of more money than we are, but I thought it was important that we keep it open. So the paid memberships allowed advertising– right now the only way to advertise is actually through a paid membership. So a marketer would need to get a paid account to promote. You get access to tools like our calculator and things like that. And then kind of like a LinkedIn mix, where you know on LinkedIn if you get a paid account you can search for people better, you can narrow them down by zip code and ranges and…
Steve: I see.
Josh: So you’ve got abilities like that. There is a whole sweet of things that you get. We’ve got a discount program, a perks program so we have partners like Transunion that will provide discounts to our members on some of their product lines for being a paid member. You know, we just kind of use the scale that we’ve developed to negotiate deals for our users, for those folks who are going to pay an upgrade.
Steve: So even a free member can have access to the entire library of information on the forum right.
Steve: Wow, that’s crazy. So what percentage of people actually pay for the membership then?
Josh: I refuse to answer that.
Steve: You refuse to, okay, all right. I was just curious thought I could slip that by you but…
Josh: [Inaudible 00:27:36], I will not be answering, but you know we’ve got thousands of paid members and there is a ton of value that comes with it. There really is and all our paid members love it, I mean these guys, we actually did a survey. Here is something crazy, we did a survey about a month ago. We were curious; we said okay, we’ve got these guys on Bigger Pockets. These are all people who want to learn how to be real estate investors or who are active, you know we’ve got guys who’ve never done anything to people with thousands of properties and thousands of deals. What’s the difference between our paid members– you know two paid levels and our free way for users. So, we did a survey and I’m going to chop the numbers but I’ll estimate. I believe our pro users profit last year in 2013 from real estate activity were somewhere on the scale of 90,000 dollars for our pro users.
Steve: Per person?
Josh: Per person.
Josh: The profit– now again this is only based upon those who answered, we had hundreds of people take the survey. The profit for non-pros who answered was right around 20,000.
Steve: So these are just people who are using your site as their marketing channel. And there you are telling me that they’ve made 90,000?
Josh: Well so this is what’s happened. It is not through Bigger Pockets, it’s just they’ve made 90,000. They make on average that’s kind of, what they have made right. So here is kind of what happened? Bigger Pockets started as this place where people get together and share information. What happened over time was, the people who engaged and connected and gave back to other people who helped out started to build reputations for themselves. They became– people got to know them as credible folks right, these guys give up their time, their energy, they share really good information, they are helpful when somebody has a question. Hey help mean analyze this deal, or I’m about to do this, what should I do, everybody starts to see it.
So the community is starting to figure out who are the leaders in the community. Well then what happened was this, little by little those people were being– other people were attracted to them. And they were like, you know what, you are a credible guy, you know everything about flipping houses, I’ve got a deal I need some help with, you want to go into this with me? I’d love to partner with you. So now, these guys are in bed and they partnering and working together. Or hey I need some money, or hey listen I’ve got a couple of hundred thousand dollars, I know you are working on a bunch of projects, can I lend you some money and finance your next project.
So organically, these people are getting together and doing business together. And that’s the greatest thing today that most people don’t know about Bigger Pockets is, if you are active and you are interacting and you are engaging in forums in the community and helping other people out, it’s going to increase the likelihood that you are going to do business. It’s amazing, it’s amazing. And it just happened because people developed the sense of trust and other people are like “oh, I know that guy, I want to work with that guy.” And they connect with the social network and they start chatting online, and they start chatting in real life, and they do real business together. And hundreds of millions of dollars is done through Bigger Pockets now.
Steve: That’s awesome. So have you found yourself doing any deals? Do you do real estate anymore?
Josh: I do not.
Steve: [Chuckles] Okay.
Josh: I do not by virtue that, you know and is it an excuse? Yes, is it a legitimate excuse? Absolutely, when the market tanked, I unloaded the last of my property and at that point, I was so busy with the business. I was working a hundred hours a week. I couldn’t do anything else. I just– It was impossible. So, I’m sitting around waiting, I’m watching and I’m like, oh man I wish I can get some time but it’s hard. Now I’ve got a business, I got a lot employees, I’ve got a staff, this is my primary focus. We definitely encourage people to get out there, you know if they are working a job, to get out there and do real estate, but by virtue of my time constraints, I can’t do it personally.
I’m certainly looking forward to the day that I could go start picking up some properties, and the beauty is this. Listen, I’m the host of our podcast right? I get to interview active successful real estate investors every single week and every single time I do it, I learn something new, and I get excited about a new strategies. So for me, I’m a student just like everybody else. Now I’ve been learning by about ten years of being a master of all this stuff, but you know I’m just as much a student as anyone else.
Steve: So you mentioned that, to switch gears a little bit, you mentioned that you’ve been trying to Google proof your site right.
Steve: So this is what is going on in my mind right now. You got hit like panda or something a couple of years ago and then there is this huge real estate crush right?
Steve: So I would have expected that your business would have tanked during that crash especially with the combination of the two, so how did you kind of overcome that?
Josh: So, I think the beauty of the model is this, and I think this applies in some business, this applies in the stock market, and it applies in real estate. You can make money in any market in the stock market. You just have to know what you are doing. If you are a short seller in the stock market, you can make money when the market is getting killed. If you are long, you can make money when the market is going up. But you can also lose as a short seller when the market is going down and you can lose bad as a long investor when the market is going up.
So as a stocker, you don’t have control of your own destiny. You are kind of at the will of the market and you are at the will of the CEO who is you know doing lines of coke you know one day and gets busted and suddenly the stock tanks right? With real estate, the nice thing about it is, you can make money in any market, in any location, regardless of what’s happening. You just have to know what you are doing. So you know, if I buy property say I buy a house, you are in the Bay area so say I buy a house in the Bay area, and I buy it such that it’s cash flow positive, which is kind of tough in the Bay area.
Steve: It’s impossible.
Josh: Yeah. You have got to invest at a distance. But let’s go hypothetical and say I can buy a property in the Bay area and cash be cash flow positive, right? Well if the market tanks am I still making my rent.
Josh: If I have got a tenant in there am I still making my rent?
Steve: Yeah if you got your tenant in there.
Josh: Yeah, so if lose your tenant, you know the key with real estate is you are the master of your destiny right, if you pay too much when you get in, yeah you can find yourself in trouble. The key is to find properties– at least let’s take it back. The key in my mind is to only buy properties that you can get a significant discount from. I would never buy an income property in the Bay area unless I could get a ridiculous discount. Not because I think the market is going to tank, but just for insurance.
I’m not an appreciation guy. There are appreciation folks; they are called gamblers in my book. Now there is people who bet on smart appreciation, they are building or buying in the way of development, I think that’s intelligent. But you know there is still a risk that you know it’s going to hit the fan. But if you buy in like a solid blue color neighborhood, you are not going to see huge market fluctuations like you would in other hot markets so to speak, right?
So if you look for good solid markets that are sustainable they may not make a lot of appreciation but there is stability, there is job improvement, there is some kind of growth or stable economy, you are going to be pretty well of as long as you can buy at a decent price. So that’s kind of my thought is, focus on that, instead of you know really kneeling on appreciation and other kind of bets.
Steve: I see. You know in the Bay area here especially, it’s always an appreciation play.
Steve: There is no such thing as– and the properties have just increased in value ridiculously. I think this is the only part of the US where that the case pretty much. So what you’re saying is you know what you guys promote, is that…
Josh: And I didn’t– I just realized I didn’t even answer your question.
Steve: I don’t remember what my question was.
Josh: I just remembered it, so your question was, well the market got hit, what– I’m surprised you guys didn’t get nailed to the floor. I mean I think you wrote my eulogy right here on the podcast, you’re like why aren’t you dead and out of business right. That was really nice of you by the way, I appreciate that.
Steve: Yeah well, you overcame it clearly, so I was just giving a little nugget here so you can tell your turn around story.
Josh: Yeah, tell that to the audience. So the beauty of the real estate investing market is when the market is great, every one jumps in. So everyone is jumping on Bigger Pockets, hey how do I make a buck, how do I make money, what do I do? When the market is getting slammed, the people who own property are coming on saying, oh what do I do? You know my equity business is shrinking, I’m in trouble, I’m losing tenants, I don’t know what to do. And the guys who have cash are saying, oh you know, this is a good opportunity to jump in while other people are bleeding. So essentially, we serve kind of all sides. You know make money when the market is up, make money when the market is down so, you know through all the bad markets, we’ve been fine.
Steve: I guess that makes sense and in fact your site probably does better when there is extreme condition, right? Whether it’s really hard or really bad.
Josh: You know, I don’t know in tracking it over the years I think it’s just kind of a consistent, steady, nice flat line, pretty good growth regardless.
Steve: So today, would you say that Google traffic is not one of your top traffic sources, is most of it direct at this point?
Josh: It’s not a hundred percent direct. It’s not fifty percent direct yet. Google is definitely very important to us, but we’ve expanded our reach, right. The podcast has definitely been really a great provider of users, You Tube.
Steve: So let’s talk about podcasting since I just started mine relatively recently, so how do you kind of measure the effect of the podcast on your business?
Josh: That’s tough, that’s tough. I could tell you how I do it, first obviously we care about listener growth, so we know that if our listenership is growing our brand is– our audience is growing and our brand is growing, it’s another place– it’s another market place right? So I look at these kind of market places, iTunes is a market place, Google is a market place, Amazon is a market place, You Tube is a market place, you know any where we can produce content is a market place. So, we measure success from the podcast one from grown listenership, two by seeing people introduce themselves in our community and saying that they found us through the podcast.
Josh: So we know that we are reaching new folks because these are people that are just flat out telling us. If we were not getting that, we’d probably have to do more surveying and survey the users and saying hey guys, how did you find us, was it the podcast, was it Google, whatever it was. But because we’ve got this vibrant community, and people jump on and introduce themselves typically they will jump in and tell us how they came on.
Steve: Okay that makes sense. Yeah, I mean for my podcast I have already seen a lot of people hop on to my email list and the first thing they do is, they hit reply and say hey I found you through the podcast so I was just curious, it’s not really easy to make that correlation at least initially yeah.
Josh: It’s not, you know, I love podcasting. I think– we just put out our 71st show, we’ve done a show a week for 75 weeks and it does get pretty– it gets exhausting a little tedious after– 75 is old, it’s a lot of work. But it’s rewarding in that every time we put out our show notes, seeing the commentary. When the users introduce themselves and say hey listen the show is really helping me out with my business, I appreciate everything you guys do, that to me is the measure. You know, we know that– because you know Bigger Pockets to me is really more than just a site. Bigger Pockets is kind of a vision of creating a community of people who help one another to be successful in real estate.
And so for me, I wanted to become a verb one day, you know I wanted to be– I want people to be just being good to each other in real estate through Bigger Pockets you know whatever that means. And I think it plays itself out similarly in that through our platform all these people locally have started to come together. So there is now these local groups of people who through Bigger Pockets are linking up. In San Francisco we had a meeting with like 150 people, New York there was like 150 people last week. We’ve got like DeMorein and Miami and Tampa and Austin and Dallas and Denver. I mean these are users who are saying you know what, I want to connect live with other people, let’s use this platform to create some get togethers and do it, and they are. And they are doing business, they are linking up, they’re helping each other they are mentoring one another, it’s amazing, I mean it’s just out of my hands at this point and it’s unbelievable.
Steve: It sounds like you need to start a conference.
Josh: You know what, don’t pressure me man. We did a conference– I actually did a conference this year, in two and a half months I planned a conference. We had about 275 people in attendance on the first conference and by the way sorry about the beeping, they are doing construction across the street and I can’t filter it out so.
Steve: That’s okay.
Josh: Yeah, we had 275 people, we had 30 speakers. It was– we had like 15 sponsors it was a monster success, everybody wanted us to do it again and I planned the whole thing by myself and almost killed myself.
Josh: So the next year when I was going to do it, we were having another kid and I was like yeah I don’t need the pressure this year. We’ve had so much going on, I don’t need the pressure. And of course not a day goes by where people on the site are like, Josh where is the conference, when is it going to happen? We want another one and I know it would a) be a good place for people to get together and b) it would probably make us some money and c) it would help us build our brand. It’s coming at some point– I just, you know, there is a lot happening man.
Steve: I just had PT on the show recently actually and he was just telling me how much work it was so I can imagine.
Josh: It is rough. I just came from a show last week. It was a national apartment association show here in Denver. They had 7800 attendees to the show.
Steve: Good Lord.
Josh: I use like a fraction of the hallway of the convention Centre they had the entirety of the convention Centre. They had like a monster staff this thing, and then you know they had a huge vendor floor with hundreds of sponsors. I mean, you know I did the math– they made tens and tens of millions of dollars without fail. They had to have, and you know which is fabulous. Good for them, good for everybody there, there was tons of business I got done and I sit and I attend shows like that I’m like oh man; I got to get on the ball.
Steve: You know, I don’t think you do it for money reasons parse, right. It’s got to be for the love of getting people together and that sort of thing. So, hey Josh, I don’t want to take up too much of your time but I thought that I would ask you, you know early on you mentioned that you started all this as a hobby, but was there any sort of book or site or person that kind of just pushed you in this direction of starting your own monster site?
Josh: You know, so what I did was, I found this time machine, I travelled ahead, and I found this awesome site called mywifequitherjob.com. And I read through it, and I was so– it’s crazy, I was inspired, absolutely inspired by this guy Steve, and said you know what, let me go back and start a site where I can make some money, and so I birthed Bigger Pockets.
Steve: Nice man, nice. And you know if weren’t sarcastic…
Steve: So no books, you guy do you read or anything?
Josh: I’ll tell you. The inspiration, really the early influences were, there was webmaster forums. Guys like Shoe Money very early on John Chao very on, they were kind of the first money guys in the online space that I was familiar with. Wil Wheaton as the you know OG blogger, you know those guys kind of influenced me and taught me to look at things a little differently from hobby to business so to speak. But it was still a hobby site. You know when Darren Rawse started to put pro blogger together early on– I love that site. I mean I had my own blog about blogging and it was called time for blogging and so I was doing that stuff years and years ago.
Today I study guys like Pip Lejure [phonetic] and the conversion guys and whatever you know. He will have to fly overseas and yell at me. Pep Lejure who is phenomenon, you know there is a ton of people that I study. I really– you know for me if I feel like I’m done learning then I failed. So you know, whether it’s looking at a site, like I’m looking at your site right now as we talk here, and I’m looking at your design and your finals and you know the different way of organizing your writing styles, that kind of stuff. I just study pretty much everything I look at.
And I’m trying to take a piece of information from everything and I recommend anyone listening to do the same thing. You know I think people are so quick to say oh well I’m an internet marketer, I have to go and study from internet marketers. That’s not true. You can study and learn from anybody and everybody. Look at who is successful, you know Google, Google is hugely successful. What are they doing that I can take away. Facebook what are they doing that I can take away. Yahoo and so on. So I kind of get little things from pretty much anywhere I go. And I recommend everybody to do that.
Steve: Cool, well that’s great advice Josh and I just want to thank you for making fun of me and coming on the show you know how it is.
Josh: I didn’t really make fun, I mean if want me to make fun…
Steve: Well yeah, we are not done talking, as soon as I hit the stop button right. But yeah, so is there a place where people can find you if they have any questions?
Josh: Sure, and I hope really quickly I hope you know anyone listening. I was trying to think about the listener and provide some value. I didn’t really want it to be all about me telling my story, but hopefully I told it in a way that people can learn something. And if you do have questions, jump on the show notes of the show, I don’t know what the show number this will be, but Steve will probably have it somewhere in there.
Steve: We’ll see if I publish this episode.
Josh: It may not make it, if I do make it, then ask me questions in the show notes, otherwise biggerpockets.com and I’m on Facebook, twitter, G plus, LinkedIn. LinkedIn I only connect with people I know that’s why Steve and I have not yet connected there. But you know yeah just find me online, I’m out there, hard to miss.
Steve: All right, right on man. Well thanks for coming on the show.
Josh: Hey, thanks man, it’s been a pleasure.
Steve: All right, take care.
All right, I hope you enjoyed that episode because Josh is a really down to earth guy, and if you did not know any better you would have no idea that he runs one of the most popular real estate investing forums and websites in the world. And what I like about him is that he is both a dreamer and a hustler. He is actually a pretty fun guy to be around too. For more information about this episode go to mywifequitherjob.com/episode33, and once again I want thank 99designs for sponsoring this episode.
I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business and I know design is just one of those mental barriers. I know a lot of you out there also run your own businesses already, and know that your website design could be better. Designing a website is not intimidating anymore thanks to 99designs where you can get over 300,000 designers to compete for your design. All you have to do is list your design on their site, and within 48 hours, you will get dozens of design submission to choose from. And from there you can ask for slight tweaks and changes until you are 100% satisfied with the results.
And the best part is that the price is very reasonable and there is a hundred percent satisfaction guarantee. So go to www.99designs.com/mywifequit and get your logo, website, t-shirt business card or basically anything you need designed right now. And by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded highlighted, given a prominent background, and featured before all regular listings so that your request stands out among all the other designers. So if you need a logo, website, t-shirt, business card or anything designed, go to www.99designs.com/mywifequit, and tell them that I sent you.
And finally, if you enjoyed listening to this podcast, please go to iTunes and leave me a review. when you write me a review, it not only makes me feel proud but it helps keep this podcast up in the ranks, so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show and please tell you friends because the greatest compliment that you can give me is to provide a referral to someone else either in person or to share it on the web.
And as an added incentive, I’m always giving away free business consultations to one lucky winner every single month. For more information go to mywifequitherjob.com/contest, and if you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over one 100,000 in profit, in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.
Thanks for listening to the My Wife Quit Her Job podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.