Chad Carson’s 2 Deals/Year Strategy That Makes You a Rental Millionaire

19:53This is actually what I'm trying to do with mine and Clemson. You divide up the property into three lots or maybe you buy several properties. You're going to fix up all of them. But in order to raise capital to keep the third one, you are making money flipping the other two. And then you keep the third one as a rental property. And he's doing pretty well with that. Like he's paying the bills and getting the cash for down payments through flipping. and then keeping the one rental. And there's a lot of benefits to that because he's able to move inventory, he's able to buy and sell, he's able to keep his private lenders moving.

20:23I think that the mistake a lot of flippers make is not keeping stuff. They're not keeping enough of the rentals. And so that's a discipline of buy three, sell two, keep one. You can do that in the short run as a flipper. I also see that as like a harvesting, you always talk about like starter, builder, harvester. When you're going from the building wealth phase to the harvesting phase, I'm seeing people strategically sell off some of their rental properties at the right time and then keep one or two of their best ones, or keep like a third or half of the best ones. I had one student who did that.

20:52He got up to 21 properties as a kind of growth strategy. He sold down to like nine properties. He's used the capital to pay off some debt. He's used the rest of the capital to do some private lending. And so he has this tiny, simple portfolio. He sold off his worst properties. So think that's like the ideal endpoint for a lot of us.

21:14Brandon Turner:Yeah, I think that that makes a lot of sense. And why I think that makes a lot of sense is because I'm doing a very similar strategy. That's good to hear. All right. I've been selling off some of my problem properties and using that to pay off some of the other ones, getting my portfolio down to something that I enjoy managing more and keeping some of the best assets. But I would say if you're somebody who's never done a deal, like your goal is to do a deal. You're right. Your goal is to get that first one done. It's to buy something that if things don't go well, it's not going to put you and your family in a financial hardship.

21:49Brandon Turner:Right. Don't lose your shirt. Don't lose your shirt. Do a single family, maybe a small multifamily, depending on the price point. Right. Something that if it doesn't go according to plan, you're still going to be able to eat. Your kids are still going to be able to eat. You're not going to lose a bunch of sleep. It might suck a little bit, but you're not going to die. Right. Like that's the goal. First deal. And then I would say is like, you've got to be very intentional about doing some lessons learned. Like we do this in the corporate world after a project, right? You come back and you say, all right, project's complete.

22:19Brandon Turner:What went well? What didn't go well? When we do this again, what do we want to make sure we don't do? And what do we want to make sure that we pay somebody to do or hire a consultant to come in and do, right? Like I think you need to do that, especially if you're going to be thinking you want to grow a small and mighty portfolio. because you're only going to have so many transactions if you're small and mighty, right? So that means you've got to learn your lessons from your deal. Be intentional about what those lessons are. What did you like? Do you like the property that you own? Would you like to buy something different?

22:44Brandon Turner:Do you like the neighborhood it's in? Do you like the tenants you have to rent to? Did you like the renovation process? Really be intentional about learning what you did well, what you didn't do well, what you'd like to do. Because you may do something poorly, but you enjoyed it, right? Okay, so how do you get better at doing that? And then you can go and you can execute on your next deal based on those lessons learned and be way more intentional. And Henry, I think speaking for myself, I have a hard time being self-reflective when I'm in the game. And so if people are like me where they're like, all right, I did a deal, but I want to do the next deal.

23:14I don't want to look backwards. I want to do the next one. What helps for me, and this goes back to bigger pockets and the communities, we all have communities around us. You got to have people around you who are willing to call it straight and tell you what's up and what's really going on. I think that's been really critical for me because as smart as I think I am, I don't have it all figured out. And I'm always going to make mistakes. And I'm going to. So if you have people around you who can give you feedback in real time, like call it mentors, call it accountability groups, call it just network of friends who you have on your text threads.

23:43Like people like that have talked me off cliffs so many times where I was going the wrong direction. They're like, I don't know, Chad, like that doesn't sound that good to me. Like, what do you think about, you know, why are you doing that? And that is huge because information is one thing when you hear it from other people, but when you can get that reflection that you're talking about, Henry, in real time, and you can get some feedback, that's so valuable. Can you give us an example of that, Chad? Because I think it's so true. You're in the middle of a deal. You're making bad decisions about a renovation budget or you're going to go buy something that probably isn't right for your portfolio.

24:15What are the valuable questions and insights you're able to extract from your network? Yeah, I can think of a couple of examples. When I was in my hardcore growth stage, I had a mentor who got me, Louis Stone, and he was a private lender for me. And so he had a vested interest in my business because if I screwed up, he lost money. You know, that was actually a really helpful alignment because he was much more experienced than I was. And I was, we were buying in the Clemson, South Carolina area. I started finding a bunch of leads in another area 30 minutes away called Anderson, South Carolina. And I was like, hey, I'm going to go buy some of these properties.

24:47And the numbers just look really enticing. But it was one of these lower, it was like a D plus neighborhood, meaning to me, a D plus neighborhood means it's almost all landlords and it's a lot of slumlords. And I think it's all about them not taking care of their properties. and he, I went and showed him a property and he was like, I was all excited about it. He was like, eh, he was just kind of lukewarm. I was like, well, would you loan money if I bought one of these? And it was basically, he tried to tell me nicely, but he's like, no, no, I wouldn't, I wouldn't do a deal like this. And I was a little like peeved at the moment.

25:13I'm like, well, wait a minute. Like these numbers are really good. But I, it's my credit at that time. I listened to his feedback and I pivoted and I went to another neighborhood. And that doesn't mean I couldn't have made it work in that neighborhood, but it was so helpful for me because I was just locked in. I thought it was a really good deal. He was somebody with some money on the deal who thought differently. And he helped me pivot from a location that probably would have caused me more trouble than it was worth.

25:37Brandon Turner:In my community, we have very similar talks. I would say a good example of something that has come up more often than not is deals that require a lot of work for you to get to the money. In other words, I often will get questions about buying a property where you have to maybe rehab the house that's on the property and then it's got ADU potential, right? And so if you build the ADU and rehab the property, then it's this amazing, super profitable deal, right? But the catch is you got to do both, right? And I always tell investors, you want to think about like for me, when I do a deal, I need the original deal to make me my money.

26:17Brandon Turner:I would do that deal. If I'd never built the ADU and I could flip that house alone and make my profit, I would absolutely do that deal because then I'm not tied to having to build an ADU. And that's a skill I haven't developed yet. And I think people can sometimes get a little ahead of themselves, especially when they're new, because a lot of the deals new people come across, or I should say a lot of the deals that people try to sell to newcomers are complicated deals or deals that take a lot of work and a newcomer gets very excited about the potential of the profit down the road and doesn't think about what it's going to take to actually get there.

26:52Brandon Turner:And so like we're often having that conversation of like, yes, if a deal has multiple ways to make money, you only one of them matters, the one you have the skill set to do. And if your deal is going to pay you with that one exit strategy, and then there's a potential ADU. Cool, great. That's icing on the cake for you. But you know, if I didn't have a community or have someone, you know, tapping me on the shoulder saying, hey, yeah, you could make a bunch of money, but you've got to do this thing you've never done before, and you're probably not going to be very good at it. One other common conversation I have in my community is assumptions.

27:23So one of the assumptions that in your case you're making is you're assuming you can get through those steps. The assumptions, I run the numbers with a lot of people and do one-on-one calls, and they often miss assumptions on expenses, capital expenses, that, hey, the taxes are going to go up on this property when you buy it at this price. And so that's another one, just running the numbers is such a, it can be emotional because you get invested in this property. I want this first deal. I want this next deal. I always had the rule that I had to go and sell it to my business partner, to my wife, to my private lender.

27:51And if I can sell it and I can pitch it to all them and I survives all those conversations, then maybe it's a good deal. It still might not be a good deal, but it's like having those people around you is such a critical piece of the puzzle.

28:02Brandon Turner:And running the numbers conservatively. I think Dave and I often say, we're trying to talk ourselves out of buying a deal when we're underwriting it. Yeah. And that helps a ton. It honestly, I was negotiating a deal recently and I was talking myself out of it and I kept, I decided I was like, you know what, I'm not going to do it. And I just told the person and wound up lowering the price until I could get it. Like that's how you do conservative underwriting. It just helps you back into the actual deal that works being and having that discipline and just saying no, continuously saying no until you find something that's really, really good is the only way to succeed right now.

28:42A hundred percent.

28:43Brandon Turner:All right, Chad, thank you so much. I obviously think that's great feedback. Who you choose to spend your time around, A, not only let you know what's possible, but B, can keep your butt out of trouble. And this market will burn you if you do make mistakes. So having that community is hugely important. I do have a couple more questions for you about kind of what an ideal deal does look like in 2026. But we'll get to that right after the break.

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31:45Brandon Turner:All right, we are back on the BiggerPockets podcast. We are talking with investor coach Chad Carson, who's been sharing with us what he sees on the investing landscape in 2026. We talked a lot about how to iterate, how to find potential opportunities as a small and mighty investor, and even how to get started as a small and mighty investor from the beginning, which is probably something that Chad and I wish we did up front. But hey, what are you going to do? But now, as we are growing our portfolios, right, we're learning the lessons and we're in, we're trying to get our portfolios down to a size that allows us the freedom that we want to live in life.

32:22Brandon Turner:let's pretend there's an ideal deal out there for you right now. What kind of deal would you be looking to buy in 2026? I work it backwards from my tenants more and more these days. It's like in every other business in the world, you always start with your customers and say, they're going to be the people buying your product. What do you do? And as a landlord, I think the same thing. My tenant is my customer. Their decisions are the most important things. So my ideal tenant is someone who buys the rental, meaning they lease the property and they stay as long as possible. They pay on time and they love living there.

32:56And for me, I come back to the single family house, actually. I own multifamily properties. Single families aren't cool, Chad. We're not supposed to buy single families. That's what the internet says. Exactly. Single families are out. I heard, well, I better not say names here. I heard that's not a good thing to do, but I take the opposite opinion. Most of our tenants want to live in a house. They want to put their stuff in the garage. They have stuff. An apartment's cool, but the aspiration of a lot of people in our country is to live in a single family house. And so in many places, exception being urban, Manhattan, things like that, a single family house is the next step.

33:31For me, the ideal property would be brick exterior, single story ranch with a crawl space. It has hardwood floors, tile in the bathroom, maintenance, maintenance, maintenance. Maintenance has been my nightmare. It's my love language. Yeah. So that's my house. I love a simple, single-story, 1 ,500-square-foot house with a backyard that's fenced in because my tenants love that and because it's low-maintenance for me. And that combination of desirability for the tenant, low-maintenance for me as a landlord, the translation of that to number speak is that's going to be a very efficiently operating property with low capital expenses, low-maintenance.

34:05And it's going to be somebody who stays for 5, 10, 15 years. Yeah, a dream. That's the best. So that's my long answer to what an ideal rental looks like these days.

34:14Brandon Turner:Same for me. I want a brick exterior, single family home. I want somewhere between 70s and 90s built neighborhood in a desirable part of Northwest Arkansas, concrete foundation. Something that I know I can get at a discount because of the age and it probably hasn't been updated, but it's been built recently enough that it's going to stand the test of time. not on a crawl space but you know just straight concrete foundation brick house three two northwest arkansas to me is like i need to come visit you henry because i i mentioned biking earlier i love bike trails too like i i volunteer in my area trying to help build a walking and biking network and so for like for me it's all the stuff you said henry and you can like hop on a bike or walk to the local park on a like really cool bike and walking trail like that to me is like rental property nirvana.

35:08Chad and his happy place. Just real estate investing, biking around. It's true. It's awesome. So Chad, you talked before about having great mentors, community, people who can help you figure out your portfolio decisions, how to make the most money out of the deal. And at least in my experience, I know I'm biased, but in my experience, one of the best places you could possibly do that is at BPCon because there are literally thousands of like-minded people who are looking for the exact same thing, all getting together, super excited about it. And this year, Chad is going to be our closing keynote speaker in Orlando.

35:46First of all, Chad, congratulations. We're super excited to have you here. Maybe you could tell us a little bit about what you're going to be talking about at BPCon this year. Well, I'm honored, by the way. Thank you. I think I've been to all the BPCons. There might've been one a long time ago in the very, very beginning I didn't go to. So it is part, my community is at BiggerPockets and I love being there. And my keynote is going to be, surprise, surprise, about this concept of enough and the fact that sometimes the aspiration that so many entrepreneurs get kind of spoon fed from the time they just start, and I was in this boat too, is that successful investors are the ones who have the most properties and who had the biggest portfolios and the biggest businesses.

36:27My experience has been the opposite. My experience has been that, you know, that's cool. I'm glad there's like trillion dollar Elon Musk of the world. That's cool. But like, that's not what most of the people I see in my world as a real estate investors who are quote successful. I know a ton of people who have five properties, 15 properties, 25 properties, who nobody knows their name, but they have their properties paid off. They have a lot of cashflow. They work one or two hours per week on their business. They travel, they're involved in their community. They contribute their time. And those are heroes to me.

36:56Like those people are amazing. And so my talk is going to be celebrating that first and foremost, that small and mighty investor, but also giving some ideas on how you can lean into that and what's that business model look like. And, you know, I'll go into more depth about the stages of investing and really just leaving everybody, hopefully, at the Bigger Pockets Conference. Hopefully it's an amazing experience, but leaving you with some focus and some inspiration to go build your own small and mighty empire. I love it. Help me, Chad. I need this talk. I need this in my life. So I'm eager to hear your advice on how to do it the right way.

37:30Well, I always give speeches because I'm the first person who needs to hear it. So let's just call it like it. You're writing it for yourself. I'm an entrepreneurial A type person personality therapy continually, but together, I think we can think about it and make our business. Not necessarily, you're never going to stop growing. I think that's another little tidbit of a takeaway. where you never, even if you hit your enough financially, there's an endless number of things that you can grow into and become as a person. For me, it's been, you know, family members and being a dad and traveling.

38:02It's also been like the nonprofit I mentioned, like we need more entrepreneurs, like building things that don't make any money in their communities. And that's very ambitious, like solving problems and doing things with your time and your money. So that's one of my like really passions is like, how can we use entrepreneurship? Don't ever stop being an entrepreneur, but like channel that into different parts of our life. Making the most money in the biggest properties is not the only way to channel that ambition. Awesome. Well, if you all want to listen to Chad's talk at BPCon, if you want to hang out with the three of us and other tons of other speakers, and you want to find your people who can help you source deals, who can help give feedback on projects or your portfolio strategy, come check out BP Con.

38:46It's this October 2nd through 4th in Orlando, Florida. You can grab your tickets today at biggerpockets.com slash conference. And for just a couple more days, we do have early bird tickets. It's the lowest the prices are ever going to be. So if you want to come, make sure to grab your tickets in the next couple of days. Chad, thanks so much for being here, man. We always appreciate it. It was my pleasure. Thanks for having me. Henry, as always, a lot of fun having you here. Thank you all so much for watching this episode of the BiggerPockets podcast. I'm Dave Meyer. We'll see you guys next time.

39:20Thank you all for listening to the BiggerPockets real estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian Kay. Copywriting is by Calico Content. And editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own.

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