Rewarding Risk and Celebrating Failure: Josh Dorkin on finding your path through Real Estate Investing
The Founder of BiggerPockets and Investor digs into AI’s imminent impact on real estate and navigating failure.
When Josh Dorkin founded BiggerPockets in 2004, very few companies were focused on telling the story of real estate investing through podcasts, publications, and educational resources. Today, BiggerPockets has reached close to 100 million people, and Josh knows the industry inside and out. He also knows when you need to change things up.
I sat down with Josh to discuss the role of AI in real estate, navigating professional setbacks, and how life’s speed bumps can transform into moments of personal and professional clarity.
Your background definitely sticks out to me as one of the most interesting I met. You've been a stock trader, an actor, publisher, and a teacher. What do you think you learned from each of these experiences that helped make you a good entrepreneur?
The one that stands out the most is as a teacher, honestly. I taught special education for four years. If anything's going to teach you patience and calm, it's going to be working with a bunch of teenagers whose brains have yet to fully develop. It gives you the skills to deal with all sorts of folks in the entrepreneurial world—employees, potential partners, you name it. Everybody's super stressed and uptight and worried about what everyone's thinking about them and who they are. If we just chill out and realize we're all oddballs, then it allows us to take a breath and a lot of the weight off.
From entertainment, I learned how to hustle and think outside the box. Everything I did along the way with BiggerPockets was the same. There was no handbook. Nobody had really done what I had done before—built a publication and podcast company on real estate investing from the ground-up.
Were you always this zen and introspective? Was there a turning point for you?
I've been fairly public about how my family went through a really difficult time when one of my kids became really sick. It forced me to reconsider everything, particularly how I want to live my life and who I want to be. I realized that for the longest time, I was always worried about accomplishing things for other people, or for ego, or for pride, or for something else. None of the accomplishments I've had along the way have made me any happier. All the success I've had with my business brought temporary joy, but then the next day it's like, “Oh, but now I have to get the next thing.” I was never satisfied.
When we were dealing with my kids’ health, I came to realize that I was inherently pretty unhappy along the way. I needed to find a way to reevaluate how I was looking at the world.
Having a successful life today really means being there for my family and finding joy in little moments. I want to look back from my deathbed and say, “Yeah, you know what? It wasn't about struggling to make more money and become more famous. It was about helping other people. It was about doing good for others, doing good for my family, having a great time along the way, not getting stressed about dumb stuff, and leaving a mark across people and the planet.” It’s why I now think trauma, suffering, and pain tend to help a lot of people reevaluate how they see the world.
For me, this is brings up how I grew up with Primary Immune Deficiency and used to get quite sick when I was younger. I think that life experience created a lot of my motivations and inspiration, but I feel like I got away from it at one point. When I started to get awards and promotions, I began to realize that I’m on this hedonic treadmill. It also made me reevaluate things in a deeper and “bigger-picture” way.
Well, think about what you do and think about the people that we have encircled ourselves with. These people are high achieving people. What's interesting is if you really dive in with most of them, they still haven't found satisfaction. Most well-off people that I know are still striving for something, like money, social media likes, more fame, whatever. But they've pretty much got what we all dreamed of five, ten, twenty, thirty years ago. But now they want more.
The problem is: when you have more, you keep wanting more. It never leads to good places. Instead, we have to find a place for ourselves where we’re actually satisfied. It's way easier said than done. I'm still struggling with it. But at the end of the day, I think I'm working on it. And I think more high achievers need to do the same because we’ll never find what we’re seeking if we’re just going for money, ego, and fame.
Let’s take a moment to dive into BiggerPockets. What was the inspiration behind the company, and your own mission at that point in life?
Well, the initial inspiration was that I didn't want to keep screwing up. I was inspired by my brother who started buying property. I'd always been interested in building wealth through real estate or business. I bought some property without knowing what I was doing. There's all these little problems that pop up for pretty much everybody. There was no handbook. No matter how many books are written, and we've published dozens and dozens of them, they cannot and will not ever cover every single potentiality that pops up as an investor. In my search for wisdom, I went online, started looking for communities, and I realized at the time at least, they all seemed like they were tied into the “Get rich quick, late night TV infomercial, guru-type” person. I just felt like there had to be a way to build a community that gave without the pitch. I just started building the site while I was teaching high school on nights and weekends. I had my 40 hour week job and then I had a 40 hour week second job starting up this business. I think I had eight years of a hundred hour weeks. Ultimately about 14 years later, I had an exit to private equity.
I never raised money. I self-funded everything from the very beginning with my teacher's salary. I finally had the funds to hire by year eight. It was a long journey, but I ended up helping millions of people learn to build wealth. I'm definitely grateful for that.
Were there a couple of the decisions you had to make in order to really advance the business? What do you feel like the benefits were?
The benefits of bootstrapping were control. I didn't have a board, VCs, or lenders to report to or deal with. I could make every decision without anybody second guessing me. Could I have moved faster had I had those people? Probably. But if I look back, I used to keep a spreadsheet of every competitor. I knew every community forum. Many took funds. None of them survived in the long term.
I don't think I would've been able to outlast had I had taken funding. I think it took a long time to actually catch and make money. And just seeing all the startups that I know today, the board or somebody else would've forced a pivot or shut it down.
What advice would you give somebody who's trying to figure out if it's time to move on from something that isn’t working?
I think it depends on your ability to sustain. There were maybe a dozen times where I probably should have shut the business down. But I had the support of my wife, who was working a full-time job alongside me at first. She always supported me. I didn't have to worry that we were going to go hungry. That’s my marker of when it’s time to quit. “Are we at the point where I can't feed us, where she's got a job and this thing is still not making us enough money?” For me, that’s when it’s time to quit. But that's going to be very different for everyone else. You have to establish your own metrics and markers for what success and failure are.
I've built products over the years on BiggerPockets that we had to eventually shut down. We had group functionality, we had live chat, we had all this stuff that, at the time, should have worked. We put blood, sweat, and tears into making it work. But at some point I had to just let each of these things go when they failed. The same thing happens when you're building a business. If everything you try fails to work, you're probably at that point.
It's amazing how many founders you see that scale businesses and then continue to do something they really don’t enjoy anymore. These days, the media has created this narrative that founders need to take their idea from day zero all the way through IPO and to their deathbed.
I think it's crazy. Take the example of a successful physician. He gets promoted and becomes a manager. He gets promoted again, and suddenly he's running hospitals. He's doing all this cool stuff and making boatloads of money, but he's not doing the one thing that he actually got into it to do: treat people and deal with people. And comes to realize, “Hey, wait a second, I want to step back because I like helping people.”
This is an important lesson on promotion and “success.” It's great the day that you get it, but the next day you're working again. Most people I know who are promoted into mid and upper management are fairly unhappy doing it. They liked doing the original thing they did, but were promoted away from it. You’ve got to find a way to get back to the original thing. Life is too short to be miserable in your job.
What are the similarities between those who are successful in real estate and the founders you invest in now?
They both have the willinging to fail. Losing isn’t the right word—failing is. You have to be willing to take a risk and fail. And it's scary. We don't teach failing in school.
In order to create a moonshot or something so incredibly successful, we have to be educated in a different manner. We have to treat our brains differently and teach our kids that experimenting is a success in its own right. We can do that within our own businesses: we could reward staff who are willing to take a risk by experimenting with something new—instead of what we normally do, which is to only reward the actual accomplishment. Success is sometimes being super lucky. In other words, reward the person who tried 18 different times and failed, because they’re taking all the risk. We need to foster this behavior more in schools and as parents.
When my kids get home, I ask them, "Hey, what'd you fail at today? Who'd you help today? Okay, so you failed at this. Well, did you learn from it?" If we teach that to ourselves and to our kids and we start to bring that into what we do, then failure's okay. Not trying is what's not okay. Working in a job that you hate is not okay. Living a life that you're unhappy in is not okay. So change it. Take a chance and do something different despite your parents talking to you in the back of your head, saying, "You're going to fail." Who cares? It's not their life. It's your life, and you have to take control of it.
I also think I've become better at trusting my gut. Every time I look back on decisions I've made where I've gone against my gut, I've been wrong every single time. So now I trust it. I'm not always right when I trust my gut, and I don't get home runs every single time. But at least I think when I feel like something or somebody's just got it, they usually do.
Let’s talk about AI in real estate. What are your thoughts on where these two things intersect and what that might start to look like?
Let’s use Queens in New York as an example. Queens has very specific building codes, rules, and regulations on what you can do and where you can do it. Imagine buying a lot in Queens and going into your AI and saying, “I'd like to build a house in this neighborhood. Find me all the rules and regulations I need to know on what I can build. Then, design a house for me according to a specific architecture and style that follows Queens’ rules and regulations. I want it to be a three bed, two bath. Overemphasize the second bedroom because I want my daughter to have a little bit of extra space. And when she moves out of the house, I’ll turn that into a big oversized office. We're not going to cook a lot, so give me a smaller kitchen. I want the exterior of the property to have a garden, and tell me which crops are going to be the best to grow in my environment. I want the house to be energy efficient, so position it so the sun is prominent. Also, my neighbor’s dog barks all the time. Can we muffle the sound on that side of the property?” Your AI would then design that house.
That’s where we're going. You could cut out your architects. You could cut out your lawyers. It could then find a contractor who can operate and build this type of property, who even specializes in what you’ve made. And this is just the beginning. We can then 3D print the house with AI. The applications are endless.
What does the future of real estate look like for individual investors—the core people that were on your platform and in your community?
I think at least for the foreseeable future, it will continue to be a great way to build wealth. At the end of the day, our population continues to grow. There’s always a need for housing. For those that are doing it, keep going. Do good by your tenants. Run a good honest business. Don't cheap out. Reputations are still important—at least I think so.
As rates go up, it's going to be more difficult for some. But there's always a way to make money if you're creative. In the early '80s, interest rates were right around that 20% marker, and people were successfully investing in real estate back then. I think the only things that will change are the tools we use to evaluate the e-sign versus non-e-sign. Tech is going to make it easier for more people to get into houses. But I would just press upon anybody who is considering real estate that owning a rental property is not passive income.
Take the example of a teacher. Say you want to be a teacher, but the salary that a teacher gets just doesn't afford you the lifestyle that you want. Well, if you go about it the right way, and you're strategic, you could buy a rental property instead of a home to live in. Find a partner to split the first down payment with you. Apply for one of the FHA loans with 3.5% down. House hack—buy a duplex, a triplex, a quad, then live in one unit and sacrifice the independence of having a home without other people around. Live in it for a couple of years, then go and buy the next one. Use the income from your tenants to live for free. Move on, do it again, rinse and repeat. Suddenly, you're living for free in your next set of units, and you can afford to take those big vacations or whatever you want. Real estate more than anything else, I think, gives you that ability to pre-plan, map it out, and start working toward it. There are obstacles, but there are solutions to every obstacle.