Interview with Dani Crowell

17 Oct Interview with Dani Crowell

Dani Crowell with Equity Connect & Highest Cash Offer shares how she went from being a bartender in 2011 to wholesaling 30 houses per month.

Video Replay of Interview with Dani Crowell

Podcast Replay of Interview with Dani Crowell

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00:00 Hey everyone, thank you for joining us for today’s episode of real estate disruptors. Today we have Dani Crowell with equity connect and she’s here to share how she is wholesales and flipped over a thousand homes in her career. If this is your first time tuning in, I’m Steve Trang broker and owner of stunning homes realty and founder of the offer fast homes APP, the only app you need for wholesaling. And I’m on a mission to create 100 millionaires, so please private message me if you ever need any help with your business. If you’re excited for today’s show, please give me a wave, give me a thumbs up. And as a reminder, I do not charge a dime for this show. I don’t make any money doing this. So here’s all I ask. If you get value out of this show, please tell a friend, either share this episode right now, tag a friend willow, or telling your best, take away from the show later on. That way we can all grow together. And again, this is a live show, so please post your questions and Danielle will be happy to answer them. You Ready? I’m ready. Okay. So what got you into real estate?

00:56 All right. Well, um, we’ll start out with, I have a degree in finance and so I, um, studied finance, knowing that I was basically going to be managing money in some fashion someday, hopefully owning my own business. And um, so after I graduated I was very unsure of what I was going to do. I never really did an internship or anything. I just kind of knew I was going to own my own business and um, it didn’t really come to me as quickly as I had hoped. So I was bartending actually. And um, I met an investor working at the bar and kind of understood this was back in 2011, so I kind of uh, was talking to him and uh, he was in from la so he would come to Phoenix, uh, do some work here, go back to la on the weekends and stuff like that.

01:42 So. Okay. Um, he was investing in single family homes and buying straight on the courthouse steps. And so, um, he was, he kind of, he invited me down one day to come to his office and just take a look at the operation and it wasn’t much of an aberration, it was kind of, it was him in the back of a house I’m buying and selling real estate because back then it was, it was if you had cash and it was easy to find homes, easy money back then. Yeah, exactly. So, um, basically he was just kind of doing that and I was like, well, you know, do you need somebody to help you kind of managed the office? It was just him. And so, uh, I was like, how can I help if there’s any way I can help, I’d love to learn and kind of figure it out.

02:20 And at the time I didn’t really know what an opportunity this really was, but it was huge for me because he needed somebody. I realized he didn’t even have files he didn’t have. He didn’t know what properties he owned. They, they bought so many properties back then that they were just kinda like, I mean, there was a, there were spreadsheets everywhere and they didn’t quite know what exactly, what they had. They knew they were in an opportunity to make money, so I didn’t have enough money where they can afford to just lose track of things and it’s totally fine. And they didn’t even know how much money they were making because they weren’t doing their books. I mean, we’re talking, they just knew there was an opportunity, they had the cash to capitalize on it. And so what I did was I came in and I kind of saw that as an opportunity for me to, um, you know, I, he was like, I don’t know what you’re going to do, but here’s a computer and you can kind of figure it out from there. Which was awesome because, um, I kind of went in and I organized everything. He didn’t have quickbooks, so I got quickbooks. I hired somebody to teach me quickbooks because he didn’t, I didn’t know. He didn’t know. So then I learned quick bugs. I kept everything organized. Um, and he was back and forth every week and then after a period of time he kind of started coming less and less, so it forced me to kind of pick up the slack and start

03:31 you were picking up more of the slack or because there are fewer ever fewer opportunities for them?

03:35 There were no, there was, there was so many opportunities, but he was able to do what he did from afar. He was, he, I mean, he’d be on the phone with the guy down at the auction and the auction, they’d be saying, you know, go up five more grand, five Morgan, that’s it, you know, so he was able to do that from his house and he had people here. And so with me managing the office, I just kind of started picking up the slack from there. So, um, the opportunity was there. So I basically went from managing the office too. We started doing like construction and stuff. So I would kind of go and see the properties. Um, one of my scariest tasks was that I had to kind of, when we would buy a house, I would have to go there and knock on the door and introduce myself because he didn’t have somebody to do that. So that’s an awful job. But, you know, I learned from the ground up. That was a good opportunity for me to kind of be thrown into it under somebody who, um, had the means to be able to capitalize in that time, which was cool.

04:27 So I used to do that for Argos. Oh, you did? Yeah. And so, uh, I listed for closes for a little bit and I remember, you know, after a couple of very confrontational conversations, I was thinking I need to get a bullet proof vest. I was looking at bulletproof suit for a little bit, but then I realized I couldn’t afford those. So we stopped doing that.

04:46 Yeah, I got, I ended up getting a gun and everything because I was like, I don’t know what I’m going to come across, you know, one day. So yeah. So anyway, we would be, I’d be going into houses and taken a look and writing down what I thought needed to be done and it was, it was a time where people were losing their homes but then also needed a home to live in. So they were renting and the rent was going up and it was just super stable and the property prices were, I mean, we, we’re buying what we’re buying now for 1:40 back then for between 10 and 30, you know, so what we were doing was we were putting them from a reos or the trustee sales. I’m getting them just turnkey for rentals, which was, took like 10 grand to do because the classic instruction was so low at that time to labor available. Yeah, exactly. So we did that, put a renter in there and then we would do like five, 10, 15 of them and then flip them to out of state investors out of country investors. And then we would manage their properties in house.

05:41 So you’re creating cash flow properties and you were selling those. Yep.

05:45 Selling them in packages. Yes. Yeah. Which equity? Um, while we were selling them for quite a bit, so, you know, but, but still then we were managing in house and I mean they still, the investors still knew that they had opportunity to make money as time was going to go on, they had a longterm strategy so we just kept them in house and uh, so yeah. Uh, and then when it came time that they wanted to sell, I was licensed at the time, um, and then I represented them on the sale as well. So, so how’d you go from there to equity connect? Um, well that was 2011 through 2013 ish. And then in 14 is when the market started to shift and it became more of like you had to buy and put value into it and then list it. You couldn’t just buy and then necessarily sell tomorrow for a profit.

06:31 So we, um, started to do more construction, which was difficult to turn what we were doing. That’s exactly my point. The same guys, we’re not the guys that we’re going to be adding, you know, nice tile and doing value add constructions. So no, we ended up kind of shifting the model there and then the investor that I was working with, he wasn’t quite as interested in doing those types of flips. The opportunity wasn’t there as much anymore, so I actually bought my family and my parents and uh, we started to do more and more renovations with them, which is cool. Give us an opportunity to work together. And my parents were the money and I was in there just doing the work. Yeah, my sister was, she was there to root us on but because she was in California, but she would come back and forth and so we tag team that and that was a good opportunity.

07:17 And then from there we found it difficult to find properties. So that’s when Jessie, you know, Jessie, he, uh, he was like, I know this guy, let me introduce them to you, you know, you guys, let’s see if we can do something with us. He’s starting a wholesale operation, you know, you’re looking for properties. Let, let me introduce you. So what I didn’t know was he introduced jared in a way that was like, you need to meet my investor apparently on this investor that you wanted to introduce. It’s kind of a funny story because Jerry goes into the meeting with me thinking that I’m this older woman and I’m like, you know, like he doesn’t know what he’s walking into and we go in and we meet each other and, and I’m who I am. I was five years younger at the time or whatever for his younger.

08:01 So, um, that’s when we kind of decided to partner up and create equity connect. Yeah. So what were some of your struggles then when you started equity connect? Yeah, that was, I mean, it was tough to get off to a start because, um, at that time I was kind of walking away from my partnership and my working relationship with the investor that I was working with at the time. Um, and I never really, truly like worked for myself, like, you know, with expenses and with profit and losses that were actually my profit and loss. Yeah, exactly. So, um, it was a true learning experience. Um, it was a good one. I mean we worked in one of my rooms in my house that I own, so I had everybody come to the house every day and yeah, exactly. At least enough to pay rent, which we can’t say now, but um, so yeah, I, it was, it was good, but it was a learning experience.

08:58 We didn’t have deals just falling into our laps like we hoped, you know, we were on a round robin, we had our website and we were on a round robin, so Jesse, jared and I, we would get the phone calls and talk to homeowners. That was at that time, just the three of you? Yes, exactly. At that time. Um, and then we brought in a fourth partner who I was doing some larger construction projects with Hillary Hobson. Um, and so hillary has an eye for marketing. I don’t know if you’ve talked to her about, um, do you know hillary? No, I don’t know Hillary. No. Okay. So she, um, she’s, she’s amazing at marketing. She’s just got an eye for it. And so she brought in, um, Tommy and Dustin who do are there, our marketing partners and to do our website. And so, um, she, uh, she was able to bring something to the table that we didn’t quite have, which was I just a marketing process and strategy.

09:45 So, um, yeah, with that we were able to kind of scale our business up a little bit from there and we went from doing, you know, four or five deals a month here in Phoenix to doing nationwide, like 20 deals a month nationwide. Yeah. Which was we grew too quickly. We didn’t quite know what the heck we were doing and you know, to do, to go from that to like being in North Carolina in some other state and you don’t know their rules, you don’t know their laws, you don’t know, you know, the difference between, um, something that’s built on, you know, what are on a, on a slab. It’s just, you’re in, in a different league stuff. Yeah.

10:22 So jared was this fancy wholesaler, right? Five years ago?

10:26 No, he was not

10:28 a little bit of a switch on both parties.

10:30 Yes, exactly. Exactly.

10:33 Okay, so uh, I had a couple of people mentioned to me, they reached out to me Alaska a week since the meeting, our interview with Josiah and go like, Hey, you know, we love all this content is motivational stuff, but uh, we don’t have like a blueprint, like how do we get started? So is that something that you can share with me? Like, you know, like the first three, five things you would do if you were starting to wholesale flip operation tomorrow. We’re like the first three, five things you would do.

10:58 Sure. Um, if I was going to start, I know what I’m good at and I know that I’m not good at certain things. Like the marketing side doesn’t come naturally to me. I have a finance degree, so partnering, you can’t say that you can just go partner with anybody, but partnering with somebody that is kind of the Yin to your Yang in a way is, is super helpful. That was good for me. It’s not for everybody. Um, but uh, I guess so that you can kind of sit down, put a plan together. I would say that when we started, we didn’t quite know what our end game was, but we knew that we just wanted to kind of start and start getting deals. I would say that sit down and be real with yourself about what your end goal, what you want it to look like at the end, and then work backwards.

11:48 If you want to start a. If you want to have a passive lifestyle with a bunch of rentals, then start with that in mind and try to cater your business to that. If you want to have a pass of operation, which was, you know, something that jared and I definitely wanted then start with a plan to eventually get there through hiring and strategic, you know, the build with the end in mind basically. Yeah. Um, I would also say that if you get in with a good contractor and be willing to give up more to your contractor, then um, you know, don’t try to get the cheapest contractor. If you’re flipping, you’re going to get what you pay for it. And Trust me, I had been through some of the worst. So I, you know, like on this end, this large project we just did, I partnered with my contractor and he had some skin in the game to, you know, get it done on time, on budget and um, I was willing to give up more because I trusted that I was outside of my league on the scope of work and um, so I trusted that his word would, would have my best interest at heart as well as his.

12:51 So like as I give up, give up a little more, don’t be so cheap at the beginning. When you say give the contractor, have skin in the game, like what is that? Well I gave up, I gave up. It was just like kind of a joint venture agreement that we wrote up a contract. Yeah. Um, and he gets a percentage of the back end of the uh, when we go to south of the net profit if the net profit. Yeah. So, um, you know, everyday that we don’t sell it, he, you know, that comes out of his pocket too. So he wants to, he’s urged to speak it done credit is critical or. Exactly. So as a market, watch the budget and get get to market and all those things. Yeah. So that, and I’m honestly don’t, um, don’t be so quick to make decisions, make sure that things are like ethically the way that you want to do them because cutting corners might get you in the long run.

13:47 I don’t know if that helps, but that’s, that’s something that’s helped me along the way. Can you give me an example? Um, I could, I guess there’s certain times where you’re gonna come across a seller who wants to sell and trying to think of a situation. Um, I wish I could give you an example. This has come up a lot in my life where I’ve said no to quick cash and in the long run it helped me by, um, people knew that I was the person who would say no to that and yes to doing the right thing. And then more money comes to you when people know that that’s how you operate, it pays off. Yeah.

14:24 So you mentioned earlier, you know, you had some bad experiences with cheap contractors. Yeah. So some of the worst experiences, whereas some of those experiences of studies guys going to learn from your experience versus doing it on their own

14:36 for sure. Um, okay. Well one of the worst ones was I got in and this is, this is some good advice is so I had two large projects to Arcadia, like almost ground up projects and I took them on at the same time. So first things first don’t go so outside of your comfort zone and do two at the same time. And that’s what I did. I went from doing my, you know, let’s say $25,000 scopes of work straight, two to $200,000 scopes of work. Yeah, because I, I like to push the envelope a little bit. Um, you know, I want to get to where I want to be quickly and I’m just, that’s maybe just grow into it and don’t cut corners. And so what I did was I was recommended to work with this contractor through a friend and I didn’t let him properly.

15:24 Hillary and I actually, she was my partner in this and so we went in to these projects and we just kind of trusted his scope of work. It was the, his bids were maybe 60 percent of what any other closer bid was. So it was much cheaper to go with this person and the work. Yes, exactly. So anyway, we go in, he’s like, I need, um, I need 30 percent up front or something like that. That should be a red flag because we were not into even permitting yet or anything like that. You don’t need that amount of money that early on, so red flag and I should’ve seen it and I didn’t. I had money to spend and I had like money that I was hoping to make and I just, I saw that happening quicker. Then reality really is going to allow really getting your stomach.

16:16 Yeah, exactly. And so, um, we started the construction project. We basically, I paid him those deposits and then um, he, one of them, he stopped. I started getting calls that the subsequent getting paid and we hadn’t quite started the other project yet. It’s almost 30 percent of 200,000. Yeah. Yeah. So the subs weren’t getting paid. I paid both at the same time. I remember it was New Year’s eve and I had to give him a contract. Yes, 120 grand. Yeah. And, and a third project too. We were doing, so um, his subs weren’t getting paid. It’s just things were not adding up. Like we would go there and you could tell that they hired somebody at home depot to do the drywall and it was, it was a, you know, a smooth finish that was like more like a knockdown. It just didn’t look right. It was just Janky.

17:04 You could see the seams. Um, there was just, it was shoddy work and so we started looking into it. His car, his like foreman, his foreman was like missing a tooth and like it just, things weren’t adding up. Sure enough, he got his license on January something of that year and it was like March first when I noticed that something wasn’t adding up and I looked up his license online and he had 18, 18 reports on his license in two months. It was pretty impressive because it’s from when he was acting without a license and when you finally got a license, he racked them up all quickly. Oh, I gotcha. Yeah. So, um, anyway, so I was like, stop work, stop right now. Do not go any further. Like don’t order anything else. Like we hadn’t started the project yet and I was like, I want my money back on this other one.

17:53 We’ll finish this one off, you know, I’ll work with you. We’re going to, we’re going to get this done, but this one you need to stop. And this was, these were major remodels. This guy had no business contracting work. He’s like, I have 40 Cruz. He said all these great things that he has. No, he didn’t. Yeah, he sold while he was a salesman and he sold me. Did you get your money back on the second project? I didn’t get a penny back. I didn’t get one dime back and I was, I had a third project and we were exposed to them too. Anyway, after all of this, he’s like, I call him. I’m like, I want my money back. And he’s like, you’re not, you’re not getting your money back, you know, you’re going to have to sue me for it. So I sued him and we won. But then he went, we won 250,000. He closed up shop, he closed up shop and it was under an llc and he said, sue me, sue me personally. And then he skipped town. Valuable lesson, valuable lesson. If it looks too good to be true, it’s, it’s for sure. Good to good to be true. Let’s see. What would you attribute your success to?

18:57 My success. I would say in recent years I’m just really hard work. Um, I would say jared and I work something like 70 hours a week, probably even more. Yeah. Each, each. Jarrod even more than me, I have to say he is his worth work ethic is something to admire for sure. Um, for me, um, uh, going back to the ethical thing, I think that’s something that people would say about me is, is I’m ethical and, and I, I also pushed the envelope, I like to take risks. So those are, those are things that I attribute my success to. Then I read your profile that you’re a third generation investor. Yeah, sure. So, um, my grandparents, my mom’s parents, they own a, an apartment building down in Milwaukee, which is where we’re from. And um, so they, they have rentals. The stories I hear is that my grandma, like she would go in and evict people and you know, just all these things like this tall and she makes the cookies cookie Baker know this person.

20:09 She was and she passed away a couple of years ago, but she was, I mean this stuff that they’ve seen in these apartment buildings, I’m told that there were like several instances of dead bodies and stuff like that. And she’s the one who would go in and find these people. And like, I think she had been cleaned up a few of those. She was a strong lady. Yeah, I know. And then. But they still own it. They sold it to my uncle and they worked out a deal. So that’s still in the family. And then my dad and my mom, they were in the Harley business and yeah, so that’s what the Harley enthusiasts comes from. Um, my parents worked for Harley corporate in Milwaukee and then they moved out to reno. We all moved out to Reno in 2005 or something like that to buy a dealership.

20:53 And so, um, we owned the Harley business and then. And so that’s what my sister and I worked all through high school and everything. And then my dad, he bought the dealership building and then all the real estate around it. Oh yeah. So like all the dealerships that were around it in different buildings. So he’s somebody that I learned a lot from. Oh, that’s pretty good resource to have. Oh yeah. I mean he’s great. He’s great in business. He’s a consultant for other dealers now. He ended up selling his business, but he consults for other people. So he, I get to, it rubs off on me. He gets to help me within my business. Very cool. So you own, you own a harley? No, no. I had my license and I’ve written plenty, but I don’t own one.

21:34 Uh, so there’s, uh, you know, we have a lot of friends in this business, right? Your friends, peers, competitors, right? We’re all running on the same for how are you different then?

21:45 You know, our friends. Um, I can’t speak for everyone because I do see some people doing big things out there. Just I, uh, you just had, they have. And Jamil, they have a fantastic business. We’re all kind of learning from each other too because we definitely, yeah, I mean everybody’s got different things going on. You’ve got this stuff going on, which is awesome. Um, you know, jared and I would love to do more like social media and stuff like that. Just more presence in this industry. So we all have a lot to learn from each other. Um, but our business I think is built or we’re building it. I’m actively like, all the work that we put in our 70 hours is not spent on doing deals. We’re building a business that’s going to work for us. We’ve got a team of 14 people that, um, you know, salespeople, we’ve got an analyst, um, we’ve got a transaction coordinator, administrative staff, so we’ve got all these different roles that we’re hiring out to let our business run for itself.

22:41 We’re creating a great culture for everybody to work in. And so I would say our business is built for the long run to kind of operate on its own rather than us doing deals that might differentiate us. When do you plan on not being actively involved anymore? You and jared? We finally just hired out our last position, so our transaction coordinator, we just a changed transaction coordinators. So um, and the analysts was a huge role to, to hire out. Now anytime I want a property comped I just send it to her and she shall look all into and all that. So, um, I would say we’re never going to be fully removed, but we’re going to be able to do the more creative deals, focus on like some of like larger deals, more multifamily, stuff like that and let the single family operation run itself. So within the next year, I’d hope.

23:30 Cool. Very cool. Um, so we touched on this a little bit. What is your role exactly at a equity connect?

23:38 Sure. Um, so our business is two fold. We’ve got our wholesale side, which is, we look at it as more of an acquisition part of our business, um, and that those acquisitions come in and we determine whether they’re going to go into the investment side or be wholesaled and if they’re going to be wholesale these, they stay in kind of Jerrod’s arena. He manages dealing with these buyers and he kind of runs that side. I’m more on the investment side. So if we decide to purchase that property, I’m determining who were going into it with as a, as an investor. I’m like, we have different investors that we work with that will partner with us on private capital, deeds of trust, stuff like that. So I’m managing that. Um, I also handle all of the, like it just administrative side of the business, anything like all of our tax strategies, stuff like that, keeping the books up to date so we can actively look at the books as a tool rather than just a tax return at the end of the year. So we’re, we’re managing our revenue expenses, stuff like that. So that’s on my side with the finance degree. That’s kind of comes natural to me.

24:40 So we talked about investment partners. I mean at any one time, how many investment partnerships do you have or flips going on with these investor partner?

24:50 Sure. Um, right now we own, I’d say about 30 or so properties. Um, obviously that’s the process of being flipped. They are either on the market, they’re rentals. We actually are longterm play now is to rent them out. So we have, I think, I don’t know, maybe seven of them are actually rented and sitting aside, you know, for the longterm play. So they’re cash flowing there. We have investors in them but they have to season before we can get the longterm financing in place. So, um, I would say we’ve got like seven projects, three projects right now. Everything else was finished.

25:25 Okay. Um, and then the, the ones that you’ve got tied up, that’s your renting with investor money. Those investors don’t want to go long term. They’re, they’re too expensive for longterm. Okay. I see. Yeah, because that’s something, that’s one of the things that Eric sage was a previous guest and he’s got him, I guess he’s borrowing money at seven percent and they’ll do it for 30 years. Private capital. Yeah. You might want to talk to him. Yeah, definitely connect with Eric. And then the other ones where you’re flipping, what is your arrangement, if you can share with your investor partners?

25:57 Yeah. Um, so jared and I are kind of in a growth strategy we’re trying to not use because what we’ve done in the recent past is that we’ve used our own capital a lot on like, uh, the debt service, the, um, did the renovation, stuff like that. That’s not a scalable business for us. We want to be able to keep our capital, you know, um, compartmentalized to the acquisitions and um, and so what we’re trying to do is structure everything to be pretty much 100 percent financed. And so, um, right now we’ve been using a company called anchor loans and they’re lending to us. I don’t know if they’d want us to say, but we have really good rates with them. Um. Oh yeah. And then, um, we’ve got and that’s at 95 percent loan to value, so that’s a huge. And we also assigned to ourselves that we can make sure that our acquisition company is paid in full for the marketing and stuff.

26:47 So we assigned to ourselves. So essentially it’s almost 100 percent financing, right? Um, and then if we want to take on an equity partner, which usually I do, um, I take, let’s say the renovations going to be 25 grand, I’ll take that 25 grand from an equity partner and will do, it’s usually about 10 and two or so for a second. Ten, 10 percent, two points or 11 percent. Two points. Yeah. So everything is financing. There’s no share of the profits. I do do a share of the profits. I’m also a about this deal that we just did a in Vegas. It’s a larger property. Um, we had it in contract a year and a half ago and I’m, the seller actually signed with a real estate agent to list the home. So the listing agent, when he came to sell to us the listing agent through a fit, so she sued him for it.

27:36 And so during that time, that took a year to resolve that lawsuit. So we had to pay everything for that seller. All of their legal fees, all of their, they had a hard money loan. The homeowner did. So we paid there. They had no money. And in order to make sure this deal went through, we had to front, it was about $80,000 in front in front of costs for them to be able to resolve this lawsuit with her, us to get the deal. And then, you know, so it finally closed a couple months ago. And so what I did was I worked with an investor who is actually my dad. He, he partnered with us on it, um, he lent all those upfront costs and I gave him 15 percent of the back end, plus eight percent a return on his money. Oh, awesome. So dwayne, wherever he wants to know how much real estate do you own personally?

28:27 Um, I think we touched on this. I think we have about 30 or so right now. And then are they predominantly single family or multifamily or a mix? It’s all single family. And then Nathan wants to know who’s the lender. It was an anchor anchor loans. Yeah. They’re really good to work with. They’re not, they’re out of California. So anything local, we use a bench equity, they’re super easy to work with. You got to make sure that you have a backup because sometimes they run out of funding, but I’m so anchor has been really, really easy to work with and can usually get it done in a couple of days. Cool. So one of the things you had also talked about was creative deal structuring is creative deal structuring. Okay. Um, so we, uh, we’ve done multiple different types of deals, especially, I mean in wholesale and direct to homeowner acquisitions, you are privy to a lot of circumstances that people are in when they want to sell, but they don’t quite know how to sell because of one thing or another.

29:28 Um, and one kind of one thing I just touched on was that one where we friended all the money and then we got paid back at close of escrow there. Risky deals, but they’re the most lucrative. Um, we had another one I’ll tell you about and it was partial interest by out, um, there was a homeowner that wanted to sell, but the woman’s a boyfriends or husbands ex wife or something like that. She was entitled to. So you have like wife one and wife to on title and they don’t like each other at all. They won’t even talk to each other. Yeah, I know, but he passed away. So heat. So they were fed fending for themselves at that point. Okay. So one of them came to us, the other one did not want to talk to us. And the one who came to us, we said, well we’ll work with you, but we’re going to need this for a significant discount because we’re going to have to go talk to this other homeowner.

30:19 So we paid for her 50 percent interest in the property for cash. She gave us the deed of trust, you can only do this with joint tenants because it’s obviously divisible. So we worked with her and then we were able to go back to the other homeowner and say, you know, we’re now on title with you and we’re going to need to work something out. So we worked something out where she bought us out and it was an extremely lucrative deal for us. So we’ve tried to go after those ever since. That’s awesome. Yeah. We just got to find properties where the wife and x, y, exactly. I don’t know how you can exactly do that, but are like brother and sister sometimes. You know. I hate to see it, but that’s exactly right. Yeah. Inherited properties. And then you guys were on stage not too long ago talking about bulk.

31:08 What’s that? About a few years ago I did, I had a friend who, um, was a commercial broker and he had recently started working with people who wanted to liquidate portfolios and um, he came to me because he knew we were trying to buy single family homes and so he ran a pro, a package by me that was about 140 homes and um, so we went through it and we were like, okay, a few of these are deals, so we made an offer and the, the whole package and we made an offer and 60 of them of which we cherry pick the best one. So we were able to give them a more, like a better looking, um, offered to them on those. They took our offer in the 60 [inaudible]. So we did that deal. That was a really cool deal. When we first started, we wholesaled all but 11 of them.

31:54 So there was a lot of moving parts because we had like eight different buyers. Exactly. We had really good tcs. Yeah. Um, well I actually, I was like, no one else is touching this one. I got this, which I mean, you have to make sure that because you’ve got all these people moving in the same direction, you’ve got to make sure that everybody’s going to close at the same time. Otherwise we had our financing in place just in case people didn’t close because if one didn’t, we were in breach on all of them. So it ended up working out. We did very well on the package. So did you guys offer as far as percentage of Arv? It was so good at the time. I’m like, we got this package at like 73 percent or something like that and I think we sold them for like

32:41 80. Wow, that’s not too shabby. I’m okay. And then, so we were talking about interest buyouts and you mentioned earlier, is that the what, what’s, what’s the reo with creative structuring? We were, we were just, I’m buying at the courthouse steps and properties properties. All right. So, uh, you mentioned you have 14 people working for you. What does your organization look like today? We’ve got five salespeople, or

33:08 yeah, five salespeople. We’ve got one sales manager, he’s kind of the operations manager,

33:12 salespeople, meaning acquisition, acquisition, once comp sales after the lead’s been scrubbed their talking.

33:17 Exactly. Okay. Okay. So, well we can start with marketing. We’ve got several different types of marketing that we do. Um, we’ve got a call center that um, it’s, we basically, we also service other people, so we have created a name for it’s called call Geeks, but we run our own cold calling in that as well. We’ve got, I think about five or six agents there. We also have another call center that we have outside of that and we have about seven agents there. Okay. So we’ve got a bunch of cold calling going on. Um, we do some reverse or ringless voicemail and then we’ve got our website and um, a couple different other small types of marketing, but then all those leads come in and we do a, we have a specific strategy on how we dispositioned those leads into our sales floor. So yeah.

34:06 Um, the, there were all virtual so we’re not doing much in the way of going out and meeting with the homeowners. We kind of have built our business to be able to do everything from our hub and then we disposition or we, uh, we send people out, boots on the ground to go and get pictures and stuff like that, but we do everything from our hub. So who’s taking the photos? We have people, boots on the ground. So we’ve got a guy here who’s a locksmith and he also does our pictures, so we give them a call, hey, go get pictures. But we usually do that after we get it in a contract. We, we go, we do everything based on seller stated information. So you’ve got five salespeople, one sales manager, locksmith, photographer, guy. He’s got his own operation, so we just kind of worked with him in the organization.

34:55 So we’ve got that. And then we’ve got, um, we’ve got a dispositions manager, so he’s the one that any investment with you guys finally found somebody that jared anymore. Jarrod, Jarrod tag, tag, tag teams with them. But um, his name is Perry. Um, and he’s got a lot of experience in this industry. So he jumped right in and he does very well. So that’s who you’re talking to if you call us to my house and then, um, we’ve got, let’s see, who else do we have? Oh, we’ve got Rhoda, she’s, she works with me on all of our asset management. Um, she’s my right hand. She helps me with everything she keeps. We keep our books up to date. She’s kind of just does everything with me and then she went to Houston with me and everything. So she’s dealing with the contractors and she’s crucial.

35:37 And then we’ve got our transaction coordinator that we just hired. Um, so she’s managing all the transactions and then we have Kayla and Kayla’s our analyst. So, and that’s our underwriter. Underwriter. Yeah. That’s different than the disposition because citizen typically disposition, underwriter the same hats in most cases. Yes. But, um, a lot of our stuff doesn’t actually get dispositioned outside the company. We keep it. So we underwrite everything as though we’re going to buy it. And so she does that. And the dispositions is just purely a working with buyers and trying to grow the network of our company. So yeah. So you mentioned Houston, uh, what other markets are you in? Oh, so we’re in Houston. That’s where our longterm rental players. So everything we buy there, we buy it with the intent to rent it out. Um, and then we’ve been in California, both southern and northern California, which is a really tough, tough place to be.

36:30 So we’re kind of slowing down there a little bit. Um, Vegas, Vegas has been very good for us. And then Phoenix. Okay. So why is Houston the focus for buy and hold? Um, so the uh, hurricane harvey over a year ago provided a kind of an interesting now a market out there right now. So you’ve got like all these larger businesses that are out there, so people, it’s a strong economy. People need to live there. They had their, their jobs there and everything. Yeah, it’s huge. Yeah. And um, and so it provided, uh, an economy that people are still needing to live there and they’ll spend the money to live there. But, um, the homes kind of all kind of got destroyed. So it was a lot of supply and demand, that interesting stuff that was going on there, which allowed us to get in for let’s say 60 to 70 percent of market value and add value to it.

37:28 And then we’re sitting all in for about 75, 70 to 75 percent of arv all in. So then you’re renting it out. We bought this one deal for 88, we put 25 into it and we’re going to rent it out for 1800. So that Kinda gives you an idea of the pricing. Yeah. So that’s a good deal. But that’s also not uncommon. I mean that’s like, you know, you’re spending like 2:40 to 50 out here. Yeah. Yeah. Which is why we shifted our targets to Houston because that’s a good home. I mean we’re buying that in 1990 builder newer and so you know, your cap ex is relatively manageable and so yeah. Cool. Very cool. Now I know that you guys have a, you mentioned earlier the you’re outsourcing a couple of different function. So what services are you guys outsourcing at the moment? We’re offering available for offering available yet, um, we have our call center.

38:23 That’s really the only thing that’s live right now. We do, um, so we have 140 agents in Mexico that are cold calling and so, um, we sell those on a bulk between three and five agents usually is the average for our clients that are buying. So people in our industry who want to work with a call center and that call center that understands their business. And uh, so we’ve been able to package up a pretty good package for those people. It’s just a turnkey call center for them. I was training them, we partnered with Carlos and sal, so Carlos, sal, jared, they all go down there and they’ll work with them. But um, we have eat for every about 20 guys. There’s a supervisor and a key way. So, um, and then they’ve got training all in house. So we’ve trained them up. And what is your monthly overhead for your operation? It’s a lot. Yeah, it was a percentage. Sure. As a percentage, I’d say it is about 20, 20 percent, 20 percent. Yeah. And then

39:29 some of the people that come into, you know, the uh, uh, I see posting and wholesaling houses full time, all these other groups is, you know, who to talk to, where to go for coaching this or that. Is there any particular group coach coaching organization that you direct people to or what do you do?

39:45 Um, I don’t usually. I’m not as out there, you know what I mean? Like in the networking and meeting with new wholesalers. Um, so that question doesn’t. I don’t get that very often. I’m, your best bet would be to just start talking to people yourself and kind of learning this business. I don’t know if you necessarily need to pay for coaching, you know, you might want to pay to sit in a room at a round table and brainstorm with people. But I don’t know if for me I’m coming from a completely different place than most people in our business comes from. I was lucky enough to have a mentor. So you know what I would pay for that. I don’t know if I necessarily have an answer, but I know that there are lots of good people out there offering coaching. There are a lot of people offering coaching. I would just say don’t spend your last dollar on it because it’s put out some marketing and learn for yourself, you know, school of hard knocks. Yeah, exactly. Right. That’s school of hard knocks.

40:45 Uh, is there any crm tool or system that you could not live without?

40:50 Um, podio, we use podio and we’ve, uh, we’ve got it pretty much down. Our podio is, is a huge tool for us, keeps us organized, keeps us in front of sellers. Um, and also it’s super customizable, like it’s nice that you can get into globiflow and change all the things and really customize it on the spot for you. So I know everybody uses that in our industry. I think it’s good. We’ve spent a lot of money on different crms. I don’t. We did infusionsoft. We spent, I’d have to say probably 20 grand on it and it was such a waste of money because it’s not as good as the simple podio tools.

41:27 It’s crazy to me because, you know, uh, I, I’ve gone through Infusionsoft, I’ve gone through, I’ve seen other people sell as far as I’ve seen all these other different crms and you go through podio. I was like, this is really simple.

41:36 Yeah. It’s super safe and effective. Yeah, it’s crazy. It’s built on excel. So I mean if I didn’t know that, yeah, that’s what I’m told. So. And it’s kind of clunky in parts, but you can make it. Yeah, you can make a deal. Would you want it to do exactly. There is no, I haven’t heard of any restrictions. Like, Oh, you can’t do that. It’s just like, yeah, we have to figure out a way to make that happen. Exactly. And then also, I mean quickbooks for me, like, like I said, we, we, we really run our business based on numbers and knowing what our revenue is and making decisions based on what that is and what’s manageable. Quickbooks is able to tell me that I’ve got some va’s that keep it up to date. So. Yeah. Yeah.

42:11 Uh, so going back to Podio, you guys customize it all on your own. You’re not using investor views or anybody else’s

42:18 head on? No, we actually worked with sal, sal and jared and I sell pretty much built out the whole thing and um, he and jared kind of worked to customize it to our business, which was super helpful and then flow that sits on top of it. So we pretty much have just made it our own. Probably doesn’t hurt that jareds a former engineer. Yeah. I don’t know. Jared. And he is an engineer to a t, so yeah. And it almost to a fault. He’ll spend his all of his time tinkering with things to make it perfect and it’s like go hire that done. Just tell them how you want it, you know,

42:53 it’s a pain in the butt, but when it pays off is really good.

42:56 Yeah. And he knows his business and his, what he’s doing left and right. So it’s good.

43:01 Uh, what would you guys do if the market dips?

43:05 I think that our business, our wholesale bows or direct to homeowner acquisitions business is made for that type of a situation because rather than, I mean our goal is to just fix and flip and buy and hold and that’s why we are our direct to home. Inner acquisitions can be retargeted from taking those, um, investments in house to just wholesaling them out to other people. And so I think that we would just double down on wholesale.

43:32 So you’re saying because you have the tool available. I go operations already geared towards it, but it’s just gonna be better.

43:40 I think it would just be better. I might agree with you wanting to get your opinion. Okay. I would say that, you know, it’s really also a good thing to be liquid in that time. Um, so, you know, hopefully I know that everybody’s worried about a correction and all these things and um, you know, I think that working with the capital partners that we work with allows us to be liquid when we want to know if that situation happens. Hopefully capitalize on it if you want to purchase, but I think we would really shift more in and double down on wholesale is going to be great in that, in that time. I think

44:16 I wholeheartedly agree and I’m looking forward to it. Yeah. Um, is there anybody you would recommend nathan caps wants to know, uh, for customizing podio? Is there a resource that someone could look into if they need help? Customizing it?

44:29 Um, I mean like said Sal, I know sal and Carlos are offering their services to help build out podio. I would say contact them. I don’t know what they’re charging, but all in marketing.com. That’s something very much like it. Yeah. Something like that. Just calls it s, h a, K I r what is your biggest struggle right now? Biggest struggle right now is.

44:57 I’m sorry, hold on. Let me think.

45:03 Personally in Houston, um, I learned that when I just went there because we just acquired a bunch of deals there and we want to start getting good and getting, going on construction. And it is scary out there honestly. Like there are, you don’t need a license to GC projects and so I’m in Houston, you don’t need a license. It’s like the wild west Texas. And so, um, it’s, it’s like a whole nother thing out there and so I would say that I’m struggling with trying to make sure that I don’t want to make any moves there until I know I’m making the right moves and clearly I’ve had some issues in construction, you know, so. Yeah. And I don’t want to just give all of our projects to one person. So trying to find the right course of action in Houston is probably my, my biggest struggle.

45:51 I’m also Jeron and I struggle with trying to make this business completely passive for us. And so it requires pulling us out and letting everybody know, fend for themselves and we’re way too hands on, you know? So it’s a very tough business I think because you’re dealing with more emotions and more people and we already know that real estate is the most stressful one of the most stressful events with someone’s life. Yeah, no, I know you only by herself at home. A couple of times and so people are stressed as it is when you’re doing 10 or 20 or 30. Yeah, 30 of those a month. Six, a few to lose her mind. Yeah, for, to throw a wrench in everything. And I just, I, I hate seeing my people stress in my business for some reason. I just, I sometimes I, I try to fix, you know, and so I struggled with just removing myself and letting the machine run on its own and you know, believing in our people enough, I believe in them, but I always feel like there’s education we can give to them and stuff involved. Kicking in. Yeah, exactly. Is your superpower?

46:52 My superpower?

46:54 Um,

46:57 I think that after doing as many deals as I’ve done and seeing as many situations as I have, I’m just, I would say that I don’t say no to anything. I or I don’t, let me rephrase that. I don’t, um, I find a way to get it done. Always. I guess like if someone comes to me with a problem, I’m not going to ever say no, this isn’t doable. And I hate that when people like lawyers, they like to say, no, you can’t do that. Well, no, you need to tell me how, you know. So I would say that that’s my superpower. And people always would say that they come to me to problem solve and try to find a way, like I said, to do it ethically, don’t cut corners through it and just get it done. So

47:41 creative solutions, creative solutions, and I think that is ultimately what we get paid for. So that’s a great thing to have for a superpower

47:50 in wholesale and indirect. A homeowner acquisitions, peep homeowners want to bring you their problem and fix it for me. And that’s what we do. That’s awesome.

47:58 Uh, what is the greatest lesson you’ve learned?

48:03 Greatest lesson? Um, I would say that

48:13 we, like I said, we’ve spent a lot of money. I’m on. Let me think here. We’ve spent a lot of money on things in our business that aren’t really going toward our end goal. And so, especially for people who are just starting, just figure out what your angle is and, or like what you, if you’re 10 years down the road, what would really make you happy to see and then back out and make a plan from there and don’t let yourself get distracted by quick money and buy the shiny objects that are all around us. It’s really easy, really easy to get distracted. Yeah, it is. And I mean people do it everyday and I like I’m coming from a place that where that I worked for somebody who literally came here on a shiny object syndrome, you know, and, and I don’t know, I just, I put my nose to the ground and just work my butt off and I don’t really get distracted by that stuff. So,

49:05 uh, what is your favorite best or most interesting failure?

49:14 I mean, the, the contractor was a huge failure. I’m,

49:21 that’s probably it. Yeah. Uh, and what book have you gifted more than any other?

49:27 I gifted how to win friends and influence people to a few people. Um, yeah, I think that’s a good book.

49:33 That’s a great book. Um, and then the last question is why do you think so many people have a hard time making it in wholesaling and flipping?

49:44 Going back to the Shiny Object Syndrome thing, I think that if the people, I like grant cardone role of 10 x, you know, you go into something and you think that it’s going to be, I mean, not everybody thinks it’s easy, but it’s always 10 times harder, 10 times more work, just 10 times everything that you think to, to get to where you want to be. So, um,

50:05 that is what I would say, I would say for myself, the TEDX is probably not a big enough number. Yeah, exactly. Because for me, I think everything’s going to be easy. It’s like, oh, I didn’t see that coming. I didn’t see that one. Oh, that’s another problem. So yeah, that’s very interesting. A point. So, uh, this is awesome. It’s been great. What is the best for one of our listeners to get ahold of you? Uh, if they had a question or a follow up question, just call me. Okay. I’ll put my number in the, in the comments below, or call me or text me anytime. Awesome. Uh, and again, guys, if you liked the show, please share this episode right now and uh, we actually don’t have a guest for next week, so we had to figure that one out. But we will be here Wednesday at two. We just don’t know who the guest is yet, so thank you guys and thank you. This was awesome. Thank you so much for having me. Appreciate it.