BiggerPockets Real Estate Podcast - 302: Making $100k/Deal Using Other People's Money, Time & Experience with Cory Nemoto

Episode Date: November 1, 2018

Ever had an interest in house flipping but felt you needed help getting started? Today’s show covers that exact topic! Cory Nemoto is an extremely humble but successful house flipper in Hawaii who is CRUSHING the game. On today’s show, Cory shares his personal strategies for keeping his pipeline full of great deals, what techniques he uses to make a minimum of $100k on each deal, how he partners with new investors to make everyone money, and his brilliant tips for building relationships with those most likely to build his business. You do not want to miss Cory’s unique strategy for using “debt-quity” to get deals brought to him before anyone else! Cory has been so successful flipping houses in Hawaii that he’s moved his system to Seattle, where he’s crushing it there too—all using very simple methods built on relationships and creating win-win scenarios. If you’re looking for a can’t-miss way to build a profitable house flipping business, listen to this one! In This Episode We Cover: The two reasons you should NOT get into real estate investing Figuring out your big “why” Cory’s unique strategy for getting started  What exactly “debt-quity” is How he makes a MINIMUM of $100k on each flip The networking strategy Cory uses to keep his pipeline full Where he finds hungry, ambitious, and like-minded people to partner with and his brilliant strategy to connect with them And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinars BiggerPockets Events BiggerPockets Podcast 189: 500 Deals, the $100,000 Wholesale Paycheck, & the Systems That Make it Work with Tarl Yarber Books Mentioned in this Show Rich Dad Poor Dad by Robert Kiyosaki The Book on Flipping Houses by J. Scott The Go-Giver by Bob Burg & John David Mann Fire Round Questions In your own experience, how or what have you done to find deals off-market? How are you finding your deals? Would it be better to buy higher end properties in good locations maybe? I am considering to invest a property either in Silicone Valley or Seattle area. What do you guys think? Anyone ever hold a “contractor” open house (so to speak)? How to source trustworthy contractors and inspectors? Tweetable Topics: “Even if the profit is small, it doesn’t mean it’s not a good deal.” (Tweet This!) “Every deal is different.” (Tweet This!) “If you’re in it for the money and the image, then you’re not going to make it.” (Tweet This!) Connect with Cory Cory’s BiggerPockets Profile Cory’s Website Cory’s Instagram Cory’s Facebook Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 302. With those investors, we consider them partners. And so it's good because they're not just in it for the interest, but they're vested in the deal. So they want to make sure we hit our marks. And, you know, there are our extra eyes on the deal because they're vested in it. You know, like I love when other people around me are vested in the same thing that I am because we're all on the same mission, you know. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place.

Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. How you doing, David? I'm doing great, Brandon. I'm here with you. I'm looking at Hawaii in the background, and it kind of distracts me from your oddly shaped face.

And so it's something better to look at than you when I'm recording this thing. Yeah, you know, that's why I do that. I got to make it not so scary for the children out there. But speaking of Hawaii, today we have a guest actually from the island of Oahu here in Hawaii. He's a guy that David and I met a while back when David and I were hanging out in Oahu. and we were instantly blown away by this guy. Corey Nomoto, Nomado, I hope I'm not butchering his last name. Super good investor, flipper, getting into multifamily and some of the stuff in the future.

He tells that whole story today. It's really, really good. And he's just got so many good points today. I mean, like, first of all, you guys always blown away with the fact that he makes, like, their target on a flip. Like, when I do a flip, I'm like, I'll make 20 grand. I'm happy. They don't do a flip, but they can't make a hundred grand per flip.

And they're doing like, dozen. a year, which is fantastic. But anyway, just so many good things, like how they make the thing, how they keep their pipeline full. He talks a lot about that, how they get deals continually. I also thought his, you guys all hear his discussion on like, we're marketing versus relationship and getting deals. And I thought that was fascinating.

And then don't miss when he talks about equity. Not going to say anything more about that. Dequity, it's fantastic. It's something I've never heard before on this show. But I'm totally going to start implementing this into my own investing. So with that said, we got a couple house cleaning, housekeeping things to take care of. I don't know what we call that. Including today's quick tip.

All right, today's quick tip is very simple. In the show, later on, you'll hear us talking about books. We talk a lot about some of the books that have impacted our lives a lot. And Corey makes this point where like some, like, when he read the book he shares during the famous four, he said when he read that, it like totally like resonated because he knew that was like true and he didn't have words for it. And I feel the same way about rich, like, whenever rich that poor dad, it was like, it put words to what I was feeling.

And I know, David, you said the same thing about so good they can't ignore you, right? When you, like, so the quick tip today is very simple. Read books, like real estate, business, personal development books. And when you find a book that is like, yes, that is what my soul has been like doing. Like, pay attention to that. It means that that is where your strengths lie, right? Anything you want to add to that, David? That's exactly right.

Most people don't know where their strengths are. They're just frustrated because this isn't going as good as they thought. They're not hitting their rhythm. Well, this is a way to speed up that process. You kind of tool around. You read every book you can. When you find the one, you're like, that guy gets it. I like that.

That's you, right? That's absolutely where you found your spirit book, basically. This book is expressing what's been in my spirit. That's where you know this is your wheelhouse. And that's where you should put your attention towards like improving in that area. Like you always say, Brandon, you got to double down on your strengths, not improve your weaknesses. Do I say that?

I don't think I've ever said that in my life. That's all you say, all the time. Because every time I tell you that you could do better with something, you're like, no, I'm just going to double down on my strengths and not improve it at anything. I just don't say that like concretely and nicely. You're better with the words than I is. All right.

See what I did there. All right. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise Flagship Fund. Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.

The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing.

This and other information can be found in the fund's prospectus at funrise.com slash flagship. This is a paid advertisement. Managing properties can feel like a full-on circus. You're juggling vendors, tracking payments, chasing approvals across multiple properties, and maybe a few HOAs, all while trying to. trying to keep tenants happy and owners confident. One delay can throw everything off,

and suddenly your day is all clean up, no progress. That's why hundreds of property managers rely on bill to streamline their finances. Bill for property management lets you add all your properties, assign permissions, pay bills, and receive payments quickly and efficiently, without the usual bottlenecks. It syncs with platforms like QuickBooks, Zero, NetSuite,

and Sage intact, so your accounting stays aligned. You can automate bulk pay. across properties and HOAs. Choose flexible payment methods like same-day ACH, international wires, card or check, and set custom roles in approval policies. There's even a dedicated bill inbox for each property to keep everything organized. Ready to simplify your workflow, book your free demo at bill.com slash bigger pockets, and get a $100 Amazon gift card. That's bill.com slash bigger pockets. There are two kinds of real estate investors. Those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how

they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NREG.com slash BPOD. That's N-R-E-I-G dot com slash BP pod. Let's get on with the today's show. Today's show, like we said, is Corey Nemato, super legit, awesome, very intelligent, very

smart and very savvy real estate investor who's doing flips both in Hawaii as well as in Seattle. And with that, let's get to today's show. All right, Corey, welcome to the Bigger Pockets podcast. Good to have you here. Good to be here. Thanks, guys. It's honestly a huge honor to be on the show.

And I guess before we get into it, I have a important question for you, Brandon. Oh. So how and when are we going to get David to move to the island? I know. I know. He comes out. Are you going to think this happened or what? Well, he's like the creepy uncle that, like, lays on your couch and, like, stays for, like, months.

And he hasn't left yet. Okay. He finally left. But, you know, he's going to be like the adopted Hawaiian pretty soon. That's right, David. He's just ignoring it. I'll take it. It probably depends.

on if I'm referred to as the adopted Hawaiian or the creepy uncle as to far as. Maybe I'll just move with Corey and he and I will take over the world. You can have your couch to yourself, Brandon. All right. Not a creepy uncle. I love an uncle that, you know, sleep on my couch. No, you got your own bed here. It's good.

It's good. All right. Well, we will get David over here to the island. But as you, as you said, Corey here is a Hawaiian house flipper, but also flipping in other areas as well, at least but ironically mild stomping ground. So we're going to talk about that today and kind of how you got into that. But before we get there,

why do we just go to the very beginning? Like, how did you get into real estate? Oh, it's a long story about trying to keep it condensed. Because I think it's the first time I've ever really thought about it recently of how I really got started. It's a pretty interesting story. I basically read Rich Dad, Poor Dad. That book changed my life.

And my dad has been telling me to read it for the longest time. And I was basically telling him, like, you know, like I hated to read at that time. This was probably like around 2011, late 2011. And finally I picked it up. I read it. And that book hit me like right straight in the fields, you know, because every, every word that was coming out of that book, you know, was exactly how I was feeling. So I closed the book and I basically was like, I called my dad, hey, I read the book.

You know, I read, I read Rich that poor dad. And he was like, oh, good, you know. And I was like, yeah, so I'm done. I'm done with school. And it's like my last year in college. And so he was like, oh, whoa, whoa, you know, finish it off. And so after, you know, taking into advice, I decided, yeah, I'll just finish the last year in school. But in the book, he recommends just going to the local Ria club and kind of meeting people.

You know, that's how you just get started. Just go and just start talking to people, even if you don't know anything. So that's what I did. I was in Riverside, California at the time. So it was Southern California. It was late 2011. So I met two investors out there. And they basically were like, hey, you want to learn how to do this?

I was like, yeah. And he said, okay, we're looking for a few hungry people. So, you know, he asked for my business card. Of course, I didn't have one. So I kind of just scribbled on a piece of paper. I gave him my number, not knowing that he'd call me back, but he did. So when he called me back, it was a week later, they invited me to go to Starbucks, you know, the normal meeting grounds for investors.

And I met with them. And the first thing he asked me was why real estate? You know, and so I didn't know how to answer that question because at the time, I read a book, you know, and I didn't want to tell them, oh, I just read this book. and it told me to go to this event. So I basically couldn't answer it. And he was basically telling me, he told me if it's for, it was pretty dramatic.

But now that I think about it, but he wrote down on a piece of paper and he was like, if it's for these two reasons, then, you know, this conversation's over. And, you know, we will part as friends, but we won't do business together. And the two words were basically money was the first one. And then the second one was kind of like for the,

image, like the notoriety of, you know, being an investor. And so for the image, I didn't care. You know, I was like, oh, I'm not here for the image, but I'm here to make money. You know, that's why I, you know, picked up the book and I got all excited is I want to make money. And what I realized, so I couldn't answer his question. And he saw me struggling. So what I realized, that was the first time somebody was asking me, like, what's my why? Yeah. And I never had someone asked me that before. And so he was basically, he told me to go home, think about it, and send him an email. And if it's good enough, well, you know, he'll call me back, you know. So I did that. And I gave it a hard thought, you know, because I thought this was a great opportunity.

And he called me back. And he decided to give me a shot. And the shot was basically me door knocking for a year for these guys. And door knocking, I mean, if anyone of you guys out there with door knock before, it's kind of like, it's the worst. It's horrible. Yeah, it's absolutely horrible. Yeah. If it's, it's not fun.

I mean, I love dogs, but during that year, I hated dogs. Every time I read the doorbell, I mean, they were like my worst enemy. But so I door knock for them for a year. They were doing this pretty unique strategy. It's actually pretty advanced. It's called, I see that it's referred to as backflipping on the forums. It's that kind of researched it, but it's basically they were flipping jumbo loans, so non-conforming loans.

At the time, it was 2012, so the market was still recovering. There was a lot of people upside down with jumbo loans. And in Riverside, I think anything over $475,000 was considered a jumbo non-conforming loan. So what they would do is they would have me go and knock on all the bees. They had a list, right? So I knew these people were upside down. And it was sad. I mean, they don't want to see me.

I'm the last person they want to see you. But once they taught me what they were doing, I realized the value I can bring to these homeowners because what they were doing was they were going after homeowners who were upside down on their mortgage. They had jumble loans. They had to have been current with their payments. and then they had to have wanted to stay in the house. So basically, they would go to the homeowner's bank, negotiate with the bank to buy the note at a huge discount.

And the reason why the banks at the time would want to sell at a big discount is because it's a jumbo loan, so they can't sell it to Fannie Mae. They can't sell it in the secondary market. So they're stuck with this toxic asset. And so they would negotiate. negotiate with the banks to buy the note at a discount. And then they would have the homeowner go and refinance, get another loan. And that's the reason why they have to be current with their payments is because they could get another loan to refy.

So if the property was worth a million dollars, but they owed 1.2, the investor may go in at buy the note for at 800, you know, and then go have the homeowner refy at like 850. maybe even nine. And so now the homeowner, they're not upside out anymore. In fact, they may have equity, right? And the investor got to make a decent profit. And the banks got to liquidate, you know, a toxic asset. So everybody won. And when I saw that, when I saw like that, I thought in real estate investing was just buy

and you rent, you know, you're just a landlord at the time. And when I, what I got out of that portion, as horrible as it was, door knocking for them. What I got from it was that investing, like these strategies can be so powerful. You know, like everybody wanted that deal. Even the bank. I mean, at the time, nobody cared about the bank, right,

if they want or not, but they did, you know. And so I realized what I can bring, you know, to other people with that strategy. And so after I graduated, moved back home, I knew I needed more training. So I went to more meetup groups. got some mentors and it's kind of pushed me to where I am today, I guess. It's been a lot. It's been a long road.

Yeah. I started from the very bottom. I didn't know anything. Well, what I like about that, what you're saying is, it's so true. And I think people look at investing like we're a bunch of sharks oftentimes coming into just like make money despite, you know, nobody else is going to make anything. But like, at the end of the day, a lot of investing is really like about it trying to help make sure we have win-wins and helping everybody.

Like the bank needed to get out of that loan. They, you know, you needed to learn how to invest in real estate. The investors needed to make some money. The homeowner needed to not end up, you know, in trouble and end up losing their property eventually. So it's kind of that helps everybody kind of thing. And that's kind of the ideal form of investing. So tell me how you got from that to, I guess, working in the house flipping industry. What was it like, maybe I even backtrack to like what came next?

I mean, what was your first deal that you did on your own outside of those guys? So after that, I started researching all the different strategies, you know, in investing. And I actually started out wholesaling. I chose wholesaling because to me, it seems something that I could scale, something that didn't require a lot of capital, which I didn't have at the time. And so I started wholesaling. I wholesale my first three deals to my partner, Jonah, and he's a developer and housekeeper here in Hawaii as well.

and he's like a mentor to me. And I'm partnered with him on deals even to this day. So, but my first deal, when I wholesale it to him, I kind of asked him, I said, hey, can I, do you mind if I work the project with you? You know, I'd love to see how you do it. And so, I mean, of course, he was like, oh, free labor. Yeah, like, absolutely, you know. So I worked the project with him.

And I learned so much just from even that first one because it was a subject two deal, actually. And I didn't know how to close the subject two deal at the time. time. So Jonah was luckily there by my side and I met him at the meetup group, you know, like our local meetup group. He was the one talking about how to structure a subject two deal. And I was like, oh my gosh, I have a subject two deal like in the pipeline right now. And so he was the first guy I called, you know, and then he helped me close it. We rolled that one through and I just kept blasting out my mailers, my marketing. We got, we did three. We did three, um,

wholesale deals, kind of like mini flips for me because I gain experience from those. I actually love that way of wholesaling is where, and by the way, for those who don't know what wholesaling is, you're basically finding good deals and you're not working on themselves. You're flipping them to a flipper usually and the flipper goes and does the work, right? So you make kind of a fee in between and when I go into deep specifics on how it's done, but lots of information on bigger pockets about it. But yeah, I love that idea of taking like, yeah, wholesalers can make decent money. But what you did is you said, I don't want to just be.

be a wholesaler. I want to learn. I want to grow. I want to get an experience. So, hey, can I follow you along? I absolutely love that strategy. I think it's fantastic. Because what you did is you wouldn't found a deal. You brought value. You weren't just going up to the guy and be like, you know, teach me everything you know and, you know, take every Saturday from now into eternity to spend time with me. You were like, no, I got this deal here. I brought you value. Now you take, yeah, you teach me, you know, will you teach me? And like, it's such a good relationship. What I'm noticing about the beginning of your story is just like relationship, relationship, relationship, relationship. I mean, like, you started right with that last, we went to a meetup, right?

And you met those people and you got connected with them and started learning how to do it there. Then you went to a meet up in Hawaii and met this guy and started learning there. And I just want to like throw that point out there to everybody is like bigger pockets and real estate is cool online. Like we all hang out. We have people on the forums or listen to the podcast. But like there's nothing like getting out there in real life. life sitting down for a meal or a drink or whatever and talking with real life investors, like networking.

You'll learn so much and you'll grow so much in those experiences because it stretches you because people are kind of afraid to get out there at network. So, Corey, do you have any advice for people who are listening to this? Maybe they haven't been to a local meetup or a real estate club or anything like that. What should they do that first time? How should they approach people? Well, I think, like you said, it's super vital to kind of get out there. in the community.

I feel it's the only way if you really want to take it serious because your network is so important in whatever market you're in. And I was talking to David earlier, but it's like when you go to a meetup, it doesn't matter how much experience you have. Like you have something to offer somebody,

whether it's time, your time. Like when I first started, I didn't have anything to offer except sweat equity and my hustle. You know, like that, but that was worth a lot to somebody, you know, and I did well for them. And so I, I think that's the thing that for someone who's new and maybe intimidated about going to these events is that you just, you got to know that there is, you do have something to offer. And you just got to find the right person that is looking for what you got, you know, whether maybe you do have some. cash lying around and you're willing to pay to play. Or maybe you don't have cash, but you're willing to put in the hustle for somebody to learn like I did.

Yeah. You know, so there's there's something that you can give to someone else and someone is there most likely to receive that. Corey, I want to take your point and expand on that a little bit. But before I do, we need a little bit of background on you. How many houses are you guys going to flip this year? Are you on track for? So right now we have 13 in progress. We have five in escrow. Years closing. I think this year will probably hit maybe 25. That's awesome. And what is your minimum profit you want per house?

So we don't we we don't do a deal unless it's six figure profit or more. We look at two things. It's the net profit and then the ROI. So we in Hawaii especially, we won't do a deal unless it's a six figure profit. But at the same time, we still keep an eye on the return on investment, right, the cash on cash return. Because if we're paying, if we're tying up a million dollars and we're making 100 grand, I mean, yeah, it's a good deal. We're making 100 grand. But we could have took that million and we could have three deals. Three deals. Exactly.

We could have done three deals and made 300,000, triple the return on the same amount of money. So and a lot of times we we leverage everything, you know. So what we like, we're responsible to our investors as well that we want to get the most return for their money. Yeah. So here's the point I want to make because we were just talking about relationships and how, you know, you formed relationships and how you started at meetups. And I could, I just know for those who don't know, Corey, Brandon and I met him. And immediately we're just like, dude, I just like and trust that guy.

like five minutes into knowing Corey and you're just like he's either a professional con man or just a genuine good dude who makes you think that he is right like he's really good at that strength and that strength has translated for Corey into flipping an average of two houses a month which is really good but it's not like overwhelmingly busy right and then he's saying we're also leveraging out a lot of what we're doing so that's even less work he's doing and he's averaging a hundred thousand dollars or more on every single deal you can do the math and see at 25 deals a year what that's turning into right that is how that's how that's relationships are. Corey has figured out, I don't need to be the one swing in the hammer.

I don't need to be the one raising the money. I don't need to be the one doing hardly any of this. I need to be the guy who's developing relationships with the people that find deals. And that's worth, you know, 25 deals to me, $100,000 a deal, like, you know, $2.5 million in gross profit before I get split up. So just like let that sink in. And then, Corey, what I want to ask you is for those who are like, okay David, shut up. I get it. Relationships matter. What the hell do I go do now to form them? Like, how do I build relationships? Can you share a little bit with us of like how you got started and what tactics you're using to build relationships and knowing who you need to be building them with? Right. Well, I guess first before I go into me, in my deep core, I'm an introvert.

Like, I really am, you know. And after a networking event or a big networking event, like it takes all my energy. You know, like, and I guess I call myself like a functioning introvert because I can function at an extrovert level, but it wipes me out, you know, and I get it. Like, I can, I get the introvert mindset where it's intimidating or, you know, you're, you're unsure about talking to somebody or initiating conversation. But what I found helpful is just showing up is half the battle. And so whether it's a meetup group or maybe you're hosting your own meetup group, that actually, believe it or not, takes the pressure off of you a little bit because you can put it on somebody else, but you're controlling it. So, I mean, that's a great way to build a network.

Another way that I kind of gave as a recommendation to a group was that any time when there's a big event, whether it's one of those large training companies that come in through town. Like I would go and not to be sold necessarily on the products, but to be there like kind of looking at who's hungry and who's somebody I think I can work with, you know? And because everybody there is, most of them are new. They're not seasoned yet, but they're hungry. They're there for a reason.

Like those are the perfect people to start building relationships. with where and maybe you're on the same level, you know, but it's a little bit easier coming from the same level, you know, to build your confidence in building some sort of network. When I was wholesaling, my goal was to build a big buyer's list and obviously market for deals. And so a huge strategy was building a network of other wholesalers to co-wholesale deals with, or tap into each other's buyers list or tap into each other's deal flow. So and we were on this, I met a lot of those people at those type of events. Like I've been to 100s.

I would still go. You know, if I, I don't have as much time now, but I would still go to those events. If I ever felt that my pipeline was getting a little dry. Yeah. I would. And kind of, I don't want to use the word recruit, but that's kind of, I'm looking for, for somebody to help. You know,

and of course, when they're by my side, I teach them, I give them everything. All my marketing materials, I give them, you know, like every strategy that I use,

the list that I pull. And it's because I, I want them to do well. And I don't, you know, make them sign any non-compete or, you know, first rate of refusal. Like,

I just trust that, you know, and if they can take down the deal themselves, I'm happy for them, you know? But if they can, like, I know that I'll be,

at least on the top three of the callback list, you know, hopefully. But I love that attitude, right? I'm just giving. Like you just, if you help other people, what's that Zig Zig Zig Ziglar quote, right? If you help out of the people get what they want,

you'll get anything you want or something like that. Like you'll get everything. Yeah, like you'll get everything you want if you just help everyone else get what they want. Like, and you mentioned this idea. First of all, I think that's fantastic.

It's finding people who are, who are new, who may be going to these real estate events, whether it's, you know, you guys, if you're listening to this, everybody,

go to biggerpockets.com, slash events and you can find a list of local events all around the country happening just from Bigger Pockets members just like, hey, let's meet at this bar at this restaurant at this Starbucks and let's get together and talk. In fact, I did one last week at a beach down here in Maui, like just hanging out with cool Bigger Pockets people. And yes, check it out, start going to those things. But then you mentioned pipeline. And you said if your pipeline started to dry up, you would start networking again in that way. So I'm assuming that you're using, this networking skill to find deals. Can we spend some time on that? Because I mean, finding,

first of all, yeah, finding deals where you can make six figures on a flip is really, really hard, right? Like, I mean, most people I know are like happy with 20 grand, right? So first all, finding those deal is tough. You must have a really good pipeline. And it sounds like you're using these people in relationships for that. So let's go there next. So how are you finding deals today? Yeah, I mean, that's absolutely it. Because for me, I was actually invited to speak a women's investor network, investing network, where it's all women. So they ask all smart questions, you know, it's a little, it can be a little intimidating. But the first time when they invited me to talk, they asked me to talk about deal flow because we did have a strong deal flow. And so I knew

exactly what the, like, what the secret is, you know, and I know everybody's looking for the secret to how do you build such a big pipeline. And I mean, there really is no. secret, but, you know, if there is any, it's building your network. And let me explain, because I know it's going to sound, you know, people want something tangible and then they did too. The group wanted something tangible. And so I gave them the parable of like, I don't even know if I told it right, but of the two guys who were in the village, right, and they're tasked to go fetch water at the top of the hill. And one guy would lug buckets every day, take it back. to the town and, you know, sell his buckets and he'd make money every day while the other guy

would spend his time digging a trench, right? So that one day he would tap into the well and all the flow would be his, right? So the guy lugging buckets, he's, that's like marketing. You know, like if you market enough, you're going to get deals. It's just a numbers game. but the moment you stop marketing or the moment you stop lugging buckets is the moment your deal flow shuts off right so to me and it's proven in Seattle as well which is a new market for us but what you want to do is spend time teaching others and you know giving them all your resources and everything you can for them to succeed and that's just one more person that will be out there shopping deals for you.

And when they get a deal, you're going to be the first one they call because you gave them the time and the energy to teach them. Right. And even if they don't, it's all the better for them. You know, it's just, it's good on them. And so, I mean, that's how you true. And over, and you'd be surprised how fast you can build that pipeline, you know? So I know it seems like, oh, it could take years.

And it has, you know, I've been doing it for years. So I have built so many relationships. And that's why it can't shut off, you know. And if I, I don't really market anymore. You know, I don't. And I get off market deals like pocket listings. And, you know, even MLS. I mean, MLS is constant, of course.

But, you know, if ever my deal flow started to slow down, I would go to those training events. and as soon as they drop the $30,000 or $50,000 price tag, you know, and you see the hungry, motivated people, they're ready to go, but they just can't because they can't afford it. That's when you come in and help them. I'll teach you everything I know for free. That's really smart, actually. So, like, that's what I told the group is like,

because they wanted something tangible, you know, and I get it. Like, you know, they want the secret list or the secret marketing piece, And there is no secret marketing piece, believe it or not. But like, and there's no secret list, right? I mean, it's all a numbers game on the marketing side. But something tangible on building your pipeline or your network is just that. You know, finding, going next time there's a big event or something, go there. And as soon as they drop the price tag, you come in and just help the people who can afford to do it, you know?

And then, you know, you'll pay off. you know, you're going to donate your time. And some people will take advantage of your time, but those people don't last long in your circle. You know, so. You know, it's something that I learned from, I think was Tarrell.

Actually, you and I both know Tarrell, right, in Seattle. Yeah, thanks to you, man. Oh,

that's right. I connected to you guys. I totally forgot about that. Oh, yeah. That's funny. Touch with Taro, man. Yeah. He's a good friend.

Him and his wife, Grace, like, I love, they're fantastic people. That's funny. All right. Anyway,

so yeah, Tarle does that up in Seattle where they have like meetups on Saturday morning where they bring out like want you know want to be up and coming investors and they teach them everything that they know about finding deals so then of course these people go out and find deals and who do they bring them to the tar like it's just that same relationship thing I love that so let me yeah he gets it like so let me back and now I know why you guys are good friends like that makes sense because you guys both have that same relational thing so what are you teaching let's let's go back what are you teaching these up and comers to do to go

find deals. Like, what are they doing to bring you deals? So what I teach them is the marketing side. And I'll give them all my resources. I'll give them the spreadsheet I use to run the numbers. You know, the websites I use to pull comps. Even if they need a realtor resource, I will refer them to a realtor who I trust that if they find a deal, like I will close with that realtor. You know, So I give them all the resources that I would have if I was in that position that I need to find deals. So, and I don't hold anything back. You know, I'll give my marketing, the postcards I've used, you know, the list, where to go. Even the spreadsheet that we use to run the numbers.

Like I let, you know, I give them all the resources. And then I'm also there to help with questions and stuff because things come up. You know, like they get angry phone calls. And like, I always give them the warning, you know, if you do enough mailers, you're going to get the crazy calls. You're going to get the people who are like, they're just in a bad mood. And, you know, like just warning them to not get, you know, intimidated by that because that's what happens when you do direct mail.

You know, you get people upset for some reason about you sending them a mailer. Yeah. I know, people are, people are very, I don't know, touchy on that. But sometimes, like, you send me. piece of paper in the mail. You ruin my day. Like, I'm like, come, come on, buddy. There's people who didn't need dinner. Dominole is all mad. Yeah. Yeah. Yeah. Well, here's something to think about when it comes to that, right? Because I have quite a few properties now across the country and they're all out of state, right? So I show up on everybody's out of state absentee owner list. And I get so much mail that if I don't check it for four or five days, it like the post office will stop sending it to me because my mailbox backs up.

It's like I'm drowning in it, right? So if you. think that your letter is going to be the perfect font or style to catch my attention in the middle of that, you're insane because it's all going in the garbage and I'm probably going to be cussing you out of my head like what you guys are talking about, right? However, if I know you and I like you and when I think of real estate or ugly houses or messed up houses, I immediately think of Corey, who do you think I'm going to call? Right. They're like, there's something to be said for why those relationships are so important. Direct mail is what you do when you don't know anybody. It's better than nothing, right? But you're way better pouring your time into the relationships you

already have with people that you already know, pumping those people and saying, hey, when you hear of someone who there's a death or they have a hoarder house or you just see a nasty, ugly house, think of me, right? Like pounding it in their brain that when you see nasty house, you think Cori Nomoto or you think Brandon Turner, because that's what's going to get you that phone call. And I bet most of us, if like, I learned this with real estate, right? If everybody listening right now thinks of like, if you had to sell your house today, who's the first person you would, a call. Everybody has somebody that will come to mind. Like very few people have no one at all. And if those people are the ones who are going to go Google someone, so all these realtors that are out there

chasing like SEO and putting marketing dollars into finding strangers, you're going after a very small percentage of people. The people who know me, they're going to call me. They're not going to find your SEO stuff. And that's like where like Corey, you hit it right on the head. You know you're introverted, but you didn't let that stop you from finding a way to bring value. You just created an atmosphere when introvert can thrive. Like what you said is when you host your real meetup, there's no pressure on you. I don't have to walk around introducing myself to people and feeling awkward and like, where am I going to sit and what do I do with my hands? I don't know, right? They're coming to you. They're like, oh, you're hosting it. You're like, yeah, what's

up? Who are you? What's your name? And you get to take control of that conversation, which is what every introvert needs, right? Because this might be a surprise, but Brandon and I are pretty introverted too, right? Like, we turn it on for the podcast and we come alive and when we have to meet people we do. But just like, Corey said, when we're done, it's like collapsed on the couch and like, oh, I'm so glad that is over. It felt like a workout. You know? So what we do is we create environments where our personalities will do well in that situation. Brandon always talks about like he just, he's created this image for himself where he just goes and stands against the wall and people are like, you're Brandon Turner, right?

And they come talk to him. He doesn't have to do anything but answer their questions. It's perfect, you know. So whoever I do with my hands in the corner. Yes, that's Brandon. I don't know what to use the anchor. That's just, instead of making excuses and saying, I can't do this, I'm not an extrovert, you say what would I need in order to be able to do it?

How can I do this? And then how can I work towards creating that environment to thrive in? Exactly. Yeah. So, Corey, I have a question. I want to move to it. You mentioned Seattle's now another market you're working in. So first of all, you live in on the island of Oahu still, correct?

Correct. Yeah, you're flipping houses now also in Seattle, which is, I mean, yeah, it's like the closest plane ride probably, but it's still thousands of miles. Like, you're not local, right? So a lot of people listen to this. show right now are going, I want to invest in real estate or I want to flip houses. I want to holdout or whatever, but I live in an expensive market. Like, you cannot, I don't think you can get more expensive than Hawaii. Like, I mean, like, it's just maybe like some areas of like the Bay Area,

right, but like, or New York City. But like, it's crazy expensive. So all the people who say they can't do it and they have some excuse on why they can't, you're proving them wrong every minute of every day, right? So how are you doing that? How are you investing not only in your own market, but in another super competitive expensive market that you're doing? don't even live in. Right. That, I mean, that's a good question. And, uh, I mean, I think people's miles would drop if they saw what we pay for a

tear down here in Hawaii, like, you know, a million dollars does not go far. I'll tell you that. You know, if you're a millionaire in Hawaii, it's like, that doesn't mean nothing, you know, so, but Seattle is, I mean, it's just as expensive. It's, it's close. You know, it's, it's a high price point market, very competitive, you know, And to be honest, it's all about leverage for me. And it's about, I bring it up to three points.

And it's basically OPM, other people's money, OPT, other people's time, and OPE, other people's experience and expertise. And because I can't be everywhere all the time, you know. And we got, even on the island alone, we have a bunch of flips in various stages. they all need to be checked on regularly. Things do step through the cracks. I mean, no matter why, I mean, flipping houses is a dynamic thing. It's so dynamic and complex. Like, you'll be shocked at some of the fires that you have to put out in some days, you know?

So in order for me to still keep the focus on the big picture in pushing the company forward, but still making sure it's thriving, I have to leverage other people. And, you know, that's a huge. I couldn't be able, I wouldn't be able to do this without other people on my team, partners, you know, other investors. So we took the same thing we're doing in Hawaii, which is we built a crew that we trust.

It's taken years to, you know, build trust with them. And we've built a team of other investors who want to help on the projects just to see how like we do things, but also some of them, they bring money to the table too. And of course, then, you know, they're a partner, right? We'll do maybe an equity split or we'll give them interest or we even do what we refer to as equity. So we'll give them debt and equity. So we might give them, I don't know, 10 to 12 percent interest or, you know, maybe 20

percent or 30 percent even of the equity of the net profit. depending on how much they bring to the table. And whatever is higher at the end of the deal is what they will get, you know, whether it's the interest. So if the deal runs long, they get paid their interest share. If the interest becomes worth more than what their equity is, they'll get their interest. So they're kind of safe either way. That's awesome.

I've never heard anybody doing that before. Dequity. I'm going to say that word. Yeah, we're doing that a lot, actually. And it's working out really great because we have investors who, they're not just lenders. They don't want to be passive. We do have passive lenders that they're like,

don't even talk to me until I, you know, it's done, you know, and we're ready to sign docs or whatever. And then there's investors who they want to participate, you know, and they want to be in the mix with us. Because it is fun. You know, the day to day it is fun.

So with those investors, we consider them partners. And so it's good because they're not just in it for the interest, but they're vested in the deal. So they want to make sure we hit our mark. And, you know, there are extra eyes on the deal because they're vested in it. You know, like, I love when other people around me are vested in the same thing that I am because we're all on the same mission, you know.

We use that a lot. But back to the main point, we took that model from Hawaii, and we're using that in Seattle as well. So the only difference is my partner, Kikoa, he's managing everything pretty much up there. and he's good on like the more of the design side and the operation side. I get my jolties off of like the deal, you know, closing the deal, putting the pieces together, you know, funding it, finding it. And he does too.

And I still enjoy the operation side too. But I know where my strengths are. He knows where his strengths are. And he's actually, we own the construction company up there now. And so he's been managing, he's been GCing all the projects. But he has project managers that he has under him. Whereas here in Hawaii, we have a GC and he hires out, you know, and I just manage the contracting team.

So I manage the general contractor. That's the only real difference. But the way we approached basically entering the market is the same how I would do in any market. And actually, you're a vital, whether you believe it or not, rather than you're a huge role in us getting established in Seattle. because you put us in touch with Taro. That's awesome. And I remember, you probably don't even remember this, but I messaged you.

I was like, hey, dude, like, are you, you know anybody who's the players out in Seattle? And you're like, I know, just the guy. And, you know, you sent me up Taro. I met with him up there. And it's like right away, I hit it off, you know, because he's, I mean, Tarro is huge. He does a lot of flips. And just like us. So the very first meet, I would ever forget this, we met.

He just came back from like a flight or something. And he took the meeting. So I was very grateful. But all of his issues that he was talking about, because he had so many deals, were the same issues that we deal with, you know? So right away, I was like, hey, man, like, I know exactly where you're at. And I knew, like, you know, and he's so generous, you know, him and Grace, his wife. So they really helped us get established because, I mean, I didn't know how to fix the chimney,

how much chimney costs, you know, like, or a fireplace. Like, we don't have those over here, right? That's funny. We don't even insulate our houses because, like, you don't really need to, you know. But so like all that little stuff, you know, like he's helped Kekoa a lot out there because there is differences, you know. And but we took the same model of finding deals, you know, like Kekoa's, you know, he's up there networking. He's meeting all types of new people. And now, I mean, I mean, he's well established.

A lot of people know him up there. I think they wonder like, where does this guy come from? this guy from Hawaii, you know, he's, because we are doing a few deals out there. And I've gotten to know a lot of great people just from basically embedding yourself in the market, you know. Yeah. That's awesome. And that means going to and meeting new people. That's cool.

Well, hey, if you. But I thought I was supposed to spend $50,000 on a course that would teach me how to have all this stuff magically fall into place. So I didn't have to go meet people and make friends and put on pants. I still don't put on pants. But we're Hawaiian. You know, in Hawaii, you don't wear pants. I don't know if I don't know if I can claim to be Hawaiian yet. I may, what do they call me a Howley?

That's okay. I'll take it. You are a Howley. I'm here. Yeah. I'm here. It counts. All right. So if people want to listen to the episode, by the way, with, we've been talking a lot about Tarle. Tarle is awesome. And his wife, yeah, very awesome couple. I love those guys. Listen to the show. We interviewed Tarrell on 189. I think it is. So biggerpockets.com

slash show 189. And that one actually, he talks a lot about networking as well. So very, very good episode of the podcast. But with that, we're going to shift gears here

and head over to the next second one of our show, the deal deep dive. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex,

time-consuming, and expensive. But imagine if real estate investing was suddenly easy. All the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Funrise Flagship Fund.

Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.10. The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought-after industrial facilities thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise

Flagship fund before investing. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC held properties. These gaps surface surface. only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your

insurance with someone who gets investing at NRE.com slash BPPOD. That's NREIG.com slash BPPod. If you think property management is expensive, try mismanaging a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early. That's expensive. A good property manager isn't overhead. Their protection against small mistakes turning into big losses. And that matters more than ever in this economy. That's why I like Mind.

Unlike other property managers, Mind manages your property like an investment. They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score. And they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is much cheaper than learning the hard way. Tax season reminder for all the real estate investors listening. If you own rental properties, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS compliance strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your property.

pocket for your next deal. Cost Segregation Guys is the go-to firm, having done over 12,000 of these studies with $500 million in total depreciation identified. Head to costsegregationguise.com slash BP to get a free proposal and see your potential tax savings. All right, let's get to the deal deep dive. These are the questions that dive deep into one specific deal. So Corey, you got a deal in mind? Yeah. Okay. So tell us, first of all, before I go, I'm going to have like seven or eight specific questions, but just overarching, like, what is this? Is it a house? Is it a flip? What's the deal? It was a single family flip that we did earlier in the year. And it was interesting because we almost didn't want to do it. And I'll lead it to why. Yeah. Yeah, well, yeah, why don't,

I don't, hmm, I don't know, see if you can bring it up in these questions. But also, first one, how did you find, now let's go. Why did you not want to do it? Let's go there first. Why did you not one. Okay. Well, for one, it, the projected net profit was, it was like 80,000. So it didn't hit our, our mark, right? We were shooting for a six-figure deal. And that one did it. And that was the first one. And it wasn't an easy flip. It wasn't like we can get it in and out. It's a lipstick. You know, it was a full gut type of flip. And those take time. And we were leveraging, we're going to leverage hard money on it. And so we were bleeding, I think it was like $129 a day.

Like I counted by the day, even Sunday. You know, when the guys aren't working, like, we're losing money. You know, so that's why we almost didn't do it. We wanted to, we almost wholesale it. Like, we were going to wholesale it. But, you know, we brought a couple of our guys down there like, ah, I can tell you, I don't want to do it. So we're like, ah, well, don't worry.

Like, if you don't want to take it, we're going to charge forward. and we're going to take it down. But I was kind of like, I was iffy about it. Okay. All right. So how did you find the deal? So we found this deal.

It's actually my partner, Kikoa. It was his friend. So his friend was facing foreclosure. And so that was another kind of reason, an extra push for us to get in there and, you know, help him out. So he was able to talk to the bank and have them agreed to a short sale. Okay. So it was a.

short sale somewhat of a pocket listing because it probably would have went on the market, maybe as an REO where we weren't, you know, we don't know. What it was interesting is like it took basically, we put in the offer and the short sale approval took like seven months. So we didn't hear back till the next year, so to this year. And finally the bank's like, hey, we accept the offer. only if you can close in 14 days. And we're like, oh, like, what offer is this?

Like, we don't even know. We make hundreds of offers, you know, and like 14 days. Like, who made that deal, you know, because we never do like, I mean, we can, we can close that fast, but we always try to shoot for at least, you know, 20 days or, you know, just to give us cushion. But so when it came up like, hey, they accepted your offer, but you got to close in 14 days, you're like, well, who wrote that offer? but it turned out it was the one we wrote like half a year ago.

Yeah. I remember on one of the episodes of the podcast we had a long, long time ago, I think it was Anson Young his first time on. He talked about the short sale time machine. And he's at a short sale time machine is basically when you put an offer in and then it just goes like you don't hear it from it for months, maybe even years. And then all of a sudden it comes back and they if they take your offer like the property has probably risen in price dramatically in that time.

but it's like you can always say never mind at that point. But anyway, I remember that being a really funny episode. It's like a stock option, basically. Yeah, you're buying an option. You can go with it. Yep. That's hilarious. Yeah.

Short sale time machine. I've never heard that. It's so true. Yeah. All right. So how much was it? How much did you end up? How much did they want?

How much did you pay for it? Or the numbers there? So they wanted $4.85, but that was just a little, that was even more too tight. But we took it down at $4.75. It was a three bed, two bath. about 1,100 square feet on the tax records, but we had our guy go in and measure the entire house and it's actually 300 square feet.

Oh, cool. So we were able to list it at 1,300, but we just disclosed that it does not match the tax record. Was that in Hawaii or where was this property located? Oh, this is in Hawaii. Okay. I was in Makakil. So it's kind of like the west side,

which is actually booming right now. Like, it's being more developed. If you're willing to put up with the traffic. Yeah, yeah. So the traffic is horrible. Yeah, how's that light rail coming? Is that? Yeah, I know.

Right. If you guys want to hear a great story, just like look up the information on like the Oahu. I don't know, did they call it light rail or whatever that is like the monorail, light rail, whatever. Yeah, the rail project in Oahu is the most depressing story. It's like, it's like if you drive through Oahu, there's like this gigantic like rail built like from one side like, you know, from Honolulu that goes way out west.

And it just never got finished. And they're still working on it many, many years later. And it actually affected us a little bit. I don't know if it was this year or the end of last year, because there was a shortage of like concrete. Oh. Because of their, you know, they were throwing it all on the rail. So like it was like the prices just went up.

And then there was like no supply because, you know, like a lot of it has to get shipped in and stuff. So yeah, it kind of hit us a little bit on that. And even more so, you know, I mean, when you say rail, out here it's just a nightmare. Yeah, yeah, yeah. People get very angry about it. Anyway, so, yeah, check it out. Go Wikipedia or something.

How did you negotiate it? You kind of already told us. It was a short sale. Any other negotiating things in there? Or should we move on to the next question of this? That was pretty much it. I mean, the bank kind of just told us, like, hey, closing 14 days or we're moving on to the next buyer, you know?

All right. All right. How did you fund the deal, 475 plus the rehab? Right. So we funded this with hard money. And then we brought it in. an equity partner. So we brought in so hard money and basically private money. And on this deal, it was funny because we had a short closing time, like a shorter closing time. And we knew right,

the guy we want to partner with. His name's Jason. He's a great guy. He's up and coming investor. I mean, he's already been doing this for a while. He has investments in the mainland. And so Kekoa called him up. He said, hey, you know, because we were already talking about doing the deal together. And, you know, he said, hey, why don't you, we have a flip coming up. It's just a small raised. It was like about 75 grand that we needed to raise. And so he's like, oh yeah, I can do that. But he was in, he was actually on vacation in Cancun at the time. So, um, we're like, okay, we need funds in like now. So like, so he was scrambling, trying to get stuff notarized, trying to figure out how he can wire it. And he ended up having, he couldn't do it from over there.

And he tried, but he ended up having to wire the money as soon as he like landed. And, uh, we just made closing, you know, and it went well, it went fine, but it was, you know, everybody was kind of sweating for the whole house. I don't know if we're going to even get this deal, you know, if we're going to close this thing. But yeah, we used hard money and private money. Okay, so you basically, this Jason guy brought 75K and then you used hard money for the rest of it, correct? Pretty much is how it. Correct. Okay. Awesome. What did you do with it? Like, it was a flip, correct. I guess that's a short, easy question. You flipped it. Yeah. So we, it was a, I mean, we had to do pretty much everything. I think the only thing we didn't really replace was the windows. We left it

with the jealousy windows. I don't know. You probably see that a lot in Hawaii now, right? Is that a little, is that like the slats that open up? Yeah. Yeah. I got those in my basement and ripping them all out here next week. Right. Yeah. So over here, I mean, because since we're not really subject to the harsh weather is like in Washington. It's common to have these older houses with jealousy windows. And so since we, so we decided to just keep, keep those windows in. But we did all new flooring, full gut of the kitchen. We redesigned the kitchen, actually, and did all exterior work.

It was, it was a lot more than what we wanted it to be. We knew it was going to be a gut, but it was, it was extensive. Okay. So how much did you totally spend on it, do you remember? This one, we spent 85,000, which it could have been more, but we were really tight on it. So in Makakilo, you don't necessarily have to go, you know, all out with the rehabs. We definitely wanted to make sure we didn't over rehab the project because you want to put out a product, obviously, that's desirable. But you're also keeping an eye on the bottom line, right?

So we didn't use our normal high-end laminar that we would use or the waterproof vinyl flooring. We used like a standard laminate, which is thinner. But it still looked nice. And it was definitely, we put out a great product. And the biggest thing for this deal is that we needed to get it done quick because it was a tight margin. Right. It was the margin that we probably wouldn't have done given several different attributes. if we weren't getting pressure by the bank, and, you know, if we didn't have, you know,

Kiko's friend kind of facing, kind of counting on us, we may not have done it. But since we did decide, okay, let's charge forward, now it's like, okay, we really have to keep eyes on this, the timeline, the budget. And we hit our marks. And we were able to get in, we were able to get the rehab done in 30 days, which is fast here. Yeah. At the end of the day, it was a three-month closing to closing. So that's also a fast. flip for out. I don't know really what it is like in some of the other markets, but for out here, it's, it's pretty fast. Yeah, that's awesome. How did you feel about the outcome? Oh, actually, after when it was done, I was satisfied. And in fact, it did teach me a lesson.

It's just like, just because it's a profit small, it doesn't mean it's not a good deal, you know, because if you can get in and out, like I think what I, what I have to put more weight on to is the velocity of the funds, the velocity of the money. So if we can turn it quick, then actually, you know, it's not just that ROI on that deal, but it's it's a little bit extra, has a bonus because turning the money faster, you know, so. What did you end up making on it? Our gross profit was 154,000. So we sold it for 7003,000.

Our gross was 154. That was at closing. And then we paid out Jason 75. So we made about 78,000, 79. It was 78,900 something. And then we, so that was like a gross return. If you're looking at the entire amount of fun, if you count hard money, the gross ROI was like 13.5%.

And that's like, to me, that's garbage. Like basically we would pay a 12% lender just as much, but we do all the work, you know? And so like, but we don't evaluate it on the gross ROI. We evaluate it on the private money ROI or the net cash on cash. So basically Jason 75,000 that he tied up, which we could have used as a gap, gap funding for another project. That's what's really limited because in our situation, since we've built up a good credit with our hard money lenders, we they open the books to us so we can you know it's unlimited capital and they have unlimited

capital so that's not what we should value our our our our our our our our our our our our i on because r oi is a metric to just to let you know whether you're getting the most out of your money right and so the when we look at the net cash on cash it's a hundred five percent return i mean we we tied up 75 grand of jay since money, which we could have used on another deal, but we made 78, 9. You know, so it is a, it is a great ROI when you look at it from the private money, ROI, cash on cash return. Yeah.

Yeah, that makes sense. Yeah. I mean, there's there's return and there's cash and cash return. And the fact that you did that in three months, like you made a, you know, 100% return or whatever in three months, which if you were to extrapolate that to an annual, you're at like 400% on your money. Oh, yeah. Like on an annual basis.

Like it's crazy. Now, how did you split that with Jason at the end of the day? I mean, what percentage did he own or was he just getting interest? Or how did you structure that? So this one, he was equity. And this one, we split 50-50 with Jason. Okay. Normally we wouldn't go 50-50.

Yeah. I think we've only done that one other time. And that was because one of our partners brought in all the money to do the deal. We didn't even pull hard money. But with Jason's situation at the time, I mean, this is actually this is some backstory that probably would make sense of the deal. is Kekoa and I were in the middle of a huge capital raise. So we were raising like, I think we had to raise 500,000 in like three weeks for like,

I think it was two separate deals other than this one in Makakilo. So, I mean, we could have closed this deal in Makkahilo, but for one, it's, it, it wasn't at the top of our priority list because of the small, it was smaller than what we usually do. But at the same time, so if we could still use our cash on those deals, which we did, then we still have Jason that wants to partner with us. And if he puts in all the gap funding within that short amount of time, plus we needed it, to me it's worth 50%. And plus he was helping project manage the job as we went through it.

And because Kekko and I were actually traveling in the middle of that project too. So by the time we came back, like the deal was like almost done, you know, because it was a 30-day renovation. And, you know, Jason really pulled weight, you know, with that. And so for us, I mean, yes, we signed on for the hard money. But he brought the money to close the deal. He bought the 100% of the gap. And then he also managed it. So it was only fair, you know, to go 50-50 with him in that situation.

But I don't, that's very unique. We usually don't do 50-50. Have you done deals with Jason since then, Corey? We were just talking to him the other day. And we're looking at other deals. He has one or he did have one in Kalihi that he was. I don't know if you guys know what that is, but it's kind of by town-time.

It was an off-market deal. I got to ask him about it to see if it's still on the hook. I think it was a probate at the time. But yeah, we're definitely going to do another deal. That's why I'm asking because if you get caught up and thinking, well, I don't need to give away 50% for the money. I can borrow it cheaper. That's true.

You might be able to, right? But you're cutting yourself off from all the rest of the deals that that relationship can bring you. So that's a variable you need to throw into the equation when thinking about like that comes up with me. People say, why did you give that person so much? Or why are you doing that for this person when you did do it for them? Because I know that person is going to benefit me in other way. So it makes sense to butter their bread where the person who comes to me and all they're saying is I got the money and I want half the deal and they're not giving anything else. We're probably not going to do it.

Exactly. And it's that there's so much truth to that what you said that I mean because that's exactly how I feel too. It's like if you're bringing, you know, more to the table, every deal is different, right? I mean, like just like this deal was different because we had to do a pretty big capital raise for two other deals in a short period of time. And so we we couldn't really do all three unless we dipped into like, you know, our real personal pocket. And, you know, we could do that. but we prefer not to. You know, we prefer to raise money and partner with other people.

So, you know, we bring it all together and we're in the journey together. And in fact, like, it's not, it sounds so corny and cliche that it's like it really isn't for, or for me, you know, I can't really, but I mean, I think I can speak for Kekoa as well. It's not really about the money, you know, like when when my, that first mentor of mine and an investor sat me down at Starbucks and told me, like, if you're in it for the money and if you're in it for the image, then you're not going to make it, you know, and, you know, we're not going to do business together. Like, that's true. You know, I feel that it is true. And for me, it's like, of course, I'm in it for the money. You know, I want to make money, good money, and build a legacy,

but it's more than that. And part of that is the other part of that is the journey of it. And I've had so much cool experiences with other investors. And I've learned so much just from, you know, working with them and how they do things that, you know, I wouldn't trade it for a few extra dollars. Yeah, I love that. It's like that phrase that I say a lot, right? Like 50% of a great deal is better than 100% of no deal. See, like you said, hey, we wouldn't have been, we may not have been able to do this deal

if it wasn't for giving away part of the profit. And like, it's just that same thing we've been. reiterating over and over and over in the show is like relationships matter, you know, working with other people, not being a loner, like yet now talking with people working together on deals. Like that's what it's all about if you want to be successful in this business. Now, before we move on to the next segment of the show, I'm curious, like, what do you see for the future? Do you want to continue flipping? Are you guys getting into different things, rentals, anything like that? Yeah, actually. So for the house sleeping side, we're actually a little lower than what

we would normally be, I feel. And I, but we're, we're kind of downsizing a little on the house flipping side because we're going to be moving more towards acquiring multifamily assets. And also we're starting a hard money fund of our own, which we'll have up running soon. So we're moving more towards passive and more predictable income for cash flow. But I mean, we'll always flip houses. I mean, we love flipping houses. That's the bread and butter.

I think, but we're at the time in our company that we're ready to expand, you know, to acquire more passive income. Yeah, that's awesome. Very cool. All right, well, let's shift gears now and head over to the next segment of the show called our Fire Round. Fire Round. It's time for the Fire Round. All right, let's get some of the Fire Round. These are the questions that we pull direct out of the Bigger Pockets forums, and we're going to fire them at you for some quick.

back and forth here, Corey. Number one, let's see, prices have gone so high in real estate. I'm trying to figure out where the best locations are for higher profit margins when it comes to buying, renovating, and reselling. Would it be better to buy higher-end properties in good locations? Or would it be better to invest in these smaller, cheaper properties? What do you think? Yeah, I think it's the tough question because every market is different in their own market cycle. So, I mean, even if maybe the country as a whole is trending down, it doesn't mean that every market in the United States is a down market. Some may be booming, you know. So it's hard to answer that question. But what I would say is I guess to know the fundamentals of your market, like where you are. And when I say your market, I mean like your close market. Like, you know, I'm on Oahu. I'm not talking about, you know, Maui's. a different market, right? You know, Honolulu County is kind of my, my zone right now. And so if I'm looking at deciding what I should buy here, right now Honolulu has softened, I feel. So I'm a little bit

more cautious in the luxury space. We do have a couple luxury flips, you know, that we're going to be hitting the market. And I'm trying to wrap them up quick because I know it's softening a little bit, you know. And so I would say if you're feeling iffy about it, then, you know, do a flip more in the manageable range, more where there's a bigger buyer pool if you're nervous about where your market is at. Because once you go to the higher end flips and you're trying to do a luxury rehab or development, you're automatically limiting your buyer pool, right? Because there becomes a threshold. and even like the million dollar mark is like a psychological barrier, right? So any, you know, once you start hitting those higher ends, you just got to know that

your buyer pool is going to be smaller and you got to plan on longer days on market. And if the numbers still work, I mean, I mean, whether you're in a down or not, I mean, as long as you're budgeting for the length of time and you're very conservative, then, I mean, pull the trigger. All right. Love it. All right. I really like this next question.

I want to see how you'll answer it as a relationship guy. So this is someone who wants to hold a contractor open house. I'm thinking of inviting multiple contractors to a flip property to walk everyone through at the same time, as well as explain some of the scope of work I need. Seems like it could be efficient and make sure everyone is bidding the same and maybe create some competition for better pricing. Anyone see any drawbacks to this approach? Oh, yeah.

I mean, I could be the perfect guy to ask the question. or the worst guy to ask that question. For me, I could bid out projects if I wanted to. And I honestly know I would get a cheaper price from other contractors because I'm embedded in the community. I ask my colleagues how much their renovation costs, who they use. And so I know I can get it cheaper. But to me, the trust that I have with are my GC, my general contractor,

It's hard to match that value, in my opinion. And when you kind of bid it out like that, I feel that it diminishes your, you're just that guy who bids it out, you know, and you're not someone that a contractor might see as a long-term client who's going to, you know, want to put all his effort into making sure that you're happy. Right. Because if he knows that, look, you guys are building a relationship and, you know, maybe the first couple flips or jobs, you're going to pay a full price. You know, you might pay a full price for that. Yeah. But then you can start talking down and say, look, I got other jobs, right? So like, are we in this together or not? You know, because if you're not, then that's okay. I totally understand you have a business to run. I got business to run, but I'm here to build a long-term relationship. And the beauty about building a long-term relationship. for me is that I trust my team.

So I can focus on other things. And there are hiccups. I mean, believe me, there's hiccups no matter what. You know, sometimes things slip through the cracks. And, but whenever we have those tough conversations, it's never out of haste. You know, because I know that our general contractor, he has my best interest in my, at heart. And I, I'm the same way. Like, I want him to make, you know, good money on the deals.

And he shows me his bottom line. Like, when we do the cost, when he prices it out in the cost analysis, it has all the actual costs of construction and the labor, you know, the materials in the labor. And then he puts his percent, like, this is what I want to make on this job. And I, and he trusts me to show me that number. A lot of contractors don't want to show you how much they're going to make, you know, on that. But that's because we have the right relationship. And the benefit of us having that now is we can cost engineer projects better because I don't know where he's sticking his profit. Right.

Like who knows? Maybe he frontloaded all his profit on the demo. And then I tell him, okay, well, the demo seems high. I want to, I'm going to do the demo myself and save this much money. And then he's like, oh, no, I can't do that. Like, because he hit his, he hit his profit in there. Yeah. You know, when you build a relationship with a general contractor enough to where he's willing to show you his.

and keep his money on the outside of the costs. Now you have a little bit of an advantage because you can cost engineer the project in a way that most people who don't have that relationship can. Yeah, I love that. So relationship is huge for me. I know there's totally conflicting ideas and that's fine with me. So I guess see what works for you. But I think if you want something sustainable and, long term. If that's what you're trying to build, you know, then it's worth investing in people and

relationships. Otherwise, you're just, you know, maybe you're going to do a couple of house flips and you're going to get that reputation of, you know, you're, you only hire the cheapest guy. Yeah, there you go. That's such a good answer. I like that. So you go, what you understand, Corey, is an amateur would look at how much is it going to cost me, how cheap can I get it, right? Which is why I love this question. There's nothing wrong with the person asking it. I have a good idea. Like, well, I can bring them all in. I can walk them through. It saves me time. It forces them to bid themselves down, right? But what you're going to end up from that is a contractor that is desperate for the most business and is willing to take like the worst deal, right? They're going to have

resentment and you're going to go to the back of the line whenever they get busy because they're making lease money on your deal. You won the battle and you lost the war. Where what Corey understands is, I live in Hawaii. Everybody wants to surf and go to the beach. It's hard to get someone to even show up to do this job, right? I'm paying more money because I know that he's going to get his dudes to show up and work on my deals and I get my house fixed up in half the time you do because when you like beat them up on the price, they're not going to ever hit their deadline. They're not going to do good work. They're going to cut corners because you did that to them, right? So you really can't even complain about it. And you're going to pay twice as much in carrying costs. So you're going to lose

money because you're going to hold the house longer. You just, you get that Corey. And that's why I love that you're the person asked that question to you because sometimes we get very near sighted. And all we're looking at is our side rather than how do I make it a win-win for both people. Yeah. Right. Cool. Yeah. All right.

Next question comes from Kimberly. And Kimberly asks where that forum title was where, who and how can I connect. Basically, Kimberly is asking, you know, let me just read it. Hope everyone's writing as well. I'm writing to you because I'm finding myself getting stuck in my own head about beginning to invest. I'm working on credit and debt. And I get overwhelmed with the idea that I have to wait before I can start investing.

I know there's other people's money, OPM, but I don't know how to start that conversation with someone. And I love that. Like, how do you, when you're new to real estate, how do you even start that conversation of can I use your money, private money, hard money, whatever? So how would you respond to Kim? Well, that's always the toughest part. I feel getting started. It's all about momentum, I feel. And there's something to it.

And I was telling one of our, he's a partner now with us on a deal, but his name is really. Richie out here. And the deal that we're doing was his first deal. And I told him like, you know, get ready. Because after we close this, you're going to get this momentum. Like things are going to start happening. It's going to get easier to talk to people. It's going to be easier to raise money because you have experience, even though we're not even closed out yet on the first one, you know. And sure enough, he's got two more deals, you know. And so he's, and he's raised the money for those deals. He's closed them, you know, on his own. He doesn't need me. And that's what I tell them. And pretty much any partner who partners with me is like the goal is that like if it's their first, if it's their first deal.

The goal is that after this deal, you don't need me anymore. But you still want me, you know, hopefully. Yeah, right? And so, but for him, he doesn't need me anymore. Like, he can close deals on his own. He knows exactly what to do, even though we haven't even finished the first one. But it, he did need the momentum, you know. And in order to create the momentum, you got to, you got to just get moving, you know,

whether it's sending a mailer out and stumbling over your words when the phone calls come in, it's okay. Like, you're moving. You got to just move. You know, and maybe it's your bird dogging a deal to an investor and you just, hey, can I tag along? You know, can I just ride the flip out with you? Or, you know, starting somewhere, everybody has something to offer. Again, I'm circling back to that again, but it's like you have something to offer.

even if she goes to an event, you know, she has her time or her energy and her, you know, motivation to give to somebody. And maybe they make her do what I have to do, you know, like door knock. And, you know, then you got to really ask yourself how bad you want it, you know. And but you're building a relationship. And then if you get a deal, you can write, hopefully if that investor is. you know, a relationship type of guy, he'll let you just help out and ride the deal through and use that as credibility. But in order to even start to be able to start talking to people

about borrowing their money and even having the confidence to ask, because that's the hardest part is just asking and just, you know, kind of maybe pitching a deal or understanding what the deal looks like and putting it together. Like that can be very intimidating and hard. But in order to even get to that point where it's your first time asking for money, like you have to just get moving, you know, whether send mailers, drive for dollars, network, you know. And there's no real clear tangible answer to that other than to just get going.

I think that's perfect. And like you said, just get going, get moving. Like the answer is how do you talk to somebody? you open your mouth and start talking and you figure it out. You build the momentum and it's got to start by that. And you can start with a relationship too. Like if you do build a relationship with somebody who is credible and you, you'll probably have to do the dirty work, paperwork, take phone calls, whatever you got to do

to provide value to that person, then, you know, with their permission, they're a partner. Yep. You know, so if you do find a deal and your partner or your mentor likes the deal, it wants to take it down, now you can use that like, hey, I have a partner, I've brought this deal, you know, I want to raise, I got to raise money for it. Are you in? This is how it's going to work. Yep.

You kind of got to ride the coattel sometimes. Yep. But not for free, you know, maybe if you get lucky, you know, but I'd say always provide value. I wouldn't want anything for free, you know, and I hope. everybody listening is the same way. You know, like, why would you want something for free? Like, I don't ever want to win the lottery. Like, if I win the lottery, I'd be so depressed because, like, I don't want people to

think that, you know, if, if there is, if I ever get to the top or if there ever is such a thing that when you are there, that people say you just got lucky. Yeah. You know, I want to earn my keep, right? I want to earn my way. Earn my keep. Be here for everything. Yeah.

I love it. All right. Well, dude, we got to go to the last. of the show, which we lovingly refer to as our famous four. Let's get to the famous four, the same four questions we ask every guest every week. Number one, favorite real estate book. Oh, this was a tough one. I've read like a zillion real estate books and I can't, you know, recall all of them.

But one that actually, actually two that stick out to me is actually Jay Scott's book. Oh, yeah. That he did. A long time ago. Yeah, like I think I was like one of the first buyers, I think, of that book. Because it's, you know, when it came out, I was like, oh, I'm buying that. And I got so much out of that. And I don't know if it's just because I was new, so everything was content to me, you know, like, but I really took a lot out from that.

And I think it, I think it was those books where it has like, this, yeah, like he has like typos in the in the book. Like, I love that. Yeah, yeah, it was very, that first version was very raw. Oh, okay. Did you guys do like another version or something? Yeah. Yeah, we've updated a few times since. Oh, okay.

I liked it with the typos. Because then I was like, oh, man, this is like real to me. You know, like, this is a, this is like a house slipper, a real investor like writing a book. Yeah, he doesn't know how to spell. I read a book of all right. That's hilarious. Yeah, no, I was a, I love that. Like, that was a great real estate book for me.

I saw him at, um, Tarles event, actually. Oh, yeah. That's awesome. I didn't get to say hi or anything, but I'm in a picture with him. And I was like, I wrote the book that I enjoy. That's funny. Well, you'll have to meet Jay Scott someday. He's a super good dude.

In fact, we're actually releasing a, I don't know if I'm supposed to announce this, but I'm going to. We're actually releasing a second edition of that book coming up here this coming winter. So, yeah, so there's an added content, kind of a flipping in today's market, how it's changed a little bit. But we're really excited for that launch. But anyway, if I'm not supposed to announce that, everyone just pretend you didn't hear that. Put your mouth on.

All right, moving on. Question number two. What is your favorite business book? Man, I have so many favorite business books. But, I mean, other than the hundreds that's been already mentioned, and actually, I know this book has been mentioned already, but the goal giver has been a huge influence on me. And it's funny because I just read it this year. But it's been a huge influence on me because I kind of always felt that that was the right way to do business, you know, and the right way. way to approach business and just reading it from the book.

It was just like the experience I had when I first read Rich Dadport out is like it was everything that was already feeling, but somebody else was telling it to me. You know, like. And so I took so much from that book. And I believe in that, the teachings in that book, 100%. That's cool. You know, to give without expecting, you know, and things happen. I had a very similar experience when I read

So Good They Can't Ignore You I was like, this is what I've been doing the whole time Somebody else is doing the same thing And I never talked to him, right? Like there's, I'm right, I'm on the right path, you know? That's cool whenever you find that like your spirit book. Yep. You know, this accompanies the spirit that I have.

That's for Brandon. There's like a hundred books like that Because he's read every single book in existence. I don't think every book. No, but I always say rich dad, when I read Rich Dad, when I read Rich Dad, Poor Dad, like put words to what I. I had been like feeling in my soul, you know?

Exactly. Yeah, yeah, exactly. All right, moving on. All right. You live in Hawaii, so what are some of your hobbies? Believe it or not, so I, one of my main hobbies that I don't have much time for anymore, but I got to make time for is Brazilian jiu-jitsu. I love the sport.

BJ Penn has a facility out there in Oahu, right? Yeah, I think he has like two or three now. Have you met him? Nice. I've never met BJ Pan. No, I've never met him. Ever? No.

Yeah, he's from Hilo, so he's from the Big Island. But he does come to Oahu a bunch, but yeah, I haven't met him before. That's cool. I plan to get into that. So you'll have to show me your ways someday. Oh, yeah, totally. Yeah, be careful because you can't get hooked. I'm telling you.

Just like surfing, like, yeah. Brandon is going to fight like Dalsam and Street Fighter 2. That's going to be his style. He stretches his arm all the way across the entire screen. It hits you. Yoga. That's how you do it. All right.

Next question. All right. My last question of the day. What do you think separates successful investors from those who give up, fail, or never get started? I think the biggest thing that I could say is it's kind of drastic. but I would say the biggest difference that I see is the people who

basically burnt their ships if you know what's saying if they burnt you know the people who had that moment where they're 100% committed and there's no turning back because there is no back those are the guys that make it to be honest

because you have to make it I mean I'm not saying to be reckless about it I mean if you got a family and all that like you got to be responsible. But at the same time, you know, you live once, right? So you got to, there's going to be a moment where you have to make that decision. And whenever that decision is, you know, least risky, I guess, then take the leap. And you got to make sure that there is no one foot in, one foot out.

And, and just go 100% forward because we default to comfort. Yep. And if even if there's any slight chance of retreat, then you're going to take it when things get tough. But, you know, when you eliminate all that, you know, and you burn your ships officially, then those are the people who I see that that make it, you know. That's really insightful. Yeah. Cool.

Well, Corey, this has been amazing. I love talking to you and I love you sharing some of your skills here. Can you tell us where can people find out more about you? Well, unfortunately, our website has been saying coming soon for like almost the whole year now. Your website's on Hawaiian time. Yeah. It's like, how hounding me on is. It's almost all.

But for now, I mean, I'm on bigger pockets, but I'm also big on Instagram. Now I'm trying to be more. I love Instagram because it's pictures. It's like, you know, Facebook's kind of like I'm just spammed on there. But I mean, I go on Facebook a lot too. But Instagram, feel free to message me. I'm, I always try to get back to. everybody, you know, as much as I can.

I know, you know, your guy show is massive, so I don't, I, I don't know if I. Yeah, you might not get everyone. But, but try, is what I'm saying. And you're at, you're at Corey dot Nemoto and N-E-M-O, correct? Correct. Corey, C-O-R-Y, uh, dot N-E-M-O-T-O. Perfect, yeah. Yeah, go follow Corey.

Let's build them up on followers. He's got 849 right now. We're going to get them to 10,000. All right. I do. Well, this was fantastic. Like David said, we love talking with you.

You and I got to connect here soon. Maybe we'll go do some Brazilian jujitsu when I'm in a while in a few weeks. So yeah, I think that would be fun. We'll flip a Maui House. That'll be fun. All right, dude. This was fun.

So thank you very much. And we'll definitely see you around. For everybody else, thank you for listening to the show today. If you have not yet left us a rating a review, please do so iTunes and Stitcher and Google Play and all that. It helps us a lot. And if you're not a part of the Bigger Pockets social network, go create a free account,

biggerpockets.com. And you get all of it to goodies when you sign up. So by goodies, I mean like, I don't know. I think there's like a free ebook or something cool like that. All right. That's it. So without further ado, Corey, you want to take us out? Just say, for the Bigger Pockets podcast, my name is Corey signing off.

That's all you got to do. For the Bigger Pockets podcast, my name is Corey signing out. Yeah. Aloha. Aloha. Thanks, guys. You're listening to Bigger Podcast. Pockets Radio, simplifying real estate for investors large and small.

If you're here looking to learn about real estate investing, without all the height, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets 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 K, 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.

Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.