BiggerPockets Real Estate Podcast - 464: Scammed, Cheated, But Still Coming Out with 50 units with Welby Accely

Episode Date: April 29, 2021

Many, many people give up on real estate after just one bad deal, one bad tenant, or one bad flip. But what if you lost all you had from real estate deals, would you still be willing to bet on real estate? What if you lost it all twice? Welby Accely, has been in that position. He lost all he had, two separate times through dicey real estate deals. He never did give up on real estate, and now he’s sitting on 50 rentals and over 70 completed flips. Welby grew up in Brooklyn, and knew that his godfather was doing well in real estate, so when he got older, he decided to give it a shot. He invested in a multifamily deal in Atlanta, overleveraged himself, and had it foreclosed on him. A few years later, he had another Atlanta property taken from home. Welby was wiped out. He got scammed, lied to, and dove in too deep a couple times. After these tough experiences, he knew he had to do whatever he could to make sure his due diligence was top notch. He was later told about Connecticut, and decided to take some serious time exploring the market, building relationships, and networking. Then, he started flipping. 1 house a year, 2 houses a year, then 15 houses a year, and now 20 houses a year. Now, Welby takes young and aspiring real estate investors on “ride alongs” so they can see exactly what it’s like to be a real estate investor! In This Episode We Cover: How crucial it is to understand your market before you invest Never trusting a new partnership without proof of concept and contracts Pulling yourself back up after losing tens of thousands of dollars Putting in offers everyday so you can secure a deal Hard money loans vs. using your own capital Helping build other’s businesses so they stay loyal to yours And SO much more! Links from the Show BiggerPockets Forums Water Park Scam BiggerPockets Webinars BiggerPockets Blog  Check the full show notes here: http://biggerpockets.com/show464 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is The Bigger Pockets podcast show 464. And my biggest issue that I had was that I kept skipping the process. I kept trying to find the easy way to do it. I was betting on other people. I wasn't betting on me. Every time I was waiting for other people to show me how to do it, they were finding a sucker and they were taking advantage of me. So here I am now, these hundreds of thousands of dollars I destroyed that I lost,

I would bet on other people, and I said to myself, why the hell well be you won't bet on yourself? Why you're not going to bet on yourself, but you'll let these other people, you'll bet on these other people. So I said, I'm going to take this $90,000 and I'm going to lose this money. That's what I'm going to do. 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? It's Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Cinderella Story Green. What's up, man? How you doing? Thank you for that, Brandon. But I think the real Cinderella man is going to be today's guest who has a story

that will leave you inspired at the edge of your seat and just might get a little bit tear out of your eye. And this was an incredible interview. It was an incredible interview. Yeah, I'm super excited to bring you guys well be. He's awesome dude. We've been Instagram friends for a while, but I'd never heard a story, like his full story. And he has a tremendous story of losing everything multiple times.

You're going to hear about that and some of the reasons why that he lost everything in real estate. So you can avoid those things. He talks about how, like, literally had an FBI probe against a business venture he was involved in where someone went to prison and, like, he's got this crazy story. But in the end, like, you're going to hear how he's overcome that stuff. And today he's done over 70 flips. He owns over 50 rental units. He has this amazing model where his advice on finding and developing contractors is something you've never heard on the show before that could change your business forever.

There's a lot of good stuff in the show. So I just want to get to it. So before we get into the interview of Wellby, let's get to today's quick tip. David, do you have a quick tip for us? Today's quick tip is don't look for shortcuts like finding the perfect property right out the box or finding the perfect agent or the perfect employee. If you want to be successful in this life, you have to make the deal, not just find the deal. His philosophy goes across many different aspects, but what we talk with Welby today

is ways that he is taking the contractor that he needs and developing the person to play that role in his company. And he went through bad agents. He did the same thing. He found the right agent. He taught them how to help him with what he needs and now he's got the faithful employee. So when you're frustrated and things aren't working out as well as you like, stop thinking about I wish I could just find the perfect person and start thinking about how you could help

develop the perfect person. Yeah. We do talk about that later in today's show as well. like sure you guys are listening for that. 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

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One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NRE review your insurance with someone who gets in investing at nreg.com slash BPod. That's nr eig.com slash BP pod. A lot of property managers think their job is answering tenant emails and coordinating repairs. That's not the job. The job of a property manager is protecting and growing your operating

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So wouldn't it be great if you could actually earn money while you're traveling? Well, you can. Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care of things. Communicating with guests, preparing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think.

Find out how much at Airbnb.com slash host. So with that said, I think we're ready to get in this. Anything you want to add, David, before we jump in? Nope, let's do this. All right, let's bring in Welby, Astellie. All right, Welby, welcome to the Bigger Pockets podcast, man. It's awesome to have you here. Oh, I appreciate it, man.

I can't even believe I'm here. Thank you guys so much for this opportunity. For sure, man. Well, let's dig into your story. Let's go to the very beginning. I know you went in real estate in several phases. So let's go to the very, very beginning. What was kind of your first venture into real estate investing?

My first venture in the real estate. If I can maybe go back a little bit, if you don't mind, My first idea of ever being in real estate is when I was about maybe seven or eight years old. I was living in the projects in Brooklyn with my parents, my family, and my godfather, he was doing pretty good for himself when he would come and visit us, and he would always have these nice, fancy cars and dress nice. And later on, it's when I found out and understood that he was in real estate. He owned one or two properties.

He had his own brokerage and stuff like that. And I would be able to go visit him in the suburbs of Long Island. and I was always intrigued by the fact that I was able to ride my bicycle in the middle of the street versus where we were living now. We couldn't do things like that. From that point when I understood that that's what he did was in real estate, I knew that some way, somehow, somewhere in my life I was going to be involved in real estate somehow. So fast forward, my first time actually purchasing my first home in real estate was sometime around 2004

is when I purchased my first home. And what was that? Did that house for yourself to live in? No, actually, I live in New York and I decided to buy a multi-unit in Atlanta. And this is right where the subprime mortgages were going crazy. And as long as you had a pulse, you'd be able to get a mortgage. So I was able to get a mortgage, 106% financing. So I didn't really come out of pocket anything.

And I was able to acquire a four-unit building. And from the day I bought it, it was a disaster from the day I bought it. Explain that. Why was it so bad? I never had anybody educating me in the business. I didn't have a, even though I did mention my godfather, he never personally educated me. I never had anybody take the time to explain anything to me. It was a desire that I wanted, and I figured because I went on YouTube real quick,

and I read a quick book that had these large acronyms, HOA's, ARVs, and everything else like that, I figured that I was prepared to go out there and spend some money. So I went out there. Not only I went out there, I also have a twin brother. So my twin brother went out there with me simultaneously. my cousin went out there simultaneously. Another person on our block went out there. We literally, at the same time, all flew out to Atlanta, November of 2004.

And we all came back December 2004 with a property, four units, two units, single family homes. When I bought it, I didn't understand acquisition, so I don't know why I bought it for, why I paid the amount of money I paid for it. I didn't understand cash flow. I didn't understand rehab. I didn't understand anything. And I thought that at that young tender age, that the realtor that was smiling and talking to me as if she cared, I thought that maybe the information she was provided me was factual information and was correct information, and I was doing the right thing.

But obviously it wasn't. I paid way too much money for the property. The numbers that was represented to me that the property would be able to generate per apartment was extreme. It was several hundred dollars less per unit. I didn't have a contractor. So the contractor that I did find robbed me, ran off with the money, and it was just a disaster. It was a disaster. Thankfully, at the time, I was employed.

So the only way I was able to maintain that property was because I was taking the money I was making for my employment. I was still living at home at the time, and I was feeding the difference that the property was short in terms of rental. The property manager was making more money than me in that property. Put it that way. By the way, why Atlanta? You know what?

Atlanta at that time became the mecca that everybody was going. going to. That was the new place everybody was going to. I'm from New York City and everybody knows how expensive the city is. I figured that maybe I could do something in Atlanta because I was making reasonable money. So I said maybe my money will go further. But one thing that I found later on, big city people like myself or other big cities like Los Angeles or Seattle or other big areas like that, we have our ego subconsciously that we don't realize. And when we go to these smaller markets, we'll look at a property that would be in New York, a million dollars, that is selling for $200,000, and we would approach it with the same mindset of a property that you would pay

a million dollars for and say, that's all that they want, $200,000 and pay for it. Not realizing and understanding that, you will lose your money just as fast as you can in these big cities. So I did let, I'll be honest with you, I let my big ego actually get ahead of me, and it caught me. It caught me good. Well, so what happened to that Atlanta portfolio? I mean, You still own that or did that? Can I know you said you went into some tough times? Was that, did you lose that? This is also when people were promoting the Byrd strategy.

And I found out later on the birth strategy works, but it doesn't work everywhere as efficient as you would like you to work, right? So I refinanced that property and I was still not going to cash flow. But at the time when I did the 106% finance and I only had an interest only loan. So I had to get out of it. So I refinanced out. Of course, because I refinanced out, I had to tag on. the closing costs on it, which increased the mortgage, but I was in a conventional loan,

principal and interest, but the payments went up versus what I was originally paying. So the cash flow, the negative cash flow went even worse. Sometime around 2009 or 10, I had another property down there, too. By 2009 to 10, I lost it all. I ended up losing that property to foreclosure. I had loans on it with Bank of America upwards of $40,000. My credit at the time before this happened with 750. I had pride with being a responsible human being.

So now you imagine now you had to make a decision. You have a family that you take care of. At that time, by that point, I've already moved out my home. You have a family you're taking care of. You're on your own and now you have to make a decision. Do I eat or do I let all these things fall? So I had to make a decision of letting those properties go. I had to make a decision of defaulting with Bank of America.

and the property that I paid $240,000 for was bought at auction for $60,000. So you can imagine it was a dark time for me during that period, exactly. So I lost it. I cried like a baby. I was embarrassed. I came back with my tail between my legs.

I lost everything. I got wiped out. From being wiped out, I decided let me get involved with doing some other things. I've always been a hustler. I've been always doing something. I decided to stay focused on my employment. I had opportunities to make overtime.

I had opportunities to make more money. So I ate ramen noodles. I ate bread. I didn't party. I didn't buy a car. And I worked, work, work, work, work. And I built myself up and I saved myself up several thousand dollars again, tens of thousands of dollars again.

From saving up that money, I said, you know what? I'm going to start selling cars. So me and my brother, long story short, my twin brother, ends up buying a used car lot. selling cars are making reasonable money. Long story short, because it's a long dragdouts. That failed and it went to bus. I went then and decided to get into the nursing agency route,

had a little bit of money, and I had decent credit, and I met this lady, and she said that she needed a business partner, and could you go to get a line of credit from one of these banks, which happens to be Bank of America again, and if you give me X amount of money, I'm going to pay you X amount of money a week. So they say that when things are too good to be true, you need to believe that. I said, no, I'm going to skip the process and I'm going to do it. I went to Bank of America.

They approved me for upwards of $50,000. Two days later, the money was wired to my account. I had $50,000. I called her up and I said, hey, I got $50,000. She said, sure, no problem. Send it to this account because she was with Bank of America. 9 o'clock the money came into my account. By 915, it was in her account.

She spent maybe a week or two, three weeks of paying me the agreement. and then she disappears. So now, once again, I'm in default of another loan. I get wiped out again. I ended up fighting, fighting, fighting, fighting up again. I've always been good with hustling and finding ways to make money, sacrificing. I end up meeting this lady. I'll give her name by the name of Lillianna Traficante.

Lillianna Traficante approached me and told me that she was looking for an angel investor because she has a water park that's being built in upstate New York, Goshen, New York. So if anybody want to check it out, you can go and type the name Lillianna Traffa Conte, and you could also, it's this public records. That's the reason why I don't have a problem saying this. You can also type in Go Ocean, G-O-O-C-E-A-N, Waterpark scam. And when you read it, you're going to see a scam where this lady embezzled over $6 million

for myself and other investors. And if you read, they identify the victims by numbers, and victim number four was me. Long story short, the feds came to my house and came to other investors. house homes. They were investigating us. They already knew that we didn't have anything to do or what she was doing. They were tapping our phones. Basically, they came to my home to make sure and validate what happened. She ends up doing five years in prison. And all we got from the courts was she has to pay us restitution for the rest of our lives. And till this day, after all the money I've lost, if I'm lucky, I got $50, I'm lucky. So I come back, decide I'm going to start doing,

I'm going to start doing business in New York again. I'm working at the utility company. I'm making six figures a year. I have everybody laughing at me, everybody joking. Because when they see me walking down the street, they know that Welby's going to talk to you about real estate. They know Welby's going to promote to you and preach to you about real estate.

But yet, Welby's a failure, though. But Welby's a failure. Welby keeps talking about something that he believes in, but he's a failure. I meet a gentleman that sort of what I was doing, the money that I was making. he says to me, hey, how's your credit? I was able to clean up my credit reasonably.

He says to me that we could do some business in New York. Long story, short again, we did business in New York, and he bailed on me. He basically needed somebody to put the property in their name, you know, straw buyers. You didn't know the terminology, straw buyers? So he utilized me as a straw buyer to purchase a property to get himself and his brother out of a bad deal. It's called straw buyers, at least out here, that's what we call it. He basically bailed on me, ran off, and left me with the property.

He left me with the property. I said, I'm not going to lose on this one. I fought. I went to Home Depot, got me some guys to help me fix up the place. Luckily, I was able to sell the property and make about $125,000 on that property. It wasn't because I was smart. It wasn't because I knew what I was doing. It was pure luck. Pure luck. I went again and I did a few more deals. I made reasonable money. Then I decided again, I'm going to go back to Atlanta again. So this is where you guys come to place. So that's why I got to thank bigger pockets of I go back to Atlanta again. I found me a flip that I wanted to buy. I did everything. I acquired the property correctly. I followed the 70% rule. I figured out the correct way of what it's going to cost me to rehab the property, but I failed on the correct contractor.

The contractor took eight months, nine months to complete the property or longer than that. The market shifted. The property tanked. I ended up losing money on the property. and I had a $90,000 check was cut out and given to me, sometime around 2013. So you would think that when I came back to New York now, again, failing again, my father, he knows what I was doing.

All my family, all my friends know what I was doing, what I was working for. Now, this is years of me working on this. No mentor, no nothing. My father says to me in Creole, because I'm Haitian American. So he says to me at Creole, BB, he speaks to me in Creole, BB. He says, BB, Ufini A vexa, that's our language. And he says, well, but you're done with this, right? You're finished with this.

I said, Dad, no. And I had the $90,000 check in my hand. I said, Dad, I got it. I know what to do now. I know what to do. So that night, it was on a Wednesday. I Google searched on my computer. How do you flip?

This is emotional for me, too. So if I get teary, I don't laugh at me. So I Google searched it. And I said, how do you properly flip homes? Thank you. When I Google searched it, Bigger pockets popped up. Bigger pockets popped up

and you, Brandon, was doing a webinar that night. And you were doing a webinar and the webinar was about flipping homes and about, I apologize if I don't remember exactly, but it was about how to properly approach buying a home. Right? So, and it

said sign up. So I put my email in there and I signed up. I called up all my friends. my family, because my phone rings like crazy. And I said, do not call me, do not text me, do not bother me for the day. I'm going to a webinar class today. I'm going to go to a webinar class and I'm going to watch these bigger pocket guys. So I said to myself, you know what, Welby? I'm going to take a pen in the pad and I'm going to listen to what these people say. While he poses his questions, I'm going to answer them before he gives the answers to the public.

And let me see how I do. So I come home. locked myself in my basement, turned off all the lights, I put you on my big screen TV, and I'm watching the webinar start. So as you start posing the questions and giving out the examples, and you had a whole mob of people on there,

a whole mob of people's on there. So as you giving the example and asking the people to follow through, and then you start putting out the answers, I was hitting 100 for 100. 100 for 100. And then I started crying. As a grown man,

I started getting emotional. And I started pumping my fist. And I said, you got this, you got it. Why the hell you keep doing the same crap over and over again? That's why I said, why you keep doing the same crap? And my biggest issue that I had was that I kept skipping the process. I kept trying to find the easy way to do it. So going back with all my mistakes, I was betting on other people.

I wasn't betting on me. I was waiting for other people to tell me how to do it. So every time I was waiting for other people to show me how to do it, they were finding a sucker and they were taking advantage of me. So here I am now. These hundreds of thousands of dollars I destroyed that I lost, I would bet on other people and I said to myself, why the hell well be you won't bet on yourself?

Why are you not going to bet on yourself, but you'll let these other people, you'll bet on these other people. So I said, I'm going to take this $90,000 and I'm going to lose this money. That's what I'm going to do. So I never knew nothing about Connecticut. I've never been to Connecticut in all my years being in the tri-state area. I've never stepped foot in Connecticut.

I had a friend of mine that I was working with that lived in Connecticut. I told them that I didn't want to work in the city of New York because the prices were ridiculous. I didn't want to get caught up into that shark tank. He says to me, Welby, why don't you come out to Connecticut? Come and see how Connecticut is. I said to him, you know what? I'm coming to Connecticut. I'm going to do it right this time.

So this time, before I went to Connecticut, I sat down with an attorney in Connecticut, explained to him exactly what I was looking to do. The attorney said, well, listen, you need to set yourself up this way and that way, in terms of LLCs and S corporations and stuff like that. And I spent the money and I paid for that and I established that. Next step that I did is I looked for a realtor that I know that I can train on how I need them to react and to work for me because I'm the boss. Any investor out here, I stress with them.

You're the boss. You're the one that runs this show And don't let anybody I don't care if it's a realtor If it's a mortgage broker if it's whoever Because at the end of the day You're the one that's left holding the bag I went out there and I started

Establishing relationships with contractors And I started establishing relationships With different people before I even Did anything out there Then one day I took a trip out to Connecticut Took my realtor Started driving around I started studying the market

I didn't spend a dime The easiest thing in this real estate business To spend money in the buy a property That's the easiest thing to do. So if that's the easiest thing to do and it's that difficult, you could imagine everything, all the other aspects of this business, how difficult that is. I did what Brandon said on Bigger Pockets and I started just making a ton of office, ton of office.

So I was literally doing maybe 50 offers a week. Then finally, with all the nose that I got, the nose that I got, I finally got the yes on one of my office. So I knew I was going to make money on that deal. Beautiful. All right. So, well, we've got a few things that we need to unpack out of this because you have an incredible story. I think what I like about it the most, to be frank, is what you went through is every single

new investor's worst fear, multiplied times four. Total complete failure. And then you went through it several times and you just kept on coming. All right. So this may be one of the most powerful episodes we ever released because as everybody who's on the sidelines wanting to get in that can't stop thinking about what am I going to do if you went through the if. So I want to pull out how you handled that, how you manage the rejection, the pain, the everybody I'm sure that was telling you, you never should do this and now they look right. And you just kept on going. Let's jump back to when you had mentioned you lost your first properties in Atlanta. Okay. And then you had to go to eating top ramen to save up money. And then the next thing was that the car dealership you started

with your brother? Yeah. Okay. So then that didn't go well. And then your credit took a big hit. So now that not only affects your ability to buy real estate, but your ability to do everything else in life, that doesn't feel good. Then some woman approaches you and you think, well, I'll let an expert do it because I did it wrong. And then that expert rips you off and steals your money and ends up being prosecuted for it. You've taken four huge Ls before you've even got close to sniff of victory. And not only have you screwed it up yourself, but you've been screwed over by other people. I'm just thinking there's not an angle you didn't try that didn't go wrong. and then you get into this flip that you make money

that your CPA tells you about, is that right? The first flip that I did that I made $125,000 that was successful. That happened in the Bronx, and that was a property that I did, that someone that I thought that was looking to help me. Okay. And essentially he was looking for someone to take advantage of to take the property out of his name.

And he put it in my name, basically sold it to me without me realizing it, cashed out, and he was supposed to help me with rehabbing the property and then, of course, selling the property. but he ran off. With him running off from me, I couldn't just leave it that way. I had to take over the property and fix it. And I got me a couple of guys from Home Depot and I got the property fixed myself. Then I got the property on the, put the property on the market and the

property sold for 125,000. So this is the definition of a hustler. I think you should put my name in a dictionary if you see that. So here's what I want to ask you. After you had so many things go wrong. And then this one looked like it was going wrong too because the person jumps into the deal with you and then just abandon you and leaves you in it. What did you have to tell yourself to keep getting up and keep coming when you're getting punched in the face on every single deal? Because it obviously worked out. You made $125,000 on this deal. Just so I could clarify, I don't want to come off that I was so smart when I made the $125,000. It was pure luck that I made the money. The market was like shooting fish in a barrel at that time, like what's going on today.

And so it was luck that I made it. So thankfully, I did make it. But I've always had an unbelievable belief in myself and a faith in myself since I'm a kid. I don't know where it came from. I don't know. I couldn't really tell you where that came from. But you can't tell me I can't do it. You can't tell me I can't get it.

You can't tell me I can't obtain it. And everything I've ever wanted, everything, I don't care what it is that I've wanted. I've had so many naysays that tell me I can't do it or people that have abandoned me or ran off from me, talk behind my back, whatever you want to call it. But I've always just had an unbelievable belief in myself that I can do it. So I just kept pushing. You know, you went through all that trouble, all the difficulty. You know, you found bigger pockets at some point.

You realize like, hey, I got to stop betting on other people. Like, I can do this. I got what it takes. And you jumped in, you started making all these offers and you got one accepted. Before we go there, though, why Connecticut? I don't think I know anybody who invest in Connecticut. Why did you decide that's going to be my market to jump into? Because you weren't living there, right?

you're in New York. I never lived in Connecticut. I still don't live in Connecticut, but Connecticut and where I invest in is about an hour and a half away. I just knew that I've done business in New York, but I just felt that I could do a lot more and bigger things in a smaller market.

So I put my ego aside because I'm from a big city. And then I also look at things practical. The reason why God gave us cars is to go from point A to point B. Not just to flash and to show people, hey, look at this fancy car I got. So I said, you know what?

I got this car. I'm going to drive out of state. So I drive, it takes me an average of an hour and a half, two hours to get there. That's why I said, I'm going to take a chance. I didn't know a soul in Connecticut. I didn't know anybody in Connecticut. Never been to Connecticut in my entire life until I decided that time to go there. So if anyone says about being fearful,

anyone tells me that it can't be done, there's nothing somebody can tell me to convince me otherwise because I had to do that. So going to Connecticut, I would say it was a mixture of luck speaking to somebody that happened to live in Connecticut, but he wasn't an investment Connecticut. And it all kind of snowballed to me saying, let me try it out over there. So this is what I wanted to bring up is that, you know, a lot of times people are nervous

about getting into real estate because they live in an expensive market. They live in New York. They live in L.A. They live in Seattle, Hawaii. And they're like, I can't invest in my local area. So I guess I'm just going to not invest. And they sit down and they let years and years go by without investing. And then other people are like, well, I can't find the perfect market.

to go to distance, like David wrote the book long distance, but I don't know what the perfect market is, and I've been studying demographics and numbers and charts and graphs and everything forever, and I'm just stuck in this analysis paralysis. What I love that you did, you're just like, Connecticut, I'm going to make it work there, and you just like went there and made it work there. And you're going to get into your story, and I know a little bit about it. So like, I know you've had a lot of success there. It doesn't sound like you sat there thinking and planning and doing every data point for years, trying to figure out this perfect spot. Yeah, it's one of those, it's more important that you decide than what you decide. And you jumped in, you figured out what worked, and you made it happen. Is that a pretty accurate

summation of that? Pretty much. I was the victim of analysis paralysis too. So there's no such thing as the perfect scenario. And I tell everybody that speaks to me about this business, you're trying to wait for all the stars to line up. It's never going to happen. So if that's what you're waiting for, you're going to wait to the end of your life. That's never going to happen. So I just knew that if I follow the process, I don't care what market you drop me in on this planet. I'm going to make money. Give me enough time to study. Give me enough time to do my research. I'm going to make money. So that's how I looked at it when I decided to go to Connecticut. I like the entry point of going into Connecticut, the price point, I should say, of going into Connecticut. That's what I liked.

And I knew that if I followed this, I'm going to make a lot of money if I followed this. So that's what I did. And I bet on myself. So let's talk a little bit about when you went to at Connecticut, the price point was appealing to you. You knew you could get pre-approved. You knew you could probably find rents that will cover your mortgage by the price-to-rent ratio. Once you got there, how did you decide what neighborhoods you wanted to be in, what types of properties you wanted to go after, stuff like that? What I did, similar to what a lot of other people that have been on your platforms have said, I went and started looking to build relationships with people. I think that it's a respecting

when you're going into someone else's backyard that you have somebody, welcome you and show that you have respect of their backyard and that you just want to come in and invest in their backyard with love. So that was my approach. I wasn't trying to come here like some big shot and saying, hey, I got some money and I'm coming here to take over. So I just started looking to build relationships with people. I went and the easiest thing to do is to get into real estate and to buy something. I didn't want to just go and spend the money. I went out there to go and learn the neighborhood. I went to the corner of bodegas. I don't know if the what you call that in your area, but the bodegas are the little mini marks where you can get food

and drinks and stuff like that, or I would go to the barbershop, or I would go to BJs or the local BJs or Walmart, just so I could get the feel of the people, the neighborhood, the smell of the atmosphere, so that I could adapt to the people there. So that's what I did. And then I was going out there,

I would say upwards of about two months. And then I said, you know what? I'm going to start right here. This is where I'm going to start buying. So then I became laser focused for that area only, and I stayed in that area. which happened to be at the time, West Haven, Connecticut. And I stayed laser focused in that area.

And I was laser focused put in my office just in that area and its surrounding area until I got told the yes on my office for a flip. That's awesome. All right. So let's get into the next few years. So you picked Connecticut. You start buying there. Bring us up to some today.

What kind of deals have you done? What do you focus on flipping rentals? What's your kind of overall strategy look like today? Well, at the beginning of me going to Connecticut, it, my goal was for me to build up my capital. Because remember, I just went up there with the $90,000 because I lost it all. So I had the $90,000. My goal was to build up capital because I know with any investor in this business, your ultimate goal that you should want is passive income. So flipping is great. You'll make a ton of money, but you're only as good as your last flip.

So I know that my end goal was not my end goal, but my goal was going to be able to start to take these profits that I'm making off of this flip money. And I was going to take this, the profits for my flip money and then ultimately start investing in a rental portfolio. So in my first year in Connecticut, I did one home in my first year. In my second year in Connecticut, I did flipping wise. I did two to three homes. In my third year in Connecticut, I was at maybe 10 to 15 homes. I flipped.

So fast forwarding year 18, 19, and 20, my average was over, was 20. homes or more flipping and selling. Wow. During the pandemic, the pandemic was one of my best years. And then if we want to talk about 2021, I did some strategic partnerships, which is what you guys talked about to in bigger pockets. And I did a strategic partnership. And for 2021, we're at about 12 or 13 already in the first quarter of the year flips

that we've done. You find Connecticut, you start small. I mean, you did a flip. You got some confidence, got some knowledge, gained the experience. getting the networking, did a couple more the next year, did a bunch more. I mean, 10 to 15, 20 flips, like we're talking a year now. Like, that's insane. I mean, I struggle with like a couple. So yeah, I want to dive into how you'm able to do this. And I know you have some rental stuff too, so we'll get there. But let's cover the flip stuff first. I mean, how are you pulling this up?

How are you finding them? How are you funding them? Walk us to some of those details. The way I'm finding 90% of my deals for the people that don't think that there's deals on the market. 90% of my deals is off the MLS is where I find my deals. So what I did is, Over the years, I started building relationships with other realtors, especially new realtors, people that just got their licenses that were wet behind the ears, because I know that if I were to tell a more seasoned realtor, the process that I need them to follow in terms of making office and things of that nature, they're going to look at me like I'm crazy.

I started getting newer realtors that were wet behind the ears that I would tell them, trust me, listen to me, do this, what I'm asking you. Two things I need you to give me. The ARV of the property and just give me a couple of pictures of the property. Based off of that, without me even having to physically go, I know what I'm going to do, how much my offer is going to be about in terms of my maximum offer. Just trust me and just put the offer in for me. A lot of them thought I was crazy, but they did it.

But once they got their first deal under their belt with me, they became a believer. So what I did is I would have two, three, maybe even four of them working in different parts of Connecticut simultaneously doing exactly what I just finished describing to you. So this is how I was able to get two or three properties under contract at the same time. Now I got these properties under contract. Now I have my contractor. Originally, when I started, I started with one person and his father. That was it.

I didn't have a team of people. But when we first started, I had a conversation with him and I told him, if you please will trust me. and if you just follow me and just believe in me, I'm going to help you to build up your own contracting team. That's what we did. Just him and his father with the first home and the second and third home, it was just literally him and his father

and maybe his wife that were demoing and doing the work to get the property done and to be put on the market. In the process of we doing that, he was learning the business and learning of how to work on even more distress properties because we would buy mostly lipstick. properties. So over time, over the time we started being able to buy properties that even your best flipper would not even touch. We started buying those properties. So by us doing that,

I told them, listen, I got to get out of here. You got to take my position out here. You got to start hiring people to be in your position and hire your father to be in your position. And that's how we started building up our team. From that point of going from one to two people, we were able to build up upwards of 12 to 15 people at a time. And, you know, and, you know, we were able to then spread them out simultaneously to work at the properties at different points of the rehabbing to then put the properties back on the market for them to sell. That's how we started turning them over. We just started making a lot of money.

We started making a lot of money with that. 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. Specialize exclusively in real estate investors,

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Again, that's biggerpockets.com slash dominion. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed, sponsored job posts help you stand out and hire the right people quickly.

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of the show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. Well, B, can I ask you about how you're structured? How did you hire these people? How are you managing these teams of contractors? Are you just letting the general contractors run the show, or are you more actively involved in that?

Right now, I wanted to do from the beginning, even describing what I said with the one or two people, I wanted to try and keep everything in-house as much as possible so that I can make it build the way I wanted it to be. As we started hiring people, yes, he's the general contractor, but he only is a general contractor with me. He's the only person I needed to speak to. I didn't have to speak to the plumber. I didn't have to speak to the electrician or the people that are doing the roof. I only had to speak to him. And then I know he was going to handle all the other people that were there.

The only person I had to pay was him. I didn't have a multitude of people and I had different invoices coming from. I only had to pay him. And he was the only one responsible and he's the only one that would be yelled at if I wasn't satisfied with what was going on. And what about financing these deals? I mean, are you using hard money for them or what do you do, isn't? At the beginning, I was using my money at the beginning. So this is the reason why, if you remember, I said I was only doing one deal at a time,

and then I was doing two deals at a time, because every dime that I was making, I was reinvesting the money back. I didn't take a penny of any of the money I was making to buy anything lavish or to do anything extra. So eventually at one point, I had over $600,000 in liquid money that I was able to build up. I met a gentleman that now people are starting to start in. to see what I'm doing. And I went and I spoke with him

and I was bragging to him how I have $600,000 tied up in three properties. And he said to me, are you crazy? Why are you doing that? You need to start learning how to leverage your money. So when he told me that is when I started studying about leveraging my money utilizing hard money. By that point, yeah, I started bringing in hard money

which helped me to scale up because now that same $600,000 that would have been tied up in three properties, that same $600,000, could be spread between 10 properties or more, and I would still have money in the bank to maintain the interest-only payments and the other things that come with doing that.

Yeah, really good. Really good stuff. I mean, the hard money thing adds a degree. I mean, any lending, right? It adds the degree of risk. There's a little bit something like, oh, now I've got to payments. I got to deal with all the stuff.

But just the ability to multiply what you can do and be able to do one deal, two deals, or five or 10 deals is a phenomenal thing that we have right now. Yeah, very smart. Also, I want to point out one thing that you said, I don't want to gloss over this, because this is super smart. You said that you found this contractor and basically said, and correct me if I'm wrong here, if I misheard this, but

you're like, hey, like this person was not a super successful, big contractor. They were just a couple people doing this. And you said, come with me, trust me. I will teach you and train you how to basically business owners. Like, I'll help you learn how to make this like a legit big thing. And so because of that, it seems like they have a lot of loyalty with you. Is that sound about right? They'll die for me. They'll literally die for me because. because this same contractor was employed at the same time when he was doing his contractual work. Then he came to me and said to me, hey, well, you know, do you think that I could stop working? Could you keep me busy enough that I don't have to go to work anymore?

And I said that if you got my back, you don't have to go to work anymore. And he was able to quit his job. He ended up making quadruple the money he was making at his job. He started making it with me. And he became his own boss. and I helped them to create his own company and I helped them to create his own payroll system. So yes, yes.

I love, I love, love that. It actually reminds me a lot of what, like, David, what you're doing, David, with, like, I know bringing in agents and probably on your lending side, I think you're doing that kind of stuff. Like by enabling other people and by giving them a better life

because, like, you figured out a little bit about business. We've all figured out a little bit about business. That's such a powerful skill you can pour into somebody and now they're going to be loyal to you, hopefully for life. David, do you want to speak to that at all? So this is a part of human nature where we are all our own worst enemy. Every one of us is looking for the quick fix.

I want to find a property manager that will just do everything for me and I don't have to worry about it. I want to find an agent that can go find me great deals, negotiate amazing, and get me what I need. And I want to be that person's top priority. And the problem is if you do find that one quick fix and they get really good, now they become good and everyone else wants to use them and it's hard to keep them. I've had this happen with several contractors, several people. And what I've ended up doing, like you said, Brandon, was just looking for talented people that were willing to sacrifice for me in the beginning, often in the form of an internship or they worked one job, but they learned another while they were doing it, to build up the

skills that I needed that person to have. And I wish that more people in our community would do that. There's a huge need from people that want to learn the game and need someone to teach them. And there's also a need from people that need somebody to kind of leverage the work onto when you find the right fit. That model is really the best one because hopefully that person is loyal to you for the long term. You don't have to worry about them learning these skills and then, oh, now I'm good. I can retire. I don't have to work anymore.

So I commend you well before doing it. Brandon, I know you do the same thing with Open Door Capital. You bring in interns all the time, literally are flying people to Hawaii to work with you. I think that this is sort of what the smart business people of the world have figured out, that you can't always find. a ready to go right out the box solution that works perfect, that sometimes you got to do a little bit of investing into people and not just properties. So in other words, you don't always find good people. Sometimes you have to make good people. Make good people. All right. Well, we let's go back to your story a little bit. So you making a lot of money with flipping. But like you said, like

flipping is your only, I think you said you're only as good as your last flip, which is sure, the money stops coming in. So you transitioned as well and you started adding rentals to your portfolio. What's that look like today? How many rentals you have? What are you doing with them? What's your strategy with rentals today? I can, I could come into doing the rentals. What happened is with the biggest issue that I found with the rentals was the cost of getting into the rental. I know that a lot of people promote about the birth strategy and different things like that.

And does the birth strategy work? Yes. But does it work efficiently everywhere? No. So the area that I have my rental in, the birth strategy doesn't work that efficiently. So I have to figure out a way, how can I get into buying these properties, But then at the same time, making sure that these properties are going to cash flow. So what I started doing is that I built up a large sum of liquid money from my flips.

And I decided to start buying my rentals and looking at distressed properties. My method of buying my distressed properties is that I was looking for three families or higher or more. So if it's three, four, five, six, whatever it is. And I would put 20% down on the property. With me putting 20% down on the property, it would eliminate the PMI. I already have the equity in the property. I know that by the time I finish making the property what it can be, the value is going to shoot through the roof, and I would just leave the equity in the property because all

I want is the cash flow. So now the method of how I go about it, literally one third of my property being rented covers all expenses, including mortgage, taxes, insurance, utilities. The other two-thirds is pure profit. So that's how most of my rental portfolios perform. form. That's so good. So how many do you have total now? Unit-wise? Unit-wise, just about 50, roughly, give a take about 50. I'm more than confident I'll be double that by the end of this year. You've trained people to help you be successful adventures, which you did not quit when you took

some losses, which made you a better business person. You've scaled a flipping business to be very successful. You've taken the profits from set flipping business, put them into rentals that develop cash flow in a relatively safe manner because the debt is very low to, you know, to the money they're bringing in. Now you've got profit coming in from these rentals that you can choose to pour back into the flip fund, back into developing new people to help you grow each of these businesses.

Is that fair? That's essentially, yeah. Yeah. And then you've also got equity in these small multifamilies that if you decide you want to go bigger, you can 1031 those into bigger deals. Is that sort of the long-term plan? I'm not looking to sell them, to be honest with you,

because they cash flow ridiculous to the point that if I tell people how much I generate, they think I'm lying to them. But I'm one that's extremely transparent, that I have no problem showing you the mortgage statements, so what the expenses are. And I got no problem showing you literally money coming into the account so you can see it yourself.

So I want people to understand that it's not a made-up story. It's a true story. But what I am actually working on now is because the properties are worth so much more than what I owe on them that we're actually working now to get a portfolio line of credit, where then now I could minimize or even eliminate, utilizing hard money that I'll have a line of credit on my portfolio with an extremely low interest rate and then I'll start doing that to start continuing to buy.

Very, very smart. All right. So I love this whole picture because I hope people are seeing what's possible with real estate. Like even coming from a rough start, having difficulty, not giving up though. You figured out finally how to like how to scale this flipping business, how to generate massive amounts of income today now and then how to take that money and not just go spend it on flashy cars and things like that, but you're buying assets like real estate that produces more cashful. It gives long-term wealth and financial freedom, but also you're building equity that

you can then take and use that line of credit that you're going to get to go and flip more houses to be able to dump it into more rentals and this like cycle of awesomeness that real estate allows a person to do. And you didn't figure out overnight. This spans, you know, we're talking a decade or two of time here. They've been in it. But it just shows what's possible when you stick with something long term. Is there anything else before we get out of here? Actually, I know one thing I want to ask you about. I know on your Instagram you talk a lot about like the ride along. What is that? Like, what are you doing right now, like showing other people the ability of what you're doing? I guess, what is that whole real estate ride along thing? Well, it's two things actually. So I have a

real estate boot camp where it's literally a boot camp where I identify a new flip that I'm buying. And then I'll bring maybe 10, 15 people and they have to dedicate six weeks because my average flips take about six weeks. They have to dedicate one day a week, which would normally be a Saturday. They have to come out every single week with me so that they can see the progression of the home until completion. Then upon their completion and during that time, I helped them to get their own LLC or company built up. I helped them to find strategic ways of getting funding for their potential future flip. And then when the property is actually sold, I create a operational agreement between myself and their company. And that operational agreement will

identify that flip that sold as their actual first flip, which any hard money lender or any banking institution will actually acknowledge as their first flip. Nobody else is doing that. I could guarantee you that nobody else is doing that. The ride-along is basically the participants being me for the day. One of the biggest things that I hate is that everybody wants to do online, online, or going into just a seminar space with a multitude of people, and I've done that. And I don't care who you are, you'll never learn anything. And even if you learn something, you are a little bit nervous to raise your hand to ask the question. So I like keeping my events small and intimate purposely.

So my ride-alongs, I'll have 15 people, 20 people sometimes, and they're literally going to be with me in vans, and they ride along with me for the entire day. And it could be for 12 hours, literally. They'll be with me for 12 hours. And I'll have your head spinning. I'll take you to multiple flips that I currently have going on in real time. I provide them the HUD statements so that they can have confidence that it's actually my property and not a property that's being borrowed. I show them the real numbers of the purchase price. I show them the real numbers of what I spent in rehabbing it.

And I show them the estimate of what this property is going to sell for and my potential profit. And then from that point, I then take them to some of my rental portfolios and I walk them through to show them the befores and the after and show them how I utilize the money I made from the flip for them to buy the rentals so that they can actually do the same thing too. then by the time they leave, you know, I can't tell you, I've helped multiple people become millionaires with the strategy that I showed. I have multiple people that I've helped with that. I just basically just want to be as transparent as possible, you know, so. Really cool to see, like, how much that would have helped me getting started. You know, you know, you're able to just follow along somebody.

Like, it's like a, yeah, like a ride-along. It's like a cop. I know David, I don't know if you ever did ride-alongs David as a cop, but, yeah. Did you, yeah, you probably didn't enjoy those. Like the little, like, high school kid, like asking annoying questions all this. Is that what you did? Imagine like trying to run a race with really high stakes, and they're like, hey, take this 45-pound high school kid and carry me around with you the whole time. That's what I'm right along with.

So you're doing God's work out there. I'm trying. I'm trying. All right. Last segment of the show. Our famous four. All right. This is the famous four.

Same four questions we ask every guest every week. We're going to throw them at you now, Albi. So question number one, do you have a favorite real estate related book? I guess the number one. I know a lot of people have said it was the rich dad, poor dad. I had to read it four times to finally get it. And then there's a couple that you guys have done. This one was really good for me.

Oh, the book on flipping houses, yeah. Yeah, that was really good for me. And what's the other one? Fix and Flip Your Way to Financial Freedom. Very cool. All right. What about a favorite business book? I don't remember the author, but it was titled The One.

I don't remember that author. I apologize, but it was the one. Something about the one. Is it the one thing? If you want to call that a business book, that was my, one of my favorite books I read. Do you think it was the one thing by Gary Keller and J. Papistand? I'm pretty sure it was.

Yeah, that's a very popular business book. Really good. I recommend that. All right, next question. When you're not teaching other people how to flip houses, flipping houses yourself, buying rentals, creating basically an awesome story for everyone to be inspired by. What hobbies do you have? I like to cook when I get an opportunity.

I own a couple of cars, so I enjoy cleaning my cars and driving them by myself with my music nice and loud. spending time with people that love me that I love and that I know that truly want to see me win and being home alone and quiet time, you know, I really enjoy those things. Last question for me. Welby, what do you think sets apart successful real estate investors from all those who give up, fail, or just never get started? Belief in themselves, betting on themselves.

That's what I think separates. I think anybody that you found successful in whatever adventure that they're going through, they're betting on themselves and believing themselves that they can do it. I think that's what separates us from a lot of people. Yeah, I got to say based on your story, well, there's no denying that. I mean, you had to bet on yourself over and over and over and over. And the only thing cooler than the fact that you didn't quit when everything went wrong is how big your business has grown to now.

So maybe there's a lesson to be learned there that the harder it is to get started, the bigger it's going to be when you get there. I really appreciate you sharing that. So I know you've inspired a lot of people. I know there's a lot of people that are going to want to pick your brain about how you handled various things. I really appreciate that. Thank you for that. Where can these people get a hold of you?

Mainly on Instagram. They could get me at At My Best 197, At-A-M-Y-B-E-S-T-197. They can also get me at At My Best197.com. They could also get me on Twitter with the same name as well. Hey, what's the 197? What's the background to that? 197 is the actual block that I grew up on in Hollis- Queens. And it's a famous block because the home that I grew up in was the home of DMC from Rwold. DMC. So I swire added the 197 to it. Very cool, man. Well, thank you so much. It's been phenomenal. I can't wait for people to get this interview and to listen to it. I think it's going to change a lot of lives. So

appreciate you. And yeah, keep crushing it, man. I appreciate you. Listen, I want to thank you. I want to thank Bigger Pockets and every one of you guys. You guys are life changing. I'm a testimonial to that fact that you guys, you know, I really appreciate you guys. And this was actually one of my goals. Seven years ago, I said I'm going to be on bigger pockets one day and look at that dreams come true so thank you guys so much man i love to hear that man thank you thanks for your transparency wellie thank you guys this is david green for brandon don't just find good people make good people turner signing off 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 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.

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