Epic Real Estate Investing - 2 NEW Sources of Discounted Real Estate! | 1171

Episode Date: December 16, 2021

In today’s show, Matt is joined with industry professionals discussing 2 different sources of deeply discounted off-market real estate that you may have never heard of! That said, in the first portion of this week’s episode, Matt is joined with Josh Stech, the CEO of Sundae, a company that helps homeowners get a better outcome when selling off-market. Moving forward, Matt interviews a great friend of the show, Jamel Gibs, on how to find and buy an untapped resource for discounted real estate, condemned houses. BUT THAT’S NOT ALL! You will hear the latest in the news and crypto updates, as well as learn everything you need to know about Epic’s Christmas gift!   Merry Christmas to you and your family!   Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. In today's show, I'm focused on two different sources of deeply discounted off-market real estate that you might have never considered. You might not even have heard of them. And so I'm going to begin by interviewing the CEO of a new real estate marketplace that connects homeowners looking to sell their house as is to the largest network of real estate investors with their promise to deliver peace of mind and support through the process. And then I chat with a very good friend of mine, Mr. Jamel Gibbs, to discuss how

to find and buy a relatively and surprisingly untapped resource for discounted real estate. And I'm talking about condemned houses. But before we begin, Merry Christmas to you and your family. To celebrate for this week, Epic is running a Christmas sale. It's the Christmas deal. 82% off Epic Invest Ed. It's our Epic Training Vault. Now, it's all of our contracts, all of our marketing resources, all of the training

with creative financing, all that good stuff. And we're including something in the sale that we've never offered before. And that's 100% financing for your fix and flip projects in 2022. That's funding the purchase of the property and funding the rehab. And so if you like the way that that sounds and you want to get all the details, go to epicchristmasgift.com. Epicchristmigrismgift.com. Oh, and if you don't celebrate Christmas, well, I wish you a Merry Christmas anyway.

I can't see anything wrong with wishing each other well, regardless of the occasion. When my Jewish friends wish me a happy Hanukkah, I'm grateful to be included. And I like to joke around about dumb stuff quite a bit. And, you know, just on a serious note, I think it's time we start focusing on the good instead of finding reasons to focus on our differences. Any occasion for people to wish each other well is a good occasion. So I wish you and yours well during this season and may God continue to bless us all. You're ready?

Let's go. Welcome to the all-new, epic real estate investing show. The longest running real estate investing podcast on the interwebs. Your source for housing market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, Epicurei.tv. If you want to make money in real estate, sit down. tight and stay tuned. If you want to go far, share this with a friend. If you want to go fast,

go to rei-aise.com. Here's Matt. All righty, my guest today started his company Sunday to help homeowners get a better outcome when selling off market. And with a career at the intersection of technology and residential real estate, he's seen firsthand the opportunity to create a new type of business that wins by doing the right thing for the seller. He graduated with honors from Stanford with a BA in economics, BA in Spanish, and an MA in Latin American studies with a focus in economic policy. He wrote his honors thesis on the long-term impact of the subprime lending crisis on the Latino community, lives in San Francisco with his wife, two sons, and their two dogs. So please, without further ado, help me welcome to the show, Mr. Josh Stetch. Josh, welcome to

Epic Real Estate investing. Hey, Matt, thanks for having me, and I'm really excited. Yeah, me too. interesting that you went to Stanford because my best buddy went to Stanford and you remarkably look a whole lot like him. And I even thought that before I even read that you went to Stanford. And I was like, oh, wow, must be in the water. Must be. Yeah, it was, yeah, I was really fortunate. I grew up in Southern California, just, you know, sort of normal middle class family, public school, 3,500 kids. And I was just really fortunate to have a family that supported me and cared a lot about education.

And I was really lucky to have the Stanford platform. Fantastic. Well, congrats to that and congrats to your newest venture. Thank you. And I want to learn all about it as well as your background. But I was just curious, where does the focus on the Latino community come from? And what did you learn while writing your thesis? Yeah. So I grew up in Southern California, as I mentioned, San Diego specifically. And there's just quite an influence from the Latino community in the area. And I grew up speaking a lot of Spanish with friends and got really interested in it. I was one of the few kids in the Spanish class that wasn't just taking it for credit. I actually. cared. And man, every chance I had an opportunity, I would speak it and learn it. And so when I got to school, university at Stanford, I knew I wanted to study something that, you know, could help me practically in business, but also something that I was really passionate about. So I double majored, as you mentioned, in economics and Spanish. I studied in Latin America. I worked in Latin America.

So, you know, it's just always, I think it was just because of where I grew up and the people I was around, I really fell in love with the culture, you know, the dancing and the singing and the just, you know, hugging and all that stuff. I just love it. So. So that was it. And then when I had a chance to do my honors thesis, I actually reflected on the first job I ever had was in a mortgage cold calling center, believe it or not, in 2004. And most of my friends were getting jobs during high school at the local nursing home or in and out burger.

And I just said, give me a commission-only sales job and give me some upside and let's go. And so I got into mortgages. And it turns out because I spoke Spanish, a lot of the families I helped were of Latino background. So long story short, to answer your question, when I wrote my thesis, I learned a lot because I interviewed a lot of the customers. I had helped get mortgages. And unfortunately, a lot of them had hit tough times with these adjustable rates,

the negative amortization products that were sort of popular back then. And I got to interview them just to say, hey, this was your kind of shot at the American dream as an immigrant with money. And what was your experience like? And what did you? So what did I learn? I mean, I learned that there's a real impact, you know, that the kind of mortgage and financial products that,

that we all conceive of and design and that ultimately the regulators allow to be sold and distributed have a real freaking impact on people and their lives and their families. And that was a big learning moment for me because there was a lot of stuff out there, a lot of programs that felt like the right opportunity for people, but really ended up underserving them. Mm-hmm. Mm-hmm. What do you think they broke down? Sorry, the products. Yeah. I mean, like the, you know, providing the opportunity. I was a real estate agent during that period of time. And I was helping a lot of being a newer agent at the time. I was helping a lot of first-time home buyers. And it was really easy for them to get loans,

right? And so I saw it as in hindsight, when everyone called it predatory lending and it was such of this, this had this negative stigma wrapped around it. But at the time, I mean, I was helping people that really wanted a house and they really wanted a shot at what you just kind of posed there, the American dream. And, you know, and it just didn't work out. And I don't know what, what you saw. what didn't work out. You're right. I mean, a lot of people took advantage during that time of the ability to finally realize their dream of homeownership and they made it work. You know, I think there was just some people who unfortunately, because of how loose credit score standards got, how loose debt to income ratio standards got and really how complicated, frankly, the financial products became, right?

It was no longer just a 30 or a 15 year fix. It was like negative amortization. What is that? You know, 228 adjustable? What does adjusting mean? And wait, it can only adjust this much in year one, this much in year two. Well, what does that really mean for my payment? And, you know, am I going to, are my wages going to go up, you know, sort of commensurate with the increases and rate? I think it became hard for people to understand what they were signing up for. And yet, one of the first times that stated income, low doc, no doc sort of allowed them to get into the game. So I think it was, like you said, a lot of people that deserve to be helped that were financially had the wherewithal to be helped were and succeeded. It's just that a lot

of things. I think a lot of people that they got in over their head either because they didn't understand what was going on or because, honestly, the design of the products allowed people to get credit that probably shouldn't, they weren't ready. Right. Right. Well, here we are, fast forward to 2000, what are we in 21 now. It's hard to keep track with, it seems like everything's when was COVID? Was that 19 or 20? It's so hard to remember. It's like the lost year, you know? Yeah. But here we are. Today you started this new venture Sunday. But what happened in between there and what inspired you to start this? Yeah.

Oh, geez. Well, a lot in between, I guess. I came out of Stanford grad school and moved to Las Vegas of all places. And I started fixing and flipping houses with my dad. So he had retired from a corporate America job. He'd been doing a lot of pre-construction investing before 2008. And then, you know, we kind of realized that there was quite an opportunity to start buying and renovating homes and either reselling them or holding them in a portfolio. It was like the second time in the history of the United States, you could buy a home for less than you could build it.

So that just signaled to me quite an investment opportunity. So I moved out to Vegas and I just started living home to home, buying homes from the auction, renovating them, getting them on the market, turning them and moving on. And it started off as just some money that I had, some family money, and then I was fortunate to reach out to some friends and contacts and start a little fund. One thing led to another. I ended up doing over 200 flips in two and a half years. And what I realized then was a lot of my competitors with capital constraints. You know, this is now 2011 and 2010, 2011. And although opportunity was there, you know, through some short sales and bank product,

capital was really tough. So I turned my sights to being a lender. So I became kind of a hard money lender. Equity partnerships, debt partnerships. Did that for about three years. Did over 1,200 debt and equity deals with other people that were the principles in the deal. learned a ton about the credit side of the business. No longer was it about managing contractors and reselling homes.

It was more about loan to values, loan to costs, you know, and borrower sort of creditworthiness. So that was a lot of fun. And then I was given the opportunity to start, along with a few friends, my first technology company, which was called Lending Home. And Lending Home is, you know, it was a sort of a mortgage technology play, but we started with a very narrow product, which was what I'd been doing, this 12-month, you know, fix and flip loan.

And, you know, we started there thinking that would kind of be our first stepping stone to a broader play and realized, man, that was a huge market, very fragmented. There really wasn't a national player at the time. So, we became the largest in the industry over the next four and a half years while I was there. And we had significant double-digit percent national market share. We were in all states. We'd grown from the four of us to over 400 people. we raised hundreds of millions of venture capital.

It was just an awesome, awesome, awesome experience. But it was really towards sort of the, as I was rounding the corner and almost hitting year five at Lending Home, I realized that really what I believe to be the bigger opportunity. And I call it kind of my 10-year aha or 10-year epiphany because it took me that long to realize that what was really needed in the industry was a managed marketplace that sat between off-market sellers that needed what a property investor could offer. speed, certainly, reliability, quiet sale, all the things that we all understand, and connecting them to those investors and giving them a fair process, you know, not talking to one or two,

but actually, you know, being able to get them offers from dozens so that they get a good deal, the investor gets a good deal, and, you know, everybody's happy. And so that was a reason that I had that insight. I'll give a lot of credit to my co-founder, Andrew Swain. So Andrew Swain was CFO at lending at the time. But before that, he was CFO at Airbnb. And he really understood the power of a managed marketplace. And, you know, because Airbnb, of course, is exactly that, connecting vacation rental homeowners with tenants. And as I started describing more and more what I wanted to do as my next chapter after lending home, he said, dude, you've got to be a managed marketplace. You've got to get in the middle, charge a flat fee, make everything simple and easy to understand,

create fair competition. And, you know, so that's what we did. So we started Sunday about three years ago. And in typical kind of technology fashion, we raised venture capital. We've raised about 140 million to date in the last three years. We have a staff of hundreds of people across the country. And what we do is we market to homeowners. And we go through the process of packaging their home as an investment. So we do inspection reports, 3D walkthroughs, floor plans, you know, pictures, all the rest, put it on a marketplace. And then we have thousands of investors now, big and small, who bid on those properties or make offers. And at the end of the kind of like a five-day auction process, we review all the offers

with a homeowner. And then they choose one and that's that. So we're kind of a market, we're a matchmaking service between off-market sellers and property investors. Got it. Well, my next question was to ask you, what's the elevator pitch for Sunday? So maybe that was it. Maybe that was it right there.

It's a marketplace, you know, similar to. say like a Facebook marketplace, right? It is. It is. Yeah. And I think the value props on both sides are strong. I mean, on the one side, it's get the benefit of competition without some of the drawbacks of showings, right? And some of the confusion that happens in this space because it's largely unregulated, right? There's a lot of confusion when a seller maybe is able to get two or three offers on their own by calling a few people on postcards, right? What happens is they get contracts and offers that are highly different. You might get two offers for 400,000. Somebody's paying all your closing costs. Somebody's paying none. Somebody's got 30-day contingency. Somebody's got none, right?

Somebody's paying $10,000 earnest money. Somebody's paying 500. So what we do at Sunday is we said, look, Mr. and Mrs. Seller, we can give you the competition that you don't currently get by just calling a few while preserving a lot of what you want, which is certainty, speed, cash offers, non-contingent. And then what we'll also do is standardize everything in between. So every offer has to conform to all of these terms, like the same earnest money deposit, no contingencies, you know, that sort of thing. The final thing that we do for sellers is we do a $10,000 cash advance because anybody who's been in this business and done even a handful of deals knows that it's not over for the seller when they sign a contract, right? Life is still dealing them

a tough hand. So for those next 20, 30, 40 days, whatever happens to be until they get the proceeds from the sale, they got problems. And so we give them the cash advance. That's the seller prop. On the buyer side, it's pretty simple. It's, look, it's, you know, what are property investors really good at? It's underwriting properties, identifying the value-out opportunities, managing the construction, managing the resale negotiation. It is not typically doing the marketing to find deals. And so, you know, we say, let us do that.

Let us bring you vetted inventory. And then you're able to then get your money to work much more quickly because the cardinal sin of investing, right, is having money in the bank paying you nothing. So we try to be a consistent, steady flow of inventory. that's vetted. You know, we've done a lot of work on it, a lot of inspections, things like that. Okay.

So let's see. I'm curious. So who is the ideal customer then? Is it the seller or is it the buyer? You know, I think in traditional fashion, you know, marketplace really wouldn't identify one or the other.

It'd say, in order to be a healthy ecosystem, you know, Airbnb, if it only served its vacation rental owners, probably wouldn't have tenants for very long, you know? And if it did everything

that wasn't the best interest of the tenant, your landlords would find somewhere else to go to rent those properties. So I think we are in the business of balancing those two things. And the reality between buyer and seller in any industry is that there's often conflicting incentives, conflicting desires and outcomes. And so, you know, we try to manage it in a way that gets the best outcome for both parties. Because for us, it would be a bad outcome if people were consistently overpaying for homes, because then they're not going to come back if they're getting bad deals.

But at the same time, it would be a bad outcome if a seller was consistently getting you know, only a handful of offers at really low prices. So we're having to balance both, I think is the answer. So you being a former real estate investor, and you kind of mentioned postcards, I'm sure you've done all the marketing in the past direct to sellers, right? And then you know what it's on that side, and that's primarily the people that are listening to you right now as well. And then now you've made this switch to where it almost seems like you're, you know, creating a lot more equity in the transaction and being a little bit more fair. I don't know, I'm going to use that quote unquote fair because that's certainly debatable and subjective for sellers.

What inspired you to make that transition to go to the other side, so to speak? Well, gosh, and I would even say I don't like to look at it as sort of the other side. I think, I guess I realized that while I'd been supporting property investors for a long time with capital, like we had introduced higher loan to value programs, better construction draw processes, these longer term loans, cheaper capital. I mean, we, you know, myself and the founders of Lending Home, like, we pioneered a lot of, a lot, probably a lot of the listeners are using products that either are lending home products that are innovative or that others are an affiliate for Lending Home, so I send people there all the time.

Yeah, I mean, fantastic organization. So I've always, you know, had that small business owner, family run company. I mean, look, that's where I started. I was with my dad fixing and flipping. So I have a near and dear place in my heart for those people. So I didn't switch sides as much as I just decided. you know what, there's a better way for both sides. I think that the thing that caused me to realize that I needed to do this was I was speaking

with a colleague of mine. I'll even say they were a friend. And they are. And they were in the business of wholesaling, which of course a lot of us done in the past and I'm sure a lot of the listeners do today. And I just said, hey, how's business? And he said, it's great. You know, I just did this deal.

Of course, we're all deal junkies. So he goes right into the deal. And he says, got it under contract for 100. A couple days later, found a buyer for 190, closed. in 10 days, made 90 grand. Like, you know, I'm pumped. And I just, I'd heard those stories before. Something about that, right?

I mean, you know, who knows why things happen the way they do? Just, I just stopped and I said, you know, hey, do you think you deserve $90,000 for that? And of course, he goes into, well, I only do a few a year and I need to maintain my lifestyle. And like, I have, you know, all these nice things. And I said, no, no, I totally understand why that was a good outcome for you. But did you deserve it? And he was having a hard time answering that. So then I just switched gears and said, well, how about the?

the seller, tell me about that. Seller was a widow, and she was looking to move on to a nursing home and, you know, again, a very common avatar for our business. And I said, do you think maybe she would have benefited from $110 or $120,000 or $130,000 instead of $100? Well, yeah, probably, but I would have made less. And I just said, well, do you think there was a more fair outcome? And long story short is, I got them to agree that, yeah, you know what, I probably didn't

deserve that. And that was, I think, the moment for me where I just said, you know, it's not that that's not a valuable service. It's that it needs to be properly priced. And so what we do is we have a flat fee. You know, we don't chart, we don't make 90 and 10,000 and sometimes make 5,000. We just say it's transparent. It's a flat fee.

And by the way, like, it's better for everybody. So I think that was the moment if I had to pick one where I just said, I'm going to do something about this. I'm going to get sellers better outcomes while also preserving the critical role that property investors play in the housing market, which is renovating homes and, you know, turning dilapidated homes into like new. Because we all know that new home builders are not delivering enough inventory for demand. So we have an important role as investors. I just think there's a more fair way to split the economics. You know, certainly there's always an anecdotal story to support that side, right? And there's

plenty of them. And I even noticed on your website, you used the word predatory investing. And I know they're out there. But to push back or play the other side of it, you know, when you're going out and you're looking at properties, you know, that's a huge responsibility that you're going to be taking on. And, you know, what you don't want to do is, you know, that $100,000 just to use that example, your buddy's example, you know, what if, you know, he took ownership and all of a sudden found out, you know, the foundation needed to be redone and the roof needed to be redone. And, you know, there's a whole lot of liability and risk that we take on as well. And we just never know how it's going to pan out. And we love those home runs. We love those $90,000 days, right? Because I've been

burned so many times when I thought I got a great deal. I didn't get burned, but I just like, I made a bad decision on my part. So it goes both ways. That's all I'm saying. It does. No, it certainly does. And I think it's the, there's certainly the like, I think the, the types of players that we can all agree just, you know, shouldn't be in the game. The ones that actually intentionally, right, use tactics like renegotiating at the last minute, fabricating inspection reports, right?

Like agreeing to prices, they know they can never pay while the seller increases their commitment and gets closer to close and then changes the, those people just, there's no room for them. And unfortunately, you go to a lot of these real estate education events and they teach you how to do these things. So those educators, they should be out of business and so should the people that employ those tactics. Then there's all of us who are honest. We work hard and we deserve to make a very good return for our efforts. And then to your point, there's the volatility in the business. And one thing I think we can help with and we're trying to and we can get better is delivering a package of information that hopefully reduces that volatility of outcome so that people can get more comfortable saying, all right, well, maybe I make a little less on.

each deal, but it's more consistently the amount that I thought rather than this 90 or this 10 or this 50. But that's back to the point of like, who's our customer? That's our responsibility to the investor side is, how do we get you more predictable outcomes? And that's a hard job. Perfect. Okay. So when a seller decides that they're going to use your service.

Okay, that's what will be the second question. The first question is, how are you promoting yourself to sellers? How are you positioning yourself to find your inventory? Yeah. Well, so let's see here. The equation I think of there is, it's, first is what's your product offering. So, you know, are you a cash buyer? Are you a marketplace?

And that's one of our biggest challenges is that we have to position as a slightly different thing, which is, I think most sellers in this circumstance sort of have gotten conditioned to know that I call somebody who can give me a cash offer. What's this thing that can give me dozens of cash offers? So first is product positioning and it's a challenge for us for sure because it's different. Second is branding, you know, and we chose Sunday very intentionally. we didn't want it to sound like a, you know, big, scary property investor brand. We just wanted to be like an Amazon or a Google or, you know.

Sure. And so we were really excited about that name. And, you know, Sunday, the day of the week, of course, which were spelled differently, but it's a day of rest. It's a day. It's a real estate day. It's just, anyway, we were really pumped about the name. You are spelled like the dessert, though, just for everyone listening.

Yes, Sunday.com with an E. Sunday with an E. So then it starts, so then it's brand. Then it's, of course, targeting. And I think that's where we are fortunate to have quite a leg up on, you know, let's just say myself, if I go back when I was trying to do this myself. You know, we have access to the credit bureaus. We have access to partnerships with firms that have some of the best consumer data in terms of, you know, reported credit drops, you know, open trade lines, closed trade lines, 30-day defaults, notice of, you know, notice of sales. But real time, like much more real time than a lot of the kind of service providers out there.

in the real estate category today. So we've gone and gotten relationships directly. Actually, one of our largest investors is first American title from an equity standpoint. And they give us, they're the largest purveyor of public information on real estate in the country. We get all of that as fast as faster than anybody, really. So targeting is really like, we're really good at that. Then from a channel standpoint, it's a lot of what we all use, direct mail, Facebook, search engine,

but we have a budget that allows us to do outdoor, TV, radio. And then you may have seen in our latest announcement. on our $80 million fundraise was we have a lot of celebrities that believe in what we're doing. You know, Will Smith, Clay Thompson, Shaquille O'Neal. And, you know, I think when you start getting a brand that's elevated that says, you have people like that that say, this is the place to go, you can trust them. You start kind of pulling forward what usually becomes a decade-long brand-building exercise. You can pull it forward by, you know, borrowing the credibility of these celebrities.

So that's another thing that we're starting to do. So, yeah, that's kind of how we think about attracting off market sellers because, look, real estate is a high brand affinity category, meaning you've got to have a lot of trust in who you're doing business with. And you got everybody on the call knows that we're typically in the business of helping people not selling real estate or buying real estate or flipping real estate. We're trying to help people. And that's a trust business, you know. Interesting. There's a, I mean, you're here in Vegas. Is that where you live?

No, I was in San Francisco for a long time. and then the pandemic caused me to relocate to my hometown of San Diego. So I'm in San Diego. All right. I thought you'd mentioned Vegas earlier. So I thought you were here. I was there for the better part of five years. Is that where you are?

Yeah, I'm here in Vegas. Yeah. Right on. So, and the reason I'm bringing this up is because I'm seeing a number of different services offering to buy houses. And it's going to be fair. It's going to be transparent. And, you know, there's a couple actual real estate investors that pretty much dominate the airwaves here, aside from the corporate type branding and look.

What's the competitive edge? What's the advantage? Because there's going to be, obviously some are going to emerge as winners. And we saw one just get kicked out of the business here last week. Right. Well, what's the plan? Yeah.

Well, I think over time, the proof is going to be in the pudding. You know, I think a business these days is only as good as it's online reputation. And I think when you look at some of the bigger names in the business, unfortunately, they've built themselves a pretty poor online reputation. So I think fortunately, we have a very favorable competitive set in that regard. When we, you know, as we built our brand and we have over 400 of views for 4.7 or 4.8 out of five stars across site, you know, that really starts becoming an asset for you. So, look, I think that's long term.

And then similarly, I think some of these endorsements and these partnerships that we're going to do with big names that have big platforms and are kind of synonymous with trust are going to really help. But in terms of right now, I mean, it's a couple of things. It's the product offering, you know, not saying, well, not sounding like everybody else. It's like too good to be true. We'll buy your house for the most money. Trust us. But don't trust us.

You know, come to the platform and know that you're going to get dozens of offers. And if that's not indicative of fair competition, then go somewhere else. So I think it's the product offering is really what's helping us in the near term differentiate. And then, you know, there's no doubt about it. We chose to capitalize with venture capital, which is. is a, it's a different way of doing business that very few people probably on this call have really ever thought about doing it. But one of the advantages is, on the one hand, you give away a portion of your company, but you get a bunch of money up front and that allows you to do

things that are not possible when you're bootstrapping profits like, you know, I used to be doing back with my dad in Vegas. So that's another disadvantage we have is we have money that we can test and iterate and, you know, design. We found out that creative design is a big deal. Most companies that I see in this category use the same thing over and over and over and over and And believe it or not, there's a pretty quick sort of audience, not saturation whatsoever I'm looking for, atrophy with creative. And just the minute we start changing things up, which we have a creative team and multiple people.

So I know that's a long answer, but we're trying to differentiate the best we can now while knowing reputations actually what's going to be differentiated. Right. So when I'm going to talk about Zillow, happy to talk about Zillow if you're at all injured. I don't know what you're taking on that. Yeah, we'll get to that in a sec. But when a seller comes to you and they decide they want to take this on and give this a shot. And one thing that really caught my attention, you said earlier, that you actually vet the inventory.

So what does that process look like when a seller reaches out to you before and what happens in between before they end up on the platform? Yeah. So the sorts of things we're doing is, you know, we do believe that for the types of homes that we're serving, that algorithmic underwriting will never work. I believe that since the day one that I heard about Open Door and everybody else. Could it work for a subset of tracked homes in Vegas or Phoenix? Yeah, sure, maybe. But is it going to work for the types of deals that we all find value in? Absolutely not.

So we don't try to, you know, we don't try to give you an automatic offer or some range on the site. That's just never what we're going to do. It doesn't seem to me that that's the right way. So we visit the home before we make any expectation. And again, like a lot of us probably on the call do. We visit the home and we tell that, you know, we educate the seller about our process and what it means to sign an agreement with our marketplace and give us a shot to auction off their property.

And then if they agree, then we go to work with doing a Matterport. We do floor plans. We invite third party inspectors over that we vetted to do all the inspections of the major systems. There's a pool. There's always a pool inspection. There's a septic, there's a septic, et cetera. The things that I wish I would have had buying from the courthouse, right? you know, all the interior photos and videos, but then also all of the observations from the

main systems via professional. So we go through a few-day process, kind of get not that already, and we put it on the marketplace. As offers start coming in, we have a portal for the seller and they're able to actually see that real time. You know, sort of like you're, you know, if you're on eBay and you're auctioning things off, you kind of get to see what's going on. So that's a seller experience. We never make the direct connection between a seller and the property investor. We always manage both, you know, we manage the experience for both. that wires can't get crossed, you know. So the seller never has to deal directly with the investor nor the investor with the seller. It's always just Sunday. And then as soon as they've chosen

whichever offer they want to go with, which investor they want, then we just start ushering it to close. We open escrow. We manage the deposit process. I mean, everything's pretty standard. From there, the only thing that's not is that that cash advance. So, you know, we'll take the risk on $10,000 to make sure that they have some ability to rent a U-Haul or actually, actually, We recently just had a story of somebody had a broken down F-150 that they were going to use to pull their trailer to move. And they didn't know what to do. They'd been working on the F-150 in their driveway. And then so they use 9,000 to the 10 to buy a new F-150.

So that's one, another piece that's a little different about our process. But that's kind of what a seller experiences. Got it. So the property appears on the platform. And then it opens up, in your words, kind of like an eBay-type environment to where investors can go and look, right? and they start bidding and you stay in between. So you go out and visit the home. So are you a national company?

We are in 23 cities. Yeah. And mostly the major kind of NFL cities, if you will, not always, but mostly the bigger ones, kind of laying down hubs and then starting to spoke out around it. And you have representatives in each city to go out and view the properties in? We do. Yeah. And they're employees.

They're not 1099 contractors from in some inspection company. I mean, the inspectors are our third party. But our market experts is what we. we call them. They're the ones visiting the home. There are employees. And then as an investor on the platform, you get assigned an investor advisor. They're all local to your market. They all likely have been very large investors in your market. Like many of them have done hundreds and hundreds of transactions themselves and then wanted to do things a little differently and join Sunday. From an investor experience, once that listing goes up, there's a couple kind of cool things.

A seller can accept an offer at any time. They don't have to wait for the auction to end. So that's always something to keep in mind is the sooner you can offer the better. The other thing, though, is we just released what's called real-time feedback. So when you make an offer right now on a property on Sunday, you'll instantly know if you're the highest offer or not. You know, if your willingness to pay $300,000, you may start at $2.75 and say, oh, shoot, $2.80. Oh, shoot, $2.85. Oh, wow, I am. Great.

Well, then here. And then the system will let you know if you're outbid and you can check your dashboard. And so you can kind of play with it a bit like that. But one thing we noticed was investors that could only buy one property or two or three at a time but wanted that we're interested in more than that on Sunday we're having a hard time knowing you know okay i made bids on two but there's another two over here can you just tell me if i'm going to win these or not because these other ones might expire before these ones do and then i'll have lost out on opportunity so we introduced that real time there's so much cool opportunity

for an auction environment we're just in the early ending so we're going to have so many cool features come out great so that was that was kind of my question and kind of you touched on it as far as what's, we now kind of, I got a good picture of what the experience is for the seller. So now when the buyer comes in, they're going to come in and any sort of vetting on the buyers at all. Do they have to have cash? Do they have to pre-qualify for financing? How does that work? Yeah, we, so they don't have to pre-qualify for financing, but they do have to validate, they go through a number of steps to validate identity. So there's email validation, phone validation, and then there's an experience validation process that we do in the background

on the LLC name. There are exceptions, but they're manual, and you have to talk to somebody if you're not an investor who can validate experience through entity names. And then that's kind of the process. Now, we don't currently offer financing, but we will very soon. And that'll be a fun process because, you know, it's exciting to go to a place now that has consistent, steady bedded inventory. It's another to then say, well, but I still have to go coordinate with my lender who

wants to get access to the property, who wants to, well, you guys have already had access. And you just give me the loan. And the answer is, you know, very soon going to be yes. So you don't have to coordinate with anybody else. It's win the property. Hopefully you're already qualified, if not qualify. Know that know exactly what kind of financing you're getting. And then know that financing will never be your delay.

You know, one thing we've, so over 50% of all of the delays in our closings are the hard money or private lender. It's not the investor. It's not the seller. It's the lender. So like we want to take that uncertainty out of the equation for customers and just offer financing. So we'll do that for insurance and all sorts of other things in the future too. Great. So when coming in, so every buyer, do they have to go through this process?

They do. Okay, so it's not just open to the public with regard to competing against the whole country. No, no, definitely not. You got to go through the process. And, you know, in certain markets, we very much gated it because, you know, in Atlanta, where we'll service 60 to 80 properties or more a month, where we have a thousand or more investors. At some point, you don't need more investors.

And actually, it's dilutive to everybody's experience to have more. So San Diego is another good example where we just have more investors than we need. So you may get weight listed in some markets, but we've entered of the 23 we're in. We've entered 19 of those this year. You know, we spent two and a half years just getting four right. And now we're in. So I'd say there will be a gate at some point. There will always be a gate.

You have to qualify. And at some point, we'll say, look, the line's too long. we don't want a bunch of people making offers and never winning. So we kind of got to balance these things. So it really is a true, you know, off-market experience for the seller and an actual off-market experience for the buyer as well. It is, yeah. Yeah.

Okay, I'm seeing that. Good. All right. So what's the, do you have any sort of stats on what's average days on market or days on off-market? We run all of the homes are on a five-day auction. So some of them, and I don't have the stats offhand, the seller agrees to end the auction early because they've gotten a fine price. I don't know what percentage that is. But, you know, there and then I think it's within a day of the auction ending.

There's a decision that's made or a day or two. So, you know, it's usually from when you see a home on the site to when you'll have a decision, it's usually about seven days. And then the process from there, I mean, it can be as fast as 10 days. and it can be, you know, as long. Some sellers want 60 days to move out and get their stuff together, but that's very clearly, you know, made, that's made clear on the listing, how long, when the close of escrow is. So, yeah, so I don't know if that answers your question,

but that's what we're seeing. Okay. So to sell a property on your website, do you have to be the owner on title? Yes, absolutely. Yeah, that's actually one of the things we, one of the first stages of vetting for the seller is, do you own this thing?

You know, we don't want to get in a situation where we're dealing with a tenant, or a sibling of the owner or a daughter. I was thinking more of an investor that has a property under contract. Oh, oh, it has a property under contract. No, if you're an investor, though, that owns actually one of the, probably, I definitely won't say lion's share, but like, I don't know, a meaningful double-digit percentage of our sellers are landlords who are just tired of owning that home.

But if it's sort of like a wholesale situation, we haven't, we don't allow that. But if you bought the property recently and you decided, I just don't want to renovate it, maybe another investor could take it. You absolutely can contact Sunday and sell that property with us. Okay. So maybe it wasn't a wholesaler assignment, but any room for, say, double or like using transactional funding and doing a double close, anything like that? No, not at the moment. We want to kind of keep it to the investors that originally really did want to own the home and

paid what they thought was a fair price to the seller. And then if later they realized, you know, hey, too many projects, my contractor called me or I had a liquidity crisis that I needed, that they can still sell the home. But we don't really want to be a place where you could buy the home for artificially a low price and then quickly make a rip. So we're trying to kind of combat against that a little bit. Sweet. Okay. Yeah, just checking because I just know who the audience is. So I wanted to see like where they can get in and how they can benefit. So it's primarily as an investor looking for a deal, whether that's going to be a fix and flip or a buy and hold. right. Absolutely. That's right. Perfect. And if they wanted to do that, they would just go to Sunday.com and I think there's a little investor tab and they start the process of applying there.

There is. Yeah, exactly. Sunday.com. There's an investor tab. You can go to Sunday.com forward slash investor. And you know, you can sign up. Most people, all the validation is done behind the scenes through APIs that we have with some data providers. Most people you're able to sign up, be fully validated and then get access to the site. A fraction of people, you'll need to talk to an investor advisor before. But yeah, we're in 23 cities, all across. across the countries and opening more every month. So we'd love to have your listeners sign up and give us a shot. Great. Perfect. All right. So before I let you go, I've been kind of resting and taking it really easy and been very lazy the last five or six weeks. But I couldn't help but see the headlines over and over and over again with the Zillow issue and how they stopped doing this or doing their instant buying.

I don't know. Can you kind of shed a light on what actually happened there? and then how you are going to avoid their mistakes. Yeah, so I'm sure all the listeners know Zillow offers was an iByer, so they'd promise to buy your home for a price. And so they weren't like Sunday in the sense that we're a marketplace. You know, I think they are, here's my take on eye buying, and then I'll comment on Zillow specifically.

We all know that there's three ways to make money fix and flipping homes. One is instant appreciation. You buy the home for less than it's worth. That's their, the eye buyers, that's their fee. right, their seven to 12% fee. Then there's the second, which is forced appreciation. This is you put a dollar in and renovation, you get a dollar and a half, two, three out. That's what we all specialize in.

And then there's market appreciation. The market does the heavy lifting and it's worth more when you sell it than it was when you bought it. Those are the three. Eye buying takes that second one and basically removes it, right? They do little to no work. They're trying to buy homes that are fairly market ready and they're just trying to create a market, a market making function or liquidity function for sellers that already could sell with a realtor on the MLS.

Got it. So in that sense, we deal with a different category of inventory. But what I think about the eye buying model is when you remove that second component, you're left with two. Right now, we've been in the most successful bull market. Any of us have probably ever lived through in real estate, even, you know, to run up to the last crisis, frankly, the 20% year-to-date appreciation. It's been ridiculous.

So here's what happens is HPA goes through. through the roof, these ibuyers can justify a slightly lower fee. So we've seen them go from, you know, nine to seven to six to five, and they're still in 12 in some markets. But what happens when that starts slowing slash going flat slash going down? The fee they charge has to go up. And oh, by the way, and I'm sure most of us know this, they still aren't making money on every home that they're buying.

They're still underwater. Even the best ones are best, if you want to categorize them like that, open door offer pads still losing money. So I've always been dubious at the model from day one. Because when you remove the forced depreciation piece, you have a little bit left. Market appreciation is very hard to dictate. And then this fee is just at some point going to have to go so high there. No seller is going to see the value.

So I think as scary as I buying, I know has been to a lot of us, the prospect of being competed with with venture capital and all these loss making businesses and all this. I think that thesis on buying the asset is coming home to Roos that it's going to be really hard to buy the home. and create a market with homes that don't need work. For all of us, here's why I never see an eye buyer stepping into our business, homes that need work, is because it is impossible to predict what the right level of renovation is to get the best ROI, et cetera. No national companies ever going to across the country be able to decide that on every single city.

That's our advantage. We get to decide how much is a home, a cul-de-sac worth, a partial ocean view, how much is a fourth-bedroom worth, a third bathroom, an ADU. That's what we know as investors. in San Diego specifically or in LA specifically, maybe a region, but try to know that nationally. Good freaking luck. So I know an eye buyer is never going to work in the 13% of homes that trade to investors every year. I buyers are never going to work in that category. So I think that's where our marketplace thrives is when there's subjective inputs to pricing, the marketplace says,

well, then we need a lot of people to tell us what those inputs should be. And somebody may say $40,000 for this deal and then it's going to appreciate 6% in the next six months. Somebody may say, no, I need to put in 80, but it's actually going to appreciate 13%. And the marketplace allows us to sort of find that highest willingness to pay. And it'll never be an institutional buyer, at least on the assets that we specialize in. And then Zillow, dude, Zillow just, they turned a marketing tool, right, a marketing ploy, Zestimate, into a fundamental piece of a asset-heavy, low-margin business. And they blew it.

I mean, the incentive for the Zestimit as a marketing tool was overestimate the value of the home? 100%. Right? Everybody knew it. Right? We always, we always deal with homeowners who are like, well, my Zestimans says and we're like, a Zestimates not right. So you deploy that as the model to the single most important assumption in fix and flipping, what's the home going to be worth? And you're screwed. And then you go too fast. And we saw the article about the operation catch up, right, which was catching up with Open Door. And you start, you start doing, making missteps and hiring wrong people and overpaying for homes. So, got it. Plus, you've also got the experience as a real estate investor in the background.

I think that's invaluable. Oh, yeah, yeah, right. Well, thanks. Yeah, that's, it's the one category of businesses that I think Venture has been done really poorly with is real estate because it requires an intimate understanding of transaction level details and incumbents. Like, why are things the way they are in Fix and Flip? Why is it highly fragmented?

Why are local players better than national players? If you haven't been doing the business, good luck. You know, you're going to build the wrong thing. Yep, for sure. Well, super. Josh, it was a pleasure. I'm much more clear about what you do and what you bring to the marketplace. So, congrats on what you've built and I see really great things ahead for you. What are you most excited about in the future? Frankly, I'm most excited about some of the new tools and services that we're going to bring to the property investors.

You know, we standing up the brand and the targeting and the messaging and channels. We spent a lot of time focusing on how to find sellers. I got to be honest. And that's why when you go on the marketplace, we all do. Yeah, yeah, we all do. But, you know, since we have to really be good for both, it hasn't been until the last six or nine months where we really started, you know, layering in a better experience for investors. Things that, you know, like the real-time feedback I just described that we recently came out with,

they were going to come out with so many cool things like that. But bringing a better lending solution, a cheaper, easier to coordinate, more costs, you know, just less brain damage, bringing in like insurance products that are tailor-made that aren't built by, you know, the national insurer who just decided they wanted the property investor products. I believe there's a different title insurance product that needs to be built for investors. There's a different risk profile with a quick flip than there is with a, you know, seven to 10 year average homeowner hold in the property insurance business, sorry, the title

insurance business, but we want to create that. The last thing I'll say is we don't all need properties every day. We don't need loans every day. What we need is education and insights. And, you know, you'll see us start focusing more. and more on that where you come to Sunday as a daily habit, not to look at the inventory. Sure, that's great, but to like courses and curriculums and how do I get better and what's the market doing and that sort of thing. So we don't offer any of that today. And, you know,

that's a big miss and we're going to step it up on that. Perfect. Yeah. What's the thing? There's no bad investments, just uneducated investors. Yeah, that's right. Well, great. Josh, it's been a pleasure. And let's stay in touch. All right. All right. Cool, Matt. I really appreciate you're having me on the show. You bet. You bet. Yeah, so you want to learn more about Sunday.com. Go to sunday.com. That's S-U-N-D-A-E.com.

And there's an opportunity there for you if you're looking to sell your house off-market. And there's also an opportunity for you to buy investment properties, either to fix and flip or do hold as income properties. Thanks for sitting tight while we pay our light bill. We'll be back right after this. With Amex Platinum, $400, and annual credits for travel and dining means you not only satisfy your travel bug,

but your taste buds too. That's the powerful backing of Amex. Conditions apply. Hope is not a financial strategy. Let's get back to work. We're going to talk today about condemned houses and how to buy them, because according to the most recent figures,

there are millions of vacant homes in the United States. So this is a little bit out of my expertise. I was just thinking about this. I can't believe out of the thousands of properties that have purchased over the last decade. I have never bought a condemned house. And so what I did is I invited my buddy who buys condemned houses regularly. And I'm going to pull out from him all of his secrets. So please help me welcome to the show, the family-oriented entrepreneur, Mr. Jamel Gibbs.

Jamel, welcome to the show. What's up, man? How are you? Good, good. You're looking good. You staying in the gym? I have a gym right on the other side of this wall. You just got done is what you're saying.

Very good. Well, good to see you again. And, you know, I love your YouTube channel. I love what you've been doing lately. Production is really high, buddy. So you're doing a good job over there. Yeah, man. I appreciate that, bro.

It's a lot of hard work. It is. No, shoot, I've got one of those channels too. And I saw what you're doing. I was like, oh, gosh, she's a, I got to step my game up. So you're doing good. Just real quickly before we get into condemned houses and how to buy them, what's your impression of the housing market at the moment?

I think buyers are paying more than what they should. but I think the market was due for something like this, and I'm excited about the market, to be honest, man. I think there's still a ton of deals out here to be found. There's still a lot of money to be made, and I think if you're not scared, you can make a lot of money as well. For sure, for sure.

Well, what do you think so? That's what it is right now. Where do you think it's going? It's hard to say, man. I mean, we really don't have a crystal ball, but to be able to help you. Huh? I thought you had one of those.

Oh. honestly man i think i think it's going to continue it depends on what happens what is it january you're supposed to be raising a mortgage rates or something like that i don't think that's really going to affect it may slow things down a little bit but i don't think

there's going to be a crash or anything like that i think it's you know it's just going to continue to the valleys of homes are going to continue to go up yeah but uh you know that's all speculation at this point right but it almost isn't, to you know, if you talk about a crystal ball, if you just kind of look at any part of the economy when you're looking at supply and demand, we got more people than we got

houses and we're not building the houses fast enough. True. Very true. And really, like what you were mentioning, the interest rates is probably the only thing that could stop it from appreciating. I don't think that's going to stop it because, I mean, it depends on what the interest rates are, but I think the values of the homes are going to continue to rise over time. I think we're in for this thing for at least a couple more years. Easy. Right. The National Association of Realtors just came out with a study and they said,

we are so far behind in the typical number of houses that we build each year. Like we're not even close to what we were building in 2004, 2005, 2006 before the big crash. We're not even close to that. We'd have to get to that level and a little bit above it and maintain that for a whole decade just to normalize the market. that's insane man so you know my personal residence went up what 40%

for the last year it's going to continue to go up I think it's a great time like I just bought a rental property what three weeks ago and right around a corner from a condemned house that I'm about to purchase but bought that property three weeks ago I got a future value appraisal on that before I bought it

back in October it already went up. I mean, it's crazy, man. I'm loving it. I'm loving it. Yeah, no, I mean, if you own houses, if your property is a great, it's a great situation. If you're trying to get that first one, I guess a retail buyer looking up for your home, but that could be a little bit of a struggle. But you know what?

You really just have to make the adjustments according to the market. And so normally, like this house that I just bought as a rental, I bought 75,000. house, okay. Numbers are different, you know, in California and stuff like that, obviously, in New York. But bought the house, well, actually, I bought it for $73,000 and I got a $120,000 appraisal on it. If you look at that house two years ago, I probably would have paid $40,000 for it. Right. So you just make the adjustments. That's all you're doing, you're adjusting according to what's happening in the market and just making educated, educated decisions based off of what recent happened in the market.

Because if you go, if you base your numbers off of, let's say Zillow, for example, you might be priced out of the market. You won't get any deals. But if you have good data, which real estate investing is all about data, right? If you have good data and you know what's happening in the market, you can make a ton of money. I bought that house at, what is that, 60 cents on a dollar minus repairs. You know, the house only needed 10 grand. Mark. But the point is there's still a ton of money to be made as long as you make the adjustments

according to what's happening in the market right now. For sure. For sure. You know, and when you say that, there's a difference between what happens on market and what happens off market. Right. You know, the media and you're always going to be hearing about on market stuff, right? We deal very regular, not very regularly in on market. We're always looking for off market. And what's happening there is a very different thing that's happening than on market. And that's as real estate investors, we're looking for those off market opportunities. You know, we're looking for distress. And we're going to talk about, you know, the properties themselves being distressed.

But we're also looking about financial distress and personal distress of the owners of those properties. Yep. And, you know, as we're coming through starting, I guess, with where we're kind of finishing maybe our second year of pandemicness, right? And there's a lot of distress out there right now. And a lot of the people under distress own property and they're in a situation where money is going to help them out of that distress. And they're going to start turning to their assets for that financial relief. And a lot of those funds that a lot of them are going to be turned into those houses. So yeah, you're absolutely right.

A lot of good stuff coming. A lot of good stuff, man. I can't wait. So I'm doing it. Right. Very good. I'm rubbing my hands together. Yeah.

I mean, if you were going to pick a business to be in, You want to pick in a business where the supply and demand is so off balance and you are in control of the supply. There's not a better, more stable business to be in. And if what that report said is true, if that's going to be the situation for at least the next 10 years, then boy, financial freedom for everybody that gets involved, right? Absolutely, man. For sure. I can't wait.

And I'm looking forward to this conversation, brother. Yeah. So let's get into it. What we're actually here to talk about. We're going to talk about condemned houses. And I wrote some questions down here. So let's just start with this. What is a condemned house?

Well, it really all depends on how you look at it. So a lot of people have different definitions of what condemned real estate is. And when you think about a condemned house, you know, what really comes to mind? A house is boarded up, needs to be knocked down, a lot of work needed. But it's not necessarily true all the time. I can find a house where. you know, there were taxes owed on the house and the owner just didn't pay them and the municipality took over the property and now the property is condemned, right? I can find a house that

had code violations and just weren't, you know, the owner wasn't paying on the code violations and the municipality takes back the house and now the house is condemned. So you can have, there's two layers of distress, right? You have, physical distress where the property actually needs some work. And then you have financial distress, which is basically exactly what we just explained, where you have a property owner that they're just not paying their bills or they're just not taking care of it. You can also have interchangeable distress as well where you have a property owner that's getting cold violations because the property needs some work and they're just not paying the bills either. So,

That's just, we call that stacking, right? Right. So there's multiple layers of distress, which can lead into a condemned, a property being condemned at the end of the day. But as soon as the municipality takes back the houses, if they don't pay the bill within a certain period of time, they deem it as condemned. Eventually, they'll probably knock it down or try to sell it. Got it. So that's kind of what I was kind of made my lead into the next question. what happens when a house is condemned?

And you kind of probably already explained it. But what's that process look like for when what does that mean for the actual owner? Yeah, so basically all it means is the the property owner has a certain amount of time. If the property is condemned, the property owner has a certain amount of time to catch up whatever payments in order to get the house back. It's kind of like a foreclosure. But the difference is the city is taking the property. And obviously it's going to differ based on a municipality as well. But ultimately, at the end of the day, it's kind of like a foreclosure process.

The difference is the city is taking a property back. And then once they take it back, you do have a certain period of time. They call it a redemption period in foreclosure real estate. I'm going to call it a redemption period because I honestly don't know what it's called when the municipality takes it back. Right. But you have a period of time to catch up. If not, they'll eventually knock the property down or keep it or whatever. Okay.

So almost like how maybe a tax lien type thing works, right? You've got a certain period of time and then eventually they're going to come in and they're just going to take it from you. Yeah, pretty much. So now the city owns the house. Yeah. And if your property is, let's say that you have an inspector come out of property and there's a huge hole in a living room floor and a property is not livable, they're going to take it back. that will not take it back, but they're going to take it from you. Or if you can show that you're making the effort to make the repairs or you can show a

contractor's estimate or something like that, they'll give you a period of time in order to be able to get it done. So, well, I'm not going to jump ahead, but I was going to jump into someone, when someone like me comes around and I'm contacting the city in order to see what they have on. They literally have a list of these properties and they'll let me pick and choose. and as long as they can get, they can redeem the amount that they have invested into it, I can get a great deal.

Great. So that was leading into my next question. You said you weren't going to jump, but you did anyway. No. So that's my, is that the only way to find condemned houses? How do you find the condemned houses?

I usually contact the city. To me, the best way to do it is the dude driving for dollars for a couple of days, right? Go to areas where you're probably going to find condemned houses. houses, right, which is they can be anywhere, really. But then once you find a property that says, you know, condemned on it, they'll usually have a sign or something on a door or whatever the case may be, right? As soon as you find that one property, there's usually an officer, well, an inspector that's working that entire area. So I actually did a video on this where I actually

called the inspector up and started a conversation with that particular inspector for that area. And there's going to be different inspectors for different areas. So you want to drive different areas. But for the most part, for the most part, what you want to do is find out who's in charge of inspecting properties in that area and get on their good side so that they can start sending you some leads. Right. It's all about relationships still. That's it, man. So I'd imagine that you're not the only person that knows that they can just go into the city and ask them for a list of condemned houses, right?

I have no idea. I'll tell you this. A lot of people don't know about it. I think the harder it is to get a lead, the harder it is to get a deal, the more money you're going to make. And the easier it is for somebody like me who's willing to put in a little more work. Right. I'm actually dig into it. I'm going to be able to get more consistent lead flow in deal.

Less competition is going to be. Exactly. Yeah, the more difficult it is. I always thought about that too. If it's really easy, then everybody would be doing it. Yep. So it's essentially, is it first come, first serve? Or is it the relationship?

I'll be honest. Usually when I, when I'm putting an offer in my local area, I'm talking about this area here, when I put in an offer, I usually don't have any competition. Again, it goes with the, the old saying that, you know, the less competition you have, the better position you're in. For sure. For me, I personally, I don't usually have a lot of competition at all.

You know, if the city is asking for a certain amount, if it falls within my numbers, I'm going to buy it. I'm not even going to have another buyer lined up to fit against me. So to find these properties, you can go down to the city. You can drive for dollars. Are there ways to pull, like, marketing lists or anything? Anything like that? Are there sources for that? Yeah, you can pull these leads based off of, you know, software and stuff that you use.

You know, I don't want to give any shameless plugs or anything like that, so I'm not going to. Please be shameless. This is a shameless show. Like, I have a software and a partnership with a list company. And within my software, I usually pull them. But to me, the best way they find the leads is way before. the list companies will even have them. So if you go direct to the source, again, drive them for dollars.

So here's a really good way to use your time better and find really good deal. So if you have an appointment to go see another house, or, for example, I drove that area because I have a rental property that we're renovating right now to get rented out, drive the area. So if you have an appointment with a seller, arrive, let's say, 50% or something. 15 minutes before and the area drive the area and then do another drive around 15 minutes after on some other streets. That's good use of your time. I'm not going to sit.

I'm not going to use a Saturday morning to drive around for two and three hours hoping to find something. I'm going to use the time where I'm actually driving to a seller's appointment to see a property to get a contract and hopefully pick up another property while I'm there. So to me, that's better use of your time. Sure. than wishful or hopeful thinking with driving for dollars randomly. Right, right.

So now that you found the house and you said when you submit an offer, who are you actually submitting the offer to? So you're going to talk to the inspector. And there can be different people, but you're going to talk to the inspector. You're going to tell them what you want to offer on the property. And then once you tell them what you want to offer, you'll submit the agreement and take it from there.

just a normal closing process where you go through an attorney. Well, in my state, we go through an attorney, but in other states, you might go through a title company. So you're submitting the offer to, not to the inspector. Like, who's actually on title? Who owns it? Who has the decision-making power? So, yeah, the inspector will basically be your go-to point,

and they're going to get you in contact with whoever is in charge. Like, whatever department is in charge of it. Usually, for me, I'm talking to the inspector. And they're going to get you in charge. They're going to get you in contact with whoever is in charge. of taking, so normally it's going to be an attorney. That's going to take over from there. So can it be different properties, have different types of people

or different departments in charge? Yeah. I mean, it just depends on the area, the municipality. So this is something that, you know, when I was in Pennsylvania, it was done differently. And it was a little more difficult in Pennsylvania when I lived there. I've been here for, what is this, for seven years now. It's going to be eight years.

I've been here in Carolina. North Carolina. Yeah. So here it's just done differently. So what you got to do is figure out how it works in your area. I would, again, start with the person that's putting the liens on the property and taking them back. And then follow that rabbit hole from there. Right.

So rabbit hole is probably a bad way to phrase that. But it's true. You're going to dig to figure out who's doing what in your area. and then just get in contact with the right people so that you can get the properties that that you need. Okay, so I was watching one of your videos, and I've seen this in neighborhoods as well, where there'll be like a notice. Sorry, man, I just fucking my laptop.

Oh, you run out of battery? Yeah, I forgot to plug it in. I'm sorry. No worries. We didn't lose you. So I saw in your video, and I've actually seen this myself where there's a notice posted on like the door on the property somewhere. If you were to see one of those,

what type of information is useful there? Is the inspector's name on there? Like how do we find the inspector? So I'll give you an example. I actually took a picture of, I don't know if you're going to be able to see this or not, but when I did that video just a few weeks ago, as a matter of fact,

I randomly shot a YouTube short and I said, hey, you know, if you see any of these properties, yada, yada, yada. And I got some really good buzz on it. So I said I might as well shoot a whole video on it. and when I took that picture, if I could find it, the first thing I noticed was the inspector's name and contact phone number. That's all I really wanted.

I wanted the inspector's name and contact phone number. So now I have a point of reference, right? I can contact somebody. Okay. You'll get more information to follow that rabbit hole. And usually it's the inspector anyway. So I can, I'm not sure if I can pull it up or not, it's probably going to take me forever to pull it up.

But the whole thing is, usually when you see condemned property condemned or let's say a yellow or pink slip on the door usually the yellow slip and the pink slip is probably going to be the water company they're going to shut the water off or it's going to be the codes office right but then the next person that's going to come around after a period of time it takes months right the next person because they give you some time to be fair the next person that's going to come around is going to be that And once they inspect the property is going to be deemed condemned. I'll give you an example.

I actually shot that YouTube video in front of this house right here. I'm not sure if you can see that or not. Yeah, it's a little blurry, but that can make it out. You smiling in the front. Yeah. That's the house in the background. Got it. Yeah.

So that house there was actually in decent shape. I looked in the windows and everything. It wasn't like that house was falling down by any means, by any stretch of the world. I could see that the roof probably needed to be replaced. But other than that, the property, I could put somebody right into that house with maybe $10,000 worth of work. But right there on the window, that's the property condemned sign. Right.

So right underneath the word condemn, you have all the information that you need. You got the person, the inspector's name, as well as their phone number right there. And that's exactly how I got. contacted this person is a inspector is L. Rustin and then he provided their phone number right next to it. Shout out the rest and shout out the rustin check it out so the date that they first visited this property was June 30th of 2020 and it was vacant they ordered it to be vacated immediately so this property's been sitting there for well just about a year and a half and it's still condemned So this is on their list.

They want to cash out of this thing. And it takes people like you and I to contact them and say, hey, I want to purchase that property. What do I need to do? So it's that every year and a half and nobody. Nobody, because nobody's looking for it. It's not on somebody's list yet. You know what I mean? I don't know how long it takes to get on someone's list.

I'm not an expert in that regard, but I am an expert in contacting people to get them to sell their houses. Right. So I'll find out. And, you know, thankfully I was able to get in contact with this person and take it from there, man. Perfect. We're in negotiation right now. It's been about a month. Okay.

So it takes a while. It's a little bit more of a timely process then. Yeah, because, I mean, you got to remember you're dealing with a paid employee. Right. Who works for the city. They're not eager to, they're not making a commission on this. Yeah. They're getting their paycheck either way.

They're going to contact you when they get back to you and stuff like that. But this is a new relationship that I was able to build. And if, you know, I'm not sure if it's legal for me to kickback. Well, I don't want to use the word kickback, but refer, I provide a referral fee for 500 bucks. I give them 500 bucks. They'll probably send me to me a whole lot more deals before they even hit the condemn list. There's some way that you can scratch each other's back, right?

Exactly. Perfect. Let me buy your dinner for you and your wife at Ruth Chris or something like that, you know. Yes. I'll give you a 500-old gift card. for Ruth Chris. Yeah, that's right. I'm sure you'll have some change, right?

So, okay, so you go ahead and you submit this property or submit the offer, you get the property, it's under contract, it goes through a traditional close, as you were saying, through a real estate attorney in your estate. So what is your typical exit strategy? Do you have the ability to wholesale the property or do you plan on fixing it and then flipping it or is it something you're using as a rental? I mean, really the sky is the limit with exit strategies. I can do it.

I would want to take it down with cash. Obviously, I'm not going to assign something like this. Just to say, because if the city sees, hey, this guy just made, you know, 10 grand extra, I just don't want to create any negative, a negative vibe with the city, right? So what I want to do with these types of deals is double clothes on them, right? If I decide to, you know, based on the price, I can rehab them. I can take them down and keep them long term. The thing is you're going to need some type of cash, right, in order to do that.

But for someone that's just getting started with something like this, I would recommend building up your nest egg through wholesaling. So you can find someone to fund the property for, let's say, $500 to $1,000 to $1,000, usually $800 for a transaction funding. And then once you, you know, as long as you can show that you have a buyer on the other end, You can go ahead and let's say you buy it for 50. You sell it for 70. You pay $1,500 in closing costs and a difference goes in your pocket.

Now you have a little something that you can take and be able to build on. And you put a nest egg together and be able to start doing some bigger projects. That's what I would recommend. Something like this, you can't go directly to the seller per se unless you catch them before it's actually condemned. Right, right. where you can negotiate some hybrid stuff where, you know, some creative real estate investing, which is one of my favorite ways of buying properties and yours, Matt. Yep.

Right? And, uh, but once it goes to the city or once it goes to a bank, you know, you're going to lose a lot. Almost all those options are gone. There's money involved after the fact. Right. But you can still wholesale them. There's plenty of money out there.

If you need money, contact Matt or I. And, uh, we'll fund it, you know, and take a fee off the top, right? That's right. The whole thing is, you know, you're limited on your options and on the creative side, but the world is your oyster on the wholesale rehab, you know, maybe Burr. If you're a fan of the Burr strategy, that's a great way to pick up cheap properties with a ton of equity in them and cash out. You know, just the world is definitely open to you when it comes to exit strategies. When you pick up a property like this, I hear the word condemned, I'm just thinking like a total disaster of a property.

Right. Is that always the case or they vary significantly? They vary, man. And that kind of goes back to what we were saying earlier today where you can have a physically distressed property, which is, you know, it's boarded up. It really is a condemned property. Can't live there. But then you could have a property where the water bill wasn't paid for two years. You know what I mean?

and that can be considered condemned at that point as well because the property owner is getting kicked out. Right. And now the city is vacate. And once the city takes ownership of it, it will nine times out of 10 be considered a condemned property at that point. Super. So if someone was listening to you right now and decided, hey, I want to give that a shot also, what would you say are the first three action steps they should take? I mean, first and foremost, man, you got to find the properties, right?

So how do you find the properties, drop around some neighborhoods where you're already looking for real estate and just be mindful of condemned signs on houses. Every single municipality has them. I just showed you an example of what it actually looks like. Chances are it could be different where you're located. But if it property looks vacant and has signs all over windows and doors, you need to take that address. Second step would be the contact. contact the person that's on that particular sign and start digging to find that rabbit hole. Let them know that you want to purchase this property.

You understand it's condemned. Find out if there's a date where they're actually going to knock the property down. Let them know that you want to save the property. Even if it's not in bad shape, they'll still knock the property down. So find out if you can save the property. And once you find out if you can save the property, make your offer. Right. The key with this is just to be consistent.

It takes a little bit of legwork, but less competition means more profit for you at the end of the day. For sure. And, you know, so, okay, so let's recap real quick. The first step is to go ahead and just basically keep your eyes and ears open. I mean, you're driving through your neighborhoods, working your neighbors already. It could be when you're taking your kids to school. It could be, you know, you're on your way to the park, wherever you're doing.

Just keep your eyes and ears open for those signs on the properties. Second is once you locate them, step up to the property, read that sign, and get the inspector's name and contact information, right? It's number two. And then number three would be, you know, submit the offer. Submit an offer. Some times you got to be persistent, contact and an inspector. That's the hardest part, really. But once you're in contact.

That's the way all marketing is, right, Jamel? Pretty much. Follow up. You got to be consistent, persistent with all that, right? That's right. That's right. And a follow up, man. That's right.

For sure. And one thing that's really nice about this strategy is there are, there's no marketing expense. Yeah, zero. You're going to spend a little bit of money on gas. But that's a lot these days. So it's four dollars. I couldn't believe because I, you know, I have a, well, I have to put 93 in both

of my cars. And man, that gas here, I've never seen a four dollar. I'm not even going to talk about it, man. It's just, it's, it's right. You ain't been to California, so that's probably it. Yeah. And New York is north of $5, man. Yeah, they hit five bucks in California as well.

Yeah, my wife is out in Cali right now for a few days with her mom getting cancer. Her mom's getting cancer treatment in L.A. But yeah, the gas out there is crazy, man. It is. Hopefully the whole thing's going to turn around here shortly. Yeah. But, Jamel, if someone wanted to get in touch with you, what would be the best way for them to do that? Hey, man.

First off, I appreciate you having me today. I had a lot of fun doing this, man. It was really random. And yeah, if you want to get in contact me, the best way to do it is on YouTube at Jamel Gibbs. And that's the way to do it. Yeah, and I appreciate you coming on the show. It's really funny.

Like, the way that we met was kind of randomly. Like, I felt like I already knew you. Yeah. And I started talking to you. And I was like, you know what? I don't think I know him. I don't think I've ever met him before. But it's just kind of like, all right, we're friends now.

And then it's been at least two years now. Yeah. We were at that event in Tampa. Yeah, it was two years ago. That's right. You and then we were in a gym together in that hotel. I was actually at that hotel at the last event that Matt held. I missed the last one.

I was under the weather, so I couldn't make a trip. I'll be there for the next one. You'll be there for the next one. I will. I will. I'm going to try to be consistent because I'm not good at getting out a lot, man. I'm a family. I'm a homebody.

I like to stay home. I don't even have an off-oriented entrepreneur, as you say in your videos. That's right, man. Family-oriented entrepreneur, man. I like to stay home. I actually work right here in my office at home. The only time I go out is really to take my wife out somewhere or go to the supermarket or something. Mm-hmm.

Something with the family. But everything is done virtually, man. Literally everything. My in-house, my calls, everything is done virtually through someone either in-the-state or overseas. and my businesses are run 100% virtual, man. So I love it, except my contractors, myself that I have going on locally with rehab and stuff like that. Let's do this again.

And we'll talk about how you've kind of outsourced all this nasty work that we all have to do as real estate investors. Yeah, man, it took years, but I was able to do it, figure it out, man. And I'm happy to spend a good five years where I've been pretty steady with it, man. So, yeah, I'm looking forward to that, brother. All right, we'll come back and we'll talk about that next time, all right? Sounds good.

I hope everybody benefited from this information, man. I know there's going to be a lot more. We could have delve into a lot more probably, but maybe we'll do that in another segment. We'll make this a recurrent thing. Cool, man. I love it, brother. All right, cool.

We'll be back with more right after this. Canada can be a global leader in reducing the harm caused by smoking, but it requires actionable steps. Now is the time to modernize Canadian laws so that adult smokers have information and access to better alternatives. By doing so, we can create lasting change. If you don't smoke, don't start. If you smoke, quit. If you don't quit, change. Visit unsmoke.ca. Mainstream media is ripping us apart. This is news to bring us together and make some money in the process. The Biden administration announced last week that it is

looking to expand reporting requirements on all cash real estate transactions. The announcement came via a U.S. Treasury Department notice seeking public comment on this potential regulation. According to the Biden administration, the aim of this regulation would be to crack down on individuals using the U.S. real estate market to launder money made through illicit activities, which the administration views as a vulnerability in the real estate market. I'll just keep my mouth shut on that one, and you can determine whether that's a valid priority and a good use of resources at the moment for this beautiful country that we live in. Home prices have started to show signs of easing up as the S&P Core Logic K-Shiller National Home Price Index rose 19.5% year over year in September,

down from 19.8% the previous month. The 10-city composite increased 17.8% year-over-year in September down from 18.6% in the previous month, and the 20-city composite climbed 19.1% year-over-year down from 19.6% in the previous month. canned meat is the food trend you've been sleeping on. Spam sales hit a record high for the seventh year in a row. the CEO of Parent Hormel said, and Spider-Man, No Way Home hits theaters on Friday, and Tiger Woods will play alongside his son at the PNC Championship on Saturday the first time he's competed since a brutal car crash 10 months ago.

It's not a passing bad. It's the future of money. What happened this week in cryptocurrency? A virtual plot of land in the online world of DeCentraland has sold for a record $2.4 million worth of cryptocurrency. The 116 parcel estate located in the heart of Decentralands Fashion District was acquired by Metaverse Group, a subsidiary of Tokens.com, a publicly traded company which invests in revenue generating crypto assets linked to decentralized finance, non-fundible tokens or NFTs and Metaverse Real Estate. And just a heads up, we're going to be talking a lot more about Metaverse real estate in the new year as it is becoming a very viable form of real estate investing, even if it's not, quote unquote, real. An NFT owner made a mistake that

cost him hundreds of thousands of dollars this weekend, and it wasn't just going to a private liberal arts school. Max or Max not on Digital Marketplace OpenC meant to list a board ape NFT for 75 Ethereum, roughly $300,000, but accidentally typed 0.75 Ethereum, $3,000 as the price. And before he could correct the problem, it had already been scooped up by a bot. And despite having fallen by nearly 30% since its November all-time high, Bitcoin is in a consolidating bull market and on its way to $100,000, according to a Bloomberg intelligence report. The paper said it is unlikely that Bitcoin's bull run has come to a halt and predicts the fixed supply to sustain increasing prices. And that wraps up the epic show.

And if you found this episode valuable, who else do you know that might too? There's a good chance you don't have someone else who would, and when their name comes to mind, please share with them and ask them to click the subscribe button when they get here, and I'm going to take great care of them. Alrighty, God loves you, and so do I. Merry Christmas, health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know, home world, we got the cash flow. Toronto is delayed 50 minutes. Oh, what? Sounds like Ojo time. Play Ojo? Great idea. Feel the fun with all the latest slots in.

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