Epic Real Estate Investing - Fix and Flipping with Matt Hedstrom | 928

Episode Date: February 14, 2020

In today’s episode, Mr. Theriault is joined with Matt Hedstrom, a real estate expert who owns and operates several construction general contracting and real estate rehabilitation businesses in the mid-west. Stay tuned as you will learn about Matt’s experience with short sales, how to find good contractors for fix and flip, how to estimate the price of repairs when purchasing a property, and many more!   Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-A's.com.

Here's Matt. Hello and welcome to the epic real estate investing show. Glad that you're here. If this is your first time here, glad you found us. And if it's not, welcome back. We've been here for, gosh, we're just going to approach our, actually just past our 10-year anniversary. And we wouldn't be here if it wasn't for you.

So thank you for sharing us with your friends and family and your network. And I love that about you. So thank you. All right. I got a great show for you today. Our guest is owned and current. operates several construction, general contracting and real estate rehabilitation businesses in the Midwest, and communities ranging in size from the Chicago metro area, mid-sized Milwaukee,

down to smaller communities in the middle of the U.S. And he started a fully automated wholesaling company, Sell Fast With Us.com, that sends out thousands of pieces of direct mail. He is currently working to create a real estate lending company that is scheduled to launch soon. And in addition, he is continuing to expand his rental property portfolio with his company, Tri-City Properties. I could go on and on about it, but I'm going to introduce you to him and let him brag on himself a little bit. So please help me welcome to the show, Mr. Matt, Headstrom. Matt, welcome to the Epic Real Estate Investing Show.

Thanks, man. Thanks for having me. It's an honor to be here. Yeah, I'm really glad that we're able to connect. We have a strong mutual friend. And he said, hey, I got to talk to you. And I'm just starting to read your bio. And it just goes on and on and on.

you've done a whole bunch of stuff. And so let's talk about that. How did you get started in real estate investing? What were you doing just before you got started with this? Yeah, no, I started. It was about a decade ago, maybe eight to ten years ago, when I was sitting in a Rhea in Milwaukee locally, and I was a vendor there selling cabinets and countertops.

And realized, you know, I had a speaker came through doing short sales. And it was a kind of went back that night and thought, man, wait a second, you know, I think I could do this. You know, this is, what is this real estate investing thing? So that was really the first purchase, the first course I ever bought. And I still a short sale course. Yep. Got it. So I own a short sale negotiating business and I really just operate as a consultant to that business. And so I love it. I still buy properties that I flip through that short sale business. And I just have, you know, negotiators that run that for me. And I love it. I love the.

But, you know, it's definitely a hardship that you're dealing with. It's a tricky, you know, part, you know, niche in the business. But I love it, man. I love closings. I love going and it's hugs and tears at the table. Nice. What does the short sale environment look like these days? Because it's really kind of what, it's not where I started, but it's where I really

started to hit my stride and seized a lot of opportunity. But then I kind of got out of it because the dynamics changed and it was a little bit more difficult to flip those. So if you find it. short sale. First of all, how many short soils are there still out there? Are there a lot? That's a great question. I'm in the Midwest here. So, you know, typically we trend from, you know, looking at California, you know, and coming across. So interestingly enough, even as a couple of years ago, short sales are non-existent out there, West Coast. Zero. Okay. Right. And now we were just

a couple of years ago just starting to like see, oh my gosh, inventory is gone, you know. And then like you said, you know, when you're a player, you're actually doing, you know, you're in the business still. You see that the deals aren't great, man. I mean, it's a lot of these went right onto retail that we would sell. Right. The approvals because you can't, you just can't buy them right and flip them. So, but now we're really starting to see that ramp. But East Coast still has a ton of inventory.

So it's very, it's odd because you'll find houses out there. I've got several. And we just talked about a guy out there too. before the show here, but they're still finding people that haven't been paying their mortgage for seven, eight years. Wow. Crazy, man. But I'm starting to really see the sheriff sales are ramping up big time.

So, and we're starting to see those pre-foreclosure lists. I actually have, just yesterday in my office, I had my entire team here, and I had one of my coaching students then, and we were translating our letters into Spanish because there's a large, you know, Hispanic community that got hurt last time, you know, got into these bad loans. And nobody was helping them. So we've just added that to our team as well just because, you know, they're starting to ramp up. So it's something to pay attention to, man. I wouldn't neglect it, you know, too long anymore.

Right, right? I mean, there's a, and there'll be a moment where we have more of them, right? And we're all predicting that coming soon. But here we are, what, 11 years on a good, strong run. I know, man. Really no sign of it in sight, tell you the truth. I know. We know it has to at some point.

Great. So like short sales, you find one and the same kind of process where you create this little packet and you submit it to the bank for approval. Is that how it works still? Yep. You got it. So, man, I just an hour ago, I had one of my guys that I'm in a mastermind with called me from Texas and said, hey, we got these shorts.

I've never done them. Like, they're all of a sudden popping up again. even down in Texas now he's seen him. And he said, hey, it's Mr. Cooper. You know, do you know anything about that, you know? And I said, oh, yeah, we do a lot of those. And I said, he said, but, and this is, these are the, this is what you're talking about, Matt. The processes have changed a lot, you know.

And so, like right now, like with Mr. Cooper, he said that the sale dates is in the first part of March, first week of March. Well, Mr. Cooper requires 37 days before the sale date in order for you to even submit a package. They won't even look at it. And so those are things that you have to know now going in. That long gone are the days where you could submit a cash offer the day before the sale and they'll postpone it. It doesn't happen. Different rules. What's the success right now?

Because when we got started, it was about 50-50. You had a 50-50's chance. It'd take about three or four months to get an approval. That was kind of the formula. And it certainly dwindled after that. But that's where it was really operating nicely. What does it look like now? We just yesterday, I sat down with my lead negotiator and we were at 98%.

No kidding. Well, here's the thing, though. We always get an approval. That is the banks, they will always give you an approval. It just depends on what is that BPO amount that came in. So a success rate is, look, I'm still going to do this for you, even though I can't buy this house. But what we do is we put it on the market. And it's a great deal for a retail buyer.

Okay. It's discounted. It's just not discounted enough. But here's the best part. For the last year, we've been putting $10,000 buyers premiums on those short sales on the open market. And so that's how we make our money and pay the negotiator and pay everybody off that that has been working on that deal. Sweet. Okay. So 98% that's good. The one thing that really kind of chased us out of the business were the deed restrictions. Do those still exist? They're fewer and fewer all the time. Fewer and fewer? Yep. Got it. Yeah. It's not an automatic every time now anymore.

Got it. It's not the Wild Wild West anymore either. Right. You're right. That was, it was a crazy time back then. Sweet. I've always wondered what it would look like out there these days. And now I got, now I know. So this was a self-serving question. Perfect. So what is your, what does your primary business look like? How do you acquire most of your properties right now? Right now, man, it's, I was like fully on direct mail for a number of years, but it's so saturated, man. People have, you know, stacks of mail, you know, when you get, it would begin houses. But honestly, right now, like for this is the first time I wanted to show our coaching students that, you know, I I just cut off all my direct mail and said, you know, I'm going to do exactly the things that I show you and teach you with no, you know, without, you know, really those no budget tactics, right? And so I've, for the first time ever, I've never bought off the MLS. I've never bought sheriff sale. And I've bought many properties in the last six months from sheriff sales. And which also tells me I need to get back into the pre-foreclosure game because the reason they're ending up in sheriff sales is because, you know, we haven't been able to help them, right? So I bought several that way, but honestly right now, and I think this is so true around for so many people, your networks that you're building are absolutely key.

Right. I don't see any better way to have properties continually showing up on your desk without those networks. Right. It's a people business, isn't it? It is. Yep. Relationships are everything. We could go back to see.

I kind of mentioned that I've been doing this show for 11 years. And I think on my first episode. I told people that start building your relationships, you know, and people want the ringless voicemail stuff and they want the direct mail secrets and they want the, they want all the secrets, right? And it's really a people business. You can't get around that fact. The trends and the fads will come and go, but the people never change.

It is so true, man. I love that. And I love watching people that get that because you know if you're out there and you're involved, things happen. It's inevitable. It's inevitable. Yep, yep. One of my,

who's my very first coaching client, and he's in St. Louis, and, you know, he was just kind of, just, I don't know what the word is to say. He knew nothing,

but he was really good. He just did exactly what I told him step by step. And I told him to do the direct mail and all that stuff, and it worked really well for him. I said, but while you're doing that,

build your relationships. Yeah. And he did. And he's why he's my most successful student to this day, and it happened to me on very first one. But it was just because he did what I said to do, right? And not that I'm the all-knowing person, but you can't escape the fact that it's a people business.

Right. Got to be coachable too. That's so great. Totally. Cool. So tell me about sheriff sales. What's the source of those? Does that like a county website with each state or city?

How does that work? Yep. Yeah. That is by county for sure. So, you know, you get in. It's funny because it's, people are intimidated. by them, but again, it's a relationship, again, is key. Just getting rid of fear, you know, and just just showing up and understanding the process. So, you know, I had, like I said, I had never,

never bought there before. And so I just went and started doing it. You get to know the players. And, you know, they're being fed by these, you know, the pre-foreclosures that people are buying lists for and mailing to and we're trying to get them for short sales. But, man, if it ends up on the courthouse step, I just, you know, you just go. You watch the process a couple of times. it's probably one of, and then this is the part that people don't understand, it can be one of the riskiest strategies out there. Right. Because if you don't do your homework, man, you're in trouble, okay?

Like if you don't actually, you know, at least go drive by the house, you know, we usually get into everyone and you don't see them. But if you're not doing a soft pull for title on that and seeing, you know, tax liens or whatever else is attached to that property, you could be buying a really bad deal. Right. Right. Right. So sheriff's sale and maybe you're in courthouse auction, are those the same thing to you? Yep. Yeah. Okay. I always think when you said sheriff's sale, I was thinking like the sheriff seizures. Okay. Yeah. Yeah. Yeah. Right. Yeah. This is courthouse stuff. Okay. And that's different from a tax sale as well, too. You know, it's a different.

Totally. Okay. So you go in person on the steps and you start bidding. It's an auction, right? Yep. Very good. And then how soon of a notice do you get, of what properties are going up for auctions so you can do that investigating. A lot of times it'll be a month. Okay, you'll get a month. All right. Sometimes a couple weeks, depending on the county. Okay.

Yeah, the last time I was doing auctions was about the same time I was doing short sales. And boy, you just had like a few days. You had to drive and hurry up. Right? So good. Well, that makes a little better. So to show up, you need cash, right?

Yeah, that's the other thing that keeps a lot of players out of the game is that, you know, you got to have 10% down. So and you also have to have the ability to close on that deal, you know, after confirmation to sale. So confirmation can be anywhere from, you know, 10 to 30 days and then you have 10 days from there to actually, you know, close that up. So that's the, that's why you have to have, again, let's say at relationship, you have to have private money that you're involved with because you've got to be able to pull the trigger

fast on any deal you take down, right? Right, right. Okay, perfect. So we've got, we're acquiring our properties through the, the auctions. we're doing still doing short sales. We've got our relationships and our networks going. What is the primary exit strategy? You mentioned like on the MLS.

Is that the main way you're doing it? For flips, you know, yes. Yep, that is a, that's always primary exit strategy on that. Got it. Not a huge wholesaler in that regard. You know, I love, like you mentioned before, I've been a contractor for 23 years, but I don't do any of that anymore, but that's just my, that's who I am.

So, but yeah, MLS definitely has like a strategy. The one thing that has, you know, since, since, you know, updating my bio is that I've started a new construction company now just because it's pretty wild how, you know, replacement value costs and, you know, new construction when you're looking at flips, how that has, you know, evened out now. And so we're finding so many random empty lots in town that are so cheap. And, and we're building new. And it's, it's going crazy right now.

We have six spec homes right now to build, and we're on our second custom home. That's awesome. I've seen a lot of people doing that recently. So, yeah, the numbers are starting to work out then. Yep. They are working out again. And you're right, man, like you said before, it's cycles. It's just different, you know, and you have to be in the game to see those and know them.

Yeah. I remember just two years ago, I coincidentally had two houses burned down in the same city. And we had them both insured for replacement costs. And we got back double what we did. paid for him. Right. Exactly. Right. And so that's, you're, you're nailed it, man. That's, that's, that's what's happening. Replacement values are there. That's awesome. Sweet. Okay. So, you're a contractor. Fix and flip is kind of your game as well. Yep. All right. So, obviously the new construction, you're building a brand new house. When you get these

short sales and you get the auction houses, how do you determine how much, whether you're going to fix it up or not or how much you're going to fix it up? With these flips. Yeah. Yep. I mean, it's definitely market driven as well. I think the, you know, the term's been thrown around for, you know, a few years now, you know, with, with wholesaling, right? Right.

Or you can come in and it's not a full, you know, host you're going to maybe clean it out, you know, replace the rugs, paint it, you know, and throw it back up on the market. I think buyers are demanding more than that now. Are they? Okay. that's that's that's that's that's that's happening you know it's trending more and more that um we're staging houses again you know and instead of just throwing anything you find on the market um once we stage it you know they're selling so um i i'm not gonna i wouldn't sit there and tell you that

you know it's it's a must in this business but you know for this cycle right now where we're at that's it's working again so um so we're going we're going as far as we need to on that regard you know to put up a nice a nice product okay so what that tells me is there's a little bit more power shifting towards the buyer right now, right? Yep. We just had, like I just had a guy on our Facebook group just asked yesterday saying, what is wrong with all of these finicky and flaky buyers all of a sudden? It's been two months of he had nine cancellations for showings.

And so what's happening, I think, is that people are so used to these things going so fast that they're going to lose it, that something pops up on the market. And everybody books a show. And then once they realize, oh, wait, that's not in the right school district or it's not big enough or I don't like the layout. Well, then they just cancel. But they're, you know, so people are getting pickier. They're waiting a little bit longer. And that's, that's the market we're in right now.

Right. You're in Wisconsin, right? Yep. Yep. Okay. But you operate all through the Midwest. Is that right? Yep.

Okay. So do you have construction teams all through the Midwest? No, I primarily stick with, you know, local? Yeah, and I'll partner with guys too. Once you find a good solution, man, and it works, you want to, you need to develop that and build it because dealing with contractors is probably the hardest part of this entire business. And we can have that conversation all day long. Yeah. It is brutal out there right now.

Yeah. Another thing I say is that real estate is safe. It's the people that are risky, right? Right, man. You know, between contractors and property managers, I mean, you can lose your shirt. You could be great at the purchase and investing in real estate, but those two people can mess it up if you don't have the right ones on your team. Oh, for sure, man. Great.

So with that said, if someone wanted to go out and do some fixing and flipping for the first time, what would be a best way to find a good contractor? What would your advice be? Honestly, that's a great question, man. I you know we teach about this as well but I to find a good contractor number one let's let's we we'll keep bringing this up all day long relationship is key man if you can find guys that will refer you their good guys instead of you know that have more of an abundance mentality than scarcity then that's going to be that's going to be huge but honestly here's a this is a great great way to do this find your professional vendors out there okay I'm not talking your big box stores

Okay, like a Home Depot or Lowe's or Menards in our area, but like an ABC siding and roofing, okay? If you go there at six in the morning, you're going to find the guys who are running their businesses, not hungover. They don't have signs on their truck, so they charge normal, like almost new construction fees, but they're at the vendor house, they're at the supply house, getting their materials, and they're going to work, right? And they do a great job. If you go into that place and say, hey, man, can you give me your top top three roofers that pay their bills on time that are in here every week that are doing business they'll be happy to they'll give you their three best guys right there and so you've got and i mean that is such a

great way to find a good contract great tip yeah yeah it's great thing man super um so chris that introduced us our mutual friend and uh he had mentioned that there's a software that i had to check out and this rehab evaluator and i said Yeah, not another software, you know. Yeah, here we go again, right? He says, no, but this guy's the real deal that he actually, there's some real knowledge and experience and wisdom behind it. And it's a common question when people are going to even just look with their actual purchase is how do I accurately assess what the repairs are going to be. And I know nothing about it. I'm assuming that's what it is. Can you tell me a little bit about that and how you built it, why you built it, and what it's done for you? Yeah, man, that's, yeah, thanks. That is, that is really, you know, what I'm out there doing today, you know, is, is how I assume correctly as to what it, what it is? Yep.

Rehab Estimator Pro is what it is, yep. And so here's the thing. Anybody can go to a real estate conference, right? Today, you got fortune builders in your backyard. They're coming to Milwaukee next week, you know, all this, right? And they'll teach you how to find properties and do all this in a couple of days, right? Yep. You know, it's, you cannot teach somebody who's in a cubicle how to be a general.

contractor or estimate repair costs in two days. That's years of experience, okay? And you still screw it up. So here's what I find. And tell me if you agree with this. Sure. Two things, man, you can never screw up. And I don't care who you are, wholesaler, flipper. I don't care if you're even a private money lender looking at a deal. If your ARV is wrong or your repair cost, those are two things that you cannot screw up, right, in any deal. So why do we have a national, you know, accepted tool called the MLS that everyone accepts as this is the only basis for, you know, for an ARV that you can use. You'll never have an appraiser turn in a redfin comp for a bank, right? It doesn't happen. So why when it comes to repair costs, do we just pull a number out

of our rear end and go, oh, it'll be about 30 grand, you know, to do this, you know, and that's when you lose the deal, you lose your money right there when you screw that up. So I wanted to create a tool that wasn't like all of these other systems out there that are so cumbersome and complicated and have 400 lines on a spreadsheet that you need to figure out how many lineal feet of crown molding do I need. You know, that's for the birds. I want you to be able to go in a house with no experience and in less than 12, 13, 14 minutes without a tape measure or a ladder, leave that house with a repair number that you can accurately bring to a lender and that you can actually close on and go to a contractor with

and then, you know, go from there and have an awesome number that is going to work. Okay. It's a checkbox system. So you walk in and say, oh, does it need a kitchen? Yep, check the box. It's based on algorithms and based on square footage of the home. And so you come in. You've got exterior, interior, and your miscellaneous and mechanicals.

Three different screens you're looking at. You check the boxes on what the house needs by a physical look. And you walk out with a repair number and an actual cash offer price as well. Mm-hmm. Got it. So when Mercedes and I, of these, all these wholesales we did, we did about 60 of them in six months in Los Angeles. And it was, that was a good six months. Right. That is great. And we rehabbed them about 12 of them, a dozen or so commercially.

And that was what, I don't know, nine, ten years ago now. Okay. And there was a book. And I forget what it was called. There's a little book where we had to scroll through and pick up what things cost, right? And the one thing that I never understood was that it was different, like, by depending on where you were in the country, the price was different in the country. Is that still the case? And why is that?

Man, that's a, I love the way you think because that is, I mean, you have the experience and this is, it's a great question. It's absolutely, you know, it's a good objection too, right? Like, how can this be different all over the place? And some people even say, well, it's different from one county to the next. And I say bogus, okay? I've been all over the country. I have, you know, we have investor friends, you know, all over the country, right? I have gone in their rehabs.

I have researched everything. The cost of a can of paint at Lowe's is the same in L.A. as it is in Wisconsin. It is. Yes. Yeah. So when you have a painter, you don't have a painter that one guy charges, you know, $2.50 a square foot, but, oh, you're in San Diego.

He charges $12 a square foot. It's not true, man. It's just not true. We're all getting the same prices. And so you have the ability to manipulate the number within seconds on the tool. So that if you do find, and here's another thing. You asked about meeting contractors. It is a great way, man, to take a contractor out to lunch, open up the app and just say,

hey, man, let's go through some of this pricing quick and just make sure that, you know, you're okay with it. It matches what you feel, you know, in your experience you can do. Because guess what? you're cementing that relationship and you're also now instead of dragging your contractor to 50 jobs that you're never going to get that you maybe get one or two of you're going to be you're going to have confidence to go use the numbers that he approved right and now you're handing a job over him saying hey look you I'm using your numbers that we agreed on and here's what I bid this at

so yeah so I agree man it is not it's the pricing is the same around the country and it's just a matter of tweaking it up or down a little bit. Right. Perfect. I've always wanted to ask that question as well. So I'm asking for my own my own information these days because I was like, how does a nail cost more in L.A. than it does in Cleveland, right? It's such a good point, man. It's such a good point. Okay, good. So, so the rehab estimator pro will work nationally the same. Yep. Okay, perfect. All day long. Perfect. And I like the idea of actually bringing that to the contractor. What a much more powerful position to be in with the contractor, especially when you're negotiating price and stuff.

And get this, man. Here's another thing that I accidentally found was just, it's over the top. I always have my iPad that I use for it with a pen. And so whatever, you know, kind of notebook. So I have it there. And, you know, the seller is always interested in what you're doing. Because instead of just, you know, like I said, pulling a number out of the air, I've got a tool that says, oh, well, I'm going to be able to calculate the exact.

exactly what it'll take to bring this house up to a position where I can sell it again. Let me show you how. And then you actually, you can, I've handed it to them and say, hey, would you mind as we go through the house if, you know, we talk about things, you can just check this box. And they go, oh, I would love to do that. That's great. And so you walk in and you go, hey, what do you think about this bathroom? Do you think it needs updating?

Oh, my gosh. Yeah. Oh, for sure. It was, that's from the 70s. And so they're checking the box. Yeah, we need a bathroom here. So they're producing your scope of work now, which is, which is really fun. Yeah, that's my whole psychology is let the seller come up with the price.

Right. Exactly. They can't argue with it, Judge. Exactly. That's a, that's a, I don't even have that tool and I've been able to do it. Wow, does that just put the whole, my old position on steroids right there? I love it. So you can do it on.

That's, that was one thing I was going to ask was this isn't like an after the appointment due diligence thing. This is more that you can use this on location at that very first meeting. Right. Man, that's a killer point that I actually bring, you know, I don't. share this with everybody, but it's just just a great tool. I bring a mobile printer that's wireless, okay, has a battery in it, and it's about, you know, it's about yay big, you know, the small. And so here's the thing.

You've got, let's just say the wholesale world. You've got maybe seven, eight wholesalers coming through there, right? Making numbers. I don't leave and go, hey, Mr. Mrs. Homeowner, you know, let me go, you know, let me go work the numbers and I'll get back to you. Yeah. And then you're, you know, I'm right there able to print a one-page offer from this offer, a cash offer with two other options for seller finance right there on the kitchen table and have

them sign it. So that's long gone. There is no going back to the office to work numbers. It's already done for you right there. That's sweet. That's great. Because the next thing I was going to ask, but you just answered it was, is there a quick and dirty math formula that you can use, you know, and then you go back and confirm with the calculator, but you can take it right there with you. Yeah. So here's, yeah, so what our offer does, how it pulls it. And it does in the beginning. Now, here's the thing. Your homework, just like anything else, can be doing your due diligence on your ARV, right? But we do have a full application on the front end to determine ARV. It uses Zillow. And it'll pull 30 counts and show you a map. But is that the trusted way to go? No, it gives

you a number, but you still have to do your due diligence, right? Sure. So you put your ARV in, whatever you decide, along with the Zillow number that it does. And then it will go through and show you in a list all of your real cost. Here's your holding cost. You know, here's, here's your, you know, the private money, here's your closing cost, here's your selling cost. And there's percentages for all that already built in. And so the thing that I do from the front of the room that is always fun is that after I do it live in front of everyone, we'll actually take the number ARV times 65% minus repairs and it comes to within a couple hundred dollars every single time. And so you can tweak that, whatever your market is. Say you're in Florida

and it's at 85% of ARV. You can tweak your selling and holding cost numbers to match that. So instead of just, again, using that formula ARV times 70% minus repairs, you now have something in front of you that is showing real cost, and it still comes down to that conclusion. ARV times 70 minus repairs. So, yeah, that's a great question, man. Sweet.

I knew there had to be something out there like that. And I was too lazy to build it. Yeah. Plus, I don't have the experience to build it. I'm not a big fix and flipper. But I know I got people that fix and flip that love to fix and flip that listen to this show. So if they wanted to go learn more about that, they should go to rehabestimatorpro.com.

Is that it? Yep. Rehabestimator pro.com. That's pretty easy. It's the same thing for wholesalers. Think about wholesalers still, you know, let's try to change that reputation of, you know, you got a tree sticking out of the top of the house and, you know, wholesaler says, yeah, man, it only needs $5,000 worth of repairs.

You know, if you can get these guys tools in their hands to use and come up with accurate repair costs, it just makes them that much better in their space. You know, people will trust you more if you know those repair costs. Sweet. Awesome. So what's next? It says that you are working on your buy and hold portfolio now. Yeah, I've been slowly adding, you know, I got rid of all my rentals a few years ago. Just hated having them. So I built a property management company that I just gave it, you know, to the people that we built it with. And so now I'm just now starting again this year. I've got eight or nine properties that I've now, but I'm rehabbing them as well instead of just buying garbage and having so many future maintenance costs.

You know, now I'm making sure that they're good, you know, now. And so they're better houses. You know, maybe that's an evolution of an investor, right? Just getting into the better houses. Yeah. Not the $30,000, you know, turds that are out there. Oh, my gosh. Do I have my experience with those?

Right. It's tough, man. It's tough. It is tough. You know, I used to just like laugh at those little bee neighborhood houses that gave like a 6% return, right? Right. And then you, but look at this one. This one's 30 grand.

It has a 15% return. That bee house at 6% still will almost always outperform that 15% on paper. always. Yeah, and you sleep better at night and everything is good. And that is the problem, man. I couldn't stand owning some of these. It's, I just felt terrible, you know, so, but there will always be guys that want them out there. So it's, yeah. You know what? It's a great place to start. I mean, it allowed me to really pick up some momentum and make some good money and start building what we've got here. So great. So we talked about this a little bit of touch on in the beginning of the market potentially shifting. We know it's going to eventually. What are you seeing? out there and what are you doing to prepare for it? For us, we're in a really interesting spot. We have investors coming from all over the world because we have

a company called Foxcon coming in, which is really the largest migration of any foreign company into the U.S. And it's all, you know, they produce iPhone screens, you know, TV screens. And so we're in a really insulated spot right now so it's hard for me to judge you know what's going on because stuff is

that we basically all the market studies that we've been doing all say start building houses and apartment luxury apartments now and don't ever stop just just because you know they're they're bringing in you know 13,000 jobs it's crazy where we're at but you know we're we're seeing the same kind of thing all over the place like all the big markets you know yeah the building has been insane you know and it's still happening so you know at at what point is it saturated you know is where are we going to be at? You know, it's hard to answer that question right now. But our market is still moving fast.

Everything's, everything's still, you know, buyers are getting a little pickier, a little more finicky right now. But I think as we come into spring, we're still going to see how, I think we're going to see an awesome spring, man. Yeah. Sweet.

Yeah, I'm kind of seeing, I think the same thing. I've been saying this for a while as well. It's funny. We're walking now. I guess we're about the same age, potentially. And so we're kind of maybe in the same season of our,

careers, right? And, you know, I just see it as, you know, each generation is a little bit bigger than the previous. And every time one of those big bubbles of generation, those bubbles of people come through, they have an impact on certain industries depending on their age. And we're seeing it right now with all the baby boomers and health care and retirement communities, like really eye-rocketing, right? Because the demand is so high. And the next generation is bigger than them. and the next one after them is bigger and bigger. So, yeah, I think that's really good advice. My philosophy right now, Mercedes, we're just buying everything and we're not selling

anything. Yep. Yep. Because that's almost, I mean, if there's a safe bet or a guarantee for an investment, you know, it might go up or down a little bit along the way. But if you're buying right and your cash flowing, I don't think you can lose. Right. Do you agree?

Right, man. I totally agree. And you know, of course, there'll be the naysayers out there. Like, oh, you just said that I can't believe it. You know, I really think it's true, man. If you're buying right and things are working right now with cash flow, I mean, I don't think you can go wrong, man. And I'm seeing it's so true right now in our market.

I even do have, I mean, this is something that is slowly coming about. But I made a deal with the church here in town where they have 20 acres of land that they've been sitting on for 50 years. And our meeting is tomorrow. We're actually going to, they're going to deep. the land to us and we're building senior living on it and all of the market studies right now say you know there is so much room you know to build these right now and so that's a totally different avenue man I've never gone down

that road but it's a sure win right now of course with the right market study and you believe that everything says you know this is gold you know so I'm gonna do it I'm gonna we're going into it'll it'll probably be in the next year that we'll we'll start digging but we're No, senior living. Sweet. Yeah, I was at a RIA meeting probably six or seven years ago. And the guest speaker that day was a really old guy.

I mean, gray hair and looked like he was done with his career. He was probably 80 years old, 85 years old, somewhere in there. And boy, he just was just, he'd been investing in real estate for 50, 60 years. But he made his millions, he's made his whole fortune on one bedroom, apartments. What? And that's like a huge no-no, right? That's like a big scary thing to do.

But it was, he was, because he was older and age, that was his network. And he had a lot of single friends. Like one of the spouses would pass on. And then the person would need a place inexpensively to live. And they never moved. Wow. And so I see that potential now as the demographics are aging. Right.

And so, I mean, he did it, you know, what, 20 years ago, and that was his demographic. That demographic is swelling. Right, right. You're right, too, man. That's interesting. Yeah. So I think about all those one-bedroom apartment buildings that people, like, can't get rid of because everyone that has any experience know that those are typically trouble. Right.

But based on the demand, it might be the good play now. Right. Very good. God, what else? This has been of a pleasure talking to you. What's for the future? What are you excited about? You know, we started a, it's called privatefunding academy.com.

And to me, man, I really enjoy private money out there and helping investors get started and going. So I'm looking forward to developing. We've got something going right now. We're getting an SEC certified fund going, which is tricky. You know, and it's somebody else. good friend of mine that he's, you know, genius level guy. I'm not smart enough to do that, but he's putting it together. And I'm really excited about that because we created the funding academy just to teach people how to borrow money correctly, how to become like a certified

borrower. And then also on the other end, how to teach people how to become lenders. Because as you know out there, man, there is so much private money out there. It is insane. Thank you for saying that. Everyone is so concerned that they can't do this because they don't have the money. I'm just like, just get good at finding deals. There's no shorter. of money out there in the system for good deals. It is truly bizarre, man. I just talked to somebody in L.A. a couple weeks ago that said they had a lender. She's just, she popped up on the scene.

She wants to do real estate. She has, and I don't even know if this is believable. This guy's kind of the middleman broker in its private money rates. It's 8 to 10%. No points. And he said she has $1 billion with a B, okay? in a self-directed IRA. And so,

it's, there's so much money out there. How does that happen? Right. Like, that has to be generational, right? Or at least, yeah,

it had to have been invested in, you know, in something, you know, like tech or something. Yeah, that had to been passed down a couple times, I think.

It has to be. It has to be. But, so, but, man, you're right. There's, there's no excuse, no excuse at all to not come up and find deals. Sweet. Yeah. You know,

again, like, just something I'm noticing is that we're at the same season in our careers potentially. And, you know, we're discovering that we love real estate, a bunch of money to make in real estate, and it's giving us what we've got. But the next evolution is like becoming the bank, right? Right. I've got a friend Joel Block who helped me set up my fund. And he's got a saying that he always says, hey, the money's in the money, right? Dude, you know what? Chris just told me that the other day. Oh, did he? Yeah, I love that, man,

because he said he said the same thing from him. He's like, man, the money. is in the money. The money is not in the real estate. The money's in the money. So it's exciting. I enjoy that part too. It's fun to do. But the real estate helps you get the money to get to that point to be the money person, right? Yep. Yeah. It's a, it's steps. It's, it is steps for sure. It's the best vehicle out there, right? It's just, truly is. I always say this is, this is really just a money show, but it's disguised as a real estate show. Right. Right. We're just pretending to be a real the state show. It's really a money show. That's the vehicle that makes it accessible to the average person. It is just hard. It's hard to watch how, you know, I mean,

man, we put in the hard, you know, the hard knocks, right? Like, if it was as easy as, you know, people make it sound to be, then, you know, everybody would do it and succeed at it. But there's some work, man. There's some real work that we've done. But if you don't do it, what else are you going to do? Yeah. Right. I mean, if you want to be wealthy, if that's what you're striving to be and you want to make a lot of money, what other option do you have that gives you a better chance of making it than this? Yeah, yeah, because the last thing I'm going to do is have a job, right? Yeah, I'm unemployable, Matt.

Yeah, I mean, you can have a tech startup, but you have to have an amazing idea and, you know, you have to have all kinds of other things that go into play that. You've got to be smart, right? Don't need that for this. Anyway, that's the truth, right? Right. Somebody owns all those super yachts on your West Coast there, all right? They do.

I just don't know who they are. Totally. Well, Matt, it's been an absolute pleasure. I'm glad we got to meet. Let's do this again, all right? Yeah, I love it, man. Great to meet you. All right.

So if someone wanted to learn more about you or get in touch with you, is rehab estimator pro the best place to go or is there another website? Yeah, no, that's a rehab estimator pro is really dominantly, you know, where I'm educating right now. And certainly get a hold of me through there. Perfect. I mean, it's my name. You can find me on Facebook as well.

So, sweet. Thanks, man. Thanks for the privilege. It was awesome. Take care. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow.

You didn't know, home for us, we got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com. Thank you.