KGCI: Real Estate on Air - Avoiding Real Estate Investing Mistakes: Strategies from Chris Craddock

Starting point is 00:00:00 And here is the principle of real estate, right? You win when you buy. Zillow just rolled out a new AI home search assistant. I once showed up to a listing, started the whole tour, only to realize it was the wrong house. We went upstairs and found the owner in a bathrobe. This is KGCI Real Estate on Air Live, your weekly deep dive into the strategies, trends, and tools,

Starting point is 00:00:24 shaping the real estate industry, from market updates to actionable strategies and exclusive interviews with top agents. We are here to unlock your full potential and help you thrive. Thousands of agents trust KGCI every week. Now it's your turn. Let's go live. Here's Ian Wheatley.

Starting point is 00:00:42 Hello, welcome to Real Estate on Air live. I'm your host, Ian Wheatley, and in my never-ending quest to convert an army of real estate agents into real estate investors, I'm going to be joined on the program today by one of my favorite hosts here on KGCI, Real Estate on Air. Chris Craddick is the host of Uncom and Real Estate. He's a multi-million dollar real estate agent and investor, and he's going to be diving into the top mistakes that real estate investors make and how to avoid them in the first place. And as they say, knowledge is power. Of course, we'll also be sharing your real estate confessions. So keep sharing those on Facebook and Instagram.

Starting point is 00:01:13 What's real estate confessions? Well, I'm so happy you asked. This is the cocktail party conversation with your agent friends at the annual association awards banquet. All right? This is where you get to share that crazy thing that happened at your open house or the unfortunate showing. that you had. Ready from buyers falling into pools or agents showing the wrong house and causing a panic over squatters, this is your moment to commiserate

Starting point is 00:01:40 with agents all around the world. So don't forget, send us your real estate confession by sending us a message on Facebook and Instagram. Did you hear about this? Zillow just rolled out a new AI home search assistant. Yeah, it's

Starting point is 00:01:56 letting buyers talk to it in a natural language. So instead of checking the boxes for three-bed, two-bath, your buyer can now say, find me something cute with a splash of character and good vibes. And then Zillow's AI is like, all right, got it. Here's a trap house with shiplath. Like, I love a good tech upgrade as much as the next guy. And I'm certainly not anti-AI.

Starting point is 00:02:22 I use it all the time. I talk to it. I ask it to write birthday cards for people I barely know. but this one, I don't know. Zillow training a robot to interpret buyer wish lists feels like, I don't know, I've got young kids at the house, hand in a toddler, a chainsaw, and saying, go carve up the turkey. Like, I just, because here's what we really know about buyer language as agents, right? Cozy, no closets, open concept, you just want to torch the existing first floor house plan, right? and I don't care how Smart Zillow thinks their AI is,

Starting point is 00:03:01 it is never had to explain to a buyer that granite countertops are not in a budget for a $210,000 beach town, right? That's human skill. That's a Jedi-level real estate agent stuff, okay? And here's the play. Let your buyers flirt with the robot, right? Let them type, swipe, scroll, and dream. then you, the professional, step in with logic, comps, and a well-timed, that ain't a thing. Because when the AI crashes trying to decode boho meets mid-century ranch with a splash of farmhouse,

Starting point is 00:03:42 guess who's going to be there to step in and get that deal done? That's you. All right, let's take a look at this week's housing headlines here on KGCI, Real Estate on Air Live. Some surprising momentum in new construction housing starts that. That's new residential construction. We're up 11.2% overall in February with single family starts jumping 11.4% compared to January. And that's a solid uptick. But it's not all sunshine, though, for home builders.

Starting point is 00:04:13 Builder confidence is still slipping, according to the NHB. As to the National Association of Home Builders, and the culprit remains tariffs. Builders remain worried that the tariffs could add up to $10,000 at the cost of a new home, which could price out some buyers. So agents, what do you need to know? New builds might help ease inventory pressure, sure, especially for buyers that are discouraged by resale prices. So make sure you're proactive, get familiar with new construction developments in your area, and talk to site reps, okay? Use this information when you're doing a buyer consult.

Starting point is 00:04:49 You can share that there's momentum in new builds and that you're seeing those options open up and where you're seeing those options open up. And be sure that you're tuned into price changes, okay? tariffs, they're not going to hit immediately, okay, because home builders are buying and building off of the lumber that they've already bought before the tariffs came into play here. So, when should we expect to see this price hit? It's not for a little while yet, but it could still come here in 2025. Speaking of those tariffs, it's not just builders that are sweating. The Federal Reserve left interest rates unchanged this week, but inflation remains really on the radar, especially if tariffs drive the costs up of things. So Federal Reserve Chair

Starting point is 00:05:36 Jerome Powell did say that housing services inflation is actually trending in the right direction. It's going slow and steady downward. So while we're watching inflation elsewhere, housing may be stabilized. So agents, be sure to talk inflation and rates with buyers. Okay. Most of them aren't following federal reserve decisions, but they are watching what the mortgage rates are doing. So pair this insight with lender updates, so make sure you're talking to your trusted lenders, talk to the lenders and relay the information about rates holding steady for now and housing inflation, calming, you know, and talk about some of the positive signals that you are hearing from your trusted lenders.

Starting point is 00:06:17 And this was some encouraging progress on equity in housing. The black homeownership rate in the United States saw the biggest year-over-year increase of any racial group reaching 44.7% in 2020. But it's still well below the national average, especially when you compare it to 72.4% among white households. So the National Association Realtors' New Report points to limited access to affordable housing and financing as the biggest hurdles towards black homeownership. So agents, why does this matter? Well, equity in housing isn't just a stat. It's something that you can directly impact as an agent, right? So be sure to learn more about local down payment assistance programs, learn more about grants, learn more about credit resources,

Starting point is 00:07:03 and be a source of education and empowerment, especially for first-time homebuyers generally navigating the complex process of buying a house. And something to look at, if your MLS or board offers fair housing or specifically DEI training, now may be a good time to plug into it. That's a check of your housing headlines here on real estate on air live. I'm your host, Ian Wheatley. KGCI Real Estate on air. I am Ian Wheatley and we are going to be diving in today in the wild world of real estate investing, whether you're just getting started or you're already dabbling in some deals. Today's conversation is going to help you sidestep some of the biggest landmines that will absolutely derail your investing career. And

Starting point is 00:07:55 Who better it help us navigate that than Chris Craddick, top producing agent, entrepreneur, and host of the Uncommon Real Estate Podcasts heard Wednesdays here on KGCI, Real Estate on air. Chris, welcome to the show. Thanks for coming by. Absolutely, brother. Thanks for having me. Excited to spend some time with you. Yeah, it's going to be exciting. So for those that may not know your background, how did you come into being a multi-million dollar real estate investor and team leader?

Starting point is 00:08:20 Well, actually, so my foray in real estate happened when early 2000s, I was on staff with an organization called Young Life. I loved Young Life. It was awesome. I made $25,000 a year. I live here in the D.C. area. I live in Virginia right outside of the city. And anybody that knows this market knows you cannot live. Even back then, you could not live on $25,000 a year if you're building a family. And so when my wife got pregnant, I literally checked out every book I could find in real estate investing. I, you know, massive and perfect action happened. I just saw, hey, go talk to people up for foreclosure. So I just started knocking on doors. And somehow I fell into a deal.

Starting point is 00:09:02 My first deal was like I didn't even know what to do. When the guy said yes, I'm like, okay, well, I didn't have a contract. I didn't know how to write a contract. I knew nothing. So I called a real estate agent friend of mine and was like, hey, you want to do this deal with me? And make sure that it's actually a good deal. And looked at it. We split it 50-50, did the deal, made money.

Starting point is 00:09:20 you know, did some more. And so that was kind of the start, made a bunch of money, allowed me continued to do ministry. And 2010, I started running out of money because now I have six kids. And anybody with kids knows that like it just means your money disappears. And, you know, like you said earlier, like they're small, but they're expensive. Yes. Little people, but they're big expensive. Yes, exactly. And so I, I mean, literally I was doing all these side jobs, doing everything to make ends meet. I was trying to sell my blood for $300 to NIH to buy Christmas presents for my family. I mean, everything I could think of. And I'm like, why don't I just get back to flipping houses that worked really well before?

Starting point is 00:10:05 And so started doing that in 2011. And there's a long, long story that we don't have time for now. But that ended up starting me down the path to having the real estate team and then really building the agent investor model that we run our team from. And, you know, it allows you to make really good money on a team and a scalable listing based business as well as make really good money on the investment side of the business as well. Amen. Necessity breeds innovation, right? That's the, that's the little old idea. And I think, I think for a lot of investors, there's this pain point in their life that triggers the look. And, you know, hope for a lot of people, I mean, it would be great if they could consider

Starting point is 00:10:52 real estate investing, you know, before they really hit that pain point in their life. We're catching up with Chris Crata, host the Uncommon Real Estate podcast. That's heard Wednesdays here on KGCI, Real Estate on air. So let's jump in. What is like that number one mistake, right? Because you deal with a lot of other investors, you coach them, right? What's that number one mistake that you see those new? or less seasoned investors making?

Starting point is 00:11:14 Not understanding their numbers. You know, I'm not the numbers guy. Like, one of my really good friends. I mean, literally will tell you everything on his P&L right away. I do go over my P&L with our bookkeeper and accountant. But I can't tell you all the different pieces like my buddy Rob can. But I do know the numbers well enough to know. Like, you know, this is how you look at your deal and know if it's a dog or not.

Starting point is 00:11:39 And I still remember, you know, a good friend of mine brought me a deal. He was like, oh, my gosh, we're going to make so much money on this deal. Like, we'll make like 50 grand on this deal. I'm like, tell me about it. He's like, we can get it for 300. And I'm like, and he's like, and it's worth 400 fixed up. I'm like, sweet. Cool.

Starting point is 00:11:57 Tell me more. And I was like, how much would it cost to fix it up? He's like, well, probably about 50 grand. I'm like, okay. All right. So let's do the math here. 50 grand. So we're buying the property.

Starting point is 00:12:09 Right. And at the time, now I typically use my own cash to flip properties. But at the time, I had to borrow money, right? So we're paying closing costs to buy. We're paying for loan, you know, loan origination. We're paying for holding costs. We're paying for closing cost to sell. We're paying agents on the other side, buyers agents when we sell. We're paying closing costs when we sell. We're paying builders risk insurance. We're paying utilities. We're paying for the things that we don't think that we need to pay for, but when you open up walls, you realize you need to pay for. And so all of these things. And I'm like, so at the end of this, you know, we're going to make less than you'd make on a commission. Why would we want to flip this and put all that at risk that

Starting point is 00:12:51 if anything goes south, we start losing money? And he's like, oh, I didn't realize all the other costs and other fees with it. He's like, so where do we need to be? And I'm like, bro, like any more than 250, it just doesn't even make sense to have the conversation. And so then he started understanding it. But I've talked to so many people that will buy without understanding. And then they'll just be in the deep end. And all of a sudden, there's sharks everywhere. And it's bad news.

Starting point is 00:13:21 Amen. That reminds me of, you know, you can't afford to buy wrong. So how can agents and investors avoid making those bad buys, particularly in a competitive market, right? There's upward pressure on prices. How do they get around that? Yeah, so you know, you want to know what your numbers are, right? So you get a contractor that you trust to go in and walk the house with you. Then you've got your numbers there.

Starting point is 00:13:47 And then you've just got to have your buy sheet, right? And they're all over the internet. You know, like give me a cost spreadsheet on flipping a house, right? You can just Google that and it'll show up. And, you know, heck, if you don't know what a good one is, you know, send me a message on Instagram at Kredrock and I'll look at one that you have and just tell you, hey, this is good or this isn't. But it's not that difficult because you just got to look at your closing costs, your agent costs, your holding costs and utilities.

Starting point is 00:14:18 And then you've got a good idea, okay, after renovations, this is what I'm spending. What's left over? Then you know. Now, here's the other side of it. I've got agents on my team that get super excited about deals. and they see dollar signs, and then they're blind to the bridge out sign. I don't know if you've ever, have you seen the movie Bruce Almighty? I have seen the movie, Bruce Almighty.

Starting point is 00:14:44 Do you remember that scene where he's like, oh, God, give me a sign. And literally he's driving down the road. It says bridge out, stop. Don't go. Don't move forward. You know, it's like, I see, see it's like, oh, give me a sign that this is a good deal. It's like, don't do this deal. And they're like, nope, no signs.

Starting point is 00:15:00 And then all of a sudden they get like hamstrung and crippled over spinning way too much money on a deal that you're going to lose money on. So that's really the important thing is just know your numbers. And here is the principle of real estate, right? You win when you buy. If the prices go up and you win because you made more money because prices are going up, awesome. But if you're betting on the prices going up because it's the spring market and you're like, well, right now this will sell for 500, but it's the spring market. So I'll probably get 525, even though the comp say 500. That's speculation. And, frankly, you're putting yours and your family's money at risk, you know, and it's not a smart move.

Starting point is 00:15:39 There are lots of deals out there. Don't get into the scarcity mentality, believing that this is the only deal you're going to find. And so you've got to pull the trigger on it. The next deal will come and the next deal will come, you know, wait until you have a good deal. Otherwise, you're going to get just beat up. And then you won't have good deals because getting cash for the next deal will be so much harder. Amen. You know, and, you know, you most invest.

Starting point is 00:16:04 investors start with with financing you know over time you know investors may transition eventually to cash but talk if we're thinking about those less season newer investors talking me a little bit about that financing piece you know what investing mistakes happen i guess before with the financing piece before even somebody writes an offer that they need to know about yeah i mean here's the whole thing you want to know where your money's going to come from and this is one of the great things you can Just talk to somebody else that has cash. Again, one of the easiest ways to do this, most of America's wealth is tied up in retirement funds. And so if you've got a friend that wants to invest in real estate, there's something called a self-directed IRA.

Starting point is 00:16:49 Again, send me a message. I'll make a connection to my buddy Carter who runs a self-directed IRA company. He helps people move their retirement funds into something where they can invest in real estate. There are some rules and regulations to stay tax compliant. But again, that's why Carter runs that so that he can keep people in compliance. But if you've got buddies, friends, maybe they're, maybe they're W2 employees and they've watched A&E or HGTV and they're like, man, I want to get into this. But you're like, I don't have the cash.

Starting point is 00:17:19 I don't have the money. That's the easiest place to go is get into that self-directed IRAs. Now, again, you've got to treat other people's money with the utmost respect and integrity. That's a retirement fund. So don't say, oh, I got money. and then go, you know, buy deals that are dumb deals, get people that know what they're doing to look at it, double check it, and then also trust them, right? Don't say they don't know what they're talking about.

Starting point is 00:17:42 I've got a, man, I've got so many agent friends that ask my advice and then they say, oh, no, you're wrong. I mean, heck, I got, there's this one lady that I was friends with, and she asked me about this flip she was buying, and I was like, don't do it. And I was probably a little blunt. I told her it was a dog, don't do it. I was like this is not just a dog. It's a dog with fleas.

Starting point is 00:18:04 Do not do this deal. And sure enough, I saw her. I was good friends with her daughter. And, you know, I saw them, the daughter and her mom was, was at the, this party months later. And I asked how the flip went. And she was like, well, it went great. You know, I decided to keep it as a rental. And I was like, keep it as a rental.

Starting point is 00:18:26 I know that that's code word for it didn't sell. And, yeah. you realized it was overpriced and you put too much money into it and now you're just trying to figure out how not to lose so yeah anyway that's the you know you got to keep the exit strategy in mind that's what I tell a lot of my investor clients all the time like is this a hold or is this a flip because the numbers are very different for a hold versus a flip right you know and yeah when when your exit strategy changes is a consequence of the other stuff that happens while you're prepping up for a flip that that that can be a problem we're catching up with credit host of the Uncommon Real Estate Podcast, heard here Wednesdays on KGCI Real Estate on air. I started my real estate investing journey before I stepped into real estate sales. I got licensed and got into production, basically, long story short, to generate more capital to buy other real estate investments. So, you know, investor agents, they are near and dear to my heart. What mistakes do you see investor agents making when they're trying to transition or possibly

Starting point is 00:19:33 build that dual identity as investor agents? Well, I would say a lot of times, you know, buying from wholesalers, you know, it's not terrible, it's not a terrible idea. It's not a terrible strategy. But if you really think through what's the best use of your money, if you go direct to seller, like find distressed sellers. And again, I'm happy to share with anybody. where we buy, you know, our leads from and where we get our leads, how we get our leads. Just send me a message and I'll share the game plan. But we go direct to seller because one, we can we can buy it and hold it, right? You talked about buy and hold, right?

Starting point is 00:20:16 If you're real fit agent, you need to be holding properties. The tax advantages are massive. And so, you know, and that's that's really where you build massive wealth. So you can buy and hold it. You can flip it. You can do innovations. You can do a sub two, which means they basically keep owner financing and you hold it there. Or you can list it.

Starting point is 00:20:40 And that's the cool thing is like you list properties that you have so many exit strategies on that. And one of the biggest problems with agent investors is that. don't realize that you can build both businesses, right? We don't spend, we do have a Zilloflex account, but we don't spend any money on buyer leads because we get so many listings and the listings generate the buyer leads. So we're spending the money on these listings that give us multiple options, right? Big flips, big cash spreads, other deals, or we can go right at it. I mean, I just bought a flip yesterday that we were planning the list and then it fell through. And then we ended up buying it. So you just have multiple options with a buyer if it falls through,

Starting point is 00:21:27 you know, they sit in your database until they either come back or they go work with somebody else or decide to rent for the rest of their life. You know, and I'm thinking about, you know, some of the, some of my, my early, my early deals. I made it through. I made it through, right? what are some of those mistakes that maybe you made early on that actually turned out to be one of the best lessons that you had? Oh, man. I mean, the whole reason why Redux exists right now. The whole reason is because Jim Collins talks in How the Mighty Fall about the Hubris Board of Success. And I had so much success when we first started. It was awesome that I ended up, you know, partnering with a couple people who are still very good friends of mine. And we took on so much debt and did so many like deals.

Starting point is 00:22:25 And they were good deals, but we just couldn't turn them over fast enough. And actually another Jim Collins quote is most business died from a lack of being able to digest what they have versus from starvation. And so we just had too many deals and we couldn't get it all done. And we ended up between notes we borrowed from our friends. banknotes and everything else. We owed $10 million and we just didn't have the money to pay at all. And so we had to figure out how to do stuff and we divvied up everything. We were able to sell some stuff. We had we brought in other partners. We literally were on the wrong side of a sub two. You know, all of these different things just to be able to make ends meet. And everybody,

Starting point is 00:23:10 all three of us took different things. And what I did was I took all of the unsecured debt. Right. Like, and one of my whole things is if somebody trusts you with their money, like, you need to treat it as as sacred. Right. And so I took all the unsecured debt, which we could have filed bankruptcy. We could have done a lot of different things. It was about $660,000 of unsecured debt. And I just said, I'm going to, I'm going to pay it off. And that's really why Redux got started. My real estate team is because I could use like I knew I could make money through selling real estate. So it was the hardest I've ever worked in my life. Like I've never worked so hard. I mean, at night, my hair was falling out.

Starting point is 00:23:52 My teeth, I was grinding my teeth. I couldn't sleep. I mean, I was just thinking about all the people that I was letting down and everything else. But what it did was forced me to work really hard. And it also forced me to build a big business really fast that stayed massively profitable. And yeah, so it was one of the worst things and one of the worst times I've ever had. But it also made me the man that I am today. And I paid it off six.

Starting point is 00:24:16 $660,000 paid that off in about two years. And I still remember that last deal that I sold. I never thought this house would sell. It was like this weird little house like way out about an hour and a half away. And it came in. We had Dave Ramsey, ELP leads. And it was a Dave Ramsey ELP lead. And I got a call saying that somebody was going to write an offer on it. And I looked at it. And it was like my commission check was going to be about, I was going to take in just over 10 grand. And it was the last $10,000 I owed. And I still remember getting that call, standing in the porch of my old house, and just like feeling like the weight of the world just fell off my shoulders. It was insane.

Starting point is 00:24:56 It's fitting it was a Ramsey lead. That, man, that fits. That's a great story. That's funny. I never connected that, but that is so funny. That's awesome. That is awesome. We're catching up with Chris Carrata, coached the Uncommon.

Starting point is 00:25:13 real estate podcast heard here on KGCI, Real Estate on air. Catch that on Wednesdays. Let's flip this a little bit. Um, you know, what are knowing the numbers, right? That's really almost the, the meat and potatoes of a real estate investors meal. But in terms of like the habits and systems, what are like the two or three that you can think of that really help investors stay out of trouble and build real real estate wealth? Yeah. So I mean, I think the key is like learning how to find deals, right? When you, when you know that that you don't need to be in a scarcity mindset, but in an abundance mindset, you're going to find deals. Then it's easy to say next, right? It's easy to say no to the wrong deals. It's when you're afraid you're never going to find the next deal that you try to push square pegs in around holes and make things work that should never work. So I would say finding. ways to get deals done, right? Like, you know, we have different ways that we can get deals. One of the fastest ways to get deals, it's a little bit more expensive, but it's really good is a

Starting point is 00:26:24 paper lead system. So there's a bunch of paper lead companies. Some of them are garbage and some of them are great and some of them start out great and become garbage. So, you know, I can't even tell you, like I never want to say any names because like literally we'll have a company that is just crushing it for us. And then the next month, they'll sell their exclusive lead that you're only supposed to get, like only one person's supposed to get it. They sell it to 10 people. And, you know, then all of a sudden, their exclusive leaves become garbage. So I've learned the lesson I never publicly say, use this lead system. I always say, reach out and I'll give you the ones that we're using that are working well for us at the time. But with the disclaimer, that it could

Starting point is 00:27:06 be terrible tomorrow. You know, so there's that. We have a cold calling system. We have an in-house inside sales. We have a company that we love to use, a cold-calling group. We give them 10,000 pieces of data per month per inside salesperson calling. And they usually just get hand raisers, right? So they're still further away. You're still going to have to nurture them, you know, down the road. We used to do a lot of texting. We turned off texting, although I just heard one of the best, one of the top TCPA attorneys, Ben Kenney brought him into his group who spoke. And he said that if you are just making an offer to buy something and not offering to make a sale, right? Not offering to list the house, but just offering to buy the house, that that's completely TCPA

Starting point is 00:27:55 compliant as long as you have like an insight, like somebody, a VA or whatever, just hitting the button over and over again and it's not a mass text set. So that's something we're exploring because it used to be really good for us, but all the TCPA guidelines made us nervous. So and then direct mail. So those are some of the different options that we use and we've got different companies we love that that have worked well for us. But that system alone where you're bringing in deals is really awesome. And I'll also say this. If you, there's a company we get deals. We get deals. data from that's awesome where they have pre-foreclosure lists with data. And if you have a lot of time, but not that much money, I would say, you know, again,

Starting point is 00:28:42 reach out. We can get you the correct list to call and literally just get on the phone and smile and dial yourself, right? You don't need to buy leads. You don't need to do anything else. You're calling people that are in foreclosure or pre-foreclosure. These are people that will need to sell and your likelihood of getting somebody that will get you a deal is way, way, way higher. And if they're not going to sell it a massive discount, the bottom line is they're probably going to be sell anyway. You can just list it.

Starting point is 00:29:09 Right. You know, there's a lot of gold to be in those Liz pendants, right? There's a lot. I mean, that is a monthly focus of mine on the production and on the investment side, right? To just sort of look at those and have those conversations, right? And to even connect with your other invest. If you're an agent, right? and you have a roll of decks of investor clients, right?

Starting point is 00:29:33 These are good calls and conversations to be making on a routine, regular basis. Chris, I guess another thought kind of came to my mind. How can agents use that real estate license as well as that tool to accelerate their real estate investing journey without a ton of distraction? Right. Well, what I would just say is, you know, your business earns the right to build out the org chart, you know, through success. And so, you know, I spend, I was spending more time with people in the investor community than I was in the agent community. And in the investor community, so funny, they just would throw away listing leads or retail leads.

Starting point is 00:30:20 They're just like, it's trash. It's not worth it. And a lot of them have tried doing a lot of things with it, but most agents just don't know how to close those leads. So I would say, one, you know, partner with other people and learn how to close those leads. That that's like one of the most important easiest ways to really grow your financial, you know, income, your P&L. Two, like when you look at these investors, right, like if 20 people raise their hand and say, I want to sell in the next six months, what we found is out of 20, four are going to be willing to sell at a discount. If you're really, reaching out to the right list, like a distress property list. Four will sell for a discount

Starting point is 00:31:03 like as an easy button. If you make it so simple, easy. And of the four, maybe one will sell at a price that you're willing to pay. And the other three are going to work with somebody else out there. Right. So one in 20 people that are raising their hands are going to sell at a price that you will find acceptable. There's 19 other people where those people are willing to sell. And you can make money. But right now, if you're just an investor and not using your license, right, somebody else is making money on those listings, on those other deals, not you. So if you really want to win, it's not just finding more people.

Starting point is 00:31:41 It's about making more with what you have as well, being more efficient with what you have and not throwing away all of those leads. I mean, most of these investors, one of the investors that we work with, they give us their listing We literally closed over half a million dollars that we sent to them in GCI in referral fees. Like literally, they found over half a million dollars a year because of the fact that that was just brought back. Wow. That's awesome. Well done.

Starting point is 00:32:13 That's awesome. And I think that's a problem, you know, and a lot of this, you know, these are, you know, relatively simple things that agents can do, agents can build, um, and implement into their business, especially if they're, if they're already serious about working with real estate investors and they're already serious about real estate investing. These are the, these are different ways of taking this, the same list, the same lead list and using it in a couple different ways in order for them to either acquire their own investments or acquire, you know, clients as they move forward. Um, Chris, this has been absolutely

Starting point is 00:32:53 fantastic. I love some of the personal anecdotes on how you kind of came into this and how you have been able to scale your own business. In all the years that you've been doing it, what's the one thing? If you could impart one nugget onto an investor, what would it be? Get around other people that are already doing it, right? Like find some other people. Their power in proximity, it's really the right thing. Or I was talking about this the other day. And one of my friends, like quoted Hamilton, you know, you want to be in the room,

Starting point is 00:33:43 the room that it happens, right? And so that's the real key. I think growth is so often taught or sorry, caught more than. taught like all of a sudden you see the path when you see other people doing it and i mean that that was something that i think was was one of the keys to my success is i just i'd listen to podcasts i listen to things like this and i would relentlessly reach out to people and you know what a bunch of people didn't never respond a bunch of people weren't willing to get on a call with me but i was surprised at how many people were willing to get on a call with me and respond and literally just

Starting point is 00:34:22 getting around them, understanding how they're thinking, it dragged me into a new echelon of thinking and earning power by just learning these things. You know, you're able to take all of the information they've learned. And I think Tony Robbins uses the phrase compressed decades in the days by just being around people that, that are already there. That is probably one of my little favorite, my favorite Tony Robbinsisms. Chris Craddock, host the Uncommon Real Estate Podcasts, heard here. here on KGCI, Real Estate on Air. You have made yourself available to some folks.

Starting point is 00:34:57 What's the best way for someone to reach out to Chris Craddock? Yeah, Instagram's probably a super easy way. Just at Crad Rock. I'm also a cheesy high school nickname. I probably need to change it, but it is what it is. No, you don't. No, you don't. I love your Instagram handle.

Starting point is 00:35:17 It's so easy to remember. And then, yeah, Chris Craddick official. which it's officially me, apparently, on TikTok. So, yeah, those are the two easiest ways to get me. You're official and you got an awesome Instagram handle. Chris Craddock host of Uncom and Real Estate. Thanks for joining us today on KGCI, Real Estate on Air Live. Absolutely.

Starting point is 00:35:40 Thanks for having me. KGCI, Real Estate on Air Live. I'm Ian Wheatley and absolutely fantastic conversation just there with Chris Craddock, host of Uncommon Real Estate, Heard here on KGCI, Real Estate on Air. if you want to check out his podcast, it is going to be Aaron tomorrow morning. And some of the key takeaways that I took from that conversation with Chris, number one, first and foremost, he hammered this, right? Know your numbers or prepare to lose money. You know, he pointed out,

Starting point is 00:36:09 you win when you buy. And he couldn't stress this enough. Not understanding the true cost of a deal is the fastest way to lose money. From holding costs and contractor overruns to double closing costs and agent commissions, it's not just purchase price minus ARV. So agents, learn to use deal analyzers and cost sheets. If you have an investor that you're working with that's been around for a little while, go ahead and ask for theirs. Don't bet on appreciation. Use the real comps because, as Chris pointed out, speculation is risk. I think the second key takeaway was if the deal feels off, it probably is. Okay. We were talking about Bruce. somebody and the bridge out signs. Don't ignore the bridge out signs, okay? New investors often get so

Starting point is 00:36:58 hyped to a deal and just doing a deal that they ignore red flags. That emotional excitement, you know, you don't necessarily think of it as something that happens with investors, but that emotional excitement can be real, especially with newer investors. Same thing when you're dealing with first-time homebuyers, right? That emotional excitement just gets people into bad flips. It gets people into bad deals. So agents, make sure. that you're coaching investors to stick to a buy box, right? If the numbers don't work, walk away and walk away fast, there is going to be another deal that comes up. Chris also talked about, you know, financing without a plan is a disaster, right?

Starting point is 00:37:40 As he pointed out, know where your money's coming from before you write an offer, right? Whether that's using hard money, whether it's using partners, whether that's working with a lender, whether that's a self-directed IRA, all of these are options. But only when done with clear guardrails and accountability can be a smart option, right? Chris also shared some of the horror stories of investors flying and blind with OPM and be other people's money. So agents, get clear on financing first. And if you're working with investor clients, ask about their funding early. Don't assume that they're prepared or they're prepped up.

Starting point is 00:38:19 and don't assume that they know yet. Ask the question, confirm the knowledge. Number four, Asian investors, don't leave money on the table. Chris pointed out that if you're only flipping or holding, you're missing out on the other 19 or 20 leads in a lead sheet, right? So most distressed sellers, right? Chris pointed this out pretty clearly. Most distressed seller leads, they do not convert at a discount,

Starting point is 00:38:47 But many still need to sell. And that could be a perfect listing opportunity for you wearing your agent hat, right? Chris's team has turned investor leads into hundreds of thousands of dollars in GCI by converting what a lot of investors would think as a throwaway. So, agents, if you're investing or you're working with investor, build the dual pipeline. Add those listings to your business so you can monetize more leads. And I think my last takeaway from that conversation with Chris was scale without burnout and start your systems down, right? Chris said growth is caught more than taught, right?

Starting point is 00:39:25 So from cold calling to direct mail to paper lead, Chris had outlined the marketing engines that can generate consistent deal flow. But his biggest lesson came from nearly drowning in too many deals without enough systems, right? He pointed out that being $10 million a debt taught him how to fix it and how to fix it fast. So agents, don't just chase deals, okay? Build a system to find, qualify, and exit. And if you're new, get around experience investors, you'll learn from them faster by proximity than you going out and doing this in trial and error alone. And hey, just a friendly reminder. This comes coming Friday focus, we're going to be diving even deeper here on KGCI, Real Estate on air,

Starting point is 00:40:15 on the top, real estate investment mistakes and how to avoid them in the first place. So if you're thinking about getting into real estate investing yourself, whether you're looking at trying to build a book of business around real estate investors, you know, you're going to kind of want to know what those problems are before you deal with them yourself or before your clients end up dealing with it. So be sure to tune in Friday where we will be having conversations with Chris Craddock, we'll be having conversations with Randy Zimnock and many other real estate agent investors that you hear here on KGCI, Real Estate on Air. They're going to be opening up the books and giving you the strategies and tactics that you

Starting point is 00:40:53 need to avoid those costly mistakes for yourself and help your clients avoid the big disasters. All right, I'm going to get off the soapbox here. Let's lighten things up. It's time for real estate confessions. the strange but true moments that you share with us via Facebook and Instagram, but before we get started, we got to get one thing straight. Real estate confessions features stories from the wild world of real estate. Names and details may have been changed to protect the innocent,

Starting point is 00:41:23 and occasionally the not-so-innocent. All confessions are shared in good humor and do not reflect the opinions of KGCI Real Estate on air, its hosts or affiliates. No agent's licenses were harmed in the making of this segment. Enjoy responsibly. All right. Now we're covered. Let's get into it. This is real estate confessions because in real estate truth is always stranger than fiction. I once showed up to a listing, walked my clients right inside, started the whole tour, only to realize it was the wrong house. It had the same floor plan as the actual listing two doors down. We went upstairs and found the owner, in a bathrobe. We all just kind of froze until they asked,

Starting point is 00:42:12 can I help you? We backed out slowly like it was a bear encounter. My buyer still bought, but not that house. My open house was going great. Lots of foot traffic, great energy, until I heard what sounded like running water. A kid had used the upstairs bathroom and then tried to flush what seemed like an entire roll of toilet paper, flooded the whole hallway. I ran upstairs, shut off the valve, and mopped like my commission depended on it because it did. Buyer still made an offer with a request for a new toilet.

Starting point is 00:42:46 Walked in with buyers, started the tour, and everything was great. Until we opened the primary bedroom. The cellar was fast asleep. With an eye mask on, noise machine blaring. Turns out they work nights. My buyers backed out of the room so fast, I thought we were in reverse. We tiptoed through the rest of the showing, whispered toward the kitchen, and believe it or not.

Starting point is 00:43:11 They made an offer and it was accepted. Fast forward a few years later when they decided to sell, we listed with a clause for 24 hours showing notice. I always double-check the house before locking up, especially if there's a cat. But this time, I missed one. It wasn't until I got a panicked call from the seller saying, The cat isn't in the house.

Starting point is 00:43:34 After 30 minutes of anxiety and yard walking, the cat strolled out from inside the cat, couch, not under, inside, seller hugged the cat. I nearly cried. We all live to list another day. You got a wild real estate story of your own? I sure want to hear it. Send us your real estate confession, the crazier, the better, by messaging us on Facebook or Instagram. And while you're there, make sure that you're following KGCI Real Estate on air for more stories, insights, and behind-the-scenes moments. And who knows? Your confession might soon be on the air. Hit us up on Facebook and Instagram, and let's keep the stories coming. Once again, special thanks to Chris Craddock, host of Uncommon Real Estate.

Starting point is 00:44:16 You can hear it tomorrow on KGCI, Real Estate on air. And as part of our weekly Friday focus this week, we're going to be diving into six hours of how to avoid the common mistakes that real estate investors make. So be sure you check in at KGCI Real Estate on Air on Friday. And next week here on Real Estate on Air Live, we're going to be joined by Coach Randy Bird. We're going to be planning to talk about. about how you can create a bulletproof business plan that will bring you long-term success in real estate. That's happening one week from today on Real Estate on air live. I'm your host, Ian Wheatley, be good.

KGCI: Real Estate on Air - Avoiding Real Estate Investing Mistakes: Strategies from Chris Craddock

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