The Science of Flipping - Beyond the Crash: How Real Estate Flipped Their Fate | Mel & Dave Dupuis

Episode Date: May 24, 2024

Today we explore the transformative journey of Mel and Dave, a couple whose trajectory took a dramatic turn following a devastating car accident. The accident, while nearly fatal, catalyzed their entry into the world of real estate investing, a venture that not only facilitated their recovery but also granted them the financial independence to resign from their conventional careers. Throughout the episode, Mel and Dave detail their initial challenges, their strategic pivot to creative financing methods, and how they managed to acquire 12 properties in just one year. They delve into the specifics of managing a diverse and expansive portfolio that spans five countries, illustrating the global scale and versatility of their investment strategies. The couple also discusses the profound sense of empowerment and security that real estate has brought them, inspiring listeners with actionable advice on building wealth through property investment, emphasizing the importance of mindset, resilience, and the right financial tools. — Thank you to Lamassu Leads for sponsoring today’s episode. Instagram - @lamassuleads Go to www.lamassuleads.com - The #1 training and coaching system to launch, grow, and scale your investing business! 𝐋𝐞𝐚𝐫𝐧 𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Turn cold real estate leads into engaged motivated sellers on auto-pilot using the power of A.I! 𝐋𝐞𝐚𝐫𝐧 𝐌𝐨𝐫𝐞: https://www.rocketly.ai/ Have a question? Ask me anything at https://www.askjustin.ai/ 𝐀𝐛𝐨𝐮𝐭 𝐉𝐮𝐬𝐭𝐢𝐧: After graduating from UCLA in 2003 with an English degree, Justin went directly into business for himself. He has never had a W-2 job. In 2005 he got into real estate by co-founding a brokerage in the Northern California area. Quickly he realized that being a realtor was not for him. In 2007 he got into real estate investing full time. 16 years later, Justin has flipped well over 2600 properties, accumulated millions in rental properties, and is an active investor to this day. His success in real estate led him to start The Science Of Flipping podcast and education company, where he has coached and mentored over one thousand aspiring and active investors. He is a nationally recognized speaker and is on a mission to educate as many people as possible on becoming a successful dynamic real estate investor. 𝑾𝒉𝒂𝒕 𝒕𝒉𝒆 𝑷𝒓𝒐𝒔 𝑯𝒂𝒗𝒆 𝑻𝒐 𝑺𝒂𝒚 𝑨𝒃𝒐𝒖𝒕 𝑱𝒖𝒔𝒕𝒊𝒏: “Justin is one of the best trainers in this space. He really gives everything to his tribe.” – Brent Daniels (TTP) “Justin’s ability to connect with people and help them understand what he is teaching, is unparallelled” – Kent Clothier (REWW) “We have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.” – Sean Terry (Flip2Freedom)

All right, Science Flipping Podcast listeners, as always, this episode is brought to you by Rocketly.ai. If you're looking for a seller lead generating system that has automation in AI bot and has sellers coming to you, then Rocketly.ai is your choice. Make sure you head over to the website, fill out an application and schedule a demo now to see the power of Rocketly.ai. Yo, yo, the Science of Flipping family, what is up? We are back with another incredible episode with some incredible guests.

I am super honored to have them on because there was a time that they may not have been able to. They had an incredible car accident, which was terrible, but because of real estate, they were able to rebound, quit their job, and now can empower others to be here. Investor Mel and Dave are here. What is up, you two? Hey, Justin. Thank you so much for having us. Thanks for having us on. I love it. I want to get right into this. I think everyone needs to understand the

power of real estate, and you two are the shining example of the power of real estate. You two went through a life altering, crazy, terrible car accident. And because of that, you were able to quit your job and no longer have to work because you had enough real estate to say, let us recoup, let us get back to healthy, I don't need to work to pay my bills, let's restart this life. And let's start the whole episode right there. Tell us about that moment. Yeah, well, Dave and I had been versing from properties, the traditional way at first, and then we got into creative financing. And that's the year we bought 12 properties in 12 months. and they're solely owned so we specialize in in solely owning all our properties those are venture partners and we're actually on our way to it uh to a conference real estate investing conference right everything goes great but we're telling anyone how we were

buying these properties not back then uh we weren't on social media like we are now um and we were in a horrific car crash we're actually passengers in the back seat of the suv it was just dave and i as passengers and a transport driver that was driving carelessly was driving in between lanes they hit a vehicle that hit us we hit the guardrail and we literally started rolling four times across the highway we landed upside down and i have three kids so it was that moment where I just remember closing my eyes and hearing the cement against metal and knowing that I'm dying and there's nothing I can do. And it was the scariest moment of my life. And by luckily, luckily we survived.

And thank goodness we had real estate. The one thing that Mel had said when we were at the hospital and after x-rays and cat scans and everything that checked out to be fine she was worried because the next week she literally had to go on a business trip and she's like i never want to go on the highway again that was the first thing she was talking about we're like thank goodness we have real estate that you don't have to do this anymore right it was like why are you even talking about why are you talking about work right now i don't know but i was so i didn't want to spend one more moment of my life doing something I didn't love. So fast forward, we're back home. I was diagnosed a few days later with a really severe concussion. So I could not go back to work.

And I was doing a lot of physio on that. And after months went by, then it came the time, the phone call that, hey, Mel, you know, I think you're ready to come back to work. And the anxiety just came in. And I was like, I can't do this. I don't want to go back. And Dave's like, don't go back. I'm like, what do you mean don't want to go back. And Dave's like, don't go back. Am I quitting you? Don't go back.

It's like we have enough real estate, just don't go back. And it was so freeing in that moment of having that. It's like real estate's not about the money. It was the freedom of choice at that time, but I was able to just walk away and do what I needed to do for myself, for my family, for my health. And then Dave, who was a firefighter, shortly afterwards quit his job as well. And then Dave, who was a firefighter, shortly

afterwards quit his job as well. And now we're full-time real estate investors. You guys are giving me shivers thinking about the freedom that you've been able to create. Like, thank God you obviously survived. Very happy that you two are here. But this, how empowering is it for those watching and listening to understand, like, you don't have to have this extreme event to change your life. You don't have to go through what you went through, right? I mean, that's really what you teach your community is like you don't need a near-death incident to quite literally quit being a fireman, police officer, accountant, lawyer, if you so choose. Talk to us just about that,

like what you even are passionate about because it's so, you know, people feel as if like they're trapped in life. They feel like they have to keep their W-2, that there are no options. And I know you two, like with every cell of your body, totally disagree. A hundred percent. And that's the thing like anybody can do this with the right knowledge, the right tools as well. And if you're working full time, that's a good thing. You want to be doing it a bit of a side hustle at the beginning. That's just a reality, right? We like that you have an income. That's a good thing. But it's a great way to get there way faster than working all the time. identifying we're big on mindset identifying your why like what my big why that i got into let's say was i wanted to be there for my two daughters after school and i want to see my little guy hop on the bus and get off the bus and and all those kind of things and it's identifying your why one of our members that i just want to be able to make rice crispy squares for my kids whenever i want right so you know what's important to you maybe it's retiring your your parents right

it's finding that why and we always say it, like there is obviously a science to what we do. There's a method and all that, but it's not rocket science. Again, I was a firefighter, not a rocket scientist, right? So if we can do it, anyone could do it. Yeah. I think it's funny. There is a process, right? And so funny enough, the podcast, the science of flipping, right? So apropos, but there really needs to be some level of process. I love that you guys talk about like, make it a part time hustle. I'll give a quick example. And then I want you guys to kind of share your own. I have community members that literally will continue working, because there's enough of a process that they they don't have to quit if

they don't want to. Right? Do you think people need to go all in or do you think they can keep it a part-time hustle? Where do you guys stand on that? I totally agree with you. It can be a full-time or a side hustle. Like at the end of the day, in the beginning, I used to love being a firefighter, right? Loved it.

I wanted to get a big tattoo on my chest, Maltese cross, like, and I was like, just think about it for a little bit. It might not be your career forever, but, uh, if I still had the passion and love for it, I could have absolutely continued doing it. It was just in the end, it just wasn't my passion anymore. And I remember thinking I could be spending, cause we did 24 hour shifts. I remember thinking I could be spending my time looking at real estate, probably while making more money and still being with my family. But that was my journey. But if I still loved it and it was still my passion, a hundred percent, this could have been a side hustle. So it's really real estate can meet you

where you're at in your journey, right? I think you see that flexibility. Again, it comes down to that freedom of choice, right? If you, over time, accumulate enough real estate, that system where they're cash flowing, then maybe if you decide that you want to quit, as long as you're properly set up, you're able to do that. Or maybe just work part-time, or maybe it's just early retirement that you're after. It's whatever your goals are and really identifying that. You guys are buying in five different countries. Yes. Yeah. So I really want to highlight not just that. There's so much I want to unpack about that. But first, your entire business is virtual.

Yes. Yes. What is the thing that someone who might sit there and go, how are they possibly doing that? What's the first thing you want to tell that person? Probably around mindset. At first, I thought I had to invest where I lived. And as soon as I realized that other people are doing this, I just need to find out how they're doing it and create a system that works and have the right people. How beautiful will my life be,

right? I have the flexibility of working from my laptop anytime, anywhere, and look for deals anywhere and a car properties anywhere because it gives you that flexibility so it's probably the mindset around just you know all you need to know is know how to do it that's the only thing really stopping you is the knowledge piece around it and having of course right that means having the right property manager in place the right investor focused team and all those things too yeah so how the next question that person is gonna because i run a very similar virtual business, right? So I know the questions I get.

So I want you guys to answer them. So how do you find the property manager? How do you find the contractor? How do you find the boots on the ground? How do you find the agent? How do you get the pictures? How do you do all that? Yeah.

And I love that. And like Mel said, yeah, everything is virtual. So it's almost reverse engineering. So having those contacts right in our network uh being in different masterminds but the networking is huge and then for example let's say if we start with an investor focused mortgage broker or an investor focused real estate agent once you find those people you can trust they have connections right so let's say we find an investor focused real estate agent from From there, he or she will introduce us to the property managers they use for their buildings or for their clients. And then from there, they'll have general contractors that they use as well. Obviously, you're going to have to kiss sometimes some frogs and then have some mistakes. It is what it is. Not everyone is good and perfect, but it's relying on your network.

And once you find that one key person, it's going to the next one. Yeah, and I think it's also remembering to oversee it, right? So, of course, we have a lot of properties. However, it's still making sure that things are getting done properly. Now, just because it's set up from day one, you know, you don't just wash your hands. You still want to oversee the projects by a distance, you know, having those pictures, seeing who's renting your news, all those kind of things. Or having somebody as part of your team as you scale. You can have other people doing it as well.

But just making sure that you're finding the right person from the beginning. If not, then you find the next one that's going to be good. And then you make sure to treat them really, really well, of course, so they want to be part of your team and to continue to give as well. So really creating a win-win with them as well. This episode is brought to you by my friends and today's sponsor, LamassuLeads.com, the real estate industry's only enterprise-level call center. If you're like me and you're tired of underqualified leads,

junking up your CRM and wasting time and money, you need to do what I did. And that's reach out to LamassuLeads.com. Highly qualified, highly motivated seller leads. It's that simple. They're an all-in-one service. You've never experienced anything like this before. They do all the heavy lifting for you while becoming a strategic partner in your real estate investing business.

They have the most badass office in the industry you have ever seen, and I hope you see their operation. Visit their Instagram at Lamassu Leads and give them a follow. Seriously, if you need more motivated seller leads, if you're tired of babysitting cold callers on the other side of the world, Lamassu Leads is your answer. Go to LamassuLeads.com to learn more. That's Lamassu, L-A-M-A-S-S-U Leads.com. Now, given that you're in five different countries, let's talk about networking, right?

It's not like you're just like going to a local RIA meeting, right? Talk about your strategy with networking. What are you doing? How are you doing to the best of your ability networking within even a different state, right? Like I'm not even talking about five different, like how do you even do it from out of state? Well, much like the rest of our business, we're very virtual and we are busy parents with three kids and we're very big on always being at their games

and being present. So that's always our number one. So for us being able to, of course, we'll attend some events from time to time, but outside of that, it's just really building our network, networking within, at first it was maybe locally, and then it's branching off from that. And then you just never know, always giving value

because you never know what's going to happen. And I'll give you an example, Justin. One of my members inside our community, she's from New Jersey. They were purchasing properties using some of our creative financing strategies. And now they were doing development in the Dominican Republic. We ended up purchasing two of their units. Yeah, Punta Cana. Exactly.

You just never know what your network is going to look like and what kind of value you can bring to each other as well. So it's always give, give, give, network well, and be open to various opportunities as well. Yeah. So you bought, I love Punta Cana, by the way. So do we. I'll go stay at yours. I'll pay you guys versus the stream. There we go.

We'll find a trip. So networking is a big part of this. What would you consider, you know, for you and your own business, some of the strategies that you guys are using consistently to continue to network, build your rapport. I mean, even to the point of this podcast is through networking, right? You're here because networking can bring you here, get into my world, but then my world can get you hundreds of thousands of people with eyeballs on YouTube and listening to you on Apple and all this other stuff. What are you guys currently doing to continue to level up,

whether it's masterminds or whatever the point is? Well, I was going to say social media, right, is huge. And I know like when we started, it's being authentic. When we started, you didn't want, you're like, no, no, no, no. Don't pretend you're all on board because you weren't. I had to convince you. She had to convince me to do a website. I'm like, how is a website going to help us make more money?

Anyway, so I was not on board with social. So if you're a guy like me thinking, ah, social, that's for, you know, not people like me, you're totally wrong. So, yeah, definitely get on social. Get your message across. You're going to find a lot of people that are into what you're into or that like what you're doing. So that is huge with networking. I find like when we go, like, for example, we're in the same mastermind when we go to

networking, it's a lot of listening. Like I just, I love listening to what other people are doing. Cause again, even though we found success, we're not perfect. We still have four coaches. We're just, I like going in and being a sponge and listening to other people you know processes after the fact after the actual in-person stuff is done then we can have elaborate conversations and kind of say more of our side but yeah i like going in and being a sponge and again i think it's that value piece as well if you're able to help somebody even if you think maybe they can't help you back for whatever reason right different venue you never know they might have that perfect contact that

you didn't know that happened last time right um we and we found a perfect accountant and giving out somebody else all of a sudden now they're they're introducing us it was just this value that i i went in with zero intentions of receiving just giving um and all of a sudden they were able to to give back to us in a completely different way, unexpectedly. And it's been such a blessing in our business. So going at it with that as well. So giving, being willing to learn from other people, being willing to share what you are great at, right? We all have something, even if you're getting started, maybe what you have to offer is that you push outside your comfort zone and you're showing up, right? While

other people are feeling the same way and you can start connecting based on that. You guys mentioned, Dave specifically mentioned, you have four coaches. Yeah. So I get asked this all the time, but I want you guys to really talk about this. You have your own community that people can go out, reach out to you guys and be a part of your community.

What's the community name? Action Family. Action Family. First and foremost, make sure you're following these two. I mean, I could not have be more excited about having you two on. They're doing this in five different countries. Investor Mel and Dave on all platforms. Action Family is their community where they will dive in.

They will help you. They will get you guys to where you want to go, focusing on creative finance deals and doing direct deals. And so we'll talk about their strategies here in a second. But I want you all, and viewers to realize Mel and Dave have done this now for 20 years or so. I've done this for 17 and every year you're listening to people that pay for coaches, have coaches. Why do you keep cutting the check to get coaching? Okay. If we just talk the, they push us and they make us more money than the checks we write

to them. Like if we want to just talk money, uh, otherwise it wouldn't make business sense. Right? So the business side of it, they make us more money than we pay them. That's why we have them. And then the growth side of things, again, they, uh, we have life coaches, we have business coaches, we have real estate coaches. It's just, no one can know everything.

And sometimes, especially Mel and I, like we're a couple, we work together all day, every day, right? Sometimes, obviously, we don't agree, but most of the time we do. Let's be real. But it's, we have each other, right? We're each other's sounding board. Sometimes you need that fresh look of, hey, no, why aren't you doing this? Oh, like our coaches sometimes will drop a single nugget that is so obvious and we're like, why don't we think about that? And it's, yeah. It upsets us. 100%.

It's a return on investment, right? If I'm never gonna show up and not listen to them, then I don't need, you know, there's no use in it. But I know that if I'm gonna invest, I'm gonna put that money to work and it's gonna make me some money in the end. And that's why we always have coaches and I'm going to invest, I'm going to put that money to work and it's going to make me some money in the end. And that's why we always have coaches.

And I rather find out through because I don't know what I don't know. That's just the reality. I'd rather learn from somebody who's been there, who's already made the expensive mistakes as opposed to me doing it all over again. We've been there at the beginning. We weren't always investing in coaches. And we thought, hey, I've got this. I can figure it out. And yeah, I figured it out.

But it cost me a whole lot of time and money and time right so instead of going through life the hard way why not there's an easier path and that's why I will always always have a coach 100% it is funny because we at a level of success continue to understand the power of it those that aren't where we're at fight against it right like oh i don't want to cut that and they come they become like i call them alligator armed right like i don't know yeah but then you're not at our level and etc so let's talk about strategy okay it's called the science of flipping let's talk about how you guys are doing the deals in five different countries how you're finding them how you're putting them together what is your main go-to strategy? So the three that we love, seller financing is our absolute favorite, right?

Finding owners that have equity in the asset and that are willing to hold mortgage for you for favorable terms, right? It also helps them tax-wise. So that's our go-to favorite, using people's retirement funds, right? Self-directed, that's our second go-to favorite, using people's retirement funds, right? Self-directed, that's our second, you know, go-to favorite. And our third one is promissory notes, raising funds and doing, you know, contractual agreement, which helps us with down payments, deposits, renovation. So with those three, that's literally what we've used

to build the portfolio in the five countries. Yeah, and we do a variety. We do most family, we've done condos, we've done single dwellings. We bought our cottage or our lake house that way. And that's the thing, right? We were really, really, I suppose what's really important is that it's not about the creative financing piece, but it's the exit strategy that comes with it.

So, yes, we raised millions of funds, of course, throughout the years, buying all these properties. We purchased over 250 units. Now, however, what's most important, before we touch anybody's penny, we always make sure we have a clear exit strategy. So just because somebody is willing to hold financing, I have often people coming to me, Mal, I have a deal and it's owner-funded, should I buy? I'm like, well, do you have an exit strategy? I don't know.

Well, don't buy it if you don't even know that. You need to pay them back, right? So it's making sure that you're, yes, you can fast forward your growth way faster than using your own money, but you got to make sure to do it properly so that way you and your lenders can be successful in the long run. So what would be if I came to you guys and said, hey, I have a deal, and I even have Fred who would be willing to lend me some money on this deal. It's a seller finance deal. I need the rehab cost, let's call it, right?

What would your advice to me be? I would want to underwrite it, right? So I'd be like, okay, let's put it. We use our cash flow analysis matrix. I'd want to see where's the asset at? How much are we putting into it? What's the after repair value? What are the comps to's the after repair value? You know, what are the comps to justify the after

repair value? Am I getting enough of a lift to be able to either ref because we like to buy and hold is my refi new mortgage amount enough going to be going to be enough to pay everyone out plus interest plus make a profit. So or if I'm selling it once I've paid all the agents and all the so just basically making sure that the deal has enough meat on the bone and double checking to pay everyone out and have a profit. So, and I know you all, you know all about that, but yeah, it's, it's. Yeah. Yeah.

Well, and this is because you and I, the three of us, we really have a very similar business model, which is great because it's just showing that it works, right? I won't, and I want to hear your philosophy, I personally won't buy things over $300,000 for the exact reason, Dave, that you just said is I need to make sure there's enough meat on it that if it doesn't become a good rental because of let's say interest rates or whatever the case may be, or maybe the budget became way too high on the rehab that I can still sell it for a profit as a flip. Do you guys have some like no fly zones or pass rules that you're just like, we don't play in this ballpark because of this reason. We avoid this because of this reason. We love this because

of this reason. Do you have some of those guidelines? I love that you have that. And it all depends on the area. So for example like in costa rica when we do our short-term rentals we'll have it where a similar sweet spot where it's not these millions of dollar mansions that have these huge carrying costs every month because then if there's a dip so it'll be that typical you know under 400k and we know that the the occupancy rate is good or if we're doing a multi-family you know, if it's anything over, it depends on the area, anything over like 5% vacancy rate, that's a no fly zone for us. Like I'll look at these beautiful deals in Texas,

but they have 9% cap or a vacancy rates. And I'm like, okay, it's seller financing and a cashflow. Like, but so we have, definitely have no fly phone, no fly zones as well. It just depends on what, you know, what type of investment and where. And I agree with you, Justin. Once you have those parameters, just don't reinvent the wheel. Stick within it. And then you might have this carry, oh, this one's $500,000. Justin, you can make this much. And you're like, no, it's not part of my process. That's not what I do, right? I think it also depends on CJ's global portfolio, right? When we started, we didn't have a lot of

money. We had to be very, very strategic and very careful because we started, we didn't have a lot of money. We had to be very, very strategic and very careful because we knew that we only had so much backup money if something happened. So we definitely weren't buying a 20-plex, for example. We were sticking to the smaller ones because if something went wrong, at least with that one, it was more feasible

to fix as well, right? So it's also realizing where are you at in your journey. Stop comparing yourself to other people that's been in and done this for 5, 10, 20 years and just do it wisely, strategically, based of course on the areas and the parameters as well. This is one of my favorite episodes just because we're so in alignment with some of these things. I'm just like, dude, you guys are amazing. So again, make sure you're following them. They are absolutely amazing investor, investor Mel and Dave. But so have you guys ever structured a syndication on a deal that was not

a fund based syndication? What I mean by that, just to make sure the question's clear, instead of going out and creating a true fund and spending 15, 20, $25,000 to create a fund to syndicate it, have you ever structured a deal where you brought five, 10 people in as an ownership group and bought, let's just say a 20 door apartment? We have not, we've looked at it multiple times. We have not done a syndication, to be completely honest with you. It's mostly just raising other people's money, not doing any equity and getting paid them them interest we have done in Canada it's there's a there's a different way of doing it to it we've used it's called registered funds in Canada and you can raise multiple

registered funds multiple people can put it in and do like a syndicated mortgage type thing on a particular asset so we've done different types but not an actual syndicate like like you said Justin yeah the the other question I think we're gonna get in the YouTube videos is like, how do you find out where the vacancy rate is? Where do you guys look for vacancy rate to know that when they're analyzing deals? So I'll use different, I'm trying to get a site right now. But honestly, this is the thing.

Once I find my trusted people, so once I find that investor- focused real estate agent in that area, and again, I'll interview so many of them, and I'll ask them different questions. Do they have a portfolio? I'll ask them about cap rates, I'll ask them about price per door. And what do they see for market rents? What do they see for comps? Like all by self, we both really analyze them. And then when I say, Hey, what is the vacancy rate here? What are you seeing in your units and your portfolio? I take that compared with the comps, right? And the recent sold, that's where I take my really concrete numbers. And I'll talk to the appraisers because at the end of the day, the appraisers are the one that's going to give us the valuation for the bank,

either on the way in or the refinance. So I want to know what they are seeing for vacancy because that's really what's going to matter. So I like talking to those two. Of course. People don't, I don't think people wait vacancies enough. I'm glad you brought that up. You know, there's always the numbers. What are you buying it for? What are you rehabbing at?

What's ARV? What can you refi it? People don't count on vacancies. This is actually why I, and I want to hear your point of view on this. I actually tell most people don't start by buying rentals. And the reason being is because they usually don't account for exactly that. Maintenance and vacancies. They've accounted for everything else. And then they go buy a rental and then they have two months of the year that is vacant, which basically eats up most of their profit margin because they're paying that to the loan, right? Talk to me about your philosophy kind of about that. I don't love starting with

rentals or buying like one rental at a time. Love to hear your feedback on that. I think for me, it just depends how you're doing it, right? So exactly. If you're going to be doing it, then you have to have the system, the strategies in place. So when I started off, you know, younger Mel and dave didn't have that much money wanted to get into real estate my first one was a underperforming but not a huge flip right i didn't have to tear about part of the you know it was just a little bit tlc some paint um so some work into it but nothing too crazy and of course as part of my analysis was calculating all of that, calculating my

vacancy rate, calculating my renovations, and then calculating for, I don't know what I don't know. And if something goes wrong, right? So we're very big on, you know, Dave always describes himself as an onion, lots of layers of protection, right? But when you're underwriting your deals, you shouldn't be doing the exact same thing, right. The more expenses you have to put into it and the more units you have, the more chances, the more expensive it's going to get as well. So just as long as you have a solid plan to doing it. If you're trying to go at it blindly and you don't have the proper education and all those kind of things, then yeah, you are more likely to fail.

But if you're doing it and you're calculating and you're following a system, then it can be done certainly efficiently as long as you know what you're doing. Absolutely. Let's talk about some of the creative finance stuff that you guys mentioned briefly. Let's do a little deeper dive on just like, what are you doing? How creative are you getting? What are you looking for? Where are you finding the right properties to do the creative financing? What different structures? I mean, I think creative financing is such a large, vague term. Let's talk a little bit more about that. Yeah. And what we focus on is really the creative financing, no joint venture partners.

So when Dave and I started, not there's anything wrong with joint venture partners. That's just the branch that we decided to go in. So we keep all the cash flow, all the appreciation, all the equity from the deal as well. And we use the method that Dave described. So that's been our niche is finding the right deals where you're able to do that. So that means we're looking at a lot of deals. We're definitely looking in markets where returns are best. I love investing. I love having a diversified portfolio, right? We have multifamily, we have single dwellings. Sometimes we flip, sometimes we diversified portfolio, right? We have multifamily. We have single dwellings. Sometimes we flip.

Sometimes we buy and hold, right? So depending on the actual deal itself. So we don't have a cookie cutter. We only do this. We look at the deal and we see what makes sense with that specific deal. Sometimes we're able to make it a go and sometimes often we might have to walk away. We got used to getting a lot of no's, right? Yeah, you guys are deal architects. I mean, you engineer a deal if you can and architect it where and if it can't work, it can't work. Who are you targeting to find your best

creative finance deals in terms of lists, marketing, sellers? I, again, because we like doing the seller financing, I love finding sellers that have had it for a while, right? Maybe some mom and pops that have had it for a while. They've got, they've had it paid off because they've owned it for 30 years. So they've got tons of equity in it. And most likely their kids don't want it. And it's now becoming something

that used to be a love of theirs has now almost become a burden. And they've, I don't want to say they've let it go, but there's some deferred maintenance. The rents are not a market rent because they're like, you know what? As long as it stays full, you know, as long as, you know, less, less maintenance, the better. So that's our, like, I love finding those underperforming assets where we can go in seller financing, refresh the units, get it up to market rent and just do it basically a burb, but get a quick lift and refinance it out and pay them out, which they're happy,

right? So that's our perfect deal, if I had to describe, you know, in Avatar for our deals. Those are the ones that we absolutely love. And sometimes it comes down to speaking with the seller, if you're able to, but sometimes you don't know who the seller is. I'm thinking of our deal in Costa Rica. The owner was in Switzerland or Switzerland or something. Yeah. We never met them. Right. But again, it was, we met through our investor focused agent there who understands what we do and was able to have that conversation.

We're able to make it a win-win for example. So it's also, if you're able to speak with the owner, if it's not listed, of course, and yes, definitely have those conversations, explain why they should do this, right? For a lot of reasons, this can be a true win-win for many of them. But also not being afraid to work with investor-focused agents as well, as long as they understand the method as well. Yeah, I think people underestimate the power of working with a really good agent. I mean, you know, they get a bad rap, right? But the reality is if you find a good investor-focused agent who understands us, they're worth their weight in gold, really. The year we bought 12 properties in 12 months, they were all multifamily. So that was 56 units. Probably half of them were listed and half of them weren't, right?

So there's definitely a lot of power looking at both, right? If I'm only looking at three deals a week, but my neighbor's looking at 30, statistically speaking, who's going to win? I want to win. So I'm going to look at a lot of deals, right? So are you guys, how do, let's talk to the person who really wants to get in the world of rentals. You and I both know it's not always as pretty as it seems, meaning the income, right? How are you guys paying what through buying the transaction or are you just relying on the rent that's the only income you guys are seeing is the rental income or is there a way that you are strategically acquiring them wholesaling it yourself or otherwise where there's a chunk of money whether it's in the refi wholesaling it yourself or all the above

how's the majority of the income coming into the business? And I love that you asked that. So, and it literally is that, Justin, a little bit of everything. So in the beginning, like when Mount Quarter Job and we did, we concentrated on just high cash flow markets because we basically reverse engineered. We went to the banks and said, okay, take away our employment income. How much rental income would we need? How much portfolio income would we need for you to continue approving us for us to continue you know purchasing so we did that so that was our focus in the beginning just the cash flow right taking distributions and dividends from from our portfolio now we know we rely on a bunch of different things so we'll do the flips right we're doing one in

Cape Coral right now so we'll do different flips we'll do some wholetailing sometimes they're doing a wholetail and oh well we don't know yet might be a hotel there might be a wholetailing or it might be a flip in Ohio as well. We've got a boutique hotel in Costa Rica. Again, we might do a refinance on it. We might sell it.

But the main thing, we'll have our multifamilies, our racehorse buildings. They pay us distributions whenever we need the money. And then we kind of have other projects. But in the beginning, it was definitely just the cash flow from the multifamily, which allowed us to walk away. And which allowed us also to have that cash flow because we were strategically investing in secondary markets

where the cash flow was higher than in certain markets where it's hotter, where you just can't fight. I mean, you can't change the market. So find those markets where you can cash flow more. And now, of course, yes, now it's great to get those big refis where you're able to refi and get $150,000 or $200,000, right? And at first, what we did when we got those refis is not buying the boat and not buying the fancy cars and all those things. It was putting it right back into our portfolio and keep building our portfolio. And once we got to a stage where we're very comfortable, then the luxury came afterwards.

So I think that's a mistake some people make. They make $100,000, they go buy a new truck with it. It's like, well, you could have purchased so many properties. I could have bought 10 trucks for you, right? So just be very strategic when you start cash flowing. Just because the cash flow is now, you want to make sure you have that long-term plan set up properly. Yeah, people have immediate gratification needs, right? I mean, the best of the best to realize this is a long game. So you might have to sacrifice one, two, or three years, but then to your point, instead of the one fancy nice truck immediately, you can have two or three trucks in three years if you just wait play the longer game

which three years is not long by the way but the point is still being made right and so there's no i think one of the things that is important to understand is like the lending component are you going to banks when you're doing these refis and how do you treat that or how do you do that when you're going to different countries right from canada us we talked DR, we talked about Costa Rica, like, where the hell are you finding these banks that lend in these places? So yeah, so Canada, US, in the beginning, we'll use while seller financing and mostly creative, or we'll do DSCR or asset based lenders, right? Those are our favorite. Because sometimes the assets don't don't have the ratios to go to the financial institute, especially in the beginning when you don't have that portfolio backing. So those were,

those are definitely the go-tos for us. And then once, once they become, once you've lifted them and they become those racehorse buildings, then you know, more of the traditional financing. For Costa Rica, we do have a lender, but they'll, only, I believe it's 65, yeah, only 65% loan to value. We'll use a lot of promissory notes for those as well or registered retirement funds. Dominican, again, it's mostly cash or refis from Canada and the U.S. to pay for it. So, and Mexico as well. It's mostly, they don't finance us there. So, it's taking money from other countries. The cool thing with Costa Rica is,

so for example, we had bought three or four basically all at once in the same year in Costa Rica with funds borrowed from Canada and the US. So we did the renovations, got the lift, sold them. And now I sold two of them. And those two, because they had lifted enough, we paid back all the investors. And then the other two that we they had lifted enough, we paid back all the investors. And then the other two that we had in Costa Rica, we paid those off. So it's just a different play where North America, we love debt. We love the debt. We love taking it out. But in Costa Rica, it has to be paid off because it's not as friendly for financing. So it just kind of depends as to what we're doing where. And you're just using promissory notes essentially for all the private capital.

Is that correct? Yeah, for most of it, unless it's the seller financing. So that's our... And again, like Mel said it earlier, because I see people all the time, they'll borrow money. They give investors like us a bad rap

where they just, they borrow it and then they don't do what they were supposed to do with the money or they go on trips or something. And it's like, what are you doing? Like that that you're you're you're hurting all of us so as mel mentioned like our exit strategy has to come first we have to know how we're going to pay them back otherwise we just don't touch it and walk away from the deal we see it sometimes people are just in growth mode and they just buy buy buy buy buy buy buy and that's fun and that's fine

that's the fun part i love buying as well well, right? I bought 12 properties in 12 months. I'm all about fast growth. However, stabilizing your portfolio is more important than buying. It's making sure that your assets are where they should be. Your finances, right? You grow quickly. Well, all of a sudden, you need bookkeepers. You need financial controllers. You need people in place to make sure everything is set up properly. You need to make sure that you're paying that money back. You need to make sure that you're not borrowing, of course, never borrowing anybody's money to pay somebody else, right? Like it's all, it's just making sure everything is set up. So, and that's something that it's okay not to be ashamed of. Dave and I will do that as well. We'll have huge growth and then we'll stop for a while

and we're just stabilizing, really overseeing the project, making sure they're exactly where they should be. Why is this one behind? What are we going to do about it? Making sure we have the right people in place. And then once we pay back all those lenders, then we'll do it again type of thing. So it's really, really making sure that you stay on top of your finances and of the projects as well. Because this is about long-term growth for yourself, for your family. You have to make sure that you're doing it properly. Yeah, as you guys can all hear and see, these two know what they're talking about, right? I mean, there is a system to this. This is not, don't go out there and raise a bunch of capital and not

know what the hell you're doing because you two are right. You know, people use it in the wrong ways and things of that nature. Contractors are pretty bad at that too, right? So guys, I really appreciate this. I want everyone to be following Investor Dave and Mel or Mel and Dave. Specifically, they have an incredible community where they're teaching all of this within the community.

Where can they find the community? Yeah, so if they go to Investor Mel Dave, I have actually a free video where we explain what we discussed in even greater detail as well. So follow us. We're on Instagram, YouTube, Facebook, TikTok, we're all over. And if you click the link, you'll get some free training videos, some free emails as well. And we'll be able to help and guide you

through your journey. Yeah, you guys are incredible. You've done this a long time. You're doing it in five countries. You have 250 doors. I mean, it's just, you guys are awesome. I really appreciate you guys being on here. Make you follow them go to the website thank you guys very much yeah thank you for having us right on all right guys that is the end of the science flipping episode stay tuned for next week as i have another incredible guest peace all right you guys great job i love it i i know i could have peppered you more, but then, you know, I don't want, I want the people to have enough, like, Ooh, I got to contact them. Does that make sense? You know, that's good. I don't, I'm, I'm, I'm big on not overly trying to pitch. I want,

cause I think that works better on just say, follow us if they like us or they're going to come and get to know us on, on, on the outside. So that's great. I love it. You guys are amazing. Hopefully we can get together sooner than later when you guys are back in the States. Let me know. Well, September, hopefully if you're going to Tampa. Are you going to the next Mastermind? I'm sure I'll go in September.

Did you end up going this last round too? Hockey community, of course. But September should work. We're hoping so fingers crossed let's do it well let's definitely go hang out and chat a little bit uh while we're both in tampa in september yeah that sounds great okay thanks for having us on just yes thank you all right guys appreciate you made it happen anyways that's right okay nice meeting you okay bye for now bye for now later