The Science of Flipping - How to Be Flexible with Complex Transactions | Logan Fullmer

Episode Date: March 22, 2024

Welcome back to another exciting episode of our podcast. Today, we have a special guest, Logan Fullmer, who epitomizes the essence of versatility in the realm of real estate investing. Logan’s journey demonstrates the power of adaptability, and his strategies reveal how to thrive by embracing diverse opportunities. Get ready to dive into the insights of a real estate investor who refuses to be pigeonholed. Logan Fullmer's journey is a testament to the power of adaptability in real estate investing. His ability to see the potential in varied deals, combined with a strong network and a knack for problem-solving, has positioned him as a leading figure in the industry. For investors at any stage, Logan’s strategies offer valuable lessons on navigating the complexities of real estate with flexibility and insight. The #1 training and coaching system to launch, grow, and scale your investing business! 𝐋𝐞𝐚𝐫𝐧𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Turn cold real estate leads into engaged motivated sellers on auto-pilot using the power of A.I! 𝐋𝐞𝐚𝐫𝐧𝐌𝐨𝐫𝐞: https://www.rocketly.ai/ Have a question? Ask me anything at https://www.askjustin.ai/  𝐀𝐛𝐨𝐮𝐭𝐉𝐮𝐬𝐭𝐢𝐧: 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.  𝑾𝒉𝒂𝒕𝒕𝒉𝒆𝑷𝒓𝒐𝒔𝑯𝒂𝒗𝒆𝑻𝒐𝑺𝒂𝒚𝑨𝒃𝒐𝒖𝒕𝑱𝒖𝒔𝒕𝒊𝒏:  “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. What's up, Science Flipping family? Welcome back to another incredible episode. You guys are going to really like this. I have a special guest with me.

Logan Fulmer is what I would define as a utility belt. He's dynamic. He defines what I believe in within real estate investing, and that is to not be a one-trick pony and to make sure that you can do it all. And this man right now has been doing it all since 2015. What's up, dude? Good to see you. All right, man. Well, let's talk a lot about what you're leaning into here in 2024. We'll kind of get to what you've been able to do um but bro you are what i would consider the epitome of what i preach you're dynamic you don't just stick to one thing

you're diverse you you know you're flexible you're fluid depending upon the deal and what comes at you you create it right and that's what's yeah that is what has helped me have a 16 year career i know that's why you've had a 9 10 year. Talk to me about how you've been able to do that within the industry. didn't know what I was doing. I was just looking for some way to make money. And it was in the single family house and single family lot business. And at that point, I was just looking for ways to be profitable. I found all these interesting ways. And as I grew, we had much more of a custom operation, I guess you could say. So when something would come in, the most important part is I have to see, am I getting a substantial discount to market? So I have equity, I'm covered. And if I just butcher the whole thing, I can sell it and not lose any money and walk out at almost any point. As long as I can do that, I'll take a look at almost anything. And while

there are times where I don't feel like my operation is quite as fast as it possibly could be there, we pick up different kinds of deals all over the place. And it's led me to some of my biggest deals that are exponentially larger than the deals in the past to bring me to a new comfort level all the time. But what it's required is i have to be really good at resources like my rolodex they say that you know your phone is the most important part yeah now i no longer try to solve problems on my own who do i know that can help me fix this is it a lawyer is a developer is it someone i met somewhere that's how the problem gets solved and how i know how to do new so you're really a deal architect you know and we're kind of discussing kind of your background. One of the things I do want to

focus on is this title stuff that you're doing. Yeah, that is phenomenal. I mean, when you're telling me the numbers you're telling me, I'm like, holy hell, what am I doing wrong here? Right. But, you know, talk to us about that concept, being a deal architect, when something does get thrown at you, do you analyze everything? Do you take time and sit down and look over everything? Are you looking surface level for a couple things to see if you should spend some of your time? Because I'm protective over my time right now, just like you have a whole engine that works without me. But I don't want them wasting their time on stuff that really is going to be a better dead end than it's going to be a better dead end

than it's going to be a deal for us. Does that make sense? It does. So talk to us about how to like, especially the people, the newbies listening to this or watching this. If you are listening to this, I'd encourage you to watch the episode on justincolby.tv so you can see my man Logan right there. But there's a lot of people that will like spin their wheels trying to analyze

a scenario that isn't more of a traditional deal. What's your threshold? Like when do you do it? When do you not? You know, the way I'm looking at stuff at first is I got to figure out a rough idea of what it's worth just real quick, literally in 30 or 60 seconds. Can I figure out what I think it's roughly worth? And you can be off by by a lot but if you establish that and I established that my entry point is substantially less or my potential entry point then I'm interested so the first place I'll go and early on I was only doing this and I went through kind of what you were saying spend all this time analyzing all these deals and I'm frustrated and I'm not look it's not efficient and then I started to go to the process of I'm gonna look at the appraisal district they're these days the appraisal districts are now getting pretty good 10 years ago they were

way off yeah nowadays they're pretty close now whether the house is remodeled or not whether the building is full occupancy or not whether the land is development ready or not is different i actually get the value there sure and if i'm getting it for 50 or less of that number i say okay i need to look more. Of as is. And so I don't mean to break you up because we're going to have different experience levels of listeners, right? Right. So single family home as is value is pretty easy relative, right?

Generally. So let's just use that example because that's what most people, that's what I looked at the first times. A house, the red fence is worth 150 grand. Now if it's in a subdivision neighborhood that's been built the last 20 years and all the homes are similar, that's probably dead looked at the first times a house the red fence is worth 150 grand now if it's in a subdivision neighborhood that's been built the last 20 years and all the homes are similar that's probably dead on sure if it's in a downtown neighborhood that's changing and it's got a bunch of old houses being I just thought of Miami but then you have a bunch of new stuff next to it that can be a little bit different yeah but I'm just going to go to the appraisal district or the

tax office website and if it says 150,, I'm a player at 70 grand. Okay. And I can pretty well do that without having a ton of risk. 70 to 80% of the properties that I buy and resell, I don't even visit ever, ever. But if you're buying at such a substantial discount, there can be so many mistakes made so much wrong. Now the kicker to that is no one's calling you, Justin, no one's getting on the phone and saying, Hey dude, I got this house. It's worth 150. I'm going to sell it to you for 75. Do you want it? That's how it works.

Well, that's the next obvious question. Well, dude, Logan, where the hell do I find this 50 cents on the dollar deal? Right. I mean, that's what I'm even interested to your answer. But everyone's going to say, OK, great, Logan. I get the concept. Where do we find it? So you got to look for problems.

So like that guy, that kid on the schoolyard that always finds himself in problems. That was me when I was younger. were bad problems these are good problems yeah so they're good problems for me so when someone has an unresolved probate maybe three or four generations of incomplete probates um they have judgments or liens that outvalue the property sometimes baby daddy's cousin didn't pay his child support and he's got a hundred thousand dollar child support lien someone in their family has got evicted from their house so you're looking almost you're looking for almost paperwork that supports the problem right liens probates yeah uh uh red tape within the city to say these people are fighting problems bankruptcies lost owners all the judgments and liens breaks in the title chain.

So how do you get away from a property that has more liens than the value of the home? So strangely enough, those judgment liens are assets to one person and their liability to the other. The person that they're an asset to, they know, and this is pretty standard in the debt collection business. If you don't collect that thing within the first couple of years, the odds of it being collected are just exponentially decreased. So for example, if someone sued a business owner that owned a small fence company or something like that and got a $100,000 judgment against them, if they don't collect that in a couple of years, I can usually call and ask to buy that judgment, $5,000, $10,000, $15,000, almost nothing.

But I've got one attorney on staff and I'm bringing on another one. I have four attorneys now that are third party still. So I've got pretty good, those legal bills are anywhere from 30 to 50 grand a month consistently. But first thing I do is I inspect it and see, was this judgment, was it indexed correctly? Was it recorded correctly?

Are the names on it correctly? If they're not, I can call the title company and say, please take this off the title commitment. It has insufficient evidence. Half the time, say, please take this off the title commitment. It has insufficient evidence. Half the time, they will just take it off the title commitment, but most people don't even know how to have that conversation. So that's a big kind of start in the beginning. Outside of that, you can also challenge these.

Most of the folks that get these big judgments and leans against them, they didn't fight it and they didn't have a good attorney. So immediately, if you tell the um the creditor look i'm gonna file a bill of review if it's within four years we're gonna open up this lawsuit we're gonna go check to make sure everything was done correctly they got to pay legal fees they know that some of the mistakes they made are going to be looked at yeah they're ready to settle quick they want out yeah or i could just offer them the money in the beginning and they know it's almost uncollectible so those are ways to get all of those debts down quickly um but owners work the same way you know they've got a problem they've been trying to sell this property

for five years and they can't a realtor tried to sell the market and it got jammed up in title so they can get their 200 grand then a wholesaler offers a 125 they take a shot at it yeah years later and i'm telling them look give me that old title commitment or i'll run your own title at work i'm gonna look at this in my office with my people and if we decide we're gonna make you an offer it'll be a cash offer and you can come get paid tomorrow so here's the thing that everyone needs to hear besides the uh granular tactical stuff you just said yeah why you make the money you make why you're able to do this is because you provide value where there's a lot of value needed that most people aren't willing to take the time

to do it. That's right. And you know, when you go to a city like Austin or Miami, for example, all these deals, if you're in the middle of a high value area, developers have hired lawyers to go through and really deal with this. Yeah. But when you're looking in a rural neighborhood for development land, old farmers don't do it. When you're looking at downtown, you know, one to 10 house vacant lots, they don't spend the money or the time. So it's a little bit too much resourceful.

I guess too much resources on that particular problem. But if a guy like me can come in and get the equity on it, well, then this guy didn't have to spend 30,000 illegal bills to do it. I can do it. That's right. And you're spending the 30,000 illegal bills. Well, for me, because I equity on it, well, then this guy doesn't have to spend 30,000 illegal bills to do it. I can do it. That's right. And you're spending the 30,000 illegal bills.

Well, for me, because I've done it and I've got a ton of experience, it won't cost me the same thing that costs 30 legal bills. Right. That same lawyer

is doing 10 deals where if I had to go do it, he's got to do one deal and it's going to cost me 30 grand. That and a big part is their attorney, if they haven't done it, they've got to do

a lot of exploratory work. For us, I've seen countless of these. So I go in and say, we're going to do this, this, and this. And I'm ready in 15-minute review. Whereas their attorney is going to schedule a meeting, start charging by the hour, have a discussion, go back and research, do their five grand deed, and then you don't know what to do yet. Yeah. And I've got a plan already. So a couple quick questions to that just out of my own curiosity.

Do you still oversee and overlook all these deals first you have you have someone like a general manager like i do that would take that on for the most part so what i started to find is i started work with really impressive people maybe one in 10 would be super impressive and they'd get to the point where like this dude's gonna roll out like he doesn't need me anymore yeah but i also know the challenge he's gonna face he's gonna have to get his own bookkeeper he's gonna have to get to get his own rent. He's going to have to hire and train people. He's going to have to figure out how to capitalize himself because most people struggle with those things. So what my proposal to my, currently I've got five operating partners. My proposal is,

look, let me open up an LLC. You own half, I own half. I'm going to capitalize it. My attorney that's next door in our office, my bookkeeper that's over here, my CPA that's in our office, and my front desk gal they're all going to be part of an overhead burden we'll pay every month together but now you have your own company so you're going to be a partner with somebody someday why don't you be with me five partners that run their own company now love that good for you i mean that is guys good people for leaving a hundred percent and that's obviously the nature of our beast dude yeah is i even tell people if you're looking hire, I would encourage people to do it to some way like you're doing where I'm saying,

Hey, learn the business for free. I'll teach you everything you need to know. And then within six months or a year, go out on your own, go cry. I want you to go see what the real world is like. It's fucking tough. It's not easy, right? But it gives the opportunity for them to say, well, hold on big brother i might still kind of need you here you say great give me a great give me example uh let's just say i worked for you for a year i feel like oh i got this shit i don't need logan anymore how would you approach me to say let's do this together versus justin you go and do it yourself so humans go through these cycles happen in relationships happen in business partnerships it happens even employment

in the beginning all they want is that job they'll even work for free those are main commissions and they're just thankful they got it and then a year in they start to get entitlement like i don't need this that much i already got it i'm good they need me that starts to happen and you can kind of sense those things yeah i start to look for that kind of stuff when it starts to happen and i take people on walks i like to walk so let's go for a like to walk. So let's go for a walk. And when they know, let's go for a walk. This is a really good, really bad. But I talk about it, tell them what I sense happening.

And I say, yeah, I think you might be ready to go out on your own. This might be the time. And I bring it up as quickly as I possibly can. And that gives them the opportunity to address it or say, no, that's not what I wanted. But once that conversation gets to happen, I talk to them about what it looks like. They're going to make more money probably because they don't have to share any when they're doing those deals in the trading period they're getting 20 to 30 percent sure so you're going to get a chance to get all of it but you're going to have to get platforms and programs that some of them are not even approved for if you got private investigative programs to find people they can't get that without me yeah or without

being a licensed private investigator things like that you're gonna have to get that you're gonna have to go rent an office. For the first 120 days, you don't even get to do any deals. You just got to get all this stuff set up. And by the way, you pay less on your taxes every year because of the way I do our accounting. You're now going to have a higher tax liability. These are things you're going to have to do. And if you think that's a good idea, then it is the right answer.

But if you don't think that's a good idea, and you want to just become a partner and want to get back to the office today and now get 50% of the deal instead of 20 or 30%, then we'll start tomorrow. All right, everybody. Before we get back to the episode, let me give a big shout out to Roddy at The Rehab Depot for sponsoring this episode. Listen, everybody. If you want to work with the number one contractor across the country, please reach out to Roddy at The Rehab Depot. This guy runs all of our construction nationwide and works with thousands of other investors across the country. He is

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and sign up for weekly classes live with him. This will be the greatest investment you could ever make. If you want to rehab houses, what changes in their world? If they're a partner at 50% money, that's it. They still do exactly what they're doing, but well,

I'll tell you what else happens. They start to evolve into a spot where now I'm helping them hire. I'm helping them make management decisions. I'm helping them figure out the direction of their business yeah but they are kind of they take them all from me and they kind of run with it at that point are they going getting their own leads or are they still required or still relying on you to develop at this point i've basically shown it would go either way like i've got no more skills to teach you although i've experienced it will definitely trump your skills you know everywhere I'm going for my leads.

If you want to buy your own leads, if you want to go get them for free by hiring someone to do the research at Land Records, they can know. One thing that will rule out is my network. I get it. My phone goes bananas with inbound leads from folks that couldn't close deals, lawyers, judges, whatever. But generally, here's the ball run with it. I'm here to fix anything that goes wrong. You know, we, as a side note, we should figure out a way to have out of my community because

dude i have hundreds of members that come across shit that has so much hair on it and i go guys guys this is a pass i'd like you're gonna have to do everything you just said which is not my skill set it's not that i wouldn't be able to do it it's like you're just built there i built there. I did. Yeah. I'm built for volume and I'm built for speed and I'm built for that. Right. I'm not built to get eyeball deep in the trenches on one deal. Now, like I said, you get paid these massive rips. I mean, massive rips because you go provide value where someone like me, I won't, I won't provide the value. Cause I'm just like, that's too much. I'd rather go make my 25 pound deal over here versus 100 pound deal over here but you got the deal done that made you 100 pounds right so neither's wrong

or right what it is is again it's everything that's why it's all inclusive like you know how to go flip a home that I'm not saying you don't do that or you're not even saying you don't do that but what you have done is created a skill set um that has given you the ability to get deals where someone like me we're going to overlook it yep right investors normally want cheap quick fast you're right these deals are the opposite of right you're right slow kind of expensive to fix and not cheap to fix right but big profit right and so you know uh i have a friend tim har Herridge, who's incredible. Yeah.

He talks, yeah. So he just went and came and spoke at my little meetup in Dallas. He says you can have cheap, fast, and good, but you only get two of the three. You don't get all three, right? But everyone wants all three. That's the challenge, right? So what two are you going to choose? And I would encourage newbies, if you're watching or listening to this, start with a path of least resistance.

Like I would even tell you, even if you had a quarter million dollars sitting in your bank account, don't go flip homes first. Go wholesale two or three just to gain confidence, just to gain some certainty. Doesn't mean you need to be a wholesaler, but just go do that. You got to get in the business, get active, start to learn, pick things up. but just go do that right you gotta get in the business get active start to learn pick things up then once you do that you figure out which way to go same thing you and i did right we've just been in the game a whole lot longer right you were wholesaling fixing flipping and now you have verticals that are way longer way deeper but pay way bigger right that's right and that's the key of you know why the power of this is so real is there is no wrong if you can

think about it in your head and real estate, it's doable, right? Yeah. If you can find a path and you think there's some profit on there, like that's, that's what I love about the real estate business on a separate note. I remember I couldn't get into like law school and I,

my dad wanted me to be a dentist. You know, that's where he went to school for, but he became a CPA. Like I'm looking at all these professional licenses and at that age, I'm like getting high partying totally yeah but the neat thing is now i can make us more than most doctors i know because we sit down and figure out a problem bring value to marketplace get paid right and show up what we want where we want when we want and i was going to say the reason why

they're so um the reason why you have access to them or they're available is because no one's looking for that. No one intentionally besides you is saying, hey, I want to take on the headache of doing this. Because besides you, no one has the team. No one has the lawyers, the PIs, the people that can go do this stuff. No one has the TLO account or whatever it may be that you're utilizing. So they actually really have a lot more heavy lifting than even you do. At some point, you're that person though, right? Yeah. So I had to figure that out. So I bought it. I was buying early on. I was buying these vacant lots for super cheap before San Antonio had gotten its really big lift before the real estate market had turned around again. This was, I started looking at 2008 and nine, didn't do

anything until several years later, I started just kind of aggregating some lots. And I found that I was buying these things for $5,000 or $10,000. They were just across the highway from downtown. Central Business District. You cross the highway and boom, stuff is worth anything. $5,000 or $10,000 a lot. You've got a house. Yeah, yeah, yeah.

And I'd seen this happen in Austin and Dallas. And I thought, if the value bleeds across the highway, this stuff is like multiplication. That's where those numbers go. It's like you're not adding, it's multiplying. So I started buying all these properties. And there's a lot of title issues. And at this point, I don't want that. I'm not going to do it.

After I picked up a couple dozen of them, I'd spent pretty much everything I'd saved in the oil field. And I got a call from a realtor. He said he wanted to buy one of my vacant lots. I'd spent about 300 grand for about two dozen vacant lots. Realtor calls me, says he wants to buy one of them for 200 grand. Apparently, the values had risen since I was busy doing my work. A lot of this was off market trading. So you can't see it on MLS.

I had no idea. The dude buys it, closes on it. So a couple things happened. One of them, I'd gotten two thirds of my investment back. And I it so a couple things happened one of them i'd gotten two-thirds of my investment back and i still have a couple dozen lots left isn't that great it was huge yeah but i also thought wow i'm on to something let me go get some more well things are changing us so when i go back knocking on doors these people are like i want 100 grand i want 200 so cats out of the bag but when i got to one of these properties i wanted to sell went to the

title company and they said you own one eighth and what happened is i kind of got a little sloppy i was just buying five grand at a time this one guy was telling me i own it all look into land records and i did the best i could at the time i thought he owned it so i bought it five grand got a deed recorded no title insurance it turns out he had seven siblings dude didn't tell me about him yeah he got me but so i went to an attorney's office that was referred to by the title company and just start paying him by the hour and asking him questions what about this what about that how do i do this and over the course of the summer i'd work through all the judgments and liens were recorded i purchased all those shares of the property for very small money and i was in this

one for a little more than the rest of them but but I had learned how to go buy these problem. I guess it's just the tip of the iceberg kind of scratched the surface, but I'd learned how to buy these problem properties with no title insurance, with no title insurance. So now 80% of what goes through my shop, I buy without insurance. Okay. We got to stop right there. Full stop. Because I would argue to anyone else that is not Logan Fulmer sitting right next to me, do not buy properties without title insurance. And that's wise. Okay. So you agree with that?

A hundred percent. With an asterisk. Yeah. What is the asterisk? Why do you do it? What is the upside? How do you get through those? What happens if,

let's really dive deep into when, why you're doing what you're doing. So remember in the very beginning of our conversation, I said, if I can buy something for remarkably less than it's worth, I have a lot of protection. Let's just say you buy it for 5 cents on the dollar, 10 cents on the dollar, or even less. I'm going to use a hundred thousand dollars because it's an easy number. But if a property is worth a hundred grand, you have 10 owners. Each person's share is worth about 10 grand. When they sell it, they'll each get about 10 grand from the title company. If I buy each share for $500 at a time, that's five grand total, five cents on the dollar. Wait, right? Yeah.

Yeah. Five grand in $100,000 home. Five cents on the dollar. I've got room to file a quiet title lawsuit. I've got room to buy out a missing heir. I've got room to pay some delinquent properties taxes. I got room to carry it for a while. All these mistakes can be fixed. And there's generally a budget associated with each one of these typical problems. So when I go to these people, my pitch, usually they've already dealt with this problem. They know it exists. They can't solve it. My pitch is, look, the money I'm offering you isn't directly correlated with the value of the property. It's correlated with your seat at the table. I'm buying your seat at the table and you're going to leave and I'm going to take that seat. So I get to hear

all your problems with your siblings, all the problems of the property. I now have to fix those on my own. So I'm just about to take it to the dance from you. And I hope I get the pretty girl there, but I might not. I might make some mistakes and it doesn't work well. It might work for me like it has for you in the past. So I got a lot ahead of me of me can you see that and the moment they put me in their shoes instead of looking at me as some rich investor who's about to make a lick on yeah then it's different then they say fuck it i don't care i haven't been able to solve this anyway i'll take the 500 bucks this is huge put yourself in their shoes or them put it have them put themselves in that seat 30 000 foot view or like oh man i don't want to deal with that I'm done my seat

sucks yep and this guy is willing to sit in my seat and have to deal with it I'm out so then the next call and I make a couple dollars doing it a couple bucks yeah so the next call is I'm calling their sibling saying hey business partner Jenny who you threw out of the property and said never come back 10 years ago she's gone but i'm your partner now so maybe we should work this out and if they want to work it out great work it out if they don't there's the judicial system always has a resolve there is always a backstop to solve all problems in front of a judge so i tell them i'm here to solve it quick and easy for you but since i'm in the game if we can't we're gonna take in front of a judge and we're gonna see what he wants to do

and i know the law i know what he's gonna do but you don't yet so let's try to do this the nice way so let's just keep down this example there's nine other siblings now you have the 10th seat yeah and let's just say all the nine want to say fuck logan we're going all the way to the distance let me oh god that's rare usually what happens is there's one person that says f y'all i ain't selling it yeah i should have inherited this because i took care of mama right for her last three years i know that story for sure everybody right it's that common you know and you don't do this that one but the problem is that one isn't doing probates to cure the title defects to get all the owners entitled um that one or the administration of the estate either way

they're not mowing the place they're not paying the taxes anymore like they have this this claim that's they feel entitled to it right and maybe at one point you would make an argument that you were maybe then but if you don't defend what's yours it ain't yours that long that's how texas works and so do you only by the way that that's the next question where are you doing this what are the laws nationally do you only really know texas in terms of this i know a lot of other states okay but there's still a system in process ultimately a similar system works in the rest of the states some of your creditor laws are different some of your probate laws are different but at the end of the day it's very similar okay so let's keep going down the path. You have a seat.

There's eight others that are maybe on the fence of what to do because they're all like, I don't know. Maybe they have the one F you. Yep. So the eight others, once a sibling sees that they got money and they see that it was real and it worked, they start to fall. That's what usually happens. This is where you need the time. You need the financial bandwidth.

No doubt. Can't use debt on these. You're cutting a real check. It's cash. Which, again, poses certain challenges for newer investors. This is why, if listening, this is a lot more of an advanced strategy, right? Doesn't mean you can't do it. Just make sure you have the cash and you know what you're doing.

I'd tell you to go find Logan. Or you find somebody. Dude, probably a third of my deals are referrals. I pay referral fees. I pay JV fees. So find Logan. Logan, what's your Instagram? Logan Fulmer. Simple. Logan Fulmer. Find him if you have this kind of stuff. Uh, and I'm also going to probably ask you to join into teaching some of this stuff

to my members here at the side flipping. What I like people to do is get a general understanding of what it looks like and then call an expert. If you got the money, you don't need me. And I'm not trying to take share on your business. Call a local lawyer and start working through those problems yourself. Your first problem is to be a little more expensive to fix. After that, it gets cheaper because you start to know what you're doing. But I would really recommend you call someone like me and work through the deal with me

because I'm obviously going to take a share of it, but I'll spend my money and I'll coach you on it. The newbie's not going to know. That is a no-brainer. They should be reaching out to you 100% of the time. Listen to me. Reach out to Logan because he'll actually do it, and he has the money to do it, etc. Reach out to Logan.

So let's keep going down this path because I'm even interested because I get, like, I spend a lot of money every year nationally. I get a lot of deals in Texas. I love Texas. I have members of my community within Texas that I think initially need to start reaching out to you immediately. I'll put you together. Because they get the craziest deals down in San Antonio. Yeah. And I'm like, God damn, you have the craziest fucking deals down here. He's like, this is San Antonio. I'm like, yeah. So I say that to just say, let's walk through this. So now you have the eight other people that over time they start to fall, right? They may even want a little bit more money. And

you say, Hey, I gave, I gave Jenny 500. They want a thousand. I'll give you six 50. That's part of why I start offering just peanuts in the beginning. Cause I don't know what's ahead. So the first few people, they get almost nothing, very small dollars towards the end. Sometimes I have to pay up. You're right. But once you get closer to the end, your risk is reduced because you have more certainty. You own more shares. You solve more problems. So it's almost like a business buyout, right?

You're almost, I mean, it is, right? I mean, it's an asset, meaning it's a house. But it's when these business brokers come in, they start buying shares until they can get majority and then they say guys you have no more vote so name your number because you're out like i'm just gonna make this happen right that's exactly it i love that i just love psych a lot because i love business right and so i just like psychologically it's a chess game yeah um man so interesting and so essentially the people phase you you cut a check, essentially. Where do lawsuits come in? Where do you have to go to the city? Where do you know,

where does the law come in where it's like, all right, I'm going to have to take this one, either the distance or I have to get so-and-so involved and to get, you know, title companies to approve or get this taken off of title where does that play all in so in the beginning you've got to understand the laws in your state because if you're an affidavit of airship state which allow which requires pro or has probates but also makes a provision for an affidavit of airship under the probate or this is under the state's code you can file an affidavit instead of doing a full probate which is a lot quicker and easier if you're in a state like New York or places like that where you've got Florida as a probate state as well. You must file an administration of that estate, even if there's no will.

You've got to go in front of a judge. That's much slower, much more complicated, and it's tougher to get better discounts. But there are probate lawyers that can speed that up typically because they know what they're doing versus you. They will, but the difference is you have to get in front of a judge, and you have to have a personal representative involved that's a family member. And once you get that done, you can then buy shares of the property. But in my state, I can have a family member do an affidavit of ownership today, and I can go buy shares on the street tomorrow. So my state is better for it, but it still works in your state.

It just happens a little differently. So you've got to know that in the beginning. Once you understand that you're dealing with people you're buying out as much as you can if there are two parts then you've got your holdouts and you've got your you know breaks in the title chain or judgments of lien so your holdout you should have to have a real conversation with you and say i'd rather work this out with you do you want a little bit more money i've got a top number that i can pay yeah and if it works it works it doesn't i'm gonna give that money to an attorney and go through the judicial system what that looks like is one of two things one of them is a partition lawsuit so section 23 of the texas property code

is partition of real property yep and me and your brothers and we can't get we could be by the way take note you two it could be we really could be good but. But if we can't get along, what to do with the property, I want to sell you dough. We file a partition lawsuit. And if the property can be divided equitably, like a 100-acre ranch can be cut in half, the judge will do that. If it's a house or a smaller property that can't be divided of kind or equitably, the judge will just order it to be sold. And then I get my share of the proceeds. You get your share. So let's put you in the one-ninth owner and I'm in the eight-ninths owner. I have the amount of money I can give you.

And if it makes sense, we have it. If not, we go in front of the judge and the judge will order it to be sold at market. You get your one-ninth and I get my eight-ninths. Since I bought a lot of equity along the way, I'm still going to make money. You're still going to get your one-ninth. Right, which is in the example, I think it was a $100,000 home. Yeah, and at that price point, it doesn't even make sense for you. You're still going to get your one night. Right. Which is in the example, I think it was a hundred thousand dollar home. Yeah.

And that price point, it doesn't even make sense for you. Might as well take my offer. Right. That's why I've got to be open, non-threatening, very transparent with them. But sometimes folks pride and ego and anger,

or his IQ, they have a really, sometimes our IQ gets in their own way. If it's low. For sure. Well, so what is, what's the length you would expect a deal

like this this example ted airs i know that might be excessive but ted airs hundred thousand dollar home like do you kind of us just like we always underwrite while we're flipping homes we're going to hold this for six months nine months a year this rehab is going to take that long right yep so you assess the cost of holding when you find a deal like this there's 10 errors again excessive but you get my point what would you assess the holding time for really getting this done if this works quick and easy and everybody's on board i mean i've gotten these things done in a week literally people were shot to my office me and my attorney getting deeds give me the money give me the money give me the money yeah yeah i did a 65 air deal in

nine months and almost all of them were done in the first month or two. But traditionally, it could take, if I've got to file a lawsuit, it could take anywhere from nine to 24 months. Fair. Slower. I dislike that. But I will tell you, 90% of the time, once I file a lawsuit and the defendant's been noticed by the officer of the court, they come back and say, all right, you're not kidding around. Let's cut a deal. So really it's only one in 10 times the actual lawsuit has to get filed.

And so you still are paying your lawyer for time he's spending. And this is why I say, like, this is advanced. You need to have cash. You need to have a bandwidth. You need to be able to do stuff like that, right? And I like that, right? Because I think there's different levels of my audience that are listening to this right now. That's why I say go follow you but here's the cool thing if you

don't know what you're doing out there and you want to take a run at it take a run at the hundred thousand dollar property with half a dozen heirs because if you're running a business you got some money in the bank set a budget of fifteen thousand dollars twenty thousand to buy all these people out twenty grand ain't gonna bankrupt your business but you will earn so much in that first deal it is incredible yeah then as you work at it you grow i mean today i'm doing it on multi-million dollar properties i was just gonna ask like what type of when you underwrite these deals what type of budget are you like i think i'm gonna need 35 grand for this property i'm gonna need 10 grand for this property do you kind of like monetize or at least put a budget together per property once you're like all right we're going for this property do you kind of like monetize or at least put a budget together per property once you're like all right we're going for this one yeah it's very circumstantial so i gotta look

at it and say judgments and liens title defects and then characterization of owners are they friendly unfriendly how many owners are there where are they located i look at the mechanics of that and at that point i say we're going to be all in for more or less this amount of money yeah now there's another kind of like a ripcord that I'll pull if it's just getting too hot in there and it's not worth the fight. Or on this $100,000 deal, I'm not going to sue that guy because his equity is over $10,000. I'll spend more of that legal fees. In that case, what I do to him is say, look, dude, your equity is worth $10,000 minus the taxes I paid off. It's actually worth $9,000.

Let's go sell this at market together and we don't have to go see a judge. You're going to get your share of your 10 grand. I'll get my share of my 90 percent, my 90 grand. Right. Let's just go do this together. And usually when folks can go directly to the market and get as much as they would possibly get, most times they agree. Sometimes I'm frustrated because I spent a bunch of money. I pay taxes. And if I think it's unfair or they're really big jerks, I say, no, you're going to pay me your share of the taxes you owe me. Yeah. Before we go to market,

I could throw that wrench in the spokes, but sometimes it's 20 at the deal that we have to use resistance, right? Just get it done. Right. Even if you don't make as much money as you want, you can make 50 or you can make 38. Now take the 38 and say,

let me just generally speaking that happens, but I picked up 50% interest in a $5 million deal for $10, thousand dollars you might want to take it the distance in that case yeah i don't care what goes wrong i'll spend i spent 200 grand in legal fees already quarter million not on this one no okay but i've had projects where i've spent 150 250 grand legal fees i would spend that on this one to take it the distance because my upside is so so large there's no doubt yeah so what piece of advice would you give someone that first of all do you think this is something in any state what would you recommend someone that lives in Oklahoma or Florida like where do you start with something like this what you know besides just calling you where can people start to understand how to take

this on? And then the part two of this is like, where do they even find these deals? Where would you tell them to go find these deals? So these are literally everywhere. I could drive through your city and probably find 10 of them this afternoon before I go home. They're everywhere. If you don't want to spend the time to dig into land records like we do and buy the, usually they're all delinquent on taxes. When the problems get really bad, people quit paying the taxes. So that's point number one. Go find tax delinquents.

That's a start. But if you don't want to spend any money or time, call everyone that you know is investing, wholesaling, or works at title companies and say, do you have any deals that couldn't close because of big title problems or disputing ownership? Would you refer them to me? That's a goldmine right there.

Everyone listen to that again. Rewind that again. That's it. That's a goldmine, meaning they already did the work. They already have it. What they bring to you is the context, contact information of the owners. They probably have a title commitment already. That's a lot of research. And the really important part about that is the family has already been made aware of how complicated and bad the problem is before you show up. I've had folks where I call on their hundred acre ranch and call them and say, we've identified that you have substantial title problems. We'd like to buy it. And they're like, what? Who are you? This is all a lie. It's not true. So when the problems are well known to begin with, my job's a lot easier and their job will be too. Totally. So this leans in heavily on what i actually firmly believe

which is a cheat code for our business and it's every business i was just asked to go keynote speak later this year at a conference there's going to be 300 of the top investors like high level all seven figures um and my keynote speech is going to be about people and going from good to great. The difference is people. Well, you just said a path of least resistance. Call your wholesalers, call their hard money lenders, call your title companies, call whoever that has access to these deals that couldn't close. Yeah.

Call them, build a relationship. Say, here's the thing. I have a skillset that i could actually probably no guarantees get that deal across the finish line for you it'll be mutually beneficial but what does that go back to so i'm gonna put hold on i'm gonna put myself in folks that are listening shoes and maybe folks in your community those kind of folks that say wow i want a massive margin deal but i don't know i don't have any stare me in the face and i don't know how to fix them this is an interesting thought i've never thought about this way they could call everyone in their

network and ask the things that we just listed off yeah write them down on a piece of paper and make sure the value usually i'd like to target properties are 250 000 or greater because you can pay fair money to people and and spend legal money and still do well net 100 grand i like to net 50 to 100 grand at least on these deals. Sure. Many of them are substantially better, but that's kind of the threshold. So if you're looking for properties on that price, get the notes, then either call it to our local attorney.

If you want to take it on your own or info at ARP USA.com is my inbound lead inbox. We will never go around a person on a deal because that is our network our name and our network is how we get probably a third of our business and build us we will never go around somebody but if you send that information in we'll call you and talk through you with it it could be the only jv with you and you may not even have a thing under contract but you got to go now get it from someone to bring it that's right it costs literally nothing and could be a huge spread deal is it is always about people always yeah even in your seat as you just promoted yourself which i'm glad you did you should be

doing that because you know me you have access to this that'll get tens and tens and tens of thousands of downloads over time it'll live on apple and it'll live on youtube and people will reach out to you over time because of this connection going from good to great is people is the people every time right and i would tell anyone here that is the difference between you doing okay and you actually winning in a big way like logan myself or or others, right? Is our intention with people, right? He gave you a great idea to start, which was like, call your wholesalers, call your hard money lenders, call your escrow companies, figure out what deals didn't close, build the relationship, call the agents, build the relationship and say, Hey, I have a skillset that I think I can help you get the deal to close. I'll pay you a fee if it closes. It's people. Yeah. Every time.

On that note, the first five years of this business or seven years was very very technical yeah in the last two or three years i'm spending a lot of time looking at partner satisfaction recruiting new employees for the organization i'm literally dealing with people now much more so than any technical i haven't learned any technical thing in quite a while if people don't that they don't they don't continue the growth right the technical the tactical it could get you a multi-million dollar business but if you don't start focusing on people right you're gonna be working your ass off doing that technical thing forever yeah and that's the reality is right is is people over profit each and every time now there's different phases of

that for you and me right we run businesses where we have to be the leader of the industry leader of the business not necessarily in the tactical but now I don't even lead. Like I have my executive team, I lead, and then they lead their teams. Right. So there's iterations of all of this, right. Where it's not just go hire your acquisition person or your executive assistant, or go hire the one, like, as you grow your ability and your skillset needs to grow. Right. So this is why I, I pay coaches. I joined masterminds. I spend well into the six figures every year because i know i need to continue to skill set up to get to where i ultimately want to go right your position that's going for the people it's people every time there

are no books with this and no videos on youtube to talk about this part of it because you're catching some dude who's running a business that's far bigger than yours or mine would be and you're asking him how does this happen he literally has a 15-minute conversation with you and gives you the abstract and we did and you're like for real okay you're all i just had a meeting two weeks ago with someone who just exited for 300 million dollars do you think he knows a thing or two that i don't know yet yeah right and so he's sitting down with us having a structural game plan put in place all these cool things and that will level me into a place where you know there's potential to be in that that marketplace but you know if anything again it's being around the people

being intentional so if you're listening to this again i can't promote it enough follow logan right meaning like he's going to be the person that's going to be able to help you, right? And so Logan Fulmore on Instagram. But dude, do you have any parting words for maybe you could kind of part two ways. You could talk to the newbie who doesn't know much and is like, I've got to figure this out. Or you could talk to the more advanced person who's like, dude, this is going to be my new strategy. So the newbie, I would tell you that you need to get in there and start digging around. Talk to the more advanced person who's like, dude, this is going to be my new strategy. So the newbie, I would tell you that you need to get in there and start digging around.

You would be surprised. YouTube and Instagram and the rest of the internet now have so much technical information. It's mind-blowing. That didn't exist. I was having to go buy the property code, the estate's code, the tax code, those things and learn from them. Now, this stuff is on Google. All the laws, the codified laws are on Google. That is crazy, yeah.

You can read from expert title attorneys. All that stuff's out there. Spend some time reading to familiarize yourself with it. And if you think it's something you really want to get into, I'd encourage folks to do it. But I would still encourage people to send it to an expert as quickly as you can. I've got a deal right now. A dude called me yesterday morning. He's in contract for $165,000 on a property. It's worth $300,000 to $350,000 as it sits.

There's an issue because two men, before they could get married in their state, had a joint tenant with rights of survivorship. That's not how the law works in our state. The difference is if you die, do your kids get your share or does your spouse get your share? But if you're not married, it was same-sex marriage. We didn't have the laws back then for that. So this was their workaround for that. Well, when the partner died, there's a piece of paper that he didn't basically create that kind of created like a common law marriage in terms of real estate property. So the deal can't close. And the seller has now said, well, if you don't close this in the next day or so, I'm going to go sell it on market without you. Now, I think he's got other issues, but he's not smart enough to know that

guy called me with it yesterday. This is a complicated one. I had never actually done it exactly like this, but I got my attorney on it immediately this morning. A demand letter is going out to that seller that says, you ain't walking away from this deal. And you also have to provide this document. If you don't provide this document, you need to provide us another 60 days for us to try to work through this problem. And if you don't perform what the contract says, we're going to sue you for specific performance. We need an answer by five o'clock today or an extension, one of the two. So this dude is about to lose his 130 000 spread deal he called me i got my attorney on it we mailed it last night things going out this morning i also found that the property was sold through a

title company 10 years ago that created that deed a special language by this morning before i got off the plane i'm talking to the underwriters of that title plant saying we all insure this transaction again without this extra piece of paper because you insured it the first time yeah i got the resources i know what i'm doing so i'm gonna split the deal with this guy car it's gonna end up netting about 100 grand i'll take half he'll take half but we'll flip this thing in two weeks and i'll have it solved in about a week isn't that crazy otherwise he'd have walked away from 150 000 maybe 100 which goes back to what point well people. People. People. Boom. Right?

Yeah. So for those of you scared to cut a check for a coach, for those of you scared to cut a check for a mastermind, get out of your own way. Because guess where Logan's at? Guess where I'm at? Guess where the players that want to or that can help you? They're in those rooms.

They're there to help you. And it frustrates me when people are like, oh, but I want all these things, but I'm scared with my money well that doesn't align you're gonna invest in bitcoin or cryptocurrency or blue chip stocks you're gonna do that but you're not gonna pay an attorney to train you or someone to mentor you i got a dude for nine months of the year he tells me exactly what to eat when to eat more when to eat less all that kind of stuff can i figure it out yes but this dude tells me right now i'm gonna build it and i get to walk around all summer with a six-pack at 42 years old when everybody else is over here trying to figure all this crap out can't get the

answer dude it's over it's done it's fixed get to the front line yeah bro this has been one of the better more entertaining podcasts just because dude what your skill set is so unique in our space uh you know i talk about being dynamic that's why I was happy to have you on because this is as dynamic. You are using all the tools and all the tool belts that there are out there, to the point of attorneys to PIs to you name it, right? And you need to know state law and marriage law and all these things, which is such a higher level of uh utility if you will in our

space dude i'm i'm very excited for this podcast it would be so i'll leave y'all with a special this is a fun one this is a deal i ate three months ago okay this has so once you solve the problem then we look at it and say what do we do should this go seller finance route we carry the paper do i make it a rental if it's a warehouse that I like? Do we just flip it and go make some money, just dump it on the MLS? Or the last couple of years been doing some more entitlement work. This particular property is up in the Houston area. It fits several hundred houses and a developer's son was working on it, but the developer lives in West Texas. The developer's son sadly passed away mid-project and we got wind of it through a title company. I think that's of it through a title company.

I think that's where it came from. Anyway, we take a look at the deal. The developer said, look, can I go develop it? Yes. I live so far away. It's just not worth it. I'll sell it to you for my basis. So I contract it for $5 million for the several hundred acres.

I've got a six-month option on it. And I think I give him like 50 grand in earnest money, something like that. We go back and I bring in my fee developer because I'm not an expert at that. I'm going to pay the fee developer a big split of the deal. Go to the municipality locally and get brought up to date with where it was at. Get a plan to finish the entitlements. Get a development agreement completely negotiated with them. And now we're pitching it to builders.

And it's going to sell for $10 million. I contract it for five. And our spend totals about $200,000 while we own it. So it's going to end up netting about $4.5 million. And it had a distress component to it because the owner didn't know what to do with it. And then the original owner passed away. So there was that component, and then it was developed. It should close by the end of the year and net about $4.5 million.

Isn't that crazy? So when you look at a ranch a ranch property we used to just flip those now we look at them and say can we put a house on it and develop it and sell it to a building yeah yeah so it can go from as small as a hundred thousand dollar downtown lot san antonio to a 10 million dollar ranch that's gonna have homes several hundred homes on it that's phenomenal dude this has been a hell of a podcast appreciate you bro no doubt thanks for coming all right guys that's all for this episode go check out the science of flipping go to justin colby.tv watch this episode follow logan fulmer on instagram we'll see you on the next episode peace